A COMPARATIVE ANALYSIS OF LOANS AND ADVANCES OF SELECTED COOPERATIVE BANKS IN KOLHAPUR DISTRICT Chetan Krishnat Galage Assistant Director, Yashwantrao Chavan School of Rural Development Shivaji University, Kolhapur Abstract The study is carried out for comparing various types of loans and advances given by selected cooperative banks in Kolhapur district. The selected banks are Birdev Sahakari bank, Warana Sahakari Bank Ltd., Nandani Sahakari Bank Ltd. and The Ichalkaranji Merchant Cooperative Bank Ltd. The objective of the study is to study the process and compare the banks on various parameters like loan and deposit interest rates, margin of the loan, loan sanction period, loan rebate and non-performing assets of the bank. Primary data is collected by taking interviews of managers and representatives from staff members of the selected cooperative banks. Secondary data is collected from the bank annual reports. The analysis is carried out with the help of various charts. Comparison of various parameters from these banks is carried out with the help of analysis. Keywords: Cooperative banks, Kolhapur district, Loans and advances. Introduction Warana Sahakari bank provides Education loan and employee cash credit facility. Other cooperative banks do not provide these facilities. Birdev Sahakari Bank charges higher interest rates compared to other banks for all loans except Gold loan. For agriculture, vehicle and home loan, Birdev Sahakari Bank and Nandani Sahakari Bank take 30 days to sanction. This time is much more than that required for Warana Bank and Ichalkaranji Merchant Co-operative Bank. Prime International Research Journal, Vol. IV, Issue 2, April, 2017 Page 7
Birdev Sahakari Bank provides 1 percent rebate while Nandani Sahakari Bank provides 2 % rebate on all loans except education loan. Birdev Sahakari Bank and Nandani Sahakari Bank require 25% margin on agriculture loan which is very high. Other 2 banks do not charge any margin on agriculture loan. Interest rate for saving account is 4 percent for all the banks. Objectives of the Study 1. To study procedure of granting loans and advances by co-operative banks. 2. To compare the loans of various banks. 3. To compare the Interest Rates, Margins, Loan Sanction Periods, Rebates on Loan and NPAs of selected banks. Scope of the Study The study is limited to loans and advances department of selected branches of cooperative banks. The study will not include other departments of bank like transfer, cash management, CASA. The geographical scope is limited to branches in Kolhapur district only. Data Collection Primary data: Discussion with bank managers and staff members of respective banks. Secondary data: From the annual reports of banks. Magazines published by banks. Bank websites. Sample size: 4 cooperative banks Sample Unit: Bank employees Sampling area: Ichalkaranji, Nandani, and Warananagar Prime International Research Journal, Vol. IV, Issue 2, April, 2017 Page 8
Sampling Technique: Convenience Sampling Limitations of Study It was difficult to have discussion with the concerned credit officers because of their busy schedule. There are various departments such as accounts department, legal department, risk management department, credit department, special mention accounts department, inspection departments, personnel department. It is not possible to study each and every section. This project is related only with loans and advances department. Graphical Data Analysis Graph 1: Interest Rates on Various Types of Loans Prime International Research Journal, Vol. IV, Issue 2, April, 2017 Page 9
Graph 2: Interest Rates for employees Prime International Research Journal, Vol. IV, Issue 2, April, 2017 Page 10
Graph 3: Loan Sanction Period (No. of Days) Prime International Research Journal, Vol. IV, Issue 2, April, 2017 Page 11
Graph 4: Rebate on Loan Graph 5: Percentage Margin Prime International Research Journal, Vol. IV, Issue 2, April, 2017 Page 12
Graph 6: Interest Rates on various accounts (%) Graph 7: Non Performing Assets Prime International Research Journal, Vol. IV, Issue 2, April, 2017 Page 13
Graph 8: Capital Adequacy Ratio Graph 9: Dividend Rates (%) for Shareholders Prime International Research Journal, Vol. IV, Issue 2, April, 2017 Page 14
Graph 10: Number of ATMs Findings 1) Only Warana Sahakari bank provides Education loan and employee cash credit facility. Other co-operative banks do not provide these facilities. 2) Birdev Sahakari Bank charges higher interest rates compared to other banks for all loans except Gold loan. 3) For agriculture, vehicle and home loan, Birdev Sahakari Bank and Nandani Sahakari Bank take 30 days to sanction. This time is much more than that required for Warana Bank and Ichalkaranji Merchant Co-operative Bank. 4) Birdev Sahakari Bank provides 1 percent rebate while Nandani Sahakari Bank provides 2 percent rebate on all loans except education loan. 5) Birdev Sahakari Bank and Nandani Sahakari Bank require 25% margin on agriculture loan which is very high. Other 2 banks do not charge any margin on agriculture loan. Prime International Research Journal, Vol. IV, Issue 2, April, 2017 Page 15
6) Interest rate for saving account is 4 percent for all the banks. 7) Gross NPA for Birdev Sahakari Bank Warana Sahakari Bank is much more compared to remaining banks. 8) Birdev Sahakari Bank has capital adequacy ratio is 42.57 percent which is very high compared to all other banks whose ratio range from 11.5 percent to 13.5 percent. 9) Birdev Sahakari Bank provides dividend at the lower rate to shareholders than other banks. 10) Only Warana Sahakari Bank provides A.T.M. facility for their customers. References: Kothari, C. R., Research Methodology, New Age International Pvt. Ltd Publishers; 2 nd Edition. Chandra, Prasanna Financial Management : Theory and Practice, Tata McGrawHill Publications, 9 th Edition Indian Institute of Banking and Finance: Bank Financial Management, McMillan Publications. Annual reports of banks. Credit policy report. Manual of instructions of bank. www.rbi.org.in www.waranabank.com Prime International Research Journal, Vol. IV, Issue 2, April, 2017 Page 16