Report On Internship at MUCO Bank LTD.: Chapter - 1

Report on internship at MUCO Bank Ltd.
CHAPTER – 1
INTRODUCTION
DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

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1.1 Profile of the Credit Co-operative Society
Introduction
The economic development of any country largely depends on its financial system, it
includes efficient and effective mobilizing and allocation of financial resources. There are
different type of banks and financial institutions that perform this function, one of them is
“Urban Co-operative Banks (UCBs)”. UCBs banks are unique financial institutions that
performs the special task of providing banking facilities to the urban and semi urban areas
especially for nonagricultural sectors i.e. Trades, small manufacturers, distributers,
technical and nontechnical service providers.
Meaning of co-operative society

Karnataka co-operative societies act, 1959 defines
A cooperative is "an autonomous association of persons united voluntarily to meet their
common economic, social, and cultural needs and aspirations through a jointly-owned
and democratically-controlled enterprise".
The main types of cooperative societies are :-
1. Consumer’s cooperative societies

2. Producer’s cooperatives
3. Industrial service cooperatives
4. Manufacturing cooperatives
5. Marketing Cooperatives
6. Cooperative Farming Societies
7. Housing Cooperatives
8. Credit Cooperatives
1. Consumers cooperative societies

Consumers' cooperatives are formed by the consumers to obtain their daily requirements at
reasonable prices. Such a society buys goods directly from manufacturers and wholesalers
to eliminate the profits of middlemen.

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These societies protect lower and middle class people from the exploitation of profit
hungry businessmen. The profits of the society are distributed among members in the ratio
of purchases made by them during the year.
Consumer's cooperatives or cooperative stores are working mainly in urban areas in India.
Super bazar working under the control of Government is an example of consumers'
cooperative society.
2. Producers cooperatives
Producers or industrial cooperatives are voluntary associations of small producers and
artisans who join hands to face competition and increase production. These societies are of
two types.
(a) Industrial service cooperatives

In this type, the producers work independently and sell their industrial output to the
cooperative society. The society undertakes to supply raw materials, tools and machinery
to the members. The output of members is marketed by the society.
(b) Manufacturing cooperatives

In this type, producer members are treated as employees of the society and are paid wages
for their work. The society provides raw material and equipment to every member.
The members produce goods at a common place or in their houses. The society sells the
output in the market and its profits are distributed among the members.
3. Marketing Cooperatives
These are voluntary associations of independent producers who want to sell their output at
remunerative prices. The output of different members is pooled and sold through a
centralized agency to eliminate middlemen. The sale proceeds are distributed among the
members in the ratio of their outputs.As a central sales agency, the society may also
perform important marketing functions such as processing, grading and packaging the
output, advertising and exporting products, warehousing and transportation, etc.

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Marketing societies are set up generally by farmers, artisans and small producers who find
it difficult to face competition in the market and to perform necessary marketing functions
individually. The National Agricultural Cooperative Marketing Federation (NAFED) is an
example of marketing cooperative in India.
4. Cooperative Farming Societies

These are voluntary associations of small farmers who join together to obtain the
economies of large scale farming. In India farmers are economically weak and their land-
holdings are small.
In their individual capacity, they are unable to use modern tools, seeds, fertilizers, etc.
They pool their lands and do farming collectively with the help of modern technology to
maximum agricultural output.
5. Housing Cooperatives
These societies are formed by low and middle income group people in urban areas to have
a house of their own. Housing cooperatives are of different types. Some societies acquire
land and give the plots to the members for constructing their own houses.
They also arrange loans from financial institutions and Government agencies. Other
societies themselves construct houses and allot them to the members who make payment in
installments.
6. Credit Cooperatives
These societies are formed by poor people to provide financial help and to develop the
habit of savings among members. They help to protect members from exploitation of
money lenders who charge exorbitant interest from borrowers.
Credit cooperatives are found in both urban and rural areas. In rural areas, agricultural
credit societies provide loans to members mainly for agricultural activities. In urban areas,
non-agricultural societies or urban banks offer credit facilities to the members for
household needs. In India, several national federations of cooperative societies have been
formed. National Cooperative Consumers Federation, National Federation of Cooperative
Sugar Factories, National Agricultural Cooperative Marketing Federation, National

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Cooperative Dairy Federation, National Cooperative Housing Federation, All India State
Cooperative Banks Federation is some examples.
Meaning of Co-operative Bank

Section 2(b-1) of Karnataka co-operative societies act, 1959
Defines co-operative bank as meaning a co-operative society which is doing the business
of banking and section 2 defines co-operative society as a society registered or deemed to
be registered under this act. As per Section 5(b) of the Banking Regulation Act, 1949,
"banking" means the accepting, for the purpose of lending or investment, of deposits of
money from the public, repayable on demand or otherwise, and withdraw able by cheque,
draft, order or otherwise.
Meaning of Urban Co-operative Banks (UCBs)

The term Urban Co-operative Banks (UCBs), though not formally defined, refers to
primary cooperative banks located in urban and semi-urban areas. These banks, till 1996,
were allowed to lend money only for non-agricultural purposes. This distinction does not
hold today. These banks were traditionally centered around communities, localities work
place groups. They essentially lent to small borrowers and businesses.
Need for Urban Co-operative Banking

The need for Urban Co-operative Banking arises from the fact that Joint stock Banks are
not interested in providing credit to the urban middle class. This is because it is not
advantageous for joint stock banks in developing the business of small loans on account of
high cost of advancing and receiving them. Further joint stock banks are not likely to have
under ordinary circumstances, full and intimate knowledge of the standing and resources
of persons of moderate means; they will not advance loans on personal securities. In such
circumstances, the man with limited means in urban area may approach money lender. The
establishment of Urban co-operative Bank is the most suitable alternative to these
customers.
Brief History of Urban Cooperative Banks in India

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The origins of the urban cooperative banking movement in India can be traced to the close
of nineteenth century when, inspired by the success of the experiments related to the
cooperative movement in Britain and the cooperative credit movement in Germany such
societies were set up in India. Cooperative societies are based on the principles of
cooperation, - mutual help, democratic decision making and open membership.
Cooperatives represented a new and alternative approach to organization as against
proprietary firms, partnership firms and joint stock companies which represent the
dominant form of commercial organization.
The Beginnings
The first known mutual aid society in India was probably the "Anyonya Sahakari
Mandali" organised in the erstwhile princely State of Baroda in 1889 under the guidance of
Vithal Laxman also known as Bhausaheb Kavthekar. Urban co-operative credit societies,
in their formative phase came to be organised on a community basis to meet the
consumption oriented credit needs of their members. Salary earners" societies inculcating
habits of thrift and self-help played a significant role in popularizing the movement,
especially amongst the middle class as well as organized labour. From its origins then to
today, the thrust of UCBs, historically, has been to mobilise savings from the middle and
low income urban groups and purvey credit to their members - many of which belonged to
weaker sections.
The enactment of Cooperative Credit Societies Act, 1904, however, gave the real
impetus to the movement. The first urban cooperative credit society was registered in
Canjeevaram (Kanjivaram) in the erstwhile Madras province in October, 1904. Amongst
the prominent credit societies were the Pioneer Urban in Bombay (November 11, 1905),
the No.1 Military Accounts Mutual Help Co-operative Credit Society in Poona (January 9,
1906). Cosmos in Poona (January 18, 1906), Gokak Urban (February 15, 1906) and
Belgaum Pioneer (February 23, 1906) in the Belgaum district, the Kanakavli-Math Co-
operative Credit Society and the Varavade Weavers" Urban Credit Society (March 13,
1906) in the South Ratnagiri (now Sindhudurg) district. The most prominent amongst the

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early credit societies was the Bombay Urban Co-operative Credit Society, sponsored by
Vithaldas Thackersey and Lallubhai Samaldas established on January 23, 1906.
The Cooperative Credit Societies Act, 1904 was amended in 1912, with a view to broad
basing it to enable organisation of non-credit societies. The Maclagan Committee of 1915
was appointed to review their performance and suggest measures for strengthening them.
The committee observed that such institutions were eminently suited to cater to the needs
of the lower and middle income strata of society and would inculcate the principles of
banking amongst the middle classes. The committee also felt that the urban cooperative
credit movement was more viable than agricultural credit societies. The recommendations
of the Committee went a long way in establishing the urban cooperative credit movement
in its own right.
In the present day context, it is of interest to recall that during the banking crisis of 1913-
14, when no fewer than 57 joint stock banks collapsed, there was a there was a flight of
deposits from joint stock banks to cooperative urban banks. Maclagan Committee
chronicled this event thus:
"As a matter of fact, the crisis had a contrary effect, and in most provinces, there was a
movement to withdraw deposits from non-cooperatives and place them in cooperative
institutions, the distinction between two classes of security being well appreciated and a
preference being given to the latter owing partly to the local character and publicity of
cooperative institutions but mainly, we think, to the connection of Government with
Cooperative movement".
Under State Purview

The constitutional reforms which led to the passing of the Government of India Act in
1919 transferred the subject of "Cooperation" from Government of India to the Provincial
Governments. The Government of Bombay passed the first State Cooperative Societies
Act in 1925 "which not only gave the movement its size and shape but was a pace setter of
cooperative activities and stressed the basic concept of thrift, self-help and mutual aid."
Other States followed. This marked the beginning of the second phase in the history of
Cooperative Credit Institutions.

