You are on page 1of 83

A COMPARATIVE STUDY WITH REFERENCE TO RELATED

BANK LOANS IN CHENNAI


PROJECT REPORT
(A Report submitted in Partial Fulfillment of the Requirements for the
degree of Master of Business Administration in
Pondicherry University)
Submitted by
Ms. ______________________
Enrolment No: _________________
MBA FINANCE

DIRECTORATE OF DISTANCE EDUCATION


PONDICHERRY UNIVERSITY
PONDICHERRY 605 014
(JUNE)

CERTIFICATE OF THE GUIDE


This is to certify that the project work titled A COMPARATIVE STUDY

WITH REFERENCE TO RELATED BANK LOANS IN CHENNAI is


a bonafide work of Ms. C. ESSTHER RANI Enrolment no: 0209370286
Carried out t in partial fulfillment for the award of degree of MBA Finance of
Pondicherry University under my guidance. This project work is original and not
submitted earlier for the award of any Degree/ Diploma or associateship of any
other University / Institution.

Signature of the Guide


DR.__________________

Place: Chennai
Date:

DECALARATION
I, Ms. C. ESSTHER RANI hereby declare that the project work titled A

COMPARATIVE STUDY WITH REFERENCE TO RELATED BANK


LOANS IN CHENNAI. is the original work done by me and submitted to the
Pondicherry University in partial fulfillment of the requirements for the award of
Master of Business Administration in Finance is a record of the original work
done by me under the supervision of DR.N.KALYANARAMAN.

Enrollment No: ____________

Signature of the Student

Date:
Ms.________________

ACKNOWLEDGEMENTS

I adore and honor the Holy Trinity for strengthening me, being with me to guide and
help me complete this research work successfully.

I am greatly indebted to my supervisor and guide DR.N.KALYANARAMAN,


Faculty, PULC Twinning Program for his invaluable guidance, support and
encouragement throughout the tenure of this work. I greatly appreciate his flexibility
towards my independent approach of this project. I thank him once again for his
invaluable suggestions.
I would also like to express my sincere thanks to my Program coordinator Prof. S.
Xavier Mahimairaj, MCom, M.Ed, M.Phil., MBA., PULC Twinning Program for his
invaluable support for the completion of the program.
I would also like to express my profound gratitude to Dr. Arokiyaswami Director
PULC Twinning Program and Rev. Fr. Albert Muthumalai, S.J., Principal, Loyola
College, for providing me with an opportunity to carry out this study successfully.
My deepest and loving gratitude goes to my beloved parents for their moral and
prayerful support.
My sincere thanks are due to all those who shared their invaluable time to provide the
required information for this research.
I profusely thank my friends who generously shared their valuable time for me to
complete the research success

ABSTRACT
A COMPARATIVE STUDY WITH REFERENCE TO RELATED
BANK LOANS IN CHENNAI.

This study aims at


To identified best contribution of loan in bank
Compared with other banks rate of interest
In this study for loan enragements, lending loan and interest rate calculation.
Hence the study was undertaken at this point of clear comparison on interest rate with
other banks.

Table of Contents
SL.NO
LIST OF CONTENTS
1.
LIST OF TABLES
2.

LIST OF DIAGRAMS AND CHARTS

3.

CHAPTER 1 INTRODUCTION

PAGE NO
A2
A3
1

1.1 INTRODUCTION OF TOPIC

1.2 OBJECTIVES OF STUDY

1.3 SCOPE OF STUDY

1.4 RESEARCH METHODOLOGY

10

1.5 LIMITATION OF THE STUDY

12

CHAPTER-2 COMPANY PROFILE

13

2.1 INDUSTRY PROFILE

15

2.2 PRODUCT PROFILE

20

CHAPTER-3 REVIEW OF LITERATURE

26

CHAPTER-4 DATA ANALYSIS AND


INTERPREATATION

28

CHAPTER-5 FINDING & SUGGESTIONS

65

CONCULATION

67

BIBLIOGRAPHY

LIST OF TABLES
Table
No.
1

Title

Page No.

REPCO Bank jewel loan V/S TNSC Bank jewel loan

32

REPCO Bank jewel loan V/S PANDIAN GRAMA Bank

33

REPCO Bank jewel loan V/S URBAN Bank jewel loan

34

REPCO Bank development loan V/S TNSC Bank business loan

36

REPCO Bank development loan V/S PANDIAN GRAMA BANK

37

38

REPCO Bank development loan V/S URBAN Bank business


loan
REPCO Bank secured loan V/S TNSC Bank

REPCO Bank secured loan V/S PANDIAN GRAMA Bank

41

REPCO Bank secured loan V/S URBAN Bank

42

10

Last four years revenue statement

44

11

2004 to 2007 loan details

47

12

No of loan did not finish with in duration

52

13

Bank loan bad debts in 2005 to 2007

54

14

Last four year bank loans

56

15

% of contribution in every loan

58

16

% of increase & decrease bank loans

64

A2

40

LIST OF CHARTS
CHART
TITLE
NO
1
Lost four year Revenue statement

PAGE .NO.
45

Growth of Income

46

Jewel Loans

48

Jewel Loan Special

49

Development Loan

50

Secured Loan

51

No of loan did not finish with in duration

53

Bank loan bad debts in 2005 to 2007

55

2004 - 2005 Loan contribution

60

10

2005 - 2006 Loan contribution

61

11

2006 - 2007 Loan contribution

62

12

2007 - 2008 Loan contribution in first quarter

63

A3

CHAPTER I

INTRODUCTION
9

CHAPTER-1
INTRODUCTION

1.1 INTRODUCTION OF TOPIC:

India has a well developed banking system. Most of the banking in India was
founded by Indian entrepreneurs and visionaries in the pre-independence era to provide
financial assistance to traders to trade, agriculturists and budding India industrialist.
Indian banks have played a significant role in the development of Indian economy by
lending finance to Indian industry.

