Shivaji University,Kolhapur

Shivaji University,Kolhapur

INTRODUCTION OF THE STUDY1. INTRODUCTION The term loan refers to the amount borrowed by one person from another. The amount is in the nature of loans and refers to the sum paid to the borrower. Thus, from the point of view of borrower it is borrowing and from the banks point of view, it is lending. Loan may be regarded as credit granted where the money is disbursed and its recovery is made on a later date. It is debt for the borrower. While granting loans, credit is given for definite purpose and for a predetermined period. Interest is charged on the loans at agreed rate and intervals of payment. Advance on the other hand is credit facility granted by the bank. Bank grant advances largely for short-term purposes, such as purchase of goods traded in and meeting other short term trading liabilities. There is sense of debt in loan, where as an advance is a facility being availed of by the borrower. Loans and advances granted by commercial banks are highly beneficial to individual, firms, companies and industrial concerns. The growth and diversification of business activities are effected to a large extent through bank financing.

1.1 OBJETCIVES OF STUDY1. To study the loan procedures of the bank.2. To know the types of loans of the Saraswat Bank and related services.3. To know the role of the Saraswat bank in development of the banking services.4. To analyze the working of loans of the bank for individuals and companies.5. To give the suggestions on the basis of findings.

1.2 IMPORTANCE OF STUDY1. This study will be useful to understanding the practical significance of loan in banking services.

2. It is important study on the banking services against loan schemes.

3. It is also useful to the organization to understand effectiveness of its loans.

1.3 SCOPE OF THE STUDY1. To know the loans procedures in co-operative bank which are used by companies, individuals who cannot afford the finance in lump sum amount.2. To know the benefits of the loans provided by the cooperative bank.

1.4 LIMITATION OF STUDY1. Information given by bank was not sufficient because to maintain secrecy of the data.

2. This study is comprised of only loans in banking services.

3. Data collected was of last 3 financial years only.

1.5 RESEARCH METHODOLOGY

To fulfill the above objectives of study the information and data is collected through secondary data to complete the work

Secondary data collection: Secondary data means data which is already available i.e the data which have already been collected and analyzed by someone else. Secondary data may be either the published data or unpublished data. Published data are available in I.) Annual reports for the year 2011-2012, 2012-2013, 2013-2014 of Saraswat co-operative bank ltd, Sangli.II.) Financial reports, registers etc. of the bank. The source of unpublished secondary data collected is from annual reports of the company

ORGANISATION PROFILE- The Bank has a very humble but a very inspiring beginning. On14th September 1918,"The Saraswat Co-operative Banking Society" was founded. Mr. J.K. Parulkar became its first Chairman, Mr. N.B. Thakur, the first Vice-Chairman, Mr. P.N. Warde, the first Secretary and Mr. Shivram Gopal Rajadhyaksha, the first Treasurer. These were people with deep and abiding ideals, faith, vision, optimism and entrepreneurial skills. These dedicated men in charge of the Society had a commendable sense of service and duty imbibed in them. Even today, our honorable founders inspire a sense of awe and respect in the Bank and amongst the shareholders. The Society was initially set up to help families in distress. Its objective was to provide temporary accommodation to its members in eventualities such as weddings of dependent members of the family, repayment of debt and expenses of medical treatment etc. The Society was converted into a full-fledged Urban Co-operative Bank in the year 1933. The Bank has the unique distinction of being a witness to history. The Bank, which was originally founded in 1918, i.e. close on the heels of the Russian Revolution, also witnessed as a Society and as Bank - the First World War, the Second World War, India's freedom Movement and the glorious chapter of post-independence India. During this cataclysmic cavalcade of history, the Bank as a financial institution and its members could not of course remain unaffected by the economic consequences of the major events. The two wars in particular brought in their wake, paucities of all kinds and realities and stand by its members in distress as a solid bulwark of strength. The Founder Members and the later-day managements of the Bank continued to demonstrate their unwavering faith in the destiny of the common man and the co-operative movement and they encouraged the shareholders to save despite all odds.

Thanks to these sustained and assiduous efforts over 25 years after its inception, the Bank had gained a strong foundation in terms of its membership, resources, assets and profits. By 1942, the Bank was fulfilling all the banking needs of its customers. During the late fifties, the Bank grew from strength to strength. The Bank had established five branches within the city of Mumbai and one each at Pune and Belgaum. In its 50th year, the Bank chose a bee motif to symbolize the Bank's emblem - a fitting and appropriate characteristic of a Bank that believed in hard work, a search for all that is good, a team spirit to achieve its objectives and selfless service to its members and customers. The Bank had grown in stature, progressed in its social and economic objectives and produced an image of what an ideal bank should be. Resultantly, in the year 1977-78, the Bank's gross income crossed the Rs.3.00 crore marks for the first time. In 1988, the Bank was conferred with "Scheduled" status by Reserve Bank of India. The Bank is the first co-operative bank to provide Merchant Banking services. The Bank got a permanent license to deal in foreign exchange in 1978. Presently the Bank is having correspondent relationship in 45 countries covering 9 currencies with over 125 banks. In1992, the Bank completed 75 years. Platinum Jubilee Celebrations were inaugurated on 14th September, 1992 and the Bank also crossed the business level of Rs. 700 Crores. The beginning of the 21st century has been a giant leap forward for the Bank. The Bank chose a path of organic/inorganic growth andourpace of growth accelerated.The Bank's total business which was around Rs.4000 Crore in 2000 almost tripled to Rs.15295 Crore in 2007. In the year 2008, the Bank launched a Branding Initiative. The purpose of such an exercise was to reconfirm the thrust of the Bank on its core values, which can be summed up as a "Sense of Belonging". The name of the Bank should always inspire a Sense of Belonging in all its stakeholders and theBank continues to fulfill the changing needs and expectations of the customer with unflinching gusto and aplomb.