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There was the general realization that urban banks have an important role to play in
economic construction. This was asserted by a host of committees. The Indian Central
Banking Enquiry Committee (1931) felt that urban banks have a duty to help the small
business and middle class people. The Mehta-Bhansali Committee (1939), recommended
that those societies which had fulfilled the criteria of banking should be allowed to work as
banks and recommended an Association for these banks. The Co-operative Planning
Committee (1946) went on record to say that urban banks have been the best agencies for
small people in whom Joint stock banks are not generally interested. The Rural Banking
Enquiry Committee (1950), impressed by the low cost of establishment and operations
recommended the establishment of such banks even in places smaller than taluka towns.
The first study of Urban Co-operative Banks was taken up by RBI in the year 1958-59.
The Report published in 1961 acknowledged the widespread and financially sound
framework of urban co-operative banks; emphasized the need to establish primary urban
cooperative banks in new centers and suggested that State Governments lend active
support to their development. In 1963, Varde Committee recommended that such banks
should be organised at all Urban Centers with a population of 1 lakh or more and not by
any single community or caste. The committee introduced the concept of minimum capital
requirement and the criteria of population for defining the urban center where UCBs were
incorporated.
Duality of Control
However, concerns regarding the professionalism of urban cooperative banks gave rise to
the view that they should be better regulated. Large cooperative banks with paid-up share
capital and reserves of Rs.1 lakh were brought under the purview of the Banking
Regulation Act 1949 with effect from 1st March, 1966 and within the ambit of the Reserve
Bank supervision. This marked the beginning of an era of duality of control over these
banks. Banking related functions (viz. licensing, area of operations, interest rates etc.) were
to be governed by RBI and registration, management, audit and liquidation, etc. governed
by State Governments as per the provisions of respective State Acts. In 1968, UCBS were
extended the benefits of Deposit Insurance.

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Towards the late 1960s there was much debate regarding the promotion of the small scale
industries. UCBs came to be seen as important players in this context. The Working Group
on Industrial Financing through Co-operative Banks, (1968 known as Damry Group)
attempted to broaden the scope of activities of urban co-operative banks by recommending
that these banks should finance the small and cottage industries. This was reiterated by the
Banking Commission (1969).
The Madhavdas Committee (1979) evaluated the role played by urban co-operative banks
in greater details and drew a roadmap for their future role recommending support from
RBI and Government in the establishment of such banks in backward areas and prescribing
viability standards.
The Hate Working Group (1981) desired better utilisation of banks' surplus funds and that
the percentage of the Cash Reserve Ratio (CRR) & the Statutory Liquidity Ratio (SLR) of
these banks should be brought at par with commercial banks, in a phased manner. While
the Marathe Committee (1992) redefined the viability norms and ushered in the era of
liberalization, the Madhava Rao Committee (1999) focused on consolidation, control of
sickness, better professional standards in urban co-operative banks and sought to align the
urban banking movement with commercial banks.
A feature of the urban banking movement has been its heterogeneous character and its
uneven geographical spread with most banks concentrated in the states of Gujarat,
Karnataka, Maharashtra, and Tamil Nadu. While most banks are unit banks without any
branch network, some of the large banks have established their presence in many states
when at their behest multi-state banking was allowed in 1985. Some of these banks are
also Authorised Dealers in Foreign Exchange
Recent Developments
Over the years, primary (urban) cooperative banks have registered a significant growth in
number, size and volume of business handled. As on 31st March, 2003 there were 2,104
UCBs of which 56 were scheduled banks. About 79 percent of these are located in five
states, - Andhra Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu.

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Urban co-operative Banks as Scheduled Bank

During the year 1988-89 11primary co-operative banks each with demand and time
liabilities of over ` 50 crores were included in the second schedule to the Reserve Bank of
India Act, 1934. This is first time when primary co-operative banks have been scheduled.
During the year 1988-89.The R. B. I cleared another 15 proposals for registration by the
Registrar of co-operative societies.
Objectives and Functions of Urban Co-operative Banks

1. To attract deposits from members as well as non-members.
2. To advance the loans to members.
3. To undertake collection of bills, accepted or endorsed by members.
4. To provide safe custody for valuable documents of members.
5. To enrich other facilities as provided by commercial banks.
Area of Operations
The area of operations of an urban co-operative bank is usually restricted by its bye-laws
to a municipal area or a town. In some cases it exceeds this area.
Membership
The membership of urban co-operative bank is composed of persons living in urban areas,
such as traders, merchants, salaried and professional classes etc. The conditions relating to
the membership are laid down in their bye-law
Management
The management of urban co-operative Bank rests in the board of Directors, who are
elected by General Body, consisting of all the members. The final authority in all matters
rests with the general body but actual conduct of the affairs of the bank rests with the
board of directors and the secretary of the bank.
The tenure of office of the Board of Directors varies in the states. The usual practices are
to hold elections (a) each year (b) once in three years, and (c) each year by rotation for one
third of the board. Holding the elections every year is not favored by the study group. The
advantages of holding elections once in three years are that expenses are kept at a
minimum and the board of directors has time to learn the working of the bank. It is also

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observed that in a large number of institutions the same persons were elected to the board
of directors from term to term. It can be checked by incorporating the clause in the bye-
laws that prevents a person from contesting election more than one or two consecutive
terms.
Resources
Owned funds and borrowed funds are main sources of finance of Urban Co-operative
Bank. Own funds include paid up capital, accumulated reserves created out of appropriate
from profits. Borrowed funds cover deposits of members and non-members and loan from
central co-operative banks.
Deposits
The percentage of deposits to working capital varied from state to state. It was 76% total
capital in 1967-68. These banks have succeeded in attracting deposits from non-members
also because of growing public confidence in their working. These banks generally accept
current deposits, saving deposits and fixed deposits. But with increasing competition by
the commercial banks, more intensive efforts will be required by urban co-operative banks
to attract more deposits.
Borrowing
Such borrowings of urban co-operative banks from other financing agencies are negligible.
These banks generally borrow from central co-operative bank, while a few borrowed from
the apex banks. The study group on credit co-operatives in the Non Agricultural Sector
(1963) that the urban banks should be affiliated with central co-operative banks and apex
banks should not finance them directly.
Loan Operation
The loan operations of UCB (Urban Co-operative Banks) consists of granting fixed loans
or cash credit loans to their members against mortgage of unencumbered immoveable
property, or on surety of one or more persons who are also members. The member is
eligible for loan against personal security up to 5 to 10 times the share capital paid by him.
Banking and other facilities

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UCBs provide facility of withdrawal of deposits by cheese and arrange for remittance of
funds to other center. Some banks collect pensions, pay regularly insurance premiums of
its members, discount hundis and bills.
Investments
The UCBs invest their surplus money in government and other trustee securities.
STRUCTURE OF URBAN CO-OPERARIVE BANK IN INDIA

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Progress of Urban Co-operative Banks in India
Federation of Urban Co-Operative Banks

With the growth of urban co-operative banks, their federation or associations have been
formal in some of states including Gujrat, Karnataka, Maharashtra, west Bengal, Madhya
Pradesh, and the Union Territory of Delhi. Some of them published useful data on urban
banks in their states. They held regional or state level seminars or conferences to discuss
the problem faced by these banks and to suggest appropriate remedial measures
NATIONAL FEDERATION OF URBAN COOPERATIVE BANKS & CREDIT

SOCIETIES LTD
The National Federation of Urban Cooperative Banks and Credit Societies Ltd.
(NAFCUB) is an Apex Level Promotional body of Urban Cooperative Banks and Credit
Societies Ltd. in the Country. Our main objective is to promote the urban cooperative
credit movement and protect the interest of the Sector. The Federation was registered
under the Multi-State Cooperative Societies Act as a Multi-State Cooperative Society on
17th February, 1977. The Registered Office of NAFCUB is at Delhi and the area of

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operation is whole of the country. It represent around 1600 Urban Cooperative Banks and
more than 50,000 Cooperative Credit Societies functioning all over India.
Vision
NAFCUB is committed to work towards building a strong and viable urban co-operative
banking and credit system across the Country, to strive for level playing field for the
institutions, to be an effective voice of the sector, to work towards eliminating visible
weaknesses and infirmities, to provide the training and other support and to knit the
institutions into a cohesive unit for them to benefit from strength of being in co-operative
system.
Mission
To do all it takes to ensure that urban co-operative banks are not denied level playing field,
not discriminated against and to create expertise within the Federation in support of the
goals to make urban co-operative banks and credit societies professionally managed,
technologically equipped, sound and healthy financial entities that are associated with
ethical practices, high levels of corporate social responsibility and high degree of empathy
towards economically less privileged sections of the society.
The main objective of the National Federative is to promote Urban Cooperative

Credit movement in the country. The other objectives of the Federation are as under
1. To provide a forum for discussion and follow up of issues relating to urban
cooperative banks and co-operative thrift and credit societies.
2. To promote and protect interest of member institutions and take up their problems
individually and collectively at appropriate forum as well as with the concerned
authorities /regulators.
3. To interact and liaise with the Ministries of the Union Government, State
Governments, the Reserve Bank of India, NABARD, Commercial Banks, financial
sector institutions, representatives of various bodies of financial, industrial and
trading sectors both at national and at international levels.
4. To promote urban cooperative credit movement in India and to undertake studies
/research projects related to the Movement.

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5. To organize by itself and/or in collaboration with other bodies, conferences,

conventions, workshops, seminars and discussions on banking and financial
services, cooperation, management and allied subjects.
6. To arrange publication of periodicals, news bulletins and journals, to interact with
media on behalf of the sector and to exchange information of common interest of
member banks and to cooperate with the NCUI, NCCT, ICA, ICBA, CAB, NIBM,
NIBSCOM, BIRD, IIB, IBA or any other such national or international
organization in the field of education, training and publicity.
7. To develop and administer by itself or along with other institutions, schemes for
mutual benefit of urban cooperative credit institutions, and to take such action or
enter into such agreements as may be necessary for furtherance of the objectives.
8. To develop expertise in the areas of banking, management, technology and offer
consultancy services to the member institutions.
9. To take membership of other national and international institutions.
10. To undertake all activities and discharge all functions of a Federal Cooperative as
envisaged in section 24 of the Multi State Cooperative Societies Act, 2002.
The Karnataka State Cooperative Urban Banks Federation

Karnataka has a special place in the Indian cooperative sector, as it is one of the first states
to have started the cooperative movement. Urban Cooperative Bank, as the name suggests
is a bank operating in urban areas on the basis of cooperative principles. Banking
Regulation Act 1949 defined an Urban Cooperative Bank as a primary Non-Agricultural
Credit Society. “Urban Cooperative Bank means a society registered under act and doing
the business of banking, as defined in clause (b) of section 5 of the Banking Regulation
Act 1949.
The UCBs which are generally considered as “Small People Bank” because of their
objective for Promoting thrift and cooperation among the lower and middle strata of the
society, has made its mark in the cooperative movement.

