ACKNOWLEDGEMENT

DECLARATION PREFACE NEED FOR THE STUDY OBJECTIVES OF THE STUDY LIMITATION OF THE STUDY RESEARCH METHODOLOGY DATA ANALYSIS AND INTERPRETATION FINDINGS

SUGGESTIONS AND RECOMMENDATIONS CONCLUSION BIBLOGRAPHY QUESTIONNAIRE

ACKNOWLEDGEMENT
I wish to express our gratitude to Punjab State Cooperative Bank management for giving us an opportunity to be a part of their esteem organization and enhance our knowledge by granting permission to do our training project under their guidance. My sincere thanks are due to entire staff of Bharat group of college for the co-operation during my study. Lastly thanks not lest my acknowledge is to all my family members for being a good of not only finance but also encouragement and constant inspiration during my study.

DECLARATION
I, GURPREET KAUR , here by declare the project undertaken by me on NON AGRICULTURE LOANS OF COOPERATIVE BANK is my original piece of work and is done with the total integrity to my pursue my research objectives.

No attempt has been made to manipulate any information and it is authentic to the best of my knowledge. All the sources of information have been duly disclosed.

PREFACE
Someone has rightly said that practical knowledge is far better than classroom teaching. During the course of this project we actually realized how true it is when we analyzed the Banking Industry. This project enabled us to know about the consumers needs and competitors activities in the real world of Banking.

The subject of my study is NON AGRICULTURE LOANS OF COOPERATIVE BANK, for which I have studied about the NON AGRICULTURE LOANS and collected data of the bank for the last 10 years for its relevance.

WHAT IS A BANK Bank is an institution that deals in money and its substitutes and provides other financial services. Banks accept deposits and make loans and derive a profit from the difference in the interest rates paid and charged, respectively. A bank is one that accepts deposits from public and lends money.
"Bank collects money from those who have it to spare or who are saving it out of their income, and It lends this money to those who require it.

This definition brings out the two important functions of a banker, namely, acceptance of deposits and lending. Thus "A bank is a commercial establishment - a dealer in debts which aims at earning profit by accepting deposits from public, which are repayable on demand or otherwise, through cheques, drafts or otherwise; and which are used for lending or investment."

HISTORY OF INDIAN BANKING

Indian banking system, over the years has gone through various phases after establishment of Reserve Bank of India in 1935 during the British Rule, to function as Central Bank of the country. Earlier to the creation of RBI, the imperial Bank of India was looking after the central bank functions. In 1954, the All India Rural Credit Survey Committee submitted its report recommending creation of a strong, integrated. State-partnered commercial banking institution with effective machinery of branches spread all over the country. The recommendation of this committee led to the establishment of first Public Sector Bank in the name of State Bank of India on July 1, 1955 by acquiring the substantial part of share capital by RBI, of the princely states, associate banks came into fold of public sector banking. Another evaluation of the banking in India was undertaken during 1966, as the private banks were still not extending the required support in the form of credit disbursal, more particularly to the organized sector. The bulk of deposits collected, were being deployed in organized, sectors of the industry and trade, while farmers, small entrepreneurs, transporters, professionals and self - employed had to depend on the money lenders who exploit them by charging higher interest rates. In February 1966, a scheme of Social
6

Control was set up whose main function was to periodically assess the demand for bank credit from various sectors of the economy to determine the priorities for grant of loans and advances so as to ensure optimum and efficient utilization of resources. The scheme however, did not provide any remedy. On July19, 1969, the government promulgated Banking Companies (Acquisition and Transfer of Undertakings) Ordinance 1969 to acquire 14 bigger commercial banks with paid up capital of Rs. 28.50 crores, deposits of Rs. 2629 crores, loans of Rs. 1813 crores and with 4134 branches accounting or 80% of advances. Subsequently, in 1980, 6 more banks were nationalized which brought 91% of the deposits and 84% of the advances in the Public Sector Banking. During December 1969, RBI introduced the lead Bank Scheme on recommendations of FK Nariman Committee. In the post nationalized period, there was substantial increase in the number of branches opened in rural/semi-urban centers bringing down the population per bank branch to 12000 approx. during 1976, RRBs were established (on the recommendation of M. Narasimham Committee report) under the sponsorship and support of public sector bank as the 3rd component multi agency credit system for the agricultural and rural development. The Service Area Approach was introduced during 1989. While the 1970s and 1980s saw the high growth rate of branch banking network, the consolidation phase started in late 80s and more particularly during early 90s, with the submission of report by the Narasimham Committee on Reforms in Financial Services Sector during 1991.
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In these five decades since independence, banking in India has evolved through four distinct phases, namely: Foundation Phase: - This phase can be considered to cover 1950s till nationalization of banks in 1969. The focus during this period was to lay the foundation for a sound banking system in the country. As a result the phase witnessed the development of necessary legislative framework for facilitating re-organization and consolidation of the banking system, for meeting the requirement of Indian economy. A major development was the transformation of imperial Bank into State Bank of India in 1955 and nationalization of 14 major private banks during 1969. Expansion Phase: - This phase began in mid60s but gained momentum after nationalization of banks and continued till 1984, a determined effort was made to make banking facilities available to the masses. Branch network of the banks was widened at a very fast pace covering the rural and semi urban population, which had no access to the banking hitherto. Most importantly, credit flows were guided towards the priority sectors. Consolidation Phase: - The phase started in 1985 when RBI took a series of policy initiatives, which saw marked slowdown in the branch expansion. Attention was paid to improving house keeping, customer services, credit management, staff productivity and profitability of banks.

