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ACKNOWLEDGEMENT

DECLARATION

PREFACE

NEED FOR THE STUDY

OBJECTIVES OF THE STUDY

LIMITATION OF THE STUDY

RESEARCH METHODOLOGY

DATA ANALYSIS AND INTERPRETATION

FINDINGS

SUGGESTIONS AND RECOMMENDATIONS

CONCLUSION

BIBLOGRAPHY

QUESTIONNAIRE

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ACKNOWLEDGEMENT

I wish to express our gratitude to Punjab State Cooperative Bank

management for giving us an opportunity to be a part of their esteem

organization and enhance our knowledge by granting permission to do our

training project under their guidance.

My sincere thanks are due to entire staff of Bharat group of college for the

co-operation during my study.

Lastly thanks not lest my acknowledge is to all my family members for

being a good of not only finance but also encouragement and constant

inspiration during my study.

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DECLARATION

I, GURPREET KAUR , here by declare the project undertaken by me on

NON AGRICULTURE LOANS OF COOPERATIVE BANK is my

original piece of work and is done with the total integrity to my pursue my

research objectives.

No attempt has been made to manipulate any information and it is authentic

to the best of my knowledge. All the sources of information have been duly

disclosed.

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PREFACE

Someone has rightly said that practical knowledge is far better than

classroom teaching. During the course of this project we actually realized

how true it is when we analyzed the Banking Industry. This project enabled

us to know about the consumers needs and competitors activities in the

real world of Banking.

The subject of my study is NON AGRICULTURE LOANS OF

COOPERATIVE BANK, for which I have studied about the NON

AGRICULTURE LOANS and collected data of the bank for the last 10

years for its relevance.

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WHAT IS A BANK

Bank isan institution that deals in money and its substitutes and provides

other financial services. Banks accept deposits and make loans and derive a

profit from the difference in the interest rates paid and charged,

respectively.

A bank is one that accepts deposits from public and lends money.

"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. Thus

"A bank is a commercial establishment - a dealer in debts which aims at

earning profit by accepting deposits from public, which are repayable on

demand or otherwise, through cheques, drafts or otherwise; and which are

used for lending or investment."

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HISTORY OF INDIAN BANKING

Indian banking system, over the years has gone through various phases after

establishment of Reserve Bank of India in 1935 during the British Rule, to

function as Central Bank of the country. Earlier to the creation of RBI, the

imperial Bank of India was looking after the central bank functions. In

1954, the All India Rural Credit Survey Committee submitted its report

recommending creation of a strong, integrated. State-partnered commercial

banking institution with effective machinery of branches spread all over the

country. The recommendation of this committee led to the establishment of

first Public Sector Bank in the name of State Bank of India on July 1, 1955

by acquiring the substantial part of share capital by RBI, of the princely

states, associate banks came into fold of public sector banking.

Another evaluation of the banking in India was undertaken during 1966, as

the private banks were still not extending the required support in the form of

credit disbursal, more particularly to the organized sector. The bulk of

deposits collected, were being deployed in organized, sectors of the industry

and trade, while farmers, small entrepreneurs, transporters, professionals

and self - employed had to depend on the money lenders who exploit them

by charging higher interest rates. In February 1966, a scheme of Social

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Control was set up whose main function was to periodically assess the

demand for bank credit from various sectors of the economy to determine

the priorities for grant of loans and advances so as to ensure optimum and

efficient utilization of resources. The scheme however, did not provide any

remedy.

On July19, 1969, the government promulgated Banking Companies

(Acquisition and Transfer of Undertakings) Ordinance 1969 to acquire 14

bigger commercial banks with paid up capital of Rs. 28.50 crores, deposits

of Rs. 2629 crores, loans of Rs. 1813 crores and with 4134 branches

accounting or 80% of advances. Subsequently, in 1980, 6 more banks were

nationalized which brought 91% of the deposits and 84% of the advances in

the Public Sector Banking. During December 1969, RBI introduced the lead

Bank Scheme on recommendations of FK Nariman Committee.

In the post nationalized period, there was substantial increase in the

number of branches opened in rural/semi-urban centers bringing down thepopulation per bank branch to 12000 approx. during 1976, RRBs were

established (on the recommendation of M. Narasimham Committee report)

under the sponsorship and support of public sector bank as the 3rd

component multi agency credit system for the agricultural and rural

development. The Service Area Approach was introduced during 1989.

