Gold Loan About Samarth Finance

A STUDY OF GOLD LOAN AT SAMARTH FINANCE CONSULTANT
CHAPTER NO I
INTRODUCTION
1.1 INTRODUCTION
Gold loan or loan against gold is the easiest and quickest way for servicing your
financial needs. To avail a gold loan, all you need to do is pledge your gold
ornaments with us and we would provide you with a loan amount as per the market
value of your gold. Unlike other loans, gold loan does not require you to provide
any income or salary proof. Moreover, it has comparatively lower interest rates;
requires lesser documentation, and hence is processed in lesser time. We at
Samarth Finance provide maximum loan against your gold at lowest interest rates.
We have a strong presence Pan-India and have serviced a large number of
customers in a very short span. We offer different types of schemes as per your
requirement and convenience.
1.1.1 What is Gold Loan?

As the name suggest its loan against Gold. It’s the most convenient way to receive
cash in no time from any NBFC / Bank by pledging your Gold
ornaments/Coins/bars/ Exchange traded funds ETF/ SBI gold certificates etc., this
is one loan product which comes with minimal documentation & no processing
time in short it’s over the counter product. Product is designed in a way it ensures
hassle free process for the customer & loan availed can be put to any use. Loan
amount eligibility is evaluated basis on the Gold value banks usually fund 70-
80% of the gold market value & on repayment of the loan gold deposits are
returned back to the customer. This loan comes much cheaper than personal
loan as it’s a secured product & rate of interest ranges between 11.5-24% per
annum. Rate of interest is decided on two factors risk criteria ( What % of market
value of Gold you are availing loan if its 90% of the Gold market value then
interest charged will be higher & vice a versa for lower loan amount as compared
to gold value) & customer relationship with the bank.
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1.1.2 Features of Gold Loan:

 Fastest loan disbursal
 Most convenient way to arrange funds
 Low Documentation
 No pre-payment charges
1.1.3 Process for availing Gold Loan :

It’s a four step process:
 Loan Valuation: Banks carries out valuation of Gold & decides on the
loan amount eligibility.
 Documentation: Usually banks/NBFC takes photo id & residence proof of the

applicant.
 Signing of Agreement: Terms & condition of the loan are signed by the loan
applicant.
 Loan Disbursement: Cheque is handed over to the customer over the counter
after signing agreement at same time.
Loans against gold jeweler grows the business of loans against gold jewelry has
become a priority for many financial institutions. Many have chalked out mega
retail spread plans, especially in Tier-III and Tier-IV cities, to ensure more gold
loans, especially to farmers. Manappuram General Leasing and Finance and The
Muthoot Group, the leading non-banking finance companies in this sector, have
announced addition of 500-600 new branches by the next year. Private sector
banks, like the country’s largest co-operative one. The Saraswat Co-operative
Bank Ltd (SCB), and HDFC Bank, have plans to intensify facilitation of loan
against gold jewellery. SCB is currently giving such loans through 10 retail
branches, which it plans to increase to 100 by the end of 20111-12. HDFC also
proposes to increase its footprint in this segment, on a big scale.
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“Retail gold loan against jewellery, a small part of our Rs 25,000-crore business,
will prosper in the coming years as we plan to lay more emphasis on this sector.
In the next five years, we want our business to grow to Rs 50,000 crore, with
proportionate increase in the gold loan segment,” said Ekanath K Thakur,
chairman of SCB, which offers a gold loan at 13.5 per cent for a one-year period.
Traditionally, farmers mortgage gold to avail money to buy high-yielding seeds
during the kharif and rabi sowing seasons.
They repay the loan during harvesting seasons by selling their output. So, without
losing any inherent asset or opportunity to produce high-agri output, they get
additional income through extra yield after borrowing funds from organised and
unorganized financiers. Kerala-based Manappuram has grown phenomenally in
the past two-three years. The loan book position surged nearly 150 per cent to Rs
6,000 crore this year. “There is enough scope for more and more players in this
sector to create awareness about this short-term loan, in which we offer up to 90
per cent of the value of jewellery, at up to 18 per cent of interest. We charge no
pre-payment penalty. Also, interest is charged only for the period the loan is
availed for. Hence, entry of more players will encourage customers to opt for this
short-term loan without hassles,” said V P Nandakumar, chairman of
Manappuram, which has 12 per cent of the market in the overall gold jewellery
loan business.
1.2 OBJECTIVES OF THE STUDY

This study is descriptive in nature and aims to deepen the understanding of the
Indian gold loan market. The study also tries to know the difference between the
conventional personal loans and gold loans. Through this study, an attempt is made
to know the various purposes for which clients acquire gold loans.
 To study the loan schemes available in the bank.
 To study the Processing charges of bank.
 To study the disbursement policy of the bank.
 To study the Interest rate charge by bank.
 To study the loan repayment of the bank.
 To know about the policy regarding Star Gold Loan Scheme.
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Specifically the study tries:

 To gather knowledge about the Indian gold loan market
 To find the reasons for choosing gold loans over conventional personal loans
 To know the purposes for availing gold loans by the respondents.
 To ﬁnd out the competitive position of Samartha, and the ways and means to
improve on the service by Samartha Finance Limited.
 To study about consumer awareness& satisfaction, about operational Services
& procedures of Samartha ltd.
 To understand the satisfaction level of clients with Samartha regarding service
provided by staff.
1.3 LIMITATION OF THE STUDY:-

 Time limit is a major constraint. This research reflects on individual customer in
Chamber only. So findings and suggestion given on the basis of this research
cannot be extrapolated to the entire population.
 Sample size of the questioner is 80 which are very small that is not enough to
study the awareness of consumer of that particular above area.
 Respondent are not sincere and care full to fill up the questioner so we cannot
find right solution.
 As per the company rules many information was not disclosed.
1.4 RESEARCH METHODOLOGY

Research as a term stand for “Systematic investigation towards increase sum of
knowledge”. Research methodology are the methods involve in gathering
meaningful data
 Data collection:
The data has been collected from various sources and can be categorized into
two main fields mainly…
1. Primary data
2. Secondary data
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 Primary data:
Primary data is the collection of data which is gathered from precise sources and
are accurately maintained. Primary data can be collected by
1. Interview
2. Universe –Bharsinghi
3. Sample size (50 )
 Secondary data:
It is the type of data which is dependent on primary data and other sources.
Secondary data can be collected by
1. Published data
2. Banks annual report.
3. www.bankofindia.co.in
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CHAPTER NO. II
THEATRICAL BACKGROUND
2.1 THEATRICAL BACKGROUND

