Effectiveness of core banking @ corporation bank project report

To Determine the Effectiveness of Core Banking On Cash Flow

EXECUTIVE SUMMARY

The Indian economic is growing. There are various factors contributing for the

development of economy. One of the industries which have revolutnalise the economy is

banking. Change in the IT & faster growth has changed the banking operations to a great

extent. Banking operations have led to a great development of economy & meeting

customer’s needs. Among various sectors that bank is involved, Core Banking is one area that

has changed gradually in meeting dynamic needs of customers.

COMPANY PROFILE:

Corporation bank was founded in the year 1906 in Udupi by the founder Mr. khan abdul.

Its headquarter is at Mangalore, the chairman of the organization is Mr.sambmurthy as a

key person to the organization. This industry holds banking services and having different

banking products its present revenue is 110722 crores and net income for the present year

is 2143.09 crores respectively.

TITLE OF THE PROJECT

“To Determine the Effectiveness of Core Banking On Cash Flow” of corporation bank at

RNR BRANCH.

BACKGROUND OF PROJECT TOPIC

Since corporation bank at RNR BRANCH has introduced the concept of core banking

recently. The Management, in this survey wants to find out the growth percentage of cash

flow by introduction of core banking solutions & also to know the impact of core banking

on employees & customers of corporation Bank.

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NEED FOR THE STUDY

Since the research is to determine the effectiveness of core banking solutions

On cash flow statements of corporation bank at RNR BRANCH. Therefore the need for the

study is limited to corporation bank at RNR BRANCH.

OBJECTIVES OF THE STUDY

The main objective of the study is to determine the effectiveness of core banking on

cash flow.

To know the impact of core banking on employees & customers of corporation Bank.

To analyze the core banking Activities

LIMITATIONS

1) A sample of 100 customers & 10 employees of the bank were chosen for the purpose of

study.

2) The study was restricted to 4 months.

3) There were some difficulties when asked for personal details like cell numbers were

asked.

METHODOLOGY

Data Collection Method

To fulfill the objectives of my study, I have taken both into considerations viz primary

& secondary data.

Primary Data:

Primary data was collected through making survey, which is systematic collecting of

information directly from the respondents i.e. through Questionnaires.

Secondary Data:

Secondary data was collected through Organizational records.

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FINDINGS

Employees of the bank should be given proper training with respect to core

banking.

Customers should be educated with respect to all the benefits available with

the core banking.

The concept of core banking should be speeded up so that it saves the time of

employees & customers.

SUGGESTIONS

The project analysis has helped in knowing the satisfaction level of the Employees based on

the analysis it was found that majority of the employees are satisfied, the satisfaction level

could further be increased if the employees are given proper training with respect to core

banking.

CONCLUSION

The study was conducted to understand the effectiveness of core banking cash flow of

corporation bank RNR BRANCH. To serve the state objective of the survey, the response has

been collected from 10 employees & 100 customers of the bank & also an analysis was being

made on cash flow statement of corporation bank for a period of 2 years, which helped in

knowing the growth percentage on cash flow after the introduction of core banking, from the

analysis it was found that there has been an 43% increase on cash flow as compared to

previous years.

RECOMMENDATIONS

All the details with respect to core banking should be displayed at the Counter hall so that the

customers come to know the procedure instead of wasting their time.

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INTRODUCTION TO THE TOPIC:

The title of the project report is “To Determine the Effectiveness of Core Banking On

Cash Flow” of corporation bank at RNR BRANCH. Core Banking is normally defined as the

business conducted by a banking institution with its retail and small business customers.

Many banks treat the retail customers as their core banking customers, and have a separate

line of business to manage small businesses. Larger businesses are managed via the

Corporate Banking division of the institution. Core banking basically is depositing and

lending of money. Normal core banking functions will include deposit accounts, loans,

mortgages and payments. Banks make these services available across multiple channels like

ATMs, Internet banking, and branches. Core Banking Solutions is new jargon frequently

used in banking circles of India. The advancement in technology especially internet and

information technology has lead to new way of doing business in banking. The technologies

have cut down time, working simultaneously on different issues and increased efficiency. The

platform where communication technology and information technology are merged to suit

core needs of banking is known as Core Banking Solutions. Here computer software is

developed to perform core operations of banking like recording of transactions, passbook

maintenance, and interest calculations on loans and deposits, customer records, balance of

payments and withdrawal are done. This software is installed at different branches of bank

and then interconnected by means of communication lines like telephones, satellite, internet

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etc. It allows the user (customers) to operate accounts from any branch if it has installed core

banking solutions. This new platform has changed the way banks are working. Now many

advanced features like regulatory requirements and other specialized services like share

(stock) trading are being provided.As the concept is new its necessary to know the

effectiveness of core banking solutions. As a project handler, we are interested to understand

how the concept works. Core banking is said to be effective, if it is feasible from the view

point of customers and bankers as well. Today in the present scenario, every banking concern

follows the system concepts for its smoothing operation but at the same time the quality of

system operations is equally important. It should be helpful and fit from both the angles. To

measure the effectiveness of core banking solutions the questionnaire was drawn which

contains some question to solicit the information. Everything has been taken into account so

as to conclude with the final results.

NEED FOR THE STUDY

Since the research is to determine the effectiveness of core banking solutions on cash flow

statements of corporation bank at RNR BRANCH. Therefore the need for the study is limited

to corporation bank at RNR BRANCH.




recently. The Management, in this survey wants to find out the growth percentage of

cash flow by introduction of core banking solutions & also to know the impact of core

banking on employees & customers of corporation Bank.

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ORGANIZATION PROFILE

CORPORATION BANK

Type Public (BSE, NSE:CORPBANK)

Founded Udipi, 1906

Headquarters

Corporation Bank,CORPORATE OFFICE ,Mangaladevi Temple RoadPandeshwarMangalore 575 001 India

Key people Chairman B. Sambamurthy

Industry Banking

Products Loans, Credit Cards, Savings, Investment vehicles, etc.

Revenue Rs 1107.22crore (2008-09)

Net income Rs 2,143.09 crore (2008-09)

Website http://www.corpbank.com/

:

BRIEF HISTORY

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http://en.wikipedia.org/wiki/Image:Green_Arrow_Up_Darker.svg

http://en.wikipedia.org/wiki/Image:Green_Arrow_Up_Darker.svg


Established in the year 1906, Corporation Bank is an organization based on the traditional

Indian values of service to the community. Corp Bank is regarded as one of the well-run

banks in the comity of Public Sector Banks in the country. The Bank has a unique history of

100 years of successful Banking and has stood the test of time by growing steadily, offering

vast, varied and versatile services with a personal touch. Today, its good customer service,

pre-eminent track record in House Keeping, adherence to Prudential Accounting norms,

consistent profitability and adoption of modern technology for betterment of customer service

have earned the Bank a place of pride in the Banking Community. The Bank has been richly

endowed with a relatively young, dynamic and efficient manpower, which is the key factor of

the Bank’s success. Excellence in performance and uniqueness in customer service form the

central core of the Bank’s organizational culture. The growing confidence of its clientele is

well reflected in the Bank’s performance in all critical areas of its Operations all through the

year.

The Bank is a Public Sector Unit with 57.17% of Share Capital held by the Government of

India. The Bank came out with its Initial Public Offer (IPO) in October 1997. The Bank’s

Net Worth stood at Rs. 3,374.89 core as on 31.03.2008.

Corporation Bank (Profile)

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Metro 251 Branches.

Personal Banking Branch 28.

Urban & Port Town Branches 230.

CAPS Branches 10.

Industrial Finance Branch 6.

Semi-Urban 181 Branches.

SSI Branches 4.

Rural Branches 173 .

Asset Recovery Branches 5.

Housing Finance Branches 4.

Overseas Branches 2.

Commercial Banking 2.

NRI Branches 1.

Service Branches 11.

Commercial & Personal Banking 66.

Foreign Exchange Service Br. 1.

Fast Collection Service 5*.

BRANCH NETWORK

During the financial year 2005-06, 58 branches were opened, thereby taking the number of

branches to 835 as on 31.03.2008, spread over 23 states and 2 union territories. Out of the

above, the numbers of specialized branches are 145.The number of Extension Counters as on

31.03.2008 stood at 53.

Business growth and branch network expansion Necessitated fresh recruitment to the

extent of 966 employees during the year. The total staff strength stood at 12465 on 31 st

March, 2009 compared to 12011 in the previous year. 21.2 The staff productivity in the

Bank increased from Rs.839.19 lakhs as on 31.03.2008 to Rs.1048.86 lakhs as on

31.03.2009, recording a growth of 24.98%. Net Port per employee increased from

Rs.4.79 lakhs to Rs.7.64 lakhs during the year.

The Bank has been following the guidelines for reservation in employment to speci.ed

categories. During the year, 82 employees belonging to Scheduled Caste/Scheduled

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Tribe category were promoted to the next higher cadre. The representation of Scheduled

Caste/Scheduled Tribe employees in the total staff strength was 3166 as on 31.03.2009,

constituting 25.40% of the total employees.

