A

DISSERTATION REPORT

ON

Customer Satisfaction regarding consumer loan with special

reference to PUNJAB AND SIND BANK

Submitted To: Submitted By:

MR. NAVEEN CHHABRA RAJ KISHOR CHAND

UTTRANCHAL INSTITUTE OF MANAGEMENT DEHRADUN

 ACKNOWLEDGEMENT

It gives us immense pleasure to present this report, a written form of

the practical experience we have undergone. We want to utilize this
opportunity to express our heartfelt gratitude to all those who helped us in
making this project work a success. We are greatly indebted to them for
taking great pains in guiding us.

We shall be failing in our duty if we do not convey our sincere thanks

to our teacher MR. NAVEEN CHHABRA, for inspiration and guidance about
Research Methodology.

(RAJ KISHOR CHAND)

 EXECUTIVE SUMMARY
Today, banks are an integral part of any country. These banks are
globally embracing technology in the areas of products and services. In our
developing country everything is changing very fast. In order to fulfill the
changing needs depository system was introduced in Indian market too.

The banks with their vast network occupy a very strategic position in
the financial system and have an important role to play in providing credit to
customers.

This report discusses various aspects related to consumer loan like the
procedure for availing loan, various documents required, eligibility criteria,
customer satisfaction regarding consumer loan schemes. It also covers
different types of frauds in the area of consumer finance. The subject has
been discussed with special emphasis on Punjab and Sind Bank.

An attempt has been made to make it a genuine study but there are
some chances of mistakes.
 OBJECTIVES OF THE STUDY

1. To study the procedure of availing Consumer Loan.

2. To study the customer satisfaction regarding Consumer Loan.

3. To study Consumer Loan scheme offered by Punjab and Sind Bank.

4. To know different kinds of frauds pertaining to Consumer Loan.

 RESEARCH METHODOLOGY

PROJECT DEFINITION
A loan is debt instrument that entails the redistribution of financial
assets over time, between the lender and the borrower. Acting as a provider
of loans is one of the principal task for financial institutions. Banks loans are
generally funded by deposits. This project is an attempt to study consumer
loans schemes offered by Punjab and Sind Bank and level of customer
satisfaction regarding these schemes.

RESEARCH DESIGN
A research design is a conceptual structure within which research is
conducted. A descriptive research study is done, which is concerned with
describing the characteristics of a particular individual or a group.

SAMPLE DESIGN
i. Population
To study the satisfaction of customers regarding consumer loans the
customers of Punjab and Sind Bank who have availed consumer loan
up to Rs. 5, 00,000 constitute my universe.
ii. Sample Size
Sample size for the study is 30 Consumer loan customers of the bank.
iii. Sampling Technique
In this study Judgment Sampling technique has been used to draw
sample from universe.
DATA COLLECTION DESIGN
i. Sources of Data
Both primary and secondary source of data has been used to collect
information.

Primary data was collected of Punjab and Sind Bank, Sector 17-C,
Chandigarh. The data explained about different products/services
being offered by their bank. Questionnaire was prepared to study the
customers satisfaction regarding Consumer Loans schemes offered
by the bank (questionnaire is attached as annexure and interpretation
is given).
Secondary data was collected by making extensive use of the
internet. The data was also collected from various books, journals,
publications and annual report of the bank.

ii. Technique of Data Collection

Data was also collected by personally interviewing the customers of
the bank and through questionnaire.

DATA ANALYSIS AND INTERPRETATION

In order to extract meaningful information from the data, analysis of
the data was done. Analysis was done by using certain statistical tools like
bar graphs, pie-charts, percentage and from these analysis interpretations
were drawn.
SCOPE OF STUDY
There are four types of banks operating in India. These are:-

Public sector banks

Private sector banks

International banks

Co-operative banks

Under these categories there are a number of banks. For the purpose of this
project, we have chosen The Punjab and Sind Bank, which is a public sector
bank and provides many facilities to the customers.

LIMITATIONS OF THE STUDY

The project suffers from the following limitations:

1. Consumer loan customers of only Punjab and Sind Bank have been
considered.

2. The sample size is small, i.e. only 30consumer loan customers of

Punjab and Sind Bank were interviewed.

3. The concerned officers were at times not easily forthcoming with the
detailed information.

4. Many a time the data collected from various sources was

contradictory.

5. Customers are not ready to give detailed information about them.

 CONCEPTUAL FRAMEWORK OF BANKS
BANKS

In modern age, banking constitutes the fundamental basis of economic

growth. Earlier the function of bank was restricted to accepting deposits and
advancing loans to the general public. But now the definition of bank has
changed. It refers to an institution that deals in money. Besides dealing in
money, banks these days perform various other functions like credit
creation, agency function, general service, etc. Banks can now be called the
nerve-centre of the countrys capital market, industrial as well as trading
activities

ROLE OF COMMERCIAL BANKS

Banking system of an economy contributes a great deal in the process

of its economic development. The commercial banks play a significant role
in the economic development of the country. They collect idle savings of the
people and invest them into productive activities. Therefore they help in
accelerating the process of capital formation. Banks also take part in capital
markets by providing long term advances and finance to the industry,
agriculture, small scale industries, exporters, traders, etc. Commercial banks
provide service to the economically backward areas.

In ancient times the scope of banks was limited to the system which
involved the payment of an amount of money by draft and the demand of
money. The only function of the banks was to lend money and charge
something for the same. Now it does not refer only to a particular place of
lending and depositing money but it also acts as an agent which looks after
various financial problems of its customers.
FUNCTIONS OF MODERN BANKS

Commercial banks are involved in diversified activities and perform

varieties of functions like:

Accepting deposits (saving bank deposits, current deposits, fixed

deposits)
Advancing of loans (overdrafts, loans, cash credits, discounting bills)

Agency services which the modern banks render to the individuals or

to the business institutions as an agent. Banks usually charge little
commission for providing these services.

