A Summer Internship Project Report

On
“A Study on debit card facility provided by VMCBL”
At
The Veraval Mercantile Co-Operative Bank
Submitted to

Institute Code: 817

Narandas Jethalal Sonecha Management and Technical Institute
Under the Guidance of
Miss.Shital Vadhavi
(Assistant Professor)
In partial fulfilment of the Requirement of the award of the degree of
Master of Business Administration (MBA)
Offered By
Gujarat Technological University
Ahmedabad

Prepared by:
Gohel Sagar Nileshbhai
208170592028
MBA (Semester-III)
August 2021

1
 Declaration

I hereby declare that the Summer Internship Project Report titled “A Study on
Debit card facility provided by The Veraval Mercantile Co-Operative Bank” is a
result of my own work and my indebtedness to other work publication, references, if
any, have been duly acknowledged. If I am found guilty of copying from any other
report or published information and showing as my original work, or extending
plagiarism limit, I understand that I shall be liable and punishable by the university,
which may include ‘Fail’ in examination or any other punishment that university may
decide.

Enrollment no. Name Signature

208170592028 Sagar.N.gohel

Place: Date:

2
s

Examiner Certificate
This is to certify that project work embodied in this report entitled “A study on debit
card facility provided by VMCBL” was carried out by Sagar.N.gohel
(208170592028) of Narandas Jethalal Sonecha Management & Technical
Institute (Code: 817)
The report is approved / not approved.
Comments of External Examiner:

This report is for the partial fulfillment of the requirement of the award of the degree
of Master
of Business Administration offered by Gujarat Technological University.

(Examiner’s Sign)
Name of Examiner:
Institute Name: NJSMTI
Institute Code: 817
Date:
Place:

3
Plagiarism Report

4
 Preface

Knowledge & Practice go hand in hand. Practical knowledge is the most important
part in the management study.

Being a student of MBA, I am honored of having my practical training at Veraval

mercantile co-operative bank located in Veraval on our specialization subject i.e.,
Financial Management on research title “A Study on debit card facility provided by
The Veraval Mercantile Co-Operative Bank”.

I have conveyed my experience in simple word and I hope it’s worth reading.

All feedback is amiable invited.

5
 Acknowledgement

Writing research is not possible by one person. It needs co-operation and efforts of
people who are involved in it at every stage. I am thankful to every person for helping
me so much in my summer internship project.

Firstly, I would like to thank almighty God and my parents for supporting me in every
way.

I am thankful to the whole staff of The Veraval Mercantile Co-Operative Bank Ltd.
for providing guidance and training to me.

I am very much thankful to our institute guide Miss. Shital Vadhavi and Mr. Pradip
Mehta for their guidance and support.

6
 Executive Summary

The role of banking industry is expanding & is becoming part for the growth of the
country. Everyday banking sectors are providing many financial products. In which
some are old & some are new from Indian context. However, some products have
presence in the country since long, like Saving A/c, Current A/c, Fixed Deposit, Loan
& advances etc. But in the age of globalization with free entry of lots of private sector
this products needs some modifications.

This research investigates the relationships of discerned usefulness, attitude of

customer, customer satisfaction and customer adaptation of banking in the context of
VMCBL. This report is prepared by information taken from annual reports, websites,
help from officials and personal experience.

Firstly, I have given introduction about the industry profile of banking sector and co-
operative banks.

After then I have given introduction of Veraval Mercantile Co-operative Bank Ltd.,
its profile, functions, facilities and other information about the bank.

Then I have given introduction of my topic and introduction of the study. I have
described about the Sources of data, Collection of data, Hypothesis Formulation,
Findings, Suggestions and Conclusion and Limitations of the report.

7
 Index

Sr No. Particulars Page No.

1 Industry Profile 10
1.1 Introduction 11
1.2 Functions 12
1.3 Structure 13
2 Co-operative Banks 14
2.1 Introduction to Co-operative banks 15
3 About Veraval Mercantile Co-operative Bank Ltd 17
(VMCBL)
3.1 History of VMCBL 18
3.2 Development at Glance 19
3.3 Glimpse of Progress 20
3.4 Branches 21
3.5 Board of directors 23
3.6 Special Characteristics 25
3.7 Mission, Vision & Objectives 26
3.8 Products & services provided by VMCBL 27
3.9 Functional Departments 31
3.10 SWOT Analysis 36
4 About Deposits 37
4.1 Introduction to Deposits 38
4.2 Overview Of Deposits 39
4.3 Types of Deposits 40
5 Introduction of the study 44
5.1 Background of the study 45
5.2 Literature Review 46
5.3 Statement of problem 50

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 5.4 Objectives of the Study 51
6 Research Methodology 52
6.1 Introduction 53
6.2 Sources of Data Collection 54
6.3 Tools & Techniques 56
6.4 Research Plan 56
6.5 Analysis of Data & Interpretation 57
6.6 Hypothesis Formulation 63
7 Findings 66
8 Suggestions 67
9 Conclusion 68
10 Limitations of the study 69
11 Bibliography 70
12 Annexure 71

9
Industry
Profile

10
 Introduction

Banking in India has started in the 18th century. General Bank and Bank of Hindustan
was the first bank started in 1786. But now, both are not in existence. Bank of Bengal,
Bank of Bombay and Bank of Madras were established during British East India
Company. They merged in 1925 to form Imperial Bank of India. After independence,
it becomes State Bank of India.

Indian Banking plays a key role in the development of the economy. Reserve Bank of
India i.e., Central Bank of India established in 1935. The Reserve Bank of India has
provided guidelines and every bank in India have to work accordingly.

Currently banking industry in India worth Rs. 81 trillion (US $ 1.31 trillion) and today
banks use internet and mobile devices to carry out transactions. The banks in India are
focusing towards the development of rural area as well for balancing the overall
development of India.

Market Size

Banking sector in India consists of:-

 Public sector Banks: 26

 Private sector Banks: 25
 Foreign Banks: 43
 Regional Rural Banks: 56
 Urban Co-Operative Banks: 1589
 Rural Co-Operative Banks: 93550

In India 80% banks are public sector banks.

