OBJECTIVES

• To study the loans and advances given by bank.

• To study detail procedure of lending regarding different forms of financing
of cooperative banks.
• To know the satisfaction level of the customers regarding the non agriculture
loans

1
 INDUSTRY
INTRODUCTION

2
INDUSTRY INTRODUCTION

The financial sector is in the process of rapid transformation. Reforms are

continuing as part of the overall structural reforms aimed at improving the
productivity and efficiency of the economy. The role of an integrated financial
infrastructure is to stimulate and sustain economic stability. The US$28 billion
Indian financial sector has grown at around 15% and has display stability for the
last several years, even when other markets in the Asian region were facing crises.
The stability was ensured through the resilience that has been built the system over
time. The financial sector has kept pace with growing needs of cooperate and other
borrowers. Banks, capital markets participants and insurers have developed a wide
range of products and services to suit varied customer requirements. The Reserve
bank of India has successfully introduced a regime where interest rates are more in
line with market forces. Financial institutions have combated the reduction in
interest rates and pressure on their margins by constantly innovating and targeting
attractive consumer segments. Bank and trade financiers have also played an
important role in promoting foreign of the country.

WHAT IS BANK?

To a layman, a bank is one that accepts deposits from public and lends money. Few
DEFINATIONS of bank are discussed below:-
THE CONCISE OXFORD DICTIONARY

• “Bank collects money from those who have it to spare or who are saving it
out of their income, and
• It lends this money to those who require it.”

This definition brings out the two important functions of a banker namely,
acceptance of deposits and lending.

3
Chart I
FUNCTIONS OF BANK

FUNCTIONS OF
THE BANK

PRINCIPAL ANCILLARY

ISSUE OF PAY
ACCEPTING GRANTING SAFE DEPOSITS ISSUE OF
ORDER/DEMAND
DEPOSITS ADNAVCES LOCKERS GURANTEES
DRAFT

The Indian banking system has large geographic and functional coverage. Presently
the total asset size of the Indian banking sector is US$ 270 billion while the total
deposits amount to US$220 billion with a branch network exceeding 66,000
branches across the country. Revenue of the banking sector has grown at 6 percent
CAGR over the past few years to reach a size of US$15 billion. While commercial
banks cater to short and medium term financing requirement, national level and
state level financial institutions meet the requirement. This distinction is getting
blurred with commercial banks extending project finance. The total disbursements
of the financial institution in 2001 were US$14 billion. Banking today has
transformed into a technology intensive and customer friendly model with a focus
on convenience. The sector is set to witness the emergence of financial supermarket
in the form of universal banks providing a suite of services from retail to corporate
banking and industrial lending to investment banking.

4
EXECUTIVE SUMMARY

The government of India started the cooperative movement of India in 1904 with
the purpose of freeing the farmers from the grip of moneylenders. Then the
government therefore decided to develop the cooperatives as the institutional agency
to tackle the problem of usury and rural indebtness, which has become a curse for
population. In such a situation An Apex bank at state level operates as a balancing
center for the resource of cooperative movement in the whole of the state.

There are at present 28 State cooperative banks which are performing multipurpose
functions of financial, administrative, supervisory and development in nature of
expansion and development of cooperative credit system. In brief, the SCBs
Have to act as a friend, philosopher and guide to entire cooperative structure.

THE PUNJAB COOPERATIVE BANK being one of the successful banks among
the 28 SCBs. The study of non-agricultural loans of the bank along with the
satisfaction provided to the satisfaction provided to the customers in herewith
undertaken.

The Punjab state cooperative bank ltd. Chandigarh was established on 31 st August
1949, at Shimla vide registration no. 720 as a principle Financing Institute of the
cooperative movement in the state.

The Head Office of the bank is in 34 sector, Chandigarh. This bank has 19 branches
and 3 extension counters in the Chandigarh. The branch of the bank is known as
Central Cooperative Bank.
In this project The Non-Agricultural loans are discussed. The bank has provision
FOR 13 KINDS OF NON-AGRICULTURAL LOANS among which bank provides
only 5 types of loans namely.
• Personal Loan
• Consumer Loan

5
 • Education Loan
• Vehicle Loan
• House building loan

The customer has taken more than one type of loan from institute .They are
satisfied with the services of the bank but suggested that the formalities should be
reduced. Moreover they suggested that the bank should adopt the latest technology
of the banking like ATMs, internet / online banking, credit cards etc. so as to bring
the bank at par with the private sector banks.

6
 REVIEW OF LITERATURE

RECENT HISTORY OF BANKING

Indian banking system, over the years has gone through various phases after
establishment of Reserve Bank of India in 1935 during the British Rule to function
as central bank of the country. Earlier to the creation of RBI, the imperial Bank of
India was looking after the central bank functions. In 1954, the all Indian Rural
Credit Survey Committee submitted its report recommending creation of a strong,
integrated, State partnered commercial banking institution with effective machinery
of branches spread all over the country. The recommendation of this committee led
to the establishment of first Public Sector Bank in the name of State Bank of India
on July 1, 1955 by acquiring the substantial part of share capital by RBI of princely
states, associate banks came into fold of public sector banking.

IN the post nationalized period, there was substantial increase in the number of
branches opened in rural semi-urban centers bringing down the population per
bank branch to 12000 approx. During 1976, RBIs were established (on
recommendation of M. Narasimham Committee) under the sponsorship and
support of public sector bank as the 3rd component multi agency credit system for
the agricultural and rural development. The Service Area Approach was introduced
during 1989. While the 1970s and 1980s saw the high growth rate of branch banking
network, the consolidation phase started in late 80s and more particularly during
early 90s with the submission of report by Narasimham Committee on reforms in
Financial Services Sector during 1991.

7
In these five decades since independence, banking in India has evolved through four
distinct phases namely.

Phases of Banking

Foundation Phase Expansion Phase Consolidation Phase Reforms Phase

8
 COOPERATIVE BANK

The cooperative bank has history of almost 100 years. The cooperative banks are an
important constituent of the Indian Financial System, judging by the role assigned
to them, the expectations they are supposed to fulfill their number and the number
of offices they operates. The co-operative movement originated in the West, but the
importance that such banks have assumed in India is rarely paralleled anywhere
else in the world. Their role in rural financing continues to be important even today,
and their business in the urban areas has increased phenomenally in the recent
years mainly due to the sharp increase in the number of primary co-operative
banks. While the co-operative banks in rural areas mainly finance agricultural base
activities including farming, cattle , milk, hatchery , personal finance etc. along with
some small scale industries and self-employment driven activities, the co-operative
banks are quite forward looking and have developed sufficient core competencies to
challenge state and private sector banks. According to NAICUB, the total deposits
and lending of Co-operative banks are much more than old private sector banks
& also the new private sector banks. This exponential growth of Co-operative banks
is attributed mainly to their much better local reach personal interaction with
customers, and their ability to catch the nerve of the local clientele.