While the RBI became a state owned institution from January 1 st 1949, the
banking regulation act was enacted in 1949 providing a framework for regulation and
supervision of commercial banking activity. The first step towards the nationalization of
commercial banks was the result of a report by the committee of direction of all India
Credit survey. The committee recommended one strong integrated state partnered
commercial banking institution to stimulate banking development in general and rural
credit in particular.

10

The cooperative banking system is an important constituent of the Indian financial


system. The cooperative banks in India play an important role in catering to the banking
needs of the rural population and of certain sections of the urban population as well. The
inadequacy of rural credit engaged the attention of the Reserve Bank and the Government
throughout the 1950s and the 1960s. The agricultural credit system as it has emerged has
been a product of both evolution and intervention.

REPCO bank is provided the loan in rehabilitating repatriates and customers through
following credit system in co-operative act. Banks provide the loan based on security
value. Governed by the Ministry of Home Affairs, Govt. of India.

The objective was to serve better the need of development of the conformity with
national priorities and objectives. Eleven years after nationalization of commercial
bank .The Government announced the nationalization of six more scheduled commercial
bank.

11

PRE-REFORM STATUS

While technically there was a competition between the banks and non-banks and
among bank substantially, competition was conditioned by policy as well as regulatory
environment common ownership by the government and agreement between government
of India as an owner and workers represented by the unions. Governed by the Ministry of
Home Affairs, Govt. of India.

REFORM MEASURES

The major challenge of the reform has been to introduce element of market incentive as
dominant factor gradually replacing the administratively coordinated planned action for
development. Such paradigm shift has several dimensions, the corporate government
being one of the important elements.

During reform period, the policy environment enhanced competition and provided greater
opportunity for exercise of what may be called genuine corporate element in each bank to
replace the element of coordinated the action of all entitled as join family to fulfill the
predetermined the priority

12

THE MEASURES TAKEN FOR REFORM WERE AS FOLLOWS

1) First greater competition was infused in banking system by permitting enter of private
sector banks to external loan to all sector and it is mainly focused on the repatriates &
customers

2) Second the reforms accord greater flexibility to the repco banking systems to manage
both of the pricing and quantity of resources for repatriates

3) To strengthen the banking system to cope up with the changing environment,


prudential standard has been imposed in a progressive manner in order to enhance the
loan to the repatriates

4) An appropriate legal, institutional and regulatory framework has been put in place for
the repatriates other sector markets.

13

BACK GROUND OF THE STUDY

Over the years people have observed that, a company first task is to create customers
but todays customers face a vast array of product and brand choices, prices and services.
Thus, the traditional marketing theory and practice have focus on attracting new
customers rather than retaining existing once. Today, however although attracting new
customers remain as an important task, the emphasis should also be towards retaining
current customers and to build profitable long term relationship with them, but at the
same time have to think about the expansion of the present market also through the
proper promotion.

Facing an expanding economy and a rapidly growing market, companies should expand
their markets for facing new challenges, competitive strategies and practices. Growing
markets meant plentiful supply of new customers. Organizations could keep filling the
marketing bucket with new customers are rising, so organizations should evolve efficient
methods to promote their products.
It means the entire stream of purchases that the customer would make over a life time of
patronage. The key to building everlasting relationship is the creation of superior
customer value and satisfaction, and it should be reflected on the promotional activities of
the product.

14

a customer might have different level of expectations. Here if the product services
match their expectations they may rank it good, if the services exceeds expectations they
may rank it excellent, if it is ordinary they may rank it moderate and if the services are
not at all good they may rank it poor, thus leading to loss of customers.

The researcher carried a work on standing of REPCO Bank .with regard to the loan
product. Thus survey is totally based on the selected banks.

This study also helped to get good suggestion from the customers.REPCO bank has 43
branches with operations spread all over India.

In order to get more competitive and attract a large base of customers, it is important for
service institutions to provide good quality service to the customer. Range and quality
would enable the bank to improve the efficiency of the service offered. The REPCO bank
has in the past used internal resources in assessing the quality of service offered. It is now
felt that a study among their customers conducted by external agent would be necessary
to gain customers satisfaction with the service offered.

15

NEED FOR THE STUDY

The project is a comparative analysis of the selected loan of the REPCO bank. this
project is carried out to find out the standing of REPCO loans compare to some selected
banks, which includes understand the product awareness and perception among target
customers, findings the features on which the sales force and bank should give more
importance and do a work to promote the product in the market. Thus, this project
becomes essential to get a competitive edge. Through this project an attempt has been
made to identify the explicit needs, attitude of the customers and promote the loan , as
they are the final judge of the services provided by the bank only when the bank is in
constant touch with its target customers.

16

1.2 OBJECTIVE OF STUDY

PRIMARY OBJECTIVE:

Study and analysis the factors consider for bank loans (Repco bank) to
granted jewel loan (1 year), jewel loan special (6 months), development loan
(business loan), and secured loan (property loan).

SECONDARY OBJECTIVE:

Study and analysis to the securities available of customer.

To study and analysis the repayable duration of the loan

17

1.3 SCOPE OF STUDY

To identify the best form of loan available in bank.

To provide loan based on customer conveniences.

The examine possibility of loan becoming bad and suggesting correct


measures.

18

1.4 RESEARCH METHODLOGY


RESEARCH DESIGN

Research in common parlance refers to search for knowledge. One can also define
research as a scientific and systematic search for pertinent information on a specific topic.
A research design is the arrangement of conditions for collection and analysis of data in a
manner that aim to combine relevance to the research purpose with economy in
procedure. In fact research design is the conceptual structure within which research is
conducted; it constitutes the blueprint for the collection, measurement and analysis of
data.

