Serving to empower.
REPORT ON SUMMER TRAINING [TITLE] “WORKING CAPITAL FINANCING BY J&K BANK PLUS EMPLOYEE SATISFACTION”
Submitted to Lovely Professional University
In partial fulfillment of the Requirement for the award of degree of Masters of Business Administration
Submitted by; Nighat Qadir Regd. No. 10811672
DEPARTMENT OF MANAGEMENT LOVELY PROFESSIONAL UNIVERSITY PHAGWARA (2009)
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Declaration I,Nighat Qadir,a bonafide student of Lovely Professional university,hereby,declare that this project report titled “Working Capital and Term Loans Financing by J&K Bank�under the supervision and guidance of Mr. Mateen Qadir, Financial Service Executive , South Cluster, J&K Bank, Anantnag, submitted in partial fulfillment of the requirement for the award of Masters Degree in Business Administration ,to LPU,Jalandhar,Punjab,is my original work and the same has not been submitted by me for the award of any other degree,diploma,fellowship or any other titles or prises.
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Acknowledgement First of all I must thank Almighty Allah who is behind my every success in life and without His blessings; this project would not have been completed. I would like to thank my Parents who constantly supported and encouraged me throught this project. I have been blessed by significant help and support from many people during this project. I passionately record my sincere thanks to the organization of J & K Bank for providing me this grateful opportunity for doing this project in a healthy working environment. I would like to express my profound gratitude to my supervisor Mr. Syed Mateen Qadiri, Financial Services Executive of Advance Department, south cluster of J&K Bank for their assistance, guidance, untiring advice and encouragement. I am grateful and gratified to the respected Lovely School of Business, (LSB), of L.P.U for grooming me into a true line of work. I genuinely thank Mr.Rohan Sharma, lecturer, LSB, LPU for providing me timely assistance which helped me to accomplish this task. Last but not the least; I would like to thank all those who directly or indirectly helped me in the completion of this project.
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PREFACE
For management career, it is important to develop managerial skills. In order to achieve positive and concrete results, along with theoretical concepts, the exposure of real life situation existing in corporate world is very much needed. To fulfil this need, this practical training is required. I took training in fast growing company JK BANK. It was my fortune to get training in a very healthy atmosphere. I got ample opportunity to view the overall working of the company. This report is the result of my seven weeks of summer training in JK Bank, South Zone, Anantnag as a part of M.B.A. The subject of my report is-Financing of working capital and term Loan by Jk bank. In the forthcoming pages, an attempt has been made to present a comprehensive report covering different aspects of my training. After completing this project, I have undergone a number of changes, for good. Be it an increase in my knowledge, confidence level and manner of communicating with the people. This summer training at Jk Bank has made me much improved individual both on the personal as well on the professional fronts and has prepared me to a great extent to take up the future challenges.
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CHAPTERS
Page No.’s
Internship Programme Executive summary of the Project CHAPTER-I INDUSTRY PROFILE History of banks Major players and their market share Upcoming foreign banks in India CHAPTER-II
6 7 11-14 14-19
COMPANY PROFILE
History of JK Bank
21-23
Corporate mission and vision
24-25
CSR Aspect & B.O.D
25-29
Strategies and characteristics
30
Future plans
31
SWOT Analysis
32-33
CHAPTER-III Products and services
35-53
General insurances
54-60
Financial statements
61-65
CHAPTER-IV
WORKING CAPITAL
Working capital of J&K Bank
66-70
Working capital financing by J&K Bank
70-77
Live case study
78-95
Employee satisfaction
96-116
Conclusions Suggestions and recommendations Bibliography
117 118 119
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INTERNSHIP PROGRAMME The internship programme is part of the mandatory course completion required for the Masters programme in business administration at the school of business studies, Lovely Professional University,Punjab. Students are required to undertake summer(practical) training of 4-5 weeks in any company at the end of the 2nd semester. This provides students with the opportunities to apply business concepts and techniques, which they learn in the class room and the final semesters becomes more goal oriented and meaningful.
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Executive summary The banking industry has shown tremendous growth in volume and complexity during the last few decades. Despite making significant improvements in all the areas relating to financial viability, profitability and competitiveness, there are concerns that banks have not been able to include vast segment of the population, especially the underprivileged sections of the society, into the fold of basic banking services. This project report is based on the survey and practical work done by me for the completion of my summer training programme in JK Bank, Anantnag.The project is entitled “Financing of Working Capital and Term loan facilities by Jk Bank Plus employee satisfaction” My work was completed over a 5-6 weeks period in the South cluster of JK Bank, Anantnag.The authorities of the bank provided me some practical work to do related to the working capital and term loans, which worked as an effective tool for me to understand the concepts learnt in the class room.During this project, I analysed various cases and learnt a lot about the procedures and steps adopted by the bank for providing the credit, loan and working capital facilities to its needy customers. During this course of time, I studied about various products and services offered by the JK Bank . I surveyed to study the employee satisfaction of the organisation. I analysed the practical cases of two units-A drug manufacturing unit and an Educational trust that need to be financed. The drug manufacturing company “XYZ” needs finance for establishing its firm which will be manufacturing the ayurvedic products from the locally available herbs. The scope of its success in this industry was analysed. Its need for the raw materials, manufacturing processes etc was investigated. The report of its projected financials was collected, tabulated and thoroughly analysed. The demand for the working capital by the firm was Rs 60.00 Lacs but after complete analysis of the working cycle and the important parameters of the same like the sales, utilization capacity and projected profitability position of the firm in the coming five years, it was found that the firm will be facilitated with the working capital of Rs 20.00 Lacs and the term loan of Rs 12.00 lacs. The second case I went through was of an educational trust that needs the term loan facility of Rs 35.00 Lacs for its establishment. The same procedure was adopted for this trust. .
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Serving to empower. Besides that the survey of the various schools in its vicinity was done to look for the fee structure and the projected financials of the trust was prepared and analysed. OBJECTIVES OF THE RESEARCH: 1. To know various types of Financial Products and Services provided by J&K Bank Ltd. 2. To identify the key benefited areas by these financial services. 3. To know the methods employed by the bank to market their products. 4. To get acquainted of banking activities. 5. To working capital management of J&K Bank 6. To study the method of financing by J&K Bank 7. To know the employee satisfaction level of J&K Bank employees.
SOURCES OF INFORMATION:
PRIMARY SOURCE: •
Through structured questions.
•
Face to face interview.
SECONDARY SOURCE:
•
Records maintained by the bank.
•
Websites.
RESEARCH METHODOLOGY: The project was conducted by means of an exploratory research in order to understand financing by the bank.
DATA USED:
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Serving to empower. Both primary and secondary data was used .Bank brochures, diaries, books, other written material and bank’s website were used to collect secondary data. SAMPLING PLAN: UNIVERSE: Anantnag Town SAMPLE SIZE:70 SAMPLING TECHNIQUE: The sampling technique I used was that of convenience sampling. Data analysis was done by means of pie charts.
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CHAPTER-I
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PROFILE OF BANKING INDUSTRY A ‘bank’ is a financial institution whose primary activity is to act as a payment agent for customers and to borrow and lend money. It is an institution for receiving, keeping, and lending money. The first modern bank was founded in Italy in Genoa in 1406; its name was Banco-di-San Giorgio (Bank of St. George). Many other financial activities were added over time. For example banks are important players in financial markets and offer financial services such as investment funds. In some countries such as Germany, banks are the primary owners of industrial corporations while in other countries such as the United States banks are prohibited from owning non-financial companies. In "France Bancassurance" is highly present, as most banks offer insurance services (and now real estate services) to their clients.
HISTORY OF BANKING Without a sound and effective banking system in India,it cannot have a healthy economy.The banking system of India should not only hassle free but it should be able to meet new challenges posed by the technology and anyother external and internal factors. For the past three decades,India’s banking system has several outstanding achievements to its credit.The most striking is its extensive reach. It is no longer confined to metropolitans or cosmspolitans in India. In fact, Indian banking system has reached even to the remote corners of the country.This is one of the main reason of India’s growth process. The govt’s regular policy for Indian bank since 1969 has paid rich dividends with the nationalization of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or fpr withdrawing his own money. Today, he has a choice.gone are days when the most efficient bank transferred money from one branch to other in two days.Now it is simple as instant messaging or dial a pizza.money has become the order of the day. The ist bank in India,though conservative was established in 1786.From 1786 till today ,the .
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Serving to empower. journey of Indian banking system can be segregated into 3 distinct three phases.Those are as mentioned below: •
Early phase from 1786 to 1969 of Indian banks
•
Nationalisation of Indian banks and upto 1991 prior to Indian banking sector Reforms
•
New phase of Indian banking system with the advent of Indian
Financial And
banking sector Reforms after 1991 To make this write-up more explanatory, I prefix the scenario as phase I, phase II and phase III. PHASE I Hindustan
and
Beagal
Bank.The
East-India
Company
established
Bank
Of
Bengal(1809),Bank of Bombay(1840) and Bank of Madras(1843)as independent units and called it Presidecy Banks.These three banks were amalgamated in 1920 and imperial Bank of Indai was established which started as private shareholders banks,mostly European shareholders In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore .Between 1906 and 1913, bank of india, Central Bank of India, Bank of Baroda, Canara Bank, indian bank and Bank of Mysore were set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The banking companies act , 1949 which was later changed to banking Regulations Act 1949 as per amending Act of 1965(Act no . 23 of 1965 ) . Reserve bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking authority. During those days, public has lesser confidence in the Banks. As an aftermath deposit mobilization was slow .Abreast of it the savings bank facility provided by the postal department was comparatively safer.Moreover funds were largely given to traders. PHASE II Government took major steps in this Indian banking Sector Reform after independence in 1955,it nationalized imperial Bank of India with extensive banking facilities on a large scale .
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Serving to empower. specially in rural and semi-urban areas.It formed state Bank of India to act as the principal agent of RBI and to handle banking transactions of the union and state governments all over the country. Seven banks forming subsidiary of state Bank of India was nationalized in 1960 on 19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. India Gandhi.14 major commercial bank in the country was nationalized. Second phase of nationalization of banks, India Banking Sector Reform was carried out in 1980 with Seven more bank. This step brought 80% of the banking segment in India under Government ownership. The following are the steps taken by the Government of India to Regulate Banking institutions in the country.
•
1949: Enactment of Banking Regulation Atc
•
1955: Nationalisation of State Bank of India.
•
1959: Nationalisation of SBI subsidiaries.
•
1961 :Insurance cover extended to deposits
•
1969: Nationalisation of 14 major banks.
•
1971: Creation of credit guarantee corporation
•
1975: Creation of regional rulal Banks.
•
1980:Nationalisation of seven banks with deposits over 200 crore
After the nationalization of banks, the branches of public sector bank India rose to approx.800% deposits and advances took a huge jump by 11000%. Banking in the sunshine of govt. ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.
PHASE III This phase has introduced many more products and facilities in the banking sector in its Reforms measure.In 1991, under the chairmanship of M Narasimham,a committee was set up by his name which worked for the liberalization of banking practices. .
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Serving to empower. The country is flooded with foreign banks and ATM stations.Efforts are being put to give a satisfactory service to customers.Phone banking and net banking is introduced the entire system became more convenient and swift.Time is given more importane money.The financial system of Indai has shown agreat deal of resilience.It is sheltered from any crisis triggered by any external macro economics shock as other East-Asian countries suffered.This is all due to a flexible exchange rate regime,the foreign reserves are high,the capital account is not yet fully convertible and banks and their customers have limited foreign exchange exposure. Qualitative growth The growth of banking in the coming years is likely to be more qualitative than quantitative, according to the report. Based on the projections made in the "India Vision 2020" prepared by the Planning Commission and the Draft 10th Plan, the report forecasts that the pace of expansion in the balance-sheets of banks is likely to decelerate. The total assets of all scheduled commercial banks by end-March 2010 is estimated at Rs 40,90,000 crore. That will form about 65 per cent of GDP at current market prices as compared to 67 per cent in 2002-03. Banks assets are expected to grow at an annual composite rate of growth of 13.4 per cent during the rest of the decade against 16.7 per cent between 1994-95 and 2002-03. On the liability side, there is likely to be large additions to capital base and reserves. As the reliance on borrowed funds increases, the pace of deposit growth may slow down. On the asset side, the pace of growth in both advances and investments is forecast to weaken. MAJOR PLAYERS IN BANKING INDUSTRY AND THEIR MARKET SHARE State Bank of India:It is India's largest bank amongst all public and private sector banks operating in India. State Bank of India owns and operates many subsidiaries and Joint VenturesBanking susidiries •
State Bank of Bikaner and Jaipur (SBBJ) .
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Serving to empower. •
State Bank of Hyderabad (SBH)
•
State Bank of Indore (SBIr)
•
State Bank of Mysore (SBM)
•
State Bank of Patiala (SBP)
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State Bank of Saurashtra (SBS)
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State Bank of Travancore (SBT) Foreign subsidiries
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State bank of India International (Mauritius) Ltd.
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State Bank of India (California).
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State Bank of India (Canada).
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INMB Bank Ltd, Lagos. Non-banking subsidiaries
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SBI Capital Markets Ltd (SBICAP)
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SBI Funds Management Pvt Ltd (SBI FUNDS)
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SBI DFHI Ltd (SBI DFHI)
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SBI Factors and Commercial Services Pvt Ltd (SBI FACTORS)
•
SBI Cards & Payments Services Pvt. Ltd. (SBICPSL) Joint venture
•
SBI Life Insurance Company Ltd (SBI LIFE).
MARKET SHARE: State Bank of India is headed by Mr. Sheri O. P. Bhatt, Chairman.SBI currently has a market share of 17 per cent (in terms of total business) in the Indian banking sector. The SBI Group (including subsidiaries) accounts for 25 per cent of the domestic banking business. SBI alone enjoyed a market share of more than 19 per cent five years ago. Even if the bank's market share increases by one per cent every year for the next two-three years, it would be an achievement,. HSBC BANK:HSBC Bank is a subsidiary of HSBC Holdings plc, a London based banking .
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Serving to empower. giant which, according to the Forbes magazine, is the largest banking group in the world, and the 6th largest company in the world as of April 2009. In India, the introduction of HSBC Bank can be dated as early as the year 1853, with the establishment of the Mercantile Bank of India in Mumbai. Currently, HSBC Group operates through a number of its subsidiaries in India, viz. The Honking and Shanghai Banking Corporation Limited (HSBC), HSBC Asset Management (India) Private Limited, HSBC Global Resourcing / HSBC Electronic Data Processing Processing (India) Private Limited, HSBC Insurance Brokers (India) Private Limited, HSBC Operations and Processing Enterprise (India) Private Limited, HSBC Private Equity Management (Mauritius) Limited, HSBC Professional Services (India) Private Limited, HSBC HSBC Securities and Capital Markets (India) Private Limited and HSBC Software Development (India) Private Limited. The group carries out its Commercial Banking, etc.With a loan-deposit deposit ratio of 90%, HSBC Bank is said to be one of the five British banks that claim claim to have more deposits than loans. Such a high loanloan deposit ratio of the bank has been able to retain the trust of its investors and customers, HSBC Bank is well known for having established the first ATM (Automatic Teller Machine) in India in the year 1987. As of April 2009, the bank is present in many prominent cities of the country including Mumbai, New Delhi, Bangalore, Hyderabad, Jaipur, Chandigarh etc.
MARKET SHARE:Hongkong Hongkong and Shanghai Banking Corporation (HSBC) is looking to increase its market share in the credit card business in India to 10%. Besides increasingg headcount. “Currently, it has a seven to eight per cent share in the credit card business in the country.. The bankpresently bankpresently have 600 employees working for wealth management services The company has a credit card base of over 1.7m customers in India out of the estimated size of 20m. On an year-on-year year year basis, HSBC has been achieving a 50% growth in the business. HSBC plans to open a branch in Lucknow by the year end. “We have already opened two branches in Chhattisgarh and Rajasthan this year and would open op another branch in Lucknow,” he said. HDFC Bank HDFC Bank was amongst the first to receive an 'in-principle' 'in principle' approval from the Reserve .