 Reforms Phase: - The macro economics crisis faced by the country in 1991 paved the way for the extensive financial sector reforms which brought deregulation of interest rates, more competition, technological changes, prudential guidelines on asset classification and income recognition, capital adequacy, autonomy packages, etc.

COOPERATIVE BANKS
The cooperative bank has history of almost 100 years. The cooperative banks are an important constituent of the Indian Financial System, judging by the role assigned to them, the expectations they are supposed to fulfill, their number, and the number of offices them operates. The cooperative movement originated in the West, but the importance that such banks have assumed in India is rarely paralleled anywhere else in the world. Their role in rural financing continues to be important even today, and their business in the urban areas also has increased phenomenally in the recent years mainly due to the sharp increase in the number of primary co-operative banks. While the cooperative banks in rural areas mainly finance agricultural base activities including farming, cattle, milk, hatchery, personal finance etc. along with some small scale industries and selfemployment driven activities, the cooperative banks in urban areas mainly finance various categories of people for self employment, industries, small scale units, home finance, consumer finance, personal finance, etc. Some of
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the cooperative banks are quite forward looking and have developed sufficient core competencies to challenge state and private sector banks. According to NAFCUB, the total deposits & lending of cooperative banks are much more than old private sector banks and also the new private sector banks. This exponential growth of cooperative banks is attributed mainly to their much better local reach, personal interaction with customers, and their ability to catch the never of the local clientele. Though registered under the Co-operative Societies Act of the Respective State (where formed originally) the banking related activities of the cooperative banks are also regulated by the reserve bank of India. They are governed by the Banking Regulation Act 1949 and banking Laws Act 1965, the cooperative banks are small sized units organized in the cooperative sector, which operate both in urban and non urban centers. They finance small borrowers in industrial and trade sectors besides professional and salary classes. Regulated by the RBI, they are governed by the banking regulation act 1949 and banking laws (Cooperative societies) act, 1965.

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STRUCTURE OF COOPERATIVE BANKING

The cooperative banking structure in India is divided into 4 components: a) b) c) d) Primary cooperative credit society Central cooperative banks State cooperative banks Land development banks

STRUCTURE OF COOPERATIVE BANKING Cooperative Credit Institution

Agricultural Credit Institution

Non-agricultural Credit Institution

Short-term Institution

Long Term Credit Institution

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State Coop Bank

Central Coop Bank

Land Development Banks Primary Agricultural Societies

STATE COOPERATIVE BANKS (SCBs) The SCB is a federation of central cooperative bank and act as watchdog of the cooperative banking structure in the state. Its funds are obtained from share capital, deposits, loans and overdrafts from the RBI. The SCBs lend money to CBs and primary societies and not directly to farmers. CENTRAL COOPERATIVE BANKS (CCBs): These are the federation of primary credit societies in a district. They are of 2 types: There can be cooperative banking unions whose membership is open only to cooperative societies. There can be mixed CCBs whose membership is open to both individuals and cooperatives societies. The funds of the bank consist of share capital, deposits, loans and overdrafts from SCBs. The bank provides loans to primary credit societies within the limit of the borrowing capacity of societies. However, some loans are also given to individuals and others. PRIMARY COOPERATIVE CREDIT SOCIETY It is a village institution, which directly deals with the rural people. It encourages savings among the agriculturalists, accept deposits from them, gives loan to the needy borrowers and collects repayments. The funds of the

