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INTRODUCTION Banks are the nerve centre of trade, Commerce and business in a country Banking plays a very important

part in the economic development of all the nation of the world Industrial revolution that took place in European countries in the 18th & 19th centuries would not have taken place without the evolution of a good banking system. In fact, Banking is the life Blood of modern commerce. The word banking has been used to denote a certain kind of trading in money. It consist of basically the exchange of money, the lending of money, the depositing of money, and the transmitting of money. The world of banking has assumed a new dimension at dawn of the 21st century with the advent of tech banking, thereby lending the industry a stamp of universality. In general, banking may be classified as retail and corporate banking. Retail banking, which is designed to meet the requirements of individual customers and encourage their saving, includes payment of utility bills, consumer loans, credit cards, checking account and the like. Corporate banking, on the other hand, caters to the needs of corporate customers like bills discounting, opening letters of credit, managing cash, etc. Metamorphic changes took place in the Indian financial system during the eighties and nineties consequent upon deregulation and liberalization of economic policies of the government. India began shaping up its economy and earmarked ambitious plan for economic growth. Consequently, a sea change in money and capital markets took place. Applications of marketing

concept in the banking sector was introduced to enhance the customer satisfaction. The policy of privatization of banking services aims at encouraging the competition in banking sector and introduction of financial services. Consequently, services such as Demat, Internet Banking, Portfolio Management, Venture Capital, etc., came into existence to cater to the needs of public. An important agenda for every banker today is greater operational efficiency and customer satisfaction. The new watchword for the bank is pretty ambitious : customer delight. The introduction to the marketing concept to banking sector can be traced back to American Banking Association Conference of 1958. Bank marketing can be defined as the part of management activity, which seems to direct the flow of banking services profitability to the customers. The marketing concept basically requires that there should be thorough understanding of customers need and to learn about market it operates in. Further the market is segmented so as to understand the requirements of the customer at a profit to the bank DEFINITION OF BANK The Oxford dictionary defines the Bank as, An establishment for the custody of money, which it pays out, on a customers order.

AccordingtoWhitehead, A Bank is defined as an institution which collects surplus funds from the public, safeguards them, and makes them available to the true owner when required and also lends sums be their true owners to those who are in need of funds and can provide security. A Banking Company in India has been defined in the Banking Companies act 1949, One which transacts the business of banking which means the accepting, for the purpose of lending or investment of the deposits of money from the public, repayable on demand, or otherwise and withdraw able be cheque, draft, order or otherwise. The banking system is an integral subsystem of the financial system. It represents an important channel of collecting small savings form the households and lending it to the corporate sector. The Indian banking system has Reserve Bank of India (RBI) as the apex body for all matters relating to the banking system. It is the central Bank of India. It is also known as the Banker To All Other Banks.

EVOLUTION OF INDIAN BANKING Ancient banking system of India constituted of indigenous bankers. They have been carrying on their age-old banking operations in different parts of the country under different names. The modern age of banking constitutes the fundamental basis of economic growth. The term Bank is being used since long time but there is no clear conception regarding its beginning. According to the viewpoint, in good old days. Italian money leaders were known as Banchi because they kept a special type of table to transact their business. Banking is the pivotal of Indian economy. Banking, if we equate it with money lending, it perhaps as old as civilization itself. When money in its modern form was not in existence, people in order to obtain the goods and services, offered other goods and services in return. This was- Barter an inconvenient system. Nevertheless people could lend and borrow in the form of any other mutually acceptable form.

Modern banking is something radically different from mere lending. Banking institutions today form the heart of the financial structure of any country whether it is developed or developing. So, Banks are like : Oxygen for economy which is necessary for the generation and management of the blood i.e. the finance of the economy and circulates through the network of the Bank i.e. the Network of Branches. ORIGIN OF THE WORD BANK On the other hand, even the origin of the word Bank is shrouded in mystery. According to one viewpoint, the Italian business houses carrying on crude form of banking were called Banchi Bancherii. According to another viewpoint, the word Bank is derived from the German word Banck which means heap or mound. Subsequently, Italians started using the name Banco which meant accumulation either of money or of stock. In England, the issue of paper money, by the Government, was referred to as raising of Banks. But it can be safely assumed that the word bank is derived from Italian or German words.

REASON FOR THE CHOICE OF PROJECT


The present project titles with A Study of Customers Perception about Loan Schemes provided by Oriental Bank of Commerce. The aim of the project is to understand the core concept of parameters for loan proposals, as this topic is related to finance. As banking is the nerve centre of todays economy and with the help of the banking facilities, many other businesses work. It is one which promotes economic developments. It deals with the financial services which is the prime factor for any business kind. Bank consist exchange of money, lending of money, depositing of money and transmitting of money. It involves many functions like deposits, advances loans, utility or agency function etc. Making project Loans is one of the most important functions of the bank and test of the banks strength depends considerable on the quality of its advances. The proportion of loans and advances bear to the total deposits. It is the advances which bring most of the earnings for the bank. Bank accepts deposits from those who have surplus funds and grants loans and advances to those who need them. The bank acts as a middleman mobilizing the saving of people and using them to assist industry and trade and thereby promote economic development of the country. Banks usually do not make loans and advances in hard cash but allow a right to draw cheques to the limit fixed. Loans and advances are generally made by banks in the following forms:loans cash credits overdrafts purchasing and discounting of bills

LOANS:- When a bank makes an advances in lump sum against some security or otherwise it is called a loan. In this case a fixed amount is sanctioned by the bank to the customer. We define the term loan in many different ways; Loan is a temporary provision of money or given temporarily for a limited time. Loan is a sum of borrowed money ( principal ) usually for a specific reason (e.g. to obtain education, to buy a car etc. ). The entity lending a money usually charges an interest for use of money. The amount of money borrowed is typically repaid with interest over a period of time.

