ABOUT THE TOPIC

INTRODUCTION
Mergers and Acquisitions aim towards Business Restructuring and increasing
competitiveness via increased efficiency. In recent years India Inc. has seen a
surge in M&As. The fast growing domestic economy, a climate conducive to
investment and easy financing have caused an increase in the mergers and
acquisitions. The International banking scenario has shown major turmoil in
the past few years in terms of mergers and acquisitions. Deregulation has been
the main driver, through three major routes - dismantling of interest rate
controls, removal of barriers between banks and other financial intermediaries,
and lowering of entry barriers. It has lead to disintermediation, investors
demanding higher returns, price competition, reduced margins, falling spreads
and competition across geographies forcing banks to look for new ways to boost
revenues. Consolidation has been a significant strategic tool for this and has
become a worldwide phenomenon, driven by apparent advantages of scale-
economies, geographical diversification, and lower costs through branch and
staff rationalization, cross-border expansion and market share concentration.
The new Basel II norms have also led banks to consider M&As. This paper
looks at some M&As that have happened post-2000 in India to understand the
intent (of the targets and the acquirers), resulting synergies (both operational
and financial), modalities of the deal, congruence of the process with the vision
and goals of the involved banks, and the long term implications of the merger.
The emerging future trends and recommends steps that banks should
consider, given the forecasted scenario.

Mergers and Acquisitions The term ‘merger’ is not defined under the
Companies Act, 1956 (the ‘Companies Act’), the Income Tax Act, 1961 (the
‘ITA’) or any other Indian law. Simply put, a merger is a combination of two or
more distinct entities into one; the desired effect being not just the
accumulation of assets and liabilities of the distinct entities, but to achieve

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several other benefits such as, economies of scale, acquisition of cutting edge
technologies, obtaining access into sectors / markets with established players
etc. Generally, in a merger, the merging entities would cease to be in existence
and would merge into a single surviving entity. Mergers and acquisitions are
methods by which distinct businesses may combine. Joint ventures are
another way for two businesses to work together to achieve growth as partners
in progress, though a joint venture is more of a contractual arrangement
between two or more businesses. An acquisition or takeover is the purchase by
one company of controlling interest in the share capital, or all or substantially
all of the assets and/or liabilities, of another company. A takeover may be
friendly or hostile, depending on the offer or company’s approach, and may be
effected through agreements between the offer and the majority shareholders,
purchase of shares from the open market, or by making an offer for acquisition
of the offeree’s shares to the entire body of shareholders. Mergers and
Acquisitions aim towards Business Restructuring and increasing
competitiveness via increased efficiency. In recent years India Inc. has seen a
surge in M&As. The fast growing domestic economy, a climate conducive to
investment and easy financing have caused an increase in the mergers and
acquisitions. During the period January-May 2007 there have been 287 deals
with a value of US$ 47.37 billion. Of these, the total outbound cross border
deals were 102 with a value of US$ 28.19 billion, accounting for 59.5 per cent
of the total M&A activity in India.

FOCUS OF MERGERS:
The growing tendency towards mergers in banks world-wide, has been driven
by intensifying competition, need to reduce costs, need for global size, take
benefit of economies of scale, investment in technology for technology gains,
desire to expand business into new areas and need for improvement in
shareholder value. The underlying strategy for mergers, as it is presently
thought to be, is, ‘larger the bank, higher its competitiveness and better
prospects of survival’. Due to smaller size, the Indian banks may find it very
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difficult to compete with international banks in various facets of banking and
financial services. Hence, one of the strategies to face the intense competition
could be, to consolidate through the process of mergers.

Reasons for Merger and acquisition in India

 Growth - Organic growth takes time and dynamic firms prefer acquisitions
to grow quickly in size and geographical reach.

 Synergy - The merged entity, in most cases, has better ability in terms of
both revenue enhancement and cost reduction.

 Managerial efficiency - Acquirer can better manage the resources of the

target whose value, in turn, rises after the acquisition.

 Strategic motives - Two banks with complementary business interests can

strengthen their positions in the market through merger.

 Market entry - Cash rich firms use the acquisition route to buyout an
established player in a new market and then build upon the existing
platform.

 Tax shields and financial safeguards - Tax concessions act as a catalyst

for a strong bank to acquire distressed banks that have accumulated losses
and unclaimed depreciation benefits in their books.

 Regulatory intervention - To protect depositors, and prevent the de-

stabilization of the financial services sector, the RBI steps in to force the
merger of a distressed bank.

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Types of merger

Merger is a combination of two or more companies into one company. In India,

mergers are called as amalgamations, in legal terms. The acquiring company,
(also referred to as the amalgamated company or the merged company)
acquires the assets and liabilities of the target company (or amalgamating
company). Typically, shareholders of the amalgamating company get shares of
the amalgamated company in exchange for their existing shares in the target
company. Merger may involve absorption or consolidation.

Merger and amalgamation: the term merger or amalgamation refers to a

combination of two or more corporate entity into a single entity. Forms of
merger that can happen

a) absorption- one bank acquires the other.

b) consolidation- two or more banks combine to former a new entity. In India

the legal term for merger is amalgamation.

Other ways of classifying merger is upon the basis of what type of

corporate combine

Horizontal Merger
This kind of merger exists between two companies who compete in the same
industry segment. The two companies combine their operations and gains
strength in terms of improved performance, increased capital, and enhanced
profits. This kind substantially reduces the number of competitors in the
segment and gives a higher edge over competition.

Vertical Merger
Vertical merger is a kind in which two or more companies in the same industry
but in different fields combine together in business. In this form, the
companies in merger decide to combine all the operations and productions

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under one shelter. It is like encompassing all the requirements and products of
a single industry segment.

Acquisition:

This may be defined as an act of acquiring effective control by one corporate

over the assets or management of the other corporate without any combination
of both of them.

Case of oracle major software firm has agreed to acquire a majority stake in
Indian banking software company I-flex Solutions. It can be characterized in
terms of the following:

a) The corporate remain independent.

b) They have a separate legal entity.

Take over:

Under the monopolies and restrictive trade practices act, lake over means
acquisition of not less than 25% of voting powers in a corporate.

IMPACTS OF MERGER:

1) Diversification- When two firms merge their risk in investing assets

diversify accordingly. When a firm is operating alone then they don’t have many
options to diversify their portfolio investment that they can get after merger.

2) Mergers and Acquisition allows firms to obtain efficiency gains through cost
reductions (cost synergies) , revenue increases( revenue synergies)

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3) Broader array of products- When two firms merge they have diversified
variety of products and after the merger each consumer in both the firms will
be benefited with the range of products or services to choose from.

4) Mergers and Acquisition helps firms to widen its consumer portfolio but it
also leads to a more diversified range of services and offer scope economies by
optimizing the synergies between the merged activities.