12

society are derived from the share capital, deposits of members and loans from CCBs. LAND DEVELOPMENT BANKS Cooperative banks and commercial banks by their very nature are not in position to provide long term loans because their deposits are mainly demand deposits. Thus, there was great need for a specialized institution for supplying long term credit to agriculturalists. The establishment of land development banks now known as cooperative and rural development banks (CARDBS) is an effort in this direction. The state government and RBI govern LDBs. Recently; the supervision of LDBs was given to national bank of agriculture and rural development (NABARD). The sources of funds for the banks are debentures subscribed by both central and state government. These banks do not accept deposits from general public. Thus, the apex of the cooperative organizations in the state is the State Bank to which Central Banks are affiliated. The primary societies are mostly affiliated to the Central Banks.

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PROBLEMS FACED BY COOPERATIVE BANKS

1) The cooperative financial institution is facing severe problems which have restricted their ability to ensure smooth flow of credit and also in meeting the requirement of the farming (i) (ii) (iii) (iv) 2) Limited ability to mobilize resources. Low level of recovery. High transaction of cost. Administered rate of interest structure for a long time.

Due to cooperative legislation and administration mandates Govt. interference has become a regular feature in the day-to-day administration of the cooperative institution. Some of the problem area that arise out of the applicability of the cooperative legislative are (i) (ii) Deliberate control of cooperative by the government. Nomination of board of director by the government.
14

(iii) (iv) 3)

Participation of the nominated directors in the election of the chairman. Deputation of government officials to cooperative institutions etc.

The state cooperative banks are not able to formulate their respective policies for investment of their funds that include their surplus resources because of certain restrictions.

4)

Prior approval of RBI is mandatory for opening of new branches of SCBs. The SCBs are required to submit the proposal for opening of new branches to RBI through NABARD, whose recommendation is primarily taken into consideration while according permission.

5)

There is the condition of government guarantee by NABARD while sanctioning credit limits to SCBs and DCCBs but at no stage the commercial bank and regional rural banks are called upon to execute any Govt. Guarantee while sanctioning reference by NABARD.

6)

On the number of occasion's institution like Food Corporation of India, Indian Oil Corporation, Hindustan Petroleum etc. have issued instruction in writing that demand draft/pay order should be obtained from the nationalization/schedule bank.

7)

SCBs does not provide loan directly to farmers due to which they cannot keep pace with the changing requirements of the farmers.

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MISSION
Promotion and sustainance of economic interest & providing easy finance, cost effective and quality banking services to customer & PACs.

OBJECTIVES OF BANK
To serve as a Balancing center for corporative societies in the state. To promote the economic interest for the members of the bank and cooperative societies To provide credit and banking facilities to the members and nonmembers.

16

 To act as higher financing agency for the members Central Cooperative Bank. To promote and develop saving and credit instrument for economic and social welfare of the members in particular and others in general in Punjab State.

SERVICE PROVIDED BY THE BANK

DEPOSITS
Saving Bank Account Current Account Fixed Deposits Long Term Deposits Recurring Deposits Collection instruments of drafts, cheques and various other

LOANS
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Loans to Public
Consumer durable loans Personal loan to salary class Housing loans

Loans to central cooperative banks: (Re-finance)

Short term agriculture Medium term agriculture loan Short term non agriculture loan (Consumption loan) Non farm sector loan Rural and urban housing Tow wheeler loan Revolving cash credit limit to farmers Cash credit fertilizer Cash credit limit to cooperative sugar mills

Loans to other cooperative apex institution

To House Fed Punjab To IFFCO

FACILITIES PROVIDED BY PSCB

Bill discounting ATMs Telebanking
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 24 hour banking Foreign Exchange

MANAGEMENT
The board of Directors lays down the board policies regarding the working of the bank. The Board of Director is constituted for a period of five years. The constitution of the board is given as under: One director from each Central Cooperative bank Two directors to be elected out of the representative of affiliated cooperative societies order than central cooperative bank. One from apex cooperative societies and one form other member cooperative societies.

19

 Maximum three nominees of the government so far as government's contribution of share capital of the bank are concerned. Registrar or his nominees not below the rank of additional registrar. Managing Director of the bank Representative of NABARD. The members of the Board of Directors, elects from the elected members the chairman and vice chairman. In the absence of the board, the administrator looks after the bank..

