A STUDY OF CUSTOMER LEVEL

SATISFACTION REGARDING NON

AGRICULUTURAL LOANS PROVIDED BY
PSCB
OBJECTIVES
1. To study the loans and advances given
by bank.
2. To study detail procedure of lending
regarding different forms of financing
of cooperative banks.
3. To know the satisfaction level of the
customers regarding the non
agriculture loans
INDUSTRY
INTRODUCTION
 The financial sector is in the process of rapid
transformation. Reforms are continuing as part of the
overall structural reforms aimed at improving the
productivity and efficiency of the economy. The role of an
integrated financial infrastructure is to stimulate and
sustain economic stability. The US$28 billion Indian
financial sector has grown at around 15% and has display
stability for the last several years, even when other
markets in the Asian region were facing crises.
 The Reserve bank of India has successfully introduced a
regime where interest rates are more in line with market
forces. Financial institutions have combated the reduction
in interest rates and pressure on their margins by
constantly innovating and targeting attractive consumer
segments. Bank and trade financiers have also played an
important role in promoting foreign of the country.
DEFINITION & FUNCTION OF
BANK
 WHAT IS BANK? 
To a layman, a bank is one
that accepts deposits from
public and lends money. Few
DEFINATIONS of bank are
discussed below:-
 THE CONCISE OXFORD
DICTIONARY 
“Bank collects money from
those who have it to spare or
who are saving it out of their
income, and
It lends this money to
those who require it.”
 This definition brings out the
two important functions of a
banker namely, acceptance
of deposits and lending.
 
PHASES OF BANKING
Phases of Banking

Foundation Phase Consolidation

Expansion Phase Reforms Phase
Phase
COOPERATIVE BANK
 
 The cooperative bank has history of almost 100 years. The
cooperative banks are an important constituent of the Indian
Financial System, judging by the role assigned to them, the
expectations they are supposed to fulfill their number and the
number of offices they operates. The co-operative movement
originated in the West, but the importance that such banks
have assumed in India is rarely paralleled anywhere else in
the world. Their role in rural financing continues to be
important even today, and their business in the urban areas
has increased phenomenally in the recent years mainly due to
the sharp increase in the number of primary co-operative
banks. While the co-operative banks in rural areas mainly
finance agricultural base activities including farming, cattle ,
milk, hatchery , personal finance etc. along with some small
scale industries and self-employment driven activities, the co-
operative banks are quite forward looking and have
developed sufficient core competencies to challenge state
and private sector banks.
3 TYRE SOCIETY
PUNJAB STATE
COOPERATIVE BANK
The Punjab State Cooperative Bank was
established on 31st August, 1949 at Shimla
vide registration No. 720 has a principle
financing institutionof the cooperative
movement in Punjab.
In the cooperative Banking structure, the
position of the Punjab State Cooperative
Bank is extremely important as the whole
credit system revolves around it.This bank
ensures that its member central cooperative
banks follow sound banking practices &
observe strict financial discipline
STRUCTURE OF
COOPERATVE BANKING
The cooperative banking structure in
India is divided into 4 components:
a) Primary cooperative credit society
b) Central cooperative banks
c) State cooperative banks
d) Landing development banks
ACTIVITIES

ACTIVITIES SOURCES OF FUNDS

1. NON-FARM SECTOR . OWN FUNDS:
2.AGRICULTURAL&   .DEPOSITS
DEVELOPMENT BORROWINGS FROM
STABILIZATION FUND NABARD
3. EMPLOYEES WELFARE
FUND
INVESTMENT OF FUNDS

