problem and prospect of coperative bank

ACKNOWLEDGEMENT

I wish to express my deep sense of gratitude to my thesis guide,

“Mr. Jagdeep Singh“. His understanding, encouraging and

personal guidance have provided a good basis for the present

report. I gratefully acknowledge for his advice and guidance from

the very early stage of this research as well as giving me

extraordinary experiences throughout the work. Above all and the

most needed, he provided me unflinching encouragement and

support in various ways.

I am also thankful to all employees who

provide the practical information about the banking process,

practical show the working criteria of the bank and those employee

whose “inspiration leads to dedication leads to accomplishment,

Accomplishment leads to acknowledgement.

It’s my immense pleasure to

acknowledge great fully for my parents to give me financial help in

collecting information and sincere thanks to my friends who gave

me suggestion this project over and above.

Last but not the least I am thankful to

almighty god for completing this project report.

Hans Raj Verma

1

CONTENT

CHAPTER TITLE PAGE NO.

1. Company profile/Introduction

2. Organizational Structure

3. Products and Services of HPSCB

4

5. SWOT Analysis

6. Findings and conclusions

7. Personal learning

2

INTRODUCTION

Indian banking sector has tremendously enhanced from past decade. The

main reason behind this growth is continuous urbanization and globalization.

Banking in India has its origin as early as the Vedic period. It is believed that

the transaction from money lending to money banking must have occurred

even before Manu, the great Hindu Jurist, who has devoted a section of his

work to deposits and advances and laid down the rules relating to rate of

interest. During Mogul Period, the indigenous bankers played a very important

role in lending money and finance foreign trade and commerce. The others

that followed were the Bank of Hindustan and the Bengal Bank. The Bank of

Hindustan is reported to have continued till 1906 while the other two failed in

the meantime. In the first half of the 19th century the East India Company

established three banks, the Bank of Bengal in 1809, the Bank of Bombay in

1840and the banks of Madras in 1843. These three banks are also known as

the presidency banks were amalgamated in 1920 and a new Bank-the

imperial bank of India established on 27th January 1921. With the passing of

the state act 1955 the undertaking of the imperial Bank of India is taken over

by the newly constituted the state bank of India.

Banking dates back to 1786, the first bank established in India, then

nationalization of banks in 1969 and recently the liberalization of the same

since 1991. RBI is the central bank of the country since 1934. It regulates,

controls credit, issues licenses and functions as banker of all banks and the

government. With the advancement of technology, banking sector has

become more easy, fast, accurate and also time saving. ATMs, Mobile

Banking, SMS Banking and Net Banking are only the tip of an iceberg. In

3

India the banking sector is segregated as public or private sector banks,

cooperative banks and regional rural banks. Foreign banks have been given

different head followed by upcoming foreign banks in this section.

Without a sound and effective banking system in India it cannot have a

healthy economy. The banking system of India should not be hassle free but

should be able to meet new challenges posed by the technology and any

other external and internal factors. For the past three decades India’s banking

system has several outstanding achievements to its credit. The most striking

is its extensive reach. It is no longer confined to only metropolitans or

cosmopolitans in India. In India banking system has reached even to the

remote corners of the country. This is one of the main reasons of India’s

growth process.

The government’s regular policy for Indian bank since 1969 has paid rich

dividends with the nationalization of 14 major private banks of India.

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:

1. Early phase from 1786 to 1969 of Indian banks.

2. Nationalization of Indian banks and up to 1991 prior to Indian banking

sector reforms.

3. New phase of Indian banking system with the advent of Indian

Financial & banking sector reforms after 1991.

Meaning of bank

You know people earn money to meet their day to day expenses on food,

clothing, education of children, housing etc. They also need money to meet

future expenses on marriage, higher education of children, house building and

other social functions. These are heavy expenses, which can be met if some

money is saved out of the present for people to work and earn their living. The

necessity of saving money was felt by people even in olden days. They used

to hoard money in their homes. With this practice, savings were available for

4

use whenever needed, but it also involved the risk of loss by theft, robbery

and accidents. Thus, people were in need of a place where money could be

saved safely and would be available when required. Banks are such places

where people can deposit their savings with the assurance that they will be

able to withdraw money from the deposits whenever required. People who

wish to borrow money for business and other purposes can also get loans

from the banks at reasonable rate of interest. Bank is a lawful organization,

which accepts deposits that can be withdrawn on demand. It also lends

money to individuals and business houses that need it. Banks also render

many other useful services – like collection of bills, payment of foreign bills,

safe-keeping of jewelers and other valuable items, certifying the credit-

worthiness of business, and so on. Banks accept deposits from the general

public as well as from the business community. Anyone who saves money for

future can deposit his savings in a bank.

Businessmen have income from sales out of which they have to make

payment for expenses. They can keep their earnings from sales safely

deposited in banks to meet their expenses from time to time. Banks give two

assurances to the depositors:-

a. Safety of deposits, and

b. Withdrawal of deposits, whenever needed

On deposits, banks give interest, which adds to the original amount of deposit.

It is a great incentive to the depositors. It promotes saving habits among the

public. On the basis of deposits banks also grant loans and advances to

farmers, traders and businessmen for productive purposes. Thereby banks

contribute to the economic development of the country and well being of the

people in general. Banks also charge interest on loans. The rate of interest is

generally higher than the rate of interest allowed on deposits. Banks also

charge fees for the various other services, which they render to the business

community and public in general. Interest received on loans and fees charged

for services which exceed the interest allowed on deposits are the main

sources of income for banks from which they meet their administrative

expenses.

5

The activities carried on by banks are called banking activity. ‘Banking’ as an

activity involves acceptance of deposits and lending or investment of money.

It facilitates business activities by providing money and certain services that

help in exchange of goods and services. Therefore, banking is an important

auxiliary to trade. It not only provides money for the production of goods and

services but also facilitates their exchange between the buyer and seller. You

may be aware that there are laws which regulate the banking activities in our

country. Depositing money in banks and borrowing from banks are legal

transactions. Banks are also under the control of government. Hence they

enjoy the trust and confidence of people. Also banks depend a great deal on

public confidence. Without public confidence banks cannot survive.

Why Do You Need a Bank Account?

With all the changes taking place in the banking marketplace today, you might

ask yourself do I really need a bank. Why can’t I just find a way to avoid all

these fees? What types of accounts are available to me? It can be mind-

boggling. There are many reasons why a banking relationship is vital:

When you deposit money in a bank, you have the comfort of knowing your

money is in a safe, insured place.

Most people and businesses, including your employer, need to have a

paper trail to document transactions. Checks are a perfect way to keep a

permanent record of business activities, even when they are personal.

Even if you bank online, there is a well-documented trail of all your

transactions.

Using a personal checking account can save your time and money.