FUNCTIONS OF THE BANK

According to the banking regulation act 1956, banking means "Accepting for the purpose of landing or investment of deposits of money from the public, repayable of demand or otherwise and withdrawal by cheques. Drafts and order or otherwise."
BANK FUNCTION

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PRINCIPAL

ANCILLARY

ACCOUNTING DEPOSITS

GRANTING ADVANCES

SAFE DEPOSITS LOCKERS

ISSUE ISSUE OF OF GURANTEES PAY ORDER/DD

FINANCIAL HIGHLIGHTS
INVESTMENT OF FUNDS: (A) STATUTORY REQUIREMENTS: -

25% of the total time liabilities are invested in the shape of SLR in Government Securities by the bank while the central cooperative banks can keep this with the Punjab State Cooperative Bank, Chandigarh. 5% of the total time and liabilities is kept as Cash Reserve Ratio under the RBI Act in

21

the shape of Current Account with RBI Act in the shape of Current Account with RBI. Remaining is being invested in Loan Portfolios. (A) ADVANCES AND LOANS: (1)

Short Term Agricultural Advances: The short term agricultural loan is advanced by the cooperative banks for the Seasonal Agricultural Operations known as Crop Loan. The farmers in the State are being provided credit for raising Kharif and Rabi Crops in the shape of cash and kind component. The Agricultural Advances made during the last four years are as under:-

YEAR 2006-07 2007-08 2008-09 2009-10

2)

TARGET (IN Cr.) 4544.00 5907.00 6000.00 6740.00

ADVANCEMENT (IN Cr.) 4128.56 4801.63 5828.28 5894.29

Short Term Agricultural Recovery (DCCBs): The recovery of short term agricultural loan of DCCBs has improved. The recovery is being effective through persuasive methods. No coercive action is being taken. The annual recovery of S.T Agricultural Loan for the last 4 years given as follows: 2006 91.80 2007 92.33% 2008 92.16% 2009 82.07%

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(3)

Medium Term Agricultural Advances: -

The central cooperative banks are advancing Medium term Agricultural Loans in the state for various purposes namely-purchase and installation of pump sets, diesel engines, electric motors with or without pump, purchase of agricultural implements, machinery, seeds, disk arrowa, harvesters, tyrecarts etc. land reclamation and land improvement, construction of bunds, preparation of orchards and plantation, purchase of milch cattle, pouitry farms, purchase and installation of gobar gas plants and purchase of shares of cooperative sugar mills etc.the disbursement of M.T.loan is as under YEARS 2007-08 2008-09 2009-10
(4)

AMOUNT ADVANCE(IN CR) 117.57 210.31 196.87

Revolving Cash Credits: A unique scheme was evolved to bring the farmers from uninstitutional credit to the cooperative credit structure. Under this a scheme, the Cooperative Banks are providing Rs.1.00 lacs per acre subject to the maximum of Rs.6.00 lacs to the farmers for fulfilling their socio economic liabilities without falling pray to the clutches of private/non institutional money lenders. Rate of interest is 11%.The central cooperative banks have sanctioned credit limits as detailed below: -

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YEARS 2007-08 2008-09 2009-10

NO. OF BENEFICIARIES 132011 142226 148799

LIMITS SANCTIONED (IN Cr.) 1527.00 1919.55 2091.75

(5)

Non Farm Sector Loan: Another most important features of the cooperative banks in the State is that they started advances for Non Farm Sector during the year 1993 and advanced loans as detailed: YEARS 2007-08 2008-09 2009-10 NO. OF BENEFICIARIES 9590 8013 4873 LIMITS SANCTIONED (IN Cr.) 56.48 49.50 42.32

(6)

Loans for Consumer Durables: Loans for consumer durables, such as for the purpose of television, refrigerator, air conditioner and other household items etc were disbursed by CCBs as under: -

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YEAR 2007-08 2008-09 2009-10

AMOUNT DISBURSED (IN CR) 80.70 79.71 71.50

(7)

Cash Credit to be Businessmen and Traders: Under this scheme, a cash credit limit is sanctioned up to Rs25.00 Lakhs to small businessmen and traders depending upon their business turnover on easy terms at 14% normal rate of interest. These limits sanctioned to the traders are detailed below: -

YEAR 2007-08 2008-09 2009-10

CC LIMIT SANCTIONED (IN CR) 245.72 280.40 306.49

(8)

Two Wheeler Loan to Farmers: A scheme of NABARD was started in February 2002. The farmers can take 75% of two-wheeler's cost or Rs. 50,000/- whichever is less, from the Central Cooperative Banks in the State of Punjab.

