Full Report

A MINOR RESEARCH PROJECT
SUBMITTED TO THE UGC
Sanctioned by University Grants Commission, Western Regional Office,

Ganeshkhind, Pune – 411 007
AN ANALYTICAL STUDY OF
HUMAN RESOURCE DEVELOPMENT
ASPECT IN THE HIMALAYA CREDIT
CO-OPERATIVE SOCIETY LIMITED,
NAGPUR.
(APRIL 2007 TO MARCH 2010)
Principal Investigator
Dr. Mrs. Ranjana Sahu
Asst. Professor in Commerce,
G.S. College of Commerce and Economics, Nagpur (M.S.)
DECLARATION CERTIFICATE
I hereby declare that this Minor Research Project “An Analytical study
of Human Resource Development Aspect in the Himalaya Credit
Co-operative Society Limited Nagpur (April 2007 to March 2010)” is
the result of my research work.
I have not submitted this project to any other University or Institution

for the award of any academic purpose.
[i]
Certificate Of The Head Of The Institution
This is to certify that G.S. College of Commerce and Economics

Nagpur is permanently affiliated college under Section 2(f) and
12(b) of U.G.C.. Dr. Mrs. Ranjana Sahu is regular and
permanent faculty member of our college. This Minor Research
Project “An Analytical Study of Human Resource Development
Aspect in the Himalaya Credit Co-operative Society Limited
Nagpur.(April 2007 to March 2010)” had been prepared after
the approval of U.G.C.
It is also certified that this project has not been submitted to any
other University or Institution for the award of any academic
purpose.
Dr. N. Y. Khandait
Principal
G.S. College of Commerce and Economics
Nagpur
[ii]
Acknowledgement
Preparation of project report on research topic can never be a
one man job and there is no exception to it. Though it is impracticable to
name all yet I owe my sincere gratitude to all those who have assisted,
advised and inspired me for the successful completion of this project work.
My fore-most gratitude is to U.G.C. for sanctioning this project.
I am indebted to Shri. Sanjay Bhargav, Chairman Shiksha Mandal Wardha
and Dr. N.Y. Khandait, Principal of the college for giving the opportunity
to carry out this project and for providing valuable guidance and
inspiration.
I will always remain indebted to Mr. Ajay Singh (member) for
his timely guidance and constructive suggestions throughout the course of
this project work.
I shall be failing in my duty if, I do not acknowledge the debt I
owe to Shri. Rajendra Dhote (BOD), for permitting me to undertake the
study of their organization.
I also feel indebted to Ms. Sushma Jharbade & Shri Subhash
S. Mankar, the directors, for their most valuable co-operation in providing
me the data, documents and other records without which this project report
could not have been completed.
Frequent discussion with the office bearer / members of
Board of Directors, President, Secretary & the staff member of all the
[iii]
branches of the Himalaya Credit Co-Operative Society Limited., Nagpur
has helped me a lot in arriving at clear conception and conclusion.
The credit of success of this project report also goes to all
those who have helped me directly or indirectly for its completion, whose
names are not mentioned here.
My heartfelt thanks to God, parents and my family members
for their blessings and continued support throughout the journey of this
project’s successful completion.

[iv]
PRELUDE
Mahatma Gandhi has said:
‘Suppose I have come by a fair amount of wealth – either by way of
legacy, or by means of trade and industry – I must know that all that
wealth does not belong to me; what belongs to me is the right to an
honourable livelihood, no better than that enjoyed by millions of others.
The rest of my wealth belongs to the community and must be used for the
welfare of the community’.
This forms the essence of the co-operative movement which is based on
the same principles of community camaraderie, mutual help, democratic
decision making and open membership.
India moves towards progressively ‘Knowledge Economy’. Skills and
Knowledge are the important driving forces of economic and social
development of any Country. The Eleventh Five Year Plan focused on
advancement of Skills and these Skills have to be relevant to the
emerging inclusive economic growth of Rural India. Cooperative is one
of the sectors, which renders services to the poor people and uplifts the
socio-economic status of members.
A nation is said to be strong and great not with physical wealth but which
has good quality of life of Human Resources. Growth of Credit
Co-operative Societies both vertically and horizontally is quite essential
[v]
for sound financial health of the country and for achieving the target of
inclusive growth which is impossible without human resource
development. Human Resource Development of Cooperative Societies
will help to create a better and economically efficient organization for
achieving the desired goals of sustainable development of the nation.
India by 2020 will be having the youngest population in the world and it
is heading towards knowledge economy and cashless economy posing
new challenges for credit co-operative societies. Therefore it is necessary
to study human resource development aspect of credit cooperative
societies and the operation of Co-operative banks for successful and
effective management of the available human resources to face the
existing competitive market.
The use of good practices of Governance has proved to be fundamental in
the success and continued existence of organizations and Co-operative
Societies are no exception to it. The basic objective of cooperative
organizations is to fulfill members’ social economic and cultural needs.
Cooperative governance represents a democratic system of management
when the exercise of authority is derived from its membership.
Good Governance in cooperatives call for enlightened members,
professional management, good relationship between Board and staff,
application of cooperative principles and values in the right spirit
alongwith strong internal capital. Good Governance in cooperative
[vi]
requires transparency in decisions, services, procedures and follow up
action, participation of members elected board and users, accountability
to members, customers and community as whole Good governance in
cooperatives involves the process of decision making and the process by
which decision are implemented or not implemented. The major
characteristics of good governance are participation, consensus oriented,
accountable, transparent, responsive, effective and efficient, equitable and
inclusive and follow the rule of law.
Undemocratic management, losses in business, poor resources, lack of
capital, lack of transparency, low levels of member participation,
centralisation of power, poor audit, ineffective reporting system and lack
of professionalism are the common problems existing in the cooperative
organizations which are not performing well.
A good human resource development climate and good governance is
essential in cooperatives to ensure that their goal to help the members’
economic, social, cultural needs and aspirations are achieved.
This study attempts to find out new facts and realities which will be very
much important for the benefit of both i.e., to the organizational
development & employees’ improvement / development to face the future
competitive market successfully and efficiently. Octapace an eight
dimensional tool has been used to study the human resource development
aspect in the Himalaya Credit- Co-operative Society Limited, Nagpur.
[vii]
This study includes the present situation of co-operatives and their
performance in India. It also throws light on the challenges faced by the
co-operatives in India in this globally competitive world and the
suggestions given will help the policy makers in their decision making
process in future. It will also serve as an area of interest to academicians,
researchers and students.

[viii]
INDEX
S. Contents Page
No. No.
1. Introduction 1-40
1.1 History of Cooperatives 2
1.2 Cooperative Democracy, Leadership and Self-reliance 4
1.3 Values and principles of the co-operatives 6
1.4 Role of Co-operatives in the banking system 9
1.5 Co-operative movement in India 13
1.6 Problems and Challenges of Co-operative Banks in India 14
1.7 Present Situation of Co-operative Societies in India 16
1.8 Evolution of the Urban Co-operative Bank Sector 16
1.9 Size and Complexity of Business-UCBs 19
1.10 Major Co-operatives in India 20
1.11 Performance of Co-operatives in Banking Sector (2001 to
2010) 21
1.12 Market Share of Urban Co-operative Banks in Total
Banking Sector 22
1.13 Present Performance of UCBs (till March 2015) 32
1.14 The problem of Dual Control 37
1.15 Profile of Himalaya Credit Co-operative Society Limited
Nagpur 38
2. Concept of Human Resource Management 41-47
2.1 Functions of HRM 44
2.2 Objectives of HRM 44
2.3 Scope of HRM 45
2.4 Significance of Human Resource Management 45
2.5 Need for HRM in Co-operatives 46
[ix]
S. Contents Page
No. No.
3. Concept of Human Resource Development 48-56
3.1 Origin of HRD 49
3.2 Features of HRD 49
3.3 Concept of HRD in Cooperatives 52
3.4 Need for HRD in Cooperatives 52
3.5 HRD Sub systems 52
4. Scope & Significance of Human Resource Development Aspect
in any Organisation 57-66
4.1 Scope of HRD 58
4.2 Objectives of HRD 58
4.3 HRD Functions 59
4.4 Significance of HRD in any organization 59
4.5 Significance of Human Resource Development for
Co-operatives 61
4.6 Importance of OCTAPACE in Organisation 62
5. Research Methodology 67-71
5.1 Statement of Problem 67
5.2 Scope of the study 67
5.3 Objectives of the study 67
5.4 Hypothesis 68
5.5 Data collection 69
5.6 Significance of the study 70
5.7 Limitations of the Study 71
6. Interpretation of Collected Data 72-82

6.1 Analysis 75
6.2 Interpretation of the collected data 80
[x]
S. Contents Page
No. No.
7. Conclusion 83-87
7.1 HR Climate 84
7.2 Octapace Culture 85
7.3 Motivation & Morale 86
8. Suggestions for improvement in HR climate for better working
and successful Environment 88-92
8.1 Suggestions for all the Credit Cooperative Societies 88
8.2 Recommendations for Himalaya Credit Cooperative
Society, Nagpur 89
8.3 Ending Remarks 91
9. References 93-95
10. Annexures 96-102
[xi]
LIST OF TABLES
S. Content Page
No. No.
1 List of Multi-State Co-operative Societies as on 31st May, 10
2012
2 Indian Cooperative Movement At a Glance : 2007-2008 12
3 Market share of UCBs in Banking Business 22
4 Market share of Urban Co-operative Banks in Banking Sector 23
as on March 31, 2010
5 State-wise and Grade-wise Distribution of Urban Co-operative 24
Banks as on March 31, 2011
6 State-wise and CRAR-wise distribution of Urban Co-operative 25
7 Centre-wise details of Urban Co-operative Banks having 26
Negative Networth
8 Details of Banking Licenses of Urban Co-operative Banks 27
cancelled during last 12 years
9 State-wise Distribution of Branches of Urban 28
Co-operative Banks - Position as on March 31, 2011
10 Performance of UCBs as per Ratings 31
11 Growth of UCBs 32
12 Deposits, Advances and Assets of top ten UCBs and bottom 33
ten Private Sector Banks
13 Range of loans granted by Scheduled Banks 34
14 Range of loans granted by Non-Scheduled Banks 34
[xii]
1. INTRODUCTION
"Cooperatives are a reminder to the international community that it is possible

to pursue both economic viability and social responsibility."
United Nations Secretary-General, Ban Ki-Moon.
The United Nations has declared that 2012 as the International Year of
Co-operatives and the words of Ban Ki-moon exhibit a totally different
approach that ‘Co-operatives Build A Better World’ in the present state when
selfish narrow motives may be smelt in each and every human activity. Rather
than rewarding outside investors, a co-operative shares its profits amongst the
members. Co-operatives give everyone an equal say.
“The International Year of Co-operatives is an opportunity for the co-operative
and mutualist movement to position itself as a sustainable economic model
capable of competing with other economic models in use today, which have
reached their limits. People want to work together to build a better world, with
greater respect for people and their environment. They are temperamentally
predisposed to co-operate and the movement must seize this opportunity."
Charles Gould, Director-general, International Co-operative Alliance
remarked
"The International Year of Co-operatives offers co-operatives across the world
a unique opportunity. By getting involved not only will individual businesses
be able to show that they are part of a global movement, they will also
contribute to a step change in the awareness of co-operatives and the
differences they make in every corner of the globe."
Abraham Lincoln had defined democracy as ‘of the people, for the people and
by the people.’ In the same way, Cooperative society can be defined as a
society ‘of the member, for the member and by the member.’ Cooperation is a
vast movement which promotes voluntary associations of individuals having
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common needs who combine towards the achievement of common economic,
social and cultural ends. Activity in a Cooperative spirit and in a commercial
spirit has distinction. In cooperative activity, the purpose is not to earn profit
but is a collective activity of the members for common purpose. No one is the
owner of the Cooperative activity but all are the members of such activity.
Cooperative movement is a socio-economic movement and cooperative society
is managed with democratic principles. (page no.4, “Cooperative Banking”,
Indian Institute of Banking and Finance, Mumbai, 2010 Macmillan Publishers
India Limited, Chennai.)
A Cooperative organization is an autonomous association of persons united
voluntarily to meet their common economic, social and cultural needs and
aspirations through a jointly-owned and democratically controlled enterprise.
Since inception of the movement, there is need for creating awareness and
acceptance of Human Resource Development to achieve the organizational
goals and objectives.
1.1 History of Cooperatives:

The International Cooperative Alliance (ICA) in its Statement on the Cooperate
Identity, in 1995, defines a cooperative as “an autonomous association of
persons united voluntarily to meet their common economic, social, and cultural
needs and aspirations through a jointly-owned and democratically-controlled
enterprise.”
The first recorded co-operative dates back to 1750 in France, where local
cheese makers in the community of Franche-Comté established a producer
cheese cooperative. Within the decade, co-operatives had developed in France,
United Kingdom, United States and Greece. In 1844 the Equitable Pioneers of
Rochdale Society (EPRS) was formed. The Co-operative movement was
started in 1844. A group of 28 weavers and other artisans in Rochdale were
facing poverty due to the industrial revolution. The tradesmen decided to group
together to open their own store selling food items that they couldn’t afford to
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buy on their own. The group based their shop ethics on a set a principles they
created called the Rochdale. With the goal of social improvement, twenty-eight
unemployed community members saw the opportunity to pool their limited
resources and attempt cooperation for the good of the group. Even though
co-operatives appeared in the century previous, Rochdale is seen as the first
‘modern’ cooperative since it was where the co-operative principles were
developed.
In 1895, International Cooperative Alliance (ICA), a non-governmental
organization was established as umbrella organisation to promote friendly and
economic relations between cooperative organizations of all types, nationally
and internationally. The major objective of the ICA is to promote and
strengthen autonomous cooperative organizations throughout the world.
Since its creation, the ICA has been accepted by cooperators throughout the
world as the final authority for defining cooperatives and for determining the
underlying principles, which give motivation to cooperative enterprise. In 1895,
the founding congress had 194 members; in the mid-1980s the ICA recorded a
membership of about 355 million individuals; in 1999, the ICA’s organizations
represented 750 million people; and since 2002 it was estimated that more than
800 million people are members of worker, agriculture, banking, credit and
saving, energy, industry, insurance, fisheries, tourism, housing, building,
retailer, utility, social and consumer cooperatives societies (Levin, 2002;
Encarta, 2005; and Wikipedia, 2006).
Co-operatives are bubbling up everywhere. There are more than 1.4 million
co-operative enterprises across the world to show exactly how the co-operative
model has a global impact on a local scale, are owned by their members, share
their profits, give people an equal say and operate in all areas of the economy.
This global co-operative sector, with a turnover of $1.6trillion, now secures the
livelihoods of 3 billion people that’s half the world’s population, has 1 billion
members worldwide and employs over 100 million people – that’s 20% more
than multinational enterprises.
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A co-operative is a group of people acting together to meet the common needs
and aspirations of its members, sharing ownership and making decisions
democratically. Co-operatives are not about making big profits for shareholders,
but creating value for customers – this is what gives co-operatives a unique
character. Co-operatives have local impact on a global scale.
1.2 Cooperative Democracy, Leadership and Self-reliance:

Cooperatives are ideal vehicles for democratization and economic
empowerment in developing countries: they instill basic democratic values and
methods, foster self- reliance through collective action; and shape relationships
between institutions and civil society that encourage participation and conflict
resolution. The resulting framework provides the foundation for a more secure
society and for economic growth.
A cooperative is “an autonomous association of persons united voluntarily to
meet their common economic, social and cultural needs and aspirations through
a jointly owned and democratically controlled enterprise. Cooperatives are
based on the values of self-help, self-responsibility, democracy, equality, equity
and solidarity. In the tradition of cooperative founders, members of
cooperatives believe in the ethical values of honesty, openness, social
responsibility and caring for others.”
Cooperatives put their values into practice through seven commonly accepted
principles, the second of which is democratic member control. Elaborating the
principle of “Democratic Control”, the ICA Commission headed by Professor
D.G. Karve clarified “Cooperative Societies are democratic organization.”
Cooperative members jointly set policies and make decisions. Men and women
serving as elected representatives are accountable to the membership. Members
have equal voting rights (one member, one vote).
Cooperative members own their business. They provide share capital, elect a
board of directors and receive the benefits of ownership through patronage
refunds based on extent of their transactions with the cooperatives.
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Cooperatives teach people how to resolve problems democratically and many
who learn democracy in cooperative “laboratories” go on to become political
leaders in their nations. In emerging democracies, Cooperative members learn
entrepreneurship and marketing principles. Cooperatives enable people with
limited resources to pool them so as to competitively participate in the
mainstream of a nation’s economic and political life.
When the bulk of the population in a developing country is rural, investing in
agricultural cooperatives is an excellent way to instill basic democratic values
and empower individuals while stimulating growth in agriculture - a key
building block for broadbased economic development.
The role of the leader has expanded to include coach, visionary, motivator,
strategist and team builder, while setting the best direction for the organization.
Effective and enlightened cooperative leadership is essential for the growth and
success of cooperatives. Effective leadership is a pre-requisite not only for
creating and nurturing a cooperative but also for providing a vision and
inspiring and guiding both the members and the management so as to enable
the cooperative to achieve its purpose. Cooperative leadership enables the
manager/ leader to empower people and maximize their own potential as well
as their staff’s while creating a learning culture within the workplace of people
acting together whose efforts move them towards a shared vision for mutual
benefit. Elected members of the board and office bearers, have not played the
role expected from them and have not been responsive to the aspirations of the
members in many cases.
Therefore, cooperatives have to reorient their functioning and management by
creating enlightened membership and professional managers. In order to
achieve this, the leadership should provide good governance and constantly be
innovative in running the cooperative enterprise. It is the leadership which
provides vision, initiative, motive force and dynamism to democracy and good
governance. The Cooperative Leadership model delivers incredible results,
such as an increase in profitability, performance and productivity as well as a
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decrease in internal conflicts, problems and attrition.
The concept of “Self- Reliance” has become very important for the growth and
success of cooperatives. In the present times, the cooperatives have to compete
in the market economy successfully. The cooperatives can function in self
reliant manner only when they will lessen their financial dependence on the
Government. For this, they will have to mobilize resources from various
quarters. They will have to enter into mutually - beneficial collaborations so
that this can be financially rewarding for them. Some of the successful
cooperatives in India like IFFCO, KRIBHCO have become self reliant. They
develop their own raw materials through research.
Their business diversification has been highly rewarding for them and they
have earned good profit in recent times. Dairy cooperatives in the country have
a strong self-reliant character. Due to their independent character with full
participation of its members, they become a strong model of self-reliance for
the cooperative movement of the country.
1.3 Values and principles of the co-operatives:

A co-operative is an autonomous association of persons united voluntarily to
meet their common needs and aspirations through a jointly-owned and
democratically-controlled enterprise. Cooperatives are based on the values of
self-help, self-responsibility, democracy, equality, equity and solidarity. In the
tradition of their founders, cooperative members believe in the ethical values of
honesty, openness, social responsibility and caring for others. (page no.4,
“Cooperative Banking”, Indian Institute of Banking and Finance, Mumbai,
2010 Macmillan Publishers India Limited, Chennai.)
1.3.1 Values: In reality, there is no conflict between cooperative values and

cooperative business. Both go together and each fulfils the other.
A Cooperative is a value-based organization. It is the presence of values in
socio-economic terms, which makes a cooperative organization unique. The
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basic values of cooperation are universal in nature and in application.
Cooperatives are based on the values of self-help, self responsibility,
democracy, equality, equity and solidarity. Cooperative members believe, in the
ethical values of honesty, openness, social responsibility, and caring for others
just as it is there in the tradition of their founders.
1.3.2 Cooperative Principles:

