1

PROJECT REPORT

ON

Evaluation of credit services by Cooperative Bank & State Bank of

India

Submitted in Partial fulfillment for the Requirement of

Master of Business Administration

Submitted By: Internal Guide

Nishant Rautela Mr. Mayank Kumar

Institute of Co-operative Management, 6 Old Mussoorie Road,

Dehradun
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PREFACE

This Project is about various loans sanctioned by cooperative bank and the state bank of
India. These two banks have a major portion of credit services in India.

This project also explains the financial services and regulating strategy of both the
companies..

In finance, a loan is the lending of money from one individual, organization or entity to
another individual, organization or entity. A loan is a debt provided by an entity
(organization or individual) to another entity at an interest rate, and evidenced by a
promissory note which specifies, among other things, the principal amount of money
borrowed, the interest rate the lender is charging, and date of repayment. A loan entails
the reallocation of the subject asset for a period of time, between the lender and the
borrower.

Having similar interest rates and loan schemes in the market it is very difficult for banks
to increase their market share, so this comparative study focuses on the positives and
negatives of each..
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ACKNOWLEDGEMENT

I would like to thanks Mr. Bhanwar Singh (Director), ICM Dehradun, Dr.
Ajay Sharma (Chief Coordinator) and Mr. G.S Chauhan (Faculty) for their
encouragement and support.

A letter of thanks to MBA-Coordinator & T.P.O. for providing me the

opportunity to get my training done also lending constant support and
encouragement through my studies and in the last I would like to thank all
my faculty members for the proper guidance and assistance extended by
them.

With a deep sense of gratitude and humble submission I would like to

express my heartiest gratefulness to my Faculty Guide Mr. Mayank Kumar
for guiding me throughout the project report.

Name of Student

Nishant Rautela

MBA 4th sem

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TABLE OF CONTENTS

Industry Introduction

Banking Industry in India

Cooperative Banks

Credit products provided by Cooperative Banks

State Bank of India

Credit Products by State Bank of India

Research Methodology

Data interpretation and Analysis

Conclusion

Questionaire

Bibliography
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OBJECTIVE

First and foremost objective is to find out the reasons for using of Advance
Product from SBI.

To Find Out Why People Prefer one bank over the other

To sort out the prospective leads from the data I have collected through

The report

To find out the customer awareness on booming Advance Product market

And find Out using patterns of the people

To find out the market position of the products of both banks

To get a detailed overview of the various products of state bank of india and
cooperative bank
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INDUSTRY INTRODUCTION

WHAT IS BANKING?

Banking in a traditional sense is the business of accepting deposits of money from public
For the purpose of lending and investment. These deposits can have a distinct feature
like being withdrawn able by cheques, which no other financial institution can offer. In
Addition, banks also offer financial services, which include:
The Issue of demand draft & travelers cheque.
Credit cards
Collection of cheques, bill of exchange.
Safe deposit lockers
Custodian services.
Investment and Insurance Services.

The business of banking is highly regulated since banks deal with money offered to them
by the public and ensuring the safety of this public money is one of the prime
responsibilities of any bank. That is why banks are expected to be prudent in their
leading and investment activities. Every bank has a compliance department, which is
responsible to ensure that all the services offered by the bank, and the processes
followed are in compliance with the local regulations and the Banks corporate policy.

The major regulations and act govern the banking business are:-
Banking Regulation Act, 1949
Foreign Exchange Management Act, 1999
Indian Contract Act
Negotiable Instruments Act, 1881

Bank lends money either for productive purposes to individual, firms, Corporate etc. for
buying house property, cars and other consumer durables and for investment Purposes
to individuals and the others. However, banks do not finance any Speculative activity.
Lending is risk taking. The depositors of banks are also assured of safety of their money
by deploying some percentage of deposit in statutory Reserves like SLR & CLR.
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STANDARD ACTIVITIES OF BANK

Banks act as payment agents by conducting checking or current accounts for customers,
paying cheques drawn by customers on the bank, and collecting cheques deposited to
customers' current accounts. Banks also enable customer payments via other payment
methods such as telegraphic transfer, and ATM.

Banks borrow money by accepting funds deposited on current accounts, by accepting

term deposits, and by issuing debt securities such as banknotes and bonds. Banks lend
money by making advances to customers on current accounts, by making installment
loans, and by investing in marketable debt securities and other forms of money lending.

Banks provide almost all payment services, and a bank account is considered
indispensable by most businesses, individuals and governments. Non-banks that provide
payment services such as remittance companies are not normally considered an
adequate substitute for having a bank account.

Banks borrow most funds from households and non-financial businesses, and lend most
funds to households and non-financial businesses, but non-bank lenders provide a
significant and in many cases adequate substitute for bank loans, and money market
funds, cash management trusts and other non-bank financial institutions in many cases
provide an adequate substitute to banks for lending savings too.

