Cooperative Bank Internship Project

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Bangalore Institute of Management Studies Page 1

INTRODUCTION

1.1 ABOUT BANKING INDUSTRY

The word bank originated the French word ‗benque‘ or Italian ‗banco‘ which means an office for monitory transaction over the counter. In those days or desks were used as centers for monitory transactions. During the barter system also, there existed traces of banking, i.e. people used to deposit cattle and agricultural products in specified places get loans get loans of some other form in exchange for these. There is solid evidence found in records excavated form Mesopotamia, showing some bank existed around a standard for valuation.

ORIGIN OF BANKING INDUSTRY

Greece was the first country to introduce a satisfactory system of coinage. After the invention of Coins started, a meaningful system of banking came into existence taking into account all the avenue of banking a credit system.

Rome was the first country to start a bank at the department of state level in the 4th century B.C. with transactions such as depositing and investments in other forms. In India ancient records show that banking was popular and money lending was a common practice among the common people. In the olden days‘ Goldsmith, merchants and money lenders conducted the business. They had transactions among themselves by which funds were transferred from one business firm to another. They had no general or uniform principles of banking, lending, rate of interest, etc. Co-operative sector has a long history of more than a century. In the co-operative movement, agriculture credit sector has acquired a special importance in order to avoid the exploitation o poor farmers from the middlemen and money lenders and to provide suitable assistance to the eligible farmers. As our nation is basically an agriculture country, agriculture credit systems plays an important role in the development of this sector. Through this system, the credit sector is extending helping hand to farmers in its own way to boost the agricultural production in the state in particular and in the country at large.

KSC Apex bank over the ninety five years, since its inception has always come forward to extend its assuring hand to the farmers of the state through district central co-operative banks, primary agricultural co-operative credit system besides the bank is providing the needed financial assistance, for development of human resources, training, computerization and all other encouragement from time to time to the DCC banks and PACS. The Government of Karnataka has accepted Prof. Vaidyanathan‘s committee recommendations for revival of cooperative credit institutions and apex bank is committed to its successful implementation in the state.

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CO-OPERATIVE BANKS:

The co-operative banks in India started functioning almost 100 years ago. The Co-operative bank is an important constituent of the Indian Financial System, judging by the role assigned to co-operative bank operate. Though the co-co-operative movement originated in the west, but the importance of such banks have assumed in India rarely paralleled anywhere else in the world. The co-operative bank I the urban areas also have increased phenomenally in recent years due to the sharp increase in the number of primary co-operative.

While the co-operative banks in rural areas mainly finance agricultural based activities including farming, cattle, milk, hatchery, personal finance etc. along with some small scale industries and self-employment driven activities, the co-operative banks in urban areas mainly finance various categories of people for self-employment industries, small scale units, home finance, consumer finance, personal finance, etc.

Co-operative Banks in India are regulated under the Co-operative Societies Act. The co-operative bank is also regulated by RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

1.2 Objectives of the Study

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To get acquainted with the real environment of the organization.

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To know and analyze the strength and weakness of the organization and the forthcoming opportunities and threats for it.

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To develop necessary interpersonal and managerial skills.

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To get a practical exposure of the organization.

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To suggest to the company on the areas of important.

1.3 Profile of the Study Area (Place)

Karnataka State Co-operative Apex Bank is governmentally held banking service Organization headquartered in Bangalore, training centre located in Bangalore, India. The company was founded 1915 by ―Sri. Varadaraja Iyenger‖.

1.4 Methodology Employed

Data Collected

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 Primary Source

Information from the executives of various departments of Karnataka State Co-operative Bank.

 Secondary Source

Information from the text books, journals, web sources and annual report of Karnataka State Co-operative Apex Bank.

1.5 Scope of the Study

This project is to study the development of organization and its structure in order to achieve the prime objective of the organization. Also the project intents to make a detail study of the different departments and workings and finding the problem areas to give a proposal of solution.

 The scope of the study is restricted to only for Karnataka State Co-operative Apex Bank.

 The findings and suggestions are restricted to Karnataka State Co-operative Bank.

1.6 Limitation of the Study

This in-plant report has the following limitation.

 Various departments and their function are explained briefly.

 Primary data is collected as per knowledge and information given by the executives of the company.

 Apex bank has produced more than 500 products and various services are explained.  In this report done in a Karnataka State Co-operative Apex Bank

 Some financial information is kept confidential by finance department of Apex Bank.

1.7 Chapter Scheme

Chapter:1 This chapter deals with Introduction, Objectives, Profile of the study area,

Methodology, Scope of the study, Limitation of the study and chapter scheme.

Chapter:2 This chapter deals with the profile of the study area (industry) here it appears the

meaning and definition of the Banking industry, leading players, future prospects of the industry, role of co-operative bank in India and problems of this industries.

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Chapter:3 This chapter deals with the company profile that is vision, mission, structure, growth

and development and present condition of the company.

Chapter:4 This chapter deals covers the various functional departments that is Planning and

development, Human Resources, Central Financing, Inspection and Audit.

Chapter:5 This chapter deals covers the organization Strength, Weakness, Opportunity and

Threats (SWOT analysis).

Chapter:6 This is the final chapter it covers the summary of Finding, Suggestion and

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INDUSTRY PROFILE

INTRODUCTION

Co-operative moment as an economic system and as best instrument to eradicate the poverty of the people and to protect them for the economic exploitation from the ‗haves‘ was introduced for the first time in the world with the organization of consumers‘ Co-operative society in 1844 at London. Later on the Co-operative movement was introduced in Germany with an organization of Agricultural Credit Co-operative Societies (Urban Co-operative Banks) in towns and cities. Hence, if the England is the motherland for the whole Co-operative movement, the Germany is the cradle for the Co-operative credit and Banks organizations.

The co-operative movement in India was introduced with the organization on of primary Agricultural Co-operative Credit Societies (PACS) in villages and Urban Co-operative banks in town and cities offer passing the Co-operative Credit societies act 1904 with an objective to emancipate the poor people in the rural and urban areas from the clutches of money lenders and middlemen in the market and also to accelerate the pace of agriculture and industrial developments in these areas. With the passing of second Act, viz, Co-operative Societies Act, 1912: the Co-operative movement in India entered into all sphere of economic activities besides organizing DCC banks and State Co-operative Apex Banks. Profiteering (at more prices) and usury (more interest) are the greatest evilsconst antly grinding the poor people down and hang them till their death. To do way profiteering, consumers marketing, processing industrial and other Co-operatives were organized and to minimize the usury the Co-operative credit and banking organizations were organized to protect the poor people from the exploitation by middle men in the market and to eschew them from the clutches of unbridled money lenders.

2.1 MEANING OF CO-OPERATIVE

A co-operative bank is financial entity which belongs to its members, who are at the same time the owners and the customers of their bank. Co-operative banks are often created by persons belonging to the same local or professional community or sharing common interest.

