A PROJECT REPORT ON STUDY OF WORKING SYSTEM OF THE B.E.S.

T EMLOYEES CO- OPERATIVE CREDIT SOCIETY LTD

MASTER OF MANAGEMENT STUDIES UNIVERSITY OF MUMBAI

SUBMITTED TO MARATHA MANDIRS BABASAHEB GAWADE INSTITUTE OF MANAGEMENT STUDIES MUMBAI CENTRAL

SUBMITTED BY SONIYA T. BADEKAR ROLL NO. 03 MMS / MARKETING BATCH: 2010-2012

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STUDENTS DECLARATION

I, Soniya T. Badekar student of Masters of Management Studies ( Semester III ) of Babasaheb Gawde Institute of Management Studies ( BGIMS ), hereby declare that I, Have successfully completed this project on 30-6-2011 as a part of my Summer Internship. The information incorporated in this project is true and original and best of my knowledge.

SIGNATURE

ACKNOWLEDGEMENT

It is my privilege to express my gratitude and respect to those who guided and inspired me in the completion of this project. I sincerely thank our director Dr. Sunil Karve for giving me the opportunity to express myself through this project without whom, it would not have been possible to collect and assimilate the information on WORKING SYSTEM .

I would like to thank CHAIRMAN of THE B.E.ST EMPLOYEES COOPERATIVE CREDIT SOCIETY LTD, Mr. DANSINGH RAVAT for giving me an opportunity to be a part of their bank and learn the various aspects of banking.

This has been an overall learning experience. I would also like thank the General Manager Mr D.C Kanulkar,Deputy General Manager Mr agnelo fernandes,Supervisor Mrs S.S. Sonawane , Mrs D.D kadam and all other staff of the society for giving me their constant help and support.

Finally I offer my gratitude towards my college, Babasaheb Gawde Institute Of Management Studies and I offer my sincere thanks to all the people who directly or indirectly helped me to prepare this project.

Table of Content CONTENTS

1) EXECUTIVE SUMMARY 2) COMPANY PROFILE a) PROFILE,OBJECTIVE & INTENTION 1) OBJECTIVE OF STUDY 2) INTRODUCTION TO PROJECT REPORT 3) BANKING SYSTEM 4) CONCEPT OF CO-OPERATION 5) CO-OPERATIVE ORGANIZATION 6) BRIEF HISTORY OF URBAN -

PG NO. 6 7

8 9 10 12 14 23

CO-OPERATIVE BANKS IN INDIA.

7) OBSERVATION & FINDINGS a) AREA OF STUDY b) ORGANISATION STRUCTURE c) HOW FUNDS ARE RAISED d) SERVICES OFFERED e) MEMBERSHIP f) MANAGING COMMITTEE g) ELECTION RULES h) ANNUAL GENERAL MEETING

33 33 36 37 44 45 47 48

1) DATA ANALYSIS & RECOMMENDATION

a) BUDGET FOR 2010-11 4

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b) SOCIETYS PROGRESS REPORT c) PROFIT & LOSS STATEMENT d) BALANCE SHEET e) PROFIT DISTRIBUTION 1) COMPARATIVE STUDY a) PROFILE b) MANAGING COMMITTEE c) MEMBERSHIP d) SERVICES OFFERED e) PROGRESS REPORT 1) METHODOLOGY USED FOR PROJECT PREPARATION 2) BENEFITS OF STUDY 3) LIMITATION OF STUDY 4) SUGGESTION 5) BIBLOGRAPHY

51 55 58 64

65 67 68 69 69 74 74 74 75 75

EXECUTIVE SUMMARY
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The project titled STUDY OF WORKING SYSTEM being carried out for THE B.E.ST EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD, COLABA ,AT MUMBAI for the time duration of two months. This project is on study and analysis of the working system of this society, the services offered exclusively to the members,the membership rules,the election rules, the managing committee,the progress report,data analysis, comparative study with seimen employees co-operative credit society ltd

THE B.E.S.T EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD PROFILE

THE B.E.S.T EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD was registered in the year nov,1941 under the BOMBAY CO-OPERATIVE SOCIETIES ACT OF 1925 registered no.8126 by the employees of B.E.S.T. OBJECTIVES The objects of the society are to encourage thrift by enabling members to save part of their income in a safe and convenient way with the prospect of a fair profit,& to prevent indebtness by making loans available on reasonable terms and to act as agent for the joint purchase of the domestic requirement of its members.

SOCIETYS INTENTION
1) Economic & co-operativeness should increase among the members.

2) To provide loan at reasonable rate of interest. 3) To provoke the members to save some part of their salary as monthly saving deposits & fixed deposits. 4) To give loans at low rate of interest or no interest.
5) To collect RS 15 monthly from all members salary & create a Death Benefit

Fund .
6) To have Family Welfare Schemes.

7) To open new branches wherever needed. 8) To start education institution of the societys.

Objectives of the project report: The follows are the important objection:

 To make detailed study of the working system of The B.E.S.T EMPLOYEES

CO -OPERATIVE CREDIT SOCIETY LIMITED.

Study the establishment, growth and progress of service provided by the

society.
To study the budget,balance sheet and profit and loss statement. To study the products and services offered to the employees of B.E.S.T

undertaking by the society. To make a comparative study with SEIMENS EMPLOYEES COOPERATIVE CREDIT SOCIETY LTD.

Introduction to project report:

This project report entitled the credit facilities in THE B.E.S.T EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD. This has been brought out to know how this society functions and the credit facilities provided by the society. This project is also prepared to know the performance of the society.In the beginning of human existence, needs were simple and every individual produced all that was necessary to sustain life, he provided his own food of animal flesh and vegetable; prepared his own clothing and found his own shelter. After this state, barter system came into existence. Barter system means trade with exchange of goods, with the absence of money. At this stage the concept of dependency emerged in the routine life of the human beings. And their dependenc y demanded co -operation that is how co - operation was born. In course of time, people settled down in different occupations, and with specialization, exchange of goods became wider. And the money was introduced in trading, which was widely accepted for payment. As money started getting importance. Co -operation was going hand in hand with it. So, co-operation is an important thing, which plays an important role in all for goods and services and in settlement of debts. Money is given and received without reference to the standing of the person who offers it in payment. According to D.H. Robertson Money is any thing which is widely accepted in payment for goods or in discharge of other kinds of business obligations. This is the way that money got exten ds into the co- operation.

DEFINITION OF BANKING
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In general terms, The business activity of accepting and safeguarding money owned by other individuals and entities, and then lending out this money in order to earn a profit So we can say that Banking is a company, which transacts the business of banking. The Banking Regulations Acts defines the business as banking by stating the essential function of a banker. The term banking is defined as Accepting for the purpose of leading or investment, deposits of money from the public, repayable on demand or otherwise and withdrawal by cheque, draft, order or otherwise.

