A REPORT ON VIJAY COMMERCIAL CO- OPRATIVE BANK LTD. (VIJAY BANK) Submitted To :: - SAURASHTRA UNIVERSITY Submitted By :: - BHALANI SUNIL A. (S.Y. B.B.A) Guidance :: - MISS KHYATI PANDYA Academic Year :: - 2006-2007 College :: - R.P.BHALODIA COLLEGE RAJKOT. (1) PREFACE To be successful in any field, just academic qualification does not work. One has to have detailed knowledge about the practical aspect on it. Practical training is a heart of management education. Being unlearned about this, the practical study of an industry has been included in the curriculum of Bachelor of Business Administration (B.B.A) course by Saurashtra University. As a student of Second Year B.B.A., I have prepared a project report on Vijay Commercial Co-operative Bank Ltd. This project is based on the information colleted from various departments of the bank. A sincere effort has been made to cover all aspect and provide the latest information about bank’s policies and practices Sunil A. Bhalani (2) ACKNOWLEDGEMENT The preparation of the report is my own work, but I have taken help from many persons. I am thankful to all those persons who helped me in activity out this work. First of all I would like to thank Saurashtra University who give me this golden opportunity. I express my deepest of gratitude the manager (Banking) Mr.M.D.Thakar and mr. Anuragbhai mankad of “VIJAY COMMERCIAL CO-OPERATIVE BANK LTD.”and all the members who provided all the necessary information. He gives me grate pleasure in thanking MISS.KHYATI PANDYA who helped me out in my work. Without him ever ready help, whole hearted guidance, never ending encouragement and enthusiasm. It was difficult to bring this report to its present form. I would be failing my duty if I will not mention thanks to family members, relatives and friends to helping me throughout. Sunil A. Bhalani (3) DECLARATION I, the undersigned SUNIL A. BHALANI student of S.Y.B.B.A. from the Shri R.P.BHALODIA COLLEGE of Commerce & Business management & Computer studies, declare that this project report is prepared by me. I had taken a help of my college and professor for the purpose of guidance only and to add that, myself prepare this report. Sunil A. Bhalani (4) CONTENTS Preface 2 Acknowledgement 3 Declaration 4 Banking Sector In India 9 General Information Of Co-Op. Banks 12 - 20 Introduction 13 Definition Of Co-Operative 14 Principles & Characteristics 15 Types Of Co-Operative Bank 17 Role Of Co-Operative Bank 19 Registration & Licensing 20 VIJAY BANK At Glance 21 - 28 Introduction 22 Corporate Mission 23 The Executive Committee 24 Branch Network & Structure 25 Awards & Accolades 26 Relationship Management 27 (5) Services At The VIJAY BANK 29 - 40 Introduction 30 Depository Services 31 - 33 Current Deposit 31 Saving Deposit 32 Fixed Deposit 33 Advance Services 34 - 38 Business Loan 34 Term Loan 35 Personal Loan 36 Loan against NSC / KVP / LIC. 37 Home Loan 38 Other Services Safe Deposit Vault 39 H. R. M. At The VIJAY BANK 41 - 53 Introduction 42 Human Resource Policies & Program 43 Recruitment 45 Selection 46 Orientation 47 Placement 48 Employee Remuneration 49 Training & Development 51 Promotion & Transfer 52 (6) Marketing At The VIJAY BANK 54 - 57 Introduction 55 Promotional Activities 56 Marketing Research & Information 57 Finance Management At The VIJAY BANK 58 - 64 Introduction 59 Financial Planning 60 Capital Structure Of The VIJAY BANK 61 Capitalization 62 Cash Management 63 Finance Information 64 (7) S. W. O. T. Analysis 65 Future Plan 68 Suggestion 70 Conclusion 72 Bibliography 74 (8) Banking Sector In India (9) BANKING SECTOR IN INDIA The importance of banking as the nerve sector of economic development can not be over emphasized. Banking industry has acquired a key position in mobilizing resources for defense & for socio economic development of the country. It is said that “Bank which are that need of & great wealth of our country have got to be kept very sacred. Just as water is for irrigation, good banks are for the country’s industry & trade.” Since the beginning of planning in India banking industry has grown not only in size but also in depth this industry has become one big complex. Today banks have become a part & parcel of our life. Ti was the time when the dwellers of city alone could enjoy their services. Now banks offer access to even a common man & their activities extend to areas hither to untouched & after the globalization & liberalization policy of India, many foreign banks have entered in Indian market with different services & innovation technologies. Apart from their traditional business oriented functions, they have now come out to fulfill national responsibilities. Today’s banks cater to the needs of agriculturists, industrialist, traders, women, students & to all other sections of the society. Thus they accelerate the economic growth of a country & steer the wheel of the economy towards it’s goal of “Self reliance in all fields.” Hence today banking sector has become the lifeline of the economy. (10) In present age in India there are many banks including foreign banks, public sector, private sector, commercial banks & co-operative banks. (11) General Information of Co-Operative Banks (12) INTRODUCTION 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. Once the Mahatma Gandhiji has remarked that “there is sweetness in co-operation; there is no one who weak or strong among those who co-operate. Each is equal to other.” 