A Study On Risk Analysis On Personal Loans at Vijaya Bank

“A STUDY ON RISK ANALYSIS ON PERSONAL LOANS AT VIJAYA BANK”
CHAPTER-01
INTRODUCTION
ACHARYA INSTITUTE OF GRADUATE STUDIES Page 1

INTRODUCTION
INTRODUCTION ABOUT BANKING INDUSTRY:
The word bank originated the French word ‘Benque’ or Italian ‘Banco’ which means
an office for monitory transaction over the counter. In those days banks or desks were used as
centers for monitory transactions.
During the barter system also, there existed traces of banking, i.e. people used to
deposit cattle and agricultural products in specified places get loans of some other form in
exchange for these. There is solid evidence found in records excavated from Mesopotamia,
showing some bank existed around 1700 B.C. During this time barley, silver, gold, copper,
etc., were used as a standard for valuation.
ORIGIN OF BANKING INDUSTRY:
Greece was the first country to introduce a satisfactory system of coinage. After the
invention of coins started, a meaningful system of banking came into existence taking into
account all the avenue of banking a credit system.
Rome was the first country to start a bank at the department of state level in the 4 th
century B.C. with transactions such as depositing and investments in other forms. In India
ancient records show that banking was popular and money lending was a common practice
among the common people.
In the olden days’ Goldsmith, merchants and money lenders conducted the business. They
had transactions among themselves by which funds were transferred from one business firm
to another. They had no general or uniform principles of banking, lending, rate of interest,
etc.

INTRODUCTION TO BANKING IN INDIA
The Indian Companies Act defines the term banking as “accepting for the purpose of
lending or investment of deposits of money from the public, repayable on demand or
otherwise and with draw able by cheque, draft or otherwise”.
A Banker is a dealer in money and credit. The business of Banking consists of

borrowing and lending banks acts as financial intermediaries between savers (lenders) and
investors (borrowers) by accepting deposits of money from a large number of customers and
lending a major position of a accumulated ‘pool’ of money to those who wish to borrower. In
this process banks secure reasonable return for the savers, make funds available to the
investors at a cost and earn a profit for themselves after covering the cost of funds and
providing for corporate taxes to the government. Thus, the banking institutions in a country
mobilizes savings by accepting monetary deposits from the people, participate in the
mechanism for the exchange of goods and services and extend credit while lending money.
PRESENT SCENARIO OF BANKING INDUSTRY:
The Indian banking can be broadly categorized into nationalized (government

oriented), private banks and specialized banking institution. The RBI acts as a centralized
body monitoring any discrepancies and shortcoming in the system. Since the nationalized
banks have required a place of prominence and has then seen tremendous progress.
The need to become highly customer focused has forced the slow of moving public
sector banks to adapt a fast track approach.
The Indian Banking has come a long way from a sleepy business institution to a
highly proactive and dynamic activity. This transformation has been largely brought by the
large close of liberalization and economic reform that allowed banks to explore new business
opportunities rather than generating revenue from conventional stream i.e. borrowing and
lending. The Co-operative banks too have invested heavily in information technology to after
computerized banks services its clients.
NEW GENERATION BANKING:

The liberalized policy of government of India permitted entry of private sector in

banking; the industry has witnessed the entry of new generation private banks. The major
parameter that distinguishes these banks from all the other banks in Indian Banking is the
level of services that is offered to the customer. Verifying the focus has always being
centered on the customer understanding his needs and delighting him with various
configurations of benefits and a wide portfolio of product and services. The popularities of
these banks can be gauged by the fact, that in as short span of time, these banks have gained
considerable customer confidence and consequently have shown impressive growth sales.
Banks also enable customer payments via other payment methods such as telegraphic
transfer, Electronic Fund Transfer Point of Sale (EFTPOS) and Automated Teller Machine
(ATM).
However the commercial role of banks is wider than banking, and includes:
1. Issue of banknotes (promissory notes issued by a banker and payable to bearer on demand)
2. Processing of payments by way of telegraphic transfer, EFTPOS, internet banking or other

means
3. Issuing bank drafts and bank cheques.
4. Accepting money on term deposit
5. Lending money by way of overdraft, instalment loan or otherwise
6. Providing documentary and standby letters of credit, guarantees, performance bonds,

securities underwriting commitments and other forms of off balance sheet exposures
7. Safekeeping of documents and other items in safe deposit boxes
8. Currency exchange
9. Sale, distribution or brokerage, with or without advice, of insurance, unit trusts and similar
financial products as a 'financial supermarket'.
DEFINITION OF BANKING

Section 5 (b) of the Banking Regulation Act 1949 defines “Banking” as “Accepting for the
purpose of lending and investment, deposits of money from the public repayable on demand
or otherwise and withdraw able by cheque, draft, order .”
FUNCTIONS OF BANKING
The most important functions of banking may be classified as follows:
 To assemble capital and make it effective.
 To receive deposits and make collections.
 To check out and transfer funds.
 To discount or lend.
 To exercise fiduciary or trust powers.
 To issue circulating notes.
Every bank which expects to succeed must first of all prove its value to the community. The
services which a bank performs are so generally taken for granted that the public is unaware
of the real extent of the facilities offered. Banks are equipped to utilize funds, for either a
short or long period of time, safely, and with some profit.
CLASSIFICATION OF BANKS
Banks are classified into several types based on the function they perform.
Generally the banks are classified:
 Commercial banks
 Investment or industrial banks
 Exchange banks
 Co-operative banks
 Land Mortgage banks
 Saving banks
 Central banks
1. Commercial banks:

Commercial banks perform all types of business transactions and accept three
types of deposits fixed deposits, saving bank deposits and current deposits. They accept these
deposits which are repayable on demand or on short notice. They provide funds only for short
term needs.
2. Investment bank /industrial banks:
Investment bank is those banks, which provide funds on long term for
industries. The investment banks are specialized in providing long term loans to industries
with a view to buy plant and machinery. The investment banks obtain funds through share
capital, debentures and long term deposits from the public.
3. Exchange banks:
Exchange banks are known as foreign banks or foreign exchange banks, which
provide foreign exchange for import trade. Their main function is to make international
payments through the purchase and sale of exchange bills. They convert home currency into
foreign currency and foreign currency into home currency.
4. Co-operative banks:
Co-operative banks are promoted to meet the banking requirements of

consumer not only in urban areas and rural areas. They are formed on the co-operative banks
principle and as such they are more service oriented than profit oriented.
5. Central banks:
Central banks are an apex bank in the country, which brings the entire banking
system unified, controlled and regulated. In our country the central bank is the Reserve Bank
of India (RBI).
6. Land Mortgage banks:
Land Mortgage bank provides long term loans on the security of the land to
initiate permanent improvements on the land to buy agriculture machineries.
BANKER AND A CUSTOMER
BANKER

A banker is a person or company carrying on the business of receiving money and

collecting drafts, for customers subject to the obligation of honouring cheques drawn upon
them time to time by the extent of the available in their ‘current accounts’.
CUSTOMER
A person becomes a customer of a bank, when he makes a regular transaction with the
bank and has maintained his accounts regularly with the banker, the moment his cheques is
accepted for collection and there must be some recognizable course of habit of dealing
between the person and the bank.
PERSONAL LOANS
INTRODUCTION TO PERSONALLOANS
Personal loan is a lump sum amount that you take either from a bank or building society.A
personal loan is a sum of money that an adult person borrows to meet his financial needs
andrequirements. An individual can take an easy personal loan or a guaranteed personal loan
for a varietyof reasons. Loans for personal debt help provide funds to purchase that dream
boat or car, pay for mortgage arrears or home improvement requirements. In fact personal
loans help meet most of the financial emergencies that an individual can think of.
Personal loans are often the most preferred type of loan on account of their flexibility. The
two most common types of personal loans are:
 Secured loans and
 Unsecured loans
Many times people would have experienced financial crisis. During such events they would
have borrowed money from their neighbour or acquaintance. These kinds of loans which are
available in banks and other financial institution are known as personal loans. A personal
loan can be a secured or unsecured one depending upon the company’s practices, credit
history etc.
 What are personal loans?
 What are its uses?

 What are the types in it?
 Benefits of secured and unsecured loans
 Who will provide personal loans?
 How one can avail personal loans?
MEANING OF PERSONALLOANS
It is a type of unsecured loan and help to meet your current financial needs. You don’t need
any security /collateral while availing it. Personal loan gives you the flexibility to use the
fund as per your convenience and need.
Personal loan is your solution for instant cash and can be used for traveling,
weeding, medical emergency, personal renovation or anything else.
What is a Personal Loan?
Simply put, it is an unsecured loan taken by individuals from a bank or a non-banking

financial company (NBFC) to meet their personal needs. It is provided on the basis of key
criteria such as income level, credit and employment history, repayment capacity, etc. unlike
a home or a car loan, a personal loan is not secured against any asset. As it is unsecured and
borrower does not put up collateral like gold or property to avail it, the lender, in case of a
default, cannot auction anything your own. The interest rates on personal loans are higher
than those on home, car or gold loans because of the greater perceived risk when sanctioning
them.
Who Will Help Provide Personal Loans and How?
There are many banks and financial institutions that would help provide with easy personal
loans or guaranteed personal loans. As all of them would have their own sets of terms and
conditions by which they abide, it would be smart to consult with as many lending
institutions before arriving at a decision of personal loan. Talk to them about the financial
requirements. Check the quotes that they give. Once the formality of taking a loan is
completed, the banks would give a lump sum of money. This could be repaid over a period of