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Serving to empower. Bank of India (RBI) to set up a bank in the private sector from Housing Development Finance Corporation Limited (HDFC), in 1994 during the period of liberalisation of the banking sector in India. HDFC India was incorporated in August 1994 in the name of 'HDFC Bank Limited'. HDFC India commenced operations as a Scheduled Commercial Bank in January
1995.
HDFC India deals in varieties of products like home loan, standard life insurance, mutual fund, securities, credit cards, etc. HDFC has branch offices in all major cities in India like Calcutta, Chennai, Delhi, Bangalore, Hyderabad, Ahmedabad apart from HDFC Mumbai. The
bank presently
has
more than
468 branches over 212 cities across the
country. Authorized
capital:
Paid-up
capital:
Rs. Rs.
450
crore
282
crore
Equity Holds;
24.2%
listing: HDFC India has been listed on the Stock Exchange, Mumbai and the National Stock Exchange. The bank's American Depository Shares are listed on the New York Stock HDFC Bank India provides the following range of products: •
Savings Account
•
HDFC Bank Preferred
•
Sweep-In Account
•
Super Saver Account
•
HDFC Bank Plus
•
Demat Account
•
HDFC Mutual Fund
•
HDFC Standard Life Insurance
HDFC India innovative services •
HDFC Phone Banking
•
HDFC ATM
•
HDFC Inter-city/Inter-branch Banking .
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Serving to empower. •
HDFC Net Banking
•
HDFC International Debit Card
•
HDFC Mobile Banking
•
HDFC Bill Pay
HDFC Bank Loans •
HDFC Personal Loan
•
HDFC New Car Loan and Used Car Loan
•
HDFC Loan Against Shares
•
HDFC Two Wheeler consumer loan
•
HDFC Home Loan
MARKET SHARE: Promoted in 1995 by Housing Development Finance Corporation (HDFC), India's leading housing finance company, HDFC Bank is one of India's premier banks providing a wide range of financial products and services to its over 15 million customers across hundreds of Indian cities using multiple distribution channels including a pan-India network of branches, ATMs, phone banking, net banking and mobile banking. Within a relatively short span of time, the bank has emerged as a leading player in retail banking, wholesale banking, and treasury operations, its three principal business segments. As of March 31, 2009, the Bank had a distribution network with 1,412 branches and 3,295 ATMs in 528 cities. For the quarter ended March 31, 2009, the Bank earned total income of INR 53.65 billion (Rs.5,365.5crore) as against INR 35.05 billion (Rs.3,505.5crore) in the corresponding period of the previous year. Net revenues (net interest income plus other income) for the quarter ended March 31, 2009 were INR 29.66 billion (Rs.2,966.7crore), up by 35.4% over INR 21.91 billion (Rs.2191.4crore) for the quarter ended March 31, 2008. Net Profit for the quarter ended March 31, 2009 was INR 6.30 billion (Rs.630.9crore), up by 33.9% over the corresponding quarter ended March 31, 2008.The Bank’s total balance sheet size increased by 37.6% from INR 1331.77 billion (Rs. 133,177 crore) as of March 31, 2008 to INR 1832.71 billion (Rs.183,271crore) as of March 31, 2009. Total deposits were INR 1428.12 billion (Rs.142,812crore), an increase of 41.7% from March 31, 2008.Total income .
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Serving to empower. for the year ended March 31, 2009 grew by 58.2% to INR 196.22 billion (Rs19622.9crore) over the corresponding year ended March 31, 2008.
BANK
ICICI
ICICI Bank is India's second-largest bank. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. The Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Centre and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia and Indonesia. Our UK subsidiary has established branches in Belgium and
Germany.
ICICI Bank's equity shares are listed in India on Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the
New
York
Group
Stock
Exchange
(NYSE). companies
MARKET SHARE OF ICICI: ICICI Bank continues to be the leading private sector bank in the country. Deposits grew 80 per cent to Rs. 17,515 crore at September 30, 2001 as against Rs. 9,728 crore at September 30, 2000 and Rs. 16,378 crore at March 31, 2001. The share of ICICI Bank in total deposits of the banking system increased to 1.52 per cent from 0.97 per cent at September 30, 2000. Retail deposits constituted 67 per cent of total deposits, compared to 48 per cent at September 30, 2000, reflecting ICICI Bank's successful retail thrust. Savings deposits registered a robust growth of 159 per cent to Rs. 2,186 crore from Rs. 843 crore at September 30, 2000. ICICI Bank's customer assets (including credit substitutes) increased 80 percent to Rs. 11,409 crore at September 30, 2001 from Rs. 6,324 crore at September 30, 2000. ICICI Bank's market share in customer assets increased to 2.01 per cent at September 30, 2001 from 1.26 per cent .
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Serving to empower. at September 30, 2000. ICICI Bank focuses on building customer relationships and using technology as a key differentiator in its products and services. ICICI Bank continued its focus on maintaining high quality of business with 86 per cent of incremental exposure being to clients rated 'A' and above. The ratio of net non-performing assets (NPAs) to customer assets was 1.41per cent at September 30, 2001 compared to 1.44 per cent at March 31, 2001. The provisioning coverage against NPAs was 63 per cent at September 30, 2001. The Bank also maintains a general provision of 0.50 per cent on standard assets and a provision for operational risks at 0.50 per cent of the paid-up capital.
UPCOMING FOREIGN BANKS IN INDIA This year few more banks is going to be added in the list of foreign banks in india.This is an aftermath of the sudden interest shown by Reserve bank of India paving road map for foreign banks in India, greater freedom in India.Among them is the worlds best private bank by Euro Money Magazine ,Switzerland’s UBS.
The following are the list of foreign banks going to set up business in India:
Royal Bank of Scotland
Switzerland’s UBS
US Based GE Capital
Credit Suisse Group
Industrial And Commercial bank Of china
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CHAPTER-II
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JAMMU AND KASHMIR BANK PROFILE The Jammu and Kashmir Bank Limit Type
PRIVATE LIMITED
Founded
1938
Headquarters
M.A.ROAD SRINAGAR,INDIA
No. of locations
> 570 branches/offices
Industry
Financial, Commercial Banks
Website
http://www.jkbank.net
BREIF HISTORY: Jammu & Kashmir Bank was founded on October 1, 1938 and it commenced business from July 4, 1939. The Jammu & Kashmir Bank Limited has been the first of its nature and composition as a State owned bank in the country. The Bank was established as a semi State Bank with participation in capital by State and the public under the control of State Government. According to the extended Central laws of the state, Jammu & Kashmir Bank was defined as a govt. Company as per the provision of Indian companies’ act 1956. In the year 1971, the Bank received the status of scheduled bank. It was declared as "A" Class Bank by RBI in 1976. Today the bank has more than 570 branches across the country and has recently become a billion Dollar Company The Jammu and Kashmir Bank is one of the fastest growing banks in India with a network of more than 570 branches spread across the country offering world class banking products/services to its customers. Today the bank has status of value driven Organization and is always working towards building trust with shareholders, Employees, Customers, borrowers, regulators, and other diverse stakeholders for which it has adopted a strategy directed to developing a sound foundation of relationship and trust aimed at achieving excellence, which of course comes from the wombs of good corporate governance. Good governance is a source of competitive advantage and a critical input for achieving excellence .
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Serving to empower. in all pursuits. JK Bank considers good Corporate Governance as the SINE QUA NON of a good banking system and has adopted a policy based on all the four pillars of good governance-TRANSPARENCY,DISCLOSURE,ACCOUNTABILIT-y AND VALUE, enabling it to practice trusteeship, transparency, fairness and control leading to stakeholder delight, enhanced share value and ethical corporate citizenship. It also ensures that bank is managed by an independent and highly qualified board following best globally accepted practices, transparent disclosure and empowerment. Besides ensuring to meet shareholder’s aspirations and societal expectations following the principles of management executive freedom to drive, the bank forward without undue restraints but with the framework of effective accountability. The excellence achieved by bank in its operations stemming from the roots of voluntary governance has not gone unrecognized and bank has recently bagged three very prestigious awards for fair business practices and commitment to social obligations. The bank had to face serious problems at the time of independence when out of its total of ten branches two branches of Muzaffarabad and Mirpur fell to the other side of the line of control (now Pak Occupied Kashmir) along with cash and other assets.
SOLID FINANCIAL STANDING OF JK BANK Jammu & Kashmir Bank Ltd in India is listed in the Indian BSE and NSE stock exchanges. The bank has a solid financial base-as evidenced by highest degree of safety rating- P1 by rating agencies Standard and Poor, and CRISIL. The Jammu & Kashmir Bank Ltd is the exclusive banker to the Jammu and Kashmir Government. The bank has shown four decades of profit and paid substantial dividends to its shareholders. Jammu & Kashmir Bank Ltd is also entrusted with the task of collecting taxes for the Central Board of Direct Taxes in Jammu And Kashmir State.
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CORPORATE MISSION OF J&K BANK
Our mission is to empower the people of J&K. Within the framework of this approach, we cannot now conceive strategies for the Bank, which have little or no connection with the people of J&K. In the past we have tried to maximize profits without directly linking it to the impact on the welfare of the society as a whole. What we need to do now is to combine the sensibility of the social enterprise with the form of a for-profit business. Our overriding mission as a corporation is to use our core competency to serve and empower the people of the state in general, and entrepreneurs in particular, rather than serving them as an afterthought and provide the provide of J& K international quality financial service and solutions and to be a super specialist bank in the rest of the country. The two together will make us the most profitable bank in the country.
CORPORATE VISION “To catalyze economic transformation and capitalize on growth�. Our vision is to engender and catalyze economic transformation of Jammu and Kashmir and capitalize from the growth induced financial prosperity thus engineered. The Bank aspires to make Jammu and Kashmir the most prosperous state in the country, by helping create a new financial architecture for the J &K economy at the centre of which will be the J & K Bank.
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Serving to empower. VALUES: Customer Sovereignty, Passion for Excellence, Continuous Innovation, Transparency & Integrity, People Orientation and Social Responsibilities are the core values at the J& K Bank.
PHILOSOPHY: The Bank’s Corporate Governance philosophy is woven around its total commitment to the ethical practices in the conduct of its business, while striving in the constant quest to grow with profits and enhance shareholders value and align the interests of the Stakeholders and Society through adoption of best international practices and standards. The Corporate Governance policies of your Bank recognize the accountability of the Board vis-à -vis its various constituents including customers, shareholders, investors, employees, Government and regulatory authorities and societal responsibilities as a corporate citizen.J&K Bank is committed to the best and transparent corporate governance practices. It believes that proper corporate governance practices leads to effective management and control of business, which in turn provides best value to all its stakeholders through highly motivated personnel, visionary leadership, respect for people and society, innovation and sound fiscal discipline. BOARD (Board of directors & Executive Directors)
CHAIRMAN & CHIEF EXECUTIVE OFFICER
Executive Director
Executive President
GENERAL MANAGER
.
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Serving to empower. JOINT GENERAL MANAGER
DEPUTY GENERAL MANAGER
ASSISTANT GENERAL MANAGER
CHIEF MANAGER
MANAGER
Board of Directors of the Bank: 1. Haseeb A. Draboo (Chairman & Chief Executive) 2. M. S. Vera 3. G. P. Gupta 4. B. B. Visa I.A.S (Commissioner\ Secretary to Govt.) 5. Abdul Raff Family (Executive Director) 6. Mehta Ahmad (Executive Director) 7. B. L. Dora .
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Serving to empower. 8. Muar Churched Tram boo EXECUTIVE COMMITEE 1 Haseeb A Draboo Chairman & Chief Executive
2 A K Mehta Executive Director & COO
3 Abdul Maid Mir Executive Director & CFO
4 Alit Singh Sr. President & CPO
5 G A Beige President & Chief Strategist
6 Tafazal Husain President & CCO
7 Sahibzada Guam Mohi-udin (not in picture) President & Country Head-Sales
8 K K Sharma President & CTO
9 Parvez Ahmed President & Company Secretary .
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Serving to empower. PAST PERFORMANCE: •
In the last two years, the Bank has registered a 140 per cent increase in profits.
•
We have seen a 108 per cent increase in the rate of return on equity,
•
A vast improvement in the Bank’s efficiency to generate profits from every invested rupee.
•
The efficiency of using the assets of the Bank to generate earnings has increased 104 per cent in two years.
•
The NPA coverage ratio has been increased from 48 to 65 per cent.
•
The stock price has more than doubled in the last two years. We touched a high of Rs 788 last month, showing a 288 per cent increase.
.
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Serving to empower. CSR ASPECT OF JK BANK The Corporate Social Responsibility (CSR) of the J&K Bank seeks to recognize obligations towards society and aims to integrate the CSR ideals into its mission for optimizing both business and social performance. It stresses on promoting work life balance, give attention to social and environmental concerns and host of factors that facilitate business pursuits and accomplishment of economic goals. The CSR is not just recognized as promulgating the Bank's own values and principles of philanthropy but also the values and principles of all those who have a stake in it or are affected by its operations. By supporting social cause aligned to the mission the CSR strategy differentiates the Bank's brand and enhances its reputation. The Bank manages social issues in the same manner as any other strategic business issues.
The Bank also contributes significantly towards the social cause by donating
generously to the poor and needy ones for various philanthropic activities Be it victims of natural calamity, like fire, flood, snowstorm or tsunami and disabled or patients with serious ailment who lack reliable means of survival. The one and a half decades long turmoil in the State of J&K has added to the agonies of people with hundreds of children losing their parents to fend for themselves in this harsh world. The Bank realizing its responsibility of saving the life/ future of these blooming children, adopt several of them by providing financial support either through various orphanages where they are sheltered or directly to the orphans by bearing their educational or other expenditureThe Bank shall continue donations for the development of infrastructure (computers, books, TV's, prosthetic support etc) to various NGOs, societies, trusts, institutions, etc. involved in socio-economic development of the society.
Heritage preservation is an important responsibility of every conscious individual,
institution or agency. The thrust areas to assist in this respect for the Bank will be preservation of historical/religious monuments, development of tourist sites, national properties, museums, libraries, protection of environment/ecology etc. and sponsoring seminars and awareness camps, art and literary works, 3rd cultural activities, social service camps, college or university students clubs etc.
The Bank has been playing a vital role in the promotion of tourism and it is in this .
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Serving to empower. backdrop that the Bank has been shouldering the responsibility of registering yatris for the Shree Amarnathji Yatra through its extensive network of branches spread across the country. The Bank puts in place special registration counters at all branches of the Bank outside the state and some selected branches in Jammu and Kashmir State.
Apart from above activities the Bank has been constructing/developing the public
utility service like public parks, bus stands, drinking water posts, lavatories, conveniences, rain shelters. In addition to this, the bank organizes relief camps, service camps, night shelters, health resorts, health clinics, disaster & calamity management centers, rehabilitation centers etc.
JK BANK EMPHASIZES THE FOLLOWING STRATEGIES •
Increase market share in India’s expanding banking and financial services industry
by following a displined growth strategy focusing on quality and not on quantity 7 delivering high quality customer services. Leverage the available technology platform and open scaleable systems to deliver more products to more customers and to control operating costs. •
Maintain current high standards for asset quality through disciplined credit risk
management •
Develop innovative products and services that attract the targeted customers and
addresses inefficiencies in the Indian financial sector. •
Continue to develop products and services that reduce bank’s cost of funds.
•
Focus on high earnings growth with low volatility.
•
Enhances margins and boosts the virtuous cycle of savings and lending
•
Increase the limit for foreign institutional investments in the bank to 40 percent
from 33 percent earlier.
