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A
PROJECT REPORT
ON STUDY OF WORKING
SYSTEM
OF
THE B.E.S.T EMLOYEES CO- OPERATIVE CREDIT SOCIETY LTD
MASTER OF MANAGEMENT STUDIES
UNIVERSITY OF MUMBAI
SUBMITTED TO
MARATHA MANDIRS
BABASAHEB GAWADE INSTITUTE OF
MANAGEMENT STUDIES
MUMBAI CENTRAL
SUBMITTED BY
SONIYA T. BADEKAR
ROLL NO. 03
MMS / MARKETING
BATCH: 2010-2012
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STUDENTS DECLARATION
I, Soniya T. Badekar student of Masters of Management Studies ( Semester III )
of Babasaheb Gawde Institute of Management Studies ( BGIMS ), hereby declare
that I, Have successfully completed this project on 30-6-2011 as a part of my
Summer Internship.
The information incorporated in this project is true and original and best of my
knowledge.
SIGNATURE
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ACKNOWLEDGEMENT
It is my privilege to express my gratitude and respect to those who guided and
inspired me in the completion of this project. I sincerely thank ourdirector Dr.
Sunil Karve for giving me the opportunity to express myself through this project
without whom, it would not have been possible to collect and assimilate the
information on WORKING SYSTEM .
I would like to thankCHAIRMAN of THE B.E.ST EMPLOYEES CO-
OPERATIVE CREDIT SOCIETY LTD, Mr. DANSINGH RAVAT for giving me
an opportunity to be a part of their bank and learn the various aspects of banking.
This has been an overall learning experience. I would also like thank the
General Manager Mr D.C Kanulkar,Deputy General Manager Mr agnelo
fernandes,Supervisor Mrs S.S. Sonawane , Mrs D.D kadam and all other staff of the
society for giving me their constant help and support.
Finally I offer my gratitude towards my college, Babasaheb Gawde Institute
Of Management Studies and I offer my sincere thanks to all the people who
directly or indirectly helped me to prepare this project.
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Table of Content
CONTENTS PG NO.
1) EXECUTIVE SUMMARY 6
2) COMPANY PROFILE 7
a) PROFILE,OBJECTIVE & INTENTION
1) OBJECTIVE OF STUDY 8
2) INTRODUCTION TO PROJECT REPORT 9
3) BANKING SYSTEM 10
4) CONCEPT OF CO-OPERATION 12
5) CO-OPERATIVE ORGANIZATION 14
6) BRIEF HISTORY OF URBAN - 23
CO-OPERATIVE BANKS IN INDIA.
7) OBSERVATION & FINDINGS
a) AREA OF STUDY 33
b) ORGANISATION STRUCTURE 33
c) HOW FUNDS ARE RAISED 36
d) SERVICES OFFERED 37
e) MEMBERSHIP 44
f) MANAGING COMMITTEE 45
g) ELECTION RULES 47
h) ANNUAL GENERAL MEETING 48
1) DATA ANALYSIS & RECOMMENDATION
a) BUDGET FOR 2010-11 49
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b) SOCIETYS PROGRESS REPORT 51
c) PROFIT & LOSS STATEMENT 55
d) BALANCE SHEET 58
e) PROFIT DISTRIBUTION 64
1) COMPARATIVE STUDY
a) PROFILE 65
b) MANAGING COMMITTEE 67
c) MEMBERSHIP 68
d) SERVICES OFFERED 69
e) PROGRESS REPORT 69
1) METHODOLOGY USED FOR PROJECT PREPARATION 74
2) BENEFITS OF STUDY 74
3) LIMITATION OF STUDY 74
4) SUGGESTION 75
5) BIBLOGRAPHY 75
EXECUTIVE SUMMARY
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The project titled STUDY OF WORKING SYSTEM being carried out for
THE B.E.ST EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD,
COLABA ,AT MUMBAI for the time duration of two months. This project is
on study and analysis of the working system of this society, the services
offered exclusively to the members,the membership rules,the election rules,
the managing committee,the progress report,data analysis, comparative study
with seimen employees co-operative credit society ltd
THE B.E.S.T EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD
PROFILE
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THE B.E.S.T EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD was
registered in the year nov,1941 under the BOMBAY CO-OPERATIVE SOCIETIES
ACT OF 1925 registered no.8126 by the employees of B.E.S.T.
OBJECTIVES
The objects of the society are to encourage thrift by enabling members to save part of
their income in a safe and convenient way with the prospect of a fair profit,& to prevent
indebtness by making loans available on reasonable terms and to act as agent for the
joint purchase of the domestic requirement of its members.
SOCIETYS INTENTION
1) Economic & co-operativeness should increase among the members.
2) To provide loan at reasonable rate of interest.
3) To provoke the members to save some part of their salary as monthly saving
deposits & fixed deposits.
4) To give loans at low rate of interest or no interest.
5) To collect RS 15 monthly from all members salary & create a Death Benefit
Fund .
6) To have Family Welfare Schemes.
7) To open new branches wherever needed.
8) To start education institution of the societys.
Objectives of the project report:
The follows are the important objection:
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To make detailed study of the working system of The B.E.S.T EMPLOYEES
CO -OPERATIVE CREDIT SOCIETY LIMITED.
Study the establishment, growth and progress of service provided by the
society.
To study the budget,balance sheet and profit and loss statement.
To study the products and services offered to the employees of B.E.S.T
undertaking by the society.
To make a comparative study with SEIMENS EMPLOYEES CO-
OPERATIVE CREDIT SOCIETY LTD.
Introduction to project report:
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This project report entitled the credit facilities in THE B.E.S.T EMPLOYEES
CO-OPERATIVE CREDIT SOCIETY LTD. This has been brought out to know how
this society functions and the credit facilities provided by the society. This project is
also prepared to know the performance of the society.In the beginning of human
existence, needs were simple and every individual produced all that was necessary to
sustain life, he provided his own food of animal flesh and vegetable; prepared his own
clothing and found his own shelter.
After this state, barter system came into existence. Barter system means tradewith exchange of goods, with the absence of money. At this stage the concept of
dependency emerged in the routine life of the human beings. And their dependenc y
demanded co -operation that is how co - operation was born.
In course of time, people settled down in different occupations, and with
specialization, exchange of goods became wider. And the money was introduced in
trading, which was widely accepted for payment. As money started getting importance.
Co -operation was going hand in hand with it.
So, co-operation is an important thing, which plays an important role in all for
goods and services and in settlement of debts. Money is given and received without
reference to the standing of the person who offers it in payment.
According to D.H. Robertson Money is any thing which is widely accepted in
payment for goods or in discharge of other kinds of business obligations. This is the
way that money got exten ds into the co- operation.
DEFINITION OF BANKING
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In general terms, Thebusiness activity of accepting and safeguarding money
owned by other individuals and entities, and then lending out this money in order to
earn aprofit
So we can say that Banking is a company, which transacts the business of
banking. The Banking Regulations Acts defines the business as banking by stating the
essential function of a banker.
The term banking is defined as Accepting for the purpose of leading or
investment, deposits of money from the public, repayable on demand or otherwise and
withdrawal by cheque, draft, order or otherwise.
The following chart shows the working of the banking system
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Concept of co-operation
Meaning:
Co-operation means working together to accomplish the common
goal through cooperative principles.
Co-operation is much older than the mankind. Formation of social groups in
outcome of reflective co -operation, while the life of the ants, bees, wincer, etc,
provides the best examples of initiative co -operation, Right from the hunting age upto
the present ager the progress and development of human being in all spheres, social,
economics, religions and political is marked by a sense of thinking working together. In
india throughout the ages of people and the communities worked together on an
informal co-operate basis with regard to their religions, social, economic and cultural
life.
The word Co-operation is derived from the latin word Co - operari mean to
to work. In other words co-operation means to work together to achieve common
purpose. Co -operation promoter voluntarily association of individual having common
needs to combine towa rds the achievements of common economic needs. If is
recognized as a sector of business enterprise quite distinct from public sector or
private sector.
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Definition of co-operation
Co-operation has been defined by different authorities in different
ways. Some definitions are as follows\
According to C.R. Fay: From socio-economic point of view describes Co-operation is an
association for the purpose of joint trading, organizing, among the weak and conducts
always in an unselfish spirit, on such term that all who are prepared to assume the
duties of members proposition to the degree in which they make use of their association
.
B. According to Mr. Talmaki, he defined it as An association of the weak, who gather
together for common economic need and try to, if themselves and others out of
weakness into strength through business organization conducted for the common
benefit of all who join it.
C. According to professor Lambert observes. Co-operation as an enterprise formed
directed an association of uses, applying within itself the rules of democracy and
directly intended to serve both its own members and community as whole?