time. The longer the period of repayment, the lesser the interest rate. The lenders have a duty
to inform the borrowers of the rate of interest charged are that they would be charging. Be
sure to investigate whether the rate of interest charged is fixed or floating.
Online Personal Loans
Loans are offered by not only lenders in the locality but also by internet lenders. They could
either be directly deposited in the bank account or mailed by way of cheque. Repayments
could be automatically debited from the account to suit convenience. Be sure to make
payments on time, or else one may incur additional penalties. Guaranteed online personal
loans come with lower rates of interest than credit cards. The first guaranteed personal loans
could be a small sum; but once it is proved that payments can be made on time, it is most
likely to be assured a larger sum the next time one opt for a guaranteed online personal loan.
HOW TO APPLY FOR PERSONAL LOAN
Step 1: Enquiry with a financier
The first step is to get in touch with a lender. It is required to get in touch with as many
lenders as possible and get them to make loan offers. Then negotiate with them to get the best
interest. Check if there are any special offers. After getting all the banks to make their offers,
select the lender based on the information given.
Step 2: Documents Collection
After finalizing the lender, the lenders direct selling agent will visit and collect documents
supporting proof of income, residence proof, and identity. It may be required to produce
copies of IT returns, salary slips, bank statements, ration card, passport, driving licence, and
other relevant documents. These requirements vary from lender to lender.
Step 3: Field Investigation Agency Representative Visit
After submitting the documents, a field investigator will visit home to double check the facts
provided in the documents, such as the place of residence, tenure at work place
and so on. It is essential to be present during this visit; otherwise the investigator could

report that the facts provided do not actually add up, thus forcing the lender to reject the loan
application.
Step 4: Loan approved
Once the lender is satisfied with the verification of the documents provided, the loan is
approved. The lender then disburses the amount through cheques or demand drafts (DD).
DOCUMENTATION
Compared to other types of loans, personal loans requires to produce the least
number of documents required can be classified into three:
Identity Proof:
A copy of any of passport or driving license, voters ID, Adhaar card, PAN card,
credit card with photograph, or employee ID card with photograph. Any one of the
above documents with photograph is proof that heis the same person as profess to be.
Proof of Residence:
A copy of passport, ration card, Adhaar card or voters ID if he resides at the

same place as entered in the above- mentioned documents. If he is staying as a tenant on
rent, in a place different from where he have been issued the ration card, passport, or voters
ID, he can produce utility bills (electricity or telephone) of the place as proof of residence.
Income proof
The proof of income for salaried individuals differs from that of self-employed individuals.
Salaried people need to submit their latest salary slip, from 16 for the last financial year, and
their bank statement for the last 6 months. Self-employed people need to provide their IT
returns for the last 2years, balance sheet, and profit and loss account as proof of income.

Prime Consideration before taking out a personal loan
The prime consideration with any borrowing is the repayment. Taking out a personal loan can
be a big decision to make, so we have comprised a list of things to consider before applying-
 Do I meet the requirements to qualify for a personal loan?

 What is the personal loan for?
 What are the interest rates?
 What are the fees associated with personal loan?
 What is the term of the loan?
 How do you plan to pay it off?
Charges applicable before and after the Personal loan
Very often we fail to read the fine print in a loan document. The real cost
of personal loan is visible only when factor in numerous other charges levied. If intend to
make comparisons with other types of loans, it is necessary to take into account these
charges to arrive at the real cost. For example, the processing fee or prepayment
fee in the case of a personal loan will be different from that of a loan against
property. Here is a list of all charges that are levied either before the loan is
disbursed or through the course of the loan or when the loan is terminated:
Description of Charges:
 Processing fee
 Prepayment fee
 Charges for late payment (loans)
 Cheques bounce charges
 Duplicate statements charges
 Documentation charges

 Service tax
Processing fee:
Processing fee is the amount charged by banks to cover the cost of processing the
loan application. Processing fees vary from one bank to another. Some banks ask to pay
the processing fee upfront even before the loan is sanctioned. This is often charged when loan
application is submitted along with the supporting documents.
Pre-payment fee:
The pre-payment fee is the penalty paid by the borrower for foreclosing the loan before the
actual tenure. Pre-payment fees are levied as a percentage of the outstanding principle of loan
amount. The pre-payment fee varies from bank to bank.
Charges for late payment:
When the monthly instalment (EMI) towards repayment of a loan is delayed the bank collects
the instalment along with late payment charges. The late payment charge is also known as the
delayed payment charges or the overdue payment charges.
PERSONAL LOAN: ELIGIBILITY CRITERIA:
The person eligible for a personal loan are a salaried individual, self-employed individual
(own business), or a self-employed professional (doctor, lawyer, etc.). Other factors such as
income, age, residence, work experience, repayment capacity, past obligations and place of
work are also taken into account. A personal loan can be used for any purpose provided it is
legitimate; the end use of the lender need not be mentioned
PERSONAL LOAN: ELIGIBILITY CRITERIA: BASIC

 Personal Loan eligibility calculator
Calculate the personal loan amount likely to get from the lender.
 Personal Loan Eligibility Calculator for Self-Employed
If self-employed, this calculator will tell the amount of personal loan one likely to get.
 Personal Loan: Interest Rates:
Interest rates charged on personal loans vary across various banks. There are primarily
3 kinds of interest rates, most commonly offered by banks are:
 Fixed interest rate

 Floating interest rate
 Flat rate
Of the rates offered, flat rates can be considered the most expensive as in other cases; the
reducing balance method is used for calculation.
OBJECTIVES
 To understand the types of loans provided by Vijaya bank to its customers

 To study about personal loan disbursement by Vijaya bank
 To know about the short term and low cost personal loan
LIMITATIONS OF THE STUDY
 The study is restricted only to Vijaya bank

 The study is limited to quantitative data.
Maximum loan duration

it can be 1 to 5 years or 12 to 60 months. Shorter or longer tenures may be allowed on a case

by case basis, but it is rare.
Disbursal of loan amount

typically, it gets disbursed within 7 working days of the loan application to the lender. Once
approved, you may either receive an account payee cheque/draft equal to the loan amount or
get the money deposited automatically into your savings account electronically.
Is there a minimum loan amount

Yes, though the exact amount varies from one institution to another. Most lenders have set
their minimum personal loan principal amount at Rs 30,000.
KEY DOCUMENTS REQUIRED WHEN APPLYING FOR A LOAN
Though the documentation requirements vary from one financial institution to another, some
key documents you will have to provide with your personal loan application include:
*Income proof (salary slip for salaried/recent acknowledged ITR for self-employed)
*Address proof documents
*Identity proof documents
*Certified copies of degree/licence (in case of self-employed individuals)
UNIQUE FEATURES OF PERSONAL LOAN:

 Multi-Purpose: You can take a personal loan for a variety of purpose, may be it for
conducting a family wedding, supporting your child’s education, renovation your
personal or paying back an existing loan.
 No Collateral: if you are eligible, you can take a personal loan without putting up any
of your assets as collateral.
 Minimal paperwork: A personal loan requires very little paperwork when compared
to other types of loans.
 Easy repayment: Personal loans come with a repayment options such as post-dated
Cheques, ECS, online payment of EMI and so on.
 Affordable interest rates: Personal loan comes with competitive interest rates that
are easily affordable.
TYPES OF PERSONAL LOAN:
The Personal loans that are available in the market have different criteria to avail.
They also have number of segments that are categorized according to varied demand of the
market- different Personal loans for different requirements. The following is the list of
different types of Personal loans you can avail from the market:
Unsecured loans:
These loans don’t require collateral such as your home, car or other personal property.
Interest rates usually are higher for unsecured loans due to the additional risk to lenders. If
you default on an unsecured loan, the lender has no legal recourse such as foreclosing a home
loan or repossessing your vehicle for non-payment.
Secured loans:
A secured loan requires collateral that “secures” the loan. Examples of secured loans include
home mortgages, home equity loans, home equity lines of credit and vehicle loans. Financial
institutions may also offer secured personal loans. While secured loans have lower interest

rates, the Federal Trade Commission advises consumers to be aware of risks related to

lenders’ ability to take possession of collateral if a secured loan is not repaid according to
loan terms.
Fixed rate personal loans
The interest rate charged for these loans remains the same throughout the loan term.
Instalment loans typically carry fixed rates while lines of credit usually have variable rates.
Variable rate loans
Interest rates vary and change according to a schedule included in loan terms. Personal lines
of credit generally carry variable rates, but it’s important to verify whether interest rates are
fixed or variable for all types of personal loans. Variable rate loans may also carry “caps” that
limit how much rates can change at each adjustment period or over the life of a variable rate
loan.
Instalment loans
This type of loan is made for a specific amount and is repaid in equal periodic instalments
over an established repayment term. Instalment loans can be secured or unsecured; examples
include mortgages, home equity loans and unsecured personal loans. Instalment loans usually
offer fixed interest rates and are a good choice for a one-time expense such as debt
consolidation, paying off medical bills or funding a home improvement project.
Lines of credit
A line of credit allows you to use credit as needed up to the maximum credit line. For
example, if you have a $20,000 personal line of credit, you can use $10,000 for debt
consolidation and pay interest only on the amount you use. Line of credit options include

secured and unsecured options. If you don’t own a home or don’t want to borrow against
your home equity, you can consider a personal line of credit. A personal line of credit is a
good choice for paying recurring expenses, such as on-going medical treatments or college
tuition and expenses.
Credit cards, cash advances and balance transfers
Credit card accounts are types of personal loans repaid on a revolving basis; your payments
are determined by your credit card balance and interest rate, which can be fixed or variable.
In addition to using your credit card to pay for goods and services, you may also be able to
take cash advances against your available credit, but be careful. Cash advances may incur
higher interest rates and require payment of a cash advance fee assessed as a percentage of
the amount advanced. Another way to use a credit card for a personal loan is transferring
balances from high cost credit cards to a new, lower interest credit card. It’s important to
compare balance transfer options as interest rates, introductory rates and balance transfer fees
can vary.
Short term loans
These types of personal loans are made for a short term and carry high interest rates and fees.
Unsecured short term loans are also called payday loans and cash advance loans; some
lenders may also offer short term loans secured by your vehicle. These are called auto title
loans and while less expensive than unsecured short term loans; you run the risk of losing
your vehicle if you don’t repay the loan on time.
ELIGIBILITY CRITERIA FOR PERSONAL LOANS:
Eligibility:
Age: - Min: You should be at least 21 years of age.
Max: At the time of loan maturity, you should not exceed 65 years or your
retirement age, whichever is earlier.

Individuals:
You should have completed a minimum of 2 years of service (with a minimum of 1 year in
the current job.
BUSINESSPERSONS/SELF-EMPLOYED PROFESSIONALS:
You must have an established business or professional practice of not less than 3 years, with
a positive net worth and must have posted a net profit for the last 2 years.
Note: Minimum net take home salary of Rs. 6000/- p.m. for salaried employees or annual
income of not less than Rs. 1.20lakh for businesspersons/ self-employed professionals.
(Spouse/co-applicant’s income can be included in the income computation).
1. Individuals who are salaried or self-employed, professionals, businessmen are eligible.