DIFINITION OF CO-OPERATIVE BANKS

In the words of Henry Wolff ―Co-operative banking is an agency which is in a position to deal with the small means on his own terms‖. Devine defines ―a mutual society formed composed and governed by working people themselves for encouraging regular saving and generating miniature loans on easy terms of interest and repayments.

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FEATURES OF CO-OPERATIVE BANKS

Some distinguishing features of the nature of co-operative banks are:

 They are organized and managed on the principles of co-operation, self-help and mutual help.  Some of the well-developed co-operative banks are scheduled banks.

 Co-operative banks are financial institution.

 Co-operative banks belong to the money market and capital market.

 Co-operative banks are also required to comply with requirements of SLR and CRR and liquidity requirements as other scheduled and non-scheduled banks.

 Co-operative banks are perhaps the first government supported agency in India.

 Co-operative banks accept all types of deposits including current, saving and fixed or time deposits from an individual both members and non-members.

HISTORY OF CO-OPERATIVE BANKS

The bank was formed in 1872 as the loan and deposit department of Manchester‘s co-operative Wholesale society, becoming the CWS bank four year later. However, the bank did not become a registered company until 1971. In 1975, the bank became the first new member of the committee of London Clearing Banks for 40years, and thus able to issue its own cheques. Since 1974 the co-operative banks has consistently offered free banking for personal customers who remain in credit. It was also first clearing bank to offer an interest bearing cheque account called cheque and save, in 1982. In 1991 the bank shook the credit

Card market when it introduced a guaranteed ―free for life‖ gold visa card.

ESTABLISHMENT OF CO-OPERATIVE BANKS IN INDIA

Co-operative Banks in India were started during 1904 when official efforts were initiated to create a new type of institution based on the principles of co-operative organization and management which were considered to be suitable for solving the problems peculiar to Indian conditions. Co-operative banks were conceived and were expected to substitute such agencies to provide adequate short term and long term institutional credit at reasonable rates of interest, and to bring about integration of the unorganized and organized segments of India‘s money market.

Farmers in India are scattered all over the country and need short term small borrowings for agricultural purposed. This need is not fulfilled by commercial banks, which are unsuited for financing agriculture. Land, which these farmers can offer to cover bank advances, is not generally accepted as security by commercial banks. Therefore, special types of banks are best suited for this purpose. The object of co-operative banks is to offer banking facilities to persons of limited means requiring credit for productive purposes in the use of the land and labor at their

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Bangalore Institute of Management Studies Page 7 disposal. In 1914 the government of India appointed a committee under Sir Edward Mac lagan to survey the progress of co-operation in the country. The committee submitted its report in 1915, in which it made several recommendations, principal one being the institution of provincial co-operative pyramid. The present organization in India is based upon the findings of this report. In 1919, the Montague Chelmsford act made co-operation a provincial subject. Since then, all the state governments have passed their own separate co-operative societies acts.

2.2 MAIN FUNCTIONS OF CO-OPERATIVE BANKS

 Co-operative banks are organized and managed on the principal of co-operation, self-help and mutual help. They function with the rule of ―no profit, no loss‖ basis. Co-operative banks, as a principle, do not pursue the goal of profit maximization. Co-operative bank performs all the main banking functions of deposit mobilization, supply of credit and provision of remittance facilities. Co-operative banks provide limited banking products and are functionally specialists in agriculture related products. However, co-operative banks now provide housing loans also. UCB‘s provide working capital loans and term loan as well.

 Co-operative banks do banking business mainly in the agriculture and rural sector. However, UCBs, SCBs and CCBs operate in semi urban, urban and metropolitan areas also. The urban and non-agricultural business of these banks has grown over the years. The co-operative banks demonstrate a shift from rural to urban, while the commercial banks, from urban to rural. Co-operative banks belong to the money markers as well as to capital market. Primary agricultural credit societies provide short term and medium term loans.

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Co-operative banks in India finance rural areas under:

i. Farming ii. Cattle iii. Milk iv. Hatchery

v. Personal finance

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Co-operative banks in India finance urban areas under:

i. Self-employment ii. Industries

iii. Small scale units iv. Home finance

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v. Consumer finance

vi. Personal finance

2.3 Leading Players:

State Bank of India (SBI) HDFC Bank

ICICI Bank Punjab National bank (PNB)

UTI Bank (AXIS Bank) Hong Kong & Shanghai Banking

Corp (HSBC)

Kotak Mahindra Bank Sundaram Bank

2.4 Future prospects of the industry:

The Indian banking system, with its extensive branch network spread across the length and breadth of the country, has both depth and reach today. It is the spine of our entire financial system and the institutional framework within which financial markets operate. An economy that is growing at a steady clip of 9% needs a vibrant and dynamic banking system to keep pace with it.

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Bangalore Institute of Management Studies Page 9 TYPES OF CO-OPERATIVE BANKS

CO-OPERATIVE BANKS RURAL CO-OPERATIVE BANKS URBAN CO-OPERATIVE BANKS SHORT-TERM RURAL CO-OPERATIVES STATE CO-OPERATIVE BANKS

LONG-TERM RURAL CO-OPERATIVES PRIMARY AGRICULTURE CREDIT SOCIETY CENTRAL CO-OPERATIVE BANKS STATE CO-OPERATIVE AGRUCULTURE & RURAL

DEVELOPMENT BANKS

PRIMARY CO-OPERATIVE AGRICULTURE & RURAL

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Bangalore Institute of Management Studies Page 10 The co-operative banking structure in India may be divided into three component parts, they are

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Primary credit societies at the base

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Central co-operative banks at the middle

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Provincial or state co-operative banks (also called apex banks)at the top

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Primary co-operative credit society

Primary co-operative credit society is an association of borrowers and non-borrowers and deposits of members and loans from central co-operative banks. The borrowing power of the members as well as of the society is fixed. The loans are given to members for the purchase of cattle, fodder, fertilizers pesticides, implements etc.

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Central co-operative societies

Central co- operative societies are federation of primary credit societies as well as individuals. The funds of the bank consist of share capital, deposits, loans and overdrafts from state co-operative banks and joint stocks. These banks finance member societies within the limits of the borrowing capacity of societies. They also conduct all the business of a joint-stock bank.

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State co-operative bank

State co-operative bank is a federation of central co-operative banks and acts as a watchdog of the co-operative banking structure in the state. Its funds are obtained from share capital, deposits, loans and overdrafts from the reserve bank of India. The state co-operative banks lend money of central co-operative banks and primary societies and not directly to farmers.

