A

PROJECT REPORT
ON
“ANALYSIS OF HOME LOAN IN BASSEIN CATHOLIC CO-OPERATIVE BANK
LTD.(SCHEDULED BANK)”

FOR
BASSEIN CATHOLIC CO-OPERATIVE BANK LTD.(SCHEDULED BANK)

SUBMITTED BY

UNDER THE GUIDANCE OF

TO

IN PARTIAL FULFILLMENT OF

MASTER’S DEGREE IN BUSINESS ADMINISTRATION

1
“ANALYSIS OF HOME LOAN IN BASSEIN CATHOLIC CO-OPERATIVE BANK
LTD.(SCHEDULED BANK)”

Sr.No. Topic Page No.

I Introduction 2-7
1.1 Introduction of Project 2
1.2 Objective of the study 4
1.3 Scope of the study 5
1.4 Limitation of study 6
1.5 Rational of the study 7

II Bassein Catholic Co-Operative Bank Ltd 9-18

2.1 Mission , Vision & History 14
2.2 About organization 15
2.3 Awards 16
2.4 Board of directors 17

III Review Of Literature 19-21

IV Research Methodology 22-23

4.1 Research Design 22
4.2 Source Of Information 23

V Analysis & Observation of Data 24-39

VI Findings 40-41

VII Conclusions 42-43

VIII Suggestions 44-45

Bibliography 46
Annexure 47-48

2
 LIST OF TABLE

Sr. No. Context Page No.

1 Amount Of Loan Sanction And Disbursement 33
2 Amounts of Sanction and Disbursement during each 34
month.
3 Customer Satisfactions From Home Loan Procedure of 36
Bank
4 Customer Satisfaction From Documentation of Bank 37
5 Respondents to Interest Rate of Bank 38
6 Respondents to Choice 39

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 LIST OF GRAPH
Sr. No. Name of Graph Page No.

1 Comparison Of Sanction And Disbursement Amount 33

2 Comparison of Sanction And Disbursement Amount on 35
monthly report
3 Comparison Of customer satisfaction 36
4 Comparison Of customer satisfaction from 37
Documentation
5 Comparison Of respondents to interest rate 38
6 Comparison Of respondents to bank choice 39

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 Declaration

Ithe undersigned hereby declare that the project report entitled “Analysis Of Home Loan In
Bassein Catholic Co-Operative BankLtd.(Scheduled Bank)”,submitted by me is based on
actual work carried out by me under the guidance of . Any reference to work
done by any other person or institute or any material obtained from other source have been
duly cited and referenced. It is further stated that this work is not submitted anywhere else for
any examination.

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6
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 ACKNOWLEGEMENT

The satisfaction of completion of any successful task is incomplete without mentioning

the name of people who made it encouragement crowned our efforts with success.

I have a pleasure in submitting the project report & I take this opportunity to express
my sincere gratitude to all those who have helped me in this completion of this project report.

The MBA curriculum given me a unique opportunity to be in association with one of

the largest multinational company in the country.

I am extremely grateful to mam, HOD of our Institute for giving me the opportunity to
work on the project.

My heartily gratitude to all those who have directly or indirectly given assistance in
making this project easier & possible.

EXECUTIVE SUMMARY
8
9
 CHAPTER - 1

1.1 INTRODUCTION

1.2 OBJECTIVES OF THE PROJECT

1.3 SCOPE OF PROJECT

1.4 LIMITATIONS OF STUDY

1.5 RATIONALE OF THE STUDY

1.1 INTRODUCTION

The Title of the project report is Analysis Of Home Loan In Bassein Catholic Co-Operative
Bank Ltd. Today the base of the country economic development and trade is depending upon
banking and credit structure of economy.
The financial structure is the foundation of credit and capital market of the economy. Which
solely depend upon the banking business in the country. The basic foundation at any bank is
its deposit patterns and Advances come from the deposits which the public keeps in the bank

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always in a particular ratio and proportion, no bank can grant loan more than its deposit
structure. The some technique of loan and Advances in applied all over the word.
Types of Loans and Advances
1. Cash Credit
2. Over Draft
3. Loan System
1. Cash Credit System
Cash credit system is method of lending by bank customer produce tangible assets as a security
to cover the amount borrowed from the banker. The borrower is charged interest on actual
amount utilized by him and for the period of actual utilization only.
2. Over Draft
Current account holder is permitted by bank to banker to draw more than what stands to his
credit, advance is called as Overdraft. Bank of the basis of written application and a promissory
not signed by the customer.
3. Loan system
Under this system credit is given for define purpose and for a predetermined period. Normally
these loans are repayable in installments loan are granted for short, medium and long period.
A. Short Term Loan
This type of loan is given for short period and such type of loan repayment period is very short.
These loans are given to meet the working capital need of borrower’s short term.
B. Medium Term Loan
These are repayable over a period raging from 1.5 year and are granted for the purpose of
durable goods like tractors and vehicle, equipments etc.
C. Long Term Loan : Long term loan called term loan extended by bank and other term
lending institutions for meeting the requirement of capital investment in Industry/
Agriculture.
D. Composite Loan
Composite loan is given for both purpose for buying equipment and for working capital small
borrower is called composite loan.
E. Consumer Loan/ Consumption Loan
Bank provide on a limited scale to meet the medical and education expenses and expenses
relating to marriage and other religious ceremonies. Consumer loan are given for purchase
equipment, product like TV, fridge, vehicle etc.

