Loan & Credit Facility Provided by Different Banks

8/17/2019 Loan & Credit Facility Provided by Different Banks

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PROJECT PROJECT

ON

“LOAN & CREDIT FACILITY"

AMAR SHAHEED BABA AJIT SINGH JUJHAR SINGH MEMORIAL

COLLEGE

Afliated To

PUNJABI UNIVERSITY PATIALA

In the a!tial "#l$ll%ent o" !ei!e%ent "o! the a'a!d o"

De(!ee o" Ba)helo! o" B#*ine** Ad%ini*t!ation +BBA,

Submitted To:

Submitted B y:

P#n-a.i Uni/e!*it0 Patiala Jatinde!

Pal Sin(h

Roll1No1 23434


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DECLARATION

I a% a *t#dent o" BBA 6t Seme!te o" A#AR S$A$$ED BABA AJIT SIN%$

JJ$AR SIN%$ #E#ORIAL COLLE%E' BELA de)la!e that the P!o-e)t Reo!t

entitled LOAN & CREDIT FACILITY i* the o#t)o%e o" %0 o'n 'o!5 and the *a%e

ha* not .een *#.%itted to an0 #ni/e!*it06in*tit#te "o! the a'a!d o" an0 de(!ee o! an0

P!o"e**ional De(!ee

Date7 Jatinde! Pal Sin(h


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ACKNOWLEGEMENT

“Success is not a description, but a journey.” While I reach towards the end of this journey, I

realized I may not have come this far without the guidance, help and support of the people who

acted as guides, friends and torch bearers along the way.

I tae this opportunity to than Po() %eeti*+ without their cooperation I would not have been

able to complete this project.

I e!press my deepest and most sincere thans to my organization guide, Mr. $+i! Obeoi

(C)A) from who I had the opportunity to learn a lot, I would lie to than him for giving me

valuable suggestion and guidance with which, my project would have been complete.


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Table of Contents

"#$%&'&(I)* +

&$*)W%#"-##*( /

Chapter No.1 Introduction 0123

Chapter No.2. Research Methodology 24105

Chapter No.3. Data Analysis and interpretation 06172

Chapter No.4. Limitations and conclusions 70173

i!liography 74

Anne"ure 78136


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CHAPTER-1

INTRODUCTION


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INDSTRY INTRODCTION

WHAT IS BANKING?

9aning in a traditional sense is the business of accepting deposits of money from public :or the

purpose of lending and investment. (hese deposits can have a distinct feature lie being

withdrawn able by che;ues, which no other financial institution can offer. In &ddition, bans also

offer financial services, which include<

(he Issue of demand draft = traveler>s che;ue.

$redit cards

$ollection of che;ues, bill of e!change.

Safe deposit locers

$ustodian services.

Investment and Insurance Services.

(he business of baning is highly regulated since bans deal with money offered to them by the

public and ensuring the safety of this public money is one of the prime responsibilities of any

ban. (hat is why bans are e!pected to be prudent in their leading and investment activities.

#very ban has a compliance department, which is responsible to ensure that all the services

offered by the ban, and the processes followed are in compliance with the local regulations and

the 9an>s corporate policy.

(he major regulations and act govern the baning business are


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STANDARD ACTI,ITIES OF BAN-

9ans act as payment agents by conducting checing or current accounts for customers, paying

che;ues drawn by customers on the ban, and collecting che;ues deposited to customersA current

accounts. 9ans also enable customer payments via other payment methods such as telegraphic

transfer, and &(.

9ans borrow money by accepting funds deposited on current accounts, by accepting term

deposits, and by issuing debt securities such as bannotes and bonds. 9ans lend money by

maing advances to customers on current accounts, by maing installment loans, and by investing

in maretable debt securities and other forms of money lending.

9ans provide almost all payment services, and a ban account is considered indispensable by

most businesses, individuals and governments. *on1bans that provide payment services such as

remittance companies are not normally considered an ade;uate substitute for having a ban

account.

9ans borrow most funds from households and non1financial businesses, and lend most funds to

households and non1financial businesses, but non1ban lenders provide a significant and in many

cases ade;uate substitute for ban loans, and money maret funds, cash management trusts and

other non1ban financial institutions in many cases provide an ade;uate substitute to bans for

lending savings too.

RE,ENE %ENERATION

& ban can generate revenue in a variety of different ways including interest, transaction fees and

financial advice. (he main method is via charging interest on the capital it lends out to customers.

(he ban profits from the differential between the level of interest it pays for deposits and other

sources of funds, and the level of interest it charges in its lending activities.

(his difference is referred to as the spread between the cost of funds and the loan interest rate.

@istorically, profitability from lending activities has been cyclical and dependent on the needs and

strengths of loan customers and the stage of the economic cycle. :ees and financial advice

constitute a more stable revenue stream and bans have therefore placed more emphasis on these

revenue lines to smooth their financial performance.

RIS- AND CAPITAL

http://en.wikipedia.org/wiki/Transactional_accounthttp://en.wikipedia.org/wiki/Transactional_account


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9ans face a number of riss in order to conduct their business, and how well these riss are

managed and understood is a ey driver behind profitability, and how much capital a ban is

re;uired to hold. Some of the main riss faced by bans include<

• $redit ris < ris of loss arising from a borrower who does not mae payments as

promised.

• %i;uidity ris < ris that a given security or asset cannot be traded ;uicly enough in the

maret to prevent a loss Bor mae the re;uired profitC.

• aret ris < ris that the value of a portfolio, either an investment portfolio or a trading

portfolio, will decrease due to the change in value of the maret ris factors.

• )perational ris < ris arising from e!ecution of a companyAs business functions.

(he capital re;uirement is a ban regulation, which sets a framewor on how bans and

depository institutions must handle their capital. (he categorization of assets and capital is highly

standardized so that it can be ris weighted

ECONO#IC FNCTIONS OF BAN-S

(he economic functions of bans include<

Issue of money, in the form of bannotes and current accounts subject to che;ue or

payment at the customerAs order. (hese claims on bans can act as money because they are

negotiable or repayable on demand, and hence valued at par. (hey are effectively

transferable by mere delivery, in the case of bannotes, or by drawing a che;ue that the

payee may ban or cash.

*etting and settlement of payments D bans act as both collection and paying agents for

customers, participating in interban clearing and settlement systems to collect, present, be

presented with, and pay payment instruments. (his enables bans to economies on

reserves held for settlement of payments, since inward and outward payments offset each

other. It also enables the offsetting of payment flows between geographical areas, reducing

the cost of settlement between them.

$redit intermediation D bans borrow and lend bac1to1bac on their own account as

middle men.

$redit ;uality improvement D bans lend money to ordinary commercial and personal

borrowers Bordinary credit ;ualityC, but are high ;uality borrowers. (he improvement

http://en.wikipedia.org/wiki/Credit_riskhttp://en.wikipedia.org/wiki/Liquidity_riskhttp://en.wikipedia.org/wiki/Market_riskhttp://en.wikipedia.org/wiki/Operational_riskhttp://en.wikipedia.org/wiki/Bank_regulationhttp://en.wikipedia.org/wiki/Chequehttp://en.wikipedia.org/wiki/Banknoteshttp://en.wikipedia.org/wiki/Credit_riskhttp://en.wikipedia.org/wiki/Liquidity_riskhttp://en.wikipedia.org/wiki/Market_riskhttp://en.wikipedia.org/wiki/Operational_riskhttp://en.wikipedia.org/wiki/Bank_regulationhttp://en.wikipedia.org/wiki/Chequehttp://en.wikipedia.org/wiki/Banknotes


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comes from diversification of the banAs assets and capital which provides a buffer to

absorb losses without defaulting on its obligations. @owever, bannotes and deposits are

generally unsecuredE if the ban gets into difficulty and pledges assets as security, to raise

the funding it needs to continue to operate, this puts the note holders and depositors in an

economically subordinated position.

