Cooperative Banks Research Articles

When a sector-specific standard for non-financial reporting is not enough: evidence from microfinance institutions in Italy

PurposeThis paper aims to investigate the application of the Italian Banking Association (ABI) industry-specific reporting standard in microfinance institutions by determining whether or not a banking sector reporting standard can enhance non-financial reporting (NFR) quality and volume to meet stakeholders’ information needs in the specific setting investigated.Design/methodology/approachThis paper develops an analysis of available ABI documents from 2006 to 2013 to conduct a content analysis of the quality and volume of the NFR of 98 Italian cooperative banks (CBs) during the 2008–2009 ABI implementation year. These data are analysed using two regression models to investigate the quality and volume of NFR disclosures.FindingsThe findings suggest that for CBs in the Italian banking sector, the information provided in the non-financial reports in adherence to the ABI sector reporting standard is relevant in terms of both volume and quality. However, when investigating specific categories of disclosure such as the community, the relevance of the ABI reporting standard is fairly low. The authors question the “one-size-fits-all” approach favouring a more sector-tailored approach to ensure that the NFR covers key sectoral concerns.Practical implicationsThe high heterogeneity in the sector could negatively affect the capability of sector-specific standards to truly foster reliable, complete and extensive NFR. Therefore, NFR standard-setters, such as the International Sustainability Standards Board, should consider these heterogeneities.Social implicationsReporting standardisation should be multi-voiced and include different – even contrasting – perspectives to promote expert and non-expert engagements.Originality/valueThis paper focuses on hybrid organisations and shows how the theoretical approach of dialogic accountability can improve the quality of sector-specific reporting standards.

PERFORMANCE EVALUATION OF INDIAN BANKING SECTOR AFTER THE GLOBAL CRISIS via CAMELS RATIOS

Following the catastrophe of November 2000 and February 2001, major structural changes took place in the financial sector especially with regard to Indian banks. Efforts have been made to review banking errors and financial regulation in the banking sector. Further to the function of the banking region in the ongoing transformation manner, the banking quarter’s reaction has come to be a crucial problem to address in the light of the 2008 regulatory and financial crisis. despite the fact that there are numerous research assessing bank performance, the CAMELS score, which is one of the most crucial strategies for analyzing bank performance, has important parameters that replicate the results of bank overall performance. It carries. The Indian banking zone consists of a huge variety of industrial banks, home banks, cooperative banks, retail banks and international banks within its territory. The current study attempted to evaluate the financial performance of three major banks (HDFC, SBI and Punjab National Bank) using the CAMELS Rating Model. THE CAMELS simulation model is basically the most widely used method of measuring the performance of a banking unit in and out of India. THE CAMELS simulation model is basically the most widely used method of measuring the performance of a banking unit in and out of India. This model measures the performance of banks in all key areas such as financial efficiency, Asset Quality, Management Efficiency, Revenue Quality, Liquidity and Market Sensitivity. The study is based on the second data taken from the annual reports. KEYWORDS: Camel Rating Model, Money Satisfaction, Product Quality, Management Efficiency, Discovery Quality, Liquidity, Sensitivity.

Research Report on Financial Performance of MUDRA Yojna for the time period of 2015-2019

Pradhan Mantri Mudra Yojana (PMMY) is a flagship scheme of Government of India to “fund the unfunded” by bringing such enterprises to the formal financial system and extending affordable credit to them. It enables a small borrower to borrow from all Public Sector Banks such as PSU Banks, Regional Rural Banks and Cooperative Banks, Private Sector Banks, Foreign Banks, Micro Finance Institutions (MFI) and Non Banking Finance Companies (NBFC) for loans upto Rs 10 lakhs for non-farm income generating activities. The scheme was launched on 8th April, 2015 by the Hon'ble Prime Minister. In India many things revolve around mere perceptions, while getting into detail it often paint a different picture. It is a common misperception people have that large industries create more employment, though the truth is that “in India only 1.25 crore people find employment in large industries, whereas small enterprises employed 12 crore people”. In India, small businesses play an important role by providing employment to a large number of people. It is the second largest sector engaging uneducated and unskilled people after agriculture. Further, millions of low income earning group person aspire to set up small businesses but are unable to start, mostly due to credit limitations. Since banks do not find them eligible for credit loan. After identifying the importance of self employment people and small business units, government of India launched MUDRA Yojana to address the financial and other constraints. This paper is an attempt to know about the MUDRA Yojana and its key objectives. The paper highlights the role and importance of MUDRA bank towards small business units, it also review the Mudra yojna for the year of 2015-2019 in terms of many aspects.

