A

Summer Training Report

On
“LOAN AND CREDIT FACILITY OF THE your city name CENTRAL CO-
OPERATIVE BANK”
Conducted at your city (dist. name)
Submitted To
Your university name here
In partial fulfillment for the Degree of
BECHLOR OF BUSINESS ADMINISTRATION
Session (2016 – 2019)

Under the Guidance of: - Submitted By: -

Ms. xyz your name
Asst. prof. BBA 5th Sem.
Class Roll No:- ………
University Roll No: - ………..

Institute name
(Affiliated to your university name here)
Certificate add here
i
 DECLARATION
I hereby declare that, the project entitled “LOAN AND CREDIT FACILITY OF THE YOUR CITY
NAME CENTRAL CO-OPERATIVE BANK” assigned to me for the partial fulfillment of BBA degree
from Kurukshetra University, Kurukshetra. The work is originally completed by me and the information
provided in the study is authentic to the best of my knowledge. This study has not been submitted to any
other institution or university for the award of any other degree.

Your name

BBA 5TH Sem.

II
 CERTIFICATE BY FACULTY
This is to certify that Neelam Devi has completed the project entitled "loan and credit facility of co-
operative bank" under my supervision. To the best of my knowledge, the report consists of result of the
empirical study conducted by the student. In my opinion the work is of requisite standard expected from a
BBA student. Therefore, I recommend the same to be sent for evaluation to the university.

Mr/ms : xyz

III
 ACKNOWLEDGEMENT
Gratitude is the hardest of emotions to express and one often does not find adequate words to convey
what one feels and trying to express it"

I am immensely indebted to my project Guide Ms. Prabhjot Kaur (Assistant Professor) E-Max Group of
Institutions Badhauli, Your city name (Haryana), for his illumining observation, encouraging suggestions
and constructive criticisms, which have helped me in completing this project successfully.

There are several other people who also deserve much more than a mere acknowledgement at their
exemplary help. I also acknowledge with deep sense of gratitude and wholehearted help and cooperation
intended to me by them.

YOUR NAME

IV
 PREFACE
The present era is undoubtedly a management era. Management is an important function in any organization.
A management is one of the most important fields which are widely used in every stage of life. The effective
management can be achieved only by effective management training and developing skill to understand the
organizational level, this project work is a part of the course of BBA and was done at The Your city name
Central Co-Operative Bank on the topic "Loan and Credit Facility of The Your city name Central Co-
Operative Bank".

This project is prepared on the basis of responses of the respondents (Bank's customers) in
market and understanding the requirement of proper guidance to customers.

The Your city name Central Co-Operative Bank offers loans for homes for buying or
constructing your home, refinance a Consumer Perception availed from other institutions or even to extend
or improve your existing home. This project helps me to better understanding of market and financial
products and their benefits.

Now I am feeling the great pleasure in delivering this project because I am quite aware
regarding the lending procedure for peoples, now I can better guide the peoples who want to take the loan
and credit facility from the bank.
 V

INDEX

S. NO. TITLE PAGE NO.

Industry Certificate I

Declaration by Faculty II

Faculty Certificate III

Acknowledgment IV

Preface V

Ch – 1 Introduction To The Topic 6-21

Ch – 2 Company Profile 22-39

Ch – 3 Research Methodology 40-44

Ch – 4 Data Analysis & Interpretation 45-55

Ch – 5 Findings, Suggestions and Conclusions 56-58

Bibliography 59

Annexure 60-62
CHAPTER – 1
INTRODUCTION
TO
THE TOPIC
CREDIT FACILITY
Unlike personal loans (where people borrowing the funds and the collateral are not likely to change), loans
in the world of business require additional flexibility in order to meet the needs of the business as well as
satisfy the requirement of the lender. Accomplishing this seemingly difficult task is done by using a credit
facility which is an overall credit line that can be broken into multiple credit lines and collateral. The term
credit can be understood by giving light on following points:

CREDIT (LOANS AND ADVANCES)

The profit of a bank depends primarily on the utilization of its fund. But Bank cannot lend its fund fully. As
per Banking Company Act 1991 every banking company has to maintain a specified minimum (presently 25
%) of the total of its demand and time liabilities in the form of cash and approved securities with RBI. This
percentage or ratio is termed Statutory Liquid Ratio. Further every scheduled bank has to maintain with RBI
an average daily balance, the amount of which has not to be less than a particular percentage (presently 6 %)
of the total of its demand and time liabilities. As such Bank generally goes for short-term finance although a
small portion of its total deposit is invested as long term lending. Banks allow different forms advance.

CREDIT DEPARTMENT

CD Banking business primarily involves accepting deposits from the public and investing or lending the
same and thereby making profit out of it. However, lending money is not without risk and therefore banks
make loans and advances to farmers, traders, businessmen and industrialist against either tangible (land,
building, stock etc.) or intangible security. Eve n then, the banks run the risk of default in repayment.
Therefore, the banks follow cautious measures while lending money to others. This core function of a bank
is performed by the Credit Department of the bank. In this case, the relationship of bank and customer is that
of the creditor and debtor unlike personal loans where the person borrowing the funds and the collateral are
not likely to change, loans in the world of business require additional flexibility in order to meet the needs of
the business as well as satisfy the requirement of the lender. Accomplishing this seemingly difficult task is
done by using a credit facility which is an overall credit line that can be broken into multiple credit lines and
collateral.

6
TYPES OF CREDITS OFFERED BY A BANK

Banks usually provides following types of credit:

1. CASH CREDIT (hypo.)

2. CASH CREDIT (pledge)

3. LTR

4. TERM LOAN

5. LEASE FINENCING

6. SECURED OVERDRAFT (SOD)

7. OTHERS

1. CASH CREDIT (HYPO.):-

Cash Credit or continuing credits are those that form continuous debits and credits up to limit and have and
expiration date. Service charge that is effect an interest charge is normally made as a percentage of the value
of purchases. These credits may be of the nature of pledged and /or hypothecated and banks should report
these in separate heads incorporated under the main head cash credit.

Under this arrangement a credit is sanctioned against hypothecation of the raw materials or finished goods.
The letter of hypothecation creates a charge against the goods in favour of the Bank but neither the
ownership nor its possession is passed on to it; only a right or interest in the goods is created in favour of the
Bank and the borrower binds himself to give possession of the goods to the bank when called upon to do so.
When the possession is handed over, the charge is converted into pledge. This type of facility is generally
given to the reputed borrowers of undoubted integrity.

2. CASH CREDIT (PLEDGE):-

Under this arrangement a cash credit is sanctioned against pledge of goods or raw materials. By signing the
letter of pledge, the borrower surrenders the physical possession of the goods under the Banks effective
control as security for payment of Bank dues. The ownership of the goods, however, remains with the
borrower. The pledge creates an implied lien in favour of the Bank on the underlying merchandise. In the
event of failure of the borrower to honour his commitment the Bank can sell the goods for recovery of the
advance. No collateral security is normally asked for grant of such credit.

7
3. LOAN AGAINST TRUST RECEIPTS (LTR):-

This is a loan facility up to a satisfactory limit to the traders / customers by a Bank against security of the
value of the imported merchandise. This item also includes loan against Trust Receipts.

4. TERM LOAN:-

A Bank advance for a specific period repaid with interest under fixed schedules. The term loans may be as
follow:

Short Term: Up to and including 12 months.

Medium Term: More than 12 months up to and including 60 months.

Long Term: More than 60 months. [This item includes lease financing]

5. LEASE FINENCING:-

An entrepreneur, under this Scheme, may avail of the lease facilities to procure industrial machinery
(without having to purchase it by down payment) with easy repayment schedule. The clients also get special
rebate in their income-tax payment under the scheme.

6. SECURED OVERDRAFTS (SOD):-

A loan facility on a customer’s current account at a Bank permitting him to overdraw up to ascertain agreed
limit for an agreed period. The terms of the loan are normally that it is repayable on demand or at the
expiration date of the agreement.

7. OTHERS:-

Any loan that does not fall in any of the above facilities is considered as ³other´. Blocked /Segregated
continuing credits (Pledge, Hypothecation or Overdraft) when re -scheduled by the Banks for payments over
a number of periods should also be reported against the head³other´.

