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1.1 INTRODUCTION

India has been a progressive nation ever since its origins 5000 years ago. Indians intellect has always been so advanced that it has set the pace of progress for the world to follow. It was India that gave the world many path-breaking inventions.

India contributed the numeral 0, innovated by Aryabhatta to the number system that is the very basis of the decimal and the places value systems. The art of navigation was born in India 6,000 years ago. Infact, the very word navigation has been derived from the Sanskrit word (Enaugatih). The game of chess is an Indian invention. This sense of intellectual adventure, exploration and experimentation has been our proud heritage. A heritage called swadeshi (of the nation). At the turn of the 20th century, the first rumblings of an organized freedom struggle were heard and felt across the length and breath of undivided India. The British had entered the country under the grab of the East India Trading Company, and it was through their sharp trading skills that they came to subjugate the entire Indian sub-continent. It was thus appropriate that against the backdrop of the Indian freedom struggle, there was an organization whose founder father had the clear objective of achieving economic independence, the last bastion of British dominance in India.

The ancient banking system of India constituted of indigenous bankers. They have been carrying on their old age banking operations in different parts of the country under different names.

Then came commercial banking in 1770 with the establishment of the first joint stock bank, named the Bank of Hindustan, by an English agency in Calcutta, but this bank failed in 1832. Infact, real beginning of modern commercial banking in the country was made with the establishment of the Bank Of Bengal 1806. Later on, the bank Of Bombay and Bank of Madras were also set up in 1840 and 1843 respectively. All these were called presidency Banks. 2

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, much other business works. 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 advance in lump sum against some security of otherwise it is called a loan. In this case a fixed amount is sanctioned by the bank of 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 money usually charges an interest for use of money. The amount of money borrowed is typically repaid with interest over a period of time.

We can say that entire loan amount is paid to the borrowed 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 provide 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.

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 preference, their views, ideas, beliefs, can be easily judged by making a survey on the consumer perception regarding loans provision.

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1.2 INTRODUCTION TO PUNJAB NATIONAL BANK

HISTORY THE PUNJAB NATIONAL BANK was the bank in its times to commence operation without a gora sahib or white man at the helm of its operations. It was the brainchild of Sir Sorabji Pochkhanawala, a visionary, who overcome the odds to setup, what can be called the first truly Indian bank. So Punjab National Bank was the that was created and run by Indians, for Indians. A bank that harnessed the Indian business acumen and banking talent to offer banking and financial solutions to the nation.

Before independence British firms by and large preferred to hire true-blue Britishers to work for them. The Bank of Bombay was the first presidency bank to make a start in indianising its officer cadres. However, while the Indianisation process had started, European officers continued to enjoy special privileges. For example the secretary and treasurer of the Bank of Bombay, an European was given a salary of Rs 2000p.m. while an Indian earned Rs125p.m. in the highest rank he could hope to achieve that of a head clerk.

At this stage when some Ahmedabad merchants proposed the opening of a branch under an Indian manager then Sir Sorabji felt that he could have filled the post quite easily given his experience of eight years in the Indians, and especially so in the area of banking given their long standing tradition in the trade. Therefore he strongly felt that establishing an all Indian Bank would be a tool to break the myth of superior European intellect. And it was thus that the idea of the Central Bank of India took birth. It was to be a dream bank comprising on all Indian staff.

After all that was needed was capital to the tune of Rs 10 to Rs 20lakhs. Sir Sorabji discovered, people who were relevant to the invest in such a venture. He along with Kalianji Vardhaman Jetsey, a business acquaintance began to look for investors in earnest. The funds for immediate requirement were made available by Jetsey himself and almost immediately, they were able to locate an official address for themselves at promises, which had just been vacated by Eastern Bank. The Central Bank of India was a reality. 5

Their board at this point comprised Manchersha F.Khan; Ardeshir Bomanji Dubash, Manekji Jethabhai Vardhman, Mulji Haridas, Radha Kishon Lakshmichand, Motilal Kanji, Haji Dawood Haji Elias, Jamestji H Chothia, and Jetsay and Sir Sorabji themselves. Their first chairman was Sir Pherozeshan Mehta.

The Punjab National Bank was now ready to get into business with a capital of Rs 50 lakhs divided into shares of Rs 50 each. 40,000 shares were issued to the public and they were subscribed by the 15th of March, on which data the share list was closed. The Punjab National Bank was formed on 21st December 1911. On the first day of its operations, a large number of merchants visited the Bank offices and over seventy current Accounts totaling a lakh and half rupees had been opened within a week. Thus, Sir Sorabhjis faith in himself and fellow countrymen stood indicated.

THE SYMBOL TODAY The symbol is a graphic expression of the objectives of the organization in an abstract form. The symbol and the logo are accompanied with a base line, which is the motto of the organization.

The Punjab National Bank had changed its symbol, logo and base line in 1982 so as to state its objectives in more clear and better terms and to give a new meaning to its motto. The common man generates savings that are mobilized and canalized for the development of industries. The industries contribute to the prosperity of the nation. The nation in turn provides for the welfare of man.

The four squares in the symbol of the Bank represent the four local points, namely, Man, Finance, Industry and Nation evolving their harmonious inter-relationship, on which the Bank focuses the services rendered by it vis--vis its role in the economy. The bars that join the squares effectively depict the two-way interactions between the said focal points of the Bank. Further, the symbol implies the banks role in establishing the desirable balance

between Man and Industry and between the Nation Finance by placing the focal points at top, bottom and at sides respectively. The message explained above is well brought out in the banks motto BUILD A BETTER LIFE AROUND US as the base line.

THE MANY FIRST OF PUNJAB NATIONAL BANK Over the years, The Punjab National Bank has taken many pioneering initiatives that have laid the ground for future banking trends: The first bank to open special accounts for women and children to promote thrift and saving in 1921. The first bank to have its own in-house magazine to create an empowered workforce. The first bank to set up a library of its own for the benefit of employees in 1922 The first bank to introduce the buying and selling gold bars in commercial sizes of 5 and 10 tolas. The first to introduce a special ladies Department in 1924 in its Bombay office to cater to its lady customers. The first Indian managed bank to deposit funds of municipalities, port trusts, etc and to issue rupee Travelers Cheques. The first to contract a safe Deposit Vault in Bombay in March 1926. The first to establish a subsidiary of the bank in 1929 by the name of Central Bank Executor & Trustee Co. Ltd. The first bank to issue Cash Certificates in 1931. The first to actualize their agricultural focus by establishing Mandi Pay Offices where cultivators avail of advances till prices were established. The first bank to establish a subsidiary bank in England for the transaction of foreign exchange in 1936. The first Bank to launch its own Credit Card Central card. The first to introduce the concept of the Recurring Deposit Scheme in 1962 and subsequently, even after the nationalization of the bank in the year1969. The first to introduce the Debit Card in December 2001. 7

 1.3 INTRODUCTION TO THE STUDY

1. THE LOAN POLICY OF THE BANK AND ITS OBJECTIVES: The Bank has, in keeping with the RBI Guidelines, evolved and formulated a well defined Loan Policy. The basic objectives of the Loan Policy of the Bank are to channelize the flow of fund for productive use i. ii. To properly apprise and evaluate Loan Proposals. To ensure credit facilities are released in time.