The following chart shows the working of the banking system

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Concept of co-operation Meaning: Co-operation means working together to accomplish the common goal through cooperative principles. Co-operation is much older than the mankind. Formation of social groups in outcome of reflective co -operation, while the life of the ants, bees, wincer, etc, provides the best examples of initiative co -operation, Right from the hunting age upto the present ager the progress and development of human being in all spheres, social, economics, religions and political is marked by a sense of thinking working together. In india throughout the ages of people and the communities worked together on an informal co-operate basis with regard to their religions, social, economic and cultural life. The word Co-operation is derived from the latin word Co - operari mean to to work. In other words co-operation means to work together to achieve common purpose. Co -operation promoter voluntarily association of individual having common needs to combine towa rds the achievements of common economic needs. If is recognized as a sector of business enterprise quite distinct from public sector or private sector.
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Definition of co-operation Co-operation has been defined by different authorities in different ways. Some definitions are as follows\ According to C.R. Fay: From socio-economic point of view describes Co-operation is an association for the purpose of joint trading, organizing, among the weak and conducts always in an unselfish spirit, on such term that all who are prepared to assume the duties of members proposition to the degree in which they make use of their association . B. According to Mr. Talmaki, he defined it as An association of the weak, who gather together for common economic need and try to, if themselves and others out of weakness into strength through business organization conducted for the common benefit of all who join it. C. According to professor Lambert observes. Co-operation as an enterprise formed directed an association of uses, applying within itself the rules of democracy and directly intended to serve both its own members and community as whole?

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Co-operative organization: Meanings: A co-operative organization [also referred to as a co -op] is a form of business ownership that consists of a group of people who have j oined together to perform a business function more efficiently than each individual could do alone. The purpose of a co -operative organization is not to make a profit for itself. But to improve each members situation. However, members of certain types of co-operative organization do make a profit by selling their product and / or service to customers who are not co-operative organization members. Definition: The internal labour organization definer a co -operative as an association of persons, usually of limited, means, who have voluntarily joined together to achieve a common economic and together the formation of a democratically controlled business organization making equitable contribution to the capital required and accepting a fair share of risks and benefits of the undertaking. According to Prof. Poul Lambert, a leading authority on co - operation state. A co -operative society is an enterprises formed and directed by an association of users,

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applying within itself the sales of democracy and directly intended to serve both its own members and the community as whole?

CO-OPERATIVE MOVEMENT IN INDIA: The co-operatives are the preferred instruments of socio -economic development. Their contribution to the national economy of the country is very significant. In the wake of declining role of public sector and various limitations of private sectors, relevance of co -operatives is achieving greater heights. In the emerging environment of capitalistic form of society for their socio -economic development. Government is also committee to provide policy support for the development of co operative sector in the country. It is an acknowledging fact that the idea of co-operation was popularized in this country through the state initiative and direction. Mr. Nicholson who was deputed to his report provided the basis for the government to stall the co-operative movement at the turn of the cultivations from the crushing burden of indebtedness and to faster thrift among the masses. Initially, the government include local will do and highly respected people to organize co-operatives in their area. The honorary organizers who received support from local officers. The co -operative societys acts were passed in 1904 and 1912, to provide the necessary, legislative from the functioning of co-operative instructions. The
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co -operative departments were setup to regulate the working of societies through the expected to be a government office different from the rest, the friend, philosophers and guide to the movements Gradually, the movement started diversifying its activities and vertically integrated structure come in the field of co -operative banking, marketing, small scale industries, consumer activities etc. In 1919 co-operative was removed from the central list and made a provincial (State) subject under the federal constitution. Vigorous efforts were made by the govt. during the great depression period of the thirties to save the movement. During the IInd world war, also the Indian co - operative movement experienced URS and down till independence. The co-operative in india has recorded by the tardy growth, inspite of the morale and material support provided by the government. According to co-operative commutes, this was due to the ..faire polias. Persuade by the government. Thus, tile down of independence the Indian co-operative movement had come to be described has not a movement but only a government policy, observed that Indian cultivator were provided by many lenders, thus tow above mentioned report is called upon the state to initiate move vigorous & propose full measurer to revitalize the entire movement. Almost by the sam e time, national economic plan (IInd 5 years plan) was launched, in which, the recommendations of this committee were fully incorporated. The policy adopted immediately therefore, did not encourage a radial reorganization of the structure but aimed at creating new condition in which co-operatives could function more effectively for the benefits of the weak and meet the opposition of

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the listed interests. According the state become a major posture in the share capital of co-operatives at all needs is credit processing, marketing, consumers activities etc the government has provided aid and assistance to the co -operative societies in india in the following manner.
1. States partnership in the share capital of co -operative societies.

2. Loan to societies 3. Subsides and grants 4. Guarantees 5. Contribution to risk fund 6. Tax concessions 7. Legal concessions and sanctions 8. Training and education 9. Help to reserve bank and other banking organization. 10. Supply of government officer on deputation. In addition to this, researcher and surveys are conducted for the benefits of cooperative and plans and programs are formulated for the state. Co-operative department. During all these years of co-operative development a paternalistic attitude has been adopted by the state, towards the co -operative it threatens to become more pronounced, mostly under pressure of need of governments sponsorship for expeditions development and for removal of poverty and backwardness the constitution of india has provided guidance for the state in such away that it can take a positive attitude for the development of co -operative sector

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Feature of co-operative organization: Following are the features of co-operative organization. 1) Voluntary Association: A co-operative society is a voluntary of persons not of capital. Any of person irrespective of sex, creed, caste, etc can join the society of his wish and he can leave it at any time after giving the notice to society. While leaving he has to withdraw his amount and he it not suppose to transfer the amount on other persons. 2) Source of finance: The capital of co -operative society is raised from the members by way of share capital since co -operatives are organized by relatively weaker section of society, the share capital is limited. 3) Control and Management: Democ racy is the Keynote of the management of the co -operative society since most of these societies operates on a local scale, the meetings of the member are generally well attended. Al time of meetings the members select the managing committee and lay down the policy which it must follow to promote their common interest, each member, what ever be his state in society, has one vote and hence an equal rights to participate in the management of society. Members cannot vote by proxy. Beside the organization the organization and control of a co-operative society may be carried on by 2 member working in different capacity and outsiders may be employed only when the society grows too large. 4) Service motive: A co-operative society is organized primarily with the object of rendering maximum service to its members in certain field. It doesnt aim at the cost of
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its members for it is formed basically for providing certain essential facilities to members. This doesnot mean that a co -operative society will have work for profit. It is quite usual for society to earn profit by extending their service to max-members. 5) Disposal of surplus: It is usual for commercial concern to distribute profits among the owners in the ratio of their capital distribution or in agreed ratio. A co-operative society differs from trading co. in this respect. Under the co -operative form of ownership and organization, surplus arising of a year working is given to the members not directly or divided on share held by each of them. But in the form of a bonus which need not be proportionate to their respective capital contribution. 6) Fixed return on capitals: The fixed or limited return on capital subscribed to the society must be paid out of the surplus to the members. Making payment of fixed interest or paid up capital definitely a first charge on the trading surplus, of all those who joined the society a solid reason for leaving their savings in deposits with it. 7) State control and co-operative status: Although voluntary in their basic character the co -operative society are subject to considerable state control and supervision. In india the co -operative society act as the case may.

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TYPES OF CO-OPERATIVE SOCIETIES. Co-operatives may be formed basically in any work of life. Some of them concern themselves with the moral and social uplift of a decreased or weak section of the society. White quite many of them combine some business activities with service to their memb ers. Since business are being consider here as a force of business organization only there societies which are concern with business purpose need on introduction here the principal types of co -operatives are as enumerated below;

1) CONSUMERS CO-OPERATIVE SOCIETY

2) PRODUCERS CO- OPERATIVE SOCIETY. 3) MARKETING CO-OPERATIVE SOCIETY. 4) HOUSING CO-OPERATIVE SOCIETY. 5) CO-OPERATIVE CREDIT SOCIETY.
6) CO-OPERATIVE SOCIETY FORMING SOCIETIES.

