aman mba.doc
Transcript of aman mba.doc
-
7/28/2019 aman mba.doc
1/60
ACKNOWLEDGEMENT
DECLARATION
PREFACE
NEED FOR THE STUDY
OBJECTIVES OF THE STUDY
LIMITATION OF THE STUDY
RESEARCH METHODOLOGY
DATA ANALYSIS AND INTERPRETATION
FINDINGS
SUGGESTIONS AND RECOMMENDATIONS
CONCLUSION
BIBLOGRAPHY
QUESTIONNAIRE
1
-
7/28/2019 aman mba.doc
2/60
ACKNOWLEDGEMENT
I wish to express our gratitude to Punjab State Cooperative Bank
management for giving us an opportunity to be a part of their esteem
organization and enhance our knowledge by granting permission to do our
training project under their guidance.
My sincere thanks are due to entire staff of Bharat group of college for the
co-operation during my study.
Lastly thanks not lest my acknowledge is to all my family members for
being a good of not only finance but also encouragement and constant
inspiration during my study.
2
-
7/28/2019 aman mba.doc
3/60
DECLARATION
I, GURPREET KAUR , here by declare the project undertaken by me on
NON AGRICULTURE LOANS OF COOPERATIVE BANK is my
original piece of work and is done with the total integrity to my pursue my
research objectives.
No attempt has been made to manipulate any information and it is authentic
to the best of my knowledge. All the sources of information have been duly
disclosed.
3
-
7/28/2019 aman mba.doc
4/60
PREFACE
Someone has rightly said that practical knowledge is far better than
classroom teaching. During the course of this project we actually realized
how true it is when we analyzed the Banking Industry. This project enabled
us to know about the consumers needs and competitors activities in the
real world of Banking.
The subject of my study is NON AGRICULTURE LOANS OF
COOPERATIVE BANK, for which I have studied about the NON
AGRICULTURE LOANS and collected data of the bank for the last 10
years for its relevance.
4
-
7/28/2019 aman mba.doc
5/60
WHAT IS A BANK
Bank isan institution that deals in money and its substitutes and provides
other financial services. Banks accept deposits and make loans and derive a
profit from the difference in the interest rates paid and charged,
respectively.
A bank is one that accepts deposits from public and lends money.
"Bank collects money from those who have it to spare or who are
saving it out of their income, and
It lends this money to those who require it.
This definition brings out the two important functions of a banker, namely,
acceptance of deposits and lending. Thus
"A bank is a commercial establishment - a dealer in debts which aims at
earning profit by accepting deposits from public, which are repayable on
demand or otherwise, through cheques, drafts or otherwise; and which are
used for lending or investment."
5
-
7/28/2019 aman mba.doc
6/60
HISTORY OF INDIAN BANKING
Indian banking system, over the years has gone through various phases after
establishment of Reserve Bank of India in 1935 during the British Rule, to
function as Central Bank of the country. Earlier to the creation of RBI, the
imperial Bank of India was looking after the central bank functions. In
1954, the All India Rural Credit Survey Committee submitted its report
recommending creation of a strong, integrated. State-partnered commercial
banking institution with effective machinery of branches spread all over the
country. The recommendation of this committee led to the establishment of
first Public Sector Bank in the name of State Bank of India on July 1, 1955
by acquiring the substantial part of share capital by RBI, of the princely
states, associate banks came into fold of public sector banking.
Another evaluation of the banking in India was undertaken during 1966, as
the private banks were still not extending the required support in the form of
credit disbursal, more particularly to the organized sector. The bulk of
deposits collected, were being deployed in organized, sectors of the industry
and trade, while farmers, small entrepreneurs, transporters, professionals
and self - employed had to depend on the money lenders who exploit them
by charging higher interest rates. In February 1966, a scheme of Social
6
-
7/28/2019 aman mba.doc
7/60
Control was set up whose main function was to periodically assess the
demand for bank credit from various sectors of the economy to determine
the priorities for grant of loans and advances so as to ensure optimum and
efficient utilization of resources. The scheme however, did not provide any
remedy.
On July19, 1969, the government promulgated Banking Companies
(Acquisition and Transfer of Undertakings) Ordinance 1969 to acquire 14
bigger commercial banks with paid up capital of Rs. 28.50 crores, deposits
of Rs. 2629 crores, loans of Rs. 1813 crores and with 4134 branches
accounting or 80% of advances. Subsequently, in 1980, 6 more banks were
nationalized which brought 91% of the deposits and 84% of the advances in
the Public Sector Banking. During December 1969, RBI introduced the lead
Bank Scheme on recommendations of FK Nariman Committee.
In the post nationalized period, there was substantial increase in the
number of branches opened in rural/semi-urban centers bringing down thepopulation per bank branch to 12000 approx. during 1976, RRBs were
established (on the recommendation of M. Narasimham Committee report)
under the sponsorship and support of public sector bank as the 3rd
component multi agency credit system for the agricultural and rural
development. The Service Area Approach was introduced during 1989.
