“A Summer Project Report on

banking and Schemes ”

At
The Patiala Central Cooperative Bank Ltd.

(Branch Gurbax Colony Patiala )

A Report Submitted to Punjabi University in Partial Fulfillment of

the Requirements for the Degree of

Master of Business Administration

(2009-2011)
Submitted By: Sushil Kumar
Uni.Roll No:

VIDYA SAGAR COLLEGE OF

MANAGEMENT & TECHNOLOGY
(AFFILIATED TO PUNJABI UNIVERSITY PATIALA)

DECLERATION
I hereby declared that the project entitled “Loan Procedure and
Schemes ”, A study conducted at The Patiala Central
Cooperative Bank Limited Branch Gurbax colony Patiala is
an original work carried out by me under guidance of Lect.
Ms.Gazzal , submitted in the partial fulfillment of Master of
Business Administration and this has not been submitted in part
or full towards any other degree or diploma.

Signature

Date: july 30 2010

Ankush Kumar

Signature

Ms Gazzal (Project Guide)

ACKNOWLEDGEMENT
Thanks to the almighty for showering his blessing on completion of my project. I want to
thanks all the employees of the Patiala Central Co-operative Bank Ltd. (Patiala) for
their cooperation in successfully completion my project works on P.C.C.B.

I am very thankful to all employees of Gurbax colony Branch for their co-operation. I
am thrilled to find that people here were very co-operative and helped me in all possible
ways

I am especially thankful to Mr. Karam Chand (Assistant Manager) who is one of the
busiest people for giving me actual knowledge about the successful banking, detail
knowledge of Loan Procedure, Loan Schemes and giving me time out of his precious
schedule.
I would also like to thank to MsGazzal who encourage me time to time and guide me for
the completion of my project.

At last but not least, I also thanks to all those persons who gave me every necessary
knowledge and their heartily help in completion of my project work.

Ankush Kumar

INDEX
PARTICULARS PAGE NO.
CHAPTER – I : - INTRODUCTION 2 – 38

• Introduction to Banking Industry 2 – 15

o History of Banking
o Banking Institutions
o Functioning of a Bank
o Role of Banking

• Introduction to Cooperative Banks 16 – 38

o Features of Cooperative Banks

o Cooperative Movement in India . A Historical Perspective
o Cooperative Banking in India
o Types of a Co-operative Bank
o Financial Sector Reforms and Credit Cooperatives
o Banking Sector Reforms and Urban Cooperative Banks

CHAPTER – II : - INTRODUCTION TO PCCB 40 – 56

• Introduction to State Level organization 42 – 44

• Profile of The Patiala Central Cooperative Bank 44 – 56

o Name of Departments
o Various Branches of PCCB
 o Mission of the Bank:
o Objectives of Bank
o Technology Used In Bank
o Vision

CHAPTER – III : - RESERCH METHODOLOGY 58 – 59

• Definition 58
• Research Design 58
• Objective of Study 59
• Collection of Data 59
• Limitations of Study 59

CHAPTER -- IV: -ANALYSIS OF LOAN PROCEDURE & SCHEMES 61- 120

• Definition of Loan 61
• Importance of Loans in Today's Life 61 – 62
• What is a Procedure? 63
• Importance of Procedure Manuals 63 – 68
• Loan Procedure 68 – 73
• Loan Schemes 74 - 120

CHAPTER – V : - FINDINGS AND CONCLUSION 122-123

CHAPTER – VI : - RECOMMENDATIONS 125-126

BIBLIOGRAPHY 128-129
 CHAPTER - I

INTRODUCTION

Introduction to Banking Industry

While walking in the streets of any town or city you might have seen some signboards on
buildings with names-Canara Bank, Punjab National Bank, State Bank of India, United
Commercial Bank, etc. What do these names stand for? Did you ever try to know about
them? If you enter any such building you will find some kind of a business office. You
will see some employees sitting behind counters dealing with visitors standing in front of
them. You will find that some are depositing money at one counter while some are
receiving money at another counter. Behind the counters in the office you will see tables
and chairs occupied by officers. On one side of the office you will also see a chamber
(small partitioned room) where the manager is sitting with papers on his table. This is the
office of a ‘Bank’.

Bank, as we know people earn money to meet their day-to-day expenses on food,
clothing, education of children, housing, etc. They also need money to meet future
expenses on marriage, higher education of children, house building and other social
functions. These are heavy expenses, which can be met if some money is saved out of the
present income. Saving of money is also necessary for old age and ill health when it may
not be possible for people to work and earn their living. The necessity of saving money
was felt by people even in olden days. They used to hoard money in their homes. With
this practice, savings were available for use whenever needed, but it also involved the
risk of loss by theft, robbery and other accidents. Thus, people were in need of a place
where money could be saved safely and would be available when required. Banks are
such places where people can deposit their savings with the assurance that they will be
able to withdraw money from the deposits whenever required. People who wish to
borrow money for business and other purposes can also get loans from the banks at
reasonable rate of interest.

Bank is a lawful organization, which accepts deposits that can be withdrawn on

demand. It also lends money to individuals and business houses that need it. Banks also
render many other useful services – like collection of bills, payment of foreign bills,
safe-keeping of jewellery and other valuable items, certifying the credit-worthiness of
business, and so on.

Banks accept deposits from the general public as well as from the business community.
Any one who saves money for future can deposit his savings in a bank. Businessmen
have income from sales out of which they have to make payment for expenses. They can
keep their earnings from sales safely deposited in banks to meet their expenses from time
to time. Banks give two assurances to the depositors –

a. Safety of deposit, and

b. Withdrawal of deposit, whenever needed

On deposits, banks give interest, which adds to the original amount of deposit. It is a
great incentive to the depositor. It promotes saving habits among the public. On the basis
of deposits banks also grant loans and advances to farmers, traders and businessmen for
productive purposes. Thereby banks contribute to the economic development of the
country and well being of the people in general. Banks also charge interest on loans. The
rate of interest is generally higher than the rate of interest allowed on deposits. Banks also
charge fees for the various other services, which they render to the business community
and public in general. Interest received on loan sand fees charged for services which
exceed the interest allowed on deposits are the main sources of income for banks from
which they meet their administrative expenses. The activities carried on by banks are
called banking activity. ‘Banking’ as an activity involves acceptance of deposits and
lending or investment of money. It facilitates business activities by providing money and
certain services that help in exchange of goods and services. Therefore, banking is an
important auxiliary to trade. It not only provides money for the production of goods and
services but also facilitates their exchange between the buyer and seller.

As we may be aware that there are laws which regulate the banking activities in our
country. Depositing money in banks and borrowing from banks are legal transactions.
Banks are also under the control of government. Hence they enjoy the trust and
confidence of people. Also banks depend a great deal on public confidence. Without
public confidence banks cannot survive.

History of Banking

Banking industry in India originated in the last decades of the 18th century. The oldest
bank in existence in India is the State Bank of India, a government-owned bank that
traces its origins back to June 1806 and that is the largest commercial bank in the
country. Central banking is the responsibility of the Reserve Bank of India, which in
1935 formally took over these responsibilities from the then Imperial Bank of India,
relegating it to commercial banking functions. After India's independence in 1947, the
Reserve Bank was nationalized and given broader powers. In 1969 the government
nationalized the 14 largest commercial banks; the government nationalized the six next
largest in 1980.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and III
Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan
and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of
Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency
Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was
established which started as private shareholders banks, mostly Europeans shareholders.

In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and
1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank,
and Bank of Mysore were set up. Reserve Bank of India came in 1935.

During the first phase the growth was very slow and banks also experienced periodic
failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To
streamline the functioning and activities of commercial banks, the Government of India
came up with The Banking Companies Act, 1949 which was later changed to Banking
Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of
India was vested with extensive powers for the supervision of banking in India as the
Central Banking Authority.

During those days public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.
Phase II

Government took major steps in this Indian Banking Sector Reform after independence.
In 1955, it nationalized Imperial Bank of India with extensive banking facilities on a
large scale especially in rural and semi-urban areas. It formed State Bank of India to act
as the principal agent of RBI and to handle banking transactions of the Union and State
Governments all over the country.

Seven banks forming subsidiary of State Bank of India was nationalized in 1960 on 19th
July, 1969, major process of nationalizations was carried out. It was the effort of the then
Prime Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country
was nationalised.

Second phase of nationalisation Indian Banking Sector Reform was carried out in 1980
with seven more banks. This step brought 80% of the banking segment in India under
Government ownership.

The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country:

• 1949 : Enactment of Banking Regulation Act.

• 1955 : Nationalisation of State Bank of India.
 • 1959 : Nationalisation of SBI subsidiaries.
• 1961 : Insurance cover extended to deposits.
• 1969 : Nationalisation of 14 major banks.
• 1971 : Creation of credit guarantee corporation.
• 1975 : Creation of regional rural banks.
• 1980 : Nationalisation of seven banks with deposits over 200 crore.

After the nationalisation of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.
Phase III

This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was
set up by his name which worked for the liberalisation of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being put
to give a satisfactory service to customers. Phone banking and net is introduced. The
entire system became more convenient and swift. Time is given more importance than
money.
Currently, India has 88 scheduled commercial banks - 27 public sector banks (that is with
the Government of India holding a stake), 31 private banks (these do not have
government stake; they may be publicly listed and traded on stock exchanges) and 38
foreign banks. They have a combined network of over 53,000 branches and 17,000
ATMs. According to a report by ICRA Limited, a rating agency, the public sector banks
hold over 75 percent of total assets of the banking industry, with the private and foreign
banks holding 18.2% and 6.5% respectively.

With the growth in the Indian economy expected to be strong for quite some time-
especially in its services sector-the demand for banking services, especially retail
banking, mortgages and investment services are expected to be strong. One may also
expect M & As, takeovers, and asset sales.

The growth in the Indian Banking Industry has been more qualitative than quantitative
and it is expected to remain the same in the coming years. Based on the projections made
in the "India Vision 2020" prepared by the Planning Commission and the Draft 10th Plan,
the report forecasts that the pace of expansion in the balance-sheets of banks is likely to
decelerate. The total assets of all scheduled commercial banks by end-March 2010 is
estimated at Rs 40, 90, 000/- crores. That will comprise about 65 per cent of GDP at
current market prices as compared to 67 per cent in 2002-03.

Bank assets are expected to grow at an annual composite rate of 13.4 per cent during the
rest of the decade as against the growth rate of 16.7 per cent that existed between 1994-
95 and 2002-03. It is expected that there will be large additions to the capital base and
reserves on the liability side.
 Banking Institution

Functioning of a Bank

Functioning of a Bank is among the more complicated of corporate operations. Since

Banking involves dealing directly with money, governments in most countries regulate
this sector rather stringently. In India, the regulation traditionally has been very strict and
in the opinion of certain quarters, responsible for the present condition of banks, where
NPAs are of a very high order. The process of financial reforms, which started in 1991
has cleared the cobwebs somewhat but a lot remains to be done. The multiplicity of
policy and regulations that a Bank has to work with, makes its operations even more
complicated, sometimes bordering on illogical. This section, which is also intended for
banking professional, attempts to give an overview of the functions in as simple manner
as possible.

Banking Regulation Act of India, 1949 defines Banking as "accepting, for the purpose of
lending or investment of deposits of money from the public, repayable on demand or
otherwise and withdrawal by cheques, draft, order or otherwise."

Deriving from this definition and viewed solely from the point of view of the customers,
Banks essentially perform the following functions:

1. Accepting Deposits from public/others (Deposits)

2. Lending money to public (Loans)
3. Transferring money from one place to another (Remittances)
 4. Acting as trustees
5. Keeping valuables in safe custody
6. Government business
Banks are organized in a linear structure to performed these activities at the base
of which lies a Branch. The corporate office of a bank is normally called Head
Office.

Accepting deposits is one of the two major activities of the Banks

Banks are also called custodians of public money. Basically, the money is accepted as
deposit for safe keeping. But since the Banks use this money to earn interest from people
who need money, Banks share a part of this interest with the depositors. However,
accepting deposits and keeping track of the money involves a lot of book-keeping and
other operations. Let us see what the Banks must maintain to provide this service

• An effective branch network to reach the targeted customer base

• A system of Intra branch accounting with separate account(s) for each customer
• A system of reconciliation at the end of the day
• Availability of adequate funds at each branch
• Trained staff for effective customer service
• Infrastructural inputs like space, stationery, comfortable environment etc.

Lending money to the public

Lending money is one of the two major activities of any Bank. In a way, the Bank acts as
an intermediary between the people who have the money to lend and those who have the
need for money to carry out business transactions.

This activity places its own requirements on the resources of the Bank. For effective
functioning of this, a bank must possess:

• Sufficient deposits.
• Skills to appraise the potential borrowers and the activity.
• Legal skills for documentation.
• Legal skills for recovery of its dues through the courts.
• Skills to follow up and monitor the end-use of money lent by it.
• An effective credit delivery system.
• Review of credit portfolio.

Remittance

Apart from accepting deposits and lending money, Banks also carry out, on behalf of
their customers the act of transfer of money - both domestic and foreign.- from one place
to another. This activity is known as "remittance business" . Banks issue Demand Drafts,
Banker's Cheques, Money Orders etc. for transferring the money. Banks also have the
facility of quick transfer of money also know as Telegraphic Transfer or Tele Cash
Orders.

To deliver this service, a Bank must have:

• An effective branch network or correspondent relationships.

• A system of Inter branch reconciliation
• A system of reconciliation with the correspondents
• Availability of funds at all the centers

Trustee Business

Banks also act as trustees for various purposes. For example, whenever a company
wishes to issue secured debentures, it has to appoint a financial intermediary as trustee
who takes charge of the security for the debenture and looks after the interests of the
debenture holders. Such entity necessarily have to have expertise in financial matters and
also be of sufficient standing in the market/society to generate confidence in the minds of
potential subscribers to the debenture. While Banks are the natural choice for the
customers, Banks must possess the following to be effective and retain that:

• A track record of sufficient length.

• Facilities for safe keeping.
• Legal skills to take necessary steps for the trusteeship

Safe Keeping

Bankers are in the business of providing security to the money and valuables of the
general public. While security of money is taken care of through offering various type of
deposit schemes, security of valuables is provided through making secured space
available to general public for keeping these valuables. These spaces are available in the
shape of LOCKERS. The latter are small compartments with dual locking facility built
into strong cupboards. These are stored in the Bank's Strong Room and are fully secure.
Lockers can neither be opened by the hirer or the Bank individually. Both must come
together and use their respective keys to open the locker. To make this facility available
to its customers, the Bank must provide:

• Physical structures to house the lockers

• Locker cabinets
• Security arrangements
• Record of access to lockers

Government Business
Earlier Government business used to be exclusively carried out by Government
Treasuries where all type of transactions took place. However, now Banks act on behalf
of the Government to accept its tax and non tax receipts. Most of the Government
disbursements like pension payments and tax refunds also take place through banks.
While the Banks carry out this business for a fee to be paid by the Government, providing
this service requires a lot of effort and organisation. The Banks must provide:

• Interface with the public

• Liaison with local government departments and government treasury
• Arrangement for reconciliation with the Government Accounts Department
• Necessary infrastructure, stationery etc. to cater to the numbers

Role of Banking

Banks provide funds for business as well as personal needs of individuals. They play a
significant role in the economy of a nation. Let us know about the role of banking.

• It encourages savings habit amongst people and thereby makes funds available for
productive use.
• It acts as an intermediary between people having surplus money and those
requiring money for various business activities.
• It facilitates business transactions through receipts and payments by cheques
instead of currency.
• It provides loans and advances to businessmen for short term and long-term
purposes.
• It also facilitates import export transactions.
• It helps in national development by providing credit to farmers, small-scale
industries and self-employed people as well as to large business houses which
lead to balanced economic development in the country.
• It helps in raising the standard of living of people in general by providing loans
for purchase of consumer durable goods, houses, automobiles, etc.

