You are on page 1of 99

Contents

Chapter

II

Introduction
Chapter

Research Methodology
Chapter

III

Company Profile
Chapter

IV

Data Analysis & Interpretation


Chapter

Conclusion, Suggestions & Bibliography

Chapter I
Introduction

INTRODUCTION TO BANKING
A bank is an institution, which deals with money and credit. It accepts deposits
from the public, makes the funds available to those who need them and help in
the remittance of money from one place to another.

In fact, Modern Bank

performs such a variety of functions that it is difficult to give precise and general
definition of it. It is because of this reason that different economics give different
definitions of the Bank.
According to Crowther, A bank collects money from those who have it to spare
or who are saving it out their incomes, and it lends this money to those who
require it.
In the words of kinley, A bank is an establishment which makes to individuals
such advances of money as may be required and safely made and to which
individuals entrust money when not required by them use.
According to john Paget, Nobody can be a banker who does not.
i)

Take deposit accounts.

ii)

Take current accounts.

iii)

Issue and pay cheques-crossed and uncrossed for its customers


Prof. Sayers define the term bank banking distinctly. He defines banks as

institution whose debts (Bank deposits) are widely accepted in


of other people debts to each other. Again, according to sayers, banking
business consists of changing cash for bank deposits and for cash. transferring

the bank deposits from one person or corporation to another, giving bank
deposits in exchange, government bonds, the secured promises of business to
repay and so forth.
According to Indian Companies Act 1949, banking means Accepting for the
purpose of lending or investment of deposits, of money from the

public,

repayable on demand or otherwise, and with-drawable by cheque, draft or


otherwise.
In short, the term bank, in the modern times, refers to an institution having the
following features.
i)

It deal with money, accepts deposits and advances loans.

ii)

It also deals with credit, has the ability to create credit, i.e. the ability to
expand its liabilities as a multiple of its reserves.

iii)

It is commercial institution; it aims at earning profits.

iv)

It is unique financial institution that creates demand deposits, which serve


as medium of exchange and as a result, the banks manage the payment
system of the country.

EVOLUTION OF BANKING IN INDIA


Roots of Banking Systems in ancient India can be traced 2010 years back.
Manusmrati and Arthshastra of Kautliya bear testimony to the existence and
working of banking system in India in ancient times. Ancient banking in our

country continued with much

or less difference from early vedic period till

Modern banking through Moghals and British period .


The unification of currency under the East India Company and the substitution of
single sovereign power in place of petty principles took away the business from
the hands of indigenous bankers and shroffs. Western type of banking started
19th century. First joint stock Bank Bank of Hindustan came into being in 1770
at Calcutta, followed by few other banks which could exist for shorter durations
only . In the first half of the 19 th century three presidency banks. Bank of Bengal
(1860), Bank of Bombay (1840) and bank of Madras (1843) were established.
First Indian Bank, Oudh Commercial Bank evolved in 1818, which was followed
by Punjab National Bank (1894) etc.

These banks were started with small

capital, which perhaps the major cause of failure off 87 banks during 1913-17
post. First World War period witnessed a large failure of commercial banks. In
1935 Reserve Bank of India was established which was nationalized in 1949.
However, effective control on banks could be imposed only after banking
Regulation Act 1949.
CLASSIFICATION OF BANKS IN INDIA
In India the banking sector is classified under the following heads:

RBI-CENTRAL APEX BANK

SBI AND SUBSIDIARIES

PUBLIC SECTOR BANKS

PRIVATE SECTOR BANKS

1.

FOREIGN BANKS

CO-OPERATIVE BANKS

DEVELOPMENT BANKS OR INSTITUTIONAL BANKS

NON-BANKING FINANCIAL COMPANIES (NBFC)

RBI-CENTRAL APEX BANK: The Central bank is the apex institution,


which controls, regulates and supervises the monetary and credit system
of the country. The Reserve Bank was established on April, 1935 under
the RBI Act 1934. But it was nationalized on January, 1949. Important
functions of central bank are:

a)

It has monopoly of note issue.

b)

It acts as the banker, agent and financial advisor to the government.

c)

It has the custodian of member banks reserve.

d)

It serves as the lender of last resort.

e)

It is the custodian of nations reserve of international currency.

f)

It functions as the bank of central clearance, settlement and transfer and it


acts as the controller of the credit.
Beside these functions, Indian Central Bank that is the Reserve Bank of

India also performs many development functions to promote economic


development in the country.
II.

SBI AND SUBSIDIARIES:

The State Bank of India is the biggest

commercial bank and holds. A special position in the modern commercial


banking system in India. It came into existence on june,1 1965, after

nationalization of the Imperial Bank of India. In 1955, on the


recommendation of Rural Survey Committee, the Imperial Bank of India
was nationalised and renamed as the State Bank of India through the SBI
Act of 1955 .
Apart from central banking functions, SBI also perform ordinary banking
functions such as
a)

Receiving deposits from and advancing loans to the public against eligible
securities.

b)

Investing its surplus funds in various securities and treasury bills.

c)

Buying and selling Gold and Silver

d)

Acting as an agent of co-operative bank

e)

Under-writing issues of stock, shares, debentures and other securities in


which it is authorize to invest funds.

f)

Drawing bills of exchange and granting letters of credits payable out of


India

Example : State Bank of Mysore, State Bank of Hyderabad etc.


III.

PUBLIC SECTOR BANKS: These banks are owned and controlled

by the government. In India, nationalized banks and regional rural banks come
under this category.
Examples: Union Bank of India, Canara Bank etc.
IV

PRIVATE SECTOR BANKS:

These banks are owned by private

individuals of corporations and not by the government and co-operative societies.

Example: Vysya Bank, ICICI Bank, HDFC Bank etc.


V.

FOREIGN BANKS: These banks are foreign in origin and have their head
offices in the country of its origin.

Example: Citi Bank, A & Z Grinlays, Standard Charted etc.,


VI.

CO-OPERATIVE BANKS: Co-operative banks are the institutions


established on co-operative basis and they deal in ordinary banking
business.

Like other banks, the co-operative banks also collect funds

through shares, accepts deposits and grant loans. In India, co-operative


credit institutions are organized under co-operative societies and play an
important role in meeting needs in rural areas.
Example: State Co-operative Banks, Vasavi Bank etc.,
VII.

DEVELOPMENT BANKS OR INSTITUTIONAL BANKS: These banks


mainly meet medium-term and long-term financial needs of the industries.
Such long-term needs cannot be met by commercial banks, which
generally deal with short-term lending. Its main functions are as follows:

a)

It accepts long-term deposits

b)

They grant long-term loans to the industrialists to enable them to purchase


land, construction factory building, purchase heavy machinery etc.

c)

They help in selling or even underwrite the debentures and shares of the
industrial firms.

d)

They can also provide information regarding general economic position of


the economy.

Examples: NABARD, EXIM Bank, IFCI etc.

RETAIL BANKING
Retail banking is a combination of product development and selling
strategies, essentially focused on personal banking segment.

In the banks

corporate objectives for business growth it is identified as thrust area. It is also


the need of the hour to mobilise a good portfolio of retail banking business, as it
provides a major source for sustaining growth in the industry and thus ensure the
banks position in market place.

Some distinguishing features between retail

banking and commercial banking are as under:


KEY DIFFERENCES BETWEEN RETAIL BANKING AND COMMERCIAL
BANKING
CUSTOMER
PRODUCT

PRICING
PROMOTION

RETAIL BANKING
It focuses on individual customers

COMMERCIAL BANKING
It focuses on business,
Institute, Corporate

It has similarity within the


products packaged differently to It
suit the purpose-housing loan,
vehicle loan, personal loans,
consumer durable loan, gold loan
etc
It is published and applied to all
customers uniformly
There is a point of sale promotion.
Grass root involvement for
extensive
marketing,
media/
advertisement campaign support
is given.

has

wide
product
differences,
customised loans,
with features to
suit the particular
borrower
or
transaction

It is selective and negotiable.


It is canvassed through
individual or institutional
contacts
and
supported

through corporate efforts in


It appeals to customers emotion customization & pricing.
and relationship.
APPEAL
It appeals to economic logic.
It may be appreciated that retail banking is a very Personalized service sold
through individual efforts with extensive involvement of each and everyone.
From the above said points of distinguishing features, it is now necessary to
analyze the management of retail banking business in more detail.

WHY RETAIL BANKING


The following are the reasons for targeting retail banking:
GROWTH MARKET: The growing income and standard of living ensures that the
market for personal loans is on the increase all the time. The culture of spending
tomorrows earnings today has sustained the retail banking growth in all the
developed market place and it is expanding in India too.
ASSURED MARKET:

The repeat order one can expect from retail banking

sector is very high. A customer satisfied with the first experience will prefer the
same bank for further needs. Linkage of loan products like housing loans lending
to consumer loan is also an attractive feature of retail banking.
PROFITABLE:

Retail banking products provide a good margin over cost of

funds. Economic logic that governs commercial banking does not matter much in

retail banking.

Retail banking products is accepted for its customer friendly

features including efficiency in delivering, selling, strategies, timely availability


and such other set of features, wherein price is only one of the parameters.
Hence, a good retail-banking product can be sold at a profitable price by
maintaining a good spread.
SIMPLE TO DELIVER: The products are structured for easy documentation and
delivery. The entire process can be completed in one sitting if the groundwork is
done systematically. It needs no high level of expertise in credit analysis. It
needs an aptitude to identify the right customer.
ALLOWS

EXTENSIVE

PARTICIPATION:

Retail

participation from branches and members of staff.

banking

allows

wider

Each one can play an

important role in promoting or delivering retail banking products.

ORIENTATION IN RETAIL BANKING


Developing a retail banking business requires two essential orientations.
They are :

1.

Product Orientation

Selling orientation

PRODUCT ORIENTATION: Retail banking deals with structured products

that appeal to personal and emotional needs.

Personal Loans under retail

banking will essentially address the following needs:

Loans for housing and house improvement.

Loans for consumer durables to sustain a progressive living standard.

Loans for personal needs, which may cover, travel, social, medical
and other lumpsum expenses.
The first two are asset based lending while the third mainly relate to the
income and ease of recovery from salary or income flow. Based on the three
needs, products are packaged and sold with distinguishing features depending
on the target group and appeal to customer.
The advantage of retail banking is that product differentials can be built in
at the point of sale by the branch and need not necessary be a

corporate

product handed over by the central office. For example.

A tie-up with a travel agent for personal loan to their customers for financing
vacation is a distinguished product from the plain personal loan scheme.

An arrangement with the computer learning institute for extending personal


loan scheme.

An arrangement with the computer learning institute for extending personal


loan to parents for payment of fees of their ward is a product with distinct
flavor.
There can be many such illustrations, which can be developed

Through product orientation at the branch level. Competition will reduce the
differences in most of the basis features. It is through product orientation one
can retain the attractiveness on ongoing basis.

2.

SELLING ORIENTATION:

Retail banking is aggressive selling.

For

strategy one need to differentiate two segments of the market-selling to


individuals and selling to groups.

SELLING TO INDIVIDUAL:
Individuals can be drawn from the banks existing client base, which in itself is
large and sustaining.

It is here that the selling orientation at the staff level

including the counter staff will be of utmost advantages to bank. This will require
each branch manager to involve their staff, familiarize them with the scheme and
identify selling strategies suited to the branch profit of customers.
As stated earlier retail banking enable wide participation at individual level.
Every staff can promote can these products among their friends and relatives
and also the members in the neighbors of their housing colonies. The multiple
effect of such participation can be phenomenal in converting them into retail
banking customer.
SELLING TO GROUPS:
The next is the group approach through the banks connections with corporate,
government departments, institution etc. Personal loan product will be immense
use in such tie-ups, as it offers a convenient line of credit to individuals purely
based on tie-ups for salary disbursement. Ex State Bank of Mysore has tied up
with MARUTI to float another attractive financing schemes for cars. Maruti cars
can be bought loans stretching up to seven-year tenure with a monthly payment

for every Rs1 lakh pegged at Rs.1712. The bank is prepared to finance the car
against its on the road price, which is the sum of ex-showroom price plus road
tax and insurance costs.
PRICING ISSUES
Individual do not seek to bargain. They normally go by convenience and speed
of loan facility. To promote retail banking every bank should known the product
features of competitors both from banking and non-banking groups. Everyone is
in this business to generate profits and hence will maintain a reasonable pricing
model. Those who declare lower rates have hidden cost in one form or another.
As such, banks should focus on convincing customers about the strength of their
product and the efficiency of the delivery system.
However, when it comes to bulk booking through institutional connections, some
negotiation may be witness. Since the cost of administrating such loans are on
the lower side as compared to individual

loans, a package scheme can be

worked out by Central Bank of extend some concession on merit on case-tocase basis.
SOME IMPORTANT ASPECTS
To promote retail banking banks have to be ready with some basis needs all the
time for completing the loan formalities in a quick way. These are.

Publicity materials ready and handy forms and documents in convenient sets
of quick execution when the deal is finalised.

Full information about the scheme with latest amendments conveyed by


corporate office.

In promoting retail banking time is the essence for success. The bank
Cannot call the customers a second time to complete documents. There are
others waiting to pick them up.
THE ISSUES INVOLVED
Through principal of marketing as applicable to marketing of services, also apply
to retail banking. There are some crucial differences.
The market for retail, for example, is far more regulated than many service
market situations, quite a large number of variables are such that one
cannot really play around with them.
It is a high operating cost environment. It is obvious that if thousand of
loans amounting to a crore rupees are being arranged, the operating cost
would be higher that if one loan of one crore is being made.

Higher

margin therefore becomes imperative.


