A STUDY ON THE INNOVATIONS IN RETAIL

LENDING WITH REFERENCE TO VIJAYA BANK

(JAYANAGAR IIIrd BLOCK BRANCH).
Sub!""#d !$ %&r"!&' (u'(!''#$" )( "*# r#+u!r##$", ()r "*#
&-&rd )( "*# D#.r## )(
/&,"#r )( Bu,!$#,, Ad!$!,"r&"!)$
OF
BANGALORE UNIVERSITY
BY
TALAT FATMA
(01ACC/2034)
UNDER THE GUIDANCE OF
Mrs. Ghousia Khatoon
M.com
AL5A/EEN INSTITUTE OF /ANAGE/ENT STUDIES
A((!'!&"#d ") B&$.&')r# U$!6#r,!"7 (R#8).$!9#d b7 AICTE)
HOSUR ROAD: BANGALORE 5 3200;<
;0015;003
AIMS 1
)
Table of Contents
Chapter Title Page No.
1A
I I$"r)du8"!)$
1.1 Indian Banking
1.2 Commercial Banks
1.3 Progress of commercial Bank in India
1.4 unctions of commercial !anks
1." #ending o$eration of Commercial Banks
1.% Introduction to &'etail #ending(
II D#,!.$ )( "*# S"ud7=R#,#&r8* D#,!.$
2.1 )ile of the stud*
2.2 +tatement of $ro!lem
2.3 ,!-ecti.es of the stud*
2.4 ,$erational definitions of the conce$ts
2." Area of stud*
2.% Methodolog* and /ata Collection
2.0 +am$ling and +am$ling techni1ues
2.2 ield +tud*
2.3 Plan of Anal*sis
2.14 #imitations of the stud*
2.11 ,.er.ie5 of the Cha$ter +cheme
AIMS 2

III >r)(!'# )( "*# B&$?
3.1 Com$an* Profile 6 7i-a*a Bank
3.2 'etail lending schemes of 7i-a*a Bank
IV A$&'7,!, )( D&"&
4.1 Anal*sis and Inter$retation of data collected from the Customers
V F!$d!$.,: C)$8'u,!)$ &$d Su..#,"!)$,
".1 indings
".2 Conclusion
".3 +uggestions
B!ub'!).r&%*7
A$$#@ur#
8uestionnaire
Ke* inancial Indicators
Balance +heet
AIMS 3
Chapter -1
AIMS 4
A.A I$d!&$ B&$?!$.
)he 'eser.e Bank of India is the central !ank of the countr*. Central
!anks are a relati.el* recent inno.ation and most central !anks9 as 5e kno5
them toda*9 5ere esta!lished around the earl* t5entieth centur*.
)he 'eser.e Bank of India 5as set u$ on the !asis of the
recommendations of the :ilton ;oung Commission. )he 'eser.e Bank of
India Act9 1334 <II of 1334= $ro.ides the statutor* !asis of the functioning of
the Bank9 5hich commenced o$erations on A$ril 19 133".
T*# B&$? -&, 8)$,"!"u"#d ") 5
> 'egulate the issue of !anknotes
> Maintain reser.es 5ith a .ie5 to securing monetar* sta!ilit* and
)o o$erate the credit and currenc* s*stem of the countr* to its ad.antage.
)he Bank !egan its o$erations !* taking o.er from the Go.ernment the
functions so far !eing $erformed !* the Controller of Currenc* and from the
Im$erial Bank of India9 the management of Go.ernment accounts and $u!lic
de!t. )he e?isting currenc* offices at Calcutta9 Bom!a*9 Madras9 'angoon9
Karachi9 #ahore and Ca5n$ore <Kan$ur= !ecame !ranches of the Issue
/e$artment. ,ffices of the Banking /e$artment 5ere esta!lished in Calcutta9
Bom!a*9 Madras9 /elhi and 'angoon. Burma <M*anmar= seceded from the
Indian @nion in 1330 !ut the 'eser.e Bank continued to act as the Central
Bank for Burma till Aa$anese ,ccu$ation of Burma and later u$to A$ril9
1340.
AIMS "
After the $artition of India9 the 'eser.e Bank ser.ed as the central
!ank of Pakistan u$ to Aune 1342 5hen the +tate Bank of Pakistan
commenced o$erations. )he Bank9 5hich 5as originall* set u$ as a
shareholderBs !ank9 5as nationalised in 1343.
An interesting feature of the 'eser.e Bank of India 5as that at its .er*
ince$tion9 the Bank 5as seen as $la*ing a s$ecial role in the conte?t of
de.elo$ment9 es$eciall* Agriculture. Chen India commenced its $lan
endea.ours9 the de.elo$ment role of the Bank came into focus9 es$eciall* in
the si?ties 5hen the 'eser.e Bank9 in man* 5a*s9 $ioneered the conce$t and
$ractise of using finance to catal*se de.elo$ment. )he Bank 5as also
instrumental in institutional de.elo$ment and hel$ed set u$ insitutions like
the /e$osit Insurance and Credit Guarantee Cor$oration of India9 the @nit
)rust of India9 the Industrial /e.elo$ment Bank of India9 the Dational Bank
of Agriculture and 'ural /e.elo$ment9 the /iscount and inance :ouse of
India etc. to !uild the financial infrastructure of the countr*.
Cith li!eralisation9 the BankBs focus has shifted !ack to core central !anking
functions like Monetar* Polic*9 Bank +u$er.ision and 'egulation9 and
,.erseeing the Pa*ments +*stem and onto de.elo$ing the financial markets.
A.; CO//ERCIAL BANK

Amongst the !anking institutions in the organiEed sector9 the commercial
!anks are the oldest institutions ha.ing a 5ide net5ork of !ranches9
commanding utmost $u!lic confidence and ha.ing the lion shares in the total
!anking o$erations. Initiall* the* 5ere esta!lished as cor$orate !odies 5ith
share holdings !* $ri.ate indi.iduals9 !ut su!se1uentl* there has !een a drift
to5ards central o5nershi$ and control.
AIMS %
@$ to late si?ties commercial !anks 5ere mainl* engaged in financing
organiEed trade9 commerce and industr*9 !ut since then the* are acti.el*
$artici$ating in financing agriculture9 small !usiness and small !orro5ers
also.
A.1 >ROGRESS OF CO//ERCIAL BANKING IN INDIA
Banking in India on 5estern lines had started from the !eginning of 13
th
centur*. )he first -oint stock 5as esta!lished at Calcutta !* the name of
:industan and 5as under Furo$ean management. !ut this !ank failed. at that
time9 the !ank of Bengal<124%=9 !ank of Bom!a* <1244= and !ank of madras
<1243= 5ere started 5ith the financial $artici$ation of the go.ernment. )hese
!anks 5ere called as the $residenc* !anks and 5ere gi.en the right of note
issue in their res$ecti.e regions. )he first $urel* Indian -oint stock !ank 5as
the ,udh commercial !ank 5hich came into e?istence in 1223. )he s5adeshi
mo.ement of 134" ga.e great sti$ules to the starting of the Indian Banks.
)he Indian !anking s*stem had gone through a series of crisis and conse1uent
!ank failures. Its gro5th 5as 1uite slo5 during the first half of this centur*.
But after inde$endence9 the Indian !anking s*stem recorded ra$id $rogress.
)his 5as due to $lanned economic gro5th9 increase in mone* su$$l*9 gro5th
of !anking ha!it9 control and guidance !* the 'eser.e Bank and the
nationaliEation of to$ !anks etc. )he nationaliEation of 14 to$ Banks in Aul*
13%3 ga.e !anking a sense of direction and $ur$ose. In 13249 there 5as
another nationaliEation of si? smaller !anks.
AIMS 0
A.4 FUNCTIONS OF CO//ERCIAL BANKS
)he !usiness of a commercial Bank is $rimaril* to hold de$osits and make
loans and in.estments 5ith the o!-ect of securing $rofit for its shareholders.
I" %#r()r, "*# ()'')-!$. (u$8"!)$,B
1. 'ecei.ing de$osits from the Pu!lic
2. Making loans and ad.ances
3. @se of the che1ue s*stem
4. )ransfer of funds
". ,ther functions6
Issuing and o$erating credit cards <7isa9 Master= etc.9
Kee$ the .alua!le articles of customers in safe custod*.
Making and recei.ing $a*ments on !ehalf of its de$ositors.
A.3 LENDING O>ERATIONS OF CO//ERCIAL BANKS
#ending of funds to the constituents9 mainl* traders9 !usiness and
industrial enter$rises9 constitutes the main !usiness of the !anking com$an*.
)he ma-or $ortion of the !anks funds em$lo*ed !* 5a* of loans and
ad.ances. Chich is the most $rofita!le em$lo*ment of its funds. )he ma-or
$art of the !anks income is not 5ithout certain inherent risks largel*
de$ending on the !orro5ed funds an !anker cannot afford to take undue risks
in lending. Chile lending his funds9 a !anker therefore9 follo5s a .er*
cautious $olic* in order to minimiEe the risks.
AIMS 2
)here are three cardinal $rinci$les of !anks lending that ha.e !een
follo5ed !* the commercial !anks since long. )hese are the $rinci$les of
safet*Gli1uidit*9 and $rofita!ilit*. )he central Go.ernment and the 'eser.e
!ank ha.e issued a num!er of directions in this regard9 highlighting the social
$ur$ose 5hich the* ha.e to su! ser.e. )he traditional $rinci$les of !ank
lending ha.e9 therefore9 !een follo5ed 5ith certain modifications.
A.2 RETAIL LENDING C INTRODUCTION
Banking9 as defined in !anking regulation act9 is acce$tance of de$osits
for the $ur$ose of lending and in.estment and not re$a*a!le other5ise than
on demand. Cith the limited net5ork of commercial !anks9 and mono$olies
of fe5 $residenc* !anks9 the !usiness flo5 5as s$ontaneous and !ankers had
nothing more to do than !anking defined in the statute !ook.
)he nationaliEation of ma-or commercial !anks in the late 13%4(s and
earl* 1324(s and the introduction of lead !ank scheme resulted in large scale
e?$ansion of !ank net5ork in the countr*.
Added to this9 the financial sector reforms ha.e !rought in the entr* of
ne5 $ri.ate sector and foreign !anks into the countr*. )he con.entional
!anking as outlined a!o.e ha.e gi.en 5a* for $rofessional and hiGtech
!anking. )here has !een a $aradigm shift from the mono$olies of $u!lic
sector !anks to com$etiti.e !anking. Pu!lic sector !anks can no longer
remain com$lacent 5ith their con.entional $roducts and ser.ices. )here
5here times9 5hen the cor$orate clientele occu$ied the centre stage and retail
ones 5here $ushed to the !ack seats. )he slo5 do5n of the econom*9
AIMS 3
sluggish industrial gro5th9 slum$ in agricultural acti.ities etc. ha.e $ushed
the commercial !anks to look to the retail sector.
'etail !anking has !oth $ros and cons. In a situation like toda*9 the
!ankers ha.e .er* little o$tion9 !ut to chant the &retail mantra(.
What is Retail Banking?