The Bank also has a fair representation of other reserved categories. As on 31st

March, 2009, 1401 Other Backward Communities, 219 Physically Handicapped and

629 Ex-servicemen were on the rolls of the Bank.

ADVERTISING AND PUBLICITY

The Bank continued to communicate messages on products, services, interest rates and the

performance of the Bank to the customers, shareholders and the general public through mass

media. In order to bring more customers into its fold, the Bank launched various promotional

campaigns during the year.

During the year, concerted efforts were made for brand building and the Bank continued to

communicate messages on its products, services, interest rates and the performance to the

customers, shareholders and the general public through advertisements and outdoor publicity

units.

MARKETING INSURANCE PRODUCTS

Under life insurance, the Bank has mobilized first premium business aggregating to Rs.51.04

Core as against the target of Rs. 40.84 Crore in the previous year. Bank could mobilize

premium under General Insurance aggregating Rs.14.01 Crore. Under Mutual Fund Business,

the bank has mobilized a fund business of Rs. 55 Crore as against the target of Rs. 40 Crore

fixed for just concluded fiscal. As at the end of March, 2008 total number of accounts

outstanding under Corp Jeevan Raksha Scheme and Corp Jeevan Griha Raksha Scheme have

reached a level of 36000 and 3300.

CUSTOMER SERVICE AND TECHNOLOGY

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Clientele acquisition is thrust area for marketing network put in place in the Bank.

Pay Roll Savings Bank accounts with attractive features are offered for this purpose.

Similarly, campaigns are held for acquisition of new customers under Current,

Savings and Retail Term Deposits. Bank has added more than 3.30 lakhs new

customers during the financial year taking the overall clientele base to over 63 lakhs.

The Bank has introduced various innovative techno savvy products/services and

revised various existing schemes during the year to suit the convenience of the

customers by focusing on the ever-increasing customer needs.

New Products/Services introduced and existing schemes revised during the year

include:

Corp Pragathi Savings Bank a/c: No Frills Savings Bank account aimed at the

low income segment to achieve the Financial Inclusion goal of the Central

Government.

Acquiring of MasterCard: The Bank has tied up with MasterCard International

wherein MasterCard Debit / Credit card holders can access their accounts through

our ATMs.

ATMs:

With the accelerated thrust for ATM network, in tune with the changes and customer

preferences, the Bank has operationalised and networked 100 additional ATMs during the

year 2005-06 taking the total number of ATMs to 901 across the country.

Automated Teller Machines

The Bank has operationalised and networked 75 additional ATMs, taking the total number of

ATMs to 1032, across the country. Firewall has been installed at the Bank’s FTS Centre,

Bangalore. The Bank’s Switch has been upgraded to Triple DES. Direct Tax payment

through ATMs successfully tested, pending for launching. Real Time VISA Money transfer –

instantaneous credit to the customer, is in the pipeline for implementation. Varied by Visa

(VbV) – with a view to ensure better security for card not present transactions for e-

commerce transactions will be made live shortly.

Bio-Metric ATMs

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The Bank has installed 7 Bio-metric ATMs to cater to the requirements of rural clientele on

pilot basis. After seeing the performance of these ATMs, the Bank proposed to examine the

feasibility of expanding the network of such ATMs at other Rural/Semi Urban areas so as to

facilitate the rural populace to have access to products and services that are on par with the

metro locations.

Social Concern As in the previous years, during 2005-06 too the Bank took several steps to fulfill its

social commitment. The Bank donated Rs.1.00 crore to the Maharashtra Chief

Minister’s Relief Fund (Natural Calamities) to provide relief to the people affected by

the flood in Mumbai during August, 2005. An amount of Rs.100 lakhs was donated to

the Karnataka Chief Minister’s Drought and Natural Calamities Relief Fund for relief

and rehabilitation of the victims of the flood in Karnataka. Further, an amount of

Rs.100 lakhs was donated to Indraprastha Cancer Society and Research Centre, New

Delhi towards spreading awareness amongst the people about the fatal ailment.

As a centenary celebration project the Bank dedicated a modern library and

numismatic museum to the citizens of Mangalore at a cost of Rs.2.31 crore.

The Bank also set up libraries in 25 villages in the states of Karnataka, Tamilnadu and

Andhra Pradesh, where Banking services are offered only by our Bank.

Apart from the above, the Bank also actively associated itself with various societal

concerns in accordance with its donation policy.

Corporation Bank Self-Employment Training Institute

[COBSETI]

The Corporation Bank Self-Employment Training Institute [COBSETI] established on

22.03.1996 is a training institute sponsored by the Bank. The institute takes care of the

vocational training needs of Chikmagalur and Kodagu districts wherein the Bank has Lead

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Bank responsibility. During the training period, boarding and lodging is provided free to the

candidates. As at March 2008, the Institute imparted training to 5651 candidates, out of

which 3354 persons have taken up self-employment ventures. The Institute is making all out

efforts to motivate the trained persons in establishing self-employment ventures by co-

coordinating with development departments in providing necessary linkages. During the year,

the institute moved into its own building with all the basic amenities for the trainees.

Including the grant of Rs 20.00 Lakhs received from the Government of Karnataka, the bank

has incurred an expenditure of about Rs.77.44 Lakhs in the construction of a new building

and in providing the required infrastructure and Computers to the Institute.

PERFORMANCE OF SUBSIDIARIES AND OTHER UNITS SPONSORED BY THE

BANK

Corp Bank Homes Ltd

Corp Bank Homes Limited, the wholly owned housing finance subsidiary of the Bank, has

earned an operating profit (Profit before Tax) of Rs.1.09 crore for the year 2005 – 2008 as

against Rs.5.96 crore for the previous year. As against the cumulative provisioning of Rs.4.45

crore during 2004-2005, at the end of the current year, the

Provisioning has doubled to Rs.8.90 crore. The Net Profit after Tax for the year ended March

31, 2008 was Rs.1.29 crore as against Rs.4.97 crore for the previous year. The Loan

disbursement by the Company aggregated to Rs.17.83 crore during the year and the

outstanding advances stood at Rs.270.83 crore as at March 31, 2008. The net worth of the

Company increased to Rs.33.19 crore as against Rs.31.90 crore in the previous year.

MERGER OF CORP BANK HOMES LIMITED

The Board of Directors of the Bank has taken a decision to merge its subsidiary, Corp Bank

Homes Limited, with the Bank, after meeting statutory and all other requirements. The

merger petition has already been filed with the Honorable High Court of Karnataka at

Bangalore.

CORP BANK SECURITIES LIMITED

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The wholly owned subsidiary of the Bank, Corp Bank Securities Limited, a primary dealer in

Govt. Securities posted loss of Rs 1.96 crore, during the fiscal, as against Rs. 68.68 Crore

during the previous year as a result of continued rise in bond yields, tightness in liquidity and

increased demand for credit in preference to debt instruments. The 10 year yield, which was

6.69% as at the end of March 05 rose to 7.52% as at the end of current fiscal. As Primary

Dealer, the Company had to take involuntary position in each primary market auction and to

provide room for fresh securities, by paring the portfolio even in under favorable market

conditions. The loss is brought down from Rs. 68.68 Crore to Rs. 1.96 Crore. The outright

and repo turnover for 2005-06 was Rs 54,478 crore. Consequent to the operating loss, the Net

Owned Funds marginally came down from Rs 133.42 crore to Rs 131.49 crore, while the

Capital Adequacy Ratio position was comfortable at 553%, on account of lower risk

weighted assets held as against the Net Owned Funds as on 31.3.2008.

Corp Bank Securities Limited The wholly owned subsidiary of the Bank, Corp Bank

Securities Limited, (CBSL) earned total income of Rs.8.64 crore during 2008-09, posted

Profit before tax of Rs.8.29 crore and Profit after tax of Rs.6.67 crore. During the .scald, the

company paid an interim dividend of Rs.5 crore and also bought back 25% its Equity Share

of Rs.25 crore face value at a consideration of Rs.35.63 crore i.e. at a premium of Rs.10.63

crore. The Paid-up Share Capital, post buy back and as on 31.3.09 was Rs.75 crore and

consequently the Net Owned Funds came down to Rs.107.83 crore as against Rs.142.85 crore

as the end of previous year. The Company, apart from its existing business of distribution of

Mutual Fund products, started dealing in Certificate of Deposits, Dated Govt. Securities and

Treasury Bills and earned net business income of Rs.0.97 crore for the year. Besides, the

Company could earn interest & dividend income of Rs.5.90 crore on its investment of surplus

funds. The Company would continue to pursue various other business activities in the .scald

2009-10 after securing approvals from its Board and other regulatory authorities.

Chikmagalur-Kodagu Grameena Bank [CHIKO Bank] the Chikmagalur-Kodagu Grameena

Bank [CHIKO Bank], sponsored by the Bank has a network of 52 branches, of which

5 branches were opened during the year. Deposits of CHIKO Bank stood at Rs.246.47 crore

and advances at Rs.172.90 crore [gross] as on 31.03.2009. CHIKOBank recorded a net profit

of Rs.4.02 crore [before taxation] and Rs.2.52 crore [after taxation] for the year ended

31.03.2009.