2. DEPLOYMENT OF CREDIT: The Bank, keeping the economic situations and the prospering and upcoming sectors in mind has identified certain industries and areas as "Thrust Areas" and certain industries are placed under restrictive exposure. Thrust areas: i. ii. iii. iv. v. vi. vii. viii. ix. Export Credit Retail Banking Infrastructure Finance (power, Telecommunication, Roads, and Ports) Information Technology (IT Industries) Pharmaceuticals Housing Fast Moving Consumer Goods (FMCG) Food Processing Industry High Tech Agriculture

Industries wherein further exposure is restricted. i. ii. iii. iv. v. vi. vii. Sugar Oil & Oil Industries. Textiles Automobiles Jute Cement Real Estate 8

3. EXPOSURE NORMS: The borrowers' requirements are determined on the basis of their Net Worth. The ratio of the net worth to the bank credit of the borrower shall not normally exceed 1:4. THE BANK'S APPROACH TOWARDS DIRECTED CREDIT: PRIORITY SECTOR CREDIT: The Bank's role in the priority sector lending is in tune with the national objectives keeping in mind with the national policy and RBI Guidelines from time to time. 1.1.Agriculture: In view of importance of Agriculture in country's economy a sizable share of bank's total lending is allocated to this sector. The credit policy is also reoriented from time to time to meet the increasing needs of these sectors. The Bank extends direct and indirect advance, a few of which, are indicated below: Direct finance

Short Term Loan for raising crops i.e. Crop Loans Medium and Long Term Loan - to plantations, horticulture, forestry etc. Purchase of Agricultural implements and machinery Development of irrigation potential Reclamation and Land Development Scheme Constructions of Farm buildings and structures Constructions of running and storage facilities. Loans to farmers through farmers societies. Loans to co operative marketing societies Advances to State sponsored cooperatives for onward lending to weaker sections.

Indirect Finance

1.2. Small Scale Industries (SSI): The SSI sectors cover wide range of enterprises with diverse characteristics. This sector consists of tiny enterprises, small-scale service business enterprises, artisans, khadi and village industries, Woman enterprises and sophisticated modern small scale units engaged in manufacturing, processing or preservation of goods. The types of facilities, which are generally needed by such units and granted by the Bank, are as under: 9

Term Loans Working Capital Loans Composite loans Deferred Payment Guarantee Clean Limits Financing of exports Financial/Performance Guarantee Other Priority sector:

1.3.

The advances made to the following category are being classified as other priority sector advances:

Transport Operators Retail Trade Professional and self employed Business enterprises Advances granted under DRI. Advances allowed for consumption needs and construction of houses and tenements for weaker sectors.

4. EXPORT CREDIT: In view of the paramount importance of the Export Credit and in tune with the Govt. Guidelines, the Bank is keen in financing exports. Processing/ Disposing of Export Credit proposals are being given preferential treatment. Some of the following facilities which are allowed under export credit are:

Pre-shipment finance. Post-shipment finance. Foreign currency loan. Foreign letter of credit. Foreign guarantee. Term loans.

In order to meet exporters credit needs expeditiously the following time norms are fixed. All export credit proposals received with complete details are required to be processed within the following time frame. 10

Fresh/enhancement proposal Renewal proposal

45 days 30 days

Additional/Adhoc facility proposal 15 days At the branch level the branch manager is acting as "help line" and ensures the prescribed time limits are adhered while handling export credit proposal.

5. TYPES OF LOAN: Customers can avail the following facilities from the Bank such as: a) Loan against Bank's Term Deposit Receipts: Advances to the extent of 90% of the maturity value of the deposit can be granted as loan. The interest on such advances will be 2% over the applicable deposit rate. However the loans against the third party deposits will bear interest in consonance with the activity of the borrower and linked to bplr. b) Loan against approved shares, Debentures and Mutual Funds: The Bank grants loans to individuals against the security of shares and debentures to a maximum of Rs.10 lakhs in case of physical form of shares and Rs. 20 lakhs in case of Demat form of shares. The margin and rate of interest are as under: Physical form of share: - Margin 50% Int bplr+4%. Demat shares: Margin 40% Int bplr+3.5%

c) Loan against Govt. Securities like NSCs, IVPs, KVPs, LIC Policies: The Bank also considers advance against the said securities to the customers on need based. In case of LIC Policies 90% of the surrender value of the LIC policy is eligible for bank finance. In case of NSC, the quantum of advances is based on its value and margin is fixed at 40%. The salient features of these schemes are enumerated below: Cent buys Cent vidyarthi Cent vayapari Housing loans to individuals Personal loan to corporate employees Cent computer etc 11

6. METHOD OF ASSESSMENT: Limits to the various borrowers are assessed depending upon their requirements and their line of activity. Turnover method (Working Capital Requirement): Under this method the bank finances maximum of 20% of the projected sales of the borrower and the borrower has to contribute 5% as his margin. This method is applicable for the following sectors: i. ii. For SSI borrowers up to Rs.5.00 crores. For Non SSI borrowers up to Rs. 1.00 Crore. Maximum Permissible Bank Finance (MPBF) Method: Under this method the borrowers requirements are assessed based on the past practice/holding levels while the projections should be reasonably conform to the past trends, deviations can be accepted subject to satisfactory justification. This method is called as Tandon Committee Method of lending. It is applicable for working capital requirement of the borrowers coming under the following categories: I) For SSI Borrowers: Rs.5 crores and above but less than Rs.50 crores II) For non SSI Borrowers: Rs.1 crore and above but less than Rs.50 crores Cash Budget Method: The borrower is required to submit the cash budget to the bank along with actual as well as projected financial statements. The budget in the prescribed format is to be prepared for a period of one year and then split into forecasts for shorter periods say monthly or quarterly. The budget will provide the following information. i. ii. The peak level of bank finance required during the course of the year. The current level of bank finance required as forecasted by the split budget (on monthly/quarterly) basis. The following borrowers are assessed under this method: a) Borrowers dealing in Cyclical industries like tea, sugar etc.

b) Borrowers availing Fund Based Working Capital limits of Rs.50 crores and above from the banking industry. 12

7. CREDIT SANCTION PROCEDURES: How to Apply For Bank Finance: The borrower/s who intends to avail facilities from the Bank is required to submit the following: i. ii.
o o

To submit an application form for credit facilities in the prescribed format.