SOURCES OF FUNDS FOR CO-OPERATIVE BANKS ARE:

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Central and state government

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RBI and NABARD

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Other co-operative institutions

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Owned funds

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Debentures issued

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Deposit from public

CLASSIFICATION OF CO-OPERTIVE BANKS

Some co-operative banks are scheduled banks, while others are non-scheduled banks. For instance, SCBs and some UCBs are scheduled bank but other co-operative banks are non-scheduled banks. At present, 28 SCBs and 11 UCBs with demand and time liabilities over Rs.50crore each included in the second schedule of the RBI act.

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Bangalore Institute of Management Studies Page 11 Co-operative banks are subject to CCR and liquidity requirements as other scheduled banks are however, their requirements are less than commercial banks.

TABLE – 1:

SL. No. Category bank Minimum SLR holding in govt.

and other approved securities as percentage of Net Demand and Time Liabilities (NDTL)

1. Scheduled banks 25%

2. Non-Scheduled banks

a) With NDTL of Rs.25crore & above

b) With NDTL of less than Rs.25crore

15%

10%

RECENT DEVELOPMENT:

Over the year, primary (urban) co-operative banks have registered a significant growth in number, size and volume of business handled. As on 31st march, 2003 there were 2,104 UCBs of which 56 were scheduled banks. About 79% of these are located in 5 states- Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu. Recently the problems faced by a few large UCBs have highlighted some of the difficulties these banks face and policy endeavors are geared to consolidating and strengthening this sector and improving governance.

There are more than 297 co-operative banks in India: TABLE – 2:

States No. of Banks

Andhra Pradesh 24 Assam 1 Bihar 24 Chhattisgarh 1 Goa 11 Gujarat 221 Haryana 1 Himachal Pradesh 3

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Jammu and Kashmir 2

Karnataka 8 Kerala 43 Madhya Pradesh 35 Maharashtra 67 Meghalaya 5 Orissa 2 Rajasthan 13 Tripura 1 Tamil Nadu 2 Uttarakhand 1 Uttar Pradesh 8 West Bengal 14 INDIAN SCENARIO

The Indian banking system of today can be compared with finest banking system in the whole world. Today the Indian banking system is on very sound lines with a network of branch spared all over the country and serving all sections of the society with innovative banking programs.

Today‘s Indian banking system comprises of 27 public sector banks,30 private sector non schedule commercial banks, several private sector new commercial banks, 27 foreign schedule banks, 196 regional rural banks, several thousand‘s Co- Operative banks and several land development banks. Institutions like Life Insurance Corporation of India and Unit Trust Bank of India also plays an important role in Indian banking system.

Banking structure or banking system in India

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The constituents in the banking sector of India are

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The Reserve Bank of India

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The State Bank of India and its subsidiaries

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The Nationalized and the private Sector Indian Commercial Banks

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The Private Sector Foreign Exchange Banks in India

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The Co-operative banks and land development banks

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Indian commercial bank

Banks that carry on commercial banking operation such as acceptance of deposits from the public, repayable on demand or alter a short period and the granting of short term credit mainly to trade, commerce and industry with a wide network of branches throughout the country.

2.5 ROLE OF CO-OPERATIVE BANKING IN INDIA:

Co-operative Banks are much more important in India than anywhere else in the world. The distinctive character of this bank is service at a lower cost and service without exploitation. It has gained its importance by the role assigned to them, the expectations they are supposed to fulfill, their number, and the number of offices they operate. Co-operative banks role in rural financing continues to be important day by day, and their business in the urban areas also has increased phenomenally in recent years mainly due to the sharp increase in the number of primary Co-operative banks. In rural areas, as far as the agricultural and related activities are concerned, the supply of credit was inadequate, and money lenders would exploit the poor people in rural areas providing them loans at higher rates. So, Co-operative banks mobilize deposits and purvey agricultural and rural credit with a wider outreach and provide institutional credit to the farmers. Co-operative bank have also been an important instrument for various development schemes, particularly subsidy-based programmes for poor.

2.6 PROBLEMS OF CO-OPERATIVE BANK:

Co-operative banks are no exceptions when it comes to problems. As in the case of commercial banks, these do have certain problem:

 The vital link in co-operative credit system namely, the primary co-operative associations themselves are weak.

 They suffer from weak quality of loan assets and force unsatisfactory recovery of loans.  They suffer from infrastructure weakness and structural flaws.

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COMPANY PROFILE

BACKGROUND AND INCEPTION OF THE COMPANY

The Karnataka State Co-operative Apex Bank Limited (hereinafter referred to as ―The Bank‖) is a Scheduled Co-operative Bank incorporated under the Karnataka State Co-operative Societies Act 1959. It was established in 1915 and is meant to act an Apex Body to finance agriculture sector through the District Central Co-operative Banks and Primary Agriculture Co-operative Societies. In the later years the Apex Bank diversified its activities into commercial banking. Today it has 40 branches in Bangalore city through which it carries out commercial banking activities. It does not have any branches outside Bangalore.

HISTORY OF KSCABL

The bank was registered on 10th November 1915 under the name and style of ―The Mysore Provincial Co-operative Bank Limited‖, under Mysore Co-operative Societies Act of 1905. Then, the Bank was not an Apex institution, as it was not exclusively meant for financing the Co-operative in the State of Mysore. Another Bank Called the Bangalore Central Co-Co-operative Bank Limited, Bangalore (which was later converted into an urban bank), which was registered in 1905, was also financing the Co-operatives. The bank owes its origin to Sri. M.A. Narayan Iyengar, B.A., B.L., who was the Registrar of Co-operative Societies at that time.

Sri. Varadaraja Iyenger Founder – KSCABL

The bank was founded with the objective of financing, inspecting and supervising the Co-operative societies in the Mysore State. Subsequently, several district Co-Co-operative central banks with the jurisdiction of a district were registered. Five such district central banks were started. But their working was not satisfactory and they became defunct. An such the provincial bank started financing the societies directly. Besides granting of loans, the bank served as an outlet for investment of the surplus finds of the Co-operative societies in the State. The Bank thus acts as the balancing centre of the Co-operative movement in the State, safeguarding its interests.

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NEED FOR APEX BANK

Karnataka has been in the forefront of co-operative endeavors and has produced several outstanding cooperatives. Sri. Siddanagowda Sanna Ramanagowda Patil organized the first Agricultural credit co-operative society in 1905 in the village of Kanaginal in Gadag district. The co-operatives in Karnataka have the following fundamental objectives and principles:

 To inculcate the spirit of cooperative among the people in the state.  To encourage people to promote cooperatives on a voluntary basis.  To ensure that the cooperatives in the state enjoy maximum autonomy.  To ensure that the cooperatives are accountable to members.

 To ensure that the cooperatives function as instruments for poverty alleviation and for the uplift of weaker sections of the society in order to pave way for establishing an equalitarian society.

 To ensure that the cooperative function as useful instruments to bring about sustained improvement in the quality of life of their members.