'etail !anking can !e crudel* defined as the anton*m of 5holesale or !ulk
!anking. It is nothing9 !ut shade !usiness. A de$osit of 's 1 lakh from a
single customer .s small de$osits of 's. 14444 from ten different customers.
)he cor$orate and retail di.ide is nothing !ut internal segmentations and the
customers remains al5a*s a customer.
Ad6&$"&.#, )( r#"&!' b&$?!$.B
'etail !anking has inherent ad.antages out 5eighing certain disad.antages.
Ad.antages are anal*Eed !oth from the resource angle and asset angle.
R#,)ur8#B
+ta!le and constitute core de$osits.
#ess !argaining for additional interest.
#o5 cost funds.
Builds customer !ase.
Increases su!sidiar* !usiness.
A safe and con.enient sa.ing a.enue.
AIMS 14
A,,#", ,!d#B
Better *ield and im$ro.ed !ottom line.
Good a.enue for funds de$lo*ment.
#o5er risk and DPA $erce$tion.
:el$s economic re.i.al of the nation through increased $roduction
acti.it*.
Im$ro.es lifest*le and fulfills as$irations of the $eo$le through
afforda!le credit.
Inno.ati.e $roduct de.elo$ment.
Minimum marketing efforts in a demand dri.en econom*.
'isk 5eight in certain segments like housing loans.
D!,&d6&$"&.#, )( r#"&!' b&$?!$.B
'etail !anking9 though !* and large9 is .er* hand* in times of slo5
credit off take9 is not 5ithout certain disad.antages. A ma-or disad.antage is
monitoring and follo5 u$ of huge .olume of loan accounts. :ousing loan !*
.irtue of its long re$a*ment term in the a!sence of $ro$er follo5Gu$9 the* can
!ecome DPA(s<Det Performing Assets=.
Fr) Cr#d!" R&"!)$!$. ") Cr#d!" /&r?#"!$.B
Banks are a5ash 5ith li1uidit*. Prime cor$orates do not !orro5 from
!anks e?ce$t at su! H P#' rates. ,ther cor$orates are not fa.ored !* !anks.
+uddenl* there is a great change in attitude of the !anks. )he name of the
game is no longer &#ending to !ig cor$orates9 huge amounts to create loan
AIMS 11
assets(. 'etail credit is no5 5elcome e.en from 'BI(s $ers$ecti.e. Consumer
credit is no longer considered as un$roducti.e9 as it triggers demand for
consumer $roducts9 5hich in turn hel$s manufacturers in a $eriod of
economic sho5do5n 5hile the rates of interest on consumer credit ha.e
fallen9 there is still sco$e for further deduction.
i?ed interest rates on housing loans ha.e fallen shar$l*9 !ut not the
floating rates9 5hich are linked to medium and long term P#'(s. Banks
refuse to reduce these rates9 5hich a$$ears rather unfair. Credit card !usiness
is gro5ing and e.en Pu!lic +ector !anks ha.e started marketing these cards.
)he interest rates on credit card ho5e.er is o.er 2."I for 5ith dra5l cash.
Bank is reluctant to reduce its interest rate as it hits their !ottom.
)he $ersonal !anking segment customers ha.e !ecome the centre of
attraction. It is their de$osits and sa.ings acc. )hat are acti.el* sought after9
and not mega de$osits at a slightl* higher rate of interest. Banks are trul*
s$reading their de$osits net rather 5idel*.
D)#, R#"&!' Cr#d!" *#'% "*# E8)$)7D
JChat matters is 5hat for *ou is fiancK and not 5hat againstL9 sa*s the 'BI
1uite often. Its im$lication is o!.ious6 !ank fiancK !eing scarce and as there
are com$eting claimants9 it has to !e rationed in the !est interests of national
economic $ros$erit*9 !* ensuring that loan funds flo5 to $roducti.e sectors.
)hat is 5h* the 'BI rightl* stresses that $ur$ose orientation and end use
$rinci$le are im$ortant in lending.
AIMS 12
Infact9 'BI has no4t encouraged consumer finance till .er* recentl*.
:o5e.er9 things ha.e radicall* changed. Banks are a5ash 5ith e?cess
li1uidit*9 interest rates and inflation south5ards. Cor$orates do not !orro5
from !anks in a !ig 5a* due to .ariet* of reasons like economic slo5 do5n9
infrastructural constraints9 etc. Prime cor$orates manage to secure su!GP#'
rates. @nder these circumstances !anks are forced to look into the retail
segment for lending and 'BI no longer a$$lies the !rakes.
'etail credit is not un$roducti.e from the natio4nal econom*
$ros$ecti.e. )he s$urt in retail credit like consumer finance9 automo!iles9
t5o 5heelers9 financial ser.ices and home loans sector indirectl* hel$ the
econom* !* $ushing u$ the sales of the $roducts and ser.ices in.ol.ed. )hat
is 5h* central !ankers no5 .ie5 5ith fa.or retail segment lending.
Interest rates are still high on consumer finance $art of the retail credit
5hich includes $ersonal loans9 clean loans9 share loans9 e1ui$ment finance
loans9 etc. Perha$s9 interest rates 5hile fall further in course of time. Banks
need to a.oid scattered lending and concentrate on contiguous arrears and
institutional em$lo*ees for financing. Go.ernment !anks ha.e to understand
that rigorous marketing is essential to face com$etition and the* ha.e to
de.ice 5a*s to train and de$lo* a $ercentage of the sur$lus staff in marketing
efforts. Inno.ations like gratuated $a*ment mortgages9 ad-usta!le rate
mortgages etc. ha.e to !e introduced to suit the con.enience of the
!orro5ers9 in $lace of the $resent stand alone FMI structures.
AIMS 13
T*# R#"&!' /&$"r&
Indian Banking till recentl*9 5as not kno5n for its aggressi.eness in
retail !anking9 e.en though there is tremendous sco$e to !uild u$ high
.olumes. 'etail loans account for a mere 2G%I of G/P in India9 in
com$arison to around 44G%4I in Korea and )ai5an and 0"I in @+A.
)hanks to the radical change in the $erce$tion9 !anks in India are no5
e?tending retail finance .er* significantl* to the sectors like housing9
consumer dura!les9 share loans and other $ersonal loans.
Cith the onset of su$erior technolog*9 retail $roducts ha.e !ecome
cost effecti.e 5ith ne5 channels of distri!ution like A)M(+9 credit cards9
Internet9 mo!ile $hones9 etc. technolog* is also literall* forcing !anks to
design more inno.ati.e $roducts. Credit $roducts ha.e to $ossess $ricing
efficienc* 5ith $ro.ision of integrated ser.ices. Insurance $ricing 5ill
!ecome more rational. In.esting 5ill !ecome automated9 ena!ling consumers
to de.elo$ $ortfolios that meet their $ersonal needs and risk $references.
T)-&rd & )r# >r)(!"&b'# B&$?!$.
Banks are chasing retail de$osits9 5hich ha.e .ast $otential to reduce
cost of funds. In this endea.or9 the* are hel$ed 5ith the modern !anking
de.ices like )ele !anking9 Internet !anking9 Mo!ile9 !anking9 Credit cards9
etc.
AIMS 14
,n the assets side9 in a scenario of economic slo5do5n and rising
defaults9 cor$orates are no longer the $referred !orro5ers. Personal segment
ad.ances ha.e therefore come to the limelight. )here is the fierce com$etition
in the form of !alance takeo.ers for credit cards and housing loan out
standings9 on finer terms. Chile retail !anking results in 5ide distri!ution of
credit risk9 the transaction costs could !e higher9 e?ce$t in an automated
en.ironment.
R#"&!'!$. B A ,&(# b#"
Fconomic slo5do5n could !e fought through retail !anking.
Com$etition9 rising DPA(s9 lo5 em$lo*ee $roducti.it*9 high o$eration costs9
lo5 1ualit* cor$orate credit are the reasons that $ushed !anks into the retail
5a*. Banks need to ado$t strategies like $roduct inno.ation9 high 1ualit*
ser.ice9 s$eed of deli.er*9 etc.
R#"&!' b&$?!$.B .&!$!$. )#$"u
'etail !anking has made massi.e strides from the !eginning of this
millennium. Almost all !anks and leading lending agencies are no5 .*ing
5ith each other to $ark their funds to the ma?imum e?tend in retail !anking
sector9 since it is a safe and secured ad.ance 5ith !etter income earning.
#eading finance com$anies and commercial !anks ion the $u!lic and $ri.ate
sectors including all the nationaliEed !anks and ne5 and old generation
$ri.ate !anks9 are launching inno.ati.e loan $roducts M schemes tailor made
to suit all sections of the societ* M different sectors of the $u!lic.
AIMS 1"
Chapter 2
DESIGN OF THE STUDY/RESEARCH
DESIGN
AIMS 1%
II DESIGN OF THE STUDY=RESEARCH DESIGN
#ending mone* to the $ersons is one of the man* areas of !anks
!usiness. Bank 5ould like to kno5 a!out the $ro!lems and $erce$tion of its
customers. :ence this stud* has !een undertaken to find out 5hether this
scheme is more .ia!le9 customer friendl* and $ro.ides .alue added ser.ice.
2. T!TL" #F T$" %T&'( C JInno.ations in Consumer inancing in
relation to 7i-a*a Bank9 Aa*anagar Branch.L
2.2 %TAT"M"NT #F T$" PR#BL"M H )he highest .alued asset of a
!anking com$an* is its loans and ad.ances. )herefore this stud* has
!een undertaken to stud* the $rocedures for a.ailing the loan facilities
under the inno.ated schemes introduced !* the !ank and their
efficienc*.
2.) #B*"CT!+"% #F T$" %T&'( C
a. )o stud* the .arious 'etail #ending +chemes $ro.ided !*
7i-a*a Bank.
!. )o find out the efficienc* of the .arious schemes.
c. )o anal*se the gro5th of the .arious loan schemes.
d. )o identif* the a5areness of the .arious schemes among
the customers of 7i-a*a Bank.
AIMS 10
2., #P"RAT!#NAL '"F!N!T!#N #F T$" C#NC"PT%
Banking-. the term !anking is defined as Jacce$ting9 for the $ur$ose of
lending or in.estment9 of de$osits of mone* from the $u!lic9 re$a*a!le on
demand or other5ise9 and 5ithdra5 a!le !* che1ue9 draft9 order or
other5iseL.
C/sto0er-. A $erson 5ho has a !ank account in his name and for 5hom the
!anker undertakes to $ro.ide the facilities as a !anker9 is considered to !e a
customer.
Loan- 5 under the loan s*stem 9 credit is gi.en for a definite $ur$ose and for a
$redetermined $eriod
!nterest- 5 $a*ments made * a !orro5er for the use of mone*9 calculated as
$ercentages of the ca$ital !orro5ed.
Moratori/0 perio1- 5 tem$orar* sto$ of re$a*ments of interest on loan or
ca$ital o5ned
Repa20ent perio1- 5 It is a $eriod in 5hich the loan amount should !e re$aid.
%3ope of %t/12 C )he stud* has !een conducted in 7i-a*a Bank9 Aa*anagar
IIIrd Block Branch Bangalore.
