hapter 5 secondary ata...
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Chapter 5 Secondary Data Analysis
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5.1 Introduction
This research is a triangulation of both longitudinal and cross-sectional data. This
chapter analyses the longitudinal data collected from various documentary
sources – RDCCB, RBI, NABARD and CAB. Other important secondary data is in
the form of the profile of Raigad District. The profile of Raigad District helps set
the research in the right context.
The longitudinal data is in form of history of RDCCB, management structure,
organisational structure, financial information such as authorised and subscribed
share capital, profit, working capital and loans outstanding and issued. Another
useful data is about mobilisation of funds to enable the RDCCB to contribute to
the rural development of the Raigad District.
This chapter analyses the longitudinal secondary data.
5.2 A Profile of the Raigad District
5.2.1 Historical Background
The District of Raigad (called Raigarh in the census) derives its name from the
fort of Raigad. It was part of the erstwhile Kolaba District of the Maharashtra
State. Shivaji in the year 1656 conquered Rairi (Raygad), which was then almost
an inaccessible plateau, from Chandrarao More, the Maratha Chieftain in Bijapur
Court and named it as Raygad (Raigad). Shivaji later made Raigad the seat of his
Government in the year 1664. This district remained a part of the Maratha Empire
until 1818. Thereafter it was merged into the Bombay Province of British India.
The sixteenth century saw the advent and rise of Portuguese power on the west
coast of India and Raigad was no exception. The sultan lost hold on the district in
1675 and it went to the Marathas. The Marathas continued to rule the district until
1817, i.e., when the struggle between the British and the Peshwas came to an
end and the whole of Konkan was transferred to the British. In 1819, South
Konkan was formed as a separate district with headquarters first at Bankot and
later at Ratnagiri. The trade in these ports shrank from foreign commerce to local
traffic when Kolaba became a part of Gujarat ruled by a local chief.
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5.2.2 Geographical Location and Features
Raigad District, with a total geographical area of 7148 sq.KM, is located in the
state of Maharashtra in India. The maps of India, Maharashtra and Raigad District
are given below:
Figure 16: Map of India with location of Maharashtra [Source:
www.mapsofindia.com]
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Figure 17: Districts of Maharashtra (source Maps of India,
http://www.mapsofindia.com/maps/maharashtra/maharashtra.htm)
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Figure 18: Map of Konkan Region (http://www.konkanonline.com/maps/konkan-
map.html)
150
Figure 19: Map of Raigad District (mapsofindia.com)
Raigad Census 2011
Figure 20: Raigad Census 2011 overview
District : Raigad
State : Maharashtra
Population 2,635,394
Population Density 368 Persons/sq. Km.
Male Population 1,348,089
Female Population 1,287,305
Sex-Ratio 955
Total Literacy rate 83.89 %
Male Literacy Rate 90.68 %
Female Literacy Rate 76.79 %
Area (square Kilometre) 7,161.4
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Raigad District profile based on 2001 Census
Total Area 7,148 Thousand Hectare
Climate & Rainfall
Average Rainfall in District 3884.3 M.M.
Minimum Temperature 16.1 Degree Celsius
Maximum Temperature 40.4 Degree Celsius
Geographical Location
North Latitudes 17.51 to 19.80
East Longitudes 72.51 to 73.40
Population (2001 Census)
Total 22.07 lacs
Male 11.17 lacs
Female 10.90 lacs
Rural 16.73 lacs
Male 8.34 lacs
Female 8.39 lacs
Urban 5.34 lacs
Male 2.83 lacs
Female 2.51 lacs
0-6 Population
Persons 3.1 lacs
Males 1.6 lacs
Females 1.5 lacs
Literacy Rates (%)
Total 77
Male 86.1
Female 67.7
Illiteracy Rates (%)
Total 39.6
Male 30.9
Female 48.5
Scheduled Castes-Proportion (%)
Total 2.4
Male 2.4
Female 2.4
Scheduled Tribes-Proportion (%)
Total 12.2
Male 12.2
Female 12.2
Work Participation Rate (%)
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Total 41.4
Male 52.7
Female 29.8
Proportion of Main Workers (%)
Total 30.9
Male 43.3
Female 16.5
Proportion of Marginal Workers (%)
Total 11.3
Male 9.4
Female 13.3
Proportion of Non-Workers (%)
Total 58.6
Male 47.3
Female 70.2
Cultivators-Proportion of Total Workers (%)
Total 28.6
Male 21.8
Female 40.9
Agricultural Labourers-Proportion of Total Workers (%)
Total 20.4
Male 13.9
Female 32.1
Workers in Household Industry -Proportion of Total Workers (%)
Total 2.7
Male 2.3
Female 3.2
Workers in other then Household Industry -Proportion of Total Workers (%)
Total 48.4
Male 62.0
Female 23.8
Sex Ratio
Female per 1000 Males 976
Household size 5.0
Administrative Divisions
Revenue Sub-divisions Alibag, Panvel, Mangaon, Mahad
Tehsil Offices Alibag, Pen, Murud, Panvel, Uran, Karjat, Khalapur, Mangaon, Roha, Sudhagad, Tala, Mahad, Mhasala, Shrivardhan, Poladpur
Municipal Councils 11
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Panchayat Samitis Alibag, Pen, Murud, Panvel, Uran, Karjat, Khalapur, Mangaon, Roha, Sudhagad, Tala, Mahad, Mhasala, Shrivardhan, Poladpur
Gram Panchayats 821
Villages 1919
Table 11: Overview of Raigad District64
5.2.3 Soil and Cropping Patterns
The soils of the Raigad District are essentially derived from the Deccan trap,
which is the predominant rock formation of the district with small out crops of
laterite soil at a few places in Poladpur Tehsil and in the Matheran hills. The main
types of soils found in the district are forest soils, varkas soils, khar or salt soils,
coastal alluvium and laterite soils. Laterite soil yields kharif millets. Rice soils are
formed from the trap rock under heavy rainfall and humid conditions. Coastal
alluvium is devoid of clan fraction or humus and is open in nature. Good garden
crops like coconut, areca nut, plantain etc. are grown in these soils depending
upon the availability of water. They yield coarse millets.
5.2.4 Climate
The climate of the district is typical of that on the west coast of India, with plentiful,
regular and seasonal rainfall during the monsoon season.
The year is divided into four seasons:
i. Summer - March to May
ii. Rainy - June to September
iii. Post Monsoon - October and November
iv. Winter - December to February
The average annual rainfall for the district as a whole is 3028.9 mm. The summer
from March to May is a period of increasing temperature. May is the hottest
month of the year. In the afternoon sea breeze relieves the oppressive heat
particularly in the coastal region. The air is humid throughout the year. During the
southwest monsoons, skies are overcast with clouds. Winds are very strong
during the monsoon season and blow from west to southwest. From October to
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December, the winds are generally moderate and between January and March,
the winds continue to be moderate. In association with cyclonic storms in the
Arabian Sea in the post-monsoon month and to a lesser extent in May, the district
experiences very strong winds, sometimes reaching gale force strength, and
heavy widespread rain. Occasionally these storms cross the coast in the northern
part of the district and cause heavy damage.
5.2.5 Natural Wealth
Minerals: Geologically, the Konkan lowlands are a platform of marine denudation
raised to form a narrow plain. The geology of the entire district consists of dark-
coloured volcanic lava flows and laterite, which date back to the Mesozoic era.
These are spread out in the form of horizontal sheets of beds and have
innumerable spurs, hills, ridges, peaks and plateaus. The Deccan traps generally
lack minerals of economic importance but being hard, dense and durable are
most suitable as building materials. Along the north-south coastal tract between
the sea and the Sahyadris there are three well-known groups of springs in the
district, namely the ‘unhere’, Sav and Vadavali springs. These are known to
possess medicinal value in curing skin diseases and rheumatic complaints.
Nodular kankar, a concretionary lime carbonate, is usually found sporadically on
soils and alluvium covering the Deccan trap in the district. The Kankar, on
burning, yields good time almost comparable in quality with the hydraulic lime. In
addition to kankar, the seashells found along the coast at places are used for the
manufacture of lime. Salt is produced by direct solar evaporation of seawater near
Uran, Sheva, Karanja, Pen and Panvel.
Fisheries: Raigad District, with a coastline of about 240 kilometres is one of the
most important maritime districts of the state. Fishing though considered under-
developed, ranks only next to agriculture as far as means of livelihood is
concerned. The fishing industry is mainly dependent upon the exploitation of
marine resources. The fishing season commences from September and lasts until
the end of May. Sharks, skates, rays, mackerels, sardines, tuna, surmai, pomfret,
karel, dagol and catfish form the main varieties. Bulk of the catch is sent to
Mumbai market. The production is 46,176 tones.
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Forest: According to 1989 records, the forest area in the district is distributed
among 1857 villages accounting for 62.78 percent of the villages in the district.
The total area under forest in Raigad is about 152,634.97 hectares and social
forestry area is about 756.25 hectares. Among the 15 tehsils of the district,
maximum forest area falls under Roha tehsil accounting for 14.34 percent of the
total forest area. Northern tehsils (with clearly marked hill ranges) have rich
forests. Forest products include teak, and Greater Mumbai and Pune provide the
main market for teak wood. The other forest produces are Ain, Deodar, Kinjal and
Khair.
Irrigation: The irrigated area in Raigad District is distributed into 195 villages
constituting 10.53 percent of the total villages. In 32 villages, irrigation is done
only by well. Government canals irrigate a major proportion of area (54.70
percent), while tanks and wells irrigate 14.10 percent and 13.56 percent of the
total area. Rivers and other sources account for nearly 10.00 percent of the total
irrigated area. The percentage of cultivable area to total area of the district is
36.47 percent.
5.2.6 Social Structure
Within the district, the largest village is Ghera Sudhagad with 3753 hectares area
in Sudhagad tehsil, while the smallest village is Shivasangh (uninhabited) with
0.97 hectares area. In terms of population, Chanje village in Uran tehsil has the
highest population of 12,452 while Gavkhar is the smallest village, only four
persons residing in one household.
Population: According to 2001 Census, the total population of the district was
2,205,972 with 1,116,821 males and 1,089,151 females. Among the 15 tehsils,
Panvel tehsil was the most populous having 281,397 people, whereas Poladpur
tehsil falls in the lowest rank with a population of 55,300.
A major proportion of the population of the district i.e., 81.99 percent lives in rural
areas while remaining 18.01 percent reside in urban areas. Out of 1908 villages,
1851 are inhabited. Mangaon tehsil has the highest rural population in the district
and the largest number of inhabited villages. The average size of a village in
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Raigad District is 808. Small-sized villages of less than 500 people together
account for 40.47 percent.
Sr.
No Taluka Geographical Area Population (In ’000)
Inhabited
Villages
Deserted
Villages Town
Total
Area
(Sq.KM)
Male Female Total
1 Alibag 185 23 02 499 92 94 186
2 Uran 52 09 02 186.4 55 52 107
3 Panvel 162 01 03 578.3 148 134 282
4 Karjat 174 01 03 651.2 80 75 155
5 Khalapur 121 01 01 406.1 77 68 145
6 Pen 143 18 01 498.5 75 73 148
7 Sudhagad 95 01 01 458 31 31 62
8 Roha 170 00 01 632.4 70 69 139
9 Mangaon 244 00 01 938.6 85 97 182
10 Mahad 183 00 01 810.5 78 86 164
11 Poladpur 87 00 00 371.5 25 30 55
12 Mhasla 80 02 01 311.7 25 33 58
13 Srivardhan 78 00 01 260.2 35 43 78
14 Murud 72 01 01 265.2 31 33 64
15 Tala * - - - - - - -
Raigad
Dist. 1851 57 19 7148 908 907 1825
Table 12: Raigad District - Taluka wise Area Population (*newly created Taluka,
details included in Roha.
Note: The area of district is from the record of survey of India and area of each
Taluka from the revenue records of the district. Hence, the calculation will not
tally. Source: (1) Survey of India (2) Revenue records (3) Census record-2001.
Population Growth: The population of Raigad District increased from 1,486,452
in 1981 to 1,824,816 in 1991 registering a decadal growth rate of 22.76 percent,
and a decadal growth rate of 20.89 percent from 1991 to 2001. The following
table shows the growth of population in the last two decades.
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District Decadal growth rate
1981-1991 1991-2001
Raigad 22.76% 20.89%
Table 13: Decadal growth of population during 1981-1991 and 1991-2001
(Source: Census of India 2001)
Khalapur Tehsil has shown the highest growth rate of 47.21 percent while
Poladpur has indicated lowest growth rate of 9.85 percent. The level of
urbanisation increased by nearly 4 points during 1981-91. Panvel and Khalapur
Tehsils are the two most urbanised tehsils with 38.80 percent and 31.90 percent
population being urban. Mangaon Tehsil is less urbanised with only 3.63 percent
of population in urban areas.
Population Density: The overall density of population of Raigad District is 255
persons per sq. km. The density of population increased from 209 in 1981 to 255
in 1991 ranking eighth district in Maharashtra state. The Raigad District has a
very high urban density of 2016 persons per square kilometre compared to rural
density of 214. Sudhagad Tehsil has the lowest density of 134 and Roha Tehsil is
the most densely populated (urban) with a density of 8671.
Sex Ratio: According to the 2001 Census, Raigad District has a sex ratio of 975
females per thousand males, which was higher than the State average of 922
females per thousand males, ranking fourth among the 30 districts. The ratio in
Raigad has come down from 1046 in 1981 to 1010 in 1991 to 975 in 2001.
Population of Scheduled Castes and Scheduled Tribes: According to the 1991
Census, 59 Castes and 47 Tribes have been declared to be recognised as
Scheduled Caste (SC) and Scheduled Tribes (ST) respectively.
(A) Scheduled Castes: The Scheduled castes population of Raigad District as
per the 2001 Census is 50,999 comprising 35,681 males and 15,318 females.
They accounted for 2.34% of the district population. A large majority of 1265
villages (69.24%) have not reported any scheduled caste population. The
scheduled caste population in the district has more than doubled during the
decade 1981-91 with a growth rate of 102.52%, whereas the corresponding
growth rate of the general population in the district was 22.76%. The higher
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growth rate of 217.48 percent was shown by Khalapur tehsil while Murud has the
lowest 18.79 percent. The Sex ratio of scheduled caste population in the area
was 999 females per thousand males.
(B) Scheduled Tribes: The scheduled tribe population of Raigad District in 2001
was 233,953 comprising 118,238 males and 115,715 females. They contributed
12.18% of the district population. Out of total 1851 villages, 591 villages (31.93%)
have no ST population at all. The scheduled tribe population in the district
increased by 23% during the decade. The highest growth rate of 103.64 percent
was shown by Sudhagad tehsil while Shrivardhan tehsil has indicated lowest
growth rate 3.69 percent. The sex ratio among the scheduled caste population
was 979 females per 1000 males.
Literacy Rate: According to 2001 Census, 1,470,309 persons were reported as
literate constituting 829,581 male literates and 640,728 female literates. Literacy
in rural areas was 60.48 percent and in the urban areas, it was 73.36 percent.
Table 14: Literacy rates in 1991 and 2001 [Source: Census of India 2001]
5.2.6 Economy of Raigad District
Raigad District is endowed with three major economic resources - agricultural
land, maritime fishery and an abundance of mineral deposits. The district is
famous for paddy and large areas of land have been brought under paddy
cultivation. In addition, coconut, kokum and arecanut trees are grown. The district
also has a long coastline and has considerable fishing activities of prawns, tuna
and other varieties of fish. Many types of fish are sent from this district to Mumbai
and Pune.
Rasayani is one of the main industrial centres developed with large-scale public
and private industries. In addition, as Raigad is a coastal district of Maharashtra,
there are many ports on the seashore of the district. Nhava-Sheva is the famous
Literacy rates
1991 2001
Persons Males Females Persons Males Females
64 76 52 77 86 68
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international port located near Uran. Elephanta, Alibag, Uran and Murud have
some of the best beaches on the western coast. Large number of sites on the
western region of the district has been identified by the MIDC for development of
tourism.
Economic Activities: The workers have been categorised into three types,
namely- main workers, marginal workers and non-workers depending upon the
number of days put in at work. According to 1991 Census, there are 39.46
percent main workers, 4.41 percent marginal workers and 56.13 percent non-
workers to total population. Among the tehsils, Sudhagad tops in work
participation rate (46.34 percent) with male 52.76 percent and female 39.71
percent. The lowest participation rate was in Murud Tehsil (32.76 percent). The
table below gives a comparative picture of main workers distributed in nine
industrial categories for the district.