 To encourage cooperatives to emerge as self supporting, economic service-oriented business concerns.

 To encourage cooperatives serve as multifunctional units.  To encourage efficient deposit mobilization.

 To encourage efficient deployment of human resources.

 To achieve financial gains and to put mutual aim ahead of private interest.  To provide equal opportunities to all the members.

 To encourage cooperatives to emerge as peoples bank.  To prevent misuse by cooperators.

 To ensure independent audit.

 To infuse professionalism in the management.  To serve towards national objectives.

 To have Cooperators among the Cooperatives.

Initial Stages of Co-operative Movement

The Co-operative Movement in the old Mysore area was first introduced in 1905 when the first Mysore Co-operative Societies Act was passed. The progress of the movement was slow up to 1910-11. However, in the course of the next few years, there was rapid development. There were 111 societies with a membership of 9043 and a working capital of Rs. 3.71lakhs at the close of

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Bangalore Institute of Management Studies Page 16 1910-11. By the end of financial year 1914-15, there were 725 societies with a membership of 56,267 and their working capital went up to Rs.30.85lakhs.

Need for a Separate Provincial Bank

During the period when the Co-operative Movement was introduced, the need for an Apex Bank to finance the societies was not felt since most of the earlier societies, which were started, were non-agricultural societies and they were carrying on their activities out of the meager resources raised by them. But after the year 1910-11, the number of societies and out of which 661 were agricultural credit societies. With the increase in the number of societies, the need for starting a special agency for financing the societies arose. As already indicated above, the Bangalore central co-operative bank was already in the field and was financing some societies to a small extent. Subsequently, however, another institution more or less similar in nature with the jurisdiction of Mysore District called the Mysore District Co-operative Central Bank was registered. This was followed by another type of institution known as unions, which was designed to work as a permanent link between the primary societies at the base and the central bank at the top. The jurisdiction of the unions extended over a taluk and their main functions were to mainly inspect and supervise the co-operative societies in the taluk and also to finance them partly by raising deposits and partly by borrowings from central banks. But since their utility to the movement as a whole was far from satisfactory on account of their limited area of operations and lack of resources, the unions; were wounded up in the next few years by an order of Government in December 1924.

Starting of the Provincial Co-operative Bank

Against this background, the Mysore Provincial Co-operative Bank came into existence. Though this Bank was registered on 10-11-1915, it actually commenced its work in 1916. The bank was started with the objective of financing, inspection and supervising the co-operative societies in the Mysore State. Subsequently, several district co-operative central banks with the jurisdiction of a district were registered. Five such district central banks were started. But their working was not satisfactory and they became defunct. As such, the provincial bank started financing the societies directly. Besides, granting of loans, the Bank served as an outlet for investment of the surplus funds of the co-operative societies in the State. The Bank thus began acting as the balancing centre of the Co-operative Movement in the State, safeguarding its interests.

Re-organization of Provincial Co-operative into an Apex Bank

As already stated above, there were two provincial co-operative organizations working on similar lines and with the same aims and objects, namely (1) The Mysore Provincial Co-operative Bank,

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Bangalore Institute of Management Studies Page 17 (2) Bangalore Central Co-operative Bank. This was an anomaly, which led to mutual completion unnecessarily in the matter of financing of co-operative societies. In order to remove this anomaly and to have only one institution as an Apex institution exclusively for financing the cooperatives in the state, the Government appointed an enquiry committee known as the Mysore Co-operative Enquiry Committee, 1920-22 presided over by Mr.Lallubhai Samakdas. The Committee after reviewing the position of these two banks, made the following three alternative recommendations to the Government:

 To amalgamate the Mysore Provincial operative Bank and the Bangalore Central Co-operative Bank.

 To create a new Apex Bank.

 To convert the Central Co-operative Bank into an urban bank dealing only with the individual and to reorganize the provincial Co-operative Bank into a new Apex Bank.

The Bangalore Central operative Bank opposed the amalgamation with the provincial Co-operative Bank. Thus, the creation of a new Apex Bank was out of question. The Government therefore accepted the third suggestions made by the Committee.

Accordingly, the Government passed orders on 14/15.09.1925 permitting the Mysore Provincial Cooperative Bank to get itself converted into an Apex Bank with the jurisdiction extending over the entire State for financing the co-operative societies exclusively and the Bank thereafter was named as the Mysore Provincial Co-operative Apex Bank Ltd, popularly known as ―Apex Bank‖. In the beginning, the Bank was advancing long-term loans through agricultural credit co-operatives for land improvements and redemption of prior debts. Large amounts were given for the above purposes. After the organization of Central Co-operative Land Mortgage Bank in the year 1929 and Primary Land Mortgage Banks at the taluk level, the Bank had to give up this model of business. On account of depression between the years 1925-30, the value of lands and the prices of agricultural produce fell very steeply and the Bank had to face a lot of difficulties in the recovery of long term loans advanced. However, during Second World War, there was rise in the land value and agricultural prices and the Bank could therefore recover a major portion of its dues.

In order to meet the loss of business on account of stoppage of long-term loans for land improvements and redemption of prior debts consequent on the organization of Central Land Mortgage Bank, the Bank started financing of long-term loans for construction of houses through House Building and House Construction Societies. Besides, on account of Second World War, there was great stimulus for consumer stores activities for distribution of essential commodities

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Bangalore Institute of Management Studies Page 18 through co-operatives. The Bank undertook the financing of these consumer societies in the form of cash credit loan. The financing of House Building Societies continued up to the year 1950 when a separate Apex Institution called the Mysore State Co-operative House Building Corporation was registered. The Government thereupon directed the Bank not to issue loans to the House Building Societies. This was a period of crisis in the history of the Bank. The Bank had to satisfy itself by financing a few marketing societies by way of crop and produce loans and a few stores societies.

Fortunately for the bank, consequent to the amendment to the Reserve Bank of India Act during 1953-54, the RBI suggested that the State Government should step into strengthen the capital structure by contributing Rs. 5lakh towards share capital of Apex Bank. Accepting the proposal, the State Government contributed Rs. 5lakh towards share capital and rehabilitation grand of Rs. 4lakh to meet anticipated bad debts.

During the year 1956-57, States were reorganized on linguistic basis and the new Mysore State with 19 districts came into existence. Since there were District Cooperative Central Banks in all the integrated districts, all the District Cooperative Central Banks came under the jurisdiction of Apex Bank. Further the State Government notified the Apex Bank as the State Cooperative Bank for the entire state and with the expansion, the responsibility of the Bank increased considerably. The Bank stopped financing of primary societies directly. The membership and share capital held by primary societies in Apex Bank was transferred to the respective District Cooperative Central Banks. There was all round progress in the cooperative movement with the reorganization of the State and also in all spheres of activities of the Apex Bank like share capital, reserves, deposits, borrowings, lending, profit etc.