Status report from the present bankers (for new accounts) Last three years audited balance sheet with profit and loss statement, in case of existing borrower/s. Current year's estimate and following years projections should be submitted by all the borrowers i.e. existing as well as new borrowers.

iii.

Statements of assets and liabilities, along with income tax, wealth taxes returns of the firm/company/directors/ partners, etc, if any.

iv.

Any other relevant information connected with the proposal.

The sanctioning of the limits will be made on proper scrutiny and appraisal by the appropriate authority within the lending powers vested with them, subject to observance of the following bench marks

Maintenance of the current ratio at 1.33 Debt Equity Ratio (Total outside Liability/Tangible Net Worth) normally not to exceed 2: 1.

The appraisal will also include assessment of the company profile and industry profile.

In case of traders and stockiest, the deviation in TOL/TNW is allowed subject to availability of collateral security

The limits sought are to be within the norms determined by the bank internally and as per the parameters announced by RBI from time to time.

The facilities sought by the borrower/s within the framework of the bank's policy and guidelines.

Collaterals, securities and Guarantors are determined on case to case basis depending upon the risk perception involved in the proposal. 13

8. RATING OF BORROWERS: PRIME LENDING RATES: As per the extant guidelines the bank is fixing Rate of Interest based on the market factors. The present Bbplr of the Bank is 11.5% and the Bank fixes the rate within the maximum band of 4% i.e. between 12% to 16% depending upon the purpose for which loan is taken and on the credit rating of the borrower. The Bank extends various types of credit facilities for working capital, Term Finance and Non Fund Based facilities and other fee based activities to its borrowers.

CREDIT RATING FOR INTEREST APPLICATIONS AND PRICING MECHANISM: The following criteria are taken in the account and the borrowers are given weightage and awarded ratings for charging interest in their accounts. The Borrowers enjoying limits of Rs.1 Crore and above are further fine rated depending upon the availments of limits and the extent of ancillary income provided by them. CRITERIA: I. II. III. IV. V. Compliance of all terms and conditions of sanction. Current Ratio. Debt Equity Ratio. QIS/Stocks & Renewal Data Prompt service of interest, installment and qualifying for classification under Standard Assets. VI. VII. VIII. IX. X. XI. Inventory norms Compliance of Bills culture Payment of bills on due dates Timely renewal of limits Prompt fulfillment of LC/LGs commitment on due dates Providing substantial deposits/business and overall association with the Bank.

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9. PROCESSING CHARGES: The Banks recovers the following charges in borrower accounts:

Processing charges Inspection charges Supervision charges Lead Bank charges Commitment charges Commission on guarantees and letter of credits. Up front fee.

The Bank apart from charging normal interest on the facility sanctioned also charges penal interest in the following cases:

Non submission of stock statement, financial statement, Non-payment/non acceptance of demand/usance bills of exchange on presentation to due dates.

Non payment of term loan installment on due dates Non compliance of terms of sanctions

DIFFERENT LOAN SCHEMES PROVIDED BY PUNJAB NATIONAL BANK CENT TRADE 1. ELIGIBILITY: All types of traders including retailers, distributors, commission agents, and arhtiyas. 2. NATURE OF FACILITY: Secured overdraft. 3. QUANTUM OF FINANCE: Maximum Rs.20 lacs per turn over method. 4. PURPOSE: To meet working capital requirement / business expenses. 5. SECURITY: Equitable Mortgage of residential house/flat, commercial or industrial property situated in METRO/URBAN/SU/RURAL centers in the name & possession of the borrowers (self occupied or vacant). Value should be equal to 200% of limit. Property in the name of spouse may be accepted as security by making the owner either co borrower or guarantor. 15

6. GUARANTEE: Personal guarantee of joint/co-owner of the property, if any. 7. RATE OF INTEREST: Up to Rs.2 lacs PLR Over Rs.2 lacs PLR+2% 8. CONCESSIONS IN INTEREST RATE: Case to case basis DGM & above upto PLR+15% 9. PROCESSING CHARGES: Upto Rs.25000 Nil Above Rs. 25000 Rs.250 Upto Rs 1 lac Above Rs.1 lac Rs.500 Upto Rs 2 lac Above Rs.2 lac Rs.2500 Upto Rs 10 lac Above Rs.10 lac Rs.5000 Upto Rs 25 lac 10. REPAYMENT: On demand Limit will be for 12 months. To be renewed / reviewed annually. 11. SANCTIONING AUTHORITY: Branch Manager Scale I Branch Manager Scale II Branch Manager Scale III & Above 12. INSURANCE: Property to be insured for fire, riots & wherever required against earthquake, flood, lightening etc. with usual bank clause for full value of the property. 13. GENERAL: Borrower should exclusively deal with our bank & route all turnover through the account. Branch to regularly monitor, credit/debit summations. 14. REPORTING TO R.O./Z.O.: On monthly basis. 16 Rs.5 lacs Rs.15 lacs Rs.20 lacs

CONSUMER FINANCE SCHEME CENTBUY 1. ELIGIBILITY: This scheme is open to all Resident Indians who are either (a) Permanent Salaried Employees or (b) Individuals other than Salaried Employees. Finance can be extended to the borrowers either individually or jointly with Spouse who has regular source of income. Joint application is allowed only along with the Spouse. 2. PURPOSE: Purchase of all kinds of Consumer Durable Articles and Four Wheelers / Two Wheelers. Finance can be extended for purchase of Second hand cars, which are certified by car manufacturing companies under their schemes, through their Authorized Dealers, subject to condition that such car should not be older than 3 years and expected residual life of the car, should not be less than 10 years.