Introduction to Cooperative Banks

Co-operative banks are small-sized units organised in the co-operative sector which
operate both in urban and non-urban centers. In India, co-operative banks finance small
borrowers in industrial and trade sectors, besides professional and salary classes. Co-
operative banks perform the main banking functions of deposit mobilisation, supply of
credit and provision of remittance facilities. They provide limited banking products and
are specialists in agriculture-related products. Co-operative banks are regulated by the
Reserve Bank of India and governed by the Banking Regulations Act, 1949, and Banking
Laws (Co-operative Societies) Act, 1965. Rural co-operative banks are regulated by state
registrar of co-operatives.

The sources of funds for co-operative banks are: central and state government, Reserve
Bank of India and NABARD, other co-operative institutions, ownership funds and
deposits or debenture issues. Intra-sect oral flows of funds are much greater in co-
operative banking than in commercial banking. Inter-bank deposits, borrowings and
credit also form a significant part of assets and liabilities of co-operative banks

Features of Cooperative Banks

• Co-operative Banks are organised and managed on the principal of co-operation,

self-help, and mutual help. They function with the rule of "one member, one
vote". function on "no profit, no loss" basis. Co-operative banks, as a principle, do
not pursue the goal of profit maximisation.
• Co-operative bank performs all the main banking functions of deposit
mobilization, supply of credit and provision of remittance facilities.
• Co-operative Banks provide limited banking products and are functionally
specialists in agriculture related products. However, co-operative banks now
provide housing loans also.
• UCBs provide working capital loans and term loan as well
The State Co-operative Banks (SCBs), Central Co-operative Banks (CCBs) and
Urban Co-operative Banks (UCBs) can normally extend housing loans upto Rs 1
lakh to an individual. The scheduled UCBs, however, can lend upto Rs 3 lakh for
housing purposes. The UCBs can provide advances against shares and debentures
also.
• Co-operative bank do banking business mainly in the agriculture and rural sector.
However, UCBs, SCBs, and CCBs operate in semi urban, urban, and metropolitan
areas also. The urban and non-agricultural business of these banks has grown over
the years. The co-operative banks demonstrate a shift from rural to urban, while
the commercial banks, from urban to rural.
• Co-operative banks are perhaps the first government sponsored, government-
supported, and government-subsidized financial agency in India. They get
financial and other help from the Reserve Bank of India NABARD, central
government and state governments. They constitute the "most favored" banking
sector with risk of nationalization. For commercial banks, the Reserve Bank of
India is lender of last

Cooperative Movement in India . A Historical Perspective

The Indian cooperative movement, like its counterparts in other countries of the
world has been essentially a child of distress. Based on the recommendations of Sir
Frederick Nicholson (1899) and Sir Edward Law (1901), the Cooperative Credit Societies
Act was passed in 1904, paving the way for the establishment of cooperative credit
societies in rural and urban areas on the patterns of .Raiffeisen. and Schulze Delitzch.
respectively.

The Cooperative Societies Act of 1912 recognized the formation of non-credit societies

and the central cooperative organizations/federations. The state patronage to the

cooperative movement continued even after 1947, the year in which India attained

freedom. The independent India accepted the concept of planned economy and

cooperative organizations were assigned an important role.

The policy of the Government towards the cooperative movement was guided by the
recommendations of the Saraiya Committee, which stated that .the cooperative society
has an important role to play as the most suitable medium for the democratization
of economic planning.. Various expert committees, which examined the problem
of rural credit subsequently, have come to the same conclusion, without exception, that
in the Indian context, there is no alternative from the point of view of structural
appropriateness, to cooperatives at the village level. The Rural Credit Survey
Committee (1954), the first comprehensive enquiry into problems of rural credit, after
a detailed examination of the entire gamut of issues including the social ethos of
rural society, summed up its findings in the celebrated dictum that .cooperation has
failed, but cooperation must succeed..

Since 1950s, the cooperatives in India have made remarkable progress in the various
segments of Indian economy. During the last century, the cooperative movement has

entered several sectors like credit, banking, production, processing,

distribution/marketing, housing, warehousing, irrigation, transport, textiles and even
industries. In fact, dairy and sugar cooperatives have made India a major nation in the
world with regard to milk and sugar production. Today, India can claim to have the
largest network of cooperatives in the world numbering more than half a million, with a
membership of more than 200 million. Of the primary (village) level cooperatives,
around 28 percent with 137 million memberships are agricultural cooperatives, dealing
directly or indirectly with agricultural sector.

The cooperative network in the country is rather strong covering all the villages in

the country and more than 67 percent of the households have been brought under the
cooperative hold. Cooperatives supply about 46 percent of the total rural credit
(including agricultural credit), account for 36 percent of the total distribution of
fertilizers, produce about 55 percent of the total sugar and constitute for 28 percent of
the rural fair shops (distributing consumer articles). Though cooperative movement has
made remarkable progress in several areas, certain glaring defects have also developed in
the movement, which have been, in a way, defeating the very objectives of these
institutions. The following are the unique features of Indian cooperative movement:-

1. Historically, Governments and policy makers have paid more attention to

agricultural cooperatives and thus, the growth and development of the Indian
cooperative movement is heavily tilted in favour agricultural cooperatives in
general and in particular, credit cooperatives. In some areas like dairy, urban
banking and sugar, the cooperatives have achieved success to an extent but there
are larger areas where they have not been so successful.

2. The cooperative credit movement in modern India, curiously, is a state initiated

movement. The state partnership is, perhaps, the unique feature of the Indian
cooperative movement. As of today, Government contribution to the share capital
of primary agricultural cooperatives accounts for about 7.5 percent of the total .

3. Paradoxically, the state partnership which was conceived as a measure for

strengthening the cooperative institutions had paved the way for ever-increasing state
control over cooperatives, their increasing officialization and politicization
culminating in virtually depriving the cooperatives of their vitality as well as their
democratic and autonomous character.

4. Dormant membership, lack of active participation of the members in the

management, lack of professionalism (and absence of corporate governance), undue
political and bureaucratic intervention, have made majority of the cooperatives at
the primary level almost moribund. Understandably, this has resulted in weakening
of the cooperative edifice. The upwardly transmission of the weaknesses of the primary

societies have affected the capabilities of the higher level cooperative federations in so
far as their usefulness to the former is concerned.

5. With regard to agricultural cooperative credit structure, although the quantitative

expansion has been somewhat satisfactory, the movement continues to suffer from
structural defects and operational deficiencies. The acknowledged operational
deficiencies of the cooperative credit structure have been (I) weak recycling of
credit, (ii) poor resource mobilization, (iii) ineffective lending and (iv) poor recovery.

6. The agricultural credit cooperative system in general has become rather over
dependent on external support in terms of participation in share capital by

Government and refinance from Government owned Financial Institutions.

Cooperative Banking in India

Credit cooperatives are the oldest and most numerous of all the types of cooperatives in
India. The cooperative credit institutions in the country may be broadly classified into

urban credit cooperatives and rural credit cooperatives. There are about 2090 urban
credit cooperatives and these societies together constitute for about 10 percent of the
aggregate banking business and therefore regarded as an important segment of the
banking system. The urban credit cooperatives are also popularly known as Urban
Cooperative Banks.

The rural credit cooperatives may be further divided into short-term credit cooperatives
and long-term credit cooperatives. With regard to short-term credit cooperatives, at the
grass-root level there are around 92,000 Primary Agricultural Credit Societies
(PACS) dealing directly with the individual borrowers. At the central level (district
level) District Central Cooperative Banks (DCCB) function as a link between primary
societies and State Cooperative Apex Banks (SCB). It may be mentioned that DCCB and
SCB are the federal cooperatives and thus the objective is to serve the member
cooperatives.

As against three-tier structure of short-term credit cooperatives, the long-term

cooperative credit structure has two tiers in many states with Primary Cooperative
Agriculture and Rural Development Banks (PCARDB) at the primary level and
State Cooperative Agriculture and Rural Development Bank at the state level.

However, some states in the country have unitary structure with state level cooperative
operating with through their own branches and in one state an integrated structure
prevails. The organizational structure of the credit cooperatives in India is illustrated in
chart I. Interestingly, under the Banking Regulation Act 1949, only State Cooperative
Apex Banks, District Central Cooperative Banks and select Urban Credit Cooperatives
are qualified to be called as banks in the cooperative sector. In other words, only
these banks are licensed to conduct full-fledged banking business.

Types of a Co-operative Bank

There are two types of co-operative banks in India. The first is the short term lending
oriented Co-operative Banks. In this category there are again three sub categories of
banks which are the State Co-operative banks, District Co-operative banks and the
Primary Agricultural Co-operative societies.
The second is the long term lending oriented Co-operative banks. In this second category
there are land developments banks which are at three levels. First is the state level, the
second is district level, and the third is the village level.

Again the Co-operative banking structure in India is divided into five main categories and
these categories are:

1. Primary Urban Co-operative Banks.

2. Primary Agricultural Credit Societies.

3. District Central Co-operative Banks.

4. State Co-operative Banks.

5. Land Development Banks.

It is very much clear that co-operative banks have very much importance in national
development. Without the help of co-operative banks, millions of people in India would
be lacking the much needed financial support

Financial Sector Reforms and Credit Cooperatives:

The process of economic and financial sector reforms were initiated in 1991, as a step

towards a broader process of international economic integration and globalization

of financial markets. The objectives of the reform program have been to remove
the structural constraints in the factor and product markets, allowing market forces
to improve efficiency and ensuring outward orientation to the economy for bringing
about a higher degree of integration of the Indian economy with the rest of the world. It
may be mentioned that the structural reforms in the trade regime and industrial
and financial policies have been given utmost priority in order to ensure macro-
economic stability. A healthy financial system being the principal pre-requisite for the
globalization process, the banking sector being an important component thereof came
into sharper focus.

The financial system in India has built up a vast network of financial institutions and
markets over time, and the sector is dominated by the banking sector which accounts for
about two-thirds of the assets of the organized financial sector. The first phase of the
current reform of the financial sector was initiated in 1992 based on the
recommendations of the Committee on Financial System (CFS, 1992). The progress
that has been made in a substantial, yet non-disruptive manner has given the confidence
to launch what has been described as the second generation or second phase of
reforms especially for the banking sector.

The report of the Committee on Banking Sector Reforms (CBSR, 1998) provides a
framework for the second phase of reforms in the banking system. The broad features
of the on going banking reforms have been; gradual removal of pre-emptions
(reduction in CRR and SLR), deregulation of interest rates, tightening of prudential
standards, competition and transparency, improving the quality of supervision, partial
removal of selective credit controls, assistance to banks in debt recovery and reforms
in money and forex markets. This apart, needless to mention, the succinct objective
of the banking sector reforms has been to improve the efficiency in the system by
introducing an element of competition.

The extension of reforms, particularly prudential standards to cooperative banking

institutions, an important component of the banking system was a natural corollary
as the weaknesses in cooperative segment could pose systemic risks. Though cooperative
banks operate at the district and state level, the urgency and importance for extension of
the reforms need hardly be emphasized keeping in view of their reach and scale of
operations. Therefore, the banking sector reforms could be treated as complete only if it
encompasses the cooperative segment, enabling the latter to function on sound lines at
par with other banking institutions. Accordingly, prudential standards covering
capital adequacy, income recognition, asset classification and provisioning norms
were made applicable to cooperative banks in a phased manner. However,
cooperative reforms encompassing legal and administrative aspects have not taken place
in India. This is on account of multiplicity of controls (administrative aspects including
registration are under State Cooperative Acts whereas financial supervision and
regulation is with the Central Bank of the country). The impact of the extension of
prudential standards to cooperative banks has resulted in an increased intervention by the
regulator and the Government in the name of the financial regulation/supervision.

Thematic Framework for Analysis:

The literature relating to the economic reforms, impact of reforms on cooperative sector,

banking reforms and its impact on credit cooperatives and so on are rather opulent. In
so far as the impact of reforms on the cooperative character of the cooperatives
is concerned, be it in credit or non-credit segment, one may safely say that
neither the policy makers nor the researchers have shown any serious interest. And this
is particularly true in India. It seems the cooperative researchers, particularly
doctoral students are more concerned with the assessment and measurement of the impact
of reforms on the performance of cooperatives using a definite and quantifiable
parameters. While the difficulties in examining the impact of reforms on the cooperative
character of cooperatives are quite understandable, it does not mean the same can not be
attempted meaningfully. What is required perhaps is a normative analytical
framework, which is different from the one usually used for capturing the impact
of reforms on cooperatives. Using this normative analytical framework, Ramesha (1996)
in his empirical study points out that Self Help Groups (SHGs) which are not registered
as cooperatives are, in practice, much more closer to cooperative principles than
cooperatives themselves.

Given the diversity that prevails today in the cooperative sector and the levels of reforms
thereof, a general discussion on the impact of reforms (economic or banking sector) on
cooperative character would be almost impossible. For the sake of research, even if one
attempts, the conclusions could be abstruse. Thus, in the present paper an attempt is
made to evolve a conceptual framework for further research concerning Urban
Cooperative Banks (UCBs) in India against the backdrop of banking sector
reforms.

However, all through the discussion, it is attempted to maintain a special thrust on the
cooperative character of UCBs. The analytical framework for the aforesaid
purpose rests on three basic assumptions;

a) Banking sector reforms essentially refers to the guidelines/directions from

the regulator (central bank of the country) and the Government during the

last ten years.

b) Urban Cooperative Banks (falling under Banking Regulation Act of 1949)

are more influenced by banking sector reforms in the short-run than other

credit cooperatives.

c) Cooperative character of urban cooperative banks can be captured in terms

of the adherence to cooperative principles.
Urban Cooperative Banks in India

Inspired by the success of urban cooperative movement in Germany and Italy, in

the early part of the last century, urban cooperative credit societies were
organized on community basis and their lending operations were confined to meeting the
consumption oriented credit needs of their members. Many urban cooperative banks,
which were organized initially, were essentially credit societies but later converted
themselves into urban cooperative banks. Interestingly, many urban cooperative credit
societies, which were not engaged in any banking functions, also used the word .bank.

There was no well-defined concept of urban cooperative bank till 1996, when banking
laws (provisions of section 5(CCV) of Banking Regulation Act 1949) were made
applicable to cooperative banks. Accordingly, an urban cooperative bank was defined as
a Primary Cooperative Bank other than a primary agricultural credit society; (i) the
primary object of which is the transaction of banking business, (ii) the paid up share
capital and reserves of which are not less than Rs.1 lakh (0.1 Mn) and (iii) the by-laws of
which do not permit admission of any other cooperative society as a member. The
word .primary. is used to denote that the urban cooperative banks perform the role of
a primary unit in a 3-tier cooperative credit structure. Over a century old urban co-
operative credit movement today, has a network of 2,084 urban co-operative banks
with 7,368 branch outlets spread all over the country.

The deposits and advances of urban cooperative banks constitute for about 9 and 8
percents of the aggregate deposits and advances of the banking system respectively. In
so far as the growth and performance are concerned, it may be mentioned that the
urban cooperative banks were a shade better than the scheduled commercial banks and
public sector banks till 1999 (Ramesha K, 2001). However, it has to be recognized that
the prudential standards and regulatory system prescribed for urban cooperative banks
were relatively soft in comparison with those of commercial banks. This is partly on
account of historical reasons and partly due to the preferential treatment of cooperative
structure in general. If one benchmarks the growth and performance of urban cooperative
banks with that of the banking industry (which is dominated by public sector banks) after
2000 and onwards, then the scenario undergoes a complete change. For instance, between

2001 and 2002, although owned fund, deposits and advances of urban cooperative

banks increased somewhat impressively, i.e., by 27, 15 and 14 percents

respectively, the gross Non Performing Assets (NPAs % to total advances) during the
same period went up from 16 to 22 percent (3). The percentage of the profit
making urban cooperative banks to the total stood at 87 percent as at the end of March
31, 2002. On the whole, the performance of the urban cooperative banks particularly
after 2000 has been on the decline, and a host of factors may be responsible for this
which may include increasing competition, tightening prudential standards and
supervision and regulatory standards, multiple control, etc. Following are the features
of urban cooperative credit banks in India.

