Professional Documents
Culture Documents
A Study
Chapter :1
INTRODUCTION OF
THE origination
Name of Bank:
V.I.M.(MBA)Pethnaka.
Page 1
On Loan Analysis
A Study
Name of Bank
Head Office Address
Pin code
Date of Registration
Date of RBI
Area of Operation
No. Of Branches
Members
Regular Member
Nominal Member
Paid up Share Capital
Total Reserve fund
Deposit
Loan
Investment
Percentage of NPA
Over Dues
Total Staff
Net profit/loss
Dividend
Class of audit
V.I.M.(MBA)Pethnaka.
Page 2
On Loan Analysis
A Study
Services
The bank need of the small farmers large and small scales industries
self employees in services providing loans for improving the standard of living for
V.I.M.(MBA)Pethnaka.
Page 3
On Loan Analysis
A Study
creating self employment opportunities and increasing the earning potential of the
rural people.
1)
2)
3)
4)
5)
6)
7)
8)
Management
It has been decided from the inspection that the management body of
the bank will work towards the betterment of the society therefore there must be
unanimous decision, which has been emphasized.
The head office of the bank at palus co-ordinates all branches, the
bank how has a vision and hope to grow on the strength of the management and its
employees.
Founder
:- Shri Dnyandev Vithoba Patil
Under Guidance :- Shri Vasantrao Pandurang Pudale.
Objectives of Bank
A) Main objectives:1) To encourage thrift, self-help and co-operation among members.
2) To accept deposit of money from the public repayable on demand or
otherwise and withdrawal by cheque, draft, order on otherwise for the
3)
4)
5)
6)
7)
Page 4
On Loan Analysis
A Study
The bank provides money for medical treatment for poor needy
people and especially for shareholder and their relative through
Member well-fare fund.
2. SportsThe bank know the importance of fitness in the life for this purpose
of the bank sponsor cricket, wrestling matches etc. for fitness of young
generation and also encourager them to arrange these type of matches.
The bank also makes arrangement stage show for kids to develop their
skills through celebrating Ganesh Uthsav.
3. Social Liability1) The bank knows his social liabilities very well, so that in
recently in flood affected area the bank provided food water
and grass for animal in Aamanapur, Burli and Pundi.
2) The banks also arrange blood donation camp.
Scheme of The Bank:
A) Saving Account:1) Rate of Return
2) Limit of Investment
Minimum Rs.100
Minimum in order to anvil cheque book facility of Rs.500
No maximum limit
3) Liquidity-
Page 5
On Loan Analysis
A Study
ii) Amount can be deposited withdrawn limit three times in weekly one time
in par day.
iii) Interest is paid only on minimum balance between 1st and 10th of each
Month.
B) Fixed Deposits:1) Rate of ReturnUp to 15 Days
:- Nil
30 to 80 Days
:- 5.5%
91 to 180 Days
:- 5.5%
:- 6.5%
Over 1 year
:- 7%
:- 7.5%
2) Liquidity
Amount deposited can be withdrawn at any time by encasing the
deposit before due date. In this case interest will only be paid at 1 % less than the rate
applicable for the period for which the deposit is actually held.
3) Tax Consideration
4) Other Consideration
V.I.M.(MBA)Pethnaka.
Page 6
On Loan Analysis
A Study
problem.
Loans can be taken against security of receipts at confessional rate of interest.
Where money is available for more than 30 days deposits made will earn
office etc.
Where funds are not required immediately or at short notice other deposits
C) Recurring deposits:
1) Rate of return
year,1 day to 2 years = 7%
3year, 1 day to 2 years = 7.5%
1
Liquidity :Amount deposits can be withdrawn at any time by closing the account
prematurely. In this by closing the account prematurely in this case
interest will only be paid at 9% less than the rate application to the
period for which the deposits in actually held.
D) Certificate of Deposit:
1) 30 days to 180 days = 5.5%
180 days to 1 year = 6.5%
1 year 1day to 3 year = 7%
3year 1 day to above = No limit.
V.I.M.(MBA)Pethnaka.
Page 7
On Loan Analysis
A Study
5) Other Consideration
nationalized/scheduled bank.
No loan can be taken on deposit.
Deposit can not encase before the due date.
Companies / trust etc. With large cash resources
V.I.M.(MBA)Pethnaka.
Page 8
On Loan Analysis
A Study
Board Of Directors:Board members of the bank:Palus Sahakari Bank has a well organized board of members of govern bank.
Sr. no.
DESIGNATION
1.
Chairman
2.
Vice-Chairman
3.
Director
4.
Director
5.
Director
6.
Director
7.
Director
8.
Director
9.
Director
10.
Director
11.
Director
12.
Director
13.
Director
V.I.M.(MBA)Pethnaka.