While the 1970s and 1980s saw the high growth rate of branch banking
network, the consolidation phase started in late 80s and more particularly
during early 90s, with the submission of report by the Narasimham
Committee on Reforms in Financial Services Sector during 1991.
7
-
7/28/2019 aman mba.doc
8/60
In these five decades since independence, banking in India has evolved
through four distinct phases, namely: -
Foundation Phase : - This phase can be considered to cover 1950s till
nationalization of banks in 1969. The focus during this period was to lay
the foundation for a sound banking system in the country. As a result
the phase witnessed the development of necessary legislative
framework for facilitating re-organization and consolidation of the
banking system, for meeting the requirement of Indian economy. A
major development was the transformation of imperial Bank into State
Bank of India in 1955 and nationalization of 14 major private banks
during 1969.
Expansion Phase: - This phase began in mid60s but gained
momentum after nationalization of banks and continued till 1984, a
determined effort was made to make banking facilities available to the
masses. Branch network of the banks was widened at a very fast pace
covering the rural and semi urban population, which had no access to
the banking hitherto. Most importantly, credit flows were guided towards
the priority sectors.
Consolidation Phase: - The phase started in 1985 when RBI took a
series of policy initiatives, which saw marked slowdown in the branch
expansion. Attention was paid to improving house keeping, customerservices, credit management, staff productivity and profitability of
banks.
8
-
7/28/2019 aman mba.doc
9/60
Reforms Phase: - The macro economics crisis faced by the country in
1991 paved the way for the extensive financial sector reforms which
brought deregulation of interest rates, more competition, technological
changes, prudential guidelines on asset classification and incomerecognition, capital adequacy, autonomy packages, etc.
COOPERATIVE BANKS
The cooperative bank has history of almost 100 years. The cooperative
banks are an important constituent of the Indian Financial System, judging
by the role assigned to them, the expectations they are supposed to fulfill,
their number, and the number of offices them operates. The cooperative
movement originated in the West, but the importance that such banks have
assumed in India is rarely paralleled anywhere else in the world. Their role
in rural financing continues to be important even today, and their business
in the urban areas also has increased phenomenally in the recent years
mainly due to the sharp increase in the number of primary co-operative
banks. While the cooperative banks in rural areas mainly finance
agricultural base activities including farming, cattle, milk, hatchery,
personal finance etc. along with some small scale industries and self-
employment driven activities, the cooperative banks in urban areas mainly
finance various categories of people for self employment, industries, small
scale units, home finance, consumer finance, personal finance, etc. Some of
9
-
7/28/2019 aman mba.doc
10/60
the cooperative banks are quite forward looking and have developed
sufficient core competencies to challenge state and private sector banks.
According to NAFCUB, the total deposits & lending of cooperative banks
are much more than old private sector banks and also the new private sector
banks. This exponential growth of cooperative banks is attributed mainly to
their much better local reach, personal interaction with customers, and their
ability to catch the never of the local clientele.
Though registered under the Co-operative Societies Act of the Respective
State (where formed originally) the banking related activities of the co-
operative banks are also regulated by the reserve bank of India. They aregoverned by the Banking Regulation Act 1949 and banking Laws Act 1965,
the cooperative banks are small sized units organized in the cooperative
sector, which operate both in urban and non urban centers. They finance
small borrowers in industrial and trade sectors besides professional and
salary classes. Regulated by the RBI, they are governed by the banking
regulation act 1949 and banking laws (Cooperative societies) act, 1965.
10
-
7/28/2019 aman mba.doc
11/60
STRUCTURE OF COOPERATIVE BANKING
The cooperative banking structure in India is divided into 4 components: -
a) Primary cooperative credit society
b) Central cooperative banks
c) State cooperative banks
d) Land development banks
STRUCTURE OF COOPERATIVE BANKING
Cooperative Credit Institution
Agricultural Credit Institution Non-agricultural Credit Institution
Short-term Institution Long Term Credit Institution
11
-
7/28/2019 aman mba.doc
12/60
Land Development
Banks
State Coop Central Coop Primary Agricultural
Bank Bank Societies
STATE COOPERATIVE BANKS (SCBs)
The SCB is a federation of central cooperative bank and act as watchdog of
the cooperative banking structure in the state. Its funds are obtained from
share capital, deposits, loans and overdrafts from the RBI. The SCBs lend
money to CBs and primary societies and not directly to farmers.
CENTRAL COOPERATIVE BANKS (CCBs): -
These are the federation of primary credit societies in a district. They are of
2 types: -
There can be cooperative banking unions whose membership is open
only to cooperative societies.
There can be mixed CCBs whose membership is open to both
individuals and cooperatives societies. The funds of the bank consist ofshare capital, deposits, loans and overdrafts from SCBs. The bank
provides loans to primary credit societies within the limit of the
borrowing capacity of societies. However, some loans are also given to
individuals and others.
PRIMARY COOPERATIVE CREDIT SOCIETY
It is a village institution, which directly deals with the rural people. It
encourages savings among the agriculturalists, accept deposits from them,
gives loan to the needy borrowers and collects repayments. The funds of the
12
-
7/28/2019 aman mba.doc
13/60
society are derived from the share capital, deposits of members and loans
from CCBs.
