Project on Banking Submitted to Mrs.

Audrine Vaz

By: Viral Saraf Aman Amin Riddhi Shah Nijee Dave

Nature Of Banks

1) AMCO Bank:
Full Form Ahmedabad Mercantile Co-operative Bank Co-operative Sector Bank Field of work - Industrial and commercial Registration Scheduled Bank

2) HDFC Bank: Full Form Private Sector Bank Field of work Commercial Registration Scheduled Bank

3) HSBC Bank:

Full Form

Field of work Registration -

A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over time, between the lender and the borrower. In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. Typically, the money is paid back in regular installments, or partial repayments; in an annuity, each installment is the same amount.

The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced by contract, which can also place the borrower under additional restrictions known as loan covenants. Although this article focuses on monetary loans, in practice any material object might be lent.

Types of Loan/ Banks Education Loan Personal Loan Business Loan Car Loan Two wheeler Loan Housing Loan Loan against security

AMCO Bank

HDFC Bank Interest rate(%)

HSBC Bank

10.0 to 13.0% N.A 13.0% 10.0% 12.0% 10.0 to 10.5% 11.0%

11.0 to 14.0% 15.5 to 24.0% 17.0 to 21.0% 11.25% 21.0 to 24.0% 8.75 to 9.75% 12.5 to 14%

Cash Credit
Cash credit is a short-term cash loan to a company. A bank provides this type of funding, but only after the required security is given to secure the loan. Once a security for repayment has been given, the business that receives the loan can continuously draw from the bank up to a certain specified amount.

Overdraft
An overdraft occurs when withdrawals from a bank account exceed the available balance which gives the account a negative balance - a person can be said to be "overdrawn".

Action for enforcement of security interest can be initiated only if the secured asset is classified as Non Performing Asset. Non Performing Asset means an asset or account of borrower, which has been classified by a bank or financial institution as sub-standard, doubtful or loss asset, in accordance with the directions or guidelines relating to asset classification issued by RBI.

It is a bank regulation that sets the minimum reserves each bank must hold by way of customer deposits and notes These deposits are designed to satisfy cash withdrawal demands of customers

Deposits are normally in the form of currency stored in a bank vault or with the central bank like the RBI CRR is also called the Liquidity Ratio as it seeks to control money supply in the economy The current CRR rate is 5%

CRR and liquidity

For e.g. saythe CRR is pegged by RBI at 10%. if a bank receives Rs. 100 as deposit, then they can lend Rs. 90 as a loan and will have to keep the balance Rs. 10 in customers deposit account. Now, the borrower who has received Rs. 90 as a loan will deposit the same in his bank. The borrowers bank will now lend out Rs. 81 (Rs. 90 X 90%) and keep Rs. 9 in his deposit account. As this process continues, the banking system can expand the initial deposit of Rs.100 into a maximum of Rs. 1000 (Rs. 100 + Rs. 90 + Rs. 81.=Rs. 1000).