CORPORATE GOVERNANCE IN CORPORATION BANK

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Corporation Bank has been practicing the principles of good corporate governance

consistently over the years. Corporate Governance at Corp Bank is evolved not only by

ensuring compliance with regulatory requirements but also by being responsive to customer

needs. The Bank strives for excellence with the objectives of enhancing satisfaction both to

its customers and shareholders.

COMPLETES A 100YRS OF BANKING

Corporation Bank has completed 100 years of existence on 12 March 2008. The Centenary

celebrations were launched by Shri V. Leeladhar, Deputy Governor, Reserve Bank of India

with the Bank's Foundation Day lecture on 12 March 2005. As a part of the Bank's centenary

celebrations, a number of programmes and projects were planned and executed. As a first

step, the Bank has launched the Corp Kissan Card - debit card tied up with VISA

international,, to enable the farmers make timely purchases for agricultural operations. at

Yeshwantpur-Malur in Kolar District on 13 March 2005. A modern public library was

dedicated to the citizens of Mangalore in DK District, the birth place of the Bank by Shri P.

Chidambaram, Union Finance Minister on 2 March 2008. The library building also houses a

Numismatic Museum and a multi purpose hall for intellectual activities. The Bank has also

set up libraries in 25 villages and given away scholarship to 100 meritorious students of such

villages for the pursuit of their higher education. Such libraries will be set up in 75 more

villages in a phased manner.

RATINGS

CRISIL has re-affirmed the following programmes of Corporation Bank:

Rs.2 billion Bond issue AAA.

Certificate of Deposits Programme P1+.

Fixed Deposit Programme FAAA.

AWARDS WON National Award for Assistance to Exporters from the President of India (1976-77)

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Gem & Jewellery Export Promotion Council Award successively for 5 years from

1981 to 1985

Shiromani Award 1992 for Banking from Union Minister for Commerce

Best Bank Award for Excellence in Banking Technology from Institute for

Development and Research in Banking Technology (IDRBT), Hyderabad (2001)

Best Bank Award for Innovative Usage and Application on INFINET (Indian

Financial Network) from Institute for Development and Research in Banking

Technology (IDRBT), Hyderabad (2002)

Best Bank Award for Delivery Channels from Institute for Development and

Research in Banking Technology (IDRBT), Hyderabad (2003)

Runner-up Awards in the “Best Online and Multi-channel Banking Team” and

“Outstanding achiever of the year-corporate” categories in recognition of outstanding

achievement in Banking Technology for 2004, instituted under the aegis of Indian

Banks Association and Trade Fairs & Conferences International.

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MAJOR RECOGNITIONS One of the Best 200 companies world over outside the US having a turnover under a

billion US$ - Forbes Global, Hong Kong, issue dated 27 October 2003

India’s Best Public Sector Bank - Business Today - KPMG Survey dated 7 December,

2003

India’s Strongest and Asia’s Second Strongest - The Asian Banker, Singapore dated

15 December 2003

India’s Best Public Sector Bank - Outlook Money , 15 March 2004

One among the Best 200/100 companies in Asia/Pacific and Europe having turnover

under a billion US $ - Forbes Global, Hong Kong dated 1 November 2004

One among India’s Best Public Sector Banks - Business Today, 26 February 2008

ORGANIZATION CHART

Organization Structure of corporation Bank at RNR BRANCH

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Branch Manager

Officer

ClerkCash Payment

Clerk Cash Clearing

Clerk Cash Term

Deposits

ClerkCash Receipts

Spl Asst


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CHAIRMAN & MANAGING DIRECTOR

BOARD OF DIRECTORS

GENERAL MANAGERS PORTFOLIOS

1. Management Committee

2. Audit Committee

3. Departmental Promotion Committee

4. Investor Grievance Committee

6. Risk Management Committee

7. Committee to monitor large value frauds

8. Share Transfer Committee

9. Customer Service committee

10. Remuneration committee

GM Offices/Regional Offices - 18

Branches - 8100

17

EXECUTIVE DIRECTOR


The Board of Directors

The Board is constituted in accordance with the Banking Companies (Acquisition and

Transfer of Undertakings Act 1980 and Nationalized Banks Scheme 1980 and is

represented by persons with diversified professional experience. The Directors bring in wide

range of expertise and experience to the Board, facilitating proficient and unbiased direction

and control to the Bank.

The Board has constituted various committees as under, which provide

specific and focused governance in the important functional areas and control affairs of the

Bank.

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Management Committee:

The Management Committee is constituted as per the provisions of Nationalized Banks

(Management and Miscellaneous provisions) Scheme 1980 and consists of 6 Directors.

Audit Committee:

The formation and functioning of Audit Committee is governed by the directions of RBI. The

Audit Committee provides direction as also oversees the operation of the total audit functions

in the Bank and follow up the statutory/external audit of the Bank and inspection of RBI.

Departmental Promotion Committee:

The Committee assesses the disciplinary cases and promotions to top executive cadre in the

Bank.

Investor Grievance Committee:

The Committee looks into the redressal of investor grievances.

Information Technology Committee:

In the changing environment, to suit the growing needs of customers, the Bank has been

taking various initiatives. To guide the bank for accelerated implementation of these projects

and also to explore the possibility of providing innovative technology based products, this

Committee has been constituted.

Risk Management Committee:

The Committee was formed to guide the bank in respect of integrated risk management.

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Integrated Risk Management System

Risk Management is an integral part of a Bank’s organizational structure and business

strategy. Identification, measurement, monitoring and controlling the risk enables the

Bank to minimize losses and maximize profits. The major types of risk faced by the Bank are

Credit Risk, Market Risk and Operational Risk.

Risk Management Committee of Executives and Risk Management Committee of the Board

are looking after the implementation of integrated risk management systems in the Bank.

Bank has well laid down risk management policies for management of credit risk, market risk

and operational risk. In the area of credit risk, the Bank had in the year 2006 upgraded the

rating models applicable for borrowers under commercial loan segment. The rating models

are working on web based enterprise wide solution called Risk Assessment Model (RAM).

The software, apart from rating the borrowers helps in preparation of appraisal notes. This

software will enable the Bank to build database for moving over to IRB approach of Basel –

II. The software also has a module called Capital Assessment Model (CAM), which is used to

compute capital for credit risk under Standardized Approach of Basel-II as prescribed by

RBI. Bank has complied with the timeframe prescribed by RBI for computation of capital as

per Basel II norms, i.e. 31.03.2009.

For management of operational risk, Bank has introduced the system of incident reporting,

which helps in identifying operational risks. Corrective steps are taken for mitigating these

risks and for upgrading the control mechanism. Under Risk Based Supervision, Risk Profile

Templates covering business risks and two control risks are prepared on quarterly basis and

submitted to Reserve Bank of India.

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Committee to monitor large value frauds:

With a view to provide focused attention on monitoring frauds of Rs.1 Crore and above, this

Committee has been formed.

Share Transfer Committee:

In order to meet the request of the shareholders such as transfer, re materialization and

duplicate shares, the Committee was constituted.

Customer Service Committee:

With a view to safeguard the individual customer’s right and to deliver better customer

service, the Committee was constituted.

Remuneration committee:

The Remuneration committee was constituted to evaluate the performance for arriving at the

eligible incentive amount under performance linked incentives to the whole time directors

(viz.CMD and ED).

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WHAT IS CORE BANKING?

Core Banking is normally defined as the business conducted by a banking institution

with its retail and small business customers. Many banks treat the retail customers as

their core banking customers, and have a separate line of business to manage small

businesses. Larger businesses are managed via the Corporate Banking division of the

institution. Core banking basically is depositing and lending of money.

Normal core banking functions will include deposit accounts, loans, mortgages and

payments. Banks make these services available across multiple channels like ATMs,

Internet banking, and branches. Core Banking Solutions is new jargon frequently used

in banking circles of India. The advancement in technology especially internet and

information technology has lead to new way of doing business in banking.

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The technologies have cut down time, working simultaneously on different issues and

increased efficiency. The platform where communication technology and information

technology are merged to suit core needs of banking is known as Core Banking

Solutions. Here computer software is developed to perform core operations of banking

like recording of transactions, passbook maintenance, and interest calculations on loans

and deposits, customer records, balance of payments and withdrawal are done. This

software is installed at different branches of bank and then interconnected by means of

communication lines like telephones, satellite, internet etc. It allows the user

(customers) to operate accounts from any branch if it has installed core banking

solutions.

Core banking is a centralized approach to handling of bank data and applications. thus

the data and application of all the branches reside in one centralized location [in a

common server] and the branches can access their data through a link provided to the

centralized server.Besides,branches will also have access to the data of other branches

and can handle operations across branches.

In core banking, a centralized server is maintained at a designated place and a

connectivity network is also established as a backbone. Such centralized data

maintenance will give strategic advantage to the bank. Customers will be the big

beneficiaries. At the same time, a centralized data maintenance and MIS will relieve the

branches and the zonal set ups the burden of information generation and follows up.

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FEATURES

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Although decentralized automation at the micro or the branch level, achieved the

primary objectives of handling additional volumes, imparting better customer service /

customer convenience, improving productivity etc. to a great extent, at the macro level,

there was always a scope for improvement.

