CHAPTER V OPERATIONAL PERFORMANCE OF CENTRAL COOPERATIVE BANKS IN PUNJAB

Transcription

1 CHAPTER V OPERATIONAL PERFORMANCE OF CENTRAL COOPERATIVE BANKS IN PUNJAB Cooperative banks with a vast network, wide coverage and outreach to the remotest parts of the country has a unique position in the rural credit system. Rural credit cooperatives are the prime institutional agencies in the dispensation of credit for agriculture and rural development. The Indian Banking industry has been transformed since the implementation of the recommendations of the Narasimham Committee (1991). The major element of Banking Sector Reforms, popularly known as prudential norms was made applicable to commercial banks from The cooperative banking sector was excluded from the implementation of these reforms but in these norms were made applicable to cooperative banks also. The cooperative banking system, being an important player of the Indian credit system, has also witnessed a vast and comprehensive change from regulated to competitive and deregulated scenario. In the light of these changes, it is imperative to review the operational performance of Central Cooperative Banks. In the present chapter, an attempt has been made to analyse the growth and performance of Central Cooperative Banks in Punjab on the basis of following parameters: (1) Branch Expansion (2) Deposit Mobilization (3) Credit Deployment (4) Volume of Business (5) Working Funds (6) Owned Funds (7) Human Resources (Manpower) (8) Non Performing Assets as percentage to Total Advances (9) Recovery Performance 205

2 5.1 BRANCH EXPANSION Branch expansion is one of the most important instruments for deposit mobilization for any bank and cooperative banks are no exception. Since mid-sixties, emphasis has been laid on branch expansion by the Central Cooperative Banks and they were encouraged by the Reserve Bank of India to undertake branch expansion on a large scale by adopting a liberal licensing policy and permitting cash subsidies for new branches (Koli and Landage, 2007). Branch expansion programme can aid development in two ways. Firstly, it helps in mobilization of idle resources and their channelisation into economically productive purposes. Secondly, branches can identify genuine credit needs in the areas served by them and provide credit especially to the neglected sectors so that requirements of their areas may be adequately met (Chawla, 1987). Under the provisions of the Banking Regulation Act, 1949 the Central Cooperative Banks have the freedom to open their branches without obtaining the permission from Reserve Bank of India. While opening new branches by Central Cooperative Banks, potential for mobilization of deposits and the avenues available for profitable deployment of such funds is taken into consideration (Shoora, 2005). Central Cooperative Banks and their branches do their loaning business through Primary Agricultural Credit Societies (PACS), so while opening new branches the number of PACS in that area is also taken into consideration. Widespread branch network with diversity has helped the cooperative banks in the state to register an enviable performance in the matter of deposit mobilization. 206

3 TABLE 5.1 BRANCHES OF CENTRAL COOPERATIVE BANKS IN PUNJAB Central Coop. Bank EG MEAN SD CV Amritsar % share Bathinda % share F.Sahib % share Fazilka % share Ferozepur % share Faridkot % share Gurdaspur % share Hoshiarpur % share Jalandhar % share Kapurthala % share Ludhiana % share Mansa % share Moga % share Muktsar % share N.Shahr % share Patiala % share Ropar % share Sangrur % share Tarn Taran % share Total %share in total Coeff. of concentration Source: Published Reports of Punjab State Cooperative Bank, Chandigarh. 207