Though registered under the Co-operative societies act of the Respective State
(where formed originally) the banking related activities of the cooperative banks are
also regulated by the Reserve Bank of India. They are governed by the Banking
Regulation Act 1949 and banking laws Act 1965 the cooperative banks are small
sized units organized in the cooperative sector, which operate both in urban and
non urban center. They finance small borrowers in industrial and trade sector
besides professional and salary classes. Regulated by the RBI, they are governed by
the banking laws (Cooperative Societies) act 1965 the cooperative banking structure
in India is divided into 4 components:
a) Primary cooperative credit society
b) Central cooperative banks

9
c) State cooperative banks
d) Landing development banks

STATE COOPERATIVE BANKS (SCBs)

These are the apex institutions in the 3 tier cooperative structure at the state level.
The SCB is a federation of central cooperative bank and act as watchdog of
cooperative banking structure in the state. Its funds are obtained from share
capital, deposits, loan and overdrafts from the RBI. The SCBs lend money to Cbs
and primary societies and not directly to farmers.

CENTRAL COOPERATIVE BANKS (CCBs)

These are the federation of primary credit societies in a district. They are of 2 types:

• There can be cooperative banking unions whose membership is open only to

cooperative societies.
• There can be mixed CCBs whose membership is open to both individuals and
cooperatives societies. The funds of the bank consist of share capital,
deposits, loans and overdrafts from SCBs. The bank provides loans to
primary credit societies within the limit of the borrowing capacity of
societies. However, some loans are also given to individuals and others.

PRIMARY COOPERATIVE CREDIT SOCIETY

It is a village institution , which directly deals with the rural people .It encourages
savings among the agriculturalists , accept deposits from them, gives loan to the
needy borrowers and collects repayments. The funds of the society are derived from
the share capital, deposits of members and loan from CCBs. The borrowing powers
of the members as well as of the society are fixed.

10
 COMPANY
INTRODUCTION

11
INTRODUCTION

The Punjab State Cooperative Bank was established at Shimla on 31st august in the
year 1949 as an Apex bank of three- tier short term Cooperative Credit Structure
with registration number 720 as a principal financing institute of the cooperative
movement. It has 3 divisional offices at Amritsar, Bathinda 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. The matchless contribution made by this
premiere cooperative institution of the state not only in promoting direct
employment to people but also helps in raising the economics standard of the
beneficiaries. There is no area of life where this premiere institution has not played
its part. From a farmer, trader man to big industrialist, everybody has been covered
in the fold of this institution. The green, white and sweet revolutions in the state of
Punjab are some of the major achievement in which this institute has played a vital
role. It was the timely adequate and easily accessible financial assistance to the rural
peasantry in agriculture and allied activities such as diary, poultry, sugarcane etc
that has been instrumental in making their activities most successful.

12
 Chart III

MANAGEMENT

MANAGING
DIRECTOR

AMD (Admn.) AMD (Banking)

G.M. G.M. G.M.

D.R. (VIG.) Estt. Office
(O&A) (I&F) (Div. Offices)

L.O. A.C.F.A DGM(O&D) DGM (I&F) AGMs

AGMs AGMs Sr. Manager

Sr. Manager Sr. Manager Manager

Manager Manager

13
ACTIVITIES

1. NON-FARM SECTOR

To diversify the loaning portfolio of cooperative banks in Punjab a beginning was

made during the year 1992-93. All the CCBs were allowed to provide the composite
loans up to 62500 and integrated loan of Rs. 10 lacs to group of individual for any
activity covered by floor mill, saw mill, consumer electrical and electronic
appliances and repair/ service units, engineering, furniture making, sport goods,
hosiery garments units etc.

2. AGRICULTURAL & DEVELOPMENT STABILIZATION FUND

It has been created to meet the requirements of banks share for conversion of short
term agricultural loans into medium term agricultural loans in the event of damage
caused to crops due to natural calamities i.e. heavy rains, floods, hail storm, drought
and attack of insects/ pests etc. The facility of conversion is allowed only in such
cases where the damage to crops is 50% or above. The fund is built up from
different sources as indicated below:

a) From appropriation of profit

b) By providing interest on opening balance of fund @3%
c) By creating balance of dividend on govt. shares.
d) By securing loan from Central govt. under plan scheme for strengthening
this fund.

3. EMPLOYEES WELFARE FUND

Its has been created for providing financial assistance to the dependents of the
employees in case of death, disability and other eventualities during the service.

14
4. PACS AND CCBS DEVELOPMENT FUND

The object of this fund is to regulate grant of assistance out of the fund to the PACS
& CCBS for improving their financial position by taking up to the development
activities. PACS & CCBS development fund is being utilized for the following
purposes:-
a. To give incentive for good recovery performance etc.
b. To contribute to the deficit in the recovery of blocked over dues of border
district central cooperative banks under packing scheme.
c. To pay difference of interest on account of more Agricultural advances to
the needy CCBS against PACs against its members etc.
d. The fund may be utilized for any other purpose which may be adopted by
the board of directors of the bank.

SOURCES OF FUNDS

1. OWN FUNDS:

The position of owned funds during the last 5 years is as under:-

Table I
(Rs. In crore)
YEAR OWN FUNDS
2006 352.81
2007 365.59
2008 377.42
2009 388.15

2.DEPOSITS

15
Deposits are also the main source of funds available for credit to the member of
CCBS and further to the PACS and Their members. The detail of deposits for the
last 5 years is as under:-

Table II
(Rs. In cr.)
YEAR ORIGINAL ACTUAL
VALUES GROWTH RATE
2004-2005 5363.48
2005-2006 5929.05 0.105
2006-2007 6492.90 0.095
2007-2008 7343.49 0.131
2008-2009 8669.93 0.180

3. BORROWINGS FROM NABARD:

The Punjab state Cooperative bank is borrowing from the NABARD for Seasonal
Agricultural Operations and for Farm Sector on behalf of DCCBS. During the last 5
years the following amounts have been borrowed from NABARD.
Table III
YEAR ORIGINAL ACTUAL
VALUES GROWTH RATE
2004-2005 1201.02
2005-2006 1543.37 .285
2006-2007 2193.37 .4211
2007-2008 2907.05 .325
2008-2009 3901.61 .352

4. INVESTMENT OF FUNDS
The detail of investment during the last 5 years is as under:-
Table IV
(RS. IN CRORES)
YEAR ORIGINAL ACTUAL
VALUES GROWTH

16
 RATE

2004-2005 2183.48
2005-2006 2412.63 0.105
2006-2007 3023.50 0.253
2007-2008 3087.40 0.021
2008-2009 5085.79 0.647

INVESTMENT OF FUNDS

1. STATUTORY REQUIREMENTS

25% of the Time and demand liabilities are invested in the shape of SLR in Govt.
Securities by the Bank while the Central Cooperative Banks can keep this with the
Punjab Liabilities is being kept as Cash Reserve ration under the R.B.I. Act in the
shape of current account with RBI act in the shape of current account with RBI.
Remaining is being invested in the loan portfolios.