11
 Primary Functions of a Bank

Earlier functions of bank were to accept deposit and lending loans & advances. But
now with the development of the country and because of globalization there are
additional functions of banks other than above two.

They are as follows:

 To provide locker facility.

 To collect cheques, drafts on behalf of the customer.

 To provide overdrafts facility.

 To provide Automated Teller Machine (ATM), credit cards facility.

 To provide online banking and mobile banking services.

 To provide demat account.

12
 Structure of Banking

RBI

NON-
SCHEDULED
SCHEDULE
BANKS
BANKS

COMMEECIAL CO-OPERATIVE
BANKS BANKS

PUBLIC PRIVATE
FOREIGN REGIONAL
SECTOR SECTOR
BANKS RURAL BANKS
BANKS BANKS

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Co-operative Banks

14
 Introduction of Co-operative Bank

A co-operative is an autonomous association of persons united voluntarily to meet

their common economic, social and cultural needs aspirations through a jointly-owned
and democratically controlled enterprise.

Co-operation means co-ordination in work for the fulfillment of objectives. It is the

process of working together for common or mutual benefit.

Co-operative Bank is an institution established on co-operative basis and deals with

common banking business. Like other banks, the co-operative banks are founded by
collecting funds through shares, accept deposits and grant loans & advances.

India is an agricultural based country. In India co-operative banks has a history of

almost 100 years. In India it was started for dealing with problem of rural credit. The
history of Indian co-operative banking started with the passing of co-operative
societies Act 1904.

Co-operative banks play a vital role in the protection farmer’s interest. Co-operative
movement emerged in west, but importance of such have assumed in India.

Even today co-operative bank is playing a vital role in rural financing. Due to increase
in primary co-operative banks their business in the urban areas also has increased in
recent years.

15
In rural areas, co-operative banks finance agricultural based activities which include
farming, milk, cattle, small scale industries etc. In urban areas they finance various
divisions of people for self employment, home finance, personal finance, industries
etc.

Co-operative banks are small sized units operates in urban and non-urban areas.

Definition of Co-operative banks:

“Co-operative bank is the form of organization in which persons voluntarily associate

together as human beings on the basis of equality for the promotion of the economic
interest of themselves.”

- Sir Horas Planket.

16
About Veraval Mercantile
Co-operative Bank Ltd.
(VMCBL)

17
 Veraval Mercantile Co-operative Bank (VMCBL)

History

The Veraval Co-operative Mercantile Bank Ltd. was established in 1972. Today it is
the one of the leading co-operative banks in saurashrta region for its quality services.

The bank has carved a position in the urban banking sector with its rich heritage,
technology, integrity, loyalty to the prudent banking practices, savvy customer
services.

The Veraval Mercantile Co-operative Bank has attained a multifarious growth not
only in financial standard but also in overall expansion of activities.

By providing class and mass services to the urban and semi-urban areas The Veraval
Mercantile Co-operative Bank has proved itself a pioneer in the Co-operative service
sector.

Achievements

VMBCL has got “BANCO BLUE RIBBON AWARD”

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 Development at Glance

 No. and Date of Registration:

No. 8225,

Date: 23/11/1971

 Date of Commencement:

Date: 2/3/1972

 Establisher:

Ramanbhai Ashra

 Reserve Bank of India License No. and Date:

No. GJ.670p

 C.A. of the Bank:

Sanjay M. Thandeshwar & Vaibhavi V. Nirmal

 Area of operation:

Within the radius of 30 k.m. surroundings urban and semi-urban area of

junagadh, porbandar and Rajkot district.

 Grade as per RBI Norms:

1(one)

 Audit Class:

“A”

 Staff Strength:

100

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 Glimpse of Progress

Particulars 31-3-2018 31-3-2019 Inc in “%”

in lakhs in lakhs
Authorized share 1250 1750 -
capital
Paid up share 1244.40 1412.79 13.53%
capital
Statutory & other 4776.97 5303.76 11.03%
reserves
Net worth 4061.86 4481.72 10.34%
Deposits 44335 50626.48 14.19%
Advances 25279.54 29145.09 15.29%
Working Capital 52647.46 60230.12 14.40%
Liability 1267.40 1482.21 16.95%
Audit Class “A” “A” -
CRAR 15.05% 15.18% 0.86%
Shareholders 24332 24781 1.86%
Total Staff 100 100 -

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 Branches

No. Branch Name Address and Opening Date

1 Administrative Office ‘Suvas’, 1st floor, Junagadh Road, Veraval.
2 Main Branch ‘Suvidha’, Subhash Road, Veraval
OD: 02-03-1972
3 Rayon Branch ‘Suvas’, Junagadh Road,Veraval
OD: 27-09-1984
4 Una Branch ‘Suvidha’, opp K.V. school, Una.
OD: 16-01-1984
5 Sutrapada Branch ‘Suvas’, Near Bus-Stand, Sutrapada.
OD: 14-12-1988
6 Junagadh Branch ‘Suvidha’, Maharshi Arvind Marg,
Junagadh.
OD: 23-01-1995
7 Rajkot Branch Foresight Building, 1st Floor, Akshar Marg
Near Kalawad Road, Rajkot.
OD: 15-08-1996
8 Keshod Branch ‘Suvidha’, Jalaram Mandir Road, Keshod.
OD: 30-08-1996
9 Manavadar Branch ‘Suvidha’, 1st Floor, Near Girls school,
Manavadar.
OD: 04-09-1996
10 Bedi Branch Bank Unit, Office No. 6, Shri Sardar
Vallabh Bhai Patel Marketing yard, Morbi
Road, Bedi.
OD: 03-10-2016
11 Zanzarda Branch Shrinand Apartment, Ground Floor, Near
Bharat Petroleum, Zanzarda Road,
Junagadh.
OD: 11-12-2016

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12 Dared Branch Silver Point, Shop No 29-30, Pramukh
Swami Circle, GIDC Phase-3, Dared.
Jamnagar.
OD: 18-03-2018

22
 Board of Directors

A Board meeting is conducted every month for effective control over bank. The board
works in a cohesive manner for smooth and efficient management of the affairs of the
bank. There are different sub committees to look after the working of the bank.

