CERTIFICATE

This is to certify that this project report titled “Analysis of Retail Banking” submitted to
Union Bank of India in partial fulfilment of the requirement for the award of the degree of
Bachelor of Business Administration program is a record of the original and independent
work carried out by Ms. Richa Sinha under my guidance and supervision. This has not
previously formed the basis of the award of any degree, diploma or similar title of
recognition.

Place: New Delhi, Delhi Date: 9 th August,

2019

Signature
Mr. Rashid Ali Khan
(Name and Designation of the Guide)

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 A project report on Analysis of Retail Banking
Done at
UNION BANK OF INDIA

Submitted By:

RICHA SINHA
Enrollment no. 06514901717, Vth semester
Bachelor of Business Administration,
Maharaja Surajmal Institute, GGSIPU

Under the guidance of:

Mr. Rashid Ali Khan

Asst. General Manager,
Mid Corporate branch,
UNION BANK OF INDIA
337, Khajoor road, Block-16, Karol Bagh, New Delhi, Delhi- 110005

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 DECLARATION

I, Richa Sinha, hereby declare that the project report entitled “Summer Internship Project” at
UNION BANK OF INDIA submitted to Maharaja Surajmal Institute, Guru Gobind Singh
Indraprastha University is prepared by me during the academic year 2019-20 under the
guidance of Mr. Rashid Ali Khan, Assistant General Manager, Mid Corporate Branch, Union
Bank of India.
This report is not based on any previously submitted project for the award of any Degree or
Diploma offered by any University. It is the result of my own effort.

Signature

Name: Richa Sinha

Enrollment no: 06514901717

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 ACKNOWLEDGEMENT

The Training opportunity I had with Union Bank of India was a great chance for my skills
and professional development. Therefore, I consider myself a very lucky individual as I was
provided with an opportunity to be a part of it.
I gratefully acknowledge my indebtedness to my mentor, Mr. Rashid Ali Khan, Assistant
General Manager, Mr. Arun Kumar Yadav, Manager, Operations and to all Department
heads and employees for taking part in useful decision making and giving necessary advices
and precious guidance which were extremely valuable for my study both theoretically and
practically.
I am immensely grateful to all the employees at Union Bank of India for the help and
cooperation rendered to me during the study.
I perceive this opportunity as a big milestone in my career development. I will strive to use
gained skills and knowledge in best possible way.
Sincerely,
RICHA SINHA

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 CONTENTS

Serial No, Title Page No.

1. Executive Summary 6
2. Banking industry: An overview 7

2.1. History of Banking 8

2.2. Banking structure in India 9
2.3. Indian Banking system 10

3. Chapter I: INTRODUCTION 11
3.1. Organisational Overview 12
3.2. Retail Banking 16

4. Chapter II: LITERATURE REVIEW 20

4.1. Retail Banking services offered by Union Bank of India 21

4.2. Retail loans 22

5. Chapter III: RESEARCH METHODOLOGY 27

5.1. A survey on Union Bank of India 29
6. Chapter IV: DATA ANALYSIS & INTERPRETATION 36

6.1. Comparison of retail loan schemes 38

6.2. Key financial ratios to analyse Retail Banking industry 48
7. Chapter V: FINDINGS & SUGGESTIONS 51

8. Chapter VI: LIMITATIONS OF THE STUDY 55

& CONCLUSION
9. Bibliography 58
Annexure 59

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 EXECUTIVE SUMMARY

Project Title:
ANALYSIS OF RETAIL BANKING SECTOR (with reference to Union Bank of India)
Duration: 8 weeks
Place of work: New Delhi, Delhi
The main objective of the project was to learn about the various retail products that the bank
had to offer to the customers, to compare the same with the retail loan products of other
selected banks and find out customers views and perceptions about the retail lending products
so offered so to adjudge their competitiveness. In order to know about the schemes detailed
descriptions of schemes was prepared and then on the basis of them comparative tables were
prepared to compare the schemes of UBI with the schemes of other selected banks.
Before going to the analysis, it is mandatory to know something about the organization, its
core products that are offered; about the retail loan schemes, its classifications and the whole
of its process. That’s why, first of all, I’ve made an overview of the organization, the vision
and mission of the bank, its management profile and shareholding pattern. The retail loan
schemes provided by the bank and its features and details.
In order to analyse customer perception and awareness, a questionnaire was prepared and
circulated through social media for the customers to give feedback. The main focus was on
salaried employees who have a stable job because they come under the majority of people
who acquire retail loan services. The main objective was to analyse the preferences and
awareness of the customers in retail banking sector. Various methods and techniques which
show the analysis of data through tabulation, computation and graphical representation of
data collected from survey were used to accomplish the study and on the basis of these
findings were given.
To analyse the performance of the bank, key financial ratios were also used to analyse the
year to year performance of the bank. The key ratios which are used by investors and analysts
to evaluate banks in retail banking industry are Loans to assets ratio, return on assets ratio
and net interest margin. A year wise comparison was prepared to analyse the information and
evaluate the bank.
After the findings, I concluded my project by stating the suggestions and limitations of the
study observed during the process of preparing the report.
The retail banking industry is emerging immensely and it has been the main growth driver for
Indian banking sector during the past few years. Unlike older days, people now, rely on banks
for their financial handling and depend on them for financial queries or aid.
Throughout this process, for my task of preparing the report, I was guided by the executives
of the bank and they helped me in each and every step. A lot of observation went it and
sufficient information was obtained from the internet for this study.

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 BANKING INDUSTRY: An overview

The banking sector is the section of the economy devoted to the holding of financial assets
for others, investing those financial assets as leverage to create more wealth and the
regulation of those activities by government agencies.
The modern banking industry is a network of financial institutions licensed by the state to
supply banking services. The principal services offered relate to storing, transferring,
extending credit against, or managing the risks associated with holding various forms of
wealth.
 Holding of Financial Assets

This is the core of all banking, and where it began—though it has expanded far beyond the
days of holding gold coins for Holy Land pilgrims in exchange for promissory notes. A bank
holds assets for its clients, with a promise the money may be withdrawn if the individual or
business needs said assets back. Avoiding devastating bank runs that could destroy the sector
as a whole is why banks are required to maintain at least 8% of their book values as actual
money.

 Using Assets as Leverage

Traditionally, banks leverage the money in their vaults as loans, earning money from the
interest rates charged on those loans. The great contradiction of banking is that almost all of a
bank's actual money is nowhere near its vaults, meaning that its true value is only paper, yet
that paper value is what grows the economy.
The banking sector has always attempted to diversify its risks by investing as widely as
possible; this prevents an unexpected loan default from sinking the entire bank. However, this
can cause other problems. If a bank had invested in the aluminum futures market and had
a vested interest in increasing its value, it could simply prevent the aluminum from being sold
to industry and drive up that value. This could have a knock-back effect on industry and
disrupt the economy, which the banking sector should avoid at all costs.

 Regulation of Banking Activities

Because banks are the underpinning of a modern economy, governments naturally have laws
in place to prevent banks from engaging in dangerous activity that threatens the economy;
these laws are often enacted after hard financial lessons, such as the creation of the Federal
Deposit Insurance Corporation (FDIC)in 1933 after the bank panics of the previous 50 years.
However, such laws are campaigned against by banks and are sometimes removed, and this
has led to history repeating itself.
The banking sector's core is trust. Without it, no one would deposit money, and it would be
unable to use that money to give loans, invest and drive economic growth, and regulation is
used to create that trust.

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 HISTORY OF BANKING

Banking is nearly as old as civilization. The history of banking could be said to have started
with the appearance of money. The first record of minted metal coins was in Mesopotamia in
about 2500B.C. the first European banknotes, which was handwritten appeared in1661, in
Sweden. cheque and printed paper money appeared in the 1700’s and 1800’s, with many
banks created to deal with increasing trade.

The history of banking in each country runs in lines with the development of trade and
industry, and with the level of political confidence and stability. The ancient Romans
developed an advanced banking system to serve their vast trade network, which extended
throughout Europe, Asia and Africa.

Modern banking began in Venice. The word bank comes from the Italian word “ban co”,
meaning bench, because moneylenders worked on benches in market places. The bank of
Venice was established in 1171 to help the government raise finance for a war.

At the same time, in England merchant started to ask goldsmiths to hold gold and silver in
their safes in return for a fee. Receipts given to the Merchant were sometimes used to buy or
sell, with the metal itself staying under lock and key. The goldsmith realized that they could
lend out some of the gold and silver that they had and charge interest, as not all of the
merchants would ask for the gold and silver back at the same time. Eventually, instead of
charging the merchants, the goldsmiths paid them to deposit their gold and silver.

The bank of England was formed in 1694 to borrow money from the public for the
government to finance the war of Augsburg against France. By 1709, goldsmith were using
bank of England notes of their own receipts.

New technology transformed the banking industry in the 1900’s round the world, banks
merged into larger and fewer groups and expanded into other country.

