1

A
Training report
On
‘Banking operation of the KCCB Bank’

For the training undergone at

‘The Kaithal Central Co-operative Bank Ltd.
Bhagal branch Kaithal’

Under the Supervision of

SUBHASH WADHAWAN
For the partial fulfillment of the award of degree of MBA
Submitted by
Lovely Kumar Verma
MBA 7th Sem.
Roll. No. 20
KUK Regn. No. 11-UD-3043

Submitted to
INSTITUTE OF MANAGEMENT STUDIES
KURUKSHETRA UNIVERSITY KURUKSHETRA
August-December 2014
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DECLARATION

I LOVELY KUMAR VERMA, Roll No. 20, Class MBA - 7th Semester of
KURUKSHETRA UNIVERSITY KURUKSHETRA OF INSTITUTE OF
MANAGEMANT STUDIES, hereby declare that the summer TRAINING PROFILE
PRESENATATION entitled THE KAITHAL CENTERAL COOPERARIVE BANK
LTD. KAITHAL BHAGAL BRANCH is an original work done by me and the
information provided in the study is authentic to the best of my knowledge and belief.
This study has not been submitted to any other institute or university for the award of any
degree or for any purpose.

(Lovely Kumar Verma)

Roll No. 20
Semester 7th
 3

Acknowledgement

First of all I thank my department who provided me this opportunity.

I want to thanks to all those who guided me to move on the track. I am
gratefully indebted to the Director for providing me all the necessary
help and requirement guidelines for the completion of my report and
also for the valuable time that he gave me from his schedule.

(Lovely kumar verma)

Roll No. 20
Semester 7th
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CONTENTS
Chapter Title of the chapter Page no.
No.

1. Introduction 6-14
A. Banking in India
B. Meaning
C. Definition
D. Features
E. Types of bank
Co-op. Banking in India
A. Introduction
B. Types of co-op bank

2. The KTL central co-operative bank 15-20

A. Introduction
B. Branches of banks
3. Analysis & Discussion 21-46
Operation at KCCB
A. Accounts types in banks & rules
a) Saving Account of Bank
i. Meaning
ii. Feature
iii. Advantages
iv. Rules
b) Current account
i. Features
ii. Advantages
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c) Recurring Deposit account

i. Meaning
ii. Features
iii. Advantages
d) Fixed deposit account
i. Meaning
ii. Features
iii. Advantages
B. Difference between RD and FD
C. Account opening
D. Cheques
i. Meaning
ii. Definition
iii. Types of cheques
iv. Features of cheques
E. Crossing of cheques
F. Loan
i. KCC loan
ii. Objective
iii .Eligibility
iv. Issue of card
v. Technical facility
vi. Types of facilities
vii. Security
viii. Rate of interest
4. SWOT Analysis 47
5. Conclusion 48
6. Learning 50
7. References 51
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Chapter 1
INTRODUCTION

A. Banking in India

Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector
acts as the backbone of modern business. Development of any country mainly depends
upon the banking system. An organization, usually a corporation, chartered by a state
or federal government, which does most or all of the following:

Receive demand deposit and time deposits, honors instruments drawn on them,
and pays interest on them; notes, makes loans, and invests insecurities;
collects checks, drafts, and notes; certifies depositor's checks; and issues drafts
and cashier's checks.

The term bank is derived from the French word Banco which means a Bench or Money
exchange table. In olden days, European money lenders or money changers used to
display (show) coins of different countries in big heaps (quantity) on benches of tables
for the purpose of lending or exchanging. A bank is a financial institution which deals
with deposits and advances and other related services. It receives money from those who
want to save in the form of deposits and it lends money to those who need it.

(b) Meaning of bank

The term bank is derived from the French word Banco which means a Bench or Money
exchange table. In olden days, European money lenders or money changers used to
display (show) coins of different countries in big heaps (quantity) on benches or tables
for the purpose of lending or exchanging.
 7

(c) Definition of bank

Oxford Dictionary defines a bank as "an establishment for custody of money, which it
pays out on customer's order."

(d) Features of bank

1. Dealing in Money

Bank is a financial institution which deals with other people's money i.e. money given by
depositors.

2. Individual / Firm / Company

A bank may be a person, firm or a company. A banking company means a company

which is in the business of banking.

3. Acceptance of Deposit

A bank accepts money from the people in the form of deposits which are usually
repayable on demand or after the expiry of a fixed period. It gives safety to the deposits
of its customers. It also acts as a custodian of funds of its customers.

4. Giving Advances

A bank lends out money in the form of loans to those who require it for different
purposes.

5. Payment and Withdrawal

A bank provides easy payment and withdrawal facility to its customers in the form of
cheques and drafts; it also brings bank money in circulation. This money is in the form of
cheques, drafts, etc.
 8

6. Agency and Utility Services

A bank provides various banking facilities to its customers. They include general utility
services and agency services.

7. Profit and Service Orientation

A bank is a profit seeking institution having service oriented approach.

8. Ever increasing Functions

Banking is an evolutionary concept. There is continuous expansion and diversification as

regards the functions, services and activities of a bank.

9. Connecting Link

A bank acts as a connecting link between borrowers and lenders of money. Banks collect
money from those who have surplus money and give the same to those who are in need
of money.

10. Banking Business

A bank's main activity should be to do business of banking which should not be

subsidiary to any other business.

11. Name Identity

A bank should always add the word "bank" to its name to enable people to know that it is
a bank and that it is dealing in money.
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E. Types of banks

Type 1. Saving Banks

Saving banks are established to create saving habit among the people. These banks are
helpful for salaried people and low income groups. The deposits collected from
customers are invested in bonds, securities, etc. At present most of the commercial banks
carry the functions of savings banks. Postal department also performs the functions of
saving bank.

