Saraswat BanK ORIGINAL
76
PROJECT REPORT ON BANKING SECTOR SARASWAT CO-OPERATIVE BANK SUBMITTED BY SUDAMA EPPILI SEAT NO – SEMESTER V T.Y.B.B.I UNDRER THE GUIDENCE OF Mr. PALLAV DAS Submitted to University of Mumbai in partial for the fulfillment for the requirements of the award of degree BACHELOR OF COMMERCE (BANKING & INSURANCE)
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Transcript of Saraswat BanK ORIGINAL
PROJECT REPORT
ON
BANKING SECTOR
SARASWAT CO-OPERATIVE BANK
SUBMITTED BY
SUDAMA EPPILI
SEAT NO –
SEMESTER V
T.Y.B.B.I
UNDRER THE GUIDENCE OF
Mr. PALLAV DAS
Submitted to University of Mumbai in partial for the fulfillment for the requirements of the award of degree
BACHELOR OF COMMERCE (BANKING & INSURANCE)
PATUCK GALA COLLEGE OF COMMERCE & MANAGEMENT
SANTACRUZ (E), MUMBAI – 400055
2012-2013
CERTIFICATE
This is the certify that the project entitled “PROJECT REPORT ON BANKING
SECTOR ON SARASWAT BANK” is a true and satisfactory work done by Mr.Sudama Eppili,
T.Y.B.B.I, Roll No. 05. The report is to submitted to university of Mumbai in partial fulfillment
for the requirement of the award of the degree of “Bachelor of commerce (Banking &
insurance)” for the academic year 2012-2013.
----------------------------------- ------------------------------------------
Signature of Project Guide Signature of External Examiner
---------------------------------- ----------------------------------------
Signature of Coordinator Signature of Principal
College Seal
DECLARATION
I, Mr. Sudama Eppili, student of Patuck-Gala College of Commerce & Management. T.Y.B.B.I
(Sem V) hereby declares that I have completed the project on “PROJECT REPORT ON
BANKING SECTOR ON SARASWAT BANK” in the academic year 2012-2013.
The subject matter contained in this project is a research work and most of the work carried out
is original and was gone under the guidance Mr. Pallav Das.
The information submitted is true and original to the best of my knowledge.
------------------------------
Sudama Eppili
Roll No: 05
ACKNOWLEDGEMENT
It is my nearest and sincere desire and ambition to acquire profound knowledge in the study of
banking and insurance. I have had considerable help to advice at very outset of his project. It is
my pleasure to acknowledge the help and guidance from those personnel and to thank them
individually.
First of all, I express my sincere thank to Mr. Pallav Das, Class teacher of our college for having
given me chance to undergo the project.
Secondly, I convey mi sincere thanks to the Course Coordinator Ms Byshi Panikar for her
valuable suggestion and co-operation which help to me complete the project successfully.
The compilation of project is a milestone in the life of the banking & insurance and its execution
is inevitable without the co-operation of the project guide. I am deeply grateful to my project
guide Mr. Pallav Das for the valuable ideas, required suggestions and encouragement for refining
this project study.
Finally, I think all the staff of our college and my friend for their valuable support and
contribution to my project.
THE ROLE AND PERFORMANCE OF
SARASWAT CO-OPERATIVE BANK
IN INDIA
Macro analysis
1) INTRODUCTION
2 Current trends and technologies
2.1) Internet banking
2.2)Phone banking
2.3)Mobile banking
3) Market structure
3.1) Globalization
3.2) Indian banking market
4) Banking Terminology
4.1) Bank Rate
4.2) Repo Rate
4.3) Reverse Repo Rate
4.4) Cash Reserve Ratio
4.5) Statutory Liquidity Ratio
5) Government Policy
5.1)Scheme for financial assistance
5.2)Medical expenses
5.3)Illness covered
5.4) Customer centric banking
6) Top 10 banking companies in world
7) Top 5 banking companies in India
MICRO ANALYSIS
8) About Saraswat Bank
9) Current Position
9.1)Graph : Total Business
9.2)Graph : Working Funds
9.3)Graph : Deposits
9.4 ) Graph :Advances
10) Financial Analysis
10.1)Maximizing CASA deposits
10.2) Reduction in NPA
10.3)Marketing
11) 4 P’s of marketing
11.1) Product
11.2) Price
11.3 ) Promotion
11.4) Place
12) HR Policy and organizational structure
13) CSR (Corporate Social Responsibility)
14) Effects of recession on Indian banking sector
15) Govt. Policies
16) Awards and recognition
17) Conclusion
18) Bibliography and references
MACRO ANALYSIS
INTRODUCTION
The first bank in India, though conservative, was established in 1786. From 1786 till
today, the journey of Indian Banking System can be segregated into three distinct phases.
They are as mentioned below:
Early phase from 1786 to 1969 of Indian Banks
Nationalization of Indian Banks and up to 1991 prior to Indian banking sector
Reforms.
New phase of Indian Banking System with the advent of Indian Financial &
Banking Sector Reforms after 1991.
Banking in India originated in the last decades of the 18th century. The first banks
were The General Bank of India which started in 1786, and the Bank of Hindustan, both
of which are now defunct. The oldest bank in existence in India is the State Bank of India,
which originated in the Bank of Calcutta in June 1806, which almost immediately became
the Bank of Bengal. This was one of the three presidency banks, the other two being the
Bank of Bombay and the Bank of Madras, all three of which were established under
charters from the British East India Company. For many years the Presidency banks acted
as quasi-central banks, as did their successors. The three banks merged in 1921 to form the
Imperial Bank of India, which, upon India's independence, became the State Bank of India.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and
1913, Bank of India, Central Bank of India, Bank of Baroda, Canada Bank, Indian Bank,
and Bank of Mysore were set up. Reserve Bank of India came in 1935. Reserve Bank
of India was vested with extensive powers for the supervision of banking in India as the
Central Banking Authority.
The following are the steps taken in chronological order by the Government of India to
Regulate Banking Institutions in the Country:
1949: Enactment of Banking Regulation Act.
1955: Nationalization of State Bank of India.
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits over 200 crore.
The nationalization of banks in India was initiated in 1969 by Mrs. Indira Gandhi, the then
prime minister. After the nationalization of banks, the branches of the public sector
bank India rose to approximately 800% in deposits and advances took a huge jump by
11,000%.
In1991, under the chairmanship of M. Narasimham, a committee was set up by his name
which worked for the liberalization of banking practice. The country was flooded with
foreign banks and their ATM stations. Efforts were being put to give a satisfactory service
to customers. Phone banking and net banking were introduced. The entire system became
more convenient and swift. Time is now given more importance than money.
The commercial banking structure in India consists of:
Scheduled Commercial Banks in India
Unscheduled Banks in India
Scheduled Banks in India constitute those banks which have been included in the Second
Schedule of Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks
in this schedule which satisfy the criteria laid down vide section 42 (6) (a) of the Act. As on
30th June, 1999, there were 300 scheduled banks in India having a total network of 64,918
branches. The scheduled commercial banks in India comprise of State bank of India and its
associates (8), nationalized banks (19), foreign banks (45), private sector banks(32), co-
operative banks and regional rural banks. "Scheduled banks in India" means the State
Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955), a
subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959 (38
of 1959), a corresponding new bank constituted under section 3 of the Banking
Companies(Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970), or under
section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980
(40 of 1980), or any other bank being a bank included in the Second Schedule to the
Reserve Bank of India Act, 1934 (2 of 1934), but does not include a co-operative bank".
