Chapter - 1

Rationale Of The project

The research is undertaken on the Topic Disbursement of loan and
Perception of youth with reference to SBI vindhyachal Bhawan Branch, The study
Helped us to increase our understanding regarding the disbursement procedure of
loans, Also helped us to understand the Methodology adopted by banks to calculate
the EMI and the relation between the principal & interest components. The
questionnaire helped to understand the perception of youth towards the loan. How
well they are educated with the procedure of bank and loan disbursement. It also
helps us to understand the todays youth requirements.
Bank got to know about the perception of youth and how this survey
would help them to analyze and make necessary changes to their policies.Also
helps them to know the procedure to avail loans so they can tap the huge market
of youths and increase their costumer base. As India has 60% of population which
is in the age group of 21yrs - 32yrs. Thus this survey will help the banks a lot, As to
create some customized schemes for this particular class and fulll their
requirements.

Objectives of Study

- To nd the calculation of EMI payments Based on maths of nance.
- To nd the trends of EMI loans from 2005 - 2012.
- To nd the perception of youth towards loan disbursement & EMI.
Methodology
Primary Data
- A study conducted on 70 respondents comprising of 48 male and 22 female
respondents answered 10 directed questions based on scaling.
Secondary Data
- Total gures of loans and advances disbursed by the the branch for year
2005 - Dec 2012
Tools Used
- Graphs
- Scaling Table
- Mean
- Chi-Square test for testing the Hypothesis
Limitations
- The primary data that was collected was collected from the educated
youths which is only one part of the society and thus cannot be considered
as a whole.
- The sample size take was of 70 respondents and thus the sample size is
small to represent the whole population.
- The secondary data collected was available only till Dec 2012 and thus the
assumptions and suggestions may not be apt
Chapter - 2
Introduction
State Bank of India is the largest state-owned banking and nancial services
company in India. The Bank provides banking services to the customer. In addition
to the banking services, the Bank through their subsidiaries, provides a range of
nancial services, which include life insurance, merchant banking, mutual funds,
credit card, factoring, security trading, pension fund management and primary
dealership in the money market. The Bank operates in four business segments,
namely Treasury, Corporate/ Wholesale Banking, Retail Banking and Other
Banking Business. The Treasury segment includes the investment portfolio and
trading in foreign exchange contracts and derivative contracts. The Corporate/
Wholesale Banking segment comprises the lending activities of Corporate Accounts
Group, Mid Corporate Accounts Group and Stressed Assets Management Group.
The Retail Banking segment consists of branches in National Banking Group, which
primarily includes personal banking activities, including lending activities to
corporate customers having banking relations with branches in the National
Banking Group. SBI provides a range of banking products through their vast
network of branches in India and overseas, including products aimed at NRIs.
The State Bank Group, with over 16,000 branches, has the largest banking
branch network in India. The State bank of India is the 10th most reputed company
in the world according to Forbes. The bank has 156 overseas ofces spread over
32 countries. They have branches of the parent in Colombo, Dhaka, Frankfurt,
Hong Kong, Johannesburg, London and environs, Los Angeles, Male in the
Maldives, Muscat, New York, Osaka, Sydney, and Tokyo. They have offshore
banking units in the Bahamas, Bahrain, and Singapore, and representative ofces
in Bhutan and Cape Town. State Bank of India was incorporated in the year 1955.
The Bank traces their ancestry to British India, through the Imperial Bank of India,
to the founding in 1806 of the Bank of Calcutta, making them the oldest commercial
bank in the Indian Sub-continent.
The Government of India nationalized the Imperial Bank of India in the year
1955, with the Reserve Bank of India taking a 60% stake, and name was changed
to State Bank of India. In the year 2001, the SBI Life Insurance Company was
started by the Bank. They are the only Bank that have been permitted 74% stake in
the insurance business. The Bank's insurance subsidiary 'SBI Life Insurance
Company' is a joint venture with Cardif S.A in which Cardif holds 26% of the stake.
During the year 2005-06, the bank introduced 'SBI e-tax' an online tax payments
facility for direct and indirect tax payment. They also launched the centralized
pension processing. The Bank made a partnership with Tata Consultancy Services
for setup C-Edg Technologies and consulting services to the banking, nancial
services and insurance industry.
The bank was noted as 'The most preferred bank' in a survey by TV 18 in
association with AC Nielsen-ORG Marg. Also, the Bank was voted as 'The most
preferred housing loan provider' in AWAAZ consumer awards for the year 2006. In
the customer loyalty survey 2006-07 conducted by 'Business World', the Bank was
ranked number one in all parameters of customer satisfaction, service orientation,
customer care/ call center, customer loyalty and home loans. SBI Funds was
judged 'Mutual fund of the year' by CNBC/TV-18/CRISL.
The Bank introduced new products and services such as web-based
remittance, instant fund transfer, online-trading and comprehensive cash
management. During the year 2007-08, the Bank launched 965 branches all over
the country. They inaugurated a new state-of-the art Dealing Room with online
connectivity to all active forex intensive Branches at Corporate Centre in Mumbai.
They launched a new product, Construction Equipment Loan to cater to
construction Companies. Also, they introduced new products such as SBI Reverse
Mortgage Loan and SBI Home Plus in the areas of Home Loans. During the year,
the RBI transferred their entire shareholding in the Bank representing 59.73% of the
issued capital of the Bank to the Government of India. The Bank acquired 92.03%
of equity of Global Trade Finance Ltd. Consequently, GTFL became a subsidiary of
the Bank. They signed an MoU with the Indian railways for installing ATMs at 682
railway stations. In March 2008, the Bank opened their 10,000th branch and
became only the second bank in the world to have more than 10,000 branches after
China's ICBC. During the year 2008-09, the company launched Import factoring, a
new product in association with SBI Factors & Commercial Services Ltd. They
increased the number of branches for retail sale of gold coins from 250 to 518.
Also, they re-launched Gold Deposit Scheme at 50 branches to mobilize gold from
domestic market for deployment as metal loans to jewellers. During the year, the
Bank opened their 11,111th Branch at Sonapur (Kamrup District) in Assam.
They introduced three new products viz., SBI Special Home Loan, SBI Happy
Home Loan and SBI Lifestyle in response to the stimulus package announced by
the Government of India. Also, they entered into an exclusive arrangement with
TATA Motors for handling the booking process of TATA 'Nano' cars. During the year,
the Bank launched on their web-site an on-line application form for registering Auto
Loan enquiries and expeditiously monitoring and converting these leads into Auto
Loans. Also, they launched 'e-invest' for the ASBA (applications supported by
blocked accounts) to aid investors for their equity subscriptions, IPO and Rights
applications. During the year, the Bank set up a custodial services company namely
SBI Custodial Services Pvt. Ltd., in joint venture with Societe Generale, France.
They signed letter of intent for setting up of joint venture company for undertaking
General Insurance Business. Also, they divested 10% equity stake in its wholly
owned subsidiary SBI Pension Fund Pvt. Ltd at cost in favour of its subsidiaries.
In October 2008, the Bank signed an MoU with State General Reserve Fund
(SGRF) of Oman, for a general purpose private equity fund. During the year, State
Bank of Saurashtra (SBS), a wholly owned subsidiary of the Bank, amalgamated
with the Bank with effect from August 13, 2008. They signed a joint venture
agreement with Insurance Australia Group for undertaking General Insurance
business. Also, they signed a joint venture agreement with Macquarie Capital
Group, Australia and IFC, Washington for setting up an Infrastructure fund of USD 3
billion for investing in various infrastructure projects in India. During the year
2009-10, the Bank opened 1,049 branches, out of which branches were opened in
metro and urban areas with a view to increase the Bank's reach and be more
accessible to customers.
In July 2009, SBI introduced 'SBI Loan to Afuent Pensioners' enabling the
government pensioners to avail personal loans upto Rs 3 lakh. During the year, the
Bank designed a special package, the Defence Salary Package, for personnel of
the three Armed Forces i.e. the Army, Navy and Air Force who maintain their Salary
accounts with them. As of March 2010, the Bank had 12,496 branches and 21,485
Group ATMs. In June 2009, the company increased their shareholding in Nepal SBI
Bank Ltd to 55.02% and thus Nepal SBI Bank Ltd became a subsidiary of the Bank
with effect from June 14, 2009. In May 2010, the Bank selected consortium of
Elavon Incorporation, USA and Visa International, USA as their joint venture (JV)
partner for Merchant Acquiring Business. They set up a wholly owned subsidiary,
namely SBI Payment Services Pvt Ltd for conducting Merchant Acquiring Business.
In August 2010, State Bank of Indore was amalgamated with the Bank as per the
scheme of amalgamation approved by the Central Board. During the year 2010-11,
the Bank introduced 2 new products, namely 'Pushpa Ullas' and 'Arthias Plus' on
pilot basis.
They made substantial progress in establishing itself as a leading PE fund
player of the country. Also, they also signed a Joint Venture agreement with State
General Reserve Fund (SGRF) of Sultanate of Oman, a sovereign entity, to set up
a general purpose private equity fund with an initial corpus of USD 100 mn,
expandable further to USD 1.5 bn. During the year, the Bank opened 576 new
branches besides merger of 470 branches of erstwhile State Bank of Indore. Also,
they opened 14 foreign ofces during the year, taking the total to 156. In July 1,
2010, the Bank launched their 'Green Channel Counter' at select branches across
the country. In General Insurance business, the Bank launched limited operations in
April 2010 for the Corporate and Mid Corporate customers based at Mumbai, and it
was expanded to six other major locations in July 2010. In the Retail segment, the
Bank launched their Long Term Home Insurance business at Mumbai in October
2010, which was gradually extended to cover 56 RACPCs and RASMECCs.
General Insurance SME business was launched on a pilot basis in Mumbai and
Chennai in February 2011. During the rst quarter of the nancial year 2011-12, the
Government of India issued the 'Acquisition of State Bank of India Commercial &
International Bank Ltd. vide notication dated July 29, 2011. Consequent to the said
notication, the undertaking of State Bank of India Commercial & International
stands transferred to and vest in State Bank of India with effect from July 29, 2011.
History
The origin of the State Bank of India goes back to the rst decade of the
nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2
June 1806. Three years later the bank received its charter and was re-designed as
the Bank of Bengal (2 January 1809). A unique institution, it was the rst joint-stock
bank of British India sponsored by the Government of Bengal. The Bank of Bombay
(15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal.
These three banks remained at the apex of modern banking in India till their
amalgamation as the Imperial Bank of India on 27 January 1921. Primarily Anglo-
Indian creations, the three presidency banks came into existence either as a result
of the compulsions of imperial nance or by the felt needs of local European
commerce and were not imposed from outside in an arbitrary manner to modernise
India's economy. Their evolution was, however, shaped by ideas culled from similar
developments in Europe and England, and was inuenced by changes occurring in
the structure of both the local trading environment and those in the relations of the
Indian economy to the economy of Europe and the global economic framework.
Establishment
The establishment of the Bank of Bengal marked the advent of limited
liability, joint-stock banking in India. So was the associated innovation in banking,
viz. the decision to allow the Bank of Bengal to issue notes, which would be
accepted for payment of public revenues within a restricted geographical area. This
right of note issue was very valuable not only for the Bank of Bengal but also its two
siblings, the Banks of Bombay and Madras. It meant an accretion to the capital of
the banks, a capital on which the proprietors did not have to pay any interest. The
concept of deposit banking was also an innovation because the practice of
accepting money for safekeeping (and in some cases, even investment on behalf of
the clients) by the indigenous bankers had not spread as a general habit in most
parts of India. But, for a long time, and especially upto the time that the three
presidency banks had a right of note issue, bank notes and government balances
made up the bulk of the investible resources of the banks.