Cooperative movement is a socio-economic movement and co-operative
society is managed with democratic principles. The cooperative principles are
guidelines by which cooperatives put their values into practice.
(Page no. 4, Co-operative Banking, Indian Institute of Banking and Finance,
Macmillan Publishers India Limited, Chennai, 2011)
 1st Principle: Voluntary and Open Membership:
Cooperatives are voluntary organizations open to all persons able to use their
services and willing to accept the responsibilities of membership without
gender, social, racial, political, or religious discrimination. They accept their
obligation to allow membership to anyone who undertakes to fulfill the duties
assigned to membership. As an individual is free to join a Co-operative Society
and share its economic and social advantages, on an equal footing with other
members, he is in principle free to withdraw from it on just cause when he
finds that he no longer has any need of its services or when the Co-operative is
unable to supply the needs of the members. In a sense, the saving and loan
bank or credit society may be justified in refusing to admit an applicant known
not to be credit worthy or is personally unacceptable to the society on some
justifiable grounds. The essential consideration that if an individual has
interest in some specific field of service for which a Co-operative is formed, he
should be regarded as eligible for membership.
 2nd Principle: Democratic Member Control:
Cooperatives are democratic organizations controlled by their members, who
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actively participate in setting their policies and making decisions. The status of
all its members is equal and members have equal voting rights (one member,
one vote). Men and women serving as elected representatives are accountable
to the members for their functional aspects and submit their results to the
judgment of members. If the members are not satisfied, they have the authority
and power to criticize, to object and in extreme cases to replace their officials.
In a fully developed Co-operative unit, the management must rest in the hands
of members and all decisions should be taken by the cooperators themselves
with no external interference.
 3rd Principle: Member Economic Participation:
Members contribute equitably to the capital of their cooperative. At least part

of that capital is usually the common property of the cooperative. Members
usually receive limited compensation, if any, on capital subscribed as a
condition of membership. Members allocate surpluses for any or all of the
following purposes: developing their cooperatives, possibly by setting up
reserves, part of which at least would be indivisible; benefiting members in
proportion to their transactions with the cooperatives; and supporting other
activities approved by the membership.
 4th Principle: Autonomy and Independence:
Cooperatives are autonomous, self-help organization controlled by their

members. If they enter into agreements with other organizations, including
governments, or raise capital from external sources, they do on terms that
ensure democratic control by their members and maintain cooperative
autonomy.
 5th Principle: Education, Training and Information:
Cooperatives provide education and training for their members, elected

representatives, managers and employees so that they can contribute to the
development of their cooperatives. They inform the general public particularly
young people and opinion leaders- about the nature and benefits of cooperation.
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The Co-operative education must have the following inputs: knowledge
improvement, acquirement of technical skills and training of co-operative
conduct and behaviour. (page no. 4, Co-operative Banking, Indian Institute of
Banking and Finance, Macmillan Publishers India Limited, Chennai, 2011)
 6th Principle: Cooperation among Cooperatives:
Cooperatives serve their members most effectively and strengthen the

cooperative movement by working together through local, regional national
and international structures. In order to build an integrated cooperative system,
it is necessary that cooperatives should cooperate among themselves vertically
and horizontally for strengthening their organizations by way of joining
together, thinking together, investing together, planning together, working
together and equally distributing surplus together.
 7th Principle: Concern for Community:
Just as in case of company, profit making is no longer the sole objective but
company also has social responsibilities towards stakeholders similarly while
focusing on member needs and wishes, Cooperative works for the sustainable
development of their communities through policies approved by their members.
The cooperatives owe a special responsibility to ensure the sustainable
economic, social and cultural development of their communities.
1.4 Role of Co-operatives in the banking system:

Today, in an era when many people feel powerless to change their lives,
cooperatives represent a strong, vibrant, and viable economic alternative.
Cooperatives are formed to meet peoples’ mutual needs. They are based on the
powerful idea that together, a group of people can achieve goals that none of
them could achieve alone.
For over 160 years now, cooperatives have been an effective way for people to
exert control over their economic livelihoods. They provide a unique tool for
achieving one or more economic goals in an increasingly competitive global
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economy.
(a) The essence of the co-operative character of a UCB is that there is a
close identity between the owners and the customers. The founding
principle of co-operative banking i.e. mutual aid, coupled with the
objective to promote thrift and self help have helped to sustain the
prominence of UCBs through the years. Though functioning on
commercial lines, profit maximization is not the sole objective of UCBs.
Rather, their primary objective is the provision of affordable banking
facilities to their members and catering to their credit needs.
(b) There is, however, one area in which UCBs play a useful role. UCBs are
perceived as banks primarily intended for the small man. A large number
of their borrowers are persons of small means like small traders,
merchants, artisans, industrial workers, street vendors, self-employed
skill technicians like carpenters, mechanics etc.
(c) In fact the aggregate credit provided by UCBs to the priority sector
constitutes 45.9 per cent of the aggregate credit provided by them.
(d) UCBs therefore could be an important element in the programme of
financial inclusion. They provide scope and potential for prosperity,
self-reliance and empowerment to a vast section of the population who
are left out by the commercial banking system. The potential can be best
realized if the entry of new UCBs is directed towards those regions
where their representation is inadequate and if their governance is
strengthened and adequately supervised.
Table 1 List of Multi-State Co-operative Societies as on 31st May, 2012

S. No. State No. of Multi-State Co-operative Societies
National Level Federations 20
1 Andhra Pradesh 16
2 Assam 5
3 Bihar 8
4 Chattisgarh 1
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S. No. State No. of Multi-State Co-operative Societies
5 Chandigarh 9
6 Dadar Nagar Haveli 1
7 Delhi 62
8 Goa 4
9 Gujarat 17
10 Haryana 10
11 Himachal Pradesh 1
12 Jammu & Kashmir 1
13 Jharkand 2
14 Karnataka 15
15 Kerala 16
16 Madhya Pradesh 8
17 Maharashtra 296
18 Manipur 1
19 Meghalaya Nil
20 Mizoram Nil
21 Nagaland 1
22 Odisha 4
23 Punjab 3
24 Pondicherry 4
25 Rajasthan 41
26 Sikkim Nil
27 Tamil Nadu 85
28 Uttar Pradesh 48
29 Uttaranchal 2
30 West Bengal 32
Total 713 713
Source: Government of India, Ministry of Agriculture, (Department of Agriculture and
Cooperation)
From the above table it is clear that there are total 296 Multi-state cooperative
societies in Maharashtra alone, of them more than twenty are located in Nagpur.
More than 40% Multistate Co-operatives of India are there in Maharashtra.
11 |
Table 2 Indian Cooperative Movement At a Glance : 2007-2008
Number of Cooperatives (All Level) Rs. 5,95,215

Primary Agrl. And Credit Cooperatives Rs. 1,50,593
Primary Non-Credit Cooperatives (All Types) Rs. 4,41,125
Membership of Cooperatives (Grass root coops) 249.248 Million
Membership of Primary Agrl/Credit Cooperatives 183.369 Million
Membership Primary Non-Credit Cooperatives 65.879 Million
Share Capital (All Level & All Types) Rs. 3,37,192.6
Share Capital of Primary Credit Cooperatives Rs. 1,76,794.9
Share Capital of Primary Non-Credit Cooperatives Rs. 67,250.6
Govt. Participation in Primary Credit 4.39%
Cooperatives
Working Capital (Credit + Non Credit) Rs. 59,74,972.4
Reserves Rs. 5,46,240.7
Deposits Rs. 34,85,480.4
Villages Covered by Cooperatives 97%
National Level Cooperative Federations 21
State Level Cooperative Federations 386
District Level Cooperative Federations 3,111
Agricultural Credit 2006-2007 2007-2008

Production Credit Advanced (ST+MT)
Short -Term (ST) Rs. 4,07,959.6 Rs. 4,73,897.5
Medium -Term (MT ) Rs. 88,167.9 Rs. 1,02,527.3
Investment Credit Advanced (LT) Rs. 31,881.2 Rs. 20,211.0
Total Loans Advanced (ST+ MT+ LT) Rs. 5,28,008.7 Rs. 5,96,635.8
Share of Cooperatives in National Economy

(Percentage
(%))
Rural Network (Villages Covered) 97
Agricultural Credit Disbursed by Cooperatives 19
Fertiliser Distributed 36
Fertiliser Production (3.169 Lakh MT) Nutrient 26.3
Sugar Produced (6.418 Million Tonnes –As on 31 March 2009) 46.6
Capacity Utilisation of Sugar Mills (As on 31 March 2009) 59.8
Wheat Procurement (6.926 Million Tonnes) 33.5
Animal Feed Production/Supply 50
Retail Fair Price Shops (Rural + Urban) 20.3
Milk Procurement to Total Production 8.19
Milk Procurement to Marketable Surplus 10.5
Ice Cream Manufacture 45
12 |
(Percentage
(%))
Oil Marketed (branded) 49
Spindleadge in Cooperatives ( 3.534 Million) 10.3
Handlooms in Cooperatives 54
Fishermen in Cooperatives (active) 23
Rubber Procured and Marketed 18.5
Arecanut processed and marketed( 3.65 lakh tonnes) 15
Salt Manufactured (18,266 Metric Tonnes) 7.6
Direct Employment Generated 1.22 Million
Self-Employment Generated for persons 15.47 Million
Source: Government of India, Ministry of Agriculture, (Department of Agriculture and
Cooperation)
Thus it is clear from the above table that co-operatives have reached to 97% of
the villages and have imparted employment to 16.69 Million persons.
Co-operatives are generally related to agriculture production and marketing.
1.5 Co-operative movement in India:

The cooperative movement in India was formally introduced with the
promulgation of Cooperative Societies’ Act, 1904. Before this Act, cooperative
activities like Devarai or Vanarai, Chit funds, Bhishies, Phads were prevalent in
several parts of India. Cooperatives in India are a subject of States under the
Constitution of India and so the laws as well as their implementation differ
from state to state and make it more complicated.
Year 2012 was declared as International year of Cooperative Societies.
Anyonya Co-operative Bank Limited (ACBL) located in the city
of Vadodara (formerly Baroda) in Gujarat, is the first co-operative bank in
India. The Reserve Bank of India ordered the bank to stop most of its
operations under Section 35 of the Banking Regulation Act, on 14 September
2007, and ACBL closed in March 2008. Its annual general meeting in
September 2008 formed a committee to re-open the bank.
ACBL was established in 1889 with the name Anyonya Sahayakari Mandali
Co-operative Bank Limited, with a primary objective of providing an
13 |
alternative to exploitation by moneylenders for Baroda's residents.
When it was started in 1889 it had just 23 members and 76 Indian rupees (Rs)
of capital, which grew to Rs 873 in the first year. By 2006, it had grown up to
more than 23,000 share holders and more than ten branches which are mainly
located within Baroda city and some small towns surrounding it. Its
administration is governed by a group of nine board directors, three of whom
are elected every year for a three-year term.
India is an agrarian economy where almost 65% of the population depends on
agriculture directly or indirectly. Lack of institutional finance to these
agriculturists led to mounting distress and discontent and the only answer to
satisfy their need was the formation of cooperatives. This was the transforming
age of global as well as Indian economy with for sure lots of positive
dimensions but in relation to the cooperatives there was a misconception that
they may not be able to deliver in the changed globalized market conditions. In
the time when we are talking about inclusive growth, Cooperatives found no
place in Eighth Five Year Plan onwards. In fact Cooperatives are the vital
agencies for facing the challenges posed by the globalization and they are the
best channels in a democratic country like India helping in generation and
utilization of social capital for further future development.
1.6 Problems and Challenges of Co-operative Banks in India:

The Co-operative Banks in India is ailing with a number of problems.
Generally, due to frequent amendments in regulatory rules by Reserve Bank of
India the Co-operative banks have to deposit huge security amount due to
which these banks have to minimize their business circulation money.
Moreover, due to recent circumstances which lead to the closure of some
co-operative banks, the RBI has imposed strict legal framework by which the
business is more difficult. Now the money lending procedure which was earlier
easy has become difficult.
14 |
The following are the problems and challenges faced by the Cooperatives in the
21st Century:
 Sick units: this is the major problem that the number of Cooperatives is
declining and a large number of cooperatives have become sick and

nonviable.
 Member-related: there is lack of awareness among members, there is no
speedy exit of non-members they continue to be in the members list

representing false figure of number of members, majority of the members
are not active and there is lack of communication among them.
 Lack of good governance: role and responsibilities of board of director and
manager is not clearly defined leading to inadequate governance.
 Lack of acceptance: the existence of cooperatives can solve many economic
and social problems but there is lack of acceptance by public at large and
also the policymakers fail to recognise the cooperatives as economic
institutions.
 Lack of capital: cooperatives fail to make efforts for capital formation and
as far as members are concerned they have right to cast just one vote
irrespective of their equity and stake.
 Lack of professionalism: one of the serious problems is that cooperatives
fail to attract and retain competent professionals further resulting in

multiple problems.
 Loopholes and the restrictive provisions in the Act: there are loopholes and
restrictive provisions in the Cooperative Societies Act which results in

excessive governmental control in its tiered structure.
 Lack of cost competitiveness: cost reduction for increasing the surplus is
quite necessary but this is not so in case of cooperatives as they lack cost
competitiveness due to overstaffing.
15 |
 Political influence: Administered by the state the cooperatives cannot stay
in isolation with the undue political influence in its management.
1.7 Present Situation of Co-operative Societies in India:

Mahatma Gandhi has said: ‘Suppose I have come by a fair amount of wealth
– either by way of legacy, or by means of trade and industry – I must know that
all that wealth does not belong to me; what belongs to me is the right to an
honourable livelihood, no better than that enjoyed by millions of others. The
rest of my wealth belongs to the community and must be used for the welfare
of the community’.
This forms the essence of the co-operative movement which is based on the
same principles of community camaraderie, mutual help, democratic decision
making and open membership.
The Primary (Urban) Co-operative Banks popularly known as Urban
Co-operative Banks (UCBs) were brought under the regulatory ambit of RBI
by extending certain provisions of the Banking Regulation Act, 1949 (BR Act)
effective from March 1, 1966. UCBs are at the base level of the banking system
in India providing basic banking facilities to people of small means particularly
urban poor. The UCB sector is unique in the sense that there is a significant
degree of heterogeneity among the banks in this sector in terms of size,
geographical distribution, performance and financial strength. The sector has
unit banks, multi-branch UCBs operating within a state and multi-state UCBs
with the area of operation in more than one state.
1.8 Evolution of the Urban Co-operative Bank Sector:

Although, India is considered to have one of the oldest community-banking
movements in the world with UCBs starting way back in 1889, the real growth
picked up after this sector was brought under the purview of the BR Act in
1966. The evolution may be broadly divided into three phases - the growth
16 |
phase, crisis phase and consolidation phase.
1.8.1 Growth Phase (1966-2003):

In 1966, there were about 1100 UCBs with deposits and advances of Rs.1.67
billion and Rs.1.53 billion respectively. The Reserve Bank pursued a liberal
licensing policy, especially pursuant to the recommendations of the Marathe
Committee, which suggested dispensing the ‘one-district, one-bank’ approach.
This shifted the stance of the policy to assess the ‘need and potential’ in an area
for mobilising deposits and purveying of credit for a new UCB. In 1993, before
the liberalisation of the bank licensing policy, there were 1311 UCBs having
deposits and advances of Rs. 111.08 billion and Rs. 87.13 billion, respectively,
which increased to 1926 UCBs with deposits and advances of Rs. 1020.74
billion and Rs. 649.74 billion, respectively by end-March, 2004. This is
because after the liberalisation of licensing norms in May 1993, 823 bank
licences were issued up to June 2001.
1.8.2 Crisis Phase (2003-2008):

However, it was observed that nearly one-third of the newly licensed UCBs
became financially unsound within a short period. In the light of the experience
and the prevailing financial health of the UCB sector after the Madhavpura
Mercantile Co-operative Bank episode, it was announced in the Annual Policy
Statement 2004-05 that the Reserve Bank would consider issuance of fresh
licences only after a comprehensive policy on UCBs, including an appropriate
legal and regulatory framework for the sector, was put in place. No fresh
licences have been issued thereafter for setting up new UCBs, although the
existing applications received from unlicensed UCBs were disposed of.
The number of UCBs declined from 1926 as at end- March 2004 to 1770 by
end- March 2008. The deposits and advances of urban banks increased only
marginally during the same period from Rs.1020.74 billion and Rs. 649.74
billion to Rs. 1398.71 billion and Rs. 904.44 billion, respectively.
17 |
The Reserve Bank took several steps to strengthen the sector during this period.
In order to improve the financial soundness of the UCB sector, the Reserve
Bank of India has been entering into Memoranda of Understanding (MoU) with
all State Governments and the Central Government since 2005. The MoUs
facilitated coordination of regulatory policies and actions through the
mechanism of TAFCUBs, a comprehensive set of capacity building initiatives,
and measures to bring in efficiency through adoption of technology. This phase
also ushered in voluntary consolidation in the sector by the merger of
non-viable UCBs with financially sound and well-managed ones.
The RBI introduced the Graded Supervisory Action (GSA) framework in 2003
in lieu of classification of UCBs into Weak and Sick UCBs. Accordingly, UCBs
were classified into four grades - Grade I, II, III and IV depending on their
financial conditions. GSA envisaged supervisory measures to be taken with
respect to UCBs classified in Grade III and IV when certain levels of CRAR,
net NPA, profitability or default in CRR/SLR were breached. UCBs were
subjected to supervisory action such as prohibition from expansion of Area of
Operation, opening new branches, prescribing lower exposure limits and
restrictions on dividend based on this classification. With the introduction of
Rating Model, GSA was replaced by Supervisory Action Framework (SAF) in
2012 wherein supervisory action was initiated based on various trigger points
such as CRAR, gross NPA, CD ratio, profitability and concentration of deposits.
SAF was reviewed and modified in 2014 by advancing the trigger points for
imposing directions and cancellation of licence.
1.8.3 Consolidation Phase (2008 onwards):

As a result of the new initiatives and sustained efforts by RBI, the number of
financially weak banks in the UCB sector declined. Further, due to
consolidation in the sector on account of closure and merger, the number of
UCBs came down from 1770 as at end-March 2008 to 1589 as on March 31,
2014 and further to 1579 by end-March 2015. However, the deposits and
18 |
advances of urban banks increased from Rs. 1398.71 billion and Rs. 904.44
billion as of end-March 2008 to Rs. 3155.03 billion and Rs. 1996.51 billion,
respectively, as on end-March 2014. Incidentally, mergers of as many as 119
UCBs have been effected till date after 2005.
1.9 Size and Complexity of Business-UCBs:

