COMP.OF VMC & RAJ 1

7/30/2019 COMP.OF VMC & RAJ 1

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INTRODUCTION

Banking sector is playing most important role in development of Indian

economy. Indian bank can be broadly classified as commercial banks & co-

operative banks, commercial banks can be grouped into three categories.

Public sectors banks,

Regional rural banks,

Private sector banks.

These banks have over 67,000 branches spread wide across the country.

After initiation of financial sector reforms competition in the banking sector

has been increased.

The co-operative banks in India started functioning almost 100 years ago.

The co-operative banks is an important constituent of the Indian financialsystem, judging by the role assigned to co-operative, the expectations the

cooperative is supposed to fulfill, their number, and the number of offices

the co-operative bank operate. Though the co-operative movement

originated in the West but the importance of such banks have assumed in

India is rarely paralleled anywhere else in the world. The co-operative banks

in India play an important role even today in rural financing. The businesses

of co-operative bank in the urban areas also have increased phenomenally in

recent years due to the sharp increase in the number of primary co-operative

banks.

Co-operative banks in India are registered under the Co-operative Societies

Act. The co-operative bank is also regulated by the RBI. They are governed

by the Banking Regulation Act 1949 and Banking Laws (Co-operative

Societies) Act, 1965.

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Co-operative is nothing but a group of people, who have gathered with the

same objectives, voluntarily, and by internal agreement work for the welfare

of one another.

Mr.H.Calvert:-

Co-operation is such an organization of individuals

joining hands voluntarily on the basis of equality for the betterment of

general economics interest.

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GENERAL INFORMATION OF SAMPLED UNIT

Name of the unit - The Veraval Mercantile Co-operative Bank Ltd,

Year of establishment - 02/03/1972

Address - The Veraval Mercantile Co-operative Bank Ltd,

University road,

Kalakruti complex,

Behind gondhiya hospital,

Rajkot 360007.

Registered office - The Veraval Mercantile Co-operative Bank Ltd,

Suvidha,Second floor,

Subhash road,

Veraval 362265.

Phone no - (0281)2589235

9879107966

Registered office no - (02876)220209

9879107962

Form of organization - Co-operative

Working Days - 6 days

Time keeping system - 10:00 to 19:00

Branches - Veraval (Regd)

Veraval (Rayon)

UnaJunagadh

Rajkot

Keshod

Manavadar

Sutrapada

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Salaries - Manager - 15000 to 20000

Officer - 10000 to 15000

Clerk - 8000 to 10000

Cashier - 8000 to 10000

Peon - 4000 to 6000

Audit class - A

RBI license no - GJ 670 P.

Email - [email protected].

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mailto:[email protected]:[email protected]


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GENERAL INFORMATION OF SAMPLED UNIT

Name of the unit - The Co-operative Bank of Rajkot Ltd.

Year of establishment - 24/11/1980

Address - Sahakar Sarita

Panchnath Road,

Rajkot 360001

Phone no - (0281) 2224120

2234454

Form of organization - Co-operative

Working Days - 6 days

Time keeping system - 10:00 to 19:00

Branches - Rajkot

Jasdan

Morbi

JetpurUpleta

Gondal

Junagadh

Audit class - A

RBI license no - ACD.GJ.219.P

Email - [email protected]

Website - www.rajbank.net

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mailto:[email protected]://www.rajbank.net/mailto:[email protected]://www.rajbank.net/


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INTRODUCTION

The banking sectors are necessary for the general public. Each & every

financial activities done through banking organization, without banking

facility so many difficulties can arise.

The Indian banking industry is passing through a phase customers market.

The customers have more choices in choosing the bank. A competition hasbeen established with in the banks operation in India.

Bank is provides many services with the help of stiff competition and

advancement of technology, so that services becomes more easy&

convenient.

Bank provides many facilities like loan against share, education loan,

personnel loan, home loan, etc. then banking sector plays role in the

development of India.

The VMC bank has also provided to services their potential customers like

home loan, personnel loan, vehicle loan, business & profession loan, locker

facility etc.

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HISTORY & DEVELOPMENT

The veraval mercantile bank established in veraval since 1972for the main

purpose of leading business & trade.

