INTRODUCTION

As a part of my Bachelors degree of commerce and corporate secretaryship, I

was required to involves myself in an internship program with an organization and
provide a report about the same. I took this opportunity to do my internship in Tamil
Nadu State Apex Cooperative Bank (Triplicane) under the guidance of Prof.Ceciliya
and on work site guidance of Mr.Mohammed Kasali (Chief Manager).

OBJECTIVE:

● To gain more knowledge in the banking field and learn the various procedures
involved.
● To gain experience of how to behave in a workplace.
● To improve professional skills.
● To explore the various opportunities available.
● To gain a view about the financial aspects involved in an economy.
● To gain a greater understanding of the duties and responsibilities involved in a
workplace.
● To identify personal strengths and weaknesses.
● To put theory into practice.
● To develop the initiative and motivation.
● To update knowledge as standards are revised.
● To assess and evaluate ourselves.

COMPANY PROFILE

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 At the apex level, the Tamil Nadu State Apex Coop. Bank Ltd., (TNSC Bank)
is functioning at Chennai which co-ordinates the entire short- term coop. credit
structure. The Tamil Nadu State Apex Co-operative Bank Ltd., commenced its
business during November 1905 as an Urban Coop. Bank. It was subsequently
changed into a District Central Coop. Bank during July 1920. At present, the Bank is
functioning at Chennai with 44 branches, an Extension Counter and H.O. TNSC Bank
is guiding the Dist. Central Coop. Banks / Primary Agricultural Coop. Banks in their
functioning and it is playing a major role in the coop. movement of Tamil Nadu.

TNSC Bank was formed in the year in which the coop. movement of Tamil
Nadu was formed. As such, the Bank has been serving the people of Tamil Nadu for a
centenary for their economic development. As far as Indian coop. movement is
concerned, the Bank has commenced its business from the very next year of the
formation of coop. movement in India. TNSC Bank is the first ever State Coop. Bank
having the credit of celebrating the centenary year. TNSC Bank has got the licence of
Reserve Bank of India to carry on the banking business. TNSC Bank is a Scheduled
Coop. Bank and has been listed under the Second Schedule of RBI Act.

TNSC Bank is a member of the Deposit Insurance and Credit Guarantee

Corporation (DICGC) and is an insured coop. bank as per DICGC Act. TNSC Bank
has got the privilege of having its share capital by the Government of Tamil Nadu.
TNSC Bank has been under close supervision and monitoring of the higher financing
agencies, viz., RBI, NABARD. Periodical inspection and supervision are done by
NABARD as per RBI guidelines. Government of Tamil Nadu is reviewing the
performance of the Bank periodically. Eminent Co-operators have contributed for the
growth and development of the TNSC Bank. These institutions are known as
Cooperative Credit Institutions. The Coop. institutions are functioning under two
category. They are: long-term cooperative credit institutions, short-term cooperative
credit institutions. The coop. credit institutions functioning under short-term credit
structure are of three-tier in nature. At the grass root level, the Primary Agricultural
Coop. Banks (PACBs) are functioning at village level. At the district level, the Central
Coop. Banks (CCBs) are functioning with the headquarters

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 The Tamil Nadu State Apex Co-operative Bank or TNSC Bank is an Indian
co-operative banking company headquartered in Chennai. It was incorporated in 1905
as an urban co-operative bank. It has 46 branches in Chennai alone.

Mission of Bank:

The Mission of the Bank is to mobilise resources, provide banking products and
other professionalised services to the people, strengthen the affiliates, provide vibrant
leadership to the co-operative banking system, achieve sustained growth and
ultimately to attain prime position in the banking industry.

TNSC BANK:

Old in Tradition and Young in Outlook:

TNSC Bank, the Apex Co-operative Bank and the main purveyor of
agricultural credit in Tamil Nadu, has completed 99 years of useful and purposeful
existence. TNSC Bank is old in tradition but young and dynamic in outlook and
action.

Ambition:

The ambition of the TNSC Bank is to feed the people and the Nation with
prosperity, by extending its areas of operation and activities to cover all facets of
economic spheres and integrated rural development.

Leader of Co-operative Credit Movement:

TNSC Bank is the Leader of the Co-operative Credit Movement in Tamil

Nadu for over a century.

First State Coop Bank to Celebrate Centenary Year:

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 TNSC Bank was the 18th Co-operative Society to be registered in the
erstwhile Madras Presidency as “The Madras Central Urban Bank” and this Bank was
the first “Central Co-operative Bank” to be established in India.

Commencement of Business:

It was Sir V.C. Desikachariar, Kt. who gave shape to the proposals formulated
by Sir P. Rajagopalachariar, the first Registrar of Co-operative Societies. Sir V.C.
Desikachariar, Kt. along with 17 eminent personalities sent up to the Registrar of Co-
operative Credit Societies an application for the registration of the Bank under the Co-
operative Societies Act. The Government, in G.O.Ms. No.1022, Revenue, dated
19.10.1905 accorded the necessary sanction and the Registrar of Co-operative Credit
Societies registered the Bank on 23.11.1905. The Bank commenced its business on
26.11.1905.

Initial Authorized Share Capital:

The initial authorized Share Capital was Rs.25000/- divided into 50 shares of
Rs.500/- each. The 17 pioneers held one share each, 10 other new members held 11
more shares. The first call of Rs.50/- per share, was made on 26.11.1905. With the
addition of 2 more such calls, the paid-up Share Capital @ Rs.150/- per share,
aggregated Rs.4200/- as on 31.3.1906.

First Loan:

The first loan was disbursed to No.21 Big Kancheepuram Urban Weavers’
Union on 14.2.1906. The first fixed deposit was received on 14.3.1906. The Bank’s
first accounting year ended on 31.3.1906 with a net profit of Rs.20-9-0.

Ten Stages of Growth:

The history of the Tamil Nadu State Apex Co-operative Bank may be divided
into ten stages broadly, according to its Constitutional Development. hese ten stages
broadly reflect the development of the co-operative Credit Structure at the Apex Level
in Tamil Nadu, finally emerging in the three-tier system of agricultural credit, with the
primaries at the base or village level, Central Coop. Banks as intermediaries at the
Districts level and the State Coop. Bank at the State or Apex level.

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FIRST STAGE – 1905 TO 1917

The Shareholding in the Bank was confined entirely to individuals. All the 50
shares originally floated were fully subscribed prior to 30.6.1908. 50 new shares were
floated in 1908-09 which again was fully subscribed in no time. Towards the close of
December 1911, the Bank had become well established and its foundation well laid.
The working capital of the Bank then stood at Rs.16 lakhs. Loans aggregating over
Rs. 29 lakhs were disbursed to Primary Societies since inception of the Bank.

Department For Current Account:

On 1.7.1911, a department for current accounts was opened. Until then, only
fixed deposits were accepted by the Bank.

Raising of Share Capital:

In March 1910, the authorized Share Capital of the Bank was raised to Rs.1.00
Lakh, comprising of 1000 ordinary shares of Rs.100/- each. Again in October 1911,
1000 further shares of Rs.100/- each were floated at a premium of 10%. The shares
were over subscribed by six times. In the year 1912, the Bank doubled its Paid-up
Share Capital to Rs.2.00 Lakhs the maximum amount allowed under the bylaws. In
1916, the Working Capital was 2.5 times what it was in 1911.

Dividend and Bonus:

The Bank declared a dividend of 10% plus bonus of 2% per share out of its
profits for the year ended 30.6.1911.

Formation of District Urban Banks:

Some developments in Co-operative Organisations of outstanding nature took

place in 1909-1910. Co-operative Supervising Union at Uttaramellur was registered
on 5.8.1910, Salem District Urban Bank on 25.1.1909, Tiruchirapalli District Urban
Bank on 25.3.1909 and Coimbatore District Urban Bank on 16.9.1910. The
membership of these Banks was also confined to individuals only. The District
Central Coop. Banks were financed by this Bank from 1912-1913 along with the
Primary Societies directly. Sir V.C. Desikachariar, the Founder-Secretary of the Bank
relinquished his post in December 1911.

5
SECOND STAGE – 1917 TO 1920

Admission of Cooperative Societies:

Pursuant to the report by Maclogan Committee on Cooperation, the General

Body of the Bank decided on 31.3.1917 to admit Cooperative Societies as
shareholders of the Bank. Between April, 1917 and June, 1920, 60 primary Societies
and 24 Central Coop. Banks took shares in TNSC Bank. Out of fresh share capital of
about Rs.1.50 lakhs exclusively allotted to Coop. Societies in this period, they
contributed only a sum of Rs.14620/-. The response from Primary Societies was thus
discouraging and therefore, the idea of bringing them into this Bank was abandoned.

Savings Deposit:

Prudential and Savings Deposits were accepted by the Bank for the first time
since 1917.

Own Plot:

A plot in 12 grounds in Luz Church Road, Mylapore, Chennai, was purchased

by the Bank from out of its Building fund during 1918-1919 and the construction of
the Bank’s own building had begun with an advance of Rs.25000/- from the General
Funds of the Bank, to be recouped in 10 annual installments from out of the net
profits of the Bank.

Conditions for admission of cooperative societies:

The existing shares (all of which were then held by individuals) be converted
into Preference Shares, carry6ing a preferential right to dividend at 9 per cent and to
the capital in the event of liquidation.

Surplus profits, if any, after providing for contributions to Reserve Fund, Dividend
and Building Fund, may be utilized with the sanction of the Registrar of Coop.
Societies in the extinction of individuals’ shares by paying off Rs.160 per share as
against the face value of Rs.100 per share.

The sum of Rs.25000/- then standing to the credit of the Dividend Equalisation Fund
should be reserved for the exclusive benefit of the preference shareholders to be

6
drawn upon, should the annual profits be insufficient to pay in full dividend at 9
percent.

New ordinary share capital be created; such capital to be issued at par to coop.
Societies only. The maximum of the ordinary share capital then created was fixed at
Rs.4.00 lakhs. The preferential share capital held by individuals on that date stood at
Rs.2.00 lakhs.

The “Advance” rate should not be reduced without the sanction of the Government
who will not sanction such reduction, if it is likely to affect prejudicially the
preference shareholders, and

Three out of the nine seats on the Board would be reserved to Coop. Societies. The
relative bylaws were suitably amended and on 1.4.1917, the new constitution came
into effect.

THIRD STAGE – 1920 TO 1930

New membership of the Bank was confined to the Central Coop. Banks only.
The Primary Cooperative Societies were completely eliminated from the membership
of the Bank and a few individuals were left with only one preference share each.

Federation of Central Cooperative Banks:

During this period, the Madras Central Urban Bank emerged as a real
Federation of Central Coop. Banks, styled as the “Madras Provincial Co-operative
Bank Ltd.” The response from the Primary Coop. Societies to avail themselves of the
offer of admission to the membership of the Bank was not adequate. Hence, from 1st
July, 1920, Central Coop. Banks alone were admitted, as the shareholders of the Bank.

Audit:

The audit of the accounts of the Bank was done by private auditor appointed
by the General Body of the Bank since June, 1918.

Recovery of Agricultural Loans:

7
 The practice of recovery of agricultural loans advanced by co-operatives as
arrears of land revenue, came into vogue in 1919-1920 by passing of an Act by the
Legislative Council.

Board of Management:

In 1920-1921 with the increase in the number of Central Coop. Banks, direct
lending by Apex Bank to Primary Societies was reduced and also the indebtedness of
Primary Societies to the Apex Bank was also considerably reduced. From 1.7.1920,
the Bank having been transformed into a Provincial Coop. Bank, the Board of
Management had to be reconstituted on an entirely new basis. Every shareholding
Central Bank was allotted a representative to the Board of Management and the
Preference Shareholders elected from among themselves 12 members to represent
them on the Board, thus the Board of Management consisted of representatives of
Central Coop. Banks and individual shareholders, the former preponderating in
number.

