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Transcript of Introduction Banking in India
Deposits and Advances at ALLAHABAD Bank, Tumkur
Chapter Scheme :
Chapter Scheme of the project report is classified as below:
Chapter - 1 : Introduction of bank & banking.
Chapter - 2 : Gives a brief introduction about commercial banking in India, its
functions & about the recent developments.
Chapter - 3: Gives a brief history on origin & growth of Allahabad Bank in
National level.
Chapter -4 : Is about the origin of the study i.e., Methodology of Research.
Chapter - 5: Gives a profile of Allahabad bank, Tumkur Branch.
Chapter – 6: Deals with the theoretical back ground & analysis of the different
type of deposits & advances.
Chapter- 7: Exhibits analysis & interpretation of the data collected for the
Study.
Chapter- 8: Deals with the findings, suggestions & conclusions.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
CHATER 1INTRUDUCTION
The project is entitled “A Study on Deposits and Advances “ is done at the Allahabad Bank, Tumkur, Karnataka State.
Business! Business! Business as bee is busy in collecting honny likewise every man in this world is very busy in the business to earn money. The world is full of compition. In this heavy compition man has to struggle for his existence through one way or the other. In those most of the challenging natured people select business field because it is having its own importance in our society.
To commence Business businessmen requires capital for such capital he may invest his own fund or he may get it frinds or he has to raise loan from Banks. So banks are acting its vital role though providing loans and advances and accepting doposits.
There was certain section of people who were not prepared to invest their money in business. They also afired of theft to keep surplus money in their house. So keep their money in banks as deposits , which provides some amount of interest and also provides security for their money.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
MEANING OF THE WORD BANK AND BANKING
Bank
The word bank is derived from the Italian word “BANIO” and the latin word “BANCUS” AND THE French word “BANQUE” which means a “BENCH”. A bank is a financial institute which deals with a money and credit. It accepts from the people and destributes loans to needy people.
Banking
The regulation act of 1949 section 5(b) defines banking as “accepting for the purpose of lending or invesment of deposits from the public repayable on demand or oterwise and with drawable by cheques, drafts, orders”.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
CHAPTER-2INDUSTRIAL PROFILE
Introduction
Banking system occupies an important place in a nation's economy. Bank
is an indispensable institution in a modern society and forms the core of the
money market of the advances countries.
The Indian Money Market, however is characterized by the existence of
both the unorganized and the organized credit agencies. Which meet the credit
needs of the various sectors of the company.
The money lenders and indigenous banker constitute the unorganized
money market. The organized sector of the money market consist of the
Reserve Bank Commercial & Co - operative Banks.
The organized and unorganized sector of the money market are the
completely isolated form each other there are certain points of contract between
them. With the extension of banking facilities by the Commercial & co -
operative banks in the countryside. Credit needs of various Sectors of the
economy are know being increasingly met by institutional agencies.
In the organized money market commercial banks have acquired a
significant place as a result of their growth in terms of branch network of
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Deposits & Advances. However, the commercial banking system has been till
recently mainly Urban oriented.
Commercial Banking in the public sector
A significant feature of the present day commercial banking in India is the co-
existence of both the private sector & the state or public sector in banking the
growth of the public sector in banking. The banking took place in two stages.
First in 1995 when the Imperial Bank of India was converted into the State
Bank of India and subsequently banks wear made subsidiary bank of State bank
Second stage was the Nationalization of 14 major commercial banks on 19th
July 1969.
The banks that were nationalized are as follows :
1 The Central Bank of India
2 The Bank of Indian
3 The Punjab NationalBank.
4
.
The Bank of Baroda
5 The United Commercial Bank
6 Canara Bank
7 United Bank of India
8 Dena Bank
9 Syndicate Bank
10. The Union Bank of India.
11. Allahabad Bank
12. The Indian Bank
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13. The Bank of Maharastra
14. The Indian Overseas Bank
The banks , which were nationalized in 1980, are as follows :
1. Andhra Bank
2. Corporation Bank.
3. New Bank of India.
4. Oriental Bank of Commerce.
5. Punjab & Sind Bank. .
6. VijayaBank.
These twenty banks constitute the strong public sector in India banking system.
The structure of Indian Commercial Banks
The outstanding landmark in the history of Indian Commercial Banking
the enactment of legislation in 1949 called the banking regulation act. The
legislation was enacted with a view to restructure commercial banks in India.
For the first time the act introduced the licensing system for banking
business. It had laid down rules & regulations for the opening of banks then
branches &minimum capital required for opening a bank etc. The banking
regulation act is considered as a well though out and compensate price of
legislation designed to safeguard the interest of depositors & the development
of banking industry on a systematic line.
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The Indian commercial Banks were classified into two types at the time
of independence. They were scheduled banks and non- scheduled banks. As in
1950 there were 430 commercial banks in India. By 1969 the number of
commercial banks was reduced to 85 by means of mergers & amalgamations.
Owning to liberal policy followed by the government for the setting up regional
rural banks. The number of Indian commercial banks increased to 273 on march
1990.
Scheduled Banks
According to section 42(6) commercial banks are classified into two
categories :
1. scheduled banks.
2. non-scheduled banks.
This classification was introduced as early as 1935 with the object to
establish relationship between the commercial banks and the reserve banks. At
the time of establishment of the RBI in 1953 there were a large number of
commercial banks big & small with varying degrees of financial & economic
soundness.
The act empowered the reserve bank to include only those banks in the
second schedule to the act which fulfilled the prescribed conditions . A
"scheduled bank " means a bank included in the second to the RBI act of 1934.
The reserve bank is empowered to include in the schedule a bank which carries
on business of banking in India & which satisfies the following conditions laid
down in section 42(6).
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1.. It must have a paid-up capital & reserves of an aggregate
value of not less than Rs.5,00,000.
2. It must satisfy the reserve bank that its affairs are not being conducted in
a manner detrimental to the interests of its depositors.
3. It must be:-
a. A state co -operative bank, or
b. A company as defined in the companies act of 1956 or
c. An institution notified by the central government in this behalf or
d. Co -operation or a company incorporated by or under any
With the enforcement of Banking Laws (application to co-operative societies)
Act of 1965. The state co-operative banks have also been made eligible for
inclusion in the second schedule with effect from 1st March 1966.
The scheduled banks are thus divided into :
1. Scheduled Commercial Banks, including
a) Indian Scheduled Commercial Banks
b) Foreign Scheduled Commercial Banks
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Deposits and Advances at ALLAHABAD Bank, Tumkur
2. Scheduled State Co-operative Banks
The "ALLAHABAD BANK" is a Scheduled Commercial Banks.
Functions of Modern Commercial Banks
A. Accepting deposits from the public :-
Accepting various types of deposits is an important function of the commercial
bank those who have cash balances went to keep them in safe place i.e., deposit
the same in bank. They as well as provide a convenient method of transferring
funds through cheques.
The bank accepts 4 types of deposits :
a) Fixed deposits.
b) Current deposits.
c) Savings deposits.
d) Cumulative or Recurring deposits.
A fixed deposit is one where a customer keeps a certain amount of money in a
bank for specific period. It carries higher rates of interest than that allowed to
savings deposits. Longer the period higher the interest rates &Vice versa.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
B. Making deposits, loans and advances :-
Bank receives deposits with a view to lend. It is one of the most
important functions of banks. Direct loans & advances are given to all types of
persons against the security of moveable properties. The different types of the
loans given by the banks are as follows :
1. Direct loans.
2. Cash credits.
3. Bills discounted.
4. Over drafts.
Apart from these two major functions commercial banks perform other useful
functions to society.