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The Karnataka State Cooperative Urban Banks Federation

The Karnataka State Cooperative Urban Banks Federation Ltd., Bangalore is an apex level
body registered under the Karnataka State Cooperative Societies Act, 1959. The Urban
Banks federation was constituted with an objective for promoting cooperative movement
and for providing training and education to the urban banking sector.
The Urban Banks federation representing 266 Urban Cooperative Banks in Karnataka has
been playing a pivotal role in implementing and organizing various activities for the
overall development of Urban Cooperative Banks in Karnataka. The federation being part
of various committees constituted by the Reserve Bank of India and Registrar of
Cooperative Societies, is directly contributing to the healthy growth of the Urban
Cooperative Banks in Karnataka
Vision
Ensure the emergence of sound and healthy network of jointly owned democratically
controlled and ethically managed UCB’s providing need based quality banking services,
essentially to the middle and lower middle classes and marginalized sections of the society
in Karnataka State
Mission
1. Encourage structured development of urban banking movement in the state
2. Ensure that all UCBs comply with the regulatory prescription in letter and spirit
3. Facilitate implementation if CBS and innovative banking products so as to be on
par with Commercial banks
4. Organize special programs for small and financially weak UCBs to educate such
banks about the need to come out of weakness
5. Endeavour to create healthy image of UCB sector in the state
6. Conduct extensive online training programs for the officials of the UCBs
7. Strive for adopting state of the art technological innovations in the UCB sector
8. Educate directors and employees of UCB sector through publication of newsletters
and magazines

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9. Active functioning of Arbitration Courts and speedy disposal of cases enabling to

reduce NPAs
10. Promote E Stamping services through large number of UCB
Co-operative Principles
The co-operative principles are guidelines by which co-operatives put their values into
practice
1) Voluntary and Open Membership

Co-operatives are voluntary organisations, open to all persons able to use their services
and willing to accept the responsibilities of membership, without gender, social, racial,
political or religious discrimination.
2) Democratic Member Control

Co-operatives are democratic organisations controlled by their members, who actively
participate in setting their policies and making decisions. Men and women serving as
elected representatives are accountable to the membership. In primary co-operatives
members have equal voting rights (one member, one vote) and co-operatives at other
levels are also organised in a democratic manner.
3) Member Economic Participation

Members contribute equitably to, and democratically control, the capital of their co-
operative. At least part of that capital is usually the common property of the co-operative.
Members usually receive limited compensation, if any, on capital subscribed as a condition
of membership. Members allocate surpluses for any or all of the following purposes:
developing their co-operative, possibly by setting up reserves, part of which at least would
be indivisible; benefiting members in proportion to their transactions with the co-
operative; and supporting other activities approved by the membership.
4) Autonomy and Independence

Co-operatives are autonomous, self-help organisations controlled by their members. If they
enter into agreements with other organisations, including governments, or raise capital

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from external sources, they do so on terms that ensure democratic control by their
members and maintain their co-operative autonomy.
5) Education, Training and Information

Co-operatives provide education and training for their members, elected representatives,
managers, and employees so they can contribute effectively to the development of their co-
operatives. They inform the general public - particularly young people and opinion leaders
- about the nature and benefits of co-operation.
6) Co-operation among Co-operatives

Co-operatives serve their members most effectively and strengthen the co-operative
movement by working together through local, national, regional and international
structures.
7) Concern for Community

Co-operatives work for the sustainable development of their communities through policies
approved by their members.
Table 1.1 Consolidated Statistics of UCBs in Karnataka As on 31.03.2017
S.NO Particular No/Amount

1 Number of Banks 265
2 Number of Branches 1,063
3 Total members 24,62,800
4 No. of employee’s 8616
Rs. In crores
5 Share capital 1,354.02
6 Total reserve & other funds 3,315.02
7 Total deposits 34630.85
8 Net profit/loss(+/-) 359.42
9 Working capital 40,173.77
10 Total investment 14,990.37
11 Loans & advances 21,445.20
12 Gross NPV (amount) 1606.29
13 Gross NPV (%) 7.49

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1.2 Profile of the MUCO Bank (firm) :
MUDGAL URBAN CO-OPERATIVE BANK LTD. ( MUCO BANK )
Origin of the bank

Mudgal urban co-operative bank ltd. Mudgal, is a regional level urban co-operative bank
established in 1998 and Registered in 1996-97 ( No:- UBC:23008:96-97) with the prime
objective of advancing the loans to small and medium scale industries, merchants, traders,
technical & nontechnical service providers and all the government & non-government
employees (nonagricultural purpose), Its satisfactory completed its 21 years and running
towards 22nd year successfully.
Fund collection is necessity of all the banks but this bank’s prime goal is protection of
collected funds and useful investment. Today it contains 3 branches. The bank is also
planning to construct its own building and establish other branches in new cities. Building
of the branches are well planned and furnished with the modern equipments.
The bank is not lagged behind in customer services, by computerizing all its branches on
TBA (Total branch automation) basis including head office and CBS (Core banking
solution ) to provide its customers with facilities doing transaction in all branches. It’s also
providing modern facilities like NEFT, RTGS, and planning ATM cards.
The bank also has insurance cover of Rs. 3crore with the United insurance company ltd.

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Table 1.2. Overview of the Bank
Name of Bank : Mudgal urban co-operative bank ltd, Mudgal

Address : T V Complex Mudgal : 584125
Tq : linasaguru Dist : Raichur
Karnataka
Phone : 08537 - 280777
Year of Establishment : 1998

First president : Late T. Sheshanna
Present president : Shree Doddanagouda Patil
Registration : Registered under Cooperative Societies
Acts 1959.
No : UBC:23008:96-97
Management Control : Selected Board of Directors

Operation : Banking operations with the focus on Nonagricultural
Logo :
Share capital : Rs. 99.80 lacks
No. of branches : 3

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Objectives of the MUCO Bank
1. To develop the Mudgal region.

2. To develop co-operative movement in Mudgal region and act as friend, philosopher
and guide.
3. To develop and extend banking facilities in rural areas and to make Mudgal people
banking minded.
4. Effective mobilization of resources (collection of funds) towards needy people.
5. To secure collected fund.
6. Maintaining following values in operations
a. Honesty
b. Quality
c. Trust
d. Discipline/Timeliness
e. Transparency
f. Impartial
g. Savings
1.3 OPERATIONS OF THE BANK (SCHEME)
Types of deposit accounts
1. Current account
a. For Individual
b. For Society
c. For Institution
2. Savings account
( 6% P.A. Interest on all type Saving account )
a. For Individual
b. For Society

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c. For Institution
3. Fixed deposit account
(Interest rates on Fixed deposited
o For 30 to 45 days 6.5% P.A.
o For 46 to 180 days 7.5% P.A.
o For 181 to 364 days 8% P.A.
o For 365 days 9.5% P.A.
o For 13 to 36 months 10% P.A.)
a. For Individual
b. For Society
c. For Institution
4. Recurring deposit account
(Interest rates on Recurring deposites
o For 12 to 36 months 10% P.A.
o For above 36 months 9% P.A.)
a. For Individual
b. For Society
c. For Institution
5. Pradhan Mantri Jeevan Jyoti Bima Yojana
6. Pradhan Mantri Suraksha Bima Yojana
Safe deposit lockers

1. Small : Rs. 800 P.A. + ST
2. Medium : Rs. 1800 P.A. + ST
Types of loans & advances

1. Gold loan : 11% P.A.
2. Vehicle loan : 14% P.A.
3. Housing loan : 11% P.A.

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4. Mortgage loan : 15.5% P.A.

5. C.C./ OD Loan : 15.5% P.A.
6. Business loan : 15% P.A.
7. Construction loan : 14% P.A.
1.4 Achievements and growth

1. Best Urban co-operative bank award in 2005-06 by Karnataka state cooperative
urban banks federation ltd.
2. Present bank has expanded their business to 3 branches, In Mudgal, lingasugur,
Maski and is planning to open new branches in other cities as well.
3. In the year 2016 – 2017 Bank earned Rs.54,33,430.72 net profit.
4. Bank initially started with 1100 members present bank has 2936 members as on
31.03.2018.
5. Bank is started with the share capital of Rs.11 lacks and it has increased to Rs.99.80
lacks as on 31.03.2018.
6. Bank as collected Rs. 29.38 crore deposits and issued loans of Rs. 17.59 crore.
1.5 Specialties of Bank.

1. Fully computerized branches
2. D.D. facility throughout India
3. Extra interest rates on deposits ( for other 0.5% extra for senior citizen)
4. R.T.G.S. facility throughout India
5. Quick & courtesy services
6. E. Stamping facilities
7. Safe deposit lockers facilities

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CHAPTER – 2
ORGANIZATION STRUCTURE

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2.1 Organization Structure of MUCO Bank
Organization structure is the skeleton of the organization. It prescribes the formal

relationship among various position and the activities. Arrangements about reporting,
relationship, how an organization member is to communicate with other members, what
roles and procedures exist to guide the various activities performed by the members of all
parts of the organization structure. The way the organization is structured and who reports
to whom. The most important resources of organization are its people how they are
organized is crucial to its functioning and accomplishing successful implementation of its
strategy.
In simple structure is a pattern in which various parts components are related and inter
connected. So, organization structure is a pattern of relationships among various activities
and positions. The structure defines the relationships among people in the organization.
MUCO Bank follows Line and staff organization. It is a modification of

line organization and it is more complex than line organization. According to this
organization, specialized and supportive activities are attached to the line of command by
appointing staff supervisors and staff specialists who are attached to the line authority. The
power of command always remains with the line executives and staff supervisors guide,
advice and counsel the line executives.
Organization structure plays a vital role in achieving the organizational goals. Organization
structure should be properly designed to facilitate the smooth functioning of the
organization. Organization structure of MUCO Bank consists of BODs at the top. Then
president, under whom there is the Managing Director. M.D. is the person who is
responsible for smooth functioning of the organization. After Managing Director there are
General Managers and Assistant Mangers of various departments who are responsible and
accountable for the activities of their respective departments. There are subordinates,
Branch Manager and employees who are directly linked with department managers.