"Non-scheduled bank in India" means a banking company as defined in clause (c) of
section 5 of the Banking Regulation Act, 1949 (10 of 1949), which is not a scheduled bank".
SARASWAT CO-OPERATIVE BANK
CURRENT TRENDS AND TECHNOLOGIES
Technology plays a very important role in bank’s internal control mechanisms as well as
services offered by them. It has in fact given new dimensions to the banks as well as
services that they cater to and the banks are enthusiastically adopting new technological
innovations for devising new products and services.
The latest developments in terms of technology in computer and telecommunication have
encouraged the bankers to change the concept of branch banking to anywhere banking.
Use of ATMs and Internet banking has allowed ‘anytime, anywhere was banking’ facilities.
Automatic voice recorders now answer simple queries; currency accounting machines
make the jobs easier for the employees and ensure faster service to the customers. Credit
card facility has encouraged an era of cashless society. Today MasterCard and Visa card
are the two most popular cards used world over.
The banks have now started issuing smartcards or debit cards to be used for making
payments. These are also known as electronic purses. With increasing popularity of tele-
banking and e-banking, banking has become a 24*7 activity. And a system like Electronic
Clearing Service has made receiving dividends and interest easier and safer by making
bulk transfers from one account to many accounts (or vice-versa) possible. Mobile banking
too is growing rapidly and banks are using SMS as major tool of promotion, giving great
utility to their customers.
With such changes in technology, banks today have left behind their traditional role
of accepting deposits and lending money and focus on providing premium services to their
customers to retain their brand name and reputation in the market.
Internet Banking
Phone Banking/Tele-Banking
Mobile Banking
Internet banking: Internet banking Also referred to as E-banking, internet banking is
changing the banking industry and is having the major effects on banking relationships.
Almost every bank has a website today and provides for delivery of its products & services
electronically. In true Internet banking, any inquiry or transaction is processed online
without any reference to the branch at any time. Providing Internet banking is increasingly
becoming a "need to have" than a "nice to have" service, and it is soon to become a norm
from an exception due to the fact that it is the cheapest way of providing banking services.
Using e-banking a customer can view account balances & statements, transfer funds
between accounts, create FDs Online, request a DD, pay bills, order a cheque book, request
stop payment on a cheque, apply for and access credit cards, apply for loans and most
importantly gets easy access to complete information about various products and offers.
Phone Banking: It use an automated phone answering system with phone keypad response
or voice recognition capability. This feature is known as Interactive Voice Response System
(IVR). With the obvious exception of cash withdrawals and deposits, it offers virtually all
the features of an automated teller machine: account balance information and list of latest
transactions, electronic bill payments, funds transfers between a customer's accounts, etc.
Some banks engage call centers to provide 24*7 services to their customers, via toll-free
numbers. Others connect their customers to phone bankers, but in this case, the service is
only available for particular hours for which phone bankers are available. Some make use
of both i.e. toll-free numbers for some services, and phone bankers for the ones that require
professional assistance. Telephone banking representatives are usually trained to do what
was traditionally available only at the branch: loan applications, investment purchases and
redemptions, cheque book orders, debit card replacements, change of address, etc.
Mobile Banking: (also known as M-Banking, mbanking) is a term used for performing balance
checks, account transactions, payments, credit applications and other banking transactions
through a mobile device such as a mobile phone or Personal Digital Assistant (PDA).
Mobile banking and Mobile payments are often, incorrectly, used interchangeably. The two
terms are differentiated by their service provider-to-consumer relationship; financial institution-
to-consumer versus commercial institution-to-consumer for mobile banking and payments,
respectively. Mobile Banking involves using mobile devices gain to access financial services.
Mobile payments on the other hand may be defined as the use of mobile devices to pay for goods
or services either at the point of purchase or remotely. Bill payment is not considered a form of
mobile payment because it does not occur in real time.
The earliest mobile banking services were offered over SMS, a service known as SMS banking.
With the introduction of the first primitive smart phones with WAP support enabling the use of
the mobile web in 1999, the first European banks started to offer mobile banking on this platform
to their customers.
Mobile banking has until recently (2010) most often been performed via SMS or the Mobile
Web. Apple’s initial success with iPhone and the rapid growth of phones based
on Google's Android (operating system) have led to increasing use of special client programs,
called apps, downloaded to the mobile device.
MARKET STRUCTURE
GLOBALIZATION
Strengthening financial systems has been one of the central issues facing emerging markets
and developing economies. This is because sound financial systems serve as an Important
channel for achieving economic growth through the mobilization of financial savings,
putting them to productive use and transforming various risks.
Many countries adopted a series of financial sector liberalization measures in the late1980s
and early 1990sthat included interest rate liberalization, entry deregulations, reduction of
reserve requirements and removal of credit allocation. In many cases, the timing of
financial sector liberalization coincided with that of capital account liberalization.
Domestic banks were given access to cheap loans from abroad and allocated those
resources to domestic production sectors.
The Main banking sector can be divided into five distinct sub-sectors:
1. Clearing
2. Private
3. Off- Retail
4. Savings
5. Trust
Over the past 15 years the sector has grown by between 3% and 9% pa but has been
in decline since 2002 and faces a further sharp reduction.
Banking facilities on the range from basic current and deposit account facilities to
complex wealth management structures. However, there is no genuinely uniqueness
in Man banking products.
In a global context, the Man banking sector offers a mainly retail, mass-affluent
proposition targeting UK expatriates. Its chief revenue stream is derived from
international personal client business referred from UK and International Group
offices.
INDIAN BANKING MARKET
Indian banks have compared favorably on growth, asset quality and profitability with
other regional banks over the last few years. The banking index has grown at a
compounded annual rate of over 51 per cent since April 2001 as compared to a 27 per cent
growth in the market index for the same period. Policy makers have made some notable
changes in policy and regulation to help strengthen the sector. These changes include
strengthening prudential norms, enhancing the payments system and integrating
regulations between commercial and co-operative banks. However, the cost of
intermediation remains high and bank penetration is limited to only a few customer
segments and geographies. While bank lending has been a significant driver of GDP
growth and employment, periodic instances of threatened the stability of the system
Structural weaknesses such as fragmented industry structure, restrictions on capital
availability and deployment, lack of institutional support infrastructure, restrictive labour
laws, weak corporate governance and ineffective regulations beyond Scheduled
Commercial Banks (SCBs), unless addressed, could seriously weaken the health of the
sector. Further, the inability of bank managements (with some notable exceptions) to
improve capital allocation, increase the productivity of their service platforms and improve
the performance ethic in their organizations could seriously affect future performance.
The second unique feature of India’s banking sector is that the Reserve Bank of India has
permitted commercial banks to engage in diverse activities such as securities related
transactions, foreign exchange transactions and leasing activities.
EFFECT OF GLOBAL CRISIS ON INDIAN BANKING SECTOR:
India escaped a major and fatal injury to its economy even in the context of a full-blown
global economic crisis. This happened mainly owing to:
Our high savings rate at around 34% to 35% of GDP
Our lesser dependence on the external sector
Sustained and strong domestic demand particularly in India’s semi-urban and rural
sector
Strong regulatory oversight and a well-calibrated monetary policy
Our sumptuous foreign exchange reserves
A gradual and lower convertibility on capital account
Despite the strong prevalence of domestic sources of growth, the global financial crisis
interrupted the growth momentum in India. There was clear moderation in growth by the
third quarter of 2008-09. This is evident from the fact that the second-half GDP growth
was only 5.8%, down from 7.8% for the first half of the year and 9.0% for the previous
financial year 2007-08.