Categories of workers Total
Population Male Female
1 Cultivators 322662 (44.81) 162191 (35.52) 160471 (60.90)
2 Agricultural Labourers 127102 (17.65) 62433 (13.67) 64669 (24.54)
3
Livestock, Forestry, Fishing,
Hunting and Plantations,
Orchards and allied activities
3 21238 (2.95) 18132 (3.97) 3106 (1.18)
4 Mining and Quarrying 2663 (0.37) 2163 (0.47) 500 (0.19)
5
i. Manufacturing,
Processing, Servicing,
Repairs in household
industry
ii. Manufacturing,
Processing, Servicing,
Repairs in other than
household industry
10973 (1.52)
82045 (11.39)
7616 (1.67)
76990 (16.86)
3357 (1.27)
5055 (1.92)
6 Construction 19950 (2.77) 17302 (3.79) 2648 (1.01)
7 Trade and Commerce 45597 (6.33) 36931 (8.09) 8666 (3.29)
8 Transport, Storage and
Communications 24205 (3.36) 23660 (5.18) 545 (0.21)
9 Other Services 63668 (8.85) 49197 (10.78) 14471 (5.49)
Total 72103 (100.00) 456615 (100) 263488 (100)
Table 15: Distribution of Workers in Nine Industrial Categories (% in brackets)
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It is observed that agricultural sector (I_II) absorbs a majority of working
population (62.46 percent) in the Raigad District. Manufacturing sector other than
household industry is the next important category engaging 11.39 percent of the
workers followed by service sector (8.85 percent). Trade and Commerce occupies
an important position engaging 6.33 percent of the workers. Sudhagad tehsil has
the largest working force in agriculture (84.90 percent) and Khalapur Tehsil has
the lowest (40.35 percent).
Agriculture: The agricultural situation of any given area is controlled by available
land, its quality, rainfall and artificial irrigation and human tendency along with
population pressure. In Konkan area the dearth of flat land, severe effect of
salinity, dearth of annual water supply have a great effect over agriculture and its
product though it is the main economy and majority of the people are engaged in
farming activities, besides fishing. For centuries monsoon was the only source
and season of farming and rest of the months land remain unoccupied. Gradually
the help by Govt., People’s awareness, participation of other financial institutions
help in changing the situation. The Census data tells us that in 1951 out of total
population 909,083 of the district 178,307 persons, i.e. 19.32% were the farmers
and it was 75.51% proportion with the total working persons. In 1981, the
percentage was 66.18% of the farming personnel. The reduction in the
percentage is due to two main reasons viz. i) the explosion of population and their
encroachment on agricultural land reducing the area and ii) Development of
Industry. However, at the same time it is observed that there is an increase in the
agricultural products as well as improvement in the economical situation of the
farmers. This has happened due to several reasons. The farmer of Konkan was
dependent solely on Rice Ragi Vari cultivation. Now few other products like
Mango, Cashew, Rubber plantations Spices and Condiments, Arecanut, support
the one season crop and so on. The details thereof are as under:
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Use of land Total area 6889 hectares
Area covered by forest 1487
Area not available for farming 1371
Area not cultivated (excluding follow land ) 1484
Follow Land 838
Net area 1659
Area sown more than once 145
Area under cultivation 1804
Cultivable Land 3642
Table 16 Land Utilisation
162
Crop Area
Rice 131633 hectares
Wheat 0
Jowar 0
Vari 5137
Nachani 10322
Total Cereals 15579
Gram 123
Tur 595
Mug 345
Udid 206
Kulith (Horse gram) 169
Mataki 240
Total pulses 6446
Total Food crops 153585
Sugarcane 18
Chillies 323
Turmeric 1
Arecanut 608
Condiments & Spices 60
Mango 1651
Cashew 474
Fruits & Vegetables 4904
Total Food Crops 159499
Groundnut 66
Sesame 275
Coconut 1111
Fodder crops 19474
Non Food crops Total 20927
Total cultivated area 180426
Area sown twice 14531
Table 17: Area under Major Crops
163
Yield per hectare (kg.) and Total production (‘00’ m. tonnes)
Product Yield Production
Rice 2568 3477
Groundnut 1000 3
Nachani 802 101
Sesame 400 2
Other cereals 625 30
Coconut 9944 (pieces) 179 (lakh)
Total cereals 2361 3608
Chillies 667 2
Gram 619 13
Tur 500 5
Udid 750 6
Mug 1000 1
Other pulses 410 39
Total pulses 474 64
Table 18: Yield per hectare (kg.) and Total production (‘00’ m. tonnes)
Surface irrigation 7480
Wells 2867
Net area under irrigation 10347
Total area under Irrigation 11581
Table 19: Area under irrigation (Hectares)
164
Irrigation wells 5266
Wells with Diesel pumps 595
Wells with Electric pumps 1572
Wells not in use 364
Other wells 7878
Bore wells 334
Bore wells with Electric pumps 11
Table 20: Number of wells and their type
Individual Holdings Nos.235132 Area 305476
Joint Holdings 2142240509
Institutional Holdings 6722162
Mouldings under irrigation 68803133
Table 21: Land Holdings (Hectares)
No. of ploughs wooden 99620
Iron 758
Carts 15097
Sugar crusher Power operated 0
Bull operated 0
Diesel pumps for irrigation (Agriculture ) 847
Electric pumps for irrigation (Agriculture ) 1475
Tractors 93
Table 22: Agricultural Implements
Markets: Pen, Nagothane, Revdanda, Roha, Goregaon, Mahad, Panvel, Uran,
Alibag, Karjat, Khopoli, Mangaon and Murud are the market places. There are 22
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more submarkets. Rice in raw and finished state, Nagli and Vari are the main
commodities. About 14% of the total rice production comes from Raigad District
and out of this 10% is exported to different parts of India through these markets.
Salt is another product for which Pen, Mora & Uran are the large centres and salt
is exported on large scale. Besides dry fish, Poha (made of rice), vegetables,
chemical fertilisers and number of other local products are exported to different
parts of India.
Dairy Industry: The details regarding animal husbandry and dairy development are as under:
Cattle
Bulls
Only for breeding 1725
For breeding & work 21402
Only for work 159881
Others 9754
Cows
Milk 75488
Not once calved 80717
Other 908
Young stock 127330
Bulls
Only for breeding 543
For breeding & work 6224
Only for work 30330
Other 1889
Buffaloes
Milk 42344
Not once calved 34021
Other 275
Young stock (total ) 58097
Sheep 887
Goats 152805
Horse/Ponies 1327
Other 2804
Poultry 1469289
Table 23: Animal Husbandry
166
Hospital 1
Dispensaries State 1
Primary Health Centres 58
Local 25
Research centre & Laboratory NIL
Mobile dispensary 1
Milk Coop. Societies 75
No. of members 8272
Share capital (Rs. in thousands ) 519
Reserved funds 9
Working capital 3804
Milk purchased lakhs 63.68
Milk sold lakhs 67.92
Table 24: Veterinary Institutes
Finance providers: District Central Cooperative Bank, Land Development Bank,
Urban Bank, Primary Agriculture Societies and Credit Societies, Non-agricultural
Cooperative Credit Societies, Nationalised and other Scheduled banks are the
main source of finance to agriculture, dairy industries and related services.
5.2.7 Economic and Industrial Development
Historically, Konkan is on the trade routes and that has helped to develop certain
industries. However, the nature of industries in each period is different. Today the
meaning of economic and industrial development is altogether different. The
Konkan area was and is backward industrially and hence economy was and is
poor. As far as the region of Raigad District is concerned the nearness of the
northern region to the cities like Mumbai and Thane on one side and Pune on the
other, the district is developed in all the aspects as compared to Southern region
of Konkan. The Belapur belt has large industrial area. The data of 1999 shows
that there is increase by 0.27% in the share capital, 78.69% increase in working
capital and 7.78% increase in the number of workers whereas the production is
increased by 46.35% as compared to previous years.
167
The data of industries by district administration shows 106 types of industries in
the district under which in the year 1999 there were 849 factories working and
29981 workers were working (28779) male and 1202 female ).
These are registered factories. At this stage, 137 factories were not functioning.
No of factories No of Workers
Less than 10 workers 201 1086
10 to 19 workers 136 1972
20 to 49 workers 174 5512
50 to 99 workers 93 6246
100 to 499 workers 92 18656
500 to 999 workers 10 7041
1000 to 4999 workers 5 7656
More than 5000 workers 1 5717
Total 712 53885
Table 25: Classification of factories and number of workers
168
Type of industry Capital Share Capital
Income Production
Food Products 43,608 41,485 33,193 515,176
Tobacco & Beverages 836,889 87,415 99,493 1,546,013
Non made Textile 19,010,200 8,120 82,090 1,426,370
Cotton Textile 107,620 54,002 6,573 108,042
Wood Product 5,184 4,669 1,894 18,999
Paper Product 20,600,880 88,046 49,729 574,779
Rubber, Plastic, Petroleum, Coal etc.
27,322,316 8,028,465 2,417,569 51,179,291
Non metallic mineral 3,780,455 612,985 256,929 2,278,651
Basic & alloyed mineral 9,346,338 4,749,445 485,492 14,631,046
Metal parts 211,180 189,034 44,007 799,685
Machinery & Implements 117,881 24,476 50,018 254,586
Electrical Machinery & Parts 3,789 10,081 7,589 132,064
Transport Products 7,983 39,544 11,484 138,760
Other Industries 5,788 175 5,445 29,459
Repairing 50,581 5,982 31,108 61,354
Cooking gas distribution 50,780 1,965 897 9,571
Ware houses 312,378 2,084 2,807 57,158
Other 12,551,571 6,305,037 1,393,360 33,158,773
Table 26: Operations of Industries
Industrialists using employment exchange 150
Newly Registered applicants 21943
No of applicants at the end of year1999 69237
Applicant Employed Private Sector 84
Public Sector 314
Applicant Employed Scheduled Caste & Tribes 77
Others 321
Technical workers Registered 1280
Employed 96
Transport & Communication Applicants 1444
Employed 13
Craftsmen, productions processors Applicants 871
Employed 25
Electrification of villages 1851
Electrification of Towns 19
Table 27: Employment Exchange
169
Domestic 179890
Commercial 34740
Industrial 242941
Streetlights 77000
Agriculture 1630
Other 38580
Table 28: Use of Electricity (‘000’ kilowatt hours)
Type Agricultural Non Agricultural
Rural Urban Rural Urban
Self operated 3578 229 17630 9224
Establishments 749 217 11383 7277
Cooperative 10 1 471 185
Public 8 1 5706 1493
Private 4309 444 23836 14823
Scheduled Caste % 2.98 0.67 4.23 3.66
Scheduled Tribe % 24.17 30.94 1.98 1.29
Total Workers 10508 1709 94443 69983
Table 29: Agricultural & Non-Agricultural Industries
No of Estates 5
Industrial area acquired (hectares ) 408.37
Industrial plots Developed 1875
Allotted 1432
Table 30: Industrial Area and Estate Development
Industrial Estate Founded in
Panvel Sahakari Industrial Estate 1963
Khopoli Coop. Industrial Estate 1964
Jawahar Coop. Industrial Estate Kamothc 1965
Roha Industrial Estate 1963
Taloja Industrial Estate 1968
Patalganga industrial Estate 1979
Mahad Industrial Estate 1980
Table 31: Industrial Estates
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Besides these, few more industrial estates are being developed and functioning
partially Patalganga (Extension), Pen Khopoli Road, Usar, Nagothane, Mangaon
(Bhagad), Shrivardhan. Industrial estates at Murud, Sudhagad and Mhasala are
proposed.
The district has traditional cottage industries
1) Salt - Pen, Panvel, Uran
2) Coal (wood)
3) Handloom
4) Wool weaving
5) Tannery
6) Carpentry
7) Sculpting especially Ganesh images
Labour Movement: The industrial development of this area is the result of post
independent efforts. The number of industries actually increased after 1980 or so.
In the beginning, there were not much problems with industries and workers. Due
to political movements and interference in the field of industry the last decade of
last millennium was the worst period for the industry of the district and number of
industries were shut down and shifted to other states, mainly to Gujarat areas.
There is no data available of this situation but large number of workers became
unemployed.
Industrial Training
There are 14 industrial training institutes, 3 engineering colleges and 3
polytechnics imparting technical knowledge.
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5.2.8 Infrastructure Facilities
Villages No. of Number (With Percentage) of villages having of the following amenities
Education Medical Drinking
water Post
Telegram Market/ Hall
Communication Approach
Road Pucca
Power Supply
1851 1682 210 1851 307 27 1337 952 1831
% (90.87) (11.35) (100) (16.59) (1.46) (72.23) (51.43) (98.92)
Table 32: Distribution of different amenities at the district
Educational Facilities: Out of 1851 villages, 1682 villages in Raigad District
have some or the other type of educational facility covering 96.40 percent rural
population. There are 1862 primary schools, and on an average, there is one
primary school in each village. 169 villages (10.05 percent) in the district have no
educational facilities at all.
Roha Tehsil is best equipped in education with 99.41 percent villages having
educational facilities. A large majority (about 90 percent) has a primary school
within a distance of 5 kilometres. There is only one medical college in the district
located at Alibag and one Engineering College at Pen. One Polytechnic institute
is located each at Panvel and Khopoli.
Medical Services: Medical facility of some or the other type is available in only
210 (11.35 percent) of the total 1851 inhabited villages. Overall, medical facilities
are scarce in most of the villages. The population benefiting from medical facility
ranges from 5.73 percent in Panvel Tehsil to 39.43 percent in Uran Tehsil. In
Khalapur tehsil, the proportion of population availing medical facilities is very low
(7.74 percent). A large number of villages 1641 (88.65 percent) in the district have
no medical facilities of any type. Among these, 69.59 percent have medical facility
available within 5 kilometres, 20.29 percent have such facility at a distance
between 5-10 kilometres whereas 10.12 percent residents have to travel more
than 10 kilometres.
Drinking Water: Drinking water facility is available in all the villages in each tehsil
of the district. However, there are inherent problems in factors such as sufficiency
of availability of water throughout the year and the portability of the available
water. A large majority of the villages i.e., 1564 get water through the wells, while
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587 villages get from the taps. 436 villages get by through hand pumps while 269
villages get water from the rivers and 82 are supplied water through canals.
Postal Services: Post and Telegraph facility is available to only 307 villages
(16.59 percent), out of a total 1851 inhabited villages, serving 31.63 percent of the
rural population of the district. Within the district, the proportion of villages having
post and telegraph facility varies from 3.45 percent in Karjat to 32.05 percent in
Shrivardhan tehsil. This facility is not available to a majority of 1544 villages in the
district. Villages having this facility within a distance of 5 kilometres are 1194
(77.33 percent), between 5-10 kilometres to 231 villages (14.96 percent) and at a
distance of more than 10 kilometres 119 villages (7.71percent).
Weekly Market: Weekly markets are held only in 27 villages (1.46 percent) out of
1851 inhabited villages benefiting 3.75 percent of rural population. Out of the 27
villages holding weekly markets, 17 are at a distance up to 15 kilometres from an
urban centre and 10 villages are at a distance at more than 15 kilometres.
Communication Services: The main communication facility to the rural
population is through bus routes. Over 17 percent of the total inhabited villages
benefit through bus service, whereas only 13 villages have rail facility and 8 have
navigable waterways facility. 1337 (72.72 percent) villages have some type of
communication facility available benefiting nearly 81 percent of the rural
population. Mahad tehsil has the highest proportion of villages enjoying
communication facility (92.90 percent), while Sudhagad tehsil is on the other end
with the lowest proportion of 41.05 percent villages having communication facility.
514 (27.77 percent) villages have no communication facility at all. They have to
avail these facilities from a distance of 5 to 10 kilometres or more than 10
kilometres.
Approach Roads: The length of roads in the district was 3877.82 kilometres in
1988-89. Out of this 4.20 kilometres are cement roads, 1739.96 kilometres tar
roads, 1297.06 kilometres water-bound macadam and 836.06 kilometres others.
The National Highway No.17 i.e. Mumbai – Konkan- Goa passes through Raigad.
Power Supply: In the district, 1831 (98.92 percent) villages have the facility of
power supply. In six out of fourteen tehsils, all the villages are electrified. There
are twenty villages, which do not have power supply of any type. Hindustan
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Organic Chemicals and Reliance Chemical Industries are the other private
Projects located at Rasayani and Patalganga. The most important small-scale
industry manufacturing Ganesh idols is located in Pen tehsil. There are many
other small-scale industries in the district at places such as Mahad, Alibag, Roha,
Pen, Pali, Panvel, Mangaon, etc.
Raigad District is a developing district in the state. The increase in factories in the
district is significant in as much as the number has swelled from 191 in 1982 to
302 in 1989 indicating a growth rate of 58.12%. Total number of employees
working in Central and State Government and local bodies is around 32,000
accounting for 1.47% of the total state employees.
Trade and Commerce: The chief commodities of export in the district are dry
fish, rice, barley food, salt, steel pipes and rods, chikki, timber wood, betel nuts,
poha and grinding wheels. Most of these are sent to Mumbai. Of the
manufacturing articles, grinding wheels manufactured at Uran and statues and
idols of Ganesh from Pen have a demand outside the country as well.
5.2.9 Administrative Setup
According to the 1991 Census, the district had 14 tehsils. There were 1908
villages and 14 towns. One new tehsil ‘Tala’ had been added recently making it
to15 tehsils.
