On Job Training Project Report at

AGRICULTURE COOPERATIVE STAFF TRAINING INSTITUTE

(ACSTI) Sangti, Sumer Hill, Shimla - 171005

On

“Financial Performance Analysis of H.P. State Co-operative Bank Ltd.

- A Case study of B.O Sanjauli and B.O HP Dhalli. Submitted

for partial fulfilment of requirement for the reward of degree Of

Master of Business Administration

HIMACHAL PRADESH UNIVERSITY, SUMMER HILL, SHIMLA – 5

Submitted To: Submitted by:
THE PRINCIPAL Name:Manish Sharma
AGRICULTURE COOPERATIVE STAFF Roll No: 22065
TRAINING INSTITUTE (ACSTI) Department: HPUBS
Sangti, Sumer Hill, Shimla - 171005 Semester: Third

1
 DECLARATION
I Manish Shrama the undersigned solemnly declare that the report on the project work entitled
“Financial Performance Analysis H.P. State Co-operative Bank Ltd.- A Case Study of B.O
Sanjauli and B.O Dhalli at AGRICULTURE COOPERATIVE STAFF TRAINING
INSTITUTE (ACSTI) Sangti, Sumer Hill, Shimla - 171005, is based on my work carried out
during the course of my study.

I assert that the statements made and conclusions drawn are an outcome of the project work. I
further declare that to the best of my knowledge and belief that the project report does not contain
any part of any work which has been submitted for the award of any other
degree/diploma/certificate in this University or any other University.

Manish Sharma

2
 ACKNOWLEDGEMENT
I have taken efforts in this project. However, it would not have been possible without the kind
support and help of many individuals and organizations. I would like to extend my sincere thanks
to all of them.

I would like to express my special thanks/gratitude towards Himachal Pradesh University to given
me a exposure to done On Job Training programme from outside of campus.

I am highly indebted to Mrs Shivani Sharma (Mentor and Staff at AGRICULTURE

COOPERATIVE STAFF TRAINING INSTITUTE, Sangti, Summer Hill, Shimla-171005), for
their guidance and constant supervision as well as for providing necessary information regarding
the project & also for their support in completing the project.

I would like to express my gratitude towards my parents, siblings & friends for their kind
cooperation and encouragement which help me in completion of this project.

I would like to express my special gratitude and thanks to Himachal Pradesh State Co-operative
Bank persons for giving me such attention and time.

My thanks and appreciations also go to my friends and project guide in developing the project and
people who have willingly helped me out with their abilities.

3
 PREFACE
The project report has been prepared in partial fulfilment for the subject: the On Job Training
programme on the topic “Financial Performance Analysis H.P. State Cooperative Bank Ltd.” in
MBA, 3rd Semester for academic year 2022-23.

For preparing the project, I have completed my internship from Himachal Pradesh State
Cooperative Bank (Shimla) during the suggested duration for period of 2 months training to
enhance my knowledge. The blend of learning and knowledge acquired during my On Job Training
at the bank is presented in this Project Report. Main objective in undertaking this project is to
supplement academic knowledge with absolute practical exposure for day to day function of the
business organization.

The rationale behind doing On Job Training and preparing the project report to study H.P. State
Cooperative Bank bank two branches (B.O Sanjauli and B.O HP Dhalli) financial statements,
evaluation and interpretation of these statements. I find out the overall performance of the bank by
analysing statements with the help of Trend Analysis, Comparative Statement Analysis. With the
help of these financial analysis tool I am able to find out the annual performance and able to give
appropriate suggestions for growth of organisation.

S. no. TITLE PAGE NO.

Chapter-1
Company Profile/Introduction
➢ Introduction
➢ History and Evolution
➢ Mission & vision
➢ Research & development
➢ Present status
➢ Positional status
➢ Awards & other recognitions
➢ Organisational Structure 7-16

4
Chapter-2 Review of Literature 17-19

Chapter-3 Research methodology 20-22

Chapter-4

Analysis and Interpretation of Annual Reports

➢ Trend Analysis
➢ Comparative Analysis
23-47

Chapter-5 Findings and Conclusion. 48-50

Chapter-6 Suggestions and recommendations 51-52

Chapter-7 Bibliography 53

CONTENTS
Agriculture Cooperative Staff Training Institute,
Shimla

The Agriculture Cooperative Staff Training Institute popularly known as ACSTI was setup in
September, 1987. The Institute has its spacious complex situated at Sangti, Summerhill, Shimla.
The site of Institute has scenic surroundings. ACSTI is one of Shimla’s leading training institutions
with a long term commitment to develop leaders of the future as well as interest in contributing to
the economic, cultural and social future of the region and country, Owing to profound interest of
the H.P. State Co-operative Bank Ltd., Kangra Central Co-operative Bank Ltd., Jogindra Central
Co-operative Bank Ltd. and other Co-operative Institution(s) in developing human resources and
assessing training needs, this institute, which virtually began from a scratch has bloomed into a
full-fledged Training Centre, which is capable of catering to the training requirements of the
employees of Co-operative Institutions of the State & country.