CBP2P: Cooperative Electronic Bank Payment Systems Based on Blockchain Technology

<p>The most common consumer behavior was to pay in cash at a physical store in the past. However, with the rapid development and popularization of smart handheld devices and computers, merchants have had many innovative business models in recent years. For example, the digital cryptocurrency Bitcoin has the advantages of decentralization, anonymity, and the inability to tamper with data. If these benefits are combined with the current electronic payment financial operation model, they will be highly innovative. However, blockchain technologies have been applied to decentralized network architectures. As a result, the financial system will face anonymous crime, extensive data synchronization, and time-consuming transaction processes. This paper implements a P2P electronic payment system with a hierarchical structure based on the blockchain architecture, called CBP2P (Cooperative Bank Peer-to-Peer), to improve the defects and realize an accurate electronic payment system. Through the characteristics of the blockchain and cooperation between banks, we will enhance the security and availability of the system.</p> <p> </p>

Islamic Bank: A Bank of Ethics in Compliance with Corporate Social Responsibility

Purpose: This paper aims to shed light on the issue's prospects, as ethics in Islamic banking may become another distinguishing factor when compared to its conventional counterpart. This comparative research will compare co-operative banks that emphasize ethical operations to Islamic banking in Pakistan. Although ethics in other countries' co-operative banks has become a new market segment and succeeded because it drew many new customers who wanted to engage in a morally sound investment, Islamic banks continue to concentrate only on sharia. Design/Methodology/Approach: The qualitative method is used in this study by analyzing statutes, particularly Islamic jurisprudences, local and international protocols, conventions, and treaties Findings: In this work, it shows that ethics has the potential to make Islamic banking a full-fledged financial system if it is used as one of Islam's three pillars. Implications/Originality/Value: In the Islamic economy, Islamic banking is unquestionably at the forefront. Along with Faith (Aqidah) and Islamic Legal Jurisprudence (Sharia), Ethics (Akhlak), as in corporate social responsibility, is a core part of Islam that doesn't get as much attention as it should. An Islamic bank should primarily concentrate on sharia despite balancing those three pillars. In practice, a business with a high ethical standard must be profitable, legal, honest, and ethical while also considering long-term sustainability.

Are European commercial banks more profitable than cooperative banks? Evidence from a low interest rate environment

AbstractOur aim is to compare empirically the profitability of European cooperative and commercial banks in a low interest rate environment. We employ dynamic panel data methods on a data set of nearly 1000 banks from 11 European countries where both ownership structures compete on the same market. We observed different banking strategies during the 2009–2015 period, when market interest rates reached an all‐time low. Our analysis produced four main conclusions. First, we find that commercial banks maintain superior profitability over cooperative banks in an environment of low interest rates. Second, commercial banks unjustifiably decreased their loan loss provisioning in a low interest rate environment in order to maintain their profitability. This trend is not present in cooperative banks. Third, decreased provisioning is present mainly in smaller institutions. Fourth, cooperative banks are significantly more stable than commercial banks in terms of their Z‐score in a low interest rate environment. This finding is in line with existing findings during normal interest rates. In addition, the Z‐score of cooperative banks increased during the observation period, whereas the Z‐score of commercial banks remained stable. Our findings survive a battery of robustness checks. Our results also show differences in the strategies and priorities of both competing ownership types in a low interest rate environment: commercial banks focus on maintaining their profitability by decreasing loan loss provisions, whereas cooperative banks seek to increase their stability. Therefore, regulators pursuing stability in a low interest rate environment should focus on the credit risk management of small commercial banks.

Do spatial dependence and market power matter in the diversification of cooperative banks?

This study examines the determinants of cooperative banks' diversification proclivity, with consideration of the spatial dependence effect. The empirical analysis demonstrates that Italian cooperative banks operate as a network with significant spillover effects that should not be ignored. Indeed, local banks compete in the same market segment, and any shift in their diversification strategy has a cascading effect on neighbouring cooperative banks as a result of customer migration. Finally, we observe that an increase in bank market power results in a decline in local bank lending activity.

SOURCES AND APPLICATIONS OF FUNDS IN INDIAN URBAN COOPERATIVE BANKS

The success or the failure of a financial institution mainly depends on the way they effectively collect the funds and efficiently manage those funds in turn to get return. The effective fund management is something like our heart manage the blood circulation throughout the body and have control over the functions. This study examines the sources and applications of funds by cooperative urban banks in India overall. Banks’s performance is measured by the way they raise the funds and how do they manage that fund to increase the efficiency of Bank. Efficiency of bank in financial operations decides their survival level and the long-term objectives of the bank. For the cooperative urban banks, the efficiency of financial operations in their business is interlinked with efficient management of funds which is reflected through the financial margin and is the ultimate financial gain available to them, which are influenced by owned funds to working funds, low-cost deposits to total deposits and balanced credit to deposit ratio. Generally, the Urban cooperative banks works on the principles of cooperation, self-help and mutual help, and even these banks are organized well in terms of their fund management and other financial operations.