3. QUANTUM OF FINANCE: a) Consumer Durables and Two Wheelers: Rs.2 Lakhs (maximum) b) Four Wheelers: Rs.10 lakhs (maximum) Quantum of finance would be dependent upon the repaying capacity of the applicant 4. MARGIN: a) Consumer Durables and 2-wheelers: 15% b) 4- Wheelers 20% c) Second hand Vehicles 25% 5. INTEREST: BPLR + 1.00% = 12%. The rate once fixed will be in force during the entire currency of the loan, with minimum rate of interest 12% p.a. 6. REPAYMENT: The loan for 4-Wheelers is repayable in 84 monthly installments and the loans for, other purposes is repayable in 48 months. Post dated cheques for the entire repayment schedule shall be collected at the time of disbursement of the loan except in the case of permanent salaried employees who produce an irrevocable undertaking from their employer. The undertaking should be for deduction of the monthly installments from their salary and also from bonus / exgratia payment / terminal 17

dues in case of retirement, death, cessation of service for any other reason and any other dues from the employer and further remittance to the Bank. The branch should ensure to encash the cheques on due dates and credit the amount to the loan account. 7. SECURITY: Hypothecation of articles or the Vehicles purchased. In the case of Vehicles our Charge should be registered with RTO. 8. DISBURSEMENT: a) In the case of Consumer Durables, the borrower should submit a declaration that he/she will be purchasing the articles as mentioned in the loan application and the said declaration will be attached to the hypothecation agreement and would form part of the agreement. On the basis of the said declaration the amount may be disbursed to the borrower. b) In the case of 2-Wheeler and 4-Wheeler the customer should submit Performa invoice from the dealer and on that basis after collecting the margin, amount will be paid to the dealer by means of Pay Order or Demand Draft. c) In the case of Second Hand Vehicle, the amount would be given to the seller of the vehicle by means of Pay Order or Demand Draft. 9. DOCUMENTS: a) Letter of hypothecation-and- term loan agreement. b) Letter of interest and interest revision letter c) Letter of guarantee wherever required. d) Letter of undertaking from the borrower for comprehensive insurance of the articles purchased to cover risk of theft, fire etc. with bank clause. 10. PROCESSING CHARGES: 1.00% of the loan amount subject to a minimum of Rs.100. The amount should be

recovered at the time of disbursement. Zonal Manager may waive on merit 11. SANCTIONING AUTHORITY: a) All delegated authorities can sanction loans under Cent Buy within their delegated lending powers. b) Loans for Second Hand Vehicles can be sanctioned by Zonal Managers only.

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12. GUARANTEE: In addition to the primary security, i.e., hypothecation of articles/vehicles purchased under the scheme, a guarantee from a person whose worth is not less than the loan amount should be taken. Alternatively, the borrower may provide NSC/Units / approved shares/Landed property etc, the market value of which should not be less than the loan amount. 13. OTHER CONDITIONS: a) Zonal Managers can sanction take over of outstanding balances of good consumer loan accounts for four wheelers from other banks provided there are no over dues with the existing bank and also the account is classified as Standard. Such loans can be taken over without insisting for any margin and the borrower is otherwise eligible for loan under this scheme. b) Branch Managers should carry out inspection on a random basis and especially the accounts where installments are not being paid regularly should be inspected. c) Alco may revise interest rates for Four Wheeler Finance from time to time depending on market conditions. d) In the case of loans for purchase of 4-Wheelers, the applicant whether a salaried employee or otherwise should necessarily be an Income-Tax Assesses. The applicant

should furnish a copy of the latest Income-tax Return along with the application for finance. e) In the case of accounts taken over the repayment period should not be more than 84 months including the expired period.

PERSONAL LOAN SCHEME TO EMPLOYEES OF CORPORATE CLIENTS

1. NATURE OF LOAN: Personal Loan 2. ELIGIBILITY: Permanent employees of large corporate clients/other very reputed companies not having credit limits with us. 3. PURPOSE: To meet any personal/domestic expenses of the borrower.

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4. QUANTUM OF LOAN: Ten times of gross salary subject to a maximum of Rs.100, 000/-. Net take home pay after taking into account the proposed loan installments should not gross salary. 5. RATE OF INTEREST AND MODE: BPLR + 2 % with effect from 20.03.2003. 6. REPAYMENT: 36 months in equated monthly installments commencing be less than 50 % of the

one month after the month of disbursement. Employer should give an irrevocable undertaking to deduct from the salary and pay

the monthly installments to Bank, till full adjustment of loan amount. Undertaking should cover deductions not only from salary but also from bonus /

exgratia payment / terminal dues in case of retirement, death, cessation of service for any other reason and any other dues from the employer.

2. PROCESSING CHARGES: 1 % of the loan amount. 3. SANCTIONING AUTHORITY: Authorities in the rank of Chief Manager (Scale IV) and above are to authorize to sanction the loan within the delegated powers given for sanctioning clean loans. 4. OTHER TERMS: i. No loan should be given when the existing loan Conditions remain unadjusted. ii. In case the corporate are our borrowers, the following aspects are to be taken into account. The Networth of the Company should not be less than Rs.10 crores and have satisfactory dealings with our Bank. The Company should be a profit making Company for the last three consecutive years. The other financial parameters should be satisfactory.

iii. In case the corporates that are not our borrow then apart from satisfying the conditions listed above, the Sanctioning Authority should call for the last three years audited Balance Sheets of the Company and properly analyze and satisfy about their financial strength. The 20

Sanctioning Authority should also call for the report from their Bankers and be satisfied with conduct of the account. iv. Total of such loans to all the employees from a particular corporate from our Bank should not exceed Rs. 300.00 lacs (subject to maximum of 20 % of their Net Worth) v. No roll over should be allowed for the individual borrower. vi. The Branch, where the employees keep the accounts, should ensure that the monthly instalments are regularly received from them. i. D.P. Note, Salary Certificate duly authenticated by the employer, undertaking from the

employer to remit the installment amount to the Loan Account should be taken at the time of sanctioning the loan. ii. A short Annual Review should be submitted to Central Office mentioning whether there are any defaults; the financial position of the Corporate continues to be satisfactory and recommending continuance of the limit.

PERSONAL LOAN SCHEME TO EMPLOYEES OTHER THAN CORPORATE EMPLOYEES

1. NATURE OF LOAN: Personal Loan to employees of Non-.Corporate Bodies 2. PURPOSE: To meet personal/domestic expenses 3. FACILITY: Demand Loan 4. ELIGIBILITY: Permanent employees of Railways, Govt. Institutions, Central and State Govt., Schools, Hospitals etc. having completed 5 years of service, drawing salary through our branches. Zonal Manager may waive condition that Salary should be received through our Bank Branch, in case of State/ Central Govt. employees, if concerned Department gives an undertaking to deduct the monthly installments from Salary of the Employees and remit to the bank till adjustment of the loan amount and also to recover Banks dues from terminal benefits of the employee in case of termination of services for any reason including death 21

5. QUANTUM OF LOAN: 15 times of Gross Salary Maximum of Rs. 2 lakhs per employee (net take home pay including the proposed loan installment should not be less than 50% of Gross Salary). 6. RATE OF INTEREST: PLR + 2% 7. REPAYMENT: 48 Equated Monthly Installments or within the leftover service whichever is less. Installments to commence one month after the month of disbursement. Post dated cheques to be obtained. 8. GUARANTEE: Guarantees by co-borrowers/employees of equal worth. 9. SANCTIONING AUTHORITY: Regional Manager and above. 10. PROCESSING CHARGES: 1% of Loan amount, Minimum Rs. 250/-. 11. OTHER CONDITIONS: No further loan should be given when existing loan remains unadjusted. 12. DOCUMENTS: DP Note, Salary Certificate duly authenticated by the Employer.

