CHAPTER - shodhganga.inflibnet.ac.inshodhganga.inflibnet.ac.in/bitstream/10603/90253/11/11_chapter-4.pdf · Pawan Chakki and Bibi ka maqbara. Aurangabad district is a great center

CHAPTER – IV

IMPACT OF PRIORITY SECTOR LENDING ON

URBAN CO-OPERATIVE BANKS

A) INTRODUCTION

B) BACKGROUND OF AURANGABAD AND

JALNA DISTRICTS

C) FINANCIAL POSITION AND

PERFORMANCE OF URBAN CO-

OPERATIVE BANKS IN AURANGABAD

AND JALNA DISTRICTS

D) ANALYSIS OF PRIORITY SECTOR

LENDING DATA OF SELECTED URBAN

CO-OPERATIVE BANKS.

E) ANALYSIS OF MAJOR FINANCIAL

INDICATORS OF SELECTED URBAN CO-

OPERATIVE BANKS.

F) STUDY OF RECENT PERFORMANCE OF

THE SELECTED URBAN CO-OPERATIVE

BANKS.

CHAPTER NO. IV

IMPACT OF PRIORITY SECTOR LENDING ON

URBAN CO-OPERATIVE BANKS

The Urban co-operative banks have passed through many phase since

the enactment of the agriculture credit co-operative Societies Act, 1904.

Presently the Urban co-operative banks are facing number of problems

mainly problem of overdue, increasing amount of NPA, competition with

foreign, private and public commercial banks, political interference, lack of

trained personnel, low profitability etc. These banks are required to lend

60% of their total lending to priority sector. 25% of the priority sector

lending shall be given to weaker section of the society. Some experts

believe that the priority sector lending is the one of the major cause of the

poor performance of the number of urban banks.

The present chapter is an attempt to study the impact of priority sector

lending by the urban banks in Aurangabad and Jalna district. Priority sector

lending reports and annual reports of the selected banks for the period from

1995-96 to 2004-05 have been reviewed on the basis of various aspects such

as sub-sector wise study of loans sanctioned, amount advanced, amount of

overdue, profitability, Net NPA, Net GPA etc.

Background of Aurangabad Districts

Aurangabad is a regional headquarter of the Marathwada region. The

district headquarters situated on kham river is a place of great attraction for

the tourists because of numerous ancient remains. Aurangabad district is

famous for Ajanta caves, Ellora caves, Daultabad (Deogiri) Fort, Paithan,

84

Pawan Chakki and Bibi ka maqbara. Aurangabad district is a great center of

culture activities and place of political activities. Aurangabad is also an

industrial city and a good center of education having number of excellent

educational institutes. Dr. Babasaheb Ambedkar Marathwada University is

situated in Aurangabad, imparting and monitoring higher education in

Aurangabad, Jalna, Beed and Osmanabad districts of the Marathwada

region.

The geographical area of Aurangabad district is nearly 8900 Sq. kms.

Aurangabad district includes Kannad, Sillod, Soygaon, Khultabad, Vaijapur,

Gangapur, Aurangabad, Paithan and Fulambri talukas. The major rivers

flowing through the district are Godavari, Dudhana, Kham, Purna, Vaghur,

Kelna, Anjana, Girja, Shivana, Yelganga etc. The average rainfall in the

district is 725 mm and the temperature ranges between 130 to 42

0C.

According to 2001 census report the population of Aurangabad district was

2920348 and the literacy rate was 73.63 %.

District of Aurangabad is continuously a place of draught and

inadequate rainfall, bad and rocky land, less proportion of fertile land and

lack of perennial water source. All these aspects always hampered the

agricultural prospects of the district. It was Jayakwadi Project which filled

the breath in the farming economy of the district.

Till Nizam’s time the district had only traditional village industry

which has direct contribution in the village or local economy but not in the

district as such and not in the state. It only provided needs of society and

inadequate subsistence to the village professionals. Fortunately the Constant

& efforts of Government for upliftment of society gave fruits, though with

very slow pace, and various aspects including economy and industry grew

85

to the betterment. The best policy of the Government was the foundation of

the Maharashtra Industrial Development Corporation (MIDC). Similarly,

various financing institutes like SICOM, MSFC, MSSIDC, Regional

Development corporations, District Industrial Centers, Khadi Village

Industrial Corporation, Women Economical Development Corporation and

various schemes floated for time to time have also contributed in the

development of Aurangabad district. Aurangabad district received first

Industrial Estate called Chikalthana. Now Aurangabad has 5 major

industrial estates. The industrial estates are located at Chikalthana, Waluj,

Railway Station, Paithan road area, and at Paithan.

Communication of all types is an important factor in the development

of the society. Aurangabad is well connected with distance area through

railway, road and air transport system. (1)

Background of Jalna Districts

Jalna become the district in 1981. Prior to May, 1981 Jalna district

was a part of Aurangabad district. The district headquarters is situated on

Kundlika river. Jamb Samrtha in Jalna district is well known as a birth place

of Swami Ramdas Samarth. Asai in Jafrabad taluka is a famous place

known for the battle of 1803 between British and Maratha. Bhokardan, a

taluka headquarters is famous for early historical habitation and caves of

vakataka period.

Jalna is known as the seed capital of India. There are nearly 35 seed

processing units. Mahico Seeds Co., Mahendra Seeds Co., Safal Seeds Co.,

86

Krishidhan Seeds Co. etc. are well-known seeds companies in national as

well as in international market.

Re-rolling mills and steel companies have been flourished during last

30 years and the steel market is well known in Maharashtra.

Jalna is a well-known trading center of Maharashtra. Jalna grain

market is famous for certain goods all over the country.

The geographical area of Jalna is nearly 7405 Sq. kms. Jalna district

includes Jalna, Ambad, Bhokardan, Jafrabad, Partur, Mantha, Badnapur and

Ghansawangi talukas. The major rivers flowing through the district are

Godavari, Dudhana, Kundalika, Purna, Girja, Khelana, Galhati, Kalyan,

Jiverkhi, Jui, Dhamana etc. The average rainfall in the district is 730 mm

and the temperature ranges between 70 to 42

0 C. According to 2001 census

report, the population of Jalna district was 1612357.

The district has inadequate water sources including rain. Major area is

irrigated under well and artificial irrigation system which is still

undeveloped and inadequate. The district does not have major irrigation

project. The project of Jayakwadi of Paithan in Aurangabad district has

some influence over this district. The small farmers are greater in number

and that has immense effect on the agricultural product. The production and

yield of the major crops is much less as compare to the other districts of

Maharashtra. According to 1991 census report, 46.63% of the district

population was farmers and 36.16% were agricultural labours. This shows

that major portion of the population is dependent upon farming.

87

Jalna is one of the industrially backward district of Maharashtra state.

Jalna has four major Industrial estates. The first Industrial estate came into

existence in the year 1962 on co-operative basis which is situated near the

Christian grave yard. The second Industrial estate came into existence after

1980 which is situated on Aurangabad road. Industrial estates have also

been established in Partur and Ambad. The industrial development in the

district has accelerated to some extent only after establishment of District

Industrial Center in 1982.

Jalna is a major railway station on Mumbai-Kacheguda railway line.

It is well connected with distance area through railway and road. However,

development of new railway routes is very important for the development of

trade, commerce and industry in the Jalna districts.

Among many other problems, irregular and inadequate supply of

water is the burning problem of Jalna district which is hampering the

development of the district. (2)

Financial Position and Performance of Urban Co-operative Banks in

Aurangabad District.

The researcher has used secondary data for this purpose. According

to the available data for the year 2004-2005, there were 16 UCBs registered

in Aurangabad district. Table No. 4.1 provides better insight of the financial

position and performance of UCBs registered and operating in Aurangabad

district.

88

It is revealed from the Table No. 4.1 that the Deogiri Nagari Sahakari

Bank Ltd., herein after termed as Deogiri Bank is the strongest Urban Co-

operative Bank registered in Aurangabad district. This is inferred on the

basis of the indicators taken for this study, viz., share capital, own fund,

deposits, borrowings, loans and advances, working capital and profits.

Table No: - 4.1

Highlights of Financial Position and Performance of Urban Co-

operative Banks in Aurangabad District.

(Rs. In Lakhs)

Sr.

No.

Name of the UCB

(Rs.)

Share

Capital

(Rs.)

Own

fund

(Rs.)

Deposits

(Rs.)

Borrow-

ings

(Rs.)

Loan &

advances

(Rs.)

Working

capital

(Rs.)

Profits

(Rs.)

01 02 03 04 05 06 07 08 09

01Vaijapur Merchants Co-

operative Bank Ltd.70.65 438.48 3414.7 Nil 2420.55 4667.45 21.72

02Deogiri Nagari Sahakari

Bank Ltd.752.68

2481.1

63325.06 Nil 24745.18 40234.82 281.1

03Shivaji Nagari Sahakari

Bank Ltd.28.5 38.98 525.5 4.81 18.53 631.24 25.59

04Siddeshwar Urban Co-


05Lokvikas Nagari

Sahakari Bank Ltd.116.29 338.69 3431.4 Nil 2037.63 3431.4 68.91

06Addarsh Mahila Nagari

Sahakari Bank Ltd.184.77 284.04 5189.6 3515.34 3515.34 5729.78 51.71

07Shri Agrasen Nagari


08Dr. B. Ambedkar Nagari

Saha. Bank Ltd.91.26 133.6 938.32 Nil 1346.1 1120.91 16.09

09Shri Mahesh Urban Co-


10Vishwakarma Nagari


11Prerana Nagari Sahakari

Bank Ltd.25.52 28.39 159.79 Nil 133.68 195.4 1.6

Total 1409.96 4039.31 50002.92 3520.15 36240 59662.65 442.512

Note: - Reporting UCBs 11

Figures are for the year 2004-05.

Source: - The Maharashtra state co-operative Banks Association Ltd,

Mumbai.

89

Graph 4.1

Relative Position of the Deogiri Bank

It is imperative to study the position of Deogiri Bank in detail in the

context of UCBs in Aurangabad District. The table no. 4.2 gives better

insight of the position of the Deogiri Bank.

90

Table No. 4.2

Relative Position of the Deogiri Bank in

Comparison to Total UCBs in Aurangabad District.(Rs. In Lakhs)

Sr.

No.Indicators

Position of all

UCBs in A. bad.

(Rs.)

Position of Deogiri

Bank (Rs.)

% Share of

Deogiri Bank.

01 02 03 04 05

01 Deposit 50,062.92 31248.70 66.42 %

02 Loans & Advance 36240.00 24745.18 68.28 %

03 Borrowing 3520.15 Nil Nil

04 Own fund 4039.31 2481.16 61.42 %

05 Profit 442.512 281.1 63.52 %

06 Share capital 1409.96 725.80 51.47 %

07 Working capital 59662.65 40234.82 67.43 %

Note: - 1) Figure relating to the year 2004-05 is being considered.

2) Reporting Banks 11

Source: - the Maharashtra state Co-operative Banks Association Ltd.

Mumbai.

Graph 4.2

91

It is revealed from the Table No. 4.2 that during 2004-05, the share

capital of Deogiri Bank in total Share capital of registered and operating

UCBs in Aurangabad district is more than 50%, where as in case of own

fund, deposits, loans & advances and working capital it is above 65 %. Its

profits is just below 65% of the total profits earned by reporting UCBs in

Aurangabad district.

It is also seen that the Deogiri bank is fully self-sufficient as there

were no borrowings during 2004-05.

The above fact shows that the financial position and profitability of

the Deogiri bank is very strong. It is seen that the Deogiri bank had

occupied the dominating position amongst the UCBs registered and

operating in Aurangabad district.

Financial Position and Performance of Urban Co-operative Banks in

Jalna District

According to the data available for the year 2004-05 there were seven

UCBs registered in Jalna district. Table No. 4.3 provides better insight of

the financial position and performance of UCBs registered and operating in

Jalna district.

92

Table No – 4.3

Highlights of Financial Position and Performance of

Urban Co-operative Banks in Jalna District.(Rs. In Lakhs)

Sr.

No

.

Name of the UCB

(Rs.)

ShareCapital

(Rs.)

Own

fund

(Rs.)

Deposits

(Rs.)Borrowin

gs (Rs.)

Loan &

advance

s (Rs.)

Working

capital

(Rs.)

Profits

(Rs.)

01 02 03 04 05 06 07 08 09

01

The Jalna Peoples

Co-operative Bank

Ltd.

124.58 638.7 6131.49 131.51 4482.5 7859.30 5.06

02

Shri Gajanan

Maharaj Urban Co-

operative Bank Ltd.

52.53 114.7 700.86 578.83 578.83 961.95 14.34

03

Priyadarshinai

Nagari Sahakari

Bank Ltd.

35.68 44.54 583.01 Nil 374.31 647.09 0.27

04

Jalna Merchants

Co-operative Bank

Ltd.

46.71 156.46 1616.14 Nil 1051.78 1940.56 43.34

05Mantha Urban Co-


Total 288.29 1008.59 9841.3 710.34 7023.39 12339.79 55.31

Note: - Reporting UCBs 05

Source: - The Maharashtra state Co-operative Banks’ Association Ltd.,

Mumbai.

Graph 4.3

93

It is revealed from table No. 4.3 that the position of Jalna peoples Co-

operative Bank Ltd., hereinafter termed as Peoples’ Bank, is stronger in

comparison to other UCBs registered in Jalna district on the basis of the

indicators, viz., share capital, own fund, deposits, loans and advances and

working capital. However, its profitability seems to be less than two other

UCBs, registered and operating in Jalna district. It is also seen that the

Peoples’ Bank has resorted to external borrowing where as there were three

other UCBs, which have not resorted to external borrowings for the year

2004-05. Hence on this parameter the position of Peoples’ bank is seems to

be weak.