5) Domestic mergers cut costs for both the partners whereas for the majority of
cases including domestic and cross border mergers and acquisition, the impact
on profitability is insignificant but a clear trend to diversify the sources of
revenue was apparent

6) In terms of cost efficiency and revenue efficiency it has been noticed that in
domestic merger organization get the benefit of cost efficiency( reduction in
operating cost) and in cross border merger organization get the benefit of
revenue efficiency (increase in revenue) because of the benefit of geographical
expansion and diversification.

7) Improvement in the activities of organization, however, offer benefits from

product Complementarities which helps to enhance revenues.

8) Efficiency may be improved after merger and acquisition, if the acquiring

company is more efficient already and brings the efficiency of the target up to
its own level by providing its managerial expertise, policies and other
operations.

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List of merger and acquisition in Indian banking sector

Table 1: List of merging bank in India

Name of the acquiring Bank targeted Year in which the

bank merger took place
Kotak Mahindra Bank ING Vyasa Bank 2014
ICICI Bank Bank of Rajasthan Ltd. 2010
HDFC Bank Centurion Bank of Punjab 2008
Indian Overseas Bank Bharat Overseas Bank 2007
Federal Bank Ganesh Bank of
Kurandwad
Industrial Development United Western Bank
Bank of India 2006
Centurion Bank of Lord Krishna Bank
Punjab
ICICI Bank Sangli Bank
Bank of Punjab Centurion Bank 2005
Industrial Development IDBI Bank Ltd.
Bank of India
Bank of Baroda South Gujarat Local Area
2004
Bank
Oriental Bank of Global Trust Bank
Commerce
Punjab National Bank Nedungadi Bank Ltd. 2003
ICICI Bank ICICI Ltd.
2002
Bank of Baroda Banaras State Bank Ltd.
ICICI Bank Bank of Madura 2001
HDFC Bank Ltd. Times Bank Ltd. 2000
Bank of Baroda Bareilly Co-op Ltd.
1999
Union Bank of India Sikkim Bank Ltd.

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Oriental Bank of Bari Doab Bank Ltd.
1997
Commerce
Oriental Bank of Punjab Co-op Ltd.
1996
Commerce
State Bank of India Kashinath State Bank 1995
Bank of India Bank of Karad Ltd. 1994
Punjab National Bank New Bank of India 1993

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BANKING INDUSTRY INTRODUCTION

Today the bulk of all money transactions involve the transfer of bank deposits.
Depository institutions, which are normally called as banks, are at the very
center of our monetary system. Banking is the business of a bank or other
financial institution. Banking includes such activities as holding money in
saving and checking accounts as well as issuing loans and credit to individual.

There are several different types of banks which engaged in different types of
banking system. Some of these types are includes as: central bank, advising
bank, commercial bank, credit union and investment banks.

The banking industry is highly regulated by the government. In 2008, the

banking industry suffers from a crisis caused by risky lending, particularly in
the mortgage loan sector. The banking industry is continually evolving and
offering innovative services to client for satisfied their needs.

Routine banking activities include paying on checks written by customer,

collecting deposits and issuing loans. Issuing loans and charging interest is the
main source of income in the banking industry.

Definition
Bank is a financial institution which receives deposits from the public and
lends them for investment purpose that is deposits of money and advances of
the Main function of bank. After globalization banks indulges themselves in
many activities like Insurance, Mutual Fund Business and Investment in Stock
Exchange. These activities of banking are considered as Para Banking
Activities.

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History of Banking

The History of Banking begins with the first prototype banks of merchants in
the ancient world, which give loans to the farmers and traders who carried
goods between cities. This began around 2000 BC in Assyria and Babylonia.
Later, in ancient Greece and during the Roman Empire, lenders based in
temples made loans and added two important innovations: they accept deposits
and changed money. Ancient China and India also shows evidence of money
lending activity.

The Banking development spread from northern Italy through Europe and a
number of important innovations took place in Amsterdam during Dutch
Republic in the 16th century and in London in the 17th century. During the
20th century, developments in telecommunication and computing caused
major changes to banks operations and let banks’ dramatically increase in size
and geographic spread.

Banking Industry at Global level

Both international banks and central banks play an important role in global
banking and global money market operations.

At Global level, banking can be characterized by the types of services

international banks provide that distinguished them from domestic or region
banks.
1. Facilitate the imports and exports of their clients by arranging trade
financing.
2. Serve their clients by arranging for foreign exchange necessary to conduct
cross-border transactions and make foreign investments.

The global banking industry shows its prominence in line with the growth of
world‘s economy. It is not only taking deposits from investors at lower interest

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rate and loaning out to borrowers at a higher rate that simple, the modern
banking system also have become global industrial powerhouse with a lot of
financial services for both private and commercial perspectives. The
international banking market although was affected by the financial crises in
late 2007 and IMF estimates that more than $1.3 trillion in bad loans was
written off between 2007 and first half of 2009, the size of global banking
industry shows an overall expanding trend over the last few years. According to
the report from IFSL, EU banks held the largest share of the total, 56% in
2009, down from 61% in the previous year.

Banking Industry at National level

In India, Banking was originated in the last decades of the 18th century. The
first banks were Bank of Hindustan (1770-1829) and The General Bank of
India, established 1786 and since defunct.
The largest bank and the oldest is the State Bank of India which originated in
the Bank of Calcutta in June 1806, which almost immediately became the
Bank of Bengal is still in existence. This was one of the three presidency banks,
the other two being the Bombay and the Bank of Madras, these three of which
were established under charters from the British East India Company. The
three banks merged in 1921 to form the Imperial Bank of India, which, upon
India's independence, became the State Bank of India in 1955. For many years
the presidency banks acted as quasi-central banks, as their success, until the
Reserve Bank of India was established in 1935.
In 1969 the government of India nationalized all the major banks that it did not
already own and these have remained under government ownership. They are
run under a structure known as 'profit-making public sector undertaking' and
are allowed to compete and operate as commercial banks. The Indian banking
sector is made up of four types of banks, as well as the PSUs and the state
banks; they have joined since 1990s by new private commercial banks and a
number of foreign banks.

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In India, Banking was generally fairly mature in terms of supply, product range
and reach-even though reaches in rural India and to the poor still remains a
challenge. The government has developed initiatives to address this through
the State bank of India expanding its branch network and through the
NABARD (National Bank for Agriculture and Rural Development) with things
like microfinance.
Banks act as payment agents by conducting checking or current accounts for
customers, paying Cheque drawn by customers on the bank and collecting
Cheques deposited to customers' current accounts. Banks also enable
customer payments via other payment methods such as Automated Clearing
House, Wire transfers or telegraphic transfer, EFTPOS, and automated teller
machines.

The Indian banking sector has emerged as one of the strongest driver of India‘s
economic growth. The Indian banking industry has made outstanding
advancement in last few year, even during the times when the rest of the world
was struggling with financial meltdown. India's economic development and
financial sector liberalization have led to a transformation of the Indian
banking sector over the past two decades.
Today, Most of banks provide various services such as Mobile banking, SMS
Banking, Net banking and ATMs to their customers.

