INTERNSHIP REPORT Original-1

Shimoga Arecanut Mandy Merchants Co-Operative Bank Ltd.
CHAPTER-1
INTRODUCTION ABOUT THE INTERNSHIP AND INDUSTRY
PROFILE
1.1 Introduction about Internship
The internship was doneatThe Shimoga Arecanut Mandy Merchants Co-operative

Bank Ltd, in Shivamogga. It is a Co-operative bank. It was a four weeks
internship program. It was an organization study. The aim is to obtain knowledge
about the human resource planning, managing the employee force and
understanding the working environment of the bank. In our academics we learnt
lot of theoretical aspects of banking, but in four weeks of internship study got the
practical aspects of bank.
1.2 Objectives of the Internship
• To know about the overall organization structure of the bank.

• To get the knowledge about the banking product and services.
• To study the profile of the company
• To analyses the financial statement of the organization.
• To work in the group as an individual in the organization in order to achieve
the goals.
• To study the organization structure and weakness of the company.
• To manage the human resource in efficient way of the organization.
INDUSTRY PROFILE
1.3 Introduction to Banking
A bank is often described as “as organization which is engaged in accepting

deposit from the public and granting loans. It does not refer only a place of
lending and accepting money but look after the financial problem of its
customers.”
PG Dept of Management Research Center, PESITM, Shivamogga Page 1

The digital India concept is helping to convert the banking activities from E-
Banking to M- Banking.
1.4 Definition of Banking
Section 5(1)(b) of the Banking regulation act of 1949, defines “Banking company
is one which transacts the business of banking which means the accepting for the
purpose of lending or investment of deposits money from public repayable on
demand or otherwise and withdraw able by cheque, draft order or otherwise”.
Dictionary meaning of word ‘The Oxford dictionary defines a bank “an

establishment for custody of money received from or on behalf of its customers.
In essentials duty is to pay their drafts on it. Its profit arises from the use of money
left employed by them”.
1.5 Origin of the Term Bank:
The word bank is said to be derived from the French word “Banquet” that is
‘Bench’. It is believed that the early bankers, The Jews of Lombardy transacted
their business on benches in the market place. In India the ancient Hindu
scriptures refer to the money lending activities in Vedic period. They performed
most of those functions which banks perform in modern times during Ramayana
and Mahabharata eras, also banking had become a full- fledged business activities.
In simple the development of commercial banking in ancient times was closely
associated with the business of money changing.
From a broader social angle, Bank acts as a bridge between the users of capital
and those who save but cannot use funds themselves. The banking system has
capacity to add to the total supply of money by means of credit creation.

Chart No 1.1 Structure of Indian Banking System

1.6 Introduction of Co-operative Bank
Co-operative bank, basically gives financial help to the general population with
little intends to shield them from the obligation catch of the cash lenders. It is a
piece of incomprehensible and effective formation of cooperative organization
which is occupied with task of generation, preparing, promoting, and managing
banking of India.
It is an important instrument of banking access to the rural masses and it’s a

vehicle for democratization of the Indian financial system. The main Moto of
cooperative bank is ‘one for all and all for one”. It mobilizes deposits and
provides agricultural and rural credit with wider outreach and acts as facilitator
forup- liftment of the weaker sections, particularly carrying out of the programs
for poor.
A cooperative bank is a monetary element which has a place with its individuals,
who are in the meantime the proprietors and clients of their bank. Cooperative
banks are regular made by people having a place with a similar expert group.
These banks for the most part finish their individuals with an extensive variety of
finance and money related administrations.
Co-operative banks are based on the values of self-help, self-responsibility,

democracy, equality, and solidarity. In the tradition of their founders, co-operative
members believe in the ethical values of honesty, openness, social responsibility
and caring for others.
The Co-operative Banking system in India is categorized by a comparatively

complete network to the grass source stage. This area primarily focuses on the
local population and micro-banking between middle and low revenue stratum of
the general public. These banks operate primarily for the advantage of rural areas
people, mainly the agricultural segment.
A co-operative bank is a financial entity which belongs to its members, who are at
the same time the owners and customers of their bank. Co-operative banks are

often created by persons belonging to the same local or professional community or

