A Study on loans and advances

INTRODUCTION TO THE CONCEPT MEANING OF FINANCE:Finance may be defined as the provision of money at the time when required. Finance refers to management of flows of money through an organization. It concerns with the application of skills in the manipulation, use and control of money. Different authorities have interpreted the term “Finance” differently. However, there are three main approaches to finance. 1. The first approach views finance as to providing of funds needed by a business on most suitable terms. This approach confines finance to the raising of funds and to the study of financial institutions and instruments from where funds can be procured. 2. The second approach relates finance to cash. 3. The third approach views finance as being concerned with rising of funds and their effective utilization.

DEFINITION OF FINANCE:According to Guttmann and Dougall, business finance can be broadly defined as ‘the activity concerned with planning, raising, controlling and administering the funds used in business. In the words of Panther and Wert, “Business finance deals primarily with raising, administering and disbursing funds by privately owned business operation in nonfinancial fields of industry.”

A Study on loans and advances

According to the encyclopedia of Social Science, “Corporation finance deals with the financial problems of corporate enterprises. These problems include the financial aspects of the promotion of new enterprises and their administration during early development, the accounting problems connected with the distinction between capital and income, the administrative questions created by growth and expansion, and finally, the financial adjustments required for the bolstering up or rehabilitation of a corporation which as come into financial difficulties.”

IMPORTANCE OF FINANCE:Finance is the life blood and nerve centre of business. Just as circulation of blood is essential in the human body for maintaining life, finance is a very essential to smooth running of the business. It has been rightly termed as Universal Lubricant, which keeps the enterprise dynamic. No business, whether big, medium or small can be started without an adequate amount of finance. Fight from the very beginning i.e., conceiving an idea to business, finance is needed to promote or establish the business, acquire fixed assets, make investigations such as market surveys, etc, develop product, keep men and machine at work, encourage management to Make require further finance for making improvements or expanding the Business. Thus, the importance of finance cannot be over emphasized and the subject of business finance has become utmost important both to the academicians and practicing managers. The importance of corporation finance (which is a constituent of business finance) has arisen because of the fact that present day business activities are predominantly carried on company or corporate form of organization. The advent of corporate enterprises has resulted into:SSMRV COLLEGE Page 2

A Study on loans and advances

1. The increase in size and influence of the business enterprises. 2. Wide distribution of corporate ownership and 3. Separation of ownership and management. Finance management is applicable to every type of organization, irrespective of its size, kind or nature. It is as useful to a small concern as to a big unit. A trading concern gets the same utility from its application as a manufacturing unit may expect. This subject is important and useful for all types of ownership organizations. Where there is a use or finance, financial management is helpful. Every management aims to utilize its funds in a best possible and profitable way. So this subject is acquiring a universal applicability. It is indispensable in any organization as it helps in:1. Financial planning and successful promotion of an enterprise. 2. Acquisition of funds as and when required at the minimum possible cost. 3. Proper use and allocation of funds. 4. Taking sound financial decisions. 5. Improving the profitability through financial controls. 6. Increasing the wealth of the investors and the nation and 7. Promoting and mobilizing individual and corporate savings.

SCOPE OF FINANCE:The main objective of financial management is to arrange sufficient finances for meeting short term and long term needs. These funds are procured at minimum costs so that profitability of business is maximized. With these things in mind, a Financial Manager will have to concentrate on the following areas of finance functions.


A decision about various sources for funds should be linked to the cost of raising funds. SSMRV COLLEGE Page 4 . Even here of gestation period is longer. 2. After deciding about the quantum of funds required it should be decided which type of securities shouldbe raised. The inadequacy of funds will adversely affect the day-to-day working of the concern where as excess funds may attempt a management to indulge in extravagant spending and for speculative activities. Estimating Financial Requirement:The first task of a financial manager is to estimate short-term and long-term financial requirements of his business. Long-term funds should be employed to finance wording capital also. The estimations should be based on sound financial principles so that neither there are inadequate not excess funds with the concern. Entirely depending upon overdrafts and cash credits for meeting working capital needs may not be suitable. which influences the short-term and long-term financial planning of an enterprise.A Study on loans and advances 1. It may be wise to finance fixed assets through long-term debts. Deciding Capital Structure:- The capital structure refers to the kind and proportion of different securities of raising funds. The amount required for purchasing fixed assets and funds for working capital will have to be ascertained. A decision about the kind of securities to be employed and the proportion in which these should be used is an important decision. It costs of raising funds are very high then such sources may not be useful for linked to the cost or raising funds. If cost of raising funds is very high then such sources may not be useful for long. For this purpose. he will prepare a financial plan for present as will as for future. if not wholly then partially. then share capital may e most suitable.