Page 9
On Loan Analysis
A Study
14.
Director
15.
Director
16.
Co.Op. Director
17.
Co.Op. Director
18.
Banking Director
19.
Banking Director
20.
Staff- Representative
21.
Staff- Representative
22.
Manager
Amount
567.38
1401.42
15587.86
161.01
291.24
1421.41
20.13
10.00
00.00
4.82
Assets
Cash in hand
Bank Accounts
Investments
Loans & Advances
Interest receivable on investment
Interest receivable on loans
Fixed assets
Land & Buildings
Other Assets
Other Assets/ Receivables
Bills Receivables
Branch adjustment
Current Year Loss
Amount
245.03
561.08
5796.58
11054.51
17.48
1341.16
TOTAL
19450.27
TOTAL
19450.43
V.I.M.(MBA)Pethnaka.
Page 10
50.44
137.91
9.69
20.13
24.46
191.96
On Loan Analysis
A Study
1.5 MANPOWER:-
Board of Directors
Managing Director
General Manager
Manager
Assi. Manager
(Accounts)
Assi. Manager
(Loan)
Assi. Manager
(Audit)
1. Senior Officer-1
3
1. Junior Officer-1
1. Senior Officer-
2. Junior Officer-1
2. Clerk 8
2. Junior Officer-1
V.I.M.(MBA)Pethnaka.
Page 11
On Loan Analysis
3. Clerk - 8
3. Peon 4
A Study
3. H/W Engg -1
4. Peon 4
4. Legal Adviser
5. Clerk 9
6. Peon - 3
1.6 ORGANIZATION CHART:Palus Sahakari Bank Limited, Palus given by following chart
Managing Director
Dy. Manager
Dy. Manager
(Administration)
Dy. Manager
Dy. Manager
Dy. Manager
Dy. Manager
Dy. Manager
(Loan)
(Other society
loan)
(Audit/
Inspection)
(Direct
Financing)
(Planning &
Development)
V.I.M.(MBA)Pethnaka.
Page 12
On Loan Analysis
Chapter: 2
THEROTICAL
BACKGROUND
V.I.M.(MBA)Pethnaka.
Page 13
A Study
On Loan Analysis
A Study
V.I.M.(MBA)Pethnaka.
Page 14
On Loan Analysis
A Study
- Primary co-operative credit societies at base level (At village level) even if cooperative banks organizational rules can vary according to their respective National
legislations.
2.2 co-operative banks share common features as follows:
2.2.1 Customer-owned entities:
In a co-operative bank, the needs of the customers meet the
Needs of the owners, as co-operative bank members are both. As a consequence, the
first aim of a co-operative bank is not to maximize profit but to provide the best
possible products and services to its members. Some co-operative banks only operate
with their members but most of them also admit non-member clients to benefit from
their banking and financial services.
2.2.2 Democratic member control:
Co-operative banks are owned and controlled by their members, who democratically
elect the board of directors. Members usually have equal voting rights, according to
the co-operative principle of one person, one vote.
2.2.3 Profit allocation:
In a co-operative bank, a significant part of the yearly profit, benefits or surplus is
usually allocated to constitute reserves. A part of this profit can also be distributed to
the co-operative members, with legal or statutory limitations in most cases. Profit is
usually allocated to members either through a patronage dividend, which isrelated to
the use of the co-operatives products and services by each member, or through an
interest or a dividend, which is related to the number of shares subscribed by each
member.
2.3 History of co-operative banks in India
For the co-operative banks in India, co-operatives are organized groups of people and
jointly managed and democratically controlled enterprises. They exist to serve their
members and depositors and produce better benefits and services for them..
V.I.M.(MBA)Pethnaka.
Page 15
On Loan Analysis
A Study
The real development of co-operative banks took place only after the
recommendations of All India Rural Credit Survey Committee (AIRCSC), which
were made with the view to fasten the growth of co-operative banks.
The first study of Urban Co-operative Banks was taken up by RBI in the year 195859. The Report published in 1961 acknowledged the widespread and financially sound
framework of urban co-operative banks; emphasized the need to establish primary
urban co-operative banks in new centers and suggested that State Governments lend
active support to their development. In 1963, Verde Committee recommended that
such banks should be organized at all Urban Centers with a population of 1 Lakh or
more and not by any single community or caste. The committee introduced the
concept of minimum capital requirement and the criteria of population for defining
the urban centre where UCBs were incorporated.