While the 1970s and 1980s saw the high growth rate of branch banking

network, the consolidation phase started in late 80s and more particularly

during early 90s, with the submission of report by the Narasimham

Committee on Reforms in Financial Services Sector during 1991.

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In these five decades since independence, banking in India has evolved

through four distinct phases, namely: -

Foundation Phase : - This phase can be considered to cover 1950s till

nationalization of banks in 1969. The focus during this period was to lay

the foundation for a sound banking system in the country. As a result

the phase witnessed the development of necessary legislative

framework for facilitating re-organization and consolidation of the

banking system, for meeting the requirement of Indian economy. A

major development was the transformation of imperial Bank into State

Bank of India in 1955 and nationalization of 14 major private banks

during 1969.

Expansion Phase: - This phase began in mid60s but gained

momentum after nationalization of banks and continued till 1984, a

determined effort was made to make banking facilities available to the

masses. Branch network of the banks was widened at a very fast pace

covering the rural and semi urban population, which had no access to

the banking hitherto. Most importantly, credit flows were guided towards

the priority sectors.

Consolidation Phase: - The phase started in 1985 when RBI took a

series of policy initiatives, which saw marked slowdown in the branch

expansion. Attention was paid to improving house keeping, customerservices, credit management, staff productivity and profitability of

banks.

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Reforms Phase: - The macro economics crisis faced by the country in

1991 paved the way for the extensive financial sector reforms which

brought deregulation of interest rates, more competition, technological

changes, prudential guidelines on asset classification and incomerecognition, capital adequacy, autonomy packages, etc.

COOPERATIVE BANKS

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 them operates. The cooperative

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 also has increased phenomenally in the recent years

mainly due to the sharp increase in the number of primary co-operative

banks. While the cooperative 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 cooperative banks in urban areas mainly

finance various categories of people for self employment, industries, small

scale units, home finance, consumer finance, personal finance, etc. Some of

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the cooperative banks are quite forward looking and have developed

sufficient core competencies to challenge state and private sector banks.

According to NAFCUB, the total deposits & lending of cooperative banks

are much more than old private sector banks and also the new private sector

banks. This exponential growth of cooperative banks is attributed mainly to

their much better local reach, personal interaction with customers, and their

ability to catch the never of the local clientele.

Though registered under the Co-operative Societies Act of the Respective

State (where formed originally) the banking related activities of the co-

operative banks are also regulated by the reserve bank of India. They aregoverned by the Banking Regulation Act 1949 and banking Laws Act 1965,

the cooperative banks are small sized units organized in the cooperative

sector, which operate both in urban and non urban centers. They finance

small borrowers in industrial and trade sectors besides professional and

salary classes. Regulated by the RBI, they are governed by the banking

regulation act 1949 and banking laws (Cooperative societies) act, 1965.

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STRUCTURE OF COOPERATIVE 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) Land development banks

STRUCTURE OF COOPERATIVE BANKING

Cooperative Credit Institution

Agricultural Credit Institution Non-agricultural Credit Institution

Short-term Institution Long Term Credit Institution

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Land Development

Banks

State Coop Central Coop Primary Agricultural

Bank Bank Societies

STATE COOPERATIVE BANKS (SCBs)

The SCB is a federation of central cooperative bank and act as watchdog of

the cooperative banking structure in the state. Its funds are obtained from

share capital, deposits, loans and overdrafts from the RBI. The SCBs lend

money to CBs and primary societies and not directly to farmers.

CENTRAL COOPERATIVE BANKS (CCBs): -

These are the federation of primary credit societies in a district. They are of

2 types: -

There can be cooperative banking unions whose membership is open

only to cooperative societies.

There can be mixed CCBs whose membership is open to both

individuals and cooperatives societies. The funds of the bank consist ofshare capital, deposits, loans and overdrafts from SCBs. The bank

provides loans to primary credit societies within the limit of the

borrowing capacity of societies. However, some loans are also given to

individuals and others.

PRIMARY COOPERATIVE CREDIT SOCIETY

It is a village institution, which directly deals with the rural people. It

encourages savings among the agriculturalists, accept deposits from them,

gives loan to the needy borrowers and collects repayments. The funds of the

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society are derived from the share capital, deposits of members and loans

from CCBs.