List of Board of Directors of Veraval Mercantile Co-operative Bank

Chairman Shri Navinbhai H. Shah

Managing Director
Joint Managing Director
Director
Director (Rajkot and Manavadar)
Director (Junagadh and Keshod)
Director (Una and Sutrapada)
Shri Dr. kumuchandra A. Fichadia
Shrimati Bhavanaben A. Shah
Shri Pradipkumar P. Shah
Shri Jitendrakumar A. Hemani
Shri Ashokbhai D. Madia
Shri Prakashchandra V. Parekh
Shri Manishbhai P. Shah
Shri Karsanbhai J. Solanki
Shri Ketan L. Chandrani
Shri Jitendrakumar M. Parekh
Shri Pardipbhai D. Madia
Dr. Jatin M. Shah
Dr. Kumudben R. Mehta
Shri Arjanbhai D. Chavda
Dr. Sumtilal T. Hemani
Dr. Mukeshkumar D. Thhumar
Shri Yusufbhai I. vahanvati

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Professional Director Shri Mahendra A. Shah
Miss. Manali J. Kamdar
General Manager Shri Atul D. Shah

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 Special Characteristics

 Even after adopting 90 days norms NET NPA of bank is “0%”.

 Profitability and Strong Brand Equity.

 Successful leadership with strict monitoring and control.

 Fully computerized bank.

 In all branches Locker Facility is available at minimum rent.

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 Mission, Vision & Objectives of VMCBL

Mission

Mission of Veraval Mercantile Co-operative Bank Ltd. is to provide supreme

service and relentless development in banking. To remain healthy and
gainfully profitable bank. And also VMCBL wants to promote banking habits
among the weaker sections of the society residing in urban and semi-urban
areas.

Vision

Veraval Mercantile Co-operative Bank wants to play a vital role in country’s

development. VMCBL also wants to become a leading bank. And to make
available special made services.

Objectives

Every year VMCBL wants to achieve positive economic value added and
wants to become a market leader.

Main objective of VMCBL is to become one of the top 5 financial institutions

in terms of market share in all significant market segments it serves.

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 Products & Services provided by VMCBL

Facilities provided by veraval mercantile bank ltd are listed below:

 Saving Deposit:

“Saving deposit” means a form of interest bearing demand deposit which is a deposit
account whether designated as “Saving Account”. This account is opened with
minimum amount decided by bank. Such account is subject to the restrictions as the
number of withdrawals as also the amounts of withdrawals permitted by the bank
during any specified period.

 Current Account:

Current account is for traders. “Current Account” means a form of non-interest

bearing demand deposit wherefrom withdrawals are allowed any number of times
depending upon the balance in the account or up to a particular agreed amount and
shall also be deemed to include other deposit accounts which are neither Saving
Deposit nor Term Deposit.

 Fixed Deposit:

Fixed Deposit is offered by bank where an investor will earn higher rate of interest
than savings account. A lump sum amount of money is deposited for a specified
period of time, which varies from bank to bank. Once the money is invested in FD
one cannot withdraw it before maturity. But he/she may withdraw it after paying
penalty.

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  Cash Credit:

Cash Credit means cash on credit taken by a particular person firm. Bank allows their
customers to take loan or withdrawal money up to a certain extent from their current
bank account. The interest is charged on running balance. It is generally taken for
fulfilling working capital requirement of the person.

 Demand Draft:

Demand Draft is compared with cheques. Demand Draft can be payable to the
specified party. But cheques can be payable to the bearer also. Demand Draft is a
transfer payment from one bank to another.

 Locker System:

Locker is a small sized storage system equipped with locks. Locker system is one
kind of security which is provided by VMCBL. Locker is used to keep valuable things
like jewelry, gold and important papers. VMCBL charges nominal rent for lockers
from customers.

 Rebate Facility:

In general Rebate means return of a part of a purchase price by a seller to a buyer on

purchase of a specified quantity within a specified time. Rebate is not like a discount.
Discount is the amount which is deducted in advance of payment. Rebate or return is
given after the payment of full invoice amount.

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VMCBL provides this facility to the customers. Suppose if the customers pay each
installments in time than some rebate is provided to them by bank.

 ATM:

ATM stands for Automated Teller Machine. ATM is an electronic device that allows
customers to perform financial transactions. Such financial transactions includes cash
deposit, cash withdrawals, mini statement of balance in account can be obtained. All
this transactions are done without the help for direct interaction with bank staff.

 Loan Facility:

A Loan is a facility which allows a person or firm to borrow money up to a particular

amount if and when needed. Loans are of two type Long term loan and Short term
loan. The Short term loan is for a period of less than one year and Long term loan is
for a period of more than one year. Bank charges some interest on loan which
customer has to pay.

 IMPS:

IMPS stands for Immediate Payments Service. It is a real time; inter banking
electronic money transfer system. Transfer of funds can be done alone by mobile
banking and internet banking. An IMPS is available throughout the year including
bank holidays.

 RTGS:

RTGS stands for Real Time Gross Settlement. RTGS is transfer of money from one
bank to another. Here bundling is not done. Real Time means transaction is settled as

29
soon as they are processed without waiting period. Gross Settlement means
transaction is done one-to-one basis. RTGS is not possible on holidays. Minimum
amount required is Rs. 2 lakhs & above.

 NEFT:

NEFT stands for National Electronic Fund Transfer. It is an electronic payment

system to transfer funds from one account to another between NEFT participant bank
branches in India. Here settlements are done in batches. NEFT is done for the amount
less than Rs. 2 lakhs. NEFT is not possible on holidays.

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 Functional Departments in VMCBL

Departments are the bodies of organizations which are formed to organize people,
relationships, work and reporting in such a way that helps to achieve the organizations
goals. Like every company have different departments that works to achieve company
goals, banks also have departments that best supports for the accomplishments of the
banks goals.