STATUTORY REQUIREMENTS
 LOANS & ADVANCES.
1.SHORT TERM AGRICULTURAL ADVANCES.
. SHORT TERM AGRICULTURAL RECOVERY
(DCCBs).
2.REVOLVING CASH CREDITS.
3.NON FARM SECTOR LOANS
NON-FARMINGSECTOR
OF BANKING
 During the early phase Punjab State Cooperative Bank deals in
agriculture loan only but to diversify its loaning portfolio the
Punjab State Cooperative Bank entered in the field of Non
Agriculture advances During the year 1992- 93.
 Initially four Central Cooperative Banks namely Jalandhar,
Nawanshahr, Kapurthala and Ludhiana were permitted by the
Registrar Cooperative Societies. Punjab to undertake financing
of Non Agricultural activities up to Rs. 50,000/- in a single case
(composite loan). Later on all the Central Cooperative Banks
were allowed to composite loan(block capital and working
capital up to Rs. 62500/-
 Under the loaning portfolios, various Non Agricultural
Schemes were introduced by the Punjab State
Cooperative Bank and these are as following:- 
 revolving cash credit to farmers
 two wheeler loans to farmers
 rural godown scheme
 personal loan scheme
 cash credit to businessmen and traders
 shekari bank bima yogna
 second hand car loan
 kisan credit card scheme.
 small road transport operation shekari education loan
facility consumer durable loan:
 to salary earners
 to non salary earners
 non farm sector loan
 loan against national saving certificate
TOPIC UNDERTAKEN FOR
THIS STUDY
 
 During the training period, I concentrated only on five
kinds of loans, which are pervaded by the Punjab state
cooperative bank, Chandigarh. The reason being that
the branch has provisions for only these five finds of
loans, thus is providing these non agricultural loans
only. A detailed study of the procedure for applying to
these loans, documents, required and other formalities
relate to these loans were studied. These loans are
stated as under: 
 House Building Loan
 Personal Loan
 Consumer Loan
 Two Wheeler loan
 Education Loan
What kind of loan have you taken from
organization?
Kind of Loan No. of Respondent Percentage(%)
INTERPRETATION: House loan 16 32%
Personal loan 15 30%

Table reaveals that Consumer loan 6 12%

Educational loan 8 16%
16 respondents have Vehicle loan 3 6%

taken house loans, 15 Other 2 4%

have taken personal

loans and less people
prefer consumer,
educational and
vechile loans.
 What is the amount of
loan taken?
INTERPERTATION: Loan Amount
Less than 20,000
No. of Respondent
4
Percentage (%)
8%

Table reveals that 8 % 20,000-50,000 10 20%

50,000- 1 lac 6 12%
people prefer loan less More than 1 lac 30 60%

than 20,000,
20 % respondents
prefer 20,000 to
50,000,12 % prefer more
than 1 lac and 60% of
the respondents prefer
more than 1 lac.
 What is the term of
loan ?
INTERPRETATION:- Term of Loan
Less than 1 year
No. of respondent
6
Percentage(%)
12%

Table shows that 64 % 1 to 3 years

More than 3 years
10
32
20%
64%
respondents take loan
for more than
3 years, 20 % take loan
for for 1 to 3 years and
12% take
loan for the period of
less than 1 year .
 4.What is the rate of interest
you paying?
INTERPRETATION:
Table shows that 48% of Rate of interest paid by the No. of Respondent
customers
Percentage (%)

the respondents are Less than 9% 2 4%

paying rate of
9% to 12% 24 48%
More than 12 % 24 48%

interest 9 to 12 % and
more than 12 % and 4 %
of the Respondents pay
less than 9 % of rate of
interest.
How many time have you taken
loan before? 
No. of respondent Percentage (%)
No. of times loan taken

INTERPRETATION: Only once 29 58%

1 to 3 times 16 32%

Table reveals that 58 More than 3 times 5 10%

% of the respondents
took loan once , 32 %
of the respondents
took loan for 1 to 3
times and 10 % took
loan for more than 3
times.
 
to take loan from the
institute?
Reason for taking loan No. of Respondent Percentage (%)
Reasonable rate of interest 6 12%
INTERPRETATION:
More schemes 5 10%
Table reveals that 38 Less formalities 17 34%

% take loan because Easy repayment

Any other
19
3
38%
6%
banks provide easy
payment,34% take
loans because of less
formalities and other
respondents take loan
because of reasonable
rate of interest, more
schemes .
 What is the average time taken for the processing of the
loan?
Average time forNo. of respondent Percentage (%)
INTERPRETATION:- processing of loan

