Study on service quality in HDCC bank

INDUSTRY PROFILE
2.1 INTRODUCTION:
Banking in India in the modern sense originated in the last decades of the 18th century. The first
banks were Bank of Hindustan (1770-1829) and The General Bank of India, established 1786
and since defunct.
The largest bank, and the oldest still in existence, is the State Bank of India, which originated in
the Bank of Calcutta in June 1806, which almost immediately became the Bank of Bengal. This
was one of the three presidency banks, the other two being the Bank of Bombay and the Bank of
Madras, all three of which were established under charters from the British East India Company.
The three banks merged in 1921 to form the Imperial Bank of India, which, upon India's
independence, became the State Bank of India in 1955. For many years the presidency banks
acted as quasi-central banks, as did their successors, until the Reserve Bank of India was
established in 1935.
In 1969 the Indian government nationalized all the major banks that it did not already own and
these have remained under government ownership. They are run under a structure know as
'profit-making public sector undertaking' (PSU) and are allowed to compete and operate
as commercial banks. The Indian banking sector is made up of four types of banks, as well as the
PSUs and the state banks; they have been joined since the 1990s by new private commercial
banks and a number of foreign banks.
Banking in India was generally fairly mature in terms of supply, product range and reach-even
though reach in rural India and to the poor still remains a challenge. The government has
Developed initiatives to address this through the State Bank of India expanding its branch
network and through the National Bank for Agriculture and Rural Development with things like
microfinance.
Indian Banking Industry currently employees 1,175,149, employees and has a total of 109,811
branches in India and 171 branches abroad and manages an aggregate deposit of 67504.54
billion (US$1.1 trillion or 840 billion) and bank credit of 52604.59 billion (US$890 billion or

Study on service quality in HDCC bank

650 billion). The net profit of the banks operating in India was 1027.51 billion (US$17 billion
or 13 billion) against a turnover of 9148.59 billion (US$160 billion or 110 billion) for
the fiscal year 2012-13.
Cooperative banks
The Co-operative bank has a history of almost 100years. The Co-operative bank is an important
constituent of the Indian financial system, judging by the role assigned to them, the expectations
they are supposed to fulfill, their number and the number of offices they operate. The Cooperative movement originated in the West, but the importance that such banks have assumed in
India is rarely paralleled anywhere else in the world. The role in rural financing continues to be
important even today, and their business in the urban areas also has increased phenomenally in
recent years mainly due to the sharp increase in the number of primary Co-operative banks.
While Co-operative banks in rural areas mainly finance agriculture based activities including
forming, cattle, milk, hatchery, personal finance etc. along with small scale industries and selfemployment driven activities, the Co-operative banks in urban areas mainly finance various
categories of people for self-employment, industries, small scale units, home finance, personal
finance, etc.
The Co-operative institutions play an important role in providing credit to agricultural sector
since 1904 in India. The district central Co-operative bank occupies a key position in the Cooperative credit structure. The success of the Co-operative credit movement largely depends as
their financial strength.

OVERVIEW
Co-operative movement quite well established in India. When Co-operative societies Act passed
in 1904 there was no provision for the formation of central bank. In 1914 the Maclagen
committee envisaged a three tier structure for Co-operative banking viz. primary agricultural
credit societies (PACs) at the gross level, Central Co-operative banks at the district level and
state Co-operative banks at state level or apex level. The first urban Co-operative bank in India
was formed nearly 100 years back in Baroda.

Study on service quality in HDCC bank

In beginning of 20th century, availability of credit in India more particularly in rural areas
was almost absent. Agricultural and related activities were starved of organized, institutional
credit. In the formative stage co- operative societies run on community basis and their lending
activities were restricted to meeting the credit requirement of their members. The concept of
urban co- operative bank was first spelt out by Mehta Bhansali committee in 1939 which on
urban co= operative bank. Provision of section 5(CCV) of banking regulation Act, 1949 defined
an urban Co-operative bank as a primary Co-operative bank other than a primary Co-operative
society was made applicable in 1966.
The Karnataka Co-operative societies Act and coming under the purview of banking regulation
Act 1949. The bank should have been functioning for a period of at least three years and should
be a member of the local clearinghouse and deserving cases, the Apex Bank may even consider
enrolling banks that have been functioning for one year as member. The bank should have
mentioned a current account with the head office branch of K.S.C. Apex Bank Ltd. All DCC
banks, urban Co-operative banks and their branches are eligible to become members of the
IMAS scheme, in which case the minimum working capital of the banks should be Rs.150 Lakh.
There should not be continuous defaults in the maintenance of the cash reserves ratio and liquid
assets as required under section of banking regulation Act 1949.
Main principles of Co-operative banks are Voluntary and Open membership.
Democratic Member Control.
Member Economic Participation.
Autonomy and Independence.
Education, Training and Information.
Co-operative among Co-operatives.
Concern for community.