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Co-operative organization:
Meanings:
A co-operative organization [also referred to as a co -op] is a form of business
ownership that consists of a group of people who have j oined together to perform a
business function more efficiently than each individual could do alone. The purpose of
a co -operative organization is not to make a profit for itself. But to improve each
members situation.
However, members of certain types of co-operative organization do make a
profit by selling their product and / or service to customers who are not co-operative
organization members.
Definition:
The internal labour organization definer a co -operative as an association of
persons, usually of limited, means, who have voluntarily joined together to achieve a
common economic and together the formation of a democratically controlled business
organization making equitable contribution to the capital required and accepting a fair
share of risks and benefits of the undertaking.
According to Prof. Poul Lambert, a leading authority on co - operation state. A
co -operative society is an enterprises formed and directed by an association of users,
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applying within itself the sales of democracy and directly intended to serve both its own
members and the community as whole?
CO-OPERATIVE MOVEMENT IN INDIA:
The co-operatives are the preferred instruments of socio -economic
development. Their contribution to the national economy of the country is very
significant. In the wake of declining role of public sector and various limitations of
private sectors, relevance of co -operatives is achieving greater heights. In the emerging
environment of capitalistic form of society for their socio -economic development.
Government is also committee to provide policy support for the development of co -
operative sector in the country.
It is an acknowledging fact that the idea of co-operation was popularized in this
country through the state initiative and direction. Mr. Nicholson who was deputed to his
report provided the basis for the government to stall the co-operative movement at the
turn of the cultivations from the crushing burden of indebtedness and to faster thrift
among the masses.
Initially, the government include local will do and highly respected people to
organize co-operatives in their area. The honorary organizers who received support
from local officers. The co -operative societys acts were passed in 1904 and 1912, to
provide the necessary, legislative from the functioning of co-operative instructions. The
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co -operative departments were setup to regulate the working of societies through the
expected to be a government office different from the rest, the friend, philosophers and
guide to the movements
Gradually, the movement started diversifying its activities and vertically
integrated structure come in the field of co -operative banking, marketing, small scale
industries, consumer activities etc.
In 1919 co-operative was removed from the central list and made a provincial
(State) subject under the federal constitution. Vigorous efforts were made by the govt.
during the great depression period of the thirties to save the movement. During the IInd
world war, also the Indian co - operative movement experienced URS and down till
independence. The co-operative in india has recorded by the tardy growth, inspite of the
morale and material support provided by the government.
According to co-operative commutes, this was due to the ..faire polias.
Persuade by the government. Thus, tile down of independence the Indian co-operative
movement had come to be described has not a movement but only a government policy,
observed that Indian cultivator were provided by many lenders, thus tow above
mentioned report is called upon the state to initiate move vigorous & propose full
measurer to revitalize the entire movement. Almost by the sam e time, national
economic plan (IInd 5 years plan) was launched, in which, the recommendations of this
committee were fully incorporated.
The policy adopted immediately therefore, did not encourage a radial re-
organization of the structure but aimed at creating new condition in which co-operatives
could function more effectively for the benefits of the weak and meet the opposition of
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the listed interests. According the state become a major posture in the share capital of
co-operatives at all needs is credit processing, marketing, consumers activities etc the
government has provided aid and assistance to the co -operative societies in india in the
following manner.
1. States partnership in the share capital of co -operative societies.
2. Loan to societies
3. Subsides and grants
4. Guarantees
5. Contribution to risk fund
6. Tax concessions
7. Legal concessions and sanctions
8. Training and education
9. Help to reserve bank and other banking organization.
10. Supply of government officer on deputation.
In addition to this, researcher and surveys are conducted for the benefits of co-
operative and plans and programs are formulated for the state. Co-operative department.
During all these years of co-operative development a paternalistic attitude has
been adopted by the state, towards the co -operative it threatens to become more
pronounced, mostly under pressure of need of governments sponsorship for
expeditions development and for removal of poverty and backwardness the constitution
of india has provided guidance for the state in such away that it can take a positive
attitude for the development of co -operative sector
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Feature of co-operative organization:
Following are the features of co-operative organization.
1) Voluntary Association: A co-operative society is a voluntary of persons not of capital.
Any of person irrespective of sex, creed, caste, etc can join the society of his wish and
he can leave it at any time after giving the notice to society. While leaving he has to
withdraw his amount and he it not suppose to transfer the amount on other persons.
2) Source of finance: The capital of co -operative society is raised from the members by
way of share capital since co -operatives are organized by relatively weaker section of
society, the share capital is limited.
3) Control and Management: Democ racy is the Keynote of the management of the co
-operative society since most of these societies operates on a local scale, the meetings of
the member are generally well attended. Al time of meetings the members select the
managing committee and lay down the policy which it must follow to promote their
common interest, each member, what ever be his state in society, has one vote and
hence an equal rights to participate in the management of society. Members cannot vote
by proxy. Beside the organization the organization and control of a co-operative society
may be carried on by 2 member working in different capacity and outsiders may be
employed only when the society grows too large.
4) Service motive: A co-operative society is organized primarily with the object of
rendering maximum service to its members in certain field. It doesnt aim at the cost of
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its members for it is formed basically for providing certain essential facilities to
members.
This doesnot mean that a co -operative society will have work for profit. It is quite
usual for society to earn profit by extending their service to max-members.
5) Disposal of surplus: It is usual for commercial concern to distribute profits among the
owners in the ratio of their capital distribution or in agreed ratio. A co-operative society
differs from trading co. in this respect. Under the co -operative form of ownership and
organization, surplus arising of a year working is given to the members not directly or
divided on share held by each of them. But in the form of a bonus which need not be
proportionate to their respective capital contribution.
6) Fixed return on capitals: The fixed or limited return on capital subscribed to the
society must be paid out of the surplus to the members. Making payment of fixed
interest or paid up capital definitely a first charge on the trading surplus, of all those
who joined the society a solid reason for leaving their savings in deposits with it.
7) State control and co-operative status: Although voluntary in their basic character the
co -operative society are subject to considerable state control and supervision. In india
the co -operative society act as the case may.
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TYPES OF CO-OPERATIVE SOCIETIES.
Co-operatives may be formed basically in any work of life. Some of them concern
themselves with the moral and social uplift of a decreased or weak section of the
society. White quite many of them combine some business activities with service to
their memb ers. Since business are being consider here as a force of business
organization only there societies which are concern with business purpose need on
introduction here the principal types of co -operatives are as enumerated below;
1) CONSUMERS CO-OPERATIVE SOCIETY
2) PRODUCERS CO- OPERATIVE SOCIETY.
3) MARKETING CO-OPERATIVE SOCIETY.
4) HOUSING CO-OPERATIVE SOCIETY.
5) CO-OPERATIVE CREDIT SOCIETY.
6) CO-OPERATIVE SOCIETY FORMING SOCIETIES.
1. CONSUMERS CO-OPERATIVE SOCIETY;
These societies are formed by the ordinary people for obtaining their day-to-day
requirements of goods at cheaper prices. For this purpose, consumers co-operative
stores are recognized by such societies these societies make their purchase in balk form
whol esales at wholesale rates and sell the goods to member at market price. The
difference is presented by the surplus which is distributed among the purchasing
members in the form of .on purchases. This is the oldest form of co-operative
organization.
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2 . PRODUCERS CO-OPERATIVE SOCIETY;
It is also called as industrial co-operatives societies are voluntary association of
small producers formed with the object of eliminating the capitalist form the
system of industrial production. Some timers consumers societies may join
hands with the association or producers. In such a case the firm co-operative
societies is used for societies of this type. These societies produce goods for
meeting the requirements of the consumers, sometimes thus production may
be disposed of to outsiders at a profit being, distributed among the producers after
marketing agreed percentage for welfare and general purpose.
3. MARKETING CO-OPERATIVE SOCIETY;
The marketing co-operative society or the co-operative sales societies are voluntary
association of independent producers organized for the purpose of arranging for the sale
of their output. As the central sale agency for a member of producers a marketing co
-operative quite after performs such important function of marketing as, processing and
grading of the produce delivered by the individual producers. According to their
contribution to the pool. Societies of these kinds are particularly useful for agriculture,
small producers and artesians.
4. HOUSING CO-OPERATIVE SOCIETY:
Housing co-operatives are the association of persons who are interested either in
recurring dealership of a hours or obtaining accommodation at fair and reasonable rent
such societies are formed in urban areas. Mostly intending, builders of hours join
together to form co-operatives of this kind. Through, there societies they can secure not
merely financial assistance but also the economics of purchase of building materials in
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bulk the membership of such a society may be thrown open to all those who are already
to deposit money in the society for interest. Each member has to buy atleast one share
and the liability is generally limited to his contribution.