The decentralized environment was handicapped to an extent in imparting the desired

extent of flexibility to MIS generation, introduction of Customer Relationship Management

[CRM] functions, Data warehousing and Data mining facilities etc. Further, the

implementation of innovative delivery channels and techno-savvy products are also

relatively difficult in decentralized environments.

A typical Core Banking Solution envisages the branches being linked to a centralized

location for accessing data. The users will be logging on to the Core Server from remote

branches and all program executions will take place only at the Core Server. From the view

point of the institution, the availability of data centrally affords the flexibility of using the

consolidated pool of information at the disposal which is capable of tremendous processing and

information generation capabilities.

FACILITIES

Compared to a decentralized setup, the Core Banking Solution has the following advantages:

• Centralized database for performing various online banking utilities

• Facilitates Any Branch Banking

• Shifting of time consuming activities like End of Day (EOD) processing,

Interest calculation, interest posting, debiting inward clearing cheques etc., to

centralized location to enable the field level functionaries to concentrate on customer

service and marketing activities

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• Facilitates centralized auditing of branches

• Provides for effective monitoring by the controlling offices

• Facilitates ease of maintenance of the package

• Enables simultaneous launching of new products across all branches connected

To the CBS

• Paves the way for setting up a Data Warehouse

• Facilitates better MIS as a decision support tool.

The Core Banking environment offers a totally different perspective from the business

angle when compared to a decentralized environment. With the Core Banking in place, the

focus of erstwhile "Branch Banking" will shift to "Bank Banking". Further, the banking

operations assume "Round the clock" capability which is not limited by closure of the

branches, holidays etc.

DEPENDENCIES

As in the case of any technology based service, there are some dependencies for

the Core Banking applications also. Some of the critical dependencies are on the

Network, Competent Manpower and the Pre-Core Activities to be completed at

the branches.

The Bank has all its branches automated using the TBA package. In a typical

scenario, the branches start afresh on Core Banking package. This requires the

details of all the existing accounts, masters etc. to be created afresh. The Bank has

gone in for a Core Banking solution which offers the flexibility of migrating from

the existing TBA by converting all the relevant data to the Core.

BABASAB PATIL 30


This entails that a lot of pre-core activities have to be accorded due importance as

the success of the CORE Banking setup [CBS] hinges on these activities to a great

extent.

PRE-CORE ACTIVITIES AT BRANCHES

Whilst on this it may be relevant to note that there are certain activities, which need to be

done by the branch officials in co-ordination with the officials of the Zonal Computer Centers so

as to be in all readiness for the transition from an automated branch to a core banking

branch.

With a view to helping the branch officials for smooth transition from TBA to Core Banking,

the following step by step activities are listed. Needless to mention, these activities have to

be completed at least 15 days prior to migration to the Core Banking solution.

HOUSE-KEEPING

Balancing and tallying of accounts is one of the important pre-requisites for

migration to Core Banking. It shall be ensured that the balances of the following

heads of accounts are tallied with the General Ledger:

• Running accounts like SB, CA, OD, CC etc.

• Loan accounts like HPL, DLS, HL etc.,

• Deposit accounts like FD, KCC, RD, JD etc.,

• Interest Payable Account

• Pay Orders Account

• Bills like DBC, BDD, OBCC, OBCO, IBC, BE, BELC, LRDS etc.

• Sundry Assets and Suspense Accounts

BABASAB PATIL 31


The branches shall submit a confirmation to this effect by furnishing the details sought

in the Format prescribed for the purpose for recording the balancing figures, GL

figures, No. of accounts etc. in Annexure-1, Annexure-2, & Annexure-3. These

formats shall be duly authenticated by the officials of the branch on recording the

relevant details.

Further, the branches shall ensure that:

• All balances of breakup GLs under a Sub GL are tallied with respective Sub-GL balance

• All the SUB-GLs under a GL are tallied with respective Main GL balance.

The scanning and tagging of signatures are activities which are pre-requisites for

effective CBS and for implementation of Any Branch Banking [ABB]. If the signatures

are not scanned and tagged, the branches would find it difficult to honor the

cheques of a customer of another branch under ABB. The branches therefore need to

accord top priority to this activity and are advised to scan and tag the signatures on a day

to day basis and to keep them updated.

REPORT GENERATION IN IBAS6

In order to check the accuracy and integrity of data on migration to CBS, the

branch shall generate the various reports mentioned below in the TEA environment

before migration. As it is also planned to preserve the generated report files, the

following steps shall be followed:

Create a separate directory CORE in J:\REPORTS

• Map J: =VOLl:\REPORTS\CORE so that all the reports will be generated in

J:\REPORTS\CORE..The branches shall take 2 sets of these reports and these printed reports are

to be verified for accuracy and authenticated by the branch personnel. One copy of the report shall

be preserved by the branch permanently for future reference and auditing purposes and the other copy

BABASAB PATIL 32


shall be forwarded to the Core Centre, Bangalore for verification of these reports with the reports

generated in the Core Server after migrating the branch data.

The following reports shall be generated for the dates mentioned:

• Last day of the previous three quarters

• First day of the previous three quarters

BABASAB PATIL

01 R_RDSHT RD/TB

02 R_TRIAL Trial Balance

03 R_CORPBK Sub day book

04 R_GLASON GL as on date

05 R_CSHSCL Cash scroll

06 RJTRFSCR Transfer Scroll

07 R_BPOOST PO outstanding list

08 R_CLGSCR Clearing Scroll

09 P-OCAUTH Clearing register

10 R_OCLED Clearing ledger

11 R_PAC For a few selective parties

12 R_OUTGS Outstanding BGs

13 R_SUMBAL Balancing of all GLs for above dates

14 R_ACBAL Balancing name wise (for a few heads)

15 R_MSM01 MSM for a date

16 R_BOOK81 Originating Entries

17 R_BOOK82 Responding Entries

18 P_B81DF IBR Data file generation

19 R_EXLST Exception Transaction List

20 R-TCHK Transaction Check list

21 R_CCLST Master data printing

33


STANDARDIZATION OF GL/SUB-GL/BREAKUP-GL

As the entire database of the Bank in the CBS will be available in a single place, to

maintain uniformity and ensure compatibility, there is a need for standardizing most of

the Master Records to be used by the branches like :

• Prefix master

• Mode of Operation

• Place Master

• Country Master

BABASAB PATIL 34


• State Code Master

• Branch master of the Bank

• General Ledger, Sub-GLs and Breakup GLs

The standardization of Masters is also very critical to generate meaningful MIS

from the Core Centre. A list of standardized GL/SUB-GL/BREAKUP-GL is

enclosed in Annexure-4 for your information.

Instances have been observed wherein branches have posted some transactions

for a given GL/Sub-GL/Breakup-GL in one accounting year (For e.g.:

Transaction posted in the year 2002-2003 for 821/52/71 - Sundry Assets -

Sundry Debtors - Advances drawn by XYZ) and have deleted such Sub-GLs or

Breakup GLs in the subsequent year (For e.g.: the branch has deleted the Breakup-

GL 71 of 821/52 in the year 2003-2004).

In all such instances the transactions posted for the deleted Sub-GLs / Breakup

GLs will be displayed when the program Q_TR or Q_TRAN is invoked, as

these transactions are not deleted. But they may not get displayed when

Q_GLASON is invoked as the Sub-GL/ Breakup-GLs are deleted. This will

result in anomaly m the R_GLASON report generated by the branch for dates of

the earlier year.

In order to ascertain whether such mistakes have taken place in the branch, the

program R_GLSCAN shall be run which will read the transaction files and

generate a report of such of those transactions for which master details of GL/ Sub-

GL / Breakup-GLs are not available.

If any Sub GL / Breakup-GLs are missing, the same should be created using

M_GLSH and M_GLGB (option 17 and 18 of Main Menu).

The program R_MISSSG shall give a report on missing Sub-GL for Breakup-GLs.

The missing Sub-GLs can be created using M_GLSH.

BABASAB PATIL 35


Wherever unwanted break-up GLs exist and if there is no balance or no

transactions during the last 2 years, the same may be deleted.

The existing GL/SUB-GL at the branch has to be mapped to the standardized GL

supplied by the Core. If the branch finds any Breakup-GL which has been now

brought to the level of GL/ SUB-GL in the standard supplied by the CORE, they are

to be mapped accordingly. Branches have to write the mappings in the

R_GLASON report taken at the branch.

STANDARDIZATION OF MASTERS

Under the Core Banking environment, standardization of MASTERS has been earned out.

A List of standardized MASTERS is enclosed (Annexure-5 and Annexure-6).

Some instances have been observed wherein the branches have deleted some SUB-

TYPES of some account types after putting through transactions in those accounts and sub

types for some time. This is similar to deletion of Sub-GL / Breakup GL as explained earlier

resulting in some anomaly. In order to identify such deletion, the programs R_AMTYPE,

and R_BLTYPE shall be run which shall give report on missing Parent Master for Account

type/Sub type, Bill type. These reports shall indicate account type/bill type used and

subsequent deletion of the account type/bill type master. '***' in the report indicates

missing Master but used at the account level. The Conversion Team from the Zonal

Computer Centre shall decide whether such master is to be added or not. If it is to be added,

as some live accounts could be available, after adding the same such account types/bill

types are to be mapped to the standard masters supplied to the branch.