5
The Aims and Objectives
• To conduct and assist the organizations in training programs, conferences, seminars
and workshops.
• To analyze and purpose solutions to problems encountered in planning and
implementation of developmental programs of Co-operatives.
• To undertake, promote and co-ordinate study and research.
• Disseminate information through periodicals, papers and looks in furtherance of the
objectives of the institute.

This Institute has been recognized as specialized for imparting training to all kinds of growing
managerial and other categories of co-operative Banks, Personnel of Co-operative Department,
other Co-operative Institutions, Commercial Banks and government Department of the State &
country.

Chapter: 1
Company
Profile/Introduction
COOPERATIVE BANKS

Cooperative Banks are the financial institutions that are owned and run by their customers and
operates on the principle of one person one vote. The bank is governed by both banking and
cooperative legislation, as they are registered under the Cooperative Society Act, 1965 and
regulated by NABARD & Reserve Bank of India (RBI). They operate in both rural as well as
urban areas and provide credit to borrowers and businesses. Cooperative Banks offer a range of
services like accepting deposits and granting loans to the members and even non-members. The
members are the owners and customers of the bank at the same time. The bank offers services like
6
deposit accounts such as savings and current account, safe keeping of valuables (locker facility),
loan and mortgage facility to the customers. A bank set up to provide finance to agriculturists,
rural industries and to trade and industry of urban areas (but up to a limited extent). Accepting
deposits from members and the public, and granting loans to farmers and small businessmen.

COOPERATIVE BANKING (STRUCTURE)

SHORT TERM LONG TERM

COOPERATIVECREDIT STT. COOPERATIVECREDIT STT.

AT APEX LEVEL (HEAD STATE COOPERATIVE AGRIC.

OF STATE) &RURAL DEVLOPMENT BANK URBAN
COMMERCIAL BANK

DISTRICT CENTRAL DISTRICT COOPERATIVE AGRIC.

COOPERATIVE & RURAL DEVLOPMENT BANK

PRIMERY AGRICULTURAL PRIMERY

SOCIETIES COOPERATIVESOCITIES

FEATURES OF COOPERATIVE BANK:

1. Governed sponsored, supported and subsided financial agencies in India.

2. Work on the principal of cooperation, self-help and mutual help.
3. The function on non-profit no loss basic.
4. Performed limited banking functions.
5. Some of them are Scheduled banks but are non-schedule bank.
6. At present, Cooperative banks in India do not operate mutual funds.
7. Cooperative banks usually cater to the credit needs of agriculturist.
7
8. The area of operations of Cooperative banks is limited and mostly confined to state. They
do not operate at national and international level.

8
 9. Cooperative banks are subject to rules laid down by the registrar of cooperative societies.
10. Cooperative banks are not nationalised and they do not provide merchant banking.

ADVANTAGES OF COOPERATIVE BANK:

• Easy to form
• No obstruction for membership
• Limited liabilities
• Service motive
• Stability and continuity

DISADVANTAGE OF COOPERATIVE BANK:

• Limited resources
• Insufficient management
• Lack of secrecy
• Absence of motivation
• Excessive government interference

H.P. STATE CO-OPERATIVE BANK

The Himachal Pradesh State Cooperative Bank Ltd. is an Apex bank of the State of Himachal
Pradesh; and is listed as Scheduled Bank with its branches spread across 6 districts of the State
and one branch at New Subzi Mandi, New Delhi.

Today HPSCB has all its branches on CBS, hence giving its customers benefits of technology at
their doorstep. HPSCB can boast of having services at par with any national/international bank in
the rural as well as Semi-Urban locations, the management of bank spares no efforts to provide
world-class banking to its valued customers.

9
The H.P. State Co-operative Bank Ltd. is the first State Co-operative Bank of India to implement
CBS in all of its branches. The bank has started RTGS/NEFT Services in all the branches and also
launching Internet Banking, Mobile Banking to the customers.

History:

The commercial Banks were operating for the years, but it was being felt that these banks were
not paying necessary head to the credit requirements of common masses. Further the commercial
banks, were mainly concentrating their business in the urban area and the banking facilities to rural
people were not available.

Consequently, the Co-operative Banks came into picture after 1904. Himachal Pradesh has the
distinction of having first Coop. Society Registered in India. Cooperative were primarily
visualized as specialized agency for financing the credit requirement of rural people in the country
particularly agriculture.

In Himachal Pradesh at the time of attaining independence of India, Mahasu Central Cooperative
Bank, The Mandi Central Co-operative Bank Ltd. and The Chamba Central Cooperative Bank Ltd.
we’re functioning to cater to the needs of farmer.

In 1953 Himachal Pradesh State Co-operative Bank was established after amalgamating these
three Central Co-operative Banks into it.

The Registration of Himachal Pradesh State Co-operative Bank was done in August, 1953, under
the Co-operative Society Act, 1912 the bank started functioning on 15th March 1954.At that time,
the State of Himachal Pradesh used to be the Union Territory and there were only 6 districts in the
State. The bank started functioning as an Apex bank as well as Central financing agency under 2-
tier system in 6 districts of the State.