REVENUE GENERATION

A bank can generate revenue in a variety of different ways including interest, transaction
fees and financial advice. The main method is via charging interest on the capital it lends
out to customers. The bank profits from the differential between the level of interest it
pays for deposits and other sources of funds, and the level of interest it charges in its
lending activities.

This difference is referred to as the spread between the cost of funds and the loan
interest rate. Historically, profitability from lending activities has been cyclical and
dependent on the needs and strengths of loan customers and the stage of the economic
cycle. Fees and financial advice constitute a more stable revenue stream and banks
have therefore placed more emphasis on these revenue lines to smooth their financial
performance.
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RISK AND CAPITAL

Banks face a number of risks in order to conduct their business, and how well these risks
are managed and understood is a key driver behind profitability, and how much capital a
bank is required to hold. Some of the main risks faced by banks include:

Credit risk: risk of loss arising from a borrower who does not make payments as
promised.

Liquidity risk: risk that a given security or asset cannot be traded quickly enough in the
market to prevent a loss (or make the required profit).

Market risk: risk that the value of a portfolio, either an investment portfolio or a trading
portfolio, will decrease due to the change in value of the market risk factors.

Operational risk: risk arising from execution of a company's business functions.

The capital requirement is a bank regulation, which sets a framework on how banks and
depository institutions must handle their capital. The categorization of assets and capital
is highly standardized so that it can be risk weighted

ECONOMIC FUNCTIONS OF BANKS

The economic functions of banks include:

Issue of money, in the form of banknotes and current accounts subject to cheque or
payment at the customer's order. These claims on banks can act as money because they
are negotiable or repayable on demand, and hence valued at par. They are effectively
transferable by mere delivery, in the case of banknotes, or by drawing a cheque that the
payee may bank or cash.

Netting and settlement of payments banks act as both collection and paying agents for
customers, participating in interbank clearing and settlement systems to collect, present,
be presented with, and pay payment instruments. This enables banks to economies on
reserves held for settlement of payments, since inward and outward payments offset
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each other. It also enables the offsetting of payment flows between geographical areas,
reducing the cost of settlement between them.

Credit intermediation banks borrow and lend back-to-back on their own account as
middle men.

Credit quality improvement banks lend money to ordinary commercial and personal
borrowers (ordinary credit quality), but are high quality borrowers. The improvement
comes from diversification of the bank's assets and capital which provides a buffer to
absorb losses without defaulting on its obligations. However, banknotes and deposits are
generally unsecured; if the bank gets into difficulty and pledges assets as security, to
raise the funding it needs to continue to operate, this puts the note holders and
depositors in an economically subordinated position.

BANKING IN INDIA:-

Banking means accepting for the purpose of landing or investment of deposits of money
from the public repayable on demand or otherwise one withdraw able by cheque, draft or
otherwise.
Banking in India has its origin as early as the Vedic period. It is believed that the
transaction
From money lending to money banking must have occurred even before Manu, the great
Hindu Jurist, who has devoted a section of his work to deposits and advances and laid
down the rules relating to rate of interest , During Mugal Period, the native bankers played
a very important role in lending money and finance foreign trade and commerce. During
the days of the east- India Company, it was the turn of the agency house to carry on the
banking business the general bank of India was the first joint stock bank to be
established in the year 1786. The others that followed were the Bank of Hindustan and
the Bengal Bank. The Bank of Hindustan is reported to have continued till 1906 while the
other two failed in the meantime. In the first half of the 19th century the east-India
company established three banks, the Bank of Bengal in 1809, the Bank of Bombay in
1840 and the banks of Madras in 1843.
These three banks are also known as the presidency banks were amalgamated in 1920
and a new Bank the imperial bank of India established ion 27th January 1921. With the
passing of the state bank act 1955 the under taking of the imperial Bank of India is taken
over by the newly constituted the state bank of India.
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INDIAN BANKING INDUSTRY

ORGANISED BANKS UNORGANISED BANKS

RBI INDIGENOUS

COMMERCIAL
BANKS

NON SHEDULED
COMM. BANKS
MONEY LENDERS

SHEDULED
COMM. BANKS

STATE BANK GROUP

UNREGULED
NON BANKERS
NATIONALISED
BANK

INDIAN BANK

FOREIGN BANK

COOPERATIVE
BANK

STATE COOPERATIVE BANK

CENTERAL COOPERATIVE BANK

PRIMARY AGRICULTURE CREDIT

SOCIETY
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CO-OPERATIVE BANKS
Co-operative banks are small-sized units organized in the co-operative sector which
operate both in urban and non-urban centers. These banks are traditionally centered on
communities, localities and work place groups and they essentially lend to small
borrowers and businesses.

The term Urban Co-operative Banks (UCBs), though not formally defined, refers to
primary cooperative banks located in urban and semi-urban areas. These banks, until
1996, could only lend for non-agricultural purposes.

However, today this limitation is no longer prevalent. While the co-operative banks in
rural areas mainly finance agricultural based activities including farming, cattle, milk,
hatchery, personal finance, et cetera, along with some small scale industries and self-
employment driven activities, the co-operative banks in urban areas mainly finance
various categories of people for self-employment, industries, small scale units and home
finance.