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 1.2 OBJECTIVE OF THE PROJECT

1. To study the Home loan scheme and it’s procedure.

2. To study the documents required for sanctioning Home loan.
3. To analyze the performance of Home Loan given by Bassein catholic co-operative bank for
the period 2011-12 to 2013-14.

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 1.3 SCOPE OF PROJECT

1. To know Home loan scenario of co-operative bank.

2. To understand the current position about the awareness of home loan.
3. To learn various norms and requirements of documents relating to home loan.
4. To understand how home loans are contributing to bank’s performance.
5. To understand how basic needs of home are satisfied by bank’s by providing loan’s.
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 1.4 LIMITATIONS OF THE STUDY

1. 1.The project was restricted to only one banks comparative analysis of other banks was not
possible.
2. 2.The study is based on the data of past three years only from 2010-11 to 2013-14
3. 3.As majority of the customers are employees of the bank, they might be scared in giving
the information.
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 1.5 RATIONALE OF THE STUDY

TO THE BANK-

The study of loan procedure and customer satisfaction of bassein catholic co-operative bank
will help the bank to know about their current position in loans and it’s procedure so it will be
beneficial for the bank to understand their customer response to loans scheme and also to

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understand their satisfaction level so they can make necessary and important modification for
better performance.

TO RESEARCHER-

This project has given knowledge about the loan it’s concept and also the
procedure. The project was carried out in co-operative bank so it will be beneficial to know the
position of co-operative bank and its loan scheme as compared to other banks.

TO SOCIETY-

As the project is based on Home loan and today all people are very familiar to loan
concept and they are very interested in taking loan for their needs according to their
requirements the project report will help them to know the loan procedure of bassein catholic
co-operative bank to understand their loan scheme and its procedure.

CHAPTER – 2

16
 2.1 ANALYSIS OF HOME LOAN IN BASSEIN
CATHOLIC
CO-OPERATIVE BANK LTD.
2.2 ABOUT ORGANATION
2.3 AWARDS
2.4 BOARD OF DIRECTOR'S

INDUSTRY PROFILE

INDIAN BANKING SECTOR

Banking in India has its origin as early as the Vedic period. It is believed that the
transaction from money lending to banking must have occurred even before Manu, the great

17
Hindu jurist, who has devoted a section of his work to deposits and advances and laid down
rules relating to rates of interest. During the mogul period, indigenous bankers played very
important role in lending money and financing foreign trade and commerce.

During the days of East India Company, it was the turn of the agency houses to carry
on the banking business. The General Bank of India was the first joint stock Bank to be
established in the year 1786. The others which followed were the Bank of Hindustan and
Bengal Bank. The Bank of Hindustan is reported to have continued till 1906 while the other
two failed in the meantime.

In the first half of the 19th century the East India Company established three banks; the
Bank of Bengal in 1809, the bank of Bombay in 1840 and Bank of Madras in 1843. These three
banks also known as presidency Banks were independent units and functioned well. These
three banks were amalgamated in 1920 and a new bank. The imperial Bank of India was
established on 27th January 1921. With the passing of the state Bank of India Act in 1955 the
undertaking of the imperial Bank of India was taken over by the newly constituted State Bank
of India. The Reserve Bank which is Central Bank was created in 1935 by passing Reserve
Bank of India Act 1934. In the wake of the Swadeshi Movement, a number of banks with Indian
management were established in the country namely, Punjab National Bank Ltd, Bank of India
Ltd, Canara Bank Ltd, Indian Bank Ltd, the Bank of Baroda Ltd, the Central Bank of India
Ltd, On July 19, 1969, 14 major of the country were nationalized and 15th April 1980
six more commercial private sector banks were also taken over by the government.

PUBLIC SECTOR BANKS

Before the independence, the banking system in India was primarily associated with
urban sector. After independence, the banks had to spread out into rural area and un-banked
areas and make credit available to people of those areas. In 1969, the government nationalized
14 major commercial banks. Still the wide disparities continued. To reduced the disparities the
government nationalized 6 more commercial banks in 1980 government came to own 28 banks
including SBI and its 7 subsidiaries. Today, we are having a fairly well developed banking

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system with different classes of banks-public sector banks, foreign banks, and private sector
banks-both old and new generation. In July 1993, New Bank of India was merged with Punjab
National Bank. Now, there are 27 banks in the public sector viz. State Bank of India and its 7
associates, 19 commercial banks exclusive of Regional Rural.

“Improving profitability in general requires efforts in several directions, i.e. cutting in

cost, improving productivity, and better recovery of loan and to reduce high level of NPA’s”.
The banks have to build up the cost-benefit culture in their operations. When there is a thin
margin in banking operation, the banks have to increase the turnover. Previously, Indian banks
were relying on high credit deposit ratio. Now, banks have to depend on the volume of the
business turnover. The returns on assets have to be improved.

Further, the banks compare them with the highly profitable bank with regards to
operating expenses. They have to ensure that each every account is profitable and product
should be such, while generates more profit.

