CHAPTER 1

INTRODUCTION

Banking system did not originate in any status of government or by any byelaw of private
organization. It has a primitive origin as signified by the name bank itself, meaning a bench or
desk on which transaction look place in olden days.
Banking made its appearance as a public enterprise around the middle of 12
th
century in
ITALY when the bank of Venice was established in the year 1157 originally. It was not a bank
but only on office of the transfer of public debt. Banking in the modern of the term can be said to
have originated in England in the year 1964.
However modern banking came into existence only after the industrial revolution, that took
place in European countries in the 18
th
and 19
th
century.

BANKING SYSTEM IN INDIA

Banking system occupies an important role in a nations economy. A banking
institution is indispensable in a modern society. It plays a vital role in the economic development
of a country forms the core of the money market in an advanced country.
According to Indian Banking Regulation Act 1949, sec. 5 (1) (c) define the term
banking as acceptingfor the purpose of lending or investment of deposit of money from the
public, repayable on demand or otherwise and withdrawal by cheque, draft, order or otherwise.
We have mainly followed the British pattern of banking system viz, branch banking
in India. Branch banking is popular because of the geographical of our country. Indian banking
can be divided into three categories, viz RBI, the commercial banks and co-operative banks. The
commercial banks broadly classified into nationalize or public sector bank and private sector
bank. The private sector bank includes a small number of Indian scheduled bank which have not
been nationalized and branches of foreign bank.






ORGANIZATIONAL STRUCTURE OF INDIAN BANKING
SYSTEM

Chart 1.2















Reserve Bank of India
Commercial Banks Regional Banks Co-operative Banks
Public Sector Banks Private Sector Banks


ector b
anks
Nationalized
Banks
State Banks
Domestic Banks
Foreign Banks
State Bank of
India
Associates
State co-operative
Banks
District co-operative Banks
PACB UCB

The co-operation credit movement was officially launched in India in 1904 after the
famous prescription of Nicholson to find Raiffeison. It represents a three tier structure
primary agricultural credit societies [PACs] forming the ground floor, the central co-operative
banks [CCBs] the middle level, and the state co-operative banks [SCBs] the top floor as the apex
institutions.
Co-operative banking is retail and commercial banking organized on a co-operative
basis. Co-operative banking institutions take deposits and lend money in most parts of the world.
The object of co-operative is to offer banking facilities to persons of limited means requiring
creditor productive purposes in the use of land and labour at their disposal. These are the
federations of primary credit societies in a district and are of two types those having a
membership of primary societies only and these having a membership of societies as well as
individuals. They also conduct all the business of a joint stock company.
Financial analysis is one use of financial statements to analyze a companys financial
position and performance, and to assess future financial performance. Thus it becomes necessary
to analyze financial statements in order to understand more about profitability and financial
position of a business.












STATEMENT OF PROBLEM
Financial analysis is used to analyze the financial position of the organization. For this
purpose, the financial analyst will concentrate on the income statement, balance sheet and cash
flow statement one key area of financial analysis involves extrapolating the companys past
performance. Hence the researcher look the past performance of the Wayanad District Co-
operative Bank into an estimate of the banks future performance, as a problem to studied upon.

IMPORTANCE OF THE STUDY
Wayanad is basically an agrarian sector. So most of the peoples livelyhood mainly
depends upon the agricultural development and its sustainability. Wayanad District Co-operative
Bank plays a vital role for improving their existing living conditions by providing loans and
other financial assistance to the needy people.
Now a days agricultural sector faces more difficulties and the continuous loss occurred
in the agricultural crops due to adverse weather conditions, problem of water, power supply,
irrigation facilities and rural infrastructure facilities, lack of marketing information, poor
knowledge about the new techniques and facilities used in agriculture, etc. make the lives of
people a horrible one with financial burden and other problems.
In such situations, this study is relevant to know how much the Wayanad District Co-
operative Bank can realize its objectives and to contribute to the welfare of the people in
Wayanad district.

OBJECTIVES OF THE STUDY
The objectives of the study are to evaluate the growth rate and profitability analysis of
the financial statements of the Wayanad District Co-operative Bank.

SCOPE OF THE STUDY
The scope of the study is concentrates on the Wayanad District Co-operative Bank. This
study aims to evaluate the financial performance of the bank. It further attempt to the
profitability growth rate of financial statements in the recent years.

METHODOLOGY OF STUDY
There are two types of data are used for the study. They are primary and secondary data.
1. Primary Data
Primary data is collected from the bank employees through personal interviews and
questionnaires.
2. Secondary Data
Secondary data is collected from the records annual reports and financial reports
maintained by the bank.

PERIOD OF THE STUDY
The period of the study taken into account data relating to year viz, 2009-2010, 2010-
2011, 2011-2012.