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 BANKING STRUCTURE IN INDIA

As per the Reserve Bank of India (RBI), India’s banking sector is sufficiently capitalised and
well- regulated. The financial and economic conditions in the country are far superior to any
other country in the world. Credit, market and liquidity risk studies suggest that Indian banks
are generally resilient and have withstood the global downturn well.
Indian banking industry has recently witnessed the roll out of innovative banking models like
payments and small finance banks. RBI’s new measures may go a long way in helping the
restructuring of the domestic banking industry.
The digital payments system in India has evolved the most among 25 countries with India’s
Immediate Payment Service (IMPS) being the only system at level 5 in the Faster Payments
Innovation Index (FPII).

The Indian banking system consists of 27 public sector banks, 21 private sector banks, 49
foreign banks, 56 regional rural banks, 1,562 urban cooperative banks and 94,384 rural
cooperative banks, in addition to cooperative credit institutions.^^ In FY07-18, total lending
increased at a CAGR of 10.94 per cent and total deposits increased at a CAGR of 11.66 per
cent. India’s retail credit market is the fourth largest in the emerging countries. It increased to
US$ 281 billion on December 2017 from US$ 181 billion on December 2014.
Key investments and developments in India’s banking industry include:

 As of September 2018, the Government of India launched India Post Payments Bank
(IPPB) and has opened branches across 650 districts to achieve the objective of
financial inclusion.
 The total value of mergers and acquisition during 2017 in NBFC diversified financial
services and banking was US$ 2,564 billion, US$ 103 million and US$ 79 million
respectively.
 The biggest merger deal of FY17 was in the microfinance segment of IndusInd Bank
Limited and Bharat Financial Inclusion Limited of US$ 2.4 billion.
 In May 2018, total equity funding's of microfinance sector grew at the rate of 39.88 to
Rs 96.31 billion (Rs 4.49 billion) in 2017-18 from Rs 68.85 billion (US$ 1.03 billion).

Enhanced spending on infrastructure, speedy implementation of projects and continuation of

reforms are expected to provide further impetus to growth. All these factors suggest that
India’s banking sector is also poised for robust growth as the rapidly growing business would
turn to banks for their credit needs.
Also, the advancements in technology have brought the mobile and internet banking services
to the fore. The banking sector is laying greater emphasis on providing improved services to
their clients and also upgrading their technology infrastructure, in order to enhance the
customer’s overall experience as well as give banks a competitive edge.
India’s digital lending stood at US$ 75 billion in FY18 and is estimated to reach US$ 1
trillion by FY2023 driven by the five-fold increase in the digital disbursements.

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 INDIAN BANKING SYSTEM

Reserve Bank of India

Schedule Banks
Non-Schedule Banks

State co-op Commercial Central co-op Commercial Banks

Banks Banks Banks and
Primary Cr.
Societies

Indian Foreign

Public Sector Private Sector

Banks Banks

State Bank of India

and its Subsidiaries Other Nationalized Regional Rural
Banks Banks

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 CHAPTER I:
INTRODUCTION

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Organizational Overview

ABOUT UNION BANK OF INDIA

Established on November 11, 1919, in Mumbai, Union Bank of India was initially started as a
Limited company. After nationalization in 1969, the bank turned into a commercial bank. The
Head Office of the bank is situated at 239, Vidhan Bhavan Marg, Nariman point, Mumbai.
The Father of the Nation Mahatma Gandhi opened this bank in 1921. Union Bank of India
from the beginning has reached Himalayan heights, fostering India’s dreams.
The bank enjoys a great clientele based with more than 5.7 crore clients associated with it.
Total number of ATMs stood at 12963 including 5407 micro ATMs & 3115 talking ATMs as
of 30 June 2018. UBI has around 4300 branches, the bank also has international presence
with 4 overseas branches at Hong Kong, DIFC (Dubai), Antwerp (Belgium) and Sydney
(Australia). In addition, the bank has representative offices at Shanghai Beijing and Abu
Dhabi. The bank also operates in United Kingdom through its wholly owned subsidiary
Union Bank of India (UK) Ltd.
Union Bank of India's portfolio of services include Retail Banking Corporate/Wholesale
Banking Treasury Operations cash management services merchant banking depository
services online trading in securities and clearing bank services.
Over the years, Union Bank of India have earned the reputation of being techno-savvy bank
and is one of the front runners amongst public sector bank in the field of technology. It is one
of the pioneer banks, which launched Core Banking Solution in 2002. In 2016, Union Bank
of India was awarded the Best Bank Award for Use of Technology for Financial Inclusion
among Large Banks by Institute for Development & Research in Banking Technology
(IDRBT).
UBI has ensured complete customer delight, living up to its image of, “GOOD PEOPLE TO
BANK WITH”. The key to the success of any organization lies with its people.

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VISION AND MISSION
Vision of UBI
“To become the bank of first choice in our chosen areas by building beneficial and lasting
relationships with customers through a process of continuous improvement”. At Union Bank
of India they have the vision to be:
 A financial supermarket, with leadership in identified spaces.
 A top shareholder wealth creator where growth is a passion.
 A young, innovative and adaptive organization leveraging its experienced workforce.
 A bank where customers are supreme and the brand admired by all stakeholders.
 An organization that cares for society and demonstrates best corporate governance.

Mission of UBI
 To be customer centric organization known for its differentiated customer service.
 To offer comprehensive range of products to meet all financial needs of customer.
 To be a top creator of shareholder wealth through focus on profitable growth.
 To be a young organization leveraging on technology and experienced workforce.
 To be the most trusted brand, admired by all stakeholders.
 To be a leader in the area of Financial Inclusion.

Logo of UBI

Bank has adopted a simple new logo for universal appeal and to aid top of mind recall. The
new logo symbolizes the qualities and values they stand for. Union bank has promised 4 key
deliverables to customers based on the strength built in:
i. Value for money
ii. Committed turnaround time for delivery of products and services
iii. Choice of banking channels for customers and
iv. Transparency in product offerings and prices.

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MANAGEMENT PROFILE OF UBI
NAME DESGNATION

Shri Kewal Handa Chairman & Part-time Non-official

Director

Shri Rajkiran Rai G. Managing Director & CEO

Shri Gopal Singh Gusain Executive Director

Shri Dinesh Kumar Garg Executive Director

Shri Manas Ranjan Biswal Executive Director

Dr. Madnesh Kumar Mishra Govt. Nominee Director

Shri Arun Kumar Singh RBI Nominee Director

Shri Rajiv Kumar Singh Chartered Accountant Director

Dr. Mathura Swaminathan Part-time Non-Official Director

Dr. Uttam Kumar Sarkar Shareholder Director

Shri K. Kadiresan Shareholder Director

Shri Jayadev M Shareholder Director

SHAREHOLDING PATTERN- UNION BANK OF INDIA

NAME OF SHAREHOLDER % of SHARES
Promoters and Promoters group 74.27%
General Public 8.3%

Financial Institutions 7.62%

Mutual Funds 5.53%
Foreign Institutions 3.15%
Others 1.03%
Central Govt. 0.1%

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COMPETITORS OF UNION BANK OF INDIA IN BANKING SECTOR

Top Performing Public Sector Banks

 State Bank of India
 Bank of Baroda
 Punjab National Bank
 Bank of India
 IDBI Bank

Top Performing Private Sector Banks

 Axis Bank
 HDFC Bank
 Kotak Mahindra Bank
 ICICI Bank
 Yes Bank

Top Performing Foreign Banks in India

 CitiBank
 Standard Chartered Bank
 HSBC Bank
 Deutsche Bank
 Royal Bank of Scotland

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CORPORTATE BANKING
Corporate banking typically refers to financial services offered to large clients ('wholesale
clients'). Although many wholesale clients are large corporations, they may also include other
institutions like pension funds, governments and other (semi-) public entities. Corporate
banking is a very profitable division for banks, far more profitable than retail banking, which
is aimed towards households and small and medium enterprises (SME's).
Services offered:
The services offered by corporate divisions of banks include
(a) general Commercial Banking activities: Commercial banking activities include
traditional banking services like deposit taking, lending, lines of credit, and facilitation of
various kinds of financial transactions (e-banking, credit cards, etc.). Households and small
and medium enterprises (SME's) also rely on this range of services for their financial needs.
(b) services particularly tailored to large clients such as multinational companies: For
wholesale clients, however, many additional financial services are available, such as:
International Transactions: International banking services include trade financing and foreign
exchange transactions. Banks also offer services to protect firms against currency and price
fluctuations.
Investment Banking: Large corporations and public institutions are financed not only
through loans, but through the sale of securities (stocks and bonds) to the public. The services
related to the issuing of securities are called 'investment banking', a business that used to be
completely separated from traditional commercial banking. In recent decades, the distinction
between traditional commercial and investment banks has become blurred, and nowadays
many banks offer both types of services. Investment banks perform underwriting, that is they
assist companies in issuing bonds or shares, and buy the initial offers at a fixed price.
Investment banking also includes providing advice and financing for mergers and
acquisitions (M&A's).
Project Finance: For large infrastructure and other projects, banks offer specific loans which
are repaid based on the revenue generated by that project. For some large and potentially
risky projects, the bank can arrange a banking syndicate, wherein a group of banks each lend
a client a portion of a large loan. Project finance can also include the sale of project-specific
bonds.
Insurance: Banks may also sell insurance products, although insurance is traditionally not a
banking activity. Again, consolidation in the financial services industry has brought together
many different financial services. These services allow corporate clients to access many
different services within a single financial institution. While banks may also offer retail
insurance products to individuals, corporate insurance may cover company activities, staff
and management.

