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A PROJECT REPORT ON STUDY OF LOANS & ADVANCES IN CO-OP.

BANKING SECTOR
AT

THE THANE JANATA SAHAKARI BANK LTD. SUBMITTED BY

Mr.Ganesh S. Dayma

SUBMITTED TO

Dr. Babasaheb Ambedkar University,Aurangabad
IN PARTIAL FULFILLMENT OF 2 YEARS FULL TIME COURSE M.COM. II
(BATCH 2012-2013)

UNDER THE GUIDANCE OF

Prof. Rathi Madam
Swami Ramanand Teerth Mahavidyalaya Ambajogai

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ACKNOWLEDGEMENT
The project is never an individual effort. It is contributory effort of many hearts, hands & brains. For the completion of this project. This project would not be possible if not aided by few kind souls. First & foremost I would like to take this opportunity to thank “The Thane Janata Sahakari Bank Ltd. Pune” for giving me such opportunity to do this project in such esteem organization.

I would also like to thanks Mrs Rathi Madam, (Project Guide) & all other faculty members for providing valuable suggestion in preparing my project without them this project would not have been possible.

DATE: -

/

/2013

Mr. Ganesh Dayma (M.Com II)

PLACE: - Ambajogai

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INDEX:SR. NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Introduction Objective of the study Company Profile Review of Literature Research Methodology Data Analysis and Interpretation Limitation of the Study Findings Suggestions Conclusion PARTICULAR PAGE NO. 4 8 10 16 44 47 56 57 58 59

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INTRODUCTION ~4~ .

therefore. Normally loans are repayable in installments. it was necessary to pass laws in order to control their irregularities and mushroom growth. development banks etc. Interest on the full amount of the loan is available Banking system occupies in an import ant place in every nation‟s economy. banks and private scheduled / non-scheduled banks. A good banking system with strong banking institutions is indispensable for the economic growth of a country. the loans system ensures greater degree of discipline on the part of the borrower. As in this topic we can see the various types of loans and what is the procedure for sanctioning the loan. profitable from the bank‟s point of view ~5~ . As the period of repayment of the loan or its installments ate fixed in advances. After doing this project I have come to know that now a day‟s banking sector or any financial institute plays very important role in the society. In the case of Co-op. Funds are required for single non-repetitive transaction. The objectives and methods of working of banks have undergone significant changes.INTRODUCTION A period of less than a year. Under the loans system. in the case of „Co -op bank‟ it was found necessary to make legal provisions so that the bank will be encouraged to come into existence. banks. which are self-liquidating over able to the bank under this system and it is. foreign banks. Loan constitutes the major form of intermediate term financing. However. In India. commercial and co-operative banks. the loan amount is given to the borrower normally in one installment and further drawings in the loan account are permitted. This complex structure has developed over a period of last 150 years. we have an organized banking structure comprising Co-op. Unlike short-term loans. The amount is given for a predetermined period.

the same can be tailed to satisfy the needs of the borrower. If a firm decides to float debentures of loan funds from the market. Good banking system with strong banking institutions is Indispensable for the economic growth of a country. Since the terms of the outcome direct negotiation between the lender and the borrower. In India. The objectives and methods of working of banks have undergone significant changes. foreign banks. term loan is available quickly and at less expense as compared to public issue of debentures. it must seek the permission of SEBI. machineries etc. we have an organized banking structure comprising Co-op banks and private scheduled / non-scheduled banks. A firm with assured credit for a stipulated period of time can go ahead with plans and projects benefiting the firm. This complex structure has developed over a period of last 150 years. development banks etc. Term loans is emerging as an important source of business financing in recent years because of added advantage of easy availability of the loan. In the case of commercial banks. prepare prospectus and registrations statement and file with Registrar of Joint Stock Companies and allot debentures to then applicants. goods. shares. Furthermore. its cheapness and flexibility. IMPORTANCE OF THE TOPIC:Banking system occupies an important place in every nation‟s Economy. All this ~6~ . However. it was necessary to pass laws in order to control their irregularities and mushroom growth. Certain special precautions have to be taken while granting the loans. Generally the banks grant loans against different types of securities like fixed deposits. commercial and co-operatives. in the case of banks‟ it was found necessary to make legal provisions so that the national banks will be encouraged to come into existence.

the main function of bank is to accept deposits by mobilizing the savings and give loans & Advances to needy people for different purposes. institutions that have surplus funds and advance the loans to those who need them. which make the nature and important functions of bank very closer. ~7~ . A Bank is an institution. There are different definitions stated by different authorities. which is engaged in the business of accepting deposits and giving loans & Advances.costs to the firm about 3% of the borrowing amount. Thus. Bank accepts deposits from various peoples. This can be avoided in bank terms loans.

The aim of the study is to analyze the different types of loans and studying the procedure of granting the loans. quantum of finance. quantum of finance. To secure information regarding the documents required for acquiring the loan 9. 10. interest rates. To analyze the education loan scheme in respect of eligibility. etc. 8. To analyze the education loan scheme in respect of eligibility. 7. 5. This study is required for every shareholder. 1. repayment. 4. etc. The aim of the study is to analyze the different types of loans and studying the procedure of granting the loans. who is the real owner of the organization. Aim of the study is to understand the concept of loan under Co-op banking sector in the small places. 6. The shareholder should know how the items in the balance sheet are varying and inter relationship with other components in the statement. security.Aim of the study is to understand the concept of loan under Co-op banking sector in the small places. To secure information regarding the documents required for acquiring the loan 3. 2. repayment. ~8~ . security. interest rates.OBJECTIVES OF THE STUDY:The aims and objectives of the study can be summarized under the Following points. The mail objective of the study is to analyze and interpret the data which has given through financial statements and through the annual financial report of the bank.