Imagine how much lost time, travel expense, inconvenience, and potential

aggravation you could incur every month if

You had to buy money orders or, worse yet, visit all your creditors in

person. The ability to simply write a check and drop it in the mail is

invaluable.

For example, every time you need cash to pay a bill, you simply write a

check to your creditor. Your creditor deposits your check in their bank.

6

Your creditor’s bank processes your check through the Federal

Reserve Banking System (The Federal Reserve Banking System

operates as the U.S.Central bank and, among other activities, provides

banking services to financial institutions and the U.S.government), and

the money is pulled from your checking account. Result for very little

effort on your part, your creditor gets paid.

The same principles apply to savings accounts. Establishing a savings

account keeps your money safe while allowing easy access to it. Plus, you

get the benefit of earning some interest on your balance and putting your

money to work for you.

How Banks Operate

In addition to providing a safe place for your money, banks also loan money to

businesses and consumers. A large portion of a bank’s business is lending.

How do banks get the money they loan? The money comes from depositors

like you. Banks use these deposits to make loans. Every fee you pay to your

bank enables them to reinvest in themselves, giving them more money to loan

to you, for another fee, of course.

Banks are in the business to make a profit. Their profit generally comes from

the difference in interest paid to depositors and the interest earned on loans.

Making loans helps banks make money, and offering checking accounts is a

way to attract deposits, which banks turn into profitable loans.

Banks cannot legally loan all of their deposited money all at once. The

Federal Reserve Board, which is a part of the Federal Reserve System,

requires that banks must keep a certain percentage of their deposits in

reserve at all times, assuring you , the customer, can withdraw your money

when you need to. The remaining funds, which are not subject to reserve, are

used to make consumer loans.

Other Services Offered by Banks

CREDIT CARDS

7

PERSONAL LOANS

HOME AND CAR LOANS

MUTUAL FUNDS

BUSINESS LOANS

SAFE DEPOSIT BOXES

DEBIT CARDS

TRUST SERVICES

SIGNATURE GUARANTEES

Types of Accounts Typically Offered by Banks

Although banks offer a wide variety of accounts, they can be broadly divided

into five types: - savings accounts, basic checking accounts, interest-bearing

checking accounts, money market deposit accounts, and certificates of

deposit. All five are insured by the FDIC (in most cases, up to $100,000 per

account). Most banks offer all these types of accounts, so the bank you

choose probably won’t restrict this decision, although it does make sense to

choose the account type you want first, so you can focus on that type as you

shop around to various banks. Here is a brief description of each type of

account:

Savings Accounts

These are intended to provide an incentive for you to save money. You can

make deposits and withdrawals, but usually can’t write checks. They usually

pay an interest rate that’s higher than a checking account, but lower than a

money market account or CD. Some savings accounts have a passbook, in

which transactions are logged in a small booklet that you keep, while others

have a monthly or quarterly statement detailing the transactions. Some

savings accounts charge a fee if your balance falls below a specified

minimum.

Basic Checking Accounts

Sometimes also called “no frills” accounts, these offer a limited set of services

at a low cost. You’ll be able to perform basic functions, such as check writing,

but they lack some of the bells and whistles of more comprehensive accounts.

8

They usually do not pay interest, and they may restrict or impose additional

fees for excessive activity, such as writing more than a certain number of

checks per month.

Interest-Bearing Checking Accounts

In contrast to “no frills” accounts, these offer a more comprehensive set of

services, but usually at a higher cost. Also, unlike a basic checking account,

you are usually able to write an unlimited number of checks. Checking

accounts which pay interest are sometimes referred to as negotiable order of

withdrawal (NOW) accounts. The interest rate often depends on how large the

balance in the account is and most charge a monthly service fee if your

balance falls below a present level.

Money Market Deposit Accounts (MMDAs)

These accounts invest your balance in short-term debt such as commercial

paper, treasury bills, or CDs. The rates they offer tend to slightly higher than

those on interest-bearing checking accounts, but they usually require a higher

minimum balance to start earning interest. These accounts provide only

limited check writing privileges (three transfers by check, and six total

transfers, per month), and often impose a service fee if your balance falls

below certain level.

Certificates of Deposit (CDs)

These are also known as “time deposits”, because the account holder has

agreed to keep the money in the account for a specified amount of time,

anywhere from three months to six years. Because the money will be

inaccessible, the account holder is rewarded with a higher interest rate, with

the rate increasing as the duration increases. There is a substantial penalty

for early withdrawals, so don’t select this option if you think you might need

the money before the time period is over (the “maturity date”).

BANKING:-

9

Banking is engaging in the business of keeping money for savings and

checking accounts or for exchange or for issuing loans and credit etc. or it is

transacting business with a bank ; depositing or withdrawing funds or

requesting a loan etc.

The term bank derived from that Italian word “Banka” and the banking refers

to the companies that provides banking products and services such as

checking and saving, deposits, loans, leases, mortgages credit cards ATM

network, securities brokerage investment banking insurance, mutual funds

and pensions (Klamath, 2005).

A bank is a financial institution that accepts deposits into lending activities.

Banks primarily provide financial services to customers while enriching

investors.

Banking means accepting for the purpose of lending or investment of deposits

of money from the public repayable on demand or otherwise one withdraw

able by cheque, draft or otherwise.

Banks in India were started on the British Pattern in the beginning of the 19th

century in those days, all the. At the time of second world war about 1500 joint

stock banks were operating in undivided India, out of which over 1400were

non-scheduled banks. These banks were managed by bad and dishonest

management and naturally there were number of failures. Hence the

government has to step in and the banking companies’ act 1949 was enacted

which led to gradual elimination of weak banks that were not in the position of

fulfills the various requirements of the act. In order to strengthen the weak

banks and receive public confidence in banking system a new section45 was

inserted in the Banking Regulation Act in September 1960,Empowering the

government of India to compulsory amalgamate weak unit with stronger ones

on the recommendations of RBI,

A financial institution is not a banking institution if it does not perform the two

primary functions: (i) accepting chequeable deposits, and (ii) making

advances or offering loans.

Thus,

10

LIC is a financial institution but not a bank, as it offers loans but does not

accept chequeable deposits from the people.

Post offices are not banks, even though they accept deposits from the

people. Because they do not offer loans.

Role of Banking in Economic development

Banks provide funds for business as well as personal needs of individuals.

They play a significant role in the economy of a nation. Let us know about the

role of banking.

Banks serve as a channel between savers and investors. Savers deposit

their funds with the banks, and investors borrow the funds from the banks.

In the absence of banking system, bulk of the savings would have the

investors

It encourages savings habit amongst people and thereby makes funds

available for productive use.

It acts as an intermediary between people having surplus money and

those requiring money for various business activities.

It facilitates business transactions through receipts and payments by

cheque instead of currency.

It provides loans and advances to businessmen for short term and long

term purposes.