1. CONSUMERS CO-OPERATIVE SOCIETY; These societies are formed by the ordinary people for obtaining their day-to-day requirements of goods at cheaper prices. For this purpose, consumers co-operative stores are recognized by such societies these societies make their purchase in balk form whol esales at wholesale rates and sell the goods to member at market price. The difference is presented by the surplus which is distributed among the purchasing members in the form of .on purchases. This is the oldest form of co-operative organization.
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2. PRODUCERS CO-OPERATIVE SOCIETY;

It is also called as industrial co-operatives societies are voluntary association of small producers formed with the object of eliminating the capitalist form the system of industrial production. Some timers consumers societies may join hands with the association or producers. In such a case the firm co-operative societies is used for societies of this type. These societies produce goods for meeting the requirements of the consumers, sometimes thus production may be disposed of to outsiders at a profit being, distributed among the producers after marketing agreed percentage for welfare and general purpose. 3. MARKETING CO-OPERATIVE SOCIETY; The marketing co-operative society or the co-operative sales societies are voluntary association of independent producers organized for the purpose of arranging for the sale of their output. As the central sale agency for a member of producers a marketing co -operative quite after performs such important function of marketing as, processing and grading of the produce delivered by the individual producers. According to their contribution to the pool. Societies of these kinds are particularly useful for agriculture, small producers and artesians. 4. HOUSING CO-OPERATIVE SOCIETY: Housing co-operatives are the association of persons who are interested either in recurring dealership of a hours or obtaining accommodation at fair and reasonable rent such societies are formed in urban areas. Mostly intending, builders of hours join together to form co-operatives of this kind. Through, there societies they can secure not merely financial assistance but also the economics of purchase of building materials in
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bulk the membership of such a society may be thrown open to all those who are already to deposit money in the society for interest. Each member has to buy atleast one share and the liability is generally limited to his contribution.

5. CO-OPERATIVE CREDIT SOCIETY; The co-operatives credit societies are voluntary associated of the people with moderate means formed w ith the object of extending short term financial accommodation to them and developing the habit thrift among them the funds of these societies consists if share capital contributed by the members the liabilities of the members are in generally unlimited this helps the society in rising funds from outsiders and ensure that every members shows keen interest in the working of the society in granting loans the society may show consideration for the poor people who apply for smalls loans. Besides loans may generally be granted only for productive purpose the society may or may not ask for security of immovable property while making loans, the rate of interest charged in borrowing members is kept as low as possible.

Credit facilities may be divided in to two types they are:

A. AGRICULTURE CREDIT SOCIETY : They generally connect its activities

to a particular village providing loans for agriculture purposes.

B. NON AGRICULTURE CREDIT SOCIETY: These societies are meant to

provide bank accommodation to the members and may be formed by a small artisans in towns and try office clerks mill workers etc in cities.

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Brief History of Urban Cooperative Banks in India 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 centred around communities, localities work place groups. They essentially lent to small borrowers and businesses. Today, their scope of operations has widened considerably. 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 organisaton as against proprietary firms, partnership firms and joint stock companies which represent the dominant form of commercial organisation. 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 popularising 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
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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 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.

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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. 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 Co24

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 195859. 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 Centres 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 centre 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 perview of the Banking Regulation Act 1949 with effect from 1st March, 1966 and within the ambit of the Reserve Banks 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

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respective State Acts. In 1968, UCBS were extended the benefits of Deposit Insurance. 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 Commisssion (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

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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. Recently the problems faced by a few large UCBs have highlighted some of the difficulties these banks face and policy endeavours are geared to consolidating and strengthening this sector and improving governance. Source: Adapted from a paper by O.P. Sharma, formerly of the History Cell

ORGANISATION AND WORKING OF CREDIT CO-OPERATIVE SOCIETY The primary co-operative credit society is supposed to be an Association of borrowers and non-borrowers who, residing in a locality know each other and take interest in one another. Membership of the society is opened to any person in the locality provided his membership is approved by the fellow members. While admitting a new persons his character (regardless or caste and creed) is taken into account this is supposed to faster the spirit of co-operation and mutual help among members. A group
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of people comes together and forms the credit society where every persons knows a practically every other person of locality, the idea behind this is to facilities granting of loan to really needy person and effective specification of the use of loan given. . This is because it is on the foundation of basic unite established at the group level that the entire foundation of co- operative credit structure is erected and because, It is the primary co-operative credit structure is erected which comes in direct contact with the members giving them loan and collecting repayment of loans from them. In case of primary credit co-operative society members contribute to share capital, each members is required to purchase a minimum number of shares. It is also laid down that no member would hold share beyond a maximum nor of shares pres gribed & each member has only one vote for the purchase of electing official to various post in society, irrespective number of shares the member holds. Thus is meant to ensure democratic management. And control of primary society. These shares are also exempted from attached by court of any dues in civil suit or in insolvency proceedings the liability of members is unlimited.

As regards, administrated of primary co-operative credit societies, there is general body consisting of members of society. General body elects annually the president or chairman, secretary and other members of management who all work in honorary capacity. Generally the accountant is a paid employee of the society. Advantages of Co-operative Society A Co-operative form of business organisation has the following advantages: i. Easy Formation: Formation of a co-operative society is very easy compared to a
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joint stock company. Any ten adults can voluntarily form an association and get it registered with the Registrar of Co-operative Societies. ii. Open Membership: Persons having common interest can form a co-operative society. Any competent person can become a member at any time he/she likes and can leave the society at will. iii. Democratic Control: A co-operative society is controlled in a democratic manner. The members cast their vote to elect their representatives to form a committee that looks after the day-to-day administration. This committee is accountable to all the members of the society. iv. Limited Liability: The liability of members of a co-operative society is limited to the extent of capital contributed by them. Unlike sole proprietors and partners the personal properties of members of the co-operative societies are free from any kind of risk because of business liabilities. v. Elimination of Middlemens Profit: Through co-operatives the members or consumers control their own supplies and thus, middlemens profit is eliminated. vi. State Assistance: Both Central and State governments provide all kinds of help to the societies. Such help may be provided in the form of capital contribution, loans at low rates of interest, exemption in tax, subsidies in repayment of loans, etc. vii. Stable Life: A co-operative society has a fairly stable life and it continues to exist for
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a long period of time. Its existence is not affected by the death, insolvency, lunacy or resignation of any of its members. . Limitations of Cooperative Society Besides the above advantages, the co-operative form of business organisation also suffer from various limitations. Let us learn these limitations. Co-operative Society 99 i. Limited Capital: The amount of capital that a cooperative society can raise from its member is very limited because the membership is generally confined to a particular section of the society. Again due to low rate of return the members do not invest more capital. Governments assistance is often inadequate for most of the cooperative societies. ii. Problems in Management: Generally it is seen that co-operative societies do not function efficiently due to lack of managerial talent. The members or their elected representatives are not experienced enough to manage the society. Again, because of limited capital they are not able to get the benefits of professional management. iii. Lack of Motivation: Every co-operative society is formed to render service to its members rather than to earn profit. This does not provide enough motivation to the members to put in their best effort and manage the society efficiently. iv. Lack of Co-operation: The co-operative societies are formed with the idea of mutual co-operation. But it is often seen that there is a lot of friction between the members because of personality differences, ego clash, etc. The selfish attitude of members
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may sometimes bring an end to the society. v. Dependence on Government: The inadequacy of capital and various other limitations make cooperative societies dependant on the government for support and patronage in terms of grants, loans subsidies, etc. Due to this, the government sometimes directly interferes in the management of the society and also audit their annual accounts.