Indian banks, the dominant financial intermediaries in India, have made high-
quality progresses over the last five years, as is evidece from several factors,
including annual credit growth, profitability, and trend in gross non-performing
assets (NPAs). While annual rate of credit growth clocked 23% during the last
five years, profitability (average Return on Net Worth) was maintained at
around 15% during the same period, while gross NPAs fell from 3.3% as on
March 31, 2006 to2.3% on March 31, 2011.

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The Indian banking sector is a mixture of public, private and foreign
ownerships. The below table highlights top 10 banks which contributed 58%
share of the total credit as on March 31, 2011. The State bank of India has
recorded highest market share. The Net Interest Margin of HDFC Banks is
4.2% which is highest among others.

Broad Classification of Banks in India:

1. The RBI: It is the supreme monetary and banking authority in the country
and has the responsibility to control the banking system in India. It keeps the
reserves of all the scheduled banks and hence is known as the ―Reserve Bank.

2. Public Sector Banks:

 State Bank of India and its Associates (7)
 Nationalized Banks (22)
 Regional Rural Banks Sponsored by Public Sector Banks (46)

3. Private Sector Banks:

 Private Banks (17)
 Foreign banks operating in India (32)

4. Co-operative Sector Banks:

 State Co-operative Banks
 Central Co-operative Banks
 Primary Agricultural Credit Societies
 Land Development Banks
 State Land Development Bank

5. Development Banks:
Mostly development Banks provide long term finance for setting up industries
and Short-term finance provided for export and import activities.
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 Industrial Finance Co-operation of India (IFCI)
 Industrial Development of India (IDBI)
 Industrial Investment Bank of India (IIBI)
 National Bank for Agriculture and Rural Development (NABARD)
 Small Industries Development Bank of India (SIDBI)
 Export-Import Bank of India

Important Milestones of Indian banking industry

Prior to 1950 / Evolutionary Phase

Foundation Phase / 1948-1968

1968-1984/Expansion Phase

Banking Revolution‟

1985-1990/ Consolidation
lism and transparency in the functioning of public sector

1991 Onwards/Reformatory phase

competitive and mature financial market

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process

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Structure of Indian Banking Industry
Table No: 2 Structure of Indian Banking Industry

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Banking at State level
During the year 2013-2014, total number of bank branches increase by 342
(Metro-82, Urban-118, Semi-Urban-54 and Rural-88 ) taking the total network
of branches from 6091 as of March, 2010 to 6433 as of March, 2014 in the
gujarat.

The aggregate deposits of the banks at Gujarat increased by Rs. 46,777 crores
in absolute terms from Rs. 2, 25,299 crores as of March, 2010 to Rs. 2, 72,076
crores as of March, 2014 registering a growth of 20.76 % during the year ended
on March 2014.

During the year 2013-14, the aggregate credit increased by Rs. 32,228 crores
in absolute terms from Rs. 1, 55,575 crores as on March, 2010 to Rs. 1, 87,803
crores as of March, 2014 registering a growth of 20.72 % during the year ended
March 2014.

The Credit-Deposit ratio stood at 69.03 percent as of March 2013, which has
slightly declined by 0.02 percent, over the ratio of 69.05 % as of March 2014.

PESTEL Analysis of Banking Industry

Political factor affect banking industry in India

 Government affects the performance of banking sector most by legislature
and framing policy government through its budget affects the banking
activities.
 The government has infused Rs 23,200 crore (US$ 5.2 billion) into state-
owned banks during the last three fiscals to support capitalization.
 The Indian banking Industry is very depend on the monetary policy
decided by the RBI.
 A strict regulation with respect to capital and liquidity directly affects the
business of banks.
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 Banks need to adjust their interest rates accordingly which may or may
not favor them.
 Banks are forced to lend as per the guidelines of RBI that includes credit
growth in all sectors.
 Budgetary Measures announced by the government at the beginning of
every financial year also lay down guidelines to banks to lend or accept
deposits.
 The government can also increase credit in particular sectors such as
increase in farm credit, increase in infrastructure credit etc.

Economic factors affecting banking industry

 Economic factors in the country also affect the Banking Industry both
favorably and unfavorably.
 When the economy is in good shape in terms of high per capita income,
good agriculture harvest and normal inflation, banks have an edge as people
are left with more money to deposit them with bank.
 This helps in more capital formation as more deposits can be realized.
 In the times of economic boom also, more and more FDI is brought into
India through banking channels that actually improves business for banks
and the economy in general.
 Economic prosperity encourages lending business for banks but in times of
recession banks face tough time to recover their money, issue fresh credit
and NIMs is too lower.

Social factors affecting banking industry

 The Indian banking system has been progressing rapidly. Despite the large
number of banks in India, there are still several untapped rural markets.
 Many farmers still take loans from moneylenders at a very high interest
rate and small-scale industries continue to remain important for banks.

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 The growing population of India is a great opportunity for Indian banks as a
lot of peoples in the country want to open a bank account and develop good
savings habits.
 Changing lifestyle of the Indian urban population who wants easy ways of
financing to their desires.

Technological factors affecting banking industry

 Indian banking has been consistently working towards the development of
technological changes and its usage in its operations.
 Banks are expected to reduce costs, time and provide higher customer
satisfaction with the application of new improved technologies
 Internet banking or banking via the phone can be considered a remarkable
development in the banking industry.
 Mobile banking enables customers to check their account balance, transfer
funds 24x7, bill payments, booking of bus/flight tickets, recharge prepaid
mobile and do a lot more effortlessly and securely.
 Banking through cell phone benefits the banks too. It cuts down on the
cost of in-person banking and helps reduce headcount at branches.
 Technological development facilitate the flow of information and data faster
leading to faster appraisal and decision-making as well.

Environmental factors affecting banking industry

 Indian economy has registered a high growth for last three years and is
expected to maintain robust growth rate as compare to other developed and
developing countries Banking Industry is directly related to the growth of
the economy.
 The growth rate of different industries were: Agriculture : 18.5%Industry :
26.3%Services : 55.2%
 It is great news that today the service sector is contributing more than half
of the Indian GDP. It takes India one step closer to the developed economies

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 of the world. Earlier it was agriculture which mainly contributed to the
Indian GDP.
 This increases the avenues of investment by the industrial sector. This
would further increase the borrowings by the industry‘s leading to the
banking Industry.
 In regards with the service sector, as the income of the people will increase,
lending and savings will increase leading to increased business for the
banks.

Legal factors affecting banking industry

There are two major factors determining the legal aspects of the Banking
Industry:
1. Banking regulation act
In 1949, the Banking Regulation Act was enacted which empowered the
Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in
India. The Banking Regulation Act also provided that no new bank or branch of
an existing bank could be opened without a license from the RBI, and no two
banks could have common directors.

2. Intervention by RBI
The Reserve Bank of India (RBI) will intervene to smooth sharp movements in
the rupee and prevent a downward spiral in its value, but will balance this with
the need to retain reserves in the event of prolonged turbulence.

