project report on fixed deposit in devgiri bank

7/22/2019 Project Report on Fixed Deposit in Devgiri Bank

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Vivekananda shikshan santha’s

VIVEKANAND ARTS, SARADAR DALIPSHIG

COMERCE & SCIENCE COLLEGE

AURANGBAD

Project Report

On

FIXED DEPOSIT

Submitted to

Dr . Babasaheb Ambedker Marathwada University

Aurangabad

By

Mr. BAWASKAR KISHOR BHIMRAO

B.B.A.VI SEMESTER

2011-2012Guided by

MR. GANESH DOKE.SIR

1



Vivekananda shikshan santha’s

VIVEKANAND ARTS, SARADAR

DALIPSHIG

COMERCE & SCIENCE COLLEGE

AURANGBAD

CERTIFICATE

This is to certify that project entitled fixed deposit Submitted by

MR.BAWASKAR KISHOR BHIMRAO is as per the requirement of

Dr.Babasaheb Ambedkar Marathwada university in the partial fulfillment of

BBA (Bachelor of business Administration) 6 IV Sem for the academic year

2011-2012

GUID DRICTOR

MR.GANESH DOKE SIR

DR.A.T.GAIKWAD

2



TO WHO OMSOVER IT MAY CONCERN

this is to Certify that Mr BAWASKAR KISHOR BHIMRAO of B.B.A

Student of department of Managemant studies Dr .Babasaheb Ambedkar

Marathwada university Aurangabad has undergone training and completed a

project on FIXED DEPOSITS of deogiri nagari co-oprative Bank

Aurangabad

he has carried out this project for deogiri co-oprative Bank date 23/1/2012

to 22/3/2012 in the spen of project duration his candidature was found to be

very

we wish him a bright futures

MANAGER

. MR.ABHAY

MANDLIK

3



DECLARATION

I hereby declarer that project worked entitled "production management to the

Dr. B. A.M University, Aurangabad , is a record of an original work done by

me under the guidance of Ganesh doke sir, faculty member, college institute

of management studies,

samarthnager, Aurangabad, and this project work has not performed the basisfor the award of any degree/ associate ship/ fellowship and similar project if

any

Mr BAWAKAR KISHOR BHIMRAO

BBA 3rd year

4



Acknowledgement

I like to thanks Mr. Gopal Balloj sir and all teachers of our

department who helped me directly or indirectly in completion of

this project. I would also like to thanks for their support and

cooperation during the tenure of the project.

Mr . BAWASKAR KISHOR

BHIMRAO

5



6



INDEX

SR.NO Content Pg.

No

1 INTRODUCTION

2 COMPANY PROFILE

3 INTRODUCTION OF PROJECT

TOPIC

4 SCOPE&OBJECTIVE

5 RESEARCH & METHODOLOGY

6 ANALYSIS OF THE PROJECT

7



7 LIMITATION OF STUDY

8 CONCLUSION&SUMMARY

9 BBLIOGRAPHY

Chapter 1

INTRODUCATION OF FIXED DEPOSIT

8



with invesmant avenves increasing the day it is quit easy to forget that untilthe reformera kicked off in 1991 indianhad very limited means of investing

their saving while it is true that we have net yet the money developed

economic ther are anumber of instrument today that were unheard of amidst

the lay investors just a short decade age .on the hand investors are still

straggling nature of some securities and on the others intermediaries are

trying to raise the investors awareness. Stok favorite such as fixed deposits

are men while enjoying a reneved burst of popularity .

the slump in the capitak market and larger amount o losses by investers in I p

o .are buta cauple of facters for this hunt for security by investors evenat the

lost of lower returns.the central bank R B I and the market regulatiotion S E B

I have been attempatiting to rein in operators from ashing in on this rush for

fixed deposit. In fact between 1994 and 1996 afew states like tamil nadu saw

literal sxplosiars off fixed deposits offers with promise of impossibal returns

like 36 percent to evan so percent per annum is some their saving go uping

smoke at the hand of such corporate entities .

it is only recentily that credit rating has been made mandatory for fixed

deposit raising exercises as werw prudential norms howeres the batterlesson

result in investors ignoting almost allother factors barring security while

investing ther saving thus the past two yerrs having seen a huges growth in

hand deposit and in fixed deposit levels of the batters segment of india. In this

segment we willreglotry past detaiks on the three main categories of fixed

deposits.

The fund can be used to pledge lone if a fix deposit maturity day is

approaching but a customer need fund urgently than the customers can apply

for pledge loan to avid interst loss.

9



The und can be withdrawn ahead of the marurity day If customer need fund

argently they can also apply for withdrawing ahead of the maturity day if the

customer want to totallywithdrowan the fund before the maturity day

fixed deposit refers to the service that customer set deposit term whan making

depositand deposit principle at one time .after whichthey can totally a

partially withdraw principle and interests. Higher

interst rate the interst rate of fixed deposits are higher than that of currant

deposit fixed deposit is a traditional wealth management tool the longer the

interest rate .

the account can set to re deposit customers can set re deposit term whan

makingdeposit and the principle and past tax interest will be automatically re

deposit term on the maturity day. .

The fund can be used to pledge lone if a fix deposit maturity day is

approaching but a customer need fund urgently than the customers can apply

for pledge loan to avid interst loss.

The und can be withdrawn ahead of the marurity day If customer need fund

argently they can also apply for withdrawing ahead of the maturity day if the

customer want to totallywithdrowan the fund before the maturity day

10



What are fixed deposit

Fixed deposits are loan arrangements where a specific amount of funds is

placed on deposit under the name of the account holder. The money placed on

deposit earns a fixed rate of interest, according to the terms and conditions

that govern the account. The actual amount of the fixed rate can be influenced

by such factors at the type of currency involved in the deposit, the duration

set in place for the deposit, and the location where the deposit is made.

The most unusual characteristic of a fixed deposit is that the funds cannot be

withdrawn for a specified period of time. In most cases, fixed deposits carry a

duration of five years. During that time, the money remains in the account

and cannot be withdrawn for any reason. Individuals, corporate entities, and

even non-profit organizations that wish to set aside funds and limit their

access to the funds for a period of time often find that fixed deposits are a

simple way to accomplish this goal. As an added benefit, the monies in the

account will earn a fixed rate of interest regardless of any fluctuations in

interest rates that apply to other types of accounts.

However, both these benefits can also turn into disadvantages under certain

circumstances. Because the money cannot be withdrawn until the duration is

complete, the funds cannot be used even in emergency situations. Changes in

the going interest rate may also rise to a point above and beyond the interest

rate applied to existing deposits. This means account holders are actually

earning less interest with fixed deposits than with other types of loans and

accounts.

While the interest rate on fixed deposits cannot be changed, there is

sometimes a way to work around the issue of obtaining use of funds in an

11

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emergency situation. At times, the lending institution where the fixed deposit

is placed may be willing to extend a separate loan to the account holder, using

the fixed account as collateral. While not ideal, this can at least make it possible to deal with the current financial crunch.

Fixed deposits are a credible way to make a return on investment that is

somewhat higher than a standard savings account. The use of fixed deposits

can also be helpful when working with various types of currency. By

establishing what is known as a Foreign Currency Fixed Deposit or FCFD, it

is possible to choose the type of currency involved in the deposit and lock in a

rate of interest. If the choice of currency is a good one, this means the

investor can enjoy a healthy fixed deposit currency rate for the duration of the

deposit and earn more than with a standard fixed deposit strategy. However,going with an FCFD does contain a slightly higher amount of risk, since the

funds deposited must be converted to the currency of choice and then

converted back when the deposit is fulfilled. If the currency did not fare well

in the interim, there is some chance of obtaining a loss, due to the changes in

the rate of exchange from the time the fixed deposit was activated until the

time the deposit is considered complete .

12

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http://www.wisegeek.com/what-is-a-savings-account.htm

http://www.wisegeek.com/what-is-return-on-investment.htm

http://www.wisegeek.com/what-is-a-savings-account.htm



Chapter 2

INTRODUCTION OF BANK

13



Deogiri Nagri Co- oprative Bank Was Established In 23th Jan 1984. The bank

have 18 Branches including their Training Centre. The modern DATA

centre , head office. All Offices are Air Conditioned , well equipped , fully

computerized and interconnected. Deogiri Bank is the first bank in

Marathwada to opt core banking pattern for its working. The bank is in the

process of establishing ATM all over the city to cater banking services to its

customer round the lock.