A STUDY ON FINANCIAL STATEMENT ANALYSIS OF TAMILNADU INDUSTRIAL COOPERRATIVE (TAICO) BANK LTD,CHEENAI

Financial statements are the pulse of an organization to understand the healthy financial position of an organisation. This Study was taken up in Tamilnadu Industrial Development Cooperative Bank (TAICO), Chennai with the objective to determine the variation in the items of income statement and balance sheet by common size statement, to evaluate the performance of the bank by comparative study and to ascertain the solvency, liquidity and profitability ratios of the bank. For the purpose of the study, last three years financial statements were obtained from the bank.With the help of Common size balance sheet, Comparative Balance sheet and Ratios of Profitability, Solvency and Liquidity the financial status was obtained. The bank has seen a down side during the pandemic period as visible from the analysis. It is also very positive to note that deposits has risen and the bank is close to pre-pandemic status as per 2021 reports. The bank has to concentrate on investing in Fixed assets and also ensure that profits are used in this regard. Other variables indicate a healthy financial statement of the bank.

Forecasting of Banking Sector Securities Prices in Kenya Using Machine Learning Technique

Before investing in any company, an investor should have a basic understanding of how the stock market works. With the introduction of Machine Learning (ML), more resources have been spent to this area of research and it has been proved that stock market prediction is achievable. Although studies have been conducted in this area, there has not been a study to forecast banking sector security prices in Kenya using SVM – ML. Therefore, using the Machine Learning technique, this study aimed to forecast the banking sector security prices in Kenya. The study aimed at fitting ARIMA and SVM models for forecasting banking sector security prices in Kenya. The study targeted all banks listed by the Nairobi Securities Exchange and a sample of three banks was taken – Kenya Commercial bank, Equity bank, and Co-operative bank. To determine the models' performance capability, accuracy error metrics were used to assess them. SVM had an error of 0.01482, 0.1217, 0.1114 and 0.01922 for MSE, RMSE, MAE and MAPE respectively which were lower compared to ARIMA’s error results. SVM was recommended for forecasting banking sector security prices in Kenya as it proved reliable for forecasting.

AN ASSESSEMENT OF NON-PERFORMING ASSETS (NPA) AT SREE THYAGARAJA CO-OPERATIVE BANK LIMITED

India's cooperative banks have played a vital role in the country's performance in promoting financial presence. Since its beginning, they have brought important achievements and contributing to the empowerment and security of rural Indian. By offering loans and other facilities to farmers, small businessmen, start-ups, they are providing timely support to rural residents. Non-performing assets are those loans and advances on which principle or Interest amount is overdue for a period of 90 days. Non- performing assets are the indicator of the financial health of the bank. However, any loan repayment default will have an impact on the bank's operational effectiveness and financial stability. Managing NPA of the bank is a very comprehensive subject and very significant apprehension in the banking industry. To improve the efficiency and profitability of the banks the NPA need to be reduced and controlled. Reduced NPA generally indicate that the credit appraisal process has been strengthened and growth in NPA indicate the need for maintain provision in the balance sheet which will affect the profitability of the banks. The purpose of the study is to be familiar with the data of recent years and advancement of the bank in numerous sections of NPA. Keywords: Co-operative banks, Non-performing assets

Does creating perceived co-operative member value pay off? An empirical study in the German co-operative banking context

The relevance of co-operative values and principles has long been discussed in co-operative literature. Building on a structured literature review and expert interviews, I develop a measure of perceived co-operative member value. Using a multivariate data analysis method, I establish a structural path model that incorporates this new measure. In a sample of 390 members of German co-operative banks, perceived co-operative member value is found to be an important predictor of sustainable satisfaction, next to corporate reputation. The study’s main contributions are twofold: First, I develop an understanding of perceived co-operative member value building upon relevant literature and expert interviews. Second, I enhance the existing knowledge on co-operative principle and value’s importance by situating it in the broader context of co-operative members’ sustainable satisfaction, thereby combining it with marketing literature. In conclusion, I indicate how these contributions have implications for both co-operative theory and practice. • Perceived cooperative member value can be measured as a six-item index. • Perceived cooperative member value is an important driver of member satisfaction. • Perceived cooperative member value is an important element for cooperative banks.