1) Urban cooperative banks are registered under Cooperative Societies Act of the
respective state Governments. The Reserve Bank of India (Central Bank of the country)
is the regulatory and supervisory authority for UCBs for their banking related
operations. Managerial/Administrative aspects of UCBs continue to remain with the
state Governments. The Union Government regulates the UCBs having multi-state
presence and such banks are registered under Multi-state Cooperative Societies Act.
Controlling of UCBs by state Government and the Central Bank of the country is
generally known as .duality of control..

2) The discernible characteristic feature of UCB structure is its heterogeneity.

Nearly 50 percent of the banks are unitary in nature (with single branch banking).
Heterogeneity in their size is another facet of the UCB structure. The larger UCBs
(scheduled UCBs) numbering just 51 accounts for more than 40 percent of the business
from UCB sector as against 800 UCBs accounting for just 6 percent.

3) UCB structure is exemplified by its pronounced focus on the needs of small men and
micro credit sector. The average size of the loan also works out to be relatively
low and an overwhelming segment of UCBs have been able to comply with the priority
sector lending targets (directive from central bank to lend to certain sectors like
small enterprises, trade & business, housing etc) set by the central bank of the country.

4) Urban cooperative credit movement in general, and the number of UCBs in

particular is concentrated in few states. Five states account for 80 percent of the total
UCBs in the country and one of them accounts for as high as 32 percent of the total
UCBs.

5) A noticeable feature of urban banking sector is its financial independence.

Unlike the agricultural cooperative credit structure, the urban cooperative banks are not
surviving on external assistance such as refinance support. In fact, UCBs have
been supporting federal units (District Central Cooperative Banks and State
Cooperative Banks) by keeping their surplus resources in the form of deposits.

Banking Sector Reforms and Urban Cooperative Banks:

The reform measures as applicable to UCB sector may be classified into three broad
categories. First, while recognizing the differences between commercial and urban
cooperative banks, a majority of the prudential norms introduced for commercial banks
are being extended to UCBs, albeit in a phased manner. Second, policy initiatives have
been introduced (through Monetary & Credit Policies) to contain the systemic risk
emanating from cooperative sector, in particular from UCB sector. Lastly,
duality/multiplicity of control has been recognized as an irritant to their effective
regulation and supervision. Although, the focal point of the reforms has been prudential
norms, steps are also being initiated to professionalize the management and manpower of
UCBs. The influence of the reforms on the functioning as well as the cooperative
character of UCBs is discussed below.

Prudential Standards:

To begin with, in 1993, RBI introduced Income Recognition and Asset

Classification Norms to UCBs. In 1995, the prudential exposure norms to
single/group borrowers were also made applicable to them. Subsequently, in a phased
time frame, the capital adequacy norms (capital to risk weighted asset ratio) were
also made applicable to UCBs. While the promotion of prudent financial practices has
become a sine quo non in the highly competitive globalize environment (for
safeguarding the financial health of the system, in particular of the UCB sector),
it should not be forgotten that such standards were contrived essentially for
commercial banks. Although, the notion of a code of good practices is intuitively
appealing, the temptation to prescribe universally valid model codes which do not
allow for differences in institutional development, legislative frame work and more
broadly, different stages of development must be avoided. To put it differently, while
there is no dispute that UCBs should be subjected to prudential standards (capital
adequacy, asset classification, income recognition and provisioning norms), it is not
yet clear, whether the prudential standards prescribed for commercial banks would
work without distorting the cooperative character of UCBs.

For instance, capital is widely regarded as a measure of the risk taking ability of a
financial intermediary and therefore, prescription of a minimum capital the urban
cooperative bank (to conduct banking business) may seem to be justified from the
viewpoint of ensuring stability in the financial system. If one looks at a cooperative
credit society/bank, as a typical cooperative created on the basis self help and
mutual help, then possibly the members (generally with limited means) may not be able
to raise the required capital. If capital base is to be strengthened, as it is happening in
India, these banks will have to start dealing with non-members (or nominal members) on
a large scale and perhaps may have to shift from .surplus. to .profit..

The need to increase the deposit base as also to gainfully employ the funds generated
have made it necessary to have a large number of customers who are not the members. It
is worth mentioning that in India, urban cooperative banks though on par with
commercial banks with regard to prudential standards, like the latter, are not permitted to
boost their capital base through sub-ordinate debts. Further, there are ceilings on the
value individual share holdings have not been revised since long.

Secondly, in order to ensure the adherence to the prudential standards by cooperative

credit societies/banks, the regulator’s frequency (as also scope) of intervention
increases thereby affecting the cooperative character. In this regard, in India regulator’s
intervention has indirectly infringed upon the functional autonomy covering areas
like share-linkage, credit, investment, deposit and so on. Thirdly, in the name of
protecting the interests of the depositors (majority of whom are not the members of
cooperative banks), not only prudential standards are extended but even the professional
content in the management committee of the urban cooperative credit
societies/banks is also stipulated in India by the regulator/Government. While one can
not remain ignorant of the role of the Government in the promotion of and development
of cooperation in India, prescribing the number and qualification of the nominee directors
would no doubt impair the cooperative character. Fourthly, the strict entry norms in
terms of minimum capital, membership prescription as it prevails in India, prevents
the birth of new credit cooperatives and constrain the existing societies in so far
as the expansion is concerned.

Fifthly, with the introduction of same prudential standards the difference between
urban credit cooperatives/banks and commercial banks get blurred and possibly, the
former may have to progressively imbibe the character of the latter (identity crisis?).
There could be several such dimensions as discussed above. Nonetheless, it appears that
the benefits of the prudential standards to urban credit cooperatives/banks come at a
cost. The cost, needless to mention, is the dilution in the cooperative character (in
terms of adherence to the principles).

Professional Management and Governance:

Good corporate governance is critical to efficient functioning of an entity and more so for
a banking entity. Thus the need for professional management and healthy governance
practices in urban credit cooperative societies/banks in the present competitive
environment needs no emphasis. Thus, for managing a financial intermediary, whether a

cooperative or a commercial bank (irrespective of its size), the human resource

comprising of paid staff and elected management has to be highly competent.
The framework for good governance and professional management in cooperative
sector should essentially emanate from the guiding principles and the given legal
framework in different countries/states. However, in India it is not uncommon
that the cooperative banks are superseded and Government officials are posted to head
or nominated on the board and unfortunately this trend is increasing in the post
reform period. Quite often the reason quoted is that there is lack of qualified and
competent directors and the protection of depositors. interests (majority of them are not
the members) in the case of urban cooperative banks. While this is to some extent true,
the solution to this problem certainly is not Government intervention as it would
seriously impair the cooperative character. It is disheartening to note that the
elected management of 41 % of State Cooperative Banks, 37 % of State
Cooperative Agricultural and Rural Development Banks, 21 % of the District Central
Cooperative Banks and 8% of Primary Cooperative Agricultural and Rural Development
Banks stood superseded as on March 2000. More than 200 urban cooperative banks are
identified as weak/sick banks by the regulator as at the end of March 2002.

As per the prevailing act (and according to the cooperative philosophy/principles) any
individual member can get himself/herself elected to the management committee of a
cooperative bank. It is this management committee which is entrusted with the
responsibilities like risk management - policy/strategy, credit and NPA management,
investment management, marketing plan/strategy, Asset-Liability Management and so
on. It should also be noted that the very concept of banking (financial inter-mediation) is
undergoing change in the present competitive environment and the conventional
framework for management with which cooperative banks are comfortable may not be
sufficient. Given this, it is doubtful whether the elected management (as per the existing

provisions of cooperative act and principles the individuals without sufficient

knowledge/experience in financial markets or management can be at the helm of affairs
of a cooperative bank) would be able to take on the emerging challenges. Perhaps, the
need of the hour is to ensure that in cooperative organizations, the system of
governance including the size and composition of the board of directors (or elected
management) is driven by the purpose and objectives of the business. In this regard, the
following issues/areas may be of some interest to the cooperative researchers.

Supervision and Regulation:

At present in India, urban credit cooperatives/banks are subjected to duality of control,

meaning that the administration related aspects are being supervised and regulated by

State Government and the banking operations are supervised and regulated by the

central bank of the country. This has, understandably resulted in overlapping jurisdiction

of the state Government and the central bank of the country. Moreover, a clear-
cut demarcation of the financial and administrative areas for regulation is almost
impossible and even if it is possible it surely acts as an impediment in effective
supervision. While the central bank of the country has the wherewithal under the
Banking Regulation Act for dealing with crucial aspects of functioning of
commercial banks, in the case of co-operative banks it requires the intervention
of the Registrar of Cooperative Societies (state Government). Given the number of
urban credit cooperatives/banks, the central bank of the country is not in a position to
effectively supervising them. Thus, the duality of control not only affects the quality
of supervision and regulations, but also the functioning of the urban cooperative
banking sector. Needless to mention, under this regime of duality of control the
urban cooperative banks may turn out to be neither cooperative nor commercial
banks. There are some areas of concern, some of them may be good for research as
well.

While the progress of the cooperative movement in India in general, and the cooperative
banking in particular has been rather appreciable, the movement can not be termed as a
vibrant one in regard to cooperative values and philosophy as enunciated in cooperative
principles. With regard to the extension of reforms to cooperative banking segment, it is
yet not clear as to whether the same would ensure soundness and stability in the
cooperative banking segment. Although the promotion of prudent financial practices in
urban cooperative banks has become a sine quo non in the present competitive
environment, one can not afford to ignore that such practices were contrived essentially
for commercial banks. It must not be forgotten that the notion of a code of
good practices though intuitively appealing, the temptation to prescribe universally valid
model codes which do not allow for differences in institutional development,
legislative framework and more broadly, different stages of development must be
avoided. It seems the extension of reforms/prudential standards to urban cooperative
banking has provided substantial scope for the external intervention and in the process,
affecting the cooperative character in terms of adherence to the cooperative principles.
Logically, if the prudential standards, and supervision and regulation for
cooperative banks were same as that of commercial banks, then there would not
be any difference worth mentioning between these entities. There are several areas that
need the intervention of researchers and perhaps, more important amongst them are
prudential standards, professional management & governance and supervision &
regulation. The framework for such research should essentially be within the
guiding principles of cooperation.

However, in the long run, if cooperative character of credit cooperatives is to be

preserved, the prudent practices, system of governance and supervision & regulation all

should emanate from the guiding principles of cooperation.

 CHAPTER – II

INTRODUCTION TO
THE PATIALA CENTRAL
COOPERATIVE BANK LIMITED

Introduction to State Level organization

The Punjab State Cooperative Bank was established on 31st August, 1949 at Shimla vide
registration No. 720 has a principle financing institution of the cooperative movement in
Punjab. In 1951 its Head Office was shifted to Jalandhar from where it moved in 1963 to
its present building at Chandigarh. In the cooperative Banking structure, the position of
the Punjab State Cooperative Bank is extremely important as the whole credit system
revolves around it. It has 3 Divisional Offices at Amritsar, Bhatinda and Jalandhar. It has
19 branches and 3 extensions counters operating in the city of Chandigarh. Besides this,
there are 19 District Central Cooperative Banks having 783 branches and 16 extension
counters in the State of Punjab affiliated with it. The bank was established to help to
provide timely and adequate flow of credit to the farmers for agriculture and allied
activities through PACS.

Organizational Structure

The bank operates in the city of Chandigarh having 19 branches and 3 extensions
Counters. It has 3 Divisional Offices in Punjab at Amritsar, Jalandhar & Bathinda. The
organizational structure is as under:-
Organizational Structure

So State co-operative banks are a federation of central co-operative banks and act as a
watchdog of the co-operative banking structure in the state. Its funds are obtained from
share capital, deposits, loans and overdrafts from the Reserve Bank of India. State co-
operative banks lend money to central co-operative banks and primary societies and not
directly to farmers.

Expectation of the bank from the public for enhancing its effectiveness and
Efficiency:-
The Bank expects that the general public should take maximum benefits of the services
offered by it. The bank expects from the public that they should keep their surplus money
in the shape of deposits with the Bank and take maximum benefits of various loan
schemes of the Bank. The bank also expects that public should repay the loans taken by it
timely so that the bank may be able to channelize the same. It will be in the interest of the
public also.

Arrangements and methods made for seeking public participation/contribution:-

The Bank has an elected Board of Directors which is the main governing body of the
bank. District and State level Technical Committees are established to fix the scales of
finance of various crops. Customer meets Annual General Body meeting, Annual
Cooperative Week celebrations during the month of November every year.

Mechanism available for monitoring the services delivery and public grievances
resolution:-

The Bank is governed by an elected Board of Directors which regularly monitors the
services delivery system. The Bank is regulated and inspected by Reserve Bank of India,
NABARD and State Govt. There is a statutory audit system in the Bank by the Auditors,
under the control of Chief Auditor, Cooperative Societies, Punjab. To properly handle the
public grievances/complaints, a separate Vigilance Cell has been created at the Head
Office of the Bank.

THE PATIALA CENTRAL CO-OPERATIVE

BANK LTD.
HEAD OFFICE, PATIALA

Central co-operative banks are the federations of primary credit societies in a district and
are of two types – those having a membership of primary societies only and those having
a membership of societies as well as individuals. The funds of the bank consist of share
capital, deposits, loans and overdrafts from state co-operative banks and joint stocks.
These banks finance member societies within the limits of the borrowing capacity of
societies. The profile of Patiala Central Cooperative bank is as under:-

• Name of society- The Patiala Central Co-Operative Bank Ltd.

• Registration No.& Date- No. 772, 28th September 1949
• Area Of Operation- As per bye-law no. 3, the object of the Bank is to
Facilitate the operation of. The affiliated Co-operative societies by.
• Providing Banking and credit facilities to its members as convenient and easy
terms are possible.
• Encouraging thrift and saving amongst its members by offering suitable facilities.
 • Making arrangement for supervision and inspection of its affiliated Co-operative
Societies.
• Undertaking such measures as are conductive to the spread of Co-operative
education and training.

Under the Indian Co-operative Societies Act-ii of 1912 the P.C.C.B with registration no.
776 on 28-09-1949 by the registrar co-operative. Co-operative Societies PEPSU although
the old

bylaws do not mention that area of operation of the Bank. The copy of the application
submitted for its registration shows Patiala and Sangrur district as area of operation of the
Bank. With the creation of new district of Mohali , Dera Bassi block transferred to that
district. There are 8 Blocks Patiala, Bhunerheri, Samana, Patran, Nabha, Rajpura,
Ghanour and Sanour. There are 4 Sub-divisions namely Patiala, Samana, Nabha and
Rajpura.

Management and Organizational Structure

As per bylaws No. 28 the Board of Directors shall be constituted as under

• Three Directors to be nominated by Govt. so long as the Govt. is member.

• Eight Directors to be elected out of members Co-operative Marketing cum
processing Societies. One Director to be elected out of member industrial Co-
operative societies. In case, The No. of these societies exceeds fifty-one. Directors
to be elected out of the remaining Co-operatives societies.
• None of elected Directors has incurred any disqualification of director so far and
there is no Director who continuously remained absent in three consecutive
meeting of Board of Directors.