Proprietary concerns, HUF, partnership firms or limited companies are not eligible for this
loan, where partners at their individual capacity are free to avail this loan.
2. As a customer to enhance the loan eligibility, all HFIs lay down conditions to who be co
applicants, al co owners to the property should necessarily be co-applicant. Income of the co-
owners can be clubbed together to get higher loan eligibility. Minors are not eligible to
become co owners, as also friend and relative’s only blood relatives are eligible to take a
property jointly.
3. The minimum age for the applicant and the co applicant to become eligible for the
commencement of the loan is 23 years, and co applicant can be of 18 years of age if their
income is not clubbed to calculate the loan eligibility.
4. The maximum age at the time of loan maturity for applicant or co-applicant is 60 years or
the retirement age whichever is earlier.
DOCUMENTS INVOLVED IN EVALUATION OF PERSONAL LOAN:

The documentation requirement for various categories of applicants depends on their status.
For this purpose all HFIs segregate their employees in different categories. They are:
 Salaried
 Professional or Businessman
The criteria of evaluation changes according to their status. The general documents, which
remain same for all the categories, are as follows:
Proof of age:
 Passport
 Voter ID
 Pan Card
 Ration Card
 Employers Identity Card
 School Leaving Certificate
 Birth Certificate
Copy of bank statement for the last six months:

 Bank statement for the last six months of all operating and salary accounts.
 Bank statements for the last six months of all current accounts, if self-employed
 Any other photocopies of investments held, if required by the HFIs
Copy of latest credit card statement.

Passport size photograph
Signature verification by your bankers.
Proof of residence:
 PAN Card
 Ration Card
 Passport

 Rent agreement, if any.
The documents required to be provided by the salaried class are as follows:
 Salary slips for the last one month.

 Appointment letter
 Salary certificate
 Retainer ship agreement, if appointed as consultant.
 From-16 issued by the employer in your name.
Proof of Employment:
The proof of employment is verified by the
 Identity card issued by the employer

 Visiting card.
Employer’s details (in case of private limited companies):
The employer’s details are to be provided in addition to the above documents for documents
for a private sector employee, they are:
 Name of promoters / Directors

 Background of promoters / Directors
 Number of employees
 List of branches / factories
 List of clients / Customers
 Turnover of your employer
 Annual reports of your employer for the last two to three years.

CHAPTER-02
REVIEW OF
LITERATURE

REVIEW OF LITERATURE
RESEARCH
The purpose of research design is both descriptive and explanatory research. In explanatory
research the purpose is to develop and evaluate casual theories. The probabilistic nature of
the causation in social science as opposed to deterministic causation was discussed.
Research design is not related to any particular method of collecting data or any
other type of data. Any research design can, principle use any type of data collection method
and use any of quantities or qualitative data. Research design refers to any of the structure of
and enquiry. It is a logical matter rather than a logistic one.
A number of studies related to performance of banking sector in India have been conducted.
Here, an attempt is being made to provide an overview of various aspects and issues of this
study through the review of existing literature. Some of the main studies selected for review
have been discussed below.
Bhatia (1978), in his study titled, “ Banking structure and performance – A case study of the
Indian Banking System” attempted to analyse the economic performance of Indian banking
system as reflected by its output, price and profitability during the period 1950-68. He found
that profit of the Indian banking system during the said period had an upward trend. The
study suggested deregulation of interest rates to enhance the profitability of financial
institutions and to ensure a competitive banking environment which would ultimately result
in better services.
Kulkarni (1979), in his study titled, “Development Responsibility and Profitability of

Banks” stressed upon social responsibilities of banking sector. He was of the view that
looking for profit maximization only was not true profitability of banks as social benefits
arising out of banks should try to make the basic banking business as successful as possible,
reduce cost, improve banking system and increase the overall profitability.
Kalyankar (1983), in his study titled, “wilful Default in Loans of Banks” examined the
trends in deposits, share capital, working capital, loans outstanding, advances, over dues and
recoveries at the district level financing institutes. Socioeconomic factors responsible in

projecting and promoting future development in the operations and approaches of the co-
operative credit organizations were also considered to examine the specific progress made by
central co-operative Bank.
Devadas (1987), in his book titled, “Corporate Banking and Economic Development” studied
the role of Co-operative Bank Ltd. in economy of the State. He found that apart from working
as a commercial bank it had to discharge three other functions, i.e., to finance primary credit
societies, to act as banking centre for primary societies, and to undertake supervision of
primary societies. He found that Bank had not been able to achieve much in these three fields
due to lack of adequate support from government of the state.
Ramachandran (1992),in his paper titled, “profit planning as a Management Tool for profit
Maximisation” tried to analyse profitability position of the banks. Increasing emphasis on
goals, increase in establishment cost, NPAs, amount locked in sick units, unfavourable
deposit mix, compliance to statutory requirements were some reasons, identified by him, for
declining profitability. He suggested the following measures to redress the said problem:
 Diversification of Business,
 Interest to be paid by RBI on CRR/SLR balances,
 Opting utilization of scare resources by asset management,
 Better funds management,
 Identification of loss centers,
 Better role of government, and
 Upgrading of skills and Mechanism.
Hundekar (1995) Suggested following points to improve the productivity of RRBs:

 Profit planning and cost control measures should be improved;
 Labor productivity improvement measures to be taken;
 To promote customer service by product development and diversification
strategies;
 Market development strategies for mobilizing more savings to be initiated;
 Management audit for controlling other administrative costs to be conducted;
 Streamline the recovery process; and
 The funds of banks should be effectively managed.

Murthi and Saraswati (1996), in their paper titled, “Reducing Overdues in credit Co-
Operatives: Some Alternatives” undertook a study to evaluate the Quantitative progress made
in respect of supply of Institutional Credit. Using the secondary data made available by RBI
in statistical statements relating to Co-Operative movement in India for a period of 6 years
from 1978 to 1983 and assessing the loaning policies of Girijan Co-Operative Corporation,
Visakhapatnam, the study concluded that the progress in respect of supply of credit was
phenomenal over the period of study but this progress pales into significance, if the
magnitude of overdues was considered. It pointed out that the most unnerving aspect of
institutional credit was the alarmingly high percentage of overdues, i.e., about 43% of loan
recoverable in the second-half of the 80s in the case of co-operatives.
Satyanaryane (1998),in his paper titled, “profitability and productivity Analysis of Banks
and Financial Institutions” developed a programme to measure the profitability of financial
sector institutions. He presented a simple but comprehensive framework of profitability
analysis of a bank. He had suggested a three-tier framework to analyse the profitability of a
bank or zone of a bank. The first part of the framework emphasized the computation of the
profit earned, the second indicated the cost and yield parameters of funds and the final part
depicted the return and appreciation to the shareholders of a bank.
Kapoor (1999), in recognition of the relevance and catalytic role of co-operative banks in the
development of agriculture and non-agriculture sector of Indian rural economy, Government
of India on 9th April 1999, appointed a task force under the chairmanship of Jagdish Kapoor
for revival of co-operative banks. The main objective of the committee was to review the
functioning of co-operative credit structure and suggest measures to make them member
driven professional business enterprises.
Satyasai and Badatya (2000) conducted a study regarding restructuring Rural Credit Co-
Operative Institutions. They analysed performance of rural co-operative credit institutions on
the basis of borrowings and lending operations, cost structure, financial viability, etc. and
found that co-operative system, in general, had failed to perform its functions properly. They
advised the co-operative banks to diversify their business and also to overcome internal and
external weaknesses.

Das (2001) in his study titled, “A Study on the Repayment Behaviour of Sample Borrowers”
of State Co-operative Bank Limited”, examined the repayment behaviour of loans, covering a
period of 1994-95 to 1998-99. On the basis of primary data collected, researchers concluded
that incidence of default was highest among borrowers for agriculture allied activities loans.
Agriculture loans, horticulture loans, small business loans and service sector loans were
ranked 2nd, 3rd, 4th and 5th in a descending order on the basis of percentage defaulters.
NABARD (2005)conducted a study “Development in Co-operative Banking”, to evaluate the

financial performance of 1872 urban co-operative banks and rural co-operative credit
institutions. The findings of the study revealed that in all financial institutions in the rural
sector percentage of NPAs in the substandard category declined, while it had increased in 37
doubtful categories. NABARD was worried about deterioration in asset quality of these
banks. However, all the institutions were able to meet the necessary provisioning
requirements.

CHAPTER-03
RESEARCH DESIGN

RESEARCH DESIGN
TITLE OF THE STUDY:
“The Research study entitled ‘A STUDY ON RISK ANALYSIS ON PERSONAL

LOANS’ at Vijaya Bank, Bangalore, the premier professional bank in Bangalore”.
STATEMENT OF THE PROBLEM
The project entitled “A Study on Risk Analysis in Personal Loans” helps to

understand how it affects the performance of a bank and about lending the Personal loan and
its risk towards the customers from bankers point of view which helps the bank to provide
better services to its customer and it also helps to know about how the banks play an
important role in accepting and lending various types of loans.
OBJECTIVES OF THE STUDY
1) To analyze present method or system for lending in banking system.

2) To study the features of Personal loans lent by Vijaya Bank.
3) To determine the parameters of the risk involved in Personal loan with reference to
Vijaya Bank.
4) To analyze whether the bank is aware about risk involved in Personal loans.
5) To identify the types of risk the bank has experienced relating to personal loans and to
know the reasons behind risk involved in Personal loans.
6) To know how the bank recovers the Personal loans sanctioned to the customer (i.e., in
case of default).
7) To study findings, suggestion and conclusion for reducing the risk in Personal loan in
Vijaya Bank.