- A sum of money lent one person or organization to another usually with some interest. Loan differs from grants in that they have to be repaid. This requires that the recipient is credit worthy, can provide security against default and has a cash flow sufficiently to make the interest and capital payment. - A type of financial aid which must be repaid with interest. We can say that entire loan amount is paid to the borrower either in cash or by credit to his account. The borrower is required to pay interest on the entire amount of the loan from the date of sanction. A loan is generally repayable in lump sum or installment. But once loan is repaid either wholly or partially it cannot be withdrawn again unless the bank sanction a fresh loan.

Interest rate is calculated at quarterly rests and where repayment is in installment, the interest is calculated at quarterly rests on the reduced balances. Commercial banks generally provides short term loans up to one year for meeting working capital requirements. But now a days term loan are also provided which can be short term or long term loans. Hence it is very advantageous for the borrowers as it is easily repayable with generally affordable interest rates. A person concern starting a new business generally does not have to bear some losses. This loss can be compensated with the help of loan facilities available to them. Bank provides many types of loans and their interest rate varies with it. Today it is one of the basic concepts of competition between various institutions. Banks provides various facilities with different types of loan available. The consumer perception regarding loan provision affects their decision lot. For some it is a necessity and for some it is a convenient mode. The awareness among the customers is an interesting subject to be known . Their preference, their views, ideas, beliefs, can be easily judged by making a survey on the consumer perception regarding loans provision. As loan and advances are the one which brings maximum earnings to bank, a bank should have full knowledge regarding its customer wants and needs. The strategi8es other are adopting to attract consumers should be fully known. The main factor and likings which persuade them to avail loan facility must be completely understood. This helps a bank to modify itself with the arising needs, enable it to have success in the future. Hence to fulfill the objective to find the consumer perception regarding loans provision, this project was undertaken.

ORIENTAL BANK OF COMMERCE


Established in Lahore on 19th February 1943, Oriental Bank of Commerce made a modest beginning under its Founding Father, Late Rai Bahadur Lala Sohan Lal, the first Chairman of the Bank. Within four years of coming into existence, the Bank had to face the holocaust of partition. Branches in the newly formed Pakistan had to be closed down and the Registered Office had to be shifted from Lahore to Amritsar. Late lala Karam Chand Thapar, the then Chairman of the Bank, in a unique gesture honoured the commitments made to the depositors from Pakistan and paid every rupee to its departing customers. The foundation of customer service thus laid has ever since remained Oriental Bank's prime philosophy and has been nurtured well as a legacy by all its successors, year after year.

Projects - A Handful of Success The Bank has launched yet another people's participation in the planning process at grass root level essentially to tackle the maladies of poverty. The Grameen Projects venture aims to alleviate poverty plus identify the reasons responsible for the failure or success. OBC is already implementing a GRAMEEN PROJECT in Dehradun District (UP) and Hanumangarh District (Raiasthan). Formulated on the pattern of the Bangladesh Grameen Bank, the Scheme has a unique feature of disbursing small loans ranging from Rs. 75 (US $2) onwards. The beneficiaries of the Grameen Project are mostly women.The Bank is engaged in providing training to rural folk in using locally available raw .

material to produce pickles, jams etc. This has provided self-employment and augmented income levels thus reforming lives of rural folk and encouraging cottage industries in rural areas. OBC launched yet another unique scheme christened "The Comprehensive Village Development Programme" on the auspicious day of Baisakhi, the 13th of April 1997 at three villages in Punjab namely Rurki Kalan (Distt. Sangrur), Raje Majra (Distt. Ropar) and Khaira Majha (Distt. Jaladhar) and two villages in Haryana, namely Khunga (Distt. Jind) and Narwal (Distt. Kaithal). The pilot launch was a great success. Emboldened by the success, Bank extended the programme to more villages. At present, it covers 15 villages; 10 in Punjab, 4 in Haryana and 1 in Rajasthan. The programme focuses on providing a comprehensive and integrated package providing rural finance to the villagers with Village Development as its focus, thus contributing towards infrastructural development and agumentation of income for each farmer of the village. The Bank has implemented 14 point action plan for strengthening of credit delivery to women and has designated 5 branches as specialized branches for women entrepreneurs.

VISION AND MISSION


Vision: To be a sound all India, customer centric, efficient retail bank with contemporary size, technology and human capital; endeavouring to enrich lives across all sections of society; and committed to upholding the highest standards of corporate governance. Mission To provide the finest banking services by upgrading human capital and infusing advanced technology, thereby achieving total customer satisfaction; and being reckoned as the Best Bank in the Industry on all efficiency parameters. To enhance shareholders wealth by ensuring sound growth of business and make valuable contributions to national economic growth.