MISSION "To emerge as one of the premier and most preferred banks in the country by adopting the highest standards of professionalism and excellence in all the areas of working."PRODUCTS AND SERVICESProducts and services of Saraswat co-operative bank:- Personal Deposit SchemesSavingsCurrent AccountsTerm Deposit Retail LoansVastu Siddhi Housing LoanSuper-Fast Car LoanSuper-Fast Car loan - High End CarSajawat Loan SchemeSaraswati Education LoanPravasi- Travel LoanGold Loan YojanaMulti-Purpose Loan Other Services VISA Debit Card SMS Banking Easy Pay Investment and Insurance Mutual Fund MILESTONES In the last two decades the Bank has witnessed a steady growth in business and also taken several Strategic Business Initiatives such as undertaking Business Process Reengineering initiative, merging seven Cooperative Banks and then consciously nurturing them. The Bank tied up with VISA International for issuance of Debit Cards. In 2011, the Bank was granted permission for All India Area of Operation by Reserve Bank Of India. The Bank hasan ambitious business expansion plan in place to have a presence in all major cities of the country, reach a business level of Rs.50000 Crores by 2016 and Rs.100000 Crores by 2018. The Bank has a network of 229 fully computerized branches as on 31st March, 2013 covering six states viz. Maharashtra, Gujarat, Madhya Pradesh, Karnataka, Goa and Delhi. The Bank is providing 24-hour service through ATMs at 159 locations. As on 31st March, 2013 the Bank's business had surpassed Rs. 36000 Crores. The Bank has retained its coveted position as ZERO NET NPA Bank for the ninth successive year. It is a matter of immense pride for the Bank that its new Corporate Office at Prabhadevi Mumbai has become operational. The officeestablishesour strong presence in thefinancialcapital of thecountry. The massive edifice in crystal glass in the heartofMumbai gently reminds everyone of the Numero-Unoposition which the Bank holds in the Cooperative Sector. The usage of state of art technology coupled withpersonalambience to make everybody comfortable once again reiterates the Bank's adherence to "Think Global, Act Local". The address of our new Corporate Office is as under:

"Service to the Common Man" has been the motto of Saraswat Bank for the last95 years. Bank in spite of its growth in size has been able to offer to the customersthe dual advantage of "Ability of Big Banks and Agility ofSmall Banks" The Bank still continues to function with the glorious tradition in public services Besides being the largest Urban Co-operative Bank in India, Saraswat Bank has now become the largest in Asia. Saraswat Bank has now229 fully computerized branches as of 31st March 2013,15 Zonal Offices and departments located across 6 States viz. Maharashtra, Goa, Gujarat, Madhya Pradesh, Karnataka and Delhi. Saraswat Bank attributes this success to its undying spirit to serve the common man and to the sharpening of its competitive edge by constantly upgrading technology to match international standards. The Bank is fully computerized and offers convenient working hours. Saraswat Bank has introduced a wide range of credit schemes at attractive interest rates, which has become very popular, especially among the middle-class in view of the easy repayment plans. Bank offers attractive interest rates on deposits and also various add on features at very market competitive rates.

Company Profile of Sangli Branch. Name of the organization: The Saraswat co-operative Bank Limited Address: Stand road, Shastrichowk, Sangli. Telephone No.: 0233 -2332294 Year of establishment: 1st July 2007. Name of Branch Manager: Mr. Sanjay VasantraoBhosale. Turnover 2013-14:- Rs. 98,60.67,872.62

The current branch of Saraswat Cooperative bank earlier was the Annasaheb Karale Cooperative bank. On 1stjuly 2007 Annasaheb Karale Janata co-operative Bank which are situated in Sangli got merged in the SARASWAT CO-OPERATIVE BANK. Also On 1stjuly 2008 the Maratha Bank, Jaisingpur also merged in the Saraswat co-operative Bank at the same branch.Staff members- 15

ORGANISATION STRUCTURE:-

BRANCH MANAGERDY MANAGERDY MANAGER

JUNIOR OFFICERJUNIOR OFFICERJUNIOR OFFICERJUNIOR OFFICERJUNIOR OFFICERJUNIOR OFFICER

OFFICE ASSISTANTOFFICE ASSISTANT

THEORETICAL BACKGROUND3. A Bank:-A Bank is a financial organization which accepts deposits that can be withdrawn onDemand and also lends money to individuals and business houses that need it.

3.1 Structure of banking sector in India:

Image 3.1: Structure of Banking in India

Banking in Indiain the modern sense originated in the last decades of the 18th century. The first banks were Bank of Hindustan (1770-1829) and The General Bank of India, established 1786.

Reserve Bank of India:

The RBI is India's central bank. The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.RBI acts as a banker to the Government and Banks.