BAN-IN% IN INDIA:.

9aning means accepting for the purpose of landing or investment of deposits of money from the

public repayable on demand or otherwise one withdraw able by che;ue, draft or otherwise.

9aning in India has its origin as early as the Fedic period. It is believed that the transaction

:rom money lending to money baning must have occurred even before anu, the great @indu

Gurist, who has devoted a section of his wor to deposits and advances and laid down the rules

relating to rate of interest, "uring ugal ?eriod, the native baners played a very important role

in lending money and finance foreign trade and commerce. "uring the days of the east1 India

$ompany, it was the turn of the agency house to carry on the baning business the general ban of

India was the first joint stoc ban to be established in the year 6347. (he others that followed

were the 9an of @industan and the 9engal 9an. (he 9an of @industan is reported to have

continued till 6857 while the other two failed in the meantime. In the first half of the 68th century

the east1India company established three bans, the 9an of 9engal in 6458, the 9an of 9ombay

in 6425 and the bans of adras in 642/.

(hese three bans are also nown as the presidency bans were amalgamated in 68+5 and a new

9an D the imperial ban of India established ion +3th Ganuary 68+6. With the passing of the state

ban act 6800 the under taing of the imperial 9an of India is taen over by the newly

constituted the state ban of India.


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NATIONALI/ATION

(he -)I issued an ordinance and nationalized the 62 largest commercial bans with effect from

the midnight of Guly 68, 6878. Gayapraash *arayan, a national leader of India, described the step

as a Hmasterstroe of political sagacity." Within two wees of the issue of the ordinance, the

?arliament passed the 9aning $ompanies B&c;uisition and (ransfer of ndertaingC 9ill, and it

received the presidential approval on 8 &ugust 6878.

& second dose of nationalization of 7 more commercial bans followed in 6845. (he stated reason

for the nationalization was to give the government more control of credit delivery. With the

second dose of nationalization, the -)I controlled around 86J of the baning business of India.

%ater on, in the year 688/, the government merged *ew 9an of India with ?unjab *ational

9an. It was the only merger between nationalized bans and resulted in the reduction of thenumber of nationalized bans from +5 to 68. &fter this, until the 6885s, the nationalized bans

grew at a pace of around 2J, closer to the average growth rate of the Indian economy.

LIBERALI/ATION

In the early 6885s, the then *arsimha 'ao government embared on a policy of liberalization,

licensing a small number of private bans. (hese came to be nown as *ew -eneration tech1

savvy bans, and included -lobal (rust 9an Bthe first of such new generation bans to be set upC,which later amalgamated with )riental 9an of $ommerce, &!is 9anBearlier as (I 9anC,

I$I$I 9an and @":$ 9an. (his move, along with the rapid growth in the economy of India,

revitalized the baning sector in India, which has seen rapid growth with strong contribution from

all the three sectors of bans, namely, government bans, private bans and foreign bans.

(he ne!t stage for the Indian baning has been set up with the proposed rela!ation in the norms

for :oreign "irect Investment, where all :oreign Investors in bans may be given voting rights

which could e!ceed the present cap of 65J, at present it has gone up to 32J with some

restrictions.

(he new policy shoo the 9aning sector in India completely. 9aners, till this time, were used to

the 21712 method B9orrow at 2JE %end at 7JE -o home at 2C of functioning. (he new wave

ushered in a modern outloo and tech1savvy methods of woring for traditional bans. &ll this led

to the retail boom in India. ?eople not just demanded more from their bans but also received

more.


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$urrently B+553C, baning in India is generally fairly mature in terms of supply, product range and

reach1even though reach in rural India still remains a challenge for the private sector and foreign

bans. In terms of ;uality of assets and capital ade;uacy, Indian bans are considered to have

clean, strong and transparent balance sheets relative to other bans in comparable economies in its

region. (he 'eserve 9an of India is an autonomous body, with minimal pressure from thegovernment. (he stated policy of the 9an on the Indian 'upee is to manage volatility but without

any fi!ed e!change rate1and this has mostly been true.

With the growth in the Indian economy e!pected to be strong for ;uite some time1especially in its

services sector1the demand for baning services, especially retail baning, mortgages and

investment services are e!pected to be strong. )ne may also e!pect = &s, taeovers, and asset

sales.

In arch +557, the 'eserve 9an of India allowed Warburg ?inups to increase its stae in ota

ahindra 9an Ba private sector banC to 65J. (his is the first time an investor has been allowed

to hold more than 0J in a private sector ban since the '9I announced norms in +550 that any

stae e!ceeding 0J in the private sector bans would need to be vetted by them.

In the Indian 9aning Industry some of the ?rivate Sector 9ans operating are I"9I 9an, I*-

Fyasa 9an, S9I $ommercial and International 9an %td, 9an of 'ajasthan %td. and bans from

the ?ublic Sector include ?unjab *ational ban, Fijaya 9an, $) 9an, )riental 9an,

&llahabad 9an among others. &*K -rindlays 9an, &9*1&') 9an, &merican #!press

9an %td, $itiban are some of the foreign bans operating in the Indian 9aning Industry.


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INDIAN BAN-IN% INDSTRY

(he Indian 9aning system has the 'eserve 9an of India B'9IC as the ape! body for all atters

relating to the baning system. It is the $ombination of 9ans of India and baners to all others

bans as well.(he Indian 9aning industry, which is governed by the 9aning 'egulation &ct of India, 6828

can be broadly classified into two major categories, non1scheduled bans and scheduled bans.

1. Sce!"le #an$s%&

(hese bans must have paid1up capital and reserve of mot less than 's. 05, 55,555. (hey must

satisfy the '9I than its affairs are mot conducted in a manner detrimental to the interests of its

depositors. (hese are further classified as follow< State co1operative 9ans

$ommercial 9ans

Scheduled bans comprise commercial bans and the co1operative bans. In terms of ownership,

commercial bans can be further grouped into nationalized bans, the State 9an of India and its

group bans, regional rural bans and private sector bans Bthe oldL new domestic and foreignC.

(hese bans have over 73,555 branches spread across the country in every city and villages of all

noo and corners of the land.

'. Non&Sce!"le #an$s%&

(hese are bans, which are not included in the second schedule of the 9aning 'egulations &ct,

6870. It means they do not satisfy the conditions laid down by that schedule. (hey are further

classified as bac<

$entral co1operative bans and primary credit societies

$ommercial 9ans

CO##ERCIAL BAN-S

$ommercial 9ans in India are broadly categorized into Scheduled $ommercial 9ans and

nscheduled $ommercial 9ans. (he Scheduled $ommercial 9ans have been listed under the

Second Schedule of the 'eserve 9an of India &ct, 68/2. (he selection measure for listing a ban

under the Second Schedule was provided in section 2+ B75 of the 'eserve 9an of India &ct,

68/2. (he modern $ommercial 9ans in India cater to the financial needs of different sectors.

(he main functions of the commercial bans comprise<

• transfer of funds


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• acceptance of deposits

• offering those deposits as loans for the establishment of industries

• ?urchase of houses, e;uipments, capital investment purposes etc.

• (he bans are allowed to act as trustees. )n account of the nowledge of the financial

maret of India the financial companies are attracted towards them to act as trustees to

tae the responsibility of the security for the financial instrument lie a debenture.