AIMS 12
2.4 AR"A #F %T&'(
)he cit* of Bangalore 5as chosen for three main reasons
1. It has a lot of $eo$le 5orking as go.ernment em$lo*ees.
2. It is one of the cosmo$olitan cities in India.
3. )he income dis$arities among the resident is .er* high.
)he stud* 5as also limited to 5orking $eo$le 5ith the monthl* income of
ru$ees 2444 and a!o.e.
2.5 M"T$#'#L#6( AN' 'ATA C#LL"CT!#N
'ata Colle3tion Metho1s 7
)he data has !een collected mainl* through t5o sources6
a= Primar* /ata
!= +econdar* /ata
Pri0ar2 'ata C )he data9 5hich is collected es$eciall* for a stud* and is not
$u!lished in an* form !efore is called Primar* data. Information has !een
o!tained through general discussion 5ith the Branch Manager. /ata has also
!een collected through a 1uestionnaire.
%e3on1ar2 'ata C )he secondar* data for the stud* of inno.ations in
consumer financingMretail lending is mainl* collected through6
a= Annual 'e$orts
!= Management 'e$orts
c= MagaEines
AIMS 13
d= Circulars N
e= Internet
2.8 %AMPL!N6 AN' %AMPL!N6 T"C$N!9&"%
+ince the $o$ulation of the customers 5ith monthl* income of 's. 2444 and
a!o.e and 5ho are 5orking as go.ernment em$lo*ees is .er* .ast in the cit*
of Bangalore. It 5as .er* difficult to carr* out 144 $ercent co.erage stud*
5ithin a limited $eriodO hence sam$ling sur.e* method is ado$ted for this
stud*.
a= &ni:erse- All the $eo$le 5orking as go.ernment em$lo*ees and
falling in the monthl* income !racket of ru$ees 2444 and a!o.e.
!= %a0pling 0etho1sB A $re re1uisite for doing $ro!a!ilit* sam$ling is
that here should !e com$lete kno5ledge a!out all the sam$ling units in
the uni.erse since this 5as not so9 non $ro!a!ilit* sam$ling 5as used.
c= %a0ple si;e- +am$ling siEe is 34 res$ondents 5ho are using .arious
loan schemes.
2.< F!"L' %T&'(
)he res$ondents 5ere directl* a$$roached !* the researcher. It took a!out 2"
to 34 minutes to administer each 1uestioner. )his 5as !ecause of the fact that
all the $eo$le 5ere 5orking $eo$le.
AIMS 24
2.= PLAN #F ANAL(%!%
)he data collected through 1uestionnaires and from the !anks records !ooks
5as ta!ulated and anal*sed se$aratel*. Chere.er $ossi!le ta!les 5ere dra5n
and $ercentages 5ere calculated.
2.> L!M!TAT!#N% #F T$" %T&'( 7
a= )he stud* is onl* limited to 7i-a*a Bank9 Aa*anagar IIIrd Block
Branch.
!= )he stud* has !een constrained onl* to the inno.ations in retail
lendingMconsumer financing.
c= )he stud* does not include com$etition from the .arious other lending
institutions 5ith regards to Consumer inancing.
d= )he stud* 5as not an e?tensi.e one due to the time constraint.
2. #+"R+!"W #F T$" C$APT"R %C$"M"
Chapter- !ntro1/3tion
)he theoretical as$ects of the stud* 5ith detailed rele.ance to !anking
s*stem9 $rogress of commercial !anks and functions of commercial !anks9
ser.e as introductor* cha$ter.
AIMS 21
Chapter 2- 'esign #f The %t/12
)his cha$ter e?$lains research design9 research $ro!lem9 o!-ecti.es of the
stud*9 o$erational definitions of the conce$ts9 methodolog*9 sam$ling $lan9
tools for data collection9 field 5ork9 $lan of anal*sis9 limitations of the stud*
and o.er.ie5 of the cha$ter scheme.
Chapter )- Profile #f The Bank
)his cha$ter gi.es a $rofile of the 7i-a*a !ank and $rofile of the retailG
lending schemes of 7i-a*a !ank
Chapter ,- Anal2sis #f 'ata
)his cha$ter9 5hich deals 5ith the anal*sis of data9 collected from the
res$ondents and from the record !ooks of the !ank. )a!les9 gra$hs9 and
charts are included in this cha$ter.
Chapter 4- Fin1ings? Re3o00en1ations An1 Con3l/sion
)his cha$ter contains a summar* of findings and conclusions of the stud* and
recommendations in the light of the findings.
AIMS 22
Chapter 3
PROFILE OF THE BANK
AIMS 23
). C#MPAN( PR#F!L" - +!*A(A BAN@
+!*A(A BAN@ 7 A histori3al Perspe3ti:e
7i-a*a Bank #imited 5as founded se.ent*Gone *ears ago in the coastal
to5n of Mangalore in the /akshina Kannada district of Karnataka state !* a
grou$ of agriculturists 5ith the $ur$ose of ser.ing a small communit* of
farmers of the district. )oda*9 it is a household name in the countr*9 ser.ing
$eo$le from all 5alks of life through a 5ide net5ork of !ranches s$read o.er
2" states and 3 union territories.
7i-a*a !ank has indeed come a long 5a*. After ha.ing !uffeted the
storms of great de$ression9 sur.i.ed the 13%4(s 5hen small !anks 5ere
merged 5ith the !ig ones9 7i-a*a !ank emerged stronger and !egan its
e?citing -ourne* to success !* $ursuing a d*namic !ranch e?$ansion $olic*
5hich ena!led to gro5 to an all India Bank. )he !ank 5as nationaliEed on the
1"
th
A$ril 1324. this o$ened a ne5 cha$ter in its histor* H a cha$ter of ser.ice
to the need* and under$ri.ileged 5hich 7i-a*a Bank is all geared to meet.
Fro0 $/0ble Beginnings
#ooking !ack9 the genesis of 7i-a*a Bank can !e traced to the efforts
of a grou$ of enlightened men9 5ho in those da*s had the foresight to
en.isage the needs for a !ank to ser.e their follo5 farmers. 7i-a*a Bank
limited commenced o$erations on 23
rd
,cto!er 13319 5ith an authoriEed
ca$ital of 's. " lakh and a $aid u$ ca$ital of 's. 2%04.44. )he !ank 5as
housed in a rented !uilding in Mangalore.
AIMS 24
"arl2 (ears
Another significant ste$ 5as the o$ening of a !ranch in Bom!a*9 thus
e?$anding the !anks o$erations !e*ond the south Kanara district. )his 5as in
kee$ing 5ith the changing tem$o of the times. )he national mo.ement for
Inde$endence had united the $eo$le casting aside all $ro.incial arid caste
!arriers. 7i-a*a Bank limited not onl* e?$anded geogra$hicall*9 !ut thre5
o$en a fresh issue of the Bank shares to all Indian nationals. B* the end of
13"19 the !ank(s $aid u$ ca$ital rose to 's 0." lakh and de$osits to 's 41
lakh. )he !anks total resources crossed the 's 1 crore mark in 13"%. 7i-a*a
Bank limited 5hich commenced o$erations in a rented house 5as also the
$roud o5ner of a !uilding to house its administrati.e office. 7i-a*a Bank
limited Pcele!rated its sil.er -u!ilee on 14
th
Aanuar* 13"0.
A %3he1/le1 Bank
Cith effect from 23
th
Do.em!er 13"29 7i-a*a Bank limited !ecame a
scheduled commercial !ank9 5hen the 'eser.e Bank of India included it in
the +econd +chedule to the 'BI Act 1334. the !ank made further $rogress
and at the end of /ecem!er 13%19 de$osits totaled 's 1.44 crores9 !ranches
num!ered 219 5hile the staff strength reached 1"3.
"ra of Mergers
/uring the *ear 13%4(s9 the 'BI ado$ted a $olic* !* 5hich the num!er of
!anking institutions in the countr* 5ould !e reduced to an administrati.el*
managea!le num!er. )his 5as to !e achie.ed !* merging the smaller !anks
AIMS 2"
5ith the com$arati.el* larger ones. As a result of the $rotracted negotiations
and concerted efforts9 the smaller !anks s$read o.er Kerala9 )amil Dadu and
Karnataka 5ere merged 5ith 7i-a*a Bank. )heir !ranches and assets that
5ere taken o.er !* 7i-a*a Bank limited are gi.en !elo5 H
<'u$ees in lakh=
N&# )( "*#
b&$?: %'&8# E
S"&"#
D&"# )(
"&?#5)6#r
A)u$" )(
d#%),!",
Ad6&$8#, Nub#r )(
br&$8*#,
/e.anga Bank
#td.9
Bangalore9
Karnataka
21.14.13%3 13.24 %.%2 2
/akshina
Bharat Bank9
Frnakulam9
Kerala
12.43.13%4 23.3" 2.01 4
Chala$uram
Bank #td.9
Calicut9
Kerala
13.14.13%4 2%.11 1%.24 2
)ale$aram!a
Bank #td.9
)ale$aram!a9
Kerala
24.12.13%4 1.2% 1.%3 1
)ellicherr*
Bank #td.9
)ellicherr*9
Kerala
2%.12.13%4 14.%3 %.%3 3
7*s*a 22.12.13%4 12.0% 0.%4 3
AIMS 2%
Merchantile
Bank #td.9
'amanagaram
9 Karnataka
Coonoor
+u!raman*a
7ilasa
@$akarna
Bank #td.9
Coonoor9
)amil Dadu
14.40.13%" 3.23 %."3 2
:u!li Cit*
Bank ltd.9
:u!li9
Karnataka
20.42.13%% 23.43 13.%2 2
Aa*alakshmi
Bank #td.9
Mangalore9
Karnataka
20.4".13%0 1%3.14 01.22 10
A$art from adding 42 !ranches to its net5ork9 these mergers acted as a
catal*st for the !ank(s su!se1uent gro5th. In addition9 the !ank o$ened 2%
ne5 !ranches. )he !ank(s de$osit as a result rose to 's. 13.21 crores in 13%2.
its !ranches increased to 23 and its em$lo*ees num!er to 322.
A Re3or1 6roAth Rate
13%3 5as an e.entful *ear for the !anking industr*. Banks 5ere
!rought under social control and 14 ma-or commercial !anks 5ere
nationaliEed. Another significant ste$ 5as the shifting of the !anks
administrati.e office to Bangalore. )hus !egan an era of record gro5th that
has fe5 $arallels in the histor* of Indian Banking. /uring this $eriod i.e.
AIMS 20
from 13%3 to 130% the !anks de$osit shot u$ from 's. 13.21 crores as at the
end of 13%2 to 's 221.32 crores as at the close of /ecem!er 130%9 recording
an annual a.erage gro5th rate of 42.2I. )he $aid u$ ca$ital increased from
's. 12.23 lakh to 's. 110.34 lakh 5hile reser.es reached An all time high of
's. 1"0.33 lakh. )he shareholders return in the form of di.idend dou!led
from %I to 12I. )he !ank added 300 ne5 !ranches and increased its staff
strength to 04"0 to man these ne5 offices. )he !ank mo.es to .arious states
in the north and north east. A !ank that had largel* confined its acti.ities first
to one district9 later to its o5n home states9 had no5 s$read its 5ings far and
5ide to stake its claim as an all India institution.