UNIQUE CHARACTERISTICS & SERVICES •
J&K Bank carries out banking business of the Central Government
•
Inspite of a government equity holding of 53 per cent, Jammu & Kashmir Bank (J&K
Bank) is regarded as a private sector bank .
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Serving to empower. J&K Bank is the one and only banker and lender of last resort to the Government of
•
J&K. Plan and non-plan funds, taxes and non-tax revenues are routed through the J&K
•
Bank J&K Bank claims the distinction of being the only private sector bank that has been
•
designated as agent of RBI for banking The services of J&K Bank are utilized for the purposes of disbursing the salaries of
•
Government officials J&K Bank collects taxes pertaining to Central Board of Direct Taxes, in Jammu &
•
Kashmir
Future Planning: •
To build a global brand we need to do two things – go global physically and second, more importantly, have a unique business model, product offering and service standards, all of which are globally recognized. We have taken initial steps to achieve the first. As of today, after the state government, our second largest shareholders are Foreign Institutional Investors, with a combined stake of almost 36 per cent. Some of the biggest names in the world figure in the sixty plus funds that have invested in the Bank. The list is truly international, with funds from USA, Europe, Singapore, Japan, Sweden, Mexico and Spain, having investments valued at more than $300 million in the Bank As a next step in this direction, it is our plan this year to raise money abroad. We will offer Global Depository Receipts and list the Bank in international capital markets. This will be a landmark in our illustrious history.
•
The second way to becoming a global brand is to have a unique business model, which is a far more formidable task. But there are great examples from small and remote areas like ours that have produced famous brands. Godiva chocolate, made in a small area in Belgium is a classic example. It is renowned because it has its own unique way of making chocolates. Evian, from the foothills of French Alps, has its .
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Serving to empower. own way of making mineral water. Harris Tweed is woven in a unique manner from wool produced in a village of Scotland. We too have a wonderful brand in Pashmina. Let us not forget that in 1795, Napoleon presented his wife Josphine with a Kashmirishawl! By and large most global brands are products. What we are setting out to do is to create a global brand in the financial services industry. To do this we have to work out processes, products and procedures that are unique to the J&K Bank. It has to be the J&K Bank way of doing business. Within our industry and closer home, the Bangladesh Grameen Bank and Bank Danamon have become global names. We don’t want to replicate their business model but we do want to emulate their uniqueness of doing business.
SWOT ANALYSIS OF J&K BANK Strengths: •
Good reputation, excellent growth, customer loyalty and trust.
•
Wide network of branches across the state .
•
A listed company on BSE and NSE with four decades of uninterrupted profitability
and dividend payments. •
World class banking services like Tele-banking,anywhere banking and excellent ATM
network. •
98% of the total business computerized.
•
Innovative in products and services supported with latest technology.
•
Best practices in corporate governments.
•
Management`s commitment to ethical business principles & transparency.
•
Strong fundamentals.
Weakness: •
Lesser branches in the far of areas of the J&K state.
•
Fewer promotions and advertisement of bank and its products.
•
Bank does not have any branch outside India to enter global market.
•
The benefit of it is not have not accrued fully to the Bank, the MIS is still not IT .
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Serving to empower. driven •
ATM facilit y availabilit y is less
•
Employee commitment to the job is missing.
Opportunities: •
The bank can play proactive role in the development of J&K economy and tourism
industry as the growth in tourism sector of the state will have positive impact on the bank’s business. •
The bank can have tie-ups with national and international financial institutions to
offer new and upgraded services and products. •
The bank enjoys very well customer loyalty. It can diversity its business. So as not
lose the customers to the competing rivals. •
The bank can tap the potential in the under financed productive segments of the state
economy like Horticulture.
Threats: •
High level of competition from the other national banks particularly outside J&K
state. •
Policies regarding interest rates have to be flexible to compete with other banks in
this stiff competition. •
Technologically changes in the banking sector on changing rapidly. The need of the
hour is that bank should have innovation in products and services and keeps itself updated with latest technologies. •
Customer friendly services and products should be given priority as other banks are
posing stiff competition by offering new customer tuned products and services to attract customers of other banks.
.
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Serving to empower.
CHAPTER-III
.
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Serving to empower.
PRODUCTS AND SERVICES OFFERED BY JK BANK PRODUCTS The Jammu & Bank Limited has well tailored products and services to target the potential customers.These products have definitely helped the needy ones. Some products have hugely helped the Kashmir valley by generating employment. Very huge no. of products is offered by J&K Bank. Some major products have been discussed as;
Education Loan A) Scale of finance i) Rs.10.00 Lacs for studies in India. ii) Rs.20.00 Lacs for studies abroad. a)Graduate in : BA, B.Com. B.Sc., etc. Medicine, Surgery, Engineering, Hotel Management, Design, Architecture, Bio-chemistry, Agriculture, Veterinary etc. b)P.G Courses in: Business Management, Chartered or Cost Accounting, Company Secretaryship, Masters & PhD. And various other professional courses offered by reputed Indian and foreign universities. Eligibility Should be an Indian National Should have secured admission to professional/technical courses through entrance test/selection process. • Should have secured admission to foreign universities/institutions • Should have passed the qualifying examination for admission to the courses. • •
Employed person intending to improve their educational qualification and/or receive training in modern technology in India or abroad can also be assisted under this scheme provided training offers prospects of better placement Security • •
Personal guarantee of borrower/ 's Collateral security equal to amount of loan. Rate of Interest:
.
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Serving to empower. 2.5 to 5 Lakh
11.5%
5 to 10 Lakh
12.5%
10 to 20 Lakh
14.5%
Margin For loans upto Rs. 4 lacs - nil
•
For loans above Rs. 4 lacs Studies in India - 5% Studies abroad - 15% Repayment Repayment Holiday/ Moratorium: Course period + 1 year or 6 months after getting job, whichever is earlier. • The loan to be repaid in 5 to 7 years after commencement of repayment. If the student is not able to complete the course within the scheduled time, extension of time for completion of course may be permitted for a maximum of two years •
Optional: Customers have the liberty to decide whether they want to pay interest during the repayment holiday or want to capitalize the same. However, an incentive in the form of 1% concession in rate of interest shall be provided to the loanees if the interest is serviced during the study period CAR LOAN The person who want to avail this facility should be; • •
•
Permanent Employees of State / Central Government, Employees of Government / Semi-Government Undertakings & Autonomous Bodies Employees of Private Limited Companies, Private Organizations, Reputed Establishments & Employees on contractual basis with Central/State Govt, Government/ Semi-Government Undertakings& Autonomous bodies* Businessmen, Professionals and self employed individuals.
The minimum loan amount facility is Rs 75,000/- (Rupees Seventy Five Thousand Only) and the maximum loan facility is 30 months net monthly salary of the applicant or 2.5 times net annual income. However, in case of employees of private organizations & employees on contract basis as mentioned above, the maximum finance shall be limited to 18 times net monthly salary or 1.5 times net annual income. • In case of married individuals, certified income of spouse can also be considered provided the spouse guarantees the loan. •
The upper ceiling on the loan amount shall be Rs 25 lacs. .
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Serving to empower. Security Primary: Hypothecation of vehicle to be purchased & Bank’s charge to be registered with RTO. • Collateral: No third party guarantee required in respect of permanent employees of State and Central Government, employees of State / Central Government Undertakings & Autonomous bodies drawing salary through the Bank and where letter of undertaking from employer is available. • Guarantee of one person for all other applicants of the bank. •
Rate of Interest: 12 % upto 4 Lakh 13.50% above 4 Lakh
13.50
Margin 10% of the Sales Invoice Value for employees of State / Central Government, State / Central Government Undertakings, Autonomous bodies, Platinum / Gold Current Account holders.10% margin shall also apply to Businessmen, Professionals & SelfEmployed persons with yearly income of Rs 2,50,000/- & above. • 20% of the sales invoice value in case of all the other cases. •
100% finance shall be available to applicants if they keep a fixed deposit with the bank for amount equal or more than the margin money & for duration not less than the repayment period of the loan. This deposit shall be kept under lien to the Bank. Plus the processing charges of 0.25% of Loan amount to be paid upfront subject to a minimum of Rs. 500/-. Repayment: Flexible repayment options ranging from 12 to 84 months in equal monthly installments The minimum loan amount facility is Rs 75,000/- (Rupees Seventy Five Thousand Only) and the maximum loan facility is 30 months net monthly salary of the applicant or 2.5 times net annual income. However, in case of employees of private organizations & employees on contract basis as mentioned above, the maximum finance shall be limited to 18 times net monthly salary or 1.5 times net annual income. USED CAR FINANCE The purpose of the loan is making finance available for purchase of: An old car / jeep (not more than 5 years old). (Any make or model) Eligibility .
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Serving to empower. The loanees should be the Permanent employees of Government/Semi-Government Undertakings, Autonomous bodies, Public Sector Undertakings, Private Companies or reputed establishments. Professionals or self employed individuals, Proprietorship Concerns. Partnership Firms, Private /Public Ltd Co. Age Criteria The applicant should be at least 21 years old at the time of application, and below 58 years of age at the time of maturity of the loan.
Salaried Individual
*For institutions, where retirement age is 60 years, the upper age limit shall be 60 years. Self- Employed Any Proprietor, Partner, Professional or director above 21 Individual years of age but below 65 at the time of the loan's maturity Partnership Firm
NA
Private/Public Ltd NA Co. Minimum period of current employment/existence. The applicant must have been in current service for at least 3 years.* Only 2 yrs for Individuals drawing salary through our branches & where letter of undertaking from employer is available.
Salaried Individual
Self- Employed At least 3 years in business. Individual Partnership Firm
Should have been in existence for at least 3 years.
Private/Public Ltd Limited Companies should have been in existence for at least Co. 3 years.
Rate of interest:
REPAYMENT PERIOD
RATE OF INTEREST
Upto 4 years
13.25% p.a
Above 4 years and upto 6 years
13.75% p.a
.
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Serving to empower. Margin • •
25% for vehicles having age less than 3 years. 30% for vehicles having age of 3 years and above upto 5 years Maximum loan amount:2.5 times of the net annual income or 15 lacs, whichever is lower. If married, the spouse's income also considered provided the spouse guarantees the loan. Loan amount for used vehicles shall be subject to a maximum limit of Rs. 15 lacs.
Repayment period •
Maximum repayment period of 72 months for vehicles having age less than 3
years. Maximum repayment period of 48 months for vehicles having age of 3 years & above to 5 years Security remarry: Hypothecation of vehicle to be purchased. Collateral: No third party guarantee required in respect of employees drawing salary through our branches & where letter of undertaking from employer is available. Third Party Guarantee of two persons for all other applicants. Third Party Guarantee may be waived off in case of existing account holders having good reputation. Instead Post Dated Cheques may be accepted. Repayment Prepayment of any amount allowed any time after a period of 6 months at prepayment penalty @2% for the amount prepaid Prepayment of any amount allowed any time after a period of 6 months at prepayment penalty @2% for the amount prepaid. valuation of the vehicle The value of the vehicle will be ascertained on the basis of present market value of the new car of same variety & configuration less the depreciation, which shall be as follows •
.
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Serving to empower.
Not exceeding 6 months.
% Of Depreciation for fixing value. 5%
Exceeding 6 months but not exceeding 1 year.
15%
Exceeding 1 year but not exceeding 2 years.
20%
Exceeding 2 years but not exceeding 3 years.
30%
Exceeding 3 years but not exceeding 4 years.
40%
Exceeding 4 years but not exceeding 5 years.
50%
Age of the vehicle
COMMERCIAL VEHICLE FINANCE The finance under this scheme shall be available for purchase of Used Commercial vehicles like Used Trucks, Tippers, Buses, Mini Buses, light commercial vehicles, pick ups, three wheelers (cargo), auto rickshaws, etc of any approved make or model. The vehicle should not be more than 6 years old as on the date of finance. The product shall also cover takeover of loan accounts from our bank or from any other banks/ financial institutions, provided such loan account is running satisfactorily without any default in payment of installments as per the fixed repayment schedule. Eligibility Criteria Individuals / Proprietorship/partnership firms & Limited companies owning / operating or proposing to own / operate transport vehicles for carrying passengers or goods on hire. • The borrower should have sufficient net worth to pay for the margin and initial recurring expenses. In case where a borrower does not meet this requirement, a coborrower having sufficient net worth can be included. • Ownership of a pre-owned vehicle is not mandatory. • Minimum age of Applicant: 21 years • Maximum age of Applicant at loan maturity: 65 years • Minimum period of existence in case of firms & companies: 2 years in business. • Commercial Driving License (for self-operating by individuals) •
Commercial Vehicle Loans
Loan Limit Upto (Amount Margin in lacs)
Under priority Micro sector Enterprises
(Service)
8.50
15%
Upto and inclusive of Rs 15% 10.00 lacs
.
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Serving to empower.
Small Enterprises Under Non –priority sector
(Service)
Above Rs 10.00
20%
200.00
25%
Above 200.00
30%
Margin is calculated on the project cost of vehicle (chassis, body building & initial insurance) excluding registration charges. The borrower will be required to deposit the entire margin upfront with the bank to be released subsequently along with the loan component directly in favour of the supplier/fabricator to ensure proper end use of funds Repayment Maximum repayment period of 72 months including a initial moratorium of 2 months. The repayment shall be in Equal Monthly Installments. Security Primary: Hypothecation of vehicle to be purchased. Banks name as hypothecate to be got noted in the books of the RTO and also the Registration Certificate. • Collateral: •
Upto 30 lacs
3rd party guarantee of 2 persons
Above 30 lacs
Mortgage of immovable property of value equal to at least 50% of the loan amount.
UP Front fee 0.20% upto an amount of Rs 50.00 lacs. 0.50% above Rs 50.00 lacs to Rs 100.00 lacs. • 1.00% above Rs 100.00 lacs Maximum Rs 10.00 lacs. •
Minimum
Rs
500/-
Rate of interest Rate of Interest Under priority
Repayment years Micro (Service) PLR-1.50% Enterprises PLR –1.50%
upto
3 Repayment 3 to 6 years PLR-1% PLR-1%
.
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Serving to empower. sector The Small (Service) bank PLR-1% PLR-0.50% Enterprises char Above Rs 10.00 lacs PLR PLR+1.25% ges the interest monthly on daily outstanding balances. Penal Interest @ 2% p.a. over and above the contract rate where the installment is overdue beyond 2 months. The penal interest will be charged on the overdue amount for the overdue period. No interest repayment will be allowed for pre-payment before three years of loan of original tenure of three to six years. CONSUMPTION LOAN Features Disbursed in cash .No questions are asked about its end-use and revolving type facility, as full limit can be restored on request of the borrower subject to the following. At the time of reinstatement of the limit, applicant must have sufficient remaining years of service so that loan is repaid within the borrowers remaining years of service. The borrower has not had more than two installments in arrears on any point of time during currency of loan. Borrower needs to furnish an undertaking from drawing and disbursing officer for intimating the bank about their transfer and noting that outstanding from the bank and the monthly installment obligation in their LPC forwarded to the next drawing and disbursing authority. Eligibility Permanent employees of State, Central Government, autonomous bodies, corporates, public & private sector undertakings having minimum of 3 years confirmed service Loan amount 30 months gross salary or Rs 7.00 lacs whichever is less Margin-Nil
Repayment period 84 monthly installments or remaining period of service whichever is lower. HELP TOURISM ( FOR KASHMIR VALLEY ONLY) .