Retail banking is simply not feasible without automation, handling of
volume of that order without for speed of handling would be impossible.
Then, while prices for services to a certain extend depend upon volumes and net
returns on funds, in the Indian context, strictly speaking prices are controlled. As
opposed to products, where appeals can be created by skills use of colour,
perfume, packaging and design the product here is devoid to sensual appeal.

In another distinguishing features, in retail banking it is difficult for competition to


eat into the banks market share if they have once established a relationship. In
case of organizational clients, it is easier to sway customers by varying changes
by fractions of percentage but individually, most consumers are not willing to
switch for 1/8th of a percent. The possibilities of creating a franchise, as the
relationship is on person level, is far higher in retail banking.
Financial services, retail banking included gets distributed through a limited
physical distribution channel which is again a decision issue when increased
volume of service delivery is under consideration.

CLASSIFICATION OF LOANS
Loans are classified into
1.

Priority Sector

2.

Non-Priority sector.

Priority Sector Lending: It is again divided into three broad groups, which are as
follows:
1.

Primary Sector:

It comprises of lending to agricultural and allied

agricultural activities like dairy, poultry, fishery, animal husbandry, bee


keeping, horticulture, mushroom culture and etc.
2.

Secondary Sector: It comprises of lending of small-scale industry that is


direct and indirect lending to small-scale industrial sector.

3.

Tertiary Sector: It comprises of lending to trade both retail trade and small
business activities,

professional and self-employed groups, road and

water transport operators, education and consumption loans.


Lending to priority sector mainly comes under target oriented
lending decided by various benchmarks given to commercial banks by RBI from
time to time. These benchmarks let the commercial banks to invest 40% of their
overall lending to these sectors, which has resulted the banks to lend at lower
interests rates. The increase in non-performing assets in the priority sector loans
as well as lower interest rates resulted with decrease in profitability of the banks.
After the deregulation of interest rates by the central bank and to increase the
profitability under income recognition norms, banks are in search of good priced
loan products with a demand in the clientele market.

On set of these

perceptions, banks identified retail banking as a thrust area.


The retail banking mainly comprises of housing loans, consumer durable loans,
personal loan, vehicle loans and gold loans.

These loans come under the

purview of non-priority sector where banks can fix effective interest rates and
also identify broad base.

THE MAHESH CO-OPERATIVE URBAN BANK


The Urban credit societies were organised in India soon after the enactment of
the first co-operative societies Act in 1904. These societies were mainly intended
to promote thrifts to provide credit to needy members thus offering relief from the

of money lenders.

These societies undertake various bank services beside

providing credits styled themselves as urban co-operative bank.

The urban bank are undertaking various banking activities which beside
acceptance of deposits, lending for the promotion of industrial growth particularly
to SSI & cottage industries for various types of trades profession, discounts,
collection of bills, provision of safe deposits, lockers facilities, provision by of a
bank guarantees, foreign exchange etc after study sizeable proportion of the total
deposits of the banking structure in the country. Therefore certain provisions of
the banking regulations act 1949 which came into force on 16 th March 1949 were
extended to Co-operative banks effect from 1st March 1966.

The growth of number of branches variety business undertaken by co-operative


urban bank. Every co-operative bank have they own banking manual which is
provided by the head-office. There own role regulations as well as operation of
the banking system.
The A.P. Mahesh Co-operative Urban Bank was incorporated in 30 th June 1997.
The banking service system was actually started in 1978 with the working capital
of Rs.30.04 Lakhs, Begum Bazar has emerged as the first branch of the Bank.
The bank had 2216 members initially as a share holders of the bank with share
capital of Rs.4,40,020. The statutory reserve fund with RBI was Rs.1,158 and the
other reserves was Rs.1,534. In the first year of the banking operations bank
collected the of as many as Rs.24.55 lakhs and lended the advances of Rs.9.53

lakhs, therefore securing a net profit of Rs.0.03 lakhs. At present the profit of the
bank is 482.57.

In the very next year i.e., 1979-80, membership was classified into two
categories such as A & B reason behind this was the member should has A class
shares to take the loan from the bank and the member if any taking the
surety/guarantee should be a member of B class shares. At present A class
membership of A class is 38711 and the paid up share capital of the bank is
Rs.10.32 crores. The share of B class is Rs.0.04 crores and the membership is
76343. The bank has got its scheduled bank recognisation from Reserve bank of
India in 26th October 1996.
Slowly and steadily the bank has registered a tremendous growth in banking
system, expanding its banking activities through the Andhra Pradesh. The bank
now has as many thirty branches including the head office situated in Hyderabad.
The banks proposal to open branches in coastal districts at Vijayawada, Guntur,
Rajahmundry and Visakhapatnam was accepted by R.B.I. Soon the bank will
implement expansion plan drawn to open branches in Telangana region. The
banks proposal to convert the Banks registration to Multi State Co-Operative
Societies Act, 1984 is before you for consideration and approval in Maharastra,
Rajasthan, Madhya Pradesh, Karnataka and West Bengal.

All the branches are fully furnished and equipped with the latest technologies. All
branches are fully computerised.

Bank as success fully completed the

implementation of Total Automation Project at all its branches apart from the
head office. Further, the bank propose to open all new branches fully automated.

Considering Training as one of the important tools of Human Resources


Development, Bank has been deputing staff and officers to various Training
Institutions of national repute such as Vaikunt Mehta Institute of Co-operative
Management (VAMNICOM), Pune, National Institute of Bank Management,
College of Agriculture Banking, National Institute of Small Industry Extension
Training (NISIET), Reserve Bank of India, etc.
Audit is treated as one of the management tools to regulate the working of
organisation. Professional Chartered Accountant Firms to conduct audit of the
various branches of the bank. Statutory audit for the year is conducted by a
Chartered Accountant firm appointed by the Registrar of Co-operative Societies,
Govt. of Andhra Pradesh.
The bank released donations from the Common Good Fund to an extent of
Rs.11.74 lakhs during the period under report.

TERMS AND CONDITIONS FOR DIFFERENT LOANS


TERMS AND CONDITIONS OF TERM LOAN
Name & Address of the Unit

: M/s

1.

Amount of term loan

: Rs.

2.

Purpose of term loan

Lakhs.

3.

Period of term loan : 60 months

4.

Moratorium

5.

Method of Repayment

: In installment Rs.Lakhs per quarter

6.

Repayment :

repayment shall commence after months from the date of

disbursement of any part of term loan.


7.

Security
a)

Hypothecation of Plant & Machinery, existing, proposed and all


future acquisition.

b)

Extn. of all the securities/sureties offered to the credit facility


sanctioned by the bank.

8.

Interest

18% p.a. subject to changes from time to time as per

Boards decision.
9.

Interest rate variability clause: Notwithstanding what is contained herein,


the borrower shall pay the bank interest at such other rates from time to
time be fixed by the bank and intimated to the borrower/company/firm
subject to such rates not exceeding the rates prescribed by the Reserve
Bank of India.

10.

The bank will have the right to examine at all times, the units/firms/
companies books of account and to have the units/firms/companys/
inspected from time to time by officer of the bank and/or qualified auditors
and the banks choice cost of such inspection shall be borne by
units/firm/company.

11.

During the currency of the banks credit facilities, the unit/firm/ company
will not without the banks permission in writing:
a)

Effect any change in capital structure.

b)

Enter into borrowings arrangement either secured or


unsecured with any other bank or financial institution, company or
otherwise.

c)

Undertake

guarantees

obligation

on

behalf

of

any

other

company/firm/units etc.
d)
12.

Repay unsecured loans obtained from friends/relatives or others.

The unit will keep the bank informed of the happenings, if any event likely
to have substantial affect on their profit or business, if, for instance, the
monthly production/sales are substantially less than what had been
indicated to the bank.

The unit/firm/company will inform the bank

accordingly with explanations and the remedial steps proposed to be


taken.
13.

The unit will place with the bank all its banking business including foreign
exchange, if any, and deposits.

14.

Proper books of accounts should be maintained and yearly accounts


should be submitted to the bank and these account books should be
accessible to the field staff during the course of periodical inspections.
The returns submitted to the sales tax and income authorities should also
be produced to the bank annually for perusal and records.

15.

Important events like suspension of manufacturing activities, change of


premises fire in the factory, labour troubles/strikes or any event that is
likely to effect production and endanger banks security should be
immediately brought to the notice to the bank detailing the records leading
to such an eventuality and steps taken to overcome it.

16.

All legal and incidental charges may have to be incurred by the bank in the
conduct of the account shall be debited to the units/firms/companies
account maintained with us.

17.

The bank shall reserve the right to call up the loan at any time in the
happening of may event which in the opinion of the bank is likely to
jeopardize the banks interest.

18.

All cash and bank operations to be reflected in the account.

19.

Any change in the constitution of the unit shall have the prior written
approval of the bank.

20.

A stamped declarations is to be obtained from the owner of property


offered as primary and collateral security affirming that the propriety is free
from any adverse claims that it is not a subject matter of any litigation and
that no notice has received from the municipality for acquisition
enrichments of repairs or road widening.

21.

A credit facilities sanctioned will be released only after obtaining


favourable legal opinions from our panel advocates and that the
documents shall be strictly submitted as per the legal advisor/s opinion.

22.

Upto date non-encumbrance certificate shall be submitted.

23.

An irrevocable authorisation letter is to be submitted authorising the bank


to pay the municipal tax, electricity charges etc, and any other dues to the
government and quassi government departments pertaining to the said
property as and when demand notices are received by raising the debit to
term loan account.

Further the applicant shall regularise the account

within one week from the date of notice from the bank.
24.

All the securities i.e., primary and collateral shall be comprehensively


insured with bankers clause and a copy of the same shall be forwarded to
the applicant under registered post acknowledgement due with an advise
to verify and ensure that all the assets offered as primary and collateral
security have been insured for full value and there is no under or over or
dual insurance and anything of these nature shall be brought to the banks
notice within 15 days from the date of the letter and no claim of any sort
will be entertained thereafter.

25.

An irrevocable authorisation letter shall be submitter by the applicant


authorising the bank to raise a debit in OCC/OD/Current account as and
when interest and intalments are due for transfer to term loan account and

if the account gets overdrawn due to such debit the same will be
regularised within 7 date from the date of debit.
26.

Interest component charges during the gestation/moratorium period shall


be recovered on quarterly basis i.e., as when debited to the account.

27.

Credit facilities shall be released by way of direct payment to the dealer


i.e., supplier of particular asset after collecting margin money. It shall be
ensured that earnest money if any paid towards the supply of particular
asset, stamp receipts shall be obtained. Further where the ensured that
the cheques have been honoured and a certificate from the drawee bank
shall be obtained.

28.

Periodical inspection shall be conducted.

29.

Banks board shall be displayed at all such places where the assets
financed by the bank are installed/places.

30.

It shall be ensured that capital/unsecured loans as projected in the cost of


project and means of finance i.e., Rs.89.13 lakhs have been brought in by
the unit. It should be certified by a Chartered Accountant.

31.

Where credit facilities are to be released by way of reimbursement the


same shall be done only after obtaining a copy of invoice and other
relevant documents.

Inspection shall be conducted by the Branch

Officials before the release of the facilities.

32.

An irrevocable undertaking letter shall be obtained from all the unsecured


lenders that they will not demand the remain of unsecured loans till the
redemption of the banks credit facilities i.e., existing proposed subject and
all future sanctions.

33.

The bank is at liberty to amend/add/delete any of the aforesaid term loan.

34.

Processing charges will be collected as per the norms in vogue.

35.

The branch shall release any part of the term loan only on submission of
relevant quotations for purchase of the proposed plant & machinery and
estimates for the civil works as mentioned in the office note. The loan
amount shall be restricted to 75% and 50% respectively of such amount.

36.

The following copies of registration/approvals shall be obtained and kept


on records.
a)

Copy of SSI registration certificates of the unit.

b)

Copy of registration with APGSTM CST, Excise and NOC from


APPCB

37.

The place of business shall be inspected by Branch officials and the


inspection report thereof shall be kept on records.

TERMS AND CONDITIONS


KEY CASH CREDIT/KEY CUM TRUST FACILITY:

M/s

1.

Amount of loan sanctioned

2.

Interest

Rs.

Lakhs

18% p.a. subject to changes from time to time as per

Boards decision.
3.

Security :

a) Pledge of stocks
b) The securities offered to working capital limits shall also
be extended.

4.

Storage and Possession : Stocks under pledge and kept in godowns


should be well built. Stocks should be stored properly so as to render
easy verification and identifications is possible.

5.

Margin

: 35%

6.

Basis of valuation : Cost price of market price or Invoice price whichever is


lower.

7.

Inspection

: Care should be taken to ensure that there is periodical

turnover in the stocks.


8.

Insurance

: Stocks to be comprehensively insured for their full value

under joint names.


9.

Period of sanction : One year from the date of present sanction.

10.

Others :
a)

Pledge boards to be prominently displayed at the entrance of the


units/firms/company godowns/premises wherein the stocks are
stored.

b)

Trust period should be exceed 20 days from the date of


disbursement. Incase of non payment on due date, goods shall be
pledged under lock and key of the Bank in the borrowers godown.

c)

Delivery of goods pledged shall be taken within 3 months of


pledgement.

11.

All other terms and conditions mentioned in open cash credit shall be
applicable.

TERMS AND CONDITIONS


BOOK DEBTS LIMITS:
M/s.
Rs.

(Rupees)
With an interchangeability of Rs.

lakhs from OCC (Stocks) to Book

Debts and vice-versa.


1.

Statement of book debts shall be submitted every month.

2.

All the book debts/receivable are to be assigned banks favour.

3.

Margin

% to be maintained on book debts outstanding every month

and drawing power to be fixed at the above rate as and when the party
submits copy of duly acknowledged delivery challan and bill.
4.

A separate register should be maintained to ensure that the payments are


directly received in the account and also to properly monitor the account.