Current Trends in Banking Industry

Trends in Indian Banking Industry
 Banks have focusing on secured lending products (such as mortgage and
auto loans) for retail customer to drive credit off take.
 Pressure to meet targets under Financial Inclusion also increased the cost of
lending and decreased returns on advances for banks.

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 CASA growth slowed because of High Interest rates and pressure on
corporate cash flows which affect all banks.
 Due to Deregulation of Interest rates on saving deposits large amount of
competition is seen in Saving Deposits.
 Furthermore, India's economic expansion has made Indian banks more
global in their approach. Ten banks have opened 100 branches in foreign
jurisdictions as of February, 2014.
 Increasing mobile penetration, coupled with higher smart phone adoption
has led an uptrend in mobile banking. Number of transactions through
mobile banking witnessed a jump of 64 per cent in the April-December 2014
period, according to data from the RBI.
 Banks in India are highly alert in grabbing opportunities to increase
transaction volumes in their automated teller machines (ATMs) through
religious gatherings in the country. Private sector banks have introduced
mobile ATMs that migrate from one religious fair to another throughout the
year. For instance, HDFC Bank, the second largest private lender in the
country, had sent its mobile ATM to the MahaKumbh Mela-2013 in
Allahabad. Over 100 million people are estimated to have attended this fair
and the bank has noticed that the transaction volumes were phenomenal.
Similarly, Kerala-based Federal Bank stationed a couple of portable ATMs
near Sabarimala temple during the last festival season when thousands of
devotees visited the place.
 The ministry of Finance is believed to have infused Rs 12, 517 crore (US$
2.28 billion) into 13 public sector banks before March 2014, in order to keep
them adequately capitalized.
 The Government is also working with the RBI and NABARD to bring all
banks, including some co-operative banks on core banking solution (CBS)
and on the electronic payment systems (like NEFT and RTGS) by the end of
2015. All scheduled commercial banks and all regional rural banks (RRBs)
are already on CBS.

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 Apart from this, the ministry also contemplating to come up with India's
first Women's Bank as a public sector bank and shall provide Rs 1,000
crore (US$ 182.45 million) as initial capital. Necessary approvals and
banking license are expected to be obtained by October 2015.

Major players in banking industry

 Federal Allahabad and Oriental bank of commerce are the small banks in
terms of market capitalization.
 Bank of India, UBI bank, Yes bank, Canara, Induslnd is the mid-sized
bank.
 Axis Bank, Bank of Baroda, Punjab National Bank, Kotak Mahindra Bank
are the growing banks.
 SBI, ICICI, HDFC are the premium old generation banks.
 At present, along with the above bank there are five major foreign banks
including Standard Chartered, HSBC, Citibank, RBS and Deutsche, account
for over 70 percent of the total asset size of overseas lenders in the country.

Current Players in Banking Industry

 Indian banks consist mostly of Scheduled commercial bank (SCBs),
which includes both Public Sector Banks and the Private Sector Banks.
In Public Sector Banks, the government must retain a 51% stake.
 Old Private sector banks are those banks which were not nationalized at the
time of bank nationalization that took place during 1969 and 1980. Most of
the old private-sector banks are closely held by certain communities and
their operations are mostly restricted to the areas in and around their place
of origin. E.g. Federal Bank, Dhanalaxmi Bank, ING Vysya Bank.
 New private sector banks include those that were established in the past
twenty years such as Yes Bank, Axis bank and existing institutions that
were converted into commercial banks, such as the former development
institution ICICI and specialized lenders such as HDFC.

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 Cooperative banks are small-sized units registered under the Co-operative
Societies Act. That essentially lend to small borrowers and businesses. E.g.
Punjab & Maharashtra Co-op. Bank Ltd., New India Co-op. Bank Ltd.

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 COMPANYPROFILE

The Surat District Co-Op Bank is one of the leading co-operative bank in South
Gujarat Region. The Surat District Co-Op. Union Ltd. was registered on dated
17-6-1909. It was this institution which is known as The Surat DISTRICT CO-
OP. BANK LTD.
First decade of 20th century was a very important era in the history of
cooperation for entire country and Surat District as well. Many cooperative
institutions were initiated during this period. First Coop. Society in Surat
District was registered at Degam, Taluka Chikhli on 23-5-1906 (Now in Bulsar
District).

HISTORY OF COMPANY
In the year 1909, with the efforts of Late Shri B.A.Modi and Late Shri
K.G.Desai, The Surat District Co-op. union Ltd., was registered on the dated
17-6-1909. It was the institution which is later on known as The Surat District
Co-operative Bank.

In the year 1921, this society had undertaken banking activities in absolute
term. In 1923, the Surat District Co-op. union was converted into The Surat
District Co-op. Bank Ltd. The work extended to the entire Surat District, which
had 21 talukas and a vast working area with geographical variations. The Vast
Surat District was bifurcated in1965 and district of Bulsar was separated. At

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present there are 15 talukas in the Surat district, of which 9 are in the tribal
area.
Bank is having separate department for agriculture advances since 1944, and
become an effective central agency for Co-ordination and smooth flow of
finance to Co-operative sector in the district.

Co-Operative Organizations like:-

 The Surat District Milk Producers Co-op. Union Ltd.(SUMUL),
 The Purushottam Farmers Co-op. Ginning & Pressing Society Ltd.,
 The Surat Distrcit Co-op. Spinning Mills Ltd.,
 The Surat Jilla Sahakari Sale & Purchase Union.,
 The Surat Central Co-op. Stores Ltd.,
 Cotton Co-op Socities of Olpad Taluka,
After 1956 when Shree Khedut Sahakari Khand Udyog Mandali Ltd., Bardoli
came into existence, the entire Surat District gradually became a sugar belt.
However, Bank had provided them enough finance as also assisted even for
meeting share capital also. By lapse of time Sugar cane has now become
principal crop in the district and out of total cultivable area of 490000
hectares, 83191 hectares is under sugar cane cultivation. This revolution in
agriculture was amply supported by The Surat District Co-op. Bank Ltd. These
factories have become main strength of the economic structure of the district,
particularly for farmers. All together these factories have a crushing capacity of
35500 tons per day. Annual sugar production exceeds Rs.880/- crores. Bank
has sanctioned enough financial limits to this sector. Now a days, bank has
started financing projects for Drip irrigation, Medicinal crops, Fishery, Green
house etc. and would like to escalate the same on substantial extent. As per
the instructions/ guidelines of NABARD, of-late, Bank has also started
financing to the Non-farm sector including textile industry.

Bank has been enjoying privilege of having prominent citizens in fields like
Social, Co-operation and Agriculture, on its Board. The present and former
Vidyabharti Trust College Of BBA & BCA Page 25
members of the Board included outstanding Lawyers, Members of Parliament,
District Panchayat Presidents, Mayor of Surat City and Leaders from various
walks of life including ministers.
In the year 1965 The Surat District Co-op. Bank was separated after formation
of Bulsar District from old Surat District. After separation bank’s Financial
Position is as under.