Constitutional Change:

Due to lack of adequate response from the Primary Coop. Societies to avail
themselves of the offer of admission to the membership of the Bank, Mr. Hemingway
who was the Registrar in 1919, outlined a new scheme – a constitutional change in the
set up of our Bank of a far reaching character – for federating the Central Banks into a
higher central organization of their own; in other words, to convert the Madras
Central Urban Bank into a real Provincial Apex Bank. From 1st July, 1920, Central
Coop. Banks alone were admitted as the shareholders of the Bank. Consistent with the
policy of placing the Bank on the footing of a true financing agency and balancing
center for the Central Banks and affording the latter decisive voice in its management,
the redemption of the Preference Shares was started in 1923 and continued until each
individual shareholder had only on preference share of the face value of Rs.100 and
redemption value of Rs.160/- in the Bank. In order to secure an absolutely
predominant voice to the Central Banks, votes at the General Body were taken on the
basis of the number of shares held by the members. The Bank thus became practically
a federation of Central Coop. Banks, owned by them.

Executive Committee:

8
 The larger size of the new Board necessarily lead to the creation of a smaller
body to carry on the day-to-day administration of the Bank. The new Board, therefore,
elected at Executive Committee consisting of 9 members, 6 of whom including the
President and Vice President were to be residents of Madras – recruited practically
though not necessarily from individual shareholders and the remaining three could be
non-residents elected from the representatives of Central Coop. Banks. They have
office for 3 years. In 1925. By an amendment of the bylaws, the representation to
individual shareholders on the Board Of Management was reduced to 5 from 12 and it
was also provided that the majority of members in the Executive Committee should
be representatives of Central Co-op. Banks. Both in the Board and the Executive
Committee, the rule of one man one vote was adopted. Full scope was thus provided
for the due pursuit of co-operative principles in the conduct of the affairs of the Bank.
While the Executive Committee was carrying on the business of the Bank, the Board
of Management decided all questions of policy.

Own Building:

The Bank moved into its own premises constructed in December, 1920 at Luz
Church Road, Mylapore, Chennai, on 1.2.1921 and the Bank’s first branch was
opened on 17.2.1921 at Armenian Street in George Town.

Surplus Funds:

During 1921-1922, the Government authorized the investment in this Bank of

Local Bodies and Municipal Funds, Railway Cess Funds, Local and Municipal
Provident Funds, security deposits of municipal officials, jail and Akbari and other
municipal renters and contractors, Government servants of every class were permitted
to invest or place deposits with this Bank, in terms of G.O.Ms.No.423 Public, dated
21.6.1909. Owing to large influx of money from the above agencies into the District
Central Coop. Banks in 1923-1924, the Bank faced the problem of surplus funds and
had to invest large amounts in Coop. Banks in Bengal and Burma. This position had
continued even upto 1926-1927, when the Bank had to reduce the rates of interest on
deposits and to stimulate the demands from Central Coop. Banks for loans, a bonus of
0.5% on the amount of loan applied for within 30.6.1927 was offered under certain
conditions to Central Coop. Banks and propaganda in favour of this scheme was
carried on by the members of the Executive Committee which yielded handsome

9
results. At the Coop. Bankers’ Conference held on 8.5.1926 presided over by Dr.
Pattabhi Sitaramayya, certain important decisions relating to the loaning Operations
of Coop. Banks were taken.

Loaning Operations:

Central Coop. Banks could lend money drawn from the Madras Central Urban
bank, only for periods not exceeding those for which loans were availed of from
Madras Central Urban Bank. There should be no reloaning of recoveries by primary
societies, a general information register was prescribed for maintenance by Central
Coop. Banks. The need to adopt uniform deposit interest rates by Central Banks,
opening of branches by Central Banks, remittance business and opening of current
accounts by Central Banks were stressed. At the Bankers’ Conference held on
22.4.1928, it was defined that loans repayable in whole out of the next harvest would
be classified as short-term loans. Seasonality discipline of the crop loan system was in
vogue even then. The duties and responsibilities of the Administrative Staff in Central
Banks were specified to have an effective control over the indebted primary societies.

Debentures:

In 1927-1928, to secure long term money, the Bank floated debentures

carrying interest at 5% p.a. and redeemable after 29 years, viz., in 1947, with issue
price at 95 percent, and a sum of Rs.214000/- was raised thereby.

Changes In Loaning Policy:

In November, 1920, special permission of the Government was obtained to

grant loans to nonmembers against their deposits and in January, 1931, also on the
pledge of G.P. Notes. From the early years upto 1920, the bulk of loans granted by the
Bank to Primary Societies and Central Banks were of long-term nature ranging from 7
to 10 years. In 1921 and 1922 however, owing to financial stringency, only short term
loans ranging from1 to 2 years were granted to the Central Coop. Banks. Since 1927,
the Bank’s loaning policy underwent a change and Central Banks were granted loans
for periods ranging from 1 to 3 years and in special cases upto 5 years. During 1928-
1929, the Bank advanced long-term loans to Land Development Banks upto
Rs.75000/- by subscribing to the debentures floated by them.

10
Grants to Cooperative Education And Propaganda:

The Bank had been making grants to the provincial co-operative union from
1928-1929 for co-operative education and propaganda to the extent of Rs.14000/- per
annum (of which Rs.9000/- was earmarked for rural reconstruction work)

FOURTH STAGE – 1930 TO 1956

During this stage, far reaching structural changes in the constitution of the
Bank took place.

The Madras Provincial Co-operative Bank Ltd:

The Silver Jubilee of the Bank was celebrated with all grandeur on 20.6.1931.
By a resolution passed at the General Body Meeting of the Bank held on 18.6.1931,
the name of the Bank was changed as “The Madras Provincial Co-operative Bank
Ltd.”

Scheme For Rectification And Consolidation Of Primary Societies:

During 1930-1931, the Bank embarked on a scheme for rectification and

consolidation of Primary Societies through the Central Coop. Banks, in view of the
heavy overdues in the societies and the deterioration in the working of many of them.
As per the scheme, Central Coop. Banks were subsidized for carrying on the overhaul
work to the extent of Rs.28,787.50. To review the progress of work done by the
Central Banks and to co-ordinate their activities, an administrative section was set up
by the Bank under the special charge of the Vice-President of the Bank to prepare
brief reviews on the progress reports from Central Banks for the benefit of the
Executive Committee of the Bank.

Benefit to Agriculture and Agriculturists:

During the first 25 years of working, this Bank had lent to primary societies
and Central Coop. Banks a sum over Rs.5.50 crores. But for the Coop. Organization,
this vast sum of money would not have found its way into rural parts to the benefit of
agriculture and agriculturists. In 1930-1931, in agricultural credit societies the
working capital deployed was to the tune of Rs.6.50 crores, of which the involvement
of the Apex and the Central Coop. Banks was as much as Rs.5.00 crores.

11
Slash Downing Interest Rates on Deposits:

A peculiar position arose in 1932-1933 when, with an increase of Rs.40 lakhs

in the working capital of the Bank, there was practically no scope for deployment of
the resources of the Bank adequately and the Bank had to slash down deposit interest
rates and also suspend acceptance of fresh deposits.

Purchase of College House (Head Office):

During 1936-1937, the Bank purchased “College House” in the then China
Bazaar Road, in George Town at a cost of Rs.1.76 lakhs. This is exactly the site where
the Head Office of the Bank is presently functioning. On 1.10.1937, the Head Office
of the Bank moved into this building and the Town Branch was merged with the Head
Office. The old Head Office of the Bank at Mylapore was converted into a Branch.

New Branches:

During the period 1937-1940, the Bank had opened in all 3 Branches in
Mylapore, Egmore and Triplicane, the prominent localities in Madras City.

Redemption Of Debentures:

On 1.12.1940, the Bank redeemed the 5% debentures of the Bank of the face
value of Rs.2.15 lakhs, due for redemption in 1947, by giving 6 months notice to the
debenture holders as per the terms of issue.

Industrial Advance:

During the year 1940-1941, an industrial advance was made to the Vuyyure
Coop. Agricultural, Industrial and Credit Society for purchase and crushing of
sugarcane upto 1.14 lakhs tons and the society was able to realize good prices for
sugar manufactured.

Scheme of Inspection:

A Scheme of Inspection by the Bank of the working of Sales Societies

affiliated to the Central Coop. Banks was introduced in 1942-1943. The scope of
inspection by the Bank was enlarged in 1948-1949 when the Inspectors were advised
to verify the stocks in Central Coop. Stores, as the stocks were held as security for

12
procurement advances, to Coop. Network through the Central Coop. Banks, the
demand for such advances (which were introduced in 1946-1947) was so heavy that
the Bank had to pledge its entire holdings in Government promissory notes with
Imperial Bank of India, besides borrowing Rs.2.00 crores from the State Government.
To provide for all these borrowings, the maximum borrowing power of the Bank was
raised to 15 times of its owned funds.

Grants:

The Bank disbursed grants for Rs.9000/- in all to the Central Coop. Banks for
development of cottage industries during 1946-1947.

Rediscount Facilities:

The Bank was enabled to secure, for the first time, rediscount facilities with
Reserve Bank of India, of short-term agricultural hundies drawn by Central Coop.
Banks and this helped the Bank to raise funds to the tune of Rs.60 lakhs and lend
money cheaply to the agriculturists for seasonal agricultural operations and for the
marketing of crops.

Extension of Credit facilities:

The Bank added yet another chapter in its advances portfolio in 1949-1950 by
extending credit for the purchase and distribution of chemical fertilizers and the
Weavers Coop. Societies for the production and marketing of handloom cloth, through
the Central Coop. Banks. In the year 1951-1952, the facility of rediscounting of short-
term agricultural bills extended to the Bank by Reserve Bank of India, was replaced
by them, by revolving short-term credit limits to Central Coop. Banks for Seasonal
Agricultural Operations and the Marketing of Crops. The slump in textiles and
consequent accumulation of handloom goods with the Weavers’ Coop. Societies
resulted in the State Government introducing the Weavers’ Relief Scheme, for
providing employment to weavers who were supplied yarn from special funds
provided for the purpose and the Government agreed to bear losses, if any, incurred in
these transactions. During 1952-1953, Reserve Bank of India extended credit facilities
to the Bank against commercial bills drawn by the Apex Weavers’ Coop. Society for

13
the purchase and distribution of handloom yarn under Sec.17(4)(c) of the Reserve
Bank of India Act and the Apex Bank availed of this limit initially to the extent of
Rs.31.90 lakhs.

FIFTH STAGE- 1956 TO 1970

The Tamil Nadu State Co-operative Bank Ltd.

The Government of Tamil Nadu became a shareholder of the Bank on

27.3.1957 and were represented on the Board of Management of the Bank, pursuant to
the recommendations of the All India Rural Credit Survey Committee of the Reserve
Bank of India. Consequent on the renaming of our State as Tamil Nadu in the year
1970, the name of our Bank was also changed as “The Tamil Nadu State Co-operative
Bank Ltd.”

State Government Representatives on Board:

Pursuant to the recommendations of the All India Rural Credit Survey

Committee and to achieve the target of Rs.15.00 crores for issue of Coop. rural credit,
State participation in the working capital of Coop. Societies was considered
necessary. The Government of Tamil Nadu became a shareholder of the Bank on
27.3.1957 and nominated three representatives of the Government on the Board of
Management of the Bank.

Integrated Scheme of Rural Credit:

An integrated scheme of rural credit was drawn up by the Registrar of Coop. Societies
which contemplated that 21% of the credit needs of the cultivators must be met by
Co-operatives by the end of the second five year plan. To meet the anticipated demand
from the Central Coop. Banks, the share capital of the Bank was raised to Rs.1.00
crore in 1956-1957 and the maximum shareholdings per Central Coop. Bank was also
raised to Rs.2.00 lakhs under the integrated credit scheme, provision was also made
for building up “Agricultural Credit Stabilisation Fund” and the statutory dividend on
Government share capital in excess of certain agreed rates, would be carried to this
Fund.

Funds and Credit Limit from RBI :

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 From 1.4.1957, advances from the Cess Fund ceased and Reserve Bank of
India provided funds to Primary Weaver’s Coop. Societies for production and
marketing activities through the State and the Central Coop. Banks under Section
17(2)(bb) of the Reserve Bank of India Act. During 1957-1958, for the first time, the
Apex Bank was sanctioned by the RBI a credit limit of Rs.1.00 crore at concessional
rate of interest against pledge of its own G.P. Notes for financing SAO and marketing
of crops on short-term basis under Sec.17(4)(a) of the RBI Act.