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In line organization a separate person will look after the activities of the department and he
has full control over the department. The same level executives do not give or receive
orders amongst themselves. But they receive orders from their immediate boss and give
orders to their subordinates. Hence, all heads are responsible to Managing Director.
ORGANISATION STRUCTURE OF MUCO BANK
2.2 Features of Line and Staff Organization

 Line and Staff Organization is a compromise of line organization. It is more
complex than line concern.

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 Division of work and specialization takes place in line and staff organization
 The whole organization is divided into different functional areas to which staff
specialists are attached.
 Efficiency can be achieved through the features of specialization.
 There are two lines of authority which flow at one time in a concern :
o Line Authority
o Staff Authority
 Power of command remains with the line executives and staff serves only as
counselors.
Merits of Line and Staff Organization

 Relief to line of executives
In a line and staff organization, the advice and counseling which is provided to the
line executives divides the work between the two. The line executive can
concentrate on the execution of plans and they get relieved of dividing their
attention to many areas.
 Expert advice
The line and staff organization facilitates expert advice to the line executive at the
time of need. The planning and investigation which is related to different matters
can be done by the staff specialist and line officers can concentrate on execution of
plans.
 Benefit of Specialization
Line and staff through division of whole concern into two types of authority divides
the enterprise into parts and functional areas. This way every officer or official can
concentrate in its own area.
 Better co-ordination
Line and staff organization through specialization is able to provide better decision
making and concentration remains in few hands. This feature helps in bringing co-
ordination in work as every official is concentrating in their own area.
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 Benefits of Research and Development

Through the advice of specialized staff, the line executives, and the line executives
get time to execute plans by taking productive decisions which are helpful for a
concern. This gives a wide scope to the line executive to bring innovations and go
for research work in those areas. This is possible due to the presence of staff
specialists.
 Training
Due to the presence of staff specialists and their expert advice serves as ground for
training to line officials. Line executives can give due concentration to their
decision making. This in itself is a training ground for them.
 Balanced decisions
The factor of specialization which is achieved by line staff helps in bringing
coordination. This relationship automatically ends up the line official to take better
and balanced decision.
 Unity of action
Unity of action is a result of unified control. Control and its effectively take place
when co-ordination is present in the concern. In the line and staff authority all the
officials have got independence to make decisions. This serves as effective control
in the whole enterprise.
Demerits of Line and Staff Organization

 Lack of understanding
In a line and staff organization, there are two authorities flowing at one time. This
results in the confusion between the two. As a result, the workers are not able to
understand as to who is their commanding authority. Hence, the problem of
understanding can be a hurdle in effective running.
 Lack of sound advice
The line official gets used to the expertise advice of the staff. At times the staff
specialist also provides wrong decisions which the line executive has to consider.

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This can affect the efficient running of the enterprise.

 Line and staff conflicts
Line and staff are two authorities which are flowing at the same time. The factors of
designations, status influence sentiments which are related to their relation, can
pose a distress on the minds of the employees. This leads to minimizing of co-
ordination which hampers a concern’s working.
 Costly
In line and staff concern, the concerns have to maintain the high remuneration of
staff specialist. This proves to be costly for a concern with limited finance.
 Assumption of authority
The power of concern is with the line official but the staff dislikes it as they are the
one more in mental work.
 Staffs steal the show
In a line and staff concern, the higher returns are considered to be a product of staff
advice and counseling. The line officials feel dissatisfied and a feeling of distress
enters a concern. The satisfaction of line officials is very important for effective
results.
2.4 Board of Directors

Table 2.1. List of Board of directors
S No. Name of the Members Designation
1 Shri Doddanagouda Patil President
2 Shri Basappa Jidi Vice-President
3 Shri Prakash R Nilagalla Managing Director
4 Shri T Sheshanna Director
5 Shri Sharana gouda Patil Director

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6 Shri Sharanagouda Patil Bayyapur Director
7 Shri Suresh Jain Director
8 Shri K. Hanumanthappa Kandagal Director
9 Shri Mirja Bandel Beg Director
10 Shri Siddappa Shilpi Director
11 Shrimati Anuradha Deshpande Director
12 Shrimati Shivalila Hiregoudru Director
13 Shri Amaregouda Patil Professional Director
14 Shri Ninganagouda Patil Professional Director
Table 2.2 Human resources in MUCO Bank as on 31.03.2018
S No. Designation NO. of Employees
1 Managing directors 1
2 General Managers 1
3 Assistant General Managers NA
4 Branch Managers (Grade-2) 4
5 Branch Managers (Grade-1) 2
6 Bank Assistant (Grade-2) 6
7 Bank Assistant (Grade-1) 6
8 Drivers NA
9 Attenders/Sipayi 8
Total 28

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2.3 Duties & responsibility of key personnel
Board of Directors
For the success of Co-operative enterprise, effort and involvement of persons and groups
working at various levels of management are responsible. Normally we speak of top
administration, middle management and lower level management as parts of the total
organisation. The board of directors in the final responsible agency the success or failure
of a corporate business organization. Board of for Directors takes policy decisions and
leaves the execution of these decisions to the executive management. Usually, the Board in
a cooperative is viewed as a trustee of member’s funds and responsible as such for the
administration and management of these funds. It will not get itself involved in the day to
day management. Decision about all principal issues from a policy angle is their primary
function and it controls and ensures its implementation with suitable follow up action
through managers.
General Powers of Board
The entire administration and management of the Bank is vested in the hands of Board of
Directors and subject to the control of the Board in a committee which is constituted by the
Board of Directors from among themselves. The Board shall and exercise all such powers
and enter into all such arrangements, take all such proceedings, and do all such acts and
things as may be necessary or proper for due management of the affairs of the Bank and
for carrying out the objects for which the Bank has been established and for securing and
furthering its interests subject to the provisions of the Karnataka Cooperative societies Act.
Express Power of Board

Without prejudice to the General Powers conferred by these Bye-laws, the following
powers and authorities are expressly given to BOD.
 To pay the Preliminary expenses incurred in the promotion and registration of the
Bank.

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 To purchase, buy take on lease or otherwise acquire any building or land (whether
free hold or otherwise) for the purpose from any person with or without house, or
houses building or buildings there on in Karnataka or elsewhere and to erect,
construct and build or sell or alter any of buildings for the purposes of Banking
House or Houses. Shops or Godown, office or offices or as residence of the
employees of the Bank and to pay for such land and buildings whether purchased,
leased or acquired or built or constructed by the Bank either in cash or otherwise
and purchase all furniture and other things necessary for the Banking house, offices
and residence with all things which the Board may deem necessary or convenient
for carrying on business of the Bank.
 Subject to the previous approval of the Registrar to appoint, remove, suspend or
otherwise punish the General Manager and to fix his remuneration.
 To appoint and promote other officers and members of the staff to assist the
Managing Director in the day to day management of the Bank and to remove,
suspend, or otherwise punish them and to fix their remuneration.
 To authorize President the Executive Committee and Managing Director or other
officers of the Bank for the time being to exercise and perform all or any of the
powers and authorities and duties conferred or improved upon the Board by these
presents subject to such restrictions and conditions as the Board may think proper to
impose from time to time.
 To raise or borrow such sums of money as may be required from time to time for
the purpose of the Bank in accordance and subject to be provisions of these Bye-
laws and the act and rules framed there under and to pledge government securities,
debentures, shares and other assets of the Bank as securities for loans, cash credit
limits, overdrafts in current accounts from the Reserve Bank of India, State Bank of
India and other notified nationalized commercial banks or from the government.
 To draw, accept, endorse, negotiate and sell bills of exchange, and other negotiable
instruments with or without security.

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 To undertake on behalf of the Bank the payment of all rents.
Chairman/President
The term of the President and Vice-President elected by the Board shall be 3 years. The
President and Vice-President so elected shall be eligible for reelection for another term
but no one shall hold office of the President, Vice-President continuously for more than
two terms. A person who holds office of the President and Vice-President for two terms
not exceeding 6 years shall be eligible for re-election only after a lapse of two years since
his ceasing to be President and Vice-President.
Powers of the President/Chairman
 To preside over the meetings of General Body, The Board of Directors, except the
meetings in which he himself a candidate for election and the Executive Committee.
 To exercise general control over the functions and the working of the officers of the
Bank.
 To sanction within the provisions of the approved budget all expenditures of
contingent nature for which powers do not vest in the Managing Director or the
General Manager.
 To sanction annual increments, all types of leave, tour program and travelling,
medical etc. bills of Managing Director.
 To refer to the Board of Directors for consideration such decision of the Executive
Committee and other special committees as he considers repayment to the interest
of the Bank.
 To exercise all such powers as may be from time to time be delegated to him by the
Board of Directors.
Vice-President
In case the President is obliged to remain absent on account of sickness, or otherwise
powers of the President shall be exercised by Vice-President.