The Conversion Team from the Zonal Computer Centre shall map all the deviations in

the master with the Standard Master supplied by the Core Centre. The branch shall then

take the printouts of Masters using print option available in the respective master

programs. (Refer Annexure 5 & Annexure 6)

BABASAB PATIL 36


BRANCH SPECIFIC PARAMETERS

As mentioned earlier, standardized parameters shall be created for each of the modules

Arid these parameters shall be bifurcated as given below:

(a) Parameters maintained by the Core Centre which is applicable to all branches

(b) Branch specific parameters,

For example, parameters like Deposit Interest Rate, TDS Rate, Account Closure, Outward

Bills Charges, DD/PO accounting parameter etc. are maintained at the Core and the branches will

not be in a position to modify these parameters whereas parameters like Locker Charges, DD/PO

charges etc. which are specific to branches are examples of Branch-wise parameters which can be

changed by the branches. The branch specific parameters shall be kept ready by all branches

identified for Core Banking for different modules like :

• Demand Drafts

• Pay Orders,

• Telegraphic Transfer/Mai 1 Transfer,

• Bills/Cheques for Collection,

• Purchase of Bills/cheques,

• Outward clearing returns,

• Inward clearing returns,

• Locker rent,

• Folio charges,

• Cheque book issue charges,

• Charges for duplicate statement of accounts,

• Charges for not maintaining minimum balances,

• Charges for utilizing cheque leaves,

BABASAB PATIL 37


• Other charges for OD/CC accounts while calculating interest etc.

These branch specific parameters will be updated at the Core Centre, branch-wise as a one

time measure before the branch goes live under the Core environment. Subsequent changes

required for these parameters are to be effected by the branches by choosing the appropriate

options.

Branch shall also provide the following information in the Annexure-7 format.

• Last Inter Branch Transaction Serial Number used (TSL. NO.)

• Last used Pay Order Serial Number

• Last used Account Serial Numbers under each account types and sub-types.

• Last used serial numbers of LC/BG/LOCKER

• Last used serial number for Telegraphic Transfer

• Last used serial number for Mail Transfer

• Last used serial numbers for Inward & Outward Bills/Cheques

• Last used serial number for TDS- 16A

STANDARDISATION OF LOGIN-ID/USER-ID

In the Core Banking environment, the Login-ID for the Core UNIX Server shall be the

respective Employee numbers (E.g. E02336). Standardization has also been made in

respect of Login-IDs in the Core UNIX Server and User-IDs in the Application Software.

Since the operating system used in the Core server being UNIX is case sensitive, the

users shall take care to remember the upper or lowercase in which the characters are

entered while keying in the passwords for logging into the Core UNIX Server

BABASAB PATIL 38


The User-ID in the application software shall always be in upper case as hitherto being used

in IBAS6, Hence, the alphabet 'E' at the beginning of the employee number of the user-id shall

be given in upper case only, (E.g. E02336). Please note that the Password is also case

sensitive. (E.g. the password LASER is different from laser and Laser is different from

Laser)

In view of the above changes and to assist the Core Migration Team to create the users

of each branch, the branches are required to prepare a list mentioning the following details in

respect of all the employees working presently in the branch :

• E. No.

• Name

• Designation

• Signing Power Number (In the case of Special Assistant & Officers)

• Date of joining at the Bank and Branch

• Details of employees on deputation to the branch need to be mentioned with

Information about their base branches as per format in Annexure-8

PHASE-1-HISTORY DATA

On completion of the aforesaid exercises, the backup of data shall be taken with the

assistance of the officials of the ZCCs. The officials of the ZCC shall also scan the data of the branch

for any corruption. Once the scanning process is completed, the data from the date of computerization

of the branch till the previous quarter shall be backed up in CDs in 3 sets / copies by the officials

of the ZCC. The CDs containing the files *.7*, *.8*, *.9*, *.0* (except current quarter) shall

be sent to Core Centre, Bangalore in advance so as to enable the Core Centre to start the

BABASAB PATIL 39


preparatory work in connection with data migration in advance. The Branch shall also send a letter

in duplicate enclosing the CDs to the Core Centre, Bangalore as per format in Annexure-10. The

Core Centre on receipt of the CDs shall return the duplicate copy of the letter to the branch duly

signed, as a confirmation for having received the CDs. It is essential for the Core Centre to

receive the data CDs of the branches identified for migration to Core banking at least 15 days

in advance.

One copy each of CDs shall be kept in the fireproof cabinet at the branch as well as at the

Zonal Computer Centre.

PHASE-H-CURRENT QUARTER DATA

It is ideal to take up the migration process only on weekly holiday / holiday of the branches

so that the converting team has sufficient time to convert the data. One day prior to the

planned date of migration (on Friday in most of the cases if Sunday is the weekly holiday)

the data of the branch shall be scanned by the officials of the ZCC for corruption, if any,

so that such corrupted data can be recovered and kept ready for being sent to the Core

centre, the next day. Once the data is ensured free from corruption, the *.BNK and *.0*

files of current quarter, *.COB, *.SCN, *.EXE, *.BAT, *,MSG & *.COM,

*.DLL etc. available in the LIVE AREA i.e. L:\1BAS6 and also the reports generated in

J:\REPORTS\CORE shall be copied in CDs by the officials of the ZCC. The CDs shall

be cut into 3 copies / sets. The Branch shall send a letter in duplicate enclosing the CDs to

the Core Centre, Bangalore as per format in Annexure-10. The Core Centre on receipt of

the CDs shall return the duplicate copy of the letter to the branch duly signed, as a

confirmation for having received the CDs. It shall be ensured that the copying of data from

the live area to CDs as mentioned above shall be undertaken only after tallying RD/TB and

BABASAB PATIL 40


completing the EOD process for that day i.e. on the eve of migrating to Core Banking. It

shall also be ensured that if any Outward Clearing Returns have been marked, the same has

been debited to the respective accounts / heads by executing 'Clearing the Unclear option'.

This is required since in the new software, procedure for marking the returns has been

changed to accept the Clearing date & Serial number under which the instruments have been

returned.

One copy of the CDs containing the data of the current quarter shall also be sent to the

Zonal Computer Centre and another copy shall be kept in the fireproof cabinet at the

branch.

NEW MENU (FOR INFORMATION)

Under the Core Banking software, flexibility is available to define the MENU to be shown

To different levels of users such as:

• Manager & Officer

• Operator

A copy of the new menu list is provided to the branch so as to enable the staff members

to become familiar. The details of the different levels of the menus are displayed in

Annexure-9

STATUS OF MODULES IMPLEMENTED

In order to ascertain whether all the modules have been ported and also for the purpose

of migrating al the implemented modules, the branches shall provide the details in the

format as per Annexure-12.

BABASAB PATIL 41


MANAGEMENT OF HISTORY DATA IN THE NOVELL SERVER

The branch servers used until the date of migration will be available in the branches only for

verification of entries made, printing of old entries in Pass Book, attending to the queries of

Customers, Government Agencies etc.

The data from the beginning of the previous financial year onwards, till the current date of

migration will only be migrated to Core immediately.[ i.e. a branch getting migrated to Core

Banking in the financial year 2003-04 from TEA shall have only data from 01-04-2002 in the

Core Banking setup]. The migration of data from the date of computerization of the branch till

the year end up to which the data has been migrated to Core Banking [i.e. 31-03-2002 in the

above case] will be taken up at a later date.

Therefore, till such time the entire history data is migrated to Core Banking, the branch shall

use the Novell Server for all the queries, pass book printing, statement of accounts, report

generation etc.

As a security measure, all the entry programs in the Novell Server shall be deleted by the

officials of the ZCC permanently so that it is not possible to put through any entries / transactions in

the Novell Server.

Further, the officials of the branch shall once login to the Novell Server using Admin-ID and

password to ascertain whether the password is accepted / correct. Once successfully logged

into the Novell Server using ADMIN ID and password, the Admin password shall be kept in a

sealed cover and preserved in the Double Lock of the branch. A copy of the Admin password

shall be also kept in a sealed cover and handed over to the ZCC official who visits the branch

for Migration activity for preservation at ZCC under double lock.

POST-CORE ACTIVITIES

BABASAB PATIL 42


User ID of Branch Officials

Once the data migration is completed, the USER-IDs of the branch officials will be created at the

Core Centre. The default password will also be given at the Core Centre. These User-IDs

and the default passwords will be communicated to the respective branches.

User ID of the Branch Staff

As soon as the officials of the branch using the User-IDs, log in to the Core UNIX Server,

There will be a prompt to change the password. The Branch Officials shall change the password

immediately. The USER-IDs for all the staff members working at the branch shall be created.

The same need to be authenticated by two officials other than the official who has created

the USER IDs.

