synopsis ramya

7/30/2019 Synopsis Ramya

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A STUDY ON OPERATIONAL AND FINANCIAL

PERFORMANCE OF SAPTAGIRI GRAMEENA

BANK, CHITTOOR

PROJECT REPORT

Submitted in the Partial Fulfillment of the

Requirement for the Award of the degree

Of

MASTER OF BUSINESS ADMINISTRATION

JAWAHARLAL NEHURU TECHNOLOGICAL UNIVERSITY-ANANTAPUR

Submitted By

D.RAMYA KRISHNA

Reg.No:11751E0040

Under the Guidance of

Dr .V.MURALI KRISHNA, M.Com, Ph.D, MBA.

Asst. Prof. Dept. of M.B.A

SITAMS

SREENIVASA INSTITUTE OF TECHNOLOGY ANDMANAGEMENT STUDIES

ACCREDITED BY NATIONAL BOARD OF ACCREDITIONDr .VISWESWARAIAH ROAD (BANGALORE-TIRUPATHI BYE-PASS

MURUKAMBATTU POST, CHITTOOR-517127(A.P)

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2011-2013

SREENIVASA INSTITUTE OF TECHNOLOGY ANDMANAGEMENT STUDIES

APPROVED BY AICTE, NEW DELHI & AFFILIATED TO JNTU, ANANTAPUR.

DR.Visweswaraiah Road,(Bangalore-Tirupathi Bye-Pass Road)

Murukumbatu, CHITTOOR-517127

CERTIFICATE

This is to certify that the project report entitled A STUDY ON

OPERATIONAL AND FINANCIAL PERFORMANCE OF SAPTAGIRI

GRAMEENA BANK CHITTOORis a record of bonafied work done and submitted

by D.RAMYA KRISHNA (Reg No: 11751EOO40) in partial fulfillment of the

requirements for the award of the degree in NISMASTER OF BUSINESS

ADMITRATION under JAWAHARLAL NEHRU TECHNOLOGICAL

UNIVERSITY, ANANTAPUR.The performance of his/her satisfactory relation to the

concurrent project work during the academic year2012-2013.

PROJECT GUIDEDIRECTORDr.V.MURALI KRISHNA, M.Com, Ph.D, MBA. Dr. S. E.V.SUBRAHMANYAM MBA.,PhdASSOCIATE PROFESSOR,HOD ,Dept . ofMBA

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MBA DEPARTMENT, SITAMS,SITAMS, CHITTOOR.CHITTOOR.

INTRODUCTION

Meaning of Bank

Bank is a lawful organization, which accepts deposits that can be withdrawn

on demand. It also lends money to individuals and business houses that need

it.

Banking in India originated in the first decade of 18th century with The

General Bank of India coming into existence in 1786. This was followed by

Bank of Hindustan. Both these banks are now defunct. After this, the Indian

government established three presidency banks in India. The first of three

was the Bank of Bengal, which obtains charter in 1809, the other two

presidency bank, viz., the Bank of Bombay and the Bank of Madras, were

established in 1840 and 1843, respectively. The three presidency banks were

subsequently amalgamated into the Imperial Bank of India (IBI) under the

Imperial Bank of India Act, 1920 which is now known as the State Bank of

India.

A couple of decades later, foreign banks like Credit Lyonnais started their

Calcutta operations in the 1850s. At that point of time, Calcutta was the most

active trading port, mainly due to the trade of the British Empire, and due to

which banking activity took roots there and prospered. The first fully Indian

owned bank was the Allahabad Bank, which was established in 1865. By the

1900s, the market expanded with the establishment of banks such as Punjab

National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai both of which were founded under private ownership. The Reserve Bank of

India formally took on the responsibility of regulating the Indian banking

sector from 1935. After Indias independence in 1947, the Reserve Bank was

nationalized and given broader powers. As the banking institutions expand

and become increasingly complex under the impact of deregulation,

innovation and technological upgradation, it is crucial to maintain balance

between efficiency and stability. During the last 30 years since

nationalization tremendous changes have taken place in the financial markets

as well as in the banking industry due to financial sector reforms. The bankshave shed their traditional functions and have been innovating, improving

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and coming out with new types of services to cater emerging needs of their

customers. Banks have been given greater freedom to frame their own

policies.

ROLE OF BANKING

Banks provide funds for business as well as personal needs of individuals.

They play a significantrole in the economy of a nation. Let us know about

the role of banking.

It encourages savings habit amongst people and thereby makes funds

available for productiveuse.

It acts as an intermediary between people having surplus money and

those requiring moneyfor various business activities.