Scheduled Bank- All banks which are included in the Second Schedule to the Reserve Bank of India Act, 1934 are scheduled banks. These banks comprise Scheduled Commercial Banks and Scheduled Cooperative Banks. The type of banks comes under these Scheduled Commercial Banks and Scheduled Cooperative Banks can be seen in the above figure.All most all banks are Scheduled banks in India.

1. Commercial Banks-Commercial banks may be defined as, any banking organization that deals with the deposits and loans of business organizations. Commercial banks issue bank checks and drafts, as well as accept money on term deposits.Commercial banks also act as moneylenders, by way of installment loans and overdrafts.Commercial banks also allow for a variety of deposit accounts, such as checking, savings, and time deposit. These institutions are run to make a profit and owned by a group of individuals.

Public Sector Banks-These are banks where majority stake is held by the Government of India.Examples of public sector banks are: SBI, Bank of India, Canara Bank, etc. Private Sector Banks-These are banksmajority of share capital of the bank is held by private individuals. These banks are registered as companies with limited liability.Examples of private sector banks are: ICICI Bank, Axis bank, HDFC, etc. Foreign Banks-These banks are registered and have their headquarters in a foreign country but operate their branches in our country.Examples of foreign banks in India are: HSBC, Citibank, Standard Chartered Bank, etc. Regional Rural Banks-Regional Rural Banks were established under the provisions of an Ordinance promulgated on the 26th September 1975 and the RRB Act, 1976 with an objective to ensure sufficient institutional credit for agriculture and other rural sectors. The area of operation of RRBs is limited to the area as notified by GoI covering one or more districts in the State.RRBs are jointly owned by GoI, the concerned State Government and Sponsor Banks (27 scheduled commercial banks and one State Cooperative Bank); the issued capital of a RRB is shared by the owners in the proportion of 50%, 15% and 35% respectively.Prathama bank is the first Regional Rural Bank in India located in the city Moradabad in Uttar Pradesh.2. Cooperative Banks- A co-operative bank is a financial entity which belongs to its members, who are at the same time the owners and the customers of their bank. Co-operative banks are often created by persons belonging to the same local or professional community or sharing a Common interest. Co-operative banks generally provide their members with a wide range of banking and financial services (loans, deposits, banking accounts etc.). Co-operative Banks differ from stockholder banks by their organization, their goals, their values and their governance. In most countries, they are supervised and controlled by banking Authorities and have to respect prudential banking regulations, which put them at a level playing field with stockholder banks. Depending on countries, this control and Supervision can be implemented directly by state entities or delegated to a co-operative Federation or central body.They provide limited banking products and are specialists in agriculture-related products.Cooperative banks are the primary financiers of agricultural activities, some small-scale industries and self-employed workers.

Co-operative banks function on the basis of "no-profit no-loss".Anyonya Co-operative Bank Limited (ACBL) is the first co-operative bank in India located in the city of Vadodara in Gujarat. Cooperative bankingis retail and commercial banking organized on acooperativebasis. Cooperativebanking institutionstake deposits and lend money in most parts of the world.Cooperative banking systems are also usually more integrated than credit union systems. Local branches of cooperative banks select their own boards of directors and manage their own operations, but most strategic decisions require approval from a central office. Credit unions usually retain strategic decision-making at a local level, though they share back-office functions, such as access to the global payments system, by federating. Banks make money by lending your money out at interest and by charging you for services provided. Banks keep on lending money.The other big revenue items generated by banks are the fees they charge. Bank charge for every service, whether it is for an electronic transaction, or permitting a transfer through the Internet banking system.When banks get profits they invest in other companies and in return they will get money. Co-operative banking, includes retail banking, as carried out by credit unions, Mutual savings and loan associations, building societies and co-operatives, as well as Commercial banking services provided by manual organizations (such as co-operative Federations) to co-operative businesses.

