A study on working capital management of TDCC Bank

The economic development emerging out of globalization, liberalization and privatization has resulted in the creation of very competitive environment. Due to this prevailing environment of competition, the role of public sector is declining and private sector is rising very strong. Hence, cooperative banks have no option but to compete with these highly professionalized institutions in providing rural credit to the farmers. The cooperative movement in India is the largest in the world and the cooperatives have been playing a distinct and significant role in the country's socio-economic development. For the purpose of socio -economic development of the rural area the successful functioning of cooperative banks is must. The most important function required for the purpose of the success of cooperative banks is working capital management. Working capital management is one of the most important functions of cooperative bank management. Working capital can be utilized for the payment of lease, employee's payroll, and pretty much any other operating costs that are involved in the everyday life of business. The overall success of the cooperative banks depends upon its working capital position. So, it should be handled properly because it shows the efficiency and financial strength of cooperative banks. TDCC Bank has done wonders for the four districts economy such as Tiruchirapalli, Karur, Ariyalur and Perambalur. Although the main aim of the TDCC Bank is to provide cheaper credit to their members and not to maximize profits, they may access the money market to improve their income so as to remain viable. So, the performance of TDCC bank should have to be analyzed and evaluated. The study is an attempt to analyze the efficiency of working capital management of TDCC Bank during 2000–2001 to 2009–2010. Only secondary data have been collected for the study. Ratios are used to test the Liquidity position, solvency position and the percentage of returns on its working capital employed. Correlation analysis is used to find out the relationship between the profit and working capital position of the bank. Only 10 banks out of 23 DCCBs in Tamilnadu made profits. Their aggregate profit stood at Rs. 54.56 crore. Out of ten banks the best performed bank is TDCC Bank. If the bank upgrade technology and connect all the branches with head office, there is no doubt that it may render remarkable services to its customers both in rural and urban.