sharing a common interest.
Co-operative banks generally provide their members with a wide range of banking
and financial services (Loans, deposits, banking accounts). These are also
typically much incorporated than credit union systems. Local branches of co-
operative banks are their own boards of directors and direct their own operations,
but mainly tactical decisions require granted from a central headquarters. Credit
unions usually retain tactical decision-making at a home level, though they share
behind- office functions, such as access to the International outflow structure, by
federating.
1.7 History of Co-operative bank in India
Co-operative bank in India have come a long way since the enhancement of the
Agricultural credit co-operative societies Act in 1904. It is an important
instrument of banking access to the rural masses and its play a significant role in
rural development.
The central co-operative banks and start co-operative banks were established
under the Co-operative Society’s Act of 1912 which provide refinance to primary
credit societies. This Act is stimulus to the co-operative credit movement in India.
This movement made good progress during and after the First World War. But it
had faced great depression from 1929 to 1933. After the Second World War, the
co-operative credit movement made considerable progress once again. And the
RBI also showed a keen interest towards co-operative credit movement. Then
there after RBI regulates these banks since 1st March 1966.
1.8 Meaning\ Definition of Co-operative Bank:
“A Co-operative bank, as its name indicates is an Organization involving of a

number of persons who join mutually to a group their surplus funds for the reason
of eliminating the income of the bankers or cash lenders with a vision to
distributing the same between the deposition and borrowers”

The Indian co-operative bank system consists of 3 sections.
1. Primary Credit Societies,

2. Central co-operative banks,
3. State co-operative banks

Chart No 1.2 Types of Co-Operative Banks
1.8.1 Primary credit societies

These are divided into 2 types
a) Rural credit societies; these are found in villages. They are formed for
providing cheap credit facility to the farmers and agriculturist.
b) Urban credit societies; these credit societies are found in the towns. They
are the association of small traders. They are formed for the purpose of
meeting the credit needs of small traders. The management of primary
credit societies is based on the principle of “one member, one vote”. On
the basis of this principle, the president and securities are elected by the
members of the credit society.
1.8.2 Central co-operative banks;

It is a federation of primary credit societies operating in specified area. These co-
operative banks are foundedfor the purpose of providing refinance facility to the
primary credit societies. It is established under the act of1912. It is located in the
district headquarters.

1.8.3 State co-operative banks;

It is top level of the co-operative banking structure. It is also known as the “Apex
Bank’. It controls and co- ordinates activities of all co-operative institutions in the
state. It is found in the state capital.
1.9 Co-operative Movement in India
During the British Administer, Nicholson a British Officer in India recommended

to present Raiffeisen model of German agricultural credit Cooperatives in India.
As a follow of that proposal, the Primary Co-operative Society Act of 1904 was
ordered to empower the development of “agricultural credit co-operatives” in
towns in India under Government funding. With the performance of 1904 Act,
Co-operatives were to get a straight legal uniqueness as every agricultural Co-
operative was to be registered under the Act only. The 1904 Co-operative
Societies Act was repealed by 1912. Cooperative Societies Act which provided
arrangement of co-operatives other than credit and it has got lot of progress in
1942.

1.10 Co-operative Movement in Karnataka
Indian co-operative sector gets a unique place in Karnataka because it is one of the
principal states to have begun the movement. The agricultural credit cooperative
society in Karnataka began in a place called Kanaginahala, Gadag area, in 1905. In
fact, the “Betageri Credit Society” established in 1905, which later became Urban
Bank is said to be the first urban credit society in Karnataka.
A consumer co-operative society was additionally begun in Bangalore. Preceding

unification of states Karnataka was isolated into different areas, for example,
Hyderabad, Mysore, Mumbai and so on. All provinces had their own law relating to
co-operative societies. They are
• Mumbai co-operatives Act,1925

• Madras co-operative societies Act,1932
• Madras Land Mortgage Act,1934
• Kodagu co-operative societies Act,1936
• Mysore co-operative societies Act,1948
• Hydrabad co-operative societies Act,1949
• Hydrabad co-operative societies Act, 1952
• Mysore co-operative societies Act, 1959

CHAPTER -2
ORGANIZATION PROFILE
2.1 Background of the Company
The Shimoga Arecanut Mandy Merchants Co-operative Bank Ltd, was established
on 24th November 1964. It is a co-operative urban bank which is under the dual
control of co-operative department and Reserve Bank of India.
• Regd. No. 874/DYR/MYS/64-65/24-11-1964,

• RBI License. No. UBD/KAN/0016P/19-12-2000.
Main promoters of the bank are Arecanut merchants and were started with the
intention to promote and support the interest of the Arecanut merchants as well as
the Arecanut growers.
This bank is Under the leadership of Sri K.T. Shyamegowda, who has worked as
promoter of the bank in the beginning. It has successfully completed 55 years of
operation and been providing to its quality services to its customers and members.
The head office is located in No 1(10) N-Block, APMC Yard, Sagar Road,
Shivamogga.
The first president of this bank was Sri. D.R. Ratnakar and the first secretary
wasSri. R.N. Nagraj.
The bank has registered in the Reserve Bank of India in 19/12/2000. The license
number is UBD/KAN/0016P.
In the earlier stage the bank was started with the 26 members in 1964 but now in
the year 2017-18 the bank has members of 4127 has deposit of Rs
3,37,91,210.The bank has able to recover all loans and have ‘0’ NPA from past 3
years, even though the bank has tough competition in the market, it is able to
achieve good profit and giving 12% dividend from past 4 years.