2.4 RBI Policies for co-operative banks]
The RBI appointed a high power committee in May 1999 under the chairmanship of
Shri. K. Madhava Rao, Ex-Chief Secretary, Government of Andhra Pradesh to review
the performance of Urban Co-operative Banks (UCBs) and to suggest necessary
measures to strengthen this sector. With reference to the terms given to the committee,
the committee identified five broad objectives:
To preserve the co-operative character of UCBs
To protect the depositors interest
To reduce financial risk
To put in place strong regulatory norms at the entry level to sustain the Operational
efficiency of UCBs in a competitive environment and evolve Measures to strengthen
the existing UCB structure particularly in the context of Ever increasing number of
weak banks
To align urban banking sector with the other segments of banking sector in the
Context of application or prudential norms in to and removing the irritants of dual
Control regime
V.I.M.(MBA)Pethnaka.
Page 16
On Loan Analysis
A Study
RBI has extended the Off-Site Surveillance System (OSS) to all non-scheduled
Urban co-operative banks (UCBs) having deposit size of Rs. 100 Cores and Above.
2.5 Types of Co-operative Banks
The co-operative banks are small-sized units which operate both in urban and nonurban centers. They finance small borrowers in industrial and trade sectors besides
professional and salary classes. Regulated by the Reserve Bank of India, they are
governed by the banking Regulations Act 1949 and banking laws (co-operative
societies) act, 1965.
Page 17
On Loan Analysis
A Study
state co-operative banks lend money to central co-operative banks and primary
societies and not directly to the farmers.
2.5.4 Land development banks
The Land development banks are organized in 3 tiers namely; state, central, and
primary level and they meet the long term credit requirements of the farmers for
developmental purposes. The state land development banks oversee, the primary land
development banks situated in the districts and tehsil areas in the state. They are
governed both by the state government and Reserve Bank of India. Recently, the
supervision of land development banks has been assumed by National Bank for
Agriculture and Rural development (NABARD). The sources of funds for these banks
are the debentures subscribed by both central and state government. These banks do
not accept deposits from the general public.
2.5.5 Urban Co-operative Banks
The term Urban Co-operative Banks (UCBs), though not formally defined, refers to
primary co-operative banks located in urban and semi-urban areas. These banks, till
1996 were allowed to lend money only for non-agricultural purposes. This distinction
does not hold today. These banks were traditionally centered on communities,
localities, work place groups. They essentially lend to small borrowers and
businesses. Today, their scope of operations has widened considerably.
2.6 Functions of co-operative banks
Co-operative banks also perform the basic banking functions of banking but they
differ from commercial banks in the following respects
Commercial banks are joint-stock companies under the companies act of 1956, or
public sector bank under a separate act of a parliament whereas co-operative banks
were established under the co-operative societys acts of different states.
Commercial bank structure is branch banking structure whereas co-operative banks
have a three tier setup, with state co-operative bank at apex level, central / district cooperative bank at district level, and primary co-operative societies at rural level.
V.I.M.(MBA)Pethnaka.
Page 18
On Loan Analysis
A Study
Only some of the sections of banking regulation act of 1949 (fully applicable to
commercial banks) are applicable to co-operative banks, resulting only in partial
control by RBI of co-operative banks and
Co-operative banks function on the principle of cooperation and not entirely on
commercial parameters.
2.7 loans Definition of loan
An arrangement in which a lender gives money or property to a borrower and the
borrower agrees to return the property or repay the money, usually along with interest,
at some future point(s) in time. Usually, there is a predetermined time for repaying a
loan, and generally the lender has to bear the risk that the borrower may not repay a
loan (though modern capital markets have developed many ways of managing this
risk).
To whom the can supply loans to the members of the banks and to the nominal
members of the banks .In the same way banks can give loans to the depositors in the
mortgage of the deposit amount (Exception of savings and current deposits).For that
such depositors must not be members of the to get government legal support for
recovery.
How much amount can be sanctioned by the banks:According to the circular published by co-operative department on 6th January 2003
the banks can do the loan dealings of maximum amount as stated below.
A]
interest)
2. Total deposits.
3. External loans.
B]
Page 19
On Loan Analysis
A Study
Page 20
On Loan Analysis
A Study
B) For Nominal Member:The loans given to nominal members are not according to exposure limit. The loans
given to be to the nominal members are decided by the reserve bank on the basis of
reasons mortgage and limit of amount and the order is given accordingly. Therefore
there is always change in it.
These limits must be compulsorily followed by the banks.
C) Loans to de given to the Depositors:There is no limit on how much amount of loan is given to the depositors. As per banks
decision of difference between loan amount and deposit amount, every bank can
sanction loans to depositors. Such loans are not considered under explore limit .But
they are taken into account of loan able funds.
The basic Principles to be noticed by banks while sanctioning Loans:A) Safely:Safely of the loan amount is depended up to the borrowers will power to refund to
loan in time his mood. His mentality the mortgage for loan is quickly sold or not and
the mood and mentality of the guarantors taken from loan.