Type 2. Commercial Banks

Commercial banks are established with an objective to help businessmen. These banks
collect money from general public and give short-term loans to businessmen by way of
cash credits, overdrafts, etc. Commercial banks provide various services like collecting
cheques, bill of exchange, and remittance money from one place to another place.
In India, commercial banks are established under Companies Act, 1956. In 1969, 14
commercial banks were nationalized by Government of India. The policies regarding
deposits, loans, rate of interest, etc. of these banks are controlled by the Central Bank.

Type 3. Industrial Banks / Development Banks

Industrial / Development banks collect cash by issuing shares & debentures and
providing long-term loans to industries. The main objective of these banks is to provide
long-term loans for expansion and modernization of industries.
In India such banks are established on a large scale after independence. They are
Industrial Finance Corporation of India (IFCI), Industrial Credit and Investment
Corporation of India (ICICI) and Industrial Development Bank of India (IDBI).
 10

Type 4. Land Mortgage / Land Development Banks

Land Mortgage or Land Development banks are also known as Agricultural Banks
because these are formed to finance agricultural sector. They also help in land
development.
In India, Government has come forward to assist these banks. The Government has
guaranteed the debentures issued by such banks. There is a great risk involved in the
financing of agriculture and generally commercial banks do not take much interest in
financing agricultural sector.

Type 5. Indigenous Banks

Indigenous banks mean Money Lenders and Sahukars. They collect deposits from general
public and grant loans to the needy persons out of their own funds as well as from
deposits. These indigenous banks are popular in villages and small towns. They perform
combined functions of trading and banking activities. Certain well-known Indian
communities like Marwari’s and Multan even today run specialized indigenous banks.

Type 6. Central / Federal / National Bank

Every country of the world has a central bank. In India, Reserve Bank of India, in U.S.A,
Federal Reserve and in U.K, Bank of England. These central banks are the bankers of the
other banks. They provide specialized functions i.e. issue of paper currency, working as
bankers of government, supervising and controlling foreign exchange. A central bank is a
non-profit making institution. It does not deal with the public but it deals with other
banks. The principal responsibility of Central Bank is thorough control on currency of a
country.
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Type 7. Co-operative Banks

In India, Co-operative banks are registered under the Co-operative Societies Act, 1912.
They generally give credit facilities to small farmers, salaried employees, small-scale
industries, etc. Co-operative Banks are available in rural as well as in urban areas. The
functions of these banks are just similar to commercial banks.

Type 8. Exchange Banks

Hong Kong Bank, Bank of Tokyo, Bank of America are the examples of Foreign Banks
working in India. These banks are mainly concerned with financing foreign trade.
Following are the various functions of Exchange Banks:-
Remitting money from one country to another country,
Discounting of foreign bills,
Buying and Selling Gold and Silver, and
Helping Import and Export Trade.

Type 9. Consumers Banks

Consumers bank is a new addition to the existing type of banks. Such banks are usually
found only in advanced countries like U.S.A. and Germany. The main objective of this
bank is to give loans to consumers for purchase of the durables like Motor car, television
set, washing machine, furniture, etc. The consumers have to repay the loans in easy
installments.
 12

Cooperative banking in India

A. Introduction

The Co-operative Bank is part of The Co-operative Banking Group, providing a range
of financial services to personal and business customers across the UK. The Banking
Group’s parent company, The Co-operative Group, is the world’s largest consumer
co-operative. The Co-operative Bank operates under its own brand as well as those of
smile, Platform and Britannia. We offer our services through 342 branches and
22 corporate banking centers as well as telephony and online channels. We are a
leader in the field of ethical investment and corporate social responsibility. Our
customer driven ethical strategy was the first of its kind in our industry and we pursue
an active strategy of community involvement.
Co-operative banks differ from stockholder banks by their organization, their goals,
their values and their governance. In most countries, they are supervised and
controlled by banking authorities and have to respect prudential banking regulations,
which put them at a level playing field with stockholder banks. Depending on
countries, this control and supervision can be implemented directly by state entities or
delegated to a co-operative federation or central body

B. TYPES OF COOPERATIVE BANK -

On the basis Categories

Short term lending oriented Long term lending oriented

co-operative Banks co-operative Banks
 13

There are two main categories of the co-operative banks.

(1) Short term lending oriented co-operative Banks - within this category there are
three sub categories of banks viz state co-operative banks, District co-operative banks
and Primary Agricultural co-operative societies.

(2) Long term lending oriented co-operative Banks - within the second category there
are state co-operatives and rural development banks.

The co-operative banking structure in India is divided into following main 5

categories:

The co-operative
banking structure
in India

Primary Urban Co-

op Banks

Primary
State Co-operative District Central Co- Land Development
Agricultural Credit
Banks op Banks Banks
Societies

Primary Urban Co-op Banks

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Primary Agricultural Credit Societies:-

The Primary Co-operative Credit Society is an association of borrowers and non-

borrowers residing in a particular locality. The funds of the society are derived from
the share capital and deposits of members and loans from central co-operative banks.

The borrowing powers of the members as well as of the society are fixed. The loans
are given to members for the purchase of cattle, fodder, fertilizers, pesticides,
implements, etc.

District Central Co-op Banks:-

These are the federations of primary credit societies in a district and are of two types
– those having a membership of primary societies only and those having membership
of societies as well as individuals.
The funds of the bank consists of share capital, deposits, loans and overdrafts from
state co-operative banks and joint stocks. These banks finance member societies
within the limits of the borrowing capacity of societies. They also conduct all the
business of a joint stock bank.

State Co-operative Banks: -

The state co-operative bank is a federation of central co-operative bank and acts as a
watchdog of the co-operative banking structure in the state. Its funds are obtained
from share capital, deposits, loans and overdrafts from the Reserve Bank of India.
The state co-operative banks lend money to central co-operative banks and primary
societies and not directly to farmers.