LOANS TO PENSIONERS DRAWING PENSION AT CENTRAL BANKS BRANCHES. Pensioners are respectable senior citizens of the society and have to meet several family obligations with limited means of pension amount. In view of their advanced age and fixed/limited monthly income they are deprived of any loan scheme. Hence a scheme for loans to Pensioners has been formulated.

1. PURPOSE: To meet any genuine credit requirement of the pensioner for personal purpose. 2. NATURE OF FACILITY: 22

Demand Loan. 3.ELIGIBILITY: Pensioners drawing pension at our branches. 4. QUANTUM OF LOAN:

Age of Pensioners Upto 65 years Above 65 years to 70 years Above 70 years

Quantum of Loan *6 months pension *3 months pension *2 months pension *Or Rs.25,000/- whichever is lower.

5. RATE OF INTEREST: BPLR + 3% (for general pensioners) BPLR + 2% (for ex-staff of Central Bank of India drawing pension). 6. REPAYMENT: Age of Pensioners Upto 65 years Above 65 years to 70 years Above 70 years Repayment Period 36 Equated Monthly Installments. 24 Equated Monthly Installments. 12 Equated Monthly Installments.

7.

GUARANTEE: A good third party guarantee acceptable to the Bank.

8. SANCTIONING AUTHORITY: Branch Manager in Scale I and above. 9. OTHER TERMS AND CONDITIONS: A letter of Authority to be obtained from the borrower for debiting the EMI to the Pensioners Saving Account and crediting the same to the loan account till it is closed. A fresh loan or enhancement can be sanctioned to a borrower only if the existing loan is regular subject to overall ceiling per borrower. No loan shall be granted for repayment of borrowing from other Banks. 23

DP Note and change of interest rate letter to be obtained along with documents.

CENT COMPUTER LOAN In the present era of Information Technology, a large number of students are enrolling themselves in Computer-related courses such as BCA/ MCA, BIT/MIT etc. Besides, other students are also undergoing various courses conducted by institutions like NIIT, APTEC, TULEC etc. and several of them are interested in purchasing their own Personal Computers for practice at home or vocation. In order to help such students, we introduce a new loan scheme as detailed below: 1. PURPOSE: Purchase of Personal Computer and other accessories (New and of a reputed brand) 2. LOAN AMOUNT: 75 % of cost, maximum Rs. 50,000/3. MARGIN: 25 % 4. RATE OF INTEREST: BPLR + 2 % 5. REPAYMENT: In 36 equated monthly installments, commencing from next month of disbursement. 6. SECURITY: Hypothecation of Personal Computer and Accessories. 7. COLLATERAL SECURITY: Any of the following having market value/ worth not less than loan amount: i) Equitable Mortgage of landed property, or

ii) Lien on FDRs/NSC/KVP/IVP etc./Assignment of LIC Policies / Pledge of approved Shares/Debentures / Bonds etc., or iii) Third Party Guarantee. 8. OTHER TERMS: a) Father/Guardian of the student will be the Principal Borrower. If student is major (if not, after attaining majority) he will be taken as Co-Borrower. b) Father/Guardian should have known source of income and capable of repaying the installments. 24

c) Computer and accessories will be comprehensively insured with Bank Clause. d) Student must have secured admission in the eligible course. 9. PROCESSING CHARGES: Rs. 500/- per proposal, to be recovered immediately on sanction. 10. SANCTIONING AUTHORITY: The delegates may sanction proposals within their Delegated powers after observing usual precautions. The advance will be classified under Non-priority Sector. The scheme should be marketed and popularized amongst the students and their parents. Response received and progress made should be reported to the respective Controlling Office on monthly basis like in other new loan schemes of the Bank.

PUNBVYAPARI

In order to boost our business under Trading Sector, Punjab Nationl Bank have introduced a new scheme, named as PUNBVYAPARI specifically targeting the small and medium traders, with an intention to market it through our Urban & Semi-Urban Branches.

1. ELIGIBILITY: The Scheme is intended for all types of traders, including the retailers and distributors.

2. QUANTUM OF FINANCE: The facility under this scheme is to be extended by way of Cash Credit Limit upto a maximum of Rs. 10.00 lacs per borrower. 3. ASSESSMENT OF WORKING CAPITAL: a) The limits are to be assessed as per the turnover method, i.e. 20 % of the projected Turnover. However, it should be verified that projections are reasonable compared to the turnover as reflected in the sales tax returns of the previous years. Copies of SalesTax Returns should be obtained and kept on record. However, submission of sales tax registration / returns may not be insisted in case of following types of borrowers: i. Who deal in commodities, which do not come under purview of Sales Tax. 25

ii.

Whose activities are such that filing of Sales Tax Return is not required.

iii. Newly started business. b) In such cases sanctioning authority should be satisfied regarding the projected sales considered for sanctioning limit based on available record / documents / information etc.and assess turnover on realistic basis taking due care. The Sanctioning authority should ensure that the limit sanctioned is as per the assessment of working capital as stated above and in line with the securities offered. c) In case of advances up to Rs. 5.00 lakhs under this scheme, drawing power can be calculated by taking into account the combined value of both Stock & Sundry Debtors and deducting there from the value of Sundry Creditors. However required margin should be kept. d) However, for limit over Rs. 5.00 lakhs existing system of calculating Drawing Power on the basis of paid stocks would continue. 4. MARGIN: A minimum margin of 25 % on Stocks should be maintained. For limits up to Rs.5.00

lakhs, margin of 25 % should be kept on the combined value of stock and sundry debtors less sundry creditors. 5. SANCTIONING AUTHORITY: The Branch Managers in Scale I and above can sanction the above facility.

6. REQUIRED DETAILS FOR APPRAISAL: i. ii. Application Form The Financial Statements, viz. Profit & Loss A/c, Balance-sheet etc. should be obtained. However, in case the borrower not maintaining proper books of accounts, the basic details as mentioned in the application can be obtained from the borrower duly signed by him. iii. Copy of Sales Tax Registration and its number, wherever possible. It should be verified that the registration is valid. iv. Details of property offered as security and its latest valuation. The valuation has to be done by Branch Manager as per format in annexure A.

26

v.

Proper Market enquiry about the borrower should be made and details of the enquiries made should be recorded in the Process Note properly.