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Serving to empower. This is an exclusive scheme providing hassle free credit for the conversion of residential properties into tourist guest houses (renovation/refurbishment only) Eligibility The house should e owned by the borrower, suitably located and having a motorable approach. The house should not be more than 15 years old. • Proper registration with the Tourism Department, J&K Government, and permission for the conversion/ renovation/ refurbishment from Municipality/ concerned authority, wherever necessary. - The guest house should be managed by the owner himself. - The prospective borrower required to submit proper estimates/project report for the renovation/refurbishment plan for the proposed guest house to assess the viability. T •
The renovation/refurbishment should be completed within a period of three months from the date of first disbursement. - The existing hotels/guest houses already registered with the Tourism Department not come under the purview of this scheme. Quantum of loan It shall depend on actual requirement subject to a maximum of Rs.50,000/= per room and Rs.10.00 lacs per guest house. The quantum of finance has been fixed after determining the average requirements for such conversion. Components of project cost Cost on account of renovation, painting, bedding, furniture, dinning table, flooring, crockery, cutlery, color television etc., required for renovation/refurbishing of the house. Security Primary: Hypothecation of all furniture fittings and other movable assets of the guest house. •
Collateral: Upto Rs.2.00 lacs and Third party guarantee of two persons having sufficient means to withstand the liability. Above Rs.2.00 lacs: Mortgage of the house property/guest house. Margin:30% Interest: only PLR(15%) Moratorium: The moratorium period is allowed for 6 months Repayment .
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Serving to empower. The loan shall be repayed in 60 equal monthly installments after the initial moratorium. The interest during moratorium should be inbuilt in the term loan. Insurance The securities /assets charged to the bank should be got comprehensively insured to safeguard to the interests of the bank. FRUIT ADVANCES LOAN(APPLE) The objective of the scheme is to provide adequate and timely credit for comprehensive requirements of Apple growers to take care of Production & Marketing Costs involved in case of their own orchards and also for those acquired on lease. Nature of facility Cash credit/SOD Purpose The facility shall be available for meeting the following costs: Production Costs, which includes: o Cost of Fertilizer o Cost of Fungicides, Pesticides, etc. o Cost of Fertilizer/Fungicides Application & Watch and Ward Marketing o Costs, which includes: o Cost of Shooks o Cost of Packing Material •
Cost of Picking, Packing & Grading Carriage Charges. Eligibility All Persons engaged in Production & Marketing of Apples, including the Small & marginal farmers Quantum of finance The amount of finance to be provided under the scheme is based on the following estimate worked out for an acre of apple orchard. • Production Cost. 40,000 • Marketing Cost 1,01,000. • Post Harvest Maintenance cost * 9,000. • Total costs. 1,50,000. •
.
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Serving to empower. The post harvest maintenance cost/finance disbursed in the month of Oct/Nov every year. Security •
Primary: Hypothecation of fruit crop
Collateral: Upto 2 Lacs Third Party Guarantee of 2 persons Above 2 Lacs Mortgage of own orchards/ Mortgage of equivalent immovable propert. Processing charges •
Rs 400/- (upfront in case of Third Party Guarantee)
Rs 500/- (upfront in case of Mortgage) Margin; 25% Rate of interest subject to charge Loan Amount Upto Rs.0.50 lacs
Interest rate PLR-2%
Above Rs.0.50 lacs & upto Rs. 2.00 lacs
PLR-1%
Above Rs.2.00 lacs & upto Rs. 5.00 lacs
PLR-0.50%
Above Rs.5.00 lacs & upto Rs. 20.00 lacs
PLR
ZAFFRON FINANCE The objective of the finance is to provide adequate and need based financial assistance for cultivation of saffron. The term loan shall cover the entire plantation & production costs including plant material, agricultural machinery, labour, etc. The nature of facility is agricultural term loan Open to; All saffron growers including small, marginal & large farmers including contract farmers engaged in cultivation of saffron or intending to commence the cultivation of saffron. Quantum of finance The unit cost, Margin & maximum amount of finance inclusive of the interest during moratorium (capitalized) shall be as follows .
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Serving to empower. For loans upto Rs 2 Lacs a. Unit b. Unit Cost c. Unit Cost d. Interest @ e. f. Loan g. Loan amount Margin Amount inclusive Size excluding inclusive of during of (Land Capitalized capitalized moratorium*. @ 20% capitalized Interest. Interest. Holding) Interest. of b. 1 Kanal 28,500 32,305 3805 5700 22,800 26,605 For loans above Rs 2 Lacs a. Unit Size b. Unit Cost c. Unit Cost d. Interest @ e. f. Loan g. Loan excluding inclusive of during Margin Amount amount (Land moratorium*. @ 20% inclusive of Holding) Capitalized capitalized Interest. Interest. of b. capitalized Interest. 1 Kanal 28,500 32,692 4192 5700 22,800 26,992 Minimum unit size to be financed under the scheme will be 0.5 Kanals. The unit-sizes indicated in the Tables-above are for I Kanal of land. However, in actual cases the unit size can be of varied sizes. The unit cost of the farms should therefore be calculated in proportion to the unit cost prescribed in the Tables. For the purpose of loan limit, the amount of Interest charged by the bank during moratorium is calculated on worst 窶田ase scenario assuming that 1st & 2nd installment during year 1 are disbursed during April. However, in practice branches shall calculate the interest during moratorium on actual disbursement basis. 窶｢
Minimum -
Rs 0.06 Lacs
Maximum -
Rs 10.00 Lacs. Security
Amount of Loan Upto Rs 0.50 lacs.
Security to be furnished Hypothecation of the Asset created.Third Party Guarantee of one person.
Above Rs 0.50 lacs upto Hypothecation of the Asset created.Third Party Rs.3 lac/Guarantee of two persons Above Rs 3 lacs to Rs 10 Hypothecation of the Asset created lacs. Mortgage of unencumbered immovable property. .
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Serving to empower.
Disbursement The loan facility sanctioned under the scheme shall be disbursed as follows: a) 90% of loan amount including Margin but excluding amount earmarked for interest charged during moratorium to be disbursed in 2 installments in the Year 1 during the months of April –August as per the requirements of the grower. b) 10% of loan amount including Margin but excluding amount earmarked for interest charged during moratorium to be disbursed during April-August of 2ndyear c) Amount earmarked for interest to be released on yearly basis for servicing of interest during moratorium. Interest for remaining period of moratorium, i.e. 8 months shall be applied as well as disbursed at the end of the moratorium period. Moratorium There shall be an initial moratorium of 20 months from the date of disbursal of loan. Interest for the moratorium shall be sanctioned. Repayment of loan The bank provides with two options for the repayment of loan.these are:Option 1 : Interest for the moratorium period shall be capitalized. At the end of the moratorium period, the outstanding loan amount inclusive of capitalized interest shall be paid in three yearly installments in the ratio of 20, 35 & 45% with the first installment to be paid immediately after completion of the moratorium period. Interest for the period after initial moratorium shall be paid along with the annual installments. Option 2 : This option shall be similar to the first option except for the difference that here a borrower shall pay the interest portion every month after the moratorium period till the liquidation of the loan at the time of payment of 3rd yearly installment Rate of interest Loan Amount
Interest rate
Upto Rs.2.00 lacs
PLR -3.0% i.e 11.50%
Above Rs.2.00 lacs & Upto Rs. 10.00 lacs
PLR -2.0% i.e 12.50%
The interest shall be on fixed basis and shall be compounded annually. Interest application shall be on yearly basis.
.
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Serving to empower. SCHEMES OF J&K BANK J&K Bank offers a huge number of schemes.These includes SUPER EARNER DEPOSIT SCHEME The scheme has been designed to provide customers with the option of depositing under variable interest rate.. The floating rate of interest applicable to the deposit is usually higher than fixed rate deposits and is reviewed after periodical intervals depending Upon the market conditions of interest is re-set it shall apply to the deposit from the date of change notified by the Bank for the residual period of the deposit till its maturity or next review whichever is earlier. Under the Scheme an amount of Rs.1 000/- and above in multiples of Rs.100 for period of one year and above up to 10 years can be placed with the Bank. The scheme carries simple rate of interest and if desired can be payable to the depositor quarterly. SUPER REINVESTMENT DEPOSIT SCHEME The scheme will work exactly on the analogy of Super Earner Deposit Scheme with the only difference that under this scheme interest shall be compounded quarterly and payable with principle on maturity. The other features of the scheme will be the same as that of Super earner Deposit Scheme. CASH CERTIFICATE SCHEME Features It is a fixed deposit scheme. But the only difference with the traditional fixed deposit scheme is that the minimum period of deposit is one year and the amount to be deposited should be in multiples of Rs.l00/=. Interest calculations The interest on the deposit is compounded quarterly, which ensures more and more return on the deposit payable on maturity. Loan facility
Loan can be availed against the deposit upto 90 per cent of the amount deposited with the bank under this scheme.
.
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Serving to empower. CHILDCARE DEPOSIT SCHEME Main Attractions The main attraction of the scheme is the accidental insurance cover, which will be now operational from the date of opening of account. Further, the sum assured is linked to the amount of monthly installment in the account in the following manner: Monthly Installment
Sum Assured
Rs. 100 - Rs. 400
Rs. One Lac
Rs. 500 - Rs. 900
Rs. Two lacs
Rs. 1000 and above
Rs. Three lacs
The Depositor/Guardian/Parent maintaining one or more accounts under the scheme in one or more branches in his own name/name of the same or different wards/minor children will be entitled to the insurance benefits under each cover granted with each deposit. However, the amount of claim payable shall not exceed 60 months income of depositor/parent/guardian as applicable, under all policies. The attaining of age of majority by minor will not affect the benefits entitled to him or her under the insurance cover and insurer will be liable for all claims in respect of such accounts subject to a maximum of 60 months income of the depositor/parent/guardian as applicable under all policies. Payment before Maturity In case any depositor desires payment before maturity it will be allowed but the penalty shall be 2% instead of 0.25% if the deposit has remained for less than 3 years with the bank but after 3 years deposit will be dealt as per the norms in vogue for other term deposits. Loan against Deposit Loan facility can be provided after deposit entry into the 2nd phase, bank can allow loan not exceeding 90% of the amount accumulated at the time of first phase.
FIXED DEPOSIT SCHEME It is a term deposit that pays interest at the end of each calender quarter. It is suited to the persons who wish to keep their invested money intact and require quarterly income to meet their requirements. It can be opened with a deposit of Rs.I00/= and above for different .
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Serving to empower. maturities ranging from 7 days to 10 years. Who Can Open? A person in his/her name. More than one person in their joint names. Minor through guardian or himself if above 14 years of age. Blind Persons. Associations, clubs, Societies, Trusts etc. Loan Facility Loan can be availed against the Fixed Deposit up to 90 per cent of the amount deposited with the Bank.
FLEXI DEPOSIT SCHEME OBJECTIVE The Flexi Deposit Scheme (FDS) Designed to allow the depositor automatic access to ob1ain credit facility against the deposit account up to the 90 per cent of the Principal and interest accrued amount without making any separate requisition for the same and without execution of any documents.
SALIENT FEATURES Under the scheme deposit of Rs.l000/- and above in multiples of Rs.l00/shall be accepted by the bank. The bank shall hold the deposit in the Re-investment plan. TERM OF DEPOSIT The deposit can be accepted for a period of six months to ten years. RATE OF INTEREST The amount invested in the scheme shall attract rate of interest prescribed by the bank on domestic term deposits from time to time. LOAN AGAINST DEPOSIT The scheme has built in mechanism to allow automatic loan drawls against the security of the deposit and interest accrued thereon without any additional documentation The credit facility shall be called "Flexi Credit Facility A/C". .
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Serving to empower. ►The withdrawals in the "Flexi Credit Facility Account shall be permitted through Debit notes/letter of authority. ► Interest rate of 2 per cent above the deposit shall charged on flexi Credit facility. ►The limits in the Flexi Credit Facility account shall be revised with each quarterly accruals of interest on the deposit. ►The depositor shall be entitled to raise the Flexi Credit facility at the issuing branch of the F1exi Deposit Receipt only.
GIFT CHEQUE SYSTEM ► Gift Cheques are available in the denominations of Rs.I0l, Rs.201, Rs.501, Rs.I00I and Rs.5001 in MICR format. ►The beneficiary of the Gift Cheque can invest the amount of the cheque in any of the Term Deposit schemes of the bank. In that case, as a value addition, the date of issue of Gift Cheque could be given as effective date of the deposit. Under the Term Deposit Scheme to entitle the beneficiary to earn interest from the date of purchase of Gift Cheque. ►At the formal request of the original purchaser, Gift Cheques can be paid by cancellation at the issuing branch against surrender of the original one after taking normal procedures.
VALIDITY The Gift Cheque shall be valid for a period of six months only from the date or its issue. However, it can be revalidated for a further period of 3 months to raise the total tenure to 9 months. PAYMENT Gift Cheque is payable at any branch and at par.
MILLENNIUM DEPOSIT SCHEME OBJECTIVE The scheme is aimed at to enable the depositor to draw a part of the deposit placed with the hank for a fixed period, in the event of an exigency. SALIENT FEATURES .
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Serving to empower. Under the scheme a deposit of Rs.1 0001- and above but in the multiples or Rs.500/- can he accepted by the bank. The bank shall hold deposit in the units or Rs.500/- each. TERM OF DEPOSIT The deposit can be accepted for a period of six months to ten years. RATE OF INTEREST As applicable from time to time.
WITHDRAWAL OF UNITS DURING THE TERM OF THE DEPOSIT Under the scheme the depositor shall be at liberty to withdraw any number of units during the currency of the deposit but not before completion of 45 days. However, balance in the account in no case should fall below the minimum prescribed limit of Rs.l000/-. The value of number of units withdrawn during the term of deposit shall attract the rate of interest applicable for the period it has actually remained with the bank with quarterly rests having compounding effect.
PREMATURE PAYMENT At the discretion of the bank, depositor can seek withdrawal of the entire amount of the deposit in one lump or in units before the completion of the term. In such case the deposit shall attract interest rate applicable for the period it has remained with the bank less by 0.25 per cent for deposit up to Rs.5.00 lac and 0.50 per cent above Rs.5.00 lacs. However, this is subject to guidelines issued by the bank from time to time. LOAN FACILITY The depositor can avail loan facility against the value outstanding units and the accrued interest with a minimum margin of l0 per cent. The interest chargeable in such loan account is 2 per cent above the contracted rate on the deposit. However, these are subject to norms as prescribed by bank from time to time.
DEPOSITERS PENSION SCHEME FEATURES The scheme has been specially devised for persons who do not enjoy pension benefits either .
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Serving to empower. from their present employers or their present business. Under this scheme, a depositor can earn a regular income by way of pension every month and also a fund to fall back upon in case of urgent need. Under this scheme, a depositor can deposit any sum in multiples of Rs.50/- for periods of 84, 105 or 111 months and from the commencement of 86th, I07th and I 13the month, the depositor will receive a regular monthly pension.
MEHENDI DEPOSIT CERTIFICATE BACKCROUND AND MATURITY SLABS: The scheme has five maturity slabs of 5,7,10,12 and 15 years. The depositor is required to choose any of the maturity slabs. The amount payable under the scheme is predetermined as Rs.25,000/-, Rs.50,000/- and Rs.l,00,000/-. However, the amount or deposit will vary depending upon period and interest rate applicable at the time or making the deposit. therefore the period, lesser will be the amount to be deposited. III. PAYMENT BEFORE MATUTRITY: The deposit can be paid before maturity without levying any penalty. IV. LOAN AGAINST DEPOSITS: Loan facility as admissible under other term deposit schemes shall be allowed under this scheme. V. TARGET GROUP: The target group will be young parents securing an amount for marriage or education of a girl child. It has been seen that at the time of birth of girl child or thereafter every parent is for a lookout to save some amount for marriage or education of the girl child. We can exploit this segment by strategic marketing efforts VI. MAIN ATTRACTION: The scheme provides for an in-built mechanism of Personal Accidental Insurance Cover. The accidental cover shall be equivalent to the amount payable under the scheme to he selected by depositor and shall remain in force till maturity or the deposit. The insurance cover shall be available to depositors free of charge.The only difference being that in the instant case sum assured is equal to amount payable .