LAND DEVELOPMENT BANKSCooperative banks and commercial banks by their very nature are not in

position to provide long term loans because their deposits are mainly

demand deposits. Thus, there was great need for a specialized institution for

supplying long term credit to agriculturalists. The establishment of land

development banks now known as cooperative and rural development banks

(CARDBS) is an effort in this direction. The state government and RBI

govern LDBs. Recently; the supervision of LDBs was given to national

bank of agriculture and rural development (NABARD). The sources of

funds for the banks are debentures subscribed by both central and state

government. These banks do not accept deposits from general public.

Thus, the apex of the cooperative organizations in the state is the State Bank

to which Central Banks are affiliated. The primary societies are mostly

affiliated to the Central Banks.

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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

(i) Limited ability to mobilize resources.

(ii) Low level of recovery.

(iii) High transaction of cost.

(iv) 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 day-to-day

administration of the cooperative institution. Some of the problem

area that arise out of the applicability of the cooperative legislative

are

(i) Deliberate control of cooperative by the government.

(ii) Nomination of board of director by the government.

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(iii) Participation of the nominated directors in the election of the

chairman.

(iv) Deputation of government officials to cooperative institutions

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 isprimarily 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 at 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 occasion's institution like Food Corporation 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 with the changing requirements of the farmers.

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MISSION

Promotion and sustainance of economic interest & providing easy finance, cost effective

and quality banking services to customer & PACs.

OBJECTIVES OF BANK

To serve as a Balancing center for corporative societies in the state.

To promote the economic interest for the members of the bank andcooperative societies

To provide credit and banking facilities to the members and non-

members.

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To act as higher financing agency for the members Central Cooperative

Bank.

To promote and develop saving and credit instrument for economic and

social welfare of the members in particular and others in general in

Punjab State.

SERVICE PROVIDED BY THE BANK

DEPOSITS

Saving Bank Account

Current Account

Fixed Deposits

Long Term Deposits

Recurring Deposits

Collection of drafts, cheques and various other

instruments

LOANS

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Loans to Public

Consumer durable loans

Personal loan to salary class

Housing loans

Loans to central cooperative banks: (Re-finance)

Short term agriculture

Medium term agriculture loan

Short term non agriculture loan (Consumption loan)

Non farm sector loan

Rural and urban housing

Tow wheeler loan

Revolving cash credit limit to farmers

Cash credit fertilizer

Cash credit limit to cooperative sugar mills

Loans to other cooperative apex institution

To House Fed Punjab

To IFFCO

FACILITIES PROVIDED BY PSCB

Bill discounting

ATMs

Telebanking

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24 hour banking

Foreign Exchange

MANAGEMENT

The board of Directors lays down the board policies regarding the working

of the bank. The Board of Director is constituted for a period of five years.

The constitution of the board is given as under:

One director from each Central Cooperative bank

Two directors to be elected out of the representative of affiliated

cooperative societies order than central cooperative bank. One from apex

cooperative societies and one form other member cooperative societies.

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Maximum three nominees of the government so far as government's

contribution of share capital of the bank are concerned.

Registrar or his nominees not below the rank of additional registrar.

Managing Director of the bank

Representative of NABARD.

The members of the Board of Directors, elects from the elected members

the chairman and vice chairman. In the absence of the board, the

administrator looks after the bank..

FUNCTIONS OF THE BANK

According to the banking regulation act 1956, banking means "Accepting

for the purpose of landing or investment of deposits of money from the

public, repayable of demand or otherwise and withdrawal by cheques.

Drafts and order or otherwise."

BANK FUNCTION

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PRINCIPAL ANCILLARY

ACCOUNTING GRANTING SAFE ISSUE ISSUE OFDEPOSITS ADVANCES DEPOSITS OF GURANTEES

LOCKERS PAYORDER/DD

FINANCIAL HIGHLIGHTS

INVESTMENT OF FUNDS: -

(A) STATUTORY REQUIREMENTS: -

25% of the total time liabilities are invested in the shape of SLR in

Government Securities by the bank while the central cooperative banks can

keep this with the Punjab State Cooperative Bank, Chandigarh. 5% of the

total time and liabilities is kept as Cash Reserve Ratio under the RBI Act in

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the shape of Current Account with RBI Act in the shape of Current Account

with RBI. Remaining is being invested in Loan Portfolios.