ACHIEVEM 1. Working

31st March 200

Total Income and Total Expenditure(Rs.in thousands ) March07 Income 57681579 Expenditure 49413442

March08 74548398 66139022

Increase/Decrea se +16866819 +16725580

Interest Income Interest Expenditure

Interest March08 Income and Interest Expenditure (Rs. in thousands ) March07 51649003 68381833 34735831 51561731

Increase/Decrea se

+16732830 +16825900

2.Operating Expenses Operating Expenses stood at Rs. 9978855 as on March2007 and Rs.10796309 as on March 2008 showing an increase of 8.19%,

3. NPA : During the year, Bank has Gross NPA from Rs.1454.05 crore as on
March 2007 to Rs.1280.10 crore as on March 2008 (3.20 % to 2.31 %) and Net NPA from Rs. 215.66 crore as on March 2007 to Rs.538.40 crore as on March 2008 .

4. Capital Adequacy : CAR as of March 2008 is 12.12% as against 12.51% as


of March 2007.

5.Achievements during the Financial Year : IT Initiatives: The bank has been constantly taken new initiative in information Technology with the increase focus on customer service and setting up of new delivery channels .The bank has computerized all its branches and extension counters on CBS and with this complete business of bank is getting routed through centralized banking solution (CBS).The bank has also deployed several electronic delivery channels such as ATM ,Internet banking including utility payments ,SMS banking etc. ATMs: - 123 more ATMs were installed/operationalised during the year ended 31st March 2008 taking number of ATMs to total 789 . OBC Is the member of MITR , NFS and VISA network .At present there are more than 3000 ATM under MITR Networks and more than 8000 ATM under NFS networks .

LOANS PROVIDED BY ORIENTAL BANK OF COMMERCE


1) Housing Loan :
Purpose: For Construction/ purchase of Residential House/ Flat. Eligibility: Individuals having an assured source of Income viz. Salaried Employees, self employed professionals, businessman, farmers, HUF etc. Amount of Loan: 40 times Gross Monthly Income with a condition that the net take home after all deductions comes not less than 30%. (Max. Rs. 50 lac) For Salaried Persons: 60 times Gross Monthly Income with a condition that the net take home after all deductions comes not less than 30%. (Max. Rs.50 lacs) Security: Mortgage of property. Margin: LoanAmount Upto Rs.20 Lacs - 15% Loan Amount Above Rs.20 Lacs - 25%

Interest Rates : w.e.f 07.11.2008 (for new borrowers only) Loan Amount Upto Rs. 20 Lacs Tenure Repayment Upto 10 years Repayment Above 10 years and upto 20 years Floating PLR3.25%= 10.00% PLR3.00%= 10.25% Fixed 11.00% 11.25%

Loan Amount Above Rs. 20 Lacs Floating PLR-2.25= 11.00% PLR-2.00= 11.25% Fixed 12.00% 12.25%

Fixed rates shall be re-set by the Bank after every 3 years at its sole discretion. Since the floating rates are linked to PLR, the rates shall be re-set as and when there is any change in PLR. Process Fee: 0.50% of loan amount with maximum ceiling of 12,500/-. Minimum Rs. 500/-. With the revision in process fee as above, the Bank shall not provide any insurance cover whatsoever. Insurance expenses of House shall be borne by the borrower. Repayment: Maximum within 20 years or till the borrower attains 70 years of age or repayment shall not extend beyond the age of retirement, whichever is earlier.

Repairs / Renovation/ Furnishing (For General Public) Purpose: For Repairs / Renovation/ Furnishing of house. Eligibility: Individuals having an assured source of income viz. salaried employees, self employed professionals, businessman, farmers, HUF etc. Amount of Loan: Max. Rs.10.00 lacs or 30% value of House/ Flat whichever is lower. Security: Mortgage of property. Margin: 15% * Interest: w.e.f. 07.11.2008 for new customers Loan Amount Upto Rs. 10 Lacs Tenure Floating Fixed Repayment Upto 10 PLR-3.25% i.e. 11.00 years 10.00%

Fixed rates shall be re-set by the Bank after every 3 years at its sole discretion. Since the floating rates are linked to PLR, the rates shall be re-set as and when there is any change in PLR. Repayment: Maximum within 10 years. *PLR of our bank w.e.f. 07.11.2008 is 13.25% per annum .

CAR LOAN
Purpose : For purchase of new scooter/motor cycle/ car/jeep etc. (Non commercial use to be registered as Private vehicle) Eligibility: For two wheelers - Rs. 6,000/- p.m (Gross Salary) For cars - Rs.10,000/- p.m (Gross Salary). Amount of Loan: 30 months Net take home Salary/Income subject to the condition that net take home salary after deduction of proposed loan instalment should not be less than 40% of the gross salary. Income of the spouse can also be considered if spouse agrees to guarantee the loan. In case of existing house loan borrowers, net take home salary should not be less than 30% of gross salary after payment of the proposed loan instalment. Maximum Loan Ceiling: For two wheelers - 90% of the cost of two wheeler including registration charges, insurance and road taxes. For new cars - Rs.10 lacs. Security: Hypothecation of the Vehicle & Personal Guarantee(s) required.

Margin: For two wheelers - 10% For cars -15% Process Fee: 0.50% of loan amount with minimum of Rs. 500/-. Rate of Interest w.e.f 07.11.2008: Upto 3 years = PLR - 1.50% i.e 11.75% Above 3 years = PLR - 1.00% i.e 12.25%

Repayment: For Two Wheeler For New Car/MUV

60 months (maximum) 84 months (maximum)

In case of employee, subject to remaining period of service/ repayment capacity. For second hand Cars : Maximum Rs.7.50 lacs margin @ 20.00% under TVS(True Value Scheme) and 30% for Non TVS @ PLR+0.50% for repayment upto 36 months and PLR+1% for repayment above 36 months. *PLR of our bank with effect from 07/11/2008 is 13.25% per annum.

