Comparative Study Of Loans & Advances Of Abhyudaya Bank with Other banks

Presented By: Suvidha Waghmare

To study the interest rates of loans & advance of Abhyudaya bank and to compare it with other bank

To study the loans and advances and the deposits being provided by Abhyudaya co operative bank with reference to Vashi branch. To know the interest rates of other banks and to compare those with our banks interest rates. To analyse the different loans provided by the bank . To study which bank gives the best loans at a reasonable interest rates.

The research is carried out with the help of primary data and secondary data. Primary data: It is collected through personal visit to the banks and also by interacting with the staff of the banks and the customers of the bank. Secondary data: It is collected through Internet, Magazines, and Newspapers etc.

Abhyudaya Co-op. Bank Ltd., one of the leading Urban Co-operative Banks in India, in its outlook and approach, has the objective of progress and prosperity of all. Beginning in January 1964 as a Co-operative Credit society with a share capital of a merely Rs.5,000/- held by 83 members. Today Abhudaya Co-op bank has become one of the large Urban Co-operative Banks with a "Scheduled Bank" status. The bank has been converted into a Multi-State Scheduled Urban Co-op. Bank w.e. f. 11th January, 2007. The area of operation which was restricted to the State of Maharashtra has now been extended to Karnataka State.

Bank has taken Corporate Agency of LIC of India & The New India Assurance Co. Ltd. and now all types of policies of LIC & general policies of New India Assurance Co. Ltd. are made available at our branches. Out of 105 branches, 22 branches are working in double shift, rendering 11 hours service to the customers.

The term "loan" refers to the amount borrowed by one person from another. The amount is in the nature of loan and refers to the sum paid to the borrower. Thus, from the view point of borrower, it is 'borrowing' and from the view point of bank it is lending. Loan may be regarded as credit granted where the money is disbursed and its recovery is made on a later date. It is a debt for the borrower. While granting loans, credit is given for a definite purpose and for a predetermined period. Interest is charged on the loan agreed rate and intervals of payment. Advance on the other hand, is a 'credit facility' granted by the bank. Banks grant advances largely for short-term purposes.

Types Of Loan : Demand Loan Term Loan

Categories of Loan: Secured Loans Unsecured Loans

Comparative Study Of Interest Rates

Parameters
Loan Products

Abhudaya Bank
Education Loan, Vehicle Loan, Personal Loan, Loan Against Gold, Housing Loan, Secured Overdraft & Loan Against NSCs/RBI Bonds/LIC/KVP.

Saraswat Bank
Vastu Siddhi Home Loan, Vehicle Loan, Doctor Delight, Saraswati Education Loan, Sammruddhi Credit Scheme, E-Stock loan, Loan Against Gold, Multipurpose Loan, Travel Loan, Advance Against RBI Bonds.

Cosmos Bank
Education Loan, Mortgage Loan, Vehicle Loan, Loan Against Gold, Home Loan, Credit Loan, Personal Loan

Interest Rates:
Personal loan Vehicle loan: Upto 3 yrs 3yrs to 5yrs 5 yrs to 7 yrs Education loan: Mortgage loan Loan Against Gold Housing loan: Upto 15 lac 15 lac to 25 lac Above 25 lac 15%-17% 12.5% 13.5% 12.5% 17% 13% 12% 14% 15% 16% 11.00% 11.50% 12.00% 14% 13.5% 13.5% 11.75% 12% 12.25% 14.50%

13.50% 14.50% 12.5% 14% 12.50% 13.50%

Processing Fees:

Personal loan
Vehicle loan E-stock loan

1.2%
1.2% -

1%
0.5% Nil

Education loan
Mortgage loan

1.2%
1.2%

0.5%
-

0.1%
-

Loan against gold

Housing loan

0.6%
0.60%

Nil
Upto 15 lac Rs2000/-

0.10%
Rs.1500

15 lac to 25 lac Rs 5000/Above 25 lac Rs10,000/-

Investment Products

Fixed deposits, Flexible deposits,

Bonds, Equity, Fixed Deposits, Flexible Deposits,

Bonds, Equity, Fixed Deposits, Flexible

Insurance

Insurance ,Mutual Funds,

Stock Investment.

Deposits, Insurance
,Mutual Funds, Stock Investment.

