.

A SUMMER PROJECT REPORT ON WORKING CAPITAL MANAGEMENT USED BY RAJKOT DISTRICT CO-OPERATIVE BANK SUBMITTED FOR The part of two years full time Master in business administration SUBMITTED BY Ankita B. Khakhkhar Roll no. 34; semester 2 Atmiya institute of technology & science college, Rajkot. SUPERVISED BY Ms. Binal kachhela Atmiya institute of technology & science college, Rajkot.

Affiliated with Gujarat Technological University, Ahmedabad

July 2010

Page 1 of 97

DECELARATION

I ANKITA KHAKHKHAR student of MBA, here by declare that my project work, presented in this report is my original work & has been carried out under the supervision of Ms. BINAL KACHELA of Atmiya institute of technology & science college,

Rajkot OF GUJARAT TECHNOLOGICAL UNIVERSITY.

This work has not submitted to any other university for any examination.

Date: Place: - Rajkot

SIGNATURE: -

(ANKITA KHAKHKHAR)

Page 2 of 97

AKNOWLEDGEMENT

To acknowledge is very great way to show your gratitude towards The Persons who have contributed in your success in one or other way. . First of all I would like to thank Gujarat Technological University for introducing this subject in our course which gives us practical knowledge about specified Industry. I am thankful to general manager C.N.Tarapara to give me permission for the summer training. I want to express my sincere obligation to K.R. Vakariya, B.M.Sangani Sir R.V. panara sir and all the staff members of RDCB, where I worked so long in a homely pleasant atmosphere. Especially, I would like to Thank Miss Binal kachela, my mentor who guided me in my work & Dr. Sunil misra, the director of college for his guidance.

Thanking you.

Date: Place: -RAJKOT .

Yours Faithfully, ANKITA KHAKHKHAR

Page 3 of 97

PREFACE

Knowledge is the ocean that cannot be fathomed the deeper you go, the more you see its unbounded profundity Change in occurring at an accelerated rate. Today is not like yesterday and tomorrow will not like be todays market is how to succeed in the dynamic environment that surrounds the corporate world. MBA one of those professional courses which help students to keep pace the changing trends in business and its surrounding environment. The subject Practical Studies particularly helps students to know the actual corporate world, the anxieties and stress associated with the job which cannot be understood sitting in a classroom. As students of MBA we are required to do a survey in any unit of national or international repute, so as to gain practical knowledge about the prevailing market conditions, for this purpose, I have chosen RAJKOT DISTRICT CO-OPERATIVE BANK as banking business today is rapidly increasing and is one of the most competitive businesses. I was fortunate to get an opportunity to work with such a professional unit.

DATE : PLACE: RAJKOT ANKITA KHAKHKHAR

Page 4 of 97

TABLE OF CONTENT

1 2 3 4 5 6 7 8 9

Introduction Industry overview Company overview SWOT Analysis Research study on conceptual frame work of Working Capital. Limitation Future Plans Conclusion Bibliography

Page 5 of 97

The word BANK acts as the bridge between the people who needs money and who have excess money with them. In the past, when barter system was in Page 6 of 97

the existence, at that time there is no any use of money. But with changing in time, money became the medium for each and every products as well as services. Later on money became very important tool for smooth running of economy. Money became the main tool for every transaction. With the passage of time, every business is grown like anything and people need to transfer their fund from one place to another place at 100s or 1000s of kms far away from each other. It takes time to transfer money physically by any broker or currier services. This creates necessity of one intermediate which makes this problem easy and it gives birth to BANK. In the initial stage, banks are generally provides services of transferring money for which they have started. They are simply receives money who wants to save and lend to those who ware in the need of it. But with passage of time working of banking sector got changed. Now a day it becomes very important service sector. Banks have to perform various activities other than its basic activity.

They have to start other function by which smooth running of business becomes possible. The Banking system has a significant role to play in the rapid growth of the economy through planned efforts. Research confirms that countries with a well developed Banking system grow faster then those with a weaker one. Overall one thing we have to accept that without efficient banking sector todays corporate world can not exist and we can not deny the importance of banks in current corporate world.

BANKING STYTEM IN INDIA

Page 7 of 97

In the INDIA, the banking system was started many years ago. This system was started in the second or third century A.D., Manu, the great Hindu Jurist, devoted a section of his work to deposits and advances and laid down rules relating to rates of interest to be paid or charged. At that time the same activity was done at local level by any landlord person of the village. Every town, big or small, had a Sheth also known as a Shah or Shroff who performed a number of banking functions. He was respected by all sections of people as an important citizen. They were instrumental in transferring funds from place to place and doing collection business mainly through Hundis an accepted mode of transfer of money for commercial transactions. By the passage of time this system was developed very rapidly. In time of east India Company use of banking sector was increased like anything. In the wake of the Swadeshi movement, a number of banks with Indian management were established in the country. The Punjab National Bank Ltd, was founded in 1895 The Bank of India Ltd, in 1906. The Canara bank Ltd, in 1906. The Indian Bank Ltd, in 1907. The Bank of Baroda Ltd, in 1908, and The Central Bank of India Ltd, in 1911. After increased use of banking system, suggestions ware made that India should have central bank. And on the 6th March 1934 the Reserve Bank of India started functioning with effect from 1st April 1935. Banking Regulation Act was passed in 1949. The major participants of the Indian financial system are the commercial banks, Financial Institutions, encompassing term lending institutions, investment Page 8 of 97

institutions, specialized financial institutions, and the state-level development banks, Non-Bank Financial Companies(NBFCs) and other market intermediaries such as the stock brokers and moneylenders. The commercial banks and certain variants of the NBFCs are among the oldest of the market participants. The FIs, on the other hand, are relatively new entities in the financial marketplace.

Bank means

A bank is a financial intermediary, a dealer in loans and debt. Cairncroses

Accepting for the purpose of lending of investment of deposits of money from public repayable on demand or otherwise and withdraw able by cheques, Draft, order or otherwise. - Indian Banking Regulation Act 1949

Page 9 of 97

TYPES OF BANK

Page 10 of 97

Central Bank and Monetary Authority Reserve Bank of India

Apex banking institution

IDBI

Small Industrial Development Bank of India

NABARD

EXI M Bank

National Housing Bank

Banking Institutions

Commercial Banks

R.R.B. (Regional Rural Bank)

Co-operative Banks

Public Sector

Private Sector

State Bank Group

Nationalized Banks

Indian

Foreign

SBI main

Subsidiary Banks

Old Banks

New Banks

Local Area Banks

Introduction of co-operative bank

Page 11 of 97

Over the year the difference between co-operative banks & commercial banks has blurred as they all have come under a common law. All products & services are offered by co-operative banks are on the par with commercial banks, with a few exceptions related to government business.

In 1904 the co-operative movement started in India with a view to provide finance to the agriculturist at a low rate of interest. The co-operative society has to take the place of the money lenders & provide cheap loan to the farmers for productive purposes. Even though many types of co-operative societies have been started particularly for the artisans & others, the most common form of such societies deal in rural credits. And today co-operative banks have started verities of services with different technologies. So, after having such easy government policy, today many co-operative banks have started in India. And they are catering to the all section of the society, & also today cooperative sector has grown in all over the world, with globalization of the world they have also started to implement new technologies & various management tools. Now, they are in same market with all the other banks. So, by this way the co-operative banks are in the key position in the economy.