In terms of sheer geographical spread, the banking system is the largest. The statistics
are as follows: a network of 64000, branches-one branch for every 14000 Indian with over 64
crores customers. This labour intensive network has built-in cost, which makes the banks
inherently uncompetitive. Reduction of branches to achieve cost saving has not received a
crunch to drive as it should. Banks are characterized by mammoth branch network, huge work
force, relatively lesser mechanization, and huge volume but of less value business transactions,
social objectives and their own legacy system and procedures.

CHALLENGES FOR THE BANKING SECTOR

Indian banks functionally diverse and geographically widespread have played a crucial
role in the socio-economic progress of the country after independence. Growth of large number
of medium and big industries and entrepreneurs in diverse fields were the direct results of the
expansion of activities of banks. The rapid growth, forever lead to strains in the operational

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 efficiency of the banks and the accumulation of non-performing assets (NPA’s) in their loans
portfolio.

The uncomfortably high level of NPA’s of banks however is a cause for worry and it
should be brought down to international acceptable level for creating a vibrant and competitive
financial system. NPA’s are serious strains on the profitability of the banks as they cannot book
of income on such accounts and their funding cost provision requirement is a charge on their
profit. Although S & P cited as a reason for mounting of NPA’s priority sector lending, outdated
legal system which not only encourages the incidence of NPA’s but also prolongs their
existence by placing a premium on default and delay in finalization of rehabilitation packages
by the Board for Industrial and Financial Reconstruction are some of the major causes for the
rising of NPA’s.

The following deficiencies were noticed in managing Credit Risk:-

 The absence of written policies.

 The absence of portfolio concentration limits.
 Excessive centralization or decentralization of lending authorities.
 Cursory financial analysis of borrower.
 Infrequent customer contact.
 Inadequate checks and balance in credit process.
 The absence of loan supervision.
 A failure to improve collateral position as a credit deteriorates.
 Excessive overdraft lending.
 Incomplete credit files.
 The absence of the assets classification and loan-loss provisioning standar

The co-operative sector in India is divided into two major segments, viz., the Urban
Cooperative Banks (UCBs) and Rural Cooperatives. As names indicate, UCBs concentrate on
credit delivery in urban areas, while Rural Cooperatives concentrate on rural areas. The
structure of the cooperative banking sector in India is provided in the figure

STRUCTURE OF COOPERATIVE CREDIT INSTITUTIONS IN INDIA

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 Cooperative Credit Institutions

Urban
Cooperative Rural Cooperative
Banks Credit Institutions

Scheduled Short-Term Long-Term

UCBs Non-Scheduled
UCBs

State
Multi-State Multi-State State Cooperative
Single State Single State Cooperative Agricultre and
Banks Rural
Development
Banks
Tier I
District Central
Cooperative
Banks
Tier II Primary
Cooperative
Agricultre and
Rural
Primary Development
Agricultural Banks
Credit
Societies

The regulation of banking-related activities of the UCB sector is under the purview of
the Reserve Bank, while the incorporation/registration and management-related activities are
regulated by the Registrar of Cooperatives Societies or the Central registrar of cooperative
societies as the case may be. In order to deal with the issue of dual control in the regulatory
framework of the urban cooperative sector, MOUs have been entered into with the Central
Government and all 28 States. Task Forces for Cooperative Urban Banks (TAFCUBs) have
also been constituted in all these States and a Central TAFCUB has been constituted for the
multi-State UCBs. The regulation and supervision of the rural cooperative sector (State

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Cooperative Banks (SCBs) and District Central Cooperative Banks (DCCBs)) is much more
complex with a triangular structure, where the Registrar of cooperatives, the Reserve Bank and
the NABARD are entrusted with separate responsibilities. For the rural cooperative sector,
MOUs have been entered into by majority of State Governments with the NABARD.

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 2.1
“Bassein Catholic Co-Operative Bank Ltd.”
Vision-

‘HELP YOU TO GROW BEYOND’ this is the motto of bank and for this the bank want to
take important steps like expansion of branches to all over the India .

Mission-

Creating healthy relationship with employees/customer and giving training to

employees which will effect in their performance and result in better customer satisfaction.

HISTORY-

Bassein Catholic Co-op.Bank Ltd., was established as Credit Co-operative Society – by

Rev.Msgr.P.J.Monis on 6th February 1918 with the help of some social activist in Vasai, which
has large Christian population.

On 13th March, 1986, the Credit Society was converted into an Urban Co-operative Bank and
on 1st December 1990, it was awarded the prestigious status of a Schedule Bank by the Reserve
Bank of India. Since then the Bank has grown leaps and bounds registering deposit growth
from `65.58 crore in 1990 to `2974.16 crore in 2013 and advances growth of `39.58 crore to
`2036.04 crore during the same period. The Bank achieved a net profit of `65.71 crore for the
year ended 31st March 2013 and was also successful in reducing gross NPA to 2.53% with net
NPA 0%. With the net worth of `491.11 crore the Bank has maintained industry best CRAR of
20.59% as on 31.03.2013.

With the present business mix of more than `5000 crore, the Bank is looking at bigger targets
of business mix of more than `10000 crore in couple of years.

The Bank has 86000 active members.

The spectacular performance of the bank, over the years has been duly acknowledged by
Co-operative Banking Association/Federations by bestowing the following awards.