~9~ . who is the real owner of the organization. 12.This study is required for every shareholder.11.The mail objective of the study is to analyze and interpret the data which has given through financial statements and through the annual financial report of the bank. The shareholder should know how the items in the balance sheet are varying and inter relationship with other components in the statement.

COMPANY PROFILE ~ 10 ~ .

It now has 1421 branches all over India. techno-savvy. The Bank has the largest network of branches by any Public sector bank in the state of Maharashtra. customer centric bank serving diverse sections of the society. its initial help to small units has given birth to many of today's industrial houses. The Childhood Known as a common man's bank since inception. Organization vision To be a vibrant. enhancing shareholders‟ and employees‟ value while moving towards global presence. After nationalization in 1969.00 lakh and commenced business on 8th Feb 1936. the bank expanded rapidly.INTRODUCTION TO ORGANISATION:- The Birth Registered on 04th Feb 1972 with an authorized capital of Rs 10. The Adult The bank has fine tuned its services to cater to the needs of the common man and incorporated the latest technology in banking offering a variety of services. ~ 11 ~ . forward looking.

Bank of Maharashtra ". Our Social Aspect:- The bank excels in Social Banking. Its dream is "One Family. The Diyas Our Branches. One Bank.Symbolizing strength. overlooking the profit aspect. The 3 M's  Mobilization of Money  Modernization of Methods and  Motivation of Staff.Symbolizing service. The Autonomy:The Bank attained autonomous status in 1998. It helps in giving more and more services with simplified procedures without intervention of Government. ~ 12 ~ . Organizations Aims:- The bank wishes to cater to all types of needs of the entire family. it has a good share of Priority sector lending having 38% of its branches in rural areas. The Pillar Our institution. in the whole country.The Deepmal With its many lights rising to greater heights.

to be reliable provider of their services and facilities in respect of several schemes launched by the bank.  It‟s Quest for excellence through exploring new horizons Banking.Other Attributes: Bank is the convener of State level Bankers committee.  Bank offers Depository services and Demat facilities at 131 branches.  Bank has a tie up with LIC of India and United India Insurance Company for sale of Insurance policies. With the presence of a well established management and supportive and cooperative employee network. I could perform my study successfully at the bank. It is my privilege having achieved the same.  All the branches of the Bank are fully computerized. Due to its wide scope and spectrum I looked forward towards the opportunity to work with the bank as a summer trainee. The bank has been committed to its quality policy which is to strive to meet the expectations of their Customers. ~ 13 ~ .

Pune  100th branch opened at Swargate.1980 : 10.13/.03.06.2004 : 12. Mumbai)  100th branch opened in Madhya Pradesh (sehore)  100th branch opened in Pune district (Kale colony.05. Pune  Nationalization of bank along with 13 other Major Banks  500th branch opened at Allahabad  500th opened in Maharashtra state (Nariman point.1969 : 21.10.12.ACHIVEMENTS: Date of Establishment of Bank  Date of Commencement of Business  First Branch Open at Bajirao Road.each (Over subscribed 10 times)  Listing of bank‟s shares on stock exchanges  Bank entered into an agreement with Western Union Money Transfer to enable NRIs to remit Funds from abroad to India  : 16.03. ~ 14 ~ : 18.05.02.1983 : 27.2004 : 21.09.02.07. district-Pune)  1000th branch opened at Indri Vaasa.1977 : 14.1936 : 17.2005 Banc assurance (non-life) launched for selling Non-life insurance products of united India Insurance co.1936 : 06. ltd.12.02.1935 : 08.1965 : 19.1987 : 25.04. Pune  Bank‟s IPO opened for subscription of 10 core Equity shares at a premium of RS.2006 .1983 : 12.

Of India.07. Banc assurance (life) launched for selling Life insurance products of life insurance corp. 50000 crores : 26.10.2006 : 05.12.2006 : 01.2006 ~ 15 ~ .  Bank tied-up with Franklin Templeton Mutual Fund for selling mutual fund products  Bank surpassed Business landmark of RS.

REVIEW OF LITERATURE ~ 16 ~ .

Definition of Bank:Definition by the Indian Regulation Act 1949:

This act defines a banking company under section 5c as a company, which transacts business of banking. This definition makes it clear that bank can be defined only with reference to the business, which goes with the term banking. The act also define the term banking in section 5b according to which “Banking means acceptance, for the purpose of lending or investment of deposits of money from public repayable on demand or otherwise, withdrawal by Cheques, Draft or order.”

Definition by Prof. R. S. Sayers:“A Bank is an institution whose debts, usually referred to as bank deposits are commonly accepted in final settlement of other people debts.”

