ankita final report on rdc

7/30/2019 Ankita Final Report on Rdc

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. A

SUMMER PROJECT REPORT

ON

WORKING CAPITAL MANAGEMENT

USED BY

RAJKOT DISTRICT CO-OPERATIVE BANK

SUBMITTED FOR The part of two years full time

Master in business administration

SUBMITTED BY

Ankita B. Khakhkhar

Roll no. 34; semester 2Atmiya institute of technology & science college, Rajkot.

SUPERVISED BY

Ms. Binal kachhela

Atmiya institute of technology & science college, Rajkot.

Affiliated with Gujarat Technological University, Ahmedabad

July 2010

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AKNOWLEDGEMENT

To acknowledge is very great way to show your gratitude towards

The Persons who have contributed in your success in one or other way.

.

First of a ll I would like to thank Gujarat Technological University for introducing

this subject in our course which gives us practical knowledge about specified Industry.

I am thankful to general manager C.N.Tarapara to give me permission for the

summer training.

I want to express my sincere obligation to K.R. Vakariya, B.M.Sangani Sir R.V.

panara sir and all the staff members of RDCB, where I worked so long in a homely pleasant

atmosphere.

Especially, I would like to Thank Miss Binal kachela , my mentor who guided me in

my work & Dr. Sunil misra, the director of college for his guidance.

Thanking you.

Date: - Yours Faithfully,

Place: -RAJKOT ANKITA KHAKHKHAR

.

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PREFACE

Knowledge is the ocean that cannot be fathomed the deeper you go, the more

you see its unbounded profundity

Change in occurring at an accelerated rate. Today is not like yesterday and tomorrow

will not like be todays market is how to succeed in the dynamic environment that surrounds

the corporate world. MBA one of those professional courses which help students to keep pace

the changing trends in business and its surrounding environment.

The subject Practical Studies particularly helps students to know the actual

corporate world, the anxieties and stress associated with the job which cannot be understood

sitting in a classroom.

As students of MBA we are required to do a survey in any unit of national or

international repute, so as to gain practical knowledge about the prevailing market conditions,

for this purpose, I have chosen RAJKOT DISTRICT CO-OPERATIVE BANK as banking

business today is rapidly increasing and is one of the most competitive businesses. I was

fortunate to get an opportunity to work with such a professional unit.

DATE :

PLACE: RAJKOT ANKITA KHAKHKHAR

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TABLE OF CONTENT

1 Introduction

2 Industry overview

3 Company overview

4 SWOT Analysis

5 Research study on conceptualframe work of WorkingCapital.

6 Limitation

7 Future Plans

8 Conclusion

9 Bibliography

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The word BANK acts as the bridge between the people who needs money

and who have excess money with them. In the past, when barter system was in

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In the INDIA, the banking system was started many years ago.

This system was started in the second or third century A.D., Manu, the great

Hindu Jurist, devoted a section of his work to deposits and advances and laid down

rules relating to rates of interest to be paid or charged.

At that time the same activity was done at local level by any landlord person

of the village. Every town, big or small, had a Sheth also known as a Shah or

Shroff who performed a number of banking functions. He was respected by all

sections of people as an important citizen. They were instrumental in transferring

funds from place to place and doing collection business mainly through Hundis an

accepted mode of transfer of money for commercial transactions. By the passage of

time this system was developed very rapidly.

In time of east India Company use of banking sector was increased like

anything.

In the wake of the Swadeshi movement, a number of banks with Indian management

were established in the country.

The Punjab National Bank Ltd, was founded in 1895

The Bank of India Ltd, in 1906.

The Canara bank Ltd, in 1906.

The Indian Bank Ltd, in 1907.

The Bank of Baroda Ltd, in 1908, and

The Central Bank of India Ltd, in 1911. After increased use of banking

system, suggestions ware made that India should have central bank. And on the 6 th

March 1934 the Reserve Bank of India started functioning with effect from 1 st April

1935. Banking Regulation Act was passed in 1949.

The major participants of the Indian financial system are the commercial

banks, Financial Institutions, encompassing term lending institutions, investment

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TYPES OF BANK

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Central Bank and Monetary Authority

Reserve Bank of India

Introduction of co-operative bank

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Apex banking institution

NationalHousingBank

EXIMBank

NABARDIDBI Small IndustrialDevelopment Bank of India

Banking Institutions

PrivateSector

Public Sector

Co-operative BanksR.R.B.

(Regional Rural Bank)

Commercial Banks

Local AreaBanks

NewBanks

OldBanks

Nationalized BanksState Bank Group Indian Foreign

SubsidiaryBanks

SBI main


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Over the year the difference between co-operative banks & commercial banks has

blurred as they all have come under a common law. All products & services are offered by

co-operative banks are on the par with commercial banks, with a few exceptions related to

government business.