It facilitates business transactions through receipts and payments by

cheques instead ofcurrency.

It provides loans and advances to businessmen for short term and

long-term purposes.

It also facilitates import export transactions.

It helps in national development by providing credit to farmers,

small-scale industries andself-employed people as well as to largebusiness houses which lead to balanced economicdevelopment in the

country.

It helps in raising the standard of living of people in general by

providing loans for purchaseof consumer durable goods, houses,

automobiles, etc.

TYPES OF BANKS

There are various types of banks which operate in our country to meet thefinancial requirementsof different categories of people engaged in

agriculture, business, profession, etc. On the basis offunctions, the banking

institutions in India may be divided into the following types:

1. Central Bank

2. Development Banks

3. Specialized Banks(RBI, in India) (EXIM Bank ,SIDBI, NABARD)

4. Commercial Banks

i. Public Sector Banks

ii. Private Sector Banks

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iii. Foreign Banks

5. Cooperative banks

i. Primary Credit Societies

ii. Central Co-operative Banks

iii. State Co-operative Banks

Now let us learn about each of these banks in detail.

1) Central Bank

A bank which is entrusted with the functions of guiding and regulating the

banking system of acountry is known as its Central bank. Such a bank does

not deal with the general public. It actsessentially as Governments banker,maintain deposit accounts of all other banks and advancesmoney to other

banks, when needed. The Central Bank provides guidance to other

bankswhenever they face any problem. It is therefore known as the bankers

bank. The ReserveBank of India is the central bank of our country.The

Central Bank maintains record of Government revenue and expenditure

under various heads.It also advises the Government on monetary and credit

policies and decides on the interest ratesfor bank deposits and bank loans. In

addition, foreign exchange rates are also determined by thecentral

bank.Another important function of the Central Bank is the issuance ofcurrency notes, regulating theircirculation in the country by different

methods. No other bank than the Central Bank can issuecurrency.

2) Commercial Banks

Commercial Banks are banking institutions that accept deposits and grant

short-term loans andadvances to their customers. In addition to giving short-

term loans, commercial banks also givemedium-term and long-term loan to

business enterprises. Now-a-days some of the commercialbanks are also

providing housing loan on a long-term basis to individuals. There are alsomanyother functions of commercial banks, which are discussed later in this

lesson.

Types of Commercial banks: Commercial banks are of three types i.e.,

Public sector banks, Private sector banks and Foreign banks.

(i) Public Sector Banks: These are banks where majority stake isheld by the Government ofIndia or Reserve Bank of India.

Examples of public sector banks are: State Bank of

India,Corporation Bank, Bank of Baroda and Dena Bank, etc.

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(ii) Private Sectors Banks: In case of private sector banks majority ofshare capital of thebank is held by private individuals. These banks

are registered as companies with limitedliability. For example: The

Jammu and Kashmir Bank Ltd., Bank of Rajasthan

Ltd.,Development Credit Bank Ltd, Lord Krishna Bank Ltd.,

Bharat Overseas Bank Ltd.,Global Trust Bank, Vysya Bank, etc.

(iii) Foreign Banks: These banks are registered and have theirheadquarters in a foreign countrybut operate their branches in our

country. Some of

the foreign banks operating in ourcountry are Hong Kong and

Shanghai Banking Corporation (HSBC), Citibank,

AmericanExpress Bank, Standard & Chartered Bank, Grindlays

Bank, etc. The number of foreignbanks operating in our countryhas increased since the financial sector reforms of 1991.

3) Development Banks

Business often requires medium and long-term capital for purchase of

machinery and equipmentfor using latest technology, or for expansion and

modernization. Such financial assistance isprovided by Development Banks.

They also undertake other development measures likePublic Sector

Bankscomprise 19nationalized banks andState Bank of India andits 7

associate banks.Business Studiessubscribing to the shares and debenturesissued by companies, in case of under subscription ofthe issue by the public.

Industrial Finance Corporation of India (IFCI) and State

FinancialCorporations (SFCs) are examples of development banks in India.

5) Co-operative Banks

People who come together to jointly serve their common interest often form

a co-operativesociety under the Co-operative Societies Act. When a co-

operative society engages itself inbanking business it is called a Co-operative

Bank. The society has to obtain a license from theReserve Bank of Indiabefore starting banking business. Any co-operative bank as a society isto

function under the overall supervision of the Registrar, Co-operative

Societies of the State.As regards banking business, the society must follow

the guidelines set and issued by the ReserveBank of India.