STATEMENT OF PROBLEM

This research is conducted to know the various ways to increase the loan product
through conducting comparative study with the product of the competitors and knowing
the bank report banks loan product. The study is also trying to find the standing of the
REOCO bank loan product in the market and suggest ways to make the product more
customers, oriented and effective. It is also going to help the organization to retain its
business and for further growth.

19

SOURCES OF DATA:

Datas:
The secondary includes the findings or the basic research already done by the
organizations. Beside, it also includes the appropriate material from newspapers, journals,
reports and books and internet.

Secondary Datas:

Audit report
Balance sheets
Company profile report

20

1.5 LIMITATION OF STUDY

To study and analysis all the loans but Time available is short (90days) so all
loans could not be fully analyses.

There is no sufficient time to meet the customer.

Did not collect the full information relating to current year.

21

CHAPTER II

COMPANY PROFILE

22

CHAPTER-2
COMPANY PROFILE

REPCO BANK Ltd. was commenced in the year 1969 by Govt. of India with the main
objective of rehabilitating repatriates from Burma and Srilanka. The Schemes are open to
all on admission as members of the bank so as to enable the bank serve its main objective
effectively. The bank is governed by the Ministry of Home Affairs, Govt. of India. Bank
after 1985to start a commercial banking service.
Bank only to provide financial service only for repatriates in previews. Multistate cooperative act 1985 bank was started commercial service. Banks provide the service in two
types of customers A (class) & B (class). A (class) customers is a share holder of the
bank, B (class) customer is other then repatriates share holders. Banks provide the service
mainly for repatriates. So bank give the some of the special benefits in rate of interest 1%
reduce all loan rates and 1% increases all deposit rates. Share capital of the bank
constitutes government investment.
The share capital was subscription by state government (Tamilnadu, Andrapradesh,
Karnataka, Kerala, Pondicherry, and individual repatriates members. Banking
administrated nominated by the government of India. The chief executive director looks
day to day banking operation.
Banks has now 44 branches cover the five states.

23

Equity capital:
The bank share capital has touched Rs 5.02 crors. Actual number of member as on
31-3-07 reach levels of 21183 A class member .the bank proposes to pay dividend of
23% for the year 2006-2007 amounts of 111.92 lakh. To the participating government and
A class repatriate members.

24

2.2 INDUSTRY PROFILE

The cooperative banking system is an important constituent of the Indian financial


system. The cooperative banks in India play an important role in catering to the banking
needs of the rural population and of certain sections of the urban population as well. The
inadequacy of rural credit engaged the attention of the Reserve Bank and the Government
throughout the 1950s and the 1960s. The agricultural credit system as it has emerged has
been a product of both evolution and intervention, and symbolizes the systems response
to the stimuli from continuing dissatisfaction with credit delivery
The Reserve Bank of India Act, 1934 has specific provisions relating to agricultural
credit. Section 54 of the RBI Act specifically authorized the creation of an Agricultural
Credit Department within the Reserve Bank to deal not only with the rural credit but also
with the long-term finance including refinance. Section 17 of the Act empowered it to
provide agricultural credit through state cooperative banks or any other banks engaged in
the business of agricultural credit. The foundation for building a broader credit
infrastructure for rural credit was laid down by the All India Rural Credit Survey (1954).
The Committee of Direction that conducted the survey recommended the creation of
National Agricultural Credit Fund, which was subsequently created by the Reserve Bank.
The Agricultural Refinance Corporation (ARC) set up by the Reserve Bank in 1963
provided funds by way of refinance, but credit cooperatives still did not function too well.

25

15

Decentralized credit planning through the Lead Bank Scheme was also introduced to
spearhead the credit allocation for agricultural lending.
In order to emphasize the developmental and promotional role assigned to the ARC in
addition to refinancing, the ARC was renamed as the Agricultural Refinance and
Development Corporation (ARDC) in 1975. Despite all these efforts, the flow of credit to
the agricultural sector failed to exhibit any appreciable improvement as the cooperatives
lacked resources to meet the expected demand. To solve these problems, the Regional
Rural Banks (RRBs) were set up in 1975. In order to strengthen the institutional credit for
agriculture and rural development, NABARD was set up on July 12, 1982. On its
establishment, NABARD took over the entire functions of the ARDC, the refinancing
functions of the Reserve Bank in relation to cooperatives and Regional Rural Banks
(RRBs).
The State Government and the Registrar of Cooperative Societies appointed by the State
are the main regulatory authorities for the cooperative societies that are operating only
within a State.
The regulation and supervision of the urban cooperative banks (UCBs) have been
brought within the ambit of the Reserve Banks statutory control under the Banking Laws
(as Applicable to Cooperative Societies) Act, which came into force from March 1, 1966.
The regulatory powers conferred on the Reserve Bank with regard to cooperative banks
are limited.