The concept of Deogiri Nagri Co- oprative Bank was originated by

Late Pralhadji Abhayankar & the bank came into being under the dynamic

leadership of Shri. Haribhau Bagade (Ex Minister), Late Shri.Jayantrao

Choudhari (Dhamangaonkar), Late ShriChandumalChotlani, Late Dr. V.G.

Gharpure, ShriSukhdevNawle, Mrs. KumudRangnekar, Shri S.G. Gokhle, Dr

M.U. Deshpande, Shri G.R. Rege took active part in establishing of the bank.

The first branch of the Bank was opened on 23th Jan 1985. At present the

bank has its area of operations in Aurangabad, Jalna, Ahemadnagar,

Parabhani&Jalgaon District. The Reserve Bank has opened all Maharashtra as

area of operation for us. The bank is also planning to tie up with state and

national players to expand its network.

The Bank has raised paid-up capital of 14.79 crores paid through its 33,000

Members. On 30-Jun-11 the Bank owns funds and reserves of 114.79 crores.

The bank has Deposits of 456.22 crores, Advances of 333.66 crores, thus

the total business is of 789.88 crores.

14



The CRAR of the bank is 11% and the Net NPA 0.20%. which is one of

thbest level. The performance of the Bank is the best in co-operative banking

sector.

Bank Profile

Deogiri Nagri Co- oprative Bank is largest bank in Marathwada. Any type of

financial problem for any sector of business bank supporting to them. Bank

has good Asset value and efficient staff for achieving their desire goal.

Deogiri nagri Co- oprative bank get permission from reserve bank of india to

launch four new branches in pune city.

In upcoming year bank use new and advanced technology, mobile van

service,pre printed cheque books facilities to the customer.for growing the

whole income of the bank bank made contract between new life insurance

companies.

Member and recover share capital is the power of co- oprative

organization.own fund is the economical capacity of any commericial

organization,increment in that fund it reflect confidence of member over the

bank.at time of year ending bank get the Rs.14.38cr share capital from 32688

member.comparism with last year performance between member & share

capital. 2687 member and recover share capital Rs.1.92cr it is extra.

According to banks rules and regulations member have to purchase 2500

Rs.share for membership.

15



Deogiri nagari Co- oprative bank have 100.06cr fund at the time of year

ending. It is extra camparing with last yaer performance. The amount of extra

fund is 4.21cr rupees in percentage 4.39% .bank move their maximum profit

in reserve fund from net profit and increase their goodwill. This is emblemof

bank management and efficiency.

In 2010-2011 bank started to provide fund supply in all sector, it is good for

bank growth for that purpose establishment of new branches, making

technical side perfect etc.getting that benefit bank made expenditure on it.

Because

this reason the bank had get Rs.7.22cr. net profit. 4.10cr profit is extra

compare with last year performance.

Capital availability

The ratio between total risk part of property and capital fund is called as

capital availability. In open economy the capital availability is the good for

people co- oprative bank system. successful management of risk and growth

in capital fund Deogiri nagari Co- oprative bank done 11.79% the ratio of

capital availability on dated 31th march 2011.

Accordinf to reserve bank of india’s rules and regulations it is compulsory

keep to maintain 9%

(Amount in lacs)

No. Particulars 31/03/2010 31/03/2011

A Tier-1 capital 3852.26 3033.98

B Tier-2 capital 782.39 1107.55

C Total capital(A+B) 4634.65 4141.53

D Total risk weight of property 31197.45 35120.07E C.R.A.R. 14.86% 11.79%

16



Depostie

Deogiri Nagari Co- oprative Bank have available Rs. 458.99cr

Deposite at time of report year ending. After using all facility and securities

which provided by bank people made their fixed deposite in bank, because of

that reason bank have increase their deposite fund for the rupees of 51.01cr.

which is 12.50% extra comparing with last year performance. To adjusting

with national level changeable commercial environment bank have change

deposites scheme and keep the cost of deposite is .5.75%.

For the purpose os deposite security bank have made insurance fromreserve bank of india’s Deposite department , installment of that insurance

bank has been fill regularly.

Deposite Mixture of bank on Dated 31/03/2011

(Amount in lakh)

Kinds Of Deposite 31/03/2010 31/03/2011

Current deposite 2191.89 5.37% 3042.31 6.63%

Saving deposite 10441.30 25.52% 13109.65 28.56%

Fixed deposite 28194.86 69.11% 29746.75 64.81%

Total 40798.05 100% 45898.71 100%

17



Loan

The total amount of loans are Rs.322.67crat the time of report

year ending. It is extra of Rs.40.49cr compare with last year

performance in percentages 14.35% .at the time of new loan

issue,bank were done loan investigation and risk management.

Deogiri nagari co- oprative bank follows all rules and regulations

regarding loan distribution to weak sector. The ratio of primary sector

loan at the time of year ending is 54.62% and another ratio of weak

sector loan distribution is 18.10% bank. Bank tries to distribute small

scale loan to public.

Recovery of non-performing assets

Deogiri nagari co- oprative bank made some rules and regulations for the

purpose of non performing assets recovery. The ratio between total loan and

non performing assets is just 0.20% on dated 31th march 2011. Last year the

ratio of is 0.37%. deogiri bank established director recovery committee at the

central level for controlling the ratio of non performing assets. Bank take

review of each and every branch regarding loan recovery. Bank achieve their

aim regarding loan recovery using Maharashtra State Co- oprative Act 1960

of section 101, securitization Act, Negotiable Instrument Act. Director,

Employee, member made very important role Behind this achievement, they

contribute their time for achieving loan recovery regarding non performing

assets. Bank set target for next financial year regarding non performing assets

and it’s ratio with total amount of loan is 0.00%.

Total of whole amount loan recovery plan and their account detail

18



(Amount in lacs)

Loan

Account No.

Distributed

Loan Amount

OTS

(remainingAmount)

OTS

Amount

Discounted

Amount

141 118.44 163.77 116.88 46.89

Classification of outstanding payment

The Ratio of Deogiri Nagari Co- oprative Bank regarding outstanding

payment on dated 31th march 2011 is 16.76%. which is mention infollowing Table.

(Amount in lacs)

No. Year No. Of

Account

Total

1. Lower than 1

year

3673 3210.44

2. Between 1-2 year 303 721.72

3. Between 2-3 year 145 326.694. Between 3-5 year 180 297.70

5. More than 5 year 193 851.50

Total 4494 5408.05

Information of legal action against outstanding payment holder

(Amount in lacs)

No. Particulars Loan holder Total amount

1. Notice from office 2381 1255.25

2. Notice from advocate 1462 2324.59

3. Cases to bring a charge but under

hiring(section 91,101)

71 148.85

4. Cases under hiring but not

awarded(section 91,101)

-- –

5. Awarded(section 91 , 101) 580 1679.36

19



Total 4494 5408.05

Investment

Deogiri Nagari Co- oprative bank have Total investment on dated 31th march

2011 is Rs.208.83cr.comparing with last year investment it is extra 7.52cr.

making good plan for loan recovery and trying its implementation it reflecting

with increasing bank liquidity and this is also useful for investment

increment. Bank liquidity management is on top at time of report year ending.

Bank follows CRR and SLR rules and regulation from the date of its

foundation. Minimum 25% amount is compulsory to invest in government

securities. Deogori nagari co- oprative bank invest in government securities

Rs.119.04cr in percentage 26.26% on dated 31th march 2011 at the time of

report year ending.

Human resource development

Deogori nagari co- oprative bank have its own training centre with

advance technology for the purpose of increase the employees effectiveness

and efficiency. Bank made such program for employees training according

following schedule.197 employees use this training centre.

No. Whoever Total No. of

Trainy

No.of

program

1. Deogiri nagri co- oprative bank

fulltime/halftime training program

197 14

Total 197 14

Insurance business

20



Bank made insurance from insurance companies to secure their securities

amount. Lot many insurance companies coming in that market follow allrules and regulation. Bank made such transaction with different insurance

companies and reserve bank of india give permission for that. Bank made

contract for general insurance between FUTURE GANERALLY

INSURANCE COMPANY PVT.LTD.in report year.

ComputerizationBank started SMS service for each and every account holder for their each

every transaction.in upcoming year bank start NET Statement facility for

every transaction. Bank make mutual contract between another bank for

ATM transaction. Using advanced technology bank tries gives good service

to the customer. Bank knows needs of customer.

Bank use computer technology with their perfect security. Bank provide

RTGS and ECS facility to customer for more than two lacs transaction with

ICICI bank.