In 1904 the co-operative movement started in India with a view to provide finance to

the agriculturist at a low rate of interest. The co-operative society has to take the place of the

money lenders & provide cheap loan to the farmers for productive purposes. Even though

many types of co-operative societies have been started particularly for the artisans & others,

the most common form of such societies deal in rural credits. And today co-operative banks

have started verities of services with different technologies.

So, after having such easy government policy, today many co-operative banks have

started in India. And they are catering to the all section of the society, & also today co-

operative sector has grown in all over the world, with globalization of the world they have

also started to implement new technologies & various management tools. Now, they are in

same market with all the other banks. So, by this way the co-operative banks are in the key

position in the economy.

As a form of organization which procreations voluntary associate together on a basis

of equality for the promotion of their economic interests.

-COOPERATION PLANNING COMMITTEE 1946

PRINCIPLES & CHARACTERISTICS

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Careful analyses of the above definitions will reveal the following principles &

characteristics of co-operative organization.

VOLUNTARY ASSOCIATION ::-

Co-operative organization is purely a voluntary association if individual who join

together for betterment of their economic interest through collective efforts. A

member is at liberty to leave the organization at any time & withdrawal his capital by

giving due notice. But it should be remembered that a member is not allowed to

transfer his shares to another person as found in the company organization.

OPEN MEMBERSHIP ::-

Membership of co-operative organization is open to all irrespective of religion caste,

color, creed, political affiliations belief & status to which a person belongs. The

membership fees & the entrance fees are kept relatively low so as to enable the

economically weak to become the members.

EQUAL VOTING RIGHTS ::-

Equality is the quintessence of co-operative organization. Members have equal voice

in the management of its affairs with the underlying principle ONE FOR ONE

VOTE.

SERVICE MOTIVE ::-

It is mainly intended to goods first to its members & then to outsiders at profit the

primary aim of any co-operative organization is to render service to its member. So

these are the primary motive or principles. There are other principles, co-operative

organization has to follow those principles like state control, democratic organization

etc.

Types of co-operative banks

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Organizational

structure of

co-operative

banks

State

co-operative

bank

District

co-operative

banks

Primary

co-operative

banks

The following chart showing the organizational structure of co operative banks.

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STATE CO-OPERATIVE BANKS ::-

These banks are also known as apex bank & are registered under co-operative

societies act 1912. In fact these banks are established to function as a leading co-operative

financial institution of the state offer co-operative societies should grow. The Apex banks

as they are called are they to render financial help as & when the co-operative societies are

in need of their help.

CENTRAL CO-OPERATIVE BANKS ::-

A district level of central co-operative banks is functioning as a commercial bank &

that too as an independent unit. They are there in order to strengthen the co-operative

movement in the country. In fact these banks are the key link between people & apex bank &

render valuable services to downtrodden & rural folk in taking them out of the financial woodcentral co-operative banks get funds from (A) Share capital (B) Deposits (C) Financial help

from state co-operative banks (D) State bank of India & (E) Commercial banks. Their

working capital is usually provided by state government.

URBAN CO-OPERATIVE BANKS ::-

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REGISTRATION & LICENSING

There should be co-ordination between the state co-operative department & RBI for

the registration & licensing of urban banks. Urban banks should build up their share capital &

reserve to the revised minimum level with in period of 3 year which can be extendedly by the

RBI to a further period of 2 years whenever necessary.

For organization or urban co-operative bank in each state there should jointly survey

local areas & identify the potential growth centers where urban banks could be organized

once such centers are located prominent person of the locality might be contacted to seek their assistance for registration of the urban banks. New banks are to be organized in

backward areas or by weaker section of the community may not be able to collect the initial

minimum share capital required for obtaining license. Government assistant in the form of

share capital contribution for such new banks may be equal to that collected by members.

These banks derive their funds for working partly through share capital contributed by

the numbers & partly through deposits collected from members & non-members & renders

usual banking services. The shares are of higher value. But the liability of the member islimited to the extent to the shares hold by them.

PROBLEMS OF CO OPERATIVE BANK

Recovery problem

Technical problems

Problems regarding law

Communication gap

Poor customer services

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RDC Bank at Glance

INDEX

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INTRODUCTION

The co-operative bank of Rajkot ltd. popularly known as RDC bank is established on

1959 under the strong, effective leader ship of one of the national co-operative hero honor

Shri Vithalbhai Raddiya with the intention of survive the common man.

The local intensity of the bank in its customer centric approach, hassle free execution

of the decision & technologies are their main difference from commercial banks, also highPage 21 of 97

SR NO. PARTICULAR PG.NO.1 INTRODUCTION 212 MISSION 22

3 BANK PROFILE 274 AWARD & CERTIFICATE 295 HISTORY 306 LOGO 337 LIST OF BOD 368 ORGANIZATIONAL STRUCTURE 39


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level of commitment at all levels of management & self committed ground level staff makes

them different from other commercial banks.

At present RDC bank has achieved a key position in the market of saurashtra. It has

131+1 (H.O). in all over Saurashtra including main branch with the advanced technologies

and educated staff, as it is said that

In the emerging competitive business environment Co-operative

banks who adhere to strict financial discipline. Only will survive

CORPORATE MISSION

Survive to the common man.