26

While the principles of supervision with regard to cooperative banks have been
formulated and implemented by the Reserve Bank in respect of UCBs under the Banking
Regulation Act, 1949, the Act does not apply to primary agricultural credit societies and
land development banks, thus leaving them under the regulatory purview of the State.
One important feature of providing agricultural credit in India has been the existence of a
widespread network of rural financial institutions.
The present structure of the rural financial institutions consists of a three-tier rural
cooperative credit institutions (Primary agricultural credit societies, District central
cooperative banks, and State cooperative banks), RRBs, Local area banks, urban
cooperative banks and branches of commercial banks. Some important issues related to
regulation and supervision of cooperative banks is discussed in this section.
The rural credit structure consists of many types of financial institutions as large scale
branch expansion was undertaken to create a strong institutional base in rural areas. The
number of various cooperative institutions at present is over 110,000. This has led to an
expansion in rural credit. However, the share of cooperative institutions credit to
agriculture has been declining with the share of commercial banks and RRBs increasing
during the 1980s and 1990s (Mohan, 2004a). This calls for a wider reach of the
cooperative credit institutions.
66 Instances such as the Madhavapura Mercantile Cooperative Banks failure brought to
the fore the need to have stringent regulatory control over the cooperative banking
system. In order to strengthen the supervisory mechanism, the Reserve Bank extended the

27

17

Off-site Surveillance System (OSS) to all non-scheduled UCBs having deposit size of
Rs.100 crore and above. A supervisory reporting system was introduced for the scheduled
UCBs since March 2001 as a first step towards setting up of OSS for all UCBs.
The capital adequacy norms have been introduced in a phased manner since March 2002.
Better risk management through avoidance of concentration of credit risk, off-site
surveillance for non-schedule UCBs and following up of KYC guidelines have also been
introduced to strengthen the UCBs.
A total ban has been imposed since October 2003 on grant of loans and advances to
directors of UCBs, their relatives and concerns in which they have interest with a view to
preventing certain irregularities. The Reserve Bank has also directed that UCBs should
undertake usual due diligence in respect of investments in non-SLR securities. The
Reserve Bank introduced a new system of grading of UCBs in April 2003, which is based
on their CRAR, level of net NPAs, record of losses and compliance with regulatory
environment. Similarly, a system of supervisory rating for UCBs under the CAMELS
model has also been introduced. Initially, it was implemented for scheduled UCBs but,
subsequently its simplified version was extended to non-scheduled UCBs in March 2004.
Notwithstanding the structural and cultural differences between UCBs and commercial
banks, the above measures suggest that the Reserve Bank has been exercising its
regulatory and supervisory powers to ensure that the cooperative credit structure is
strengthened on the lines similar to the regulation and supervision of commercial banks.

28

In sum, the Reserve Bank has been bestowing greater attention in recent years towards
strengthening of the regulation and supervision of the cooperative banking structure in
the country.
As a prudent step towards aligning the UCBs with the financial system, a Draft Vision
Document (2005) of the Reserve Bank seeks to rationalise the existing regulatory and
supervisory system; facilitate a focused system of supervision through enhancement of
technology; and to evolve mechanism to address the dual control. The future course of
action envisaged by the Reserve Bank is to remove operational irritants and to strengthen
the UCBs and align them with the commercial banks.

29

2.3 PRODUCT PROFILE

Banks provide 20 types of loans but analysis of study is fore leading loans following.
Jewel loan, Jewel loan special, development loan, secured loan.
This bank lends the maximum no of loans

1) JEWEL LOAN :
Loan maximum duration is within one year only. This type of loan is short period
only. Rate of interest 12.5% pa, minimum 15 days rate of interest to calculated.
Loan limit:
Maximum loan amount fix by head officers. Loan limit of the bank is Rs
700 per gram gold.
Appraisal of jewel:
Appraisal appointed by head office. Appraisal gets only commission based
on lone.
Appraisal process:

1. Touchstone testing
2. Nitric acid testing

30

3. Testing by filing
4. Water testing
5. Gold purity

CERTIFICATION VALUE OF GOLD:


1. Gross weight:
First cheek gold gross weights its total gold weight.
2. Net weight:
After cheek the gross weight to find net weight. The net
weight is to less stone and other dust in gross weight.
3. Purity value:
Purity value calculates the gold cerate and purity value.
4. Rate of per gram:
Purity value based to fix the rate of per gram vale.
2) Jewel loan special:
Loan maximum duration is very short period with in one six
months only. This type of loan is short period only. Rate of interest 12.5% pa, minimum 15
days rate of interest to calculated.

Loan limit
Maximum loan amount fix by head officers. Loan limit of the bank is Rs
750 per gram gold.

31

Appraisal of jewel:
Appraisal appointed by head office. Appraisal gets only commission based
on lone.
Appraisal process:
1. Touchstone testing
2. Nitric acid testing
3. Testing by filing
4. Water testing
5. Gold purity

CERTIFICATION VALUE OF GOLD:


1. Gross weight:
First cheek gold gross weights its total gold weight.
2. Net weight:
After cheek the gross weight to find net weight. The net weight
is to less stone and other dust in gross weight.
3. Purity value:
Purity value calculates the gold cerate and purity value.
4. Rate of per gram:
Purity value based to fix the rate of per gram vale.

32

3) Development loan
The development loan maximum repayable duration is four year only. The
interest on loan amount must be declared only on the basis of period of repayment
made by the customer. Security value based to give the loan. Bank first cheek the
legal pros edger and formalities and following thinks.

Whom:
Development loan may be granted to borrowers for improving business purpose.
Loans provide all type of legal business in processing of this business and existing
business.
1) Trade
2) Business
3) Industry group
4) Starting new business in same other branches.

Procedure of sanction the loan:


Application for loan will be consider by the loan sanctioning authority with
reference to the viability of the project. Bank verifying following all documents.

33

Documents:
1) Last fore year audit report
2) Ownership of business
3) Municipality or corporation license
4) Evidence of the material purchase
5) Cash & fund flow statement
6) Printer balance sheet in five years
7) Machine detail record
8) Sales & purchase account register
9) Rent receipt

To verify all related document inspection officer. After verify to give loan its a branch
manager response. Loan is based on security and turnover of the income states only to
provide.
Limit of loan:
Loan limit is fixing 80% of security value. Security values calculate register value
only. Limit of loan to fixing by head officer only.
Rate of interest:
Below 2 laks loan = 17.5 %

34

Above 2 laks loan = 18 %

5) Secured loan:
This loan is a long term loan. The repayable period is 5 to 10 years.
Interest rate and duration period are determined on the basis of the loan amount. The
loan amount is varying from one customer to another customer on the basics of the
securities offered by the customer against the loan.
REPCO Bank to give Security loan provide only for bank members. Security
value based to grant the loan, in is following rules under the head of the banking norms.

