DECLARATION

I, Miss Aishwarya C. Kabade, student of B.Com 6th Semester, hereby declare that the
project "CASH MANAGEMENT OF VIJAYAPUR DISTRICT MAHILA CO-OPERATIVE BANK
LTD VIJAYAPUR" is written and submitted by me under the guidance of Tasaleema
Mam. This is my original work, completed in partial fulfillment of the requirements
for the award of UG in B.Com at B.D.E. Society's Women's Degree College, Vijayapur.
I also declare that this project has not been submitted to any other university for
the award of any degree course.
ACKNOWLEDGEMENT
I take this opportunity to express my deep and sincere gratitude to B.D.E. Society's Women's
Degree College, Vijayapur, for providing me with the opportunity to pursue my Bachelor of
Commerce at this esteemed institution.
It is a privilege and an honor to extend my heartfelt appreciation to my internal guide, Miss
Tasleem Shyarapade, from the Department of Commerce, B.D.E. Society's Women's
Degree College, Vijayapur, for her invaluable guidance and support throughout this project.
Lastly, I would like to extend my sincere thanks to everyone who has helped me, directly or
indirectly, in completing this project successfully.
LIST OF CONTENTS

Chapt Page
Particulars
er No.

1 Introduction

2 Research Design

2.1 Title of the Study

2.2 Significance of the Study

2.3 Objectives of the Study

2.4 Scope of the Study

2.5 Research Methodology

2.6 Limitations of the Study

Bank Profile

Data Analysis and Interpretation

Findings, Suggestions, and

Conclusion
EXECUTIVE SUMMARY

A key topic that plays an important role in understanding and assessing the overall capacity
and performance of a given bank is to study credit rating techniques for loans and cash
management. As a result, this topic was selected as a summer project. This project was carried
out at the Cooperative Bank.
Managing Credit Management Loans and loan technology is a very broad subject and a very
important concern in the banking sector, making it impossible to understand all the concepts at
one time. The purpose of this study is to analyze the data from recent years regarding the
progress of the bank in various priority and non-priority sectors and the amount of proportional
increase in the duration of the loan.
The next part of the report is devoted to knowledge about cooperative banks. It includes the
history of the cooperative bank and the services provided by the bank. Then, the report briefly
introduces the cooperative bank, including its history, management, objectives, and financial
situation.
The following sections provide information on loans and credit facilities provided by the bank.
This section covers the different types of loans offered by the bank, the details of these loans,
the procedures for recovering them, the actual locations of the banks, and recommendations
for improvements in the borrowing sector, as well as the coordinates of the cooperative banks.
Various suggestions for improvement are also included.

CHAPTER-I: INTRODUCTION
Banks in India started during the last decade of the 18th century in their modern meaning.
Among the first banks were the Bank of Hindustan, founded in 1770 and closed between 1829
to 1832, and the Indian General Bank, founded in 1786 but which failed in 1791.
The largest and oldest existing bank is the State Bank of India. It started as the Bank of
Calcutta and began operations in 1809 before being renamed the Bank of Bengal. It was one of
three banks created by the presidential government. The other two were the Bombay Bank in
1840 and the Madras Bank in 1843. In 1921, these three banks merged to form the Imperial
Bank of India. The presidency banks played a role in India until the creation of the Reserve Bank
of India in 1935.
The Indian banking sector is generally classified as planned and unplanned. Planned banks
include banks under the second schedule of the RBI Act, while unplanned banks are those not
listed under this schedule. Banks are further classified into nationalized banks, regional rural
banks, foreign banks, and private banks.
The term commercial bank refers to both a commercial bank governed by the Banking
Regulation Act of 1949 and an unregistered commercial bank. In general, India's banking
system is mature in terms of supply, range, and variety of banking products, but still faces
challenges in reaching rural areas and the poor. The government has developed initiatives to
expand banking services through the State Bank of India and the National Bank for Agricultural
and Rural Development (NABARD), offering facilities such as microfinance.