Enhance the value of share holders.

Emerge as a symbol of public trust & confidence by creating a positive image.

Maintain excellence in operation & management by bringing in transparency &integrity.

Develop & motivate human resource there by cultivating professional culture in the

banking operation.

Ensure speedy & satisfactory customer services through continuous product

innovation & aggressive marketing strategies.

Profile of the Company

Name of the Company : Rajkot district Co-Operative Bank Ltd.

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Year of establishment : 1959

Address : Shree Rajkot district Co-Operative Bank Ltd

Jilla Bank Bhavan,

Kasturba Road

Rajkot -- 360001.

Phone No. : 0281-2231650-51-52-52.

Registered Office : Shree Rajkot district Co-Operative Bank Ltd.

Jilla Bank Bhavan,

Kasturba Road,

Rajkot - 360001.

Registration No . : 24940:1959

WebSite : WWW.rdcbank.in

E-mail Address : [email protected]

Form of organization : Co-Operative Ltd.

Working Days : Monday to Saturday.

Timing : 10:30 to 5:30.

Weekly Off : Sunday.

Branches : 131+1(H.O) Branches

Accounting Year : 1 st April to 31 st March.

Auditor : R.D.Shah

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http://www.rdcbank.in/mailto:[email protected]://www.rdcbank.in/mailto:[email protected]


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Technologically StrongFinancially SoundAll India Presence

Personalized ServicesValue Maximization

Employee SatisfactionSkill Maximization

MISSION

Be the Most Preferred Bank Leveraging Technology

Develop Lifelong Relationshipwith Customers

&Create Value for Employees and Stakeholders

VALUES

Together We Prosper"People are our most important asset.

At Cooperative you will find modern facilities combined with old-fashioned-courtesy. We like to think of our customers as friends. We feel that the warm smile

of a teller or the helpful suggestion of a customer service representative is what keepscustomers coming back.

LOGO

LIST OF BOARD OF DIRECTORS

Sr .No NAME POST

1 SHRI VITHHALBHAI RADADIYA CHAIRMAN

2 SHRI GHANSHYAMBHAI KHATERIYA VICE CHAIRMAN

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3 SHRI VAGHGIBHAI BODA MANAGEINGDIRECTOR(M.D.)

4 SHRI MAGANBHAI GHONIYA DIRECTOR

5 SHRI DR. DAYABHAI PATEL DIRECTOR

6 SHIR ARVINDBAHI TAGDIYA DIRECTOR

7 SHRI CHAGANBHAI SOGITRA DIRECTOR

8 SHRI GORDHANBHAI DHAMELIYA DIRECTOR

9 SHRI MAGANBHAI VADAVIYA DIRECTOR

10 SHRI DINESHBHAI BHUVA DIRECTOR

11 SHRI HERDEVSHINBHAI JADEJA DIRECTOR

12 SHRI LALITBHAI RADDIYA DIRECTOR

13 SHRI JERAMBHAI PATEL DIRECTOR

14 SHRI PRAVINBHAI RAIYANI DIRECTOR

15 SHRI MAHMADJAVIDBHAI PIRJADA DIRECTOR

16 SHRI HERGIBHAI AJANI DIRECTOR

17 SHRI DR. YGNESHBHAI JOSHI DIRECTOR

18 SHRI DR. BALUBHAI SARDVA DIRECTOR

19 SHRI NANUBHAI VAGHANI DIRECTOR

20 SHRI HARISHCHANDRASHIN JADEJA ASSISTANCEDIRECTOR

21 SHRI MANSHUKHBHAI BHUT ASSISTANCEDIRECTOR

22 SHRI HDSBHAI CHANDRVADIYA ASSISTANCEDIRECTOR

23 SHRI DIST. REGI. SAHKARI MANDALIRDCKOT

DIRECTOR

AWARDS AND CERTIFICATES

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Service of TheRDC Bank

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It was a time when a function of the banks limited to the collection saving from the

public & lending to the people who are in of money. But in modern age, now its not like

that, in modern time banks have become the important part of colony due to the only

expansion in the function. One reason for development in banking function is that the

developing of the market means todays competition & to maintain position in the market

banks they have to develop their services. The modern function or the services provided by

the banks are as follows.

To collect spare funds from peoples saving & pay them interest.

To make these funds available to the businessman & industrialist as loan & advance.

They charge interest from them.

They also help in assisting international trade by arranging exchange of currency to

another one.

Banks render services for the welfare & development of weaker section of the society,

they help in setting up small industries, cottage etc.

Banks help farmer to buy tractors & other agricultural equipments, middle class

people to buy home appliances like T. V. & provide finance for house.

In RDC Bank out of these services most of services are being served. Not only that

but also they are providing ATM facility, Cash card facility, Demand draft facility & many

other services.