Procedure of sanction the loan:


Application for loan will be consider by the loan sanctioning authority with
reference to the viability of the project. Bank verifying following all documents.
Documents:
1)

Owner ship of the land

2)

Land or property document

3) Land valuation report


4) Registration document
5) Security document
Limit of loan:
Loan limit is fixing 80% of security value. Security values calculate register value only..
Rate of interest:
Rat of interest is 16% per annum

35

CHAPTER III

REVIEW OF
LITERATURE

36

CHAPTER-III
REVIEW OF LITERATURE

The main purpose of literature review is to examine recent or historically significant


research studies, company details, or industry reports, which act as a basis for the
proposed study. Being find out the data related to literature and relevant secondary data
from a comprehensive perspective, moving to more we can conduct the proposed study
and can avoid the faults in the need for the proposed work to appraise the short coming
and information gap in secondary data sources. This analysis helps to go beyond
scrutinizing the available of or conclusions of past studies and their data, to examine the
accuracy of secondary sources, the credibility of the sources, And appropriations or
earlier studies.

MEDHOD OF REVIEW I HAVE DONE

Websites, books, journals, and other relevant bank reports conduct this project. In
internet, Google search engine was mainly used to collect information from different
websites for this project. This help to get an idea about the research topic. The websites
of the banks such as REPCO bank, RBI bank, and TNCP bank helped to me to get a lot of
information about the banks and their different loan products.

37

By going through various websites, books, and other internal audit records, it gave me
more information about the banking industry, REPCO bank and the project topic. It also
helped to the earlier similar research, conclusion derived from the earlier researches etc.
the internet facilitated more to know about the various researches conducted by various
organizations. It even helped in preparing the tools.

38

CHAPTER IV

DATA ANALYSIS
And
INTERPRETATION
39

CHAPTER-IV
ANALYSIS AND INTERPRETATION

TOOLS USING FOR ANALYSIS:


Comparative statement analysis:

Comparative statement is the business to prepare the information


which access direction change in position .In this statement figure of two or more periods
of placed side by side facilitates Comparison.

Compare with last fore year statement to analysis the datas

Percentage method:

When there are more series of data this percentage method is used to compare the
relation ship.

No of respondents
% of respondents =

-------------------------Total no of respondents

40

* 100

DATA ANALYSIS AND INTERPRETATION

Introduction:
In this comparative analysis, for jewel loans, jewel loan special, development loan ,
secured loan of REPCO bank are compared with other banks rate of interest . The loan
product comparative analysis and percentage method to use in the calculation. The data
for comparison are obtained through secondary data collection. The features, benefits and
interest charges of each loan product of REPCO bank are comparing with other
competitive banks.

To find best loan in the bank, and calculate the comparative analysis and percentage
method.

41

THE TAMIL NADU STATE APEX CO-OPERATIVE BANK LTD.


CHENNAI

The Cooperative Banks functioning in Tamil Nadu are fulfilling the credit requirements
of the farmers, weavers, rural artisans, consumers of urban area. These institutions are
known as Cooperative Credit Institutions. The Coop. institutions are functioning under
two categories. They are: long-term coop. credit institutions, short-term coop. credit
institutions. The coop. credit institutions functioning under short-term credit structure are
of three-tier in nature. At the grass root level, the Primary Agricultural Coop. Banks
(PACBs) is functioning at village level. At the district level, the Central Coop. Banks
(CCBs) is functioning with the headquarters at district capital and their branches in
various places of the districts concerned. At the apex level, the Tamil Nadu State Apex
Coop. Bank Ltd., (TNSC Bank) is functioning at Chennai which co-ordinates the entire
short- term coop. credit structure.
The Tamil Nadu State Apex Co-operative Bank Ltd., commenced its business during
November 1905 as an Urban Coop. Bank. It was subsequently changed into a District
Central Coop. Bank during July 1920. At present, the Bank is functioning at Chennai
with 44 branches, an Extension Counter and H.O. TNSC Bank is guiding the Dist.
Central Coop. Banks / Primary Agricultural Coop. Banks in their functioning and it is
playing a major role in the coop. movement of Tamil Nadu.

42

TNSC Bank was formed in the year in which the coop. movement of Tamil Nadu was
formed. As such, the Bank has been serving the people of Tamil Nadu for a centenary for
their economic development. As far as Indian coop. movement is concerned, the Bank
has commenced its business from the very next year of the formation of coop. movement
in India. TNSC Bank is the first ever State Coop. Bank having the credit of celebrating
the centenary year.

TNSC Bank has got the license of Reserve Bank of India to carry on the banking
business. TNSC Bank is a Scheduled Coop. Bank and has been listed under the Second
Schedule of RBI Act. TNSC Bank is a member of the Deposit Insurance and Credit
Guarantee Corporation (DICGC) and is an insured coop. bank as per DICGC Act. TNSC
Bank has got the privilege of having its share capital by the Government of Tamil Nadu.
TNSC Bank has been under close supervision and monitoring of the higher financing
agencies, viz., RBI, NABARD. Periodical inspection and supervision are done by
NABARD as per RBI guidelines. Government of Tamil Nadu is reviewing the
performance of the Bank periodically.