Area of study: THE B.E.S.T EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD is located at colaba,electric house is selected and their information about the the working of the society functioning are collected. The project report aimed at giving analysis on credit facilities in general and analysis of society from a summer trainees point of view.

THE B.E.S.T EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD A)A Profile B) Source of Fund

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C) Lending of the Society D) Management of the Society E) Progress of the Society

ORGANISATION STRUCTURE COMMITTEE MEMBERS CHAIRMAN - MR. DANSINGH RAWAT VICE CHAIRMAN- MRS APURVA PARAB TREASURER-MR VIVEK GHOLAP SECRETARY-PRAVIN KUMAR CHAUDHARY OTHER COMMITTEE MEMBERS MR NARESH THAKUR MR S N KAMBLE MR SHAHANVAZ SHAIKH MR DINESHPRATAP R.SINGH MR. INDRABAHADUR R. YADAV MR KANAYYALAL SINGH MR. SYAM SHINDE MR CHANDRAKANT CHILE MR ARUN BODKE ME RAJHANS TIKAM MR JOSWA FERNANDES MR PANDARINATH J. BHOR MR ANIL J. JADHAV
32

MRS VARSHA NAVLE MR SHANKAR THORAT MR UTTAM V. PADMIRE MR SUDESH MASKAR(UNION REPRESENTATIVE) AUDITORS Internal auditor MR KAMAT & CO. Government auditor-MR MALI & CO.

REGISTERED OFFICE (19/11/1941) The b.e.s.t employees co-operative credit society ltd Transport house,shaheed bhagat singh path, Colaba mumbai-400039

HEAD OFFICE(19/11/1941) The b.e.s.t employees co-operative credit society ltd 3rd floor,parivahan bhavan, Shaheed bhagat singh path, Colaba mumbai-4000001

REGIONAL OFFICES ANIK (1/4/1999) MULUND(1/8/2000) OSHIWARA(aug 1999)

33

MAJAS (8/8/2001)

Total no. of staff Officers -8 Supervisers -10 Clerk -27 Writer -4 Daftary -1 Sorter -2 Peon -5

FUNDS ARE RAISED BY FOLLOWING WAYS By subscriptions and shares by loans and deposits from members by donations and entrance fees from profit division
loan from MUMBAI DISTRICT CENTRALISED CO-OPERATIVE

BANK
loan from MAHARASHTRA STATE CO-OPERATIVE BANK Loan from SHIKHAR BANK

34

A. The capital of the society shall not exceed RS 50,00,00,000/-divided into

50,00,000 shares of RS 100 each to be paid for on allotment in full or by monthly installments. B. Loans and deposits from members for fixed periods or upon current account at such rates of interest and to such an amount as may be determined by the managing committee may be received provided that the total of loans and deposits shall not at any time exceed eight times the paid up share capital plus the reserve fund and building fund if any, and minus accumulated losses.
C. The funds of the society, when not employed in the bussiness of the

society,should be invested or deposited in the societys normal dues or for the purpose of building or buildings for its use with the previous sanction of the registrar.

SERVICES OFFERED I. Monthly saving deposits. II. Fixed deposits. III. Loan against fixed deposits. IV. Personal loan. V. Education loan.
VI. Short term loan/Top up loan(consumer loan).

VII.Shares.

35

Monthly saving deposits

1) Monthly saving deposit account can be opened by who have taken the

membership of the society. 2) RS 500/- every month is deducted from the salary of the members and transferred to monthly saving deposit account. 3) No member shall be permitted to withdraw any sum from the monthly saving deposit account except at the time of cessation of his membership as laid down in the bye laws. 4) A loan may be granted to a member at the discretion of the managing committee against the security of his monthly saving deposit account subject to the following provision:
i.

A loan shall not exceed RS 4,00,000.

1) Once cessation of membership the amount standing to the credit of a member to

the monthly saving deposit account will be refunded to him/her or in case of the members death to his nominee . 2) The rate of interest shall be decided by the managing committee. 3) The rate of interest is 8% per annum.

FIXED DEPOSIT ACCOUNT 1) The minimum amount to be received in the fixed deposit shall be RS 1000 or multiple of RS 1000. 2) Fixed deposit shall be not less than 30 days and more than 5yrs.
3) The rate of interest shall be determined by the managing committee

from time to time but not less or more than as prescribed by the mumbai district central co-operative bank.
36

4) In the expiration of the term of deposit interest shall cease.

5) If the depositor ceases to be a member of the society the sum deposited

together with the interest due to pay there on upto the date of cessation of membership shall be refunded to the depositor irrespective of the terms of deposits.

Fixed deposit terms and rate of interest. 3 years 1 year 6 month 8% 8.50% 7.50%

Pre Mature days and interest rate 0-30 days 30-180 days 180-365 days 366 & above no interest 3.5% 6% 7.5%

LOAN AGAINST FIXED DEPOSIT Loan against fixed deposit is given on the 80% of the principle amount of the fixed deposit. The rate of interest of loan against fixed deposit is 1% more than the rate of fixed deposit.

37

LOAN
I.

Loan shall be made only to the members of the society. Application shall be prescribed form approved by the managing committee & shall be accompanied by a true statement of applicants indebtness,if any.Application shall be dealth with in order of receipt by the managing committee who may either grant the same or any portion of them on such terms and condition consistent with the bye laws as they may think fit or may refuse the same without being under obligation to assign any reason for doing so.

II. A loan may be granted to any member of 50% of his basic plus dearness

allowance subject to a maximum limit of RS 5,00,000. III. A member shall not be allowed to borrow a fresh loan unless he has repaid 30% of his previous loan.
IV. In addition to the limit of individual borrowing,a member can offer as a surety

in not more than 4 cases.

V. Loan shall ordinarily be repayable in monthly installments not exceeding 84 in

nos.
VI. But the committee have authority to extend repayment over a longer period

limited to 120 months . VII.A borrower may pay off the whole or balance of the loan due with interest thereon at any time occurrence of the loan. VIII. When a person who stood as surety for the loan dies or ceases to be in the service of the B.E.S.T or of the society or becomes in the opinion of the managing committee unfit to be surety, the managing committee may require the borrower to find another approved surety within 2 months.

38

IX.

It the duty of the managing committee to take action for the recovery of overdues of loans.

X.

In case of death of the person who took the loan the loan shall be recovered from the saving & shares & still any recovery left than shall be deducted from the salary of the surety

PERSONAL LOAN Personal loan will be granted above RS 1,00,000 RS 4,00,000 to the members of the society who have completed 1 yr of membership. The repayment duration is maximum for 120 months.The installment and the interest amount is deducted directly from the salary of the employees. Surety is needed to be given by the members of society according to the loan amount and the surety should also be the member of the society its as fallows: Loan amount Above RS 1,00,000 RS 2,00,000 RS 3,00,000 RS 3,00,000 RS 4,00,000 Surety 2 3 4

SHORT TERM LOAN Short term loan is granted to the members of the society who have completed 1yr of membership with the society.
39

The repayment duration is maximum for 120 months.The installment and the interest amount is deducted directly from the salary of the employees. Short term loan RS 10,000 RS 1,00,000 is granted. 1 surety is needed with the loan application of the member.the surety should be the member of the society.

EDUCATION LOAN Education loan id granted to the members of the society whose children are pursuing higher education like MBA,ICWA,CA,ENGINEERING ETC. The education loan limit is RS 5,00,000. The repayment duration is maximum for 120 months.The installment and the interest amount is deducted directly from the salary of the employees.