Generation of reports in Core Unix Server

Based on the information provided on Mapping of Account Types, GLs, Sub-

GLS, Breakup GLs, Masters etc., the Core Team shall execute a set of programs

for mapping the branch data to the core data and perform a process by which the

Master and Transaction data of the branch will be migrated to a format as required

by the Core Banking Software. As the migration process has also ensured

standardized masters, GL, SubGL, Breakup GLs, Account Types etc., it is

necessary to check the integrity of the converted data.

A report will be generated at the Core Centre showing the details of the mappings

carried out. This report will be sent to the Branch and the Officials at the branch /

Branch Manager shall verify the report and certify the accuracy on the same day.

Specimen of the Certificate is attached as Annexure-11.

To perform such an integrity check, the branch shall generate various reports

mentioned above from the migrated data from Core Unix Server and verify with the

reports generated earlier in TEA [IBAS6] of Novell Server. The figures in both

BABASAB PATIL 43


the reports should tally. The Branch shall report the inconsistencies if any, to

the Core Conversion team immediately.

If the Branch is satisfied about integrity of the data based on the various reports

generated from the Core UNIX Server, they should give a certificate to the

effect that the Branch has successfully converted, on the migration day itself.

Specimen of the format of the Certificate is attached as Annexure-11. The

Certificate along with the reports generated both in NOVELL SERVER and CORE

UNIX SERVER should be authenticated by the branch officials/Branch Manager.

The same should be filed and kept in double lock for future verification and auditing.

CASH FLOW STATEMENT OF CORPORATION BANK

The cash flow statement is distinct from the income statement and balance sheet because it

does not include the amount of future incoming and outgoing cash that has been recorded on

credit. Therefore, cash is not the same as net income, which, on the income statement and

balance sheet, includes cash sales and sales made on credit.

BABASAB PATIL 44

http://www.investopedia.com/terms/n/netincome.asp

http://www.investopedia.com/terms/c/credit.asp


Cash flow is determined by looking at three components by which cash enters and leaves a

company: core operations, investing and financing,

OPERATIONS

Measuring the cash inflows and outflows caused by core business operations, the operations

component of cash flow reflects how much cash is generated from a company's products or

services. Generally, changes made in cash, accounts receivable, depreciation, inventory and

accounts payable are reflected in cash from operations.

Cash flow is calculated by making certain adjustments to net income by

adding or subtracting differences in revenue, expenses and credit transactions (appearing on

the balance sheet and income statement) resulting from transactions that occur from one

period to the next. These adjustments are made because non-cash items are calculated into net

income (income statement) and total assets and liabilities (balance sheet). So, because not all

transactions involve actual cash items, many items have to be re-evaluated when calculating

cash flow from operations.

INVESTING

Changes in equipment, assets or investments relate to cash from investing. Usually cash

changes from investing are a "cash out" item, because cash is used to buy new equipment,

buildings or short-term assets such as marketable securities. However, when a company

divests of an asset, the transaction is considered "cash in" for calculating cash

From investing.

BABASAB PATIL 45

http://www.investopedia.com/terms/l/liability.asp

http://www.investopedia.com/terms/a/asset.asp

http://www.investopedia.com/terms/r/revenue.asp

http://www.investopedia.com/terms/a/accountspayable.asp

http://www.investopedia.com/terms/i/inventory.asp

http://www.investopedia.com/terms/d/depreciation.asp

http://www.investopedia.com/terms/a/accountsreceivable.asp


FINANCING

Changes in debt, loans or dividends are accounted for in cash from financing. Changes in

cash from financing are "cash in" when capital is raised, and they're "cash out" when

dividends are paid. Thus, if a company issues a bond to the public, the company receives cash

financing; however, when interest is paid to bondholders, the company is reducing its cash.

BENEFITS FROM USING CASH FLOW

The cash flow statement is one of the four main financial statements of a company. The cash

flow statement can be examined to determine the short-term sustainability of a company. If

cash is increasing (and operational cash flow is positive), then a company will often be

deemed to be healthy in the short-term. Increasing or stable cash balances suggest that a

company is able to meet its cash needs, and remain solvent. This information cannot always

be seen in the income statement or the balance sheet of a company.

LITERATURE SURVEY

The title of the project report is “To Determine the Effectiveness of Core Banking On

Cash Flow” of corporation bank at RNR BRANCH.

BODY OF THE REPORT:

The research is under taken to determine the effectiveness of core banking on cash

flow introduced by corporation bank.

Primary data was collected by administration questionnaire of 100 customers & 10

employees (All) of corporation bank at RNR BRANCH.

BABASAB PATIL 46

http://en.wikipedia.org/wiki/Cash_flow_statement

http://www.investopedia.com/terms/d/dividend.asp


The questionnaire was specially framed to meet the requirement of the survey.

Direct contact was made with the respondents through random sample to collect the

needful information with reference to our objective as for to meet the survey

requirements.

STATEMENT OF PROBLEM:

“ To Determine the Effectiveness of Core Banking On Cash Flow” of

Corporation bank at RNR BRANCH.

MANAGEMENT PROBLEM:

Today every bank is offering the services which can simplify the banking system.

Corporation Bank is serving the customer community since past 101 years & has now

introduced a unique concept of banking that is core banking at RNR BRANCH. The

Management now wants to know the effectiveness of core banking on cash flow.

PURPOSE OF THE STUDY:


recently. The Management, in this survey wants to find out the growth percentage of cash

BABASAB PATIL 47


flow by introduction of core banking solutions & also to know the impact of core banking

on employees & customers of corporation Bank.

OBJECTIVES OF THE STUDY

The main objective of the study is to determine the effectiveness of core banking on

cash flow.



To find out the growth percentage of cash flow by introduction of core banking.

To analyze the difficulties of core banking and suggest suitable remedies.

METHODOLOGY

Sample size:

BABASAB PATIL 48


A sample of 100 customers & 10 employees of the bank were chosen for the purpose

of study.

Sampling procedure: Random Sampling Method.

From the large number of account holder’s of the bank, 100 customers were selected

randomly from the bank’s data base & since there are only 10 employees working

under the concept of core banking all the employees were considered for the study.

Research design

Since the management problem is already known the research design best suitable for

this research is Descriptive research design.

Data Collection Method

To fulfill the objectives of my study, I have taken both into considerations viz primary

& secondary data.

Primary Data:

Primary data was collected through making survey, which is systematic collecting of

information directly from the respondents i.e. through Questionnaires.

Secondary Data:

Secondary data was collected through Organizational records.

The various sources that were used for the collection of secondary data are

o Internal files & materials

o Websites – www.corporation.com

Measuring tools

BABASAB PATIL 49


For this purpose measurement technique used for survey is questionnaire to collect

information from the respondents. Having collected the information, the information

was represented by using statistical tools like bar charts and pie charts.

Second measuring tool is the result of the analysis of cash flow statements.

ANALYSIS AND INTERPRETATION

BABASAB PATIL 50


(ONLY FOR EMPLOYEES)

1. EMPLOYEE EXPERIENCE

1 2 710

20

70

0

10

20

30

40

50

60

70

80

PARTICULARS

PE

RC

EN

TA

GE

INTERPRETATION:

The objective of the question was to know the employees experience in this bank. This will

reflect the relationship with the bank.10% of the Employees have been working in this bank

since 1 year, 20% of the Employees have been working in this bank since last 2-5 years and

70% of the Employees have been working in this bank more than 5 years.

2. SATISFACTION LEVEL.

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGEA. SINCE 1 YEAR

B. SINCE 2-5 YEARSC. MORE THAN 5 YEARS

127

102070

TOTAL 10 100

51


6 4 0

60

40

0

0

10

20

30

40

50

60

70

PARTICULARS

PE

RC

EN

TA

GE

INTERPRETATION:

The Objective of the question is to understand the satisfaction level of the employees. Most

of the employees are satisfied with the concept of core banking. The percentage of the

satisfaction is 60% and 40% respectively. It states that most of the employees are satisfied.

The concept can be more effective if all the employees are fully satisfied with the concept.

3. ANALYSIS ON BENEFIT OF CORE BANKING.

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGE1. VERY MUCH SATISFIED2. SATISFIED 3. DELIGHTED

64-

6040-

TOTAL 10 100

52


10 0

100

0

0

20

40

60

80

100

120

PARTICULARS

PE

RC

EN

TA

GE

INTERPRETATION:

The Objective of the question is to understand whether the customers of the bank are really

benefited from the concept or not. The percentage of the response is 100%.It states that most

of the employees believe that the concept is really helping the customers of the bank.

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGE 1.YES

2.NO

10

-

100

-

TOTAL 10 100

53


4. IMPACT ON CASH FLOW.

8 2

80

20

0

10

20

30

40

50

60

70

80

90

PARTICULARS

PE

RC

EN

TA

GE

INTERPRETATION:

The Objective of the question was to know the effectiveness of core banking on cash flow.

The percentage of the response is 80% and 20% respectively. It states that majority of the

employees believe that the concept of core banking solutions helps in increasing the cash

flow. The percentage of the response can be increased if the problems are properly diagnosed

which in turn helps in knowing the effectiveness of core banking on cash flow.