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 co-operative 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. (13) DEFINITION OF CO-OPERATION Co-operation has been defines in slightly different ways in various sciences & by various scholars. This is due to its flexible nature which can lend itself to variety of purpose & social system, in order to have a through understanding of the concept some well known definitions are discussed below. “Co-operation is a form of organization where in persons voluntarily associate together as human beings on a basis of equality, for the promotion of economic interests of them selves.” -Hubert Calvert “Another protagonist is an association for the purpose of joint trading, originating among the weak & conducted always in an unselfish spirit, on such terms that all who are prepared of assume the duties of membership my share in it’s reward in proportion to the degree in which they make use of there association.” - C. R. FAY (14) PRINCIPLE & CHARACTERISTICS 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, colour, 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. (15) EQUAL VOTING RIGHTS ::- Equality is the quintessence of co-operative organization. Members have equal voice in the management of it’s affairs with the underlying principle “ ONE FOR ONE VOTE .“ SERVICE MOTIVE ::- It is mainly intended to goods first to it’s 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. (16) TYPES OF CO-OPERATIVE BANKS There are mainly three types of co-operative banks in India. State co-operative banks Central co-operative banks Urban co-operative banks 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. (17) URBAN CO-OPERATIVE BANKS ::- 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. (18) 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. (19) 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. (20) Vijay Bank At A Glance (21) INTRODUCTION Vijay commercial co-operative bank ltd. popularly known as Vijay bank is established on 25 - 11 – 1975. At present Vijay bank has achieved a key position in the market of Rajkot. It has 4 branches in all over Rajkot including main branch with the advanced technologies and educated staff, as it said that “In the emerging competitive business environment Co-operative banks who adhere to strict financial discipline. Only will survive” On this basis at present Vijay bank is becoming more prestigious in the banking sector. (22) 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. (23) THE EXECUTIVE COMMITTEE Chair man : Mr. Pravinbhai Dholkia Vice chair man: Mr.Vimaybhai Rajguru Gen. Manager : Mr.Bakulbhai Doshi Managers : Mr.M.D.Thakar Mr.D.H.Sagar Directors : Mr. Gunvantbhai Delavala Mr. Vajubhai kotak Mr. Bhaichandbhai gadhiya Mr. Kalpakbhai doshi Mr. Mukeshbhai doshi Mr.Rameshbhai dhetiya Dr. Jitendrabhai amlani Dr. Kamalbhai parikh (24) BRANCH NETWORK & STRUCTURE 1 Main Branch. “Vijay bhavan” kanak Road Rajkot –360001. Phone : 2222785, 2234748 2 Marketing Yard Branch Near marketing yard, Rajkot. Phone : (0281) 2704575 3 Sorthiya Vadi Branch. 80feet Road, Rajkot. Phone : (0281) 223420 4 Stock Exchage Branch Sadar bazar, Rajkot. Phone : (02821) 2490122 (25) AWARDS & ACCOLADES 1) ‘Vijay Bank’ has got SAHKAR BHARTI NATIONAL AWARD. 2) The has also got NATIONAL VIKAS JYOTI AWARD (26) RELATION SHIP MANAGEMENT The importance of relationship can not be measurable in our life. In our life we have to maintain such relation, we can not across it. In earlier we use to call it maintenance for relation but now a days it is being called as relationship management. Without maintaining relation, firm can not go further or can not get development. Because without customer or employee, who will give importance to the organization. But an organization needs to keep its eye on every side and need to manage every relation. For every organization there are main three relations such as customer relation, employee relation and social relation. EMPLOYEE RELATION To provide best service to customer it would be difficult task for Vijay bank if there would not proper human resource management. In success of any organization, relationship between employee and employee, employee and management employee and labours etc. should be good. Vijay bank takes care it’s employee just like a family member. And not only looks after their intelligence but also takes care of there emotional and spiritual quotient. Bank has maintain healthy relation with there employee, bank also tries to satisfied there need. (27) SOCIAL RELATION Bank has maintained health relation with society also. Society consist of other bank, government, businessman etc. bank has to maintain good relation with societal factor. So by this way for Vijay bank relationship management is as important as other management and as a result of good relationship management, today bank has very strong market position and goodwill in society. CUSTOMER RELATION Vijay bank believes that customer satisfaction is it’s best reward by providing best services so customer is a king for Vijay bank. Bank always tries to maintain healthy relation with customer. (28) Service Of The Vijay Bank (29) INTRODUCTION 