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Serving to empower.
GENERAL INSURANCE MOTOR VEHICLE INSURANCE: INTRODUCTION Technology has made our daily life simpler in various ways. Motor Vehicle is an invention which has made daily commuting easy. It is convenient and fast and saves our time. Though it is easy to own a vehicle it is expensive maintaining a motor vehicle especially in case of damage caused to the vehicle due to some unavoidable circumstances or accidents. Bajaj Allianz’s Motor Vehicle Policy helps to maintain vehicle in such situations. WHAT DOES THE BAJAJ ALLIANZ MOTOR POLICY COVER? The policy offers the following scope of over: Section 1: undertakes to reimburse the expenses incurred for: Repair / replacement of the parts of the vehicle. To pay the market value of the vehicle in case of a total loss provided that the originating cause of such damage is an accident, including theft Section 2: Is compulsory it covers the legal liability to third party personal injury and property damage arising out of an accident involving the insured vehicle. SHOP KEEPERS: INTRODUCTION: This policy is specifically designed to all the risks and contingencies faced by a shopkeeper. It provides protection for the property and the interests of the insured and his partners in the business venture. COVERAGE Fire & allied perils: . This policy safeguards against the losses that can arise due to a fire or risks that are stated below: Fire Lightning Explosion/ Implosion Aircraft Damage Riot, Strike, Malicious Damage Storm, Cyclone, typhoon, Tempest, Hurricane, Tornado, Flood and Inundation
Impact
Damage Subsidence and Landslide including rock slide Bursting and/or overflowing of Water Tanks, Apparatus and pipes Missile testing operations Leakage from Automatic .
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Serving to empower. Sprinkler Installations Bush Fire Earthquake EXCLUSION: It does not cover Katcha constructions, money & valuables. Any loss or damages arising due to Terrorist activities is not covered NOTE: Terrorism Cover Extension can be opted for extra premium.
LIFE INSURANCE POLCIES MET BHAVISHYA: A) Flexible money-back plan It’s only obvious then, that one will want nothing but the very best for them. Unfortunately, it’s not always possible for everything to go perfectly according to plan. Education, for instance, is getting increasingly expensive. It is more so as the children grow up or when they want to pursue specialized courses from premier institutions. It’s been estimated that at the current inflation rate of 6% p.a., the cost of college education will double over the next 12 years. It’s at times like these that one wishes that he had access to a friendly financial advisor and assured financial resources. Of course, insurance would ensure a secure future for ones child. But not all policies are designed with ones specific needs in mind. That’s what makes Met Bhavishya so different and so special. A parent will be life assured under this plan, the benefits are so designed as to meet their child’s (named child) expenses at points of time where funding is required.
METLIFE INDIA In India, MetLife is partnered with Jammu & Kashmir Bank, M Pallonji & Co. and other private investors. MetLife India is headquartered in Bangalore with offices in 7 major India cities and an additional 1000 outreach points through its channel partners. MetLife India is committed to building a highly professional agency distribution system dedicated to helping its customers plan for their financial security with customised solutions. MetLife India is driven by the principles of uncompromising integrity and the highest level of professionalism. Its mission is to work with utmost, fairness and financial prudence in all its dealings.
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Serving to empower. METLIFE INC. MetLife, ranked 37 on the fortune 500 list (April 2003), is one of the world’s largest, strongest and most respected financial Organisations. MetLife has been delivering reliable, high quality service to customers since 1868. MetLife is the #1 insurer in the US with $2.4 trillion of life insurance in force (as of December 2002). MetLife companies serve approximately 12 million individuals in the US as well as the employees of the 88 of the Fortune 100 companies. Headquartered in New York, MetLife operates through its affiliates and subsidiaries in 12 countries across the Americas, Europe and Asia. Statutory Warning: Section 41 of the Insurance Act, 1938 states: No person shall allow or offer to allow, either directly or indirectly, as an inducement to any person to take out or renew or continue an insurance in respect of any kind of risk relating to lives or properly in India, any rebate of the whole or part of the commission payable or any rebate of the premium shown on the policy, nor shall any person taking out or renewing or continuing a policy accept any rebate, expect such rebate as may be allowed in accordance with the published prospectus or tables of the insurer. Any person making default in complying with the provisions of this section shall be punishable with fine which may extend to five hundred rupees.
B) PAR ENDOWMENT: THE IDEAL POLICY FOR THOSE WHO: Want to share in the future prosperity of the company by getting reversionary and terminal bonuses on the face amount of the policy , Want their children’s predictable expenses met through careful planning , Want to pay a affordable premiums , Want tax advantages HOW DOES THE POLICY WORK? Met junior (Par Endowment) offers the following guarantees: BONUS – Face amount increases in line with the reversionary bonus rates, as and when declared by the Company and strong probability of a terminal bonus after 10 years Life insurance coverage for the term of the policy Fixed premium amount Choice of policy terms – 15, 20, 25, or 30 year . At .
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Serving to empower. the same time help inculcate a savings culture in children so that even ones grandchildren benefit.
C) MET Mortgage Protector SP: Single Premium Mortgage Protector Plan THE IDEAL POLICY FOR THOSE WHO Want to ensure dependant aren’t burdened with debt with in case of untimely death of policyholder Want to pay affordable premiums Want tax advantages HOW DOES THE POLICY WORK? MET Mortgage Protector SP offers the following guarantees: Coverage for the term of the policy The amount of coverage will be equivalent to the outstanding loan at the beginning of each policy year The policy schedule clearly shows the amount of coverage Fixed premium amount Single premium There is guaranteed partial refund of this single premium in the event of prepayment of mortgage
D) MET 100 Limited Pay Whole Life Insurance THE IDEAL POLICY FOR THOSE WHO: Want Lifetime protection, pay affordable premiums Want access to cash value of the policy Want tax advantages HOW DOES THE POLICY WORK? MET 100 offer the following guarantees: Coverage until the age of 100 Fixed premium amount Fixed payment period (choose your term of payment –15, 20 or 25 years based on current age) Cash value of the policy during the life of the policy ones legacy is protected .
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Serving to empower. until the age of 100 or until death – whichever comes first and on the 100th birthday gives the insurance amount.
E) MET Platinum (ENDOWMENT): (Participating Endowsment Assurance for face amounts above Rs. 3 lakh) THE IDEAL POLICY FOR THOSE WHO Want to share in the future prosperity of the company by getting reversionary and terminal bonuses on the face amount of the policy Want to pay the lowest premiums in this class Want protection Want access to cash value of the policy Want tax advantages HOW DOES THE POLICY WORK? MET Platinum (Endowment) offers the following: Lowest premiums in its class BONUS – Face Amount increases in line with the Reversionary bonus rates, as and when declared by the Company and strong probability of a terminal bonus after 10 years Guaranteed face amount Coverage for the term of the policy Fixed premium period (choose your term of payment – 15, 20, 25 or 30 years based on current age) Cash value of the policy – during the life of the policy, after the first 3 years – (90% of cash value can be taken as loan on approval) The family can enjoy support, live with the peace of mind. If the unforeseen happen during the term of the policy, family is looked after.
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Serving to empower. SREVICES: JK bank offers incredible services to its customers. These include; SUPPORT SERVICES •
Anywhere Banking
•
Internet Banking
•
SMS Banking
•
ATM Services
•
Debit Cards
•
Credit Cards
•
Merchant Acquiring
DEPOSITORY SERVICES •
Demat Account
•
Other Services
THIRD PARTY SERVICES •
Mutual Funds
•
Insurance Services - Life & Non Life
•
Remittance Services
OTHER SERVICES •
Real Time Gross Settlement (RTGS)
•
National Electronic Fund Transfer (NEFT)
DEPOSITORY SERVICES SCHEME OF J AND K BANK •
Dematerialisation (Demat)
•
Stock Broking through INVESTMART an initiative of ILFS
•
Depository
•
Depository Participant
•
sMarket transaction
•
Off-market transactions
•
Pledge of securities
•
Rematerialisation (remat) .
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Serving to empower. CREDIT CARD OF JK Initially there are three types of Credit Cards issued by Jammu and Kashmir Bank. They are as mentioned below: •
Gold Card
•
Silver Card
•
Blue Card
All the above cards is also available with photo along with a family/add on Cards. The Card is accepted by all those Merchant Establishments who honour MASTER cards. ATMs linked with MASTER cards accept JK Bank Credit Card. Charges/fee for issue of Cards: Nature of Fee
Blue Card
Silver Card
Gold Card
Entrance Fee
Nil
Nil
Nil
Annual Fee
Rs. 500.
Rs.700.
Rs.1000.
Renewal Fee
Rs. 300.
Rs.500.
Rs.700.
Add-on Card
Rs.200.
Rs.300.
Rs.500.
.
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Serving to empower. FINANCIAL STATEMENTS OF JK BANK: The Financial statements of JK Bank can give us the handful ideas about the present status of the organisation. BALANCE SHEET Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Mar ' 04
Equity share capital
48.49
48.49
48.49
48.49
48.25
Share application money
28.10
-
-
-
-
Preference share capital
-
-
-
-
-
Reserves & surplus
2,232.34
1,960.24
1,750.98
1,616.91
1,545.49
Secured loans
-
-
-
-
-
Unsecured loans
28,593.26
25,194.29
23,484.64
21,644.97
18,661.38
Total
30,902.19
27,203.03
25,284.11
23,310.37
20,255.12
Gross block
471.32
433.63
412.23
381.45
331.66
Less : revaluation reserve
-
-
-
-
-
Less : accumulated depreciation
289.10
256.94
223.80
184.88
141.46
Net block
182.22
176.69
188.42
196.57
190.20
Capital work-in-progress
9.79
6.76
6.29
5.83
5.87
Investments
8,757.66
7,392.19
9,002.34
9,089.23
8,451.10
486.47
377.19
481.41
493.12
356.89
1,102.02
823.31
900.94
850.30
653.63
Sources of funds Owner's fund
Loan funds
Uses of funds Fixed assets
Net current assets Current assets, loans & advances Less
:
current
liabilities
provisions
&
.
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Serving to empower. Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Mar ' 04
-615.55
-446.12
-419.53
-357.18
-296.74
Miscellaneous expenses not written -
-
-
-
-
Total
8,334.12
7,129.52
8,777.53
8,934.45
8,350.44
,603.50
2,002.79
1,737.72
1,415.07
1,795.64
Material consumed
-
-
-
-
-
Manufacturing expenses
-
-
-
-
-
Personnel expenses
225.77
220.07
192.40
170.86
168.38
Selling expenses
7.72
4.94
3.06
4.53
5.17
Adminstrative expenses
167.96
185.86
192.87
133.75
112.48
Expenses capitalized
-
-
-
-
-
Cost of sales
401.45
410.87
388.33
309.15
286.04
Operating profit
578.25
460.44
306.86
152.93
608.24
Other recurring income
56.51
38.62
41.23
35.02
27.31
Adjusted PBDIT
634.76
499.06
348.09
187.95
635.55
Financial expenses
1,623.79
1,131.48
1,042.53
952.99
901.36
Depreciation
32.16
33.14
38.92
43.42
36.80
Other write offs
-
-
-
-
-
Adjusted PBT
602.60
465.92
309.17
144.53
598.75
Tax charges
218.16
140.71
74.84
20.86
170.00
Adjusted PAT
360.00
274.49
178.29
123.03
406.33
Non recurring items
-
-
-
-7.96
-
Other non cash adjustments
-
-
-
-
-
Reported net profit
360.00
274.49
178.29
115.07
406.33
Total net current assets
PROFIT LOSS ACCOUNT Operating income Expenses
.
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Serving to empower. Mar ' 08
Mar ' 07
Mar ' 06
Mar ' 05
Mar ' 04
Earnigs before appropriation
360.00
274.49
178.29
115.07
406.33
Equity dividend
75.14
55.75
38.78
38.78
48.50
Preference dividend
-
-
-
-
-
Dividend tax
12.77
9.47
5.44
5.07
6.21
Retained earnings
272.09
209.26
134.07
71.22
351.62
SHAREHOLDING PATTERN AS ON:
30-06-2009
31-03-2009
31-12-2008
Face value 10.00 No.
Of %
No.
Of %
No.
Of %
Shares
Holding Shares
Holding Shares
Holding
Indian Promoters
2577526
53.17
2577526
53.17
2577526
53.17
Sub total
257756
53.17
2577526
53.17
25775266
53.17
248581
0.51
251581
0.52
251581
0.52
FII's
1541764
31.80
1503356
31.01
1529703
31.55
Sub total
1677115
34.60
1636657
33.76
1671535
34.48
643239
1.33
1085938
2.24
1148134
2.37
218227
0.45
237007
0.49
202211
0.42
Promoter's holding
Non promoter's holding Institutional investors Banks Fin. Inst. and Insurance
Other investors Private
Corporate
Bodies NRI's/OCB's/Foreign .
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Serving to empower. No.
Of %
No.
Of %
No.
Of %
Shares
Holding Shares
Holding Shares
Holding
Others
16971
0.04
34051
0.07
2148
-
Sub total
878437
1.81
1356996
2.80
1352493
2.79
General public
5052904
10.42
4978973
10.27
4634668
9.56
Grand total
4847782
100.00
4847782
100.00
4847782
100.00
SHAREHOLDING PATTERN 60.00%
53.17%
53.17%
53.17%
50.00% 40.00%
34.60%
33.76%
34.48%
promoters
30.00%
Non-Promoters Other investors
20.00% 10.42%
10.27%
9.56%
General public
10.00% 0.00% 30-06-2009
31-03-2009
31-12-2008
.
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Serving to empower. GROWTH SHOWN BY JK BANK IN THIS QUARTER
The Jammu and Kashmir Bank reported a good increase in standalone net profit for the quarter ended June 2009. During the quarter, the profit of the bank rose 23.78% to Rs 1,170.50 million from Rs 945.60 million in the same quarter previous year. Interest earned for the quarter rose 19.03% to Rs 7,753.70 million, while total income for the quarter rose 24.40% to Rs 8,910.50 million, when compared with the prior year period. It posted earnings of Rs 24.15 a share during the quarter, registering 23.85% growth over prior year period.
Quarterly Results - Standalone (Rs in mn) As at
Jun – 09
Jun - 08
%Change
Interest Income
7,753.70
6,514.20
19.03
Net Profit
1,170.50
945.60
23.78
Basic EPS
24.15
19.50
23.85
Shares of the bank gained Rs 17.9, or 4.06%, to trade at Rs 458.50. The total volume of shares traded was 390.00 at the BSE .
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Serving to empower.
CHAPTER-IV
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Serving to empower. WORKING CAPITAL MANAGEMENT Working capital, also known as net working capital or NWC, is a financial metric which represents operating liquidity available to a business. Along with fixed assets such as plant and equipment, working capital is considered a part of operating capital. It is calculated as current assets minus current liabilities. If current assets are less than current liabilities, an entity has a working capital deficiency, also called a working capital deficit. WorkingCapital = CurrentAssets − CurrentLiabilities Therefore, working capital refers to the excess of current assets over current liabilities. Management of working capital is concerned with the problems that arise in attempting to manage the current assets, the current liabilities and the interrelationship that exists between them. In other words, it refers to all aspects of administration of both current assets and current liabilities. The basic goal of working capital management is to manage the current assets and current liabilities of a firm in such a way that a satisfactory level of working capital is maintained, i.e. it is neither inadequate nor excessive. This is so because both inadequate as well as excessive working capital implies idle funds which earns no profit for the business and inadequacy of working capital may lead the firm to insolvency. Working capital management policies of a firm have great effect on its profitability, liquidity and structural health. A sound working capital management policy is one which ensures lowest cost, adequate liquidity and sound structural health of the organization.