NEED FOR THE STUDY
I have undertaken my study in the area of Personal loans in order to get the basic information
of banking operations especially on Personal loans. The idea of undertaking this project is to
understand the customer’s present expectation from Vijaya Bank and even to know their
perception about Personal loans in this competitive banking scenario. The study even takes
into consideration the various aspects of comparative analysis.
SCOPE OF THE STUDY
 As Personal loans lending activity has been changing and very competitive in nature
meeting the needs of the customers.
 In spite of competition from other banks, Vijaya Bank has been focused on lending
Personal loans.
 The present study is confined to Personal loan offered by the domestic operations of
Vijaya Bank.
 The study is also confined to the internal functional and operational aspects of the
lending process.
 The scope covers the area, method and policies adopted by Vijaya Bank.
RESEARCH METHODOLOGY
The data and the information presented here have been collected mainly from two
kinds of resources:
Primary Data:
 Direct and oral interaction with the bank officials, particularly the branch manager.
Secondary Data:
Several secondary resources have been referred for collecting information and literature on
the subject that includes:
 The training and guidance material supplied to staff of the branch.

 Online content of Vijaya Bank.
 The material supplied by the faculty guide.
 Several websites on Personal loans.
 Daily newspapers like Economic Times of India.
 Banking books relating to loans.
 Banking Journals.
 Previous bank records.
TOOLS AND TECHNOLOGIES USED:
Statistical Techniques:
 Percentages
 Averages and
 Tools like tables, bar charts and pie charts.
Hardware and Software Technologies:
 Home PC with internet access.

 World Wide Web or internet.
 MS word and Excel 2007.
SAMPLING TECHNIQUE
The significant component of a research study is the sampling plan. Sample is the
fraction of the production. Sampling is a technique or method or selection of samples. The
researcher has adopted the most appropriate technique in a domestic research that is simple
random sampling.

Random sampling is a good technique when there are comprehensive list of target
population.
Sampling Size: Sample simplifies our work and gives suitable information to us in making
decision. It provides accurate and adequate data. The sample size adopted is 50 respondents.
Sample Procedure: Sample procedures through the structured questionnaire
Sampling Unit: The sampling unit of the project report in Vijaya Bank.
PLAN OF ANALYSIS
The primary data collected from respondents were evaluated manually. Firstly, data
was analysed from each area and finally a consolidated analysis was made, percentage was
calculated and used to estimate the proportion of the response for different aspect under
consideration.
LIMITATIONS OF THE STUDY
 In case of interaction with representative of a particular bank it happens many a time

that the representative cannot disclose all the data because of certain reasons like
banks privacy policy etc., thus getting clear picture about the service provided is not
possible.
 Due to paucity of time, only important factors have been analyzed and discussed.
 Lack of data was also another limitation of the study as some of banks do not have
proper data on topic.
 The study does not give full details about home loans as the information is collected
from few questionnaires.
 The period available was very short.

CHAPTER SCHEME OF THE STUDY
The project report, the study on “Risk Analysis on Personal Loans” with reference to
Vijaya Bank. Has been designed into five chapters.
Chapter I – “Introduction”
It explains the introduction to banking industry, origin of banking industry, functions of

banking, Personal loans and its theoretical background of the various aspects of the selected
problem.
Chapter II- “Research Design”
It explains the Title of the study, statement of the problem, objectives of the study, scope of
the study, plan of Analysis, study period, tools for collection of data, limitations of the study
and chapter scheme.
Chapter III – “Bank Profile”
The history, management, policies, vision, mission, purpose and other details of the
bank is mentioned in this chapter.
Chapter –IV – “Data Analysis and Interpretation”
This chapter explains the analysis and interpretations of data being tabulated and analyzed
through charts with reference to Vijaya Bank.
Chapter –V- “Summary, Findings and conclusions”
This chapter provides an in-depth knowledge on the outcome of the study, and the
drawn conclusions are on the basis of the facts been found from the study.

CHAPTER-04
COMPANY PROFILE

COMPANY PROFILE
LOGO
Industry: Financial commercial banks.
Founded: 23rd Oct 1931, 87 years ago at Mangalore, India.
Founder: Sri Attavara Balakrishna Shetty
Attavara Balakrishna Shetty, Founder Chairman of Vijaya Bank
R.A.SANKARANARAYANAN
Managing Director and Chief Executive Officer

Key people: R A Sankara Narayanan
Headquarters: Bangalore, Karnataka, India
Owner: Government of India
Number of Employees: 15679[2016-2017]
Products: Consumer banking, corporate banking, finance and

insurance, investment banking, mortgage loans, private banking, wealth
management.
CONSUMER BANKING
CORPORATE BANKING

FINANCE AND INSURANCE
INVESTMENT BANKING
MORTGAGE LOAN

WEALTH MANAGEMENT
Revenue: Increase ₹12,379 crore (US$1.9 billion) (2017)
Operating income: Increase ₹2,421 crore (US$380 million) (2017)
Net income: Increase ₹750.48 crore (US$120 million) (2017)
Total assets: Increase₹154,881.57 crore (US$24 billion) (2017)
Total Equity: Increase 932.56 crore (us$140 million) (2016)
Capital ratio: 12.73% (2017)
Vijaya Bank is a Fastest Growing public sector bank with its corporate office
in Bangalore, Karnataka, India. It is one of the nationalized banks in India. The
bank offers a wide range of financial products and services to customers
through its various delivery channels. The bank has a network of 2031
branches (as of March 2017) throughout the country and over 4000 customer
touch points including 2001 ATMs.
HISTORY
Vijaya Bank was established by a group of farmers led by Shri. Attavara on 23

October 1931 in Mangalore in Dakshina Kannada District of Karnataka State.
Since it was established on the auspicious Vijayadashami Day, it was named
'Vijaya Bank'.

During the economic chaos created out of the Great Depression of 1927–30,
Shri AB Shetty approached leading Bunt personalities to start a bank with the
objective of extending credit facilities at a lower rate of interest to enable the
farmers to cultivate their lands and prevent them from falling into the clutches
of money lenders. Accordingly, Shri AB Shetty involved 14 Bunts and
established Vijaya Bank on 23 October 1931. In the beginning the bank had an
authorized capital of Rs. 5 lakh and an issued capital of Rs. 2 lakh. The paid up
capital was Rs. 8670.
YEAR OF EVENTS
2005
-Vijaya Bank ties up with TAFE
-Vijaya Bank sets up new branches
2007
- Vijaya Bank has informed that Shri G B Singh has been nominated as
GOI Nominee Director of the Bank vice Shri Atal Kumar Rai, vide
Letter dated August 20, 2007 received from Government of India,
Ministry of Finance, Department of Financial Services with immediate
Effect.
2008
- Vijaya Bank inked a memorandum of understanding with credit rating
Agency, Crisis, for rating its corporate customers.
- Vijaya Bank has inked a pact with Credit Analysis & Research Ltd
(CARE), one of the RBI accredited rating agency, to provide bank loan
Ratings to its corporate clients at a concessional fee.

-Vijaya Bank has informed that Shri. Sridhar Cherukuri has been
Nominated as part-time non-official Director of the Bank with
Immediate effect, vide letter dated July 10, 2008 received from
Government of India, Ministry of Finance, Department of Financial
Services.
-Vijaya Bank has informed that Shri. Ranjan Shetty has been nominated
As Officer Employee Director of the Bank with immediate effect, vide
Letter dated September 09, 2008 received from Government of India,
Ministry of Finance, Department of Financial Services.
2009
- Vijaya bank has plans to issue 1,000 biometric smart cards to

Account-holders residing in villages by the end of this fiscal.
- Vijaya Bank forged an alliance with VE Commercial Vehicles, a
Leading auto brand, to become a preferred financier for the latter's
Commercial vehicles.
2013
- The Company has recommended a dividend of Rs. 2.50 per Share on
Banks Equity Share Capital and at 8.50% p.a.
- B.S. Rama Rao has been appointed as Executive Director of the
Company.
2014
- Mr. V. Kannan, Executive Director, Oriental Bank of Commerce as

Chairman & Managing Director, of the Bank.
- The Bank has recommended a Final Dividend of Re. 1.00/- per Share
- Mr. Prakash Chandra Nalwaya has been appointed as, Non Official
Director of the Bank.

- Mr.Sanjay Kumar has been nominated as Government Nominee Director
On the Board of the Bank
GROWTH AND NATIONALISATION

The bank grew steadily since its inception. The bank became a scheduled bank
in 1958. . Under the chairmanship of Shri. Mulki Sunder Ram Shetty, Vijaya
Bank steadily grew into a large All India Bank with 9 smaller banks merging
with it during 1963–1968. In 1965, the bank registered its own logo. The bank's
head office was shifted to Bangalore on November 11, 1969. The bank was
nationalized on 15 April 1980. At the time of nationalization, the bank had 571
branches, with a total business of Rs. 605.95 crore and staff strength of 9059.
The present head office building of the Bank at Mahatma Gandhi Road,
Bangalore was inaugurated on 26 October 1984
BUSINESS OPERATIONS
The bank's total business is over Rs.2, 29,000 crore comprising deposits of Rs.
1, 33,012 crore and advances of Rs. 96,821 crore as at 31 March 2017.
Basically being a retail bank, its top line growth owes quite a lot to the retail
segments. Retail advances of the bank constitute 30% of the gross credit.
NETWORK AND DISTRIBUTION

As on 31 March 2017, the bank had a wide branch network of 2031 branches.
Improving the presence and performance under alternative delivery channels,
especially internet and mobile banking channel are key focus areas of the bank.
The bank has 2001 ATMs as on 31 March 2017. Vijaya Bank provides access

to over 2.21 lakh ATMs connected under National Financial Switch across the
country.
FINANCIAL INCLUSION INITIATIVES

The Bank has been actively pursuing the agenda of financial inclusion. The
bank's initiatives in this direction aim at financial empowerment and reaching
banking services to the rural masses. The Bank has been opening Basic Savings
Bank Accounts under Pradhan Mantri Jan Dhan Yojana and providing all the
account holders with Rupay debit cards. The bank participates in promoting
social security schemes such as Pradhan Mantri Suraksha Bima Yojana,
Pradhan Mantri Jeevan Jyoti Bima Yojana and Atal Pension Yojana. The bank
is also implementing the modified Direct Benefit Transfer (DBT) programme
of the Government of India.
CORPORATE SOCIAL RESPONSIBILITY

The bank has provided sanitation facilities to 56 govt. schools mostly in rural
areas. The bank has established 32 rural health centers where patients are
provided primary healthcare and medicine free of cost.
UNIQUE CSR ACTIVITY: ADOPTION OF GIRL CHILD