LandDevelopmentBanks: -
The land development banks are organized in 3 tiers namely, state, central and primary
level and they meet the long term credit requirements of the farmers for developmental
purposes. The state land development bank overseas the primary land development
 15

banks situated in the districts and tehsils in the state. They are governed both by the state
government and Reserve Bank of India. Recently, the supervision of land development
banks has been assumed by National Bank for Agriculture and Rural Development
(NABARD). The sources of funds for these banks are the debentures subscribed by both
central and state government. These banks do not accept deposits from the general public

Chapter 2
THE KAITHAL CENTRAL CO-OPERATIVE BANK

A. Introduction

According to the International Co-operative Alliance Statement of co-operative identity, a

co-operative is an autonomous association of persons united voluntarily to meet their
common economic, social, and cultural needs and aspirations through a jointly-owned
and democratically-controlled enterprise. Co-operatives are based on the values of self-
help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of
their founders, co-operative members believe in the ethical values of honesty, openness,
social responsibility and caring for others.

The 7 co-operative principles are:-

1. Voluntary and open membership

2. Democratic member control

3. Member economic participation

4. Autonomy and independence

5. Education, training and information

6. Co-operation among Co-operatives

7. Concern for Community

 16

A co-operative bank is a financial entity which belongs to its members, who are at the
same time the owners and the customers of their bank. Co-operative banks are often
created by persons belonging to the same local or professional community or sharing a
common interest. Co-operative banks generally provide their members with a wide range
of banking and financial services (loans, deposits, banking accounts...).

Co-operative banks differ from stockholder banks by their organization, their goals, their
values and their governance. In most countries, they are supervised and controlled by
banking authorities and have to respect prudential banking regulations, which put them at
a level playing field with stockholder banks. Depending on countries, this control and
supervision can be implemented directly by state entities or delegated to a co-operative
federation or central body.

Even if their organizational rules can vary according to their respective national
legislations, co-operative banks share common features:

 Customer's owned entities: in a co-operative bank, the needs of the customers

meet the needs of the owners, as co-operative bank members are both. As a consequence,
the first aim of a co-operative bank is not to maximize profit but to provide the best
possible products and services to its members. Some co-operative banks only operate
with their members but most of them also admit non-member clients to benefit from their
banking and financial services.

 Democratic member control: co-operative banks are owned and controlled by

their members, who democratically elect the board of directors. Members usually have
equal voting rights, according to the co-operative principle of”one person, one vote".

Profile allocation: in a co-operative bank, a significant part of the yearly profit, benefits
or surplus is usually allocated to constitute reserves. A part of this profit can also be
distributed to the co-operative
 17

B. Branches & District Central Co-operative Banks

Chandigarh

Sr.
Branch Phone Number
No.

The Haryana State Cooperative Apex

1. Bank Limited, SCO 78-80, Sector 17- 0172-2721026
B, Chandigarh

The Haryana State Cooperative Apex

2. Bank Limited, Sector 15-B, 0172-2771315
Chandigarh

The Haryana State Cooperative Apex

3. Bank Limited, Sector 19-D, 0172-2773077
Chandigarh

The Haryana State Cooperative Apex

4. Bank Limited, Hry. Civil Sect, 0172-2741604
Chandigarh

The Haryana State Cooperative Apex

5. Bank Limited, Manimajra, 0172-2739319
Chandigarh
 18

The Haryana State Cooperative Apex

6. Bank Limited, Sector 20-D, 0172-2706557
Chandigarh

The Haryana State Cooperative Apex

7. 0172-2660672
Bank Limited, Sector 34, Chandigarh

The Haryana State Cooperative Apex

8. 0172-2609540
Bank Limited, Sector 44, Chandigarh

The Haryana State Cooperative Apex

9. Bank Limited, Ext. Counter, New 0172-2713908
Sect, Chandigarh

The Haryana State Cooperative Apex

10. 0172-2651634
Bank Limited, Sector 28, Chandigarh

Panchkula

Sr.
Branch Phone Number
No.

The Haryana State Cooperative Apex Bank Limited,

1. 0172-2560178
Sector 9 ,Panchkula

The Haryana State Cooperative Apex Bank Limited,

2. 0172-2563934
Ext. Counter, HSAMB Complex, Panchkula

The Haryana State Cooperative Apex Bank Limited,

3. 0172-2566406
Sector 4,Panchkula

The Haryana State Cooperative Apex Bank Limited,

4. 0172-2566365
Sector 11 ,Panchkula

The Haryana State Cooperative Apex Bank Limited,

5. 0172-2566405
Sector 15,Panchkula

6. The Haryana State Cooperative Apex Bank Limited, 0172-2573871

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Staff Training College, Sector 5 ,Panchkula

District Central Co-operative Banks

Phone
Sr.No. Branch FAX
Number

1. The Ambala Central Cooperative Bank LTD. 0171-2530501 0171-2530347

2. The Bhiwani Central Cooperative Bank LTD. 01664-244102 01664-244102

3. The Faridabad Central Cooperative Bank LTD. 0129-2280108 0129-2280108

4. The Ftehabad Central Cooperative Bank LTD. 01667-226412 01667-221406

5. The Gurgaon Central Cooperative Bank LTD. 0124-2323076 0124-2323076

6. The Hisar Central Cooperative Bank LTD. 01662-236984 01662-225205

7. The Jind Central Cooperative Bank LTD. 01681-245872 01681-245179

8. The Jhajjar Central Cooperative Bank LTD. 01251-256262 01251-254321

9. The Kaithal Central Cooperative Bank LTD. 01746-223508 01746-223508

The Kurukshetra Central Cooperative Bank

10. 01744-290643 01744-292447
LTD.

11. The Karnal Central Cooperative Bank LTD. 0184-2251424 0184-2251424

The Mahendragarh Central Cooperative Bank

12. 01285-220295 01285-220135
LTD.

13. The Rewari Central Cooperative Bank LTD. 01274-220800 01274-220790

The Panchkula Central Cooperative Bank

14. 0172-2569034 0172-2571961
LTD.