GLOBAL FINANCIAL CRISIS
As we are passing through difficult but challenging times as far as the financial sector is
concerned, I thought of sharing with you some of the issues which are currently engaging the
attention of the regulators around the world including the Reserve Bank of India for ensuring the
stability and resilience of the financial sector. Though, it has been analyzed threadbare in
different for a, it would not be out of place to start with a bird’s eye view of the global financial
crisis to put the recent developments in proper perspective.
The global financial crisis, though brewing for a while, started to show its severe effects from
the latter part of 2007 and into 2008. Under its impact, world stock markets fell, large financial
institutions collapsed or were bought out and Governments in most developed countries had to
use public funds to formulate rescue packages to bail out their financial systems. There has been
a broad consensus that regulatory failures are among the causes underlying the recent global
financial crises. Some of the more salient weaknesses identified as drivers of the turmoil include
lack of oversight of systemic risk, over-reliance on credit rating agencies, procyclical tendencies
of regulatory frame work, shortcomings in risk management practices, laxity in oversight of
shadow banking entities, financial innovation outpacing regulation and weaknesses in accounting
and disclosures.
As a result, there has been an international endeavor to strengthen regulation of banks and
financial institutions and bring about a greater element of convergence therein. Against this
backdrop, firstly, I would outline the drivers for changing regulation of banks. Secondly, I would
briefly present the global efforts aimed at formulating a regulatory reform agenda. Thirdly, I
would analyze the likely impact of the evolving convergence in terms of implementing the said-
agenda. Fourthly I will touch upon certain issues which are specific to Chhattisgarh before
concluding my speech.
TOP BANKS IN THE WORLD
The largest banks in the world based on market capitalization as of January 20, 2012.
Rank Bank Country
Market cap ($b,
20/1/2012)
1
Industrial & Commercial Bank of
China (ICBC) China 240.95
2 China Construction Bank China 195.85
3 Wells Fargo & Co US 160.72
4 HSBC Holdings UK 150.9
5 Agricultural Bank of China China 141.73
6 JP Morgan Chase US 140.95
7 Bank of China China 128.8
8 Itau Unibanco Brazil 88.17
9 Citigroup US 86.67
10 Commonwealth Australia 82.62
11 Royal Bank Canada Canada 76.56
12 Bank of America US 71.77
13 Toronto-Dominion Bank Canada 70.53
14 Banco Santander Spain 67.32
15 Westpac Australia 65.77
16 Mitsubishi UFJ Financial Japan 64.25
17 Banco Bradesco Brazil 63.91
18 Sberbank of Russia Russia 59.36
19 ANZ Banking Australia 58.48
20 Bank of Nova Scotia Canada 58.16
21 Standard Chartered UK 57.68
22 National Australia Bank Australia 56.04
23 US Bancorp US 54.85
24 BNP Paribas France 54.21
25 Goldman Sachs Group US 53.53
26 UBS Switzerland 52
27 Bank of Communications China 48.11
28 China Merchants Bank China 45.15
29 Sumitomo Mitsui Financial Japan 43.62
30 BBVA Spain 42.98
31 Banco do Brasil Brazil 42.19
32 Barclays UK 42.07
33 Deutsche Bank Germany 39.17
34 Bank of Montreal Canada 37.93
35 Mizuho Financial Group Japan 35.82
36 Morgan Stanley US 35.49
37 Banco Santander (Brasil) Brazil 34.97
38 Lloyds Banking Group UK 34.76
39 Nordea Bank Sweden 33.57
40 China Citic Bank China 31.4
41 PNC Financial Services US 31.37
42 Credit Suisse Group Switzerland 31.29
43
Canadian Imperial Bank of
Commerce (CIBC) Canada 30.76
44 Intesa Sanpaolo Italy 29
45 BOC Hong Kong Hong Kong 28.13
46 Shanghai Pudong Development Bank China 27.76
47 Bank of New York Mellon US 25.8
48 Royal Bank of Scotland UK 25.17
49 Hang Seng Bank Hong Kong 24.49
50 State Bank of India India 24.48
TOP TEN BANKS IN INDIA
1.State Bank of India
2.HDFC Bank
3.Punjab National bank
4.ICICI Bank
5.Axis Bank
6.Bank of Baroda
7.Citi Bank
8.IDBI bank
9.Bank of India
10.Canara Bank
The Top 10 Banks in India based on Assets-
S.No. Bank Total Assets as of Dec,2008 (in
US $ millions)
1 State Bank of India 256,124.00
2 ICICI Bank Limited 94,747.00
3 Punjab National Bank 49,777.00
4 Bank of Baroda 45,600.00
5 Bank of India 44,432.00
6 Canara Bank 43,210.00
7 HDFC Bank Ltd 36,000.00
8 IDBI Bank Ltd 34,169.00
9 Union Bank of India 31,598.00
10 Central Bank of India 29,026.00
GOVT. POLICIES:
In order to address the severe liquidity crunch, the Reserve Bank of India introduced a
slew of measures since mid-September 2008, viz. reduction in CRR from 9% to 5%, SLR
from25% to 24%, buyback of MSS securities, opening of new refinancing windows,
increase in ceilings on non-resident deposits and easing of restrictions on external
commercial borrowings and on short-term trade credits. Policy rates were also cut – repo
by 400 bps from 9% to 5% and reverse repo by 250 bps from 6% to 3.50%. The fiscal and
monetary stimulus measures initiated during FY 2008-09 coupled with lower crude and
metal prices somewhat cushioned the down-turn in growth momentum in FY 2009-10.
While the domestic financial situation is improving, external financial environment will
remain tight. Therefore, investment demand will be at lower ebb. On balance, with the
assumption of a normal monsoon, the GDP growth for FY 2009-10 is expected to be around
7% to 7.5%, going forward.
Following are few guidelines directed by the RBI for the UCB sector:
RBI has asked Scheduled Co-operative Banks to draw the ALM structural
Liquidity statement on a daily basis.
RBI has notified that approvals for branch expansion including off-site ATMs in
respect of UCBs will henceforth be considered based on their Annual Business
Plans, subject to certain criteria.
RBI has permitted well-managed and financially sound multi-state UCBs to set up
onsite ATMs without prior approval of the RBI.
RBI has instructed large-sized and systemically important UCBs to apply capital
charge for market risk with effect from 1st April, 2010.
MERGERS AND ACQUISITIONS:
A large number of international and domestic banks all over the world are engaged in
merger and acquisition activities. One of the principal objectives behind the mergers and
acquisitions in the banking sector is to reap the benefits of economies of scale. With the
help of mergers and acquisitions in the banking sector, the banks can achieve significant
growth in their operations and minimize their expenses to a considerable extent. Another
important advantage behind this kind of merger is that in this process, competition is
reduced because merger eliminates competitors from the banking industry. Through
mergers and acquisitions in the banking sector, the banks look for strategic benefits in the
banking sector. They also try to enhance their customer base. The mergers and acquisitions
in the banking sector of India are overseen by the Reserve Bank of India (RBI).
Following are some of the major mergers and acquisitions in the global and domestic
banking sector:
The merger of Chase Manhattan Corporation with J.P. Morgan & Company.
The name of the new company formed as a result of the merger is J.P. Morgan
Chase & Company.
The merger of Firstar Corporation with U.S. Bancorp. The name of the
resultant entity is U.S. Bancorp.
The merger of Golden State Bancorp, Inc. with Citigroup Inc. The name of the
newly formed company is Citigroup Inc
The merger of FleetBoston Financial Corporation with Bank of America
Corporation. The newly formed entity is Bank of America Corporation.