(A) ADVANCES AND LOANS: -

(1) Short Term Agricultural Advances: -

The short term agricultural loan is advanced by the cooperative banks

for the Seasonal Agricultural Operations known as Crop Loan. The

farmers in the State are being provided credit for raising Kharif and

Rabi Crops in the shape of cash and kind component. The

Agricultural Advances made during the last four years are as under:-

YEAR TARGET (IN Cr.) ADVANCEMENT (IN

Cr.)

2006-07 4544.00 4128.56

2007-08 5907.00 4801.63

2008-09 6000.00 5828.28

2009-10 6740.00 5894.29

2) Short Term Agricultural Recovery (DCCBs): -

The recovery of short term agricultural loan of DCCBs has improved.

The recovery is being effective through persuasive methods. No

coercive action is being taken. The annual recovery of S.T

Agricultural Loan for the last 4 years given as follows: -

2006 2007 2008 2009

91.80 92.33% 92.16% 82.07%

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(3) Medium Term Agricultural Advances: -

The central cooperative banks are advancing Medium term

Agricultural Loans in the state for various purposes namely-purchase

and installation of pump sets, diesel engines, electric motors with or

without pump, purchase of agricultural implements, machinery,

seeds, disk arrowa, harvesters, tyrecarts etc. land reclamation and

land improvement, construction of bunds, preparation of orchards and

plantation, purchase of milch cattle, pouitry farms, purchase and

installation of gobar gas plants and purchase of shares of cooperative

sugar mills etc.the disbursement of M.T.loan is as under

YEARS AMOUNT

ADVANCE(IN CR)

2007-08 117.57

2008-09 210.31

2009-10 196.87

(4) Revolving Cash Credits: -

A unique scheme was evolved to bring the farmers from un-

institutional credit to the cooperative credit structure. Under this a

scheme, the Cooperative Banks are providing Rs.1.00 lacs per acre

subject to the maximum of Rs.6.00 lacs to the farmers for fulfilling

their socio economic liabilities without falling pray to the clutches of

private/non institutional money lenders. Rate of interest is 11%.The

central cooperative banks have sanctioned credit limits as detailed

below: -

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(5) Non Farm Sector Loan: -

Another most important features of the cooperative banks in the State

is that they started advances for Non Farm Sector during the year

1993 and advanced loans as detailed: -

YEARS NO. OFBENEFICIARIES

LIMITS SANCTIONED(IN Cr.)

2007-08 9590 56.48

2008-09 8013 49.50

2009-10 4873 42.32

(6) Loans for Consumer Durables: -

Loans for consumer durables, such as for the purpose of television,

refrigerator, air conditioner and other household items etc were

disbursed by CCBs as under: -

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YEARS NO. OF

BENEFICIARIES

LIMITS SANCTIONED

(IN Cr.)

2007-08 132011 1527.00

2008-09 142226 1919.55

2009-10 148799 2091.75


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YEAR AMOUNT DISBURSED (IN

CR)

2007-08 80.70

2008-09 79.712009-10 71.50

(7) Cash Credit to be Businessmen and Traders: -

Under this scheme, a cash credit limit is sanctioned up to Rs25.00

Lakhs to small businessmen and traders depending upon their

business turnover on easy terms at 14% normal rate of interest. These

limits sanctioned to the traders are detailed below: -

YEAR CC LIMIT SANCTIONED (IN

CR)

2007-08 245.72

2008-09 280.40

2009-10 306.49

(8) Two Wheeler Loan to Farmers: -

A scheme of NABARD was started in February 2002. The farmers

can take 75% of two-wheeler's cost or Rs. 50,000/- whichever is less,

from the Central Cooperative Banks in the State of Punjab.

YEAR AMOUNT ADVANCED (IN

CR)

2007-08 43.33

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2008-09 39.62

2009-10 32.95

(9) Housing Scheme: -

These loans are provided by the Central Cooperative Banks for

construction of new house, reapir/extension and renovation of

existing house and the maximum limit of these loans is Rs. 5.00

Lakhs.

YEAR AMOUNT ADVANCED

(IN CR)

2007-08 94.642008-09 101.33

2009-10 90.10

(10) Vehicle Loan Scheme: -

Under vehicle loan scheme, loan is available for new vehicle like Car,

Mini Bus,Lorry etc upto 80% of the value of the vehicle or Rs. 10.00

lakhs, whichever is less.