A business being an economic institution must earn profit is a measure of efficiency of a business enterprise. SSMRV COLLEGE Page 5 . The pros and cons of various decisions have to look in to before making a final selection. The accumulated profits enable a business to face risks like fall in prices. Profits also serve as a protection against risks which cannot be ensured. Financial management provides a frame work for selecting a proper course of action and deciding a viable commercial strategy. thus following arguments are advanced in favor of profits maximization as the objective of business. Profit maximization:Profit earning is the main aim of every economic activity. thus profit maximization is justified in the grounds of rationality. b) Profitability is a barometer for measuring efficiency and economic prosperity of a business enterprise. The decisions will have to take into consideration the commercial strategy of the business.A Study on loans and advances OBJECTIVE OF FINANCE:Financial management is concerned with procurement and use of funds. a) When profit-earning is the aim of business then profit maximization should be the obvious objective. The objective can be achieved by: 1. Each alternative course has to be evaluated in detail. adverse government policies etc. These are various alternatives available for using business funds. competition from other units. The main objective of a business is to maximize the owner’s economic welfare. Its main aim is to use business funds in such a way that the firm’s value/earnings are maximized.

It is the most important financial decision. Dividend decisions Investment decision relates to the determination of total amount of assets to be held in the firm. When the firm maximizes the stockholder’s wealth. It means that by maximizing stockholder’s wealth the firm is operation consistently towards maximizing stockholder’s utility. SSMRV COLLEGE Page 6 . 1. distribution of firm’s income etc. Wealth maximization: Wealth maximization is the appropriate object of an enterprise. we can classify these decisions into three major groups. Short-term investment decision The long-term investment decision is referred to as the capital budgeting and the short-term investment decision as working capital management. There are many kinds of assets to be acquitted.A Study on loans and advances 2. Long-term investment decision 2. Financial decisions: Financial decisions refer to decisions concerning financial matters of a business firm. its proper utilization is very necessary to achieve the goal of wealth capital maximization. Financial decisions 2. The investment decisions can be classified under two broad groups: 1. the individual stockholder can use this wealth to maximize his individual utility. Since funds involve cost and are available in a limited quantity. the composition of these assets and the business risk complexions of the firm as perceived by its investors. Financial theory ascertains that wealth maximization is the single substitute for a stockholder’s utility. pattern of capitalization. Investment decisions 1.

replacement of permanent assets. proper liquidity and sound structural health of the organization. and reallocation of funds.A Study on loans and advances The investment decision is important not only for the settings up of new units by also for the expansion of present units. investments made earlier do not fetch results as anticipated earlier. The debt-equity ratio should be fixed in such a way that it helps in maximizing the profitability of the concern. The raising of more debts will involve fixed interest liability and dependence upon outsiders. in case. The rising of funds through equity will bring permanent funds to the business but the shareholders will expect higher rate of earnings. A finance manager has to select such sources of funds. It may help in increasing the return on equity but will also enhance the risk. The third major financial decision relates to the disbursement of profits back to investors who supplied capital to the fir. research and development project costs. The financial manger has to strike a balance between various so that the overall profitability then the market prices of the shares will go up maximizing the wealth of shareholders. to retain all the profits in business or to keep a part of profits in the business and distributed others among shareholders. It is the reward of shareholders of investment made by them in the share capital of the company. The term dividend refers to that part of profits of a company which is distributed by it among its shareholders. which will make optimum capital structure. The higher rate of dividend may raise the SSMRV COLLEGE Page 7 . A sound short-term investment decision or working capital management policy is on which ensures higher profitability. The dividend decision is concerned with the quantum of profits to be distributed among shareholders. The important thing to be decided here is the proportion of various sources in the overall capital mix of the firm. A decision has to be taken whether all the profits to be distributed.