Ever since the UCBs were brought under the purview of the BR Act, 1949 with
effect from March 1966, they have been growing in size, scale and complexity
of business. The total deposits and advances of the UCB sector which together
constitutes its business size grew from Rs. 1398.71 billion and Rs.904.44
billion as on March 2008 to Rs. 3155.03 billion and Rs 1996.51 billion as on
March 2014 registering a growth of 125.6% and 120.7% respectively. However,
this growth was not uniform across the UCB sector as a few UCBs grew
exponentially during the period. As such, some UCBs have shown such
unprecedented growth in their balance sheet size over the years, that they have
acquired the size of commercial banks.
The global financial crisis of 2007 brought into debate the concept of “Too big
to fail”. The world over, the debate started revolving around the size of the
financial entity which might pose undue risk to the system and what additional
regulatory prescriptions they might be subjected to. In the commercial banking
space, this gave birth to new financial entities such as G-SIBs (Global-
Systematically Important Banks) and D-SIBs (Domestic-Systematically
Important Banks). Regulators also prescribed higher capital requirements for
such systemically big and important financial entities. Considering that some
UCBs have acquired the size akin to commercial banks, they may pose a risk to
the system due to their scale and complexity of business. In view of this, the
time was opportune to reflect on the appropriate size up to which a UCB may
be allowed to grow without undue risk to the system. This became all the more
relevant due to the weak resolution regime with respect to UCBs. In case of
commercial banks, the present regulatory and legal framework provides
19 |
reasonable power to RBI for an early resolution. However, this is not true in
case of UCBs, where the resolution powers lie with the State Government/
Central Government.
Considering the restricted legislative powers, the Reserve Bank has drawn up a
somewhat different regulatory framework for UCBs. This recognises the
limitations of the sector and is also largely consistent with the general needs of
the clientele of the UCBs. However, with the growth in their balance sheets and
ability to attract relatively larger borrowers, some of the UCBs now have high
aspirations to compete with commercial banks and they expect RBI to provide
a regulatory framework akin to that for commercial banks. Thus it becomes
necessary to ensure that UCBs balance their growth ambitions commensurate
with the risks that they undertake. The growth of the sector also has to be
consistent with the legal framework and regulatory parameters. Keeping history
in mind and the time required for resolving an issue with UCB vis-a-vis a
Commercial Bank at least with regard to depositors, RBI has been wary of
allowing the unrestrained growth of UCBs.
1.10 Major Co-operatives in India:

Truly remarked by Mr. Vaikunth Mehta one of the doyens of Indian
Co-operative movement that “Co-operation is a vast movement which
promotes voluntary associations of individuals having common needs who
combine towards the achievement of common economic ends.”
India has seen huge growth in Cooperative Societies since Independence
particularly in the field of agriculture dairy marketing as well as banking.
Cooperative banks in India serve both the rural and urban societies. It is indeed
a matter of pride that there are the greatest number of cooperatives in
Maharashtra State and Asia's first cooperative sugar factory was formed in
Ahmednagar district in western Maharashtra but at the same time we should
also learn a lesson from Sugar Cooperatives in Maharashtra which once
contributed 95% of the total sugar production is now on its death bed row
20 |
because of mismanagement and corruption. Unprofessional management, lack
of foresightedness and absence of decision-making process are the major
problems being faced by Credit Cooperative Societies which should be of
prime concern for all. It should change the policy of "profits for the company
but losses to be borne by the government" which has made a number of these
operations inefficient.
• Aavin(Tamil:ஆவின்) is the trademark of the Tamil Nadu Co-operative
Milk Producers' Federation Limited.

• Adarsh Co-operative Bank.
• Amul.
• Anyonya Co-operative Bank Limited.
• Horticultural Producers' Cooperative Marketing and Processing Society.
• Indian Coffee House.
• Indian Farmers Fertiliser Cooperative Limited.
• Kaira District Co-operative Milk Producers' Union.
• Karnataka Milk Federation(KMF).
• Kerala Co-operative Milk Marketing Federation (KCMMF).
• KRIBHCO.
• Pratibha Mahila Sahakari Bank.
• Sant Muktabai Sahakari Sakhar Karkhana.
• Shri Mahila Griha Udyog Lijjat Papad.
• Vasudhara Dairy.
1.11 Performance of Co-operatives in Banking Sector (2001 to 2010):

Urban Co-operative Banks (UCBs) are at the base level in the 3-Tier structure of
co-operatives in India and for this reason they are referred to as Primary (Urban)
Co-operative Banks.The middle and apex tiers in the co-operative structure are
the District Central Co-operative Banks (DCCBs) and the State Co-operative
Banks (StCBs) respectively. In view of this hierarchical structure, the DCCBs
and StCBs act as higher financing agencies for UCBs. As the names indicate, the
DCCBs and StCBs are restricted to the District and State for the purpose of their
banking operations (area of operation).This has restricted the geographical
growth beyond the District for DCCBs and beyond State for StCBs. On the other
hand, the base level banks, i.e.UCBs, have no restrictions on geographical
21 |
growth. As on March 31, 2011, there were as many as 42 multi-State UCBs and
this number is increasing every year. The geographical growth obviously
increases the volume of banking business of UCBs. As a result a few of the
UCBs have grown bigger than some of the Scheduled Commercial Banks.
The cause of concern in UCBs mostly relates to non-professional management.
This in turn results in relatively weak internal control and risk management
systems in the UCBs. Therefore, the incidence of failure of banks in India has
been the highest in urban banking sector vis-à-vis other banking sectors.
1.12 Market Share of Urban Co-operative Banks in Total Banking

Sector:
The business growth of UCBs was not, however, commensurate with the overall
growth in the banking sector. There has been a gradual fall of the share of UCBs’
business in the overall business of the banking sector. Despite the presence of
large number of UCBs, their share in the total deposits and advances of the
banking sector is insignificant and the share is reduced year after year.
Table 3 Market Share of Urban Co-operative Banks in Banking Business in
Banking Sector (In Percentage)
As on UCBs DCCBs & RRBs Commercial
March 31 State CBs Banks
2001 6.3 7.2 2.9 83.6
2002 6.4 7.2 3.0 83.4
2003 6.3 7.0 3.0 83.7
2004 5.8 6.6 3.1 84.5
2005 5.3 6.3 3.1 85.3
2006 4.6 5.4 2.9 87.2
2007 4.0 4.7 2.7 88.6
2008 3.7 4.1 2.7 89.5
2009 3.4 3.9 2.6 90.1
2010 3.5 3.7 2.7 90.1
Source RBI publications
Above table shows that from the market share of 6.3 per cent as on March 31,
2001, it had reduced to 3.5 per cent as on March 31, 2010.This reflects to a large
extent the effect of the policy of not permitting UCBs, including the healthy and
22 |
well managed ones, to open new branches for six years contributing thereby to
their inability to garner their share in the growing economy.
Table 4 Market share of Urban Co-operative Banks in

Banking Sector as on March 31, 2010
Urban Rural Regional Rural Scheduled

Co-operative Co-operative Banks Commercial
Banks Banks Banks
1674 Banks 401 Banks 82 Banks 83 Banks
Share in Total Deposits (In %)
3.5 3.7 2.7 90.1
Share in Total Loans and Advances (In %)
2.9 3.8 2.1 91.2
Above table makes it clear, despite the fact that the UCB sector has the
maximum number of entities as compared to any other group, its market share
continues to be meagre. This is to be seen in the light of the fact that almost half
of the UCBs are unit banks and the total number of branches of the 1674 UCBs
as at March 31, 2010 is around 7900 branches as against over 77000 branches of
just 83 scheduled commercial banks. Another reason may be that due to the poor
capital base of UCBs, coupled with individual and group credit exposure
ceilings they are not in a position to lend high value advances. The other reason
could be that the clientele of these banks is mainly confined to the lower and
middle strata of the society.
 Geographic Distribution:
The table below shows the geographic distribution of UCBs. It indicates that
UCBs are concentrated in five states, namely Andhra Pradesh (6.4%), Gujarat
(14.8%), Karnataka (16.9%), Maharashtra (32.8%) and Tamil Nadu (7.8%)
which collectively account for 78.7 per cent of all UCBs.
23 |
Table 5 State -wise and Grade-wise Distribution of Urban Co-operative
Sl. State Grade Grade Grade Grade Total
No. I II III IV UCBs
1 Andhra Pradesh 52 45 5 4 106
2 Assam 4 3 1 0 8
3 Bihar 2 1 0 0 3
4 Chhattisgarh 7 3 2 0 12
5 Gujarat 60 155 11 17 243
6 Goa 3 2 0 1 6
7 Haryana 1 4 0 2 7
8 Himachal Pradesh 3 1 0 1 5
9 Jammu & Kashmir 3 0 0 1 4
10 Jharkhand 2 0 0 0 2
11 Karnataka 112 108 35 13 268
12 Kerala 41 12 5 2 60
13 Madhya Pradesh 16 17 13 6 52
14 Maharashtra 301 105 78 55 539
15 Manipur 1 1 1 0 3
16 Meghalaya 3 0 0 0 3
17 Mizoram 0 1 0 0 1
18 New Delhi 12 1 2 0 15
19 Orissa 2 3 5 2 12
20 Puducherry 1 0 0 0 1
21 Punjab 1 3 0 0 4
22 Rajasthan 32 4 1 2 39
23 Sikkim 1 0 0 0 1
24 Tamil Nadu 107 18 1 3 129
25 Tripura 0 1 0 0 1
26 Uttarakhand 3 2 0 0 5
27 Uttar Pradesh 46 9 7 8 70
28 West Bengal 30 2 5 9 46
Total 845 502 172 126 1645
As it is clear from the above table that out of 539 total UCBs in Maharashtra
56% belong to grade I and 19% belongs to grade II as compared to 59% and
20% respectively for grade I and grade II of the nation’s Co-operatives.
Maharashtra state has 64% of the country’s total co-operatives.
24 |
 Capital Adequacy:
The table below gives the state-wise distribution of UCBs in terms of capital
adequacy. It will be seen that a majority of the UCBs (91.3%) now comply with
the regulatory prescription of a minimum CRAR of 9 percent. Some of the
UCBs which previously had a negative net worth have also reported positive
CRAR by raising Tier II capital through innovative instruments like Long Term
Deposits permitted by the Reserve Bank of India.
Table 6 State-wise and CRAR-wise distribution of Urban Co-operative

State/ Region No. of UCBs No. of UCBs No. of UCBs No. of UCBs No. of Total
with CRAR with CRAR with CRAR with CRAR UCBs No.
Below 3% and 6% and 9% and with of
3% above but above but above but CRAR >= UCBs
< 6% < 9% < 12% 12%
Andhra Pradesh 4 1 4 5 92 106
Assam 0 0 0 3 5 8
Bihar 0 0 0 0 3 3
Chhattisgarh 0 0 0 0 12 12
Gujarat 10 5 0 4 224 243
Goa 1 0 0 2 3 6
Haryana 0 0 0 0 7 7
Himachal Pradesh 0 0 0 3 2 5
Jharkhand 0 0 0 0 2 2
Jammu & Kashmir 1 0 0 2 1 4
Karnataka 7 1 5 17 238 268
Kerala 2 1 4 32 21 60
Madhya Pradesh 2 1 1 3 45 52
Maharashtra 37 13 11 80 398 539
Manipur 0 0 0 1 2 3
Meghalaya 0 0 0 0 3 3
Mizoram 0 0 0 0 1 1
New Delhi 0 0 1 1 13 15
Orissa 2 0 1 3 6 12
Pondicherry 0 0 0 1 0 1
Punjab 0 0 0 0 4 4
Rajasthan 2 0 0 5 32 39
Sikkim 0 0 0 0 1 1
25 |
State/ Region No. of UCBs No. of UCBs No. of UCBs No. of UCBs No. of Total
with CRAR with CRAR with CRAR with CRAR UCBs No.
Below 3% and 6% and 9% and with of
3% above but above but above but CRAR >= UCBs
< 6% < 9% < 12% 12%
Tamilnadu 3 1 3 22 100 129
Tripura 0 0 0 0 1 1
Uttar Pradesh 4 0 1 8 57 70
Uttarakhand 0 0 0 1 4 5
West Bengal 9 1 2 3 31 46
Grand Total 84 24 33 195 1309 1645
Per cent Share 5.2 1.5 2 11.9 79.4 100
As it is clear from the above table that out of the total of 539 urban co-operatives in
Maharashtra 74% (398) urban cooperatives are with CRAR >= 12% which is a good
sign.
 Urban Co-operative Banks with Negative Networth
Table 7 Centre-wise details of Urban Co-operative Banks having Negative

Networth
S. Name of the March March March March March
No. Regional Office 31, 2007 31, 2008 31, 2009 31, 2010 31, 2011
1 Ahmedabad 27 27 20 16 13
2 Bangalore 22 22 12 10 6
3 Bhopal 2 5 2 4 6
4 Bhubaneswar 3 4 3 2 2
5 Chandigarh 2 2 2 1 0
6 Chennai 0 2 3 4 2
7 Dehradun 1 1 0 0 0
8 Guwahati 1 1 1 1 0
9 Hyderabad 8 8 5 5 3
10 Jaipur 0 2 2 2 2
11 Jammu 0 0 0 0 0
12 Kolkata 9 9 9 8 3
13 Lucknow 0 4 4 6 6
14 Mumbai 52 52 33 34 32
15 Nagpur 27 27 17 16 11
26 |
S. Name of the March March March March March
No. Regional Office 31, 2007 31, 2008 31, 2009 31, 2010 31, 2011
16 New Delhi 1 1 0 0 0
17 Patna 0 0 0 1 0
18 Raipur 2 2 2 1 0
19 Thiruvapuram 0 0 0 1 2
Total 157 169 115 111 88
The table above gives details of the state-wise distribution of UCBs with
negative networth. It is clear that there has been continuous reduction in banks
having negative networth mainly due to up-gradation, amalgamation and
liquidation.
 Licenses Cancelled:
This table given under gives details of banking licenses of UCBs cancelled
during the last 12 years. The figures do not include the number of license
applications rejected in respect of existing unlicensed banks, whose number
came down from 181 in September 1999 to three as on March 31, 2011 (and
two as on June 30, 2011). It may be noted that out of the 204 UCBs whose
licenses were cancelled or which were merged with other UCBs since the year
2000, 100 UCBs were established after 1993 i.e. after the liberalization in grant
of licenses following the recommendations of the Marathe Committee
Table 8 Details of Banking Licenses of Urban Co-operative Banks

cancelled during last 12 years*.
Year ended No of licences No of UCBs TOTAL
March 31 Cancelled Merged
2000 4 0 2
2001 0 0 0
2002 0 0 0
2003 4 0 4
2004 25 0 25
2005 5 0 5
2006 8 4 12
27 |
Year ended No of licences No of UCBs TOTAL
March 31 Cancelled Merged
2007 22 15 37
2008 23 27 50
2009 19 22 41
2010 22 13 35
2011 2 11 13
2011(Till June 30, 4 3 7
2011)
TOTAL 136 95 231
* Provisional data as reported by Regional Offices
The above table makes it clear that total 136 licenses of non performing
co-operative banks have been cancelled and 95 under performing co-operative
banks were merged during twelve years which shows that government is giving
due consideration to this sector so as to benefit the society.
 Branches:
Table 9 State-wise Distribution of Branches of Urban Co-operative

Banks - Position as on March 31, 2011
State/ Total No. of Branches- Total Districts Districts
Union Territory UCBs Population Centre-wise Branches Covered not
A B C D covered
1. Andhra Pradesh 106 121 39 43 57 260 21 2
2. Assam 8 16 0 4 2 22 8 20
3. Bihar 3 4 0 0 0 4 2 36
4.Chhattisgarh 12 12 7 3 1 23 8 10
5. Goa 6 5 6 6 49 66 2 0
6. Gujarat 243 433 55 242 123 853 24 1
7. Haryana 7 1 6 10 0 17 7 13
8. Himachal 5 0 0 1 9 10 4 8
Pradesh
9. Jammu & 4 0 13 0 6 19 6 16
Kashmir
10. Jharkhand 2 1 0 0 1 2 2 22
11. Karnataka 268 201 129 171 334 835 30 0
12. Kerala 60 0 30 35 293 358 14 0
13. M.P. 52 43 10 18 19 90 27 23
28 |
State/ Total No. of Branches- Total Districts Districts
Union Territory UCBs Population Centre-wise Branches Covered not
A B C D covered
14. Maharashtra 539 1677 713 941 1171 4502 36 0
15. Manipur 3 0 0 9 1 10 2 7
16. Meghalaya 3 0 0 2 4 6 3 4
17. Mizoram 1 0 0 0 1 1 1 7
18. New Delhi 15 78 0 0 0 78 1 0
19. Orissa 12 23 6 11 6 46 12 18
20. Punjab 4 12 0 6 1 19 4 16
21. Puducherry 1 0 0 1 4 5 1 4
22. Rajasthan 39 37 35 46 83 201 24 9
23. Sikkim 1 0 0 2 1 3 2 2
24. Tamilnadu 129 19 75 0 225 319 33 3
25. Tripura 1 0 0 2 0 2 1 4
26. Uttarakhand 5 0 4 10 47 61 8 5
27. U.P. 70 96 35 54 57 242 39 33
28. West Bengal 46 29 9 67 0 103 11 8
Total 1645 2808 1172 1622 2494 8157 333 271
Note:
Category-wise Population Centre:
Centre A: Population over 10 lakh. Centre B: Population five lakh and above but below 10 lakh
Centre C: Population one lakh and above but below five lakh. Centre D: Population below one lakh
The table above gives a state-wise distribution of branches of UCBs