5. CO-OPERATIVE CREDIT SOCIETY;
The co-operatives credit societies are voluntary associated of the people with moderate
means formed w ith the object of extending short term financial accommodation to
them and developing the habit thrift among them the funds of these societies consists if
share capital contributed by the members the liabilities of the members are in generally
unlimited this helps the society in rising funds from outsiders and ensure that every
members shows keen interest in the working of the society in granting loans the society
may show consideration for the poor people who apply for smalls loans. Besides loans
may generally be granted only for productive purpose the society may or may not ask
for security of immovable property while making loans, the rate of interest charged in
borrowing members is kept as low as possible.
C redit facilities may be divided in to two types they are:
A. AGRICULTURE CREDIT SOCIETY : They generally connect its activities
to a particular village providing loans for agriculture purposes.
B. NON AGRICULTURE CREDIT SOCIETY: These societies are meant to
provide bank accommodation to the members and may be formed by a small
artisans in towns and try office clerks mill workers etc in cities.
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Brief History of Urban Cooperative Banks in India
The term Urban Co-operative Banks (UCBs), though not formally defined, refers to
primary cooperative banks located in urban and semi-urban areas. These banks, till
1996, were allowed to lend money only for non-agricultural purposes. This distinction
does not hold today. These banks were traditionally centred around communities,
localities work place groups. They essentially lent to small borrowers and businesses.
Today, their scope of operations has widened considerably.
The origins of the urban cooperative banking movement in India can be traced to the
close of nineteenth century when, inspired by the success of the experiments related to
the cooperative movement in Britain and the cooperative credit movement in
Germany such societies were set up in India. Cooperative societies are based on the
principles of cooperation, - mutual help, democratic decision making and open
membership. Cooperatives represented a new and alternative approach to organisaton
as against proprietary firms, partnership firms and joint stock companies which
represent the dominant form of commercial organisation.
The Beginnings
The first known mutual aid society in India was probably the Anyonya Sahakari
Mandali organised in the erstwhile princely State of Baroda in 1889 under the
guidance of Vithal Laxman also known as Bhausaheb Kavthekar. Urban co-operative
credit societies, in their formative phase came to be organised on a community basis
to meet the consumption oriented credit needs of their members. Salary earners
societies inculcating habits of thrift and self help played a significant role in
popularising the movement, especially amongst the middle class as well as organized
labour. From its origins then to today, the thrust of UCBs, historically, has been to
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mobilise savings from the middle and low income urban groups and purvey credit to
their members - many of which belonged to weaker sections.
The enactment of Cooperative Credit Societies Act, 1904, however, gave the real
impetus to the movement. The first urban cooperative credit society was registered in
Canjeevaram (Kanjivaram) in the erstwhile Madras province in October, 1904.
Amongst the prominent credit societies were the Pioneer Urban in Bombay
(November 11, 1905), the No.1 Military Accounts Mutual Help Co-operative Credit
Society in Poona (January 9, 1906). Cosmos in Poona (January 18, 1906), Gokak
Urban (February 15, 1906) and Belgaum Pioneer (February 23, 1906) in the Belgaum
district, the Kanakavli-Math Co-operative Credit Society and the Varavade Weavers
Urban Credit Society (March 13, 1906) in the South Ratnagiri (now Sindhudurg)
district. The most prominent amongst the early credit societies was the Bombay
Urban Co-operative Credit Society, sponsored by Vithaldas Thackersey and Lallubhai
Samaldas established on January 23, 1906..
The Cooperative Credit Societies Act, 1904 was amended in 1912, with a view to
broad basing it to enable organisation of non-credit societies. The Maclagan
Committee of 1915 was appointed to review their performance and suggest measures
for strengthening them. The committee observed that such institutions were eminently
suited to cater to the needs of the lower and middle income strata of society and
would inculcate the principles of banking amongst the middle classes. The committee
also felt that the urban cooperative credit movement was more viable than agricultural
credit societies. The recommendations of the Committee went a long way in
establishing the urban cooperative credit movement in its own right.
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In the present day context, it is of interest to recall that during the banking crisis of
1913-14, when no fewer than 57 joint stock banks collapsed, there was a there was a
flight of deposits from joint stock banks to cooperative urban banks. Maclagan
Committee chronicled this event thus:
As a matter of fact, the crisis had a contrary effect, and in most provinces, there was
a movement to withdraw deposits from non-cooperatives and place them in
cooperative institutions, the distinction between two classes of security being well
appreciated and a preference being given to the latter owing partly to the local
character and publicity of cooperative institutions but mainly, we think, to the
connection of Government with Cooperative movement.
Under State Purview
The constitutional reforms which led to the passing of the Government of India Act in
1919 transferred the subject of Cooperation from Government of India to the
Provincial Governments. The Government of Bombay passed the first State
Cooperative Societies Act in 1925 which not only gave the movement its size and
shape but was a pace setter of cooperative activities and stressed the basic concept of
thrift, self help and mutual aid. Other States followed. This marked the beginning of
the second phase in the history of Cooperative Credit Institutions.
There was the general realization that urban banks have an important role to play in
economic construction. This was asserted by a host of committees. The Indian Central
Banking Enquiry Committee (1931) felt that urban banks have a duty to help the
small business and middle class people. The Mehta-Bhansali Committee (1939),
recommended that those societies which had fulfilled the criteria of banking should be
allowed to work as banks and recommended an Association for these banks. The Co-
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operative Planning Committee (1946) went on record to say that urban banks have
been the best agencies for small people in whom Joint stock banks are not generally
interested. The Rural Banking Enquiry Committee (1950), impressed by the low cost
of establishment and operations recommended the establishment of such banks even
in places smaller than taluka towns.
The first study of Urban Co-operative Banks was taken up by RBI in the year 1958-
59. The Report published in 1961 acknowledged the widespread and financially sound
framework of urban co-operative banks; emphasized the need to establish primary
urban cooperative banks in new centers and suggested that State Governments lend
active support to their development. In 1963, Varde Committee recommended that
such banks should be organised at all Urban Centres with a population of 1 lakh or
more and not by any single community or caste. The committee introduced the
concept of minimum capital requirement and the criteria of population for defining
the urban centre where UCBs were incorporated.
Duality of Control
However, concerns regarding the professionalism of urban cooperative banks gave
rise to the view that they should be better regulated. Large cooperative banks with
paid-up share capital and reserves of Rs.1 lakh were brought under the perview of the
Banking Regulation Act 1949 with effect from 1st March, 1966 and within the ambit
of the Reserve Banks supervision. This marked the beginning of an era of duality of
control over these banks. Banking related functions (viz. licensing, area of operations,
interest rates etc.) were to be governed by RBI and registration, management, audit
and liquidation, etc. governed by State Governments as per the provisions of
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respective State Acts. In 1968, UCBS were extended the benefits of Deposit
Insurance.
Towards the late 1960s there was much debate regarding the promotion of the small
scale industries. UCBs came to be seen as important players in this context. The
Working Group on Industrial Financing through Co-operative Banks, (1968 known as
Damry Group) attempted to broaden the scope of activities of urban co-operative
banks by recommending that these banks should finance the small and cottage
industries. This was reiterated by the Banking Commisssion (1969).
The Madhavdas Committee (1979) evaluated the role played by urban co-operative
banks in greater details and drew a roadmap for their future role recommending
support from RBI and Government in the establishment of such banks in backward
areas and prescribing viability standards.
The Hate Working Group (1981) desired better utilisation of banks' surplus funds and
that the percentage of the Cash Reserve Ratio (CRR) & the Statutory Liquidity Ratio
(SLR) of these banks should be brought at par with commercial banks, in a phased
manner. While the Marathe Committee (1992) redefined the viability norms and
ushered in the era of liberalization, the Madhava Rao Committee (1999) focused on
consolidation, control of sickness, better professional standards in urban co-operative
banks and sought to align the urban banking movement with commercial banks.
A feature of the urban banking movement has been its heterogeneous character and its
uneven geographical spread with most banks concentrated in the states of Gujarat,
Karnataka, Maharashtra, and Tamil Nadu. While most banks are unit banks without
any branch network, some of the large banks have established their presence in many
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states when at their behest multi-state banking was allowed in 1985. Some of these
banks are also Authorised Dealers in Foreign Exchange
Recent Developments
Over the years, primary (urban) cooperative banks have registered a significant
growth in number, size and volume of business handled. As on 31st March, 2003
there were 2,104 UCBs of which 56 were scheduled banks. About 79 percent of these
are located in five states, - Andhra Pradesh, Gujarat, Karnataka, Maharashtra and
Tamil Nadu. Recently the problems faced by a few large UCBs have highlighted
some of the difficulties these banks face and policy endeavours are geared to
consolidating and strengthening this sector and improving governance.
