International Journal of Management, Technology And Engineering ISSN NO : 2249-7455

A STUDY OF SARVA HARYANA GRAMIN BANKS IN POST

MERGER PERIOD WITH SPECIAL REFERENCE TO TOTAL
BUSINESS MANAGEMENT

SHENTI KUMAR, [Link] BHUSHAN,

Research Scholar Department of Commerce
(Department of Commerce) NIILM University,Kaithal
NIILM University,Kaithal

ABSTRACT:
Banks play a very important role in the economic development of every Nations. Banks are the main stimulus of
the economic progress of a country. The development process of a country is usually nourished by its banking
system. They have control over a large part of supply of circulation. In RRBs there are three shareholders namely
Govt. of India (50%Share) sponsor banks (35%), and state govt. (15% share). The sponsor bank, which provides
assistance in the form of subscription to its share capital, managerial assistance, also helps in recruitment, training
and development of personnel. At present there is no Haryana Gramin Banks Via notification of Govt. of India
dated 29th Nov., 2013, Haryana Gramin Bank Sponsored by PNB and Gurgaon Gramin Banks amalgamated and
known Sarva Haryana Gramin Bank. Sarva Haryana Gramin Bank Sponsored by PNB.

KEYWORDS: Business Management, Evaluation Performance, , Merger, Regional Rural Banks

I INTRODUCTION
Banks play a very important role in the economic development of every Nations. Banks are the main stimulus of the
economic progress of a country. The development process of a country is usually nourished by its banking system.
They have control over a large part of supply of circulation.
Regional Rural Banks have been in existence for around four decades in the Indian financial scenario. After the
nationalization of banks, the Government felt that there was a need to have specialized network of bank branches to
fulfill the credit needs of the rural poor. Keeping the requirement in view, the Banking Commission (1972) observed
and recommended establishment of an alternative institution which provide banking facilities in rural area. And
finally, the Government of India established Regional Rural Banks on the 26th September 1975 as a separate
institution with an objective to ensure sufficient institutional credit for agriculture and other rural sector. In order to
fill up this gap, a new set up of banks, namely RRBs play a pivotal role. The establishment of more rural branches
undoubtedly has served the twin objectives of mobilization of rural deposits and channelization of credit to the rural
areas. The credit absorption capacity in the rural areas largely depends on the availability of required infrastructure.
The deposit mobilization and channelization of credit in social and productive units to meet the social objectives with
profitability is the major motive of any financial institution. Regional Gramin Banks (RGBs) as like any other
commercial banks in the country mobilize the deposits of people and as business institution they utilize deposit in