Co operative Banks in India are registered under the Co-operative Societies Act. The
cooperative bank is also regulated by the RBI. They are governed by the Banking
Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

These banks provide most services such as savings and current accounts, safe deposit
lockers, loan or mortgages to private and business customers. For middle class users,
for whom a bank is where they can save their money, facilities like Internet banking or
phone banking is not very important.

Co-operative banks function on the basis of 'no-profit no-loss'. Co-operative banks, as a

principle, do not pursue the goal of profit maximization. Therefore, these banks do not
focus on offering more than the basic banking services. So, co-operative banks finance
small borrowers in industrial and trade sectors, besides professional and salary classes.

Co-operative banks differ from stockholder banks by their organization, their goals, their
values and their governance. In most countries, they are supervised and controlled by
banking authorities and have to respect prudential banking regulations, which put them
at a level playing field with stockholder banks. Depending on countries, this control and
supervision can be implemented directly by state entities or delegated to a co-operative
federation or central body.
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Even if their organizational rules can vary according to their respective national
legislations, co-operative banks share common features:

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.

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.

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 is
related 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.

Co-operative banks are deeply rooted inside local areas and communities. They are
involved in local development and contribute to the sustainable development of their
communities, as their members and management board usually belong to the
communities in which they exercise their activities. By increasing banking access in
areas or markets where other banks are less present SMEs, farmers in rural areas,
middle or low income households in urban areas - co-operative banks reduce banking
exclusion and foster the economic ability of millions of people. They play an influential
role on the economic growth in the countries in which they work in and increase the
efficiency of the international financial system. Their specific form of enterprise, relying
on the above-mentioned principles of organization, has proven successful both in
developed and developing countries.

The Co operative banks in India started functioning almost 100 years ago. The
Cooperative bank is an important constituent of the Indian financial system judging by
the role assigned to co operative, the expectations the co operative is supposed to fulfill,
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their number, and the number of offices the cooperative bank operate Though the co
operative movement originated in the West, but the importance of such banks have
assumed in India is rarely paralleled anywhere else in the world.

The cooperative banks in India play an important role even today in rural financing the
Businesses of cooperative bank in the urban areas also have increased phenomenally in
recent years due to the sharp increase in the number of primary co-operative banks.

Co operative Banks in India are registered under the Co-operative Societies Act. The
cooperative bank is also regulated by the RBI. They are governed by the Banking
Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.

Cooperative banks in India finance rural areas under:

Farming

Cattle

Milk

Hatchery

Personal finance

Cooperative banks in India finance urban areas under:

Self-employment

Industries

Small scale units

Home finance

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Consumer finance

Personal finance

Some facts about Cooperative banks in India

Some cooperative banks in India are more forward than many of the state and private
sector banks.

According to NAFCUB the total deposits & landings of Cooperative Banks in India is much
more than Old Private Sector Banks & also the New Private Sector Banks.

This exponential growth of Co operative Banks in India is attributed mainly to their much
better local reach, personal interaction with customers, and their ability to catch the
nerve of the local clientele.

There are two main categories of the co-operative banks.

(a)Short term lending oriented co-operative Banks - within this category

there are three sub categories of banks viz state co-operative banks, District co-
operative banks and Primary Agricultural co-operative societies.

(b) Long term lending oriented co-operative Banks - within the second
category there are land development banks at three levels state level, district level and
village level.

The cooperation banking structure is divided into following five

categories
1. Primary urban cooperative banks

2. Primary agriculture credit societies

3. District central cooperation bank

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4. State cooperative bank

5. Land development bank

VISION:
1. Providing the loans to the co operative societies.
2. Starting the new schemes for the cooperative societies to recover the N.P.A
(non Performing assets)
3. Opening the education center for cooperative societies to improve/increase the
business through giving them proper training & suggestions.
4. Providing the loans for new schemas time to time.
5. Repairing the plans for encouraging & awarding the employees of the Bank.

MISSION:

Mission/Target of the bank is to help the self helped groups by providing those loans at
low rate. Providing the education to the workers/employees of the cooperative societies
and managing the financial status of the cooperative societies.
1. Achieving the schedule status for the bank.
2. Providing the retail banking to the customers with the help of Information booth.
3. Providing the SAMAGRA banking facilities to the customers in one branch.

CREDIT DEPARTMENT
CD Banking business primarily involves accepting deposits from the public and investing
or lending the same and thereby making profit out of it. However, lending money is not
without risk and therefore banks make loans and advances to farmers, traders,
businessmen and industrialist against either tangible (land, building, stock etc.) or
intangible security. Even then, the banks run the risk of default in repayment. Therefore,
the banks follow cautious measures while lending money to others. This core function of
a bank is performed by the Credit Department of the bank. In this case, the relationship
of bank and customer is that of the creditor and debtor.

