Professional Documents
Culture Documents
Chapter
II
Introduction
Chapter
Research Methodology
Chapter
III
Company Profile
Chapter
IV
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.
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)
ii)
iii)
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,
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)
iv)
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:
1.
FOREIGN BANKS
CO-OPERATIVE BANKS
a)
b)
c)
d)
e)
f)
Receiving deposits from and advancing loans to the public against eligible
securities.
b)
c)
d)
e)
f)
by the government. In India, nationalized banks and regional rural banks come
under this category.
Examples: Union Bank of India, Canara Bank etc.
IV
FOREIGN BANKS: These banks are foreign in origin and have their head
offices in the country of its origin.
a)
b)
c)
They help in selling or even underwrite the debentures and shares of the
industrial firms.
d)
RETAIL BANKING
Retail banking is a combination of product development and selling
strategies, essentially focused on personal banking segment.
In the banks
PRICING
PROMOTION
RETAIL BANKING
It focuses on individual customers
COMMERCIAL BANKING
It focuses on business,
Institute, Corporate
has
wide
product
differences,
customised loans,
with features to
suit the particular
borrower
or
transaction
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:
funds. Economic logic that governs commercial banking does not matter much in
retail banking.
EXTENSIVE
PARTICIPATION:
Retail
banking
allows
wider
1.
Product Orientation
Selling orientation
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
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.
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:
For
SELLING TO INDIVIDUAL:
Individuals can be drawn from the banks existing client base, which in itself is
large and sustaining.
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
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.
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
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:
3.
Tertiary Sector: It comprises of lending to trade both retail trade and small
business activities,
On set of these
purview of non-priority sector where banks can fix effective interest rates and
also identify broad base.
of money lenders.
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.
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.
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.
: M/s
1.
: Rs.
2.
Lakhs.
3.
4.
Moratorium
5.
Method of Repayment
6.
Repayment :
Security
a)
b)
8.
Interest
Boards decision.
9.
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)
b)
c)
Undertake
guarantees
obligation
on
behalf
of
any
other
company/firm/units etc.
d)
12.
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 will place with the bank all its banking business including foreign
exchange, if any, and deposits.
14.
15.
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.
19.
Any change in the constitution of the unit shall have the prior written
approval of the bank.
20.
21.
22.
23.
within one week from the date of notice from the bank.
24.
25.
if the account gets overdrawn due to such debit the same will be
regularised within 7 date from the date of debit.
26.
27.
28.
29.
Banks board shall be displayed at all such places where the assets
financed by the bank are installed/places.
30.
31.
32.
33.
34.
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.
b)
37.
M/s
1.
2.
Interest
Rs.
Lakhs
Boards decision.
3.
Security :
a) Pledge of stocks
b) The securities offered to working capital limits shall also
be extended.
4.
5.
Margin
: 35%
6.
7.
Inspection
Insurance
10.
Others :
a)
b)
c)
11.
All other terms and conditions mentioned in open cash credit shall be
applicable.
(Rupees)
With an interchangeability of Rs.
2.
3.
Margin
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.
6.
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.
10.
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
BNP Paribas
Citibank N.A.
Commerzbank A.G.
Credit Lyonnais
Sonali Bank
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
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
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
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
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
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
77
123
78
148
17
34
19
16
32
38
22
12
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
49
110
NON-SCHEDULED
COMMERCIAL 3
BANKS
Coastal Local Area Bank Ltd.
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
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
11
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
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
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
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
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
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
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
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
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.
Type II error
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.
2.
Capacity: The ability of the customer to meet credit obligations from the
operating cash flows.
3.
4.
5.
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.
2.
3.
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.
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 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).
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
The practice of offering cash discount for prompt payment is not very common.
Credit Analysis
The larger business firms usually classify their customers into several credit
categories. One large Pharmaceutical concern, for example, uses the following
classification :
A
Doubtful customers.
Control of Receivables
1.
2.
3.
Ageing schedule
The important dimensions of a firms credit policy are: credit standards, credit
period, cash discount, and collection effort.
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.
Chapter - IV
Data Analysis and interpretation
% 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
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.
% 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
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.
% 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
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.
% 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
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.
% 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
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.
Total
2009
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
(1+r/m)
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
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
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
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
-
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%.
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.
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.
L.M. BHOLE
2.
FINANCIAL SERVICES
M.Y. KHAN
3.
4.
IBA BULLETINS
BANKING JOURNALS
PUBLISHED BY
INDIAN BANKS
ASSOCIATION
5.
BANKS CIRCULARS
CIRCULARS BY SBI
6.
WEBSITE WWW.MYSOREBANK.COM