The profitability of the Jalna Merchants Co-operative Bank Ltd was

highest as compared to other UCBs in Jalna district and it was not depend

upon external borrowings. However, merchants Bank came into existence in

1998 and the present study covers the period from 1995-96 to 2004-05. The

profitability of the Gajanan Maharaj Urban Co-operative Bank Ltd. was also

higher than the Peoples’ Bank. However, it came into existence in 1995 &

its dependence on external borrowing was also higher than the Peoples’

Bank.

Relative Position of Peoples’ bank, Jalna

It is imperative to study the position of Peoples Bank in detail in the

context of UCBs in Jalna District. The table no. 4.3 gives better insight of

the position of the Peoples Bank.

94

It is reveled from the table No. 4.4 that the share of Jalna Peoples Co-

operative Bank in total share capital of operating registered UCBs in Jalna

district during 2004-05 was 43.21%, where as in case of own fund, deposits,

loans and advances and working capital it was around 63%. It is also seen

that its borrowing was moderate at 18.51% during the same period.

The above facts show that the Peoples’ Bank is the strongest UCB in

Jalna district. However, it is also revealed that its share of profit is just

9.14% of the profit earned by all the operating registered UCBs in Jalna

district during 2004-05. It is a cause of concern for the Peoples’ Bank.

The researcher had to select one UCB each from Aurangabad and

Jalna district. The selection was made on purposive and systematic

sampling basis after analyzing the relative positions of the UCBs registered

in Aurangabad and Jalna districts.

Table No : 4.4

Relative Position of Peoples’ bank, Jalna in Comparison to

Total Urban Co-operative Banks in Jalna District.

(Rs. In Lakhs)

Sr.

No.Indicators

Position of

all UCBs in

Jalna (Rs.)

Position of

Peoples’

Bank (Rs.)

% Share of

JPC in UCBs

in Jalna

01 02 03 04 05

01 Share capital 288.29 124.58 43.21%

02 Own fund 1008.59 638.7 63.32

03 Deposit 9841.3 6131.49 62.30%

04 Borrowing 710.34 131.51 18.51%

05 Loans & Advance 7023.39 4482.5 63.82%

06 Working capital 12339.79 7859.35 63.69

07 Profit 55.31 5.06 9.14%

95

Graph No. 4.4

Deogiri Bank being the strongest bank amongst the UCBs registered

in Aurangabad and Peoples’ bank being the dominating UCB in Jalna

districts have been selected for detail study of the impact of priority sector

lending on UCBs in Aurangabad and Jalna districts.

Deogiri Bank was established in 1985 & working through ten

branches, two extension counters, one training center & head office. There

were 11232 shareholders. Peoples’ Bank was established in 1958 &

working through Nine branches & head office. There were 19090

shareholders. The area of operation of both the banks is confined to

Aurangabad & Jalna districts.

96

Priority Sector lending by Deogiri bank Aurangabad

To get deep insight of priority sector lending by these two banks, it is

necessary to study the number of borrowing units limits sanctioned, amount

advanced balance outstanding and amount of overdue under the priority

sector lending for the period from 1995-96 to 2004-05.

Table no. 4.5 gives better insight of the number of borrowing units

limits sanctioned, amount advanced balance outstanding and amount of

overdue under the priority sector lending by Deogiri bank, Aurangabad for

the period from 1995-96 to 2004-05.

Table No 4.5

Priority Sector lending by Deogiri bank Aurangabad

(Rs. In thousands)

Sr.

NoYear

No. Of

borrowing

units

Limits

sanctioned

Amount

Advanc

ed

Balance

outstandi

ng

Amt.

Overdue

01 02 03 04 05 06 07

01 March End

1995-962881 184842 181687 145377 19552

02 1996-97 3656 288724 283817 217375 21467

03 1997-98 4533 429587 431303 364936 28407

04 1998-99 3727 472667 450255 357628 23044

05 1999-2000 N. A. N. A. N. A. N. A. N. A.

06 2000-01 8613 1127226 1113854 957968 75894

07 2001-02 9120 1419897 1419897 1125196 88167

08 2002-03 9795 1430315 1403294 1182491 109660

09 2003-04 10679 1664075 1664076 1351557 178818

10 2004-05 11131 1884039 1855425 1576484 190817

Note: N. A. (Not available)

Source: - Deogiri Bank, priority sector Reports from 1995-96 to 2004-05.

97

It is seen from the Table No. 4.5 that the number of borrowers under

priority sector lending by Deogiri Nagari Sahakari Bank Ltd, Aurangabad

has increased from 2881 during 1995-96 to 11131 during 2004-05. There

was an increase by 286.35% in the number of borrowers during the period

of 10 years. It is also seen that during the year 2000-01 number of borrowers

as compared to 1998-99 has increased at a very high rate & there after the

increase in the number of borrowers was only moderate.

It is also seen from the Table No. 4.5 that the limits sanctioned under

the priority sector lending has increased from Rs. 184842 thousands in

1995-96 to Rs. 1884039 thousands in 2004-05 indicating an increase of over

10 times during the period of 10 years. It is also seen that there were

constant increase in the amount sanctioned under priority sector by the

Deogiri bank. However, the increase in limits sanctioned during 2000-01

seems to be sharp as compared to the year 1998-99.

It is also evident that the amount advanced under the priority sector

lending by Deogiri Bank has increased from Rs. 181687 thousands in 1995-

96 to Rs. 1855425 thousands in 2004-05, indicating nearly 10 times increase

during the period of 10 years. Almost same trend is evident so far as year-

to-year increase in amount advance is concerned as seen for limits

sanctioned.

The Table No 4.5 also reveals that the amount outstanding at the end

of March 1996 was Rs. 145377 thousands. It was Rs. 1576484 thousand at

the end of March 2005 indicating an increase of more than 10 times during

the period 1995-96 to 2004-05.

98

It is also seen from the Table No 4.5 that the amount of overdue for

the year ending March 1995 was Rs. 19552 thousands. It was Rs. 190520

thousands at the end of March 2005 showing nearly 10 time increase during

the same period.

Amount of overdue as a proportion of balance outstanding was

highest at 13.44% in 1995-96. Then from 1996-97 to 2002-03, it was less

than 10%. However, in 2003-04 and 2004-05, it was reached at 13.23% and

12.08% respectively. It means that the amount of overdue during 1996-97

to 2002-03 was much under control. However it was above tolerable limit

during 2003-04 and 2004-05. It was a cause of concern for the Deogiri

Bank.

Priority Sector Lending by Peoples’ Bank, Jalna

Table no. 4.6 gives an insight in to the priority sector lending by the

Jalna Peoples’ Bank, Jalna during the period 1995-96 to 2004-05.

99

Table No.: 4.6

Priority Sector Lending by Peoples’ Bank, Jalna(Rs. In thousands)

Sr.

No.Year

No of

borrowing

units

Limits

sanctioned

Amt.

Advanced

Balance

outstanding

Amt.

Overdue

01 02 03 04 05 06 07

01March

End

19963256 119273 99206 91265 29115

02 1997 3431 166744 150582 138705 27528

03 1998 3908 167339 145158 122364 23234

04 1999 4039 173589 160705 154229 20561

05 2000 4773 194185 195400 191160 20875

06 2001 5912 264848 266438 252433 23967

07 2002 5693 270468 291294 278737 37007

08 2003 5404 310369 301577 275292 45912

09 2004 4902 309065 296121 270626 53992

10 2005 3950 286114 278220 249052 48681

Source: - Peoples’ Bank Priority Sectors reports (1995-96 to 2004-05)

It is seen from the Table No. 4.6 that the number of borrowers under

priority sector lending by Jalna Peoples’ co-operative Bank Ltd. Jalna has

increased from 3256 at the end of March 1996 to 3950 at the end of March

2005. There was an increase of 21.31 % in the number of borrowers over a

period of 10 years. It is also seen that the number of borrower has increased

from 3256 in 1995-96 to 5912 in 2000-01 & there after there was a

declining trend till 2004-05.

It is also seen from the Table No 4.6 that the limits sanctioned under

the priority sector lending has increased from Rs. 119273 thousands in

1995-96 to Rs. 286114 thousands in 2004-05 indicating an increase of

139.88 % over the period of ten years. It is also revealed that there was

continuous increase in the limits sanctioned by peoples’ bank under priority

100

sector lending, except the year 2003-04, and 2004-05 in which it is seen that

limit sanctioned was slightly lower than the previous years.

A careful analysis of amount advanced under priority sector lending

by Peoples’ Bank, Jalna during 1995-96 to 2004-05 showed fluctuating

trends. In 1996-97, it has increased to Rs. 150582 thousands as compared

Rs. 99206 thousands in 1995-96, witnessing an increase of 51.78 %. In

1997-98, it has reduced to Rs. 145158 thousands witnessing a decline of

3.61 % as compared to 1996-97. There after there was a continuous

increase in amount advanced under priority sector till 2002-03. However, in

2003-04 it has declined to Rs. 296121 thousands as compared to Rs. 301577

thousands in 2002-03. In 2004-05, it has further reduced to Rs. 278220

thousands.

It is also seen that the amount of overdue was Rs. 29115 thousands in

1995-96. It has continuously decline till 1998-99 and reached the lowest

level of the period under study to Rs. 20561 thousands. There after, it has

shown a continued increasing trend till 2003-04 showing Rs. 53992

thousands in 2003-04. However, in 2004-05, it has declined to Rs. 48681

thousands. Over the period of 10 years, i.e. from 1995-96 to 2004-05, it has

increased by 67.20 %.

Analysis of borrowing units under priority sector lending.

It is imperative to study the total no. of beneficiaries and sub-sector

wise number of beneficiaries under the priority sector lending by Deogiri

Bank, Aurangabad and Peoples’ Bank, Jalna, for the period of 10 years from

1995-96 to 2004-05. It will reveal the relative significance of sub-sector

101

wise lending under the priority sector in the context of number of

beneficiaries.

Table no. 4.7 reveals the sub-sector wise increase or decrease in the

number of beneficiaries under the priority sector lending by Deogiri Bank,

Aurangabad, for the period from 1995-96 to 2004-05.

It is evident from table no. 4.7 that the total borrowing units under the

priority sector lending by Deogiri Bank, Aurangabad has continuously

increased from 2881 units in 1995-96 to 11131 units in 2004-05, except for

one year 1998-99. It was 2881 in 1995-96. It was increased to 11131 in

2004-05. It indicate that during the period of 10 years from 1995-96 to

2004-05, the total number of borrowing units under priority sector lending

by Deogiri bank has increased by 3.86 times. It means that this bank has

succeeded in attracting more and more borrowers over the period of time.

102

Table No: 4.7

Analysis of borrowing units under priority By Deogiri bank,

Aurangabad.

Sr Year

Total

borrow

ing

units

Agricul

ture

Cottage

SSI

Road &

Water

Transport

Operat-

ors

Retail

Traders

Small

Business

Enterpris

es

Professio

n-als &

Self

Employe

d

Persons

Educati

o-nal

Loans

Housing

Loans

Consu

mption

Loans

01 02 03 04 05 06 07 08 09 10 11 12

011995

- 96

2881

(100)

23

(0.80)

161

(5.63)

291

(10.18)

517

(17.22)

43

(1.50)

606

(21.21)

39

(1.36)

1201

(42.05)Nil

021996

- 97

3656

(100)

20

(0.54)

199

(5.44)

329

(8.99)

498

(13.62)

61

(1.66)

701

(19.17)

65

(1.77)

1783

(48.76)Nil

031997

- 98

4533

(100)

49

(1.08)

257

(5.66)

494

(10.99)

760

(16.76)

104

(2.29)

778

(17.16)

50

(1.10)

2041

(45.02)Nil

041998

- 99

3727

(100)

92

(2.34)

188

(4.78)

355

(9.03)

581

(14.79)

101

(2.57)

454

(11.56)

16

(0.40)

1940

(49.40)Nil

05 1999

-00N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A.

062000

- 01

8613

(100)

375

(4.35)

343

(3.98)

501

(5.81)

959

(11.13)

281

(3.26)

552

(6.40)

945

(10.97)

4657

(54.06)Nil

072001

- 02

9120

(100)

478

(5.24)

388

(4.25)

497

(5.44)

1231

(13.49)

204

(2.23)

604

(6.62)

651

(7.13)

5067

(55.55)Nil

082002

- 03

9795

(100)

539

(5.50)

512

(5.22)

594

(6.06)

1366

(13.94)

207

(2.11)

603

(6.15)

354

(3.61)

5620

(57.3)Nil

092003

- 04

10679

(100)

685

(6.41)

514

(4.81)

667

(6.24)

1760

(16.48)

290

(2.71)

557

(5.21)

444

(4.15)

5762

(53.95)Nil

102004

- 05

11131

(100)

946

(8.49)

450

(4.04)

332

(2.98)

2018

(18.12)

347

(3.11)

618

(5.55)

446

(4.00)

5760

(51.74)

214

(1.92)

Note: - Figures in bracket are the % for the relevant year.

N. A. – Not available

Source: - Deogiri Bank, Aurangabad, Priority Sector Reports

103

Table no 4.7 also revealed that the total number of borrowing units

under all the sub sectors has increased over the period from 1995-96 to

2004-05. However, the increase in the number of borrowing units under

housing loan, agriculture, educational loan and consumption loan was very

impressive.

It is further revealed from table no. 4.7 that the number of borrowing

units under the sub-sector housing loan by Deogiri Bank, has continuously

increase from 1201 units in 1995-96 to 5760 units in 2004-05. The number

of borrowing units under the agriculture sector has increase from 23 units in

1995-96 to 946 units in 2004-05. The increase in the number of borrowing

units under the housing loan and agriculture loan is very impressive.