4 5.1.1 GROWTH IN BRANCHES OF CENTRAL COOPERATIVE BANKS IN PUNJAB Table 5.1 exhibits the trends in branch expansion of Central Cooperative Banks in Punjab during the period of study. Branch expansion has shown a fluctuating trend during the study period. The table provides that the number of branches increased from 777 in to 834 in and then decreased to 804 in the year at an exponential growth rate of 0.41 per cent. Kapurthala Central Cooperative Bank has shown the highest exponential growth rate of 2.25 per cent. Ferozepur Central Cooperative Bank, Amritsar Central Cooperative Bank, Tarn Taran Central Cooperative Bank and Ludhiana Central Cooperative Bank have shown exponential decline during the study period. The exponential growth rate of Gurdaspur Central Cooperative Bank is zero as there is no change in the number of branches throughout the study period. Kapurthala Central Cooperative Bank, Moga Central Cooperative Bank, Muktsar Central Cooperative Bank, Faridkot Central Cooperative Bank, Fazilka Central Cooperative Bank, Hoshiarpur Central Cooperative Bank, Sangrur Central Cooperative Bank, Bathinda Central Cooperative Bank, N. Shahr Central Cooperative Bank, Fatehgarh Sahib Central Cooperative Bank and Ropar Central Cooperative Bank have the exponential growth rate greater than the growth rate of all the Central Cooperative Banks in Punjab. The growth rate of Gurdaspur Central Cooperative Bank, Patiala Central Cooperative Bank, Jalandhar Central Cooperative Bank and Mansa Central Cooperative Bank is lower than the growth rate of all the Central Cooperative Banks. In , Jalandhar Central Cooperative Bank had the maximum number of branches, i.e., 72 (8.96 per cent share in total) followed by Sangrur Central Cooperative Bank and Hoshiarpur Central Cooperative Bank with 65 branches each (8.08 per cent share each in total), while Muktsar Central Cooperative Bank and Mansa Central 208

5 Cooperative Bank have the lowest number of branches, i.e., 22 each (2.74 per cent share each in total). Statistical analysis reveals that average number of branches was maximum for Jalandhar Central Cooperative Bank (71.54) followed by Sangrur Central Cooperative Bank (64.85) and Hoshiarpur Central Cooperative Bank (62.69) during the study period. During the study period the average number of branches was minimum for Muktsar Central Cooperative Bank (21.08) followed by Mansa Central Cooperative Bank (22.38) and Faridkot Central Cooperative Bank (23.15). The degree of variation in terms of dispersion was lowest in Patiala Central Cooperative Bank (C.V. = 1.21) followed by N. Shahr Central Cooperative Bank (C.V. = 2.14), Jalandhar Central Cooperative Bank (C.V. = 2.33) and the variation was highest in Ferozepur Central Cooperative Bank (C.V. = 16.63) followed by Moga Central Cooperative Bank (C.V. = 10.60) and Kapurthala Central Cooperative Bank (C.V. = 10.47) during the period of study. The table also presents the data relating to coefficient of concentration. The coefficient of concentration ranges from 14 to 16 per cent. The analysis of coefficient of concentration shows that there is no concentration of branches in few districts. 5.2 DEPOSIT MOBILIZATION Deposits form the mainstay of bank resources and they constitute the life blood of the bank. Deposit mobilization is an important function of the bank. The amount of deposits depends upon the saving habits of the people and the rate of interest. If the rate of interest on deposits is high, it encourages saving among people and there will be large volume of deposits. The banks have to take initiatives to attract deposits because lending operations of the bank depends upon the amount of deposits mobilized by the bank. Deposit mobilization is a challenge to all bankers and banking institutions in India (Desai, 1980). The mobilization of deposits by banks serves as 209

6 the basis for capital formation and facilitates the process of economic development. Increased deposits mean enlarged resources of banks and consequential expanded opportunities for employment of funds in the development of economy in accordance with the priorities set out in plans (Pasricha, 1993). The volume of deposits is important but the composition and source of deposits is also equally important from the aspect of cost. The Central Cooperative Banks accept deposits mainly on three accounts: Fixed Deposits: - Such deposits are not payable on demand but at a fixed date or a period of notice. A high rate of interest is paid as compared to other types of deposits. Savings Deposits: - Such deposits are meant to encourage the saving habits in the people by providing facilities for savings at attractive terms and provide liberal withdrawal facilities. Current Deposits: - These deposits provide the facility of depositing money in the account without any restriction as regards the amount or the number of withdrawals. No interest is paid on such accounts but sometimes the banks charge incidental charges for servicing such accounts. As far as the cost of deposits is concerned, fixed deposits cost the banks most and current deposits the least because banks have to pay a very high rate of interest on fixed deposits, while no interest is paid on current deposits. A nominal interest is paid on savings deposits GROWTH IN DEPOSIT MOBILIZATION OF CENTRAL COOPERATIVE BANKS IN PUNJAB The data related to deposits mobilized by all the Central Cooperative Banks in Punjab is presented in Table 5.2. It can be observed from the table that the amount of deposits of all the Central Cooperative Banks in Punjab have moved from Rs lac in to Rs lac in listing an exponential 210