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 it’s 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 today’s 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 people’s 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 Vijay Bank out of these services most of services are being served. Not only that but also they are providing Cash card facility, Demand draft facility & many other services. (30) CURRENT DEPOSIT Current account refers to regularity of transecting in account with in banking hours on all working day. The banker’s 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. (31) 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. (32) FIXED 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. . (33) BUSINESS LOAN Any kind of traders, businessmen or a person, who is going to start a new business, can get business loan. Bank grants business loan for the purpose of fulfillment or short term working capital need in the business. Bank grants this type of loan Rs. 2 lacs to maximum 10 lacs. A person who is gating business loan having repaying capacity and mortgage land, building or any other fixed assets. Document of properties have to be given to the bank by a person. Bank takes all these documents as a security. A person has to give reference of two people who are depositor in the Vijay Bank as guarantors. NECESSARY DOCUMENTS ARE… Application form, other documents specified in the application form, if applicant want mortgage than he need to submit the whole file of that assets valuation report of that assets. Proof of guarantor’s income. (34) TERM LOAN 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. Any business operator for the purpose of purchase necessary building, build a building or purchase new machinery. For the purpose of this loan is to invest in long term capital. Bank grants these loan 2 lacs to 10 lacs. Rate of interest charged on this loan is 11%. As a security a person has to mortgage any fixed assets whose reliable market value is enough in proportion of loan. (35) 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 90% of the quotation price of the product. Bank charges rate of interest on this loan is 10.5%. 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 Vijay Bank as guarantors. Loan repayment period is 3 years to 5 years. (36) LOAN AGAINST NSC, KVP, LIC. Any person who should have share certificate on his own name or any LIC policy holder. Bank grants loan for any purpose. Bank grants this type of loan 90% of the price of the NSC, KVP, and LIC. Bank charges rate of interest on this loan is 11%. Applicant need to give share certificate or LIC policy. Applicant has to repayment this loan within the due date of that certificate or policy. Application form, other documents specified in the application form and if an applicant has to give Share certificate or policy than need to sign in favor of the bank. (37) . HOME LOAN 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 up to 10, 00,000. Bank charges rate of interest on this loan is 12%. 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 Raj Bank as guarantors. Loan repayment period is 3 years to 10 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 guarantor’s income. (38) SAFE DEPOSIT VAULT Safe Deposit Vault (locker facility) At Vijay bank there is a locker department at main branch and marketing yard branch 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 Vijay bank is managing this service too. Any shareholder or depositor can easily get their personal locker of bank. There are mainly two types of lockers at Vijay bank Small size locker and large size locker. And for to maintain best services Vijay bank has different department and enough staff for locker department. Different charges and deposits for different locker are as under. Types of locker Yearly rent Deposit Small 350 10000 Large 500 15000 (39) And for the management of this locker department they are mainly follow these activities. They have locker attendance register in which the identification, address, full name and signature of locker holder are being maintained. Before any locker holder open his/her personal locker the staff member has been verifying the signature of that parson and than they allow him to open locker. They are also maintained time register in which the entry time and exist time a locker holder is being written. So this is very essential function for Vijay Bank. (40) H. R. M. At The Vijay Bank (41) 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 Co-Operative institution are in a position to execute the policies effectively”. This implies the 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 it’s success both as an individual as a working group.” (42) H. R. POLICY AND PROGRAMMES A sound foundation for selection of the right kind of human resources is laid with the formulation of sound human resources policies. According to William R. Spiegel a human resources policy can be defined as, “A body of principles and rules of conduct that governs the enterprises in it’s relationship with it’s employees. Thus the sound personnel policies set the tome for proper administration of the personnel programmers, So as to achieve the objective of the organization. As Vijay Bank is one of the leading Co-Operative bank in the Co-Operative