In 1995-96, the relative position of various sub-sectors of the priority

sector lending by Deogiri Bank in the context of borrowing units were

in the following order, namely, (i) housing loan, (ii) professional and self –

employed, (iii) retail traders, (iv) road and water transport operators, (v)

cottage and SSI, (vi) small business enterprises, (vii) educational loan, (viii)

agriculture. During 1995-96 to 2003-04, no consumption loan was granted

by Deogiri bank.

In 2004-05, the relative position of number of borrowing units under

various sub-sectors of the priority sector were in the following order,

namely, (i) housing loan, (ii) retail traders, (iii) agriculture, (iv)

professionals and self-employed persons, (v) cottage and small SSI, (vi)

educational loan, (vii) small business enterprises, (viii) Road and water

transport operator, (ix) consumption loan.

104

The relative position of these sub-sectors have undergone a sea

change over the period of 10 years from 1995-96 to 2004-05.

It is also seen from the table no. 4.25 that the proportionate share of

borrowing units under housing loan, professionals and self employed

persons and retail traders in 1995-96 were 42.05 %, 21.21% and 17.22%

respectively and the share of remaining sub-sectors of the priority sector

was only 19.52 %. In 2004-05 the proportionate share of borrowing units

under the housing loan, retail traders and agriculture were 51.74 %, 18.12 %

and 8.49 % respectively. The share of remaining sub-sector of the priority

sector lending was 21.65 %.

It is further evident from table no. 4.7 that the relative importance of

agriculture loan have been considerably increased over the period from

1995-96 to 2004-05.

Analysis Of Borrowing Units Under Priority Sector Lending By

Peoples’ Bank, Jalna.

The table no. 4.8 reveals the sub-sector wise increase or decrease in

the number of beneficiaries under the priority sector lending by the Peoples’

Bank, Jalna for the period of 10 years from 1995-96 to 2004-05.

It is evident from table no. 4.8 that the total borrowing units under the

priority sector lending by Peoples’ Bank, Jalna has continuously increased

during 1995-96 to 2000-01. It was 3256 in 1995-96. It was increased to

5912 in 2000-01. Thereafter it has declined continuously from 2001-02 and

reached to 3950 in 2004-05. It means that the large number of borrowing

105

units have been shifted to other financial institutions or repaid their entire

amount of loan.

Table No.: 4.8

Analysis Of Borrowing Units Under Priority Sector Lending By


Sr.

NoYear

Total

borrowing

units

Agricul

-ture

Cottage

SSI

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

Small

Business

Enterprise

s

Professi

on-als &

Self

Employe

d

Persons

Educati

o-nal

Loans

Housing

Loans

Consu

mption

Loans

01 02 03 04 05 06 07 08 09 10 11 12

01

1995

- 96

3256

(100)

52

(1.59)

146

(4.48)

9

(0.2)

1375

(42.22)

609

(18.70)

51

(1.56)

66

(2.02)

910

(27.94)

38

(1.16)

021996

- 97

3431

(100)

96

(2.79)

134

(3.90)

54

(1.57)

1096

(31.94)

705

(20.54)

59

(1.71)

246

(7.16)

1001

(29.17)

40

(1.16)

031997

- 98

3908

(100)

181

(4.63)

120

(3.07)

67

(1.71)

1112

(28.45)

710

(18.39)

75

(1.91)

263

(6.72)

1357

(34.72)

23

(0.58)

041998

- 99

4039

(100)

194

(4.80)

108

(2.67)

14

(0.34)

1138

(28.17)

571

(14.13)

80

(1.98)

220

(5.44)

1699

(42.06)

15

(0.37)

051999

-

2000

4773

(100)

191

(4.00)

101

(2.11)

35

(0.73)

1218

(25.51)

534

(11.18)

188

(3.93)

125

(2.61)

2367

(49.59)

14

(0.29)

062000

- 01

5912

(100)

167

(2.82)

95

(1.60)

40

(0.67)

1243

(21.02)

523

(8.84)

182

(3.07)

181

(3.06)

3471

(58.71)

10

(0.16)

072001

- 02

5693

(100)

180

(3.16)

95

(1.66)

35

(0.61)

1152

(20.23)

543

(9.53)

192

(3.37)

164

(2.88)

3319

(58.29)

13

(0.22)

082002

- 03

5374

(100)

138

(2.56)

100

(1.86)

37

(0.68)

1140

(21.21)

585

(10.88)

185

(3.44)

106

(1.97)

3068

(51.08)

15

(0.28)

092003

- 04

4902

(100)

129

(2.63)

91

(1.85)

79

(1.61)

1022

(20.84)

535

(10.91)

164

(3.34)

88

(1.79)

2765

(56.40)

29

(0.59)

102004

- 05

3950

(100)

174

(4.40)

79

(2.0)

83

(2.10)

159

(4.02)

545

(13.79)

209

(5.29)

81

(2.05)

2584

(65.41)

36

(0.91)

Note :- Figures in bracket are the % for the relevant year.

Source: - Peoples’ Bank Jalna, Priority Sector Reports

106

Table no. 4.8 also revealed that the total number of borrowing units

under the sub-sector housing loan by peoples’ bank has increased from 910

units in 1995-96 to 2584 units in 2004-05. The number of borrowing units

has declined from 1375 in 1995-96 to 159 in 2004-05. However, the number

of borrowing units under loans to retail traders during the year 1995-96 and

1996-97 was higher than the number of borrowing units under housing loan.

In 1995-96, the relative position of various sub-sectors of the priority

sector lending by peoples’ bank, Jalna in the context of borrowing units

were in the following order, namely, (i) retail traders, (ii) housing loan, (iii)

small business enterprises (iv) cottage and SSI, (v) educational loan, (vii)

agriculture, (vii) professionals and self-employed persons (viii)

consumption loan, (ix) road and water transport operators.

In 2004-05 the relative position of the number of borrowing units

under various sub-sector of the priority sector were in the following order,

namely, (i) housing loan, (ii) small business enterprises, (iii) professionals

and self-employed persons, (iv) agriculture, (v) retail traders, (vi) road and

water transport operators (vii) educational loan, (viii) cottage and small

scale industries, (ix) consumption loan.

The relative position of these sub-sectors have undergone a sea

change over the period of 10 years from 1995-96 to 2004-05.

It also reveled from the table no. 4.8 that the proportionate share of

borrowing units under housing loan, loans to retail traders and small

business enterprises in 1995-96 were 27.94%, 42.22%, and 18.70%

respectively. The share of remaining sub-sectors of the priority sectors was

only 11.14%.

107

In 2004-05 the proportionate share of borrowing units under the

housing loan, small business enterprises and professionals and self-

employed persons were 65.41%, 13.79% and 5.29% respectively. The share

of remaining sub-sectors of the priority sector lending was only 15.51%.

It is also evident from the table no. 4.8 that the relative importance of

the housing loan has been considerably increased over the period of 10 year

1995-96 to 2004-05. During the same period, the relative importance of

retail traders of and small business enterprises has declined.

Analysis of Limits Sanctioned Under Priority Sector Lending

After studying the number of borrowing units under various sub-

sectors of the priority sector lending by Deogiri Bank, Aurangabad and

Peoples’ bank, Jalna, it is imperative to study the salient features of limit

sanctioned by both the banks to various sub-sectors of the priority sector.

The table no. 4.9 reveals the salient features of limit sanctioned by

Deogiri Bank, Aurangabad to various sub-sectors of the priority sector

lending during the period from 1995-96 to 2004-05.

It is evident from the table no. 4.9 that the total amount of limits

sanctioned by Deogiri bank, Aurangabad under the priority sector lending

during the period of 10 years from 1995-96 to 2004-05 has shown the

increasing trend. The total amount of limits sanctioned under priority sector

lending by Deogiri Bank, Aurangabad in 1995-96 was Rs. 184842

thousands. It has reached to Rs. 1884039 thousands in 2004-05. It indicates

an increase of 10.19 times over a period 10 years from 1995-96 to 2004-05.

108

It is revealed from the table no. 4.9 that the limits sanctioned to

various sub-sectors of priority sector by Deogiri bank has under gone a sea

change over the period from 1995-96 to 2004-05. In 1995-96, the

proportionate share of limits sanctioned to cottage & SSI professional and

self-employed persons, road and water transport operators, housing loans,

retail traders was 37.62%, 17.86%, 17.11%, 14.56% and 10.75%

respectively. The proportionate share of remaining priority sectors was

2.05% of the total priority sector lending by Deogiri Bank.

In 2004-05, the proportionate share of the limits sanctioned to cottage

and SSI, housing loan, retail traders agriculture small business enterprises

was 35.50%, 24.87%, 13.51%, 10.96% 5.68% and the proportionate share

of remaining priority sectors was only 15.48% of the total priority sector

lending.

It means that the cottage and SSI sector remained at the top in the

amount of limits sanctioned by the Deogiri bank over a period of 10 years

from 1995-96 to 2004-05. However, during the same period the

proportionate share of limits sanctioned to professionals and road and water

transport operators have declined. The proportionate share of limits

sanctioned to agriculture, housing and retail traders have increased. The

relative increase in the limits sanctioned to agriculture was very impressive.

109

Table No: 4.9

Analysis of Limits Sanctioned Under Priority Sector Lending by

Deogiri Bank, Aurangabad.

(Rs. In thousands)

Sr.

NoYear

Limit

sanctioned

(Rs)

Agricul

-ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

(Rs)

Small

Busines

s

Enterpri

ses

(Rs)

Professio

n-als &

Self

Employe

d

Persons

(Rs)

Educati

o-nal

Loans

(Rs)

Housing

Loans

(Rs)

Consu

mptio

n

Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11 12

011995

- 96

184842

(100)

2455

(1.32)

69542

(37.62)

31643

(17.11)

19873

(10.75)

964

(0.52)

33028

(17.86)

406

(0.21)

26931

(14.56)Nil

021996

- 97

288724

(100)

1159

(0.40)

103734

(35.92)

43025

(14.90)

24772

(8.57)

6168

(2.13)

60646

(21.00)

848

(0.29)

48372

(16.75)Nil

031997

- 98

429587

(100)

4960

(1.15)

157020

(36.55)

75011

(17.46)

40958

(9.53)

19034

(4.43)

74919

(17.43)

918

(0.21)

54767

(13.21)Nil

041998

- 99

472667

(100)

6441

(1.36)

190318

(40.26)

53906

(11.40)

47810

(10.11)

11775

(2.49)

73073

(15.45)

764

(0.16)

88580

(18.74)Nil

05 1999

- 00 N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N.A.

062000

- 01

1127226

(100)

33203

(2.94)

441594

(39.17)

97130

(8.61)

114565

(10.16)

64603

(5.73)

130476

(11.57)

5680

(0.50)

239975

(21.28)Nil

072001

- 02

1419897

(100)

70380

(4.95)

436498

(30.74)

90774

(6.39)

173878

(12.24)

51930

(3.65)

310236

(21.84)

6760

(0.47)

279441

(19.68)Nil

082002

- 03

1430315

(100)

51294

(3.58)

656415

(45.89)

88764

(6.20)

156240

(10.92)

33182

(2.13)

117051

(8.18)

4165

(0.29)

323204

(22.59)Nil

092003

- 04

1664075

(100)

90899

(5.46)

733066

(44.05)

78204

(4.69)

188771

(11.34)

79230

(4.76)

110776

(6.65)

7625

(0.45)

375504

(22.56)Nil

102004

- 05

1884039

(100)

206637

(10.96)

668894

(35.50)

53155

(2.82)

254544

(13.51)

107052

(5.68)

93890

(4.98)

7383

(0.39)

468640

(24.87)

23844

(1.26)




110

It is also revealed that the limits sanctioned to housing loans by the

Deogiri bank, Aurangabad during 1995-96 to 2004-05 has shown increasing

trend. The amount of limits sanctioned to housing loans in 1995-96 was Rs.

26931 thousands. In 2004-05, it has increased to Rs. 468640 thousands. It

indicates an increase of 17.40 times over the period of 10 years from 1995-

96 to 2004-05. It means that the housing loan is gaining popularity among

the customers of Deogiri bank. Similarly, it is revealed that the limits

sanctioned to cottage and small-scale industries by the Deogiri bank,

Aurangabad during 1995-96 to 2004-05 has shown increasing trend except

the year 2001-02 in which it was slightly lower than the year 2000-01. The

amount of limits sanctioned to cottage and small-scale industries in 1995-96

was Rs. 69542 thousands. In 2004-05, it has increased to Rs. 668894

thousands an increase of 9.61 times over the period of 10 years from 1995-

96 to 2004-05. Further it is revealed that the limits sanctioned to retail

traders by Deogiri bank, Aurangabad during 1995-96 to 2004-05 has shown

increasing trend except the year 2002-03, in which it was approximately 10

% lower than the year 2001-02. The amount of limits sanctioned to retail

traders in 1995-96 was Rs. 19873 thousands. In 2004-05 it was Rs. 254544

thousands. It has increased by 12.80 times over the period of 10 years from

1995-96 to 2004-05.

It is also seen that the Deogiri bank has sanctioned the loans for

consumption purpose only in 2004-05. There were no consumption loans

during 1995-96 to 2003-04. The amount of limits sanctioned for

consumption in 2004-05 was negligible. The amount of limits sanctioned for

educational loan was also negligible throughout the period from 1995-96 to

2004-05.

111

It is also revealed that the limits sanctioned to agriculture, road and

water transport operators, small business enterprises, professionals and self–

employed persons, educational loans by Deogiri bank, Aurangabad during

1995-96 to 2004-05 has shown fluctuating trend. However, it is also seen

that there was sharp increase in the amount of limits sanctioned to

agriculture in 2004-05.