LAND DEVELOPMENT BANKSCooperative banks and commercial banks by their very nature are not in
position to provide long term loans because their deposits are mainly
demand deposits. Thus, there was great need for a specialized institution for
supplying long term credit to agriculturalists. The establishment of land
development banks now known as cooperative and rural development banks
(CARDBS) is an effort in this direction. The state government and RBI
govern LDBs. Recently; the supervision of LDBs was given to national
bank of agriculture and rural development (NABARD). The sources of
funds for the banks are debentures subscribed by both central and state
government. These banks do not accept deposits from general public.
Thus, the apex of the cooperative organizations in the state is the State Bank
to which Central Banks are affiliated. The primary societies are mostly
affiliated to the Central Banks.
13
-
7/28/2019 aman mba.doc
14/60
PROBLEMS FACED BY COOPERATIVE BANKS
1) The cooperative financial institution is facing severe problems which
have restricted their ability to ensure smooth flow of credit and also
in meeting the requirement of the farming
(i) Limited ability to mobilize resources.
(ii) Low level of recovery.
(iii) High transaction of cost.
(iv) Administered rate of interest structure for a long time.
2) Due to cooperative legislation and administration mandates Govt.
interference has become a regular feature in the day-to-day
administration of the cooperative institution. Some of the problem
area that arise out of the applicability of the cooperative legislative
are
(i) Deliberate control of cooperative by the government.
(ii) Nomination of board of director by the government.
14
-
7/28/2019 aman mba.doc
15/60
(iii) Participation of the nominated directors in the election of the
chairman.
(iv) Deputation of government officials to cooperative institutions
etc.
3) The state cooperative banks are not able to formulate their respective
policies for investment of their funds that include their surplus
resources because of certain restrictions.
4) Prior approval of RBI is mandatory for opening of new branches of
SCBs. The SCBs are required to submit the proposal for opening of
new branches to RBI through NABARD, whose recommendation isprimarily taken into consideration while according permission.
5) There is the condition of government guarantee by NABARD while
sanctioning credit limits to SCBs and DCCBs but at no stage the
commercial bank and regional rural banks are called upon to execute
any Govt. Guarantee while sanctioning reference by NABARD.
6) On the number of occasion's institution like Food Corporation of
India, Indian Oil Corporation, Hindustan Petroleum etc. have issued
instruction in writing that demand draft/pay order should be obtained
from the nationalization/schedule bank.
7) SCBs does not provide loan directly to farmers due to which they
cannot keep pace with the changing requirements of the farmers.
15
-
7/28/2019 aman mba.doc
16/60
MISSION
Promotion and sustainance of economic interest & providing easy finance, cost effective
and quality banking services to customer & PACs.
OBJECTIVES OF BANK
To serve as a Balancing center for corporative societies in the state.
To promote the economic interest for the members of the bank andcooperative societies
To provide credit and banking facilities to the members and non-
members.
16
-
7/28/2019 aman mba.doc
17/60
To act as higher financing agency for the members Central Cooperative
Bank.
To promote and develop saving and credit instrument for economic and
social welfare of the members in particular and others in general in
Punjab State.
SERVICE PROVIDED BY THE BANK
DEPOSITS
Saving Bank Account
Current Account
Fixed Deposits
Long Term Deposits
Recurring Deposits
Collection of drafts, cheques and various other
instruments
LOANS
17
-
7/28/2019 aman mba.doc
18/60
Loans to Public
Consumer durable loans
Personal loan to salary class
Housing loans
Loans to central cooperative banks: (Re-finance)
Short term agriculture
Medium term agriculture loan
Short term non agriculture loan (Consumption loan)
Non farm sector loan
Rural and urban housing
Tow wheeler loan
Revolving cash credit limit to farmers
Cash credit fertilizer
Cash credit limit to cooperative sugar mills
Loans to other cooperative apex institution
To House Fed Punjab
To IFFCO
FACILITIES PROVIDED BY PSCB
Bill discounting
ATMs
Telebanking
18
-
7/28/2019 aman mba.doc
19/60
24 hour banking
Foreign Exchange
MANAGEMENT
The board of Directors lays down the board policies regarding the working
of the bank. The Board of Director is constituted for a period of five years.
The constitution of the board is given as under:
One director from each Central Cooperative bank
Two directors to be elected out of the representative of affiliated
cooperative societies order than central cooperative bank. One from apex
cooperative societies and one form other member cooperative societies.
19
-
7/28/2019 aman mba.doc
20/60
Maximum three nominees of the government so far as government's
contribution of share capital of the bank are concerned.
Registrar or his nominees not below the rank of additional registrar.
Managing Director of the bank
Representative of NABARD.
The members of the Board of Directors, elects from the elected members
the chairman and vice chairman. In the absence of the board, the
administrator looks after the bank..
FUNCTIONS OF THE BANK
According to the banking regulation act 1956, banking means "Accepting
for the purpose of landing or investment of deposits of money from the
public, repayable of demand or otherwise and withdrawal by cheques.