7 growth rate of per cent. Mansa Central Cooperative Bank recorded the highest exponential growth rate of per cent followed by Muktsar Central Cooperative Bank with per cent growth rate. On the other hand, Jalandhar Central Cooperative Bank has the lowest exponential growth rate of all Central Cooperative Banks in the state, i.e., 9.44 per cent and N. Shahr Central Cooperative Bank is little ahead with growth rate of per cent. The banks showing lower exponential growth rate in total deposits as compared to growth rate of all Central Cooperative Banks taken together are Jalandhar Central Cooperative Bank, N. Shahr Central Cooperative Bank, Gurdaspur Central Cooperative Bank, Amritsar Central Cooperative Bank, Ferozepur Central Cooperative Bank and Ludhiana Central Cooperative Bank. However, the Central Cooperative Banks exhibiting higher exponential growth rate in total deposits as compared to the growth rate of all the Central Cooperative Banks taken together are Mansa Central Cooperative Bank, Muktsar Central Cooperative Bank, Bathinda Central Cooperative Bank, Fatehgarh Sahib Central Cooperative Bank, Faridkot Central Cooperative Bank, Fazilka Central Cooperative Bank, Sangrur Central Cooperative Bank, Moga Central Cooperative Bank, Ropar Central Cooperative Bank, Hoshiarpur Central Cooperative Bank, Kapurthala Central Cooperative Bank, Tarn Taran Central Cooperative Bank and Patiala Central Cooperative Bank. 211

8 TABLE 5.2 DEPOSITS MOBLISED BY CENTRAL COOPERATIVE BANKS IN PUNJAB (Rs. in Lac) Central Coop. Bank EG MEAN SD CV Amritsar % share Bathinda % share F.Sahib % share Fazilka % share Ferozepur % share Faridkot % share Gurdaspur % share Hoshiarpur % share Jalandhar % share Kapurthala % share Ludhiana % share Mansa % share Moga % share Muktsar % share N.Shahr % share Patiala % share Ropar % share Sangrur % share Tarn Taran % share Total %share in total Coeff. of concentration Source: Published Reports of Punjab State Cooperative Bank, Chandigarh. 212

9 At the end of the year , Jalandhar Central Cooperative Bank contributed maximum to the total deposits Rs lac (12.18 per cent of total deposits) but the growth rate of this bank in total deposits is lower than the growth rate of all Central Cooperative Banks taken together. Throughout the period of study, the contribution of Jalandhar Central Cooperative Bank was maximum to the total deposits. This was followed by Hoshiarpur Central Cooperative Bank with Rs lac (11.00 per cent share). On the other hand, the contribution of Muktsar Central Cooperative Bank to total deposits is minimum Rs lac (1.43 per cent). During the period of study, the average amount of deposits mobilized by Central Cooperative Banks was the highest for Jalandhar Central Cooperative Bank (Rs lac) followed by Hoshiarpur Central Cooperative Bank (Rs lac), N. Shahr Central Cooperative Bank (Rs lac) and the average was lowest for Muktsar Central Cooperative Bank (Rs lac) followed by Ferozepur Central Cooperative Bank (Rs lac) and Mansa Central Cooperative Bank (Rs lac). The degree of variation in the growth of deposits was highest for Mansa Central Cooperative Bank (C.V. = 54.37) followed by Fazilka Central Cooperative Bank (C.V. = 50.84) and Muktsar Central Cooperative Bank (C.V. = 49.24) and the consistency in the growth of deposits was highest in Jalandhar Central Cooperative Bank (C.V. = 34.04) followed by N. Shahr Central Cooperative Bank (C.V. = 37.21) and Amritsar Central Cooperative Bank (C.V. = 37.23). The exponential growth of deposits is more than the growth rate of branch expansion. This is probably due to the improved banking habits in Punjab. The table also highlights the extent of concentration of total deposits. The data related to coefficient of concentration ranged from 23 to 30 per cent. It was highest in , i.e., per cent and lowest in , i.e., per cent. The data of coefficient of concentration shows that there was no concentration of deposits in few districts. 213