The three banks were governed by royal charters, which were revised from
time to time. Each charter provided for a share capital, four-fth of which were
privately subscribed and the rest owned by the provincial government. The
members of the board of directors, which managed the affairs of each bank, were
mostly proprietary directors representing the large European managing agency
houses in India. The rest were government nominees, invariably civil servants, one
of whom was elected as the president of the board.
Business
The business of the banks was initially conned to discounting of bills of
exchange or other negotiable private securities, keeping cash accounts and
receiving deposits and issuing and circulating cash notes. Loans were restricted to
Rs.one lakh and the period of accommodation conned to three months only. The
security for such loans was public securities, commonly called Company's Paper,
bullion, treasure, plate, jewels, or goods 'not of a perishable nature' and no interest
could be charged beyond a rate of twelve per cent. Loans against goods like opium,
indigo, salt woollens, cotton, cotton piece goods, mule twist and silk goods were
also granted but such nance by way of cash credits gained momentum only from
the third decade of the nineteenth century. All commodities, including tea, sugar
and jute, which began to be nanced later, were either pledged or hypothecated to
the bank. Demand promissory notes were signed by the borrower in favour of the
guarantor, which was in turn endorsed to the bank. Lending against shares of the
banks or on the mortgage of houses, land or other real property was, however,
forbidden.
Indians were the principal borrowers against deposit of Company's
paper, while the business of discounts on private as well as salary bills was almost
the exclusive monopoly of individuals Europeans and their partnership rms. But
the main function of the three banks, as far as the government was concerned, was
to help the latter raise loans from time to time and also provide a degree of stability
to the prices of government securities.
Major Change In The Conditions
A major change in the conditions of operation of the Banks of Bengal,
Bombay and Madras occurred after 1860. With the passing of the Paper Currency
Act of 1861, the right of note issue of the presidency banks was abolished and the
Government of India assumed from 1 March 1862 the sole power of issuing paper
currency within British India. The task of management and circulation of the new
currency notes was conferred on the presidency banks and the Government
undertook to transfer the Treasury balances to the banks at places where the banks
would open branches. None of the three banks had till then any branches (except
the sole attempt and that too a short-lived one by the Bank of Bengal at Mirzapore
in 1839) although the charters had given them such authority. But as soon as the
three presidency bands were assured of the free use of government Treasury
balances at places where they would open branches, they embarked on branch
expansion at a rapid pace. By 1876, the branches, agencies and sub agencies of
the three presidency banks covered most of the major parts and many of the inland
trade centres in India. While the Bank of Bengal had eighteen branches including
its head ofce, seasonal branches and sub agencies, the Banks of Bombay and
Madras had fteen each.
Presidency Banks Act
The presidency Banks Act, which came into operation on 1 May 1876,
brought the three presidency banks under a common statute with similar
restrictions on business. The proprietary connection of the Government was,
however, terminated, though the banks continued to hold charge of the public debt
ofces in the three presidency towns, and the custody of a part of the government
balances. The Act also stipulated the creation of Reserve Treasuries at Calcutta,
Bombay and Madras into which sums above the specied minimum balances
promised to the presidency banks at only their head ofces were to be lodged. The
Government could lend to the presidency banks from such Reserve Treasuries but
the latter could look upon them more as a favour than as a right. The decision of
the Government to keep the surplus balances in Reserve Treasuries outside the
normal control of the presidency banks and the connected decision not to
guarantee minimum government balances at new places where branches were to
be opened effectively checked the growth of new branches after 1876. The pace of
expansion witnessed in the previous decade fell sharply although, in the case of the
Bank of Madras, it continued on a modest scale as the prots of that bank were
mainly derived from trade dispersed among a number of port towns and inland
centers of the presidency.
India witnessed rapid commercialization in the last quarter of the nineteenth
century as its railway network expanded to cover all the major regions of the
country. New irrigation networks in Madras, Punjab and Sind accelerated the
process of conversion of subsistence crops into cash crops, a portion of which
found its way into the foreign markets. Tea and coffee plantations transformed large
areas of the eastern Terais, the hills of Assam and the Nilgiris into regions of estate
agriculture par excellence. All these resulted in the expansion of India's
international trade more than six-fold. The three presidency banks were both
beneciaries and promoters of this commercialization process as they became
involved in the nancing of practically every trading, manufacturing and mining
activity in the sub-continent. While the Banks of Bengal and Bombay were engaged
in the nancing of large modern manufacturing industries, the Bank of Madras went
into the nancing of large modern manufacturing industries, the Bank of Madras
went into the nancing of small-scale industries in a way which had no parallel
elsewhere. But the three banks were rigorously excluded from any business
involving foreign exchange. Not only was such business considered risky for these
banks, which held government deposits, it was also feared that these banks
enjoying government patronage would offer unfair competition to the exchange
banks which had by then arrived in India. This exclusion continued till the creation
of the Reserve Bank of India in 1935.
Presidency Banks of Bengal
The presidency Banks of Bengal, Bombay and Madras with their 70 branches
were merged in 1921 to form the Imperial Bank of India. The triad had been
transformed into a monolith and a giant among Indian commercial banks had
emerged. The new bank took on the triple role of a commercial bank, a banker's
bank and a banker to the government.
But this creation was preceded by years of deliberations on the need for a
'State Bank of India'. What eventually emerged was a 'half-way house' combining
the functions of a commercial bank and a quasi-central bank.
The establishment of the Reserve Bank of India as the central bank of the
country in 1935 ended the quasi-central banking role of the Imperial Bank. The
latter ceased to be bankers to the Government of India and instead became agent
of the Reserve Bank for the transaction of government business at centres at which
the central bank was not established. But it continued to maintain currency chests
and small coin depots and operate the remittance facilities scheme for other banks
and the public on terms stipulated by the Reserve Bank. It also acted as a bankers'
bank by holding their surplus cash and granting them advances against authorised
securities. The management of the bank clearing houses also continued with it at
many places where the Reserve Bank did not have ofces. The bank was also the
biggest tenderer at the Treasury bill auctions conducted by the Reserve Bank on
behalf of the Government.
The establishment of the Reserve Bank simultaneously saw important
amendments being made to the constitution of the Imperial Bank converting it into a
purely commercial bank. The earlier restrictions on its business were removed and
the bank was permitted to undertake foreign exchange business and executor and
trustee business for the rst time.
Imperial Bank
The Imperial Bank during the three and a half decades of its existence
recorded an impressive growth in terms of ofces, reserves, deposits, investments
and advances, the increases in some cases amounting to more than six-fold. The
nancial status and security inherited from its forerunners no doubt provided a rm
and durable platform. But the lofty traditions of banking which the Imperial Bank
consistently maintained and the high standard of integrity it observed in its
operations inspired condence in its depositors that no other bank in India could
perhaps then equal. All these enabled the Imperial Bank to acquire a pre-eminent
position in the Indian banking industry and also secure a vital place in the country's
economic life.
When India attained freedom, the Imperial Bank had a capital base (including
reserves) of Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.
72.94 crores respectively and a network of 172 branches and more than 200 sub
ofces extending all over the country.
First Five Year Plan
In 1951, when the First Five Year Plan was launched, the development of rural
India was given the highest priority. The commercial banks of the country including
the Imperial Bank of India had till then conned their operations to the urban sector
and were not equipped to respond to the emergent needs of economic regeneration
of the rural areas. In order, therefore, to serve the economy in general and the rural
sector in particular, the All India Rural Credit Survey Committee recommended the
creation of a state-partnered and state-sponsored bank by taking over the Imperial
Bank of India, and integrating with it, the former state-owned or state-associate
banks. An act was accordingly passed in Parliament in May 1955 and the State
Bank of India was constituted on 1 July 1955. More than a quarter of the resources
of the Indian banking system thus passed under the direct control of the State.
Later, the State Bank of India (Subsidiary Banks) Act was passed in 1959, enabling
the State Bank of India to take over eight former State-associated banks as its
subsidiaries (later named Associates).
The State Bank of India was thus born with a new sense of social purpose
aided by the 480 ofces comprising branches, sub ofces and three Local Head
Ofces inherited from the Imperial Bank. The concept of banking as mere
repositories of the community's savings and lenders to creditworthy parties was
soon to give way to the concept of purposeful banking subserving the growing and
diversied nancial needs of planned economic development. The State Bank of
India was destined to act as the pacesetter in this respect and lead the Indian
banking system into the exciting eld of national development.
Current Board of Directors
As on 14 January 2013, there are fteen members in the SBI board of directors:-
- Pratip Chaudhuri (Chairman)
- Hemant G. Contractor (Managing Director)
- Diwakar Gupta (Managing Director)
- A. Krishna Kumar (Managing Director)
- S. Visvanathan (Managing Director)
- S. Venkatachalam (Director)
- D. Sundaram (Director)
- Parthasarathy Iyengar (Director)
- Thomas Mathew (Director)
- S.K. Mukherjee (Ofcer Employee Director)
- Rajiv Kumar (Director)
- Jyoti Bhushan Mohapatra (Workmen Employee Director)
- Deepak Amin (Director)
- Harichandra Bahadur Singh (Director)
- D. K. Mittal (Director)
Different Loan Schemes
- Home Loan
1. SBI MAXGAIN