C. Agency services :-
Customers can arrange for divided to be sent to their banks & paid into
their accounts.
Orders for the purchase or sale of stock exchange securities are executed
through the banks.
Banks will make applications on behalf of their customers for all
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Deposits and Advances at ALLAHABAD Bank, Tumkur
allotment arising from new capital issues.
Pay calls as they of all due.
Obtain the share certificates or documents of title.
On certain agreed terms the banks will allow their hands to appear approved
prospectors or other documents as bankers for the issue of new capital.
Banks undertake payment of
Subscriptions.
Insurance Premiums
Rent etc.
On behalf of customer the banks will collecting cheques, bills, salaries,
pensions, dividends, interests, etc. belonging to customers are credited to the
respective accounts of the customers.
It also act as respective of customers to other banks and financial
corporations.
They aim to provide a complete change of trustee executer or advisor services
for small change.
Most banks will undertake on behalf of their customers the preparation of
income tax return claims for recovery of overpaid tax.
D. General utility services :-
It includes the issue of credit instruments like letter of credit & traveler's
cheque.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
The acceptance of bills of exchange.
The safe custody of valuable and documents.
The transactions of foreign exchange business.
Acting as a reference as to respectability & financial standing of customer
& providing specialized advisory services to customers.
E. Overseas Trading services :-
Recognition of overseas trade has led modern banks to setup branches
specializing in the finance of foreign trade & some banks in some
countries have taken interest in export houses factoring organizations.
Banks provide means for settlement of debts between traders both at
home & abroad for the goods they buy & sell.
They provide credit & enable the company to release the capital. Which
would otherwise be tied up in the goods exported.
F. Information and other services :-
Some banks produce regular bulletins on trade & economic conditions at
home & abroad & special reports on commodities markets.
Advise on appointments of suitable agents.
For businessmen traveling abroad letters of introduction.
On request banks obtain for customer for business purposes, confidential
opinions on the financial standing of companies.
Savings deposits are those deposits on which the bank pays a certain rate
of interest to the depositors subject to certain conditions. A person can open the
account with a small amount and go on depositing any amount. The customers
are expected to maintain a minimum balance in the account.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
There are certain restriction with regarding to withdrawals. The banks fix
the minimum number of withdrawals in a year. Withdrawals can be made either
by withdrawals slips or cheques have to maintain a balance at higher amounts
savings accounts are intended to those who have small incomes.
Current deposits are those deposits which can be withdrawn at any time
by means of cheques. The bank does not pay interest on current account
deposits. A customer must maintain a minimum balance. The current account
holders have to pay service changes for operating the account.
There are no restrictions on withdrawals. Generally traders & business
man keep their money in their account. They can draw over & above their
account balance, this is called over draft.
CHAPTER-3BANK PROFILE
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Deposits and Advances at ALLAHABAD Bank, Tumkur
The Allahabad bank opened its branch in Tumkur on 26-11-1976. This branch is rendering its services since from 42 years. Even though it had so ups and downs, it has risen to great hights to set itself up as a model for other to follow.
Objective
The main objective of this bank is to provide the deposites and advances for agriculture devolopment for other priority sectors. This branch offce is situated in J.C. Road, Tumkur. The area of operation of the bank shall be confined to the entire Tumkur destrict.
Business Hours
Bank shall kept opened
Monday to Friday 10.30 am to 5.30 pmSaturday 10.30 am to 12.30 pm
Cash transaction HoursMonday to Friday 10.30 am to 2.30 pm
The bank has followed the rules and regulations of RBI. And its acts according to directions given by the HO/CO and RBI.
Organization Chart
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Deposits and Advances at ALLAHABAD Bank, Tumkur
The organizational structure of Allahabad bank is as followsThe total staff of this branch is 8
Senior Branch Manager
Managers
Assistant Managers
Cashiers
Clerks
Attenders
Head Office of Allahabad Bank in Calcutta
Head office : 2 , N.S. Road Calcutta - 700001.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Authority : Sri Bijan ray, General Manager[p.a] central public officer.
Phone : 03322420867 Tele fax 2210-7424.
E-mail : gmpa @ Allahabad bank .co.in
Branch Office of Allahabad Bank in Banglore
Head office : Ganesh Complex 2nd floor, 13/8 Subedar Chattram Road
Banglore - 56007.
Authority : V. V. Thodge, Assistant General Manager.
Phone : 080-22207369
E-mail : [email protected].
Branch Office of Allahabad Bank in Tumkur.
Head office : J.C. Road Tumkur
Authority : K.S.S Murthy.
Phone : 0816-2278147
E-mail : www.allahabadbank.com
BRIEF HISTORY OF ALLAHABAD BANK
Allahabad Bank is the oldest public sector bank in India.lt was setup in
1865 by a group of Europeans with a seed capital of Rs 2,00,000 By the end of
19th century, the bank had branches at Jhanasi, Kanpur, Lucknow, Bareilly,
Nainital, Calcutta & Delhi.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
In 1920, Allahabad bank was taken over by P&O Banking Corporation &
its Head office was shifted to Kolkata in 1923 for business considerations &
operational convenience. In 1927, the bank went into the fold of Chartered Bank
that acquired the controlling interest in the P&O Banking Corporation.
On July 19,1969, Allahabad Bank was nationalized along with 13 other
major commercial banks. At the time of nationalization, the bank had a network
of 151 branches, deposits of Rs 114 crores & advances of Rs 82 crores to its
credit. On April 3, 1982, Allahabad bank opened its 1000th branch.
In 1989, Allahabad bank ventured into the credit card business by
launching its credit card -the BOBCARD - Allahabad bank, with bank of
Baroda. The bank, in 1992-93, entered into a Memorandum of Understanding
with bank of India to launch India card, replacing BOBCARD.
Allahabad bank became the first nationalized bank in Eastern India to
Became a depository participant of National Securities Depository Limited
(NSDL) to offer de-mat & related services & initiated "Flexi-fix Deposit
Scheme" to mobilize resources. The bank also introduced "Kisan Card" to
facilitate agriculture related activites as well as to meet the domestic
requirements of farmers.
As on September 7. 2004, Allahabad bank had 1934 branches. The
branches include 32 specialized branches (i.e. 4 Industrial Finance Branches, 6
SSI Finance Branches, 1 NRI Branch, 1 Industrial Finance-cum-International
Branch, 2 Specialized Personal Banking Branch, 1 Specialized Savings Bank
Branch, 3 Quick Collection Service Branch & 2 Trading Finance Branch)
besides 16 Service Branches.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
The Bank made a foray into merchant banking activity in 1984 &
subsequently transferred the merchant banking actives to All Bank Finance
Limited, a wholly owned subsidiary, in 1991. In October 1989, United
Industrial Bank Limited was amalgamated into Allahabad bank.
PROFITABILITY ON SUSTAINED GROWTH PATH
(Amount in Rs. Crores)
For the yearGrowth
2008-09 2009-10
Net profit 706.13 750.14 30.33% Opening Profit 1024.15 1099.91 28.98%
Net profit of the bank increased to Rs. 706.13 crores during the period under
review from Rs.541.80 crores during the corresponding period last year,
registering a growth of 30.33%.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
EXPANDING BUSINESS GROWTH:
(Amount in Rs. crores)
Parameters31/3/0
431.3/05
31.3/06
Variation
2008-09 2009-10
Amt. % Amt. %
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Deposits and Advances at ALLAHABAD Bank, Tumkur
1) Total Business
47865 62914 78561 15647 24.87% 15049 31.44%
2) Total Deposits
31477 40762 48500 7738 18.98% 9285 29.50%
3) Gross Advances
16388 22152 30061 7909 35.70% 5764 35.17%
4) Non-Food Credit
15566 21216 28940 7724 36.40% 5650 36.30%
5)Investments (Gross)
15600 19129 18316 -812 -4.25% 3529 ' 22.62%
The Bank’s total business registered a growth of 24.87% during 2005-06
as against 31.44% during 2004-05. The Business of the Bank has increased to
Rs.78561 crores as on March-end 2005 from Rs.62914 crores as on March-end
2005.