YEAR AMOUNT DISBURSED

(IN CR)

2007-08 39.16

2008-09 61.82

2009-10 84.08

(11) Personal Loan Scheme: -

This scheme has been introduced in December 2002, through all the

branches of Punjab State Cooperative Bank and for all the 19 Central

Cooperative Banks in the State of Punjab. This loan can be advanced

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to salaried employees upto Rs. 2.00 lakhs @ 14%. The year wise

detail is given below: -

YEAR AMOUNT DISBURSED

(IN CR)

2007-08 103.22

2008-09 133.78

2009-10 126.44

PROFITS

All the Cooperative Banks in the state are in loss. The figures are given

below: -

YEAR APEX BANK CCBs TOTAL

2006-07 26.24 74.84 101.08

2007-08 23.79 24.55 48.34

2008-09 10.34 18.73 29.07

OBJECTIVES OF THE STUDY

The research project is made on "The Punjab State Cooperative Bank". The

objectives of the study undertaken are:

To study the Non Agriculture Loans provided by the bank and to know

in detail the procedure for applying these loans.

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To analyze the customer satisfaction level on the loans provided by the

bank.

To evaluate and suggest efficient and effective provisions for the loans

being provided.

To analyze the profits and advances of the bank in the previous three

years time period.

RESEARCH METHODOLOGY

Research can be described as 'a purposeful investigation'. Research is a

step-by-step approach to investigate the problem in order to find a solution.

There are many techniques, which can be employed to solve a problem so it

is important for the investigator to consider his problem carefully at the

outset and make use of techniques that are appropriate to it. Just as the

carpenter needs to use more than one tool in completing a piece of work, so

the research worker must often make use of, not one, but several methods.

When we desire a great deal of information concerning each

individual or occurrence to be studied, much of our data may be non-

quantitative by its nature. In such an even we employ the case study method

of investigation, the purpose of which is to consider in detail the features of

peculiar to the individual case. We will make use of two kinds of data:

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1) PRIMARY DATA

This data happens to be original in character as it is Collected a fresh and

for the first time. Such data are published by authorities who themselves are

responsible for their collection. Examples include census data collected by

Indian Government. In this study we will make use of primary data, which

can be collected by, one or more of following methods:-

a. OBSERVATION METHOD: In this method, the investigator

collects the information through personal observation.

b. QUESTIONNAIRE METHOD: This is one of the most popularmethods of data collection. The primary data is collected by

personally interviewing individuals and recording their responses

in a structured questionnaire. This method will be used to collect

data from respondents in this study.

c. MAILED QUESTIONNAIRE METHOD: A preset

questionnaire is mailed to a selected list of persons who are

requested to fill it & mail it back.

d. TELEPHONE INTERVIEW: The respondents are contacted on

phone for recording their responses. This method saves time but

the respondent should have a telephone.

Of all these methods of primary data collection, questionnaire method will

be used to gather information from the management and employees.

2) SECONDARY DATA: This corresponds to the data, which has

already been collected and processed by some other agency. In this

study the secondary data will be obtained from the booklets and

journals of the companies under study in order to get information

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relevant to the case. The sources of secondary data can broadly be

classified under two heads:

a) PUBLISHED SOURCES: -

The various sources of published data are:

Reports and official publication of international bodies such as the "

World Bank" International Labour Organization"

Central and State government

Semi official publications of various local bodies such as Municipal

Corporations and District Boards.

b) UNPUBLISHED SOURCES:

All statistical material is not always published. There are various sources of

unpublished data such as records maintained by various Government and

private offices; studies made research institutions, scholars etc. Suchsources can be used where necessary.

TOPIC UNDERTAKEN FOR THIS STUDY

During the training period, I concentrated only on five kinds of loans, which

are provided by the Cooperative Bank, Bathinda. The reason being that the

branch has provisions for only these four finds of loans, thus is providing

these non-agricultural loans only. A detailed study of the procedure for

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applying to these loans, documents required and other formalities related to

these loans are studied. These loans are stated as under:

Personal Loan

Consumer Loan

Vehicle Loan

Education Loan

To apply for a loan, the consumer has to first of all give an application to

the Registrar applying for the loan. Then it is checked whether the customer

has taken a loan before and if yes, whether it is repaid or not, after the

eligibility of the customer is checked. In the process, it is seen that whether

the customer is able to repay the monthly installments. It is checked with

the help of the salary slip of the customer, which is prepared by the

Accounts Department of the office. After making all the deductions, it is

seen that whether the amount left is sufficient enough to pay the EMIs of

the loan. If all the formalities are meeting, the file is moved to the Registrar

for further notification and sanctioning of the loan. After the loan is

sanctioned, a person from the bank is sent to verify that, whether the loan

has been used for the stated purpose.