LIMITATIONS OF THE STUDY
1. This study focus only the financial aspects of the bank, it ignores efficient management
and other factors of the bank.
2. Time factor is the major defect of this study. Detailed financial analysis of the bank is
found to be a difficult task within one allowed period
3. Limitation of the ratio analysis may effects the study
4. Lack of knowledge of the banking terminology is another problem.

CHAPTER SCHEME
Chapter I Deals with introduction, it consists of objectives of the study, scope of the study,
research methodology, Limitation and cauterization.
Chapter II Co-operative banking sector History of co-operative banks.
Chapter III Wayanad District Co-operative Bank An overview
Chapter IV Financial analysis
Chapter V Findings and suggestions

CHAPTER -2

CO-OPERATIVE BANKING SECTOR
Co-operative banks are institutions established on the principles of co-operation and it
deal in ordinary banking business. It is formed to extend credit facilities to farmers and small
scale industries. It collects funds through shares, accept deposits and grant loans. The main
feature of the co-operative banks is that it has no profit motive. Co-operative banks are very
helpful to meet the financial requirements of small farmers, artisans etc.

HISTORY OF CO-OPERATIVE BANK
. Co-operative banks are originated with the enactment of the co-operative credit societies
Act 1904, which provided for the formation of the co-operative credit societies. Under the Act of
1904, a number of co-operative credit societies were started. Owing to the increasing demand for
co-operative credit, a new Act was passed in 1912, which provided for the establishment of co-
operative central banks by a union of primary credit societies and individuals. The chief
functions of these banks were;
to attract deposits from non agriculturists
to use excess funds of some societies temporarily to make up for shortage in another,
and;
to supervise and guide the affiliated societies in 1914, the Mclagan committee was
appointed to examine the co-operative movement and to make recommendation
regarding the improvement of the movement. It recommended the establishment of a
State Co-operative Apex Bank. On the basis of the recommendation, a central co-
operative bank was established in Bombay, other provinces also take action on similar
lines. Although these may be considered as the early beginnings in the direction of
establishing co-operative banks to meet the financial needs of the agriculturists, the
movement received momentum only after the Second World War.








ORGANISATIONAL STRUCTURE OF THE CO-OPERATIVE
CREDIT INSTITUTION

The co-operative banking structure in India comprises two main components-Urban
Co- operative Banks and Rural Co-operative Credit Institution. Urban co-operative banks have
single tier structure, while Rural co-operatives have a complex structure, viz, the Short-Term
Co-operative Credit Structure [STCCS] and the Long- Term Co-operative Credit Structure
[LTCCS]. Within the STCCS, Primary Agricultural Credit Societies [PACS] at the village
form the base level, while District Central Co-operative Banks at the apex level. The STCCS
mostly provide crop and other working capital loans primarily for a short period to farmers and
rural artisans.
The Long-Term Structure of rural co-operatives comprises State Co-operative
Agriculture and Rural Developments Banks [SCARDB
s
] and Primary Co-operative Agriculture
and Rural Development Banks [PCARDB
s
]. These institutions focus on providing typically to
long term loans for making investments in agriculture, rural industries and, lately housing. The
structure of rural co-operative bank is not uniform across the states of the country, and varies
significantly from one state to another. Some states have a unitary structure with the state level
banks operating through their own branches, while others have a mixed structure incorporating
both unitary and federal system.













Chart 2.1
STRUCTURE OF CO-OPERATIVE CREDIT INSTITUTION


















Co-operative Credit Institution
Rural Co-operative Credit Institutions Urban Co-operative Banks
Short Term Structure
Long Term Structure
State Co-operative Banks
District Central Co-operative
Banks
Primary Agricultural Credit
Societies
State Co-operative
Agriculture and Rural
Development Banks
Primary Co-operative
Agriculture and Rural
Development Banks



STRUCTURE OF CO-OPERATIVE BANKS IN KERALA

After the formation of Kerala state, the Kerala Govt. passed an Act in the name of
Kerala State Co-operative Societies Act 1969, for the smooth functioning of co-operative
societies.
At present in Kerala, the co-operative movement is functioning under the three tier system
as given below;
1. State co-operative bank is at the apex of the co-operative credit structure. It acts as the
bankers bank to the District co-operative banks to forecast and manage the financial
requirements of the state as a whole.
2. District co-operative bank operate at the district level with main function of financing the
affiliated PACSs in their area of operation.
3. PACSs operative at the village level and maintain direct contact with farmers to supply
short term and medium term credit.