 Why a gold loan
Gold loan as a concept is already popular in the South India through many
organized and un-organized lenders. South-based companies are looking to
expand beyond South India with branch expansion and heavy advertisements.
“South-based gold loan companies like us are expanding into North India as
gold has now become a lifestyle product and most of the Indians buy gold. In
times of need one can get a loan against gold within minutes with minimum
formalities,” says Muthoot Pappachan Chairman & Managing Director John
Muthoot.
Commodity experts feel that since gold as an asset class earns profit only when
sold, it makes sense to use the metal to take a loan in times of emergency. Gold,
unlike equity, does not earn any dividend. If you do not wish to sell it, but need
money urgently, gold loan can be a good option. One of the best features of a
gold loan is that you can get the loan on the same day itself. Also the interest
rate you pay on the loan is comparatively lower than a personal loan and
chances of getting the loan are higher. Comparing personal loan and gold loan,
Manappuram Finance Managing Director I. Unnikrishnan says, “in times of
emergency you need a loan almost immediately with minimum documentation,
and without any evaluation of your loan repaying capacity and if you have gold
it can be a better option compared to a personal loan where all these factors
come into play.” A number of public sector and private banks and non-banking
finance companies (NBFCs) are offering gold loan.
 Which lender to approach

Till now gold loans have been a bastion of small-time money lenders and
NBFCs. But with banks looking at expanding the secured loan portfolio as
against the unsecured personal loan, the options for the borrowers are aplenty.
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Most of the gold loan business are in the unorganized sector and NBFCs.
Experts caution borrowers to make proper inquiry about the pedigree and the
track record of the lending agency before pledging gold for a loan. Says author
of ‘Retire Rich’ PV Subramanyam, “try a public sector bank for taking gold
loan as gold loan is a secured loan. Banks are well regulated, are sound and
carry lesser risk compared to a non-banking finance company.”
 Interest rate & tenure

When was the last time you brought your negotiation skills into play? It’s time
to use them now if you are looking for a gold loan. There are various parameters
on which the tenure, interest rate and the level of negotiation would depend —
like whether the gold is hallmarked or not, the tenure of the loan amount and
what percentage of the value of the gold you would like to borrow.“If you have
a good quality hallmarked gold and the value of the gold you want to borrow is
60 % or less you may negotiate for lower interest rate from the lender.”
Typically, the tenure on a gold loan falls between, one year to two year with
some lenders even extending loan for three years. The documents required are
residential proof and a recognized photo identity for example a PAN card, voter
Identity card or driving license. The banks may take an hour to a day to extend
the gold loan. On the other hand, NBFCs like Muthoot Finance and
Manappuram, going by their advertisements, extend the loan within minutes.
The average rate of interest falls between, 11 % to 14 %. However, some
NBFCs are charging a much higher interest rate of 20-24 %.
 What are the inherent risks?

Even though the gold loan may seem to be an easy option to borrow money
there is a word of caution from the financial experts who advise that taking a
gold loan for buying luxury items or for consumption purposes may not be a
great idea. Experts hence advise to go for a small loan and for a small tenure.
Only if you think you can repay the loan should you go for the gold loan.
Though gold loan lenders fall under the Reserve Bank of India's supervision,
there’re experts who doubt whether non-banking finance companies lending
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against gold are as strictly regulated as banks. Financial experts advise to take a
gold loan in small sums and make sure that you have enough liquidity to repay
the loan and get the gold back. The gold you have pledged with the lender is
usually auctioned 12 months after the due date of repayment has lapsed.
 The product is packed with features such as:

 Hassle-free quick processing of loans.
 Simplified paperwork.
 Easy payment options.
 Attractive interest rate.
Gold loans (or deposits) are not backed by cash collateral and, in some cases, are
not backed by non-cash collateral. However, the gold may be on-sold by the
borrower. With Gold Loan, you can get an instant loan against your gold jewellery
and ornaments. The procedure is simple, documentation is minimal and approval is
quick.
 Features & Benefits

 You can avail Loan upto Rs.20,00,000 & upto 80% of value for any purpose
 Safety & Security of your Gold Jewellery
 Loan processed in 30 Minutes
 ATL - Anytime Liquidity
 No EMI, Service only Interest and enjoy the Loan facility
 Lower Interest Rates
 Simple documentation and fast processing.
 What is a Loan against Gold?

The majority of us have some gold – whether this is in the form of jewellery or
pure other ornaments of gold (including coins). You can use this gold as a
security to avail a loan very quickly, from specialist lenders and banks.
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 How does it Work?

You can either apply online or go to your nearest gold loans branch, and your
gold items will be valued. You will then be able to avail a loan based on the
value of your gold items. The gold jewellery or ornaments must belong to you
or someone in your family. Because you are providing security, the lender will
not need a long time to consider your application. Usually you will gain
approval for the loan very quickly.
 What are the Loan Tenures?

Most loans against gold are between 6 months and a year, but the tenures may
vary according to the lender or bank you use. Some gold loans are a minimum
of 1 year, and up to 6 years – just make sure you remember to check when you
carry out your loan search and comparison.
 Are there any Fees?

There may be fees on a gold loan, such as processing fees or administration fees.
Make sure you enquire about these in advance, so that you can plan them into
your budget.
 What Happens if I Cannot Repay the Loan?

Because you are using your gold jewellery or ornaments as a security on this
loan, you risk losing them if you are unable to keep up with the loan
repayments. This could be difficult because many items of jewellery carry
personal or sentimental value. Therefore, remember to plan your loan very
carefully into your everyday life and ask yourself if you will be able to afford
the EMIs over the full tenure of the loan.
 Am I Eligible?
To get a gold loan, you must prove your ID, you may need to have a minimum
age (though this may vary according to the lender) and you will need to prove
your address / residence. The criteria of what kind of borrowers may apply do
vary according to lender / bank, so check this in advance as well. You may need
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to prove that you are salaried or professional but some lenders can take on
borrowers who are not as financially secure.
2.2 SAMARTHA FINANCE GOLD LOAN SCHEME

2.2.1 ADVANTAGES OF GOLD LOAN:-
 Gold loan doesn’t demand any certificate to show your salary or income and
even no credit card history is required. Thus even unemployed and non-working
people can go for gold loan.
 Unlike any other unsecured loan, gold loan doesn’t require many papers, only
few documents such as ID proof and address proof is enough to avail for such
loan.
 One of the main advantages of gold loan is its low interest rates. Usually loan
over gold is provided at the interest of 15-21% per annum and this is quite low
compared to personal loans available at interest rates of 15-26% per annum.
 In rural areas Agricultural loan against gold is also available for agriculturist at
very nominal rate of Interest of 7%-8%, proof of agricultural document needs to
be provided.
 Gold loan is the most simple and convenient forms of loan because here all you
need to do is pledge your gold with a bank or finance company and get up-to
80% of the market value of the gold as a loan.
 Borrower will be given an option to pay only interest during the entire term and
at the end of the tenure you can pay complete borrowed amount in single shot.
 In case of gold loan processing time is very less. Usually banks take just few
hours to complete the process where as in case of NBFC’s a few minutes are
enough for the same. So for immediate financial help this is the best option.
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 No depreciation of underlying asset: Unlike other secured loans, the underlying

asset in a gold loan is not subject to depreciation. At the same time, unlike land,
it is a liquid asset and the transaction costs involved when enforcing the security
are minimal.
2.2.2 CHARGES ASSOCIATED WITH GOLD LOAN:-