1. ‘Sahakar Bhushan’ Award 2013-14 by Maharashtra Government.

2. ‘Pratibimba’ Award 2013-14 for Annual Report by Sahakar Sugandha magazine published
by Sahakar Bharti.

3. The Indian Banker magazine given 1st rank to our Bank on the basis of Average Cost of
Funds, Return on Assets, CRAR, and Business per Empolees

4. Banking Frontiers Year 2011 Award for Excellence in Recovery & NPA Management in
large Urban Co-Operative Banks Category

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5. "The Best Performing Co-op.Bank Award 2008-09. 2nd position from All India, 1st position
from Maharashtra State and 4thhighest deposits holding Co-op.Bank in India by INDIAN
ACHIEVERS FORUM, New Delhi.

6. 3rd, best Urban Co-op.Bank for the year 2007-08 having deposits above `500.00 crore by
The Maharashtra Urban Banks Federation Ltd., Mumbai.

7. The Best Urban Co-op.Bank for the year 2004-05, 2005-06, 2006-07 and 2007-08 by The
Maharashtra State Co-operative Bank's Association Ltd., Mumbai.

2.2 ABOUT ORGANATION-

The Bank has 38 branches with 27 Onsite and 2 off site ATMs. All the branches operate on
CBS.

The Bank is the first co-operative Bank in Vasai region who provides RTGS/NEFT services to
its customers. The Bank also provides document franking services, SMS alert, E-Statement,
Mobile Banking, and multicity cheques facilities to its customers.

The Bank has tied-up with SIDBI for credit link Capital Subsidy (CLCSS) facility to the
prospective MSME enterprises wish to avail loan for purchased of Plant and Machinery.

The Bank has sign MOU with CRISIL and SMERA for rating for Units enjoying/Proposed to
enjoy credit limit of 25 lacs and above or borrowers intending to avail relaxation in rate of
interest.

Through RuPay ATM Card the Bank has established access to more than 100000 ATMs of
other banks all over India.

The Bank known for its best customer service enjoys trust and confidence of both its
shareholders as well as customers.

The Bank has major share in establishing Cardinal Gracious Hospital, a leading hospital in
Vasai and Gonsalo Garcia College in Vasai and numerous other medical, educational and social
institutions.

The Bank is lead by Mr.Domnic D'mello the President, Mr.Gregory D'mello-Vice President
and Mrs. Brijdina Coutinho - Principal General Manager and Mr. Agnello Pen - General
Manager and Thus the Bank nurtures and encourages co-operation in true sense among all
sections of the society.

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 2.3 Awards

Honors Award Year

Award for Excellence in Recovery & NPA Management Banking Frontier 2011
in large Urban Co-operative Bank Category Year 2011 Award

Late Padmabhushan Vasantdada Patil Award Best Nagari 2008-

Sahakari Bank 09

Late Padmabhushan Vasantdada Patil Award Best Nagari 2007-

Sahakari Bank 08

Late Padmabhushan Vasantdada Patil Award Best Nagari 2006-

Sahakari Bank 07

Late Padmabhushan Vasantdada Patil Award Best Nagari 2004-

Sahakari Bank 05

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 2.4 Board of Director's

Mr. Dominic Sebastian D' Mello - Chairman

Mr. Gregory John D' Mello - VICE-CHAIRMAN
Miss. Dominica Pascol Dabre - Director
Mr. Archie Demian D' Souza - Director
Mr. Gonsalo Joquim Tuscano- Director
Mr. Michael Poshan Furtado - Director
Mr. Wilfred Victor Pereira- Director
Mr. Valentine Anton Mirchi - Director
Mr. Onil John Almeida - Director
Mr. Renold Thomas D' Souza - Director
Mr. Xavier N. Pereira - Director
Mr. Richard John Vaz - Director
Mr. Christophar John Rodrigues - Director
Mr. Augustine Girgol Fargoz - Director
Mr. Clide Manval Martin - Director
Mr. Manvel Francil Lopes - Director
Mr. Manvel Joseph Tuscano - Director
Mr. Vansha Rama Bahote - Director
Mr. Mingel Francis Koli - Director
Mr. Georgie Santosh Govind - Director
Mr. Avelino John Dabre - Director
Mrs. Tereja Thomas Pereira - Director
Mrs.Brijdina R. Coutinho - Principal General Manager
Mr.Agnello Pen - General Manager

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28
 CHAPTER – 3

3.1 REVIEW OF LITERATURE

29
LITERATURE REVIEW-

Comparative Study of Housing Loan

Inderbir kaur
Assistant professor, G.S.S.D.G.S, Khalsa College, Patiala.
IOSR Journal of Business and Management (IOSR-JBM)
Volume 10, Issue 3 (May-Ju2013), PP 57-59
Home loans means that you buy a house on installments. In simpler terms when you want to
own a home and cannot afford to pay the amount in lump sum, you can pay it in monthly
installments with an interest rate. There are number of companies offer cheap loans at a low
interest rate You can avail loan against existing house for renovation or expansion etc. The
demand for home loans will not sag much. The reason is a substantial rise in the income-
generating capability of Indian youth. So this particular section will keep the housing loan
demand high and increased lending rates can only shelve their plans for some time
The prime objectives of the study are-

 To undertake the comparative analysis of privatize banks in housing loan sector.