Immediately after 60 days the borrowers OCC account should be debited


with the amount of credit given against each bill.
5.

The period of book debts shall be 60 days only.

6.

Interest shall be charged @

% p.a. subject to changes as per the

banks board decision from time to time.


7.

The limit shall be valid for a period of one year only.

8.

The borrower is prohibited from using the loan amount or any part thereof
for any purpose other than for which it is sanctioned and if the bank
apprehends or it has reasons to believe that the borrower has violated or it
violating this condition it has right to recall the loan amount or any part
thereof at once notwithstanding anything to the contrary contained in the
loan agreement or any other agreement.

9.

The collateral security/ies offered to OCC (Stock) limit shall be extended to


this credit facility also.

10.

Processing/commitment charges shall be collected as per HO circular


issued from time to time.

BANK WISE -- BRANCH STATISTICS


Table No. 12 : Bank-Group, Bank and Population Group-Wise Number of
Branches of Commercial Banks March 2012
BANK GROUP / BANK

POPULATION GROUP
RURAL SEMI- URBAN METRO- TOTAL

URBAN
1
SBI AND ITS ASSOCIATES
State Bank of Bikaner and Jaipur
State Bank of Hyderabad
State Bank of India
State Bank of Indore
State Bank of Mysore
State Bank of Patiala
State Bank of Saurashtra
State Bank of Travancore

2
5512
311
292
4104
131
213
274
139
48

3
3998
223
268
2439
128
145
196
133
466

4
2247
131
184
1425
59
106
164
69
109

POLITA
N
5
1696
131
131
1003
98
135
83
68
47

BRANCHE
S
6
13453
796
875
8971
416
599
717
409
670

NATIONALISED BANKS
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
Indian Bank
Indian Overseas Bank
Oriental Bank of Commerce
Punjab and Sind Bank
Punjab National Bank
Syndicate Bank
UCO Bank
Union Bank of India
United Bank of India
Vijaya Bank

13754
973
387
1158
1252
547
762
1399
173
430
491
555
236
294
1928
653
796
814
649
257

6902
311
288
523
472
219
649
742
126
213
356
351
274
108
701
404
327
450
201
187

6470
362
232
460
406
206
517
535
174
192
318
307
277
211
695
375
324
422
243
214

5489
249
129
481
397
242
490
423
178
253
229
256
191
136
499
334
279
341
210
172

32615
1895
1036
2622
2527
1214
2418
3099
651
1088
1394
1469
978
749
3823
1766
1726
2027
1303
830

FOREIGN BANKS
ABN Amro Bank N.V.
Abu Dhabi Commercial Bank Ltd.
American Express Bank Ltd.
Arab Bangladesh Bank Limited
Bank Internasional Indonesia
Bank Muscat International S.A.O.G.
Bank of America N.T. and S.A.
Bank of Bahrain & Kuwait B.S.C.
Bank of Ceylon
Bank of Nova Scotia
Bank of Tokyo Mitsubishi Ltd.

22

213
11
2
4
1
1
1
4
2
1
4
4

237
11
2
4
1
1
1
4
2
1
5
4

Barclays Bank PLC

BNP Paribas

China Trust Commercial Bank

Cho Hung Bank

Citibank N.A.

Commerzbank A.G.

Credit Agricole Indo Suez

Credit Lyonnais

Deutsche Bank (Asia)

Dresdner Bank A.G.

Hongkong and Shanghai Banking


Corpn. Ltd.
ING Bank N.V.

JPMorgan Chase Bank

KBC Bank N.V.

Krung Thai Bank Public Company


Limited
Mashreq Bank PSC

Mizuho Corporate Bank Ltd.

Oman International Bank S.A.O.G.

Oversea-Chinese Banking Corporation


Ltd.
Societe Generale

Sonali Bank

Standard Chartered Bank

Standard Chartered Grindlays Bank Ltd.


State Bank of Mauritius Ltd.

Sumitomo Mitsui Banking Corporation


The Development Bank of Singapore
Ltd.
The Siam Commercial Bank Limited

The Toronto-dominion Bank

UFJ Bank Ltd.

2
10
1
1
14
1
2
4
5
2
23

2
10
1
1
17
1
2
4
5
2
30

2
1
1
1

2
1
1
1

2
1
1
1

2
1
2
1

5
5

4
1
54
35
3
2
1

4
1
59
42
3
2
1

1
1
1

1
1
1

REGIONAL RURAL BANKS


Adhiyaman Grama Bank
Akola Gramin Bank
Alaknanda Gramin Bank
Aligarh Gramin Bank
Allahabad Kshetriya Gramin Bank
Alwar-Bharatpur Anchalik Gramin Bank
Ambala-Kurukshetra Gramin Bank
Aravali Kshetriya Gramin Bank
Arunachal Pradesh Rural Bank
Aurangabad Jalna Gramin Bank
Avadh Gramin Bank

2045
5
2
4
10
5
11

11
2
2
13

359

7
1
2
1
1

2
1

17

14483
25
47
49
85
83
90
39
64
19
54
114

12062
20
43
45
68
77
77
38
52
17
50
95

Baitarani Gramya Bank


87
Balasore Gramya Bank
58
Ballia Kshetriya Gramin Bank
81
Banaskantha Mehsana Gramin Bank
65
Bara Banki Gramin Bank
83
Bardhaman Gramin Bank
84
Bareilly Kshetriya Gramin Bank
63
Bastar Kshetriya Gramin Bank
58
Basti Gramin Bank
99
Begusari Kshetriya Gramin Bank
14
Bhagalpur-Banka Kshetriya Gramin19
Bank
Bhagirath Gramin Bank
96
Bhandara Gramin Bank
38
Bhilwara Ajmer Kshetriya Gramin Bank 40
Bhojpur Rohtas Gramin Bank
138
Bijapur Grameena Bank
75
Bikaner Kshetriya Gramin Bank
24
Bilaspur-Raipur Kshetriya Gramin Bank 125
Bolangir Anchalik Gramya Bank
137
Buldhana Gramin Bank
16
Bundelkhand Kshetriya Gramin Bank
70
Bundi Chittorgarh Kshetriya Gramin58
Bank
Cachar Gramin Bank
33
Cauvery Grameena Bank
107
Chaitanya Grameena Bank
35
Chambal Kshetriya Gramin Bank
12
Champaran Kshetriya Gramin Bank
119
Chandrapur Gadchiroli Gramin Bank
51
Chhatrasal Gramin Bank
65
Chhindwara Seoni Kshetriya Gramin57
Bank
Chickmagalur-Kodagu Grameena Bank 44
Chitradurga Gramin Bank
83
Cuttack Gramya Bank
119
Damoh Panna Sagar Kshetriya Gramin53
Bank
Devipatan Kshetriya Gramin Bank
70
Dewas-Shajapur Kshetriya Gramin Bank47
Dhenkanal Gramya Bank
45
Dungarpur Banswara Kshetriya Gramin38
Bank
Durg Rajnandgaon Gramin Bank
86
Ellaquai Dehati Bank
75
Etah Gramin Bank
47

3
4
8
9
6
5
10
5
4
7
3

1
8

90
62
89
74
89
90
81
63
103
21
24

10
6
8
17
8
3
12
11
9
16
6

2
1
5
2
1
1
2
2

108
45
53
157
84
28
139
150
25
86
64

7
14
13
14
23
8
20
10

4
3
3
5

44
124
51
31
142
60
85
67

2
7
2
15

1
1
3

46
91
122
71

8
9
8
3

78
59
53
41

9
10
12

4
3

99
88
59

Etawah Kshetriya Gramin Bank


47
Faizabad Kshetriya Gramin Bank
65
Faridkot-Bathinda Kshetriya Gramin15
Bank
Farrukhabad Gramin Bank
69
Fatehpur Kshetriya Gramin Bank
51
Ganga Yamuna Gramin Bank
36
Gaur Gramin Bank
124
Giridh Kshetriya Gramin Bank
23
Godavari Grameena Bank
26
Golconda Grameena Bank
16
Gomti Gramin Bank
78
Gopalganj Kshetriya Gramin Bank
52
Gorakhpur Kshetriya Gramin Bank
186
Gurdaspur Amritsar Ksh.Gramin Vikas52
Bank
Gurgaon Gramin Bank
104
Gwalior Datia Kshetriya Gramin Bank 26
Hadoti Kshetriya Gramin Bank
65
Haryana Kshetriya Gramin Bank
75
Hazaribagh Kshetriya Gramin Bank
25
Himachal Gramin Bank
100
Hindon Gramin Bank
19
Hissar-Sirsa Kshetriya Gramin Bank
39
Howrah Gramin Bank
53
Indore Ujjain Kshetriya Gramin Bank
30
Jaipur Nagaur Aanchalik Gramin Bank 121
Jammu Rural Bank
88
Jamnagar Rajkot Gramin Bank
49
Jamuna Gramin Bank
25
Jhabua-Dhar Kshetriya Gramin Bank
71
Junagadh-Amreli Gramin Bank
34
Ka Bank Nongkyndong Ri Khasi Jaintia 46
Kakathiya Grameena Bank
32
Kalahandi Anchalik Gramya Bank
71
Kalpatharu Grameena Bank
62
Kamraz Rural Bank
79
Kanakadurga Grameena Bank
22
Kanpur Kshetriya Gramin Bank
77
Kapurthala Ferozpur Kshetriya Gramin36
Bank
Kashi Gramin Bank
73
Kisan Gramin Bank,Budaun
43
Kolar Gramin Bank
52
Koraput-Panchabati Gramya Bank
81
Kosi Kshetriya Gramin Bank
133

5
1
6

1
1
1

53
67
22

10
3
2
19
4
4
7
4
7
12

3
1
1
5

3
3
2

2
1

82
55
39
148
27
33
26
84
59
200
53

12
5
17
12
5
6

3
3
6
21
3
2
9
14
3
3
4
7
16
2
2
12
6

4
1
4
3

2
3
3
1

1
2
7

1
2
4

1
1

120
32
86
90
30
106
21
45
59
38
143
92
53
41
85
38
51
40
78
82
81
29
94
42

4
8
11
9
25

4
2

81
53
63
90
164

Krishna Grameena Bank


105
Kshetriya Gramin Bank, Hoshangabad 70
Kshetriya Kisan Gramin Bank, Mainpuri 55
Kutch Grameen Bank
26
Lakhimi Gaonlia Bank
90
Langpi Dehangi Rural Bank
36
Madhubani Kshetriya Gramin Bank
73
Magadh Gramin Bank
149
Mahakaushal Kshetriya Gramin Bank
27
Malaprabha Grameena Bank
168
Mallabhum Gramin Bank
169
Malwa Gramin Bank
38
Mandla Balaghat Kshetriya Gramin44
Bank
Manipur Rural Bank
21
Manjira Grameena Bank
56
Marathwada Gramin Bank
184
Marudhar Kshetriya Gramin Bank
51
Marwar Gramin Bank
116
Mayurakshi Gramin Bank
60
Mewar Aanchalik Gramin Bank
46
Mithila Kshetriya Gramin Bank
72
Mizoram Rural Bank
45
Monghyr Kshetriya Gramin Bank
72
Murshidabad Gramin Bank
32
Muzaffarnagar Kshetriya Gramin Bank 23
Nadia Gramin Bank
51
Nagaland Rural Bank
4
Nagarjuna Grameena Bank
112
Nainital Almora Kshetriya Gramin Bank 51
Nalanda Gramin Bank
60
Netravati Grameena Bank
12
Nimar Kshetriya Gramin Bank
57
North Malabar Gramin Bank
34
Palamau Kshetriya Gramin Bank
69
Panchmahal Vadodara Gramin Bank
45
Pandyan Grama Bank
115
Parvatiya Gramin Bank
26
Patliputra Gramin Bank
17
Pinakini Grameena Bank
66
Pithoragarh Kshetriya Gramin Bank
24
Pragjyotish Gaonlia Bank
128
Pratapgarh Kshetriya Gramin Bank
67
Prathama Bank
141
Puri Gramya Bank
100
Rae Bareli Kshetriya Gramin Bank
69

5
21
15
6
8
7
16
15
11
52
5
2
10

3
2

3
15
2
1

116
91
70
35
100
43
89
164
41
235
176
41
54

5
9
42
9
16
5
7
7
4
33
7
1
11
4
30
9
4
8
12
112
6
9
41
1
3
20
1
28
4
17
4
4

5
1
3
1
1
1
3

2
3
2
2

1
5

8
7

29
65
232
60
134
65
58
80
52
106
40
25
65
8
145
60
66
23
71
148
75
57
162
27
21
91
25
162
71
166
111
73

Raigarh Kshetriya Gramin Bank


53
Rajgarh Sehore Kshetriya Gramin Bank 39
Ranchi Kshetriya Gramin Bank
69
Rani Lakshmi Bai Kshetriya Gramin29
Bank
Ratlam Mandsaur Kshetriya Gramin24
Bank
Ratnagiri Sindhudurg Gramin Bank
35
Rayalaseema Grameena Bank
108
Rewa-Sidhi Gramin Bank
74
Rushikulya Gramya Bank
67
Sabarkantha-Gandhinagar Gramin Bank 22
Sagar Gramin Bank
101
Sahyadri Gramin Bank
22
Samastipur Kshetriya Gramin Bank
64
Samyut Kshetriya Gramin Bank
150
Sangameshwara Grameena Bank
51
Santhal Parganas Gramin Bank
94
Saran Kshetriya Gramin Bank
62
Sarayu Gramin Bank
39
Shahdol Kshetriya Gramin Bank
34
Shahjahanpur Kshetriya Gramin Bank 31
Sharda Gramin Bank
54
Shekhawati Gramin Bank
79
Shivalik Kshetriya Gramin Bank
38
Shivpuri Guna Kshetriya Gramin Bank 44
Shri Sathavahana Grameena Bank
41
Shri Venkateswara Grameena Bank
58
Singhbhum Kshetriya Gramin Bank
71
Siwan Kshetriya Gramin Bank
65
Solapur Gramin Bank
28
South Malabar Gramin Bank
36
Sravasthi Gramin Bank
83
Sree Anantha Grameena Bank
60
Sri Saraswati Grameena Bank
63
Sri Visakha Grameena Bank
126
Sriganganagar Kshetriya Gramin Bank 35
Srirama Grameena Bank
24
Subansiri Gaonlia Bank
40
Sultanpur Kshetriya Gramin Bank
91
Surat Bharuch Gramin Bank
31
Surendranagar Bhavnagar Gramin Bank 32
Surguja Kshetriya Gramin Bank
79
Thane Gramin Bank
23
Thar Aanchalik Gramin Bank
63
Tripura Gramin Bank
71