7. RATE OF INTEREST: Quantum of Loan Upto Rs. 2.00 lakhs Over Rs. 2.00 lakhs and Up to Rs. 10.00 lakhs 8. SECURITY: i. Hypothecation of Stocks and book debts wherever book debts are taken in to account for arriving at drawing power. ii. Equitable Mortgage of land & building The value of the property to be mortgaged should be at least equal to the limit sanctioned. 9. DOCUMENTATION: i. ii. iii. iv. v. D.P.Note Letter of Continuity. Letter of Hypothecation of Stocks. Letter of Interest Variation. Agreement of hypothecation of book debts where sundry debtors are taken into account for calculation of D.P. vi. Other documents relating to the constitution of the borrowers such as proprietorship, partnership etc. as prescribed in the manual of instructions. 5. CREATION OF EQUITABLE MORTGAGE: The branch should ensure that valid and proper equitable mortgage is created by deposit of original title deeds. The branch should carry out the following: A search Report from Banks approved advocate should be obtained clearly mentioning that the title to the property to be mortgaged is clear, marketable and without any encumbrances. A Valuation Report in respect of property offered should be kept on record. The Performa Valuation Report which is to be used for compilation is enclosed. Two officers should sign the same. 27 Rate of Interest BPLR BPLR + 2.0 %

Proper recital should be made in the Memorandum of Deposit of Title Deeds Register. In the States where E.M. attracts stamp duty, the recitals should be adequately stamped, as per the Stamp Act.

6. OTHER TERMS & CONDITIONS: i. The borrower should exclusively deal with our bank and an undertaking to this effect should be taken and kept on records. ii. iii. Securities offered to the Bank are to be adequately insured with bank clause. These advances are exempted from the levy of Supervision Charges and Inspection Charges. iv. Processing Charges should be recovered as under: Nil Rs. 250.00

Upto Rs. 25,000/Above Rs. 25,000/- upto Rs. 1.00 lakh. Above Rs. 1.00 lakh upto Rs. 2.00 lakhs. Above Rs. 2.00 lakhs upto Rs.10.00 lakhs. 7. i. ii.

Rs. 500.00

Rs. 2500.00

MONITORING OF BORROWAL ACCOUNTS: Stock Statement should be submitted on monthly basis. The branch should regularly check the credit summations in the accounts and ensure that the accounts are properly conducted and the withdrawals are mainly for working capital purposes.

iii.

Inspection should be conducted at regular intervals, say, at least once in three months so as to ensure that enough stocks are held by the borrower to conduct normal business and also to verify the sales figures from books and sales tax returns, wherever possible.

iv.

The accounts are to be reviewed/renewed every year. This supercedes the terms and conditions of the scheme as mentioned in the circulars referred to herein above.

v.

Where sundry debtors are taken into account for calculation of D.P. statement of book debts be obtained and only book debts less than 3 months old should be taken into account Instructions regarding Know Your Customer should be strictly followed. 28

vi.

29

REVIEW OF LITERATURE

Sheena (2008) concluded that Capital of any economic unit may be actegorized into two components; (1) Fixed capital (2) Working capital or circulating capital.Fixed assets are assets of a relatively permanent nature, used in the operations of a business undertaking. They are necessary for the manufacturing firms, since production would be impossible without them. While there have been a large number of studies focusing on fixed capital; studies on working capital have been few and far between. This is an exhaustive study of working capital management in one of the major and fast expanding industries of India namely, the automobile industry. 30

Malhotra (2008) The future profitability of banks would depend on their alertness, operational efficiency, customer orientation, creation of large volume of performing assets, attainment of optimum levels of productivity. Since retail customers are fast becoming more demanding in the current competitive environment, banks have to offer value-added services. Harnessing technology to improve productivity, to ensure required standard of customer service and internal efficiency, continual product innovation and strengthening of competitive edge on an ongoing basis to mass business will be the key factors that will impact banking sector in the days to come. Ensuring optimum performance by each manager and staff will also be vital. Another critical factor upon which would hinge the future of banking system would be the ability and competence of banks to build up large volumes of quality assets in a constantly increasing competitive environment, while adhering to prudential norms and maintaining prescribed levels of capital adequacy on risk assets simultaneously. Productivity and efficiency will be the watchwords in the banking industry in the years ahead. Continuous quest for skill upgradation at all levels, development of vision, mission and commitment are some of the aspects, which require urgent attention by the banking industry in future. Darwins principle of survival of the fittest may, in all likelihood, operate in the case of banks too. Banks, which are proactive, respond quickly to the changing needs of the customer, and give adequate attention to the changing scenario, alone can survive successfully, perform well and prosper.

Rice (2009) concluded that an analysis of environmental accounting and report (EAR) practices of Indian corporate sector has been made. It reveals that accountants in India are well aware of the fact that environmental issues will affect business and industry in the near future. They are convinced by the need for accounting of Environmental information.

Despite this awareness, there is an absence of external environmental accounting. The companies in India do not have a proper environmental accounting system to determine environment related costs, benefits, assets and liabilities. Indian companies also fail to provide adequate disclosures on environment. Though non financial/descriptive disclosures in the annual reports have increased overtime, yet the quantitative and financial environmental reporting is negligible. Without any strict accounting pronouncements from the ICAI and disclosure norms by the regulatory authorities, the companies generally provide 31

only statutorily required, qualitative, and positive information on environment. These disclosures lack in quality and consistency. It can, thus, be concluded that there is a low level of EAR activity in India. The accounting profession in India has yet to respond to the issue of environmentalism and help the companies in dealing with environmental matters in the books of accounts.

Oxemberg (2009) studied and concluded that focuses on overall evaluation of risk management system adopted by Indian Public Sector banks. Studies non performing asset of Public Sector Banks and the impact of credit risk on performance of Public Sector Banks and estimates liquidity risk of public sector banks. Evaluates credit risk of public sector banks.

Chanda (2010) studied and concluded that examines the possible instrumentality of participative management on productivity. On one hand Steel Authority of India Limited (SAIL) being the gigantic holding company for managing the seven important steel plants in the Public Sector is proposed to be selected for the study. Although a lot of work has been done on PM, it has seldom been investigated in context of SAIL. On the other hand TISCO a monolith in private sector of steel industry is chosen for making a comparative study of public and private sectors.

32

33

NEED, SCOPE AND OBJECTIVES OF THE STUDY

3.1 NEED Punjab National Bank is one of the countrys largest bank.. Many researchers had undertaken the research to study the loan policies and schemes of PNB. Need of the study is to give financial support to customer.

3.2 SCOPE OF THE STUDY: The Scope of study Loan Policy and Schemes by Punjab National Bank was limited to Gurdaspur city only.