B) Liquidity:Liquidity is depended up to the loan is refunded according to the procedure
Fixed by the bank and it is donor within fixed time by bank.
c) Profitability:It is necessary to get profit to the bank in the loan dealings. The interest on the loan
should be of such amount through which interest to be given it depositors,
administrative expenditure, and other financial. Provision should be meeting out and
V.I.M.(MBA)Pethnaka.
Page 21
On Loan Analysis
A Study
then the profit should be remained and through this profit bank should give dividend
to the members make other fund for provision and should create new funds.
D) Diversification:The loan to be given by the bank should not be the same form of the loan should not
be given to the same kind of the borrowers or should not be centralized among certain
type of borrower. It should be distributed among different classes of people and given
on different type of borrowers.
E) Purpose:The loan sanctioned by the bank should be productive. The loans which add to the
income of the borrowers by their use such loans are called productive loans. In the
same way the loan is called non-productive when it does not add anything to the
income of the borrowers by its use but it creates extra burden on his income .It is not
meant that banks should not give loans for non-productive purposes.
It is not right to think only on any one of these five principles. All these principles
should be thought of together while sanctioning loan and considering all these
principles it is necessary to be attentive on the plan of loan, reason of the loan and
mortgage to be given for the loan.
2.8 Type of loan :The loans sanctioned by the banks have different kinds on the different levels . They
are as follows
A) The system of receiving loan :Some loans are received by borrowers in one installment getting all amount at one
time they are refunded in fixed amount of installments. These loans are called term
loans classification of
V.I.M.(MBA)Pethnaka.
Page 22
On Loan Analysis
Loans are as follows:-
A Study
refundable after 15months up to60 months medium term loans Loans refundable
after 60 months Long term loans.
It is indication that such long term loans should not be of term over ten years. In some
exception it is restricted that the deposits received by bank should not be of term over
ten years. But by planning the bank can distribute the loans over ten years period
through that plan.
Some loans are sanctioned but these sanctioned loans are not
received on one installment as per restriction Loan can be taken according to need
borrow can refund it if the fund is available and if needed can take it again such loan
is for 12 months . such loans include cash overdraft and discounting.
B) The support of fund for loans:The borrower receives the loan quickly after they are sanctioned. That is why the
amount of bank is soon utilized. This is called fund based limit all type of term loan
and operative loans are included in this type . Some kind s of term sanctioned the
bank is not bound to invest the funds bank should have to take responsibility when the
borrower does not complete the item accepted in the dealing such loan is called non
fund based mainly it included a bank guarantee and the credit cards that are opened by
the bank.
Loan against Gold :When the ornaments/ articles of gold/silver area received as mortgage bank will be
taken form the borrower after that.
Loan will be sanctioned by the board of directors on the rates decided from time to
time form the authorized goldsmith after nothing the remarks of weight of articles
,cost of articles as per markets rate, purify of them on the form of bank after examine
them.
Consent of the concerning woman should be given when the articles like wedding
necklace are given as mortgage
V.I.M.(MBA)Pethnaka.
Page 23
On Loan Analysis
A Study
Page 24
On Loan Analysis
A Study
d)It will not deserve the due interest credited to credit balance on the cash credit
account.
e)Generally cash credit limit will be sanctioned for 12 month but it will be sanctioned
for 3 year but also on such time it will be permitted after having the review on the
limit every year .
Papers to be received:1. Application for demand of loan .
2. Promissory note
3) mortgage deed
4) list of goods when the first advance is taken in the account.
5) A letter of continuing security.
6) No-objection certificate from the owner of the place for entry in the place.
7)Letter from the owner of the place disclaiming on the goods in the place.
V.I.M.(MBA)Pethnaka.
Page 25
On Loan Analysis
A Study
Chapter: 3
PROJECT DESIGN AND
METHODOLOGY
V.I.M.(MBA)Pethnaka.
Page 26
On Loan Analysis
3.1
A Study
Loan:The main business of the civil co-operative banks is to make profit and give
good quality services to their customer .In that way the bank collect the money from
the depositors and borrow the money to borrower and do such type of loan dealing is
as per banking regulation act.
Definition:(Under section 5 of the Banking Regulation Act,):Acceptance of deposit of the purpose of lending and investment.
When the history of the civil co-operation banks is noticed one can find the loan
supply is changed time being in accordance with mortgage (security), in accordance
with amount. But the main principle of all dealings of loan has remained static and it
is Social need based loan dealing to create credit of one who has no credit and to
increase in credit of creditors. Therefore to create employment and to raise standard of
living these are main purpose of banking.
The funds available for loan dealing of banks are self fund of bank, deposit
amount collected from depositors and loan taken from district co-operative bank in
some exceptional case but the main and great source is deposit amount collected from
depositors.