8
THE BANK USE EIGHT ‘C’ S RULE WHILE GIVING LOAN

1. Credit (must be god)

2. Capacity (ability to pay)
3. Capital (money that going into business)
4. Collateral (assets that secure the loan)
5. Character (the person)
6. Commitment (ability and willingness to succeed)
7. Cash flow (can it support business’ debt and expense)
8. Conditions (economic, finance anything that effect the business)

9
LOAN AND CREDIT FACILITY OF THE YOUR CITY NAME CENTRAL
COOPARATIIVE BANK

The Your city name central cooperative bank provided following loan and credit facilities

PERSONAL LOAN SCHEME:-

Under this scheme the loan is provided for fulfilment of personal and family needs by taking care of refund
capacity of applicant. The applicant can enjoy this facility by following two types-

 Term loan for maximum 5 years.

 Renewal of Credit limit each year according to last year’s transactions.

ELIGIBILITY:-

 Domicile of Your city name city whose age is between 21to 55 years.
 Employee of Government/ self-governed, semi government, leading banks, urban cooperative
bank/court, financial institution, education institutes etc.
 The self-employed person who earns fixed income and files income tax return also having PAN
card.
 Organizer of standing committee.

LOAN/ CREDIT LIMIT:-

 Maximum loan amount is 2 lacks.

 8 times of Gross Monthly salary or rs.2 lacks whichever is less.
 In the case of businessman/ professionals the calculation of average monthly salary is to be done
according to the IT return of past three years.
 15 times of monthly salary of manager of selection committee or 2 lacks Whichever is less

10
INTEREST RATE:-

According to the decision taken by bank the rate of interest is 16%.

RECOVERY OF LOAN:-

 Maximum 5ve years, in the case of employee 5ve years or date of retirement whichever is earlier.
 The advance cheque is taken according to EMI instalments of other banks.

FOR SECURITY OF LOAN:-

 The bank requires the guaranty of 2 persons having creditability of loan amount who are
recognized by bank.
 The collateral security is also accepted by bank in the case of non-remunerated and employer
who having loan of more than 50000 and lake of contract of direct recovery.

DOCUMENTS REQUIRED FROM APPLICANT:-

 Photo of applicant
 Residential proof
 Two guarantors
 Income certificate of applicant and guarantor
 In the case of salaried employee the guarantee certificate passes by his employer.
 In case of loan amount which is more than 50 lacks the evaluated rate of fixed assets for
mortgage.
 The nominal membership fee and deposit amount.

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VEHICLE LOAN (for personal use):-

Under this scheme the loan is to be given for four wheeler (car, jeep etc.) for personal use only.

ELIGIBILITY:-

 Domicile of Your city name city.

 Employee of Government/ self-governed, semi government, leading banks, urban cooperative
bank/court, financial institution, education institutes etc.
 The self-employed person who earns fixed income and files income tax return also having PAN
card.
 Standing committee admin

LOAN/ CREDIT LIMIT:-

The loan provides up to 5 lacks for purchasing of four wheeler for personal use.

INTEREST RATE:-

The rate of interest for four wheeler is 10.5%.

TIME PERIOD OF THE LOAN:-

The time limit set by the bank authority for this kind of loan is maximum 7 years.

FOR SECURITY OF LOAN:-

The bank requires the guaranty of 2 persons having creditability of loan amount who are recognized by
bank.

DOCUMENTS REQUIRED FROM APPLICANT:-

 Photo of applicant and his legal license.

 Vehicle quotation and income statement of applicant.
 Fixed assets for mortgage.
 Two guarantors with their income statement and photo.
 The nominal membership fee and deposit amount.

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DOCUMENTS REQUIRED FROM APPLICANT:-

Photo of applicant and his legal license.

Vehicle quotation and income statement of applicant. Fixed assets for mortgage. Two guarantors with their
income statement and photo .The nominal membership fee and deposit amount.

VEHICLE LOAN (for commercial use):-

Under this scheme the loan is provide for purchase vehicle for commercial use.

ELIGIBILITY:-

 Domicile of Your city name city.

 Employee of Government/ self-governed, semi government, leading banks, urban cooperative
bank/court, financial institution, education institutes etc.
 The self employed person who earns fixed income and files income tax return also having PAN
card.
 Standing committee admin

LOAN/ CREDIT LIMIT:-

The loan provides up to 10 lacks for purchasing of four wheeler for commercial use.

INTEREST RATE:-

The rate of interest for four wheeler is 14%.

TIME PERIOD OF THE LOAN:-

The time limit set by the bank authority for this kind of loan is maximum 7 years.

13
FOR SECURITY OF LOAN:-

The bank requires the guaranty of 2 persons having creditability of loan amount who are recognized by
bank.

DOCUMENTS REQUIRED FROM APPLICANT:-

 Photo of applicant and his legal license.

 Vehicle quotation and income statement of applicant.
 Fixed assets for mortgage.
 Two guarantors with their income statement and photo.
 The nominal membership fee and deposit amount.

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 HOME LOAN:-

This loan scheme is for:

 Purchase or construction of plot/building for the persons having regular income and loan for take
over the current loan account for different financial institutes.
 Construction or purchase of building for Commercial use, business use, shops, showrooms,
warehouse etc.
 Repairing, expansion, and renovation of Home/ commercial building.

ELIGIBILITY:-

 Domicile of Your city name who wants to purchase/ construct the building or house within the
district.
 Employee of Government/ self-governed, semi government, leading banks, urban cooperative
bank/court, financial institution, education institutes etc.
 Business man who fills income tax return for last 3 years.
 Normally the age limit for applicant is 50 years but it can be extent up to 55 years in certain
special cases.

LOAN/ CREDIT LIMIT:-

 The loan limit is up to 15 lakes

 Rs. 2 lakes in the case of repairs
 The margin would be 20% up to 2 lakes and 25% in the case of above 2 lakes
 There should be no margin in fee cost in the case of plot replacement and threshold be repayment
in 3 instalments after fully utilization of his contribution of loaning the case of construction.

INTEREST RATE:-

FIXED RATE OF INTEREST:

Up to 5 years 10%

From 5 to 10 years 10.50%

Above 10 years 11%

15
FLEXIBLE RATE OF INTEREST:

Up to 5 years 9.50%

From 5 to 10 years 10%

Above 10 years 10.50%

TIME PERIOD OF THE LOAN:-

The time period for loan is maximum 15 years or date of retirement whichever is earlier,

DOCUMENTS REQUIRED FROM APPLICANT:-

 Loan application form.

 Photo of applicant and co applicant.
 Copy of document of plot which is to be purchased or constructed.
 Construction approval from office in the case of construction.
 The cost estimation and approved map of building going to be constructed.
 Salary statement in case of salaried applicant and income tax return of last 3 years incise of non-
salaried applicant.
 Domicile certificate of applicant.
 Income statement and identity card of two gaunter etc.

EXECUTION OF DOCUMENTS AFTER SENCTION OF LOAN:-

Promissory note.
Loan contract.
Grantee deed of two grunters.
Mortgage letter of fixed assets
Advance cheque
Acknowledgment according to selected interest rate.
Prescribed document from bank advocate.
Other related documents.

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EDUCATIONLOAN:

This loan is for pursuing higher studies by their children.

ELIGIBILITY: - Assion to some professional or other courses and whose prospects of getting employment
are very good.

LOAN/ CREDIT LIMIT:-

The maximum limit of loan is Rs. 3.00 lakes per borrower. 50 times of the gross monthly salary of the
applicant or Rs. 10.00 lakes whichever is less ensuring 35% take home salary by the loanee after payment of
instalment of loan.

INTEREST RATE:-

The rate of interest on such loan is 10%.

TIME PERIOD:-

5 years after the borrower gets employment or one year after completion of course whichever is earlier.

DOCUMENTS REQUIRED FROM APPLICANT:-

 Attested copies of documents for proof of age/date of birth and proof of residential address.
 Passport size photo of the applicant, co-obligates and guarantors.
 Copy of mark sheets/degree certificates of previous academic qualifications.
 Income proof/latest income tax return of parents/co-obligates, guarantors. (if any)
 Details of collateral security along with valuation certificate of Govt. approved value (if any).
 Details/statements of Bank accounts held by the student applicant/co-obligate(s)/guarantors (if any)
for the last six months.
 Copy of Passport/Visa, cost of air fare (documentary detail) in case of studies abroad.