Management:
Past Chairman of the Board Shri P.K.Desai was awarded “Kaka Saheb Gadgil
award for his outstanding services to the society and was also awarded by the
Gujarat State Co-op. Union by Sahakari Award. Shree Popatbhai Vyas, the
present Director on the board, remained as Home Minister of the State. Shree
Dilipbhai Bhakta, the present Chairman is also the Chairman of Madhi Vibhag
Khand Udyog Sahakari Mandali Ltd., and also enjoying key position in different
Co-operative Societies functioning in various fields.

Bank has been also committed for overall upliftment of the society. Donations
of lacs of Rupees are given to the Hospitals, Schools, Colleges and Social
Charitable Institutions. Also a separate fund has been created for donations to
the Educational organizations only. Another Trust is also created for Donation
to the Charitable and Social Service organizations viz. Surat District Co-
operative bank Charitable Trust. Bank has donated lacs of Rupees for the
ultimate benefit of people affected with natural calamities to the different
organization setup, for betterment of medical education etc.

Board has formed committees for loans, staff matters, Legal matters etc.
Powers have been delegated appropriately to smoothen day to day working.

Deposits:
Growth of deposit was steady and in harmony with Advances. At the end of
March 2010 deposit of bank was Rs. 1607.40 crores.
Vidyabharti Trust College Of BBA & BCA Page 26
Advances:
There are 8 sugar factories in Co-operative sector which have a turnover
exceeding Rs.600/- crores and as such, bank’s major share goes to this sector.
Major chunk of advances goes to sugar sector earlier.

In the last decade, bank has gradually paid more attention to non agriculture
and Individual advances. New schemes to finance for consumer durables,
vehicles, House construction and professional loans also have been introduced.
More attention is paid to develop banking routine business also. Powers are
delegated to the branch Managers to sanction loans up to Rs.5, 00,000/- for
“A1-Grade branch and Rs.3, 00,000/- for ‘B’ Grade branch under individual
non-farm sector loans.

Board of Directors and Managing Director

Table no 3: List of Board of Directors and Managing Director

Chairman
Nareshbhai Bhikhabhai Patel
Vice-chairman
Sandipbhai Jayantibhai Desai
Director
Dilipbhai Bhikhabhai Bhakta
Director
Prabhubhai Nagarbhai Vasava
Director
Sureshbhai Jagubhai Patel
Director
Dilipsinh Vajesinh Rathod

Narayanbhai Harjibhai Director

Donwala
Director
Bhagabhai Parbhubhai Patel
Director
Kiritbhai Ranchhodji Desai

Vidyabharti Trust College Of BBA & BCA Page 27

 Dhansukhbhai Nathubhai Director
Patel
Dr. Vikashben Kishorbhai Director
Desai
Director
Kiritbhai Gangarambhai Patel
Director
Kiranbhai Dahyabhai Patel

Arvindbhai Parsottambhai Director

Patel
Director
Sunilbhai Shreepatbhai Patel

Ganeshbhai Jaysingbhai Director

Chaudhari
Director
Dilipbhai Raghunathbhai Patil

Nayan Naveenchandra Director

Bharatiya

Vidyabharti Trust College Of BBA & BCA Page 28

Services Provided by Surat District Co-operative Bank Ltd:-
1. Safe deposit Locker
A locker is a small usually narrow storage compartment. They are commonly
found in dedicated cabinets very often in large numbers in various public
places such as locker rooms, work places, schools, transport centers, and the
like. They vary in size, purpose, construction, and security.
The locker service of SDCB Bank includes the following rules :
 The fix deposits of Rs 2500 must be deposit by customer for getting locker
service
 When customer fail to pay rent in cash than the rent amount is credited by
bank from customers saving account.
 Anything can be putted by customer in lockers except illegal things.
 Minimum Charges of rent is Rs 750 for 3 year including tax on small size
locker.

2. ATM (Automated Teller Machine)

Automated Teller Machine is a Machine at a bank branch or other location
which enables a customer to perform basic banking activities even when the
bank is closed. The charges on ATM service are 100 Rs a year. This is same as
that taken by other banks.

3. E-PAYMENT
E-PAYMENT is a comprehensive bill payment service as well as direct payment
of Income tax, Service Tax, TDS (Tax Deducted at Source) etc. from the
customer accounts.
E-Payment Customer benefits:
 Reputed and well established service.
 Provide trusted friendly and helpful customer service.
 E-Payment is the fast, smart and secure way to pay your bills.

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4. E-banking services
E-banking services also consider as online banking i.e. Internet banking and
Mobile banking.

1. Internet Banking
Surat District Co-operative Bank NET Banking is the Bank‘s Internet Service,
offering the various facilities to the Users such as Accounts enquiry, Statement
of account, Funds Transfer, Utility Bills Payment, Stop payment, request for
issuance of cheque book, request for issuance of DD, other requests, etc.,
alerts, financial modeling and other facilities as the bank may decide upon to
provide from time to time.

2. SMS Banking
The customer of Surat District Co-operative Bank can get all the information of
their accounting transactions through Mobile Banking The information such as
Current balance of Accounts Back dated balance of accounts, Cheques details,
Return clearing information & cheques returned on debit clearing, other bank
information and also ask for Help.

5. ECS (Electronic Clearing Services)

ECS is an electronic funds transfers from one bank account to another bank
account using the services of a Clearing House. This is normally bulk transfers
from one account to many accounts or vice-versa. This can be used both for
making payments like distribution of dividend, interest, salary, pension, etc. by
institutions or for collection of amounts for purposes such as payments to
utility companies like telephone, electricity, or charges such as house tax,
water tax, etc. or for loan installments of financial institutions/banks or
regular investments of persons.

6. Demand draft and pay order

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Demand draft: Demand Draft is way for remitters to transfer money. A
demand draft is more secure than a normal cheque as it can only be credited to
a specific payee's account, and a customer can only be reimbursed under
indemnity if the draft is lost or stolen.
Pay order
Pay order is secure way to make payment. Pay order can be made of your
party's name. So, instead of giving cheque you can make pay order from bank
and bank will make a payment from your account.

7. RTGS\NEFT:
The acronym 'RTGS' stands for Real Time Gross Settlement, which can be
defined as the continuous settlement of funds transfers individually on an
order by order basis. 'Real Time' means the processing of instructions at the
time they are received rather than at some later time. Gross Settlement' means
the settlement of funds transfer instructions occurs individually (on an
instruction by instruction basis).
NEFT is an electronic fund transfer system that operates on a Deferred Net
Settlement (DNS) basis which settles transactions in batches. In DNS, the
settlement takes place with all transactions received till the particular cut-off
time. For example, currently, NEFT operates in hourly batches - there are
eleven settlements from 9 am to 7 pm on week days and five settlements from 9
am to 1 pm on Saturdays. In NEFT less than or up to 200000 Rs is to transfer.