Deposits grew by 18.98% during 2005-06 as compared to 29.50% in the
corresponding period last year. Lower growth of deposits during
2005-06 was mainly due to decline of high cost term deposits. The low-
cost deposits of the Bank increased by 20.78% during 2005-06 as against
19.58% during 2004-05.
Gross Advances grew by 35.70% against the growth of 35.17% during
the period under review.
As on 31.3.2006, aggregate deposits of the Bank increased by Rs.7706
crores or 19.22% as against the growth of Rs.9132 crores or 29.50% in the
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Deposits and Advances at ALLAHABAD Bank, Tumkur
corresponding period last year. The market share of aggregate deposits of the
Bank increased to 2.29% as on 31.3.2006 from 2.25% as on 26.3.2005. The
Market share of Credit increased to 2.02% from 1.92% during this period.
EXPANDING BUSINESS GROWTH.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
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Deposits and Advances at ALLAHABAD Bank, Tumkur
EVENTS HIGHLIGHTS
A. Resources Mobilization-Basketful of benefits to customers
Twelve Hour Banking Services (8 AM to 8 PM) introduced in 33 selected
branches. More branches going to offer extended hour banking.
In line with RBI Policy Statement, No-frill SB Account opens new vista in
banking offering scope for SBA/c with initial deposit of Rs.5/-
Special Thrust on Current Deposit Mobilization Introducing CURRENT
PLUS deposit scheme offering customers benefit of Fixed Deposit in Current
Account - added to this, the Current Deposit has add-on facilities like free
remittance, free ATM Card, free Cheque Book and waivement of locker rent.
Besides, the Bank has also introduced Premium Current A/c with multi
facilities.
Special type SB Accounts Introducing special types of SB Deposit
Account Mahila Sanchay for ladies (with Re.l/-), Premium SB, Vikash SB A/c
for Local bodies/State Govt. Agencies, Scholarship to brilliant wards of SB
Depositors in rural areas.
High return Term Deposit Account Always offering competitive interest
rates in term deposit with 1% more for senior citizens - present highest rate
offered is 7.25% per annum for deposits of 36 months & above.
B. DEPLOYMENT
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Credit policies and introducing New Lending schemes
Schemes for channel financing to meet the both legs of corporate
financing - purchase and sale Special Economic Zone (Mart) financing scheme
for firms and companies which intend to start their export/import business in
Special Economic Zones (SEZ).
Lending Schemes for rural India
To provide urban amenities in rural area (PURA), Bank introduced
various lending schemes for basic infrastructure in village clusters like Rural
Telephony and rural kiosks, Rural Health Care, Development of rural Tourism
and rural Educational and Vocational Training Institutes.
Implementing 'Tenant Farmers' Financing Scheme' for tenant fanners
toiling in others land on oral tenancy basis, giving this neglected sector new
hope of life. On 142nd Foundation Day, Bank introduced two novel schemes
-Mahila Shakti Yojana for empowerment of women folk and General Credit
Card Scheme extending personal loan to rural people.
Extending Credit to SME Sector
In line with the directives of the Govt, of India, Bank is extending loan to SME
Sector on borrower-friendly terms. Bank's exposure to SME sector is over
Rs.2700 crores which is about 10% of net bank credit.
Retail Lending
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Bank has given more thrust to capture larger market share of retail banking and
ensures smooth delivery channels through 241 Retail Banking Boutiques
manned by specialized officials.
ALL Bank Finance Ltd
All Bank Finance Ltd, a wholly owned subsidiary of the Bank, have been
registered with the SEBI as a Category I merchant bankers and underwriters.
The company earned an operating profit of Rs.2.40 crores for the year 2005-06
as against Rs.2.16 crores during the last year.
The subsidiary offers a host of emerging opportunities which are as under:
o Investment Banking
o Insurance Broking
o Stock Broking
o Wealth Management and Portfolio Advisory
o Underwriting
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Deposits and Advances at ALLAHABAD Bank, Tumkur
LOOKING AHEAD - PROSPECT OF A BRIGHTER
FUTURE
Fully equipped to face the emerging challenges before us:
Automation:
Bank has made strategic plan for extensive mechanization of operations
by the year 2006-07. Some of the steps envisaged are :
a) Centralized Banking Solutions (CBS) in 900 Branches. Computerization of
100% business by June, 2006
b) 250 more ATMs, 50 Cash Dispensers will be installed
c) Installation of 50 number touch screen kiosks to provide rural/semi-urban
customers various information reguarding their accounts.
Overseas Appearance:
Bank is slated to go international early part of 2006-07 with
a)Branch at Hong Kong
b) A representative office at Shenghen, China
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ANNUAL BUDGET FOR THE YEAR 2007-08, 2008-09,
2009-10 [MARCH]
SI No. particulars 2007 2008 2009 2010
1 Capital 346.70 346.70 346.70 446.70
2 Reserves 823.59 1205.23 1980.95 3191.83
3 Deposits 25463.38 31476.60 40762.07 48499.69
4 Advances 12543.60 15341.54 21150.82 29147.78
5 Investment
(gross)
12476.04 15600.09 19128.87 18315.67
6 Working
Capital
28050.92 34704.28 45144.93 55291.99
Total 79704.23 98674.44 128514.4 154893.66
ANNUAL BUDGET FROM 2007 TO 2010
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Deposits and Advances at ALLAHABAD Bank, Tumkur
2007-08, 2008-09 [MARCH] IN A PERCENTAGE
GROWTH
SI No. particulars 2007 2008 2009 20010
1 Deposits 12.34% 23.62% 29.50% 18.98%
2 Advances 19.30% 21.51% 35.17% 35.71%
3 Investment
(gross)
13.81% 25.04% 22.62% -4.25%
4 Working Capital 13.27% 23.72% 30.08% 22.48%
ANNUAL BUDGET FOR THE YEAR IN A PERCENATAGE
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Deposits and Advances at ALLAHABAD Bank, Tumkur
INTREST PAID ON FOR THE YEAR 2007-08, 2008-09,
2009-10
SI No. Particulars 2007 2008 2009 2010
1 Deposits 1614.90 1540.80 1767.44 2115.54
2 Burrowings 45.66 42.11 54.12 74.25
Total 1660.56 1582.91 1821.56 2189.79
INTREST PAID ON FOR THE YEAR
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Deposits and Advances at ALLAHABAD Bank, Tumkur
INTREST EARNED FOR THE YEAR 2007-08, 2008-09,
2009-10,
SI No. particulars 2007 2008 2009 2010
1 Investment 187.75 1302.24 1462.10 1488.42
2 Advances 211.90 1322.72 1682.58 2191.39
Total 2399.65 2624.96 3144.68 3678.81
INTEREST EARNED
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Deposits and Advances at ALLAHABAD Bank, Tumkur
BRANCH NETWORK
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Deposits and Advances at ALLAHABAD Bank, Tumkur
CHAPTER-4RESEARCH DESIGN
TITLE:“Study on Deposits and Advances at Allahabad Bank Ltd”
STATEMENT OF THE PROBLEM
The focus is to study the Study on Deposites and Advances at Allahabad bank
Ltd both passive and negative on various aspects like impact on financial
performance feasibility of the credit risk management of the bank and their
outlook towards credit delivery which has changed due to the existence of high
deposits
.