The detail procedure of each loan is discussed as follow:

PERSONAL LOAN

Personal loan scheme has been framed which aims at providing credit

facility for meeting out Social Economic needs of employees such as: Child

Education, Furnishing your home, buying a computer, marriage of

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son/daughter, holiday tour with your family or any other basic requirement

without giving any purpose of loan. This scheme was introduced in 2001.

Main feature of this scheme are

Eligibility criteria class:-

All salaried employees of Punjab Government Chief Auditors Cooperative

Department, Punjab State Cooperative Banks and Chandigarh

Administration its board, corporations except on deputation with

Chandigarh administration boards and corporations.

Purpose Credit facility for meeting out socio-

Economic needs

Age Minimum 21 years and max.57 years

Service tenure One year after confirmation

Rate of interest 14%

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Loan limit 12 times of Gross S/salary or

Rs.2.00 lac, whichever is less

Collateral Security Two GoodSureties as per

Satisfaction of the bank

Margin No margin required

Repayment period Maximum 5 Years

Monthly Installment per Lac Rs.2326.00

Payment of loan

Loan is repayable in equal installments in the form of post dated chequess.

The 1st installment will start after one month. The loan shall be repaid

before retirement.

Option to repay loan : -Loanee will have the option to prepay the loan

at one time during the tenure of loan in lump sum. A prepayment fee of 1%

will be payable on the outstanding loan amount. No part-prepayment is

allowed.

General

No employee will be given this loan facility who has defaulted in

repayment of loan in any other scheme.

DOCUMENTS REQUIRED

Pre-sanction

Application form

Latest photograph

Bank account statement

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Proof of income employer certificate of identify proof of continuity of

current job

Proof of residence of the borrower and guarantor

Post-sanction

Demand pronote

Agreement (N J stamp paper for Rs. 15/- only)

Signature verification

Post dated cheques

ADVANCEMENT

Under this scheme Rs. 103.22 crores were advanced during the year 2007-

08and Rs. 133.78 Cr. has been advanced during the year 2007-08 and Rs.

126.44 Cr. were advanced during the year 2009-10.

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0

20

40

60

80

100

120

140

2006-07 2007-08 2008-09 2009-10

Amount disbursed (in Cr.)

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CONSUMER LOAN

The Punjab State Cooperative Bank to make advances to the individuals

directly for the purchase of consumer durables like refrigerator, scooter,

television, radio etc and for meeting other domestic expenses like expenses

on medical, education, marriage of son/daughter/brother/sister or self etc

and also for providing overdraft facility to the saving account and current

account holders.


Beneficiary

The bank may grant loan to the individual salary earners and non salary

earners.

Purpose for the purchase of consumer

Durables

Loan limit Maximum amount upto Rs.1Lac.

Rate of Interest 14%

Margin 25%

Repayment Period Maximum 5 Years

Monthly Installment Per Lac Rs.2326.00

Collateral Security Two Good Sureties as per

Satisfaction of the bank

Tenure of loan

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The loan should be repayable in monthly installments. The total duration of

loan should not exceed five years.

CONDITIONS FOR APPLYING THE LOAN

The following conditions are required to be fulfilled in order to apply for

the loan: -

The borrower should be enrolled as a nominal member of the bank.

The borrower is required to produce two witnesses who should also be a

nominal member of the bank while signing the agreement.

The loan should be advanced for acquiring new assets only. Purchase of

second hand articles should not be financed.

The bank should take the original invoice from the dealer.

The loan should be advanced against hypothecation of the asset/assets

required/to be acquired.

DOCUMENTS REQUIRED

Promissory note

Agreement bond

Salary certificate

An authority letter from the loan and corresponding undertaking, from the

employer of the borrower under section 39 of the act for the repayment of

the loan in case the borrower fails to repay his loan.

Letter of waiver

An authority letter from the borrower to recover the installment

Application form

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Surety bond

Hypothecation agreement

ADVANCEMENT

The bank has advanced Rs. 71.50 Cr. Till the end of March 2010 as

compared to Rs. 79.71 Cr. which was advanced by the bank in the year

2009.

0

20

40

60

80

100

120

2006-07 2007-08 2008-09 2009-10

amount

disbursed(inCr.)