A Study on loans and advances

market price of shares and thus, maximize the wealth of shareholders. The firm should also consider the question of dividend stability, stock dividend (bonus shares) and cash divide


A Study on loans and advances

INDUSTIRAL PROFILE  INTRODUCTION TO BANKING:The development of ‘Banking’ is evolutionary in nature. There is no single answer to the question of what is banking. It is interesting to trace the origin of the word ‘Bank’ in the modern sense, to the German word ‘Banck’ which means, heap or mound or joint stock fund. From this, the Italian word “Banco” meaning heap of money was coined. Some people have the opinion that the word “Bank” is derived from the French words “Bancus” or “Banque” which means a “Bench”. Initially, the bankers, the Jews in Lombardy, transacted their business on benches in the market place and the bench resembled the banking counter. If a banker failed, his ‘Banque’ (bench) was broken up by the people, hence the world “Bankrupt” as come. In simple terms, bankrupt means a person who has lost all his money, wealth or financial resources. In India, the Banking Regulation Act, 1949, under which banks are regulated by the Reserve Bank of India, defines a banking company and banking as under:Banking company:The Banking Regulation Act, 1949, defines a banking company as a company which transacts the business of banking in India [section 5 (c)].


A Study on loans and advances

Banking:Section 5 (b) defines Banking as accepting for the purpose of lending or investments of deposits of money from the public, repayable on demand or otherwise and withdrawal by cheques, drafts, order or otherwise.

 DEFINITION OF A BANK:Prof. Kinley “Bank has an establishment which makes to individuals such advance of money as may be required and safely made and to which individuals entrust money which is not required by them for use.

 SCHEDULE BANKS:Scheduled banks are those banks which are listed in the second schedule to the RBI Act, 1934. the banks satisfying the following conditions are only included in the second schedule that the bank’s paid up capital plus free reserves are not less than Rs.5lakhs and that the affairs of the bank are not conducted to the detrimental interest of the depositors. The RBI also has powers to reschedule a bank, when the above mentioned conditions are not satisfied.

 LOANS AND ADVANCES:According to sec 5 of the Banking Regulation Act 1949, a loan and advances means a loan or an advances made on the security of assets the market value of which is not at any time less than the amount of such loan or advances.

does not normally depend on the obligation of the borrower alone but wants some tangible security to safeguard his advances in case the borrower is unable to meet his obligation. In the money lending business. In case the loan is repayable in the installments and default occurs in the payment of any installments the entire loan usually becomes immediately recoverable at the option of the bank. the money lender must carefully consider the chances of his being repaid by the borrower. Banks do not grant loans for speculative purpose. A wise and prudent policy in regard to advances in considered an important factor inspiring confidence in the depositors and prospective customers of a bank. He must have the ability to judge the character and credit worthiness of his customer. They ensure the safety and liquidity of their funds by granting loans for productive purposes where SSMRV COLLEGE Page 11 . but also promote the economic development of the country. He therefore. All types of business activity including trade. Loans are repayable on the expiry of the periods for which they are granted. industry and agriculture have to depend on bank finance in one form or the other.  PURPOSE OF LOANS AND ADVANCES:A banker enquires from the borrower the purpose of loan before lending the loan to an individual.A Study on loans and advances  IMPORTANCE OF LOAN AND ADVANCES:The major portion of banks fund is employed by way of loans and advances which is the most profitable employment of its funds Advances comprises a very large portion of a banks total asset and form the backbone of every bank’s structure. Advances not only play an important part in gross earnings of banks.

small scale Industries (SSI) and small Business Finance (SBF) are classified as priority sector advances. etc the Chances of failure will be more and the banker will not able to recover all his advances or loans. speculative purpose or anti-social purpose such as the financing Hoarding of stocks. if advances are given for unproductive or risky purpose such as the financing of pleasure tour. They also help in exports which earn foreign exchange. meeting of domestic expenses.  Advances to agriculture  Advances to transport operators. etc and grants educational loans for higher studies and also for buying of house hold articles and vehicle.  PRINCIPLES OF SOUNDING LENDING:The banker’s follows are very cautions policy while lending his funds and conducts this business on the basis of will know principles of sound lending in order SSMRV COLLEGE Page 12 . commercial complex.  Advances to exports and imports Advances to agriculture. construction of houses. repayment of ancestral debts. These advances help to increase the productivity and development of the nation by generating employment and revenue. besides personal loans. Incidentally they will improve the standard of the people of our country. On the other hand. smuggling. banks grant loans for professionals.  Advances to small business finance and trade to Medium and Large scale Industries. Bank’s advances based on purpose are classified as under: Advances to small scale industries.A Study on loans and advances income generation is there.

