A STUDY ON FUNCTIONS, ADMINISTRATION

STRUCTURE AND FINANCIAL STABILITY OF

MUKKAM SERVICECO-OPERATIVE BANK

Project report submitted to the University Of Calicut

In partial of the requirement for the award of the

degree of BACHELOR OF COMMERCE

Submitted By,
ADHISH. P
(Reg. No. OMAOBS0091)
2014-2017

1
 DECLARATION

I,ADHISH. P B.Com sixth semester studying under University of Calicut do

here by declare that my project report entitled A study on Functions,
Administration structure and financial stability of Mukkam Service Co-
operative Bank submitted to University of Calicut, as the part of my B.com degree
completion, is the result of original work

I have not submitted the same for the award of any degree, diploma or any recognition
before. All the data both primary and secondary are true to the best of my knowledge.

Place : Mukkam ADHISH. P

(OMAOBS0091)

Date :

2
 ACKNOWLEDGEMENT

With great pleasure, I am presenting this project entitled A studyOn

Functions, Administrative structure and Financial stability of Mukkam Service
Co-operative Bank. The satisfaction associated with the completion of this endeavor is
incomplete without mentioning those who have supported during the course of this
project.

First of all let me extended my whole hearted thanks to God Almighty for
giving me an opportunity and good health for the successful completion of this project
work

I would like to express my gratitude towards my beloved parents, brothers,

teachers and friends for their constant encouragement and suggestion all along the way.

ADHISH. P

(OMAOBS0091)

3
 LIST OF CONTENTS

SL.NO Title Page No

List of tables

List of charts

1 CHAPTER 1

INTRODUCTION

1.1 Introduction

1.2 Objectives

1.3 Scope of study

1.4 Research Methodology

1.5 Period of study

1.6 Limitation of study

2 CHAPTER 2

INDUSTRIAL PROFILE

2.1 Origin of Co-operative banking

2.2 Role of co-operative banking in India

3 CHAPTER 3

COMPANY PROFILE

3.1 Background of the company

3.2 The non-banking business activities in

Mukkam Service Co-operative Bank

3.3 Organization Structure

4
 3.4 Vision

3.5 Mission

3.6 Style of the organization

4 CHAPTER 4

CONCLUSION

Findings

Suggestions

Conclusion

BIBLIOGRAPHY

APPENTIX

5
LIST OF TABLE AND CHARTS

SL. NO Title Page

No
1 The branches of Mukkam Service Co-operative Bank
2 Organization structure of Co-operative Bank
3 Responsibility & Authority
4 Gross Profit Ratio
5 Net Profit Ratio
6 Profit and Loss Account
7 Balance Sheet

6
 CHAPTER 1

INTRODUCTION

7
 1.1 INTRODUCTION

A Co-operative bank, as its name indicates is an institution consisting of a number

of individuals who join together to pool their surplus savings for the purpose of
eliminating the profits of the bankers or moneylenders with a view to distributing the
same amongst the depositors and borrowers. The Co-operative Banks Act, of 2007
(the Act) defines a co-operative bank as a co-operative registered as a co-operative
bank in terms of the Act whose members

1. Are of similar occupation or profession or who are employed by a common employer

or who are employed within the same business district; or

2. Have common membership in an association or organization, including a business,

religious, social, co-operative, labour or educational group; or

3. Have common membership in an association or organization, including a business,

religious, social, co-operative, labour or educational group; or

4. Reside within the same defined community or geographical area.

CO-OPERTIVE BANKING - AN INTRODUCTION:

Co-operative bank, in a nutshell, provides financial assistance to the people with

small means to protect them from the debt trap of the moneylenders. It is a part of vast
and powerful structure of co-operative institutions which are engaged in tasks of
production, processing, marketing ,distribution, servicing and banking in India. A co-
operative bank is a 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 a
common interest. These banks generally provide their members with a wide range of
banking and financial services (loans, deposits, banking accounts). Co-operative
banks differ from stockholder banks by their organization, their goals, their Values and
their governance. The Co-operative Banking System in India is characterized by a

8
relatively comprehensive network to the grass root level. This sector mainly focuses on
the local population and micro- banking among middle and low income strata of the
society. These banks operate mainly for the benefit of rural areas, particularly the
agricultural sector

1.2 OBJECTIVES

Primary objective

To study the organization

Secondary objectives

The Objective of the study is to know the origin of Co-

operative Bank
To know the role of Co-operative Bank.
To know the importance of Co-operative Bank.
To know the types of Co-operative Banks.
To know the Development of Co-operative Banks .