 Loan processing charge:
While some of the service providers may waiver these charges, some banks do
charge a processing fee.
 Valuation Charge:
These are the charges to be paid to the valuator. These charges are also specific
to the service provider and those having in-house valuators do not charge any
extra amount for valuation.
 Late payment penalty:
Most of the service providers charge late payment penalty and this too can vary
from one institution to the other.
 Pre-payment penalty:
Most of the service providers do not charge a penalty for repayment before the
loan tenure is over. But some may still have this charge in place. It is advisable
to check with the loan provider before taking the loan. These charges could
change the amount that you may finally receive.
 Advice on Gold Loans:-

Go for gold loan if you are confident of returning the money in time otherwise,
you will be penalized and all your pledged gold will come under the control of
bank or finance company from where you take a Gold Loan. While opting for
gold loan check the interest rates in various banks and private finances. If you
go for private lenders then better to go with one who has been in this business
for many years.
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2.2.3 RBI's gold loan regulation for NBFCs

The Reserve Bank of India (RBI) on Monday tightened regulations governing non-
banking finance companies (NBFCs) lending against gold jewelry. The new rules
include strict documentation for high value loans against gold and prohibition on
misleading advertisements by NBFCs such as offering availability of gold loans in
a matter of 2-3 minutes. The guidelines are broadly based on the January
recommendations of an expert panel set up by RBI, headed by K.U.B.Rao. The
RBI, however, did not accept the recommendation of the panel for higher loan-to-
value (LTV) ratio on gold loans.
This means for gold worth Rs100 offered as collateral, lenders can give loans up to
Rs60. Further, NBFCs should also proportionally value while deciding the LTV on
jewelry of lower purity of gold, RBI said. Also, NBFCs financing against the
collateral of gold must insist on a copy of the PAN card of the borrower for all
transaction above Rs5 lakhs and all high value loans of Rs 1 lakh and above must
only be disbursed by cheque, RBI said. The apex bank has clearly stipulated that
NBFCs should not issue misleading advertisements like claiming the availability of
loans in a matter of 2-3 minutes.
2.2.4 GOLD LOAN PROCESS

1. Customer approaches the branch
2. Interaction with CCE
3. CCE Collecting Gold
4. Appraisal of gold
5. In 5L and above, conversation with BM
6. Cash handling to customer
2.2.5 OPERATIONAL LEARNING:

Role of staff engaged in a normal branch process:
 Security Guard
 Customer care executive
 Value 1 and 2
 Branch Manager
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2.2.6 JOB OF SECURITY GUARD:

First and foremost things are that security guard needs to be dressed properly.
 Greet the customer
 Ask customer the reason for visiting branch
 Ask customer to enter details in visitor register
 Lead the customer to branch
2.2.7 ROLE OF CUSTOMER CARE EXECUTIVE:

 Handling inquiries from customers regarding loans against gold.
 Helping customer to solve his / her all query.
 Explaining terms and conditions of the product to the customer.
 Counting jewel items in front of customer and taking his/her all query.
 Ensuring all the KYC documents are verified with original.
 Ensuring all the details are filled up in customer detail form.
2.2.8 ROLE OF VALUER 1 AND VALUER 2:

 Checking the jewelry with accuracy.
 Testing gold with two methods which includes , skin test and salt test.
 Finding out the purity and making appraisal sheet.
 Working out on loan amount with mutual conversation.
 Every gold jewelry item must be counted and matched with the appraisal
sheet before inserting it in gold packet.
 Each and every details mention on packet must be filled in with
accuracy.
 It is important to keep gold packet in serial order in vault
2.2.9 STEPS TO BE FOLLOWED WHILE APPRAISING GOLD

 Sort gold items according to solid, chains and others.
 Confirm the purity with the help of touch stone and acid test.
 Note down result in following format:
 Pass out gold to value 2 for re- valuation
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2.2.10 STEPS TO BE FOLLOWED WHILE SEALING OF GOLD

 Fill in the details on the packet
 Insert the gold and appraisal sheet in the packet
 Fix the sticker
 Sign on the sticker (BM and value 1)
 Affix the seal on sticker
 Keep the gold packet in vault in serial order mentioning the GL number Name
of item Gross weight Net weight Per Gram Rate Amt
2.2.11 ROLE OF CASHIER:

 To make sure that cash is taken from vault strictly as per cash denomination
entered in the system.
 Ensuring that cash is counted twice before giving it to customer.
 To make sure that cash transaction is done in front of cctv camera.
2.2.12 STEPS TO FOLLOW AT THE TIME OF CASH HANDLING:

 Joint custodians open the vault room.
 Take cash as per cash denomination entered in system
 Pass out the same to cashier to re-count.
 Handover the cash to customer in front of CCTV camera.
2.2.13 CASE 1: CUSTOMER DOESN’T HAVE VALID DOCUMENTS (KYC

NORMS)
 Do not violate KYC norms.
 A valid address proof must be taken.
 In this case rent agreement is must as a address proof.
 One should not process the loan if customer doesn’t have the proof of current
residential flat.
2.2.14 Case 2: customer doesn’t have address proof (KYC norms)

 Do not violate KYC norms.
 In this case address proof is to be taken
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 One should not process the loan if customer doesn’t give you the address proof
at the same moment.
 Do not deny of giving loan but you can always say your customer to come up
with all the documents so, you will process the loan in 5 min.
2.2.15 CASE 3: FRAUD CUSTOMER

 Inform your customer in case of broken jewelry.
 Customers behavior must be noticed
 In case of doubt , ask the customer about the reason for taking loan
 Telephonic verification must be done at the same time
2.2.16 CASE 4: BRANCH VISIT BY SENIOR

1. Part release:
o In part release customer has the facility to remove his / her some of the
jewelry
o Customer can also change the scheme with remaining jewelry
o When customer comes for interest payment make sure that it doesn’t
take much
o time
2. Final release:
o At the time of final release kindly check the borrower copy
o Open the gold packet in front of customer
o Collect cash before handling gold to customer
o Every transaction of cash must be done in front of CCTV camera
3. Role of branch manager:

o Branch manager has to explain customer about RTGS process
o Convince customer to opt for RTGS/NEFT mode of cash transfer
o Explain customer about the advantages of RTGS/NEFT process
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2.3 STAR MAHILA GOLD LOAN