Veraval Mercantile Co-operative Bank has various departments which are classified
on the basis of the functions what they are performing. In VMCBL departments are
classified at two levels. They are Branch Level and Administrative Level.
Departments of VMCBL are listed below:

At Branch Level:

 Cashier Department
 Loan Department
 Clearing Department
 Locker Department
 Fixed Deposit Department

At Administrative Level:

 Human Resource Department (HR)

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  Management Information System Department (MIS)
 Marketing Department

 Branch Level

Cashier Department:

Cashier Department is the most important department of the bank, because it has
direct interaction with customer. Cash department does transactions like receiving and
payment of cash. Their duties also include handling cash inquiries made by customers
and make the customer experience satisfactory. Their duties include accepting credit
slips, cheques and ensuring balance in all transactions at the end of the working
period.

Loan Department:

Loan Department is one of the functions in banks. In a loan process, the important job
of the banker is the selection of the borrower. Loan Department has to maintain credit
risk, credit exposure of the bank, conformity of central bank ltd., recovery and
collecting dues of loan & advances. Activities performed by them are maintaining and
managing the financial books of the bank, checking all the entries of the book
accordingly to standards etc.

Clearing Department:

Clearing department does the activity of clearing cheques. Clearing of cheques is the
process of cheque deposited by customer in bank and the processing department
clears the cheques. It is the movement of cash from the bank in which it us drawn to
the bank in which it was deposited. It is accompanied by the movement of the cheque

32
to the paying bank, either in the physical paper form or digitally under a cheque
truncation system. It is called clearing cycle.Cheque would be returned, when cheque
is arrived at the issuing bank and that account does not have enough funds. Such
returning of cheques is also known as dishonored cheque.

Locker Department:

A locker is a small sized storage system equipped with a lock. A bank locker is used
to keep valuables like important documents, gold etc. It can be hired by companies,
individuals, trusts etc. Bank has to carry out KYC checking after identifying risk
associated with the hirer. Before providing locker facilities to any customer, bank has
to collect necessary documents that are required to hire a locker. An agreement is
made between bank and customer, which customer has to agree and sign it.

Fixed Deposit Department:

FD is one kind of investment product which allows the investors to invest a lump sum
amount for a fixed period of time & at a fixed interest rate. Amount is deposited for as
a short period as 7 days to 10 years. Interest rate differs in different banks or financial
institution. The FD department of a bank applies interest rate from the date of receipt
of funds by bank and is fixed for the specified duration. FD account holder will be
liable for TDS, if the aggregate interest income from FD is greater than 10,000.

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  Administrative Level

Human Resource Department (HR):

HRM means to manage people in your organization. VMCBL used it to enhanced

employee capabilities. As banking is a sector which always is a people business. It
requires effective & efficient to be successful. HR Department in VMCBL has the
duty to find and recruit right people for the right job in the banks.

The main challenge that is faced by any banks is to handle different risk and
managing people in banks.

People who are going to deal with customers are the face of the bank and HR
Department has to make sure that they have such working capabilities. They have to
provide training before assign them to work, so fresher are aware of the degree of core
banking industry and customer relationship.

Marketing Department:

Marketing plays a very important role in promoting business and mission of the
organization.

Marketing means efforts to make people aware about your products and let them
believe by doing so, their needs will be satisfied at its best. Customers now a days are
becoming quality conscious of service served to them.

Marketing of banking sector is the aggregate of functions, directed at providing

services to satisfy customer financial needs and wants, more effectively than the
competitors keeping in view the organizational objectives of the bank.

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Marketing is done for the products of an organization. Banks also have products like
current a/c, saving a/c, demand draft, cash credit, locker system, charges and
commission on certain service, rebate facility, ATM facility etc.

Above mentioned products or any new products introduced by banks are needed to be
brought to the awareness to customer and this is done by marketing department.

Management Information System Department (MIS):

A Management Information System is an information system used for the

coordination, analysis, control and visualization of information in an organization.
MIS is used for decision making by gathering and producing reliable and relevant
data.

A bank is a place which offers the financial services like savings/checkings and
providing credit to the customers.

Following reports are given by MIS Department to the management:

 The account which is going below the minimum balance required.

 The account which is having balance of more than Rs. 50,000.
 The non-moving account.
 An unusual rise and fall in the account movement.
 If there is a default in loan repayment.

A customer is warned to correct the situation based on the above reports.

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 SWOT Analysis

Strength
Good prestige.
Business among members.
Trust within members.
Customer preference towards bank.
Affordable interest rate.
Good working staff.
Efficient management.
Weakness
Lack of professionalism.
Credit card facility is not available.
Net banking facility is not there.
Small area of operation.

Opportunities Threats
Trust of society. Competition.
Large untapped area of expansion. Customers changing behavior.
Staff education. Small network for operation.
RBI policies. Changes in technology.

36
 About
Deposits

37
 Introduction to Deposits

Deposit is a financial word, which has many meaning. On one side, it is a deal
involving transfer of money between parties of safety or preservation. On another
side, it also refers to a part of money used as surety/assurance for delivery of goods.

One of the main characteristics of banks is the deposit collection. In simple word
deposit is a collection excess from savers. By depositing money in banks people will
have lots of advantages like, they will earn interest on deposit, useful eventuality, and
risk of theft is avoided.

Deposits are the main source of capital for lending activities of the banks.

Definition of Deposit:

“A deposit is an act or step of putting or placing cash within some organization, most
commonly with financial institution like bank.”

Bank deposits involve money placed into banks for safety. Deposits are made of
deposits account. This deposit account consists of saving account, current account or
any other kind of bank account.

Deposit account allows the account holder to deposit and withdraw their money.
Interest is paid on the money deposited to the customer. Interest given on deposit
varies from bank to bank. All this is recorded in bank’s books and shows the amount
owed by bank to the customer.

38
 Overview of Deposit

VMCBL offers different types of deposits. Deposit offered by VMCBL is different

from each other. Following chart shows the different types of deposits offered by
VMCBL:

Deposits

Current Recurring Re-investment

Saving Deposit Fixed Deposit
Deposit Deposit Deposit

39
 Types of Deposit

Deposits are mainly divided into two types; they are Time Deposit and Demand
Deposit.