EDUCATION LOAN

Purpose : For higher education(after schooling). Items eligible for Finance:Admission fee/Monthly fee/Examination fee, Books, Stationery & equipments. Air fare for joining the course abroad, Boarding & lodging expenses of hostel/boarding houses, where charges are standardised and paid to the Management of the Boarding House. Any other expenses required to complete the course like study tours, project work, thesis etc. Eligibility: Indian nationals not above 45 years of age those who secured admission in a recognized course of an approved university (AICTE approved institutions) OR institutes recognized by a statutory body. Amount of Loan: Education in India - Max. Rs.10.00 lacs. Education Abroad - Max. Rs.20.00 lacs. Security: For Loans upto Rs.4.00 lac No Collateral Security Co-obligation of parents/guardian is must. For Loans above 4 lacs and upto Rs.7.50 lacs No Collateral Security required, Co-obligation of parents/guardian is must

One satisfactory third party guarantee Above Rs.7.50 lacs Co-obligation of parents/guardian is obligatory. Mortgage of immovable property or any other tangible security like pledge of NSC/UTI/LIC (Surrender Value)/Bonds/ Bank's deposits (Except under tax saving scheme) etc. . having value at least equal to 100% of loan. Extension of charge on property already mortgaged subject to adequate residual value of security. Margin: Upto 4 lacs NIL Above 4 lacs for education in India - 5% Education Abroad - 15% Rate of Interest:
For Loan upto Rs. 4.00 Lacs For Loan above Rs. 4.00 Lacs

PLR 1.75 = 11.50 % per annum PLR - 1.00 = 12.25% per annum

Interest Rates revised w.e.f. 07.11.2008 Concession on Rate of Interest : Simple Interest shall be charged during study and moratorium period. The concession of 1% in rate of interest to be allowed, if interest is serviced regularly during the study and moratorium period. This concession shall be allowed after expiry of moratorium.

Special Rate: 0.50% concession to women beneficiaries, SC/STs and disabled students. Process Fee: Upto 4 lacs - Rs. 100/-. Above 4 lacs for education in India - Rs. 500/Education Abroad - Rs. 1000/Repayment: Within 84 EMIs commencing 12 months after course or 6 months after getting the job, whichever is earlier. Insurance: Free Personal Accident Insurance upto Rs.15 lac.

PERSONAL LOAN
Purpose : To meet personal/ family expenses like marriage/education/family functions For purchase of consumer durables, gold / gold ornaments. To meet expenditure on medical treatment of self and/or dependent at Hospitals/Nursing Homes registered with local Govt. bodies. Eligibility: Permanent and regular employee in Centre/State Govt. Deptt. and other institutions like Universities, Schools/College, PSUs, reputed hospitals, and well established corporate. Professionals and doctors shall also be eligible for loan Minimum 3 years of service, including service with the previous employer(s), if any. The net monthly salary should not be less then Rs 6,000/-. 4. The net take home salary should not be less than 30% of gross salary after deducting the EMI of the proposed loan. Relaxation in Eligibility Minimum net monthly salary of Rs. 3000/- subject to fulfillment of the following conditions for the regular employees of Central / State Govt. Deptt. And other institutions like Universities, Schools / College, PSUs, reputed Hospitals and well established Corporate.

Where the employer is maintaining the salary accounts of its employees with the branch and monthly installment is recovered from the salary account for adjustment of loan. OR Where there is specific agreement / tie up arrangement made between employer and the Bank for education of loan installments from salary of the employee in more than two accounts. Amount of Loan Upto 15 months net take home salary, subject to maximum of Rs.1.50 Lac Income of spouse can be included, provided he/she guarantees the loan or loan is availed jointly. Nature of Facility Term Loan Overdraft limit (on liquidation basis in exceptional cases to Senior Bureaucrats/Administrators/Judges & customers of high net worth). Margin : Nil Process Fee: 0.50% of loan amount with minimum of Rs. 500/-. Security Charge over tangible assets, if created out of loan. One personal guarantee preferably of fellow employee, subject to the condition that one employee will not stand as guarantor in more than two accounts. Repayment : 60 EMI (subject to remaining period of service)

SCHEME FOR FINANCING AUTOS /TAXIES No. of vehicles :


Maximum of ten vehicles per entity irrespective of it being an individual partnership , sole propertiership ,private limited ,public limited companies Incase of trust loan shall be considered only of regional office level as per existing guidelines vogue .

Margin and extend of loans :


25% of cost of vehicles with a maxium of Rs/ 5 Lacs.

Rate of interest :
Rate of Interest: PLR 2.25% = 11.00 % For Loan above Rs. 50000 to 2 Lacs PLR - 1.50 %= 11.75% For Loan above 2 Lacs upto 5 Lacs PLR - 1.25% = 12.00%
For Loan upto Rs. 50000

Panel Interest :
In case of delayed payment , a penalty of 2% on the overdue amount for delayed period shall be charged .

