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ZENITH International Journal of Multidisci plinary Research Vol.2 Issue 5, May 2012, ISSN 2231 5780    w    w    w  .    z    e    n    i    t     h    r    e    s    e    a    r    c     h  .    o    r    g  .    i    n    1    2    4  A STUDY OF THE PROFITABILITY OF URBAN COOPERATIVE BANKS (IN GREATER MUMBAI ANDJALGAON FOR 5YEARS) DR.SEEMA SANT*; DR P.T CHAUDHARI** *Sr. Faculty Member, Indigrow Institute of Professional Studies, Mira Road East. **Head of Department of Commerce, M.J.College, Jalgaon (M.S). ABSTRACT This paper evaluates the performance of Urban Cooperative banks for the period 2004-2009. Financial ratios are employed to measure the profitability, liquidity and credit quality  performance of Ten Urban Cooperative banks from Jalgaon and Greater Mumbai The study found that overall bank performance increased considerably in the years of the analysis. A significant change in trend is noticed at the onset of the global financial crisis in 2007, reaching its peak during 2008-2009. This resulted in falling profitability, less liquidity and deteriorating credit quality in the Indian Banking sector. KEYWORDS: Bank performance, financial ratio analysis, Profitability, Urban Cooperative  bank.  ________________________ __________________________ INTRODUCTION The study uses Ratio analysis to compare profitability and productivity of UCB’s of selected  banks as Ratio analysis is a powerful tool of financial analysis. In financial analysis ratios are generally used as benchmarks for evaluating a firm’s position or performance. The absolute values may not provide us meaningful values until and unless they are related to some other relevant information. Ratios represent the relationship between two or more variables. Ratios help to summarize large data to draw qualitative judgments about the firm’s performance. The common denominator used for developing the various profitability ratios is business volume (deposits + advances). The banks generally use calculate spread ratio as % of total assets. The total assets are accounting (Balance sheet) figures, which are based on historical costs and hence are not very suitable to evaluate the current performance of the banks. In order to have a suitable indicator for evaluating current bank performance we have used the volume of business (Advances + Deposits) in the denominator. . Productivity has been measured in terms of the outputs (like Business, deposits, advances) per input (employee). The ratios used for measuring the profitability of the banks are as: 1. Interest earned ratio (r) = Total interest earned/Volume of business x 100 2. Interest paid ratio (p) = Total interest paid/Volume of business x 100

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