At the initial stage the VMC bank start with 307 members & Rs 1,26,500

share capital. At that time the banks deposits Rs 7,39,492,92.

Since, 11-5-1984 the VMC bank has been constructed the new building

namely SUVIDHA for the purpose of banking activity. The VMC bank

has creates 1st new branch in UNA. The VMC bank has a create 2nd branch in

rayon in veraval since 27-09-1984 and also provide to the entire customer

self deposit. The VMC bank has also established 3rd branch in sutrapada

since14-12-1988 for main agricultural & business.

Since 23-1-1995, the VMC bank established 4 th branch in JUNAGADH in

the present of Shree Rajubhai Adani. The VMC bank take the best

decision for the changing new computerized system with the help of

technology of computer the accuracy of bank is increased. And save the time

and speedy & quick transaction are made. After the some definite period of

time other two branches Rayon & Regd. Office is installed the computerized

technology.

Reserve bank of India has give to permission to VMC bank for established 4

new branches like keshod, porbandar, manavadar & Rajkot. RBI give permit

to first Rajkot. Rajkot branches established in 15-8-1996 with computerized

system & centralized air condition.

After completion of establishment of rajkot branch. The VMC bank has

takes quick decision for the establishment of 6th branch in keshod on 30-08-

1996. and 7th branch in manavadar on 04-09-1996.

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FUTURE PLAN

1) The VMC bank wants to start new branches in different area or

different district also.

2) VMC bank may also provide ATM facility

3) VMC bank also wants to maintain the growth and wants to expand the

growth.

4) VMC bank may provide various types of bank loan

Student computer loan

NRI loan

Education loan

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OBJECTIVES

Achieve net profit about 46,00,000

Bring customer satisfaction 100%

Reduce the customer complains

Educated customers to bring banking awareness

Train staff to become more effective

Update present software

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RESEARCH METHODOLOGY

INTRODUCTION

After the preparation of financial statements that is trading account, p & l

account, balance sheet. The ratio analyses will give the relationship between

two related items of financial statement. It expresses in a proportion between

two figures and measure the financial strength of the company. The ratioanalyses does not only calculate ratios but also give result & interpreted the

result.

A ratio is customarily expressed in three different ways. It may be expressed

as a proportion between two figures. For example, If the current assets are

twice the current liabilities. It can be said that the current ratio 2:1. the

second method is to expressed it in the form of percentage. For example, the

ratio of return on capital employed is 30%. The third method is to expressed

it as ratio, for example_ stock turnover is 6 or stock turnover 6times a year.

The use of ratios has become increasing popular during last few year only.

Originally the bankers used the current ratio of judge the capacity of the

borrowing business enterprise to repay the loan and make regular interest

payment. A banker or other creditors will measure the repaying capacity &

financial strength on the basis of accounting ratio.

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SAMPLING

The aggregate of units drawn from the lot by some scientific method for

setting information regarding the characteristic. Under study is called sample

and the method of selecting a sample is called sampling.

The total lot of the unit is known as our census and selected few unit from

total lots is known as sample.

Researcher has to select the co-operative banking census and researcher hasto select 2 co-operative bank out of several banks in Saurashtra region the

selected bank namely,

1) Veraval Mercantile Co-operative Bank.

2) Raj Co-operative Bank Ltd.

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DATA COLLECTION

Data collection is nothing but the collection of information, regarding,

tabulation, & analysis of particular data is known as data collection.

Generally the data collections are main two sources at

A. Primary source/data

B. Secondary source/data

In primary data collection, the data is collected from the general public to

have taken some Exams, Interview, Test, Survey, Questionnaires,

Telephonic contact etc. the of primary data are most important but in the

collection of primary , the lots of time are consuming & cost is also high

In secondary data collection that all the data related to the selected unit are

recovered by the published data or readymade data by the organization, in

secondary data collection the data are already published by the organization

and it is easy to collect the various data for the purpose analysis and less

time consuming & not costs are incurred.

Researcher has to collect all the financial data of the bank by secondary

method, Researcher has to collect the last 3 years data from the bank for the

purpose of calculation of ratio and other financial position of the selected

unit.

Researcher has to collect the financial information of the last three years by

annual report and profit & loss account of the bank.