• (he Indian -overnment presently hires the commercial bans for various purposes lie ta!

collection and refunds, payment of pensions etc.

CRRENT SCENARIO

(he industry is currently in a transition phase. )n the one hand, the ?S9s, which are the mainstay

of the Indian 9aning system, are in the process of shedding their flab in terms of e!cessive

manpower, e!cessive non ?erforming &ssets B*?&sC and e!cessive governmental e;uity, while on

the other hand the private sector bans are consolidating themselves through mergers and

ac;uisitions. ?S9s, which currently account for more than 34 percent of total baning industry

assets are saddled with *?&s Ba mind1boggling 's 4/5 billion in +555C, falling revenues from

traditional sources, lac of modern technology and a massive worforce while the new private

sector bans are forging ahead and rewriting the traditional baning business model by way of

their sheer innovation and service. (he ?S9s are of course currently woring out challenging

strategies even as +5 percent of their massive employee strength has dwindled in the wae of the

successful Foluntary 'etirement Schemes BF'SC schemes. ?rivate sector 9ans have establish

internet baning, phone baning, anywhere baning, and mobile baning, debit cards, &utomatic

(eller achines B&(sC and combined various other services and integrated them into the

mainstream baning arena, while the ?S9s are still grappling with disgruntled employees in the

aftermath of successful F'S schemes. &lso, following India>s commitment to the W (o

agreement in respect of the services sector, foreign bans, including both new and the e!isting

ones, have been permitted to open up to 6+ branches a year with effect from 6884188 as against

the earlier sti#lation o" 8 .!an)he*.


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CO.OPERATI,E BAN-S:.

$o1operative bans are small1sized units organized in the co1operative sector which operate both

in urban and non1urban centers. (hese bans are traditionally centered on communities, localities

and wor place groups and they essentially lend to small borrowers and businesses.

(he term rban $o1operative 9ans B$9sC, though not formally defined, refers to primary

cooperative bans located in urban and semi1urban areas. (hese bans, until 6887, could only

lend for non1agricultural purposes.

@owever, today this limitation is no longer prevalent. While the co1operative bans in rural areas

mainly finance agricultural based activities including farming, cattle, mil, hatchery, personal

finance, et cetera, along with some small scale industries and self1employment driven activities,

the co1operative bans in urban areas mainly finance various categories of people for self1

employment, industries, small scale units and home finance.

$o operative 9ans in India are registered under the $o1operative Societies &ct. (he cooperative

ban is also regulated by the '9I. (hey are governed by the 9aning 'egulations &ct 6828 and

9aning %aws B$o1operative SocietiesC &ct, 6870.

(hese bans provide most services such as savings and current accounts, safe deposit locers,

loan or mortgages to private and business customers. :or middle class users, for whom a ban is

where they can save their money, facilities lie Internet baning or phone baning is not very

important.

$o1operative bans function on the basis of Ano1profit no1lossA. $o1operative bans, as a principle,

do not pursue the goal of profit ma!imization. (herefore, these bans do not focus on offering

more than the basic baning services. So, co1operative bans finance small borrowers in industrial

and trade sectors, besides professional and salary classes.

$o1operative bans differ from stocholder bans by their organization, their goals, their values

and their governance. In most countries, they are supervised and controlled by baning authorities

and have to respect prudential baning regulations, which put them at a level playing field with

stocholder bans. "epending on countries, this control and supervision can be implemented

directly by state entities or delegated to a co1operative federation or central body.

#ven if their organizational rules can vary according to their respective national legislations, co1

operative bans share common features


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M C"stoer&one! ent*t*es% in a co1operative ban, the needs of the customers meet the needs of

the owners, as co1operative ban members are both. &s a conse;uence, the first aim of a co1

operative ban is not to ma!imize profit but to provide the best possible products and services to

its members. Some co1operative bans only operate with their members but most of them also

admit non1member clients to benefit from their baning and financial services.

M Deocrat*c eber control% co1operative bans are owned and controlled by their members,

who democratically elect the board of directors. embers usually have e;ual voting rights,

according to the co1operative principle of “one person, one vote”.

M +rof*t allocat*on% in a co1operative ban, a significant part of the yearly profit, benefits or

surplus is usually allocated to constitute reserves. & part of this profit can also be distributed to the

co1operative members, with legal or statutory limitations in most cases. ?rofit is usually allocated

to members either through a patronage dividend, which is related to the use of the co1operatives

products and services by each member, or through an interest or a dividend, which is related to the

number of shares subscribed by each member.

$o1operative bans are deeply rooted inside local areas and communities. (hey are involved in

local development and contribute to the sustainable development of their communities, as their

members and management board usually belong to the communities in which they e!ercise their

activities. 9y increasing baning access in areas or marets where other bans are less present D

S#s, farmers in rural areas, middle or low income households in urban areas 1 co1operative

bans reduce baning e!clusion and foster the economic ability of millions of people. (hey play

an influential role on the economic growth in the countries in which they wor in and increase the

efficiency of the international financial system. (heir specific form of enterprise, relying on the

above1mentioned principles of organization, has proven successful both in developed and

developing countries.

(he $o operative bans in India started functioning almost 655 years ago. (he $ooperative ban

is an important constituent of the Indian financial system judging by the role assigned to co

operative, the e!pectations the co operative is supposed to fulfill, their number, and the number of

offices the cooperative ban operate (hough the co operative movement originated in the West,

but the importance of such bans have assumed in India is rarely paralleled anywhere else in the

world.

(he cooperative bans in India play an important role even today in rural financing the 9usinesses

of cooperative ban in the urban areas also have increased phenomenally in recent years due to

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the sharp increase in the number of primary co1operative bans.

$o operative 9ans in India are registered under the $o1operative Societies &ct. (he cooperative

ban is also regulated by the '9I. (hey are governed by the 9aning 'egulations &ct 6828 and

9aning %aws B$o1operative SocietiesC &ct, 6870.

Coo,erat*-e ban$s *n In!*a f*nance r"ral areas "n!er%

:arming

$attle

il

@atchery

?ersonal finance

Coo,erat*-e ban$s *n In!*a f*nance "rban areas "n!er%

• Self1employment

• Industries

•Small scale units

• @ome finance

• $onsumer finance

• ?ersonal finance

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Soe facts abo"t Coo,erat*-e ban$s *n In!*a

• Some cooperative bans in India are more forward than many of the state and private sector

bans.

• &ccording to *&:$9 the total deposits = landings of $ooperative 9ans in India is much

more than )ld ?rivate Sector 9ans = also the *ew ?rivate Sector 9ans.

• (his e!ponential growth of $o operative 9ans in India is attributed mainly to their much

better local reach, personal interaction with customers, and their ability to catch the nerve of the

local clientele.

(here are two main categories of the co1operative bans.

(a)Sort ter len!*n or*ente! co&o,erat*-e #an$s 1 within this category there are

three sub categories of bans viz state co1operative bans, "istrict co1operative bans and

?rimary &gricultural co1operative societies.

(b) Lon ter len!*n or*ente! co&o,erat*-e #an$s 1 within the second category there

are land development bans at three levels state level, district level and village level.

Te coo,erat*on ban$*n str"ct"re *s !*-*!e! *nto follo*n f*-e cateor*es

6. ?rimary urban cooperative bans

+. ?rimary agriculture credit societies

/. "istrict central cooperation ban

2. State cooperative ban

0. %and development ban


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Pim+y ub+0 1oo2e+ti3e b+0*:

(he term rban $o1operative 9ans B$9sC, though not formally defined, refers to primary

cooperative bans located in urban and semi1urban areas. (hese bans, till 6887, were allowed to

lend money only for non1agricultural purposes. (his distinction does not hold today. (hese bans

were traditionally centered around communities, localities wor place groups. (hey essentially

lent to small borrowers and businesses. (oday, their scope of operations has widened

considerably.