The table no. 4.10 reveals the salient features of limit sanctioned by

Peoples’ Bank, Jalna to various sub-sectors of the priority sector lending

during the period from 1995-96 to 2004-05.

It is evident from the table no. 4.10 that the total amount of limits

sanctioned by Peoples’ Bank, Jalna under the priority sector lending during

1995-96 to 2004-05, showed the increasing trend till the year 2002-03, there

after it has declined during the year 2003-04 and 2004-05.

The total amount of limits sanctioned under priority sector lending by

Peoples’ Bank in 1995-96 was Rs. 119273 thousands. It has reached to Rs.

286114 thousands in 2004-05. It indicate an increase of 2.39 times over a

period of 10 years from 1995-96 to 2004-05.

It is reveled from the table no. 4.10 that the limits sanctioned to

various sub-sectors of priority sector has undergone a sea change over the

period of 10 years from 1995-96 to 2004-05. In 1995-96 the limits

sanctioned to cottage and small scale industries (61.96%), small business

enterprises (16.68%), retail traders (10.77%), housing (6.07%) and the share

of remaining priority sector was (4.52%) of the total priority sector lending

by peoples’ bank.

112

Table No : 4.10

Analysis of Limits Sanctioned under Priority Sector Lending by


(Rs. In thousands)

Sr.

NoYear

Limit

sanctione

d

(Rs)

Agricul

-ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

(Rs)

Small

Business

Enterprise

s

(Rs)

Professi

on-als

& Self

Employ

ed

Persons

(Rs)

Educatio

-nal

Loans

(Rs)

Housin

g Loans

(Rs)

Consum

ption

Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11 12

011995

- 96

119273

(100)

722

(0.60)

73908

(61.96)

1091

(0.91)

12848

(10.77)

19899

(16.68)

2290

(1.91)

766

(0.64)

7251

(6.07)

498

(0.41)

021996

- 97

166744

(100)

5179

(3.10)

75799

(45.45)

9842

(5.90)

20932

(12.55)

37689

(22.60)

5225

(3.13)

1394

(0.83)

9403

(5.63)

1281

(0.76)

031997

- 98

167339

(100)

2775

(1.65)

57049

(34.09)

11006

(6.57)

31561

(18.86)

44842

(26.82)

5080

(3.03)

1680

(1.00)

12869

(7.69)

477

(0.28)

041998

- 99

173589

(100)

3083

(1.77)

53945

(31.07)

1782

(1.02)

42378

(24.41)

40136

(23.12)

5370

(3.09)

1327

(0.76)

25557

(44.72)

11

(0.006)

051999

-

2000

194185

(100)

2962

(1.52)

50548

(26.03)

2635

(1.35)

40736

(20.97)

43069

(22.17)

7394

(3.80)

957

(0.49)

45870

(23.62)

14

(0.007)

062000

- 01

264848

(100)

1975

(0.74)

56700

(21.40)

3901

(1.47)

49861

(18.82)

56205

(21.22)

7364

(2.78)

1354

(0.51)

87479

(33.02)

09

(0.003)

072001

- 02

270468

(100)

2055

(0.75)

53139

(19.64)

4282

(1.58)

51396

(19.00)

63695

(23.54)

8802

(3.25)

1306

(0.48)

85782

(31.71)

11

(0.004)

082002

- 03

310369

(100)

1679

(0.54)

83729

(26.97)

3537

(1.13)

49506

(15.95)

75551

(24.34)

7563

(2.43)

852

(0.27)

87869

(28.31)

83

(0.026)

092003

- 04

309065

(100)

1901

(0.61)

84917

(27.47)

4804

(1.55)

51772

(16.75)

70863

(22.92)

7716

(2.49)

807

(0.26)

85983

(27.82)

302

(0.097)

102004

- 05

286114

(100)

3013

(1.05)

87075

(30.42)

4188

(1.46)

14282

(4.99)

78255

(27.35)

9113

(3.18)

1155

(0.40)

88070

(30.78)

963

(0.33)


Source: - Peoples’ Bank, Jalna, Priority Sector Reports.

In 2004-05, the limits sanctioned to housing loan (30.78%) cottage

and SSI (30.42%), small business enterprises (27.35%), retail traders

(4.99%) and the share of remaining priority sector lending was (6.46%) of

the total priority sector lending. It means that the relative share of housing

113

loan and small business enterprises have increased over the period of 10

years from 1995-96 to 2004-05. Over the same period the relative share of

cottage and SSI and retail traders have declined. The relative increase in the

limits sanctioned to the housing was impressive.

It is also revealed that the amount of limits sanctioned to all the sub-

sectors of priority sector lending by the Peoples bank, Jalna during 1995-96

to 2004-05 has show fluctuating trend.

It is also seen that the amounts of limits sanctioned for consumption

loans during 1995-96 to 1997-98 and 2002-03 to 2004-05 were relatively

higher than the limit sanctioned during the year 1998-99 to 2001-02. It was

almost negligible during 1998-99 to 2001-02.

The relative share of limits sanctioned to cottage and small sector

industries in total limits sanctioned by Peoples’ bank, Jalna in 1995-96 was

61.92%. There after it has successively declined and reached lowest level of

19.64% in 2001-02. However, it has started to increase from 2002-03 at

reached at 30.42% in 2004-05.

The relative share of limits sanctioned to housing loans in total limits

sanctioned under priority sector lending by Peoples’ bank, Jalna in 1995-96

was only 6.07 %. It has successively increased and reached the highest level

of 33.02% in 2000-01. It was 30.78% in 2004-05. The relative share of

limits sanctioned by Peoples’ bank, Jalna to retail traders in 1995-96 was

10.77%. It reached the highest level of 24.41% in 1998-99. It was at its

lowest level of 4.99% in 2004-05.

114

The relative share of limits sanctioned by Peoples’ bank, Jalna to

small business enterprises in 1995-96 was at 16.68 %. In 2004-05, it was at

its highest level of 27.35%.

The table no. 4.10 Revealed that the relative importance of housing

loans and loans to small business enterprises have increased on the other

hand, the relative importance of cottage and small scale industries and retail

traders have declined.

Analysis of amount Advanced under Priority Sector lending

After studying the number of borrowing units and limits sanctioned

under priority sector lending by Deogiri bank, Aurangabad and Peoples’

bank, Jalna it is necessary to study the salient features of amount advanced

under priority sector lending to sub-sectors by both the banks.

The table no. 4.11 reveals the salient features of amount advanced to

priority sector by Deogiri bank, Aurangabad during the period from 1995-96

to 2004-05.

It is seen from table no. 4.11 that the amount advanced under the

priority sector lending by Deogiri bank, Aurangabad during the period of 10

years from 1995-96 to 2004-05 has shown increasing trend except the year

2002-03, in which it was slightly lower than the earlier year 2001-02. The

total amount advanced under priority sector lending by Deogiri bank,

Aurangabad in 1995-96 was Rs. 181687 thousands. To It has reached to

1855425 thousands in 2004-05. It indicates an increase of 10.21 times over

a period of 10 years from 1995-96 to 2004-05.

115

It is reveled from the table no.4.11that the amount advanced to

various sub-sectors of priority sector by Deogiri bank over a period of 10

years from 1995-96 to 2004-05 has shown almost similar trend as shown by

the limit sanctioned by the Deogiri bank for the same period.

Table No : 4.11

Analysis of amount Advanced under Priority Sector lending by Deogiri

bank, Aurangabad.

(Rs. In thousands)

Sr.

NoYear

Amount

Advanced

(Rs)

Agricul-

ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

(Rs)

Small

Business

Enterprise

s

(Rs)

Professi

on-als &

Self

Employe

d

Persons

(Rs)

Educati

o-nal

Loans

(Rs)

Housing

Loans

(Rs)

Consu

mption

Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11 12

011995

- 96

181687

(100)

2452

(1.34)

67287

(37.03)

31269

(17.21)

19838

(10.91)

937

(0.51)

32752

(18.02)

406

(0.22)

26746

(14.72)Nil

021996

- 97

273817

(100)

1159

(0.42)

102742

(37.52)

42744

(15.61)

24772

(9.04)

6068

(2.21)

57360

(20.94)

848

(0.30)

38124

(13.92)Nil

031997

- 98

431303

(100)

4895

(1.13)

158015

(36.63)

75967

(17.61)

40986

(9.50)

19697

(4.56)

73469

(17.03)

933

(0.216)

57341

(13.29)Nil

041998

- 99

450255

(100)

6047

(1.34)

172779

(38.37)

53889

(11.96)

47705

(10.59)

11543

(2.56)

70675

(15.69)

764

(0.16)

86853

(19.28)Nil

05 1999


062000

- 01

1113854

(100)

32521

(2.91)

434483

(39.00)

97177

(8.72)

113837

(10.22)

64441

(5.78)

128043

(11.49)

5680

(0.50)

237672

(21.33)Nil

072001

- 02

1419897

(100)

70380

(4.95)

436498

(30.74)

90774

(6.39)

173878

(12.24)

51930

(3.65)

310236

(21.84)

6760

(0.47)

279441

(19.68)Nil

082002

- 03

1403294

(100)

48622

(3.46)

643058

(45.82)

88472

(6.30)

155728

(11.09)

32556

(2.31)

112776

(8.03)

4135

(0.29)

317947

(22.65)Nil

092003

- 04

1664076

(100)

90899

(5.46)

733066

(44.05)

78204

(4.69)

188771

(11.34)

79230

(4.76)

110776

(6.65)

7625

(0.45)

375505

(22.56)Nil

102004

- 05

1855425

(100)

204997

(11.04)

660337

(35.58)

53019

(2.85)

252208

(13.59)

106282

(5.72)

92652

(4.99)

7183

(0.38)

455493

(24.54)

23254

(1.25)




116

It is also revealed that the amount advanced to housing loans by

Deogiri bank during 1995-96 to 2004-05 has shown increasing trend. The

amount advanced to housing loans in 1995-96 was Rs. 26746 thousands. In

2004-05, it has increased to Rs. 455493 thousands. It indicates an increase

of 17.03 times over the period of 10 years from 1995-96 to 2004-05. It is

also seen that the amount advanced to cottage and small-scale industries by

Deogiri bank, Aurangabad has continuously increased from Rs. 67287

thousands in 1995-96 to Rs. 733066 thousands in 2003-04. However, it has

declined to Rs. 660337 thousands in 2004-05.

It is further revealed that the amount advanced to retail traders by

Deogiri bank, Aurangabad during 1995-96 to 2004-05 has shown increasing

trend except the year 2002-03 in which it was approximately 10% lower

than the year 2001-02. The amount advanced to retail traders in 1995-96

was Rs. 19838 thousands. In 2004-05, it was Rs. 252208 thousands. It has

increased by 12.71 times over the period of 10 years from 1995-96 to 2004-

05.

It is also seen that the amount advanced to agriculture by Deogiri

bank, Aurangabad during 1995-96 was Rs. 2452 thousands. It has increased

at a high rate from 2000-01 and reached the highest level of Rs. 204997

thousands in 2004-05. The amount advanced to agriculture has increased by

83.60 times during the period of 10 years from 1995-96 to 2004-05.

It is seen that the amount advanced to small business enterprises by

Deogiri bank, Aurangabad during 1995-96 was Rs. 937 thousands. It has

increased to the highest level of the period under study to Rs. 106282

thousands in 2004-05. It has increased by 113.42 times over a period of 10

years from 1995-96 to 2004-05.

117

This study revealed that the relative importance of agriculture, retail

traders, small business enterprises, and housing loan has increased over the

period of time.

It is also seen that during the period from 1995-96 to 2003-04 there

were no consumption loan granted by Deogiri bank. It has granted

consumption loans only during the terminal year of this study. Amount

advanced under this sub-sector was negligible.

The table no. 4.12 reveals the salient features of amount advanced to

priority sector by Peoples’ bank, Jalna during the period from 1995-96 to

2004-05.

It is revealed from the table no. 4.12 that the amount of advanced

under priority sector lending by Peoples’ bank, Jalna during the period of 10

years from 1995-96 to 2004-05 has shown the increasing trend from 1995-

96 to 2002-03. There after it has declined in 2003-04 and 2004-05. The

total amount of advanced under priority sector lending by Peoples’ bank,

Jalna in 1995-96 was Rs. 99206 thousands. It reached the highest level of

Rs. 301577 thousands in 2002-03 then reduced to Rs. 278220 thousands in

2004-05. It indicates an increase of 2.80 times over a period of 10 years

from 1995-96 to 2004-05.

It is revealed from the table no. 4.12 that the amount of advanced to

various sub-sectors of priority sector by Peoples’ bank over a period of 10

years from 1995-96 to 2004-05 has also shown similar trend as shown by

the limits sanctioned by the Peoples’ bank for the same period.

118

It is seen that the amount advanced to all the sub-sectors of priority

sector lending by the Peoples’ bank, Jalna during 1995-96 to 2004-05 has

shown fluctuating trend.

Table No. 4.12

Analysis of Amount Advanced under priority Sector Lending by


(Rs. In thousands)

Sr.