For administrative purposes, the district is divided into 3 sub-divisions:
i. Alibi - Resident District Collector (RDC) Raigad is in charge of this sub-
division
ii. Panvel - Panvel, Uran, Karjat, Khalapur, Pen, Sudhagad
iii. Mahad - Mahad, Roha, Mangaon, Poladpur, Mhasala, Shrivardhan, Murud
and Tala
The District Collector along with the District Judge, Superintendent of Police,
Chief Executive Officer of Zilla Parishad and other senior officers of the State
Government look after the development and regulatory functions in the district.
District Rural Development Agency (DRDA) looks after the activities related to the
rural development.
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At the Tehsil level, the Tehsildar, Block Development Officer, Judicial Magistrate,
Deputy Engineer and other officers look after their respective department for
development and regulatory functions.
5.2.10 Panchayati Raj
With a view to promote development of democratic institutions and to secure
greater measures of participation by the people in Development Plans and in local
and government affairs by decentralisation of powers and functions, Zilla
Parishad and Panchayat Samitis (Community Development Block) have been
established in the districts of Maharashtra under the Zilla Parishad and Panchayat
Samitis Act of 1962.
The Zilla Parishad elects its President and Vice-President and Chairman of its
committees from amongst the elected councillors. The term of office of the
councillors is five years. The State Government as the Chief Executive Officer to
the Zilla Parishad deputes an officer, in the senior scale of IAS. Various
departments also assist the Parishad and the heads of those departments at the
district level are officers of Class I and Class II service under the State
Government.
At the taluka level, the Panchayat Samitis (C. D. Block) have an elected
chairperson and deputy chairperson. The Block Development Officer works as
Secretary to the Panchayat Samitis. Education officer looks after the educational
problems and needs of education in the tehsil. There is separate machinery
working for nutritional development of children under the Integrated Child
Development Scheme (ICDS).
5.2.11 Municipal Government
The Urban local bodies elect a councillor from each of the wards and the term of
the councillor is five years. The President of the Municipal Council or the Mayor of
the Corporation and also his deputy are elected from amongst elected councillors
and their term is for one year. Although the Chief Officer is responsible for day-to-
day functioning in a municipal council, she works under the administrative control
of the President of the council. In corporations, the state government deputes a
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senior IAS officer as Municipal Commissioner who is responsible for day-to-day
administration and the executive authority lies with him.
5.2.12 in summary
Raigad District is a rural-dominated district. The density of population according to
the 2001 census is 308 ranking eighth in the state. The sex ratio has sharply
decreased from 1991 to 2001, from a favourable sex ratio for women with 1010
per 1000 males in 1991 to 975 women per 1000 males in 2001. Though the
scheduled caste population is 2.97 percent, the scheduled tribe population is
12.82 percent, which shows a predominance of indigenous population in the area.
The literacy rate of the district is 77 percent. However, according to the census
data, certain amenities like drinking water and education is good, health facility is
very poor. In addition, the communication facilities in the tribal areas are scarce or
they are hardly found.
Khalapur Tehsil has shown the highest population growth rate of 47.21 percent,
while Poladpur has indicated lowest growth rate of 9.85 percent. There are 39.46
percent main workers, 4.14 percent marginal-workers and 56.13 percent non-
workers. Agricultural sector absorbs a majority of work force i.e. 62.46 percent.
The Zilla Parishad and Panchayat Samitis have been established to promote the
decentralisation of powers. In urban areas, there are municipalities.
Total literacy rate of the scheduled tribe population is 25.74 percent, which is far
below the general literacy rate of 77 percent of the district. The percentage of
male literate is 33.97 percent and female is 17.30 percent. The Raigad region has
been included in the Mumbai mega polis and has been witnessing an
unprecedented wave of industrialisation and commercialisation. According to the
Maharashtra Key Data of 1997-98, there are 229 mega projects under
implementation in Raigad District amounting to Rs. 19,605 crores. Such macro
developmental initiatives stand a chance of further marginalising the indigenous
population especially, the Katkaris, considering the poor indicators of their socio-
economic status.
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5.3 Activities Undertaken By the RDCCB in Raigad
District
5.3.1 Preamble
Banking as an activity and banks as the institutional device to conduct this activity
are the core components of any financial system. The ability of the banking
system to perform it tasks efficiently and in harmony with the societal needs and
economic goals depends largely on its efficient management, good employee and
customer relations. Sound management is the basic need to create confidence,
trust in customers, and accelerate the process of economic growth.
Agriculture constitutes the backbone of India’s economy.
Agricultural credit is one of the most crucial inputs in all agricultural development
programmes. Private moneylenders were the major providers of agricultural credit
in India for a long time. The available source of credit was inadequate, highly
expensive and exploitative. Since independence, a multi agency approach
consisting of cooperative credit institutions, the scheduled commercial banks and
the Regional Rural Banks, known as Gramin Bank, has been adopted to provide
adequate and timely credit to farmers at a reasonable rates of interest.
The DCC Banks, which form the middle-tier in the three-tier cooperative credit
structure, serve as connecting link between the State Cooperative Bank and the
Primary Agricultural Cooperative Societies (PACS). The main function of DCC
Banks is to lend money to their affiliated PACS. The RDCCB, established in 1961,
plays an important role in overall development of the Raigad District. The focus of
the present research is to analyse and evaluate the RDCCB and its management
in its role as a vehicle for development of the rural Raigad District.
The central issue that the thesis addresses is the role of cooperative credit
institutions in general, and those who manage cooperative credit institutions in
particular, as the agents of development of the weaker sections of the rural
society. This question has assumed pivotal importance as a large number of
studies carried out by the international agencies as well as the review committees
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appointed by the Government of India, have pointed out that the relatively better-
off sections of the rural community take advantage of the cooperative services
and facilities such as government supported credit and technical services
provided through cooperative credit institution. The poorer sections have been
either left out or excluded from the membership of such institutions. The benefits
of development, channelised through cooperative institutions, have not reached
the poorer sections as they are unable to fulfil conditions for availing credit
facilities such as collateral security. They were unable to repay previous loans
within time limit and their inability to complete paper work added to their
difficulties. As a result, they continue to rely on moneylenders who are more
flexible about repayment of the principal as long as they continue to receive high
interest. The rampant corruption and misuse of the position by the ‘big brothers’,
i.e. the office-bearers of the cooperative institutions is another reason for the
precarious condition of the cooperative credit institutions and for the benefits not
flowing to the rural poor. This reality was noted with deep regret by the All India
Credit Review Committee (1969) ‘‘the comparative neglect of the small cultivators
by the cooperatives.’’
The research project undertaken by the United Nations’ Research Institute for
Social Development (UNRISD) revealed that ‘‘Among the ideals associated with
cooperative movement has been elimination or reduction of the class distinction
… and to promote egalitarianism …(However) from the viewpoint of these
classical aims, little progress has been made … ’’
The question that the present research addresses is about the role that the
cooperative credit institutions in the rural area play in practice and whether they
can be expected to play the role as agents of social development and change in
rural environment in developing countries like India. If such cooperatives cannot
benefit the masses of the poor in the rural segment, then the policymakers in rural
development should consider more appropriate measures, such as establishing
direct contact with the target group.
The other related issue that the present research work addresses is the
challenges posed by the ushering in of the ‘New Economic Policy’ in 1990’s and
the forces unleashed by the Liberalisation, Privatisation and Globalisation,
popularly abbreviated as LPG. If the very rationale of the cooperative movement
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is questioned by its failure to realise the classical objectives, the LPG puts its very
existence into jeopardy. This is because the multi-national institutions have
already entered into the field of banking in the urban area. Their professional
approach and competitive strategy have enabled them to capture sizeable chunk
of business in the urban sector and that they are geared up to enter into the rural
sector. The issue that this development of the last decade poses is whether the
cooperative banking institutions in the rural areas are in a position to withstand
their challenge. This anxiety is because the cooperative banking institutions are
highly politicised, function in unprofessional manner and are financially nonviable.
The period from 1999 to 2005 was deliberately selected to ascertain the
capabilities and limitations of the RDCCB and its management when the forces of
the LPG are gaining ascendency.
The researcher is aware that his research work is only a micro-level study,
confined to one cooperative institution, but the operational principles and
procedure as well as the crisis areas of the cooperative financial institutions in the
rural sector are identical to a very large extent. The micro-level findings will
enable the researcher to arrive at broad generalisations, applicable to the macro-
level cooperative financial institutions in India.
As already stated, the present research work is an institutional study applying the
case study research method. It is an in-depth intensive study of a single but
sufficiently large cooperative financial institution. The various financial and
development-related activities undertaken by the RDCCB have been objectively
analysed, as the research work is not intended to be a report or profile or a history
or narration of the achievements of the RDCCB. It is intended to be a
performance analysis as well as an impact study. It reveals the limitations of the
RDCCB and points out the areas where there is scope for improvement in its
functioning.
5.3.2 Role of RDCCB in Rural Development
The very purpose behind the establishment of the District Central cooperative
Banks (DCCBs) was to facilitate the process of rural development. The principal
activity of the DCCBs was to make available credit for agriculture and allied
activities, and thereby facilitates the development of the rural segment. The
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RDCCB was established in 1961 to facilitate agriculture and allied activities in
Raigad District. However, with the rapid industrialisation of Raigad District, the
focus has shifted to non-agricultural activities. Still agricultural credit made
available by the RDCCB facilitates the rural development in Raigad District.
A brief review of these activities is as under:
Development of Agricultural Sector: We have noted elsewhere in the
document the quantum of agricultural credit made available by the RDCCB. We
have also observed the quantum of credit made available by the RDCCB to the
activities allied to agriculture. In addition to these, the RDCCB implements a
number of governmental schemes and programmes meant for the development of
agriculture. A brief review of these activities is as under:
(i) Integrated Crop Production Programmes (ICPP): Paddy is the principal crop
in the Raigad District. Paddy cultivation is undertaken in 149,570 hectares of land,
accounting for 43.3% of the gross cultivable land in the Raigad District. The
RDCCB encourages the agriculturists to bring under Paddy cultivation maximum
cultivable land by launching Integrated Crop Production Programme (ICPP). The
RDCCB extends cooperation to the agriculture department of the Raigad Zilla
Parishad in implementing the ICPP of the Government of India. The RDCCB
provides full and partial subsidy to the agriculturists.
(ii) Integrated Rice Production Programme (IRPP): This scheme is
implemented in all blocks within the district. Under this scheme, help is given for
the purchase of HYV seeds, farm implements, fertilisers and pesticides for Paddy
cultivation.
(iii) Horticulture Development: Approximately 10,717 hectares of land are under
cultivation for the horticultural crops. Mango, watermelon and coconut plantations
form the bulk of horticulture crops. These are fully subsidised under the
Employment Guarantee Scheme of the government of Maharashtra. Other
government agencies and departments also provide assistance. The Department
of Horticulture Training Soil Conservation perform an important role in imparting
knowledge to the formers. Apart from this, the Horticulture Department of the
Raigad Zilla Parishad in collaboration with the RDCCB organises 5 days training
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programmes for farmers at Dapali. Other centrally sponsored programmes are
also implemented by the RDCCB.
(iv) Personal visits by the Bank Officials and Training Activities: With a view
to improving the conditions of agriculture and to transfer the latest technology
developed by the Konkan Agriculture University to the farmers, the officials of the
RDCCB have undertaken extension and training activities since 1982. The
activities include extension work, personal contacts, farmer’s training and field
demonstrations.
(v) Soil Conservation: The soil conservation activity is undertaken by the
RDCCB in cooperation with the Command Area Watershed Department
Programme (CAWDEP). The development activities include Nala Building,
Terracing; (on farm dry land development) under Jawahar Rojgar Yojana.
(vi) Sprinkler Set Scheme: Sprinkler sets are installed for vegetables and
horticultural crops in the district for which the State Government provides 50%
subsidy maximum up to Rs. 12,000 / per hectare. Only those farmers who have
less than 2 hectares are eligible to receive the subsidy.
(vii) Short and Medium Term Credit: The RDCCB also provides short term and
medium term loan at an interest rate of 7.5% per annum to facilitate agricultural
development. The short-term agricultural credit is provided in the Kharif and Rabi
cropping seasons to the members through their primary societies. In addition, the
Bank made available ‘Kisan Credit Cards’ to 2107 individuals-farmers and made
available credit of Rs. 169.58 lakhs in the year 2004-05.
Development of Non-agricultural Activities: The RDCCB was established
primarily to serve the requirements of the agricultural credit. However, the area of
operation of the RDCCB comprises the rural as well as urban segment. The
process of industrialisation has gathered momentum in Raigad District in the last
25 years since 1988. As a result, Raigad District has substantial activities in
manufacturing and service sectors. The RDCCB provides short term and medium
term loans to the non-agricultural cooperative societies. Owing to the rapid
industrialisation, there is ample scope for self-employment. During the year 2004-
05, the bank made available credit of Rs. 14.20 lakhs to 33 individuals. The
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RDCCB also started to provide credit for ‘Fish-Farming’ from the year 2005-06 to
promote self-employment.
Implementation of Rural Development Schemes/Projects: The RDCCB
performs the ‘agency function’ i.e. implements the schemes of the Government of
India and the Government of Maharashtra for the development of rural segment
by means of poverty eradication and employment generation programmes. The
most ambitious programme of the Government of India in this regard was the
Integrated Rural Development Programme (IRDP). The Swarnajayanti Gram
Swarojgar Yojana replaced the IRDP in 1999. The RDCCB was also involved in
the implementation of the Tribal Development Sub Plan (TDSP) in the
predominantly taluka areas in the Raigad District.
Under the IRDP, the RDCCB provided financial assistance in the form of ‘self
credit’ to the persons living below the poverty line. It provided assistance for the
following items:
(1) Bullock Pari/Bullock Carts
(2) Goats/Sheep
(3) Milch animals (Cow/Buffalos)
(4) Minor irrigation works
(5) Land improvement activities
(6) Well-repairs
(7) Wire-fencing
(8) Poultry
(9) Tractors
Similarly, under the TDSP, the RDCCB provided loans for the following items
(1) Bullock Pair/Bullock Carts
(2) Milch animals (Cow/Buffalos)
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(3) Minor irrigation works
In the post-1999 period, the RDCCB took up the responsibility of implementing a
number of development programmes. Swarnajayanti Gram Swayamrojgar Yojana
(SGSY) - The Government of India had discontinued the IRDD, TRYSEM,
SITARA, GKY and MWS on 1-4-1999 and, in their place, launched the SGSY.
The SGSY is operative in the rural areas of the country and covers all aspects of
self-employment such as organisation of the poor into SHG, training, credit,
technology, and infrastructure and marketing. The scheme is implemented by
commercial banks, regional rural banks, cooperative banks and other financial
institutions as well as Panchayat Raj institutions, DRDA, NGOs, etc. Technical
Institutions are a part of planning, implementation and monitoring of the schemes.
SGSY aims at establishing large number of micro enterprises in the rural areas by
the BPL families. The Objective of the Scheme is to bring every assisted family
above the BPL within three years by providing them income-generating assets
through credit and subsidy, coupled with training and technology. The assisted
family is known as Swayamrojgari and can be either individual or a group to be
selected by a team of BDO, Banker and Sarpanch. There is a minimum target of
50% SC/ST, 40% of women, and 5% disabled. The overall target is to bring 30%
BPL families to APL in 5 year. Its main components are as follows:
(1) Skill up Gradation: Once the person or group of persons (Swayamrojgaries)
has been identified, their training needs are ascertained with reference to MSR
(minimum skill requirement). The line departments assess the technical skill
requirements and the banker assesses managerial skills. This training
programme includes bookkeeping, knowledge of market, identification and
appraisal, product costing and pricing. The expenditure incurred on training is
borne by the DARA for a week’s duration. For Swayamrojgaries needing more
training than MSR, appropriate training is arranged by DRDA and the cost for that
is borne by Swayamrojgaries, and that the same may form an element of project
costing. The bank provides loans to the Swayamrojgaries for this purpose.
(2) Activity Clusters: Key – activities – Major share of assistance, 75%, is for
key activities and is taken up in the clusters. 4 to 5 key activities are to be
identified for each block duly approved by Panchayat Samiti and District SGSY
183
Committee. The selection of activities should be such that it would create
additional asset and skill to the Swayamrojgaries so as to enable him to net an
income of Rs. 2000/- p.m. in the third year of assistance.
(3) Self Help Groups: The scheme provides that 75% funding should be to
SHGs. The group (SHG) may consist of 10 to 20 persons of BPL families.
However, for minor irrigation and of disabled persons, this number may be a
minimum of 5 members.
A person cannot be a member of more than one group and the group shall not
comprise more than one member from each family. The assistance may be
extended to individuals in a group or to all members of the group for taking up
income generation activities.
(4) Revolving Fund: Every SHG that is in existence at least for a period of 6
months and which has demonstrated the potential of viable group receives a
revolving fund of Rs. 25,000/- from the Banks as cash credit facility, Of this sum,
Rs. 10,000/- is reimbursed by the DRDA to the Bank. The revolving fund imparts
credit discipline and financial management skills to the members so that they
become creditworthy. The SHG’s that have demonstrated their successful
existence receive the assistance from the Bank for economic activities.