3.2 History of co-operative banks in India For the co-operative banks in India, co-operatives are organized groups of people and jointly managed and democratically controlled enterprises. They exist to serve their Members and depositors and produce better benefits and services for them. Professionalism in co-operative banks reflects the co-existence of high level of skills and Standards in performing, duties entrusted to an individual. Co-operative bank needs Current and future development in information technology. It is indeed necessary for co-Operative banks to devote adequate attention for maximizing their returns on every unit of Resources through effective services. Co-operative banks have completed 100 years of Existence in India. They play a very important role in the financial system. The co- Operative banks in India form an integral part of our money market today. Therefore, a Brief resume of their development should be taken into account. The history of Co- operative bank goes back to the year 1904. In 1904, the co-operative credit society act Was enacted to encourage co-operative movement in India. But the development of co-operative banks from 1904 to 1951 was the most disappointing one. The first phase of co-operative bank development was the formation and regulation of cooperative society. The constitutional reforms which led to the passing of the Government of India Act in 1919 transferred the subject of Cooperation from Government of India to the Provincial Governments. The Government of Bombay passed the first State Cooperative Societies Act in 1925 which not only gave the movement, its size and shape but was a pace setter of co-operative activities and stressed the basic concept of thrift, self help and mutual aid. This marked the beginning of the second phase in the history of Co-operative Credit Institutions. There was the general realization that urban banks have an important role to play in Economic construction. This was asserted by a host of committees. The Indian Central Banking Enquiry Committee (1931) felt that urban banks have a duty to help the small Business and middle class people. The Mehta-Bhansali Committee (1939) recommended that those societies which had fulfilled the criteria of banking should be allowed to work As banks and recommended an Association for these banks. The Co-operative Planning Committee (1946) went on record to say that urban banks have been the best agencies for Small people in who joint stock banks are not generally interested. The Rural Banking Enquiry Committee (1950), impressed by the low cost of establishment and operations recommended the establishment of such banks even in places smaller than taluka towns. The real development of co-operative banks took place only after the recommendations of All India Rural Credit Survey Committee (AIRCSC), which were made with the view to fasten the growth of co-operative banks. The co-operative banks are expected to perform some duties, namely, extend all types of Credit facilities to customers in cash and kind, advance consumption loans, extend Banking facilities in rural areas mobilize deposits; supervise the use of loans etc. The Needs of co-operative bank are different. They have faced a lot of problems, which has Affected the development of co-operative banks. Therefore it was necessary to study this Matter. The first study of Urban Co-operative Banks was taken up by RBI in the year 1958-59. The Report published in 1961 acknowledged the widespread and financially sound Framework of urban co-operative banks; emphasized the need to establish primary urban Co-operative banks in new centers and suggested that State Governments lend active Support to their development. In 1963, Varde Committee recommended that such banks should be organized at all Urban Centers with a population of 1 lakh or more and not by Any single community or caste. The committee introduced the concept of minimum Capital requirement and the criteria of population for defining the urban centre where UCBs were incorporated.3.3 Types of Co-operative Bank- The co-operative banks are small-sized units 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 Reserve Bank of India, they are governed by the Banking Regulations Act 1949 and banking laws (co-operative societies) act, 1965.

The Co-operative banking structure in India is divided into following 5 components:1. Primary Co-operative Credit Society - The primary co-operative credit society is an association of borrowers and non-borrowers residing in a particular locality. The funds of the society are derived from the share Capital and deposits of members and loans from central co-operative banks. The Borrowing powers of the members as well as of the society are fixed. The loans are given to members for the purchase of cattle, fodder, fertilizers, pesticides, etc.2. Central Co-operative banks - These are the federations of primary credit societies in a district and are of two types- Those having a membership of primary societies only and those having a membership of Societies as well as individuals. The funds of the bank consist of share capital, deposits, Loans and overdrafts from state co-operative banks and joint stocks. These banks provide Finance to member societies within the limits of the borrowing capacity of societies. They Also conduct all the business of a joint stock bank.3. State co-operative banks - The state co-operative bank is a federation of central co-operative bank and acts as a Watchdog of the co-operative banking structure in the state. Its funds are obtained from Share capital, deposits, loans and overdrafts from the Reserve Bank of India. The state co-operative banks lend money to central co-operative banks and primary societies and not directly to the farmers.4. Land development banks - The Land development banks are organized in 3 tiers namely; state, central, and primary Level and they meet the long term credit requirements of the farmers for developmental Purposes. The state land development banks oversee the primary land development Banks situated in the districts and tehsil areas in the state. They are governed both by the State government and Reserve Bank of India. Recently, the supervision of land Development banks has been assumed by National Bank for Agriculture and Rural Development (NABARD). The sources of funds for these banks are the debentures 42 Subscribed by both central and state government. These banks do not accept deposits from the general public.5. Urban co-operative bank- The term Urban Co-operative Banks (UCBs), though not formally defined, refers to Primary co-operative banks located in urban and semi-urban areas. These banks, till 1996 were allowed to lend money only for non-agricultural purposes. This distinction does not hold today. These banks were traditionally centered on communities, localities, Work place groups. They essentially lend to small borrowers and businesses. Today, their Scope of operations has widened considerably. The origins of the urban co-operative banking movement in India can be traced to the Close of nineteenth century. Inspired by the success of the experiments related to the co- Operative movement in Britain and the co-operative credit movement in Germany, such Societies were set up in India. Co-operative societies are based on the principles of Cooperation, mutual help, democratic decision making, and open membership. Co-operatives represented a new and alternative approach to organization as against Proprietary firms, partnership firms, and joint stock companies which represent the Dominant form of commercial organization. They mainly rely upon deposits from Members and non-members and in case of need, they get finance from either the district Central co-operative bank to which they are affiliated or from the apex co-operative bank if they work in big cities where the apex bank has its Head Office. They provide credit to Small scale industrialists, salaried employees, and other urban and semi-urban residents.

Co-operative banks also perform the basic banking functions of banking but they differFrom commercial banks in the following respects- Commercial banks are joint-stock companies under the companies act of 1956, or Public sector bank under a separate act of a parliament whereas co-operative Banks were established under the co-operative societys acts of different states. Commercial bank structure is branch banking structure whereas co-operative Banks have a three tier setup, with state co-operative bank at apex level, central /District co-operative bank at district level, and primary co-operative societies at Rural level. Only some of the sections of banking regulation act of 1949 (fully applicable to Commercial banks), are applicable to co-operative banks, resulting only in partial Control by RBI of co-operative banks and Co-operative banks function on the principle of cooperation and not entirely on Commercial parameters.3.4 RBI Policies for co-operative banks

The RBI appointed a high power committee in May 1999 under the chairmanship of Shri. K. Madhava Rao, Ex-Chief Secretary, Government of Andhra Pradesh to review the Performance of Urban Co-operative Banks (UCBs) and to suggest necessary measures to Strengthen this sector. With reference to the terms given to the committee, the committee identified five broad objectives: To preserve the co-operative character of UCBs To protect the depositors interest To reduce financial risk To put in place strong regulatory norms at the entry level to sustain the Operational efficiency of UCBs in a competitive environment and evolve Measures to strengthen the existing UCB structure particularly in the context of Ever increasing number of weak banks. To align urban banking sector with the other segments of banking sector in the Context of application or prudential norms in to and removing the irritants of dual Control regime RBI has extended the Off-Site Surveillance System (OSS) to all non-scheduledUrban co-operative banks (UCBs) having deposit size of Rs. 100 Crores and above.