17
OTHER LOAN FACILITY

All the loan schemes we have been seen above shows that cooperative bank provided all kind of loans at
nominal rate of interest. The cooperative bank provides loan only to hit’s members hence if a person wants
loan from that bank he has to

The Your city name central cooperative bank provides some other kind of loans also like

Loan for Self-employment (@14%).

Loan for farm sector (@13%),

Loan for cooperative society/marketing society (@14%),

Computer loan (@8%),

Loan for farm sector (@13%)

Loan for non-farm sector (@14%)

Krishakmitra cooperative credit (@7%)

Cooperative society/marketing society credit limit (@ 14%)

National saving certificate/ kisaan vikas patra (@ 12%)

National saving certificate/ kisaan vikas patra (for staff)(@8%)

Loan to bank staff for computer (@12%)

Agriculture loan (up to 50000/-) (@12%)

Non agriculture loan (up to 50000/-) (@13%) etc.

18
RECOVERY OF LOAN:
The banks have introduced various deposits schemes which induce the common man to save more money.
The Urban Co-op. Banks accept deposits for the purpose of lending. It is the primary duty and function of
the Urban Co-op. Banks to safeguard the interest of depositors. Whenever deposits are accepted, the bank
agrees and undertakes to repay the amount of deposits with interest to the depositor on maturity. The
ownership of the deposit amount vests with the customer and the custody of the deposit amount are with the
Banker. So whenever Advances and Loans are sanctioned to shareholders / members of the Bank, the
Banker has to take extreme care to see that the Borrower repays the amount of loan with interest so as
tenable the Banker to repay the amount of deposit with interest to the customer.

Points which are to be taken care by bank while giving loan:

This is necessary to ensure that every borrower has a proper repaying capacity for repayment of the amount
of loans and advances that would be sanctioned. Securities are also taken tonsure that in case the borrower
fails to repay the amount of loan, the securities can reattached and sold out and the debts can be liquidated.

Even with this background, though there is a detailed scrutiny of loan application, it is observed that there
are very few cases, where the judgment of the bankers fails. In such 'Fail Cases' the borrowers are not ready
and willing to repay the amount of loan, the securities can be attached and sold out and the debts can be
liquidated.

Following are some points which bank takes care while lending money:

 Date of sanction of loan.

 Amount of loan sanctioned.
 Rate of Interest that would be charged.
 Last date of repayment of loan.
 Period for which loan is granted.
 Details regarding securities offered.

Normal measures to be adopted by bank officials for recovery of dues

Whenever, a borrower commits breach of agreement in respect of repayment of schedule of the amount of
loans with interest etc., we safely say that there are 'OVERDUE ' in the Loan Account. Once the Loan A/c is
an overdue A/c i.e. the borrower has committed default in repayment of loan amount as per the dates
specified in the Agreement, the n the Banker has necessarily to adopt measures which will result into
recovery of overdue amounts.

19
Whenever the borrower commits default in repayment of loan amount, immediately the bank should serve '
Preliminary Notices' on the principal borrower and the sureties advising them to repay the amount of
overdue with interest etc. Such Preliminary Notices should invariably mention information which is of
factual nature relating to:

(i)Amount of loan sanctioned

(ii) Date of sanction of loan.

(iii) Names of the sureties.

(iv)Amount of the loan sanctioned.

(v)Amount of over dues with interest etc. on a particular date.

Addition to the above it must also be communicated the bank shall proceed to take further action against the
principal borrower and sureties in case of failure to repay the amount of loan/over dues. It has been often
said 'A stitch in time saves nine'. Thus, the banker must be vigilant, right from the disbursement of loan
amount till the recovery of the entire loan amount. There should be effective supervision over the amount of
loan sanctioned

Recovery through salary / wages

After issue of such preliminary notices, there may be a positive response from the principal borrower and he
may repay the amount of defaulted loan instalment, or the principal borrower and the surety may approach
the authorities of the bank and may explain their genuine difficulties regarding repayment of loan amount or
there may offer to repay the dues partially. There may be cases where there is no response from the borrower
/sureties.

With this background, the bank should precede further to devise such steps which will result in recovery of
dues. Under various State Cooperative Acts (e.g. Section 49 of M.C.S .Act 1960)it has been provided that if
a member of a society. /Bank authorizes his Employer to make deduction from his salary/wages, in order to
satisfy the claims of the society/Bank, and then on receipt of requisition letter from the concerned Bank, the
Employer shall proceed to make deduction from the salary/wages from the concerned employee/member to
meet the claims of the Bank. The Employer must remit the amount so deducted immediately to the Bank
concerned.

Non-compliance of these provisions under the State Cooperative Act shall be constructed as ‘offence' and
further Civil and Criminal action can be instituted against such Erring Employer.

In addition to the above, there are provisions under the Indian Payment of Wages Act 1936(vide Section 7(2)
and Section 7(2) (j) which stipulates that the Employer shall make deduction from the salary/wages of an
Employee to satisfy the claims of the Cooperative Society / Banks.

20
Settlement of Disputes

Based on the noting of the Management, the Board of Directors may pass a Resolution authorizing the
Manager/or such other officer to file "Dispute Application´ in the Co-op. Court against the defaulting
principal borrower and his sureties. Section 91 of the MCS Act empowers the co-operative courts to decide
on µDisputes and Section 95 further empowers the court to direct attachment of property before
announcement of the award which is called Attachment before award or order and interlocutory order if it is
satisfied that the parties to the dispute are likely to remove/ dispose of whole or part of his property. Section
95 similarly empowers the Registrar / Officer authorized by him to take the above measures in case of
disputes referred to him.

The prayer clause normally consists of following important points -

 The opponents may be held responsible to repay the entire amount of loan with interest.
 If the opponents fail to pay the amount of loan, the disputant may be entitled to attach the movable
and immovable property of the opponents.
 The disputant may be entitled to sell the attached property and recover the amount due from the
opponents.
 Any other orders to meet the ends of justice.

21
CHAPTER – 2
COMPANY
PROFILE
 WHAT IS BANKING?

Banking in a traditional sense is the business of accepting deposits of money from public For the purpose of
lending and investment. These deposits can have a distinct feature like being withdrawn able by cheques,
which no other financial institution can offer. In Addition, banks also offer financial services, which include:

o The Issue of demand draft &traveller’s cheque.

o Credit cards
o Collection of cheques, bill of exchange.
o Safe deposit lockers
o Custodian services.
o Investment and Insurance Services.

The business of banking is highly regulated since banks deal with money offered to them by the public and
ensuring the safety of this public money is one of the prime responsibilities of any bank. That is why banks
are expected to be prudent in their leading and investment activities. Every bank has a compliance
department, which is responsible to ensure that all the services offered by the bank, and the processes
followed are in compliance with the local regulations and the Bank’s corporate policy.

The major regulations and act govern the banking business are: -

o Banking Regulation Act, 1949

o Foreign Exchange Management Act, 1999
o Indian Contract Act
o Negotiable Instruments Act, 1881

Bank lends money either for productive purposes to individual, firms, Corporate etc. for buying house
property, cars and other consumer durables and for investment Purposes to individuals and the others.
However, banks do not finance any Speculative activity. Lending is risk taking. The depositors of banks are
also assured of safety of their money by deploying some percentage of deposit in statutory Reserves like
SLR & CLR.

22
STANDARD ACTIVITIES OF BANK

Banks act as payment agents by conducting checking or current accounts for customers, paying cheques
drawn by customers on the bank, and collecting cheques deposited to customers' current accounts. Banks
also enable customer payments via other payment methods such as telegraphic transfer, and ATM.

Banks borrow money by accepting funds deposited on current accounts, by accepting term deposits, and by
issuing debt securities such as banknotes and bonds. Banks lend money by making advances to customers on
current accounts, by making instalment loans, and by investing in marketable debt securities and other forms
of money lending.

Banks provide almost all payment services, and a bank account is considered indispensable by most
businesses, individuals and governments. Non-banks that provide payment services such as remittance
companies are not normally considered an adequate substitute for having a bank account.

Banks borrow most funds from households and non-financial businesses, and lend most funds to households
and non-financial businesses, but non-bank lenders provide a significant and in many cases adequate
substitute for bank loans, and money market funds, cash management trusts and other non-bank financial
institutions in many cases provide an adequate substitute to banks for lending savings too.