(5) Security norms : For individual loans unto Rs. 50,000/- and group loans up to
Rs. 3.00 lakhs, the assets created out of the bank loan can be hypothecated to
the Bank as primary security. In case where immovable assets are not created,
mortgage of land may be obtained. Where mortgage of land is not possible, third
party guarantee may be obtained at the discretion for bank. For loans exceeding
the above norms, in addition to the primary security, suitable margin money /
other collateral security may be obtained.
(6) Subsidy: Subsidy under SGSY is at the uniform rate of 30% of project cost,
subject to maximum Rs. 7,500/-. For SC/ST Swayamrojgaries it is 50% of the
project cost subject to maximum Rs. 10,000/-. For groups of Swayamrojgaries
(SHG) the subsidy is 50% of cost subject to a ceiling of Rs. 1.25 lakhs.
(7) Follow up: The follow-up measures are as follows (i) Bank issues loan pass
books to all Swayamrojgaries. Branches of the bank observe one day in a week
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as non-business working day to enable the staff to go to the fields. The Bank
ensures that quality assets have been procured through proper monitoring and
verification. Necessary documents of acquisition of assets are being kept on
record. In case of non-procurement of assets, the bank may cancel the loan and
recover the money.
(8) Risk fund: The scheme provides for creation of the fund at the district level.
Loan sanctioned for consumption needs up to Rs. 2000/- per Swayamrojgari is
financed. Out of the risk-fund, DRDA provides assistance to the extent of Rs.
10,000/- of the total consumption loan disbursed by the Banks to the Swarojgaries
during the year.
(9) Repayment of loan: The instalment of repayment of loan is of minimum of 5
years. There is moratorium period depending upon the project requirement.
Number of instalments will depend upon the repaying capacity (50% of the
incremental income) interest liability and repayment period. Swayamrojgari will
not be entitled for subsidy if the loan is repaid before the lock-in-period. It will be
three, four and five years for loan period of five, seven and nine years
respectively.
(10) Recovery: Bank takes all possible measures to ensure recovery. In case
even after taking all the measures like personal contact, sending of notices,
recovery camps, legal actions etc. if it fails to recover the entire dues then the
procedure for forfeiture of the subsidy can be initiated by the bank. 340
The RDCCB engages the services of individuals other than the government
servants as monitor-cum-recovery facilitators on commission basis. Processing-
cum-monitoring fees of 0.5% are charged to the Swayamrojgaries to meet this
expenditure.
(11) Role of Banks and State Agencies: The RDCCB is involved in
implementing planning and preparation of projects, identification of key activities,
clusters, SHGs, individual swayamrojgaries, infrastructure planning as well as
capacity building of swayamrojgaries. After the sanction of loan, a line department
ensures technical guidance to the Swayamrojgaries apart from the follow-up for
starting the activities and prompt repayment of bank loan instalments.
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(12) Back end Subsidy: From 1996-97 as per the recommendation of Expert
Committee on IRDP, back end subsidy has been introduced. The full project cost,
including subsidy, is sanctioned and disbursed to borrower as a loan by the
Banks. This system applies to SGSY as well. The Subsidy admissible to the
borrower under SGSY is kept in a separate account titled ‘Subsidy Reserve
Account’. No interest is paid on Subsidy Reserve Account.
Financial Assistance to Self Help Groups (SHGs): Despite massive branch
expansion of Commercial Banks, RRBs and Cooperative Banks in rural areas,
hardly 30% of rural populace is covered by these credit institutions. The
assistance is, in fact, restricted to the cultivator households. SHG is an emerging
area giving access to the rural poor who have not been benefited by various
governments supported Poverty Alleviation Programmes. Hence, SHGs
commence their activities as a ‘Thrift Group’ by mobilising deposits among the
members for their consumption purposes like food, health, education of children,
social functions etc. The members of the Group consist of marginal farmers, petty
rural artisans, agricultural labourers etc., mostly belonging to socially and
economically backward strata of village population.
Such groups emerge out of their genuine need and works on the principle of
helping each other.
While financing SHGs the Bank ensures the following aspects:
1. The groups formed are of the rural poor, i.e., marginal farmers, landless
labourers and preferably of women households.
2. The SHG members have homogeneous background and interest.
3. The group size is not more than 20.
4. The group has been in active existence for at least six months before
financing.
5. The savings per member are less than Rs. 5.00 and the group has been
maintaining proper records and books of accounts.
6. The group has have opened savings bank account with any of the branches of
the RDCCB in the name of SHG signed by all the members, with proper
instructions about operation of the account.
7. The members of SHG are not wilful default of any financial institution.
186
8. The group has had its own byelaws.
9. While forming the SHGs care is taken to select the group leader after the
group is formed. The leader is from the same village to have local affinity. The
group leader served as a link between the bank and the SHG.
10. The rate of Interest to be charged to the members for availing loans from the
SHG is less than 12% p.a.
11. Care is taken to ensure that the members do not borrow from outside sources
to meet the contribution to group fund or repayment of loan availed from the
group.
By 31st March 2005, the RDCCB had formed 550 women SHGs from the weaker
sections. The total number of the members of the SHGs was 8,990.
The RDCCB made available loans to the extent of Rs. 27.37 lakhs to 81 SHGs in
the year 2004-05.
Prime Minister’s Rojgar Yojana
The RDCCB implements Prime Minister’s Rojgar Yojana in its amended form
since its inception on 1 April 1999.
The details are as under:
1. Age: Applicant’s age should be between 18 and 35 years. However,
relaxation up to the age of 45 years is given to SC/ST, Women, Ex-
servicemen, and disabled applicants.
2. Educational Qualification: Minimum 8th standard passed. Priority will be
given to those who have completed training minimum for 6 months in Govt. /
Govt. recognised Institutions like ITI. Etc.
3. Family Income: The Annual Income of the applicant’s family as well as that
of the parents’ family income should be less than Rs. 40,000/-. The family
consists of applicant’s spouse and dependent children.
4. Defaulter: The applicant should not be a defaulter of any financial
institutions.
5. Residence: He must have resided continuously in the district for 3 years.
6. Project cost: For business activity Rs. 1.00 lakhs. Other than business, Rs.
2.00 lakhs.
187
7. Loan, Margin and Subsidy: Subsidy will be 15% of the project cost,
maximum up to Rs. 7500/- per individual applicant. Margin will be ranging
from 5% to 12.5% calculated in such a manner that margin and subsidy put
together should be equal to 20% of the project cost. The subsidy will be back-
ended.
8. Activities: Any economically viable and bankable activity excluding direct
crop raising, etc., can be financed.
9. Security: No collateral security should be insisted for loans up to project cost
of Rs. 1.00 lakhs. However, collateral security can be obtained for loans of
project cost exceeding Rs. 1.00 lakhs.
10. Training: All applicants must be given training before disbursement of loans.
11. Repayment: The loans can be repaid in suitable instalments ranging from 3
to 7 years, leaving moratorium period.
12. Interest: As per existing norms.
13. Refinance: Refinance is available from SIDBI/NABARD.
The branches are authorised by the RDCCB to identify applicants.
Seed Money Assistance to the Educated Unemployed
Its norms are as follows:
A) Eligibility:
1) Age between 18 and 50 years.
2) Educational qualifications minimum 7th std. passed.
3) He should be unemployed.
4) He should have his residence in the State for last 15 years.
B) Financial Assistance:
1) ‘‘Financing institution’’ sanctions 75% of the cost of the project as capital loan.
2) Seed money assistance, with interest @ 10%p.a. is given.
188
C) Procedure:
1) Application to be made to the DIC.
2) The DIC sponsors the applicant with recommendations to the bank. The Seed
money is to be repaid by the borrower within 7 years. Three years gestation
period is allowed. The accrued interest for 3 years to be repaid at the end of 3rd
year. The Principal amount along with the interest applied after 3 years is to be
recovered in remaining 4 years by annual instalments. In case of default, interest
at the rate of 24% shall be charged.
DIC Loan Schemes: The SSI and Service Sector projects having an outlay of up
to Rs. 2.00 lakhs are eligible under this scheme. For such projects, 20% or Rs.
40,000 whichever is less, are provided by the DIC in the form of seed money with
4% interest. Candidates from SC/ST categories are eligible for 30% or Rs.
(50,000 seed money, whichever is less. Promoter is required to contribute 5% of
the Project cost. Remaining amount is to be financed by the Banks.
National Equity Fund: This particular scheme has been introduced by the SIDBI
for the benefit of entrepreneurs to establish and/or rehabilitate Small Scale
Industries, Tiny Industries, in all towns except Mumbai, Chennai, Calcutta and
Delhi, all activities covered under industries and service sector, except transport
operators, are eligible.
The project cost including margin money for working capital should not exceed
Rs. 10.00 lakhs. Equity Fund money is available from the Government of India,
through the SIDBI@ 25% of the project cost subject to the maximum of Rs.
2,50,000/- as a loan. The RDCCB charges 1% as service charge. Funds are also
available for revival of the sick SSI units under this scheme.
Swarnajayanti Shahari Rojgar Yojana (SJSRY): Ministry of Urban Affairs and
Employment, Government of India has launched a new poverty alleviation
programme named the SJSRY, which came into operation from 1st December
1997 in all urban towns in India.
The SJSRY seeks to provide gainful employment to the urban poor whose annual
family income is up to Rs.11, 850, unemployed or underemployed, through setting
189
up of self-employment ventures. The eligible beneficiaries must be resident of the
district for the last three years and should not be defaulters. The eligible project
amount is maximum Rs. 50,000/- with 5% beneficiary margin. It provides 15% of
the project cost as subsidy, subject to maximum of Rs. 7500/-.
5.3.3 The RDCCB – General Performance
The historical background of the RDCCB has been elaborated in earlier. The
RDCCB is a financial institution operating at the micro level, i.e. at the district and
below district levels. The RDCCB, as a financial institution, provides credit
facilities for productive activities and thereby facilitates increase in the income
level of its clientele. The agricultural credit, disbursed by the cooperative financial
institutions for procurement of inputs, land development and development of
micro-level irrigation facilities, led to the ‘Green Revolution’ in 1960s. The
cooperative financial institutions like the RDCCB have encouraged the
agriculturists to adopt new production techniques by providing credit at a
concessional rate and giving financial support and incentives. They also
undertake surveys and extension work to draw their credit plans. In order to make
the activities undertaken by the cooperative financial institutions like the RDCCB
more meaningful, there is a need to coordinate the efforts of the different
agencies providing agricultural credit and the development agencies of the
government, which provide subsidies and incentives. The nationalised banks
evolve and implement the ‘Area Survey Plan’ wherein they are designated as the
lead banks. Linkages and coordination between the nationalised banks, the Land
Development Banks, the Gramin Bank and the DCCBs, can undertake this
activity meaningfully. The RDCCB and its likes in other districts have a crucial role
to play in the economic development of districts. Despite the relatively high
degree of urbanisation, majority of population in the Raigad District lives in the
rural areas. Therefore, the RDCCB has a vital role to play in agricultural
development by providing short and medium term credit. Raigad District has a
sizeable tribal population; therefore, the RDCCB participates in the
implementation of the Tribal Development Sub-Plan (TDSP), and the rural poverty
alleviation schemes of the Government of India. It is also significant to note that
some of the talukas, in proximity with Mumbai, have substantial manufacturing
and service activities, such as cooperative housing etc. Unlike most other
190
DCCBs, the RDCCB makes available substantial credit for the non-agricultural
activities as well.
5.3.3.1 Banking Activities
The RDCCB is primarily a financial institution and undertakes activities related to
banking. As the intermediate financial institution in the three-tier structure of
cooperative credit, the RDCCB undertakes the following activities:
a. Provide finance to the affiliated PACS in their areas of operation
b. Act as a balancing centre for the resources of the PACS in the pyramidal
structure of cooperative credit. Its own resources are intended to serve as
a cushion to absorb the impact of defaults and arrears arising at the
primary level
c. Supervise the working and management of the affiliated PACS and to train
their members in the principles of cooperation
d. Provide a safe place for investing the reserves of the PACS
e. Help the development of the cooperative movement on sound lines by all
possible measures in their areas of operation.
In addition to these activities, the RDCCB also undertakes other banking
activities, similar to those performed by the commercial banks, like accepting
deposits, collecting bills, issuing drafts, safe custody of valuables, advancing
loans, etc.
The analysis of RDCCB performance uses a number of charts wherein the
researcher has used trendline equation and R2. R2 is a statistic that gives some
information about the goodness of fit of a model. In regression, the R2 coefficient
of determination is a statistical measure of how well the regression line
approximates the real data points. An R2 of ‘1' indicates that the regression line
perfectly fits the data.
5.3.3.2 Resources of the Bank
There are internal as well as external sources of resources that can be mobilised
or tapped by the cooperative financial institutions like the RDCCB. The internal
sources include the share capital, the entrance fee, the reserve funds and the
191
deposits received from the members. The external sources include the deposits
received from the non-members, loans received from financial institutions, loans
given by the state government and the financial assistance provided by the
government in the times of crisis.
Share Capital: A detailed analysis of the share capital raised by the RDCCB,
since its inception in 1961 to 2009-10, has already been made earlier in this
thesis. For the present analysis, the vital details in brief are in the Table below.
(1) Authorised Capital (i) Class ‘A’ state Government/State Cooperative Bank 5,000 shares of Rs. 1,000 each
Rs. 0.50 Crore
(ii) Class ‘B’ Cooperative societies in the jurisdiction of the RDCCB 289000 shares of Rs. 500 each
Rs. 14.49 Crores
(iii) Class ‘C’ individual members, residing in the district 2000 share of Rs. 50 each
Rs. 0.01 Crores
Total authorised capital Rs. 15.00 Crores
(2) Subscribed capital
(i) Class ‘B’ 8.83,860* 1582093 shares of Rs.50 each 82037 shares of Rs.500 each
Rs.12.01 Crores
(ii) Class ‘C’ 1,999 shares of Rs. 50 each Rs. 99,950
Total subscribed capital Rs. 120,223,123
Total subscribed capital/ Authorised capital 81.49%
Table 33: Authorised and Subscribed Share Capital (As on 31-03-2010)
[*One nominal member having paid entrance fee of Rs. 50/-] Source: RDCCB
Annual Report for the year 2009-10
The above table indicates that the RDCCB had subscribed capital to the extent of
81.49% of the authorised capital. The RDCCB was in a position to return Rs.
25.50 lakhs to the State Government, which was invested towards the share
capital. The RDCCB will be in a position to approach the Reserve Bank of India to
increase the limit of the authorised capital and increase the subscribed capital by
Rs 9.5 crores. This ability reflects financial viability of the RDCCB.
192
Mobilisation of Deposits: One of the principal activities of a financial institution
is to mobilise deposits from its shareholders and customers to fuel its banking
activities. Deposits are the main external source of a financial institution. The
growth in deposits reflects the ability of the bank to mobilise the local resources
and the degree of the confidence of the local community that it commands. It also
reflects its credibility and the potential for growth. The financial institutions, in the
present competitive age, enter into a cutthroat competition by offering excellent
customer services and attractive novel schemes. Thus, the increase in the
deposits and the efforts made by the financial institutional is a vital banking
activity.
The RDCCB made a very modest beginning and made very rapid progress in
mobilising deposits, especially during the period under analysis.
The RDCCB provides the following deposit schemes:
1. Saving Deposits
2. Current Deposits
3. Fixed Deposits
4. Cumulative Deposits
5. Recurring Deposits
6. Pigmy Deposits
7. Home Saving Deposits
8. Mrit Kumbh Deposits
9. Kalpvriksha Deposits
The bank pays extra interest on the deposits of the senior citizens. The bank has
been registered by the ‘Deposit Insurance Act’. With this, the depositors are
insured. The protection to all types of deposits is given by the bank up to
maximum of Rs. 100,000/- to each individual depositor.
A detailed statistical analysis of the deposits mobilised by the bank in the period
under analysis is given in Tables 24 to 31.
193
Type Coop.
Society INDs LSGs(ZP_PSs) NRI/NRO Total
FD 12629.27 2727.94 1373.07 12.79
FRF 352.29
Savings 1799.44 13972.34 348.03 9.33
RFS 2117.88
Recurring 3.80 361.73
Reinvested 15599.07
Current 1301.15 1698.03 6014.34
STD 412.45
HSD 30.08
AKD 91.19
KVD 40.76
Total 18203.86 34933.62 7735.45 22.18 60895.12
Less 2004-2005
16581.43 33155.59 6973.19 31.81 56742.04
Addition in 2005-06
1622.43 1778.03 762.26 -9.63 4153.08
Table 34: Mobilisation Of Deposits: 2005–2006 (Amount in Lakhs)
(Source: Annual Report 2005-2006)
Chart 1: RDCCB Sources of Mobilisation of deposits 2005-06 (amount in lakhs)
1622.43
1778.03
762.26
-9.63
-200
800
1800
Coop. Society INDs LSGs(ZP_PSs) NRI/NRO
RDCCB Sources of Mobilisation of deposits 2005-06
194
Type Coop.
