Profitability of farmers service co-operative banks in mukundapuram taluk of Thrissur district: an inter bank comparison

Abstract

The study entitled “Profitability of Farmers Service Co – operative Banks in Mukundapuram Taluk of Thrissur District – An Inter Bank Comparison” was undertaken with the objective of evariating the inter bank variability of profitability of Farmers Service Co – operative Banks (FSCBs) in Mukundapuram Taluk of Thrissur District and determining the factors affecting profitability of the Farmers Service Co – operative Banks. The study was conducted in two Farmers Service Co – operative Banks in Mukundapuram, Taluk, viz., Kodakara Farmers Service Co – operative Bank (KDFSCB), Kuttikad Farmers Service Co – operative Bank (KTFSCB), for a decade from 1995 – 1996 to 2004 – 2005. The study was based on the secondary data collected from the annual reports and audit reports maintained by the banks. The methodology used for the analysis of the present study is the decomposition model proposed by Das (1999). For finding the inter bank variability of profitability of banks, coefficient of variation is used and correlation coefficient is computed for the detailed analysis of identifying the factors affecting the profitability of banks.

The analysis has revealed that Kodakara Farmers Service Co – operative Bank (KDFSCB) is a well performing bank with comparative higher consistency in profit average profitability and high return on advances and investment inspite of below par performance in certain indicators. The bank realizes human resources as a vital factor and gives at most significance for its development. The analysis revealed that the banks with lowest burden could achieve highest profitability and banks with high burden recorded lowest profitability. Banks are suffering from high burden levels which is the root cause of their low profitability. The Kuttikad Farmers Service Co – operative Bank (KRFSCB) has got highest burden which retard its profit to a great extent.