Pim+y +4i1u5tue 1edit !o1ietie!:

&griculture continues to be the most vital sector of Indian economy, contributing a major share to

our national income and also providing livelihood to the majority of our population. & strong baseof agriculture growth is must for the overall economic development in a country lie India. So to

help the farmers and mae the financial help for them these cooperative societies are established

.these societies finance farmers not only for their short term re;uirements Buse of improved seeds,

fertilizers, insecticides, etcCbut for medium and long termBirrigation and land development

activitiesCactivities also.

Di!ti1t 1e0t+5 1oo2e+tio0 b+0*:

(hese are the principal co1operative societies in the districts, in a state, the primary object of

which is financing other co1operatives, particularly the ?$&s in the district. (he "$$9s came in

to e!istence after the passing of $o1operative Societies &ct686+. (hese institutions also undertae

baning business.

(hese institutions act as 9alancing $enters of :inance at the district level. (hey provide the short

term and medium term credit to the agriculturists. (hey also supervise the ?$&s in the districts.

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20/72

St+te 1oo2e+ti3e b+0*:

(he state cooperative ban is the ape! body of cooperative ban in any state. (he long1term

cooperative credit structure has two tiers in many states with ?rimary $ooperative &griculture and

'ural "evelopment 9ans B?$&'"9C at the primary level and State $ooperative &griculture and'ural "evelopment 9an at the state level. under the 9aning 'egulation &ct 6828, only State

$ooperative &pe! 9ans, "istrict $entral $ooperative 9ans and select rban $redit

$ooperatives are ;ualified to be called as bans in the cooperative sector

L+0d de3e5o2me0t b+0*:

(he long term credit needs of the agricultural sector are met by another type of co1operative

institutions nown as %and "evelopment 9ans. (he %and "evelopment 9ans meet the

re;uirements of the farmers for developmental purposes viz., provision of e;uipment lie pump1

sets, tractors and machinery and land improvement in the form of leveling, bundling, reclamation

of land, fencing, sining of new wells and repairs to old wells, %oans are granted on the security

of mortgage of immovable property of the farmers.

$redit cooperatives are the oldest and most numerous of all the types of cooperatives in India. (he

cooperative credit institutions in the country may be broadly classified into urban creditcooperatives and rural credit cooperatives. (here are about +585 urban credit cooperatives and

these societies together constitute for about 65 percent of the aggregate baning business and

therefore regarded as an important segment of the baning system. (he urban credit cooperatives

are also popularly nown as rban $ooperative 9ans. (he rural credit cooperatives may be

further divided into short1term credit cooperatives and long1term credit cooperatives. With regard

to short1term credit cooperatives, at the grass1root level there are around 8+,555 ?rimary

&gricultural $redit Societies B?&$SC dealing directly with the individual borrowers. &t the central

level Bdistrict levelC "istrict $entral $ooperative 9ans B"$$9C function as a lin between

primary societies and State $ooperative &pe! 9ans BS$9C.


21/72

I*(')"$(I)*

()

(@# ?')G#$(


22/72

$AT IS CREDIT FACILITY7

nlie personal loans Bwhere people borrowing the funds and the collateral are not liely to

changeC, loans in the world of business re;uire additional fle!ibility in order to meet the needs of

the business as well as satisfy the re;uirement of the lender. &ccomplishing this seemingly

difficult tas is done by using a credit facility which is an overall credit line that can be broen

into multiple credit lines and collateral.

(he term credit can be understood by giving light on following points<

CREDIT 8LOANS AND AD,ANCES9

(he profit of a ban depends primarily on the utilization of its fund. 9ut 9an cannot lend its fund

fully. &s per 9aning $ompany &ct 6886 every baning company has to maintain a specified

minimum Bpresently +0JC of the total of its demand and time liabilities in the form of cash and

approved securities with '9I. (his percentage or ratio is termed Statutory %i;uid 'atio. :urther

every scheduled ban has to maintain with '9I an average daily balance, the amount of which has

not to be less than a particular percentage Bpresently 7JC of the total of its demand and time

liabilities. &s such 9an generally goes for short1term finance although a small portion of its total

deposit is invested as long term lending. 9ans allow different forms advance.

CREDIT DEPART#ENT

$" 9aning business primarily involves accepting deposits from the public and investing or

lending the same and thereby maing profit out of it. @owever, lending money is not without ris

and therefore bans mae loans and advances to farmers, traders, businessmen and industrialist

against either tangible Bland, building, stoc etc.C or intangible security. #ven then, the bans run

the ris of default in repayment. (herefore, the bans follow cautious measures while lending

money to others. (his core function of a ban is performed by the $redit "epartment of the ban.

In this case, the relationship of ban and customer is that of the creditor and debtor.

nlie personal loans where the person borrowing the funds and the collateral are not liely to

change, loans in the world of business re;uire additional fle!ibility in order to meet the needs of

the business as well as satisfy the re;uirement of the lender. &ccomplishing this seemingly

difficult tas is done by using a credit facility which is an overall credit line that can be broen

into multiple credit lines and collateral.


23/72

TYPES OF CREDITS OFFERED BY A BAN-

9ans usually provides following types of credit<

6. $&S@ $'#"I( Bhypo.C

+. $&S@ $'#"I(BpledgeC

/. %('

2. (#' %)&*

0. %#&S# :I*#*$I*-

7. S#$'#" )F#'"'&:( BS)"C

3. )(@#'S

1. CAS/ CREDIT (/0+O.)&%

$ash $redit or continuing credits are those that form continuous debits and credits up to a limit

and have and e!piration date. & service charge that is effect an interest charge is normally made as

a percentage of the value of purchases. (hese credits may be of the nature of pledged and Lor

hypothecated and bans should report these in separate heads incorporated under the main head

cash credit.

nder this arrangement a credit is sanctioned against hypothecation of the raw materials or

finished goods. (he letter of hypothecation creates a charge against the goods in favor of the 9an

but neither the ownership nor its possession is passed on to itE only a right or interest in the goods

is created in favor of the 9an and the borrower binds himself to give possession of the goods to

the ban when called upon to do so. When the possession is handed over, the charge is converted

into pledge. (his type of facility is generally given to the reputed borrowers of undoubted

integrity.

'. CAS/ CREDIT (+LEDGE)&%

nder this arrangement a cash credit is sanctioned against pledge of goods or raw materials. 9y

signing the letter of pledge, the borrower surrenders the physical possession of the goods under

the 9ans effective control as security for payment of 9an dues. (he ownership of the goods,

however, remains with the borrower. (he pledge creates an implied lien in favor of the 9an on

the underlying merchandise. In the event of failure of the borrower to honor his commitment the


24/72


25/72

T/E #ANK 2SE EIG/T 9C:S R2LE W/ILE GI7ING LOAN

6. $redit Bmust be godC

+. $apacityBability to payC

/. $apitalBmoney that going into businessC

2. $ollateralBassets that secure the loanC

0. $haracterBthe personC

7. $ommitmentBability and willingness to succeedC

3. $ash flowBcan it support business> debt and e!penseC

4. $onditionsBeconomic, finance anything that effect the businessC


26/72

LOAN AND CREDIT FACILITY

(he Godhpur central cooperative ban provided following loan and credit facilities

+ERSONAL LOAN SC/EME%&

nder this scheme the loan is provided for fulfillment of personal and family needs by taing care

of refund capacity of applicant. (he applicant can enjoy this facility by following two types1

(erm loan for ma!imum 0 years.

