Kalupur Commercial Cooperative Bank Ltd.

, Ahmedabad
How it came about
bank on convenient terms.
Kalupur Commercial Coop.
Lot of Urban Banks were
Bank Ltd., was founded in
getting registered elsewhere
1970 to cater to the needs like
in Gujarat and rest of the
timely and adequate credit
country as well. Grain
facilities of small traders and
Merchants of Kalupur also
industrial units in big cities.
gathered together to form
With this objective in mind
this Bank. It started
Ahmedabad Grain Merchants'
functioning in 1970 in just
Association promoted this bank
250 sq.ft. area in the
under the leadership of late
premises belonging to the
Shri Baldevbhai Dosabhai
association. The same
Patel. The Bank was registered
branch still exists, though the
in 1970-71 under Gujarat State
area of the branch is much
Coop. Societies Act and later
larger now and its daily
widen its scope by registering
turnover is more than Rs.10
under multi-state cooperative
crores. The Bank owes its
societies Act in 1995. It has a
growth to its Founder
network of 31 branches of
Chairman late Shri Baldev
which 3 are functioning in
Bhai Dosa Bhai Patel, who
neighbouring urban towns viz.
served this Bank till he
Barla, Bareja and Sanand in
breathed his last in 1997. He
Ahmedabad District. The Bank
was only matriculate but had
also opened branches outside
a vision towards the growth
Ahmedabad at Anand,
of the Bank. He understood
Vadodara, Khambat and
quite early that with the
Kalbadevi (Mumbai).
nationalisation of the Bank
the small traders would
After nationalisation of banks
experience difficulties in
in 1969 there was a need for
getting credit and other
small traders to have their own
banking services. The bank
FACTS & FIGURES
progressed from mere one
branch with membership of
o Organisational type : Primary Urban Coop. Bank only 280 and deposits of
o Legal Form : Coop. Bank Registered under
Rs.27.66 lakhs to 31
Multi coop.societies Act
o Operational form : Scheduled Bank branches with more than
o Date established : December 1970 twenty eight thousand
o Location : Kalupur Bank Bhavan members, having share
Near Income Tax Circle
Ashram Road, Ahmedabad 380014
capital of Rs.15.27 crores
o Phone & other : Phone 079-27582020 - 26 and deposits of Rs.1083
Communication Fax 079 27544450 crores. The growth was
Web - www.kalupurbank.com
tremendous during his long
Email - info@kalupurbank.com
o No.of members : More than 27 thousand who have contributed tenure of chairmanship for
a capital of Rs.13.85 crores. By end of 27 years. The Bank
2004-05 the bank has created reserves of continues to grow thereafter
Rs.498 crores
o No. of employees : 440 employees including officials
too. By the end of 2005-06
o Turn over : Deposits Rs.938 crores, advanced Rs.566 the Bank had 31 branches,
crores Working Capital Rs.1515 crores and 28388 members, Rs.1083
profit of Rs.18 crores
crores deposits,

Case Study prepared by Prof. Paramjit Sharma, VAMNICOM, Pune

 in the country, people lost
Rs.579 crores advances and faith in cooperative banking
earned a profit of 24 crores, as system. Consequently, large
on 31st March 2006. number of Urban Banks
collapsed and Kalupur Bank
too suffered a dent. Their
Madhavpura Experience deposit base got depleted
from Rs.1298 crores in 1999-
2000 to Rs.731 crores post
When in the year 2001 there Madhopura incident. The
was a financial scam at Management recovered to
Madhopura Cooperative Bank show upward trends in the
many people became deposits, thereafter once
susceptible towards coop. again the
banking system. Since Kalupur members/customers realised
Bank was also formed by about the credibility of the
traders like Madhopura, Bank.
therefore customers concern
about their deposits was quite What it does
genuine. They started with
drawing money from the Bank, Recognised by RBI as
particularly from its Kalupur scheduled Bank in 1988 the
branch which has mainly Bank enjoys competitive
deposits from traders. During edge over its counter parts
that time, the bank had a very on account of this advantage.
strong deposit base of Rs.1298 Besides per-forming banking
crores, majority of which was activities to the benefits of its
in form of long-term deposits. members, the Bank
The management took various undertakes score of non-
steps to win over the banking activities. It has
confidence of the customers. been a top ranking scheduled
But customers wanted to be on Urban Bank of Gujarat and
the safe side and withdrew first among Urban Banks in
their deposits. The Gujarat in terms of own
Management put massive funds and deposits. Out of
shamianas (tents for shadow), 31 branches of Bank, 28
arranged water and food for branches are operating from
the depositors, continued, and bank's own premises. The
allowed the customers beyond bank has set up goals for it
banking hours to withdraw and plan for their
their deposits. After few days achievement. These goals
when the depositors realised were :-
that the Bank has not been 1. To develop the bank into
discouraging withdrawals and an ideal urban bank.
even making all arrangements 2. To further fine-tune the
for the convenience of the corporate governance
depositors, they started 3. To exhibit transparent
depositing back their administration by the
withdrawals and reposing their BODs
faith with Bank. Even today 4. To provide new and value
the customers have full added services to our
confidence on the credibility of members.
the employees and the Bank.