2. LOANS & ADVANCES

i. SHORT TERM AGRICULTURAL ADVANCES: The bank is advancing sort

term agriculture loan (crop loan) to the farmer through PACS. These loans are
advanced in the shape of cash and Kind Component. Fertilizers and pesticides are
provided to the farmers by PACS as kind Component. Comparative position of last

5 years advances is as under:-

(Rs. In crores)
YEAR TARGET ADVANCEMENT ACTUAL
(original value) GROWTH
RATE
2005-2006 4544.00 4128.56
2006-2007 5907.00 4801.63 0.105
2007-2008 6000.00 5828.28 0.253

17
 2008-2009 6740.00 5894.29 0.021
2009-2010 6800.00 2265.90 0.647

NABARD is not providing adequate refinance to the cooperative banks enabling

them to provide timely & adequate credit to the farmers.

RATE OF INTEREST ON RE_FINANCE BY NABARD:

As per direction of government of India /NABARD, we have fixed the rate of

interest on short – term agriculture loans at 7.0% w.e.f 1.4.2006 but the rate of
interest on refinance has been enhanced from 2.5% (2006-07) to 3.0% (2007-08) and
from 3.0% to 3.50% for the year 2008-09. It as stated that during the year 2006-07
the interest margin of 1.75% was available to DCCBs. With the increase of rate of
interest on refinance from 2.50% to 3.50% this margin has been reduced to 0.75%
the detail of which is as under:-
YEAR RATE OF INTEREST RATE OF RATE MARGIN
CHARGED BY NANARD INTEREST INTEREST AVAILABLE
FROM PSCB CHARGED BY CHARGED BY TO DCCBS
PSCB FROM DCCBs FROM
DCCBs PACS
2006-2007 2.50 2.75 4.50 1.75
2007-2008 3.00 3.25 4.50 1.25
2008-2009 3.50 3.75 4.50 0.75

To enable the cooperative banks to provide agriculture credit @7 % to the farmers

and to save them from incurring loses on account of lower interest margin,
NABARD should provide refinance @ 2.50% and this rate of interest on refinance
should remain constant.

ii. SHORT TERM AGRICULTURAL RECOVERY (DCCBs):- The recovery is

being affected through persuasive methods. No coercive action is being taken. The
annual recovery at S.T. Agri. Loan for 5 years is appended below
2004 2005 2006 2007 2008

18
91.22% 91.80% 92.33% 92.33% 82.16% *
(Low recovery
due to Debt
waiver/ Debt
relief scheme
2008)

iv. REVOLVING CASH CREDITS: - A unique scheme was evolved to bring the
farmers from uninstitutional credit to the cooperative credit structure. Under this
scheme, the cooperative banks are providing Rs.1.00 lacs per acre subject to the
maximum of Rs.6.00 lacs to the farmers for fulfilling their socio- economic liabilities
without falling pray to the clutches of private/ non- institutional money lenders.
Rate of interest is 11.0%.

The Central Cooperative banks have sanctioned credit limits under the scheme
as detailed below:-

Table VI
(AMOUNT IN CRORES)
YEAR LIMITS ACTUAL
SANCTIONED(original GROWTH
value) RATE
2004-2005 1071.15
2005-2006 1276.61 0.191
2006-2007 1527.00 0.196

19
2007-2008 1919.55 0.257
2008-2009 2091.75 0.089

v. NON FARM SECTOR LOANS: - another most important feature of the

cooperative banks in the state is that they started advances for anon Farm Sector
during the year 1993. The rate of interest charged under these loans is 13.25% -
13.75%. Year- wise advancement of loans is detailed below:-

Table YEAR AMOUNT ACTUAL

ADVANCED GROWTH RATE
VII
(original values)
2004-2005 66.86
2005-2006 59.95 -0.1033
2006-2007 56.48 -0.058
2007-2008 49.50 -0.123
2008-2009 47.72 -0.035
(AMOUNT IN CRORES)

Vi. LOANS FOR CONSUMER DURABLES: - Loans for consumer durables, such
as for purchase of T.V., Fridge, A.C. and other household items etc. are disbursed
by the cooperative banks. Rate of interest is 14.0%. Year- wise advancement is
detailed below:-
Table VIII
(AMOUNT IN CRORES)
YE AMOUNT ACTUAL GROWTH
AR DISBURSED (original RATE
values)
2004-2005 104.54
2005-2006 100.79 -0.036
2006-2007 80.70 -0.199

20
 2007-2008 79.71 -0.0123
2008-2009 71.50 -0.10299

Vii. CASH CREDIT TO BUSINESSMEN AND TRADES: - Under this scheme, a

cash credit limit is sanctioned up to Rs. 25.00 lacs to small businessmen and traders
depending upon their business turnover on easy terms. The rate of interest is 14.0%.
The limits sanctioned to businessman and traders are as detailed below:-

Table IX AMOUNT IN CR.

YEAR CASH CREDIT LIMIT ACTUAL
SANCTIONED (original GROWTH
value) RATE
2004-2005 198.26
2005-2006 227.78 0.149
2006-2007 245.72 0.079
2007-2008 280.40 0.141
2008-2009 306.49 0.930

vii. TWO WHEELER LOAN TO FARMERS: - This scheme of NABARD was

introduced in February, 2002. The farmers are advanced up to 75% of two wheeler
cost or Rs. 50,000/- whichever is less from the Cooperative banks in the state of
Punjab. The rate of interest is 12075%. Year- wise advancement is as under:-
Table X AMOUNT IN CRORES
YEAR AMOUNT ADVANCED ACTUAL
( original values) GROWTH RATE
2004-2005 46.73
2005-2006 47.44 0.0151
2006-2007 43.33 0.087
2007-2008 39.62 -0.856
2008-2009 34.42 -0.131

vii. HOUSING LOAN SCHEME: - These loans are provided by Central

Cooperative Banks for construction of new houses, repair/ extension and renovation
of existing house. The maximum limit of these loans is Rs. 25.00 lacs in urban areas

21
and Rs.15.00 in Rural Areas. The rate of interest on urban housing loan is 11.50%.
Whereas for rural housing loan scheme it is 11.0%

A year-wise detail of advancement is given as under:

Table XI AMOUNT IN CRORES

YEAR AMOUNT ADVANCED ACTUAL GROWTH
(original values) RATE
2004-2005 63.77
2005-2006 64.99 0.0191
2006-2007 94.64 0.456
2007-2008 101.33 0.071
2008-2009 90.66 -0.105
Viii. VEHICLE LOAN SCHEME: - Under vehicle loan scheme, loan is available for
new vehicles like car, mini bus, lorry, etc. Loan upto 80% of the value of the vehicle
or Rs. 10.00 lacs whichever is less is advanced under this scheme. Rate of interest is
13.0.13.50%.