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RDC Bank provides Services like

DEPOSITS:

Current Deposits

Saving Deposits

Term Deposits

Recurring Deposits

LOANS:

TERM LOANS:

Mortgage loans

Secured loans

Personal Loans

Vehicle Loans

Home Loans

Loan to small scale

OTHER SERVICES

Locker System

ATM facility

AGRICULTURAL LOANS

Medium term loan

Annual credit plan

Smart Kishan Credit Card

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2. SAVING DEPOSIT

Saving deposit account is an ideal account or those who have money to save but who

can not advantageously invest them any where else as their saving are not of much

significance to the capital market because their saving are too small. This amount is therefore

meant of smaller saver. The account is therefore encourages small saving and tries to forge a

saving habit in the general public. The attitude to save is important which this account tries to

create and thus mobilize such small savings for greater social good saving deposits account is

for that section of society and put to fruitful utilization.

Restriction on with drawl of amount.

Restriction on deposit of amount.

Payment of interest.

Other features of saving deposit:

Attractive Rate of interest (3.5%)

Easy procedure for account opening.

24 hours banking facility through their ATM centers.

Personalized services & special facility by the way of telephonic inquiry.

Regular bank statement is provided at home through post or E-mail.

Attractive computerized passbook.

No charges for saving account holder.

At present in RDC BANK the condition of saving deposit is as follows.

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No. of depositors total deposit amt. % of total deposit50,314 71,23,43,463.83 24.87%


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3. TERM DEPOSIT

This account attracts those customers who have money invest for a longer period but

do not want to take much of risk. Such person prefers to deposit with commercial banks for a

specified period at a specified rate of interest. The interest rate varies from one period to

another. A deposit of 15 days attracts a smaller rate of interest and deposits for 5 or more

years. The highest rate of interest. The period for which deposits are to be made depends

upon the depositor himself. However, once a decision is taken by the depositor any money

deposit usually he is not allowed to withdrawal the same before the interest earned till that

date or accepts a lower rate of interest than stipulated at the time of deposits.

At present in RDC BANK the condition of the term deposits is as under.

No. of depositors total deposit amt. % of total deposit77,750 182,84,67,000.00 63.84%

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4. RECURRING DEPOSIT

To encourage regular saving habits in the depositing public the bank in the country

provide an opportunity to them to save regularly. According to their capacity and need and

earn more than what saving deposit accounts offers to them. The following are the main

features of the recurring deposits.

The deposits are made every month of fixed amount say Rs. 5,10,15,25 and so on.

The account can be transfer from one bank to another in the country on request by

customer.This account can be opened by every one competent to enter in to contract including

the minor one.

The account attract higher rate of interest.

The customer is allowed to raise loan against his recurring deposit account to the

maximum limit of 75% of the deposit he has made till the date of raising the loan.

As far as concerned with recurring deposits at the RDC Bank , than these are the features are provided to the recurring deposit holders.

Easy and simple account opening procedure.

Speedy and timely services.

Account can be opened with any convenient amount.

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3. SECURED OVERDRAFT

Any kind of traders, businessmen, personally, professional & industrialist can get

secured over draft.

Bank grants secured overdraft for the purpose of fulfillment or short term working

capital need in the business.

Bank grants this type of over draft Rs. 1 lacs to maximum 100 lacs. Bank charged

interest on this over draft is 10.75% to 14%.

As a security a person has to mortgage any fixed assets whose reliable market value is

enough in proportion of over draft.

4. PERSONAL LOAN

Any localize person can get this loan.

Bank grants personal loan for the purpose of purchase fridge, T. V., washing machine

or any other thing which can be useful for home management.

Bank grants this type of loan Rs. 10,000 to maximum 50,000 or 70% to 90% of the

quotation price of the product.

Bank charges rate of interest on this loan is 11%.

Applicants need to make such documents of purchase products of purchased product

in favor of the bank as a security.

A person has to give reference of two people who are depositor in the RDC Bank as

guarantors.

Loan repayment period is 3 years to 5 years.

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7. Loan to Small Scale Industries:

A person who has his own business and wants to start his own business as a small

scale sector can get this kind of the loan for the purpose of fulfillment of the short term

working capital needs or to purchase new machineries or so on. A businessman can get loan 1

lacs up to 25 lacs and a person has to repay the loan in installment which should have already

been decided. In case credit can withdraw money if there is no money in his account. Bank

grants this loan against the raw material stock, and any mortgage properties. The insurance of the stock and mortgaged properties is taken by the bank as a security. Rate of interest on this

loan 11 to 15%.

OTHER FACILITY

1. Safe Deposit Vault (locker facility)

At RDC bank there is a proper locker department at ground floor here locker facility

has been providing to the customer. Customer can keep all the ornaments, important

documents and many other papers and many things. For every bank this facility is become just like primary function and for providing best customer service RDC bank is managing this

service too.

Any shareholder or depositor can easily get their personal locker of bank. There are

mainly three types of lockers at RDC bank Small size locker, Medium size locker, and large

size locker. And for to maintain best services RDC bank has different department and enough

staff for locker department. Different charges and deposits for different locker are as under.