Sr. Name of Directors Designation

1 Balraj singh chauhan Chairman
2 Bikramjit singh Vice Chairman
3 Harkishan singh Director
4 Umar Ranjit Singh Director
5 Bharpur Singh Director
6 Jasbir Singh Bajwa Director
7 Joginder Singh Director
8 Jaspal Singh Director

Name of Departments
There are various sections / departments which are working in the Bank. Here we tell us
about those departments / sections which play important role in Banking. We tell about
his Head of Department, its functions & number of members working in the
departments.

Functions of Various Departments

• To maintain monthly statements etc; like as – LIC, Income Tax, GSLI

• Grievance of public & branches.
• Yearly statements.
• Master policy of holder such as – EDLT, GI, and House Loan.
• Statements of NABARD.
• House Loan
• To issue charge sheets of employees & maintain it.
• To maintain Misc. files.
• To maintain several records (with service book of employees)
• Transfer of employees.
• Increment concerned with employees.
• Pass T.A. D.A. bill of employees
• Salary of employees’ maintained.

Fuctions of Account Section

• The Misc. department reconciled the A/c of all the branches.

• That department issues the drafts of local, state level /aims.
• Furniture fixture.
• This department keeps up the current A/C related with commercial bank.
• It helps to maintain sundry A/C.
• Maintain the current A/C with P.S.C.B.
• Passing the M.C.L. of societies.
• Sanctioned of cash credit limits of societies.
• Maintenance of receipt and dispatch register.

Number of Persons Working Under above Section

• In this section number of persons working is ten.

• 1 Senior Manager
• 2 Manager
• 2 Assistant Manager
• 5 Clerks

Functions of Loan Department

 • Sanction all types of loans; like as – Consumer Composite /integrated Vehicle
Loan

Computer loan –only for staff member

• Sanction all types of limits; like as – cash credit trader

Cash credit farmers

Loan against property

Rural godown

Mini dairy

Mai Bhago scheme

Renewal of cash credit limits.

Physical verification done before sanctions the

limits or loans.

Vehicle loan – two wheeler, three wheeler, & S.R.T.O.

• Maintain statements for refinance &send to NABARD.

Functions of State Section

• Planning
• Renewing
• Compiling
• Achievements (for net result of the bank)
• Next year forecasting

Number of Persons Working Under are

There are seven persons working in stat section

• 1 Senior Manager
• 1 Manager
• 2 Assistant Manager
• 1 Accountant
• 1 Clerk
 • 1 Typist

Account and Finance Department

Keeping of account and maintaining books of accounts, preparing profits and loss
accounts, preparing budgets, pay rolls, recording receipts and payments, preparing
statement of assets and liabilities etc. are office activities of specialized nature. All these
are office work and performed by this special office.

Miscellaneous Activities

• Office Time: - The P.C.C.B. has fixed the timing for all the employees the timing
of this company is 10a.m. To 5p.m. The recorded of the arrival & departure was
recorded through Attendance register company maintenance the attendance
registers. All the employees come at 10a.m. Entered the time in the Attendance
register in the first column and at time of lunch. The entire employee entered. The
departure time for lunch at 2p.m. When they come after lunch they will entered
the arrival time 2.30p.m. Than duty was complete they will entered the departure
time 5.00p.m. And also entered the total working hours in the full day. There is no
extra system for recording the time.

• Log Book : -All the vehicles of the company having logbook. Each vehicle has
own separate logbook. All the records of this vehicle were kept in this logbook.
The perform shows that, how much kilometer are to be used by this log book the
person who used the vehicle fill this log book and signed on also fill that for what
purpose. The vehicle was used.

FACILITIES FOR STAFF

The following facility is available to staff members.

• House Loan facility at subsidiary rate.

• Scooter loan/ motorcycle/ car loan at subsidiary rate.
• Festival loan.
• Medical loan
• LTC Loan (Loan Traveling Concession)
• DA (daily allowance)
• TA (traveling allowance)
Various Branches of PCCB

A part from its head office at Patiala, The Bank has been in the services of the people
through a network of its 43 branches spread over the district of Patiala. 16 out of the 43
Branches of the Bank are working at the focal points – a scheme started by Govt. of
Punjab.

Name of Branches

Sr. Name of Branches

1 Agoul
2 Arya Samaj
3 Bhupinder Nagar
4 Babbarpur
5 Bhadson
6 Banur
7 Basantpura
8 Balbera
9 Bhunerheri
10 B.N.Khalsa
11 Daun Kalan
12 Dandrala Dhindsa
13 Dakala
14 Devigarh
15 Ghanour
16 Ghagga
17 Gulzarpura
18 Galwatti
19 Gajju Majra
20 Gurbax Colony
21 Gajewas
22 Jand Mangouli
23 Khera Gajju
24 Kamalpur
25 Lang
26 Massingan
27 The Mall, Patiala
28 Mandouli
29 Nabha (M)
30 Nabha (E)
31 New Anaj Mandi
32 Patran
33 Sirhind Road
34 Pabri
35 Rakhra
36 Rajpura
37 Sanour
38 Samana
39 Shatrana
40 Sultanpura
41 Shambhu Kalan
42 Tohra
43 Top Khanna Moor

Mission of the Bank:

Promotion and sustenance of economic interest and providing easy finance, cost
effectives and quality banking services to customers and PACS.

Objectives of the Bank:

The objects for which the Bank is established are as under:-

1. To serve as a balancing center for cooperative societies (hereinafter called the

society/societies) in the State of Punjab registered under the Act for the time being in
force.

2. To promote the economic interest of the members of the Bank and Cooperative
Societies in the State in accordance with cooperative principles and to facilitate the
development and funding of any Cooperative Society registered under the said Act.
3. To establish and support or aid in the establishment of and support to association,
institutions, funds, trusts and convenience designed to benefit the employees or ex-
employees of the Bank or the dependents or connections of such persons to grant
pensions and allowances and make payment toward insurance.

4. To provide long term loan for the maximum period of 15 years to the individuals,
Coop. House Building Societies, Federation of Coop. House Building Societies and
members of Group Housing Societies for purchase of house or construction thereof by
enrolling member/nominal members. To carry on banking and credit business not
repugnant to the provisions of the Act and the Rules framed there under for the time
being in force and in particular to provide credit facilities to the members. Providing
Long Term Loan for the maximum period of 15 years to individuals, Coop. House
Building Societies and members of Group Housing Societies for purchase of house or
construction thereof by enrolling members/nominal members.

5. To adopt such measures as are conducive to the spread of cooperative education and
training.

6. To promote and develop Cooperative Societies in the State.

7. To do all such other things as are incidental or conducive to the promotion or

advancement or objects of the Bank.

8. To solicit or procure insurance business as a Corporate Agent

Technology Used In Bank

Patiala Central Co-Operative Bank Enhances Its Efficiency By Using Flexcube

Rolling out Flexcube core banking technology , powered by Oracle Database and Oracle
Real Application Clusters, Punjab State Co-operative Bank (PSCB) is about to conduct
an operation on deployment of the core banking system across its all 800 branches of the
19 district central co-operative banks, according to Indian fintech vendor I-flex . I-flex
subsidiary Flexcel will deploy, host and manage the core banking system. At present, the
technology has been successfully deployed in about 40 branches, and the next 200
locations are awaiting their turn.

The program of deployment was worked out to improve transaction processing and to
provide online, real-time banking to accounts from any of the 800 bank branches in the
network. Plus it will help PSCB to set the fixed standardization of products and services
to customers.
PS Sidhu, MD, Punjab State Co-operative Bank, says: "We selected Flexcube, Oracle
Database and Oracle Financial Services On Demand to enhance our efficiency by
replacing manual processes, maintain the customer intimacy we have created over the
years, and develop competitive differentiation because we expect the market to be
increasingly demanding."

One month before i-flex got a consent of both shareholders and regulatory body sides to
change the company name to Oracle Financial Services Limited. I-flex explained that the
new name signs its "close strategic and operational alignment" with parent company
Oracle, which holds an 81% stake in its business.

VISION STATEMENTS

Year Vision Statements

1931-1980 To concentrate on providing funds at low rate of

interest to farmers to protect them from the fund provided by
GREEDY SAHUKARS at high rate of interests

1980-2009 To concentrate on all the sectors of the society for

providing and acquiring funds. This can be done by developing
competitive skills to compete with other private and nationalized
banks

2010 onwards To concentrate mainly on industrial sector for

application and allocation of banks funds.

CHAPTER – III

RESEARCH METHODOLOGY
Research methodology

Research is composed of two syllables, a prefix re and a verb search.

Re means again, anew, over again. Search means to examine closely
and carefully, to test and try, to probe. The two words form a noun to
describe a careful and systematic study in some field of knowledge,
undertaken to establish facts or principles. Research is an organized
and systematic way of finding answers to questions.

Redman and Mory defines research as a “Systematized effort to gain new knowledge”. It
may be noted, in the planning and development, that the significance of research lies in
its quality and not in quantity. Research methodology is the specification of method of
accruing the information needed to structure or solve at hand. It is not concerned to
decision of the fact, but also building up to data knowledge and to discover the new facts
involved through the process of dynamic change in the society.

Research Design

Research design is a pattern or an outline of research project working. It is a statement of

essentials elements of a study, those that provide the basic guidelines for the details of the
project. Further a research design is an arrangement of condition for collection and
analysis of data in manner that aims to combine relevance to the research purpose with
economy in procedure. Research design stands for advance planning of the methods to be
adopted for collecting the relevant data and the techniques to be used in their analysis,
keeping in view of the objectives of the research.

Under this project, Research design carried out was exploratory in nature

Objective of Study

• To get information about a cooperative bank & its functions etc.

• To know the structure and various schemes of loans provided by The Central

Cooperative Bank Head Office Patiala .

• To know the purpose of granting various types of loans by the bank according to

the various categories of customers.

• To know the process of granting loans by the bank.

Collection of Data

Collection of data is most significant stage of every research. There are two types sources
from where data is collected . These are : I) Primary Sources II) Secondary sources

Data has been collected both primary as well as secondary sources as described below:

• Primary Sources

The primary sources of data were circulars relating to the bank and personal observation.

• Secondary Sources

The secondary sources of the data were the information about the PATIALA CENTRAL
CO-OPERATIVE BANK LTD. and the bank’s profile which includes functions of bank
and various schemes of granting loans etc. These helped in gaining knowledge about the
Bank.

Limitations of Study

• Lack of personal interest of employees to provide information and adequate time.

• Some employees were hesitant in providing complete information.

CHAPTER – IV

ANALYSIS OF LOAN PROCEDURE

AND
LOAN SCHEMES
Definition of Loan

An arrangement in which a lender gives money or property to a borrower, and the

borrower agrees to return the property or repay the money, usually along with interest, at
some future point(s) in time. Usually, there is a predetermined time for repaying a loan,
and generally the lender has to bear the risk that the borrower may not repay a loan
(though modern capital markets have developed many ways of managing this risk).

Importance of Loans in Today's Life

Everyone needs money at every stage of their life. Sometimes it so happens that they
have keen desire to purchase their favorite stuff but they are incapable to purchase due to
shortage of money.

Here lies a question that a person who does not have a good amount of money at
particular time has no right to see dreams? Is he not authorized to fulfill his desires on
time? Should he stop dreaming? No, because there is solution for these queries. Loans are
available for these purposes only.

Loans are provided to people for such critical circumstances which may occur at any
time. In anyone's life a situation may come when all of sudden you require cash. A
moment when you do not want to borrow cash from your relatives.

There may occur any kind of emergency when you need huge amount of money. There
are various types of loans like home loans, personal loans, student loan, business loan etc.
You can take any type of loan you need. For each and every kind of need, loans are
available.

Home loans are available for general home purposes like buying a luxurious car, going
for a holiday trip, educational purpose, home improvement etc. Many of your desires can
be fulfilled by this loan.

Personal loans are available for personal requirements like wedding ceremony,
purchasing a home etc. Student loan as it itself suggest is that it is provided basically to
students for higher education. Students who want to study more but can not afford can get
apply for such loans and continue their studies.

To start a new business you require a huge amount of money. A person willing to setup a
business may not have that much cash which can meet out his requirements. For this
business loans are available. You can get business loans to start and well establish a new
business in market.
Whatever may be the kind of loan, all have full fledged facilities. All kind of loans have
their own importance. Above all, need of money explains the importance of loan.
Appling for loan is very easy. Apply for that loan whichever is needed to you. But before
applying you should go through different lender's policies and apply for that lender which
is beneficial for you.

Different lenders have different policies. If you get loan for long term with low rate of
interest then it is beneficial for you. Due to competition, lenders are trying their best to
attract people by providing different schemes which in turn is good for people. And
cooperative bank is also one of them.

What is a Procedure?

A procedure is a specified series of actions or operations which have to be executed in

the same manner in order to always obtain the same result under the same circumstances
(for example, emergency procedures). Less precisely speaking, this word can indicate
a sequence of tasks, steps, decisions, calculations and processes, that when undertaken in
the sequence laid down produces the described result, product or outcome. A procedure
usually induces a change.

Importance of Procedure Manuals

One of the worst case scenarios of office problems involves a very important job that
cannot be completed by the support staff because of a lack of information on procedures.
Nearly every company prepares job descriptions, but most neglect efficient, exact

and up-to-date procedures manuals. A job description entails. A procedures manual gives
a detailed and informative guide to how the job is done and enables someone to do the
job in an emergency. Henrik Ibsen once said, "A community is like a ship; everyone
ought to be prepared to take the helm." Likewise, an office - people should be able to
pitch in and get the job done. This is possible only if they are provided with the proper
instructions and materials.

Every job entails a certain sequence of paperwork, routine tasks and contacts. For
example, someone might be in charge of travel arrangements. A job description would
state that the job entails making both domestic and foreign travel arrangements and
processing invoices for this. A procedures manual would give the names and phone
numbers of various travel agencies used for the firm, the best people to contact, how to
process the invoices by explaining the forms and what department handles them. If the
person in charge of travel arrangements is out of the office, someone else can open the
procedures manual and follow the directions to do the job.

Managers should see that every support staff employee in his or her department prepares
a procedures manual for each job. At the beginning, the manager should meet with each
employee individually and discuss the preparation of the manual so that its function is
fully understood. An outline of what is expected should be prepared and given to each
employee to follow. The outline should cover:

1. What - A description of the task.

2. When - How often it is done.

3. Who - What people are involved in completing the task.

4. How To - Sequence of steps to complete the job. Phone numbers, addresses, chain of
command, forms or materials needed (and where they are kept), potential problems and
solutions based on experience. If office machines are involved (computers or
word processors), a description of how they are operated for this particular job (i.e. if
disks are used, where information is stored, how to retrieve the information, electronic
mail, etc.). If a computer sequence is followed to complete forms or reports for the task,
copies of each screen used should be made and placed in the procedures manual in the
proper order. A "dummy" of each page should be filled out so that it can be easily
followed.