In the year 1955 one Joint Stock Bank i.e., Bank of Sirmour was also merged in it. At present the
H.P.S.C.B. is performing dual function viz. that of Apex Co-operative Bank in Himachal
Pradesh to play lead role in development in Co-operative in the State and that of a Co-operative
Bank in 6 districts viz. BILASPUR, CHAMBA, KINNAUR, MANDI, SHIMLA and SIRMOUR.

The Bank is extending banking facilities in 5 districts viz. KANGRA, KULLU, HAMIRPUR,
LAHAUL & SPITI and UNA through our affiliated District Central Co-operative Banks, i.e. The

10
Kangra Central Co-operative Bank and in district SOLAN through another affiliated District
Central Co-operative Bank, The Jogindra Central Co-operative Bank as a District Central
Cooperative Bank

The Himachal Pradesh Cooperative bank is serving the people of the state through the network of
241 branches/Extension Counter spread across 6 districts of state and one branch at New Subzi
Mandi, Azadpur,New Delhi for the benefit horticulturists of the State.

The Himachal Pradesh cooperative bank limited actively associating in the implementation of
poverty eradication programmes launches by the government of India, government of Himachal
Pradesh various other agencies. The main scheme implemented by the bank under:

❖ Swam Jayanti Gram Swarozgar Yojna

❖ Self-help Group
❖ Kisan Credit Card Scheme

OBJECTIVES:

• To redeem the land of Farmers from private money lender.

• To save the farmer from the clutches of money lender and big land lord.
• To promote the economic interest of Agriculturist and Horticulturist.
• To fulfil the requirement of farmers through MT & LT loans.
• To offer financial products and services suiting the requirements of people of all the classes
of the society at most attractive forms with personalized services and a sense of
accountability in association with use of latest technology facilitating anywhere and
anytime banking.

Mission & Vision:

• Mission/Targets of the bank is to help the self-helped groups by providing them loans at
low rate. Providing the education to the workers/employees of the cooperative societies.

11
• Managing the financial status of the cooperative societies.

12
 • Bank's aim is to provide affordable banking facilities to the common people of the State of
Himachal Pradesh.
• The Bank is providing short term and medium term credit facilities to farmers, individuals,
professionals, and govt. employees through the network of Cooperative Societies as well
as directly.
• The bank aims at providing credit support to all segments of population by having tie up
arrangements with SC/ST Corporation, WDC and KVIB and extending credit facilities to
the beneficiaries for generating self-employment.

• Connecting all the branches with the core banking system (C.B.S.) to provide the online
banking facility.

Research & Development

The Business Development Department (BDD) of the H.P. State Cooperative Bank Shimla deals
with the research and development of the organization. The main focus of the department is to find
out the possibilities of the bank for serving more peoples in the rural and urban areas and to provide
a frame work for the future expectation of the bank. Other functions are providing the better
facilities for the consumers like installing the ATMs, developing the blue print for online banking
, internet banking, determining the market strategies for the future , determining the interest rate
on various schemas to earn reasonable profit for the bank

Product Line

H.P. state cooperative Bank has various products for the customers like Deposits:
Saving Account, Current Account, R.D, Himpunernivesh Deposit, Mahalaxmi Deposit and
Sarvapriya Deposit.
Loans:

13
Home Loan, Education Loan, Vehicle Loan (Govt. Employee), Kisan Credit Card, Agriculture
Loans, Irrigation Loan, Gold Loan Scheme, Self-Employment Loan and Self Help Groups.

Positional Status

The Himachal Pradesh State Cooperative Bank works at the APEX level in the hierarchy of the
cooperative banking. It acts as the central financing agency to the Kangra central cooperative bank
& Jogindra central cooperative bank. The Bank has a Deposit of Rs.12326 Crores and a loan book
size of Rs.7081 Crores.

Present status of Bank

The Himachal Pradesh State Cooperative Bank Ltd. is an apex Bank of the State, in three tier short
term credit structure of the State. Bank is delivering banking services in remotest of the remote
areas in six districts with a network of 218 branches and 23 extension counters, all these branches
are on CBS mode. State Co-operative Bank is the first State Co-operative Bank in the country on
the National financial switch through which the customers are getting ATM facilities all over the
Nation and about 87 own ATMs on strategic locations. Bank has applied to Reserve Bank of India
for obtaining licenses for 27 new branches and up gradation of 6 Extension Counters in to full-
fledged branches. Bank is also providing anywhere money transfer facilities through RTGS/
NEFT. The Bank is taking proactive steps towards financial inclusion and has adopted a BC Model
in two villages with the help of Primary Agriculture Cooperative Societies. Government of
Himachal Pradesh has authorised the Bank to disburse pension to the retired government
employees all across the State. The Bank is issuing RuPay, KCC Cards, Debit Cards and also
providing Mobile Banking, SMS Alerts and auto renewal of FDRs facilities to its valuable
customers. Bank is actively participating in Government of India Social Security Scheme i.e.
PMJJBY and PMSBY.