Time Deposit:-

When money is deposited with “tenure” and it cannot be withdrawn before the
maturity period are called Time Deposit or Term Deposit. This deposit includes the
following:

 Fixed Deposit
 Reinvestment Deposit
 Recurring Deposit

Demand Deposit:-

When money is deposited in bank and is withdrawn at any time by the customer
without giving any prior notice is called Demand Deposit. This deposit includes the
following:

 Saving Deposit
 Current Deposit

40
 Fixed Deposit:

Fixed Deposit is a kind of term/time deposits. Here you are not required to
open a separate account. It is a tool provided by bank and the interest given on
fixed deposit is higher than regular saving account. Rate of interest on fixed
deposit changes from bank to bank.

The amount deposited in fixed deposit cannot be withdrawn before the

maturity. If the customer wants to withdraw money from such deposit account
before its maturity, they have to pay penalty for it.

 Reinvestment Deposit:

Reinvestment Deposit allows you to reinvest the interest earned on deposit. In

Reinvestment Deposit interest is paid out only at the time of maturity.

In Reinvestment Deposit regular interest is cumulate to the principal amount

and compound interest calculate and paid to the depositor at the time of
maturity.

This deposit gives you a two-fold income. Interest is paid on your deposited
money plus on the interest depositor earn. Senior citizen will get additional
benefit of 0.50% in interest on reinvestment deposit.

41
 Recurring Deposit:

Recurring Deposit is one type of term deposit offered by banks People having
regular income can deposit a fixed amount every month in recurring deposit
account. Depositor earns interest on this deposit. Recurring Deposit matures in
future at a specified date with all deposits made every month.

The maturity period of recurring deposit normally ranges from 6 months to

120 months.

Senior citizen gets an additional benefit of 0.50% interest hike on the recurring
deposit.

 Saving Deposit:

Saving Deposit means a form of interest bearing demand deposit which is a

deposit account subject to the restrictions as to the number of withdrawals as
also the amounts of withdrawals permitted by the bank during any specified
period.

The aim of saving deposit is to encourage common people to have the habit of
saving. The customer who does not want to withdraw frequently or who does
not want to keep their deposit for longer time, for them saving account/ saving
deposit is suitable.

Interest on saving deposit is normally less than other fixed deposit or long
term deposit account.

42
 Current Deposit Account:

Current account means a form of non-interest bearing demand deposit

wherefrom withdrawals are allowed any number of times depending upon the
balance in the account or up to a particular agreed amount.

Current account is generally for businessman, traders etc. who do large

transactions on a regular basis. This account allows the account holder to do
unlimited transactions depending upon the balance maintained in the account.
No interest is paid on current account.

In current account there is no restriction over number of withdrawals for

customers. Account holders can withdraw their money from such account
without making any prior notice.

As withdrawals are made by customers according to their wish, banks have to

make them self ready to pay the depositors. Banks have to maintain cash
balance in hand to meet the customer demand and if fails to maintain the
reputation of bank may fall.

43
Introduction
of the study

44
Background of the study

The report is divided into several parts. At first introduction of the industry profile
that includes history, functions and structure of banking has been given.

In next part introduction of co-operative banks is given. Following part is dedicated to

describe VMCBL History, Development, Branches, Products & services, Functional
departments etc.

After than Deposit portfolio of VMCBL has been given. Literature review, Statement
of problem, learning objectives etc has been done.

Following part contains information about the research method that has been used,
Research design, Collection & Analysis of Data, Hypothesis Development, Results
interpretation, Limitations, Findings & Suggestion.

45
 Literature Review

Jyothi H.M. (2018) had done “Comparative study on mutual funds & fixed
deposits. She had studied the preference for mutual funds are comparatively more
than fixed deposit. She found that mutual funds are very much inflation adjustable
returns compare to FDs. In terms of liquidity both are almost same. After
demonetization interest rate on FDs was reduced, mutual funds were best option
left with investors. She found that mutual finds perform well than FD but
awareness is needed to create among investors.

M. Rajeswari (2017) studied the “Customer preferences of recurring deposit in

post offices over banks”. She has used Annova & Karl Pearson method to test the
impact of having recurring deposit in banks and post office. She found many
reason for customer preferences of recurring deposit in post office over banks. She
had tested the impact of the satisfaction and rate of interest in post office and
found out that there is a significant relationship between them. There were certain
drawbacks in post office for which she had also given suggestion for it.

V. K. Selvi & J. V. Priyan (2017) had analyzed “Perception of customers towards

service quality of canara bank towards deposit schemes. Annova and percentage
analysis is used. Data had been collected through convenient sampling method.
Different factors that influence the preference for various deposits were
considered, like gender, occupation, age, marital status, income, educational
qualification. Among them they found that age, marital status and income
influences the preference for various deposit schemes. Banks are important
organizations that provide various financial services to its customer. Recognizing
the importance of it in banks, suggestions are made by various committees to
improve the service quality of banks. Canara bank is evaluated positively by
respondents, but still continuous improvements are suggested to maintain a
competitive edge.

46
Tanvi Singhal (2015) had studied “Factors influencing switching behavior of fixed
deposits investors of Indian banking” Data analysis tools used by her were paired
comparison matrix and chi square test. She had considered various factors like
interest rate, advertisement, reputation, service quality, bank preference, switching
cost etc. that influence the behavior of the customer. She had emphasized on the
fixed deposit investors and the various factors influencing them to switch from it.
She concluded that by studying the switching behavior of investors it will be
helpful to service sector specially banking to attract new customer from
competitors.

Narayana Maharana, Suman Chaudhary & Ashok kumar panigrahi (2015) studied
“Deposit mobilization of commercial banks.” They had evaluated the trend &
growth in deposit mobilization of scheduled commercial bank in bhubaneshwar of
last five years. They used questionnaire method to present different factors
responsible for deposit mobilization of BOB & Axis Bank in bhubaneshwar city.
They found a significant increase in current deposit & term deposit over the
period under study the mobilization of demand. In their studies they found that
BOB has performed well. They suggested that staff in banks needs to be given
proper training before assigning them to work; depositor meeting is needed to be
organized once in a year to solve their problem.