Objectives of the study:
o To know the growth &development of the commercial banks in
India.
o To know the growth &development of Allahabad Bank in National
level.
o To analyze the various types of deposits & advances provide to the
o customers by the Allahabad bank, Tumkur Branch.
o To study the perception of the customers above the bank.
o To study the problems in respect of deposits & advances.
o To offer pragmatic suggestions for improvement of the bank.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Scope of the study :
The area of the study is limited to the deposits & advances provided by the
Allahabad bank, Tumkur it covers only customers of that bank.
The study also helps in understanding what parameters to be considered
while providing lending facilities.
In all, a study is made to ascertain its impact on the liquidity, profit, cost of
funds working capital and the overall networth of the company.
Also focus as been made in the path of progress thus contributing to for the
sustained economic growth.
In this regard, a special reference is made to the “ALLAHABAD BANK”
Source of data collection having determined the purpose and scope if
statistically enquiry or investor have to determine the best method of collecting
the data. The sources of data collection are classified on the basis of the nature
of data into two groups
-primary data
-secondary data
Primary data
Primary data are those data which are originally collected for the first time
for a specific purpose by an investor. They are collected direct by from the
people to whom the enquiry is related they are primary to the institution which
contact them for information they are secondary to all other institution which
report data. This is a first hand information has been collected through personal
contacts with managers of the bank.
Secondary data
secondary data was collected from bank journals, news papers, internet,
reference from book of lending. Future move information relating to important
definition and common meaning banks are collected from reputed books.
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Research methadology
The research methodology gives the information relating to where & how I
collected the data to achieve the objective of the study. And gives clear picture
of the entire design structure & plan of the study.
Statement of the problem & need for the study
The Indian Banking Sectors are playing a vital role in the development of
priority sectors by providing a various type of deposits & advances to them. The
Allahabad Bank existed with the main intention for to help priority Sectors.
By this research study in Allahabad Bank, Tumkur. I make an attempt to
identify the defects in the operations of the bank & suggestions for to take
remedial measures.
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Limitations of the study :
Due to the time constraints it is not possible for me to carry out extensive
research work.
Since this project study understand the process of borrowing the loans
and advances the study is made with the student angle and not with the
audit angle.
The study is limited to only main kinds of depodites and advances.
The time provided for the study was limited.
Operational definitions :
The operational terms used in this report has is own meaning. They are as
follows
Bank - Here the bank means Allahabad bank. Tumkur.
Government - Stands for either state government or central government.
Mn - Million.
Avg - Average.
BR Act - Banking Regulation Act.
Branch – means Allahabad Bank Tumkur
Respondent depositors - means the selected depositors who gave response
for the questionnaire.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
THEORETICAL BACKGROUND
Deposits:
Meaning & Introduction :-
The deposits accepted by a banker form the public has a relationship between a
banker & a customer begins with the opening of a deposits accounts by the
customer with the bank. A bank has dis-creation to allow a person to open or
not to open a deposit account & his discreation cannot be questioned. Thus, the
deposits are useful to the running the bank fruitful & we get some interest every
year for which the deposits we kept in a bank.
Types of deposits accounts :-
The deposits accepted by a banker from the public may be classified in to 2
broad categories.
a) Demand liabilities or demand deposits.
b) Time liabilities or time deposits.
Demand deposits are the deposits repayable on demand. They include deposits
recived on current accounts & savings bank accounts.
Time deposits are deposits repayable on the expiry of a fixed period of time &
deposits repayable after the expiry of a certain period of notice of withdrawal
given to the banker. They include fixed deposits accounts & recurring deposits
accounts.
Savings Bank Accounts :-
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Deposits and Advances at ALLAHABAD Bank, Tumkur
In the presidency towns of India. There were a few specialized banking
institution called " Trustee Savings Banks", to accept saving deposits & to
encourage the habit of savings among the people.
After the abolition of the trustee savings banks the "Post Offices" came into an
existence to accepts savings deposits from the low income group.
Later the "Commercial Bank" also opened savings accounts section & started
accepting saving deposits. Today, savings bank accounts have become very
popular with the commercial banks as well as with the depositors.
General features of savings bank accounts :
Savings bank accounts are meant for middle & low income groups who can
deposits only small sums & accounts can be opened with just Rs. 5 with a
minimum balance of Rs. 100 & 1000 this accounts can be operated by cheques .
Incidencial charges will be charged if minimum balance is not their maintained.
In a savings bank accounts , a customer can deposit any amount of money &
any on of times he can withdrawals from this account. Today in India, 150
withdrawals in a year are allowed by most of the banks further total amount of
withdrawals that can be made any day also restricted.
As a savings bank accounts is opened by a customer with a view to earning
interest on his deposits. Today interest at rate of 4.5 per annum is allowed by
every bank on the savings bank deposit interest is allowed Rs
10 lying with bank between 10l & last day of every month &it is credited to
customer account half yearly.
Insurances-linked Savings Bank Accounts :
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Deposits and Advances at ALLAHABAD Bank, Tumkur
In order to mobilize more savings bank deposits it is better to have a some idea
about "Insurance Linked Savings Bank Accounts". In recent time,
commercial banks in the private as well as public sector have introduced this
offer of the additional benefit for the life insurance cover along with the usual
benefits of a savings bank account.
Genaral Features :
This scheme has been introduced under the arrangements with the life insurance
corporation of India & insurance benefit attached to the Insurance Linked
Savings Bank Accounts is free service as the required insurance premium is
paid by the bank & not by the account holder.
There is no medical examination of the account holder. Under this scheme the
account holder has to maintain a minimum balance of Rs 500 [if the branch of
the bank is in a rural area] or Rs 1000 [if the branch of the bank is in a urban
area]
In case the depositor or a account holder dies, nominees will be the following
amount of insurance benefit. Double the average balances in the depositor's
account eligible for interest subject the maximum of Rs 10,000 if the account
holder is between 18 & 21 years of age. depositor's account eligible for interest
subject the maximum of Rs 5000 if the account holder is between 41 & 49 years
of age.
Insurance covered is provided on yearly renewal basis.The depositor will get
interest on his deposits as usual.
All bank Overdraft facility in Savings Bank :
Advanced Management College, Banglore Page 38
Deposits and Advances at ALLAHABAD Bank, Tumkur
1) 0/D facility in savings bank accounts is available to all employees of our
Corporate clients / Institutions / Organizations for meeting their exigencies &
whose salaries is distributed through S/B A/c's.
2) O/D is allowed up to Rs 10,000 or 1 month net salary, which is less
3) No margin stipulation & no moratorium period. Documentation in a booklet
form.
4) Loan to be adjusted at least once in a month by the amount of salary To be
credited to the A/c .
5) Rate of interest: PLR i.e., 11.5% p.a.
6) No processing fee. Security :
Security
Undertaking from employer to credit monthly salary.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Current Bank Accounts :-
Current accounts form the most important type of bank accounts in practice
there cannot be any commercial bank without current, accounts.
Genaral Features :
Current accounts are intended for commercial & industrial undertakings, public
bodies etc which have numerous & frequent banking transactions & it opened
by a customer for the convenience of making payments by cheques.
Current accounts is generally, opened with a minimum deposit Rs 2000 or 3000
as per the decision of the Indian Banks Association]. A current accounts is an
active or a running a/c which is in operation continuously. As such a customer
can deposits into a current account any amount of money & any number of
times similarly he can withdraw from the current a/c any amount as he likes as
long as there are sufficient funds to his credit.
