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ADISSERTATION REPORTOnA STUDY OF CREDIT APPRAISAL PROCESS WITH REFRANCE TO CO-OPPRETIVE BANK ,SANGAMNERSUBMITTED TOSAVITRIBAI PHULE UNIVERSITY OF PUNEIN PARTIAL FULFILLMETNT OFMASTER OF BUSINESS ADMINISTRATIONBYMISS:DURGA KISAN KHAIRNAR(M.B.A) FINANCEUNDER THE GUIDANCE OFPROF.L.D. SHAH

AMRUTVAHINI INSTITUTE OF MASTER OF BUSINESS ADMINISTRATION(2014-15)

Introduction I have great pleasure in presenting my project report. The subject of my project is is in A STUDY OF CREDIT APPRAISAL PROCESS WITH REFRANCE TO AMRUTVAHINI SAH. BANK LTD. GHULEWADI SANGAMNER & MERCHANT CO-OPPBANK SANGAMNER. completion of this subject Today the base of the country economic development and trade is depending upon banking and credit structure of economy. The financial structure is the foundation of credit and capital market of the economy. Which solely depend upon the banking business in the country. The basic foundation at any bank is its deposit patterns and Advances come from the deposits which the public keeps in the bank always in a particular ratio and proportion, no bank can grant loan more than its deposit structure. The some technique of loan and Advances in applied all over the word.Cash CreditOver DraftLoan System Short Term Loan Medium Term LoanLong Term LoanComposite LoanConsumer Loan/ Consumption Loan Service Provided By Bank-Loan DistributionDepositIssue Demand DraftSaving AccountCurrent Account

2LETERETURE REVIWE Credit analysis Credit standard are the criteria which a firm follows in selecting customer for the purpose of credit extension . Credit standards influence the quality of the firms customers there are two aspects of the quality of customers 1) the time taken by customer to repay credit obligation 2) the default rate. The average collection period determine the speed of payment by customerFinancial managementI.M Pandey Credit scoring One way in which both individual and firm are often evaluated as a credit risk is the through the use of credit scoring. Credit scoring involved numerical evaluation of each applicant and applicant receives a score based on his or her answer to a simple set of questionsFinancial management Keown, martin,petty.scott, jr .

BANK PROFILE

Shri bhausaheb thorat amrutvahini sah. bank ltd.NAME OF BANK:-shri bhausaheb thorat amrutvahini sah. bank ltd. ghulewadi,sangamner. RAGISTAR NO :- Anr/Smr/Bnk/1207-83 ESTABLISHMENT IN :- 28th July 1983. ADDRESS:- A/P ghulewadi tal. sangamner , dist a. Ahmednager. MANAGER:- Laxman S. WaghNUMBER OF MEMBERS:-5659MERCHANT BANK:- NAME OF BANK:- The sangamner merchant Co-operative LTD.ADDRESS:-Indira Gandhi marg p.b no.13, sangamner, dis- Ahmednager.RAGISTAR NO:- 26/11/1965,ANR/BNK-107 Date & No of R.B.I. license :18/08/1986 U.B.D. MH 500P. ESTABLISHMENT IN: - 26/11/1965.MANAGER:-Ravindra joshi

RESEARCH METHODOLOGY

MEANING OF RESEARCH Research as a process involves defining redefining problem hypothesis, formulation, and organizing, and evaluating data, deriving, inference and conclusion after careful tested.

COLLECTION DATA Data means facts. Data are those things from which conclusion may be drawn in the form of figures or in words Collection of data is essential part of research. The task of data collection start after the objective of the study and research design had been decided in red to measure properties. I collected secondary research data A) PRIMARY DATA Observation Method Questionnaire & Interviews Library MethodsB) SECONDARY DATA In this project secondary data are use through a) Books b) Internet c) Record available at bank.