Drafts and order or otherwise."
BANK FUNCTION
20
-
7/28/2019 aman mba.doc
21/60
PRINCIPAL ANCILLARY
ACCOUNTING GRANTING SAFE ISSUE ISSUE OFDEPOSITS ADVANCES DEPOSITS OF GURANTEES
LOCKERS PAYORDER/DD
FINANCIAL HIGHLIGHTS
INVESTMENT OF FUNDS: -
(A) STATUTORY REQUIREMENTS: -
25% of the total time liabilities are invested in the shape of SLR in
Government Securities by the bank while the central cooperative banks can
keep this with the Punjab State Cooperative Bank, Chandigarh. 5% of the
total time and liabilities is kept as Cash Reserve Ratio under the RBI Act in
21
-
7/28/2019 aman mba.doc
22/60
the shape of Current Account with RBI Act in the shape of Current Account
with RBI. Remaining is being invested in Loan Portfolios.
(A) ADVANCES AND LOANS: -
(1) Short Term Agricultural Advances: -
The short term agricultural loan is advanced by the cooperative banks
for the Seasonal Agricultural Operations known as Crop Loan. The
farmers in the State are being provided credit for raising Kharif and
Rabi Crops in the shape of cash and kind component. The
Agricultural Advances made during the last four years are as under:-
YEAR TARGET (IN Cr.) ADVANCEMENT (IN
Cr.)
2006-07 4544.00 4128.56
2007-08 5907.00 4801.63
2008-09 6000.00 5828.28
2009-10 6740.00 5894.29
2) Short Term Agricultural Recovery (DCCBs): -
The recovery of short term agricultural loan of DCCBs has improved.
The recovery is being effective through persuasive methods. No
coercive action is being taken. The annual recovery of S.T
Agricultural Loan for the last 4 years given as follows: -
2006 2007 2008 2009
91.80 92.33% 92.16% 82.07%
22
-
7/28/2019 aman mba.doc
23/60
(3) Medium Term Agricultural Advances: -
The central cooperative banks are advancing Medium term
Agricultural Loans in the state for various purposes namely-purchase
and installation of pump sets, diesel engines, electric motors with or
without pump, purchase of agricultural implements, machinery,
seeds, disk arrowa, harvesters, tyrecarts etc. land reclamation and
land improvement, construction of bunds, preparation of orchards and
plantation, purchase of milch cattle, pouitry farms, purchase and
installation of gobar gas plants and purchase of shares of cooperative
sugar mills etc.the disbursement of M.T.loan is as under
YEARS AMOUNT
ADVANCE(IN CR)
2007-08 117.57
2008-09 210.31
2009-10 196.87
(4) Revolving Cash Credits: -
A unique scheme was evolved to bring the farmers from un-
institutional credit to the cooperative credit structure. Under this a
scheme, the Cooperative Banks are providing Rs.1.00 lacs per acre
subject to the maximum of Rs.6.00 lacs to the farmers for fulfilling
their socio economic liabilities without falling pray to the clutches of
private/non institutional money lenders. Rate of interest is 11%.The
central cooperative banks have sanctioned credit limits as detailed
below: -
23
-
7/28/2019 aman mba.doc
24/60
(5) Non Farm Sector Loan: -
Another most important features of the cooperative banks in the State
is that they started advances for Non Farm Sector during the year
1993 and advanced loans as detailed: -
YEARS NO. OFBENEFICIARIES
LIMITS SANCTIONED(IN Cr.)
2007-08 9590 56.48
2008-09 8013 49.50
2009-10 4873 42.32
(6) Loans for Consumer Durables: -
Loans for consumer durables, such as for the purpose of television,
refrigerator, air conditioner and other household items etc were
disbursed by CCBs as under: -
24
YEARS NO. OF
BENEFICIARIES
LIMITS SANCTIONED
(IN Cr.)
2007-08 132011 1527.00
2008-09 142226 1919.55
2009-10 148799 2091.75
-
7/28/2019 aman mba.doc
25/60
YEAR AMOUNT DISBURSED (IN
CR)
2007-08 80.70
2008-09 79.712009-10 71.50
(7) Cash Credit to be Businessmen and Traders: -
Under this scheme, a cash credit limit is sanctioned up to Rs25.00
Lakhs to small businessmen and traders depending upon their
business turnover on easy terms at 14% normal rate of interest. These
limits sanctioned to the traders are detailed below: -
YEAR CC LIMIT SANCTIONED (IN
CR)
2007-08 245.72
2008-09 280.40
2009-10 306.49
(8) Two Wheeler Loan to Farmers: -
A scheme of NABARD was started in February 2002. The farmers
can take 75% of two-wheeler's cost or Rs. 50,000/- whichever is less,
from the Central Cooperative Banks in the State of Punjab.
YEAR AMOUNT ADVANCED (IN
CR)
2007-08 43.33
25
-
7/28/2019 aman mba.doc
26/60
2008-09 39.62
2009-10 32.95
(9) Housing Scheme: -
These loans are provided by the Central Cooperative Banks for
construction of new house, reapir/extension and renovation of
existing house and the maximum limit of these loans is Rs. 5.00
Lakhs.