sector, though its performance is very good but than also such policies for human resources they can not make by their own. It has to follow the rules of policies given by the government and RBI so in the matter of the personnel policies Vijay Bank is restricted to some level. Than also the bank have adopted a policy of recruiting only CA and MBA for their management level for better management. So, by this way where they get chance they are making or improving personnel policies at Vijay Bank. (43) The next important stage in the selection process is the human resource planning. “Planning applied in the field of personnel” it is the comprehensive and on going process. Broadly conceive human resource planning as Thomas H Patten Jr. states, “Human resource planning is process by which an organization ensures that it has right no. and kinds of people in the right place at the right time doing the things which they are economically most useful.” In the Vijay bank there is a very educated staff as it is concerned with the human resource planning recently they has adopted policy of selection only C.A. & M.B.A. For their human resource has as far as concerned with the human resource planning. There is no long term planning but at a time or requirement of staff they used to recruit staff either out side or from with in the firm through transfer or promotion. (44) RECRUITMENT Among the function of human resource manager, one man function is to procure best people for their organization, means search of prospective employees to suit the job recruitment. A firm has to pass through well and good recruitment process for having best human resource this recruitment can be possible through many sources. A firm can recruit proper candidate mainly through two success recruitment sources these are as under. Recruitment Sources Internal sources External sources 1) Transfer 1) Advertisement 2) Promotion 2) Education institutes 3) Relative & friends 3) Placement agencies 4) Labours contractor In case of Vijay bank, the main source or 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. (45) SELECTION Managing people is not easy but it can be made easier if you make sure that you have selected the right people in the first place. And also it said that “selection of people is easy but selection of right people is difficult task.” The selection procedure is concerned with securing relevant information about an applicant is secured. The objective of selection process is to determine whether the applicant meets the qualification for a specific job and to choose the applicant who is most likely to perform well in that job. Thus an effective selection program is a non random process because those selected had been choose on the basis of the assumption that they are likely to be “better” employees then those who have been rejected. Selection process or activities typically follow a standard pattern being with an initial screening of applicant, interview and concluding with final employment decision. The selection procedure of Vijay bank is quit simple. The stages of including in the selection process are as follows. New paper advertisement Receipt of application Screening Arrangement and interview Selection Placement and confirmation (46) ORIENTATION After the selection of employee, management of the firm has to pass through such process. So new employee can be aware of the atmosphere of the firm and also can be familiar with the other employee. This process is called orientation or induction. 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. (47) 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 Vijay 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. (48) 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….. 1) Wages and salary, 2) Incentives and 3) Non monitory benefits. As far as it is concerned with the Vijay bank, there is a specific policy of employee remuneration formed by RBI and govt., and it self also. So and also for the management of employee remuneration there is a specific administration department which cares of wages and salary and all things about remuneration. WAGES & SALARY :: - Wages represent Hourly rates of pay and, salary refers to the monthly rate of pay irrespective of the number of hours put by an employee. Wages and salaries are subject to annual increments they differ from employee to employee and depend upon the nature of job seniority and merit. (49) INCENTIVES ::- Incentives are also called ”payment by result” are paid in addition to wages and salaries. Incentives depend upon productivity, sales, profit or cost reduction efforts there are. 1) Individual incentive schemes and 2) Group incentive program Individual incentive are applicable to specific employee are applicable to specific employee performance. Where a given task demands group effort for completion, incentives are paid to the group as a whole. The amount is later divides among incentives refer to variable rewards granted to the individual in terms of changes in specific results in organizational setting besides wages and salaries, employees are paid incentives depending upon their performance. Incentives payment is quite substantial and is paid as regularly as wages and salaries. The primary advantage of incentives is the inducement and motivation of