3.5 Bank Loans-A) Meaning of Loans- The term loan refers to the amount borrowed by one person from another. The amount is in the nature of loan and refers to the sum paid to the borrower. Thus, from the view point of borrower, it is borrowing and from the view point of bank, it is lending. Loan may be regarded As credit granted where the money is disbursed and its recovery is Made on a later date. It is a debt for the borrower. While granting Loans, credit is given for a definite purpose and for a predetermined Period. Interest is charged on the loan at agreed rate and intervals of Payment. Advance on the other hand, is a credit facility granted by the bank. Banks grant advances largely for short-term purposes, such As purchase of goods traded in and meeting other short-term trading Liabilities. There is a sense of debt in loan, whereas an advance is a Facility being availed of by the borrower. However, like loans, advances are also to be repaid. Thus a credit facility- repayable in installments over a period is termed as loan while a credit facility repayable within One year may be known as advances. However, in the present lesson these two terms are used interchangeably. Bank loans are the easiest source of availing finance. A bank loan is an extension of credit by a bank to a customer or business; it has to be paid along with interest

B) Definition of loans- An arrangement in which a lender gives money or property to a borrower, and the borrower agrees to return the property or repay the money, usually along with interest, at some future point(s) in time. Usually, there is a predetermined time for repaying a loan, and generally the lender has to bear the risk that the borrower may not repay a loan (though modern capital markets have developed many ways of managing this risk)Features of Bank Loans:Bank loans have the following characteristics:1. It is a short-term source of finance.2. A bank loan may be either secured or unsecured depending upon the circumstances.3. The interest charged by the bank on such a loan may be either fixed or variable.4. If mortgage loan is to be obtained, the borrower has to pay a number of fees such as title searching fees, application fees, inspection fees, etc.Advantages of Bank Loans:Bank loans offer the following advantages:1. They can be easily procured.2. They can be used for short-term as well as medium-term financing.3. Interest paid on a bank loan is tax deductible expenditure.Disadvantages of Bank Loans:The disadvantages of bank loans are:i. Some bank loans carry prepayment penalty.ii. Borrowing too much as a bank loan can lead to decreased cash flow.iii. In most cases, the bank does not disburse the whole amount of loan applied for, it pays cash lower than the loan demanded.3.6 Types of loan-There are different types of loan:1. Open-Ended and Closed-Ended Loans-Open-ended loans are loans that you can borrow over and over. Credit cards and lines of credit are the most common types of open-ended loans. With both of these loans, you have a credit limit that you can purchase against. Each time you make a purchase, your available credit decreases. As you make payments, your available increases allowing you to use the same credit over and over. Closed-ended loans cannot be borrowed once theyve been repaid. As you make payments on closed-ended loans, the balance of the loan goes down. However, you dont have any available credit you can use on closed-ended loans. Instead, if you need to borrow more money, youd have to apply for another loan. Common types of closed-ended loans include mortgage loans, auto loans, and student loans.2. Secured and Unsecured Loans Secured loans are loans that rely on an asset as collateral for the loan. In the event of loan default, the lender can take possession of the asset and use it to cover the loan. Interests rates for secured loans may be lower than those for unsecured loans. The asset may need to be appraised before you can borrow a secured loan. A secured loan is loan in which he borrower pledges same asset (for example a car or property) as collateral for the loan.A mortgage loan is very common type of debt instrument, used by many individuals to purchase housing in this arrangement, the money is used to purchase the property. Unsecured loans dont have asset for collateral. These loans may be more difficult to get and have higher interest rates. Unsecured loans rely solely on your credit history and your income to qualify you for the loan. If you default on an unsecured loan, the lender has to exhaust collection options including debt collectors and lawsuit to recover the loan.Unsecured loans are monetary loans that are not secured against the borrower asset. These may be available from financial institution.3. Term Loan: Meaning:Term loan is a medium-term source financed primarily by banks and financial institutions. Such a type of loan is generally used for financing of expansion, diversification and modernization of projects so this type of financing is also known as project financing. Term loans are repayable in periodic installment. Features of Term Loans:Term loan is a part of debt financing obtained from banks and financial institutions.The basic features of term loan have been discussed below:1. Security:Term loans are secured loans. Assets which are financed through term loans serve as primary security and the other assets of the company serve as collateral security.2. Obligation:Interest payment and repayment of principal on term loans is obligatory on the part of the borrower. Whether the firm is earning a profit or not, term loans are generally repayable over a period of 5 to 10 years in installments.3. Interest:Term loans carry a fixed rate of interest but this rate is negotiated between the borrowers and lenders at the time of dispersing of loan.