Loan amount Above RS 1,00,000 RS 2,00,000 RS 3,00,000 RS 3,00,000 RS 4,00,000 RS 4,00,000 RS 5,00,000

Surety 2 3 4 5

INTEREST ON LOAN
1. The rate of interest on loans shall be at 11.50% p.a for all types of loan..Loans

taken before the 16th of a month will bear interest for the full month & on or before the 16th of the month, interest will be charged for half of that month . the

40

rate of interest be varied by the managing committee but it shall not be less than 9% and more than 15%.
2. A penal interest @ 2% p.a will be charged in addition to the ordinary interest on

all repayment of loans from the date of default, if not paid within 15 days from the due date.

SHARES
1) In addition to the shares purchased from the monthly subscription, any member

is at liberty to apply to the managing committee for further shares & to pay them in single cash payment or through monthly subscription of RS 100 or its multiple till his holding of shares capital reached to RS 20,000 . 2) Maximum shares 200 shares@ RS 100.
3) A member may transfer his shares after holding them for 1 year to another

member with the approval of the managing committee . The transfer is not complete until the name of the of the transferee has been entered in the shares transfer register & such fee as the managing committee may prescribe has been paid. 4) Shares certificate bearing distinctive no. shall be issued for shares.
5) In the death of the member the value of the shares not exceeding its paid up

value standing to his credit by way of shares or dividends or subscriptions shall subject to deduction on account of his liabilities be paid to the person nominated by him or in the absence of such person as may appear to the committee to be
41

entitled to receive the amount as heir or legal representative of the deceased member on his executing a deed of indemnity of the society.The deposits of the deceased may be withdrawn by such person only if the period of deposits has expired. 6) The rate of dividend on the shares may be decided by the managing committee in the annual general meeting.

MEMBERSHIP 1) He is permanently employed in the BOMBAY MUNICIPALITY, B.E.S.T undertaking or in this society.
2) Have completed atleast 1 year of membership.

3) He is not grossly addicted to alcoholic to drink or drugs.

4) His written application for membership has been approved by an absolute

majority of the managing committee.

5) He has paid an entrance fees of RS 10. 6) He has purchased atleast 1 share or paid monthly subscription under the bye

laws. 7) He gives in writing an irrevocable authority to the disbursing officers to recover his dues from pay bills.

WHEN A PERSON CEASES TO BE A MEMBER . 1) On death. 2) When his resignation is accepted by the managing committee. 3) On expulsion.
42

4) On the transfer or forfeiture of all the shares held by him.

5) When he ceases to be in the permanent employment of the Bombay

Muncipality,B.E.S.T undertaking or of this society.

RIGHTS OF THE MEMBER 1) From the day they are the member of the society, they can use their rights. 2) They can take part in the working of the society. 3) They can stand in the election of the society & also have the rights to vote in the election.

MANAGING COMMITTEE The managing committee shall have 20 members. President 1 Vice- president 1 Secretary 1 Treasurer 1 16 other members. 1) The election of the managing committee members shall be held at the end of every 5 years.
2) In the absence of the chairman, the vice chariman shall take the chair or

failing him the member of the committee present shall elect 1 of the member to be the chairman of the meeting.
43

3) Every question of a meeting of the committee shall be decided by the

majority of votes incase of equal votes, the chairman shall have a casting votes.

POWERS OF THE MANAGING COMMITTEE 1) To admit members.

2) To appoint,suspend,dismiss or fine the secretary and/or treasurer & all

salaried servants of the society & to fix the remuneration. 3) To hear &deal with the complaints.
4) To deal with the application of loans ,for which purpose a loan sub

committee may be appointed .but all the loans so sanctioned shall be confirmed by the managing committee. 5) To supervise & check the account. 6) To enquire into & take actions in case of default. 7) To prepare annual statement of accounts. 8) To raise loans & deposits on such terms as may be decided upon.
9) To institute,defend or compromise on legal proceedings.

10) To open an account or accounts for the deposits of the society s fund in any bank or banks approved by the registrar and to authorise of the managing committee joining or the secretary & one member of the managing duly authorised as above jointly to sign cheques drawn upon that account or accounts as may be laid down in resolution.

44

11) To purchase,endorse,sell,transfer or otherwise deal with government securities & other securities & shares on behalf of the society & to delegate powers in their respect by written resolution to 2 or more members of the managing committee.
12)To start provident fund or any other welfare schemes or schemes for the

benefits of the employees of the society & such provident fund or welfare scheme or scheme and shall be governed in according with the rules framed by the managing comittee & approved by the assistant registrar. 13) To do all such acts as are incidental to or which the managing committee may think conducive to the attainment of the objective of the society.

ELECTION RULES
1) The candidates who is eligible to stand in the election are the members

of the societys.
2) A list of voters shall be prepared as on the closing day of every co

operative year.Members admitted after that date shall not participate in the election. 3) No member shall nominate more than 11 candidates for manging committee. 4) The nomination shall be received by the secretary or in his absence by the person who carries on the secretarys duties for the time being.
5) The committee shall scrutinize all the nomination.If any nomination are

rejected,the committee will communicate the facts to the nominators or nominees.

45

6) The list of the valid nominations shall be hung up on the notice board. 7) Voting shall be by ballot. 8) 1 or more polling rooms will be arranged for the elctions by the managing committee where shall be 1 or more polling officers for each. 9) Counting of votes shall be done by the scrutineers who shall be appointed by the managing committee & the results will be announced by the chairman at the annual general meeting.

ANNUAL GENERAL MEETING. 1) According to the MAHARASHTRA CO OPERATIVE SOCIETY ACT 1960 RULES 1960 RULES 1961 the annual general meeting may be conducted.
2) The annual general meeting shall be held within a period of 3 months from

the date of closing of the year fixed under the rules. 3) The functions of the annual general meeting are, i. To appoint persons to audit the accounts of the society during the ensuing year & to fix their remuneration. ii. To receive from the managing committee the balance sheet of the last year & to sanction the distribution of the profits. iii. To consider any communication or audit memorandum that may have been received from the registar or any other bussiness duly brought forward. iv. To confirm the minutes of the previous general meeting. v. To sanction the estimated budget statement.
vi. To decide rate of dividend on the shares . vii. To discuss upon any important issue of th society. 46

viii.Special genral meeting to be called at any time by the president or by the

majority of the managing committee & shall be called within 1 month. On a requisition in wirting of 1/5th of the members of the society. ix. In case of annual general meeting 14 days notice & in case of special general meeting 7 days notice shall be given. x. The president or the chairman of the meeting shall have a casting vote in addition to his ordinary vote. xi. Every member shall have 1 vote irrespective of the no. of shares held by him.
xii. 2/5th of the total no. of members or 25 (whichever is less) shall form a

quoram at the general meeting.

