Saraswat Project

7/29/2019 Saraswat Project

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ROLE AND PERFORMANCE OF

SARASWAT CO-OPERATIVE BANK

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MACRO ANALYSIS

CHAPTER 1

1 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.


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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 tocustomers. 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 asdefined in the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959), a


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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".

LIST OF MAJOR SCHEDULED URBAN CO-OPERATIVE BANKS

1. Saraswat Co-Op. Bank Limited, MUMBAI2. Abhyudaya Co-Op. Bank Limited, MUMBAI3. Bombay Mercantile Co-Op. Bank Limited. MUMBAI4. Citizen Credit Coop. Bank Ltd. Dadar, MUMBAI5. Andhra Pradesh Mahesh Co-Op Urban Bank Ltd. HYDERABAD6. Cosmos Coop. Urban Bank Ltd. MUMBAI7. Janakalyan Sahakari Bank Ltd., Bombay MUMBAI8.

Shamrao Vithal Co op Bank Ltd. MUMBAI

9. Punjab & Maharashtra Coop Bank Ltd. MUMBAI10.Charminar Coop.Urban Bank Ltd. HYDERABAD11.Dombivli Nagari Sahakari Bank Ltd. MUMBAI12.Goa Urban Co-Op. Bank Limited. MUMBAI13.Kapole Cooperative Bank Ltd., Bombay MUMBAI14.Thane Janata Sahakari Bank Ltd. NAGPUR15.Bharat Co-Operative Bank (Mumbai) Ltd. MUMBAI

And many more.


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CHAPTER 2

CURRENT TRENDS AND TECHNOLOGIES

Technology plays a very important role in banks 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


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2.1 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.

2.2 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.


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2.3 Mobile Banking: (also known as M-Banking, m-banking) 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. Apples initial success with iPhone and the rapid growth of phones basedon Google's Android (operating system) have led to increasing use of special client programs,

called apps, downloaded to the mobile device.


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CHAPTER 3

MARKET STRUCTURE

3.1 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 ofreserve 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 indecline since 2002 and faces a further sharp reduction.

Banking facilities on the range from basic current and deposit account facilities tocomplex 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-affluentproposition targeting UK expatriates. Its chief revenue stream is derived from

international personal client business referred from UK and International Groupoffices.


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3.2 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 Indias 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.


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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 Indias 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.


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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 birds 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.


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CHAPTER 4

BANKING TERMINOLGY

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

4.1 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.


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4.2 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.

4.3 REVERSR REPO RATE-

A repo or repurchase Agreement is an instrument of money market. Usually reserve bank

(federal bank in U.S) and commercial banks involve in repo transactions but not restricted to

these two. Individuals, banks, financial institutes can also participate in repurchase

agreement.

Repo is a collateralized lending i.e. the banks which borrow money from Reserve Bank to

meet short term needs have to sell securities, usually bonds to Reserve Bank with an

agreement to repurchase the same at a predetermined rate and date. In this way for the lender

of the cash (usually Reserve Bank) the securities sold by the borrower are the collateral

against default risk and for the borrower of cash (usually commercial banks) cash received

from the lender is the collateral.

Reserve bank charges some interest rate on the cash borrowed by banks. This rate is usually

less than the interest rate on bonds as the borrowing is collateral. This interest rate is called

repo rate. The lender of securities is said to be doing repo whereas the lender of cash is said

to be doing reverse repo.


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In a reverse repo Reserve Bank borrows money from banks by lending securities. The interest

paid by Reserve Bank in this case is called reverse repo rate.

Borrower of funds is called as seller of repo and lender of funds is called as buyer of repo.

When the term of the loan is for one day it is known as an overnight repo and if it is for more

than one day it is called a term repo.

The forward clean price of bonds is set at a level which is different from the spot clean price

by adjusting the difference between repo rate and coupon earned on the security.

4.4 CASH RESERVE RATIO-

TheReserve 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 prescribeCash 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 dont 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 banks

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
http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/http://en.wikipedia.org/wiki/Reserve_requirementhttp://en.wikipedia.org/wiki/Reserve_requirementhttp://en.wikipedia.org/wiki/Reserve_requirementhttp://en.wikipedia.org/wiki/Reserve_requirementhttp://www.rbi.org.in/


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/ 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.

4.5 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 differentcompanies. 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.


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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


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CHAPTER 5

GOVERNMENT 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 cutrepo 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 financialsituation 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 Liquiditystatement on a daily basis.