 To study consumer preference for the above two mentioned housing finance players.
 To analyze the satisfaction level of privatize banks Home Loan Customers.
According to the study home loan availing procedure is very much difficult for the people who
demanding it. According to the research maximum people prefer fixed rates on home loans.
Quality of service and minimum rate of interest are important criteria which are been seen by
people before taking home loan.
According to the respondents they are satisfied from the institution or the bank from where
they taking the home loan.
People get knowledge about home loans from television, internet, or families and friends.
According to thestudy respondents say that tenure of home loan affects their selection.
According to many respondents procedure period of home loan from 15 to 20 year is better.
Rate of interest should be competitive with other financial institutions.
Free accident insurance cover for home loan customers should be provided.
Proper credit appraisal of the customers should be done.
Daily reducing option should be introduced.
Relevant information should be provided to customers time to time.
Emphasis should be given on retaining customers.

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People who deal with customers should have complete knowledge about the housing finance
industry.
To penetrate in the rural market.
To provide plans for the low-income group.
To decrease the training fees compare to Competitors (fees of advisors training).
To increase the incentive package.
To open more number of branches in different cities.
This research study was time bound and due to this only few topics were taken up for study.
This research study was taken in a limited area only and findings may vary if the area of study
is increased or changed.
Some of the respondents might have been biased in their responses as such the analysis could
vary to some extent.
While analysis of data, some human errors could have been possible.
Sample drawn through convenience sampling, for customer survey cannot be well associated
with the attributes of population. Here I got the questionnaire filled from people selected
arbitrarily. Our neighbors, our friends, etc. The majority of the respondents were from educated
middle class a
And perhaps this is the section of society which is being targeted by the Home Loan
Companies. This is because of two reasons:
a) The huge size of middle class population.
b) Their increasing need and awareness for home loans in this class.
Thus the sample drawn here was not a true representative of the people of Patiala city but was
fairly a sample of the segment targeted as potential customers by the Home loan providing
institutions.

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 CHAPTER –4

4.1 RESEARCH METHODOLOGY

4.2 SOURCE OF INFORMATION

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4.1 RESEARCH METHODOLOGY

Research is a scientific and systematic search. Research as a process involves defining

and redefining problems, formulation, organizing and evaluating data & facts and drawing a
conclusion, after a careful study.

Research methodology is the method by which actual research is conducted. Thus it is a path
of achieving the goals towards formation of a project.

4.2 SOURCE OF INFORMATION

There are two sources of information: - Primary source and Secondary source. I’ve used both
the sources in the completion of the project. The primary source of information was the direct
question asking to employees of bank and the secondary sources were books, annual report,
internet etc.

Type of Research used in study - Descriptive research is used in this study in order to identify
the lending practices of bank and determining customer’s level of satisfaction. The method used
was interview of the experienced staff.

Primary Data –

1. Observation Method

2. Interview Method

Secondary Data –

1. Annual reports of the bank

2. Manual of instructions on loans and advances

3. Books

4. Articles

5. Internet

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 CHAPTER –5

5.1 THEORITICAL BACKGROUD

5.2 ANALYSIS& OBSERVATION OF DATA

34
5.1 THEORITICAL BACKGROUD

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 in time. A bank loan to a company, with a fixed maturity and often featuring
amortization of principal. If this loan is in the form of a line of credit, the funds are drawn down
shortly after the agreement is signed.

Usually, there is a pre-determined 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). Otherwise, the borrower usually uses the funds
from the loan soon after they become available. Bank term loans are very a common kind of
lending.

DIFFERENT LOANS PROVIDED BY THE BANK

 Ornaments
 Self Employment/Professional
 Direct Agriculture
 Education loan
 Personal Vehicle Loan
 Commercial vehical Loan
 Plant,Machinary,Shop,Gala etc.
 Housing Loan
 Personal Mortgage Loan
 Furniture and Household Appliances
 Working Capital (C.C)
 Builder Loan
 Overdraft Aganist Imm.Property(OD)