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Managing Director (CEO)

Managing Director is the Chief Executive Officer at the top of administrative hierarchy.
He is responsible to supervise, control, direct, co-ordinate and maintain overall working of
the bank with in rules and regulations and policies framed by the Board of Directors from
time to time. Managing Director shall, in exercise of the powers vested under section 35 of
the Co-operative Societies Act, 1969. He is appointed by the State government on such
terms and conditions may decide from time to time. He shall be as Ex-officio member of
the Board and subject to the general control of the Board.
Duties and Powers of the Managing Director
 To arrange for the holding of the meetings of the General Body, the Board and the
Executive Committee of the Bank, attend the meetings, arrange for the recording of
their proceedings and to sign them along with the President.
 To sign and execute for and on behalf of the Bank all such documents bonds and
agreements to which the Bank is a party, provided that the share certificates of the
Bank will be signed by him jointly either with President or Vice-President or any
officer of the Bank authorized in this behalf.
 To open and operate upon the Bank's accounts maintained with Reserve Bank of
India or any other Bank, to buy, sell, pledge, endorse and transfer, promissory
notes, government and to sign, endorse and negotiate cheques and other documents
connected with the business of the Bank.
 To be the officer to sue and to be sure on behalf of the Bank.
 Subject to such general guidelines at the Board of Directors may prescribe in this
behalf, to profitably manage and invest surplus funds of the Bank in approved
securities.
 In emergent circumstances to sanction loans and credits in accordance with the rules
of the Bank and general directions of the Reserve Bank of India and the Registrar,
Co-operative Societies of Karnataka upto a maximum of Rs.5 lakhs, in each case.

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Such cases will be placed before the next meeting of the Board/Executive
Committee for ratification.
 To sanction for payment of bills of expenditure not exceeding Rs. 10,000/- in each
case on purchasing items and sanction bills of contingent expenditure not exceeding
Rs. 1,000/- in each case within the sanctioned budget.
 To make appointments of subordinate staff namely, peons, night guards, drivers etc.
subject to the sanctioned strength and as per the procedure laid down in the service
rules.
 To make postings and transfers of the staff with the prior concurrence of the
President or in his absence of the Vice-President for the most efficient functioning
of the Bank.
 To take disciplinary action, hold enquiries and award punishment to The staff in
accordance with the service rules of the Bank.
 To be the custodian of the Bank's properties.
 To conduct or arrange for the conduct of periodical inspections of and supervision
over the branches and affiliated co-operative societies.
 Generally to do all such acts as may be necessary or conducive for the efficient
management of the Bank.
 The Managing Director may share any of his powers with the General Manager and
other officers of the Bank as he may deem necessary in the interest of the efficient
administration of the Bank.
General Manager
There shall be a General Manager of the Bank, who shall be appointed in terms of bye-
laws 66, on such terms and conditions as may be approved by the Registrar Co-operative
Societies. Subject to overall control of the Managing Director, the President and the Board

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of Directors. The General Manager shall be responsible for the smooth functioning of the
Bank. He performs the following functions.
 To act as Managing Director in the case the Managing Director be obliged to

remain absent on account of leave, illness or otherwise.
 To operate upon the Bank's accounts to buy, sell, pledge endorse and transfer
promissory notes and other securities standing in the name of and or held by the
Bank, to sign endorse, negotiate cheques and other negotiable instruments and to
sign all receipts of all accounts and other documents connected with the business of
the Bank.
 To accept deposits of all kinds and to carry on general banking transactions subject
to the rules approved in this behalf by the Board of Directors.
 To sanction advances against the security of deposits.
 To supervise the work of staff subordinate to him and to conduct enquiries into the
complaints against them in the manner prescribed and after obtaining orders from
the Managing Director to take suitable action against them.
 To put with his recommendations cases to the Managing Director which may have
to be referred to the President, the Executive Committee or the Board of Directors.
 To protect, inspect from time to time and arrange for the safe custody of the Bank's
properties under the direction of the Managing Direector.
 To maintain such account books and registers as may be prescribed in the Act, rules
and bye laws of the Bank.
 To arrange for speedy ratification of the defective features pointed out in the
inspection and audit reports of the Bank's working.
 To direct the recovery of overdue from co-operative societies and review their
progress.
 To be responsible for the proper maintenance of log books of Bank vehicles.

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 To do such other acts/discharge duties as may be assigned to him from time to time
by the Managing Director, President Executive Committee and the Board of
Directors.
Assistant General Manager
General Manager is assisted by Assistant General Manager to perform his functions in

efficient manner.
Branch Manager
For the proper and smooth functioning of the Bank, each branch is headed by Branch
Manager. He performs the following functions
 To carry on the work of the Branch according to the policy and within the powers
delegated with the assistance of staff and allot work to the staff.
 To sanction casual leave to staff provided work will not suffer and no risk involved
or substitute is available.
 Correspondence with head office and others according to need.
 To achieve the annual targets of business, fixed by the management.

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CHAPTER – 3
DEPARTMENTS OF MUCO BANK

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Departments of MUCO Bank
The organization is having 4 important departments, they as follows
1. Accounts and Banking Section

2. Loans and advances section,
3. Development and Planning Section
4. Inspection and Audit Section
5. Establishment
6. Section and supervision section.
7. IT Department
The functions of each department are as follows:
3.1 Accounts and Banking Section
Accounts Section takes the responsibility of local purchases of stationery, jobs and
maintenance of vehicles etc. Under this section all the transactions and the business of the
bank is earned out. It maintains the accounts of all the transaction that takes place in the
bank apart from maintaining the accounts of sales, medical reimbursement and T.A. claims
of the bank employees.
3.2 Loans and Advances Section
It grants the all types of loans to the beneficiary’s i.e. short term, medium term and long
term. Formalities are completed and constantly monitored by this section. It monitors the
progress of recovery of various loans distributed by the bank. It also corresponds with the
state government and Registrar Cooperative Societies regarding the various schemes
programs launched by the government and consequently finalizes the modalities and its
impact on the performance of the bank.

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3.3 Planning and development
This department analysis environment ( internal & external) and take decision like new
schemes, establishing new branches, adding new product(services), and also relating with
the taking feedback from the customers.
3.4 Establishment Section
This branch deals with personnel problems of the bank, manpower management,
appointments, transfers and administrative matters. Service records of all the employees
are maintained by this section. Agenda for departmental promotion Committee (D.P.C.) is
also prepared by this section. All disciplinary actions against the erring officials, their
charge sheet memo etc. are served by this section. It conducts the enquiries in to the
complaints against the employees and hold departmental enquiries as and when need
arises. All these actions are taken on the direction of the higher bank authorities and its
records is maintained by the establishment section. It corresponds with various
government agencies and also helps the higher authorities in the enactment, amendment
and construction of bank manuals, acts etc. etc.
3.5 Inspection and Audit Section
It deals with the conduct of audit and inspection of various branches of the bank. It
examines the accounts of the bank and procedures employed for their maintenance. It
detects the defalcations, embezzlement and misappropriation of funds and expenditure
incurred by the bank both on its employees and beneficiaries. At the head office no
expenditure is incurred without the approval of this section. It suggests the financial
procedure to prevent misuse of banking expenditure.
3.6 IT Department
This department deals with the maintaining computer hardwires, software and networks.

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CHAPTER – 4
SWOT - ANALYSIS

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SWOT ANALYSIS
SWOT analysis (or SWOT matrix) is a strategic planning technique used to help a person
or organization identify the Strengths, Weaknesses, Opportunities, and Threats related
to business competition or project planning. A study undertaken by an organization to
identify its internal strengths and weaknesses, as well as its external opportunities and
threats.
It is intended to specify the objectives of the business venture or project and identify the
internal and external factors that are favorable and unfavorable to achieving those
objectives. Users of a SWOT analysis often ask and answer questions to generate
meaningful information for each category to make the tool useful and identify their
competitive advantage.
Strengths and Weakness are frequently internally-related, while Opportunities and Threats
commonly focus on environmental placement.
 Strengths: characteristics of the business or project that give it an advantage over

others.
 Weaknesses: characteristics of the business that place the business or project at a
disadvantage relative to others.
 Opportunities: elements in the environment that the business or project could
exploit to its advantage.
 Threats: elements in the environment that could cause trouble for the business or
project.
The degree to which the internal environment of the firm matches with the external
environment is expressed by the concept of strategic fit. Identification of SWOTs is
important because they can inform later steps in planning to achieve the objective.
First, decision-makers should consider whether the objective is attainable, given the

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SWOTs. If the objective is not attainable, they must select a different objective and
repeat the process.
4.1 STRENGTH
 Oldest cooperative society.

In Mudgal region it is oldest credit cooperative society. So it’s not required any for
other advertisement and In 22 years bank has created good image and value in a
Mudgal region.
 Familiarity
MUCO Banks all employees localist, so they know all members and customers very
well.
 High interest rates for deposits.
Bank has high interest rates for deposits, comparing to nationalized banks which
helps in attracting more deposits.

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 Easy and quick process

In a nationalized bank to avail the loan it is need to produce more documents and it
follows lengthy process. But in MUCO Bank with it can be done documents and in
short time they can easily avail the loan.
 Members is strength
Profit earned by MUCO Bank is shared with its members so MUCO Banks
members will try to link more customers with bank.
 Experienced employee
MUCO Bank having more the 15 years employee and some of the employee
working since from the establishment of the bank.
 Insurance coverage
Banking is has insurance coverage of 3 crore with the united Insurance company.
4.2 WEAKNESS
 In sufficient resources
To compete with nationalized banks, MUCO Bank does not have that many
resources (Finance).
 Lacking in Innovative technologies
In banking industries many new innovation took place like Internet banking, Mobile
banking, Banking in android app. MUCO Bank lacks in adopting innovative
technologies due to insufficient finance.
 ATM
ATM play vital role in this modern and digital world. Banks ATM is still in under
planning.
 Limited area of operation
MUCO Banks area of operations is limited to Raichur district only.
 Higher Interest Rates

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Comparing to nationalized banks, MUCO Bank’s lending rates are higher.