Source: Adapted from a paper by O.P. Sharma, formerly of the History Cell
ORGANISATION AND WORKING OF CREDIT CO-OPERATIVE SOCIETY
The primary co-operative credit society is supposed to be an Association of
borrowers and non-borrowers who, residing in a locality know each other and take
interest in one another. Membership of the society is opened to any person in the
locality provided his membership is approved by the fellow members. While admitting
a new persons his character (regardless or caste and creed) is taken into account this is
supposed to faster the spirit of co-operation and mutual help among members. A group
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of people comes together and forms the credit society where every persons knows a
practically every other person of locality, the idea behind this is to facilities granting of
loan to really needy person and effective specification of the use of loan given.
. This is because it is on the foundation of basic unite established at the group
level that the entire foundation of co- operative credit structure is erected and because,
It is the primary co-operative credit structure is erected which comes in direct contact
with the members giving them loan and collecting repayment of loans from them.
In case of primary credit co-operative society members contribute to share
capital, each members is required to purchase a minimum number of shares. It is also
laid down that no member would hold share beyond a maximum nor of shares pres
gribed & each member has only one vote for the purchase of electing official to various
post in society, irrespective number of shares the member holds. Thus is meant to
ensure democratic management. And control of primary society. These shares are also
exempted from attached by court of any dues in civil suit or in insolvency proceedings
the liability of members is unlimited.
As regards, administrated of primary co-operative credit societies, there is general
body consisting of members of society. General body elects annually the president or
chairman, secretary and other members of management who all work in honorary
capacity. Generally the accountant is a paid employee of the society.
Advantages of Co-operative Society
A Co-operative form of business organisation has the following advantages:
i. Easy Formation: Formation of a co-operative society is very easy compared to a
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joint stock company. Any ten adults can voluntarily form an association and get it
registered with the Registrar of Co-operative Societies.
ii. Open Membership: Persons having common interest can form a co-operative
society.
Any competent person can become a member at any time he/she likes and can
leave the society at will.
iii. Democratic Control: A co-operative society is controlled in a democratic
manner.
The members cast their vote to elect their representatives to form a committee that
looks after the day-to-day administration. This committee is accountable to all the
members of the society.
iv. Limited Liability: The liability of members of a co-operative society is limited to
the
extent of capital contributed by them. Unlike sole proprietors and partners the
personal
properties of members of the co-operative societies are free from any kind of
risk because of business liabilities.
v. Elimination of Middlemens Profit: Through co-operatives the members or
consumers
control their own supplies and thus, middlemens profit is eliminated.
vi. State Assistance: Both Central and State governments provide all kinds of help to
the societies. Such help may be provided in the form of capital contribution, loans at
low rates of interest, exemption in tax, subsidies in repayment of loans, etc.
vii. Stable Life: A co-operative society has a fairly stable life and it continues to exist
for
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a long period of time. Its existence is not affected by the death, insolvency, lunacy or
resignation of any of its members.
.
Limitations of Cooperative Society
Besides the above advantages, the co-operative form of business organisation also
suffer from various limitations. Let us learn these limitations.
Co-operative Society
99
i. Limited Capital: The amount of capital that a cooperative society can raise from its
member is very limited because the membership is generally confined to a particular
section of the society. Again due to low rate of return the members do not invest
more capital. Governments assistance is often inadequate for most of the co-
operative
societies.
ii. Problems in Management: Generally it is seen that co-operative societies do not
function efficiently due to lack of managerial talent. The members or their elected
representatives are not experienced enough to manage the society. Again, because of
limited capital they are not able to get the benefits of professional management.
iii. Lack of Motivation: Every co-operative society is formed to render service to its
members rather than to earn profit. This does not provide enough motivation to the
members to put in their best effort and manage the society efficiently.
iv. Lack of Co-operation: The co-operative societies are formed with the idea of
mutual
co-operation. But it is often seen that there is a lot of friction between the members
because of personality differences, ego clash, etc. The selfish attitude of members
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may sometimes bring an end to the society.
v. Dependence on Government: The inadequacy of capital and various other
limitations
make cooperative societies dependant on the government for support and patronage
in terms of grants, loans subsidies, etc. Due to this, the government sometimes
directly interferes in the management of the society and also audit their annual
accounts.
Area of study:
THE B.E.S.T EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD is
located at colaba,electric house is selected and their information about the the working
of the society functioning are collected.
The project report aimed at giving analysis on credit facilities in general and
analysis of society from a summer trainees point of view.
THE B.E.S.T EMPLOYEES CO-OPERATIVE CREDIT SOCIETY LTD
A)A Profile
B) Source of Fund
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C) Lending of the Society
D) Management of the Society
E) Progress of the Society
ORGANISATION STRUCTURE
COMMITTEE MEMBERS
CHAIRMAN - MR. DANSINGH RAWAT
VICE CHAIRMAN- MRS APURVA PARAB
TREASURER-MR VIVEK GHOLAP
SECRETARY-PRAVIN KUMAR CHAUDHARY
OTHER COMMITTEE MEMBERS
MR NARESH THAKUR
MR S N KAMBLE
MR SHAHANVAZ SHAIKH
MR DINESHPRATAP R.SINGH
MR. INDRABAHADUR R. YADAV
MR KANAYYALAL SINGH
MR. SYAM SHINDE
MR CHANDRAKANT CHILE
MR ARUN BODKE
ME RAJHANS TIKAM
MR JOSWA FERNANDES
MR PANDARINATH J. BHOR
MR ANIL J. JADHAV
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MRS VARSHA NAVLE
MR SHANKAR THORAT
MR UTTAM V. PADMIRE
MR SUDESH MASKAR(UNION REPRESENTATIVE)
AUDITORS
Internal auditor MR KAMAT & CO.
Government auditor-MR MALI & CO.
REGISTERED OFFICE (19/11/1941)
The b.e.s.t employees co-operative credit society ltd
Transport house,shaheed bhagat singh path,
Colaba mumbai-400039
HEAD OFFICE( 19/11/1941)
The b.e.s.t employees co-operative credit society ltd
3rd floor,parivahan bhavan,
Shaheed bhagat singh path,
Colaba mumbai-4000001
REGIONAL OFFICES
ANIK (1/4/1999)
MULUND(1/8/2000)
OSHIWARA(aug 1999)
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MAJAS (8/8/2001)
Total no. of staff
Officers -8
Supervisers -10
Clerk -27
Writer -4
Daftary -1
Sorter -2
Peon -5
FUNDS ARE RAISED BY FOLLOWING WAYS
By subscriptions and shares
by loans and deposits from members
by donations and entrance fees
from profit division
loan from MUMBAI DISTRICT CENTRALISED CO-OPERATIVE
BANK
loan from MAHARASHTRA STATE CO-OPERATIVE BANK
Loan from SHIKHAR BANK
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A. The capital of the society shall not exceed RS 50,00,00,000/-divided into
50,00,000 shares of RS 100 each to be paid for on allotment in full or by
monthly installments.
B. Loans and deposits from members for fixed periods or upon current account at
such rates of interest and to such an amount as may be determined by the
managing committee may be received provided that the total of loans and
deposits shall not at any time exceed eight times the paid up share capital plus
the reserve fund and building fund if any, and minus accumulated losses.
C. The funds of the society, when not employed in the bussiness of the
society,should be invested or deposited in the societys normal dues or for the
purpose of building or buildings for its use with the previous sanction of the
registrar.
SERVICES OFFERED
I. Monthly saving deposits.
II. Fixed deposits.
III.Loan against fixed deposits.
IV. Personal loan.
V. Education loan.
VI. Short term loan/Top up loan(consumer loan).
VII.Shares.
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Monthly saving deposits
1) Monthly saving deposit account can be opened by who have taken the
membership of the society.
2) RS 500/- every month is deducted from the salary of the members and
transferred to monthly saving deposit account.
3) No member shall be permitted to withdraw any sum from the monthly saving
deposit account except at the time of cessation of his membership as laid down
in the bye laws.
4) A loan may be granted to a member at the discretion of the managing
committee against the security of his monthly saving deposit account subject to
the following provision:
i. A loan shall not exceed RS 4,00,000.
1) Once cessation of membership the amount standing to the credit of a member to
the monthly saving deposit account will be refunded to him/her or in case of the
members death to his nominee .
2) The rate of interest shall be decided by the managing committee.