1.3 SCOPE OF STUDY

The study on functions, administration structure and financial stability of

Mukkam Service co-operative Bank provides various information to manufacturer and
which will help to improve their strategies. There has been an honest effort from the
part of the researcher to consolidate the results and suggest a few recommendations,
which may be useful to this study.

9
1.4 RESEARCH METHODOLOGY

Research methodology is a scientific systematic way to solve research

problems. Researcher has to design his methodology. Research methodology deals with
research methods and takes into consideration the logic behind the method.

TYPES OF RESEARCH

DESCRIPTIVE RESEARCH

Here the descriptive form of research method is adopted for study. The major
purpose of descriptive research is description of state of affairs of the institution as it
exists at present. The nature and characteristics of the financial statements of the
financial statements of MUKKAM SERVICE CO-OPERATIVE BANK LTD has been
described in this study.

NATURE OF DATA

The data required for the study has been collected from secondary source. The
relevant information was taken from balance sheet, profit and loss statement, journals
and internet.

METHODS OF DATA COLLECTION

This study is based on the annual report of KARASSERY SERVICE CO-

OPERATIVE BANK LTD., CALICUT. Hence the information related to profitability,

10
short term and long term solvency and turnover were very much required for attaining
the objectives of the present study. In order to fulfill the objectives of the study the data
has been collected from both

Primary Data
Secondary Data

a) Primary Data

To generate primary data for the analysis, direct personal interview and
discussion was made company assistant manager of finance, accounts and other
officials. The data collected from the interview are coordinated and analyzed in
an integrated fashion throughout the dissertation.

b) Secondary Data
Secondary data refers to the information or facts already collected such
data are collected with the objectives of the past status of any variable or the data
collected and reported by some source is accessed and used for the objective of a
study. Normally in research the scholars collect published data balance sheet,
profit and loss account loan statement, journals and internet.

c) External Secondary Data

d) RBI circulars, manuals, journals and magazines, libraries and internet sources
of external secondary data and text books.

SAMPLING DESIGN

Selection of sample from overalls populations is called sampling and the

procedure of selection of sample is termed as sample design.

The study conducted is descriptive study.

Plan of analysis
The conducted is descriptive study. The data collected was
classified and tabulated for the study. The analyzed data are

11
 represented in the form of tables and graphs, making use of statistical
tools such as averages and percentages for the better understanding.

Based on the analysis and findings the suggestions and

recommendations provided to the bank for arresting existing loans and
advances. And prevent reemergence loans and advances.

TOOLS APPLIED

To have meaningful analysis and interpretation of various data collected. The

following tools were made for this study.

1. Ratio analysis
2. Common Size Statement
3. Comparative statement

1.5 PERIOD OF STUDY

21 days are used for the study

1.6 LIMITATION OF STUDY

The rules and regulation affect the study
This study is based on the data of past three or four years only
The time period of the research was limited
The data for study mainly based on a single bank

12
 CHAPTER 2
INDUSTRIAL PROFILE

13
 2.1 ORIGIN OF CO-OPERATIVE BANKING:

The beginning co-operative banking in India dates back to about 1904, when
official efforts were made to create a new type of institution based on principles of co-
operative organization & management, which were considered to be suitable for
solving the problems peculiar to Indian conditions.

The philosophy of equality, equity and self help gave way to the

thoughts of self responsibility and self administration which resulted in

giving birth of co-operative. The origin on co-operative movement was one

such event-arising out of a situation of crisis, exploitation and sufferings.