TNSC bank rat of interest


Jewel loan

= 10% pa

Loan an per gram = 600 Rs


Development loan rate of interest = 16 %

43

COMPARISON OF JEWEL LOAN


TABLE 1
REPCO Bank Jewel Loan V/S TNSC Bank Jewel Loan

Name of the

Minimum of

Rate of

Loan

loan

loan per gram

interest

period

REPCO Bank

Jewel Loan

Rs 700

12%

1Year

TNSC Bank

Jewel Loan

Rs 600

10%

1Year

Banks

REPCO Jewel Loan and TNSC Bank Jewel Loan are popular loans of both the
Banks. The REPCO Bank rate of interest is 12% per annum. But TNSC Bank rate of
interest is 10%. Both Banks maximum period of Jewel loan is 1Year. Compare with both
banks REPCO Bank is charging 2% high rate of interest.
REPCO Bank provide maximum lone of Rs 700 per gram, but TNSC Bank
provide only Rs 600 per gram of maximum limit. Compare with two banks REPCO Bank
gives Rs 100 more than TNSC Bank. Both Banks are giving the minimum loan amount
5000.
Compared with two banks REPCO Bank charges high rate of interest in 2% high.

TABLE 2
44

REPCO Bank Jewel Loan V/S PANDIAN GRAMA Bank Jewel Loan

Name of the

Minimum of

Rate of

Loan

loan

loan per gram

interest

period

Jewel Loan

Rs 700

12%

1Year

Jewel Loan

Rs 550

11%

10 Months

Banks

REPCO Bank
PANDIAN
GRAMA
Bank

REPCO Jewel Loan and PANDIAN GRAMA Bank Jewel Loan are the popular
loan both the Bank. The REPCO Bank rate of interest is 12% per annum and maximum
loan period is 1 Year. But PANDIAN GRAMA Bank rate of interest is 11% and
maximum loan period is 10 Months. When compared with both banks REPCO Bank
charging 1% high rate of interest.
REPCO Bank provide maximum lone of Rs 700 per gram, but PANDIAN
GRAMA Bank provide only Rs 550 per gram of maximum limit. When Compare with
two banks REPCO Bank gives Rs 150 more than PANDIAN GRAMA Bank. REPCO
Bank is giving the minimum loan amount Rs 5000, But PANDIAN GRAMA giving the
minimum loan amount Rs 4000.
Compare with two banks REPCO Bank charge high rate of interest,
That is 1% high.
TABLE 3
REPCO Bank Jewel Loan V/S URBAN Bank Jewel Loan
45

Name of the

Minimum of

Rate of

Loan

loan

loan per gram

interest

period

Jewel Loan

Rs 700

12%

1Year

Jewel Loan

Rs 650

11%

1Year

Banks

REPCO Bank

URBAN
Bank

REPCO Jewel Loan and URBAN Bank Jewel Loan are popular loan of both the
Bank. The REPCO Bank rate of interest is 12% per annum. But URBAN Bank rate of
interest is 11%. Both of Banks maximum period of Jewel loan is 1Year. Compare with
both banks REPCO Bank charging 1% high rate of interest.
REPCO Bank provide maximum lone of Rs 700 per gram, but URBAN Bank
provide only Rs 650 per gram of maximum limit. Compare with two banks REPCO Bank
gives Rs 50 more than URBAN Bank. Both Banks are giving the minimum loan amount
Rs 5000.
Compared with two banks REPCO Bank charge high rate of interest,
That is 1% high.

In this Comparative analysis we find than comparison with other banks REPCO Bank is
charging high rate of interest. At the same time REPCO Bank provides maximum lone of
Rs 700 per gram compared with other selected banks. All selected banks to maintain of
loan duration on 1 year and PANDIAN GRAMA Bank maintains is 10 months only.
46

TABLE 4
COMPARISON OF BUSINESS LOAN

REPCO Banks development loan V/S TNSC Bank business loan

47

Maximum of
Bank

Name of loan

Rat of interest
loan amount

Development
REPCO Bank

80% of security
18%

loan

value
70% of security

TNSC Bank

Business loan

16%
value

Here I have taken the basic BUSINES LOAN of selected banks for the comparison.
Development loan of the REPCO Bank and business loan of the TNSC Bank. Both banks
provide loan only for business purpose. REPCO Bank charge 18% rate of interest, but
TNSC Bank charge 16% rate of interest. Both the banks provide loan based on security
value. REPCO Bank to give the maximum loan is 80% of security value TNSC Bank to
give the maximum loan is 70% of security value.
REPCO Bank provides loan only to existing business only but TNSC Bank to give to
new and existing business.

TABLE 5

REPCO Banks development loan V/S PANDIAN GRAMA Bank business unit loan
Bank

48

Name of loan

Rat of interest

Maximum of

loan amount
Development
REPCO Bank

80% of security
18%

loan

value

PANDIAN

Business unit

70% of security

GRAMA Bank

loan

18%
value

Development loan and business unit loan are the very familiar loan in both banks. Both
banks provide loan only for business purpose. REPCO Bank charge 18% rate of interest,
PANDIAN GRAMA also charge same rate of interest. Both the banks provide loan based
on security value. REPCO Bank to give the maximum loan of 80% of security value
PANDIAN GRAMA Bank to give the maximum loan is 70% of security value. Two
banks provide loan only to existing business only.
Of the two banks REPCO Bank to highly charge 1% rate of interest when compared to
PANDIAN GRAMA Bank.