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providing credit to needy people in rural and backward areas and thereby try to earn certain profit for their survival.
Regional Rural banks are jointly owned by central Government, State Government and Sponsor Bank. From the
commencement of 6 RRBs having 17 branches in 12 districts in December 1975, the number has increased 196 RRBs
with 14,446 branches working in 518 districts across the country on 31st March, 2004. As per the recommendations
of the Vyas Committee (2004), the Govt. of India initiated the process of consolidation of RRBs by amalgamating
RRBs into the sponsored bank within a State The amalgamated RRBs were anticipated to provide better customer
service due to better infrastructure, pooling of experienced work force, computerization of branches,. As a result of
amalgamation, the number of RRBs was reduced from 196 to 133 as on March, 2006 and further to 82 RRBs with
15,658 branches operating in 621 districts as on March 2011. Thus, under the amalgamation process, a number of
RRBs have been amalgamated but the branches have increased. Total no of branches of RRBS are 19082 on 31st
march, 2014The authorized capital of RRBS is 100 crore which later augmented to 500 crore. There were five
commercial banks, State Bank of India, Punjab National Bank, Syndicate Bank, United Commercial Bank and United
Bank of India which sponsored the regional rural banks. In RRBs there are three shareholders namely Govt. of India
(50%Share) sponsor banks (35%), and state govt. (15% share). The sponsor bank, which provides assistance in the
form of subscription to its share capital, managerial assistance, also helps in recruitment, training and development of
personnel
II SARVA HARYANA GRAMIN BANKS
In Haryana state, the previously RRBs were set up as Haryana Kshetriya Gramin Banks with Head office, Bhiwani,
Hisar-Sirsa Kshetriya Gramin Bank, with Head Office Hisar and Ambala-Kurukshetra Gramin Bank, with Head
Office Ambala City with the objectives to take the banking to rural masses particularly unbanked rural areas to make
available institutional credit to weaker sections of the society, to mobilize rural saving and channelise them for
supporting productive activities in the rural areas. As per Government of India, notification, On 21st December, 2005
all the above three Regional Rural Banks were merged and knew as Haryana Gramin Bank HGB) with its head office
at Rohtak came into existence. Gurgaon Gramin Bank sponsored by Syndicate Bank, established in March 1976 under
RRBs Act, 1976. It had a network of 20 branches on dated 31.12.1976. In the end of financial year 2011-12, it had
210 branches. Gurgaon is situated in the southern part of Haryana state. At present there is no Haryana Gramin Banks.
Via notification of Govt. of India dated 29th Nov., 2013, Haryana Gramin Bank Sponsored by PNB and Gurgaon
Gramin Banks amalgamated and became Sarva Haryana Gramin Bank . Sarva Haryana Gramin Bank Sponsored by
PNB. At present, head office of SHGB is in Rohtak. The Sarva Haryana Gramin Bank has a network of 610 branches
spread over 21 districts of its operation.
III REVIEW OF LITERATURE
A large volume of literature is available on various aspects related to banks in India. Studies were made on Public
sector banks, Private sector banks and also on Regional Rural Banks in India regarding their performance, service
quality, customer satisfaction, employee satisfaction etc. Since the inception of the RRBs in 1975, the RRBs and the
various aspects of their performance have attracted the attention of academicians, researchers and policy makers from
time to time in the country. Though studies on the performance of RRBs are few, a good number of studies have been
done in other states of India.
Pasricha, G.S (1990) in his case study “Performance of Regional Rural Banks” concluded that the banks performance
under performed well in the fulfilled of nation targets laid down by RBI. The annual performance of Regional Rural

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banks has remained quite satisfactory and disbursement have been quite higher than the target except for small scale
industries
Kumar and Sharma (2011) in a comparative study of Himachal Gramin Bank and Parvatiya Gramin Bank found that
the Parvatiya Gramin Bank is more conservative as compared to the Himachal Gramin Bank with regard to NPAs'
management.
Vijaya Boothpur and Morage Prakash V (2012) examined the effective monitoring and control will definitely reduce
the possibility of asset turning out to be Non-performing. It is found that Krishna Grameena Bank is making all efforts
to control the NPA. It has kept the NPA ratio very low even below the standard norm of two to three per cent. It
shows the efficiency of the Bank in managing the NPA.
Rajesh M.V. and T.V. Raju (2013) in their research article 'Performance of RRBs in India' analysed the performance
of RRBs in the rural centre of the southern region contrasts strategy with that of the RRBs in the rural Centre of the
other regions of the country. Andhra Pradesh ranks first and Kamataka ranks second in terms of the aggregate deposit
and gross credit outstanding. The CD ratio is well already of 100 per cent in respect of rural branches of RRBs in all
the states of the southern region.
IV RESEARCH METHDOLOGY
The present research work is based on the secondary data. With a view to achieve the objective, the Secondary data is
collected chiefly from financial statements compiled by the head office of Sarva Haryana Gramin Bank, RBI bulletin,
RBI Annual Reports, RBI Trend and Progress of Banking in India, Annual Reports of NABARD and its various
journal published. The study has been covered the year from 2013 to 2018. It has examined the growth and
performance of Haryana Gramin banks and to assess the growth and Credit Deposit Ratio will be used for evaluation
of management performance of Bank. For analyzing and interpreting the results, the statistical tools like arithmetic
mean, Standard Deviation and computed annual growth rate has been used.
V OBJECTIVES OF THE STUDY
1. To evaluate the management performance of Haryana Gramin Banks in post merger period.
2. To analyses the impact of banking sector reforms on the performance of Sarva Haryana Gramin Banks in
post merger period.