8. Bill discounting
Bill discounting is a major activity with a lot of banks especially in geographies
involving a lot of exports and import activities. In Bill discounting, Financial
Institutions takes the bill drawn by borrower on his (borrower's) customer and
pay him immediately deducting some amount as discount/commissions. The
Financial Institution then presents the Bill to the borrower's customer on the
due date of the Bill and collects the total amount. If the bill is delayed, the

Vidyabharti Trust College Of BBA & BCA Page 31

borrower or his customer pays the Bank a pre-determined interest depending
upon the terms of transactions.

9. Loans and advances

The Surat District Co-operative Banks provide loans and advances to its
customers. In finance, a loan is a debt evidenced by a note which specifies
that, among other things, the principal amount, interest rate, and date of
repayment. In a loan, the borrower initially receives or borrows an amount of
money, called the principal, from the lender and is obligated to pay back or
repay an equal amount of money to the lender at a later time. Typically, the
money is paid back in regular installments, or partial repayments having same
installment amount. The loan is generally provided at a cost, referred to as
interest on the debt, which provides an incentive for the lender to engage in the
loan.

10. General Insurance

SDCB is the first Co-operative bank in Gujarat to obtain a corporate agency in
general Insurance sector. Reserve Bank of India granted and Insurance
Regulatory and Development Authority (IRDA) license holder.
Following are the kind of Insurance provided by Surat District Co-operative
Bank:
 Mediclaim
 House-hold Insurance
 Fire and Burglary
 Personal Accident
 Shop Keepers
 Machinery Breakdown
 Overseas Mediclaim for Foreign Exchange

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11. PAN Card
Surat District Co-operative Banks also provide PAN Card service where any
person can apply for a PAN Card though he is not a customer of Surat District
Co-operative Bank. The charge of this service is only 106 Rupees per head.

ORGANOGRAM-

President

Director

General Manager

Assistant General Manager

Manager

Officer's

Senior Clerk

Junior Clerk

Peon

Swip
per

Table no: 4 Organizational chart

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Divisions/Departments

Following are the departments of Surat District Co-operative Bank.

1. Loan Department
2. Administration Department
3. Technical Department

1. Loan Department
(a) Loan Application Department:
In loan application department mainly processing of loan application is done.
In this department all the required documents along with the application are
been collected and then sanctioning is done for further procedure.
(b) Loan Disbursement Department:
When the documents are been submitted by the customer for taking loan
than investigation on such documents is done by this department to find out
whether the documents are true or not and once the bank is satisfied with
the investigation than the loan amount is been paid to the customers.
(c) Loan Recovery Department:
The customers who fail to pay the loan amount than for recovery of the
amount of the loan from the customers is done in Loan Recovery Department.
All the legal action are been taken to recover the loan.

2. Administration Department
(a) Personal Estate:
The work related to human resource is done in this department i.e. salary of
the staff, recruitment, selection, training etc. is done by the Personal Estate
department.
(b) Share Department:
As the Surat District Co-operative Bank has its own share a separate
department is developed to do all the works related to shares like share issue,
payment of dividend, share allotment, etc.

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 3. Technical Department
(a) EDP Department:
The Electronic Data Processing (EDP) Department is developing for data
processing and computer hardware and software implementation. Any
development of software for data entry of banking transaction is done in this
department all the E-Banking services like internet banking, ATM, Mobile
banking etc. are been handled in EDP Department.

SWOT analysis
SWOT means Strengths, Weakness, Opportunity and Threats so sorting out of
the qualities according to the given category is SWOT analysis.
Strength
 The Bank is the "Oldest Registered Urban Co-operative Bank" of India and
ISO 9001:2008 certified.
 Among the first 13 Co-operative Banks in September 1988 to get the
"Scheduled Bank" Status.
 The Bank introduced "SMS Banking Facility" facility at all branches for
better customer service.
 Only Co-op bank of South Gujarat to have direct connectivity to RBI server
for RTGS /NEFT facility. .
 Bank has gained financial strengths in terms of Profitability.
 Bank has highly qualified and experienced staff.
 There is constant increase in the annual profit of Surat District Co-operative
bank.
 Bank has tied up with ICICI Bank for ATM facility.
 It is the bank who issue 0% KCC to customers in India.

Weakness
 Underutilized capacity particularly in rural areas.
 Inadequate access to global financial system.
 Lack of staff to deal with large number of customers.
Vidyabharti Trust College Of BBA & BCA Page 35
 Foreign exchange service is not properly developed and there is no facility of
Making NRI account.
 The ATM centers are very less of Surat District Co-operative bank.

Opportunities
 It can develop its more branches in other Metro cities and states and
expand its business at a National and Global level.
 The profit of Surat District co-operative bank is very high and hence it can
do more and more promotional activities and can attract new customers.
 Increase the profitability by accessing international financial market
for procuring funds cheaply and deploy funds prudently.
 Huge opportunities in rural area where people still depend of money lenders
and relatives.

Threats
 Many multinational banks are going to establish in Surat city and hence
this may reduce the customers of SDCB as many people prefer
multinational companies because of its quality service.
 Recently RBI has given the license to 26 non-banking multinational
companies such as Reliance Capital, IDFC, Edelweiss Financial, Muthoot
Finance, Reliance Capital, J M Financials, Religare Enterprises, Aditya Birla
Nuvo, L & T Finance Holdings, TATA Sons, Bajaj Finserv etc. hence there
will be more competition.
 The house hold savings comprising financial assets are moving away
from bank deposits to more sophisticated form of financial assets such as
mutual funds, stocks and derivatives.

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 Literature review

1)
TOPIC: A study on Co-operative Banks in India
AUTHOR: SOYELIYA USHA L.
INTRODUCTION: These banks, until 1996, could only lend for non-
agricultural purposes. As at end-March 2011, there were 1,645 UCBs
operating in the country, of which majority were non-scheduled UCBs.
Moreover, while majority of the UCBs were operating within a single State,
there were 42 UCBs having operations in more than one State. However,
today this limitation is no longer prevalent
OBJECTIVES:
 To know the lending practices of cooperative banks in India
 To measure and compare the efficiency of Cooperative Banks of
India.
 To study the impact of „size‟ on the efficiency of the Cooperative
Banks
 To suggest the appropriate measures to improve the efficiency of
the Cooperative banks.
 To know different type of loans preferred by different sets of
customers.
 To know the satisfaction level of the customers from Bank’s
lending policies.

CONCLUSION:

1. Majority (32% as per the study) of the respondent were having

housing loan from this bank.
2. Most (64% as per the study) of the people prefer to take long
term loan which is more than 3 years.
3. There is a very simple procedure followed by bank for loan.

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 4. Easy repayment and fewer formalities are the main factors
determining customer’s selection of loans.
5. Quality of services provided by the staff is satisfactory because
bank is catering to a small segment only and the customers are
properly dealt with.
6. Customers are satisfied with the mode of repayment of
installments.
7. Average time for the processing of loan is less i.e. approx 7 days.