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Classification of Co-operative Banks

Co-operative Credit institution

Urban Co-operative
Banks (UCBs)

Rural Co-operative

Short Term Rural Co-operative Banks

State Co-operative
Banks (SCB)

Long Term Rural cooperative Banks

Primary Agricultural
Credit societies
(PACS)

Central Co-operative Banks

(CCBs). Or District Cooperative Banks

State Co-operative Agriculture and Rural

Development Banks
(SCARDBs)

Primary Co-operative Agriculture and

Rural Development Banks (PCARDBs)

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Urban Co-operative Banks:
UCBs consist of single tier, viz. primary co-operative Banks, commonly referred to as urban Cooperative Banks. Primary (urban) co-operative Banks play an important role in meeting the
growing credit needs of urban and semi-urban areas. UCBs mobilize savings from the middle
and lower income groups and purvey credit to small borrowers, including weaker sections of the
society. The regulation and supervision of UCBs have been brought within the ambit of reserve
Bank.
Rural Co-operative Banks:
The rural Co-operative credit structure has traditionally been bifurcated into two parallel wings
Viz., short-term and long-term.

Short-term Rural Co-operatives:

These credit institutions have a federal three tier structure. At the apex of the system is a state
Co-operative Banks (SCB) in each state. At the middle (or district) level, there are central Cooperative Banks (CCBs) also known as district central Co-operative Banks. At lowest (or village)
level are the primary Agriculture Co-operative societies (PACS). The smaller states and Union
Territories (UTs) have a two-tier structure with state Co-operative Banks directly meeting the
credit requirement of PACS.

State Co-operative Banks:

The SCB is the highest agency of the three-tier co-operative credit structure in a state. It serves
as a link between RBI, CCBs and PACS. The RBI provides credit to lower level co-operatives
through the SCB. This function of the RBI has now been taking over by the NABARD. The SCB
also acts as a balancing center for CCBs. The exercises general control and supervision over
CCBs and PACS.

Central Co-operative Bank

These Banks act as a link between the SCB and PACS. The main task of CCBs is to lend money
to affiliated village primary societies. The CCBs are expected to attract deposits from the general
public.

Study on service quality in HDCC bank

Primary Agriculture Credit Societies (PACS)

These societies form the basic unit of the co-operative credit system in India. These voluntary
societies based on the principle of one man one vote have posed challenge to the exploitative
practices of the village money lenders. The farmers and other small time borrowers come on
direct contact with these societies. The success of the co-operative credit movement depends
largely on the strength of these villages level societies. These are more than one Lakh such
societies in the country at present. A major objective of PACS is to serve the needs of weaker
sections of society. For this purpose, the people with limited means, particularly scheduled castes
and scheduled tribes, are encouraged to become members of these societies. Government has
promoted multi-purpose societies in tribal areas for the benefit of people living there.

Long term Rural Co-operatives:

Generally, these Co-operative have two tiers, Viz., State Co-operative Agriculture and Rural
Development Banks (SCARDBs) at the state level and primary Co-operative Agriculture and
Rural Development Banks (PCARDBs) at the taluk level. However, some states have a unitary
structure with the state level banks operating through their own branches; three states have a
mixed structure incorporating both unitary and federal systems.
NABARD and Co-operative sector:
National Bank for Agriculture and Rural Development (NABARD) is an apex institution
accredited with all matters concerning policy, planning and operations in the field of credit for
Agriculture and other economic activities in rural areas in India. NABARD serves as an apex
refinancing agency for the institution providing investment and production credit in rural areas.
Other main activities of NABARD include:
Initiating measures towards institution building for improving absorptive capacity of the
credit delivery system, including monitoring, formulation of rehabilitation schemes,
restructuring of credit institution and training of personal.
Coordinating the rural financing activities of all institutions engaged in development work at
the field level.