Co-operative banks in India came into existence with the enactment of

the Agricultural Credit Co-operative Societies Act in 1904. Co-operative

bank form an integral part of banking system in India. Under the act of 1904,

a number of co-operative credit societies were started. Owing to the

increasing demand of co-operative credit, anew act was passed in 1912,

which was provided for establishment of co-operative central banks by a

union of primary credit societies and individuals. Co-operative Banks in India are

registered under the Co-operative Societies Act. The cooperative bank is

also regulated by the RBI. They are governed by the Banking Regulations
Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

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 OPERATION OF CO-OPERATIVE BANKING:
Co-operative bank performs all the main banking functions of
deposit mobilization, supply of credit and provision of remittance
facilities.
Co-operative Banks belong to the money market as well as to the
capital market.
Co-operative Banks provide limited banking products and are
functionally specialists in agriculture related products. However,
cooperative banks now provide housing loans also.
UCBs provide working capital loans and term loan as well.

Establishments:

The chief functions of Co-operative banks are:

a. To attract deposit from non-agriculturist,

b. To use excess funds of some societies temporarily to make up for

shortage in another,

c. To supervise and guide affiliated societies.

The basic principles on which a Co-operative bank works are:

A co-operative character of activities and trait of mutual aid of credit

granted.
Catering for collective organizations and their members.
Restriction on the number of individual votes.
As a result, during 2007-08, the Primary Cooperative
Agriculture and Rural Development Banks have again started lending
for the Non-Farm Sector including Jewel Loans.Aiming at high rates
on deposits and low rates on lending.

15
 Limitation of dividends out of profits and bonus to depositors and
borrowers or grants to cultural or co-operative endeavor.
These banks are constituted of voluntary association, self-help and
mutual aid, one share one vote and non-discrimination and equality of members.

The co-operative banks are the organizations of and for the

people.

2.2 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 programs for poor.
The Co-operative banks in rural areas mainly finance agricultural
based activities like:

Farming
Cattle
Milk
Hatchery
Personal finance

16
The Co-operative banks in urban areas finance in activities like:
Self-employment
Industries
Small scale units
Home finance
Consumer finance
Personal finance
Some of the forward looking Co-operative banks have developed
sufficient core competencies to such an extent that they are able to challenge
state and private sector banks.
The exponential growth of Co-operative banks is attributed mainly to
their much better contacts with the local people, personal interaction with
customers, and their ability to catch the nerve of the local clientele. The total
deposits and landings of Co-operative banks are much more than the Old
Private Sector Banks and the New Private Sector Banks.

IMPORTANCE OF CO-OPERATIVE BANKING

Co-operative bank forms an integral part of banking system in India.

This bank operates mainly for the benefit of rural area, particularly the
agricultural sector. Co-operative bank mobilize deposits and supply
agricultural and rural credit with the wider outreach. They are the main
source for the institutional credit to farmers. They are chiefly responsible for
breaking the monopoly of moneylenders in providing credit to agriculturists.
Co-operative bank has also been an important instrument for various
development schemes, particularly subsidy-based programs for the poor.
Co-operative banks operate for non-agricultural sector also but their role is
small.
Though much smaller as compared to scheduled commercial banks,
co-operative banks constitute an important segment of the Indian banking
system. They have extensive branch network and reach out to people in
remote areas. They have traditionally played an important role in creating

17
banking habits among the lower and middle income groups and in
strengthening the rural credit delivery system.

HISTORY OF CO-OPERATIVE BANKING

The origins of the cooperative banking movement in India can be
traced to the close of nineteenth century when, inspired by the success of the
experiments related to the cooperative movement in Britain and the
cooperative credit movement in Germany, such societies were set up in
India.
Now, Co-operative movement is quite well established in India. The
first legislation on co-operation was passed in 1904. In 1914 the Maclagen
committee envisaged a three tier structure for co-operative banking viz.
Primary Agricultural Credit Societies (PACs) at the grass root level, Central
Co-operative Banks at the district level and State Co-operative Banks at
state level or Apex Level.
In the beginning of 20th century, availability of credit in India, more
particularly in rural areas, was almost absent. Agricultural and related
activities were starved of organized, institutional credit. The rural folk had to
depend entirely on the money lenders, who lent often at usurious rates of
interest.