3) The rate of interest is 8% per annum.
FIXED DEPOSIT ACCOUNT
1) The minimum amount to be received in the fixed deposit shall be RS
1000 or multiple of RS 1000.
2) Fixed deposit shall be not less than 30 days and more than 5yrs.
3) The rate of interest shall be determined by the managing committee
from time to time but not less or more than as prescribed by the mumbai
district central co-operative bank.
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4) In the expiration of the term of deposit interest shall cease.
5) If the depositor ceases to be a member of the society the sum deposited
together with the interest due to pay there on upto the date of cessation
of membership shall be refunded to the depositor irrespective of the
terms of deposits.
Fixed deposit terms and rate of interest.
3 years 8%
1 year 8.50%
6 month 7.50%
Pre Mature days and interest rate
0-30 days no interest
30-180 days 3.5%
180-365 days 6%
366 & above 7.5%
LOAN AGAINST FIXED DEPOSIT
Loan against fixed deposit is given on the 80% of the principle amount of the fixed
deposit.
The rate of interest of loan against fixed deposit is 1% more than the rate of fixed
deposit.
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LOAN
I. Loan shall be made only to the members of the society. Application shall be
prescribed form approved by the managing committee & shall be accompanied
by a true statement of applicants indebtness,if any.Application shall be dealth
with in order of receipt by the managing committee who may either grant the
same or any portion of them on such terms and condition consistent with the bye
laws as they may think fit or may refuse the same without being under
obligation to assign any reason for doing so.
II. A loan may be granted to any member of 50% of his basic plus dearness
allowance subject to a maximum limit of RS 5,00,000.
III. A member shall not be allowed to borrow a fresh loan unless he has repaid 30%
of his previous loan.
IV. In addition to the limit of individual borrowing,a member can offer as a surety
in not more than 4 cases.
V. Loan shall ordinarily be repayable in monthly installments not exceeding 84 in
nos.
VI. But the committee have authority to extend repayment over a longer period
limited to 120 months .
VII.A borrower may pay off the whole or balance of the loan due with interest
thereon at any time occurrence of the loan.
VIII. When a person who stood as surety for the loan dies or ceases to be in the
service of the B.E.S.T or of the society or becomes in the opinion of the
managing committee unfit to be surety, the managing committee may require
the borrower to find another approved surety within 2 months.
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IX. It the duty of the managing committee to take action for the recovery of
overdues of loans.
X. In case of death of the person who took the loan the loan shall be recovered
from the saving & shares & still any recovery left than shall be deducted from
the salary of the surety
PERSONAL LOAN
Personal loan will be granted above RS 1,00,000 RS 4,00,000 to the members of the
society who have completed 1 yr of membership.
The repayment duration is maximum for 120 months.The installment and the interest
amount is deducted directly from the salary of the employees.
Surety is needed to be given by the members of society according to the loan amount
and the surety should also be the member of the society its as fallows:
Loan amount Surety
Above RS 1,00,000 2
RS 2,00,000 RS 3,00,000 3
RS 3,00,000 RS 4,00,000 4
SHORT TERM LOAN
Short term loan is granted to the members of the society who have completed 1yr of
membership with the society.
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The repayment duration is maximum for 120 months.The installment and the interest
amount is deducted directly from the salary of the employees.
Short term loan RS 10,000 RS 1,00,000 is granted.
1 surety is needed with the loan application of the member.the surety should be the
member of the society.
EDUCATION LOAN
Education loan id granted to the members of the society whose children are pursuing
higher education like MBA,ICWA,CA,ENGINEERING ETC.
The education loan limit is RS 5,00,000.
The repayment duration is maximum for 120 months.The installment and the interest
amount is deducted directly from the salary of the employees.
Loan amount Surety
Above RS 1,00,000 2
RS 2,00,000 RS 3,00,000 3
RS 3,00,000 RS 4,00,000 4
RS 4,00,000 RS 5,00,000 5
INTEREST ON LOAN
1. The rate of interest on loans shall be at 11.50% p.a for all types of loan..Loans
taken before the 16th of a month will bear interest for the full month & on or
before the 16th of the month, interest will be charged for half of that month . the
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rate of interest be varied by the managing committee but it shall not be less than
9% and more than 15%.
2. A penal interest @ 2% p.a will be charged in addition to the ordinary interest on
all repayment of loans from the date of default, if not paid within 15 days from
the due date.
SHARES
1) In addition to the shares purchased from the monthly subscription, any member
is at liberty to apply to the managing committee for further shares & to pay
them in single cash payment or through monthly subscription of RS 100 or its
multiple till his holding of shares capital reached to RS 20,000 .
2) Maximum shares 200 shares@ RS 100.
3) A member may transfer his shares after holding them for 1 year to another
member with the approval of the managing committee . The transfer is not
complete until the name of the of the transferee has been entered in the shares
transfer register & such fee as the managing committee may prescribe has been
paid.
4) Shares certificate bearing distinctive no. shall be issued for shares.
5) In the death of the member the value of the shares not exceeding its paid up
value standing to his credit by way of shares or dividends or subscriptions shall
subject to deduction on account of his liabilities be paid to the person nominated
by him or in the absence of such person as may appear to the committee to be
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entitled to receive the amount as heir or legal representative of the deceased
member on his executing a deed of indemnity of the society.The deposits of the
deceased may be withdrawn by such person only if the period of deposits has
expired.
6) The rate of dividend on the shares may be decided by the managing committee
in the annual general meeting.
MEMBERSHIP
1) He is permanently employed in the BOMBAY MUNICIPALITY, B.E.S.T
undertaking or in this society.
2) Have completed atleast 1 year of membership.
3) He is not grossly addicted to alcoholic to drink or drugs.
4) His written application for membership has been approved by an absolute
majority of the managing committee.
5) He has paid an entrance fees of RS 10.
6) He has purchased atleast 1 share or paid monthly subscription under the bye
laws.
7) He gives in writing an irrevocable authority to the disbursing officers to recover
his dues from pay bills.
WHEN A PERSON CEASES TO BE A MEMBER .
1) On death.
2) When his resignation is accepted by the managing committee.
3) On expulsion.
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4) On the transfer or forfeiture of all the shares held by him.
5) When he ceases to be in the permanent employment of the Bombay
Muncipality,B.E.S.T undertaking or of this society.
RIGHTS OF THE MEMBER
1) From the day they are the member of the society, they can use their rights.
2) They can take part in the working of the society.
3) They can stand in the election of the society & also have the rights to vote in the
election.
MANAGING COMMITTEE
The managing committee shall have 20 members.
President 1
Vice- president 1
Secretary 1
Treasurer 1
16 other members.
1) The election of the managing committee members shall be held at the
end of every 5 years.
2) In the absence of the chairman, the vice chariman shall take the chair or
failing him the member of the committee present shall elect 1 of the
member to be the chairman of the meeting.
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3) Every question of a meeting of the committee shall be decided by the
majority of votes incase of equal votes, the chairman shall have a casting
votes.
POWERS OF THE MANAGING COMMITTEE
1) To admit members.
2) To appoint,suspend,dismiss or fine the secretary and/or treasurer & all
salaried servants of the society & to fix the remuneration.
3) To hear &deal with the complaints.
4) To deal with the application of loans ,for which purpose a loan sub
committee may be appointed .but all the loans so sanctioned shall be
confirmed by the managing committee.
5) To supervise & check the account.
6) To enquire into & take actions in case of default.
7) To prepare annual statement of accounts.
8) To raise loans & deposits on such terms as may be decided upon.
9) To institute,defend or compromise on legal proceedings.
10) To open an account or accounts for the deposits of the society s fund in
any bank or banks approved by the registrar and to authorise of the
managing committee joining or the secretary & one member of the
managing duly authorised as above jointly to sign cheques drawn upon
that account or accounts as may be laid down in resolution.
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11) To purchase,endorse,sell,transfer or otherwise deal with government
securities & other securities & shares on behalf of the society & to
delegate powers in their respect by written resolution to 2 or more
members of the managing committee.
12)To start provident fund or any other welfare schemes or schemes for the
benefits of the employees of the society & such provident fund or
welfare scheme or scheme and shall be governed in according with the
rules framed by the managing comittee & approved by the assistant
registrar.
13) To do all such acts as are incidental to or which the managing committee
may think conducive to the attainment of the objective of the society.
ELECTION RULES
1) The candidates who is eligible to stand in the election are the members
of the societys.
2) A list of voters shall be prepared as on the closing day of every co
operative year.Members admitted after that date shall not participate in
the election.
3) No member shall nominate more than 11 candidates for manging
committee.
4) The nomination shall be received by the secretary or in his absence by
the person who carries on the secretarys duties for the time being.