HOME LOAN AS AN OVERDRAFT

- An innovative and customer-friendly product enabling the customers to earn
optimal yield on their savings by reducing interest burden on Home
Loans,with no extra cost.
- The loan is sanctioned as an Overdraft with added exibility to operate the
Home Loan Account like SB or Current Account. Bank also provides
Cheque Book/ATM-cum-Debit Card/Net Banking facility for the purpose.
- The product enables customers to park their surplus funds/savings in SBI
Maxgain (with an option to withdraw whenever required), especially in the
wake of low yields on other Deposit/Investment products.
Loan Amount
- Minimum Loan Amount: Rs.5 lacs
- Maximum Loan Amount: No Cap

Interest Rate
A premium of 0.25% over and above the applicable Home Loan
interest rate for Home Loan > Rs.1 crore is payable.
(Other terms and conditions are as applicable to regular Home Loan Scheme)

2. SBI YUVA HOME LOAN

TAILOR MADE HOME LOAN SCHEME FOR THE YOUTH

SBI YUVA Home Loan provides 20% higher loan amount than that of normal
Home Loan eligibility to Salaried employees of Private Sector Companies/MNCs/
Government Undertakings/PSUs & the Government employees.

Eligibility
- Age between 21 years to 45 years.
- Minimum Net Monthly Income of applicants should be Rs. 30,000/-
(expected rental income from the proposed property should not be included in the monthly income
of the borrower).
Repayment
Under SBI Yuva Home Loan Scheme, only the interest applied on
Home Loan is payable during the rst 36 months. The regular EMIs start after
completion of 36 months.
(Other terms and conditions are as applicable to regular Home Loan Scheme)

3. NRI HOME LOANS:

HOME LOANS TO NON RESIDENT INDIANS (NRIs) & PERSONS OF INDIAN

ORIGIN (PIOs)

Eligibility
- Non Resident Indians (NRIs) or Persons of Indian Origin(PIOs)
- The applicants should have a regular source of income.
- Minimum employment tenure in India/Abroad should not be less than 2 years.

Loan Amount
- Minimum Loan Amount: Rs. 3 lacs.
- Maximum Loan Amount: No upper cap.
(Other terms and conditions are as applicable to regular Home Loan Scheme)

4. SBI REALTY

HOME LOANS FOR PURCHASE OF PLOT FOR CONSTRUCTION OF A

DWELLING UNIT
SBI Realty provides an opportunity to the customer to purchase a plot for
construction of house.
- The construction of house should commence within 2 years from the date of
availment of SBI Realty Loan.
- Customers are also eligible to avail another Home Loan for construction of
house on the plot nanced under the SBI Realty with the benet of running
both the loans concurrently.
Loan Amount :Maximum Loan Amount: Rs.10 crores

Repayment Period: Upto 15 years

(Other terms and conditions are as applicable to regular Home Loan Scheme)

5. SBI PAL
PRE-APPROVED HOME LOAN
- The SBI PAL provides sanction of Home Loan limits to the customers before
nalization of the property which enables them to negotiate with the Builder/
Seller condently.
- The loan eligibility will be assessed on the basis of income details of the
applicant.
- Non-refundable processing fee as applicable to the Home Loan will be
collected at the time of sanction.
Validity Period
Pre-approved loan arrangement letter (PLAL) will be valid for a period
of 4 months. Property papers will be required to be submitted by the borrower
within the validity of PLAL. Processing fee will not be levied again.

Loan Amount
- Pre-approved loan arrangement letter (PLAL) will carry the eligible loan
amount calculated on the basis of prevailing interest rates.
- Minimum Loan amount: Rs.10 Lacs.
(Other terms and conditions are as applicable to regular Home Loan Scheme)

6. SBI TRIBAL PLUS

SPECIAL HOME LOAN SCHEME FOR HILLY/TRIBAL AREAS

- 'SBI Tribal Plus' is a Special Home Loan Scheme designed for Hill/Tribal
areas (where mortgage of the property is not possible) for extending
nancial assistance to individuals.
- Loan is sanctioned for Purchase or construction of a new house / at
(without mortgage of land).
- Purchase of an existing (old) house / at which is not more than 10 years
old.
- Repair /Renovation/extension of an existing house or at.

Loan Amount
- Minimum Loan Amount: Nil
- Maximum Loan Amount: Rs. 10 lacs

Repayment Period
- Maximum repayment tenure: 15 years

7. GRAM NIWAS

HOME LOANS IN RURAL AREAS

- Scheme covers all Rural and Semi-urban centres having population upto
50,000 as per 2001 census.
- Home Loans under Gram Niwas Scheme are sanctioned for purchase/
construction/repair and renovation of house and purchase of plot for
construction of a house/shed etc.
Loan Amount
- Minimum Loan Amount: Nil
- Maximum Loan Amount: Rs. 5 lacs

Repayment Period
- Maximum repayment period :15 years
(Processing Charges are waived under the Gram Niwas Scheme)
8. SAHYOG NIWAS

HOME LOANS TO SELF HELP GROUPS IN RURAL AREAS

The Sahyog Niwas Scheme provides Home Loan to Self help groups, having good
payment record of 2 years, for on lending to their members for:
- Purchase or construction of a house exclusively or including the housing
needs of activities carried by them (Dairy shed, tailoring shed/shop, grocery
stores etc.)
- Renovation or repair of an existing house / shed
- Purchase of a plot for the construction of house
- Extension of existing house / work space to existing house / shed.
Loan Amount
Home Loan amount under Sahyog Niwas Scheme is restricted to 10 times
of the saving corpus of SHG subject to a maximum amount of Rs. 50,000/ per
member.
Car Loan
SBI NEW CAR LOAN SCHEME
SBI provide the best car loan scheme for you.
Salient features:
- No Advance EMI.
- Longestrepayment tenure (7 years)
- Lowest interest rates
- Lowest EMI
- LTV85%of 'On Road Price' of car (includes registration, insurance and cost
of accessories worth Rs 25000), 90% in case of Corporate
SalaryPackage accounts
- Interest Calculated on Daily ReducingBalance
- Flexibility of payment of EMI anytime during the month
- No pre-payment penalty
- Free Accident insurance. Optional SBI Life cover
- Overdraft facility available.
Purpose
For purchase of new passenger cars, Multi Utility Vehicles (MUVs) and SUVs.
Eligibility
To avail an SBI Car Loan, you should be :
- Individual between the age of 21-65 years of age.
- Regular employee of State / Central Government, Public Sector
Undertaking, Private company or a reputed establishment.
- Professionals, self-employed, businessmen, proprietary/partnership rms
who is an income tax assessee.
- Person engaged in Agricultural and allied activities.
- Net Annual Income Rs. 2,50,000/- and above.
Loan Amount
There is no upper limit for the amount of a car loan. A maximum loan amount of 48
times of Net Monthly Income or 4 times of Net Annual Income can be sanctioned.
Documents Required
You would need to submit the following documents along with the completed
application form:
- Statement of Bank account of the borrower for last 6 months.
- passport size photographs of borrower(s).
- A copy of passport /voters ID card/PAN card.
- Proof of residence.
- Latest salary-slip showing all deductions
- I.T. Returns/Form 16: 2 years for salaried employees and 2 years for
professional self-employed/businessmen duly accepted by the ITO
wherever applicable
- Proof of ofcial address for non-salaried individuals