The co-operative banks arrived in India in the beginning of 20th

Century as an official effort to create a new type of institution based on the
principles of co-operative organization and management, suitable for
problems peculiar to Indian conditions. These banks were conceived as
substitutes for money lenders, to provide timely and adequate short-term and
long-term institutional credit at reasonable rates of interest.
The Anyonya Co-operative Bank in India is considered to have been
the first co-operative bank in Asia which was formed nearly 100 years back
in Baroda. It was established in 1889 with the name Anyonya Sahayakari
Mandali Co-operative Bank Limited, with a primary objective of

18
providing an alternative to exploitation by moneylenders for Baroda's
residents.
In the formative stage Co-operative Banks were Urban Co-operative
Societies run on community basis and their lending activities were restricted
to meeting the credit requirements of their members. The concept of Urban
Co-operative Bank was first spelt out by Mehta Bhansali Committee in 1939
which defined on Urban Co-operative Bank . Provisions of Section 5 (CCV)
of Banking Regulation Act, 1949 (as applicable to Co-operative Societies)
defined an Urban Co-operative Bank as a Primary Co-operative Bank other
than a Primary Co-operative Society were made applicable in 1966.
With gradual growth and also given philip with the economic boom,
urban banking sector received tremendous boost and started diversifying its
credit portfolio. Besides giving traditional lending activity meeting the credit
requirements of their customers they started catering to various sorts of
customers viz.self-employed, small businessmen / industries, house finance, consumer
finance, personal finance etc

19
 CHAPTER 3

COMPANY PROFILE

20
 3.1 BACKGROUND OF THE COMPANY

Mukkam service Co-operative Bank

The mukkam service co-operative bank was established in the year 1946
as a primary consumer credit society as per 1932 Madras providence act , under
leadership of Velayudhan compounder with 100 members .This act was enforced in
Malabar area until the passing of Kcs act 1969.The main aim of this society is to
distribute the essential food grains through public distribution system, to promote the
habit of trift and self help among members.

This society is registered as a bank on 2 may 1956 with RS 5000 as a

authorized share capital. The bank located near famous Mukkam market.Now it has
five branches one at Kalluritty,Vennakode,Manassery and evening branch Mukkam.
The present president Appukuttan.N and secretary PP.Pankajakshan

The bank has played a significant role in the economic development of

the society over years. It has contributed several development plans and programs in
the agricultural sector, by helping the farmers to adopt new method of farming by
providing those fund for various agricultural purposes. The society distributed various
type of fertilizers to members at a reasonable rate

3.2 The Non Banking Business activities in Mukkam Service Co-operative Bank

1. Textiles Supermarket

The textiles yearly average turnover is 40 lakh rupees .The bank is

operating this firm employees liability system. The supermarket bench is
Mukkam city.

2. Railway reservation counter

21
 The railway reservation counter starts for the help of Mr,
SHANAVAS.Here is issuing the railway ticket reservation. The office placed in
Mukkam, near the bank office
3. Neethi medicals store
A 9 to 6 hour neethi medical store has situated in Mukkam, near by
Mukkam service bank .providing allopathic medicines at discount rate.

4. Fertilizers shop
In Mukkam service co-operative bank is providing the service for farmers in
Mukkam region .The products are selling in discount rate, it is situated in PC
Junction on Mukkam.