STRUCTURE OF BANKING INDUSTRY IN INDIA

Definition of a Bank: According to the Banking Regulation Act of 1949, a bank accepts loans
or investments in public deposits and refunds or facilitates withdrawals by check, draft, order,
or other means.
Reserve Bank of India: The Reserve Bank of India (RBI) is the central bank of India, managing
the country's money supply and currency. It operates banks for the Indian government and
commercial banks.
Scheduled Banks: Banks listed in the second schedule of the Reserve Bank of India Act, 1934,
are called scheduled banks.
Non-Scheduled Banks: Banks not included in the second schedule of the RBI Act, 1934, are
considered non-scheduled banks. These banks have a reserve capital of less than Rs. 5 crores.
Public Sector Banks: Banks where more than 51% of the ownership is held by the central
government. These banks are regulated and controlled by the government.
Nationalized Banks: Nationalization refers to private assets being transferred to the public
sector, making them government-owned.
Private Sector Banks: Majority-owned by individuals and corporations, these banks must
meet the RBI's priority sector lending requirements. Their goal is to diversify ownership and
control through sound corporate governance.
Foreign Banks: These banks are registered or incorporated in their country of origin, not in
India. They primarily support international trade and investment.
Regional Rural Banks (RRBs): Established in the 1970s for rural development, RRBs aim to
provide credit and improve the standard of living of rural populations.
Cooperative Banks: Developed in the early 1900s, cooperative banks are created by groups
of people with common financial interests. These banks are registered with the government and
operate based on cooperative principles.
Development Banks: Development banks in India facilitate business growth by providing
financial support, technological assistance, product marketing, and corporate support services.
FUNCTIONS OF BANKS:
Primary Functions:
1. Accepting deposits
2. Providing loans and advances
Secondary Functions:
1. Transfer of monetary funds
2. Collection of cheques
3. Portfolio management
4. Issuance of drafts and letters of credit
5. Locker facilities
6. Underwriting shares
7. Dealing in foreign exchange

COOPERATIVE BANKS:
Definition: According to Devine, "a cooperative bank is a mutual society incorporated,
organized, and trained by the appropriate staff to encourage regular savings and allow micro-
loans with easy interest and payment terms."
Cooperative Banks in India: Savings and credit cooperatives in India emerged in the early
1900s. The Cooperative Credit Society Act of 1904 facilitated their development. Sir Nicholson
proposed the establishment of cooperative credit institutions, and Edward Maclagan's 1915
Council highlighted administrative challenges in the cooperative sector.
Characteristics of Cooperative Banks:
1. Operate based on cooperative principles and self-improvement
2. Provide financing for cooperative businesses
3. Engage in foreign exchange and capital markets
4. Receive government support for financial assistance
5. Preserve monetary stability in the agricultural sector
6. Comply with statutory liquidity ratios (SLRs) and cash reserve requirements (CRRs)