Society INDs LSGs(ZP_PSs) NRI/NRO Total
FD 12289.89 3031.75 1229.01 13.03
FRF 371.05
Savings 2298.78 18001.27 271.96 10.2
0.05
RFS 2396.78
Recurring 4.14 341.32
Reinvested 15582.39
Current 1360.93 2751.31 7603.87
STD 465.16
HSD 28.07
AKD 101.71
KVD 14.14
Total 18721.57 40317.12 9104.84 23.28 68166.81
Less 2005 - 06 18203.86 34933.62 7735.45 22.18 60895.11
Addition in 2006 - 07 517.74 5383.54 1369.4 1.1 7271.78
Table 35: Mobilisation of Deposits: 2006–2007 (Amount in Lakhs)
Source: RDCCB Annual Report 2006-2007
Chart 2: Mobilisation of Deposits: 2006–2007 (amount in lakhs)
517.74
5383.54
1369.4
1.1 0
2750
5500
Coop. Society INDs LSGs(ZP_PSs) NRI/NRO
RDCCB Sources of Mobilisation of deposits 2006-07
195
Type Coop.
Society INDs LSGs(ZP_PSs) NRI/NRO Total
FD 19251.79 4541.08 1476.81 10.62
FRF 407.68
Savings 2545.56 25426.07 834.66 11.54
0.05
RFS 2790.75
Recurring 1.45 371.38
Reinvested 30105.84
Current 1305.06 2713.08 2928.8
STD 562.6
HSD 30.12
AKD 114.59
KVD 3.79
Total 26302.29 63868.55 5240.27 22.21 95433.32
Less 2006-07 18721.57 40317.12 9104.84 23.28 68166.81
Addition in 2007-08
7580.72 23551.43 -3864.57 -1.07 27266.51
Table 36: Mobilisation of Deposits: 2007–2008 (Amount in Lakhs)
Source: RDCCB Annual Report 2007-2008
Chart 3: RDCCB Mobilisation of Deposits 2007-08 (in Lakhs)
7580.72
23551.43
-3864.57 -1.07
-5000
10000
25000
Coop. Society INDs LSGs(ZP_PSs) NRI/NRO
RDCCB Sources of Mobilisation of Deposits 2007-08
196
Type Coop.
Society INDs LSGs(ZP_PSs) NRI/NRO Total
FD 18263.85 6014.9 1598.57
FRF 495.84
Savings 3709.36 27194.86 1231.83 10.24
RFS 2829.24
Recurring 1.73 442.42
Reinvested 24196.76 11.33
Current 1597.93 2114.52 10539.75
STD 700.54
HSD 32.14
AKD 131.22
KVD 0.09
MBNC 1663.17
Total 26897.95 62490.62 13370.15 21.57 102780.29
Less 2007-08 26302.29 63868.55 5240.27 22.21 95433.32
Addition in 2008-09 595.66 -1377.93 8129.88 -0.64 7346.97
Table 37: Mobilisation of Deposits: 2008–2009 (Amount in Lakhs)
Source: RDCCB Annual Report 2008-2009
Chart 4: RDCCB sources of mobilisation of deposits 2008-09 (in lakhs)
595.66 -1377.93
8129.88
-0.64
-2000
4000
10000
Coop. Society INDs LSGs(ZP_PSs) NRI/NRO
RDCCB sources of mobilisation of deposits 2008-09
197
Type Coop.
Society INDs LSGs(ZP_PSs) NRI/NRO Total
FD 24331.36 5985.25 3399.14
FRF 588.78
Savings 3956.92 32392.69 9357.01 10.6
RFS 3218.27
Recurring 0.01 462.62
Reinvested 25272.55 70.41
Current 1458.79 1416.63 6081.4
STD 799.59
HSD 46.77
AKD 140.76
KVD 0.99
MBNC 2619.4
Total 33554.13 69137.25 18837.55 81.01 121609.94
Less 2008-09 26899.95 62359.46 13370.15 21.57 102651.03
Addition in 2009-10 6654.18 6777.79 5467.4 59.44 18958.91
Table 38: Mobilisation of Deposits 2009-2010 (Amount in Lakhs)
Chart 5: RDCCB sources of mobilisation of deposits 2009-10 (in lakhs)
Source: RDCCB Annual Report 2009-2010
6654.18 6777.79
5467.4
59.44 0
3500
7000
Coop. Society INDs LSGs(ZP_PSs) NRI/NRO
RDCCB sources of mobilisation of deposits 2009-10
198
Years Cooperative
Society INDs LSGs(ZP_PSs) NRI/NRO Total
1999-00 1732.32 3326.18 977.78 5.4 6041.68
2000-01 4953.24 40007.74 -2183.33 16.72 42794.37
2001-02 979.52 2711.52 1014.4 40.12 4745.56
2002-03 1715.31 2888.14 1318.61 30.33 5952.39
2003-04 -436.763 2654.35 2247.75 -31.05 4434.287
2004-05 958.25 2291.04 -209.51 -13.03 3026.75
2005-06 1622.43 17778.03 762.26 9.63 20172.35
2006-07 517.74 5383.54 1369.4 1.1 7271.78
2007-08 7580.72 13551.43 -3864.57 -1.06 17266.52
2008-09 597.63 690.87 8130.87 -0.65 9418.72
2009-10 6654.18 6776.89 5457.4 59.46 18947.93
Total 26874.577 98059.73 15021.06 116.97 140072.337
Table 39: Progress in Mobilisation Deposits 1999-2000– 2009-2010 (Amount in
Lakhs)
Source: RDCCB Annual Reports from 1999-00 to 2009-10
Chart 6: RDCCB Progress in Mobilisation Deposits 1999-2000– 2009-2010 (in Lakhs)
-5000
7500
20000
RDCCB Progress in Mobilisation Deposits 1999-2000– 2009-2010
CooperativeSocietyINDs
LSGs(ZP_PSs)NRI/NRO
199
Year Aggregate amount of deposits
1962 46.01
1972 250.2
1982 1368.14
1992 7028.6
2002 43328.39
2003 49289.08
2004 53715.38
2005 56742.05
2006 60895.12
2007 68266.91
2008 85433.43
2009 102651.03
2010 121599.04
Table 40: Progress in Mobilisation Deposits 1962-2010 (₹ Lakhs)
Source: Annual Reports of the RDCCB
Chart 7: RDCCB Progress in Mobilisation Deposits 1962-2010 (in lakhs)
We can draw the following inferences from the above statistical tables and charts:
1. During the first decade i.e. from 1961-62 to 1971-72, the deposits of the
RDCCB increased from Rs. 46.01 lakhs to Rs. 250.20 lakhs.
2. During the second decade, i.e. from 1972-73 to 1981-82, the deposits
increased from Rs. 250.20 lakhs to 1368.14 lakhs.
46.01
121599.04
y = 9911.5x - 19333 R² = 0.9463
0
70000
140000
RDCCB Progress in Mobilisation Deposits 1962-2010
200
3. During the third decade, i.e. from 1982-83 to 1991-92, the deposits increased
from Rs. 1368.14 lakhs to Rs. 7028.60 lakhs.
4. During the fourth decade, i.e. from 1992-93 to 2001-02, the deposits increased
from Rs. 7028.60 lakhs to 43,328.39 lakhs.
5. The deposits at the end of period under analysis, i.e., in 2004-05 to 2009-2010
the deposits increased from Rs. 56742.05 lakhs to Rs.113124.47had crossed
50 crore mark and was Rs. 56742.05 lakhs.
6. During the period under analysis, the Bank had mobilised Rs. 9901.88 lakhs
from the cooperative sector, Rs. 17878.97 from the private sector, Rs.
3166.70 from the public sector and 37.73 lakhs from the NRIs/NROs.
7. The aggregate amount of deposits mobilised during the period under analysis
was Rs. 30,991.69. In other words, the deposits mobilised during the period
under analysis; from 1999-2000 to 2004-05 was about 60% of the deposits
mobilised since 1962.
8. The period from 1962 to 1972 was a period of steady growth, the period from
1972 to 1982 as steady growth at a faster pace, the period from 1982 to 1992
as rapid growth and the period since 1992 as one of phenomenal growth. This
last rate of growth has greater significance in view of the fact that the New
Economic Policy was launched in 1992. The ingredients of the New Economic
Policy, viz. liberalisation, posed a serious challenge to the public sector and
scheduled banks in the urban areas. The multinational and private banks
spread their network in parts of Raigad District due to proximity with Mumbai
city. In spite of this, the RDCCB recorded phenomenal growth in the area of
mobilisation of deposits due to the quality of service, confidence of the local
population, its credibility and most important of all, dynamic leadership
provided by its management.
5.3.3.4 Working Capital
The working capital to a financial institution like the RDCCB is made available
from (i) its own resources and (ii) the external sources, which include funds lent
by the Maharashtra State Cooperative Bank and other financial institutions; the
borrowings from the capital market and the others. The capacity to raise the
working capital from the external sources is linked with the internal sources.
201
Internal Sources: Internal sources of the working capital are the share capital,
deposits from members, customers and the reserve funds. A detailed analysis of
these aspects has already been made in the preceding chapter and the preceding
sections. The statistical summary of the share capital, the deposits and the
reserved funds is given in Table 41.
Year Share
Capital Deposits Total
YoY change
1999-2000 619.57 32102.57 32722.14
2000-2001 734.31 38898.57 39632.88 6910.74
2001-2002 780.95 43328.39 44109.34 4476.46
2002-2003 821.52 49289.08 50110.6 6001.26
2003-2004 821.75 53715.3 54537.05 4426.45
2004-2005 884.86 56742.04 57626.9 3089.85
2005-2006 956.87 60895.12 61851.99 4225.09
2006-2007 1024.4 68166.91 69191.31 7339.32
2007-2008 1083.27 85433.43 86516.7 17325.39
2008-2009 1132.24 102782.43 103914.67 17397.97
2009-2010 1202.23 113124.47 114326.7 10412.03
Table 41: Working Capital of The RDCCB (Internal) (Figures are in lakhs) Source:
Annual Reports of the RDCCB
Chart 8: RDCCB movement in Share Capital (Table 41)
y = 54.117x + 590.02 R² = 0.9823
600
1000
1400
RDCCB movement in Share Capital
202
Chart 8 illustrates that RDDCB has increased its share capital during the period
under analysis, thus increasing its capacity to generate higher interest income
from loans.
Chart 9: RDCCB movements in deposits (Table 41)
Chart 9 illustrates RDCCB’s ability in mobilising deposits. The growing trend over
the period under analysis is encouraging and demonstrates the RDCCB’s
capacity to generate high interest income as a result.
Chart 10: RDCCB total working capital movement (Table 41)
y = 7562.7x + 18667 R² = 0.918
30000
75000
120000
RDCCB movement in Deposits
y = 7616.8x + 19257 R² = 0.9189
30000
75000
120000
RDCCB total working capital movement
203
Chart 10 illustrates that the RDCCB has performed well in increasing the total
working capital over the period under analysis. This is a clear attribute of excellent
management.
External Sources: The tapping of the external sources depends on the sound
financial position and the resultant credibility of the financial institution. The
internal sources in the excess of five hundred and seventy six crore (as on 31-03-
2005) have enabled the RDCCB to tap the external sources, i.e. the Maharashtra
State Cooperative Bank. The details thereof are given in Table 42.
Year Aggregate
Amount Remark
1999-00 7160.60 Includes loans from KDCCB and SDCCB of Rs. 5000.00 lakhs
2000-01 6118.15 Includes loans from KDCCB and SDCCB of Rs. 3200.00 lakhs
2001-02 6032.19 Includes loans from KDCCB and SDCCB of Rs. 5000.00 lakhs
2002-03 2567.56
2003-04 1310.18
2004-05 933.19
2005-06 848.69
2006-07 685.85
2007-08 773.05
2008-09 366.54
2009-10 239.95
Table 42: Loans Secured From the Maharashtra State Cooperative Bank (₹
Lakhs)
Source: Annual Reports of the RDCCB
204
Chart 11: Loans Secured From the Maharashtra State Cooperative Bank (₹ Lakhs) [Table 42]
Chart 11 graphically illustrates that over the years under analysis, RDCCB’s
financial dependence on the MSCB has been declining.
Table 42 indicates that, unlike most other DCCBs, the financial dependence of
the RDCCB has gradually declined. The bank was in the financial difficulties and
had borrowed funds from the Kolhapur District Central Cooperative Bank, in
addition to the Maharashtra State Cooperative Bank. The liability of loans was in
excess of seventy-one crores in 1999-2000. The RDCCB gradually repaid the
funds borrowed from the KDCCB and SDCCB in next three years and has totally
wiped out that liability. The liability of the borrowings from the State Cooperative
Bank has gradually declined from Rs. 2160.60 lakhs in 1990-2000 to Rs. 933.19
lakhs in 2004-05 and Rs. 239.95 lakhs in 2009-2010.
5.3.3.5 Utilisation of Resources
Prudent utilisation of resources is as important, in fact more important, as that of
the mobilisation of resources. Banking is the financial activity undertaken by the
RDCCB and, being a commercial entity, maximisation of profits is one of its
objectives. The notion of ‘service and not profit’, as the guiding principle, is of
limited application in case of the financial cooperatives. The realistic objective of
the financial institution in the contemporary times should be to maximise profits
and thereby provide the quality service to its customers. This is because the role
y = -705.56x + 6691.2 R² = 0.7845
0
4000
8000
Loans Secured From the Maharashtra State Cooperative Bank
205
of the multinational and private financial institutions has increased many-fold and
the very survival of the cooperative institution is linked with the quality of service
they provide. Modernisation, computerisation and improvement in the quality of
service entail huge expenditure and to meet the same, the endeavour of the
cooperative financial institutions is maximisation of profit by prudent utilisation of
funds.
The RDCCB is governed by the provision of the Maharashtra State Cooperative
Societies Act, 1961, and is required to set aside a part of surplus to build up its
reserve and development funds. The Reserve Bank of India, the regulatory
authority lays down the norms for investment in specified securities/funds. The
rest of the funds are utilised for the banking operation. The most important
banking operation is the lending of the funds in the form of short-term and
medium-term credit to its shareholders and the other customers. The recovery of
the loans is as vital as giving out the loans. Most cooperative banks and credit
societies are in deep trouble due to the burden of the Non-Performing Assets
(NPA) and the accumulated unrecovered Loans. Unlike most other DCCBs, the
RDCCB has an excellent record of accomplishment, in both disbursement and
recovering of loans.
206
A detailed analysis of the resources utilisation by the RDCCB is made below.
Items 1999-
00 2000-
01 2001-
02 2002-
03 2003-
04 2004-
05 2005-
06 2006-
07 2007-
08 2008-
09 2009-
10
SF 284
388
489
615
745
831
865
895
928
1,018
1,157
ACSF 181
248
317
400
488
550
566
581
597
646
711
BF 255
405
537
692
762
822
828
828
847
947
997
FCSF 57
79
101
129
158
179
184
189
194
211
232
DF 7
5
6
10
104
7
5
4
6
15
31
ISF IFF 1
1
3
5
80
175
175
175
175
175
175
GF 0
0
0
0
0
0
BEF 11
9
9
14
18
18
19
19
19
44
51
RGSCF 26
26
26
26
26
CF 5
5
5
5
5
0
1
1
1
1
1
DLWOF 769 899 1459 2032 2322 2341
MUDF 173
46
PFFNPA 150
150
RBDD 2,341
2,500
3,439
5,000
5,523
IF 46
46
46
46
46
PFFNPA 234
254
BSWF 31
30
SWF 11
26
Special Reserve
65
100
Total 1595 2065 2954 3928 5030 5120 5030 5238 6252 8442 9334
Table 43: Funds Of the RDCCB 1999-2000 TO 2009-2010 (₹Lakhs)
Source: Annual Reports of the RDCCB
207
Chart 12: Funds of the RDCCB (Table 43)
Chart 12 illustrates the healthy growth trend in the funds of the RDCCB during the
period under analysis, indicating excellent financial management by the bank.
Building up reserve funds: It is a universally accepted fact that every business
enterprise is likely to face adverse circumstances, described as risks and
uncertainties, in the course of its evolution. To provide for such financial
difficulties as well as to take care of development needs, the Maharashtra
Cooperative Societies Act, 1961 prescribes that 25% of profits be transferred to
Reserve funds. Accordingly, the RDCCB has set up a number of such funds. The
RDCCB had accumulated funds to the extent of 5120.11 lakhs rupees as on 31-
03-2005 and Rs. 9334.33 lakhs as on 31.03.2010. The details of the progress
made in this regard, during the period under analysis have been given in Table
43.
Table 43 indicates that the reserve funds of the RDCCB have increased from Rs.