Marimuthu Selvakumar (2014) had “Analyzed deposits & advances of selected

private sector commercial banks by using kruskal-wallis test. He had tested
demand, saving, term, total deposits, priority advances, non-priority advances and
total advances of various TNB Pvt. Sector banks. He found that there is no
significance difference among the deposits in private sector banks of Tamil nadu.
The resilience of banking sector was marked by improvement in capital base,
asset quality and profitability. Even though public banks have maximum sharecin
banking industry, Private sector bank is playing a vital role in the economic
development of India, particularly Tamil Nadu.

47
Akinyomi Oladele John (2014) in his article studied “Effect of deposit volume on
lending behavior in the Nigerian post consolidation banking era”. For this he had
gone through annual reports of 22 banks. He had conducted analysis using
regression analysis. The results revealed that there is a positive and significant
relationship between deposit volume and loan & advances. In his studies there
were other factors that influence the lending behavior of deposit money banks like
capitalization, interest rates, gross domestic product and liquidity ratio therefore it
was recommended that for future studies to examine the effect of these factors on
lending behavior of banks.

Paul Ojeaga, Daniel Ojeaga and Deboraho Odejimi (2013) studied “The impact of
interest rate on bank deposits” evidenced from the Nigerian banking sector. There
were factors that influence customer behavior in bank deposit like average
income, commercial lending, legal rights strength, central bank monetary policy
and total annual commercial bank losses. They had used quartile regression
estimation method, non-parametric estimation process. They found that interest
rates were affecting deposit in positive manner results in increase in banking
deposits. While income had also affected bank deposits in general. The oversight
functions were having weak effect on bank deposits. They had given opinion that
customer confidence can be boosted up by encouraging transparency in the
management of the Nigeria commercial bank.

Anu Joseph (2011) studied “The deposit schemes in Karnataka bank” He found
that deposits had been increasing every year. The tools used for studies were
percentage analysis and ratio analysis to measure the number of deposits increased
or decreased. In his studies he had used percentage analysis tool to identify the
increase in demand, saving and term deposit. He came out with the suggestion that
there was a good relationship between deposits & advances. In his studies he
found that the deposit schemes were showing an unconstructive sign, so the banks
keep in control for the future period.

48
Sumaiya Nazim (2011) studied “Deposit Analysis of National Bank Ltd.” The tool to
analyze used by her is Trend Analysis. She had studied relationship between deposit
and operating profit. The deposits in bank had increased & the reason was to reduce
Govt. securities and bond. She found that bank lacks manpower & proper training is
required to give to its employees. She had suggested that bank needs to introduce new
investment schemes to stay in competition and satisfy customer needs.

Surender Singh (2009) had analyzed “HDFC fixed deposit”. He had studied many
reasons for choosing fixed deposit in HDFC bank like safety of funds, liquidity,
services, additional benefit and market reputation. To get unbiased result he had
excluded the interest rate. He had used questionnaire method. He concluded that the
main reason people depositing money in FD is safety. He also had given opinion that
HDFC bank needs to increase advertisement for deposits offered by it for public
awareness.

Nidhi Ramesh (2005) studied “Bank Deposit & Mobilization reference to

Nationalized Bank” Tools used were percentage analysis. As per her analysis bank
should offer more schemes to attract customers. She found that because banks are
offering lower rate of interest, peoples are investing in stock exchanges & other
investments with higher return. She also suggested that emphasize should be made on
the services provided by the bank staff.

49
 Title of the problem to be studied

A research problem, in general, refers to some difficulty which a researcher

experiences in the context of both a theoretical or practical situation and

wants to obtain a solution for the same.

“Customer satisfaction to deposit their money in VMCBL”

As we know that deposits are the main source of capital for lending activities of the
banks. I want to check the customer satisfaction level towards the deposit offered by
VMCBL. Reason behind to choose VMCBL is that it is one of the creditable banks in
veraval.

50
 Objective of the study

Being a student it is essential to undergo some practical report like this one. It is for
the purpose of having flavor of professional atmosphere and make rectification, as
required.

General objective of the report is to examine overall deposit management system of

VMCBL.

To get an idea about management policies of VMCBL & commercial banks.

Learning Objectives

To study various deposit schemes of VMCBL.

To know the customer satisfaction towards depositing their money in VMCBL.

To know the marketing policy of VMCBL.

To check the service efficiency of VMCBL.

To know the profitability of VMCBL.

51
 Research
Methodology

52
 Research Methodology

Introduction

Research in common parlance refers to a search for knowledge. One can also
define research as a scientific and systematic search for pertinent information
on a specific topic. In fact, research is an art of scientific investigation.

Definition

A research is defined as a systematic investigation into and study of sources

and material in order to establish facts and reach new conclusion.

Redman and Mory define research as a “systematized effort to gain new

knowledge.”

53
 Sources of Data Collection

I have taken both primary as well as secondary data to check the satisfaction of
customer towards deposits offered by VMCBL.

Primary
Data
Data
Secondary
Data

 Primary Data:

Data collected for the first time by the investigator himself is called Primary Data. In
this report data has been collected by Questionnaire method & Personal Interview.

 Questionnaire Method: - It is quite popular method for big enquiries.

Questionnaire is given to the customer with a request to answer the questions
and return the questionnaire.

 Personal Interview: - Data has also been collected by communicating with

the bank staff.

54
  Secondary Data:

Secondary Data is the data which already have been collected by someone else and
which have been passed through statistical process. For my report I have collected
data from published annual reports, reference books, and historical notes of the
VMCBL.

55
 Tools & Techniques

When research is to be done we have to use various tools and techniques for
successful completion. The tool that is used by me is the Questionnaire Method. Z-
test is applied for the analysis of data.

Research Plan

 Sample Design:

I have used random sampling and the sample size is 265.

 Research Design:

Descriptive Research: - It is a quantitative research that is used to collect quantifiable

information to be used for statistical analysis of the sample of population. Descriptive
research includes facts findings and questionnaire.