CHAPTER-3

WAYANAD DISTRICT CO-OPERATIVE BANK LTD.NO.4357

ORIGIN OF WAYANAD DISTRICT CO-OPERATIVE BANK
The history of the Kalpetta Service Co-operative Bank dates bank to pre independence
years it was in 1921 under the leadership of Sri. N. C. Dharma raj Iyer a leading planter and
Sahakari, a society by name Kalpetta Ikiya Nanaya Sangam was formed and registered on
12-12-1921 with an aim to relieve the poor farmers from the clutches of private finance mafias
and intermediate agencies whose only motive was to exploit the poor farmers and their products,
the Sangam started its operation on 31-01-1992 with Sri. Dharma raj Iyer as chief promoter and
sri. Ravunni menon as honorary secretary and with strength of 129 members.
The areas of operation were Vegappally Kunnathidavaka (now Vythiri) and Achooram
Kunnu (now Pozhuthana) villages. The Sangam could survive only with the unblemished support
of its farmer members at a time when there were no monetary supports from any Govt. agencies
or other banking/ non banking initiation.
The Kalpetta Ikiya Nanaya Sangam was registered as Kalpetta urban co-operative bank
on 20
th
February 1947. The first president of the Kalpetta Urban Co-operative Bank was sr. M.
K. Jinachandran a leading planter & great humanitarian and for a long 23 years he leads the bank
as president most efficiently and made it one of the leading banks in the region. He was the spirit
of the bank and he got full support from Sri. P.M. Padmanabhan the honorary and also from the
esteemed prime members.
January 1
st
, 1964 was golden day in the history of the bank. The Kalpetta Urban Bank
was registered as Kalpetta Service Co-operative Bank with aid from the central Government. The
KSCB could serve better and the common people were much benefited with introduction of
deposit schemes, both recurring and daily and cash certificate. In 1965 when Kerala faced a food
deficit problems the KSCB took over the ration distribution and performed diligently to the
utmost satisfaction of the public.
The KSCB owned its own building in the heart of Kalpetta and moved to the new
premises, then the honorable minister of co-operation. Government of Kerala, Sri. P. R.Kurupp
formerly inaugurated the bank for the public on 01-07-1967.
In 1969 when Kerala Co-operative Act came into affect the operational area of KSCB
was limited to Kalpetta and the neighboring areas now Kalpetta Municipality. Consequently
there was a sudden spur in the services provided by the bank. The KSCB ventured into new areas
and for the benefit of farmers and traders started Kuries, business loans, agricultural loan etc.
1972 was another golden year in the history of the bank. The silver jubilee old the bank
was celebrated with great enthusiasm. A new branch of KSCB was opened at Maniyancode in
the year 1984 and moved to its on premises in the year 1995. In 1999 the main branch of KSCB
was fully computerized followed by Maniyancode and north Kalpetta Branched in the year 2000.
The KSCB has created history being the first online co-operation bank in Wayanad. The
inauguration was done in the bank premises in 19
th
December 2009 at 1 pm. In a function
presided over by Sri. M. V. Sreyamskumar MLA, the core banking was inaugurated by Sri.
Binoy Viswam. Hon minister of forest Govt. of Kerala. The internet banking by Sri. P. V.
Sahadevan, president Wayanad District Co-operative Bank mobile banking by Sri. P. T.
Gopalalurup, Cahairman, Kerala Co-operative Milk Marketing Federation Ltd. Full Time
Banking by Smt. P. R. Nirmala, Chairperson, Kalpetta Municipality and website by Sri. N. K.
Sureshkumar, joint Registrar (General) Co-operative Department, Wayanad, followed by
facilitation by eminent personalities from different organizations in Wayanad. The big crowded
priest testified the creditability and the popularity of the bank in the region.
The Wayanad District Co-operative Bank Ltd No. 4357 is registered as a co-operative
society under the Kerala State Co-operative Societies Act of 1969, in 01-10-1982, after the
formation of Wayanad District. It is the youngest District C-operative Bank of Kerala. Its head
office is situated at Kalpetta and its operations extend to the whole of Wayanad revenue district.
Its registered address is Wayanad District Co-operative Bank Ltd No.4357 head office Kalpetta
North Wayanad.

WAYANAD DISTRICT CO-OPERATIVE BANK
The bank selected for the study namely The Wayanad District Co-operative Bank Ltd
No.4357 is situated at Kalpetta and its operations extent to the whole of Wayanad district. It has
been able to make presence felt in a strong way in the district came into being 01-10-1982 soon
after the formation of Wayanad district in 1
st
November 1980.it is the youngest District co-
operative bank with 25 branches spread across the district, popularly known as Jilla Bank .
The bank has bagged the 1
st
price in implementation of Kissan Credit Card Scheme for the year
1999-2000. It is the first among District Co-operative banks in the state to finance self help
groups directly setting a role model for other to follow.



MAJOR FEATURES OF WAYANAD DISTRICT CO-OPERATIVE BANK

1. Top among all banks in Wayanad in agricultural financing.
2. Far among district co-operative banks in Kerala to issue Self Help Group loans.
3. 25 branches located at important centers of Wayanad district.
4. All banking services including locker facility.
5. Interest only for outstanding balance and 1% additional interest for senior citizen deposit.
6. The only district co-operative bank of the state which give direct loans to SHGs.
7. For women development, separate cells are opened to provide loans at % rebate of
interest rate.
8. Won best performance award from Govt. for implementing KCC scheme.
9. For better NPA management a recovery cell has been constituted at H.O under the
leadership of Deputy General Manager.
10. Grading of the branches according to their performance A,B,C&D.