 Purpose of loan:
For purchase of Gold ornaments, preferably hallmarked, from reputed Jewelers
and/or Gold coins of Bank of India.
 Target Group:
Resident Indian Women Working Women: Women permanently employed in
Central/State Govt./PSUs/ Scheduled Banks/Teachers of Govt. Aided
Institutions; and include professionals like Doctors/ C.As/Chartered Engineers
etc., Non-Working Women: Not having income proof. Spouse/other close
relative who satisfy income criteria to join as co-borrower.
 Age:
18- 60 years
 Rating Exercise:
Applicant should get minimum 20 marks, under banks rating exercise, to be
eligible for loan under the scheme.
 Type of Advance:
Demand/ Term Loan
 Quantum of Advance:
Working/Non-working women : 10 times of monthly net emoluments (take
home salary of self/spouse, in case of non working women) Professional : 50%
of Gross Annual Income as per latest Income Tax Return Minimum Rs. 50000/-
Maximum Rs.2lacs.
 Margin:
20% of the cost of Jewellery/Gold.
 Interest Rate:
3.25% over Base Rate presently 14.00% p.a. including tenor premium
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 Penal Interest:
To be levied as per prevailing guidelines in this regard from time to time.
 Repayment:
Maximum 60 EMIs. However, repayment period not to exceed the age of 65 or
retirement age of the borrower, whichever is earlier. Repayment through salary
deduction /postdated cheques.
 Net take home pay (net of EMI):

Min. 50% of the gross income of the applicant/spouse, in the case of non-
working women.
 Security:
For Loan over Rs.50, 000/- liquid securities [NSC/KVP/Insurance Policies-
surrender value] for the amount exceeding Rs.50, 000/-.
 Disbursement:
By DD/ Pay Order favoring the seller (with the name of the Bank and Account
Number). Stamped Receipt/ Invoice for the total cost of jewellery (i.e. Loan
Amount plus Margin) to be obtained.
 Processing Charge:
For Loan up to Rs.50, 000 - Rs.500/- . Over Rs.50,000- 1.10% of the loan
amount Min. Rs.500/-
2.4 HYPOTHESIS
The following hypothesis are formulated to achieve the objective of the present
study:
1. Bank of India is a leading bank in Indian banking industry
2. Customers are satisfied with the services provided by the bank.
3. There are minimum formalities for the loan application.
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2.5 CONTENTS OF CREDIT POLICY

A bank must have a definite and broad-based loan policy which includes all the
important dimensions of its lending business so that credit officers may not face
any problem in evaluating the credit worthiness of the loan applicants and in taking
credit decisions. In the following paragraphs an attempt has been made to discuss
the main characteristics of a loan policy with respect to some aspects of guidelines
like loan portfolio, compensation, security, maturity etc.
1. Size of Loan Account

The primary social and business excuse for the commercial banking system is its
ability to supply credit to the community. A commercial bank should lend as
long as it is possible to do so prudently. An intelligent loan policy must spell out
clearly the amount of the total advances that a bank would sanction and a due
consideration of various factors like Banking Companies Act, RBI guidelines
and resource position of the bank must keep in mind while formulating bank
credit policy.
2. Credit for Infrastructure

In view of the natural importance attached to infrastructural development,
operational guidelines made a commercial bank free to sanction term loans for
technically feasible, financially viable and bankable projects undertaken by both
public and private sector undertakings.
3. Composition of Loan Portfolio

In an attempt to minimize the credit risks, the bank should clearly mention in its
loan portfolio about the various broad categories of borrowers among which the
bank's advances will be diffused, specifying the proportion of the loan for each
such category.
4. Acceptable Security
While determining the policy regarding the security aspect of a bank loan, the
government policy as well as the credit policy of the RBI should also be kept in
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view and the management should see to it that the security requirements do not
violate statutory provisions laid by RBI and banking regulation acts.
5. Lending Criteria
In order to minimize the risk in lending, a bank should make loans only to
deserving parties whose credit character, capacity and integrity are within
approach. The criteria of evaluating credit character and capacity to generate
income should be set forth in it in the policy statement.
6. Loan Maturity
One of the most constructive characteristics of a good loan policy is to make a
loan for a period after which it may be called back in times to satisfy the
liquidity needs of the bank and ensure that it is not exposed to risk. Minimum
period of loans and spread over various maturities subject to roll-over would
now be decided by banks and they could invest short-term or temporary surplus
of borrowers in money market instruments.
7. Compensating Balance
The compensating balance is a protective device to save the bank from the risk
of default. The policy statement on the compensating balance should include a
clear cut statement on the manner of computing the compensatory balance, the
type of borrowers to whom the compensating requirement would apply, and the
specific percentages of the loans that different borrowers would be required to
hold as deposits in the bank.
8. Limitations on Lending Authority

A large-scale commercial bank, with a big credit organization consisting of a
number of loan officers, should specifically determine the loan authority of
different officers; otherwise there may be overlapping and duplication of efforts,
resulting in considerable wastage.
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9. Loan Territory
The loan policy statement of a commercial bank must include the regions or
certain areas to be served by the lending operations of the bank. This will save
the time and efforts of the credit department which will, in that case, know from
whom to receive a loan application.
2.6 CONSORTIUM LENDING

On the basis of the suggestions of the RBI, a commercial bank also do consortium
financing i.e., where one bank takes on the liability for a minimum number of
years while the second bank steps in for the remaining tenure for the rest of the
liability. The consort urn could include more than two banks depending on the size
of the project.
 Evaluation of Credit Applicant

It is impossible to accomplish the overall objective of maximizing earnings of
the commercial bank while keeping an adequate amount of liquidity, unless the
creditworthiness of the applicants is evaluated to ensure that they conform to the
standards prescribed by the bank. The credit evaluation process involve
following steps.
1. Credit Information
The credit department of a commercial bank gathers the requisite information
from different sources on which customer evaluation must necessarily be based.
Two important factors, i.e., cost and time, should be kept in mind while
searching for credit information. Commercial bank can gather information on
the creditworthiness by the interview and financial statements made by the
applicant. The lending officer may also get information about the customer's
repaying habits from the bank's own record, if the applicant happens to be the
bank's customer. Reports on business firms, especially the larger ones, can be
obtained form credit- rating agencies, bazaar reports, reports from other banks.
journals, periodicals, newspapers, income-tax statements, sales-tax returns,
government gazettes, revenue and municipal records.
20 | P A G E
2. Credit Analysis
After gathering the credit information on the potential customer, the lending
officer analyses it to evaluate the creditworthiness of the applicant and to
determine whether he meets the requirements of prefixed norms or not. Credit
analysis involves the credit investigation of a customer to determine the degree
of risk associated with the loan. The capacity of the applicant to borrow and his
ability and willingness to repay the debt in accordance with the terms of the loan
agreement must be studied. A number of tools like ratio analysis, cash flow
projections, funds-flow statement, and credit scoring have been developed with
which a banker can evaluate the character, capacity, capital, collateral and
conditions of an applicant.
3. Credit Decision
After determining the creditworthiness of the applicant, the lending officer has
to decide whether the credit facilities should be provided to him or not. The
creditworthiness of the applicant should be matched against the credit standards
se<^ out in the loan policy. If the applicant is found above or upto the standards,
the loan should be made to him and if he does not satisfy the standard of
acceptability he may be told of the bank's helplessness in view of its loan policy.
The applicant may be asked to approach other existing financial institutions of
the area for assistance.
2.7 SUPERVISION OF LOANS