REVENUE GENERATION

A bank can generate revenue in a variety of different ways including interest, transaction fees and financial
advice. The main method is via charging interest on the capital it lends out to customers. The bank profits
from the differential between the level of interest it pays for deposits and other sources of funds, and the
level of interest it charges in its lending activities. This difference is referred to as the spread between the
cost of funds and the loan interest rate. Historically, profitability from lending activities has been cyclical
and dependent on the needs and strengths of loan customers and the stage of the economic cycle. Fees and
financial advice constitute a more stable revenue stream and banks have therefore placed more emphasis on
these revenue lines to smooth their financial performance.

RISK AND CAPITAL

Banks face a number of risks in order to conduct their business, and how well these risks are managed and
understood is a key driver behind profitability, and how much capital a bank is required to hold. Some of the
main risks faced by banks include:

 Credit risk: risk of loss arising from a borrower who does not make payments as promised
 Liquidity risk: risk that a given security or asset cannot be traded quickly enough in the market to
prevent a loss (or make the required profit).
23
  Market risk: risk that the value of a portfolio, either an investment portfolio or a trading portfolio,
will decrease due to the change in value of the market risk factors.
 Operational risk: risk arising from execution of a company's business functions.

The capital requirement is a bank regulation, which sets a framework on how banks and depository
institutions must handle their capital. The categorization of assets and capital is highly standardized so that it
can be risk weighted

ECONOMIC FUNCTIONS OF BANKS

The economic functions of banks include:

 Issue of money, in the form of banknotes and current accounts subject to cheque or payment at the
customer's order. These claims on banks can act as money because they are negotiable or repayable
on demand, and hence valued at par. They are effectively transferable by mere delivery, in the case
of banknotes, or by drawing a cheque that the payee may bank or cash.
 Netting and settlement of payments banks act as both collection and paying agents for customers,
participating in interbank clearing and settlement systems to collect, present, be presented with, and
pay payment instruments. This enables banks to economies on reserves held for settlement of
payments, since inward and outward payments offset each other. It also enables the offsetting of
payment flows between geographical areas, reducing the cost of settlement between them.
 Credit intermediation banks borrow and lend back-to-back on their own account as middle men.
 Credit quality improvement - banks lend money to ordinary commercial and personal borrowers
(ordinary credit quality), but are high quality borrowers. The improvement comes from
diversification of the bank's assets and capital which provides a buffer to absorb losses without
defaulting on its obligations. However, banknotes and deposits are generally unsecured; if the bank
gets into difficulty and pledges assets as security, to raise the funding it needs to continue to operate,
this puts the note holders and depositors in an economically subordinated position.

BANKING IN INDIA:-

Banking means accepting for the purpose of landing or investment of deposits of money from the public
repayable on demand or otherwise one withdraw able by cheque, draft or otherwise.

Banking in India has its origin as early as the Vedic period. It is believed that the transaction From money
lending to money banking must have occurred even before Manu, the great Hindu Jurist, who has devoted a
section of his work to deposits and advances and laid down the rules relating to rate of interest, During
Mugal Period, the native bankers played Avery important role in lending money and finance foreign trade

24
and commerce. During the days of the east- India Company, it was the turn of the agency house 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 that followed were the Bank of Hindustan and the Bengal Bank. The Bank of Hindustanis
reported to have continued till 1906 while the other two failed in the mean time. In the first half of the 19th
century the east-India company established three banks, the Bank of Bengal in1809, the Bank of Bombay in
1840 and the banks of Madras in 1843.

These three banks are also known as the presidency banks were amalgamated in 1920 and a new Bank - the
imperial bank of India established ion 27th January 1921. With the passing of the state bank act 1955 the
under taking of the imperial Bank of India is taken over by the newly constituted the state bank of India.

NATIONALIZATION

The GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from the
midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a
"masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed
the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential
approval on 9August 1969.

A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the
nationalization was to give the government more control of credit delivery. With the second dose of
nationalization, the GOI controlled around 91% of the banking business of India. Later on, in the year 1993,
the government merged New Bank of India with Punjab National Bank. It was the only merger between
nationalized banks and resulted in the reduction of the number of nationalized banks from 20 to 19.After
this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of
the Indian economy.

LIBERALIZATION

In the early 1990s, the then Narsimha Rao government embarked on a policy of liberalization, licensing a
small number of private banks. These came to be known as New Generation tech-savvy banks, and included
Global Trust Bank (the first of such new generation banks to be setup), which later amalgamated with
Oriental Bank of Commerce Axis Bank(earlier as UTI Bank), ICICI Bank and HDFC Bank. This move,
along with the rapid growth in the economy of India, revitalized the banking sector in India, which has seen
rapid growth with strong contribution from all the three sectors of banks, namely, government banks, private
banks and foreign banks. The next stage for the Indian banking has been set up with the proposed relaxation
in the norms for Foreign Direct Investment, where all Foreign Investors in banks may be given voting rights

25
which could exceed the present cap of 10%, at present it has gone up to 74% with some restrictions.

The new policy shook the Banking sector in India completely. Bankers, till this time, were used to the 4-6-4
method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a modern
outlook and tech-savvy methods of working for traditional banks.

All this led to the retail boom in India. People not just demanded more from their banks but also received
more. Currently (2007), banking in India is generally fairly mature in terms of supply, product range and
reach-even though reach in rural India still remains a challenge for the private sector and foreign banks. In
terms of quality of assets and capital adequacy, Indian banks are considered to have clean, strong and
transparent balance sheets relative to other banks in comparable economies in its region. The Reserve Bank
of India is an autonomous body, with minimal pressure from the government. The stated policy of the Bank
on the Indian Rupee is to manage volatility but without any fixed exchange rate-and this has mostly been
true.

With the growth in the Indian economy expected to be strong for quite some time -especially in its services
sector-the demand for banking services, especially retail banking, mortgages and investment services are
expected to be strong. One may also expect M &As, takeovers, and asset sales.

In March 2006, the Reserve Bank of India allowed Warburg Pinups to increase its stake in Kotak Mahindra
Bank (a private sector bank) to 10%. This is the first time an investor has been allowed to hold more than
5% in a private sector bank since the RBI announced norms in 2005 that any stake exceeding 5% in the
private sector banks would need to be vetted by them.

In the Indian Banking Industry some of the Private Sector Banks operating are IDBI Bank, INGV yasa
Bank, SBI Commercial and International Bank Ltd, Bank of Rajasthan Ltd. and banks from the Public
Sector include Punjab National bank, Vijaya Bank, UCO Bank, Oriental Bank, Allahabad Bank among
others.ANZ Grindlays Bank ,ABN-AMRO Bank, American Express Bank Ltd, Citibank are some of the
foreign banks operating in the Indian Banking Industry.

26
27
INDIAN BANKING INDUSTRY

The Indian Banking system has the Reserve Bank of India (RBI) as the apex body for all Matters relating to
the banking system. It is the Combination of Banks of India and bankers to all others banks as well.

The Indian Banking industry, which is governed by the Banking Regulation Act of India, 1949can be
broadly classified into two major categories, non -scheduled banks and scheduled banks.

1. Schedule Banks:-

These banks must have paid-up capital and reserve of mot less than Rs. 50, 00,000. They must satisfy the
RBI than its affairs are mot conducted in a manner detrimental to the interests of its depositors. These are
further classified as follow:

 State co-operative Banks

 Commercial Banks

Scheduled banks comprise commercial banks and the co-operative banks. In terms of ownership,
commercial banks can be further grouped into nationalized banks, the State Bank of India and its group
banks, regional rural banks and private sector banks (the old/ new domestic and foreign). These banks have
over 67,000 branches spread across the country in every city and villages of all nook and corners of the land.