categorised by population centres. The data reveals that the UCBs are located
in 28 States/Union Territories out of the total 35 States/Union Territories in the
country. The seven States/Union Territories where the UCBs do not have
presence included (1) Andaman & Nicobar Islands, (2) Arunachal Pradesh, (3)
Chandigarh, (4) Dadra and Nagar Haveli, (5) Daman and Diu, (6)
Lakshadweep, and (7) Nagaland. The UCBs located in States/Union Territories
have not been evenly distributed from the angle of branch network. There are
as many as 271 districts (45%) out of the total 604 districts, which are not at all
covered by the UCBs’ branches in the States/Union Territories, where UCBs
are already functioning. There are a few States/Union Territories, (viz; Delhi,
Goa, Karnataka, Kerala, and Maharashtra) where all the districts have UCBs’
branches.
29 |
 Key Points:
The tables above present the following important points about co-operative
banks in India
(a) Heterogeneity is a striking characteristic feature of the UCB structure.Almost
half of all branches of UCBs, around 60 per cent of total extension counters and
more than 85 per cent of ATMs of UCBs are located in Maharashtra.Of the
remaining states, UCBs have a significant presence in Andhra Pradesh, Gujarat,
Karnataka, Kerala, Tamil Nadu and Uttar Pradesh and somewhat lower presence
in Rajasthan and West Bengal.
(b) Even within the states in which UCBs operate, 45 per cent of districts are not
covered by UCBs.There are 14 states where the un-banked districts constitute
more than 50 per cent of the total districts in the state.
(c) If we consider centres within states where the population is less than 5 lakh,
there are seven states viz. Assam, Bihar, Chattisgarh, Haryana, Punjab, Tripura
and West Bengal where the number of branches in such centres is less than 10
per cent of the total number of branches in the state.
(d) Only 57.6 per cent of the total UCBs can be considered as sound UCBs. A
sound UCB can be assumed to have the following characteristics:
(i) A CRAR of nine per cent or more;
(ii) Gross NPAs of less than 10 per cent of gross advances;
(iii) Continuous record of profits in the last three years; and
(iv) No. defaults in maintenance of CRR and SLR.
(e) A classification of UCBs by size of deposits shows that UCBs which have
deposits of ` 100 crore or less constitute 78 per cent of the total number of UCBs
but they account for only 17.7 per cent of the total deposits and only 23.8 per
cent of the advances of the UCB sector. It also shows that there are only 29
UCBs which have deposits in excess of ` 1000 crore but they account for 39.5
per cent of the total deposits and 47.4 per cent of the total advances of the UCB
sector.
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(f) UCBs as a class account for only 3.5 per cent of the total deposits and only
2.9 per cent of the total advances of the banking system. Therefore, as many as
1282 UCBs, which have deposits of up to Rs.100 crore account for only 0.6 per
cent of deposits and 0.7 per cent of advances of the banking system.
(g) UCBs are rated according to their financial and operative performance with
Rating A reflecting the soundest UCBs and Rating D the weakest UCBs. When
the ratings are related to UCBs grouped by size of deposits, the following picture
emerges.
Table 10 Performance of UCBs as per Ratings
Deposit Size Total No. C & D Rated Percentage
( in crore) of UCBs UCBs (3) as % of (2)
(1) (2) (3) (4)
Up to 10 299 185 61.9
10 – Up to 100 982 391 39.8
100 – Up to 1000 335 114 34.0
Over 1000 29 7 24.1
Total 1645 697 42.4
The details in the table above show that the UCBs with larger deposit base are
relatively sounder as compared to UCBs with smaller deposit base. The
proportion of UCBs falling in Ratings C and D with deposit base up to ` 10 crore
is 61.9 per cent of the total UCBs with this deposit base. The proportion of UCBs
in Ratings C and D reduces significantly along with the increase in deposit base
of the UCBs. The overall proportion of UCBs in Ratings C and D is 42.4 per cent
of the total UCBs.
(h) As a result of more vigorous action by RBI and particularly after the
establishment of TAFCUBs consequent on MoUs signed with State
Governments as many as 194 licences have been cancelled or UCBs merged
with other UCBs and 178 unlicensed UCBs whose applications for license had
been pending for several years have been issued license or their applications
have been rejected. Despite this, there are at present 88 UCBs which have a
negative networth with consequent erosion in depositors’ funds.
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1.13 Present Performance UCBs (till March 2015):
The regulatory approach to UCBs has been tailored recognising their role and
mandate for providing financial services to the less privileged sections of the
population. UCBs are, therefore, regulated under the less stringent BASEL I
norms as opposed to BASEL II and III norms applicable to commercial banks.
Although co-operatives are intended to remain small with their activities
limited to their membership, a license to carry on the banking business
provides the UCBs easy access to public deposits. With the liability of
members (shareholders) restricted to membership shares, the owners become
the users of resources predominantly contributed by non-members leading to an
inherent conflict of interest that needs to be moderated through regulation and
supervision.
The sector has witnessed reasonable growth over the last few years
Table 11 Growth of UCBs (Rs. In billions)

As on March 31, Total No of Deposits Advances
UCBs
2008 1770 1398.71 904.44
2009 1721 1570.42 962.34
2010 1674 1831.50 1124.36
2011 1645 2118.80 1364.98
2012 1618 2386.41 1577.93
2013 1606 2768.30 1810.31
2014 1589 3155.03 1996.51
The above table shows while the number of UCBs declined from 1770 in 2008
to 1589 in 2014, there was consistent growth in deposits and advances from Rs.
1398.71 billion and Rs. 904.44 billion in 2008 to Rs. 3155.03 billion and Rs.
1996.51 billion respectively in 2014, recording a CAGR of 14.52% and 14.11%
respectively.
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 List of large UCBs by business/assets size:
A comparison of the business (deposits + advances) of the top ten UCBs with
the bottom ten commercial banks (excluding foreign banks)
Table 12 Deposits, Advances and Assets of top ten UCBs and bottom ten
Private Sector Banks (As on March 31, 2015*) (Amount in Rs.billion)
Top 10 UCBs Deposits Advances Total Bottom 10 Deposits Advances Total

Assets PrSBs Assets
Saraswat 271.71 177.98 348.28 Karur Vysya 446.90 366.91 532.13
Co-operative Bank Bank
Ltd.,
Cosmos Co-operative 158.35 111.60 190.89 Karnataka Bank 460.09 319.95 518.07
Urban Bank Ltd.
Shamrao Vithal 124.68 79.54 144.74 Tamilnad 256.50 195.45 291.71
Co-operative Bank Mercantile
Ltd. Bank
Abhyudaya 97.61 57.46 117.57 City Union 240.75 180.89 277.09
Co-operative Bank Bank
Ltd., Mumbai
Bharat Co-operative 77.58 52.53 89.35 Ratnakar Bank 170.99 145.30 271.07
Bank Ltd., Mumbai
TJSB Sahakari Bank 71.80 44.08 88.01 Lakshmi Vilas 219.64 165.13 247.47
Bank
Punjab & 68.70 48.79 79.86 DCB Bank 126.09 105.58 161.36
Maharashtra
Co-operative Bank
Ltd.
Janata Sahakari Bank 70.70 47.51 79.69 Catholic Syrian 144.74 96.95 157.90
Ltd., Pune. Bank
Kalupur Commercial 47.56 27.29 62.92 Dhanlaxmi 123.79 81.52 145.89
Coop.Bank Ltd. Bank
NKGSB 53.35 36.37 61.82 Nainital Bank 53.44 25.96 59.41
Co-operative Bank
Ltd.,
Note: Top and bottom banks are based on their total asset size.
Source RBI Publications
This table shows that some of the UCBs were larger than the smaller
commercial banks in terms of deposits, advances and total assets.
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 Profile of range of loans granted by UCBs:
The profile of range of loans granted by both scheduled and non-scheduled

UCBs is given as under-
Table 13 Range of loans granted by Scheduled Banks

S. Range of loan Scheduled banks (50 banks)
No. No. of No. of Amount Amount
account account (In Rs. lakh) % of total
% of total
1 Upto Rs. 5 lakh 569855 53.02 765610.01 10.75
2 Rs. 5-10 lakh 276314 25.71 442240.67 6.21
3 Rs. 10-15 lakh 171148 15.92 267872.06 3.76
4 Rs. 15-20 lakh 14166 1.32 216793.44 3.04
5 Rs. 20-25 lakh 9308 0.87 175511.01 2.46
6 Rs. 25-50 lakh 15320 1.43 491820.30 6.90
7 Rs. 50-1 crore 8017 0.75 519059.95 7.28
8 Rs. 1-5 crore 8150 0.76 1669339.23 23.43
9 Above Rs. 5 crore 2417 0.22 2577153.95 36.17
TOTAL 1074695 100.00 7125400.62 100.00
Table 14 Range of loans granted by Non-Scheduled Banks

S. Range of loan Non-Scheduled banks (1529 banks)
No. No. of No of Amount Amount
account account (In Rs. lakh) % of total
% of total
1 Upto Rs. 5 lakh 5768074 93.56 5358773.33 47.46
2 Rs. 5-10 lakh 248762 4.03 1360859.24 12.05
3 Rs. 10-15 lakh 56167 0.91 632944.54 5.60
4 Rs. 15-20 lakh 27679 0.45 434317.49 3.84
5 Rs. 20-25 lakh 18072 0.29 379998.28 3.36
6 Rs. 25-50 lakh 27670 0.45 891561.46 7.90
7 Rs. 50-1 crore 11722 0.19 739277.95 6.55
8 Rs. 1-5 crore 6814 0.11 1207918.22 10.70
9 AboveRs.5 436 0.01 286551.23 2.54
crore
TOTAL 6165396 100.00 11292201.74 100.00
As it is clear from the above table that there are diametrically opposite trends in
the range of loans granted by scheduled and non- scheduled UCBs. While the
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scheduled banks granted 59.6% of the total loans in the larger loan ranges of
Rs.1-5 crore and above Rs. 5 crore, non-scheduled banks catered to the small
loan segment upto Rs. 10 lakh in a substantial way as this segment accounted
for 59.5% of loans granted .
Thus it is apparent that financial inclusion by way of credit to a larger number
of small borrowers is more visible in the case of non-scheduled banks including
unit banks. Also the large MS-UCBs have aligned their business models and
goals with those of commercial banks while availing the concessions granted to
the sector.
 List of activities permitted to UCBs:
A comparison of regulatory parameters prescribed for UCBs and SFBs as

against the list of activities permitted to them shows an interesting result. SFBs
despite having more stringent capital requirements of Rs. 100 crore networth
and CRAR of 15%, are not permitted to undertake a host of activities which the
UCBs are currently allowed with lesser capital requirements starting from Rs.
25.00 lakh.
Scheduled UCBs are eligible to undertake foreign exchange businesses as
Authorised Dealers, category I. There is no requirement for UCBs to open 25%
of their branches in unbanked rural centres. UCBs are permitted to open
specialised branches, undertake intra-day short selling in Government
securities, have access to LAF, membership to NDS-OM, open currency chest,
provide mobile and internet banking and issue credit cards, among others.
Due to the limited capacity to raise capital, lack of corporate governance, lack
of a level playing field in regulation and supervision at par with commercial
banks, all products/lines of businesses were not permitted to UCBs which the
commercial banks undertake.
 Appropriate size upto which UCB may be allowed to grow:
The deliberations on the size up to which UCBs may be allowed to grow

revolved around two criteria --Capital Funds and Business Size (Deposits +
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Advances).
a) Capital Funds: Those UCBs with capital funds above Rs. 500 crore may
be converted into scheduled commercial banks. UCBs with capital funds in the
range of Rs. 100 crore to Rs. 500 crore may be granted facilities akin to Small
Finance Banks in the private sector. However, at present UCBs are permitted to
undertake a host of activities which SFBs are not allowed to, with more
stringent regulatory prescriptions.
b) Business Size: A threshold benchmark of a Rs. 20,000 crore business size
can be considered for voluntary conversion of multi-state UCBs into scheduled
commercial banks to ensure uniform regulation. This business size is
appropriate as the biggest UCB should not end up being the smallest
commercial bank. Further, a proper transition period should be provided to
UCBs for conversion into commercial banks. UCBs not willing to convert to
SCBs may be permitted to offer the services/products that they are currently
offering to their clientele.
Ideally, the Reserve Bank would like the UCBs to grow in the co-operative
movement space. However, due to lack of a level playing field in regulation
and supervision of UCBs and the absence of full powers to RBI at par with the
powers of commercial banks they may be allowed for conversion. If at all they
opt for conversion, a transition period should be provided to UCBs to iron out
any difficulties in the process.
 Need to set up new UCBs: Considering the useful role played by UCBs in
catering to the needs of persons with small means, new UCBs may be set up
in those regions where their representation is inadequate, provided their
governance is strengthened and they are adequately supervised.
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1.14 The problem of Dual Control:
(a) UCBs are governed by the respective Co-operative Societies Acts of the
States in which they are registered. There are also 42 UCBs which are registered
under the Multi-State Co-operative Societies Act, 2002.
(b) UCBs are also governed by the Banking Regulation Act, 1949 and Part V of
the Act makes provision for the application of the Act to co-operative banks
subject to certain modifications. These modifications provide that several of the
powers which the Act gives to RBI for the supervision and regulation of banks
are diluted or are denied to RBI when applied to UCBs. These pertain mainly to
control over the Board of Directors of UCBs and their management of the affairs
of the UCB.
(c) On the other hand, under the various State Co-operative Societies Acts and to
a lesser extent under the Multi-State Co-operative Societies Act, the Registrars
of Co-operative Societies are vested with significant powers regarding the
functioning of the Boards of Directors and the Management of the UCB.
(d) As a consequence, RBI is not empowered to take unilateral action against the
management of an erring UCB in case of need and it requires the assistance of
the concerned Registrar of Co-operative Societies to take necessary action.
(e) This system of dual control is often claimed to have been one of the important
factors responsible for the less than satisfactory performance of several UCBs.
The effective regulation and supervisory control of UCBs would warrant that
there should be a clearly defined control system in place whereby the
co-operative character of UCBs is controlled exclusively by the Registrars of
Co-operative Societies while all the banking functions of the UCB are
exclusively controlled by RBI.
(f) Recognizing the conflicts created by this system of dual control, the Vision
Document proposed that there should be a strong working arrangement between
RBI and the State Governments / CRCS to address the difficulties caused by dual
control. Consequently, beginning with 2005, RBI has entered into Memorandum
of Understanding (MoUs) with all State Governments to address this problem.
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Under the MoUs, State Governments have agreed to take immediate action on
requisition by RBI for supersession of the Board of Directors, appointment of
liquidators, initiation of action for removal of CEO / Chairman of a bank,
enhancing quality of HR and IT resources on lines required by RBI, work to raise
the standards of corporate governance, the institution of special audit by
Chartered Accountants when necessary, the introduction of long form reports by
auditors, the appointment of Chartered Accountants as Statutory Auditors in
respect of larger UCBs and other matters
The role of Co-opertatives in financial inclusion will increase provided the RBI
should have the powers to:
 Remove from office any member of the BoM or the CEO, supersede the
BoM for a period not exceeding five years and appoint an Administrator
in its place
 Direct the BoM to make such changes in the Management as considered
necessary.
 Direct the BoM to introduce such aspects of technology as considered
necessary.
 Audit of UCB to be carried out by a Chartered Accountant to be
appointed by the BoM from out of a panel of approved auditors
maintained by RBI subject to rotation after four years.
 The BoM to follow a code of corporate governance to be specified by
RBI. Non-fulfilment of these conditions should be sufficient reason for
cancellation of the license. RBI should retain the power to relax some of
these conditions as and when it considers appropriate with regard to the
size of the UCB, the cost of compliance or for other valid reasons.
1.15 Profile of Himalaya Credit Co-operative Society Limited Nagpur

Himalaya Credit Co-operative society is the co-operative organization,
registered as per the Cooperative rules of Government of Maharashtra
Co-operation department on 18-02-1989 having registration number
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NGP/CTY/RSR/CR/380/88-89.
Himalaya credit Co-operative Society started its functioning under the dynamic
leadership of Shri Rajkumar Umrao Khade from 18-02-1989. Till now it has
established five branches in Nagpur at – Pratapnagar, Manewada, Mankapur
Hingana & Wadi Amravati Road. It is also planning to be a multi state
co-operative society by opening branches in other states. Till now it has not
taken any financial assistance from the government.
Its motto is “Like a tree we must branch out and reach the world.”
Board of directors of Himalaya Credit Co-operative Society Limited, Nagpur
are as follows:
Board of Directors:
President : Smt. Aruna P. Gavande
Vice-President : Shri Sharad N. Jharbade
Secretary : Shri. Sudhir A. Patankar
Joint Secretary : Shri. Rangrao V. Kamble
Director : Shri. Rajendra B. Dhote
Director : Shri. Subhash S. Mankar
Director : Shri. Bhojraj S Navange
Director : Shri. Vilas A. Gorde
Director : Shri. Sanjay G Gakre
Director : Sau. Sushma D. Jharbade
Director : Shri. Bhagvantrao M. Khandwe
Presently this bank has more than 130 employees engaged with them at various
positions along with Board of Directors. Indirect loan & pigmy agents, lawyers,
consultants, recovery agents, advisors etc. along with about 9500 shareholders
and various savings/ current/ recurring deposit/ fixed deposits account holders
are also associated with it.
At present the bank is running its business successfully and is profit making
organization over the years after it came to existence since 1989. Shri
Rajkumar Umrao Khade had devoted his services to flourish this organization
39 |
while discharging his duties as a founder President, Chief Promoter & Director
for more than five years. From the available information it is known that
Himalaya credit co-operative is also similar to other form of enterprises so far
as it also aims at doing business efficiently. The form of enterprise combines
the good point of capitalistic as well as socialistic form of organization.
Among the divergent economic system, the Cooperation acts as a balancing
factor. This Co-operative is the form of organization in which persons associate
together voluntarily as human beings on the basis of equality for the promotion
of economic interest of themselves.
A co-operative society enables the members to put in their best to attain a
higher standard of living for themselves, without in anyway exploiting others.
It honors human values & also provides incentives.
Co- operation is thus something more than an ordinary business. Its morality
applied to business, beliefs in non-capitalizing character & in forming &
developing more values side with pursuit of business.
Thus the concept of Co-operative envisages a group of persons having one or
more common economic needs who voluntarily agree to pool their services, use
them for mutual benefit, through an organization managed by them on
democratic pattern.
In Nagpur, Himalaya credit Co-operative society increased its business rapidly
in 25 years and played significant role in providing credit to lower & middle
income groups and in upliftment of weaker sections of the society. It
contributes productively to progress of the nation & is recognized as a powerful
instrument for Socio-economic transformation of society.
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2. CONCEPT OF HUMAN RESOURCE MANAGEMENT
HR is a product of the human relations movement of the early 20th century,
when researchers began documenting ways of creating business value through
the strategic management of the workforce. The function was initially
dominated by transactional work such as payroll and benefits administration,
but due to globalization, company consolidation, technological advancement,
and further research, HR now focuses on strategic initiatives like mergers and
acquisitions, talent management, succession planning, industrial and labour
relations, and diversity and inclusion.
Michael J. Jucius has defined human resources as “a whole consisting of
inter-related, inter-dependent and interacting physiological, psychological,
sociological and ethical components”.
Human resource management means management of human capital which
involves intellectual capital social capital and emotional capital. Human
Resource Management is a process of making the efficient and effective use of
human resources so that the predetermined goals are achieved. HRM is an art
of managing people at work in such a manner that they give their best to the
organisation for achieving its set goals.
According to Filippo “Personnel management, or say, human resource
management is the planning, organising, directing and controlling of the
procurement, development, compensation, integration and separation of human
resources to the end that individual, organisational and social objectives are
accomplished”.
HRM is the organizational function that deals with issues related to people such
as compensation, hiring, performance management, organization development,
safety, wellness, benefits, employee motivation, communication, administration,
and training.
HRM is also a strategic and comprehensive approach to managing people and
the workplace culture and environment. Effective HRM enables employees to
41 |
contribute effectively and productively to the overall company direction and
the accomplishment of the organization's goals and objectives.
HRM is moving away from traditional personnel, administration, and
transactional roles, which are increasingly outsourced. HRM is now expected
to add value to the strategic utilization of employees and that employee
programs impact the business in measurable ways. The new role of HRM
involves strategic direction and HRM metrics and measurements to
demonstrate value.
Human resource management is the management of an organization's
workforce, or human resources. It is responsible for the attraction, selection,
training, assessment, and rewarding of employees, while also overseeing
organizational leadership and culture, and ensuring compliance with
employment and labor laws. In circumstances where employees desire and are
legally authorized to hold a collective bargaining agreement, HR will also serve
as the company's primary liaison with the employees' representatives.
Human Resource Management is the process of people management within
companies and organizations, as well as that of managing inter-personal
relationships. Both of these processes are important for ensuring business
growth and success. Human Resource Management is ultimately focused on
the people within an organization. To be successful it requires planning,
monitoring and evaluation on a regular basis. When successfully implemented
and managed it will ensure that all employees will know their role, career path
and feel part of an organization that is able to manage and reconcile their
expectations with those of the organization and its objectives.
It includes the following elements:-
i) Staffing is a central element in HRM. This function is about ensuring that
there are set procedures and policies in place to guide staffing. Having these
staffing procedures and policies will help advertise and reach out to potential
employees effectively. Additionally, staff involved in the interview and
selection process will be able to identify suitable candidates for each role.
42 |
Interviews will be structured to ensure that both the interview process and final
candidate selection are successful.
Of course, staffing does not just cover the hiring of new employees, it also
covers the management of existing employees. This covers health and safety,
absences, monitoring of leave, as well as disciplinary matters and even, firing.
Ensuring these elements are covered will mean that a robust system is in place.
ii) Retention is another key component of HRM. It is important that employees
have the opportunity to receive training to improve their career path.
Alternatively, when going through a crisis in their personal life, the most
effective Human Resource Department will be able to offer suggestions for
support and counselling where appropriate.
iii) Remuneration and any perks associated with the package offered to
employees also fall under HRD. Good HRM policies will ensure that structures
are in place showing levels of pay for the various positions within the
organization. Staff needs to know the career and pay route available to them.
This is important, not just at the time of employment, but also as their career
progresses over time.
iv) Performance management has become an increasingly key component of
HRM. This is because the majority of employers now use this as a key
component when considering career progression and pay increases. By having
a good performance management policy and structure in place, effective targets
can be set and monitored on a regular basis. These records can also be crucial if
staffing levels need to be cut or disciplinary proceedings instituted.
v) HRM has the secondary and wider role of being the management of
inter-personal relationships. This covers not only staff within levels or
departments but also at an organizational level. The relationship between
management and the staff they control is crucial to the successful working of
the organization.
Within this secondary function, the objectives, as well as the outcomes, are to
enable employees and the management team, to develop employees and ensure
43 |
that the relationships within the company are fulfilling for every member of
staff from the ground up.
2.1 Functions of HRM:

The following are the functions of HRM:-
a) Managerial Functions: It includes planning, organising, staffing, directing,
leading and controlling.
b) Operative Functions: The operative, also called, service functions are those
which are relevant to specific department. These functions vary from
department to department depending on the nature of the department. The
operative functions of HRM relate to ensuring right people for right jobs at
right times. These functions include procurement, development, compensation,
and maintenance functions of HRM.
It is important to note that the managerial and operative functions of HRM are
performed in conjunction with each other in any organisation, be large or small.
2.2 Objectives of HRM:

HRM aims at providing right person for the right job for the attainment of
predetermined objectives of the organisation. This includes the following:-
a) To help the organisation to attain its goals effectively and efficiently by
providing competent and motivated employees.
b) Effective utilization of the available human resources.
c) To provide for the employee’s job satisfaction and self-actualisation.
d) To develop and maintain the quality of work life (QWL).
e) To help maintain ethical policies and behaviour inside and outside the
organisation.
f) To establish and maintain cordial relations between employees and
management.
g) To match individual/group goals with organisational goals.
44 |
2.3 Scope of HRM:
The scope of HRM is vast and wide which includes all activities starting from
manpower planning till employee leaves the organisation.
The National Institute of personnel Management, Calcutta has specified the
scope of HRM as follows:-
a. The Labour or Personnel Aspect:
This is concerned with manpower planning, recruitment, selection, placement,
transfer, promotion, training and development, lay-off and retrenchment,
remuneration, incentives, productivity, etc.
b. Welfare Aspect:
It deals with working conditions, and amenities such as canteen, creches, rest
and lunch rooms, housing, transport, medical assistance, education, health and
safety, recreation facilities, etc.
c. Industrial Relations Aspects:
This covers union-management relations, joint consultation, collective
bargaining, grievance and disciplinary actions, settlement of disputes, etc.
2.4 Significance of Human Resource Management

Human Resources play a critical role in the development process of modern
economies. Arthur Lewis observed “there are great differences in development
between countries, which seem to have roughly equal resources so it is
necessary to enquire into the difference in human behavior. A recent World
Bank study of 192 countries concluded that, only 16% of economic growth is
achieved by physical capital (Machinery, Building, and Physical infrastructure
resources) while 20% comes from natural capital. But no less than 64% of
economic growth can be attributed to human and social capital. In essence, the
difference in the level of economic development of the countries is largely a
reflection of the differences in the quality of their human resources.
One of the fundamental activity areas of management is the management of
Human Resources. Thus in the management of five M’s - Men, Machine,
45 |
Material, Method and Money, the management of Men assumes lot of
significance due to the fact that; human being is the source of other resources.
Without him, other resources like - Machine, Method, Material and Money
become inert and their abundance has no meaning and with him, they multiply.
Among other things, if a company is economically successful, it means, the
management has been able to manage human resources effectively. The human
resources are the active force in the process of industrialization and strategies
for development should contribute particularly on their enhancement.
2.5 Need for HRM in Co-operatives:

An organization is made up of a number of people who strive to achieve the
organization’s goals. Human resources have a significant bearing on the
profitability, efficiency and overall organizational effectiveness.
Human beings differ from one another in their basic mental abilities, skills,
approaches, qualifications and also behaviour which account for their complex
behaviour patterns and psychological makeup. Such difference gets multiplied
when they interact with one another in a group or in an organization. This
generates different styles of management, values, feelings, beliefs and opinions
of the employees. They must be groomed in order to take risks, think
innovatively, and handle new problems. In the competitive environment,
employees of any business organization are the key factor for deciding the
success of the firm, in general, and cooperatives in particular.
Indian cooperative banking movement has passed through hundred years of its
existence. At the same time, human resources management has been a
neglected field in cooperative banks over a period of time and poor image of
cooperative bank employees in the society affects their morale.
Cooperative banks approach human resource management from the wrong
perspective and their financial performance suffers as a result. Instead of
focusing on how to execute strategy through the performance of the employees
in many cooperative banks, the first priority is cost control.
46 |
World over, the technology driven channels such as, ATM, net banking and
mobile banking have reduced walk-in-customers at the bank branches.
However, in India, it is observed that the customers still find it difficult to use
these technology based channels and they are more comfortable in traditional
banking over the counter personally to ensure error - free and risk –free
banking service. While struggling to provide better and efficient service at the
counters, the staff is also confronted with various regulatory norms to mitigate
risks in operations. This clearly establishes that employees of cooperative
banks play a vital role in managing not only the ‘transaction’ of a customer but
also future long-term relationship with them.
Earnest Dale views management as the process of getting things done through
other people. Management of human resources includes guiding human
resources into a dynamic liberation that attains its objectives with a high degree
of motivation and morale and to the satisfaction of those concerned with it. As
a matter of fact, all management is personnel management as it deals with
human beings. Though, there are different functional areas of element like -
Production management, Marketing management, and Financial management.
All these functions are to be discharged by Human Resources. And though
there is a personnel manager, all managers have to manage the functions of
human resources of their departments to get effective results through and with
the people. Thus, executives are unavoidably the personnel managers. In a
nutshell, all managers are personnel managers and all management is
essentially Human Resource Management.
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3. CONCEPT OF HUMAN RESOURCE DEVELOPMENT
Human resources development lies at the heart of economic, social and
environmental development. It is also a vital component for achieving
internationally agreed sustainable development goals, including the Millennium
Development Goals, and for expanding opportunities to all people, particularly
the most vulnerable groups and individuals in society.
Human resources development has been defined as empowering people by
fostering the contributory capacities that they can bring to the improvement of
their own quality of life and that of their families, communities, enterprises and
societies. Over the years, the concept of human resources development has
evolved from solely focusing on individual capacity to also building
institutional capacity at the national level, through socio-economic policies and
development plan and strategies. Human resources development is, therefore,
regarded as facilitating the development of national human capacities to
achieve sustainable, inclusive, equitable development and, at the same time,
enhance well-being of individuals.
For optimum utilization of existing physical capital, investment in human
resources or capital is essential, as technical, professional and administrative
people are required to make effective use of material resources.
Human resource development, in short, means investment in human capital.
Human capital means people can act as capital assets which yield a stream of
economic benefits over their working life.
An improvement in the mental capability, skill, and physical capacity of the
people constitutes an increase in the human capital because this enables the
human factor to produce more. Two types of expenditure can be called as
investment in human capital. One is expenditure on education i.e., general
education and technical training and the other is expenditure on the provision
of health care services likes hospitals, medicines etc.
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Adam Smith states, “The capacities of individuals are depended on their
access to education”. Education is the important element of HRD.
3.1 Origin of HRD

The concept of HRD was formally introduced by Leonard Nadler in 1969 in a
conference organized by the American society for Training and Development.
Leonard Nadler defines HRD as, "those learning experiences which are
organized, for a specific time and designed to bring about the possibility of
behavioral change.” The term learning experience refers to purposeful or
intentional learning not incidental learning.
Leonard Nadler coined this term “Human Resource Development” in his book
“Developing Human Resources” in 1970. Human resource refers to the talent
and energies of the workforce who contribute to the realisation of vision
mission goals and values of the organisation. HRD is a process of active
learning through training leading to systematic and purposeful development of
individual group and thus resulting in organisational effectiveness.
According to Watkins “Human Resource Development is fostering long-term
work related learning capacity at individual group and organisational level.”
3.2 Features of HRD:

a) Systematic approach: HRD is a systematic and planned approach
to achieve the desired results and pre-determined objectives of
the organisation to improve the efficiency of employees.
b) Continuous process: HRD is a continuous process for the
development of all types of skills of employees so as to cope and
adapt to the changing and globally competitive world.
c) Multi-disciplinary subject: HRD is a Multi-disciplinary subject
which draws inputs from behavioural science, engineering,
commerce, management, economics, medicine, etc.
d) Universal: Every organisation whether engaged in production or
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distribution of goods and services needs HRD to develop the
existing work force.
e) Techniques: HRD includes various techniques and processes such
as performance appraisal, training, management development,
career planning, counselling, and workers’ participation.
Human Resource Development is the integrated use of training, organization,

and career development efforts to improve individual, group and organizational
effectiveness. HRD develops the key competencies that enable individuals in
organizations to perform current and future jobs through planned learning
activities. Groups within organizations use HRD to initiate and manage change.
Also, HRD ensures a match between individual and organizational needs.
Among the Indian Authors T. Venkateswara Rao worked extensively on HRD.
He defines HRD in the organizational context as, "a process by which the
employees of an organization are helped in a continuous, planned way to
i) Acquire or sharpen capabilities required to perform various functions
associated with their present or expected future roles.
ii) Develop their general capabilities as individuals and discover and exploit
their own inner potentials for their own and/or organizational development
purpose.
iii) Develop an organizational culture in which supervisor-subordinate
relationships, teamwork, and collaborations among sub-units are strong and
contribute to the professional well being, motivation, and pride of employees.
This definition of HRD is limited to the organizational context. In the context
of a state or nation it would differ.
HRD is a process, not merely a set of mechanisms and techniques. The
mechanisms and techniques such as performance appraisal, counseling, training,
and organization development interventions are used initiate, facilitate, and
promote this process in a continues way. Because the process has no limit, the
mechanisms may need to be examined periodically to see whether they are
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promoting or hindering the process. Organizations can facilitate this process of
development by planning for it, by allocating organizational resources for the
purpose, and by exemplifying an HRD philosophy that values human beings
and promotes their development.
Human Resource Development (HRD) is the framework for helping employees
develop their personal and organizational skills, knowledge, and abilities.
Human Resource Development includes such opportunities as employee
training, employee career development, performance management and
development, coaching, mentoring, succession planning, key employee
identification, tuition assistance, and organization development.
The focus of all aspects of Human Resource Development is on developing the
most superior workforce so that the organization and individual employees can
accomplish their work goals in service to customers.
Organizations have many opportunities for human resources or employee
development, both within and outside of the workplace. Human Resource
Development can be formal such as in classroom training, a college course, or
an organizational planned change effort. Or, Human Resource Development
can be informal as in employee coaching by a manager. Healthy organizations
believe in Human Resource Development and cover all of these bases.
HRD is mainly concerned with developing the skills, knowledge and
competencies of people and it is people oriented concept. When we call it as a
people oriented concept, the question of people be developed in the larger or
national context or in the smaller organizational context? Is it different at the
macro and micro level? HRD can be applied both for the national level and
organizational level. But, the present study is concerned with HRD at organizational
point of view.
HRD from organizational point of view is a process in which the employees of
an organization are helped/ motivated to acquire and develop technical, managerial
and behavioral knowledge, skills and abilities, and mould the values, beliefs,
attitude and aptitude necessary to perform present and future roles by realizing
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highest human potential with a view to contribute positively to the organizational,
group, individual and social goals.
3.3 Concept of HRD in Cooperatives:

The significance of professionalization of Management in Cooperatives has
been introduced after the globalization of Indian Economy. Sustainable Human
Resource Development and Training System have development according to
the present environment to promote Cooperatives both vertically and
horizontally growth and created HRD Network among cooperatives to
exchange information and experience.
The concept of HRD in cooperative means all the planned information,
education, training, mobilization and manpower development activities
undertaken by cooperatives so as to create economically efficient,
organizational capable of providing services required by their members.
3.4 Need for HRD in Cooperatives:

Cooperatives have been effectively utilizing the need of the Human Resources
in the following purposes. They are:
 Recruitment and Placement of Personnel.
 Personnel Development and Career Planning.
 Systems of Individual Performance measures.
 Training and Skills upgradation.
3.5 HRD Sub systems:

a) Performance Appraisal
Performance appraisal is a method of evaluating the behavior of employees in
the work place, normally including both the quantitative and qualitative aspects
of job performance. Performance here refers to the degree of accomplishment
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of the tasks that make up an individual's job. It indicates how well an individual
is fulfilling the job demands. Performance is always measured in terms of
results. A student, for example, may exert a great deal of effort while preparing
for the examination but may manage to get a poor grade. In this case the effort
expended is high but performance is low. In order to find out whether an
employee is worthy of continued employment or not, and if so, whether he
should receive a bonus, a pay hike or a promotion, his performance needs to be
evaluated from time to time. When properly conducted, performance appraisals
not only make the employee know how well he is performing his job but also
influence the employee's future level of effort, activities, results and task
direction. Under performance appraisal, not only the performance of a worker
but also his potentialities for development is evaluated.
Performance appraisal is needed in order to:-
 Provides information about the performance ranks on the basis of which
decisions regarding salary fixation, confirmation, promotion, transfer and

demotion are taken.
 Provides feedback about the level of achievement and behavior of
subordinates.
 This information helps to review the performance of the subordinates,
rectifying their performance deficiencies and to set new standards of work,

if necessary.
 Provides information to counsel the subordinates.
 Provides information to diagnose deficiency in employees regarding skill,
knowledge, determine training and developmental needs and to prescribe

the means for employees’ growth.
 Provide information for correcting placement and to prevent grievances and
to set right the activities of indiscipline.

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Performance appraisal aims at attaining different purposes such as
 To create and maintain a satisfactory level of performance.
 To contribute to the employee growth and development through training
and management development programs.
 To help the superiors to have a proper understanding about their
subordinates.
 To guide according to the changes in job with the help of continuous
ranking.
 To facilitate fair and equitable compensation based on performance.
 To facilitate for testing and validating selection tests, interview techniques
by comparing their scores with the performance appraisal ranks.
 To provide information for making decisions regarding lay off,
retrenchment etc and to ensure organizational effectiveness through

correcting employee for standard and improved performance and by
suggesting the change in the employee’s behavior.
b) Training and development
Every organization should provide training and develop to all employees
irrespective of their qualifications, skill, suitability for the job etc. Training is
something that is given not once to new employees but it has to be given
continuously in every well-run establishment. Further, technological challenges
and automation require updating the skills and knowledge. As such an
organization has to retrain and develop the old employees. The employees also
attend the training imparted to the employees of the co-operative societies
every year by the registrar of co-operative societies Nagpur.
c) Career planning
Individual career planning assumed greater significance with the unparalleled
growth and spread of knowledge, phenomenal increase in educational and
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training facilities and widespread increase in job opportunities. Similarly
organizational career planning also gained importance with the change in
technology, human needs, values and aspirations, increase in organizational
size, complexity and number of openings at different levels. A career is all the
jobs that are held during a person's working life.
Edwin B. Filippo defined a career as a sequence of separate but related work
activities that provide continuity, order and meaning to person's life.
Douglas T. Hall defined a career as "an individually perceived sequence of
attitudes and behaviors associated with work related experiences and activities
over the span of the person's life.
Wrether and Davis defined various terms of career planning as follows- A
career path is the sequential pattern of jobs that forms a career. Career goals are
the future positions one strives to reach as part of a career. Career planning is
the process by which one selects career goals and the path to these goals.
Career development is those personal improvements one undertakes to achieve
a personal career plan. Career management is the process of designing and
implementing goals, plans and strategies to enable organization to satisfy
employee needs while allowing individuals to achieve their career goals.
d) Counselling
Counseling occasionally is necessary for employees related to problems related
to job, career, potential, performance and work. Counseling is discussion of a
problem that usually has emotional touch with an employee in order to help the
employee to cope with it better. Counseling seeks to improve employee's
mental health. People feel comfortable about themselves and become able to
meet the demands of life when they are good in mental health.
f) Reward Mechanisms
Rewards motivate employees. The monetary and non-monetary rewards
certainly create a positive HRD climate in any organization. Fair and impartial
policies of promotion serve as non-monetary incentive. There is a reward
system for the wards of employees who secure good marks in different exams
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which also motivates the employees of the organization.
g) Organisational Development
Organisational development is concerned with the people for increasing
organizational effectiveness, and it is also concerned with the improving
organizational climate and culture.
h) Welfare and Quality of Work
The economic and industrial development of any nation mostly depends on
satisfied labour force. In this regard the significance of labour/ employee
welfare has been accepted all over the world. The need of labour/employee
welfare in Indian industries was emphasized by the Royal Commission on
labour/employee in its report in 1931. Since then the Government and the
employers started providing welfare measures to workers. But the real efforts
took place after independence. The Government made legislative measures for
labour welfare and directed all the companies to give utmost importance to the
welfare of the employees. As such almost all the organizations started giving
priority to labour/employee welfare.
Organizations must give importance to welfare. Quality of work life is directly
related to employee satisfaction resulting in customer satisfaction. In other
words, the Quality of work life very much influences the quality of products to
be produced. All the same, Quality of work life is very much needed for
achieving the objectives of the organization.
It is found in the study that members and employees are very much satisfied
and are benefited by the products of this bank(deposits and loans) thereby
contributing to the positive change in their life.
i) Human Resource Information System
Communication is the lifeblood of every organization. Communication brings
unity, co-operation and co-ordination among the different levels of the
organization.
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4. SCOPE & SIGNIFICANCE OF HUMAN RESOURCE
DEVELOPMENT ASPECT IN ANY ORGANISATION
A weak organization with good and strong people can make gold out of clay and
achieves success so there is need to effectively deploy the knowledge, skills,
creative abilities, talents, aptitudes, attitudes, values and beliefs of an
organizations work force which is done through human resource development.
It also involves moulding of these aspects with the inevitable change in the
organization and also outside. This process of human resource development
essentially enhances the utilization value of any organization by improving the
quality and competence of its workforce and thus forms the basis of
differentiation among organisations. It will increase the efficiency of
production process and various areas of management.
HRD assumes significance in view of the fast changing organizational
environment and the need for the organization to adapt itself in order to
respond to the environmental changes. The changing environmental factors
include:
a. Unprecedented increase in competition within and outside the
country consequent
b. Changing trends towards human resources management and
complexities involved in it.
c. Trends towards market economy which again results in cut-throat
competition.
The success of HRD in any organization depends, to a large extent, on the
existence of a favourable HRD Climate. HRD is more personnel-oriented than
technology-oriented and believes that participation and communication would
bring about greater commitment, efficiency, and growth of individuals.
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4.1 Scope of HRD:
Human resource management (HRM) deals with procurement, development,
compensation, maintenance and utilization of human resources. HRD is the
most important component of HRM and deals with effective utilization of
human resources through a systematic process which involves the following
areas:
a. Recruitment and selection of employees for meeting the present and
future requirements of an organization.
b. Performance appraisal of the employees.
c. Development of employees’ managerial and behavioural skills.
d. Career planning and development programmes for the employees.
e. Development of employees through succession planning.
f. Workers’ participation and formation of quality circles.
g. Group dynamics.
h. Job rotation and job enrichment.
i. Employees’ counselling.
4.2 Objectives of HRD:

Work force of any organisation is the potential followers of culture therefore
human resource development facilitates an organizational environment in
which the people are given foremost importance. Objectives of HRD are as
follows:
a) Equity:
The basic objective of HRD is to ensure that the organization creates a culture
and provides equal opportunities to all employees irrespective of caste, creed,
religion and language in matters of career planning, promotion, quality of work
life, training and development.
b) Employability:
Employability means the ability, skills, and competencies of an individual to
seek gainful employment anywhere. So, HRD aims at improving the skills of
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employees so that they can give their best.
c) Adaptability:
Change is inevitable and HRD through continuous training develops the
professional skills of employees so that they can adapt themselves to
organizational change.
4.3 HRD Functions:

HRD functions include the following:
 Employee training and development,
 Career planning and development,
 Succession planning,
 Performance appraisal,
 Employee’s participation in management,
 Quality circles,
 Organization change and organization development.
4.4 Significance of HRD in any organization:

Human resource can be considered as internal customers and consumer is the
king of any market in this market economy so their development is necessary
for the following reasons:-
a. Growth of organisation- Human resource is the most important factor
and growth of organisation is interconnected and related with the
development of HR. It helps in increasing the productivity and
performance of organisation.
b. Growth of employees- It helps in SWOT analysis of personnel and helps
the management to utilize their strength and also enables them to
improve their potentialities and performance by providing opportunities
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for development.
c. Development of work culture- Overall development of employee results
in better communication healthy inter personal relation and team work.
HRD develops good work culture and mutual cooperation.
d. Reduction in liability-the trained employees understand their
responsibilities in better manner and thus they avoid doing things which
may harm the organisation and doing any unfair practices thus HRD
helps in reducing the liability.
e. Better Compliance- HRD also facilitates better compliance to different
bodies by proper training of employees in this area.
f. Strategic management - Human capital and its development helps in
improving the company’s performance so every organisation must give
importance to its development for better strategic management.
g. Change management- HRD helps in change management. Human
resource must be developed to adapt to the changes in the external
environment for long term survival and sustainability.
h. To improve the competency- HRD helps in improvement of skill
knowledge and competency of human resource through different
training and development programmes which is beneficial to the
organisation.
i. Creation of opportunity- trained and developed personnel helps in
identification of opportunities and thus the organisation may get the first
mover advantage. Further these developed employees also get
opportunities for their career development.
j. Increase in commitment and job satisfaction- The trained personnel of
the organisation also feel committed to the work and organisation and
give their best to it. They also feel satisfied with their job and role and
thus their productivity is increased which is good for the organisation as
well.
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4.5 Significance of Human Resource Development for Co-operatives:
In the present changing scenario it is quite essential that Co-operatives should
perform better and develop in every aspect and in order to fulfil the principle of
education the International Cooperative Alliance has promoted and organized
cooperative education and training programmes to equip the co-operatives to
the socioeconomic changes. The ICA Executive Committee has formulated
Policy on HRD in Cooperatives to prepare the cooperatives for the challenges
of the 21st Century. The ICA shall provide technical assistance to member
organizations and cooperative training institutions in the formulation of HRD
Policies and Plans. National Cooperative Union of India and Vaikunth Mehta
National Institute of Cooperative Management, Pune in collaboration with ICA
HRD Committee has promoted, developed and maintained GHRD network for
cooperatives.
Human resource and its development are integral part behind success of any
organization. In sound organization with profit motive due importance is given
to their development but in Cooperatives still this important aspect is ignored.
Human resource management plays a crucial role in the implementation of
strategic management in cooperatives.
There is a need to adopt basic principles of human resource management, to
evolve sound personnel policies encompassing proper manpower planning,
recruitment and assessment which are lacking in Cooperatives.
By 2020 India will become the youngest country in the world. In other words it
will become the country with the most productive and energetic human
resources. This vibrant youth is both an asset and liability as providing gainful
employment is the biggest challenge and utilizing their full potential will prove
to be greatest asset in the form of human resources. The cooperatives are
considered to be one of the strong instruments to involve the available human
resources as well as explore the potentials for employment generation.
In this globally competitive world with new markets, new products, new
mindsets, new competencies and innovative thinking in business engagement
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and participation of this energetic and enthusiastic youth in co-operatives will
solve dual purpose. On the one hand it will result in increase in production of
goods and services and capital formation on the other hand it will also result in
effective deployment of skills of youth.
It is equally true that this techno-savvy generation which makes extensive use
of online banking, various apps, Paytm, ecommerce etc. will also help in
bringing latest technology for co-operatives better performance. Productive use
of capital will also help in achieving the aim of financial inclusion, will help
the weaker sections that are deprived of the basic needs of life and will boost
socio-economic development.
It is high time that youth should be educated about co-operative values and
principles. They should be taught about co-operatives as an ethical and
democratic business entity which will play a significant role for the success of
co-operatives and also benefit younger generation.
HRD climate helps the employees to acquire required competencies that would
enable them to execute their present or future expected roles and aids in
developing their capabilities for better Organizational Performance. Therefore,
it is necessary to study on human resource development in cooperatives to
check whether human resource management and development in cooperatives
are effective or not.
4.6 Importance of OCTAPACE in Organisation

Octapace is eight dimensional tool to study the organizational culture of any
organisation.
4.6.1 Meaning of Organizational Culture
“Culture is the soul of the organization — the beliefs and values, and how
they are manifested. I think of the structure as the skeleton, and as the flesh and
blood. And culture is the soul that holds the thing together and gives it life
force.”
Henry Mintzberg
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Organizational culture is being recognized increasingly as an important
determinant of organizational performance. Culture serves as one of the most
effective managerial control mechanisms in organizations because performance
standards are enforced by the employees rather than by top-down bureaucratic
rules and regulations.
Organization culture is very important because of its impact on employee’s
performance and satisfaction. Culture comprises the symbolic side of an
organization, and it shapes the human thought and behaviour in the system.
Understanding organizational culture helps to increase the organizational
effectiveness and development. It is the set of assumptions, beliefs, values and
norms that are shared by members of organization which helps to reduce
human variability and shape employee’s behaviour in organizations over time.
Organizational culture includes ethics, values, beliefs, attitudes, norms, ethos,
climate and environment. It is a multilevel concept. At the core (first level) are
the values, which give a distinct identity to a group. The second level concept
is climate, which can be defined as the perceived attributes of an organization
and its members, groups and issues. The third level concept relates to
atmosphere, which is the distinct factor that affects the development of
someone or something.
4.6.2 OCTAPACE Culture:

The concept of OCTAPACE culture - an acronym for Openness, Confrontation,
Trust, Authenticity, Pro-action, Autonomy, Collaboration and Experimentation
gives us an eight dimensional look towards organizational culture. The
OCTAPACE instrument gives us the capability to measure various dimensions
of values and beliefs of the organization’s employees.
OCTAPACE is an instrument that helps us to study the organizational culture,
to find the critical organizational factors in organizations that account for
cultural differences. OCTAPACE culture implementation increases the
performance of the company. It is very essential to understand the terms in
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order to improve on the eight dimensions of OCTAPACE, where
O--- Openness : Freedom to communicate.

C--- Confrontation : Facing the problems.
T--- Trust : Maintaining confidentiality of information shared
among the company.
A---Autonomy : Freedom of acting and planning at one’s own level.
P--- Proaction : Taking initiatives and advanced planning.
A--- Authenticity : Doing what is said.
C--- Collaboration : teamwork and co-operation.
E--- Experimentation : Trying out new and innovative methods of work.
These eight dimensions of OCTAPACE culture are essential for a strong and
successful organization. A culture with OCTAPACE values has the greater
chance of achieving high involvement and satisfaction, team work, growth and
free flow of communication within the organization.
i) OPENNESS:-
Openness can be defined as a spontaneous expression of feelings and thoughts,
and the sharing of these without defensiveness. It is the freedom to
communicate, share and interact without hesitation & receiving feedback from
customers and giving ideas and suggestions to team members. Openness is in
both directions, receiving and giving. Both these may relate to ideas (including
suggestions), feedback (including criticism), and feelings. For example,
openness means receiving without reservation, and taking steps to encourage
more feedback and suggestions from customers, colleagues and others.
Similarly, it means giving, without hesitation, ideas, information, feedback,
feelings, etc.
OUTCOME: It helps to improved implementation of systems and innovation.
& free interaction among team mates and clarity in setting objectives.
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ii) CONFRONTATION:-
Facing the problems and challenges boldly and not shying away. It also implies
deeper analysis of interpersonal problems. All this involves taking up
challenges. A better term would be confrontation and exploration(CE) i.e.
facing a problem and working jointly with others to find a solution to the
problem.
OUTCOME: The outcome of confrontation will be better role clarity, improved
problem solving, and willingness to deal with problems and with 'difficult'
employees and customers. There will be willingness of teams to discuss and
resolve sensitive issues.
iii) TRUST:-
It is reflected in maintaining the confidentiality of information shared by others,
and in not misusing it. It is also reflected in a sense of assurance that others will
help, when such help is needed and will honour mutual commitments and
obligations. Trust is also reflected in accepting what another person says at face
value, and not searching for ulterior motives. Trust is an extremely important
ingredient in the institution building processes.
OUTCOME: The outcome of trust includes higher empathy, timely support,
reduced stress & Reduction and simplification of forms and procedures.
reduced paper work, effective delegation and higher productivity.
iv) AUTHENTICITY:
Authenticity is the congruence between what one feels, says and does. It is
reflected in owning up one's mistakes, and in unreserved sharing of feelings.
Authenticity is closer to openness.
OUTCOME: The outcome of authenticity in an organisation is reduced
distortion in communication. This can be seen in the correspondence between
members in an organisation & Sharing of feelings freely to improve
interpersonal communication.
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v) PRO-ACTION:-
Taking initiative, preplanning and taking preventive action. Pro activity gives
initiative to the person to start a new process or set a new pattern of behaviour.
A person showing proactivity functions at all the three levels of feeling,
thinking and action.
OUTCOME: Taking and planning actions at immediate concerns.
vi) AUTONOMY:-
Autonomy is Using and giving freedom to plan and act in one’s own sphere. It
means respecting and encouraging individual and role autonomy. It develops
mutual respect and is likely to result in willingness to take on responsibility,
individual initiative, better succession planning. The main indicator of
autonomy is effective delegation in organisation and reduction in references
made to senior people for approval of planned actions.
OUTCOME: Develops mutual relationships, reduce reference made to senior
people.
vii) COLLABORATION:-
Collaboration is giving help to, and accepting help from others in team. It
means working together (individuals and groups) to solve problems and team
spirit.
OUTCOME: The outcome of collaboration includes timely help, team work,
sharing of experiences, improved communication and improved resource
sharing.
viii) EXPERIMENTATION:-
Experimenting means using and encouraging innovative approaches to solve
problems, using feedback for improving, taking a fresh look at things and
encouraging creativity.
OUTCOME: The outcome of experimenting leads to development of new
product, methods, and procedures.
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5. RESEARCH METHODOLOGY
This chapter describes the problem under consideration, hypothesis, objectives,
methodology, sampling, scope and significance of the study and limitations of
the study.
5.1 Statement of Problem
The present research project attempts to probe into the Human Resource
Development climate prevalent in the Himalaya Credit Co-operative Society
Limited, Nagpur in terms of General climate, OCTAPACE culture,
implementation of HRD mechanisms, overall HRD climate etc.
5.2 Scope of the study

The scope of the study is limited to Himalaya Credit Co-operative Society
Limited Nagpur for the period from April 2007 to March 2010 for analysis of
secondary data relating to performance appraisal, training and development,
reward orientation, organizational development, welfare and quality of work
life, career planning counseling, human resource information system etc.
Primary data will be collected from statements by administering a standard
questionnaire for this purpose.
5.3 Objectives of the study:

Clearly and well defined objectives help in timely conduct of the research
work so as to fulfil the very purpose. Objectives of the study are as under:
 To know about the profile of The Himalaya Credit Co-operative Society
Limited, Nagpur.
 To understand the socio-economic characteristics of the sample
employees.
 To find out the opinions of employees on various aspects of general
climate prevailing in The Himalaya Credit Co-operative Society
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Limited, Nagpur.
 To examine the OCTAPACE culture in terms of - openness,
collaboration, Trust, Autonomy, Proactivity, Authenticity, confrontation,

experimentation in the Himalaya Credit Co-operative Society Limited,
Nagpur.
 To study the human resource development in cooperatives and to
understand the issues and challenges of HRD practices in cooperatives

so as to suggest measures for improving them.
5.4 Hypothesis
A hypothesis is a proposition- a tentative assumption which a researcher wants
to test for its logical or empirical consequences. Working hypotheses are more
useful when stated in precise and clearly defined terms. As such the manner in
which research hypotheses are developed is particularly more important since
they provide the focal point for research. They also affect the manner in which
tests must be conducted in the analysis of data and indirectly the quality of data
which is required for analysis. In most types of research, the development of
working hypothesis plays an important role. Hypothesis should be very specific
and limited to the piece of research in hand because it has to be tested. The role
of the hypothesis is to keep the researcher by delimiting the area of research
and to keep him on the right track. It sharpens his thinking and focuses
attention on the more important facets of the problem. It also indicates the type
of data required and the type of methods of data analysis to be used.2
The following hypothesis has been formulated for the purpose of the present
study:-
Good OCTAPACE (Openness, Collaboration, Trust, Autonomy,
Proactivity, Authenticity, Confrontation and Experimentation) helps in
improved co-operation and co-ordination among the members of the
Himalaya Credit Co-operative Society Limited, Nagpur.
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5.5 Data collection:
Every type of research requires two types of data to be collected to reach up to
any conclusion. These are:
a) Primary data: Primary data are those statistical data, which are
collected for the first time and are original in nature. Primary data are generated
when the researcher by employing Mail Questionnaire, Telephone Surveys,
Personal Interviews and Observations investigates a particular problem at hand.
The research performed through the study is descriptive research. A descriptive
study is under taken in order to ascertain and be able to describe the
characteristics of variables of interest in a situation. The purpose of choosing
descriptive design is to achieve new insights into the culture, to formulate a
complete and comprehensive picture of organizational culture affecting the
well being of employees.
 Interviews with Board of Director, Administrative staff, and other
employees at various level etc.
 A sample is taken for the study using stratified sampling method with
sample size of twenty.
 The study is based on primary data collected from the staff of Himalaya
Credit Co-operative Society Limited Nagpur in the form of schedule and

the schedule covers the following aspects:-
 Socio-economic profile of the respondents.
 OCTAPACE culture
 General climate
The following aspects have been examined:
 Background & business
 Operating performance
 Management systems
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 Key issues in functioning
 Organizational structure
 Manpower particulars
 Recruitment & selection
 Promotion
 Future prospects
b) Secondary data: Secondary data are those data which are collected and
published by one organization and subsequently treated and utilized by other
organizations. Secondary data is collected from:
(i) Official publications of Central/State government & semi-government
organizations.
(ii) Publications of Research & Financial Institutions.
(iii) Publications of International bodies.
(iv) Books, magazines & newspapers.
(v) Periodicals, journals and websites.
(vi) Other records & reports provided by the Himalaya Credit Co-operative
Society Limited, Nagpur.
5.6 Significance of the study
The present study will help the management of the Himalaya Credit
Co-operative Society Limited, Nagpur to understand the Human Resource
Development climate prevailing in the organization and possibly exert a
positive influence to improve it. The management may be motivated to evolve
or modify policies in the area of performance appraisal, Training &
Development, Reward orientation, organizational development, employee
welfare, quality of work life etc. so as to achieve better results leading to
improved performance of the corporation.
The study may be useful to the management, and the Government to improve
the existing state of affairs by applicability of the suggestions offered. Hence
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on the basis of facts, opinions, inferences and corroborative evidence the
existing situation as well as what needs to be done by way of modifications is
shown in the present study.
The research study is significant to assess the need of human resource
development which is often ignored in cooperatives. The present study is useful
to the policy planners in their efforts to improve the working of the present
system. It is useful to the academicians and students to study the present
system.
5.7 Limitations of the Study
The limitations of the research study are as follows:
(a) Survey data is reliable and compatible over time, but is not the
absolute truth every time.
(b) This research study is carried in Nagpur district of Maharashtra
State.
(c) The scope of this study is limited to the study of Human Resource
Development Aspect in the Himalaya Credit Co-operative Society
Limited Nagpur.
(d) This study is based on primary and secondary sources of data & it is
difficult to get quick response from the executives.
(e) Selection of different respondents is based on random.
(f) Human beings have a tendency to behave artificially when they
know that they are being observed or given importance. This aspect
of a human being distorts the result of the research.
(g) Errors in sampling procedures and selecting the samples and size are
expected.
(h) Important documents as minutes and resolutions of meetings & final
decisions and reports may not be available.
(i) It is difficult for a single researcher to do this study, as it takes much
time and money.
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6. INTERPRETATION OF THE COLLECTED DATA
In this chapter, the opinions of sample respondents about the Human Resource
Development aspect prevalent in The Himalaya Credit Co-operative Society
Limited, Nagpur are analysed and interpreted to come to the conclusion. The
questionnaire is divided into three parts. Part – 1: Deals with General
climate prevailing in The Himalaya Credit Co-operative Society Limited,
Nagpur - while Part - 2 Deals with OCTAPACE culture. Part - 3 deals with
HRD sub-systems that prevails in The Himalaya Credit Co-operative Society
Limited, Nagpur.
The following comprehensive questions were put up in the questionnaire for
getting the feedback from sample respondent i.e., the employees/ staff at
various levels and branches of the said bank:-
 The top management of this organization goes out of its way to make sure
that employees enjoy their work.
 The top management believes that the human resources are an extremely
important resource and that they have to be treated more humanly.
 Development of the subordinates is seen as an important part of their job by
the managers / officers here.
 The personnel policies in this organization facilitate employee development.
 The top management is willing to invest a considerable part of their time
and other resources to ensure the development of employees.
 Senior officers / executives in this organization take active interest in their
juniors and help them learn their job.
 The psychological climate in this organization is very conducive for any
employee interested in developing by acquiring new knowledge and skills
 Employees in this organization are very informal and do not hesitate to
discuss their problems with their supervisors.