Process Fee: 0.50% of loan amount with minimum of Rs. 500/-. Repayment: In 48 EMIs .However repayment can be considered upto 60 Months in deserving cases by then sanctioning authority on merits of each case . Collateral Security : Loan amount upto Rs/ 2 Lacs Two personal guaranties of adequate means acceptable to bank . Loan above Rs / 2 Lacs .

PURCHASE OF LAND FOR AGRICULTURE PURPOSES.


Purpose: To finance purchase of land for Agriculture Purposes. Eligibility: Small & Marginal Farmers, Tenants and Share Cropper owing land upto 5 acres, including the one proposed to be purchased. Amount of Loan: Maximum Rs.10 lacs. Security: Mortgage of land purchased out of Bank Finance Margin: Upto Rs. 50,000 - NIL Above Rs. 50,000 - 10% Repayment: Within 10 years including Moratorium of Max. 24 months

MAJOR COMPETITORS OF ORIENTAL BANK OF COMMERCE


STATE BANK OF INDIA The origins of the State Bank of India date back to 1806 when the Bank of Calcutta (later called the Bank of Bengal) was established. In 1921, the Bank of Bengal and two other banks (Bank of Madras and Bank of Bombay) were amalgamated to form the Imperial Bank of India. In 1955, the Reserve Bank of India acquired the controlling interests of the Imperial Bank of India and State Bank of India was created by an act of Parliament to succeed the Imperial Bank of India. The state Bank of India is the largest commercial bank in India. The State Bank of India is the largest commercial banks in India in terms of profits, assets, deposits, branches and employees as on 31st March 2005, the Bank possessed total assets worth Rs. 26,15,049 million (US $ 59951 Million) and the total deposits worth Rs. 1968211 million (US $ 45122 million). SBI Bank India has 52 Foreign Offices in 34 countries. SBI India serves the international needs of its foreign customers, in addition to conducting retail operations. The focus of the offices of SBI is India-related business.

PUNJAB NATIONAL BANK : Punjab National Bank was established in 1895 at Lahore, undivided India, Punjab National Bank has the distinction of being the first bank to have been started solely with Indian Capital. From its modest beginning, the bank has

grown in size and stature to become a first line banking institution in India at present. The bank was nationalized in July 1969 along with 13 other banks. The Punjab National Bank is now a corporation established by an act of parliament with a common seal and is wholly owned by Government of India. It has build strong links with trade and industry. Punjab National Bank with 4497 offices and the largest nationalised bank is serving its 3.5 crore customers with the following wide variety of banking services: Corporate banking Personal banking Industrial finance Agricultural finance Financing of trade International banking Punjab National Bank has been ranked 38th amongst top 500 companies by The Economic Times. PNB has earned 9th position among top 50 trusted brands in India. Punjab National Bank India maintains relationship with more than 200 leading international banks world wide. PNB India has Rupee Drawing Arrangements with 15 exchange companies in UAE and 1 in Singapore. ICICI BANK : ICICI Bank is India's second-largest bank with total assets of after about Rs. tax of Rs. 2,513.89 bn (US$ 56.3 bn) at 25.40 bn March 31, 2006 and profit

(US$ 569 mn) for the year ended March 31, 2006 (Rs. 20.05 bn

(US$ 449 mn) for the year ended March 31, 2005). ICICI Bank has a

network of about 614 branches and extension counters and over 2,200 ATMs. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries and affiliates in the areas of investment banking, life and non-life insurance, venture capital and asset management. ICICI Bank set up its international banking group in fiscal 2002 to cater to the cross border needs of clients and leverage on its domestic banking strengths to offer products internationally. ICICI Bank currently has subsidiaries in the United Kingdom, Russia and Canada, branches in Singapore, Bahrain, Hong Kong, Sri Lanka and Dubai International Finance Centre and representative offices in the United States, United Arab Emirates, China, South Africa and Bangladesh. Our UK subsidiary has established a branch in Belgium. ICICI Bank is the most valuable bank in India in terms of market capitalisation. ICICI Bank's equity shares are listed in India on the Bombay Stock Exchange and the National Stock Exchange of India Limited and its American Depositary Receipts (ADRs) are listed on the New York Stock Exchange (NYSE). ICICI Bank has formulated a Code of Business Conduct and Ethics for its directors and employees. HDFC BANK : The Housing Development Finance Co-Operation Limited (HDFC) was amongst the first to achieve an in princple approval from the Reserve Bank of India (RBI) to set up a bank in the private sector as part of the RBIs liberalization of the Indian Banking Industry. It was incorporated in August

1994 in the name of HDFC Bank Limited with its registered office in Mumbai. It began its operations as a scheduled commercial Bank in January 1995. HDFC Banks head-quarter is in Mumbai. It presently has a network of around 131 branches and ATMs spread across the country. The branch network will be extended to cover major cities in India, as well as some semi-urban locations in line with RBI guidelines. Mumbai, Calcutta, Chennai and Delhi are supported by phone Banking Centres.

REVIEW OF LITERATURE
Prashanth K Reddy (2002), A comparative study of Non Performing Assets in Indian Banking in the Global context - similarities and dissimilarities, remedial measures, The Indian Institute of Management Ahmedabad. India Financial sector reform in India has progressed rapidly on aspects like interest rate deregulation, reduction in reserve requirements, barriers to entry, prudential norms and risk-based supervision. But progress on the structural-institutional aspects has been much slower and is a cause for concern. The sheltering of weak institutions while liberalizing operational rules of the game is making implementation of operational changes difficult and ineffective. Changes required to tackle the NPA problem would have to span the entire gamut of judiciary, polity and the bureaucracy to be truly effective. This paper deals with the experiences of other Asian countries in handling of NPAs. It further looks into the effect of the reforms on the level of NPAs and suggests mechanisms to handle the problem by drawing on experiences from other countries. The paper stresses the importance of a sound understanding of the macroeconomic variables and systemic issues pertaining to banks and the economy for solving the NPA problem along with the criticality of a strong legal framework and legislative framework.