Profit DistributionDeogiri Nagari Co- oprative bank earned net profit Rs.72199901.84 at the

report year ending, with last surplus net profit of Rs.72.02 including this total

net profit Rs.72199973.91 are available.

Profit Distribution Chart

No. Particulars Amount in rupees

1. Statutory Fund 18050000.00

2. Profit (12%) 16000000.00

3. Servent development fund 1000000.00

4. Member development fund 1500000.00

5. Building fund 20580624.00

6. Dharmaday fund 1000000.00

7. Investment up-down fund 10000000.00

8. Deffered asset reserve 4069276.00

21



9. Surplus net profit 73.91

Total amount 72199973.91

Account inspection and Investigation

Central government and state government made control over the

public co- oprative banks through the reserve bank of india, dwell

control on co- oprative banks from state and central government.these

two controller take inspection and account investigation of public co-

oprative banks. Deogiri nagari co- oprative bank appointed M.B.Jaju

company for Internal account investigation for accurate working

within the bank. Without this there are two more company made

investigation regarding accounts one is S.E.Kalantri and second is

Prassanna P.Kala and Associates. In 2010-2011 financial year Mr.Indapurkar and Mundada partner M.g mundada(statutory

Accountant) Aurangabad Made their Auditing And account inspection

and give bank one of the best rating. They are gave rating in

accountancy for best performance, rating A given to the bank.

Director Board And Its Different

Committees

Director Board and Different Committees of banking managementmade their role for effective control. They are arranging the meeting

on different issue. Bank appointed knowledgeable personnel within

their different committees. The Director Board give permission to

establish new vice committees. Using their knowledge regarding

banking sector bank achieve their desire goal. They decide their goal

for next financial year.

Deogiri Nagari co- oprative bank follows all rules and regulation of

reserve bank of India and responsible for member and its deposite

securities.

22



No. Particulars No. Of

Meeting1. Director Board Meeting 20

2. Loan Committee Meeting 18

3. Loan Recovery Committee Meeting 05

4. Worker Committee Meeting 05

5. Audit And Inspection Committee Meeting 02

6. Purchase Committee Meeting 06

7. Investment Committee Meeting 06

8. Assets liabilities management committee meeting 06

Banking regulation act 1949 section 29 and 31

Last Year Amount

March 2010

Life and Debtor Current year amount March 2011

39699053.00

101025977.36

25849315.35

19317692.75

146192985.46

• Cash in hand

(with ATM)

• Cash at bank

• State bank of

India

Notified banks

and

nationalized

banks

• Maharashtra

state co-

oprative bank

and district

centralized

bank (CASH)

• Other commercials

and co-

oprative

bank(CASH)

111451808.34

15898829.60

40576175.31

712695

86.00

167926

813.25

513195258.00

• Term deposits

in banks

• Maharashtra

state co-

oprative bank

328611576.00

23



689394454.00

1202589712.00

and district

centralized

banks termdeposits

• Nationalized

and other

commercials

banks term

deposits

555123962.00

883735

538.00

794911500.00

8500000.00

50.00

3010000.00

4125000.00

810546550.00

• Investment

(shares)

• District

centralized and

state co-

oprative banks

shares

• Trustee Org.&

other share

• Co- oprative

Org. Shares

• Aurangabad

district

centralized

bank • Maharashtra

co- oprative

bank. Mumb ai

• Apex

Bank,Mumbai

1190444000.00

7000000.00

50.00

3010000.00

4125000.00

120457

9050.0

0

0.00

0.00

• Pvt. Fund

Investment

• State

partnership

fund/fundinvestment

0.00

0.00

2199028300.46 232751

0987.2

5

613620.00

• Loan issued

• Short term loan

• Government

security shares

• National362949.00

24



33879457.00

97422689.41

29677911.11

686637712.59

9063452.00

8575762.00

3005550.59

2471952.00438965081.48

1310313188.18

security

• Other security

• Gold/silver security

• Term deposits

security

• Cash

credit/overdraft

• Mortgage

security cash

credit

• Default

guarantee payment

account

• IBP and Bills

Discount

• Advanced

against supply

bills

• L.C.

discounting

• Project

financing

44331103.05

130213650.87

13546991.61

889674881.52

8957889.00

1118332.00

3009365.59

535000.00442992687.48

1534742850.12

51097504.55

724262560.20

248427221.31

47905931.91

761490.95

1072454708.92

• Arrears

Rs.371430386.00

• Suspected and bad

debts

Rs.200795129.80

• Arrears of

director’s board

• Middle term

loan

• Higher

purchase/

vehicle

security

• Mortgage term

security

• Personal

guarantees

• Home

7047593803

662191643.83

422243415.61

42986008.16

725766.95

1198622772.58

25



253560335.64

185424488.00

438984823.64

2821752720.74

construction

• Other

• Arrears

Rs.162795044.00


debts

Rs.105287650.12

• Arrears of board of

director

• Long term loan

• Home

constructionloan

• Industrial &

Other loan

• Arrears

Rs.6579481.00


debts

Rs.22199694.75

• Arrears of board

of director

Total loan

282226681.66

211130327.00

493357008.66

322672

2631.3

6

5020781021.20 555423

3618.6

1

4132348.44

28870014.74

121627533.43526830.45

28282793.00

566107983.98

594390776.98

• Bills available

for recovery

• Dead stock,

furniture,

fixture• Building and

land

• Bank vehicle

• Interest

receivable

• On investment

• On loan

26963487.00

684301167.73

272372

2.75

327486

78.77

119397

677.68

216215

1.45

26



711264

654.73

6085394.29

6584.00

760317.53

1835584.00

778980.00

16590.00

1116107.00

0.00

346500.00

30000000.00

23513254.47

64459311.29

0.00

152509595.00

7885656.35

0.00

•Other property& Receivable

• Deposits

receivable

• Library books

• Stationary &

printing stock

• Deposits for

building

• Clearing

• Telephonedeposits

• Building rental

in advance

• M.S.E.B.

Deposits

• Tax receivable

• Advance tax

paid

• Other

receivable

• Branch co-

ordination

• Differed tax

assets

• Goodwill on

merger account

• Loss (if

Happened)

3012099.12

7077.00

1084504.59

1835584.00

1611681.00

201703.00

300000.00

548638.00

42779987.00

55620000.00

6441851.96

113443

125.67

461308

.36

156578871.00

591424

2.26

0.00

5995183087.88 Total 669892

8051.2

8

830490.00

64016380.00

LC

Bank gurantee

receivable

535885

.00

670877

09.00

27



Expenditure Detail of the year 01/04/2010 To

31/03/2011

Last Year

Amount March

2010

Detail Of expenditure Current year

amount

March 2011

291223367.00

52210.18

291275577.1

• Interest paid

• On Fixed

Deposits

• On Loan

263852182.00

631742.00

26448392

4.00

28



50114486.17

174375.00

6537336.00

1067462.85

1546328.00

1770955.78

69500.00

3750540.50

419675.00

616130.00

7909089.32

30000.00

7951108.04

2587515.360.00

168952.00

50587577.00

7528972.00

43058605.00

• Salary,

allowances,

providendfund,

gratuity, P.F.

Management

expenditure,

Bonus etc.

• Director Fess

&

allowances

• Rent , tax,

insurance,lig

hting

• Post

offices

,telephone &

fax charges

• Auditing

charges

• Stationary ,

printing and

advertising

• Legaladvisor fees

• Fixed

insurance

premium

• General

council

expenditure

• Commission

• Depreciation

• State co-oprative

education

fund

• Office

expenses

• Other

expenditure

• Election

expenditure

46560495.00

(4069276.00)

75805941.

36

174750.00

6568092.0

0

1645075.3

8

1774391.0

0

2060917.7

0

150000.00

4213995.5

0

409849.00

563426.00

8765356.0

0

30000.00

9760184.9

8

1494793.9

4

0.00

170566.00

42491219.

00

29



• Training

expenditure

• Tax• Current year

tax

• Deffered tax

0.00

0.00

494408.00

6913000.00

7407408.00

1971414.09

• Fringe

benefit tax

• Other

provision

• Suspected

and bad

debts

provision• Standard

assets

provision

• Investment

depreciation

• Goodwill on

merger

account

17500000.00

2065649.00

9923000.00

0.00

29488649.