TABLE 6
REPCO Banks development loan V/S URBAN Bank business loan
Maximum of
Bank

Name of loan

Rat of interest
loan amount

49

Development
REPCO Bank

80% of security
18%

loan

value
60% of security

URBAN Bank

Agri loan

8%
value

REPCO Bank provides business loan is development loan for business development
purpose. But URBAN Bank provide business loan only for agriculture purpose. REPCO
Bank is to charge 18% rate of interest, URBAN Bank 8% rate of interest to be charge.
Both the banks provide loan based on security value. REPCO Bank to give the maximum
loan is 80% of security value URBAN Bank to give the maximum loan is 70% of security
value.
Of the two banks REPCO Bank charge 10% rate of interest compare with URBAN Bank.
URBAN Bank mainly concentrates on farmers so to give low rate of interest. REPCO
Bank provides loan for commercial purpose so as to get high rate of interest.

In this Comparative analysis to find comparison with other banks REPCO Bank to charge
high rate of interest. At the same time REPCO Bank provide maximum lone of 80% of
security value compared with other selected banks. All selected banks to provide loan for
business purpose, developing business, and start new business. REPCO Bank collected
50

loan from customer on EMI. Bank provide loan on GOVT value to be calculated. REPCO
Bank couldnt give for new business; other banks give to the new business.

TABLE 7
COMPARTIVE OF SECURED LOAN
REPCO Bank secured loan V/S TNSC bank

51

Maximum of
Bank

Name of loan

Rat of interest
loan amount

REPCO Bank

Secured loan

18%

80%

TNSC Bank

Property loan

16%

80%

Here I have taken the basis of SECURED LOAN from selected banks for the
comparison. SECURED loan of the REPCO Bank, and PROPERTY loan of the TNSC
Bank. Both banks provide loan only for buying new property. REPCO Bank charges 18%
rate of interest, but TNSC Bank charges 16% of rate of interest. Both the banks provide
loan based on security value. REPCO Bank is to give the maximum loan of 80% of
security value TNSC Bank also gives the maximum loan of 80% of security value.
When compared to analysis of the two banks REPCO Bank charges high rate of interest.

TABLE 8
REPCO Bank secured loan V/S PANDIYAN GRAMA Bank

52

Maximum of
Bank

Name of loan

Rat of interest
loan amount

REPCO Bank

Secured loan

18%

80%

TNSC Bank

Property loan

16%

70%

Security loan and property loan are provided only for buying new property or buying new
land. REPCO Bank charges 18% rate of interest, PANDIAN GRAMA charges 16% rate
of interest. Both the banks provide loan based on security value. REPCO Bank is to give
the maximum loan of 80% of security value PANDIAN GRAMA Bank is give the
maximum loan of 70% of security value. Two banks lending loan only buy new property.
Of the two banks REPCO Bank to charge 2% rate of interest compared to PANDIAN
GRAMA Bank.

TABLE 9
REPCO Bank secured loan V/S URBAN Bank

53

Maximum of
Bank

Name of loan

Rat of interest
loan amount

REPCO Bank

Secured loan

18%

80%

12%

60%

Secure property
URBAN Bank
loan

Security loan and property loan are provides only for buying new property or buying new
land. REPCO Bank charges 18% rate of interest, URBAN Bank charges 12% rate of
interest only. Both the banks provide loan based on security value. REPCO Bank is to
give the maximum loan of 80% of security value URBAN Bank to give the maximum
loan 60% of security value. Two banks lending loan only to buy new property of the two
banks REPCO Bank is to charge 6% rate of interest compared to URBAN Bank.

In this Comparative analysis to find comparison with other banks REPCO Bank is to
charge high rate of interest. At the same time REPCO Bank provides maximum lone is
80% of security value compared with other selected banks. All selected banks to provide
loan for buying new land or property. REPCO Bank was collected loan from customers to
EMI. Bank provides loan on GOVT value to be calculated.
54

REPCO Bank loans compared with other selected banks loan interest is high in all
type of selected loans. Jewel loan, development loan, secured loan are the maximum loan
limit is high compared with other selected banks.

TABLE 10
Previous four years revenue comparative statement

YEAR

55

REVENUE
IN Lakhs

INCREASE
IN Lakhs

% OF INCREASE

2003-2004

5870

2004-2005

6822

2004-2005

6822

2005-2006

8343

2005-2006

8343

2006-2007

10684

952

16%

1521

22%

2341

28%

The bank revenue increased in last four year. Compare to the last fore year statement.
Revenue is increased in 952 lakh, 1521lakh, 2341 lakh respectively.

CHART 1

COMPARITIVE STATEMENT OF BANK REVENUE

56

CHART 2

GROWTH OF THE INCOME


57

TABLE-11

2004 to 2007 all loan details in thousand


58

YEAR
PARTCULAR
2004-2005

2005-2006

2006-2007

2007-2008

Jewel loan

24388

36638.65

37542.5

5818.3

Jewel loan
special

9970.3

12514.8

42694.1

18776.1

Development
loan

17605

17268

18348.223

2025

Secured loan

47697.4

54030.5

43828.8

12134.8

Inference:
From the above table shows last fore years loans in thousands. 2004 to 2008
selected loans of jewel loan, jewel loan special, development loan, and secured loan
reports in thousands. Loan particulars are given in the 1st quarter of 2007-2008.

CHART 3

59

CHART 4

60

CHART 5

61

CHART 6

62

TABLE-12
63

NO. OF LOAN THAT DIDNOT FINISH WITH IN YEAR

Particular

Year
2005-2006

Degreases

3%

13%

8%

1.5%

Year
2006-2007

Jewel loan

47

51

Jewel loan special

70

51

Development loan

12

24

Secured loan

16

18

145

144

Total

Increases

In a particular year some of customers didnt finish loan in the particular period. The
minimum customer could not pay development loan and secured loan with in scheduled
time. Jewel loan has been decrease to 13% in 2005 and 2006. But other loans have been
increased

64

CHART 7

NO. OF CUSTOMERS DIDNOT FINISH WITH IN A


DURATION

65

TABLE-13
Bad debt of 2005-2006 & 2006-2007 bank loan

Particular

Year
2005-2006

Year
2006-2007

Jewel loan

24

19

Jewel loan special

37

30

Development loan

Secured loan

Inference:
The above table shows that bad debt position of loans in last two year. The bad debt of
jewel has been decreased from 37 to 30.