Margin
15% of the on road price (which includes vehicle registration charges, insurance,
one-time road tax and accessories).
Repayment
You can enjoy the longest repayment period in the industry with us as long as 84
months.
Reimbursement of costs of car purchased by own sources
We also reimburse nance for the cars purchased out of own funds which are not
more than 3 month old at rate of interest applicable to New Car.
Interest
0.75% above Base Rate, i.e. 10.45% p.a.
(For all tenures)
2-WHEELER LOAN
SBI provide the best Two- Wheeler loan scheme for you to take a loan for
purchase of new Two- Wheeler.
SBI offers you:
- No Advance EMI
- Lower interest rates Lowest EMI;
- LTV 85% of On Road Price of vehicle;
- Interest Calculated on Daily Reducing Balance;
- Flexibility of payment of EMI anytime during the month;
- Low processing fee (only 1.22% of loan amount);
- Free Accidental insurance ;
- Optional SBI Life cover.
The Scheme

Purpose
To provide nance for purchase of new Two-wheelers viz. scooter/motor cycle/
moped/battery-operated vehicles.
Eligibility
To avail an SBI Car Loan, you should be :
- Individual between the age of 21-65 years of age.
- A Permanent employee of State / Central Government, Public Sector
Undertaking, Private company or a reputed establishment or
- A Professionals or self-employed individual who is an income tax assessee
or
- A Person engaged in agriculture and allied activities.
- Minimum Net Annual Income Rs. 75,000 (for regular petrol/diesel/gas
operated scooters & motor cycles) and Rs. 60,000 (mopeds and battery-
operated Two-wheelers)
Loan Amount
- For salaried persons, the maximum loan amount is restricted to 6 times Net
Monthly Income (NMI), i.e. net of all deductions including actual monthly tax
deductions at source.
- In case of others, the maximum loan amount is restricted to half of Net
Annual Income (NAI), i.e. income as per latest income tax return led less
taxes payable.
- For agriculturists, the net annual income should be arrived based on the
nature of their activity (i.e. farming, dairy poultry, orchards, etc) land holding,
cropping pattern, yield, etc., and average level of income derived there from
in the area.
Documents Required
The following papers are to be submitted along with loan application:
- Statement of Bank account of the borrower for last12 months.
- 2 passport size photographs of borrower(s).
- Signature identication from bankers of borrower(s).
- A copy of passport /voters ID card/PAN card.
- Proof of residence.
- Latest salary-slip showing all deductions and TDS certicate-Form 16 in
case of salaried persons
- Copy of Income Tax Return for last two nancial years, duly acknowledged
by ITO for professionals, self-employed and others.
- Proof of ofcial address for non-salaried individuals.
Margin
15% of the on the road price (which includes vehicle registration charges,
insurance, one-time road tax).
Repayment
You can repay the loan within 36 months.
Interest
8.25% above Base Rate i.e. 17.95% p.a.
(Up to 3 years)
Processing Fee
1.22% of Loan amount
Security
As per Bank's extant instructions.
EDUCATION LOANS
SBI STUDENT LOAN SCHEME
A term loan granted to Indian Nationals for pursuing higher education in India or
abroad where admission has been secured.
Eligible Courses
a. Studies in India:
- Graduation, Post-graduation including regular technical and
professional Degree/Diploma courses conducted by colleges/
universities approved by UGC/ AICTE/IMC/Govt. etc
- Regular Degree/ Diploma Courses conducted by autonomous
institutions like IIT, IIM etc
- Teacher t rai ni ng/ Nursi ng courses approved by Cent ral
governmentor the State Government
- Regular Degree/Diploma Courses like Aeronautical, pilot training,
shipping etc. approved by Director General of Civil Aviation/Shipping
- Vocational Training and Skill Development Study Courses will not be
covered under the regular Education Loan Schemes. A separate
scheme for Loans for Vocational Education and Training has been
launched which covers nancing for such Vocational courses

b. Studies abroad:
- Job oriented professional/ technical Graduation Degree courses/
Post Graduation Degree and Diploma courses like MCA, MBA, MS,
etc offered by reputed universities
Expenses considered for loan
- Fees payable to college/school/hostel
- Examination/Library/Laboratory fees
- Purchase of Books/Equipment/Instruments/Uniforms, Purchase of
computers- essential for completion of the course (maximum 20% of the
total tuition fees payable for completion of the course)
- Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tuition
fees for the entire course)
- Travel Expenses/Passage money for studies abroad
- Cost of a Two-wheeler upto Rs. 50,000/-
Any other expenses required to complete the course like study tours, project work
etc.
Amount of Loan
- For studies in India, maximum Rs. 10 lacs
- Studies abroad, maximum Rs. 30 lacs

Interest Rates
Processing Fees
- No processing fee/ upfront charges
- Deposit of Rs. 5000/- for education loan for studies abroad which will be
adjusted in the margin money
Repayment Tenure
Repayment will commence one year after completion of course or 6 months after
securing a job, whichever is earlier.
Place of Study Loan Amount Repayment Period
Studies in India Rs.10.0 lacs 5 to 7years
Studies Abroad Rs.30.0 lacs 5 to 7years
Security
Amount
For loans upto Rs. 10.00 lacs for Studies in India
and upto Rs. 20.00 lacs for studies abroad
Upto Rs. 4 lacs No Security
Above Rs. 4 lacs to Rs.
7.50 lacs
Collateral security in the form of suitable third party
guarantee. The bank may, at its discretion, in
exceptional cases, waive third party guarantee if
satised with the net-worth/means of parent/s who
would be executing the documents as "joint
borrower".
Above Rs. 7.50 lacs.
Tangible collateral security of suitable value, along
with the assignment of future income of the student
for payment of installments.
All loans should be secured by parent(s)/guardian of the student borrower. In
case of married person, co-obligator can be either spouse or the parent(s)/
parents-in-law