APEX BANK-―The Bank that listens‖

Karnataka State Co-operative Apex Bank is playing a significant role in the dispensation of production credit to the farmers. It is to the credit of Karnataka that the first co-operative credit institution in the entire country was established way back in the year 1904 in a village called Kanaginahal now at Gadag district, Primary Agriculture Credit Societies (PACs) at the village level federation later to District Central Co-operative Banks (DCCBs) at the district level. These DCC banks federated themselves at the state level to form Apex Bank.

The Karnataka State Co-operative Bank (KSCBL) was established in the year 1915 with deposit of Rs.1.26lakh, owned funds of Rs.0.54lakh and working capital of Rs.1.80lakh. Varadaraj Iyenger was its founder and president. The president of KSCBL at present is Mr.R.M.Manjunatha

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Bangalore Institute of Management Studies Page 19 Gowda. The bank has been extending its continued service for the past 95years to its members and customers.

Apex bank is a pioneer in agriculture finance and allied activities. Apex Bank is ranked as one of the premier state co-operative banks in the country. The main objective of the bank are to serve the farmers in the state by providing short and medium term agriculture loans, general banking business and functions as a leader of co-operative banks in the state.

Apex bank also provides cash credit loans to processing, marketing and consumer co-operatives as well as sugar factories in Karnataka and working capital loans to state level and national level institutions.

Apex bank with a network of 40 branches in the city of Bangalore doesn‘t believe in growing alone. It has a firm believe that its continued existence is justified only when the DCC banks and the PACs are made stronger. Today the bank has 21DCC banks and 4613 PACSs throughout the state. All branches are computerized.

They believe that the farmers who borrow from them are not their clients but are of their own family members. Here lays their main strength, ensuring an excellent track record for repayment culture. Compared to commercial banks and regional rural banks, NPA (Non-performing assets) level of this bans is for less, even through its aim is to reduce it further.

The bank is habituated to get awards at the national level year after year. Similarly NABARD (National Agricultural bank of rural development) has been given best performance award and even PACSs have not lacked behind in getting national recognition. All DCC banks and nearly 80% of PACSs have proved them to be financially viable.

They are aware of the problems faced by the farmers, be it non-remuneration price or occasional drought like situation in the state. This bank is committed to provide whatever little assistance to the state government to overcome these difficulties. They are aware of their limitations; their market share in the production credit dispensation has to go up. There are yet cover 20lakhs farmer members. The national agriculture policy formulated by government of India as cast greater responsibility on the bank and they hope accomplish what is expected from them in this behalf. They are also providing housing loans, mortgage loans and vehicle loans to individuals and also giving installment loans to the employees of government and public undertaking up to limits of Rs. 1lakh. Apart from this jewel loan is also extended to the customer through their branch in Bangalore.

The construction of new building at a cost of around Rs.800lakhs commenced in august in 1998 provides added impetus to a new work culture and new mindset of all. The gigantic building with

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Bangalore Institute of Management Studies Page 20 granite gladded facade having circular and rectangular column suggesting strengths and stability reflects the administrative requirements of the bank along with the hi-tech banking hall on the ground floor. The building up area of Uthunga is 67,820 sq.ft. And the civil cost is about Rs.888 per sq.ft and interiors all-inclusive worked at Rs.357 per sq.ft.

The bank believes that their members are always behind them not only to encourage but also to guide them in case they go wrong. The bank is great full to them. Similarly it is great full to the government of Karnataka, RBI, NABARD and all other sister co-operatives in the state for what they are today.

AGRICULTURE CO-OPERATIVE STAFF TRAINING INSTITUTE

The Agricultural Co-operative Staff Training Institute of the Karnataka State Co-operative Apex Bank Limited was established in the year 1985 to impart the requisite knowledge, professional skills ad attitude of the personnel working in Apex bank, District Central Co-operative Banks, Urban co-operative banks and Primary Agriculture Co-operative Societies in the state. During the year 2009-10 1590 have participated for training program.

The agricultural co-operative Staff Training Institute is located at Padmanabhanagar. The Institute is having its own infrastructure like Administrative Block, 3 classrooms, Library, conference hall and hostel block with 18 rooms which accommodates 45 persons with canteen facilities and providing Boarding and lodging facilities to all the participants during training period.

We are in the midst of challenges which have not been faced by the co-operatives hitherto in the wake of economic liberalization and globalization. The co-operatives are required to be professional to remain competitive to effectively cater to the needs of the rural community. It is necessary that the bank should utilize the available man power effectively to the end.

The institute is dedicated to improve and utilize the available man power at Apex Bank, DCC Banks, Urban Co-operative Banks and Primary Agricultural Co-operative Societies effectively. The institute is offering the entire training program at subsidized cost with the assistance of NABARD. Only nominal delegation fee is being collected from the client institution for the entire training program conducted by the institute.

OBJECTIVES OF THE BANK

The Apex Bank is a pioneer in agricultural finance and allied activities in Karnataka. The Bank thanks to its broad spectrum of activities and a proven track record is ranked as one of the premier State Co-operative Banks in the country. The Bank‘s main objectives are to serve the farmers in the State by providing short and medium term agricultural loans, carry on general Banking business and function as a leader of Co-operative Banks in the state.

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Bangalore Institute of Management Studies Page 21 The bank also provides cash credit loans to agro processing and marketing activities, consumer cooperatives and sugar factories in Karnataka. It provides term loans to sugar factories under consortium arrangements and working capital loans to state level and national level co-operative institutions. The main aims and objectives of the Bank defined in the Bank Bye Law No. III are given below:

 To serve as a State Co-operative Bank and as a balancing center in the State of Karnataka for registered co-operative societies.

 To raise funds by way of deposits, loans, grants, donations, subscriptions, subsidies etc. for financing the members by way of loans, cash credits, over-drafts and advances.

 To develop, assist and co-ordinate the member DCCBs and other Co-operative Societies and secure financial assistance for them

 To arrange/hold periodical Co-operative Conferences of the DCCBs and other members of the bank and to take action for the growth and development of the Co-operative Credit Movement.

 To participate in financing Co-operative and other institutions who are members of the bank, directly or through consortium of Bankers.

 To participate in the schematic lending and to provide loans for which refinance facility is available with term lending institutions.

 To arrange for the inspection and supervision of the affiliated DCCBs and other Co-operative Societies and guide them in their working.

 To buy and sell securities for the legitimate investment of surplus funds and act as agents for buyers and sellers of securities of Central/State.

 To carry on general business banking and other banking activities to the members and customers.

 To purchase, acquire or raise or otherwise obtain moveable of immoveable property for the own use of the bank and also to dispose them of when not required.

 To take measures to help Co-operative Research and Co-operative Development.