YEAR AMOUNT ADVANCED
(IN CR)
2007-08 94.642008-09 101.33
2009-10 90.10
(10) Vehicle Loan Scheme: -
Under vehicle loan scheme, loan is available for new vehicle like Car,
Mini Bus,Lorry etc upto 80% of the value of the vehicle or Rs. 10.00
lakhs, whichever is less.
YEAR AMOUNT DISBURSED
(IN CR)
2007-08 39.16
2008-09 61.82
2009-10 84.08
(11) Personal Loan Scheme: -
This scheme has been introduced in December 2002, through all the
branches of Punjab State Cooperative Bank and for all the 19 Central
Cooperative Banks in the State of Punjab. This loan can be advanced
26
-
7/28/2019 aman mba.doc
27/60
to salaried employees upto Rs. 2.00 lakhs @ 14%. The year wise
detail is given below: -
YEAR AMOUNT DISBURSED
(IN CR)
2007-08 103.22
2008-09 133.78
2009-10 126.44
PROFITS
All the Cooperative Banks in the state are in loss. The figures are given
below: -
YEAR APEX BANK CCBs TOTAL
2006-07 26.24 74.84 101.08
2007-08 23.79 24.55 48.34
2008-09 10.34 18.73 29.07
OBJECTIVES OF THE STUDY
The research project is made on "The Punjab State Cooperative Bank". The
objectives of the study undertaken are:
To study the Non Agriculture Loans provided by the bank and to know
in detail the procedure for applying these loans.
27
-
7/28/2019 aman mba.doc
28/60
To analyze the customer satisfaction level on the loans provided by the
bank.
To evaluate and suggest efficient and effective provisions for the loans
being provided.
To analyze the profits and advances of the bank in the previous three
years time period.
RESEARCH METHODOLOGY
Research can be described as 'a purposeful investigation'. Research is a
step-by-step approach to investigate the problem in order to find a solution.
There are many techniques, which can be employed to solve a problem so it
is important for the investigator to consider his problem carefully at the
outset and make use of techniques that are appropriate to it. Just as the
carpenter needs to use more than one tool in completing a piece of work, so
the research worker must often make use of, not one, but several methods.
When we desire a great deal of information concerning each
individual or occurrence to be studied, much of our data may be non-
quantitative by its nature. In such an even we employ the case study method
of investigation, the purpose of which is to consider in detail the features of
peculiar to the individual case. We will make use of two kinds of data:
28
-
7/28/2019 aman mba.doc
29/60
1) PRIMARY DATA
This data happens to be original in character as it is Collected a fresh and
for the first time. Such data are published by authorities who themselves are
responsible for their collection. Examples include census data collected by
Indian Government. In this study we will make use of primary data, which
can be collected by, one or more of following methods:-
a. OBSERVATION METHOD: In this method, the investigator
collects the information through personal observation.
b. QUESTIONNAIRE METHOD: This is one of the most popularmethods of data collection. The primary data is collected by
personally interviewing individuals and recording their responses
in a structured questionnaire. This method will be used to collect
data from respondents in this study.
c. MAILED QUESTIONNAIRE METHOD: A preset
questionnaire is mailed to a selected list of persons who are
requested to fill it & mail it back.
d. TELEPHONE INTERVIEW: The respondents are contacted on
phone for recording their responses. This method saves time but
the respondent should have a telephone.
Of all these methods of primary data collection, questionnaire method will
be used to gather information from the management and employees.
2) SECONDARY DATA: This corresponds to the data, which has
already been collected and processed by some other agency. In this
study the secondary data will be obtained from the booklets and
journals of the companies under study in order to get information
29
-
7/28/2019 aman mba.doc
30/60
relevant to the case. The sources of secondary data can broadly be
classified under two heads:
a) PUBLISHED SOURCES: -
The various sources of published data are:
Reports and official publication of international bodies such as the "
World Bank" International Labour Organization"
Central and State government
Semi official publications of various local bodies such as Municipal
Corporations and District Boards.
b) UNPUBLISHED SOURCES:
All statistical material is not always published. There are various sources of
unpublished data such as records maintained by various Government and
private offices; studies made research institutions, scholars etc. Suchsources can be used where necessary.
TOPIC UNDERTAKEN FOR THIS STUDY
During the training period, I concentrated only on five kinds of loans, which
are provided by the Cooperative Bank, Bathinda. The reason being that the
branch has provisions for only these four finds of loans, thus is providing
these non-agricultural loans only. A detailed study of the procedure for
30
-
7/28/2019 aman mba.doc
31/60
applying to these loans, documents required and other formalities related to
these loans are studied. These loans are stated as under:
Personal Loan
Consumer Loan
Vehicle Loan
Education Loan
To apply for a loan, the consumer has to first of all give an application to
the Registrar applying for the loan. Then it is checked whether the customer
has taken a loan before and if yes, whether it is repaid or not, after the
eligibility of the customer is checked. In the process, it is seen that whether
the customer is able to repay the monthly installments. It is checked with
the help of the salary slip of the customer, which is prepared by the
Accounts Department of the office. After making all the deductions, it is
seen that whether the amount left is sufficient enough to pay the EMIs of
the loan. If all the formalities are meeting, the file is moved to the Registrar
for further notification and sanctioning of the loan. After the loan is
sanctioned, a person from the bank is sent to verify that, whether the loan
has been used for the stated purpose.