Basel accords and banking inefficiency: Evidence from the Italian local market

AbstractUsing data for Italy from 1994 to 2015, we appraise the nexus between Basel II and III accords and both the cost and the profit inefficiency of profit‐oriented and mutual cooperative banks. Our analysis further deals with the effects of the regulation in different market structures. To assess the efficiency of the two types of banks under scrutiny, a stochastic frontier approach has been proposed. The evidence reported in this paper indicates that the regulatory framework of the Basel accords had heterogeneous effects on the efficiency of Italian banking institutions. Specifically, Basel II is associated with a contraction in the profit inefficiency and an increase in the cost inefficiency for mutual cooperative banks. On the other hand, Basel III worsened the profit inefficiency, though it is found to reduce the profit inefficiency of mutual cooperative banks, with no significant impact on cost inefficiency. Furthermore, once we control for the degree of market competition, the effects of the regulation are shown to be statistically insignificant. The advent of the 2008 recession and the application of the revenue inefficiency do not alter the main findings. There is also some evidence of spatial effects of the Basel II regulation at the LMA level.

Does the Co-operatives Helps the Rural Development in India?

In India, the co-operative movement has played an important role in meeting the developmental needs of the rural poor. Co-operatives are the organisation that help the individuals harness the power of collective bargaining in order to protect the financial interests of the impoverished and underrepresented in society. In India co-operative credit structure is three-tiered, with State Cooperative Banks (SCB) at the top of the each state, Central Co-operative Banks in the middle or central level, and Primary Agriculture Credit Societies (PACS) at the bottom level. Each of these institutions focuses on the development of their area of operation and performs distinct purpose for the purpose of the upliftment of the members of co-operatives. The present study discuss the role of co-operative societies in the rural development of our country. Keyword : Co-operation, Rural Development, PACSs

Legal Protection for Soybean Farmers in Cooperation Based on the Muzara'ah Akad with the Murabahah System

Introduction: During the pandemic Covid-19, the global soybean market experienced a shock which resulted in the availability of imported soybeans in several countries decreasing and soybean prices increasing. This also has an impact on small and medium industries that cannot afford soybeans for their processed food raw materials, one of which is the production of “tempe”. Purposes of the Research: The purpose of this study is to explain the concept of cooperation to provide legal protection to soybean farmers based on a muzara'ah akad with a murabahah system. Methods of the Research: The research method used is normative legal research with a statute legal approach and a conceptual approach. Results of the Research: The result of this study include 2 (two) things, namely the concept of cooperation and the form of legal protection. The concept of cooperation consists of: The first scheme, cooperation between the government (Pemda) with soybean farmers and Islamic banks. The second scheme is the cooperation of Islamic banks with soybean farmers using a murabahah akad. The third scheme, namely cooperation between soybean farmers and cultivator using muzara’ah akad. In connection with the form of legal protection, it is divided into 2 (two) namely: first, external legal protection regulated in Law Number 19 of 2013 concerning Protection and Empowerment of Farmers, which was later changed to Law no. 11 of 2020 concerning Job Creation, and second, internal legal protection, namely 3 (three) concepts of cooperation as outlined in a written agreement as a form of guarantee of legal certainty for the parties, especially for soybean farmers.

An Evaluation of Net Profit to Working Capital Ratio and Loans and Advances to Working Capital Ratio of The Amreli District Cooperative Bank Ltd.

Majorly 21 types of banks are functioning worldwide. Each and every bank plays important role in growth and development of economy of the nation. This research is focusing on district level banks of Gujarat State. Presently total 42 district level banks are functioning in Gujarat. Amid them, the orientation is taken in account to evaluate the financial performance based on two parameters – Net profit to working capital ratio and Loans and advances to working capital ratio of the bank. The research is examined for Amreli District Co-Operative bank ltd for financial year 2013 to 2019. An application of t – test is used to examine the results. It is observed that there is significance difference between the yearly upgradation in Net profit to working capital ratio and Loans and advances to working capital ratio of the bank. The bank has progressively worked for Saurashtra region of Gujarat state.