Redemption of Preference Shares:

During the same year, a new bylaw was introduced enabling the Bank to
gradually buy up the Preference Shares held by individuals at a premium of Rs.160/-
per share of the face value of Rs.100/- and eventually extinguish the preference shares
of the Bank. The redemption value of preference share of the Bank was raised to
Rs.200/-.

Audit by Co-op Department:

For the first time, the audit of the accounts of the Bank was entrusted to the
audit wing of the Coop. Department of the Government of Tamil Nadu, from
1.7.1959, until then, the audit was done by the Chartered Accountants, approved by
the RCS. The share holding by Central Coop. Banks in the Apex Bank was increased
to 1/25th of their borrowings, subject to a maximum ceiling of Rs.25.00 lakhs per
CCB.

Cash Credit Limits:

In 1960-1961, on the recommendation of the 31st Central Coop. Banks’

Conference (held in August, 1960), cash credit limits were sanctioned to CCBs for
dispensation of rural credit for SAOs. The drawals from the Cash Credit Accounts
would be replenished by time loans (against RBI credit limits) in due course.

Major Industrial Finance:

After bifurcation in 1953, the Tamil Nadu State Coop. Bank entered the arena
of major industrial finance in 1960-1961 when 3 Coop. Spinning Mills and 3 Coop.
Sugar Mills were financed by the Bank by way of working capital loans, term loans,
etc. Industrial Co-operatives were financed by this Bank through the Tamil Nadu

15
Industrial Coop. Bank Ltd., during the period. The year 1961-1962 coincided with the
first year of the III Five Year Plan. About 73% of the rural population was brought
within the Coop. fold and the quantum of agricultural credit provided by the CCBs
was of the order of Rs.35.00 crores. With a view to help the Coop. Banks in mopping
up their resources sizeably, the State Government, in December 1961, extended their
guarantee for the repayment of term deposits of 36 months and over and carrying
interest at 5% p.a. and payment of interest thereon, held by the State Coop. Bank upto
a ceiling of Rs.125.00 lakhs and by CCBs upto Rs.30.00 lakhs each. In conformity
with its status and standing, the Apex Bank did not apply for renewal of the Guarantee
from Government, subsequently. In 1961-1962, the Bank extended credit to the Tamil
Nadu State Coop. Marketing Federation for undertaking the distribution of essential
commodities through fair price shops. In 1961-1962, direct advances from the Cess
Fund were granted by the Government for financing Silk Weavers’ Coop. Societies
also. During this period, the RBI stipulated the condition of maintenance of adequate
non-overdue cover for the borrowings of the Apex Coop. Bank, both short-term and
medium-term from the RBI, on behalf of CCBs. The Reserve Bank also revised their
medium-term loan policy by stipulating that the medium-term credit limits could be
operated upon only as reimbursement of the advances already made by the State and
the CCBs, to the extend not exceeding 75% of fresh issue of medium-term loans made
by them over and above the level of medium-term loans given out of their own
resources comprising of share capital, reserves and deposits, and outstanding as on
30.6.1972. The Bank has been extending its financial assistance for Coop. education
and propaganda through the Tamil Nadu Coop. Union and the Regional Coop.
Training Institutes. The Bank contributed to an endowment of Rs.1.25 lakhs in the
University of Madras for a “Lecturer’s Chair in Co-operation” on behalf of the Co-
operatives of Tamil Nadu – the Bank had instituted since 1968 the award of a gold
medal to the best trainee for each of the Banking courses conducted at the Coop.
Training College, Madras. The Bank sponsored jointly with certain other Apex Coop.
Institutions and CCBs of Tamil Nadu the construction of the State Co-operators’
Guest House at Ooty which was declared open by the Chief Minister of Madras on
9.5.1964. This Guest House is situated in a central locality and has 20 suites fully
furnished. The Banking Regulation Act, 1949 (as applicable to Coop. Societies)
became effective from 1.3.1996 and this Bank came under the statutory control of the
RBI. It was included in the Second Schedule to the RBI Act, 1934 with effect from
16
16.7.1966. In order to strengthen the Agricultural Credit Stabilisation Fund of the
Bank, the Government disbursed a grant of Rs.7.50 lakhs and sanctioned a loan of
Rs.2.50 lakhs, repayable in 25 years in 15 equated annual instalments of principal and
interest commencing from the 11th anniversary of the date of the loan. For the first
time, the Bank granted conversion of short-term loans into medium-term loans to the
Coimbatore Dist Central Coop. Bank Ltd., to the extent of Rs.51.00 lakhs, out of the
Agricultural Credit Stabilisation Fund, in May 1968, due to failure of crops in that
District. Further, similar grant and loan of Rs.75.00 lakhs, Rs.25.00 lakhs were
received from Government in 1968-1969 for strengthening the ACSF and medium-
term conversion loans aggregating Rs.184.93 lakhs were granted to 7 CCBs during
this year. Having fully exhausted the balance in the ACSF with the Bank, the Bank
availed of conversion facilities from the National Agricultural Credit Stabilisation
Fund with the RBI upto about Rs.25.00 lakhs. As a step towards coordinating the
working of the Primary Land Mortgage Banks and the CCBs, the Apex Bank
sanctioned in February 1968 an interim Cash Credit Limit of Rs.50.00 lakhs to the
Coop State. Land Development Bank to enable them to issue loans, build up
mortgages and later on float debentures in the market with the proceeds of which the
outstanding in the interim cash credit account would be cleared. The Apex Bank also
implemented from 1.1.1968, the All India Mutual Arrangement Scheme sponsored by
the National Federation of State Coop. Banks, covering Apex and the Central Coop.
Banks in India, under which the Bank can to issue drafts and collect bills on all india
basis at concessional rates for the benefit of constituents. Thanks to the untiring
efforts of the Secretary of the Bank, Thiru. D. Varthamanan, the Bank achieved
phenomenal success in regard to Income-tax assessment, on its appeal to the Central
Board of Direct Taxes and obtained substantial refunds from them which provided the
nucleus for the Bank’s new multi-storeyed building. By this, the method of
assessment of Income Tax payable by the Bank was thoroughly overhauled.

SOCIAL LENDINGS:

In the wake of social control over the commercial banks and their entry into
the field of agricultural credit, a Seminar of Chief Executives of CCBs was organized
in February 1969 for the purpose of highlighting the need for the Coop. Banks to
improve qualitatively their loaning opening and the efficiency of their service to the
customers, thereby enabling them to face the challenge posed to them by the

17
commercial banks in the matter of dispensation of agricultural credit and mobilising
the savings of the community. It was stressed that the entry of commercial banks in
the field of agricultural credit would be complementary and not competitive. Pursuant
to the decision of the National-level Consultative Committee constituted by the
Agricultural Finance Corporation Ltd., a State-level Co-ordination Committee, with
the Apex Bank as the Convener, was constituted on 25.1.1969. The objectives of this
Committee were to create goodwill between the commercial banks and the Coop.
Banks, discuss problems of local interest and co-ordinate the activities between the
Coop. Banks and the commercial banks in regard to extension of agriculture credit, by
mutual exchange of information, knowledge and experience on the basis of the
guidelines of the National-level Consultative Committee. The Committee comprised
of the Chairman of the Apex Coop. Banks, State Marketing Federation and the
representatives of the nationalized and commercial banks at Madras. The Officers of
RBI, Agricultural Refinance and Development Corporation and the Officers of the
State Government (from the Departments of Co-operation, Agriculture, etc.) also
usually participated in the deliberations of the Committee by invitation. The
Committee met once in a month and later at quarterly intervals. The Secretariat of the
Committee functioned at the office of the State Coop. Bank. The representatives of
both the Nationalized and Commercial Banks, RBI and the State Government evinced
keen interest in the deliberations of the Committee. This Committee did outstanding
and laudable work and constituted considerably in achieving the objectives of the
Committee. Among others, the following achievements of the Committee are
noteworthy: (i) the drafting of Farm Credit Book; (ii) Framing of uniform scales of
finance; (iii) Arrangements for inter-institutional co-ordination; (iv) Energizing of
pumpsets, etc. This Committee was, however, wound up in 1975 on the State
Government setting up a separate State Level Co-ordination Committee. Consequent
on the renaming of the State of Madras as Tamil Nadu, during the year 1969-70, the
name of the Bank was altered as “The Tamil Nadu State Coop. Bank Ltd.”

SIXTH STAGE – 1970 TO 1976

Appointment of Managing Director:

18
 As per the Tamil Nadu Co-operative Societies’ Act and with effect from 17th
October 1970, the Board of Management of the Bank was broad based, providing for
representation to the weaker sections of the community, women, backward
community, small farmers, etc. The Co-operative Societies’ Act was further amended
in July 1973, providing for the appointment of a Managing Director for the Bank, by
the State Government of Tamil Nadu, who will be the Chief Executive of the Bank
and also be a member of the Board of Management. Representation to preference
shareholders of the Bank on the Board of Management of the Bank was withdrawn.
The Managing Director appointed shall be an Officer on deputation drawn from the
RBI in the rank of the not less than an Assistant Chief Officer of the Agricultural
Credit Department or an Officer from the Indian Administrative Service or an Officer
not below the rank of a Joint Registrar of Coop. Societies in the Coop. Department of
the State Government. The post of Secretary of the Bank was abolished from
1.7.1973.

Incentives for opening new branches:

The Bank introduced the scheme of incentives of Rs.41,250/- to the CCBs for
opening new branches.

Amendment to Tamil Nadu Coop. Societies Act:

Towards the end of 1970, the State Government revised the administrative set-
up of the State and the CCBs, with the object of providing credit facilities to small
farmers and make the Managements broad based, providing for representations to the
weaker sections, women, backward community, small farmers, etc., with the
amendments to the relevant sections of the Tamil Nadu Coop. Societies Act.

RECONSTITUTION OF BOARD OF MANAGEMENT

The Board of Management of the Bank was reconstituted with the following
persons as members

● Chairmen of 16 Central Coop. Banks;

● Chairman of the Tamil Nadu Coop. State Land Development Bank Ltd.;

19
 ● 3 Members from the Chairmen of Apex Coop. Societies elected from among
themselves;
● 3 Members nominated by the Registrar of Coop. Societies from among
members of registered Societies not affiliated to any Apex Society; and
● The Additional Registrar of Coop. Societies (Credit) – Ex – Officio
First sanction of cash credit limit:

During 1971-1972, for the first time, the Bank sanctioned cash credit limit of
Rs.25.00 lakhs to the Tamil Nadu Coop. Consumers’ Federation under the centrally
sponsored scheme to deal in consumer goods and a medium-term loan of Rs.5.00
lakhs to the Tamil Nadu State Oil and Allied Products Coop. Federation for setting up
three oil extraction plants and extended Bank guarantee for purchase of machinery
under deferred payment terms of Rs.48.72 lakhs.

Inauguration of Bank’s New Building:

The foundation stone of the Bank was laid on 7-12-1970 and the new building
was inaugurated on 25-10-1974. The Head Office of the Bank started functioning in
the new building from 11.11.1974.

Cash Certificate Scheme:

As an additional tool for mobilization of deposits, Cash Certificate Scheme

was introduced by the Bank in 1975-76.

Discounting of cheque facility:

The facility of discounting of cheques was also extended to longstanding,

valued constituents of the Bank.

Appointment of Special Officer:

In terms of the Tamil Nadu Coop. Societies (Appointment of Special Officers)

Act, 1976, the Government of Tamil Nadu appointed Thiru. M. Ahmed, I.A.S., as the
Special Officer of the Bank, with power to exercise all or any of the functions of the
Board of Management or of any Officer of the Bank. The Special Officer assumed
charge on the forenoon of 10th June 1976, on which day the term of office of the
members of the Board of Management superceded.

20
Jewel Loan:

With a view to helping the weaker sections of the community in Madras City,
the Bank took upon itself the task of providing jewel loans through its branches. The
scheme which was started in December 1976 in 3 branches, thereafter extended to 16
more Branches.

Reimbursement facilities to CCBs:

The Bank has also been providing reimbursement facilities to CCBs, in respect
of their advances against the security of gold ornaments through their branches as
well as loans issued through Primary Credit Societies and Urban Banks.