5) The committee shall scrutinize all the nomination.If any nomination are
rejected,the committee will communicate the facts to the nominators or
nominees.
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6) The list of the valid nominations shall be hung up on the notice board.
7) Voting shall be by ballot.
8) 1 or more polling rooms will be arranged for the elctions by the
managing committee where shall be 1 or more polling officers for each.
9) Counting of votes shall be done by the scrutineers who shall be
appointed by the managing committee & the results will be announced
by the chairman at the annual general meeting.
ANNUAL GENERAL MEETING.
1) According to the MAHARASHTRA CO OPERATIVE SOCIETY ACT
1960 RULES 1960 RULES 1961 the annual general meeting may be
conducted.
2) The annual general meeting shall be held within a period of 3 months from
the date of closing of the year fixed under the rules.
3) The functions of the annual general meeting are,
i. To appoint persons to audit the accounts of the society during the ensuing
year & to fix their remuneration.
ii. To receive from the managing committee the balance sheet of the last year
& to sanction the distribution of the profits.
iii. To consider any communication or audit memorandum that may have been
received from the registar or any other bussiness duly brought forward.
iv. To confirm the minutes of the previous general meeting.
v. To sanction the estimated budget statement.
vi. To decide rate of dividend on the shares .
vii.To discuss upon any important issue of th society.
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viii.Special genral meeting to be called at any time by the president or by the
majority of the managing committee & shall be called within 1 month. On a
requisition in wirting of 1/5th of the members of the society.
ix. In case of annual general meeting 14 days notice & in case of special
general meeting 7 days notice shall be given.
x. The president or the chairman of the meeting shall have a casting vote in
addition to his ordinary vote.
xi. Every member shall have 1 vote irrespective of the no. of shares held by
him.
xii.2/5th of the total no. of members or 25 (whichever is less) shall form a
quoram at the general meeting.
BUDGET FOR 2010 11
2009-10 Expenditure 2009-10 2010-11 2009-10 Income 2009-10 2010-11Estimated Actual Estimated Estimate
d
Actual Estimated
450000000 Interest
payable
39,84,77,731.23 45,00,00,000 51,00,00,
000
Investment
on loans
49,49,89,386.5
0
53,00,00,000
2,00,00,000 Establishment
charges
1,75,76,755.60 2,00,00,000 2,00,00,0
00
Investment
&
miscellaneo
us
3,93,57,330 4,00,00,000
20,00,000 Stationery &
printing
21,65,375.00 25,00,000
32,00,000 Audit fees 25,16,666.00 25,00,000
5,00,000 Depreciation 14,72,150.96 15,00,00030,00,000 Contingencies 29,13,938.00 32,00,000
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1,01,000 Provisions 8,32,000.00 10,00,00011,99,000 Surplus 10,76,11,890.
71
8,93,00,000
otal
,00,00,000 5,33,56,65,07
5
57,00,00,00
0
53,00,00
,000
53,43,46,713.
50
57,00,00,000
The following estimated budget statement for the financial year 2009-10 and the
actual expenditure and income for the same financial year .There is also the estimated
budget expenditure and income for the financial year 2010-11.As we can from the
above figure the the interest of loans payable and the investment on loans in higher
than any other expenditure or income.The surplus expected for the year 2009-10 was
RS 5,11,99,000 and the actual surplus was double than the expected was RS
10,76,11,890.71.The estimated provisions for the year 2009-10 was RS 1,01,000 but
the actual provision made was RS 8,32,000 which means 8 times more than what was
estimated had to be kept as provisions .So the provision estimated for the financial
year is RS 10,00,000.The depreciation estimated for the financial year 2009-10 was
RS 5,00,000 and actual was RS 14,72,150.96 so the depreciation estimated for the
year 2010-11 is RS 15,00,000.As we can see the surplus have increased because the
only source of income is income from investment.
SOCIETYS PROGRESS REPORT
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SHARE CAPITAL
The issued & subscribed share capital of the society at the close of the year under
report was RS 26,97,65,750 (2008-09) as against RS 26,75,66,401(2009-10).
MEMBERSHIP
During the financial year 2008-09 38147 members were there. 991 members retired
,expired & by some other reasons the members declined.In the financial year 2009-10
34 new members were registered & the membership became 37190
DEPOSITS
In the last 3 year the following was the deposits.
2008 2009 2010
Fixed deposits 2182.28 1411.61 942.10
Monthly saving deposits 19822.19 22238.55 14818.50
Staff savings fund 2.97 2.31 2.05
LOANS
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The members should not take loans from other commercial banks at a higher rate of
interest & their economic conditions should be stable.So for this the society gives
loans to the members of the society.The loan limits have been increased to RS
3,50,000.In the financial year 2009-10 the society have given loans to 3729 members
of RS 65,13,12,990 in this amount the loan the loan of the committee members ( as
worker member) loan of RS 50,08,082 and from workers RS 1,18,60,350 is to be
come.Societys ex-members 1342 have overdues of RS 12,25,28,499 to be recovered.
HIGHER EDUCATION LOAN
Higher education loans are given to the students wgo are pursiung higher education
like ENGINEERING,MBA,CA OR ICWA ETC.This loans is given exclusive to the
children of the members who are pursuing higher education and the limit have been
extended to RS 5,00,000.The rate of interest would be charged 1% less than the
personal loan rate of interest.
OVERDRAFTS
To meet the heavy demands for loans from the members the committee had to resort
for overdraft accommodation from the mumbai district co operative bank at
11.50%.At the end of the year the total amount due in regards is RS 10,34,38,203.60
for the financial year 2009-10.Interst to be given to the mumbai district co operative
bank is RS 1,89,63,78,944.
MONTHLY SAVING FUND.
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In this fund at the end of the financial year 2009-10 was RS 1,48,18,50,086.20 is
collected from the co operative officers and the worker members.The interest given is
8% per annum.
OTHER FUNDS
Reserve fund is 25% which is RS 22,22,94,738.60 of which
dividend equalisation fund is RS 2,95,000
Bad debts fund is RS 18,01,000
Building fund is RS 14,53,,03,000
Charity is RS 72,26,999
RETIRED MEMBERS MEET
To the retired members a coupon of RS 2500 is given as gift voucher.In this financial
year 2009-10 1098 members have retired & gift voucher of RS 24,97,000 is given.
SOCIAL CAUSES
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Health financial help is given to 121 members of RS 1,38,450 for the financial year of
2009-10.
MENTALLY RETARDED FUND
For the financial year 2009-10 every month a sum of RS 300 is given to the members
of the society of whose any of the relative is suffering from mentally retardation.the
financial of RS 5,12,000 is given in the year 2009-10.
DEATH BENEFIT FUND
Death benefit fund have been increased from RS 75,000 to RS 1,00,000 which is
given as a financial aid to the family of the expired members.A sum of RS 15 is
deducted from the salary of the members and deposited into the death
benefit fund account.
INVESTMENTS
Till 31/3/2010 in the other banks share capital of RS 5,18,62,000 and interest of RS
25,47,11,000 have been deposited with them.