The detail procedure of each loan is discussed as follow:
PERSONAL LOAN
Personal loan scheme has been framed which aims at providing credit
facility for meeting out Social Economic needs of employees such as: Child
Education, Furnishing your home, buying a computer, marriage of
31
-
7/28/2019 aman mba.doc
32/60
son/daughter, holiday tour with your family or any other basic requirement
without giving any purpose of loan. This scheme was introduced in 2001.
Main feature of this scheme are
Eligibility criteria class:-
All salaried employees of Punjab Government Chief Auditors Cooperative
Department, Punjab State Cooperative Banks and Chandigarh
Administration its board, corporations except on deputation with
Chandigarh administration boards and corporations.
Purpose Credit facility for meeting out socio-
Economic needs
Age Minimum 21 years and max.57 years
Service tenure One year after confirmation
Rate of interest 14%
32
-
7/28/2019 aman mba.doc
33/60
Loan limit 12 times of Gross S/salary or
Rs.2.00 lac, whichever is less
Collateral Security Two GoodSureties as per
Satisfaction of the bank
Margin No margin required
Repayment period Maximum 5 Years
Monthly Installment per Lac Rs.2326.00
Payment of loan
Loan is repayable in equal installments in the form of post dated chequess.
The 1st installment will start after one month. The loan shall be repaid
before retirement.
Option to repay loan : -Loanee will have the option to prepay the loan
at one time during the tenure of loan in lump sum. A prepayment fee of 1%
will be payable on the outstanding loan amount. No part-prepayment is
allowed.
General
No employee will be given this loan facility who has defaulted in
repayment of loan in any other scheme.
DOCUMENTS REQUIRED
Pre-sanction
Application form
Latest photograph
Bank account statement
33
-
7/28/2019 aman mba.doc
34/60
Proof of income employer certificate of identify proof of continuity of
current job
Proof of residence of the borrower and guarantor
Post-sanction
Demand pronote
Agreement (N J stamp paper for Rs. 15/- only)
Signature verification
Post dated cheques
ADVANCEMENT
Under this scheme Rs. 103.22 crores were advanced during the year 2007-
08and Rs. 133.78 Cr. has been advanced during the year 2007-08 and Rs.
126.44 Cr. were advanced during the year 2009-10.
34
-
7/28/2019 aman mba.doc
35/60
0
20
40
60
80
100
120
140
2006-07 2007-08 2008-09 2009-10
Amount disbursed (in Cr.)
35
-
7/28/2019 aman mba.doc
36/60
CONSUMER LOAN
The Punjab State Cooperative Bank to make advances to the individuals
directly for the purchase of consumer durables like refrigerator, scooter,
television, radio etc and for meeting other domestic expenses like expenses
on medical, education, marriage of son/daughter/brother/sister or self etc
and also for providing overdraft facility to the saving account and current
account holders.
Main feature of this scheme are
Beneficiary
The bank may grant loan to the individual salary earners and non salary
earners.
Purpose for the purchase of consumer
Durables
Loan limit Maximum amount upto Rs.1Lac.
Rate of Interest 14%
Margin 25%
Repayment Period Maximum 5 Years
Monthly Installment Per Lac Rs.2326.00
Collateral Security Two Good Sureties as per
Satisfaction of the bank
Tenure of loan
36
-
7/28/2019 aman mba.doc
37/60
The loan should be repayable in monthly installments. The total duration of
loan should not exceed five years.
CONDITIONS FOR APPLYING THE LOAN
The following conditions are required to be fulfilled in order to apply for
the loan: -
The borrower should be enrolled as a nominal member of the bank.
The borrower is required to produce two witnesses who should also be a
nominal member of the bank while signing the agreement.
The loan should be advanced for acquiring new assets only. Purchase of
second hand articles should not be financed.
The bank should take the original invoice from the dealer.
The loan should be advanced against hypothecation of the asset/assets
required/to be acquired.
DOCUMENTS REQUIRED
Promissory note
Agreement bond
Salary certificate
An authority letter from the loan and corresponding undertaking, from the
employer of the borrower under section 39 of the act for the repayment of
the loan in case the borrower fails to repay his loan.
Letter of waiver
An authority letter from the borrower to recover the installment
Application form
37
-
7/28/2019 aman mba.doc
38/60
Surety bond
Hypothecation agreement
ADVANCEMENT
The bank has advanced Rs. 71.50 Cr. Till the end of March 2010 as
compared to Rs. 79.71 Cr. which was advanced by the bank in the year
2009.