Quantitative Research: - When we conduct a piece of quantitative, we are trying to

answer a research question or hypothesis we have set.

56
 Analysis of Data

Q1) In VMCBL customers are satisfied to deposit their money.

Strongly Disagree=2 Neutral=3 Agree=4 Strongly

Disagree=1 Agree=5
16 30 48 84 87

Strongly Disagree
6%

Disagree
11%
Strongly Agree
33%
Neutral
18%

Agree
32%

Interpretation
Above chart represents customer satisfaction towards the deposits in VMCBL in
percentage. From the analysis it can be said that 65% of customers are satisfied to
deposit their money in VMCBL.

57
Q2) VMCBL will get more customers by introducing online deposit scheme.

Strongly Disagree=2 Neutral=3 Agree=4 Strongly

Disagree=1 Agree=5
3 51 46 104 61

Strongly Disagree
1%

Disagree
19%
Strongly Agree
23%

Neutral
17%

Agree
39%

Interpretation

From the above chart it can be said that 62% customers are agreeing that VMCBL
will get more customers by introducing online deposit scheme. So VMCBL needs to
introduce online deposit schemes.

58
Q3) VMCBL can attract more customers by enhancing their marketing policy.

Strongly Disagree=2 Neutral=3 Agree=4 Strongly

Disagree=1 Agree=5
15 41 47 98 64

Strongly Disagree
6%

Disagree
Strongly Agree 15%
24%

Neutral
18%

Agree
37%

Interpretation

From the above chart it can be said that 61% of customers agree to the statement that
by enhancing marketing policy VMCBL can attract more customers. So VMCBL is
required to increase marketing of their products, services and schemes.

59
Q4) Sufficient deposit schemes are provided by VMCBL.

Strongly Disagree=2 Neutral=3 Agree=4 Strongly

Disagree=1 Agree=5
29 34 40 83 79

Strongly Disagree
11%

Disagree
13%
Strongly Agree
30%

Neutral
15%

Agree
31%

Interpretation

From the above chart it can be said that 61% customers agree that sufficient deposit
schemes are provided by VMCBL. It is beneficial for VMCBL that it is providing
enough deposit schemes like other banks in the market.

60
Q5) Current Deposit is one of the best transaction services.

Strongly Disagree=2 Neutral=3 Agree=4 Strongly

Disagree=1 Agree=5
30 25 50 87 73

Strongly Disagree
11%

Disagree
Strongly Agree 9%
28%

Neutral
19%

Agree
33%

Interpretation

Above chart shows that 61% of customers are agreeing that current deposit is one of
the best transaction service. It is a good sign for VMCBL that their transaction service
has been appraised by the customers.

61
Q6) Quick service in deposit is provided by VMCBL.

Strongly Disagree=2 Neutral=3 Agree=4 Strongly

Disagree=1 Agree=5
25 22 82 87 49

Strongly Disagree
9%
Disagree
8%

Strongly Agree
19%

Neutral
Agree 31%
33%

Interpretation

From the above chart shows that 52% of customers agree that quick service has been
provide by VMCBL in deposits. But still VMCBL should try to increase such
percentage by improving their employee’s skills.

62
 Hypothesis Formulation

 Step-1: Establish a null and alternative hypothesis.

H0: Customers are not satisfied to deposit their money in VMCBL.

Ha: Customers are satisfied to deposit their money in VMCBL.

H0: µ ≤ 4.83

Ha: µ ≥ 4.83

 Step-2: Determine the appropriate statistical test.

Z-test has been applied.

 Step-3: Set the value of alpha.

Level of significance is 5%. As it is a two tailed test α will be divided by 2. So

α is 0.025.

 Step-4: Establish the decision rule.

Z tab = 0.5 – value of alpha.

Z cal =

63
  Step-5: Gather the sample data.

I have taken sample of 265 customers out of 1279 population.

Particulars Strongly Disagree=2 Neutral=3 Agree=4 Strongly

Disagree=1 Agree=5
Ha 16 30 48 84 87
16 60 144 336 435

∑x = 991

Average x̅ = ∑x/n

x̅ = 991/265

x̅ = 3.74

Standard Deviation ϭ = √∑(x-x̅)2/n-1

ϭ = √12.738/265-1

ϭ = 1.78

n = 265
µ = 4.83

64
 Step-6: Analyze the data.

Z tab = 0.5 – 0.025

= 0.475
Z tab = ± 1.96

Z cal = 3.74 – 4.83

1.78
√265

Z cal = - 9.97

 Step-7: Reach a statistical conclusion.

Z cal > Z tab

- 9.97 > ± 1.96

Hence Z cal is greater than Z tab so, here we reject the null hypothesis. So at
the level of significance 5% it is said that Customers are satisfied to deposit
their money in VMBCL.

65
 Findings

 Customers are satisfied with their money deposit in VMCBL.

 Profit of VMCBL is increasing every year.

 VMCBL has more short term deposit compared to long term deposit.

 In VMCBL advances are almost half of deposits.

 Interest rate is also good and doubling facility is there.

 There and Then money is available on hand over F.D.

 Right person is placed at right place in VMCBL, and therefore customer needs
are satisfied efficiently.

 Number of customers is increasing day by day but VMCBL lacks the

manpower to meet the increasing demand.

 VMCBL does not have the training institute to train the newly joined
employee.

66
 Suggestions

 VMCBL needs to introduce net banking facility.

 To stay ahead in competition and also to satisfy customer needs new

investment schemes should be introduced.

 To meet the customer demand bank needs to develop their technology in

banking operations.

 To provide soothing services to customer bank should recruit more employees.

 VMCBL should start providing credit card facility to stay effective in this
competitive era.

 To attract new customers bank should develop efficient advertisement policy.

 There should be sufficient transparency in plan & policies which helps in

developing customer relationship.

67
 Conclusion

The study focused on deposits offered and customer satisfaction to deposit their
money in VMCBL. The result is that customers are satisfied to deposit their money in
VMCBL. The study shows the reasons/ factors that influence the customers to deposit
their money in VMCBL.