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Maintaining liaison with the Government of India, the State Government, the reserve Bank
and other national level institutions concerned with policy formulation.
Undertaking monitoring and evaluation of projects refinancing by it.
NABARD providing refinance to State Co-operative Agriculture and Rural Development Bank
(SCARDBs), State Co-operative Banks (SCBs), Regional Rural Banks (RRBs) and other
financial institutions approved by the Reserve Bank. The ultimate beneficiaries of refinance from
NABARD could be individuals, partnership concerns, companies, and state owned corporations
or Co-operatives societies.
Origin of Co-operative Banks:
When Co-operative Societies Act was passed in 1904 there was no provision for the formation of
central banks. The sponsors of the Co-operative movement expected that the rural credit societies
would be able to attract substantial deposits from the members as well to do section of the village
community and their saving would be available to meet the needs of needy village. It was also
contemplated that any deficiency in the funds would be made good by loans from the
Government.
The Co-operative banking movement in India can be traced to the 19th century when, inspired by
success of the experiments related to the Co-operative Movement in Britain and the Cooperative Credit Movement in Germany, such societies were set up in India. Co-operative banks
are an important constituent of the financial system. They are the primary financiers of
Agricultural activities, some small-scale industries and self-employed workers. The Anyonya
Co-operative Bank in India is considered to have been the first Co-operative bank in Asia.
The co-operative movement in India over its origin in agriculture and allied sector is at the end
of 19th century. The rural indebtedness and the consequent conditions of farmers created an
Environment of the chit funds and co-operative societies. The formers are generally found the
co-operative movement as an attractive mechanism for pooling their meager resources for
solving common problems relating to credit, supply of inputs and marketing of agriculture
produces. The experience gained in the working of co-operative led to the enactment of Cooperative Credit societies Act, 1904 subsequently a more comprehensive legislation the Co-

Study on service quality in HDCC bank

operative Societies Act, 1942 was enacted. This act intern provided for the creation of
Registration of Co-operative Societies for various purposes and audit.
Growths and Development of Co-operative Banks:
Co-operative Movement is quite well established in India. The first legislation on Co-operative
was passed in 1904. In 1914 the Maclagen committee envisaged a three tier structure for Cooperative banking viz, primary Agricultural credit societies (PACs) at the gross root level,
Central Co-operative Banks at the district level and state co-operative Banks at State level or
apex level. The first urban co-operative Bank in India was formed nearly 100years back in
Baroda. Co-operative institution are engaged in all kinds of activities namely Production,
processing, marketing, distribution, servicing and banking in India and have visit and powerful
superstructure. Co-operative banks are important cogs in this structure.
In the beginning of 20th century, availability of credit in India more particularly in rural areas
was almost absent. Agricultural and related activities were starved of organized, institutional
credit. The rural folk had to depend entirely on the money lenders, who lent often at usurious
rates of interest. The Co-operative banks arrived in India in beginning of 20th century as an
official effort to create a new type of institution based on the principles of co-operative
organization and management, suitable for problems peculiar to Indian conditions. These banks
were conceived as substitutes for money lenders to provide timely and adequate short-term and
long-term institutional credit at reasonable rates of interest.
Even though co-operative banking was introduced from year 19th October 1953, the real
development in the country was started only the passing of separate banking regulation act for
Co-operative banks called Banking Regulation Act, 1949 (as applicable to co-operative societies
in 1966). Co-operative banks are organized and controlled as per the provision of concerned cooperative society Act, but their banking operations are regulated by the Banking Regulation Act,
1949 also controlled by the RBI.
Over the years, primary co-operative banks have registered a significant growth in number, size
and volume of business handled. As on 31st march, 2003 there were 2,104 co-operative banks