As a form of organization which procreations voluntary associate together on a basis of equality for the promotion of their economic interests.

-COOPERATION PLANNING COMMITTEE 1946

PRINCIPLES & CHARACTERISTICS

Page 12 of 97

Careful analyses of the above definitions will reveal the following principles & characteristics of co-operative organization.

VOLUNTARY ASSOCIATION ::Co-operative organization is purely a voluntary association if individual who join together for betterment of their economic interest through collective efforts. A member is at liberty to leave the organization at any time & withdrawal his capital by giving due notice. But it should be remembered that a member is not allowed to transfer his shares to another person as found in the company organization.

OPEN MEMBERSHIP ::-

Membership of co-operative organization is open to all irrespective of religion caste, color, creed, political affiliations belief & status to which a person belongs. The membership fees & the entrance fees are kept relatively low so as to enable the economically weak to become the members.

EQUAL VOTING RIGHTS ::Equality is the quintessence of co-operative organization. Members have equal voice in the management of its affairs with the underlying principle ONE FOR ONE VOTE.

SERVICE MOTIVE ::-

It is mainly intended to goods first to its members & then to outsiders at profit the primary aim of any co-operative organization is to render service to its member. So these are the primary motive or principles. There are other principles, co-operative organization has to follow those principles like state control, democratic organization etc.

Types of co-operative banks

Page 13 of 97

The following chart showing the organizational structure of co operative banks.

Organizational structure of co-operative banks

State co-operative bank

District co-operative banks

Primary co-operative banks

Page 14 of 97

STATE CO-OPERATIVE BANKS ::-

These banks are also known as apex bank & are registered under co-operative societies act 1912. In fact these banks are established to function as a leading co-operative financial institution of the state offer co-operative societies should grow. The Apex banks as they are called are they to render financial help as & when the co-operative societies are in need of their help.

CENTRAL CO-OPERATIVE BANKS ::-

A district level of central co-operative banks is functioning as a commercial bank & that too as an independent unit. They are there in order to strengthen the co-operative movement in the country. In fact these banks are the key link between people & apex bank & render valuable services to downtrodden & rural folk in taking them out of the financial wood central co-operative banks get funds from (A) Share capital (B) Deposits (C) Financial help from state co-operative banks (D) State bank of India & (E) Commercial banks. Their working capital is usually provided by state government.

URBAN CO-OPERATIVE BANKS ::-

Page 15 of 97

Urban co-operative banks are organized & established in towns on the pattern of joint stock banks but are established under co-operative societies act 1912. For funds these banks depend on their own sources. However central co-operative banks are helping them in financially viable. Central co-operative banks are directly links with the state co-operative banks. Urban primary co-operative banks provide funds to rural folk in easy terms to help them in agriculture work aid its development today they have started playing a significant role in rural upliftment. They are in tune with the government policies & program.

ROLE OF CO-OPERATIVE BANKS

Now-a-days co-operative banks are progressing very fast then any commercial or nationalized banks. The customer service lending services & other banking facilities given to the society is being better than other banks. So people are also being attracted & interested in co-operative banks.

The main aim of the bank is to extend credit facilities to the small traders, workers & other middle class people. This bank derive their funds for working partly through share capital contributed by the members & partly through deposits collected from members, general public & render usual banking services. The liability of members is normally unlimited. This enables the society to raise funds from outside agencies & also encourages member to take keen interest in working of the society.

If co-operative fails at their working, there will fail the best hope of India

And it must succeed because co-operatives are really

Page 16 of 97

For the people, of the people, by the people.

Page 17 of 97

REGISTRATION & LICENSING

There should be co-ordination between the state co-operative department & RBI for the registration & licensing of urban banks. Urban banks should build up their share capital & reserve to the revised minimum level with in period of 3 year which can be extendedly by the RBI to a further period of 2 years whenever necessary. For organization or urban co-operative bank in each state there should jointly survey local areas & identify the potential growth centers where urban banks could be organized once such centers are located prominent person of the locality might be contacted to seek their assistance for registration of the urban banks. New banks are to be organized in backward areas or by weaker section of the community may not be able to collect the initial minimum share capital required for obtaining license. Government assistant in the form of share capital contribution for such new banks may be equal to that collected by members. These banks derive their funds for working partly through share capital contributed by the numbers & partly through deposits collected from members & non-members & renders usual banking services. The shares are of higher value. But the liability of the member is limited to the extent to the shares hold by them.

PROBLEMS OF CO OPERATIVE BANK

Recovery problem Technical problems Problems regarding law Communication gap Poor customer services

Page 18 of 97

Lack of professional management

Page 19 of 97

RDC Bank at Glance

INDEX

Page 20 of 97

SR NO. 1 2 3 4 5 6 7 8

PARTICULAR INTRODUCTION MISSION BANK PROFILE AWARD & CERTIFICATE HISTORY LOGO LIST OF BOD ORGANIZATIONAL STRUCTURE

PG.NO. 21 22 27 29 30 33 36 39

INTRODUCTION

The co-operative bank of Rajkot ltd. popularly known as RDC bank is established on 1959 under the strong, effective leader ship of one of the national co-operative hero honor Shri Vithalbhai Raddiya with the intention of survive the common man. The local intensity of the bank in its customer centric approach, hassle free execution of the decision & technologies are their main difference from commercial banks, also high Page 21 of 97

level of commitment at all levels of management & self committed ground level staff makes them different from other commercial banks. At present RDC bank has achieved a key position in the market of saurashtra. It has 131+1 (H.O). in all over Saurashtra including main branch with the advanced technologies and educated staff, as it is said that In the emerging competitive business environment Co-operative banks who adhere to strict financial discipline. Only will survive

CORPORATE MISSION

Survive to the common man. Enhance the value of share holders. Emerge as a symbol of public trust & confidence by creating a positive image. Maintain excellence in operation & management by bringing in transparency & integrity.

Develop & motivate human resource there by cultivating professional culture in the banking operation. Ensure speedy & satisfactory customer services through continuous product innovation & aggressive marketing strategies.

Profile of the Company

Name of the Company

Rajkot district Co-Operative Bank Ltd. Page 22 of 97

Year of establishment Address

: :

1959 Shree Rajkot district Co-Operative Bank Ltd Jilla Bank Bhavan, Kasturba Road Rajkot -- 360001.

Phone No. Registered Office

: 0281-2231650-51-52-52. : Shree Rajkot district Co-Operative Bank Ltd. Jilla Bank Bhavan, Kasturba Road, Rajkot - 360001.

Registration No. WebSite E-mail Address Form of organization

: 24940:1959 : WWW.rdcbank.in : info@rdcbank.in : Co-Operative Ltd.

Working Days Timing Weekly Off Branches Accounting Year Auditor

: Monday to Saturday. : 10:30 to 5:30. : Sunday. : 131+1(H.O) Branches : 1st April to 31st March. : R.D.Shah Page 23 of 97

Accountants Policies of the Bank

: B.M.Sangani. : Providing best service as per norms Enhancing organizations Image & quality continuously improving service quality.

TOTAL NO. OF EMPLOYEES. Of which in H.O Of which in Branches Of which trained

: 771 : 118 : 653 : 507

Vision,mission & values.