2. Non-Schedule Banks:-

These are banks, which are not included in the second schedule of the Banking Regulations Act, 1965. It
means they do not satisfy the conditions laid down by that schedule. They are further classified as back:

o Central co-operative banks and primary credit societies

o Commercial Banks

28
COMMERCIAL BANKS

Commercial Banks in India are broadly categorized into Scheduled Commercial Banks and Unscheduled
Commercial Banks. The Scheduled Commercial Banks have been listed under the Second Schedule of the
Reserve Bank of India Act, 1934. The selection measure for listing a bank under the Second Schedule was
provided in section 42 (60 of the Reserve Bank of India Act, 1934. The modern Commercial Banks in India
cater to the financial needs of different sectors. The main functions of the commercial banks comprise:

 transfer of funds
 acceptance of deposits
 offering those deposits as loans for the establishment of industries
 Purchase of houses, equipment’s, capital investment purposes etc.
 The banks are allowed to act as trustees. On account of the knowledge of the financial market of
India the financial companies are attracted towards them to act as trustees to take the responsibility of
the security for the financial instrument like a debenture.
 The Indian Government presently hires the commercial banks for various purposes like tax collection
and refunds, payment of pensions etc.

CURRENT SCENARIO

The industry is currently in a transition phase. On the one hand, the PSBs, which are the mainstay of the
Indian Banking system, are in the process of shedding their flab in terms of excessive manpower, excessive
non-Performing Assets (NPAs) and excessive governmental equity, while on the other hand the private
sector banks are consolidating themselves through mergers and acquisitions.

PSBs, which currently account for more than 78 percent of total banking industry assets are saddled with
NPAs (a mind-boggling Rs 830 billion in 2000), falling revenues from traditional sources, lack of modern
technology and a massive workforce while the new private sector banks are forging ahead and rewriting the
traditional banking business model by way of their sheer innovation and service. The PSBs are of course
currently working out challenging strategies even as 20 percent of their massive employee strength has
dwindled in the wake of the successful Voluntary Retirement Schemes (VRS) schemes.

Private sector Banks have establish internet banking, phone banking, anywhere banking, and mobile
banking, debit cards, Automatic Teller Machines (ATMs) and combined various other services and
integrated them into the mainstream banking arena, while the PSBs are still grappling with disgruntled
employees in the aftermath of successful VRS schemes .Also, following India’s commitment to the W To
agreement in respect of the services sector, foreign banks, including both new and the existing ones, have
been permitted to open up to 12branches a year with effect from 1998-99 as against the earlier stipulation of
8 branches.

29
 CO-OPERATIVE BANKS:-

Co-operative banks are small-sized units organized in the co-operative sector which operate both in urban
and non-urban centres. These banks are traditionally cantered on communities, localities and work place
groups and they essentially lend to small borrowers and businesses.

The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary cooperative
banks located in urban and semi-urban areas. These banks, until 1996, could only lend for non-agricultural
purposes.

However, today this limitation is no longer prevalent. While the co-operative banks in rural areas mainly
finance agricultural based activities including farming, cattle, milk, hatchery, personal finance, et cetera,
along with some small scale industries and self -employment driven activities, the co-operative banks in
urban areas mainly finance various categories of people for self-employment, industries, small scale units
and home finance.

Cooperative Banks in India are registered under the Co -operative. The cooperative bank is also regulated by
the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-operative
Societies) Act, 1965.

These banks provide most services such as savings and current accounts, safe deposit lockers, loan or
mortgages to private and business customers. For middle class users, for whom a bank is where they can
save their money, facilities like Internet banking or phone banking is not very important.

Co-operative banks function on the basis of 'no-profit no-loss'. Co-operative banks, as principle, do not
pursue the goal of profit maximization. Therefore, these banks do not focus on offering more than the basic
banking services. So, co-operative banks finance small borrowers in industrial and trade sectors, besides
professional and salary classes.

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 .in the West, but the importance of such banks have assumed in India is
rarely paralleled anywhere else in the world. The cooperative banks in India play an important role even
today in rural financing the Businesses of cooperative bank in the urban areas also have increased
phenomenally in recent years due to the sharp increase in the number of primary co-operative banks.
Cooperative Banks in India are registered under the Co -operative Societies Act. The cooperative bank is
also regulated by the RBI. They are governed by the Banking Regulations Act 1949 and Banking Laws (Co-
operative Societies) Act, 1965.

30
Cooperative banks in India finance rural areas under:

 Farming
 Cattle
 Milk
 Hatchery
 Personal finance

Cooperative banks in India finance urban areas under:

 Self-employment
 Industries
 Small scale units
 Home finance
 Consumer finance
 Personal finance

Some facts about Cooperative banks in India

 Some cooperative banks in India are more forward than many of the state and private sector banks.
 According to NAFCUB the total deposits & landings of Cooperative Banks in India is much more
than Old Private Sector Banks & also the New Private Sector Banks.
 This exponential growth of Cooperative Banks in India is attributed mainly to their much better local
reach, personal interaction with customers, and their ability to catch the nerve of the local clientele.

There are two main categories of the co-operative banks.

(a)Short term lending oriented co-operative Banks- within this category there are three sub categories of
banks via state co-operative banks, District co-operative banks and Primary Agricultural co-operative
societies.

(b)Long term lending oriented co-operative Banks-within the second category there are land development
banks at three levels state level, district level and village level.

31
32
33
The cooperation banking structure is divided into following five categories

1. Primary urban cooperative banks

2. Primary agriculture credit societies
3. District central cooperation bank
4. State cooperative bank
5. Land development bank

Primary urban cooperative bank:

The term Urban Co-operative Banks (UCBs), though not formally defined, refers to primary cooperative
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 cantered
around communities, localities work place groups. They essentially lent to small borrowers and businesses.
Today, their scope of operations has widened considerably.

Primary agriculture credit societies:

Agriculture continues to be the most vital sector of Indian economy, contributing a major share to our
national income and also providing livelihood to the majority of our population. A strong base of agriculture
growth is must for the overall economic development in a country like India. So to help the farmers and
make the financial help for them these cooperative societies are established .these societies finance farmers
not only for their short term requirements (use of improved seeds, fertilizers, insecticides, etc)but for
medium and long term(irrigation and land development activities)activities also.

District central cooperation bank:

These are the principal co-operative societies in the districts, in a state, the primary object of which is
financing other co-operatives, particularly the PCAs in the district. The DCCBs came in to existence after
the passing of Co-operative SocietiesAct1912.

These institutions also undertake banking business. These institutions act as Balancing Centres of Finance at
the district level. They provide the short term and medium term credit to the agriculturists. They also
supervise the PCAs in the districts.

34
State cooperative bank:

The state cooperative bank is the apex body of cooperative bank in any state. The long-term cooperative
credit structure has two tiers in many states with Primary Cooperative Agriculture and Rural Development
Banks (PCARDB) at the primary level and State Cooperative Agriculture and Rural Development Bank at
the state level. Under the Banking RegulationAct1949, only State Cooperative Apex Banks, District Central
Cooperative Banks and select Urban Credit Cooperatives are qualified to be called as banks in the
cooperative sector

Land development bank:

The long term credit needs of the agricultural sector are met by another type of co-operative institutions
known as Land Development Banks. The Land Development Banks meet the requirements of the farmers for
developmental purposes viz., provision of equipment like pump-sets, tractors and machinery and land
improvement in the form of levelling, bundling, reclamation of land, fencing, sinking of new wells and
repairs to old wells, Loans are granted on the security of mortgage of immovable property of the farmers.

Credit cooperatives are the oldest and most numerous of all the types of cooperatives in India. The
cooperative credit institutions in the country may be broadly classified into urban credit cooperatives and
rural credit cooperatives. There are about 2090 urban credit cooperatives and these societies together
constitute for about 10 percent of the aggregate banking business and therefore regarded as an important
segment of the banking system. The urban credit cooperatives are also popularly known as Urban
Cooperative Banks. The rural credit cooperatives may be further divided into short-term credit cooperatives
and long-term credit cooperatives. With regard to short-term credit cooperatives, at the grass-root level there
are around 92,000 Primary Agricultural Credit Societies (PACS) dealing directly with the individual
borrowers. At the central level (district level) District Central Cooperative Banks (DCCB)function as a link
between primary societies and State Cooperative Apex Banks (SCB).

HISTORY OF THE YOUR CITY NAME CENTRAL COOPERATIVE BANK

The Your city name Central Co-operative Bank Ltd. was registered on 15.03.1913.it was established to the
operations of the Primary Co-operative Societies, afflicted with it by raising resources and acting as a
balancing centre. Cooperation is as old as human civilization. It is self-help as well as mutual help. It is joint
enterprises of those who are not financially strong and cannot stand as legs and therefore came together not
with a view to getting profits but to overcome disability arising out of want of adequate financial resources.