15. The Panipat Central Cooperative Bank LTD. 0180-2650138 0180-2650138

16. The Rohtak Central Cooperative Bank LTD. 01262-254484 01262-254484

17. The Sirsa Central Cooperative Bank LTD. 01666-242258 01666-242763

18. The Sonipat Central Cooperative Bank LTD. 0130-2242527 0130-2242527

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The Yamunanagar Central Cooperative Bank

19. 01732-262050 01732-262050
LTD.

Chapter 3
ANALYSIS & DISCUSSION
(Operation at Kaithal Central co-op bank)

In India, Co-operative banks are registered under the Co-operative Societies Act, 1912.
They generally give credit facilities to small farmers, salaried employees, small-scale
industries, etc. Co-operative Banks are available in rural as well as in urban areas. The
functions of these banks are just similar to commercial banks.

(A) ACCOUNTS types in bank

I. Saving Account of Bank –

i. Meaning

Commercial banks, co-operative banks and postal departments accept deposits by way of
opening saving bank account. The saving bank account is generally opened by salaried
persons or by the persons who have a fixed regular income.
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Saving accounts are opened to encourage the people to save and collect their savings. In
India, saving account can be opened by depositing Rs.100 (US $2.19) to Rs.500 (US
$11). The saving account holder is allowed to withdraw money from the account two
times or three times in a week. The interest which is given on saving accounts is
sometime attractive, but often nominal. At present, the rate of interest is 3.50% p.a in
India. The interest rates varies as per amount of money deposited and its maturity range.
It is also subject to current trend of banking policies in a country.

ii. Features of Saving Account

The main characteristics or features of saving account are:-

1. The main objective of saving account is to promote savings.

2. There is no restriction on the number and amount of deposits.
3. Withdrawals are allowed subject to certain restrictions.
4. The money can be withdrawn either by cheque or withdrawal slip.
5. The rate of interest payable is very nominal on saving accounts. At present it is
about 3.50% p.a in India.
6. Saving account is of continuing nature. There is no maximum period.
7. A minimum amount has to be kept on saving account.
8. No loan facility is provided against saving account.

iii. Advantages of Saving Account

The benefits or advantages of saving account are:-

1. Saving account encourages savings habit among salary earners and others who
have fixed income.
2. It enables the depositor to earn income by way of interest.
3. It helps the depositor to make payment by way of cheques.
4. The bank offers number of services to the saving account holders.

Opening Of Saving Bank Account (Rules under HRCO Banks):

 22

1. Any person approved by the bank may open the saving bank account agreeing
upon to comply with the rules governing the saving bank account.
2. Only one saving bank account may be opened.
3. By a person in his/her own name.
4. By more than one person in their joint name
5. By a minor who may be able to read and write & who is not below 14 years of
age at the time of opening of the account.
6. By a natural guardian i.e. father or mother on behalf of minor, or by a guardian
appointed by court of law.
7. An account may be opened with minimum of Rs.500 only in cash & the same will
be maintained to keep the account running, balance less than Rs.500, account will
be closed at the bank discretion.
8. Interest rate of 3.50% per annum.

II. Current bank account

i. Meaning
Current bank account is opened by businessmen who have a number of regular
transactions with the bank, both deposits and withdrawals. It is also known as Demand
Deposit. Current account can be opened in co-operative bank and commercial bank. In
current account, amount can be deposited and withdrawn at any time without giving any
notice. It is also suitable for making payments to creditors by using cheques. Cheques
received from customers can be deposited in this account for collection.
In India, current account can be opened by depositing Rs.500 (US $ 11) to Rs.1, 000 (US
$ 22). The customers are allowed to withdraw the amount with cheques and they
generally do not get any interest. In India Co-operative bank may allow interest up to 1%.
Current account holder gets one important advantage of overdraft facility.

ii. Features of Current Bank Account

 23

The main features of current account are as follows:-

1. The main objective of current bank account is to enable the businessmen to
conduct their business transactions smoothly.
2. There is no restriction on the number and amount of deposits. There is also no
restriction on the withdrawals.
3. Generally bank does not pay any interest on current account. Nowadays, some
banks do pay interest on current accounts.
4. Current account is of continuing nature and as such there is no fixed period.

iii. Advantage of Current Bank Account “

The advantages of current account are as follows:-

1. Current account enables businessmen to conduct his business transactions
smoothly.
2. The businessmen can withdraw any amount at any time from their current
accounts. There are also no restrictions on withdrawals.
3. The businessmen can make direct payment to their creditors with the help of
cheques.
4. The bank collects money on behalf of its customers and credits the same to their
accounts.
5. Current account enables the account holder to obtain overdraft facility.
6. The creditors of the account holder can get credit-worthiness information of the
account holder through inter bank connection.
7. Current account facilitates the industrial progress of the country. Without the help
of this account, businessmen would have difficulties in running their business.

Opening of Current Bank Account (Rules at HRCO Banks):

 24

1. Any person approved by the bank may open the current bank account agreeing
upon to comply with the rules governing the current bank account.
2. A person intending to open an account must be properly introduced to the bank by
someone already known to the bank.
3. By a person who has attained majority.
4. By more then one person in their joint name Joint Hindu families.
5. Clubs & societies, trusts, executors, administrators, liquidators, Govt. & semi
Government bodies etc.
6. An account may be opened with minimum of Rs.5000 only in cash Rs.50 per
transaction be deducted if balance is maintained less than Rs.5000.
7. No interest will be allowed on current bank.

III. What is Recurring Deposit Account?

Meaning

Recurring deposit account is generally opened for a purpose to be served at a future date.
Generally opened to finance pre-planned future purposes like, wedding expenses of
daughter, purchase of costly items like land, luxury car, refrigerator or air conditioner,
etc.

Recurring deposit account is opened by those who want to save regularly for a certain
period of time and earn a higher interest rate.

In recurring deposit account certain fixed amount is accepted every month for a specified
period and the total amount is repaid with interest at the end of the particular fixed
period.