VISION

Page 24 of 97

Technologically Strong Financially Sound All India Presence Personalized Services Value Maximization Employee Satisfaction Skill Maximization MISSION Be the Most Preferred Bank Leveraging Technology Develop Lifelong Relationship with Customers & Create Value for Employees and Stakeholders VALUES Together We Prosper" People are our most important asset. At Cooperative you will find modern facilities combined with old-fashionedcourtesy. We like to think of our customers as friends. We feel that the warm smile of a teller or the helpful suggestion of a customer service representative is what keeps customers coming back. LOGO

LIST OF BOARD OF DIRECTORS Sr .No 1 2 NAME SHRI VITHHALBHAI RADADIYA SHRI GHANSHYAMBHAI KHATERIYA Page 25 of 97 POST CHAIRMAN VICE CHAIRMAN

3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23

SHRI VAGHGIBHAI BODA SHRI MAGANBHAI GHONIYA SHRI DR. DAYABHAI PATEL SHIR ARVINDBAHI TAGDIYA SHRI CHAGANBHAI SOGITRA SHRI GORDHANBHAI DHAMELIYA SHRI MAGANBHAI VADAVIYA SHRI DINESHBHAI BHUVA SHRI HERDEVSHINBHAI JADEJA SHRI LALITBHAI RADDIYA SHRI JERAMBHAI PATEL SHRI PRAVINBHAI RAIYANI SHRI MAHMADJAVIDBHAI PIRJADA SHRI HERGIBHAI AJANI SHRI DR. YGNESHBHAI JOSHI SHRI DR. BALUBHAI SARDVA SHRI NANUBHAI VAGHANI SHRI HARISHCHANDRASHIN JADEJA

MANAGEING DIRECTOR(M. D.) DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR

ASSISTANCE DIRECTOR SHRI MANSHUKHBHAI BHUT ASSISTANCE DIRECTOR SHRI HDSBHAI CHANDRVADIYA ASSISTANCE DIRECTOR SHRI DIST. REGI. SAHKARI MANDALI DIRECTOR RDCKOT

AWARDS AND CERTIFICATES

Page 26 of 97

Achievements
Last 34 years bank is obtaining Audit class A. Bank is paying maximum dividend according to the previous of the act, since last 16 years. Bank has received five times in a raw the Best Performance Award for its better performance in all aspect of working at the state level along with the shield, certificate of merits and cash prize from NABARD. Bank is first in India for launching Smart Kisan Credit Card from year 200405 as a additional facility to KCC holder. Bank has issued 1395 swarojgar credit card under NABARDs scheme. This bank is the first to launch Mahalakshmi Self Help Credit Card scheme for the member of self help group with the motto to getting loan smoothly from the bank. Page 27 of 97

ORGANIZATION CHART

CHAIRMAN

VICE CHAIRMAN

MANAGING DIRECTOR

DIRECTORS

MANAGERS

PERSSONAL MANAGER CLERK

GENERAL MANAGER CLERK

PEON

PEON

Page 28 of 97

Service of TheRDC Bank

Page 29 of 97

It was a time when a function of the banks limited to the collection saving from the public & lending to the people who are in of money. But in modern age, now its not like that, in modern time banks have become the important part of colony due to the only expansion in the function. One reason for development in banking function is that the developing of the market means todays competition & to maintain position in the market banks they have to develop their services. The modern function or the services provided by the banks are as follows.

To collect spare funds from peoples saving & pay them interest.

To make these funds available to the businessman & industrialist as loan & advance. They charge interest from them.

They also help in assisting international trade by arranging exchange of currency to another one.

Banks render services for the welfare & development of weaker section of the society, they help in setting up small industries, cottage etc.

Banks help farmer to buy tractors & other agricultural equipments, middle class people to buy home appliances like T. V. & provide finance for house.

In RDC Bank out of these services most of services are being served. Not only that but also they are providing ATM facility, Cash card facility, Demand draft facility & many other services.

Page 30 of 97

RDC Bank provides Services like

DEPOSITS: Current Deposits Saving Deposits Term Deposits Recurring Deposits

LOANS: TERM LOANS: Mortgage loans Secured loans Personal Loans Vehicle Loans Home Loans Loan to small scale

OTHER SERVICES Locker System ATM facility

AGRICULTURAL LOANS Medium term loan Annual credit plan Smart Kishan Credit Card

Page 31 of 97

DEPOSITS
1. CURRENT DEPOSIT

Current account refers to regularity of transecting in account with in banking hours on all working day. The bankers liability in this regard is to honor all the demand of the customer to the extent to which his account shows a credit balance. It is because of this obligation current account deposit is known as bankers demand liability & in order to fulfill this liability they keeps sufficient cash ready every moment. A current account is an account which is generally opened by businessmen, companies, institutes, corporations, industrialists etc.

Who have huge working capital in their hand. Who are interested in keeping money safe. Who transect with their banker daily. Who received and make payment usually through cheques. Who utilize the agency services of the banker frequently Who are engaged in large scale business activity, social services and government activities.

At present in RDC BANK the condition of current account is as under.

No. of depositors 10,748

total deposit amt. 30, 32, 78,368.52

% of total deposit 10.59%

Page 32 of 97

2. SAVING DEPOSIT Saving deposit account is an ideal account or those who have money to save but who can not advantageously invest them any where else as their saving are not of much significance to the capital market because their saving are too small. This amount is therefore meant of smaller saver. The account is therefore encourages small saving and tries to forge a saving habit in the general public. The attitude to save is important which this account tries to create and thus mobilize such small savings for greater social good saving deposits account is for that section of society and put to fruitful utilization.

Restriction on with drawl of amount. Restriction on deposit of amount. Payment of interest. Other features of saving deposit:

Attractive Rate of interest (3.5%) Easy procedure for account opening. 24 hours banking facility through their ATM centers. Personalized services & special facility by the way of telephonic inquiry. Regular bank statement is provided at home through post or Attractive computerized passbook. No charges for saving account holder. No. of depositors 50,314 total deposit amt. 71,23,43,463.83 % of total deposit 24.87% E-mail.

At present in RDC BANK the condition of saving deposit is as follows.

Page 33 of 97

Page 34 of 97

3. TERM DEPOSIT

This account attracts those customers who have money invest for a longer period but do not want to take much of risk. Such person prefers to deposit with commercial banks for a specified period at a specified rate of interest. The interest rate varies from one period to another. A deposit of 15 days attracts a smaller rate of interest and deposits for 5 or more years. The highest rate of interest. The period for which deposits are to be made depends upon the depositor himself. However, once a decision is taken by the depositor any money deposit usually he is not allowed to withdrawal the same before the interest earned till that date or accepts a lower rate of interest than stipulated at the time of deposits.

At present in RDC BANK the condition of the term deposits is as under.

No. of depositors 77,750

total deposit amt. 182,84,67,000.00

% of total deposit 63.84%

Page 35 of 97

4. RECURRING DEPOSIT

To encourage regular saving habits in the depositing public the bank in the country provide an opportunity to them to save regularly. According to their capacity and need and earn more than what saving deposit accounts offers to them. The following are the main features of the recurring deposits.

The deposits are made every month of fixed amount say Rs. 5,10,15,25 and so on. The account can be transfer from one bank to another in the country on request by customer. This account can be opened by every one competent to enter in to contract including the minor one. The account attract higher rate of interest. The customer is allowed to raise loan against his recurring deposit account to the maximum limit of 75% of the deposit he has made till the date of raising the loan.