A Study on loans and advances to minimize the risks. the ability of the banker to meet the demands made on him would be seriously affected in spite at the safety at the advance. They only the bank funds will be safer. The source of repayment must also be definite. The following principles are followed by the banking institutions while appraising and advances proposal. If the banker lends a large portion of his fund to borrowers from whom repayment would be coming but slowly. The Banker regards liquidity as important as safety because a bulk of their deposits is repayable on demand or at a short notice. Insincere and dishonest people should not be given the loan. The sound principle of lending is not to sacrifice safety and liquidity for the sake of higher profitability. This depends upon the nature of assets owned by the borrower and pledged the banker. Assets here refer to the bank loans and advances. If the bank funds are not safely employed bank cannot survive. he must feel certain that the advances is safe is that a borrower is in a position to repay the loan along with interest according to the terms of the loan contract.  Liquidity The bankers must ensure that the borrower is able to repay the loan on demand or with in a short period in accordance with agreed terms of re-payment. Hence the advance as for as possible should be made only to people who care for repaying the bank loan honestly. The bank must employ their funds profitably so as to earn sufficient income out of which to pay interest to the depositors. Therefore the banks do not grant advances to unsound SSMRV COLLEGE Page 13 .  Safety Safety first is the most crucial principle of good lending when the bankers lends.  Profitability Profitability means earning profit on the assets acquired. salaries to the staff and to meet various establishment expenses and distribute dividends to the shareholders.

In fact. even if they accept to pay a very high rate of interest. agriculture or trade. If the advances for unproductive purpose like consumer credit. Hence while lending the banker should keep in mind the concept of diversification. speculation etc.A Study on loans and advances parties who are doubtful in repaying. Thus the purpose of loan as advance is also a guiding factor in lending. On the other hand if the advance is made for productive purpose like industry.  Diversification This is a principle of sound lending loans and advanced must spread to different categories so that it will not concentrate on only one sector. While lending funds the banker enquires from the borrower the purpose for which he seeks the loan. the fund will come back quickly and without any difficulty. Such advances ultimately prove to be irrecoverable to the detriment of the interest of the bank and its depositors. the repayment of loan may be delayed and recovery will be slow.  The purpose of the loan The purpose should be productive so that the money not only remarks safe but also provide a definite source or repayment. An element of risk is always present in every advance however secure it might appears to be. He is keen in disturbing the risks involved in leading over a large number of borrowers over a large number of industries and areas over different types of securities. SSMRV COLLEGE Page 14 . The principle of diversification is based on the famous marks “Do not keep all at the eggs in one basket” it means that the banker would not concentrate his advances in a few big fines or few industries or in few cities or regions of the misfortune or certain trade or industries are of the bank will not be jeopardy. the entire banking business is one of taking calculated risks and a successful banker an expert is assessing such risk.

Loans 2.”  FORMS OF ADVANCES:Advances by commercial banks are made in different forms. When the banker advances without security he will run the risk of losing the money. But it is essential that the banker should have substantial security for his advances. Letters of credit (LC)/Bank Guarantees. Discounting of bills 5. The security should cover the money advanced interest there on and other changes. Thus the banker should also bear in mind the security principle while lending. Purchasing of bills 6. Loans A loan is a financial arrangement under which an advance is granted by the bank to a borrower on a separate account called loan account. From this account the loan amount is paid in one lump sum to the borrower by cash or by transfer to the credit of his current account.A Study on loans and advances  Security Another guiding factor in bank advance is security “it has been the practice banks not to lend as for as possible expect against security. if any. Hence the banker will not advance without sufficient security. which are short from advances namely: 1. Cash Credits 4. 1. Banker carefully identifies the entire different expert if an advance before granting it with sufficient security likes gold silver. Security is considered as insurance or a cushion to full back upon in case of an emergency. because he will be managing the public money and if the confidence of the public is lost there will be run on the bank. Overdrafts 3. The repayment of loan is provided in lump sum or by SSMRV COLLEGE Page 15 . goods insurance policy etc. stock exchange securities. If the borrower is prompt in repayment then there will be no worry.