Rakesh Malhotra (2006), Home Loans in India - Present scenario published by Business Line.

In the last few years, housing loan scenario in India has changed drastically. It has taken a front seat and people are looking forward to owning their own houses. It is no more a dream that required lifetime saving and a difficult decision to make. Today the new home purchase loan is much easily available and is much cheaper than what was available earlier. In the last few years, housing loan scenario in India has changed drastically. It has taken a front seat and people are looking forward to owning their own houses. It is no more a dream that required lifetime saving and a difficult decision to make. Today the new home purchase loan is much easily available and is much cheaper than what was available earlier. Banks are now everywhere and the schemes are implemented even in villages and smaller towns. The housing loans are popular there too, however, the activity of building flats is little slow. It would not be wrong to say that there has been a boom in the home loan market and with this boom; there is also a boom in the number of home loan mortgage brokers in India. The main reason for this boom in home loan market is the change in government policies. It is our governments motivation that the home loan interest rates in India have fallen considerably. Lot many banks are offering home loans and this is available at low EMIs (Equated monthly Installments). High EMIs are now a thing of past. Today lending rate is in the range of 7.5 to 15 %. Again, there are different types of home loans available today. The interest rate available is also of two different types. One is the fixed rate loan and the

other is the floating rate loan. In the fixed rate loan, whatever interest is fixed on the start of loan is carried on for the complete period. However, in the other one, the interest rate is not fixed and as the interest rate goes up or low the effect is directly transferred to the person who is taking the loan. In the last few years the floating interest rate has been a favorite among most of the people taking home loans. There is also a trend to opt for home construction loan. This loan is available to those who want to design their homes according to their requirement and taste. In other words, this loan is meant for those who themselves want to construct their new home. As shared earlier, taking a loan is not a difficult task. However, before taking a loan, one must realize that the relationship with the bank will be for a longer period usually 15 to 20 years so one must ensure faith and integrity in bank. Apart from low rate of interest, the bank should also provide some value added services. The other thing is to look into is the property that is to be brought. Carol Ann Northcott (2004), Competition in Banking: A Review of the Literature, Business Line. The author suggests that the theoretical and empirical literature to examine the traditional perception that the following trade-off exists between economic efficiency and stability in the banking system: a competitive banking system is more efficient and therefore important to growth, but market power is necessary for stability in the banking system. That this trade-off exists is not clear. Market power can have positive implications for

efficiency, and the potentially negative implications of competition on stability may be manageable through prudential regulation. Neither extreme (perfect competition nor monopoly) is likely ideal. Rather, it may be optimal to facilitate an environment that promotes competitive behaviour (contestability), thereby minimizing the potential costs of market power while realizing benefits from any residual that remains. It can be very difficult to assess the contestability of a banking market. Recent work suggests that the number of banks and the degree of concentration are not, in themselves, sufficient indicators of contestability. Other factors play a strong role, including regulatory policies that promote competition, a well-developed financial system, the effects of branch networks, and the effect and uptake of technological advancements.

OBJECTIVES OF THE STUDY


The study was conducted to aiming at fulfilling the following objectives: To study the consumer perception regarding loan provisions. To find the preferences of customer regarding various types of loan. To identify the factors influencing the decision while taking a loan from particular bank. To study the consumer satisfaction level regarding different loans schemes provided by Oriental Bank of Commerce. To analyze the expectations of customer from the bank.

RESEARCH METHODOLOGY
Research means a search for knowledge or gain some new knowledge and methodology can properly refer to the theoretical analysis of the methods appropriate to a field of study or to the body of methods and principles particular to a branch of knowledge. A Research methodology has a specified framework for collecting the data in an effective manner. Research methodology means a "defining a problem, defining the research objectives, developing the research plan, collecting the information, analyzing the information and presentation of findings." Such framework is called "Research Design". The research process that was followed by me consisting following steps; A) Defining the problem B) Developing the research plan C) Collection of Data D) Analysis and Interpretation of Data E) Presentation of findings A) Defining the problem My research problem is to study the customers perception about various loan schemes provided by Oriental Bank of Commerce.