1674.50 lakhs (as on 31-03-2005) to Rs. 5120.11 lakhs (as on 21-03-2000). The
most notable aspect is that the provisions to write off bad debts constitute the
biggest chunk of the reserve funds. It has increased from Rs. 786.66 lakhs (as on
31-03-2000) to Rs. 2341.29 lakhs (as on 31-03-2005) and to Rs. 5523.43 lakhs
as on 31.03.2010.
This signifies that the Bank is in a position to withstand the burden of bad debts
and will not be in financial difficulty in case the quantum of bad debts increases.
y = 697.41x + 814.61 R² = 0.9254
0
5000
10000
Funds Of The Raigad District Central Cooperative Bank
208
The growth of all funds is satisfactory. The Bank had set up two additional reserve
funds, to take care of differences in trade transactions and provision for future
NPAs. These details reflect sound financial health, viability, and capability to
withstand and survive in case financial difficulties arise.
Investments: After setting aside the prescribed quantum of the surplus, the
cooperative credit institution may have residency surplus. In this regard, the
Maharashtra State Cooperative Societies Act, 1960 provides that the cooperative
society may invest or deposit its funds, which are not immediately required for the
business of society as under
a) in the Postal Saving Bank
b) in any of the securities specified in sect 20 of the Indian Trust Act 1882
c) in the shares or the securities of any other society
d) with any bank approved for this purpose by the Registrar or
e) in any prescribed manner
209
The details of the investments made by the RDCCB are given in Table 44.
Investment
Year of Investment
1999-00
2000-01
2001-02 2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
2008-09
2009-10
GOM Bonds
18 17 17 11 11 11 11 1 1
GOI Bonds
55 55 55 55 55 55 5
NSB 1
IFCI Bonds
Krishna Valley Dev. cor.
35 235 235 218 200 200 200
IFC Bonds 10 10 10 10
N B Bonds
50 50 50 50 50 50 25
REC Bonds
110 110 110 110 110 110 10
Indira Visas Plan
37 37 37 27 10
IDBI Bonds
107
1573 3698
SGL 3681 3665 2449 1503 1500
NABARD 500 1500
Total 316 621 514 480 2009 4124 3932 4165 3950 1503 1500
Table 44: Investment Made By the RDCCB 1999-2000 to 2009-2010 (Amount in
Lakhs)
Source: Annual Report of the RDCCB
210
Chart 13: Total Investment Made By the RDCCB (Table 44)
Chart 13 illustrates that there is a growth trend in the total investment made by
the RDCCB during the period under analysis. During the period between 2004-05
and 2007-08, investment by the RDCCB had peaked.
Other Investments: In addition to the investment in the prescribed securities, the
RDCCB invested funds in the form of subscribing to the share capital of the
Maharashtra State Cooperative Bank and the other cooperative institutions at the
district and the state level. It also invested in the fixed term deposits with the
Maharashtra State Cooperative Bank and the other Financial Institutions. The
details of these ‘other investments’ have been given in Table No. 7.14 to 7.16
y = 264.13x + 516.54 R² = 0.291
0
2250
4500
Total Investment Made By The Raigad District Central Cooperative Bank
211
Cooperative Investment
MSCB RDSC MSFCS MCFDS Total
1999-00 747,000 10 1,000 10,000 758,010
2000-01 747,000 10 1,000 10,000 758,010
2001-02 4,800,000 10 1,000 10,000 4,811,010
2002-03 5,602,000 10 1,000 10,000 5,613,010
2003-04 5,602,000 10 1,000 10,000 5,613,010
2004-05 5,602,000 10 1,000 10,000 5,613,010
2005-06 5,602,000 10 1000 10000 5,613,010
2006-07 5,602,000 10 1000 10000 5,613,010
2007-08 5,602,000 10 1000 10000 5,613,010
2008-09 5,602,000 10 1000 10000 5,613,010
2009-10 5,602,000 10 1000 10000 5,613,010
Table 45: Investment in Share Capital (₹)
Explanation:
MSCB - Maharashtra State Cooperative Bank
RDSCB - Raigad District Supervisory Cooperative Society
MSFCS - Maharashtra State Federal Cooperative Society
MCFDS - Maharashtra Cooperative Floriculture Development Society
Source: Annual Reports of the RDCCB
212
Chart 14: Investment In Share Capital of other institutions (Table 45)
The above table and chart indicate that the quantum of share holding of the
RDCCB in the MSCB increased from Rs. 747,000 in 1999-2000 to Rs. 5,60,2000
in 2004 - 2005. The Shareholding in the other cooperative societies remained
stationary, as it was nominal contribution. This reflects the sound financial health
of the RDCCB.
Instalment MSCB MCHFC HDFC Total
1999-00 7295.47 100 7395.47
2000-01 9155.52 100 9255.52
2001-02 10523.77 100 10623.77
2002-03 13844.77 13844.77
2003-04 21119.77 21119.77
2004-05 14418.76 14418.76
2005-06 13212.8 13212.8
2006-07 20512.8 20512.8
2007-08 42362.3 42362.3
2008-09 38221.9 9950 48171.9
2009-10 29889.1 6110 17370.5 53369.6
Table 46: RDCCB Fixed Term Deposits (₹ Lakhs)
Source: Annual Reports of the RDCCB
Explanations:
MSCB - Maharashtra State Cooperative Bank
MCHFC - Maharashtra Cooperative Housing Finance Corporation.
0
3,000,000
6,000,000
Investment In Share Capital of other institutions
213
Chart 15: RDCCB Fixed Term Deposits in MSCB (₹ Lakhs) [Table 46]
Table 46 and Chart 15 indicate that the RDCCB gradually withdrew its fixed term
deposits from the HDFC and MCHFC. The quantum of the fixed term deposits
increased from Rs. 7295.469 lakhs rupees in 1999-2000 to Rs. 21119.769 lakhs
in the year 2003-2004. The Bank withdrew an amount of Rs. 6700 lakhs in the
year 2004-2005 to meet its operational and development requirements. Fixed
term Deposits amounted to Rs.29889.09 in the year 2009-2010.This reflects
sound financial health of the RDCCB.
The RDCCB has been recipient of the capital equalisation fund from the
government of Maharashtra to invest in the share capital of the primary
cooperative societies. This fund was invested in the fixed term deposits with the
Maharashtra State Cooperative Bank. The details of the same are given in Table
47.
Type Reserve Funds
ACSF FCSF Total
1999-00 285.6 178.1 59.5 523.2
2000-01 385.6 243.1 89.5 718.2
2001-02 489.1 309.8 99.15 898.05
2002-03 614.1 391.8 126.15 1132.05
2003-04 741.1 475.8 155.15 1372.05
2004-05 828.1 555.8 235.15 1619.05
2005-06 861.1 566.8 235.15 1663.05
Table 47: RDCCB Fixed Term Deposits (₹ Lakhs)
y = 3001.6x + 2040.9 R² = 0.7003
0
22500
45000
Fixed Term Deposits in MSCB (Amount in Lakhs)
214
Source: Annual Reports of the RDCCB
Explanation:
ACSF - Agricultural Credit Stabilisation Funds
FCSF - Fishermen Credit Stabilisation Fund
Chart 16: RDCCB Fixed Term Deposits (₹ Lakhs) [Table 47]
The above Table 47 and Chart 16 indicate progress made by the RDCCB in
building up Reserve funds for the primary cooperative societies within its
jurisdiction. The availability of these contingency resources enables the RDCCB
to help the primary cooperative societies in the terms of difficulties. The funds
have tripled in the cause of five years from Rs. 523.20 lakhs in 1999-2000 to Rs.
1619.05 lakhs in 2004-2005, Rs. 1663.05 lakhs in 2005-06 to Rs. 2095.09 lakhs
in 2009-2010. This reflects sound financial health of the RDCCB. The rate of
growth for Reserve Funds exceeds those for ACSF and FCSF – as indicated by
the trendline equations in Chart 14. This is an indication of RDCCB’s financial
performance because Reserve funds are internally generated and this can
happen only with profit generation.
Lending of the funds: The resources generated by the RDCCB are principally
utilised or the lending purpose. The RDCCB serves as a link between the
Maharashtra State Cooperative Bank (MSCB) and the Primary Cooperative
Societies in the Raigad District. It channelised the funds provided by the MSCB
y = 102.27x + 191.6 R² = 0.9846
y = 69.911x + 109.1 R² = 0.9844
y = 31.223x + 17.929 R² = 0.9357
0
450
900
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
RDCCB Fixed Term Deposits (Amount in Lakhs)
ReserveFunds
ACSF
FCSF
Linear(ReserveFunds)Linear(ACSF)
Linear(FCSF)
215
as well as its funds for productive activities. The very purpose for which the
DCCBs have been established is to make available credit to the agricultural
credit. The RDCCB disburses agricultural credit. However, in view of the rapid
industrialisation coming about in the Raigad District in the last two decades, the
quantum of the agricultural credit has progressively declined. Still agricultural
credit remains one of the principal lending activities of the RDCCB. The RDCCB
makes available the following types of agricultural credit.
1. Short-term crop loans
2. Medium and long term loans for the agricultural development
3. Loans for the implementation of Horticulture development scheme
4. Each credit and personal loans are given against the securities offered by the
individual debtors.
The Bank accepts the following as securities against loans.
1. Fixed deposits with the primary credit societies
2. National Saving Certificates
3. Kisan Vikas Patra
4. Gold
The large chunk of the funds has been utilised for giving loans to the non-
agricultural sector. These includes loans given to the industries, traders,
construction activities, housing loans, loans to purpose durable consumer goods
and educational loans. The RDCCB has also lent funds to the MSEB and
MSRDS.
The details of the loan transactions during the period under analysis have been
given below in Table 48 to Table 53.
216
Item 1999-
00 2000-
01 2001-
02 2002-
03 2003-
04 2004-
05 2005-
06 2006-
07 2007-
08
(A) INSTITUTIONAL
ACS 620 519 485 303 347 388 453 543 752
NACS (CC) 2214 4988 6954 6414 4881 7167 8116 7645 7600
NACS (HYP) 167 230 316 290 324 331 312 386 416
MTFCS 57 80 85 87 65 78 62 45 53
Others 0 0 0 0 0 0 0 0 0
Total 3059 5818 7839 7095 5617 7964 8944 8620 8822
(B) LOANS AGAINST SECURITY
CSs 223 1397 1802 1461 1462 694 609 1175 700
Individuals 2107 396 1316 3115 2152 3597 4688 3829 1896
Total 2330 1793 3118 4577 3614 4291 5296 5004 2596
(C) CONSORTIUM FINANCE ON BEHALF OF MSCB
POC 1500 500 10000 4373 4398 3148
Individuals 2100 3440 3437 3926 4102 4355
Dir. /CC /SCC
3600 3940 4102 14355
Total 7201 7880 3437 3926 8203 28711 4373 4398 3148
A+B+C 12589 15491 14394 15598 17434 40966 18613 18022 14566
Table 48: Short Term Loans (₹ Lakhs)
Source: Annual Reports of THE RDCCB
Explanation:
(1) ACS Agricultural Cooperative Society
(2) NACS (CC) Non-Agricultural Society (Cash Credit)
(3) NACSC (HYD) Non-Agricultural Cooperative Society (Hypothecation of
Goods)
(4) M_FSC Maharashtra Fishermen’s Cooperative societies
(5) CSs Cooperative Societies
(6) Ends Individuals
(7) POC Procurement of Cotton under Monopoly Purchase Scheme
(8) Individuals Direct Loan
(9) Individuals SSG Cash Credit
(10) Individuals Self Credit Card
217
Chart 17: Institutional Short Term Loans (₹ Lakhs) [Table 48]
Intuitional short-term loans show a healthy growth trend, as illustrated in Chart 17.
Such loans ensure a steady interest income for RDCCB, because of a reduced
risk of default and RDCCB should explore avenues of growth in this sector.
Chart 18: Short Term Loans against Security (₹ Lakhs) [Table 48]
There is an increasing trend in the short-term loans against security, as illustrated
by Chart 18. This is a good sign because such loans are less likely to become
NPAs, ensuring RDCCB a steady interest income.
y = 575.64x + 4208.2 R² = 0.6596
3000
6000
9000
Institutional Short Term Loans (Rs Lakhs)
y = 246.15x + 2393.7 R² = 0.2933
0
3000
6000
Short Term Loans (Rs Lakhs) Against Security
218
Chart 19: Short Term Consortium Finance On Behalf Of MSCB (₹ Lakhs) [Table
48]
Chart 19 illustrates that there is a declining trend in the short-term consortium
finance on behalf of MSCB. There appears no regular pattern in this finance
section. This type of finance is very safe for RDCCB because the risk is borne by
MSCB and therefore RDCCB should find avenues to increase this type of loan.
Chart 20: Total Short Term Finance (₹ Lakhs) [Table 48]
y = -0.0502x + 7919.9 R² = 3E-10
0
15000
30000
Short Term Consortium Finance On Behalf Of MSCB
y = 821.73x + 14522 R² = 0.0686
0
22500
45000Total Short Term Finance (Rs Lakhs)
219
Chart 20 graphically illustrates that, over the period under analysis, the trend has
been that of a steady growth in the total short-term finance, though after peaking
in 2004-05, there has been a decrease in the total short-term finance.
Item 1999-
00 2000-
01 2001-
02 2002-
03 2003-
04 2004-
05 2005-
06 2006-
07 2007-
08 2008-
09 2009-
10
(A) COOPERATIVE SOCIETIES
Agricultural 185 172 179 297 251 276 312 276 328 188 146
Non-Agricultural
3848 4093 3526 3762 3149 2758 2489 2195 1940 3108 3372
BCSs 109 104 99 170 171 180 207 218 220 213
Total 4143 4369 3804 4059 3570 3205 2981 2678 2486 3516 3731
(B) PERSONAL AND OTHERS
DG (H) 65 252 249 203 191 183 179 174 170 168
Direct 1349 1408 3111 3392 3686 2931 2943 3211 3385 4443 4287
MSEB 10080 8350 6350 4350 2350 0 0 0
SAH 216 294 293 283 396 655 8696 2659 4821 7146
SFs 242 988 1387 1412 1531 16 15 25 44 65
HL 11 12 11 10 9 17 17 71
RH 50 105 172 190 236 337 747 1424
AP 14 24 26 23 21 15 16
SSG 9 20 16 42 69 78 140
SCC 2 7 8 21 19 5 1
SF 7822 219
vc 19 66
SS 8 7
PML 225
NAS 12
Total 11494 10467 10992 9686 8064 5276 4042 12426 6702 18188 13678
A+B 15637 14836 14796 13744 11634 8481 7023 15104 9188 21704 17409
Table 49: Medium Term Loans (₹ Lakhs)
Source: Annual Reports of THE RDCCB
Explanation:
(1) ACS - Agricultural Cooperative Societies
(2) Non-Agricultural Cooperative Societies
(3) BCSs - Balutedar Cooperative Societies
(4) DHCH - Durable Consumer Goods-Hypothecated
(5) MSEB - Maharashtra State Electric Board
(6) SFs - Sugar Factories
220
(7) HL - Housing Loans
(8) RH - Rural Housing
(9) AP - Against Pension
(10) SCC - Self-Credit Card
Chart 21: Medium Term Agricultural Loans (₹ Lakhs) to Cooperative Societies
[Table 49]
Chart 21 graphically shows that there has been an increasing trend in the growth
of medium-term agricultural loans to Cooperative societies during the period
under analysis. However, the growth rate is very gradual as indicated by the
trendline equation. There is a decline in this loan category during the latter years
under analysis.
y = 3.0012x + 219.17 R² = 0.0239
0
175
350
Medium Term Agricultural Loans (Rs Lakhs) to Cooperative Societies
221
Chart 22: Medium Term Non-Agricultural Loans (₹ Lakhs) to Cooperative
Societies [Table 49]
Chart 22 illustrates that there has been a declining trend in the Medium Term
Non-Agricultural Loans during the period under analysis, though the quantum has
been increasing since 2007-08 after a steady decline.
Chart 23: Medium Term Loans - Personal and Others (₹Lakhs) [Table 49]
Medium Term Loans - Personal and Others show a growing trend, as illustrated in
Chart 23. This could be because of changing demographics and lifestyle in the
Raigad District.
y = -135.21x + 3924 R² = 0.4108
0
2250
4500
Medium Term Non-Agricultural Loans (Rs Lakhs) to Cooperative Societies
y = 276.32x + 8434.4 R² = 0.0517
0
10000
20000
Medium Term Loans - Personal and Others (Rs Lakhs)
222
Chart 24: Total Medium Term Loans (₹ Lakhs) [Table 49]
Growth rate in total medium-term loans is not very high, as illustrated in Chart 24.