RBI has notified that approvals for branch expansion including off-site ATMs inrespect 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 uponsite ATMs without prior approval of the RBI.

RBI has instructed large-sized and systemically important UCBs to apply capitalcharge for market risk with effect from 1st April, 2010.


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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. Thename 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 entityis U.S. Bancorp.

The merger of Golden State Bancorp, Inc. with Citigroup Inc. The name of the newlyformed 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 subsidiaryIDBI 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 Indiancurrency), this merger led to the creation of the Centurion Bank of Punjab with

235branches in different regions of India.


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CHAPTER 6

TOP TEN BANKS IN INDIA

1. State Bank of India2. HDFC Bank3. National bank4. Bank5. Axis Bank6. Bank of Baroda7. Citi Bank8.

IDBI bank

9. Bank of India10.Canara Bank


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10 THE TOP BANKS IN INDIA BASED ON ASSETS-

S.No Bank Total Assets (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


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MICRO ANALYSIS

CHAPTER 7

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. Eventoday, 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 inparticular 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.


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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.


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CHAPTER 8

RESEARCH METHODOLOGY

For processing of Commercial Credit Proposals a proper research methodology is followed

by the bank. On receiving a particular request for credit the information or the data related is

collected.

Secondary Data

The secondary data is mainly obtained after proper acquirement of primary data and analysis

is done based on it. The assessment of the proposals is done by the zonal head who decides

whether it meets the banks requirements. If the applicant firm meets the necessaryrequirements then a customer meeting is arranged at factory / office where the books are

verified and the site / factory is visited. All the additional data required is collected and

accordingly the project is subjected to various boards. The proposal is recommended & sent

to respective meeting. The proposal if is below Rs. 1 crore is subjected to Deputy Managing

Director, if above Rs. 1 crore and below Rs. 7.5 crore is subjected to CENMAC (Central

Management Committee) and if above Rs. 7.5 crore is subjected to the board of directors.

The required data collected from annual report, books and website which shows the necessary

information for processing the proposals is the secondary type of data. The websites used

mainly are as follows:

i. www.mca.gov.in

ii. www.cibil.com

These websites give the information about the Company Identification Number (CIN) &

Directors Identification Number (DIN) and also whether the company is in existence and how

its account is rated.

Data Analysis:

After getting all the necessary information the proposals can be analyzed and this helps in

fulfilling the processing of the proposals. The secondary data is used mostly to create a

primary data, which in turn helps to calculate the necessary ratios and compare it with

previous year and also understand the future projections of the applicant firm.


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Interpretation:

After analysis of the data the results are drawn upon. The calculation of various ratios and

the credit rating based upon it helps in interpretation. This helps the assessing officers in

granting credit facilities to the applicant firm.


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CHAPTER 9

CURRENT POSITION OF THE COMPANY

9.1 TOTAL BUSINESS

9.2 WORKING FUNDS

15295.4

18879.1321029.26

23517.08

27312.95

0

5000

10000

15000

20000

25000

30000

2007 2008 2009 2010 2011

Total Business(Rs in crores)

10745.47

13874.115622.82

17071.0619186.27

0

5000

10000

15000

20000

25000

2007 2008 2009 2010 2011

Working Funds(Rs in crores)


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9.3 OWN FUNDS

9.4 DEPOSITS

1042.41130.95 1174.24

1270.37

1473.49

0

200

400

600

800

1000

1200

1400

1600

2007 2008 2009 2010 2011

Own Funds(Rs in crores)

8924.94

11430.82

12918.8514266.73

15800.96

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

2007 2008 2009 2010 2011

Deposits(Rs in crores)


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9.5 ADVANCES

6370.46

7448.318110.41

9250.35

11511.99

0

2000

4000

6000

8000

10000

12000

14000

2007 2008 2009 2010 2011

Advances(Rs in crores)


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9.6 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 BankingSector 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 solutionprimarily aims at having a unified customer approach.

Bank is a member of the Credit Information Bureau India Ltd. (CIBIL). CIBIL isIndias 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 is 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.


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Saraswat Bank does 0.3% to 0.4% of the nations 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 inPSU banks below 51% thus choking the headroom available to these banks for raining

equity capital. Lack of competitive differential with other offshore centres 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 developmentof 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


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CHAPTER 10

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, usuallyone 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 businessto 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 longperiod 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 offwhich 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.