Statement of the Problem:The profitability of the banking sector has taken as server beating in
the recent time in the context of low credit off take by the industrial segment, in
ability of central/state governments take up large projects stiff competition among
various banks resulting in the spreads etc. Adding to this scenario the increase in
proposal analysis have thoroughly shaken the stability of the few banks Hence, the
V.I.M.(MBA)Pethnaka.
Page 27
On Loan Analysis
A Study
topic selected to analyze the Loan Analysis is Sahakari bank and its effect on
profitability of the bank.
3.2
Research Methodology
The study was aimed by systematic design. Collection analysis, reporting of
data and finding relevant to receivable management of Palus sahakari bank ltd ,palus
a descriptive study was done to obtain an accurate description.
Definition:
Research is the process which includes defining and refining problems,
formulating hypothesis or suggested solution ,colleting, organizing and evaluating
data making deductions and reaching conclusions and at lat carefully testing the
conclusions to determine whether they fit the formulating the hypothesis .
Advantages:
1) Research guides social and business planning.
2) Rescarch brings new knowledge.
3) Evaluation of project and plans.
Primary Data:
Primary data is collected during the course of In-plant Training through observation
and discussion with the bank officers &employee also collected form questions.
Secondary Data:
These data have been collected from various book, annual report &bank website
V.I.M.(MBA)Pethnaka.
Page 28
On Loan Analysis
A Study
In this study secondary data used are balance sheet foe the year 2008-2012
were used to project the financial analysis for Palus sahakari bank ltd,palus. other
data were collected form the companies book is and records of various department.
3.3
3.4
V.I.M.(MBA)Pethnaka.
Page 29
On Loan Analysis
A Study
V.I.M.(MBA)Pethnaka.
Page 30
On Loan Analysis
3.6
A Study
Limitations:1) Non disclosure factor:The bank is supposed to maintain secrecy in their accounts. Hence certain
V.I.M.(MBA)Pethnaka.
Page 31
On Loan Analysis
A Study
Chapter: 4
DATA ANALYSIS AND
INTERPRETATION
V.I.M.(MBA)Pethnaka.
Page 32
On Loan Analysis
A Study
(Rs.in cr.)
Year
Total
loan
amount
Increase
Decrease
2008
4.76
1.23
2009
8.73
3.97
2010
10.67
1.94
2011
14.23
3.59
V.I.M.(MBA)Pethnaka.
Page 33
On Loan Analysis
2012
22.57
8.34
A Study
Data Interpretation:The total gold advance was Rs.4.76 Cr. In year 2008. It increased to
8.73 & 10.67,14.23,22.57 in year 2009,2010,2011 & 2012 respectively. Because 3 %
Rebate given to borrower for regular repayment loan. Easy to procedure &time saving
paid for quick money.
Table sanctioned Rs. In cr. 1.23, 3.97, 1.94, 3.59, 8.34 in the year 2008, 2009, 2010,
2011, 2012 which shows increasing of loan.
B) Hypothecation Loan (NAJARGHAN LOAN)
Process of Sanction Loan Proposal
1) This loan given only to the nominal member of the bank.
2) This loan necessary for getting loan a person require 2 to 4 guarantors.
3) This loan is given against the hypothecation of owned goods & store in the
shop for the purchase of furniture
4) House and land papers is taken as additional security for the loan
5) The borrower is allowed to repay the loan to the bank by EMI W.R.T. monthly,
quarterly half yearly, yearly
6) Hypothecation loan given for 3 to 10 years at the interest rate 16.5%
7) 1.5% rebate is given to borrower for regular re payment of loan
V.I.M.(MBA)Pethnaka.
Page 34
A Study
On Loan Analysis
Increase
1.66
1.69
3.47
1.06
1.20
Decrease
-
HYpothecation Loan
25
20
15
10
5
0
2008
2009
2010
2011
2012
Data Interpretation:In the year 2008 the bank provides hypothecation loan is
Rs.12.94cr. In the 2009&2010of the Rs. 14.63&Rs.18.10 bank provide loan to
small scale industry &purchasing manchinery.1.5%get rebate up to each loan .
Interest is high. In the year 2011&2012The bank given loan to short term, madam
term, long term, loan Increase loan Rs. 19.16&RS.20.44cr. The table shows in the
year 2008-2009, 2010,2011,2012 total amount was Rs.in cr. 1.66, 3.47,1.06,1.20
which a increase.
C) Hire Purchase Vehicle Loan
Process of Sanction Loan Proposal
V.I.M.(MBA)Pethnaka.
Page 35
On Loan Analysis
A Study
V.I.M.(MBA)Pethnaka.