Features of Recurring Deposit Account

The main features of recurring deposit account are as follows:-

 25

1. The main objective of recurring deposit account is to develop regular savings

habit among the public.
2. In India, minimum amount that can be deposited is Rs.10 at regular intervals.
3. The period of deposit is minimum six months and maximum ten years.
4. The rate of interest is higher.
5. No withdrawals are allowed. However, the bank may allow closing the account
before the maturity period.
6. The bank provides the loan facility. The loan can be given up to 75% of the amount
standing to the credit of the account holder.

Advantage of Recurring Deposit Account

The advantages of recurring deposit account are as follows:-

1. Recurring deposit encourages regular savings habit among the people.

2. Recurring deposit account holder can get a loan facility.
3. The bank can utilize such funds for lending to businessmen.
4. The bank may also invest such funds in profitable areas.

IV. Fixed Deposit Account - Bank

Meaning

The account which is opened for a particular fixed period (time) by depositing particular
amount (money) is known as Fixed (Term) Deposit Account. The term 'fixed deposit'
means that the deposit is fixed and is repayable only after a specific period is over.

Under fixed deposit account, money is deposited for a fixed period say six months, one
year, five years or even ten years. The money deposited in this account can not be
withdrawn before the expiry of period. The rate of interest paid for fixed deposit vary
(changes) according to amount, period and from bank to bank.

Features of Fixed Deposit Account

 26

The main features of fixed deposit account are as follows:-

1. The main purpose of fixed deposit account is to enable the individuals to earn a
higher rate of interest on their surplus funds (extra money).
2. The amount can be deposited only once. For further such deposits, separate
accounts need to be opened.
3. The period of fixed deposits range between 15 days to 10 years.
4. A high interest rate is paid on fixed deposits. The rate of interest may vary as per
amount, period and from bank to bank.
5. Withdrawals are not allowed. However, in case of emergency, banks allow to close
the fixed account prior to maturity date. In such cases, the bank deducts 1%
(deduction percentage many vary) from the interest payable as on that date.
6. The depositor is given a fixed deposit receipt, which depositor has to produce at the
time of maturity. The deposit can be renewed for a further period.

Advantages of Fixed Deposit Account

The advantages of fixed deposit account are as follows:-

1. Fixed deposit encourages savings habit for a longer period of time...

2. Fixed deposit account enables the depositor to earn a high interest rate.
3. The depositor can get loan facility from the bank.
4. On maturity the amount can be used to make purchases of assets.
5. The bank can get the funds for a longer period of time.
6. The bank can lend such funds for short term loans to businessmen.
7. Fixed deposits indirectly boost economic development of the country.
8. The bank can also invest such funds in profitable areas.

Opening Of Fixed Deposit Acoount (Rules at HARCO Bank):

1. Any person approved by the bank may open the saving bank account agreeing
upon to comply with the rules governing the saving bank account.
2. Only one saving bank account may be opened.
3. By a person in his/her own name.
 27

4. By more then one person in their joint name

5. By a minor who may be able to read and write & who is not below 14 years of
age at the time of opening of the account.
6. By a natural guardian i.e. father or mother on behalf of minor, or by a guardian
appointed by court of law.
7. An account may be opened with minimum of Rs.500 only in cash & the same will
be maintained to keep the account running, balance less than Rs.500, account will
be closed at the bank discretion.

8. Interest rate of 3.50% per annum.

B. Difference between Fixed Deposit (FD) and Recurring Deposit (RD)

When it comes to saving money in deposit-schemes, often people get confused as to what
saving-instrument to choose? Should they go for Fixed Deposits (FD) or should they park
their money in Recurring Deposits (RD)? This tutorial attempts to answer those questions
and doubts, which people may be having in their mind with respect to these deposit-
schemes.

FD (Fixed Deposit) is suitable for someone, who has some lump-some amount and want
to invest it for a specific time interval. Interest rate depends upon the maturity period,
longer the period greater the interest rate. You can opt either for periodical returns, say
monthly/quarterly/half yearly or annually, or simply opt to get the amount with
accumulated interest at the end of the prescribed term. Premature and partial withdrawal
facilities are available, but not without some penalty, that you have to pay at the time of
withdrawal. This penalty amount varies across banks, so you may want to check this out
with individual banks, before opting for opening an FD (Fixed Deposit). There will be
a TDS (Tax Deductible at Source) applicable to your maturity amount, if the interest paid
on your deposit exceeds Rs.10000/- per year. This is fixed by government to be 10% of
interest amount plus 3% Education Case.

But if you don’t have a lump-sum amount, that you could possibly invest in one-shot, FD
(Fixed Deposit) is a no-no. But if you have a regular income every month (say a salaried
 28

individual) and want to save a certain fixed amount for a specific time interval, then RD
(Recurring Deposit) is a better option for you. But you need to be sure of the fact that you
will be able to pay that fixed amount every month. One of the major drawbacks with
Recurring Deposits is non-flexibility of the amount-of-deposit. Partial payment is not
allowed nor can you pay more than the decided amount. Here again, interest rate depends
upon the maturity period, longer the period greater the interest rate. FD (Fixed Deposit)
generally gives more returns, when compared to RD (Recurring Deposit). Premature
withdrawal is applicable but some penalty you have to pay. Partial withdrawal is not
applicable. As per Income Tax Rules, there is no TDS (Tax Deductible at Source)
applicable on RD (Recurring Deposits).

Both of them have their pros and cons and it solely depends on your requirements and
your financial planning, to identify which one is better for you? After all it’s your money,
is not it

C. Account opening

7 Simple Steps in Open Bank Account - Banking

Today Banks have emerged as important financial institutions. Banks provide a safe
environment and help us manage our financial transactions. To avail professional banking
service it is mandatory for every individual to open a bank account. Opening a bank
account is not a difficult task. It takes only seven easy steps to open a bank account. This
article will help you understand these seven simple steps or procedure to open a bank
account.

1. Decide the Type of Bank Account you want to open

There are several types of bank accounts such as Saving Account, Recurring Account,
Fixed Deposit Account and Current Account. So a decision regarding the type of account
to be opened must be taken.