As part of its corporate social Responsibility’ the Bank has devised a unique
programme to adopt girl children. The policy of Girl Child Adoption was
introduced by the bank in 2011 under which the bank adopts girl children from
SC/ ST/ OBC/ economically weaker sections / backward areas/ poor families
from the age of 5 years onwards to promote girl child education, mostly from

rural and backward areas. The bank has adopted 1163 girl children all over the
country.
INITIATIVES
FREEBUZZ': missed call services to enable customers to know their account
balance easily
V-GYANSAGAR: a unique initiative taken by Vijaya Bank to impart financial
literacy to public. It is Android based mobile application that enables its
subscribers to receive regular updates on banking and financial news. It
provides explanation of banking terminologies.
V-ABACUS: This initiative enables the public to open a bank account by
giving a missed call. Tablet banking facility has been implemented.
V-QUICKPAY: a unique next generation bill payment service where bill
payment is made by scanning the QR code on the bill generated by the
merchant. There is no need to swipe credit or debit cards.
V-FEE HIVE: The bank's in-house software development team has developed
an application for collection of fees by educational institutions, collection of
monthly maintenance charges by housing societies, collection of fees by clubs.
This application was implemented in various prestigious institutions like IIM-

Kozhikode, Mount Carmel College -Bangalore, Army Public School-Delhi,
MSRIT Bangalore and Vasari Pearl Apartment.
V-EWALLET: a unique secured small payment collection system designed
using UNIQUE-pull technology.
UPI: Vijaya Bank has recently rolled out Unified Payment Interface (UPI)
which is introduced by the RBI.

VIJAYA BANK SECURE INTERNET PAYMENT
Verified by Visa (VBV) is an easy to use, secured online payment service

from Vijaya Bank that lets you shop securely online with your existing Vijaya
Bank Visa Credit/Debit Card. This service through a simple checkout process,
confirms your identity when you make purchases on the Internet.
MASTERCARD® SECURECODE™
It is an easy to use, secured online payment service from Vijaya Bank that lets
you shop securely online with your existing Vijaya Bank MasterCard Credit
Card. This service through a simple checkout process, confirms your identity
when you make purchases on the Internet. Through a personal assurance
message displayed on the screen and which is shared only between you and the
Vijaya Bank, the authenticity of the page requesting your authentication is
assured. We suggest you to keep changing your password at regular intervals
for increased safety.
DIRECTORS’ REPORT 2016-17
The Board of Directors has pleasure in presenting the 37th Annual Report of
the Bank along with the audited Balance Sheet and Profit and Loss Account for
the year ended March 31, 2017.
PERFORMANCE HIGHLIGHTS OF THE BANK DURING THE YEAR

2016-17
CAPITAL, RESERVE & NET WORTH

The Authorized Capital of the Bank at present is `3000 Crore divided into 300
Crore shares of `10 each. At present, Government of India holds 70.33%
Equity Share Capital of the Bank. The total paid up (equity share) capital of the
Bank is ` 998.84 Crore. In March 2017 the Bank has allotted 6, 62, 85,025
equity shares of ` 10 each to GOI at a premium of ` 23.19 per share on
preferential basis with total inflow of ` 220 Crore. For the year ended
31.03.2017, the total Reserves and Surplus is ` 7152.64 Crore. The Net Worth
of the Bank increased from ` 6550.50 Crore to ` 6976.90 Crore this year.
WORKING RESULTS
Net profit for the year 2016-17 increased from ` 382 Crore as on 31.03.2016 to
` 750 Crore as on 31.03.2017, by registering a Y-o-Y growth rate of 96.56%.
The Operating Profit of the Bank has increased from ` 1549 Crore as on
31.03.2016 to ` 2421 Crore as on 31.03.2017, there by recording a growth rate
of 56.32%.
The Total Deposits of the Bank grew from ` 125441 Crore as on 31.03.2016 to
`133012 Crore as on 31.03.2017. The Retail Term Deposits of the Bank
increased from ` 44269 Crore as on 31.03.2016 to ` 47517 Crore as on
31.03.2017. The Gross Advances of the Bank increased from ` 90,765 Crore as
on 31.03.2016 to ` 96821 Crore as on 31.03.2017. The Retail Advance of the
Bank grew from ` 23,593 Crore as on 31.03.2016 to ` 29335 Crore as on
31.03.2017. The Total Business of the Bank grew from ` 2, 16,206 Crore as on
31.03.2016 to ` 2, 29,833 Crore as on 31.03.2017. The cost of deposits
decreased from 7.34% in 2015- 16 to 6.50% in 2016-17. The Net Interest
Margin of the Bank improved from 2.27% as on 31.03.2016 to 2.77% as on
31.03.2017.

THE TREND IN FINANCIAL RESULTS OF THE BANK IS AS UNDER. (Rs. in

crore)
Sl. Item 2017-18 2018-19 Annual
No. increase
1 Interest Income 12084 12379 2.45%
2 Interest Expenditure 9323 8873 -4.82%
3 Net Interest Income(1-2) 2761 3506 27.01%
4 Non-interest income 874 1651 88.96%
I. Profit on sale of 182 769 321.57%
investments
Ii. Other non-interest 691 882 27.60%
income
5 Net Total Income 3635 5158 41.90%
(3+4)
6 Operating expense 2086 2737 31.20%
I. Staff Expenses 1247 1748 40.17%
ii. Other operating 839 989 17.86%
expenses
7 Operating profit 1549 2421 56.32%
8 Operating profit 1366 1652 20.91%
(excl. Treasury profit)
9 Provisions and 1167 1671 43.15%
Contingencies
10 Net Profit 382 750 96.56%
IMPORTANT PROFITABILITY RATIOS

Sl ITEMS 2017-18 2018-19
No. (%) (%)
1 Yield on Funds 8.77 8.14

2 Cost of Funds 6.77 5.83
3 Interest spread (1-2) 2.00 2.31
4 Yield on Advances 10.52 9.89
5 Cost of Deposits 7.34 6.50
6 Yield on Investments
(Excluding RIDF) 7.60 7.65
Excluding Trading Profit 8.07 9.32
Including Trading Profit
7 Other Operating Expenses 0.61 0.65

To Average Working Funds
8 Cost – Income ratio 57.39 53.06
9 Establishment cost to average 0.91 1.15

working Funds
The Listing Page of Vijaya Bank presents the Incorporation Date, Public Issue
Date, Book Closure dates, Face Value, Key Listing information, Indices it is a
part of, and the Exchanges where the company is listed.
KEY DATES
 Incorporation Date-01/05/1931
 Public Issue Date-27/11/2000
 Year Ending Month- March
 AGM Month -June
 Book Closure Start Date-17/06/2017

 Book Closure End Date-23/06/2017

 Face Value-10.0
 Market Lot Of Equity Shares-1
 BSE Code-532401
 BSE Group- A
THE COMPANY FORMS A PART OF FOLLOWING INDICES –

 Nifty 500
 BSE 500
LISTED ON
 Cochin Stock Exchange Ltd.
 MCX Stock Exchange
 National Stock Exchange of India Ltd.
 The Stock Exchange, Mumbai
You can view the entire product mix with sales quantity and value along
with percentage contribution from each individual product for Vijaya
Bank.
Product Units Installed Productio Sales Sales

Name Capacity n Quantity Value
Quantity
Interest and NA 0.00 0.00 0.00 8847.4623
discount on
advance and
bills
Income NA 0.00 0.00 0.00 2955.2189
from
Investment

Interest NA 0.00 0.00 0.00 280.6604

Interest on NA 0.00 0.00 0.00 0.2374
balance with
RBI and
other
interbank
funds

CHAPTER-05
DATA ANALYSIS AND

INTERPRETATION
DATA ANALYSIS AND INTERPRETATION

Data analysis is a powerful analytical tool for measuring a specific function or objective. The
data analysis concentrates on the inter-relationship among the variables appearing in the
tabular and graphical form.
TABLE- 5.1
SHOWING SINCE WHEN YOU HAVE BEEN THE ACCOUNT HOLDER OF

VIJAYA BANK.
Options Respondents Percentage (%)

Since 1 year 10 20%
1 years to 3 years 25 50%
3 years to 5 years 15 30%
Total 50 100%
(SOURCE: PRIMARY DATA)
ANALYSIS: From the above table we can know from since when the customer are been
the account holder of this bank. To analyse the above statement we have taken 50
respondents. Among that 10 respondents are the account holders since from 1 year, 25
respondents are the account holders from 1 year to 3 years, and 15 respondents are the
account holders from 3 years to 5 years.
GRAPH-5.1
SHOWING SINCE WHEN YOU HAVE BEEN THE ACCOUNT HOLDER OF

VIJAYA BANK.

1. SINCE WHEN YOU HAVE BEEN THE ACCOUNT HOLDER OF VIJAYA

BANK.
20%
30%
Since 1 year
1 years to 3 years
3 years to 5 years
50%
INTERPRETATION: From the above graph we can know from since when the
customers are been the account holder of this bank. To analyse the above statement we have
taken 50 respondents. Among the 100% respondents 20% respondents are the account holder
since from 1 year, 50% respondents are the account holders from 1 year to 3 years, and 30%
respondents are account holders from 3 years to 5 years.
TABLE-5.2
TABLE SHOWING FOR WHICH LOAN THE BANK WILL GIVE HIGH
PRIORITY.
SL.NO PARTICULARS RANKING

1 PERSONAL LOAN 1
2 MORTGAGE LOAN 2

3 VEHICLE LOAN 3
4 OTHER LOAN 4
ANALYSIS: From the above table shows the types of various loans sanctioned by the banks.
Bank is sanctioning 4 types of loan namely personal loan, Mortgage loan, Vehicle loan, and
other loan. It has been observed that the bank is giving highest priority to personal loan i.e.
ranking 1, Mortgage loan ranking 2, Vehicle loan ranking 3 and other loan ranking 4.
GRAPH -5.2
GRAPH SHOWING FOR WHICH LOAN THE BANK WILL GIVE HIGH
PRIORITY.
2. HIGH LOAN PRIORITY.
10%
20% 40%
30%
INTERPRETATION: It shows that the bank is giving more preference to personal loan
where it seems that bank earning high interest for personal loan which is leading to growth of
the bank. Other than personal loan bank also encourages other loans which helps in
increasing the growth of the bank.
TABLE-5.3

TABLE SHOWING VARIOUS REASONS FOR SANCTIONING OF PERSONAL

LOANS AT VIJAYA BANK.
SL.NO PARTICULARS NO. OF PERCENTAGE

RESPONDENTS ( %)
1 EASY PROCESSING 20 40%
2 INTEREST RATES 10 20%
3 GOOD SERVICE 5 10%
4 EASY TO RECOVER 15 30%
TOTAL 50 100%
ANALYSIS: From the above table shown reasons for sanctioning of personal loans at
VIJAYA BANK and customers prefer towards Vijaya Bank is that 40% of respondents prefer
easy processing, 20% preferred interest rates, 10% good service and 30% preferred easy
recover.
GRAPH-5.3
GRAPH SHOWING VARIOUS REASONS FOR SANCTION OF PERSONAL

LOANS.