As far as concerned with recurring deposits at the RDC Bank, than these are the features are provided to the recurring deposit holders.

Easy and simple account opening procedure. Speedy and timely services. Account can be opened with any convenient amount.

Page 36 of 97

LOANS
1. TERM LOANS It is one of the major sources of debt finance for a long term project. Term loans are generally repayable in more than a year but less than 10 years. These loans are offered by all Indian financial institutions. Term loans are generally secured through a first mortgage or by way of deposit of title deeds of immovable properties.

For the purpose of this loan is to invest in long term capital. Bank grants these loan 2 lacs to 25 lacs. Rate of interest charged on this loan is 10% to 13%. As a security a person has to mortgage any fixed assets whose reliable market value is enough in proportion of loan.

2. MORTGAGE LOANS

Any kind or traders, businessmen or an industrialist can get mortgage loan. Bank grants mortgage loan for the any purpose. Bank grants this type of loan Rs. 50,000 to maximum 10 lacs. Bank charges rate of interest on this loan is 12.5% to 13.5%. A person who is gating mortgage loan he has to mortgage land, building or any other fixed assets. A person has to give reference of two people who are depositor in the RDC Bank as guarantors. Loan repayment period is 3 years to 7 years.

Page 37 of 97

3. SECURED OVERDRAFT

Any kind of traders, businessmen, personally, professional & industrialist can get secured over draft. Bank grants secured overdraft for the purpose of fulfillment or short term working capital need in the business. Bank grants this type of over draft Rs. 1 lacs to maximum 100 lacs. Bank charged interest on this over draft is 10.75% to 14%. As a security a person has to mortgage any fixed assets whose reliable market value is enough in proportion of over draft.

4. PERSONAL LOAN

Any localize person can get this loan. Bank grants personal loan for the purpose of purchase fridge, T. V., washing machine or any other thing which can be useful for home management. Bank grants this type of loan Rs. 10,000 to maximum 50,000 or 70% to 90% of the quotation price of the product. Bank charges rate of interest on this loan is 11%. Applicants need to make such documents of purchase products of purchased product in favor of the bank as a security. A person has to give reference of two people who are depositor in the RDC Bank as guarantors. Loan repayment period is 3 years to 5 years.

Page 38 of 97

5. VEHICLE LOAN

Any kind of traders, businessmen, personally, professional or any person can get this type of loan. Bank grants personal loan for the purpose of purchase old or new vehicle for personal or business use. Bank grants this type of loan Rs. 15,000 to maximum 10, 00,000 or 70% to 90% of the quotation price of the product. Bank charges rate of interest on this loan is 11%. Applicants need to make such documents of purchased vehicle in favor of the bank & in RTO applicant need to register as a hire purchased vehicle as a security. A person has to give reference of two people who are depositor in the RDC Bank as guarantors. Loan repayment period is 3 years to 7 years. Quotation of vehicle, proof of guarantors income (one time only), RTO certificate & other documents are required with the application form.

Page 39 of 97

6. HOME LOANS

Any localize person can get this loan. Bank grants personal loan for the purpose of purchase or to build home. Bank grants this type of loan Rs. 15,000 to maximum 15, 00,000 or 70% to 90% of the price of the home. Bank charges rate of interest on this loan is 11.50%. Applicants need to make such documents of purchased home in favor of the bank & bank takes all the documents as a security. A person has to give reference of two people who are depositor in the RDC Bank as guarantors. Loan repayment period is 3 years to 15 years. Application form, other documents specified in the application form and if an applicant want to mortgage any assets than he need to give whole file of that assets and title report through advocate approved by bank only proof of guarantors income (one time only).

Page 40 of 97

7. Loan to Small Scale Industries:

A person who has his own business and wants to start his own business as a small scale sector can get this kind of the loan for the purpose of fulfillment of the short term working capital needs or to purchase new machineries or so on. A businessman can get loan 1 lacs up to 25 lacs and a person has to repay the loan in installment which should have already been decided. In case credit can withdraw money if there is no money in his account. Bank grants this loan against the raw material stock, and any mortgage properties. The insurance of the stock and mortgaged properties is taken by the bank as a security. Rate of interest on this loan 11 to 15%.

OTHER FACILITY

1. Safe Deposit Vault (locker facility) At RDC bank there is a proper locker department at ground floor here locker facility has been providing to the customer. Customer can keep all the ornaments, important documents and many other papers and many things. For every bank this facility is become just like primary function and for providing best customer service RDC bank is managing this service too. Any shareholder or depositor can easily get their personal locker of bank. There are mainly three types of lockers at RDC bank Small size locker, Medium size locker, and large size locker. And for to maintain best services RDC bank has different department and enough staff for locker department. Different charges and deposits for different locker are as under.

Page 41 of 97

Types of locker Small Large Medium

Yearly rent 200 300 250

Deposit 5000 15000 10000

2. ATM FACILITY

ATM has given a new dimension to banking by giving rise to self service banking. Customer have long been constrained by conventional banking services which have been characterized generally by fixed location and fixed timing on the other hand. Customers not desiring to keep much money on them expect their money to be available to them. Whenever and wherever they need money, 24 hours banking services is available for any time. ATM can be used for withdrawal of cash. For RDC bank it is a matter of great proud that it is pioneer in introducing ATM in the entire Saurashtra region in Co-Operative banking sector. At present RDC bank has four ATM. By this ATMs any customer can easily withdrawal maximum 10000 per day.

Page 42 of 97

AGRIULTURAL LOANS

1. Loans Under guide of government of India for the purpose of agriculture development the bank has decide to dabble there loans within three years for this purpose under (KCC) Kishan credit card the bank have pass loan of Rs. 647.14 Crores and NABAD have support of Rs. 160 Crores. 2. Medium term Agriculture Loan. As per the requirement of farmer which needs like, irrigation, S,R,T.O Cattle land purchase the bank have pass Rs. 32.70 crores and other tractor 7 trailer Loan of Rs. 44 crores. Page 43 of 97

3. Annual credit plan As per the guiding of reserve bank of India. The target for loan in district of Rs. 1910.19 Cr. Just RDC bank target was Rs. 1005.41 Cr. This was almost higher than half. 4. Smart Kishan Credit Card (KCC) Within the co-operative bank in our country Rajkot District Co-Operative bank is first who have started this facility. In this KCC the farmer can get emergency loan up to 10.000.

Page 44 of 97

INTRODUCTION
Human resources in any organization, be it public private of Co-Operative constitute perhaps the most vital assets of that organization. An organization will fail if its human resources are not competent to execute the work assigned to them. There is no getting away from fact that human resources represent a subsystem which dominates all other sub system to the organization. Moreover, people are the only assets of an organization that appreciate over a period of time while all the other assets depreciate. The more an organization is investing in human resources, the greater the return from the investment is likely to be and it has been rightly pointed to in one of the books of inter national Co-Operative alliance The gains accruing out of structural reforms can be best capitalized only it the personnel maintained by the CoOperative institution are in a position to execute the policies effectively. This implies the Page 45 of 97

need and necessity of proficient and capable human resources which is on e of the primary aims of ht human resource management. According to national institute of personnel management of India Personnel management is that part of management concerned with people at work and with their relationship within the organization it seeks to bring together men and women who make u an enterprise enabling each to make his own best contribution to its success both as an individual as a working group.