Increase
10.3
22.00
24..72
7.35
Page 36
Decrease
77.15
-
On Loan Analysis
A Study
2009
2010
2011
2012
YEAR
Data Interpretation
In the year 2008&2009 the bank provide loan
Rs.96.28&19.13.the 2009loan decreasing because bank provide loan up to 60%of
the equation for heavy vehicle two, three, four wheeler. 2010,2011&2012 the bank
provide loan Rs.41.21,65.93&73.28.The bank loan increasing because interest rate
paid 16.5%per years&3% rebate I given to borrower for regular repayment of
loan.
Above table shows that there is the increasing & decreasing tendency of
borrowing here year 2008, 2009, 2010, 011, 2012 Rs in cr. 10.3, 77.15, 22.00,
24.72, 7.35.
D) Loan against vehicle:
Process of Sanction Loan Proposal
1) Bank provide loan for old vehicle like two, three. four wheeler.
2)This loan only given to the nominal member in bank
3) This loan necessary for getting loan a person require 2 to 4 guarantors.
V.I.M.(MBA)Pethnaka.
Page 37
A Study
On Loan Analysis
2008
2009
2010
2011
2012
34.26
40.46
64.64
71.52
75.16
Decrease
-
V.I.M.(MBA)Pethnaka.
2009
2010
Page 38
2011
2012
On Loan Analysis
A Study
Data Interpretation:
The total loan against vehicle was Rs.34.26 Cr. In year 2008. It
increased to 40.46, 64.46, 71.52, 75.16 in year 2009, 2010, 2011 & 2012
respectively. The bank provide loan for old vehicle lick two, three, four
wheeler .Interest paid 16.5%. %of loan is given by bank for old vehicles
1)1 year old vehicle=60%,2)2&3 years old vehicle=50%,3)3&5 years old
vehicle=40%.Above table shows that more is the increase tendency of
borrowing loan against vehicle in the year 2008,2009, 2010, 2011, 2012 in
a Rs. Cr. 3.58, 6.2, 24.18, 6.88, 3.64.
E) Loan against Salary:Process of Sanction Loan Proposal
1)This loan only given to the nominal member in bank
2) This loan necessary for getting loan a person require 2 to 4 guarantors.
3) Term for this loan is 5 years to 10 years
4) Interest paid 16.5%
5) Important document required for getting loan:5.1) Salary certification of the company institution other sectors etc.
5.2) Company appointment letter.
6) Loan is given by considering the minimum wages Act.
Table No.5 statement showing loan against salary:(Rs. In cr.)
Year
Decrease
2008
13.71
2.55
2009
46.63
17.49
V.I.M.(MBA)Pethnaka.
Page 39
A Study
On Loan Analysis
2010
52.50
70.03
2011
13.71
2012
10.06
0.83
Rs.in cr
60
50
40
30
20
10
0
Rs.in cr
2008
2009
2010
2011
2012
Data Interpretation:The bank has not given loan against salary to the other persons that
means the bank given loan only to their employee. The bank provide loan
against salary is year 2008 Rs 13.70 Cr,2009 Rs 46.63 Cr ,2010 Rs 52.50
Cr, 2011 Rs 13.71 Cr ,2012 Rs 10.6 Cr. Because term of this loan is very
low. This loan necessary for getting loan a person require two & four
guarantor & considering the minimum wages acts.
F) Loan against Property:Process of Sanction Loan Proposal
1) This loan only given to the nominal member in bank
2) This loan necessary for getting loan a person require 2 to 4 guarantors.
3) This loan guarantor has to provide property home / land papers.
4) Term for this loan is 5 years to 10 years
V.I.M.(MBA)Pethnaka.
Page 40
A Study
On Loan Analysis
5) Interest paid 16.5%
Decrease
2008
63.00
2.55
2009
80.49
17.49
2010
10.46
70.03
2011
11.46
2012
12.29
0.83
2009
2010
Data interpretation:V.I.M.(MBA)Pethnaka.
Page 41
2011
2012
A Study
On Loan Analysis
The some people invest their money in purchasing property as like land or plot so
that need finance & it completed there aim .loan against property in the year 2008 was
Rs.63.00cr in 2009 was Rs.80.49,2010 inRs.10.46, in 2011 is Rs.11.46,In this 2012 is
Rs.12.29Cr. The higher percentage is get because of in this year borrowers take long
term loan .In this year the no. of account holder is very high. The above table shows
increase & decrease
Total
loan
2008
55.95
2009
43.59
2010
38.82
2011
34.90
V.I.M.(MBA)Pethnaka.