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Types of locker Yearly rent Deposit

Small 200 5000

Large 300 15000

Medium 250 10000

2. ATM FACILITY

ATM has given a new dimension to banking by giving rise to self service banking.

Customer have long been constrained by conventional banking services which have been

characterized generally by fixed location and fixed timing on the other hand. Customers not

desiring to keep much money on them expect their money to be available to them. Whenever and wherever they need money, 24 hours banking services is available for any time. ATM

can be used for withdrawal of cash. For RDC bank it is a matter of great proud that it is

pioneer in introducing ATM in the entire Saurashtra region in Co-Operative banking sector.

At present RDC bank has four ATM. By this ATMs any customer can easily withdrawal

maximum 10000 per day.

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AGRIULTURAL LOANS

1. Loans

Under guide of government of India for the purpose of agriculture development the

bank has decide to dabble there loans within three years for this purpose under (KCC) Kishan

credit card the bank have pass loan of Rs. 647.14 Crores and NABAD have support of Rs.

160 Crores.

2. Medium term Agriculture Loan.

As per the requirement of farmer which needs like, irrigation, S,R,T.O Cattle land

purchase the bank have pass Rs. 32.70 crores and other tractor 7 trailer Loan of Rs. 44 crores.

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3. Annual credit plan

As per the guiding of reserve bank of India. The target for loan in district of Rs.

1910.19 Cr. Just RDC bank target was Rs. 1005.41 Cr. This was almost higher than half.

4. Smart Kishan Credit Card (KCC)

Within the co-operative bank in our country Rajkot District Co-Operative bank is

first who have started this facility. In this KCC the farmer can get emergency loan up to

10.000.

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INTRODUCTION

Human resources in any organization, be it public private of Co-Operative constitute

perhaps the most vital assets of that organization. An organization will fail if its human

resources are not competent to execute the work assigned to them. There is no getting away

from fact that human resources represent a subsystem which dominates all other sub system

to the organization.

Moreover, people are the only assets of an organization that appreciate over a period

of time while all the other assets depreciate. The more an organization is investing in human

resources, the greater the return from the investment is likely to be and it has been rightly

pointed to in one of the books of inter national Co-Operative alliance The gains accruing out

of structural reforms can be best capitalized only it the personnel maintained by the Co-

Operative institution are in a position to execute the policies effectively. This implies the

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Objective of selection process:

Determine whether the applicant meets the qualification for a specific job

To choose the applicant who is most likely to perform well in that job.

The selection procedure of RDC bank is quit simple. The stages of including in the

selection process are as follows.

News paper advertisement

Receipt of application

Screening

Arrangement and interview

Selection

Placement and confirmation

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3. ORIENTATION

Through this process new employee can be aware of the atmosphere of the firm and

also can be familiar with the other employee.. In any organization this process performs very

vital role because this is the only process which can create better environment in the

organization and a new comer can be aware about his working condition, his area of

responsibility and everything about organization. Proper orientation process can be beneficial

to both, a new comer as well as organization.

4. PLACEMENT

Once an employee has been selected he should be placed on a suitable job. Putting the

right man at the right job is as important as hiring the right person. Placement is a process of

assigning a specific job to each one of the selected candidates. It involves assigning a specific

rank of and responsibilities of an individual. It implies matching requirement of a job with the

qualification of a candidate.

In other words, placement is the determination of the job which an accepted

candidate is to be assigned and his assignment to the job. As RDC bank is very careful about

this process. And one thing is that, at the time of requirement only they hire new employees.

So hire it is specified that for which job they are recruiting. After the final selection, they

have been marking the job of the new employee.

5. EMPLOYEE REMUNERATION

Remuneration is the compensation an employee receives in return for his or her

contribution to the organization. Remuneration occupies an important place in the life of an

employee. Standard of living of employee, states in the society, motivation, loyalty and

productivity depends upon the remuneration. For the employee remuneration is significant

because of its contribution to the cost of production. For human resource management,

remuneration is the major function. The HR specialist has a difficult task of fixing wages and

wage differentials acceptable to employee and their leaders. There are mainly 3 three

components of employee remuneration. These are as follows..

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Promotion::

Promotion refers to advancement of an employee to a higher post carrying grater

responsibilities higher status and better salary. It is the upward movement of an employee inthe organizations hierarchy to another job commanding grated authority higher status and

better working condition the in case of the RDC bank as it is Co-Operative sector they have

to follow promotion policy of government is merit cum seniority in case of promotion they

are not independent too.

Transfer::-

A transfer refers to a horizontal or literal movement of an employee from on a job to

another in the same or organization with out any significant change in status any pay. It has

defined as A literal shift causing movement of individual from one position to another.

Usually without involving any marked change in duties as responsibility will needed of

compensation.

OBJECTIVES.