One can discernibly notice
The damage was done to plans and their
cooperative sector by implementation by the
Madhopura Bank. It had a management of the Bank. It
chain reaction. At many places
has created one of the best be able to settle their cross
infrastructure, recruited well country payments within
qualified personnel, providing hours, at a very nominal
the best services, the cost.
election of the BODs are
quite transparent, the The bank has been
accounts are well maintained advancing loans to various
and computerised and their categories of borrowers'
services are to the best keeping in view the national
satisfaction of the customers objective including priority
and members. sector advances. It
advances loans to small-scale
The members have been industries, artisans, profess-
getting dividend @ 12% p.a. ionals, transport operators
since 1997-78. The bank business enterprises, housing,
also distributed divided at customer durable loans
higher rates during some of including for vehicles,
the financial years. In the agriculture and allied
year 1999-2000, the activities etc.
dividend distributed was
20%. The bank is Besides savings and current
maintaining much higher deposits the bank accepts
capital adequacy ratio than term deposits namely
minimum recommended by cumulative, Kamdhenu and
RBI. The Bank has been Kal bank. The Kamdhenu
complying with RBI norms for deposit is accepted for a
SLR & CRR and invest perod of 36 months with a
surplus funds in Govt. minimum deposit of
securities and public sector Rs.1,000. The rate of
bonds which are highly safe interest is compounded
and liquid. As per RBI quarterly and loan could be
guidelines, the Bank has made available against this
stopped any fresh finance to deposit. In Kalbank deposit
Directors and their scheme, the deposit is
associates. The Bank has accepted for between 15 to
initiated many steps to 181 days, thereafter it gets
accelerate recovery of NPA automatically renewed for
dues during the year. It same period, till it is
could recover good chunk of withdrawn. The rate of
bad assets due to effort interest is lower than
taken by the management Kamdhenu and minimum
and credibility of the amount of deposit should be
Directors. Rs.5,000 and thereafter in
multiples of Rs.1,000 is
The Bank has also been accepted. The depositor can
providing certain customer take loan against this
friendly services like D-mat, deposit.
Stamp Franking Service,
Insurance, Selling Gold The deposit pattern of the
Coins, Any Branch Banking, Bank shows interesting
ATM, Cheque Depository features. Out of total
Service, Collection of bills of deposits of Rs.1083 crores,
Ahmedabad Municipal Corp- in the year 2004-05, almost
oration and Gujarat Rs.749 crores (69%) are
Electricity Board, Real time towards term deposits. The
Gross Settlement services savings accounts showed
etc. With the help of RTGS deposits of Rs.209 crores
(Real Time Gross Settlement) (19%) and current account
Scheme the customers would Rs.125 crores (12%).
The other deposits like Merger and Acquisition of
recurring deposits etc., have UCBs
attracted less than 1%. It
shows confidence of the As per vision document of
members and the customers RBI, the Bank tried to seize
on the bank that is why the opportunity to
almost 69 percent of their consolidating their branch set
deposit base is in form of up through merger with
term deposits which gives lot financially weak bank. The
of leverage to the Bank to bank initiated move for
advance the funds for longer merger of three banks in
duration. Ahmedabad. Two banks
namely Standard Coop.Bank
The Kalupur Bank is the first (2 branches), Royal Coop.
Ahmedabad based bank to Bank (1 branch) have
work as depository already got merged with the
participant of National bank. This has increased
Securities Depository Limited branches strength of the
(NSDL). It offers to its Bank to 31 including one
customers a whole range of extension counter at NIRMA
depository services. NSDL University. The bank decided
carries out its depository to abandon the decision of
functions through a network merging with Mahila Utkarsh
of 'Depository Participants' Nagrik Sahakari Bank Ltd. (4
who conduct business with branches) due to non-
the investors. The fulfilment of merger terms.
depository system functions
very much like the banking Cooperative Centenary
system where one can open Celebration
an account and deposit/with
draw/transfer the money. The Bank joined the whole
cooperative movement of
Similarly one can open a India through celebrating
security account on the hundred years of cooperative
'depository participants', movement. Seminars at all
withdraw security and branches of the Bank were
instruct the 'depository organised where the
participants' to deliver/ achievements of the sector
receive securities. as well as of the Bank were
discussed and highlighted.