 Long Procedure
The procedure for taking decision is long. For making any changes in banking
operation or relating to any other thing its need BOD Consent.
 Delay in recovery.
Due to administration familiarity (friendly relationship) with customers (borrower)
in recovery of loans is delay.
 Less trust from public
Although it is registered co-operative society, public is has less trust comparing to
nationalized banks.
 Less employees
Number of employees is lesser than what it required .
4.3 Opportunities
 Opening new branches
Opening new branches in Hungund, Hutti and in some other towns.
 Constructing own buildings.
Bank’s head office and the branches are operating in rented buildings. Bank has
opportunity to construct own buildings for all branches in respective towns with
modern infrastructure which will the reduce expenses of paying rent.
 Establishing ATM centers.
Bank has opportunity to establish own ATM centers and to issue ATM Cards.
 Government schemes
Make in India, Digital India, Women empowerment, Start up india, Jan Dhan
Yojana, Atal Pension Yojan, Pradhan Mantri Jeevan Jyoti Bima Yojana etc are
providing new opportunities to banking industry.
4.4 Threats
 Changing policies

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Changing policies of regulatory bodies like Apex bank, NABARD, RBI.

 Competition
MUCO Bank facing competition from other Local credit Cooperative societies,
Private Banks, Regional Bank, Nationalized Banks, RDCC Bank, and self-help
group.
 Innovations of technologies
In banking sector many technologies are innovating and old technologies are
vanishing
 Irrecoverable lending (NPA)
Bank has treats of not recovering its lending.

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CHAPTER – 5
RESEARCH METHODOLOGY

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Research Methodology
The detailed methodology adopted for carrying out the present study is outlined below.
The methodology discusses elaborately the type of research objectives and scope of the
study, sources and collection of data, period of study and the techniques used for the study.
The limitations of the study are also included in this section.
Title of the Study
Financial Analysis of MUCO Bank
Type of Research
The present study is analytical in nature as it attempts to make use of facts or information
already available and analyze these to make a critical evaluation of the information.
Objectives of the Study
Given the significant role played by MUCO Bank in the development of Mudgal region, it
is felt necessary to examine the financial performance and position of MUCO Bank. An
attempt has been made to evaluate the financial performance and position of Mudgal
Urban Co-operative Bank and offer constructive suggestions for improving the
performance of the organization. Apart from this primary objective, following secondary
objectives have also been set out to be achieved in this study.
1. To ascertain the reasons that led to the formation of MUCO Bank

2. To ascertain the contribution made by KSFC to the economic and social
development of Mudgal region.
3. To get the practical knowledge of working of the organization.
4. To study the organization structure of the company.
5. To study the various departments working in MUCO Bank.
6. To study the various products and services offered by MUCO Bank to serve the
needs of different segments of society.

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7. To identify the strengths and weaknesses internal to the organization and explore
the opportunities and threats external to the organization.
Scope of the Study

The Mudgal Urban Co-operative Bank (MUCO) has been selected as a sample unit for the
present study. The scope of the study is limited to the analysis of accounting figures over a
period of 5 years, that is, from 2012-13 to 2016-17. It involves a comparison of the ratios
of MUCO Bank over time, that is, present ratios are compared with the past ratios of
MUCO Bank itself. It indicates the direction of change in the performance – improvement,
deterioration or constancy over the years.
To draw the conclusions, a number of mathematical, financial and technical tools and
techniques have been used in this study. The analysis has been carried out basically to
know the working of the organization and to ascertain the financial strengths and
weaknesses of the Corporation.
Sources of Data Collection

The data for the present study has been collected mainly from secondary sources. For this
purpose, books, journals, reports and websites have been referred to collect the data and
information on Co-Operatives ACT, 1959 and MUCO Bank. Further, the annual reports of
MUCO Bank have been utilized to get the pertinent information on the physical and
financial performance of the organization.
Apart from these, an attempt has been made to collect the information from primary
source, that is, unstructured telephonic interview with the MUCO Bank authority, to get
the information required in the study.
Period of the Study

The period for the present study covers six years from 2012-13 to 2016-17.

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Tools and Techniques of Analysis

The data collected from the financial statements of the sample unit is analyzed with the
help of various tools and techniques. The use and significance of these tools and
techniques applied in the present study are described below.
Ratio Analysis
Ratio Analysis is claimed to be a widely used tool of financial analysis. It is the principal
technique used in judging the operational and financial performance of the business
enterprise. The analysts, through ratio analysis, can examine not only the performance of
the concerned unit but also make a comparison with other units operating in the similar
field to find out the strengths and weaknesses of the organization.
The technique of ratio analysis involves five steps, namely, formulation of objective,
collection of data, computation of ratio, comparison of ratio with the standard one and the
interpretation and conclusion. The last two steps, i.e. the comparison, interpretation and
conclusion require careful study and sound judgments on the part of the analysts because
there is no clear cut standard for each and every ratio and the interpretation of ratio values
is based on careful thought as to the kind of insight the analysts wish to obtain.
While, studying the financial performance and position of MUCO Bank, it is felt to study
various important ratios falling under the category of liquidity, leverage and profitability.
Other Tools
Apart from financial techniques, diagrammatic and graphic representations are made to
provide a simplified way of presenting the data for vivid understanding of trends and
relationships.
Limitations of the Study:

The below mentioned are the constraints under which study is carried out.
1) This research being the first research of researcher, errors might have crept in.

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2) The study is based mainly on secondary data collected from the published reports,
financial statements of the sample unit and also from different books. Therefore,
the limitations entailing in the secondary data and financial statements will exist in
the study.
3) As the present study deals with a single unit, the inter-firm comparison cannot be
made and hence, its actual performance in comparison to the other Urban Co-
Operative remains unanswered.
4) The study adopts the analysis through Ratios. Since ratio itself has many loop
holes, the study also resembles the defects present in the ratio analysis.
5) Ratios are stated in numbers. These numbers are objective. But, such numbers are
interpreted by analysts. Hence, according to personal bias, same ratio may be
interpreted differently by different analysts.
6) The results obtained from the analysis of 5 years’ figures cannot be generalized.

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CHAPTER – 6
FINANCIAL ANALYSIS

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6.1 MEANING OF FINANCIAL ANALYSIS

Financial Statements Analysis is an analysis which critically examines the relationship
between various elements of the Financial Statements. It focuses on the evaluation of past
operations as revealed by the analysis of basic statements. It is a process of scanning
Financial Statements for evaluating the relationship between the items as disclosed in
these. It is an important means of assessing past performance and forecasting and planning
future performance. The analysis simplifies, summarizes and systematizes the monotonous
figures.
MEANING OF RATIO ANALYSIS

Analysis of Financial Statements with the help of ‘Ratio’ is termed as ‘Ratio Analysis’.
Ratio Analysis is a widely used tool of Financial Analysis. It can be used to compare the
risk and return relationships of firms of different sizes. It is defined as the systematic use
of ratio to interpret the Financial Statements so that the strengths and weaknesses of a firm
as well as its historical performance and current financial condition can be determined.
OBJECTIVES OF RATIO ANALYSIS

Following are the important objectives of Ratio Analysis
1. To provide the necessary basis for Inter-period and Inter-firm Comparison.
2. To help in providing a part of information needed in the process of decision-
making.
3. To focus on facts on a comparative basis and facilitate drawing of conclusions
relating to the performance of a firm.
4. To evaluate the performance of a firm in determining the important aspects of a
business such as liquidity, solvency, operational efficiency, overall profitability
capital gearing, etc.
5. To throw light on the degree of efficiency in the management and the effectiveness
in the utilization of its assets.

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6. To provide the way for effective control of the enterprise in the matter of achieving
the physical and monetary targets
7. To help management in discharging its basic functions like forecasting, planning,
coordination, communication, control, etc.
8. To promote co-ordination among the departments and the staff by the study of
performance and efficiency of each department.
9. To point out the financial condition of business whether it is strong, questionable, or
poor and enables the management to take necessary steps
10. To act as an index of the efficiency of an enterprise.
CLASSIFICATION OF RATIOS
Accounting Ratios may be classified as under
1. Traditional Ratios
2. Functional Ratios
Traditional Ratios
Traditional Accounting Ratios are classified on the basis of the origin of the figures used in
the accounting ratios, i.e. on the basis of the Financial Statements from which ratios are
derived. The following ratios are usually included in this type of classification.
Balance Sheet Ratios or Financial Ratios

Ratios calculated from the different items as appearing in the Balance Sheet of a concern
are called Balance Sheet Ratios, e.g. Current Ratio, Liquid Ratio, Proprietary Ratio, Debt-
equity Ratio, and so on.
Profit & Loss Account Ratios or Operating Ratios

Ratios calculated from the different items as appearing in the Profit & Loss Account of a
concern are called Profit & Loss Account Ratios or operating Ratio, e.g. Gross Profit
Ratio, Net Profit Ratio, Operating Ratio.
Mixed Ratios or Composite Ratios

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Ratios calculated, taking some items as appearing in the Balance Sheet and taking some
items as appearing in Profit & Loss Account, are called Mixed Ratios or Composite
Ratios, e.g. Return on Net Worth, Return on Investment (ROI), Capital Turnover Ratio,
etc.
FUNCTIONAL RATIOS
The other way of classifying the ratios in on the basis of functions they perform, what they
indicate, symptoms or characteristics, namely, liquidity, profitability, financial stability
and turnover relationship, etc. This classification assumes greater significance because it
distinctly the different aspects of business performance and helps the various users of
Financial Statements to take guard of their interest. For instance, short-term creditors are
interested to evaluate the liquidity position by analyzing the liquidity ratios, while long-
term creditors and investors are interested in the solvency and profitability position of the
organization and as such they study the solvency and profitability ratios.
The following ratios are included in this classification.
1) Leverage Ratios
2) Profitability Ratios
3) Activity/Efficiency Ratios
6.2 Leverage/Solvency/Capital Structure Ratios