To satisfy employee needs

To better utilize employees

To make the employee more versatile

To adjust the work force

To punish employee

So, the transfer is also important as far as concerned with RDC bank there is no

specific transfer policy but according to requirement and for convenience of the employee

they use to make transfer.

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INTRODUCTION

Today, marketing is spread in every field of like hospitals, services, goods even

politics and many more. In banking sector too the importance of marketing also can not

measurable, still it has not developed in public sector it is only limited to foreign banks and

private sector. The reason for success of foreign in India is only best marketing efforts. Today

in banking sector there is a cutthroat competition among public sector, private sector and

foreign bank.

Marketing is a human activity directs at satisfying the needs and wants of customers,

there are five stages of bank marketing firstly marketing g is advertising, sales promotion and

publicity, When all banks advertise and innovate, they look alike so, they should try to

position themselves differently, even through symbols, logos or aggressive advertising so that

the customer can distinguee between one bank and another and finally marketing is

analyzing, planning and control.

At RDC bank though there is no specific marketing department. for marketing of

different services but providing vest services to their customers and getting good customer

satisfaction, and doing such efforts of marketing like promotion activities they are in directly

getting benefits of the marketing. Today they are also planning for such continuous marketing

efforts. And with in the few years they will have aggressive marketing department.

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INTRODUCTION

Finance is the fuel of administration. Without adequate financing any business

enterprise can raise its potentials for growth and success. And it would be worthwhile

to recall what Henry Ford once remarked Money is an arm or leg. You either use it

or lose it. This statement though apparently simple and quite meaningful, it brings

home the significance of money or finance. In the modern money oriented economy

finance is one of the basic foundations of all kind of economic activities.

Finance management is indeed the key to successful business operations.

Without proper administration and effective utilization of finance, no business

enterprise can utilize its potentials for growth and expansion. Organization and

control of these function is important for all types of business units. Especially in

public undertaking massive investment has so far been much less productive, it is

necessary to organize the finance function such a manner that should help the

business in achieving its basic objective with minimum cost.

According to Hoagland Financial management is concerned mainly with such

matter as how of business corporation raises its finance and how it makes use of that

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FINANCIAL INFORMATION

The liberalization of the financial sector is the key for the over all liberalization

process. Gradually, the structure of the financial market itself has begun to change, in the

changing Financial Market; The Co-Operative Bank Of Rajkot Ltd. has market the

progressive growth and profitability both the financial year 2004-2005 which is reflected in

the following Financing since inception:

(RS. IN LACS)

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Particulars 31-3-2010 31-03-2009

Members 890 872

Share Capital Rs. 3071.45 Rs. 2744.77

Deposit Rs. 145598.68 Rs. 124366.12

Advances Rs. 91518.05 Rs. 90128.74

Net Profit Rs. 1350.00 Rs. 1350.00

Working Capital Rs. 150539.103 Rs. 127173.5721


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Profit

10.657.75

21

13.5 13.5

0

5

10

15

20

25

2005-06 2006-07 2007-08 2008-09 2009-10 Year

A m t

Own fund

119 130109

133141

0

20

40

60

80

100

120140

160

2005-06 2006-07 2007-08 2008-09 2009-10

Year

A m t


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Deposit

678798

982

1244

1466

0200

400

600

800

1000

1200

1400

1600

2005-06 2006-07 2007-08 2008-09 2009-10

Year

A m t

Investment

297

471

676

797 820

0100200300400500600700800900

2005-06 2006-07 2007-08 2008-09 2009-10

Year

A m t


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Working capital

939

12571488

1780 1832

0

500

1000

1500

2000

2005-06 2006-07 2007-08 2008-09 2009-10

Year

A m t


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STRENGTHS

Net NPA Zero since inception.

Professional management & Co-Operate team spirit.

Strong Brand equity.

Fully computerization and Automation.

Respectable ranking and position in Gujarats top Co-Operative banks.

Profitability and sound liquidity.

Branches in all most developed parts of saurashtra.

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WEAKNESS

Lack of marketing expertise.

Lack of modern management concepts.

Sometimes communication gap is found which signs lack of professionalism.

Lack of scheduled status which may affect expansion of their business.

Lower volume of advances due to higher rate or interest.

Strong need for a more disciplines, smooth and sophisticated.

Environment for working and customer service.

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NEED FOR WORKING CAPITAL

Suppliers or the market normally dictates the duration of the trade payables period in

general. Therefore it may not match the current asset turnover period. In addition the

conversion of current assets into cash may be deferred or Bad Debts may occur.