Unlike personal loans where the person borrowing the funds and the collateral are not
likely to change, loans in the world of business require additional flexibility in order to
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meet the needs of the business as well as satisfy the requirement of the lender.
Accomplishing this seemingly difficult task is done by using a credit facility which is an
overall credit line that can be broken into multiple credit lines and collateral.

THE BANK USE EIGHT CS RULE WHILE GIVING LOAN

1. Credit (must be god)

2. Capacity(ability to pay)
3. Capital(money that going into business)
4. Collateral(assets that secure the loan)
5. Character(the person)
6. Commitment(ability and willingness to succeed)
7. Cash flow(can it support business debt and expense)
8. Conditions(economic, finance anything that effect the business)

LOAN AND CREDIT FACILITY

The district cooperative bank provided following loan and credit facilities

PERSONAL LOAN SCHEME:-

Under this scheme the loan is provided for fulfillment of personal and family needs by
taking care of refund capacity of applicant. The applicant can enjoy this facility by
following two types-

Term loan for maximum 5 years.

Renewal of Credit limit each year according to last years transactions.

ELIGIBILITY:-
Domicile of uttarakhand whose age is between 21to 55 years.
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Employee of Government/ self governed, semi government, leading banks, urban

cooperative bank/court, financial institution, education institutes etc.

The self employed person who earns fixed income and files income tax return also
having PAN card.

Organizer of standing committee.

LOAN/ CREDIT LIMIT:-

Maximum loan amount is 2 lacks.

8 times of Gross Monthly salary or rs.2 lacks whichever is less.

In the case of businessman/ professionals the calculation of average monthly salary is to

be done according to the IT return of past three years.

15 times of monthly salary of manager of selection committee or 2 lacks

Whichever is less

INTEREST RATE:-
According to the decision taken by bank the rate of interest is 16%.

RECOVERY OF LOAN:-
Maximum 5ve years, in the case of employee 5ve years or date of retirement whichever is
earlier.

The advance cheque is taken according to EMI installments of other banks.

FOR SECURITY OF LOAN:-

The bank requires the guaranty of 2 persons having creditability of loan amount who are
recognized by bank.

The collateral security is also accepted by bank in the case of non remunerated and
employer who having loan of more than 50000 and lake of contract of direct recovery.

DOCUMENTS REQUIRED FROM APPLICANT:-

Photo of applicant
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Residential proof

Two guarantors

Income certificate of applicant and guarantor

In the case of salaried employee the guarantee certificate passes by his employer.

LOAN FOR PURCHASE OR CONSTRUCTION:-

Under this scheme an applicant may apply for loan related to purchase of a plot,
construction of a building, purchase and repairs of building.

ELIGIBILITY:-

Domicile of uttarakhand whose age is between 21to 55 years.

Employee of Government/ self governed, semi government, leading banks, urban

cooperative bank/court, financial institution, education institutes etc.

The self employed person who earns fixed income and files income tax return also
having PAN card.

Standing committee admin

LOAN/ CREDIT LIMIT:-

Maximum loan amount is 15 lacks for loan related to purchase of a plot, construction of a
building, purchase and repairs of building.

INTEREST RATE:-

The interest rate is 10.50% in the case of normal purchase or repairs of plot and in the
case of purchase or repairs of commercial building, shops the rate of interest is 14%.

TIME PERIOD OF LOAN:-

This loan can be taken Maximum for 15 years.

FOR SECURITY OF LOAN:-

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The bank requires the guaranty of 2 persons having creditability of loan amount who are
recognized by bank.

DOCUMENTS REQUIRED FROM APPLICANT:-

Photo of applicant

Populated area plot strap which is on the name of applicant

Cost estimate and construction cost map which is approved by official engineer

Income certificate of applicant.

Two guarantors and their income statement with photo.

The nominal membership fee and deposit amount.

VEHICLE LOAN (for personal use):-

Under this scheme the loan is to be given for four wheeler (car, jeep etc.) for personal
use only.

ELIGIBILITY:-

Domicile of uttarakhand

Employee of Government/ self governed, semi government, leading banks, urban

cooperative bank/court, financial institution, education institutes etc.

The self employed person who earns fixed income and files income tax return also
having PAN card.

Standing committee admin

LOAN/ CREDIT LIMIT:-

The loan provides up to 5 lacks for purchasing of four wheeler for personal use.

INTEREST RATE:-

The rate of interest for four wheeler is 14%.

TIME PERIOD OF THE LOAN:-

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The time limit set by the bank authority for this kind of loan is maximum 7 years.

FOR SECURITY OF LOAN:-

The bank requires the guaranty of 2 persons having creditability of loan amount who are
recognized by bank.

DOCUMENTS REQUIRED FROM APPLICANT:-

Photo of applicant and his legal license.

Vehicle quotation and income statement of applicant.

Fixed assets for mortgage.

Two guarantors with their income statement and photo.

The nominal membership fee and deposit amount.

VEHICLE LOAN (for commercial use):-

Under this scheme the loan is provide for purchase vehicle for commercial use.