Origin of the concept of Banking:We have understood the meaning & scope of the term „Bank‟ in the light of the various functions that a bank performed today. But the present character of a bank has evolved through time. It is therefore, necessary to follow this process of the evolution banking. According to one view, the English word bank owes its origin to the Italian words Banco, Bancus, Banque or Banc. All these words means a „Bench‟ upon which the mediaeval European moneylenders & moneychangers used to display ~ 17 ~

their coins. The Jews in Europe practiced this business. These Jews possibly flourished most in Italy in the early years; & hence the Italian word came into vogue. In England, Banking as an independent business dates back to the fourteenth century. In those days the Jews of Lombardy, in England used to transact their business on benches at market places. One can further point to a historical fact in support of this view. When a banker was unable to meet his obligations to his customers, according to the custom, his „banco‟. Were destroyed or broken to pieces. Hence, the word „Bankrupt‟ was derived. Thus it appears that the word bank is derived from the Italian words Banco, Bancus etc. Here are others however, who trace the word bank is derived from the Italian word Monte, which means a „mound‟ or a „heap‟. This word implies that one requires a heap of money for carrying on the banking business. We are obviously not interested in the controversy over the etymology of the word „bank‟. We are interested in the origin of banking & whichever view is accepted, the fact remains that this derivation takes banking back to the Middle Ages.

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Classification of Bank :Bank can be classified on different basis clarity demand that the basis of classification should be determined first & then classifications should be made. On the basis of direct dealing with the public, banks can be divided into central & other banks. Banks are also divided on the basis of their day to day transaction means as per heavy transaction they are classified under particular categories.

A] Central Bank:In the banking system of any country, there is a central bank & a number of other types of banks. Central banks are different from all the other types of banks. All the distinctive features of a central bank are a partly & precisely summarized in this quotation. A central bank has the monopoly of note-issue. It acts as bank to the government. It acts as a friend, philosopher & guide to the entire bank in the country. Regulation & control of credit is an important responsibility of a central bank. Thus, the central bank is an apex institution, which stands out as the supreme bank above all other banks. A central bank does not directly deal with public. It does not accept the public deposits; nor does it grant loans to individuals. Indirectly, it can help agriculture, industry, and etc. by augmenting the resources of the other banks.

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Thus though commercial banks are basically deposit banks normally providing only commercial credit. so much so that the term „bank‟ unqualified by any objective. for example. by far. etc. Thus. C] Industrial Banks:Industrial banks as the term indicates specialize in industrial finance. Like any other.which is another name for industrial banks. the major part of the working capital with a commercial bank comes from public deposit. However. promoting & developing industrial units. Modem industries require long-term credit for the exaction of factories & plants. British banks do not provide industrial credit. Indian commercial banks are playing an increasingly important role in agricultural credit.B] Commercial Banks:Commercial banking is. import of spares & so on. saving banks. receipt of deposits & provision of credit are primary functions of a commercial bank. ~ 20 ~ . They also require medium-term loans for the purchases of equipment. is taken to mean a commercial bank. This is why commercial banks are called deposit banks. because commercial banks have a commitment to return the deposits as & when required by the deposits they provide mainly short-term credit. the most important type of banking. but Japanese commercial bank provides it. An industrial bank maintains this expertise & specialized in this type of activity Thus the role played by industrial banks is very important in planning. Industrial credit also requires different types of banking expertise. they also called as investment banks. The function of making long term investment is left to investment banks .

D] Agricultural banks:Financing of agricultural poses special problem. for effecting permanent like digging wells. a central co-operative society. Director. etc. But many times. in relation to co-operative society. 3) Long term credit: Long term credit is require for purchase of agriculture machinery. The credit needs of agriculture are three folds: 1) Short term 2) Medium term 3) Long term 1) Short-term credit: Short-term credit is requires for carrying out the day in day agriculture operations and for the purchase of manure. 2) Medium term credit: Medium term credit serves the purpose of buying cattle. for the time being wasted with the management of the affairs of their society. the credit worthiness of an agriculturist is limited. includes a member of any committee or body. as in India. Primary agricultural credit society is distinguished from other societies in that it finances ~ 21 ~ . etc. leveling land etc. seeds. The primary object of which is to provide financial accommodation to its members & includes a co-operative Land Mortgage Bank. Since agriculture is followed as personal or family occupation. the loan virtually becomes a personal loan. E] Co-operative banks:Co-operative bank means a state co-operative bank. & for buying additional land.

the fun timing of these banks . they need it in international trade as well. these banks provide credit to consumer for buying car furniture & other durable consumer goods. unlike that of all other banks enumerated so far . Credit for housing is an important aspect of these banks. The traders in the field of international trade are import & export trade. H] International Banks:International banks are a class by themselves. These banks have branches in all the important centers of the world. G] Consumer banks:Consumer banks came in to existence in the U. They discount bills of exchange. They provide facilities for the remittance of money from one country to another country.agricultural purpose. They also issue letters of credit. working & control. is on an official level in the sense that the government of various countries are involve in their formation . ~ 22 ~ . Due to the nature of exchange banking some very big banks dominates this field.A they became popular these & then spread to other advance countries. People can borrow money a long term basis from these banks for purchasing or constructing houses. Primary co-operative bank means a co-operative society carrying out banking with a paid-up capital reserve of more than one lack. With less than one lack it becomes primary credit society. F] Exchange banks:Just as a trader needs a credit in internal trade. however commercial banks are also participating in the foreign exchange business in India. The repayment of is spread over a long periods in easy monthly installment. Now a day.S. which arise in international trade.