THE BRANCHES OF MUKKAM SERVICE CO-OPERATIVE BANK

HEAD OFFICE THE MUKKAM SERVICE CO-OPERATIVE BANK,

MUKKAM(PO),CALICUT
KALLURUTTY KALLURUTTY,CALICUT
MANASSERY MANASSERY,CALICUT
VENNACODE VENNACODE,OMASSERY,CALICUT
EVENING MUKKAM(PO),CALICUT
BRANCH

Name :Mukkam C0-operative Bank

Ltd.No.f.1241.Mukkam
Kozhikode Thaluk,Kozhikode District
Date of Registration :2 May 1956
Areas of operation :Mukkam Municipality
Population covered :Above 2 lakh
Branches :Kalluritty,Vennakode,Manassery
Liability :Limited to paid up share capital

SHARE CAPITAL

Mukkam Service Co-operative Bank has a total share capital of

Rs.10194295.50, which include RS.7469259.50s A class share and RS

22
 52046.00s b class shares and RS 677000.00s as C class shares and RS
1995990.00s D class shares

3.3 ORGANISATION STRUCTURE OF MUKKAM SERVICE CO-

OPERATIVE BANK LTD

Secretary

Assistant Secretary/Chief Accountant

Internal Auditor/Branch Manager

Accountant Accountant Accountant Accountant

Senior Clerk

Junior Clerk
Junior Clerk
Typist

Attender Attender

Sales Man Sales Man

Peon Peon Peon Peon

Night Watchman

23
NATURE OF BUSINESS CARRIED

Co-operative banking has certain characteristics features of its own .The important
features of Co-operative banking is,

Acceptance of deposits and lending funds.

Established under The Kerala Co-operative Societies Acts 1969.
An association of persons, and not of capital.
It raise the capital by issuing shares ,accepting deposits and direct borrowings
from outside ,owned funds and borrowings from higher forms of Co-operative
financial organizations constitute an important part of their working capital.
It is generally federal in structure.
It is a democratic institution, in the sense that it follows the principle of one
man one vote in their management.
It is based on the principle of mutual help.
Service and not profit is the main motto of the Co-operative banks.
Co-operative Bank at bottom level depended on honorary service of members.
Co-operative Banks mainly agriculture and allied activities.
Co-operative Bank are basically rural oriented

STRENGH

Good customer Service which leads to good relationship with customers.

Loans for small scale agricultural and non agricultural works, which leads
to development of Municipality.

24
 WEAKNESS
Relatively very low cash flow
Restricted to only perticular area
Absence NRI accounts

OPPORTUNITIES

Scope for agro and food based industries.

New products like vehicle loan, foreign visa fecility provider for the
market development.
Increasing the cash flow by maintaining good relationship with micro
institutions like Kudumbasree.
Other self help groups.
THREATS

The Industrialisation of the district may affect ecology and environment of the
district.
Seasonal effect changes in the season will affect the agricultural
developments.
District Co-operative Banks trying to reduse financial assistance.

3.4 VISION
To be a socially responsible and benchmarked financial institution in the Co-
operative sector by offering quality banking services for socio-economic devolopment
of the community we serve.

3.5 MISSION
Mission of the Co-operative Bank is CO-OPERATIVE, It refers to;
C -Concern for the people & commitment to social development .
O Offer best quality banking services .
O-Operational accessibility to all.
P-People friendly product and activities.
E-Ethics and justices to customers.

25
 R-Responsibility towards down trodden
A-Acceptance and accommodation of haves and have nots.
T-Technological up gradation and advancement.
I-Innovation and excellence.
V-Vibrant and proactive banking institution.
E-Empower the masses and enrich the society.
The mission of Mukkam Co-operative bank is to become an admirable leading
Co-operative bank in the country by offering innovative and affordable banking
services to our valued member
SERVICES
Apart from the main function of accepting deposit and granting advances, a
banker also performs a number other services to customers. Such services are called
by subsidiary, and ancillary services, a banker will be able to earn the goodwill of his
customers and attract fresh customers. The subsidiary services of a banker may be
classified into two classes. They are,

AGENCY SERVICE
The service rendered by a banker as an agent of his customer is called
agency services. Services rendered by a banker are as follows:
Collection of money on behalf of customers understanding
instructions.
Collection and payment of pensions.
Acting as an agent of coir board.
Arranging for remittance of funds behalf of customers.
Acting as trustee, Executer, Administrator attorney of customers.

OTHER SERVICES:

Providing subsidized fertilizers to farmers through farmers center.

Act as an agent of coir federation.
Supply of tiles, cement and other materials for construction.
Providing subsidized consumer goods through Neethi stores and
consumer stores.