YEAR 2007-08

AMOUNT ADVANCED (IN CR) 43.33

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2008-09 2009-10
(9)

39.62 32.95

Housing Scheme: These loans are provided by the Central Cooperative Banks for construction of new house, reapir/extension and renovation of existing house and the maximum limit of these loans is Rs. 5.00 Lakhs. YEAR 2007-08 2008-09 2009-10 AMOUNT ADVANCED (IN CR) 94.64 101.33 90.10

(10) Vehicle Loan Scheme: -

Under vehicle loan scheme, loan is available for new vehicle like Car, Mini Bus,Lorry etc upto 80% of the value of the vehicle or Rs. 10.00 lakhs, whichever is less.

YEAR 2007-08 2008-09 2009-10 (11) Personal Loan Scheme: -

AMOUNT DISBURSED (IN CR) 39.16 61.82 84.08

This scheme has been introduced in December 2002, through all the branches of Punjab State Cooperative Bank and for all the 19 Central Cooperative Banks in the State of Punjab. This loan can be advanced
26

to salaried employees upto Rs. 2.00 lakhs @ 14%. The year wise detail is given below: YEAR 2007-08 2008-09 2009-10 AMOUNT DISBURSED (IN CR) 103.22 133.78 126.44

PROFITS
All the Cooperative Banks in the state are in loss. The figures are given below: YEAR 2006-07 2007-08 2008-09 APEX BANK 26.24 23.79 10.34 CCBs 74.84 24.55 18.73 TOTAL 101.08 48.34 29.07

OBJECTIVES OF THE STUDY

The research project is made on "The Punjab State Cooperative Bank". The objectives of the study undertaken are: To study the Non Agriculture Loans provided by the bank and to know in detail the procedure for applying these loans.
27

 To analyze the customer satisfaction level on the loans provided by the bank. To evaluate and suggest efficient and effective provisions for the loans being provided. To analyze the profits and advances of the bank in the previous three years time period.

RESEARCH METHODOLOGY
Research can be described as 'a purposeful investigation'. Research is a step-by-step approach to investigate the problem in order to find a solution. There are many techniques, which can be employed to solve a problem so it is important for the investigator to consider his problem carefully at the outset and make use of techniques that are appropriate to it. Just as the carpenter needs to use more than one tool in completing a piece of work, so the research worker must often make use of, not one, but several methods. When we desire a great deal of information concerning each individual or occurrence to be studied, much of our data may be nonquantitative by its nature. In such an even we employ the case study method of investigation, the purpose of which is to consider in detail the features of peculiar to the individual case. We will make use of two kinds of data:
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1)

PRIMARY DATA

This data happens to be original in character as it is Collected a fresh and for the first time. Such data are published by authorities who themselves are responsible for their collection. Examples include census data collected by Indian Government. In this study we will make use of primary data, which can be collected by, one or more of following methods:a.

OBSERVATION METHOD: In this method, the investigator collects the information through personal observation. QUESTIONNAIRE METHOD: This is one of the most popular methods of data collection. The primary data is collected by personally interviewing individuals and recording their responses in a structured questionnaire. This method will be used to collect data from respondents in this study.

b.

c.

MAILED

QUESTIONNAIRE

METHOD:

preset

questionnaire is mailed to a selected list of persons who are requested to fill it & mail it back.
d.

TELEPHONE INTERVIEW: The respondents are contacted on phone for recording their responses. This method saves time but the respondent should have a telephone.

Of all these methods of primary data collection, questionnaire method will be used to gather information from the management and employees. 2) SECONDARY DATA: This corresponds to the data, which has already been collected and processed by some other agency. In this study the secondary data will be obtained from the booklets and journals of the companies under study in order to get information
29

relevant to the case. The sources of secondary data can broadly be classified under two heads: a) PUBLISHED SOURCES: The various sources of published data are: Reports and official publication of international bodies such as the " World Bank" International Labour Organization" Central and State government Semi official publications of various local bodies such as Municipal Corporations and District Boards.

b)

UNPUBLISHED SOURCES:

All statistical material is not always published. There are various sources of unpublished data such as records maintained by various Government and private offices; studies made research institutions, scholars etc. Such sources can be used where necessary.