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PROFIT AND LOSS STATEMENT
EXPENDITURE RS PS INCOME RS PS
To interest on M.S.D 2,93,271 00 By interest on
misterm loan
23,35,81,62
4
80
To interest on savings 0 00 By interest on short
term loan
1,47,466 56
To interest on fixed deposit 89,64,641 96 By interest on
consumer loan
5,61,719 90
To interest on fixed loan 18,49,44,018 00 By interest on
educational loan
18,25,290 01
To interest on overdraft 1,78,67,659 00 By interest on flood
loan
7,17,271 29
To salaries 1,09,55,080 00 By interest on top up
loan
2,14,07,593 47
To leave travel assistance 1,77,500 00 By interest on
housing loan
3,57,476 16
To contribution to staff P.F
by society
11,12,968 00 By interest on
investment in F.D
2,14,07,593 00
To educational aid to staff
children
34,200 00 By interest on bank
account
5,27,804 00
To bank charges 49,001 00 By dividend on
shares
32,45,049 00
To rent 600 00 By nomination fees 6,590 00
To postage 8,791 00 By interest on loan
against f.d
82,409 66
To telephone charges 1,42,169 00 By L.I.C(against 0 00
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housing loan)
To stationery & printing
charges
32,04,791 00
To computer charges 3,28,547 00
To sundry charges 2,49,093 50
To advertisement expenses 2,11,234 00
To legal charges 6,18,550 00
To professional charges 3,24,800 00
To staff fidelity & cash in
transist
28,876 00
To professional tax(by
society)
0 00
To travelling expenses for
m.c members
29,488 00
To electricity charges 99,797 00
To mediclaim to staff 1,97,201 00
To expenses for A.G.M 12,82,787 00
To financial aid to mentally
retarded children
4,14,600 00
To memento to retired
members
12,49,781 00
To medical aid to
members(family planning)
0 00
To audit fees 2,99,207 00
To gun gaurav 15,32,016 00
To penal interest 0 00
To administrative charges 18,00,000 00
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To excess of income over
expenditure
4,74,56,971 59
283879638 85 283879638 85
BALANCE SHEET
LIABILITIES RS RS ASSETS RS RS
SHARE
CAPITAL
27,34,04,279.00 CASH BANK
BALANCES
Cash on hand 0
RESERVE
FUND
B.O.I:-S/B
A/C(ECECTRIC
HOUSE)
2,54,43,153.00
Reserve fund 24,91,99,738.60 B.O.I CURRENT 7,50,000.00
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A/C
Sympatiser
membership
fees
260.00 B.O.I CURRENT
A/C(APNA
BAZAAR)
40,810.68
Nominal
membership
fees
130.00 B.O.I CURRENT
A/C(SION
BRANCH)
6,15,708.70
Entrance fees 6,810.00 B.O.I CURRENT
A/C(GOREGAON
BRANCH)
6,20,277.00
Penal interest 3,14,728.00 24,95,20,666.60 B.O.I CURRENT
A/C(MULUND
BRANCH)
8,27,712.50
B.O.I CURRENT
A/C(ANDHERI
BRANCH)
10,23,734.57
OTHER
FUNDS
B.O.I CURRENT
A/C(DEONAR
BRANCH)
45,69,735.00
Building fund 15,63,03,000.00 M.D.C bank-S.B
a/c
16,955.00
Dividend
equalisation
3,00,000.00 M.D.C bank-
current a/c
1,00,998.00
Bad &
doubtful debt
18,01,000.00 3,38,09,085.39
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reserve
Charity 72,21,999.00
Memento to
retired
members
00 INVESTMENT IN
SHARES
Special
P.F(gratuity)
98,43,710.00 The M.D.S co-op
bank ltd
5,81,55,000.00
Members
welfare fund
13,76,29,565.00 The M.S Co-op
bank ltd
1,000.00
Societys
election
expenses
35,94,661.98 Lokmitra S.M.P
maryadit
5,000.00
Short term
loan
1,22,234.15 Mumbai pagardar
P.S.S.M
500.00
Death
beneyolent
fund
1,55,79,420.00 332395590.13 Mumbai kokan
pagardar P.(shares)
500.00 5,81,62,000.00
STAFF
PROVIDENT
FUND
INVESTMENT IN
F.D
Provident fund 3,10,02,357.00 The M.D.C co-op
bank(reserve) Fund
RS 22,10,01,000/-
inclusive
25,47,11,000.00
Staff N.C.P.F 7,86,402.00
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Spl.P.F
centr(reserve
fund)
3,804.25
Interest on P.F
inv in S.B a/c
24,94,713.91 STAFF
PROVIDENT
FUND
Interest on P.F
loan a/c
2,32,437.66 33,23,95,590.13 The M.D.C co-op
bank-F.deposit
3,09,58,012.00
B.O.I staff P.F:-
S.B a/c
37,14.82
DEPOSITS M.D.C bank-staff
P.F S.B a/c
5,41,688.00
Fixed deposits 11,55,64,805.00 Provident fund
loan
30,16,300.00
M.S.D 1,59,19,28,627.2
0
Int. on staff
N.C.P.F
0 3,45,19,714.82
Staff saving
fund
1,69,993.00 1,70,76,63,225.2
0
LOAN TO
MEMBERS
CURRENT
LAIBILITIES
Medium term loan 3,62,10,72,004.2
5
Provision for
audit fees
0 Short term loan 00
Ex-grati bonus
to staff
2,22,499.00 Consumer loan 27,83,833.73
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Suspense a/c 66,58,410.84 Educational loan 2,35,94,143.00
Revenue
stamp
0 Flood loan 1,65,25,322.00
Centri. To
education fund
0 Top-up loan 34,71,73,277.00 4,01,11,48,579.9
8
Unclaimed
dues fund
1,57,270.00 Housing loan to
staff
59,98,436.00
Dividend 24,73,69,62.75 Loan against fixed
deposit
2,57,000.00
The MDC co
op band ltd-od
a/c
21,68,18,274.60 Festival advance 1,45,200.00
Loan defaulter
surety(L.D.S)
1,39,75,843.00 Furniture &
equipment
25,51,346.43
The M.D.C
bank-fixed
loan
1,49,62,50,488.0
0
Chikitsalaya 55,73,689.00
C.B 17,93,286.00 Deposit with BEST
undertaking
63,60,035.00
Medical relief
to members
77,32,459.00 Security deposits 0
Security
deposits
25,000.00 Special adhesive
stamp
50,400.00
Bank of india
S.B-a/c
0 Service charges 4,860.00
Income tax 0 1,76,83,70,493.1 Net paid 00
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9
L.I.C(against
housing loan)
41,776.26
C.B 0
Excess of
expenditure over
income
0
PROFIT &
LOSS A/C
Balance 182.55
Excess of
income over
expenditure
4,74,58,971.39 4,74,59,153.94
4,41,33,33,122.8
8
4,41,33,33,122.8
8
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PROFIT DISTRIBUTION
In the present year net profit is RS 10,76,11,890.71 including last years carry forward
profit 161.04 the committee recommends appropriation of the total profit of
RS 10,76,12,051.75 the distribution is as fallows.
Reserve fund(25%) RS 2,69,05,000
Dividend(15%) RS 3,85,82,869.20
Building fund RS 1,10,00,000
Societys election RS 8,00,000
Medical relief to members RS 15,00,000
Members welfare fund RS 2,08,19,000
Charity RS 8,00,000
Mememto/or retiring - RS 5,000
employees members
Carry overs RS 982.55
TOTAL RS 10,76,12,051.75
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AUDIT
The audit of accounts for the financial year 2009-10 was carried out by the societys
internal auditors by MR S.N KAMATH & CO.For the year 2008-09 MR RAJU &
PRASAND & CO.,CHARTERED ACCOUNTANTS.
GENERAL
The audit classification of B GRADE awarded to the society 192 members were in
attendance at the last general annual meeting.
COMPARATIVE STUDY.
COMPANY NAME : SEIMENS EMPLOYEES CO OPERATIVE CREDIT
SOCIETY LTD
PROFILE : The Siemens Employees Co-operative Credit Society Limited was
formed in 1961 registered no.29753 of 1961. On 29th July, 1961 the Credit Society
was registered under the Maharashtra Co-operative Societies Act.
SOCIETYS INTENTION;
The Siemens Employees Co-operative Credit Society Limited was formed in 1961 at
the behest of the unions and willing support from the company management with the
main purpose of establishing a financial trust that will cater to two financial
requirements of employees : to save money and to loan money in case of emergency.
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In those days of closed economy, it was difficult for individuals, especially staff and
workers to get quick and easy loans.
On 29th July, 1961 the Credit Society was registered under the Maharashtra Co-
operative Societies Act and any employee could become a shareholder by paying
Rs.10/- a share. Needless to say, there was overwhelming support and participation
from employees.
The Society is administered in line with the guidelines of the Maharashtra Co-
operative Societies Act. Members of the Society elect the Managing Board,
comprising of a President, Chairman, Vice-Chairman, Secretary and treasurer. As per
bye-laws of credit society, the Siemens Management nominates a Senior Manager of
the company, who is also a member of the Society as the President of the Board.
As Siemens grew, membership of the Society kept pace and spread to Kalwa, Nashik
and Aurangabad. Practically every Siemens office and union in Maharashtra was
affiliated to the credit society. Membership of the Society at one time was 5,500 and
3,010 today largely due to the voluntary seperation of numerous employees in the past
few years.
Credit Society has computerised its functions largely due to the support from Siemens
Ltd. & SISL managements.
Siemens Employees' Co-operative Credit Society Ltd
Head Office- WorliAddress : 130, Pandurang
Budhkar Marg,Opp. Doordarshan,Worli,Mumbai - 400 018.
Tel. : 022 - 2498 7159 /7245
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REGIONAL OFFICE;
Kalwa Office -Address : Kalwa Works, Thane Belapur Road,
Post Box No.85, Thane - 400 601
Tel. : 022 - 2762 3564
Nashik Office -Address :Nashik Works
Plot no.C-1,Additional Industrial Area,MIDC, Ambad, Nashik422 010.