OBJECTIVES
The main objectives of TheSS Wayanad District Co-operative Bank is to collect deposit
from members and non-member and to provide loans to them. The other objectives of bank are:
1. To provide a safe place for investing the reserves of the affiliated societies.
2. To carry on the business of the banking
3. To finance co-operative societies registered under the co-operative societies act in force
from time to time and admitted as a member of the bank.
4. To develop, assist and co-operative the work of affiliated societies.
5. To receive money from the Kerala state co-operative bank for purchasing shares in
affiliated societies.
6. To advance long term loans for the purchase and construction of building and issue of
medium term loans for purchase of vehicles for the employees of the bank.
7. To motivate the staff best branch award and business promotion awards.
8. To introduce special deposit mobilization plans.
9. To maintain a good audit system.
10. To maintain a good relation with the society in community development and rural
development programs.
11. To promote agricultural through augmenting farm credit, issuing agricultural lending.
12. To conduct various training programs for improving the quality and efficiency of
employees.

OPERATIONAL AREA

The head quarters of Wayanad district co-operative bank shall be at Kalpetta and its
operation shall extent to the whole of the Wayanad district.
BRANCHES
There were 3 branches worked at the time of formation of the bank. For providing more
services to its customers the bank opened various branches at different places in the district. All
the branches are computerized with uniform software. Now the bank has 19 ordinary branches
and 6 evening branches at three taluks of the Wayanad district i.e, Mananthavady, Sulthan
Bathery and Vythiry.



MANAGEMENT- CONSTITUTION OF THE BOARD
The management of Wayanad district co-operative bank ltd. Is vested in the board
of directors elected by general body. Subject to the provision of the act and rules of the final
authority of the bank shall vest in the general body. Quorum for a general meeting is 21
members. In which 18 are elected members and 3 directors are nominated by the government.
Board of directors consisting not more than 7 members. The board shall remain in office for a
period of 5 years. Board meetings are conducted minimum once in a month.



POWERS OF GENERAL BODY
The ultimate authority in all matters, relating to the administration of the bank shall be
the general body. The following matters, shall be dealt with the general body:
The program of activities for the ensuing year.
The removal of the elected members of the board of directors.
The approval of the annual budget of income and expenditure.
The annual report due to the registrar.
The amendment of bye-laws.
Disposal of net profit
The expulsion of a member









NOTICE OF MEETING OF GENERAL BODY

At least fortnights notice shall be given to all members before the meeting of general
body is convened.

Notice for a general body meeting may be given to the members by sending it by post
under certificate of posting.

If there is any irregularity in the serving of notice, it shall not invalidate the proceedings.


In the case of amendments bye-laws of the bank, notice shall be send to each of the
members in due time, and such notice shall give the members a reasonable clear idea of
the nature of the amendments proposed.






EMPLOYEE PATTERN

Banking is an area in which one quality of service depends upon the quality of the staff and
employees. The Wayanad district co-operative bank has 173 staff including a general manager
who is the chief executives of the bank.





Chart-3.1
STRUCTURE OF W.D.C.B LTD.























Board of Directors
President
General Manager
Deputy General
Manager
Inspector of Branches
(2)
Senior Manager (5)
Section Manager
Ex. Officers (3)
Agriculture Officer
(1)
Senior Accountant (3)
Junior Accountant
Record Keeper (1)
Typist (3)
Drivers (2)
Clerks (6)
Peons (3)

MEMBERSHIP

A Class Members: Every primary agricultural co-operative society working in the area of
operation shall be eligible for admission as A Class Members having voting power in the general
body meeting.
B Class Members: Govt. of Kerala and the Kerala State co-operative bank shall be eligible for
admission as B Class shares at such time and in such manner as may be agreed upon between
the bank or state govt. as the case may be.


SOURCES OF WORKING CAPITAL
The working capital represents as the fund used for the lending purpose of the bank. The
working capital of Wayanad district co-operative bank is raised from the following sources:
a) Share capital
b) Reserves
c) Deposits

`A Share Capital
The present capital structure of the bank consists of A class and B class shares.
The paid up share capital of the bank from 2009-10 to 2011-12 is given in the following
table:



Table. 3.1
Share capital of W.D.C.B ltd
Year Annual Paid up share
capital ( Rs in Lakhs)
Trend in percentage
2009-10 522.16 100
2010-11 552.46 105.80
2011-12 764.75 146.45

Interpretation: The above table showing an increasing trend of share capital from 2009-10 to
2011-12. The share capital was 522.16 lakhs in 2009-10 and it end 764.75 lakhs in 2011-12.
It is represented with the help of following diagram.

Fig.3.1
Share capital of W.D.C.B Ltd



0
100
200
300
400
500
600
700
800
900
2009-10 2010-11 2011-12
Chart Title
B Reserves
The profit retained separate is termed as reserve. In co-operative banks, there are two
types of reserves statutory reserve and non statutory reserve.