'enewal of $redit limit each year according to last year>s transactions.

ELIGI#ILIT0%&

"omicile of ban operation area.

whose age is between +6to 00 years.

#mployee of -overnmentL self governed, semi government, leading bans, urban

cooperative banLcourt, financial institution, education institutes etc.

(he self employed person who earns fi!ed income and files income ta! return also

having ?&* card.

)rganizer of standing committee.

LOAN; CREDIT LIMIT%&

a!imum loan amount is + lacs.

4 times of -ross onthly salary or rs.+ lacs whichever is less.

In the case of businessmanL professionals the calculation of average monthly salary is to

be done according to the I( return of past three years.

60 times of monthly salary of manager of selection committee or + lacs

Whichever is less

INTEREST RATE%&

&ccording to the decision taen by ban the rate of interest is 6+J.


27/72

RECO7ER0 O5 LOAN%&

a!imum 0ve years, in the case of employee 0ve years or date of retirement whichever is

earlier.

(he advance che;ue is taen according to #I installments of other bans.

5OR SEC2RIT0 O5 LOAN%&

(he ban re;uires the guaranty of + persons having creditability of loan amount who are

recognized by ban.

(he collateral security is also accepted by ban in the case of non remunerated and

employer who having loan of more than 05555 and lae of contract of direct recovery.

DOC2MENTS RE


28/72

LOAN 5OR +2RC/ASE OR CONSTR2CTION%&

nder this scheme an applicant may apply for loan related to purchase of a plot, construction of a

building, purchase and repairs of building.

ELIGI#ILIT0%&

"omicile of ban operation area whose age is between +6to 00 years.




having ?&* card.

Standing committee admin

LOAN CREDIT LI#IT:.

a!imum loan amount is 60 lacs for loan related to purchase of a plot, construction of a building, purchase and repairs of building.

INTEREST RATE%&

(he interest rate is 65.05J in the case of normal purchase or repairs of plot and in the case of

purchase or repairs of commercial building, shops the rate of interest is 62J.

TIME +ERIOD O5 LOAN%&

(his loan can be taen a!imum for 60 years.



29/72


recognized by ban.

DOC2MENTS RE


30/72

7E/ICLE LOAN (for ,ersonal "se)%&

nder this scheme the loan is to be given for four wheeler Bcar, jeep etc.C for personal use only.

ELI%IBILITY:.





having ?&* card.

Standing committee admin

LOAN; CREDIT LIMIT%&

(he loan provides up to 0 lacs for purchasing of four wheeler for personal use.

INTEREST RATE:.

(he rate of interest for four wheeler is 6+J.

TI#E PERIOD OF T$E LOAN:.

(he time limit set by the ban authority for this ind of loan is ma!imum 0 years.

FOR SECRITY OF LOAN:.


recognized by ban.


31/72

DOC2MENTS RE


32/72



recognized by ban.

DOC#ENTS RE;IRED FRO# APPLICANT:.

?hoto of applicant and his legal license.

Fehicle ;uotation and income statement of applicant.

:i!ed assets for mortgage.

(wo guarantors with their income statement and photo.

(he nominal membership fee and deposit amount.

$O#E LOAN:.

(his loan scheme is for<

?urchase or construction of plotLbuilding for the persons having regular income and loan

for tae over the current loan account for different financial institutes.

$onstruction or purchase of building for $ommercial use, business use, shops,

showrooms, warehouse etc.

'epairing, e!pansion, and renovation of @omeL commercial building.

ELI%IBILITY:.


who wants to purchaseL construct the building or house within the district.



9usiness man who fills income ta! return for last / years.

*ormally the age limit for applicant is 05 years but it can be e!tent up to 00 years in

certain special cases.


33/72

LOAN CREDIT LI#IT:.

(he loan limit is up to 60 laes.

's. + laes in the case of repairs.

(he margin would be 60J up to + laes and +0J in the case of above + laes

(here should be no margin in fee cost in the case of plot replacement and tere should be

repayment in / installments after fully utilization of his contribution of loan in the case

of construction.

INTEREST RATE:.

FI


34/72

DOC#ENTS RE;IRED FRO# APPLICANT%&

%oan application form.

?hoto of applicant and co applicant.

$opy of document of plot which is to be purchased or constructed.

$onstruction approval from office in the case of construction.

(he cost estimation and approved map of building going to be constructed.

Salary statement in case of salaried applicant and income ta! return of last / years in case

of non salaried applicant.

"omicile certificate of applicant.

Income statement and identity card of two gaunter etc.

E


35/72

LOAN CREDIT LI#IT:.

(he ma!imum limit of loan is 's. 0.55 laes for studie in India 65.55 laes for studies in abroad..

05 times of the gross monthly salary of the applicant or 's. 65.55 laes whichever is less ensuring

/0J tae home salary by the loanee after payment of installment of loan.

INTEREST RATE:.

(he rate of interest on such loan is 6+J.

TI#E PERIOD:.

0 years after the borrower gets employment or one year after completion of course whichever is

earlier.

DOC#ENTS RE;IRED FRO# APPLICANT:.

&ttested copies of documents for proof of ageLdate of birth and proof of residential

address.

?assport size photo of the applicant, co1obligates and guarantors.

$opy of mar sheetsLdegree certificates of previous academic ;ualifications.

Income proofLlatest income ta! return of parentsLco1obligates, guarantors. Bif anyC

"etails of collateral security along with valuation certificate of -ovt. approved valuer Bif

anyC.

"etailsLstatements of 9an accounts held by the student applicantLco1

obligateBsCLguarantors Bif anyC for the last si! months.

$opy of ?assportLFisa, cost of air fare Bdocumentary detailC in case of studies abroad.

CO##ERCIALOR-IN% CAPITAL #ORT%A%ECREDIT ONPLED%E

ELI%IBILITY:.

(he eligible candidates who can apply for such loan are private firm, commercial, partnership

firm.

A#ONT OF LOAN:.

(he amount of loan that can apply by eligible candidates is ma!imum +0 lacs.

RATE OF INTEREST:.


36/72

(he rate of interest which is charge by ban is 6/J.

TI#E PERIOD:.

(he time period for loan is not fi! but renewal of time period can held according to transaction

made in between the month of Guly to Gune of previous year.

Mar*n%&

)n mortgage P25J

)n pledge P+0J

OT/ER LOAN 5ACILIT0

&ll the loan schemes we have been seen above shows that cooperative ban provided all ind of

loans at nominal rate of interest. (he cooperative ban provides loan only to hit>s members hence

if a person wants loan from that ban he has to

(he 'opar cooperative ban provides some other ind of loans also lie

%oan for Self employment BQ62JC.

%oan for farm sector BQ6/JC,

%oan for cooperative societyLmareting society BQ62JC,

$omputer loan BQ4JC,

%oan for farm sector BQ6/JC

%oan for non farm sector BQ62JC

risha mitra cooperative credit BQ3JC

$ooperative societyLmareting society credit limit BQ 62JC

*ational saving certificateL isaan vias patra BQ 6+JC

*ational saving certificateL isaan vias patra Bfor staffCBQ4JC

%oan to ban staff for computer BQ6+JC

&griculture loan Bup to 05555L1C BQ6+JC

*on agriculture loan Bup to 05555L1C BQ6/JC etc.