BUDGET FOR 2010 11

2009-10 Estimated 450000000 2,00,00,000

Expenditure

2009-10 Actual

2010-11 Estimated

2009-10 Estimate d 51,00,00, 000 2,00,00,0 00

Income

2009-10 Actual 49,49,89,386.5 0 3,93,57,330

2010-11 Estimated 53,00,00,000 4,00,00,000

Interest payable Establishment charges

39,84,77,731.23 45,00,00,000 1,75,76,755.60 2,00,00,000

Investment on loans Investment & miscellaneo us

20,00,000 32,00,000 5,00,000 30,00,000

Stationery

& 21,65,375.00 25,16,666.00 14,72,150.96 29,13,938.00

25,00,000 25,00,000 15,00,000 32,00,000 47

printing Audit fees Depreciation Contingencies

1,01,000 5,11,99,000

Provisions Surplus

8,32,000.00 10,76,11,890. 71

10,00,000 8,93,00,000

Total 53,00,00,000 5,33,56,65,07 5 57,00,00,00 0 53,00,00 ,000 53,43,46,713. 57,00,00,000 50

The following estimated budget statement for the financial year 2009-10 and the actual expenditure and income for the same financial year .There is also the estimated budget expenditure and income for the financial year 2010-11.As we can from the above figure the the interest of loans payable and the investment on loans in higher than any other expenditure or income.The surplus expected for the year 2009-10 was RS 5,11,99,000 and the actual surplus was double than the expected was RS 10,76,11,890.71.The estimated provisions for the year 2009-10 was RS 1,01,000 but the actual provision made was RS 8,32,000 which means 8 times more than what was estimated had to be kept as provisions .So the provision estimated for the financial year is RS 10,00,000.The depreciation estimated for the financial year 2009-10 was RS 5,00,000 and actual was RS 14,72,150.96 so the depreciation estimated for the year 2010-11 is RS 15,00,000.As we can see the surplus have increased because the only source of income is income from investment.

SOCIETYS PROGRESS REPORT

48

SHARE CAPITAL The issued & subscribed share capital of the society at the close of the year under report was RS 26,97,65,750 (2008-09) as against RS 26,75,66,401(2009-10). MEMBERSHIP During the financial year 2008-09 38147 members were there. 991 members retired ,expired & by some other reasons the members declined.In the financial year 2009-10 34 new members were registered & the membership became 37190

DEPOSITS In the last 3 year the following was the deposits. 2008 Fixed deposits Monthly saving deposits Staff savings fund 2182.28 19822.19 2.97 2009 1411.61 22238.55 2.31 2010 942.10 14818.50 2.05

LOANS

49

The members should not take loans from other commercial banks at a higher rate of interest & their economic conditions should be stable.So for this the society gives loans to the members of the society.The loan limits have been increased to RS 3,50,000.In the financial year 2009-10 the society have given loans to 3729 members of RS 65,13,12,990 in this amount the loan the loan of the committee members ( as worker member) loan of RS 50,08,082 and from workers RS 1,18,60,350 is to be come.Societys ex-members 1342 have overdues of RS 12,25,28,499 to be recovered. HIGHER EDUCATION LOAN Higher education loans are given to the students wgo are pursiung higher education like ENGINEERING,MBA,CA OR ICWA ETC.This loans is given exclusive to the children of the members who are pursuing higher education and the limit have been extended to RS 5,00,000.The rate of interest would be charged 1% less than the personal loan rate of interest.

OVERDRAFTS To meet the heavy demands for loans from the members the committee had to resort for overdraft accommodation from the mumbai district co operative bank at 11.50%.At the end of the year the total amount due in regards is RS 10,34,38,203.60 for the financial year 2009-10.Interst to be given to the mumbai district co operative bank is RS 1,89,63,78,944.

MONTHLY SAVING FUND.

50

In this fund at the end of the financial year 2009-10 was RS 1,48,18,50,086.20 is collected from the co operative officers and the worker members.The interest given is 8% per annum.

OTHER FUNDS Reserve fund is 25% which is RS 22,22,94,738.60 of which dividend equalisation fund is RS 2,95,000 Bad debts fund is RS 18,01,000 Building fund is RS 14,53,,03,000 Charity is RS 72,26,999

RETIRED MEMBERS MEET To the retired members a coupon of RS 2500 is given as gift voucher.In this financial year 2009-10 1098 members have retired & gift voucher of RS 24,97,000 is given.

SOCIAL CAUSES

51

Health financial help is given to 121 members of RS 1,38,450 for the financial year of 2009-10.

MENTALLY RETARDED FUND For the financial year 2009-10 every month a sum of RS 300 is given to the members of the society of whose any of the relative is suffering from mentally retardation.the financial of RS 5,12,000 is given in the year 2009-10.

DEATH BENEFIT FUND Death benefit fund have been increased from RS 75,000 to RS 1,00,000 which is given as a financial aid to the family of the expired members.A sum of RS 15 is deducted from the salary of the members and deposited into the death benefit fund account.

INVESTMENTS Till 31/3/2010 in the other banks share capital of RS 5,18,62,000 and interest of RS 25,47,11,000 have been deposited with them.

52

PROFIT AND LOSS STATEMENT EXPENDITURE To interest on M.S.D RS 2,93,271 PS 00 INCOME By interest RS on 23,35,81,62 4 56 PS 80

misterm loan To interest on savings 0 00

By interest on short 1,47,466 term loan

To interest on fixed deposit

89,64,641

96

By

interest

on 5,61,719

90

consumer loan To interest on fixed loan 18,49,44,018 00 By interest on 18,25,290 01

educational loan To interest on overdraft 1,78,67,659 00 By interest on flood 7,17,271 loan To salaries 1,09,55,080 00 By interest on top up 2,14,07,593 loan To leave travel assistance 1,77,500 00 By interest on 3,57,476 16 47 29

housing loan To contribution to staff P.F 11,12,968 by society To educational aid to staff 34,200 children To bank charges 49,001 00 00 00 By interest on 2,14,07,593 00

investment in F.D By interest on bank 5,27,804 account By shares dividend on 32,45,049 00 00

To rent To postage

600 8,791

00 00

By nomination fees

6,590

00 66

By interest on loan 82,409 against f.d

To telephone charges

1,42,169
53

00

By

L.I.C(against 0

00

housing loan) To stationery & printing 32,04,791 charges To computer charges To sundry charges To advertisement expenses To legal charges To professional charges 3,28,547 2,49,093 2,11,234 6,18,550 3,24,800 00 50 00 00 00 00 00

To staff fidelity & cash in 28,876 transist To professional tax(by 0

00

society) To travelling expenses for 29,488 m.c members To electricity charges To mediclaim to staff To expenses for A.G.M 99,797 1,97,201 12,82,787 00 00 00 00 00

To financial aid to mentally 4,14,600 retarded children To memento to retired 12,49,781

00

members To medical aid to 0 00

members(family planning) To audit fees To gun gaurav To penal interest To administrative charges 2,99,207 15,32,016 0 18,00,000
54

00 00 00 00

To excess of income over 4,74,56,971 expenditure

59

283879638

85

283879638

85

BALANCE SHEET LIABILITIES SHARE CAPITAL RS RS 27,34,04,279.00 ASSETS CASH BANK RS RS

BALANCES Cash on hand 0 2,54,43,153.00

RESERVE FUND

B.O.I:-S/B A/C(ECECTRIC HOUSE)

Reserve fund

24,91,99,738.60

B.O.I CURRENT 7,50,000.00

55

A/C Sympatiser membership fees Nominal membership fees Entrance fees 6,810.00 130.00 260.00 B.O.I CURRENT 40,810.68 A/C(APNA BAZAAR) B.O.I CURRENT 6,15,708.70 A/C(SION BRANCH) B.O.I CURRENT 6,20,277.00 A/C(GOREGAON BRANCH) Penal interest 3,14,728.00 24,95,20,666.60 B.O.I CURRENT 8,27,712.50 A/C(MULUND BRANCH) B.O.I CURRENT 10,23,734.57 A/C(ANDHERI BRANCH) OTHER FUNDS B.O.I CURRENT 45,69,735.00 A/C(DEONAR BRANCH) Building fund 15,63,03,000.00 M.D.C a/c Dividend equalisation Bad doubtful & 18,01,000.00 debt 3,00,000.00 M.D.C current a/c 3,38,09,085.39 bank- 1,00,998.00 bank-S.B 16,955.00