The following table shows the reserves of Wayanad district co-operative bank ltd.


Table no: 3.2
The Reserves of W.D.C.B Ltd
Year Amount of reserve
( Rs. in lakhs)
Trend in Percentage
2009-10 1319.71 100
2010-11 1277.82 96.82
2011-12 497.70 37.71

Interpretation: It can be seen from the above table, reserves of W.D.C.B Ltd, has a decreasing
trend.










It can be represented with the help of following diagram.


Fig.3.2
Reserves of W.D.C.B











0
200
400
600
800
1000
1200
1400
2009-10 2010-11 2011-12



C Deposits
Deposits are one of the main sources of fund of the bank. Bank receives idea savings
from the people in the form of deposits. Deposits may be any of the following types:
1. Current deposit: in case of current deposit money can be deposited and withdrawn at any
time by cheques. Usually bank does not allow any internet on this kind of deposits
because, bank cannot utilize this short term deposits. These types of deposits generally
opened by business men for their convenience.
2. Fixed / Time Deposit: These are made for a fixed period. These can be withdrawn only
after the expiry period for which the deposits have been made. The bank gives high rate
of interest on this deposit. The rate of interest depends upon the duration of deposits.
3. Savings deposits: As the name suggest, these deposits are mainly for the promotion of
saving and thrift among, in the case of deposits there are certain restrictions on the
number of withdrawals. It is permitted to 15 per half year.
4. Recurring deposits: In this type of deposits, at the end of every week or month affixed
amount can be withdrawn only after the expiry of the specified period. It may be opened
for monthly installments in sum of Rs. 5/- with maximum of in 1000/- the total amount is
repayable 30 days after the last installment within 30 days from the due date.
The deposits of the bank from 2009-10 to 2010-11 given in the following table:
Table no.3.3
The deposits of W. D. C. B Ltd,
Year Amount of Deposits
( Rs. In lakhs)
Trend in percentage
2009-10 23932.75 100
2010-11 26444.69 110.49
2011-12 31987.63 133.65

Intrepretation
Here we can see that the amount of deposit is increasing year by year, in W. D.C.B Ltd.
The deposits having an increasing trend in 2009-10 was 23932.75 lakhs and in 2010-11, it
reached to 26444.69 lakhs, and it increased to 133.65% in the year 2011-12.
Graf no. 3.3
Deposits of W. D. C. B Ltd

Types of Deposits of Wayanad District co-operative Bank Ltd
The W. D. C. B. Ltd receiving deposit in the form of FD, savings Deposits and current
deposits. The amounts of deposits at the beginning and at the end of the period are as follows;
Table no: 3.4
Types of deposits of W. D. C. B. Ltd (amt in lakhs)
Types Deposits as on 31-03-
2010
Deposits as on 31-03-
2011
Deposits as on 31-03-
2012
Fixed deposits 14080.17 15668.72 19097.34
Savings deposits 7896.80 8257.61 9173.90
Current deposits 1955.78 2518.35 1574.07
Money at all short
notice
2142.30
Total 23932.75 26444.68 31987.63

Interpretation
0
5000
10000
15000
20000
25000
30000
35000
2009-10 2010-11 2011-12
Here we can see that all types of deposits of W. D. C.B. Ltd are increasing year by year.
The above table shows that the bank accepts more deposits by way of fixed deposits than others.
Graph 3.4
Types of deposits of W. D. C.B Ltd


Profit
Profitability is an important index of the performance of the organization, an analysis of
the profitability of the banks provides an insight in to its effectiveness in the utilization of funds
and its managerial efficiency. The profits of the W. D. C. B. from 2009-10 to 2011-12 given in
the following table.
Table: 3.5
Profit of W. D.C. B Ltd
Year Net profit (Rs. In lakhs) Trend in percentage
2009-10 22.38 100
0
5000
10000
15000
20000
25000
01/01/10 01/01/11 01/01/12
Series 1
Series 2
Series 3
Series 4
2010-11 14.54 64.96
2011-12 61.68 275.60

Intrepratation
The above table shows a decrease in the profit of the W. D. C. B from 22.38 lakhs to
14.54 lakhs for the year 2010-11. In 2011-12, the bank earns highest profit as compared other
years. The profit of the bank is increased to 61.68 lakhs for the year 2011-12.
It can be representes with the help of the following chart.
Graph 3.5
Profit of W.D. C. B Ltd

Profit Distribution
As per by law No. 47, the profit distribution of the co-operative Bank is done in the
following manner:
1. 25% Reserve Fund
0
10
20
30
40
50
60
70
2009-10 2010-11 2011-12
2. Not less than 5% to co-operative Education Fund as per the Kerala State co-operative
societies Act.
3. 15 % to Agricultural can be used for any of the following