66

CHART 8
Bad debt of 2005-2006 & 2006-2007 bank loan

TABLE-14

67

Last four years bank loan in thousands

TYPES OF
LOAN

2004-05

2005-06

2006-07

2007-08

JEWEL LOAN

24388

36638.6

37542.5

5818.3

JEWEL LOAN
SPECIAL

9970.3

12514.8

42697.1

18776.1

DEVELOPMENT
LOAN

17605

17268

18348.2

2025

SECURED
LOAN

47697.3

54030.5

43825.8

12534.8

HOUSEING
LONE

2565.4

1473.3

735.6

SALARY
LOAN

635.1

2482.5

1626

83.9

VEHICEL
LOAN

47.8

83.6

132

34

EDUCATION
LOAN

76.5

93.3

OD LOAN

876

1163

1465

210

CONSUMER
LOAN

17.6

12.3

48

LEASE LOAN

MEDICAL
LOAN

MICRO
FINANCE

433.6

2607

3860

834

LOAN ON
DEPOSIT

4363

5672.6

5997

148

Inference:

68

REPCO Bank varies type of loan lending to customer. They give maximum of loan for
secured loan and development loan respectively. 2007-2008 is an only 1 st quarter loan
amounts (April-June).

TABLE - 15

69

% of contribution in every year

TYPES OF
LOANS

2004-05

2005-06

2006-07

2007-08

JEWEL LOAN

22%

27%

23%

14%

JEWEL LOAN
SPECIAL

9%

9%

27%

46%

DEVELOPMENT
LOAN

16%

13%

11%

5%

SECURED LOAN

44%

40%

27%

30%

HOUSEING LOAN

2.5%

1%

0.5%

SALARY LOAN

0.6%

0.2%

1%

0.2%

VEHICLE LOAN

0.2%

0.5%

0.1%

EDUCATION
LOAN

0.2%

0.2%

OD LOAN

1%

0.2%

1%

0.5%

CONSUMER LOAN

0.2%

0.1%

LEASE LOAN

MEDICAL LOAN

MICRO FINANCE

0.3%

2%

2.5%

2%

LOAN ON DEPOSIT

4%

4%

4%

0.4%

Inference:

70

REPCO Bank providing varies type of loans to the customers. They give maximum
preference to secured loan and development loan respectively. Compare with other loans
more loan amount provided to jewel loan special 46% of total amount within first quarter
(2007-2008).

CHART 9
71

CHART 10
72

CHART 11
73

CHART 12

74

TABLE-16

75

% bank loans
Years

Jewel loan

2004-2005
2005-2006
2006-2007
2007-2008
Total

20%
30%
31%
19%
100%

Jewel loan
special
7%
9.5%
30%
30.5%
100%

Development
loan
29%
28%
30%
13%
100%

Secured loan
24.5%
28%
22.5%
25%
100%

% of increase & degreases bank loans

Year

Jewel loan

Jewel loan
special

Development
loan

Secured
loan

2005-2006

10%

2.5%

-1%

4.5%

2006-2007

11%

20.5%

12%

-5.5%

2007-2008

-12%

23.5%

-17%

2.5%

76

CHAPTER V

FINDING &
SUGGESTIONS

77

CHAPTER-V
FINDINGS & SUGGESTIONS
FINDINGS
The major finding in this project, it is found then comparative analysis of the bank
loans in REPCO Bank is charging high rate of interest.

They are not providing loans to start the new business and entrepreneurs.

They are providing property loans based on the government value of the property.
So the customer will get small amount of loan.

They took long time to process and provide loan.

It is found in the comparative analysis of the bank jewel loan special growth is
25% increasing compared with last 3 years. At the same time jewel loan is slowly
down at 12% compared with last 2 years.

It is found in the comparative analysis of the bank DEVELOPMENT LOAN is


down at 17% compare with last year.

It is found than the trend analysis of the bank maximum amount of loan provided
to the SECURED LOAN.

78

SUGGESTIONS

Competitive banks are receiving low rate of interest. So, they must decrease rate
of interest.

All other banks have to give new business and entrepreneurs loans. So, they must
give these types of loan.

Property loans must to give a based on normal value of the property.

They must increase processing speed and provide loans quickly.

Compare with previous years, 6 months jewel loan special is increased compared
with 12 month jewel loan. So they will concentrate 3 months jewel loan.

Finally, bank must increase the different types of schemes in secured loans.

Bank must split the amount in to other loans.

79

CHAPTER VI

CONCLUSION
80

CONCLUSION

REPCO Bank having lot of loan schemes, but they concentrate on some particular loans
like secured, jewel Loan, Not concentrate on some other loans like lease, vehicle,
consumer loan and etc. They should create attractive schemes for loan based on customer
needs and, if they reduce the rate of interest compare with other competitive bank rates,
they can achieve numerous end users.

81

CHAPTER VII

BIBLIOGRAPHY
82

BIBLIOGRAPHY
1) C.R. Kothari, research methodology New Delhi, wisva prakasan, 1990, second
edition
2) S. N. Maheswari. Financial management New Delhi 2000 third edition

Journals & Reports


1. REPCO Bank annual reports, Non 2007
2. bank audit report
3. previous project reports

WEB-SITE
www.repcobank.com
www.tnsebank.com
www.pandianbank.com
www.finance.indiamart.com
www.google.com

83
68