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Advisory Services: Wholesale banking activities also include financial advising for all kinds
of corporate and financial activities, such as mergers and acquisitions, asset management, and
taxation (e.g. the use of tax havens).
Shareholding: Banks can participate in the management of, and own shares in companies. A
bank can, for example, buy a company's shares to help to provide the company with some
extra liquidity, if the company is in financial distress.
Functions and services of Corporate Banking:
Corporate banks might be offering similar services to retail banks. However the major
distinction is the clientele and the amount of money and profit involved. Largely, corporate
banking solutions include corporate finance, credit management, asset management, cash
management, and loan management.
Corporate Finance: It is a segment of financial services necessary for corporations, like
funding, capital structure, allocation of finances and more. It is largely related to financial
planning and how finances must be implemented at various stages of the business.
Credit Management: The basic function of a bank is giving credit to its customers. It
doesn’t just end there. It is the process that covers various stages from granting credit to its
recovery. Credit management also includes setting up the terms and conditions, the policy of
agreement, analysis of risk factors and other related functions.
Asset Management: In simple words, this segment takes care of the money owned by
corporations or individuals. This segment of corporate banking directs and decides where to
invest the money.
Cash Management: Management of cash flow of the corporates is one of the key functions
of corporate banks. This segment ensures efficient collection, distribution and investment of
cash in an organization. It ensures efficient implementation of resources and various other
financial operations.
Loan Management: Corporate banking involves a specialized loan department that oversees
the process of granting loans to the corporation, compliance with the credit regulation
policies, and other management related functions. The loan department of corporate banks
must ensure that they must maintain banks profit.
CORPORATE BANKING PRODUCTS OFFERED BY BANKS
Today, the commercial and corporate banking industry is one of the largest contributors to
the development of the economy and growth of the country. The adoption of the latest
technology has transformed the industry. It has made banks more efficient in their
productivity and given them an effective way of fulfilling customer need and expectations.
Corporate banking offers a range of corporate products and services. The technology enables
effective implementation at any time and place. At the same time, they have the expertise to
provide customized corporate solutions as per the client requirements. From corporate
finance to cash management, banks are efficient enough to provide end-to-end solutions to
corporations in order to achieve company goals and objectives. These banks are committed to
cater to small-to-midsize companies as well as the large conglomerates, irrespective of the
amount of money involved.

1. Loans and Credit Products:

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Corporate banking offers a range of loans and credit products that are based on clients’
requirements. This happens to be the biggest source of revenue and profit earning for the
banks. Hence, it is the primary segment in corporate banking.

2. Cash Management Products:

As mentioned above, within corporate banking, banks provide cash management services
through various products. It helps in managing companies’ working capital and cash flow.

3. Commercial Land Loans:

Corporations require a large area of commercial land to set up and operate. These banks offer
loans as well as real estate analysis, evaluation, and more.

4. Equipment Leasing and Lending:

Corporate banks provide services and customized loans for equipment and operation of the
companies belonging to various industries.

5. Loan Syndication:
It is an important part of corporate financing wherein a group of lenders comes together to
fund the borrower.

6. Working Capital Loan:

Banks also provide loans to boost the working capital of a business. It is usually done in the
events of growth and expansion projects.
Apart from this, trade finance, bill collection, workforce, and credit letters are some of the
other tasks handled by corporate banks. They also offer the opening of personal and current
accounts for corporates, mortgages, overdraft facilities and more.

ROLE OF CORPORATE BANKING IN INDIAN ECONOMY

Corporate banking is a significant division of commercial banks. This is a relatively new

concept that has been adopted by many banks. According to the definition, corporate
banking deals specifically with businesses. They provide corporate banking solutions to the
businesses of all sizes. From a small grocery store to large industrial corporations, all belong
to this specialized division of commercial banks. In simple words, commercial banks deal
with business banking or corporate customers.
This term originated in 1933 in the United States. The division was established to create a
distinction from investment banking. In India, it is a recent trend that is growing popular day-
by-day. Many domestic, local, private and foreign banks have adopted this concept and are
providing tailor-made corporate banking solutions to their corporate clientele.
Corporate Banking is very important for the economy of the country. One of the primary
reasons is profit. Corporate banking is the source of the highest profits for the banks. For
some banks, it is the key source of earnings. This is simply because it involves corporations
with large working capital. Usually, corporate loans involve large sums of money that has a
higher rate of interest when compared to regular loans.

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Role of Corporate Banking:
Retail banking and corporate banking are essential components of the banking system and
commercial banks. The existence of both is imperative for the functioning of the economies
at the domestic and global level. Their primary role in the growth and development is through
the facilitation of business. Meanwhile, banks are instrumental in the government’s monetary
support and plan.

1. Capital Formation:
The banks are a basic source of creating capital that is significant for the working and
development of an economy. No economy can survive without an adequate degree of capital.
Banks use the deposits, savings, and investments of their customers to create capital and
remove the deficiency. They make optimum usage of the accumulated savings of the people
within the branches and make it available for enterprise and developmental work.

2. Financial Services:
Corporate banks are a primary source of finances for entrepreneurial and industrial work. As
mentioned above, they provide a wide range of financial services to businesses. Therefore, it
is important for domestic and international trade and commerce. Besides foreign trade
transactions, handling of deferred payments and enabling import of heavy machinery is also
taken care of by corporate banks. Also, they facilitate business between domestic and foreign
companies.

3. Providing Credit:
Banks are fundamental sources of credit necessary for establishing and developing industries.
Where would you get large sums of money needed for setting up big corporations?

4. Directing Funds for Development Work:

Banks invest the savings of the people for a more productive purpose like developmental
work. They mobilize the money and distribute it to various sectors of the economy,
contributing to the growth of the country. They are one of the main sources of economic
development and capital formation.

5. Financial Support to Government:

Government is the prime governing body responsible for the development of various
industries and sectors. However, it requires financial support in order to carry out
developmental work in different regions of the economy. Banks provide long-term credit to
the government through Government securities and treasury bills.

6.Promotion of Entrepreneurship:
Banks are a backbone of the promotion and development of entrepreneurship in countries like
India. From generating project ideas and providing managerial guidance to the provision of
funds, everything is a part of the entrepreneurial role of the banks.

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TRENDS & CRITICAL ISSUES
Speculative finance/“Ponzi finance”:
Recently, there has been a trend towards more speculative methods of financing. Previously,
clients used to pay back both the principal and the interest on loans through their cash flows;
nowadays many companies' cash flows are only sufficient to service their debt -- that is,
cover their interest payments. Adverse circumstances, like small rises in interest rates or
declining company incomes, can result in the company not being able to service their debt at
all. This situation can lead to “Ponzi finance,” where a company constantly raises new funds,
often through hidden or innovative systems, in order to pay other creditors.
This practice is often facilitated by banks and other financial firms that seek to make profits
from increasingly complex finance mechanisms. Obviously, an economy dominated by such
speculative 'Ponzi finance' may be fragile and susceptible to crisis, as it becomes dependent
on continuing asset price inflation and larger amounts of debt. Increasingly, there are cases of
companies that get into trouble as a result of using Ponzi finance, and may go bankrupt.
Authorities can intervene, but such intervention may only encourage more 'Ponzi finance' to a
point where the excessive amount of debt is beyond salvation.
Conflict of Interests:
As mentioned above, banks offer an increasingly broad scope of financial services to their
corporate clients. One could argue this leads to a more comprehensive provision of financial
services. On the other hand, however, the danger for conflicts of interest to occur also
increases, as banks and companies become more and more intertwined. For instance, if banks
underwrite bonds for a certain company at a specific price, they may be tempted to sell these
bonds to investors who seek the bank's advice in their asset management decisions. Another
risk that became apparent in recent years stems from the use of the above-mentioned Ponzi
schemes. When a company is accumulating debt, and is not able to meet its interest
obligations, financial firms may help develop all kinds of 'creative' mechanisms to channel funds
to the company, and hide the company's debt. Banks may become increasingly involved in
fraudulent practices, especially if bank representatives also have a seat in the company's
board or own its shares.

CSR Initiatives:
Of course, protecting investors from the practices described above is not really a matter of
Corporate Social Responsibility. The practices described, like false prospectuses and
misleading advices, are simply illegal. Following the corporate scandals in United States and

~ 21 ~
Europe, governments have taken some steps to reduce these conflicts, but critics argue that
the reforms have not gone far enough. More traditional sustainability issues are also critical
for the corporate banking sector. Given its role in facilitating all kinds of corporate practices,
banks have a great role and responsibility in advancing sustainability. Currently, CSR
initiatives directed to corporate banking mainly cover only a small part of company financing
by banks. The Equator Principles, for example, offers clear indicators to what environmental
and social conditions projects have to fulfil to be financed.
Several other banks have adopted other environmental standards around forestry, oil & gas,
and mining. However, corporate banks have a long way to go in addressing sustainability.
For example, most investment banks still do not perform environmental and social screening
on the companies for which they raise funds. Also, the practice of assisting clients with the
use of tax havens and other offshore markets is very dubious. Since September 11,
governments have paid more attention how these offshore centres can be linked to all kinds
of illegal and unsustainable activities. Although some steps have been made to prevent
money laundering, efforts to combat tax havens have been limited.