0
20
40
60
80
100
120
2006-07 2007-08 2008-09 2009-10
amount
disbursed(inCr.)
38
-
7/28/2019 aman mba.doc
39/60
SHEKARI EDUCATION LOAN
FACILITY
Main feature of this scheme are
Beneficiary Any Individual with 50%marks
In 10+2
Purpose To provide financial assistance to
Deserving and meritorious
students
For pursuing higher studies in
India or Abroad
Age
Minimum 17 years and Maximum 35 years.
His age of the Father/Guardian should not be more than 65 years till full
recovery of loan.
Loan limit Max. amount up to Rs.10 lac.
Rate of Interest 9%
Margin No margin required
Repayment period The installment will start after
Completion of course. Max
Period 5 years.
Security
39
-
7/28/2019 aman mba.doc
40/60
Collateral security: Mortgage of property value of 100% of loan amount..
For the loan up to Rs.5 Lac. No immovable security is required if the loanee
is the employee of Punjab Govt.or Coop Department etc.
Insurance: Insurance policy will be taken on the life of the student for
an amount equal to the loan amount assigned in favour of the bank.
Disbursement of loan
The branch will get sanction of total loan amount from the competent
authority, but will disburse the amount based on yearly expenses of the
course.
Third party payment in favour of concerned university or college.
In case purchase of Equipment/Books/Computer, the payment shall be
made to the applicant.
DOCUMENTS REQUIRED
Pre-sanction: -
Salary slip for the six months
Income proof
Income tax returns
Academic records
Particulars of scholarship won, if any
Post-sanction: -
Application nominal membership from the student/parent/guardian and
guarantor.
DP note
Letter of lien and set off
40
-
7/28/2019 aman mba.doc
41/60
Letter of waiver
Letter of guarantee from guarantors
Loan agreement
Affidavit from parent/guardian regarding: -
1) Payment of interest.
2) Repayment of loan, incase of default by the applicant.
3) He will not go abroad permanently without prior permission of the bank.
4) He will intimate the bank regarding any change in the status of study, if
any.
5) Mortgage of collateral security duly registered & mutation in favour of
the bank, if required.
PRECAUTION FOR DISBURSEMENT
Third party payment except for purchase of equipment/books.
Payment of loan amount for the 2nd year is made after obtaining the
documents relating to passing the first year & so on.
41
-
7/28/2019 aman mba.doc
42/60
VEHICLE LOAN
Under vehicle loan scheme, loan is available for new vehicles like Car, Mini
Bus, Lorry etc.
Main feature of this scheme are
Beneficiary Individual, Firm, HUF, Trust,
Coop
Societies or a Company
Purpose For the purchase of new vehicle
for business and personal use
Loan Limit Max. Amount up to Rs.10 Lac. Or
80% of cost of the vehicle.
Margin 20%
Rate of Interest Upto Rs.3 Lac : 13%
Above Rs.3 Lac: 13.5%
Repayment period Maximum 5 Years
.
Insurance Comprehensive insurance jointly
With the name of Bank and
42
-
7/28/2019 aman mba.doc
43/60
Borrower.
Collateral Security
Two Good Sureties as per satisfaction of the Bank Besides the
hypothecation of the vehicle
DOCUMENTS
Pre-sanction
Application for the loan.
Residence proof of borrower and Guarantors.
Copy of the Driving License.
Quotation of the vehicle.
Identity proof.
Document relating to collateral security, if applicable
Proof of income.
In case of salaried employee:
a) Form 16
b) Latest salary statement with deduction
c) Income tax returns for the last three years, if income tax payee
In case of business:
a) Copy of balance sheet and profit & loss a/c for the three years.
b) Proof of business.
c) ITRs for the last three years.
In case of firms:
43
-
7/28/2019 aman mba.doc
44/60
a) Copy of the partnership deed.
b) Authorization letter.
c) Proof of office on case of firms.
In case of companies:
a) Memorandum and article of association.
b) Copy of resolution.
Post sanction
Application for the nominal membership of the borrower, guarantor and
mortgagor.
D.P. note.
Letter of lien and set off.
Letter of waiver.
Hypothecation deed.
Loan agreement.
Mortgage deed duly registered and mutation in the favour of the bank, if
applicable.
Duly signed post dated cheques for the installments.
PRECAUTION FOR THE DISBURSEMENT: -
The following documents to be obtained after disbursement: -
Insurance cover.
Copy of Registration Certificate.
Original invoice.
One set of duplicate keys.
44
-
7/28/2019 aman mba.doc
45/60
ADVANCEMENTS
The bank has advanced Rs. 84.08 Cr. to the customer in the year 2009-10,
while the amount was Rs. 61.82 Cr. in the year 2008-09.
0
10
20
3040
50
60
70
80
90
2005-06 2006-07 2007-08 2008-09
Amountdisbursed (in
Cr.)
45
-
7/28/2019 aman mba.doc
46/60
Data Analysis and
Interpretation
Q.1 Are you Customer of this bank?