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Serving to empower. PRINCIPLES OF WORKING CAPITAL MANAGEMENT The following are the main principles of a sound working capital management policy: 1.
Principal of Risk Variation
Risk in this context, refers to inability of a firm to meet its obligations as and when they become due for payment. Larger investment in current assets with less dependence on shortterm borrowing increases liquidity reduces risk and thereby decreases the opportunity for a loss. To the contrary, less investment in current assets with greater dependence on short-term borrowings increases risk, reduces liquidity as well as profitability. Thus there is a definite and inverse relationship between the degree of risk and profitability. A conservative management prefers to minimize the risk maintaining a higher level of current assets or working capital while a liberal management assumes greater risk by reducing working capital. However the goal of management should be to establish a suitable tradeoff between profitability and risk.
2.
Principle of Cost of Capital.
Cost of raising capital is different for different sources of raising working capital finance. It is generally dependent on the degree of risk involved in raising capital from a particular source. Higher the risk, higher is the cost and lower the risk, lower is the cost. A sound working capital management should always try to achieve a proper balance between these two. 3. Principle of Equity Position. This states that the amount of working capital invested in each component should be adequately justified by a firm’s equity position. Every rupee invested in the current asset should contribute to the net worth of the firm. Thus this principle is concerned with planning the total investment in current assets. The level of current assets may be measure with the help of two ratios. i.
Current assets as a percentage of total assets.
ii.
Current assets as a percentage of total sales.
While deciding about the composition of the current assets, the financial manager may .
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Serving to empower. consider the relevant industrial average. 4. Principle of Maturity of Payment. This principle states that a firm should make every effort to relate maturities of payment to its flow of internally generated funds. It is concerned with planning the sources of finance for working capital. Maturity pattern of various current obligations is an important factor in risk assumptions and risk assessments. Generally, shorter the maturity schedule of current liabilities in relation to expected cash inflows the greater is the inability to meet its obligations in time.
NATURE OF WORKING CAPITAL REQUIREMENTS The working capital requirements of a concern can be classified as: 1.
Permanent or fixed or regular working capital requirements.
2.
Temporary or variable working capital requirements.
Permanent working capital is that minimum amount which should always be deployed to carry the business operations without interruption. This part of working capital should generally be financed from the fixed capital sources. Temporary working capital is that amount which is required for the seasonal demands and some special exigencies such as rise in prices, strikes, extensive advertisement to capture more markets, etc. It should be financed from short term sources of capital. Both kinds of working capital - permanent and temporary are necessary to facilitate production and sale through the operating cycle. Working Capital Cycle Cash flows in a cycle into, around and out of a business. It is the business's life blood and every manager's primary task is to help keep it flowing and to use the cashflow to generate profits. If a business is operating profitably, then it should, in theory, generate cash surpluses. If it doesn't generate surpluses, the business will eventually run out of cash and expire.. The faster a business expands the more cash it will need for working capital and investment. The cheapest and best sources of cash exist as working capital right within business. Good management of working capital will generate cash will help improve profits and reduce risks.
.
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Serving to empower. Bear in mind that the cost of providing credit to customers and holding stocks can represent a substantial proportion of a firm's total profits. There are two elements in the business cycle that absorb cash - Inventory (stocks and workin-progress) and Receivables les (debtors owing you money). The main sources of cash are Payables (your creditors) and Equity and Loans.
Sources of Additional Working Capital Sources of additional working capital include the following: Existing cash reserves Profits (when you secure it as cash!) Payables (credit from suppliers) New equity or loans from shareholders Bank overdrafts or lines of credit Long-term loans To comment upon the working capital management and profitability of J&k bank, the technique of ratio analysis is adopted. The following two ratios have been calculated for the said purpose. 1. Current ratio. 2.
Working capital turnover ratio. .
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Serving to empower. Current Ratio: The current ratio is an indicator of a firm’s short term solvency. A firm, to survive on a continuing basis, should maintain sufficient liquidity. As a rule of thumb, 2:1 is considered to be an ideal current ratio. The idea of having double the current assets as to current liabilities is to provide a cushion against possible losses and to ensure a smooth day to day functioning of the firm. There is, however, nothing very sacrosanct about the 2:1 ratio. What is more important is the quality of current assets, how fast and to what extent can they be converted into cash. 5 Yearly Trend of Current Ratio of J&k bank
Years
Current Assets
2004 2005 2006 2007 2008
356.89 493.12 481.41 377.19 486.47
Current Liabilities 653.63 850.30 900.94 823.31 1102.02
Current
Ratio
0.5:1times 0.6:1times 0.5:1times 0.5:1times 0.4:1times
A relatively high current ratio is an indication that the firm is liquid and has the ability to pay its current obligations in time and when they become due. On the other hand, a low current ratio represents that the liquidity position of the firm is not good and the firm shall not be able to pay its current liabilities in time. The above table indicates that the bank has low ratio and will not be able to pay its increasing liabilities. In FY 2004 it was 0.5:1 and then increases to 0.6:1 in FY 2005 and in FY 2008 it further decreases to0.4:1. The reason of decrement in the current ratio is because current liabilities is highly exceeding over current assets.
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Serving to empower. 1200 1000 800 Current Assets
600
Current Liabilities
400 200 0 2004
2005
2006
2007
2008
Working Capital Turnover Analysis: The amount of working capital is sometimes used as a measure of a firm’s liquidity. It is considered that between the two firms, the one having the larger amount of working capital has the greater ability to meet its current obligations. Working capital turnover analysis is, therefore, used to measure the efficiency with which the firms are using their working capital. For this purpose, working capital turnover ratio, which indicates the velocity of the utilization of net working capital, is worked out. A higher ratio indicates efficient utilization of working capital. In the following lines a comparative statement of working capital turnover ratio of PTL is produced. Net Working capital Of J&K Bank (in lacs) Years
Current Assets
2004 2005 2006 2007 2008
356.89 493.12 481.41 377.19 486.47
Current Liabilities 653.63 850.30 900.94 823.31 1102.02
Net working capital -296.74 -357.18 -419.53 -446.12 -615.55
The net working capital of J&K Bank is tremendously decreasing and has reached the negative values because of the increasing current liabilities and is unable to meet its short term liabilities. Therefore the bank has negative net working capital. This indicates that the bank is not utilizing its fixed assets efficiently. This may adversely affect its profitability .
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Serving to empower. position.
0 -100
2004
2005
2006
2007
2008
-200 -300 Net Working Capital
-400 -500 -600 -700
Working Capital Turnover Ratio of J&K Bank Years
sales
2006 2007 2008
2064.16 2434.23 2988.12ss
Net Working capital -419.53 -446.12 -615.55
Working capital ratio -6.9times -5.5times -3.4times
It is very strange to analyze such the working capital turnover ratio of J&K Bank as its net working capital is negative. The sales of the firm are also decreasing. So the firm will not be able to meet its short term liabilities. This consistent negative ratio will shrink the current assets of the bank relative to its total assets.
.
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Serving to empower.
0 -1
2006
2007
2008
-2 -3 -4
W.C. Turnover Ratio
-5 -6 -7 -8
Profitability Ratios of J&K Bank The primary objective of the business is to earn profit. Profit earning is considered for the survival of the business. So to see the profitability position of the business, profitability ratios are used to interpret the profitability of the concern. So profitability ratios are the financial metrics that are used to assess a business's ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well. The following profitability ratios have been used to interpret the profitability of J&K Bank; Operating Profit ratio: This ratio tells us about the earning capacity of the firm on the basis of its business operations and from earnings from the other sources. It shows whether the business is able to stand in the market or not. It is calculated as; Operating profit ratio=Operating profit/Sales*100 Operating Profit Ratio of J&K Bank Year
Operating Profit
Sales
Operating Profit ratio
2006
306.86
2064.16
15%
2007
460.44
2434.23
18%
2008
578.25
2988.12
19%
.
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Serving to empower. The operating Profit of J&K Bank is not high but is showing an increase from the FY06 to FY08.This shows that the efficiency of the business is not high and the bank is generating revenue from the comprehensive sources other than its business operations. Operating profit ratio 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 2006
2007
2008
Net Profit ratio This ratio indicates the relationship between net profit and sales and is calculated as; Net Profit ratio=Net profit after tax/Net sales*100 This ratio is the percentage of sales dollars left after subtracting the Cost of Goods sold and all expenses, except income taxes. N.P Ratio (in lacs) of J&K Bank Year
Profit after tax
Net Sales
Net Profit ratio
2006
178
2064.16
12%
2007
274
2434.23
11%
2008
360
2988.12
9%
.
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Serving to empower.
Net operating ratio 14% 12% 10% 8% 6% 4% 2% 0% 2006
2007
2008
If we look at the trend of ratio, it is decreasing from 12% to 9% hence the profitability. Thus the bank is not able to achieve a satisfactory return on its investments as the profit is not sufficient. The bank does not have the high capacity to face the adverse economic conditions. WORKING CAPITAL FINANCING BY J&K BANK
FINANCIAL VIABILITY No financial institution would sanction the financing of working capital unless it is satisfied about the financial viability of the company. As far as J& K Bank is considered here evaluation of Borrower Company is done on the basis of following ways: 1. Industry analysis 2. Company analysis The evaluation relates not only to profitability but also to cash flows to determine the capacity of the firm to pay interest charges and repayment of debt installments. If borrower had already taken the debt from the company in past years then its past performance is checked whether the borrower had repayed the debt amount or not. INDUSTRY ANALYSIS Projections are made that after IT industry, the herbal industry will be India’s second .
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Serving to empower. biggest revenue earner. For globalization the ist phase is to focus on medical plants and formulation, which can stand the scrutiny by any system of assessment and standardization process. The global market for herbal products is exploding. It is estimated to touch US $5 trillion by 2020.Sales of herbal products was in the vicinity of 21 billion US dollars The market is huge and is growing. As far the demand of the herbal products in Kashmir is concerned, currently four out of ten people are using it. COMPANY ANALYSIS In company analysis whole information about company is analyzed like what is the demand of its products in the market
by doing market analysis of the company, what is its
profitability by analyzing its financial statements, its effect on environment whether it is pollution free or causing any kind of pollution to the environment by doing its ecological analysis,determing its effect on economy whether it helps in decreasing employment or it is actually increasing it .Its effect on whole economy.
.
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Serving to empower. LIVE CASE STUDY ON To study the way of financing of working capital by JK Bank,I came across a live project that needed to be financed.The purpose of the project is to manufacture the herbal products from locally (Kashmir)available herbs in industrial estate,Anchidora Anantnag ,Kashmir under the name M/S “XYZ�.The firm is a Proprietary concern of Dr Rahul Sharma. The global market for the aurvedic products is immensely expanding and is about to touch $35 trillion by the year 2020.The major players in this line are M/S Dabur India Ltd.,M/s.Zandu Pharmaceuticals Works Ltd., M/S Vaidyanath Ayurveda Ltd.Maharishi Ayurveda corpn. Etc. There is no such unit in the Kashmir valley so the unit is to be established for manufacturing ayurvedic products for the treatment of a no. of ailments like cataract, headache, myopia, pus in ear etc. For this purpose, the party requested for the working capital of Rs 6o Lacs and the term loan facility of Rs 67.79 Lacs. But my analyzing the various parameters of the project like requirements of the raw material, capacity utilisation, projected sales, projected profitability statements, the unit will be provided with the working capital of Rs 20.00 Lacs and the term loan of Rs 12.00 Lacs.
ABOUT PROMOTER M/S Shapoo Herbal Products is a proprietary concern of Dr. Gh. Mohd Shapoo, resident of Anantnag,Kashmir is a retired B.A.M.S doctor.To manage the affairs of the unit,he is being selected by Enterpreneurship Developed Institute Of India for one year diploma in business enterprenuership under their,OLPE Scheme in collaboration with friedrich-Naumann-shifting Germany sponsored by national Science And Technology Of India.With his educational background he is expected to do well to emplement and manage the affairs of the business successfully. RAW MATERIAL:The main raw materials needed for the preparation of ayurvedic drugs are:Tulsi,Asparagus,Satavar,Indiangooseberry,licorice,guduchi,haldi,ajwain,kokum,ashok,winter cherry,heeng,chandan,soya,saffron,senna,vaidang,ajwain,kuth safad masali etc.which are .
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Serving to empower. readily available in the valley.The Govt. has also taken some initials to cultivate some of the herbs which the concern can easily purchase from the market from the J&K state and outside the state as well.These herbs will be curing many chronic diseases which include burns boils,baldness,bloodpressure,dermatis,jaundice,leprosy,kidney infections,nausea of all kinds and many such diseases. Process of manufacture:The process of manufacturing can be classified into the sections like: I.
II. III.
Tablets making:a.
Formulation
b.
Mixing
c.
Granulation
d.
Drying
e.
Lubrication
f.
Compression
g.
Coating Syrup making:-consists of mixing of various ingredients together. Capsules and their filling:-The materials are powdered and filled into the capsules.this
is done under pressure and sealing of the capsule wall occurs as dual and coincident operation.
PLANT AND MACHINERY: The plant and machinery needed by the unit can be categorized into sections as: I.
Tablet making section:This particular section will be includinhig a no. of small and large machines like powder and mass mixer,multi fill mill for granulation,horizontal granulator, oscillating granulator,drying oven electrical cum steam operated mode trays,fluid bed dryer,fully automatic blister packing machine etc. Capsule making section: This very section includes machines used for making capsules which include double cone blender, Rota cuve blender, stainless steel drum, Capsule filling machine, capsules counters. Ointment section: This section includes a no. of machines like Planetry mixer, wax melting kettle, fully automated tube. Syrup section:This section also works with a no.of machines which include stainless steel cylindrical tank,filter presses,industrial stirrer,emulsifier,bottle washing and .
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Serving to empower. bushing machine,batch printing machine,label gumming machine,volumetric liquid filling machine,semi automatic sealing machine etc. All the items of machinery are available to the firm indigenously and can be procured from the reputed suppliers from inside and outside the state. MANPOWER REQUIREMENT;The manpower required for the unit can be categorized into administrative/sales staff and plant and machine/maintenance staff.The details are provided as; Administrative/sales manpower Reqd.
Salary per month
1.
Manager/promoter
1
10000.00
2.
Computer operator
1
4000.00
3.
Peon
1
4.
Sales & marketing staff
2
5.
Storekeeper
1
Total Amt. 10000 40000.00
2000.00
2000.00
4000.00
8000.00
4000.00
Total
4000.00 28000.00
Plant and Machine/Maintainance staff 1.
Supervisor
2
8000.00
16000.00
2.
Operators
2
4000.00
8000.00
3.
Un-skilled staff
5
3000.00
15000.00
4.
Semiskilled
5
3500.00
17500.00
5.
Lab incharge
2
4000.00
8000.00
Total
64500.00
To sum up the manpower costs about Rs 106375.00 lacs including perks @ 15%. LAND & BUILDING:The promoter is planning to establish his unit at Anchidora, Anantnag Kashmir for which the requirement of the land will be i.00 Kanal and 5400 sq.ft.The land cost/total premium is Rs 45000.00.Apart from land the unit is planning for building of A class construction.The building will be having different working centres like production shop area,testing lab,raw material storage area,product storage area,repair centres,DG set room etc. Apart from the construction of the building the promoter is looking for parking space, inside roads, garden, .
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Serving to empower. septic tanks, and soakage pits etc. The land to building ratio will be 1:1.70. Highlights of Project: Basis: Capacity:
90,000 Kgs. of raw materials processed per year comprising of
three types of raw materials required for the manufacturing of three different types of medicines a.
12,000 kgs of Ointment.
b.
60,000 kgs of Syrup.
c.
18,000 kgs of Tablets / Capsules of other medicines.
300 Kg of Raw material per day for 300 days per year are to be purchased with following Break Up 1.
40 Kg of Ointment per Day.
2.