Study on service quality in HDCC bank

which 56 scheduled banks. About 79 percent of these are located in five states, like Andhra
Pradesh, Gujarat, Karnataka, Maharashtra and Tamil Nadu. Recently the problems faced by a
few co-operative banks have highlighted some of the difficulties these bank face and policy
endeavors are geared to consolidating and strengthening these sector and improving governance.
Future Prospects of Co-operative Banks
RBI has decided not to allow urban co-operative bank (UCBs) with less than Rs.50crore net
worth to spread their operation outside their state of jurisdiction. The

main risk exposure of

UCBs was not credit risk but interest rate risk, as interest rates paid by these banks, particularly
on deposits, were out of sync with the rest of the banking sector. The sheer number of weak
UCBs, which is well over 200, is a cause for concern for the RBI.
Rehabilitation of these banks may involve strategies such as the registrars directing co-operative
courts for speedy recovery process and execution of decrees, unviable branches being either
relocated or closed down, exploring avenues for getting additional capital and merger with a
well-managed bank.
The RBI shifted its policy focus gradually from crisis management to recovery management. On
the credit delivery front, now developments including the introduction of the base rate
mechanism and waiver of security/ margin norms for agricultural loans. Financial literacy and
financial inclusion have been the thrust areas. Among the important financial measures unveiled
has been the securities and insurance Laws (Amendment and validation) Bill, 2010, passed by
parliament to provide a joint mechanism to resolve inter-regulatory differences.
RBI is taking number of steps to improve IT infrastructure facilities and initiated steps for further
absorption of technology.
There are two major technological milestones are achieved they are:
1) Technological advancement with all public sector banks adopting or about to adopt
computerization. The number of PSBs adopting core banking solutions has been on the rise.

Study on service quality in HDCC bank

2) From the point of view of financial inclusion, there has been a steady increase in the
penetration of bank branches and ATMs, especially in rural areas.

GENESIS AND HISTORICAL BACKGROUND

The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural
Development (CRAFICARD) set up by the RBI under the Chairmanship of Shri B Sivaraman in
its report submitted to Governor, Reserve Bank of India on November 28, 1979 recommended
the establishment of NABARD. The Parliament through the Act 61 of 81, approved its setting up
The Committee after reviewing the arrangements came to the conclusion that a new arrangement
would be necessary at the national level for achieving the desired focuses and thrust towards
integration of credit activities in the context of the strategy for Integrated Rural Development.
Against the backdrop of the massive credit needs of rural development and the need to uplift the
weaker sections in the rural areas within a given time horizon the arrangement called for a
separate institutional set-up. Similarly. The Reserve Bank had onerous responsibilities to
discharge in respect of its many basic functions of central banking in monetary and credit
regulations and was not therefore in a position to devote undivided attention to the operational
details of the emerging complex credit problems. This paved the way for the establishment of
NABARD.
CRAFICARD also found it prudent to integrate short term, medium term and long-term credit
structure for the agriculture sector by establishing a new bank. NABARD is the result of this
recommendation. It was set up with an initial capital of Rs 100 corer, which was enhanced to Rs
2,000 core, fully subscribed by the Government of India and the RBI.

Study on service quality in HDCC bank

2.2 COMPANY PROFILE

The Hassan District Co-operative Central Bank Ltd, Hassan was established in1953 with the
Rs.1.18 lakhs own funds Rs.0.55 lakhs of deposits and totally Rs. 8.53 lakhs as earning
investment. Now it reached Rs.2974.54 lakhs of own funds ,Rs.10522.81 lakhs deposits and
28241.00 lakhs earning investment by this it created a great milestone in co-operative sector by
providing frequent services to the Hassan district farmers.

Historical Achievements
The HDCC Bank is continuously increasing its self-potentiality through this it enlarges all over
the district and rapid increasing in their profit, which helps to farmers economic development.
1. With the co-operation of government it provides loan facilities at 4 % rate of interest to the
farmers for the period of one year.
2. It aims to achieve Rs.15000.00 lakhs loans to the farmers. Now it is the first bank in the
district which facilitates Loans of Rs.11600.00 lakhs to the farmers.
3. Facilitating Accident insurance for all the farmers who are got the agricultural loans from the
bank.
4. Providing the Yashaswini insurance facility to all the co-operative societies members.
5. Awareness programmed for the farmers regarding banking transactions by issuing the Kissan
credit cards.
6. Providing training facilities to the Administrative members of co-operative societies.
7. By establishing 10571 Swa-sahaya sangha in the district, bank contributing towards the
economic development of the agriculturist.
8. Providing more loan facility for the animal husbandry, floriculture and other non-agricultural
activities to the farmers under the Swarna Jayanthi Gram Swarojgar scheme.
9. Providing attractive interest on deposits for the customers and 1% extra for senior citizens.