One of the categories of financial ratios is Leverage or Capital Structure Ratios. The long-
term lenders/creditors would judge the soundness of a firm on the basis of the long-term
financial strength measured in terms of its ability to assure the long-term lenders with
regard to a) periodic payment of interest during the period of the loan and b) repayment of
principal on maturity.
There are, thus, two aspects of the long-term solvency of a firm: a) ability to repay the
principal when due and b) regular payment of the interest. Accordingly, there are two

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different, but mutually dependent and interrelated, types of leverage ratios. First, ratios are
based on the relationship between borrowed funds and owner’s capital. These ratios are
computed from the Balance Sheet and reflect the relative / stake of owners and creditors in
financing the assets of the firm. In other words, such ratios reflect the safety margin to the
long-term creditors. The second category of such ratios is based on the Income Statement
and shows the number of times the fixed obligations are covered by earnings before
interest and taxes. In other words, they indicate the extent to which a fall in operating
profits is tolerable in that the ability to repay would not be adversely affected. In case
MUCO Bank is doing banking business (collecting deposits ) and also it not have any
fixed interest bearing security .
Following is the important leverage ratios
Debt to Equity Ratio
The relationship between borrowed funds and owners capital is a popular measure of the
long-term financial solvency of a firm. This relationship is shown by the Debt-Equity
Ratio. This ratio indicates the relative proportions of debt and equity in financing the assets
of a firm. It reveals the extent to which debt financing has been used in the business. It
discloses to the creditors the extent of their in interest being covered by the net worth by
the company. It can be computed by using the following formula.
Where,
Debentures + Term Loans + Loans on Mortgage + Loans from Financial
Total Debt = Institutions + Other Long-Term Loans + Redeemable Preference Share
Capital + All Current Liabilities.

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Equity Share Capital + Irredeemable Preference Share Capital +
Shareholder’s Fund = Capital Reserves + Retained Earnings + Any Earmarked Surplus
Like Provision for Contingencies etc. – Fictitious Assets (Goodwill,

Preliminary Expenses).
TABLE 6.1 - Debt to Equity Ratio of MUCO Bank

(Rs. In Lacks)
TOTAL SHAREHOLDER'S DEBT - EQUITY
YEAR DEBT FUND RATIO
2012-13 1564.09 58.44 26.76403149
2013-14 1834.45 66.96 27.39620669
2014-15 2316.38 77.62 29.84256635
2015-16 2661.76 83.4 31.91558753
2016-17 3376.4 99.8 33.83166333
[source : MUCO Bank Ltd. Annual reports]
DEBT - EQUITY RATIO

40
35
30
25
RATIO
20
15 DEBT - EQUITY RATIO
10
5
0
2012-13 2013-14 2014-15 2015-16 2016-17
Year
Chart 6.1 - Debt Equity Ratio

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Analysis and Interpretation

The Debt to Equity Ratios of MUCO Bank is presented in Table 6.1. It can be seen from
the table that the increase in shareholders’ funds has been lesser than the increase in total
debt. It is seen from the table that there has been continuous increase in the quantum of
debt proportion from 26.76:1 in 2013-14 to 33.83:1 in 2016-17.
The Debt to Equity Ratio indicates the margin of safety to the creditors. A ratio of 26.75:1
implies that for every 26.75 rupees of outside liability, the firm has only one rupee of
owners’ capital. It has serious implications from creditors’ point of view because owners
are putting up relatively less money of their own. However, MUCO Bank increasing the
proportion of debt in its capital structure over a period of time and also issuing more
shares. At the end of the study period, the Debt-Equity Ratio of MUCO Bank is 33.83:1
which is quite decline in status over 2016-17 ratio. It is not a satisfactory ratio.
5.3 PROFITABILITY RATIOS

Profit is the difference between revenue and expenditure over a period of time. It refers to
the absolute quantum of profits, whereas profitability refers to the ability to earn profits.
Profitability ratios are the ratios which are computed to evaluate the performance and
efficiency of the business concern. Profitability Ratios are used by the management,
owners, creditors and employees. Equity shareholders employ these ratios because they are
very much interested in knowing capital appreciation of their investment and dividend per
share. Management employs profitability ratios to assess the operational performance of
the business concern. They are used by the creditors to ascertain the margin of safety
available to them. Profitability ratios are the test of wages and fringe benefits to the
employees. Following are the important profitability ratios.
Return on Assets (ROA)

Here, the profitability ratio is measured in terms of the relationship of between net profits
and assets. The ROA may also be called ‘profit to assets ratio’. It is calculated to measure
the productivity of total assets. It is calculated using the following formula.

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The term fictitious assets include preliminary expenses, deferred revenue expenditure,
discount on issue of shares and debentures, debit balance of Profit and Loss Account and
other losses shown on the assets side of the Balance Sheet.
TABLE 6.2 Showing Return on Assets of MUCO Bank
(RS. In Lakhs)
TOTAL
NET PROFIT AFTER INTEREST TANGIBLE RETURN ON
YEAR & TAX ASSETS ASSETS
32.08 1534.79 2.090188234
2012-13
50.75 1935.16 2.622522169
2013-14
62.87 2370.17 2.652552349
2014-15
58.89 2735.16 2.153073312
2015-16
54.33 3456.2 1.571957641
2016-17
RETURN ON ASSETS
3
2.5
1.5
0.5
0
2012-13 2013-14 2014-15 2015-16 2016-17
Chart 6.2 - Return on Assets of MUCO Bank

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Table 6.2 visualizes the net profit after interest and tax as a percentage of total tangible
assets. The Return on Assets over the years has shown fluctuating trend throughout the
study period. In the initial three years, that is, 2012-13, 2013-14 and 2014-15 the ratio
values showed rising trend which were 2.09, 2.62 and 2.65 respectively. In 2015-16, ROA
showed a declining (value of 2.15) and continuing decline more in next year 2016-17
(value 1.57).
The analysis of the ratio values reveals that the income generated by theMUCO Bank
comparing to tangible assets has been very immodest during the study period. In other
words, the investment made in tangible assets is not justified by the amount of income
generated.
Return on Investment
Return on Investment is also known as ‘Return on Capital Employed’ or ‘Overall
Profitability Ratio’. It is calculated by establishing the relationship between the operating
profit earned and capital employed. It is an indicator of the earning capacity of the capital
invested in the business. It shows efficiency of the business as a whole. This ratio is
calculated by using the following formula :
Where,
Equity Share Capital + Preference Share Capital + Reserves and
Capital Employed = Surplus + Debentures and Long-Term Loans – (Fictitious Assets +
Intangible Assets + Investments outside the Business).
(Or)
Capital Employed = Proprietors Funds + long-Term Loans.

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TABLE 6.3 - Return on Investment of MUCO Bank

(RS. In Lakhs)
CAPITAL RETURN ON
YEAR EBIT
EMPLOYED INVESTMENT
2012-13 32.08 1834.25 1.748505213
2013-14 50.75 2139.54 2.372193683
2014-15 62.87 2312.57 2.718620409
2015-16 58.89 2663.228 2.211226376
2016-17 54.33 3394.69 1.600440688

RETURN ON INVESTMENT
3
2.5
1.5
0.5
0
2012-13 2013-14 2014-15 2015-16 2016-17
CHART 6.3 - Return on Investment of MUCO Bank

The Return on Investment of MUCO Bank is presented in Table 6.3. It is seen from the
table and chart that the ratio values depicted a fluctuating trend throughout the study
period. It ranged from 1.60, the lowest, in 2016-2017 to 2.71, the highest, in 2014-15.

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The Return on Investment was 1.6 in 2016-17 which implies that the Corporation was able
to earn Rs.1.6 on Rs.100 investment. It can be considered as reasonably satisfactory level
of return. The return slightly declined in the upcoming year. The Corporation earned
Rs.1.6 on Rs.100 investment which was the lowest during the study period. In the last year
of the study period there was a decline in the rate of return which is not a good sign for
MUCO Bank.
Return on Ordinary Shareholders’ Equity
While there is no doubt that the preference shareholders are also owners of a firm, the real
owners are the ordinary shareholders who bear all the risk, participate in management and
are entitled to all the profits remaining after all outside claims including preference
dividends are met in full. The profitability of a firm from the owners’ point of view should,
therefore, be assessed in fitness of things, in terms of the return to the ordinary
shareholders. The ratio under reference serves this purpose. It relates net profit, finally
available to equity shareholders, to the capital employed by them. It is calculated as
follows:
Ordinary Shareholders Equity = Equity Share Capital + Reserves and Surplus –
(Miscellaneous Expenses + Debit Balance of Profit and Loss

Account)
TABLE 6.4 - Return on Shareholders’ Equity of MUCO Bank

(Rs. in Lakhs)
NET PROFIT ORDINARY RETURN ON
YEAR AFTER INTEREST SHAREHOLDERS' SHAREHOLDERS'
AND TAX EQUITY EQUITY
2012-13 32.08 58.44 54.89390828

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2013-14 50.75 66.96 75.79151732

2014-15 62.87 77.62 80.99716568
2015-16 58.89 83.48 70.54384284
2016-17 54.33 99.8 54.43887776
RETURN ON SHAREHOLDERS' EQUITY

90
80
70
60
50
40
30
20
10
0
2012-13 2013-14 2014-15 2015-16 2016-17
CHART 6.4 - Return on shareholders Equity of MUCO Bank
The Return on Ordinary Shareholders’ Equity Ratio of the MUCO Bank for the last 5
years is presented in Table and Chart 6.4. The ratio values showed a fluctuating trend
during the study period. A close look at the figures reveals that the ratio values an
increasing trend in the first three years. The fourth year of the study period recorded a
declaim return which is continued in next upcoming year
By looking this trend we can concludes that those profit is increasing its portion is less
than shareholders capital.
Earnings Per Share (EPS)