 To manage, sell or release any property which may come into the possession of the bank in satisfaction of or part satisfaction of any of its claims.

 To promote economic interest of the members of the Bank in accordance with the principles of Co-operation.

 To do such other things as are incidental or conducive to the promotion and advancement of the business of the Bank.

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Bangalore Institute of Management Studies Page 22  Some Co-operative banks are schedule Co-operative banks while others are

non-schedule Co-operative banks.

To do such other things as are incidental or conductive to the promotion and advancement of the business of the Bank; one of the premier State Co-operative Banks in the country. The Bank‘s main objectives are to serve the farmers in the State by providing short and medium term agricultural loans, carry on general Banking business and function as a leader of Co-operative Banks in the State.

The Bank has expanded its activities and offers all types of banking services to its customers, the growth in deposits as well as loans and advances led to appreciable rise in profitability from year to year. It has now built up a strong capital base and is ranked as one of the premier state co-operative banks in the country. Nearly 40% of the loans have been advanced to weaker sections SC/ST and Agricultural Laborers.

The principal functions:

 Financing of Short Term Loans for Seasonal Agriculture Operations and for marketing of crops. These loans are repayable within one year.

 During the year

 Advancing medium term loans for the development of agricultural infrastructure such as Lift Irrigation, Dairy, Poultry, Plantations, Gobar Gas, etc, under schematic lending.  Providing Cash Credit loans to Processing, Marketing and Consumer Co-operatives as

well as Sugar Factories in Karnataka and also Term Loans to sugar factories under consortium arrangements.

 Advancing Working Capital loans to state level Co-operative like MARKFED, KCCF and to the National Level Co-operative such as IFFCO and KRIBHCO. The Bank provides similar facilities to Public Sector undertakings like Food Corporation of India through consortium arrangements with Commercial Banks and at times directly.

 The Bank extends finance to Non-Farm Sector and for the development of Cottage Industries, Small Scale Industries and Rural Artisans and Weavers. It is a scheduled Bank in all respects including remittances of funds by Demand Draft, Mail Transfers, Collection of Cheque and Drafts.

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INFRASTRUCTURE

The Institute is having its own infrastructure like Administrative Block, 3 Classrooms, Library, Conference Hall and Hostel Block with 18 rooms which accommodates 45 persons with canteen facilities and providing Boarding and Lodging facilities to all the participants during training period.

ACTIVITIES OF THE BANK

 Financing short-term (agriculture) loans for crop production and marketing of crops and advancing Medium Term Loans for development of agricultural infrastructure such as lift irrigation, dairy, poultry, plantation, gobar gas etc.

 Extending cash credit loans to processing, marketing and consumer co-operative as well as sugar factories in Karnataka.

 Advancing term loans to new co-operative/private sugar factories under consortium arrangement in Karnataka.

 Advancing working capital loans to sugar factories, state level cooperative and to national level cooperatives such as IFFCO, KRIBHCO and to state level undertakings through consortium arrangements with commercial banks.

 Financing to non-farm sector for development of cottage industries and rural artisans and weavers.

 To carry on general business of Banking like remittances of funds by DD, Mail Transfer, Collection of Cheques and Draft, issue of consumer loans, vehicle loans, housing loans, salary earners loans and gold loans and other banking activities to the members and customers.  To monitor the Inland Mutual Arrangement Scheme under which money remittances and

collection of bells and Cheques are facilitated between member banks. The Bank is a member All India Mutual Arrangement Scheme, whereby money remittances could be made and DDs issued as well as Bills and Cheques sent for collection throughout India. Similarly, mail Transfers and Bills Collection are facilitated from any part of the country to Apex Bank.

BRANCHES AT BANGLAORE

BRANCH NAME

Head Office Branch – Chamarajpet Ashoka Pillar Branch Banashankari Branch Basaweswarnagar Branch

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ACHIEVEMENT AWARDS:

1. Bank is able to lend 75% of the farmers in the state and it covers all sugar factories in Karnataka. Gandhinagar Branch Ganganagar Branch Girinagar Branch Gokula Branch H S R Agara Branch Indiranagar Branch Jayanagar Market Complex Jayanagar 9th Block branch

J P Nagar Branch Kengeri Satellite Town Branch

Koramangala Branch Lakkasandra Branch Legislators Home Branch

Magadi Road Branch Mahalakshmipuram Branch

M S Building Branch Public Utility Building Branch

Padmanabhanagar Branch Rajajinagar Branch R P C Layout Branch R T Nagar Branch Shivajinagar Branch Vijayanagar Branch Vyalikaval Branch Vidhanasoudha Branch

Vivekananda College Ext. Counter Br. K R Puram Branch Yelhanka Branch Bommsandra Branch Rajarajeswarinagar Branch B T M Layout Branch Sunkadakatte Branch T Dasarahalli Branch Banashankari 3rd Stage Mahadevapura Branch

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Bangalore Institute of Management Studies Page 25 2. Apex bank is habituated to get awards at national level year after year. Similarly NABARD has been giving best performance award and even PACS have not lagged behind in getting national recognition. All DCC bank and merely 80% of PACS have proved.

3.2 VISION

As a

State Co-operative Bank, Apex Bank shall be dominant financial institution in state leading the state to economic prosperity.

 The Bank shall be the model of an effective, protective, dynamic and financially sound organization, responsive to state goals and aspiration.

 The bank shall maintain highly trained and motivated professionals committed to highest standards of ethics and excellence.

 The bank shall contribute to building progressive and good standards of co-operative societies in the service of farmers and rural mass.

3.3 MISSION

Ensuring the best quality of life and success of their farmers, primary agricultural co-operative societies, district central co-operative bank clients and employees, who are the reasons for their being.

FOR THEIR FARMERS

The bank shall continue to improve their socio economic status through timely financial and technical support.

FOR THEIR CLIENTS

They shall deliver innovative and advanced products and services in protective and effective manner to meet their local demands.

FOR THEIR PAC’s AND DCC BANKS

They shall ensure visual co-operative and compliment action to achieve optimum gain in an environment of confidence and trust.

FOR THEIR EMPLOYEES

They shall ensure a work atmosphere of mutual respect and team work within the systems of recognition regards. They shall continue appropriate training and value enhancement to ensure the highest degree of professionalism and integrity.

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SERVICE PROFILE OF THE BANK

The Karnataka State Co-operative Apex Bank limited Provides following services to the societies:-



Financing of short term loans: financing of short term loans for seasonal agricultural

operations and marketing of crops. These loans are repayable within one year.



Financing of medium term loans: these loans are sanctioned for agricultural purpose and

non-agricultural purpose.



Financing of kisan credit card schemes/loans: kisan credit card aims at providing timely

and adequate credit support to farmers for their cultivation including investment credit needs in a flexible and cost effective manner. All DCC banks in the state have implemented the Kisan credit scheme.