H. R. POLICY AND PROGRAMMES

Recruitment Selection Orientation Placement Employee remuneration Training & development Promotion & transfer 1. RECRUITMENT In case of RDC bank, the main source of recruitment is daily news paper advertisement. They also recruit employees by transfer and promotion. Generally as per the recruitment of the job they give advertisement in newspaper and collect the pool of application.

2. SELECTION Selection of people is easy but selection of right people is difficult task.

Page 46 of 97

Objective of selection process: Determine whether the applicant meets the qualification for a specific job To choose the applicant who is most likely to perform well in that job.

The selection procedure of RDC bank is quit simple. The stages of including in the selection process are as follows.

News paper advertisement Receipt of application Screening Arrangement and interview Selection Placement and confirmation

Page 47 of 97

3. ORIENTATION Through this process new employee can be aware of the atmosphere of the firm and also can be familiar with the other employee.. In any organization this process performs very vital role because this is the only process which can create better environment in the organization and a new comer can be aware about his working condition, his area of responsibility and everything about organization. Proper orientation process can be beneficial to both, a new comer as well as organization.

4. PLACEMENT Once an employee has been selected he should be placed on a suitable job. Putting the right man at the right job is as important as hiring the right person. Placement is a process of assigning a specific job to each one of the selected candidates. It involves assigning a specific rank of and responsibilities of an individual. It implies matching requirement of a job with the qualification of a candidate. In other words, placement is the determination of the job which an accepted candidate is to be assigned and his assignment to the job. As RDC bank is very careful about this process. And one thing is that, at the time of requirement only they hire new employees. So hire it is specified that for which job they are recruiting. After the final selection, they have been marking the job of the new employee.

5. EMPLOYEE REMUNERATION Remuneration is the compensation an employee receives in return for his or her contribution to the organization. Remuneration occupies an important place in the life of an employee. Standard of living of employee, states in the society, motivation, loyalty and productivity depends upon the remuneration. For the employee remuneration is significant because of its contribution to the cost of production. For human resource management, remuneration is the major function. The HR specialist has a difficult task of fixing wages and wage differentials acceptable to employee and their leaders. There are mainly 3 three components of employee remuneration. These are as follows.. Page 48 of 97

1) Wages and salary, 2) Incentives and 3) Non monitory benefits.

As far as RDC Bank is concerned PER EMPLOYEE AVERAGE SALARY FOR THE YEAR 2009-10 IS 304000.

6. TRAINING & DEVELOPMENT Training is the process of increasing the knowledge and a skill for doing a particular job. The purpose of training is basically to bridge the gap between job requirement and present competence of an employee. On the other hand development is long term education process utilizing a systematic and organized procedure by which managerial personnel learn conceptual and the critical knowledge for general purpose. As far as it is a continuous process there.RDC bank is working with advanced technologies. At every step better training and development is required.

7. PROMOTION AND TRANSFER Mobility and flexibility in the workforce are necessary to cope with the changing requirement of an organization. Job changes provide necessary flexibility, employees move from one job to another one through transfer & promotion.

Page 49 of 97

Promotion:: Promotion refers to advancement of an employee to a higher post carrying grater responsibilities higher status and better salary. It is the upward movement of an employee in the organizations hierarchy to another job commanding grated authority higher status and better working condition the in case of the RDC bank as it is Co-Operative sector they have to follow promotion policy of government is merit cum seniority in case of promotion they are not independent too.

Transfer::A transfer refers to a horizontal or literal movement of an employee from on a job to another in the same or organization with out any significant change in status any pay. It has defined as A literal shift causing movement of individual from one position to another. Usually without involving any marked change in duties as responsibility will needed of compensation.

OBJECTIVES.

To satisfy employee needs To better utilize employees To make the employee more versatile To adjust the work force To punish employee

So, the transfer is also important as far as concerned with RDC bank there is no specific transfer policy but according to requirement and for convenience of the employee they use to make transfer.

Page 50 of 97

Page 51 of 97

INTRODUCTION

Today, marketing is spread in every field of like hospitals, services, goods even politics and many more. In banking sector too the importance of marketing also can not measurable, still it has not developed in public sector it is only limited to foreign banks and private sector. The reason for success of foreign in India is only best marketing efforts. Today in banking sector there is a cutthroat competition among public sector, private sector and foreign bank.

Marketing is a human activity directs at satisfying the needs and wants of customers, there are five stages of bank marketing firstly marketing g is advertising, sales promotion and publicity, When all banks advertise and innovate, they look alike so, they should try to position themselves differently, even through symbols, logos or aggressive advertising so that the customer can distinguee between one bank and another and finally marketing is analyzing, planning and control.

At RDC bank though there is no specific marketing department. for marketing of different services but providing vest services to their customers and getting good customer satisfaction, and doing such efforts of marketing like promotion activities they are in directly getting benefits of the marketing. Today they are also planning for such continuous marketing efforts. And with in the few years they will have aggressive marketing department.

Page 52 of 97

PROMOTIONAL ACTIVITIES

Promotion tools are also essential in the banks marketing mix. We need personal selling in customer contact, development, and personal service. And so on. Similarly, bank marketing program need advertising as mass communication tool. The bank is a sponsor. It sends a message to prospective buyers (the audience) by means of a medium (The carrier of the message). An advertisement in bank marketing is a promise3 a promise of satisfaction to prospects who buy or use the service offered by the bank or who are willing to patronize the bank. Banks are using all media of advertisement such as newspaper, radio television, magazines etc., for advertising their services and for getting the business. Bank marketing also uses sales promotion devices such as point of purchase materials, advertising specialties (ball pens, calendars, diaries, notes pads etc.) brochures and booklets describing bank services, etc. a bank has also to use public relation as mode of promotion to build up and maintain its bright image in the community.

As far as it is concerned with promotion activity than RDC bank is not doing any personal selling but bank is believe in very strong goodwill and also best customer satisfaction they are using advertising they are giving their advertisement in news paper like Sandesh, Gujarat samachar etc. and also in banking magazine and for publicity they are organizing such shows like recently they have organized three bug shows. First in Morvi and second and third in RDC with Sunidhi Chauhan and Anu Malik and second with great Andnd Murti Guruma. By this way be using very simple and less expenses tools of marketing like advertising and publicity. They are getting goods response from society and for RDC bank work of work of month is their best publicity.

Page 53 of 97

Page 54 of 97

INTRODUCTION

Finance is the fuel of administration. Without adequate financing any business enterprise can raise its potentials for growth and success. And it would be worthwhile to recall what Henry Ford once remarked Money is an arm or leg. You either use it or lose it. This statement though apparently simple and quite meaningful, it brings home the significance of money or finance. In the modern money oriented economy finance is one of the basic foundations of all kind of economic activities.

Finance management is indeed the key to successful business operations. Without proper administration and effective utilization of finance, no business enterprise can utilize its potentials for growth and expansion. Organization and control of these function is important for all types of business units. Especially in public undertaking massive investment has so far been much less productive, it is necessary to organize the finance function such a manner that should help the business in achieving its basic objective with minimum cost.