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ORGANISATION STRUCTURE

BOARD OF DIRECTOR

MANAGING DIRECTOR

DEPUTY MANAGING
DIRECTOR

ADMINISTRATION SECTION

ACCOUNT SECTION

ADMINISTRATION
MANAGER

ACCOUNT MANAGER

CLERK I

CASHIER

CLERK II
TYPIST
ATTENDERS

COMPUTER
OPERATOR

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2.3 Promoter
(Rs. In Lakhs)

Sl.No. Particulars

At
the At
the At
the At
the At
the At
the
end
of end
of end
of end
of end
of end
of
31-331-331-331-331-331-32009
2010
2011
2012
2013
2014

Share Capital

988.48

1004.93

1071.07

1284.32

1607.47

1923.79

Reserves

4747.41

4700.27

5230.67

6138.31

7336.22

7758.1

Own Fund

2609.13

2750.14

3091.18

4197.83

5601.90

6287.61

Deposits

14273.81 18446.49 23646.96 29051.30 39364.03 45077.62

Borrowing
NABARD

Investments

9189.90

Loans issued

23114.40 23019.15 29539.66 40539.15 43079.23 53058.88

Farmer members

48000

Agriculture Loan

13178.94 12426.36 17286.09 22310.14 24328.38 36461.85

Non
Loan

9935.46

Loan Outstanding

27069.86 29822.49 33138.42 39559.47 44768.24 52902.12

Agriculture Loan

16054.96 17207.21 18666.28 22658.80 26102.97 34809.44

Non
Loan

11014.90 12615.28 14472.14 16900.67 18665.27 18092.68

Working Capital

38207.74 38492.61 43197.39 52603.05 67422.08 77981.85

10

% of Loan recovery

81.80%

76.67%

90.49%

95.24%

89.68%

94.29%

11

SHG Formation

11110

11890

12642

13327

13655

13925

from

Agriculture

Agriculture

17146.94 13681.41 12132.89 15813.98 18908.90 22683.33

6572.60

8174.13

10784.17 19557.81 21662.43

54779.00 56108.00 64448.00 81592.00 92417.00

10592.79 12253.57 18229.01 18750.85 16597.03

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12

SHG/SGSY
outstanding

loan

13

JLG
Loan
Groups)

(119

14

1906.82

2226.35

2788.71

3060.91

3741.49

4474.38

243.31

230.73

198.08

Net Profit

145.03

172.02

238.38

313.16

406.22

436.82

15

Audit Classification

16

Gross NPA Amount

1322.07

2978.66

2554.02

1668.49

2165.18

2550.64

17

% of Gross NPA

4.88%

9.99%

7.71%

4.22%

4.84%

4.82%

18

Net NPA

378.07

2126.66

1302.02

277.39

40.52

200.6

19

% of Net NPA

1.45%

7.34%

4.08%

0.73%

0.10%

0.40%

20

CRAR

11.72

10.95

11.41

10.82

11.22

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2.4 Vision Mission and quality policy

Vision
To promote and encourage the growth of self-reliant, autonomous and economically viable
co-operatives though active participation of the members

Mission
Promoting sustainable and equitable agriculture and rural development through effective credit
support, related services, institution building and other innovative initiatives.
In pursuing this mission, NABARD focuses its activities on:
Credit functions, involving preparation of potential-linked credit plans annually for all
districts of the country for identification of credit potential, monitoring the flow of
ground level rural credit, issuing policy and operational guidelines to rural financing
institutions and providing credit facilities to eligible institutions under various
programmers
Development functions, concerning reinforcement of the credit functions and making
credit more productive
Supervisory functions, ensuring the proper functioning of cooperative banks and
regional rural bank.