A Study on Role of Customer Relationship Managemen in Rural Cooperative Bank in Madurai District

In India, the banking business is become more and more complex and tremendously changes from the liberalization and globalization. Rural development is the process of improving the quality of life and economic well being of people living in rural areas. In past decades, the government has taken initial steps of accelerating the rural areas development and welfare activities. The opening of new bank, the customer creation is very important one and develops to maintain the relationship is difficult. Customer relationship management is helpful to remove these difficulty in various aspect of services provided to the people. CRM facilitates the cooperative banks to provide one to one services and also maintain the transactions security of the customers. The main purpose of CRM in cooperative banking sector is to create and keep customer and view the entire banking transactions as consisting of highly integrated effort to create and satisfy the customer needs. A customer satisfaction is silent advertiser of cooperative banks product. In this study, the researcher has analyze the customer satisfaction of cooperative banking services in rural areas and what they are expecting form cooperative banks etc. It helps to bring out the results related to benefit cooperative banks to build better CRM services to rural areas. CRM facilitates the cooperative banks to provide one to one services and also maintain the transactions security of the customers.

A Study on Customers’ Satisfaction with E-Banking Services with Special Reference to the Madurai District Central Cooperative Bank LTD

The banker you want to supplement should rely more on efficient services and coordinate relationships with clients. The only factor that differentiates the service of one bank from the other is “customer satisfaction” related to the services provided by the bank. This is the most important factor that influences the choice of the bank. The success of banks basically depends on customer satisfaction in relation to new technological services provided by banks. The banking industry is driven mainly by customers, and their survival in a competitive environment depends largely on new technological services provided by them. Technology plays a fundamental role in improving the quality of services provided by banking sectors. One of the technologies that really brought information to the revolution in society is internet technology and, for good reason, is considered the third wave of resolution after the agricultural and industrial revolution. The emergence and adoption of the Internet by the banking sector has eliminated the limitation of time, distance and communication, making the world a real village. Internet banking from anywhere, at any time and used for transactions, payments, etc. On the Internet via a bank, cash register or secure company website. Therefore, basically in online banking, the customer has a one-to-one interaction with the bank’s parties, in which case it is important for the bank to provide high quality services on the Internet. Therefore, unlike the traditional banking sector, online banking involves interpersonal interaction between clients and the online banking system.

THE IMPACT OF INFORMATION TECHNOLOGY ON THE PERFORMANCE OF BANKS IN PUNE CITY: A COMPARATIVE STUDY

Advent of ICT has brought transformational changes in the Indian Banking Industry. Liberalisation, privatization and globalization policy and the recommendations of various committees paves the way for use of ICT in the Indian Banking sector. ICT has made the banking more easy, convenient and user friendly. It has changed the way the banks provide the services to their customers. It has also impacted the performance of the banks in all respects. The present study is modest attempt to study the impact of IT on the performance of banks operating in Pune City. The researcher has selected 5 branches each of 2 Public Sector Banks, 2 Private Sector Banks, and 2 Co-operative Sector Banks operating in Pune City and the impact of information technology on core operational areas as well as secondary operational areas. Total sample size is 1950 which includes bank customers, employees and managers/officers. The study reveals that the private banks lag behind in several aspects as compared to the nationalized and cooperative banks and there is a lot of improvement required in several areas. One cannot clearly distinguish the nationalized banks as the best performers or the cooperative banks is the best performers because there are issues that need to be taken care of in nationalized and cooperative banks also. What the study would conclude is that, for a bank to be successful there should be a proper commitment of the top-level management and at the same time the IT staff who takes care of the hardware and software infrastructure within the bank must work in harmony with the banking staff. KEY WORDS: Information Technology, E-banking, online banking, e-banking service quality, customer satisfaction, CRM

Adaptive Early Warning Systems: An Axiomatic Approach

Abstract The U.S. Subprime Crisis and the subsequent Great Recession have highlighted a renewed interest in the proper design and implementation of Early Warning Systems (E.W.S.), in order to help deter the onset of subsequent extreme financial events, through the implementation of adequate crisis detection mechanisms. The present article describes the Adaptive Early Warning Systems (A.E.W.S.) axiomatic approach, as a natural operational extension to E.W.S. testing. This novel protocol upholds the operational dimension of implementing an efficient holistic crisis detection mechanism, a domain which has been hitherto overlooked by the E.W.S. literature. The paper first describes the major axiomatic principles sustaining the A.E.W.S. protocol, which seek to establish universal principles in support of the said protocol. Second, the article also describes a basic universal template for an A.E.W.S. surveillance platform, which duly describes how multiple testing procedures can be integrated into a single crisis detection framework, while targeting multiple segments of the financial markets (such as the conventional and non-conventional segments of the financial markets). Third, the paper also describes the major advantages and disadvantages associated with the implementation of this novel protocol. It is hoped that the effective implementation of the A.E.W.S. protocol as a novel operational framework in the global macroprudential toolkit might help deter the onset of future extreme financial events, by enabling a greater cohesiveness in E.W.S.-related central banking procedures, as well as promoting a greater international central banking cooperation prior to and during financial distress episodes.