INTRODUCTION OF CASH MANAGEMENT

Cash is the important current asset for the operations of the business. Cash is the basic input
needed to keep the business running on a continuous basis. It is also the ultimate output
expected to be realized by selling the service or product manufactured by the firm. The firm
should keep sufficient cash, neither more nor less. Cash shortage will disrupt the firm's
manufacturing operations, while excessive cash will simply remain idle without contributing
anything towards the firm's profitability. Thus, a major function of the financial manager is to
maintain a sound cash position. Cash is the money which a firm can disburse immediately
without any restriction. The term cash includes coins, currency, and cheques held by the firm,
and balances in its bank accounts. Sometimes near-cash items, such as marketable securities
or bank time deposits, are also included in cash. The basic characteristic of near-cash assets is
that they can readily be converted into cash. Generally, when a firm has excess cash, it invests
it in marketable securities. This kind of investment contributes some profit to the firm.
MOTIVES FOR HOLDING CASH
The firm's need to hold cash may be attributed to the following motives:
 The transactions motive
 The precautionary motive
 The speculative motive
Transaction Motive
The transaction motive requires a firm to hold cash to conduct its business in the ordinary
course. The firm needs cash primarily to make payments for purchases, wages and salaries,
other operating expenses, taxes, dividends, etc. The need to hold cash would not arise if there
were perfect synchronization between cash receipts and cash payments, i.e., enough cash is
received when the payment has to be made. But cash receipts and payments are not
synchronized. For those periods when cash payments exceed cash receipts, the firm should
maintain some cash balance to be able to make required payments. For transaction purposes, a
firm may invest its cash in marketable securities. Usually, the firm will purchase securities
whose maturity corresponds with some anticipated payments, such as dividends or taxes in the
future. Notice that the transactions motive mainly refers to holding cash to meet anticipated
payments whose timing is not perfectly matched with cash receipts.
Precautionary Motive
The precautionary motive is the need to hold cash to meet contingencies in the future. It
provides a cushion or buffer to withstand some unexpected emergency. The precautionary
amount of cash depends upon the predictability of cash flows. If cash flow can be predicted
with accuracy, less cash will be maintained for an emergency. The amount of precautionary
cash is also influenced by the firm's ability to borrow at short notice when the need arises. The
stronger the ability of the firm to borrow at short notice, the less the need for a precautionary
balance. The precautionary balance may be kept in cash and marketable securities. Marketable
securities play an important role here. The amount of cash set aside for precautionary reasons
is not expected to earn anything.
Therefore, the firm attempts to earn some profit on it. Such funds should be invested in high-
liquid and low-risk marketable securities. Precautionary balance should thus be held more in
marketable securities and relatively less in cash.
Speculative Motive
The speculative motive relates to the holding of cash for investing in profit-making
opportunities as and when they arise. The opportunity to make a profit may arise when security
prices change. The firm will hold cash when it is expected that interest rates will rise and
security prices will fall. Securities can be purchased when the interest rate is expected to fall;
the firm will benefit from the subsequent fall in interest rates and increase in security prices.
The firm may also speculate on material prices. If it is expected that material prices will fall, the
firm can postpone materials purchasing and make purchases in the future when prices actually
fall. Some firms may hold cash for speculative purposes. By and large, business firms do not
engage in speculations. Thus, the primary motives to hold cash and marketable securities are
the transactions and the precautionary motives.
CASH PLANNING
Cash flows are inseparable parts of the business operations of firms. A firm needs cash to
invest in inventory, receivables, and fixed assets and to make payments for operating expenses
in order to maintain growth in sales and earnings. It is possible that a firm may be taking
adequate profits but may suffer from a shortage of cash as its growing needs may be
consuming cash very fast. The "cash poor" position of the firm can be corrected if its cash
needs are planned in advance. At times, a firm can have excess cash if its cash inflows exceed
cash outflows. Such excess cash may remain idle. Again, such excess cash flows can be
anticipated and properly invested if cash planning is resorted to. Cash planning is a technique
to plan and control the use of cash. It helps to anticipate the future cash flows and needs of the
firm and reduces the possibility of idle cash balances (which lowers the firm's profitability) and
cash deficits (which can cause the firm's failure). Cash planning protects the financial condition
of the firm by developing a projected cash statement from a forecast of expected cash inflows
and outflows for a given period. The forecasts may be based on the present operations or the
anticipated future operations. Cash plans are very crucial in developing the operating plans of
the firm. Cash planning can be done on a daily, weekly, or monthly basis. The period and
frequency of cash planning generally depend upon the size of the firm and the philosophy of
management. Large firms prepare daily and weekly forecasts. Medium-sized firms usually