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 When an employee does good work, his supervising officer takes special
care to appreciate it
 People in this organization do not have any fixed mental impressions about
one another.
 Employees are not afraid to express or discuss their feelings with their
superiors
 Employees are not afraid to express or discuss their feelings with their
subordinates.
 People in this organization are helpful to one another
 Team spirit is of high order in this organization
 Organizations future plans are made known the managerial staff to help
them develop their juniors and prepare them for future
 Managers in this organization believe that employee behavior can be
changed and people can be developed at any stage of their life
 When an employee makes a mistake, his supervisors treat it with
understanding and help him to learn from such mistakes rather than
punishing him or discouraging him
 People trust one another in this organization
 Performance appraisal reports in this organization are based on objective
assessment and adequate information and not on favoritism
 When employees are sponsored for training, they take it seriously and try to
learn from the programs they attended
 Employees who return from training programs are given opportunities to try
out they have learnt
 The top management of this organization makes efforts to identify and
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utilize the full potential of the employees
 Employees are encouraged to take initiative and do things on their own
without having to wait for instructions from superiors
 Delegation of authority to encourage juniors to develop them and make
them handle higher responsibilities is quite common in this organization
 When seniors delegate authority to juniors, the latter use it as an
opportunity for development
 Employees in this organization take pains to find out their strengths and
weaknesses from their supervising officers or colleagues
 When problems arise people discuss these problems openly and try to solve
them rather than keep accusing one another behind the back
 Employees are encouraged to experiment with new methods and try out
creative ideas
 People lacking competence in doing their jobs are helped to acquire
competence rather than being left unattended.
 Seniors guide their juniors and prepare them for future responsibilities /
roles they are likely to take up
 Promotion decisions are based on the suitability of the promotee rather than
on favoritism
 There are mechanisms in this organization to reward any good work done or
any contribution made by employees
 Weaknesses of employees are communicated to them in a non - threatening
way
 When behavioral feed back is given to employees, they take it seriously and
use it for development
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 Employees are sponsored for training programs on the basis of genuine
training needs
 Career opportunities are pointed out to juniors by senior officers in this
organization
 This organization ensures employee welfare to such an extent that the
employees can save a lot of their mental energy for work purpose
 Job rotation in this organization facilitates employee development.
6.1 Analysis
On the basis of responses of the employees the following analysis has been
done which is presented in the form of graphs given below-
EMPLOYEES FEEDBACK IN GRAPHICAL REPRESENTATION
 (1)
RESPONSE OF EMPLOYEES OF HIMALAYA CREDIT

CO-OPERATIVE SOCIETYNAGPUR FOR POSITIVE
100
80 HR-CLIMATE
80
RESPONSE IN %
60
40
20 15
5
0
YES NO CAN'T SAY
RESPONSE PARAMETER
As it is clear from the above graph that 80% of the respondents are of the
opinion that positive human resource climate prevails in the Himalaya Credit
Co-operative Society Limited Nagpur which shows the prevalence of good
OCTAPACE culture in the organization.
75 |
 (2)

CO-OPERATIVE SOCIETY NAGPUR FOR
100 OPENNESS
85
RESPONSE IN %
80
60
40
20 10
5
0
YES NO CAN'T SAY
RESPONSE PARAMETER
As it is clear from the above graph that 85% of the respondents feel free to
communicate their thoughts to their seniors and higher ups as they get good
attention/ hearing and also their ideas are suitably rewarded if beneficial to the
organizational success.

 (3)

CO-OPERATIVE SOCIETY NAGPUR FOR
100 90 COLLABORATIVENESS
RESPONSE IN %
80
60
40
20 10
0
0
YES NO CAN'T SAY
RESPONSE PARAMETER
The above graph depicts that 90% of the respondents are positive about the
presence of collaborativeness which itself shows helping nature of seniors
towards subordinates and mates prevails in the organization. Every employee is
always ready to help other employees irrespective of the rank. This helps for
better and efficient working of employees.
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 (4)
RESPONSE OF EMPLOYEES OF HIMALAYA CREDIT CO-

OPERATIVE SOCIETY FOR TRUSTWORTHINESS
100 90
RESPONSE IN %
80
60
40
20 10
0
YES NO CAN'T SAY
RESPONSE PARAMETER
The above graph makes it clear that a sense of trust prevails amongst the
employees and the management which inspires and motivates the employees to
work to their highest potential level.
 (5)

CO-OPERATIVE SOCIETY FOR AUTONOMY
70
60
RESPONSE IN %
60
50
40
30
30
20
10
10
0
YES NO CAN'T SAY
RESPONSE PARAMETER
The above graph shows that Organization has given restricted autonomy to the
lower level employees for taking decisions else they had to take permission of
management before implementing any important task/ assignment.
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 (6)

CO-OPERATIVE SOCIETY FOR AUTHENTICITY
RESPONSE IN %
100 95
90
80
70
60
50
40
30
20
10 5
0
0
YES NO CAN'T SAY
RESPONSE PARAMETER
As it is clear from the above graph that very high degree of Authenticity
prevails in the bank’s environment and among employees.

 (7)

CO-OPERATIVE SOCIETY FOR PROACTIVENESS
45
40 40
40
35
30
RESPONSE IN %
25
20
20
15
10
5
0
YES CAN'T SAY RESTRICTED
RESPONSE PARAMETER
The above graph shows that proactiveness exists amongst the employees but
they have to act as per the rules and set frame-work of the bank.
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 (8)

CO-OPERATIVE SOCIETY FOR CONFRONTATION
90 80
RESPONSE IN %
80
70
60
50
40
30
20 10 10
10 0
0
YES NO CAN'T SAY
RESPONSE PARAMETER
Above graph gives a clear indication that confrontation by the employees for
the assigned task and duties or responsibilities is being done suitably by them.

 (9)

CO-OPERATIVE SOCIETY FOR EXPERIMENTATION
50
RESPONSE IN %
40 40
40
30
20
20
10
0
0
YES NO CAN'T SAY
RESPONSE PARAMETER
As it is clear from the above chart new suggestions and innovative ideas which
will benefit the organization are welcomed by the Board of Directors. The
power to make final decision lies with the Board of Directors. They are the
authority to allow experimentations. New ideas and suggestions are discussed
in their meetings for checking the viability before experimenting the same for
making good policy decisions.
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EMPLOYEES FEEDBACK IN GRAPHICAL PRESENTATION
 (10)
RESPONSE OF EMPLOYEES OF HIMALAYA CREDIT CO-

OPERATIVE SOCIETY FOR OVERALL "OCTAPACE"
CULTURE IN THEIR SOCIETY
80 70
RESPONSE IN %
70
60
50
40
30 20
20 10
10
0
YES NO CAN'T SAY
RESPONSE PARAMETER
As it is clear from the above chart the overall OCTAPACE culture of the
Society is above average and 70% of the employees have given positive
response but still there are areas for further improvement in the dimensions of
proactiveness autonomy and experimentation. There is lack of flexibility and
innovativeness. Employees feel that they should be given freedom to work for
the benefit of organization.
Hence Hypothesis stands proved.
6.2 Interpretation of the collected data:

In this chapter, an attempt has been made to examine the general climate,
OCTAPACE culture (Openness, Collaboration, Trust, Authenticity, Proactivity,
Autonomy, Confrontation, Experimentation) and HRD sub-systems like -
Performance appraisal, Training and development, Career planning, Counseling,
Reward mechanisms, Organizational development, welfare and quality of work life,
Human resource information systems etc.
6.2.1. General Climate
General climate refers to the willingness of management to help and develop
its employees. It also examines whether the personnel policies are employee
oriented or not. Above all, it refers to the psychological climate (whether positive
or negative) that prevails in a particular organization.
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6.2.2 OCTAPACE Culture
It refers to the level of openness, help or collaboration that exists in the
organization. It also indicates the level of trust between superiors and
subordinates. All the same, whether employees enjoy autonomy or not will be
known. Above all, it reveals about the level of initiative and experimentation
taken up by employees.
Some of the dimensions OCTAPACE such as experimentation, autonomy, and
proactiveness are closer to the lower norms of the value which depicts that the
preplanning and futuristic thinking is not there in the organization. The
employees are not always given freedom to take decisions.
Trust, Authenticity, Openness, and Collaborativeness in the organization are at
the higher level. This shows that there is freedom to communicate with in the
organization they respect help and trust each other which specifies that there
mutual understanding between them. It is reflected from the extended
delegation of work and responsibility among them. Team involvement and
team spirit is high and people help each other in solving out the problems.
Confrontation is at satisfactory level which specifies that employees face the
problems and clarity in problem solving is also satisfactory among employees.
Experimentation is at the lower level which represents that the top management
lacks to encourage employees in building their innovative thoughts, ideas and
new processes which is essential in this competitive world.
6.2.3 Findings:
Following are the findings of the study of HRD climate in The Himalaya Credit
Co-operative Society Limited, Nagpur. (With reference to HRD aspects like -
General climate, OCTAPACE Culture, HRD sub-systems which include -
Performance appraisal, training & development, organizational development,
career planning, counseling, human resource information systems, employee
welfare, quality of work life:-
a) In a nut-shell the overall HR Climate is excellent as compared to other
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similar status co-operative societies in the city. Only there is a need to
further improve the climate by initiating/ implementing strong grievance
redressal mechanism and appointing a specialist in HRD to improve the
working standard, approach to work and self improvement of employees.
This will create a sense of belongingness among employees and loyalty
of employees will be enhanced.
b) There is a need to raise the confidence level of the employees so as to
enable them to compete in the present competitive market where highly
talented, educated & trained marketing experts exist.
c) The command over English should be improved as the employees of this
bank are not conversant in English which is most important nowadays.
d) Employees to be imparted training from the expert trainers/ motivators
for personality development and confidence building for achieving better
results in future.
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7. CONCLUSION
An economy based on one form of business organization alone is neither
desirable nor possible in modern times. The best economic order is achieved
through a mixed economy. To justify their existence and fulfil their purpose,
cooperatives must make a significant and unique contribution to solving some
of the massive problems facing mankind today. As business organizations,
cooperatives are partly private, partly public, but essentially different from both
private enterprise and public enterprise. They are a "middle way", an economic
sector in their own right. The distinguishing feature of cooperative business is
its dual nature as economic enterprise and social organization.
Co-operatives play a very important role worldwide in poverty reduction,
facilitating job creation, economic growth and social development by
combating exploitation, reducing disparities, improving social conditions
employment generation entrepreneurial development and gender sensitivity. It
is preferably more desirable form of community-based organization.
A cooperative is a unique form of business used by people and businesses for
their mutual benefit. Regardless of its purpose or membership, starting a
cooperative requires considerable time, energy, commitment, and technical
resources. Recognition of a common need is fundamental to the formation and
successful operation of a cooperative. Potential members must devote much
time and energy to developing their new business. A cooperative requires
member commitment.
Cooperatives are value-based, member-based, member-owned and
democratically controlled. The primary purpose of a cooperative is to satisfy
the social and economic needs of its members. Cooperatives most often act by
common consent and persuasion. They fail to impose strict disciplines because
of their voluntary and democratic nature. Managerial decisions are moved by
sympathy and relationship which is against the societies’ bylaws and principles.
This will result in serious repercussion in the long run. The different needs of
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customers, members, patrons, and owners challenge the cooperative’s board of
directors and manager to make good business decisions.
Education to all those responsible for cooperatives (directors, officers,
members, staff) is of paramount importance in this sector to improve the ability
and quality of decision making as education makes people easy to lead, but
difficult to drive; easy to govern but impossible to enslave. A cooperative
without a strong component of education is in danger of losing its essential
character, that is, the human and personal characteristics which distinguish it as
a cooperative.
Lack of capital professional management cultural transformation and global
competition are the major problems of Cooperative Societies. Governments are
expected to provide a supportive policy, legal and institutional framework,
provide support measures based on activities, provide oversight on terms
equivalent to other forms of enterprise and social organization, adopt measures
to improve access to finance for disadvantaged groups, and to promote the
formalization of the informal economy. Government can contribute
significantly to improving cooperative performance by facilitating access of
cooperatives to support services, particularly support to cooperative human
resource development by organising trainings workshops etc. Effective training
is an investment in the human resource of an organization, with both immediate
and long range returns.
After analysis of the feedback received from all the sample respondents
following are the conclusions –
7.1 HR Climate:
Prevailing HR Climate is far better as compared to other similar
establishments. Most of the employees feel that they are taken care of in a
better manner by their Board of Directors, Managers and the sub-ordinates.
Low interest and easy repayment facility financial help in the form of loans as
per the prevailing rules are being given to the employees as and when required.
Positive atmosphere and positive feeling prevails amongst most of the
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employees towards influencing them to continue to work in the same
organization for longer period fore-seeing the worst condition of employees in
the other private and co-operative banks/institutes. Most employees opted to
continue working for the same bank reason being healthy and positive HR
Climate prevailing in the organization and employees at lower & middle level
shares good rapport with the seniors and Board of Director. Also the share
holders give respect to the employees due to their good behavior and
communication with them.
7.2 OCTAPACE CULTURE:-
a) OPENNESS: Employees feel free to communicate their thoughts to
their seniors and higher ups as they get good attention/ hearing and also
their ideas are suitably rewarded if beneficial to the organizational
success.
b) COLLOBORATIVENESS: helping nature of seniors towards
subordinates and mates prevails in the organization. Every employee is
always ready to help other employees irrespective of the rank. This
helps for better and efficient working of employees.
c) TRUST WORTHINESS: A sense of trust prevails amongst the
employees and the management which inspires and motivates the
employees to work to their highest potential level.
d) AUTHENTICITY: Authenticity prevails in the bank’s environment and
employees.
e) PROACTIVENESS: The proactiveness exists amongst the employees
but they have to act as per the rules and set frame-work of the bank
DDR and Registrar of co-operative societies..
f) AUTONOMY: Organization has given restricted autonomy to the lower
level employees for taking decisions else they had to take permission of
management before implementing any important task/ assignment.
g) CONFRONTATION: The confrontation by the employees for the
assigned task and duties or responsibilities is being done suitably by them.
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h) EXPERIMENTATION: As the final decision power lies with the Board of
Directors for making the Policy Decisions they are the authority to allow
experimentations but the new innovative suggestions are always welcomed
by them and are discussed in their meetings for its viability before
experimenting the same.
The main motto of the Himalaya Credit Co-operative Society Limited is----
"LIKE A TREE WE MUST BRANCH OUT AND REACH THE WORLD".
During the study it is found to be true and it is being worked upon by the
employees of all the branches.
The discipline, maintenance, unity and proper management are the key to main
success of Himalaya Credit Cooperative Society Limited, Nagpur. It treats all
its employees as a family. This family is known as Himalaya Bank Pariwar.
There is no distinction between Officers and lower ranked employee. To add to
the family feeling everyone eats at a common place at a time and the
departmental head also shares the table next to them. It is therefore rightly said
by the Himalaya Bank’s personnel that "we shall derive superior performance
and whole Himalaya Bank’s Core value as ONE TEAM".
Behind the success of the bank the main reason is that they recruit and select
the best candidate for the job or right men for the right job. Therefore bank
mainly concentrate on the selection process. There are various methods and
techniques used for selecting the employees because they want the best
candidate for their job. It has qualified personnel and it appoints the person
who has qualified GDC & A and Post Graduate in Commerce and management.
7.3 Motivation & Morale: -

Management is an art of getting the work done through others and thereby
achieving the best results. Getting the work done through others towards the
accomplishment of the objectives of the organization depends upon skills of
inducing the people to perform better by inspiring the employee. It may rightly
be called that motivation is the most important function of the Human Resource
86 |
Development.
Motivation is thus an art of simulating the people to take desirable action. A
fully developed employee would be highly motivated to work therefore in
order to make the employee motivated to work and to decrease the employee
turnover ratio, human resource development is absolutely mandatory.
On the other hand morale is referred to "Willingness to work". Job satisfaction
and dissatisfaction creates the problem of morale among the employee. If
employee is satisfied with his work, his morale will be high and if he is
dissatisfied with his job his morale will be low. "Good motivation leads to high
degree of morale” Therefore the top most executives of the bank pay due
attention to provide motivation.
So we can say that prevalence of conducive HRD climate helps in early
identification of human resource potential and skill development. There exists
good HRD Climate in the organization. The managers in general showed a
favourable attitude towards HRD Policies and practices of the organization.
They were satisfied with the developmental policies of the top management as
well as contented with their work and the organization as a whole i.e. level of
job satisfaction is also good.
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8. SUGGESTIONS FOR IMPROVEMENT IN HR CLIMATE FOR
BETTER WORKING AND SUCCESSFUL ENVIRONMENT

Change in the organization's basic culture from a fear-based hierarchical
top-downwards "tell people what to do" attitude to a 'person-centred'
care-based culture where everyone respects everyone else and works
co-operatively for the good of the whole is the basic requirement in the present
context for building a strong foundation to get success.
8.1 Suggestions for all the Credit Cooperative Societies:

In general, the top management should promote and imbibe culture among the
employees to feel free to discuss their ideas, activities and feelings about the
area of their operations related to their job description. The management should
encourage their subordinates to confront problems bravely without searching
escape routes. The employees should be given training in developing
confrontation abilities and approaches for the creative problem solving. The
management should exhibit a very high level of authenticity implying that what
it says, it means and what it means, it says. Accepting people at their face value
and trusting their words and approach in the true spirit promotes authenticity.
The culture of pro-activity resolving issues should also be promoted. The
management should involve people to anticipate the problems and provide for
arrangements for their resolutions well in advance so that the necessary
systemic and process changes are made without compromising quality and
quantity. Thus, the management should work for developing the conducive
organisational culture that requires the culture of openness, collaboration, trust,
pro-activity, autonomy, authenticity, confrontation and experimentation.
Keeping in view the significance of effective human resource development in
cooperatives which can be achieved by following the principles of
co-operatives in true sense the following suggestions may be given:
88 |
a. HR manager should be appointed who will undertake various HRD
activities evaluate HRD practices and adopt transparency in the
recruitment of the staff.
b. Workshops should be organised to give awareness to the
members/Board of Director/General Public about the values and
principles of cooperatives.
c. Training should be arranged for Board of Directors/members/
employees so that the principles may be implemented in the right spirit.
d. Educational programmes should be arranged to tell about successful
cooperative societies.
e. There is a need to raise the confidence level of the employees so as to
enable them to compete in the present competitive market where highly
talented, educated & trained marketing experts exist.
f. The command over English should be improved as the employees of this
bank are not conversant in English which is most important nowadays.
g. Employees to be imparted training from the expert trainers/ motivators
for personality development and confidence building for achieving better
results in future.
8.2 Recommendations for Himalaya Credit Cooperative Society,

