A Comparative Evaluation of Financial Performance of District Central Co-Operative Banks in Haryana (India)
Indian financial system is blended with vast network of financial institutions, markets, services and instruments, where each component plays significant role in an integrated way. Recognized as rural economy globally, the impetus to financial institutions operating in rural sector has increased tremendously and cooperative credit institutions having a lead, proved their worth at various stances. Cooperative credit institutions are engaged in production, marketing, distribution, servicing, processing and banking with vast and powerful superstructure. Cooperative banks have been working at state, district and village levels. But scams in cooperative sector, failure and closure of unviable branches, imposition of penalty by RBI or NABARD and payment of heavy money claims by DICGC due to bankruptcy of cooperative banks are few significant reasons which tempt to have a look into the financial affairs of these institutions. Many banks became insolvent and others are on the verge of mergers or acquisition. The 19 DCCBs with nearly 100 branches and covering varied 33000 societies have been working as a backbone for the rural banking sector in Haryana. In the present study, an attempt is made to analyze the financial performance, efficiency and viability of Five District Central Cooperative Banks (DCCBs) operating in Rohtak division in Haryana (India) for a period of twelve years (1997–98 to 2008–09) through financial analysis with different parameters and z-score analysis. The end results reveal that these banks are in astonishing situation as one bank performed well on one criterion and deteriorated on another, like all the banks performed well in case of liquidity but needs to make improvements on profitability, solvency, efficiency and risk parameters. Similarly, all the DCCBs have been deficient on different parameters and make the situation more vulnerable on bankruptcy parameter. These banks have been suffering from financial mismanagement and underutilization of resources.
Co-operative Credit Institutions, Profitability, Liquidity, Solvency, Efficiency, Risk, Financial Viability).