200 Kgs of Syrup per Day.
3.
60 Kgs Tablets/Capsules of other medicines.
Details of Raw Materials used in the production of three types of Drugs: A.
Ointment Section
Recovery percentage 80% Quantity used
40 kg per day
Recovered quantity 32 kgs per day Rate per kg Rs.200 Cost of Raw materials 8000 Cost of raw material in finished basis = Rs.250/= B. Syrup Section Recovery percentage 75 % Quantity used 200 Kgs per day. Recovered Quantity 150 kgs per day. Rate per Kg Rs.250 Cost of Raw materials 50,000 Cost of raw material in finished basis = Rs.333/= C.Tablets/ Capsules Section Recovery percentage 75% Quantity Used 60 kg per day. .
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Serving to empower. Recovered quantity 45 kg per day. Rate per Kg Rs.450 Cost of Raw materials 27,000 Cost of raw materials in finished basis S.no Name of raw materials 1. Ointment 2. Syrup 3. Tablets/Capsules Total
= Rs.600/=
Per day Consumption 40 kgs 200 kgs 60 kgs 300
Rate
No. of days
200 /kg 250/kg 450/kg 900
300 300 300 300
Total ( Rs.in lacs) 24.00 150.00 81.00 255.00
Cost of raw materials after recovery for product: A. Ointment B.Syrups C.Tablets /Capsules
Rs.250/kg. Rs.333.33/kg. Rs.600/kg.
Items manufactured:
Raw Material.Kgs
A.Ointments B.Syrups C.Tablets Capsules
Products Kg.
12,000 60,000
9,600 45,000 13,500
18,000
Total
90,000
68,100
Proposed Selling Price: (for 90,000 kgs of raw materials)
S.no 1. 2. 3.
Item produced Ointments Syrups Tablets/ Capsules Total
Packing Costs: S.No Item 1. Ointments 2. Syrups 3. Tablets/ Capsules Total
Quantity 12,000 60,000 18,000 90,000
Rate 250 333.33 600
Rs./Day 640 2250 1800
Amount (in lacs) 30.00 200.00 108.00 338.00
Rs.per year (in lacs) 1.92 6.75 5.40 14.07
.
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Serving to empower. Total costs of raw materials with packaging materials come to: Rs.352.07 lacs (Rs.338.00 lacs plus Rs.14.07 lacs. However the raw materials required as per the capacity utilization for first five years will be as: Years 50% 1st year Raw required.
materials 176.00
2nd 70% 3rd 80% 4th year 90% 5th year year 246.40 281.00 316.86
60% year 211.00
Working Capital Requirement for the First Year Working Expenses: S.no 1. 2 3. 4. 5.
Particulars Salary Electricity and D.G Set operation Overheads per Year Raw materials Debtors Total
Amount Per year Rs. 12.76 Rs. 0.84 Rs. 3.63 Rs. 176.00 Rs.36.00 Rs 260.98
Amount per Month 1.06 0.07 0.30 14.66 3.0 Rs 19.90
Out of the working capital of Rs.19.90 lacs per month the break up of the amount will be: Total Working Capital required for one month: Rs.19.90 lacs. i) Promoters Contribution 40%: Rs.7.90 lacs ii) Bank Finance 60%: Rs.12.00 lacs Total Rs.19.90 lacs.
Interest and Repayment Schedule on Working Capital loan: Rate of interest: 12.00%
Year 1. 2. 3. 4. 5.
Amount in lacs Opening Balance Repayment 12.00 1.44 1.26 10.56 1.11 9.30 0.98 8.19 0.86 7.21
Closing Balance 10.56 9.30 8.19 7.21 6.35
Interest/year 1.44 1.26 1.11 0.98 0.68
.
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Serving to empower.
Details of the project report for term loan Details of the fixed costs required for the establishment of Building and purchase of machinery and furniture and fixture are as
S.No 1. 2. 3. 4.
Particulars Land & Building Plant & Machinery Furniture and Fixtures Pre- operative & Preliminary Expenses Total
Amount (in lacs) 25.59 38.39 1.95 1.85 67.78
Land and building:-The cost of acquiring the land and constructing the building will be Rs 25.59 Lacs. Preliminary and pre-operative expenses: include establishment expenses, expenses on travelling, postage, printing, rent, rates, legal and taxes, insurance report fee and security deposits. This will be costing Rs 67.78 Lacs
Details of Running and Maintenance Costs of the Fixed Assets: 1. 2. 3.
Land & Building Plant & Machinery Furniture and Fixtures Total
Year Cost % 1. 2. 3. 4. 5. 6. 7. 8. 9.
0.50% 0.75% 1.00% 1.22% 1.50% 1.75% 2.00% 2.50% 3.00%
25.14 38.39 1.95 65.93
Total Lacs) 0.32 0.49 0.65 0.80 0.98 1.15 1.31. 1.64 1.97
(in
.
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Serving to empower. 10.
4.00%
2.63
Financial requirements as requested by the party: Out of the total project cost of Rs 67.78 Lacs,the promoters will raise the capital of Rs 26.63 Lacs ammounting to 30% contribution of the total project cost.The promoters will arrange equity from the ancestral resources; from established business or buy way of secured loans and advances from the friends and relatives. Financing pattern of fixed assets Total Fixed Capital (Term Loan) required: Rs.67.78 lacs i) Equity (Promoters contribution) 30%: Rs. 20.33 lacs ii) SFAC (Small Farmer’s Agribusiness Consortium): Rs.16.94 lacs iii) NMPBC Subsidy 15%: Rs.10.15 lacs iv) Bank Finance 30%: Rs.20.30 lacs Total Rs.67.78 lacs Income generation through Sales for first year: (Taken on 90,000 kgs of raw materials) S.no Item produced Quantity Rate/kg Amount (in lacs) 1. Ointments 12,000 425 51.00 2. Syrups 60,000 450 270.00 3. Tablets/ Capsules 18,000 525 94.50 Total 90,000 415.50 The sales of Rs.415.50 lacs will be achieved if there is 100 % capacity utilization .However the concern is able to operate to the 50% of its capacity utilization in the first year of operation with an increase 10% yearly on wards. Further it is assumed that there will be price rise of 10% from first year. The corresponding rates will be as 1 Ointment 425 Syrup 450 Tablets/Capsules 525 Sales realization for the second year S.no Item produced Quantity
Afterwards 467 495 577
Amount lacs) 1. Ointments 12,000 467 56.04 2. Syrups 60,000 495 297.00 3. Tablets/ Capsules 18,000 577 103.86 Total 90,000 456.90 Taking all these into consideration the sales of the concern for first five years will be as. Sales
Year 50% 1st year
60% 2nd year
Rate/kg
70% 3rd year
80% 4th year
(in
90% 5th year
.
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Serving to empower. 207.75
274.14
319.83
365.52
411.21
SALES TURNOVER(in Lacs) year 5 year 4 year 3 year 2 year 1 0
50
100
150
200
250
300
350
400
450
Thus the establishing firm will be able to increase the sales year after year at 10% increase in utilization capacity and 10% increase in price rise.
Expenses incurred during the year: Operating expenses 1. The firm is able to generate employment for about 16 persons for which the annual salary for the ist year will be Rs 12.76 Lacs. 2. The overheads and electricity and D.G set operation will amount to Rs 3.63 Lacs and 0.84 lacs respectively for the ist year.
1. 2. 3.
Particulars Overheads Electricity and D.G set operation Salary for employees Total
Rs.Per Month 30,314 7,000 1,06,375 1,43,689
Per Year (in lacs) 3.63 0.84 12.76 17.24
Cost escalation is 10% from first year onwards. Thus the expenses for first five years will come to Years 1 2 3 4 5 Expenses 17.24 18.96 20.85 22.93 25.22 Financial expenses Deprecation has been calculated on the straight line method at 5% for building, 10% for .
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Serving to empower. equipments and 155 for furniture and fixtures. Depreciation per year S.no 1. 2. 3.
Depreciation of Building Equipment Furniture and Fixtures Total
Total Cost 25.14 38.39 1.95 65.93
Rate of Dep. 5% 10% 15%
Amount in lacs 1.25 3.83 0.29 5.37
Calculation of interest Interest and Repayment Schedule on term loan: Rate of interest: 12.00% Amount in lacs Year Opening Balance Repayment 20.30 0.00 1. 5.07 2. 20.30 5.07 3. 15.23 5.07 4. 10.16 5.09 5. 5.09 20.00 Total
Closing Balance 20.30 15.23 10.16 5.09 0.00
Cost of operation /Financial Expenses of the five projected years Year 50% Capacity 60% 70%
Interest/year 2.43 2.43 1.82 1.21 0.61 8.50
80%
90%
WC with escalation 190.00 @ 10% Year Depreciation 5.37
209.00
230.00
253.00
278.00
5.37
5.37
5.37
5.37
Interest on term loan
2.43
2.43
1.82
1.21
0.61
Interest on WC
1.44
1.26
1.11
0.98
0.68
Commission on sales 6.23 @ 3% R & M Costs 0.32
8.22
9.59
10.96
13.46
0.49
0.65
0.79
0.98
226.77
248.54
272.31
298.42
Total Costs
205.79
.
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Serving to empower.
Profitability position statement Or Cash Flow of five years 1 50% 1st year
Sales
Expenses O.Profit Tax Net Profit Add.Dep Cash Accrued Repayment Net Cash
207.75 205.79 1.96 0.00 1.96 5.37 7.33
2 60% year 274.14 226.77 47.37 0.00 47.37 5.37 52.74
3.87 3.46
8.76 43.98
2
nd
3 70% year 319.83 248.54 71.29 0.00 71.29 5.37 76.66 8.00 68.66
3
rd
4 5 th 80% 4 year 90% 5th year 365.52 272.31 93.21 0.00 93.21 5.37 98.58
411.21 298.42 112.79 0.00 112.79 5.37 118.16
7.26 91.32
6.38 111.78
Details of Debit Service Coverage Ratio: S.No 1. 2. 3.
1.
Sources of Funds Profit after tax Depreciation Interest on term loan Total Deposition of funds Repayment of loan (term loan + WC) DSCR
1 1.96 5.37 2.43 9.76
2 47.37 5.37 2.43 55.17
3 71.29 5.37 1.82 78.48
4 93.21 5.37 1.21 99.79
3.87
8.76
8.00
7.26
2.52
6.29
9.81
13.74
.
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Serving to empower.
average DSCR 16 14 12 10 8 average DSCR
6 4 2 0 1
2
3
4
Recommendations: Sanctioned for the CTL Facility of Rs.32.30 lacs (Thirty two lacs and Thirty Thousand Only) with the following Break up. 1. Term Loan of Rs.20.30 lacs (Twenty lacs and thirty thousand) 2. Working Capital of Rs.12.00 lacs ( Twelve Lacs Only ) In favour of party against the Security of a) Primary: Hypothecation of Stocks of Raw materials. Semi -Finished Goods .Finished Goods and Machinery & tools. b) Collateral: Third Party Guarantee of Two Persons. & c) Additional: Mortgage of Lease Hold rights of Land & She TERM LOAN ANALYSIS OF XYZ MEMORIAL EDUCATIONAL TRUST This is the loan proposal of a fresh concern XYZ Memorial Trust,Mattan ,Anantnag, which came to the JK Bank for finance for the establishment of the educational trust .The trust comprising of six trustees also referred to as Executive body members with specific portfolios who will manage the trust.The trust will have the organisation office at Mattan Anantnag in the ist instance.The main cause of organizing the trust has to provide sustainable development,general awareness and genuine concern towards the environment,ecosystem and general education of the people.The trust has well written constitution/bye laws which provide the preamble aims,objectives and constitution to the trust.One of the aims and objectives of the trust is the establishment of the Educational institute for providing general education needs to the children for which the trust has been granted sanction for establishing/running a private school in Mattan upto the 3rd primary by the Chief Education Officer. The trust has earlier requested for the following term loan facilities a. Term loan facility of Rs 35.00 lacs for the construction of the school buildings b. Term loan facility of Rs 25.00 Lacs for the purchase of two school buses It is pertinent to mention here that the trust had earlier forwarded the project report with total cost of Rs 174.15 Lacs, persual of which revealed that the Fee structure, expenses incurred .
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Serving to empower. etc included in the computation of the profitability statement was on the much higher side. But when I analyzed the project; I observed that the project will not be able to generate ample profit during its two years of operation. The same was confirmed while taking the visit of four like institutes namely, Al’Sarwat Convent, Lyseum School, St.Peters International Academy and St.Lukes Convent in the vicinity of the proposed institute from which the proposed institute will face direct competition. So I prepared a fresh report wherein the fee structure has been taking in accordance with the prevailing institutions in the area. While serving I found that the maximum monthly fee charged by the institutions of the area is Rs 600.00 per month. Besides, the maximum admission fee charged is Rs 12000.00.The project report now submitted has incorporated the fee as Rs 600 per month and the admission fee of Rs 10000.00.Besides proposing the admission of 240 students on the ist year, the party has now requested for the term loan facility of Rs 35 Lacs only for the construction of the school building
Details of the Trustee:Mohammad Yousuf Bala Shubnam Aftab Aftab Ahmad Ganie Mrs.Hoora Banoo Mukhtar Ahmad Bala Mrs.Maryem
Chairman Vice-chair person Gen. secretary Member Treasurer Store –cum record Keeper The trust shall be managed by the management comprising of following persons: Purpose of Advance: For the establishment of an educational Institute. Facility requested by the party: Term loan of Rs.60.00 lacs with the following Break up A. Primary: Hypothecation of Term Loan Rs. 35.00 lacs for the construction of Educational unit. B. Term loan of Rs. 25.00 lacs for the purchase of two school buses. Facility recommended by the branch: Same as above. Security offered: A. Primary: Hypothecation of plant & Machinery & Equipments B. Collateral: Personal Guarantee of Two Persons. And Personal Guarantee of Mortgagers. Additional: Mortgage of land measuring 07 kanals 08 Marlas in total valued at Rs. 74.00 lacs as per valuation report & an office building constructed there on valued at Rs. 5.40 lacs as per valuation report dated 28-05-09. Total cost of mortgaged property Rs.79.40 lacs DETAILS OF THE PROJECT REPORT The total proposed project report cost to be incurred for undertaking the activity is estimated at Rs 61.64 Lacs with the following break-up; .
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Serving to empower. S. NO 1. 2. 3.
PARTICULARS Land Site development Building
AMOUNT IN LACS Already incurred
4. 5.
Misc. Fixed Assets Preliminary &preoperative expenses Provision for contingencies Total
51.32 (includes work of Rs.7.00 already completed) 14.45 1.69 1.18 61.64
Land & Site Dev.: The cost of acquiring the land at Rs. 74.00 lacs & costs for site dev. Of Rs.15.58 lacs have already been incurred by the trust. Building: The proposed school is to be established at Mattan Ang. The estimated cost to be incurred on the construction of building as estimated by the Amar Architects, Civil Engineering Consultant, New Qazi Bagh Anantnag. are Rs.52.00 lacs.The promoters having already completed works of Rs. 7.00 Lacs. Misc. fixed assets: comprising mainly of Office furniture/fixtures, computers along with peripherals, fire fighting equipments Benchs, tables, chairs etc estimated to be purchased at the cost of Rs 14.45 Lacs. Preliminary and pre-operative expenses:include establishment expenses,expenses on travelling,postage,printing,rentetc.Insurance reports preparation fee and security deposits.the expenses has been worked out at Rs 1.69 Lacs. Financial requirements as requested by party:out of the total project cost of Rs 61.63 Lacs.The promoters or trust will raise capital of Rs 26.63 Lacs ammountingb to about 43% of the total project cost.The promoters shall arrange equity from the ancestral resources/contributions and from the established business or buy way of secured loans and advances from the friends and relatives of the premotors/management. The promoters contribution shall include the cost of the land as valued at Rs 50.00 Lacs. FINANCE PATTERN S.no. 1 2 3
Particulars Total expenditure on fixed outlay Promoters contribution Long term financing Total
Amount(Lacs) 61.63 26.63 35.00 61.63
Percentage break-up 43% 57% 100%
.