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 RATE OF INTEREST ON LOANS

S. TYPES OF LOANS REVISED RATE OF INTEREST

No.
REGULAR EMI Per Lac’s
LOAN
1. Ornaments 11.50% -

2. Self 11.50% 1739.00

Employment/Professtional

3. Direct Agriculture 11.50% -

4. Education loan 11.00% 2174.00

5. Personal Vehical Loan 11.00&12.00% 2224.00

6. Commercial vehical Loan 12.75% 2263.00

7. Plant,Machinary,Shop,Gala 13.00% 1819.00

etc.
8. Housing Loan 11.25&11.50% 1152.00

9. Personal Mortgage Loan 13.00&14.00% 1553.00

10. Furniture and Household 13.50% 2626.00

Appliances
11. Working Capital (C.C) 12.00&13.00% -

36
 PROCEDURE FOR SANCTIONING LOAN
In loan account the entire amount sanctioned is debited to the borrower’s account Interest is
also debited to the account. It is the credit repayment made on installment basis. Following
procedure is adopted for sanctioning of loans.
1. PRE SANCTION SURVEY AND INSPECTION
Loan facility is available on the basis of security offered or on the basis of period of which it
is required. Security offered by the customers may be fixed asset, plant and machinery,
equipment, house etc.
Depending upon the purpose of loan, the banker conducts a pre-sanction survey and inspection.
During this survey bankers inspect the security offered by seeing the location of factory,
business premises, inspect documents and letter of goods etc. such survey helps the bank to
know about the customers.
2. PREPARATION OF LOAN APPLICATION
The loan application has to be prepared and handed over to the banker by the borrower.
In a loan application the following details are to be furnished -
1. Name of the borrower
2. Occupation
3. Purpose of loan
4. Period of loan
5. How borrower proposes to repay the loan
6. Projection of cash generations over the loan period
7. P&L A/c, B/S, for the period of loan in the form of projection
8. Details of security offered.
3. APPRAISAL
Loan applications have to evaluated and appraised to decide whether they can be sanctioned of
rejected. The loan department in the bank does this work.
During appraisal the loan department concerned applies various methods of scrutiny to find out
the details given in the application are true and the projections hold good. Thus market
information, sales forecast, etc. would be independently assessed.
4. SANCTIONING
The loan department scrutinizes the loan application and decides whether the loan is to be
sanctioned or not. Norms for sanctioning the proposal are indicated by RBI
5. PREPARATION OF SANCTION LETTER

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Sanction letter contains the following points-
1. Name of the borrower
2. Limits sanctioned
3. Period of loan
4. Security offered buy the borrower
5. Terms of repayment
6. Margin to be maintained
7. Rate of interest
8. Stock statements to be submitted at periodical intervals
the borrower is informed about these aspects and a copy of the letter is sent to be
borrower.
6. ACCEPTANCE OF TERMS AND CONDITIONS BY THE BORROWER
Normally the borrower is in continuous touch with the bank though be has banded over the
proposal to the bank. They accept terms lay down by the bank. They are not requested to inform
the bank in writing of having accepted the terms.
7. PREPARATION OF LOAN DOCUMENTS
a. Demand promissory note
It is an important document and a common document for the bank. The borrower accepts his
liability regarding the funds lend by the banker through this document.
It contains data of execution, place of execution, name of the payee, the loan amount, rate of
interest, address of the borrower etc.
b. Loan agreement
These are standard printed documents running into a No. of pages. They contain all legal
aspects regarding the rights of both the parties and liabilities of the borrower.
8. DISBURSEMENT OF LOAN
When the loan is sanctioned at the time of disbursement of loan of loan a/c is opened in the
name of the borrower. The loan a/c opened is debited and savings a/c is credited for equivalent
sum.

9. PERIODICAL INSPECTION AND SUPERVISION

After the loan is disbursed borrower utilizes the loan amount to generate the funds and profits
so that he can repay the loan. Therefore bank inspects the keep supervision whether the loan
amount is been utilized in a productive way or not.

38
CREDIT APPRAISAL CRITERIAS

The Credit Appraisal is a very important element in the Bank Finance activity. It is the key
factor on which the credit decisions are taken. Credit appraisal means approving the credit to
the customer. It deals with evaluating the credit worthiness of the customer, verification of
documents, sorting of discrepancies, approving the deviations, disbursing the files. The
evaluation of creditworthiness of the customer is the most important task as utmost care is to
be taken so that no wrong customer is funded. Bank of Baroda is more concerned with the
quality of customers rather that quantity of customers. This policy has made the credit appraisal
an critical job. The bank has fixed certain parameters for evaluating the credit. These
parameters are

 CUSTOMER SEGMENT
 MINIMUM PERIOD OF EMPLOYMENT
 PURPOSE OF LOAN
 AGE OF THE CUSTOMER
 SECURITY
 MINIMUM LOAN
 MAXIMUM LOAN
 LOAN MULTIPLE
 TENOR
 INTEREST
 METHOD OF PAYMENT
 SECURING DOCUMENTATION
 CONDITIONS.

39
DOCUMENTATION DETAILS

1. PROOF OF INCOME
 Salaried
Latest salary slips for the last 2 months.
 Self-employed:
Copy of income Tax return for last 3 years and Blank Statement for last 6 month
2. RESIDENCE PROOF
 Check address on proof of residence with that on Application Form and FI Report.
Either of the following with borrower name and address clearly mentioned.
 Telephone / Electricity bill.
 Ration card
 Driving License
 Passport
 Rent agreement
3. IDENTITY PROOF
Either of
 Passport size photograph
 Copy of Driving License / Company identity cart / PAN card clearly showing Photo
of customer.
4. POST DATED CHEQUES
 Bank account should preferably be at least 6 months old and reflect good amount
of credit transaction. PDCs only from the account in which salary is credited.
 In case bank account has been transferred recently, take copies of bank statement
of previous bank account.
 No case to be done without PDCs, nor short cheque should be accepted.
 Overwriting on PDCs, if any, must be attested with full signature.
 Bank branch location address must be mention clearly on the cheque

40
5. INVOICE
 Final invoice of dealer must be taken, before releasing disbursement.
 The invoice must be in favor of borrower with words, Hypothecated to GMAC.
 Amount financed should not exceed cost of product.
 Financed amount should take into account any discount offered.
6. INITIAL PAYMENT RECEIPT
 Copy of initial payment receipt issued by dealer to customer must be taken on
record.
 This is essential to cross check with computation at the time of disbursement and
also to ensure that dealer has actually collected initial payment and not deferred the
same.
7. DELIVERY CHALLAN COPY
 Hypothecation of GMAC must be clearly mentioned on delivery challan.
 Signature of loan required acknowledging delivery.
 Must be obtained within 2 weeks of disbursement.