TOPIC UNDERTAKEN FOR THIS STUDY

During the training period, I concentrated only on five kinds of loans, which are provided by the Cooperative Bank, Bathinda. The reason being that the branch has provisions for only these four finds of loans, thus is providing these non-agricultural loans only. A detailed study of the procedure for

30

applying to these loans, documents required and other formalities related to these loans are studied. These loans are stated as under: Personal Loan Consumer Loan Vehicle Loan Education Loan To apply for a loan, the consumer has to first of all give an application to the Registrar applying for the loan. Then it is checked whether the customer has taken a loan before and if yes, whether it is repaid or not, after the eligibility of the customer is checked. In the process, it is seen that whether the customer is able to repay the monthly installments. It is checked with the help of the salary slip of the customer, which is prepared by the Accounts Department of the office. After making all the deductions, it is seen that whether the amount left is sufficient enough to pay the EMIs of the loan. If all the formalities are meeting, the file is moved to the Registrar for further notification and sanctioning of the loan. After the loan is sanctioned, a person from the bank is sent to verify that, whether the loan has been used for the stated purpose. The detail procedure of each loan is discussed as follow:

PERSONAL LOAN
Personal loan scheme has been framed which aims at providing credit facility for meeting out Social Economic needs of employees such as: Child Education, Furnishing your home, buying a computer, marriage of
31

son/daughter, holiday tour with your family or any other basic requirement without giving any purpose of loan. This scheme was introduced in 2001.

Main feature of this scheme are Eligibility criteria class:All salaried employees of Punjab Government Chief Auditors Cooperative Department, Punjab State Cooperative Banks and Chandigarh Administration its board, corporations except on deputation with Chandigarh administration boards and corporations.

Purpose Age
Service tenure

Credit facility for meeting out socioEconomic needs Minimum 21 years and max.57 years One year after confirmation 14%
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Rate of interest

Loan limit Collateral Security Margin Repayment period Monthly Installment per Lac Payment of loan

12 times of Gross S/salary or Rs.2.00 lac, whichever is less Two Good Sureties as per Satisfaction of the bank No margin required Maximum 5 Years Rs.2326.00

Loan is repayable in equal installments in the form of post dated chequess. The 1st installment will start after one month. The loan shall be repaid before retirement.

Option to repay loan : -Loanee will have the option to prepay the loan
at one time during the tenure of loan in lump sum. A prepayment fee of 1% will be payable on the outstanding loan amount. No part-prepayment is allowed. General No employee will be given this loan facility who has defaulted in repayment of loan in any other scheme. DOCUMENTS REQUIRED Pre-sanction Application form Latest photograph Bank account statement

33

 Proof of income employer certificate of identify proof of continuity of current job Proof of residence of the borrower and guarantor Post-sanction Demand pronote Agreement (N J stamp paper for Rs. 15/- only) Signature verification Post dated cheques ADVANCEMENT Under this scheme Rs. 103.22 crores were advanced during the year 200708and Rs. 133.78 Cr. has been advanced during the year 2007-08 and Rs. 126.44 Cr. were advanced during the year 2009-10.

34

140 120 100 80 60 40 20 0

2006-07 2007-08 2008-09 2009-10

Amount disbursed (in Cr.)

35

CONSUMER LOAN
The Punjab State Cooperative Bank to make advances to the individuals directly for the purchase of consumer durables like refrigerator, scooter, television, radio etc and for meeting other domestic expenses like expenses on medical, education, marriage of son/daughter/brother/sister or self etc and also for providing overdraft facility to the saving account and current account holders.

Main feature of this scheme are Beneficiary

The bank may grant loan to the individual salary earners and non salary earners.

Purpose Loan limit Rate of Interest Margin Repayment Period Monthly Installment Per Lac Collateral Security Tenure of loan
36

for the purchase of consumer Durables

Maximum amount upto Rs.1Lac. 14% 25% Maximum 5 Years Rs.2326.00 Two Good Sureties as per Satisfaction of the bank

The loan should be repayable in monthly installments. The total duration of loan should not exceed five years. CONDITIONS FOR APPLYING THE LOAN The following conditions are required to be fulfilled in order to apply for the loan: The borrower should be enrolled as a nominal member of the bank. The borrower is required to produce two witnesses who should also be a nominal member of the bank while signing the agreement. The loan should be advanced for acquiring new assets only. Purchase of second hand articles should not be financed. The bank should take the original invoice from the dealer. The loan should be advanced against hypothecation of the asset/assets required/to be acquired. DOCUMENTS REQUIRED Promissory note Agreement bond Salary certificate An authority letter from the loan and corresponding undertaking, from the employer of the borrower under section 39 of the act for the repayment of the loan in case the borrower fails to repay his loan. Letter of waiver An authority letter from the borrower to recover the installment Application form
37

 Surety bond Hypothecation agreement ADVANCEMENT The bank has advanced Rs. 71.50 Cr. Till the end of March 2010 as compared to Rs. 79.71 Cr. which was advanced by the bank in the year 2009.
120 100 80 60 40 20 0 2006-07 2007-08 2008-09 2009-10 amount disbursed(in Cr.)