%pe3iali;ation an1 'e3entrali;ation
Accelerated gro5th and the conse1uent e?$ansion of the !ank called
for s$ecialiEed de$artments at the head office to handle the ne5 $ortfolios.
7i-a*a !ank #td. )herefore added the follo5ing de$artments to ena!le to
offer its customers the full range of facilities that form $art of modern
!anking ser.icesG staff training centers <1304=9 foreign e?change de$artment
<1301=9 agricultural cell <1302=9 economic and statistics de$artment <1304=9
mechaniEed data $rocessing centre <1304=.
In 130% the !ank interested the Indian Institute of Management G
Ahmeda!ad9 5ith the task of making a stud* of its reGorganiEation. Man* of
the recommendation ha.e !een im$lemented and accordingl* 12 regional
offices 5ere set u$. )his led to greater decentraliEation.
AIMS 22
Nationali;ation an1 neA 3hallenges
7i-a*a Bank #imited 5as nationaliEed on 1" A$ril9 1324. )he change
in o5nershi$ had meant a rene5ed trust to5ards im$lementing the
go.ernments economic $olicies and $rogrammes aimed at hel$ing the $oor.
)o 7i-a*a Bank #imited
)hese 5ere not altogether ne5 challenges !ecause its tradition has !een one
of ser.ice to the $oor.
)he setu$ of he head office de$artments 5as reorganiEed 5ith effect
from 1 /ecem!er 1322. A ne5 de$artment kno5n as Jrural de.elo$ment and
$riorit* sector de$artmentL had !een created to further intensif* the !anks
efforts for lending to $riorities sectors and other 5eaker sections of the
societ*.
Fffecti.e from 12 Aul* 13249 certain changes 5ere effected in the
organiEational structure of the !ank. )he !ank 5hich had a tree tire s*stem
consisting of !ranch office9 di.isional office and head office create done
more distinct tire .iE. Eonal office in !et5een the head office and di.isional
office. In all si? Eones 5ere created under the o.erall charge of assistant
general managers. Cith a .ie5 to housing all the head office de$artments
under one roof the !ank had taken u$ the construction of its o5n s$acious
head office !uilding. )he !ank s$onsored its first regional rural !ank named
AIMS 23
7is.es.ara*a Grameena Bank in march 132"9 5ith Mand*a as head 1uarters.
)he total de$osits of the !ank crossed the long cherished mark of 's. 1444
crores at the end of /ecem!er 132".
/uring 132%9 the !ank strengthened its organiEational set u$ shifting
four Eonal offices to their res$ecti.e territories .iE.9 /elhi9 Bom!a*9 Calcutta
and Madras. )5o ne5 de$artments .iE.9 Management +er.ices /e$artment
and Com$uter Polic* and Planning /e$artment 5ere created during 132% at
the head office 5ith a .ie5 to streamlining the s*stems and $rocedures of the
!ank on an ongoing !asis and to s$eed u$ the mechaniEation of !anking
o$erations res$ecti.el*. )o acti.ate the Merchant Banking Business9 the !ank
set u$ a full fledged Merchant Banking /i.ision at Bom!a* and also set u$
Merchant Banking Cells at /elhi and Calcutta.
)5o ne5 de$artments .iE.9 &Industrial Consultanc* /i.ision( and
&Credit Card /i.ision( 5ere created during 1320 for e?tending additional
ser.ices to the !anks customers. )he !ank also created a se$arate di.ision
called &Customer 'elations /i.ision( at the :ead ,ffice for e?$editing the
dis$osal of customer com$laints recei.ed.
)he !ank recorded an all round im$ro.ement during the 1" month
$eriod ended March 1323. )he total de$osits of the !ank crossed the 's 2444
crores mark. )he !ank introduced a num!er of ne5 schemes and ser.ices
such as 7i-a*a Bank credit cards9 7i-a*a krishi cards9 7i-a*a 7ichar 7ihar
during this $eriod to meet the s$ecific needs of the different categories of its
.ast clientele. )he !ank installed an A)M at its Indiranagar9 Bangalore
!ranch.
AIMS 34
7i-a*a Bank 5as the first $u!lic sector !ank in the countr* to offer the
facilit* of &A)MGcumGcredit card( to its customers.
)he !ank initiated se.eral measures to &im$ro.e( its customer ser.ice9
organiEational effecti.eness and :uman 'esources /e.elo$ment during the
*ear 1323G34. a ne5 de$artment .iE.9 &In.estment Management N Marketing
/e$artment( 5as set u$ at the :ead ,ffice to gi.e ne5 thrust to di.ersified
!anking acti.ities. )he !ank could issue credit cards e?ceeding 2"9444 5ithin
a short $eriod of 2 *ears from its introduction. A)M(s 5ere installed at 3
more !ranches. In ,cto!er 13239 the !ank !road !ased its training s*stem !*
o$ening a ne5 staff training centre in Bom!a*. )he !ank also started 7i-a*a
'ural /e.elo$ment oundation 5ith head1uarters at Mangalore to take u$
e?tension acti.ities for the !enefit of rural $eo$le. /uring 1331G329 the !ank
made further $rogress in its com$uteriEation $rogramme 5ith the installation
of a main frame at :ead ,ffice. )he first $hase of total !ranch automation of
Barakham!a road9 De5 /elhi 5as also com$leted during 1331G32. the !ank
5hich com$leted %4 *ears of ser.ice during 1331G329 conducted a large
num!er of $rograms during this diamond -u!ilee *ear.
#bBe3ti:es
)o strengthen the 'egionalMQonal offices so that these function
efficientl* and effecti.el*.
)o e?ercise strict control o.er the e?$enditure incurred at the
Administrati.e units.
AIMS 31
)o strengthen the 5orking of In.estment and unds di.ision9 so that
!oth domestic and foreign e?change treasur* o$erations are full*
integrated.
)o re.ie5 $eriodicall* the organiEational efficienc* and
effecti.eness of .arious functional de$artments at :ead ,ffice.
)o introduce the conce$t of &Management Audit( in the !ank.
)o o$en /i.isional Accounts ,ffices and Currenc* Chest at need*
centers.
)o strengthen and streamline the Management Information +*stem.
)o $ut in $lace ade1uate Asset #ia!ilit* management <A#M=
s*stems.
#rgani;ation %tr/3t/re
)he organiEation structure of the !ank consists of three tiers .iE.9 :ead
,ffice9 QonalM'egional ,ffices and the Branches. )he :ead ,ffice
concentrates mainl* on $olic* formulation9 setting of goals and strategies and
monitoring the $erformance of controlling offices .iE.9 QonalM'egional
offices. As the e?tended 5ings of the Ins$ection /e$artment at the :ead
,ffice9 the !ank has set u$ fi.e 'egional Ins$ectorates at Mangalore9 /elhi9
Calcutta9 Mum!ai and Chennai. )he !ank has a staff training college at
Bangalore and training centres each at Mulki and Mum!ai. )o centraliEe the
accounting of all foreign e?change transactions of all the !ranchesMoffice of
the !ank9 a centraliEed foreign e?change dealings and o$erations cell has
!een o$ened in Mum!ai.
AIMS 32
)he !ank has set u$ 21 'egionalMQonal offices tro e?ercise immediate
su$er.ision and control o.er the !ranches under their -urisdiction. )he
'egionalMQonal offices !elong to the same tier 5ith the controlling offices
headed !* the /e$ut* Generak Managers. Presentl* there are 14 'egional
,ffices. In addition to the !ranches9 there are 3 /i.isional Accounts ,ffices
</A,(s=9 handling the 5ork related to collection of instruments dra5n on the
!ranches in these centres and also attending to clearing functions. )he lead
!ank res$onsi!ilit* has !een assigned to the !ank in res$ect of t5o districts in
Karnataka .iE.9 /har5ad and Mand*a and the !ank has o$ened lead !ank
offices in these centres. )he onl* Grameena Bank s$onsored !* the !ank .iE.9
7ishes5ara**a Grameena Bank co.ers Mand*a district of Karnataka. )he
!ank has also esta!lished a su!sidiar* !ank .iE.9 7IBADK :,@+IDG
IDADCF #td.9 in Do.em!er 133" in Bangalore.
AIMS 33
+iBa2a Bank
#riginal set /p of $ea1 #ffi3e
AIMS 34
Chairman & Managing Director
CMDs Secretariat Executive Director
DGM MDs
Secretariat
AGM Board
Secretariat
CM GM Personnel GM Credit GM Vigilance GM Recovery
GM
Administration
Executive Director
Secretariat
C#RP#RAT" M!%%!#N
OUR MISSION IS TO EMERGE AS A
PRIME NATIONAL BANK BACKED BY
MODERN TECHNOLOGY, MEETING CUSTOMERS
ASPIRATIONS WITH PROFESSIONAL BANKING
SERVICES AND SUSTAINED GROWTH
CONTRIBUTING TO NATIONAL DEVELOPMENT.
AIMS 3"
).2 BR!"F #N T$" +AR!#&% R"TA!L L"N'!N6 %C$"M"%
7i-a*a !ank is the $ioneer in launching the modern retail lending
schemes. e5 of the retail lending schemes 5here launched in 133" itself. It
has se.eral $roducts !oth under the assets and lia!ilities side. +ome of the
im$ortant schemes are !riefl* e?$lained !elo5.
+.Cash
+.$o0e Loans
+.Professionals
+.Tra1e Finan3e
Loans to Transport #perators
+."C/ip
+.@an2a1an
+.Mangala
"1/3ational Loans
+.Rent %3he0e
AIMS 3%
+.CA%$
7GCash is a .er* con.enient scheme that one can a.ail of to meet shortGterm
credit needs u$to 's." lakhs in case of salaried $ersons and u$to 's.1."4
lakhs in case of $ensioners and u$to 's.2 lakhs in case of nonGsalaried
$ersons.
"ligibilit2-.
1= +alaried Persons.6 An* indi.idual aged !et5een 21 and %4 *ears and
em$lo*ed in +tateMCentral Go.ernmentsMPu!lic +ector @ndertakingsM
Fducational InstitutionsMPri.ate Fsta!lishments.
2= Pensioners6 /ra5ing $ension through our Bank.
3= Professional & +ellGem$lo*ed $ersons9 agriculturists.9 !usinessmen aged
less than 04 *ears ha.ing inde$endent income.
9/ant/0 of loan-.
1= +alaried $ersons6 1" months gross salar*. ,$erati.e cash credit for
e?ecuti.es dra5ing gross salar* of not les6 than 's.2"9444MG
2= DonGsalaried $ersons6 )5ice the annual income as $er the latest income
ta? assessment order.
3= Pensioners6 3 to 14 months gross $ension.
R&"# )( !$"#r#,"B12."I$a
AIMS 30
V5HO/E LOAN
>ur%),#B or construction M ac1uisition of house I flat and for re$air M
reno.ation of the e?isting house Mflat.
E'!.!b!'!"7B An* indi.idual a!o.e 12 *ears of age and sufficient income to
re$a* the loan
Fu&$"u )( ')&$B An* amount. or re$air9 reno.ation + e?tension u$ to 's
14 lakh.