I.
a. Bad and Doubt reserve
b. Dividend Equalization Fund
c. Building Fund
d. Gratuity Fund
e. Investment Fund
f. Any other reserve as approved by the General Body meeting
II. Dividend not more than 20% to the members.
III. Not more than 7.5% to common good fund
IV. If any balance is available, that can be ploughed back to the reserve fund.
Non Performing assets
A part of loans and advances are not realized beyond the specified time, it is treated as
non performing asset (NPA)
According to RBI rules, any loan repayment which is delayed beyond 180 days specified
time limit has to be identified as on NPA. NPA are further classified into three i.e. substandard,
doubtful and loss assets.
Substandard assets are those which are non-performing for a period not exceeding two
years. Doubtful assets have reminded non-performing foe a period exceeding two years and
which are not considering as loss assets. A loss asset is one where loss has been identified but the
amount has been identified written off wholly or partly.
Causes of NPAs
1. Diversion / misutilisation of funds
2. In appropriate technology
3. Accidental and natural calamities
4. Viewful default / integrity of the borrower doubtful
5. Improper assessment & market demand
6. Lack of effective co-operation between borrower and banker
7. Political compulsion and corruption
8. Difficulty in execution of decreas obtained
Table 3.6
Non Performing Assets ( NPA)
Year Amount of NPA (Rs
in lakhs)
Annual income or
decrease
Trend in percentage
2009-10 1701.56 0 100
2010-11 1492.09 209.47 87.68
2011-12 1153.10 338.99 67.76

Interpretation
In the year 2011-12, net NPA stood at 67.76 %. It is very lower than the previous years.
The above table shows a decreasing trend in the case of NPA and it is a good sign for the bank.
Graph No. 3.6




GENERAL FUNCTION OF WAYANAD DISTRICT CO-OPERATIVE BANK LTD
Like any other bank, the functions of W. D. C. B are grouped as follows:
a. Primary Function
b. Secondary Function
0
200
400
600
800
1000
1200
1400
1600
1800
2009-10 2010-11 2011-12

A . primary fuctions:
The main functions of W.D.B.C.B are deposits mobilasation and providing loans and
adavances.
a)Deposits mobilization :
Deposits are one of the main sources of finance of the bank
and provides high rate of interest for these deposits .Deposits may be recived at any time
with in the limits sanctioned under the co-operative act and rules on such rate of interest
and subiect by the Board of directors and also subject to the derivatives issued by the RBI
in the behalf from the

b) Providing loan and advances :

Wayand District co0opreative bank provides various kinds of loans to differnnt
groups of societies. All the loans advanced by the bank beneficial to all in ways. Agricultural
loans Gold loans medium term , consumption lons rural housing loans, consumer loans, self
help loans etc. are some amoung the loans provided by the bank.

B. Secondary function
The secondary fuction of the bank are agency services and
general utility services. The secondary fuction of WDCB are as follows .
a) It provides banking facilities such as collecting bills disconnecting bills, providing
remittance facilities and draft facilities etc..
b) Promote agriculture through augmentry form credit, issuing KCCs and increasing
agricultural lending.
c) Providing insurance coverage to KCC holden
d) Conducting seminar for self help groups and KCC holders
e) Formation of farmers clubs at all branches and also at PACSs.
f) As a part of human recourses development, various traning programs are conducted
g) Special deposit mobilization plans are introduced.
h) Maintaining suggestion / complaints boxes at branches
i) For creating saving habit among the emerging society, students, SB compaign is conducted .
j) Get together of all staff and family members ones in a year.

Borrowing

It shall be competent for the Board of Directors to borrow funds
otherwise than by way of deposits, either from members or from persons, other then
members or body corporate.

Audit System
On the basis if the degree of efficiency of each parameter like
capital adequancy , asset quality management, earnings and liquidity system, the audit
system of W.D.C.B is classified as A audit classifiacation. All records of the bank should
be audited by the co-operative departments of the state govt. Then , the additional registrar
of co-operative societies and joint registrar /concurrent auditor appointed by the W.D.C.B to
audit the accounts and other records of the bank.

Types of Loans

Gold loan: The maximum amount of loan
MT-consumption loan: It is granted for the purpose of education, house maintenance,
marriage and medical treatment.
MT- plantation loan : Granted for the purpose of plantation.
Rural housing loan: Allowed for the purpose of construction of houses.
SHG/SGSY Loans : Loan to selg help groups and swarnajayanthi Gram swareksha
yojana.
Consumer loans: For buying consumer durables such as T V Refrigerators etc.
SRTO/Vehicle loans: Demand promissory notes loans on the basis of promissory notes.
Other loans : such as cash credit to individual and others.

Restrictions on loans :
The bank not lend to any society, any sum with which that society other indebtedness,
wide exceed the societys maximum borrowing power as fixed ints bye-laws.
Loans to depositors on the security of their fixed deposits in the bank may be granted not
exceeding 90% of the amount of sum deposits.