Year-wise details disbursement by distt. A central cooperative bank is given below:-

Table XII AMOUNT IN CRORES
YEAR AMOUNT DISBURSED ACTUAL
(original values) GROWTH
RATE
2004-2005 22.60
2005-2006 25.91 0.146
2006-2007 39.16 0.511
2007-2008 61.82 0.579
2008-2009 84.08 0.360

ix. PERSONAL LOAN SCHEME:- This scheme was introduced in December, 2002.
This loan is advanced to salaried employees up to Rs. 2.00. Rate of interest is
14.0%.Year- wise advancement is given below:-

Table XIII AMOUNT IN CRORES

22
Year AMOUNT DISBURSED
(original values)
2004-2005 66.38
2005-2006 84.66
2006-2007 103.22
2007-2008 133.78
2008-2009 133.89

x. PROFIT:- During the years 2002-03 to 2005-06, all Cooperative Banks ere in
profit. However, during 2006-07 three CCBs were in losses, namely, Amritsar,
Faridkot & Ferozpur. Similarly during 2007-08 also banks were in loses i.e.
Amritsar, Faridkot & Gurdaspur. The figures of profit for the last 5 years are given
below:-

Table XIV

YEAR APEX BANK CCBs TOTAL

2004-2005 29.58 104.63 134.21
2005-2006 26.24 74.84 101.08
2006-2007 23.79 24.55 48.34
2007-2008 10.34 18.73 29.07
2008-2009 11.74 36.62 48.36

23
 RESEARCH
METHODOLOGY

24
RESEARCH METHODOLOGY:-

MEANING:- “Research comprises, defining and re-defining, formulating

hypothesis or suggested, collecting, organizing, evaluating data, making deduction
and reaching conclusion and at last carefully testing to conclusions to determine
whether they fit the formulating hypothesis.”
“CUFFORD WOODY”

RESEARCH INSTRUMENTS

On the basis of this study, a questionnaire was designed. The basic pattern of the
questionnaire is enclosed in the appendix.
Closed ended questions and open ended questions have been used.
Questions have been kept objective using simple words.

DATA SOURCE

The data source used by me consists of both primary as well as secondary data.

PRIMARY DATA: Primary data are collected on the basis of interviews conducted
by me during the training period from experts in the field of loan management staff
at The Punjab State Cooperative Bank.
SECONDARY DATA: The secondary source of information was obtained from the
annual reports of the banks, manual of instruction on loans brouchers as well.

DATA COLLECTION METHOD

Questionnaires were filled with personal interviews being taken by me.

SAMPLING

25
SAMPLING UNIT: The population in question was the customers of the bank as
well as the other people not having their account in this bank.

SAMPLING SIZE: After the through scrutiny of the filled questionnaire. I was left
with the sample size of 50 responses. The scrutiny was based upon the conditions of
completeness, adequacy and correctness of information.

SAMPLING PROCEDURE

Convenience sampling was done for the questionnaire to be filled within the bank as
it was affected by the time availability of the customers.

TOOLS AND TECHNIQUES

The statistical tools used are graph, tables, pie chart.

LIMITATIONS:
1. The study is based on the data of past three or four years only.
2. The data for study covers only a single bank
3. As majority of the customers are employees of the bank, they might
be biased in giving the information
4. The time period of the research was limited to 2 months.

26
 NON-FARMING
SECTOR
OF BANKING

INTRODUCTION TO NON-AGRICULTURE FIELD OF PSCB:

During the early phase Punjab State Cooperative Bank deals in agriculture loan
only but to diversify its loaning portfolio the Punjab State Cooperative Bank
entered in the field of Non Agriculture advances During the year 1992- 93.
Initially four Central Cooperative Banks namely Jalandhar, Nawanshahr,
Kapurthala and Ludhiana were permitted by the Registrar Cooperative Societies.
Punjab to undertake financing of Non Agricultural activities up to Rs. 50,000/- in a

27
single case (composite loan). Later on all the Central Cooperative Banks were
allowed to composite loan(block capital and working capital up to Rs. 62500/- and
integrated loan to individual artisans, groups of any activity covered by the 22
board group of cottage and small scale industries notified by NABARD inclusive of
the processing activities bakery units, flour mills, chakki unit, consumer electrical,
etc.
Under the loaning portfolios, various Non Agricultural Schemes were introduced by
the Punjab State Cooperative Bank and these are as following:-

1. revolving cash credit to farmers

2. two wheeler loans to farmers
3. rural godown scheme
4. personal loan scheme
5. cash credit to businessmen and traders
6. shekari bank bima yogna
7. second hand car loan
8. kisan credit card scheme.
9. small road transport operation shekari education loan facility consumer
durable loan:
a. to salary earners
b. to non salary earners
10. non farm sector loan
11. loan against national saving certificate

Mainly Punjab State Cooperative Bank finances its entire scheme by their own, but
a few schemes they have an authority to take 100% refinance from NABARD. These
schemes are:
1. revolving cash credit
2. non farm sector loan
3. two wheeler loan

28
TOPIC UNDERTAKEN FOR THIS STUDY

During the training period, I concentrated only on five kinds of loans, which are
pervaded by the Punjab state cooperative bank, Chandigarh. The reason being that
the branch has provisions for only these five finds of loans, thus is providing these
non agricultural loans only. A detailed study of the procedure for applying to these
loans, documents, required and other formalities relate to these loans were studied.
These loans are stated as under:

 House Building Loan

 Personal Loan
 Consumer Loan
 Two Wheeler loan
 Education Loan

To apply for a loan, the consumer has to first of all give an application to the
registrar applying for the loan. Then is checked whether the customer has taken a
loan before and if yea. Whether it is repaid or not. After the eligibility of the
customer is checked. In the process, it is seen that whether the customer is able to
repay the monthly installments. It is checked with the help of the salary slip of the
customer, which is prepared by the Account department of the office. After making
all deduction, it is seen that whether the amount left is sufficient enough to pay the
EMIs of the loan. If all the formalities are meeting, the file is moved to the Registrar
for further notification and sanctioning of the loan. After the loan is sanctioned, a
person from the bank is sent to verify that, whether the loan has been used for the
stated purpose.
The details procedure of each loan is discussed as follows:-
1. HOUSE BUILDING LOAN

The house building loan is provided by the bank under two heads, one is provided
only to the staff and the other is provided under NFS (non farm sector). In case of
29
former one, the concept of mortgaging is being introduced. In both the forms the
EMI calculation and rate of interest differs. All the other formalities required are
same in both the cases except that in case of loan being provided to staff, the
mortgaging agreement is required.
(a). Loan provided to staff