56

reserve Charity Memento retired members Special P.F(gratuity) Members welfare fund Societys election expenses Short loan Death beneyolent fund 1,55,79,420.00 332395590.13 term 1,22,234.15 Mumbai pagardar 500.00 P.S.S.M Mumbai kokan 500.00 5,81,62,000.00 35,94,661.98 13,76,29,565.00 98,43,710.00 The M.D.S co-op 5,81,55,000.00 bank ltd The M.S Co-op 1,000.00 72,21,999.00 to 00 INVESTMENT IN SHARES

bank ltd Lokmitra maryadit S.M.P 5,000.00

pagardar P.(shares)

STAFF PROVIDENT FUND Provident fund 3,10,02,357.00

INVESTMENT IN F.D

The M.D.C co-op bank(reserve) Fund RS 22,10,01,000/inclusive

25,47,11,000.00

Staff N.C.P.F

7,86,402.00
57

Spl.P.F centr(reserve fund)

3,804.25

Interest on P.F 24,94,713.91 inv in S.B a/c

STAFF PROVIDENT FUND

Interest on P.F 2,32,437.66 loan a/c

33,23,95,590.13

The M.D.C co-op 3,09,58,012.00 bank-F.deposit B.O.I staff P.F:- 37,14.82 S.B a/c

DEPOSITS

M.D.C

bank-staff 5,41,688.00

P.F S.B a/c Fixed deposits 11,55,64,805.00 Provident loan M.S.D 1,59,19,28,627.2 0 Staff fund saving 1,69,993.00 1,70,76,63,225.2 0 LOAN MEMBERS CURRENT LAIBILITIES Provision audit fees Ex-grati bonus 2,22,499.00 to staff
58

fund 30,16,300.00

Int.

on

staff 0

3,45,19,714.82

N.C.P.F

TO

Medium term loan

3,62,10,72,004.2 5

for 0

Short term loan

00

Consumer loan

27,83,833.73

Suspense a/c Revenue stamp Centri.

66,58,410.84 0

Educational loan Flood loan

2,35,94,143.00 1,65,25,322.00

To 0

Top-up loan

34,71,73,277.00

4,01,11,48,579.9 8

education fund Unclaimed dues fund Dividend 24,73,69,62.75 1,57,270.00 Housing loan to staff Loan against fixed deposit The MDC co 21,68,18,274.60 op band ltd-od a/c Loan defaulter 1,39,75,843.00 surety(L.D.S) The M.D.C 1,49,62,50,488.0 0 Furniture equipment Chikitsalaya & Festival advance

59,98,436.00

2,57,000.00

1,45,200.00

25,51,346.43

55,73,689.00

bank-fixed loan C.B

17,93,286.00

Deposit with BEST undertaking

63,60,035.00

Medical relief 77,32,459.00 to members Security deposits Bank of india 0 S.B-a/c Income tax 0 1,76,83,70,493.1 25,000.00

Security deposits

Special stamp

adhesive

50,400.00

Service charges

4,860.00

Net paid
59

00

9 L.I.C(against housing loan) C.B Excess expenditure income of over 0 0 41,776.26

PROFIT LOSS A/C Balance Excess income

&

182.55 of 4,74,58,971.39 over 4,74,59,153.94

expenditure

4,41,33,33,122.8 8

4,41,33,33,122.8 8

60

PROFIT DISTRIBUTION In the present year net profit is RS 10,76,11,890.71 including last years carry forward profit 161.04 the committee recommends appropriation of the total profit of RS 10,76,12,051.75 the distribution is as fallows. Reserve fund(25%) Dividend(15%) Building fund Societys election Medical relief to members Members welfare fund Charity Mememto/or retiring employees members Carry overs TOTAL RS 982.55 RS 10,76,12,051.75 RS 2,69,05,000 RS 3,85,82,869.20 RS 1,10,00,000 RS 8,00,000 RS 15,00,000 RS 2,08,19,000 RS 8,00,000 RS 5,000

61

AUDIT The audit of accounts for the financial year 2009-10 was carried out by the societys internal auditors by MR S.N KAMATH & CO.For the year 2008-09 MR RAJU & PRASAND & CO.,CHARTERED ACCOUNTANTS. GENERAL The audit classification of B GRADE awarded to the society 192 members were in attendance at the last general annual meeting.

COMPARATIVE STUDY. COMPANY NAME : SEIMENS EMPLOYEES CO OPERATIVE CREDIT SOCIETY LTD PROFILE :The Siemens Employees Co-operative Credit Society Limited was formed in 1961 registered no.29753 of 1961. On 29th July, 1961 the Credit Society was registered under the Maharashtra Co-operative Societies Act. SOCIETYS INTENTION; The Siemens Employees Co-operative Credit Society Limited was formed in 1961 at the behest of the unions and willing support from the company management with the main purpose of establishing a financial trust that will cater to two financial requirements of employees : to save money and to loan money in case of emergency.
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In those days of closed economy, it was difficult for individuals, especially staff and workers to get quick and easy loans. On 29th July, 1961 the Credit Society was registered under the Maharashtra Cooperative Societies Act and any employee could become a shareholder by paying Rs.10/- a share. Needless to say, there was overwhelming support and participation from employees. The Society is administered in line with the guidelines of the Maharashtra Cooperative Societies Act. Members of the Society elect the Managing Board, comprising of a President, Chairman, Vice-Chairman, Secretary and treasurer. As per bye-laws of credit society, the Siemens Management nominates a Senior Manager of the company, who is also a member of the Society as the President of the Board. As Siemens grew, membership of the Society kept pace and spread to Kalwa, Nashik and Aurangabad. Practically every Siemens office and union in Maharashtra was affiliated to the credit society. Membership of the Society at one time was 5,500 and 3,010 today largely due to the voluntary seperation of numerous employees in the past few years. Credit Society has computerised its functions largely due to the support from Siemens Ltd. & SISL managements. Siemens Employees' Co-operative Credit Society Ltd Head Office- Worli Address : 130, Pandurang Budhkar Marg, Opp. Doordarshan, Worli, Mumbai - 400 018. Tel. : 022 - 2498 7159 / 7245
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REGIONAL OFFICE;

Kalwa Office Address Tel. : Kalwa Works, Thane Belapur Road, Post Box No.85, Thane - 400 601 : 022 - 2762 3564

Nashik Office Address : Nashik Works Plot no.C-1, Additional Industrial Area, MIDC, Ambad, Nashik 422 010. Tel. : 2532302639

MANAGING COMMITTEE; PRESIDENT - Mr. Pravin Deshmukh Chief Manager Personal (Kalwa) CHAIRMAN- Mr. Ashish Phanse, KALWA/WMOT WINDING VICE-CHAIRMAN- Mr. Prashant Kadam,KALWA/WSWB/RMU TREASURER- Mr. Gopi Bhalerao,KALWA/WMOT/QI SECRETARY- Mr. Vikas Kamble,KALWA/WSGR/PMM DIRECTOR- Mr. Sandeep Nimkar,KALWA/CANTEEN DIRECTOR- Mr. Dattatraya Dumbre,KALWA/WSGR/PC1 DIRECTOR- Daphne Gonsalves,H. O.B./S.N.C DIRECTOR- Mr. Rajesh Kshirsagar,KALWA/WSGR/ASSLY
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DIRECTOR- Mr. Chandrahas Sawant,KALWA/TOOL ROOM DIRECTOR- Mr. Ganesh Wangalwar,AURANGABAD/WSGR DIRECTOR- Mr. Suhas Rane,NASHIK/SYS.WIRI