Merger between IDBI (Industrial Development bank of India) and its own
subsidiary IDBI Bank. The deal was worth $ 174.6 million (Rs. 7.6 billion in
Indian currency).
Centurion Bank and Bank of Punjab. Worth $82.1 million (Rs. 3.6 billion in
Indian currency), this merger led to the creation of the Centurion Bank of
Punjab with 235branches in different regions of India.
RELATED TERMS TO THE SECTORS
There are several terminologies being used in day-to-day banking process. Following are
the important terms used in BANKING SECTOR:
BANK RATE
REPO RATE
REVERSE REPO RATE
CASH RESERVE RATIO
STATUTORY LIQUIDITY RATIO
BANK RATE-
Bank Rate is the oldest instrument of monetary policy. It is the rate at which RBI lends
money to other banks or financial institutions or commercial banks. In other words it is the
rate of interest which is charged by RBI on its advances to commercial banks. If bank rate
is increased by RBI, then all banks will also hike their own lending rates such as deposit
rates and prime lending rates etc. The bank rate policy seeks to affect both the cost and
availability of credit. Bank Rate is the rate at which central bank of the country (in India it
is RBI) allows finance to commercial banks. Bank Rate is a tool, which central bank uses
for short-term purposes. Any upward revision in Bank Rate by central bank is an
indication that banks should also increase deposit rates as well as Prime Lending Rate.
This any revision in the Bank rate indicates could mean more or less interest on your
deposits and also an increase or decrease in your EMI
REPO RATE-
Repo rate is the rate at which our banks borrow rupees from RBI. Whenever the banks
have any shortage of funds they can borrow it from RBI. A reduction in the repo rate will
help banks to get money at a cheaper rate. When the repo rate increases, borrowing from
RBI becomes more expensive. Under repo transaction the borrower places with the lender
certain acceptable securities against funds received and agree to reverse this transaction on
a predetermined future date at agreed interest cost. It is known as repurchase rate.
Therefore, we can say that in case, RBI wants to make it more expensive for the banks to
borrow money, it increases the repo rate; similarly, if it wants to make it cheaper for banks
to borrow money, it reduces the repo rate. If increases the repo rate it will increase general
interest rates throughout the economy. If the repo rate for commercial banks increases
they will pass this onto their own consumers. Higher interest rates have the effect of
reducing spending, investment and economic growth. This will reduce inflationary
pressures in the economy.
CASH RESERVE RATIO-
The Reserve Bank of India (Amendment) Bill, 2006 has been enacted and has come into force
with its gazette notification. Consequent upon amendment to sub-Section 42(1), the Reserve
Bank, having regard to the needs of securing the monetary stability in the country, can
prescribe Cash Reserve Ratio (CRR) for scheduled banks without any floor rate or ceiling rate.
[Before the enactment of this amendment, in terms of Section 42(1) of the RBI Act, the Reserve
Bank could prescribe CRR for scheduled banks between 3 per cent and 20 per cent of total of
their demand and time liabilities].
RBI uses CRR either to drain excess liquidity or to release funds needed for the economy from
time to time. Increase in CRR means that banks have less funds available and money is sucked
out of circulation. Thus we can say that this serves duel purposes i.e. it not only ensures that a
portion of bank deposits is totally risk-free, but also enables RBI to control liquidity in the
system, and thereby, inflation by tying the hands of the banks in lending money.
What is CRR (For Non Bankers): CRR means Cash Reserve Ratio. Banks in India are
required to hold a certain proportion of their deposits in the form of cash. However, actually
Banks don’t hold these as cash with themselves, but deposit such case with Reserve Bank of
India (RBI) / currency chests, which is considered as equivalent to holding cash with
themselves.. This minimum ratio (that is the part of the total deposits to be held as cash) is
stipulated by the RBI and is known as the CRR or Cash Reserve Ratio. Thus, when a bank’s
deposits increase by Rs100, and if the cash reserve ratio is 9%, the banks will have to hold
additional Rs 9 with RBI and Bank will be able to use only Rs 91 for investments and lending /
credit purpose. Therefore, higher the ratio (i.e. CRR), the lower is the amount that banks will be
able to use for lending and investment. This power of RBI to reduce the lendable amount by
increasing the CRR makes it an instrument in the hands of a central bank through which it can
control the amount that banks lend. Thus, it is a tool used by RBI to control liquidity in the
banking system.
STATUTORY LIQUIDITY RATIO –
Statutory Liquidity Ratio refers to the amount that the commercial banks require to maintain in
the form of cash, or gold or govt. approved securities before providing credit to the
customers. Here by approved securities we mean, bond and shares of different
companies. Statutory Liquidity Ratio is determined and maintained by the Reserve Bank of India
in order to control the expansion of bank credit. It is determined as percentage of total demand
and percentage of time liabilities. Time Liabilities refer to the liabilities, which the commercial
banks are liable to pay to the customers on there anytime demand. it is used by bankers and
indicates the minimum percentage of deposits that the bank has to maintain in form of gold, cash
or other approved securities. Thus, we can say that it is ratio of cash and some other approved
liabilities (deposits).It regulates the credit growth in India
The liabilities that the banks are liable to pay within one month's time, due to completion of
maturity period, are also considered as time liabilities. The maximum limit of SLR is 40% and
minimum limit of SLR is 23%.In India, Reserve Bank of India always determines the percentage
of Statutory Liquidity Ratio. There are some statutory requirements for temporarily placing the
money in Government Bonds. Following this requirement, Reserve Bank of India fixes the level
of Statutory Liquidity Ratio. At present, the minimum limit of Statutory Liquidity Ratio that can
be set by the Reserve Bank is 23% AS ON AUGUST 2012 Objectives of SLR: The main
objectives for maintaining the Statutory Liquidity Ratio are the following: • Statutory Liquidity
Ratio is maintained in order to control the expansion of Bank Credit. By changing the level of
Statutory Liquidity Ratio, Reserve bank of India can increase or decrease bank credit expansion.
• Statutory Liquidity Ratio in a way ensures the solvency of commercial banks. • By determining
Statutory Liquidity Ratio, Reserve Bank of India, in a way, compels the commercial banks to
invest in government securities like government bonds.
If any Indian Bank fails to maintain the required level of Statutory Liquidity Ratio, then it
becomes liable to pay penalty to Reserve Bank of India. The defaulter bank pays penal interest at
the rate of 3% per annum above the Bank Rate, on the shortfall amount for that particular day.
But, according to the Circular, released by the Department of Banking Operations and
Development, Reserve Bank of India; if the defaulter bank continues to default on the next
working day, then the rate of penal interest can be increased to 5% per annum above the Bank
Rate. This restriction is imposed by RBI on banks to make funds available to customers on
demand as soon as possible. Gold and Government Securities (or Gilts) are included along with
cash because they are highly liquid and safe assets.
TERMINOLOGY RATE W.E.F.
Bank Rate 9.00% 17/04/2012
Repo Rate 8.00% 17/04/2012
Reverse Repo rate 7.00% 17/04/2012
Cash Reserve
Ratio(CRR)
4.75% 10/03/2012
Statutory Liquidity Ratio 23.00% 11/08/2012
MICRO-ANALYSIS
HISTORY OF SARASWAT CO-OPERATIVE BANK
The Bank has a very humble but a very inspiring beginning. On 14th September 1918, “The
Saraswat Co-operative Banking Society" was founded. Mr. J.K. Parulkar became its first
Chairman, Mr. N.B. Thakur, the first Vice-Chairman, Mr. P.N. Warde, the first Secretary and
Mr. Shivram Gopal Rajadhyaksha, the first Treasurer. These were the people with deep and
abiding ideals, faith, vision, optimism and entrepreneurial skills. These dedicated men in charge
of the Society had a commendable sense of service and duty imbibed in them. Even today, our
honorable founders inspire a sense of awe and respect in the Bank and amongst the shareholders.