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2.5 Quality product and service

Kisan Credit
card
Yashaswini
Health
Insurance

Housing Loan
and Salary
Earners Loan

Overdraft loan
to Traders and
other
industrial

Medium Term
Loan
(agriculture)
to formers

Product
and
Services
Vehicle Loan
to farmers at
less interest

Gold Loan
Deposit Loan

Self half Group

and VVV Clubs

Consortia
Loan
Cash Credit
Loan to Cooperative
Societies

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2.6 AREAS OF OPERATION

TALUK BRANCH

VIJAYANAGARA BRANCH

B.M.ROAD

OPP SHANKAR SAW MILL BELUR

ROAD HASSAN

08172-261104
08172-256200
KUVEMPUNAGAR BRANCH

HEMAVATHINAGAR BRANCH

KUVEMPUNAGAR HASSAN

HEMAVATHINAGAR HASSAN

08172-231132

08172- 250056

VIDYA NAGAR BRANCH

CHANNARAYA PATANA BRANCH

BUDDA MARGA

NEAR OLD BUS .ROAD CHANNARAYA

PATANA

8172-252030
08176-252232
CITY BRANCH

LADIES BRANCH

NEAR KATTINAKERE MARKET JANTHA SAHYADRI CIRCLE HASSAN

BAZAR BULDG HASSAN
08172-234588
08172-265128
ARKALGUD BRANCH

BELUR BRANCH

K E B ROAD ARKALGUD

H.D.C.C.BANK

LTD,BELUR

BRNCH,TEMPLE ROAD,BELUR
08175-220238
08177-222236
HALEBEEDU BRANCH

ALUR BRANCH

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HALEBEEDU

BESIDE KSRTC BUS STAND ALUR

08177-273465

08170-218224

HANGRHALLY BRANCH

BANAVARA BRANCH

H N PURA ROAD

BANAVARA

08175-265027

08174-235528

JAVAGAL BRANCH

SHRAVANA BELAGOLA BRANCH

BANAVARA ROAD JAVAGAL

TEMPLE ROAD

08174-271575

08176-257568

ARSIKERE BRANCH

NUGGEHALLY BRANCH

NEAR APMC YARD ARSIKERE

TC ROAD NUGGEHALLY

08174-232205

08176 233397

KONANUR BRANCH

SAKALESHPURA BRANCH

KONANUR

NEAR

OLD

BUS

STAND

SAKALESHPURA
08175-226256
08173-244110
HOLENARASIPURA BRANCH

ADB CHANNARAYAPATNA BRANCH

COURT ROAD

MYSORE ROAD CHANNARAYAPATNA

08175-273264

08176-252049

HIRISEVE BRANCH

SILVER JUBILE BRANCH

TOWN ROAD HIRISEVE

B M ROAD SANTHEPET CIRCLE

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08176-226051

08172-267381

SRINIVASPURA BRANCH

UDYAPURA BRANCH

HDCC BANK SRINIVASPURA

B M ROAD

08176-270246

08176-272010

GANDASI BRANCH
GANDSI HAND POST
08174-220628

2.7 INFRASTRUCTURE FACILITIES

It maintains a very good communication system internally and externally as it is equipped

with telephones, computers, Xerox machines and internet services.

The HDCC Bank has its private transport vehicle for covering the branches of district.

It has well-furnished guest rooms, meeting hall, board hall and training center.

It has 60% to 70% of rented building and remaining its own buildings.

The branches have all essential infrastructure facilities.

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2.8COMPETITORS INFORMATION
The Hassan District Central Co-operative Bank Ltd. is basically a Co-operative Bank catered to
the needs of agriculture, Small Scale Industries (SSI) and Self Help Group (SHGs). Change in
current economic scenario, the organization is facing stiff competition. As far as interest rate
concerns, which are governed by RBI and NABARD, an aggressive approach is adopted by
commercial banks, regional rural banks and co-operative societies. Following are the main
competitors of Hassan District Central Co-operative Bank Ltd...

Commercial Banks like Canara Bank, State Bank of Mysore , State Bank of India etc.,

Regional Rural Banks (RRBs) like Pragmatic Gramin Bank etc.,

Other Co-operative Societies.

2.9 SWOT ANALYSIS

Strength

It has good Brand name as it has crossed 50 years of its existence.

Another important strength of HDCC bank ltd is providing rural finance at an

accelerating speed.

HDCC bank ltd has good infrastructure facilities.

It is supported by Government.

Weakness
Staff recruitment is not done properly at HDCC bank too much political interference.
The process of computerization of HDCC is rather slow.
Though computers have been installed, trained staff is not available lack of skilled
employees.
Lack of professional management.
Lack of initiative and innovation among the staff and members.