MONITORING & FOLLOW-UP

Bank has time and again introduced various systems for monitoring large borrower accounts
whether sanctioned by the corporate office or by other authorities to have close monitoring of
such accounts.
A. The basic objective of introducing such systems are
1. Understand the current financial condition of borrower.
1. Confirm that the credit is in compliance with the sanction terms.
2. Ensure that the interest and principal- repayment are serviced timely.
3. Ensure that the drawings are covered by adequate drawings power.
4. Ensure that the customer is using the envisaged cash flows are being timely realized by
the borrower.
6. Ensure that securities/collaterals are in conformity with the sanction terms and
have not deteriorated
7. Identify potential problem, external and or internal, well in time for taking
corrective measure.

41
 8. keep a watch over the changing policies of the Government, changing market
paradigms, and change in management control of the account to sense a feature likely
to cause concern and take preventive measures
9. To detect sickness at a early stage to take timely corrective action and to improve the
quality of banks advances.

B. Major tools of the credit monitoring include

1. Monitoring day to day operation in the account at least on a basis.

2. Satisfying upon stock/book-debts statements.
3. Timely review the account.
4. Periodically inspecting/verifying the securities charged to the bank.
5. Credit Rating at regular intervals.
6. Satisfying upon whether the borrower is paying statutory dues/electricity bill/ telephone
bill has recently cut-down any major activity/ express which he was doing otherwise
ordinary course of business.
7. Keeping on ear to the market news/reports.

42
 5.2 DATA ANALYSIS AND OBSERVATION-

1. Growth of sanction and disbursement in home loan at BCCB Bank.

Table no :1 - Amount Of Loan Sanction And Disbursement (Amt In Cr)

2011-12 2012-13 213-14
Amount of loan sanction 17.85 19.25 22.62
Amount of loan 17.69 18.87 21.49
disbursement
% of loan disbursed to 99.10% 98.02% 95.00%
loan sanction
Source: Secondary Data

Figure No:1 Comparison Of Sanction And Disbursement Amount

25

20

15
Amount of loan sanction
10 Amount of loan disbursement

0
2011-12 2012-13 213-14

Observation-

It was found that the amount of home loan sanction by BCCB bank has increases every year as
compared to previous year .in the year 2013-14 the amount of home loan sanction has increased
by 26.72% as compared to the year 2011-12.but the amount of disbursement was not same with
amount of loan sanction in the year 2012-13 & 2013-14.during the year 2012-13 amount of
loan disbursement was less by Rs.38 lakhs from sanction amount the amount of loan
disbursement was also less in 2013-14 in this year the actual disbursement was also less as
compared to sanction amount by Rs.1.13 Cr so it was observed that in actul loan disbursement
of loan has less than the sanction amount and the ratio of loan disbursement has decreased in
2013-14 upto 95% as compared to 100% in2011-12.

43
2. Month wise Sanction &disbursement of home loan for financial year
2013-14.

Table no: 2Amounts of Sanction and Disbursement during each month.

Month Sanction Disbursement % of Loan

Disbursement to
(cr) (cr) Loan Sanction

97.88
April 1.42 1.39

90.38
May 1.56 1.41

June 1.6 1.67 104.00

July 2.34 2.05 87.60

August 2.11 2 94.78

September 1.98 1.98 100.00

October 1.72 1.69 98.25

November 2.345 2.29 97.65

December 2.425 2.39 98.55

January 1.17 1.05 89.74

February 1.63 1.42 87.11

March 2.32 2.15 92.67

Total 22.62 21.49 95.00

44
Source: Secondary Data

Figure No: 2 Comparison of Sanction And Disbursement Amount on monthly report

2.5

1.5
SANCTION ( Cr. )

1 DISBURSEMENT ( Cr.)

0.5

Observation-

It was found that in the year 2013-14 out of total sanction amount of home loan the maximum
amount of loan sanctioned during the month july,august,november,december and march. even
out off total amount disbursement for home loan was also in the same months. but % of
disbursement and sanction amount was highest in the month of November and December 2013.

The above table indicates the variability in % of actual disbursement to loan sanction in every
month.

ANALYSIS OF QUESTIONNAIRE FILLED BY CUSTOMER

45
1 .Home loan procedure of BCCB Bank.

Table no: 3 Customer Satisfactions From Home Loan Procedure of Bank

SR.NO PARTICULARS NO.OF %

RESPONDENT
1 Satisfied 44 88
2 Unsatisfied 06 12
Total 50 100
Source: Primary Data

Figure No: 3 Comparison Of customer satisfaction

Series1,
Unsatisfied, 6,
12%
Satisfied
Unsatisfied

Series1,
Satisfied, 44,
88%

Observation-

The above pie chart shows from the total sample size of 100 that 88% of the customer are
satisfied with the loan procedure while 12% are unsatisfied. This difference may because of
the service provided by the employees at various area

2. Documentation of home loan at BCCB Bank .

46
Table no :4 Customer Satisfaction From Documentation of Bank

SR.NO PARTICULARS NO.OF %

RESPONDENT

1 Satisfied 47 94

2 Unsatisfied 03 06

Total 50 100

Source: Primary Data

Figure No: 4 Comparison Of customer satisfaction from Documentation

Observation-

The above chart shows that 94% of the customer are satisfied with the Documentation while
6% are unsatisfied. This difference may because of the improper information provided by the
employees at various areas.