Deposit into current accounts are made by filling in the pay-in-slips &
withdrawals from this a/c are made by cheques & as per the recent directives of
the reserve bank the applicant is required to submit 2 photograph copies &
signature.
Again, not only no interest is allowed on current deposits but also incidential
charges are levied by a bank on an un remunerative current account for the work
& expenses involved in its maintance.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Fixed Bank Accounts :-
Fixed amount of money is deposited by the customer for a fixed period of time
or fixed rate of interest is called fixed deposit accounts. They are called time
deposits or time liabilities in England as their withdrawals arc subject to the
services of a period of notice. In India they arc known as term deposits.
Genaral Features:
Fixed deposit accounts are intended for small investors who prefer to invest
their money on safe bank deposits rather than on risky industrial securities
with a view to earning high & steady interest on their deposits.
A fixed deposit account can be opened with a minimum deposit of Rs 50
the period of deposits generally varies from 3 months to 10 years.
As a fixed deposit is left with the banker for affixed period. It can be
withdrawn only after the expiry of specific period by returning the fixed
deposit receipt given by the bank at the time of depositing money. The rate
of interest offered on a fixed deposit varies from 6% to 13% depending
upon the period of deposits.
As per 269T of the IT Act 1961. As amendment by Direct Tax LawsAct 1987.
repayment of money from a fixed deposit should be made by crediting the
amount plus the accured interest to the customer's current A/c or savings bank
A/c. if there is no current A/c or savings bank A/c by an account payee cheques
or draft if amount involves is more than 20,000.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Fixed Deposit Receipt
When a fixed deposit is accepted by a banker he gives the depositor a receipt
called the "Fixed Deposit Receipt".
Genaral Functions:
It serves as an acknowledgement of the receipt of the deposit by the banker
from the customer.
It lays down the terms of the contract between the banker & the depositor [i.e.,
the rules governing the fixed deposit].
It serves as the means through which the repayment of the fixed deposit can be
obtained by the depositor . Normally, the repayment of the fixed deposit can be
obtained by the depositor only on the production of the fixed deposit receipt
duly discharged. However, if the deposit receipt is lost, the depositor can obtain
the repayment of the deposit by giving an indemnity bond to the banker.
It can also serve as a security for raising a loan from the bank.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Recurring Deposit Accounts or Cumulative Deposit Accounts :
Recurring deposit accounts are variants of & innovations over the savings bank
accounts. In short they are intended to encourage the habit of savings deposits
they have become very popular in recent years.
Genaral Features:
9 Recurring deposit accounts are meant for people who have regular monthly
incomes & are intended to encourage the habit of savings among the depositors
on a regular basis.
O The depositor deposits a fixed sum of money every month for an agreed
period & at the end of the specified period. He gets back the amount deposited
together with the interest accrued there on.
# The rate of interest offered by the banker on the recurring deposits is almost
equal to that allowed on the fixed deposits generally, it varies from 6% to 13%.
# A recurring deposit account can be transferred from one branch to another
branch of the bank without payment of any change for the transfer.
Paying-in-slip Book or Pay-in-slip Book:
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Deposits and Advances at ALLAHABAD Bank, Tumkur
A paying-in-slip book is a book which contains printed slips called pay-in-
slips . The paying-in-slips have counterfoils. The paying-in-slip book is
supplied by the bank to the customer.
Cheque Book :
Money deposited in a current account is withdrawal by cheques . It is a book
which contains 10 to 20 blank cheques with counterfoils. The cheque forms are
serially numbered the serial numbers of the cheque forms issued to a customer
are noted down in the cheque book register as well as on the ledger folio of the
customer's account so a to prevent the use of cheque forms issued to the one
customer by another customer.
Pass Book:
A pass book is a copy of the customer's account in the bank's ledger. It contains
the particulars of the customer's bank transactions as recorded in the bank's
ledger.
Deposit scheme :-
Gold Deposit
Traditionally Indian families have held gold in high esteem- not just as a
precious metal for making ornaments but
for also as a valuable family investment. But in the process gold has remained
largely idle and has not fulfilled its earning potential.
Allahabad Bank's Gold Deposit scheme seeks to redress this situation by
offering you not only interest but much more
WHO CAN PARTICIPATE:
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Following categories of Resident Indians can subscribe to the scheme.
a. Individual singly or jointly
b. Individual as a natural / Legal guardian on behalf of a minor child
c. HUF
d. Trust
e. Company
Nomination facility is available if the deposit is in a single name in individual
capacity.
NATURE OF DEPOSIT:
Gold can be deposited in the scrap form of jewellery I bars or coins, with a
minimum deposit of 200 gms.
PERIODOF
DEPOSIT
RATEOF
INTEREST
3 years 3.00%
4 years 3.25 %
5 years 3.50 %
6 years 3.75 %
7 years 4.00 %
Minimum lock-in period is one year Interest will be paid in Indian Rupees
either annually on the 31 st March or compoded annually for payment on
maturity, at the option of the investor.
REDEMPTION:
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Deposits and Advances at ALLAHABAD Bank, Tumkur
The principal amount of gold deposited will be paid back on maturity either in
the form of standard gold bars of 995 / 999 fineness or in Indian rupees as per
option of the depositor
Deposit Schemes
The rates will also be applicable in all types of Term Deposits including
Recurring Deposit and Capital Gains Accounts Scheme, 1988.The interest rates
are as under :-
Advances- General :
Introductory:
Lending is the very curx & center of banking which encompasses the areas like
pre-sanction appraisal, credit decision making documentation. Post sanction
follow up recovery. The banking historical reasons have undergone paradigm
change in recent time on account of banking sector reforms.
Lending policy :
After Nationalization of banks in the year 1969, RBI has framing policies for
extension of bank credit in tune with the national economic policy . Banks are
expressed. To achieve certain objectives depending upon the national priorities
besides being profitable through quality lending. The policies of RBI pertaining
to bank credit as they exit today lay emphasis on providing credit on priority to :
1.Agriculture.
2.Small-scale industries With special reference to village cottage and tiny
industries.
3.Other priority sector like retail trade, small business, professionals & self
employe persons, education etc.
,4.Medium & large scale industry.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
In keeping with various policy guidelines laid down by RBI & taking into
account the operational requirements, the bank has been releasing a lending
policy document at periodical intervals say on yearly basis, after obtaining
the approval of the Board of Directors. The policy guidelines are required to be
followed scrupulously. Following are the main features of the lending policy as
it exists today :
The objectives of the banks credits policy as at present are:
1) The loan assets remain safe & secure.
2) The loan assets remain performing.
3) Profitable deployment of the resources ensuring asset liability matching &
recycling of funds.
4) Adoption of risk management concept for effective credit portfolio
management.
5) Business management.
The geographical spread, Sartorial deployment of credit shall be determined
having regard to the credit absorption capacity availability of viable lending
opportunities & the credit deposit ratio prevailing in various regions/state with
the overall objective of furthering the economic development of the
region/sector.
Exposure limits to the various industries & fixed with Board's approval
& are reviewed at periodical intervals.
Advances to sectors, which are subject to high degree of asset price
volatility such as Real Estate sector at present may be avoided.
A relatively lower priority is presently being assigned to the following sectors
due to the existing level of NPAs & the industry scenario.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
# Engineering.
* Iron & Steel.
♦ Chemicals.
* Textiles.
♦ Consumer Electronics.
* NBFCS.
♦ Coffee.
* Sugar.
♦ Cement.
♦ Real-Estate Development.