In this case the maximum limit is 15 lacs. The rate of interest is fixed as per the
amount of loan applied. It is stated below:-
Upto Rs.50,000/- - 6.5%
Upto Rs. 1.5 lacs – 8%
Upto Rs 5 lacs – 10%
Upto rs. 10 lacs – 11%

The repayment capacities i.e. the EMIs are fixed based on the purpose for which the
loan is taken. These are:

Construction loan – 180 installments

Additional Loan- 150 installments
Repair- 100 installments
Purchase of the plot- 120 installments
The mortgagee in the presence of two witnesses signs the mortgage deed. The
mortgage deed contains the terms and conditions which the mortgagee has to fulfill
in case the situation arises.
DOCUMENTS REQUIRED

The documents, which are required to be attached while applying for the loan, are
stated as under:

1. Salary slips of borrower and credit worthiness of guarantors.

2. Registrar deed/ Agreement to sell/ sale deed of house.
3. Report by Establishment and Vigilance section.

30
 4. Estimate of construction/renovation cost by architect.
5. Certificate to effect that the carry home salary of applicant is 40% and
salary slip of last six months are checked. A installments (inclusive of
interest) has been fixed taking into consideration the length of service
remaining.

POST SANCTION

The customer has to ensure proper executive of the following documents:

1. Agreement with the bank

2. Surety bond
3. Insurance of house after the release of fourth/ last installment.
4. Other legal documents mentioned in sanction order.

(b) LOAN PROVIDED UNDER NFS(NON FARM SECTOR)

SHORT TITLE, EXTENT AND COMMENCEMENT:

This scheme may be called house loan scheme to individual and members of group
housing societies by the Punjab State Cooperative Bank Limited in Union Territory
of Chandigarh.
The scheme shall be implemented by the branches of the Punjab State Cooperative
Bank Limited and shall available for employees of Punjab Government and

31
Chandigarh administration for the property situated in the Union Territory of
Chandigarh and its periphery area as notified.
It shall come into force from the date as the Registrar Coop. Societies. Punjab
Chandigarh decides.

DEFINATION

• In this scheme unless the context otherwise requires.

• Act means the Punjab Cooperative Societies Act 1961 as amended from time
to time.
• Bye Laws means the registered by law of the state.
• Bank means State Cooperative Bank registered under the act.
• Committee means the governing body of the cooperative bank by whatever
name called to wish the management of the affairs of the bank is entrusted.
• Government means Government of Punjab.
• Nominal member means a person admitted to membership of the bank under
Act rules and byelaws.
• Officers means the President, Vice President, Chairman, Manager,
Liquidator and administrator includes any other person empowered under
the rules or byelaws to give direction in regard to the business of the bank.
• Registered means a person appointed to perform the function of the registrar
of cooperative societies under the act.

PURPOSE

Loan shall be advanced for the purchase, construction of the house and also for
improvement of the existing house by way of repair, addition/ alteration etc Loan
shall also be given for acquiring a flat in an existing or proposed cooperative society
and approved scheme of Chandigarh Housing board and other colonies approved
by respective authorities in the periphery area loan swapping with other loan.

32
ELIGIBILITY

An individual residing in or having a plot in the area of operation the bank may
apply for the loan in his individual name or along with other person with joint
owner of the land property as co-applicant, is any will be enrolled as nominal
member of the bank under the act, Rules, and Byelaws.
The employees of the Punjab State Cooperative Bank who had already availed the
house loan under Govt. or Bank Scheme From the Punjab Cooperative bank also
get loan under the scheme subject to maximum of Rs. 10 lacs. It will be further
subject to the repaying capacity of the employees in accordance with their last
salary statement. This loan will be against second charge on the said property for
extension and for takeover of loan (loan swapping) of the bank.

QUANTUM OF LOAN:

The quantum of loan will depend upon the repayment capacity of the applicant to
use calculated by the bank as under:
100 times of basic pay- Basic pay of the wife is to be added.
Subject to maximum 85% of the value of the house/ property with the maximum of
Rs. 10 lacs depending upon the project cost and repaying capacity of the borrowers
out of the above Rs. 5 lacs can be allowed for purchase of plot.

MARGIN MONEY

40% in case of purchase of plot/ land

15% for construction / repair/ purchase of house/ flat etc.
(Acquisition cost of plot including stamp duty/ registration charges if any are also
considered to wards margin)

33
INTEREST

The interest on house building loan shall be charged @11.0% P.A. on loans up to
Rs. 2 lacs and 11.50% on loans above Rs. 2 lacs or as prescribed by the bank from
time to time with compounding interest quarterly or equivalent rate as monthly
installment. In case of default a penal rate @ 1% P.A. over and above the normal
rate on the default amount period shall also be charged.

PERIOD OF LOAN PAYMENT OF LOAN

Maximum period shall be fifteen years or attaining the retirement age of 1st
applicant.
Repayment of loan shall however be in monthly equal installment to be started from
month after final installment of loan disbursed. EMI for the related month shall be
deposited by the following month.

SECURITY

Security for the loan is a first mortgage of the property to be financed normally by
the way of deposit of the deeds. The valuation of the property will be based on last
reserve price of the auctioned fixed by the Chandigarh Administration. For the
properties situated outside the Chandigarh in its periphery areas will be the official
rated of registration fixed for the same by respective municipal or local authority
immediately proceeding six months. The value of the loan shall not exceed 80% of
the value of the security.
Suitable one guarantee acceptable to the bank. The guarantor shall be preferably
from the same office/ department. They will be from the Govt. department/ Boards/
Corporation to the satisfaction of the bank. Post dated cheques for the month for
which the repayment of loan is due.

34
DISBURSAL OF LOAN

The loan will 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 the property bank loan)
Loan will be disbursed at one go for purchase of a built house. However for
contribution disbursement shall be in 2 installments:
1st installment for construction up to roof level = 50%
2nd installment for construction of building after roof level.
In case of addition/ alteration, renewal and repairs it will be disbursed only after
ensuring the utilization of previous installments to the bank shall not be bound to
accept progress of construction as assessed by builders.

DOCUMENTATION:

Identify proof, Resident proof, self attested recent passport size photograph of the
applicant and co-applicant (two), copy of income tax return for 3 years duly
acknowledged by ITO. Sources of finance for own contribution
• Loan applicant form
• Loan agreement
• Mortgage deed
• Bob encumbrance certificate
• Letter of lien and set off

INSURANCE

Comprehension 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 at liberty to get the policy renewed by debt to house loan
account of the borrower. Further accident insurance cover up to the loan amount
will be taken at the cost of the borrower.

35
EMPLOYED APPLICANTS

• Latest salary slip/ certificate giving details of break up of salary deduction.