Earnings per Share (EPS) measures the profit available to the equity shareholders on a
per share basis, that is, the amount they can get on every share held. It is calculated by

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dividing the profits available to the equity shareholders by number of outstanding shares.
The profits available to the ordinary shareholders are represented by net profits after tax
and preference dividend. Thus,
TABLE 6.5 - Earnings Per Share of MUCO Bank

(Numbers and Rs in Thousand)
NO. OF ORDINARY
YEAR EAIT EARNINGS PER SHARE
SHARES OUTSTANDING
2012-13 3208 2422 1.324525186
2013-14 5075 2476 2.049676898
2014-15 6287 2527 2.487930352
2015-16 5889 2535 2.323076923
2016-17 5433 2715 2.001104972
EARNINGS PER SHARE

3
2.5
1.5
0.5
0
2012-13 2013-14 2014-15 2015-16 2016-17
Chart 6.5 - EPS of MUCO Bank

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The Earnings per Share values of the MUCO Bank for the study period are fluctuating in
the above table and chart. It can be observed from the above table and chart that the Bank
is not maintaining the EPS uniformly . This is mainly due low income generated in certain
years. The bank is able to generate 2 thousand and more than per share. The income
generated is justifying the contribution made by the shareholders. On the whole, the EPS
of the Corporation is considered to be satisfactory.
6.4 Activity/Efficiency Ratios
Activity ratios make use of purchases and sales while calculating various ratios. But,
MUCO Bank is neither a trading company nor a manufacturing company. Hence, the
question of purchases and sales does not arise in the case of MUCO Bank. Therefore, the
activity/efficiency ratios cannot be calculated for MUCO Bank.

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CHAPTER – 7
FINDINGS, SUGGESTIONS AND CONCLUSION

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7.1 FINDINGS
 Guarantor belongings are also hold by bank until loan amount is completely paid by
borrower because guarantor is also equal responsible with borrower for loan
amount.
 Bank will sell the properties of borrowers if they fail to repay the loan amount.
 Prior to providing assistance to a new firm an intensive study is done on the
technical feasibility and financial liability of the firm by enquiring appropriate
persons and documents.
 Bank applies holding method to lend money for merchants.
 MUCO Bank has norms to decide the repayment period for a loan. Apart from this
cash generation capacity of the customer is considered to fix up actual repayment
period.
 MUCO Bank provides guidelines to the borrowers, supervises and monitors the
progress of a firm and makes follow up during the implementation of loan amount.
 MUCO Bank offers a number of schemes with different features to meet the varied
needs and requirements of the clients.
 A borrower can avail financial assistance under more than one scheme and can take
additional loan before repaying the previous loan. But this depends upon the
existing loan transactions with the bank.
 MUCO Bank is providing banking services not only Mudgal region but also nearer
towns.
 The bank is effectively utilizing its human resources.
Findings from Financial Analysis
 Bank’s highest source of income is interest from the merchant loans.

 The Financial position of MUCO Bank has been found is not good.
 MUCO Bank is heavily relied on debt as a source of funds and it’s also increasing
year to year which is observed from Debt-Equity Ratio.

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 MUCO Bank’s Non Performing assets also increasing.

 MUCO Bank is doing Banking business only. so it is not required more fixed assets
and equipments.
 BanSk applies holding method to lend money for merchants.
7.2 Suggestions
 Bank need to do urge in implementations of innovative technologies like “Mobile

banking , Internet banking, Banking in android apps, Online Banking, ATM etc.
 Bank needs to take some improvement steps in recovery of NPA like giving target
to recovery officers and also incentives to relating to them.
 Bank needs to expand their business by opening new branches in different cities.
 Bank need to appoint new employee with specialized are of knowledge to
improve its quality of services.
 Bank needs to improve its financial position.
 Bank need to bring innovation in their operations.
 Bank need to focus on priority sector lending.
 

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7.3 Conclusion
Mudgal Urban Co-operative Bank was established in 1998. It has been significantly
contributed to the growth of Mudgal region, development and promotion of first
generation entrepreneurs. Its initially started with Rs. 11lack, share capital. It has near Rs.
1 crore of share capital and it issued Rs. 1759.21 lakhs of loans. MUCO Bank offers a
number of schemes to serve the different needs of its clients. Although it was established
in Mudgal region it has been providing Banking services to nearer town people. Now it has
3 branches. It’s specially helping uneducated merchants in establishing, smooth running,
and expanding their business by providing loans with easy steps without asking much
documents.
To assess the financial performance and financial condition of MUCO Bank, its financial
statements were studied and analysed with the help of ratios. It is observed that MUCO
Bank is more depended on debt and it goes on increasing. During the study period it is
higher. As far as its solvency position is concerned, it is found that MUCO Bank’s assets
were insufficient to honour its long term obligations. However, a close observation of the
figures of the last years of the study period reveals that its profit and Ratios like ROA,
ROI, ROE, EPS are in decreasing in trend by that we can conclude that MUCO Bank’s
financial position is in serious issue. The earnings available to the equity shareholders also
too marginal.
On the whole, it can be concluded that though the financial results were not appreciable in
the recent years of the study period, it was able to improve its performance over the
subsequent years. But, it still needs to raise its performance standards. So that obligations
of lenders (depositors) and shareholders can be fulfil.

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BIBLIOGRAPHY
I.Books:
1. Financial Management, M.Y. Khan and P.K. Jain, Tata McGraw Hill
Publishers,2013.
2. Management Accounting, Bhattacharyya Debarshi, Pearson Education,2013.
3. Research Methodology, C.R. Kothari, New Age International
Publishers,2015.
II. Web Sites;

1. www.nafcub.org
2. www.kubfed.com
3. www.rbi.org.
4. www.wikipedia.org
5. www.shodhganga.inflibnet.ac.in
6. www.karnatakaapex.com
III. Annual reports of the bank

IV. Co-Operative Societies Act 1959
V. Banking Regulation Act 1949
VI. Interaction with the Administrative Body, Employee, and customers
VII. Experience : Personal visit to the bank in working hours

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APPENDEX
MUDGAL URBAN CO-OPERATIVE BANK
BALANCE SHEET FROM 2014-15 to 2016-17
As at As at As at
Particular Schedule
30-03-2017 30-03-2016 30-03-2015
CAPITAL AND
Rs . In Lacks
LIABILITIES
Share Capital A 99.8 83.48 77.62
Reserve B 356.66 308.1 251.49
Deposits C 2938.2 2271.29 1983.18
Other liabilities D 19.61 20.02 10.48
Profit E 54.33 58.88 62.86
Total 3468.6 2741.77 2385.63
PROPERTY AND ASSSETS Rs . In Lacks

Cash in Hand 80.73 42.71 37.81
Cash at Banks F 254.43 236.42 110.56
Investment G 1347.89 963.61 757.13
Loans & Advances H 1759.21 1481.16 1457.59
Fixed Assets I 14.2 3.24 5.21
Other Assets J 12.14 14.63 17.33
Total 3468.6 2741.77 2385.63

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MUDGAL URBAN CO-OPERATIVE BANK
PROFIT & LOSS ACCOUNT FROM 2014-15 to 2016-17
As at As at As at
Particular Schedule
30-03-2017 30-03-2016 30-03-2015
INCOME Rs . In Lacks
Interest Income K 251.68 232.21 217.47
Other Income L 116.34 74.99 80.17
Total 368.02 307.2 297.64
EXPENDITURE Rs . In Lacks
Interest on Deposits M 211.18 161.22 149.8
Personnel Expenses N 36.74 26.19 24.13
Administrative Expenses O 38.79 36.08 33.96
Depreciation/Amortization P 8.82 12.53 13.75
Other Expenses Q 18.16 12.3 13.14
Profit R 54.33 58.88 62.86
Total 368.02 307.2 297.64

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Report on internship at MUCO Bank Ltd.

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

1.1 Profile of the Credit Co-operative Society

Meaning of co-operative society

The main types of cooperative societies are :-

1. Consumer’s cooperative societies

1. Consumers cooperative societies

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

(a) Industrial service cooperatives

(b) Manufacturing cooperatives

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

4. Cooperative Farming Societies

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

Meaning of Co-operative Bank

Meaning of Urban Co-operative Banks (UCBs)

Need for Urban Co-operative Banking

Brief History of Urban Cooperative Banks in India

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

Under State Purview

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

Urban co-operative Banks as Scheduled Bank

Objectives and Functions of Urban Co-operative Banks

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

Banking and other facilities

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

STRUCTURE OF URBAN CO-OPERARIVE BANK IN INDIA

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

Progress of Urban Co-operative Banks in India

Federation of Urban Co-Operative Banks

NATIONAL FEDERATION OF URBAN COOPERATIVE BANKS & CREDIT

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

The main objective of the National Federative is to promote Urban Cooperative

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

5. To organize by itself and/or in collaboration with other bodies, conferences,

The Karnataka State Cooperative Urban Banks Federation

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

The Karnataka State Cooperative Urban Banks Federation

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

9. Active functioning of Arbitration Courts and speedy disposal of cases enabling to

1) Voluntary and Open Membership

2) Democratic Member Control

3) Member Economic Participation

4) Autonomy and Independence

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

5) Education, Training and Information

6) Co-operation among Co-operatives

7) Concern for Community

Table 1.1 Consolidated Statistics of UCBs in Karnataka As on 31.03.2017

S.NO Particular No/Amount

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

1.2 Profile of the MUCO Bank (firm) :

MUDGAL URBAN CO-OPERATIVE BANK LTD. ( MUCO BANK )

Origin of the bank

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF

Table 1.2. Overview of the Bank

Name of Bank : Mudgal urban co-operative bank ltd, Mudgal

Year of Establishment : 1998

Management Control : Selected Board of Directors

DEPARTMENT OF COMMERCE, CENTRAL UNIVERSITY OF