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SHEKARI EDUCATION LOAN

FACILITY


Beneficiary Any Individual with 50%marks

In 10+2

Purpose To provide financial assistance to

Deserving and meritorious

students

For pursuing higher studies in

India or Abroad

Age

Minimum 17 years and Maximum 35 years.

His age of the Father/Guardian should not be more than 65 years till full

recovery of loan.

Loan limit Max. amount up to Rs.10 lac.

Rate of Interest 9%

Margin No margin required

Repayment period The installment will start after

Completion of course. Max

Period 5 years.

Security

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Collateral security: Mortgage of property value of 100% of loan amount..

For the loan up to Rs.5 Lac. No immovable security is required if the loanee

is the employee of Punjab Govt.or Coop Department etc.

Insurance: Insurance policy will be taken on the life of the student for

an amount equal to the loan amount assigned in favour of the bank.

Disbursement of loan

The branch will get sanction of total loan amount from the competent

authority, but will disburse the amount based on yearly expenses of the

course.

Third party payment in favour of concerned university or college.

In case purchase of Equipment/Books/Computer, the payment shall be

made to the applicant.

DOCUMENTS REQUIRED

Pre-sanction: -

Salary slip for the six months

Income proof

Income tax returns

Academic records

Particulars of scholarship won, if any

Post-sanction: -

Application nominal membership from the student/parent/guardian and

guarantor.

DP note

Letter of lien and set off

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Letter of waiver

Letter of guarantee from guarantors

Loan agreement

Affidavit from parent/guardian regarding: -

1) Payment of interest.

2) Repayment of loan, incase of default by the applicant.

3) He will not go abroad permanently without prior permission of the bank.

4) He will intimate the bank regarding any change in the status of study, if

any.

5) Mortgage of collateral security duly registered & mutation in favour of

the bank, if required.

PRECAUTION FOR DISBURSEMENT

Third party payment except for purchase of equipment/books.

Payment of loan amount for the 2nd year is made after obtaining the

documents relating to passing the first year & so on.

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VEHICLE LOAN

Under vehicle loan scheme, loan is available for new vehicles like Car, Mini

Bus, Lorry etc.


Beneficiary Individual, Firm, HUF, Trust,

Coop

Societies or a Company

Purpose For the purchase of new vehicle

for business and personal use

Loan Limit Max. Amount up to Rs.10 Lac. Or

80% of cost of the vehicle.

Margin 20%

Rate of Interest Upto Rs.3 Lac : 13%

Above Rs.3 Lac: 13.5%

Repayment period Maximum 5 Years

.

Insurance Comprehensive insurance jointly

With the name of Bank and

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Borrower.

Collateral Security

Two Good Sureties as per satisfaction of the Bank Besides the

hypothecation of the vehicle

DOCUMENTS

Pre-sanction

Application for the loan.

Residence proof of borrower and Guarantors.

Copy of the Driving License.

Quotation of the vehicle.

Identity proof.

Document relating to collateral security, if applicable

Proof of income.

In case of salaried employee:

a) Form 16

b) Latest salary statement with deduction

c) Income tax returns for the last three years, if income tax payee

In case of business:

a) Copy of balance sheet and profit & loss a/c for the three years.

b) Proof of business.

c) ITRs for the last three years.

In case of firms:

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a) Copy of the partnership deed.

b) Authorization letter.

c) Proof of office on case of firms.

In case of companies:

a) Memorandum and article of association.

b) Copy of resolution.

Post sanction

Application for the nominal membership of the borrower, guarantor and

mortgagor.

D.P. note.

Letter of lien and set off.

Letter of waiver.

Hypothecation deed.

Loan agreement.

Mortgage deed duly registered and mutation in the favour of the bank, if

applicable.

Duly signed post dated cheques for the installments.

PRECAUTION FOR THE DISBURSEMENT: -

The following documents to be obtained after disbursement: -

Insurance cover.

Copy of Registration Certificate.

Original invoice.

One set of duplicate keys.

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ADVANCEMENTS

The bank has advanced Rs. 84.08 Cr. to the customer in the year 2009-10,

while the amount was Rs. 61.82 Cr. in the year 2008-09.

0

10

20

3040

50

60

70

80

90

2005-06 2006-07 2007-08 2008-09

Amountdisbursed (in

Cr.)