35
MISSION

 Mission Targets of the bank is to help the self-helped groups by providing them loans at low rate.
 To be a top- class Bank of its class to achieve sustained growth of Business and Profitability,
fulfilling socio-economic obligations, excellence in customer service through up gradation of skills
of staff, their effective participation and making use of state-of the-art- technology.
 ACC Bank began operations in 1995 with a simple mission to be a World Class Indian Bank They
realized that only e single-minded focus on product quality and service excellence would help them
get there. Today, the bank is on the way towards that goal. It is extremely gratifying that its efforts
towards providing customer convenience have been appreciated both nationally and internationally.
 To put in place effective Internal control Systems.
 Promote trust, faith, confidence and commitment among the staff members, to meet the expectations
of the valued customers.
 Providing the education to the workers/employees of the cooperative societies.
 Managing the financial status of the cooperative societies.
 Connecting all the branches with the core banking system (C.B.S.) to provide online banking facility
till 2010.
 Installing the A.T.M. machines in all the branches.

VISION

 The Your city name Central transactional banking services and treasury products to wholesale and
Co- Operative Bank offers a wide range of commercial and retail customers.
 To providing the loans to the cooperative societies to establish the viaduct pariyojana. Starting the
new schemes for the cooperative societies to recover Performing Assets).
 Opening the education centres for cooperative societies to improve/increase the business through
giving them proper training & suggestions.
 Providing the loans for new schemas time to time.
 Repairing the plans for encouraging & awarding the employees of the Bank.

GROWTH

ACC Bank is a young and dynamic bank, with a youthful and enthusiastic team determined to accomplish
the vision of becoming a world-class Indian bank. Their business philosophy is based on four core values -
Customer Focus, Operational Excellence, Product Leadership and People. They believe that the ultimate
identity and success of the bank will reside in the exceptional quality of their people and their extraordinary
efforts. For this reason, they are committed to hiring, developing, and motivating and retaining the best
people in the industry .Their mission is to be "a World Class Indian Bank", benchmarking themselves

36
against international standards and best practices in terms of product offerings, technology, service levels,
risk management and audit & compliance. The objective is to build sound customer franchises across
distinct businesses so as to be a preferred provider of banking services for target retail and wholesale
customer segments, and to achieve a healthy growth in profitability, consistent with the bank's risk appetite.

TECHNOLOGY

ACC Bank Ltd. operates in a highly automated environment in terms of information technology and
communication systems. All the bank's branches have online connectivity, which enables the bank to offer
speedy funds transfer facilities to its customers. Multi-branch is also provided to retail customers through the
branch network and Automated Teller Machines (ATMs). The Bank has made substantial efforts and
investments in acquiring the best technology available internationally, to build the infrastructure for a world
class bank. The Bank's business is supported by scalable and robust systems which ensure that the clients
always get the finest services which bank offers. The Bank has prioritized its engagement in technology and
the internet as one of its key goals and has already made significant progress in web-enabling its core
businesses. In each of its businesses, the bank has succeeded in leveraging its market position, expertise and
technology to create a competitive advantage and build market share.

CHANNEL OF INFORMATION SHARING

In the Your city name Co-operative Bank the channel of information sharing from top to bottom and from
bottom to top if the management has to pass the information to the other branches then it is passed through a
circular by the bank to the different branches. This information's are sent to the district office which circulate
the information to the division's branches. Where these information's are then given to the employees who
work according to these information's/guidelines.

Any information from the bottom level is passed to the higher level through branch manager then to the
division manager then to district manager then to head office then the information is presented to the
management.

Information at corporate level and unit level is exchanged by using one of the following channels:-

 E-mail Systems.
 Paper Reply System.
 Courier System.

37
PRODUCTS

Like all other banks it also provide various banking services such as opening new accounts, Accepting
customers’ money as deposits, giving interest on it, providing loans at low interest rates, clearing of cheques
etc. Recently this bank has adopted new managerial practice in its operation i.e. full-fledged
computerization. It has also started net banking services for comfort of customers, but due to recent adoption
of technology most of the customers are unaware about it.

The main types of services are of:-

 Deposit Product
 Loan Product
 Service Charges
 Corporate Tie up
 Branches with Lockers
 Internet Banking Services

Rather than these services bank also provide various other services, such as it is also a medium of paying
salaries to employees of HRTC & HPSEB in the state and so on.

ECONOMIC FUNCTIONS OF CO-OPERATIVE BANKS

The co-operative banks in rural areas mainly finance agricultural based activities including farming, cattle,
milk, hatchery, personal finance, etc. along with some small scale industries and self-employment driven
activities. The co-operative banks in urban areas mainly finance various categories of people for self-
employment, industries, small scale units and home finance.

These banks provide most services such as savings and current accounts, safe deposit lockers, loan or
mortgages to private and business customers. For middle class users. For whom a bank is where they can
save their money, facilities like Internet banking or phone banking is not very important. Although they are
not better than private banks in terms of facilities provided, their interest rates are definitely competitive.
However, unlike private banks, the documentation process is lengthy if not stringent and getting a loan
approved quickly is rather difficult. The criteria for getting a loan from a UCB are less stringent than for a
loan from a commercial bank.

38
 THE YOUR CITY NAME CENTRAL COOP. BANK LTD

BOARD OF DIRECTORS

1. Neeraj Dalal, General Manager Mob. 99965-52823

2. Sh. Tej Prakash Singh, Director 7. Registrar, Coop. Societies
Mob. 94160-22133 Haryana, Panchkula
3. Smt Ranju Aneja, Director Mob. 0172-2585261
Mob. 93155-04868 8. Sh. Labh Singh, Director
4. Sh. Gurdial Singh, Director Mob. 94666-34785
Mob. 94163-93764 9. Sh. Thath Singh, Director
5. Smt. Reetu Rana, Director Mob. 94680-30000
Mob. 98960-74222 10. Sh. Lachhman Dass, Director
6. Sh. Sanjiv Kumar, Director Mob. 94164-62711

39
CHAPTER – 3
RESEARCH
METHODOLOGY
 OBJECTIVES

1. To know the customer preference about different type of loans of Your city name Central

Cooperative Bank.

2. To know the satisfaction level of the customers from bank lending policies.

3. To know about the various services provided by the bank.

4. To know about various loan schemes of the bank.

40
INTRODUCTION
Research may be defined as a documented prose work. Documented prose work means organized analysis of
the subject based on borrowed materials with suitable acknowledgement and consultation in the main body
of the paper. It is the pursuit of truth with the help of study, observation, comparison and experimentation. In
short, the search or knowledge through objective and systematic method of finding solution to a problem is
research.

TYPE OF RESEARCH

Descriptive research is used in this study in order to identify lending practices of the bank & determining
customer's level of satisfaction. In this method, a questionnaire & interviews of persons and officers
connected to such services were organised to get the at most realistic results & findings.

Research Design is mainly of three types:-

1. Exploratory Research.
2. Descriptive or Conclusive Research.
3. Experimental Research.

Exploratory Research:

It is often the initial step in the series of studies designed to supply information for decision-making. The
main purpose of this research is that of formulating a problem for more precise investigation or of
developing the working hypothesis from an operational point of view. The major emphasis in such studies is
on the discovery of ideas and insights.

2. Descriptive Research:

Descriptive Research includes surveys and fact-finding enquiries. The descriptive research is typically
concerned with determining the frequency with which something occurs or determining the degree to which
variables is associated. It is guided by an initial hypothesis.

41
Experimental Research:

In experimental research some variables are manipulated to observe their effect on other variables.
Experimentation is defined as a process where events occur in a setting at the discretion of the experimenter
and controls are used to identify the source of variation in the subject. Thus, experimental researches are
those where the researcher tests the hypothesis of casual relationships between variables.\

The study undertaken by me in this project is Descriptive Research:

Descriptive research is used in this study in order to identify lending practices of the bank & determining
customer's level of satisfaction. In this method, a questionnaire &interviews and officers connected to such
services were organised to get the at most realistic results & findings.

Sampling Design: Sampling maybe defined as the selection of some part of an aggregate or totality on the
basis of which a judgment or inference about the aggregate or totality is made.

Sample Size: The sample size is 100.

Sample Area: Your city name

Sample Unit: The study population includes the customers of the bank and sampling unit for the study was
individual customer.