ELIGIBILITY:-

Domicile of uttarakhand

Employee of Government/ self governed, semi government, leading banks, urban

cooperative bank/court, financial institution, education institutes etc.

The self employed person who earns fixed income and files income tax return also
having PAN card.

Standing committee admin

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LOAN/ CREDIT LIMIT:-

The loan provides up to 10 lacks for purchasing of four wheeler for commercial use.

INTEREST RATE:-

The rate of interest for four wheeler is 14%.

TIME PERIOD OF THE LOAN:-

The time limit set by the bank authority for this kind of loan is maximum 7 years.

FOR SECURITY OF LOAN:-

The bank requires the guaranty of 2 persons having creditability of loan amount who are
recognized by bank.

DOCUMENTS REQUIRED FROM APPLICANT:-

Photo of applicant and his legal license.

Vehicle quotation and income statement of applicant.

Fixed assets for mortgage.

Two guarantors with their income statement and photo.

The nominal membership fee and deposit amount.

HOME LOAN:-

This loan scheme is for:

Purchase or construction of plot/building for the persons having regular income and loan
for take over the current loan account for different financial institutes.

Construction or purchase of building for Commercial use, business use, shops,

showrooms, warehouse etc.
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Repairing, expansion, and renovation of Home/ commercial building.

ELIGIBILITY:-

Domicile of uttarakhand who wants to purchase/ construct the building or house within
the district.

Employee of Government/ self governed, semi government, leading banks, urban

cooperative bank/court, financial institution, education institutes etc.

Business man who fills income tax return for last 3 years.

Normally the age limit for applicant is 50 years but it can be extent up to 55 years in
certain special cases.

LOAN/ CREDIT LIMIT:-

The loan limit is up to 15 lakes

Rs. 2 lakes in the case of repairs

The margin would be 20% up to 2 lakes and 25% in the case of above 2 lakes

There should be no margin in fee cost in the case of plot replacement and tere should
be repayment in 3 installments after fully utilization of his contribution of loan in the case
of construction.

INTEREST RATE:-

FIXED RATE OF INTEREST:

Up to 5 years 10%

From 5 to 10 years 10.50%

Above 10 years 11%

FLEXIBLE RATE OF INTEREST:

Up to 5 years 9.50%

From 5 to 10 years 10%

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Above 10 years 10.50%

TIME PERIOD OF THE LOAN:-

The time period for loan is maximum 15 years or date of retirement whichever is earlier,

DOCUMENTS REQUIRED FROM APPLICANT:-

Loan application form.

Photo of applicant and co applicant.

Copy of document of plot which is to be purchased or constructed.

Construction approval from office in the case of construction.

The cost estimation and approved map of building going to be constructed.

Salary statement in case of salaried applicant and income tax return of last 3 years in
case of non salaried applicant.

Domicile certificate of applicant.

EDUCATION LOAN:

This loan is for pursuing higher studies by their children.

ELIGIBILITY:-

Students who have got admission to some professional or other courses and whose
prospects of getting employment are very good.

LOAN/ CREDIT LIMIT:-

The maximum limit of loan is Rs. 3.00 lakes per borrower. 50 times of the gross monthly
salary of the applicant or Rs. 10.00 lakes whichever is less ensuring 35% take home
salary by the loanee after payment of installment of loan.

INTEREST RATE:-
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The rate of interest on such loan is 12%.

TIME PERIOD:-

5 years after the borrower gets employment or one year after completion of course
whichever is earlier.

DOCUMENTS REQUIRED FROM APPLICANT:-

Attested copies of documents for proof of age/date of birth and proof of residential
address.

Passport size photo of the applicant, co-obligates and guarantors.

Copy of mark sheets/degree certificates of previous academic qualifications.

Income proof/latest income tax return of parents/co-obligates, guarantors. (if any)

Details of collateral security along with valuation certificate of Govt. approved valuer (if
any).

Details/statements of Bank accounts held by the student applicant/co-

obligate(s)/guarantors (if any) for the last six months.

Copy of Passport/Visa, cost of air fare (documentary detail) in case of studies abroad.

COMMERCIAL/WORKING CAPITAL MORTGAGE/CREDIT ON PLEDGE

ELIGIBILITY:-

The eligible candidates who can apply for such loan are private firm, commercial,
partnership firm.

AMOUNT OF LOAN:-

The amount of loan that can apply by eligible candidates is maximum 25 lacks.

RATE OF INTEREST:-

The rate of interest which is charge by bank is 13%.

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TIME PERIOD:-

The time period for loan is not fix but renewal of time period can held according to
transaction made in between the month of July to June of previous year.

Margin:-

On mortgage =40%

On pledge =25%

DOCUMENT REQUIRED:-

passport size photo

Previous years account of firm.

TIN NO. Of firm.

Partnership deed of partnership firms.

Rent agreement in case of industry on rent.

Document of 2 assets on mortgage

Two guarantors.

