Funds management- A case study of Hosdrug service co-operative bank LTD NO.1064

Abstract

The study entitled Funds Management - A case study of Hosdurg service co – operative bank was undertaken with the objective of analysing the existing funds management practice of HSCB Ltd. For studying the Funds Management 10 years audited data from 2000 – 01 to 2010 – 11 were employed. Ratio analysis was employed covering four categories viz. Ratio’s reflecting Efficiency in Mobilization and Deployment, Operational Officiency and Other Ratios reflecting the profitability was used for the study.

The study found that during 2008 – 09 HSCB Ltd increased the face value of C class membership from 1 to 5. Due to this reason the Membership position of the bank reduced to 19541 in 2010 – 11 from 52576 in 2007 – 08. For the HSCB Ltd deposit constitutes 91 percent of the Net Working Capital of the bank. During the study period there was a substantial growth in the Deposits of the bank from 2378.32 lakhs in 2001 – 02 to 8510.01 lakhs in 2010 – 11 and these shows the banks Efficiency in Mobilization of resources. Credit to Working Capital ratio of the bank diminished from 85.41 per cent in 2006 – 07 to 79.59 percent in 2010 – 11. Reduction in the Credit to Working Capital is geared by the removal of Athulya Deposit scheme of HSCB Ltd.

Analysis found that Overdue and Interest Overdue is main problem faced by Hosdurg Service Co operative Bank. The Overdue position in Surety Loan and Over Draft is the chief factor responsible for increase in the Overdue position of HSCB Ltd. The Overdue of Surety Loan increased from 208.31 lakhs in 2006 – 07 to 313.07 lakhs in 2010 – 11 and the Overdue position of Over Draft increased from 303.20 lakhs in 2006 – 07 to 392.14 lakhs in 2010 – 11. The Interest Overdue to Demand increased from 16.30 per cent in 2001 – 02 to 23.90 per cent in 2010 – 11.

The optimal utilization of the funds of HSCB Ltd was constrained by the level of poor recovery position of Loans and Advances. The bank has to take appropriate policy regarded with proper recovery of Loans and Advances.