~ 22 ~
 CHAPTER II:
LITERATURE REVIEW

~ 23 ~
RETAIL BANKING SERVICES OFFERED BY UNION BANK OF INDIA
Followings are the main products of The Union Bank of India:
 Retail loans
 Credit & Debit Cards
 Mutual Funds
 Deposits
 ATMs
 Lockers
 Accounts
 Other Services
Retail Loans
Union Bank of India offers a wide range of retail loans to meet your diverse needs. Whether
the need is for a new house, child's education, purchase of a new car or home appliances, our
unique and need specific loans will enable you to convert your dreams to realities. Major loan
products offered are Home loans, Personal loans, Auto loans, Secured Loans, Education
loans, Mortgage, Health loans, etc.
Credit & Debit Cards
Credit and Debit cards are the most widely accepted card and we can withdraw money from
any ATM displaying the VISA logo, in India and abroad. At VISA Electron merchant shops,
it also serves as our electronic purse, and money gets debited instantly from our account, as
we pay. The Card allows us to get mini-statements from Union Bank of India ATMs, or to
check the balance in our account, avoiding visits to even our nearest branches.
The Union Bank of India International Debit Card is accepted at over 10000 Visa Electron
ATMs in India and 850000 ATMs worldwide. The card is also accepted at any 100000
merchant outlets in India and around 13 million globally. The card enables you to enjoy the
convenience of cash-less purchasing power without the fear of overdrawing your account.
Mutual Funds
Union Bank of India offers more than 10 different Mutual Fund schemes like Union tax saver
fund direct- growth, Union liquid fund growth, etc.
Deposits
Union Bank of India offers various deposit plans that you can choose from depending on the
term period, nature of deposit and its unique saving and withdrawal features. Apart from
competitive interest rates and convenient withdrawal options, the bank’s deposit plans offer
other features such as overdraft facility, outstation cheque collections, safe deposit lockers,
ATM's etc.
ATMs
As a Union Bank ATM card holder, you can perform banking transactions round the clock.
Additionally, Union Bank ATMs accept all VISA / MasterCard / RuPay / Discover / JCB &
UnionPay Cards. Union Bank of India has around 4200 ATMs in India.

~ 24 ~
Lockers
Union Bank of India offers a safe, trustworthy space to store valuables, jewellery, documents
and other things dear to you. UBI offers State-of-the-art Lockers, the safe deposit vaults with
fully equipped, latest burglar alarm systems. For additional safety, the Locker holder assigns
a code word which further increases security, they are available in different sizes as per
customer’s requirement.
Accounts
Union Bank of India offers various types of accounts that customers can choose from
depending on their requirements, nature of business and its unique saving and withdrawal
features. There are many options in current and savings accounts as well. For e.g. Union
classic Current account, etc.
Other Services
Apart from the Loans, Deposits, Credit and Debit Cards, Union Bank of India offers other
services like E-Banking, Demat account, Online demat trading, Telebanking, tax and bill
payment services, railway ticket booking, etc. to make financial dealings easy and
convenient.

RETAIL LOANS OF UNION BANK OF INDIA

1.UNION HOME (Home Loan)
Eligibility
 Indian citizen above 21 years
 Individual, either singly or jointly with other family members viz. father, mother, son
and/or spouse, who have regular sources of income as co-applicants.
 Siblings, i.e. brother-sister, brother- brother, sister-sister can be permitted as a
applicants/co-applicants subject to the property must be in the joint names of the
siblings.
 NRIs are also eligible for the home loan. Contact our nearest branch for further
details.

Purpose
 Purchase/ construction of house/ flat
 Purchase of plot and construction of house thereon.
 Repairs/ improvements/ extension of the existing residential property.
 Take-over of housing loan availed from another bank / FI.

Quantum of Loan

 Depending on repayment capacity of the borrower and value of property

 Maximum Rs. 30 Lakhs for Repairs.

~ 25 ~
2.UNION MILES (Vehicle Loan)
Eligibility
A person has to meet the following criteria to avail the loan:
 Resident Indian citizen and Non-Resident Indians (NRIs) holding valid license.
 Minimum age - 18 years and maximum age - 70 years.
 Individual, either singly or jointly with other family members viz. father, mother, son,
spouse or daughter as co-applicants.
 Companies / Firms for purchase of vehicle for usage by their Directors / employees

Purpose
Now you can fulfil your dreams of owing a vehicle by availing Union Miles. You can avail
this special scheme to purchase of new or old (up to 3 years) four-wheeler, and you can also
avail this loan to purchase a new two-wheeler.
Quantum of Loan
Maximum Quantum of Loan
New 4-wheeler Rs.125 lakhs
Old 4-wheeler (Not older than 3 years) Rs.20 lakhs
New 2-wheeler Rs.10 lakhs

3. EDUCATION LOANS
Eligibility

 Should be an Indian national

 Secured admission to the concerned institute in India or abroad through appropriate
selection process and cleared the qualifying examination, if any
Course covered in India
 Graduation / post-graduation / diploma courses from recognized universities
 Technical / professional / management courses
 PhD courses
Courses covered outside India
 Graduation / post-graduation degrees offered by recognized universities
 Certified degree courses conducted by CIMA, London, CPA, USA and other such
institutes
 PhD courses
 Diploma courses abroad are not covered.

Purpose
To help poor and needy to undertake basic education.
 To help the meritorious students to pursue higher /professional/technical education,
after passing 10+2 or equivalent.

~ 26 ~
 Loan in subsequent years of course
 Educational loans can also be considered for eligible students in case they approach
the bank in the subsequent years of the course.
 The loan can be granted provided the student has not availed loan from initial years
from any other bank/FI.

Quantum of Loan

Type of Studies Maximum Quantum

For Inland studies Rs.20 lakhs

For studies abroad Rs.30 lakhs

4. UNION MORTGAGE (Mortgage Loan)

Eligibility
To avail "Union Mortgage" you need to meet the following criteria:
 Indian national owning non-agricultural (residential / commercial/industrial) property.
 Minimum age - 18 years and maximum age - 70 years.
 Applicant and co-applicants should be filing Income Tax return.
 Individual, either singly or jointly with other family members viz. father, mother, son,
unmarried
 daughter and/or spouse, who have regular sources of income as co-applicants.
 All the owner(s) of the property have to join in as co-applicant(s).
 Siblings, i.e. brother-sister, brother- brother, sister-sister can be permitted as a
applicants/co-applicants subject to the property must be in the joint names of the
siblings.
 NRIs are also eligible for mortgage loan.

Purpose
In life we face circumstances where we cannot avoid few expenses. And these include
personal expenditure of varied needs like marriage, higher education, medical emergencies,
business travel or any unforeseen expenses. Repayment of existing mortgage loan taken at
higher interest rate from another bank / FI (Take over). Union Mortgage is the solution for
such needs; you can avail Loan against property and meet such expenditure.
Quantum of loan
 Minimum of Rs.5 lakhs
 Maximum:

Indian Resident Agriculturist NRI

Rs.10 crores Rs.1 crore Rs.5 crores

~ 27 ~
5. PERSONAL LOAN
Eligibility
Tie-Up (A1) Tie-Up (A2)
 Permanent/ confirmed employees of  Permanent/ confirmed employees of
reputed private institutes/organisation reputed private
in India. institutes/organisation in India.
 These organizations/institutes should  The applicant should be customer of
be operating within the jurisdiction of the bank for at least 6 months prior
respective ZLCC. to considering the loan proposal.
 Applicant may or may not maintain  Applicant should necessarily
salary account with us. maintain salary account with us.

Note:
 Minimum age of the applicant should be 18 years.
 The applicant has reasonable residual service to ensure that the entire loan is repaid
one year prior to retirement.
 Government employee and Staff members of our bank are not eligible under the
schemes.

Purpose
There are many among us who might be facing difficulty in purchasing goods by paying a
lump sum amount. But we would be comfortable paying small instalments on a monthly
basis. The Union Personal loan plays an important role here. It helps you to avail loan to meet
personal expenses such as purchase of consumer durable, etc.
Quantum of Loan
Tie-Up (A1) Tie-Up (A2)
 Maximum of Rs. 10 lakhs.  Maximum of Rs. 5 Lakh (New/First time
borrowers)

 Maximum Rs. 10 Lakh (Existing borrowers

with a satisfactory repayment record of 2
years).