It also provides other services like issue of personal and commercial

letters of credit, help in the transactions of foreign exchange business.

BANKING IN THE HIGH TECH ENVIRONMENT

At a time when banking all over the world is undergoing a radical

transformation due to all pervasive use of information technology then it
must respond to the fast changing needs of the financial system and should
also become proactive and play the role of a Change Agent and bring
about a Skill Revolution in the banking industry.

Change in Financial System

Financial markets throughout the world have witnessed changes

during the past two decades. Deregulation and liberalization in the financial
sector have stimulated financial innovations. Breathtaking developments in
the technology of telecommunications and electronic data processing have
further accelerated these changes. As a sequel to these changes the
difference between banking and non-banking institutions have become very
thin. In the changed millennium the functioning of the financial markets has
given rise to some concerns. There is a fear that the state of the financial
markets is now more risky than in the past. In a technologically integrated
world the chances of systematic risk increases and because of the intense
competition that the banks have to face, both as a result of the growth of the
non banking financial institutions as well as securitization , it is feared that
the quality of the bank loans may have suffered.

IT and Banking

The new technology has altered the traditional ways of doing

business. Customers can view accounts, get account statements, transfer
funds, purchase drafts by making just a few keypunches. Availability of
ATMs and plastic cards to a large extent avoid customers going to branch
premises for cash. The networks have helped to automate the funds transfer
thus resulting in a more efficient payment system. Today, the transactions of
all banks have been fully computerized and the banks have moved into the
direction of inter-branch and inter-bank connectivity. In effect the banking
industry is finding its use in five key areas:

Convenience in product delivery and access.

Managing productivity and performance.
Product design.
Adapting to market and customer needs.
Access to customer markets.
For the Indian banking sector these developments are of real interest.
NEW CHALLENGES FACING BANKS
The functions of banks will increase under competitive pressure.
These may emanate from within the banking system as well as from non
banking institutions. A greater overlap in product coverage between
commercial banks and non-banking intermediaries will occur. Thus, both on
the liability and assets sides, banks will face increasing competition.

Banks should be willing to offer products to savers, which are

competitive in terms of both price and service. On the lending sides the
effort of the corporate to seek directly from the market will also have an
impact on the asset distribution of banks. Competition will also compel
banks to keep the interest spread to minimum and this context bank can earn
enough for them only by reducing the proportion of non performing assets.
Banks will also have to pay attention to market segmentation and greater
specialization in different niches of the markets.
 BANK PROFILE

History of the Bank

In 1908, luminaries like Bhai Vir Singh, Sir Sunder Singh Majithia
and Sardar Tarlochan Singh came up with the idea of establishing Punjab
and Sind Bank for the up-liftment of the weaker section of the society. The
bank was founded on the principle of social commitments to raise the
standard of living of the poor. It was started as a single branch in Hall
Bazaar, Amritsar. Decades have gone by; even today Punjab and Sind Bank
stands committed to honour the social commitments of the founding fathers.
To start with the bank had its branches in Gujranwala, Lahore, Rawalpindi
and Layalpur. The bank extended its helping hands to Punjabis. The bank
also contributed its rights to serve social cause. The bank helped many
educational institutes to come up. The bank also worked for growth of
Punjabi language and Punjabi culture.

The partition of the country in 1947 caused a heavy loss to the

Punjabis in general and Punjab and Sind Bank in particular. Out of the total
ten branches which the bank had in undivided Punjab, eight were in the area
now forming part of Pakistan. Only two branches namely registered office at
Amritsar and another branch at Ludhiana were in India. The head office of
the bank tried its best to recover the valuable from branches left in Pakistan
but unfortunately nothing substantial could be salvaged.

The period from 1968 to 1978 could truly be called a golden era of
Punjab and Sind Bank. This was a period of rapid growth and
achievements. In this decade, the bank achieved tremendous results in all
spheres banking. From a meager figure of Rs. 5.39 crores of deposit in 1968,
the bank touched the mark of Rs. 150.31 crore in 1975 in a single year and
number of branches increased to 356 besides six extension counters.

The bank continued unabated on its branch expansion programme and

in the year 1979 alone the bank opened 81 new branches. The bank opened
400th branch on 17th December 1976 at Amritsar, the city where the bank
was founded in 1908. The bank which was operation mainly in the state of
Punjab and in a small way in Delhi, Uttar Pradesh and Haryana, spread its

wings all over the country. The bank had also opened its branch in South
Hall, London in May 1977. This was a matter of pride for the institution that
it was amongst the first in private sector banks who were allowed by RBI to
open an office there. On 16th April 1980, the bank was nationalized along
with five other banks.

VISION AND MISSION

Corporate Vision
We envision to emerge as a strong vibrant Bank through the implementation of effective Risk
Management and Internal Control Systems for making appreciable contribution to the needs of the
economy in agriculture, industrial as well as service sectors through synchronizations of the human,
financial and technological resources.

Corporate Mission

To put in place the effective Risk Management and Internal Control

Systems.

To adopt and operationalise high-level technology standards.

To strive to achieve excellence in Customer Service.

To achieve the highest standards of transparency and accountability in

the conduct of banking business.

To adopt professional approach in effectively managing financial as

well as non-financial risks.

To maximize profitability and profits of the Bank with due

compliance of prudential guidelines.