Sampling Techniques: Sampling techniques are two types:

1. Probability Sampling: - In Probability Sampling every element of the population has a known
probability of being included in the sample.
2. Non-Probability Sampling: In Non-Probability Sampling the chance of any particular unit in the
given population being selected is unknown. In this type of sampling, items for the sample are
selected deliberately by the researchers; his choice concerning the items remains supreme. Thus, the
judgments of the organizers of the study play an important part in this sampling design.

I have used Non random sampling or mere specifically convenience sampling.

PROBLEM UNDERSTUDY

The problem is "To study the preferences of customers for different Loans with special reference to Home
and Education Loans of Your city name Central Cooperative Bank"

42
COLLECTION OF THE DATA

Two types of data were collected by various sources i.e. Primary & Secondary data.

Primary Data:

o Observation method
o Interview method
o Structured questionnaire

Secondary Data:

o Annual reports of the bank

o Articles & Research papers
o Manual of instructions on loans and advances
o Books
o Internet

DATA ANALYSIS TECHNIQUES

Charts:

A chart is a graphical representation of data. Data showing in a chart can make the data clearer, more
interesting and easier to read, charts help to analyse data and make comparison between different data.

Tables:

A table is a grid, an arrangement of rectangles or cell in rows and columns, A table can be useful for
enhancing the presentation of data.

43
LIMITATIONS OF THE STUDY

1. Time constraint:

The first and foremost limitation of the project was the shorter time span which was provided for
undertaking this project. The study or to assess the risk profile of investors to increase the market potential
of "Personal Banking" is a wider term which not only includes the study of various investment schemes, but
it also relates to all technical details as well as financial details about various investment options.

2. Unavailability of any other kind of data:

The data collected is the only source for identifying the negative aspects of an organization to improve the
condition of that organization to increases their customers by an effective way of processing order in shortest
possible time. It is only supported by secondary data which is collected through questionnaires and
interviews of senior executives of different organization.

3. Personal interaction not possible in some cases:

Project has been accomplished with the help of personal interviews and questionnaires. In some cases
personal interactions with the concerned person was not possible. This hampered the proper flow of
information.

4. Responses were not honest:

The major limitation of the project was that the responses of some of the questions were not 100 % honestly
given by the employee which hampered the glow of information.

44
 CHAPTER-4
DATA ANALYSIS
AND
INTERPRETATION
Q.4.1) What is the age of the respondents?

Table: 4.1 (Age of the respondents)

AGE IN YEARS DISTRIBUTION OF

RESPONDENTS

Frequency Percentage

18-25 12 12%

25-35 28 28%

35-45 25 25%

45-55 20 20%

55 and Above 15 15%

TOTAL 100 100%

Age
55 and Above 18-25

45-55 25-35

35-45

18-25 25-35 35-45 45-55 55 and Above

Figure: 4.1 (Age of the respondents)

Interpretation: According to this table there are 12 % respondents between 18 to 25 years old, 28%
respondents between 25 to 35 year old, 25% respondents between 35 to 45 years old, 20% respondents
between 45 to 55 year old and remaining 15% respondents are above 55 years to 35 years old.

45
Q.4.2) What is the Occupation of the responders?

Table: 4.2 (Occupation)

OCCUPATION NO. OF RESPONDERS PERCENTAGE

Govt. Employee 23 23%

Pvt. Employee 19 19%

Farmer 42 42%

Business 10 10%

Other 6 6%

TOTAL 100 100%

Sales

6%
10% 23% Govt. Employee
Pvt. Employee
Farmer
19%
42% Business
Other

Figure: 4.2 (Occupation)

Interpretation:

The table indicates that 23% respondents are Govt. Employees and 19% respondents are Pvt. Employees ,
42% respondents are farmer , 10% respondents are businessman and 6% respondents are depends on other
sources to earn income. A large number of respondents are farmer and totally dependents on agriculture.
This shows that the agricultural is still a major sector of employment for the unskilled and less educated
people in rural and semi urban area.

46
Q.4.3) How much respondents have a saving and current account in Your city name
Central Co-operative Bank?

Table: 4.3 (Have any Account in Your city name Central Cooperative Bank)

OPTION NO. OF RESPONDENTS PERCENTAGE

YES 70 70%

NO 30 30%

TOTAL 100 100%

0%
30%
YES
NO

70%

Figure: 4.3 (Have any account in Your city name Central Cooperative Bank)

Interpretation:
According to this table total sample size of the research is 100, which is 70% respondents have an account in
facilities which is bank provide to their, 30% respondents have no any account in Central Co-operative
Bank. Your city name Central Co-operative Bank.

So the next data analyse behalf on 70 respondents those use the services and facilities of bank.

47
Q.4.4) From how much time respondents are connected with Your city name

Cooperative Bank?

Table: 4.4 (How much time respondents are connected with Your city name Central Cooperative
Bank)

OPTION NO. OF RESPONDENTS PERCENTAGE

More Than Last 5 Year 35 35%

More Than 1 and Less Than 5 Year 20 20%

Last 1 year 30 30%

Recently 15 15%

TOTAL 100 100%

30%

20%

15%

35%

More Than Last 5 Year More Than 1 and Less Than 5 Year Last 1 year Recently

Figure: 4.4 (How much time respondents are connected with Your city name Central Cooperative
Bank)

Interpretation:-

According to the table 15% respondents recently connected with the bank and getting various facilities like;
Home Loan, Education Loan, Kisan Credit Card. Doodh Ganga Yojna, Agriculture Loan and allied
activities, 30% respondents are connected with the bank from last one year, 35% people connected with the
bank from last five years and 20% are very old customers of the bank, which shows a good reputation of the
bank.
 48

Q.4.5) What prompted the respondents to take loan from Your city name Central Co-
operative Bank?

Table: 4.5 (Prompted to take loan from Your city name Central Cooperative Bank)

OPTION NO. OF RESPONDENTS PERCENTAGE

Reasonable rate of the Interest 43 43%

Easy repayments 29 29%

Less formalities 21 21%

Others 7 7%

TOTAL 100 100%

Others
7%

Less formalities
21% Reasonable rate of the
Interest
43%

Easy repayments
29%

Figure: 4.5 (Prompted to take loan from Your city name Central Cooperative Bank)

Interpretation:-
According to this table 43% respondents are says that reasonable rate of interest by the bank. 29%
respondents said that it is easy repayments, which attract the peoples towards this bank. 21% respondents
said that there are fewer formalities and 7% respondents have other reasons.
 49

Q.4.6) Have you knowledge regarding guidelines of ACC Bank’s various Loans?
Table: 4.6 (Knowledge regarding guidelines of ACC Bank’s various loans)

OPTION NO. OF RESPONDENTS PERCENTAGE

Yes 75 75%

No 25 25%

TOTAL 100 100%

NO, 25%

YES, 75%

NO YES

Figure: 4.6 (Knowledge regarding guidelines of ACC Bank’s various loans)

Interpretation:
According to this table 75% people are of the view that bank has develop committees in the villages for the
assistance of women working under SHGs in villages. So this is good for such people to be up to date with
the bank policies, 25% respondents said that they don't know about any such type of policies.
 50

Q.4.7) Purpose of respondents are attaining lending service from the bank?

Table: 4.7 (Purpose of respondents are attaining agricultural lending)

OPTION NUMBER OF RESPONDENTS PERCENTAGE

For Education Loan 20 20%

For Home Loan 30 30%

For Vehicle 15 15%

For Agriculture 35 35%

TOTAL 100 100%

35%

30%

25%

20% 35%
30%
15%
20%
10% 15%

5%

0%
For Education Loan For Home Loan For Vehicle For Agriculture

Figure: 4.7 (Purpose of respondents are attaining agricultural lending)

Interpretation:-

According to this table 20% respondents are of the view that attainted the services from the bank for dairy
farms. 30% respondents makes the use of subsidies for green house , 15% people make the use of lending
services for establishing SHGs and 35% respondents are attaining agriculture loan for crops.
 51

Q.4.8) What is the ranking of the lending facilities provided by the Your city name Central Co-
operative Bank?