Awards and other recognitions

14
 ❖ The H.P. State Cooperative Bank Ltd. has double the agricultural advancement in about 2
years against the planed period of Govt. of India of 3 years.
❖ The H.P. State Cooperative Bank Ltd is the winner of the “Best Outreach Award” for
SHGs.
❖ H.P. State Cooperative Bank has prepared and implemented number of loan schemes
targeted towards all sections of the society at most attractive terms.
❖ The H.P. State Cooperative Bank Ltd. actively associating in the implementation of poverty
eradication programs launched by the Govt. of India, Govt. of H.P. and various other
agencies. The main Schemes being implemented by the Bank are as under:o Swarn Jayanti
Gram Swarojgar Yojna. o Swarn Jayanti Sehri Swarojgar Yojna. o Self Help Groups.

o Kisan Credit Card Schemes.

o Under Tie-Up with H.P. Khadi & Village Industries Board. o
Him Swarojgar Credit Card Scheme.
o SAMFEX o Him Small Entrepreneur Credit Card Scheme.
o Under Tie-Up with SC/ST Development corporation. o
Under Tie-Up with Women Development Corporation.
❖ The H.P. State Co-operative Bank Ltd. is the National Award Winner, which has been
conferred for achieving overall excellence in banking operations.
❖ The H.P. State Co-operative Bank Ltd. is the first Co-operative Bank of India to implement
Total Branch Automation software in all its branches.

❖ The H.P. State Co-operative Bank Ltd. is a profit earning and continuously dividend paying
organization.

Organisational Structure

The organizational structure of the H.P. State Cooperative Bank Ltd. Is as shown below:

15
 GENERAL BODY

Board of Directors

President

Executive Committee

Chief Executive Officer (Managing Director)

Mana (Banking)

Manager Manager

Manager

Staff

Chapter: 2
Review of Literature

16
 REVIEW OF LITERATURE
Vikas Dogra (2017): “Banking Structure and Performance: A case study on Cooperative Bank”
in this study he attempted to analyse the financial performance of the bank reflected by its output,
price and profitability during the period 2014-2017. This study suggests deregulation of interest
rates to enhance the profitability of financial institutions.

Bhawna Sharma (2012): “Customers’ Satisfaction for Banking Services: A Comparative Study
of Public and Private Sector Banks in Solan town of Himachal Pradesh”. The study suggested
reframing the Public Bank interest rate provisions in comparison with the Private Sector Banks
interest rates to enhance the profitability of financial institutions and to ensure a competitive
banking environment which would ultimately result in better services.

Puneet Bhardwaj (2015): “Customer Perceptions for Retail Banking in H.P. Co-operative Bank:
A Case premises to Solan town.” in his paper on viability of rural banking, inferred that low
volume of business per branch and per employee and high level of credit deposit ratio were two
major factors causing losses in rural banking system. He observed that relative share of nonfarm
sector loans in rural banks was going up.

Nidhi Chandel (2014): “Customer Satisfaction: Comparative Study of Public and Private Banks
in Shimla Town. She studied operational efficiency of some selected public sectors banks. She
found the lack of professionalism in banking industry and stressed for the introduction of scientific
management practices to enhance profits and profitability of public sector banks. She
recommended comprehensive management of costs as well as earning of the banks.

Priyanka Tomar (2017): “A Study on Consumer Awareness Regarding Banking Schemes and
Plans: A Case Study of Cooperative bank in Solan Town (HP). In his paper, she studied the
productivity in nationalised banks. She observed that labour productivity in nationalised banks,
over the time, had not only remained low but also substantially declined. She advocated the
restructuring of banks to improve productivity in Indian banks and suggested to provide complete
information about the banking schemes and plans.

17
Sumeeta (2012): “Analysis of Financial Statement of H.P. State Cooperative Bank Ltd. Shimla”
She was of the view that looking for profit maximization only was not true profitability of banks
as social benefits arising out of bank operations cannot be ignored. She observed that while
fulfilling the social responsibility, banks should try to make the basic banking business as
successful as possible, reduce cost, improve banking system and increase the overall profitability

SIGNIFICANCE OF STUDY:

The significance of this study is that, to get know about the Financial Performance of the Bank by
comparing Bank Financial Statements of last two years by Comparative Analysis, Trend Analysis
and Ratio Analysis to find out the performance of bank.

OBJECTIVES:

❖ The primary objective of the study is to evaluate the overall performance of the bank.

❖ To predict the future growth of the financial institution.

❖ To make inter firm comparison

❖ To access the progress of the firm over the period of time.

❖ To identify the reason for change in profitability and financial position of the institute.

❖ To give appropriate suggestions for the better performance of the organization.

18
 Chapter: 3
Research Methodology
RESEARCH METHODOLOGY

METHODOLOGICAL APPROACH

The overall approach which I adopted to complete my research problem is Descriptive Research.
Descriptive research is used to describe characteristics of population or phenomenon being
studied. It does not answer questions about how/when/why the characteristics occurred. Thus
descriptive research cannot be used as the basis of a causal relationship, when one variable affects
another.

Source of Data Collection

Secondary Data of two bank branches under Shimla (last three years Financial Statements)
are taken for consideration to analyse the performance of H.P. State Cooperative Bank these
are as follow:

H.P. State Cooperative Bank Sanjauli

(IFSC Code: HPSC0000433)

H.P. State Cooperative Bank Dhalli

(IFSC Code: HPSC0000409)

19
Financial Statement (Last three years) of these branches are taken as raw data from the Branch
Managers for the completion of Case Study and Analysis of H.P. State Cooperative Bank
performance.