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LIMITATION OF STUDY

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RESEARCH TECHNIQUE

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OBJECTIVE OF STUDY

To check the profitability of both the sampled unit.

To check the solvency of both the sampled unit.

To check the liquidity of both the sampled unit.

To check the efficiency of the sampled unit.

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HYPOTHESIS

There is no significant difference in profitability during the last 3

years in sampled unit.

There is no significant difference in solvency during the last 3 years in

sampled unit.

There is no significant difference in liquidity during the last 3 years in

sampled unit.

There is no significant difference in efficiency during the last 3 years

in sampled unit.

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ANALYSIS OF DATA

H0: There is no significant difference in profitability during the last 3

years in sampled unit.

GRASS PROFIT RATIO

GROSS PROFIT RATIO = GROSS PROFIT X 100

INCOME

PARTICULAR RAJ BANK VMC BANK

2005-06 24.91% 5.91%

2006-07 26.72% 9.43%

2007-08 31.73% 11.80%

0 . 0 0 %

5 . 0 0 %

1 0 . 0 0 %

1 5 . 0 0 %

2 0 . 0 0 %

2 5 . 0 0 %

3 0 . 0 0 %

3 5 . 0 0 %

(%)

2 0 0 5-0 6 2 00 6 -0 7 2 0 07 -0 8

YEA

GROSS PROF IT RAT

R AJ

VMC

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ANALYSIS

It is express the relationship between gross profits earned to net income. It is

a useful indication of the profitability of business, if the ratio is low than cost

is high where as the ratio is high the cost is less.

Above ratio and graphical presentation indicates the gross profit of RAJ

Bank and VMC Bank is continuous increases.

In 2005-06 gross profit of RAJ Bank is 24.91% and n 2006-07 the ratio is

slightly increase up to 26.72%, and the last year 2007-08 the ratio is increase

up to 31.73%.

In same the gross profit ratio of VMC Bank in 2005-06 5.91%, 2006-07

9.43% and the last year 2007-08 11.80%.

H0: HYPOTHESIS IS REJECTED

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H0: there is no significant difference in profitability during the last 3 years

in sampled unit.

NET PROFIT RATIO

NET PROFIT RATIO = NET PROFIT X 100

INCOME


2005-06 8.56% 4.10%

2006-07 8.14% 3.94%

2007-08 13.72% 4.48%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

(%)

2 0 05 -0 6 2 0 0 6-0 7 2 0 07 -0 8

YEAR

NET PROFIT RATI

R AJ

VMC

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ANALYSIS

The ratio is valuable for purpose of ascertaining the overall profitability of

business and shows the efficiency.

Increase the ratio better will be the profitability and decrease the ratio pure

will be the profitability,

In above graph indicates that the profitability of both the bank arefluctuating, in 2005-06 both bank earn good profit and, in 2006-07 profit is

slightly decrease & last year 2007-08 profit is again increase.


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in sampled unit.

RETURN ON CAPITAL EMPLOYED

RETURN ON CAPITAL EMPLOYE = NET PROFIT (EBIT) X 100

CAPITAL EMPLOYED


2005-06 14.47% 4.40%

2006-07 14.32% 7.55%

2007-08 18.36% 10.28%

0 . 0 0 %

5 . 0 0 %

1 0 . 0 0 %

1 5 . 0 0 %

2 0 . 0 0 %

(%)

2 0 0 5-0 6 2 00 6 -0 7 2 0 07 -0 8

YEA

RETURN O N CAPITAL EM PLOY

R AJ

VMC

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ANALYSIS

It is an index of profitability of business and it is obtained by comparing of

net profit with capital employed. This ratio is helpful to take a decision.

In above graph indicates the RAJ Bank is fluctuating ratio where as VMC

Bank is continues increases at increasing rate to every year.


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in sampled unit.

RETURN ON SHARE HOLDERS FUND

RETURN ON SHARE HOLDERS FUND = NET PROFIT X 100

SHARE HOLDERS FUND


2005-06 4.97% 2.40%

2006-07 4.36% 2.49%

2007-08 7.94% 3.00%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

8.00%

(%)

2005-06 2006-07 2007-08

YEAR

RETURN ON SHARE HOLDERS FUND

RAJ

VMC

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ANALYSIS

In order to judge the efficiency with which the proprietors funds are

employed in business.