Table: 4.8 (Ranking about lending facilities provided by Your city name Central Cooperative Bank)

OPTION NO. OF RESPONDENTS PERCENTAGE

Excellent 30 30%

Good 42 42%

Average 24 24%

Poor 4 4%

TOTAL 100 100%

42%

30%
PERCENTAGE

24%

4%

EXCELLENT GOOD AVERAGE POOR

Figure: 4.8 (Ranking about lending facilities provided by Your city name Central Cooperative Bank)

Interpretation:-

This table shows that 42% respondents are feel that good lending services provided by the bank, 30%
respondents are feel that excellent lending services provided by the bank 24% respondents are feel average
services by the bank and only 4% respondents are shows poor lending services provided by the bank.
 52

Q.4.9) What is the Preferable banks for borrowing lending facilities?

Table: 4.9 (Preference to bank for borrowing lending facilities)

OPTION NO. OF RESPONDENTS PERCENTAGE

Public Banks 40 40%

Private Banks 20 20%

Co-operative Banks 35 35%

Other 5 5%

TOTAL 100 100%

Public Banks, 40%

Co-operative Banks, 35%

Private Banks, 20%

Other, 5%

PUBLIC BANKS PRIVATE BANKS CO-OPERATIVE BANKS OTHER

Figure: 4.9 (Preference to bank for borrowing lending facilities)

Interpretation:-

According to this table 40% respondents are preference for Public Banks. 20% respondents are preference
for Private Banks and 35% respondents are preferences for Cooperative Banks and remaining 5%
respondents are preference for other financial institutions.
 53

Q.4.10) What is the satisfaction of the respondents with the amount & period of
Instalment of lending services in Your city name Co-operative Bank?
Table: 4.10 (Satisfaction with the amount & period of instalment)
OPITION NO. OF RESPONDENTS PERCENTAGE

Satisfied 80 80%
Unsatisfied 20 20%
TOTAL 100 100%

80%

20%

SATISFIED UNSATISFIED

Figure: 4.10 (Satisfaction with the amount & period of instalment)

Interpretation:-

According to the table 80% respondents are fully satisfied with the amount and period of instalment of
lending services provided by the Your city name Central Co - operative Bank. Only 20% respondents are not
satisfied with the amount and period of instalment of lending services provided by the Your city name
Central Co-operative Bank.
 54

Q.4.11) Respondents who would like to prefer the lending services in Your city name
Central Co-operative Bank to their friends and relatives?

Table: 4.11 (Like to prefer these services to their friends and relatives)

OPTION NO. OF RESPONDENTS PERCENTAGE

Always 58 58%

Sometimes 32 32%

Never 10 10%

TOTAL 100 100%

58%

32%

10%

ALWAYS SOMETIMES NEVER

Figure: 4.11 (Like to prefer these services to their friends and relatives)

Interpretation:

According to the table 58% respondents are always like to prefer the lending services in Your city name
Central Co-operative Bank to their friends and relatives 32% respondents are sometimes like to prefer the
lending services to their friends and relatives. Only 10% respondents are never like to prefer the lending
services in Your city name Central Co-operative Bank.
 55

CHAPTER – 5
FINDINGS, SUGGUESTIONS
AND
CONCLUSION
 FINDINGS
The following are the finding of study agriculture lending in India with reference to the Your city name
Central Co-operative Bank:-

1) There is a very simple procedure followed by bank for agricultural loan.

2) Reasonable rate of Interest, Easy repayment and fewer formalities are the main factors determining
customer's selection of loans.
3) 70 % respondents are those respondents which have a saving or current account in Your city name
Central Co-operative Bank and they use the services and facilities which is provided by the bank.
4) 34 % respondents are very old customers of the bank those getting various facilities and services
from the bank.
5) Majority of the respondents were having 17 % housing loan from this bank as per study 26 %
respondents have taken education loans , 18 % respondents were having vehicle loan and 39 %
respondents are having agriculture loan .
6) 43% respondents are agreeing to take Loan and Credit Facility from Your city name Central
Cooperative Bank for reasonable rate of interest.
7) Quality of services provided by the staff is satisfactory because bank is catering to a small segment
only and the customers are properly deal with.
8) 53 % respondents are preferences for Co - operative Banks for borrowing agricultural lending
facilities.
9) 87 % respondents are fully satisfied with the amount and period of Instalment of agriculture loan
provided by the Your city name Central Co-operative Bank
10) Customers are satisfied with the mode of repayment of instalments.
11) Average time for the processing of loan is less i.e. approx. 7 days.

56
 SUGGESTIONS

1) The bank should adopt the modern methods of banking like internet banking, credit cards, etc.
2) The bank should plan to introduce new schemes for attracting new customers and satisfying the
present ones.
3) The bank should plan for expansion of branches in other districts as well as in other states also.
4) The bank should improve the customer services of the bank to a better extent.
5) The staff must be trained more so to perform efficiently as well as effectively.
6) In recruitment process, preference must be given to those candidates who belong to Haryana, because
it will help more for them to deal with local customers in their own languages.

57
 CONCLUSION

From the above analysis part it can be concluded that customers have a good respond towards the loan &
credit facility being given by the bank. Yet the Your city name Central Cooperative Bank Ltd. has a limited
customer base, so the bank should concentrate on such programs to attract and retain customers.

In present scenario Your city name Central Cooperative Bank is proving as one of the strongest bank in rural
areas of the Himachal Pradesh. Within a very short period of the time achievements made by the bank have
led it to new heights. It happens due to employee dedication towards the organization. Better relations with
customers and brand image. Not only the small income groups are approaching the bank but also many high
income class people are availing the services of the bank. Government is also taking initiatives to promote
the services of the bank.

To be the largest product issuer, Your city name Central Cooperative Bank Ltd. should focus or:

 Launch innovative product

 Customized advance product
 Better customer services
 Fastest customers solving techniques
 Customer retention

Apart from all of the above, Your city name Central Cooperative Bank Ltd. believes in providing good
customer services to their customers which is a key factor for success in future.

58
BIBLIOGRAPHY
 BIBLIOGRAPHY

The data is collected from the list of books and websites are given below:-

BOOKS REFFERED

 Finance and Management (Dr. S. Suba Reddy & Dr: P. Raghu Ram, Published in the year 1996)
 Agricultural Banking- Getting the Perspective Right (B. Yerram Raju: Published in the year 2013
 Agriculture Rural Banking and Miero Finance in India (Rais Ahmed: Published in the year 2012
 Banking Law and Practice (P.N. Varshney; Published in the year 2014)
 Theory, History and Practice of Co-operation (S. Nikkiran and K. Ravichandran and was published
in the year 2009)

REFERENCE

 Detailed Information about the Your city name Central Cooperative Bank Limited and its services.
Retrieved From https://www.kccb.in
 Guidelines of Reserve Bank of India for cooperative banking in India. Retrieved From
https://www.rbi.org.in
 www.wikipedia.com
 www.investopedia.com
 www.Scribd.com

59
ANNEXURE
 QUESTIONNAIRE

Q.1) Age of the respondents?

a) 18-25 b) 25-35

c) 35-45 d) 45-55

e) 55 and above

Q.2) Occupation of the respondents?

a) Govt. Employee b) Pvt. Employee

c) Farmer d) Business

e) Other

Q.3) Respondents have a saving and current account in Your city name Central Co-operative Bank?

a) Yes b) No

Q.4) From how much time respondents are connected with Your city name Co-operative Bank?

a) More than last 5 years b) More than 1 and less than 5 years

c) Last 1 year d) Recently

Q.5) What prompted the respondents to take loan from Your city name Central Co-operative Bank?

a) Reasonable rate of interest b) Easy repayments

e) Less formalities d) others

Q.6) Have you knowledge regarding guidelines of ACC Bank's various loans?

a) Yes b) No

61
Q.7) Purpose of respondents are attaining lending services from the bank?

a) For daily product b) For establishing SGH

c) For green house

Q.8) Ranking of the agricultural facilities provided by the Your city name Central Cooperative Bank

a) Excellent b) Good

c) Average d) Poor

Q.9) Preferable banks for borrowing lending facilities?

a) Public Banks b) Private Banks

c) Co-operative Banks d) Other

Q.10) Satisfaction of the respondents with the amount & period of Installment of lending services in
Your city name Central Co-operative Bank?

a) Satisfied b) Unsatisfied

Q.11) Respondents who would like to prefer the lending services in Your city name Central Co-
operative Bank to their friends and relatives?

a) Always b) Sometimes

c) Never

62