METHODS OF FINANCIAL ANALYSIS:

There are various methods of annual report analysis the following methods of analysis is generally
used.

➢ Trend analysis

➢ Comparative Statement

Trend Analysis: is a technique used in technical analysis that attempts to predict the future
stock price movements based on recently observed trend data. Trend analysis is based on the idea
that what has happened in the past gives traders an idea of what will happen in the future.

Comparative Statement: A comparative statement is a document used to compare a financial

statement with prior period statements. Previous financial are presented alongside the latest figures
in side-by-side columns enabling investors to identify trends, track a company’s progress and
compare it with industry rival.

20
 Chapter: 4
Financial Analysis and
Interpretation of Annual
Reports

21
 H P STATE COOPERATIVE BANK
SANJAULI

DEPOSITS:
YEAR DEPOSITS
2020 1062303266.53
2021 1145251954.00
2022 1159852586.97

DEPOSITS

2.5E+09

2E+09

1.5E+09

1E+09

500000000

0
2020 2021 2022
DEPOSI 1062303266 1145251954 1159852586
TS
DEPOSITS

NOTE: Deposits are of three types current deposits, savings bank deposits, fixed
deposits. In this case maximum deposits are in form of savings bank deposits then fixed
deposits and current deposit.
LOANS:
YEAR LOANS
2020 134957158.02
2021 132819736.76
2022 131606105.96

LOAN
S

0
2020 2021 2022
LOAN 134957158.02 132819736.76 131606105.96
S LOAN
S

NOTE: In providing loans and advances the maximum loans are provided in short
term loan category then medium term loans and long term loans category.
TREND ANALYSIS:

1) INTEREST ON LOANS:

YEAR INTEREST ON LOANS

2020 4584292.43
2021 4353901.43
2022 4319192.43

interest
4700000
4600000
4500000
4400000
4300000
4200000
4100000
2020 2021 2022

interest

INFERENCE: Starting from year 2020 we can se there is decrease in interest earned on
loans in year 2021,then in 2022 there is small decrease in interest earned.Therefore we
can say that there is absolute decrease and thus graph showing decreasing trend.

INTEREST ON H.O INVESTMENT:

YEAR INTEREST ON HO INVESTMENT

2020 67606819
2021 70763493
2022 77464270
 interest
80000000
75000000
70000000
65000000
60000000
2020 2021 2022

interest

INFERENCE: From base year 2020 there is significant increase in interest earned on HO
Investment but after 2021 there is sharp decrease as shown in graph which indicates significant
decrease in interest earned on HO Investment.

PROFIT:

YEAR PROFIT
2020 10976201.49
2021 13373442.69
2022 18996864.81

profit
20000000

15000000

10000000

5000000

0
2020 2021 2022

profit

INFERENCE: Here we can see significant increase in profit from 2020 to 2021 and there is huge increase
trend in profit as we reach year 2022.
 COMPARATIVE STATEMENT ANALYSIS:

1) DEPOSITS:

Absolute Absolute Absolute Absolute Change Percentage

DEPOSITS Figures Figures Figures ( Increase or Change(%)

Decrease)
A(2020) B(2021) C(2022) (C-A)=D D/A*100=E

2020-2022 1062303266.8 1145251954.0 1159852586.9 (9,75,49,320.08) 9.18%↑

9 0 7

INFERENCE:

In this comparative table above H.P State cooperative bank deposits increased by 21%.
Deposits help bank to provide fund to different priority sectors like Agricultre,house loans etc.
Because deposits are the main source of reserve for bank. Higher the deposits, higher the
efficiency of the bank.

2) LOANS AND ADVANCES:

Absolute Absolute Absolute Absolute Change Percentage

LOANS AND Figures Figures Figures (Increase or Change(%)

Decrease)
ADVANCES A(2020) B(2021) C(2022) (C-A)=D D/A*100=E

2020-2022 134957158. 132819736.76 131606105.96 3351052.06 2.48↓

02

INFERENCE:

In this comparative table above HP State cooperative bank loans and advances decreased by
2.48%. Advances are the short, medium and long term debt given by bank to entities for fulfilling
their requirements. It helps bank to generate enough profit through interest paid on them by
customers.
 3) INCOME:

Absolute Absolute Absolute Absolute Change Percentage

INCOME Figures Figures Figures (Increase or Decrease) Change(%)

A(2020) B(2021) C(2022) (C-A)=D D/A*100

2020-2022 81274700.75 88584912.97 90333746.79 9059046.04 11.14%↑

INFERENCE:

In this comparative table above we can see that there is significant increase of 11.4% in income
of HP State cooperative bank. This increase in income show that bank is in positive state which
shows bank efficiency in all aspects.