~ 28 ~
 6. UNION HEALTH (Special Loans for Doctors)
Eligibility
Any qualified registered medical practitioner with minimum 3 years of experience and in the
age group of 25 to 65 in any branch of medical science, with minimum qualification of:
 MBBS
 BAMS (Bachelor of Ayurvedic Medicine & Surgery)
 B.H.M.S. (Bachelor of Homoeopathic Medicine & Surgery)
 BDS (Dentist)

Quantum of Loan
75% cost of equipment subject to:
Minimum Maximum
2 lakhs 800 lakhs

7. UNION CASH (Loan for Pensioners)

Eligibility
To avail the loan the person has to be a retired employee who draws pension through our
bank or Family pensioner who draws family pension through our bank.
Purpose
Union Cash is one of the special schemes designed for our customers. We can avail this loan
to meet our medium-term financial requirements.
Quantum of Loan
Pensioner’s age up to 70 years Pensioner’s age above 70 Family pension
years
Rs.3 lakhs Rs.2 lakhs Rs. 1 lakh

~ 29 ~
 CHAPTER III:
RESEARCH METHODOLOGY

~ 30 ~
Meaning of Research:
Research is careful and organized study or gathering of information about a specific topic.
An example of research is a project where scientists try to find a cure for AIDS.
Definition of Methodology:
Methodology is a system of methods used in a particular area of study or activity. It  is the
systematic, theoretical analysis of the methods applied to a field of study.
Research Methodology:
A research methodology involves specific techniques that are adopted in research process to
collect, assemble and evaluate data. It defines those tools that are used to gather relevant
information in a specific research study. Surveys, questionnaires and interviews are the
common tools of research.
The methodology used in this study uses the survey method to analyse the performance of
Union Bank of India and to gather information related to customer’s preferences and choices.
The methodology used in this study consists of both primary and secondary data. The
primary data was collected through Questionnaire and personal observation. For the
comparison of the company with other competitors, various magazines, journals and websites
were used. The questionnaire has been drafted and presented by the researcher herself.
Objectives of Study:
i. To study the perception, preferences and expectations of customers and compare the
services provided by various banks to Union Bank of India.
ii. To make a comparative study of retail loans with respect to other nationalized banks.
iii. To analyse the year to year performance of retail banking sector of Union Bank of
India using financial ratios.
Data Collection:
There are basically two methods to collect data viz. Primary and Secondary.
In this study, both methods have been used to collect data. Questionnaire and personal
observation and websites, online journals, etc.

Sample Size:

Data of 150 people in total was collected.

Sampling Technique:

For this study, a Simple random sampling technique was used.

~ 31 ~
A survey on Union Bank of India to analyse the perception of customers about the retail
loan schemes offered.

I. On which bank are you dependent for regular transactions?

BANK NAME RESPONSE RECORDED

State Bank of India 21.4%
HDFC Bank 17.3%
Union Bank of India 16%
Axis Bank 18.7%
ICICI Bank 18.7%
Others 7.9%

Bank

16%
21%

8% 19%

17%
19%

Union Bank of India Axis Bank

ICICI Bank HDFC Bank
Other(PNB, Dena Bank, Bank of Baroda) State Bank of India

Data Interpretation:
It can be observed that approximately 21% correspondents are using services provided by
State Bank of India and 19% of people are using Axis Bank, 19% are using ICICI bank
services and 17% of people are using products of HDFC bank. 16% of the sample are using
services provided by Union Bank of India and the remaining 8% people use services of other
banks like Punjab National Bank, Dena Bank and Bank of Baroda.

~ 32 ~
 II. Which bank according to you is faster and more efficient in comparison to others?

BANK
Other(PNB,
Dena Bank)
11% SBI
20%

Axis Bank
19%

HDFC
Bank
18%

ICICI Bank
17%
Union Bank
of India
16%

Data Interpretation:
From the above data it is clear that 20% of the total sample size consider State Bank of India
to be the most efficient bank, approximately 19% consider Axis bank to be the most efficient
bank, 18% consider HDFC bank as the fastest bank, its ICICI bank for 17% and 16%
consider Union Bank of India as the most efficient bank, 10% consider other banks like PNB
and Dena bank to perform the most efficiently.

III. Have you ever taken a loan from Union bank of India?

% of people who have taken a loan from UBI

NO 66.70%

YES 33.30%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%

Data Interpretation:

~ 33 ~
Only 33% of people have used any loan product of Union Bank of India and 67% of people
have never used any loan product offered by Union Bank of India.

IV. Are you aware of the products and services provided by Union Bank of India?

% of people who are aware of the products offered by UBI

NO 62%

YES 38%

0% 10% 20% 30% 40% 50% 60% 70%

Data Interpretation:
62% of the total sample size are unaware of the products and services provided by Union
bank of India. 38% are aware and have used the products and services of Union bank of
India.

V. If yes, are you aware of the retail loan schemes offered by Union Bank of India?

% of people who are aware of the retail loan schemes of UBI

NO 31.70%

YES 68.30%

0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00%

Data Interpretation:

~ 34 ~
It is clear that most of the people are aware about the various retail loan schemes offered by
UBI, 68% of people are aware about the retail loan schemes offered by Union Bank of India
but 32% still remain unaware.

VI. Which feature influences you to take a loan from Union Bank of India?

Long
Factors influencing people to avail loan financial services from UBI
er
repa
yme Tran
nt spar
peri ency
od; and
28% shor
t
proc
essi
ng
time
Easi ;
er 38%
and
fast
er
proc
ess;
34%

Data Interpretation:
For most of the customers who choose Union Bank of India, the transparency and short
processing time influences them the most to take a loan from UBI. 38% of people chose
Transparency and short processing time, 34% people chose Easier and Faster process and the
remaining 28% chose Longer repayment period as their choice.

VII. Which loan products of Union Bank of India have you used?

% of people who have availed loan products of UBI

40.00% 36.40%
35.00%
30.30%
30.00%
25.00%
21.20%
20.00%
15.00% 12.10%
10.00%
5.00%
0.00%
Personal Loan Auto Loan Home Loan Education Loan

~ 35 ~
 Data Interpretation:
Most of the customers have used Personal Loan product of UBI, 36% people have taken a
personal loan, 30% of the people have used the Auto loan product and 21% have taken the
Home loan and 12% have taken an Education loan from UBI. Some of the customers have
acquired multiple loans like auto and home loan.

VIII. How satisfied are you with the services provided by Union Bank of India?

Satisfication level of customers

13% 27%

23%

37%

Very Satisfied Satisfactory Average Unsatisfactory

Data Interpretation:
This proves that most of the people are satisfied with the services provided by Union Bank of
India. Approximately 38% of the customers have voted for ‘Satisfactory’, 28% of the
customers have chosen the ‘Very satisfied’ option. 23% chose the ‘Average’ option and 13%
of the people are not satisfied with the services rendered by UBI.

IX. What features should change to improve the services provided by Union Bank of
India?

~ 36 ~
 Features to be changed, according to customers
35.00%
31%
30.00%

25.00% 24%

20.00% 17% 17%

15.00%
10%
10.00%

5.00%

0.00%
Paper Work Interest Rates Processing time Repayment Period Margin

Data Interpretation:
31% of the people think that reducing the interest rates will attract more customers. 24%
people believe that the margin should change. 17% people think that the processing time
should be reduced, 17% of the customers believe that the repayment period is too short and
10% people think that the Paper work should be reduced.

% of people who prefer other banks

NO 52.00%

YES 58.00%

49.00% 50.00% 51.00% 52.00% 53.00% 54.00% 55.00% 56.00% 57.00% 58.00% 59.00%

X. Would you prefer any other bank over Union Bank of India to avail financial
services?

Data Interpretation:

~ 37 ~
58% of the people prefer other banks over UBI. 52% of the people prefer UBI over other
banks.

XI. If yes, which bank would you prefer over Union Bank of India?

NAME RESPONSE
State Bank of India 24%
ICICI Bank 20%
Axis Bank 19%
Bank of India 19%
Punjab National Bank 11%
Other (HDFC Bank, Bank of Baroda) 7%

Bank
11%
24%

19%

7%

State Bank of India Bank of India ICICI Bank

19%Bank
Punjab National Axis Bank Other(HDFC Bank, Bank of Baroda)
20%

Data Interpretation:
Out of all the customers who prefer other banks, approximately 24% of them prefer State
Bank of India, 20% of the people would prefer ICICI Bank, 19% of the people prefer Axis
Bank, 18% of the people prefer Punjab National Bank, 7% of the people prefer Bank of India
over UBI and remaining 11% of the customers prefer other banks like HDFC Bank and Bank
of Baroda.

~ 38 ~
 CHAPTER: IV
DATA ANALYSIS
&
INTERPRETATION

~ 39 ~
Meaning of Data:
You can refer to information as data, especially when it is in the form of facts or statistics that
you can analyse. Information in raw or unorganized form (such as alphabets, numbers, or
symbols) that refer to, or represent, conditions, ideas, or objects. Data is limitless and present
everywhere in the universe.
Meaning of Analysis:
Data analysis involves the study of relationship and/or degree of association among several
variables. Analysis is nothing but ordering of data for obtaining answers to research
questions. It is the breaking down of data and ordering them in such a way so as to obtain a
meaningful answer.
Analysis is the process of breaking a complex topic or substance into smaller parts in order to
gain a better understanding of it.
Data Interpretation:
Data Interpretation refers to the implementation of procedures through which data is
reviewed for the purpose of arriving at an inference.
Data interpretation can be defined as applying statistical procedures to analyse specific facts
from a study or body of research. It refers to the techniques of drawing inferences from an
analytical study of collected data. Interpretation is the process of making sense of numerical
data that has been collected, analysed, and presented. People interpret data when they turn on
the television and hear the news anchor reporting on a poll, when they read advertisements
claiming that one product is better than another etc.
Comparison of Union Bank of India’s Retail Loan schemes
with other nationalized banks
Following is the comparison between different retail loans provided by Union Bank of India
(UBI) with various retail loans schemes of UBI’s main competitors. Punjab National Bank
(PNB), Bank of India (BOI) and Bank of Baroda.
These nationalized banks are said to be UBI’s main competitors in Retail Banking sector.
Major Retail loan schemes of Union Bank of India has been compared with the similar loan
schemes provided by other banks. For eg. Housing loan of Union Bank of India is compared
with Housing loans provided by Punjab National Bank, Bank of India and Bank of Baroda.
The various parameters like interest rates, margin, quantum of loan, etc. of a retail loan
scheme of these banks are compared and analysed to obtain the desired information to
complete this study.