To maximize competitive risk adjusted

Branch Network

The corporate office of the bank is located at Rajendra Palace, New

Delhi. There are a total of 19 Zonal Offices scattered all over India. The
bank has a vast network of 813 branches and 78 extension counters spread in
every nook and corner of the country. Five of the total branches are ISO
9001:2000. All the branches are manned by a dedicated workforce totaling
around 9778 personnel. Being a Punjab based bank, it expanded very rapidly
in Punjab with approximately 40% of the branches located within Punjab. In
line with the spirit of liberalization, the Bank is laying special stress on International Banking Divisions,
Merchant Banking, Hire Purchase and Leasing, Telebanking & Credit Card.

Total Branches Ten Years at a Glance

900

850

800

887 890 891

750

700 746
726 736
700 704 711
691
650
-0 0

-0 1

-0 2

-0 3

-0 4

-0 5

-0 6

-0 7

-0 8

-0 9
99

00

01

02

03

04

05

06

07

08
19

20

20

20

20

20

20

20

20

20

SOURCE: - www.psbindia.com
 Organization Chart

Chairman cum Managing Director

Executive Director

General Manager

Deputy General Manager

Assistant General Manager

Chief Manager

Senior Manager

Manager

Officers

Clerks (Workmen and Staff)

Management of Punjab and Sind Bank

SHRI R.P. SINGH - Chairman & Managing Director

SHRI G S MATTA - Executive Director

DIRECTORS
SHRI N.S. VISHWANATHAN (CGM, Reserve Bank of India -
Mumbai)
SARDAR AVTAR SINGH MANN (Officer's Director)
SARDAR MOHAN SINGH SEKHON (Workman Employee Director)
MAJOR MISS KRISHNA MOHINI
SHRI HARCHARAN SINGH JOSH
SHRI UMESH KUMAR SHARMA
NON- OFFICIAL DIRECTORS
SHRI K.K. SHARMA
MRS. KAMAL MANN

GENERAL MANAGERS

SARDAR GAJINDER SINGH (Posted at H. O.)

SARDAR MANJIT SINGH (Posted at Chandigarh, Local
SARANG H.O.)
SARDAR JASPAL SINGH (Posted at H.O.)
SARDAR DAVINDER SINGH (Posted at H.O.)
SARDAR G.S. VEDI (Posted at H.O.)
SARDAR UPKAR SINGH (Posted at H.O.)
SARDAR J. S. KATHURIA (Posted at H.O.)
SHRI R. L. SHARMA (CVO, New Delhi)
 BALANCE SHEET 2009

( 000's are
omitted )
As on As on As on
CAPITAL & LIABILITIES
31/03/2009 31/03/2008 31/03/2007
CAPITAL 7430560 2,430,560 2,430,560
RESERVE & SURPLUS 4791310 1,973,002 2,235,371
DEPOSITS 169245806 14,170,657,9 13,64,20,316
BORROWINGS 1947 3,318,5 1,00,683
OTHER LIABILITIES AND PROVISIONS 8960756 11,031,833 89,26,983
TOTAL 190430379 157,175,159 15,01,13,913
ASSETS
CASH & BALANCES WITH RESERVE BANK
8336716 9,472,224 1,06,71,693
OF INDIA
BALANCES WITH BANKS & MONEY AT
13133936 7,374,930 45,93,267
CALL AND SHORT NOTICE
INVESTMENTS 69555984 70,815,764 6,77,65,937
ADVANCES 91074702 63,222,179 6,03,00,142
FIXED ASSETS 2842223 641,803 6,32,754
OTHER ASSETS 5486818 5,648,259 61,50,120
TOTAL 190430379 157,175,159 15,01,13,913
CONTINGENT LIABILITIES 28898009 20,644,016 1,83,48,507
BILLS FOR COLLECTION 5412000 4,782,039 4,784,994
 PROFIT & LOSS 2009

Year ended Year ended Year ended

March 31,2009 March 31,2008 March 31,2007
INCOME
Interest Earned 12995549 12,485,831 1,27,85,011
Other Income 1509988 2,561,387 25,58,801
Total 14505537 15,047,218 1,53,43,812

EXPENDITURE
Interest Expanded 6689881 6,758,990 78,51,836
Operating Expenses 4829887 5,709,571 59,95,911
Provisions and Contingencies 1902518 3,289,290 14,07,208
Total 13422286 15,757,851 1,52,54,955

PROFIT/LOSS
Net Profit/Loss for the year 1083251 -710,633 88,857
Profit/Loss (-) brought forward -466122 244,511 3,13,318
Withdrawal from Investment Fluctuation 0
0 12,051
Reserve
Withdrawl from Leave Encashment Fund 0 0 25,000
Total 617129 -466,122 4,39,226

APPROPRIATIONS
TRANSFER TO:
Statutory Reserves 275000 0 30,000
General Reserve 96100
Capital Reserve (Investment) 10478 Nil Nil
Investment Fluctuation Reserve 110000 0 1,62,051
Deferred Tax Liability 11000 Nil Nil
Staff Welfare Fund 10000 0 2,664
Balance carried over to Balance Sheet 104551 -466,122 244,511
Total 617129 -466,122 4,39,226
 Performance and Achievements

The total business of the Bank was up by 26% as on 31, March 2009.

The bank earned a Net Profit of Rs.108.32 Crore in the last fiscal
year.

The total advances of bank were up by 40.53%.

The total deposits of bank were up by 19.43%

The total NPAs were down from 8.11% to 2.43%.

It is the first bank in Northern India to get ISO 9002 certification for
our selected branches.

In the spirit of liberalization, the bank lays special stress on

international banking, merchant banking, hire purchase, leasing,
tele-banking and credit cards.
 SERVICES OFFERED BY PUNJAB AND
SIND BANK

EDUCATION LOAN

The high cost of education in premier institutions need no longer

stand between you and your career aspirations. While you plan your
education in world class universities, Punjab and Sind Bank takes care of all
the expenses.