Margin
- For loans up to Rs.4.0 lacs : No Margin
- For loans above Rs.4.0 lacs:
- Studies in India: 5%
- Studies Abroad: 15%
Documentation Required
- Completed Education Loan Application Form.
- Mark sheets of last qualifying examination
- Proof of admission scholarship, studentship etc
- Schedule of expenses for the specied course
- 2 passport size photographs
- PAN Card of the student and the Parent/ Guardian
- Borrower's Bank account statement for the last six months
- Income tax Returns/ IT assessment order, of last 2 yrs
- Brief statement of assets and liabilities, of the Co-borrower
- Proof of Income (i.e. Salary slips/ Form 16)
Amortization of Loan
In lending, amortization is the distribution of payment into multiple cash ow
installments, as determined by an amortization schedule. Unlike other repayment
models, each repayment installment consists of both principal and interest.
Amortization is chiey used in loan repayments (a common example being a
mortgage loan) and in sinking funds. Payments are divided into equal amounts for
the duration of the loan, making it the simplest repayment model. A greater amount
of the payment is applied to interest at the beginning of the amortization schedule,
while more money is applied to principal at the end. Commonly it is known as EMI
or Equated Monthly Installment.
or, equivalently,
Where:
- P is the principal amount borrowed,
- A is the periodic payment,
- r is the periodic interest rate divided by 100 (annual interest rate also divided by
12 in case of monthly installments), and
- n is the total number of payments (for a 30-year loan with monthly payments n =
30 # 12 = 360).
The amortization schedule for a residential mortgage is a table that provides
a breakdown of the schedule of payments from the loan's rst required payment to
the loan's nal payment. It details the amount of principal and the amount of interest
paid each month. The amortization schedule is one of the most important, yet
overlooked, documents involved in the mortgage process, as it shows the true cost
of the house. For example:
Loan amount: 100,000 /-
Interest rate: 6%
Mortgage term: 30 years
Number of payments: 360
Monthly payment: 599.55
Total interest paid: 115,838.19
Month Interest Principal
Remaining
Principal Balance
1 500 99.55 99,900.45
223 (18.5 years) 298.31 301.24 59,361.34
360 (30 years) 2.98 596.57 0
In this case, by the time the mortgage is paid off in 30 years, the total interest
paid is 115,838.19, bringing the actual cost of that 100,000 house to 215,838.19.
The interest on the loan literally adds up to more than the cost of the house itself.
Building Equity
In our example of a 100,000, 30-year mortgage, the complete amortization
schedule would consist of 360 payments. As the table shows, each of the required
payments is 599.55, but the amount dedicated toward principal and interest varies
from payment to payment. The balance between principal and interest payments
reverses over time as early payments consist primarily of interest and later
payments consist primarily of principal. Because of the inverse relationship
between principal and interest paid, the rate at which you gain equity in your home
is much slower in the initial years of the mortgage than in later years. This
demonstrates the value of making extra principal payments if the mortgage permits
prepayment. Each extra payment results in a larger repaid portion of the principal,
and reduces the interest due on each future payment, moving you toward the
ultimate goal: paying off the mortgage.
Consider what would happen if you make one extra payment of 600 in a year.
Typically, the entire value of any extra payments will go toward paying down the
mortgage's principal. The partial amortization schedule below demonstrates that
making just one extra mortgage payment during the rst year of your mortgage will
give you nearly as much equity as you would have earned in half a year of making
your standard payments. Continue making just one extra payment per year and you
can shave years off of your mortgage and eventually save thousands of dollars in
interest.
Month Interest Principal Balance
1 500.00 99.55 99,900.45
2 499.50 100.05 99,800.40
3 499.00 100.55 99,699.85
4 498.50 101.05 99,598.80
5 497.99 101.56 99,497.24
6 497.49 102.06 99,395.18
Renancing
The amortization schedule also plays a role when you renance a mortgage.
The rule of thumb is that an interest rate deduction of 1% or greater may be worth
doing and that an interest rate deduction of 2% is almost always worth doing. The
truth is, you won't really know if renancing is worth the money until you look at the
new amortization schedule because the amount owed, the interest rate, and the
length of time that you plan to own the home all play a role in determining whether
renancing is cost effective
Consider our example. If you had been making only the standard mortgage
payment on the 100,000 loan for ve years and then interest rates fell to 4.5%, you
would owe 4,015.39 on the balance of the loan. The monthly interest payment
would be 549.10 and the amount going toward principal would be 116.20.
By renancing to a 30 year loan at a 4.5% interest rate, your monthly payment
would decrease to 476.36, with 352.56 going toward interest and 123.80 toward
principal. These numbers assume that you pay cash for the closing costs, which
could be in the neighborhood of several thousand dollars for this loan. Not only is
the new monthly mortgage payment smaller and the amount going toward principal
larger, but you will save approximately 8,000 in interest over the lifetime of this loan
by renancing. Just keep in mind that if you sell the house within a few year of
renancing, the cost of renancing will eliminate the savings in interest.
Negative Amortization
While amortization schedules are typically thought about in terms of paying
down a mortgage, they also play a role when the loan agreement allows for
scheduled payments that are less than the interest payments over that same time
period. To look back at our example, it is possible to get a loan with a monthly
payment of 467.36 and a contract that permits you to pay only 367.36. The 100
difference, known as deferred interest, is added to the principal of the loan. Over
time, the amount owed on the loan increases, a scenario known as negative
amortization.
Negative amortization has become a more common scenario with the
increased popularity of certain types of adjustable-rate mortgages, particularly
those known as interest-only loans. While these mortgages can provide borrowers
with the ability to initially make low monthly payments, the downside is that the
monthly payments must increase substantially at some point over the term of the
mortgage.
Change in the trend of loan disbursement
Over the past few years we have noticed that there is a drastic change in the
overall loans issued the public has increased there purchasing capacity and rather
paying the amount as a whole they prefer to pay the amount on EMI .And take the
burden of large investments off them. Youths have played a very imp. role in this
change. Now a days youths have endless desire but their pocket don't allow that &
thas when EMI helps them, they have the thing they want and can pay off bit by bit
over a long period of time.
Chapter - 3
Graphical Representation of the Loan Disbursement
YEAR
2005
YEAR
2006
YEAR
2007
YEAR
2008
YEAR
2009
YEAR
2010
YEAR
2011
YEAR
2012
OVER DRAFT
DEMAND LOAN
TERM LOAN
BILL DISCOUNTED
REC. ASSETS
TOTAL
323 220 263 1370 764 379 235 1209
4314 2852 4366 78841 89596 92421 86148 8761
116465 166212 210989 161925 158395 186319 225152 352299
0 0 0 0 0 0 0 0
0 0 737 541 92 87 50 50
121102 169284 216355 242650 248847 279206 311585 362319
PER PUBLIC (ADVANCES)
0
100000
200000
300000
400000
2005 2006 2007 2008 2009 2010 2011 2012
0
100000
200000
300000
400000
Interpretation