26
3.6 STYLE OF THE ORGANISATION

Style refers to the central style of the organization and how key
managers behave in achieving the organizations goals. The working
style of the Co-operative Bank is as follows:

Building good coordinations between employer and employee

in the organizations.
Providing better services to customers.
Creating good working atmosphere.
MEETING

The Board Meeting will be held on every month, the bord meeting for
discussing and deciding on the following matters.

1.Sanctioning of loan
2.Problems relating to staff disciplinary actions
3.Employees Appointment
4.Profit and Loss
5.Audit Report
6.Registars Circulars
7.Government Orders
8.Future programs of the bank
9.Day to day working of the bank
10.The current affairs of the bank
The final accounts of the bank are approved by the Board of Directors
followed by the Auditors report and presented before Annual general Body
Meeting after the approval of I the Board of Directors.

BOOKS TO BE MAINTAINED BY THE BANK

In the books of bank accounting record is maid accounting to

slip system following books are mostly used in Mukkam service Co-operative Bank

1.Day book

27
 2.General Ledger

3.Recipts and disbursement

4.Trial balance

5.Cash Reserve

6.Cheque Book issue register

7.Monthly Balancing Register

8.Share Register

9 .Postage Registers

10 .Register of ( Current Account, Fixed Account, Savings Account, Recurring

Account )

11. Loan Account Ledger

12 .Income and Expenditure Account

13. Loan Application Register

14. Current Account Overdraft Register

15. Investment Register

16. Balance sheet

RESPONSIBILITY AND AUTHORITY AT EACH LEVEL

Sl. No DESIGNATION PRIMARY OTHER

1 General Body
2 Board of Directors
RESPONSIBILITY
The apex authority on the
Bank as per BYELAW
CL12&ACT&RULE
They have the responsibility
to make policies and take
decisions on all the matters
concerning the functions of
the Bank as per BYELAW
CL27 & ACT & RULE
RESPONSIBILITIES
Responsible for the
formulation
authorization of the
quality policy of the
Bank

28
3 President He is the head of the Board
and chairs the meetings of
the Board and the General
Body of members as per
BYELAW CL27 & ACT &
RULE
4 Secretary All the duties and
responsibilities conferred
under the Kerala State Co-
operative Acts and Rules,
BYE LAWS CL 29 and sub
rules of the Bank. He is the
first person directly
responsible and answerable
to the Board of Directors.
The general administration
of the affairs of the Bank
rests with hint
5 Assistant Secretary The day- to - day running of
the Bank concerned with the
transactions with the
customers He has act on
secretarys behalf on
delegation and his absence
6 Chief Accountant Prepare datas for final audit
and checks and verifies
audit.
7 Internal Auditor Conduct internal audit
before statutory audit and
assist and prepares various
list for statutory audit
8 Brach Managers Custodian of cash and stock
at branches. Monitoring
Deposits, Loans, NPA and
prepare final report to HO.
He/ She is responsible for
data back up and strong
room access control
9 Operating staff Operating all sections of
deposits, loan to arrange for
the functioning of teller
counter. Assist branch
manager in preparation of
29
He is the
Management
Representative. It is
duty to convene all
kinds of meeting
from staff meeting to
the General Body. He
has overseen and led
the financial
development of the
Bank.
AMR Additional
duties delegated by
secretary.
Additional duties
delegated by
secretary
Additional duties
delegated by
secretary
Additional duties
delegated by
secretary
Additional duties
delegated by
Secretary and Branch
Manager. Check/ sent
mails and postages
 all financial statements. including notices to
Systematic maintenance of customers
daily RV files ,forms

MEMBERSHIP

There are four type of membership are given in the society A class
B class, C and D class shares. A class membership is given only through
the board of directors of the society. The qualification for A class share
holders is his living or working is the jurisdiction of the societies. B class
shares is given only the government institutions. C class membership is given
for gold loan purpose, D class share is given those person who are
businessmen or sell employed person working or living in Kozhikode
corporation area