3.Rate of interest at BCCB Bank.

47
Table no: 5 Respondents to Interest Rate of Bank

SR.NO PARTICULARS NO.OF %

RESPONDENT

1 High 31 62

2 Normal 18 36

3 Low 1 02

Total 50 100

Source: Primary Data

Figure No: 5 Comparison Of respondents to interest rate

Series1, Low,
1, 2%

Series1,
Normal, 18,
36% High
Series1, High,
31, 62% Normal
Low

Observation-

The above pie chart shows that about 62% customers fill that the rate of interest for BCCB
bank is high,36% customer fill that the rate is normal & only 2% of customers fill that it is
low. It depends on the perception of the customers.

4.Choice of BCCB Bank.

48
Table no :6 Respondents to Choice
SR.NO PARTICULARS NO.OF
RESPONDENT
1 Good Service 24

2 Rate of Interest 18

3 Easy Documentation 17

4 Wide Networking 13

5 None 05
Source: Primary Data
Figure No: 6 Comparison Of respondents to bank choice

Y
No. Of Respondents

Good Service
Rate of Interest
Easy Documentation
Wide Networking
None

X
Criteria

Observation-

The above graph shows that most of customer prefered the BCCBBank on the basis of the good
service provided by BCCB bank to their customer.although 15% of customers fill that due to
low rate of interest they had choosen the bank and 17% of customers followed the bank due to
easy documentation process.

49
CHAPTER –6
6.1 FINDINGS

6.1 FINDINGS
50
1) In the year 2011-12 sanction amount of home loan was 17.85 Crs, it has reach today to
22.62 Crs in 2013-14. The percentage increase of sanction amount of home loan is
35.94%.
2) In the year 2011-12 disbursement amount of home loan was 17.69 Crs, it has reach to
21.49 Crs. The percentage increase of disbursement amount of home loan is 31.53% in
2013-14.
3) The month wise sanction and disbursement amount fluctuate in last financial year. It
may be due to increase in interest rate.
4) Most of the Customer prefers BCCB Bank because of its service, home loan procedure
of BCCB bank and its easy documentation.
5) Now a days service plays an important role in any organisation.
6) 62% of customers said that home loan interest reat of BCCB bank is more as compared
to other bank.

51
CHAPTER –7

CONCLUSION

CONCLUSION

52
The motive behind this project is to understand the home loan procedure of BCCB bank and to
know how co-operative banks are providing loan to common people and now a day’s home
loan is a very burring topic and many people prefer nationalized bank for home loan and
therefore how co-operative banks are performing is very difficult to understand therefore this
project is useful to understand the home loan analysis of co-operative bank by studding this
topic we came to know that people are now preferring co-operative banks for loan because of
their easy loan procedure and interest rates

From the sanction and disbursement result of BCCB bank it was observed that BCCB bank has
a yearly growth in there sanction and disbursement of home loan and by the survey of people
we can able to know that people are happy with the BCCB bank and their home loan procedure
therefore we can conclude that people are now preferring co-operative banks for their home
loan and co-operative banks are competing with nationalized bank by providing better service
and facilities.

Contribution to the BCCB Bank:

The study of loan procedure and customer satisfaction of bassein catholic co-operative
bank will help the bank to know about their current position in loans and it’s procedure so
it will be beneficial for the bank to understand their customer response to loans scheme
and also to understand their satisfaction level so they can make necessary and important
modification for better performance

Learning from the project:

While completing my summer internship project in BCCB bank, I came across

day to day business activities of the bank, l learnt about Home loans and their today’s financial
position, and I also learnt about sanction and disbursement procedure of bank.

53
CHAPTER –8
SUGGESTIONS

SUGGESTIONS

54
 1) Risk of default should be reduced by funding the right customer, through proper
analysis of credit worthiness of customer.
2) At present Insurance is optional but to secure the Loan the Insurance of the
Borrower and Property should be mandatory.
3) Bank should reduce the interest rate regarding home loan as 62% of customer are
saying that the interest rate regarding loan is high as compared to other banks.

BIBLIOGRAPHY.

Books & Sites:

55
Books

Annual report BCCB bank

BCCB Bank sanction & Disbursement report.

Sites

www.bccb.co.in

www.moneycontrol.com

www.google.com

www.rupeetimes.com

ANNEXURE
QUESTIONNAIRE

56
 Name:

Address:

Contact No:

Q.1) Have you taken home loan from BCCB Bank?

Yes No

Q.2) Are you satisfied with the home loan procedure of Bank?

Yes No

Q.3) Documentation of Home Loan at BCCB Bank is

Easy Tedious Ok

Q.4) Rate of interest at BCCB Bank is

High Low Normal

Q.5) Are you satisfied with the services provided by the BCCB Bank?

Yes No

Q.6) why you have chosen the BCCB Bank for availing Home Loan?

Good Service

57
Rate of Interest

Easy Documentation

Wide Networking

All of the above

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