7
7
7
12

4
3

60
46
80
44

16

42

4
32
5
11
7
10
6
9
17
14
9
1
4
8
3
4
20
2
9
4
10
5
4
6
152
4
10
9
31
8
2
4
2
5
7
4
1
5
11

8
4
4
1
4
1

2
1
1
1
4
2
3

1
9
1
4

7
1
1
1

1
2

1
1
4

39
148
83
82
30
115
29
73
167
67
103
64
43
42
36
59
100
41
57
47
71
76
69
35
197
88
74
72
164
44
27
45
93
37
41
83
25
69
86

Tulsi Gramin Bank


Tungabhadra Gramin Bank
Uttar Banga Kshetriya Gramin Bank
Vaishali Kshetriya Gramin Bank
Vallalar Grama Bank
Valsad-Dangs Gramin Bank
Varada Grameena Bank
Vidisha-Bhopal Kshetriya Gramin Bank
Vidur Gramin Bank
Vindhyavasini Gramin Bank
Visveshvaraya Grameena Bank
Yavatmal Gramin Bank

77
123
78
148
17
34
19
16
32
38
22
12

OTHER SCHEDULED COMMERCIAL 1140


BANKS
Bank of Punjab Limited

Bank of Rajasthan Ltd.


105
Benaras State Bank Ltd.
15
Bharat Overseas Bank Ltd.
8
Catholic Syrian Bank Ltd.
33
Centurion Bank Ltd.

City Union Bank Limited


32
Development Credit Bank Ltd.
2
Dhanalakshmi Bank Ltd.
24
Federal Bank Ltd.
30
Ganesh Bank of Kurundwad Ltd.
8
Global Trust Bank Limited
7
HDFC Bank Ltd.
6
ICICI Bank Limited
82
IDBI Bank Limited
5
Indusind Bank Ltd.

Jammu & Kashmir Bank Ltd.


219
Karnataka Bank Ltd.
96
Karur Vysya Bank Ltd.
41
Lakshmi Vilas Bank Ltd.
40
Lord Krishna Bank Ltd.
12
Nainital Bank Ltd.
17
Nedungadi Bank Ltd.
8
Ratnakar Bank Ltd.
22
Sangli Bank Ltd.
51
SBI Commercial & International Bank
Ltd.
South Indian Bank Ltd.
72
Tamilnad Mercantile Bank Ltd.
46

7
30
31
31
5
6
9
7
7
2
2
11

8
2
1
1
1

2
2
1

84
161
111
180
23
41
28
23
39
42
26
24

1762

1333

1156

5391

19
71
39
8
167
14
33
10
81
249
11
13
31
79
14
9
34
87
67
80
46
14
92
22
45

24
64
38
31
57
19
33
10
30
76
7
18
41
86
23
9
92
101
71
60
21
14
54
16
46

36
70
13
31
26
26
21
32
17
56
2
45
88
99
34
23
41
75
34
32
14
9
21
10
39
2

79
310
105
78
283
59
119
54
152
411
28
83
166
346
76
41
386
359
213
212
93
54
175
70
181
2

198
55

62
41

46
22

378
164

United Western Bank Ltd.


UTI Bank Ltd.
Vysya Bank Ltd.

49

110

NON-SCHEDULED
COMMERCIAL 3
BANKS
Coastal Local Area Bank Ltd.

Krishna Bhima Samruddhi Local Area


Bank Ltd.
South Gujarat Local Area Bank Ltd.
3
ALL-COMMERCIAL BANKS
32471

61
25
88

54
31
104

62
55
75

226
111
377

16

5
1

3
2

8
3

1
14716

10437 8571

5
66195

STATE AND DISTRICT WISE BRANCH STATISTICS


Table No. 11 : District and Population Group-Wise Number of Branches of
Commercial Banks Functioning in Each State March 2012
POPULATION GROUP
STATE / UNION TERRITORY
RURAL SEMIURBAN METRO- TOTAL
DISTRICT NAME
URBAN
POLITAN BRANCHE
S
1
2
3
4
5
6
ANDAMAN & NICOBAR ISLANDS17
14

31
Andaman
15
13

28
Nicobar
2
1

3
ANDHRA PRADESH
Adilabad
Anantapur
Chittoor
Cuddapah
East Godavari
Guntur

2433
105
116
128
89
129
147

1233
40
55
63
41
101
90

1014

42
63
36
101
95

527

5207
145
213
254
166
331
332

Hyderabad
Karimnagar
Khammam
Krishna
Kurnool
Mahbubnagar
Medak
Nalgonda
Nellore
Nizamabad
Prakasam
Rangareddy
Srikakulam
Vishakhapatnam
Vizianagaram
Warangal
West Godavari

2
105
96
133
89
124
120
119
106
103
133
92
87
92
82
109
127

2
48
37
61
53
56
42
63
52
31
65
58
51
66
26
26
106

9
24
20
148
65
17

42
29
24
51

126
25
53
44

527

540
177
153
342
207
197
162
182
200
163
222
201
138
284
133
188
277

ARUNACHAL PRADESH
Chunglang
Dibang Valley
East Kameng
East Siang
Lohit
Lower Subansiri
Papumpare
Tawang
Tirap
Upper Siang
Upper Subansiri
West Kameng
West Siang

56
4
2
2
7
5
6
6
3
4
2
2
6
7

12

3
1

1
1
1

68
4
2
2
10
6
6
11
3
4
2
3
7
8

ASSAM
Barpeta
Bongaigaon
Cachar
Darrang
Dhemaji
Dhubri
Dibrugarh
Goalpara
Golaghat
Hailakandi
Jorhat
Kakrojhar

799
44
22
45
34
17
23
38
29
37
15
32
16

256
15
16
1
15

15
12
6
9
5
2
9

159

23

18

25

1214
59
38
69
49
17
38
68
35
46
20
59
25

Kamrup
Karbi Anglong
Karimganj
Lakhimpur
Morigaon
Nagaon
Nalbari
North Cachar Hills
Sibsagar
Sonitpur
Tinsukia

62
48
31
40
21
63
41
9
42
53
37

13
5
14
6
7
24
5
7
13
25
32

93

168
53
45
46
28
87
46
16
55
78
69

BIHAR
Araria
Arwal
Aurangabad
Banka
Begusarai
Bhagalpur
Bhojpur
Buxar
Darbhanga
Gaya
Gopalganj
Jamui
Jehanabad
Kaimur
Katihar
Khagaria
Kishanganj
Lakhisarai
Madhepura
Madhubani
Munger
Muzaffarpur
Nalanda
Nawada
Paschimi Champaran
Patna
Purbi Champaran
Purnia
Rohtas
Saharsa
Samastipur
Saran
Sheikhpura

2496
47
25
70
51
60
71
74
51
105
117
73
42
29
52
72
28
35
21
36
104
32
119
83
57
92
119
121
54
77
40
111
109
12

660
22
1
13
6
43
14
13
17
12
13
17
12
8
8
5
18
13
13
20
40
12
15
12
13
29
32
36
11
28
16
33
10
10

390

32
15

25
35

2
14

14
46
12

162

17

16

3546
69
26
83
57
103
117
102
68
142
165
90
54
37
62
91
46
48
34
56
144
58
180
107
70
121
313
157
82
105
56
144
135
22

Sheohar
Sitamarhi
Siwan
Supaul
Vaishali

12
61
99
55
80

4
33
21
12
25

16
94
120
67
105

CHANDIGARH

10

155

174

CHHATTISGARH
Bastar
Bilaspur
Dantewada
Dhamtari
Durg
Janjgir-Champa
Jashpur
Kanker
Kawardha
Korba
Koriya
Mahasamund
Raigarh
Raipur
Rajnandgaon
Surguja

704
44
58
33
21
79
43
33
21
15
29
24
31
48
84
48
93

158
16
8
3
9
17
12
4
3
5
4
16
11
16
17
8
9

174

26

60

19

55
14

1036
60
92
36
30
156
55
37
24
20
52
40
42
64
156
70
102

DADRA & NAGAR HAVELI

11

DAMAN & DIU


Daman
Diu

15
11
4

16
11
5

DELHI

59

21

1390

1470

GOA
North Goa
South Goa

155
98
57

172
96
76

327
194
133

GUJARAT
Ahmadabad
Amreli
Anand
Banas Kantha
Bharuch
Bhavnagar
Dahod

1547
58
55
69
70
75
66
40

821
46
36
66
30
23
33
22

460

28

23
53

821
470

3649
574
91
163
100
121
152
62

Dangs
Gandhinagar
Jamnagar
Junagadh
Kachchh
Kheda
Mahesana
Narmada
Navsari
Panch Mahals
Patan
Porbandar
Rajkot
Sabar Kantha
Surat
Surendranagar
Vadodara
Valsad

6
42
73
70
86
73
55
19
85
58
41
15
88
82
112
48
120
41

3
18
29
43
46
38
46
6
21
29
36
7
60
38
31
30
25
59

30
50
35
38
30

36

26
98

13

161

190

9
90
152
148
170
141
101
25
142
87
77
48
246
120
304
91
335
100

HARYANA
Ambala
Bhiwani
Faridabad
Fatehabad
Gurgaon
Hisar
Jhajjar
Jind
Kaithal
Karnal
Kurukshetra
Mahendragarh
Panchkula
Panipat
Rewari
Rohtak
Sirsa
Sonipat
Yamunanagar

701
29
62
49
23
64
44
29
36
26
32
27
36
20
25
40
36
47
40
36

401
43
15
22
23
17
12
22
23
31
20
29
12
41
10
18
9
21
12
21

444
30
20
74

63
41

45

45

48
23
26
29

1546
102
97
145
46
144
97
51
59
57
97
56
48
61
80
58
93
91
78
86

HIMACHAL PRADESH
Bilaspur
Chamba
Hamirpur
Kangra
Kinnaur

657
36
49
48
142
18

125
7
4
8
10

782
43
53
56
152
18

Kulu
Lahul & Spiti
Mandi
Simla
Sirmaur
Solan
Una

39
8
78
89
37
69
44

10

21
35
12
9
9

49
8
99
124
49
78
53

JAMMU & KASHMIR


Anantnag
Badgam
Baramulla
Doda
Jammu
Kargil
Kathua
Kupwara
Ladakh
Poonch
Pulwama
Rajouri
Srinagar
Udhampur

580
55
38
87
40
79
9
43
38
15
15
39
38
38
46

79
13
4
19

11

8
1

5
5

1
12

169

78

91

828
68
42
106
40
168
9
51
39
15
20
44
38
130
58

JHARKHAND
Bokaro
Chatra
Deoghar
Dhanbad
Dumka
Garhwa
Giridih
Godda
Gumla
Hazaribag
Jamtara
Koderma
Latehar
Lohardagga
Pakur
Palamau
Paschimi Singhbhum
Purbi Singhbhum
Ranchi
Sahebganj

981
50
30
49
46
60
33
84
52
58
65
25
19
18
12
33
64
97
60
85
41

262
33
3
17
29
9
5
12
6
9
40
6
6
4
5
3
15
25
14
14
7

213
25

35

71
82

1456
108
33
66
110
69
38
96
58
67
105
31
25
22
17
36
79
122
145
181
48

KARNATAKA
Bagalkote
Bangalore Rural
Bangalore Urban
Belgaum
Bellary
Bidar
Bijapur
Chamarajanagar
Chikmagalur
Chitradurga
Dakshin Kannad
Davangere
Dharwad
Gadag
Gulbarga
Hassan
Haveri
Kodagu
Kolar
Koppal
Mandya
Mysore
Raichur
Shimoga
Tumkur
Udipi
Uttar Kannad

2192
67
65
50
128
83
67
73
36
109
83
115
68
54
37
102
114
59
89
128
45
92
85
40
79
111
126
87

1032
56
43
38
114
43
12
23
19
26
32
41
23
17
25
36
53
36
22
55
30
18
31
33
42
37
48
79

786

79
31
16
26

150
34
122
16
39

19
130
23
36
35
30

758

758

4768
123
108
846
321
157
95
122
55
135
115
306
125
193
78
177
167
95
111
183
75
129
246
96
157
183
204
166

KERALA
Alapuzha
Ernakulam
Idukki
Kannur
Kasaragod
Kollam
Kottayam
Kozhikode
Malappuram
Palakkad
Pathanamthitta
Thiruvananthapuram
Thrissur
Wayanad