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SHEKARI EDUCATION LOAN FACILITY

Main feature of this scheme are Beneficiary Purpose
students For pursuing higher studies in India or Abroad

Any Individual with 50%marks

In 10+2 To provide financial assistance to Deserving and meritorious

Age
Minimum 17 years and Maximum 35 years. His age of the Father/Guardian should not be more than 65 years till full recovery of loan.

Loan limit Rate of Interest Margin Repayment period

Max. amount up to Rs.10 lac. 9% No margin required The installment will start after Completion of course. Max Period 5 years.

Security
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Collateral security: Mortgage of property value of 100% of loan amount.. For the loan up to Rs.5 Lac. No immovable security is required if the loanee is the employee of Punjab Govt.or Coop Department etc.

Insurance: Insurance policy will be taken on the life of the student for
an amount equal to the loan amount assigned in favour of the bank.

Disbursement of loan
The branch will get sanction of total loan amount from the competent authority, but will disburse the amount based on yearly expenses of the course. Third party payment in favour of concerned university or college. In case purchase of Equipment/Books/Computer, the payment shall be made to the applicant. DOCUMENTS REQUIRED Pre-sanction: Salary slip for the six months Income proof Income tax returns Academic records Particulars of scholarship won, if any Post-sanction: Application nominal membership from the student/parent/guardian and guarantor. DP note Letter of lien and set off
40

 Letter of waiver Letter of guarantee from guarantors Loan agreement Affidavit from parent/guardian regarding: 1) Payment of interest. 2) Repayment of loan, incase of default by the applicant. 3) He will not go abroad permanently without prior permission of the bank. 4) He will intimate the bank regarding any change in the status of study, if any. 5) Mortgage of collateral security duly registered & mutation in favour of the bank, if required. PRECAUTION FOR DISBURSEMENT Third party payment except for purchase of equipment/books. Payment of loan amount for the 2nd year is made after obtaining the documents relating to passing the first year & so on.

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VEHICLE LOAN
Under vehicle loan scheme, loan is available for new vehicles like Car, Mini Bus, Lorry etc.

Main feature of this scheme are Beneficiary

Coop Societies or a Company Individual, Firm, HUF, Trust,

Purpose Loan Limit Margin Rate of Interest Repayment period

.

For the purchase of new vehicle for business and personal use Max. Amount up to Rs.10 Lac. Or 80% of cost of the vehicle. 20% Upto Rs.3 Lac : 13% Above Rs.3 Lac: 13.5% Maximum 5 Years

Insurance

Comprehensive insurance jointly With the name of Bank and

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Borrower.

Collateral Security
Two Good Sureties as per satisfaction of the Bank Besides the hypothecation of the vehicle

DOCUMENTS Pre-sanction Application for the loan. Residence proof of borrower and Guarantors. Copy of the Driving License. Quotation of the vehicle. Identity proof. Document relating to collateral security, if applicable Proof of income. In case of salaried employee: a) b) c) a) b) c) Form 16 Latest salary statement with deduction Income tax returns for the last three years, if income tax payee Copy of balance sheet and profit & loss a/c for the three years. Proof of business. ITRs for the last three years.

In case of business:

In case of firms:
43

a) b) c)

Copy of the partnership deed. Authorization letter. Proof of office on case of firms.

In case of companies: a) b) Memorandum and article of association. Copy of resolution.

Post sanction Application for the nominal membership of the borrower, guarantor and mortgagor. D.P. note. Letter of lien and set off. Letter of waiver. Hypothecation deed. Loan agreement. Mortgage deed duly registered and mutation in the favour of the bank, if applicable. Duly signed post dated cheques for the installments.

PRECAUTION FOR THE DISBURSEMENT: The following documents to be obtained after disbursement: Insurance cover. Copy of Registration Certificate. Original invoice. One set of duplicate keys.
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ADVANCEMENTS
The bank has advanced Rs. 84.08 Cr. to the customer in the year 2009-10, while the amount was Rs. 61.82 Cr. in the year 2008-09.