3.3 OBJECTIVES OF THE STUDY: The objectives can be taken as the purpose of this research as what aspects will be covered under the research.

To study the loan polcy and schemes by PNB in the market. To study the key characteristics of PNB. To evaluate the reasons of customers preferences of various PNB loan policies and schemes. To study the factors influencing the decision regarding polices and schems. To study the satisfaction level of customers towards services of PNB.

34

RM

35

RESEARCH METHODOLOGY 4. Research According to D. Slesinger and M. Stephenson research may be defined as the manipulation of things, concepts or symbols for the purpose of generalizing to extend, correct or verify knowledge, whether that knowledge aids in the construction of theory or in the practice of an art. Thus it is original contribution to the existing stock of knowledge of making for its advancement.

4.1Research Design Research Design is an arrangement of conditions for collection and analysis of data in a manner that aims to combine relevance to the research purpose with economy on procedure. The research problem having been formulated in clear-cut term helps the researcher to prepare a research design. The preparation of such a design facilitates in conducting it in an efficient manner as possible. It is a blue print for the fulfillment of objectives and answering questions .this research is:

Descriptive Research: Present research is descriptive research because in this research it has been described that which method of loans and schemes is being followed in Punjab National Bank in Rayya Mandi and various factors considered for the same.

4.2 Sampling Design The following factors have to decide within the scope of sample design: o Universe: Universe refers to the total of the units in field of enquiry. it includes all the customers of Punjab National Bank

Sample Frame-Sample frame refers from where the questionnaires are to be filled. Our sample frame consists of family, friends and classmates.

36

Sampling Unit: Sampling unit is the basic unit containing the elements of the universe to be sampled. The sampling unit of our study included people of all age group in Gurdaspur

Sample Size: A sample of minimum respondents was selected from bank. An effort has been made to select respondents evenly. The survey was carried out on 100 respondents.

Sampling Technique: For the purpose of research convenient sampling is used. Technical associates working in bank have been approached to get the questionnaire filled.

4.3 Data Collection There are two types of data sources. : Secondary data: It includes information which had already been collected by someone else and which had already been passed through the statistical process. In this case one is not confronted with the problems that are usually associated with the collection of original data. Secondary data either is published data or unpublished data. Primary data: It includes information collected afresh and for the first time, and thus happen to be original in character.It was obtained from respondents that are executives of each department with the help of widely used and well-known method of survey, through a questionnaire.

4.4Tools of Presentation and Analysis:

To analyze the data obtained with the help of questionnaire, following tools were used. Summated Score: These consist of a number of statements which express either a favorable or unfavorable attitude towards the given object to which the respondents are asked to react. The respondent responds to in terms of several degrees of satisfaction or dissatisfaction. Tables: This is a tool to present the data in tabular form. Percentage, Bar Graphs and Pie Charts: These tools were used for analysis of data. 37

4.4LIMITATIONS OF THE STUDY

Every effort was made for detailed and comprehensive study but it is a common saying that to err is human which makes me feel that there may be few bottlenecks. Inspite of all the efforts to make my study perfect, few limitations still persist which are mentioned as below: 1. Small Sample Size: The sample size in relation to total population is small and hence cannot be the basis of generalization. 2. Element of Biasness: While filling the questionnaire, personal biasness of respondents might affect the responses. 3. Uninterested Respondents: Respondents are sometimes unwilling and hesitant in replying to answers. 4. Consumer Behavior: Consumer behavior is dynamic in nature and thus over the time, finding of today may become invalid tomorrow. 5. Lack of Resources: The accuracy of the results is also limited to reliability of methods of investigation, measurements and analysis of data. 6. Limited Scope: The sample may not be a true representative, as due to location factor, the respondents may not be representative of the whole universe. Despite these limitations, still the result entirely depends upon the nature of information supplied by the respondents.

38

Chapter 5

39

DATA ANALYSIS AND INTERPRETATION

Q1. What is the economic status of respondents?

Rationale: The objective of this question was to know about the economic status of the respondents that has been covered.

INCOME CATEGORY 1,20,000 to 1,80,000 1,80,000 to 3,00,000 3,00,000 & Above Not disclosed

NO. OF PERSONS 46 30 20 4

% OF RESPONDENT 46% 30% 20% 4%

3,00,000 & above 22%

Not Disclosed 2%
1,20,000 to 1,80,000 1,80,000 to 3,00,000

1,80,000 to 3,00,000 30%

1,20,000 to 1,80,000 46%

3,00,000 & above Not Disclosed

INTERPRETATION: The economic status states that 46% of respondents were in 120000-180000 category, 0% in 180000-300000,20% in more then 300000 category and 4% were not disclosed.

40

41

Q2. Have you heard of PUNJAB NATIONAL BANK?

RATIONALE: To know the popularity of the bank among the people.

RESPONDENT Aware Un Aware

NO. OF PERSONS 100 0

% 100% 0%

Aware Un Aware No. of Persons

20

40

60

80

100

120

INTERPRETATION: Popularity of the bank states that all the Respondents are aware about PNB

42

Q3. Are you aware of various loan schemes provided by PNB?

Rationale: To know the awareness of the people about the schemes.

Schemes Housing loan Education loan Agricultural loan Personal loan

No. Of Person Percentage 24 19 6 27 24% 19% 6% 27% 15% 9%

Conveyances loan 15 Trade loan 9

30 25 20 15 10 5 0

24
19

27
HOUSING LOAN

15 9 6

EDUCATION LOAN AGRICULTURE LOAN PERSONAL LOAN CONVEYANANCE LOAN TRADING LOAN

PERSONS

INTERPRETATION: The awareness about various schemes provided are as housingloan 24% , education loan 19% , agriculture loan 6% , personal laon 27%, conveyances loan 15% , and trade loan 9% .

43

Q4. Are you aware about the uses and benefits of these schemes? RESPONDENTS

NO. OF PERSONS

Aware Un aware

86 14

86% 14%

AWARE

RESPONDENT

UN AWARE

86 14 0 20 40 60 80 100

INTERPRETATION: 86% of people were aware about the uses and benefit and 14% were unaware about the uses and benefits.

44

45

Q5. Are you aware about the procedure of taking loan from the bank?

RESPONDENT Aware Un Aware

NO. OF PERSONS 45 55

PERCENTAGE 45% 55%

Aware Un Aware

INTERPRETATION: 45% of people were aware about the procedure of taking loan from the bank and 55% people were not aware about the procedure of taking loan.

46

Q6. If you think about taking loan which type of loan you want to avail?