Technically, this is referred to as the operating or cash cycle . The operating cycle can

be said to be at the heart of the need for working capital. The continuing flow from cash to

suppliers, to inventory, to accounts receivable and back into cash is what is called the

operating cycle. In other words, the term cash cycle refers to the length of time necessary to

complete the following cycle of events:

1. Conversion of cash into inventory;

2. Conversion of inventory into receivable;

3. Conversion of receivables into cash.

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New equity or loans from shareholders

Bank overdrafts or lines of credit

Long-term loans

If you have insufficient working capital and try to increase sales, you can easily over-stretch

the financial resources of the business. This is called overtrading. Early warning signs

include:

Pressure on existing cash

Bank overdraft exceeds authorized limit

Seeking greater overdrafts or lines of credit

Part-paying suppliers or other creditors

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INTRODUCTION

Research means to collect the data & Analysis it with the

help of a graph, Tabulation etc. & gives some finding which is

useful to the Researcher & other needy people in their research

project

Here, I have collect secondary data of last working capital. I have collected last 3

annual reports & financial statement (B/S, P & L A/C) of the sampled unit is required to

calculate the Ratio of the sampled unit. I have also analysis working capital of the sample

unit.

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2. To know the stability and profitability of bank.

3. To know the liquidity position of the bank.

COLLECTION OF DATA

There are only two way to collect the data.

Primary Data

Primary data are those which are collected for the first time and happen to be original

Secondary Data

Secondary Data are those which have already been collected by someone else and published

somewhere

METHOD OF PRIMARY DATA

1. Questionnaire method

2. Observation Method

3. Interview Method

SECONDARY DATA

Before using secondary data researcher must take care of the following points:

1. Reliability of data

2. Suitability of data

3. Adequacy of data

SOURCES OF SECONDARY DATA

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1. Internal Sources

Employee

Internal experts

Suppliers

Intermediaries

2. External Sources

Government publication

Commercial

Industry specific sources

METHODOLOGY OF THE RESEARCH STUDY

Mainly it contains two types:

1. Accounting tools

2. Statistical tools

Accounting tools include the following concepts.

1. Cash flow statement

2. Fund flow statement

3. Comparative Statement Analysis

4. Trend-percentage Analysis

5. Ratio Analysis

Statistical tools include the following concepts .

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Research data: 3 years (2007-08, 08-09, 09-10) annual report of the bank.

Sampling method: simple random sampling

Methodology of research study : statistical method

Concept of statistical method: chi square test

Hypothesis of research:

Null hypothesis H0 : There is no significant difference between cash & expensesOf RDCB to Working capital.

Alternate hypothesis : Ha : There is a significant difference between cash & expenses

Of RDCB to Working capital.

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INTRODUCTION

As we know that working capital is the difference between the current Assets and

current Liabilities. In RDC Bank current Assets is high compare to the current liabilities.

Current assets are increase day by day. So this situation is good for the bank. For this

situation we assume that bank is get highly situation in the market.

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APPLICATION OF CHI SQUARE TEST

The chi-square test is an important test amongst the several tests of significance

developed by statisticians. Chi-square, symbolically written as 2 (Pronounced as Chi-

square), is a statistical measure used in the context of sampling analysis for comparing a

variance to a theoretical variance. It can also be used to make comparisons between

theoretical populations and actual data when categories are used. Thus, chi-square test is

applicable in large number of problems. The test is, in fact, a technique through the use of which it is possible of all researchers to:

test the goodness of fit;

test the significance of association between two attributes, and

Test the homogeneity or the significance of population variance.

The formula for the chi-square is: -

2= s *(n-1)

P

WORKING CAPITAL

PERTICULARS 2007-08 2008-09 2009-10

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Computation of test statistics:

Year X

2007-08 3.65%2008-09 2.38%2009-10 2.36%

Year X (X-X) (X-X)2X = 2.80

2007-08 3.65% 0.85 0.72252008-09 2.38% -0.42 0.17642009-10 2.36% -0.44 0.1936TOTAL 8.39% 0.00 1.0925

2= s *(n-1)

P

s = (Xi-X)(n-1)

= 1.0925(3-1)

= 0.5463

p= ESTIMATED VALUE = 2.8 = 3

2= s *(n-1 )

P

= 0.5463 (3-1)

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3

= 0.3642

Degree of Freedom: = ( n-1)= (3-1)= 2

Level of Significance: 5 %

Critical Value: At level of 5 % significance critical value is 5.991

Conclusion:

Critical Value > Calculated Value.

Here the calculated value of chi-square is 0.3642 and the critical value at 5% level of

significance is 5.991 . Hence taken sample accepted region null hypothesis is

accepted.

2. BALANCE IN OTHER BANK WITH RDC BANK TO WORKING CAPITAL

H0: There is no significant difference between balances in other bank with RDCB to

Working Capital.

H1 : There is significant difference between balances in other bank withRDCB to working capital.


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=9.97 (3-1)

52

= 0 .38

Degree of Freedom : = (n-1)= (3-1)= 2

Level of Significance : = 5 %


Conclusion:


Here, the calculated value of chi-square is 0.38 and the critical value at 5% level of

significance is 5.991 . Hence taken sample accepted region. So, null hypothesis is

accepted .

3. INTREST RECEIVABLE WITH RDC BANK TO WORKING CAPITAL

H0 : There is no significant difference between interest receivable with RDCB to

Working Capital.