2012
31.51
Page 42
-6.89
-12.36
-4.77
-3.92
-3.39
A Study
On Loan Analysis
2009
2010
2011
2012
Data Interpretation:Bank provides loan to allied agriculture. Banking work area is village
area & the main business of the people is agriculture. The total loan against allied
agriculture was Rs.55.96 Cr. In year 2008. It increased to 43.59, 38.82, 34.90, 31.51
in year 2009, 2010, 2011 & 2012 respectively. The table shows the Decrease
tendencies of the loan in the year 2008, 2009, 2010, 2011, 2012 following are Rs. In
cr. -6.89, -12.36, -4.77, 3.92, -3.39.
F) Agriculture Loan:Process of Sanction Loan Proposal
1) This loan only given to the nominal member in bank
V.I.M.(MBA)Pethnaka.
Page 43
A Study
On Loan Analysis
V.I.M.(MBA)Pethnaka.
Page 44
Decrease
-2.71
-3.36
-1.87
-6.77
On Loan Analysis
A Study
Agricalture Loan
96
94
92
90
88
86
84
82
80
2008
2009
2010
2011
2012
Data interpretation:The total loan agriculture was loan Rs.94.80 Cr. In year 2008. It
increased to 91.44, 89.57, 91.82, 85.05 in year 2009, 2010, 2011 & 2012
respectively. The above table shows the increase & decrease tendency of the in
a year 2008, 2009, 2010, 2011, 2012 in a Rs. Cr. -2.71, -3.36, -1.87, 2.25,
-6.77 in respectively
I) Fixed Deposit Loan:Process of Sanction Loan Proposal
1) This loan guaranteed actual fixed deposited.
2) This loan is not necessary guarantor.
3) Term of loan is limited up to term of fixed deposit loan .
4) Additional 2% is the rate of interest changed on loan as against the term rate of
deposit.
5) In the fixed deposit loan the bank should given loan against deposit .
6) Interest is charged quarterly.
V.I.M.(MBA)Pethnaka.
Page 45
A Study
On Loan Analysis
TOTAL
LOAN
77.18
11.46
95.70
78.00
28.50
2008
2009
2010
2011
2012
2009
2010
2011
2012
Data Interpretation:The total loan against fixed deposit was Rs.77.18 Cr. In year 2008. It increased
to 11.46, 95.70, 78, 25.80 in year 2009, 2010, 2011 & 2012 respectively .Because this
loan guaranteed actual fixed deposited. interest is charged quarterly. Loan decrease
additional 2% is the rate of interest changed on loan as against the term rate of
deposit.
The above shows the total amount of increase & decrease tendency of in
year 2008, 2009, 2010, 2011, 2012 in Rs .cr. 8.58, -65.72, 84.24, -1.77, -49.5
respectively.
V.I.M.(MBA)Pethnaka.
Page 46
A Study
On Loan Analysis
Loan Classification:
Element
loan
of
1)loan against
gold
2)Hypothecatio
n loan
3)Hire
purchase loan
4)Loan against
vehicle
5)Loan against
salary
6)Loan against
property
7)Allied
agriculture
loan
Year
68.4878
Increase[%]
73.9183
Element
loan of the
year
4.76
2008
2009
2010
2011
2012
2008
87.6549
65.5770
68.7600
68.4878
73.9183
8.73
10.23
14.23
22.57
12.94
83.40
22.22
40.77
58.60
8.92
2009
2010
2011
2012
2008
87.6549
65.5770
68.7600
68.4878
73.9183
14.63
18.10
19.16
20.44
96.28
13.06
23.71
5.69
6.68
12.50
2009
2010
2011
2012
2008
87.6549
65.5770
68.7600
68.4878
73.9183
19.13
41.21
65.93
73.28
34.26
59.98
11.14
11.66
18.09
2009
2010
2011
2012
2008
87.6549
65.5770
68.7600
68.4878
73.9183
40.46
64.64
71.52
75.16
13.71
59.76
10.64
5.08
2009
2010
2011
2012
2008
87.6549
65.5770
68.7600
68.4878
73.9183
46.63
52.50
13.71
10.06
63.00
12.50
2009
2010
2011
2012
2008
87.6549
65.5770
68.7600
68.4878
73.9183
80.49
10.46
11.46
12.29
55.95
2009
2010
87.6549
65.5770
43.59
38.82
V.I.M.(MBA)Pethnaka.
Page 47
Decrease[%]
34.83
-80.13
-45.24
240
-73.88
-26.62
-3.89
27.76
-87.00
9.56
7.24
-12.31
-22.09
-10.94
-10.09
A Study
On Loan Analysis
8)Agriculture
loan
9)Fixed deposit
loan
2011
2012
2008
68.7600
68.4878
73.9183
34.90
31.51
94.80
2009
2010
2011
2012
2008
87.6549
65.5770
68.7600
68.4878
73.9183
91.44
89.57
91.82
85.05
77.18
2009
2010
2011
2012
87.6549
65.5770
68.7600
68.4878
11.46
95.70
78.00
28.50
-9.71
3.47
-3.54
-2.04
2.51
-7.37
12.50
-85.15
735
-22.69
-63.46
2008
40
2009
20
2010
2011
V.I.M.(MBA)Pethnaka.