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 2)

TOPIC: A study on Cooperative Banks in India with special reference to

Lending Practices
AUTHOR: Jyoti Gupta , Suman Jain
INRODUCTION: These banks, until 1996, could only lend for non-
agricultural purposes. As at end-March 2011, there were 1,645 UCBs
operating in the country, of which majority were non- scheduled UCBs.
Moreover, while majority of the UCBs were operating within a single State,
there were 42 UCBs having operations in more than one State. However,
today this limitation is no longer prevalent. While the co-operative banks in
rural areas mainly finance agricultural based activities including farming,
cattle, milk, hatchery, personal finance, etc.
OBJECTIVES:
1. To know the lending practices of cooperative banks in India.
2. To measure and compare the efficiency of Cooperative Banks of India.
3. To study the impact of „size‟ on the efficiency of the Cooperative Banks.
4. To suggest the appropriate measures to improve the efficiency of the
Cooperative banks.
5. To know different type of loans preferred by different sets of customers.
6. To know the satisfaction level of the customers from Bank‟s lending
policies.

CONCLUSION:

1. Majority (32% as per the study) of the respondent were having housing
loan from this bank.
2. Most (64% as per the study) of the people prefer to take long term loan
which is more than 3 years.
3. There is a very simple procedure followed by bank for loan .
4. Easy repayment and less formalities are the main factors determining
customer’s selection of loans.

Vidyabharti Trust College Of BBA & BCA Page 39

 5. Quality of services provided by the staff is satisfactory because bank is
catering to a small segment only and the customers are properly dealt
with.
6. Customers are satisfied with the mode of repayment of installments.
7. Average time for the processing of loan is less i.e approx 7 days.

Vidyabharti Trust College Of BBA & BCA Page 40

 3)
TOPIC: The Effect of Mergers and Acquisitions on Financial Performance of
Banks (A Survey of Commercial Banks in Kenya)

AUTHOR: Gwaya Ondieki Joash

OBJECTIVE:
General Objective
The general objective of the study was to establish the effect of mergers and
acquisitions on financial performance banks (a survey of banking industry
in Kenya).
Specific Objectives
(i). To determine the effect of the mergers and acquisitions on the
shareholders’ value in relation to financial performance
(ii). To examine the implication of mergers and acquisitions on profitability
of companies

CONCLUSION:

According to this study, the main reason why organizations and mostly
within the Kenyan banking industry merge and/or acquire others, is to
enlarge their market share and increase their profitability. This is achieved
through two or more banks coming together, combining their resources
together with one agenda to raise their profitability. Such resources as
skills, management systems, equipment, processes and procedures are
strengthened through the mergers and acquisitions with an aim of raising
their productivity. In such a scenario, unless otherwise, the productivity is
most likely to rise hence justifying the mergers and acquisitions in the
banking sector.

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 Research methodology

A. PROBLEM STATEMENT
“Characteristics of merging bank in India.”

B. RESEARCH OBJECTIVE

Primary Objective
 To analyze the distinctive financial characteristics of the acquirer and the
target firm.
Secondary objective
 To identify the motives of merger and acquisition.
 To identify The Surat district co-op bank have characteristics of target firm
or acquirer firm.
.
C. RESEARCH DESIGN
Exploratory research design is used because researcher has limited
knowledge about motives (variable) of merger and acquisition. To identify that
primary data will be collect. The target population will be bank manager of
various branches.

Descriptive research design will be use to identify different financial

characteristics of target bank and acquirer bank. Secondary data will be use to
identify why bank become acquire or merged.

D.RESEARCH SAMPLE

Sampling Plan:

 Sampling Units:
 Branch manager of various banks for primary data.

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  Indian Banks which are merged or acquired.
 All Indian bank.

 Sample Technique: Non-Probability Convenient Sampling

 Research Instrument: Structured Questionnaire.

Sample Size:
 Personal interview of 50 branch manager will be taken for primary data.
 Period of 1994 to 2014 are taken for merged or acquired Bank. 25
merging bank and 25 merged bank

DATA COLLECTION TOOL

 Structured questionnaire will be use for primary data collection.
 Money control website as well as other websites of various banks will be
used for financial data collection.
Data Source
 Primary Data:
The primary data will be collect by means of a survey. Questionnaires were
prepared and bank manager of various branches were approached to fill up the
questionnaires. The questionnaire will be prepared to identify what are the
various factor of bank leads to merger and acquisition.
 Secondary Data:
Secondary data has been collected of various merging and merged banks in the
Banking Industry from the year 1992 to 2014. Various financial variables of
the selected banks have been considered like total deposits, lending loans, total
assets, share capital, net profit, P/E ratio, DP ratio etc. These data are taken
three years prior to the year of the merger of that selected bank.

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Sample for Secondary Data
Name of the acquiring bank Bank targeted
(Merging bank) (Merging bank)
Kotak Mahindra Bank ING Vyasa Bank
ICICI Bank Bank of Rajasthan Ltd.
HDFC Bank Centurion Bank of Punjab
Indian Overseas Bank Bharat Overseas Bank
Federal Bank Ganesh Bank of Kurandwad
Industrial Development Bank of India United Western Bank
Centurion Bank of Punjab Lord Krishna Bank

ICICI Bank Sangli Bank

Bank of Punjab Centurion Bank
Industrial Development Bank of India IDBI Bank Ltd.

Bank of Baroda South Gujarat Local Area Bank

Oriental Bank of Commerce Global Trust Bank

Punjab National Bank Nedungadi Bank Ltd.
ICICI Bank ICICI Ltd.
Bank of Baroda Banaras State Bank Ltd.

ICICI Bank Bank of Madura

HDFC Bank Ltd. Times Bank Ltd.
Bank of Baroda Bareilly Co-op Ltd.

Union Bank of India Sikkim Bank Ltd.

Oriental Bank of Commerce Bari Doab Bank Ltd.

Oriental Bank of Commerce Punjab Co-op Ltd.

State Bank of India Kashinath State Bank

Bank of India Bank of Karad Ltd.

Punjab National Bank New Bank of India

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TOOLS FOR DATA ANALYSIS

 Tabulation of data:
The data will be tabulated in Ms-Excel (2007) and SPSS (16.0) for
making analysis easier.
 Analysis of collected data:
For analysis of the data following method or statistical tools has been
used:
a) Graphical method
b) Pie charts
c) Table
d) Bar diagram

 Methodology
 One way annova will be used to identify distinctive financial
characteristics of the acquirer and the target firms and Surat district co-
operative bank.

 Hypothesis:
HO: There is no significance difference in mean of Merging Bank, Merged
Bank and The surat district co-op Bank.

H1: There is a significance difference in mean of Merging Bank, Merged

Bank and The surat district co-op Bank.