Nagpur:
Despite of almost flawless performance of 25 years (2013) with increased
membership of 9563 from just 500 members in the beginning there are a few
suggestions based on the study of the bank as it is audited with ‘B’ Certificate
because of losses for two years and the main reason is decline in deposits
though profit and loss account show decrease in expenses-
 From the findings it is evident that the Authenticity, Autonomy and
Experimentation are at the lower level. Hence the management must

provide adequate opportunities for the employees to enhance the
89 |
creativity of the employees for the development.
 The top management must give the employees freedom to make
subordinates down hierarchy to participate in decision making as this

will improve the participation of the employees and belongingness
towards the job.
 Management must imbibe culture within the employees by encouraging
the quality of work life and organization effectiveness and to encourage

free interaction among employees.
 The organization should empower employees and encourage them to
make decisions for themselves without the fear of negative

repercussions along with gradual enlargement of duties.
 To promote the experimentation among the employees, the management
should conduct brain storming sessions which will generate new and
innovative ideas and also collaboration among employees.
 Employee satisfaction survey must be done at regular intervals to get the
actual picture of work culture and also to find out the changing attitude
among the employees.
 The top management should delegate and empower people lower in the
hierarchy. The maximum possible autonomy should be provided so that

the problems are solved at their source at the grass root level.
 The management should involve employees to think likely the problems
and arrangements for their resolutions well in advance so that the

necessary systemic and process changes are made without
compromising quality and quantity.
 The human resource planning is done at the head office, for all other
branches some flexibility should be allowed by the head office, certain

decisions should be allowed to be made by the branch.
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 Group discussion is not included in the process of interview and tests in
the Himalaya Credit Co-operative Society Limited. So it is suggested

that group discussions should be conducted for making the development
of the employees. If group discussion is done the candidate may become
more capable for doing his job. The employees’ personality, behavior,
attitude may be improved. With the help of group discussion the
candidate knows about the various current affairs of the world. So by the
group discussion the bank may get more suitable candidates for filling
up the vacant seats.
 Discipline, unity, proper management, proper coordination, good
communication is required for the continued success of bank.
 Also, if the bank provides common dress/ dress code then there will be
more uniformity, equality, symphony/ harmony amongst all ranks of

employees.
8.3 Ending Remarks:

“The top two obstacles encountered during the major organizational
changes are communication breakdown and employees’ resistance.”
The Society for Human Resource Management (SHRM) 2007, Change
Management Survey Report.
The organizational culture at Himalaya Credit Cooperative Society, Nagpur is
good overall with respect to the essential dimensions required which includes
pre planning, trust, free communication among employees. Some of the
dimensions of OCTAPACE culture viz. Proactiveness, Autonomy and
Experimentation shows lower limit.
Collaboration and trust among employees should be cultivated among
employees which is essential for every organization for its effectiveness. Thus,
the management should work for develop the organizational culture that
requires the culture of openness, collaboration, trust, pro-activity, autonomy,
91 |
authenticity, confrontation and experimentation, which is interconnected and
essential for every organization for its development.
In a nut-shell the overall HR Climate is excellent as compared to other similar
status co-operative societies in the city. Only there is a need to further improve
the climate by initiating/ implementing strong grievance redressal mechanism
and appointing a specialist in HRD to improve the working standard, approach
to work and self improvement of employees. This will create a sense of
belongingness among employees and loyalty of employees will be enhanced.
92 |
9. REFERENCES
Books:
1. Choudhary, H. Roy 2001 : “Research Methodology”, Sahitya Bhawan
Pub. & Distrib, Agra.
2. Indian Institute of 2010 : “Cooperative Banking”, Macmillan
Banking and Publishers India Limited, Chennai.
Finance, Mumbai,
3. Sharma, G.D. 1999 : “Principles of Management”, Ramesh
Book Depot, Jaipur
4. Upadhyay, B.B. 2005 : “Production Management”, Rajasthan
Hindi Granth Academy, Jaipur.
5. Saxena, S.C. 2005 : “Business Administration & Management”,
Sahitya Bhawan Publications, Agra.
6. Kothari, C.R. 2003 : “Research Methodology”, Vishwa
Publisher.
7. Drucker, Peter F. 2001 : “Management Challenges for the 21st
Century”, Butterworth Heinemann, Oxford.
8. Weihrich and 1998 : “Essentials of Management”,
Koontz. Tata Mcgraw Hill, New Delhi.
9. Gordon, George G. 1991 "Industry Determinants of Organizational
Culture." Academy of Management Review.
10. Kothari, C.R. 2014 : “Research Methodology”, New Age
International Publicaion , New Delhi.
11. Majhi and Khatua 2013 : “Research Methodology”, Himalaya
Publishing House, Mumbai.
12. Sachdeva, J. K. 2014 : “Business Research Methodology”,
Himalaya Publishing House, Mumbai.
13. Panneerselvam R. 2013 : “Research Methodology”, PHI Learning Pvt.
Limited, New Delhi.
14. Navghare and Kaur 2015 : “Research Methodology”, Seth Publications,
Mumbai.
93 |
15. Krishnaswamy and 2012 : “Research Method and Statistical Analysis”,
Reddy Himalaya Publishing House, Mumbai.
16. Gupta and Joshi 2012 : “Human Resource Management”, Kalyani
Pub. Ludhiana.
17. Mendenhall and 2007 : “Readings and cases in International HRM”,
Stahl Roultedge, London.
18. Bhattacharya D. K. 2008 : “Human Resource Management”, Excel
Books, New Delhi.
19. Gomez and Balkin 2012 : “Managing Human Resource Management”,
PHI Learning Pvt.Ltd, New Delhi.
20. Chauhan Bhavana 2011 : “Human Resource Management”, Seth
Publications, Mumbai.
21. Gupta and Gupta 2012 : “Research Methodology: Text and Cases
with SPSS Applications”, International Book
House Private Limited, New Delhi.
22. Pareek U 2002 : “Training instruments in HRD and OD”,
Tata McGraw Hill, New Delhi.
23. Gordon, George G. 1991 :"Industry Determinants of Organizational
Culture." Academy of Management Review.
Journals and Research Papers:
 International Journal of Computing and Business Research, ISSN
(Online): 2229-6166, Volume 2 Issue 2 May 2011
 International Journal of Human Resource Management and Research
(IJHRMR) , ISSN 2249-6874, Vol. 3, Issue 1, Mar 2013, 63-72
 Amalendu Bhowmick, "Human Development: The Indian
perspective" Personnel Today, A quarterly publication of National
institute of personnel management. July -September 1998, Vol. XIX,
No. 2
94 |
 Srivastava S K and Srinivasa P (2004), “Performance enhancement
through continuous improvement”, paper presented at second world

conference on POM.
 Erakovich R, “A study on relationship of ethical work climate and
organizational culture in public organizations”, Paper presented at

American Society for public administration.
 Feza Tabassum Azmi and Richa Sharma, Profiling OCTAPACE culture:
An empirical study of banking and IT sectors in India”, The Icfai

Journal of Management Research, Vol VI, www.iupindia.org. December
2007
Others:
 Annual reports of the Himalaya Credit Co-operative Society Limited.,
Nagpur.
 Publications of RBI, Government of India, Ministry of Agriculture,
(Department of Agriculture and Cooperation)
 Websites and articles in Economic and Political Review
  END OF REPORT  
But……………it is a beginning for betterment ahead and to explore more
opportunity for enhancement of OCTAPACE culture in all organizations.
95 |
Annexure 1
Questionnaire
(To be filled by only the employees of Himalaya Cooperative Society
limited, Nagpur)
In the context to your Credit Co-operative Society please state for the
following questions whether…………? (Only “YES” or “NO”)
PLEASE STATE FOR THE FOLLOWING QUESTIONS
WHETHER………….
1. The top management of this organization goes out of its way to make
sure that employees enjoy their work. -----------------
2. The top management believes that the human resources are an extremely
important resource and that they have to be treated more humanly.
-----------------
3. Development of the subordinates is seen as an important part of their
job by the managers / officers here. -----------------
4. The personnel policies in this organization facilitate employee
development. -----------------
5. The top management is willing to invest a considerable part of their time
and other resources to ensure the development of employees. -----------------
6. Senior officers / executives in this organization take active interest in
their juniors and help them learn their job. -----------------
7. The psychological climate in this organization is very conducive for any
employee interested in developing by acquiring new knowledge and skills.
-----------------
8. Employees in this organization are very informal and do not hesitate to
discuss their problems with their supervisors. -----------------
9. When an employee does good work, his supervising officer takes
special care to appreciate it. -----------------
10.People in this organization do not have any fixed mental impressions
about one another. -----------------
96 |
11.Employees are not afraid to express or discuss their feelings with their
superiors. -----------------
12.Employees are not afraid to express or discuss their feelings with their
subordinates. -----------------
13.People in this organization are helpful to one another. -----------------
14.Team spirit is of high order in this organization. -----------------
15.Organizations future plans are made known the managerial staff to
help them develop their juniors and prepare them for future. -----------------
16.Managers in this organization believe that employee behavior can be
changed and people can be developed at any stage of their life.
-----------------
17.When an employee makes a mistake, his supervisors treat it with
understanding and help him to learn from such mistakes rather than
punishing him or discouraging him. -----------------
18.People trust one another in this organization. -----------------
19.Performance appraisal reports in this organization are based on objective
assessment and adequate information and not on favoritism. -----------------
20.When employees are sponsored for training, they take it seriously and
try to learn from the programs they attended. -----------------
21.Employees who return from training programs are given opportunities
to try out they have learnt. -----------------
22.The top management of this organization makes efforts to identify and
utilize the full potential of the employees. -----------------
23.Employees are encouraged to take initiative and do things on their own
without having to wait for instructions from superiors. -----------------
24.Delegation of authority to encourage juniors to develop them and make
them handle higher responsibilities is quite common in this organization.
-----------------
25.When seniors delegate authority to juniors, the latter use it as an
opportunity for development. -----------------
26.Employees in this organization take pains to find out their strengths and
weaknesses from their supervising officers or colleagues. -----------------
97 |
27.When problems arise people discuss these problems openly and try to
solve them rather than keep accusing one another behind the back.
-----------------
28.Employees are encouraged to experiment with new methods and try out
creative ideas. -----------------
29.People lacking competence in doing their jobs are helped to acquire
competence rather than being left unattended. -----------------
30.Seniors guide their juniors and prepare them for future responsibilities /
roles they are likely to take up. -----------------
31.Promotion decisions are based on the suitability of the promotee rather
than on favoritism. -----------------
32.There are mechanisms in this organization to reward any good work
done or any contribution made by employees. -----------------
33.Weaknesses of employees are communicated to them in a non - threatening
way. -----------------
34.When behavioral feed back is given to employees, they take it seriously
and use it for development. -----------------
35.Employees are sponsored for training programs on the basis of genuine
training needs. -----------------
36.Career opportunities are pointed out to juniors by senior officers in this
organization. -----------------
37.This organization ensures employee welfare to such an extent that the
employees can save a lot of their mental energy for work purpose.
-----------------
38.Job rotation in this organization facilitates employee development.
-----------------
98 |
Annexure 2
List of Cooperative Banks
State Cooperative Banks (SCBs)
List of State Cooperative Banks:
1. Andaman and Nicobar State Co-operative Bank

2. Andhra Pradesh State Co-operative Bank
3. Arunachal Pradesh State Co-operative Apex Bank
4. Assam Co-operative Apex Bank
5. Bihar State Co-operative Bank
6. Bharat Co-operative Bank
7. Chandigarh State Co-operative Bank
8. Chhattisgarh Rajya Sahakari Bank Maryadit
9. Delhi State Co-operative Bank
10. Goa State Co-operative Bank
11. Gujarat State Co-operative Bank
12. Haryana State Co-opertive Apex Bank
13. Himachal Pradesh State Co-operative Bank
14. Jammu and Kashmir State Co-operative Bank
15. Jharkhand State Co-operative Bank
16. Karnataka State Co-operative Apex Bank
17. Kerala State Co-operative Bank
18. Madhya Pradesh Rajya Sahakari Bank Maryadit
19. Mogaveera Co-operative Bank
20. Maharashtra State Co-operative Bank
21. Manipur State Co-operative Bank
22. Meghalaya Co-operative Apex Bank
23. Mizoram Co-operative Apex Bank
24. Nagaland State Co-operative Bank
25. Orissa State Co-operative Bank
26. Pondichery State Co-operative Bank
27. Punjab State Co-operative Bank
28. Rajasthan State Co-operative Bank
29. Sikkim State Co-operative Bank
30. The Tamil Nadu State Apex Co-operative Bank
31. Telangana State Co-Operative Apex Bank Limited
32. Tripura State Co-operative Bank
33. Uttar Pradesh Co-operative Bank
34. Uttarakhand State Co-operative Bank
35. West Bengal State Co-operative Bank
36. Tumkur Grain Merchant's Co-operative Bank
99 |
List of Urban Cooperative Banks (UCBs) Banks in India
Scheduled
1. The Varachha co-operative Bank

2. Ahmedabad Mercantile Co-Op Bank
3. Kalupur Commercial Coop. Bank
4. Mehsana Urban Co-Op Bank
5. Nutan Nagarik Sahakari Bank
6. Rajkot Nagrik Sahakari Bank
7. Sardar Bhiladwala Pardi Peoples Coop Bank
8. Surat Peoples Coop Bank
9. Rajdhani Nagar Sahkari Bank
10. Andhra Pradesh Mahesh Co-Op Urban Bank
11. Indian Mercantile Co-operative Bank
12. Abhyudaya Co-operative Bank
13. Bassein Catholic Co-operative Bank
14. Bharat Co-operative Bank (Mumbai)
15. Bharati Sahakari Bank
16. Bombay Mercantile Co-operative Bank
17. Citizen Credit Co-operative Bank
18. Cosmos Co-operative Urban Bank
19. Dombivli Nagari Sahakari Bank
20. Goa Urban Co-operative Bank
21. Gopinath Patil Parsik Janata Sahakari Bank
22. Greater Bombay Co-operative Bank
23. Jalgaon Janata Sahakari Bank
24. Janakalyan Sahakari Bank
25. Janalaxmi Co-operative Bank
26. Janata Sahakari Bank
27. Kallappanna Awade Ichalkaranji Janata Sahakari Bank
100 |
28. Kalyan Janata Sahakari Bank
29. Karad Urban Co-operative Bank
30. Mahanagar Co-operative Bank
31. Mapusa Urban Co-operative Bank of Goa
32. Nagar Urban Co-operative Bank
33. Nasik Merchant's Co-operative Bank
34. New India Co-operative Bank
35. NKGSB Co-operative Bank
36. Pravara Sahakari Bank
37. Punjab & Maharashtra Co-operative Bank
38. Rupee Co-operative Bank
39. Sangli Urban Co-operative Bank
40. Saraswat Co-operative Bank
41. Shamrao Vithal Co-operative Bank
42. Solapur Janata Sahakari Bank
43. Thane Bharat Sahakari Bank
44. The Kapole Co-operative Bank
45. TJSB Sahakari Bank
46. Zoroastrian Co-operative Bank
47. Nagpur Nagrik Sahakari Bank
48. Shikshak Sahakari Bank
49. Akola Janata Commercial Co-operative Bank
50. Akola Urban Co-operative Bank
51. Khamgaon Urban Co-operative Bank
52. MACO BANK
53. Eenadu Urban Co operative Bank
54. Rohit Kataria Co-operative Bank
As of March 2011 there existed 1592 Non-Scheduled Urban Cooperative

Banks in India.
101 |
Annexure 3
LIST OF ABBREVIATIONS
ANBC Assessed Net Bank Credit
BoD Board of Directors
BoM Board of Management
BR Act Banking Regulation Act, 1949
BRAct, 1949 Banking Regulation Act, 1949 (As Applicable to Co-operative Societies)
(AACS)
CAGR Compounded Annual Growth Rate
CEO Chief Executive Officer
CRAR Capital to Risk-Weighted Assets Ratio
CRCS Central Registrar of Co-operative Societies
CRR Cash Reserve Ratio
DCBR Department of Co-operative Bank Regulation
D-SIB Domestic-Systematically Important Bank
EPN Entry Point Norm
FSWM Financially Sound and Well Managed
HPC High Powered Committee
GoI Government of India
GSA Graded Supervisory Action
G-SIB Global- Systematically Important Bank
IBA Indian Banks Association
IT Information Technology
JLA Joint Legal Advisor
LAB Local Area Bank
MS-UCBs Multi-State Urban Co-operative Banks
MSCS Act Multi-State Co-operative Societies Act, 2002
MFIs Micro Finance Institutions
MoU Memorandum of Understanding
NAFCUB National Federation of Urban Co-operative Banks and Credit Societies
NBFC Non-Banking Finance Company
NPAs Non-Performing Assets
RBI Reserve Bank of India
RBI Act Reserve Bank of India Act, 1934
RCS Registrar of Co-operative Societies
SFBs Small Finance Banks
SCBs Scheduled Co-operative Banks
SLR Statutory Liquidity Ratio
SAF Supervisory Action Framework
TAFCUB Task Force for Co-operative Urban Banks
UCBs Urban Co-operative Banks
UO Umbrella Organisation
102 |

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A MINOR RESEARCH PROJECT

SUBMITTED TO THE UGC

Sanctioned by University Grants Commission, Western Regional Office,

I have not submitted this project to any other University or Institution

Dr. Mrs. Ranjana Sahu

This is to certify that G.S. College of Commerce and Economics

one man job and there is no exception to it. Though it is impracticable to

My fore-most gratitude is to U.G.C. for sanctioning this project.

I am indebted to Shri. Sanjay Bhargav, Chairman Shiksha Mandal Wardha

I will always remain indebted to Mr. Ajay Singh (member) for

his timely guidance and constructive suggestions throughout the course of

this project work.

I shall be failing in my duty if, I do not acknowledge the debt I

owe to Shri. Rajendra Dhote (BOD), for permitting me to undertake the

study of their organization.

I also feel indebted to Ms. Sushma Jharbade & Shri Subhash

S. Mankar, the directors, for their most valuable co-operation in providing

could not have been completed.

Frequent discussion with the office bearer / members of

has helped me a lot in arriving at clear conception and conclusion.

The credit of success of this project report also goes to all

names are not mentioned here.

My heartfelt thanks to God, parents and my family members

project’s successful completion.

Dr. Mrs. Ranjana Sahu

Mahatma Gandhi has said:

‘Suppose I have come by a fair amount of wealth – either by way of

wealth does not belong to me; what belongs to me is the right to an

honourable livelihood, no better than that enjoyed by millions of others.

welfare of the community’.

This forms the essence of the co-operative movement which is based on

the same principles of community camaraderie, mutual help, democratic

decision making and open membership.

India moves towards progressively ‘Knowledge Economy’. Skills and

Knowledge are the important driving forces of economic and social

development of any Country. The Eleventh Five Year Plan focused on

advancement of Skills and these Skills have to be relevant to the

emerging inclusive economic growth of Rural India. Cooperative is one

socio-economic status of members.

has good quality of life of Human Resources. Growth of Credit

Co-operative Societies both vertically and horizontally is quite essential

inclusive growth which is impossible without human resource

development. Human Resource Development of Cooperative Societies

will help to create a better and economically efficient organization for

achieving the desired goals of sustainable development of the nation.

is heading towards knowledge economy and cashless economy posing

new challenges for credit co-operative societies. Therefore it is necessary

to study human resource development aspect of credit cooperative

societies and the operation of Co-operative banks for successful and

effective management of the available human resources to face the

existing competitive market.

The use of good practices of Governance has proved to be fundamental in

the success and continued existence of organizations and Co-operative

Societies are no exception to it. The basic objective of cooperative

organizations is to fulfill members’ social economic and cultural needs.

Cooperative governance represents a democratic system of management

when the exercise of authority is derived from its membership.

Good Governance in cooperatives call for enlightened members,

professional management, good relationship between Board and staff,

application of cooperative principles and values in the right spirit