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VI CREDIT AND DEPOSIT RATIO

Management performance of the Banks is reflected by the Credit Deposit Ratio. C-D Ratio is one of the
parameter to evaluate the performance of a bank. The Credit Deposit explains the extent to which the depositor's
money is advance in the form of loan and the extent to which such money is placed in the form of investment

TABLE 1: CREDIT AND DEPOSIT RATIO IN POST MERGER PERIOD

Year Advances Deposits C/D Ratio
( in thousands) ( in thousands)
2013 54532262 84834274 64.28

2014 55296114 87095151 63.49

2015 61886687 91930353 67.32

2016 67774910 101236945 66.95

2017 74323450 120305025 61.78

2018 84936750 135564583 62.65

Mean 66458362.17 103494388.5

S.D 11770909.78 20332499.63

CAGR 7.66% 8.13%

Sources: Compiled reports of Sarva Haryana Gramin Banks

The Credit Deposit Ratio of SHGB from 2013 to 2018 shows very fluctuate trend . The mean value of advance
and deposits of the bank is increased. The C-D Ratio of the bank raised from 64.28 per cent in 2013 to 62.65 by
the end of March 2018.

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VII THE TOTAL BUSINESS OF THE BANK

TABLE 2: TOTAL BUSINESS AND NET PROFIT IN POST MERGER PERIOD
Year Total Business( in thousands) Net Profit(in Thousands)
2013 139366536 1526771

2014 142391265
1528543
2015 153817040
1549976
2016 169011855
1012350
2017 194628475
1020040
2018 220501333
1020040
Mean 169952751 1306284.746

S.D 32001403.1 259623.6221

CAGR 7.95% -3.95%

Sources: Complied reports of Sarva Haryana Gramin Banks

The total business of the bank estimated as the sum of aggregate deposits and aggregate advances. The total
business of SHGB in absolute figure expanded from Rs. 139366536 crores to Rs. 22050133 Crores in 2018. Mean
value of total business is increased and mean value of net profit is decreased.
VII CONCLUSION
Regional Gramin Banks (RGBs) as akin to any other commercial banks in the country activate the deposits of
people and as business institution they utilize deposit in providing credit to needy people in rural and backward
areas and thereby try to earn certain profit for their survival. The study suggests that the policies adopted by RRBs
in wake of financial sectors reforms contributed immensely to strengthen their contribution in rural
[Link] profit of the bank is decreased . The computed annual growth rate of net profit is negative
because of non performing assests. It should be improved by giving emphasized on total business management.

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REFERENCE:
[1] Kumar, R., & Sharma, M. (2011).Rural banking in Himachal Pradesh: a comparative study of Himachal
Gramin Bank and Parvatiya Gramin Bank. Political Economy Journal of India.

[2] Lalitha Chavadi. (2010). Recovery of Loans under Commercial Bank: A Micro study. Southern Economist,
49(2), 25-27.

[3] Malhotra and Rakesh. (2002). Performance of India‘s Regional Rural Banks (RRBs), Effect of the Umbilical
Cord. URL:[Link] [Link]. accessed on 11/03/2010.

[4] Pasricha, Gursharan Singh (1990), “Performance of Regional Rural Banks”. A case study of GSP-ASR
Regional Rural Banks

[5] Pasricha, J.S (1993), Banking and Rural Development, Anmol Publication Pvt. Ltd., New Delhi, pp.375-383.

 Websites:

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