351
17
27
23
30
24
13
26
15
21
37
3
15
86
14

2370
166
243
75
166
102
132
246
144
192
177
223
164
282
58

620
35
217

18

43

99

43

165

3341
218
487
98
214
126
188
272
258
213
257
226
344
368
72

LAKSHADWEEP

MADHYA PRADESH
Balaghat
Barwani
Betul
Bhind
Bhopal
Chhatarpur
Chhindwara
Damoh
Datia
Dewas
Dhar
Dindori
East Nimar
Guna
Gwalior
Harda
Hoshangabad
Indore
Jabalpur
Jhabua
Katni
Mandla
Mandsaur
Morena
Narsimhapur
Neemuch
Panna
Raisen
Rajgarh
Ratlam
Rewa
Sagar
Satna
Sehore
Seoni
Shahdol
Shajapur
Sheopur
Shivpuri
Sidhi
Tikamgarh
Ujjain
Umaria
Vidisha

1919
61
30
47
27
26
43
70
40
26
54
76
23
65
52
37
13
36
42
46
45
42
36
30
24
39
23
30
44
57
33
72
45
74
39
54
52
47
11
40
64
44
53
18
38

777
19
17
19
16
3
30
34
16
13
11
34
3
7
17
12
13
37
17
15
12
3
12
31
25
22
21
10
22
18
14
7
29
14
21
13
21
22
7
7
16
15
21
14
26

416

10

16

31
13
73

87

15

12

29
23
30
21

11

45

334

155

179

3446
80
47
66
53
184
73
104
56
39
81
110
26
103
82
122
26
73
238
148
57
60
48
61
61
61
44
40
66
75
76
102
104
109
60
67
73
69
18
58
80
59
119
32
64

West Nimar

51

21

72

MAHARASHTRA
Ahmadnagar
Akola
Amravati
Aurangabad
Bhandara
Bid
Buldhana
Chandrapur
Dhule
Gadchiroli
Gondia
Greater Bombay
Hingoli
Jalgaon
Jalna
Kolhapur
Latur
Nagpur
Nanded
Nandurbar
Nasik
Osmanabad
Parbhani
Pune
Raigad
Ratnagiri
Sangli
Satara
Sindhudurg
Solapur
Thane
Wardha
Washim
Yavatmal

2299
116
48
82
71
50
70
60
91
43
36
43

27
87
48
101
53
85
67
36
102
42
39
123
97
99
76
90
58
106
102
44
39
68

1092
61
22
34
15
22
22
43
34
14
8
3

11
55
10
42
26
27
33
14
44
29
20
90
52
34
54
62
22
63
60
17
15
34

900
29
32
33
73

24
22

12

41
17
87
19

30

87

13
39

55

55
199
12

15

2025

1459

166

325

75

6316
206
102
149
159
72
98
103
149
79
44
58
1459
38
183
75
230
98
278
130
50
233
71
72
577
149
133
185
152
80
224
436
73
54
117

MANIPUR
Bishenpur
Chandel
Churachandpur
Imphal
Senapati
Tamenglong
Thoubal

41
4
5
1
8
11
5
4

14
1

3
4
1

22

22

77
5
5
4
34
12
5
8

Ukhrul

MEGHALAYA
East Garo Hills
East Khasi Hills
Jaintia Hills
Ri Bhoi
South Garo Hills
West Garo Hills
West Khasi Hills

130
14
37
19
14
3
25
18

16
1
5
3

5
2

33

33

179
15
75
22
14
3
30
20

MIZORAM
Aizawl
Champhai
Kolasib
Lawngtlai
Lunglei
Mamit
Saiha
Serchhip

61
17
7
7
2
9
10
3
6

1
2

1
2

8
8

78
25
8
9
2
12
10
4
8

NAGALAND
Dimapur
Kohima
Mokokchung
Mon
Phek
Tuensang
Wokha
Zunheboto

37
4
6
5
2
6
5
4
5

33
12
10
4
1

2
3
1

70
16
16
9
3
6
7
7
6

ORISSA
Angul
Balangir
Baleshwar
Bargarh
Bhadrak
Boudh
Cuttack
Deogarh
Dhenkanal
Gajapati
Ganjam
Jagatsinghpur
Jajpur
Jharsuguda

1610
54
55
90
57
53
19
98
16
45
28
128
52
73
20

316
18
14
26
15
8
3
6
4
17
5
30
20
9
13

300

68

33

2226
72
69
116
72
61
22
172
20
62
33
191
72
82
33

Kalahandi
Kandhamal
Kendrapara
Keonjhar
Khurda
Koraput
Malkangiri
Mayurbhanj
Nawapara
Nawrangpur
Nayagarh
Puri
Rayagada
Sambalpur
Sonepur
Sundargarh

67
32
64
70
67
42
17
117
25
25
52
71
39
48
23
63

12
4
4
17
10
18
2
17
3
4

7
8
5
4
13

108

23

25

43

79
36
68
87
185
60
19
134
28
29
52
101
47
78
27
119

PONDICHERRY
Karaikal
Mahe
Pondicherry
Yanam

20
6

14

19
11
5
1
2

43

43

82
17
5
58
2

PUNJAB
Amritsar
Bathinda
Faridkot
Fatehgarh Sahib
Ferozpur
Gurdaspur
Hoshiarpur
Jalandhar
Kapurthala
Ludhiana
Mansa
Moga
Muktsar
Nawanshahr
Patiala
Rupnagar
Sangrur

1118
147
46
16
24
66
96
89
108
49
100
24
50
34
44
77
60
88

694
29
25
32
26
50
29
31
68
66
48
20
9
27
37
48
78
71

548
153
40

16
42
32
153

25

87

206

206

2566
329
111
48
50
132
167
152
329
115
354
44
84
61
81
212
138
159

RAJASTHAN
Ajmer
Alwar
Banswara

1874
62
111
74

739
32
24
12

472
62
29

229

3314
156
164
86

Baran
Barmer
Bharatpur
Bhilwara
Bikaner
Bundi
Chittaurgarh
Churu
Dausa
Dholpur
Dungarpur
Ganganagar
Hanumangarh
Jaipur
Jaisalmer
Jalor
Jhalawar
Jhunjhunu
Jodhpur
Karauli
Kota
Nagaur
Pali
Rajsamand
Sawai Madhopur
Sikar
Sirohi
Tonk
Udaipur

37
54
63
72
69
44
79
70
43
22
51
59
53
112
30
49
41
46
70
33
48
84
77
41
43
64
34
48
91

21
19
22
21
12
17
33
45
16
15
11
44
35
37
8
12
23
47
14
15
15
44
22
18
26
32
25
13
9

26
29
51

33

77

64

15

16

8
62

229

58
73
111
122
132
61
112
115
59
37
62
136
88
378
38
61
64
93
161
48
127
128
114
59
69
112
59
69
162

SIKKIM
East Sikkim
North Sikkim
South Sikkim
West Sikkim

36
13
6
9
8

12
12

48
25
6
9
8

TAMIL NADU
Ariyalur
Chennai
Coimbatore
Cuddalore
Dharmapuri
Dindigul
Erode
Kancheepuram
Kanyakumari

1779
29

93
75
97
73
90
64
29

1215
8

89
39
56
38
70
30
65

969

230
36

28
46
64
35

770

770

4733
37
770
412
150
153
139
206
158
129

Karur
Madurai
Nagapattinam
Namakkal
Nilgiris
Perambalur
Pudukkottai
Ramanathapuram
Salem
Sivaganga
Thanjavur
Theni
Thiruvallur
Thiruvarur
Tiruchirapalli
Tirunelvali
Tiruvannamalai
Toothukudi
Vellore
Villupuram
Virudhunagar

36
63
55
53
16
23
66
43
62
64
67
22
67
44
69
89
65
60
102
112
51

40
24
41
48
57
5
22
32
34
47
33
52
41
28
31
65
27
37
63
39
54

115

68

65

34

94
50
10
40
36

18

76
202
96
101
73
28
88
75
164
111
165
74
142
72
194
204
102
137
201
151
123

TRIPURA
Dhalai
North Tripura
South Tripura
West Tripura

120
16
23
39
42

29

9
6
14

29

29

178
16
32
45
85

UTTAR PRADESH
Agra
Aligarh
Allahabad
Ambedkar Nagar
Auraiya
Azamgarh
Baghpat
Bahraich
Ballia
Balrampur
Banda
Bara Banki
Bareilly
Basti
Bijnor
Budaun
Bulandshahr

4875
69
77
116
60
36
159
26
79
105
56
67
108
85
76
71
79
75

1345
27
20
16
14
15
22
22
9
35
14
16
24
24
12
64
31
43

1397
126
57
115

12

76

14
22

520

8137
222
154
247
74
51
181
48
100
140
70
83
132
185
88
135
124
140

Chandauli
Chitrakoot
Deoria
Etah
Etawah
Faizabad
Farrukhabad
Fatehpur
Firozabad
Gautam Buddha Nagar
Ghaziabad
Ghazipur
Gonda
Gorakhpur
Hamirpur
Hardoi
Hathras
Jalaun
Jaunpur
Jhansi
Jyotiba Phule Nagar
Kanauj
Kanpur Dehat
Kanpur Nagar
Kaushambi
Kheri
Kushi Nagar
Lalitpur
Lucknow
Maharajganj
Mahoba
Mainpuri
Mathura
Mau
Meerut
Mirzapur
Moradabad
Muzaffarnagar
Pilibhit
Pratapgarh
Rai Bareli
Rampur
Saharanpur
Sant Kabir Nagar
Sant Ravidas Nagar
Shahjahanpur

42
34
80
73
44
52
43
86
42
28
65
105
95
114
40
98
34
55
143
32
39
40
99
24
43
92
90
33
62
69
20
46
66
56
66
65
89
91
52
114
108
61
72
45
31
88

15
5
25
41
7
9
11
13
22
9
19
42
18
9
16
30
16
27
15
26
14
21
22
5
5
36
6
11
4
10
14
27
26
12
29
9
33
52
14
16
12
19
23
9
24
17

13
25
21
7
20
52
136

55

20

18
41
11

39
9
97
22
72
41
14

11
18
50

20

287

233

57
39
105
114
64
86
75
106
84
89
220
147
113
178
56
128
70
82
176
99
64
61
121
316
48
128
96
44
299
79
34
73
131
77
192
96
194
184
80
130
131
98
145
54
55
125

Shravasti
Sidharthanagar
Sitapur
Sonbhadra
Sultanpur
Unnao
Varanasi

50
77
120
44
126
86
62

3
5
23
22
16
16
7

18

12
133

53
82
161
66
142
114
202

UTTARANCHAL
Almora
Bageshwar
Chamoli
Champawat
Dehra Dun
Garhwal
Haridwar
Nainital
Pithoragarh
Rudraprayag
Tehri Garhwal
Udham Singh Nagar
Uttar Kashi

527
57
27
28
18
49
83
36
44
45
20
60
38
22

195
13

8
2
35
15
35
21
5

8
49
4

122

77

24
21

844
70
27
36
20
161
98
95
86
50
20
68
87
26

WEST BENGAL
Bankura
Barddhaman
Birbhum
Dakshin Dinajpur
Darjiling
Haora
Hugli
Jalpaiguri
Koch Bihar
Kolkata
Maldah
Medinipur
Murshidabad
Nadia
North 24 Parganas
Puruliya
South 24 Parganas
Uttar Dinajpur
ALL-INDIA

2273
143
213
135
52
43
101
152
84
79

120
395
148
117
159
90
182
60
32471

564
11
53
39
3
26
26
49
51
30

16
35
55
40
53
22
41
14
14716

594
12
104

8
41
95
52
1

8
50
15
23
164

12
9
10437

991

991

8571

4422
166
370
174
63
110
222
253
136
109
991
144
480
218
180
376
112
235
83
66195

Chapter - II

Research Methodology

OBJECTIVE OF THE STUDY:


The main purpose of the study of project into the various aspects of
financial management of co-operative bank with a particular emphasis on credit
management further, trend in credit management examined six years period.
METHODOLOGY

This study adopts the methodology of collecting data from both sources
primary and secondary. The primary sources of data for the study are collected
through personal interview with concerned finance executives.
The secondary sources of data for the study are annual reports and other
records furnished by co-operative bank.
TIME SPAN:
The time span of the study is for a period of 6 years 2010-2006.
LIMITATIONS OF THE STUDY:
The study has the following limitation.

The amounts used in the reports are taken from the annual reports,
published at the end of the respective years. The result does not reflect the day
to day transactions. It is also impossible to study the day-to-day transactions
particularly in cash management.