Item 1999-
00 2000-
01 2001-
02 2002-
03 2003-
04 2004-
05 2005-
06 2006-
07 2007-
08 2008-
09 2009-
10
(A) INSTITUTIONS
Agricultural 10 4 4 3 7 14 14 13 12 30 33
Non-Agricultural
575 582 828 758 762 761 738 665 841 966 868
(B) INDIVIDUALS+OTHERS
HL-E 443 418 382 326 284 244 358 469 497 1064 1058
NF-A 234 403 384 319 299 289 275 257 255 180 165
MSRDC 6560 10000 10000 9477 9358 7498 6000 4161 2948 1417 0
Sugar Factories
633 607 560 274 107
RTL 932 873 1004 942 842
MSEDCL 16000 16000 14298 12511 10723
Total 7237 10821 10766 10122 9940 8031 24198 22367 19562 16386 12896
A + B 7821 11407 11598 10883 10709 8806 24950 23044 20415 17382 13797
Table 50: Long Term Loans (₹ Lakhs)
Source: Annual Report of the RDCCB
Explanation:
(1) ACS - Agricultural Cooperative Societies
(2) NACS - Non-Agricultural Cooperative Societies
y = 160.16x + 12635 R² = 0.0155
0
12500
25000Total Medium Term Loans (Rs Lakhs)
223
(3) HL-E - Housing Loan-Employees
(4) NF-I - Non-Farm Individuals
(5) MSRDC - Maharashtra State Road Development Corporation
(6) NFA - Non-farm activities
(8) RTL - Restructure Term Loan
(9) MSEDCL - Maharashtra state Electric Distribution Company Ltd
Chart 25: Long Term Agricultural Loans (₹ Lakhs) to Institutions (Table 50)
Chart 25 illustrates that long-term agricultural loans to institutions has a growing
trend over the period under analysis. The trendline is a reasonably good fit to the
data. Long-term agricultural loans to institutions are growing faster than long-term
non-agricultural loans to institutions.
y = 2.5031x - 1.9667 R² = 0.6736
0
18
35Long Term Agricultural Loans (Rs Lakhs) to Institutions
224
Chart 26: Long Term Non-Agricultural Loans (₹ Lakhs) to Institutions (Table 50)
Chart 26 illustrates that long-term non-agricultural loans to institutions have an
increasing trend over the period under analysis. The trendline has a reasonably
good fit with the data.
Chart 27: Long Term Loans (₹ Lakhs) to Individuals and Others (Table 50)
Chart 27 illustrates that there has been a growing trend in long-term loans to
individuals and others, though quantum of loans has been declining from its peak
in 2005-06.
y = 25.715x + 604.09 R² = 0.5174
0
600
1200
Long Term Non-Agricultural Loans (Rs Lakhs) to Institutions
y = 1051.7x + 7537.4 R² = 0.3526
0
12500
25000
Long Term Loans (Rs Lakhs) to Individuals and Others
225
Chart 28: Total Long Term Loans (₹ Lakhs) [Table 50]
Chart 28 illustrates that there has been an overall growth trend in total long-term
loans over the period under analysis.
Item 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
ATKK-K 160.5 158.24 156.71 157.35 160.5 158.54
SIL-A 3.28 4.26 48.06 48.25 3.28 3.26
SIL-NA 35.85 35.78 35.94 62.78 34.85 34.79
Total 199.63 198.28 240.71 268.38 198.63 196.59
Table 51: Other Loans (Amount in Rs Lakhs)
Explanation:
(1) ATKK- A Anista Tafavat Karja Khate-Agricultural
(2) SIL-A Society in Liquidation-AGR
(3) SIL-NA Societies in Liquidation-Non-Agricultural
Source: Annual Reports of the RDCCB
y = 1080x + 8139.5 R² = 0.3683
0
12500
25000
Total Long Term Loans (Rs Lakhs)
226
Chart 29: Other Loans (₹ Lakhs) [Table 51]
Chart 29 illustrates that the trend for other loans, over the period under analysis,
is that of growth.
Year Amount (Rs)
1999-2000 2,994,500
2000-2001 2,994,500
2001-2002 2,994,500
2002-2003 2,994,500
2003-2004 2,994,500
2004-2005 2,568,466
2005-2006 2,568,466
2006-2007 2,568,466
2007-2008 2,568,466
2008-2009 14,652,390
2009-2010 2,568,466
Table 52: Agricultural Loans Waived
(As per Government of India’s Agricultural Loan Waiver Scheme, 1990 to 2010)
Source: Annual Report of the RDCCB
y = 0.3863x + 215.68 R² = 0.0006
150
200
250
300
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Other Loans (Rs Lakhs)
227
Chart 30: Agricultural Loans Waived by RDCCB (Table 52)
Chart 30 graphically illustrates the quantum of agricultural loans waived over the
years. The amount waived in 2008-09 far exceeds those in other years and,
again, reverted to a ‘normal’ amount in 2009-10.
Item 1999-
00 2000-
01 2001-
02 2002-
03 2003-
04 2004-
05 2005-
06 2006-
07 2007-
08 2008-
09 2009-
10
Short term
9212 24797 14394 15597 13261 27305 18613 18801 15621 13511 14936
Med. Term
15377 14836 14796 13381 11634 8882 7023 7306 9188 14664 19313
Long term
7337 10821 10746 10122 9940 8031 24950 17393 13798
ALW 30 30 30 30 30 26
Total 31956 50484 39966 39130 34865 44244 50586 26107 24809 45569 48046
Table 53: Summary of the Loans Disbursed and Other Amounts Receivable (₹
Lakhs)
Source: Annual Reports of the RDCCB
y = 0.3813x + 1.5727 R² = 0.1244
-
7.50
15.00
Rs
Mill
ion
Agricultural Loans Waived by RDCCB
228
Chart 31: Summary of the Loans Disbursed and Other Amounts Receivable (₹
Lakhs) [Table 53]
Chart 31 demonstrates that disbursement of Long Term loans has grown at a rate
faster than the other two categories. The medium term loan disbursement has
shown a steady declining trend over the years, while the short-term loan
disbursement too has shown a declining trend in disbursement over the years.
The trendline equations corroborate this analysis.
RECOVERY OF LOANS
More important than the disbursement of loans is the recovery of loans/advances
given to the borrowers. The inefficiency in this regard eats into the working capital
of the financial institutions, as it is case with most of the cooperative credit
institutions. However, the RDCCB has carried out this task satisfactorily and the
recovery of the loaned amounts is over 70%. The details thereof are given in
Table 54.
y = -9.8836x + 16973
y = -132.67x + 13196
y = 891.25x + 7718.6
5000
17500
30000
Summary Of The Loans Disbursed And Other Amounts Receivable (Amount In Lakhs)
Short term
Med. Term
Long term
Linear (Shortterm)
Linear (Shortterm)
Linear (Med.Term)
Linear (Longterm)
229
Year Amount
Receivable Amount
Received %
Amount Outstanding
%
1999-00 8655.98 6651.60 77.0 2004.38 23.0
2000-01 15491.65 123156.16 78.5 3335.49 21.5
2001-02 29102.62 24196.66 83.1 4905.96 16.9
2002-03 26640.71 22609.47 84.9 4031.24 15.1
2003-04 21167.82 16191.60 76.5 4976.22 23.5
2004-05 21610.52 15187.45 70.3 6423.07 29.7
Table 54: Recovery of Loans by the RDCCB (₹Lakhs)
Source: Annual Report of the RDCCB
Chart 32: Recovery of Loans by the RDCCB (₹ Lakhs) [Table 44]
Receipts and Expenditure of the RDCCB
Receipts: RDCCB is a business enterprise in the service sector.
Although, in theory, the principal objective of cooperation is service and not profit,
no cooperative institution can either survive or render service to the society
without achieving financial viability. The banking and related activities are
undertaken by the RDCCB to meet its operational expenditure in the first instance
and to generate surplus.
y = 2266.8x + 12511 R² = 0.3226
y = 1520x + 10846 R² = 0.1893
y = 746.88x + 1665.3 R² = 0.8414
0
5000
10000
15000
20000
25000
30000
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
Recovery Of Loans By The RDCCB (Amount in Lakhs)
AmountReceivable
AmountReceived
AmountOutstanding
230
The details regarding the surplus generated by the RDCCB are:
Source 1999-
00 2000-
01 2001-
02 2002-
03 2003-
04 2004-
05 2005-
06 2006-
07 2007-
08 2008-
09 2009-
10
Interest on Investment
953 1085 1291 1354 1464 1606 1466 1069 2679 5295 5301
Interest on Amts. Loaned
4318 5450 7068 5473 4623 3195 3038 4051 3935 3935 4343
Commission 242 160 172 198 226 193 211 369 280 341.8 553.6
Dividend Received
2.8 3.92 2.8
Others 217 222 221 197 614.4 5.48
Total 5513 6695 8531 7025 6315.8 5214.9 4939.8 5710 7091 10186 10203
Table 55: Receipts of the RDCCB (1999–2000 to 2009-2010) (₹Lakhs)
Chart 33: Receipts of the RDCCB (Table 55)
Source: Annual Report of the RDCCB
Chart 33 graphically illustrates a healthy growing trend in total receipts of the
RDCCB during the period under analysis. Interest income on investment has
been growing whilst interest income on amount loaned has been declining. This
decline is a worrying factor for the RDCCB. This decline could be because of
NPAs. Commission income is increasing over the period under analysis, though
at a slow rate.
y = 383.42x - 158.42 R² = 0.6116
y = -179.66x + 5571.5 R² = 0.2691
y = 26.693x + 107.7 R² = 0.5829
y = 264.45x + 5451.9 R² = 0.2222
0
5500
11000Receipts of the RDCCB
Interest onInvestment
Interest onAmts. Loaned
Commission
Total Receipts
Linear(Interest onInvestment)Linear(Interest onAmts. Loaned)
231
The above table 55 indicates decline in the total receipts of the RDCCB between
2001-02 and 2005-06. This is due to the decline the receipts from the interest on
the funds loaned. This is directly related to the recovery of loans, which, as
already noted, has gradually declined during the same period. The other
observations are as follows:
1. The main source of income is the interest on the funds loaned and the
interest earned on the investments made by the Bank with the gradual
increase in the investments made by the bank; the receipts on account of
interest received have gradually increased from 952.64 lakhs in 1999-2000
to 1605.94 lakhs in 2004-2005 to Rs. 5300.78 lakhs in 2009-2010.
2. The other factor responsible for the decline in the income from the
investments and lending between 2001-02 and 2005-06 is the fall in the
‘other’ sources of income. RDCCB has been trying to tap the other sources
of income. In spite of decline in the income, the performance of the Bank
could be regarded as satisfactory as receipts in excess of fifty crore rupees
are regarded as above average performance.
Expenditure: The receipts are meaningful only in comparison to the expenditure.
The receipts in excess to expenditure generate surplus and indicate financial
viability of a banking institution. On the other hand, expenses in excess to the
receipts imply losses incurred by a banking institution and such losses, over a
period of time, reveal the critical stage. The RDCCB has managed to keep
expenditure below the level of its receipts during the period under analysis. The
details of expenditure are given below in the Table 56.
Item 1999-
00 2000-
01 2001-
02 2002-
03 2003-
04 2004-
05 2005-
06 2006-
07 2007-
08
Interest 3545 4551 5707 4223 3318 3476 3230 3184 3858
Adm. 1134 1238 1276 1265 1404 1276 1421 2119 2020
Dep. 26 41 105 137 181 168 160 160 135
Other 1402 453 953 899 1097 188 25 144 753
Total 6107 6282 8041 6524 6000 5107 4837 5608 6765
Receipts 5513 6695 8531 7025 6316 5215 4940 5710 7091
Surplus -594 413 490 501 315 108 103 102 326
Total 5514 6694 8532 7026 6316 5216 4939 5710 7092
Table 56: Expenditure of the RDCCB (1999–2000 to 2007-2008) (₹ Lakhs)
232
Source: Annual Report of THE RDCCB
The above table indicates that the expenditure of the RDCCB has declined
between 2001-02 and 2005-06 onwards, along with the decline in the receipts
and surplus. It implies regression in the working of the Bank. The management of
the Bank, however, managed to control the total expenditure to below the total
receipts level and that has enabled the Bank to carry on its operations without
facing financial crisis.
Chart 34: RDCCB expenditure heads (Table 56)
The above chart shows that the overall trend is that interest expenses are
decreasing, whilst administrative expenses are increasing. It is evident that the
increase in administrative expenses are a driving the surplus down. ‘Other
expenses’ have also shown a declining trend during the period under analysis – a
healthy occurrence for the RDCCB because declining expenses help improve the
net surplus for the RDCCB.
y = -142.51x + 4611.7 R² = 0.2256
y = 108.13x + 920.78 R² = 0.692
y = -101.52x + 1164.8 R² = 0.3382
0
3000
6000
RDCCB Expenditure
Interest Expenses
Adm. Expenses
Depreciation
Other Expenses
Linear (InterestExpenses)Linear (Adm.Expenses)Linear (OtherExpenses)
233
Chart 35: Expenditure and receipts Of the RDCCB (1999–2000 to 2007-2008) (₹
Lakhs) [Table 56]
The above chart graphically illustrates that total receipts have exceeded total
expenditure for all the years under review, except for 1999-00. However, there is
a declining trend during the period under analysis. It is notable that the rate of
decline in ‘total expenditure’ is higher than that for ‘total income’, ensuring an
operating surplus for the RDCCB.
Surplus: Surplus is the amount in excess to the expenditure. The RDCCB has
been able to earn surplus by meeting all expenditure from its receipts during the
period under analysis, except for year 1999-00. There has been a dip in the
surplus during the period 2003-04 to 2006-07, after which there is an
improvement in the surplus. The details are in Table No. 57 and graphically
shown in Chart below:
Item 1999-
00 2000-
01 2001-
02 2002-
03 2003-
04 2004-
05 2005-
06 2006-
07 2007-
08
Receipts 5513 6695 8531 7025 6316 5215 4940 5710 7091
Expenditure 6107 6282 8041 6524 6000 5107 4837 5608 6765
Surplus -594 413 490 501 315 108 103 102 326
Table 57: Surplus/Profit of The RDCCB (1999–2000 to 2007-2008) (₹ Lakhs)
Source: Annual Report of THE RDCCB
y = -120.29x + 6742.8 R² = 0.1199
y = -93.925x + 6806.9 R² = 0.0516
4000
6500
9000RDCCB Comparison of Total Receipts and Total Expenditure
TotalExpenditure
Total Receipts
Linear (TotalExpenditure)
Linear (TotalReceipts)
234
Chart 36: Surplus/Profit of the RDCCB (Table 57)
Chart 36 illustrates fluctuating fortunes of the RDCCB as far as the surplus is
concerned for the period under analysis. From a very precarious situation in
1999-00, the RDCC has made excellent recovery to ensure surplus in the
remainder of the period under analysis. The surplus declined from 2002-03,
plateaued during the period 2004-05 to 2006-07, and has improved in 2007-08.
The RDCCB needs to ensure a steady growth in its surplus/profit year on year in
order to fulfil its assigned role in Raigad District.
5.3.3.6 Operational Aspects
The performance of the banking operation was evaluated on the basis of the
following criteria:
Profit (_) / Loss (-): The ultimate criterion to evaluate the performance of banking
institutions is its capacity to generate profits. During the period under analysis, the
RDCCB has registered profit. The performance of its branches is given in Figure
21.
y = 26.37x + 64.07 R² = 0.046
-600
-300
0
300
600
Surplus/Profit of the RDCCB
235
Year No. of Branches in Profit Loss
1999-2000 NA NA
2000-2001 NA NA
2001-2002 43 5
2002-2003 43 5
2003-2004 46 2
2004-2005 47 2
Figure 21: Profitability of the RDCCB
Source: Annual Reports of the RDCCB
The above figure reflects that:
(1) The performance of more than 90% branches is highly satisfactory.
(2) The number of branches making losses had reduced from 5 in 2001-02 to 2 in
2004-05.
Audit Class: The statutory audit of the DCC Bank is undertaken by the
Department of Cooperation every year. The auditors award grade on the basis of
the performance. The performance of the RDCCB, as assessed by the statutory
auditors is given below in Figure 22.
Years Class
1999-2000 ‘A’
2000-2001 ‘A’
2001-2002 ‘A’
2002-2003 ‘A’
2003-2004 ‘A’
2004-2005 ‘A’
Figure 22: Audit Class
Source: Annual Reports of the RDCCB
The above figure reflects that:
(1) The performance of the RDCCB has been highly satisfactory.
(2) The Bank has been ‘A’ grade during the period under analysis.
236
(3) Payment of Dividend: The profitability of the Bank is reflected by dividend
given to its shareholders. The position of the RDCCB in this regard is given below
in Figure 23.
Years Dividend (%)
1999-2000 12%
2000-2001 12%
2001-2002 12%
2002-2003 12%
2003-2004 12%
2004-2005 8%
Figure 23: Dividend paid
Source: Annual Report of the RDCCB
Significant Findings: The above figure reveals that:
(1) The RDCCB had paid dividend to its shareholders during the entire period of
analysis.
(2) The Bank had paid dividend @ 12% from 1999-2000 to 2003-2004.
(3) The quantum of dividend was reduced to 8% in 2004-2005 due to decline in
the profit of the Bank.
Assets: The assets reflect the financial position of the Bank. The financial
position of the RDCCB for the year 2004-2005 is given below in Figure 24.