It also facilitates import export transactions.

It helps in national development by providing credit to farmers, small- scale

industries and self-employed people as well as to large business houses

which lead to balanced economic development in the country.

It helps in raising the standard of living of people in general by providing

loans for purchase of consumer durable goods, houses, automobiles, etc.

Banks help rural sectors. They give liberal loans at concessional rate of

interest to the farmers for the purchase of good seeds, agricultural tools

and equipments for the sake of agriculture.

By providing credit to the entrepreneurs, banks encourage innovations.

New products come to the market. It has a favorable effect on economic

development.

11

Types of Banks

There are various types of banks which operate in our country to meet the

financial requirements of different categories of people engaged in agriculture,

business, profession, etc. On the basis of functions, the banking institutions in

India may be divided into the following types:

A. Commercial Banks:

i. Private sector banks

ii. Public sector banks

iii. Foreign banks

B. Development Banks

C. Specialized Banks(EXIM Banks, SIDBI,NABARD)

D. Central Banks (RBI, in India)

E. Cooperative Banks:

i. Primary credit societies

ii. Central cooperative banks

iii. State cooperative banks

Commercial Banks

A commercial bank is that financial institution which accepts deposits from the

people and gives loans for the purpose of consumption or investment.

Besides, commercial banks these days perform various other functions such

as credit creation, transfer of funds, agency jobs and general services. In

addition to giving short-term loans, commercial banks also give medium-term

and long-term loan to business enterprises. Now- a- days some of the

commercial banks are also providing housing loan on a long-term basis to

individuals.

Types of Commercial Banks

12

Commercial banks are of three types i.e., Public sector banks, Private sector

banks and Foreign banks.

i. Public Sector Banks: These are banks where majority stake is held

by the government of India or Reserve Bank of India. Examples of public

sector banks are: State Bank of India, and nationalized banks like Bank of

India and Canara Bank etc.

ii. Private Sector Banks: In case of private sector banks majority of

share capital of the bank is held by private individuals. These banks are

registered as companies with limited liability. For example, HDFC Bank,

The Jammu and Kashmir Bank Ltd., Axis Bank, Bank of Rajasthan etc.

iii. Foreign Banks: These banks are registered and have their

headquarters in a foreign country but operate their branches in our

country. Some of the foreign banks operating in our country are Hong

Kong and Shanghai Banking Corporation (HSBC), CITI Bank, American

Express Bank, Standard & Chartered Bank, Grind lay’s bank etc. The

number of banks operating in our country has increased since the financial

sectors reforms of 1991.

Development Banks

Business often requires medium and long-term capital for purchase of

machinery and equipment, for using latest technology, or for expansion and

modernization. Such financial assistance is provided by Development Banks.

They also undertake other develop subscribing to the shares and debentures

issued by companies, in case of under subscription of the issue by the public.

Industrial Finance Corporation of India (IFCI) and State Financial

Corporation’s (SFCs) are examples of development in India.

Specialized Banks

There are some banks, which cater to the requirements and provide overall

support for setting up business in specific areas of activity. EXIM Bank, SIDBI

and NABARD are examples of such banks. They engage themselves in some

13

specific area or activity and thus, are called specialized banks. Let us know

about them.

i. Export Import Bank of India (EXIM): If you want to set up a

business for exporting products abroad or importing products from foreign

countries for sale in our country, EXIM bank can provide you the required

support and assistance. The bank grants loans to exporters and importers

and also provides information about the international market. It gives

guidance about the opportunities for export or import, the risks involved in

it and the competition to be faced, etc.

ii. Small Industries development Bank of India (SIDBI): if you

want to establish a small-scale business unit or industry, loan on easy

terms can be available through SIDBI. It also finances modernization of

small-scale industrial units, use of new technology and market activities.

The aim and focus of SIDBI is to promote, finance and develop small-

scale industries.

iii. National Bank for Agricultural and Rural Development

(NABARD): It is a central bank or apex institution for financing

agricultural and rural sectors. If a person is engaged in agriculture or other

activities like handloom weaving, fishing, etc. NABARD can provide credit,

both short-term and long-term, through regional rural banks. It provides

financial assistance, especially, to co-operative credit, in the field of

agriculture, small-scale industries, cottage and village industries

handicrafts and allied economic activities in rural areas.

Central Bank

Central Bank is the apex bank responsible for controlling the entire banking

system of a country. Such a bank does not deal with the general public. It acts

essentially as government’s banker; maintain deposit accounts of all other

banks and advances money to other banks, when needed. In case of

underdeveloped economies, it is instrumental in the process of growth. It is

the sole agency of note issuing in a country. It serves as a banker to

government and controls the supply of money in the country. In India,

14

Reserve Bank, in England, Bank of England and in America Federal Reserve

System operates as central bank. Although, the first central bank in the world

was set up in 1668 in Sweden, effective central banking came into being in

1694 with the establishment of Bank of England.

Co-operative Banks

The word co-operative stands for willing to work together in the production

and marketing of goods, it is profitable to both producer and consumer to

avoid middlemen. If, for instance, farmers can set up their own markets

instead of sending their produce to a wholesaler, they can sell at a price that

includes only their costs and a fair profit: Additional wholesale and retail costs

are avoided, and prices to the consumer are kept relatively low. In order to

take part in this kind of direct production-marketing enterprises, people have

formed cooperatives these are voluntary associations of either producers or

consumers who band together group member’s benefits for them.

Cooperative organizations formed for financial benefits exist in most

countries of the world. The cooperative way of doing business takes many

forms, ranging from local to regional and federated organizations and from

highly specialized to multipurpose societies. The cooperative banks have a

three tier structure. At the top level there are state cooperative banks, at the

district level there are central cooperative bank, at local level there are rural

primary cooperative banks and urban primary cooperative banks.

Cooperative banking structure h unique position in the rural credit delivery

system of India. The cooperative banking sector which is now a century old

has a significant role in the field of credit to the rural through the short-term

and long-term structure from many years the cooperative banks are the prime

institutional agencies with a vast network, wide coverage and reach up to the

remote areas. Keeping the view of cooperation the H.P. State Cooperative

Bank was established in Himachal Pradesh in august 1953 under the

15

cooperative Society Act, 1912. Onward from its establishment the bank is

developing day by day and satisfying the needs of many people.

Seven Principles of Cooperation:

1. Voluntary and Open Membership

2. Democratic Members Control

3. Member Economic Participation

4. Autonomy and Independence

5. Education Training and Information

6. Cooperation among Co-operatives

7. Concerned for the community

Types of Co-operative Banks:

Cooperative is a voluntary association of people of usually limited means

pursuing for common cause through democratic & cooperative principles. A

bank is a financial institution accepting public from the public repayable on

demand for onward lending.