The Society was initially set up to help families in distress. Its objective was to provide
temporary accommodation to its members in eventualities such as weddings of dependent
members of the family, repayment of debt and expenses of medical treatment etc. The Society
was converted into a full-fledged Urban Co-operative Bank in the year 1933.
The Bank has the unique distinction of being a witness to History. The Bank, which was
originally founded in 1918, i.e. close on the heels of the Russian Revolution, also witnessed as a
Society and as Bank-the First World War, the Second World War, India's freedom Movement
and the glorious chapter of post-independence India. During this cataclysmic cavalcade of
history, the Bank as a financial institution and its members could not of course remain unaffected
by the economic consequences of the major events. The two wars in particular brought in their
wake, paucities of all kinds and realities and stand by its members in distress as a solid bulwark
of strength. The Founder Members and the later-day management's of the Bank continued to
demonstrate their unwavering faith in the destiny of the common man and the co-operative
movement and they encouraged the shareholders to save despite all odds.
Last two decades the Bank has witnessed a steady growth in the business and also taken several
Strategic Business Initiatives like undertaking Business Process Reengineering initiative.
Merging seven coop Banks and then consciously nurturing them. Bank tied up with VISA
international for issuance of Debit Card. The Bank has a network of 226 fully computerized
branches as on 31st-Mar-2012 covering six states viz. Maharashtra, Gujarat, Madhya Pradesh,
Karnataka, Goa and Delhi. The Bank is providing 24- hour service through ATM at 147
locations. As on 31st March, 2012 Bank business had surpassed Rs 33000 Crores. Bank has
retained its coveted position as ZERO NET NPA Bank for the eighth successive year.
In 2011 Bank was granted permission for All India Area of Operation by Reserve Bank of India.
Bank has an an ambitious business expansion plan in place to have a presence in all major cities
of the country, reach a business level of Rs 50000 Crores by 2016 and Rs 100000 by 2018.
CURRENT POSITION OF THE COMPANY:
2007 2008 2009 2010 20110
5000
10000
15000
20000
25000
30000
15295.4
18879.1299999999
21029.2623517.08
27312.95
Total Business(Rs in crores)
2007 2008 2009 2010 20110
5000
10000
15000
20000
25000
10745.47
13874.115622.82
17071.0619186.27
Working FundsRs in crores
2007 2008 2009 2010 20110
200
400
600
800
1000
1200
1400
1600
1042.41130.95 1174.24
1270.37
1473.49
Own Funds
2007 2008 2009 2010 20110
2000
4000
6000
8000
10000
12000
14000
16000
18000
8924.94
11430.8212918.85
14266.7315800.96
Deposits
2007 2008 2009 2010 20110
2000
4000
6000
8000
10000
12000
14000
6370.467448.31
8110.419250.349999999
97
11511.99
Advances
SWOT ANALYSIS:
SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses,
Opportunities, and Threats involved in a project or in a business venture. It involves specifying
the objective of the business venture or project and identifying the internal and external factors
that are favorable and unfavorable to achieve that objective. The technique is credited to Albert
Humphrey, who led a convention at Stanford University in the 1960sand 1970s using data from
Fortune 500 companies.
STRENGTH:
It specifies the attributes of the person or company that are helpful to achieve the
objective(s).
Saraswat Bank is No. 1 amongst the 1,700 UCBs in the Urban Cooperative Banking
Sector in India with over 90 years of cumulative banking experience.
High standard regulatory environment.
Flexible work permit system and good quality staff offering personal client service.
Bank has implemented Core Banking Solution (CBS) in the Bank. This solution
primarily aims at having a unified customer approach.
Bank is a member of the Credit Information Bureau India Ltd. (CIBIL). CIBIL is
India’s first credit information bureau and is a repository of factual information on
the credit history and repayment records of millions of commercial and individual
borrowers.
OPPORTUNITY:
external conditions that are helpful to achieving the objective(s).
Maharashtra State has a huge banking business market of around Rs. 17,00,000/-
crore. Of these Rs. 17,00,000 crore, Saraswat Bank has a business stake of only Rs.
20,000 crore, which is a miniscule of merely 1.2% share in the total banking
business in the State of Maharashtra. This provides a huge opportunity to the bank.
Saraswat Bank does 0.3% to 0.4% of the nation’s banking business. In India today,
60%of the population do not have access to a banking product; 80% of the
population do not have access to an insurance product and 98% of the population
do not have access to a stock market product. Thus, there is tremendous untapped
growth potential in the Indian subcontinent
WEAKNESS:
Refusal to dilute stake in PSU banks: The government has refused to dilute its stake
in PSU banks below 51% thus choking the headroom available to these banks for
raining equity capital.
Lack of competitive differential with other offshore centre’s
Rigid legislation that inhibits business development
THREAT:
Rise in inflation figures which would lead to increase in interest rates.
Increase in the number of foreign players would pose a threat to the PSB as well as
the private players.
Anti-offshore regulations in foreign target markets restricting the development
of products and new markets.
Downsizing and reduction in banking operations in favour of rival jurisdictions.
Outsourcing to cheaper jurisdictions
Subsequent impact on rest of finance sector ecosystem
FINANCIAL ANALYSIS AND STRATEGIES:
Financial Accounting is a process of systematic recording of business transactions in the
various books accounts maintained by organization with the ultimate intention of
preparing financial statements there from. Financial accounting ultimately aims at
preparing financial statements which are basically in two forms:
Profit and loss statement is a period statement and related to curtained period,
usually one year. This tells about the results of operations, either profit or loss,
arising out of the conduct of business operations during that period
Balance sheet which is a potion statement and relates to a particular point of time.
This tells about the various properties held by the business (termed as Assets) and
obligations accepted by the business (termed as Liabilities) as on particular date.
Balance Sheet: The purpose of preparing the balance sheet is to disclose financial status of
an organization in the form of assets and liabilities at a given point of time.
Liabilities: Credits balances in all the personal and real accounts appear on liabilities side.
The following items may appear on the liabilities side:
Capital: Capital Indicates the amount of funds contributes by the owner of
business to requirement of fund of business. Similarly, any amount of profit
earned in past which is not distributed to the owner also belongs to owner and
become a part of the business.
Long term liabilities: This indicates the liabilities which are to be paid off over
long period of span of time say 5 to 10 years. In practical circumstances, it may
consists of long-term loan borrowed from a bank and financial institutes.
Currents liabilities: This indicates the liabilities which are suppose to be paid off
which a very short span of time say one year. In practical circumstances, it
consist Sundry creditors, Advances received from customer, Outstanding
expenses, Income received in advanced, Liability taxes.
Assets: Debit balances in all the personal and real accounts appear on assets side.
Following items may appear on assets side:
Fixed assets: Fixed assets indicate the value of infrastructure properties acquired by
the business where the benefit received over long period of time. Fixed assets are
land, building, machinery, furniture vehicles, and computer.
Investments: This indicates the amounts of funds invested by the organization
outside the business.
Current assets: Current assets are the assets which are likely to be converted in the
form of cash of likely to be consumed during the normal operating cycle of a
business within a very short span time say one year. Current assets are stocks,
sundry debtors, cash & bank balances, prepaid expenses.