All accounts of this bank are computerized which helps the customer for quick
and better transaction. The bank has also adopted latest technology and providing
R.T.G.S, N.E.F.T, and E- Tax payment facility to its customers. It has also
introduced T.D.S, system also.
Industry name Finance-Banks-Urban co-operative

Formal name The Shimoga Arecanut Mandy Merchants co-
operative Bank ltd,
Year of 1964; 55 years Ago,
Registration
Address No 1(10) N-Block, APMC Yard, Sagar Road,
Shivamogga.577204
Manager Mr.B.R. Chandramouli
Products & RTGS, NEFT, IMPS, E-Tax payment, TDS, E-
Services Payment, Deposits and Barrowing facilities, Locker
facility, overseas transactions etc.
Tel No. 250155
250465
members 4127
Share capital 337.91 lakhs

2.2. Nature of Business Carried

SAMMCO Bank Ltd has become a known name in Shivamogga District and the
customer is steadily increasing over the years. It carries out a Banking business.
SAMMCO Bank provides a wide range of customized products and services for
all kinds of market, trade, and perceived requirements. It deals in personalized
banking, business banking, money transfer, e-payment, R.T.G.S. facilities include
barrowing facilities, deposits, safe deposit, locker facility, optimum return on
surplus funds and helping with smooth overseas transactions.
2.3. Vision, Mission, and Quality policy of the Company
2.3.1 Vision:
“To provide a better credit facility and quality service to the Merchants through
the bank. To encouraging saving, self- help, and co-operation among the
members, associate member and nominal members and depositors of the bank.”
2.3.2 Mission:
1. To fulfil the financial needs of the Areca trading firms.
2. Providing the financial facility to strengthen the Arecanut sales.
3. To mobilize funds.
4. To create funds for the promotion of co-operative education.
5. To grant loans and advance.
6. To do all other activities those are required to promote and strengthen the bank
activities.
2.3.3 Quality Policy:

“Customer satisfaction through professional management and team work.”

2.4. Products/Service Profile

2.4.1 Deposits of Banks
Types of deposits received by the bank are as follows:
• Fixed deposit: FD tenures from 90-180 days 5.00%,180 days to 1 year
5.50%,1year to 2 year 6.85%,for 500 days 7.25%,from 2-10 years
6.25%,for senior citizens 0.50% additional interest is payable.
• Current deposit: No interest given to current account holders.
• Recurring deposit:Interest earned is taxable under the “head of income
from other source”. No TDS will be made on total interest earned is up to
Rs.10,000.whenever interest exceeds Rs.10,000 in a financial year 10%
TDS is made. interest rates are 7.50% for 1 year and 6.50% for 5 years
• Savings bank deposit: For this deposit, bank will offer 4% rate of interest.
2.4.2 Lending of the bank:
The bank provides different type of loans which are as follows;
• Overdraft: Bank will offer two types of overdrafts.

1. Regular overdraft,
2. Secured overdraft.Under regular overdraft bank will give up to Rs 1 crore of
OD for working capital. Rate of interest offered to this loan is 11.95%. For
secured OD bank will offer up to 25 lakhs for business community.
Generally, rate of interest offered to this loan is 12.50%.
• Vehicle loan:
For 2 wheelers rate of interest is 11.50% and repayment period is 40 months.
For other than 2 wheelers, non- commercial purpose ROI is 10.50%.4
wheelers rate of interest is 8.80%. Other than 2-wheeler vehicle loan
repayment period is maximum 60 months. For second hand vehicles ROI is
13%.
• Gold loan:
Bank offers bullet repayment scheme for their customers. It means customers
can repay the loan amount with interest in 1 instalment. Generally, bank will

offer loan amount of maximum Rs 2 lakh, and rate of interest is 11.00% and
loan period is 12 months.
• Housing loan:
Rate of interest for housing loan is 9.10%. Repayment period is maximum 180
months. And maximum Rs. 30 lakhs can finance to per borrower.
• Commercial Building loan:

For Mandy building construction, bank will finance under the head building loan.
13% of ROI will be charged to this loan.
The bank is also providing other loans like consumer loan (13%), Housing site
loan (12.75%), Mortgage loan (12.50%), overdraft etc to their customers.
2.4.3 Service Provided by the Bank:
• Payment of Direct tax: Bank will provide services to their customer in

these areas like payment of income tax, self-assessment tax, and filing of
GST, NEFT and RTGS.
• Locker facility: Locker facility is one of the main services provided by

this bank. Presently there are 177 lockers in the bank and they are kept in a
separate strong room with full security measure. They are 4 sizes of
lockers they are Mini 1500/- Medium 3000/- Briefcase 3500/- Big 5000/-
as rent per annum depending on the size of the locker.
2.5. Ownership Pattern
The membership of the bank is restricted to the Co-operative Societies which have
registered within the area of operation referred in bye-law 1(4th) the state
government is eligible for admission. Any individual residing in the area of
operation of the bank over 18 years of age and of sound mind shall be eligible for
admission as a nominal member. When applying for admission, a society shall
submit along with its application a resolution of the board, an amount for the
purpose of becoming member and may sanction or refuse the application as its

discretion. Every member shall hold at least one share. No member at any time
holds more than the number of shares which shall represent 1/5th of the paid-up
share capital of the bank.
The management of the bank consists of 9 board of directors duly elected by the
members. All the important decisions relating to the bank is taken at the board of
directors meeting. Decision like accepting of membership, mobilization of
deposits, investments, is taken at the board of directors meeting.
The bank consists around 4127 and more members. The shareholders of the bank
and the general body are the supreme. Below it comes the board of directors
consisting of 9 members, 42 sub committees, a staff consisting of 12 persons. The
manager who is the executive officer of the bank executes decisions taken at the
board meetings through the staff.

2.5.1 Administration Board of the Bank:
Chart 2.1 Administration Board of the Bank

2.6. Achievements/ Awards:
• Karnataka state Co-operative Administration Society has identified the

development of the bank in the year 2006-04, for this, Bank has been awarded
as a “Best co-operative Bank in the District”.
• 1st Bank in the District to introduced the Mobile SMS service for its
customers.
2.7. Future Growth and Prospects
The Shimoga Arecanut Mandy Merchants Co-operative Bank Ltd wants to establish
more branches in Shivamogga district in future. Bank wants to adopt new technology
like ATM in future. Bank wants to introduce the new technology like cash depositary
machines. Bank wants to come up with internet banking facilities to its customers.
They also focus on customer relationships as for the growth.

CHAPTER-3
McKINSEY’S
7S FRAMEWORK AND PORTERS FIVE MODEL WITH
REFERENCE TO ORGANIZATION.
Chart No: 3.1 McKinsey’s 7Structure
3.1 McKinsey’s 7S Frame work
The McKinsey’s 7S frame work was developed by the consultants at the McKinsey’s
and company- a well-known management consultancy firm in the United States. The
model was designed to diagnose the case of organizational problems and to formulate
program for improvement. The McKinsey’s 7S frame work for business success is
shown in figure above. Of these 7S’is the first three are considered as Hard S’s i.e.
Strategy, Structure, and System and remaining four are considered as Soft S’s i.e.
Style, Staff, and Shared values. This can be understood by the below explanations.

3.1.1 Structure:
The way organization’s units relate to each other: centralized, functional divisions
(up-down); decentralized (the trend is large organization’s); matrix, network, holding,
etc.
Chart No.3.2 Organization Structure of SAMMCO Bank Ltd.
3.1.2 Skills:
Skills are distinctive capabilities of personnel in the organization as a whole. Skills

are considered as one of the most crucial attributes or capabilities of an organization.
Organization has strengths or dominant skills are few. These are developed over a
period of time and a result of the interaction of people in the organization, top
management systems, the external environment influences etc. Hence, when
organization make a strategic shift it becomes necessary to build new skills. The
Organization staffs have different skills for their own works. Highly qualified
professionals in the company have major skills like technical, finance, economical,
and marketing skill.

3.1.3 Style:
Style means cultural style of the organization and how key managers behave in
achieving the organizational goals. This is leadership approach of top management
and the company’s overall operating approach style impacts on the norm people
follow and the work and interacts with customers. Company follows a participative
style of management. It believes in teamwork. For each task’s terms are being
constituted to attain specific goals.
SAMMCO Bank Ltd. Believes that quality can be achieved by providing quality
financial and related services on the continuous basis and it also believes that to
motivate and involve employee to achieve the set organization growth targets. By this
type of participative style of management, the Bank can compete with their rivals like
Commercial Banks, Regional Banks and other Co-operative Societies.
3.1.4 Strategy:
Plan or course of action leading to the allocation of an organization’s finite resources

to reach indefinite goals. Plans for the allocation of firms’ scarce resources, over time,
to reach identified goals, Environment, Competition and Customers.
SAMMCO Bank Ltd. is one of the initiatives in the industry of providing short term
loan to agriculture, Small Scale Industries and Self-Help Groups. SAMMCO Bank
Ltd. believes in total quality at all levels. Its motto is to serve with high standard of
professionalism with personal touch built on trust.
3.1.5 System:
System means formal and informal procedures that control everyday activities. The
decision-making systems within the organization can range from management
institutions to structured computer systems and formal and informal procedure that
the everyday activities of bank.
Systems apply to many aspects of the firm, but system is most often used with
reference to Management Information System and Marketing Information System.
This is an interlocking frame work of hardware of people and procedures. The
strategic day running of the business repairs the speedy collection and the flexible
interval of information.