00

1971414.0

9

428426458.29 Total 45202254

4.95

31227446.41 Net Profit 72199901.

84

459653904.70 Total 52422244

6.79

30



Profit And Loss Statement

LastYear

Amount

March

2010

Particulars of production Current yearamount March

2011

2848881

72.28

1611397

811.83

4460279

54.11

• Interest

received

• On Loan

• On

Investme

nt

350447467.81

133703203.86

4841506

71.67

3001633.

96

9359707.

20

1242568.

43

22041.00

• Commis

sion &

bill of

exchang

e

• Investiga

tion

charges

and other income

• Locker

rent

• Extra

refund

provisio

n

3342284

.99

1019367

8.69

1692459

.44

24843352.00

4596539

04.70

Total Income Rs. 5242224

46.79

0.00 Loss 0.004596533

904.70

Total 5242224

46.79

31



NOTES FORMING THE PART OF BALANCE SHEET AS AT 31st

MARCH 2011

AND PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED31st MARCH 2011.

• Significant accounting policies:

• Accounting convention:

The financial statements are drawn up in accordance with the

historical cost conventions and on the going concern basis. It

conform to the generally accepted accounting principles & practice

prevailing in the co- operative banks in India except otherwise

stated.

• Statement of compliance:

The consolidated financial statement of bank is prepared in

accordance with Indian accounting Standards.

• Investments:

• In accordance with the Reserve Bank of India directives applicable

to Urban co- operative banks, the bank has classified its investment

portfolio as on 31st march 2011 under held to maturity.

• Further, in complicance with the said the valuation of investments

under “Held to Maturity” category have been valued at acquisition

cost. Any premium on acquisition of security is amortized over the balance period of maturity.

• Advances :

• The bank has clasified advances into standard, doubtful and loss

assets in accordance with the guideline issued by Reserve Bank Of

India from time to time.

• Provisions on advances classified as sub-standard, doubtfuland loss

assets is made in accordance with the directives issed by the

Reserve Bank Of India from time to time. In addition, a general provision has been made on all standard Assets as per Reserve

Bank Of India directives.

• An additional provision of Rs.1654.76 lacs has been made for

BDDR over and above the provision as required by Reserve Bank

Of India directives.

32



• The overdue interest in respect of advances classified as Non-

Performing Assets is provided saparately under “Overdue Interest

Reserve:” as per the directives issed by the Reserve Bank Of IndiaProvision for loan Losses specific provisions for possible loan

lossesare based on a continuous review of the loans and

advancesportfolio and the parameters set the Reserve Bank Of India

Accordingly, specific provisions have been made as follows:

Sr. No. Particulars Amount (in Lacs)

1. Gross NPA 4225.04

2. Provison as per RBI Norms 2512.753. Additional Provision 1652.76

• Fixed Assets And Depreciation:

• Fixed Asset are stated at historocal cost except premises which

includes land and Buildings which are stated at revalued amount.

cost includes incidental expenses incurred on acquisition and

installation of the assets.

• Land and building were revalued during the financial year 2007-

2008 and asset Revaluation Reserve is created to the extent of revalued cost.

• Depreciation is calculated on written down value basis on fixed

assets. Depreciation charge on revalued amount is debited to the

revaluation reserve.

• Fixed asstes are depreciated at the rate considered appropriate by

the management. Details are listed below:

Assets Method Rate

Premises WDV 2.5%

Furniture & Fixtures WDV 10%

Vehicle WDV 15%

Electrical % Electronic Items WDV 25%

Computers WDV 33.33%

• Depreciation on fixed assets purchased during the year is charged for

the full year, if the assets is purchased and retained for 180days or

more, otherwise it is charged at 50% of the normal rate. No

depreciation is charged on fixed assets sold/disposed off during the

year as per generally accepted norms.

33



• Revenue Recognition

• Interest Income: In terms of the provisions of the accounting

standard-9 issued by Institute of Chartered Accountants of India onrevenue recognition, the interest receivable is recognized on

accrual basis. Interest ceases to be taken into revenue when the

recovery of interest and/principal is in arrears for three months or

more. Interest received on advances classified as non-performing is

accounted for on cash basis. Interest falling due and remaining

unrealised on non performing advances is credited to overdue

interest reserve account.

• Fees and commission Income: The bank earns fees and

commission income from a diverse range of services it provides to

its customers. This includes fees and commission income arisingon financial services provided by bank. Fees and commission

income other than fees receivable are recognized on cash basis.

Commission received in advance on bank guarantee is shown as

advance commission received.

• Rental income(Locker Rent):Rental income is recognized on accrual basis.

• Dividend:Dividends on investments are accounted for as and when received.

• Retirement Benefits to Employees:

• The bank’s contribution to providend fund is accounted for on

basis of contribution to the scheme and is charges to the profit and

loss account.

• The bank has made payment for gratuity to LIC based on

information received form LIC. During the year under audit the

bank has made premium payment of Rs.98.00 lacs towards gratuity

fund.

• The provision for leave encashment is made on accrual basis.

• Segment reporting:

According to accounting standard-17 on segment reporting issued by

the institute of chartered accountants of India, a segment is a

34



distinguishable component of the group that is engaged in providing

services (Business Segment) or in providing services within a

particular economic environment (Geographical Segment) whichsubject to risks and rewards that are different from those of other

segments. The AS-17 on segmental information is not applicable to

the bank.

• Taxation:

9.1 Current taxationCurrent tax assets and liabilities consist of amounts expected to be

recovered from or paid to the taxation authorities in respect of the

current as well as prior years. The tax rates and laws used to compute

the amount are those that are enacted or substantially enacted by the balance sheet date. Provision for taxation is made on the basis of the

profit for the year as adjusted for taxation purposes in accordance with

the provisions of the relevant statues.

9.2 Deferred Tax:As per the accounting standard-22 “accounting for taxes on income”

issued by institute of chartered accountants of India, Deferred tax

assets are recognized to the extent that it has become probable that

future taxable profits will allow the deferred tax reflects the impact

of current year timing differences between taxable income andaccounting income for the year and reversal of timing differences of

earlier years.

Deferred tax assets and liabilities are measured at the tax rates that are

expected to apply in the year when the assets are realized or the

liabilities are settled, based on tax rates and tax laws that have been

enacted or substantially enacted at the deferred Tax are as under:

10.Impact of Deferred Tax Assets:

Net Profit Before adjusting Deferred Tax Rs.68130625.84Deferred Tax Provision Rs.4069276.00

Net Profit after adjusting Deferred Tax Rs.72199901.84

Hence the net profit has increased by Rs.4069276.00 due to

provision of deferred tax but same is overstated due to excess

calculation.

11. GoodwillGoodwill is amortised over 5 years.

35



12. Events Occuring after the balance sheet date are taken care

of.

13. Directors Responsibility Statement:The Board of Directors takes the responsibility for the preparation and

presentation of these final Statements.

14. Reconciliation of various inter branch accounts is made up to

31st March 2011. The Bank is taking effective steps in adjusting the

outstanding entries.

15. Contingent Liabilities:Contingent Liabilities on account of bank guarantees and letters of

credit are as follows:

31.032.2010 Particulars 31.03.2011

64016380.00 Bank Guarantee 67087709.00

830490.00 Letter of Credit 535885.00

16. Previous years figure have been regrouped/ rearranged whenever

necessary to confirm to the presentation of the accounts of the currentyear.

Account related Information:

Sr.