2. Approach any Bank of choice & meet its Bank Officer

 29

Once the type of account is decided, the person should approach a convenient bank. He
has to meet the bank officer regarding the opening of the account. The bank officer will
provide a proposal form (Account Opening Form) to open bank account.

3. Fill up Bank Account Opening Form - Proposal Form

The proposal form must be duly filled in all respects. Necessary details regarding name,
address, occupation and other details must be filled in wherever required. Two or three
specimen signatures are required on the specimen signature card. If the account is opened
in joint names, then the form must be signed jointly. Now a day the banks ask the
applicant to submit copies of his latest photograph for the purpose of his identification.

4. Give References for Opening your Bank Account

The bank normally required references or introduction of the prospective account holder
by any of the existing account holders for that type of account. The introducer introduces
by signing his specimen signature in the column meant for the purpose. The reference or
introduction is required to safeguard the interest of the bank.

5. Submit Bank Account Opening Form and Documents

The duly filled in proposal form must be submitted to the bank along with necessary
documents. For e.g. in case of a joint stock company, the application form must
accompany with the Board's resolution to open the account. Also certified copies of
articles and memorandum of association must be produced.

6. Officer will verify your Bank Account Opening Form

The bank officer verifies the proposal form. He checks whether the form is complete in
all respects or not. The accompanying documents are verified. If the officer is satisfied,
then he clears the proposal form.
 30

7. Deposit initial amount in newly opened Bank Account

After getting the proposal form cleared, the necessary amount is deposited in the bank.
After depositing the initial money, the bank provides a pass book, a cheque book and pay
in slip book in the case of savings account. In the case of fixed deposits, a fixed deposit
receipt is issued. In the case of current account, a cheque book and a pay in slip book is
issued. For recurring account, the pass book and a pay in slip book is issued.

ii Advantages

1. Bank account facilitates a safe custody of money

The bank is the custodian of cash. As and when the account holders needs the money can
withdraw the same depending upon the type of account.

2. Bank account helps in making payments

The bank account holder can make payment to third parties through the savings and
current account. The payment may be regarding electricity bills, insurance premium, etc.
The bank also makes direct payment on the standing instructions of the customer.

3. Bank account helps in collection of money

The bank can directly collect money of the customer in respect of dividend, salary
pension or from debtors. The collected money is then deposited in customer's bank
account.

4. Bank account holders get advances and loans

The current account holder can obtain an overdraft facility from his bank. The recurring
and fixed deposit account holders can get a loan upto 75% of the amount to their credit.
 31

The savings account holders can also obtain loans to purchase computers and such other
equipments.

5. Bank account helps in smooth transactions

The bank accounts make it possible for the businessmen to conduct their business
operations smoothly not only in the domestic trade but also in the foreign markets.

6. Bank account holders get a safe deposit locker

The bank provides safe deposit locker facility to its account holders to keep their
valuables like gold jewelers, share certificates, property documents, etc

D. Cheque

Meaning

Cheque is an important negotiable instrument which can be transferred by mere hand

delivery. Cheque is used to make safe and convenient payment. It is less risky and the
danger of loss is minimized.
 32

Definition of a Cheque

"Cheque is an instrument in writing containing an unconditional order, addressed to a

banker, sign by the person who has deposited money with the banker, requiring him to
pay on demand a certain sum of money only to or to the order of certain person or to the
bearer of instrument."

Different Kinds / Types of Cheques

1. Bearer Cheque

When the words "or bearer" appearing on the face of the cheque are not cancelled, the
cheque is called a bearer cheque. The bearer cheque is payable to the person specified
therein or to any other else who presents it to the bank for payment. However, such
cheques are risky, this is because if such cheques are lost, the finder of the cheque can
collect payment from the bank

2. Order Cheque

When the word "bearer" appearing on the face of a cheque is cancelled and when in its
place the word "or order" is written on the face of the cheque, the cheque is called an
order cheque. Such a cheque is payable to the person specified therein as the payee, or to
any one else to whom it is endorsed (transferred).

3. Uncrossed / Open Cheque

 33

When a cheque is not crossed, it is known as an "Open Cheque" or an "Uncrossed

Cheque". The payment of such a cheque can be obtained at the counter of the bank. An
open cheque may be a bearer cheque or an order one.

4. Crossed Cheque

Crossing of cheque means drawing two parallel lines on the face of the cheque with or
without additional words like "& CO." or "Account Payee" or "Not Negotiable". A
crossed cheque cannot be encashed at the cash counter of a bank but it can only be
credited to the payee's account.

5. Anti-Dated Cheque

If a cheque bears a date earlier than the date on which it is presented to the bank, it is
called as "anti-dated cheque". Such a cheque is valid upto six months from the date of the
cheque.

6. Post-Dated Cheque

If a cheque bears a date which is yet to come (future date) then it is known as post-dated
cheque. A post dated cheque cannot be honored earlier than the date on the cheque.

7. Stale Cheque

If a cheque is presented for payment after six months from the date of the cheque it is
called stale cheque. A stale cheque is not honored by the bank.
 34

iii. Features of cheques

1. Cheque is an instrument in writing

A cheque must be in writing. It can be written in ink pen, ball point pen, typed or even
printed. Oral orders are not considered as cheques.

2. Cheque contains an unconditional order

Every cheque contains an unconditional order issued by the customer to his bank. It does
not contain a request for payment. A cheque containing conditional orders is dishonored
by the bank.

3. Cheque is drawn by a customer on his bank

A cheque is always drawn on a specific bank mentioned therein. Cheques drawn by

stranger are of no meaning. Cheque book facility is made available only to account
holder who are supposed to maintain certain minimum balance in the account.
 35

4. Cheque must be signed by customer

A cheque must be signed by customer (Account holder). Unsigned cheques or signed by

persons other than customers are not regarded as cheque.

5. Cheque must be payable on demand

A cheque when presented for payment must be paid on demand. If cheque is made
payable after the expiry of certain period of times then it will not be a cheque.