Public sector and NBFCs:
Preference is given at present for exposure to public sector undertakings with
sound financials & good performance.
Other than NBFCs enjoying exemplary rating from Rating, Agencies whose
credit limits are sanctioned with prior approval from corporate offices. NBFCs
in general are accorded low priority at present for lending purposes.
Consumer credit and Group approach:
Retail credit including personal banking loans. Housing Finance & Trade
Finance is presently, a thrust area enjoying preformance. Normal funding
requirements of the healthy performing units belonging to a group should
not be hampered by adoption of group approach.
Unless the companies concerned are in defaulting list or the promoters are non
co-operative & or where the funds from non performing units are diverted to
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Deposits and Advances at ALLAHABAD Bank, Tumkur
other units of the group. The guiding principle is "Commodity of management
& effective control" salient features of the group approach are as follows:
In case any unit belonging to a group becomes irregular & the concerned
promoters do not co-operate to settle their dues. The group will not be provided
accommodations either for financing new projects or expansion of existing units
unless the group arrives at amicable settlement with the bank.
While dealing with cases involving extension of fresh facilities to the units
belonging to various industrial groups, considering the possibility of intra group
transfer of funds, the following points be kept in view :
Financial assistance for setting up new venture or expansion to unit belong in to
industrial group which is willful defaulter or non co-operative shall not be
extended as to ensure that no amount lend to a healthier unit of a group is
transferred to another unit with in the group by reducing current ratio.
The sick units in the group shall be looked after by other healthy cash rich
companies of the group for their revival instead of the weak units seeking bank
finance.
In an event of any dispute or dissension within the group, any attempt on the
part of the group to unduly prolong/postpone a settlement on account of such
dispute / dissension should not be accepted.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
While committing fresh are additional fund to a unit of any recalcitrant group,
bank should exercise necessary care & caution & obtain full information about
dealing of the concerned units & all the other units of the group with other
banks / financial institutions. Industrial units in public sector to be left out of the
purview of group approach.
ALL BANKING HOUSING FINANCE
Eligibility
Permanent salaried employees, Professionals & Self-Employed Persons,
Businessmen, having regular income to liquidate the loans.
Special Facility :
Repayment Option for salaried persons desirous to extend the repayment period
beyond the date of retirement under Public Housing Loan Scheme of the Bank
will be eligible up to 5 years after the date of retirement. Availability of
Progressive monthly instalments (PMI) options under public housing loan
scheme.
Loan amount:
Up to 60 monthly Gross Salary last drawn in case of salaried persons.For others
four times of annual taxable income subject to repayment capacity.
However take home is not less than 40% of gross salary for salaried person and
for others monthly EMI is not more than 50% of average gross salary.
(In such case where husband & wife are working, their income may be clubbed
OR two members of the same family may avail Housing Loan on joint basis, in
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Deposits and Advances at ALLAHABAD Bank, Tumkur
such cases income of both members may be clubbed.) (While computing
repaying capacity in case of joint borrowers, income of all borrowers may be
clubbed. Joint borrowers may be the co-owner of the property or they may not
be co owner (but must be legal heirs of owner of the property / PF nominee /
Spouse having future interest in the property) but their income is to be
considered as one of the source of loan repayment).
Repayment Period:
i. For salaried persons Max. Period of 20 years or length of remaining
service, whichever is less.
ii. For other - Maximum period of 15 years or attainment of 65 years of age,
whichever is earlier.
iii. Loan Repayment Options is available.
a. Repayment option for salaried persons desirous to extend the repayment
period beyond the date of retirement under Housing Loan Scheme:
To extend repayment period of housing loan to salaried persons upto 5 years
after the date of retirement subject to the condition that EMI will be within 60%
of their estimated post retirement monthly earnings (pension plus ascertainable
other income such as rental earnings, income from investment in
securities/LIP/NSC etc., if any) as also existing net take home salary after
taking all deductions will not be below 40% of gross salary.
There will also be flexibility to consider some lump sum / bullet payment of full
or part of the loan outstanding out of future sources of fund and draw the
repayment schedule accordingly. If post retirement EMI is more than stipulated
norms, pre-retirement EMI may be proportionately increased with borrower's
consent.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
b. Offering progressive monthly instalments (PMI) options
Under the plan, the initial monthly instalments for the first 5 years shall be kept
lower i.e., 80% of normal EMI and it will gradually go up to 90%) of EMI plus
whatever shortfall during the first 10 years shall be realized after 10 th year of
loan. Accordingly, a three-tier repayment schedule will be drawn up.
Borrowers will have also option for 2 tier repayment structure (with first tier not
above one third of repayment period)
Borrowers may also get higher amount of progressive monthly instalments
(PMI) than the above norms by opting higher %of EMI for PMI calculation.
Existing borrower or Bank's employees also can exercise options (a) & (b).
Primary:
Equitable/ Registered mortgage of the property or Pari-passu charge over the
property if the borrower (salaried person) has already availed loan from his
organization.
a. Guarantee from 2 persons OR assignment of Life Insurance Policy (face
value) / Fixed Deposits / NSC / KVP / Govt. Security equal to 25% of loan
amount. (Policies issued by Life Insurance Corpn. of India, ICICI Prudential,
Tata AIG, Birla Sun Life, Max Life are accepted.)
Prepayment Penalty:
If liquidated within 12 months: 2% of outstanding
If liquidated after 12 months: 1% of outstanding
No Prepayment Penalty for death or payment made out of own
resources.
Others:
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Deposits and Advances at ALLAHABAD Bank, Tumkur
For salaried persons: Total deduction should be less than or equal to 60% of
gross income.
For others: Total deduction should be less than or equal to 50% of gross
income.
Utilisation of loan for purchase of land will be restricted to 40% of the
sanctioned loan or 85% of cost of land (including cost of registration also)
whichever is lower.
Housing Loan will not be sanctioned for purchase of land only.
All Bank Education Loan Scheme
Eligibility Criteria Studies in India:
School education including plus 2 stage
Normal Graduation Courses - B.A., B. Com., B.Sc, Microbiology. Post
Graduation Course: Masters Courses, Ph.D., etc. Professional Courses:
Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management
(including Hotel Management), Computer/ Information Technology, Journalism
& Mass Communication, etc. Courses like: ICWA, CA, CFA. etc.
Computer Certificate Courses of reputed Institutes accredited to Department of
Electronics or Institutes affiliated to University. Courses conducted in India by
reputed Foreign Universities. Evening courses of approved institutes.
Courses leading to diploma / degree etc. conducted by the Colleges/
Universities approved by UGC / Govt./ AICTE / AIBMS / 1CMR etc.
Studies Abroad:
Graduation: For job oriented professional / technical courses offered
by reputed Universities.
Post Graduation: MCA, MBA. MS, etc.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Courses conducted by CI MA London, CPA in USA etc
Quantum of Loan:
Need based finance subject to repaying capacity of the parents/ students
with following ceilings:
Studies in India: Maximum Rs 7.50 lacs
Studies abroad: Maximum Rs. 15.00 lacs
Margin:
For loan upto Rs 4.00 lacs: NIL
For loan above Rs 4.00 lacs:
(i) Studies in India: 5%
(ii) Studies abroad: 15%
Scholarship / Assistantship to be included in Margin.