3. REASONS FOR SANCTION OF PERSONAL LOANS.
30%
40%
10%
20%
INTERPRETATION: From the above graph shows that the bank is providing more
personal loan with 40% easy processing, 20% interest rates, 10% good service and 30% easy
recover to the customers.
TABLE-5.4
TABLE INDICATING THE TYPE OF PROFESSION THE BANK IS SANCTIONING

PERSONAL LOAN AND TO WHICH PROFESSION WILL THE BANK GIVE HIGH
PRIORITY.
SL.NO TYPE OF CUSTOMER SANCTIONING LOAN RANKING

1 GOVT. EMPLOYEE YES 1

2 PRIVATE EMPLOYEE YES 3
3 BUSINESSMAN YES 2
ANALYSIS: The above table shows that bank is giving much preference to Govt. employee
ranking 1; next preference is given to the Businessman ranking 2, and then to Private
employee ranking 3.
GRAPH-5.4
GRAPHINDICATING THE TYPE OF PROFESSION THE BANK IS SANCTIONING

PERSONAL LOAN AND TO WHICH PROFESSION WILL THE BANK GIVE HIGH
PRIORITY.
4. HIGH PROFESSION PRIORITY IN SANCTIONING PERSONAL LOAN.
33%
50%
17%

INTERPRETATION: From the above graph it is known that bank is providing loan to the
most preferred segment of profession i.e., is the government employee and businessman as
they have a regular income and will not cause problem for the repayment of loan amount. It
seems that Vijaya Bank. is interested to proportion loan to the preferred in order to avoid risk
in future.
TABLE-5.5
TABLE SHOWING AWARENESS ABOUT THE RISK INVOLVED IN THE

PERSONAL LOANS.
SL.NO PARTICULARS NO. OF RESPONDENTS PERCENTAGE

(%)
1 YES 50 100%
2 NO 0 0
TOTAL 50 100%
ANALYSIS: From the above table we come to know all the 100% respondents agree that
the bank is not sanctioning different interest rates; it is sanctioning the personal loan at the
same rate of interest to all customers.
GRAPH-5.5
GRAPH SHOWING WHETHER BANK FOLLOW DIFFERENTIALPERSONAL

LOAN RATE FOR DIFFERENT CUSTOMERS.

5. DIFFERENTIAL PERSONAL LOAN RATE FOR DIFFERENT CUSTOMERS

Yes No
100%
INTERPRETATION: From the above graph it shows that Vijaya Bank. Is following same
interest rates structure for different customers but depending upon the amount sanctioned to
the borrower.
TABLE-5.6
SHOWING EFFECTIVENESS OF VIJAYA BANK FOLLOWING THE SYSTEM.
EFFECTIVENESS OF SSCC BANK NO. OF RESPONDENTS

HIGHLY SATISFIED 7
SATISFIED 23
NEUTRAL 11
DISSATISFIED 5
HIGHLY DISSATISFIED 4

ANALYSIS: From the above table we come to know all the 100% respondents agree that
the Vijaya Bank performance is effective. From the above data it can be analysed.
GRAPH-5.6
GRAPH SHOWING EFFECTIVENESS OF VIJAYA BANK FOLLOWING THE

SYSTEM.
6. SHOWING EFFECTIVENESS OF VIJAYA BANK.
8%
14%
10%
HIGHLY SATISFIED
SATISFIED
NEUTRAL
DISSATISFIED
HIGHLY DISSATISFIED
22%
46%
INTERPRETATION: From the above graph it can be said that 14% of the total respondents
have strongly agreed the Vijaya bank’s performance and its operation is effective while 46%
of the respondents have agreed that bank’s performance is effective. 22% of the respondents
are stood neutral, 15% of the respondents have said that the performance of the bank is not so
effective while the remaining 8% of the respondents have highly dissatisfied with
effectiveness of bank.
TABLE-5.7
TABLE SHOWING VIJAYA BANK HAS MADE SERVICES MORE FLEXIBLE.

BANK HAS MADE SERVICES MORE NO. OF RESPONDENTS

FLEXIBLE
STRONGLY AGREE 17
AGREE 33
NEUTRAL 0
DISAGREE 0
STRONGLY DISAGREE 0
ANALYSIS: From the above table it says that Vijaya Bank service is more flexible
because it allows transacting any type of transaction as specified. From the above table we
come to know all the 100% respondents agree that the bank has made services more flexible
compare to the other banks. Hence to measure how flexible it had collected respondents of
the customers.
GRAPH-5.7
GRAPH SHOWING VIJAYA BANK HAS MADE SERVICES MORE FLEXIBLE.

7. GRAPH SHOWING FLEXIBLE SERVICES IN BANK
34%
STRONGLY AGREE
AGREE
NEUTRAL
DISAGREE
STRONGLY DISAGREE
66%
INTERPRETATION: From the above graph shows that the bank is more flexible out of this
100% respondents 34% of the total respondents have strongly agreed while the remaining
66% of the respondents have also agreed that Vijaya Bank., is more flexible to use services.
None of the respondents have said or stated that it is not flexible and hence it is effective as
far as flexibility is concerned.
TABLE-5.8
TABLE SHOWING PAPER FORMALITIES OF PERSONAL LOAN AT VIJAYA

BANK

PAPER FORMALITIES OF VIJAYA NO. OF RESPONDENTS

BANK.
HIGHLY SATISFIED 10
SATISFIED 28
MANAGEABLE 12
TOO MUCH 0
ANALYSIS: From the above table it is observed that paper formalities of the bank are
100% in sanction of personal loans to its customers which is good for the purpose of the
safety of the bank. From the above table we come to know that the paper formalities are
satisfied.
GRAPH-5.8
GRAPH SHOWING PAPER FORMALITIES OF PERSONAL LOAN AT VIJAYA

BANK

8. GRAPH SHOWING PAPER FORMALITIES OF VIJAYA BANK
24% 20%
HIGHLY SATISFIED
SATISFIED
MANAGEABLE
TOO MUCH
56%
INTERPRETATION: From the graph it shows that paper formalities of the bank is flexible
out of this 100 respondents 20% of the respondents are highly satisfied and the remaining
56% of the respondents have satisfied and the remaining 24% of the respondents are
manageable. None of the respondents have said paper formalities are too much.
TABLE-5.9
TABLE SHOWING CONVENIENT INTEREST METHOD IN BANK BASED ON

CUSTOMERS.
CONVENIENT INTEREST METHOD IN NO. OF RESPONDENTS

BANK BASED ON CUSTOMERS
STRONGLY AGREE 6
AGREE 25
NEUTRAL 9
DISAGREE 10
STRONGLY DISAGREE 0

ANALYSIS: From the above table with reference to the project the bank is providing
convenient interest rates to its customers for the personal loan. The 100% respondents agree
that the bank is providing convenient interest rates to the customers of the bank.
GRAPH-5.9
GRAPH SHOWING CONVENIENT INTEREST METHOD IN BANK BASED ON

CUSTOMERS.
9. GRAPH SHOWING CONVENIENT INTEREST METHOD IN BANK.
12%
20%
STRONGLY AGREE
AGREE
NEUTRAL
DISAGREE
STRONGLY DISAGREE
18%
50%
INTERPRETATION: From the graph it shows that the bank is providing convenient
interest rates out of these 100 respondents 12% strongly agreed and the 50% customers agree
to the interest and 18% are neutral and the remaining 20% of the respondents are disagreed to
the convenient interest method based on customers.
TABLE-5.10

TABLE SHOWING INTRODUCTION OF VIJAYA BANK. HAS MADE

CUSTOMERS MORE RELIABLE.
INTRODUCTION OF VIJAYA BANK. NO. OF RESPONDENTS

HAS MADE CUSTOMERS RELIABLE
STRONGLY AGREE 20
AGREE 30
NEUTRAL 0
DISAGREE 0
STRONGLY DISAGREE 0
ANALYSIS: As the banks are introducing personal loan for the customers benefit and its
smooth operation, the customers should rely on the changes made in the system only then it
has a value. Hence the customer reliability is considered.
GRAPH-5.10
GRAPH SHOWING INTRODUCTION OF VIJAYA BANK. HAS MADE

CUSTOMERS MORE RELIABLE.

10. MADE CUSTOMERS MORE RELIABLE.
STRONGLY AGREE
40% AGREE
NEUTRAL
DISAGREE
STRONGLY DISAGREE
60%
INTERPRETATION: From the graph out of 100% respondents, 60% respondents have
strongly agreed while remaining 40% respondents have agreed towards the reliability of the
bank’s personal loan and remaining are not considered.
TABLE-5.11
TABLE SHOWING WHETHER THE BANK TAKES ACTION AGAINST THE

DEFAULTERS TO RECOVERY WITH PERSONAL LOAN.
SL.NO PARTICULARS NO. OF RESPONDENTS PERCENTAGE

1 YES 50 100%
2 NO 0 0%
TOTAL 50 100%
ANALYSIS: The above table shows that all the 100% respondents agree that the bank
takes action against the defaulters to recovery of the personal loan.