S&'&r!#d %#r,)$B %4 times of last dra5n gross salar*
O"*#r,B %4 times of a.erage monthl* income of immediate $ast t5o financial
*ears.
/&r.!$B 24I of the .alue of assets.
S#8ur!"7B Mortgage of $ro$ert* to !e ac1uiredMconstructedMre$airedM
reno.ated.
R#%&7#$"B )o !e re$aid in e1ual monthl* instalments o.er a $eriod not
e?ceeding 24 *ears.
ree insurance co.er on $ro$ert* and $ersonal accident to !orro5ers.
AIMS 32
R&"# )( !$"#r#,"(%&)B
F')&"!$. F!@#d
4G" *rs 0.44 I 0."4I
,.er "G14*rs 2.44I 2.2"I
,.er 14 *rs 2.2"I 2.0"I
AIMS 33
V5>ROFESSIONAL
>ur%),#B #oans for $urchase of e1ui$ment M .ehicle for !usiness M re$airing
or reno.ating of the e?isting e1ui$ment M !usiness $remises to eligi!le
$rofessional to set u$ $ractice in rural and semiGur!an centres.
E'!.!b!'!"7B Professionals such as medical $ractitioners9 chartered
accountants9 cost accountants9 la5*ers9 engineers9 management consultants9
la! technician9 chemists 2 druggists9 etc. 5ho are not in regular em$lo*ment
of an* em$lo*er or $ersons trained in an* art or craft 5ho hold a degree M
di$loma9 to set u$ their $ractice or !usiness.
Fu&$"u )( (!$&$8#B
/&@!uB 's 1" lakhs.
Margin6 A0 ") ;0G
R&"# )( !$"#r#,"B
I$ rur&' 3 ,#!5urb&$ &r#&,B A0.30G %&
,ther areas 6 11."4I$a
Gu&r&$")rB
@$ to 's " lakhs G Guarantee of s$ouse M $arent
A!o.e 's " lakhs G )hird $art* guarantee acce$ta!le to the Bank.
R#%&7#$"B
%4 FMl 5ith re$a*ment holida*s of % months.
AIMS 44
V5TRADE
E'!.!b!'!"7B Indi.iduals M $ro$rietar* concerns M $artnershi$ firms $ri.ate
limited com$anies or an* legal entit* engaged in !usinessG retail trade9
distri!utors9 stockists9 commission agents9 etc. are eligi!le for u$ to 's 2"
lakhs finance under this scheme.
Fu&$"u )( (!$&$8#B Deed !ased credit limit su!-ect to 2"I margin on
immo.a!le $ro$erties or nil margin on other securities like D+Cs9 K7Ps.
Go.ernment securities9 etc.
R&"# )( !$"#r#,"B
@$ to 's 2 lakhs6 11."4I $a
A!o.e 's 2 lakhs6 13."4I $a
Gu&r&$")rB A guarantor acce$ta!le to the Bank.
R#%&7#$"B )he loan should !e re$aid 5ithin a $enod of 3 *ears <su!-ect to
re.ie5 e.er* *ear=.
A11.#ns
1. /emand /rafts 5ill !e issued at "4I of the eligi!le commission
2. In5ardM,ut5ard !ills 5ill !e collected at "4I of eligi!le commission.
3. Fligi!le for credit facilities under other 'etail #ending +chemes.
4 A Classic Credit card 5ith 5ai.er of entrance fee.
AIMS 41
LOAN TO TRANS>ORT O>ERATORS
E'!.!b!'!"7 B Indi.iduals9 $ro$rietar* concernsM$artner shi$firms9 $.t #td C4(s
o$erating not more than 14 7ehicle are eligi!le for loans to $urchase
.ehicle Mmeeting recurring e?$enses connected to trans$ort !usiness.
Fu&$"u )( ')&$ B 0"I of the cost of the .echicle including !od* !uilding
charges9 insurance and road ta?.
R&"# )( I$"#r#,"B
>r!)r!"7 R&"# )( I$"#r#," (F')&"!$.)
An* Amount 11."4I
N)$5%r!)r!"7
An* amount 12."4I
S#8ur!"7 B :*$othecation of .ehicles MF1ui$ment
Gu&r&$")rB A guarantor acce$ta!le to the !ank
R#%&7#$" B )he #oan should !e re$aid in not more then %4 monthl* e1ual
instalments 5ith a re$a*ment holida* of a ma?imum of % months.
Corking ca$ital facilit* is for a $eriod of 1 *ear9 5hich can !e rolled o.er
after a re.ie5
AIMS 42
V5EFUI>/ENT
>ur%),#B A con.enient finance scheme9 the 7GF1ui$ loan can !e a.ailed of
for $urchase of consumer dura!les such as com$uters9 refrigerators9
tele.isions9 air conditioners9 domestic a$$liances9 etc.
E'!.!b!'!"7B Professionals and +elf Gem$lo*ed9 em$lo*ees of Go.ernment M
Pu!lic +ector M Aoint +ector and esta!lished educational institutions and
Pensioners dra5ing ser.ice $ension through our Bank.
S#8ur!"7B :*$othecation of relati.e assets ac1uired out of the loan.
/&r.!$B 4G14I.
Fu&$"u )( ')&$B @$ to 's 3.44 lakh
R&"# )( !$"#r#,"B 11."4I $a.
R#%&7#$"B %4 monthl* instalments.
Gu&r&$")rB A guarantor acce$ta!le to the Bank.
AIMS 43
V5KANYADAN
or the first time in India9 7i-a*a Bank introduces a uni1ue loan scheme to
meet the marriage e?$enses of 5omen.
>ur%),#B or meeting the marriage e?$enses of an* 5orking 5oman or
de$endant female relati.e
E'!.!b!'!"7B
An* $erson ha.ing inde$endent income and 5ho has an unmarried
female relati.e aged a!o.e 12 *ears.
An* 5orking 5oman aged a!o.e 12 *ears 5ith an inde$endent
income <including salar*9 agricultural income9 income arising out of
in.estments9 !usiness or rentals=
Fu&$"u )( ')&$B F1ui.alent to 12 monthsB gross income 5ith a ceiling of
's ".44 lakh.
R#%&7#$"B
Fntire loan released has to !e re$aid 5ith interest 5ithin " *ears.
)he installments 5ill !e fi?ed monthl*9 1uarterl*9 halfG*earl* or
*earl* de$ending u$on the nature of acti.it* of the a$$licant and the
fre1uenc* of recei$t of hisMher income.
AIMS 44
I$"#r#,"B 14."4I $a
Gu&r&$")r=,B Guarantee of s$ouse M $arents.
S#8ur!"7B )angi!le securit* 5ithout margin in case of li1uid securities like
D+C M )erm /e$osits of our !ank M surrender .alue of life insurance $olicies9
etc. or 2"I margin in case of other securities like land and !uilding to the
e?tent of loan
AIMS 4"
V5/ANGALA
If *ou are a 5oman 5ith a regular income. 7i-a*a BankBs no.el 7GMangala
5ill meet all *our needs of consumer dura!les9 -e5eller*9 2M4 5heelers
including medical and other e?$enses.
>ur%),#,B
)erm #oan for $urchase of consumer dura!les9 -e5eller*9 2M4
5heelers9 etc.
Cash Credit <miscellaneous= to meet other e?$enses including
medical e?$enses
E'!.!b!'!"7B
All 5orking 5omen 5hose ser.ices are confirmed in an* $u!lic or
$ri.ate sector organiEationsMesta!lishments
Professional N self em$lo*ed 5omen
Fu&$"uB 1" monthsB gross salar*Mincome 5ith a ceiling of 's 3 44 lakhs. In
case hus!and is an em$lo*ee and -oining as a coGo!ligant M coG!orro5er9 his
gross salar* ma* also !e taken into consideration for the $ur$ose of
sanctioning the loan
N&"ur# )( (&8!'!"7B @$ to "4I of loan sanctioned ma* !e a.ailed of as cash
credit <miscellaneous= and the rest as term loan.
AIMS 4%
R#%&7#$" E r#$#-&'B Promote loan M secured loan entire loan has to !e
re$aid 5ith interest in not more than " *ears A$$ro$riate monthl*M1uarterl*
re$a*ment schedule 5ill !e fi?ed.
I$"#r#,"B 14."4I $a
Add5)$,B )he !eneficiaries are eligi!le for the follo5ing addGons.
ree credit card facilit* !* 5ai.ing entrance fee and annual
su!scri$tion fee
ree $ersonalM accident death insurance co.er u$ to the total amount
of the loan
ree fire and !urglar* insurance co.er u$ to the total amount of
loan on assets <e?cluding .ehicles= created out of !ank finance.
Gu&r&$")r,B ,ne guarantor acce$ta!le to the Bank is re1uired Guarantee of
s$ouse is acce$ta!le.
S#8ur!"7B )he asset $urchased out of Bank finance
AIMS 40
V5EDUCATIONAL
S"ud!#, !$ I$d!&B
E'!.!b!'!"7B +tudent of Indian nationalit* 5ho has secured admission to the
CollegeM@ni.ersit*Minstitutions.
S"ud!#, &br)&d B
E'!.!b!'!"7B +tudent of Indian nationalit* 5ho has secured admission to
foreign @ni.ersit* M Institution for follo5ing courses6
Graduation6 or -o! oriented $rofessionalMtechnical courses offered
!* a re$uted uni.ersit*
Post Graduation MCA. MBA9 M+9 etc
Courses conducted !* CIMA G #ondon9 CPA in @+A9 etc.
E@%#$,#, 8)$,!d#r#d ()r ')&$B
ees $a*a!le to the institutionMhostelM!uilding funds.
F?amination fee9 cost of !ooks9 stud* tours9 $ro-ect 5ork9 etc
)ra.el e?$enses for studies a!road.
Purchase of com$uters9 etc.
Fu&$"u )( ')&$B
+tudies in India6 Ma?imum 's 0."4 lakhs
+tudies a!road6 Ma?imum 's 1".44 lakhs
AIMS 42
/&r.!$B +tudies in India 6 @$ to 's 444lakhs Dil
A!o.e 's 4.44 lakhs "I
+tudies a!road6 1"I
<Irres$ecti.e of the amount=
S#8ur!"7B
#oans u$ to 's 4.44 lakhs Do securit*
#oans a!o.e 's 4.44 lakhs
a= Collateral securit* e1ual to 144I of the loan amount
!= A guarantor acce$ta!le to the Bank
R&"# )( !$"#r#,"B #oans u$ to 's. 4.44 lakhs 14."4I $a
#oans a!o.e 's. 4.44 lakhs 11."4I $a
R#%&7#$" *)'!d&7 = )r&")r!uB +tud* $eriod of the course P 1 *ear or %
months after gelling a -o!9 5hiche.er is earlier
R#%&7#$"B In not more than %4 FMI
AIMS 43
V5RENT
E'!.!b!'!"7B ,5ners of the $ro$ert* 5ho ha.e let out the same to re$uted
com$anies9 commercialMindustrial firms9 soft5are9 multinational com$anies9
!anks9 re$uted institutions9 etc. )his loan is a.aila!le to the o5ners <lessors=
of the $ro$ert* onl*.