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Serving to empower. 57%
60% 50% 43% 40% 30%
Promoters contribution Bank financing
20% 10% 0% Financing Pattern
Income realization per annum The trust has projected the income statement on the assumptions that 1) There will be fresh admissions of 240 students in the ist year with the addition of 90 more students from the second year onwards. 2) The admission fee of Rs 10000.00 will be charged which will be increased to Rs 12,000.00 on the third year of operation and later onto Rs 15,000.00 from fifth year. 3) The students will have to pay Rs 600 as tution fee monthly which will be increased gradually to Rs 800 in the seventh year of operation. Accepting the no. of students as 200 for the IST year, the income can be assessed as follows; 1 2 3 4 5 6 7 Years Fresh admissions
200
60
60
60
60
60
60
Average ad. Fee per student Total ad. Fee (in Lacs) Av. Tution fee/month/student Total fee received Total receipts
10000
10000
12000
12000
15000
15000
16000
20.00
6.00
7.20
7.20
9.00
9.00
9.60
600
650
650
650
700
750
800
14.40 34.40
20.28 26.28
24.96 32.16
29.64 36.84
36.96 45.96
45.00 54.00
53.76 63.36
Expenses accrued per annum 1. Operating expenses .
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Serving to empower. The school is projected to generate employment for 23 persons for which the annual salary for the IST year works out to be Rs 8.32 Lacs and an increase of 20% is shown for the ist year onwards 2. Administrative expenses are taken as 5% of net income of every year. 3. Selling expenses are taken at 2 % of net income of every year. Years
Particulars Salary & wages Repairs and Maintainance Administrative expenses Selling expenses Total
1 8.32 1.20
2 9.98 1.80
3 11.97 2.40
4 14.36 3.00
5 17.23 3.00
6 20.69 3.60
7 24.82 3.60
1.72
1.31
1.60
1.84
2.29
2.70
3.16
0.68
0.52
0.64
0.73
0.91
1.08
1.26
11.92
13.61
16.61
19.93
23.43
28.07
32.84
Financial expenses Depreciation has been calculated on straight line method @ 5% for building and furniture and fixtures. Years Particulars 1 2 3 4 5 6 7 Dep.on building@ 2.50 2.50 2.50 2.50 2.50 2.50 2.50 5% Dep.on 0.72 0.72 0.72 0.72 0.72 0.72 0.72 furniture/fixture@5% Interest on term loan 4.90 4.07 3.26 2.45 1.63 0.81 0.00 Total 8.12 7.29 6.84 5.67 4.85 4.03 3.22 Calculation of interest Proposed bank borrowings=Rs 35.00 Lacs Rate of interest=14% Repayment =6years Repayment installment=5.83 Lacs Year 1 2 3 4 5 6 7
Opening Balance 35.00 29.17 23.34 17.51 11.68 5.85 0.00
Repayment 5.83 5.83 5.83 5.83 5.83 5.83 0.00
Closing balance 29.17 23.34 17.51 11.68 5.85 0.02 0.00
Interest 4.90 4.07 3.26 2.45 1.63 0.81 0.00
.
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Projected profitability statement 2 3 4
Particulars
1
5
6
7
Income
34.40
26.28
32.16
36.84
45.96
54.00
63.36
Operating expenses Gross Profit
11.92
13.61
16.61
19.93
23.43
28.07
32.84
22.48
12.67
15.55
16.91
22.53
25.93
30.52
7.29
6.48
5.67
4.85
4.03
3.22
5.38
9.07
11.24
17.68
20.90
27.30
1.88
3.17
3.93
6.18
7.31
9.55
Profit after 9.34 Tax Add back Dep 3.22
3.50
5.90
7.31
11.50
13.59
17.75
3.22
3.22
3.22
3.22
3.22
3.22
Total cash 12.56 sulplus Less:Term 5.83 Loan Payment Net cash 6.73 accruals
6.72
9.12
10.53
14.72
16.81
20.97
5.83
5.83
5.83
5.83
5.83
5.83
0.89
3.29
4.70
8.89
10.98
15.14
Financial 8.12 Expenses Profit Before 14.36 Tax Tax 5.02
7th year 6th year 5th year
Projected Profitability(Gross profit in lacs)
4th year 3rd year 2nd year Ist year
0
5
10
15
20
25
30
35
.
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Repayment: The term loan of Rs 35.00 Lacs shall be repayed in 72 monthly installments with EMI of Rs o.74 lacs with a moratorium period of 6 months during which only interest will be served by the concern to keep the account srandard. Recommendations: In view of the above discussed pars and branch recommendations it is proposed if approved, the branch may accord sanction for the term loan of Rs 35.00 Lacs in favour of the trust against the security mentioned. On the terms and conditions applicable to such a types of advances besides, 1. Trust to raise equity to the tune of Rs 26.63 Lacs from their own resources and not from friends, relatives or other sources detrimental to the bank 2. The term loan be released in a phased manner and as per the progress of the construction 3. Trust to furnish the NOC for the construction of school buildings from municipal community Mattan before the release of the facility.
.
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Serving to empower. EMPLOYEE SATISFACTION Employee satisfaction is a measure of how happy workers are with their job and working environment. Keeping morale high among workers can be of tremendous benefit to any company, as happy workers will be more likely to produce more, take fewer days off, and stay loyal to the company. There are many factors in improving or maintaining high employee satisfaction, which wise employers would do well to implement. To measure employee satisfaction, many companies will have mandatory surveys or face-toface meetings with employees to gain information. Both of these tactics have pros and cons, and should be chosen carefully. Surveys are often anonymous, allowing workers more freedom to be honest without fear of repercussion. Interviews with company management can feel intimidating, but if done correctly can let the worker know that their voice has been heard and their concerns addressed by those in charge. Surveys and meetings can truly get to the center of the data surrounding employee satisfaction, and can be great tools to identify specific problems leading to lowered morale. Many experts believe that one of the best ways to maintain employee satisfaction is to make workers feel like part of a family or team. Holding office events, such as parties or group outings, can help build close bonds among workers. Many companies also participate in team-building retreats that are designed to strengthen the working relationship of the employees in a non-work related setting. Camping trips, paintball wars and guided backpacking trips are versions of this type of team-building strategy, with which many employers have found success. Raises and bonuses can seriously affect employee satisfaction, and should be given when possible. Yet money cannot solve all morale issues, and if a company with widespread problems for workers cannot improve their overall environment, a bonus may be quickly forgotten as the daily stress of an unpleasant job continues to mount. If possible, provide amenities to your workers to improve morale. Make certain they have a comfortable, clean break room with basic necessities such as running water. Keep facilities .
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Serving to empower. such as bathrooms clean and stocked with supplies. While an air of professionalism is necessary for most businesses, allowing workers to keep family photos or small trinkets on their desk can make them feel more comfortable and nested at their workstation. Basic considerations like these can improve employee satisfaction, as workers will feel well cared for by their employers. The backbone of employee satisfaction is respect for workers and the job they perform. In every interaction with management, employees should be treated with courtesy and interest. An easy avenue for employees to discuss problems with upper management should be maintained and carefully monitored. Even if management cannot meet all the demands of employees, showing workers that they are being heard and putting honest dedication into compromising will often help to improve morale.
.
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Serving to empower. QUESTIONNAIRE EMPLOYEE SATISFACTION 1. Where do you rank the qualification possessed by you for the position you are at present? present a) Over qualified b) Highly qualified c) Rightly Qualified d) Under qualified
0% 29% Highly qualified 57% 14%
rightly qualified over qualified Under qualified
INTERPRETATION After the response from employees were analysed, it is observed that most of the employees are highly qualified for the position they hold.
.
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Serving to empower.
a) b) c)
2. How much acquainted are you with your job specifications? specifications Highly knowledgeable Moderately knowledgeable Less knowledgeable dgeable
15%
Highly knowledgeable
28%
57%
Moderately knowledgeable Less knowledgeable
INTERPRETATION Most of the employees feel that they are highly acquainted with their job specifications, clearly showing that most of the employees know that what they have to do.
.
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Serving to empower. 3. a) b) c)
How do you rank the work culture of your branch? Excellent Good Average
14% 15% Excellent good 71%
Average
INTERPRETATION Most of the employees have ranked the work culture of the bank as good showing that maximum employees are somewhat satisfied with the work culture prevalent in their organisation.
.
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Serving to empower. 4. How do you rank your boss on possession of the following characters in him/her? I. Efficiency a) Highly efficient b) Moderately efficient c) Least efficient 57%
60% 50% 40% 30%
29%
Highly efficient Moderately efficient
20%
14%
Least efficient
10% 0% Efficiency
.
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II. a) b) c)
Effectiveness Highly effective Moderately effective Least effective 250% 200% 150%
Highly effective Moderately effective
100%
Least effective 50% 0% Effectiveness
.
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III. Employee subordinate relationship a) Excellent b) Good c) Average d) Bad 50% 45% 40% 35% 30%
Excellent
25%
Good
20%
Average
15%
Bad
10% 5% 0% Employee-subordinate relation
IV. a) b) c) d)
Attitude Good Egoistic Strict Friendly
.
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Serving to empower. 45% 40% 35% 30% Good
25%
Egoistic 20%
Strict
15%
Friendly
10% 5% 0% Attitude
INTERPRETATION Most of the employees feel that they are moderately efficient, highly effective, good in terms of building relations and has good attitude style.
.
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Serving to empower. 5. a) b) c) d)
DO you get any sort of training Never Often Less often Regular
14%
14%
Never Often Regular
72%
INTERPRETATION Most of the employees say that training is often provided to them showing that the Bank’s Management is concerned towards upgrading the skills of the employees.
.
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Serving to empower. 6. a) b) c)
What is the amount of work load on you? Highly work loaded Moderately work loaded Least work loaded
0% 31% Highly work loaded Moderately work loaded 69%
least work loaded
INTERPRETATION The response from the employees of the bank reveal that most of the employees feel that they are being overloaded with the work, which can prop out as a cause of concern for the bank in future.
.
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Serving to empower.
7. a) b) c)
Rate the extent to which you get stressed with your work? Highly stressed Moderately stressed Least stressed
10%
Highly stresed 34%
Moderately stressed 56%
Least stressed
INTERPRETATION The data obtained through this survey has revealed that most of the employees do get stressed due to work. Again this needs to be looked after by the bank authorities, at the earliest.
.
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Serving to empower. 8. a) b) c) d)
Rate the scope of growth in the role you are presently in? Very high High Average Poor
7% 23%
very high 49%
high average
21%
poor
INTERPRETION The responses obtained through this survey shows that most of the employees feel that there is high scope for their growth in this Bank. Bank
.
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9. To what extent do your organisational responsibilities interfere with your organisational life? a) Highly b) Moderately c) Less d) Not at all
4% 15% Highly 52% 29%
Moderately Less Not at all
INTERPRETATION The data collected through the survey shows that most of the employees feel that that their personal lives are getting affected because of their organisational responsibilities.
.
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Serving to empower. 10. a) b) c) d)
Do you face any difficulty while performing your job? Yes No Sometimes Can’t say
5% 22%
34% Yes No Sometimes 39%
Cant say
INTERPRETATION Most of the employees feel that they don’t face any difficulty while performing their job.
.
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Serving to empower. 11. Is their any kind of compensation facility available for you in case of an accident? a) Yes b) No
Sales 25%
1st Qtr 75%
2nd Qtr
INTERPRETATION The responses obtained during this survey shows that most of the employees are not aware of the compensation facility provided to them in case of an accident.
.
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Serving to empower. 12. Rank the extent of transparency in the organisation for the employees? a) Highly transparent b) Moderate transparent c) Least transparent
10%
28%
Highly transparent Moderately transparent
62%
Least transparent
INTERPRETATION The responses obtained during the survey shows that most of the employees of the organisation are moderately transparent for an employee.
.
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Serving to empower. 13. a) b) c)
Is there any kind of system for your feed back to your boss? Yes No
Sales 25% Yes 75%
No
INTERPRETATION The data collected during this survey shows that there is no proper system available for giving feedback to their boss.
.
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14. How frequently can you approach to the head of your organisation, in case you want to? a) Never b) Sometimes c) Often
Sales 3% 12%
23% Never Sometimes Often
62%
Anytime
INTERPRETATION This survey has bought to light that not much of the employees can approach their Boss. .
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a) b) c)
15.What is the extent of employee privacy? Privacy is highly maintained Moderately maintained Least maintained
14%
Highly maintained
37%
49%
Moderately maintained Least maintained
INTERPRETATION On getting responses from the employees it is observed that the privacy of the employees is maintained but not highly. This shows that the management of the company has a lackadaisical attitude towards its employees.
.
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16. Is there any particular grievance procedure to be followed by the employees a) Yes b) No
35% Yes 65%
No
INTERPRETATION This survey has bought to light a very surprising data that very few employees of the company are aware of the grievance procedure of the bank.This shows that there is lack of information amongst the employees regarding the bank itself.
.
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Conclusion The J&K banking industry currently appears to be at a cross roads, where the industry is attempting to change perception of the services provided by it, amongst its customers. J&K Bank offers a large no. of products for its customers that one way or the other is changing the lives of the people in Kashmir valley and outside as well. This project has led to the following conclusions; Almost all the banks offer similar products with almost similar features but in order to grab a major market, the bank focus more on its strategies to make them more innovative. To provide finance, bank looks keenly into the profitability and working processes of the business. The bank before financing the fresh project makes the possible analysis of the industry and the company. The bank also looks into the past and present position of the proprietor. The evaluation by the bank relates not only to profitability but also to cash flows to determine the capacity of the firm to pay interest charges and repayment of debt installments. If borrower had already taken the debt from the company in past years the bank also looks in its past performance is checked whether the borrower had repayed the debt amount or not. On the basis of its financials, the bank is not showing good performance in its working capital management. The current liabilities of the bank are largely increasing and are exceeding the current liabilities. The earning capacity of the bank is not is low and has shown increase in the last three years very poorly.
.
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Recommendations; The bank needs to look into its working capital management. It needs to maintain its current assets and current liabilities. The bank needs to focus on its operations so as to generate revenue from its own business operations rather than on other comprehensive sources. The bank needs to make complete analysis before investing as the bank is not able to achieve a satisfactory return on its investments as the profit is not sufficient. There should be fast means of data verification and document generation so that less time is taken in sanctioning the facility. There is need to increase the staff members in order to reduce the work load of the employees If possible, bank should provide amenities to workers to improve morale. Make certain they have a comfortable, clean break room with basic necessities such as running water. Keep facilities such as bathrooms clean and stocked with supplies. There should be regular training and development programmes for the employees which will make the more efficient and effective in their work There should be a periodic feedback system in the bank. The employees should be rewarded on their work which will make the employees more interested in their work and will result in increasing the efficiency of the organisation. The bank need to focus more on the foreign market
.
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BIBLIOGRAPHY
Books Books 1.
PANDEY I.M. “Financial Management
2.
GUPTA SHASHI K., SHARMA R.K., “Management Accounting
and Business Finance” 3.
CHANDRA PRASANNA, PRASANNA “Projects (planning, analysis, financing,
implementation, review)” 4.
KOTLER PHILLIP, methodology” PHILLIP, “Research “
Journals 1.
Annual reports of JK Bank
Sites www.indianbanks.com www.JK Bank.net www.moneycontrol.com www.wikipedia com
“Remembrance is the great pan for those whooooooo Remember” “Promise breakers are worse than shoe makers” Ahmad Mustafa’s .
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