GRAPH-5.11
GRAPH SHOWING WHETHER THE BANK TAKES ACTION AGAINST THE

DEFAULTERS TO RECOVERY WITH PERSONAL LOAN.
11. BANK TAKES ACTION AGAINST DEFAULTERS TO RECOVERY LOAN.
YES
NO
100%
INTERPRETATION: From the above graph it is known that the bank takes action against
the defaulters to recover the personal loan and it is notified that the bank has appointed
authorized offer and assistant authorized officer to take the action on such defaulters.
TABLE-5.12

TABLE SHOWING TYPE OF ACCOUNT HOLDING.
TYPE OF ACCOUNT NO. OF RESPONDENTS

SAVINGS ACCOUNT 31
CURRENT ACCOUNT 12
TERM OR FIXED DEPOSIT ACCOUNT 4
OTHER ACCOUNT 3
ANALYSIS: The above table shows all the 100% respondents of the account holders with
different accounts out of which majority of the customers are holding savings account only
few customers are holding various accounts.
GRAPH-5.12
GRAPH SHOWING TYPE OF ACCOUNT HOLDING.
12. SHOWING TYPE OF ACCOUNT HOLDING.
8%
6%
SAVINGS ACCOUNT
CURRENT ACCOUNT
24% TERM OR FIXED DEPOSIT
ACCOUNT
OTHER ACCOUNT
62%
INTERPRETATION: From thegraph out of 100%respondent’s majority of the

customers are having savings account i.e., 62% respondents out of 100% respondents
are having savings bank account. There are 24% customers who are holding current

account. Thus it can be said that these customers might be business people. 8%
respondents are having term deposits account, which means that these customers have
opened an account for the purpose of fixed deposits. Remaining 6% respondents are
having other accounts.
TABLE-5.13
TABLE SHOWING CUSTOMERS HOLDING ACCOUNT WITH OTHER BANKS.
CUSTOMERS HOLDING ACCOUNT NO. OF RESPONDENTS

WITH OTHER BANKS.
YES 37
NO 13
(SOURCE PRIMARY DATA)
ANALYSIS: From the above table it is understood that 37 respondents out of 50

respondents have account in other banks along with the Vijaya Bank. It means customers also
have account in different banks.
GRAPH-5.13

GRAPH SHOWING CUSTOMERS HOLDING ACCOUNT WITH OTHER BANKS.
13. CUSTOMERS HOLDING ACCOUNT WITH OTHER BANKS.
26%
YES
NO
74%
INTERPRETATION: It is understood from the above graph that out of 100% respondents
74% of the customers are transacting in more than one bank while remaining 26% of the
customers are having account only in Vijaya bank.
TABLE-5.14
TABLE SHOWING BANK EMPLOYEES RESPONSE TOWARDS CUSTOMERS.

BANK EMPLOYEES RESPONSE NO. OF RESPONDENTS

TOWARDS CUSTOMERS
SATISFIED 50
NOT SATISFIED 0
ANALYSIS: From the above table out of 50 respondents, using Bank account in Vijaya
Bank all the 50 respondents have got satisfied with using the Vijaya Bank service due to the
banker response.
GRAPH-5.14
GRAPH SHOWING BANK EMPLOYEES RESPONSE TOWARDS CUSTOMERS.
14. BANK EMPLOYEES RESPONSE TOWARDS CUSTOMERS.
SATISFIED
NOT SATISFIED
100%
INTERPRETATION: From the above graph out of the 50 respondents, all the 50 customers
are using the Vijaya Bank service. Thus it can be identified that Banker response to

customers has effectiveness. Thus bank employee’s response towards customers is

satisfactory.
TABLE-5.15
TABLE SHOWING BANK AGREES FOR AUCTION TO RECOVER THE NON-

PAYMENT OF LOAN.
BANK AGREE FOR AUCTION TO NO. OF RESPONDENTS

RECOVER THE NON-PAYMENT OF
LOAN
YES 40
NO 10
ANALYSIS: From the above table shown bank agree for auction to recover the non-
payment of loan in Vijaya Bank Out of the 50 respondents 40 respondents agree Yes and the
remaining 10 respondents agree No the bank does not agree for auction.
GRAPH-5.15
GRAPH SHOWING BANK AGREES FOR AUCTION TO RECOVER THE NON-

PAYMENT OF LOAN.
15. SHOWING BANK AGREES FOR AUCTION TO RECOVER THE NON-

PAYMENT OF LOAN.
20%
YES
NO
80%
INTERPRETATION: From the above graph show out the 100% respondents 80% of the
bank customers agrees that Vijaya Bank agrees for auction for recover of the non-payment
loan and remaining 20% bank customers does not agrees that the bank takes action for the
recovery of the loan
TABLE-5.16
TABLE SHOWING WHETHER OTHER BANKS ALSO FOLLOW “PERSONAL

LOAN SYSTEM” IN THEIR BANK.

WHETHER OTHER BANKS ALSO NO. OF RESPONDENTS

FOLLOW “PERSONAL LOAN SYSTEM”
IN THEIR BANK.
YES 50
NO 0
ANALYSIS: From the above table show in connection with the above question that
customers are holding account with other banks, it is said that out of 50 respondents have said
that personal loan system is also in existence in other banks.
GRAPH-5.16
GRAPH SHOWING WHETHER OTHER BANKS ALSO FOLLOW “PERSONAL

LOAN SYSTEM” IN THEIR BANK.

16. SHOWING WHETHER OTHER BANKS ALSO FOLLOW "PERSONAL

LOAN SYSTEM" IN THEIR BANK.
YES
NO
100%
INTERPRETATION: In the above graph shown above customers is holding account with
other banks, it is said that 100% of the total respondents have said that personal loan system
is also in existence in other bank also. So it can be concluded from this analysis that all the
banks are using personal loan service today this may be due to the developing technology.
TABLE-5.17
TABLE SHOWING PERSONAL LOAN SYSTEM HAS MADE SERVICE MORE

COMPATIBILITY.
PERIOD OF SERVICE NO. OF RESPONDENTS

STRONGLY AGREE 10
AGREE 13
NEITHER AGREE NOR DISAGREE 12
DISAGREE 2

ANALYSIS: From the above table regarding the question asked above that has been analysed,
here out of the 50 respondents 10 customers have strongly agree , 13 customers have agree , 12
customers have neither agree nor disagree and the remaining 2 have disagree. Thus it can be said
that Vijaya Bank is following flexible service.
GRAPH-5.17
GRAPH SHOWING PERSONAL LOAN SYSTEM HAS MADE SERVICE MORE

COMPARTIBILITY.
17. PERSONAL LOAN SYSTEM HAS MADE SERVICE MORE COMPARTIBILITY.
5% 27%
32%
STRONGLY AGREE
AGREE
NEITHER AGREE NOR DISAGREE
DISAGREE
35%
INTERPRETATION: From the above graph out of the 100% respondents 27% of the total
respondents have strongly agree , 35% of the respondents have agree, 33% of the respondents have
neither agree nor disagree and remaining 5% have disagree. None of the respondents have said or
stated that it is not flexible and hence it is effective as far as flexibility is concerned.

TABLE-5.18
TABLE SHOWING WHETHER THE BANK CAN RECOVER THE LOAN

AMOUNT ALONG WITH INTREST AND OTHER CHARGES
SL.NO PARTICULARS NO OF PERCENTAGE

RESPONDENTS
1 YES 50 100%
2 NO 0 0%
TOTAL 50 100%
ANALYSIS: According to above table it is analysed that the bank recovers entire loan
amount with interest and other charges while auctioning which seems of greater help to the
bank in case of non-payment.
GRAPH-5.18

GRAPH SHOWING WHETHER THE BANK CAN RECOVER THE LOAN

AMOUNT ALONG WITH INTREST AND OTHER CHARGES
18. SHOWING WHETHER BANKS CAN RECOVER THE LOAN AMOUNT

ALONG WITH INTREST AND OTHER CHARGES.
100%
INTERPRETATION: From the above graph it is known that Vijaya bank is facing risk in
recovering the loan amount from the borrowers in order to reduce risk banks should follow
this effective procedure for their safety measures by calling for the auction to take action
against the defaulters to recover the entire loan amount with interest and other charges during
auction for betterment of the bank.

CHAPTER-06
FINDINGS, SUGGESTION
& CONCLUSION.
FINDINGS, SUGGESTION & CONCLUSION.

FINDINGS
The project related to “ A study on Risk Analysis in Personal Loans at Vijaya Bank” Keeping
the objectives of study in mind, following are the findings after the analysis and interpretation
of data.
 The Vijaya Bank is lending PERSONAL LOAN with a primary goal to achieve
more than 25 crores as working capital, giving more preference to the salaried
employees and self-employed professionals in order to reduce the risk in future.
 The bank is giving high priority for Employees of educational institutions and other
organizations are given preference on personal loan.
 The VIJAYA BANK is collecting all the related documents like Identity proof,
voters ID /passport / driving license etc.,. As documents for the safety purpose.
 Majority of the customer says that the service provided by the Vijaya Bank is good.
 It is noticed that the bank prefers mortgage as the best security. Vijaya Bank is
following equitable mortgage, wherein this case, the mortgage is through deposit of
title deeds all the documents of the property have to be deposited with the bank.
The documents remain in the custody of the bank till loan is fully repaid.
 Risk involved in sanctioning Personal Loan. It is noticed that bank is experiencing
nonpayment risk due to the borrower’s related causes.
 Only less number of people accepts that cash less transaction bring changes in
banking sector.
 The satisfactory level of customer in the bank is acceptable.
 The bank has experienced miss utilization of funds and improper and invalid
documents are the important reasons for the nonpayment of loan apart from that
lack of income to the customer and to ensure repayment is also another reason.
 It is observed that VIJAYA BANK agree for auction in order for the arrears from
the borrower’s by following the recovery procedure according to SARFAESI ACT
(Securitization and Reconstruction of Financial and Enforcement of Security
Interest Act 2000).