3.1.6 Staff:
It means that the organization has hired able people trained them well and assigned
them to the right jobs. Staffs are human resources working in an organization. They
are responsible for carrying out various activities of the organization effectively and
efficiently. The Bank has well-trained, developed and skilled staffs who work very
hard for the success of the bank. The number of staffs in this bank is 12.
3.1.7 Shared Values:
Shared values refer to the guiding concepts, values and aspirations that unite an
organization in some common purpose. They guide employees of any organization
towards valued behaviour. Important concerns and goals that are shared by most of
the people in a group, that tend to shape group behaviour, and that often keep on
overtime even with changes in group membership. Shared values originally called as
super ordinate goals; it is guiding concepts and principles of the organization- values
and aspirations, often unwritten. They are also the things that influence a group to
work together for a common goal. It acts as a guiding concept, fundamental ideas
around which a business built. So, it must be simple, usually started at the summary
level, have great meaning inside the organization even though outside may not see or
understand them.
The Bank goes for the following values.

• Loyal to Customers,
• Quick and Better Service,
• Customer Satisfaction,
• Honest in Work.

Chart No 3.3 Porter Five Force Model
3.2 Porter Five Force Model
Porter's Five Forces Framework is a tool for analysing competition of a business. It

draws from organization economics to derive five forces that determine the
competitive intensity and, therefore, the attractiveness of anorganizations in terms of
its profitability. An "unattractive" organization is one in which the effect of these five
forces reduces overall profitability. The most unattractive organization would be one
approaching "pure competition",
3.2.1 Threat of New Entrants:
With so many new banks entering the market each year the threat of new entrants
should be extremely high. However, due to mergers and bank failures the average
number of total banks decreases by roughly 253 a year. A core reason for this is,
what is arguably, the biggest barrier of entry for the banking industry, trust.

Because the industry deals with other people's money and financial information new
banks find it difficult to start up. Due to the nature of the industry people are more
willing to place their trust in big name, well known, major banks who they consider to
be trustworthy.
The banking industry has undergone a consolidation in which major banks seek to
serve all of a customer’s financial needs under their roof.This consolidation furthers
the role of trust as a barrier to entry for new banks looking to compete with major
banks, as consumer are more likely to allow one bank to hold all their accounts and
service their financial needs.
Ultimately the barriers to entry are relatively low for the banking industry. While it is
nearly impossible for new banks to enter the industry offering the trust and full range
of services as SAAMCO bank.

3.2.2 Power of Suppliers:
Capital is the primary resource on any bank and there are four major suppliers
(various other suppliersof capital in the industry.
1. Customer deposits. 2. mortgages and loans. 3. mortgage-backed securities. 4. loans
from other financial institutions.
By utilizing these four major suppliers, the SAAMCO Bank can be sure that they
have the necessary resources required to service their customers' borrowing needs
while maintaining enough capital to meet withdrawal expectations.The power of the
suppliers is largely based on the market, their power is often considered to fluctuate
between medium to high.
3.2.3 Power of Buyers:
The individual doesn't pose much of a threat to the banking industry, but one major
factor affecting the power of buyers is relatively high switching costs. If a person has
one bank that services their banking needs, mortgage, savings, checking, etc, it can be
a huge hassle for that person to switch to another bank.
To try and convince customers to switch to their bank they will often times lower the
price of switching, though most people still prefer to stick with their current bank.
The internet has greatly increased the power of the consumer in the banking industry.
The internet has greatly increased the ease and reduced the cost for consumers to
compare the prices of opening/holding accounts as well as the rates offered at various
banks.
3.2.4 Availability of Substitutes:
Some of the banking industry's largest threats of substitution are not from rival banks
but from non-financial competitors. The bank does not suffer any real threat of
substitutes as far as deposits or withdrawals, however insurances, mutual funds, and
fixed income securities are some of theservices that are also offered by non-banking
companies.