As the period of repayment of the loan or its installments are fixed in advances. medium and long term basis according to the purpose of the loan. Loans are given short. therefore. repayment installments are not fixed. Such loans are generally employed to finance more a permanent portion of working capital requirements. In ordinary term loan the lender lends funds as per the agreement outright for a period of more than a year and up to ~ 23 ~ . the management cost of loans is less. Installments are fixed for repayment of the loans on the basis of repaying capacity of the borrower. and no further drawings in these accounts are permitted. Term loan may take form of an ordinary loan or a revolving credit. Funds are required for single non.THEORY RELATING TO TOPIC:Under the loans system. As a result. if a loan is given for the constructions of the house. most of these loans are paid in the regular and periodic installments. through there are exceptions to the rule. profitable from the bank‟s point of view. the loans system ensures greater degree of the loan is available to the bank under this system and it is. fridge. Term loan constitute the major form of intermediate term financing.repetitive transactions. Normally loans are repayable in installments. As loans are given only once. As the borrower gets a lump-sum he is able to purchase consumer articles like TV. Short term loans are up to a period of 15 months. Medium term loan are up to the period of 5 years. This procedure ensures that the loan amount is used for the purpose for which it is sanctioned. At times loan amount is made available to the borrowers in installments as per the programmed of this project and till the full amount is drawn by him. The amount is given for a predetermined period. the loan amount is released in installments taking into account the progress of constructions. Unlike short-term loans are given for a period of more than one year but less than ten years. the loan amount is given to the borrower normally in one installment and further drawings in the loan account are permitted. For examples. vehicle or a flat for his residence.

MATURITY:Term loan bear a maturity period of more than one year but not more than ten year. frequently for two to three years. Term loans are usually secured against mortgage secured loans does not exceed the appraised value of the property. is a formal commitment by a lender to lend up to a certain amount of money to a concern over a specified period of time. on the other hand. PURPOSE:- Term loans are sought for financing core portion of working capital. Term loans are also used for meeting all expenses. ~ 24 ~ . This is thus a guaranteed time of credit where by the lender agrees to lend the money on demand in a future period. In India commercial banks generally grants term loans mostly for a period of five to seven years.ten year. A revolving credit. In India. replacement of equipment and others due to modernization of the plant. commercial banks and the other financial institutions are subject to regulations imposed by the Reverse Bank of India which limit these mortgages to certain specified portion of the appraised value of the property. including those for repairs. COLLATERAL:- Term loans are more frequently secured than short term loans due to greater risks involved in term lending. minor additions to stock of plant and equipments and research and development activities.

Different Types of Loan ~ 25 ~ .

Maharashtra Bank lends up to a maximum of Rs 7. new entrants and existing students of only selected leading national educational institutions are eligible to apply for education loans.000(studies outside India) on an educational loans. library charges. The repayment can be accelerated on completion of the ~ 26 ~ .50.00. Loans can be availed up to a maximum of 90% of the total cost as determined by Maharashtra Bank. cost of books and equipment. with the earning parent/guardian being the co-applicant to the loan. and admission to an approved educational institute for pursing a recognized course. The student should have a consistently good academic record. Currently.000 (studies in India) & Rs. The costs would generally cover expenses incurred towards the course fee. The repayment period of the loan is determined on the merits of each case but would not exceed 5 years. Terms & Conditions:- Loans are given to students who are citizens of India.15. hostel and mess charges. Educational Loan:- Who is eligible? Students enrolled with an approved educational institute and desirous of availing the education loan can make an application.

00 lakhs : Rs. This is payable every month from the date of each disbursement up to the date of commencement of EMI.00 lakhs For studies in India For studies outside India :5% : 15% ~ 27 ~ . In the event where the student plans to leave the country for any reason. MARGIN:- No margin up to For loan above : Rs. 4. considering the earning capacity of the student. You repay the loan in Equated Monthly Installments (EMI) comprising principal and interest.course. The security for the loan would normally comprise personal guarantees and such other security acceptable to Maharashtra bank. EMI commence three months after the completion of the course Pending commencement of EMI. This interest is called preEMI interest. the same would be considered on a case-to-case basis depending on the merits of each case and on such terms as May required. however. you pay simple interest on the portion of the loan disbursed. Maharashtra bank‟s main concern is to help individuals comfortably repay the borrowed amount. Prepayment of the loan in full or parts is possible. the loan would generally be required to be in full. 4.

~ 28 ~ .00 lakhs.00%p.000/-(including Service Tax) MAXIMUM REPAYMENT PERIOD: For applicants up to 45 years of age: 25 years  For applicants over 45 years of age: 15 years SECURITY: No security up to 4.Rate of Interest: Up to 4.50 lakhs –collatereral in the form of third party  Equitable mortgage of the property  2 additional guarantors acceptable by bank.50% of Loan amount with a cap of Rs.00%p.10.BPLR at present 12. Maharashtra bank will make inquiries as are necessary or call the applicant for a discussion. The completed application form.00 lakhs.BPLR +1 at present 13.a PROCESSING FEE:-  0. together with all supportive documents.00 lakhs  Above 4. How to apply:- The loan application forms are available at your nearest Maharashtra Bank office. needs to be submitted through your Educational Institute.a  Above 4.00 lakhs & 7.