~ 40 ~
 HOME LOAN COMPARISON

UNION BANK PUNJAB BANK OF BANK OF

OF INDIA NATIONAL INDIA BARODA
BANK
Eligibility 21 years and 18 years and 18 years and 21 years and
Criteria above above above (Salaried above
employees,
professionals,
self-employed
persons, etc.)

QUANTUM OF 200 lacs Maximum Rs.100 Rs.500 lacs Rs.5 crores to

LOAN maximum and 20 lacs for purchase maximum in Rs.10 crores in
lacs maximum of land/ plot and metros and metros and Rs.1
for repairs. Rs.25 lacs Rs.300 lacs in crore maximum
maximum for other cities and in in other cities.
repairs. Rs.50 lacs
maximum for
repairs and
renovations.

Rate of Interest Up to Rs.75 Up to Rs.75 Floating Fixed rate up to

lakhs lakhs Category up to 30 years
1Y-MCLR Floating Women 30 years
+0.10% = 8.70% MCLR+0.20% 8.70% onwards
(CIBIL score 700 Floating Others For Women: 1
and above) MCLR+0.25% Year MCLR + Floating rates
1Y-MCLR + 0.15 1 Year MCLR to
0.20% = 8.80% % 1-year
CIBIL score Above Rs.75 For Others: 1 MCLR+1.00%
Below 700) lakhs Year MCLR + (As per risk rating
Floating Women 0.20 % of the applicants).
Above Rs.75 MCLR+0.25%
lakhs Floating Others Fixed rate up to
1Y-MCLR MCLR+0.30% 25 years
+0.15% = 8.75% 8.70% onwards
(CIBIL score 700 Fixed General
and above) FLOATING
1Y-MCLR +0.50%
+0.25% = 8.85%
(CIBIL score
Below 700)

~ 41 ~
 FIXED RATES
(for maximum 5
years)

Up to ₹ 30 lakhs
11.40%
>₹ 30 lakhs to
₹50 lakhs
12.40%
>₹ 50 lakhs to
₹200 lakhs
12.65%

MARGIN Up to Rs.75 Up to Rs.75 For Loan up to Loans up to

lakhs lakhs Rs.20 Lacs Rs.30/- Lacs
20% of the 25% of the total 10% of the total
total cost of cost. 15% (For 1st cost
the purchase/ house)
Above Rs.75 Loans above 30
construction
lakhs lacs and up to
of house/ flat. 20% (For 2nd or
25% of the total Rs.75 Lacs
subsequent
cost. 20% of the total
Above Rs.75 house or flat). cost.
lakhs to Rs.2 Purchase of
crores land/plot for For Loan up to Loans above 75
25% of the housing building Rs.75 Lacs lacs
total cost of 25% of the total 25% of the total
the purchase/ cost. 20% (For 1st cost.
construction house).
of house/ flat.
20% (For 2nd or
Above Rs.2 subsequent
crores house or flat).
35% of the
For Loan above
total cost of
Rs.75 Lacs
the
purchase/of
25% (For 1st
house/ flat.
house).
20% of total
25% (For 2nd or
cost of the
subsequent
repairs.
house or flat).

Repayment Repayment Maximum 30 Highly flexible - Maximum period

~ 42 ~
Period period of up years inclusive of maximum 30 of 30 years
to 30 years. moratorium yrs. including initially,
10 years in period, if any. moratorium including the
case of period up to 36 maximum
Maximum15 months (max.) moratorium
repairs.
years inclusive of period of 36
moratorium months.
period, if any in
case of repairs/
renovation /
alterations to the
house/flat.

AUTO LOAN COMPARISON

UNION PUNJAB BANK OF BANK OF

BANK OF NATIONAL INDIA BARODA
INDIA BANK
QUANTUM New 4- For 4-wheeler: For Individuals: For 4-
OF LOAN wheeler: Rs. 100 lac or 25 For Indian make wheeler:
Rs.125 lakh times of Net vehicles - Rs.50 Rs.100 Lacs
maximum Monthly Salary/ lacs max. (For all
Income, For Companies categories)
Old 4- whichever is and corporate
wheeler (not lower (For entities - Rs.100 For 2-
older than 3 individuals or lacs maximum. wheeler:
years): proprietors) Rs.10.00 Lacs
Rs.20 lakh For Companies (For all
maximum No ceiling of and corporate categories)
loan amount (for entities - Rs.200
New 2- one or more lacs max (Can be a
wheeler: vehicles, for fleet of vehicles)
Rs.10 lakh business
maximum concerns) Non-resident
Indians - Rs.50
For 2-wheeler: lacs maximum.
Maximum Rs.
3.00 lac (For
super or hybrid
bikes)
Maximum Rs.
1.50 lac (For
other 2-
wheelers)

~ 43 ~
Rate of New 4- 4-Wheeler: For 4 wheelers/ 2 For 4-
Interest Wheeler: CIC Score 750 wheelers wheeler:
1Y-MCLR & above including super From 1-year
+0.50% = MCLR + 0.60% bikes (New and MCLR +
CIC Score 700 second hand Strategic
9.10%
and up to 749 vehicles): Premium +
(floating)
MCLR + 0.80% 0.25% To 1-
Old 4- CIC Score less 1 Year MCLR + year MCLR +
Wheeler (Not than 700 0.85 % Strategic
older than 3 MCLR + 1.05% Premium
years) Fixed rate: +2.00% (As
1Y-MCLR + MCLR+0.95% per Risk
3.50% = Rating of the
12.10% 2-Wheeler: applicant/s.)
(floating) If repayment
New 2- period: Loan to
Wheeler: < 3 years= corporate:
MCLR+3.25% 1-year MCLR
1Y-MCLR
>= 3 years= + Strategic
+3.00% = MCLR+3.75% Premium +
11.60% (Salary being 0.25%
(floating) disbursed
through PNB) Two-wheeler
< 3years= loan:
MCLR+4.25% 1-year MCLR
>= 3 years= + Strategic
MCLR+4.75% Premium +
Others including 4.00%
business
concern)

MCLR+1.75%
(Power ride for
Women only).

MARGIN 15 % of on- 15% of on-road Up to Rs.10 lacs For 4-

road price price inclusive NIL Margin wheeler:
(Vehicle Cost of onetime road 10% Margin
+ Registration tax & insurance. Above Rs.10 Lacs on ‘On road
to Rs.25 Lacs price’ of the
Charges +
30% of the value 15% vehicle
Insurance +
of the vehicle On Road Price
Road Tax) (For old vehicle) (including For 2-
40 % of old comprehensive wheeler:
vehicle's Insurance Taxes Loan up to Rs.
valuation cost and Registration 3.00Lakhs:
charges) 10%

Above Rs.10 Lacs Loan above

~ 44 ~
 to Rs.25 Lacs Rs. 3.00Lakhs:
25%  15%
On Road Price
(including
comprehensive
Insurance Taxes
and Registration
charges)

For second hand

vehicles:
Minimum 30%

For
corporates/firms:
Minimum 25%

Repayment New 4- New 4-wheeler: New 4-wheeler: 7 For 4-

Period wheeler: 7 84 EMIs years maximum wheeler:
years For 2-wheeler: Maximum 84
maximum For Scooter and For second hand months
vehicles:
Motorcycle – 60
Old 4- 3 years maximum For 2-
EMIs
wheeler (not wheeler:
older than 3 For Scooter rete New 2-wheeler: Maximum 60
years): – 30 EMIs 5 years maximum months
5 years For Mopeds – 24
maximum EMIs For
(Maximum corporates/firms:
New 2- Permissible 5 year maximum
wheeler: deductions –
3 years 40% to 60% of
maximum Net monthly
salary/ income)
Old 4-wheeler:
60 EMIs

~ 45 ~
 EDUCATION LOAN COMPARISON

UNION BANK PUNJAB BANK OF BANK OF

OF INDIA NATIONAL INDIA BARODA
BANK
Quantum of For Inland Studies in India - Studies in India For Inland
Loan studies: Max. Rs.10 lac - Maximum studies:
Rs.20 lakhs Rs.10.00 lakh Maximum
maximum Studies abroad - RS.80.00 Lakh
Studies abroad - for Medical &
Max. Rs.20 lac
For studies Maximum Aviation
abroad: Rs.20.00 lakh Education.
Rs.30 lakhs Maximum
maximum Studies in RS.10.00 Lakh
premier for others.
institutes-
For abroad
Maximum
studies:
Rs.10.00 lakhs
Rs. 80.00 lakh for
Institutions
specified in List
of Premier
Institutions
Rs. 60.00 lakh for
Institutions not
specified in List
of Premier
Institutions.
For Premier
Institutes:
Institutions under
List AA
Rs.40 lakhs
(without security)
Rs.80 lakhs (with
100% tangible
collateral
security)
Institutions under
List – A
RS. 20.00 Lakh
(without security)
RS. 80.00 Lakh
(with 100%

~ 46 ~
 tangible collateral
security)
Institutions under
list B:
Rs.7,50 lakh
(without security)
Rs.80.00 lakh
(with 100%
tangible collateral
security)
Institutions under
List-C
RS. 7.50 Lakh
(without security)
Rs.80.00 lakh
(with 100%
tangible collateral
security).