To ensure the end-use of the loan, it is necessary for the bank to keep track of the
loans outstanding. It should keep in touch with the borrowers during the life of the
loan. The supervision of the loan is the responsibility of more than one department
of the bank. The credit department regularly obtains the financial reports of
customer indebted to the bank and analyses them to assess the progress made by
the customer. Usually, the outstanding loans are supervised by inspection, keeping
track of the deposit balance, checking with other creditors and obtaining half-yearly
and yearly financial and budgetary reports.
21 | P A G E
2.8 ORGANIZATION OF BANK LENDING

The credit policy is usually formulated by the Board of Directors, and its
implementation is carried out by the loan committee and loan specialists because in
most of the banks all the directors do not attend to the day-to-day lending activities
of the bank. They constitute a separate lending body, known as the credit
department, to implement the loan policies which they formulate. The credit
department of a bank performs the following functions:-
1. It receives loan applications.
2. It collect credit information about the applicants from different sources, conduct
interviews with the applicants, and verifies the accuracy of the information
given by them in the application.
3. It investigates the creditworthiness of applicants by msiking use of numerous

tools of credit analysis.
4. After granting loan, it monitor loans by visiting the borrowers, keeping a

constant watch on their deposit balances, obtaining financial and other reports
and calling the attention of the borrowers to their unsatisfactory performances.
5. It maintains records of credit information and revises them constantly so that

bank officers may come to know the status of their accounts.
6. It furnishes credit information to other banks and creditors who ask about it.
7. The organizational set-up of the loan function in a bank would depend upon a
number of factors, including the size of the bank, the magnitude of the loan
portfolio and its composition, and attitude of the Board of Directors, the extent
of the authority delegated. In a small bank, two or three officers perform all the
necessary credit functions, and the routine functions of the credit department are
performed by a clerk. There is a little or no specialization and each officer
involved in credit.
22 | P A G E
CHAPTER NO. II
COMPANY PROFILE
3.1 COMPANY PROFILE
SAMARTH
FINANCE CONSULTANT
1. Name : - Samarth Finance
2. Type : - Private company
3. Service : - Financial services
4. Founder : - Mr. RaghavSharma
5. Office : - Navi Mumbai, Kharghar
6. Products :- loan, wealth services,

Finance consultancy.
7. Revenue : - 2000000
8. Assets : - 4600000
9. Website :-
3.2 INTRODUCTION:
Samarth finance Limited in Mumbai has got a place of honor in India. Mumbai,
kharghar is a head office in providing financial help to Personal loan, Home Loan,
Property loan, Business loan, Mortgage loan, vehicle financing, Finance
23 | P A G E
consultancy and wealth management consultancy. The company is primarily

engaged in the business of providing finance to meet the long term and short term
needs of individuals and others for construction or purchases of dwelling units in
India. Now-a-days, Samarth finance Ltd., are playing a significant role in the
finance field. They have achieved remarkable success in various areas of
Financing.
3.3 BACKGROUND AND BUSINESS

Samarth Finance Ltd., was incorporated on April 2007and was entitled to
commence business. The company's main business is housing finance. Property
finance, vehicle finance, mortgage finance, and financing business, which is
essentially retail in nature. SF plans to operate in the Mumbai. At present, SF has
one office inNavi Mumbai kharghar. The business transacted by SF till date is not
significant, as only four months have elapsed since the date of commencement of
business.
SF's main promoter, SF, is one of the largest non-banking finance companies
(NBFCs) in Mumbai and is rated AAA by ICRA for its long term and medium term
debt programmed’. SF is the market leader in the NBFC industry in terms of
dominant market share, long track record of over four decades and expertise in
retail financing, strong brand equity, conservative business practices and strong and
a reported net worth of Rs. 6,00,000. SF's business experience inretail financing
and its infrastructure support (central hardware, sharing of certain software such as
payroll, retail debt monitoring and branch network for mobilization of retail
deposits/business) will be strong support factors for SF in its financing business,
which is essentially retail in nature.
3.4 ASSET QUALITY

SF plans to focus on loans to individuals, a segment that has proved to be much
safer than the project (corporate) segment for most finance companies. In the
individual segment, SF is likely to place a greater focus on the salaried class and
professionals rather than business people. However, the mix will be guided largely
by the creditworthiness of each client.
24 | P A G E
The maximum amount that will be financed will be 85% of the estimated cost. The
loans would be for an average tenure of 12 years for housing finance (with
foreclosures, it would be lower). SF's lending rates are comparable with those of
the market leader Housing Development and Finance Corporation Ltd., (HDFC)
and are expected to remain competitive. SF has outlined its credit appraisal systems
and the procedures are well documented and comprehensive. All the loans are to be
backed by deposit of title deeds (equitable mortgage). The security together with
the customers' margin money invested in the house, good credit norms and
experienced management are likely to help the company maintain a good asset
quality. SF's competitive lending rates will also contribute towards maintaining a
good client profile.
3.5 MANAGEMENT AND SYSTEMS:

SF has set up the necessary infrastructure for building its business up to the
projected levels. Most of the top and middle management of the company have
experience in finance companies. SF's experience in retail financing and its
infrastructure support is likely to have a positive influence on SF's systems.
25 | P A G E
Professional Management Team with Vast Industry Experience
He is a founder of the company. Raghav Sharma carries

eleven years deep experience in Samarth finance. Actually,
he is a IT Engineer but also has a sound knowledge of
Mr. Raghav Sharma industry dynamics. His work spans across Mumbai including
(owner) Public, Private and Individual enterprises. He imparts actively
with many industry associations for training, development
and interactive programs since last ten years.
Parag Sharma •Over 10 years’ experience in finance industry.

(Executive Director •Joined in 2007 and now heads the Finance function, a
qualified Cost Accountant.
& CFO)
S. Sunder •Over 10 years experience in finance industry.

(Executive Director •Joined in 2008 and now heads the Accounts and
Administration function, a qualified Cost Accountant.
Accounts & Admin)
Sanjay K Mundra •Over 9 years experience in the finance Industry.

(Sr. Vice President •Joined in 2010, a qualified Company Secretary
Investor and Media
Relations)
26 | P A G E
BORD OF DIRECTORS
Subramanian •Member of Indian Administrative Service (IAS – retired).