(including co-applicants) are required to apply for the consumer loan if they wish to also take this loan. the Maharashtra bank consumer loan can be used to purchase more than one product and can be availed over a period of time. pc‟s branded furniture. execution of loan documents etc. Terms & Conditions:Maharashtra bank‟s consumer loans are easy to apply for and repayable in comfortable monthly installments all the applicants of the housing loan availed from Maharashtra Bank. further. In addition. To top it all. air-conditioners. refrigerators. new two wheelers and new cars. the loan can be also be used to refinance a purchase made in the last six month and/or to repay an outstanding car/two wheeler/consumer durable loan taken from any other institution or bank. ~ 29 ~ .The loan would be disbursed in suitable installments on the compliance of necessary formalities such as providing personal guarantees. disbursement of the loan would also be subject to review of progress reports from the concerned Educational Institute. Consumer Loan:Finance your consumer goods purchases with the Maharashtra Bank consumer loan The consumer loan will facilitate the purchase of a wide range of consumer durables like TV‟s washing machines.

~ 30 ~ . 2009.25% payable only if the loan is prepaid within one year from the date of disbursement. the administrative fees are being waived for loans disbursed before March 31. you may make a part prepayment (subject to minimum amount of 25% of the outstanding loan amount). you can prepay only the entire loan amount. There is a charge of 9. Fees:An administrative fee of 0. In the case of a consumer durable/ two-wheeler loan. Rate of Interest and Repayment Term:- Prepayment:- You can repay your loan ahead of schedule. Maharashtra Bank will determine the loan amount based on the repayment capacity of the individual. Maharashtra bank‟s main concer n is to help individuals comfortably repay the borrowed amount.Amount:- Loans can be availed up to 100% of the cost of the products. 300/However. In case of a car loan. Maximum Rs.30 % of the amount disbursed is payable at the time of & Minimum Rs 100/-.

You need to submit the application form along with the supporting documents. you can collect the application from any of your nearest branch of Maharashtra bank in Nasik district. latest balance sheet. Supporting Documents to be attached:- With the application form: 1. How to apply:It‟s simple! You can get the application form by head office of Maharashtra Bank. latest salary slip/certificate (if employed) 3. P&L account and income-tax return (if self-employed) 4.Security for loan:- Security for the consumer loan will be the extension of the existing security on your housing loan. Alternately. then you may be required to provide to provide additional security. clean loan to be guaranteed by 1 acceptable guarantor ~ 31 ~ . Proof of ID having your photograph 2. In case the current value of the security is not adequate.

The term of the loan can be structured according to your unique requirements. will have to be co-applicants. You can repay the loan over a we will determine the loan amount after evaluating the repayment ~ 32 ~ . Applicable administrative fee 2. Copy of registration book (for two-wheelers and cars only) Home Loan:Terms & Conditions:- Home loans offers you various unique benefits and are easy to arrange and repayable in easy monthly installments.At the time each disbursement:- 1. Loans can be availed up to a maximum of 85% of the cost of the property (Including the cost of the land) on a home loan to an individual. in respect of which the loan is being sought. Proposed owners of the property. the co-applicants need not to be co-owners. Home loans can be applied for by either individually or jointly. Copy of perform invoice(s) After each disbursement:- 1. Copy of final invoice(s) 2. However. Proof of ID having your photograph 3.

capacity of the individual.of the loan applied for is payable when the application forms submitted to the bank. On acceptance of the offer. You can also pay the processing fee and administrative fees upfront i. This fee is in respect of costs incidental to the application.5. up to Rs. ~ 33 ~ .00. For example: Loan applied for RS.000 Fees RS. 1% of the loan at the time of submission of the loan application itself.e. Maharashtra bank‟s main concern is to help individuals comfortably repay the borrowed amount.000 RS. you will have to pay an administrative fee of 2% of the loan approved.e.5. 1000/. Rate of Interest:- The current applicable fixed rate of interest in respect of the total loan approved is are as follows. 1000/- On approval of the loan. Fees:- A processing fee of 15% of the loan amount applied for i.00. a loan offer is made to you.

This interest is called pre-EMI interest. ~ 34 ~ . you pay interest on the portion of the loan disbursed. if the property is under construction.) 9. of Years) 5 10 20 Rupees 2416 1208 604 Pending final disbursement. 00. Interim security may be required.50% 9.75% You repay the loan in Equated Monthly Installments (EMI) comprising principal and interest.Annual Rest Option:- Term of Loan (No. normally by way of deposit of title deeds and/or such other collateral security as may be necessary.00% 9. Security for the loan:Security for the loan is a first mortgage of the property to be financed. RS. of years) Up to 5 6-10 11-20 Rate of Interest (%p. EMI per 1.000 for Annual Rest Option Term of loan (No.a.

as assessed by Maharashtra bank and not necessarily according to a builder‟s agreements. The loan will be disbursed in full or in suitable installments (normally not exceeding three in number) taking into account the requirement of funds and the progress of construction. You can take disbursement of the loan after the property has been technically appraised. You need to submit it along with supporting documents and the processing fee at any head office of the bank or to any branch that convenient to you. all legal documentation has been completed and you have invested your own contribution in full (own contribution is the total cost of the property less Maharashtra bank loan). ~ 35 ~ .How to apply:It‟s simple! You can get the application form by the bank itself or form any of its branches. even if the house has not been selected or the construction has not commenced. make enquires as it deems necessary and convey its decision to you. You can make an application at any time after you have decided to acquire a house. You can make payments by cheque marked “Payee‟s account only” drawn on a bank in a city where Maharashtra bank has an office. by demand draft (payable at par to Maharashtra bank) or by cash. you will have to pay an administrative fee for the loan approved. On acceptance of the offer. Maharashtra bank will consider your application.