10 TABLE NO. 5.3 TYPE OF DEPOSITS (Rs, in Lac) Type of Deposits EG MEAN SD CV Fixed deposit % share Saving Deposit % share Current deposit % share Total %share in total Coeff. of concentration Source: Published Reports of Punjab State Cooperative Bank, Chandigarh. 214

11 5.2.2 BREAK UP OF DEPOSITS MOBILIZED BY CENTRAL COOPERATIVE BANKS IN PUNJAB Table 5.3 presents the break up of total deposits into fixed, current and savings deposits. It is evident from the table that savings deposits have shown an increasing trend during the period of study. The amount of savings deposits increased from Rs lac in to Rs lac in The percentage share of savings deposits in total deposits increased from per cent in to per cent in The amount of fixed deposits increased from Rs lac to Rs lac during the period under study. The share of fixed deposits in total deposits decreased from per cent in to per cent in The amount of Current deposits increased from Rs lac to Rs lac during the study period. Current deposits have shown a fluctuating trend. The percentage share of current deposits increased from 3.87 per cent in to 4.27 per cent in but decreased to 3.32 per cent in Savings deposits recorded the highest growth rate of per cent of all types of deposits, while the fixed deposits recorded the lowest growth rate of 9.33 per cent. Statistical analysis reveals that average deposits of all the Central Cooperative Banks in Punjab is Rs lac and the mean of savings deposits is maximum (Rs lac) and the mean of current deposits is minimum (Rs lac). Consistency in the growth of current deposits (CV=36.23) was the highest and the variation was the highest in savings deposits (CV=48.48). The data related to coefficient of concentration ranges from to per cent. It was the highest in , i.e., per cent and the lowest in , i.e., per cent. The coefficient of concentration shows that there is no concentration of deposits in one kind of deposits but it was in fixed and savings deposits. 215

12 TABLE 5.4 SAVING DEPOSITS OF CENTRAL COOPERATIVE BANKS IN PUNJAB (Rs. in Lac) Central Coop. Bank EG MEAN SD CV Amritsar % share Bathinda % share F.Sahib % share Fazilka % share Ferozepur % share Faridkot % share Gurdaspur % share Hoshiarpur % share Jalandhar % share Kapurthala % share Ludhiana % share Mansa % share Moga % share Muktsar % share N.Shahr % share Patiala % share Ropar % share Sangrur % share Tarn Taran % share Total %share in total Coeff. of concentration Source: Published Reports of Punjab State Cooperative Bank, Chandigarh. 216