There is also the threat of payment method substitutes and loans are relatively high for
the bank. For example, big name electronics, jewellers, car dealers, and more tend to
offer preferred financing on "big ticket" items. Often times these non-banking
companies offer a lower interest rates on payments then the consumer would
otherwise get from a traditional bank loan.
3.2.5 Competitive Rivalry:
The banking industry is considered highly competitive. The financial serviceshave

been around for hundreds of years, and just about everyone who needs banking
services already has them. They do this by offering lower financing, higher rates,
investment services, and greater conveniences than their rivals. The banking
competition is often a race to determine which bank can offer both the best and fastest
services, but has caused banks to experience a lower ROA (Return on Assets). Given
the nature of the industry it is more likely to see further consolidation in the banking
industry. Major banks tend to prefer to acquire or merge with other banks than to
spend money marketing and advertising.

CHAPTER-4
SWOT ANALYSIS
A SWOT analysis is made to set the goals and plan for effective execution by
building in strengths, overcoming the weakness, capturing opportunities and
defending the threats.
4.1 Strengths:
1. Self-motivated as well as committed and coordinated staff.

2. Transparency in operation.
3. Good Management and Well Accounting System established.
4. The bank has good profitability position.
5. Complete knowledge about market.
6. Providing 12% dividend to shareholders.
7. The bank has ‘A’ grade in audit classification
4.2 Weakness:
1. This bank has not ATM facility and position.

2. Bank has not Net Banking Facility.
3. Lack of Corporate Governance. The BOD as well as the staff members lacks
professional banking
4. knowledge and expertise.
5. Limited area of operation.
4.3 Opportunities:
1. The bank should also build relationships with existing customers to retain them.
2. To start ATM’s.
3. Development of new application for existing products.
4. It should introduce new products and schemes to bring in new customers.
5. Now it is a single unit, Bank can establish branches to expands its business.

4.4 Threats:
1. Competition from other banks.
2. Increase of micro finance.
3. Multinational and private banks are established with huge facilities and
professional arrangements to its customers.
4. A bad economic outlook cans serious damage to the financial situation of the
bank.
5. Future market trends.

CHAPTER-5
ANALYSIS OF FINANCIAL STATEMENT
5.1 Financial Statement Analysis
Table 5.1 Profit and Loss of the Shimoga Arecanut Mandy Merchant
Cooperative Bank Ltd. Shivamogga
Particulars 2017-2018
INCOME
Interest and discount 73,716,587.13
Administrative income 510,024.25
Brokerage and commission 503.34
Other income 1,539,750.28
Total 75,766,865.00
EXPENDITURE
Interest on barrowings & deposits 39,404,355
Staff salary & provident fund 6,600,694.00
Administrative expenses 5544614.75
Other provisions 2,232,927.00
Depreciation 1,230,936.73
Provision for HL interest 617,937.00
Premium Amortisation 1,430,021.00
Income tax 6,000,000.00
Net profit 12,705,379.07
Total 75,766,865.00
Source: Annual Report 2017-18

INCOME
Interest and discount 83,149,770.39
Administrative income 476,193.00
Brokerage and commission 338.98
Other income 2,694,991.03
Total 86,321,293.40
EXPENDITURE
Interest on barrowings & deposits 41,917,367.00
Staff salary & provident fund 7,528,016.00
Administrative expenses 4,633,289.16
Other provisions 2,519,342.00
Depreciation 1,091,195.71
Provision for HL interest 873,642.73
Premium Amortisation 344,583.00
Income tax 8,410,000.00
Net profit 19,003,857.80
Total 86,321,293.40
Source: Annual Report 2018-19
Table No 5.2 Balance Sheet of the SAMMCO Bank Ltd

Particulars 2017-18
ASSETS
Cash in hand 20,377,827.00
Cash at Co-Operative Banks 409,671.68
Cash with Other Banks 64,751,340.27
Investments in SDCC Bank 7,158,357.21
Other Investments 305,411,415.47
LOANS
Short term loans 38,220,138.00
Medium term loans 475,355,010.69
Staff loans & advances 2,704,601.00
Other advances 7,256,524.00
Banking assets 6,907,974.18
Total assets after depreciation 12,894,684.93
TOTAL 941,447,544.43
LIABLITIES
Share capital 33,791,210.00
Reserve fund 35,174,651.45
Other funds 41,174,971.05
deposits 796,508,707.14
Staff deposits 113,500.00
Banking liabilities 844,433.00
Other liabilities 21,134,692.72
Net profit 12,705,379.07
TOTAL 941,447,544.43
Source: Financial Statement 2017-18