5. If you have been in your present employment / business or profession for less than a year mention details of occupations for the previous 5 years. reasons for change and period of the same. 7. Allotment letters of the national bank/ associations of apartment others. Proof of business address in respect of businessmen/ industrialist Supporting Documents to be attached a) Common for all applicants:- 1.  Passport size photograph. Any other information regarding your repayment that is necessary and will assist Maharashtra bank in appraising the case.  Proof of Identity – PAN Card/ Voters ID/ Passport/ Driving License.DOCUMENTS REQUIRED FOR HOME LOAN: Completed application form. 3. Application processing fees. Copy of approved drawings of proposed construction/ purchase. 4. Passport size photograph for security purpose. 2. Agreement for sale/ sale deed/ detailed from architects/ engineers for the property to be purchased or conducted.  Proof of Residence – Recent Telephone Bill/ Electricity Bill/ Property tax receipt/Passport / Voters ID. ~ 36 ~ . 6. giving position held.

suppliers. permanent address where correspondence relating to the application can be mailed. etc. clients. This will expedite the processing of your loan application If You Are Self-Employed: Balance Sheets and Profit & Loss Accounts of the business/ profession along with copies of individual income tax returns for the three years certified by a Chartered Accountant.  A note giving information on the nature of your business/ profession. Home Equity loans:With an Maharashtra bank Home Equity Loan. the funds should not be used for speculation or any illegal purposes. 2. Loans can be advanced against any ~ 37 ~ . A letter from your employer agreeing to deduct monthly installment towards repayment of the loan from your loan salary. 3. from of organization. The end usage of the funds will not be monitored by Maharashtra bank. Latest salary slip/salary certificate showing all deductions. If your job is transferable. you can cash your investment in a dwelling unit without having to dispose it off.Additionally If You Are Employed:- 1. However.

Loans can be availed up to a maximum of 40% of the market value of the property (including the cost of the land). units which are rented out are not covered under this scheme. Fess:A processing fee of 2% of the loan amount applied for. our main concern is to help individuals comfortably repay the borrowed amount. the loan shall be approved only in respect of units that are self occupied. This fee will cover the valuation fee for valuations undertaken. ~ 38 ~ . will have to be co-applicants. The terms of the loan can be structured according to your unique requirements. i. At Maharashtra bank. the co-applicants need not be co-owners. is payable when the application form is submitted to Maharashtra bank. However. Terms & Conditions:Maharashtra bank‟s Home Equity Loans are easy to arrange and repayable in easy monthly installments. in respect of which the loan is being sought. Valuations could also be carried out by government approved value/ external agency acceptable to/ recommended by Maharashtra bank. Moreover. Rs. 1000 of the loan applied for.freehold or leasehold properties that have a clear marketable title. We will determine the loan amount after determining the repayment capacity of the individual.e. Loans can be repaid on an EMI basis or on a simple interest basis. You can repay the loan over a maximum period of 5 years for a loan on an EMI basis and 2 years for a loan on a simple interest basis. Maharashtra bank‟s technical officers at the branch offices would ascertain the market value of the unit. Owners of the current property. Home Equity Loans can be applied either individually or jointly. 20 per Rs.

00% p.a. No early redemption charge would be charged if the loan is prepaid ahead of schedule. Monthly Rest:The rate of interest on the home equity loan (simple interest) on a fixed rate basis is 12. This interest is called pre-EMI interest.a. While the interest on home equity loan (EMI) on a fixed rate basis is 11. the principal repayments would be in equal quarterly installments with interest payments being made on a monthly basis. However.a. Pending final disbursement. in case loans with simple interest rates. the processing fee less valuation fee would be refunded. Post-dated cheques for repayment of loan will be required in all cases. while the interest on home equity loan (EMI) on a fixed rate is 11. you pay interest on the portion of the loan disbursed. Maharashtra bank wills advances funds in the form of a term loan. The loan will be repayable by way of (EMI) comprising principal and interest. No refund is entertained in case the valuation fees exceed the processing fee.00% p. Rate of Interest Annual Rest:- The rate of interest on the home equity loan (simple interest) on a fixed rate basis is 12.a.In case of closures/cancellations.00% p. ~ 39 ~ .00% p.

fixed deposits etc. make enquiries as it deems necessary and convey its decision to you. On approval of the loan. Agreement for sale /sale deed for the property. Liquid securities in the nature of shares. a loan offer is made to you. In addition. 4. you will have to pay an administrative fee for the loan approved. 5. Allotment letter of the national bank / associations of apartment owners. 2. On acceptance of the offer. Maharashtra bank may request for additional/interim/collateral security.Security for the loan:- Security for the loan is a first mortgage of the property against which Maharashtra bank has advanced the loan. How to apply:Maharashtra bank will consider your application. Any other information regarding your repayment capacity that is necessary and will Assist Maharashtra bank in appraising the case. 3. mention details of occupation for previous 5 years. Supporting Documents to be attached For approval of loan a) Common for all applicants:- 1. If you have been in your present employment/ business or profession for less than a year. giving position held reasons for change and period of the same. Applicable processing fees. may be accepted as additional securities on a selective basis. ~ 40 ~ .