Chapter III
Company Profile

ICICI Bank is India's second-largest bank with total assets of about Rs. 2,513.89
bn (US$ 56.3 bn) at March 31, 2012 and profit after tax of Rs. 25.40 bn (US$ 569
mn) for the year ended March 31, 2013 (Rs. 20.05 bn (US$ 449 mn) for the year
ended March 31, 2014). ICICI Bank has a network of 741 branches (including 48
extension counters) and over 3300 ATMs in India and presence in 30
International locations. ICICI Bank offers a wide range of banking products and

financial services to corporate and retail customers through a variety of delivery


channels and through its specialized subsidiaries and affiliates in the areas of
investment banking, life and non-life insurance, venture capital and asset
management. ICICI Bank set up its international banking group in fiscal 2012 to
cater to the cross border needs of clients and leverage on its domestic banking
strengths to offer products internationally. ICICI Bank currently has subsidiaries in
the United Kingdom, Russia and Canada, branches in Singapore, Bahrain, Hong
Kong, Sri Lanka and Dubai International Finance Centre and representative
offices in the United States, United Arab Emirates, China, South Africa and
Bangladesh. Our UK subsidiary has established a branch in Belgium. ICICI Bank
is the most valuable bank in India in terms of market capitalization.
ICICI Bank's equity shares are listed in India on the Bombay Stock Exchange
and the National Stock Exchange of India Limited and its American Depositary
Receipts (ADRs) are listed on the New York Stock Exchange (NYSE).
ICICI Bank has formulated a Code of Business Conduct and Ethics for its
directors and employees.
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI
Bank was reduced to 46% through a public offering of shares in India in fiscal
2008, an equity offering in the form of ADRs listed on the NYSE in fiscal 2010,
ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation
in fiscal 2011, and secondary market sales by ICICI to institutional investors in
fiscal 2011 and fiscal 2012. ICICI was formed in 1955 at the initiative of the World

Bank, the Government of India and representatives of Indian industry. The


principal objective was to create a development financial institution for providing
medium-term and long-term project financing to Indian businesses. In the 1990s,
ICICI transformed its business from a development financial institution offering
only project finance to a diversified financial services group offering a wide
variety of products and services, both directly and through a number of
subsidiaries and affiliates like ICICI Bank. In 2009, ICICI become the first Indian
company and the first bank or financial institution from non-Japan Asia to be
listed on the NYSE.
After consideration of various corporate structuring alternatives in the context of
the emerging competitive scenario in the Indian banking industry, and the move
towards universal banking, the managements of ICICI and ICICI Bank formed the
view that the merger of ICICI with ICICI Bank would be the optimal strategic
alternative for both entities, and would create the optimal legal structure for the
ICICI group's universal banking strategy. The merger would enhance value for
ICICI shareholders through the merged entity's access to low-cost deposits,
greater opportunities for earning fee-based income and the ability to participate in
the payments system and provide transaction-banking services. The merger
would enhance value for ICICI Bank shareholders through a large capital base
and scale of operations, seamless access to ICICI's strong corporate
relationships built up over five decades, entry into new business segments,
higher market share in various business segments, particularly fee-based
services, and access to the vast talent pool of ICICI and its subsidiaries. In

October 2011, the Boards of Directors of ICICI and ICICI Bank approved the
merger of ICICI and two of its wholly-owned retail finance subsidiaries, ICICI
Personal Financial Services Limited and ICICI Capital Services Limited, with
ICICI Bank. The merger was approved by shareholders of ICICI and ICICI Bank
in January 2012, by the High Court of Gujarat at Ahmedabad in March 2012, and
by the High Court of Judicature at Mumbai and the Reserve Bank of India in April
2012. Consequent to the merger, the ICICI group's financing and banking
operations, both wholesale and retail, have been integrated in a single entity.
*Free float holding excludes all promoter holdings, strategic investments and
cross holdings among

public sector entities.

Case study 1 :
purpose
two willerslone
amount
80000
interest
23%
down payment
30000
period30months
30
PRINCIPLE= AMOUNT-DOWN PAYMENT
r/m
= 0.019166667
50000.00
EMI
PVIF

=P/PVIF
PVIF =
22.66
=
1-1/(1+r/m)^mn/r/m
EMI
=
2207.00

MONTH
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

EMI

INTREST

2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00
2207.00

958.33
934.40
910.01
885.15
859.81
833.99
807.68
780.86
753.52
725.67
697.27
668.34
638.85
608.79
578.16
546.94
515.12
482.69
449.64
415.96
381.63
346.65
310.99
274.65
237.61
199.87
161.40
122.19
82.23
41.51

PRINCIPEL
50000.00
1248.66
1272.60
1296.99
1321.85
1347.18
1373.00
1399.32
1426.14
1453.47
1481.33
1509.72
1538.66
1568.15
1598.21
1628.84
1660.06
1691.88
1724.30
1757.35
1791.04
1825.36
1860.35
1896.01
1932.35
1969.38
2007.13
2045.60
2084.81
2124.77
2165.49

BALANCE
50000.00
48751.34
47478.74
46181.75
44859.91
43512.73
42139.72
40740.40
39314.27
37860.79
36379.46
34869.74
33331.08
31762.93
30164.72
28535.88
26875.82
25183.94
23459.64
21702.29
19911.25
18085.89
16225.54
14329.53
12397.18
10427.80
8420.67
6375.07
4290.26
2165.49
0.00

Case study 2:
Purpose : Two wheeler loan
amount
:90000
intrest: 18%
down payment:60000
period30months
30
PRINCIPLE= AMOUNT-DOWN PAYMENT
r/m
= 0.015
90000-60000=30000
EMI

=P/PVIF
PVIF

24.02

PVIF

1-1/(1+r/m)^mn/r/m
EMI

1249.18

MONTH
EMI
INTREST
0
1
1249.18
450.00
2
1249.18
438.01
3
1249.18
425.84
4
1249.18
413.49
5
1249.18
400.96
6
1249.18
388.24
7
1249.18
375.32
8
1249.18
362.21
9
1249.18
348.91
10
1249.18
335.41
11
1249.18
321.70
12
1249.18
307.79
13
1249.18
293.67
14
1249.18
279.33
15
1249.18
264.79
16
1249.18
250.02
17
1249.18
235.03
18
1249.18
219.82
19
1249.18
204.38
20
1249.18
188.71
21
1249.18
172.80
22
1249.18
156.66
23
1249.18
140.27
24
1249.18
123.63
25
1249.18
106.75
26
1249.18
89.62
27
1249.18
72.22
28
1249.18
54.57
29
1249.18
36.65
30
1249.18
18.46
Case study :3
purpose
Education(M B A)
amonut
100000
intrest
9%
period30months
30
r/m
0.01
Ofter two years Principel Amount

PRINCIPEL
30000.00
799.18
811.16
823.33
835.68
848.22
860.94
873.85
886.96
900.27
913.77
927.48
941.39
955.51
969.84
984.39
999.16
1014.14
1029.35
1044.79
1060.47
1076.37
1092.52
1108.91
1125.54
1142.42
1159.56
1176.95
1194.61
1212.53
1230.71

BALANCE
30000.00
29200.82
28389.66
27566.33
26730.65
25882.43
25021.49
24147.64
23260.68
22360.41
21446.65
20519.17
19577.78
18622.27
17652.43
16668.04
15668.89
14654.74
13625.39
12580.60
11520.13
10443.75
9351.24
8242.33
7116.79
5974.36
4814.80
3637.85
2443.24
1230.71
0.00

Amount
First year intrest
Secound year
Total
=

Month
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

100000
9000
9810
118810

pvif

26.78

emi

4437.33

Emi

Intrest

4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33
4437.33

891.08
864.48
837.68
810.68
783.48
756.08
728.47
700.65
672.63
644.39
615.95
587.29
558.41
529.32
500.01
470.48
440.73
410.75
380.55
350.13
319.47
288.59
257.47
226.13
194.54
162.72
130.66
98.36
65.82
33.03

Principle
118810.00
3546.26
3572.86
3599.65
3626.65
3653.85
3681.25
3708.86
3736.68
3764.71
3792.94
3821.39
3850.05
3878.92
3908.02
3937.33
3966.86
3996.61
4026.58
4056.78
4087.21
4117.86
4148.74
4179.86
4211.21
4242.79
4274.61
4306.67
4338.97
4371.52
4404.30

Balance
118810
115263.74
111690.88
108091.23
104464.58
100810.73
97129.47
93420.61
89683.93
85919.22
82126.28
78304.90
74454.85
70575.92
66667.91
62730.58
58763.73
54767.12
50740.54
46683.76
42596.55
38478.69
34329.94
30150.08
25938.87
21696.08
17421.47
13114.79
8775.82
4404.30
0.00

Case study 4:
PURPOSE :FURNITURE SALES
AMOUNT :120100
INTREST : 25%
PERIOD :30 MONTHS
EMI = Principle/PVIF
PVIF = 1-1/(1+r/m)^mn/r/m
Amount
Interest
Period 30
r/m

MONTH
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

R/M = Interest %/12


120100.000
0.250
0.021
PVIF =

22.14

EMI

5419.58

EMI
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580
5419.580

INTREST PRINCIPEL BALANCE


120100.00
2500.00
2919.58
117080.42
2439.18
2980.40
114100.02
2377.08
3042.50
111057.52
2313.70
3105.88
107951.64
2248.99
3170.59
104781.05
2182.94
3236.64
101544.41
2115.51
3304.07
98240.34
2046.67
3372.91
94867.43
1976.40
3443.17
91424.26
1904.67
3514.91
87909.35
1831.44
3588.13
84321.22
1756.69
3662.89
80658.33
1680.38
3739.20
76919.13
1602.48
3817.10
73102.03
1522.96
3896.62
69205.41
1441.78
3977.80
65227.61
1358.91
4060.67
61166.94
1274.31
4145.27
57021.67
1187.95
4231.63
52790.05
1099.79
4319.79
48470.26
1009.80
4409.78
44060.48
917.93
4501.65
39558.82
824.14
4595.44
34963.39
728.40
4691.18
30272.21

25
26
27
28
29
30

5419.580
5419.580
5419.580
5419.580
5419.580
5419.580

630.67
530.90
429.05
325.09
218.95
110.60

4788.91
4888.68
4990.52
5094.49
5200.63
5308.98

25483.30
20594.62
15604.10
10509.61
5308.98
0.00

Case study 5
PURPOSE :SALE THE T. V. &DVD
AMOUNT :20100
INTREST : 16%
PERIOD :36 MONTHS
EMI = Principel/PVIF
PVIF = 1-1/(1+r/m)^mn/r/m
R/M = Intrest %/12
20100.000

Amount
Intrest 0.160
Period 36.000
r/m

MONTH
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

0.013
PVIF =

28.44

EMI

703.14

EMI
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141

INTREST PRINCIPEL BALANCE


20100.00
266.67
436.47
19563.53
260.85
442.29
19121.23
254.95
448.19
18673.04
248.97
454.17
18218.87
242.92
460.22
17758.65
236.78
466.36
17292.29
230.56
472.58
16819.72
224.26
478.88
16340.84
217.88
485.26
15855.58
211.41
491.73
15363.84
204.85
498.29
14865.55
198.21
504.93
14360.62
191.47
511.67
13848.96
184.65
518.49
13330.47
177.74
525.40
12805.07
170.73
532.41
12272.66

17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36

703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141
703.141

163.64
156.44
149.15
141.77
134.28
126.70
119.01
111.22
103.33
95.33
87.23
79.02
70.69
62.26
53.72
45.06
36.28
27.39
18.38
9.25

539.51
546.70
553.99
561.37
568.86
576.44
584.13
591.92
599.81
607.81
615.91
624.12
632.45
640.88
649.42
658.08
666.86
675.75
684.76
693.89

11733.15
11186.46
10632.47
10071.09
9502.23
8925.79
8341.66
7749.74
7149.93
6542.12
5926.21
5302.09
4669.64
4028.76
3379.34
2721.25
2054.40
1378.65
693.89
0.00

Case study 6:
PURPOSE :DAUGHTER MARAGE
AMOUNT :60000
INTREST :18%
NOMBER OF MONTHS :24
AMOUNT
60000.00
INTREST
0.18
NO.MONTHS
24.00
R/M

0.02
EMI=principle/PVIF
PVIF=1-(1/1+r/m)^mn
PVIF 20.03
EMI

MONTH
1.00
2.00

2995.45

EMI
0.00
2995.45
2995.45

INTEREST
0.00
900.00
868.57

PRINCIPLE
60000.00
2095.45
2126.88

BALANCE
60000.00
57904.55
55777.68

3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
15.00
16.00
17.00
18.00
19.00
20.00
21.00
22.00
23.00
24.00

2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45
2995.45

836.67
804.28
771.42
738.06
704.19
669.83
634.94
599.53
563.60
527.12
490.09
452.51
414.37
375.65
336.36
296.47
255.98
214.89
173.18
130.85
87.88
44.27

2158.78
2191.16
2224.03
2257.39
2291.25
2325.62
2360.50
2395.91
2431.85
2468.33
2505.35
2542.93
2581.08
2619.79
2659.09
2698.98
2739.46
2780.55
2822.26
2864.60
2907.56
2951.18

53618.90
51427.73
49203.70
46946.31
44655.06
42329.44
39968.94
37573.02
35141.17
32672.84
30167.49
27624.56
25043.48
22423.69
19764.59
17065.62
14326.16
11545.60
8723.34
5858.74
2951.18
0.00

Case study 7:
PURPOSE : PC PURCHESE
AMOUNT :80000
INTREST :25%
MONTHES :30
AMOUNT
INTREST
MONTHES
R/M

80000.00
0.25
30.00

INTREST/12 0.02
PVIF 22.14
EMI

MONTH
0
1
2
3

3613.05
EMI
3613.05
3613.05
3613.05

INTREST PRINCIPLE BALANCE


80000.00
1666.67
1946.39
78053.61
1626.12
1986.94
76066.68
1584.72
2028.33
74038.35

4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05
3613.05

1542.47
1499.33
1455.29
1410.34
1364.45
1317.60
1269.78
1220.96
1171.13
1120.25
1068.32
1015.31
961.19
905.94
849.54
791.97
733.20
673.20
611.95
549.43
485.60
420.45
353.93
286.04
216.72
145.97
73.74

2070.59
2113.72
2157.76
2202.71
2248.60
2295.45
2343.27
2392.09
2441.93
2492.80
2544.73
2597.75
2651.87
2707.11
2763.51
2821.09
2879.86
2939.86
3001.10
3063.62
3127.45
3192.61
3259.12
3327.02
3396.33
3467.09
3539.32

71967.76
69854.03
67696.27
65493.56
63244.96
60949.51
58606.23
56214.14
53772.22
51279.42
48734.69
46136.94
43485.08
40777.96
38014.45
35193.36
32313.51
29373.65
26372.55
23308.92
20181.47
16988.87
13729.75
10402.73
7006.40
3539.32
0.00

TERMS OF PAYMENT
Terms of payment vary widely in practice. At one end, if the seller has
financial sinews it may extend liberal credit to the buyer till it converts goods
bought into cash. At the other end, the buyer may pay cash in advance to the
seller and finance the entire trade cycle.
Cash Terms:

When goods are sold on cash terms, the payment is received either
before the goods are shipped (cash in advance) or when the goods are delivered
(cash on delivery).
Cash on delivery is often demanded by the seller if it is in a strong
bargaining position and / or the customer is perceived to be risky.
Open Account
Credit sales are generally on open account. This means that the seller
first ships the goods and then sends the invoice (bill). The credit terms (credit
period, cash discount for prompt payment, the period of discount, and so on) are
stated in the invoice which is acknowledged by the buyer. There is no formal
acknowledgement of indebtedness by the buyer.
Consignment
When goods are sent on consignment, they are merely shipped but not
sold to the consignee. The consignee acts as the agent of the seller (consignor).
The title of the goods is retained by the seller till they are sold by the consignee
to a third party.