According to Hoagland Financial management is concerned mainly with such matter as how of business corporation raises its finance and how it makes use of that

Page 55 of 97

FINANCIAL INFORMATION

The liberalization of the financial sector is the key for the over all liberalization process. Gradually, the structure of the financial market itself has begun to change, in the changing Financial Market; The Co-Operative Bank Of Rajkot Ltd. has market the progressive growth and profitability both the financial year 2004-2005 which is reflected in the following Financing since inception:

(RS. IN LACS)

Particulars Members Share Capital Deposit Advances Net Profit Working Capital

31-3-2010 890 Rs. 3071.45 Rs. 145598.68 Rs. 91518.05 Rs. 1350.00 Rs. 150539.103

31-03-2009 872 Rs. 2744.77 Rs. 124366.12 Rs. 90128.74 Rs. 1350.00 Rs. 127173.5721

Page 56 of 97

PROGRESS REPORT OF LAST FIVE YEARS OF RDC BANK

(RS IN CRORE)

Finance
1600 1400 1200 Amt 1000 800 600 400 200 0 2005-06 2006-07 2007-08 Year 2008-09 2009-10 677.7 797.5 982.1 1243.66 1455.1

Page 57 of 97

Profit
25 20 Amt 15 10 5 0 2005-06 2006-07 2007-08 Year 2008-09 2009-10 13.5 10.65 7.75 13.5 21

Own fund
160 140 120 Amt 100 80 60 40 20 0 2005-06 2006-07 2007-08 Year 2008-09 2009-10 119 130 109 133 141

Page 58 of 97

Deposit
1600 1400 1200 Amt 1000 800 600 400 200 0 2005-06 2006-07 2007-08 Year 2008-09 2009-10 678 798 982 1244 1466

Investment
900 800 700 600 500 400 300 200 100 0 797 676 471 297 820

Amt

2005-06

2006-07

2007-08 Year

2008-09

2009-10

Page 59 of 97

Working capital
2000 1500 Amt 1000 500 0 2005-06 2006-07 2007-08 Year 2008-09 2009-10 939 1488 1257 1780 1832

Page 60 of 97

STRENGTHS

Net NPA Zero since inception. Professional management & Co-Operate team spirit. Strong Brand equity. Fully computerization and Automation. Respectable ranking and position in Gujarats top Co-Operative banks. Profitability and sound liquidity. Branches in all most developed parts of saurashtra.

Page 61 of 97

WEAKNESS

Lack of marketing expertise. Lack of modern management concepts. Sometimes communication gap is found which signs lack of professionalism. Lack of scheduled status which may affect expansion of their business. Lower volume of advances due to higher rate or interest. Strong need for a more disciplines, smooth and sophisticated. Environment for working and customer service.

Page 62 of 97

OPPORTUNITIES

General insurance business at higher level. No. of branches can be increased in all overall state. After getting scheduled status we may apply multi state bank to expand their business. Introduction of various retail services. Tax consultancy can be provided by using the skills of the professional personnel and experienced seniors.

THREATS

Confidence crises in the co-operative banking sector can disturb the banks progress. Changes in govt. rules and regulation. Cut throat competition and entry of new foreign bank and its sound financial structure.

Page 63 of 97

Page 64 of 97

INTRODUCTION
Every business needs adequate liquid resources in order to maintain day-to-day cash flow. It needs enough cash to pay wages and salaries as they fall due and to pay creditors if it is to keep its workforce and ensure its supplies. Maintaining adequate w.c is not just important in the term, sufficient liquidity must be maintain in order to ensure the survival of the business in the long term as well. Even a profitable business may fall if it dose not have adequate cash flow to meet its liability as they fall due. Therefore, when business make investment decisions they must not only consider the financial outlay involved with acquiring the new machine or the new building, etc, but must also take account of the additional currant assets that are usually involved with any expansion of activity. Increased production tends to engender a need to hold additional stocks of raw materials and work in progress. Increased sales usually mean that the level of debtor will increase. A general increase in firms scale of operation tends to imply a need for greater levels of cash.

By minimizing the amount of fund tied up in current assets, firm are able to reduce financing costs and increase the funds available for expansion. The importance of efficient working capital management is indisputable. Business viability relies on its ability to effectively manage receivables, inventory, and payables. By minimizing the amount of funds tied up in current assets firm are able to reduce financing costs and increase the fund available for expansion. Much managerial effort is put into bringing non optimum levels of current assets and liabilities back toward their optimal levels. The definition of working capital is fairly simple; it is the difference between an organizations current and its current liabilities.

Page 65 of 97

Working capital is the difference between current assets and current liabilities:

Working Capital

Current assets Cash Marketable securities Accounts Receivables Inventory Prepaid Expenses

current liabilities Short-term Debts Current Portion of long term debt Accounts payables Accrued Liabilities

Page 66 of 97

NEED FOR WORKING CAPITAL

Suppliers or the market normally dictates the duration of the trade payables period in general. Therefore it may not match the current asset turnover period. In addition the conversion of current assets into cash may be deferred or Bad Debts may occur.

Technically, this is referred to as the operating or cash cycle. The operating cycle can be said to be at the heart of the need for working capital. The continuing flow from cash to suppliers, to inventory, to accounts receivable and back into cash is what is called the operating cycle. In other words, the term cash cycle refers to the length of time necessary to complete the following cycle of events: 1. 2. 3. Conversion of cash into inventory; Conversion of inventory into receivable; Conversion of receivables into cash.

Page 67 of 97

The

operating cycle consists of three phases.

Phase I- Cash gets converted into inventory. This includes purchase of raw materials, conversion of raw materials into work-in-progress, finished goods and finally the transfer of goods to stock at the end of the manufacturing process. Phase II- Inventory is converted into receivables as credit sales are made to customers. Firms, which do not sell on credit, obviously not have phase II of the operating cycle. Phase III- In the last phase represents the stage when receivables are collected. This phase completes the operating cycle. Thus, the firm has moved from cash to inventory, to receivables and to cash again.

SOURCES OF WORKING CAPITAL Sources of additional working capital include the following:

Existing cash reserves Profits (when you secure it as cash!) Payables (credit from suppliers)

Page 68 of 97

New equity or loans from shareholders Bank overdrafts or lines of credit Long-term loans If you have insufficient working capital and try to increase sales, you can easily over-stretch the financial resources of the business. This is called overtrading. Early warning signs include:

Pressure on existing cash Bank overdraft exceeds authorized limit Seeking greater overdrafts or lines of credit Part-paying suppliers or other creditors

Page 69 of 97

INTRODUCTION
Research means to collect the data & Analysis it with the help of a graph, Tabulation etc. & gives some finding which is useful to the Researcher & other needy people in their research project Here, I have collect secondary data of last working capital. I have collected last 3 annual reports & financial statement (B/S, P & L A/C) of the sampled unit is required to calculate the Ratio of the sampled unit. I have also analysis working capital of the sample unit.

Page 70 of 97

This information gives quite useful information to the sampled unit to improve their position as well as to the investor for investing their money in the RDC BANK.

TITLE OF THE RESEARCH PROBLEM

A research problem, in general, refers to some difficulty, which a researcher experiences in the context of either a theoretical or practical situation and wants to obtain a solution for the same.

Title of the research problem is Working capital analysis of RDC Bank. Why I choose this topic, as we all know that working capital is the main source of every bank and it is used to fulfill the routine requirement of the bank. And the reason behind to choose the RDC bank is that it is one of the largest nationalized bank in India.