The following procedure and precautions are normally taken.b) Additionally If you are Employed:- 1.A. A note giving information on the nature of your business/profession. 2. form of organization. the bank may ask for the security if it feels it necessary to do so in the case of borrowers with a financially weaker status. etc. This will expedite the processing of your loan application. ~ 41 ~ . 3. clients. If you are Self-Employed:- 1. permanent address where correspondence relating to the application can be mailed. A letter from your employer agreeing to deduct the monthly installments towards repayment of the loan salary. If your job is transferable. 4. However. Latest salary slip/salary certificates showing all deductions. Please take photocopies of all documents that are submitted to Maharashtra bank (including the application form) for your personal record. Personal Loan:- These loans are generally granted without obtaining any specific from the borrower. suppliers. 2. Balance sheets and profit & loss accounts of the business/profession along with copies of individual income tax returns for the last three years certified by C. 3.

loans for consumption purpose should not exceed an amount of RS. The borrower and guarantors should be working or serving in the area of operation of the branch. 4. The loan should be guaranteed by two independent guarantors (who should be Members or nominal members). Security: If necessary the bank may order for good security in that case the borrower should give the security. life policies etc. Guarantors: For personal loan the borrower should have minimum two guarantors with him/her. ~ 42 ~ .depending on the purpose of the advance. If he has any other source of income a larger. the maximum loan amount should not normally exceed 5 times his monthly total emoluments. 2.Who is eligible? 1. the limit may be fixed at RS. amount of advances could be considered. the bank may ask the borrower to furnish adequate security by way of gold ornaments. 3.200000/.50000/-. The prospective borrower should have dealings with the bank for a period of at least 3 years or more. shares. Where necessary. These people should be member or the nominal member of urban bank. Limitation: Normally. For other purposes. If the borrower is an employee of any institution.

~ 43 ~ . if the other institution gives a “No Objection Certificates” and if the bank is satisfied about the need and creditworthiness of the borrower. if any.a. The interest will be calculated on daily product basis and debited to the borrower‟s loan account in March.e. Rate of interest: The rate of interest will be governed by the directives. However. 14% p. Other conditions: The borrower should utilize the loan amount for the purpose for which it is granted and may be asked to provide a proof of having done so if the borrower has taken a loan from any other bank or institution. I issued by the Reserve Bank of India from time to time. BPLR+ 2% i. Maharashtra bank will make all such enquiries as are necessary or call the applicant for a discussion. the limit will have to be renewed every year. If it is not paid within month. June. September and December. normally no loan may be granted. The completed application form. the bank may charge penal interest at 2% over the normal rate of interest both for overdue installment and interest. If advances are granted by way of cash credit. it may consider grant of loan to him. How to apply: The loan application forms are available at your nearest Maharashtra bank office. together with all supportive documents.The loan should be repaid within a period of 3 to 5 years in monthly installments.

RESEARCH METHODOLOGY ~ 44 ~ .

The word research has been derived from French word Researcher means to search.RESEARCH METHODOLOGY:Research in common parlance refers to a search for knowledge. To establish generalization in various fields of knowledge. ~ 45 ~ . whether created or already generated. RESEARCH OBJECTIVES: The main objectives of research in management are: To verify and to test the existing facts and theories. Research is the solution of the problem. some new outcome. To bring to limelight information that could have never been brought to the knowledge under normal course. When research is done. To gain familiarity with a phenomenon or to achieve new insights into it. so that the problem (created or generated) to be solved. One can also define research as a scientific and systematic search for pertinent information on a specific topic. FRANCIES RUMMER defined “Research: It is a careful inquiry or examination to discover new information or relationship and to expand or verify existing knowledge.

DATA TYPE: .In this research the type of data collection is  Primary data The primary sources of information collection were through discussion with the faculties and the advisors in the company.  Internet sources  Annual Reports  Text Books DATA SOURCE: . It constitutes the blueprint for collection.The sources of collection of secondary data are:  Books  Websites  Brochure  Annual Reports ~ 46 ~ .  Secondary data The main source of information is taken from annual reports of the companies and through related websites which has enabled in analyzing the equities. measurement and analysis of data. The design used for carrying out this research is Descriptive.RESEARCH DESIGN:Research Design is the conceptual structure within which research is conducted.

DATA ANALYSIS ~ 47 ~ .

The graph has shown in the next page.33. DEPOSITS:YEAR 2007-08 2008-09 2009-10 2010-11 AMOUNT.85 41758.Data analysis Under this chapter I have discussed about loans.96 Under this table I have shown the amount as per the year. As per this table the amount of deposit has increased comparatively last year. 26906.23 52254 . In which whatever data I have collected from the organization Interest on loans is the first income of any financial institute or may bank so loan plays very important loan in banking sector. advances. investment and working capital in the bank of Maharashtra we can analyze below. From last three years what are the positions of loans. ~ 48 ~ . deposits.33.91 .75 33919.18. investments and working capital.

Deposits 60000 50000 40000 30000 20000 10000 0 2007-08 2008-09 2009-10 2010-11 Deposits means saving a sum of amount in the bank for a fixed period of the time bank gives the same amount including the interest as per the bank‟s rate of interest.09 lakhs and after five years that is in 2001 the deposit is 5315. From this bar d diagram we can understand that the bank is increasing its goodwill in market. From last five years the deposits have increased drastically as in the this bar graph in 1997 the deposit was 1405. ~ 49 ~ .04 lakhs.