BABASAB PATIL


2.NO

8

2

80

20

TOTAL 10 100

54


5. ANALYSIS OF TIME & MONEY.

9 1

90

10

0

10

20

30

40

50

60

70

80

90

100

PARTICULARS

PE

RC

EN

TA

GE

INTERPRETATION:

The Objective of the question was to know whether the concept of core banking saves time &

money of the employees & customer of the bank. The percentage of the response is 90% and

10% respectively. It states that majority of the employees believe that the concept of core

banking solutions saves time & money of the employees & customer of the bank .Hence it is

effective as far as time & money is concerned.

BABASAB PATIL


2.NO

9

1

90

10

TOTAL 10 100

55


6. COMPARISION WITH PREVIOUS CONCEPT.

0 0

10

20

02468

101214161820

INTERPRETATION:

The Objective of the question was to know which of the concept is more easier and advantage

one is the core banking concept and another is IBAS (which was used before core

banking) .The percentage of the response is 100% respectively. It states that majority of the

employees believe that the concept of core banking solutions is easier and advantage as

compared to IBAS.

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGE1.IBAS

2.CORE BANKING

-

10

-

100

TOTAL 10 100

56


7. ANALYSIS OF TRAINING.

10 0

100

0

0

20

40

60

80

100

120

1.YES 2.NO

INTERPRETATION:

Since the concept of core banking is new to the organization, the Objective of the question

was to know whether bank/management has given any training for the employees for the

smooth operation of the work. The percentage of the response is 100% and 0% respectively.

This clearly shows that bank/management given any training with respect to core banking for

the smooth operation of the work.

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2.NO

10

0

100

0

TOTAL 10 100

57


8. EFFECTIVENESS OF TRAINING.

3 7 0

30

70

0

0

10

20

30

40

50

60

70

80

1.VERY MUCHSATISFIED

2. SATISFIED 3. NOT AT ALLSATISFIED

INTERPRETATION:

The Objective of the question was to know the effectiveness of the training program given by

the bank. This will help in analyzing the problem with the concept of core banking. The

percentage of the response is 30% and 70% respectively.

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGE1.VERY MUCH SATISFIED2. SATISFIED3. NOT AT ALL SATISFIED

370

30700

TOTAL 10 100

58


9. ANALYSIS OF DRAWBACK.

1.YES 2.NO

660

440

0

10

20

30

40

50

60

INTERPRETATION:

The Objective of the question was to know the drawback of the concept if there are any. This

will help in analyzing the problem with the concept of core banking and coming out with a

problem solution. The percentage of the response is 60% and 40% respectively. This clearly

shows that some employees of the bank are not completely satisfied with the concept since

BABASAB PATIL


2.NO

6

4

60

40

TOTAL 10 100

59


they believe there are some drawbacks. Once the drawbacks are analyzed the concept can be

called as effective.

10. ANALYSIS OF PROBLEM.

220

880

0 00

10

20

30

40

50

60

70

80

INTERPRETATION:

The Objective of the question was to know the problem that the employees of the bank are

facing with respect to core banking. This will help in analyzing the problem with the concept

of core banking and coming out with a problem solution. The percentage of the response is

20% and 80% respectively. This clearly shows that some employees of the bank are facing

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGE1. LACK OF TRAINING 2. AWARENESS3. TIME CONSUMING

280

20800

TOTAL 10 100

60


problem with lack of training and awareness of the concept. If this problem is over come then

the concept can be called effective.

11. NEED FOR IMPROVEMENT OF THE CONCEPT.

10100

0 0

0

10

20

30

40

50

60

70

80

90

100

INTERPRETATION:

The Objective of the question was to know scope for improvement of the concept. This will

help in further improvement of the concept. The percentage of the response is 100%

respectively.

BABASAB PATIL


2.NO

10

0

100

0

TOTAL 10 100

61


(ONLY FOR CUSTOMERS)

12. ANALYSIS DURATION OF CUSTOMERSHIP.

26

43

31

0

5

10

15

20

25

30

35

40

45

50

1.SINCE 1 YEAR 2.SINCE 2-5 YEARS 3.MORE THAN 5YEARS

PARTICULARS

PE

RC

EN

TA

GE

INTERPRETATION:

The objective of the question was to know the period for which the customers are the account

holders of the bank. This will reflect the relationship with the bank.26% of the customers

have been the customers of this bank since1Year,43% of the customers have been the

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGE

1.SINCE 1 YEAR 2.SINCE 2-5 YEARS 3.MORE THAN 5 YEARS

264331

264331

TOTAL 100 100

62


customers of this bank since 2-5 Years and 31% of the customers have been the customers of

this bank since last 5 years.

13. ANALYSIS ON AWARENESS

INTERPRETATION:

The objective of this question was to know the awareness of Core Banking, 87% of the

customers are aware of Core banking and another 13% of the customers are not aware of this

concept. The response from the respondents about the awareness of this concept will help the

BABASAB PATIL


1. YES2. NO

8713

8713

TOTAL 100 100

63

87

13

0

10

20

30

40

50

60

70

80

90

100

1. YES 2. NO

PARTICULARS

PE

RC

EN

TA

GE


banker to understand awareness level among the existing customers.81% of the customers are

aware of the system and this is a plus point to the bank.

14. UTILIZATION OF CONCEPT.

69

31

0

10

20

30

40

50

60

70

80

1.YES 2.NO

PARTICULARS

PE

RC

EN

TA

GE

INTERPRETATION:

Corporation Bank has introduced this concept for the better services for its customers.69% of

the respondents have used the concept while other 31% are just aware of the concept, but

they have never worked with the concept. Though the respondents are aware of the concept,

BABASAB PATIL


1.YES2.NO

6931

6931

TOTAL 100 100

64


sometimes they have not avail the benefit of the concept. If they are taking the benefit of the

concept then we can find out the effectiveness of core banking in the banking Organization.

15. SATISFACTION LEVEL.

25

53

22

0

10

20

30

40

50

60

1.VERY MUCH SATISFIED 2. SATISFIED 3. DELIGHTED

PARTICULARS

PE

RC

EN

TA

GE

INTERPRETATION:

The Objective of the question is to understand the satisfaction level of the customers. Most of

the customers are satisfied with the concept of core banking. The percentage of the

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGE1.VERY MUCH SATISFIED2. SATISFIED3. DELIGHTED

255322

255322

TOTAL 100 100

65


satisfaction is 25%, 53% and 22% respectively. It states that most of the customers. The

concept can be more effective if all the customers are fully satisfied with the concept.

16. EMPLOYEE RESPONSE TOWARDS THE CONCEPT.

28

56

16

0

10

20

30

40

50

60

1.VERY GOOD 2. GOOD 3. SATISFACTORILY

PARTICULARS

PE

RC

EN

TA

GE

INTERPRETATION:

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGE1.VERY GOOD2. GOOD3. SATISFACTORILY

285616

285616

TOTAL 100 100

66


The Objective of the question is to understand the employee’s response towards customers.

Most of the customers are satisfied with the employee’s response. The percentage of the

satisfaction is 28%, 56% and 16%.

17. ANALYSIS OF PROBLEM.

37

43

20

0

5

10

15

20

25

30

35

40

45

50

1.TIME CONSUMING 2. AWARENESS 3. FLEXIBILITY

PARTICULARS

PE

RC

EN

TA

GE

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGE1.TIME CONSUMING2. AWARENESS3. FLEXIBILITY

374320

374320

TOTAL 100 100

67


Interpretation:

The Objective of the question was to know the problem that the customers of the bank are

facing with respect to core banking. This will help in analyzing the problem with the concept

of core banking and coming out with a problem solution. The percentage of the response is

37%, 43% and 20% respectively.

18) As a customer which system do prefer comfortable?

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGEa) SMS Banking b) E-banking c) R.T.G.S d)N.E.F.Te)ATM any where withdrawal f) At par cheques g) Fund transfer

295642288

295642288

TOTAL 100 100

68


2

9

5 6

42

28

8

0

5

10

15

20

25

30

35

40

45

a) SMSBanking

b) E-banking

c) R.T.G.S d)N.E.F.T e)ATM anywhere

withdrawal

f) At parcheques

g) Fundtransfer

Interpretation : The Objective of the question was to know the prefererence towards the

services of core banking . This will help in analyzing the preference with the concept of core

banking and coming out with a solution. The percentage of the response is 2%,

9%,5% ,6%,42%,28%,8% respectively.

19)

Which product do you prefer in banking?

BABASAB PATIL

PARTICULARS FREQUENCY PERCENTAGEA) S B A/C B) Super A/C C) Current A/C D) O D A/CE) F D A/C F) Gold Loans G) Agri Loans H) Auto Loans

30616876189

30616876189

TOTAL 100 100

69


30

6

16

8 7 6

18

9

0

5

10

15

20

25

30

35

A) S B A/C B) SuperA/C

C) CurrentA/C

D) O D A/C E) F D A/C F) GoldLoans

G) AgriLoans

H) AutoLoans

Interpretation: The Objective of the question was to know the product prefererence towards

the services of core banking. This will help in analyzing the product preference with the

concept of core banking and coming out with a solution. The percentage of the response is

30%, 6%, 16%, 8%, 7%, 6%, 18%, and 9% respectively.

ANALYSIS OF CASH FLOW STATEMENT OF CORPORATION BANK

The analysis of cash flow statement of corporation bank at RNR BRANCH is for 2 years.