Fu&$"u )( ')&$B )o the e?tent of 24I of rent e?$ected during the
une?$ired $eriod of the tenanc* or u$ to a ma?imum of not more than 124
months rent9 5hiche.er is less <less securit* de$ositsMAd.ance )/+=9
R&"# )( !$"#r#,"B 11I $a.
S#8ur!"7B
<a= #oan u$ to 's 1.44 lakh9 on clean Basis
<!= #oan a!o.e 's 1.44 lakh9 FM/)/ 5ith first M $ariG$assu charge on the
$ro$ert* 5hose rent is charged to the loan
In case the securit* of the said $ro$ert* is not a.aila!le9 FM/)/ of other
$ro$ert*Mies or other chargea!le securities9 such as D+Cs. I7Ps9 BankBs o5n
de$osits9 etc. ma* also !e o!tained.
/&r.!$B In the case of immo.a!le $ro$ert*9 a margin of 2"I to !e
maintained9 5hereas in res$ect of other li1uid securities9 it should co.er the
full loan amount.
AIMS "4
R#%&7#$"B )he loan is re$a*a!le in e1ualed monthl* instalments to5ards
$rinci$al and interest 5ithin the une?$ired $eriod of lease or 5ithin 124
months9 5hiche.er is less.
AIMS "1
Chapter- 4
ANALYSIS OF DATA
AIMS "2
,. ANAL(%!% AN' !NT"RPR"TAT!#N #F 'ATA
T&b'# CA
)a!le sho5ing the amount of funds dis!ursed to5ards the various Retail
Lending Schemes and the num!er of account holders during the $eriod March
319 2444 to Aune 349 244".
MonthM;ear Dum!er of
Account holders
Amount
/is!ursed
Percentage
March 319 2444 30" 49329209223 11I
March 319 244" 423 29329429143 21I
A$ril 349 244" 422 29%%920921% 22I
Ma* 319 244" "14 2.32923942" 23I
Aune 349 244" """ 39119"49%4" 23I
)otal 2443 339409319424 144I
I$"#r%r#"&"!)$B
rom the a!o.e ta!le it is seen that the amount dis!ursed under the .arious
retail lending schemes as 5ell as the num!er of customers a.ailing for it has
increased from March 319 2444 to Aune 349244". Chile onl* 30" $eo$le had
a.ailed of the loans during the *ear ended March 319 2444 the num!er has
increased to """ for the month ended Aune 349 244". )his re$resents an
increase of 12I in the total amount dis!ursed.
AIMS "3
Gr&%* C A
a= Gra$h sho5ing the num!er of account holders under the .arious 'etail
#ending +chemes during the $eriod March 319 2444 to Aune 349 244".
375
483 482
514
555
0
100
200
300
400
500
600
1
31-Mar-04
31-Mar-05
30-Apr-05
31-May-05
30-Jun-05
AIMS "4
!= Gra$h sho5ing the amount of funds dis!ursed under the .arious 'etail
#ending +chemes during the $eriod March 319 2444 to Aune 349 244".

Numer o! Account "olders
11%
21%
22%
23%
23%
31-Mar-04
31-Mar-05
30-Apr-05
31-May-05
30-Jun-05
AIMS ""
T&b'# C ;
)a!le sho5ing the amount of funds dis!ursed to5ards the Retail Lending
Scheme V-Cash and the num!er of account holders during the $eriod March
319 2444 to Aune 349 244".
MonthM;ear Dum!er of
Account holders
Amount
/is!ursed
Percentage
March 319 2444 2"3 19129329124 12I
March 319 244" 310 29449129%22 22I
A$ril 349 244" 314 29449119201 22I
Ma* 319 244" 322 29429319134 22I
Aune 349 244" 332 294493"9%34 22I
)otal 1""4 39349"49020 144I
I$"#r%r#"&"!)$B
rom the a!o.e ta!le it can !e concluded that although the amount of funds
dis!ursed is constant during the $eriod March 319 2444 to Aune 349 244" the
num!er of account holders has sho5n an increase during the same $eriod.
AIMS "%
Gr&%* C ;
!. Gra$h sho5ing the num!er of account holders under the 'etail
#ending +cheme 7GCash during the $eriod March 319 2444 to
Aune 349 244".
Numer o! Account "olders
25
317 314
328
332
0
50
100
150
200
250
300
350
1
31-Mar-04
31-Mar-05
30-Apr-05
31-May-05
30-Jun-05

AIMS "0
c. Gra$h sho5ing the amount of funds dis!ursed under the 'etail
#ending +cheme 7GCash during the $eriod March 319 2444 to
Aune 349 244".

Numer o! Account "olders
12%
22%
22%
22%
22%
31-Mar-04
31-Mar-05
30-Apr-05
31-May-05
30-Jun-05
AIMS "2
T&b'# C 1
)a!le sho5ing the amount of funds dis!ursed to5ards the Retail Lending
Scheme Vome loans and the num!er of account holders during the $eriod
March 319 2444 to Aune 349 244"
MonthM;ear Dum!er of
Account holders
Amount
/is!ursed
Percentage
March 319 2444 42 290"9429%01 14I
March 319 244" 34 "9"490%94"3 21I
A$ril 349 244" 34 "90192"9112 22I
Ma* 319 244" 141 "92"93%9232 23I
Aune 349 244" 144 %91193%9224 24I
)otal 430 2"93"93%90%4 144I
I$"#r%r#"&"!)$B
rom the ta!le gi.en a!o.e it can !e seen that the num!er of customers
a.ailing of this facilit* had sho5n a considera!le increase from March 319
2444 to March 319 244". )he num!ers ha.e remained more or less constant
after that $eriod. )he amount dis!ursed under this scheme also increased !*
14 I from March 319 2444 to Aune 349 244".
AIMS "3
Gr&%* C 1
a= Gra$h sho5ing the num!er of account holders under the 'etail
#ending +cheme 7G :ome loans during the $eriod March 319
2444 to Aune 349 244".
Numer o! Account holders
48
4 4
101 100
0
20
40
60
80
100
120
!u"#er o$ Account %o&'er(
31-Mar-04
31-Mar-05
30-Apr-05
31-May-05
30-Jun-05
AIMS %4
!= Gra$h sho5ing the amount of funds dis!ursed under the 'etail
#ending +cheme 7G :ome loans during the $eriod March
3192444 to Aune 349244".
Amount o! !unds disursed # in $ %
10%
21%
22%
23%
24%
31-Mar-04
2)75)42)671
31-Mar-05
5)50)76)453
30-Apr-05
5)71)85)118
31-May-05
5)85)6)238
30-Jun-05
6)11)36)280
AIMS %1
T&b'# C 4
)a!le sho5ing the amount of funds dis!ursed to5ards the Retail Lending
Scheme V- !rofessionals and the num!er of account holders during the
$eriod March 319 2444 to Aune 349 244".
MonthM;ear Dum!er of
Account holders
Amount
/is!ursed
Percentage
March 319 2444 DA DA DA
March 319 244" 1 29329444 2"I
A$ril 349 244" 1 29209232 2"I
Ma* 319 244" 1 292"9440 2"I
Aune 349 244" 1 292"9440 2"I
)otal 4 3943924% 144I
I$"#r%r#"&"!)$B
)he scheme 7G Professionals is a relati.el* ne5 scheme. It 5as introduced
during the month of Ma* 244". +ince its ince$tion9 there has !een no increase
in the num!er of customers a.ailing this facilit*. Also the amount dis!ursed
has remained constant throughout. )his can !e seen from the ta!le gi.en
a!o.e.
AIMS %2
Gr&%* C 4
a= Gra$h sho5ing the num!er of account holders under the 'etail
#ending +cheme 7GProfessionals during the $eriod March 319
2444 to Aune 349 244".
Numer o! Account "olders
1 1 1 1
0
0*2
0*4
0*6
0*8
1
1*2
!u"#er o$ Account %o&'er(
31-Mar-05
30-Apr-05
31-May-05
30-Jun-05
AIMS %3
!= Gra$h sho5ing the amount of funds dis!ursed under the 'etail
#ending +cheme 7GProfessionals during the $eriod March
3192444 to Aune 349244".
Amount o! !und disursed # in $ %
25%
25% 25%
25%
31-Mar-05
2)32)000
30-Apr-05
2)27)832
31-May-05
2)25)007
30-Jun-05
2)25)007
AIMS %4
T&b'# C 3
)a!le sho5ing the amount of funds dis!ursed to5ards the Retail Lending
Scheme Loans to Road "ransport #perators and the num!er of account
holders during the $eriod March 319 2444 to Aune 349 244".
MonthM;ear Dum!er of
Account holders
Amount
/is!ursed
Percentage
March 319 2444 3" 249%493%4 24I
March 319 244" 33 139%2941" 13I
A$ril 349 244" 33 2294291%3 21I
Ma* 319 244" 33 219%29"%3 24I
Aune 349 244" 32 219"49343 24I
)otal 1%% 194"9429422 144I

I$"#r%r#"&"!)$B
rom the a!o.e ta!le it can !e stated that the num!er of account holders
a.ailing of this facilit* and the total amount dis!ursed ha.e remained
constant from March 319 2444 to Aune 349 244".
AIMS %"
Gr&%* C 3
a= Gra$h sho5ing the num!er of account holders under the 'etail
#ending +cheme #oans to 'oad )rans$ort ,$erators during the
$eriod March 319 2444 to Aune 349 244".
Numer o! Account "olders
35
33 33 33
32
30*5
31
31*5
32
32*5
33
33*5
34
34*5
35
35*5
1
31-Mar-04
31-Mar-05
30-Apr-05
31-May-05
30-Jun-05
AIMS %%
!= Gra$h sho5ing the amount of funds dis!ursed under the 'etail
#ending +cheme #oans to 'oad )rans$ort ,$erators during the
$eriod March 3192444 to Aune 349244".

Numer o! Account "olders
20%
1%
21%
20%
20%
31-Mar-04
31-Mar-05
30-Apr-05
31-May-05
30-Jun-05
AIMS %0
T&b'# C 2
)a!le sho5ing the amount of funds dis!ursed to5ards the Retail Lending
Scheme V-"rade $inance and the num!er of account holders during the
$eriod March 319 2444 to Aune 349 244".
MonthM;ear Dum!er of
Account holders
Amount
/is!ursed
Percentage
March 319 2444 1 Credit Balance DA
March 319 244" 2 2292"9%21 23I
A$ril 349 244" 2 2092%9241 22I
Ma* 319 244" 2 2%9249%"1 20I
Aune 349 244" 2 2192"92%0 22I
)otal 3 329109244 144I
I$"#r%r#"&"!)$B
rom the a!o.e ta!le it can !e stated that there has !een a constant change in
the amount of funds dis!ursed under this scheme. )here has !een a constant
decrease in the total amount dis!ursed. Although there has !een no change in
the num!er of $eo$le a.ailing of this facilit* there has !een a marginal
decrease in the total amount dis!ursed to them.
AIMS %2
Gr&%* C 2
a= Gra$h sho5ing the num!er of account holders under the 'etail
#ending +cheme 7G )rade inance during the $eriod March 319
2444 to Aune 349 244".