OBJECTIVE OF STUDYTo study Concept of Credit appraisal?To know what are the documents required for different types of loans? To know the process of credit appraisal.To study the NPA of shri bhausheb thorat amrutvahini bank & The sangamner merchant co-op Ltd, sangamner

THEOROTICAL BACKGROUNDCREDIT APPRAISALCredit appraisal means an investigation/assessment done by the bank prior before providing any loans & advances/project finance & also checks the commercial, financial & technical viability of the project proposed. Proper evaluation of the customer is preferred which measures the financial condition & ability to repay back the loan in futureCredit appraisal is the process of appraising the credit worthiness of the loan applicanDOCUMENTATION DETAILS1) Proof of income Salaried Latest salary slips for the last 2 months. Self-employed2.) Residence ProofTelephone / Electricity bill. Ration cardDriving LicensePassportRent agreement3.) Identity ProofPassport size photographCopy of Driving License / Company identity card/ PAN card clearly showing Photo of customer. post dated cheques

CREDIT APPRAISAL PROCESSReceipt of application from applicant|Receipt of documents(Balance sheet, KYC papers, Different govt. registration no., MOA, AOA, and Properties documents)|Pre-sanction visit by bank officers|Check for RBI defaulters list, willful defaulters list|Title clearance reports of the properties to be obtained from advocates|Valuation reports of the properties to be obtained from valuer/engineers|Preparation of financial data|Proposal preparation|Assessment of proposal|Sanction/approval of proposal by appropriate sanctioning authority|Documentations, agreements, mortgages|Disbursement of loan|Post sanction activities such as receiving stock statements, review of accounts, renew of accounts, etc (on regular basis)

DATA ANALYSISPARTICULER (YEAR 2014)MERCHANT CO-OP BANK ( Rs in lac)AMRUTVAHINI CO-OP BANK (Rs in lac)DEPOSITS22315.4916991.887LOAN14396.499578.63NPA0.00% 4.64%PROFIT125.7845.63 FINDINGCredit appraisal is the process of knowing credit worthiness of customerMerchant bank having maximum deposit & loan as compare to amrutvahini bank its indicate merchant bank effectively used deposit and give loan to Customer. Deposit and loan of merchant bank increase year by year its reflect that bank expand the business effectively. And people having good trust and paid high interest to the depositor.The NPA of bank is decrease year by year. Bank work on maintain low NPA and its work on recover the outstandingThe NPA of amrutvahini bank is higher than merchant bank its shows the credit appraisal of amrutvahini bank is not much better and they cannot recover overdue Because of high NPA amrutvahini bank doing more provision for NPA and its reduce the profitability of bank Conclusion With a view to move towards international best practice and ensure greater transparency, it has been decided to adopt the 90 days overdue norm for identification of NPAs, from the year ending March 31, 2004. 1.) Credit appraisal is the internal bank process which is necessary to conduct for every bank for loan distribution. 2.) RBI has put the compulsion on every bank to do credit appraisal for avoid NPA of a bank. 3.) Credit appraisal is the process of measure credit worthiness of borrower and NPA is a scale to measure the durability and creditability as well as goodwill of a bank. 4.) we can understand the banks position by looking at its graph such as profit, advances, Recovery, Deposits. 5.) Its important to amrutvahini bank to understand various steps taken by the merchant bank to manage the NPA level, knowledge about RBI norms for NPA.6.) if and accounts becomes NPA what are the various measures for recovery taken by the merchant bank.Suggestion1) Positive attitude should be developed by the operation staff to attract more customers.2) Minimum documents to be asked for sanction. Amrutvahini bank can follow the credit appraisal process of merchant bank3) Frequent training to the staff should be imparted to update the knowledge and get feedback from borrower4) The amrutvahini Bank should try to maintain low NPA so its help for generate more profits to satisfy the equity share holders5) The bank should try to increase the market value of shares through efficiency & effectiveness.6) Keep maintain low NPA rate as per direction of reserve bank of India. And follow all rules and guideline as per RBI

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