4. Maturity:As it is a source of medium-term financing, its maturity period lies between 5 to 10 years and repayment is made in installments.5. Restrictive Covenants:Besides asset security, the lender of the term loans imposes other restrictive covenants to themselves. Lenders ask the borrowers to maintain a minimum asset base, not to raise additional loans or to repay existing loans, etc.6. Convertibility:Term loans may be converted into equity at the option and according to the terms and conditions laid down by the financial institutions. Advantages of Term Loans:Term loans are one of the important sources of project financing.i. From Point of View of the Borrower: Cheap:It is a cheaper source of medium-term financing. Tax Benefit:Interest payable on term loan is a tax deductible expenditure and thus taxation benefit is available on interest. Flexible:Term loans are negotiable loans between the borrowers and lenders. So terms and conditions of such type of loans are not rigid and this provides some sort of flexibility. Control:Since term loans represent debt financing, the interest of the equity shareholders are not diluted.

ii. From Point of View of the Lender:Secured:Term loans are provided by banks and other financial institutions against securityso term loans are secured.Regular Income:It is obligatory on the part of the borrower to pay the interest and repayment of principal irrespective of its financial positionhence the lender has a regular and steady income.Conversion:Financial institutions may insist the borrower to convert the term loans into equity. Therefore, they can get the right to control the affairs of the company. Disadvantages of Term Loans:Term loans have several disadvantages which are discussed below.i. From Point of View of the Borrower:Obligation:Yearly interest payment and repayment of principal is obligatory on the part of borrower. Failure to meet these payments raises a question on the liquidity position of the borrower and its existence will be at stake.Risk:Like any other form of debt financing term loans also increases the financial risk of the company. Debt financing is beneficial only if the internal rate of return of the concern is greater than its cost of capital; otherwise it adversely affects the benefit of shareholders.Interference:In addition to collateral security, restrictive covenants are also imposed by the lenders which lead to unnecessary interference in the functioning of the concern.

ii. From Point of View of the Lender:Negotiability:Terms and conditions of term loans are negotiable between borrower and lenders and thus it sometimes can affect the interest of lenders.Control:Like other sources of debt financing, the lenders of term loans do not have any right to control the affairs of the company.

DATA ANALYSIS AND INTERPRETATION

The secondary data is collected with the help of bank register and other records. The loan schemes of the three financial years are studied and the analysis is done. The personal as well corporate loan schemes are analyzed.

The Loan Rates of Saraswat Co-operative Bank is as follows:Table No ASerial No.Types of loans2011-20122012-20132013-2014

1.Vastusiddhi Housing Loan9.50%10.40%11.75%

2.Saraswat Education Loans13%13%14%

3.Super fast car loans10.40%10.40%10.50%

4.Vehicle Loans10.40%10.40%11.50%

5.Multipurpose Loans16.50%16.50%16.50%

6.Udyogini Loans14.50%14.50%14.50%

7.Multipurpose loans Against FDFD interest rate +1%FD interest rate +1%FD interest rate +1%

8.Personnel loans Against FDFD interest rate +1%FD interest rate +1%FD interest rate +1%

9. Corporation loans against FDFD interest rate +1%FD interest rate +1FD interest rate +1%

The Rates of Reserve Bank of India are as follows:Table No BRBI RatesBank Rates

2011201220132014

Cash reserve ratio 6.00%4.00%4.00%4.75%

Statutory liquidity ratio 23.00%23%23%24.00%

Interpretation: The RBI has cut the Cash Reserve Ratio (CRR) rate as well as the Statutory Liquidity Ratio (SLR) in the year 2012 and 2013. Despite of decrease in these rates, bank has not cut down their interest rates.

1. Vastusiddhi Housing Loans-

Table No.1Serial No.YearTotal Loans disbursedHousing Loans disbursed% of Housing Loans among total loans

1.2011-201210,84,28,7822,57,37,50023.74%

2.2012-20135,68,08,1001,40,00,00024.64%

3.2013-20143,41,35,70088,42,00025.90%

Graph No.1

Interpretation:Above table and graph shows that, In 2011-2012 bank provided total loans of Rs. 10,84,28,782 and out of this Rs.2,57,37,500 for Vastusiddhi Housing loan. It is 23.74% of total loans disbursed. In 2012-2013 banks granted total loan of Rs. 10,68,08,100 and out of this Rs. 1,40,00,000 for Vastusiddhi housing loan.The share is of 24.64% of total loans disbursed. In 2013-2014 bank provides total loan of Rs.3,41,35,700 and out of this Rs. 88, 42,000 for Vastusiddhi housing loans that is 25.90 %.As per the survey it seen that the response for Vastusiddhi loan is increased. There is high scope for increase in housing loan demand.

2. Saraswat Education Loans-Table No.2

Serial No.YearTotal Loan Disbursed

Educational Loans Disbursed% of EducationLoans among total Loans

1.2011-201210,84,28,7821,00,0000.09%

2.2012-2013--

3.2013-2014--

Graph No.2

Interpretation-Above table and graph shows that, In 2011-2012 Bank provide total loans of Rs. 10,84,28,782 and out of this Rs. 1,00,000 for Education Loans that is 0.09%. In 2012-2013, 2013-2014 no educational loans were provided. On the basis of survey it is seen that, the demand and scope of the education loan is decreased. Bank has a scope to attract towards educational loans.