workers for higher efficiency and grater output. It option schemes and the like perquisites are offered to retain competent executives. NON MONITORY BENEFITS ::- These include challenging job responsibilities. Recognition of merit, growth prospects, competent supervision, comfortable working condition and job sharing. As far as Vijay Bank is concerned that is specified department who cares about employee remuneration. Apart from salaries they are also provides bonus (one month salary) also provides provident fund scheme and gratuity and also VRS scheme, group insurance too. (50) TRAINING & DEVELOPMENT Training is the process of increasing the knowledge and skills for doing a particular job. It is an organized procedure by which people learn knowledge and skills for a definite purpose. The purpose of training is basically to bridge the gap between job requirement and present competence of an employee. Training is aimed at improving the behavior and performance of a person. It is a never ending or continuous process. In any organization their should be proper training program to improve employee resources, as well as organization development. Training involves helping an individual learn how to perform his present job satisfactorily. 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. So in the any organization the importance of the training and development is very vital, nobody can ignore it. As far as it is a continuous process there. Vijay bank is working with advanced technologies. At every step better training and development is required. At present every employees of the firm are getting trained by its own EDP department n advanced computer technologies. They are also organizing internal seminar for improvement of the firm and also they are sending their employees outside like Ahemdabad, and Mumbai for the better development. As it is banking firm there is continuous training and development program organized by other banking firm and association for improvement of whole banking sector in India. (51) 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. So the importance of employee movement in the organization in very important. 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 organization’s hierarchy to another job commanding grated authority higher status and better working condition when an employees is assigned a higher level job with more pay and powers he is said the promoted promotion may be temporary or permanent depending upon the needs of the organization so this is just like tool which can be useful in two way one way it is a motivation second way it becomes a source of recruitment from with in a organization so the promotion in the organization is who is present as other activities in case of the Vijay 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. (52) 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. The need for transfer may grid due to several reason transfer mane of which the following objective. To meet organizational need To satisfy employee needs To better utilize employees To make the employee more versatile To adjust the work force To provide relief To punish employees. The transfer is beneficial in many ways the benefits of the transfer is as under Increase in productivity and effective need of the organization. Greater job satisfaction to employees Stabilize fluctuation work needs Improve employee skills Remedy for faulty placemen Develop employees for further promotions Avoid monotony and boredom. So, the transfer is also important as far as concerned with Raj bank there is no specific transfer policy but according to requirement and for convenience of the employee they use to make transfer. (53) Marketing Department At Vijay Bank (54) 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, secondly marketing is smiling and Co-friendly atmosphere, thirdly marketing is innovation like cheques with drawls on fixed deposits, fourthly marketing is positioning. 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 Vijay 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. (55) PROMOTIONAL ACTIVITIES Promotion tools are also essential in the bank’s marketing mix. We need personal selling in customer contact, development, 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 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 Vijay 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 for publicity they were organised international kite festival at race course before 3 years. (56) MARKETING RESEARCH AND INFORMATION Good marketing decisions are not made in a vacuum. Hence, even in bank marketing. We need marketing research and information to enable bank executive to make sound decisions. The increase in the use of marketing research in bank marketing is due to two forces: competition pressures to be right, and Customer – orientation in marketing planning and program. Banks are now establishing a separate marketing organization. Conduction marketing research, setting up sales training program and adopting sales promotion divides promotion devices to attach customer we have special bank advertisement through radio. T.V. and newspapers. Marketing research may be defines as “The scientific and controlled process of gathering of none routing, marketing information, helping management to solve