The education loan scheme aims at providing financial support on

reasonable terms from the banking system to deserving/meritorious students
for pursuing their higher education in India and abroad. The main emphasis
is that every meritorious student, though poor is provided with an
opportunity to pursue education with the financial support from the banking
system with affordable terms & conditions. No deserving student is denied
an opportunity to pursue higher education for want of financial support.

In short, the scheme aims at providing financial assistance on reasonable

terms:

To the poor and needy to undertake basic education.

To the meritorious students to pursue higher/ professional/ technical

education.

The total amount of loan that you can avail is Rs. 7.5 lacs for studies in
India and Rs. 1.5 lacs for studies abroad.
Eligibility:

Should be an Indian National.

Should have secured admission to professional/ technical courses

through entrance test/ Merit Based selection process.

Age above 18 years.

CONSUMER LOAN

Consumer loans help you to take care of your immediate requirements

without much of a hassle. The most attractive feature of the consumer loan is
that you do not have to give any kind of security to avail this loan. No
collaterals, only hypothecation of assets to be created. The maximum
amount of consumer loan for which you are eligible depends upon the net
salary you take home. Loans are repayable in Equal Monthly Installments
(EMIs).Loan tenure varies from 1 to 5 years.

Punjab and Sind Bank offers a broad range of consumer loans to meet
the customers specific needs and situations. Punjab and Sind Bank
consumer loans are hassle free, quickly approved and are on very attractive
interest rates. Consumer loans are given for the purpose of consumer
durables and vehicles.

Eligibility:

Employees of central/state government or a public limited company

Self employed professional.
Age between 21 and 55 years.
HOME LOANS

Building our own home is one of the most important decisions that we
make in our life. It provides an impetus in our lifestyle and provides
financial security.

Punjab and Sind Bank offers home loan with appropriate Equated
Monthly Installments (EMIs) with regard to customer as well as home loan
executive. It is simple and quick in processing with easy payment terms and
interest rates are very attractive.

Eligibility:

Qualified professionals and self employed persons having assured

source of income.

Person employed in Central Government/ State Government

undertakings are covered under the scheme.

An owner of an existing house/flat which is free from encumbrance

and can be mortgaged with bank.
AUTO LOANS

Punjab and Sind Bank auto loans are fast, cost efficient and user
friendly. Some of its features are:

Simple and quick in processing

Personalized services

Easy terms of service

Attractive interest rates

Finance is available on all models and makes

Eligibility:

Salaried individual

Self employed/sole proprietor

Partnership firm

Private or public limited companies

TWO WHEELER LOANS

Punjab and Sind Bank offers two wheeler loans which are
economical, friendly and offer easy installment options. Under two wheeler
loans only scooter and motor cycles are financed. Finance is offered up to
specified percentage of the price of product and rest is paid as margin by
borrower himself. The loan can be repaid in a period ranging from 1 to 3
years.

Eligibility:

Minimum 18 years of age and less than 60 years of age at the time of
completion of loan.

Minimum gross income of Rs.3000 per month (in case of scooter) and
Rs. 4000 (in case of motor cycle)

SECOND HAND CAR LOANS

Punjab and Sind Bank offers a prompt, cost efficient and simple
second hand car loan scheme. The applicant should have an earning capacity
of Rs. 50,000 per annum. The repayment period ranges from 1 to 4 years.
Eligibility:

Salaried individual

Self employed/sole proprietor

Partnership firm

Private or public limited companies

FOREIGN EXCHANGE

Preparing for an overseas trip for a first time or a seasonal traveler is

always full of anxiety and last minute chores to be tied up for the occasion.
And in the middle of it all is the task of arranging ones foreign exchange,
which should come at a fair exchange rate and in the right denomination and
currency. Punjab and Sind Bank bouquet of services now covers foreign
exchange services too, that is almost like handling your boarding pass. The
bank has setup a special division that dedicatedly looks into monitoring and
dispersing the best exchange rate, arranging multiple choices of currencies
and traveler cheque.

Payment terms:

All payments should be received in advance

Payment against sale of currencies and traveler cheque can be

received in the form of cash or through bankers cheque for draft
issued by the debit from customers bank account.
 CONSUMER LOAN OFFERED BY PUNJAB
AND SIND BANK

CONSUMER LOAN
A loan is debt instrument that entails the redistribution of financial
assets over time, between the lender and the borrower. The borrower initially
receives an amount of money from the lender, which they pay back, usually
but not always in regular installments, to the lender. This service is generally
provided at a cost, referred to as interest on the debt.

Acting as a provider of loans is one of the principal task for financial

institutions. Bank loans are generally funded by deposits. For other
institutions issuing of debt contracts, such as bonds is a typical source of
funding.

Consumer loans is a loan that establishes consumer credit that is

granted for personal use, usually unsecured and based on the borrowers
integrity and ability to pay. It helps you to take care of your immediate
requirements without much of a hassle. The most attractive feature of the
consumer loan is that you do not have to give any kind of security to avail
this loan. No collaterals, only hypothecation of assets to be created. The
maximum amount of consumer loan for which you are eligible depends upon
the net salary you take home. Loans are repayable in equal monthly
installments (EMIs). Loan tenure varies from 1 to 5 years.

Punjab and Sind Bank offers a broad range of consumer loans to meet
the customers specific needs and situations. Punjab and Sind Bank
consumer loans are hassle free, quickly approved and are on very attractive
interest rates. Consumer loans are given for the purpose of consumer
durables and vehicles.
 ACTIVITY CHART OF BRANCH/CONSUMER
LOAN EXECUTIVE

Before giving loan to any party, there are some general steps to be taken by
bank. These are performed by consumer loan executive.