• Important details
• One of the most important aspects of a procedures manual is that it is detailed and
gives all the necessary information to get the job done in the quickest way
possible. If persons, agencies or companies outside your company have to be
contacted to complete a job, the procedures manual should give specific names,
departments, addresses and phone numbers as well as a brief description of what
each does, how long it will take, what you need from them and what they need
from you.
• Another important part of the manual is making sure that it is up to date. Outdated
information will only confuse someone and will not get the job done. All
employees should be instructed to check the procedures manual they have
prepared at least once a month to see if phone numbers, names or directions need
updating. Both the employee and manager should have copies that are accessible
to others.
• One of the problems in every office involves employees who are reluctant to, or
refuse to, share information because they feel it will diminish their importance.
Keeping the job "complicated" and being the only one able to do it gives this type
of person a sense of job security and self-esteem. They do not want someone else
to do their job at all, no less do it well. Unfortunately, this type of thinking does
much more harm than good. A good manager must be able to communicate to
these employees that a procedures manual is vital and must closely monitor the
employee to see that a manual is prepared and is viable. Employee resistance to
the idea of doing a procedures manual is to be expected. Some people will be
afraid that their writing skills are inadequate and they will be unable to do their
part properly. These employees should be helped as much as possible and
 encouraged to do the best they can. Their contributions can be polished later on.
Usually, resistance is greatest among those who know they have more time on
their hands than the job entails. These people will usually denigrate the whole
idea of writing down what they do in detail, knowing that keeping the details
vague makes the job sound a lot busier than it really is. Some tasks can take 10 to
15 minutes if you know exactly what to do and might take most of the day for the
uninitiated to muddle through and try to get it right when the usual person in
charge is out. People do get sick, quit or leave for a variety of reasons - often
quite suddenly. A procedures manual is not a panacea for all office management
problems, but it certainly helps.
• A procedures manual also allows a manager to see what people are doing and
estimate how long certain duties take. What is vaguely written in a job description
as "handle board room reservations" could take from five minutes to hours
depending on what is involved. A procedures manual would indicate whether the
person in charge simply keeps a reservation book noting the names, dates and
times or arranges for audio/video equipment, extra seating, coffee or other
beverages and refreshments, provides writing tablets and pens or takes minutes as
part of the job, including contacting maintenance people to see that the room is
cleaned before and after and arranging with the receptionist to make sure the
names of all outsiders are given to her and guests are properly directed to the
location of the meeting. Obviously, there is a big difference in the amount of time
expended, depending on what steps are involved. Detailing the steps involved
would enable anyone to take care of the job without confusion and problems.
• Hiring decisions
• Managers can, therefore, make decisions about consolidating certain jobs when
there is an obvious lack of work in some jobs and too much in others, can make
hiring decisions as to whether or not extra staffing is required or whether people
can be let go. If you ask an employee what a job entails and she or he says, "I do
this, this and this," you have very little idea of what time and effort is involved
unless you have done the job yourself (probably unlikely), or have it written down
in a procedures manual.
• Another advantage of the procedures manual is that a manager can see whether or
not an employee is suited to a certain position. If the employee seems to go about
tasks in the most complicated, difficult manner, obviously retraining is necessary
or the employee should not be in the job. A manager should be able to see, by the
step outlined in the manual, whether the job is being done as efficiently as
possible.
• A procedures manual can help avoid confusion when someone has to step in and
do a task that is not normally part of his or her job. This enables the office to run
much more smoothly and gives managers a "feel" for what is going on in their
departments. It also enables the manager to feel more confident about being in
charge because he or she knows precisely what is going on in the department.
Most employees will welcome the manual when they are called upon to fill in or
help out because they will at least have some idea of what is to be done and how
to do it. A procedures manual is a simple office tool that can save a lot of time
and avoid a lot of problems.
 Loan Procedure
The loan to get passed, it has passed through many hands as shown in the following
figure.

Inquires Information

Procedure for getting a loan

I. Customer

Under the above procedure customer means the per who wants to take a loan.
Custer may be a farmer , student, employee of govt. or semi govt. or any
institution approved by the board of directors of the bank, individuals ,
companies, trust, firm, cooperative Societies etc.

II. Reception

Here a person (customer) inquires about the loan rates and other prerequisites that
are to be submitted. He is provided this information by the clerk at the reception.
For example a person want to take a vehicle loan . At this step he is get the
information about the amount sanction criteria, interest rate, period of time, mode
of loan disbursement, mode of repayment, perquisite documents etc.

III. Submission of documents:

After getting the information customer submit the required document to bank
facility. For example: to take a House Loan he submitted various types of
documents like:

1. Demand Pronote note (D.P.. note)

 2. Two latest attested passport size photographs of borrower
3. Proof of Residence
4. Source of Finance for own contribution
5. Copy of approved drawing of the proposed dwelling unit to be
constructed/purchased from Sarpanch/Numberdar.
6. Agreement of sale deed.
7. Details of cost/estimate from approved Architecture/valuer/Engineer of the house
to be purchased/constructed/ renovated/addition to made.
8. Non encumbrance certificate.
9. Latest jamabandi and girdawri.
10. Certificate of ownership of land/property situated within Red Line of the village
from the Sarpanch/Numberdar/Patwari
11. The borrower shall be also required to submit collateral security @100%of loan
amount etc.
12. To take a loan borrower firstly required to take nominal member ship of bank.

Only after fulfillment and submission of all documents which are required
according to take various types of loans, the process is started actually.

VI. Credit rating:

Based on the documents submitted by the customer, the credit rating of the
customer is done i.e. how much the loan amount should be granted to the
customer is calculated. This is done as follows.

1. First the total value of the customer’s assets is calculated. For example if loan
is on a stock plus if he has provided the papers of his business land, then in this
case his credit will be calculated as a sum of the value of both these assets.

i.e. total value = value of stock + value of land

2. Now, according to the rules of bank some percentage of the value of these
assets can only be given as loan. This percentage varies for different types of
loans and based on it the sanctioned loan amount is calculated.

V. Inspection:

After having calculated the credit and the amount that can be sanctioned for loan,
the file is forwarded for inspection. Here, the officer verifies the work done by the
clerk at the credit rating desk. Moreover, he checks the bank’s database to see if
the loan taker has any previous obligations which are remaining to be met (if he is
an old customer). After the satisfaction with all the parameters, he hands over the
file to the loan manager.

VI. Loan Manager:

 At this step , the file of customer reexamined by the loan manager. If the loan is
consumer loan then it is directly granted by branch manager . But if the loan is
personal loan or vehicle loan or any other type of loan then it is granted by senior
manager or district manager. The powers of granting different types loans of
different mangers are as under:

• Branch Manager: Branch Manager has power only to grant the consumer loan.
The maximum amount is granted up to 100000 Rs./-.
• Senior Manager: Senior Manger has power to grant a loan up to amount 200000
Rs./- only.
• District Manager : District Manager can grant a loan from 200000 Rs./- to
500000 Rs./- only
• Board of Directors: If the loan amount is greater than 500000 Rs./- then it is
granted by the board of directors of the Patiala Central Cooperative Bank.

So according to different types and different amounts of loans, these are granted
by above parties. At this stage loan granting manager recheck all the documents.
Loan manager pass the loan if customer fulfill all requirements. But if there is any
thing which is unclear or insufficiency in the documents, he has power to reject
the loan application. But he is also liable to give specific reason to the customer
about the rejection of loan.

VII. Meeting:

If the amount of loan is grater than 5 laces then a meeting is conducted between
board of Directors of the bank After having examined the file, the file is then put
forward before the Chairman and Managing Director (MD) in a meeting. This file
is then cross examined. If all the members of top management are mutually
consent then the application of loan is ready for disbursement of loan amount.

VIII. Insurance:

Before issuing the loan amount or opening of a/c for loan, the customer is
required to get insurance on the thing on which he wishes to take loan. This is
done by bank with the help of United India (UI) Insurance Company. Moreover,
if any other thing is mortgage for taking loan, then the insurance is taken on that
particular thing also. This is explained in detail in the coming sections.

IX. Giving away of Loan:

After paying the insurance amount, the loan amount or account is handed over to
the customer. Before the disbursement of loan amount to customer firstly bank
require becoming a nominal member of bank, then loan amount is paid to the
customer.
 In some type of loan schemes the amount of loan is paid into installments. Like in
case of Rural Housing Loan amount is paid into two installments:-

a. 1st installment at the time of starting 50%

construction up to plinth level.

b. 2nd installment after completion up to 50%

roof level.

In case Urban Housing Loan amount of loan is disbursed into three installments:

a. For purchase of plot – 50%

b. Up to roof level – 25%
c. After roof level – 25%

So above are the various stages into loan procedure adopted The Patiala Central
Cooperative Bank. Any customer can easily get a loan to fulfill his/her various
requirements and get it fastly as per as possible.

Loan Schemes
* Scheme for Financing Rural Housing *

Preamble:- With a view to provide housing facilities to the masses which is a basic need
of human beings, the GOI and State Govt. are attaching utmost importance to the
financing of housing sector. Several housing schemes for this are in operation. With a
view to supplement these schemes, it has been decided by the Coop. Bank to start
housing finance for acquisition, construction, repair/alteration etc. This scheme has
particularly been designed for rural people, where other financing institutions are
reluctant to advance. The scheme shall be called the “Scheme for Financing Rural
Housing” and is applicable to individual/members of house building cooperative societies
in the state of Punjab and Chandigarh (U.T.)

Eligible Borrower: - 1) Individuals

2) Cooperative Housing Societies

Purpose of Loan: - Loan shall be advanced under the scheme for purchase of built up
house, construction of a new house or repair/ renovation/addition/alteration of existing
house in rural areas.
Ceiling on the cost: - The loan for a dwelling unit may not exceed Rs.15.00 lacs. In case
land is being acquired the cost of land may be reckoned as margin money, otherwise cost
of land should not be included in the project cost

Quantum of Bank loan for Individual: - The quantum of loan shall depend upon
repaying capacity of the borrowers, subject to 85% of cost of construction or value of
property to be purchased.

For construction/purchase of new House

a. Maximum loan – Rs.15.00 lacs

b. Margin Money – 15%

Repayment period – Up to 15 years in monthly/half yearly installments. Due date

shall be 30th June and 31st December every year.

For Renovation/Repair/Addition/Alteration:

a. Maximum loan – Rs.5 lacs (for repair/ addition /alteration of House)

b. Margin money – 15%
c. Repayment period – 10 years in monthly/half yearly installments.

Loan eligibility shall be calculated on the basis of repayment capacity of the borrower.
The repaying capacity shall be determined on the basis of land holding and other known
sources of income and commitments/subsistence towards his family. A reasonable
installment to income ratio i.e. normally upto 35% of the gross income can be taken as
repayment capacity of the borrower. Income of the co-applicant can also be considered
for loan eligibility.

Period of Loans: - The maximum period of loan shall be upto 15 years and loan shall be
repayable in equated monthly/half yearly installments. The first installment shall become
due after expiry of 9 months from the date of drawl of first installment in case of
construction and whereas in case of purchase of built up house, it shall start after expiry
of 3 months from the date of purchase.

Rate of Interest: - At present rate of Rural Housing is 11% and further it shall be
determined by financing bank from time to time and debited to loan account. Interest

Is charged as contract made with the loanee. Penal interest @ 2% over and above the
normal rate shall be charged in case of default, on the default amount for the default
period. 0.5% concession is allowed to women.

Security: - The security of the loan shall be first mortgage charge on the house property
to be financed by the bank by way of registered regular mortgage. In addition to it
collateral security shall be taken @ 100% of the loan amount in the form of agriculture
land. Value of agriculture land as per norms fixed by the District Collector from time to
time should be taken into consideration. In case of employees of the Govt., semi govt.,
Boards, Corporation, etc., constructing house within rural areas, loan can be advanced on
primary security i.e. mortgage of house to be financed, along with two good sureties and
undertaking under section 39 of Punjab Cooperative Societies Act., 1961.

Sanction and disbursement of Loan: - The loan shall be sanctioned after it is

ascertained that the applicant fulfils all the requirements and enjoys reputation as a good
pay master. For construction loan, the borrower should be in possession of plot with
unquestionable and indisputable title. In case of built up house, the payment shall be
made @ 75% of total value of the house/Loan sanctioned. Payment shall, however, be
made to third party in lump sum after getting margin money from the borrower and
remaining 25% shall be released after obtaining Mortgage Deed in favour of the Bank.
For construction of house, loan shall be disbursed in 2 installments, which is as under:-

c. 1st installment at the time of starting 50%

construction up to plinth level.

d. 2nd installment after completion up to 50%

roof level.

2nd installment shall be disbursed after ensuring proper utilization of previous installment.

Processing Fee & Other Charges: - Processing Fees and other charges @ 0.25% of loan
amount shall be charged

Documentation & general requirements: - Following documents are required for

financing under Rural Housing Scheme

1. Application form
2. Loan agreement
3. D. P. Note
4. Two latest attested passport size photographs of the borrowers.
5. Proof of residence.
6. Source of Finance for own contribution.
7. Copy of approved drawing of the proposed dwelling unit to be
constructed/purchased from Sarpanch / Numberdar.
8. Agreement of sale deed.
9. Details of cost/estimate from approved Architecture/ Valuer/ Engineer of the
house to be purchased/ constructed /renovated /addition to be made.
10. Non-encumbrance certificate.
11. Latest Jamabandi and Girdawari.
12. Certificate of ownership of land/property situated within Red Line (i.e. Phirni) of
the village from the Sarpanch/Numberdar/Partwari.
 13. The borrower shall mortgage his existing property : to be constructed/purchased
in favour of the bank for the full value of loan.
14. The borrower shall be required to submit collateral security @ 100% of the loan
amount.

Additional Documents from Employees:

i. Salary Certificate.
ii. Undertaking U/S 39.
iii. Post dated Cheques.
iv. Completion certificate.

* Scheme for Urban Housing Loan *

Short title Extent and Commencement

a. This scheme may be called Urban Housing Loan Scheme to individual and
members of house Building Societies by The Punjab State Cooperative
Bank/Central Coop .Bank (s) in the State of Punjab.
b. The scheme shall be implemented through the branches of the PSCB/Central
Cooperative banks concerned and shall be limited to urban areas falling in the
area of operation of the lending Bank.

It shall come into force from the date as the Registrar Coop. Societies, Punjab
Chandigarh decides.

Purpose: - Loan shall be advanced for the purchase of plot, purchase of built up house,
construction of house or repair, renovation, additions, alteration, etc. in the existing
house. Loans shall also be given for acquiring a plot, flat, house in an existing or
proposed Cooperative House Building Society and approved scheme of PUDA, House
fed, Improvement Trust or any other Govt. Agency.

Loan can also be advanced for take over of an existing loan advanced by any other
bank/financial institution subject to the condition that the loan account should have
remained in the standard category of assets for at least last 2 years in the previous
financial institution

Eligibility: - An individual residing in the area of operation of the Bank may apply for
the loan in his individual name or along with another person being joint owner of the
land/property as co-applicant. The applicant and co-applicant, if any will be enrolled as
nominal members of the bank under the Act, Rules and Bye Laws.

Note: The Borrower should not have defaulted in any other loan.
The applicant shall be eligible for a total house building loan not exceeding 75% of the
total cost of house (cost of construction + cost of plot, if plot is to be purchased) and the
loan out of it for purchase of plot will not exceed 50% of the total loan sanctioned. The
remaining, exceeding or up to 50% shall be utilized for construction of house thereon”.

The employees of the Punjab State Cooperative Bank or Central Cooperative Banks who
have already availed house loan under Govt. or Bank Scheme from the Punjab State
Coop. Bank or Central Cooperative Banks can also get loan under the scheme subject to
maximum of Rs.25 lacks under both house loan scheme. It will be further subject to the
repaying capacity of the employee in accordance with their last salary statement. Further
this loan to employee will be against second charge on the said property.

Quantum of Loan: - The quantum of loan will depend upon the repayment capacity of
applicant to be calculated by the bank as under :

21 yrs. To 45 yrs of age.

48 times of the net monthly income (NMI) or 4 times of Net Annual Income (NAI)

Above 45 years

36 times of Net Monthly Income (NMI) or 3 Times of Net Annual Income of the spouse
or family member can be considered if spouse or family member is co-applicant or
guarantor. Maximum loan amount for construction of house or purchase of house/flat,
purchase of plot + construction thereon under this scheme is Rs.25 lacks or 75% of total
cost of construction, purchase of house (cost of construction + cost of plot, if plot is to be
purchased), whichever is less.

The loan for purchase of plot will not exceed 50% of the total loan sanctioned.

For repair/renovation maximum amount of loan shall be Rs.5 lacks.

For addition/alterations in existing house, maximum loan amount shall be Rs.10 lacks.