3. Super Fast Car Loans-

Table No. 3Serial No.YearTotal LoanDisbursedSuperfast car LoansDisbursed% of Superfast car loans among total loans

1.2011-201210,84,28,7821,39,20,00012.83%

2.2012-20135,68,08,10042,55,0007.49%

3.2013-20143,41,35,7008,39,0002.45%

Graph No.3.

Interpretation-Above table and graph shows that, In 2011-2012 bank disbursed total loans of Rs. 10,84,28,782 and out of this Rs. 1,39,20,200 for Super fast car loans. The share is 12.83% of total loans disbursed. In 2012-2013 bank gives total loan of Rs. 5,68,08,100 and out of thisRs.42,55,000 for superfast car Loans that is 7.49%. In 2013-2014 bank provides total loans of Rs. 3,41,35,700 and out of this Rs. 8,39,000 for superfast car loans, 2.45% of total loans disbursed.From that information conclude that,The rate of superfast car loan has decreased; the scope of superfast car loan is declined. Bank has to give more efforts to attract more customers towards superfast car loan. Interest rates of bank on super fast car loan are increased in 2013-2014.

4. Vehicle Loans-

Table No.4Serial No.YearTotal Loans DisbursedVehicleLoans disbursed% of Vehicle Loans among total loans

1.2011-201210,84,28,7825,74,0000.52%

2.2012-20135,68,08,1001,98,0000.34%

3.2013-20143,41,35,7003,69,0001.08%

Graph No.4

Interpretation- Above table and graph shows that, In 2011-2012 bank disbursed total loans of Rs. 10,84,28,782 and out of this Rs. 5,74,000 for vehicle loans that share is 0.52% of total loans. In 2012-2013 bank given total loans of Rs. 5,68,08,100 and out of this Rs. 1,98,000 for vehicle loans. It is 0.34% of total loans disbursed. In 2013-2014 bank provide total loans of Rs. 3,41,35,700 and out of this Rs.3,69,000 for vehicle loans that is 1.08%.

The scope of vehicle loan is high. It is seen that bank adopts proper efforts to attracting customers towards vehicle loan.

5. MPLS Loans-Table No.5Serial no.YearTotal Loans disbursedMPLS against Loans disbursed% of housing loans among total loans

1.2011-201210,84,28,782-

2.2012-20135,68,08,10083,0000.14%

3.2013-20143,41,35,7005,75,0001.68%

Graph No.5

Interpretation-Above table and graph shows that, In 2011-2012 bank provides total loans Rs.6,70,08,782 but MPLS loans are not given in that year. In 2012-2013 bank disbursed total loans of Rs. 5,68,08,100and out of this Rs. 83,000 is for MPLS loans. The share is 0.14% of total loans disbursed. In 2013-2014 bank gives total loans Rs. 3,41,35,700 and out of this Rs. 5,75,000 that is 1.68% of total loans.From the data it can be said that the MPLS loans percentage are increased year after year. A customer has positive response towards MPLS loans.

6. Udyogini Loans- Table No.6Serial no.YearTotal Loans disbursedUdyogini Loans disbursed% of Udyogini loans among total loans

1.2011-201210,84,28,7822,20,0000.20%

2.2012-20135,68,08,1003,70,0000.65%

3.2013-20143,41,35,700-

Graph No.6

Interpretation-Above table and graph shows that, In 2011-2012 bank disbursed total loans of Rs. 10,84,28,782 and out of this Rs. 2,20,000for Udyogini Loan that is 0.20% of total loans disbursed. In 2012-2013 bank gives total loans of Rs. 5,68,08,100 and out of this Rs. 3,70,000 for Udyogini loan. The share is 0.65% of total loans. In 2013-2014 bank has not given Udyogini loan.

It is seen that at the last year the scope of Udyogini loan is at par decreases, there is no any response occurred for Udyogini loan at last year 2013-2014.

7. Multipurpose Loans against FD-Table No.7Serial No.YearTotal Loans DisbursedMultipurpose Loans disbursed% of Housing Loans among total Loans

1.2011-201210,84,28,78255,98,0005.16%

2.2012-20135,68,08,10030,27,0005.32%

3.2013-20143,41,35,7004,49,5001.31%

Graph No.7

Interpretation- Above table and graph shows that, In 2011-2012 bank gives total loans of Rs. 10,84,28,782 and out of this Rs. 55,98,000 for Multipurpose Loan. It is 5.16% of total disbursed. In 2012-2013 bank provide total loans of Rs. 5,68,08,100 and out of this Rs. 30,27,000 for Multipurpose loan that is 5.32% of total loans. In 2013-2014 bank disbursed total loans of Rs. 3,41,35,700 and out of this Rs. 4,49,500 provide for Multipurpose that is 1.31%. While survey it is observed that the rate of sanctioning multipurpose loan against Fixed Deposits is fluctuating. Co-operative bank has higher interest rates as compared to other Commercial Banks. It is very beneficial type of loan by which people can fulfill their need by availability of finance by the bank.