Marketing:

Punjab and Sind Bank use the following strategies to increase its
customers:

Credit card operation

Tie ups

Identify various opportunities for promotional activities like carnivals,

advertisements

Keeping track of competitors activities

Market research and analysis

Ensuring timely service to customers

Documentation:

It is imperative that loan documentation should be perfect. The branch

head loan executive is responsible for completion of documentation. The
documentation comprises mainly of:

Pre sanction stage:

It is prior step for sanctioning the loan. It requires various documents

and proof of the borrower. This stage encompasses mainly of following:
 Loan application along with photograph

Income proof like salary certificates for employees and income tax
return for others

Residence proof of the applicant like voters card, passport, driving

license, ration card etc

Signature proof

Copy of bank account statement for last six months

Details of assets and liabilities of the applicant

Opening of account and depositing the processing fee.

Any other document as required therein for the loan proposal.

Post sanction Documentation:

Issuing the sanction letter

Promissory note

Hypothecation(Hyp.) deed

Original bill for purchase of asset

Collection of administrative fees

Preparation and approval of disbursement

Other miscellaneous documents

Procedure of Availing Loan

The person who intends to avail loan approaches the loan manager
and tells him the purpose of loan.

The manager checks whether the person is account holder of their

bank or not. If that person is a account holder than the manager checks
his credit worthiness and if he is not a account holder than the banker
satisfies himself that why that person wants to avail loan from their
bank.

If banker is satisfied he asks the person to fulfill all formalities.

The person submits the required documents and the manager checks
the authenticity of the documents and after full satisfaction the banker
grants the loan.

Precautions:

To make sure that the applicant will utilize the credit for the purchase
of consumer good only and not for any other personal purpose. For
this the name of the banker should be impeded as a financer in bill/
demand draft/cheque.

To ensure that all the guidelines pertaining to know your customer

(KYC) are fulfilled.

To verify personally that the asset purchased by the applicant is not

sold and proper insurance of the asset is done.

To ensure that the installments are received regularly and the

customer is contacted personally in case of default.

The documents submitted for availing the loan such as income tax
return, salary certificate etc. should be duly attested by gazzeted
officer/ manager.
 Bank has to make sure that the disposable income of the borrower
should not fall below the level i.e. 40% of gross income after paying
installment of loan.

Identity and record of the borrower must be verified before

sanctioning the loan.

Prepayment charges

Prepayment charges are levied @ 1% on the outstanding balance.

Rate of Interest

Rate of interest is very volatile aspect of consumer loans. Frequent

changes in the rate of interest are imperative looking to the emergence of
banks and other financial institutions into the consumer finance business.

Type of durables Rate of Interest

For new vehicle and consumer PLR-2.0% or 9% p.a. whichever
durables is higher
For old vehicles PLR or 11% whichever is higher
For overdue accounts PLR+4% = 15% at present

Reasons for Default

Problems related to family, employment, death of earning member,

loss of income and mental problems.

Lack of systematic professional, procedures and controls.

False information, heavy borrowing, lack of information from bank,

intention of default, delay in payment of salary by the employer and
misutilization of funds.
 Poor customer service

Careless attitude

Security

In consumer loan scheme no collaterals are required, only

hypothecation of asset to be created. In case of vehicles bank clause is to be
incorporated in RC/insurance policy.

Hypothecation (Hyp.):

It is a pledge of property as security for debt without transfer of

possession. When a person pledges a mortgage as collateral for a loan, it
refers to the right that a banker has to liquidate goods if you fail to service a
loan.

Repayment

Repayment is done normally in Equated Monthly Installments

(EMIs) comprising of Principal and Interest. However, as a special case,
half-yearly/quarterly installments may be fixed depending on the source of
income of the borrower. The bank must obtain post-dated cheques for
required EMIs in all the cases where loan installment from salary deduction
is not available. The repayment period ranges from 12 to 60 months.

Equated monthly installment (EMI):

The repayment of loan is through EMI which starts after the final
disbursement of the loan amount is made. The installment comprises of
interest as well as principal.

Post-dated cheques for each installment at the time of disbursement

should be taken
 Repayment should not normally extend beyond the age of 65 years or
age of retirement in case of employees.

Co-applicants age can also be taken into consideration while fixing

repayment plan in case the applicants age does not fall within the
scheme.

For old vehicle repayment should be done within 36 months (but

before retirement age i.e. repayment period to coincide with date of
retirement)

Reporting

A register of loans granted under managers discretionary power is

maintained in which each transaction related to loan is recorded.

The branch manager is required to send a monthly statement of

progress under the scheme to their respective Zonal Manager on the
last day of each month.

Queries (if any) are asked by the Zonal Manager and are solved by the
concerned person.

Zonal Manager should send the consolidated statement to Head Office

on 7th of each month.
 CONSUMER LOANS SCHEME OFFERED BY PUNJAB
AND SIND BANK

Consumer durables and Vehicles.

Purpose
Policemen, Teachers of Govt. Schools/Colleges,
Eligibility Central/ State Govt. employees and PSUs employees

Up to annual income, (Income of spouse can be

Quantum of
clubbed.)
Loan
i. 10% of the cost of Vehicles
Margin ii. 10% for consumer durables

i. 72 EMIs for Vehicles

Repayment ii. 48 EMIs for consumer durables

No collaterals required only hypothecation of assets

Security created -with bank loan to be taken.

Assets to be insured
Insurance
Prime Lending Rate (PLR)
Interest
i. Rs. 100/- for consumer durables and two
Processing
wheelers
Fee
ii. Rs. 500/- for four wheelers.
PUNJAB AND SIND BANK SCHEME FOR CONSUMER
CREDIT FOR MARRIED COUPLES

General public as well as employees in Pvt. /Public

undertakings like Central/State Govt., Local bodies,
Eligibility PSUs, Universities recognized by UGC, large public
limited companies.