Since bank has introduced the concept of core banking last year i.e. the analysis of 2 years of

BABASAB PATIL 70


cash flow statement helps in knowing the growth percentage of cash flow of corporation

bank, which in turn helps in knowing the effectiveness of core banking on cash flow.

Cash flow is an accounting term that refers to the amounts of cash being received and spent

by a business during a defined period of time, sometimes tied to a specific project.

Measurement of cash flow can be used

To evaluate the state or performance of a business or project.

To determine problems with liquidity. Being profitable does not necessarily mean

being liquid. A company can fail because of a shortage of cash, even while profitable.

To generate project rate of returns. The time of cash flows into and out of projects are

used as inputs to financial models such as internal rate of return, and net present

value.

To examine income or growth of a business when it is believed that accrual

accounting concepts do not represent economic realities. Alternately, cash flow can be

used to 'validate' the net income generated by accrual accounting.

CORPORATION BANK

CASH FLOW STATEMENT FOR THE YEAR MARCH 2007 AND MARCH 2006.

BABASAB PATIL 71

http://en.wikipedia.org/wiki/Net_present_value

http://en.wikipedia.org/wiki/Net_present_value

http://en.wikipedia.org/wiki/Internal_rate_of_return

http://en.wikipedia.org/wiki/Rate_of_return

http://en.wikipedia.org/wiki/Cash


(Rs. In ‘000)

(Compared to previous year there has been an increase of 43. 42% on cash flow)

LESS: Interest paid Operating expenses ProvisionsProfit on sale of fixed assetsDividend received from subsidiaries

43710184 100189829054655

8247

50000

30630925892258451290283288

062825574 44679249

ADD: depreciationProvision for contingencies

5513249054655

5966885129028

9605979 5725716

BABASAB PATIL

Particulars Year ended 31-03-2009

Year ended 31-03-2008

A. Cash flow from operating activities. 41519533 24067254

B. Cash flow from investing activities. 872197 5005797

C. Cash flow from financing activities. 1820585 1594266

D. Balances at the beginning of the year: (cash & Balances)

89158549 67191358

E. Balances at the end of the year: (cash & Balances)

F.Total cash flow during the year (a+b+c)

127985300

38826750

89158549

21969664

72


Cash flow from operations(B.T)LESS: Taxes PaidCash flow from operations(A.T)Cash flow from operating ASSETS -- AND LIABILITIES

Cash flow from operations

Cash flow from investing activitiesAddition in fixed assetsDividend from subsidies

Total

Cash flow from financing activitiesIncrease in share capitalShare premiumDividend

18558647

5540039

13018608186160656

13224627

2360807

10863820130838891

28500925 13203434 41519533 24067254

1404529532332

0

872197

00

1820585 1820585

552636468390

505797

031594269

1594266

CORPORATION BANK

CASH FLOW STATEMENT FOR THE YEAR MARCH 2007 AND MARCH 2006.

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TOTAL CASH FLOW DURING THE YEAR

24067254

872197 1594266

89158549

67191358

127985300

89158549

38826751

21967191

41519533

5057971820585

0

20000000

40000000

60000000

80000000

100000000

120000000

140000000

INTERPRETATION:

An analysis was being made on cash flow statement of corporation bank for a period of 2

years, which helps in knowing the growth percentage on cash flow after the introduction of

core banking, from the analysis it was found that there has been 43.42% increase in cash flow

as compared to previous years.

FINDINGS

BABASAB PATIL 74


Employees of the bank should be given proper training with respect to core

banking.

Customers should be educated with respect to all the benefits available with the

core banking.

The concept of core banking should be speeded up so that it saves the time of

employees & customers.

All the details with respect to core banking should be displayed at the counter hall

so that the customers come to know the procedure instead of wasting their time.

Customer meet should be held in the branch to introduce the product and its

utilization for customers as a mass practical campaign.

Detailed scheme broachers should be held at branch counters which helps the

customers to read leisurely.

Customers are very much comfortable at ATM & at-par cheques.

Customers normally prefer products like S.B account , Current account &

Agricultural loan accounts

SUGGESTIONS & RECOMMENDATIONS.

BABASAB PATIL 75


The project analysis has helped in knowing the satisfaction level of the Employees

based on the analysis it was found that majority of the employees are satisfied, the

satisfaction level could further be increased if the employees are given proper

training with respect to core banking.

An analysis was being made on cash flow statement of corporation bank for a

period of 2 years; from the analysis it was found that there has been an increase of

43.42% on cash flow as compared to previous year. The growth percentage would

further be increased if the employees of the bank are given effective and complete

training on core banking and also by educating & increasing the awareness level

of core banking to the customers of the bank.

Customers of the bank are less aware of the concept of core banking so employees

of the bank are suggested to conduct some awareness program with respected to

core banking.

Customers should be educated with respect to all the benefits available with the

core banking.

Some suggestions were given to the employees of the bank to educate & increase

the awareness among customers. The following are the details:

All the details with respect to core banking should be displayed at the

Counter hall so that the customers come to know the procedure instead

of wasting their time.

Customer meet should be held in the branch to introduce the product

and its utilization for customers as a mass practical campaign.

Detailed scheme broachers should be held at branch counters which

helps the customers to read leisurely.

CONCLUSION

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The study was conducted to understand the effectiveness of core banking cash flow of

corporation bank RNR BRANCH. To serve the state objective of the survey, the response has

been collected from employees & 100 customers of the bank & also An analysis was being

made on cash flow statement of corporation bank for a period of 2 years, which helped in

knowing the growth percentage on cash flow after the introduction of core banking, from the

analysis it was found that there has been an 43.42% increase on cash flow as compared to

previous years.

This shows that the introduction of core banking has made a significant

impact on cash flow of corporation bank at RNR BRANCH. The growth percentage would

further be increased if the employees of the bank are given effective and complete training on

core banking and also by educating & increasing the awareness level of core banking to the

customers of the bank.

Everything has been taken into account to judge the effectiveness. To

conclude with the concept of core banking has made a significant effect on cash flow of

corporation bank at RNR BRANCH.

BABASAB PATIL 77


QUESTIONNAIRE

Dear sir/madam

Name : _____________________________________________________

Address : _____________________________________________________

E-mail :_____________________________________________________

Mobile No : _____________________________ Ph No _________________

(ONLY FOR EMPLOYEES)

1. How long you have been working in this bank?

a) Since 1 year b) since 2-5 years c) More than 5 years

2. How much are you satisfied with the concept of core banking solutions?

a).Very much satisfied

b).Satisfied

c).Delighted

3. Do you believe that Core Banking Solutions is really helping customers of this Bank?

a) Yes b) No

4. Do you think that concept of core banking solutions helps in increasing the cash flow?

a) Yes b) No

5. Does the concept of core banking saves time & money of employees & customers of this bank?

BABASAB PATIL 78


a) Yes b) No

6. Which of the concepts do you feel is easier and advantage?

a) IBAS b) Core Banking Solutions?

7. Has bank given you any training program with respect to core banking?

a) Yes b) No

8. If yes how much are you satisfied with the training program?


b).Satisfied

c).Delighted

9. Does the concept of core banking solutions have any draw backs?

a) Yes b) No

10. As an Employee what problems do you face with the core banking concept?

a). Lack of Training

b). Awareness

c). Time consuming

11. Do you think there is a need to improve in the concept of core banking?

a).Yes b) No

(ONLY FOR CUSTOMERS)

12. How long you have been the customer of this bank?

a) Since 1 year b) since 2-5 years c) More than 5 years

BABASAB PATIL 79


13. Do you know that bank has introduced the concept of core banking?

a) Yes b) No

14. Did you ever use the concept of Core Banking Solutions?

a) Yes b) No

15. How much satisfied are you with the concept of core banking solutions?


b).Satisfied

c).Delighted

16. How well does the employees of the bank response to the concept?

a).Very Good

b).Good

c). Satisfactorily

17. As a customer what problems do you face with the core banking concept?

a). Time consuming

b). awareness

c). Flexibility

18) As a customer which system do prefer comfortable?

A) SMS Banking B) E-banking c) R.T.G.S

BABASAB PATIL 80


D) N.E.F.T

E) ATM any where withdrawal

f) At par cheques

g) Fund transfer

19) Which product do you prefer in banking?)

A) S B A/C b) Super A/C

c) Current A/C

D) O D A/C

E) F D A/C

F) Gold Loans

g) Agri Loans

h) Auto Loans

THANKS FOR YOUR COOPERATION

BIBILOGRAPHY

BOOKS:

BABASAB PATIL 81


M.Y.KHAN and P.K. JAIN (1981). Management Accounting, New Delhi:

Tata McGraw-HILL Publishing Company Limited.

REPORTS

Corporation bank (2009).Annual Report, Manglore.

WEB SITES

http://www.corpbank.com

http://www.google.com

http://www.encyclopedia.com

http://www.wikipedia.com

http://www.tutor2u.com

BABASAB PATIL 82

Effectiveness of core banking @ corporation bank project report

Economy & Finance

Transcript of Effectiveness of core banking @ corporation bank project report