Financial Performance Evaluation

In the present liberalized and free-market economy, the closer scrutiny of the performance of UCBs has become the utter necessity. In the light of the host of the recommendations of several committees the measurement of performance of banks has gained the unprecedented significance. The issues like capital adequacy, asset quality, liquidity, earning quality and profitability, management efficiency have become the integral agenda of performance evaluation.

MEANING

Performance evaluation is a systematic and periodic assessment of an organization. It involves cumulative consideration of factors that may be subjective or objective, to determine representative indicator or appraisal of an entity’s activity or performance in reference to some

It refers to the critical examination of the financial information contained in the financial statements in order to understand and make further financial decisions. Balance sheet, profit and loss account are two basic financial statements of great importance to promoters, management and investors. Analysis of financial performance is effectively used to predict, compare and evaluate the firm’s earning ability. It is also required to aid in economic investment and financial decision-making. Financial data of an UCB is knitted into the fabric of its accounting system and annually in the form of financial statement. However, the information provided in the financial statements cannot be of much use unless the meaningful conclusions are drawn from these statements about the performance of the enterprise. But due to this the importance of financial statements can not be overlooked as they provide the first-hand information about the performance and provide the ground level information about its financial exercise and overall performance. When the figures recorded in the financial statements are rearranged, regrouped and analyzed with the help of analytical tools, they become conveniently comparable with the given standards and give the

Availability of easy and cost-effective banking services for savings, investments and credit enables the people to break the chain of poverty by using the credit for various productive and consumption purposes. This underlines the need of efficient and viable urban co-operatives in the society.

The co-operative banking has traversed a long since it was fathered by Robert Owen in late 1700s in England. The co-operative banking sector in India holds a distinct identity, as it is the only institution of micro credit dispersion. As has been mentioned above the UCBs, as an important segment of co-operative banking, has shown the phenomenal growth and deep penetration in urban, sub-urban and rural areas. They have been proved as the best for supplying un-exploitative, cheap, sound and dynamic credit to small borrowers, professionals, artisans and the weaker sections of