MEMBERSHIP A permanent employee of Siemens ltd. & its alliances companies can become a member of Credit Society after purchasing minimum 30 shares (Rs. 300/-) SHARE CAPITAL Minimum share contribution of Rs.300/- will deduct from members monthly salary upto Rs.4,000/-. After the deduction will continue as Members Subscription Fund A/c. MEMBER SUBSCRIPTION FUND After completion of Rs.4,000/- in the Share Capital, deduction of subscription will be continue in Members Subscription Fund A/c. Managing Committee decides the interest rate on Members Subscription Fund as per the financial states. This year 10.5% interest declared & the same is credited to the members Bank A/c. NOMINAL MEMBER Members those who have Resigned or retired from Siemens Ltd. or from the Society's Membership, can be admitted as Nominal Member to get benefit from the investment of various Deposits Schemes. SYMPATHISER MEMBER Relatives of the members or Ex-members (Eg. Husband, Wife, Mother, Father, Son, Daughter, , Father-In-law, Mother-In-law) of the Society can become a Sympathiser

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Members & earn more benefit from the investment of various Deposit Schemes. PRODUCTS/SERVICES; FIXED DEPOSITS Monthly Income Scheme QUARTERLY REINVESTMENT PLAN Recurring Deposit Saving Account Long Term Loan Medium Term Loan Emergency Loan FIXED DEPOSIT: Members can invest a minimum amount of Rs.1,000/- in multiples of 500/-. Interest rates on Deposit are as follows : (w.e.f. 18/04/2011) 6 months to less than 12 months 12 months to less than 24 months 24 months to less than 36 months : Up to 36 months : 7% : 9% 8% : 8.5%

Interest on these deposit will be paid with principal amount on maturity Monthly Income Scheme Period : Minimum & Maximum 24 Months (w.e.f. 18/04/2011) Members can invest a minimum amount of Rs. 20,000/- & in multiples of 5,000/Rate of Interest will be 8.5% p.a. You can get interest by various ways.

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* * *

By Cash By Depositing in Saving A/c. & can be withdrawn as per the requirement. By investing same interest in Recurring A/c. & earn more interest.

* By ECS or direct credit the interest can be transfer to Banks SB A/c. Quarterly Reinvestment Plan...... Period : Minimum 24 Months & Maximum 36 Months (w.e.f. 18/04/2011) Members can invest minimum Rs. 1,000/- in multiples of Rs.500/-. The interest on this deposit is calculated at every quarterly @ of 7.75% p.a. on compound basis & paid along with the principle amount at the time of maturity.

Recurring Deposit Members can invest minimum Rs.100/- in multiples of 50/-. (w.e.f. 09/09/09) The rates on Interest are as follows : 12 months 24 months 36 months : 6.5% : 7.5% : 8%

Saving Account

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Members can open their Saving A/c. By depositing minimum Rs.200/- by cash. (w.e.f. 09/09/09) In this account members can authorise any amount to be deducted through his salary & can easily withdraw the same as per his requirement. Rate of Interest @ 4%. p.a. Max. withdraw / receipts by cash is Rs. 20000/Min. balance to be obtain Rs. 200/Withdraw twice a week.

LONG TERM LOAN: Loan is essential and need for today's situation. Today many Banks provide various loan facilities to the customers. But their aim is only to earn the profit. Loan Amount revided by 01/01/2010 Our Society Provides our members a maximum loan of Rs.8,50,000/- at the lowest interest rate with less documentation. No processing fees & No prepayment charges which is equally more important. The maximum repayment period 180 installments by keeping EMI or reducing system. The eligibility chart for the loan is as follows.

Rate of Int.-10.50% Repayment Period - 180 months ( w.e.f 01/01/10 )

i)

A member shall maintain 10% amount in Share & MSF of sanction loan. ii) Remaining balance of existing loan may be adjusted against sanctioned fresh loan.

iii) The above limits will operate so far as the borrowing of individual member are concerned, in addition to these limits a member can offer as surety in not more than
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two cases. iv) A member is entitled to borrow Long Term Loan above Rs.2,50,000/- shall be sanctioned to a member provided documents such as for Housing / Long Medical Sickness/Higher Education of Children/Daughter/ Son/Brother/Sister and himself Marriage and Purchase of Vehicle or House hold items. v) Maximum Monthly Installments Repayment of Loan shall be EMERGENCY LOAN - (25 Installments), LONG TERM & MEDIUM TERM LOAN upto 180 Installments. vi) There is no need to give surety for EMERGENCY LOAN. vii) As per Bye-laws No. F.1.8.Managing Committee reserves the rights to change Interest rates on Loan time to time and sanction the loan according to repaying capacity of loaner.

MEDIUM TERM LOAN

Members those who have already taken Long Term Loan fully & required some more loan can apply for the Medium Term Loan as per the eligibility mentioned in the table given below

Loan Amount revided by 01/01/2010

Rate of Int.-12.00% Repayment Period - 180 months ( w.e.f 01/01/10 )

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EMERGENCY LOAN If member needs urgent financial help, he can apply for Emergency Loan of Rs.18,000/- & the same can get in cash on the same day without surety.(subject to availability of Cash)

Rate of Int.- 10.50% Repayment Period - 25 months

PROGRESS REPORT Dividend Members Share Capital 2006-2007 15% 2,902 2007-2008 15% 2,995 2008-2009 15% 3,010 2009-2010 2010-2011 18% 15% 3,216 3,288

81,80,799.61 91,15,753.81 96,91,473.38

5,45,62,687 5,58,10,787

Methodology: The data is collected for the preparation of this project report includes both primary and secondary data. The primary data is that the secretary of the society, Directors of the society and the society staff is personally interviews to collect information about the credit facilities provided by the society to the study. Secondary data has been collected from the past annual report of the society and from the informative sites.

Benefits of study:
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1. We can get a clear idea about the credit facilities provided by the society. 2. The report is helpful in knowing about how the society functions and the other welfare facilities offered by the society to the employees. 3. The study given us to know t he performance and growth of the society. 4.By preparing this project report the study helps us in coming to our own conclusion about the society and to write our own suggestion for its improvement

Limitations of project report: There are some limitations in doing project report, they are as follows: 1. Some confidential information was not conveyed. 2. Because of centralisation as it is a public ltd co. practical practice was prohibited. 3. Accuracy of this project report is limited because of factors like limitation of time. SUGGESTIONS
1) The society should use more of computerized system to the maximum and

eliminate the book keeping system to the extend as possible.

2) The employees should aquire complete knowledge of the computerized system

in order to use the technology smoothly so to save the time and energy and to be techno savvy.

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3) The computerized system so used must be quiet efficient to serve the purpose and to have a strong back up system. 4) The employees should get much more disciplined and to give more priority to work than to time to time work. 5) Over employment must be avoided so as the cost dont go up and profit is retained and also to save the work space.

BIBLOGRAPHY Annual report of b.e.s.t employees co-operative credit society ltd Bye laws of b.e.s.t employees co-operative credit society ltd http://www.siemenscreditsociety.com www.scribed.com http://www.rbi.org.in/scripts/fun_urban.aspx

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