Interest: - At present rate of Urban Housing is 11% and further it shall be determined by
financing bank from time to time and debited to loan account. Interest

Is charged as contract made with the loanee. Penal interest @ 2% over and above the
normal rate shall be charged in case of default, on the default amount for the default
period. 0.5% concession is allowed to women.

Period of Loan/ Repayment of Loan: - Maximum period (including moratorium period)

shall be 15 years or attaining the age of 65 years whichever is earlier. In case of
repair/renovation /addition/alteration loan cases maximum period shall be 10 years.
Repayment of the loan shall, however, be in monthly equated installment to be started
from 9 months after the first installment of loan disbursed. In case of the farmers availing
loan under this scheme, repayment of loan may be in half yearly installments i.e. 30th
June and 31st December every year.

Security: - Security for the loan is a first mortgage of the property to be financed
normally by way of deposit of original title deeds.

Disbursal of Loan: - The loan shall be disbursed after the property is technically
appraised, all legal documentation completed and borrower having invested own
contribution in full (own contribution is the total cost of proposed property – Bank loan).

In case of purchase of plot + construction, the disbursement shall be in 3 installments as

follows:-

For purchase of plot – 50%

Up to roof level – 25%

After roof level – 25%

Loan will be disbursed at one go for purchase of a built up house. However, for
construction on pre-owned plot, the disbursement shall be in two installments.

1st Installment for construction after plinth level – 50%

2nd Installment for construction of the building after roof level – 50%

Loan for repair, additions, alterations and renovation shall be disbursed in two equal
installments. The second and subsequent installment of loan shall be disbursed only after
ensuring the utilization of previous installment to Bank’s satisfaction. Bank shall not be
bound to accept progress construction as assessed by builder.

Fee & Other Charges: - A processing fee @0.25% of the loan amount sanctioned will
be charged.

Documentation - Pre-sanction stage: -

1. Identify proof.
2. Residential Proof.
3. Self attested recent passport size photographs of the applicant and co-applicant
(two).
4. Copy of Income-tax Return for the three years duly acknowledged by ITO
concerned.
5. Sources of Finance for own contribution.
6. Non-encumbrance certificate.
 7. Search report & legal opinion along with photograph of the property.
8. Original title deed.
9. Spot Physical verification.
10. Purchase agreement of property.
11. Income Proof/J-Form.
12. Loan application Form

Post – Sanction Stage

1. Loan agreement.
2. Demand Promissory Note.
3. Mortgage Deed
4. Letter of Lien and Set Off
5. Letter of Waiver
6. Letter of Guarantee

Employed applicants: - Undertaking from the employee under section 39 of Punjab

Cooperative Societies Act, 1961.

Insurance: - Comprehensive insurance in the joint names of the borrower and the bank
shall be made of the property mortgaged against fire, riots earthquake lighting floods etc.
Incase of default bank will be at liberty to get a policy renewed by debit to house loan
account of the borrower

Additional Documents in construction cases: -

a. Construction Plan approved by a competent authority.

b. Detailed Cost estimate from Registered Architect/ Civil Engineer.
c. A photocopy of registered title deeds or allotment letter (in case of member of
Cooperative House Building Societies

In purchase ofBuilt Up House cases.

a. Agreement of sale/sale deed/detailed cost estimate from approved engineer.

b. In case of allotment of flat/houses, photocopy of allotment letter and details of
balance payment, if any.

Disputes

If at any stage any dispute arises, it will be settled/referred under the Punjab Cooperative
Societies Act 1961.

* Personal Loan *
The Bank offers Personal Loan for various purposes such as meeting medical expenses,
renovation of residential accommodation, traveling, marriage etc.

Eligibility : - salaried employees of Punjab government, PSUs, Boards, Corporations,

Aided Schools/Colleges, Universities, Public Sector Banks, Premier Medical
Institutions, General Insurance Companies, Co-operative organizations in the state of
Punjab or any other organizations as approved by the Board of Directors of the respective
Bank etc.

Age: - Minimum 21 years and Maximum 57 years.

Service Tenure: - 1 year after the confirmation/regularization.

Loan Amount: - 12 Times of gross monthly salary or Rs. 2,00,000/- only , whichever is
less.

Period of Loan: - Maximum- 5 years. Loan may be repaid in 36/48/60 Equated Monthly
Installments (EMI).

Rate of Interest: - 14% p.a.

Income: - Net income of the person should not be less than Rs.5,000/- p.m. in case of
salaried persons and Annual Income of not be less than Rs.60,000/- in case of others.

Repayment of Loan: - Loan is repayable in equated monthly installments in the form of

post-dated cheques. The 1st installment will start after one month. The Loan will be repaid
before retirement.

Security : - No collateral security is required, only two guarantor know to the bank.

Option to repay loan: - Borrower can make the part pre-payment of loan. No penalty
will be charged.

General: - No employee will be given this loan facility, which has defaulted in
repayment of loan under any other scheme.

* Consumer Durable Loan ( salary / Non Salary Earners) *

Scheme for Granting Loans to Individual Salary and non-salary earners by the state and
central cooperative banks for socio-economic needs

1. The bank may grant loans to individual salary earners and non-salary
earners holding saving bank account or current account with the bank for
purchase of consumer durables and meeting other socio-economic needs.
2. The loan should be repayable in monthly installments but the total
duration of loan should not exceed three years in any case.
3. The borrower should be enrolled as a nominal member of the Bank.
The Borrower should be required to produce 2 sureties who should also be
nominal members of the Bank.
4. In case of SALARY EARNERS, the amount of loan should not
exceed Rs.1.00 lac per borrower or 75% of the cost of article to be
purchased whichever is less, in accordance with the slabs fixed hereunder:-

Total net emoluments upto Rs.5000/- - Loan

Amount = Rs.25000/-

Total net emoluments from Rs.5001/- to Rs.7500/- - Loan

Amount = Rs.40000/-

Total net emoluments from Rs.7501/- to Rs.10000/- - Loan

amount = Rs.50000/-

Total net emoluments from Rs.10001/- to Rs.15000/- - Loan

amount = Rs.75000/-

Total net emoluments above Rs.15001/- - Loan

amount = Rs.100000/-

In case of NON-SALARY EARNERS, the amount of loan should

not exceed Rs.50000/- per borrower or 75% of the cost of article to be
purchased in accordance with the slabs fixed hereunder:-

Half Yearly Income Amount Loan

a) Upto Rs.18000/- Rs.15000/-

a. From Rs.18001/- to Rs.27000/- Rs.25000/-

b. From Rs.27001/- to Rs.40000/- Rs.30000/-

c. More than Rs.40001/- Rs.50000/-

5. The loan should be advanced for acquiring new assets only. Purchase
of second hand articles should not be financed in any case.
6. The bank should obtain salary certificate from the borrower. The
borrower himself should be responsible for the repayment of his loan.
However he should also produce a copy of authority letter addressed to the
bank and also an undertaking to the effect that in case borrower commits
default in repayment of his loan installments, then his salary or loan
amount due will be credited to his loan account till the bank directs to do
so. The bank shall inform the employer immediately after the sanction of
loan.
7. In case of default by the borrower, the bank will ask the employer of
the borrower to deposit the due amount by deducting from the salary of the
employee.
8. The borrower should give standing instruction to debit the amount of
installments or overdue installments together with interest due on that loan
every month to his saving bank account or current account as the case may
be.
9. The bank should also obtain the following documents from the
borrower :-

a. Salary certificate/proof of income

b. Loan agreement.
c. Demand Promissory Note
d. An authority letter from the borrower under Section 39 of
Punjab Cooperative Societies Act, 1961 for repayment of
loan in case the borrower fails o repay the loan.
e. An authority letter from the borrower to recovery the
installment/interest by debiting to saving/current account.
f. Letter of waiver.

g. Post dated cheques equal to number of installments should

be obtained from the borrower.
10. The bank should take original invoice from the dealer and then the
loan amount together with margin money should be paid through Bank
Draft directly to the dealer to avoid misutilisation of the loan.
11. The loan should be advanced against hypothecation of the asset/assets
acquired/to be acquired, if any.
12. At present rate of consumer loan is 14% and further it shall be
determined by financing bank from time to time and debited to loan
account. Interest is charged as contract made with the loanee. Penal
interest @ 2% over and above the normal rate shall be charged in case of
default, on the default amount for the default period. 0.5%concession is
allowed to women.

* Sehkari Education Loan scheme *

Education loan is granted for higher studies in colleges in India and abroad in any
educational field in college affiliated with recognized universities, medical colleges,
technical institutions, pharmaceutical colleges, Information Technology and professional
courses, Management etc, so that students from poor & middle classes as well as brilliant
 and needy students can take advantages of the scheme. [The scheme will not cover any
correspondence course].

Eligibility: -

Age of student- An Indian National with minimum of 17 years and maximum 35 years
of age can apply for this loan.

Age of Father- The age of Father/Guardian should not be more than 65 years till full
recovery of loan amount.

Education Qualification- Minimum Qualification for co-operative education loan (CEL)

is plus two (+2) and the applicant must have secured at least 50% marks in the last
examination passed.

Admission to Course: - The applicant must secured admission or has got the consent of
the institution to admit to any one of the above-mentioned courses.

Duration Of Course: - The course should not be more than 5 years.

Purpose of Loan

I. Admission Fee
II. Purchase of books and stationary
III. Purchase of instrument required for course undertaken by applicant.
IV. Laboratory charges if any.
V. Monthly/quarterly tuition fee.
VI. Library charges.
VII. Caution deposit/Building Fund.
VIII. Refundable deposits, if any.
IX. Expenses on projects if any.
X. Boarding and Lodging expenses
XI. Computer purchase if required.
XII. Air fare for joining the course (for study abroad)
XIII. Examination Fee.

Amount of loan:

For Studies in India Rs. 5.00 lacs

For Studies Abroad Rs. 10.00 lacs

Rate of interest: - The rate of interest on Cooperative Education Loan Facility(CEL)

shall be 7.25% per annum. This rate is however subject to change from time to time.
Processing Charges: - No processing charges shall be charged under CEL.

Insurance of student: - Life Insurance Policy will be taken on the life of the student
borrower for an amount equal to the loan amount and should be assigned in favour of
Bank.

Security: - No collateral security is required up to a loan of 25000/-. This loan shall be

advanced against two good sureties. The loan above Rs.25000/- will be advanced against
collateral security by the applicant/guardian. The collateral security can be in the form of
land/building NSC/KVP/LIC Policy/bank deposits in the name of
student/parents/guardian. The valuation of the collateral security shall be equivalent to
the loan amount.

Disbursement of Loan: - The branch will get sanction of whole loan amount from
competent authority but will disburse the amount based on yearly expenses of course. In
the first year disbursement will be equivalent to the expenses of first yearly only.
Subsequently the loan amount for the next year will be disbursed after successful
completion of previous year. The disbursement of loan should be by Demand Draft/bank
cheque in favour of concerned university /college. In case of purchase of
equipment/books/computer the payment shall be made to the applicant.

Recovery of Loan: - The recovery of principle amount will start after one year of total
duration of course or after 6 months of getting the job/employment by the applicant,
which ever is earlier.

Basic Requirements: -

1. Admission Letter.
2. Mark Sheet / Certificate for passing last Board / University examination.
3. Students going abroad for study will have to submit the necessary documents such
as copy of Passport, copy of Admission Letter, copy of Form I-20 (for U.S),
Visa, etc.
4. Applicant should produce year-wise estimated total expenditure which is to be
incurred such as Tuition Fees, Term Fees, Living Expenses, Traveling, Cost of
Books, Examination Fees, etc. Hypothecation of stocks and book debts.
5. Progress Report of the studies of the student from time to time.
6. Disbursement of loan will be made at stages during the duration of the course of
the study as per the requirement as mentioned in the schedule of year wise
estimated expenditure.
7. Any scholarship received during the course of study must be intimated to the bank
and as far as possible such amount received should be adjusted in loan account.
8. If study is discontinued for whatsoever reason, Bank must be informed and loan
amount must be paid immediately.
9. All other documents and information to be provided as per checklist provided
with the Application Form.
 10. The loan documents should be executed by both the student and the Parent /
Guardian as C o-applicant.

* Vehicle Loan *

Rule These rules are called the rules for granting of Vehicle Loan to individuals,
No.1 firms, HUF, Companies, Trust and Cooperative Societies.

Rule Purpose of loan is to provide financial assistance to purchase new vehicles

No.2 for business and personal use.
Rule The maximum amount that can be sanctioned under the scheme is limited
No.3 to Rs.10.00 lac or 80% of value of the vehicle whichever is less.
Rule The cost of the vehicle shall be paid directly by the Bank to the suppliers
No.4 or authorized dealers on receipt of intimation from the dealer and
instructions from the applicant.
Rule The application for loans should be made in the form prescribed by the
No.5 Bank.
Rule Wherever sanctioning authority is satisfied, loans upto 60% of the cost of
No.6 vehicle shall be granted against the comprehensive insurance and lien in
the registration certificate. In case loan is above 60% of the cost of vehicle
(subject to 80% of the cost as stipulated in the rules), two good sureties
shall also be taken in addition to the insurance and lien in registration
certificate in case of buses and trucks for commercial use.
Rule At present rate of vehicle loan is 13% and further it shall be determined by
No.7 financing bank from time to time and debited to loan account. Interest is
charged as contract made with the loanee. Penal interest @ 2% over and
above the normal rate shall be charged in case of default, on the default
amount for the default period. 0.5% concession is allowed to women
Rule The vehicle should be comprehensively insured for the full value covering
No.8 all risks and the policy should be in the joint names of borrower and the
bank with agreed bank clause.
Rule The charge of the bank on the vehicle in the form of registration should be
No. 9 registered with the registering authority within 90 days of purchase of
vehicle, failing which additional interest at the rate of 3% shall be charged.
Rule The repayment of loan should be in the form of monthly installments to be
No.10 repaid within 5 years. However farmers may opt for half-yearly
installments due on 30th June and 31st December. One month moratorium
period shall be allowed under the scheme.
Rule The Bank reserves the right to proceed against the borrower and sureties in
No.11 the event of default in the repayment of loan installment/s.
Rule The borrower should agree to produce the vehicle for periodical inspection
No.12 to ensure that it is maintained in satisfactory condition.
Rule The borrower should agree to be bound by arbitration provisions in the
No.13 Punjab Cooperative Societies Act 1961 and the Rules framed there under.
Rule The borrower should give an undertaking stating that all the terms and
No.14 conditions stipulated by the Bank while sanctioning the loan and those
conditions that may be stipulated in future by the bank are acceptable to
him.

* Second Hand Vehicle Loan Scheme *

In the modern era there is a heavy demand for purchase of second hand vehicles and the
banks have surplus loan-able funds to diversify the loan portfolio and to provide financial
assistance to the borrowers for purchase of second hand vehicle, this scheme has been
diversified.

Short title, extent and commencement:-

a. This scheme may be called ‘Second Hand Vehicle Loan Scheme’ to individual
sole proprietor professional and partnership concern residing in the area of
operation of the lending bank by the State and Central Banks as the case may be.
b. The scheme shall be implemented through the branches of the State and Central
Coop. Banks in UT and in the State of Punjab.
c. It shall come into force from the date of approval by the Registrar Coop. Societies
Punjab Chandigarh.
d. The vehicle to be purchased by the loanee should not be more than 3 years old,
should be accident free, one time road tax paid, bearing Registration Number of
U.T. Chandigarh or the State of Punjab.

Purpose: - Loan shall be advanced for the purchase of second hand vehicle such as car,
jeep, sumo, qualis, etc. for personal/public use.