OBJECTIVES OF RESEARCH
The first and foremost step of a researcher is to identify the research objective, so that it can become easy for the researcher to achieve the goal and might solve the research problem based on the objective. The purpose of research is to discover answers to questions through the application of scientific procedures. The main aim of research is to find out the truth which is hidden and which has not been discovered as yet. Though each research study has its own specific purpose, we may think of research objectives as falling into a number of following broad groupings: 1. To do analysis of Working capital of RDC Bank

Page 71 of 97

2. 3.

To know the stability and profitability of bank. To know the liquidity position of the bank.

COLLECTION OF DATA
There are only two way to collect the data. Primary Data Primary data are those which are collected for the first time and happen to be original Secondary Data Secondary Data are those which have already been collected by someone else and published somewhere METHOD OF PRIMARY DATA 1. Questionnaire method 2. Observation Method 3. Interview Method

SECONDARY DATA
Before using secondary data researcher must take care of the following points: 1. Reliability of data 2. Suitability of data 3. Adequacy of data

SOURCES OF SECONDARY DATA

Page 72 of 97

1. Internal Sources Employee Internal experts Suppliers Intermediaries 2. External Sources Government publication Commercial Industry specific sources

METHODOLOGY OF THE RESEARCH STUDY

1. 2.

Mainly it contains two types: Accounting tools Statistical tools

1. 2. 3. 4. 5.

Accounting tools include the following concepts. Cash flow statement Fund flow statement Comparative Statement Analysis Trend-percentage Analysis Ratio Analysis Statistical tools include the following concepts.

Page 73 of 97

1. 2. 3. 4. 5. 6. 7.

Mean Mode Medium Chi-square Test T Test Graphical method ANOVA Test As I am doing research work on working capital analysis of RDC Bank so I am only focusing on the statistical tools of chi-square test as explained below.

Hypothesis is usually considered as the principal instrument in research. Its main function is to suggest new experiments and observations. In fact, many experiments are carried out with the deliberate object of testing hypothesis. Decision-makers often face situations wherein they are interested in testing hypothesis on the basis of available information and then take decisions on the basis of such testing. Thus hypothesis testing enables us to make probability statements about population parameters. The hypothesis may not be proved absolutely, but in practice it is accepted if it has withstood a critical testing. HYPOTHESIS IS.. 1. Theory, suggestion, proposition, guess, assumption 2. Assumption or supposition to be proved or disproved (a question to resolve)

RESEARCH DETAILS
Method of data collection: Source of data collection: secondary method Internal source

Page 74 of 97

Research data: Sampling method:

3 years (2007-08, 08-09, 09-10) annual report of the bank. simple random sampling

Methodology of research study: statistical method Concept of statistical method: Hypothesis of research: Null hypothesis H0: There is no significant difference between cash & expenses Of RDCB to Working capital. Alternate hypothesis: Ha: There is a significant difference between cash & expenses Of RDCB to Working capital. chi square test

Page 75 of 97

INTRODUCTION As we know that working capital is the difference between the current Assets and current Liabilities. In RDC Bank current Assets is high compare to the current liabilities. Current assets are increase day by day. So this situation is good for the bank. For this situation we assume that bank is get highly situation in the market.

Page 76 of 97

APPLICATION OF CHI SQUARE TEST

The chi-square test is an important test amongst the several tests of significance developed by statisticians. Chi-square, symbolically written as 2 (Pronounced as Chisquare), is a statistical measure used in the context of sampling analysis for comparing a variance to a theoretical variance. It can also be used to make comparisons between theoretical populations and actual data when categories are used. Thus, chi-square test is applicable in large number of problems. The test is, in fact, a technique through the use of which it is possible of all researchers to:

test the goodness of fit; test the significance of association between two attributes, and Test the homogeneity or the significance of population variance. The formula for the chi-square is: -

2=

s *(n-1) P

WORKING CAPITAL

PERTICULARS

2007-08 Page 77 of 97

2008-09

2009-10

Current assets Cash 36,37,46,936.80 Balance in other Bank 5,42,55,69,169.48 Assignment for unpaid 3,28,52,870.45 workers dhiran Interest receivables Loan outstanding Bills for receivables Total (A) 26,62,14,692.00 7,55,48,82,151.84 96,69,003.20 13,65,29,34,823.7 0 Current liabilities Borrowing Bills for collection Interest paid on loan Other liabilities Assignment for unpaid bank interest Assignment for 3,45,03,22,000.00 96,69,003.20 2,03,29,699.00 16,24,89,537.36 23,34,857.79

30,27,56,416.07 6,79,02,49,426.38 3,05,95,421.84 35,73,96,379.00 9,01,28,73,538.38 1,80,38,318.70 16,51,19,09,500.3 0 3,34,98,73,500.00 1,80,38,318.70 2,13,78,185.00 37,25,50,705.44 21,16,153.18 3,05,95,421.84 3,79,45,52,284.16 12,71,73,57,216.2 0

35,58,60,594.95 7,29,83,71,200.80 2,66,96,303.13 28,77,04,390.00 9,15,18,04,857.65 1,20,42,570.74 17,13,24,79,917.2

1,72,33,69,200.00 1,20,42,570.74 84,74,535.00 30,63,55,835.85 16,31,078.42 2,66,96,303.13 2,07,85,69,523.14 15,05,39,10,394.10

unpaid 3,28,52,870.45 3,67,79,97,967.80 9,97,49,36,855.90

workers dhiran Total (B) Working capital (A-B)

HYPOTHESIS TESTING
CHI-SQUARE TEST

1. CASH WITH RDC BANK TO WORKING CAPITAL

H0: There is no significant difference between Cash with RDCB to Working Capital. H1: There is significant difference between Cash with RDCB to Working Capital.

Page 78 of 97

Computation of test statistics:

Year 2007-08 2008-09 2009-10

X 3.65% 2.38% 2.36%

Year 2007-08 2008-09 2009-10 TOTAL

X 3.65% 2.38% 2.36% 8.39%

(X-X) X = 2.80 0.85 -0.42 -0.44 0.00

(X-X)2 0.7225 0.1764 0.1936 1.0925

2=

s *(n-1) P

s = (Xi-X) (n-1) = 1.0925 (3-1) = 0.5463

p= ESTIMATED VALUE = 2.8 = 3

2=

s *(n-1) P

= 0.5463 (3-1) Page 79 of 97

3 = 0.3642 Degree of Freedom: = (n-1) = (3-1) =2 5% At level of 5 % significance critical value is 5.991

Level of Significance: Critical Value:

Conclusion: Critical Value > Calculated Value.

Here the calculated value of chi-square is 0.3642 and the critical value at 5% level of significance is 5.991. Hence taken sample accepted region null hypothesis is accepted.

2. BALANCE IN OTHER BANK WITH RDC BANK TO WORKING CAPITAL

H0: There is no significant difference between balances in other bank with RDCB to Working Capital. H1: There is significant difference between balances in other bank with RDCB to working capital.

Computation of test statistics:

Page 80 of 97

Year 2007-08 2008-09 2009-10

X 54.39% 53.39% 48.48%

Year 2007-08 2008-09 2009-10 TOTAL

X 54.39% 53.39% 48.48% 156.26%

(X-X) X 52.09 2.3 1.3 -3.6 0.00

(X-X)2 5.29 1.69 12.96 19.94

2=

s *(n-1) P

s = (Xi-X) (n-1) = 19.94 (3-1) = 9.97

p= ESTIMATED VALUE= 52.09 = 52

2=

s *(n-1) P

Page 81 of 97

=9.97 (3-1) 52 = 0 .38 Degree of Freedom: = (n-1) = (3-1) =2 =5%

Level of Significance:

Critical Value: At level of 5 % significance critical value is 5.991

Conclusion: Critical Value > Calculated Value.