A. Short term Structure:

i. State Cooperative Bank

ii. District Central Cooperative Bank

iii. Primary Cooperative Societies

B. Long term Structure:

i. State Cooperative Agriculture and Rural Development Bank

ii. District Cooperative Agriculture and Rural Development Bank

iii. Primary Cooperative Societies

C. Urban Commercial Banking.

The banks of Short-term Credit Structure generally advance loans for short-

term & medium term only. Whereas the long-term credit structure takes care

16

of long term credit requirements. The urban coop. banks provide commercial

banking services in urban areas.

There are three types of co-operative banks operating in our country. They

are primary credit societies, central cooperative banks and cooperative banks.

These banks are organized at three levels, village or town level, district level

and state level.

I. Primary Credit Societies: These are formed at the village or town

level with borrower and non-borrower members residing in one locality.

The operations of each society are restricted to a small area so that the

members know each other and are able to watch over the activities of

all members to prevent frauds.

II. Central Co-operative Banks: These banks operate at the district

level having some of the primary credit societies belonging to the same

district as their members. These banks provide loans to their members

(i.e., primary credit societies) and function as a link between the

primary credit societies and state co-operative banks.

III. State Co-operative Banks: These are the apex (highest level) co-

operative banks in all the states of the country. They mobilize funds

and help in its proper channelization among various sectors. The

money reaches the individual borrowers from the cooperative banks

through the central co-operative banks and the primary credit societies.

COOPERATIVE MOVEMENTS IN HIMACHAL PRADESH: AN

OVERVIEW

The word “Himachal” derives its origin from the two words, Him and Anchal

which means “snow” and “lap” respectively. Thus, entomologically, Himachal

Pradesh stands for the region which lies in the slopes and foothills of snow i.e.

the Himalaya. Before 1948, this region was known as the Punjab Hill states.

In March 1948, Himachal Pradesh emerged on the national scene as a

centrally administrated territory which comprised 21 East Punjab Hill State. In

1954, the territory of part ‘C’ state of Bilaspur was merged with Himachal

17

Pradesh. In 1966, on the basis of the report of the three members Punjab

States Reorganization Commission, Hilly Areas of the erstwhile Punjab mainly

Kangra, Kullu, Shimla, Nalagarh, Lahaul and Spitti and some area of Hoshiar

district were merged into Himachal Pradesh.

In 1971 Himachal Pradesh had given the status of full-fledged state.

Presently, the state comprises of twelve districts namely Shimla, Chamba,

Kangra, Una, Bilaspur, Hamirpur Mandi, Kullu, Lahaul and Spitti, Solan,

Sirmourand Kinnaur. According to the census report of 1991, the state has a

total population of 51, 11,079. District Kangra tops the list of the population

size while Lahaul and Spitti have the lowest population. Geographically,

Lahaul and Spitti have the largest area while Hamirpur has the smallest one.

HISTORY OF CO-OPERATIVE BANK:

The beginning of Indian cooperative movement was placed at 1904;”The

cooperative credit societies Act” was passed on 25th March, 1904. The Indian

Cooperative Movement continued to be a predominantly credit movement till

the eve of interdependence. After interdependence, cooperation was

accorded an important place in the planned economic development.

Cooperative Credit Institutions as an integral part of Rural Credit System in

India has completed 104 years, the Commercial Banks and Regional Rural

Banks have been for almost 37 and 31 years respectively. In fact, this

structure has been very unique as compared to any other country in the world.

It serves around 120 million rural households residing in about seven lakh

villages through its 92000 primary agricultural credit societies, 1146 branches

of short-term cooperatives, 2213 branches of long term cooperatives, 32948

branches of commercial banks and 11426 branches of regional rural banks.

The Himachal State Co-operative Bank was registered on 21th August 1953

under the Cooperative Societies act 1912 after amalgamating the Mahasu

Central Cooperative Bank Ltd; the Mandi Central Cooperative Bank; and the

Chamba Central Cooperative Bank Ltd. The Bank started its operations on

15th March 1954. In the year 1955, Bank of Sirmour, a Joint Stock Bank was

also merged in it. As a result of reorganization of Punjab State on 1st

18

November, 1966, the erstwhile districts of Kangra, Kullu, and Lahaul & Spitti,

parts of Hoshiarpur, Gurdaspur and Ambala districts were transferred end

merged with Himachal Pradesh. As a result, the Cooperative Banking System

of the merged areas was also transferred to Himachal Pradesh. In these

areas, the Kangra Central Cooperative Bank and the Jogindra Central

Cooperative Bank were already functioning.

In the year, 1972 Solan was given the status of separate district. Two

branches of Himachal Pradesh State Cooperative Bank Ltd; were functioning

at Solan and Arki, while one branch of Jogindra Central Cooperative Bank

was functioning at Totu, which fell in Shimla district. The liabilities and assets

of these branches were transferred to each other on 29th September 1976.

Now in Himachal Pradesh, the state cooperative bank Ltd; with Head Office at

Shimla is functioning as a central cooperative bank in 6 districts namely

Shimla, Bilaspur, Mandi, Chamba, Sirmour, and Kinnaur having 36 blocks.

The Kangra Central Cooperative Bank with Head Office at Dharamashala is

functioning as a central cooperative bank in 5 districts having 28 blocks. In

Solan district, the Jogindra Central Cooperative Bank is catering to the needs

of people in 5 blocks. Besides, being a state cooperative bank for the stat as

whole, the Himachal Pradesh cooperative bank is working as the financing

agency for the 6 districts of state and an apex bank for whole of the state. The

Himachal Pradesh Co-operative bank is serving the people of the State

through a network of 190 branches and Extension Counter of which about

94% is in the rural areas of the State and one branch at New Sabzi Mandi

Azadpur New Delhi for the benefit horticulturists of the State.

PERFORMANCE OF THE BANK OVER THE YEARS

(Fig. In Rs.Lacs)

Particular 1955 2003 2005 2006 2010 31-03-

2011

30-06-

2011

No. of

Branches

10 142 148 154 175 175 175

Share

Capital

7.32 740.08 761.98 757.73 814.00 837.69 837.69

19

Deposits 41.14 150674.29 186268.70 212052 494177 500552 503146

Loans &

Advances

29.19 41863.69 77044.47 78564 164485 221043 225149

Investment 8.25 129996.00 140055.89 170735 385951 390487 387395

Working

Capital

52.23 193082.89 246227.80 278129 592042 662237 657468

Recovery

%age

- 68.88 79.08 72.24 72.62 78.11 57.67

Profit - 8297

(Gross

)

What are the functions of Cooperative Banks in India?

The cooperative bank in India plays an important role even today in rural

financing. The business of cooperative bank in urban areas also has

increased phenomenally in recent years due to the sharp increase in the

number of primary co-operative banks.