NoYear

Amount

Advanc

ed

(Rs)

Agricul

-ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

(Rs)

Small

Business

Enterprise

s

(Rs)

Professio

n-als &

Self

Employe

d

Persons

(Rs)

Educati

o-nal

Loans

(Rs)

Housin

g Loans

(Rs)

Consump

tion

Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11 12

011995

- 96

99206

(100)

667

(0.67)

58992

(59.46)

1091

(1.09)

11419

(11.51)

16598

(16.73)

2185

(2.20)

766

(0.77)

7251

(7.3)

237

(0.23)

021996

- 97

150582

(100)

2962

(1.96)

65627

(43.58)

9842

(6.53)

19798

(13.14)

36162

(24.01)

4447

(2.95)

1394

(0.92)

9403

(6.24)

947

(0.62)

031997

- 98

145158

(100)

2763

(1.90)

43243

(29.79)

10997

(7.57)

27374

(18.85)

41111

(28.32)

5104

(3.51)

1680

(1.15)

12869

(8.88)

017

(0.011)

041998

- 99

160705

(100)

3034

(1.88)

42789

(26.62)

1782

(1.10)

41126

(25.59)

39750

(24.73)

5329

(3.31)

1327

(0.82)

25557

(15.90)

11

(0.006)

051999

-

2000

195400

(100)

2894

(1.48)

44676

(22.86)

2635

(1.34)

44335

(22.68)

46475

(23.78)

7544

(3.86)

957

(0.48)

45870

(23.47)

14

(0.007)

062000

- 01

266438

(100)

1925

(0.72)

53413

(20.04)

3901

(1.46)

46506

(17.45)

64307

(24.13)

7544

(2.83)

1354

(0.50)

87479

(32.83)

09

(0.003)

072001

- 02

291294

(100)

2013

(0.69)

75602

(25.95)

4282

(1.46)

49006

(16.82)

64017

(21.97)

9275

(3.18)

1306

(0.44)

85782

(29.44)

11

(0.003)

082002

- 03

301577

(100)

1612

(0.53)

76832

(25.47)

3537

(1.17)

46315

(15.35)

76172

(25.25)

8305

(2.75)

852

(0.28)

87869

(29.13)

83

(0.02)

092003

- 04

296121

(100)

1795

(0.60)

77512

(26.17)

4164

(1.40)

50132

(16.92)

68987

(23.29)

8021

(2.70)

807

(0.27)

84421

(28.50)

282

(0.02)

102004

- 05

278220

(100)

2904

(1.04)

89478

(32.16)

3598

(1.29)

13868

(4.98)

70929

(25.49)

8641

(3.10)

1170

(0.42)

86669

(31.15)

963

(0.34)



119

It is also seen that the amount advanced to consumption loans during

1995-96, 1996-97 and 2002-03 to 2004-05 were relatively higher than the

amount advanced during 1997-98 to 2001-02. It was almost negligible

during 1997-98 to 2001-02.

The relative share of amount advanced to cottage and small scale

industries in total amount advanced by Peoples’ bank, Jalna in 1995-96

were 59.46%. There after its share in amount advanced to priority sector

has continuously declined till 2000-01 and reached to the lowest level of

20.04%. In 2004-05, it reached at 32.16%. It means that the relative

importance of cottage and small-scale industries has declined during the

period 1995-96 to 2004-05. It is seen that the share of cottage and small-

scale industries during 1999-2000 to 2003-04 was lower than the share of

housing loans.

The relative share of amount advanced to housing loans in total

amount advanced under priority sector lending by Peoples’ bank, Jalna was

7.3% in 1995-96. It has successively increased and reached the highest

level of 32.83% in 2000-01. It was 31.15% in 2004-05.

The relative share of amount advanced to retail traders in total amount

advanced under priority sector lending in 1995-96 was 11.51%. It has

continuously increased and reached its highest level of 25.59% in 1998-99.

There after from 1999-00 to 2004-05 it has shown continuously declining

trend and reached its lowest level of 4.98% in 2004-05.

The relative share of amount advanced to small business enterprises

in total amount advanced under priority sector in 1995-96 was 16.73%. It

was at its highest level of 28.32% in 1997-98. In 2004-05, it was at 25.49%.

120

The table no. 4.12 revealed that the relative importance of housing

loans and small business enterprises have increased during the priority

under study. On the other hand, the relative importances of cottage and

small scale industries and retail traders have declined during the same

period.

Analysis of Balance Outstanding under Priority Sector Lending

The study of balance outstanding under priority sector lending by

urban banks is essential to reveal the effectiveness or otherwise of the

lending policy and the collection policy of the urban banks.

The table no. 4.13 reveals the salient features of balance outstanding

under priority sector lending by Deogiri bank, Aurangabad during the period

from 1995-96 to 2004-05.

It is revealed from table no. 4.13 that the amount of balance

outstanding under priority sector lending by Deogiri bank has shown

increasing trend during the period from 1995-96 to 2004-05 except the year

1998-99 in which it has declined marginally from the amount of balance

outstanding for the year 1997-98. The amount of total balance outstanding

under priority sector lending by Deogiri bank for the year 1995-96 was Rs.

145377 thousands. In 2004-05, it was Rs. 1576484 thousands. It indicates an

increase of 10.84 times over a period of 10 years from 1995-96 to 2004-05.

121

Table No: 4.13

Analysis of Balance Outstanding under Priority Sector Lending by

Deogiri Bank

(Rs. In thousands)

Sr.

N

oYear

Total

Balance

outstand-

ing

(Rs)

Agricul

-ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

(Rs)

Small

Business

Enterprise

s

(Rs)

Professi

on-als &

Self

Employe

d

Persons

(Rs)

Educati

o-nal

Loans

(Rs)

Housing

Loans

(Rs)

Consu

mption

Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11 12

011995

- 96

145377

(100)

2689

(1.84)

59156

(40.69)

20066

(13.08)

16179

(11.12)

708

(0.48)

24687

(16.98)

365

(0.25)

21527

(14.80)Nil

021996

- 97

217375

(100)

986

(0.45)

85370

(39.27)

31328

(14.41)

20368

(9.37)

5310

(2.44)

37904

(17.43)

733

(0.33)

35376

(16.27)Nil

031997

- 98

364936

(100)

4037

(1.10)

145983

(40.00)

59389

(16.27)

35724

(9.78)

18951

(5.18)

57032

(15.63)

717

(0.19)

43103

(11.80)Nil

041998

- 99

357628

(100)

5005

(1.39)

141897

(39.67)

36321

(10.15)

42273

(11.82)

10265

(2.87)

53301

(14.90)

734

(0.20)

67832

(18.96)Nil

05 1999


062000

- 01

957968

(100)

24004

(2.50)

410100

(42.80)

71308

(7.44)

98636

(10.29)

52344

(5.46)

102163

(10.66)

4829

(0.50)

194584

(20.31)Nil

072001

- 02

1125196

(100)

50249

(4.46)

349341

(31.04)

60054

(5.33)

128825

(11.44)

33345

(2.96)

273909

(24.34)

4674

(0.41)

224799

(19.97)Nil

082002

- 03

1182491

(100)

39497

(3.34)

559134

(47.28)

66302

(5.60)

146158

(12.36)

25869

(2.18)

86575

(7.32)

3609

(0.30)

255347

(21.59)Nil

092003

- 04

1351557

(100)

76838

(5.68)

625037

(46.24)

48445

(3.58)

153486

(11.35)

64767

(4.79)

80907

(5.98)

6496

(0.48)

295581

(21.86)Nil

102004

– 05

1576484

(100)

174625

(11.07)

539732

(34.23)

31560

(2.00)

237782

(15.08)

90507

(5.74)

69883

(4.43)

6643

(0.42)

406590

(25.79)

19162

(1.21)




The proportionate share of balance outstanding of Deogiri bank

against the loans granted to cottage and small-scale industries, housing

loans, retail traders and professionals and self-employed persons for the

122

period under consideration found to be much higher than the other segments

of priority sector.

The sub-sectors wise trend of the amount of balance outstanding

against the priority sector lending seems to be similar as seen in case of

limits sanctioned and amount advanced. It is seen that the amount of balance

outstanding is positively co-related with the limits sanctioned and amount of

advanced granted to various sub-sectors of priority sector lending by

Deogiri bank.

The table no. 4.14 reveals the salient features of balance outstanding

under priority sector lending by Peoples’ bank, Jalna during the period from

1995-96 to 2004-05.

123

Table No : 4.14

Analysis of Balance outstanding under priority Sector Lending by

Peoples Bank, Jalna.

(Rs. In thousands)

Sr.

NoYear

Total

Balance

outstan

d

(Rs)

Agricul

-ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

(Rs)

Small

Business

Enterpris

es

(Rs)

Professio

n-als &

Self

Employe

d

Persons

(Rs)

Educatio

-nal

Loans

(Rs)

Housin

g Loans

(Rs)

Consumpt

ion Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11 12

011995

- 96

91265

(100)

595

(0.65)

55407

(60.71)

670

(0.73)

10969

(12.01)

15533

(17.01)

1856

(2.03)

406

(0.44)

5596

(6.13)

233

(0.25)

021996

- 97

138705

(100)

2961

(2.13)

61363

(44.23)

8537

(6.15)

18584

(13.39)

34353

(24.76)

3947

(2.84)

1365

(0.98)

7567

(5.45)

28

(0.020)

031997

- 98

122364

(100)

2752

(2.24)

44446

(36.32)

8826

(7.27)

9743

(7.96)

39471

(32.25)

4896

(4.00)

1472

(1.20)

10758

(8.79)Nil

041998

- 99

154229

(100)

3059

(1.98)

42363

(27.46)

1420

(0.92)

39616

(25.68)

37196

(24.11)

4630

(3.00)

1324

(0.85)

24608

(15.95)

13

(0.008)

051999

-

2000

191160

(100)

3124

(1.63)

43963

(22.99)

1817

(0.95)

48336

(25.28)

41108

(21.50)

6551

(3.42)

806

(0.42)

45444

(23.77)

11

(0.005)

062000

- 01

252433

(100)

2279

(0.90)

54404

(21.55)

3123

(1.23)

46089

(18.25)

65068

(25.77)

6852

(2.71)

1241

(0.49)

73368

(29.06)

09

(0.003)

072001

- 02

278737

(100)

2689

(0.96)

78934

(28.31)

3014

(1.08)

47951

(17.20)

59723

(21.42)

7893

(2.83)

1566

(0.56)

76955

(27.60)

12

(0.004)

082002

- 03

275292

(100)

2202

(0.79)

75681

(27.49)

2346

(0.85)

45646

(16.58)

72919

(26.48)

7214

(2.62)

939

(0.34)

68261

(24.79)

84

(0.030)

092003

- 04

270626

(100)

1758

(0.64)

78187

(28.89)

3189

(1.17)

47027

(17.38)

66186

(24.45)

7211

(2.67)

826

(0.30)

65960

(24.37)

282

(0.10)

102004

- 05

249052

(100)

2957

(1.18)

88430

(35.50)

2670

(1.07)

13679

(5.49)

65598

(26.33)

7507

(3.01)

1167

(0.46)

66135

(26.52)

909

(0.36)



124

It is revealed from table no. 4.14 that the amount of balance

outstanding under priority sector lending by Peoples’ bank, Jalna during the

period of 10 years from 1995-96 to 2004-05 has successively increased from

Rs. 91265 thousands in 1995-96 to Rs. 278737 thousands in 2001-02. There

after it has continuously declined and reached to Rs. 249052 thousands in

2004-05. It is seen that it has increased by 2.72 times over the period of 10

years from 1995-96 to 2004-05. The reduction in the amount of balance

outstanding during last three years of this study indicates that better lending

policy/recovery was being adopted during later years of this study.

The amount of balance outstanding against the loans granted to

cottage and small-scale industries, small business enterprises, housing loans

and retail traders found to be much higher as compared to other segments of

the priority sector lending.

The proportion of balance outstanding against the loans granted to

cottage and small-scale industries was 60.71% of the total balance

outstanding in 1995-96. It was reduced to the lowest level of 21.55% in

2000-01. In 2004-05, it has reached to 35.50%.

The proportion of balance outstanding against the loans granted to

small business enterprises was 17.01% of the total balance outstanding for

the year 1995-96. It has increased to 32.25% in 1997-98. In 2004-05, it was

at 26.33%.

The proportion of balance outstanding against the housing loans was

6.13% of the total balance outstanding for the year 1995-96. It was highest

at 29.06% in 2000-01. In 2004-05, it was at 26.52%.

125

The proportion of balance outstanding against the loans to retail

traders was 12.01% of the total balance outstanding for the year 1995-96. It

was highest at 25.68% in 1998-99. In 2004-05, it was at 5.49%.

The proportionate share of cottage and small-scale industries, small

business enterprises, housing loans and retail traders in the amount of

balance outstanding in higher mainly due to higher amount of loans granted

to these sectors by the Peoples’ bank, Jalna.

Analysis of Amount of Overdue under Priority Sector Lending

The study of amount of overdue under priority sector lending is

important from the point of view of effectiveness of lending policy and

recovery policy, effectiveness of management decisions and the efficiency

of the staff members of the lending bank.

The table no. 4.15 reveals the salient features of the amount of

overdue under priority sector lending by Deogiri bank, Aurangabad during

the period from 1995-96 to 2004-05.

126

Table No: 4.15

Analysis of Amount of Overdue under Priority Sector Lending by

Deogiri Bank.

(Rs. In thousands)

Sr.