Types of Co-operative Banks

There are three types of co-operative banks operating in our country. They

are primary creditsocieties, central co-operative banks and state co-operative

banks. These banks are organizedat three levels, village or town level,district level and state level.

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(i) Primary Credit Societies: These are formed at the village or townlevel with borrowerand non-borrower members residing in one

locality. The operations of each society arerestricted to a small area

so that the members know each other and are able to watch overthe

activities of all members to prevent frauds.

(ii) Central Co-operative Banks: These banks operate at the districtlevel having some ofthe primary credit societies belonging to the

same district as their members. These banksprovide loans to their

members (i.e., primary credit societies) and function as a link

betweenthe primary credit societies and state co-operative banks.

(iii) State Co-operative Banks: These are the apex (highest level) co-operative banks in allthe states of the country. They mobilize funds

and help in its proper channelization amongvarious sectors. The

money

reaches the individual borrowers from the state co-operativebanks

through the central co-operative banks and the primary credit

societies.

6) Specialized Banks

There are some banks, which cater to the requirements and provide overallsupport for settingup business in specific areas of activity. EXIM Bank,

SIDBI and NABARD are examples ofsuch banks. They engage themselves

in some specific area or activity and thus, are calledspecialized banks. Let us

know about them.

i. Export Import Bank of India (EXIM Bank): If you want to set

up a business for exportingproducts abroad or importing products

from foreign countries for sale in our country, EXIMbank can

provide you the required support and assistance. The bank grantsloans toexporters and importers and also provides information

about the international market. Itgives guidance about the

opportunities for export or import, the risks involved in it and

thecompetition to be faced, etc.

ii. Small Industries Development Bank of India (SIDBI): If you

want to establish asmall-scale business unit or industry, loan on

easy terms can be available through SIDBI. Italso finances

modernization of small-scale industrial units, use of new

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technology and marketactivities. The aim and focus of SIDBI is to

promote, finance and develop small-scaleindustries.

iii. National Bank for Agricultural and Rural Development

(NABARD): It is a centralor apex institution for financing

agricultural and rural sectors. If a person is engaged inagriculture

or other activities like handloom weaving, fishing, etc. NABARD

can providecredit, both short-term and long-term, through regional

rural banks.

It provides financialassistance, especially, to co-operative credit,

in the field of agriculture, small-scale industries,cottage and village

industries handicrafts and allied economic activities in rural areas.7) Grameen Bank

The Grameen Bank is a community development bankstarted in

Bangladesh. They give small loans (known as microcredit or

"grameencredit" [1]) to poor people without asking for money before the

loan is given. The word "Grameen", is made of the word "gram" or "village",

and means "of the village". The system of this bank is based on the idea that

the poor have skills but have no chance to use their skills without some

money. The bank also controls some businesses, such as fabric, telephone

and energy companies. Most of the banks loans go to women.

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http://simple.wikipedia.org/w/index.php?title=Community_development_bank&action=edit&redlink=1http://simple.wikipedia.org/wiki/Bangladeshhttp://simple.wikipedia.org/wiki/Loanhttp://simple.wikipedia.org/w/index.php?title=Microcredit&action=edit&redlink=1http://www.grameen-info.org/bank/WhatisMicrocredit.htmhttp://www.google.co.in/imgres?q=saptagiri+grameena+bank+logo&sa=X&hl=en&biw=1024&bih=571&tbm=isch&tbnid=YHWDGxPVIBLRqM:&imgrefurl=http://interbankjobs.blogspot.com/2011/05/saptagiri-grameena-bank-jobs-officers.html&docid=Im1LIqhfMK3wvM&imgurl=http://2.bp.blogspot.com/-XLq_2DAW068/Tdexi6COe4I/AAAAAAAAADk/6bQNueX6jMY/s72-c/sapthagirigrameenabank.jpg&w=72&h=72&ei=v-d8UfCiFo3wrQeVzYDACQ&zoom=1&iact=rc&page=5&tbnh=69&tbnw=69&start=84&ndsp=23&ved=1t:429,r:86,s:0,i:346&tx=46&ty=60http://simple.wikipedia.org/w/index.php?title=Community_development_bank&action=edit&redlink=1http://simple.wikipedia.org/wiki/Bangladeshhttp://simple.wikipedia.org/wiki/Loanhttp://simple.wikipedia.org/w/index.php?title=Microcredit&action=edit&redlink=1http://www.grameen-info.org/bank/WhatisMicrocredit.htm


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INDUSTRY PROFILE

HISTORY OF GRAMEEN BANK

The origin of Grameen Bank can be traced back to 1976 when Professor

Muhammad Yunus, Head of the Rural Economics Program at the University

of Chittagong, launched an action research project to examine the possibility

of designing a credit delivery system to provide banking services targeted at

the rural poor. The Grameen Bank Project (Grameen means "rural" or

"village" in Bangla language) came into operation with the following

objectives:

Extend banking facilities to poor men and women;

Eliminate the exploitation of the poor by money lenders;

Create opportunities for self-employment for the vast multitude of

unemployed people in rural areas.