Bill of exchange
The seller does not have strong evidence of the buyers obligation. So, a
more secure arrangement, usually in the form of a bill of exchange. When the
drawee accepts a bill of exchange it becomes a trade acceptance.
The bill of exchange performs three useful functions: (i) it serves as a
written evidence of a definite obligation. (ii) It helps in reducing the cost of
financing to some extent. (iii) It represents a negotiable instrument.
Letter of Credit
A letter of credit is issued by a bank on behalf of its customer (buyer) to
the seller. As per this document, the bank agrees to honor drafts drawn on it for

the supplies made to the customer if the seller fulfills the conditions laid down in
the L/C.
The L/C serves several useful functions: (i) It virtually eliminates credit
risk, if the bank has a good standing. (ii) It reduces uncertainty as the seller
knows the conditions that should be fulfilled to receive payment. (iii) It offers
safety to the buyer who wants to ensure that payment is made only in conformity
with the conditions of the L/C.
CREDIT POLICY VARIABLES
The important dimensions of a firms credit policy are:

Credit standards

Credit period

Cash discount

Collection effort

Credit Standards
A pivotal question in the credit policy of a firm is: What standard should
be applied in accepting or rejecting an account for credit granting. A firm has a
wide range of choice in this respect. At one end of the spectrum, it may decide
not to extend credit to any customer, however strong his credit rating may be. At
the other end, it may decide to grant credit to all customers irrespective of their
credit rating. Between these two extreme positions lie several possibilities, often
the more practical ones.
Credit Period
The credit period refers to the length of time customers are allowed to
pay for their purchases. It generally varies from 15 days to 60 days. When a firm
does not extend any credit, the credit period would obviously be zero. If a firm
allows 30 days, say, of credit, with no discount to induce early payments, its
credit terms are stated as net 30.

Lengthening of the credit period pushes sales up by inducing existing


customers to purchase more and attracting additional customers.
\Cash Discount
Firms generally offer cash discounts to induce customers to make prompt
payments. The percentage discount and the period during which it is available
are reflected in the credit terms
Liberalizing the cash discount policy may mean that the discount
percentage is increased and / or the discount period are lengthened. Such an
action tends to enhance sales (because the discount is regarded as price
reduction), reduce the average collection period (as customers pay promptly),
and increase the cost of discount.
Collection Effort
The collection programme of the firm, aimed at timely collection of
receivables, may consist of the following:

Monitoring the state of receivables

Dispatch of letters to customers whose due date is approaching

Electronic and telephonic advice to customers around the due date

Threat of legal action to overdue accounts

Legal action against overdue accounts


A rigorous collection programme tends to decrease sales, shorten the
average collection period, reduce bad debt percentage, and increase the
collection expense.
CREDIT EVALUATION
Proper assessment of credit risks is an important element of credit
management. It helps in establishing credit limits. In assessing credit risks, two
types of errors occur:
Type I error

a good customer is misclassified as a poor credit risk.

Type II error

a bad customer is misclassified as a good credit risk.

Type I error leads to loss of profit on sales to good customers who are
denied credit. Type II error results in bad-debt losses on credit sales made to
risky customers.
Three broad approaches are used for credit evaluation, viz. traditional
credit analysis, numerical credit scoring, and discriminate analysis.
Traditional Credit Analysis
The traditional approach to credit analysis calls for assessing a
prospective customer in terms of the five Cs of credit.
1.

Character: The willingness of the customer to honor his obligations. It


reflects integrity, a moral attribute that is considered very important by credit
managers.

2.

Capacity: The ability of the customer to meet credit obligations from the
operating cash flows.

3.

Capital: The financial reserves of the customer. If the customer has


difficulty in meeting his credit obligations from its operating cash flow, the focus
shifts to its capital.

4.

Collateral: The security offered by the customer in the form of pledged


assets.

5.

Conditions: The general economic conditions that affect the customer.


Sequential Credit Analysis
If the character of a customer is found to be weak, it may be pointless to
conduct the credit investigation further. Hence, sequential credit analysis is a
more efficient method. In this analysis, investigation is carried further if the
benefit of such analysis outweighs it cost. To illustrate, consider three stages of
credit analysis: review of the past payment record, detailed internal analysis, and
credit investigation by an external agency. The credit analyst proceeds from
stage one to stage two only if there is no past payment history and hence a
detailed internal analysis, and credit investigation by an external agency. The

credit analyst proceeds from stage one to stage two only if there is no past
payment history and hence a detailed internal credit analysis is warranted.
Likewise, the credit analyst goes from stage two to stage three only if internal
credit analysis suggests that the customer poses a medium risk and hence there
is a need for external credit analysis.
Numerical Credit Scoring
In traditional credit analysis, customers are assigned to various risk
classes somewhat judgmentally on the basis of the five Cs of credit. Credit
analysts may, however, want to use a more systematic numerical credit scoring
system. Such a system may involve the following steps:
1.

Identify factors relevant for credit evaluation.

2.

Assign weights to these factors that reflect their relative importance.

3.

Rate the customer on various factors, using a suitable rating scale.

4.

For each factor, multiply the factor rating with the factor weight to get the
factor score.

5.

Add all the factor scores to get the overall customer rating index.

6.

Based on the rating index classify the customer.

Discriminate Analysis
The credit index described above is somewhat ad hoc in nature and is
based on weights which are subjective in nature. The technique of discriminate
analysis may be employed to construct a better risk index.
Risk Classification Scheme
On the basis of information and analysis in the credit investigation
process, customers may be classified into various risk categories.

Customers with no risk of default

Customers with negligible risk of default (default rate less than 2 percent)

Customers with little risk of default (default rate between 2 percent and 5
percent)

Customers with some risk of default (default rate between 5 percent and
10 percent).

Customers with significant risk of default (default rate in excess of 10


percent)
Credit Granting Decision:
If credit worthiness of a customer has been assessed and if there is no
possibility of repeat order should the credit be offered or not. This situation may
be represented by rev-cost when credit is to be granted, other wise refuse credit.

Repeat Order
Once the customer pays for the first order, the probability that he would
default on the second order is less than the probability of his defaulting on the
first order.
Control of Accounts Receivables
Two methods have been commonly suggested for monitoring accounts
receivable: days sales outstanding and ageing schedule. To overcome the
weakness of the traditional methods, the collection matrix approach has been
suggested.
Collection Matrix
The average collection period and the ageing schedule have traditionally
been very popular measures for monitoring receivables. If sales are increasing,
the average collection period and the ageing schedule will differ from what they
would be if sales are constant. This holds even when the payment behaviour of
customers remains unchanged.
Credit Management in India

Credit Policy

Very few companies have attempted a systematic articulation and formalization


of their credit policy. Generally credit policies have emerged as unstated
conventions.

The underlying credit philosophy is sometimes stated in terms too general to


be of much relevance n guiding credit decisions. Wit the following statement
made by a company. Our credit policy seeks to maximize sales growth
consistent with an acceptable degree risk.

The practice of offering cash discount for prompt payment is not very common.
Credit Analysis

Prospective customers are generally required to furnish two or three trade


references. However, the follow up of these trade references is not very
common.

The financial statements of the prospective customers are, in general, not


analyzed in detail. Creditors often do not bother to look into mortgages.

Sometimes customers are requested to advice their bankers to provide credit


information.

However, the assessments provided by the banks are often

couched in very general terms and are not very useful.

The larger business firms usually classify their customers into several credit
categories. One large Pharmaceutical concern, for example, uses the following
classification :
A

Completely reliable customers

Highly reliable customers.

Slightly risky customers

Doubtful customers.

Control of Receivables

Monitoring and controlling of accounts receivable if often neither very through


nor systematic. Very few firms have well defined systems for monitoring and
controlling accounts receivables.

The measures commonly employed for judging whether accounts receivables


are in control are :

1.

Bad debt losses.

2.

Average collection period

3.

Ageing schedule

The important dimensions of a firms credit policy are: credit standards, credit
period, cash discount, and collection effort.

Lengthening of the credit period pushes up dales. This is, however,


accompanied by a larger investment in receivables and a higher incidence of bad
debt loss. Shortening of the credit period has the opposite effects.

Liberalizing the cash discount policy tends to enhance sales, reduce the
average collection period, and increases the cost of discount. Tightening the
cash discount policy has the opposite effects.

Three broad approaches are used for credit evaluation: traditional credit
analysis, numerical credit scoring, and discriminate analysis.

The traditional approach to credit analysis calls for assessing a prospective


customer in terms of the five Cs of credit, viz, character, capacity, capital,
collateral, and conditions.

Chapter - IV
Data Analysis and interpretation

FINANCIAL PERFORMANCE OF THE MAHESH BANK

YEAR WISE LOANS AND ADVANCES FOR THE YEAR 2010


Rs.(in
crores)
Priority Sectors
1. Small Scale Industries

% of total Loans
Advances

33.36

18.20
8.20

2. Professional, selfemployees,Artisans
Craftmans & Transport
Operators

8.50

4.64

3. Education

5.84

3.19

4. Wholesale & Retail Trade

36.26

17.79

5. Construction/Housing
/Repairs of Building

26.80

14.62

6. Consumption Loans

7. Loans to IT/Software
industry

1.98

1.08

70.52

38.48

8. Agriculture allied
advances
Non-Priority sectors

Total:

183.26

100.00

Note: During the year 2010, out of total loans and advances 38.48% were given
to Non-priority sector, 18.20% were given to small scale industries and 17.79%
were given to wholesale and retail trade.

YEAR WISE LOANS AND ADVANCES FOR THE YEAR 2011


Rs.(in
crores)

% of total Loans
Advances

Priority Sectors
1. Small Scale Industries

37.05

2. Professional, selfemployees,Artisans
Craftmans & Transport
operators

12.08

5.40

3. Education

8.01

3.58

4. Wholesale & Retail Trade

37.42

16.74

5. Construction/Housing
/Repairs of Building

35.16

15.73

6. Consumption Loans

7. Loans to IT/Software
industry

6.40

2.86

87.45
223.57

39.12
100.00

8. Agriculture allied
advances
Non-Priority sectors
Total:

16.57

Note: During the year 2011, out of total loans and advances 2.86% were given
as agriculture allied advances, 3.58% were given to Education,
were given to Non-Priority Sector.

YEAR WISE LOANS AND ADVANCES FOR THE YEAR 2012


Rs.(in
crores)

% of total Loans
Advances

Priority Sectors
1. Small Scale Industries

48.36

2. Professional, selfemployees,Artisans
Craftmans & Transport
operators

13.59

5.78

3. Education

8.61

3.67

4. Wholesale & Retail Trade

41.67

17.72

5. Construction/Housing
/Repairs of Building

37.41

15.90

6. Consumption Loans

7. Loans to IT/Software
industry

2.98

1.27

82.74
235.17

35.18
100.00

8. Agriculture allied
advances
Non-Priority sectors
Total:

20.48

39.12%

Note: During the year 2012, out of total loans and advances 35.18% were given
to Non-priority sector, 20.48% were given to small scale industries and 1.27% to
agriculture.

YEAR WISE LOANS AND ADVANCES FOR THE YEAR 2013


Rs.(in
crores)

% of total Loans
Advances

Priority Sectors
1. Small Scale Industries

29.57

2. Professional, selfemployees,Artisans
Craftmans & Transport
operators

10.69

4.54

3. Education

9.35

3.97

4. Wholesale & Retail Trade

52.64

22.36

5. Construction/Housing
/Repairs of Building

37.90

15.26

6. Consumption Loans

7. Loans to IT/Software
industry

6.94

2.95

90.24
235.33

38.35
100.00

8. Agriculture allied
advances
Non-Priority sectors
Total:

12.57

Note: During the year 2013, out of total loans and advances 22.36% were given
to Wholesale & Retail Trade, 15.26% were given to construction /Houses /
Repairs to building and 2.95% were given to agriculture.

YEAR WISE LOANS AND ADVANCES FOR THE YEAR 2014


Rs.(in
crores)

% of total Loans
Advances

Priority Sectors
1. Small Scale Industries

17.15

2. Professional, selfemployees,Artisans
Craftmans & Transport
operators

9.98

6.10

3. Education

5.71

3.49

4. Wholesale & Retail Trade

40.50

24.75

5. Construction/Housing
/Repairs of Building

31.81

19.44

6. Consumption Loans

7. Loans to IT/Software
industry

0.01

2.88

1.76

55.62
163.66

33.98
100.00

8. Agriculture allied
advances
Non-Priority sectors
Total:

10.48

Note: During the year 2014, out of total loans and advances 33.98% were given
to Non-priority sector, 24.75% were given to wholesale & retail trade, 19.44%

were given to repairs to building, 10.48% to small scale industries and 1.76% to
agriculture.