No

Particulars 31/03/2010 31/01/2011

1. Capital to risk assets ratio 14.86% 11.79%

2. Investment:

• Book value

• Face value

• Market value

20131.26

18697.58

18850.79

20883.15

19546.65

19553.50

36



3. Advance against

• Real Estate

• Construction business• Housing

0.00

3480.99

3014.66

0.00

3484.17

3252.13

4. Advances against shares

debentures

Nil Nil

5. Advances to directors & their

relatives, companies, firms in

which they are interested

• Funds Based

• Non-funds Based7.01

0.00

0.00

0.006. Average cost of deposits 7.05% 5.75%

7. NPAs

• Gross NPAs

• Net NPAs

15.10%

0.37%

13.09%

0.20%

8. Movement in NPAs

• Towards NPAs

Opening balance

(+)Additions during the year

(-) reduction during the year

Closing balance

4346.17

4553.11

4637.26

4261.96

4262.02

1088.75

1125.71

4225.04

9. Profitability

• Interest income as

percentage of working funds

• Non interest income as


• Operating profit as


• Returns on assets

• Business (deposits +

Advances) per employees

• Profit per employees

8.23%

0.25%

1.54%

0.58%

392.13

1.81

8.17%

0.68%

2.47%

1.44%

457.11%

4.22

10. Provision made towards

• NPAs

• Depreciation in investment

0.00

69.13

175.00

99.23

11 Movement in provisions

• Towards NPAs 4020.76 4171.92

37



Opening Balance

(+) additions during the year

(-) Reduction during the year Closing balance

• Towards depreciation on

investments

Opening balance

(+) additions during the year

(-)Reduction during the year

Closing balance

• Towards standard assets

Opening balance

(+)additions during the year

(-) reduction during the year Closing balance

151.16

0.00

4171.92380.20

69.13

0.00

449.33

108.66

4.94

0.00

113.60

186.58

190.99

4167.51

449.33

99.23

0.00

548.56

113.60

20.66

0.00

134.26

12. • Towards NPAs

• Towards depreciation on

investment

• Towards standard assets

4171.92

449.33

113.60

4167.51

548.56

134.26

13. • Foreign currency assets

• Foreign currency liabilities

Nil

Nil

Nil

Nil

38



DEOGIRI NAGRI CO- OPRATIVE BANK LTD; AURANGABAD

STATUTORY REPORT:

• We have audited the attached balance sheet of DEOGIRI NAGARI

CO- OPRATIVE BANK LTD. AURANGABAD as at 31st march

2011 and also annexed thereto profit and loss account of the bank for the year ended on the date annexed thereto. These financial

statements are the responsibility of the bank’s management. Our

responsibility is to express an opinion on these financial statements

based on our audit.

• We conducted our audit in accordance with auditing standards

generally accepted in India. Those standards require that we

plan and perform to obtain reasonable assurance about whether

the financial statements are free of material misstatement. An

audit includes examining, on a test basis, evidence supporting

the amounts and disclosures in the financial statements. An

audit also includes assessing the accounting principles used and

significant estimates made by management, as well as

evaluating the overall financial statement presentation. We

believe that our audit provides a reasonable basis for our

opinion.

• further to our comments and observations contained in audit

memorandum in part A,B and C, we report that;

• We have obtained all the information and explanations,

which to the best of our knowledge and belief were

necessary for the purpose of our audit.

• In our opinion, proper books of account as required by Lawhave been kept by the bank so far, as appears from our

examination of those books.

• The balance sheet and profit and loss account dealt with by

this report, are in agreement with the book of accounts.

• In our opinion, and to the best of our information and

according to the explanation given to us, the said account

give a true and fair view, in conformity with the accounting

principles generally accepted in India.

• Other point as per part A,B And C our report:

39



• In case of balance sheet, of state of affairs of the

bank as 31st March 2011

• In the case of profit and loss account, profit of the bank for the ear ended on the date.

• For the year 2010-2011 audit class “A” is awarded to Bank.

For INDAPURKAR & MUNDADA

Place: Aurangabad Chartered Accountant

Date: 30/06/2011

Chapter 3

Fixed Deposit

40



Fixed Deposit Meaning In deposit terminology, the term Fixed Deposit refers to a savings account or

certificate of deposit that pays a fixed rate of interest until a given maturity

date. Funds placed in a Fixed Deposit usually cannot be withdrawn prior tomaturity or they can perhaps only be withdrawn with advanced notice and/or

by having a penalty assessed.

Fixed Deposit ExampleFor example, a Fixed Deposit will often be used by individuals, businesses

and financial institutions around the world as a means of storing their liquid

funds for a fixed period of time for future use. In the retail market, Fixed

Deposits are relatively safe investments when provided by insured financialinstitutions such as banks, savings and loan corporations and credit unions

that are duly regulated within the country in which they operate. Also, while

the term Fixed Deposit is in common usage in India and some other countries,

Fixed Deposits are also known as term deposits in countries like Australia,

Canada and New Zealand, as time deposits in the United States and as bonds

in Great Britain.

41



INTRODUCTION OF FIXED DEPOSIT There are several options available when it comes to where to make a

fixed deposit. One of the most common areas where a fixed deposit is offeredis the banks. All types of banks, be they public sector or private sector or even

co-operative banks, offer fixed deposits for their customers. This makes fixed

deposits one of the most accessible options for investors because of the fact

that most people have a bank account at some place or the other.

The second option for investing in a fixed deposit is with a financial

institution. There are several institutions that offer a deposit option. This can

include housing finance institutions or even other lending institutions that

offer deposits as a means of raising funds for their activities. It can also

include various non-banking finance companies that are trying to raise funds

through the route of deposits so that they can tap a larger investor base for

their fund requirements.

There is one more area where fixed deposits are offered; these are the

companies that seek to raise funds through this route. Various companies

from the manufacturing to the service sector need funds for financing their

various activities and they raise money through the route of company fixed

deposits. The features of all these deposits are the same; the only difference is

being the entity that is issuing the deposit, so there will be a difference in therisk element for the investor in these deposits.

Fixed Deposits in companies that earn a fixed rate of return over a

period of time are called Company Fixed Deposits. Financial institutions and

Non-Banking Finance Companies (NBFC’s) also accept such deposits.

Deposits thus mobilised are governed by the Companies Act under Section

58A. These deposits are unsecured, i.e., if the company defaults, the investor

42



cannot sell the documents to recover his capital, thus making them a risky

investment option

Term of deposit

A term deposit account is an account where the investor / depositor agrees to a fixed term and interest rate for locking their money away in an

account. These accounts offer more security on the rate of return that the

investor can expect when compared with high interest savings accounts.

The history behind the term deposit is that the bank offers a higher interest

rate and return to the depositor when there is certainty over the length of time

that the bank can have access to the depositor's money to re-lend to other

borrowers (and therefore make a profit). The bank rewards the secured term

from the depositor with a higher interest paid to the depositor.

Term deposit accounts are a 'fixed return' option to compare against high

interest savings accounts, however high interest savings accounts now feature

very comparable interest rates to those offered on term deposits (historically

term deposits offered far higher rates of interest than a traditional savings

account). The key difference is that the interest rates on savings accounts are

variable.

A term deposit is an account where you deposit your money and at the time of

deposit, you know in advance how much you will be paid in interest, and

when you'll be paid. When selecting your term deposit, you will see differentrates of interest available from the bank / institution for different terms. As an

investment vehicle, term deposits are easy to establish and quick to get

started, unlike an investment in property or the stock market which both have

significant lead time.

43



Interest Rates and Payments:

Term deposits typically feature a fixed interest rate, as opposed to the

variable rates of interest offered on high interest savings accounts which

move up and down in response to official interest rate rises. A fixed interest

rate means that you get a fixed return on your investment, regardless of

whatever happens with interest rates and the economy. This means that there

is more certainty and security in a term deposit compared to a savings

account, and less volatility than other investments in assets like property,

commercial property or the stockmarket.

For terms shorter than one year, your interest will be paid at maturity of the

term deposit. This means that for a 6 month term deposit, you will be paid

your interest payment at a date 6 months after your deposit, as well having

access to the original deposit amount at this date. This short term deposit is

not advantageous if you rely on a regular monthly income stream.

For term deposit terms longer than one year, you will have an option of when

you you would like to receive interest, from monthly options for interest

payments to semi annually.

44



The following options apply for payments of term deposits:

Less than one year: Maturity - your interest is paid at the end of the

term Longer than one year: Maturity - your interest is paid at the end of

the term Longer than one year: annually, semi-annually, quarterly

interest payment options are also available.

The payment frequency differs between term deposit providers so be sure to

pick an interest payment time frame that suits your requirement for

income. Both the banks and depositors view term deposit lengths in the same

way:

Short-term term deposits: one month deposit through to six month

deposits.

Long-term : term deposits over 12 months in length and up to

5 years, and in some instances up to 7 years.

We compare the term deposit options.

45



Features & Benefits of Term Deposits

One of the great benefits of the term deposits is that the bank / provider is

paying you for access to your money, so there are usually no establishment

fees or ongoing account fees.

However, there is always a catch with any financial product and the catch is

that if you break the term and leave early, there will be a penalty. If you need

to get your money out early, you will be charged either a penalty fee or

awarded only a reduced interest rate for the period instead of the interest rate

agreed to at the initiation of the term deposit. This will differ betweeninstitutions, so check the terms and conditions carefully. The key to a

successful term deposit is to be comfortable with the term that you are

committing to.

Use of Multiple InstitutionsTo access term deposit accounts, many providers don't require you to have an

account with that institution as you can nominate an existing account to have

your interest and balance paid into at maturity.