Cooperative Banks in India are registered under the Co-operative

Societies Act. The cooperative bank is also regulated by the RBI. They are

governed by the Banking Regulations Act 1949and Banking Laws (Co-

operative Societies) Act, 1965.

Cooperative banks in India finance rural areas under:

Farming

Cattle

Milk

Hatchery

Personal finance

Cooperative banks in India finance urban areas under:

Self-employment

Industries

Small scale units

Home finance

Consumer finance

20

Personal finance

Main Features of Cooperative Bank:

1. The bank is conscious of its main objective to the economic interests of

the members of the bank /rural masses in accordance with the

cooperative principles and to facilitate the operations of the cooperative

societies registered under the Act.

2. The H.P. State cooperative bank Ltd is serving the people of the state,

particularly rural masses through a network of 175 branches and 15

extension counters in six districts of Himachal Pradesh. The Bank follows

a policy of bank expansion in such a way that besides the financial

viability, social obligation aspect is also taken into consideration so that

every nook and corner of the rural areas is provided banking facilities.

3. The H.P. cooperative bank in rest of six districts is serving the people

through 180 branches of its two-affiliated district. Central Cooperative

banks viz. The Kangra Central Cooperative Bank & Jogindra Central

Cooperative Bank.

4. To meet the challenges of economic liberalization and technological

advancement. the bank has implemented the centralized core banking

solution (CBS) of Natural Technologies Ltd. In 14 prime branches and is

now capable of extending banking to its customers anywhere, with faster

processing and greater customer satisfaction.

5. The bank is fully computerized as on date with 53 branches under (CBS)

and under (TBA) system.

POSITIONAL STATUS

The Himachal Pradesh State Cooperative Bank works at the Apex level in the

hierarchy of the cooperative banking. It acts as the central financing agency to

the Kangra Central Cooperative bank & Jogindra Central Cooperative bank

the bank has the working capital of Rs. 418334.59 lacks and deposits are

343375.01lacks.

MISSION AND VISION

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Mission/Targets of the bank are to help the self helped groups by providing

them loans at low rate. Providing the education to the workers/employees of

the cooperative societies. Managing the financial status of the cooperative

societies.

I. Connecting all the branches with the core banking system (CBS) to

provide the online banking facility till 2010.

II. Installing the ATM Machines in all the branches.

III. Achieving the schedule status for the bank.

IV. Providing the retail banking to the customers with the help of

Information Kiosk.

V. Providing the SAMAGR banking facilities to the customer in one

branch.

VISION

I. To providing the loans to the cooperative societies to establish the

viaduct pariyojna.

II. Starting the new schemes for the cooperative societies to recover the

NPA (Non Performing Assets).

III. Opening the education center for cooperative societies to

improve/increase the business through giving them proper training

&suggestions.

IV. Providing the loans for new schemas time to time and loans schemes

should be easily understood by the people.

V. Repairing the plans for encouraging &awarding the employees of the

Bank.

Present Status of Bank

In term of market share the market share of the bank in the

Himachal Pradesh is about 55% of the total shares of the banks in

Himachal Pradesh. When we talk about the size of the bank it has

175 branches all over the Himachal Pradesh. The major

competitors of the Himachal Pradesh State Cooperative Bank and

its alliance are SBI, ICICI, Punjab National Bank, UCO bank and

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other banks. In case if the bank has shortage of money and bank

needs the money is the share holders or the RBI. When we say

bank need money then the question arises why the bank need the

money it may be for lending the money to the needy persons, or to

provide the money to the depositors in case when the depositor

takes the money back or person who takes the loan are known as

the customers of the bank.

Awards and Other Recognitions

The H.P. State Cooperative Bank Ltd; has granted the national award for

achieving overall excellence in banking operations.

The H.P. State Cooperative Bank Ltd; “the first cooperative bank to

implement core banking computer solution (the facilitator of internet

banking) where as only few of nationalized banks are providing this

system”.

The H.P. State Cooperative Bank Ltd; is one of the few organizations

which are in true profit and are paying the dividend continuously.

The H.P. State Cooperative Bank ltd; has doubled the agricultural

advancements in about 2 years against the planned period of Govt. of

India of each 3years.

The H.P. State Cooperative Bank Ltd; is the winner of the “Best Outreach

Award” for SHGs.

Bank has innovated and implemented loan schemes to suit the

requirements of all sections of the society. The main emphases of banks

services are deprived rural masses.

Bank is also involved in implementing the programs related to eradication

of poverty run by the Govt. like SGSY/SJSRY, Rural Housing etc.

The credit needs of farmers are also fulfilled by the bank at low rate of 7%.

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ORGANISATIONAL STRUCTURE:

The organizational structure of the H.P. State Cooperative Bank Ltd Is shown

below:

General Body

Board of Directors

Executive Committee

Chairman

Chief Executive Officer (Managing Director)

General Manager (Admn.) General Manager (Banking)

Dy. General Manager (Admn.) Dy. General Manager

(Banking)

Section Heads Section Heads

Staff Staff

District Manager District Manager

Staff Staff

Branch Manager Branch Manager

Staff Staff

WORKING OF COOPERATIVE BANK: The bank works in three steps:

1. HEAD OFFICE: Various activities take place in the Head Office i.e.

planning, organizing, directing, staffing, controlling, reporting, and

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budgeting. There are various sections under which these activities take

place. The sections are:

Planning section: BDD(Business Development Department)

Recovery section

Recruitment section

Internal checks and control system

Statistical section

Computer section

Law section.

2. DISTRICT OFFICE: It is the controlling office for the managers.

3. BRANCH: Actual business of the bank takes place at the branch

The bank works by a 2-tier system i.e. the central cooperative bank and the

packs

CONTROL SYSTEM IN COOPERATIVE BANK:

One inspection of the branch by the district manager

Surprise visit in the head office

Report is submitted of the visit is given to the branches and one month

time is given for rectification if needed.

Section Visit in HP State Cooperative Bank and Their

Function:

Loans and Advances Section:

The main aim of loan and advances section is to treat their customer like a

guest. This section mainly looks that the documents which are needed by

the bank while giving loan are properly arranged or not and all the

certificates required are given by the customer or not.

In this bank the main preference is given to himachalies. This bank is of

the state and for the state.

An individual can only take loan up to 60 lakh including all cases or all

loans from all banks.

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Branch Control Section:

Branch control section regulates and monitors all the Branches of the

bank. This section mainly looks after the affairs of the branches.

This section is assigned the duty to look after the procedures of the

branches (this branch is following the entire circular and notices issued by

the bank or not).

If the instructions or notices or circulars are not followed by the bank a

formal letter is issued by the bank for further details.

Vigilance section:

The main purpose of vigilance section is to inspect the fraud and the

further action is taken.

The vigilance section inspect or verify things correspond and physically.