prepare weekly and monthly forecasts. Small firms may not prepare formal cash forecasts
because of the non-availability of information and small-scale operations. But, if the small firm
prepares cash projections, it is done on a monthly basis. As a firm grows and business
operations become complex, cash planning becomes inevitable for its continuing success.
CASH FORECASTING AND BUDGETING
Information helps the financial manager determine the future cash needs of the firm, plan for
the financing of these needs, and exercise control over the cash and liquidity of the firm. The
time horizon of the cash budget may differ from firm to firm. A firm whose business is affected
by seasonal variations may prepare monthly cash budgets. Daily or weekly cash budgets
should be prepared for determining cash requirements if cash flows show extreme fluctuations.
Cash budgets for longer intervals may be prepared if cash flows are relatively stable. Cash
forecasts are needed to prepare cash budgets. There are two types of cash forecasting:
 Short-term Cash Forecasting
 Long-term Cash Forecasting
Methods of Short-term Cash Forecasting
Two most commonly used methods of short-term cash forecasting are:
 The receipt and disbursements method
 The adjusted net income method
The receipts and disbursements method is generally employed to forecast for limited periods,
such as a week or a month. The adjusted net income method, on the other hand, is preferred
for longer durations ranging between a few months to a year. Both methods have their pros
and cons. The cash flows can be compared with budgeted income and expense items if the
receipts and disbursements approach is followed. On the other hand, the adjusted income
approach is appropriate in showing a company's working capital and future financing needs.
Long-term Cash Forecasting
Long-term cash forecasts are prepared to give an idea of the company's financial requirements
in the distant future. They are not as detailed as short-term forecasts. Once a company has
developed long-term cash forecasts, they can be used to evaluate the impact of new product
developments or plant acquisitions on the firm's financial condition three, five, or more years
into the future. The major uses of long-term cash forecasts are:
 Indicating a company's future financial needs, especially for its capital requirements.
 Evaluating proposed capital projects by pinpointing the cash required to finance these
projects and the cash generated by the company to support them.
 Improving corporate planning by compelling cash divisions to plan for the future and
formulate projects carefully.
Long-term cash forecasts may be made for two, three, or five years. As with short-term
forecasts, company practices may differ in duration to suit their particular needs. The short-
term forecasting methods, such as the receipts and disbursements method and the adjusted
net income method, can also be used in long-term cash forecasting. Long-term cash forecasting
reflects the impact of growth, expansion, or acquisitions, and also indicates financing problems
arising from these developments.
CASH MANAGEMENT
Cash management is a broad term that refers to the collection, concentration, and
disbursement of cash. It encompasses a company's level of liquidity, its management of cash
balance, and its short-term investment strategies. In many ways, managing cash flow is one of
the most important jobs of business managers.
For some time, technology has been the key driving force behind every successful bank. The
ability to recognize and capture market share depends on the bank's competence in evolving
technologically and offering customers a seamless process flow. The objective of a cash
management system is to improve revenue, maximize profits, minimize costs, and establish
efficient management systems to assist and accelerate growth.
Cash Management in India
The Reserve Bank of India (RBI) has placed emphasis on upgrading technological infrastructure.
Some new initiatives include electronic banking, cheque imaging, enterprise resource planning
(ERP), and real-time gross settlement (RTGS). The evolution of payment systems such as RTGS
has posed some challenges for cash management providers.
It is important for banks to shift their revenue model from float-based earnings to service fees.
Although cash management providers who rely on float earnings might face revenue hits, there
are opportunities in offering seamless online collection and disbursement of payments across
banks. Several regulatory and policy changes have facilitated efficient cash management
systems (CMS).
For example, the enactment of the Information Technology Act gives legal recognition to
electronic records and digital signatures. The establishment of the Clearing Corporation of India
has created a safe institutional structure for the clearing and settlement of trades in foreign
exchange, money, and debt markets, significantly improving financial infrastructure.
Other innovations include:
1. Introduction of the Centralized Funds Management Service to facilitate better
management of fund flows.
2. Structured Financial Messaging Solution (SFMS), a communication protocol for intra-bank
and inter-bank messages.
Today, treasurers must ensure they are equipped to make the best financial decisions. A strong
cash management solution can give corporates a business advantage, making it crucial for
executing a company's financial strategy. An efficient cash management solution in India is
essential for executing payments, collecting receivables, and managing liquidity.
FACTORS OF CASH MANAGEMENT
Cash management involves:
1. Managing cash flows into and out of the firm.
2. Managing cash flows within the firm.
3. Maintaining cash balances to finance deficits or invest surplus cash.
Sales generate cash, which must be effectively disbursed. Surplus cash should be invested,