marketing problems.” As far as it concerned with the marketing research process at Vijay bank. They have been continuously doing such research from beginning. But one positive point for marketing research is that they not doing any big expenses for marketing research and for executives. Bank’s staff member themselves goes to market and gathers requited information or data. Such information or data they are collection from direct RBI or other banks. So, by this way they are getting benefits by using marketing research process. (57) Finance Department At Vijay Bank (58) INTRODUCTION Finance is the fuel of administration. Without adequate financing no 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 it’s potentials for growth and expansion. Organization and control of these function is important for all types of business units. Specially in public undertaking massive investment has so far been much less productive, it is necessary to organize the finance functioning such a manner that should help the business in achieving it’s basic objective with minimum cost. According to Hoagland “Financial management is concerned mainly with such matter as how of business corporation raises it’s finance and how it make use of that.” (59) FINANCIAL PLANNING Planning is very necessary for the smooth running of the business can not be carried on without planning. Planning means deciding in advance what is to be done for each functional area of management. The planning of each area should link to the objectives of the organization. Financial planning means deciding in advance the financial activities to be carried on to organization. So, the basic purpose of financial planning is to make sure that adequate funds are raised at minimum cost and they are used widely. A proper planning of the business on one hand and to allow a fair return to their contribution on the other. Thus financial planning includes the following… 1) Determination of financial objectives. 2) Formation of financial policy. 3) Development of financial procedure. In Vijay Bank, the financial planning has been done through proper management in various areas like liquidity planning, investment planning, profit planning, cash management etc. (60) CAPITAL STRUCTURE OF THE VIJAY BANK Capital structure decision is yet another important area under financial management. Capital structure refers to the mix or proportion of firm’s permanent long term financing represented by debt preference must ensure the maximization of wealth of shareholders so even the capital structure decision must be taken in the light of wealth maximization objectives. That particular mix of debt and equity which maximizes the value of the firm is known as optimum capital structure in simple word capital structure refers to the composition of capital. Capital structure = Long term debts + Preference share capital + Equity share capital + Reserves. 1. Capital Rs. 690,692,625.95 2. Reserves & surplus Rs. 706,814,95.80 3. Deposit Rs. 575,373,371.96 4. Borrowings Nil 5. Other liabilities & provision Rs. 77,34,780.66 (61) CAPITALIZATION Capital plays an important role in any business at the time of corporation of the business, it is the first problem before promotes to decide how much capital is to be required and in what form. It is not an easy task. A financial plan is to be prepared form the purpose of explaining the abort term and long term needs of finance to the company. Sever consideration would be kept in mind such as cost of capital fair return to the contributors of capita risk involved flexibility etc. while taking decision in this regard it required proper capitalization. Proper capitalization reveres to the total amount of capital required in the long run to run the business smoothly capitalization uses in its quantities aspect and reveres to the amount at which a company’s business can be valued most of the traditional authors define the terms in this sense the sum total of the par value of all share. After definition of capitalization are being reproduces below in order to understand the term well. E.F. Lincoin, The amount of capital at any time should not excepted none should it be less than the amount required in both situation it there firm will be loser. These conditions are called under capitalization and for capitalization. In case the amount is hiring than it is required the company his have to pay more interest on the surplus capital are they rescuing the proper of the concern of the total capitalize not sufficient to discharge the function of the business the concern with not be in a position of even reasonable profits due to lack of funds it is there fore, necessary to have proper capitalization. (62) CASH MANAGEMENT Cash is the medium of exchange which allows management to carry on the various activities of the business on day to day basis. And management of cash is one of the most important answers of over all working capital management due to the fare there cash is the most liquid type of current assets. As such it is the responsibility of the finance function to see that the various functional areas of the business have sufficient cash were ever they require the same at the same time if has also it be ensured that funds are not blocked in the form of idle cash as the cash remaining idle also involves