PRODUCT AND SERVICES OF THE HPSCB

A. DEPOSIT PORTFOLIO:

Demand Deposits

Current Account:

Current Account is a running account which may be operated upon any

number of times during a working date. There are no restrictions imposed on

the amount of the withdrawals from a Current Account.

Eligibility All types of customers.

Minimum Amount Individual Rs 2000/- minimum balance Rs.50/- for default

Other than Individual Rs3000/- minimum balance Rs. 100/- for default

Nomination Facility No clean overdraft is allowed against liquid security i.e.

duly discharges Term Deposit Receipts.

Saving Account:

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Savings Bank Account is the most common type of demand deposit. The

depositor can open the account, deposit and withdraw money as and when

required. There is a minimum balance required to be maintained and a

cheque book is given to the customer to enable withdrawals. The customers

can withdraw money using the withdrawal forms prescribed by bank and

available at the branch.

Eligibility All types of customers except firms

Minimum Amount Rs 1000with cheque book facility Rs 500 without Cheque

book Nomination Facility Nomination facility is available only for the

individual & joint accounts.

Time Deposits

Recurring Deposit (RD):

A Recurring deposit or cumulative deposit account is a variation of Savings

Bank account. It is an account intended to develop habits of savings on

regular basis by the depositor with limited means. In this account type the

depositor commits to deposit a fixed amount for a fixed period of time (for

example Rs 100 every month for 12 months) and gets a lump-sum amount at

the end of such period. The depositor does not get the intervening period. The

terms i.e. fixed amount, interval and fixed time period that is decided at the

time of opening the deposit cannot be altered.

Eligibility All types of customers.

Minimum Amount Rs 10 and in multiples of Rs 5 thereof.

Maturity Period 12, 24, 36, 48, 60, 72, 84, 96,108,120months

Payment of Installment The installment of any calendar month shall be paid

on or before the last working day of that month Standing Instructions are

accepted for transfer of monthly.

Fixed Deposit (FD):

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Fixed deposit accounts which are also called term deposit also include the

deposits revived by the bank for a fixed period and a fixed rate of interest

specified in advance. Such deposits are repayable on the expiry of a specified

period as indicated by the depositor. The periodicity of such deposits is

generally fixed for periods of 12 months and above. Any deposit received in

the nature of fixed deposits for the period less than 12months is called”

SHORT TERM DEPOSIT”.

Eligibility All types of customers.

Minimum Amount Rs 500

Loan Against Deposit Loan against this deposit is allowed.

Him Puner-Nivesh Deposits:

This is a term deposit that can be opened for a minimum period of 12 months

to a maximum period of 120 months. The depositor gets a lump sum amount

at the end of the maturity and no interest is paid between.

Eligibility All types of customers.

Minimum Amount Rs500

Loan Against Deposit Loan against this deposit is allowed

Sarva Priya Deposit:

This is a form of term deposit wherein the depositor can deposit money for 12

months or more. The interest will be credited to the depositor on a monthly

basis. The depositor must have or (open a new) Savings Bank Account to

enable the bank to credit the interest in the SB account.

Eligibility All types of customers.

Minimum Amount: Rs1000.

Maturity Period The deposit can be accepted for a period of 12 months and

above.

Maha Laxmi Deposits:

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This is a term deposit designed in such a way that the depositor gets double

the money he deposits after a certain maturity period. The depositor does not

get any interest in the intervening period.

Eligibility All types of customers except firms

Minimum Amount Rs 100 and in multiples of Rs 100thereof

Maturity Period: 87months only.

B. LOAN PORTFOLIO:

Accepting deposits from the public is a liability on the bank unless the amount

so mobilized is profitably and efficiently deployed in loans & advances and

investment. The classical loan structure of a Cooperative Bank takes into

account credit requirements of Agriculture/Cooperative Sector only. Number

of new loan schemes were devised and incorporated in its loaning portfolio to

take into account credit requirements of the public in general and to extend

the advantages to the weaker sections of the society and to march with

welfare programmers pronounced by the State.

Cooperative Bank has introduced the following major schemes for the benefit

of people/depositors:-

In order to help educated un-employed youths of the State and to assist

them in productive ventures, a Self-Employment Loan Scheme has been

launched to take care of all production and service activities.

A scheme for assisting brilliant students in pursuing their higher studies

has been incorporated with a maximum admissible loan limit of Rs 15 lack

for studies pursued abroad & Rs 7.5lacs for studies in India.

The Bank has also started financing the beneficiaries as sponsored under

the poverty eradication programme of the government viz. SGSY/SJSRY.

The Bank has also entered into a tie-up arrangement with the H.P.SC/ST

Dev. Corporation & HP Women Dev. Corporation for entertaining the

proposals sponsored by them for financing under their margin/seed money

scheme.

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A scheme for financing of individuals for purchase of vehicles for

commercial use within meaning of SRTO (of NABARD) has also been

implemented in order to improve the economic conditions of the people.

Home Loan:

HPSCB HOME LOAN makes your dream home come true!

Maximum Limit Rs 10 lacks per employee.

Eligibility Employees of

Government Department/Boards/Corporations/Statutory Bodies etc

Eligibility Criteria 50 times of the gross monthly salary of the applicant or Rs

10lacks whichever is less ensuring 35%take home salary by the loanee after

payment of installment of loan.

Margin 25% Repayment Period 15 years.

Security House constructed/purchased shall be kept under charge of the bank

along with one guarantor. One time collateral security by taking at 50% of its

present value.

Car loan:

Maximum limit Rs 3.50 lacks per employee, per vehicle, however in

exceptional cases loans up to Rs 6 lacks can be considered.

Eligibility Employees of Government

Department/Boards/Corporations/Statutory Bodies etc.

Purposes Purchase of Vehicles for Self-use.

Eligibility Criteria 90% of the invoice price of vehicle to be purchased or Rs

3.50 lacks whichever is less ensuring 35% take home salary by the loanee

after payment of installment of loan.

Margin 10% .6Repayment Period 5 Years.7Security Hypothecation of vehicle.

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Personal Loan:

Maximum Limit Rs 1 lakh per borrower employee.

Eligibility Employees of Government Department /

Boards/Corporation/Statutory Bodies etc.

Purposes for purchase of consumer durable goods like computers, TV,

Refrigerator, Household furniture, washing Machine etc. For self use

Eligibility Criteria An employee can avail this loan to the extent of 10 times

of his net monthly salary with a maximum limit of Rs 1 Lakh.

Margin 10%. Repayment period 5 years. Security Hypothecation of

assets/articles purchased.

Education Loan:

Maximum Limit Rs.3 lakh per borrower.

Eligibility Students who have got admission to some professional or other

courses and whose prospects of getting employment are very good.

Purposes For pursuing higher studies by their children.