OTHER LOAN FACILITY

All the loan schemes we have been seen above shows that cooperative bank provided
all kind of loans at nominal rate of interest. The cooperative bank provides loan only to
hits members hence if a person wants loan from that bank he has to

The district cooperative bank provides some other kind of loans also like

Loan for Self employment (@14%).

Loan for farm sector (@13%),

Loan for cooperative society/marketing society (@14%),

Computer loan (@8%),

Loan for farm sector (@13%)

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Loan for non farm sector (@14%)

Krishak mitra cooperative credit (@7%)

Cooperative society/marketing society credit limit (@ 14%)

National saving certificate/ kisaan vikas patra (@ 12%)

National saving certificate/ kisaan vikas patra (for staff)(@8%)

Loan to bank staff for computer (@12%)

Agriculture loan (up to 50000/-) (@12%)

STATE BANK OF INDIA

State Bank of India is the largest and one of the oldest commercial bank in India, in
existence for more than 200 years. The bank provides a full range of corporate,
commercial and retail banking services in India. Indian central bank namely Reserve
Bank of India (RBI) is the major share holder of the bank with 59.7% stake. The bank is
capitalized to the extent of Rs.646bn with the public holding (other than promoters) at
40.3%. SBI has the largest branch and ATM network spread across every corner of
India. The bank has a branch network of over 14,000 branches (including subsidiaries).

Apart from Indian network it also has a network of 73 overseas offices in 30 countries in
all time zones, correspondent relationship with 520 International banks in 123 countries.
In recent past, SBI has acquired banks in Mauritius, Kenya and Indonesia. The bank had
total staff strength of 198,774 as on 31st March, 2006. Of this, 29.51% are officers,
45.19% clerical staff and the remaining 25.30% were sub-staff. The bank is listed on the
Bombay Stock Exchange, National Stock Exchange, Kolkata Stock Exchange, Chennai
Stock Exchange and Ahmedabad Stock Exchange while its GDRs are listed on the
London Stock Exchange.

SBI group accounts for around 25% of the total business of the banking industry while it
accounts for 35% of the total foreign exchange in India. With this type of strong base,
SBI has displayed a continued performance in the last few years in scaling up its
efficiency levels.

Net Interest Income of the bank has witnessed a CAGR of 13.3% during the last five
years. During the same period, net interest margin (NIM) of the bank has gone up from
as low as 2.9% in FY02 to 3.40% in FY06 and currently is at 3.32%.

Management

The bank has 14 directors on the Board and is responsible for the management of the
 28

Banks business. The board in addition to monitoring corporate performance also carries
out functions such as approving the business plan, reviewing and approving the annual
budgets and borrowing limits and fixing exposure limits. Mr. O. P. Bhatt is the Chairman
of the bank. The five-year term of Mr. Bhatt will expire in March 2011. Prior to this
appointment, Mr. Bhatt was Managing Director at State Bank of Travancore. Mr. Bhatt
has more than 30 years of experience in the Indian banking industry and is seen as
futuristic leader in his approach towards technology and customer service.

Mr. Bhatt has had the best of foreign exposure in SBI. We believe that the appointment
of Mr. Bhatt would be a key to SBIs future growth momentum. Mr. T S Bhattacharya is
the Managing Director of the bank and known for his vast experience in the banking
industry. Recently, the senior management of the bank has been broadened
considerably.

The positions of CFO and the head of treasury have been segregated, and new heads
for rural banking and for corporate development and new business banking have been
appointed. The managements thrust on growth of the bank in terms of network and size
would also ensure encouraging prospects in time to come.

Shareholding & Liquidity (Till 30th Sept. 2012)

Reserve Bank of India is the largest shareholder in the bank with 59.7% stake followed
by overseas investors including GDRs with 19.78% stake as on September 06. Indian
financial institutions held 12.3% while Indian public held just 8.2% of the stock. RBI is the
monetary authority and having majority shareholding reflects conflict of interest. Now the
government is rectifying the above error by transferring RBIs holding to itself. Post this,
SBI will have a further headroom to dilute the GOIs stake from 59.7% to 51.0%, which
will further improve its CAR and Tier I ratio.
 29

Key Areas of Operations

The business operations of SBI can be broadly classified into the key income generating
areas

such as National Banking, International Banking, Corporate Banking, & Treasury

operations.

Types of SBI Advance Product

Home Loan

Educational Loan

Car Loan
 30

Personal Loan

Property Loan

Loan Against Shares\Debentures

SBI Home Loans:

Purpose

Purchase/ Construction of House/ Flat

Purchase of a plot of land for construction of House

Extension/ repair/ renovation/ alteration of an existing House/ Flat

Purchase of Furnishings and Consumer Durables as a part of the project cost.

Takeover of an existing loan from other Banks/ Housing Finance Companies.

Eligibility

Minimum age 18 years as on the date of sanction

Maximum age limit for a Home Loan borrower is fixed at 70 years, i.e. the age by which
the loan should be fully repaid.

Availability of sufficient, regular and continuous source of income for servicing the loan
repayment.