TYPE OF LOAN No. Of PERSONS PERCENTAGE Housing loan Education loan Agricultural loan Personal loan Conveyances loan Any other loan 28 10 5 19 28 10 28% 10% 5% 19% 28% 10%

30 25 20 15 10 5 0

28 19 10 5

28
HOUSING LOAN EDUCATION LOAN

10

AGRICULTURE LOAN PERSONAL LOAN CONVEYANANCE LOAN TRADING LOAN

PERSONS

INTERPRETATION: Various loans are provided by the banks people availing housing loans are 28%, education loan 10% , agriculture loan 5% , personal loan 19% , conveyances loan 28% and 10% for other loans.

47

48

Q7. The period for which you want to take loan? %age a) 5 10 yrs c) 15 20 yrs 50% 15% b) 10 15 yrs d) No Idea %age 20% 15%

15%

5-10years 20% 50% 10-15 years 15-20 years no idea

15%

INTERPRETATION: Period for which loans have been taken by the people 50% for 5-10 yrs, 20% for 10-15 yrs , 15% for 15-20 yrs and no idea abt 15% .

49

Q8. What are the reasons for taking loan from the PUNJAB NATIONAL BANK

S.No Reasons 1 2 3 4 5 Conveniences Efficient Service Good Reputation

No. Of Persons %Age 40 28 26 40% 28% 26% 4% 2% 100%

Links with bank employees 4 Any other 2 100

TOTAL

Reasons for taking loan

Links with employees 4% Good Reputation 26% Efficient Services 28% Others 2% Convenience 40%
Convenience Efficient Services Good Reputation Links with employees Others

INTERPRETATION: The various reasons for taking loans are 40% conveniences are provided ,28% efficient sevice , 26% good reputation ,4% links with bank employees and 2% other.

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Q9. What are the difficulty in opening a loan account in PUNJAB NATIONAL BANK Gurdaspur branch faced by the people.?

S.No Reasons 1. 2. 3. 4. 5. Inefficiency To much time taken

No. Of Persons %Age 16 30 16% 30% 20% 4% 30% 100%

Number of formalities 20 Other reasons No difficulty 4 30 100

TOTAL

Difficulties in taking loan

Inefficiency Number of formalities No difficulty
No difficulty Other 30% Reasons 4% Number of formalities 20%

Too much time taken Other Reasons

Inefficiency 16%

Too much time taken 30%

INTERPRETATION: The probable difficulties, which occur during the time of taking loan from the bank, are as follows:Inefficiency in the working of bank officials-16%,it takes to much time-30%,A number of formalities to be fulfilled-20%,Other reasons-4% and No difficulties-30% .

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Findings of the study

52

FINDINGS
From the above two types of surveys we can conclude that: Mostly the persons who were covered under the survey were of 1,20,000 to 1,80,000 income category i.e. 46% and 30% to 1,80,000 to 3,00,000. 2% of the people havent disclosed their income and 20% were having income 3,00,000 or above. Secondly 35% among the all have account in PNB, 30% in SBI, 10% in CBI and rest in other banks. Thirdly, more of the persons operate saving and current accounts in the banks i.e. 40% and 36% respectively. Fixed deposit and loan accounts are less in comparison i.e. just 10% and 5% respectively. Some persons also have their pension accounts in the bank. Most of the persons are satisfied with the services provided by their bank and about 96% of them know about the PNB. Most of the persons are aware about the different loan schemes provided by the bank and about there uses and benefits but they know less about the procedure of taking loan from the bank. We also concluded that mostly the persons want to avail the facility of housing loan, conveyance loan and they mostly want to take loan for the period of 5 to 10 years. In second survey it can be concluded that the main reason for taking loan from the PNB is convenience and the efficient service provided by the bank. The main difficulty in taking loan from the PNB is the time taken and the number of formalities, which discourage the customers to take loan from the bank. So this should be removed.

53

Conclusion and Recommendations

54

CONCLUSION AND RECOMMENDATIONS 7.1 CONCLUSION

All the loan policy and schemes play very important role in Indian economy. Now days, people want to invest in various schemes offered by the bank. Investment decision of the investor is affected by track record, brand name, and star rating of the scheme.

PNB should try to provide more lucrative schemes at affordable risks. Furthermore people strongly believe that PNB has core competency in financial products. Investors and potential investors believe that PNB has made most advantageous use of print and electronic media to motivate investors and potential investors.

In order to elaborate research a survey had been conducted to know more about the loan policy and scheme. Finally it was concluded that driven by strong performance, PNB had emerged as one of the most successful bank in the country, and also emerging as a very strong competitor for other banks.

55

7.2 RECOMMENDATIONS
From the study we can conclude that in general the customer is satisfied with the services provided and functions performed by the bank. In spite of the different services in relation to loan provided by the bank there is much more to be done by these banks. Keeping in view the competition in todays modern commercial world banks need some of improvements such as:

Enquiry facilities must be provided to the customers Most of the loans bank is provided to the agriculture as priority sector at cheaper rates of interest. But the bank should diversify its operations to non agriculture sector to earn handsome return on the loan and advances.

Many illiterate people of the villages because of lack of knowledge find it difficult to fulfill the formalities for getting a loan from the bank; rather they prefer to get the loan from the money lenders on a higher rate of interest.

The formalities to be fulfilled at the time of taking loan must be reduced so that the more people think about taking loan from the bank. More financial schemes should be introduced to provide loans and advances to different types of the customers. Most important the funds must be made available in time. Efficient services and prompt attention should be paid on the counter It has been observed that the operating efficiency of the bank is at par, but it need to be more efficient for better performance in the future.

56

references

57

REFERENCES
Books and Websites:

Advance Accounting Dr. S.M. Sharma www.punjabnationalbank.com www.google.com Loans and Schemes V.S Datey

58

ANNEXURES

59

QUESTIONNAIRE
Q1. Economic status.

Income category 1,20,000 to 1,80,000 1,80,000 to 3,00,000 3,00,000 & Above Not disclosed

Tick the group

Q2. Have you heard of PUNJAB NATIONAL BANK? YES/NO Q3. Are you aware of various loan schemes provided by PNB?

Schemes Housing loan Education loan Agricultural loan Personal loan Conveyances loan Trade loan

Tick the group

Q4. Are you aware about the uses and benefits of these schemes?

YES/NO

Q5. Are you aware about the procedure of taking loan from the bank?

YES/NO

60

Q6. If you think about taking loan which type of loan you want to avail?

TYPE OF LOAN Tick the group Housing loan Education loan Agricultural loan Personal loan Conveyances loan Any other loan

Q7. The period for which you want to take loan? a) 5 10 yrs c) 15 20 yrs b) 10 15 yrs d) No Idea

Q8.Are you satisfied with the service offered by your bank?

YES/NO

Q9. Suggesstions if any

Thank You.

61