Eligibility: - An individual, sole proprietor, professional and partnership concern

residing in the area of operation having permanent account number provided by the
Income Tax authority in urban areas and in case of rural area having at least 5 acres of
agriculture land and should not be defaulter. The applicant will be enrolled as nominal
member of the bank under the Act, Rules and Bye-laws.

Quantum of Loan : - The quantum of loan shall depend upon the model and present
value of the vehicle. Present value shall be the value as provided by Sah & Sanghi in the
current price Index and also available on Website htpp.wwwautomartindia.com/Sah &
Sanghi price index. asp or the value approved by the registered surveyor of any GIC with
the condition that the insurer has to get insurance cover from the concerned Insurance
Company on whose list the name of the surveyor appears, which is lowest shall be the
quantum of loan. The maximum loan amount shall be Rs.5 lacs or 75% of the assessed
price of the vehicle whichever is less.

Interest: - At present rate of second hand vehicle loan is 13% and further it shall be
determined by financing bank from time to time and debited to loan account. Interest is
charged as contract made with the loanee. Penal interest @ 2% over and above the
normal rate shall be charged in case of default, on the default amount for the default
period. 0.5% concession is allowed to women

Period of Loan/Repayment of Loan: - Maximum period of loan shall be five years.

Repayment of the loan shall, be in monthly equated installment. In case of urban
borrowers and half yearly equated in case of rural borrowers due on 30th June and 31st
December. Moratorium period of one month shall be allowed under the scheme.

Security: - The security for the loan is 1st Hypothecation of the Vehicle in the name of
the bank entered in RC of the vehicle. Two good sureties residing in area of operation of
the bank and having a PAN Card in case of urban areas and two sureties of the status of
borrower in case of rural area. The sureties shall be enrolled as nominal member of the
bank under the Act.

OR

A collateral security to the extent of 100% of loan in the shape of assignment of life
insurance policy, pledge of NSCs, KVPs, Term Deposits of own bank, in case the
borrower is not willing to give sureties.

Disbursal of Loan: - The loan will be disbursed after the appraisal of all legal
documentation completed and borrower having deposited his share of margin in the SB
account. The disbursement will be third party payment by way of banker cheque/Demand
Draft in the name of the seller (owner of the vehicle) delivered through and under receipt
from borrower.

Fee and Other Charges : - A processing fee of 0.25% of the loan amount sanctioned
shall be charged.

Documentation : -

1. Identity proof
2. Residential proof
3. Two self attested recent passport size photographs of the applicant and sureties
each.
4. Photocopy of the PAN
5. Copy of Income Tax Return for last three years duly acknowledged by ITO
6. Photocopy of the Driving License
7. A photocopy of the RC of the Vehicle and case of rural people copy of Fard,
Jamabandi.
 8. Loan application form
9. Loan agreement
10. DP Note
11. Hypothecation deed/Collateral Security/Agreement Bond from Sureties.
12. Agreement of Sale.
13. Certificate of present value of car assessed by Surveyor of company guide or as
determined on the basis of guidelines of the Punjab Govt. on the Subject.

Insurance: - Comprehensive insurance in the joint names of the borrower and the bank
shall be made at the cost of the borrower. In case of default bank will be at liberty to get a
policy renewed by debiting to loan account of the borrower.

Dispute: - If at any stage any dispute raised, it shall be settled/referred for arbitration
under the provisions of Punjab Coop. Societies Act. 1961 and rules frames there under
and bye-laws of the bank

* Scheme of granting Loan against Property *

Short title, extent and commencement: - This scheme may be called Scheme of LOAN
AGAINST PROPERTY(LAP). The scheme shall be implemented through the branches
of the Punjab State Cooperative Bank Limited & Central Cooperative Banks only through
an urban branch in the State of Punjab and shall be available to Individuals. Beneficiaries
should be enrolled as Nominal Member of the bank. It shall come into force from the date
as the Registrar, Coop. Societies, Punjab, Chandigarh decides.

Purpose: - The scheme is for providing finance against mortgage of immovable property
situated at Chandigarh, U.T. Periphery by Punjab State Cooperative bank and at urban
areas (within Municipal Limit) by Central Cooperative bank through its urban branches,
and is designed to offer instant solutions relating to socio-economic needs such as
children’s higher education, travel, daughter’s marriage, medical emergencies, etc. The
loan will, however be not avail for speculative purpose.

Eligibility: -

a. An individual residing in and having a self occupied immovable property in the

area mentioned in the Purpose Clause no.3 may apply for the loan in his
individual name or along with another person being joint owner of the
land/property as co-applicant. The applicant and co-applicant, if any, will be
enrolled as nominal members of the bank under the Act, Rules and Bye-laws. The
age of borrower should not exceed 65 years at the time of applying for the loan.
b. Employees of the PSCB/DCCB can avail this loan against property already
mortgaged with the bank by creating second charge of property subject to the
repaying capacity of the employee as per the scheme of loan.

Type and Quantum of Loan: - The loan can be given in the shape of Term Loan or
Credit Limit. Loan can also be given for both purposes i.e. partly for term loan and partly
for credit limit subject to quantum of loan for both the loan and limit will not exceed
from Rs.25.00 lacs. Quantum of loan will be three times of net annual income or 50% of
value of property, whichever is less. However maximum loan amount will be Rs.25 lacs.
Income of family member can be considered for the purpose of eligibility of loan.

Interest: - Interest shall be charged @ 15% p.a. compounded quarterly or as may be

revised by the bank from time to time. In case of defaults a penal interest @18% p.a.
over.

Security: -

I. Security for the loan is a first mortgage of the property, against which loan/limit is
granted, by way of deposit of title deeds. The valuation of the property will be
based on the basis of last reserve price of the auction fixed by the Chandigarh
Administration. For the properties situated out side the Chandigarh, it will be the
official rates of registration fixed for the same by respective Municipal or
Registration Authority or current market value whichever is lower.
II. Suitable one guarantee acceptable to the bank. The guarantor should have its net
worth equal to or more than the loan amount to advanced. In case the income of
family member is taken while calculating loan eligibility, he/she must be taken as
guarantor.
III. Post dated cheques for the months for which repayment of term loan option is
due.

Repayment of Loan:

a. Loan together with interest is repayable in maximum 72 equal monthly

installments.
b. Overdraft facility is to be renewed/reviewed annually.

Processing Fees: - 0.5% of the sanctioned amount shall be charged. In case of limit of
0.25% will be levied every year on the credit limit.

Documentation:

1. Loan application Form.

2. Loan Agreement.
3. D.P. Note.
4. Mortgage Deed.
5. Non-Encumbrance Certificate.
6. Letter of lien and set off.
7. Map and Current Valuation Report of the property from Govt. Approved
Architect.
8. Search report and legal opinion along with the photo.
9. Letter of continuity
10. Original Title Deed.
Insurance: - Comprehensive Insurance in the joint names of the borrower and the bank
shall be made of the property mortgaged against fire, riots, earthquake, lightning, floods,
etc. In case of default bank will be at liberty to get a policy renewed by debit to loan
account of the borrower.

Documents required from applicants:

Documents required from Salaried Individuals

1. Proof of Residence – Any one of Ration Card/Telephone Bill/Electricity

Bill/Voters Card.
2. Proof of Identity – Any one of Voters Card/Drivers License/Employer
Card/Passport/PAN Card.
3. Latest Bank Statement/Passbook (where salary/Income is credited for past 6
months).
4. Latest 3 months Salary Slip with all deductions & Form 16 for last 2 years.
5. Copies of all Property Documents.
6. Self attested recent passport size photographs of the applicant and co-applicant
(two).
7. Copy of Income-tax Returns for last two years.

Documents required from the non-salaried individuals

1. Income proof.
2. Proof of Residence – Any one of Ration Card/Telephone Bill/Electricity
Bill/Voters Card.
3. Proof of Identity – Any one of Voters Card/Drivers License/Employer Card/PAN
Card.
4. Latest Bank Statement/Passbook (where salary/Income is credited for past 6
months).
5. Copies of all Property Documents.
6. Copy of Income Tax Returns for last two years.

Disputes: - If at any stage any dispute arises, it will be settled/referred under the Punjab
Cooperative Societies Act 1961 or any other relevant act at the sole discretion of the
Bank.

* Loan scheme for Earnest Money *

In order to meet requirements of the public of Punjab and U.T. Chandigarh, the
Cooperative Banks of launches one more.

Purpose: - To meet the financial requirements towards Earnest Money deposit to book
residential plots/ built up house/ flats being sold by Govt. housing agencies, urban
Development Authorities like PUDA, HUDA and Housing Boars, cooperative Housing
Building societies, House fed and Improvement Trust.
Beneficiaries: - Individuals of 21 years of age and above.

Agreement with Housing Agencies : - The Bank shall enter into agreement with the
concerned housing agencies for collection of applications on behalf of the agencies and to
get direct refund of unsuccessful applicants financed by the bank within specified time.

Margin: - No margin required.

Security : - No security required.

Maximum Loan : - As per scheme of the agency.

Interest rate : - As fixed by bank from time to time. Interest will be charged initially for
a period as stipulated by the concerned DCCB and will be non refundable. In case of
delay in allotment, repayment, refund of money beyond stipulated period , bak will
charge interest as fixed by it.

Processing Fee :- As fixed by PSCB/ concerned DCCB.

Disbursement: - The loan would be disbursed by the issuance of draft/banker’s cheque

favoring the concerned agency.

Repayment of Loan

• In case of unsuccessful candidates – on receipt of refund from the housing

board/Urban development authority etc.
• In case of successful applicants – lump sum repayment. In case applicant avails
housing loan from the bank, earnest money can be adjusted from the same.
• No prepayment penalty will be levied.
• Bank may extent the period at its discretion by getting the amount of interest in
advance.

In case of delay of allotment as per scheme, borrower shall repay amount in lump
sum on demand, otherwise bank will charge penalty.

Documents

1. Two latest Photographs.

2. Proof of residence in the form of copy of Passport, Driving License
Voter’s ID Card etc.
3. Two Post Dated Cheques in favour of the bank.
4. Signature Proof.
5. Borrower to give an authority that the representative of the bank is to
collect refund order/letter of intent/ allotment letter on his behalf from the
agency.
6. Loan agreement.
 7. Power of Attorney.
8. Declaration for signing in vernacular language.

* Coop Rent Loan Against Rental Incomes Scheme *

Introducing a new scheme for property owners having their property situated in are of
operation of the bank and who have let or proposes to et out such properties to PSUs,
reputed Govt./Semi-Govt. corporate, banks, financial institution, insurance companies,
cooperative societies, trust and MNCs.

Eligibility: - Owners of the property who have or propose to let out the same
companies/commercial/industrial/software companies, MNcs, Bank, PSUs/Reputed
Govt.Semi-Govt. Institution/Organization, Financial Institution, Insurance companies.

Owner of properties who have rented out their premises to cooperative bank are also
eligible.

In case of residential flats/house leased out to Cooperative Bank Officers.

Note: - The facility is available only to resident customers and not NRIs.

Purpose: - For meeting business/personal needs.

Loan Amount: - Maximum to the extent of 75% of post TDS rent receivable for a period
not exceeding 120 months or unexpired period of lease, whichever is less. (The rent
receivable is calculated as per rental/lease agreement and if there is any inbuilt provision
for increase in rentals during next 120 months or unexpired period of least/tenancy the
same is considered for calculation of loan amount).

The minimum loan amount under the scheme is Rs. 1.00 lacs. There is no upper limit but
it must be within prudential exposure norms.

Security : -

Primary : - Assignment of lease Rentals.

Collateral: - Equitable Mortage of relative immoveable property to the extent of 150%

of the proposed loan (For any reason if the relative property cannot be given as security
any other commercial or residential property is acceptable.

OR

Other chargeable securities such as NSCs, IVPs, Bank’s deposits to the extent of 100% of
loan amount.

OR
150% cover partly by immoveable property and partly by securities such as NSCs, IVPs,
Bank’s deposits. In case the property/security is in the name of third party, personal
guarantee of the owner of assets proposed to be taken as collateral security.

Rate of Interest: - As decided by the bank from time to time.

Period of Loan: - Maximum period of loan shall be 10 years or unexpired period of

lease, whichever is earlier.

Repayment of Loan: - By way of equated monthly installments from the proceeds of

monthly rentals, to be repaid within 120 months or unexpired period of lease, which is
less.

Margin: - Minimum 25%

Processing Charges: - 0.50% of the loan amount. These are changed time to time.

Insurance: - Insurance for full market value of properties in the name of borrower(s) to
be mortgaged to bank with bank clause. Insurance to cover risk such as fire, riot,
earthquake etc.

Documents: -

1. Loan application.
2. Certified Copy of Less Deed.
3. Proof of income for applicant and lessee.
4. Copy of IT return.
5. Certificate copies of title deeds of the properties leased out and mortgaged along
with latest tax receipts.
6. Copy of approved building plan.
7. Authority letter by the borrower to the bank for receiving rent directly from the
tenant/lessee and letter of undertaking from tenants/lessee to pay rent directly to
bank.
8. Tripartite Agreement between borrower, lessee and the bank.
9. Copy of partnership deed/memorandum and articles of Association (not for
individual applicant).
10. Copy of lease/tenancy agreement.
11. Copy of latest tax receipt of the property.
12. Latest IT/WT Assessment, if available.
13. Audited Balance Sheets of Firm/Company.
14. Certificate of outstanding balance in loan a/c against the property.
15. Copy of latest rent receipts ( in case existing tenant/lessee).

* Cash Credit Facility to Traders and Others *

Name of Cash Credit Facility to Traders and Others
the
Scheme
Rule These Rules shall be called The Punjab State Coop. Bank /
No.1 Central Coop. Bank rules for granting Cash Credit Facility to
Traders and others.
Rule 1. The bank means The Punjab State Coop. Bank Ltd.,
No.2 or Central Coop. Banks of Punjab.
2. The Board of Directors and the Executive Committee
means the Board of Directors and Executive
Committee constituted under the Bye-laws of the
Bank.
3. Authorized Officer means the Officer authorized by
the BOD/Executive Committee of the Bank to receive
and take appropriate action on the applications for
loans under the scheme.
4. Borrower means and individual, sole proprietor, firm,
cooperative society or a company doing
manufacturing/ trading business/providing services
having an assured income.
5. Cooperative Societies Act means The Punjab
Cooperative Societies Act,1961 as amended from
time to time.
6. Cooperative Societies Rules means the Punjab
Cooperative Societies Rule, 1963, as amended from
time to time.

7. Registration means the Registration under the Shops

Act or under Company’s Act.
Rule Cash Credit Facility under the Scheme shall be granted for
No.3 meeting working capital requirements.
Rule The applicant should not have availed cash credit facility
No.4 from any other financial institution for the purpose.
Rule The maximum amount of Cash Credit Limit under these
No.5 Rules shall be Rs.25 lac.
Rule The application for cash credit limit shall be made by the
No.6 borrower on the prescribed form of the bank.
Rule The sanctioning of the Cash-Credit by the Bank shall be
No.7 made only in case it is satisfied of the viability of the
Project /proposal.
Rule The borrower shall hypothecate in favour of the bank the
No.8 entire current assets created besides collateral security of the
value of 150% of the Cash Credit Limit sanctioned. Limit
upto Rs.50,000/- may be granted with two good sureties only
 and hypothecation of stock/assets with the Bank.

Rule The borrower shall produce clear marketable title to the

No.9 property to be mortgaged in favour of the bank to the
satisfaction of the bank.
Rule The licensed contractors approaching the Bank for Cash-
No.10 Credit Facility should give a power of Attorney in favour of
the Bank to receive the cheque from Government/ Quassi
Govt. Institutions and to encase the same.
Rule The Bank shall be at liberty to call for additional/collateral
No.11 security/securities at any time.
Rule The legal expenses, fee, registration charges and other
No.12 incidental charges incurred in connection with the financing
shall be borne by the borrower.
Rule At present rate of cash credit traders is 12% and further it
No.13 shall be determined by financing bank from time to time and
debited to loan account. Interest is charged as contract made
with the loanee. Penal interest @ 2% over and above the
normal rate shall be charged in case of default, on the default
amount for the default period.