Rate of Interest Up to ₹ 7.50 For Inland Loans up to Rs. For Inland

lakh studies 4 lakhs studies:
(If covered under For admissions in For Inland 1-year
CGFSEL) other than studies: MCLR+2.00%
premier institutes 10.35 %, for p.a. (Including
1Y-MCLR (PNB Saraswati) Girls - 9.80% SP) - Irrespective
+2.00% = Loan up to Rs. For studies of Loan Amount,
10.60% (Floating 7.50 abroad: 0.5% Concession
rate of interest for lac=MCLR+0.60% 10.35 %, for for girl students.
male students) Girls - 9.85%
1Y-MCLR Loan above Rs. For studies in For abroad
+2.00% = 7.50 premier institutes studies:
10.60% (Floating lac=MCLR+0.10 (IIMs, ISB, IITs) 1-year MCLR + 2
rate for female 10.35 %, for % Spread
students) PNB Pratibha- Girls - 9.85% (Including SP –
For admissions in Irrespective of
(If not covered premier institutes Loans Rs. 4.0 - loan amount).
under CGFSEL) (IIMs, IITs, 7.5 lakh 0.50 %
Up to ₹ 4.00 XLRI, etc.) For Inland Concession for
lakh Loan up to Rs. studies: girl students.
1Y-MCLR 7.50 10.35 %, for For Institutions
+3.15% = lac=MCLR+0.50% Girls - 9.85% specified in List
11.75% (Floating For studies of Premier
rate for male Loan above Rs. abroad: Institutions: 
students) 7.50 lac=MCLR 10.35 %, for
1Y-MCLR Girls - 9.80% 1-year MCLR +
+2.65% = PNB Honhaar For studies in 1.25% Spread

~ 47 ~
11.25% (Floating Loan up to Rs. premier (Including SP)–
rate for female 10.00 lac= institutes: (Irrespective of
students) MCLR+2.00% 10.25 %, for loan amount).
Girls - 9.85%
>₹4.00 lakh For studies in
<₹7.50 lakh Loans > Rs. 7.5 premier
1Y-MCLR lakh institutes:
+2.90% = For Inland For List-AA
11.50%(Floating studies: Institutions: 1year
rate for male 11.15 %, for MCLR 
students) Girls - 10.65% No special
1Y-MCLR For studies concession for
+2.40% = abroad: girl students
11.00% (Floating 11.15 %, for under this
rate for female Girls - 10.65% scheme.
students) For studies in For List-A
premier Institutions: 1year
Above ₹ 7.50 institutes: MCLR 
lakh 11.15 %, for No special
1Y-MCLR Girls - 10.65% concession for
+2.00% = girl students
10.60% (Floating under this
rate for male scheme.
students) For List B
1Y-MCLR Institutions:
+1.50% = Up to Rs.7.50
10.10% (Floating Lacs: 1year
rate for female MCLR + 0.75%
students) Spread (Including
SP) 
Above Rs.7.50
Lacs: 1year
MCLR +0.50%
Spread (Including
SP) 
No special
concession for
girl students
under this
scheme.
For List-C
Institutions:
Up to Rs.7.50
Lacs: 1year
MCLR + 1.50%
Spread (Including
SP) 
Above Rs.7.50
Lacs: 1year

~ 48 ~
 MCLR +1.25%
Spread (Including
SP) 
No special
concession for
girl students
under this
scheme.
MARGIN Up to 4 lakhs For Inland Up to Rs.4 lakh Up to Rs.4.00
Nil studies Nil Lakh: Nil
Up to Rs. 4 lac -
Above
Above 4 lakhs NIL Above Rs.4 lakh
RS.4.00 lakh:
5% for Studies in Above Rs. 4 lac - - Studies in
India 5% India= 5% 5% for studies
15% for Studies in India
abroad Studies Abroad=
For studies 10% for
15%·
abroad studies abroad
Up to Rs. 4
Nil for premier
lacs=NIL institutions
Above Rs. 4
lacs=15%

Repayment Course period + 1 Course period + 1 Maximum The loan is

Period year year repayment tenure repayable in
is 15 years maximum 10 –
Maximum Maximum up to 15 15 years after the
repayment tenure years completion of
is 15 years moratorium
irrespective of the period.
quantum of loan
For loans up to
Rs.7.50 Lakhs:
Moratorium
Period
+Maximum
-120installments.

 For Loans
above RS. 7.50
Lakhs:
Moratorium
Period
+Maximum
-180installments.

~ 49 ~
KEY FINANCIAL RATIOS TO ANALYSE RETAIL BANKS
Analysis of retail banking using ratios with specific reference to Union Bank of India
The analysis of banks and banking stocks has always been particularly challenging because
of the fact banks operate and generate profit in such a fundamentally different way than most
other businesses. While other industries create or manufacture products for sale, the primary
product a bank sells money.
The financial statements of banks are typically much more complicated than those of
companies engaged in virtually any other type of business. While investors considering bank
stocks look at such traditional equity evaluation measures as price-to-book (P/B) ratio or
price-to-earnings (P/E) ratio, they also examine industry-specific metrics to more accurately
evaluate the investment potential of individual banks.
Investors and market analysts specifically use financial ratios evaluate companies in the retail
banking industry. Among the key financial ratios, they specifically use:
 Loan to Deposits ratio
 Return on Assets ratio
 Return on Equity ratio

Loan to Deposits Ratio

Loan to deposits ratio (LDR) is used to assess a bank's liquidity by comparing a bank's total
loans to its total deposits for the same period. The LDR is expressed as a percentage. A loan-
to-deposit ratio shows a bank's ability to cover loan losses and withdrawals by its customers.
Investors monitor the LDR of banks to make sure there's adequate liquidity to cover loans in
the event of an economic downturn resulting in loan defaults.
Also, the LDR helps to show how well a bank is attracting and retaining customers. If a
bank's deposits are increasing, new money and new clients are being on-boarded. As a result,
the bank will likely have more money to lend, which should increase earnings. Typically, the
ideal loan-to-deposit ratio is 80% to 90%. A loan-to-deposit ratio of 100% means a bank
loaned one dollar to customers for every dollar received in deposits it received. It also means
a bank will not have significant reserves available for expected or unexpected contingencies.
To calculate the loan-to-deposit ratio, we divide a bank's total amount of loans by the total
amount of deposits for the same period. The figures can be found on a bank's balance sheet.
Loans are listed as assets while deposits are listed as liabilities.

Total Loans
Loans ¿ Deposits Ratio= ×100
Total Deposits

~ 50 ~
 Rs (in Crores)
Particulars For the year ended For the year ended For the year ended
2018-19 2017-18 2016-17
Total Advances 298,780.10 290,571.51 287,949.83

Total Deposits 417,504.81 410,288.43 379,687.26

Loans to Deposts 71.56% 70.82% 75.83%

ratio

Comment:
In the FY 2017 the LDR was 75.83% which decreased in the following year by 5% to
70.82% but in the FY 2019 it increased by 1% to 71.56%. 80% to 90% is said to be the ideal
LDR ratio for any bank. The bank should stay motivated and find out ways to improve the
ratio.
Return on Assets ratio

Return on assets (ROA) is an indicator of how profitable a company is relative to its total
assets. ROA gives a manager, investor, or analyst an idea as to how efficient a company's
management is at using its assets to generate earnings. Return on assets is displayed as a
percentage. The ROA figure gives investors an idea of how effective the company is in
converting the money it invests into net income. The higher the ROA number, the better,
because the company is earning more money on less investment.
ROA is calculated by dividing a company’s net income by total assets. As a formula, it would
be expressed as:
Net Income
Return on Assets Ratio= ×100
Total Assets

Rs (in Crores)
For the year ended For the year ended For the year ended
Particulars 2018-19 2017-18 2016-17

Total assets 496,345.73 488,804.53 453,211.92

Net Income (2922.35) (5,212.47) 572.64

Return on Assets ratio (0.58) % (1.06) % 0.12%

~ 51 ~
 Comment:
In the FY 2017, the bank’s ROA was 0.12%, it further decreased to -1.07% in the FY 2018.
In the FY 2019, the company’s ROA was -0.58% which is slightly better than last year’s
ROA but is still very less. The bank should improve its performance to raise profits. ROA
above 5% is considered to be favourable in banks. The bank should increase its customer
base to improve its ROA and raise profits.
Return on Equity ratio
Return on equity (ROE) is a measure of financial performance calculated by dividing net
income by shareholders' equity. Because shareholders' equity is equal to a company’s assets
minus its debt, ROE could be thought of as the return on net assets. ROE is considered a
measure of how effectively management is using a company’s assets to create profits.
Net Income
Return on Equity Ratio= ×100
Shareholde r ' s equity

Rs (in Crores)
Particulars For the year ended For the year ended For the year ended
2018-19 2017-18 2016-17

Net Income (2922.35) (5,212.47) 572.64

Shareholder’s equity 26835.65 25251.81 2274775.59

Return on Equity ratio (10.88) % (20.64) % 0.02%

Comment:
It is said that the higher the ROE, the more profitable the company. Return on equity
measures how effectively management is using a company’s assets to create profits. ROE less
than 10% is consider to be poor.
UBI’s ROE is negative, it has deteriorated from FY 2017. In FY 2017, the ROE was already
poor but it further decreased. The bank needs to work hard and increase its net income. ROE
of FY 2019 is (10.88)% which increased from FY 2018’s (20.64)%.