SELF-EMPLOYMENT LOANS:

In keeping with the social aspirations of the nation and to help the weaker
sections of the community, the Bank has been issuing loans up to Rs.2000/- for
acquisition of capital assets like cycle-rickshaws, sewing machines, wet grinders,
mobile ironing units, etc., as self-employment loans. These loans are repayable in
monthly installments within 24 months from the date of availing of the loan.

Loans to salaried employees:

In March 1979, the Bank introduced a scheme for issue of loans to salaried
employees, who are working in various organizations in the city of Madras and who
are not members of the Employees’ Coop. Societies, if any, functioning in their own
organizations. Loans are given up to Rs.2000 or two months’ gross salary, whichever
is less and have to be repaid in 12 to 24 monthly installments.

Extension of State Drafts Scheme to Urban Banks:

The State Coop. Bank, has for the first time, extended the State Drafts Scheme
to Urban Banks, in March 1979.

SEVENTH STAGE – 1976 TO 1980

21
Special Officer and Managing Director:

In January 1977, the Special Officer of the Bank who was all along
discharging the duties of the Board of Management and Chairman of the Bank, was
also assigned the duties of the Managing Director of the Bank and was designated as
Special Officer and Managing Director of the Bank.

Refinance limits to the Central Coop. Banks:

In 1976-1977, to met the ever increasing demand for loans against gold
ornaments, especially from the weaker sections of the community, the Apex Bank
sanctioned refinance limits to the Central Coop. Banks for lending direct or through
agricultural credit societies/Urban Banks, etc. The Apex Bank itself, for the first time,
introduced jewel loan business in a few of its branches.

Loans to self-employed persons and artisans:

The Bank’s programme of issuing loans to self-employed persons and artisans

through its branches, was inaugurated by His Excellency the Governor of Tamil Nadu
at a colorful function on 30.12.1976.

Crop Verification:

During 1977-1978, the Bank introduced Crop Verification Register at the

Society-level to ensure proper utilization of short-term agricultural loans issued to
farmers during the year. With a view to make the inspection of CCBs and their
affiliated Societies more purposeful and efficient and also to directly involve itself in
crop verification to the possible extent, the Apex Bank opened two Regional Offices
at Madras and Madurai and in March 1980, added one more Regional Office at
Salem.

EIGHTH STAGE – 1980 TO 1987

22
Consumer Loans:

The scheme was introduced in March 1980 for purchase of consumer durables
like T.V. sets, radio, refrigerators, etc., and this satisfied the long felt needs of the
depositors and helped in a long way in meeting the competition from commercial
banks in the matter of deposit mobilization.

Financing to National Consumers’ Coop. Federation Ltd.:

For the first time, since November 1980, the Tamil Nadu State Coop. Bank has
started financing National Consumers’ Coop. Federation, a national level
organization. This finance is intended to help the operations of the Southern Regional
Office of NCCF in maintaining the public distribution system active. The assistance
has been given in the form of “Bill purchase facility” to the extend of Rs.30.00 lakhs
and “Cash credit facility” to the extent of Rs.170.00 lakhs.

Salary Loan:

As the profit of the Bank was a low decline, it has been decided to give a boost for
Salary Loan. The Salary Loans were issued to various organizations.

NINTH STAGE – 1987 TO 1998

Training College:

At the instance of NCDC, TNSC Bank has opened a Training Institute in a

rental building at Adyar during the year 1989. Subsequently, during the year 1992, the
Training College was shifted to the Bank’s own building at Madhavaram Milk
Colony, Chennai. We have organized Trainers Training Meet at our Training College
in a grand manner during 1996.

Settlement:

During the year, the Management of the Bank have entered into Bilateral
Settlement on 29.5.1991, 9.5.1996, 24.10.1996 and 8.12.1996 on wages and other
service conditions.

NAFSCOB Conference:

23
During this period, we have hosted a Conference of NAFSCOB.

Regional Office:

It has been decided to strengthen the Inspection Department of the Bank and to close
down the Regional Office of the Bank.

TENTH STAGE – 1999 ONWARDS

Elected Board:

After a long time, elections to Co-operatives were held and duly elected
representatives took charge as the Management of the Bank.

Foreign Travel:

The Board of Management and the Executive of the Bank have undertaken foreign
travel and also undergone training on foreign soil.

Surplus Funds:

For the second time in the annals of our Bank’s history, we were faced with a situation
of surplus funds without any avenue for lending.

Creation of New Sections:

a) Urban Banks b) Human Resources Development c) Organisation & Methods d)

Women Entrepreneur Development Section e) Development Action Plan f) Computer
g) Treasury

Computerisation:

The Bank has taken strong note of the need for computerization of the Bank and
serious efforts were taken.

Deposit Manual:

We have brought out a Deposit Manual during the year 1997.

90th Year Celebration:

24
To commemorate the 90th year of our Bank, a beautiful wrist watch was presented to
each and every staff of the Bank working in our Bank as well as for the retired staff
members of the Bank.

National Seminar:

In collaboration with the University of Madras, a Seminar was organized. The

Seminar was an historic one.

Contribution for social cause:

TNSC Bank has contributed for various social causes from time to time from
Common Good Fund.

Branches:

The Bank has 45 branches in various part of Chennai City. Since the branches are
located in the residential areas, they work in two shifts in the morning and the evening
to suit the convenience of the members of the public except on Saturdays, when the
Branches work in the morning session only. However, subsequently working hours of
the Branches have been changed and at present Branches are working in single shift.

Training:

The Bank gives intensive training to the newly recruited Assistants for about two
months before assigning them regular work. The training covers both theory and
practice. Refresher courses are also arranged for the benefit of the Managers to
acquaint them with the modern trends and on subjects connected with banking. It is
proposed to extend this to the benefit of Asst. Managers also. The Bank also deputes
its Officers to various training courses offered by the Bankers’ Training College,
Bombay, College of Agricultural Banking, Pune, Bankers Institute of Rural
Development (BIRD), Lucknow, VAMNICOM, Pune, RTC, NABARD, Mangalore,
RBI Staff College, Madras, etc. In addition, the Bank’s Officers participate in various
Seminars, etc., arranged in the City on subjects connected with Banking, Finance, etc.

Publicity:

25
To give publicity to its various deposit schemes, the Bank has been advertising
through the media of newspapers, periodicals, hoardings, wall paintings, cinema
slides, leaflets, handouts, radio and television. The deposit schemes are also displayed
in show cases at the Head Office and posters at the Branches. The Bank also opens
temporary branches at Trade Fairs and Exhibitions. The Bank has provided Traffic
Indicators (with the name and emblem of the Bank painted thereon) at select junctions
in Chennai City.

TAMIL NADU GOVERNMENT’S ASSISTANCE UNDER COOPERATIVE

CREDIT:

Cooperative credit institutions play a significant role in extending credit to

formers for undertaking farm operations and also persons living in rural areas to
undertake various economic activities. On account of the successive droughts these
institutions faced financial problems. The government has taken firms steps to provide
additional funds to enable the cooperative credit institutions to be revived.

EQUITY PARTICIPATION OF THE GOVERNMENT OF TAMIL NADU IN

TNSC BANK:

The Government of Tamil Nadu have invested a sum of Rs.20.26 crore in the
ordinary share capital of the Tamil Nadu State Apex Cooperative Bank Ltd., Chennai.
The dividend over and above 3% on this investment would be added to the
Agricultural credit stabilisation fund every year and thereby this fund is being
strengthened continuously.

26
FINANCIAL HIGHLIGHTS OF TNSC BANK:

(Rs. in Crores)

PARTICULARS 31.3.2016 31.3.2017

Paid-Up Share Capital 307.56 312.03
Statutory Reserves 245.83 256.70
Other Reserves 181.38 163.55
Deposits 8212.37 9090.32
Borrowings 3768.72 4605.05
Investments 3154.47 3632.19
Advances 7353.08 5589.97
Working Funds 14401.18 16514.63
Net Profit 43.31 43.70

NABARD AWARDS:

YEAR PERFORMANCE PRIZE

1995-1996 Overall Best Performance Second
1998-1999 Overall Best Performance Second
2000-2001 Overall Best Performance First
2016-2017 Best Performance in Financing of Self Help Groups –

NHFDC AWARDS:

YEAR PERFORMANCE
2005-2006 National Award
2006-2007 President Award for Best Channelising Agency
2008-2009 President Award for Best Channelising Agency

27
2013-2014 President Award for Best Channelising Agency

NCUI AWARD:

YEAR PERFORMANCE
2011-2012 Best Member Cooperative among Short Term Coop. Credit Structure

AWARDS TO ACSTI (SPONSORED BY TNSC BANK):

NCCT AWARD:

YEAR PERFORMANCE
2012- Best Training Institute Award to Agricultural Cooperative Staff Training
2013 Institute of TNSC Bank

INVESTMENTS:

Investments of TNSC Bank in the Government and other approved securities

amounted to Rs.2720.69 crores for the purpose of maintenance of SLR as on
31.3.2015. TNSC Bank has also made investments in shares of non-co-operative
institutions to the extent of Rs.47,000 and in bonds of Public Sector Undertakings
(PSUs) to the extent of Rs.110.35 crores which are not reckoned for the purpose of
computation of Statutory Liquidity Ratio (SLR). The total investment of the Bank
stood at Rs.2831.04 crores as on 31.3.2015 as against the total investment of
Rs.2942.13 crore as on 31.3.2014.

28
The investments in the Government and other approved securities are made by the
Bank for the following purposes :

For maintaining liquid assets as per Section 24 of the Banking Regulation Act, 1949.

For earmarking of securities towards the unutilised balance in the ACS Fund of the
Bank.

To offer as security for borrowings from RBI for Normal Banking Operations (NBO).

To offer as security for borrowings from NABARD for Seasonal Agricultural

Operations and NFS loans under Section 25 of NABARD Act, in lieu of Government
Guarantee.

Human resource development:

In the present era of Liberalisation, Privatisation and Globalisation, all Indian

industries are struggling in facing the challenges posed by the entry of multi-national
corporations in our country . In order to meet the challenges, the Indian industry has
to find out ways and means for improving the quality of the products and the services
rendered. The Human Resources Development Section has given thrust to provide
opportunity to the employees by nominating them to the training programmes, which
enabled the employees in uplifting their attitude towards work, organisation and life
in the highly competitive and challenging times.

Development action plan:

On the advice of the Government of India, NABARD introduced the concept

of Development Action Plan for the S.T. Coop. Credit Structure with an overall view
of bringing sustained viability to all the PACCS and DCCBs in the State. So far,
Memorandum of Understanding had been entered into by the Government of Tamil
Nadu and the Apex Bank with NABARD in 4 phases from 1994-95. The IV phase of
Development Action Plan (DAP)-MoU was executed on 05.05.2008 by the Apex
Bank and the Govt. of Tamil Nadu with NABARD covering a period of five years
from 01.04.2007 to 31.03.2012 with certain revisions/ modifications, which are found
essential for making the said exercise more institution-specific and participative. The

29
Apex Bank subsequently executed MoUs with DCCBs and the DCCBs have in turn
executed MoUs with their respective affiliated PACCS.

Upto III-Phase, the progress achieved at all the three tiers was being reviewed on half-
yearly basis at the State Level Monitoring Committee Meetings convened by the Apex
Bank. From the commencement of IV-Phase of DAP/MoU, the NABARD, R.O.,
Chennai has been reviewing the progress achieved at all the three tiers on quarterly
basis by constituting State Level Task Force (SLTF). In addition, the growth achieved
at DCCBs/ PACCS level was being monitored at District Level Monitoring and
Review Committee Meetings (DLMRC) on quarterly basis.

NABARD, Chennai R.O. vide letter No. TN/29/IDD/Coop. 5A (xii)/2012-13 dated

17.04.2012 had advised the Apex Bank to prepare DAP for the year 2012-13 on the
basis of financial particulars of the Bank as on 31.03.02012 and in the light of the
instructions contained in their Master Circular on DAP- MoU. Accordingly, the Apex
Bank advised the DCCBs to prepare DAP for the year 2012-13 and an MoU has been
executed between the Apex Bank and DCCBs. Similarly, DAP for the Apex Bank has
also been prepared for the year 2012-13.