 The bank is having the risk assessment and reduction team which helps for risk
ascertainment and reducing risk and recovers the loan amount given to the
customer’s if they don’t repay it properly.
 Bank profits are increasing yearly
 Interest rates charged by Vijaya Bank on loans and advances are reasonable and
convenient to customers.
 Major parts of loan are going out in the form of personal loans.
 Banks look for the best service to be provided to the customer.
 From the bank officials knows that bank is collecting sufficient documentation
before sanctioning the loan and giving proper follow up as a precautionary measure
for the banks secured future.
SUGGESTIONS
With reference to the analysis and findings of the study and my personal experience
the following suggestions are made for the effective performance of the bank.
 It is suggested for VIJAYA BANK that the bank can grow well if it develops, manage
and maintain information system and ensure an effective liberalized service for
growth and development of the bank.
 Banks has to increase its distribution networks.
 Promote transformation in financial services associated with Personal finance to low,
medium income households which help all the customers to have access to the bank
for all types of financial transactions.
 The bank uses the derivatives instrument as a good tool of hedging to reduce the risk
as forward or future contract which is a very good measure for the bank to recover the
amount.
 The bank can obtain PDC as it shows about the income and saving of the borrower
and reduces the risk and in case of any default the bank can be on safe end for the
recovery procedure.
 The bank is facing risk in recovering loan amount from the borrower’s. In order to
reduce risk, VIJAYA BANK should follow effective recovery procedure which
results in lowering the NPA’s which is good to the bank.

 The Vijaya Bank can follow different interest rates to different customer’s, which
enables the bank to get more interest which leads to growth and development of the
bank.
 The bank may adopt advertisement as a service provider technique in order to attract
customers for their services which is very important for the banks and for its
development.
 Before sanctioning personal loan the bank should take up the valuation of mortgaged
asset to know the real value of the asset, which helps in fixing the maximum ceiling
limit of the loan.
 Although the interest rates on specific norms, yet customers seek less interest rate
which can lower their cost. So the bank should try to lower their interest rates.
Needless to say, that the banks which are having lower interest rates have the
maximum clients for personal loans.
 The bank should consider present competition and should act according to the
customer needs and the bank should attract customers more and should provide saving
bank account and current account for better services.
 The bank needs to conduct a detailed study of all its personal loans accounts. It should
list out the major reasons, either internal or external, where it should be discussed
with the risk reduction team in order to reduce the risk.
 The bank has to make detailed study on borrowers the business to which they belong,
the various risk associated with them before sanctioning the loan.
 Create awareness about the product and services among the customers.
 The list of willful defaulters should be known to public which will discourage these
defaulters from approaching other banks for more loans.
 The bank should provide proper knowledge regarding their personal loan schemes,
even to the people who don’t know about such schemes and their benefit especially in
rural areas. So there is a need to educate people especially in rural and backward
urban areas.
 Bank has to introduce modern electronic machines.
 The borrowers have to be made aware of the various rules and regulations regarding
the recovery of loans at the time of lending itself. So by considering these suggestions
the bank can strengthen the customer’s base in personal loan sector. They should
improve their services and reduce the legal proceedings and also be friendly to their
customers. All these will be helpful to satisfy their customers.

 The bank can make use of E-banking facility in operating accounts for better access to
customers.
 We suggest the bank to maintain the cordial relationship.
CONCLUSION
This project is carried out at Vijaya Bank, with regard to RISK ANALYSIS IN
PERSONAL LOANS to analyse the risk involved in Personal loans.
Now a day’s personal loans have been catered to range of people unlike years ago. As
various schemes of personal loans are disbursed without complex procedures, the bank must
manage its working mechanism in such a way it earns a good return, where there are no
defaulters. To make the customers aware of the schemes and the offers, the bank should
position its brand, market analysis and the customer research. All these processes can be done
only through effective and efficient management. The bank should have quick respond
system that link information system which helps in global positioning system.
Risk analysis is process of defining and analysing the dangers. Thus risk management
plays a very important role which effects on financial performance of the bank for long term
growth. The banks need to concentrate on higher risk levels and try to reduce those risks and
thereby to increase profitability and value of the bank.
From the above findings and suggestions it is concluded that, the bank has to give
more preference towards other types of loans and the bank should take effective legal actions
against defaulters by invoking the Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act, 2002 (also known as the SARFAESI ACT) is an Indian
law. It allows banks and other financial institution to auction residential or commercial
properties to recover loans. Otherwise this may lead to NPA which is not good for the growth
of the bank.
The borrowers are playing a very important role because they are not ready to pay
more interest rates for personal loans. Thus Vijaya bank should maintain different interest
rate structures for different customers mainly they should lend lower interest for lower
households.

Thus I feel proud in doing my project in well-established bank which is giving a

greater importance towards PERSONAL LOANS. I wish to conclude by saying that the
VIJAYA BANK is one of the well-established and lending banks in Bangalore, so the bank
should increase number of branches in other cities for further growth and to extend its
customers loyalty.

BIBILOGRAPHY
AUTHOR NAME TITLE OF THE BANK PUBLISHERS
K C Shekar Banking Theory and Practice Vikas Publications
Mohammed arif Financial Market and Kalyani publisher

pasha Intermediaries
WEBSITES
www.google.com
www.vijayabank.com
www.personalloan.com
OTHERS
Annual report of the bank

ANNEXURE
1. Name:
2. Name of the Bank:
3. Gender:
a. Male b. Female
4. Age:
a. 18 - 25 years
b. 26 - 30 years
c. 31 – 40 years
d. 41 – 50 years
e. 51 – 60 years
f. Above 60 years
5. Education:
a. Illiterate
b. High school
c. Degree
d. Master’s Degree
e. Others (please specify) ______

6. Marital Status
a. Married
b. Un married
7. Profession:
a. a. Govt Employee b. private Employee
b. c. Business d. Student
c. e. House Wife f. Others (please specify)
____________
8. From how many years you are holding account in Vijaya Bank.
a. Since 1 year.
a. 1 to 3 years.
b. 3 to 5 years.
c. More than 5 years.
9. What type of account that you are holding in Vijaya Bank?

a. Saving account.
b. Current account.
c. Term or fixed deposit account.
d. Other accounts.
10. Why do you prefer Vijaya Bank?

a. Easy process of documentation.
b. Accessible.
c. Less interest rate.

d. Flexibility in repayment.
11. Which kind ofloan do you prefer to take from Vijaya Bank?
a. Home loan.
b. Educational loan.
c. Vehicle loan.
d. Other.
12. How are you connected with Vijaya Bank?

a. Through savings account.
b. Through salary account.
c. Loan taker.
d. Other savings such as FD and RD.
13. The interest rates charged for personal loan are

comparatively.
a. Highly satisfied.
b. Satisfied.
c. Neutral.
d. Dissatisfied.
e. Highly dissatisfied.
14. Why do customers choose Vijaya Bank to get personal loan.

a. Easy and low cost processing.
b. Low interest rates.

c. Good services provider.

d. More branches.
15. The bank follows reasonable interest charges for late

payment.
a. Strongly agree.
b. Agree.
c. Neutral.
d. Disagree.
e. Strongly disagree.
16. The bank provides special provisions for the shareholders.

a. Strongly agree.
b. Agree.
c. Neutral.
d. Disagree.
17. From where have you got information about personal loan?
a. Newspaper.
b. Magazines.
c. Hoardings.
d. Word of mouth.
18. The bank follows easy and convenient loan document process.

a. Strongly agree.
b. Agree.
c. Neutral.
d. Disagree.
19. The bank offers convenient interest method based on

customers.
a. Strongly agree.
b. Agree.
c. Neutral.
d. Disagree.
20. What do you think, about the paper formalities of personal

loan?
a. Highly satisfied.
b. Satisfied.
c. Manageable.
d. Too much.
21. Does bank employee were giving proper response?

a. Satisfied.

b. Not Satisfied.
22. Are you aware of the risk involved in the personal loan?
a. Yes.
b. No.
23. Does the bank agree for auction to recover the non-payment
of personal loan?
a. Yes.
b. No.
24. Are you holding account with other banks?

a. Yes.
b. No.
25. Does bank employee were giving proper response?

a. Satisfied.
b. Not Satisfied.


A Study On Risk Analysis On Personal Loans at Vijaya Bank

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“A STUDY ON RISK ANALYSIS ON PERSONAL LOANS AT VIJAYA BANK”

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 1

INTRODUCTION ABOUT BANKING INDUSTRY:

ORIGIN OF BANKING INDUSTRY:

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 2

INTRODUCTION TO BANKING IN INDIA

A Banker is a dealer in money and credit. The business of Banking consists of

PRESENT SCENARIO OF BANKING INDUSTRY:

The Indian banking can be broadly categorized into nationalized (government

NEW GENERATION BANKING:

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 3

The liberalized policy of government of India permitted entry of private sector in

2. Processing of payments by way of telegraphic transfer, EFTPOS, internet banking or other

3. Issuing bank drafts and bank cheques.

4. Accepting money on term deposit

5. Lending money by way of overdraft, instalment loan or otherwise

6. Providing documentary and standby letters of credit, guarantees, performance bonds,

7. Safekeeping of documents and other items in safe deposit boxes

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 4

The most important functions of banking may be classified as follows:

 To assemble capital and make it effective.

 To receive deposits and make collections.

 To check out and transfer funds.

 To exercise fiduciary or trust powers.

 To issue circulating notes.

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 5

2. Investment bank /industrial banks:

Co-operative banks are promoted to meet the banking requirements of

6. Land Mortgage banks:

BANKER AND A CUSTOMER

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 6

A banker is a person or company carrying on the business of receiving money and

 Secured loans and

 What are personal loans?

 What are its uses?

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 7

 What are the types in it?

 Benefits of secured and unsecured loans

 Who will provide personal loans?

 How one can avail personal loans?

What is a Personal Loan?

Simply put, it is an unsecured loan taken by individuals from a bank or a non-banking

Who Will Help Provide Personal Loans and How?

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 8

Online Personal Loans

HOW TO APPLY FOR PERSONAL LOAN

Step 1: Enquiry with a financier

Step 2: Documents Collection

Step 3: Field Investigation Agency Representative Visit

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 9

Step 4: Loan approved

A copy of passport, ration card, Adhaar card or voters ID if he resides at the

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 10

Prime Consideration before taking out a personal loan

 Do I meet the requirements to qualify for a personal loan?

Charges applicable before and after the Personal loan

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 11

Charges for late payment:

PERSONAL LOAN: ELIGIBILITY CRITERIA:

PERSONAL LOAN: ELIGIBILITY CRITERIA: BASIC

ACHARYA INSTITUTE OF GRADUATE STUDIES Page 12

 Personal Loan eligibility calculator