~ 52 ~
CHAPTER V:
FINDINGS
&
SUGGESTIONS

~ 53 ~
 FINDINGS OF HOME LOAN COMPARISON

 Eligibility age for UBI’s home loan is 21 years which is more than most of the other
selected banks. It should be reduced to 18 yrs.
 UBI’s quantum of loan is up to 200 lacs maximum which is better than most of the
banks but it should try to increase the limit in comparison to its competitors. In case
of repairs UBI offers 25 lacs maximum which can be increased too.
 UBI has a high interest rate in comparison to other banks. The fixed interest rate of
UBI is specifically very high.
 Up to Rs.75 lakhs UBI has a margin of 20% which fine but can be reduced. UBI’s
margin for loans above 75lakhs is fair.
 The repayment period of all the banks under consideration is almost the same which is
up to 30 years maximum.

FINDINGS OF AUTO LOAN COMPARISON

 Union Bank of India offers Rs.125 lakhs maximum for new 4-wheeler, which is more
than the amount offered by other banks which are compared.
 But, UBI only offers Rs.20 lakhs for old 4-wheeler which can be increased.
 UBI offers Rs.10 lakhs for 2-wheeler which is more than Punjab National bank and
same as Bank of Baroda.
 The interest rate of UBI is rather fair in comparison to others.
 The margin of UBI is similar to other banks but the margin for loans for old vehicles
can be reduced.
 The repayment period of all the banks which are taken into consideration are rather
similar. UBI’s repayment period of a new 4-wheeler is 7years maximum, 5 years
maximum for a second hand 4-wheeler and 3 years maximum for a 2-wheeler.
 The banks’ rates and margins are set after considering the amount of loan demanded
by the party.

~ 54 ~
 FINDINGS OF THE EDUCATION LOAN COMPARISON

 UBI offers Rs.20 lakhs maximum for inland studies which is double than what Punjab
National Bank and Bank of India offer. Bank of Baroda has custom plans for
education loans based on the college the applicant gets into.
 UBI offers Rs.30 lakhs maximum for studies abroad which is again more than what
Punjab National Bank and Bank of India offer, Bank of Baroda offers Rs.50 lakhs
maximum for premier institutes abroad and Rs.60 lakhs maximum for other institutes
abroad.
 For loans up to Rs.4 lakhs UBI has the highest interest rate. For loans above Rs.7.5
lakhs UBI has the least interest rate.
 PNB and Bank of Baroda have custom plans and charge interests accordingly based
on the institutes the applicant gets admitted into.
 The banks offer concession for female students.
 There is no margin for any bank which are taken into consideration for loans up to
Rs.4 lakhs,
 The margin for inland studies is same for all the banks. Bur Bank of Baroda has Nil
margin for applicants admitted into premier institutes.
 The margin for studies abroad is same for all the banks which is 15% except for Bank
of Baroda which is 10% only.
 The repayment period for all the banks is almost the same which is 15 years
maximum.

~ 55 ~
 SUGGESTIONS

 Customers must be made aware of the loan products and services offered by UBI so
that more people are attracted to choose UBI as their bank
 Interest rate is the major influencing factor for making purchase decision for any kind
of loan product, UBI should consider reducing the interest rate to grow in the highly
competitive environment and more so in retail lending.
 The bank should increase the period for repayment of loan.
 UBI should more focus on retaining existing customers.
 UBI must take feedbacks of customers regarding features & services and try to make
changes upon customers’ requests.
 Interest rates and margin should be reduced so that more and more people can avail
lending services of bank.
 UBI should take steps to solve customer problems immediately.
 Bank Personnel’s should be trained, well educated & proper trained to convince the
people to try new and different products.
 The products and services offered by the Bank must be advertised properly and
should reach a large audience.
 The bank should make attempts to increase its revenues and raise profits.
 Customer awareness programs must be conducted in rural areas to spread awareness
about the loan products and services.

~ 56 ~
 CHAPTER VI:
LIMITATIONS OF THE STUDY
&
CONCLUSION

~ 57 ~
 LIMITATIONS OF THE STUDY

Every study or research is conducted under some limits and there are some restrictions which
have some impact on the project.
Some Limitations of this study are:

 The research was based on information from websites and financial statements and
did not take much qualitative information into consideration.

 The study aims at covering the retail banking of Union bank of India only. Hence, the
coverage area is narrow.

 The sample size taken for the survey is very small and may not be sufficient to predict
the results with 100% accuracy.

 Analysis has been conducted as per the knowledge and understanding of the
researcher.

 The study aims at gaining the practical knowledge by taking help of bank personals.
So there might have been tendencies among the personals to amplify or filter their
responses due to time limitation.

 The data of banks are highly confidential for the outside people therefore, the
researcher had limited authority.

 As the information provided is mostly quantitative in nature the research is useful for
current time only because data may change in the future subject to the interest rates,
profit, income, etc.

 Experience: Researcher has very less experience in the research field.

~ 58 ~
 CONCLUSION

After analysing the performance of Union Bank of India, it can be concluded that the bank’s
performance is average and must improve. The bank has a wide customer base and many
people favour Union Bank of India but it still lags behind in comparison to other nationalised
and private banks. The bank should work hard to attract new customers and retain the
existing ones.
UBI has an excellent technological platform with 100% core banking solution rollout and
increased use of electronic mode in transactions. This helps the bank reduce risk, improve
efficiency and reduce costs significantly. From the survey conducted, it can be concluded that
most of the people prefer other banks over Union Bank of India, people are not aware of the
products and services that are offered by Union Bank of India. The bank should spread
awareness and aim to reach a large number of audiences in the process, Customer awareness
programs must be conducted and heavy advertising must be used.
From the findings of the loan product comparison it can be concluded that the features of
UBI’s loan products are similar to its competitors. But the bank should introduce innovative
and customized loan products to attract new customers.
The Bank needs to work harder to increase its loans to deposits ratio and also improve its
return on assets ratio, for that the bank should work to increase its net income. The bank
should increase its efficiency and work systematically. It can be observed that the employees
are hard working and devoted towards their work. The bank always tries to perform better
than the previous year. UBI’s income has increased by 2% from the previous financial year.
To be one of the largest advance product issuer, UBI must focus on launching innovative and
customized loan products, new techniques must be developed for solving customer problems.
The bank has the potential to be one of the leading banks in today’s economy.

~ 59 ~
 BIBLIOGRAPHY

1) https://www.unionbankofindia.co.in/english/personal-loans.aspx

2) https://www.investopedia.com/

3) https://www.moneycontrol.com/

4) https://www.unionbankofindia.co.in/pdf/Union-Bank-AR-17-18.pdf

5) https://www.unionbankofindia.co.in/pdf/ROIsonRetailLoans.pdf

6) https://www.rbi.org.in/Scripts/PublicationReportDetails.aspx?UrlPage=&ID=924#CH7

7) https://economictimes.indiatimes.com/

~ 60 ~
ANNEXURE

~ 61 ~
 QUESTIONNAIRE

Q. On which are you dependent for regular transactions?

a) State Bank of India
b) HDFC Bank
c) Union Bank of India
d) Axis Bank
e) ICICI Bank
f) Other, please specify (                              )

Q. Which bank is faster and more efficient in comparison to others, according to you?
a) State Bank of India
b) HDFC Bank
c) Union Bank of India
d) Axis Bank
e) ICICI Bank
f) Other, please specify (                              )

Q. Have you ever taken a loan from Union bank of India?

a) YES
b) NO

Q. Are you aware of the products and services provided by Union Bank of India?

a) YES
b) NO

Q. If yes, are you aware of the retail loan schemes offered by Union Bank of India?

a) YES
b) NO

Q. Which feature influences you to take a loan from Union Bank of India?

a) Longer repayment period

b) Transparency and short processing time
c) Easier and faster process

~ 62 ~
Q. Which loan products of Union Bank of India have you used?

a) Personal Loan
b) Auto Loan
c) Education Loan
d) Home Loan

Q. How satisfied are you with the services provided by Union Bank of India?

a) Very Satisfied
b) Satisfactory
c) Average
d) Unsatisfactory

Q. What features should change to improve the services provided by Union Bank of India?

a) Paper Work
b) Interest Rates
c) Processing time
d) Repayment Period
e) Margin

Q. Would you prefer any other bank over Union Bank of India to avail financial services?
a) YES
b) NO
Q. If yes, which bank would you prefer over Union Bank of India?
a) State Bank of India
b) Axis Bank
c) ICICI Bank
d) Bank of India
e) Punjab National Bank
f) Other, please specify (                         )

~ 63 ~