The Bank also offers d-mat To spread the message of
services at 9 branches viz. cooperation amongst the
Kalupura, SM Road, Patrakar general public, essay and
Colony, Sola Road, elocution competition were
Panchvati, Drive-in, Vasna, arranged in various schools
Mani Nagar and Bapu Nagar on the subject of
branches. Through these Cooperation. Various
services bank facilitates attractive hoardings were
opening d-mat accounts, displayed at important points
accept d-mat requisite forms, across the state, highlighting
issue delivery slips and also achievements of various
accept delivery slips for cooperative sectors of the
market and off-market state like Cooperative Dairy,
trades. Bank has tied up with Fertiliser production and
Max New York Insurance Co. distribution by IFFCO, Credit
for life insurance and with disbursed by cooperative
Bajaj Allianz for non-life banks and role played by
insurance. urban banks in development
of the state cooperative
sector. During the members out of 27,000
concluding function, 27 members attend the AGM but
leading cooperatives, like Dr. their participation in the
Verghese Kurien, Smt. Ilaben decision making of the Bank
Bhat, Shri Mulibhai has been of great
Chaudhary of Dudh Sagar importance. Even during
Dairy, Mehsana, pioneers of Madhopura crisis a
Kalupur Bank late Shri questionnaire was distributed
Baldevbhai Dosabhai Patel to all branches to contact the
and Shri Gopaldas Shivlal members and get their views
Patel, ex-Chairman of the about the stability &
Kalupur Bank. credibility of the Bank.

Other important features The Bank has 15 members in

the Board including the
Chairman, Managing
The Bank encourages bright
Director, two co-opted
children of its employees and
profeesional board members
shareholders through
and the General Manager as
scholarship as monetary
ex-officio board member.
incentive, so that they could
The Chairman and Vice
complete higher education.
Chairman are elected
Also, Bank gives immediate
amongst the Directors. The
relief of Rs.10,000/- to the
Chairman, Vice-Chairman
family of deceased member
and Managing Director have
to enable them to perform
made rich contributions to
the last rites of the departed
take the Bank to greater
soul. For their own
heights. There are two
employees, the Bank
professional Directors co-
organises various training
opted for advice. The term of
programmes in the area of
the board is for five years,
technology, modern banking
but each year few members
and better customer services
retire and on rotation basis,
for development of its human
election is held for filling up
resources. The Bank has
the vacancies.
constituted various sub-
committees of the board to
The Directors meet during
manage branches and other
the last week of every
important aspect of banking.
month. The agenda is
prepared in advance and
distributed to the board
Governance Structure
members well in advance.
Each item is discussed at
The Bank is collectively
length and Chairman seeks
owned by its members,
views of all members
which are more than twenty
including the professionals.
seven thousand in number.
Besides Director's meetings,
Majority of them are small
sub committees have been
traders from Kalupur Mandi,
formed to facilitate Director's
but traders from other areas
work. Sub committees like
in Ahmedabad have also
Committees of Directors,
been admitted. The
Special Committee of
members play pivotal role in
Directors, Investment
governance of the bank in
committee, Audit Committee,
annual general meetings,
Assets Liability Management
branch level committees &
Committee, Information and
during get together with the
Technology Committee,
customers. Though six
Recovery Committee,
hundred to seven hundred
Building Committee etc.,
have been formed. These against housing, cost of
committees meet at least deposits, advances to
once in a month and if need Director, their relatives and
be they can meet as many companies in which they are
times, if required. The interested, movement of
meetings are held in a NPAs, profitability, profit per
harmonious atmosphere and employee and investments in
all decisions are taken public sector securities.
unanimously after an
indepth, transparent The Directors are also
deliberation on a democatic involved in training
note. programmes in-house or
organised outside the Bank.