Here, the calculated value of chi-square is 0.38 and the critical value at 5% level of significance is 5.991. Hence taken sample accepted region. So, null hypothesis is accepted.

3. INTREST RECEIVABLE WITH RDC BANK TO WORKING CAPITAL

H0: There is no significant difference between interest receivable with RDCB to Working Capital. H1: There is significant difference between interest receivable with RDCB to Working Capital.

Computation of test statistics:

Page 82 of 97

Year 2007-08 2008-09 2009-10

X 2.67% 2.81% 1.91%

Year 2007-08 2008-09 2009-10 TOTAL

X 2.67% 2.81% 1.91% 7.39%

(X-X) X =2.46 0.21 0.35 -0.55 0.00

(X-X)2 0.04 0.123 0.303 0.466

2=

s *(n-1) P

s = (Xi-X) (n-1) = 0.466 (3-1) = 0.233

p= ESTIMATED VALUE = 2.46 = 2

2=

s *(n-1)

Page 83 of 97

P = 0.233 (3-1) 2 = 0.233 Degree of Freedom: = (n-1) = (3-1) =2 =5% At level of 5 % significance critical value is 5.991

Level of Significance: Critical Value:

Conclusion: Critical Value > Calculated Value. Here, the calculated value of chi-square is 0.233 and the critical value at 5% level of significance is 5.991. Hence taken sample accepted region null hypothesis is accepted.

Page 84 of 97

4. BORROWING WITH RDC BANK TO WORKING CAPITAL H0: There is no significant difference between borrowings with RDCB to Working capital. H1: There is significant difference between borrowing with RDCB to Working capital.

Computation of test statistics:

Year 2007-08 2008-09 2009-10

X 34.59% 26.34% 11.45%

Year 2007-08 2008-09 2009-10 TOTAL

X 34.59% 26.34% 11.45% 72.38%

(X-X) x =24.13 10.46 2.21 -12.68 0.00

(X-X)2 109.41 4.88 160.78 275.07

2=

s *(n-1) P

Page 85 of 97

s = (Xi-X) (n-1) = 275.07 (3-1) = 137.54

p= ESTIMATED VALUE = 24.13 = 24

2=

s *(n-1) P

= 137.54 (3-1) 24 = 11.46 Degree of Freedom: = (n-1) = (3-1) =2 5% At level of 5 % significance critical value is 5.991

Level of Significance: Critical Value:

Conclusion: Critical Value < Calculated Value.

Here, the calculated value of chi-square is 11.46 and the critical value at 5% level of significance is 5.991. Hence, taken sample fall in accepted region so hypothesis is rejected.

Page 86 of 97

. 5. INTREST PAID ON LOAN WITH RDC BANK TO WORKING CAPITAL. H0: There is no significant difference between interests paid on loan with RDCB to working capital. H1: There is significant difference between interest with RDCB to Working capital.

Computation of test statistics:

Year 2007-08 2008-09 2009-10

X 0.23% 2.24% 0.20%

Year 2007-08 2008-09 2009-10 TOTAL

X 0.20% 0.17% 0.06% 0.43%

(X-X) X =0.14 0.06 0.03 -0.08 0.00

(X-X)2 0.0036 0.0009 0.0064 0.0109

2=

s *(n-1) P

Page 87 of 97

s = (Xi-X) (n-1) = = 0.0109 (3-1) 0.0055

p= ESTIMATED VALUE = 0.14

2=

s *(n-1) p

=0.0055 (3-1) 0.14 = 0.079 Degree of Freedom: = (n-1) = (3-1) =2 5% At level of 5 % significance critical value is 5.991

Level of Significance: Critical Value:

Conclusion: Critical Value > Calculated Value. Here, the calculated value of chi-square is 0.079 and the critical value at 5% level of significance is 5.991. Hence taken sample accepted region null hypothesis is accepted.

Page 88 of 97

6. OTHER LIABILITY WITH RDC BANK TO WORKING CAPITAL.

H0: There is no significant difference between other liabilities with RDCB to working capital. H1: There is significant difference between other liabilities with RDCB to Working capital.

Computation of test statistics:

Year 2007-08 2008-09 2009-10

X 1.63% 2.93% 2.04%

Year 2007-08 2008-09 2009-10 TOTAL

X 1.63% 2.93% 2.04% 6.60%

(X-X) X = 2.20 -0.57 0.73 -0.16 0.00

(X-X)2 0.325 0.533 0.026 0.884

2=

s *(n-1) P

Page 89 of 97

s = (Xi-X) (n-1) = = 0.884 (3-1) 0.442

p= ESTIMATED VALUE = 2.2 = 2

2 =

s *(n-1) p

= 0.442 (3-1) 2 = 0.442 Degree of Freedom: = (n-1) = (3-1) =2 =5% At level of 5 % significance critical value is 5.991

Level of Significance: Critical Value:

Conclusion: Critical Value > Calculated Value.

Here, the calculated value of chi-square is 0.442 and the critical value at 5% level of significance is 5.991. Hence taken sample accepted region null hypothesis is accepted.

Page 90 of 97

LIMITATION OF STUDY
Some of the limitation of the work of research of working capital is as under. Accuracy of the data Whatever the data provided by the sampled unit it may be wrong. So, the ratio of the sampled unit may be not accurate or perfect. Time limitations Whatever the research has been done by researcher in a particular time and researcher may require extra time to researcher the working capital analysis of the sample unit. Skill of the researcher Research work is totally depends upon the researcher. If researcher is less skillful & whatever the ratio found out by researcher, it may be wrong.

Page 91 of 97

FUTURE PLANS

To maintain excellence in operation & management by bringing I transparency & integrity.

To emerge as symbol of public trust & confidence by creating a positive image.

To ensure speedy & satisfactory customer services through continuous product innovation & aggressive, marketing strategies.

To adopt policy for technological up gradation& advancement to boost up total computerization & inter branch connectivity for all the branches.

To develop & motivate human resources there by cultivating processional culture in the banking operations.

To strive for continuous growth & profitability through branch expansion & modernization.

To introduce more ATM centers & various plastic products for better customer services.

To maintain the asset quality at the optimum level by continuous efforts for credit risk management.

To explore more non-fund based business like latter of credit, bank guarantee, custodial services to increase banks non interest income.

To achieve business turnover of Rs.650 cores & net worth of 80 cores by 2010.

Page 92 of 97

To continue to maintain the NET NPA at ZERO level.

To plan Banks balance sheet with judicious ALM.

Page 93 of 97

Page 94 of 97

Each and every beginning has as end in the same ways; each and every introduction has a conclusion. I am thankful and express my gratitude to all those who has directly or indirectly co-operated me in preparation of my project report and suggested some new ideas.

Thus, the research work on working capital analysis of RDCB, gives me an exact idea about the financial stability and working capital management of a bank.

So its an opportunity to do a research work and to gain some practical knowledge from this course through the research study.

Page 95 of 97

Page 96 of 97

Books Referred Financial Management by I.M.Pandey Financial Management by Khan & Jain Research Methodology by C. R. Kothari Annual report of last Three years of RDC Bank Websites

www.rndcbank.in rdcbank@bsnl.in

Page 97 of 97