while deficits should be managed through borrowing. Cash management aims to achieve this
cycle at minimal cost while maintaining liquidity and control.
Cash is a critical but least productive asset. Unlike fixed assets or inventories, it does not
generate goods for sale. Therefore, cash management focuses on maintaining control over cash
to ensure liquidity while using excess cash profitably. Predicting cash flows accurately is
difficult, as inflows and outflows rarely synchronize. During some periods, outflows exceed
inflows due to tax payments, dividends, or seasonal inventory buildup. At other times, inflows
exceed outflows due to large cash sales or the realization of debtors.
Cash management is also significant because, despite cash being a small portion of total
current assets, a considerable amount of management time is spent handling it. Many
innovations have been made in cash management techniques, with firms aiming to maintain
minimum cash balances and invest surplus cash in profitable opportunities.
Key Aspects of Cash Management:
1. Optimum Utilization of Operating Cash: Efficient cash management involves the
rapid generation, utilization, and conversion of cash resources. Analyzing the operating
cash flow cycle and managing working capital efficiently can minimize required cash
balances.
2. Cash Forecasting: Forecasting is critical in cash planning, alerting businesses to
potential cash problems and assisting in regulating future cash flow movements.
3. Cash Management Techniques: Businesses aim to accelerate cash collections and
manage cash payments efficiently to maximize the use of scarce cash resources.
4. Liquidity Analysis: Liquidity is crucial for business survival. The inability to maintain
liquidity is a primary cause of business failure. Ensuring an optimal liquidity level is
essential for effective cash utilization.
5. Profitable Deployment of Surplus Funds: Due to the mismatch between cash inflows
and outflows, surplus cash may arise periodically. If managed wisely, cash surpluses can
become profit centers through short-term investments.
6. Economical Borrowings: A mismatch in cash flows can also result in deficits, requiring
businesses to raise funds cost-effectively. Effective borrowing strategies minimize
financing costs and enhance cash management efficiency.
An ideal cash management system depends on a firm's products, organization structure,
competition, culture, and available financial options. Optimizing collections may involve
reducing the credit period, though this could impact sales. However, choosing the right banking
partners and efficiently managing collections can significantly reduce cash management costs.
HISTORY OF ORGANIZATION
Mahila Co-operative Credit Society Ltd, Vijayapur, was established in May 1997 with registration
number AR7/RSR/18997/UOG/97-98. Its area of operation covers 56 villages at the taluka level.
The society operates with a fully computerized system and has won the "Best Co-operative
Society in Vijayapur District" award from the Vijayapur DCC Bank, District Co-operative Union,
and Co-operative Department for the years 2003-2004.
For 24 years, the society has operated successfully. The administration is overseen by a board
consisting of 11 directors elected from shareholders, one female director, and one director from
the reserved quota. The bank provides financing for small-scale industries, housing, agriculture-
related ventures, and other purposes. It plays a proactive role in the economic development of
Vijayapur and enjoys a strong reputation in the region.
The main intention to open this credit was to help poor people solve their financial problems.
Through this bank, they can take loans easily for any purpose. Since 23 years, the society has
been running in profit. The Mahila Cooperative Bank helps students by giving prizes in the form
of money to those scoring more than 80% in annual exams and also awards prizes to
sportsmen. It provides 0.5% more interest on deposits to its customers who are considered
senior citizens.
CHAPTER - 2: RESEARCH DESIGN
OBJECTIVES OF THE STUDY:
 To ensure whether the bank maintains sufficient liquidity or not.
 To know whether the bank is able to meet short-term requirements from the general
public or not.
 To meet the requirement of disbursements as per the payment schedule.
 To strengthen the balance sheet by optimizing working capital requirements.
 To improve customer relationships with secure and timely payments.
SCOPE OF THE STUDY:
The study brings out the important role of customer and manager relationships. It also covers
details of CASH MANAGEMENT at MAHILA CO-OPERATIVE BANK LTD VIJAYAPUR. Cash
management is a broad term that refers to the collection, concentration, and disbursement of
cash. The goal is to manage the cash balance of an enterprise efficiently while avoiding the risk
of insolvency.
NEED OF THE STUDY:
 Forecasting cash position.
 Maintaining less idle cash.
 Concentration of collected funds.
 Efficient collection of cash inflows and outflows.
LIMITATIONS OF THE STUDY:
 The study is confined only to DISTRICT MAHILA CO-OPERATIVE BANK VIJAYAPUR.
 The study is based on 5 years of financial performance only.
 Some of the information is not disclosed by the official organization as it was confidential
in nature.
 The study is carried out only for a period of one month.
  The time constraints will be the main limiting factor.
RESEARCH METHODOLOGY:
Cash management is considered an analytical research field. The analysis is done with the aid
of annual reports and other observations using both primary and secondary data.
 Primary Data: Collected through observation and formal discussions with staff
members of the bank.
 Secondary Data: Collected from annual reports, websites, and books, providing a
theoretical background for research.