Table No. 1
1.Yes 1. 50
2.No 2. 0
46
-
7/28/2019 aman mba.doc
47/60
Yes
No
Q.2 Income segment do you belong?
Table No.2
1.1000-5000 1.15
2. 6000-10000 2. 10
3. 11000-15000 3. 13
4. 16000-20000 4. 5
5. Above 5. 7
47
-
7/28/2019 aman mba.doc
48/60
1000-5000
6000-10000
11000-15000
16000-20000
Above
Q.3 Have you an account in this bank?
Table No. 3
1.Yes 1. 50
2.No 2. 0
48
-
7/28/2019 aman mba.doc
49/60
Yes
No
Q. 4 From How many years you are customer of this bank?
Table No. 4
1. From 1-2 year 1. 10
2. From 2-5 year 2. 12
49
-
7/28/2019 aman mba.doc
50/60
3. From 5-10 year 3. 10
4. Above 10 year 4. 18
1-2 year
2-5 year
5-10 year
Above 10 year
Q. 5 Why you prefer this bank?Table No. 5
1.Low interest rates 1.10
2.Less documentations 2. 13
3. Easy disbursement 3. 12
4.All of the above 4. 15
50
-
7/28/2019 aman mba.doc
51/60
Low interest rates
Less
Documentations
Easy
Disbursement
All of the above
Q. 6 What type of loan you prefer to fulfill your needs?
Table No. 6
1.Personal loan 1. 20
2. House loan 2. 15
3. Consumer loan 3. 6
4. Vehicle loan 4. 9
51
-
7/28/2019 aman mba.doc
52/60
Personal loan
House loan
Consumer loan
Vehicle loan
Q.7 Security demand by the bank while taking loan?
Table No. 7
1. Yes 1. 50
2. No 2. 0
52
-
7/28/2019 aman mba.doc
53/60
Yes
No
Q.8 Disbursement of loan by the bank?
Table No. 8
1. Quick 1. 25
2. Slow 2. 5
3. Cant say 3. 20
53
-
7/28/2019 aman mba.doc
54/60
Quick
slow
can't say
Q.9 Perception of customers towards loan procedure?
Table No. 9
1.Well 1. 30
2. Good 2. 8
3. Better 3.10
4. Cant say 4. 2
54
-
7/28/2019 aman mba.doc
55/60
Well
good
better
can't say
Q.10 How you feel about the services?
Table No. 10
1.Well 1. 25
2. Good 2.12
3. Better 3.104. Cant say 4. 3
55
-
7/28/2019 aman mba.doc
56/60
Well
good
better
can't say
CONCLUSION
With the help of the research work done, and by interpretation of the
responses of the customers, following conclusions can be made:
It is clear that the bank's personal loans and house building loans are
more popular and hence the customers taking these loans are more than
the other customers.
56
-
7/28/2019 aman mba.doc
57/60
During the analysis, it was found that mostly the employees of the bank
are the customers of the bank.
As the customers are the middle income group having an average salary
of Rs. 1700/- per month and there is a direct correlation between the
income of the employees and the amount of loan taken, hence mostly
the employees undertaken a loan ranging between Rs. 1,50,000/- to Rs.
4,00,000/-
The bank is able to reach up to the satisfaction level of its customers.
The customers have suggested that the formalities included during the
loan processing should be reduced.
The rate of interest of bank is reasonable which the reason is for most of
the employees for taking loan from the institution.
The bank has three categories of its customers as its own employees, non
employees and businessmen.
The average processing time for the loan is 7 - 14 days.
BIBLIOGRAPHY
Financial Accounting By Jain & Narang
Research Methodology by C.R.Kothari
Annual Reports of Punjab State Cooperative Bank
www.google.com
57
http://www.google.com/http://www.google.com/ -
7/28/2019 aman mba.doc
58/60
www.pbcooperatives.gov.in
Questionnaire
Q.1 Are you customer of this bank?1. Yes
2. No
Q.2 Income segment do you belong to?
58
http://www.pbcooperatives.gov.in/http://www.pbcooperatives.gov.in/ -
7/28/2019 aman mba.doc
59/60
1. 1000-5000
2. 6000-10000
3. 11000-15000
4. 16000-20000
5. Above
Q.3 Do you have an account in this bank?
1. Yes
2. No
Q.4 For how many years you are associated with this bank?
1. From 1-2 year
2. Form 2-5 year
3. From 5-10 year
4. Above 10 year
Q.5 Why do you prefer this bank?
1. Low interest rates
2. Less documentations
3. Easy disbursement
4. All of the above
Q.6 What type of loan you prefer to fulfill your need?
1. Personal loan
2. House loan
59
-
7/28/2019 aman mba.doc
60/60
3. Consumer loan
4. Vehicle loan
Q.7 Does the bank demand Security while taking loan?
1. Yes
2. No
Q.8 How is the Disbursement of loan by the bank?
1. Quick2. Slow
3. Cant say
Q.9How is the Perception of customers towards loan procedure?
1. Well
2. Good
3. Better
4. Cant say
Q.10 What is your perception about the services?1. Well
2. Good
3. Better
4. Cant say