For purchase of Car, Motor cycle/scooter for personal

Purpose of
use. One vehicle per person, consumer durables.
Loan
Amount of loan linked to income of the borrower (net of
Quantum of
other repayment obligations)
Loan
i. 20% on Vehicles
Margin ii. 10% on Consumer durables

i. 72 EMIs for Vehicles

Repayment ii. 48 EMIs for Consumer durables

i. PLR+0.50% p.a. where one of spouse is in service

Rate of
ii. PLR where both, husband & wife are in service.
interest
Hypothecation of assets to be created with bank loan
Security
Third party guarantee, but where both husband & wife
are in service- and avail a joint loan, then no guarantor
Guarantee
required.

Processing i. Rs. 100/- for two wheeler/consumer items.

fee ii. Rs. 500/- for four wheeler.
PUNJAB AND SIND BANK PERSONAL CLEAN LOAN
SCHEME UPTO Rs l Lac TO OFFICIALS OF GOVT. &
PSUs

Employees of Central/State Govt./PSUs/Local bodies

Universities recognized by U.G.C./Schools run by Govt.,
Eligibility
with confirmed service of more than 4 years, are eligible.
Minimum gross salary should be Rs. 5,000/- pm.

i. For income Rs.5000- Rs. 9000 Max. loan Rs.

50000
ii. For income Rs.9000- Rs.15000, Max. Rs.50,000
Quantum of iii. For income above Rs.15, 000, Max. loan Rs.1 lac.
loan iv. Rs.1 lac - Rs.2 lac for Govt. & PSU employees
only, having a minimum salary of Rs.15, 000 and
maintaining salary account with our bank.

Age limit 21 to 55 years

For purchase of consumer durables, consumption loan or
Purpose of
loan for any other personal use.
loan

Processing One time @ 2% of loan amount, at the time of sanction

Fee
i. For clean loan PLR+1%p.a.
Rate of
ii. For Consumer durables @ PLR
interest
EMIs by post dated cheques
Repayment
Third party guarantee acceptable to the bank.
Guarantee
i. Hyp. of Motor Vehicles/Consumer durables
Security ii. Personal (For clean loan)

Prepayment
Nominal fee of 2% of Outstanding balance
Charges
PUNJAB AND SIND BANK SPECIAL FESTIVAL LOAN
SCHEME FOR PUBLIC

i. Scheme would cover the officials of state or central

Govt./PSUs/LocalBodies/Universities/colleges
recognized by UGC/Schools run by Govt. or local
bodies / Private-aided schools.
ii. Scheme would cover Doctors, Lawyers, Architects,
C.As, Engineers, etc.
iii. In case of salaried persons - confirmed service of
more than four years with no departmental or
criminal case pending against the employee. Age
limit should be 21 to 55 years. The minimum gross
Eligibility salary Rs.5000/- per month. The income of the
spouse (if employed) may be clubbed for availing
the loan.
iv. In case of self employed / professionals, the
applicant should be an I.T. payee.
v. In case of existing borrowers under other schemes,
the eligibility would be judged from the good past
track record of at least two years and the existing
borrower accounts are Standard account and there
is no irregularity.

To meet special expenditure for festival celebration such

Purpose of as furnishing of house/shop/office, consumer goods,
credit personal expenditure.

Type of
Clean loan
credit
Maximum Rs. 1, 00,000/-
i. In case of salaried class -five times of the net carry
home salary.
Quantum of
ii. In case of professionals/self employed - 20% of the
credit
annual income as per IT return.
In case of existing borrowers under the scheme - 10%
of the loan/limit already sanctioned.
Processing
Nil
fee
Rate of
PLR
interest
No collaterals required. However, in case of existing
Security borrowers, the existing collateral, if any may be attached

The repayment programme to commensurate with income

of the borrowers, loan to be adjusted in 12 to 36 months in
Repayment monthly / quarterly / half yearly (in case of agriculturists)
installments

No third party guarantor required .However, guarantee of

Guarantee the spouse/major son to be obtained.

Nil
Prepayment
Charges
PUNJAB AND SIND BANK SCHEME FOR GRANTING
CLEAN LOAN AND CONSUMER LOAN TO CLUB
EMPLOYEES

The Employees of reputed clubs in metropolitan/urban

centers having minimum confirmed service of seven years.
Age limit should be 21-55 years. The minimum gross
Eligibility
salary Rs.5000/- per month. The income of the spouse (if
employed) may be clubbed for availing the credit facility.

Purpose of For purchase of consumer items and for any personal use.
Credit
Five times the gross monthly salary of the employee
subject to ceiling as under: Personal Loan Consumer Loan
Quantum of
Officers Max. Rs.50000/- Max. Rs.80000/-Class IV Max.
credit
Rs.25000/- Max. Rs.25000/- employees

15% of the cost of vehicles/consumer durables

Margin

Processing As per guidelines issued by Head Office

charges
i. Clean loan PLR +1% p.a.
Rate of
ii. Consumer loan PLR + 0.5% p.a.
interest
Clean loan Personal Consumer loan Hypothecation of
Security assets to be purchased with bank loan

i. Officers - Third party guarantee acceptable

ii. Bank Class IV Employees - Guarantee of other staff
Guarantee
member to be taken

The loan to be repaid in 36 EMIs including interest by

Repayment
deduction from the salary of the employees.
FRAUDS IN THE AREA OF CONSUMER FINANCE

Loans were granted to persons without verifying their antecedents/

details. As a result, subsequently they were found to be non-existent.