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Opportunities
Cooperative banks are pioneers in the field of micro finance it has huge potential in the
rural areas.
Setting up of Cooperative banks by the RBI as recognition of this sector as an important
part of the banking system in 1984.
Growing Indian banking sector especially the rural sector.
More number of branches is being set up as there are number of opportunities.
Threats
Huge competition in the market.
Increasing incidence of frauds and misappropriation.
Tightening of Income Recognition and Asset Classification Norms had a direct bearing on
the balance sheet of the HDCC.
Increasing litigation between management and employees.
External pressure to finance ineligible borrowers.
Loan waiver announcement of government then and there.
Departmental interference in financial matters in various forms.

2.10 FUTURE GROWTH AND PROSPECTS:

The service organization is in the becoming phase and hence bank has entered into agreements
with National Insurance Company, ING Vysya and IFFCO, Delhi for providing insurance
formers and their families. The Bank has plans to increase branches in many rural areas, where
huge opportunity for growth is available. DDCCB also has a future proposal for modernization
of office, internal communication systems and other services strategies through up gradation to
new industry specific technologies. IT infrastructure facilities and initiated steps for further
absorption of technology. Two major technological milestones to be achieved are:

Technological advancement with all branches adopting or about adopt computerization. The
number of branches adopting IT infrastructure solution has been on the rise. From the point

Study on service quality in HDCC bank

of view of financial inclusion, there has been a steady increase in the penetration of branches,
especially in rural areas

Joint Liability Groups

The program for formation of SHGs and merger of banks pioneered by NABARD has been
successful in providing financial services and support from the banking sector to extremely poor
and landless people. Now to help very small farmers, small farmers, tenanted farmers, produce
partners and sleeping partners, those engaged in business outside the agricultural sector,
NABARD has proposed the formation of Joint Liability Groups to develop comprehensive loan
schemes and disburse them.
Bank has implemented this plan by forming Joint Liability Groups and through this scheme
disburses loans for the purpose of animal husbandry.
Already for the period 2011-12, 161 groups have been formed through primary agricultural cooperative societies and among them 112 groups have been provided with loans of Rs. 241.00
lakhs.
For the year 2102-13, 145 groups have been formed and loan of Rs. 123.29 lakhs has been
extended to 79 Joint Liability Groups.
As on year ending 31-3-2013, total of 306 Joint Liability Groups have been formed and 189
groups have been provided with loan of Rs. 364.25 lakhs. As on year ending 31-3-2013, the
outstanding loan amount is Rs. 256.34 and the recovery rate is 100%.
For the year 2013-14, we have set a goal of forming a total of 1000 groups and extending loans
to 500 more groups.

Study on service quality in HDCC bank

(A) Facilities
Any Branch Banking
Any Branch Banking (ABB) is a facility for our customers to operate their account from any of
our networked branches. The branch where the customer maintains his account is the base
branch and the branch from where he carries out his transactions is referred as the remote
branches. Any Branch Banking facility is available in all branches of HDCC Bank.

FACILITIES available under ABB:

Cash Withdrawal.
Cash Deposit.
Fund Transfers.
Purchase of Demand Drafts / Pay Orders.
Deposit of Local Cheques.
Stop Payment facility at Remote Branches.
Repayment to Loan accounts.

Eligible Customers

All adult individual customers and proprietary concerns having an SB, Current account, Corp 4in-1 Current a/c, Overdraft a/c .

Core Banking Solutions

As a part of extension of more and more facilities to our customers, Core banking facility is also
being introduced in our Bank.

ATM Facilities

In Our Bank we introduced ATM Facilities to our Customer.

Lockers
Safe Deposit Lockers are available at all Branches of the bank of various sizes to suit the needs
of different Customers.

Study on service quality in HDCC bank

RTGS - (Real Time Gross Settlement)
RTGS is the fastest possible interbank money transfer facility available through secure banking
channels in India.
NEFT- (National Electronic Fund Transfer)
This system of fund transfer operates on a Deferred Net Settlement basis. NEFT operates in
hourly batches from 9 am to 7 pm on week days and 9 am to 1 pm on Saturdays.

Different kind of loans in our bank

We provide all kind of loans for the common people from automobile loans to home loans...