BALANCE SHEET AS AT MARCH 31, 2011
(Amount in Rs)
CAPITAL & LIABILITIES Schedule 31.03.2011 31.03.2010
1) CAPITAL 1 1,02,83,24,160.00 86,23,11,100
2) RESERVE FUND & OTHER
RESERVES
2 16,46,43,74,616.70 15,52,67,03,382
3) DEPOSITS & OTHER ACCOUNTS 3 1,58,00,96,07,293.8
4
1,42,66,72,86,137
4) BORROWINGS 4 8,45,61,53,945.78 5,62,00,09,609
5) BILLS FOR COLLECTION 15,05,61,88,896.43 14,40,59,01,784
6) BRANCH ADJUSTMENTS 4,64,05,350.95 11,48,47,457
7) OVERDUE INTEREST RESERVE
I. ON INVESTMENTS 86,56,644.00 86,56,644
II. ON LOANS & ADVANCES 1,35,32,79,974.37 1,51,26,21,884
8) INTEREST PAYABLE 46,47,62,566.51 49,93,00,234
9) OTHER LIABILITIES 5 8,48,72,72,442.32 7,51,27,72,392
10) PROFIT & LOSS 6 2,12,59,98,810.80 1,21,73,25,875
GRAND TOTAL 211,50,10,24,701.70 189,94,77,36,498
Contingent Liabilities 13 15,63,74,41,052 15,50,03,29,595
(Amount in Rs)
PROPERTY & ASSETS Schedule
31.03.2011
31.03.2010
1) CASH 7 11,03,74,27,758.63 10,00,16,55,468
2) BALANCES WITH OTHER
BANKS
8 2,26,29,21,605.29 4,38,24,29,025
3) MONEY AT CALL & SHORT
NOTICE
34,64,22,562.00 1,31,84,56,314
4) INVESTMENTS 9 52,53,76,68,612.60 53,21,39,11,321
5) ADVANCES 10 1,15
,11,99,23,393.74
92,50,35,46,892
6) INTEREST RECEIVABLE 1,35,32,79,974.37 1,51,26,21,884
7) BILLS RECEIVABLE 15,05,61,88,896.43 14,40,59,01,784
8) FIXED ASSETS 11 5,45,73,77,098.58 5,51,06,28,226
9) OTHER ASSETS 12 8,29,64,60,223.62 7,05,70,97,868
10) COMPUTER SOFTWARE 62,000.02 1,90,000
11) DEFERRED AMORTISATION OF
INVESTMENTS
3,10,14,176.42 3,90,19,314
12) NON-BANKING ASSETS
ACQUIRED IN SATISFACTION
OF CLAIMS
22,78,400.00 22,78,400
TOTAL 211,50,10,24,701.70 189,94,77,36,49
Profit and Loss accounts: A profit and Loss account is prepared to disclose the results of
operation of the business transaction during certain duration of time. Accounts may have
following four components:
Manufacturing accounts: This part of profit and loss accounts discloses the results
of manufacturing operations carried out by the organization. The final result in
terms of manufacturing accounts is a cost of production incurred by the
organization.
Trading accounts: This part of profit and loss accounts discloses the results of
trading operations carried by organization. The final results in terms of Gross
Profit earned by the organization.
Profit and Loss accounts: This part of profit and loss accounts discloses the final
results of business transactions of the organization. The final results in terms of Net
profit earned by organization.
Profit and Loss appropriation accounts: This part of profit and loss accounts which
mainly applicable to company form of organization, discloses the manner in which
the net profit earned by the organization is appropriated. The amounts of profit not
appropriated or retained transferred to reserves and surplus in balances sheet.
PERFORMANCE HIGHLIGHTS
Table A (`in Crore)
Particulars FOR THE YEAR ENDED31-Mar-10 31-Mar-11 % Change
Total Income 1,458.20 1,690.86 15.96%Total Expenditure 1,242.36 1,332.67 7.27%Gross Profit 215.84 358.19 65.95%Less: Provisions 36.68 63.39 72.82%Net Profit Before Tax and Exceptional Items 179.16 294.80 64.55%Less: Income 40.00 81.23 103.08%Net Profit After Tax and Exceptional Items 139.16 213.57 53.47%Less: Exceptional Items 19.49 1.30 -93.33%
Net Profit 119.67 212.27 77.38%AT THE YEAR END
Own Funds 1,270.37 1,473.49 15.99%Share Capital 86.23 102.83 19.25%Reserves and Surplus 1,184.14 1,370.66 15.75%Deposits 14,266.73 15,800.96 10.75%Current 1,244.30 1,050.94 -15.54%Savings 3,003.37 3,513.15 16.97%Term 10,019.06 11,236.87 12.15%Advances 9,250.35 11,511.99 24.45%Secured 9,151.61 11,433.19 24.93%Unsecured 98.74 78.80 -20.19%Priority Sector 5,300.48 5,765.90 8.78%% to Advances 57.30% 50.09% -Small Scale Industries 2,946.54 2,443.75 -17.06%Small Businessmen and Traders 689.47 526.94 -23.57%Other Priority Sectors 1,664.47 2,795.21 67.93%Working Capital 17,071.06 19,186.27 12.39%Investments 5,321.39 5,253.77 -1.27%Borrowing And Refinance 562.00 845.62 50.47%Net NPAs (%) 0.00 0.00 0.00Capital Adequacy (%) 14.63 12.74Number of MembersRegular * 1,34,417 1,62,560Nominal 4,94,292 5,26,331Number of Branch Licences/Branches 200 216Number of Employees 2,911 3,338Productivity per Employees 8.08 8.18Profit Per Employes (in laces) 4.11 6.36Return on Average Assets (%) 0.74 1.16Net Interest Margin (%) 2.61 3.52
Maximizing CASA deposits:
A sharp focus on reduction in costs has become priority No. 1 in your Bank. On the liability
side, the cost advantage will be available to your Bank, only if the Bank makes rapid
strides in mobilization of Current Accounts and Savings Accounts (CASA). Major banks in
the country have around 35% to 45% CASA deposits, while your bank has been hitting
only the 22% to 30% range in CASA deposits. As CASA deposits carry an average low
level of interest, the average cost of funds (i.e. CASA Deposits + Term Deposits)comes
down. We have repeatedly impressed on our staff the need to mobilize CASA deposits
aggressively.
Reduction in NPA:
To bring down the Gross NPA level as also to ensure that substantial new NPAs are
notadded, branches were asked to speed up efforts for recovery in respect of overdue
accounts with them. The drive for reduction in NPAs has been hugely successful under the
leadership of Sheri P. G. Kamath, Chief General Manager.
Marketing:
Business Process Reengineering (BPR) initiative primary objective of this initiative is to
convert the branches into sales and service outfits. India is a huge banking market but The
penetration of Indian Banking is thus one of the lowest in the world. Also a large number
of our branches are functional in Maharashtra State, which has a huge banking business
market of around Rs. 17,00,000/- crore (with aggregate bank deposits of Rs. 8,57,771
croreand gross credit of Rs. 8,34,701 crore in September 2008). Of these Rs. 17,00,000
crore,we at Saraswat Bank have a business stake of only Rs. 20,000 crore, which is a
minisculeof merely 1.2% share in the total banking business in the State of Maharashtra.