ASSETS
Cash in hand 8,406,237.00
Cash at Co-Operative Banks 762,791.68
Cash with Other Banks 95,451,171.42
Investments in SDCC Bank 7,156,857.21
Other Investments 291,343,112.16
LOANS
Short term loans 43,299,640.00
Medium term loans 531,200533.42
Staff loans & advances 3,096,850.00
Other advances 10,110,137.00
Banking assets 6,951,050.96
Total assets after depreciation 11,958,913.46
TOTAL 1,009,737,294.31
LIABLITIES
Share capital 34,161,170.00
Reserve fund 38,605,612.45
Other funds 46,685,799.85
deposits 844,364,842.87
Staff deposits 106,750.00
Banking liabilities 6,121,611.00
Other liabilities 20,687,650.34
Net profit 19,003,857.80
TOTAL 1,009,737,294.31
Source: Financial Statement 2018-19
Table No 5.3 Yearly Deposits Growth

years Deposits
2008-09 2522.94
2009-10 2964.92
2010-11 2725.91
2011-12 3324.03
2012-13 3827.93
2013-14 4378.73
2014-15 5361.47
2015-16 5808.13
2016-17 6132.91
2017-18 7965.09
Graph No 5.1 Yearly Deposits Growth
9000
7965.09
8000
7000
6132.91
6000 5808.13
5361.47
5000
4378.73
4000 3827.93
3324.03
2964.92
3000 2522.94 2725.91
2000
1000
0
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Table No 5.4 Yearly Loans & Advances Growth
years Loans & Advances Growth

2008-09 1779.34
2009-10 1765.85

2010-11 1888.4
2011-12 2190.85
2012-13 2354.05
2013-14 3025.82
2014-15 3174.22
2015-16 3928.71
2016-17 4827.38
2017-18 5162.79
Graph No 5.2 Yearly Loans & Advances Growth
6000
5162.79
5000 4827.38
3928.71
4000
3174.22
3025.82
3000
2354.05
2190.85
2000 1779.34 1765.85 1888.4
1000
0
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Table No 5.5 Yearly profit Earning
years Yearly profit Earning

2008-09 48.47
2009-10 28.66

2010-11 48.79
2011-12 70.95
2012-13 74.84
2013-14 85.87
2014-15 116.65
2015-16 110.83
2016-17 157.63
2017-18 127.05
180
160 157.63
140
127.05
120 116.65
110.83
100
85.87
80 74.84
70.95
60
48.47 48.79
40
28.66
20
0
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18
Graph No 5.3Yearly Profit Earning

5.2 Ratio Analysis
5.2.1 Current Ratio:
Current ratio = Current assets ÷ Current liabilities.
Year Current Assets Current liability Current Ratio

2017-18 85,538,838.95 21,134,692.72 4.04
2018-19 104,620,200.01 20,687,650.34 5.05
120,000,000.00
100,000,000.00
80,000,000.00
60,000,000.00
40,000,000.00
20,000,000.00
0.00
2017-18 2018-19

5.2.2 Liquid Ratio:
Liquid Ratio = liquid assets ÷ Current liabilities.
Year Liquid Assets Current Liquid Ratio

Liabilities
2017-18 92,697,196.16 21,134,692.72 4.38
2018-19 111,778,557.22 20,687,650.34 5.40
120,000,000.00
100,000,000.00
80,000,000.00
60,000,000.00
40,000,000.00
20,000,000.00
0.00
2017-18 2018-19
liquid assets current liabilty

5.2.3 Proprietory Ratio:
Proprietory Ratio= shareholder’s fund / total assets
Year Shareholder’s fund Total assets Proprietory Ratio

2017-18 33,791,210.00 12,894,684.93 2.62
2018-19 34,161,170.00 11,958,913.46 2.85
40,000,000.00
35,000,000.00
30,000,000.00
25,000,000.00
20,000,000.00
15,000,000.00
10,000,000.00
5,000,000.00
0.00
2017-18 2018-19
Shareholder’s fund Total assets

5.2.4 Return on Net Worth Ratio
Return on Net Worth = Net Profit after tax / Shareholders Fund × 100
Year Net Profit after tax Shareholder’s Fund Return on Net

Worth
2017-18 12,705,379.07 33,791,210.00 37.59%
2018-19 19,003,857.80 34,161,170.00 55.62%
40,000,000.00
35,000,000.00
30,000,000.00
25,000,000.00
20,000,000.00
15,000,000.00
10,000,000.00
5,000,000.00
0.00
2017-18 2018-19
Net Profit after tax Shareholder’s Fund