B) Developing the Research Plan The development of research plan has following steps: 1. Data source 2. Research approach

3. Type of Research Design 4. Research instrument 5. Sampling plan i. Sample unit ii. Sample size 6. Questionnaire Design 1. Data Source: The researcher can get two types of data: a) Primary Data b) Secondary Data c) Data Recording a) Primary Data Primary data is a data which did not exist earlier and is being collected by the researcher first time for its specific objectives. In other words, direct collection of data from the source of information, including personal interview, telephonic interviews, with the help of Questionnaire. b) Secondary data Any data which have been collected earlier for some purpose are the secondary data. Indirect collection of data from sources containing past or recent past information like bank's brochures, annual publication, books etc. Secondary sources used are: Text books Internet sites Newspaper articles Broachers

2. Research Approach Survey is best suited for descriptive and analytical research. Survey are undertaken to learn about people's knowledge, beliefs, preferences, satisfaction and so on and to measure these magnitudes in the general public. Therefore, I have done this survey for Descriptive and analytical research process. 3. Research instrument Quesestionnaire: Questionnaire (also known as self-administered survey) is a type of statistical survey handed out in paper form usually to a specific demofigureic to gather information in order to provider better service or goods. A document that contains a set of theme, etc . A questionnaire was constructed for my survey. 4.Sampling plan Sample is a group of few items which represents the population or universe from where it has been taken. The sampling plan calls for three decisions; a) Sample unit b) Sample size c) Contact methods a) Sample unit who is to be surveyed? The target population must be defined that has to be sampled. It is necessary so as to develop a sample frame so that everyone in the target population has an equal chance of being sampled. I have completed my survey in Phagwara. questions that has been specially formulated as a means of collecting information and surveying opinions, etc on a specified subject or

b) Sample size - how many people have to be surveyed?

Generally, large sample size gives more reliable results than small samples. The sample consisted of 30 respondents. The sample was drawn from people having different educational qualification, age group, occupation and income. The selection of the respondents was done on the basis of Simple Random Sampling. c) Contact methods Once the sampling plan has been determined the Questionnaire is how the subject should be contracted i.e. by telephone interview, personal interview, observation, mail etc. here, in my survey, I have contacted the respondents through personal interviews. 5. Questionnaire Design : There are 8 questions in my questionnaire and I asked all these questions from 30 respondents in phagwara City. C) Collecting the information After this, I have collected the information from the respondents with the help of Questionnaire.

D) Data Analysis and Interpretation The next step is to extract the pertinent findings from the collected data. I have tabulated the collected data and developed frequency distributions. Thus, the whole data was grouped aspect wise and was presented in tabular form. Thus, frequencies and percentages were prepared to render impact of study. E) Presentations of findings This was the last step of survey.

LIMITATIONS OF THE STUDY

Although while collecting data full precaution are taken to get the correct data, but the collected data may have same biases in it. The biases in the data may be due to following reason: 1. The study is to be limited in Phagwara city only because of limited time and financial resources. So results of the study may not be generalized for India as a whole. 2. The sample size is limited to 30 respondents, so complete knowledge about subject is not possible. 3. Another factor could be the existence of biasness in the respondents mind. Many times these biasness have greater bearing on the responses put forward by respondents. 4. People generally considered me as a bank executive and tried to avoid discussions with me.

Customer Feedback The following is the result of the survey conducted for my project report. The sample size is 30. Q : 1 Type of loans and advances being availed from the branch Table - 1 Options Agriculture Loan Housing Loan Education Loan Vehicle Loan Personal Loan Fig.A Number of people 5 12 4 6 3 Percentage (%) 16.7 40 13.3 20 10

1 0% 20%

1 7% Agriculture Loan Housing Loan Education Loan Vehicle Loan Consum er/Personal Loan

1 3%

40%

Interpretaion:

From above study it is clear that people taking advantages of loan schemes of OBC bank as per figure 17% respondents availed agriculture loan and 40% respondents have taken house loan while 13% respondents take advantage of education loan. Due to better facilities 20% respondents take vehicles loan and remaining 10% take personal loan from bank. Q : 2 Facility of Instant credit for cheques upto 15000/a) In Case of local cheques on request Table - 2 Number of people 26 4 Yes/no Yes No Fig - B Percentage 86.67 13.33

13% Yes No 87%

Interpretaion:
From the above figure it is clear that in case of local cheques 87% respondents get instant credit facility for cheques upto Rs/- 15000 and remaining 13% say no about that facility .

b)In case of outstation cheques in the normal course Table - 3 Number of people 23 7
23% Yes No 77%

Yes/no Yes No

Percentage 76.67 23.33

Fig. C

Interpretaion:
It is clear from above figure that in case of outstation cheques (Normal case ) 77% respondent get instant credit for cheques upto Rs/-15000 respondent say no about that facility. and remaining 23%

Q : 3 Availability of loan application forms from the branch? Table - 4 Number of people 30 Yes/no Yes Fig - D Percentage 100

100%

Interpretaion:
Above figure clearly shows that availability of loan application forms in branch is 100% .

Q : 4 Considerations while availing loans and advances from the bank Table - 5 Options Banks reputation Interest rates Security demanded Time required for disbursement of loan Fig - E
3% 13% 0% Banks reputation Interest rates Security demanded 84% Time required for disbursement of loan

Number of people 25 4 1

Percentage 83.33 13.33 3.34

Interpretaion:
From the above figure it is clear that people avail loan from bank not because of its reputation . 84% respondents consider its interest rates while taking loan and 4% respondent have consider security demanded by the bank and remaining 1% consider the time required for disbursement loans.

Q: 5 Any inconvenience in the sanction of loan. Table - 6 Number of people 12 18 Fig. F Yes/No Yes No Percentage 40 60

40% Yes No 60%

Interpretaion:
From above figure it is clear that 40% respondents felt inconveniences in sanction of loan but remaining 60% get this loan conveniently

Q : 6 How are the services of the branch rated? Table - 7 Options Excellent V. Good Good Satisfactory Un-satisfactory Fig.G Number of people 2 5 7 12 4 Percentage 6.67 16.67 23.33 40 13.33

Excellent V.Good Good Satisfactory Un-Satisfactory

Interpretaion:
Above data shows that 7% respondent rated bank services Excellent and 17% respondent rated it very good ,23% rated bank services rated good due to its loan facilities while 40% respondent satisfy from bank and remaining 13% unsatisfied due to some inconvenience

Q : 7 Is the rate of inteterest charged on the loans satisfactory?

