View of AN ANALYSIS OF COMPOUND ANNUAL GROWTH RATE (CAGR) OF DEPOSITS OF GRAMIN BANKS: SPECIAL REFERENCE TO NARMADA JHABUA GRAMIN BANK

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ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING Peer Reviewed and Refereed Journal, ISSN NO. 2456-1037

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Vol. 06, Issue 10,October 2021 IMPACT FACTOR: 7.98 (INTERNATIONAL JOURNAL)

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AN ANALYSIS OF COMPOUND ANNUAL GROWTH RATE (CAGR) OF DEPOSITS OF

GRAMIN BANKS: SPECIAL REFERENCE TO NARMADA JHABUA GRAMIN BANK Prof. Smita Chaitanya

Assistant Professor, Govt. Commerce College, Ratlam (M.P.)

Abstract - The research paper is related to the study and analysis of deposits CAGR of Narmada Jhabua Gramin Bank for the period of seven consecutive years i.e. 2012-13 to 2018-19. By this papers I analyzed that a positive trend is found over the year in the deposits of said bank.

Keywords: NJGB, CAGR.

1 INTRODUCTION

Today we are in a global economy where only the best can survive. Success depends on performance, whether one is a small company, non-profit or a large corporation or a cooperative. Some institutions are set apart from the mass of their competitors and have become leaders and have been predisposed to success because of the ability to combine the components of high performance in the right proportions and to transform them into winning strategies.

Fundamental changes have occurred in the Indian banking industry in the recent years. This change has been a consequence of degradation to a large extent. It has led to the creation of a more market competitive environment within the banking sector in India.

Section 5 (b) of the Banking Regulations Act, 1949 defines banking as the business of “Accepting deposits of money from the public for the purpose of

lending or investment”. As per this definition the important functions of a banking company are acceptance of deposits or lending or investing such deposits. If the purpose of acceptance of deposit is not to lend or invest, the business will not be called banking. The deposits accepted by Banking Company or by a Non-Banking Finance Company or any other company differ in terms of the nature of their repayment. Banks are the only financial institute which can accept demand deposits (Saving/Current) that can be withdrawn using a cheque.

2 STRUCTURE OF BANKING INDUSTRY IN INDIA

The present Indian Banking system is constituted by a number of institutions comprising Reserve Bank of India as the apex bank, Indian commercial banks, cooperative banks, regional rural banks, foreign banks and other specialized banking institutions.

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ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING Peer Reviewed and Refereed Journal, ISSN NO. 2456-1037

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2.1 Introduction of Narmada Jhabua

Gramin Bank

Narmada - Jhabua Gramin Bank was established on 01 November 2012 with two earlier prime banks viz. Narmada Malwa Gramin Bank sponsored bank, Bank of India and Jhabua Dhar Regional Rural Bank whose sponsor bank was Bank of Baroda, came into existence after the amalgamation of these banks. It is spread over a vast area of 14 districts of Madhya Pradesh with 353 branches as on March 2015.

This bank came into existence as part of the process of structural

consolidation of Regional Rural Bank, under the notification of Government of India dated 01-11-2012 from the amalgamation of 02 erstwhile Regional Rural Banks in the state of Madhya Pradesh. The head office of the bank has been established in Indore. The bank's jurisdiction is 14 districts of West Madhya Pradesh. That are Dewas, Shajapur, Khargone, Khandwa, Burhanpur, Barwani, Sehore, Rajgarh. It is spread across Indore, Ujjain, Dhar, Jhabua, Alirajpur, Agra (Malwa). The branch network has been described by the following table:

District and Regionwise Position of Branches as on 31-3-2019 S.

No. Regional

Office District

Covered No. of Branches Category wise

Metropolitan Urban Semi- Urban Rural Total 01 Dewas

Dewas -- 07 07 28 42

Shajapur -- - 07 13 20

Agarmalwa -- - 07 03 10

Total -- 07 21 44 72

02 Dhar Dhar -- 02 10 60 72

Total -- 02 10 60 72

03 Jhabua

Jhabua -- -- 06 18 24

Alirajpur -- -- 03 12 15

Barwani -- -- 09 13 22

Total -- -- 18 43 61

04 Khargone

Khargone -- 03 08 25 36

Khandwa -- 03 05 19 27

Burhanpur -- 02 02 09 13

Total -- 08 15 53 76

05 Sehore Rajgarh -- - 11 26 37

Sehore -- 03 07 16 26

Total -- 03 18 42 63

06 Ujjain Indore 19 02 05 09 35

Ujjain -- 11 07 13 31

Total 19 13 12 22 66

Grand Total 19 33 94 264 410

3 RESEARCH METHODOLOGY

The secondary data has been used for the analysis. The data is collected by the published yearly reports of the Narmada Jhabua Gramin Bank. After collecting the data it is categorized in tabular format and analysis through CAGR formula.

3.1 Compound Annual Growth Rate (CAGR)

The Compound Annual Growth Rate (CAGR) calculate and determine returns for individual assets, investment portfolios, and anything that can fluctuate in value over a period of time. It is one of the significant tool for making comparison of long-term growth scenarios. CAGR provides a growth rate in the form of a percentage. The formula to calculate CAGR is mentioned below:

CAGR = Ending Value Beginning Value

1 Number of years

− 1

3.2 Deposits:

It is one of the major source of fund for bank as it provides funds for financing and investment. Customer deposit is the main concern for any bank that’s why, it is necessary to examine the deposit of Narmada Jhabua Gramin Bank.

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ACCENT JOURNAL OF ECONOMICS ECOLOGY & ENGINEERING Peer Reviewed and Refereed Journal, ISSN NO. 2456-1037

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Table No.-1 Trends in Deposits of NJGB

during 2012-13 to 2018-19 (Rs. in Lakh) Year Narmada Jhabua

Gramin Bank 2012-13 333366.74 2013-14 374021.80 2014-15 420496.66 2015-16 478392.95 2016-17 594147.79 2017-18 611090.51 2018-19 685444.21

CAGR (%) 10.85%

Source: Annual Report of Narmada Jhabua Gramin Bank.

Graph No. 1 Trends in Deposits of NJGB during 2012-13 to 2018-19

3.3 Analysis:

It is observed from the above table that the over the course of 7 years deposits of Narmada Jhabua Gramin Bank grew from 333.36674 to 685.44421. Its compound annual growth rate (CAGR) is 10.85%. High levels of customer deposits indicates that the banks had a comfortable liquidity profile. Thus a positive trend found in the deposits of the bank. It indicates that economic growth of India is increasing day-by-day and citizens of rural areas also becoming capable and trusting in banking system.

REFERENCE

1. Dantwala Committee Report – Observations and recommendations on Rural Banks 1978 2. Narashimhanm Committee-Working Group on

Rural Banks 1975-76.

3. Jeams Raj Committee on functioning of Public Sector Banks 1978

4. C E Kamath Committee on Multi Agency Approach in Agricultural Finance 1978s 5. C E Kamath Committee on Multi Agency

Approach in Agricultural Finance 1978

6. Parshad, J., & Kumar, S. (1985). Role of Regional Rural Banks- A Study. Kurukshetra, 33(8), 32-33.

7. Annual Reports of Narmada Jhabua Gramin Bank.