YEAR WISE PERCENTAGE CHANGE OF PERSONAL LOANS


Year

Total

2009

Professionals, Self- Non-priority


Employees,
Artisans
7.15
64.20

71.35

2010

8.50

70.52

79.02

10.74%

2011

12.08

87.45

99.53

25.95%

2012

13.59

82.74

96.33

-3.21%

2013

10.69

90.24

100.93

4.77%

2014

9.98

55.62

65.6

-35%

Year

% change

2010

10.74

2011

25.95

2012

-3.21

2013

4.77

2014

-35.00

Change

PERSONAL LOAN APPRAISAL

FORMULA USED TO CALCULATE EMI


Step - 1
PVAF

(1+r/m)

(Present value annuity factor)


Step - 2
EMI

Principal Value
PVAF

mn

r/m

Case study 1
Purpose - Daughter marriage
Amount - 50,000/EMI

- 2082

Period

- 30 months

(1+r/m)mn

EMI = Principle
PVAF
PVAF = 1 -

1-

(1+0.015)30=24.01

Interest - 18%
r/m
0.015
EMI =
Month
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

EMI
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082
2082

Principle
1332
1352
1372
1393
1414
1435
1456
1478
1500
1523
1546
1569
1593
1616
1641
1665
1690
1716
1741
1767
1794
1821
1848

5000
24.01

= 2082

Interest
756
730
710
689
668
647
626
604
582
559
536
513
489
466
441
417
392
366
341
315
288
261
234

Balance
50,000
48,668
47,316
45,944
44,551
43,137
41,702
40,246
38,768
37,268
35,745
34,199
32,630
31,037
29,421
27,780
26,115
24,425
22,709
20,968
19,201
17,407
15,586
13,738

24
2082
25
2082
26
2082
27
2082
28
2082
29
2082
30
2082
Case Study 2
Purpose - Children education
Amount - 30,000/(1+r/m)mn
(1+0.015)35
EMI - 1111/PVAF
0.015

206
180
149
120
91
61
29

EMI 1 -

11,862
9,960
8,027
6,065
4,074
2,053
1 -

r/m

= 27

Period - 35 months
Interest - 18%
Month
EMI
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

1876
1902
1933
1962
1991
2021
2053

1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111
1111

EMI = Principle
30,000 = 1111
PVAI
27
Principle
Interest
Balance
30,000
661
450
29,339
671
440
28,668
681
430
27,987
691
420
27,296
702
409
26,594
712
399
25,882
723
388
25,159
734
377
24,425
745
366
23,680
756
355
22,924
767
344
22,157
779
332
21,378
790
321
20,588
802
309
19,786
814
297
18,972
826
285
18,146
839
272
17,307
851
260
16,456
864
247
15,592
877
234
14,715
890
221
13,825
904
207
12,921
917
194
12,004
931
180
11,073
945
166
10,128
959
152
9,169
973
138
8,196

28
29
30
31
32
33
34
35

1111
1111
1111
1111
1111
1111
1111
975

988
1003
1018
1033
1048
1064
1080
961

123
108
93
78
62
47
31
14

7,208
6,205
5,187
4,154
3,105
2,041
961
-

Case Study 3
Purpose - Development

EMI - Principle

of Business

PVAF

Amount - 25000/PVAF = 1 - 1
1EMI
(1+r/m)mn
(1+0.05)18 0.235=15.66
Period
18months
0.015
0.015
Interest - 18%
EMI = 25000 = 1596
15.66
Month

EMI

Principle

Interest

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

1596
1596
1596
1596
1596
1596
1596
1596
1596
1596
1596
1596
1596
1596
1596
1596
1596
1579

1221
1239
1258
1277
1296
1315
1335
1355
1375
1396
1417
1438
1460
1482
1504
1527
1549
1556

375
357
338
319
300
281
261
241
221
200
179
158
136
114
92
69
47
23

1
r/m

Balance
25,000
23,779
22,540
21,282
20,005
18,709
17,394
16,059
14,704
13,329
11,933
10,516
9,078
7,618
6,136
4,632
3,105
1,556
-

Case Study 4
Purpose - Domestic EMI = Principle
Amount - 25,000
PVAF
EMI
- 1246
PVAF = 1 Period - 24 months
Interest - 18%
= 20.06

1 -

(1+r/m)mn

(1+0.015)24
r/m

EMI = 25,000 = 1246


20.06
Month
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20

EMI
1246
1246
1246
1246
1246
1246
1246
1246
1246
1246
1246
1246
1246
1246
1246
1246
1246
1246
1246
1246

Principle
871
884
897
911
924
938
952
967
981
996
1011
1026
1041
1057
1073
1089
1105
1122
1139
1156

Interest
375
362
349
335
322
308
294
279
265
250
235
220
205
189
173
157
141
124
107
90

Balance
25,000
24,129
23,245
22,348
21,437
20,513
19,575
18,623
17,656
16,675
15,679
14,668
13,642
12,601
11,544
10,471
9,382
8,277
7,155
6,016
4,860

0.015

21
22
23
24
-

1246
1246
1246
1246
-

1173
1191
1209
1227
-

73
55
37
19
-

3,687
2,496
1,287
60
-

Case Study 5
Purpose - Medical
Amount - 20,000
Period -24months

EMI - Principal
PVAF
PVAF = 11

1 -

(1+r/m)mn

EMI
- 1000
Interest - 18%

1
(+0.015)24 =
r/m

0.015
EMI = 20,000 = 1000
20.01
Month
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

EMI
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000
1000

Principle
700
710
721
732
743
754
765
777
789
800
812
825
837
849
862
875
888
902

Interest
300
290
279
268
257
246
235
223
211
200
188
175
163
151
138
125
112
98

Balance
20,000
19,300
18,590
17,869
17,137
16,394
15,640
14,875
14,098
13,309
12,509
11,697
10,872
10,035
9,186
8,324
7,449
6,561
5,659

19
20
21
22
23
24

1000
1000
1000
1000
1000
957

915
929
943
957
972
943

85
71
57
43
28
14

4,744
3,815
2,872
1,915
943
-

Case Study 6
Purpose - Daughters

EMI - Principle

Education
Amount - 25,000
EMI - 1220
(1+0.013)24 0.266
Period - 24 months
0.013
Rate - 16%

PVAF
PVAF = 1 -

Month
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

EMI
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220
1220

1-

1
(1+r/m)rm

r/m
EMI =

25000 = 1220
20.48
Principle
Interest
887
333
899
321
911
309
885
335
935
285
948
272
960
260
973
247
986
234
999
221
1012
208
1026
194
1039
181
1053
167
1067
153
1081
139
1089
124
1110
110
1125
95
1140
80
1155
65
1171
49

0.013
= 20.48
Balance
25,000
24,113
23,214
22,303
21,418
20,483
19,535
18,575
17,602
16,616
15,617
14,605
13,579
12,540
11,487
10,420
9,339
8,243
7133
6,008
4,868
3,713
2,542

23
24

1220
1374

186
1356

34
18

1,356
-

Case Study 7
Purpose - Domestic
Amount - 36,000
Instalment -

EMI - Principal
PVAF
PVAI = 1 1

Period - 35 mont
(1+0.013)35 = 0.363 =27.95
Interest - 16%
0.013

1-

(1+r/m) nm
r/m

0.013

EMI = 36,000 = 1288


27.95
Month
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

EMI
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288

Principle
809
820
831
843
853
864
876
888
902
912
924
936
948
961
974
987
1000

Interest
479
468
457
446
435
424
412
400
386
376
364
352
340
327
314
301
288

Balance
36,000
35,191
34,371
33,540
32,698
31,845
30,981
30,105
29,217
28,315
27,403
26,479
25,543
24,595
23,634
22,660
21,673
20,673

18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35

1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1288
1510

1013
1027
1040
1054
1068
1082
1097
1111
1126
1141
1156
1172
1187
1203
1219
1235
1252
1490

279
261
248
234
220
206
191
177
162
147
132
116
101
85
69
53
36
20

19,660
18,633
17,893
16,539
15,471
14,389
13,292
12,181
11,055
9,914
8,758
7,586
6,399
5,196
3,977
2,742
1,490

Case Study 8
Purpose - Children education
EMI =
P
Amount
40,000
EMI
- 1438
PVAF = 1 -

PVAF
1

Period - 35 months
Rate

(1+0.0133) 35 = 0.369 = 27.81


16%
0.0133
0.0133
EMI = 40,000 = 1438
27.8%

Month
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22

Principle
906
918
930
943
955
968
981
994
1007
1020
1034
1048
1062
1076
1090
1105
1119
1134
1149
1165
1180
1196

EMI
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438

Interest
532
520
508
495
483
470
457
444
431
418
404
390
376
362
378
333
319
304
289
273
258
242

Balance
40,000
39,094
38,176
37,246
36,303
35,348
34,380
33,399
32,405
31,398
30,378
29,344
28,296
27,234
26,158
25,068
23,963
22,844
21,710
20,561
19,396
18,216
17,020

23
24
25
26
27
28
29
30
31
32
33
34
35

1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1438
1385

1212
1228
1244
1261
1277
1294
1312
1329
1347
1365
1383
1401
1367

226
210
194
177
161
144
126
109
91
73
55
37
18

15,808
14,580
13,336
12,075
10,798
9,504
8,192
6,863
5,516
4,151
2,768
1,367
-

Case Study 9
Purpose - Business Development
EMI - Principle
Amount - 20,000
PVAF
Instalment - 813
PVAF = 1 1
Period - 30 months
0.327 = 24.59
Rate - 16%
0.0133
EMI - 20,000
24.59 = 813
Month
EMI
Principle
Interest
0
1
813
547
266
2
813
554
259
3
813
562
251
4
813
569
244
5
813
577
236
6
813
584
229
7
813
592
221
8
813
650
213
9
813
608
205
10
813
616
197
11
813
624
189
12
813
633
180
13
813
641
172
14
813
650
163
15
813
658
155
16
813
667
146
17
813
676
137
18
813
685
128
19
813
694
119
20
813
703
110
21
813
712
101
22
813
722
91
23
813
732
81
24
813
741
72
25
813
751
62
26
813
761
52
27
813
771
42

(1+0.0133)30=
0.0133

Balance
20,000
19,453
18,899
18,337
17,768
17,191
16,607
16,015
15,415
14,807
14,191
13,567
12,934
12,294
11,643
10,985
1,318
9,642
8,957
8,263
7,560
6,848
6,126
5,394
4,653
3,902
3,141
2,370

28
813
29
813
30
808
Case Study 10
Purpose - Purchase of

781
792
797
EMI -

32
21
11

1,589
797
-

colour T.V.& DVD


PVAF
Amount - 15000/PVAF = 11
0.211 = 15.89
Instalment - 944
(1+0.0133)18
0.0133
Period - 18 months
0.0133
Rate
- 16%
EMI = 1500/15.19 = 944
Month
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18

EMI
944
944
944
944
944
944
944
944
944
944
944
944
944
944
944
944
944
916

Principle
744
754
764
775
785
795
806
817
827
838
850
861
872
884
896
908
920
904

Interest
200
190
180
169
159
149
138
127
117
106
94
83
72
60
48
36
24
12

Balance
15,000
14,256
13,502
12,738
11,963
11,178
10,383
9,577
8,760
7,933
7,095
6,245
5,384
4,512
3,628
2,732
1,824
904
-

Case Study 11
Purpose - House Repair
Amount
Instalment -

EMI = P
50,000
PVAF = 1 -

PVAF
1

Period
0.369 = 27.81
Rate - 16%

Month
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35

EMI
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1798
1718

35

(1+0.0133)35

months

EMI = 50,000/27.81=1798

Principle
1133
1148
1164
1179
1194
1210
1226
1243
1259
1276
1293
1310
1328
1345
1363
1381
1400
1418
1437
1456
1426
1495
1515
1535
1556
1576
1597
1619
1640
1662
1684
1706
1729
1752
1695

Interest
665
650
635
619
604
588
572
555
539
522
505
488
470
453
435
417
398
380
361
342
322
303
283
263
242
222
201
179
158
136
114
92
69
46
23

0.0133

Balance
50,000
48,867
47,719
46,555
45,376
44,182
42,972
41,746
40,503
39,244
37,968
36,675
35,365
34,037
32,692
31,329
29,948
28,548
27,130
25,693
24,237
22,761
21,266
19,781
18,216
16,660
15,084
13,487
11868
10,228
8,566
6,882
5,176
3,447
1,695
-

Chapter V
Conclusions

Suggestions
&
Bibliography

CONCLUSION
In this study I found that there is a gradual change in the attitude of the bank in
lending personal loans. When comparing with year 2009 there was an increase
in 10.94% in personal loan lending in year 2010 and in 2011 there was an
increase of 25.95%, compared to year 2010.

During the period 2012, there was a negative increase in personal loan lending
i.e., -3.21. In 2013, again there was a surge for personal loan lending by 4.77%.

During 2014 there was an abate in lending by negative 35%.

With this analysis I conclude that the bank is taking corrective measures in its
policy of personal loan lending. Personal loan lending is of high risk, because of
its unsecured nature. Banks lend personal loans without security, guarantee, and
in speed, to attract the customers.

Recovering money lent in the form of personal loans to the customers is a


Herculean task for banks. So the banks should be very conservative in lending
personal loans.

Suggestions

1. Resistance from bank official to reveal data related to loan appraisal system.
2. All the data used are of secondary nature.
3. Dependence on published data of various organizations

Calculation of EMIs in the bank is through computer, the EMI calculated in this
project is by using calculator, there may be some variance in actual EMI of the
bank and calculated EMI.

B I B LO G RAPH Y
1.

FINANCIAL INSTITUTION AND MARKET

L.M. BHOLE

2.

FINANCIAL SERVICES

M.Y. KHAN

3.

BANKING THEORY AND LAW AND PRACTICE


S.N.MAHESHWARI & R.R. PAUL

4.

IBA BULLETINS

BANKING JOURNALS
PUBLISHED BY
INDIAN BANKS
ASSOCIATION

5.

BANKS CIRCULARS

CIRCULARS BY SBI

6.

WEBSITE WWW.MYSOREBANK.COM

You might also like