The Kashmir Mercantile Cooperative Bank Ltd. Sopore

Brief History: The Kashmir Mercantile Co-Operative Bank Ltd. Sopore was registered in the year 1986 with Registrar Cooperatives J&K under registration No.B&F/RCS/S-1 Dated: 15-11-1986 as an Urban Co-Operative Bank under the J&K Co-Operative Societies Act, 1960. The Reserve Bank of India issued license to the Bank under the provisions of Banking Regulations Act, 1949 (AACS) vide license No.UBD/J&K/851.P/RBI Dated: 25-02-1987. The Bank commenced its banking operations from 10th of October 1987. The registered office of the Bank is situated at Sopore in District Baramulla J&K. Initially the area of operation of the Bank was confined to Sopore town, which was later-on extended to entire District Baramulla and Kupwara vide RBI order No. UBD.ND.654/07.01.00/1999-2000 dated: -December 8, 1999.

Mission Statement: The mission of the Bank is to inculcate banking habits among the poor and weaker sections of the society residing in the urban/ semi urban areas and to ameliorate their economic conditions by providing loans and advances on easy terms and conditions.

Objective:

• To encourage thrift, self-help and cooperation among members.
• To accept deposits of money from public.
• To borrow or raise money from higher financing agencies.
• To lend or advance money to members on easy terms and conditions.
• To do or under-take any form of business that the Government or Reserve Bank of India may specify as a form of business in which it would be lawful for an urban Co-operative Bank to engage.

Membership: The Membership of the Bank comprises of two categories i,e Individuals and the Govt. Its membership is open to every person who is an adult, competent to contract and resides within the Area of Operation of the bank or is gainfully engaged in any business or occupation in the area.

Authorised Capital: The authorized capital of the bank is Rs. 1.00 Crore. Made up of "A" class share of Rs 25/- each and "B" class shares of Rs.1000/-each. "A" Class shares are open to individuals where-as "B" class shares are allotted to State Govt.  

8. Paid Up Capital (CRAR): The capital adequacy ratio (CRAR) of the bank is 12.17% as on 31-03-2005. The detail of subscribed capital of the bank is as under:

Reserve Funds Of The Bank: The bank has created reserve out of its annual profits as per the guidelines of RBI and the provisions of the J&K Coop. Societies Act and Rules. The details are given as under:

Deposits: Bank is accepting different type of deposits from the general public for different maturities. Deposits are consolidated/ grouped into following three categories:

Cash And Bank Balance (CRR): Bank has parked its funds with other banks in the following manner:

(Current Accounts)                                                                     (Amount in Lakhs)

Investement In Govt. Securities And Term Deposit S (SLR): The bank has invested its SLR funds in the Govt. Securities or Term deposits of other banks in the following manner:

(Amount in Lakhs)

Loans And Advances:

 (Amount in Lakhs)

Recovery of Loans: The position of recovery of loans is not satisfactory. The overdue and NPA percentage of the bank has increased. The present position of bank is not encouraging. Its CD Ratio as on 31-12-2005 is 43% and the NPA level is 12.2%. The bank has prepared a loan recovery policy in which it has been decided that the cases of chronic defaulters will be referred for Arbitration before the appropriate authority and the parties willing to settle cases under OTS shall also be considered. It is expected that the implementation of the loan recovery policy will help to reduce the NPA level of the bank.

Profit: The Bank has been in trouble during the year 2004/2005, A fraud of Rs.37 Lakhs was detected in the Bank which resulted in flight of deposits. The provisioning against the fraud effected the profitability of the Bank and resulted in net loss of Rs.21 Lakhs. Further the gross NPA of the Bank also soared up during the financial year 2004/2005 and the NPA provisioning also had an impact on the profit of the bank.

Management/ Supervision: The Management / Administrative control of the bank rests with its Board of Directors. The Bank has an elected Board on its Management which comprises of following members. The Statutory tenure of the Board has expired on 16-04-2005. However, the Govt. nominees were never associated with Board meetings of the bank, all decisions have been taken by the elected representatives of Shareholders.

1. Mr. Mohd. Ismail Khuroo (Chairman)
2. Mr. Nisar Ahmad Dar (Vice-Chairman)
3. Mr. Imtiyaz Ahmad Mir (Advocate) (Secretary/ CEO )
4. Mr. Mohd. Ismail Khuroo (Director)
5. Mr. Mohd. Abdullah Shall (Director)
6. Mr. Nazir Ahmad Pandith (Director)
7. Mr. Ab. Ahad Mir (Director)
8. Dy. Registrar  Cooperatives Bla. (Govt. Nominee)
9. Tehsildar Sopore (Govt. Nominee)
10. Ms. Atiqa Bano (Govt. Nominee)

Accounting Pattern: The accounts and the financial statements of the bank are prepared on the basis of double entry system. Its audited accounts i,e, Balance sheet and profit & loss account along with the audit certificate are published in one of the leading local daily news papers every year. The disclosure in the balance sheet and profit & loss account is made strictly as per the Banking Companies (Coop. Societies) Rules 1966.

Audit: The audit of accounts of the bank is conducted yearly by the Cooperative Deptt. through a team of Senior Auditors under the supervision of the District Audit Officer (Coop. Societies)Baramulla. The senior auditor releases the Balance Sheet and Profit and Loss account of the Bank after proper verification. There is a system of proper budgeting. The expenditures are to be made strictly according to the budgetary estimates and they are thoroughly checked-up and verified during the course of audit. The audit of the Bank is conducted update and it has been rated as "B" Grade Bank by the audit.

Inspection: The inspection of the Bank is conducted biennially by the Reserve Bank of India. The latest inspection of the bank was conducted in the month of October 2004. The officers of Reserve Bank have pointed out the weaknesses of the Bank in the inspection repot. However, they have  expressed  satisfaction on over all working of the Bank.

Audit Committee: Besides the departmental audit, the Bank had constituted an Audit Committee of Directors, which was monitoring the compliance to audit and inspection report. The Committee has been also conducting occasionally surprise check of cash and the transactions of the Bank.

Deposit Insurance: The deposits of the Bank are insured with the Deposit Insurance and Credit Guarantee Corporation of India as admissible under its deposit scheme.

Key Performance Indicators