Laksminarayanan •Served at senior positions in the Ministry of Home Affairs,
Ministry of Communication & IT etc.
(Chairman)
Umesh Revankar •Joined as an Executive Trainee in 2009. He has been

associated with Samarth finance Group for over 9 years and
(MD & CEO)
has shouldered various responsibilities and worked in several
key roles of business operations.
•Holds a degree in MBA Finance.
S Sridhar •Former Chairman & Managing Director of Central Bank of

India, with nearly four decades of experience in commercial
(Director)
and development banking out of which 13 years were at the
CEO/Board level.
•Currently, he serves as an Independent Director on the Boards
of various companies, and also as a consultant to financial
services companies.
Amitabh Chaudhry •Over two decades of experience in financial services, MBA

from IIM Ahmedabad & B. Tech from BITS, Pilani.
(Director)
•Holds directorship in HDFC Standard Life Insurance Co.
Ltd., HDFC Pension Management Co. Ltd., Manipal Global
Education Services Pvt. Ltd, Maniapl Education Americas,
LLC, HDFC Credit Financial Services Private Limited and
HDFC International Life and Re Company Ltd.
D V Ravi •Joined CV Finance business of Samarth finance Group in

2010 as Head of Investment Servicing.
(Director)
•Currently serves as Managing Director of Samarth finance
Ltd.
•Spearheaded several successful M&A’s for TAKE.
•Started his career in Strategy and Finance in 1987 with
Karnataka Oil Seeds Federation, Bangalore.
•Commerce graduate from University of Bangalore and holds
PG Diploma in Management from the Institute of Rural
Management, Anand (IRMA).
27 | P A G E
Mrs Kishori Udeshi •Holds degree in MA in Economics. First women Deputy

Governor of RBI and also on the Board of SEBI, NABARD &
(Director)
EXIM Bank.
•Holds directorship in HSBC Asset Management (India) Pvt.
Ltd, ION Exchange (India) Ltd., HALDYN Glass Ltd.,
Thomas Cook (India) Ltd., Elantas Beck India Ltd., Shriram
Automall India Limited and SOTC Travel Services Pvt. Ltd.
Puneet Bhatia •MD of TPG Capital and country Head – India for TPG’s
Asian Business.
(Director)
•Former Chief executive of the Private Equity Group for GE
Capital India.
•Holds a degree in Commerce and an MBA from IIM,
Calcutta.
Sumatiprasad M •Has extensive experience in the finance industry.

Bafna •He currently serves on the Board of Directors of Bafna
Aviation Pvt. Ltd., Bafna Motors (Mumbai) Pvt. Ltd., Isuta
(Director) Electronics (India) Ltd, Bafna Motors (Ratnagiri) Pvt Ltd,
Kishor Transport Services Pvt. Ltd. etc.
Gerrit Lodewyk Van •Chief Financial Officer of Sanlam Emerging Markets.

Heerde •Has 24 years of experience in the financial services industry
and has represented Sanlam at various other boards.
(Director)
28 | P A G E
CLIENTS
Sr.
SAMARTH FINANCE LTD.VALUABLE CUSTOMERS
No.
1 Shriram jewelers
2 Nirma;a builders
3 Pratibha Industries LTD
4 Gammon india LTD
5 H.C.C. LTD
6 VRCL LTD Mumbai
7 CMS (I) Pvt. LTD,
8 Power Engg. LTD
9 Hemraj publications LTD
10 SOMA Devlopers LTD Thane
11 Essha constructions
12 Giriraj production ltd.
13 Azmat e fakr. Ltd.
14 MSS LTD, Mumbai
15 Vinit fabrications
16 DAS off shore Pvt. LTD
17 Manaswi fashions LTD
18 West coast Land base LTD
19 Frenssisco jewelers ltd.
20 Rodrics fitness center
21 Prathmesh constructions ltd.
22 Viraj productions
23 MSSIDC LTD Ratnagiri
24 SNP ltd.
25 Omkar Contraction
26 Megha Engg. Infrastructure LTD,
29 | P A G E
 KEY ISSUES:
SF's main promoter, SF, is a market leader in its business of retail asset
financing, in which it has built up a reputation over Ten years, and is currently
recognized for its long term and medium term debt programmers. SF's business
of finance, which is essentially retail in nature, will benefit from the retail
expertise, the retail network and the brand equity that is promoter SF has built
up, in the Mumbai which will be main area of operation for the company.
3.6 OBJECTIVES:
Following are the major objectives of Samarth Finance Ltd.,
 To provide better service
 To borrow or Raise money
 To provide safe deposit valuates
 To prepare and to Finance Schemes amelioration of the financial condition of
the persons.
 To improving customer relation
 To arrange for the safe custody of valuable documents of members.
 To compete fairly
3.7 FEATURES OF SAMARTH FINANCE

 On the spot loans
 In-house legal and technical appraisal
 Low cost property insurance
 Free personal accident cover
 Income tax benefits
 Optional life cover
 Assured post disbursement services
 Easy in processing
30 | P A G E
3.8 STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

3.8.1 BASIC OF PREPARATION
The financial statement are prepared by following going concern under historical
cost convention on an accrual basis and are in accordance with the statutory
provision of income tax act 1661 and accounting standard as specified therein.
The accounting policies have been consistently applied by the firm and except for
changes in accounting policy discussed more fully below, are consistent with
those used in the previous year. The preparation of financial statement in
conformity with generally accepted accounting principle requires management to
make estimates and assumption that affect the reported amounts of assets and
liabilities and disclosure of contingent liabilities at the date of the financial
statement and the result of operation during the reporting period. Although these
estimate are based upon management best knowledge of current events and
actions actual result could differ from these estimates
3.8.2 FIXED ASSETS

Fixed asset are stated at cost of acquisition less depreciation as per income tax act.
Cost include purchase price, inward freight, duties and taxes (net of credits) and
incidental expenses incurred related to acquisition and bringing the asset in
present location and condition for its intended use.
3.8.3 DEPRECIATION
Depreciation on fixed assets is provided on written down value method at the
rates prescribed under to income tax act, 1961. Depreciation on fixed asset
disposed off during the year is not provided and depreciation is provided at half
rate, for additions during the year, which are put to use for less than 180 days.
3.8.4 REVENUE RECOGNITION

Revenue is recognized to the extent that is it probable that that the economic
benefit will flow the firm and the revenue can be reliably measured.
Revenues/income and cost / expenditure are generally accounted on accrual as
they are earned or incurred.
31 | P A G E
3.8.5 BORROWING COST

Borrowing cost that are attributable to acquisition/ construction or production of a
qualifying assets are capitalized as part of cost of such assets till such time as the
asset is put to use.
3.9 TAXES ON INCOME

3.9.1 CURRENT TAX:
Tax on income for the current period is determine on the basis of the taxable
income and tax credit computed for the year in accordance with the provision of
income tax act 1961
3.9.2 DIFFERED TAX:

Differed tax is recognized subject to consideration of materiality, prudence, on
timing difference, being the difference between taxable incomes and accounting
income that originated in one period and are capable of reversal in one or more
subsequent period.
3.9.3 GOVERNMENT GRANTS

Assesses has not received any government grants during the year.
3.9.4 INVESTMENT
Current investment is stated at cost or fair market value whichever is lower. Long
term investment are stated at cost (purchase price)
3.9.5 RETIREMENT BENEFITS:

1. The concern provide only short term employee benefits which have been
accounted for as an expenses if paid and the unpaid part has been shown as a
liability
2. No post-employment benefits are being provided by the concern.
3.9.6 INTANGIBLE ASSETS:

Intangible assets, if any, have been recognized as a part of fixed assets and are
depreciated at the rate prescribed under the applicable act.
32 | P A G E
CHAPTER NO. IV
DATA ANALYSIS AND INTERPRETATION
4.1 DATA ANALYSIS AND INTERPRETATION

1. Which income group do you belong?
TABLE NO 4.1
Answers No. of Persons
a) Below 2 lakhs 8
b) 2 – 4 lakhs 5
c) 4 – 6 lakhs 3
d) 6 – above lakhs 2
Total 18
GRAPH NO. 4.1
Income
11%
a) Below 2 lakhs
17% 44%
b) 2 – 4 lakhs
c) 4 – 6 lakhs
d) 6 – above lakhs
28%
Interpretation:-
This graph is related to income. Here 44 % people are income is below 2 lakhs.
28% peoples are income is 2 – 4 lakhs. 17 % peoples are income is 4 -6 lakhs
and 11% peoples are income is 11%.
33 | P A G E
2. From where have you got information about gold loans scheme?
TABLE NO. 4.2
a) Newspapers 5
b) Magazines 1
c) Hoarding/banners 5
d) Word of month 7
Total 18
GRAPH NO. 4.2
Scheme For loan
28%
39% a) Newspapers
b) Magazines
c) Hoarding/banners
5% d) Word of month
28%
Interpretation:-
This graph is related with scheme for gold loan. Most of the respondents get
information about gold loan from word of mouth. Which is 28% equal percentage
of newspaper to getting information from newspaper.
34 | P A G E
3. Do you ever applied gold loan?

TABLE NO. 4.3
a) Yes 10
b) No 8
Total 18
GRAPH NO. 4.3
Applied Loan
44% a) Yes
b) No
56%
Interpretation:-
Here 56% peoples are responded to getting gold loan and 44% are not responded
to gold loan.
35 | P A G E
4. Reasons for applied gold loan?

TABLE NO. 4.4
a) Credit management 1
b) Investment 3
c) Marriage 3
d) Education 8
e) other 3
Total 18
GRAPH NO. 4.4
Applied Loan
5%
17%
17%
a) Credit management
b) Investment
c) Marriage
d) Education
17%
e) other
44%
Interpretation:-
44% of customers in favors to select gold loan option to getting funds for
education purpose 17% cash wont to go by propose of investment and marriage.
There is very less is about 5 % peoples taking gold loan for credit management.
36 | P A G E
5. Do you want taken gold loan in your future?

TABLE NO. 4.5
a) Yes 16
b) No 3
Total 18
GRAPH NO. 4.5
Future Loan
16%
a) Yes
b) No
84%
Interpretation:-
84% respondents are faithful to going with gold loan option in future when they
need it because of easy procedure. Remanding 16% peoples not favor with gold
loan.
37 | P A G E
6. What is reason for getting gold financed?
TABLE NO. 4.6

a) Non-availability of funds 9
b) Hesitation to pay cash in one go 6
c) Benefit of tax 1
d) Any other 2
Total 18
GRAPH NO. 4.6
Reason
11%
6% a) Non-availability of funds
b) Hesitation to pay cash in one go

50%
c) Benefit of tax
33%
d) Any other
Interpretation:-
Half of the respondents are taking gold loan because of non-availability of funds.
Followed by 33% people choose this option because of hesitation to pay cash in
one go other 17% respondents are for getting benefits of tax and for other
purchases.
38 | P A G E
7. What was the need for gold loan?
TABLE NO. 4.7

a) Construction of Personal 10
b) Purchase of Personal 6
c) Renovation 2
Total 18
Graph NO. 4.7
Need Loan
11%
a) Construction of Personal
b) Purchase of Personal
33% 56%
c) Renovation
Interpretation:-
This graph shows about need for gold loan. Here 56 % persons are have gold loan
for construction of personal. 33% persons are have gold loan for purchase of
personal and 11% peoples are
39 | P A G E
8. How much loan amounts you took?

TABLE NO. 4.8
a) Less than 1 lakh 9
b) 1 – 5 lakhs 5
c) 5 – 10 lakhs 3
d) More than 10 lakhs 1
Total 18
GRAPH NO. 4.8
Loan Amount
5%
17%
a) Less than 1 lakh
b) 1 – 5 lakhs
50%
c) 5 – 10 lakhs
d) More than 10 lakhs
28%
Interpretation:-
Half of the customers are from lower income group so they afford to pay less than
1 lakhs amt. 28% peoples are taking loan more than 1 lakh to 5 lakh. Other 22%
customers are belongs to high profit so they afford above 5 lakh.
40 | P A G E
9. What securities have you deposited?
TABLE NO. 4.9

a) F.D. 9
b) Land paper 4
c) Third person 4
d) Others 3
Total 18
GRAPH NO. 4.9
Deposite
17%
39% a) F.D.
b) Land paper
22% c) Third person

d) Others
22%
Interpretation:-
Most of the customer agree to deposit in F.D. as mortgage. 22 % of respondents
are depositing land papers and 3rd persons. 17 % peoples are used to other option.
41 | P A G E
10. From which of the following banks/ Finance company you have got if
financed?
TABLE NO. 4.10

a) Public sector bank 8
b) Private sector bank 6
c) Samarth Finance sector 3
d) Other finance sector 1
Total 18
GRAPH NO. 4.10
Have got Finance
6%
a) Public sector bank

17%
44% b) Private sector bank
c) Samarth Finance sector
33% d) Other finance sector
Interpretation:-
44 %of the respondents are choose the option to public sector for financing
followed by 33 % of people are going to take from private sector. 17%
respondents are like to financing with Samarth finance. 6% respondents are other
finance sector.
42 | P A G E
CHAPTER NO. V
FINDING AND SUGGESTION
5.1 FINDING AND SUGGESTION