Numer o! Account "olders
1
2 2 2 2
0
0*5
1
1*5
2
2*5
1
31-Mar-04
31-Mar-05
30-Apr-05
31-May-05
30-Jun-05
AIMS %3
!= Gra$h sho5ing the amount of funds dis!ursed under the 'etail
#ending +cheme 7G)rade inance during the $eriod March
3192444 to Aune 349244".
Amount o! !unds disursed # in $ %
23%
28%
27%
22%
31-Mar-04
22)25)681
30-Apr-04
27)86)201
31-May-04
26)80)651
30-Jun-04
21)25)267
AIMS 04
T&b'# C <
)a!le sho5ing the amount of funds dis!ursed to5ards the Retail Lending
Scheme V- %ducational Loans and the num!er of account holders during the
$eriod March 319 2444 to Aune 349 244".
MonthM;ear Dum!er of
Account holders
Amount
/is!ursed
Percentage
March 319 2444 11 1094092%1 13I
March 319 244" 13 239329%33 10I
A$ril 349 244" 1% 39239223 22I
Ma* 319 244" 1% 3292"9232 24I
Aune 349 244" 10 339429042 24I
)otal 03 193%92394%2 144I
I$"#r%r#"&"!)$B
rom the a!o.e ta!le it can !e concluded that 5hile there has !een an
increase of 11I in the total amount of funds dis!ursed under this scheme
from March 319 2443 to Aune 349 24449 there has onl* !een a marginal
increase in the num!er of $eo$le a.ailing of this loan facilit* from 11 to 10 in
the same $eriod.
AIMS 01
Gr&%* C <
a= Gra$h sho5ing the num!er of account holders under the 'etail
#ending +cheme 7G Fducational #oans during the $eriod March
319 2444 to Aune 349 244".
Numer o! Account holders
11
13
16 16
17
0
5
10
15
20
!u"#er o$ Account %o&'er(
31-Mar-04
31-Mar-05
30-Apr-05
31-May-05
30-Jun-05
AIMS 02
!= Gra$h sho5ing the amount of funds dis!ursed under the 'etail
#ending +cheme 7GFducational #oans during the $eriod March
3192444 to Aune 349244".
Amount o! !unds disursed # in $ %
13%
17%
22%
24%
24%
31-Mar-04
17)47)261
31-Mar-05
23)38)63
30-Apr-05
3)2)223
31-May-05
32)25)238
30-Jun-05
33)48)708
AIMS 03
T&b'# C H
)a!le sho5ing the amount of funds dis!ursed to5ards the Retail Lending
Scheme- V-Mangala& V-%'uip& V-(an)adan & V-Solar and the num!er of
account holders during the $eriod March 319 2444 to Aune 349 244".
MonthM;ear Dum!er of
Account holders
Amount
/is!ursed
Percentage
March 319 2444 1 049242 3I
March 319 244" 4 %9229302 22I
A$ril 349 244" 4 %9319241 23I
Ma* 319 244" % 09349%24 2%I
Aune 349 244" % 09339204 2%I
)otal 21 229429203 144I
I$"#r%r#"&"!)$B
or the $eriod ended March 319 2444 the retail lending schemes 7GMangala9
7GKan*adan and 7G+olar had not *et !een initiated. All these schemes 5ere
started in the late half of 2443. :o5e.er since its ince$tion these schemes
ha.e sho5n an increase !oth in terms of the num!er of account holders as
5ell as the amount dis!ursed. )here has !een a constant increase as is e.ident
from the ta!le gi.en a!o.e. @nder the schemes listed a!o.e there has !een a
4I increase in the total funds dis!ursed from March 319 2444 to Aune 349
244".
AIMS 04
Gr&%* C H
a= Gra$h sho5ing the num!er of account holders under the 'etail
#ending +chemes6 7GMangala9 7GKan*adan9 7GF1ui$ and 7G
+olar during the $eriod March 319 2444 to Aune 349 244".
Numer o! account holders
1
4 4
6 6
0
1
2
3
4
5
6
7
!u"#er o$ Account %o&'er(
31-Mar-04
31-Mar-05
30-Apr-05
31-May-05
30-Jun-05
AIMS 0"
Anal2sis of 9/estionnaire
Dum!er of 'es$ondents H 34 <randoml* selected=
T&b'# C I
)a!le sho5ing the a5areness le.el of the .arious loan schemes offered !*
7i-a*a Bank among the res$ondents.
Particulars Dum!er of
'es$ondents
Percentage
7G:ome #oans 34 144I
7Gcash 34 144I
7GFducational #oans 2% 20I
#oans to )rans$ort
,$erators
21 04I
7G)rade inance 13 %3I
7G'ent 10 "0I
7GProfessionals 10 "0I
7GKan*adan 1% "3I
7GMangala 13 43I
7GF1ui$ 11 30I
I$"#r%r#"&"!)$B
rom the a!o.e ta!le it is e.ident that 5hile 20I of the res$ondents 5ere
a5are of the loan scheme 7GCash9 onl* 30I of the res$ondents 5ere a5are
of the scheme 7GF1ui$. 7G:ome #oans and 7GCash are the t5o schemes9
5hich had 144I a5areness among the res$ondents.
AIMS 0%
Gr&%* C I
a= Gra$h sho5ing the a5areness le.el of the .arious loan schemes
offered !* 7i-a*a Bank among the res$ondents.
0
0*1
0*2
0*3
0*4
0*5
0*6
0*7
0*8
0*
1
+-,o"e
-oan(
+-.ra'e
/inance
+-Man0a&a
A&areness level among the Res'ondents
1ercenta0e
AIMS 00
!= Gra$h sho5ing the num!er of res$ondents 5ho 5ere a5are of the
.arious loan schemes offered !* 7i-a*a Bank.
!u"#er o$ 2e(pon'ent(
0
5
10
15
20
25
30
35
+
-
,
o
"
e
+
-
E
'
u
c
a
t
i
o
n
a
&
-
o
a
n
(

t
o
+
-
2
e
n
t
+
-
3
a
n
y
a
'
a
n
+
-
M
a
n
0
a
&
a
+
-
S
o
&
a
r
!u"#er o$
2e(pon'ent(
AIMS 02
T&b'# C A0
)a!le sho5ing the num!er of res$ondents 5ho had taken loans from 7i-a*a
Bank.
Particulars Dum!er of
'es$ondents
Percentage
Account :olders 24 24I
DonGaccount :olders % 24I
I$"#r%r#"&"!)$B
rom the a!o.e ta!le 5e can see that 24 out of the 34 res$ondents had an
account in 7i-a*a Bank 5hile % res$ondents i.e. 24I did not ha.e an account
5ith 7i-a*a Bank.
AIMS 03
T&b'# C AA
)a!le sho5ing the num!er of res$ondents 5ho had taken loans from 7i-a*a
Bank. <,ut of the res$ondents 5ho had an account in 7i-a*a !ank =
Particulars Dum!er of
'es$ondents
Percentage
Accountholders 5ho
had a.ailed loans
1% %0I
Accountholders 5ho
did not a.ail loans
2 30I
I$"#r%r#"&"!)$B
,ut of the 24 res$ondents 5ho had an account in 7i-a*a Bank9 1% of them
ha.e a.ailed of loans from the !ank 5hile the remaining 2 res$ondents did
not take an* loan from 7i-a*a Bank.
AIMS 24
T&b'# C A;
)a!le sho5ing the $reference for the .arious !anks for a.ailing loans !* the
res$ondents in the current scenario. < In order of $reference =
Particulars Dum!er of
'es$ondents
Percentage
Pri.ate Banks 13 43I
7i-a*a Bank 1" 34I
,ther Dationalised
Banks
14 23I
I$"#r%r#"&"!)$B
rom the a!o.e ta!le it is e.ident that 43Ires$ondents $referred Pri.ate
Banks to a.ail loans from. 7i-a*a Bank came second 5ith 34I of the
res$ondents.
AIMS 21
T&b'# C A1
)a!le sho5ing the $reference of the res$ondents to5ards General #oans and
+$ecial Pur$ose #oans.
Particulars Dum!er of
'es$ondents
Percentage
General #oans 13 %3I
+$ecial Pur$ose #oans 11 30I
I$"#r%r#"&"!)$B
Chile %3I of the res$ondents $referred General #oans9 30I of the
res$ondents $referred +$ecial Pur$ose #oans.
AIMS 22
Chapter 5
FINDINGS, CONCLUSION AND
SUGGESTIONS
AIMS 23
4. %&MMAR( #F F!N'!N6%-.
1. )he total dis!ursements under retail lending schemes during
2444G4" amounted to 's. 2331.31 crore. )he outstanding
ad.ances under retail lending schemes stood at 's. "442.32 core
in March 244"9 as com$ared to 's. 3341.3% crore in March
24449 registering a gro5th rate of 23.4I
2. Fducation #oan scheme has !een gi.en a s$ecial thrust. )he
outstanding under education loans stood at 's. 22.43 crore in
March 244"9 as against the le.el of 's. "3.04 crore in March
24449 registering an im$ressi.e gro5th rate of 40."I.
3. 7GCash is a $o$ular retail lending scheme. :o5e.er there has
!een onl* a marginal increase in the total amount of funds
dis!ursed under this account. )he num!er of account holders
also sho5ed a marginal increase during the same $eriod. R)a!leG
2S
4. 7G:ome #oans constituted the ma?imum $ro$ortion of the total
amount dis!ursed accounting for nearl* %"I of the total funds
dis!ursed during the $eriod March 319 2444 to Aune 349 244".
)he total amount dis!ursed stood at 's. %91193%9224 for the
$eriod ended Aune 349 244". R)a!leG3S
AIMS 24
". 7GProfessionals had a constant gro5th rate in terms of the total
amount dis!ursed for the $eriod March 319 2444 to Aune 349
244". )here 5as no increase in the num!er of account holders
during the same $eriod. R)a!leG4S
%. )he other ma-or constituent of the retail lending scheme is the
#oans to 'oad )rans$ort ,$erators. )here has ho5e.er !een a
marginal decline in the total amount dis!ursed during the last 3
months ended Aune 349 244" as 5ell as the num!er of account
holders a.ailing of this facilit*. R)a!leG"S
0. 7GFducational #oans has sho5n a significant increase !oth in
terms of the total amount dis!ursed as 5ell as the num!er of
account holders a.ailing of this facilit*. )he amount dis!ursed
for the month ended Aune 349244" <'s. 339429042= is nearl*
244I of the amount dis!ursed for the month ended March
3192444. R)a!leG0S
2. 7GKan*adan9 7GMangala9 7GF1ui$ and 7G+olar are relati.el*
ne5 schemes. 7GMangala9 7GKan*adan and 7G+olar 5ere
introduced during the *ear 2443. )here has !een a constant
increase in the total amount of funds distri!uted under these
accounts. )he num!er of account holders ha.e ho5e.er
remained constant. R)a!leG2S
AIMS 2"
3. )he a5areness le.els of the res$ondents .aried for the different
loan schemes. Chile the retail schemes 7GCash and 7G:ome
#oans had 144I a5areness le.els9 7GF1ui$ on the other hand
had onl* 30I a5areness le.el. R)a!leG3S
14.)he ma-orit* of the res$ondents <43I= said that the* 5ould
$refer Pri.ate Banks 5hen a.ailing loans in the current scenario.