NoYear

Total

Amount

of

overdues

(Rs)

Agricul

-ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

(Rs)

Small

Business

Enterprise

s

(Rs)

Professi

on-als &

Self

Employe

d

Persons

(Rs)

Educati

o-nal

Loans

(Rs)

Housing

Loans

(Rs)

Consu

mption

Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11 12

011995

- 96

19552

(100)

1979

(10.12)

5293

(27.07)

3526

(18.03)

4230

(21.63)

461

(2.35)

3648

(18.65)

023

(0.11)

392

(2.00)Nil

021996

- 97

21467

(100)

533

(2.48)

6503

(30.29)

2884

(13.43)

3134

(14.59)

416

(1.93)

6427

(29.93)

016

(0.07)

1554

(7.23)Nil

031997

- 98

28407

(100)

710

(2.50)

12204

(42.97)

3446

(12.13)

3996

(14.07)

1118

(3.93)

4795

(16.88)

041

(0.14)

2097

(7.38)Nil

041998

- 99

23044

(100)

269

(1.16)

11190

(48.55)

2016

(8.74)

2475

(10.74)

430

(1.86)

3998

(17.34)Nil

2666

(11.56)Nil

05 1999

-00N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. N. A. Nil

062000

- 01

75894

(100)

4606

(6.06)

23946

(31.55)

7853

(10.34)

10201

(13.44)

2502

(3.29)

11565

(15.23)

1005

(1.32)

14216

(18.73)Nil

072001

- 02

88167

(100)

3266

(3.70)

35583

(40.35)

4789

(5.43)

10185

(11.55)

3717

(4.21)

12101

(13.72)

1787

(2.02)

16739

(18.98)Nil

082002

- 03

109660

(100)

6483

(5.91)

49785

(45.39)

5320

(4.85)

9811

(8.94)

3440

(3.13)

21427

(19.53)

1131

(1.03)

12263

(11.18)Nil

092003

- 04

178818

(100)

9584

(5.35)

86369

(48.29)

6548

(3.66)

27702

(15.49)

4727

(2.64)

21467

(12.00)

960

(0.53)

21461

(12.00)Nil

102004

– 05

190817

(100)

12035

(6.31)

98155

(51.43)

7066

(3.70)

29502

(15.46)

5360

(2.81)

13864

(7.27)

1024

(0.53)

17086

(8.96)

6725

(3.52)

Total735826

(100)

39465

(5.36)

329028

(44.71)

43448

(5.90)

101236

(13.75)

22171

(3.01)

99292

(13.49)

5987

(0.81)

88474

(12.02)

6725

(0.91)




127

It is revealed from the table no. 4.15 that the amount of overdue under

priority sector lending by Deogiri bank, Aurangabad for the period of 10

years from 1995-96 to 2004-05 has increased from Rs. 19552 thousands in

1995-96 to Rs. 190817 thousands in 2004-05. it is seen that the amount of

overdue under priority sector lending during the period of this study has

continuously increased expect the year 1998-99 in which it has declined to

Rs. 23044 thousands as compared to Rs. 28407 in 1997-98. It is also

revealed that the amount of overdue under the priority sector lending by

Deogiri bank, Aurangabad has increased by 9.75 times during the period of

10 years from 1995-96 to 2004-05.

It is also revealed that the proportionate share of amount of overdue

under loans to cottage and small-scale industries was much higher than the

amount of overdue of other sub-sectors of priority sector. This phenomenon

has been observed throughout the period under consideration for this study.

After cottage and small-scale industries, the amount of overdue under loans

to retail traders, professional and self-employed persons and housing loans

were relatively higher than the remaining sub-sectors of the priority sector.

The amount of overdue under cottage and small-scale industries was

Rs. 5293 thousands in 1995-96. In 2004-05, it was Rs. 98155 thousands. It

indicates that this has increased by 18.54 times over the period of 10 years

from 1995-96 to 2004-05.

The amount of overdue against the loans to retail traders has sharply

increased during 2003-04. It was Rs. 4230 thousands in 1995-96. In 2004-

05, it was Rs. 29502 thousands.

128

The amount of overdue under housing loans was Rs. 392 thousands in

1995-96. It was at its highest level of Rs. 21461 thousands in 2003-04. In

2004-05, it was at Rs. 17086 thousands. It indicates that, it has increased by

43.58 times during the period of 10 years from 1995-96 to 2004-05.

The proportionate share of amount of overdue against the loans to

cottage and small industries was at 27.07 % in 1995-96. It was at 51.43% in

2004-05. This is the cause of concern for the management of Deogiri bank.

The table no. 4.16 reveals the salient features of the amount of

overdue under priority sector lending by Peoples’ bank, Jalna during the

period from 1995-96 to 2004-05.

It is revealed from the table no. 4.16 that the amount of overdue under

priority sector lending by Peoples’ bank, Jalna for the period of 10 years

from 1995-96 to 2004-05 has increased from Rs. 29115 thousands in 1995-

96 to Rs. 48681 thousands in 2004-05. However, it is also seen that the

amount of overdue during 1998-99 was at its lowest level of Rs. 20561

thousands. It was at its highest level of Rs. 53992 thousands in 2003-04. It

is also revealed that the amount of overdue under the priority sector lending

by Peoples’ bank, Jalna has increased by 1.67 times during the period of 10

years from 1995-96 to 2004-05.

It is also revealed that the proportionate share of amount overdue

under loans to cottage and small scale industries, small business enterprises,

retail traders and housing loans found to be much higher than the other

segments of priority sector lending by Peoples’ bank, Jalna for the period of

10 years from 1995-96 to 2004-05.

129

Table No: 4.16

Analysis of Amount of Overdue under Priority Sector Lending by


(Rs. In thousands)

Sr.

NoYear

Total

Amount

Advance

Agricul

-ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

(Rs)

Small

Business

Enterprise

s

(Rs)

Professi

on-als &

Self

Employe

d

Persons

(Rs)

Educati

o-nal

Loans

(Rs)

Housing

Loans

(Rs)

Consu

mption

Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11 12

011995

- 96

29115

(100)

24

(0.08)

20275

(69.63)

391

(1.34)

2928

(10.05)

2093

(7.18)

525

(1.80)

28

(0.096)

2851

(9.79)Nil

021996

- 97

27528

(100)

894

(3.24)

18540

(67.34)

147

(0.53)

2640

(9.59)

2032

(7.38)

453

(1.84)

37

(0.130)

2785

(10.11)Nil

031997

- 98

23234

(100)

251

(1.08)

16355

(70.39)

458

(1.97)

458

(1.97)

2942

(12.66)

370

(1.59)

17

(0.07)

2383

(10.25)Nil

041998

- 99

20561

(100)

305

(1.48)

12058

(58.64)

10

(0.048)

2243

(10.90)

3674

(17.86)

470

(2.28)

05

(0.02)

1796

(8.73)Nil

051999

-

2000

20875

(100)

286

(1.37)

10401

(49.82)

1387

(6.64)

3068

(14.69)

4087

(19.57)

228

(1.09)

05

(0.02)

1413

(6.76)Nil

062000

- 01

23967

(100)

217

(0.90)

11070

(46.18)

1251

(5.21)

3674

(15.32)

5670

(23.65)

478

(1.99)

05

(0.02)

1602

(6.68)Nil

072001

- 02

37007

(100)

107

(0.289)

11932

(32.24)

628

(1.69)

6463

(17.46)

13487

(36.44)

1416

(3.82)

04

(0.01)

2970

(8.02)Nil

082002

- 03

45912

(100)

167

(0.36)

9994

(21.76)

696

(1.51)

7336

(15.97)

20898

(45.51)

1331

(2.89)

04

(0.01)

5486

(11.94)Nil

092003

- 04

53992

(100)

197

(0.36)

13088

(24.24)

315

(0.58)

12135

(22.47)

19783

(36.64)

1651

(3.05)

22

(0.04)

6801

(12.59)Nil

102004

– 05

48681

(100)

156

(0.32)

17657

(36.29)

504

(1.03)

1899

(3.90)

19451

(39.95)

2089

(4.29)

23

(0.047)

6902

(14.17)Nil



130

It is seen that the amount of overdues under priority sector lending to

cottage and small-scale industries were much higher than the other priority

sectors during the 1995-96 to 2000-01. However, since 2001-02 to 2004-05

the amount of overdues under priority sector lending to small business

enterprises was much higher than amount of overdues relating to other

sectors of priority sector lending. It means that the position of cottage and

small-scale industries as regards to amount of overdues has considerably

improved over the period of time under consideration. At the same time, the

position of small business enterprises has considerably deteriorated over the

period of time under consideration for this study. The position of loans to

retail traders as regards the amount of overdues has deteriorated to some

extent over the period of time. It means that the lending policy was faulty as

regards to loans granted to small business enterprises and to some extent

loan granted to retail traders by the Peoples’ bank, Jalna or there might be

willful default on the part of borrowers under priority sector lending to

small business enterprises and retail traders.

Sub-sector wise average amount of advances per borrowing unit under

priority sector lending.

The relative importance of the sub-sector of priority sector can be

revealed through proper analysis of the average amount of advances per

borrowing units of these sub-sectors. This analysis will help in devising a

proper policy approach towards the priority sector lending.

The table no. 4.17 and table no. 4.18 gives an insight into the average

amount advances to different sub-sectors under the priority sector lending

by Deogiri bank, Aurangabad and Peoples’ Bank, Jalna.

131

Table No: 4.17


priority sector by Deogiri Bank, Aurangabad.

Sr.

NoYear

Agricul-

ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transport

Operat-ors

Retail

Traders

(Rs)

Small

Business

Enterpris

es

(Rs)

Professio

n-als &

Self

Employe

d

Persons

(Rs)

Educatio

-nal

Loans

(Rs)

Housing

Loans

(Rs)

Consump

tion

Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11

011995

- 96 106608 417931 107453 38371 21790 54046 10410 22269 Nil

021996

- 97 57550 516291 129920 49742 99475 81825 13046 21381 Nil

031997

- 98 99897 614844 153779 53928 189394 94433 18660 28094 Nil

041998

- 99 65728 919037 151800 82108 114287 155671 47750 44769 Nil

051999

-

2000

N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A.

062000

- 01 86722 1266714 193966 118703 229327 231961 6010 51035 Nil

072001

- 02 147238 1124994 182643 141249 254558 513635 10384 55149 Nil

082002

- 03 90207 1255972 148942 114002 157275 187024 11680 56574 Nil

092003

- 04 132699 1426198 117247 107256 273206 198879 17173 65169 Nil

102004

– 05 216698 1467741 159695 124979 306288 149922 16105 79078 108665

N.A. - Not available

Source : Deogiri bank, Aurangabad, Priority sector Reports.

132

Graph No. 4.5 (a)

0

200000

400000

600000

800000

1000000

1200000

1400000

1600000

1995- 96 1996- 97 1997- 98 1998- 99 1999-2000 2000- 01 2001- 02 2002- 03 2003- 04 2004 – 05

Sub-sector wise average amount of advances per borrowing unit under priority sector

by Deogiri Bank, Aurangabad

Agricul-ture

Cottage SSI

Road & Water

Transport

Operat-ors

Retail Traders

Graph No. 4.5 (b)

It is seen from the table no. 4.17 that the average amount of advances

per borrowing unit under the priority sector lending to agriculture by

Deogiri Bank, Aurangabad in 1995-96 was Rs. 106608. It has increased to

133

Rs. 216698 in 2004-05. However, there were continuous up and down in the

average amount of advances per borrowing unit to agriculture and allied

activity during the period 1995-96 to 2004-05. Over the period of ten years

from 1995-96 to 2004-05, this has increased by more than 2.03 times.

The average amount of advances per borrowing unit by Deogiri Bank,

Aurangabad to cottage and SSI has continuously increased during the period

from 1995-96 to 2004-05 except the year 2001-02. In 1995-96, it was Rs.

417913. It has increased to Rs. 1467741 in 2004-05. Over the period of ten

year, it has increased by 3.51 times.

The average amount of advances per borrowing units to road and

water transport operators by Deogiri Bank, Aurangabad during the period

from 1995-96 to 2004-05 shows up and down trend. In 1995-96 it was Rs.

107453. It has increased to Rs. 159695 in 2004-05. Over the period of ten

years from 1995-96 to 2004-05, it has increased by 1.48 times. The average

amount of retail traders by Deogiri Bank, Aurangabad during the period

from 1995-96 to 2004-05 shows that it has increased continuously increase

from Rs. 38317 in 1995-96 to Rs. 141249 in 2001-02, there after it has

declined during next two year from 2002-03 to 2003-04 and again increased

in the year 2004-05. Over the period of ten years from 1995-96 to 2004-05,

it has increased by 3.26 times.

The average amount of advances per borrowing unit to small business

enterprises by Deogiri Bank, Aurangabad shows up and down trend during

the period of ten years from 1995-96 to 2004-05. Over the period of ten

years from 1995-96 to 2004-05, it has increased by 14.05 times.

134

The average amount of advances per borrowing unit to professionals

and self-employed persons by Deogiri Bank, Aurangabad shows

continuously increase during the period from 1995-96 to 2001-02.

Thereafter during the period from 2002-03 to 2004-05 it shows up and down

trend. Over a period of ten year from 1995-96 to 2004-05, It has increased

by 2.77 times.

The average amount of advances per borrowing unit for educational

loan by Deogiri Bank, Aurangabad shows continues increase during the

period from 1995-96 to 1998-99. The year 1998-99 the increase was very

sharp. In 2000-01, it has sharply declined to the lowest level, Again from

2001-02 to 2002-03, it has increased and in 2004-05, it has slightly declined

over the period of ten year from 1995-96 to 2004-05, it has increased by

1.55 times.

The average amount of advances per borrowing unit for housing loans

by Deogiri Bank, Aurangabad shows continues increase during the period

from 1995-96 to 2004-05, it has increased by 3.55 times.

Deogiri bank did not granted consumption loan during 1995-96 to

2003-04. However, in 2004-05, it has granted the consumption loans and the

average amount of consumption loan per borrowing units was Rs. 108665.

It is seen from the table no. 4.18 that the average amount of advances

per borrowing unit under the priority sector lending to agriculture and allied

activities by the Peoples’ Bank, Jalna for the per of ten years from 1995-96

to 2004-05, shows small change except the year 1997-98, in which it has

increased sharply and immediately in next year declined sharply. During the

period of ten years, it has increased by 1.30 times.

135

The average amount of advances per borrowing unit to cottage and

SSI by the Peoples’ bank, Jalna shows up and down trend during the period

of ten years from 1995-96 to 2004-05. However, over the period from 1995-

96 to 2004-05, it has increased by 2.80 times.