CHAPTER-6
LEARNING EXPERIENCE
In between 2nd and 3rd semester holidays the internship at Shimoga Arecanut Mandy
Merchants Co-operative Bank, for a period of 4 weeks has given a practical
knowledge about the functions of an organization. This internship has helped to gain
knowledge about various functional departments of the organization like
administration, accounts and operations, loan and advances. This exposure helped to
correlate theoretical concepts with the practice followed in the various departments.
Internship help to understood the importance of management functions like planning,

organizing, controlling, coordinating, and directing and leadership skills required for
decision making. And also, the importance of communication in organization and also
how the communication plays a major role in the organization. As study does not
focus on only one aspect of company, there was greater opportunity to see the good
working environment in the organization. The Departmental studies helped to
understand how the organizational functions doing successfully. The involvement,
help and support offered by the Shimoga Arecanut Mandy Merchants Co-operative
Bank employees gave a better understanding their functions responsibility as well as
what is really expected from their respective department.
The organization study helps to realized how the various departments are inter-
dependent for achieving the objectives of the organization. It feels a great opportunity
to study the whole organization and gain knowledge about the various departments at
Shimoga Arecanut Mandy Merchants Co-operative Bank and understood how the
bank till now is fulfilling the requirement by providing materials required by the
concerned department. The support and the handle on since during 4 weeks in the
organization has become a value addition in my MBA curriculum. And it was a really
great opportunity for us to learn some of the important aspects of banking and how it
works in reality. It helps to observed that technology brings more comfortable to the
bankers in rendering service to the customers.

Four weeks of internship at Shimoga Arecanut Mandy Merchants Co-Operative Bank

Ltd., allowed to grow personality, but it also helped to gain newskills in basic banking
and customer relationship-experience that did not previously have. But most
importantly it helps to gained a new sense of professionalism and the clearer view of
what it meant to be in the professional world.
Good learning experience, high growth opportunities, get to understand different

banking terms, employees benefits and friendly environment. It also provided varied
opportunities for different areas.

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Shimoga Arecanut Mandy Merchants Co-Operative Bank Ltd.

1.1 Introduction about Internship

The internship was doneatThe Shimoga Arecanut Mandy Merchants Co-operative

1.2 Objectives of the Internship

• To know about the overall organization structure of the bank.

1.3 Introduction to Banking

A bank is often described as “as organization which is engaged in accepting

PG Dept of Management Research Center, PESITM, Shivamogga Page 1

1.4 Definition of Banking

Dictionary meaning of word ‘The Oxford dictionary defines a bank “an

1.5 Origin of the Term Bank:

PG Dept of Management Research Center, PESITM, Shivamogga Page 2

Chart No 1.1 Structure of Indian Banking System

PG Dept of Management Research Center, PESITM, Shivamogga Page 3

1.6 Introduction of Co-operative Bank

It is an important instrument of banking access to the rural masses and it’s a

Co-operative banks are based on the values of self-help, self-responsibility,

The Co-operative Banking system in India is categorized by a comparatively

PG Dept of Management Research Center, PESITM, Shivamogga Page 4

often created by persons belonging to the same local or professional community or

1.7 History of Co-operative bank in India

1.8 Meaning\ Definition of Co-operative Bank:

“A Co-operative bank, as its name indicates is an Organization involving of a

PG Dept of Management Research Center, PESITM, Shivamogga Page 5

The Indian co-operative bank system consists of 3 sections.

1. Primary Credit Societies,

PG Dept of Management Research Center, PESITM, Shivamogga Page 6

Chart No 1.2 Types of Co-Operative Banks

1.8.1 Primary credit societies

1.8.2 Central co-operative banks;

PG Dept of Management Research Center, PESITM, Shivamogga Page 7

1.8.3 State co-operative banks;

1.9 Co-operative Movement in India

During the British Administer, Nicholson a British Officer in India recommended

PG Dept of Management Research Center, PESITM, Shivamogga Page 8

1.10 Co-operative Movement in Karnataka

A consumer co-operative society was additionally begun in Bangalore. Preceding

• Mumbai co-operatives Act,1925

PG Dept of Management Research Center, PESITM, Shivamogga Page 9

2.1 Background of the Company

• Regd. No. 874/DYR/MYS/64-65/24-11-1964,

PG Dept of Management Research Center, PESITM, Shivamogga Page 10

Industry name Finance-Banks-Urban co-operative

PG Dept of Management Research Center, PESITM, Shivamogga Page 11

2.2. Nature of Business Carried

2.3. Vision, Mission, and Quality policy of the Company

2.3.3 Quality Policy:

PG Dept of Management Research Center, PESITM, Shivamogga Page 12

2.4. Products/Service Profile

2.4.2 Lending of the bank:

The bank provides different type of loans which are as follows;

• Overdraft: Bank will offer two types of overdrafts.

PG Dept of Management Research Center, PESITM, Shivamogga Page 13

• Commercial Building loan:

2.4.3 Service Provided by the Bank:

• Payment of Direct tax: Bank will provide services to their customer in

• Locker facility: Locker facility is one of the main services provided by

2.5. Ownership Pattern

PG Dept of Management Research Center, PESITM, Shivamogga Page 14