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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 bythe 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 organizationoutside the business.

Current assets: Current assets are the assets which are likely to be converted in theform 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.

10.1 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.

10.2 Reduction in NPA

To bring down the Gross NPA level as also to ensure that substantial new NPAs are not

added, 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.


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CHAPTER 11

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 crore and 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 miniscule of merely 1.2%

share in the total banking business in the State of Maharashtra. This provides a hugeopportunity 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 Ps 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


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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 itsbranch outlets

From 2009 the bank has been pursuing a mix of inorganic and organic growth forbranch 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 by31stMarch,2011

The is following the mantra of one branch in every 15 days in programme called'Ashwamedh'


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3) Promotion

Promotion of any brand is very necessary; this helps the marketer as well as customerto understand each other well.

The Sarswat Co-operative bank has appointed Sheri Dilip Prabhavalkar, veteran artistas 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 thecustomers 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 theorganization.

The bank has to compete with other banks on the basis of total reduction of all economicand unwarranted expenditures and also to control costs in all areas

The bank initiatives are as follows Optimum utilization of the available resources of the 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 tooffer services to the customers with lower intermediations costs.


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CHAPTER 12

PERFORMANCE OF THE COMPANY

BALANCE SHEET AS ON 31MARCH, 2010 &2011

(Amount in Rs)

CAPITAL & LIABILITIES Schedule 31.03.2011 31.03.2010

1) CAPITAL 1 1,02,83,24,160.00 86,23,11,1002) RESERVE FUND & OTHER

RESERVES

2 16,46,43,74,616.70 15,52,67,03,382

3) DEPOSITS & OTHERACCOUNTS

3 1,58,00,96,07,293.84 1,42,66,72,86,137

4) BORROWINGS 4 8,45,61,53,945.78 5,62,00,09,6095) BILLS FOR COLLECTION 15,05,61,88,896.43 14,40,59,01,7846) BRANCH ADJUSTMENTS 4,64,05,350.95 11,48,47,4577) OVERDUE INTEREST

RESERVE

I. ON INVESTMENTS 86,56,644.00 86,56,644II. ON LOANS & ADVANCES 1,35,32,79,974.37 1,51,26,21,884

8) INTEREST PAYABLE 46,47,62,566.51 49,93,00,2349) OTHER LIABILITIES 5 8,48,72,72,442.32 7,51,27,72,39210)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


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(Amount in Rs)

PROPERTY & ASSETS Schedule 31.03.2011 31.03.2010

1)

CASH7 11,03,74,27,758.63 10,00,16,55,468

2) BALANCES WITH OTHERBANKS

8 2,26,29,21,605.29 4,38,24,29,025

3) MONEY AT CALL & SHORTNOTICE

34,64,22,562.00 1,31,84,56,314

4) INVESTMENTS 9 52,53,76,68,612.60 53,21,39,11,3215) ADVANCES 10 1,15,11,99,23,393.74 92,50,35,46,8926) INTEREST RECEIVABLE 1,35,32,79,974.37 1,51,26,21,8847) BILLS RECEIVABLE 15,05,61,88,896.43 14,40,59,01,7848) FIXED ASSETS 11 5,45,73,77,098.58 5,51,06,28,2269) OTHER ASSETS 12 8,29,64,60,223.62 7,05,70,97,86810)COMPUTER SOFTWARE 62,000.02 1,90,00011)DEFERRED

AMORTISATION OF

INVESTMENTS

3,10,14,176.42 3,90,19,314

12)NON-BANKING ASSETSACQUIRED IN

SATISFACTION OF CLAIMS

22,78,400.00 22,78,400

TOTAL 211,50,10,24,701.70 189,94,77,36,49


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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 resultsof 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 oftrading 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 finalresults 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 whichmainly 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.


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PERFORMANCE HIGHLIGHTS

(`In Crore)

Particulars FOR THE YEAR ENDED

31-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%


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% 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 0.00

Capital Adequacy (%) 14.63 12.74

Number of Members

Regular 1,34,417 1,62,560

Nominal 4,94,292 5,26,331

Number of Branch Licenses/Branches 200 216

Number of Employees 2,911 3,338

Productivity per Employees 8.08 8.18

Profit Per Employees (in laces) 4.11 6.36

Return on Average Assets (%) 0.74 1.16

Net Interest Margin (%) 2.61 3.52


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CHAPTER 13

PRODUCTS

The products that are offered by Saraswat Bank can be categorized into SIX groups as

follows:


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1) PERSONALThe bank offers retail deposit products like savings, current and term deposit accounts. The

Bank also offers a bouquet of Retail Loan Products such as Vastu Siddhi Home Loan,

Saraswati Education Loan, Car Loan etc. With a view of fulfilling all the needs of the

customers under one roof Bank has entered into tie-ups with various premium institutions,

through which third party products like Life and nonlife Insurance, Mutual Funds and Demat

Services are offered. The NO account called Janhit Account and the CUBS savings

account for the kids are the prominent features of this segment of products offered by

Saraswat Bank. Also, the bank has entered into a tie-up with one of the most respected and

leading industrial house of the nation, TATA MOTORS, to finance its world-renowned most

cost effective NANO cars.

2) NRI (Non Resident Indian)The Saraswat Co-operative Bank is the only Urban Co-operative Bank having a permanent

license from RBI to deal in foreign exchange. This division plays an active role in the Forex

operations through its B-category branches. The Bank has relationship with more than 125

correspondent banks spread over 45 countries covering nine currencies. The banks

International Banking Division monitors the flow of export credit.

The bank offers various NRI deposit products (like FCNR, NRE, NRO and RFC accounts)

and personal loans (against the security of funds held in NRE accounts and NRO accounts) to

the NRI segment.

FCNR ACCOUNTForeign Currency Non Resident (FCNR) accounts are permitted to be maintained in term

deposits only from one year to five years by NRIs. Saraswat Banks accepts such deposits in

three currencies i.e. US Dollar, Sterling Pound and EURO.

NRE ACCOUNT

Non Resident (External) Accounts can be opened by Persons of Indian nationality or originresident abroad. This account is designated in rupees. It can be maintained in the form of


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savings, current or term deposit accounts. Accounts can be opened/credited with remittances

from abroad/transfer from existing NRE/FCNR accounts/ deposit of foreign exchange

brought into India, during visits to India. NRE Accounts can be opened jointly with any other

Non-Resident Indian Principal amount with interest earned is eligible for repatriation abroad.

NRO ACCOUNTWhen an Indian national or person of Indian origin residing in India leaves India for a foreign

country (other than Nepal and Bhutan) for taking up employment, business or vocation

outside India, or for any other purpose, indicating his intention to say outside India

permanently or for an indefinite period, he becomes a person resident outside India. His bankaccount, if any, in India is designated as an Ordinary Non-resident Account (NRO Account).

Such accounts can also be opened with funds remitted from abroad. Funds held in NRO

accounts, can be repatriated outside India with an overall limit of USD one million per

calendar year including sale of assets held by NRIs in India, on production of an undertaking

and certificate Interest earned on these deposits is not exempt from Indian Income-tax.

RFC ACCOUNTResident Foreign Currency Accounts are for the NRIs returning to India permanently. The

balances in NRE/FCNR accounts and other foreign currency funds brought in by the NRI at

the time of return and subsequently from the assets maintained abroad could be freely

invested in RFCs. The funds in RFCs can be remitted abroad for any bonafide purpose of the

account-holder or his dependents without RBI`s approval. The funds can also be withdrawn

by converting into rupees for local payments. If the Returning Indian subsequently goes

abroad to become an NRI, the balance in his RFC account can be converted into an

NRE/FCNR account. Saraswat Bank accepts the RFC accounts in US Dollar currency.


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3) CORPORATEThe bank provides various products catering to the needs of the Mid Corporate, Small &

Medium Enterprises (SMEs), Traders, Professionals and Women Entrepreneurs. The

following arrays of facilities are being provided under this segment:

Working Capital Term Loan Export Finance (Pre shipment and Post Shipment) Import Finance Bank Guarantees Bill Discounting Letter of Credit (Inland and Foreign) Property Loan Rental Loans

4) TreasurySaraswat Bank Ltd. is the first co-operative Bank to set up a Unified Treasury incorporating

Foreign Exchange desk and Money Market desk. The Treasury is located in the city of

Mumbai and has a dealing room with Reuters and Bridge systems. All the treasury

operations are completely computerized. The treasury complies with the statutory obligations

of maintaining C.R.R. and S.L.R. for the Bank apart from managing overall funds. The

Money Market desk is specialized in Money market and Debt market. This is one of the

active G. Sec traders in the market. The following products are offered:

Debt market securities, including Government papers Call money lending and borrowing Retailing of Government Securities and other debt market securities Treasury Bills and Commercial Papers trading


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5) DematModernization in the trading and settlement system has been witnessed in the capital market

through automated trading mechanism of Demat. The advent of Electronic trading and

settlement has brought in transparency in trading and has eliminated risks associated with

Bad Delivery and handling huge load of paperwork. The country has made a remarkable

growth in the capital market by switching over to electronic trading.