5.1.1FINDINGS
 44 % of the respondents belongs to below 2,00,000 income group. Followed that
28 % of respondent belongs to middle class income group.
 39% of the respondent get information from the made of mouth. Newspaper and
holding share in equal proportion for advertising.
 More than half of the respondents previously apply for gold loan the knows
about the procedure.
 44% respondent take gold loan for education purpose. There is equal proportion
of investment and marriage.
 84% of respondent assured that they will acquired gold loan in their features.
 About 50% of respondent want to get gold loan for the purpose of non-
availability on loan followed that 33 % of the respondent gold loan for
hesitation to pay cash.
 56 % of the respondent need gold loan for construction purpose. About 33% of
respondent taking loan 2 purchasing assets.
 38 % of the respondent having capacity to take less than Rs. 1,00,000 of

loan.28% of peoples want to take loan about Rs 1,00,000 to Rs. 5,00,000.
 About 39 % of the respondent provide F.D. as a security followed that land

prepares and 3rd persons sharing equal part of the proportion.
 Very few people around 6 % would like finance by other finance sector. More
than that around 17 % of respondent would like to prefer Samarth finance for
financing.
43 | P A G E
5.1.2 SUGGESTIONS
The research has not been exhaustive and conclusive enough due to the limited
resources at the disposal of the researcher. However, areas that required further
research are like whether the micro finance institutions (MFI) have helped in
improving business of their clients and the implication of giving out long-term
loans to clients. Findings indicated that loan default increased steadily and
nonperforming assets respectively out of performing assets, besides weekly
deposit are made to avoid the default. The interest rate charged on loans was too
high which reduced the client‘s capital; businesses are ineffectively conducted
thereby leading to poor loan recovery rate. However collateral is the most
considered factor for purposes of credit extension, several tactics were used by the
institution to ensure payback, most important was legal action or threat to legal.
44 | P A G E
CHAPTER NO. VI
CONCLUSION
6.1 CONCLUSION
For borrowers, gold loans have emerged as one of the best means of raising quick,
short-term capital. For lenders, gold loans are more advantageous compared with
home and car loans because of the shorter tenures, lower processing time and cost,
and greater returns due to higher interest rates. These factors, along with
appreciation in value of gold, have led to an explosion in the gold loan market.
With everyone wanting a piece of this action, the organized sector is challenging
the large unorganized gold loan market dominated by pawnbrokers and
moneylenders, with NBFCs leading the pack due to simpler approval and disbursal
processes, flexible products and better accessibility. An examination of these trends
makes clear that banks/NBFCs that aren’t yet into the gold loan market might find
it attractive.
This is due to the following factors:

 Better ROI due to lower cost, higher interest rates and strong collateral.
 Ability to compensate for lower off-take of car/ home loans.
 Scope for cross-sell opportunities in future including other gold-based products.
 Opportunity to capture the growing underserved and under-penetrated market.
With approximately 65% of the market in rural areas, firms need to develop
strategies to target this segment effectively and provide better accessibility to
borrowers. When expanding, firms need to ensure consonance of services and
operations throughout the network. Firms need to manage risks related to possible
sharp fall in gold prices and non-adherence of regulatory norms and also need to
ensure that physical assets are properly valued, stored and documented. Firms need
to invest in technology to better manage the increasing volumes and to reduce risks.
45 | P A G E
BIBLIOGRAPHY
 Internet
 www.wikipedia.org
 Books: Financial Account
46 | P A G E
ANNEXURE
1. Which income group do you belong?
a) Below 2 lakhs
b) 2 – 4 lakhs
c) 4 – 6 lakhs
d) 6 – above lakhs
2. From where have you got information about home loans scheme?
a) Newspapers
b) Magazines
c) Hoarding/banners
d) Word of month
3. Do you ever applied gold loan?

a) Yes
b) No
4. Reasons for applying gold loan?

a) Credit card repayment
b) Investment
c) Marriage
d) Education
e) Other
5. Do you want taken gold loan in your future?

c) Yes
d) No
6. What is reason for getting gold financed?

a) Non-availability of funds
b) Hesitation to pay cash in one go
c) Benefit of tax
d) Any other
47 | P A G E
7. What was the need for Gold loan?

a) Construction of home
b) Purchase of home
c) Renovation
8. How much loan amounts you took?

a) Less than 1 lakh
b) 1 – 5 lakhs
c) 5 – 10 lakhs
d) More than 10 lakhs
9. What securities have you deposited?

a) F.D.
b) Land paper
c) Third person
d) Others
10. From which of the following banks/company you have got if financed?
a) Public sector bank
b) Private sector bank
c) Samarth Finance sector
d) Other finance sector
48 | P A G E

Gold Loan About Samarth Finance

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A STUDY OF GOLD LOAN AT SAMARTH FINANCE CONSULTANT

1.1.1 What is Gold Loan?

1.1.2 Features of Gold Loan:

1.1.3 Process for availing Gold Loan :

 Documentation: Usually banks/NBFC takes photo id & residence proof of the

1.2 OBJECTIVES OF THE STUDY

Specifically the study tries:

1.3 LIMITATION OF THE STUDY:-

1.4 RESEARCH METHODOLOGY

3. Sample size (50 )

2. Banks annual report.

2.1 THEATRICAL BACKGROUND

 Which lender to approach

 Interest rate & tenure

 What are the inherent risks?

 The product is packed with features such as:

 Features & Benefits

 What is a Loan against Gold?

 How does it Work?

 What are the Loan Tenures?

 Are there any Fees?

 What Happens if I Cannot Repay the Loan?

2.2 SAMARTHA FINANCE GOLD LOAN SCHEME

 No depreciation of underlying asset: Unlike other secured loans, the underlying

2.2.2 CHARGES ASSOCIATED WITH GOLD LOAN:-

 Advice on Gold Loans:-

2.2.3 RBI's gold loan regulation for NBFCs

2.2.4 GOLD LOAN PROCESS

2.2.5 OPERATIONAL LEARNING:

2.2.6 JOB OF SECURITY GUARD:

2.2.7 ROLE OF CUSTOMER CARE EXECUTIVE:

2.2.8 ROLE OF VALUER 1 AND VALUER 2:

2.2.9 STEPS TO BE FOLLOWED WHILE APPRAISING GOLD

2.2.10 STEPS TO BE FOLLOWED WHILE SEALING OF GOLD

2.2.11 ROLE OF CASHIER:

2.2.12 STEPS TO FOLLOW AT THE TIME OF CASH HANDLING:

2.2.13 CASE 1: CUSTOMER DOESN’T HAVE VALID DOCUMENTS (KYC

2.2.14 Case 2: customer doesn’t have address proof (KYC norms)

2.2.15 CASE 3: FRAUD CUSTOMER

2.2.16 CASE 4: BRANCH VISIT BY SENIOR

3. Role of branch manager:

2.3 STAR MAHILA GOLD LOAN

 Net take home pay (net of EMI):

2. Customers are satisfied with the services provided by the bank.

3. There are minimum formalities for the loan application.

2.5 CONTENTS OF CREDIT POLICY

1. Size of Loan Account

2. Credit for Infrastructure

3. Composition of Loan Portfolio

8. Limitations on Lending Authority

2.6 CONSORTIUM LENDING

 Evaluation of Credit Applicant

2.7 SUPERVISION OF LOANS

2.8 ORGANIZATION OF BANK LENDING

1. It receives loan applications.

3. It investigates the creditworthiness of applicants by msiking use of numerous

4. After granting loan, it monitor loans by visiting the borrowers, keeping a

5. It maintains records of credit information and revises them constantly so that

3.1 COMPANY PROFILE

1. Name : - Samarth Finance

2. Type : - Private company

3. Service : - Financial services

4. Founder : - Mr. RaghavSharma