0.5% concession is allowed to women

Rule The borrower shall maintain the books of account as
No.14 prescribed by the bank. Borrower shall furnish stock
statement as per following periodicity indicating the opening
stock, purchases, sales and closing stock.

Amount of limit upto Rs.1 lac – Quarterly

Above Rs.1 lac – Monthly

Failure to furnish stock statements will attract penal interest

@ 2% p.a. on upstanding amount for period of non-
submission of statements.
Rule The Cash Credit Limit sanctioned should be kept current by
No.15 regular drawls and repayments. In other words, the business
transaction of the unit should be deposited in the Cash Credit
Account.
Rule The Cash Credit Limit shall be sanctioned for a period of one
No.16 year. Renewal of the Cash Credit Limit will be allowed by
the bank at its discretion based on the performance of the unit
and also the operation in the cash credit limit account.
Aggregate credits during the year in the limit account should
be two times of the sanctioned limit or highest availed limit.
Rule The borrower should insure the assets created out of loan and
No.17 the policy should be in the joint name of the borrower and the
bank with agreed bank clause.
Rule The Borrower shall execute all the loan documents prescribed
No.18 by the bank.
Rule Deleted.
No.19
Rule The borrower shall agree to be bound by the provisions
No.20 regarding arbitration in the cooperative Societies Act and
Cooperative Societies Rules.
Rule The Borrower should become the nominal member of the
No.21 bank by paying necessary membership fee as fixed by the
Bank.
Rule Whenever the borrower fails to discharge the loan as agreed
No.22 upon the Bank should take legal action against him to recover
the loan outstanding with interest and cost. The borrower
shall be liable to make good of the expenses and legal
charges that has been incurred by the Bank in this regard.
Rule Processing fee @ 0.25% shall be charged at the time of
No.23 sanctioning of the C.C. limit. These charges of 0.25% shall be
levied every year.
Rule Margin at the rate of 25% shall be maintained on the present
No.24 value of stock.

* Various Agriculture Loan Schemes *

Agriculture loan provided in various forms for various agriculture purposes. The various
types of agriculture loans are as under: -

A) Short term agriculture loan

Purpose: - Financial assistance to meet cultivation expenses for various crops.

Eligibility: - Agriculturists, Tenant farmers and Share Croppers who actually cultivate
the lands are eligible for these loans. All categories of farmers - Small/Marginal (SF/MF)
and others are included. The borrower should be member of co-operative societies

Loan Amount: - Loan amount is worked based on the cost of cultivation incurred for
each crop per acre of crop cultivated and 75 % of the cost of cultivation (Scale of
Finance) is given as loan.
Documents needed to provide:

1. Land records to ascertain cultivation rights.

2. Acreage under different crop.
3. Sources of other borrowings e.g. Co-operative Societies and Banks.

Disbursement of the loan: - As per the cultivation requirements of the crop the loan
amount is disbursed in cash and kind (for fertilizer, pesticides etc)

B) Medium Term Agriculture Loan

Purpose: - To purchase Trali and which are helpful in agriculture

Eligibility: - He has his own land. The borrower should be member of co-operative
societies.

Loan Amount: - 75 % of the cost of product (Scale of Finance) is given as loan.

Nature of Loan: - Cash Credit and Drafts.

Repayment of Loan: - After 6 months.

C) Two Wheeler Loan for Farmers

Financing of Two Wheelers to farmers is considered as direct finance to agriculture. The

acquisition of Two Wheelers by farmers increases their mobility, saves their valuable
time on travel, reduces the cost of traveling, helps in arranging inputs in time and
facilitates access to the markets. Bank has drawn a special scheme for financing of Two
Wheelers to farmers.

The salient features of the scheme are as under –

Eligibility: - Borrower should be an agriculturist and own agricultural land either in his
own name or in the name of his family members. The Age of the borrower should not be
less than 21 years at the time of application and not more than 60 years at the time of
maturity (repayment of loan). The borrower should be member of co-operative societies

Repayment: - The repayment period should not exceed 5 years. The borrower's
repayment capacity is to be considered on the basis of crop grown, income from other
sources and income of spouse

Security: - Hypothecation of vehicle to be purchased with bank loan. In case the

sanctioned loan/limit exceeds Rs.25, 000 security of agricultural land also to be taken.
The value of security including the value of vehicle should be at least double the value of
loan.
Limit: - Cost of two wheeler to be purchased should not exceed Rs.50, 000/-

D) Cash Credit Fertilizers

Purpose: - To provide fertilizer to Farmers for production of crops.

Eligibility: - The Age of the borrower should not be less than 21 years at the time of
application and not more than 60 years at the time of maturity (repayment of loan). The
borrower should be member of co-operative societies.

Nature of Loan: - Cash credit and Cheque.

Extent of Loan: - Need based Maximum Rs.24, 000/- per hector only

Repayment of Loan: - The loan shall be repayable in 3 years depending upon the
activity.

E) Cash Credit Limit to Cooperative Sugar Mills

This is Scheme for Financing Farmers Growing Sugar Cane Crop in Tie up Arrangement
with Sugar Mill Acting as Business Facilitator

Purpose: To provide Crop Loans for cultivation of sugar Cane under tie up arrangement
with Sugar Mills acting as Business Facilitator.

Eligibility: Farmers growing and supplying Sugar Cane .

Nature of Loan: Cash Credit

Extent Of Loan: Need based Maximum Rs.3.00 Lakh

Repayment of Loan: 12/18 months. To be synchronized with harvesting of crop

F) Tractor loan

In order to mechanize farming and improve the output of the farmers,

the Bank has been giving loans for the Purchase of Tractors.

Terms & Conditions: - :

 • The work load with the owner of the tractor should be so that he has to use the
tractor for at least 1000 hrs/year.
• For the Purchase of the Tractor, the beneficiary availing loan should own or
purchase a minimum of 3 Agricultural Implements (including Trailor) to be used
with the Tractor.
• In the purchase of the first Tractor the loanee has to spend 15% of the total cost
of the Tractor (including shares - 10% margin money & 5% shares) & with the
second purchase30% of the total cost is to be spared by the loanee as down
payment out of his own pocket.
• Loan is given only for those Tractors which are Budhni tested and are ISI
approved. The payment of the tractor is given to the Supplier Firm, as third party
payment.
• The tractor should be registered by the Transport Authority.
• The insurance of the tractor is must.
• The repayment period for Tractor Loan is 9 years.

G) Tube well Loan

To bring the Barani unirrigated agricultural lands under irrigation, the bank has been
giving loans for installation of shallow Tubewells to the farmers in the State. For the
purpose of exploitation of underground water, the State has been divided into 138 blocks
which are further earmarked as White, Grey and Dark. Presently, 84 blocks are Dark,
where tubewells to the full capacity have since been installed; 16 blocks are Grey where
there is some more scope for installation of new tubewells; and 38 blocks are White,
where there is greater scope for installing new tubewells. The Bank is a major financier in
the installation of tubewells in the Punjab State. Every 3rd Tubewell running in the field
in the State is installed with the Credit help of this Bank.

Terms & Conditions

• Area should not be Dark, but should be White or Grey for installation of new tube
well.
• Unit cost varies from area to area according to the depth of underground water
and credit is given up to the actual cost of tube well installation.

• Repayment period is 9 years, with Grace period of 1 year.

• Diesel Engine / Electric Motor should be ISI marked.

• Insurance of Tube well is necessary.

H) Soil cultivation and water management

Under this scheme, the loan is provided for the following purposes :

• Land Leveling
• Sand scraping
• Under-ground Pipe-lines
• Reclamation of Alkaline soils
• Reclamation of Shallow Ravine

Details : -

Purpose Units cost (in Rs.)

Sand Scrapping (1 hectare) 14,500
Underground Pipeline (1 ha) 11,250
If water source is within the field 13,400
Alkali Soil Reclamation (1 ha) 9,000
Shallow Ravine Reclamation (1 ha) 10,000

Terms & Conditions: -

• Loan Applications under the above scheme be recommended by the Soil

Conservation Department, Punjab. Applications should be accompanied by the
lay-out plan and estimate cost approved by the Soil Conservation Department.
The loanee should have the proper irrigational facilities with him.
• The loanee is advanced 85% of the total loan.
• The loan is to be returned within 9 yearly equal installments which includes 1
Grace year. Only ISI marked pipes and other material should be used

Resources: - The Bank raises its resources with the collection of share capital
strengthening on its owned funds by taking deposits and borrowings from the NABARD,
Punjab State Co-operative Bank Ltd., Chandigarh or from Punjab Government.

* Dairy Development Loan *

Dairy business has been very successful in Punjab. The bank also has a greater role in the
success of Dairy Farming in Punjab. The bank's schemes have proved very beneficial for
the rural areas of Punjab. Under the Dairy Development Scheme, loans are provided to
Individual/Milk Unions for the establishment of two, three, five and ten milch animals
units as under:

Objectives: -

a. To increase the income of members of Cooperative Milk Societies helping them

to purchase higher yielding cattle.
b. To increase the income and supply of milk to Cooperative Milk Producers
societies.

Minimum Economic Size: - The Central Cooperative Bank through its branches shall
extend loan facility for the purchase of one cow.

Eligibility Criteria: -

I. The applicant should be a member of cooperative milk producer’s society.

II. He should have cattle shed arrangements enough to house the existing animals
and also proposed to be purchased.
III. He should be the supplier of milk to the society during at least past one year.
IV. He should be the cultivating green fodder or should have definite arrangements
for its supply.
V. He should have sufficient experience/knowledge in dairy farming.
VI. He should be the nominal member of the Central Cooperative bank.

Amount of Finance: - The bank shall provide loan for one cow with ceiling of rs.
35000/- or the animal whichever is less.

Margin Money: - The applicant contributes minimum 15% of the total cost of animal as
margin money. However margin for scheduled caste, Backward Class and Economically
backward members shall be 10%.

Rate of Interest: - The bank shall charge interest @ 10.5 % per annum from the member
of the Milk Producer’s Cooperative Societies which will be subject to change as per
prevalent market rates from time to time.

Repayment of Loan: - The loan shall be repay\able in 5 years in equal monthly

installments along with interest.
Securities/documents: - The members shall furnish the following security/document to
the Central Cooperative bank.

a. Time pronote
b. Guarantee by two persons who should be nominal members of the bank and who
should be the owner of at least 2 acre of agriculture land.
c. Hypothecation of milk animal to financed by the bank.
d. He shall sign and get signed tripartite agreement between the borrower the
Cooperative Milk Producer’s society and the bank.

Application Form: - The application form for dairy loan will be submitted by the
member on prescribed from as per annexure ‘a’ through the Cooperative Milk Producer’s
Society.

Appraisal : - The branch Manager of the central Coop. Bank shall visit the farm to
appraisal the technical feasibility and economic viability of the proposal. He shall apprise
project as per Performa annexed as Annexure “B”.

Procedure to be followed: - An eligible person shall apply for the loan prescribed
Performa attached as annexure “A” to the Branch Manager of central cooperative bank
through the Village Milk producer Cooperative society. The President of the milk
producer cooperative society shall place the application before the managing committee
of the society for consideration of the application for its recommendation to the bank. If
the managing committee approves the application then the president shall forward it to
the branch manager of the branch of the central cooperative bank in whose area of
operation the society falls. After the application along with resolution of the society is
received in the branch of the bank the branch manager shall apprise the loan case as the
appraisal from (attached at Annexure “B”). After the appraisal of the loan case the branch
manger will sanction the loan and get the necessary documents executed from the
borrower.

After the execution of documents the manager shall get margin money deposits from the
applicant in his saving bank account. The manager shall disburse the loan through
draft/pay order/cheque in favor of third party from whom the borrower has purchase cow
by debiting the loan account for the amount of loan and saving account for margin
money.
 CHAPTER – V

FINDINGS AND CONCLUSION

Findings of the study

o Patilala Central Cooperative Bank is the district level bank and it has 43
branches in rural and urban areas to serve the all types of customers.
o PCCB is aided by NABARD and Punjab Govt. bear 50% share of the bank
o Most of the branches of PCCB are still non-computerized and employees
are doing their work manually.
o Under PCCB most of the staff is old aged and there is a lack skills of new
blood.
o The main purpose of PCCB is to serving the people in both rural and
urban area.
o The procedure getting a loan is very simple and understood able under
P.C.C.B.
o The service of loan granting is very fast under P.C.C. B. A loan can be
passed into 3 or 4 days.
o The Patiala Central Cooperative Bank also provide some non collateral
loan schemes only on the basis of guarantee like personal loan scheme
which benefited to a normal person.

Conclusion

The repaid changes in the banking sector are creating opportunities and challenges.
Increasing size, Breadth, complexity and geographic scope of banking have increased
challenges of managing, regulating and supervising banks. Also it has become quite
difficult for a bank to a gain a unique market share. Still the bank is old one, and
according to market requirements bank increase and develop its products time to time
like initially bank provide most of the agricultural loan schemes but now it also preferred
to other types of loan schemes which really help to general people. But to meet the
competition of market in proper manner Patiala Central Cooperative Bank Ltd. Need
some more hard work and management should pay more attention.

CHAPTER – VI

RECOMMENDATIONS

Recommendations

1. If the interest rate has been reduced or has become

disfavourable to the customer, the bank should
inform him.
2. The bank should explain clearly all the terms and
conditions of loans that the customer wants to avail
in the local language and nothing should be
concealed.
3. The bank should act as per the standing instructions
of the customers, and thus avoid inconvenience.
4. The bank should keep the information of the
Account’s of the customer confidential.
5. The sanction of rejection of the loan applied by the
customer should be conveyed in writing.
6. The loan documents should be filled in the presence
of the customer.
7. There should be complaint boxes installed in the
bank that are opened weekly and proper redressal of
complaints is done.
8. All the counter staff should be thoroughly trained
with all the schemes/rules and regulations of the
bank, so that the customer gets one window service.
9. PCCB should open new branches in the Rural and
Urban Areas to achieve the targets.
10. Since 1980 no recruitment made in this Bank. Staff
should be recruited for smooth working.
11. Branches should be computerized.
12. Rate of interest should be reviewed periodically.
13. 11 Single men Branches are functioning so, there is
a great operation risk in the Bank and management
should pay attention about it.
14. In today’s world most of the banks provides ATM
facility . So to meet competition in the market
PCCB should also provide the ATM facility.
 BIBLIOGRAPHY

Bibliography

I) Documents and Circulars

1. Previous years’ Reports are analyzed.

2. Documents and Circular

II) List of Websites

1. http://www.nios.ac.in/Secbuscour/15.pdf
2. http://finance.indiamart.com/investment_in_india/banking_in_india.html
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SFSNO=356&SFESNO=19
6. http://www.banknetindia.com/banking/ucb.htm
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8. http://pbcooperatives.gov.in/PSCB.htm
9. http://www.ecommercejournal.com/news/punjab_state_co_operative_bank_enhan
ce_its_efficiency_by_means_of_flexcube
10. http://www.punjabcooperation.gov.in/html/pscb_history1.html
11. http://www.scribd.com/doc/17319280/CoOperative-Bank-Mgt
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184411.html
14. http://digilib.petra.ac.id/viewer.php?
page=1&submit.x=0&submit.y=0&qual=high&fname=/jiunkpe/s1/hotl/2008/jiun
kpe-ns-s1-2008-33403003-9666-food_lucky-chapter4.pdf
15. http://www.allbusiness.com/management/125039-1.html
16. http://en.wikipedia.org/wiki/Procedure_(term)