6. Cheque must mention exact amount to be paid

Cheque must be for money only. The amount to be paid by the banker must be certain. It
must be written in words and figures.

7. Payee must be certain to whom payment is made

The payee of the cheque should be certain whom the payment of a cheque is to be made
i.e. either real person or artificial person like Joint Stock Company. The name of the
payee must be written on the cheque or it can be made payable to bearer.

8. Cheque must be duly dated by customer of bank

A cheque must be duly dated by the customer of bank. The cheque must indicate clearly
the date, month and the year. A cheque is valid for a period of six months from the date of
issue.

9. Cheque has 3 parties: Drawer, Drawee & Payee

1. Drawer: A drawer is a person, who draws a cheque.

2. Drawee: A drawee is a bank on whom a cheque is drawn.
3. Payee: A payee is a person in whose favor a cheque is drawn.
 36

E.Crossing of Cheque

A cheque is a negotiable instrument. During the process of circulation, a cheque may be

lost, stolen or the signature of payee may be done by some other person for endorsing it.
Under these circumstances the cheque may go into wrong hands.

Crossing is a popular device for protecting the drawer and payee of a cheque. Both bearer
and order cheques can be crossed. Crossing prevents fraud and wrong payments.
Crossing of a cheque means "Drawing Two Parallel Lines" across the face of the cheque.
Thus, crossing is necessary in order to have safety. Crossed cheques must be presented
through the bank only because they are not paid at the counter.

a. Different Types of Crossing

1. General Crossing:-

Generally, cheques are crossed when

1. There are two transverse parallel lines, marked across its face or
2. The cheque bears an abbreviation "& Co. "between the two parallel lines or
3. The cheque bears the words "Not Negotiable" between the two parallel lines or
4. The cheque bears the words "A/c. Payee" between the two parallel lines.
 37

A crossed cheque can be made bearer cheque by cancelling the crossing and writing that
the crossing is cancelled and affixing the full signature of drawer.

Specimen of General Crossing ↓

2. Special or Restrictive Crossing:-

When a particular bank's name is written in between the two parallel lines the cheque is
said to be specially crossed.

Specimen of Special or Restrictive Crossing ↓

In addition to the word bank, the words "A/c. Payee Only", "Not Negotiable" may also be
written. The payment of such cheque is not made unless the bank named in crossing is
 38

presenting the cheque. The effect of special crossing is that the bank makes payment only
to the banker whose name is written in the crossing. Specially crossed cheques are more
safe than a generally crossed cheques.

Cheque is an instrument in writing

E. Loan
Being a Scheduled Bank, giving Loans and Advances is among our primary activities.
Apart from our participation in meeting both Term Loan and Working Capital
requirements of Agriculture sector, Trade and Service sector, Large/Medium and Small
Scale Industries sector, Infrastructure sector etc. including taking care of their
Export/Import and non-fund based needs like Letter of Credit, Bank Guarantee etc., we
have a fairly large basket of loan products specially designed to suit your personal needs.
Salient features of some of the more attractive Personal Loan Schemes & seven special
schemes are described below.

KCC LOAN KISHAN CREDIT CARD

Sr.No
Conditions
. Requirements

Purpose of
Raising of various crops in Haryana State.
the loan
1.

Beneficiary/
Who can Any agriculturist who is also a member of the PACS (Minibank)
2. borrow
 39

To be worked out by multiplying number of acreage being

Amount/Peri
Cultivated to scale of finance for that crop subject to ceiling of
od of the loan
a) Cash Rs.75000/-
3. admissible
b) Kind Rs.25000/- Loan is for maximum period of 12 months.

Frequency/m
Funds released by cheque as many time as required by the
ode of release
Borrower drawn on concerned branch of CCB/ Mini bank.
4. of funds

a) Kharif advances between 1.3 to 31.8 will fall due on 31-1 next year.
Rabi advances between 1.9 to 28/29 Feb for next year will fall due
on 31-5 next year. (No drawl shall be allowed for a period
Repayment
of more than 12 months)
5.
b) In case of failure of crops due to natural calamities, facility
Of conversion of loan into medium term loan available.

1. Two personal sureties who are also members of the Minibank.

Security
2. Floating charge on crops being cultivated by raising the loan.
6.

Rate of
7% (Subject to revision from to time)
Interest
7.

Penal rate of
interest 5% p.a.
8.
 40

KISAN CREDIT CARD

i. OBJECTIVES:

 Kisan Credit Card Scheme aims at providing need based and timely credit
support to the farmers for their cultivation needs as well as non-farm activities
and cost effective manner.

 To bring about flexibility and operational freedom in credit utilization.

iii ELIGIBILITY:
 Under the scheme, Branches may issue Kisan Credit Cards to the farmers who are
otherwise eligible for sanction of short term credit for crop production, allied
activities and other non-farm activities.

 The farmers should come from the operational area of the Branch.

iv ISSUE OF CARDS:

 The farmers under the scheme will be issued a credit card-cum-passbook

incorporating the name, address, particulars of land holding, borrowing limit /
sub-limits, validity period, etc. to facilitate recording of the transactions on an on-
going basis. The passbook, among others, would provide for a passport size
photograph of the beneficiary.

 The beneficiary farmer should produce the passbook while operating the account.
 41

v.TECHNICAL FEASIBILITY:

 Suitability of soil, climate and availability of adequate irrigation facilities.

 Suitability of the produce for storage.

 Suitability of the storage unit.

vi TYPE OF FACILITY:

 Revolving Cash Credit – Annual Review. The farmer should be allowed for any
number of drawls and repayment within the limit.

 The review may result in continuation of the facility, enhancement of the limit or
cancellation of the limit / withdrawal of the facility, depending upon the
performance of the borrower.

 The aggregate of credits into the account during the 12 months period should at
least be equal to the maximum outstanding in the account.

 No drawl in the account should remain outstanding for more than 12 months in
case of normal crops and 18 months in case of sugarcane and banana crops.