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Data Analysis and

Interpretation

Q.1 Are you Customer of this bank?

Table No. 1

1.Yes 1. 50

2.No 2. 0

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Yes

No

Q.2 Income segment do you belong?

Table No.2

1.1000-5000 1.15

2. 6000-10000 2. 10

3. 11000-15000 3. 13

4. 16000-20000 4. 5

5. Above 5. 7

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1000-5000

6000-10000

11000-15000

16000-20000

Above

Q.3 Have you an account in this bank?

Table No. 3

1.Yes 1. 50

2.No 2. 0

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Yes

No

Q. 4 From How many years you are customer of this bank?

Table No. 4

1. From 1-2 year 1. 10

2. From 2-5 year 2. 12

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3. From 5-10 year 3. 10

4. Above 10 year 4. 18

1-2 year

2-5 year

5-10 year

Above 10 year

Q. 5 Why you prefer this bank?Table No. 5

1.Low interest rates 1.10

2.Less documentations 2. 13

3. Easy disbursement 3. 12

4.All of the above 4. 15

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Low interest rates

Less

Documentations

Easy

Disbursement

All of the above

Q. 6 What type of loan you prefer to fulfill your needs?

Table No. 6

1.Personal loan 1. 20

2. House loan 2. 15

3. Consumer loan 3. 6

4. Vehicle loan 4. 9

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Personal loan

House loan

Consumer loan

Vehicle loan

Q.7 Security demand by the bank while taking loan?

Table No. 7

1. Yes 1. 50

2. No 2. 0

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Yes

No

Q.8 Disbursement of loan by the bank?

Table No. 8

1. Quick 1. 25

2. Slow 2. 5

3. Cant say 3. 20

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Quick

slow

can't say

Q.9 Perception of customers towards loan procedure?

Table No. 9

1.Well 1. 30

2. Good 2. 8

3. Better 3.10

4. Cant say 4. 2

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Well

good

better

can't say

Q.10 How you feel about the services?

Table No. 10

1.Well 1. 25

2. Good 2.12

3. Better 3.104. Cant say 4. 3

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Well

good

better

can't say

CONCLUSION

With the help of the research work done, and by interpretation of the

responses of the customers, following conclusions can be made:

It is clear that the bank's personal loans and house building loans are

more popular and hence the customers taking these loans are more than

the other customers.

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During the analysis, it was found that mostly the employees of the bank

are the customers of the bank.

As the customers are the middle income group having an average salary

of Rs. 1700/- per month and there is a direct correlation between the

income of the employees and the amount of loan taken, hence mostly

the employees undertaken a loan ranging between Rs. 1,50,000/- to Rs.

4,00,000/-

The bank is able to reach up to the satisfaction level of its customers.

The customers have suggested that the formalities included during the

loan processing should be reduced.

The rate of interest of bank is reasonable which the reason is for most of

the employees for taking loan from the institution.

The bank has three categories of its customers as its own employees, non

employees and businessmen.

The average processing time for the loan is 7 - 14 days.

BIBLIOGRAPHY

Financial Accounting By Jain & Narang

Research Methodology by C.R.Kothari

Annual Reports of Punjab State Cooperative Bank

www.google.com

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www.pbcooperatives.gov.in

Questionnaire

Q.1 Are you customer of this bank?1. Yes

2. No

Q.2 Income segment do you belong to?

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http://www.pbcooperatives.gov.in/http://www.pbcooperatives.gov.in/


59/60

1. 1000-5000

2. 6000-10000

3. 11000-15000

4. 16000-20000

5. Above

Q.3 Do you have an account in this bank?

1. Yes

2. No

Q.4 For how many years you are associated with this bank?

1. From 1-2 year

2. Form 2-5 year

3. From 5-10 year

4. Above 10 year

Q.5 Why do you prefer this bank?

1. Low interest rates

2. Less documentations

3. Easy disbursement

4. All of the above

Q.6 What type of loan you prefer to fulfill your need?

1. Personal loan

2. House loan

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3. Consumer loan

4. Vehicle loan

Q.7 Does the bank demand Security while taking loan?

1. Yes

2. No

Q.8 How is the Disbursement of loan by the bank?

1. Quick2. Slow

3. Cant say

Q.9How is the Perception of customers towards loan procedure?

1. Well

2. Good

3. Better

4. Cant say

Q.10 What is your perception about the services?1. Well

2. Good

3. Better

4. Cant say

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