2012
Page 48
On Loan Analysis
Chapter: 5
FINDINGS
V.I.M.(MBA)Pethnaka.
Page 49
A Study
On Loan Analysis
A Study
Short Term Loan :This type of loan given by following different ways i.e.
1) Loan against gold.
2) Hypothecation cash credit loan .
Loan against gold is most popular loan &its percentage is also high. Hypothecation
cash credit loan is percentage fluctuates in year by year .
Medium term loan:Medium term loans are sanctioned on small securities. This type of loan given by
following different loan.
1) Allied agriculture .
2) Loan against salary.
3) Hire purchase & vehicle loan.
4) Hypothecation.
5) Loan against property.
In this different types loans, allied agriculture loan given by highest percentage
because it is very helpful for agriculture activity to the farmer. Hire purchase &
vehicle loan is less percentage private bank &finance company provide loan for
vehicle.
Loan against salary is unsecured loan, then this type of loan is also bank provide, but
risk is taken in this loan .
In loan against property, secured property from legal advisor taken &loan is offered
after register mortgage &fulfillment of other document .Hypothecation loan
percentage also fluctuates year by year.
V.I.M.(MBA)Pethnaka.
Page 50
On Loan Analysis
A Study
Long term loans :Long term loans are loans are sanctioned on securities i.e. based on their repayable
capacity.
Mortgage loan :In this type of loan given by following different loans 1)Food loan 2)Double
price deposit loan 3)fixed deposit loan 4) small term mortgage loan. In food loan,
percentage of loan decrease. Also this is secured type of loan .
In fixed deposits amount of loan is high in different loans, percentage of loan in
double price deposit, fixed deposit, small term mortgage loan is in fluctuates year by
year.
V.I.M.(MBA)Pethnaka.
Page 51
On Loan Analysis
A Study
Chapter: 6
Suggestions
Suggestions:1) The bank should collect detailed information regarding loan proposals, such as
guarantee of recovery, security etc.
V.I.M.(MBA)Pethnaka.
Page 52
On Loan Analysis
A Study
2) Medium term loan should be granted with having full information regarding
earnings power & repaying capacity of the entity.
3) This bank should increase demand & saving deposits so that to provide different
type of loan borrowers& also to maintain equilibrium between the two.
4) The term loan deposit should be controlled up to the limit as per law.
5) The bank may involve staff member for checking of loan proposals & the
concerned staff should trained.
6) In different way of loan Palus bank is mostly provided loan against gold, if he
allied agriculture loan is largely distributed to the farmer then it will be beneficial for
the bank business point of view.
7) While granting loans the bank must check all the details of the borrowers.
8) The bank should use the method of compromise which means settlement of dispute
reached by mutual concessions where there is possibility of recovery.
9) The bank should take strict legal actions against those not paying the installments
regularly.
10) The bank must avoid giving loans to the members having previous dues or bad
record by this way the bank could avoid the losses well before.
V.I.M.(MBA)Pethnaka.
Page 53
On Loan Analysis
A Study
Conclusion
Conclusion:
This bank provides the different type of loan. E.g. Loan against machinery,
Land & building, good& agriculture. Bank completes all the transaction according to
rule of R.B.I. & provide loan to the common people. The board of directors is most
efficient and on the basis of efficient, bank reach the target& well stand in the market.
The loan holder have trust on bank because bank always completing their
needs, bank shareholder were satisfied because they received attractive dividend form
the bank, depositors are also fully satisfied because bank give the attractive rate of
interest on their deposits as well as bank introduced additional deposits scheme year
after year on the demand of customer.
V.I.M.(MBA)Pethnaka.
Page 54
On Loan Analysis
Bibliography
Bibliography
V.I.M.(MBA)Pethnaka.
Page 55
A Study
A Study
On Loan Analysis
A) Books:
1) Preparing Loan Proposals
Maharashtra: A DEA
C) Website:
www.palussahakaribank .com
V.I.M.(MBA)Pethnaka.
Page 56
On Loan Analysis
A Study
Questionnaires
QUESTIONNAIRES:
1.How many types loan provided to the barrower ?
2.What is the eligibility for loan application ?
3.List of documents required to loan application ?
4.How many interest rate will be charged in the various loans ?
5.Which type of rules & conditions are mostly applied ?
6.Which type of loan given first preference to barrow ? Why.
V.I.M.(MBA)Pethnaka.
Page 57
On Loan Analysis
V.I.M.(MBA)Pethnaka.
Page 58
A Study