 In case of reschedulement of the period of repayment on account of natural

calamities affecting the farmer, the period for reckoning the status of operations as
satisfactory or otherwise would get extended together with the extended amount
of limit. When the proposed extension is beyond one crop season, the aggregate of
 42

debits for which extension is granted should be transferred to a separate term loan
account with stipulation for repayment in instalments as per existing guidelines.

 As a measure of incentive for card holders with good performance, the Branches
may at the time of review, enhance the credit limit suitably to take care of increase
in cost of inputs / labour, change in cropping pattern, etc.

Vii SECURITY:

(a) Upto Rs.50,000/= : D. P. Note

Hypothecation of standing crops

(b) Above Rs.50,000/= : D. P. Note

Hypothecation of standing crops
Mortgage of land / Collateral security

Note:

 In case the value of land mortgaged is adequate, no other security

should be obtained.

 For finance against Government warehouse receipts, mortgage

may be waived.

 Waiver of mortgage of land in deserving cases may be considered

as per security norms.

 The RBI norms on security should be strictly adhered to.

Common Documents:
 43

(a) Demand Promissory Note.

(b) Deed of Composite Hypothecation Agreement (CHA-1).

(c) Letter of Authority (AG-15).

(d) Charge on land as per Agricultural Credit Act or Equitable mortgage or Legal
Mortgage of land (CHA-4).

(e) Letter of Pledge (OD-159).

(f) Pledge of Storage Receipt duly discharged.

(g) Undertaking to repay the advance within 12 months or on sale of produce.

(h) Bank’s lien to be notified to the storage unit.

(i) Undertaking from the godown / cold storage owners not to deliver the goods without
production of the pledged storage receipt.

(j) L-515.

(k) L-516 (if required).

Note:

(i) Documents mentioned under (e) to (i) above are applicable only if sub-limit against
storage receipt is sanctioned.
 44

(ii) In case produce marketing limit is extended against the produce stored in the
premises of the farmer, then hypothecation deed (CHA-1) should suffice to cover
hypothecation charge on the produce stored.

viii. RATE OF INTEREST:

(a) On Debit Balance: As advised by Head Office from time to time

(b) On Credit Balance: Rate of interest payable will be as per Savings

Bank interest rate and follow the Savings Bank
Rules except opening a separate account.

ix. (MTPL) MEDIUM TERM PERSONAL LOAN

Medium term finance is defined as money raised for a period from one to five years.
The medium term funds are required by a business mostly for the repair and
modernizing of the machinery. There are different sources of raising the medium term
finances. One of the major source for the medium term finances are the commercial
banks. Commercial banks are now the most important source of providing medium
term loans. Loans are generally given against some security of assets. Generally the
loan is credited to the account of the borrower. He can withdraw the whole amount
once or in installments. Traditionally the banks were mainly concentrating on
providing short term loans. Now-s-days the term loans exceeding one year are being
provided by the banks.
 45

SWOT ANALYSIS
1. STRENGTH:
I. Provide loan to farmer & artisans at low rate of interest.
II. Provide MICRO FINANCE.
III. Help in rural upliftment.
IV. Backed by government.
V. No profit making motive.

2. WEAKNESS:
I. Far from technology.
II. No ATM machines.
III. No RTGS, NEFT system available (not yet).
IV. Poor structure of bank.
V. Lack of staff.

3. OPPORTUNITY:
I. Development opportunity available.
II. Soonly get IFSC code.
III. Job opportunity also available.

4. THREATS:
I. Increase in number of NPA (Non Performing Assset).
 46

II. No ATM it will be threat in nearer future.

III. Large customer is of poorer status.
IV. Most of branches works on no profit/no loss condition.

CONCLUSION

Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector
acts as the backbone of modern business. Development of any country mainly depends
upon the banking system.

A bank accepts money from the people in the form of deposits which are usually
repayable on demand or after the expiry of a fixed period. It gives safety to the deposits
of its customers.

A co-operative bank is a financial entity which belongs to its members, who are at the
same time the owners and the customers of their bank. Co-operative banks are often
created by persons belonging to the same local or professional community or sharing a
common interest. Co-operative banks generally provide their members with a wide range
of banking and financial services (loans, deposits, banking accounts...).

Co-operative banks differ from stockholder banks by their organization, their goals, their
values and their governance. In most countries, they are supervised and controlled by
banking authorities and have to respect prudential banking regulations, which put them at
a level playing field with stockholder banks. Depending on countries, this control and
supervision can be implemented directly by state entities or delegated to a co-operative
federation or central body.
 47

Even if their organizational rules can vary according to their respective national
legislations, co-operative banks share common features:

 Customer's owned entities: in a co-operative bank, the needs of the customers

meet the needs of the owners, as co-operative bank members are both. As a consequence,
the first aim of a co-operative bank is not to maximize profit but to provide the best
possible products and services to its members. Some co-operative banks only operate
with their members but most of them also admit non-member clients to benefit from their
banking and financial services.

 Democratic member control: co-operative banks are owned and controlled by

their members, who democratically elect the board of directors. Members usually have
equal voting rights, according to the co-operative principle of”one person, one vote".

Profile allocation: in a co-operative bank, a significant part of the yearly profit, benefits
or surplus is usually allocated to constitute reserves. A part of this profit can also be
distributed to the co-operative
The Co-operative Bank operates under its own brand as well as those of smile, Platform
and Britannia. We offer our services through 342 branches and 22 corporate banking
centers as well as telephony and online channels. We are a leader in the field of ethical
investment and corporate social responsibility. Our customer driven ethical strategy was
the first of its kind in our industry and we pursue an active strategy of community
involvement.
 48

LEARNING FROM TRAINING

 Account opening
 Cash withdrawal
 Cash deposit
 Different type of cheques
 Loans
 Voucher entry in FINACLE SOFTWARE
 49

REFERENCES
 Banking Awareness by Upendra Rai
 www.harcobank.com
 Annual report ob kccb.