• Verification of employment from the employer.
• An undertaking that if loan on due date the same will be recovered from
retrial benefits.

ADDITIONAL DOCUMENT IN CONSTRUCTION CASES

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

• In case of allotment of flat/ house, photocopy of allotment letter and details of
reliance payment, if any.

PERIOD OF LOAN

• 10 years in case of purchase or construction of the house.

• 7 years in case of repair, renovation, additional or alteration of existing
house.

DISPUTES

If at any stage disputes arise it will be settled under the Punjab Cooperative
Societies Act 1961.
ADVANCEMENTS

The bank has advanced 90.66cr,IN the year 2008-2009 and 101.33 in the year 2007-
08.

36
 2

90.66

2.PERSONAL LOAN

Personal loan scheme has been framed which aims at providing credit facility for
meeting out Socio Economics needs of employees such as Child Education,
Furnishing your home, buying a computer, marriage of son/ Daughter, holiday tour
with your family or any other basic requirement without giving any purpose of loan.
This scheme was introduced in 2001.

37

101.33
All salaried employees of Punjab Government Chief Auditors Cooperative
department, Punjab State cooperative banks and Chandigarh Administration its
board, Cooperation except staff on deputation with Chandigarh administration
boards and corporations.

AGE MAIN FEATURE OF THIS SCHEME IS:

ELIGIBILITY CRETERIA CLASS

Minimum 21 years and maximum 57 years.

SERVICE TENURE

One year after confirmation/ regularization.

RATE OF INTERSET

14% P.A. on reducing balance with half yearly/ six month rates subject to change
from time 2 times by bank.

LOAN LIMIT

10 months Gross Salary or Rs. 2 lacs (whichever is less)

SECURITY

No collateral security is required, only two guarantors, employees of the same

institution as of the borrower.

38
PAYMENT ON LOAN

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

OPTION TO REPAY LOAN

Loaner will have the option to prepay the loan at one time during the tenure of loan
in lump sum. A prepayment fee of 1% will be payable on the outstanding loan
amount. No part- prepayment is allowed

GENERAL
No employee will be given this loan facility who has defaulted of loan in any other
scheme.
DOCUMENT REQUIRED
PRE-SANCTION:
 Application form
 Latest photograph
 Bank account statement
 Proof of income employer certificate of identity proof of continuity of current
job.
 Proof of residence of the borrower and guarantor.

POST-SANCTION:

 Demand promote
 Agreement (N J stamp paper for Rs. 15/- only)
 Signature verification
 Post dated cheques

39
ADVANCEMENT

Under this scheme Rs.84.66 were advanced during the year 2005-2006 and Rs
133.78 cr. has been advanced during the year 2007-2008 and Rs. 133.89 cr. were
advanced during the year 2008-2009

140

120

100

80
133.78 133.89 2005, 2006, 2007, 2008,
60 2009
103.22
84.66
40
66.38

20

0
1 2 3 4 5

CONSUMER LOAN

The Punjab state cooperative bank to make advances to the individuals directly for
the purpose of consumer durables like refrigerator, scooter, television radio etc and
for meeting other domestic expenses like expenses on medical, education, marriage
of son/ daughter/ brother/ sister or self etc. and also for providing overdraft facility

40
to the saving account and current account holders. All these loans will be made to
salary earners. Necessary rule governing these advances and various forms have
been prepared and are enclosed herewith for the guidance and implementation.
For the purchase of consumer durables, advances should be granted by the state
and central cooperative bank up to following maximum limit only. The Punjab State
Cooperative Bank should make such advances @2% of its total deposits from
individual or Rs 10lacs , whichever is less in case the total deposits are upto Rs. 10cr.
In case its deposits exceed Rs 10 cr. Then it should advance; loan for this purpose
@3% of its deposits from individuals or Rs. 30 lacs, whichever is less.

BENEFICIARY

The bank may grant loan to the individual who salary earners are holding a saving
or current account with the bank.

PURPOSE

The loan is granted for the purchase of consumer durable items like refrigerator,
television, air conditioner, computer etc.

TENURE OF LOAN

The loan should be repayable in monthly installments. The total duration of loan
should not exceed five years.

MAXIMUM LIMIT OF LOAN

The amount should not exceed Rs. 50000/- per borrower or 75% of the cost of
articles to be purchased.

CONDITION FOR APPLYING FOR THE LOAN

41
The following conditions are required to be fulfilled in order to apply for the loan:
• The borrower should be enrolled as a nominal member of the bank.
• The borrower is required to produce two witnesses who should also be a
nominal member of the bank, while signing the agreement.
• The loan should be advanced for acquiring new assets only. Purchase of
second hand articles should not be financed.
• The bank should take the original from the dealer.
• The loan should be against hypothecation of the assets required/ to be
acquired.

DOCUMENTS REQUIRED

• Promissory note
• Agreement bond
• Salary certificate
• An authority letter from the loan and corresponding undertaking from the
employer of the borrower under section 39 of the act for the repayment of
the loan in case the borrower fails to repay his loan.
• Letter of waiver
• An authority letter from the borrower to recover the installment
• Application form
• Surety bond
• Hypothecation agreement

RATE OF INTEREST

The rate of interest charged on the consumer durable loan is 14% with a penal
interest of 1% in case of any default.

42
In case, the borrower or the employer fails to discharge the loan as agreed upon the
bank shall take the legation to recover the loan advanced/ outstanding with the
interest and costs. The borrower will be liable to make good all the expenses and
legal charges that have been incurred by the bank in this regard.

ADVANCEMENT

The bank has advanced Rs. 71.50 cr. Till the end of march 2009 as compared to Rs.
79.71 cr which was advanced by the bank in the year 2008.

2005, 2006, 2007, 2008, 2009

120

100

80

60 2005, 2006, 2007,

104.54 100.79 2008, 2009
40 80.7 79.71 71.5

20

0
1 2 3 4 5

4.SHEKARI EDUCATION LOAN FACILITY

BENEFICIARY

43
Any individual with 50% marks in 10+2.

AGE

• Minimum 17 years and Maximum 35 years.

• His age of the father/ Guardian should not be more than 65 years till full
recovery of loan.

PURPOSE

To provide financial assistance to student for pursuing higher studies in India or

abroad i.e. Engineering, medical, dental, Law, Veterinary, Computer, Agriculture:
ICWA, CA, CFA, CS, M.B.A, or any other course run by reorganization university/
institute.

DURATION OF COURSE

Not more than 5 years.

AMOUNT OF LOAN

For studies in India: Rs. 5 lacs

For studies in Abroad: Rs. 10 lacs

RATE OF INTEREST

The rate of interest charged on Education loan is 9% per annum.

PROCESSING FEES

No processing fees.