Credit facilities of self help groups: All the DCCBs have taken keen interest in the

formation of self help groups in co-ordination with PACSs. Self help groups mobilize their savings and avail credit facilities from DCCBs and PACSs.



Advancing medium term loans with economic development: These loans are advanced for

the agricultural infrastructures such as lift irrigation, dairy, poultry, gobar gas etc that constitutes schematic lending.



Providing cash credit loans: Providing cash credit loans to processing marketing and

consumer co-operatives as well as sugar factories in Karnataka and also term loans to sugar factories under consortium agreement.



Advancing working capital loans: Advancing working capital loans to state level

co-operatives like MARKFED, KCCF and to national level co-co-operatives like IFFCO and KRIBHCO. The bank provide similar facilities to public sector understanding like Karnataka silk marketing board, Karnataka handloom development corporation, Karnataka small scale industries development and corporation. Food corporations of India directly and also through consortium arrangements with commercial banks.



Loans through various schemes: Loans through various schemes such as:

1) Housing Loans:

Loans for purchase/ construction of houses and flats are sanctioned upto Rs.30.00lakhs for residents of Bangalore. Repayment period is upto 15 years.

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2) Housing Loans for construction/purchase: TABLE – 3:

Repayment period Limit Present rate of interest

Upto 7 years Upto 30.00lakhs 10.50%

Above 7 years and upto 15 years

Upto 30.00lakhs 11.50%

Above 7 years and upto 15 years

Above 30.00lakh 12.50%

Commercial building construction / purchase/ mortgage loan:

TABLE – 4:

Repayment period Limit Present rate of interest

Maximum 10 years Upto 60.00lakhs 15.00%

Processing charges:



1% of the loan amount. Required Documents:



Original equitable mortgage deed



Latest EC in Form No.15 after registration



Loan agreement



Acceptance letter



Pro-note and letter of guarantee shall be executed by surety.

The applicant should provide property insurance policy up to 150% of the loan amount. 3) House / site mortgage loans:

Mortgage loan is available for the purpose of education / marriage of children and also business purposes. Mortgage loan also extended to the commercial buildings repayable in 120 months. Loans are also given for site purpose and site mortgage. The rate of the interest varies from 14% to15% p.a. based on the nature of loan and loan amount.

4) Professional loan TABLE – 5:

Professional Loan Present rate of interest

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5) Commercial vehicle loan TABLE – 6:

Commercial vehicle loan Present rate of interest

Upto Rs. 60.00lakshs 12.00%p.a

6) Cash credit loans to traders TABLE – 7:

Cash credit loans to traders Present rate of interest

Upto Rs. 60.00lakshs 13.00%p.a

7) Vehicle loans:

Loans to individuals for purchase of two wheelers and four wheelers are granted upto a maximum limit of Rs. 20.00lakhs. The loans are sanctioned upto 75% of invoice value, Road tax, and insurance, whichever is less amount of the vehicles.

TABLE – 8:

Period Loan Amount Present rate of interest

5 years Upto Rs.5lakhs 11.50%

5 years Above Rs.5lakhs 12.50%

8) Instalment Loans:

Under this scheme bank finances employees of public sector undertakings and also government employee‘s upto a limit of Rs.3.00lakhs.The present rate of interest is 12.50% and repayment period is 60 months.

9) Jewel loan:

The bank also provides loans to the public on pledge of gold ornaments. The maximum limit is Rs.10.00lakhs and the present rate of interest is 12% to 12.50% and repayment period is 2 years.

Rate of Interest:



Upto 5lakhs – 12.00% per annum



Above 5lakhs – 12.50% per annum

Maximum limit:

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Bangalore Institute of Management Studies Page 29 The repayment period for the loan is 24 months and interest should be paid every month. 2 % penal interest will be collected on overdue amount and 13.00% interest will be charged on the overdue interest amount.

Service charges along with Jewel Appraisal chargers will be collected for each loan. The loan will be considered only if the gold is 22 carat.

10) Apex personal:

Loan scheme for employees of corporate professionals can avail this loan.

11) Apex cash:

Loans are provided against approved bonds like RBI, NABARD and other government bonds.

12) Apex education:

Education loans to deserving / meritorious students for pursing higher education and professional courses in India and abroad in reputed universities / institutions.

13) Apex Travel:

To meet travel and lodging expenses of individuals for travel in India and abroad either trough personally arranged tours or through conducted tours. Annual Gross Salary Gross Income of the applicant should not be less than Rs.1.50lakhs.

14) Apex Rent:

Loan based on the rental income of the property rented/ leased out to central / state / semi government / banks / financial institutions and multinational companies.

15) Apex BDA:

i. Loan for direct purchase of sites from Bangalore Development Authority either on allotment basis or through auction. Salaried Individuals with a confirmed service of three years. Non – salaried persons must be IT Assessee for at least three years.

ii. Loan scheme to individuals to pay initial deposit as notified by Bangalore Development Authority in their offer letter. Salaried Individuals confirmed in service. Non salaried persons must be IT Assessee for at least 3 years.

16) Apex Overdraft:

Loans to individuals pursuing such activities like retail trade, small business and professionals. Loans are provided against security of National Savings Certificate / Life Insurance Corporation Policy / Gold Ornaments, etc.

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17) Apex Self Employment:

Terms loans and working capital loan for purchase of tools, loan to auto mechanics / electricians / plumbers and carpenters engaged in servicing & repairing, to meet their working capital requirements. Self employed persons who are engaged in servicing and repairs. Preference to those who have undergone training in the prescribed disciplines in the reputed training in the prescribed disciplines in the reputed training institutes.

18) Apex Gold:

Loans are provided to individuals for purchase of gold jewellery. The annual gross salary / gross income of the applicant should be above Rs.1.00lakhs.

19) Apex retails:

The loan for petty traders, enterprises established mainly for providing services for selling of foods on commission basis booking, clearing and forwarding agents, petty trades like grocery, cloth, Xerox can avail this loan.

20) Apex women:

Loan sanctioned to women to meet their genuine personal needs like buying household articles, gifts and jewellery. Working women or housewives between 18 to 55 years of age are eligible for availing the loan.

21) Apex Pension:

Loans are provided for pensioners to meet medical expenses, other genuine needs and emergent personal expenses. Pensioners drawing pension through branch can avail this loan.

22) Apex Professional:

Personal loans are provided to doctors / engineers / architects and also to prompt income-tax payees. The applicant must be registered / reputed professional having his own office. 80% of the annual income as assessed in the IT Returns.



Personal banking: Apex bank provides the following deposits schemes to the customers. A. Term Deposits: Term Deposit schemes offered by the KSCABL currently are ―Fixed

Deposit‖, Diamond Jubliee Jeevan Jyothi Deposit (DJJJ)‖ and ―Cumulative Deposit and Reserve Fund deposit‖.