H1 : There is significant difference between interest receivable with RDCB to Working

Capital.


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P

= 0.233 (3-1)

2

= 0.233

Degree of Freedom: = (n-1)= (3-1)= 2

Level of Significance : = 5 %


Conclusion:



significance is 5.991. Hence taken sample accepted region null hypothesis is

accepted.

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4. BORROWING WITH RDC BANK TO WORKING CAPITAL

H0 : There is no significant difference between borrowings with RDCB to

Working capital.

H1 : There is significant difference between borrowing with RDCB to

Working capital.


Year X2007-08 34.59%2008-09 26.34%2009-10 11.45%

Year X (X-X) (X-X)2x =24.13

2007-08 34.59% 10.46 109.412008-09 26.34% 2.21 4.882009-10 11.45% -12.68 160.78TOTAL 72.38% 0.00 275.07

2= s *(n-1)

P

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s = (Xi-X)(n-1)

= 275.07(3-1)

= 137.54


2= s *(n-1)

P

= 137.54 (3-1)

24

= 11.46

Degree of Freedom : = (n-1)= (3-1)= 2

Level of Significance : 5 %


Conclusion:

Critical Value < Calculated Value.


significance is 5.991. Hence, taken sample fall in accepted region so hypothesis is

rejected.

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.

5. INTREST PAID ON LOAN WITH RDC BANK TO WORKING CAPITAL.

H0 : There is no significant difference between interests paid on loan with

RDCB to working capital.

H1 : There is significant difference between interest with RDCB to

Working capital.


Year X2007-08 0.23%2008-09 2.24%2009-10 0.20%

Year X (X-X) (X-X)2X =0.14

2007-08 0.20% 0.06 0.00362008-09 0.17% 0.03 0.00092009-10 0.06% -0.08 0.0064TOTAL 0.43% 0.00 0.0109

2= s *(n-1)

P

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6. OTHER LIABILITY WITH RDC BANK TO WORKING CAPITAL.

H0 : There is no significant difference between other liabilities with

RDCB to working capital.

H1 : There is significant difference between other liabilities with RDCB to

Working capital.


Year X2007-08 1.63%2008-09 2.93%

2009-10 2.04%

Year X (X-X) (X-X)2X = 2.20

2007-08 1.63% -0.57 0.3252008-09 2.93% 0.73 0.5332009-10 2.04% -0.16 0.026

TOTAL 6.60% 0.00 0.884

2= s *(n-1)

P

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s = (Xi-X)(n-1)

= 0.884(3-1)

= 0.442


2 = s *(n-1)

p

= 0.442 (3-1)

2

= 0.442

Degree of Freedom: = (n-1)= (3-1)= 2

Level of Significance: = 5 %


Conclusion:



significance is 5.991 . Hence taken sample accepted region null hypothesis is

accepted.

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LIMITATION OF STUDY

Some of the limitation of the work of research of working capital is as under.

Accuracy of the data

Whatever the data provided by the sampled unit it may be wrong. So, the ratio of the sampled

unit may be not accurate or perfect.

Time limitations

Whatever the research has been done by researcher in a particular time and researcher may

require extra time to researcher the working capital analysis of the sample unit.

Skill of the researcher

Research work is totally depends upon the researcher. If researcher is less skillful & whatever

the ratio found out by researcher, it may be wrong.

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FUTURE PLANS

To maintain excellence in operation & management by bringing I transparency &

integrity.

To emerge as symbol of public trust & confidence by creating a positive image.

To ensure speedy & satisfactory customer services through continuous product

innovation & aggressive, marketing strategies.

To adopt policy for technological up gradation& advancement to boost up total

computerization & inter branch connectivity for all the branches.

To develop & motivate human resources there by cultivating processional culture in

the banking operations.

To strive for continuous growth & profitability through branch expansion &

modernization.

To introduce more ATM centers & various plastic products for better customer

services.

To maintain the asset quality at the optimum level by continuous efforts for credit risk management.

.

To explore more non-fund based business like latter of credit, bank guarantee,

custodial services to increase banks non interest income.

To achieve business turnover of Rs.650 cores & net worth of 80 cores by 2010.

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To continue to maintain the NET NPA at ZERO level.

To plan Banks balance sheet with judicious ALM.

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Each and every beginning has as end in the same ways; each and every introduction

has a conclusion. I am thankful and express my gratitude to all those who has directly or

indirectly co-operated me in preparation of my project report and suggested some new ideas.

Thus, the research work on working capital analysis of RDCB , gives me an exact

idea about the financial stability and working capital management of a bank.

So its an opportunity to do a research work and to gain some practical knowledge

from this course through the research study.

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Books Referred

Financial Management by I.M.PandeyFinancial Management by Khan & Jain

Research Methodology by C. R. Kothari

Annual report of last Three years of RDC Bank

Websites

www.rndcbank.in

[email protected]
http://www.rndcbank.in/mailto:[email protected]://www.rndcbank.in/mailto:[email protected]

ankita final report on rdc

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