001.93 394.394.14 325.24. 312.42 Working capital 450 400 350 300 250 200 150 100 50 0 2007-08 2008-09 2009-10 2010-11 ~ 50 ~ .28 354.Working capital:YEAR 2007-08 2008-09 2009-10 2010-11 AMOUNT.90.

Working capital is the portion of current assets which is financed in long term funds. The graph has shown in next page. The working capital of the bank in the last year ended 2009-2010 is 394. This amount has shown in thousands.42 Thousand RS ~ 51 ~ . 2.001. Working capital can be defined in two ways. Working capital means the difference between the current assets and current liabilities. & even in this table the amount has increased comparatively last year.Under this table I have shown the amount of working capital. 1. Under the working capital the capital has increased very fast because of the daily transaction of the bank.

Loans:YEAR 2007-08 2008-09 2009-10 2010-11 AMOUNT.01 .32 As loan is very important role in any banking firm. Even in this graph the amount has shown in thousand and the graph is shown in the next page. 488.90.08 199.38.83 190 . Loans 9 8 7 6 5 4 3 2 1 0 2007-08 2008-09 2009-10 2010-11 ~ 52 ~ .24. So even of this bank the loan which has given to the customer is very high comparatively every year.04 200.

In the above table bank has given the loan in year ended 2005-06 488. So receiving the proper interest on loan is very necessary. In this bank the bank has given the loan very efficiently.38.01 . For any bank.32 ~ 53 ~ .04And after 5 years 2008-09 the bank has given 190 .Under the loan system. Getting interest loan is the first and basic income of any bank or financial institution. the loan amount is given to borrower in one installment and further drawings in the loan account are permitted.

39. According to this table the investment has decrease in the year end of the year.24 18382 .19 11298.14 .Investment:YEAR 2007-08 2008-09 2009-10 2010-11 AMOUNTPER YEAR 11354. The amount has shown in thousand and the graph is shown on next page.36 Under this table I have shown the how much is the investment of the bank in other financial institute. Investment 20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2007-08 2008-09 2009-10 2010-11 ~ 54 ~ .95.55 12282.26.

They are long term assets outside the business of the firm.Investment is very third category of fixed assets. ~ 55 ~ . It customarily shown in the balance sheet at cost with value shown in the parenthesis. The purpose of such investment is either to earn return or control other company. It represents the investments of funds in the securities of the companies.

LIMITATIONS OF THE STUDY:Although every effort has been made to study the “STUDY OF LOANS & ADVANCES IN NATIONALISE BANKING SECTOR” in detail. Apart from the above constraint. one serious limitation of the study is that it is not possible to reveal some of the financial data owing to the policies and procedures laid down by MAHARASHTRA BANK. in an organization of MAHARASHTRA BANK. In such case. it is very difficult to find out and gather complete and true information in the forms of figures regarding ~ 56 ~ . it is not possible to make exhaustive study in a limited duration of 2 months. However the available data is analyzed with great effort to get an insight into Loans and Advances Company generally cannot disclose its internal policies to outsiders. Financial matters.

FINDING & SUGGESTIONS ~ 57 ~ .

Due this bank‟s deposit rises tremendously. As far as banks activities are concern it looks like bank is really working to provide maximum customer service which is one of the most important object of any bank. 3. For the purpose of attracting the customers bank has undertaken a deposit scheme of the higher rate of interest. it should try to invest it to earn maximum possible returns on it. Thus bank‟s social images are well settled. When an organization is having surplus funds. so that object is very well served by the bank.Findings:1. Management should understand that the deposits are the liabilities of the bank and advances are the real income of the bank. Goodwill which is the most precious asset. 2. it has seen that the management is not taking any serious step towards increasing the level of advances. ~ 58 ~ . At the stage when the bank is having a plenty of funds in their hands. Bank become famous but in the coming year‟s bank will have to pay the interests on their deposits. Bank has concentrated only on the part of deposits rather than advances which is the most important area of the whole banking. 5. 4. Rate growth of deposit is much higher than the rate of advances. is with the bank even the financial growth of the bank is very much satisfactory as the employees has got the bonus as their salaries.

It is suggested that the bank should concentrate on higher amount of advances. home equity loan. Thus the bank should concentrate more on these loans other than other than other types of clean loans. personal loan. 2. Advances should be profitable advances in the sense it should contain those advances which can be repayable in the specified time of period. educational loan. consumer loan. 3. rather than high amount of deposits.Suggestions:1. there are certain types of loans which I have mentioned in this project i. ~ 59 ~ .e. home loan. To attract the customer for availing advances.

Different types of loan like Personal loan.Conclusion:The study of project reveals that the Bank of Maharashtra ware in the analysis & interpretation of the project states that the bank provides various types of loan‟s & advances to the society. The bank makes various steps in reducing loss again the loan‟s & advances provided to the society. The Bank of Maharashtra play very important role in the development of rural areas by lending funds. As compare to the private financial organization the Bank of Maharashtra had more efficient and valuable changes in the facilities to the common people with less of charges. The overall study reveals back customer connect to the Bank of Maharashtra are made over satisfied with the bank. ~ 60 ~ . House loan. are made available by bank in the same manner crop loan for the farmer are provided as per the NABARD and RBI NORMS. Education loan etc. Consumer loan. The KISAN credit card facility is also made available to the farmer.