Eligibility Criteria 50 times of the gross monthly salary of the applicant or Rs

10lakh whichever is less ensuring 35%take home salary by the loanee after

payment of installment of loan. Margin Up to Rs 25000………….25% above

Rs 25000………….30%

Repayment Period 5 years after the borrower gets employment of one year after completion

of course whichever is earlier.

Hotel/Motel/Tiny Tourism Loan:

Maximum Limit 1500000/-without CA above 15Lakh with prior CA from

NABARD. Eligibility Individual.

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Purposes To boost tourism activities.

Repayment Period. Maximum period of five years including moratorium

period of 1-2 years or completion of construction whichever is earlier.

Collateral Security. The land and construction thereon along with other

assets created shall be mortgaged/Hyp. In favor of the bank.

Other Loans are divided into following Categories:-

Priority sector (Farm sector)

Non-priority sector (non-farm sector)

Priority sector loan:

1. Kisan Credit Card Scheme Individual/Society

2. Dairy entrepreneurship Development Scheme/HIM Dugdh Ganga Loan

Scheme.

3. Pt. Deen Dayal Kisan Bagwan Samridhi Yojna for Poly House-II

4. Medium Term Agriculture Loan (Farm Plus)

5. Cash Credit Marketing Limits to societies

6. Tractor/Power tiller loan

7. Horticulture Loan Scheme

8. Small Ruminants and Rabbits

Non-Priority sector Loan:

1. Loan under Tie-up with SC/ST Development Corporation with Women

Development Corporation

2. Self Employment loan

3. Scheme for financing loan to Pensioners/ Ex- Servicemen against

Pension-revision & incorporation thereof

4. Parivahan loan scheme

5. Gold Loan

6. SHG

7. Hydel Power Loan Scheme

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8. Tourism cooperative societies

9. LPG Loan Scheme

10.Rural Godown Loan Scheme

11.Him Region Specific Loan scheme(Trucks)

12.JLG Loan scheme

C. OTHER FACILITIES RENDERED

Besides two primary functions of a Bank viz. accepting deposits from the

public and development thereof in shape of loans and investment, the Bank is

also offering ancillary services to its customers like; providing safe locker

facilities to the customers, transfer of funds etc. 28 branches of the Bank,

which mainly situated at District Head Quarters and selected Sub-Divisional

Heads are providing the safe locker facility to the Customers.

Safe Deposit lockers

ATM Facility

Fund Remittance

Customer Grievances Cell, etc.

SWOT ANALYSIS

The overall of a business’s strengths, weaknesses, opportunities, and threats

is called SWOT analysis. SWOT analysis consists of an analysis of external

and internal environments.

SWOT ANALYSIS

ENVIRONMENTAL SCAN

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---------------------------------------------------------------

INTERNAL ANALYSIS EXTERNAL ANALYSIS

------------------------ ---------------------------

STRENGTH WEAKNESS OPPORTUNITY THREATS

External Environment Analysis:

In general, a business unit has to monitor key macro environment forces

(demographic economic, technological, political-legal, and social-cultural) and

microenvironment factors (customers, competitors, distributers, and

suppliers)that affect its ability to earn profits Then, for each trend or

development, management needs to identify the associated marketing

opportunities and threats. A marketing opportunity is an area of buyer need in

which a company can perform profitably. Opportunities can be classified

according to their attractiveness and their success probability. The company’s

success probability depends on whether its business strengths not only match

the key success requirements for operating in the target market, but also

exceed those of its competitors. Mere competence does not constitute a

competitive advantage. The best-performing company will be the one that can

generate the greatest customer value and sustain it over time. An

environmental threat is challenge posed by an unfavorable external trend or

development that would lead, in the absence of defensive marketing action, to

seriousness and probability of occurrence. Minor threats can be ignored;

somewhat more serious threats must be carefully monitored: and major

threats require the development of contingency plans that spell out changes

the company can make if necessary.

Internal Environment Analysis:

It is one thing to discern attractive opportunities and another to have the

competencies to succeed in these opportunities. Thus, each business needs

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to periodically evaluate its internal strengths and weaknesses in marketing,

financial, manufacturing, and organizational competencies. Clearly, the

business does not have to correct all of its weaknesses, nor should it gloat

about all of its strengths. The big question is whether the business should limit

itself to those opportunities in which it possesses the required strengths or

considered better opportunities to acquire or develop certain strengths.

Sometimes a business does poorly because its departments do not work

together well as a team. It is therefore critically important to assess

interdepartmental working relationships as part of the internal environmental

audit.

STRENGTH:-The strengths of the HP State Cooperative Bank Depending

on its external and internal environment are.

1. The bank is spread into only 6 districts due to its limited area it is easy to

monitor minor requirements of the customers which may else ignored by

other banks.

2. The bank provides the easiest way to open a new account into any of its

branch as the customers has to fill minimum requirements which are

asked by other banks.

3. The bank has the branches in the remote areas where the branches of

other public banks are not yet opened which provides the strength.

4. As it is a government bank and never under losses the people have faith in

the bank.

5. As the bank is a cooperative bank thus bank gets the advantage of getting

priority by the different cooperative societies for transactions and loans.

6. It has great amount cooperation with other district cooperative banks

(Kangra Central Cooperative Bank, Jogindra Central Cooperative Bank).

7. The HP State Cooperative Bank has well organizational structure.

8. The main priority of The HP State Cooperative Bank is member services

rather than profit.

9. The HP State Cooperative Bank well established in the community.

10.Adhere to cooperative values and principles and follow rules and

regulations which are given by the government.

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11.The HP State Cooperative Bank deals the user as not only the customers

but also the member of the bank.

12.The HP State Cooperative Bank Has the capacity to thrive in crises.

13. It is a government bank and has a government backup.

14.The main emphasis of The HP State Cooperative Bank is on

GLOBALISATION.

WEAKNESSES:-

1. The HP State Cooperative Bank has less resources’ as compared to the

other nationalized and public banks.

2. The staff in cooperative bank is not specialized.

3. No internet banking and mobile banking.

4. Political pressures on the employees of the bank as compared to the other

banks.

5. ATM’s are not well spread like other nationalized and public banks.

6. In the HP State Cooperative Bank dependence syndrome is there. Each

person thinks that his work may be done by the other and is not always

willing to do their work.

7. All branches are not computerized.

8. There is some sort of government control over the working of the HP State

Cooperative Bank and this leads to transfers and discomfort of employees.

9. In Cooperative Banks ATM only cooperative bank ATM’s work and no

other bank’s ATM’s work.

10.Lack of time management.

11.Less advertisement is other weakness of The HP State Cooperative Bank.

12.Lack of knowledge about the many aspects of banking to the employees

due to lack of specialization in that field of work.

OPPORTUNITIES:-

1. Being a government bank it has the capability to finance government

projects.