13 (i) SAVINGS DEPOSITS Savings deposits are the most important component of total deposits. At the end of the study period, savings deposits contributed Rs lac (47.28 per cent) to the total deposits. Savings deposits recorded the highest growth rate among all types of deposits. Trend in savings deposits of all the Central Cooperative Banks in the state during the study period is depicted in Table 5.4. Savings deposits showed an upward trend during the period of study. The table shows that the amount of savings deposits increased from Rs lac in to Rs lac in registering an exponential growth rate of per cent. There is five-fold increase in savings deposits during the period of study. Moga Central Cooperative Bank recorded the highest exponential growth rate of per cent. The exponential growth rate of Ferozepur Central Cooperative Bank was the lowest, i.e., per cent. Moga Central Cooperative Bank, Muktsar Central Cooperative Bank, Fatehgarh Sahib Central Cooperative Bank, Bathinda Central Cooperative Bank, Kapurthala Central Cooperative Bank, Ropar Central Cooperative Bank, Hoshiarpur Central Cooperative Bank, Patiala Central Cooperative Bank, Sangrur Central Cooperative Bank, Fazilka Central Cooperative Bank, Mansa Central Cooperative Bank and Tarn Taran Central Cooperative Bank have the exponential growth rate in savings deposits higher than that of state level. On the other hand Ferozepur Central Cooperative Bank, Gurdaspur Central Cooperative Bank, N. Shahr Central Cooperative Bank, Ludhiana Central Cooperative Bank, Jalandhar Central Cooperative Bank, Faridkot Central Cooperative Bank and Amritsar Central Cooperative Bank have exponential growth rate of savings deposits lower than the growth rate of all Central Cooperative Banks taken together. By the end of the study period, the contribution of Mansa Central Cooperative Bank was minimum, i.e., 1.24 per cent share in savings deposits. On the other 217

14 hand, the contribution of Jalandhar Central Cooperative Bank was maximum, i.e per cent share in savings deposits, followed by Hoshiarpur Central Cooperative Bank with per cent share in savings deposits. The contribution of Jalandhar Central Cooperative Bank was highest throughout the study period but the growth rate of the bank was lower than the growth rate of all the Central Cooperative Banks. The average savings deposits of all the Central Cooperative Banks during the period of study is Rs lac. Jalandhar Central Cooperative Bank has shown the maximum average in saving deposits, while Mansa Central Cooperative Bank has shown the lowest average. Overall eight Central Cooperative Banks have recorded average more than the average of all the Central Cooperative Banks in Punjab. In terms of dispersion, the variation in the growth of saving deposits was lowest for Gurdaspur Central Cooperative Bank (C.V. = 40.44) followed by Ferozepur Central Cooperative Bank (C.V. = 41.30), N. Shahr Central Cooperative Bank (C.V. = 43.24) and the variation was highest in Bathinda Central Cooperative Bank (C.V. = 55.40) followed by Fatehgarh Sahib Central Cooperative Bank (C.V. = 54.68) and Moga Central Cooperative Bank (C.V. = 54.40) during the period of study. The table also highlights the extent of concentration of savings deposits. The Coefficient of concentration in savings deposits of all the Central Cooperative Banks ranged from 25 to 30 per cent during the study period. It was highest in (29.40 per cent) and lowest is in (25.72 per cent). The coefficient of concentration declines from per cent to per cent during the study period which shows that there is marginal reduction in inter district disparities in savings deposits. A careful analysis of coefficient of concentration shows that there is no concentration of saving deposits in few districts. 218

15 TABLE NO. 5.5 FIXED DEPOSITS OF CENTRAL COOPERATIVE BANKS IN PUNJAB (Rs. in Lac) Central Coop Bank EG MEAN SD CV Amritsar % share Bathinda % share F.Sahib % share Fazilka % share Ferozepur % share Faridkot % share Gurdaspur % share Hoshiarpur % share Jalandhar % share Kapurthala % share Ludhiana % share Mansa % share Moga % share Muktsar % share N.Shahr % share Patiala % share Ropar % share Sangrur % share Tarn Taran % share Total %share in total Coeff. of concentration Source: Published Reports of Punjab State Cooperative Bank, Chandigarh. 219