In above graphical presentation indicates that the ratio of share holders funds

the RAJ Bank is fluctuate in nature where as VMC Bank has continuous

increasing n every year, in 2005-06 the RAJ Bank 4.97% and next year

2006-07 are decrease up to 4.36% but last year 2007-08 ratio is increase up

to 7.94%, the difference between last two years is 3.58%.

Another side the VMC Bank the ratio of share holders funds are increase at

a decreasing rate


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in sampled unit.

RETURN ON EQUITY SHARE HOLDERS FUND

RETURN ON EQUITY = NET PROFIT X 100

SHARE HOLDERS FUND EQUITY SHARE CAPITAL


2005-06 54.03% 15.02%

2006-07 33.25% 14.52%

2007-08 53.60% 17.94%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

(%)

2005-06 2006-07 2007-08

YEAR

RETURN ON EQUITY SHARE HOLDERS FUND

RAJ

VMC

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ANALYSIS

It shows what percentage of profit is earned on the capital invested by

ordinary share holders.

In above graph and ratio indicates the equity share holders fund ratio of both

the bank at the year 2005-06 is increase then next year 206-07 the ratio of

both bank again decrease and last year 2007-08 ratio of both the banks are

increase.


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in sampled unit.

EARNING PER SHARE

EARNING PER SHARE = NET PROFIT

NO OF EQUITY SHARE


2005-06 19.05 15.02

2006-07 17.62 14.52

2007-08 17.94

0

2

4

6

8

10

12

14

16

18

20

RS.

2005-06 2006-07 2007-08

YEAR

EARNING PER SHARE

RAJ

VMC

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ANALYSIS

It is shows the relationship between profit and share equity, if the earning

per share is increases the more beneficial to the company as well as share

holders, where as the earning per share is lower than may be negative effect

in the mind of share holders.

In above graph indicates the both the banks earning per share are fluctuates,

the highest EPS of RAJ Bank is 19.05 per share, when the VMC Bank 17.94

is the highest EPS during the last 3 years.


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H0: There is no significant difference in solvency during the last 3 years in

sampled unit.

PROPRIETORS RATIO

PROPRIETORS RATIO = PROPRIETORS FUNDS X 100

TOTAL ASSETS


2005-06 14.25% 9.99%

2006-07 15.79% 9.80%

2007-08 15.63% 9.46%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

(%)

2005-06 2006-07 2007-08

YEAR

PROPRIETOR RATIO

RAJ

VMC

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ANALYSIS

This ratio shows the proportion of proprietors funds to the total assets

employed in the business, the proprietors funds on share holders equity

consist of share capital and reserves & surplus.

The higher the ratio, the stronger the financial position of the bank and lower

the ratio, pure the financial position of the bank.

Above ratios and graphical presentation indicates the proprietors ratio of

RAJ Bank is continue fluctuate, In 2005-06 proprietors ratio is 14.25% after

one year in 2006-07 the ratio increases 15.79% and last year the ratio are

slightly decrease at 15.63%.

As the same proprietors ratio of VMC Bank are continuously decreases by

year to year. In 2005-06 the ratio 9.99% after one year in 2006-07 9.80% and

last year 2007-08 the ratio is 9.46%, so the VMC Bank is used mostly out

side fund.


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H0: There is no significant difference in liquidity during the last 3 years in

sampled unit.

CURRENT ASSETS RATIO

CURRENT ASSETS RATIO = CURRENT ASSETS

CURRENT LIABILITY


2005-06 89.69 : 1 10.39 : 1

2006-07 43.80 : 1 9.54 : 1

2007-08 48.11 : 1 10.48 : 1

010

20

30

40

50

60

70

80

90

2005-06 2006-07 2007-08

YEAR

CURRENT ASSETS

RAJ

VMC

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ANALYSIS

This reflects proportion of current assets to current liabilities. It is also

known as working capital ratio.

In 2005-06 RAJ Bank current assets 89.69 times more, in 2006-07 the ratio

is decrease at 43.80 and last year 2007-08 the ratio is increase as decreasing

rate there is a 48.11.