Though NABARD is not insisting upon for DAP-MoU from 01.04.2012, the Apex
Bank has continued the process of preparing the performance obligations of the Bank
for five years from 2014-15 to 2018-19 as in the case of earlier years.

Further, the Apex Bank has advised the DCCBs to prepare Performance Obligations
(With Quarterly break-up) and Key Action Points for the years from 2014-15 to 2018-
19. All the DCCBs have prepared the same and submitted to the Apex Bank.

Based on the above performance obligations, the growth achieved at DCCBs/ PACCS
level is being monitored at District Level Monitoring and Review Committee
Meetings (DLMRC) on quarterly basis.

DEPOSITS:

As against the DAP Target of Rs.9,000.00 Crore, the Deposit position of the
Apex Bank increased from Rs.7,788.13 Crore as on 31.3.2013 to Rs.9,507.33 Crore as
on 31.3.2014, registering a growth of 22.07%. The total deposit position of all the
DCCBs increased from Rs.17,985.72 Crore as on 31.3.2013 to Rs.21,564.27 Crore as

30
on 31.3.2014. At PACCS level, the deposit position increased from Rs.6,098.32 Crore
as on 31.3.2013 to Rs.6,864.49 Crore as on 31.3.2014.

LOANS AND ADVANCES:

The Apex Bank had issued loans to the extent of Rs.10305.56 Crore as against
the target of Rs.13000 Crore during the year 2013-14. The SCB along with the
affiliates surpassed the target of Rs.4500 Crore set for issue of crop loans as fixed by
the Registrar of Cooperative Societies for year 2013-14 by issuing crop loans to the
extent of Rs.4716.16 Crore. The DCCBs had issued loans to the extent of
Rs.39,561.42 Crore and the PACCS to the extent of Rs.18,750.81 Crore during the
year 2013-14.

Savings account:

Eligibility:

● Individual in personal capacity

● Individual in joint names
● A minor with natural guardian
● A minor over the age of 12 years and who is literate
● Charitable and Educational Institutions, which is non-commercial
● A blind
● An illiterate

31
Formalities:

● Application Form
● Introduction
● Photographs (two)
● Proof of Identity

1. PAN Card
2. Passport
3. Driving License
4. Election Voters Card (EPIC)
5. Utility bills
6. Property / municipal tax receipt
7. Bank account / Post Office savings bank account statement
8. Pension or family pension payment orders (PPOs) issued to retired employees
by Government Departments or Public Sector Undertakings, if they contain
the address

Minimum balance:

● With cheque facility : Rs.1000

● Without cheque facility : Rs.50

Facilities:

● Nomination
● Collection of cheques / drafts
● Standing instructions
● Cheque book
● No TDS on interest

CURRENT ACCOUNT:
Eligibility:
32
 ● Individual in personal capacity
● Individuals in joint names
● Partner / Sole proprietorship firms
● Non-individual accounts such as companies, organisation, Corporations, clubs,
societies, etc.
Cant open current a/c:
● Minor
● Mentally retarded person
● Illiterate person (singly)
● Non-residents
● Pardanasin lady

Formalities:
● Application Form
● Introduction
● Proof of residence
● Photograph
For company
● Board Resolution
● Memorandum of Association
● Articles of Association
● Certificate of Incorporation
● Certificate of Commencement of Business (for public limited companies)

Facilities:
● No restriction on number of operations in the account
● Nomination (for personal and sole proprietorship accounts)
● Collection of cheques, bills, drafts
● Temporary Overdraft

Minimum balance:
● For individuals : Rs.3,000
● For institutions: Rs.5,000

33
RECURRING DEPOSIT:
Eligibility:
● Individual in personal capacity can open.
● Individuals in joint names can open.
● A minor with natural guardian can open.
● Application form necessary.
● Rate of interest as applicable to F.D rates.
● Minimum deposit amount Rs.100 and in multiples of Rs.100.
● Minimum Period 6 months.
● Loan and nomination facility.
● Facility of pre-mature payment.
● Monthly deposit of instalments.
● Monthly instalments can be transferred from Savings Bank / Current Account.

FIXED DEPOSIT:
Eligibility:
● Individual in personal capacity can open.
● Individuals in joint names can open.
● A minor with natural guardian can open.
● Application form necessary.
● Rate of interest as applicable to F.D rates.
● Institutions can open F.D.
● Minimum deposit amount Rs.1000.
● Minimum Period 15 days.
● Payment of interest on monthly, quarterly, half-yearly and annually for deposit
of 1 year and above.
● Loan and nomination facility.
● Facility of pre-mature withdrawal.

CASH CERTIFICATE:

34
 ● As per the details given in F.D.
● Minimum deposit amount Rs.1000.
● Minimum Period 1 year.
● Payment of interest on maturity on Cumulative basis.
● Loan and nomination facility.
● Facility of pre-mature withdrawal.

NRE/NRO DEPOSIT:
LOANS
INTEREST RATES ON NRE DEPOSITS

The Reserve Bank of India had given freedom to the State and Central Coop. Bank to
determine their own deposit rates (except FCNR, NRE and other foreign currency
accounts) with effect from 18.10.1994. With a view to mobilising more deposits,
TNSC Bank revises rates of interest on deposits periodically. The details are as
follows:

Rate as applicable for domestic term deposits

LOAN TO SALARIED EMPLOYEES:

Purpose To meet urgent domestic expenses and / or for purchase of consumer

durables such as furniture, household appliances, etc.
Eligible Permanent / non-transferable employees of the State / Central
persons Government / Quasi-Government or Public Sector Undertakings and
Government approved / aided educational institutions.
Quantum Maximum Rs.3,00,000 or 20 month’s gross salary, whichever is less, in
multiples of thousands.
Rate of 12% p.a. (subject to change from time to time).
Interest
Repayment Upto 60 equated monthly instalments.(12,24,36,48,60)
period

35
HOME NEED LOANS:

Purpose To purchase consumer durables like T.V., two-in-ones, stereo / music

system, CD player, computers, printers, refrigerators, micro ovens and
other electronic goods.
Eligible Employees of State / Central Government, Quasi-Government, Coop.
persons Institutions, Financial institutions, Teachers, Professors, Industrial
establishments, etc., businessmen and professionals like Doctors,
Lawyers, Chartered Accountants, Consultants, Freelance
Photographers, Engineers, etc.
Quantum Maximum Rs.1,00,000 or 90% of the cost of the articles or 12 times of
the monthly gross salary, whichever is less.
Rate of 12% p.a. (subject to change from time to time).
Interest
Repayment 60 equated monthly instalments.
period

EDUCATIONAL LOAN:

Purpose To meet the expenses on tuition fees, examination fees, hostel fees,
including mess bill, cost of books and instruments / equipments, which
are absolutely necessary for the course and any other expenditure
incurred in connection with the studies of the student through the
respective Institution / College / University.
Eligible MBBS / BDS / B.V.Sc., BPT / B.Pharm / BOT, B.Sc., (Agri.) / B.E.
courses (Agri. Engg.), M.Sc., (Agri.) / B.Coop. / M.Coop., B.E., B.Tech.,
B.Arch., M.E., M.Tech., MCA / B.Sc., (Computer Science), BBA / MBA
/ BBM / MBM. etc.,

36
Eligible Any individual in employment with Government / Quasi Government
persons Organizations, Banks and other establishments of repute / private /
public sector undertakings with adequate means to repay the principal
and interest of the loan shall be eligible to apply for the loan, towards his
sons / daughters / wards to pursue the professional courses mentioned
above.
Quantum Rs.2,00,000 for study in India and Rs.3,00,000 for study in abroad or
95% of the expenditure towards the entire course of study, whichever is
less.
Rate of 14% p.a. (subject to change from time to time).
Interest
Repayment 3 to 5 years.
period

HOUSING LOAN:

Purpose To purchase house / flat or construction of house / flat. Loans shall also
be sanctioned for upgradation in the existing house including major
repairs. In the case of existing flats, loans shall be sanctioned for
increase in living space only. For purchase of house / flat, the house / flat
should have been constructed within a period of 15/10 years respectively.
Eligible Any individual in employment with Government / Quasi Government
persons Organizations, Banks and other establishments of repute / private /
public sector undertakings with adequate means to repay the principal
and interest of the loan shall be eligible to apply for the loan.
Quantum Rs. 20,00,000

37
Rate of Currently, 11% p.a. (subject to change from time to time).
Interest
Repayment 15 years EMI. View EMI
period

JEWEL LOAN:
JEWEL LOAN – 365 (BULLET) :

Security Only own gold jewels should be pledged.

Loan Upto Rs.2,000 per gram
Quantum Min. Rs. 3,000/- and Max. Rs. 2 lakh.
Rate of Interest 9.25% p.a. (On Monthly rests) (subject to change from time to time).
Repayment
period 12 months from date of issue.

JEWEL LOAN – ESSENTIAL

Security Only own gold jewels should be pledged.

Loan Upto Rs.2,000 per gram
Quantum Min. Rs.3,000/- and Max. Rs. 3 lakh.
Rate of Interest 9.90% p.a.(On Monthly rests) (subject to change from time to time).
Repayment period One year from the date of issue.

JEWEL LOAN – EDUCATION & CONSUMPTION:

Security Only own gold jewels should be pledged.

Loan Upto Rs.2,000 per gram
Quantum Min. Rs.3,000/- and Max. Rs. 4 lakh.
Rate of Interest 10.25% p.a.(On Monthly rests) (subject to change from time to

38
 time).
Repayment
period One year from the date of issue.

JEWEL LOAN 2003 :

Security Only own gold jewels should be pledged.

Loan Upto Rs.2,000 per gram
Quantum Min. Rs.3,000/- and Max. Rs. 10 lakh.
Rate of Interest 10.50% p.a.(On Monthly rests) (subject to change from time to time).
Period 1 yr

RURAL BANKING:
Agricultural advances:
SHORT-TERM AGRICULTURAL ADVANCES

CREDIT LIMIT SANCTIONED TO CENTRAL COOP. BANKS FOR

FINANCING SEASONAL AGRICULTURAL OPERATIONS

During the year 2014-15, NABARD sanctioned a consolidated credit limit of

Rs.2600 crore to TNSC Bank on behalf of 22 DCCBs for financing Seasonal
Agricultural Operations for cultivating various crops, including cereals. During 2014-
15, TNSC Bank sanctioned credit limits for Rs.1,215 crore from its own resources to
all DCCBS.

ISSUE / OUTSTANDING OF SHORT TERM AGRICULTURAL LOANS BY

DCCBS

The DCCBs issued short term agricultural loans through PACS to the extent of
Rs.5279.91 crores during the year 2014-15 as against the target of Rs.5,000 crore
fixed by the Government of Tamil Nadu. The outstanding under ST-SAO operations
as on 31.3.2015 was Rs.3730.43 crore.

39
CREDIT LIMITS TO DCCBS FOR FINANCING SHORT TERM (OTHERS)

In order to provide one more avenue to raise resources by the DCCBs for their
lending activities during 2014-15, TNSC Bank sanctioned credit limits aggregating
Rs.79.50 crore to 9 DCCBs for: (1) marketing of crops (Produce Pledge Loan) and (2)
purchase, stocking and distribution of chemical fertilisers and other agricultural inputs
for the year 2014-15. The loan outstanding against the DCCBs under these limits as
on 31.3.2015 was Rs.14.90 crore.

GOVERNMENT OF INDIA SUBVENTION

Government of India had implemented the policy of provision of 2% interest

subvention for the year 2007-08 for the own involvement of coop. banks for issuing
crop loans @ 7% upto Rs.3 lakh per borrower. During 2014-15, Government of India
has released the annual claim for 2% interest subvention to coop. banks for a sum of
Rs.19.66 crore relating to the year 2012-13.

GOVERNMENT OF TAMIL NADU INTEREST SUBSIDY

The Government of Tamil Nadu is providing 2% interest subsidy to coop. banks for
their own involvement in issuing crop loans @ 7% per annum. Out of the eligible
amount of Rs.54.55 crore for the year 2014-15, the Government of Tamil Nadu
released a sum of Rs.33.01 crore.