Margin Money to be brought on year to year basis as and
disbursements are made on a pro-rata basis
Rate of Interest:
For students of IITs / IIMs & other Professional Courses:
o PLR - 2% (Floating), irrespective of Loan Amount.
o The aforesaid Interest Rate will be applicable to existing & future Education
Loan to the students of IIMs / IITs for their regular Management & Technology
Courses as also students of other Professional Courses.
o For other students:
c PLR (Floating), irrespective of Loan Amount.
o However, interest at PLR - 1 % may be charged in case of loan above Rs 7.50
lacs provided the collateral security offered to secure the loan consists either
residential property for full value of loan or liquid security for more than 50%
value of the loan.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
o The aforesaid revision will be applicable for all future loan with effect from
01.01.2005.
Application of Interest:
Simple rate of interest will be applied during course / moratorium period and
thereafter the entire outstanding interest (if servicing of interest not done during
moratorium period) will be added back to the principal account and compound
interest (with monthly rest) will be applied in the account till liquidation of the
entire loan.0.5% rebate will be allowed during moratorium period in case
interest is serviced regularly
Repayment:
Repayment Holiday / Moratorium is Course Period + 1 year (in case job is not
obtained) or 6 months after getting job, whichever is earlier. Loan to be repaid
within a maximum period of 7 years after commencement of repayment.
Security:
For loan up to Rs 4.00 lacs: No collateral security is required.
For loan above Rs 4.00 lacs and up to Rs 7.50 lacs: Satisfactory third party
guarantee is required.
For loan above Rs 7.50 lacs:
(a) Collateral security of suitable value.
(b) Co-obligation of parents / guardian / third party along with assignment of
future income of the student for payment of installments.
Chapter-6
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Deposits and Advances at ALLAHABAD Bank, Tumkur
ANALYSIS AND INTERPRETATION OF DATA
Analysis and interpritation of data
A study of deposits & advances, conducted in Allahabad bank, Tumkur, due to
time consideration. I have interviewed only 50 respondent borrowers who have
taken different types of deposits & advances. The data is collected at
questionnaire & interviewed.
The chapter tells about the respondent borrowers perception , opinion [after the
services] about the Allahabad bank - Tumkur .
Table - 1 Showing the borrowers interest of participation in my
research study .
Total no. of
questionnaires given to
borrowers
75
Questionnaires received
with response
50
Questionnaires
notreceived back
25
Analysis:
During the research study 75 questionnaires were given to borrowers out of that.
I received back only 50 questionnaires with response. The major parts of
remaining 25 questionnaires for which 1 have received back are given to the
farmers.
Graph -1
Showing the borrowers interest of participation in my research study .
Advanced Management College, Banglore Page 56
Deposits and Advances at ALLAHABAD Bank, Tumkur
Table - 2 Showing the age group of the responded borrowers.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Age- group No. of respondents Percentage(%)
20-30 4 8%
30-40 22 44%
40-50 19 38%
50-60 5 10%
60-70 - -
Total 50 100%
Analysis:
This data is collected to known the age of borrowers.
By analyzing the above data, we can conclude that all age grouped people are
having banking habit but from the age between 30 to 40 years people are having
habit than others.
Graph - 2 Showing the age group of the responded borrowers.
Table - 3 Showing the sex category of the responded borrowers.
Advanced Management College, Banglore Page 58
Deposits and Advances at ALLAHABAD Bank, Tumkur
Category No. of respondents Percentage (%)
Male 45 84%
Female 5 16%
Total 50 100%
Analysis;
It is clear from above table that the majority is of male only. It has to be noticed
that the banking habit is less in female category when compared to male.
Graph - 3 Showing the sex category of the responded borrowers.
Table - 4 Showing the Education qualification of the responded borrowers.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Qualification No. of respondents Percentage (%)
Up to SSLC 16 32%
PUC 12 24%
Graduation 7 14%
Master Degree 1 2%
Professional
Courses
10 20%
Uneducated 4 8%
Total 50 100%
Analysis;
This data is collected to know the real qualification of borrowers whether they
are educate or not.
By the above data analysis it is clear that there was both educate & un educate
borrowers out of it majority of the i.e., 92% are educated only few borrowers
i.e., 8% of them are uneducated.
Graph - 4 Showing the Education qualification of the responded
borrowers.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Table - 5 Showing the Occupation of the responded borrowers.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Occupational Category No. of respondents Percentage (%)
Govt, employees 12 24%
Pvt. Employees 10 20%
Self Employees 1 2%
Professionals 10 20%
Business 9 18%
Agriculture 8 16%
Total 50 100%
Analysis;
This gives information about the nature of work of each borrower.
By analyzing the above data, it is clear that the Govt, employees who constitute
the majority part i.e., 24% out of them again the majority are teachers who
drawn salary through this bank..
Graph - 5 Showing the Occupation of the responded borrowers
Table - 6 Showing the monthly income profile of the responded borrowers.
Income group No. of respondents Percentage
(%)
Advanced Management College, Banglore Page 62
Deposits and Advances at ALLAHABAD Bank, Tumkur
Below - 5000 11 22%
5000- 10000 19 38%
10000-20000 13 26%
20000 and above 7 14%
Total 50 100%
Analysis;
Table shows monthly income of the respondent borrowers.
It is evaluated from the above table that the majority i.e., 38% borrowers are
placed are comes under the income group between 5000 -10000, 26% are
between 10000 -20000, 22% are earning below 5000 per month & remaining
7% are earning more than 20000 per month.
Graph - 6 Showing the monthly income profile of the responded borrowers.
Table - 7 Showing the purpose / reason for advances taken by the
responded borrowers.
Category of loan No. of respondents Percentage
Advanced Management College, Banglore Page 63
Deposits and Advances at ALLAHABAD Bank, Tumkur
(%)
Education 6 12%
Business 9 18%
Agriculture 8 16%
To purchase the vehicle 8 16%
To build /purchase of
House / building
15 30%
SSI 1 2%
Others 3 6%
Total 50 100%
Table shows the purchase for which the advances taken by the respondent
borrowers.majority of them have taken advances for building/purchase of house
or building[ie.,30%]
Graph - 7 Showing the purpose / reason for advances taken by the
responded borrowers.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Table - 8 Showing the advances amount sanction by the bank to responded
borrowers.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Category of loan No. of respondents Percentage (%)
5000 - 25000 7 14%
25000 - 50000 10 20%
50000-100000 18 36%
100000-200000 8 16%
200000 & above 7 14%
Total 50 100%
Table shows that the amount in which sanction to borrowers.
By analyzing the above data, it is clear & we can conclude that the majority of
respondent have taken advances in between the 50000 to 10000
Graph- 8 Showing the advances amount sanction by the bank to responded
borrowers
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Table - 9 Showing the opinion of responded borrowers on amount sanction
by the bank .
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Opinion No. of respondents Percentage (%)
Sufficient 47 94%
Insufficient 3 6%
Total 50 100%
Table showing the opinion of respondents about the advances amount sanction
by the bank is sufficient or not.
It is clear from above table that most of i.e., 94% of the respondent borrowers
are satisfied with the advanced amount sanctioned by the bank.
Graph - 9 Showing the opinion of responded borrowers on amount
sanction by the bank .
Table - 10 Showing the repayment period given by the bank to responded
borrowers.
Repayment No. of Percentage
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Deposits and Advances at ALLAHABAD Bank, Tumkur
period respondents (%)
20 months 12 24%
3 years 21 42%
5 years 13 26%
7 years 3 6%
10 years & above 1 2%
Total 50 100%
Table shows repayment time given to the borrowers by the bank.
By analyzing the above data mentioned above table , we can conclude that the
majority of respondent have taken medium term advances (i.e., for 3 & 5 years)
from the bank.
Graph – 10. Showing the repayment period given by the bank to responded
borrowers.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Table - 11 Showing the satisfaction of the responded borrowers regarding
repayment period given by the bank.