The documents submitted for availing the loans such as the deeds,
income tax returns, salary certificate etc. were found to be fake/
fictitious.

The Chartered Accountant (C.A.) who had purportedly issued/

verified the documents were found to be non-existent themselves.

Vehicle/consumer loans were obtained by submitting fake/ forged

invoices/ quotations and were misappropriated without creating
charge on the security.

Assets are normally not purchased by applicant and money is utilized

for some other purpose.

Sometime asset are purchased and these are sold in market

immediately after availing the loan.
 DATA ANALYSIS AND INTERPRETATION

Occupation
Table No. 1
Options Responses Percentage
Salaried 15 50
Professional 12 40
Business 3 10
Total 30 100

Occupation
Graph No. 1

10%

40% Salaried
Professional
50% Business

Interpretation:
The above Pie Chart indicates that 50% of the respondents belong to salaried
class while 40% of respondents are professional. Only 10% of respondent
belong to business class.
Annual Income
Table No. 2
Options Responses Percentage
Below Rs. 50,000 3 10
Rs. 50,000 Rs. 1,00,000 15 50
Rs. 1,00,000 Rs. 5,00,000 9 30
Above Rs. 5,00,000 3 10
Total 30 100

Annual Income

Graph No. 2

10%
10%
Below Rs. 50,000
30%
Rs. 50,000 - Rs. 1,00,000

Rs. 1,00,000 - Rs. 5,00,000

50%
Rs. 5,00,000 Above

Interpretation:
The above Pie Chart shows that 50% of the respondents fall in the income
group of Rs. 50,000 Rs. 1,00,000, 30% of the respondents fall in the
income group of Rs.1,00,00 Rs. 5,00,000 and only 10% of respondents fall
in the income group above Rs. 5,00,000
Duration of Account with Punjab and Sind Bank
Table No. 3
Options Responses Percentage
Less than 2 Years 7 23
3 to 5 Years 12 40
More than 5 Years 11 37
Total 30 100

Duration of Account
Graph No. 3

40
40 37

35
30
23
25
20
15
10
5
0
1-2 Years 3-5 Years More than 5
Years

Interpretation:
The above graph depicts that 37% people have their account with Punjab
and Sind Bank for more than five years and only 23% people have their
account with Punjab and Sind Bank for less than 2 years.
Satisfaction Regarding Interest Rate
Table No. 4
Options Responses Percentage
Yes 25 83
No 5 17
Total 30 100

Satisfaction Regarding Interest Rate

Graph No. 4

100
83
80

60

40

17
20

0
Yes No

Interpretation:
The survey reveals that 83% respondents are satisfied with the interest rate
charged by bank and 17% respondents are not satisfied with the interest rate
charged by bank.
Satisfaction Regarding Processing Fee
Table No. 5
Options Responses Percentage
Yes 28 93
No 2 7
Total 30 100

Satisfaction Regarding Processing Fee

Graph No. 5

100 93

80

60

40

20
7
0
Yes No

Interpretation:
The above graph indicates that 93% of respondents are satisfied with the
processing fee charged by bank and 7% respondents are not satisfied with
processing fees.
Time Taken for Disbursement of Loan
Table No. 6
Options Responses Percentage
1 day 6 20
2 to 3 days 20 66
More than 3 days 4 14
Total 30 100

Time Taken for Disbursement of Loan

Graph No. 6

66%

1 Day
2 - 3 Days
More than 3 Days
20% 14%

Interpretation:
The data reveals that more than 3 days were taken for disbursement of loan
of 14% respondents while 2 to 3 days were taken for 66% respondents. Only
20% respondents get their loan disbursed with in a day.
Proper solution of account related queries
Table No. 7
Options Responses Percentage
Yes 18 60
No 12 40
Total 30 100

Proper solution of account related queries

Graph No. 7

60
60

50
40
40

30

20

10

0
Yes No

Interpretation:
The above depicts that 60% of respondents queries are solved properly and
40% respondents feel that their queries are not solved properly.
Awareness Regarding Hidden Charges
Table No. 8
Options Responses Percentage
Yes 16 53
No 14 47
Total 30 100

Awareness Regarding Hidden Charges

Graph No. 8

54
53

52

50

48
47

46

44
Yes No

Interpretation:
The above graph indicates that 53% of the respondents are sure that no
hidden charges are debited in their account and they are aware about these
charges.
Satisfaction Regarding Bank Services
Table No. 9
Options Responses Percentage
Excellent 2 7
Very good 8 27
Good 15 50
Fair 5 16
Total 30 100

Satisfaction Regarding Bank Services

Graph No. 9

50
50
45
40
35
30 27
25
20 16
15
10 7
5
0
Excellent Very Good Fair
Good

Interpretation:
The above graph indicates that 50% of the respondents feel that the services
provided by bank is good, 27% respondents feel that services are very good
and 7% respondents feel that services provided by bank is excellent.
Customers Perception Regarding Cross-Checking of
Information
Table No. 10
Options Responses Percentage
Yes 9 30
No 21 70
Total 30 100

Customers Perception Regarding Cross-Checking of

Information

Graph No. 10

70
70

60

50

40
30
30

20

10

0
Yes No

Interpretation:
The above chart depicts that 30% of the respondents feel that the
information provided by them for getting loan is being cross checked
Reason for Selecting Punjab and Sind Bank
Table No. 11
Options Responses Percentage
Good service 18/30 60
Attractive schemes 21/30 70
Recommended by some person 10/30 33
You are an employee of Punjab and Sind 12/30 40
Bank
Near to your place 4/30 13