16 (ii) FIXED DEPOSITS Fixed deposits are the second most important component of total deposits. Fixed deposits recorded the lowest exponential growth rate of all types of deposits. The share of fixed deposits in total deposits declined from per cent to per cent during the period of study. Table 5.5 exhibits the trends in fixed deposits of all the Central Cooperative Banks operating in Punjab during the period of study. The amount of fixed deposit increased from Rs lac in to Rs lac in listing an exponential growth rate of 9.33 per cent. By the end of March 2010 the contribution of Jalandhar Central Cooperative Bank was maximum to fixed deposits, i.e., Rs lac (11.19 per cent share in fixed deposits) followed by Hoshiarpur Central Cooperative Bank Rs lac (11.03 per cent share in fixed deposits) and N. Shahr Central Cooperative Bank Rs lac (9.93 per cent share in fixed deposits). On the other hand, the contribution of Muktsar Central Cooperative Bank was minimum Rs lac which accounted mere 1.38 per cent share in fixed deposits and Ferozepur Central Cooperative Bank was little ahead with 1.69 per cent share in fixed deposits. Mansa Central Cooperative Bank recorded the highest exponential growth rate in fixed deposits, i.e., per cent, while Jalandhar Central Cooperative Bank recorded the lowest exponential growth rate in fixed deposits, i.e., 5.35 per cent. The Central Cooperative Banks showing higher growth rate in fixed deposits compared to growth rate of all the Central Cooperative Banks in Punjab are Mansa Central Cooperative Bank, Muktsar Central Cooperative Bank, Faridkot Central Cooperative Bank, Fazilka Central Cooperative Bank, Bathinda Central Cooperative Bank, Sangrur Central Cooperative Bank, Fatehgarh Sahib Central Cooperative Bank, Ferozepur Central Cooperative Bank, Patiala Central Cooperative Bank, Ropar Central Cooperative Bank, Hoshiarpur Central Cooperative Bank and Tarn Taran Central 220

17 Cooperative Bank. However, Jalandhar Central Cooperative Bank, Amritsar Central Cooperative Bank, Gurdaspur Central Cooperative Bank, N. Shahr Central Cooperative Bank, Moga Central Cooperative Bank, Ludhiana Central Cooperative Bank and Kapurthala Central Cooperative Bank recorded lower exponential growth rate in fixed deposits compared to the growth rate at the state level. During the period of study average fixed deposits was highest in Jalandhar Central Cooperative Bank (Rs lac) followed by N. Shahr Central Cooperative Bank (Rs lac), Hoshiarpur Central Cooperative Bank (Rs lac), while the average was lowest for Muktsar Central Cooperative Bank (Rs lac) followed by Ferozepur Central Cooperative Bank (Rs lac) and Mansa Central Cooperative Bank (Rs lac). The consistency in the growth of fixed deposits was highest in Jalandhar Central Cooperative Bank (C.V. = 25.37) followed by Amritsar Central Cooperative Bank (C.V. =25.38) and N. Shahr Central Cooperative Bank (C.V. = 33.66), while the consistency was lowest in Mansa Central Cooperative Bank (C.V. = 64.64), Ferozepur Central Cooperative Bank (C.V. = 59.11) and Fazilka Central Cooperative Bank (C.V. = 51.96) during the period of study. The Coefficient of concentration in fixed deposits of all the Central Cooperative Banks in Punjab ranged from 23 to 31 per cent during the study period. It was highest in , i.e., per cent and lowest is , i.e., per cent. The coefficient of concentration declines during the study period; it shows reduction in inter district disparities in fixed deposits. The value of Coefficient of concentration is very low which shows that there is no concentration of fixed deposits in few districts. 221

18 TABLE 5.6 CURRENT DEPOSITS OF CENTRAL COOPERATIVE BANKS IN PUNJAB (Rs. in Lac) Central Coop. Bank EG MEAN SD CV Amritsar % share Bathinda % share F.Sahib % share Fazilka % share Ferozepur % share Faridkot % share Gurdaspur % share Hoshiarpur % share Jalandhar % share Kapurthala % share Ludhiana % share Mansa % share Moga % share Muktsar % share N.Shahr % share Patiala % share Ropar % share Sangrur % share Tarn Taran % share Total %share in total Coeff. of concentration Source: Published Reports of Punjab State Cooperative Bank, Chandigarh. 222