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  DATA ANALYSIS AND INTERPRETATION

PRIMARY DATA:

Particular (variables) Very Important Neutral Less Un

important important important

Size of the firm

Total Deposit 70% 30%
Lending Loan 62% 36% 2%
Total asset 72% 28%
Share capital 64% 32% 4%
Net profit 30% 58% 12%
Management performance
EPS 52% 48%
d/p ratio 36% 60% 4%
price earning ratio 38% 54% 6% 2%
% change in net profit 36% 50% 12% 2%
% change in gross profit 14% 30% 18% 38%
% change in sales 8% 48% 12% 32%
Liquidity
Current ratio 38% 58% 4%
Quick ratio 26% 70% 4%
Cash ratio 10% 22% 42% 10% 16%
Solvency
Debt-to-assets ratio 22% 70% 4% 4%
Debt-to-capital ratio 2% 34% 20% 22% 22%
Debt-to-equity ratio 26% 58% 10% 6%
Profitability
Return on assets (ROA) 38% 60% 2%
Return on equity (ROE) 40% 54% 6%
Capital structure
% of debt capital 40% 56% 4%
% of equity capital 42% 50% 8%

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 size of firm
Very important Important Neutral Less important Un
2% 4% 4%
12%
28%
36% 32%
48%
60%
58%

72%
62% 64%
52%
30% 36%

Total Deposit Lending Loan Total asset Share capital Net profit EPS

Management performance
Very important Important Neutral Less important Un important

2%
6% 2%
12%
38% 32%
54% 50% 12%
18%

30% 48%
38% 36%
14% 8%

price earning ratio % change in net % change in gross % change in sales

profit profit

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 Lequidity
Very important Important Neutral Less important Un

4% 4%
16%
10%
58%
70%
42%

38% 22%
26%
10%

Current ratio Quick ratio Cash ratio

Solvency, Profitability, Capital structure

Very important Important Neutral Less important Un important

4% 6% 2% 6% 4% 8%
4%
22% 10%

22% 60% 54% 56% 50%

70% 58%
20%

34% 38% 40% 40% 42%

22% 26%
2%

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Interpretation:
70% of respondent says that Total deposit is very important, 62% of
respondent are says that it also very important, and 72% of respondent says
that total asset is very important.
38% of respondent says that % change in gross profit is unimportant but, some
of them say that % change in net profit is more important than gross profit and
change in sales also.
Some respondent gives negative response for % change in gross profit, %
change in sales, Debt to capital ratio so that variables are not considered for
further study.
So finally researcher has selected following variables are as below:
 Total deposit
 Lending loan
 Total asset
 Share capital
 Net profit
 Eps
 D/p ratio
 Price earnings ratio
 % change in net profit
 Current ratio
 Quick ratio
 Debt-to-assets ratio
 Debt-to-equity ratio

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 SECONDARY DATA

AVERAGE
MERGING BANK MERGED BANK SUDCO
Total deposit (crore) 76,684.19 30696.51 2959.17
Lending loan (crore) 58,308.33 21169.6 777.02
Total asset (crore) 113,262.57 42152.7 58.65667
Share capital (crore) 513.16 242.1401 10
Net profit (crore) 1,167.16 338.2429 9.916667
Eps (rs) 22.33 17.48754 99.16667
D/p ratio (%) 28.76 14.7071 15
Price earning ratio 7.02 5.419962 6.76
% Change in net profit 34.53 5.954652 10.11667
Current ratio 0.26 2.036957 0.356667
Quick ratio 10.93 11.67029 0.303333
Debt-to-assets ratio 0.08 0.015652 0
Debt-to-equity ratio 0.07 0.366377 0
Return on assets (%) 216.66 64.61261 50.887
Return on equity (%) 101.96 99.95043 15
% Of debt capital 18.15 3.184348 0
% Of equity capital 81.85 96.81522 100

Interpretation:

From the above table it is interpreted that relatively merging bank has more
than double Deposit, Lending loan, Total asset, Net profit, Share capital,
compare to merging bank. So, merging banks are bigger than merged banks in
India. It is also interpreted that merging Banks Management performance is
also better compared to merged bank and it is measured by Return on Capital,
Return on Asset, %Change in Profit, EPS, D/P Ratio.

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 FINDING
 From the study it is found that there is a significance difference among Total
deposit, Lending loan, Total asset, Net profit, P/E ratio, % change in profit,
current ratio, Quick ratio, Debt to asset ratio, Debt to equity ratio, Return
on equity, % of debt capital, % of Equity capital of Merging Bank, Merged
Bank and The surat district co-op Bank.
 It is also found that size of merging banks are bigger in term of Total
Deposit, Lending loan, Total asset and Net profit and Profitability of
merging bank is higher than merging bank which is measured by ROA,
ROE.
 Researcher has found that Merging Bank has better management
performance compared to merged bank in term of Return on asset, Return
on equity, D/P ratio, EPS, % change in profit.
 It is found that Lending loan, Total asset, Net profit, Return on asset have
positive correlation with Total Deposit, While current ratio and quick ratio
have negative correlation with Total Deposit.
 It is found that the some characteristics of The surat district co-operative
bank matches with Target Bank. They are Total deposit, lending loan, share
capital, total asset, net profit, quick ratio, ROA, ROE. Other variable like
change in profit, P/E ratio, current Ratio, and capital structure of Surat
district co-op bank are matching with Acquiring bank.

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 CONCLUSION

 From the study it is concluded that the Size of firm of merging bank is
bigger than target firm, target bank has higher liquidity compared to
merging bank, Merging bank has better management performance
compared to target firm.

 There is a significance difference among Total deposit, Lending loan,

Total asset, Net profit, P/E ratio, % change in profit, current ratio,
Quick ratio, Debt to asset ratio, Debt to equity ratio, Return on equity,
% of debt capital, % of Equity capital of Merging Bank, Merged Bank
and The surat district co-op Bank.

 Total deposit, lending loan, share capital, total asset, net profit, quick
ratio, ROA, ROE of SUDCO are matched with target bank, while
change in profit, P/E ratio, current Ratio, and capital structure are
matched with Merging bank.

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 LIMITATIONS OF THE STUDY

 Small sample are taken in this study so it may or may not generalize the
whole population.
 The result will applicable only for banking sector not for others.
 Three years financial data of banks will take for the analysis.

Only financial variable will be take into consideration not other variable like
product or service characteristics.

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 Bibliography

Websites
 www.sudicobank.com
 www.freepatentsonline.com/article/Paradigm/238426582.html
 http://www.icacec.com/images/content/Indianbankindustry.gif

Journal:

(Kaur) (Rajib) (Rachel T. A. Croson) (Kakani)

Kakani, Jay Mehta & Ram Kumar. "Merging scenario in India." (2006).

Kaur, Amanpreet. "MERGERS AND ACQUISITIONS IN THE INDIAN BANKING

SECTOR ." International Journal of Research in IT & Management (April 2014).

Rachel T. A. Croson, Armando Gomes, Kathleen L. McGinn a. "An Experimental

Analysis of Synergies, Externalities and Dynamics." Oxford university pressed
(2004).

rajeshkumar, B. (n.d.).

Rajib, B Rajesh Kumar and Prabina. "Characteristics of Merging Firms in

India." Vikalpa (2007).

Vidyabharti Trust College Of BBA & BCA Page 54