Reason for Selecting Punjab and Sind Bank

Graph No. 11

70
70
60
60

50
40
40
33
30

20
13
10

0
Good Service Attractive Others PSB Employee Near to your
Schemes Recommendation Place

Interpretation:
The above bar graph shows that most of the customers have taken loan from
Punjab and Sind Bank due to quality of services provided by bank and due
attractive schemes.
Preference of Existing Customer for availing Loan in Future
Table No. 12
Options Responses Percentage
Yes 12 40
No 6 20
Cant say 12 40
Total 30 100

Preference of Existing Customer for availing Loan in Future

Graph No. 12

20%
Yes
40%
No

40% Can't say

Interpretation:
The survey reveals that 40% of respondents will prefer Punjab and Sind
Bank for taking loan while 20% of respondents will not prefer Punjab and
Sind Bank.
Strongest Point of Punjab and Sind Bank
Table No. 13
Options Responses Percentage
Efficient staff 18/30 60
Attractive schemes 21/30 70
Excellent customer service 14/30 46
Branch ambience - -

Strongest Point of Punjab and Sind Bank

Graph No. 13
70
70
60
60

50 46

40

30

20

10
0
0
Efficient Staff Attractive Customer Branch
Schemes Service Ambience

Interpretation:
The above bar graph reveals that the customers feel that the strongest point
of Punjab and Sind Bank are attractive schemes, efficient staff and good
customer service.
 FINDINGS
Most of the respondents are satisfied with the interest rate charged by
the bank which shows that interest rate of Punjab and Sind Bank is
quite reasonable as compared to other banks.

All the respondents except two are satisfied with the processing fee as
they feel that it is less as compared to other banks.

84% of the respondents are satisfied with the level of services

provided by bank but they feel that these services can still be made
better.

Most of the people who have taken loan either belong to salaried class
or are professional.

Most of the respondents have selected Punjab and Sind Bank for
availing loan either due to attractive schemes, good customer service
or due to the fact that they are an employee of Punjab and Sind Bank.

Customers queries are not solved properly by the officials

40% of the respondents say that next time when they want to avail
loan they will prefer Punjab and Sind Bank.

Punjab and Sind Bank is popular among masses due to efficient staff,
attractive schemes and good customer service.

Generally customers are not aware about hidden charges so they must
be given full information about these charges.

Customers are not satisfied with branch ambience.

 SUGGESTIONS

Customers must be given full information about all the charges and
fees related to a particular scheme in detail.

More young and energetic staff should be employed to manage the

work load.

Punjab and Sind Bank should revise its schemes with special
reference to interest rate from time to time in order to attract new
customers.

The efforts should be made to improve bank ambience and to

increase the speed of service.

A customer grievances cell should be made functional and steps

should be taken to enhance speedy settlement of the compliant.
 CONCLUSION

Punjab and Sind Bank is one of the most efficiently run financial
institution of India. The management of this institution is quiet content and
satisfied by the progress made by it since its humble beginning in 1908 at
Amritsar. Punjab and Sind Bank offers a broad range of consumer loans to
meet the customers specific needs and situations. This project is an attempt
to study consumer loans schemes offered by Punjab and Sind Bank and level
of customer satisfaction regarding these schemes.

This project throws light on procedure of availing consumer loan as

well as different kind of frauds pertaining to these loans. A questionnaire is
also incorporated to know the level of customers satisfaction regarding
these loans and evaluation has been done on the basis of responses retrieved
by customers of the bank.

After making research with the help of questionnaire and personal

interview it is found that customers are satisfied with the consumer loan
schemes offered by Punjab and Sind Bank. They are also contended with the
services provided by the bank but they feel that these can be made better. It
can be done by employing more young and energetic staff to manage the
work load. The customers are not aware about the hidden charges so they
must be given full information about all the fees and charges.
 SOURCES

www.psbindia.com

Questionnaires

Research Methodology by C.N. Kothari

 QUESTIONNAIRE

Name ___________________________

Age ___________________________

Gender ___________________________

1. Occupation:-
(a) Salaried
(b) Professional
(c) Business

2. Annual Income:-
(a) Below Rs. 50,000
(b) Rs. 50,000 to Rs. 1 lakh
(c) Rs. 1 lakh to Rs. 5 lakh
(d) Above Rs. 5 lakh

3. What is duration of your account with Punjab and Sind

Bank?
(a) 1 to 2 years
(b) 3 to 5 years
(c) More than 5 years

4. Are you satisfied with the interest rate charged by Punjab and
Sind Bank?
(a) Yes
(b) No
5. Are you satisfied with the processing fee charged by Punjab
and Sind Bank?
(a) Yes
(b) No

6. How much time was taken by Bank between submission of

application and disbursement of loan?
(a) 1day
(b) 2 to 3 days
(c) More than 3 days

7. Are queries related to your account being solved properly?

(a) Yes
(b) No

8. Are you sure that no hidden charges are debited in your

account?
(a) Yes
(b) No

If No than specify the kind of charges debited in your account

____________________________________________
____________________________________________

9. What do you think about the standard of services provided by

Punjab and Sind Bank?
(a) Excellent
(b) Very good
(c) Good
(d) Fair

10. At any point of time do you think that the information

Provided by you to bank is being cross-checked?
 (a) Yes
(b) No

11. Why do you select Punjab and Sind Bank for availing of
loan?
(a) Good service
(b) Attractive schemes
(c) Recommended by some person
(d) You are an employee of Punjab
and Sind Bank
(e) Near to your place

12. Next time when you want to avail loan would you avail it
from Punjab and Sind Bank?
(a) Yes
(b) No
(c) Cant say

13. What according to you is the strongest point of Punjab and

Sind Bank?
(a) Efficient staff
(b) Attractive schemes
(c) Excellent customer service
(d) Branch ambience

(Thanks for your cooperation)