The Bank does not have They have attended training
system of enclosing a copy of programmes on Leadership,
Annual Report along with the Financial Management,
notice to the members for Branch Management, Micro-
attending the Annual General financing, Assets Liability
Meeting. The members can Management, Legal aspect of
obtain the copy of the report banking etc.
from Share Department at
Head Office of the Bank and Measures of Success
in certain cases annual report The financial growth of the
can be obtained from nearest Bank has been quite
branch of the Bank. Thisastonishing. It has touched
practice, though nota deposit base of nearly
desirable, must have been Rs.1300 crores in the year
followed as only twenty to 1999-2000. But for
twenty five percent of the Madhopura incident, the
members attend the AGM. Bank could have easily
Definitely, this practice savescrossed two thousand crores
cost, but there could be a by now. Still by the end of
likelihood of members 2005-06, it has deposit base
attending the AGM without of 1083 crores, advances to
having sufficient information the tune of 579 crores and
about the happening in the profit of more than eighteen
Bank during the previous crores. Besides financial
year. The Bank needs to be strengths the bank has an
more compassionate towards excellent infrastructure. All
members' needs, services branches, including head
and communications. Except office are owned by the Bank
AGM and customer meets and some of the branches
there appears to be no other have been recently
interactions between theconstructed and confidently
members and management. could be matched with any
The frequency of meeting multi national organisation.
and participation needs to be The customers are quite
strengthened and increased. satisfied with the services of
the Bank. To review any
Lot of transparency has been lapse on the part of the
noticed in the dealing of Bank, it seeks suggestions
management with customer, from the customers during
members and reporting. get togethers at branch level.
The schedules of disclosure The members get credit
in the Annual Report has facility without much delay
included information on from the Bank and continued
movement of CRAR, to get dividend @ 12% p.a.
investments, advances from the Bank. The Bank
against real estate, advances has more than 440
employees, who are quite
committed towards the
development of the Bank.
The Bank nearly spends ten
crores towards salaries,
allowances, provident fund
and bonus to employees,
which is almost 10% of their
total expenditure. The
working environment of
employees are not less than
any standard bank and their
training needs are met
through in-house or through
training at other institutions.
The bank has started a
separate division for
marketing its services. This
division has shown excellent
results.
Key to success
Kalupur Bank is rated one
amongst the best in
Ahmedabad and the best
amongst cooperative banks
in Gujarat. It enjoys market
credibility due to its strong
capital base and excellent
services. With share capital
of Rs.15.27 crores, own
funds over Rs.533 crores,
Capital Adequacy Ratio
(CRAR) at 61.68% against
required 9% by RBI, total
provisions for NPAs Rs.178
crores against required
provisions of Rs.125 crores,
Net NPA of 0%, Liquid
investment in form of cash,
G-Securities & deposits in
RBI and other banks
amounted to Rs.1047 crores
by end of 2006. It was
graded as category "I" bank
as per RBI Urban Banks
classification. Similarly, the
members credibility has also
been rising from 280
members. With a single
branch in 1970-71, it has got
strength of 28,000 members
as on 31 March 2006. It has
31 branches, not only in
Ahmedabad but also outside
Ahmedabad. The members
get regularly dividend at
good rate from the Bank.
For members and customers
the bank provides facilities
like deposits, loans, ATM,
mobile banking, d-mat
service, gold coins, RTGS
(Real Time Gross
Settlement), Stamp
Franking, cheque depositor
services etc.
IT interventions
The Bank has seventeen
employees headed by a
Manager for providing
computerised solutions to the
bank. It is only first of its
kind Bank, which has
developed its own software
in banking. For all its
services, the Bank is served
by these employees who
have provided software for
all the services provided by
the Bank, including D-mat at
8 branches. All the branches
are linked with each other
and concept of any branch
banking apply. The
customers can withdraw the
money from any of the
branch of the Bank. The ATM
services are available at
Ashram Road, St.Xavier's,
Vastrapur and Sola Extension
counter, Swastik, SM Road,
Bhopal, Bapu Nagar & 4
other branches. The Bank is
planning to further this
facility to seven more
branches.
Besides technology the IT
centre also organises training
programmes for the
employees at the computer
lab where simultaneously 20
persons can be given hands
on practice training.
Future Perspective
Though the bank has
progressed to have 31
branches from mere one
branch at Kalupur Bank in 36
years, but its focus from
small and marginal traders
has not changed. It has
extended the basket of
services from mere credit on
easy terms to anywhere
banking, mobile banking,
ATM etc., but the member's
interest always remained
paramount for the bank. The
Bank has been initiating to
help self-help group
comprising of poor women so
that it can also extend
valuable hand in eradication
of poverty in the society. It
is contemplating to start
Grameen Bank (Bangladesh)
Model in Ahmedabad district.
The Bank practices
transparency in its
operations but planning to
make it more transparent so
that members can get any
type of information and
without any inconvenience.
Kalupur Bank Management
wishes to return and invest
back to the society what it
has got from it. It is already
into the field of education
through KB Institute of
Pharmacy, Gandhinagar and
may like to extend its field to
engineering and medical
education. The marketing
division created few years
back would be strengthened
so that Brand Equity of the
Bank can be positioned in the
minds of the members and
customers. as a bank of their
own which is transparent,
best governed and cares for
its customers.