Through the graph we can say that the their is a increment in the total
disbursement of loan. though in 2008-09 their was a very little increase, it has a
good increment in the next year. the gures mentioned for the year 2012 are till dec
2012 it show a huge change. though their is a study increase in the total loan
individual items have shown different trends.
Representation of Overdraft Loans
OVERDRAFT OVERDRAFT
YEAR 2005
YEAR 2006
YEAR 2007
YEAR 2008
YEAR 2009
YEAR 2010
YEAR 2011
YEAR 2012
323
220
263
1370
764
397
235
1209
0
375
750
1125
1500
2005 2006 2007 2008 2009 2010 2011 2012
0
375
750
1125
1500
Interpretation
As the graphs shows, their were many ups & down in the Overdraft
loan. It shows a drastic increase in year 2008 but then starts to decrease and fall
down to 235 in year 2011. but till dec 2012 it makes a strong come and reach 1209.
Representation of Demand Loans
DEMAND LOAN DEMAND LOAN
YEAR 2005
YEAR 2006
YEAR 2007
YEAR 2008
YEAR 2009
YEAR 2010
YEAR 2011
YEAR 2012
4314
2852
4366
78841
89596
92421
86148
8761
0
25000
50000
75000
100000
2005 2006 2007 2008 2009 2010 2011 2012
0
25000
50000
75000
100000
Interpretation
The Demand loan show a Consistent level in the years 2005-07 with a
few ups and down. But in the 2008 it starts with a huge change and raise to 78841
and shows a upward trend till year 2010 but on year 2011 it start declining & till dec
2012 it again sets back
Representation of Term Loan
TERM LOAN TERM LOAN
YEAR 2005
YEAR 2006
YEAR 2007
YEAR 2008
YEAR 2009
YEAR 2010
YEAR 2011
YEAR 2012
116465
166212
210989
161925
158395
186319
225152
352299
0
100000
200000
300000
400000
2005 2006 2007 2008 2009 2010 2011 2012
0
100000
200000
300000
400000
Interpretation
The Demand loans shows no drastic difference though showing some
slight ups & downs. A major change could be seen in the year 2012 as till Dec 2012
it has shown a good rise.
Representation of Rec. Assets
REC. ASSETS REC. ASSETS
YEAR 2005
YEAR 2006
YEAR 2007
YEAR 2008
YEAR 2009
YEAR 2010
YEAR 2011
YEAR 2012
0
0
737
541
92
87
50
50
0
200
400
600
800
2005 2006 2007 2008 2009 2010 2011 2012
0
200
400
600
800
Interpretation
Rec. Assets Shows a upward trends with a tremendous change on
year 2007 but then it start to decline and thus showing a downward trend.
AMORTIZATION SCHEDULE CALCULATOR
Hypothetical Situation Hypothetical Situation
Loan Amount ! 1,00,000.00
Interest Rate 9.50%
Term 4
Loan Starting Date January 5, 2013
Monthly Payment ! 2,512.31
Loan End Date December 17, 1910
Payment Date Balance Principal Interest Payment
Total
Interest Total Paid
1 January 5, 2013 ! 98,279.35! 1,720.65 ! 791.67 ! 2,512.31 ! 791.67 ! 2,512.31
2 February 5, 2013 ! 96,545.08! 1,734.27 ! 778.04 ! 2,512.31 ! 1,569.71 ! 5,024.63
3 March 5, 2013 ! 94,797.09! 1,748.00 ! 764.32 ! 2,512.31 ! 2,334.03 ! 7,536.94
4 April 5, 2013 ! 93,035.25! 1,761.84 ! 750.48 ! 2,512.31 ! 3,084.50 ! 10,049.25
5 May 5, 2013 ! 91,259.46! 1,775.78 ! 736.53 ! 2,512.31 ! 3,821.03 ! 12,561.57
6 June 5, 2013 ! 89,469.62! 1,789.84 ! 722.47 ! 2,512.31 ! 4,543.50 ! 15,073.88
7 July 5, 2013 ! 87,665.61! 1,804.01 ! 708.30 ! 2,512.31 ! 5,251.80 ! 17,586.20
8 August 5, 2013 ! 85,847.31! 1,818.29 ! 694.02 ! 2,512.31 ! 5,945.82 ! 20,098.51
9 September 5, 2013 ! 84,014.63! 1,832.69 ! 679.62 ! 2,512.31 ! 6,625.45 ! 22,610.82
10 October 5, 2013 ! 82,167.43! 1,847.20 ! 665.12 ! 2,512.31 ! 7,290.56 ! 25,123.14
11 November 5, 2013 ! 80,305.61! 1,861.82 ! 650.49 ! 2,512.31 ! 7,941.06 ! 27,635.45
12 December 5, 2013 ! 78,429.05! 1,876.56 ! 635.75 ! 2,512.31 ! 8,576.81 ! 30,147.76
13 January 5, 2014 ! 76,537.63! 1,891.42 ! 620.90 ! 2,512.31 ! 9,197.71 ! 32,660.08
14 February 5, 2014 ! 74,631.24! 1,906.39 ! 605.92 ! 2,512.31 ! 9,803.63 ! 35,172.39
15 March 5, 2014 ! 72,709.75! 1,921.48 ! 590.83 ! 2,512.31 ! 10,394.46 ! 37,684.71
16 April 5, 2014 ! 70,773.06! 1,936.69 ! 575.62 ! 2,512.31 ! 10,970.08 ! 40,197.02
17 May 5, 2014 ! 68,821.03! 1,952.03 ! 560.29 ! 2,512.31 ! 11,530.37 ! 42,709.33
18 June 5, 2014 ! 66,853.55! 1,967.48 ! 544.83 ! 2,512.31 ! 12,075.20 ! 45,221.65
19 July 5, 2014 ! 64,870.50! 1,983.06 ! 529.26 ! 2,512.31 ! 12,604.46 ! 47,733.96
20 August 5, 2014 ! 62,871.74! 1,998.76 ! 513.56 ! 2,512.31 ! 13,118.01 ! 50,246.27
21 September 5, 2014 ! 60,857.16! 2,014.58 ! 497.73 ! 2,512.31 ! 13,615.75 ! 52,758.59
22 October 5, 2014 ! 58,826.63! 2,030.53 ! 481.79 ! 2,512.31 ! 14,097.53 ! 55,270.90
23 November 5, 2014 ! 56,780.03! 2,046.60 ! 465.71 ! 2,512.31 ! 14,563.24 ! 57,783.21
24 December 5, 2014 ! 54,717.23! 2,062.81 ! 449.51 ! 2,512.31 ! 15,012.75 ! 60,295.53
25 January 5, 2015 ! 52,638.09! 2,079.14 ! 433.18 ! 2,512.31 ! 15,445.93 ! 62,807.84
26 February 5, 2015 ! 50,542.49! 2,095.60 ! 416.72 ! 2,512.31 ! 15,862.65 ! 65,320.16
27 March 5, 2015 ! 48,430.31! 2,112.19 ! 400.13 ! 2,512.31 ! 16,262.78 ! 67,832.47
28 April 5, 2015 ! 46,301.40! 2,128.91 ! 383.41 ! 2,512.31 ! 16,646.18 ! 70,344.78
29 May 5, 2015 ! 44,155.64! 2,145.76 ! 366.55 ! 2,512.31 ! 17,012.74 ! 72,857.10
30 June 5, 2015 ! 41,992.89! 2,162.75 ! 349.57 ! 2,512.31 ! 17,362.30 ! 75,369.41
31 July 5, 2015 ! 39,813.02! 2,179.87 ! 332.44 ! 2,512.31 ! 17,694.75 ! 77,881.72
32 August 5, 2015 ! 37,615.90! 2,197.13 ! 315.19 ! 2,512.31 ! 18,009.93 ! 80,394.04
33 September 5, 2015 ! 35,401.37! 2,214.52 ! 297.79 ! 2,512.31 ! 18,307.73 ! 82,906.35
34 October 5, 2015 ! 33,169.32! 2,232.05 ! 280.26 ! 2,512.31 ! 18,587.99 ! 85,418.66
35 November 5, 2015 ! 30,919.60! 2,249.72 ! 262.59 ! 2,512.31 ! 18,850.58 ! 87,930.98
36 December 5, 2015 ! 28,652.06! 2,267.53 ! 244.78 ! 2,512.31 ! 19,095.36 ! 90,443.29
37 January 5, 2016 ! 26,366.58! 2,285.48 ! 226.83 ! 2,512.31 ! 19,322.19 ! 92,955.61
38 February 5, 2016 ! 24,063.00! 2,303.58 ! 208.74 ! 2,512.31 ! 19,530.92 ! 95,467.92
39 March 5, 2016 ! 21,741.19! 2,321.81 ! 190.50 ! 2,512.31 ! 19,721.42 ! 97,980.23
40 April 5, 2016 ! 19,400.99! 2,340.20 ! 172.12 ! 2,512.31 ! 19,893.54! 1,00,492.55
41 May 5, 2016 ! 17,042.27! 2,358.72 ! 153.59 ! 2,512.31 ! 20,047.13! 1,03,004.86
42 June 5, 2016 ! 14,664.87! 2,377.40 ! 134.92 ! 2,512.31 ! 20,182.05! 1,05,517.17
43 July 5, 2016 ! 12,268.66! 2,396.22 ! 116.10 ! 2,512.31 ! 20,298.14! 1,08,029.49
44 August 5, 2016 ! 9,853.47 ! 2,415.19 ! 97.13 ! 2,512.31 ! 20,395.27! 1,10,541.80
45 September 5, 2016 ! 7,419.16 ! 2,434.31 ! 78.01 ! 2,512.31 ! 20,473.28! 1,13,054.12
46 October 5, 2016 ! 4,965.58 ! 2,453.58 ! 58.74 ! 2,512.31 ! 20,532.01! 1,15,566.43
47 November 5, 2016 ! 2,492.58 ! 2,473.00 ! 39.31 ! 2,512.31 ! 20,571.32! 1,18,078.74
48 December 5, 2016 -! 0.00 ! 2,492.58 ! 19.73 ! 2,512.31 ! 20,591.06! 1,20,591.06
Annuity Figures
Particulars Year - 1 Year - 2 Year - 3 Year - 4
Total interest paid ! 8,576.81 ! 6,435.94 ! 4,082.60 ! 1,495.70
Total Principal Paid ! 21,570.95 ! 23,711.82 ! 26,065.16 ! 28,652.06
Gross Amount Paid ! 30,147.76 ! 30,147.76 ! 30,147.76 ! 30,147.76
0
2250
4500
6750
9000
1st Year 2nd Year 3rd year 4th Year
0
2250
4500
6750
9000
Intrest
0
7250
14500
21750
29000
1st Year 2nd Year 3rd Year 4th Year
0
7250
14500
21750
29000
Principal
0
10000
20000
30000
40000
1st Year 2nd Year 3rd Year 4th Year
Combine Data Of Principal and Intrest
Principal Intrest
Interpretation
When compared with the bank amortization plan the results of the
hypothetical situation were similar to that of the bank. It shows that the banks are
using the same formula for their scheme
Annuity gures reviles that how the EMI adjusts principal & interest in a
inverse proportion.
Representation of the Mean of the all the
Parameters
Parameter - 1 [ Loans ]
Type of loan Mean
Personal Loans 38.17
Vehicles Loans 35.88
Educations Loans 34.24
Housing loans 37.24
33
34.5
36
37.5
39
Personal loan Vehicle Loan Education Loan Housing loan
33
34.5
36
37.5
39
Interpretation
Though Housing Loan & Education Loan provide with tax benets,
Most of the people have or are willing to opt for Personal Loan. The reason behind
this could be because of the documentations & paper work.