Period of loans:
Except in the case of loans under bye-law 36(3) the period of laons given by the banks
shall not ordinarily exceed 5 years .
The period of repayment of each loan shall be fixed by the executive committee
according to the purpose of loan.
A cash credit sanctioned to a member shall be in force for one year only terminable only
on 31. December each year. An application should be made in too time for renewable of
the each credit.

Loans And Advances of W.D.CB
The following table shows the loan and advances providing
by W.D.C.B.







Loans and advances of W.D.C.B. Ltd. (Amount in lakhs)

Types Loans
And advances on
31-03-2010
Loans
and advances on 31-
03-2010
Loans
and advances on
31-03-2010
Short -term loan

15848.28 20835.59 26734.43
Medium
-term loan
3480.79 20835.59 4588.26
Long-term loan

2812.76 7113.86 6740.21
Total 22141.83 31843.42 38062.9

Table3.7

Interpretation:

This table show the total and advances provided by W.D.C.B.
during the year 2010 to 2012. In 2009-2010 the total loans and advances provided by the
bank were 22141.83 lakhs. During 2010-2011 it was increased to 31843.42 lakhs and
during 2012, it is further increased to 38062.9 lakhs .
It can be shown with the help of following diagram.






Security of loans :
Loan and cash credits may be secured on one or other of the following
methods namely:

On the promissory note of a society executed by person authorized to do so.
On the security or the fixed deposit , if any to the credit of the borrowers.
0
5000
10000
15000
20000
25000
30000
short term loans medium term loans long term loans
31-03-10
31-03-11
31-03-12
In the pledge of government provisionary notes or central land mortgage bank debentures
not exceeding 90%of their market value.
On the security of agricultural produce or finished products subjects to the terms and
conditions specified by the board and approved by the registrar.
On the security of gold jewels wholly belonging to their market value of the wiling fixed
by the registrar from time to time.


CHAPTER-4

FINANCIAL ANALYSIS

The analysis of financial statements provides valuable information for managerial
decisions. Financial analysis is commonly called analysis and interpretation of financial
statements. Analysis of financial statements means establishing relationship between the items in
financial statements for determining the financial strength and weakness of the business.
Interpretation is the process of explaining the real significance of the simplified data.
Both analysis and interpretation are complimentary to each other. Analysis is useless without
interpretation becomes difficult without analysis.

OBJECTIVES OF ANALYSIS

The following are the important objectives of analysis and interpretation of financial
statements;
1. An in depth study of each item is the main objective of analysis.
2. To converting the data into an easily understandable manner.
3. To comparing the data of various periods by using the tools like comparative analysis,
ratio analysis and trend analysis.
4. To estimate the earning capacity of the business.
5. To access the financial position and financial performance of the business.
6. To decide about the future prospects of the firm.






Financial analysis is done by using the following statistical tools;
1. Comparative analysis
2. Ratio analysis
3. Trend analysis

1. RATIO ANALYSIS
Ratio simply refers to one number expressed in terms of another number. It shows
numerical relationship between two figures. It is found by dividing one number by the other
number. Ratios are expressed in three ways in times, in percentage, and in terms of
proportion.
Ratio analysis is a widely used technique of analyzing financial statements. An
analysis of financial statements with the help of ratios is termed as ratio analysis.
(1) The Loan and Advances of Percentage of Deposits
This ratio establishes the relationship between loans and advances provided by the
bank and total deposits collected. This will indicate the number of times the deposits are
turned to loans and advances

The loan and advances as percentage of deposits = Loan and advances / Deposits


Table 4.1
Loan and advances as percentage of deposits
Year Loans and Amount of Ratio(Times)
advances(Rs in lakh) deposits(Rs in lakh)
2009-10 22141.84 23932.75 0.92
2010-11 31843.42 26444.69 1.20
2011-12 38062.91 29845.32 1.27

Intrepretation: It can be seen that, the ratio was 0.92 during the year 2009-10 and increased
to 1.2 and 1.27 in 2010-11 and 2011-12 respectively.




Intrepretation:
It can be seen that, the ratio was 0.92 during the year 2009-10 and increased to 1.2 and
1.27 in 2010-11 and 2011-12 respectively.
(2) Interest Earned as Percentage of Loan and Advances
0
5000
10000
15000
20000
25000
30000
35000
40000
2009-10 2010-11
Loans and advances(Rs in lakh)
Amount of deposits(Rs in lakh)
Ratio(Times)
This ratio shows the relationship between total interests earned by providing loan and
advances. As interest is the main source of income of the bank, this ratio indicates the rearing
capacity and effective utilization of funds of the bank

Interest earned as percentage of loan and advances =
Interest earned for the year/Loan and advances

Interest earned is the total interest and discount realised by the bank in each year on the
loan and advances.
Loan and advances are the amount provided by the bank to the public for a fixed rate on
interest. The loan and advances are provided for different purpose and for different periods like
short term, medium term, and long term.