CASH- DEPOSITS (CD) RATIOS:

A(2020) B(2021) C(2022)

CD RATIO 12.7% 11.5% 11.3%

cd ratio
13

12.5

12

11.5

11

10.5
2020 2021 2022

cd ratio

INFERENCE:

The credit-deposit ratio broadly means the ratio of assets and liabilities of the bank. It is used for
measuring a bank’s liquidity by dividing the bank’s total loans disbursed by the total deposits
received.Now from above graph we can see that there is continuous decrease in CD ratio which
is a great indicator of bank’s efficiency but it is quite low from required ratio. Although RBI has
not given particular CD ratio which can be standardized but it is considered that it should be
maintained between 60-70%.
NON-PERFORMING ASSETS(NPA):

Non-Performing assets are loans and advances that are in default or are
not generating income for the lender. In the financial industry, managing
and reducing NPAs is very crucial for maintaining a healthy loan portfolio.
NPA of HP State cooperative bank is categorized in different categories
such as standard, sub-standard, doubtful,loss.

CATEGORY AMOUNT

Standard 111320881.62

Sub Standard 4280970.00

Doubtful 19355306.40

a) D1 82373.43

b) D2 2276117.00

c) D3 16996815.97

Loss -----------

Total 134957158.02

YEAR 2020

INFERENCE:

From table above we can see that maximum NPAs fall under standard
category which does not impose any risk other than normal business risk.
But we can see amount under doubtful category which impose risk of
overdue over a period of 6 years. NPAs of D3 category stands at 12.59%
for year 2020.
 YEAR 2021

CATEGORY AMOUNT

Standard 111355384.80

Sub Standard 6807416.96

Doubtful 14656935.00

a) D1 19072.00

b) D2 61049.43

c) D3 14576813.57

Loss

Total 132819736.76

INFERENCE:

From table above we can see that maximum NPAs fall under standard
category which does not impose any risk other than normal business risk.
But we can see amount under doubtful category which impose risk of
overdue over a period of 6 years. Here maximum loan is provided under
medium term then long term and CC Industries. NPAs of D3 category
stands at 10.97% for year 2021.
 YEAR 2022

CATEGORY AMOUNT
Standard 112911105.26

Sub Standard 5068405.26

Doubtful 13626595.03
a) D1 253762.00
b) D2 61049.43
c) D3 13311783.60
Loss
Total 13606105.96

INFERENCE:

From table above we can see that maximum NPAs fall under standard
category which does not impose any risk other than normal business risk.
But we can see amount under doubtful category which impose risk of
overdue over a period of 6 years. Here maximum loan is provided under
medium term then long term and CC Industries. NPAs for doubtful category
D3 stands at 10.11% in 2022.
NPA ASSESSMENT:
YEAR CATEGORY AMOUNT
2020 Doubtful (D3) 16996815.97
2021 Doubtful (D3) 14576813.57
2022 Doubtful (D3) 13311783.60

NPA
2500000

2000000
14576813.57

1500000 13311783.60

16996815.97

1000000

500000

0
2020 2021 2022

NPA

INFERENCE:

From the graph above we can see there is decreasing trend in NPA in
doubtful category.There is decrease in NPA from 2020 to 2021 after that it
start decreasing upto 2022 but absolute change from 2020 to 2022 is
negative which shows that there is decrease in NPA in past three years.
 HP STATE COOPERATIVE BANK DHALLI

DEPOSITS:
YEAR DEPOSITS
2020 845217085.73
2021 655281679.87
2022 658843671.62

DEPOSITS

900000000
800000000
700000000
600000000
500000000
400000000
300000000
200000000
100000000
0
2020 2021 2022
DEPOSITS 845217085.73 655281679.87 658843671.62

DEPOSITS

NOTE:
Deposits are of three types current deposits, saving bank deposits and
fixed deposits. Deposits are the major source for banks and enhance its
abilities to provide loans and advances to customers and in this case
maximum deposits are in the form of saving bank deposits followed by
fixed deposits and current deposits.
LOANS AND ADVANCES:
YEAR LOANS
2020 121552336.28
2021 135273244.43
2022 124990986.52

106000000
104000000
102000000
100000000
98000000
96000000
94000000
92000000
9 0000000
2020 2021 2022
LOANS 121552336.28 135273244.43 124990986.52

LOANS

NOTE:

Loans and advances mainly categorized into three categories that are short
term loans, medium term loans and long term loans. Loans show bank
efficiency to provide financial assistance to different sectors and bank’s
capability to generate income. In this case maximum loans are provided in
short term category followed by medium term and long term loans.
TREND ANALYSIS:

1) INTEREST ON LOANS:
YEAR INTEREST ON LOANS
2020 4196644.12
2021 4369116.22
2022 4418876.22

interest
4450000

4400000

4350000

4300000

4250000

4200000

4150000

4100000

4050000
2020 2021 2022

interest

INFERENCE:
From the graph above we can see increase in interest earned on loans and
advances from the year 2020 to 2021, and after 2021 to 2022 there is
similar increasing trend which show increase in interest earned. One thing
which is crucial to note that there is overall increase in interest earned from
base year that is 2020.
2) INTEREST ON HO INVESTMENT:
YEAR INTEREST ON HO INVESTMENT
2020 46202739.20
2021 46306820.00
2022 39477629.00

interest
48000000

46000000

44000000

42000000

40000000

38000000

36000000
2020 2021 2022

interest

INFERENCE:

From the graph above we can see small decrease in interest earned on
HO investment which is very significant from the 2020 to 2021. Then after
that it very huge decrease till 2022, and if we realize one thing that very
recent year earning is quite low than that of base year which is 2020.
3) PROFIT:
YEAR PROFIT
2020 7287089.88
2021 10212541.93
2022 15065426.35

profit
16000000
14000000
12000000
10000000
8000000
6000000
4000000
2000000
0
2020 2021 2022

profit

INFERENCE:

From the graph above we can see that there is continuous increase in
profit. This increase indicates that bank is earning profit which enhances
the bank’s capability to perform its functions smoothly.
 COMPARATIVE STATEMENT ANALYSIS:

1) DEPOSITS:

Absolute Absolute Absolute Absolute Change Percentage

DEPOSITS Figures Figures Figures (Increase or Decrease) Change (%)
A(2020) B(2021) C(2022) C-A=D D/A*100=E
2020-2022 845217085.73 655281679.87 658843671.62 186373414.11 22.05↓

INFERENCE:

In this comparative table above H.P State cooperative bank’s deposits

decreased by 22.05%Deposits help bank to provide fund to different priority
sectors like agriculture, house loans etc. Because deposits are the main
source of reserve for bank. Higher the deposits, higher the efficiency of the
bank.

2) LOANS AND ADVANCES:

Absolute Absolute Absolute Absolute Change Percentage
LOANS & Figures Figures Figures (Increase or Decrease) Change(%)
ADVANCES A(2020) B(2021) C(2022) C-A=D D/A*100=E
2020-2022 121552336.28 135273244.43 124990986.52 34,38,650.24 2.82↑

INFERENCE:
In this comparative table above HP State cooperative bank loans and
advances decreased by 2.82%. Advances are the short, medium and long
term debt given by bank to entities for fulfilling their requirements. It helps
bank to generate enough profit through interest paid on them by customers.
 3) INCOME:
Absolute Absolute Absolute Absolute Change Percentage
INCOME Figures Figures Figures (Increase or Decrease) Change(%)
A(2020) B(2021) C(2022) C-A=D D/A*100=E
2020-2022 58556736.786 61782673.76 59875079.69 13,18,342.93 2.25↑

INFERENCE:

From the comparative table above we can see there is continuous increase in income
of HP cooperative bank from the year 2020 to 2021and the decrease in year from 2021
to 2022. In absolute figure there is significant increase in income which is 2.25 percent
from the base year which is 2020. This figure indicates that bank is unable to generate
large profit on its investment thus require major steps to be taken to improve the
efficiency of the bank.

CASH DEPOSIT (CD) RATIO ANALYSIS:

A(2020) B(2021) C(2022)
CD RATIO
14.38% 20.64% 18.97%

cd ratio
25

20

15

10

0
2020 2021 2022

cd ratio

INFERENCE:

The credit-deposit ratio broadly means the ratio of assets and liabilities of the bank. It is used for
measuring a bank’s liquidity by dividing the bank’s total loans disbursed by the total deposits
received. Now from above graph we can see that there is increase in CD ratio from 2020 to
2021 after that it decreases from 2021 to 2022 .So it is a great indicator of bank’s efficiency
but it is quite low from required ratio. Although RBI has not given particular CD ratio which can
be standardized but it is considered that it should be maintained between 60-70%.
NON-PERFORMING ASSETS (NPA):

Non-Performing assets are loans and advances that are in default or are
not generating income for the lender. In the financial industry, managing
and reducing NPAs is very crucial for maintaining a healthy loan portfolio.
NPA of HP State cooperative bank is categorized in different categories
such as standard, sub-standard, doubtful,loss.

CATEGORY AMOUNT

Standard 109466388.30

Sub Standard 3222527.82

Doubtful 8863420.16

a) D1 531406.00
b) D2 ------------

c) D3 8332014.16

Loss -----------

Total 121552336.28

YEAR 2020

INFERENCE:

From table above we can see that maximum NPAs fall under standard category which
does not impose any risk other than normal business risk. But we can see amount
under doubtful category which impose risk of overdue over a period of 6 years. Here
NPA stands at 6.85%.
 YEAR 2021

CATEGORY AMOUNT

Standard 124480129.97

Sub Standard 641392.00

Doubtful 9825148.72

a) D1 2937029.82

b) D2 -------------

c) D3 6888118.90

Loss -------------

Total 135290543.69

INFERENCE:

From table above we can see that maximum NPAs fall under standard
category which does not impose any risk other than normal business risk.
But we can see amount under doubtful category which impose risk of
overdue over a period of 6 years. Here maximum loan is provided under
medium term then long term and CC Industries. In this case NPA stands at
5.09%.
 YEAR 2022

CATEGORY AMOUNT
Standard 116439825.01

Sub Standard 40623.00

Doubtful 7996529.14
a) D1 600769.00
b) D2 2826677.82
c) D3 4569082.32
Loss ------------
Total 124999636.15

INFERENCE:

From table above we can see that maximum NPAs fall under standard
category which does not impose any risk other than normal business risk.
But we can see amount under doubtful category which impose risk of
overdue over a period of 6 years. Here maximum loan is provided under
medium term then long term and CC Industries. In this case NPA stands at
3.65%.
NPA ASSESSMENT:
YEAR CATEGORY AMOUNT
2020 Doubtful (D3) 8332014.16
2021 Doubtful (D3) 6888118.90
2022 Doubtful (D3) 4569082.32

NPA

6888118.90
2500000 .9073282.1
1833201
2000000 4.16
14569082.3
2
1500000

1000000

500000

0
2020 2021 2022

NPA

INFERENCE:

From the graph above we can see there is decreasing trend in NPA in
doubtful category.There is decrease in NPA from 2020 to 2022 but
absolute change from 2020 to 2022 is negative which shows that there is
decrease in NPA in past three years.
 CHAPTER-5:

FINDINGS AND CONCLUSION

From the current comparative financial statement analysis of HP state cooperative bank
(two branches) BO Sanjauli and BO Dhalli

1) TREND ANALYSIS FINDINGS:

BO SANJAULI: From trend analysis of this branch we can conclude that year 2022 is
the most profitable year compare to year 2020 and 2021. Here profit is maximum and
interest earned on HO investment is maximum on 2022. Here we can conclude that
bank is in good position if we take year 2020 as base year and compare it with rest two
years.

BO DHALLI: From trend analysis we can draw conclusion that most profit earned in the
year 2022. On the other hand maximum return on loans and advances is in year 2021
and maximum return on HO investment is in year 2021.

Percent BO Sanjauli BO Dhalli

Change(%)

Deposits 9.8%↑ 22.05%↓

Loans and 2.48%↓ 2.82%↑

advances

Income 11.14%↑ 2.25%↑

2) COMPARATIVE STATEMENT ANALYSIS FINDINGS:

From the comparative statement analysis we can draw conclusions that HP state
cooperative bank bo sanjauli is in good position in comparison to bo dhalli. Here Dhalli
branches have significant decrease in their deposits, whereas there is increase in
deposits in Sanjauli in same time .In case of loans and advances bo dhalli has slight
increase of 2.82%. In case of income hp sanjauli branch has increase of 11.14%, while
in case of bo dhalli there is slightly increase in income which is 2.25% which is needed
to further improvement.

3) CASH-DEPOSIT RATIO ANALYSIS:

CD RATIO 2020 2021 2022

BO SANJAULI 12.7% 11.5% 11.3%

BO DHALLI 14.38% 20.64% 18.07%

From the table above we can draw conclusion that cd ratio of bo dhalli. are much
higher than that of bo sanjauli. Although there is increasing trend in cd ratios of both
branches, but are much lower than that of required ratio which is 60-70%. So we can
say that both branches require improvement in their cd ratio to sustain in long run.

4) NON-PERFORMING ASSET FINDINGS:

NPA of hp state cooperative bank Sanjauli are higher than that of bo Dhalli. Year 2020
show maximum npa for both the branches. Here maximum npa fall under standard
category which do not impose any serious threat other than that of daily business risks.
Threat impose by npa fall under doubtful category which is not that higher but in case of
bo dhalli it is sign of worry because its income is increasing at slower pace by 2.5% as
compare to 11.14%increase in income of bo Sanjauli at same time period and standby
npa impose another threat.
 Chapter: 6
Suggestions and
Recommendations

To run any organization successfully the management needs to think always for
the betterment of their service and product, every time there is a chance of improvement in the
functioning of every organization specially when we talk about the banking sector in past there is
very less or no competition in the market and the banks has no pressure to provide better
facilities to the peoples but in recent years the competition is increased due to the entry of the
private banks and other money lending units . Considering this the state cooperative banks need
to be more careful and needs to take such steps which favours hem to stay ahead in the market.
Some of the suggestions and recommendation are given here which may help the H.P. State
Cooperative Bank to stay in the competitive market if they adopt these.

1. Diversifications in investments e.g. RD, FD, etc. helps customers to invest more
money in bank.

51
2. The provisions regarding interest rate should be revised so that more peoples are
engaged in saving money.
3. Interest rate on term deposits should be higher than current and cash deposits because
people stop withdraw money and engaged in saving then proper circular flow of money
should be there.
4. Bank have to invest money in portfolios because chances return on investment is higher
than rely on two or more investment plans.
5. Proportion of Assets over Debts & Liabilities should be higher for operating business
effectively, this can be happen when interest charged on loans is higher than the interest
given on deposits.
6. To build a vast customer network bank can give Zero Account Balance services for
employees, students and poor peoples in rural areas so that they have access to bank
facilities and promote savings.
7. Varieties of banking product and services given to customers with appropriate
Knowledge about their Products.
8. Loaning procedure should be simple, less documentation should be involved in the
loan sanctioning procedure with reliable security.
9. Customer’s satisfaction must be the top priority of the bank.
10. Bank must make use of artificial intelligence in banking.

BIBLIOGRAPHY

1. www.hpscb.com

2. www.google.com

3. www.rbi.com

4. www.bankmate.com

52
5. “Economic Survey 2021-2022” by department of Economics and Statistics Himachal
Pradesh

6. Documents provided by the bank employees.

7. Various circulations issued by the bank itself, by RBI, by NABARD.

53