Table No: 4.18


priority sector by Peoples’ Bank, Jalna.

Sr.

NoYear

Agricul

-ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

(Rs)

Small

Business

Enterprises

(Rs)

Professio

n-als &

Self

Employe

d Persons

(Rs)

Educatio

-nal

Loans

(Rs)

Housing

Loans

(Rs)

Consum

ption

Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11

011995-

9612826 404054 121222 8304 27254 42843 11606 7968 6236

021996-

9730854 489753 182259 18063 51293 75372 5666 9393 23675

031997-

9815265 360358 164134 24616 57902 68053 6387 9483 739

041998-

9915639 396194 127285 36138 69614 66612 6031 15042 733

05 1999-

200015151 442336 75285 36399 87031 40127 7656 19378 1000

062000-

0111526 562242 97525 37414 122957 41450 7480 25202 900

072001-

0211183 795810 122342 42539 117895 48307 7963 25845 846

082002-

0311681 76832 95594 40627 130208 44891 8037 28640 5533

092003-

0413914 851780 52708 49052 128947 48908 9170 30533 9724

102004 –

0516689 1132632 43349 87220 130144 41344 14440 33540 26750

Source : Peoples’ Bank, Jalna, Priority sector Reports.

136

Graph No. 4.6 (a)

0

200000

400000

600000

800000

1000000

1200000

1995- 96 1996- 97 1997- 98 1998- 99 1999-2000 2000- 01 2001- 02 2002- 03 2003- 04 2004 – 05

Sub-sector wise average amount of advances per borrowing unit under priority sector by Peoples’ Bank, Jalna

Agricul-ture

Cottage SSI

Road & Water

Transport Operat-

ors

Retail Traders

X-Axis : Rs.,

Y-Axis : Year

Graph No. 4.6 (b)

0

20000

40000

60000

80000

100000

120000

140000

1995- 96 1996- 97 1997- 98 1998- 99 1999-2000 2000- 01 2001- 02 2002- 03 2003- 04 2004 – 05

Sub-sector wise average amount of advances per borrowing unit under priority sector by Peoples’ Bank, Jalna

Small Business

Enterprises

Profession-als &

Self Employed

Persons

Educatio-nal

Loans

Housing Loans

Consumption

Loans

137

The average amount of advances per borrowing unit to road and water

transport operators by the Peoples’ Bank, Jalna shows up and down trend

during the period of ten years from 1995-96 to 2004-05. However, over the

same period it has declined by 64%.

The average amount of advances per borrowing unit to retail traders

from 1995-96 to 2004-05, has continuously increased except the year 2002-

03. Over the period of ten years from 1995-96 to 2004-05, it has increased

by 10.50 times.

The average amount of advances per borrowing unit to small business

enterprises from 1995-96 to 2000-01 has shown continuously increasing

trends. There after it has shows up and down trend. However, over the

period of ten years from 1995-96 to 2004-05, it has increased by 4.7 times.

The average amount of advances per borrowing unit to professionals

and self-employed persons by Peoples’ Bank, Jalna during the period 1995-

96 to 2004-05 shows continuously up and down trend. It was highest at Rs.

75372 in 1996-97, over the period of ten years from 1995-96 to 2004-05, it

has declined by 3.5%.

The average amount of advances per borrowing units for education

loan shows up and down trend during 1995-96 to 1998-99. However, since

1999-2000, it shows continuously increasing trend till 2004-05. Over the

period from 1995-96 to 2004-05, it has increased by 1.24 times.

138

The average amount of advances per borrowing unit for housing loan

by Peoples’ Bank, Jalna during 1995-96 to 2004-05 shows continuously

increasing trend. However, over the period of ten years from 1995-96 to

2004-05, it has increased by 4.21 times.

The average amount of advances per borrowing unit for consumption

loan by Peoples’ Bank, Jalna during 1995-96 to 2004-05 shows up and

down trend. However, over the period from 1995-96 to 2004-05, it has

increased by 4.29 times.

Sub-sector wise average amount of overdue per borrowing unit under

priority sector lending.

The average amount of overdue is a key indicator of the performance

of the financial institutions specially the banks. This indicator provides an

insight into the lending policies and the recovery policies adopted by the

banks. It also helps the bank in devising proper lending and recovery policy.

The table no. 4.19 and table no. 4.20 gives an insight into the average

amount of overdue per borrowing unit to different sub-sectors under the

priority sector lending by Deogiri Bank, Aurangabad and Peoples’ Bank,

Jalna during the period from 1995-96 to 2004-05.

It is seen from table no. 4.19 that the average amount of overdue per

borrowing unit relating to agriculture and allied activities under priority

sector in case of Deogiri Bank during 1995-96 to 1998-99, there after it

shows up and down trend. However, over the period of ten years during

1995-96 to 2004-05, it has declined by 69%.

139

The average amount of overdue per borrowing unit relating to cottage

and SSI under priority sector has continuously increased during 1995-96 to

2004-05, except 1996-97. Over the period of ten years from 1995-96 to


The average amount of overdue per borrowing unit relating to road

and water transport operators under priority sector lending by Deogiri Bank

has declined during 1995-96 to 1998-99, there after it shows up and down

trend, however, over the period of ten years from 1995-96 to 2004-05, it has


The average amount of overdue per borrowing unit relating to retail

traders under priority sector lending by Deogiri bank has declined during

1995-96 to 1998-99, there after it shows up and down trend. However, over

the period of ten years from 1995-96 to 2004-05, it has increased by 1.79

times.

The average amount of overdue per borrowing unit relating to small

business enterprises under priority sector lending by Deogiri Bank,

Aurangabad during 1995-96 to 2004-05, shows up and down trend.

However, over the period of ten years from 1995-96 to 2004-05, it has


140

Table No: 4.19


priority sector by Deogiri Bank, Aurangabad.

Sr.

NoYear

Agricul-

ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

(Rs)

Small

Business

Enterprises

(Rs)

Professio

n-als &

Self

Employe

d Persons

(Rs)

Educatio

-nal

Loans

(Rs)

Housing

Loans

(Rs)

Consum

ption

Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11

011995-

9686043 32875 12116 818 10720 6019 589 326 Nil

1996-

9726650 32678 8765 6293 6819 9168 246 871 Nil02

1997-

9803 14489 47486 6975 5257 10750 6163 820 1027 Nil

1998-

992923 5952104 5678 4259 4257 8806 Nil 1374 Nil

051999-

2000N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A. N.A.

062000-

0113428 69813 15674 10637 8903 20951 1063 3052 Nil

072001-

028417 91708 9635 8273 18220 29934 2745 3303 Nil

082002-

0312662 97236 8956 7182 16618 35533 3194 2182 Nil

092003-

0418645 168033 9817 15739 16300 38540 2162 3724 Nil

102004

– 05 26744 218122 21283 14619 15446 22433 2295 2966 31425

N.A. - Not available

Source : Deogiri bank, Aurangabad, Priority sector lending.

141

Graph No. 4.7 (a)

0

50000

100000

150000

200000

250000

1995- 96 1996- 97 1997- 98 1998- 99 1999-2000 2000- 01 2001- 02 2002- 03 2003- 04 2004 – 05

Sub-sector wise average amount of overdue per borrowing unit under priority sector by Deogiri Bank,

Aurangabad

Agricul-ture

Cottage SSI

Road &WaterTransportOperat-ors

RetailTraders

X-Axis : Rs.,

Y-Axis : Year

Graph No. 4.7 (b)

0

5000

10000

15000

20000

25000

30000

35000

40000

1995- 96 1996- 97 1997- 98 1998- 99 1999-

2000

2000- 01 2001- 02 2002- 03 2003- 04 2004 – 05

Sub-sector wise average amount of overdue per borrowing unit under priority sector

by Deogiri Bank, Aurangabad

Small Business

Enterprises

Profession-als &

Self Employed

Persons

Educatio-nal Loans

Housing Loans

Consumption Loans

142

The average amount of overdue per borrowing unit relating to

professionals and self-employed persons under priority sector lending by

Deogiri Bank, Aurangabad shows up and down trend during 1995-96 to

1998-99, there after it shows upward trend during 2000-01 to 2003-04 &

then it has declined in 2004-05. However, over the period of ten years from

1995-96 to 2004-05, it has increased by 3.73 times.


educational loan under priority sector lending by Deogiri bank during 1995-

96 to 1998-99, shows up and down trend, then during 2000-01 to 2002-03

shows upward trend, then declined in 2003-04 and again increased in 2004-

05. However, over the period of ten years from 1995-96 to 2004-05, it has



housing loan under priority sector lending by Deogiri Bank, Aurangabad

during 1995-96 to 2001-02, shows continuously increasing trend, there after

during 2002-03 to 2004-05, it shows up and down trend. However, over the

period of ten years from 1995-96 to 2004-05, it has increased by 9.10 times.

It is also seen that there were no overdue relating to consumption loan

during 1995-96 to 2003-04. It was Rs. 31424 in 2004-05.

143

Table No: 4.20


priority sector by Peoples’ Bank, Jalna.

Sr.

NoYear

Agricul

-ture

(Rs)

Cottage

SSI

(Rs)

Road &

Water

Transpo

rt

Operat-

ors

Retail

Traders

(Rs)

Small

Business

Enterprises

(Rs)

Professio

n-als &

Self

Employe

d Persons

(Rs)

Educatio

-nal

Loans

(Rs)

Housing

Loans

(Rs)

Consum

ption

Loans

(Rs)

01 02 03 04 05 06 07 08 09 10 11

011995-

96461 138869 43444 2129 3436 10294 424 3132 Nil

021996-

979312 138358 2722 2408 2882 7677 150 2782 Nil

031997-

981386 136291 6835 411 4143 4933 64 1756 Nil

041998-

991572 111648 714 1971 6434 5875 22 1057 Nil

05 1999-

20001497 102980 39628 2518 7653 1212 40 596 Nil

062000-

011299 116526 31275 2955 10841 2626 27 461 Nil

072001-

02594 125600 17942 5610 24837 7375 24 894 Nil

082002-

031210 99940 18810 6435 35723 7194 37 1788 Nil

092003-

041527 143824 3987 11873 36977 10067 250 2459 Nil

102004 –

05896 223506 6072 11943 35689 9952 283 2671 Nil

Source : Peoples’ Bank, Jalna, Priority sector Reports.

144

Graph No. 4.8 (a)

Graph No. 4.8 (b)

145

It is seen from table no. 4.20 that the average amount of overdue per

borrowing unit relating to agriculture and allied activities under priority

sector lending by Peoples’ bank, Jalna during 1995-96 to 2004-05 shows up

and down trend. However, over the period of ten years from 1995-96 to


The average amount of overdue per borrowing unit relating to cottage

and SSI under priority sector lending by Peoples’ bank during 1995-96 to

1999-2000 shows continuous declining trend during 2000-01 & 2001-02, it

has increased, in 2002-03 it has declined and again increased during 2003-

04 and 2004-05. It has increased sharply in the year 2004-05. However, over

the period of ten years it has increased by 1.61 times.

The average amount of overdue per borrowing unit relating to road

and water transport operators under priority sector by Peoples’ bank, Jalna

shows continuous up and down trend during 1995-96 to 2004-05. However,

over the period of ten years from 1995-96 to 2004-05, it has declined by

86%.

The average amount of overdue per borrowing unit relating to retail

traders under priority sector lending by Peoples’ bank, Jalna initially shows

up and down trend during 1995-96 to 1997-98, there after it shows

continuous increasing trend from 1998-99 to 2004-05. However, over the

period of ten year from 1995-96 to 2004-05, it has increased by 5.6 times.

The average amount of overdue per borrowing unit relating to small

business enterprises under priority sector lending by Peoples’ Bank, Jalna

during 1995-96 to 2004-05, shows increasing trend, except for the year

146

1996-97 and 2004-05. However, over the period of ten year from 1995-96 to



professionals and self-employed persons under priority sector lending by

Peoples’ bank, Jalna during the period from 1995-96 to 2004-05, shows up

and down trend. However, over the period of ten years from 1995-96 to

2004-05, it has declined marginally by 0.03%.


education loan under priority sector lending by Peoples’ Bank, Jalna during

1995-96 to 2004-05, shows up and down trend. However, over the period of

ten year from 1995-96 to 2004-05, it has declined by 33%.


housing loan under priority sector lending by Peoples’ bank, Jalna during

the period from 1995-96 to 2000-01 shows declining trend, there after from

2001-02 to 2004-05, it shows increasing trend. However, over the period of

ten years from 1995-96 to 2004-05, it has declined by 15%.


consumption loan under priority sector lending by Peoples’ bank, Jalna

during the period from 1995-96 to 2004-05 remain Nil.

Analysis of major performance indicators of the Deogiri Bank,

Aurangabad and Peoples’ Bank, Jalna.

The performance of the banks can be measured on the basis of

various indicators namely net profit, total advances amount of overdue,

147

priority sector lending, loans to weaker sections, % of NPA and GNPA to

total advances etc.

The operative efficiency of a bank can be measured on the basis of

net profit carried by the bank during the accounting period. Net profit as a

percentage of amounts of advances is an effective tool of measuring the

performance of the banks in an objective manner.

Amount of total advances over the period of time is an effective tool

to measure the growth of the banking business achieved by the banks during

the given period of the time.

Absolute amount of overdue and the overdue as a percentage of

amount advanced during a period of time is a measure of revealing the

effectiveness of management in relation to its lending policy and recovery

policy.

Proportionate share of priority sector lending and loans to weaker

sections is a measure to reveal the social adherence of the banks and its

commitment to realize social objectives as notified by the RBI in its policy

towards priority sector lending.

Gross non-performing assets and Net non performing assets are the

important tools to measure the effectiveness of the lending policy, recovery

policy, efficiency of the staff etc.