44
PENALITY FOR PRE- PAYMENT

No penalty

RECOVERY OF LOAN

The recovery of principle amount will start one after one year of total duration of
course.
OR
After 6 months of getting the job by the applicant whichever is earlier.

SECURITY

Collateral security: Equal to the loan amount.

In case parent/ guardian are salaried employee of Punjab Govt. / Local Bodies, No
collateral security is required if loan is up to Rs. 5 lacs. Only undertaking and
authority letter from the employee is required.

INSURANCE

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

DISBURSEMENT OF LOAN

The branch will get sanction of total loan amount from the competent authority, but
will disburse the amount based on yearly expenses of the course.

45
 • Third party payment in favor of concerned university or college.
• In case purchase of equipment/ books/ computer the payment shall be made
to the applicant.

DOCUMENT

• Salary slip for the six months

• Income proof
• Income tax returns
• Academies records
• Particulars of scholarship won, if any

POST SANCTION

• Application nominal membership from student/ parents/ guardian and

guarantor.
• DP note
• Letter of lien and set off
• Letter of waiver
• Letter of guarantee from guarantors
• Loan agreement.

Affidavit from parents / guardian regarding

a. Payment of interest
b. Repayment of loan, in case of default by the applicant

46
 c. He will not go abroad permanently without prior permission of the
bank.
d. He will intimate the bank regarding any change in the status, if any.
e. Mortgage of collateral security duly registered & mutation in favor of
the bank, if required.

PRECAUTION FOR DISBURSEMENT

• Third party payment except for purchase of equipment/ books

• Payment of loan amount for the 2nd year is made after obtaining the
documents relating to passing the first year & so on.
5.VEHICAL LOAN

BENEFICIARY

Any individual, group of individuals or a partnership firm.

PURPOSE

To provide financial assistance to purchase new vehicle for the business and
personal use.

AMOUNT OF LOAN

10 lacs
OR
80% of the value of the vehicle whichever is less.

MARGIN MONEY

85% (minimum)

47
RATE OF INTEREST

Up to Rs. 3 lacs 13%

Above Rs. 3 lacs – 13.50%
Interest rates are subject to change from time to time.

PENAL INTEREST

Penal interest is changed in case of any delay or any other faults in the repayment
the loan installment.
The penal interest charged @3% over and above the normal interest rate on the
amount of default for the default period.

PERIOD OF LOAN

The time period of vehicle loan cannot exceed 5 years.

REPAYMENT
The loan is repaid by monthly installation
INSURANCE

Comprehensive insurance jointly with name of bank and the borrower.

SECURITY

PRIMARY:

Hypothecation of the vehicle in the favor of the bank and should bs registrates with
the R.T.O

48
Collateral: the collateral security is given at the discretion of the bank.

DOCUMENTS

PRE-SANCTION:-

1. Application for the loan

2. Residence proof of borrower and guarantors.
3. Copy of the Driving license
4. Proof of income.

In case of salaried employee

a. Form 16
b. Latest salary statement with deduction.
c. Income tax return for the last three years, if income tax payee.

In case of business:
a. Copy of balance sheet and profit and loss account for the 3 years.
b. Proof of business
c. ITR’s for the last three years.

5. Quotation of the vehicle

6. Identity proof
7. In case of firm:
a. Copy of the partnership deed.
b. Authorization letter.
c. Proof of office in case of firms.

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

49
9. Document relating to collateral security if applicable.

POST SANCTION:

1. Application for the nominal membership of the borrower, guarantor and

Mortgagor.
2. D.P. note
3. Letter of lien and set off.
4. Letter of waiver
5. Hypothecation deed.
6. Loan agreement.
7. Mortgage Deed duly registered and mutation in the favor of the bank, if
applicable.
8. Duly signed post dated cheques for the installments.

Precaution for the disbursement

The following documents to be obtained after disbursement.

a. Insurance cover
b. Copy of Registration Certificate.
c. Original invoice.
d. One set of duplicate keys.
2005, 2006, 2007, 2008, 2009

ADVANCEMENTS
90
80
70
The bank has advanced Rs. 84.08 cr. To the customer in the year 2008- 09 , while
60
the amount was Rs 61.82 crore in the year 2007-08.
50
84.08 2005, 2006, 2007,
40 2008, 2009
30 61.82

20 39.16
22.6 25.91
10
0
1 2 3 4 5 50
51
RESULTS AND
DISCUSSIONS

52
1.What kind of loan have you taken from organization?

Table XV

Kind of Loan No. of Respondent Percentage(%)

House loan 16 32%
Personal loan 15 30%
Consumer loan 6 12%
Educational loan 8 16%
Vehicle loan 3 6%
Other 2 4%

INTERPRETATION:

Table reaveals that 16 respondents have taken house loans, 15 have

53
 taken personal loans and less people prefer consumer, educational and vechile
loans.

2. What is the amount of loan taken?

Table XVI

Loan Amount No. of Respondent Percentage (%)

Less than 20,000 4 8%
20,000-50,000 10 20%
50,000- 1 lac 6 12%
More than 1 lac 30 60%

INTERPERTATION:

54
Table reveals that 8 % people prefer loan less than 20,000, 20 % respondents
prefer 20,000 to 50,000,12 % prefer more than 1 lac and 60% of the respondents
prefer more than 1 lac.

3.What is the term of loan ?

Table XVII

Term of Loan No. of respondent Percentage(%)

Less than 1 year 6 12%
1 to 3 years 10 20%
More than 3 years 32 64%

INTERPRETATION:-

Table shows that 64 % respondents take loan for more than 3 years, 20 % take loan
for for 1 to 3 years and 12% take loan for the period of less than 1 year

55
4.What is the rate of interest you paying?

Table XVIII

Rate of interest paid by No. of Respondent Percentage (%)

the customers
Less than 9% 2 4%
9% to 12% 24 48%
More than 12 % 24 48%

INTERPRETATION:

Table shows that 48% of the respondents are paying rate of interest 9 to 12 % and
more than 12 % and 4 % of the respondents pay less than 9 % of rate of interest.

56
 5. How many time have you taken loan before?

Table XIX

No. of respondent Percentage (%)

No. of times loan taken
Only once 29 58%
1 to 3 times 16 32%
More than 3 times 5 10%

INTERPRETATION:

Table reveals that 58 % of the respondents took loan once , 32 % of the respondents
took loan for 1 to 3 times and 10 % took loan for more than 3 times.

57
 6. What prompted you have to take loan from the institute?

Table XX

Reason for taking loan No. of Respondent Percentage (%)

Reasonable rate of 6 12%
interest
More schemes 5 10%
Less formalities 17 34%
Easy repayment 19 38%
Any other 3 6%

INTERPRETATION:

58
Table reveals that 38 % take loan because banks provide easy payment,34% take
loans because of less formalities and other respondents take loan because of
reasonable rate of interest, more schemes .