Parameter - 2 [ Income ]
Income Level Mean
Below 20,000/- 35.69
Above 20,000/- 37.37
35
35.75
36.5
37.25
38
Below 20,000/- Above 20,000/-
35
35.75
36.5
37.25
38
Interpretation
Respondent earning more than 20,000/- rupees pre month has more
inclination toward availing loans.
Parameter - 3 [ Sector of Employment ]
Sector of Employment Mean
Government Sector 36.41
Private Sector 36.97
36
36.25
36.5
36.75
37
Govt. Sector Private Sector
36
36.25
36.5
36.75
37
Interpretation
Private sector Employees have shown slightly more inclination towards
availing loans.
Parameter - 4 [ Gender ]
Gender Mean
Male 36.55
Female 36.89
Region 1 Region 2
36.4
36.525
36.65
36.775
36.9
Male Female
36.4
36.525
36.65
36.775
36.9
Interpretation
There is a very minute difference between Male & female. According to
the graph female are more into availing loans
Parameter - 5 [ Age ]
Age Group Mean
21 - 26 Years 36.67
27 - 32 years 36.68
Region 1 Region 2
36.6
36.62
36.64
36.66
36.68
21 yrs - 26 yrs 26 yrs - 32 yrs
36.6
36.62
36.64
36.66
36.68
Interpretation
Their is a negligible Difference of 0.01 between both the age groups
thus we can consider that both the
Gender Classification in Sector Of Employment
Gender Private Sector Govt. Sector
Male 36.24 37.26
Female 36.75 36.30
Male Female
36
36.5
37
37.5
38
Govt. Sector Private Sector
36.1
36.275
36.45
36.625
36.8
Testing Of Hypothesis
There is no signicant difference between male & Female
respondents in Government & Private sector Towards the perception of availing
loans @ 5% level of signicance (chi-square based on mean score)
Options Male Female Total
Private 36.24 36.75 72.99
Government 37.26 36.3 73.56
Total 73.5 73.05 146.55
Observations Expected O-E
(O-E)
2
/E
36.24 36.607 -0.367 0.0036793236
37.26 36.878 0.382 0.0039569391
36.75 36.383 0.367 0.0037019762
36.30 36.667 -0.367 0.003673303
Total 0.0150115419
df (2-1) (2-1) = 1
Table value is 3.841. The calculated value is less than the
table value so hypothesis is accepted
Chapter - 4
Major Findings
Finding :- 1
For the calculation of EMI banks use the following formula
or, equivalently,
Where:
- P is the principal amount borrowed,
- A is the periodic payment,
- r is the periodic interest rate divided by 100 (annual interest rate also divided by
12 in case of monthly installments), and
- n is the total number of payments (for a 1-year loan with monthly payments n =
1 # 12 = 12).
Findings :- 2
The total amount of loan disbustment shows an upward trend, But
individual Shows following trends
YEAR
2005
YEAR
2006
YEAR
2007
YEAR
2008
YEAR
2009
YEAR
2010
YEAR
2011
YEAR
2012
OVER DRAFT
DEMAND LOAN
TERM LOAN
BILL DISCOUNTED
REC. ASSETS
TOTAL
323 220 263 1370 764 379 235 1209
4314 2852 4366 78841 89596 92421 86148 8761
116465 166212 210989 161925 158395 186319 225152 352299
0 0 0 0 0 0 0 0
0 0 737 541 92 87 50 50
121102 169284 216355 242650 248847 279206 311585 362319
Findings :- 3