This provides a huge opportunity to banks including your Bank. In fact, it is on the basis
of these statistics that we have planned to do a business of Rs.1,00,000 crore by 2021 under
Dr. Adarkar Mission IV of your Bank. All the employees in the branches are being trained,
equipped and instructed to take extra efforts for marketing all the products and services
of your Bank
4 P’s OF MARKETING:
Basically, the concept of Marketing is given by McCarthy who has classified “Marketing
Mix” tools of four broad kinds called 4 P's and they are as follows
Product
Price
Promotion
Place
These marketing mix tools are used by the marketers to influence their trade channels and
final consumers.
The Saraswat co-operative banks 4P's criteria is followed below
1) Product
Sarswat co-operative bank is No. 1 amongst the 1,700 UCBs in the Urban Co-
operative Banking Sector in India.
The fact remains that we do 0.3% to 0.4% to nation's banking business.
A Sarswat Co-operative Bank has special Product Development Department which
is been seen by Sheri M.S.Vaidya, Dy.General Manager.
The product Development department has initiated into all these areas
Products and their attributes.
Unique Selling Propositions of our Products.
Marketing positions of our products.
Promotional imperatives.
Value addition ingredients of our products and their enrichment.
This helps the bank to process of redefining and refashioning our existing products
and creating new products.
This helps to maintain relationships i.e. helps to maintain CMR
2) Place
The bank has adopted the policies of inorganic growth since 2006 for increasing
its branch outlets
From 2009 the bank has been pursuing a mix of inorganic and organic growth
for branch expansion purposes.
The bank has adopted the cluster based approach .
Instead of having an isolated branch, they have 4-5 branches in a far off area.
This approach has enabled the bank to cluster presence in western Maharashtra,
Goa and Karnataka.
The bank has planned under Dr.Adarkar Mission 2, to open 70 more branches
by 31stMarch,2011
The is following the mantra of one branch in every 15 days in programme called
'Ashwamedh'
3) Promotion
Promotion of any brand is very necessary; this helps the marketer as well as
customer to understand each other well.
The Sarswat Co-operative bank has appointed Sheri Dilip Prabhavalkar, veteran
artist as their Brand Ambassador
This has heed the bank to achieve and promote heights of success in their business
To attract the young generation the bank has appointed a junior brand ambassador
to Ms.Shalmali Sukthankar, budding artist.
From last five years the bank has encapsulated and expressed our uniqueness to the
customers that the bank is having the "Ability of the Big and Agility of the Small"
4) Pricing
In any service industry, cost leadership is critical to the long term success of the
organization.
The bank has to compete with other banks on the basis of total reduction of all
economic and unwarranted expenditures and also to control costs in all areas
The bank initiatives are as follows
Optimum utilization of the available resources of he bank.
Streamlining/Re-engineering various procedures in the bank, thus improving
customer service.
The bank has sustained work of the income and cost council, which helps the bank
to offer services to the customers with lower intermediations costs.
HR POLICY AND ORGANIZATIONAL STRUCTURE:
Internal Capability Building Measures (ICBMs):
The bank pursued the recruitment and promotional policy during the year 2008-2009 as
per Internal Capability Building Measures (ICBM).
Promotional Exercise
The Bank had undertaken promotional exercise in the year 2002 when organizational
restructuring was done as per the recommendations of M/s Seven S Associates. The
Bank has been undertaking expansion of branch network and has been implementing BPR
exercise too, which is resulting in transforming the organization. In order to cater to the
growing expanse of the Bank and the need for managerial positions in the wake of the
same, a promotional exercise to various cadres was conducted. A total of 385 employees
were promoted to various cadres. All promoted personnel have been suitably deployed at
various branches (including the branches of the merged banks) and/or departments.
Training
During the FY 2008-09, a total of 2,225 employees, consisting of 1,058 from management
and 1,167 from non-management cadre attended 98 training programmes conducted at the
‘Staff Learning Centre’ at Vashi, Navi Mumbai, as well as at various branch locations. A
special emphasis was given on training of new recruits and employees of erstwhile banks
merged with this Bank at their respective locations as well as at the Staff Learning Centre
at Vashi, where the focus was on validation process, know the Bank, the internal software
package OMNI and the retail products of the bank.
Customer Service
The bank has adopted the following codes based on the Standard codes documented
byIndian Bank’s Association:
Customer Fair Practice Code
Cheque Collection Code
Bankers’ Lender Liability Code
Compensation Policy
Saraswat Bank has become a member of the Banking Codes and Standards Board of
India. This board ensures that the Codes so defined by the Bank are implemented in letter
and spirit. For measuring customer satisfaction, a bank- wide Customer Service Audit has
been planned to be commissioned by the Board in the ensuing year. Industrial Relation:
The Bank’s human resources have been organized under the two representative bodies viz.
the Officers’ Association and the Employees’ Union. The industrial relations with both
these organizations have been very cordial with joint discussions being held with the
Association/the Union for redressing employee issues in an amicable way. Voluntary
Retirement Scheme (VRS):
This year, the Bank launched the VRS for its employees. Around 236 employees from your
Bank (excluding those of merged banks) opted for VRS under the said scheme. Besides,
83employees of the erstwhile Nasik Peoples Cooperative Bank Ltd., 43 employees
of erstwhile Annasaheb Karale Janata Sahakari Bank Ltd. and at around 100 employees of
the erstwhile Murgharajendra Sahakari Bank Ltd. (i.e. in all 462 employees) opted for
VRSand have been relieved under the Schemes. The Bank acknowledges with gratitude the
sincerity and hard work put in by all these employees during their tenure with the Bank
and wishes the retired employees an eventful and healthy post retirement life.
CSR (CORPORATE SOCIAL RESPONSIBILITIES):
Corporate Social Responsibility (CSR) is not a new fashion but it is an old creed for this
organization. The founders and their successors understood and underscored the principle
that a cooperative institution must always stay connected with the needs and aspirations
of the society at large and hence CSR constitutes the umbilical cord that connects this bank
to the society.
The laudable gesture of late Wamanrao Varde and his associates on the Board then in
spontaneously responding to the grave scarcity of foodgrains during the Second World
War and in starting on behalf of your Bank a ration shop at Girgaum in Mumbai to make
available food grains to all, is a resplendent example of the early awareness of CSR in this
Bank. This was so because all members of the community always understood that a co-
operative institution must always have a social purpose. Bank thereafter also started
scholarships and apprenticeships for deserving students and through that process built the
careers of several young men. Your Bank has been providing financial assistance to many
social, educational and medical institutions by way of grants every year from its funds.
From time to time the Board of Directors responded to national and natural calamities like
flood, famine, earthquake etc.
Following are the few initiatives both at macro and micro level, which spell out the bank’s
vision of Corporate Social Responsibility (CSR):
As a macro level expression of CSR, we in association with Maharashtra Times created an
intellectual platform entitled "Shikhar Maharashtra" .with the objective of researching
into, debating and finding ways and means to deal with the many stubborn economic and
social issues that Maharashtra faces today. A gala opening of Shikhar Maharashtra was
held on27th July 2007 at Ravindra Natya Mandir, Mumbai. The programmes went on for
two days wherein the social and political leaders from Centre and State participated. The
inauguration of this forum of 'Shikhar Maharashtra" will pave the way for bringing to the
table the daunting problems that our State faces today. It is proposed that at an interval
of every three months, a major issue facing Maharashtra such as farmers' suicides,
malnutrition, scarcity of drinking water, famine and hunger, etc. is discussed threadbare
on this nonpartisan platform by soliciting the participation of intellectuals and social
workers who are active in the field and thereafter recommendations are made to the
Government on the remedies that may ameliorate the situation and pursued thereafter.