2. Providing ATM facility may take bank a long way.

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3. With the growth of Axis bank in the term of customers and market share

the growth of bank is also per mote.

4. Existence of bank in remote areas.

5. Being government Cooperative Bank this bank gets priority over the other

banks for cooperative societies.

6. As it is a state cooperative bank this bank is bank in demand.

THREATS:-

1. Easy policies and new schemes of the public banks.

2. Online banking and mobile banking facilities of other nationalized and

public banks.

3. Facilities like ZERO BALANCE ACCOUNT by some of public sector bank

and other banks.

4. Employee’s strikes.

5. Advent of MNC Banks is a big threat to the cooperative Bank.

6. Public banks are of great threat to the HP State Cooperative Bank

7. More significant brand image in public acceptance of product and services

of public and nationalized banks as compared to cooperatives banks.

8. Less documentation of the public banks for different types of loans.

9. Increasing market share of the other bank threaten the HP State

Cooperative Bank to its position in the market.

10. Instant/one minute service provided by some banks.

FINDINGS AND CONCLUSION

FINDINGS:

1. Fr study purpose I have taken the followings factors:

Interest on loan and savings

Publicity & advertisement

Behavior of staff towards customers

Knowledge of staff regarding bank services

Bank’s innovation towards introducing new services

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Safety of deposit

Speed of Delivery

Through, I have found that there is no significant difference between the

factors i.e. customers have given equal importance to all the factors.

2. 64% people maintained saving account, 20%loan account, and 6% current

account.

3. Banks have adopted the many technologies but for study purpose I taken

only for technologies like online transfer of cash, Mobile Banking, ATM’s

and Internet Banking. People are equally aware of technology considered

for study. ATM”s has been found a little bit unknown technology among

customers.

4. Security related apprehensions have been found more influencing to

prevent the customers from using new technologies than the factor-

Unawareness about the new technologies.

5. According to people Public Banks are more advanced in technology than

cooperative banks.

6. 56% people are agree that there are improvement in customer services in

this bank and 28% are strongly agree & rest are undecided.

7. 52%people think that cooperative banks offers competitive interest &

charges and 48% are not.

8. 50% people feel the need of customer’s grievances redressed system and

rest don’t feel.

SUGGESTIONS:-

1. Banks should focus more on safety of deposits as this has been found

most important in affecting the customer’s attitude towards services of

Banks

2. No doubt, globalization and advancement in technology has made

introduction of products and excess to new services but banks should not

underestimate the customers as customers are essence of success in

today’s life.

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3. Private Banks are most advanced in technology than public banks and

cooperative banks in spite of that fact that private bank came into

existence after public and cooperative banks. So public and cooperative

banks should consider the technology as an important factor for growth.

4. Most of customers are not using new technology like internet banking and

mobile banking because of security related apprehensions. So banks need

tighten their security system so that their customers feel comfortable while

accessing to new technology.

5. Many customers are unaware of customer’s grievances redressal system.

So banks should create awareness about this.

CONCLUSION:-

Banks are the most important constituents of the financial infrastructure of a

country. They play a vital role in bringing about the desired change in the

economic development of a to the investor a source of finance. Banks help in

the implementation of various welfare programs of the government. Though

originally banks were conservative in their approach. The initiative of the RBI

they have taken certain measures to improve customer service. Many banks

have started the process of setting up core banking solutions in order to

provide their customers better services at reasonable costs.

The RBI also set up many committees in order to understand the problems

faced by the customers and took certain remedial measures to improve them.

In the present scenario, the banking sector in India has become more

upgraded in terms of supply, product range and customers reach. The

expansion, greater competition and diversification of ownership of the banks

have made this sector more efficient in terms of standards. Today, the face of

the present banking sector has changed. Easier access to knowledge,

advancement in technology and introduction of tailor-made financial products

has become the key features of banking.

Liberalization of financial services and expansion of banking services have

resulted in enhanced efficiently and systematic resilience. There are also

concerns before banks which they need to deal with on a priority basis.

39

In order to survive in a global competitive scenario and to protect the

depositors, interest and public faith, banks need to have: a fraud-free culture,

an effective customer grievances redressed cell and an appropriate human

resource system. Unfortunately all these conditions are not satisfactory in the

banking system.

PERSONAL LEARNING

Having training in HP State Cooperative Bank was really informative and

educational. I was able to learn lots of things, which I was not renewing

earlier. Firstly I learned what a bank is, its organization structure, features and

objectives of banks, types of banks, functions of banks. I learned about

various types of account its and various types of loans. The basic idea

regarding the banking system was given.

After that learned about the history of co-operative bank, its formation, its

branches, its features and objectives. I learned about various deposits and

loan schemes. My topic was problems and prospects of HP State

Cooperative Bank Ltd. By working on this topic, I get information regarding

the various problems faced by the staff of HP State Cooperative Bank while

rendering services to the customers. I learned each minute thing about this.

I learned about the internal behavior of the employees of the HP State

Cooperative Bank then I learned how they maintain good relation with

customers. I was given knowledge regarding the strength, weakness,

opportunities and threats of bank.

Then we were also sending to various branches for understanding that how

work was done there. I, personally, enjoyed my work there, gathered lots of

information there. I learned how auditing is done; it is a review of financial

statements of a company resulting. In publication of independent opinion on

whether or not those financial statements are relevant accurate, complete and

fairly presented.

I learned cash management as it is like blood in human body, Its need to be

managed judiciously, handled carefully and economical. I learned about

40

generating reports, day book reports, and general ledger reports. I learned

about computerized branches like how to access the system, password

maintenance, day begin operations.

I learned about hose peeping where essential registers were maintained like

visit register voucher register, receipt register, dispatch register, attendance

register, securities register and locker register etc.

I learned regarding draft payables A/c, Suspense/sundry assets. I learned

how various accounts were maintained like current accounts, savings

accounts etc. I learned about various advances against, deposits, government

securities, Gold ornaments.

I got knowledge regarding cash credit limit, salaried employees, Advances

against life insurance policies, I learned regarded SGSY, I learned regarding

various frauds and how these were decided and removed.

We were also sent to various sections of the bank like law section, statistical

section, loan section, recovery section, branch control section, it section we

grab all information from there.

We also worked in BDD Department which is Business Development

Department, it is to develop and improve banking business to prepare loan

and deposit schemes to fix and revise rates on all products, clarification of

deposits, design various schemes and evaluating whether it is feasible or hot,

we learned about branch opening process and allotment of targets to various

branches these is also a women empowerment cell in the bank to organized

and motivating women.

Job training is the best method for teaching knowledge and skill which can be

acquired through personal observation in a relatively short period.

Economical method: this method is very economical because no additional

space, equipment, personnel or other facilities are required for training.

Teaching of knowledge and skill in short time period: It is appropriate for

teaching knowledge and skills which can be learned in short period of time.

41