Table 4.2
Interest Earned as Percentage of Loan and Advances
Year
Interest earned
(Rs in lakh)
Loans and advances
(Rs in lakh)
Ratio
(Times)
2009-10 1473.27 22141.84 0.06
2010-11 3301.27 31843.42 0.1
2011-12 4564.32 38062.91 0.12

Intrepretation:
This table shows the amount of interest earned by the W.D.C.B is against the loan and
advances during the years from 2009-10 to 2011-12.The ratio of interest shows an increasing
trend. The bank earned interest of 0.12 as against loan and advances in the last year


(3) Interest Paid as Percentage of Deposits
The ratio provides information about the interest paid on different types of deposits.

Interest Paid as Percentage of Deposits = Interest Paid For the Year / Deposits

Table 4.3
Interest Paid as Percentage of Deposits
Year Interest Paid
(Rs in lakh)
Amount of Deposit
(Rs in lakh)
Ratio
(Times)
2009-10 1732.75 23932.75 0.07
2010-11 2317.66 26444.69 0.08
2011-12 3374.88 29845.32 0.11

Intrepretation:
The above table shows the ratio of interest paid by the bank to deposits during the yers
from 2010 to 2012.The ratio of interest paid shows an increasing trend.
0
5000
10000
15000
20000
25000
30000
35000
40000
2009-10 2010-11 2011-12
Interest earned
(Rs in lakh)
Loans and advances
(Rs in lakh)
Ratio
(Times)



CHAPTER 5

FINDINGS AND SUGGESTIONS

FINDINGS
Assets and liabilities of the Wayanad District Co-operative Bank Ltd. show an increasing
trend during the last 3 years proportionally.
Deposits of the W.D.C.B Ltd increasing very speedy, it is a good indication for the bank.
Profit of the bank is 61.68 lakhs during the last year (2011-2012)
Share capital of the W.D.C.B Ltd showing an increasing trend up to 764.75 lakhs.
Reserve funds of the bank has a decreasing trend at the last 3 years proportionally.
Wayanad District Co-operative Bank Ltd. provides high rates of interest to their fixed
depositors.
The loan allowed to societies, individuals and employees are shows an increasing trend.
Thus we can assume that the bank considers its customers in a fair manner.
interest paid(Rs in lakh)
2009-10
2010-11
2011-12
The recovery position of the loans are very weak became most of the loans are given for
the agricultural purpose; sudden loss occurred in the agricultural sector affects the re-
paying capacity of loan holders. Therefore, the bank has to take proper decision regarding
granting of loans.
To help the farmers, Kissan Credit Card and self help group, loans are given to them to
improve their standard living.
Bank has given special emphasis to education loans, women development, housing loans
to help the poor people to come forward in different areas.

SUGGESTIONS
The Wayanad District Co-operative Bank should maintain good relation with its
customers to attract them to approach the bank for their requirements.
The employees of the bank should be given proper training and information to work as
per the changing scenario.
The bank should inform the public about various new deposits and loan schemes
available in the bank.
The bank should take proper steps to increase its deposit mobilization at an increasing
rate. Now its increase is at a very low rate.
Bank should take initiative to collect more deposits from small and medium investors and
others.
Recovery position of the bank is unfavorable to the bank. So proper care must be given
for timely recovery of overdue loans.
ATM counter should be opened in suitable places to facilitate the customers.
Core banking should be introduced in the bank to facilitate the easy banking operation.
For further expansion, it should open more branches at different places.
Proper measures should be taking to manage the NPA of the W.D.C.B Ltd.
New schemes of providing and repaying agricultural loans should be introduced by the
bank to save poor agriculturists of the Wayanad district.
CONCLUSION
After completing my project in Wayanad District Co-operative Bank Ltd, I concluded that
the bank function well in its deposits mobilization, granting loans and advances and net profit. It
performs an important role in the district usually Wayanad is one of the backward district in
Kerala. In such circumstances, the W.D.C.B provides various kinds of services to its customers
to come forward.
It can be understand that the bank provides different kinds of loans to different loans are
groups in the district. But the recovery position of the loans is very weak. The profitability of the
bank is also increasing year by year. Deposits of the bank increasing very speedy, it is a good
indication for the bank. We can say that the bank helps to increase the saving habits of the people
in our district.
In short, the overall performance of the Wayanad District Co-operative Bank in a
satisfactory level and auditors shows satisfactory on maintaining books of accounts in the bank.
BIBLIOGRAPHY
Management Accounting A. Vinod (2011)
Management Accounting I. M. Pandey (2003)
Co-operative societies in Kerala P.N. Mohanan (2007)
Banking theory and practice A. Vinod (2007)
Banking theory and practice Dr. K. Nadarajan (2005)
Bye-laws of Wayanad District Co-operative Bank Ltd.
Final Accounts of W.D.C.B Ltd.
Audit Books of W.D.C.B Ltd.