148

Analysis of major financial indicators of the Deogiri Bank, Aurangabad

and Peoples’ Bank, Jalna.

The table no. 4.21 and table no. 4.22 shows the position of Deogiri

bank, Aurangabad and Peoples’ bank, Jalna respectively in respect of total

advances, Net profits, percentage of overdue as to amount advances,

percentage of priority sector lending, percentage of weaker section lending,

percentage of Net NPA and Gross NPA.

Table No. 4.21

Statement showing major financial indicators of Deogiri Bank,

Aurangabad.

Year Net Profit

(Rs.)

Total advances

(Rs.)

% of Net

Profit to

total

advances

% of

over

due

% of priority

sector lending

to total

advances

% of weaker

section

lending to

total advances

% of Net

NPA

% of

Gross

NPA.

1995-96 4183251 131019541 3.19 9.4 60.89 9.05 N.A. N.A.

1996- 97 12880047 209819530 6.14 6.66 56.62 8.66 N.A. N.A.

1997- 98 21120456 382572415 5.52 5.28 53.90 8.75 N.A. N.A.

1998- 99 30069559 549796185 5.47 8.01 65.04 11.65 N.A. N.A.

1999-

200033029307 906404880 3.64 5.14 67.15 N.A. 3.82 N.A.

2000- 01 43830220 1393823962 3.14 5.95 68.74 9.10 4.85 6.25

2001- 02 50152195 1764292000 2.84 N.A. 63.78 7.77 5.12 8.69

2002- 03 45129364 1969595478 2.29 9.6 60.04 9.77 6.67 12.14

2003- 04 25877472 2088518396 1.24 N.A. 64.07 17.64 7.16 15.98

2004 - 05 28145922 2474518202 1.13 11.66 63.71 15.66 5.13 13.62

N.A. : Not available

Source : Annual Reports, 1995-96 to 2004-05, Deogiri Bank, Aurangabad.

It is evident from the table no. 4.21 that the net profit of the Deogiri

Bank, Aurangabad has continuously increased from 1995-96 to 2001-02,

there after it has declined during 2002-03 and 2003-04 and again increased

in the year 2004-05, over the period of ten year from 1995-96 to 2004-05,

149

the net profit of the Deogiri Bank, Aurangabad has increased by nearly 7

times.

The total amount of advances made by the Deogiri bank, Aurangabad

has continuously increased during the period 1995-96 to 2004-05. Over the

period of ten years from 1995-96 to 2004-05, it has increased by nearly 19

times.

It is seen from the table no. 4.21 that the percentage of net profit to

total advances in 1995-96 was 3.19%. it was highest in 1996-97 at 6.14%,

there after it was continuously declined and reached at 1.13% in 2004-05.

The percentage of overdue to amount advanced shows up down trend

during the period from 1995-96 to 2004-05. However, it was highest at

11.66% in the year 2004-05.

It is evident from the table no. 4.21 that the Deogiri Bank,

Aurangabad did not achieved the target of priority sector lending in the year

1996-97 and 1997-98 as it was 56.62% and 53.90% of the total advances

respectively.

It is seen that the percentage share of weaker section lending to total

advances shows the up and down trend during the period from 1995-96 to

2004-05. However, it was highest at 17.64% in 2003-04. It is also seen that

the percentage share of weaker section advances to total advances remain

below the stipulated target of 15% during the period from 1995-96 to 2002-

03.

150

It is seen from the table no. 4.21 that the percentage of Net NPA and

Gross NPA shows up and down trend during the period from 1999-2000 to

2004-05. However, Net NPA and gross NPA both were highest in the year

2003-04. It was mainly due to the charge in the norms for classification of

assets. This has resulted in higher provisioning for NPA.

It is seen that in 2003-04 and 2004-05, the percentage of net profit to

total advances was lowest to 1.24% and 1.13 respectively. During the same

period the percentage of overdue, percentage of weaker section lending to

total advances, percentage of Net NPA and gross NPA were higher than the

earlier years. It means that the higher percentage of overdue, lending to

weaker sections, Net NPA and Gross NPA have adversely affected the

profitability of the Deogiri Bank, Aurangabad. This has happen despite the

increase in the amount of advances.

It is evident from the table no. 4.22 that the net profit of the Peoples’

Bank, Jalna has up and down trends during the period from 1995-96 to

2004-05. In 2001-02, it was at its highest level of Rs. 8894683 and

immediately in next year i.e. 2002-03, it attained the lowest level for the

period of this study at Rs. 102459. Over the period of ten year from 1995-96

to 2004-05, the net profit has decreased by nearly 83%.

151

Table No. 4.22

Statement showing major financial indicators of Peoples’ Bank, Jalna.

Year Net Profit

(Rs.)

Total

advances

(Rs.)

% of

Net

Profit

to total

advanc

es

% of

over

due

% of

priority

sector

lending

to total

advance

s

% of

weaker

section

lending

to total

advanc

es

% of

Net

NPA

% of

Gros

s

NPA.

1995-96 3003405 146518220 2.04 30.09 62.32 14.90 21.90 30.09

1996- 97 7693350 228722699 3.36 18.06 60.64 14.61 6.38 18.06

1997- 98 6519748 222501482 2.93 16.92 62.61 14.29 16.26 16.90

1998- 99 7096592 243043240 2.91 14.94 63.46 14.07 2.48 14.94

1999-

20008144119 296634581 2.75 13.35 64.46 15.06 3.00 13.35

2000- 01 8704563 371662350 2.34 12.88 67.92 15.98 4.77 12.86

2001- 02 8894683 452027228 1.97 13.69 61.66 15.53 7.14 14.03

2002- 03 102459 435914358 0.02 23.72 63.15 15.08 22.01 30.29

2003- 04 2470934 427197811 0.57 29.90 63.35 16.74 19.54 29.80

2004 -05 506000 448250424 0.11 26.06 64.65 16.48 14.71 26.48

Source : Annual Reports, 1995-96 to 2004-05, Peoples Banks, Jalna.

The total amount of advances made by the Peoples’ bank, Jalna

during the period from 1995-96 to 2004-05 shows continuous up and down

trend. However, over the period of ten year, it has increased by 3.06 times.

It is seen from table no. 4.20 that the percentage of net profit to total

advances in 1995-96 was 2.04%. It was highest in 1996-97 at 3.36%, there

after it has continuously declined at reached at 0.02 in 2002-03. In 2003-04,

it has marginally increased to 0.57% and in 2004-05 it has again declined to

0.11%.

152

The percentage of overdue to amount advanced in 1995-96 was

highest at 30.09%, there after it has continuously declined during 1996-97 to

2000-01. In 2000-01 it has reached the lowest level at 12.88%. During

2001-02 to 2003-04, it has continuously increased and in reached at 29.90%

and in 2004-05 it has declined to 26.06%.

It is evident from the table no. 4.22 that the peoples’ bank, Jalna have

achieved the target of priority sector lending during the period from 1995-96

to 2004-05 as it was more than the stipulated target of 60% in each of the

period under the study.

It is seen that the percentage share of weaker section lending to total

advances during the period from 1995-96 to 2004-05 remain between

14.07%, during the initial period from 1995-96 to 1998-99. It was

marginally lower than the target of 15%, thereafter during 1999-2000 to

2004-05 it was marginally higher than the target.

It is evident that the percentage of gross NPA at the end of year 1995-

96 was 30.09%. It has continuously declined till the year 2000-2001. There

after it has increased in 2001-02 and 2002-03. It was at the highest level of

30.29% for the year 2002-03. There after it has declined during the year

2003-04 and 2004-05. The percentage of Net NPA and shows up and down

trend during the period from 1995-96 to 2002-03. During 2003-04 and

2004-05 it had been declined as compared to the year 2002-03. The Net

NPA and gross NPA both were highest in the year 2002-03. The gross NPA

and Net NPA both were higher than the average GNPA and NNPA at

national level for the urban co-operative banks.

153

It is seen that in 2002-03, 2003-04 and 2004-05, the percentage of net

profit to total advances was lowest to 0.02%, 0.57 and 0.11 respectively.

During the same period the percentage of overdue, percentage of weaker

section lending to total advances, percentage of Net NPA and gross NPA

were higher than the earlier years accept the year 1995-96. It means that the

higher percentage of overdue, lending to weaker sections, Net NPA and

Gross NPA have adversely affected the profitability of the Peoples’ Bank,

Jalna. This has happen despite the increase in the amount of advances.

Comparison of Deogiri Bank, Aurangabad and Peoples’ bank, Jalna in

respect of major financial indicators.

On the basis of the table no. 4.21 and table no. 4.22 that the

performance of Deogiri bank, Aurangabad is much better as compared to

the Peoples’ bank, Jalna.

It is evident that the net profit of the Deogiri bank has increased by 7

times over the period from ten year from 1995-96 to 2004-05. The net profit

of the Peoples’ bank, Jalna has declined by 83% over the same period.

The total amount of advances made by the Deogiri bank has increased

by nearly 19 times over the period of ten year from 1995-96 to 2004-05. The

total amount of advances made by the Peoples’ bank, Jalna has increased by

3.06 times over the same period.

It is also evident that the percentage of net profit to total advances for

Deogiri bank was much higher than the Peoples’ bank throughout the period

of ten years from 1995-96 to 2004-05.

154

The percentage of overdue to amount advanced in case of Deogiri

bank was much lower than the Peoples’ bank throughout the period from

1995-96 to 2004-05.

It is also evident that the percentage of peoples’ bank in respect of

priority sector lending and lending to weaker section as a percentage of total

advances was slightly better than the Deogiri bank, during the period from

1995-96 to 2004-05.

It is also seen that the performance of Deogiri bank in respect of net

NPA and Gross NPA is much better. The NPA position of the Peoples’ bank

was very weak during the period from 1995-96 to 2004-05. This view can

also be supported on the basis of percentage of overdue to total advances

made by the bank which is much higher in case of the Peoples bank.

The Deogiri bank in the initial period of this study seems to be

reluctant to lend to weaker section. However, during later year it has also

achieved the target of weaker section lending.

It can be summarized that the performance of the Deogiri bank is very

good in respect of various financial indicators considered for this study. It

means that the operative efficiency, lending policy, recovery policy of the

Deogiri bank was very good despite the social obligation of priority sector

lending imposed by the RBI.

However, the performance of Peoples’ bank is very weak as

compared to the Deogiri bank. This means that the operative efficiency,

lending policy and recovery policy of the Peoples’ bank was poor.

155

The Deogiri bank seems to be more transport as its annual reports

contains more and relevant information on the performance of the bank

including NPA etc., where as the Peoples’ bank lacks the transparency as its

annual reports did not contain important information mainly information

relating to NPA etc.

It can be concluded that the priority sector lending target of 60% of

total lending by the UCB is instrumental in bringing socio-economic change

in the society through generation of employment opportunities to the masses

and encouraging the Peoples for self-employment.

It can further be concluded that the failure or weak performance of

the UCB is not because of priority sector lending but it is because of

inefficiency, improper lending and ineffective recovery policy.

Study of recent performance of the selected Urban Co-operative banks.

The study of recent performance of the selected Urban co-operative

bank was necessary to reveal and confirm or otherwise the trend of the

performance of the UCBs in the light of trend revealed for the period from

1995-96 to 2004-05.

The table no. 4.23 reveals the major performance indicators of the

Deogiri bank, Aurangabad and Peoples’ bank, Jalna for the year 2008-09.

156

Table no. 4.23

Statement showing major performance indicators of Deogiri bank,

Aurangabad and Peoples’ bank, Jalna for the year 2008-09.

Performance indicators Deogiri Bank, (%) Peoples’ bank,

Jalna (%)

1. Net Profits (Rs.) 2,97,48,753.69 88,78,236.00

2. Total advances (Rs.) 2,34,79,56,822.69 39,98,71,105.00

3. % of Net profits to total

advances

1.27 2.22

4. % of overdue 16.30 22.24

5. % of priority sector lending

to total section

65.59 69.62

6. % of weaker section

lending to total lending

15.68 22.40

7. % of Net NPA 1.67 1.95

Source : Annual reports of Deogiri bank and Peoples bank 2008-09.

It is reveled from the table no. 4.23 that the net profit as a percentage

of total advances made by Deogiri bank and Peoples’ bank during the year

was 1.27% and 2.22% respectively. The amount of overdue as a percentage

of total advances of Deogiri bank and Peoples’ bank for the year was 16.30

and 22.24% respectively. it is further seen that both the banks have achieved

the target of 60% of the total lending to priority sector and 15% of the total

lending to weaker section. It is also revealed that the Net NPA of the

Deogiri bank and Peoples’ bank for the year was at 1.67% and 1.95%

respectively.

157

References :

1) Dr. K. K. Sharma, Chief Compiler, Dr. K. G. Pathan & Dr. V. S.

Mangnale, “Intellectual’s Sandarbh Maharashtra State & District at a

Glance Vol.-II”, published by Intellectual Book Bureau, Bhopal

(2004) P. No. 638 - 662

2) Dr. K. K. Sharma, op cit, P-705-723.

3) www.rbi.org.in

4) Deogiri Banks, Aurangabad, Priority sector lending reports 1995-96

to 2004-05.

5) Peoples’ Bank, Jalna, Priority sector lending reports 1995-96 to 2004-

05.

6) Deogiri Bank, Aurangabad, Annual Reports 1995-96 to 2004-05.

7) Peoples’ Bank, Jalna, Annual Reports 1995-96 to 2004-05.

158

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CHAPTER - shodhganga.inflibnet.ac.inshodhganga.inflibnet.ac.in/bitstream/10603/90253/11/11_chapter-4.pdf · Pawan Chakki and Bibi ka maqbara. Aurangabad district is a great center