But as competition increases, commercial banks are providing different services.

Customer will choose those services that will satisfy their need. And also which is
easy to understand & accessible. VMCBL is also giving all commercial banking
services to the customers. But still needs to improve the high quality banking services
with latest technology to ensure safety of money to deposit and introducing new
products & services to customers. VMCBL is investing their funds in fruitful projects.
The bank is playing a key role in the portfolio of development of financing the rural &
urban areas in our country.

68
 Limitations

Every study has some limitations. Below mentioned are some of the limitations:

 Main limitation is the time limit for the study. We got 42 days for training, so
it is not sufficient to understand the whole bank working properly.

 Questionnaire method has been used in this report, so one limitation is that
respondents may not give 100% honest answer.

 Collection of data also includes secondary data which provide limited

information about a bank.

 My knowledge regarding banking & finance sector is limited. So this is also

one of the limitations of the research.

69
 Bibliography

Bibliography
(n.d.). Retrieved from www.vmcbl.com.

(n.d.). Retrieved from www.gscbank.co.in.

Anabalagan, M. (2014). Analysis of Deposits & Advances of Selected Private Sector

Commercial Banks . International Journal of Management & Social Science .

H.M., J. (2018). A Study on Deposits & Mutual Funds. International Journal of Research in
Economics & Social Science.

(2017-2018). Annual Report.

(2018-2019). Annual Report.

Co-op Bankers Reference Book . (2017). Mumbai.

70
 Questionnaire:

Name of the respondents:

Below mentioned are statements that deal with the deposit analysis and performance
of VMCBL. Please tick only one number which you think is the best option that
reflects your opinion from the following five point scale.

Strongly Disagree = 1

Disagree = 2

Neutral = 3

Agree = 4

Strongly Agree = 5

Q1) In VMCBL customers are satisfied to deposit their money.

Ans. (a) 1 (b) 2 (c) 3 (d) 4 (e) 5

Q2) VMCBL will get more customers by introducing online deposit scheme.

Ans. (a) 1 (b) 2 (c) 3 (d) 4 (e) 5

Q3) VMCBL can attract more customers by enhancing their marketing policy.

Ans. (a) 1 (b) 2 (c) 3 (d) 4 (e) 5

Q4) Sufficient deposit schemes are provided by VMCBL.

Ans. (a) 1 (b) 2 (c) 3 (d) 4 (e) 5

71
Q5) One of the best transaction service in VMCBL is the current deposit.

Ans. (a) 1 (b) 2 (c) 3 (d) 4 (e) 5

Q6) Quick service in deposit is provided by VMCBL.

Ans. (a) 1 (b) 2 (c) 3 (d) 4 (e) 5

Q7) Recommendation.

Thank you.

72
 Profit & Loss A/c. of VMCBL
Particulars 31-03-2018 31-03-2019

Income
Interest & Discount 42,94,35,994.27 46,83,54,051.99

Commission, Exchange & 15,04,600.27 16,77,852.17

Brokerage
Safe Deposit Lockers rent 34,99,100.00 36,28,464.00

Profit on sale of 61,31,943.00 4,34,597.00

Investments

Other Receipt 1,07,03,047.02 86,54,378.83

MMCB write – off - 2,00,000.00

recovery

Total 45,12,74,684.56 48,29,49,343.99

Expenditures
Interest on Deposits & 24,87,20,697.38 26,49,55,248.89
Borrowings

Salaries, Allowances & 6,15,21,181.50 6,92,41,848.00

PF

Rent, Taxes, Insurance, 77,29,627.97 80,91,233.08

Lightings etc.
Law Charges 3,96,171.00 5,08,991.79

Postage, Telegrams & 7,47,366.55 9,26,132.69

Telephone Charges

73
Auditors Fees 3,32,500.00 3,25,000.00

Depreciation Expenses 67,91,887.26 63,21,847.00

Stationary Printing & 7,99,940.55 13,01,863.49

Advertisement
Other Expenditure 1,21,28,322.73 1,31,67,175.81

Income Tax Expenses 1,57,29,463.00 2,46,34,098.94

Provisions 5,22,77,526.62 4,58,75,904.30

Net Profit 4,41,00,000.00 4,76,00,000.00

Total 45,12,74,684.56 48,29,49,343.99

74
 Balance Sheet of VMCBL
Particulars 31-03-2018 31-03-2019

Capital & Liabilities

Share Capital 12,44,40,300.00 14,12,79,300.00

Reserve Fund & Other 7,76,97,376.07 53,03,75,797.37

Funds

Principal Subsidiary State - -

Partnership Fund
Deposits & Other 443,35,00,015.81 506,26,48,330.71
Accounts

Borrowings - -

Bills For Collection 13,91,931.00 15,97,836.00

Branch Adjustment 2,87,815.50 4,34,294.41

Overdue Interest Rate 5,00,98,644.00 8,51,70,459.00

Interest Payable 64,90,140.00 6,84,615.00

Other Liabilities 12,67,40,269.06 14,82,21,093.08

Profit & Loss A/c. 4,41,00,000.00 4,76,00,000.00

Contingent Liabilities - -

Total 526,47,46,491.44 602,30,11,725.57

75
Property & Assets

Cash 18,16,88,075.35 21,95,16,583.12

Balance with other Banks 66,74,54,948.91 67,83,83,628.26

Money at call & short - -

notice
Investments 1,48,26,80,651.00 177,15,42,142.00

Investment out of the - -

Principal/Subsidiary state
Partnership Fund
Advances 252,79,53,609.02 291,45,09,328.86

Interest Receivable 9,63,87,296.00 13,02,83,938.00

Bills Receivable 13,91,931.00 15,97,836.00

Branch Adjustments - -

Premises Less 16,38,01,099.00 15,54,14,631.00

Depreciation
Furniture, Fixtures and 2,43,10,323.45 2,11,54,465.25
Computer Less
Depreciation
Other Assets 11,90,78,557.71 13,06,09,173.08

Non Banking Assets - -

acquired in satisfaction of
claims
Total 526,47,46,491.44 602,30,11,725.57

76
Thank You

77