Interest Rates
SI

TYPES OF LOAN

RATE OF INTEREST

SALARY EARNERS LOAN

14%

PETTY TRADERS LOAN

17%

CONSUMER DURABLE LOAN

17%

GOLD LOAN

12.5%

BUSINESS LOAN

17%

VEHICLE LOAN TWO WHEELERS

13.50%

VEHICLE LOAN FOUR WHEELERS

14%

OVERDRAFT LOAN

17%

CASH CREDIT LOAN

13%

MEDIUM TERM LOAN

13%

10

KISAN CREDIT CARD

UP TO 1 LAKH

0%

1 TO 3 LAKH

1%

ABOVE 3

10.75%

UP TO 5 LAKH

14%

NO

11

HOUSING LOAN

LAKH

LAKH

TO

10 14.25%

Study on service quality in HDCC bank

10 LAKH

TO 20 15%

LAKH
ABOVE 20 LAKH
12

15.50%

COMMERCIAL COMPLEX BUILDING UP TO 10 LAKH

LOAN

10

LAKH

TO

15%
20 15.50%

LAKH
ABOVE 20 LAKH

16%

2.9 Financial Statements

Audited Profit and Loss accounts for the year 2012 13

Expenditure

Rs.

Income

Rs.

Interest on Deposits

209,602,891.50

Interest on loans

430,750,548.30

Interest on Borrowings

98,519,622.00

Interest on Investments

124,003,565.05

Staff Salaries

86,188,435.17

Bank
commission
Misc.Income

Administrative
expenditure

24,718,796.80

Provisions

97,000,000.00

Depreciation

11,933,641.26

Total

527,963,386.73

Net Profit Before Tax

65,478,766.88

Provisions on
Income Tax

& 38,688,039.95

Advance 22,000,000.00

Deferred Tax Liability

2,696,250.00

Advance Income Tax Paid 160,310.00

Net Profit After Tax

40,622,206.57

Total

593,442,153.30

Total

593,442,153.30

Study on service quality in HDCC bank

Study on service quality in HDCC bank

Audited Balance sheet as on 31 03 2013
Liabilities

As on 31 As on 31-03- Assets
03 2012
2013

Government
share

As on 31 As on 31-0303 2012
2013

Cash Balance

58927300.00 54001988.00

Coop. Share

128431871.0 160,746,960.0
0
0

Bank balance

149876422.3 226853068.29
0

Reserves

216083424.1 245,502,916.0
7
5

Share
investments

75190000.00 88,990,000.00

Provisions

394947107.2 485,317,911.2
4
4

SLR
Investments

730825392.6 1,022,000,000.
4
00

S
A
O 1376654000. 1,511,012,000. Non-SLR
Borrowings
00
00
investments

272402043.0 844,790,528.0
0
0

MT
Sch. 204744460.0 379,877,500.0
Borrowings
0
0

Agriculture
loans

2271482710. 2,615,898,783.
07
07

2905130240. 3,936,403,396. Non47

63
Agriculture
loans

1681738653. 1,854,177,309.
87
32

Deposits

Branch
Adj. 14536990.55 39,214,780.69
Cr. Balance

Cash
loans

DD Payable

11920749.90 5,794,486.00

Discounting of 199848.00
bills/cheques

2,744,222.00

Other
liabilities

93126095.70 77,949,960.46

DD
Recoverable

2517887.00

2,864,870.00

Audit
Objection

2800929.00

2,800,929.00

Fixed assets

102047532.2 101,018,783.0
6
0

Misappropriati 4048942.00
on Belur

4,048,942.00

Other Assets

29157025.76 65,099,253.95

Hassan Tq Br 373835.00
Mis-app
&
Recoveries
2007 08

373,835.00

Audit
objection

2800929.00

2,800,929.00

Misappropriati 4048942.00
on Belur Br
as
per
68

4,048,942.00

Net Profit

31315640.88 40,622,206.57

credit 2525765.01

4,003,312.01

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Order
Hsn Tq Br Mis 373835.00

app
&
Recoveries 07

08
Recoverable
Total

5384114285. 6,889,665,823. Total

91
64

Contingent
Liabilities

598036.00

600556.00

373,835.00

5384114285. 6,889,665,823.
91
64