Automatic RolloverAt the conclusion of your term deposit, your term deposit provider can

automatically roll over your matured deposit to a new term deposit of the

same period as your original, at the new interest rate offered for that new

term.

Compound Interest on Some AccountsSome term deposit accounts offer monthly payments into the same account

with the benefit of compound interest on that amount and the balance, rather

46



than a fixed interest amount. This is only available to accounts over at least

one year in length as monthly interest payments are not available on terms

shorter than one year.

What you must know fixed deposit

A good invesmant strategy requris choosing the fixed mix safe and risk

right mix of safe and risky investments. Among safe investments, fixed

deposits, Fixed deposit, are the most popular today.

With Fixed deposit you deposit a lump sum of money for a fixed period

ranging from a few weeks to a few years and earn a pre-determined rate of

interest. Fixed Deposit are offered by both banks and companies though putting your money with the latter is generally considered riskier.

Advantage and disadvantage of fixed deposit

The main advantage is that Fixed Deposit from reputed banks are a very

safe investment because such banks are carefully regulated by the Reserve

Bank of India , RBI, the banking regulator in India.

Note that company Fixed Deposit isn't as safe as bank Fixed Deposit becauseif the company goes bankrupt you may lose your money. Make sure you

check the credit rating of a company before investing in its Fixed deposit.

You should be especially wary of companies which offer interest rates

significantly higher than the average to attract your money.

The other advantage of Fixed Deposit is that you have the option of receiving

regular income through the interest payments that are made every month or

quarter. This option is especially useful for retirees.

47

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On the flip side, a fixed deposit won't give you the same returns that you may

get in the stock markets. For instance a stock-portfolio may rise 20-30 per

cent in a good year whereas a fixed deposit typically earns only 7-10 per cent.

A fixed deposit also doesn't offer protection against inflation. If inflation rises

steeply during the maturity of the Fixed Deposits your inflation adjusted

return will fall.

Say, for example, the inflation when you deposited the money at a fixed

return of 8 per cent per annum is 3 per cent. Now when your Fixed Deposit

matures say after 2 years, the inflation increases to say 5 per cent.In this case,

your inflation adjusted returns is only 3 per cent (8-5). Had inflation remained

at 3 per cent by the time your deposit matured, your real rate of return would

be 5 per cent (8-3).

Interest rates on Fixed Ddeposit

The rate of interest on Fixed Deposit varies according to the maturity

with longer deposits generally earning a higher interest rate. Here are theinterest rates offered by deogiri Bank on their Fixed Deposit. Note that Fixed

Deposit vary quite a bit from bank to bank so you should search around

before investing.

Interest paid on a fixed deposit is paid either monthly or quarterly according

to the investor's choice. So if you invest Rs 3 lakhs in a one year fixed deposit

which pays 8 per cent you can earn Rs 2,000 of interest every month or Rs

6,000 of interest every quarter .

Effective Return

Before you invest in Fixed Deposit you need to understand the concept of

effective return which is higher than the rate of interest on the Fixed Deposit.

Effective return is relevant if you choose to reinvest your interest every year

which means that you will be earning compound interest.

48

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For example suppose you invest Rs 1,000 in a fixed deposit with 8 per cent

interest which is paid quarterly.

Returns of fixed deposit

In the first quarter (after 3 months) you will earn an interest of Rs 20 which is

re-invested and continues to earn interest in the remaining three quarters.

Similarly the interest you earn in the second (after 6 months) and third quarter

(after 9 months) is also reinvested and earns interest.

At the end of the year because of compound interest you will receive Rs

1,082.4 meaning that your effective return is 8.24 per cent rather than 8 per

cent.

break a fixed deposit?

Breaking a fixed deposit means withdrawing the money before the

maturity expires. This may be necessary if you urgently require the funds or if

there are better investment opportunities elsewhere. You will have to pay a

cost; for instance you may receive an interest rate 1 per cent lower than the

stated interest rate on the Fixed Deposit.

For example if you invested in a 3 year Fixed Deposit with 9 per cent and you

break it after two years you may receive only 8 per cent interest for those two

year instead of 9 per cent.

An alternative to breaking a fixed deposit is taking a loan against the FD.

Such loans are quite easy to obtain with amounts ranging up to 90 per cent of

the principal and accumulated interest.

49



alternatives to Fixed deposits

Obviously mutual funds and stocks can offer higher returns but the main issueis whether there are low risk investment products which offer a better return

than Fixed Deposit. Many financial experts believe that fixed maturity plans

(FMP) offer exactly such a superior alternative.

BENEFIT OF FIXED DEPOSIT. The major benefit of fixed deposits is its higher interest rate when compared

to interest rate in a regular savings account

High Intere No deduction of Income Tax at source up to Rs 5,000 p.a.

Short-term deposits.

Lock-in period is only 6 months.

No Income Tax is deducted at source if the interest income is up to Rs 5,000

in one financial year .Investment can be spread in more than one company, so

that interest from one company does not exceed Rs. 5,000.

Company Fixed Deposits are non transferable that means there is no fear of

Fixed Deposit receipt being stolen. In case it falls into wrong hands ,it cannot

be misused. The Fixed Deposit holder in such a case should write to the

company which shall issue duplicate deposit receipt upon execution of an

indemnity and cancel the previous one.

Further, advantage of investing in company fixed deposits is that one can

analyse the company before investing in it because companies accepting

deposits are old-established reputed companies with proven track records.

Recently, nomination facility has been introduced in company fixed deposits.

50



Types of Fixed Deposits

Fixed Deposits require a customer to place cash in a savings account held

with a financial institution for a particular time frame at a given interest rate.

Early withdrawals from Fixed Deposits tend to result in a significant penalty.

A holiday account, also called a Christmas club account, is a type of fixed

deposit account.A fixed deposit, as its name implies, is a fixed sum of money that is held in a

savings account for a pre-decided period of time--earning a fixed rate of interest.

The time period for a fixed deposit varies from 15 days to 1,095 days (three

years) and its interest rate varies between 3 percent and 7.5 percent. A fixeddeposit account typically yields a greater interest rate than a regular account,

owing to its fixed time period. Fixed deposits are also called time or term

deposits.

Certificate of Deposit

A certificate of deposit (CD) is a type of fixed deposit account that can

be purchased in varying amounts from a credit union, traditional bank or

other depository institution. A CD is a commercial paper that confirms the

monetary value of the deposit made, its maturity date and the interestapplicable on the amount loaned. Certificates of deposit mature in one month,

three months, six months, 12 months (one year), 36 months (three years) and

60 months (five years). Interest rates accrued on certificates of deposit are

quoted on a yearly (annual) basis.

Bank Term Deposit

51



A revolving term deposit renews itself automatically for another term of an equal

length after its loan period expires. Depositors can put money in a revolving term

account through a cashless transfer from an existing account or by direct transfer.The terms on revolving fixed deposits range between one week to 12 months

Unchanging term deposit

An unchanging term deposit, also called a single term deposit, does not renew

automatically after its maturity date. An unchanging fixed term deposit can

be opened from one month, three months, six months, 12 months, 24 months

and 36 months.

Holiday Account

A holiday account, also called a Christmas Club account, is a special type of

fixed term deposit that allows a depositor to put aside, and add, small

denomination funds till the account matures. Cash cannot be withdrawn from the

account till it reaches its expiration date. A holiday account can be thought of as

a short-term savings account that secures a depositor during a holiday season.

Some financial institutions and banks require a minimum initial deposit before

they can open a holiday account. Christmas club accounts accrue monthly

interest, the entire amount of which is paid when the account matures, typically

right before Christmas.

Different types of fixed deposits

Consumers and companies throughout the world use Fixed Deposits to

save money for future use from time frames varying between one month and

several years. The term Fixed Deposit is especially popular in India for this

retail financial product, but they are also called Term Deposits .

companies provide fixed deposits

Financial institutions like banks and savings and loan corporations provide

Fixed Deposits and they are

required to follow the applicable banking regulations in the countries in

which they operate.

Fixed deposit in seving account

52



Although the terms of specific Fixed Deposits can vary significantly

among financial institutions and countries, Fixed Deposits generally differ

from checking and savings accounts because they cannot be used as money by allowing the account holder to make withdrawals without incurring a

significant penalty. They also differ from such accounts by having a fixed

maturity date after which funds are either returned or rolled over

Risk of fixed deposit

Substantial investment security is provided by Fixed Deposits held with

reputable and insured financial institutions, but as a result of this perceived

lack of risk, they usually only offer a rather low nominal rate of return or

interest to the holder on deposits.