19 (iii) CURRENT DEPOSITS Table 5.6 depicts the trend in current deposits of Central Cooperative Banks operating in Punjab during the study period. The contribution of current deposits is lowest to total deposits. The share of current deposit in total deposits ranged from 3 to 5 per cent during the period of study. The amount of current deposits increased from Rs lac to Rs lac during the period of study. It can be observed from the table that at the end of the study period, Jalandhar Central Cooperative Bank recorded the highest contribution to the current deposits (Rs lac) which accounted per cent share in total current deposits. The contribution of Jalandhar Central Cooperative Bank to current deposits was maximum throughout the study period. On the other hand, minimum contribution in respect of current deposits pertained by Fatehgarh Sahib Central Cooperative Bank Rs lac (1.34 per cent share). The exponential growth rate in current deposits was highest for Mansa Central Cooperative Bank, i.e., per cent followed by Muktsar Central Cooperative Bank with per cent and Fazilka Central Cooperative Bank with per cent growth rate. The exponential growth rate was lowest for Patiala Central Cooperative Bank, i.e., 3.19 per cent. Overall exponential growth rate in current deposits taking all the Central Cooperative Banks in Punjab is per cent which is lower than the exponential growth rate in total deposits. Patiala Central Cooperative Bank, Sangrur Central Cooperative Bank, Fatehgarh Sahib Central Cooperative Bank, Ludhiana Central Cooperative Bank, N. Shahr Central Cooperative Bank, Kapurthala Central Cooperative Bank and Hoshiarpur Central Cooperative Bank have shown lower growth rate in current deposits than the growth rate all the Central Cooperative Banks. Central Cooperative Banks exhibiting higher growth rate in current deposits compared to the growth rate at the state level are Mansa Central Cooperative Bank, Muktsar Central Cooperative Bank, Fazilka Central 223

20 Cooperative Bank, Faridkot Central Cooperative Bank, Tarn Taran Central Cooperative Bank, Ferozepur Central Cooperative Bank, Ropar Central Cooperative Bank, Gurdaspur Central Cooperative Bank, Bathinda Central Cooperative Bank, Amritsar Central Cooperative Bank, Moga Central Cooperative Bank and Jalandhar Central Cooperative Bank. The average current deposits of all the Central Cooperative Banks during the period of study is Rs lac. Jalandhar Central Cooperative Bank has the maximum average in current deposits, while Fatehgarh Sahib Central Cooperative Bank has the lowest average. Overall only six (6) Central Cooperative Banks has average more than the average of all the Central Cooperative Banks in Punjab. In terms of dispersion, the consistency in the growth of current deposits, was highest for Sangrur Central Cooperative Bank (C.V. = 30.17), Ludhiana Central Cooperative Bank (C.V. = 30.95), Fatehgarh Sahib Central Cooperative Bank (C.V. = 33.99) while the variation was maximum in Muktsar Central Cooperative Bank (C.V. = 68.10) followed by Mansa Central Cooperative Bank (C.V. = 62.45) and Faridkot Central Cooperative Bank (C.V. = 58.43) during the period of study. The Coefficient of concentration of current deposits of all the Central Cooperative Bank operating in Punjab ranged from 26 to 34 per cent. It was highest in (33.91 per cent) and was lowest in (26.91 per cent). The Coefficient of concentration shows that there is no concentration of current deposits in few districts. 5.3 CREDIT DEPLOYMENT Credit is the cornerstone of the banking business. The basic function of credit is to enable individual and business enterprises to purchase ahead of their ability or desire to pay (Chawla, 1987). Credit policy of banks gives them a special status in the economic system of a country. A judicious use of bank credit can be instrumental in economic growth, at the same time its reckless use may spell perils. It 224