7.What is the average time taken for the processing of the loan?

Table XXI

Average time for No. of respondent Percentage (%)

processing of loan
Less than 7 days 34 68%
Between 7 to 14 days 13 26%
More than 14 days 3 6%

INTERPRETATION:-

Table reveals that 68% respondents says that average time taken for processing of
the loan is less than 7 days, 26% says that it takes 7 – 14 days and 6 % says that it
takes more than 14 days.

59
8. Are you satisfied with the amount & period of installment?

Table XXII

No. Of respondent Percentage (%)

Yes 34 68%
No 6 12%
Can’t say 10 20%

INTERPRETATION:

60
Table reveals that 68% are satisfied with the amount and period of installement ,12
% are not satisfied and 20 % can’t say.

61
9. To what extent are you satisfied with the following factors?

62
10.How would you rank the facility provided by the bank?

Table XXIII

Rank the facility No. of respondent Percentage (%)

Above average 16 32%
Average 30 60%
Below average 4 8%

INTERPRETATION:

Table shows that 60% of the respondent says that facility provided by the bank are
average, 32% say that its above average and 8% says that its below average.

11.How would you rank the customer service of the bank?

63
Table XXIV

Rank the customer No. of responedent Percentage(%)

services
Excellent 12 24%
Good 26 52%
Average 12 24%
Poor 1 2%

INTERPRETATION:

Table shows that 52% of the respondents says that customer service of the bank is
good,24% says that it is excellent and another 24 % says its average and only 2 %
says its poor.

12. If you are in need of loan in future from which in banks would you prefer to take
loan?

64
Table XXV

Preferable banks in future No. of respondent Percentage (%)

Public banks 7 14%
Private banks 15 30%
Cooperative bank 28 56%

INTERPRETATION:

Table shows that 56 % of the respondents wil prefer loans from co-operative banks,
30 % from the private banks and 14 % from the public banks

13.Do you think the bank is able to reach upto your satisfaction level?

Table XXVI

65
 No.of respondent Percentage (%)
Yes 37 74%
No 13 26%

INTERPRETATION:

The bank is able to reach upto the satisfaction level of 74% of its employess while
the remaining 26% are not satisfied by the services provided by the bank. Hence,
the bank should work upon to increase the customer satisfaction level.

14.Would you like to refer the bank to your friends and relatives?

Table XXVII

Bank refer to others No. of respondent Percentage (%)

66
Always 39 78%
Sometimes 9 18%
Never 2 4%

PROBLEMS FACED BY COOPERATIVE BANKS

1. The cooperative financial institution is facing severe problems which have

restricted their ability to ensure smooth flow of credit and also in meeting the
requirement of the farming
i. Limited ability to mobilize resources.

67
 ii. Low Level of recovery.
iii. High transaction of cost.
iv. Administered rate of interest structure for a long time.

2. Due to cooperative legislation and administration mandates Govt interference has

become a regular feature in the gay –to-day administration of the cooperative
institution. Some of the problem area that arise out of the applicability of the
cooperatives legislative are
i. Deliberate control of cooperatives by the government.
ii. Nomination of board of director by the government.
iii. Participation of the nominated director by the government.
iv. Deputation of government officials to cooperative institution etc.

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

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

5. There is the condition of government guarantee by NABARD while sanctioning

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

6. On the number of occasions institute like food cooperation of India. Indian Oil
Corporation, Hindustan Petroleum etc. Have issued instruction in writing that
demand draft/ pay order should be obtained from the nationalization/ schedule
bank.

68
7. SCBs does not provide loan directly to farmers due to which they cannot keep
pace the changing requirements of the farmers.

69
 FINDINGS
&
SUGGESTIONS

FINDING:

1. Majority of the respondent were having housing loan from this bank.

70
 2. Most of the people prefer to take long term loan which is more than 3 years.
3. Easy repayment and less formalities are the main factors determining
customer’s selection of loans.
4. Quality of services provided by the staff is satisfactory because the number of
customers visiting in this branch are very less so that the customers are
properly dealt with.
5. Customers are satisfied with the mode of repayment of installments.
6. Average time for the processing of loan is less than the other banks i.e
between 7 days .

SUGGESTIONS:

1. The bank should adopt the modern methods of banking like internet
banking, credit cards, ATM, etc
2. The bank should plan to introduce new schemes for attracting new
customers and satisfying the present ones.
3. The bank should improve the customer services of the bank to a better extent

71
BIBLIOGRAPHY

72
BIBLIOGRAPHY:-

1. By laws of PSCB bank ltd.

2. Annual reports of the PSCB ltd.
3. Broachers and pamphlets of PSCB ltd.
4. Service manual of PSCB ltd.
BOOKS:

1. Research Methodology by C.R. Kothari.

2. Marketing Research by G.C.Berri.

73
QUESTIONNAIRE

74
 QUESTIONNAIRE

NAME:
AGE:
SEX:
OCCUPATION:
INCOME:

1.What kind of loan have you taken from the organization?

 Housing Loan
 Personal Loan
 Consumer Loan
 Education Loan
 Vehicle loan
 Others

2.What is the amount of loan taken?

 Less than 20,000
 20,000- 50,000
 50,000-1 lac
 More than 1 lac

3.What is the term of loan?

 Less than 1 year
 1 year to 3 year
 More than 3 year

75
4.What is the kind of loan?
 Secured loan
 Unsecured loan
If secured loan have been taken than mention the security that been pledged.

5.What is the rate of interest you have paying?

 Less than 9%
 9% to 12%
 Above 12%
6.How many time you to taken from the institute?
 Only once
 1 to 3 times
 More than 3 years
7.What prompted you to take the loan from the institute?
 Reasonable rate of interest
 More schemes
 Less formalities
 Easy repayment
 Any other
8.what is the average time taken for the processing of the loan?
 Less than 7 days
 Between 7-14 days
 Above 14 days
9.Are you satisfied with the amount & period of installment?
 Yes
 No
 Cant say

76
10.To what extent are you satisfied with the following factors?

Highly Satisfied Cant say Dissatisfied Highly

Satisfied Dissatisfied
Easy Access
Less paper
work
Low interest
rate
Supportive
staff
Fast service
Proper
feedback
system
Easy
repayment
facility
Convenient
mode of
payment of
installment

77
11.How would you rank the facilities provided by the bank?
 Above average
 Average
 Below average

12.How would you like to rank the customer service of the bank?
 Excellent
 Good
 Average
 Poor

13.If you are in need of loan in future from which institute would you prefer to
taken loan?
 Private banks
 Public banks
 Cooperative bank

14.Do u think the bank is able to reach upto your satisfaction level is providing
loans and its related services?
 Yes
 No

15.Would you like to refer the bank to your friends and relative?
 Always
 Sometimes
 Never

16.what improvement do you suggest?

78
79