Bring the disadvantaged, mostly the women from the poorest

households, within the fold of an organizational format which they can

understand and manage by themselves. and

Reverse the age-old vicious circle of "low income, low saving & low

investment", into virtuous circle of "low income, injection of credit,

investment, more income, more savings, more investment, more

income".

The action research demonstrated its strength in Jobra (a village adjacent to

Chittagong University) and some of the neighboring villages during 1976-

1979. With the sponsorship of the central bank of the country and support of

the nationalized commercial banks, the project was extended to Tangail

district (a district north of Dhaka, the capital city of Bangladesh) in 1979.

With the success in Tangail, the project was extended to several other

districts in the country. In October 1983, the Grameen Bank Project was

transformed into an independent bank by government legislation. Today

Grameen Bank is owned by the rural poor whom it serves. Borrowers of the

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Bank own 90% of its shares, while the remaining 10% is owned by the

government.

ROLE OF REGIONAL RURAL BANKS IN ECONOMIC DEVELOPMENT

The importance of the rural banking in the economic development of a

country cannot be overlooked. As Gandhi said Real India lies in villages,

and village economy is the backbone of Indian economy. Without the

upliftment of the rural economy as well as the rural people of our country,

the objectives of economic planning cannot be achieved. In fact, the real

growth of Indian

economylied in the emancipation of rural masses from acute poverty,

unemployment, and socio-economic backwardness. Keeping this end inview, various important plans and programmes of rural development have

been conceived and implemented by the government of India since the

commencement of first five-year plan from 1951-56. But an appraisal of the

achievement of these programmes clearly reveals that much programmes

failed to achieve the desired objectives due to the backward economic

condition and lack of adequate finance to the poor people in the rural areas.

Hence, bank and other financial institutions are of vital importance for

development of rural economy of a country. The presentstudy is a modest

attempt to make an appraisal of the credit needs of the rural people and theway Regional Rural Bank, i.e., Arunachal Pradesh Rural Bank, has been

extending its service to meet the same in the state of Arunachal Pradesh. It

deals with the performance evaluation of Arunachal Pradesh. Rural Bank

(APRB) for the economic development of the state. Further, an attempt has

also been made to study the growth and performance of Scheduled

Commercial Banks with special emphasis on Regional Rural Banks (RRBs)

in Indian and North-East Region.

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SAPTAGIRI GRAMEENA BANKPROFILE

The Bank in Brief:

In terms of decision to amalgamate the RRBs sponsored by the same bank in the state

wide GO dated 26.06.2006, Government of India have notified formation ofSaptagiriGrameena Bank ,amalgamating ShrivenkateswaraGrameena Bank (SVGB)

operating in Chittoor district and KanakadurgaGrameena Bank (KDGB) is perating in

Krishna diastrict of Andhra Pradesh.Indian bank sponsored both the RRBs. The

amalgamated entity i.e.,SaptagiriGrameena Bank started functioning w.e.f.01.07.2006

with the Head Ofiice at Chittoor.

Operational Area:

Banks operationalarea is spread across chittoor and Krishna districts in the state of

Andhra Pradesh.Chittoor district is located on the southern part of the state .Chittoor isthe district head quarters. The district covers on extent of 15152 sqkms. It is divided into

3 Revenue Divisions viz., Chittoor,Madanapalle and Tirupati and 66 mandals. Krishna

district is located on the east coast of the state. The geographical area of the district is

divided into 4 Revenue Divisions viz., Gudivada, Machilipatanam, Nuzivedu and

Vijayawada and 40 mandals.

Branch Network:

The bank is having 154 branches. Of the above 100 branches are located in Chittoor

District and 54 branches are located in Krishna District. Of the above 127 branches 12 arelocated in Urban areas, 36 in Semi-Urban areas and remaining 106 are located in Rural

areas.

Share Capital:

In terms of section 5 of RRB Act 1976, the authorized capital of Bank is Rs.500 lakhs

divided into 5 lakhs fully paid shares of Rs.100/- each. The paid up capital of the Bank as

on 31 03 2008 is Rs.200 lakhs, contributed by Govt of India, Sponsor Bank and Govt of

A.P. in the ratio of 50%, 35% and 15% respectively.