37/72

T/E RE+ORT O5 +ROGRESS IN LOAN AMO2NT AND

5INANCIAL S2++ORT TO WOMEN SEL5 EM+LO0MENT

0EAR GRO2+ MEM#ERS AMO2NT

(lac$s)

+55/152 1> 1>? '.>@

+552150 8? 8?6 4@.'1

+550157 144 14?> '?.?8

+557153 161 1848 4'.>8

+553154 '> '4>4 >4.34

+554158 '@ 3'8 14>.86

+558165 1>3 1?3@ 1@.?

+565166 '1' ''14 148

+56616+ 1>4 1?4@ 166.4@

+56+16/ 1?1 1??' 18>.'4


38/72

(he 9an has variety of credit schemes specially suitable to individuals based on the *eeds and

personal repayment capacity. (he chart shows the increments in loan amount given by ban to

women self employment groups. (he amount of loan increases and the no. of groups also increase

due to fait and reasonable rate of interest on loan provided by ban.


39/72

(he recovery following table shows the total amount of loan outstanding<

0EAR LOAN O2TSTANDING

(ao"nt *n to"san!s)

+555156 7//0.60

+55615+ 7/58.62

+55+15/ 468+.20

+55/152 8+30.5+

+552150 66860.58

+550157 620//.+7

+557153 62467.58

+553154 68303.56

+554158 +507/.50

+558165 +/476./4

(he chart shows the total amount of loan which will have recovere by ban,the increament shows

the that trend to tae loan from cooperative ban increses ,it was a little bit constant in year +550

and +557 but then increase which shows the interest of individual in taing loan from cooperative

ban.


40/72

(he loan amount provided by ban increase as compare to last 2 years, the interest of different

sectors in taing loan from cooperative ban can be seen in following table<

Sectors '@11&1'

(ao"nt *n la$es)

'@1'&1

(ao"nt *n la$es)

&griculture 67+.+6 235.84

*on agriculture 786./7 458.33

other 462.+4 65+8.05

(he chart shows the increment in the loans provided by bans and it is clear that the ban not only

focus on agriculture loan but on other loan also which includes loans for Self employment,

commercialLworing capital mortgage etc. it shows cooperative ban is not bounded in providingloan in agriculture area only and can be a good source of fulfill short and medium term

re;uirement of finance in rural area.


41/72


42/72


43/72

Nom+5 me+!ue! to be +do2ted by b+0* o=1i+5! (oe1o3ey o( due!

Whenever, a borrower commits breach of agreement in respect of repayment of schedule of the

amount of loans with interest etc., we safely say that there are A)F#'"#S A in the %oan

&ccount. )nce the %oan &Lc is an overdue &Lc i.e. the borrower has committed default in

repayment of loan amount as per the dates specified in the &greement, then the 9aner has

necessarily to adopt measures which will result into recovery of overdue amounts.

Whenever the borrower commits default in repayment of loan amount, immediately the ban

should serve A ?reliminary *oticesA on the principal borrower and the sureties advising them to

repay the amount of overdue with interest etc. Such ?reliminary *otices should invariably

mention information which is of factual nature relating to

BiC &mount of loan sanctioned.

BiiC "ate of sanction of loan.

BiiiC *ames of the sureties.

BivC&mount of the loan sanctioned.

BvC &mount of over dues with interest etc. on a particular date.

&ddition to the above it must also be communicated the ban shall proceed to tae further action

against the principal borrower and sureties in case of failure to repay the amount of loanLover

dues. It has been often said A&A stitch in time saves nineA. (hus, the baner must be vigilant, right

from the disbursement of loan amount till the recovery of the entire loan amount. (here should be

effective supervision over the amount of loan sanctioned.

Reco-er tro" salar ; aes

&fter issue of such preliminary notices, there may be a positive response from the principal

borrower and he may repay the amount of defaulted loan installment, or the principal borrower

and the surety may approach the authorities of the ban and may e!plain their genuine difficulties

regarding repayment of loan amount or there may offer to repay the dues partially. (here may be

cases where there is no response from the borrower L sureties.

With this bacground, the ban should precede further to devise such steps which will result in

recovery of dues. nder various State $ooperative &cts Be.g. Section 28 of .$.S. &ct 6875C it

has been provided that if a member of a society. L9an authorizes his #mployer to mae deduction


44/72

from his salaryLwages, in order to satisfy the claims of the societyL9an, and then on receipt of

re;uisition letter from the concerned 9an, the #mployer shall proceed to mae deduction from

the salaryLwages from the concerned employeeLmember to meet the claims of the 9an. (he

#mployer must remit the amount so deducted immediately to the 9an concerned.

*on1compliance of these provisions under the State $ooperative &ct shall be constructed as

AoffenceA and further $ivil and $riminal action can be instituted against such #rring #mployer.

In addition to the above, there are provisions under the Indian ?ayment of Wages &ct 68/7 Bvide

Section 3B+C and Section 3B+C BjC which stipulates that the #mployer shall mae deduction from

the salaryLwages of an #mployee to satisfy the claims of the $ooperative Society L 9ans.

Settleent of D*s,"tes

9ased on the noting of the anagement, the 9oard of "irectors may pass a 'esolution

authorizing the anagerLor such other officer to file H"ispute &pplication” in the $o1op. $ourt

against the defaulting principal borrower and his sureties. Section 86 of the $S &ct empowers

the co1operative courts to decide on R"isputes> and Section 80 further empowers the court to

direct attachment of property before announcement of the award which is called &ttachment

before award or order and interlocutory order if it is satisfied that the parties to the dispute are

liely to removeL dispose of whole or part of his property. Section 80 similarly empowers the

'egistrar L )fficer authorized by him to tae the above measures in case of disputes referred to

him.

(he prayer clause normally consists of following important points 1

• (he opponents may be held responsible to repay the entire amount of loan with interest.

• If the opponents fail to pay the amount of loan, the disputant may be entitled to attach the

movable and immovable property of the opponents.

• (he disputant may be entitled to sell the attached property and recover the amount due

from the opponents.

• &ny other orders to meet the ends of justice.


45/72

PROCEDRE TO BE FOLLOED:

nder Section 6/B+C of the &ct, a 75 days> notice has to be served by the ban on the borrower

with a re;uest to discharge the loan liability (he notice must contain details of<

amount payable by the borrowerE

Security interest intended to be enforced.

)n receipt of notice, if the borrower maes a representation or raises an

objection, the secured creditor must consider such representation or objection.

If the secured creditor comes to the conclusion that the said representation

or objection is not acceptable or tenable, he must communicate the reasons for non1acceptance

of representation or objection within one wee of receipt of the above.

odes of recovery available Bs.6/B2CC

If borrower fails to discharge the liability, secured creditor has the following options

(ae possession of secured asset

(ae over the management of the business of the borrower including

(he right to transfer by way of lease, sale, assignment, etc.

(he said rights must be e!ercised only where substantial part of business of

borrower is held as security for the debt.

&ppoint a manager to manage the security asset taen over.

Issue notice to persons who ac;uired the secured asset from the borrower or

from whom money is due.

(he $B chief metropolitan magistrateCor "

B"istrict magistrateC is empowered even to use force necessary for taing steps towards securing

compliance


46/72

RI%$T TO APPEAL:

nder the &ct, the borrower can appeal before "'( by paying the fee within 20 days BS.63C. (he

appeal can be entertained only when the borrower deposits fifty per cent of the amounts claimed

in the notice.

"'( can consider the legality of action taen by the ban. If it finds it wrongful, it can restore the

business or management to the borrower. If, however, the "'( finds that the action taen by the

ban is as per the provisions of the law, then the banL secured creditor can proceed to tae action

under Section 6/B2C of the &ct. (he application has to be disposed of by the "'( within 75 days

and if it>s pending for four months, either the ban or the borrower can appeal to the &ppellate

(ribunal for e!peditious (ribunal.