+econd $reference 5as gi.en to 7i-a*a Bank. R)a!leG12S
11. %3I of the res$ondents $referred General loans against s$ecial
$ur$ose loans. ,ne of the $rimar* reasons !eing fle?i!ilit* in
o$erations. R)a!leG13S
AIMS 2%
4.2 %&66"%T!#N%
/isGintermediation9 deregulation and glo!aliEation ha.e resulted in e?cess
li1uidit* in the !anking s*stem9 forcing the !anks to go retail. 'eser.e !ank(s
fa.ora!le stance to5ards $ersonal finance has also hel$ed the cause of retail
lending. 'etail !anking has resulted in customer relations !ecoming $rice
focused and relationshi$ dri.en. )hanks to the onset of su$erior technolog*9
!anks are a!le to ado$t a multiGdistri!ution channel in retailing. :o5e.er
efficient management of customer relationshi$ remains the ke* to success.
Banks need to define their market access strategies9 address securit* and risk
management issues to augment higher .olumes.
%trategies to !0pro:e Retail Len1ing %3he0es-
'etail segments $ro.ide necessar* lee5a* to !anks to go for .olumeG
!ased !usiness9 to offset the decline in margins in a $ersistentl*
do5n5ard interest regime.
)he !ank should go for JBu* no5 $a* later strateg*L9 since these are
high net5ork assets de$ending u$on the market situation.
Banks should take ad.antage of the $resent lo5 interest rate scenario
and tr* to !uild u$ lending .olumes through effecti.e marketing and
.arious deli.er* channels.
AIMS 20
@$grade the $rofita!ilit* mi? of !orro5ers <retail .s 5holesale= to
kno5 the !eha.ioral $attern9 $rimaril* through a se$arate Marketing
Cell on #oan Products and +er.ices.
As $art of the marketing strateg*9 !anks could organiEe s$ecial
e?hi!itions9 trade sho5s in strategic locations at times of festi.al
cele!rationsMe.ents9 etc. to create a5areness among $eo$le.
+mall $am$hlets <containing s$ecific retail loan $roducts9 features9
FMI structure !oth on floating and fi?ed interest !asis9 re$a*ment
$eriods9 re1uired documentations9 etc.= can !e distri!uted 5hile
customers .isit to the !ranches to a.oid dela* in the $rocessing of
loans as 5ell as to educate them on the im$ortance of retail loan
schemes.
/e$ending u$ on the 1uantum of loan and credit rating of customer9
softer re$a*ment termsMschedule9 s$eciall* for a.ailing .arious
schemes9 could !e thought of.
)ie u$s !et5een manufacturer and !anks9 and communicating the
finance o$tions9 as $art of the $roduct communications to the customer
to dri.e .olumes and increase the retail lending $enetrations.
+cout for increasing lending o$$ortunities !* ado$ting ne5 strategies
and inno.ations9 since market de$ends 5holl* in 5hite goods like ).7.
'efrigerator9 Car etc.
AIMS 22
Interest should !e attracti.e9 1uick $a*ment and eas* reco.er* should
!e their making it more customer friendl*.
Before the lending method 5as 1uite rigid9 securit* oriented9 !ut no5 it
has !ecome need !ased.
AIMS 23
4.) C#NCL&%!#N-
#ending to indi.iduals for consum$tion or in.estment 5ill !e inflationar*.
)ill a decade this 5as the ma?im dri.ing the !anks. In those da*s9
ca$ital 5as relati.el* scarce9 inflation 5as s$iraling9 and hence ca$ital
allocation 5as confined to creation of $roducti.e assets that could
augment G/P. Glo!aliEation and the resulting o$ening u$ of domestic
market to IIs and the $ermission to the Indian cor$orates to ta$ glo!al
financial markets ha.e all dramaticall* changed the market scenario.
Inflation is relati.el* sta!iliEed at a tolera!le le.el. /emand for
credit has almost reached a $lateau from the traditional sectors.
Conse1uentl*9 the !anking s*stem is o.erGhung 5ith li1uidit*. )his has
com$elled !anks to scout for alternate a.enues to de$lo* their funds9
and thus emerged the conce$t of retail lending.
'etail !anking has changed the relationshi$ !et5een !anks and
customers. Changing !usiness models9 cost relations9 customer
relations9 integration of glo!al financial markets9 technolog*
con.ergence and incessant introduction of ne5 $roducts and ser.ices9
demanding and less lo*al customers ha.e !ecome the im$ortant change
dri.ers across the glo!e.
AIMS 34
)he focus of retail !anking has !een constantl* e.ol.ing6 in the
earl* 34s it 5as &$roduct focus(O in the late 34s it 5as &sales focus(O and
!* 24449 it !ecame &$rice focused( and toda*9 it is &relationshi$G
dri.en(.
+ome of the reasons for the emergence of retail lending in our
countr* ha.e !eenG
a= Increased Middle Class /emand
!= /ifferential Interest 'ates
c= 7olume ,rientation
d= Paradigm shift from Cor$orate #ending
)he Indian retail !anking industr* is still at a nascent stage9 !ut
undergoing tremendous changes9 though notGinGline 5ith glo!al
$ro$ortions. As the $la*ers in the market ada$t to retail !anking9 the*
need to alter their $roduct mi?9 deli.er* channels and cor$orate
structure to !etter e1ui$ themsel.es to face the stiff com$etition
ahead.
)o increase their foothold in the retail finance market9 !anks 5ill
ha.e to learn that change should not !e onl* limited to the $roduct
$rofile and com$etiti.e $ricing.
AIMS 31
+er.ice and s$eed of deli.er* are e1uall* im$ortant. Moreo.er9
the credit is no longer9 a scarce commodit* and !ankers are o$erating
in the !u*er market. Do5 almost all the !anks are la*ing the thrust in
terms of retail lending and this is mainl* attri!uted to the fact that the
customer is the ke* in the industr*.
In .ie5 of the a!o.e9 retail !anking is all set to change the nuances of !asic
!anking in a ma-or 5a*9 as retail consolidation $romises to !e a $o5erful
catal*st in managing the o.erall transformation of retail lending. )o sta* in
this area inno.ati.e method should !e !rought !ecause lots of com$etitions
e?ist among !anks.
AIMS 32
AIMS 33
*o/rnals
7i-a*a Bank Annual 'e$orts
'BI Circulars
Websites
555.r!i.org.in
555..i-a*a!ank.com
Maga;ines
)he inancial )imes
)he Fconomic )imes +u$$lements
AIMS 34
Annexure
*uestionnaire
(e) $inancial Indicators
+alance Sheet
AIMS 3"
9/estionnaire
Na0e . Age . %eD .
Nat/re of e0plo20ent
+elf em$lo*ed
+alaried
Business <o5ned=
,thers9 $lease s$ecif* 'esignation .
Monthl2 !n3o0e
Belo5 's 14444
14444G24444
24444G34444
A!o.e 's 34444
A. Ar# 7)u &$ A88)u$" H)'d#r !$ V!J&7& B&$?D
;es
Do
AIMS 3%
;. I( 7#,: -*&" ?!$d )( &$ &88)u$" d) 7)u *&6#D
Current Account
+a.ings Account
i?ed /e$osit Account
,thers9 $lease s$ecif*
1. D) 7)u "&?# ')&$, ()r &$7 %ur%),#
;es
Do
4. I( 7#,: -*&" &r# 7)ur %),,!b'# &6#$u#,D
Banks
inancial Institutions
Mone*lenders
,thers9 $lease s$ecif*
3. A)$. "*# 6&r!)u, b&$?,: -*!8* b&$? -)u'd 7)u %r#(#r ") &6&!'
"*# ')&$ (r)D
7i-a*a Bank
Canara Bank
+tate Bank of India
Pri.ate Banks <$lease s$ecif*=
,thers9 $lease s$ecif*
AIMS 30
2. W*!8* )( "*# ()'')-!$. ')&$, b#!$. )((#r#d b7 V!J&7& B&$? &r# 7)u
&-&r# )(D
7Gcash
7Ghome loan
7G$rofessional
7Ge1ui$
7Gmangala
7Grent
7Gkan*adan
Fducational loans
)rade finance
#oans to )rans$ort ,$erators
7Gsolar<heating=
7Gsolar<lighting=
<. W*!8* &)$. "*#,# *&6# b##$ "*# ,)ur8#, )( ')&$ &-&r#$#,,D
Print media
Bank officials
Colleagues
riends
,thers9 $lease s$ecif*
AIMS 32
H. W*!8* )( "*# &b)6# #$"!)$#d ')&$ ,8*##, *&6# 7)u &6&!'#d )(D
<$lease s$ecif*=
I. W*&" &r# "*# (&8")r, "*&" *&6# !$('u#$8#d 7)u ()r 7)ur d#8!,!)$
r#.&rd!$. "*!, ')&$D
Cord of mouth
Ad.ertisements
riends
Print media
Colleagues
,thers9 $lease s$ecif*
A0.W*&" &r# "*# (#&"ur#, 7)u '))? ()r -*!'# &6&!'!$. & ')&$D
Afforda!le FMI
A.aila!ilit* o$tions
le?i!le installments
Ma?imum loan amount
Collateral securities
,thers9 $lease s$ecif*
AA. A)$. "*# &b)6# #$"!)$#d (#&"ur#,: -*!8* (#&"ur# &88)rd!$. ")
7)u !, )," !%)r"&$" &$d !$('u#$8#, 7)ur d#8!,!)$ ),"D
AIMS 33
A;. D) 7)u %r#(#r KG#$#r&' L)&$,L )r KS%#8!&' >ur%),# L)&$,LD
General #oans
+$ecial Pur$ose #oans
A1. >'#&,# ,"&"# 7)ur r#&,)$, ()r "*# ,&#.
A4. H)- #((#8"!6# *&, V!J&7& B&$? b##$ !$ %),"5')&$ ,#r6!8!$.D
F?cellent
7er* good
Good
A.erage
Poor
A3. W)u'd 7)u b# -!''!$. ") &6&!' )( ')&$, (r) V!J&7& B&$? !$ "*#
(u"ur#D
;es
Do
AIMS 144
@e2 Finan3ial !n1i3ators for the last 2 2ears an1 proBe3tions for the 3/rrent
2ear
<'u$ees in lakhs=
Indicators March 319 2444 March 319 244" March 319 244%
)urno.er 1124.22 1231.32 130"
Increase in
)urno.er I o.er
$re.ious *ear
%.34 14.01 14.30
PB/I)
#ess6 Interest 2."2 %.44 22.13
Det Cash Profit
!efore
de$reciation and
ta?
131.40 102.4" "4.33
#ess6 /e$reciation 31.3" 33.34 32."4
#ess6 )a?
Det Profit after
de$reciation and
ta?
122.32 112.43 32.%%
Ca$ital <$aid u$= 424.4" 442.%3 4%4.23
Det Corth 424.4" 442.%3 4%4.23
Current 'atio 3.01 2.2% 2.33
+tock )urno.er
'atio
13.4" 13.10 1%.34
)otal outstanding
lia!ilitiesMtotal net
5orth ratio
23.22 "".00 %4.14
AIMS 141