Saraswat Bank is registered as depository Participant with NSDL since 22nd February 1999.

Since then it provides the Demat Services to its customers. Services include Pledge, Demat,

Remat, Transfer & Settlement, and Transposition & Transmission.

6) ServicesThe banks value added services can be categorized under this segment. This includes the

following:

Easy Pay- Payment of utility bills like Telephone, Electricity Bills, Cellular PhoneBills, Insurance Premium etc automatically through the customers account.

Mobile Banking- This provides the authorized/registered users to avail the servicessuch as information relating to accounts, details about transactions etc.

ATMs- Provides the ATM facility to the customers. The customers can access over2461 ATMs of 20 members Banks in "BANCS" network, which includes the ATMs

of the Saraswat Bank. For drawing cash from the ATMs of Consortium banks, no

charges are being levied.

Insurance- The bank has a tie-up with HDFC Standard Life Insurance Company Ltdfor offering the life insurance products. The life insurance products includes

Endowment plans, Children plan, Term plans, Pension plans/

For Non Life Insurance products, the bank has a tie-up with Bajaj Allianz General Insurance

Company Ltd, and offers Travel insurance, Health Insurance, Personal Accident Insurance

and Vehicle Insurance.


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Mutual Funds- Considering the changes in Indian demographics (more than 70%of the

population below the age of 35), changes in investment pattern (rising disposable incomes

created a huge potential for investment in Insurance and Mutual Funds), increased

competition and thinning of Interest margins, the Indian Banking Industry had to redesign

their bouquet of products and introduce marketing of third party products like Insurance and

Mutual Funds, to increase fee based income.

To encash on this sentiment, the Saraswat Bank has entered into the Mutual fund distribution

business 5 years back and today it has a tie up with 21 fund houses with total funds invested

at around Rs 100 crores.


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CHAPTER 14

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.


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Customer Service

The bank has adopted the following codes based on the Standard codes documented by

Indian Banks Association:

Customer Fair Practice Code Cheque Collection Code Bankers Lender Liability Code Compensation PolicySaraswat 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 plannedto be commissioned by the Board in the ensuing year.

Industrial Relation:

The Banks 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 VRS

and 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.


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CHAPTER 15

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 food grains 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 banks

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 socialissues 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.


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Page | 48

CHAPTER 16

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

Indias 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 creatingan Environment within the workplace that promotes camaraderie and for many other reasons

that makes your organization one of the Indias.


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CHAPTER 17

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 their 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 householdincome, 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 some time-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 amendthe Banking Regulation Act to permit banks to trade in commodities and commodity

derivatives.


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SUGGESTIONS

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 theIndian 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, assetreconstruction 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 thathave 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 inasset quality also reiterates the operating efficiency of the bank.

Being the largest Urban Co-operative bank, Saraswat Bank is also one of the leadcontenders 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 largestcorporate 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 InformationTechnology 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 sellers market tobuyers market in theindustry and finally it affected at the bankers level to change their approach from

conventional banking to convenience banking and mass banking to classbanking.

The shift has also increased the degree of accessibility of a common man to bank for

his variety of needs and requirements.


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BIBLIOGRAPHY

a. http://www.rbi.gov.in

b. http://www.wikipedia.com

c. http://www.investopedia.com

d. http://www.mca.gov.in

e. http://www.cibil.com

f. http://www.moneycontrol.com

g. http://www.google.com

h. http://www.teachmefinance.com

i. http://www.saraswatbank.com
http://www.rbi.gov.in/http://www.wikipedia.com/http://www.investopedia.com/http://www.mca.gov.in/http://www.cibil.com/http://www.moneycontrol.com/http://www.google.com/http://www.teachmefinance.com/http://www.saraswatbank.com/http://www.saraswatbank.com/http://www.teachmefinance.com/http://www.google.com/http://www.moneycontrol.com/http://www.cibil.com/http://www.mca.gov.in/http://www.investopedia.com/http://www.wikipedia.com/http://www.rbi.gov.in/

Saraswat Project

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