GOVERNMENT OF TAMIL NADU’S INTEREST INCENTIVE SCHEME TO

CROP LOAN BORROWERS, WHO PROMPTLY REPAY THEIR
CROP LOANS BEFORE DUE DATE

The Government of Tamil Nadu vide G.O. Ms. No.94, Cooperation, Food and
Consumer Protection Department, dated 31.7.2009, enhanced the interest incentive
benefit from 3% to 7% to the farmers, who have repaid the farm loan in time,
resulting the interest for crop loan repaid in time will be at 0%.

40
PRIMARY COOPERATIVES DEVELOPMENT FUND

The Primary Cooperatives Development Fund (PCD Fund) was created at the
Apex Bank level in the year 1990 in order to strengthen the Primary Cooperatives in
the State. TNSC Bank and the profit-making DCCBs are required to contribute 5% of
their net profit to the fund from the year 1990-91 onwards. Loans were sanctioned to
PACS out of PCD Fund for establishment of Agro-Service Centre, providing special
jewel loan cash credit, etc. The amount outstanding as on 31.3.2015 was Rs.24.99
crore.

PACS DEPOSIT GUARANTEE FUND (PACS DGF)

With a view to creating a sense of security and confidence in the minds of

depositors in PACS and for giving impetus to the deposit mobilisation by PACS, a
Deposit Guarantee Scheme was introduced in Tamil Nadu in the year 1992-93. The
corpus of the Fund was contributed by the PACS, DCCBs and TNSC Bank in the ratio
of 0.15% : 0.10%, 0.05% of the term deposit held by the PACS, as at the end of the
previous financial year. As per the scheme, in case of liquidation of a society, each
depositor is eligible to receive a maximum of Rs.1 lakh from the Fund. The amount
outstanding as on 31.3.2015 was Rs.118.00 crore.

PRICE STABILISATION FUND

The Government of Tamil Nadu vide G.O. Ms. No.97, Cooperation, Food and
Consumer Protection (H1) Department, dated 1.11.2011, constituted a Fund titled
‘Price Stabilisation Fund’ with the corpus of Rs.50 crore, to extend interest free
financial support to the Cooperatives for effective market intervention by procuring
selected commodities that are proven to abnormal price fluctuation from season to
season and selling them through cooperative outlets at cost price to the public. TNSC
Bank has been managing this Fund from 24.1.2012. As on 31.3.2015, a sum of
Rs.47.37 crore is available in the Fund.

41
AGRICULTURAL CREDIT (STABILISATION) FUND

As per the Rules set out in the G.O. Ms. No.501 dated 8.11.1975 (Cooperation
Department), Government of Tamil Nadu authorised TNSC Bank to administer the
Agricultural Credit (Stabilisation) Fund.

CROP INSURANCE
(Rs. in lakhs)

Extent
No. of Sum Premium Indemnity
Season covered
farmers insured collected paid
(hectares)
Kharif 198295 267031 80036 1150.58 1265.05
2014
Rabi 409230 536576 143182 1700.76 6145.38
2014-15

Non agricultural advances

CASH CREDIT LIMITS

As a part of financial support to DCCBs, TNSC Bank, upto 31.3.2015, had sanctioned
cash credit limits to DCCBs for non-agricultural purposes to the tune of Rs.3137
crore. The total outstanding under the above cash credit accounts as on 31.3.2015
amounted to Rs.1081.90 crore as against Rs.1676.25 crore as on 31.3.2014. Fall in
the price of gold in the market and low credit off take from DCCBs due to surplus
funds are the reasons for decrease.

FINANCING OF SUGAR MILLS – CASH CREDIT LIMITS TO DCCBS

42
For the Sugar Season 2014-15, TNSC Bank has sanctioned cash credit limits to Sugar
Mills under consortium finance for working capital purpose to the tune of Rs.83.58
crore and the outstanding as on 31.3.2015 was Rs.1.96 crore. The sugar mills have
under-utilised the limit due to instant sale of sugar produced and the ways and means
support from the State Government.

SCHEME OF EXTENDING FINANCIAL ASSISTANCE TO SUGAR

UNDERTAKINGS (SEFASU) 2014

In order to help the sugar mills to settle the cane dues to the sugar cane
farmers, the GoI announced the Scheme for Extending Financial Assistance to Sugar
Undertakings (SEFASU) 2014. Under the scheme, TNSC Bank, along with 11 Leader
Banks / DCCBs, have sanctioned medium-term loans to 17 sugar mills to the tune of
Rs.104.01 crore. The period of repayment is 5 years with a moratorium period of 2
years. The sugar mills are eligible for interest subvention @ 12% p.a. for the entire
period of loan, i.e., 5 years.

Weavers finance
SHORT-TERM WEAVERS FINANCE

CREDIT LIMITS SANCTIONED TO DCCBS ON BEHALF OF PWCS

DURING 2014-15

As against the total credit limit application of Rs.183.80 crore submitted to NABARD
by TNSC Bank for financing PWCS for production of Handloom and Powerloom
Weavers Coop. Societies for the year 2014-15, NABARD had sanctioned a
consolidated credit limit of Rs.120 crore to TNSC Bank on behalf of the 17 eligible
DCCBs. However, TNSC Bank had sanctioned the balance limit of Rs.63.80 crore
from its own resources, so as to provide sufficient financial support to PWCS.

43
SELF HELP GROUPS

FINANCING OF SELF HELP GROUPS BY THE COOPERATIVE BANKS

The Government of Tamil Nadu through the Tamil Nadu Corporation for
Development of Women Ltd. has implemented a scheme,called “Mahalir Thittam”.
The Self Help Groups are provided financial support .Under the SHG-Bank Linkage
Programme introduced by the NABARD,the Cooperative Banks provide financial
assistance to the Self Help Groups fulfilling the following criteria.

Eligibility Criteria (Stage I)

1. Group in active existence for over six months.
2. Group size in the range of 12 to 20 members.
3. Minimum of two meetings per month.
4. Group (not individual members) not a defaulter of Bank loans.
5. Recovery of both internal and external loans not less than 85%.
6. Availing of internal loans by not less than 50% members.
7. Regular savings by all members.
8. Proper maintenance of books of Accounts.

The groups which passed through the above screening process, by complying with all
these eight essential parameters should alone be taken up for credit rating. Groups
which cannot fulfill all the eight parameters should be rejected in the first phase itself
and should not be taken up for rating of Groups. Such groups are always free to
reapply when they fulfill the minimum criteria.

Credit Rating of Shgs (Stage II),

Once the Self Help Groups fulfill the above eligibility criteria, they will be taken up
for grading / Credit rating under which marks are awarded for the following aspects.

ELIGIBLE
SL.NO CREDIT RATING INDEX
MARKS
1. Frequency of groups meeting (4/m,2/m,1/m) 10,5,2
2. Attendance of group meetings (>90%,75-90%,<75%) 10,5,0

44
3. Members of involvement in group(High,Medium,Low) 10,7,3
4. Savings frequency(4/m,3/m,2/m,1/m) 5,4,3,2
5. Savings Rate(Rate by group,Rate by ext.agency) 5,3
6. Average savings by members(>20,10-20,<10) 5,3,2
7. Interest rate on internal loans (different rate,fixed rate) 5,3
Degree of rotation of savings as internal loans.(>One
8. time,<One time) 5,3
9. Repayment of internal loans (100%,90-99%,85-89%,85%) 01,7,3,0
Booking keeping.(All 7 books maintained, less 7 books
10. maintained) 10,5,0
Total Marks Scored Max 85

The guidelines for selection of 6 months-2 years old SHG for Bank Loan are as
under.

● The SHGs scoring 55marks and above can be considered for a credit limit of
not less than 4 times of its savings.
● SHG, scoring 35-54 marks, need not be considered for credit at present. The
SHG shall be motivated to improve its performance, keeping the current rating
as the base. On improving the performance to the expected level, the group
may be re-evaluated for selection.
● SHGs scoring less than 35 marks should not be considered for credit
assistance now. The Group may approach for re-evaluation, after the period of
six months, on fulfillment of performance norms, as per rating chart.
SELF HELP GROUPS:
In respect of SHGs functioning more than two years, the total maximum scores will
be 100,after allotting 5 marks for Adequacy of Group reserve Fund and 10 marks for
Auditing of Group Accounts. The guidelines for selection of SHGs over 2 years old
for Bank loans are as under. The SHGs scoring 70 marks and above can be considered
for a credit limit of not less than 4 times of its savings. SHG, scoring 50-69 marks,
need not be considered for credit at present. The SHG shall be motivated to improve

45
its performance, keeping the current rating as the base. On improving the performance
to the expected level, the group may be re-evaluated for selection. SHGs scoring less
than 50 marks should not be considered for credit assistance now. The Group may
approach for re-evaluation, after the period of six months, on fulfillment of
performance norms, as per rating chart.

Credit Limits:
Based on the rating of groups done by the joint Appraisal Committee, the following
credit limits will be sanctioned by the Bank to the SHGs. The SHG will be sanctioned
a term loan or revolving credit to the tune of not less than 1:4-Savings:Credit Limit
Ratio. To start with the first loan may be given to an extent of 4 times of savings.
After evaluating performance of group in the long run, subsequent credit limits may
be fixed at more than 1:4 ratio also. It may be scaled upto 1:15 or even more in stages.
The discretion of fixing the higher limits exceeding 4 times of savings to a group will
be given to the Joint Appraisal Committee represented by Bank, NGO and PIU.

PURPOSE OF LOAN:

The loan may be utilized for productive purposes or consumption purposes or both.
However, groups must be motivated to use credit to use credit mainly for productive
purpose, as consumption loans do not generate any income to repay the loan dues.

TYPE OF LOAN:

The guidelines for selection of 6 months-2 years old SHG for Bank Loan are as under.

TERM LOAN:

Since most members will utilize the SHG loan for rural farm and non-farm activities,
which generate income at regular intervals, loans for Mahalir Thittam groups can be
sanctioned as term loans. Bank may consider, on merit, sanction of a second or
subsequent loan to Self Help Groups, in consultation with the NGO and PIU.

REVOLVING CREDIT:

46
SHG can receive revolving credit also from banks. Revolving credit is a running
account like a cash credit. Revolving credit will avoid opening of many loan accounts
in the name of same group in the long run. More the turnover (by way of larger and
frequent credit) in the account, higher will be the total loans availed by SHG from the
account, by way of any number of withdrawals by the SHG to meet member’s loan
needs, upto the loan sanctioned. The limit will be reviewed, every year. Based on the
performance of revolving credit account and functioning of SHG, renewal/
enhancement of limit can be considered by bank, in consultation with NGO and PIU
at the end of every year. For fixing enhanced limits at the beginning of the second
year, the group savings, as on the last day of first year, should be considered as the
base. The option of sanctioning term loan or revolving credit is given to SHG and
bank. Hence, revolving credit may be sanctioned to SHGs performing to SHGs
performing well, very selectively.

MARGIN:

No margin is necessary, irrespective of loan amount. Group savings should not be

blocked for meeting the margin money. Subsidy is not being contemplated under this
scheme by TNCDW. However, other schemes, like TAHDCO and NBCFDC micro-
credit schemes will be dovetailed with MT and made available to SHGs, with the
same minimum eligibility criteria and credit rating system. Subsidy and margins
would be as per the guidelines under the respective schemes.

RATE OF INTEREST:

The present interest rate structure, as stipulated by RBI/NABARD at different levels

under SHG-Bank linkage Programme, is as under:

NABARD to SCB (Refinance) : 6.00%*

Banks to Self Help Groups : 9.00%*upto Rs.50000/-
Self Help Groups to members : As per SHG’s decision

47
(*- Subject to revision from time to time as per RBI/NABARD guidelines)

SECURITY:

All group members are jointly and severally responsible for prompt repayment of
loans. No collateral security will be insisted upon. Under no circumstances, group
savings should be blocked as security.

MODE OF DISPURSEMENT:

Loan will be released in one Lump-sum or in stages, as requested by group to the

credit of group’s savings account. As per group’s resolution, group will draw the
amount and pay to needy members.

REPAYMENT PERIOD:
TERM LOAN:

There is no holiday for repayment. No fixed repayment period can be prescribed.

Repayment period will be decided by bank and SHG, jointly.