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Opinion No. of
respondents
Percentage
(%)
Yes 25 50%
No 25 50%
Total 50 100%
Table showing the borrowers satisfaction regarding the repayment period of
advances [if satisfied - Yes, otherwise - No].
There is equal percentage of satisfaction on the repayment period given by the
bank to repay their advances.
Graph - 11 Showing the satisfaction of the responded borrowers regarding
repayment period given by the bank.
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Table - 12 Showing the opinion of responded borrowers regarding
repayment period given by the bank.
Opinion on repayment No. of respondents Percentage (%)
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Deposits and Advances at ALLAHABAD Bank, Tumkur
mode
Easy 20 40%
OK 24 48%
Burdon 6 12%
Total 50 100%
Table shows the opinion of respondent borrowers about the repayment modes of
advances.
The repayment modes [i.e., installments] of advances out of 50 respondents
only a few i.e., 12% of people had an adverse opinion on remaining 88% of
them are happy with the repayment modes of advances provided by the bank
Graph - 12 Showing the opinion of responded borrowers regarding
repayment period given by the bank.
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Table - 13 Showing the rate of interest payable period by the responded
borrowers to the bank .
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Rate of
interest
No. of respondents Percentage (%)
9.5 % 6 12%
11.5% 20 40%
12.0% 12 24%
13.5% 2 4%
140% 5 10%
14.5% 5 10%
Total 50 100%
The above table shows the rate of interest charged by the bank to the advances
of respondent borrowers, it is clear that the majority of respondent borrowers
pay the interest rate of 11.5.%
Graph - 13 Showing the rate of interest payable period by the responded
borrowers to the bank
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Table - 14 Showing the opinion of responded borrowers on interest's rates.
Opinion on interest rates No. of respondents Percentage (%)
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Reasonable 41 82%
High 8 16%
Very High 1 2%
Total 50 100%
Table shows the opinion of respondent borrowers regarding the rate of interest
charged by the bank. The 82% of them says that the interest is reasonable.
Graph - 14 Showing the opinion of responded borrowers on interest's rates.
Table - 15 Showing the opinion of responded borrowers regarding the
lending procedure of the bank.
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Particulars No. of respondents Percentage
(%)
Simple 25 50%
Complicate
d
25 50%
Total 50 100%
Table shows the opinion of respondent borrowers regarding the procedure
followed by the bank while providing the loan.
By analyzing the data available in the above table it is very clear we can
conclude that there is an equal percentage of opinion on the lending procedure
of the bank.
Graph - 15 Showing the opinion of responded borrowers regarding the
lending procedure of the bank.
Table - 16 Showing the percentage of the responded borrowers on the
bank.
Burrower No. of Percentage (%)
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Deposits and Advances at ALLAHABAD Bank, Tumkur
perception on banks
service
respondents
Very good 40 80%
Good 5 10%
Average 2 4%
No Response 3 6%
Total 50 100%
Table shows the respondent borrowers perception regarding the service
rendered by Allahabad bank Tumkur.
The Allahabad Bank , Tumkur is based on the main aim is to serve the society
in a good manner as much as possible.
Graph- 16 Showing the percentage of the responded borrowers on the
bank.
Chapter-7
FINDINGS
General findings :
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Deposits and Advances at ALLAHABAD Bank, Tumkur
As per my knowledge concerned, I found the following during my study.
1. It was observed that the Allahabad Bank has been functioning effectively &
one of the leading Scheduled Commercial Bank in India. It has its branch
in Kolkata & newly started branch in Honkhong also. The Tumkur branch
is rending its services most successfully since from 1976.
2. Sanction of Deposits & Advances are increasing in every year.
3. Bank sanction of Deposits & Advances to all types of class.
4. The Bank also has safe deposit locker facility & there is great demand for it.
5. The total banking transactions are fully computerized.
6. Whole bank staff is very active. They are very quick in doing their work.
Specific findings :
1. Major part deposits & advances are going out in the form of agriculture
finance, Housing finance thus it has shown its concern for the farmers,&
equally aware of the need to assist to all the class of the society to have
their dream house by providing finance at lower interest rate (4 - 4.25%)
2. The bank concentrates mainly on the development of agriculture & other
priority deposits & advances to develop the self-employment
opportunities.
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3. The bank interest rates are charged over the time as per the direction of
RBI up to some extent the rate of interest is reasonable: it varies from
11% to 14%. The interest rate on housing finance is very low i.e., 8.25%.
4. As per the primary data, the rate of interest on deposits & advances are
more convenient to the borrowers.
5. 80% of the respondent borrowers are happy with the lending procedure &
many of them are satisfied with the amount sanctioned by the bank.
6. Most of the respondent borrowers had a very perception regarding the
service by the bank.
7. 94% of the respondent borrowers are satisfied with the loan amount
sanctioned by the bank.
8. Government employees who constitute the majority part i.e., 24% out of
them again the majority are teachers who draw salary through this bank.
9. That majority of respondent borrowers are taken medium term deposits
from the bank.
10.The majority of (52%) respondent borrowers are in need &
recommending for the publication of journals / broachers from the bank.
Suggestions/recommendations
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The each & every activity performed by the Allahabad Bank is excellent. So
researcher need not to give any suggestions, but still there are some
programmatic suggestions that I want to be mentioned here.
1. Bank should be increase saving habit of people by providing better
information regarding banking by publishing the journals etc. at the
branch.
2. There is a need of further more improvement in recycling of credit.
3. In the interest of economic development activity the human resource
power has to be increased. The bank should provide the more educational
loans for higher education.
4. The bank should increase amount of loan for weaker section group &
should enhance the repayment period.
5. During the time of research, it has been noticed that there is more demand
for safe deposit lockers.
6. Courtesy costs nothing - courteous behavior of staff is also an important
service need to the customers.
Un satisfied customers may not complain but they simply switch over to the
another bank & also spread bad mouth of words in the society about the bank
that is why personal attention should be given to each & every customers.
7. It is very difficult to identify the bank staff by customers. So staff should
wear an identify badge for easy identification.
Conclusion :
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Finally, researcher concludes that the Allahabad Bank , Tumkur is the
pioneer in the Tumkur district, which always had the benefit of a very forward -
looking & progressive leadership. I have no doubt the Allahabad Bank ,
Tumkur. Will secure a brighter future for itself in the modern banking world of
21st century. I am confident that with the combined endeavors of all its people,
& support of all its constituents, the bank will continue to prosper & grow.
" I wish the bank, the management & all the respondent borrowers for their
glorious future".
BIBLIOGRAPHY
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Deposits and Advances at ALLAHABAD Bank, Tumkur
1. Dr. V.P. Michael : Research Methodology in Management , 5 th Edition
Himalaya Publishing
House 2000.
2. KPM Sundaram & P N Varshiney : Banking theory - law & practice , 5 th
Edition , Sulthan,Chand & Sons , New Delhi 2000
3. Dr. P N Reedy & H R Appannaiah: Theory & practice of banking 4th Edition
Himalaya Publishing House 2000.
4. M .V . Kamath : A people bank , published by the Allahabad bank on eve of
platinum jubilee Celebration, manipal.
5. Internet.
ANNEXURE
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Deposits and Advances at ALLAHABAD Bank, Tumkur
Dear sir / Madam
As a part of our academic study. I am undergoing a project work on the
title of “ A Study of Deposits & Advances in Allahabad Branch Tumur”
under the guidance of Prof. Dharmaraj .B, HOD of MBA.
I request you to kindly spare some time to answer the following
questions. The information supplied by you will be kept confidential.
Thanking You,
Yours sincerely
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