90 80 70 60 50 40 30 20 10 0 2005-06 2006-07 2007-08 2008-09

Amount disbursed (in Cr.) 3-D Column 3

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Data Analysis and Interpretation

Q.1 Are you Customer of this bank? Table No. 1 1.Yes 2.No 1. 50 2. 0

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Yes No

Q.2 Income segment do you belong? Table No.2 1.1000-5000 2. 6000-10000 3. 11000-15000 4. 16000-20000 5. Above 1.15 2. 10 3. 13 4. 5 5. 7

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1000-5000 6000-10000 11000-15000 16000-20000 Above

Q.3 Have you an account in this bank? Table No. 3 1.Yes 2.No 1. 50 2. 0

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Yes No

Q. 4

From How many years you are customer of this bank? Table No. 4

1. From 1-2 year 2. From 2-5 year

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1. 10 2. 12

3. From 5-10 year 4. Above 10 year

3. 10 4. 18

1-2 year 2-5 year 5-10 year Above 10 year

Q. 5 Why you prefer this bank? Table No. 5 1.Low interest rates 2.Less documentations 3. Easy disbursement 4.All of the above
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1.10 2. 13 3. 12 4. 15

Low interest rates Less Documentations Easy Disbursement All of the above

Q. 6 What type of loan you prefer to fulfill your needs? Table No. 6 1.Personal loan 2. House loan 3. Consumer loan 4. Vehicle loan 1. 20 2. 15 3. 6 4. 9

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Personal loan House loan Consumer loan Vehicle loan

Q.7 Security demand by the bank while taking loan? Table No. 7 1. Yes 2. No 1. 50 2. 0

52

Yes No

Q.8 Disbursement of loan by the bank? Table No. 8 1. Quick 2. Slow 3. Cant say 1. 25 2. 5 3. 20

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Quick slow can't say

Q.9 Perception of customers towards loan procedure? Table No. 9 1.Well 2. Good 3. Better 4. Cant say 1. 30 2. 8 3.10 4. 2

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Well good better can't say

Q.10 How you feel about the services? Table No. 10 1.Well 2. Good 3. Better 4. Cant say 1. 25 2.12 3.10 4. 3

55

Well good better can't say

CONCLUSION
With the help of the research work done, and by interpretation of the responses of the customers, following conclusions can be made: It is clear that the bank's personal loans and house building loans are more popular and hence the customers taking these loans are more than the other customers.
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 During the analysis, it was found that mostly the employees of the bank are the customers of the bank. As the customers are the middle income group having an average salary of Rs. 1700/- per month and there is a direct correlation between the income of the employees and the amount of loan taken, hence mostly the employees undertaken a loan ranging between Rs. 1,50,000/- to Rs. 4,00,000/ The bank is able to reach up to the satisfaction level of its customers. The customers have suggested that the formalities included during the loan processing should be reduced. The rate of interest of bank is reasonable which the reason is for most of the employees for taking loan from the institution. The bank has three categories of its customers as its own employees, non employees and businessmen. The average processing time for the loan is 7 - 14 days.

BIBLIOGRAPHY
Financial Accounting By Jain & Narang Research Methodology by C.R.Kothari Annual Reports of Punjab State Cooperative Bank www.google.com
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www.pbcooperatives.gov.in

Questionnaire
Q.1 Are you customer of this bank? 1. Yes 2. No Q.2 Income segment do you belong to?
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1. 1000-5000 2. 6000-10000 3. 11000-15000 4. 16000-20000 5. Above Q.3 Do you have an account in this bank? 1. Yes 2. No Q.4 For how many years you are associated with this bank? 1. From 1-2 year 2. Form 2-5 year 3. From 5-10 year 4. Above 10 year Q.5 Why do you prefer this bank? 1. Low interest rates 2. Less documentations 3. Easy disbursement 4. All of the above Q.6 What type of loan you prefer to fulfill your need? 1. Personal loan 2. House loan
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3. Consumer loan 4. Vehicle loan

Q.7 Does the bank demand Security while taking loan?

1. Yes 2. No Q.8 How is the Disbursement of loan by the bank? 1. Quick 2. Slow 3. Cant say Q.9How is the Perception of customers towards loan procedure? 1. Well 2. Good 3. Better 4. Cant say Q.10 What is your perception about the services? 1. Well 2. Good 3. Better 4. Cant say

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