Table 8

Fig . H Number of people 21 9 Yes/No Yes No Percentage 70 30

30% Yes No 70%

Interpretaion:
A question about satisfaction with interest rates charged on loan revealed that 70% respondent were satisfy with banks interest rates and remaining 30% are not satisfied.

Q : 8 Whether the services are provided as per time norms Table No. 9 Number of people 22 8 Fig. . I Yes/No Yes No Percentage 73.33 26.67

27%

Yes No

73%

Interpretaion:
From the above figure it is clear that 73% respondents were satisfied with the time taken to provide services and remaining 27% were not satisfied.

Findings of Study
OBC bank serving different loan schemes according to the needs of the people .

In case of both local and outstation cheques majority of people get instant credit facility upto Rs/-15000.

Loan application forms are easily available in branch . People considered Interest rates of bank more while taking loan instead of its reputation , security demanded and time required for disbursement loans. Majority of people get loan from bank conveniently. OBC bank provide excellent services to his custmers,most of custmers satisfied from bank staff. Only the few custmers unsatisfied due to some inconvenience . Most of the respondents are satisfied with the interest rates charged by bank and remaining are not satisfied . Majority of respondents were satisfied with the time taken to provide services .

CONCLUSION

The customers now days are not only exposed of what type of service is being provided by banks in India but in the world as a whole. They expect much more than what is actually being provided. So the new coming banking sector has to provide and cater to all the needs of the customers otherwise it is difficult to survive in the competition coming up. After having done detailed study on the topic Customers Perception About Various Loan Schemes provided by Oriental Bank of Commerce, it has been concluded that Oriental Bank of Commerce is being able to achieve its corporate vision and mission tactfully and progressively by providing different types of loans schemes at competitive rate of interest. Gone are the days when it was too difficult for the middle class families to have their own dream house, to have car, to have TV, to have fridge etc. Now this all have become possible with the help of various loans given by at affordable rate of interest. Although many banks are providing these schemes but consumer prefer to avail loans from Oriental Bank of Commerce. About the awareness regarding the products offered by Oriental Bank of Commerce, I conclude that most of the people are aware but they still need more publicity among the citizens of the city.

From the study, I conclude that there are some weaknesses in the bank but as it is well growing bank, they are working hard to overcome these weakness and threats. Oriental Bank of Commerce has set all the strategies and mission after proper vision and is achieving the targets by working in co-operative and co-coordinated manner and giving the people full services and facilities and making work easy.

RECOMMENDATIONS On the basis of above study, the following suggestions and recommendation have been formulated. These set of suggestions might help the Oriental Bank of Commerce to improve the quality of service regarding loan provisions and at the same time these suggestions help the Oriental Bank of Commerce to face the competition in the market thereby achieving the success in the future. Firstly bank should create awareness among the common public about the various loan schemes of Oriental Bank of Commerce which provide them various services. In order to create awareness regarding the other loan provisions, electronic medium of media can put to use to advertise about the services provided by the bank. This help to change the attitude of the people regarding the Oriental Bank of Commerce. On the basis of the above study, we can say that in nowadays people prefer services of private sector banks rather than public sector bank. Therefore, Oriental Bank of Commerce should show their quality services and technology aided products to the people. The interest rates should be regularly revised and new plans should be introduced for the public which provides them more offerings and benefits. This helps the client to made positive attitude towards the bank

New strategies should be made by the bank which enables them to face the competition with other private leading banks like HDFC and ICICI. The management of the bank should be more efficient which enables in quick processing of the task either regarding loans. Customers generally complain that full knowledge is not granted to them. Thus the bank employees should properly disclose the features of the product and services to the customers. Moreover door to door services can also be introduced by bank. The need of the customer should properly be understood so that customer feels satisfied. The customer relationship management should be maintained. The bank should promote cooperation and coordination among employees which help them in efficient working. Maintenance of proper hierarchy should be done. A good hierarchy set up can ensure better results with in the bank.

Customer Feedback
Name : ________________________________________ Address : ______________________________________ Age : __________ Qualification: _______________ Profession / Business : ____________________________ Q: 1 Which type of loan would you like to avail from the branch Agriculture Housing loan Education loan Vehicles loan Consumers / personal loan

Q : 2 Do you get the facility of instant credit for cheques up to Rs. 15000/i) ii)

In the case of local cheques on request : Yes

No

In the case of outstation cheques in the normal course : Yes No

If not, please cite specific instance __________________________________

Q : 3 Are the loan application forms available in the Branch easily? Yes No

Q : 4 What are the considerations while availing loan and advances from the bank Bank reputation Security Demanded Q : 5 Have you felt any inconvenience in sanction of loan Yes/No If yes, kindly sate the specific instance: ____________________________ Time required for disbursement of loan Interest Rates

Q : 6 How are the services of the branch rated? Excellent Satisfactory V. Good Good

Unsatisfactory

Q : 7 Is a rate of interest charged on the loans satisfactory? Yes No

Q: 8 Whether the services are being provided as per time norms? Yes No