Table reveals that Less than 7 days

Between 7 to 14 days
34
13
68%
26%

68% respondents More than 14 days 3 6%

says that average

time taken for
processing of the
loan is less than 7
days, 26% says that
it takes 7 – 14 days
and 6 % says that it
takes more than 14
 Are you satisfied with the amount & period of
INTERPRETATION:
installment? No. Of respondent Percentage (%)

Table reveals that Yes

No
34
6
68%
12%

68% are satisfied

Can’t say 10 20%

with the amount

and period of
installement ,12 %
are not satisfied
and 20 % can’t
say.
satisfied with the
following factors? 
 How would you rank the
facility provided
INTERPRETATION:
by the bank?
Rank the facility No. of respondent Percentage (%)

Table shows that 60% of Above average 16 32%

Average 30 60%
the respondent says that Below average 4 8%

facility provided by the

bank are average, 32% say
that its above average and
8% says that its below
average.
 How would you rank the
customer service of the
bank?
INTERPRETATION:
Table shows that 52% of the Rank the customer servicesNo. of responedent Percentage(%)

respondents says that Excellent 12 24%

customer service of the bank Good 26 52%

Average 12 24%
is good,24% says that it is Poor 1 2%

excellent and another 24 %

says its average and only 2 %
says its poor.
 If you are in need of loan in future from which in
banks would you prefer to take loan?
INTERPRETATION:
Table shows that 56 % of Preferable banks in future No. of respondent Percentage (%)

the respondents wil Public banks 7 14%

prefer loans from co-

Private banks 15 30%
Cooperative bank 28 56%

operative banks, 30 %
from the private banks
and 14 % from the public
banks
INTERPRETATION:
Do you
The think the
bank is bank is able
able toto reach upto your satisfaction level?
reach upto the
satisfaction level of
74% of its employess
while the remaining
26% are not satisfied
by the services
provided by the bank.
Hence, the bank should Yes
No.of respondent
37
Percentage (%)
74%

work upon to increase No 13 26%

the customer
satisfaction level.
Would you like to refer the
bank to your friends and
relatives?
Bank refer to others No. of respondent Percentage (%)
Always 39 78%
Sometimes 9 18%
Never 2 4%
PROBLEMS FACED BY COOPERATIVE BANKS
1. The cooperative financial institution is facing severe problems which
have restricted their ability to ensure smooth flow of credit and
also in meeting the requirement of the farming
Limited ability to mobilize resources.
Low Level of recovery.
High transaction of cost.
Administered rate of interest structure for a long time.
 
2. Due to cooperative legislation and administration mandates Govt
interference has become a regular feature in the gay –to-day
administration of the cooperative institution. Some of the problem area
that arise out of the applicability of the cooperatives legislative are:
• Deliberate control of cooperatives by the government.
• Nomination of board of director by the government.
• Participation of the nominated director by the government.
• Deputation of government officials to cooperative institution etc.
 3. The state cooperative banks are not able to formulate their respective
policies for investment of their funds that include their surplus
resources because of certain restrictions.
 4. Prior approval of RBI is mandatory for opening of new branches of
SCBs. The SCBs are required to submit the proposal for opening of new
branches to RBI through NABARD, whose recommendation is primarily
taken into consideration while according permission.
 5. There is the condition of government guarantee by NABARD while
sanctioning credit limits to SCBs and DCCBs but no stage the
commercial bank and regional rural banks are called upon to execute
any Govt Guarantee while sanctioning reference by NABARD. 
 6. On the number of occasions institute like food cooperation of India.
Indian Oil Corporation, Hindustan Petroleum etc. Have issued instruction
in writing that demand draft/ pay order should be obtained from the
nationalization/ schedule bank.
  7. SCBs does not provide loan directly to farmers due to which they
cannot keep pace the changing requirements of the farmers.
FINDINGS &
UGGESTOIONS
FINDING
 Majority of the respondent
were having housing loan
from this bank.
 Most of the people prefer to
take long term loan which is
more than 3 years.
 Easy repayment and less
formalities are the main
factors determining
customer’s selection of
loans.
SUGGESTIONS:
 The bank should adopt the
modern methods of banking
like internet banking, credit
cards, ATM, etc
 The bank should plan to
introduce new schemes for
attracting new customers and
satisfying the present ones.
 The bank should improve the
customer services of the bank
to a better extent