&n application for recovery of balance amount, if any, by secured creditor can be presented to the

debt recovery tribunal by the authorized officer B&)Cof the ban or can be sent by registered post

addressed to the registrar of debt recovery tribunal.

• &ppeal to the appellate tribunal under Section 64<

• ?ersons aggrieved by the order of "'( to prefer an application before the appellate tribunal

within /5 days.

• (he appellate tribunal is vested with power to reduce the deposit amount to not less than +0

percent.


47/72

lowing table shows the comparative analysis of recovered and overdue loan of ban<

ear Total cla*(*n

la$es)

reco-er (*n

la$es)

Reco-er *n

,ercentae

+554158 ++025.+5 68638./+ 40.54+558165 632+3.50 8442.58 07.3+

(he table shows that recovery of loan reduces as compare to last year. @ence the ban needs to

try to recover the very old and overdue loans. :or the recovery of over dues ban formed a flying

s;uad which starts woring from 415/1+565.

DEBT FOR%I,EN BY BAN-

&griculture remains the predominant sector in terms of employment and livelihood with more

than half of India>s worforce engaged in it as the principal occupation. @owever, &griculture

remains the predominant sector in terms of employment and livelihood with more than half of

India>s worforce engaged in it as the principal occupation In addition, the rural poverty is getting

concentrated in agricultural labor and artisanal households which account for over 25J of the

rural poor. 'ecent trends that have raised concern regarding food security, farmers> income, and

poverty include <

BiC widening economic disparities between irrigated and rain1fed areas,

BiiC increased vulnerability to world commodity price volatility,


48/72

BiiiC inefficient use of available technology and inputs with low crop productivity,

BivC degradation of natural resource base,

BvC rapid decline in groundwater, with particularly adverse impact on small and marginal

farmers, and

BviCIncreased non1agricultural demand for land and water. &ggravation in social distress as a

cumulative impact of the above reflected in an upsurge in farmers> suicides.

With taen above factors in consideration Godhpur central cooperative ban and +53 rural services

cooperative committees Bwor under this banC forgone debt amount of some members which can

be seen as follows<

T,es of ebers No. of ebers Ao"nt (*n la$es)

marginal farmers 6242 640.33

Small farmers /02/ 260.38

)thers 68450 +00+.06

:rom the above claim an amount of 'S. 765.07 laes received from marginal and small farmers

and 'S. 68++.0+ laes from others have been received on 71521+565.


49/72

Ca,ter '

RESEARC/ MET/EDOLOG0


50/72

RESEARC$ #ET$EDOLO%Y

TITLE OF STDY: .

(itle of study is “loans an! cre!*t fac*l*t of !*fferent ban$B

(he entire bans generally give loan for short and medium term re;uirement in both rural and

urban sectors.

DRATION OF TRAININ%:.

"uration of project is 20 days from 68th Gune to 2th august. (hough the time available for the study

is too less but efforts to the fullest capacity have been put into this result for efficient and effective

analysis of the data.

FOR#AT OF PROJECT REPORT:.

(he report is e!ploratory and descriptive in nature.

(his report is going to describe various loans provided by different bans hence it is a descriptive

in nature but it suggests some important points to improve the services of the ban so it is

e!ploratory in nature also.

SORCE OF PRI#ARY AND SECONDRY DATA

:or the purpose of project data is very much re;uired which wors as a food for process which

will ultimately give output in the form of information. So before mentioning the source of data for

the project I would lie to mention that what type of data I have collected for the purpose of

project and what it is e!actly.

PRI#ARY DATA:.

?rimary data is basically the live data which I collected on field while taling with the #mployees.

In some cases I got no response from their side and then on the basis of my previous #!periences

I filled those fields.

SORCE:

ain source for the primary data for the project was my face1to1face conversation which I got by

the employees or sometimes filled myself on the basis of discussion with the employees.


51/72

SECONDRY DATA:.

Secondary data is already published data. It is the data which is funded or collected by someone

else before and presently used by further research wor. Secondary data for the base of the project

I collected from annual report of ban, ban pamphlets and internet etc.

SCOPE OF T$E STDY:.

#ach and every project study along with its certain objectives also has scope for future. &nd this

scope in future gives to new researches a new need to research a new project with a new scope.

Scope of the study not only consist one or two future business plan but sometime it also gives idea

about a new business which becomes much more profitable for the researches then the older one.

Te sco,e of t*s researc *s as follos%

1. 'esearch study could give an idea of networ e!pansion for capturing more maret and

customer with better services and lower cost without compromising with ;uality.

'. In future customer re;uirement could add with the product and services for getting the edge

over competitors.

. "ifferent parameters could be used for the purpose of new products with e!tra benefits which

are re;uired by the customers.

3. :actors which are responsible for the performance of the ban can also be used for the

modification of the strategy and product for being more profitable.


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C/A+TER&

"ata &nalysis and Interpretation


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6."ifferent types of loan taen by customers from ?S$9

(&9%#13

%oan type respondents J

@ouse loan 65 +5J

?ersonal loan +5 25J

$onsumer loan 65 67J

#ducational loan 0 65J

Fehicle loan 0 65J

Interpretation1

:rom the total number of respondent +5J people have taen house loan bz the interest rate is

reasonable than the other bans.25J people have taen personal loan people to fulfill their basic

needs .67J of people have taen consumer loan to buy consumer durables such as tv,freeze,&$

.only 2J of people have taen vehicle loan. ost of people have taen personal loan than other

types of loans


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+ .&mount of loan

(&9%#14

%oan amount respondent J

%ess than +o,ooo 0 65J

+5,555105,555 6+ +2J

05,55516lah 0 65J

ore than 6 lac +4 07J

Interpretation1

:rom the total no of people 0 people have taen loan less than +5555 ,they said that they re;uire

loan to fulfill their short term financial needs in emergency.6+ people have taen loan between

amounts +5555105555 bz they to fulfill their needs related to lu!ury thing such as (F, freeze.

ostly people have taen loan more than6 lac no of respondent is +4 which is more than other

conditions, most of people in this category have taen education loans and vehicle loans. )nly 0

people have taen loan from the amount 0555516 lah, respondent in this category have taen +

wheeler vehicle loan


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/. (ime period of loan

(&9%#18

(ime period *o. ofrespondent

J

%ess than 6 year 68 /4J

6 to / year 67 /+J

ore than / years 60 /5J

I0te2et+tio0.

:rom the total no of respondent /5J people have taen loan for the time period more than / years

to fulfill their long term funds re;uirements, most of people among them have taen house loan

,educational loan./+Jpeople have taen loan from the time period from 6 year to / year i. e

medium term loan . /4J people have taen loan less than 6 year, they said that they re;uire it to

fulfill their short fund re;uirements.


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0. "ifferent number of times loan taen by customer

(&9%#166

*o of times loan taen *o of respondent J

)nly once 62 +4J

6 1/ times +2 0+J

ore than / times 6+ +2J

Interpretation1

+4Jpeople have taen loan only once bLz they have taen long term loan i.e. more than / years

and acc to rule they have to paybac that loan first than they can tae another loan.0+J people

have taen loan 6 to / times bLz they have taen loan for short term fund re;uirements such as t v,

freeze, ac, vehicle .+2Jpeople have taen loan more than three times bLz they have taen loan less

than +55555 and they can easily repay bac it and can apply for another loan easily


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7. 'eason behind preference to tae loan

(&9%#16+

Reason for ta$*n loan No of res,on!ent J

'easonable interest rate 60 /5J

ore schemes +5 25J

#asy payments 65 +5J

&ny other 0 65J

I0te2et+tio0.