Loan Amount

40 to 60 times of NMI, depending on repayment capacity as % of NMI as under

Margin (Special Festival Season Offer)

Purchase/ Construction of a new House/ Flat/ Plot of land: 15% for loans up to Rs. 1 cr.,
20% for loans above Rs. 1 cr.

Repairs/ Renovation of an existing House/ Flat: 15%

 31

CAR LOAN:

Purpose
You can take finance for:A new car, jeep or Multi Utility Vehicles (MUVs)
A used car / jeep (not more than 5 years old). (Any make or model).
Take over of existing loan from other Bank/Financial institution (Conditions apply)

Eligibility

To avail an SBI Car Loan, you should be :

Individual between the age of 21-65 years of age.

A Permanent employee of State / Central Government, Public Sector Undertaking, Private

company or a reputed establishment or

A Professionals or self-employed individual who is an income tax assessee or

A Person engaged in agriculture and allied activities.

Net Annual Income Rs. 100,000/- and above.

Documents required
you would need to submit the following documents along with the completed application
form if you are an existing SBI account holder:

1 Statement of Bank account of the borrower for last 12 months.

2 2 passport size photographs of borrower(s).

3 Signature identification from bankers of borrower(s).

4 A copy of passport /voters ID card/PAN card.

5 Proof of residence.

6 Latest salary-slip showing all deductions

 32

7 I.T. Returns/Form 16: 2 years for salaried employees and 3 years for professional/self-
employed/businessmen duly accepted by the ITO wherever applicable to be submitted.

8 Proof of official address for non-salaried individuals.

EDUCATION LOAN:

A term loan granted to Indian Nationals for pursuing higher education in India or abroad
where admission has been secured.

Eligible Courses
All courses having employment prospects are eligible.

Graduation courses/ Post graduation courses/ Professional courses

Other courses approved by UGC/Government/AICTE etc.

Expenses considered for loan

Fees payable to college/school/hostel

Examination/Library/Laboratory fees

Purchase of Books/Equipment/Instruments/Uniforms

Caution Deposit/Building Fund/Refundable Deposit (maximum 10% tution fees for the
entire course)

Travel Expenses/Passage money for studies abroad

Purchase of computers considered necessary for completion of course

Cost of a Two-wheeler upto Rs. 50,000/-

Any other expenses required to complete the course like study tours, project work etc.

Amount of Loan

For studies in India, maximum Rs. 10 lacs

Studies abroad, maximum Rs. 20 lacs

 33

Interest Rates
(with effect from 1st June 2008)
For loans up to Rs.4 lacs - 11.75 % p.a. Floating
For loans above Rs. 4 lacs and upto Rs.7.50 lacs - 13.25 % Floating
For loans above Rs.7.50 lacs - 12.25% p.a. Floating
Processing Fees

No processing fee/ upfront charges

Deposit of Rs. 5000/- for education loan for studies abroad which will be adjusted in the
margin money

All loans should be secured by parent(s)/guardian of the student borrower. In case of married
person, co-obligator can be either spouse or the parent(s)/ parents-in-law

SBI SARAL PERSONAL LOAN:

Purpose

The loan will be granted for any legitimate purpose whatsoever (e.g. expenses for
domestic or foreign travel, medical treatment of self or a family member, meeting any
financial liability, such as marriage of son/daughter, defraying educational expenses of
wards, meeting margins for purchase of assets etc.)

Eligibility
You are eligible if you are a Salaried individual of good quality corporate, self employed
engineer, doctor, architect, chartered accountant, MBA with minimum 2 years
standing.

Loan Amount
Your personal loan limit would be determined by your income and repayment capacity.
Minimum: Rs.24,000/- in metro and urban centres

Rs.10, 000/- in rural/semi-urban centres

Maximum: 12 times Net Monthly Income for salaried individuals and pensioners subject
to a ceiling of Rs.10 lacs in all centres
 34

Documents Required
Important documents to be furnished while opening a Personal Loan Account:
From salaried individuals
Latest salary slip and Form 16

Interest Rates
3.25% above SBAR floating i.e. 15.50% p.a.

Processing Fee
Processing charges are 1-2% of the loan amount. This is amongst the lowest fees in the
industry. Processing fees have to be paid upfront. There are no hidden costs or other
administrative charges.

PROPERTY LOAN:

Purpose
This is an all purpose loan, i.e., the loan can be obtained for any purpose whatsoever. If
amount of loan is Rs.25.00 lacs and above then purpose of loan will have to be specified
along with an undertaking that loan will not be used for any speculative purpose
whatever including speculation on real estate and equity shares.

Eligibility
You are eligible if you are:

A. An individual who is;

a. An Employee or
b. A Professional, self-employed or an income tax assesse or
c. Engaged in agricultural and allied activities.

B. Your Net Monthly Income (salaried) is in excess of Rs.12,000/- or Net Annual Income
(others) is in excess of Rs.1,50,000/-.
The income of the spouse may be added if he/she is a co-borrower or a guarantor.