Interest rates available on Fixed Deposits tends to be higher than with

regular savings accounts since funds are not readily available until maturity,

but returns are usually lower than those available with riskier investmentslike some corporate stocks and bonds.

53



Time deposit

A Time Deposit requires the placement of cash in a savings account at a fixed

rate of interest for a certain

term or time period. Funds generally cannot be withdrawn from a Time

Deposit prior to the end of its

term without incurring a penalty.

Type of time deposit

Time Deposits are used around the world by consumers and businesses

to save money for use in the future. Although Time Deposit is the common

term used for such accounts in the India , they are also known as Term

Deposits in India , as Bonds in the Britain and as Fixed Deposits in countries

like India. Financial institutions offering Time Deposits to retail clients are

usually required to follow the applicable banking regulations in the country

in which they operate.

provide time deposits

Time Deposits can be placed with a retail financial institution like a bank

or credit union, and the risk involved in doing so is quite low if the funds are

deposited with a member of a deposit insurance organization like the financial

deposit in India

54



guarantees time deposits?

In the India , funds deposited in Time Deposits are protected up to acertain amount by the financial deposit in India when the Time Deposit is

made with a financial institution that is also an F D I member.

risky are time deposits

A variety of Time Deposit maturity dates ranging from one month to

several years are available from financial institutions. Also, because of the

requirement to leave Time Deposit funds alone for a period of time or pay a

penalty, Time Deposits tend to pay out a higher rate of interest than normal

savings accounts. Nevertheless, this return is usually considerably less thancan be obtained by investing in riskier products like corporation stocks or

bonds

6 month deposit

A 6 month term deposit is often referred to as a short term investment

due to the short time horizon of less than 1 year. For a period of fixed product

6 months, major banks can follow or anticipate central banks whendetermining the rates they publish for depositors. In countries such as India

who offer 'term deposits' as savings products from banks, the Reserve Bank

of India issues guidance from its meetings and rate decisions indicating

reasons for increasing, lower or keeping the same interest rates. These

decisions have a major impact on what rates India banks publish.

55

http://www.deposits.org/dictionary/term/time-deposit/

http://www.deposits.org/dictionary/term/time-deposit/



Advantage of fixed deposit

1 A Fixed Deposit Account is one in which the customer deposits a big

sum of money (Usually a few thousands and upwards. There is actually

no limit to the amount of money you can deposit in a FD) for a fixed

2 A Fixed Deposit is an agreement between a customer and bank

wherein the customer agrees to deposit a fixed sum of money for a specific

duration of time. The bank in return accepts the deposit and...

3 No. As long as it can be cashed in at any time, it is still liquid

and therefore a current asset. If it cannot be cashed in before maturity, it

would be classified as Other Non-Current Assets.

4 If deposited into Fixed deposit its more safe for you. Its interest % is

high when compare with other deposits like SB (Saving Bank A/C) &

Current A/C. If you're a senior

Disadvantages of fixed deposit

56



1 Well one disadvantage is being 'hooked' into spending inordinate

amounts of time in front of a screen editing spelling and grammar mistakes

that people make when asking questions here. (lol) Another

2 if the interest rate increases, they will not increase your. it will be based

on the initial rate

3 The major disadvantage of a fixed deposit is that you cannot

withdraw the amount instantly when the need for money suddenly arises.

Another disadvantage of fixed deposits is that it is prone to

4 You can't withdraw the deposited money back until the terms of

deposit completes.

for example.: You deposit your money into the FD for 5 years upto

Rs.50,00,000/-. After 2 years of deposit, U need the deposited money in FD,

you can't withdraw back without completion of the deposit amount

Chapter 4

OBJECTIVE OF FIXED DEPOSIT

57



To know the fixed deposit position of R.B.I

To identify the position of fixed deposit on total deposit

To comparing fixed deposit of R.B.I with total commercial bank and Indian

Bank Ltd. to know its actual financial position and performance

To sketch the trend of fixed deposit of R.B.I

To see how far the bank is able to utilize the collection deposit

To identify the problem in fixed deposit

58



To provide suggestion and possible guideline to improve the bank fixed

deposit position based on the finding of the study

SCOPE OF FIXED DEPOSITS

59



In sense of profitability then invest less in fixed deposit try to invest in

shares if you are a good player in share market.

I am a central govt servant, my monthly net salary is 17500, how can i save

the tax by investing. and what kind OF benefits get from govt. pl help me

At present, there is no scope of short term investment in equity based mutual

fund. Go for atleast two or three years please. Market is at it peak lev.

I really appreciate tht you have taken an initiative 2 invest & grow......But at

least take a look while choosing a category to post .

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http://qna.rediff.com/questions-and-answers/i-am-a-central-govt-servant-my-monthly-net-salary/14768864/answers/14769061






As crr is hiked money will be scarce with bank so who ever wants to take

loan it will be dearer but without increasing fixed deposit rate so people

Chapter 5

METHODOLOGY

OF

THE STUDY FIXED DEPOSIT

61



Research Design:

The first step of the study is to collect necessary information and data

concerning the study of R.B.B fixed deposit by contacting the concern staffs.

The task will be fulfilling by the collection of secondary data and Primary

data and various published information regarding this context. Then the

collected data will be presented and analyzed systematically to fulfill the

objective of the

A deposit of money that pays higher interest than a savings account but

imposes conditions on the amount, frequency, and/or period of withdrawals.

Also called time deposit.

Receipt issued by a depository institution (such as a bank, credit union, or a

finance or insurance company) to a depositor who opens a certificate ac...

62

http://www.businessdictionary.com/definition/deposit.html

http://www.businessdictionary.com/definition/money.html

http://www.businessdictionary.com/definition/pay.html

http://www.businessdictionary.com/definition/interest.html

http://www.businessdictionary.com/definition/savings-account.html

http://www.businessdictionary.com/definition/condition.html

http://www.businessdictionary.com/definition/amount.html

http://www.businessdictionary.com/definition/frequency.html

http://www.businessdictionary.com/definition/period.html

http://www.businessdictionary.com/definition/time-deposit.html

http://www.businessdictionary.com/definition/deposit.html

http://www.businessdictionary.com/definition/money.html

http://www.businessdictionary.com/definition/pay.html

http://www.businessdictionary.com/definition/interest.html

http://www.businessdictionary.com/definition/savings-account.html

http://www.businessdictionary.com/definition/condition.html

http://www.businessdictionary.com/definition/amount.html

http://www.businessdictionary.com/definition/frequency.html

http://www.businessdictionary.com/definition/period.html

http://www.businessdictionary.com/definition/time-deposit.html



Fixed Deposit is the most common form of savings all over the world,

specially in India. A Fixed Deposit involves locking a certain amount of

money for a certain time period with a government approved institution, itcan be a bank or a corporate offering fixed deposits to raise money for its

business, etc

Prmaary data

1 Source of data

The various data require for the study is collected from concern authoritiesi.e. R.B.B. and Nepal Rastra Bank. Data required is collected through primary

data and secondary data. Primary data is collected from concern authority by

asking them question or by taking the interview. Secondary data is collected

from the annual report, banking and financial statistics, quarterly economic

bulletin, Papers and magazines, which were published, by R.B.I

2 Data Gathering and Processing Procedure:

63



All the necessary data were collected on various issues from R.B.I and N.R.B.

This study is based on secondary data but interview techniques has also been

used to collected information on the fixed deposit of the bank. The collecteddata are processed by tabulating and arranging in a required form for the

sequential analysis of data.

3 Tools Used for Analysis:

Then an attempt has been made to analyze the tabulated data to review the

financial aspect of R.B.I. For the analysis of data the various statistical tools

like percentage change, bar diagrams, pie - chart, time series and correlation

will be taken in to use. In this regard, the analysis will be mainly based on

financial aspect.

Secondary data

1 Fixed deposits are money deposited by the customers for a fixed

period, which range from 1 week to 5 years. Such as 1 week, 2 week, 3

months, 6 months, 9 months and 1 to 5 years. Fixed deposit is also known astime deposit or time liabilities.

2 Fixed deposit is the main source of funds. Bank uses this sum of

money in its investment activities. Out of the total deposit higher percentage

comes from fixed deposit account as it most stable of all deposit. As it is

permanent sources of funds, bankers use this fund to long-term investments,

which gives higher return to the bank. Bank does not need to maintain higher

64



cash balances to meet the demand of such account holders because banks

have fixed the expiry of the account per head.