Todays youth seems to be interested in the Loan availing options as the
needs of the youth are a lot and, They like to pay for that in broken amount & not
the full amount at once thus they are in favor of the EMI.
Education has played a vital role in changing the youth perception, To let
them believe on the loans & paying EMI
Suggestions
- Housing Loan occupies second position though it has tax benets. so more
awareness is to be created regarding tax planning.
- Banks should go easy on the documentation so to support the education
loan .
- Female Respondent were not fully aware of the tax Saving Schemes
Conclusion
Through this study The crux of the amortization schemes were Divulged. This
has helped to understand the intricate calculation & repayment of loan.
The perception of the respondents has brought fourth that inclination of the
Female respondent toward availing loans & tax planning.
Bibliography
- Gupta K. Shashi & Sharma R.K., Financial Management, 2011, Kalayani
Publishers, New Delhi , 7
th
Edition.
- Prof. Jain Nirmal, Financial Management & Management Accounting, Nakoda
Siksha Sahita Publication, Indore, 1
st
edition
- Keown J. Arthur, Martin D. John , Foundations Of Finance, 2003, Prentice Hall,
New Jersey, 4th Edition
- http:\\www.sbi.co.in
- Shrivastava N.P. & Murugan Sakthivel, Financial Management, 2008, Vrinda
Publications, Delhi, 2
nd
Edition
annexure