Performance Evaluation of District Central Co-Operative Banks of Rajasthan

As the banking sector is considered a vital segment of a modern economy, its efficiency is of vital importance. In order to ensure a healthy financial system and an efficient economy, banks must be carefully evaluated and analyzed. While banks help business organizations by rendering a wide range of products and services, the products and services are more or less identical from one bank to another, and there is little scope for differentiating between them. Therefore, it is necessary to measure the banks' individual performance to determine their contribution to business development. Banks are growth-driver and the banking business is wide open to various risk, such as credit risk, liquidity risk, interest risk, market risk, operational risk and management risk. Apart from these risks the very important risk is recovery of NPA. The healthy financial position of a bank depends upon the recovery of loans or its level of Non-performing assets (NPAs). Reduced NPAs usually gives the impression that banks have strengthened their credit appraisal processes over the years and growth in NPAs involves the necessity of provisions, which bring down the overall profitability of banks. One of the basic objectives of co-operatives is economic and social welfare of its members and NPA has become a hurdle in the performance of Co-operative Banks. Ratio Analysis has been used to obtain a quick indication of Banks' financial performance in several key areas; the ratios are categorized as Total Provision Ratio, Shareholder's Risk Ratio, Problem Asset Ratio, and Depository Safety Ratio. An attempt is made, in this paper, to analyze the performance of District Central Co-operative Banks of Rajasthan by looking at the difference in the ratios of all 29 DCCBs