In 2005-06 VMC Bank current assets ratio 10.39 times more than liabilities

and 2006-07 the ratio is decrease up to 9.54 and last year 2007-08 the current

assets ratio is increases up to 10.48

Above ratio and graph indicates the current assets ratio of RAJ Bank and

VMC Bank are fluctuate continuously, so try to maintain their ratio and

increase the ratio so, finally working capital is increased.


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H0: There is no significant difference in turnover during the last 3 years in

sampled unit.

FIXED ASSETS TURNOVER RATIO

FIXED ASSETS TURNOVER RATIO = FIXED ASSETS

INCOME


2005-06 2.69 2.71

2006-07 1.54 3.38

2007-08 1.96 3.72

0

0.5

1

1.5

2

2.5

3

3.5

4

2005-06 2006-07 2007-08

YEAR

FIXED ASSETS TURN OVER

RAJ

VMC

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ANALYSIS

To ascertain the efficiency and profitability of the business, the total fixed

assets are comparing to sales.

If the ratio is low, it indicates that investment in fixed assets is more where

as if the ratio is found higher, it means the fixed assets are being used

effectively to earn profit.

In above graph the ratio indicates the RAJ Bank is fluctuating and VMC

Bank is increasing by every year.


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H0: There is no significant difference in liquidity during the last 3 years in

sampled unit.

TOTAL ASSETS TURNOVER RATIO

TOTAL ASSETS TURNOVER RATIO = TOTAL ASSETS

INCOME


2005-06 0.083 0.0702006-07 0.085 0.080

2007-08 0.090 0.082

0

0.02

0.04

0.06

0.08

0.1

200 5-06 20 06-07 2 007 -0 8

YEAR

TOTAL ASSETS TURN OVE

R AJ

VMC

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ANALYSIS

The amounts invested in business are invested in all assets jointly and sales

are affected through them to earn profit.

If higher the ratio, it shows that with les amount of investment in total assets,

where as the lower the ratio, then more amount of investment in total assets.

Above graphical presentation indicates that the flow of both the banks are

increase continuously, total assets ratio RAJ Bank increase at a decreasing

rates, where as VMC Bank increase the ratio at increasing rate.


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in sampled unit.

EXPENSE RATIO

EXPENSE RATIO = EXPENSE X 100

INCOME


2005-06 75.09% 94.09%

2006-07 73.28% 90.56%

2007-08 68.27% 88.20%

0.00%

20.00%

40.00%

60.00%

80.00%

100.00%

(%)

2 00 5-0 6 2 00 6-0 7 2 00 7-0 8

YEA

EXPENSE RAT

RAJ

VMC

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ANALYSIS

Expense ratio is computed for the purpose of ascertaining relationship

between operating and net income.

Above graph indicates the expense ratio of both the banks are decrease, in

2005-06 the RAJ Bank ratio is 75.09%, in 2006-07 73.28% and last year

2007-08 68.27%, the difference between 2005-06 & 2007-08 is 6.82%

decrease.

As the same expense ratio of VMC Bank in 2005-06 is 94.09%, in 2006-07

90.56%, and the last year 88.20%, so the difference between 2005-06 &2007-08 is 5.89% decrease.


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SUGGESTION

RAJ Bank should maintain or increase their net profit.

RAJ Bank should try to increase the long term funds against their

fixed assets.

VMC Bank should increase the proprietors fund (owned) and

decrease outside funds.

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CONCLUSION

I am very thankful to VMC bank for giving me required information during

my visit for study purpose. I visit your organization. I had found that all the

staff members and worker are working in co-ordinate manner. The co-

operation of members and customers as well as continuous efforts of the

staff. VMC bank has been able to reach the new heights of the success

I am very thankful to the manager and also thankful to MS Monika, who has

given me the lots of information regarding the overall organization.

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BIBLIOGRAPHY

My project work is done with the help of following books and annual

reports.

BOOKS

BUSINESS ENVIRONMENT CHERUNILEM

ACCOUNTING MANAGEMENT B.S.SHAH

FORMS OF BUSINESS ORGANISATION MAHAJAN

PUBLICATION

REPORT

ANNUAL REPORT (2005-06)

(2006-07)

(2007-08)

WEB SITE www.rajbank.net

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COMP.OF VMC & RAJ 1

Documents

Transcript of COMP.OF VMC & RAJ 1