REVOLVING PERIOD:

It will be allowed to continue as running account. However, the turnover in the

account, (credit summations during the year) should not be less than the limit
sanctioned. At the end of every year, the account has to be reviewed and renewed by
the bank after studying the group’s performance and suitable limit sanctioned.
However, interest charged by the bank for both term loan and revolving credit has to
be paid by the groups promptly.

Books And Registers To Be Maintained By The Shgs:

The following Books and Registers are to be maintained by every group. Attendance
Register. Minutes Book. Savings Ledger. Loan Ledger. General Ledger and Cash
Book. Individual Pass Book Subscription Register.

As at the end of March 2005,the DCCBs/PACBs provided financial assistance to

44498 SHGs in Tamil Nadu.

Amount outstanding at the DCCBs/PACBs level as on 31.03.2005 –Rs10191.73

Lakhs. TNSC Bank provides refinance to the DCCBs for financing SHGs.SHGs can
avail loans through the DCCBs and PACBs.

48
Term loans

FINANCING OF SSI / SRTO / HOTEL INDUSTRY / NURSING HOMES, ETC.

As per the programmes of the Government and Reserve Bank of India, TNSC Bank
enabled the Central Coop. Banks to diversify by extension of financial assistance for
activities such as SSI, SRTO, Hotel Industry, Nursing Home under the refinance
schemes of SIDBI. The Schemes also enabled the Central Coop. Banks to play a vital
role in the employment generation and in self-employment.

MEDIUM TERM ADVANCES

INVESTMENT CREDIT

During the year 2014-15, 22 Dist. Central Coop. Banks were extended with aggregate
refinance of Rs.330.25 crore under Investment Credit for various purposes.

Subsidy scheme of NABARD & GOI

1. Subsidy schemes are available for the following:
2. Poultry Venture Capital Fund
3. Dairy Entrepreneurship Development Scheme
4. Fisheries
5. Self Help Groups / Joint Liability Groups
6. Agro Clinic and Agri Business Centre
7. Agro Processing

THE TAMIL NADU STATE APEX CO-OPERATIVE BANK LTD.CHENNAI

The Cooperative Banks functioning in Tamil Nadu are fulfilling the credit
requirements of the farmers, weavers, rural artisans, consumers of urban area. These
institutions are known as Cooperative Credit Institutions. The Coop. institutions are
functioning under two category. They are: long-term coop. credit institutions, short-
term coop. credit institutions. The coop. credit institutions functioning under short-
term credit structure are of three-tier in nature. At the grass root level, the Primary
Agricultural Coop. Banks (PACBs) are functioning at village level. At the district
level, the Central Coop. Banks (CCBs) are functioning with the headquarters at

49
district capital and their branches in various places of the districts concerned. At the
apex level, the Tamil Nadu State Apex Coop. Bank Ltd., (TNSC Bank) is functioning
at Chennai which co-ordinates the entire short- term coop. credit structure. The Tamil
Nadu State Apex Co-operative Bank Ltd., commenced its business during November
1905 as an Urban Coop. Bank. It was subsequently changed into a District Central
Coop. Bank during July 1920. At present, the Bank is functioning at Chennai with 44
branches, an Extension Counter and H.O. TNSC Bank is guiding the Dist. Central
Coop. Banks / Primary Agricultural Coop. Banks in their functioning and it is playing
a major role in the coop. movement of Tamil Nadu. TNSC Bank was formed in the
year in which the coop. movement of Tamil Nadu was formed. As such, the Bank has
been serving the people of Tamil Nadu for a centenary for their economic
development. As far as Indian coop. movement is concerned, the Bank has
commenced its business from the very next year of the formation of coop. movement
in India.

TNSC Bank is the first ever State Coop. Bank having the credit of celebrating the
centenary year. TNSC Bank has got the licence of Reserve Bank of India to carry on
the banking business. TNSC Bank is a Scheduled Coop. Bank and has been listed
under the Second Schedule of RBI Act. TNSC Bank is a member of the Deposit
Insurance and Credit Guarantee Corporation (DICGC) and is an insured coop. bank as
per DICGC Act. TNSC Bank has got the privilege of having its share capital by the
Government of Tamil Nadu. TNSC Bank has been under close supervision and
monitoring of the higher financing agencies, viz., RBI, NABARD. Periodical
inspection and supervision are done by NABARD as per RBI guidelines. Government
of Tamil Nadu is reviewing the performance of the Bank periodically. Eminent Co-
operators have contributed for the growth and development of the TNSC Bank. The
financial growth of the Bank is in a commendable position. They are as follows.

SHARE CAPTIAL

a) Authorised Share Capital Rs.100.00 crores

b) Share capital held by DCCBs Rs.53.22 crores
c) By State Government Rs. 0.26 crores
Total Rs.53.48 crores

50
RESERVES

The Bank has total reserves of Rs.467.58 crores as on 31.3.2006. The statutory
reserve constitutes Rs151.32 crores. The growth of reserves is given in the following
table:

As on Amount (Rs. in crores)

30.06.1980 17.58
30.06.1990 49.90
31.03.1995 102.26
31.03.2005 439.14
31.03.2006 467.58

DEPOSITS

On deposit mobilisation front, the Bank has achieved much. The Apex Bank has
mobilised a sum of Rs.3126.78 crores as on 31.03.2006. The growth of deposits is
shown in the following table:

As on Amount (Rs. in crores)

30.06.1980 130.30
30.06.1990 387.24
31.03.1995 760.29
31.03.2005 3062.58
31.03.2006 3126.78

The Bank has been extending the facility of NRO/NRE accounts at 7 of its branches.

51
BORROWINGS

The Apex Bank is getting refinance assistance by way of borrowings from National
Bank for Agriculture and Rural Development (NABARD) for extending credit
facilities to the farmers for short-term agricultural operations, and medium-term loans
through DCCBs, weavers finance through the DCCBs / Co-optex, from Small
Industries Development Bank of India (SIDBI) for extending credit facilities for small
scale industries, National Coop. Development Corporation (NCDC) and from
National Handicapped Finance Development Corporation (NHFDC) for financing for
the development of physically challenged persons through DCCBs. The total
borrowings of the Bank as on 31.3.2006 was Rs.1206.76 crores.

INVESTMENTS

The Bank has to make investments in Government approved securities for the
statutory liquidity ratio (SLR) purposes. The Bank has been investing its funds in the
Central Government / State Government’s approved securities. As on 31.3.2006, the
Bank has total investments of Rs.1105.36 crores. The Bank has a separate Treasury
Section to deal with treasury operations on its behalf as well as its affiliates, viz.,
DCCBs and Urban Co-op. Banks.

ADVANCES

Through DCCBs, TNSC Bank has been extending credit facilities to the PACBs for
short- term / medium-term agricultural purposes. Depending upon the needs of the
farmers the Bank has been extending advances upto Rs.1000 crores per year. Further,
the Bank has been extending credit facilities through the above channel for the allied
activities of farmers like purchasing milch animals, sheep rearing, poultry farming,
bullock carts, sericulture at lesser interest rates. The Bank has been extending credit
facility to the DCCBs for extending loans directly by them to small industries and
Urban Coop. Banks from the refinance facility availed from SIDBI. The Bank has
been extending cash credit limits for financing Coop. Sugar Mills, Coop. Spinning
Mills, Coop. Wholesale Stores, and other coop. institutions. The availment of jewel
loans at rural and urban areas has been increasing year after year. In order to meet this
credit needs, the Bank has been extending refinance facility to the DCCBs for issuing

52
jewel loans directly by them and also through PACBs. The Apex Coop. Institutions
functioning at Chennai are getting credit facilities from the Bank . Out of the
refinance availed by the Bank from NHFDC, the Bank has been extending finance to
the DCCBs for issuing loans to physically challenged persons. The Bank has been
extending various loans to individuals directly through the Branches and H.O. at
Chennai. Further, the Bank has been extending jewel loan facility at lower interest
rate to the middle-income group people. The Bank has also been extending Computer
Loan, Education Loan, Building Mortgage Loan, Housing Loan, Rain Water
Harvesting Loans, Home Needs Loan, Loans against Securities, through the Branches
and H.O. As on 31.3.2006, the total loans and advances of the Bank stood at
Rs.3040.71 crores.

WORKING FUNDS

The working funds of the Bank has been increasing year after year. As on 31.3.2006,
the working funds of the Bank was Rs.5068.43 crores. The growth of working funds
of the Bank can be seen from the following table:

As on Amount (Rs. in crores)

30.06.1980 194.51
30.06.1990 789.33
31.03.1995 1726.33
31.03.2005 4788.75
31.03.2006 5068.43

AFFILIATES DEVELOPMENT PROGRAMME

The Apex Bank, having in mind the leadership role to be played in relation to the
DCCBs and PACBs, is making grants every year from out of its profits for creation of
various infrastructure facilities at the DCCB level. A programme called “Affiliates
Development Programme” started in the year 1990-91 is being implemented by
providing computers, plain paper copier machines, fax machines, vehicles (jeeps) to
the DCCBs in order to improve their working performance. The Apex Bank is also
extending such facilities to the PACBs in the State by providing financial assistance

53
for purchase of jewel safe boxes, putting up modern counters, etc. A Deposit
Guarantee Scheme is being implemented by the Apex Bank. The premium for this
Scheme has been shared by the Apex Bank, Dist. Central Coop. Banks and PACBs.
This Scheme has been implemented every year and the affiliates are getting benefit
out of it.

PRIMARY COOPERATIVES DEVELOPMENT FUND (PCDF)

In addition to the grant of financial assistance to the DCCBs and PACBs from out of
the profit every year, the Bank is also contributing 5% of the net profit every year to
the Primary Coop. Development Fund (PCDF) created in our state. The DCCBs who
are making profits are also making contributions at the same rate every year. From out
of the above Fund, the PACBs are being helped to purchase jewel safe boxes, putting
up modern counters and construction of bank buildings. “Cooperation among
Cooperatives” and “Cooperative Education” are two important principles of
Cooperation. In order to uphold these principles, every coop. institution has been
contributing 5% of its net profits to the “Coop. Research and Development Fund” and
“Cooperative Education Fund” maintained by Tamil Nadu Cooperative Union. For
these Funds, the TNSC Bank has been contributing 5% of its net profit every year.

AWARDS TO DCCBS / PACBS

In order to create a healthy competition among the CCBs, the Bank has been
implementing Best Performance Award Scheme from the year 1990-91 based on their
performances. A Committee under the Chairmanship of the Secretary to the
Government, Cooperation Department of Government of Tamil Nadu, will select the
Best Performing Bank. Under the Scheme of Development Action Plan implemented
under the aegis of NABARD, one PACB from each DCCB’s jurisdiction will be
selected based on the performance and will be awarded every year. The Scheme was
introduced during the year 1994-95.

AGRICULTURAL COOPERATIVE STAFF TRAINING INSTITUTE (ACSTI)

The Apex Bank has established a Training Institute at Madhavaram, Chennai, with a
financial assistance extended by National Co-op. Development Corporation (NCDC).
The ACSTI, manned by Faculties from the Apex Bank, is providing training to

54
employees of Apex Bank, DCCBs, PACBs and Urban Co-op. Banks on all banking
related subjects. The ACSTI trained 27,649 persons of SCB, DCCBs, PACBs, Urban
Co-op. Banks upto 31.03.2006.

PROFIT

The Bank has been making profit continuously since its inception and for the year
2005-2006 the Bank has earned a profit of Rs.28.02 crores. This is 10.40% higher
than the profit reported for 2004-2005.

ACHIEVEMENTS:

1. ACSTI has completed 25 years of glorious service and marching forward in its
26th year.
2. ACSTI was ranked as the ‘Best Performing ACSTI’ among all ACSTIs in
India by NAFSCOB and announced 1st Prize for the year 2013-14. In the
National Colloquium held at New Delhi on 1.12.2014, ACSTI was adjudged
as the Second Best Performing ACSTI by National Council for Co-op.
Training, New Delhi.
3. NAFSCOB has also announced 3rd Prize as the ‘Best Performing ACSTI’ for
the year 2012-13.

55
 WORK EXPERIENCE

The first few days at the internship, was spent introducing myself to the staffs and
manager at the Bank. My work guide Mr.Mohammed Kasali the Chief Branch
Manager of the bank, helped me understand the various procedures involved in the
daily operations of the bank and allowed me to help with the banking operations. I
was assigned to staff of various departments each day where I was set to work under
them helping them with their working operations, this way I got to learn the
procedures involved in banking in each department of the banking sector. I was also
sent outside to issue pamphlets along with the bank staff one day inorder to promote
the bank.