Sr. No. Particular Amount (in lakhs)
(1) (2) (3)
Cash in hand Balance with Bank i) Saving ii) Current iii) Fixed iv) Call Deposits Investment
i. Government Securities ii. Debentures iii. F. D. with MSC Bank iv. Other (including Fixed Assets )
1344.69 1344.69 3361.24 3914.04 56076.00 14419.76 47908.46
Total 127024.19
Figure 24: Assets Position
Source: Annual Report of the RDCCB (2004-05)
237
The above figure reflects that:
(1) The financial position of the RDCCB is satisfactory
(2) The bank has invested to the extent of Rs. 74409.80 lakhs in the Government
securities, Debentures and FDs. Their investments account for the sizeable
income of the Bank.
Operational Cost: The operational cost and its management reflect the capability
of the Board of Directors and the managerial officials. The details thereof are in
Figure 25.
Item Expenditure (In lakhs)
1999-00 2000-01 2001-02 2002-03 2003-04 2004-05
(a) Salaries 473.32 529.51 580.75 572.58 577.59 591.31
(b) Rent Paid — — — — — —
(c) Depreciation of Fixed Assets
25.84 40.57 104.94 137.32 179.26 151.00
(d) Other Expenses
— — — — — —
Figure 25: Operational Cost
Source: Annual Report of the RDCCB
The above figure reflects that:
(1) The expenditure on the salary and allowances has increased from Rs. 473.32
lakhs in 1999-2000 to Rs. 591.31 lakhs in 20004–2005.
(2) The Depreciation on the fixed assets increased from Rs. 25.84 lakhs in 1999-
2000 to Rs. 151.00 lakhs in 2004–2005.
(3) The expenditure on rent was nil, as the Bank had shifted its HO and branches
to its own premises.
(4) The operational cost was controlled and, as a result, the Bank did not incur
losses in spite of decline in overall profits.
238
5.3.4 General performance of the DCCBs
Progress Of DCCBs in India from 2003-04 to 2006-07 (₹ Crores)
2003-04 2004-05 2005-06 2006-07
Number of Banks 349 352 349 351
Owned Funds 900 1007 1573.14 1838.31
Deposits 3766 4932 9664.77 11180.56
Borrowings 2000 2351 4580.6 5460.31
Working Capital 6666 8290 15818.51 18479.18
Loans issued 5110 7333 15476.19 18771.01
Loans Outstanding 4705 5444 9881.49 12156.22
Loans outstanding/Loans issued 92% 74% 64% 65%
Table 58: Progress Of DCCBs in India from 2003-04 to 2006-07 (₹ Crores)
Source: Data compiled from
1. Report on Trend and Progress of banking in India, Various Issues.
2. Performance of DCCBs - National Federation of State Cooperative Banks
Limited, 2007-08, Navi Mumbai
3. Except for the number of banks figure, rest of the figures are Rs Crores
239
Chart 37: Progress of DCCBs in India from 2003-04 to 2006-07 (Table 58)
Chart 37 illustrates a growing trend in all the attributes in Table 58. Owned funds
and borrowings have increased at a slower rate as compared to deposits.
Working capital matches the loans issued, indicating very efficient use of the
working capital to generate interest income. Loans outstanding have grown at
slower rate than that for loans issued another healthy sign.
The owned funds increased from Rs. 900 crores in 2003-04 to Rs.1838.31 crores
in 2006-07 registering a two-fold increase. Deposits also increased to
Rs.11180.56 crores in 2006-07 from Rs.3766 crores in 2003-04 showing a 3-time
increase. Borrowings of DCCBs from apex banks increased from Rs.2000 crores
in 2003-04 to Rs.5460.31 crores in 2006-07 with nearly a 2½-time increase.
Working capital also increased to Rs.19079.25 crores from Rs.8663 crores during
this period. From Table 48, it is evident that the advances increased from
Rs.5110 crores in 2003-04 to Rs.18771.01 crores, indicating a 3.5 fold increase.
Loans outstanding also simultaneously increased to Rs.12156.22 crores from
Rs.4705 crores during this period.
The DCCBs are making a very efficient use of their funds, with almost the entire
working capital used to issue loans and thus ensuring high interest income.
The rate of increase in loans issued is higher than the rate of increase in loans
outstanding.
y = 5208.1x - 1299.4 R² = 0.9777
y = 4912.6x - 609 R² = 0.952
y = 2679.1x + 1348.9 R² = 0.9396
0
10000
20000
2003-04 2004-05 2005-06 2006-07
Progress of DCCBs in India from 2003-04 to 2006-07
Owned Funds
Deposits
Borrowings
Working Capital
Loans issued
LoansOutstandingLinear (WorkingCapital)Linear (Loansissued)
240
Year Number of Banks
Owned Funds
Deposits Borrowings Working Capital
Loans Issued
Loans O/standing
Loans outstanding
/ Loans issued
1997-98
352 1984 12340 6552 21103 17047 13589 80%
1998-99
352 2298 14620 6958 25999 24276 15675 65%
1999-00
359 2525 17636 6883 28173 28491 16775 59%
2000-01
362 3300 20827 8781 34696 32699 20679 63%
2002-02
364 3943 24534 10088 38565 36375 24493 67%
2003-03
364 4765 30513 10533 45536 31371 28646 91%
2003-04
367 6223 36628 11547 54655 34780 31516 91%
2004-05
367 7652 45612 12857 65368 40252 36853 92%
2005-06
367 10116 54195 14660 77319 46206 43986 95%
2006-07
367 12180 57574 15836 87821 44678 47635 107%
Table 59: Progress of DCCBs in India from 1997-98 TO 2006-07 (₹ crores)
Source: Data compiled from:
1. Report on Trend and Progress of Banking in India, RBI, Various Issues
2. Performance of DCCBs, National Federation of State Cooperative Banks Limited, Navi Mumbai, 2007-08
Chart 38: Progress of DCCBs in India from 1997-98 to 2006-07 Table 59
y = 5317.5x + 2201.5 R² = 0.9608
y = 7348.6x + 7506 R² = 0.9553
y = 2801.4x + 18210
y = 3888.8x + 6596.5
0
45000
90000
Rs
Cro
res
PROGRESS OF DCCBs IN INDIA FROM 1997-98 TO 2006-07
OwnedFunds
Deposits
Borrowings
WorkingCapital
Loans Issued
LoansOutstanding
241
Chart 38 illustrates that the working capital of DCCBs has been increasing over
the period under analysis, as well as the deposits. The trend for loans outstanding
is increasing whilst that for loans issued is showing a decline.
From Table 59, it is clear that the Total number of DCCBs in India has gone up
from 352 in 1997-98 to 367 in 2006-07. In 1999-2000, there was an increase of 7
banks due to the bifurcation of districts. Since 2003-04, the number of banks has
remained the same. The number of branches of DCCBs in India stood at 14304.
However, it was reduced to 11546 in 1998-99 due to closure of various branches
for want of viability. Since then, the number of branches had increased from
11546 in 1998-99 to 13029 in 2005-06 showing a 12.84 per cent increase. The
owned funds in 1997-98 of Rs.1984 crores increased to Rs.12180 crores in 2006-
07 showing nearly a 6-fold increase. There is an increasing trend throughout the
period. The Deposits mobilised by DCCBs in India showed Rs.12340 crores in
1997-98, which increased to Rs.57574 crores in 2006-07 showing nearly a 4.5
fold, increase. The trend shows a consistent increase over the 10-year period.
The total borrowings by DCCBs in India show Rs.6552 crores in 1997-98 to
Rs.15836 crores in 2006-07 indicating a 2.5 fold increase. This low rate of
increase in borrowings indicates that the DCCBs depended more on deposits
than borrowing for their lending operations.
Table 59 shows that the working capital of DCCBs in India was increasing all
along the 10-year period. The working capital Rs. 21103 crores in 1997-98 had
increased to Rs.87821 crores in 2006-07, nearly a 4-fold increase. Loans and
Advances amounting to Rs.17047 crores in 1997-98 increased to Rs.44678
crores in 2006-07. This shows an increasing trend except in the years 1996-97
and 2006-07 where there was marginal decrease over the previous period. The
loans outstanding show a steady increase over the previous years. In the year
1997-98, loans outstanding stood at Rs.13589 crores which increased to
Rs.47635 crores in 2006-07 indicating a 3.5 fold increase. It is suggested that the
DCCBs should take steps to reduce loans outstanding.
242
Broad Categories of Income and Expenses
1999-00 2000-01 2002-03 2003-04 2004-05
a. Interest Income 8,718 9,807 11,291 11,023 11,427
b. Other Income 469 549 795 888 1,310
Total Income (c) 9,187 10,356 12,086 11,911 12,737
d. Interest Expense 6,149 6,942 7,812 7,318 7,409
e. Provisions and Contingencies 1,453 1,588 2,571 2,414 2,124
f. Operating Expenses 1,681 1,760 1,971 2,071 2,230
Total Expenses (g) 9,283 10,290 12,354 11,803 11,763
h. Operating Profit [c – (d + f)] 1,357 1,654 2,303 2,522 3,098
i. Net Profit (c – g) -96 66 -268 108 974
Rate of increase in interest income 12.5% 15.1% -2.4% 3.7%
Rate of increase in Interest Expense 12.9% 12.5% -6.3% 1.2%
Broad Categories of Income and Expenses
2005-06
2006-07
2007-08
2008-09
2009-10
2010-11
a. Interest Income 10,688 10,597 11,980 14,619 15,900 17,600
b. Other Income 1,000 1,055 1,155 1,488 1,800 1,200
Total Income (c) 11,688 11,652 13,135 16,107 17,700 18,800
d. Interest Expense 6,577 6,668 7,872 9,239 10,300 11,100
e. Provisions and Contingencies 2,563 2,284 2,423 2,140 2,230 2,190
f. Operating Expenses 2,341 2,670 2,980 3,413 4,000 4,600
Total Expenses (g) 11,481 11,622 13,275 14,792 16,530 17,890
h. Operating Profit [c – (d + f)] 2,770 2,314 2,283 3,455 3,400 3,100
i. Net Profit (c – g) 207 30 -140 1,315 1,170 910
Rate of increase in interest income -6.5% -0.9% 13.1% 22.0% 8.8% 10.7%
Rate of increase in Interest Expense -11.2% 1.4% 18.1% 17.4% 11.5% 7.8%
Tables 60: Financial Performance Statistics of DCC Banks in India (₹ crores)
243
Chart 39: Total Income and Total Expenses of DCCBs 1999-00 to 2010-11(Table 60)
It is encouraging that, since 1999-00, the trend of total income of DCCBs is rising
faster than the trend of rise in total expenses in 2010-11 (Chart 29).
The Pearson product-moment correlation coefficient between Total income and Total Expenses is 0.976
Chart 40: DCCB Operating Profit over the years (Table 60)
There is a rising trend of increase in operating profit of DCCBs between 1999-00
and 2010-11 (Chart 30).
y = 826.06x + 8258.1 R² = 0.8154
y = 710.11x + 8565.1 R² = 0.8148
9,000
13,500
18,000
Total Income and Total Expenses of DCCBs 1999-00 to 2010-11
Total Income(c)TotalExpenses (g)Linear (TotalIncome (c))Linear (TotalExpenses (g))
y = 162.66x + 1592.7 R² = 0.6322
0
1,750
3,500
DCCB Operating Profit over the years
244
Chart 41: DCCB Net Profit over the years (Table 60)
There is a rising trend in the increase of net profit over the years 1999-00 to 2010-
11. However, there has been a seesaw performance over the years (Chart 41).
Chart 42: Comparison of increase in interest income and expense over the years (Table 60)
The rates of increase in interest income and income expense have been on a
converging trend between 2000-01 and 2010-11(Chart 42).
The Pearson product-moment correlation coefficient between Rate of increase in
interest income and Rate of increase in Interest Expense is 0.939
y = 115.95x - 307 R² = 0.4385
-400
0
400
800
1,200
1,600
DCCB Net Profit over the years
y = 0.0058x + 0.0445 R² = 0.0383
y = 0.0078x + 0.0225 R² = 0.0559
-15%
5%
25%
Comparison of DCCB increase in interest income and expense over the years
Rate of increase ininterest income
Rate of increase inInterest Expense
Linear (Rate ofincrease in interestincome)
Linear (Rate ofincrease in InterestExpense)
245
Though the figures in table 60 are used for further analysis of profitability of
DCCBs, at this stage, a few details are analysed below.
1. It is unequivocal from the above that the interest income (i.e., the interest
earned on the loans and advances sanctioned by the DCCBs) has registered
a continuous increase during the study period except during 2005-06 and
2006-07 during which it registered a downward change. It increased from Rs
11,023 crores in 2003-04 to Rs 14,619 crores during 2008-09 accounting for
an increase by Rs 3,596 crores or by 32.62%.
2. However, the year-on-year rate of change in the interest income differs from
one year to another as evident from Table 50. Further, though the rate of
increase has registered a continuous decline during the first two years, it
improved substantially during the next three years.
Chart 43: DCCB interest income over the years (Table 60)
The trend is that of increase in the interest income for DCCBs over the years
(Chart 43). There is a good fit between the trendline and data.
3. The pattern of change in ‘other income’ is, more or less, similar to that of
interest income (Chart 44). However, its share in the total income of the banks
is trivial accounting for about 10% of total income.
y = 725.91x + 7794.5 R² = 0.7808
8,000
13,000
18,000
DCCB interest income over the years
246
Chart 44: DCCB Other Income over the years (Table 60)
4. Interest expense (i.e., the amount of interest paid to the depositors by the
banks on the deposits accepted) has registered increase for all the years
except for 2005-06 during which it declined when compared to previous year
2004-05. Though the rate of increase in the annual interest expense during
2008-09 is 26.25% when compared to 2003-04, year-to-year change differs
from one year to another. This becomes clear from Table 50. However, what is
important is the overall increase in the rate of interest expense is much lower
at 26.25% than that of interest income at 32.62%.
y = 100.15x + 463.53 R² = 0.7186
400
1200
2000DCCB Other Income over the years
247
Chart 45: DCCB interest expense over the years (Table 60)
Interest expense over the years is showing an increasing trend (Chart 45). There
is good fit between the trendline and data.
5. However, in the case of provisions and contingencies, one can find the
incessant fluctuations year after year in the form of increase and decrease.
However, the banks have reduced the amount of provisions and contingencies
during 2008-09 to Rs 2,140 crores when compared to Rs 2,414 crores for
2003-04. The trend (Chart 46) shows an increase over the years, though there
is a seesaw performance.
Chart 46: Fluctuations in Provisions and Contingencies of DCCBs (Table 60)
y = 389.41x + 5607.7 R² = 0.6513
6,000
9,000
12,000
DCCB interest expense over the years
y = 46.709x + 1899.7 R² = 0.1831
1,400
2,200
3,000
Provisions and Contingencies of DCCBs
248
6. Another broad category of expenses of DCCBs viz., operating expenses
registered a perennial increase year after year. It increased from Rs 2,071
crores for 2003-04 to Rs 3,413 crores during 2008-09 accounting for an
increase by 64.8%, which is much higher than that of any other item of income
and expense. The trendline is showing an increase in operating expenses
over the years (Chart 57).
Chart 47: DCCB operating expenses over the years (Table 60)
7. As a result of the above changes, the amounts of profit (both operating profit
and net profit) registered both upward and downward changes (Chart 48).
Amounts of both operating profit and net profit declined during the mid years
of the study period viz., 2005-06 to 2007-08. However, during 2008-09, the
banks improved their profits substantially. It may be noted here that the
amount of operating profit is computed by considering total income and the
aggregate of interest expense and operating expense. Similarly, net profit is
determined by subtracting total expenses from the total income as follows.
y = 273.99x + 1057.6 R² = 0.9088
1,500
3,250
5,000
DCCB operating expenses over the years
249
Chart 48: DCCB Net Profit fluctuations over the years (Table 60)
8. Operating profit has increased from Rs 2,522 crores for 2003-04 to Rs 3,455
crores during 2008-09 representing an increase by Rs 933 crores or 36.99%.
However, during the six-year period, the amount of operating profit moved in
both the directions – increasing during 2004-05 and registering continuous
decline during the next three years (2005-06 to 2007-08). Again, during 2008-
09, they (i.e., DCCBs) succeeded in increasing their operating profit
substantially. Even the pattern of changes in net profit is similar, more or less,
to that of operating profit. There has been an increasing trend in the operating
profits over the years (Chart 49).
Chart 49: DCCB operating profit over the years (Table 60)
y = 115.95x - 307 R² = 0.4385
-400
0
400
800
1,200
1,600
DCCB Net Profit fluctuations over the years
y = 162.66x + 1592.7 R² = 0.6322
0
1,750
3,500
DCCB Operating Profit
250
State Cooperative Banks and District Central Cooperative Banks showed some
signs of improvement in profitability and asset quality in 2010-11, partly
attributable to the prudential regulatory reforms and implementation of the revival
package for the short-term rural cooperative sector65.