+5J people said that the ban provide a easy repayment for loans that>s why they have prefer this

ban than other bans .65Jpeople have other reasons for their preference such as -ood service

delivery by employees. /5J respondent said that the interest rate is reasonable than other bans

and rate of interest is also different acc to the amount of loan taen.25J said that this ban offers

different types of schemes under different type of loans


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8. $ustomer satisfaction towards loan services

(&9%#160

'#S?)*SE *o of respondent J

yes /+ 72J

*o 4 67J

$an>t say 65 +5J

I0te2et+tio0

&bove table reveal that /+ satisfied with the services of the ban bLz they have easy repayments

and also provide a reasonable interest rate than other bans and employees behavior towards

customer is good .only 4 people from the total number of respondent are not satisfied with the

loan services bLz they have faced many problems in their loan sanction .the reason behind this is

that they have not proper documents to tae the loan. +5J of people have not responded about it.


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65.'an given by customer to ban technology

(&9%#167

RANK *o of respondent J

good +4 07J

&verage +5 25J

poor + 2J

I0te2et+tio0.

:rom the total no of people 07J people have said that the this ban is woring well than other

bans bLz it uses latest technology in their branches than other public bans. It has also given the

best performance award in +56+ by nabard.25J people said that this ban have average

performance bLz most of this ban branches outside the $handigarh are not up to dated they are

still using manual based systems for their woring which causes many problems in delivering

services. only 2J people e!perienced that the ban have poor performance bLz even ban is using

technology in most of its branches but the employees in these branches don>t have proper

technical sills.


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66.#!perience of the customer towards customer services of the ban

(&9%#163

response *o of respondent J

e!cellent 62 +4J

-ood +7 0+J

&verage 4 67J

poor + 2J

I0te2et+tio0:

&bove table reveal that from the total no of respondent+4Jpeople are properly satisfied with the

customer services of the ban bLz acc. to them they are treated very well at this ban and they

said that employees are very well behaved towards customers and they also give them re;uired

information about the services of the ban .0+J people ban e!perienced that this ban have

good customer services.+5J are in favors that the ban have an average level of customer

services bLz in case of rural area branches there is a lac of interaction bLw the customer and ban

employees bLz of more burden of wor .in rural areas most of branches are not $9S they to do

manual wor that>s why they not so much time to interact with customer. )nly 2J people find the

services poor bLz they thin that govt. bans don>t interact well with their customer as the private

sector bans interact. (hey also said that there is no online help services for the customers by this

ban


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12.Customer pre/erence o ta0e loan in /uture /rom ,%C

*AL&1

response No o/

respondent

)es 2

%ometimes 24

no 2

Inter,retat*on&

&bove table shows that 0+J of respondent will prefer ?S$9 to tae loan in future bLz their

e!perience with this ban is good and they are properly satisfied with their services such as

reasonable interest rate, easy repayments and good customer services than other bans.24J of

respondent have said that in future ,if they re;uire, they can also prefer other bans in order to

have a e!perience of services of other bans but their first preference will be ?S$9. )nly +J

people don>t want to tae loan from again bLz they are not satisfied with the services .they said

that ban have taen more time in processing the loan .and if you have taen loan from any other

ban ?S$9 will not pass your loan.


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13.Customer re/erence leel to other to5ards ,%C

*AL&16

Inter,retat*on&

&bove table shows that 0+J of total respondent have properly satisfied with the services of this

ban and they always refer this ban to othetrs especially people from rural areas bLz ?S$9 is

mainly devloped for the improvement of rural area.(hey provides different type of loans on

reasonable rate of interest which is easy for a comman person to pay.25J of people said that they

will some time refer it to others bLz other people have different baning re;uirments such as

online baning but in the case of ?S$9 its not available.4J of people don>t want to refer this

bans to others acc to them all ban branches are not up to dated properly and there is also lac of

technological sills amoung the employees that>s why their woring is slow bLz of lac of

training.

re/erence No o/

respondent

7

al5ays 2 827

sometimes 29 497

neer 4 7


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Ca,ter 3

LIMITATIONS AND CONCL2SION


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LIMITATIONS%&

(he rate of interest may vary according to maret environment.

(hese figures are according to publish in annual report and according to employees of Godhpur

central cooperative ban.

(he report is according to my perception only and can>t be taen as final decision.

• (his study only relates to one organization, so conclusions drawn may not be finding its utility

in all the other bans.

• #ven the employees of the ban hesitated to give the complete = accurate data.

RECOMMENDATION AND S2GGESTIONS%

1. ore mass awareness campaigns should be organized in order to enhance maret share of

ban. So 9an should concentrate on its advertisement itself.

2. 9an should refocus on its interest rate as responded by people. ?eriodic review of the interest

rate should be done.

3. (here should be computerized system in the ban as it will reduce the time wastage of manual

wor and will lead to the better performance of the ban.

4. (raining of the employees should be there to meet the needs of the time.

8. ?roper posting of the staff should be done.

. $ustomer>s satisfaction must be the top priority of the ban.

:. a!imum practical e!posure should be provided to the job trainees so that they may handle

the various en;uiries of customer effectively.

. $ommunication gap within the ban and with the head1office should be reduced.


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CONCLSION

(he study concludes that $ooperative 9an, which was established for mainly for the

service of rural sector, still is not on the line to its goal. It is lacing at various elements,

particularly at the branch levels, which reveals the edge of other public and private sector bans

over the $ooperative ban, the lines at which the ban is lacing behind. Indiscipline and lac of

commitment in these bans mae people>s trust in the cooperative sector a casualty.

Some of the co1operative bans are ;uite forward looing and have developed sufficient

core competencies to challenge state and private sector bans. 9ut there is shortage of staff in this

ban and the traditional manual baning which is affecting the business and customer services.

?eople are still unaware of the services provided by the $ooperative 9ans due to lac of

advertisement.

(here is a need to analyze and pic up early warning signals. & change is needed today in

the cooperative bans which is built on confidence in human capital 1 the most important of all

resources 1 in commitment, creativity and innovation brought about by proactive management,

membership and employees. (he ability to capture nowledge and wisdom gives cooperative

bans their competitive advantage. & prere;uisite is that participants from all parts of a

cooperative organization now and understand its purpose, core values and visions.

In this way, by eeping in mind the certain shortcomings, appropriate measures to

overcome them should be adopted. So that the real purpose of the $ooperative ban must be

realized with a competitive advantage and the gap between the customer perception of the

$ooperative 9an and the other private and public sector ban, can be reduced.


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BIBLIO%RAP$Y

Art*cals%

• &nnual report of bans.

• "ocuments provided by bans.

• Farious circulars issue by the bans.

Web S*tes%

• $cb.jodhpurQgmail.com

•www.wiipedia.com

• www.docstoc.com

• www.cooperativeban.co.u

• www.cab.org.in nowledge ban

• www.citeman.com

• www.ehow.com

• www.nabard.com

• www.rbi.org.in

mailto:[email protected]://www.wikipedia.com/http://www.docstoc.com/http://www.cooperativebank.co.uk/http://www.cab.org.in/http://www.citeman.com/http://www.ehow.com/http://www.nabard.com/http://www.rbi.org.in/mailto:[email protected]://www.wikipedia.com/http://www.docstoc.com/http://www.cooperativebank.co.uk/http://www.cab.org.in/http://www.citeman.com/http://www.ehow.com/http://www.nabard.com/http://www.rbi.org.in/


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ANNE=2RE


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Loan & Credit Facility Provided by Different Banks

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