An Analysis Of Capital Adequacy Of Tamilnadu State Apex Co-Operative Bank Ltd

Abstract

The state apex cooperative bank is the backbone for the development of entire cooperative system in the state. Having strong financial performance of the bank will aid for development of rural economy. In this context, the researcher studied one of the components of financial performance, i.e., capital adequacy of Tamilnadu State Apex Cooperative Bank Ltd. for the study period of 11 years from 2013-14 to 2023-24. The study collected financial data from annual reports of the bank. The researcher used seven financial ratios which could bring out the results of capital adequacy of the bank. Apart from the above ratios, the researcher also applied simple percentage, mean, standard deviation and CAGR. The study found that borrowings of Tamilnadu State Apex Cooperative Bank increased drastically during the study period. Deposits of the bank increased at a very lower rate. Deposits are the major components of the total liabilities, but during last two years, borrowings occupied in the position of having major portion of total liabilities. It indicates that the bank increased its borrowings level during the study period and it is not a good trend and therefore the banks should reduce borrowings in future. Among various types of deposits, the growth rate of current deposits is high. Where as term deposits increased at a lower rate. The capital adequacy position of the bank was good in terms of capital adequacy ratio having higher ratio than the standard. Its capital adequacy position in terms of deposits to own funds ratio demand deposits to total deposits ratio is also good during the study period. Capital adequacy in terms of deposits to total liabilities ratio is at satisfactory level and lower internal fund generation rate was found during the study period.