As part of CSR, at the macro-level the Board of Directors took serious cognizance of the
plight of farming community and continuing suicides of farmers and with a view to
instilling hope among farmers, they supported the 'Project Hope' of late Baba
Amte'sMaharogi Sewa Samiti at village Mulgavan, Taluka - Jhari Jamini, Distt. Yeotmal.
A substantial donation of Rs. 1.00 crore was made towards this project, where experts and
volunteers are engaged in offering hope and succor to thousands of farmers by building
check dams and initiating farmers into newer cultivation practices enabling them to bolster
income generation and income supplementation. At the macro-level, the third major issue
that the Board of Directors took was one belonging to the home turf viz. the 5,90,619 small
depositors losing their hard earned money which they had kept in deposits in urban co-
operative banks. It is here that the bank stepped in, assimilated five ailing UCBs in our
Bank, resurrected all the deposits of all the depositors and even restored those banks back
to pristine health. Along with such macro issues, the Bank has extended support in specific
cases by way of action at micro-level, which would prove inspirational for others. Some of
these commendable acts in CSR are as under:
Bank's contribution towards protecting cultural lineage of Maharashtra: The
bank sanctioned a sponsorship grant of Rs. 25 lakh for the RSS volunteers working for the
project "Shilpkaar Charitra Kosh". This project deals with the publication "Vivek",
engaged in bringing out chronicles on the lives of great men of all walks of life who have
contributed to make Maharashtra what it is today Late Annabhau Sathe was a peoples'
poet-singer of Maharashtra. Some nine months ago, the pitiable plight of his entire family
living in indigence was depicted in newspapers. The Bank's representative rushed to Sangli
and in order to provide sustenance to the family.
Employment to deserving kith and kin of deprived section of society: Sheri Nitin
RajhansBagwe - son of a mill-worker was born as a dwarf and after reaching manhood
reached a height of barely three feet. It was with the help of surgeries that his height was
artificially pulled up to four and half feet. With sheer determination he completed his
education in commerce and also cultivated the hobby of photography. Recognition of sheer
Grit and Bravery: Sheri Gorakh Newale, a Municipal worker at Chinchwad in Pune was
injured while saving the lives of many people from a tiger, which had entered human
habitat. Sheri Mohan Pandurang Redkar an engineer by profession hailing from Malwan
taluka wasin Mumbai for his mother's treatment. While in Mumbai, he was going by the
Bandraseashore to a medical shop to bring medicines for his mother. At the seashore, he
happened to see two couples drowning in the sea and he leapt to their rescue. While he
saved all the four lives, unfortunately he was drowned in the process. The news reports
appearing next day saddened every one. His family at Malvan in Sindhudurg District was
drowned in sorrow Bank salutes the Martyrs: In the recent terrorists attack on Mumbai ,
the first and hopefully the last of its kind, many brave soldiers laid their life for the security
of the country.Amongst them were Sheri Tukaram Ombale, Shri.Balasaheb Bhosale, Shri
Arun Chitte,ShriMurlidhar Choudhari and Shri Ambadas Ramchandra Pawar. In
recognition of their services Saraswat Bank appointed Next of Kin of these brave soldiers
in the services of the Bank. Shri Ajit Gawkar , brave Indian soldier died while fighting
intruders/enemies on the Jammu and Kashmir Border. In recognition of his services to the
country, Saraswat Bank appointed his wife in the services of the Bank on the occasion of
61st Independence Day. Ms Krishna Patil the third woman to successfully complete the Mt.
Everest Expedition, was granted loan waiver for Rs 30 lakhs in recognition of her bravery,
grit, determination and never die enthusiasm
AWARDS AND RECOGNITIONS:
Bank participated in the study conducted jointly by the Great Places to Work Institute
India and the Economic Times, to distinguish a good work place from a great one. Based
on the study of over 373 participants spanning a multitude of sectors, the top 50 best
workplaces were elected. We are happy to announce that your Bank has been adjudged
and included in “India’s Best Companies to work for - Year 2009" and in the banking
industry vertical, your Bank is placed fourth after American Express, Kotak Mahindra
Bank and HDFC Ltd. The citation reads as under: “The Saraswat Co-operative Bank Ltd.
Ranked 4th in Banking& Credit Services for inspiring trust among your people, for
instilling pride in them, for creating an Environment within the workplace that promotes
camaraderie and for many other reasons that makes your organization one of the India’s.”
CONCLUSION AND SUGGESTIONS:
The market is seeing discontinuous growth driven by new products and services that
include opportunities in credit cards, consumer finance and wealth management on there
tail side, and in fee-based income and investment banking on the wholesale banking side.
Given the demographic shifts resulting from changes in age profile and household
income, consumers will increasingly demand enhanced institutional capabilities and
service levels from banks.
With the growth in the Indian economy expected to be strong for quite sometime-
especially in its services sector-the demand for banking services, especially retail
banking, mortgages and investment services are expected to be on rise.
Reserve Bank of India (RBI) has approved a proposal from the government to
amend the Banking Regulation Act to permit banks to trade in commodities and
commodity derivatives.
SUGGESIONS
In wake of this, old private sector banks also have the need to fundamentally strengthen
skill levels.
However, even more imperative is their need to examine their participation in the
Indian banking sector and their ability to remain independent in the light of the
discontinuities in the sector.
Accelerate the creation of world class supporting infrastructure (e.g., payments,
asset reconstruction companies (ARCs), credit bureaus, back-office utilities) to help
the banking sector focus on core activities.
Slower growth in retail credit and narrow spreads spells better fortune for banks
that have higher concentration of corporate assets and low cost deposits along with
good asset quality.
Saraswat Bank perfectly fits into this matrix.
Sustenance of a healthy current and savings account mix and little deterioration in
asset quality also reiterates the operating efficiency of the bank.
Being the largest Urban Co-operative bank, Saraswat Bank is also one of the lead
contenders to initiate the process of building up scalability by acquiring smaller
banks in the PSU and private sectors.
Besides offering the opportunity to cater to borrowing needs of some of the largest
corporate in the country, the consolidation process will also brings about economies
of scale for the bank
. The banking today is re-defined Andre-engineered with the use of Information
Technology and it is sure that the future of banking will offer more sophisticated
services to the customers with the continuous product and process innovations
. Thus, there is a paradigm shift from the seller’s market to buyer’s market in the
industry and finally it affected at the bankers level to change their approach from
“conventional banking to convenience banking” and “mass banking to class
banking”. The shift has also increased the degree of accessibility of a common man
to bank for his variety of needs and requirements.
Also, the bank’s healthy ROA (Return of Average Asset) and CRAR (Capital to
Risk Asset Ratio) is a matter of comfort. Having said that, the bank’s market share
of merely 1.2% in the total banking business in the State of Maharashtra is our
lingering concern. We have a positive view on the bank with respect to its future
growth prospects.
BIBLIOGRAPHY
1.History of Banking in India:
http://finance.indiamart.com/investment_in_india/banking_in_india.htmlhttp://www.bseindia.com/downloads/BankingSector.pdf
2.Banking terminology:
http://www.meridianadvantagemember.com/fileuploads/Bank_Terminology.pdf
3.Mergers and Acquisitions:http://www.economywatch.com/mergers-acquisitions/international/banking-sector.htmlhttp://finance.mapsofworld.com/merger-acquisition/india.html
4.Current position and financial analysis of the bank: Saraswat Bank¶s Annual Report for the year 2008 and 2009
5.History of the banks and Corporate Social Responsibilities:http://www.saraswatbank.com