Working with the staff, I began to observe all the bank activities and the entries and
corrections made by them in day to day banking activates. All the transactions that
are proceeded have to be processed and authorized by the manager to gain clearance
once that is done the transaction is entered through core banking software. The main
objective of using the software is to have a digital record of all the transactions done
and also make the bank more efficient.

The transactions carried out by the bank were processed through an online software
called as core banking software, it is widely used in most of the nationalized banks
throughout India. This software helps the bankto function more effectively and
efficiently without any confusion pertaining to the misappropriation of funds
repetition of previously cleared transactions.

The bank is specialised in lending jewel loans and loans to self help groups, they have
also provided large number of jewel loans to customers upto a certain limit per
customer, loan is provided only to customers who previously own savings bank
account or recurring deposit account, if not a new account will be opened for them in
which the loan amount will be transferred to.

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The process involved in opening a savings bank account was clearly explained to me
by the staff. The manager has to analyse whether the customer is eligible to open an
account with the bank, he should also consider the customers accessibility towards the
branch if the conditions favourable the manager will provide the customers with
necessary forms to be filled towards a new account opening. The customer is required
to provide necessary details that confirm his occupation and address as it is vital
information that is formally required for an account opening. The customer may
provide his Driving license, voter id, Aadhar card, pan card etc, as proof towards his
identity and residency.

During my internship I got to meet customers of the Bank and officials who
occasionally visited the bank. Some customers were more regular than others, due to
the effects of frequent fund transfer or regular clearing etc.,

The bank was given restriction on collecting amount more than 25000 directly from
the teller. They have to collect the token from the staff and then they will be called
after the amount is authorized and “Q” is given by the Chief manager.

The process of issuing a cheque book involves acquiring a cheque book and analyzing
the number of leaves it containbs and the cheque leaf number, this number is entered
in the ledger specially made for issuing cheque books, the customer name, account
number and number of leaves in the cheque book are entered in the ledger. When the
customer acquires the cheque book he is required to affix his signature in the ledger
across his details. This was my one of the daily activity. Savings account holder will
receive a cheque book with 10 leaves and current account will be given 20 leaves.

Everyday there will be few online transations specially NEFT(National Electronic

Fund Transfer) and RTGS(Real Time Gross Services) were carried out regularly. The
customers were charged a specific amount on the amount they transfer. This helped
customer for easy and quick transfer of cash.

I was also asked to call and inform the customers who maintain lockers in the bank to
pay their due against the locker rent. If their savings account has any amount more
than the minimum balance then the bank automatically debit the rent for the locker
from it.

DAILY OPERATIONS:

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The daily operations of the bank mostly comprised of receiving deposits, lending
loans, and answering queries of the customer. I was given work related to every
department in the branch I worked in. I was taught to pass entries in the pass book of
the customers, enter the details regarding to the issue of cheque book and sealing and
stamping the pass book and cheques books and see if proper receipts are produced for
them, provide necessary answers to the customers regarding opening a account both
savings, fixed and for recurring deposit. I was also asked to enter the pay order which
was passed by the staff in the ledger maintained against it and get a signature from the
customer and produce to them.

The customers also asked queried relating to rate of interest against the jewel loans
and also against the fixed deposit pertaining to the time period. The methods of
functioning in the bank was also interesting to learn, there was a particular patter of
coordination in their work which I had to get used to, the staff normally passed ques
for the normal receipts and deposits made, these were then authorized by the manager
which would again have to be approved by the staff. If it is a receipt then it goes
through the formal que and then is sent to the teller or cashier instead.

This way I learnt the entire functioning of the bank, the interest rates of the banks and
the procedure to open a new savings account, fixed deposit, and recurring deposit, and
also the various procedures than a person would have to go through to obtain a jewel
loan.

SPECIAL OPERATIONS:

I was asked to arrange the specimen according to the number and also find any
specimen if any closing account is required by the customer. I also asked to arrange
all the receipts and payments chellans and check them with the system particulars
inorder to maintain and check all the invoice are there or not.

The manager asked to send letters to all the branches of the TNSC bank regarding
inviting then for the branch day on December 27. I was also asked to collect pancard
Xerox and aadhar card Xerox from the customer since government made it mandatory
to affix with the bank account of every individuals.

Working in bank enabled me to understand some aspects of being successful as a

customer representative. The first thing I realized was that communication is usually

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and essential aspect to success. It is also important for an individual to have the
ability of multitasking during the working hours. This will make him flexible in the
workplace. In banks, it usually manadatory to ask the right questions at the
appropriate time. On the other hand, I also realized that it is individual has to have a
professional attitude in order to fit in the competitive market. At the same time, one
should have the ability to network with people in the chosen professional field.

It is important for people to involve themselves in internship programs in order to be

in a position of understanding the important aspect of the work. In the study of
business management, individuals are usually encouraged to associate with other
people so that they would be in a position of gaining experience in the field.

These were the major activities that I had performed during my internship. That
experience made me learn a lot. I learned how to communicate formally with people.
The workplace attitude is very important as well. You have to be ready to face new
task, new challenges and meet new people. You need to have the will to do well
inorder to exceed expectations and succeed in your career.

I also had an experiencing of communicating with the clients which comes with a lot
of responsibility as client satisfaction is the priority of the business and you have to be
able to show that you care for them and do not disappoint them. As an employee of a
bank one should be aware of the manner in which the major industries of the country
are working in. Although practical experience was difficult form what I had learnt
during my time as a student but this would not have been possible without the
knowledge that I had gained from studying. Until now I had just solved case studies
on paper and solved financial ratios questions in exam but at the bank I was actually
applying that knowledge which was quite satisfying. If I had not practiced such
questions in exams then it would have been almost impossible for me to conduct a
financial analysis practically.

Through this experience I also improved my communication skills. I think my

confidence level also increases time passed by as I became more comfortable in
taking with new unknown people and by looking at the manner in which my
supervisor worked I also realized that what are the requirements of being a true
professional. It takes hardwork, dedication and determination.

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 SKILLS ACQUIRED

THE FOLLOWING ARE SKILLS ACQUIRED FROM

INTERNSHIP:

As an intern in Tamil Nadu State Apex Cooperative Bank, Triplicane, I got to

learn many things in the work environment and improved my skills in various
discipline and also raised to the standard of the current employees and executives
especially, others include

Adaptability:

By exposing myself to the new environment the first thing that I had to learn
was to adapt myself to it. The banking activities and the internal culture were very
easy to adapt to and helped me understand more about the Bank. For every job it is
important to adapt ourself to its working environment.

Patience:

Patience is one of the most important skill that may be required in a bank as
sometime there may not be many customers to tend to. Personally as an intern I was
given only specific work to do and hence I had to wait for it. There are also times
when the work guide was busy hence I had to wait for him to finish his work.

Time Management:

The Bank as a branch, has the responsibility to follow the rules set by the head
office. The head office also has answers to many other authorities such as NABARD,
RBI etc., hence any time limit set by them is to be followed by the branches. This

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way the work pertaining to the filing Form-16 had a specific time limit that I had to
comply with.

CUSTOMER RELATIONSHIP BUILDING:

In Banking the most important skill to acquire is customer relations as they are
the key to the development and growth of the Bank. The work guide allowed me to
interact with the customers and build a relationship by getting to know them better
and also clearing their queries filling their forms and providing necessary information
to help them have a clear picture of the current banking situation. At the time there
was the problem of Filing the form 16-H to avoid tax deduction in fixed deposit
account and many customers had questions relating to the amount upto which the tax
will not be claimed and asked whether it is mandatory to give form if they have two
accounts.

Collaboration:

Working in the bank I realized that they work along with other banks of other
organizations towards the clearance of cheques and NEFT and RTGS transactions. If
there is any problem in transaction the amount will be recredited or the transaction
will be passed on in a couple of days. This way the banks work together on various
occasion.

Positive approach:

As an intern I had to develop a positive approach towards the new working

environment. The Staff and Manager helped me to understand the daily banking
activities very easily which itself induced a yearning to learn more about the banking
activates many various processes involved.

Analytical thinking:
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 The Banking industry is primarily concerned with the risk management.
Successful banking professionals excel at managing risk precisely because of their
analytical behaviour. Banking requires incredibly strong lateral and analytical
thinking. Like consultants, banking professionals are valued for the ability to think
outside the box, solve problems, and predict and avert problems that have not yet
materialized. To this end, banking requires not only an ability to remain incredibly
sharp, but learn quickly and grasp new concepts with ease. This level of analytical
rigour naturally lends itself to intellectual curiosity as well as innovation. The most
successful banking analysts not only complete their own work objectives, but also
take a broad interest in the work of their colleagues, and how different work loads
contribute under an umbrella project. Successful professionals in the banking sector
fervently ask questions not only as a mean to demonstrate nuanced approach to work
objectives and unwillingness to cut corners, but also to identify new methods and
efficiencies that streamline processes.

Critical thinking:

Critical thinking skills are the most important problem solving skills a
investment banking professional can possess. Critical thinking skills are those that
allow investment banking professionals to see the intricate details of a problem
unemotionally and then turn the problem into an opportunity-an opportunity to
improve, learn, or earn.

Decisiveness:

In order to efficiently solve problems solving skills a investment banking

professionals need to be decisive. Once you have analysed the problem and
contemplated prospective solutions, you must be able to select a solution and then
implement it without being “flighty” or changing your mind. You must be able to
make a solution quickly and implement it quickly in order to keep additional
problems from forming.

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People skills:

With no people skills, investment banking professionals will not go far in

problem solving or in their job overall for that matter. In additional to simply
understanding and relating to people in order to be a good problem solver, investment
banking professionals must understand how to think with a team, not just make a one
sided decision when solving problems. Understanding teamwork and utilizing the
strengths of team members can help every investment banking professional be an
effective problem solver.

Technical skills:

Most of the work involved working on Microsoft excel as data had to entered
in it to have a digital copy of all accounts that have been handled on daily basis. The
details pertaining to the customers including the Pan card, Aadhar card, and any other
identification of each customer were also entered to have a detailed picture of the
customers financial status and track their progress through their financial
development.

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 SUGGESTION TO IMPROVE INTERNSHIP

 Their should be opportunity to do the internship even outside the city and state
in order to improve their communication even with other people.

 Work period of the internship should be more enough for the students to learn.
As current period won’t be great full for the learning and working.

 Importance should also be given to the students presentation rather than the
importance given to report

 College can ask the students to visit the college and their respective staff
regarding their internship status.

 Different field such as entrepreneurship , marketing etc… should allow

students to do the internship.

 Report content can also be reduced.

Student should be allowed to do internship even in the same firm in order increase
their team spirit and coordination in their work.

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 CONCLUSION

The work I did as an intern in Tamil Nadu State Apex Cooperative bank Triplicane,
under the guidance of Mr.Mohammed Kasali, the Chief Branch Manager proved to be
fruitful as it successfully provided me a proper working environment where I was able
to improve my knowledge upon the subject, the banking procedures involved on both
the bankers and customers perspective I also was introduced to find the customer id
number from the system and mention it in their savings account opening form since
NABARD has announced for an inspection before Jan.10.

At the time of my internship there were other problems relating to Aadhar card
attaching with the Bank accounts and also submitting Form 16G and 16H inorder to
evade tax. From their I learnt the secure banking process and the calculation of tax at
source for those customers maintain fixed deposit. This way the work I had done at
the Bank as an intern had not only increased my knowledge on the subject but also
made me a part of the Branch, I have successfully learnt and also experienced the
work carried out in a bank and have a positive attitude to approach bank for future job
opportunity as well.

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 LIMITATIONS

 Slow process of work.

 No ATM machines.

 Repeated system and server problem because of this bank has been closed its
function for two days.

 No internet facilities for both staffs and customers.

 There is no sign for improvement of technology, same old method will be

followed even in feature.

 All staffs are unionized.

 Some staffs are irresponsible towards their customer.

 Customer information are not secured.

 Some important files are not properly maintained regarding the bank details
and accounting details.

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