Parameters
Loan Products

Abhudaya Bank

State Bank of India

Bank of India

Education Loan, Vehicle Loan, Home Loan Scheme, SBI Car Star Personal Loans, Star Personal loan , loan against gold, Loan Scheme, SBI Student Loan Vehicle Loan Scheme, Star housing loan, secured overdraft Scheme, SBI CAR Loan, SBI Education loan, Star Mahila & loan against NSCs/RBI Saral Personal Loan, Xpress Gold Loan Scheme , Star Credit (Demand Loan), Loan bonds/LIC/KVP. Pensioner Loan Scheme , Star Against NSCs/KVPs/RBI Holiday Loan Scheme , Star Relief Bonds/Surrender Value Vidya Loan Scheme, Star Loan Of SBI Life/LIC etc , Loan Against Gold Ornaments. Against Property Scheme.

Interest Rates:
Personal loan Education loan: Upto 4 lac 4 lac to 7.50 lac Above 7.50 lac Vehicle Loan: New Vehicle: Second Hand Vehicle Loan Against Gold Housing loan: Upto 15 lac 15 lac to 25 lac Above 25 lac 15%-17% 11.5% (upto 20 lac) 18.5% 13.50% 13.25% 12.00% 18.25% 17.25% 14.25% Upto 30 lac 30 lac to 75 lac Above 75 lac 10.75% 11.00% 11.25% 15.5% 13.00% 12.50% 12.25% 12.75% 13.50% Upto 30 lac 30 lac to 75 lac Above 75 lac 10.50% 10.75% 11.25%

12.5%-13.5%

13% 12% 14% 15%

Processing Fees: Personal loan 1.2% 2%-3% 1.10%

Upto Rs 25000 is Rs 1000/ Vehicle loan: 1.2% 0.5% Upto Rs 25 lac 1%

E-stock loan

Education loan Mortgage loan Loan against gold

1.2% 1.2% 0.6%

Nil

Nil

1%

2%

Housing loan

0.60%

0.5%

Rs 50,000

CO-Operative Banks: From the comparison it has been seen that our interest rates on vehicle loan are slightly higher than the Saraswat bank in regard to all the loans been provided. The interest rates charged by our bank on different loans are slightly high as compare to Saraswat and Cosmos bank which also indicates the higher profitability. Our bank is been providing loan against gold at a low interest rate as compare to other two banks which seems that we are able to attract more customers. Our bank is providing Education loan i.e. upto 10 lakh is 11.5% and above 10 lakh its 12.5% where as Saraswat bank is giving loan upto 20 lakh at 14.00% which is higher than our rates. Cosmos is the bank that is giving education loan at a better rate of interest for loan above 10 lac. Interest rate charge on Home loan is high as compare to Saraswat and cosmos bank. Processing fees charge by Abhyudaya Bank is very high for all type of loan i.e. home loan, personal loan, car loan and education loan.

From the comparison it has been seen that SBI and BOI are giving loan for new vehicle and also for second hand vehicle but wherein our banks are providing loan only for purchase of new vehicle which indicates that the demand for the people who want to buy a second hand vehicle is been avoided by our banks. Education loans provided by us upto 20 lakh is 11.5%-12.5% wherein SBI and BOI upto 4 lakh is 13.5%. Our banks are providing loans to the customer at a low rate as compare to SBI and BOI which shows that we are able to attract the customers. State bank of India is charging a very high interest rates on Personal loan as compare to other banks. Housing loan we are providing low amount of loan at a high rate of interest wherein the State Bank of India & Bank of India are giving High amount of loan at a low rate of interest. Bank of India is providing Vehicle loan at a very low rate of interest as compare to SBI & BOI. Bank of India is providing Pensioner Loan to the customers where our Bank is not providing as such kind of loan. Processing fees are higher as compare to other bank public sector banks.

Banks should use easy and less time consuming procedure for sanctioning the loans to the customers. There should be less no. of legal formalities to compete in less time ,which will help to attract more customers. Banks should give extensive advertising to attract potential customers. We should make certain schemes for our loyal customers in order to retain our customers. Banks should provide some new more categories of loan to the customers like Travel loan, Holiday loan scheme, E- stock loan, etc

The study at Abhyudaya Co-operative Bank gave a vast learning experience to me and has helped to enhance my knowledge. Loans are to be processed faster by extending faster and efficient customer oriented service. The customers should be educated with the different credit facilities in a bank.This will create greater confidence among the interested parties which will help them to choose the most suitable scheme. The credit policy of the bank should be reviewed periodically by taking into account changes in money market, changes in the credit policy announced by Reserve Bank of India and happening of the other events to protect the interest of the bank and to maintain profitability.