MANAGEMENT
The management of The MUKKAM SERVICE CO-OPERATIVE
Bank is run by the board of management. The board of management
consisting 10 members of which one shall be reserved to a member belonging
to scheduled Cast/ Scheduled Tribe and one shall be reserved to a member
belonging to women. The Board of Management shall have powers to
determine the scale of establishment necessary for the administration of the
bank. They shall have power from time to time to make regulations not
inconsistence with the byelaws of the bank of act of 1969 and the rules farmed
there under for the conduct of the business of the Bank. The Board of
Management shall appoint a full time paid General Manager and a full time
paid Treasurer (cashier) who shall have no seat on the Board. The Board of
Management shall also have power to elect representative to other co-
operative institutions. The members of the Board of management hold office
for a period of five years from the date of taking changes

30
OBJECTIVES OF MUKKAM SERVICE CO-OPERATIVE BANK

1.To encourage the habit of frugality and co-operative mentality on members and
achive this project function as maximum.

2.To receive investment in members, institution and taken an invention procedure

given back this amount to those persons institutions.

3.It gives loans to agriculture, Industrialists, Labour, Education, marrige, commercial

purpose etc.

4.It provide gold loan to its members.

5.It frames programs for house holds articles and essentials goods.

6.It increases the standard of living on family members and their economic condition
by adopting various developmental programs.

7.It device appropriate programs for cottage industry and small scale industry
development.

8.It will give a facility to safe deposit locker.

9.The acquisition of land, go down construction of any building on works necessary

as convenient for the purpose of banks.

10.To obey the co-operative laws and open with permission of the Registrar branches
at suitable place in the area of operation in Calicut.

31
GROSS PROFIT RATIO

YEARS SALES GROSS PROFIT

2012 16167556 339390
2013 20209446.75 214484
2014 22467502.7 445738.92
2015 24471028 368299
2016 24936051 122922
AVERAGE 21650316.89 24428381.92

GROSS PROFIT
500000

400000

300000

200000 GROSS PROFIT

100000

0
2012 2013 2014 2015 2016

32
CALCULATION OF NET PROFIT RATIO

YEARS SALES GROSS PROFIT NET PROFIT

RATIO
2012 16167556 339390 2.09
2013 20209446.75 214484 1.061305649
2014 22467502.7 445738.92 1.983927301
2015 24471028 368299 1.505040982
2016 24936051 122922 0.492948944

AVERAGE 21650316.89 24428381.92 122.8315213

NET PROFIT RATIO

2.5

1.5

NET PROFIT RATIO

1

0.5

0
2012 2013 2014 2015 2016

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 MUKKAM SERVICE CO-OPERATIVE BANK LTD; NO F 1241

TRADING, PROFIT & LOSS A/C FOR THE PERIOD ENDED 30-03-2016

PRTICULARS AMOUNT PARTICULARS AMOUNT

To opening stock(01-04-15) 9400443 By sales 24936051
22847017
Less returns 66679 By closing stoke 9522693
22780338 22780338
To trade charge 2155041

To gross profit 122922

Total 34458744 Total 34458744
To Establishment and Contingency 16871707 By gross Profit 122922
To postage 229716 By bank commission 150377
BY Miscellaneous Income 781597
To electricity charge 788000 By postage received 305034
To travelling allowance 35755 By entrance fees 2790
To daily deposit commission 3618501 Dividend KSCB share 2158728
To printing and stationary 341261 By int. received on loans 109271376
By int. received on investment 10299503
To KSR cost of auditor 580159 Railway reservation counter 396118
To KSR cost of spl. sale officer 115282 Deficit stoke 211961
To interest paid on deposits 75691481 Insurance 281769
To income tax 10287080 GDS Discount & Commission 222988
To interest rebate 4565739
To miscellaneous expenses 541773
To rate and taxes 317938
Sitting allowances 42500
Insurance 259981
Honorarium 75000
Donation 7250
Telephone 124774
Rent paid 266449
To net profit 1860605
Total 124195163 Total 124195163

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 MUKKAM SERVICE CO-OPERATIVE BANK LTD; NO F 1241