3 In Nepal, any fixed deposit can not be withdrawn before the maturity

period. However, upto 90% deposit can be withdrawn as loan. The bank will

charge 2% more than the interest paid to the depositors for granting loan

against deposit. The bank pays a higher interest on such deposit. But interest

provide by the bank depends upon its time duration. Bank repays the fixed

deposit principal together with interest after maturity period.

4 The best fixed deposit interest rate can come from a different bank

than the one you're currently using, so you might want to check into that also.

Fixed deposits can be great for saving money when you don't think it's possible or simply are having a tough time saving period. It's definitely

something to think about right now with the economy and the threat of no

more Social Security - you should always have a back up plan.

Features of the fixed deposits

- Fixed deposit was received by bank for certain period.

- The bank is free to make use of this money for granting loans and

advances

65



- Any fixed deposit can not be withdrawn by issuing cheque.

- Bank pays a higher interest on such deposit in comparison with other

deposit.

- Any additional amount can not be allowed to deposit in the fixed

deposit account before the maturity period.

- Fixed deposit account is automatically closed once the deposit matures.

- Bank repays the fixed deposit to customer principal together with

interest after maturity period.

5 Rules for Fixed Deposit

In this article I will be writing about the important points to consider while

opening the fixed deposit account. I have already published many articles

explaining the fixed deposit account and the tax savings involved with the

fixed deposit schemes. This post is intend to list some of the key points which

you must be aware before opening the fixed deposit account. I hope you will

like the post and will be more informative. Please post your feedback and add

if you have any points in your mind. If you like the post, subscribe to our

future articles here.

1. Split Your Fixed Deposit

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You have to split the fixed deposit to avoid the TDS(Tax deduction at

Source). If the total interest is more than Rs.10000 in a branch for the specific

year, then TDS must be paid. To avoid that please split the fixed deposit and

invest in the different banks.

2. Plan the Tenure

It is important to plan the number of years you want to keep the deposit.

Banks will charge as penalty if you are foreclosing the deposit account.

Please ask the banker for penalty applicable for the foreclosing.

3. Appoint a Nominee

Always appoint a nominee for your fixed deposit to avoid the hassle free

release of amount after you. If you are not appointing any nominee, they will

have to bring any of the heirs proof certificate to receive the money.

4. Check the compound interest policies

This is one of the important consideration while opening a fixed depositaccount. When you hear the rate of interest is 8.0% p.a., first thing you have

to ask whether it is compounded quarterly, half-yearly or yearly. If the

interest is compounded quarterly, then the return rate of interest will be

potentially more than the actual one.

5. Learn fixed deposit investment

If you are not aware that the fixed deposit savings can be used for tax

benefits, please learn about the tax savings on fixed deposit. It has limitation

of Rs.100000 under section 80c. Might be useful if you are looking for the

same one.

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http://www.thinkplaninvest.com/2009/04/top-5-rules-for-fixed-deposit-investment/www.thinkplaninvest.com/2009/01/tax-savings-on-term-depsoit-under-section-80c/%20

http://www.thinkplaninvest.com/2009/04/top-5-rules-for-fixed-deposit-investment/www.thinkplaninvest.com/2009/01/tax-savings-on-term-depsoit-under-section-80c/%20



Chapter 6 DATA ANALYSIS AND INTERPRETIAT

CHART

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Fixed deposit in deogiri bank

31/3/2010

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currantdeposit5.37%

seving

deposit25.52%

fixeddeposit

69.11%

currant deposit

seving deposit

fixed deposit

Fixed deposit in deogirin bank

70



31/3/2011

currant

deposit6.63%

seving

deposit

28.56%

fixed

deposit

64.81%

currant deposit

seving deposit

fixed deposit

71



DEPOSIT SCHEM OF DEOGIRI BANK

DEPOSIT SCHEM INTERST RATE

2011 DEC 2012

Term Deposit Public

Co-op

Societies and

banks

Senior

CitizenWidow

Handicapped/

Blind

15 Days To 45Days

5.00 5.50 5.00 5.00 5.00

46 Days To 90

Days5.50 6.00 5.50 5.50 5.50

91 Days To 180

Days7.25 7.75 7.25 7.25 7.25

181 Days To

Less Than 13

Months

7.75 8.25 7.75 7.75 7.75

Only for 13

Months11.50 12.00 12.00 12.00 12.00

Above 13

Months9.25 9.75 9.75 9.75 9.75

Special Scheme

555 Days10.25%

Special Scheme

655 Days 10.50%

Unmarried Girls

Below 25 Years11.00%

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Chapter 7

LIMITATION OF STUDY

73



Taxation in case of debt funds is more investor friendly when compared

with fixed deposits especially for the investors in higher tax bracket

In the short term investment horizon, investor gets the benefit of lower

dividend distribution tax in debt funds

In the long term investment horizon, investor gets the benefit of

indexation in debt funds

Debt Funds are highly liquid as the amount invested can be redeemed

indays unlike fixed deposits where money gets locked in for a fixed

period of tim

Though the pre tax returns are in the same range of 8-9%, but variationcan be seen in post tax returns. Let us discuss two scenarios:

Debt Funds are more liquid than Fixed Deposit

Debt Funds deliver better post tax returns when compared with fixed

deposits

In the short term and long term investment horizon, investor earns better

post tax returns by investing in debt funds.Fixed depositgives limited but

assured returns.Stocks can give very high returns or even very high losse

Debit card is a facility to withdraw your own deposi ed money in the bank.

Credit card as the name denotes, you make advance arrangement with a bank

I think there is no certain limit but one loses the interest on such a big amount

as the interest rate is very low in savings bank ac and hence he lo.

Loan is a fixed amount and to be paid in a certain period OF time where as in

cash credit a limit is fixed and u have to be in that limit always a...

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Chapter 8

SUMMARY&CONCLUSION

75



Fixed deposits are loan arrangements where a specific amount of funds is placed on deposit under the name of the account holder. The money placed on

deposit earns a fixed rate of interest, according to the terms and conditions

that govern the account. The actual amount of the fixed rate can be influenced

by such factors at the type of currency involved in the deposit, the duration

set in place for the deposit, and the location where the deposit is made.

The most unusual characteristic of a fixed deposit is that the funds cannot be

withdrawn for a specified period of time. In most cases, fixed deposits carry a

duration of five years. During that time, the money remains in the account

and cannot be withdrawn for any reason. Individuals, corporate entities, andeven non-profit organizations that wish to set aside funds and limit their

access to the funds for a period of time often find that fixed deposits are a

simple way to accomplish this goal. As an added benefit, the monies in the

account will earn a fixed rate of interest regardless of any fluctuations in

interest rates that apply to other types of accounts.

However, both these benefits can also turn into disadvantages under certain

circumstances. Because the money cannot be withdrawn until the duration is

complete, the funds cannot be used even in emergency situations. Changes in

the going interest rate may also rise to a point above and beyond the interest

rate applied to existing deposits. This means account holders are actually

earning less interest with fixed deposits than with other types of loans and

accounts.

where the While the interest rate on fixed deposits cannot be changed, there is

sometimes a way to work around the issue of obtaining use of funds in an

emergency situation. At times, the lending institution fixed deposit is placed

may be willing to extend a separate loan to the account holder, using the fixed

account as collateral. While not ideal, this can at least make it possible to deal

with the current financial crunch.

Fixed deposits are a credible way to make a return on investment that is

somewhat higher than a standard savings account. The use of fixed deposits

can also be helpful when working with various types of currency. By

establishing what is known as a Foreign Currency Fixed Deposit or FCFD, it

is possible to choose the type of currency involved in the deposit and lock in a

rate of interest. If the choice of currency is a good one, this means the

investor can enjoy a healthy fixed deposit currency rate for the duration of the

76



deposit and earn more than with a standard fixed deposit strategy. However,

going with an FCFD does contain a slightly higher amount of risk, since the

funds deposited must be converted to the currency of choice and thenconverted back when the deposit is fulfilled. If the currency did not fare well

in the interim, there is some chance of obtaining a loss, due to the changes in

the rate of exchange from the time the fixed deposit was activated until the

time the deposit is considered complete.

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Chapter 9

BIBLIOGRAPHY

www.yahoo.com

www.google.com

Referance book

deogiri nagari sahakari bank ltd aurangabad

adderss: arth complex kesrsingpura, adalt rode aurangabad

78

http://www.yahoo.com/

http://www.google.com/

http://www.yahoo.com/

http://www.google.com/

project report on fixed deposit in devgiri bank

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