Tel. : 2532302639
MANAGING COMMITTEE;
PRESIDENT - Mr. Pravin Deshmukh
Chief Manager Personal (Kalwa)
CHAIRMAN- Mr. Ashish Phanse, KALWA/WMOT WINDING
VICE-CHAIRMAN- Mr. Prashant Kadam,KALWA/WSWB/RMU
TREASURER- Mr. Gopi Bhalerao,KALWA/WMOT/QI
SECRETARY- Mr. Vikas Kamble,KALWA/WSGR/PMM
DIRECTOR- Mr. Sandeep Nimkar,KALWA/CANTEEN
DIRECTOR- Mr. Dattatraya Dumbre,KALWA/WSGR/PC1
DIRECTOR- Daphne Gonsalves,H. O.B./S.N.C
DIRECTOR- Mr. Rajesh Kshirsagar,KALWA/WSGR/ASSLY
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DIRECTOR- Mr. Chandrahas Sawant,KALWA/TOOL ROOM
DIRECTOR- Mr. Ganesh Wangalwar,AURANGABAD/WSGR
DIRECTOR- Mr. Suhas Rane,NASHIK/SYS.WIRI
MEMBERSHIP
A permanent employee of Siemens ltd. & its alliances companies can become a
member of Credit Society after purchasing minimum 30 shares (Rs. 300/-)
SHARE CAPITAL
Minimum share contribution of Rs.300/- will deduct from members monthly salary
upto Rs.4,000/-. After the deduction will continue as Members Subscription Fund
A/c.
MEMBER SUBSCRIPTION FUND
After completion of Rs.4,000/- in the Share Capital, deduction of subscription will
be continue in Members Subscription Fund A/c. Managing Committee decides the
interest rate on Members Subscription Fund as per the financial states. This year
10.5% interest declared & the same is credited to the members Bank A/c.
NOMINAL MEMBER
Members those who have Resigned or retired from Siemens Ltd. or from the
Society's Membership, can be admitted as Nominal Member to get benefit from the
investment of various Deposits Schemes.
SYMPATHISER MEMBER
Relatives of the members or Ex-members (Eg. Husband, Wife, Mother, Father, Son,
Daughter, , Father-In-law, Mother-In-law) of the Society can become a Sympathiser
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Members & earn more benefit from the investment of various Deposit Schemes.
PRODUCTS/SERVICES;
FIXED DEPOSITS
Monthly Income Scheme
QUARTERLY REINVESTMENT PLAN
Recurring Deposit
Saving Account
Long Term Loan
Medium Term Loan
Emergency Loan
FIXED DEPOSIT:Members can invest a minimum amount of Rs.1,000/- in multiples of 500/-.Interest rates on Deposit are as follows : (w.e.f. 18/04/2011)6 months to less than12 months : 7%
12 months to less than24 months : 9%
24 months to less than36 months : 8%
Up to 36 months : 8.5%Interest on these deposit will be paid with principal amount on maturity
Monthly Income Scheme
Period : Minimum & Maximum 24 Months
(w.e.f. 18/04/2011)
Members can invest a minimum amount of Rs. 20,000/- & in multiples of 5,000/-
Rate of Interest will be 8.5% p.a. You can get interest by various ways.
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*
By Cash
*By Depositing in Saving A/c. & can be withdrawn as per the requirement.
*By investing same interest in Recurring A/c. & earn more interest.
* By ECS or direct credit the interest can be transfer to Banks SB A/c.
Quarterly Reinvestment Plan......Period : Minimum 24 Months & Maximum 36 Months
(w.e.f. 18/04/2011)Members can invest minimum Rs. 1,000/- in multiples of Rs.500/-.The interest on this deposit is calculated at every quarterly @ of 7.75% p.a. on
compound basis & paid along with the principle amount at the time of maturity.
Recurring Deposit
Members can invest minimum Rs.100/- in multiples of 50/-.
(w.e.f. 09/09/09)The rates on Interest are as follows :
12months
: 6.5%
24months
: 7.5%
36months
: 8%
Saving Account
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Members can open their Saving A/c. By depositing minimum Rs.200/- by cash.
(w.e.f. 09/09/09)In this account members can authorise any amount to be deducted through his salary
& can easily withdraw the same as per his requirement.
Rate of Interest @ 4%. p.a.
Max. withdraw / receipts by cash is Rs. 20000/-
Min. balance to be obtain Rs. 200/-
Withdraw twice a week.
LONG TERM LOAN:
Loan is essential and need for today's situation. Today many Banks provide various
loan facilities to the customers. But their aim is only to earn the profit.
Loan Amount revided by 01/01/2010
Our Society Provides our members a maximum loan of Rs.8,50,000/- at the lowest
interest rate with less documentation. No processing fees & No prepayment charges
which is equally more important. The maximum repayment period 180 installments
by keeping EMI or reducing system. The eligibility chart for the loan is as follows.
Rate of Int.-10.50% Repayment Period - 180 months ( w.e.f 01/01/10 )
i) A member shall maintain 10% amount in Share & MSF of sanction loan.
ii) Remaining balance of existing loan may be adjusted against sanctioned
fresh loan.
iii) The above limits will operate so far as the borrowing of individual member are
concerned, in addition to these limits a member can offer as surety in not more than
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two cases.
iv) A member is entitled to borrow Long Term Loan above Rs.2,50,000/- shall be
sanctioned to a member provided documents such as for Housing / Long Medical
Sickness/Higher Education of Children/Daughter/ Son/Brother/Sister and himself
Marriage and Purchase of Vehicle or House hold items.
v) Maximum Monthly Installments Repayment of Loan shall be EMERGENCY
LOAN - (25 Installments), LONG TERM & MEDIUM TERM LOAN upto 180
Installments.
vi) There is no need to give surety for EMERGENCY LOAN.
vii) As per Bye-laws No. F.1.8.Managing Committee reserves the rights to change
Interest rates on Loan time to time and sanction the loan according to repaying
capacity of loaner.
MEDIUM TERM LOAN
Members those who have already taken Long Term Loan fully & required some
more loan can apply for the Medium Term Loan as per the eligibility mentioned in
the table given below
Loan Amount revided by 01/01/2010
Rate of Int.-12.00% Repayment Period - 180 months ( w.e.f 01/01/10 )
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EMERGENCY LOAN
If member needs urgent financial help, he can apply for Emergency Loan of
Rs.18,000/- & the same can get in cash on the same day without surety.(subject to
availability of Cash)
Rate of Int.- 10.50% Repayment Period - 25 months
PROGRESS REPORT
Dividend2006-2007 2007-2008 2008-2009 2009-2010 2010-2011
15% 15% 15% 18% 15%
Members 2,902 2,995 3,010 3,216
3,288
ShareCapital
81,80,799.61 91,15,753.81 96,91,473.385,45,62,687
5,58,10,787
Methodology:
The data is collected for the preparation of this project report includes both
primary and secondary data. The primary data is that the secretary of the society,
Directors of the society and the society staff is personally interviews to collect
information about the credit facilities provided by the society to the study.
Secondary data has been collected from the past annual report of the society and
from the informative sites.
Benefits of study:
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1. We can get a clear idea about the credit facilities provided by the
society.
2. The report is helpful in knowing about how the society functions and the other
welfare facilities offered by the society to the employees.
3. The study given us to know t he performance and growth of the
society.
4.By preparing this project report the study helps us in coming to our own conclusion
about the society and to write our own suggestion for its improvement
Limitations of project report:
There are some limitations in doing project report, they are as
follows:
1. Some confidential information was not conveyed.
2. Because of centralisation as it is a public ltd co. practical practice was prohibited.
3. Accuracy of this project report is limited because of factors like
limitation of time.
SUGGESTIONS
1) The society should use more of computerized system to the maximum and
eliminate the book keeping system to the extend as possible.
2) The employees should aquire complete knowledge of the computerized system
in order to use the technology smoothly so to save the time and energy and to
be techno savvy.
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3) The computerized system so used must be quiet efficient to serve the purpose
and to have a strong back up system.
4) The employees should get much more disciplined and to give more priority to
work than to time to time work.
5) Over employment must be avoided so as the cost dont go up and profit is
retained and also to save the work space.
BIBLOGRAPHY
Annual report of b.e.s.t employees co-operative credit society ltd
Bye laws of b.e.s.t employees co-operative credit society ltd
http://www.siemenscreditsociety.com
www.scribed.com
http://www.rbi.org.in/scripts/fun_urban.aspx
http://www.siemenscreditsociety.com/http://www.scribed.com/http://www.rbi.org.in/scripts/fun_urban.aspxhttp://www.siemenscreditsociety.com/http://www.scribed.com/http://www.rbi.org.in/scripts/fun_urban.aspx