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Deposit Schemes:

Loans Products/Schemes:

1) GrameenKisan Credit Cards (GKC)

2) Swarojgar Credit Card

3) General Credit Card

4) Ag STPL

5) Ag Jewel Loan

6) Ag Term Loan for

a) Land Development

b) Purchase of Landc) Minor Irrigation

d) Farm Mechanisation (Tractors/Tillers/Crushers)

e) Plantation and Horticulture.

f) Agri Clinics and Agri Business.

7) Agricultural Allied Term Loans for

a) Dairy

b) Poultry

c) Bullocks and Cart

d) Duckery

e) Fishery

f) Sheep, Goat, Rabbit Rearingg) Seri Culture.

8) Self Help Groups Financing.

9) M S M E

10) Rural Artisans

11) Small Loans Small Business, Retail Trade, SRTO, P & S E

12) Loan Against Mort of Property (LAMP)

13) Salary Loans, NSC loans, LIC loans.

14) S O D, O D, OCC, Fair Price Shops.

15) Two Wheeler Loans under tie up with Hero Honda

16) Car Loan Scheme under tie-up with Maruthi

17) Educational Loans18) Housing Loans

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1) Savings Bank

2) Suraksha Savings

3) Janatha Savings (No Frill)

4) Current Account

5) Fixed Deposit

6) Short Term Deposit

7) Reinvestment Plan

8) Recurring Deposit

9) Kamadhenu Deposit (Unit Deposit)

10) Variable Recurring Deposit

11) N R E - RIP

12) N R E - TD

13) N R E - Savings Bank


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19) Rent Encash

20) S G B Rural Housing Scheme

21) S G B Post Harvest Financing Scheme.

Other Services (Marketing Products):

1) LIC of India

2) United India Insurance co ltd.

3) UTI Mutual Fund.

OBJECTIVES OF THE STUDY

To study the financial performance of the

SaptagiriGrameenabank(SGB), Chittoor.

To know thebank is earning reasonable rate of return in order to

meet their obligations I the long.

To make important suggestons to improve the working of SGB.

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STATEMENT OF THE PROBLEM

The most serious problem faced by the bank is their economic non-

viability., insufficiency of interest revenue and transaction costs incurred by

it. It is always argued that the bank have not been able to earn much profit

in view of their policy. Hence the research is intended to study the growth

and progress of the bank among the Profit making the bank.

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SCOPE OF THE STUDY

The current study is undertaken for the purpose of analyzing the

Operational And Financial Performance of SaptagiriGrameena

Bank, Chittoor. In this study includes the past and present

performance of the bank. This study may helps the bank to take

financial decisions.

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NEED FOR THE STUDY

There is an availability of vast literature on operational and financial

performance of scheduled commercial banks. But there is an extreme dearth

of significant studies inth arena of RRBs. In this reference the present study

attemps to contribute little but significant contribution to the literature. The

implications of this project are expected to be of great use to the policy

makers for designing further strategy for SaptagiriGrameena Bank to

stergthen the rural customers.

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LIMITATIONS OF THE STUDY

The present study relates to the only Saptagiri Grameena Bank

performance in the total RRBs in India.

The present study considers the performance of bank only for five

years from 2007-2012.

The time factor is the major constraint for the study.

The calculations are made on the basis of data supplied/given by

banking authorities.

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RESEARCH METHODOLOGY

Research Methodology

The Research Methodology refers to the way adopted for collecting

information forthe purpose of drawing inferences. The Research is a process

in which the researcher wishes to find out the end result for a given problem

and thus the solution helps in the future course of action. Redman and Mory

defines the research as a systematized effort to gain new knowledge.

The present study depends upon purely secondary data. The secondary data

will be obtained from the previous project reports, websites, bank records,

and other financial books. But primary data used to profit of the bank from

starting to present from the officials of the bank.

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CHAPTER SCHEME

CHAPTER 1

Introduction It provides information regarding the stock exchanges in India

CHAPTER 2

Industry Profile - meaning of commodity and the major three markets of commodity

Derivatives.

CHAPTER 3

Company Profile- It providing the profile of Adithya Birla Money Pvt. Ltd., Chittoor.

CHAPTER 4

Research Methodology objectives need of the study - scope of the study data

collection chapter scheme of the project.

CHAPTER 5

Analysis - Study of the primary data of selected commodities in the commodities market

for the observation period.

CHAPTER 6

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Findings, Suggestions and Conclusion Offering conclusions and suggestions made on

the analysis

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synopsis ramya

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