TENATIVE BALANCE SHEET AS ON 31-03-2016

LIABILITIES AMOUNT ASSETS AMOUNT

Share A class 12616699 Cash in hand 26936083
Share B class 55856 Cash at bank 36263550
Share C class 557000 Agri. Credit stebi. Fund 466864
interest
Share D class 3414200 SPL BDR invested 763752
Deposits 1013624867 Reserve fund invested 715637
FD KDC Bank mkm 219692726
KCC KDCB MKM 67535268 FD KDC Bank clt. Eve Br 16262597
AGLCC KDCB MKM 19325352 C/A IDBI 5000000
TERM LOAN KDC BANK Share in KDC bank 31610000
Adj heads due by 4413810 Share in other institutions 183100
Interest payable 378491979 Members loan 751639177
Other reserve 27217994 Deposit loan 9910293
Net profit 2405749 Trade deposit 5000
1860605 Adj heads due to 381162206
Interest receivable 24467824
Closing stoke 9522763
Land and building 54568058
Furniture and fittings 10349749
TOTAL 1579519379 TOTAL 1579519379

35
CHAPTER 4

CONCLUSION

36
 FINDINGS

i. From my analysis it is found that non banking activities has significant role in
the overall profitability.
ii. It is fount from the analysis that percentage of deposits growing for the last year
while comparing the liabilities
iii. From the comparative analysis of the balance sheet it is observed that reserve
and surplus has be fluctuating during the study period, while other values are
held constant.
iv. From the comparative analysis it made percentage of investments and other
assets has grown to 25% and 52%.and also, the capital and other liabilities are
also increased.
v. The functions of the bank are running properly.
vi. The bank is running with an effective administration structure.

SUGGESTIONS

I. Bank is better to expand Non banking activities such as medical store,

Textile store etc. to ensure the overall profitability.
II. Net banking and ATM facility may provide better service to the
customers.
III. It is better to employee professionals in managerial and administrative
position for enhancing a professional approach to the bank.
IV. Bank should enhance the repaying capacity of customers while grading
loans in order to reduce the effect of nonperforming asset.
V. The overall capitalization can be strengthen by the form of issuing
equality shares
VI. More deposit mobilization scheme can be initiative to increase the overall
fund.

37
CONCLUSION
The study entitled an non banking activities and its roll on
overall profitability of Mukkam Service Co-operative bank. The
Mukkam Service Co-operative bank is one of the good banking systems
in Mukkam. At present the bank having five branches in Calicut. Non
banking activities affected to the overall profitability in bank. For
understanding the Non-banking performance of the bank techniques
ratio analysis, common size balance sheet, and comparative balance
sheet are used. Based on like analysis and interpretation suggest that the
bank have satisfactory nonbanking financial position. The study of the
financial of the bank is leads to the conclusion that if Non banking
activities are managed properly then the bank is prosperous. This is true
in case of Mukkam Service Co-operative Bank.

38
 BIBLIOGRAPHY

REFERENCE

Annual report of mukkam service co-operative bank

I M PANDEY, Financial management, 10th edition, 2015, vikas
publishing house Pvt Ltd

WEBSITES

WWW.rbi.org.in
http://www.inestopedia.com
http://www.accountingtools.com
www.wikipedia.com

39
 APPENDIX
QUESTIONNAIRE

1. Do you follow KYC (Know Your Customer?

Yes No

2. Does the bank have core banking system?

Yes No
3. The level of computerization?
Fully computerized computerized
4. The maximum amount which can be granted on self surety to
customers?
9000 more than 9000

5. Which is the following audit is regularly conducted in the bank ?

(first whichever is applicable)

Internal audit statutory audit

Concurrent audit information system audit

5. Do you provide continues awareness program for enhancing

security awareness of the employees?
Yes No
6. Do you follow cooperative principles strictly?
Yes No
7. Do you have effective policies and procedure for managing
information system?
Yes No

40
8. What are the different loans provided by this bank?
9. What are the legal procedures for getting loan?
10.The maximum number of loans granted to one person at a time?

41