cost in the form of interest cost and opportunity cost as such the management of cash have to kind a mean between these two extremes of shortage of cash as well as idle cash. The basic objectives of cash management of are to reduce the operating cash balance requirement to maintain possible extent without affecting the routine transaction. For the management of cash flow statement is the most important tool cash low statement provided information about the cash ratio and payment of a firm for again period. It provides important information that compliments the profit and loss account and balance sheet. (63) 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; Vijay commercial Co-Operative Bank Ltd. has market the progressive growth and profitability both the financial year 2005-2006 which is reflected in the following Financing since inception: (Rs. In Lacs) Particulars 31-3-05 31-03-06 Investments Rs.2026 Rs.2074 Deposit Rs.4826 Rs. 5753 Advances Rs.3220 Rs.3637 (64) S. W. O. T. Analysis (65) STRENGTHS ::- ISO 9001:2000 Certified one and only co-operatives bank whose all branches have this certificate. Professional management & Co-Operate team spirit. Strong Brand equity. Fully computerization and Automation. Respectable ranking and position in Gujarat’s top Co- Operative banks. Profitability and sound liquidity. Branches in all most developed parts of saurashtra. 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. (66) 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 bank’s progress. Changes in govt. rules and regulation. Cut throat competition and entry of new foreign bank and its sound financial structure. (67) Future Plan of Vijay Bank (68) VISION - 2010 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 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 provide multi dimensional services to customers by incorporating various modern service areas like insurance, bill collection and providing one door service to clients. To explore more non-fund based business like latter of credit, bank guarantee, custodial services to increase bank’s non interest income. (69) Suggestion To Vijay Bank (70) SUGGESTION As improvement is a constant requirement for every one and if we try to learn from a little things also. Than every minute we will improve ourselves. And for constant improvement in organization management should keep their eye on every concern, during my visit at bank I have tried to cover everything and according to my knowledge I am trying to give suggestion to the Vijay bank and I am sure that it surely will be helpful in progress of the bank. First and foremost suggestion for Vijay bank is that, yet they are not using such marketing tools and ATM in the area of cutthroat competition in banking sector. Each bank should try for better and different marketing. Vijay bank should make one group of executive, who can help to the management and can provide different services like collection from home only and they should use such slogan for innovative products like “only one call can make your life better.” This slogan can be sued for assets product. So by using not only simple advertisement but also strategic marketing tool bank can improve a lot in the market. And last but not least that is there is need to improve web site of Vijay bank during my report work I have found very poor contents in the web site of Vijay bank as Bank have their own EDP department with high educated staff. And by creating attractive web site bank surely will be able to create good image. And one thing is also there should professionalism in management at every level. (71) C O N C L U S I O N (72) CONCLUSION After having all the required information for preparing my report, I have tried to analyze each and every function of the Raj Bank. During my report all the staff member of the Vijay bank had well co-operate me. And also I have found that the, there is a very good level of commitment in all the staff members. During my report I have tried to cover each functional area of the bank and after having clear idea about everything in the bank, I can conclude that the Vijay bank is one of the leading firm in the bank, I can conclude that the Vijay bank is one of the leading firm in the co-operative sector, and with advanced technologies and educated staff to trying to positioning in the banking market. But than also due to such weaknesses of co-operative sector Raj bank is also suffering from such limits. So, at last we can conclude that the Vijay bank is being leader in the market and due to great leadership of Mr. pravinbhai dholkia (chair man) bank is getting great goodwill in the market and also great goodwill of the other director helps director helps to the bank in creating good image in the field of the bank. For, better future a great success my all good wishes always with the Vijay bank. I wish them for better achievement. (73) B I B L I O G R A P H Y (74) BIBLIOGRAPHY Books ::- Human Resource Management & Personnel Management By :- K. Aswatthappa Publication :- Tata Mc-Graw Hill Marketing Management By :- S. A. Sherlekar Publication :- Himalaya Publication House Finance Management By :- B. S. Shah Publication :- S. B. Shah on Behalf of B. S. Shah 31st Annual Report Of The Vijay Bank (2005-2006) (75)
"Vijay Commercial Cooperative bank"