8. Personal loans against fixed deposits-Table No.8Serial No.YearTotal Loans disbursedLoans Against FD disbursed% of Loans against FD among total loan

1.2011-201210,84,28,7822,08,59,28219.23%

2.2012-20135,68,08,1001,32,10,60023.25%

3.2013-20143,41,35,7001,87,41,70054.90%

Graph No.8

Interpretation-Above table and graph shows that, In 2011-2012 bank disbursed total loans of Rs. 10,84,28,782 and out of this Rs. 2,08,59,282 for Personnel loans against Fixed deposit that is 19.23% of total loans disbursed. In 2012-2013 bank given total loans of Rs. 5,68,08,100 and out of this Rs.1,32,10,600 for personnel loans against Fixed Deposit. The share is 23.25% of total loans. In 2013-2014 bank provided total loans of Rs. 3,41,35,700 and out of this Rs. 1,87,41,700 for personnel loans against fixed Deposit that is 54.90%.

From the survey it is concluded that bank gives personal loans against fixed deposit is increased. People can take loans from bank by keeping fixed deposit.

9. Corporation Loan against FD:-Table No.9Serial No.YearTotal Loans DisbursedCorporate loans against FD disbursed% of corporate loans against FD among total loans

12011-201210,84,28,7824,14,20,00038.20%

22012-20135,68,08,1001,91,88,50033.77%

32013-20143,41,35,70043,19,50012.65%

Graph No.9

Interpretation-Above Table and Graph shows that, In 2011-2012 Bank provided total loans of Rs. 10,84,28,782 and out of this Rs. 4,14,20,000 for Corporate Loans Against FD that is 38.20%. In 2012-2013 Bank provide total loans of Rs. 5,68,08,100 and out of this Rs. 1,91,88,500 for Corporate Loans against FD that is 33.77%. In 2013-2014 Bank provide total loans of Rs. 3,41,35,700 and out of this Rs. 43,19,500 for Corporate Loans Against FD that is 12.65%.

From the data, it is seen that the rate of corporate loan given by the bank to their customers is lower down. So, that bank has to give more efforts to attract more customers for corporate loan and must give financial support to development of corporate sector.

Findings The rates of all loan schemes have increased and has not affected by the RBI rates (Table No A and B). The demand and scope of Vastusiddhi housing loan is increased, which is beneficial to people to fulfill their basic shelter need. (Table No.1) Demand and scope of the Education loan is decreased as seen in the data. (Table No.2) Demand of Superfast car loan is decreased as seen in survey. (Table No.3) The trend and demand of Vehicle loan is increased of two wheeler purchasing.. (Table No.4) MPLS Loans having positive response from customer. (Table No.5) At early stage the demand for Udyogini loan scheme is increased but after that at current stage there is no customer found who opted for Udyogini loan of corporate loan scheme. (Table No.6) The demand of multipurpose loan against fixed deposit is lower down as per the survey. The price of household goods is decreasing day by day due to saturation in the market; this might be the reason behind decrease in Multipurpose Loans. (Table No.7) Most of the people prefer to take Personal loan against fixed deposit which is seen in the observation. The interest rate against FD is lower than the other loans which customer prefers to take loans against FD. (Table No.8) The Corporate loan against fixed deposit is sloping down as seen in the loan scheme study. (Table No.9) Bank provides various loan schemes to their customers but some of that are not much demanded by the customers as like Education loan, Superfast car loan, Multipurpose loan against fixed deposit as well as Udyogini loan, Corporate loan against fixed deposit are the of loans are not much demanded. Some types of loan schemes which provided by the bank are rapidly growing of its demand and expansions, which includes Housing loan, Vehicle loan, Personal loan against fixed deposit.SuggestionsThe suggestions based on findings are as follows: The loan facility provided by bank is one of the core banking function. Bank provides various types of loan schemes to their customers but some of the schemes are not much demanded by the customers such that Education Loans, superfast car loans, multipurpose loans so that bank has to give more efforts to attract more customers towards various types of loan schemes. Bank has to show the availability and benefits of loan schemes to their customers. House loans are one of the types of term loans. To avail the tax benefits people attracted towards the Housing loans. Documentation for education is a lengthy process. This is because repayments start after when the education is completed and the student becomes earned person. This takes lots of time. That is why the documents required are many in numbers. Bank can take support of advertisement media to learn about the loan schemes which shows the rate of interest, loan repayment period, required documents, time period for sanctioning loan and also reputation of the bank in the market. Bank also have to take affordable rate of interest on loan to their customers by the help of which most of the people are highly attracted towards bank and its various loan scheme facility.

CONCLUSION GENERAL CONCLUSION: Saraswat bank plays a vital role in the co-operative sector. Bank having different types of loans that plays an effective role in banking financial system. Loan is an amount given for specified period and is recoverable with a particular interest rate. Loans caries a specific rate of interest as agreed between the lender and the borrower.

SPECIFIC CONCLUSION: Loan is the lifeblood of the banks. Saraswat Co-operative Bank has introduced a wide range of credit schemes at attractive interest rates, which has become very popular, especially among the middle-class in view of the easy repayment plan. Bank offers attractive interest rates on loan against deposits The Housing loan is preferred by the customer despite of increase in its interest rates as it provides tax benefits too. The car loan has reduced its attractiveness. Two wheeler loans are having the more demand and less documentation makes it convenient. The corporate loans have reduced its percentage.

A.G.I.M.S., SANGLIPage 26