Fixed Deposits

i. Can be opened in a single name or two names.

ii. The period of deposit ranges from 15 days to 10 years. iii. This account can be operated by either or survivor or jointly.

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Bangalore Institute of Management Studies Page 31 iv. Nomination facility is available. In case a minor is nominated, another name of a major is

a must.

v. This deposit is meant for a stipulated period. The amount will be paid on the date of maturity. The interest is payable on monthly/quarterly basis.

vi. If the depositor wants to close the deposit before maturity (premature closure), a penalty of 1% is charged.

vii. Deposits are accepted from Institutions and Individuals.

viii. Loan facility is available on this deposit. 85% of the deposit amount can be given as loan. 2% more interest against the applicable rate on FD will be charged.

ix. Overdraft facility.

x. Additional 1% interest is paid for staff and ex-staff accounts. xi. 0.50% more interest is paid for Senior Citizen.

xii. Additional 0.50% interest is paid for individual deposits of Rs. 15.00lakhs & above, invested at a time for a period of one year & above.

xiii. Not transferable.

TABLE – 9:

TERM DEPOSITS RATE OF INTEREST 1. 15 to 45 days

2. 46 to 90 days 3. 91 to 179 days 4. 180 to 364 days 5. 1 year to 2 years 6. 2 years and above

5.00% 6.00% 8.00% 8.50% 9.25% 9.00%

Diamond Jubilee Jeevan Deposit A/c (DJJJ)

i. Can be opened in a single name or two.

ii. Can be operated singly by either or survivor or jointly. iii. Nomination facility is available.

iv. One year is the minimum period for this deposit.

v. Interest will be paid along with the principle amount at the time of maturity. vi. 75% of advance is available against this deposit.

vii. This deposit is not transferable

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1. The Higher Rate of 0.50%on Individual Deposits of Rs.15.00lakhs & above Invested

at a time for a period of One year & above.

2. The Higher Rate of Interest 0.50% offered to Senior Citizens on all term deposits

irrespective of the period of deposits.

3. The retired Officials of KSC Apex Bank Ltd. Who have become senior Citizens are

not entitled for this higher rate as per the circular dated 04.06.2007.

Cumulative Deposit:

i. Can be opened in a single name or two names. ii. One year is the minimum period for this deposit.

iii. The depositor has to pay monthly installments in multiples of Rs. 100/- only. iv. 70% of advance is available against this deposit

v. Interest will be paid along with the principle amount on the date of maturity. vi. Nomination facility is available.

B. Current Deposits: Features

i. Individuals, partnership firms, HUF, Societies, Trust Accounts, can open a Current Account.

ii. No limit is fixed on the number of transaction in a transaction in a Current Account. iii. Minimum balance to be maintained in case of Accounts without Cheque Book is

Rs.1000/-

iv. Minimum balance to be maintained in case of Accounts with Cheque Book facility Rs.5000/-

v. Usually no interest is paid to Current Accounts and no OD is allowed.

Requirements for opening of the Current Accounts by individual

i. Any individual who is major and has got contractual capacity can open a current account. Any person who wants to open a Current Account has to fulfill the following formalities: Name and address of his residence - Documents like Voters list, Passport, Driving License, Electricity Bill, Telephone Bill etc., for address proof.

ii. Introduction of the person from an existing account holder with the Bank. iii. Recent photograph of the person for identification

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Bangalore Institute of Management Studies Page 33 v. Specimen signatures of the account holders

Requirements for opening of the Current Account by institute/society

i. A person who wants to open a Current Account has to fulfill the following formalities: Name and address of his residence – documents like Voters list, passport, Driving License, Electricity Bill, Telephone Bill etc,. for address proof.

ii. Introduction of the person from an existing account holder with the Bank iii. Recent photograph of the person for identification.

iv. Permanent Account Number (PAN) / Form No.60/ From No.61. v. Specimen signature of the account holders.

vi. License from the Registrar of Co-operative Societies in Karnataka, Bangalore.

vii. Copy of Byelaw and Board Resolution, which includes the rules for operating the account, specimen signatures of the signatories who are going to operate the account and the nature of work they carry in their business

viii. Copy of Balance Sheet, Profit and Loss A/c and Audit Report of the transactions update should be provided along with a letter stating whether they have any credit facilities, loans and advances with any other banks.

ix. Cheques should be drawn according to the operational instructions given b the account holders.

x. In case of insolvency, the operation may be stopped.

Nomination facility is available in Current Account Individual/ General Account, where account holder can nominate a person as a nominee.

C. Savings Bank Deposits: Features

i. A common operating account for individuals for non-commercial transactions.

ii. Helps you manage day-to-day banking transaction with some returns for the savings made iii. Minimum Balance to be maintained without Cheque Book facility is Rs.250/-.

iv. Minimum Balance to be maintained with Cheque Book facility is Rs.500/-. v. ECS facility

vi. Nomination facility

vii. No overdraft facility is allowed. There is also a ceiling on the total number of withdrawals permitted during a specific time period.

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Bangalore Institute of Management Studies Page 34 ix. Interest on balance in saving bank accounts would be calculated on daily product

basis with effect from April 01, 2010. x. Rate of Interest – 4.00% PA.

This structure will helps to proper flow of the delegation of authority and responsibility between the top levels to lower level employees. This arrangement helps to the allocation of tasks and responsibilities to different and the persons at various positions. Since Karnataka State Co-operative Apex Bank being a public sector unit the structure of organization is more democratic and military type that is decision is taken from the top level management will consult the lower level and functional manager. And for the performance of any particular task a separate functional head is assigned. Each functional department heads are assisted by the managers.

Requirements for opening of SB Account

i. A person who wants to open an SB Account has to fulfill the following formalities – Names and address of his residence – Documents like Voters list, Passport, Driving License, Electricity Bill, Telephone Bill, etc., for address proof.

ii. An introduction of the person from an existing account holder with the Bank. iii. Recent photograph of the person for identification for future needs/investigations. iv. Permanent Account Number (PAN)/ (Form No.60/ From No.61)

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ORGANIZATIONAL STRUCTURE

An organizational structure is a hierarchical concept of sub-ordination of entities that collaborate and contribute to serve one common aim of the organization. Organizations are a number of clustered entities. The structure of an organization is usually set up in one of a variety of styles, dependent on their objectives. The structure of an organization will determine the modes in which it shall operate and will perform.

Organizational structure allows the expressed allocation of responsibilities for different functions and processes to different entities. These entities are called as departments. Board of Directors will take the decisions that are strategic in nature. All the departments head communicate their report daily or weekly to the management and regulates the performance of their respective departments.

Structure refers to the arrangement of the different levels of organization to maintain the inter relationship.

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