C. Maximum age limit: 60 years.

 35

Loan Amount

Minimum: Rs.25, 000/-

Maximum: Rs.1 crore. The amount is decided by the following calculation:

24 times the net monthly income of salaried persons (Net of all deductions including TDS)
OR

2 times the net annual income of others (income as per latest IT return less taxes
payable)

Margin
We will finance upto 75% of the market value of your property.

Interest
Term Loan 0.75% above SBAR. i.e.13.00% p.a. Floating

Security

As per banks extant instructions.

LOAN AGAINST SHARES \ DEBENTURES:

Eligibility
This facility is available to our existing individual customers enjoying a strong relationship
with SBI. This loan could be availed either singly or as a joint account with spouse in
'Either or Survivor'/ 'Former or Survivor' mode. It is offered as an Overdraft or Demand
Loan.

The facility is available at 50 select centers.

Salient Features:
Purpose

For meeting contingencies and needs of personal nature. Loan will be permitted for
subscribing to rights or new issue of shares / debentures against the security of existing
shares / debentures. Loan will not be sanctioned for (i) speculative purposes (ii) inter-
 36

corporate investments or (iii) acquiring controlling interest in company / companies.

Loan Amount
You can avail of loans up to Rs 20.00 lacs against your shares/debentures.

Documents Required
You will be required to submit a declaration indicating:

Details of loans availed from other banks/ branches for acquiring shares/ debentures.

Details of loans availed from other banks/ branches against security of shares/
debentures
 37

Research methodology

Research methodology is a methodology for collecting all sorts of information & data pertaining
to the subject in question. The objective is to examine all the issues involved & conduct
situational analysis. The methodology includes the overall research design, sampling procedure
& fieldwork done & finally the analysis procedure.

The methodology used in the study consistent of sample survey using both primary & secondary
data. The primary data has been collected with the help of questionnaire as well as personal
observation book, magazine; journals have been referred for secondary data. The questionnaire
has been drafted & presented by the researcher himself.

Sample Size:

Sample of 20 people was taken into study, and their data was collected

Sampling Technique:

To study the Project, a Simple Random Sampling technique is used.

Data Collection:

Collection of data is done by Secondary Data & through Questionnaire

i.e., Primary data was collected through Questionnaire.

Data Analysis:

After data collection, Im able to analyze customers views, ideas and opinions of farmers
towards garden tractors.

Data Interpretation:

Interpretation of data is done by using statistical tools like Pie diagrams, and
also using quantitative techniques (by using these techniques) accurate
information is obtained.

Classification & tabulation of data:

The data thus collected were classified according to the categories, counting
sheets & the summary tables were prepared. The resultant tables were one
dimensional, two dimensional.
 38

DATA ANALYSIS AND

INTERPRETATION

Analysis of data

GRAPHICAL REPRESENTATION OF DATA

Q1.Which Bank is more Accessible ?

Ans. SBI

SBI- 90%

Cooperative bank-10%

Accesibility

sbi
dcb
 39

Q2. Which Bank provides better loan Services ?

Ans.SBI

SBI 74%

Cooperative Bank 26%

Sales

sbi
dcb

Q3. Which Bank is more lenient about loan recovery?

Ans. Cooperative bank

 40

Cooperative bank- 80% SBI- 20%

Sales

dcb
SBI

Q4. Which Bank do you prefer for loans?

Ans. SBI

SBI 65 %

Cooperative bank 35%

 41

Sales

sbi
dcb

Q5. Which Bank do you think is more Beneficial to farmers and small
rural businesses ?

Ans. Cooperative Bank

Cooperative Bank- 60%

SBI 40%
 42

Sales

SBI
DCB

Conclusion

Unlike commercial banks that enter a business for the sole purpose of making a profit,
cooperative banks look to make profits but also strive to provide additional benefits to the
members of the cooperative association.
 43

Hence, they offer slightly better rates than commercial banks. Moreover, the terms and
conditions they offer are more flexible compared with commercial banks.

Although the Sate bank provides a lot of different services and is more accessible
compared to Cooperative Banks.

A lot of customers prefer Cooperative Banks because of the ease of formalities and
getting a loan and the leniency of Cooperative bans in terms of recovery.

Questionaire

Q1.Which Bank is more Accessible?

SBI Cooperative Bank

 44

Q2. Which Bank provides better loan Services?

SBI Cooperative Bank

Q3. Which Bank is more lenient about loan recovery?

SBI Cooperative Bank

Q4. Which Bank do you prefer for loans?

SBI Cooperative Bank

Q5. Which Bank do you think is more Beneficial to farmers and small
rural businesses?

SBI Cooperative Bank

BIBLIOGRAPHY

Annual report of the district cooperative bank.

Documents provided by both bank.

Various circulars issue by the banks.

www.wikipedia.com

www.docstoc.com
 45

www.cooperativebank.co.uk

www.citeman.com

www.ehow.com

www.nabard.com

www.rbi.org.in

https://www.onlinesbi.com