A Banker secured his advances by stock exchange securities. 2years. II) UNSECURED LOANS: According to section (a) of Banking Regulation Act 1949.A Study on loans and advances installments without allowing the demand character of the loan to be affected in a way interest is charged in the loan amount from the date of sanction. This are advanced for which the banker has no collateral or tangible securities unsecured loans are also called clean loan or advances and they are granted to the parties enjoying high reputation and sound financial position. gold ornament. Types of loans: i) ii) Secured loans Unsecured loan I) SECURED LOANS: According to section 5 (a) of Banking Regulation Act 1949. is called a “Term loan” if the loan is given for still longer period. plant and machinery. secured loans of advances means a loans or advance made on the security of assets the market value of which is not at any time less than the amount of such loan or advance. it is called “long term loan”.. gold bullion. goods and documents of title of goods sometimes other securities such as real estate. an unsecured loan or advance means a loan or loan of advance not so secured. The loans are granted with caution and within certain limits only because in case of default by the borrowers. The period of loan ranges from one year to ten-twelve years. life policies fixed deposits receipts. the bankers rank equal with other unsecured creditors and share equally with the letter the realized value of the assets. A loan granted for a period at more than one year. 5years and 7years etc. SSMRV COLLEGE Page 16 . book and supply like are also accepted as securities for loans or advances.

He can withdrawn and put back the amount as and when he needs. When the current account holder is permitted by the banker to draw more than what stands to his credit. he is required to keep at the disposal of the borrower fine full amount at the overdraft sanctioned. Cash Credit Cash Credit is a very popular type of advance made by the commercial bank. Hence an overdraft is a fluctuating account wherein the balance some terms may be in credit and at the other times in debit. Though overdrafts are considered to be an occasional way of granting advance this distinction on is not significant now. The banker may take some collateral security or may grant such advances on the personal security. Over drafts Overdraft means over drawing the current account up to sanctioned limit. because while he can change into. The interest will be charged quarterly or half yearly on the amount actually issued at agreed ratio. An agreed rate of interest is paid on the utilized portion of the advance sanctioned and for the period it utilized so it is very advantageous to the borrower.a. It is a finance arrangement under which a borrower is allowed an advance under a separate a/c called cash credit a/c up to a specified limit. SSMRV COLLEGE Page 17 .A Study on loans and advances 2. Therefore to protect the interest of the banker generally. The customer is permitted to withdraw the amount as and when he needs its and to make deposits in his accounts as and when he like. Only on the amount actually overdrawn by the customer. Overdraft arrangement is very disadvantageous to the banker. Thus cash credit is like a running a/c or current a/c which can be operated according to the will of the borrower cash credit is sanctioned against the hypothecation or pledge of the goods like agricultural or industrial products or against the guarantee of the individual or co-obligates or against the tangible assets as security. such an advance is called an overdraft. there is a prevision for charging commitment charge on the utilized portion of the credit limit at the ration of 1% p. 3. A cheque book will be issued in an overdraft account.

6.Letters of Credit (LC) Documentary credit is popular known as letters of credit. the banker receives its face value from its acceptor of the bills. face value of the bill minimum discount charges.Purchasing of bills The bankers besides discounting the bill also purchasing of bill means obtaining a bill at sight for the consideration from a customer. Then on the due date of the bill. The consideration will be credited to the customer’s account. According to this.Discounting of bills Discounting of bills is a type of financial accommodation made between the banker and customer.e. LC is a sort of loan facility extends y a banking institution to its customer. It is an arrangement of making payment against document where in the bank at the request of the customer undertakes to pay the bills drawn by him according to agreed germs of LC they are similar to bank guarantees. They are the integral port of international trade documentary credit is an instrument of setting trade payments. A letter of credit it is an under taking given by the issuing bank to pay the specified sum of SSMRV COLLEGE Page 18 . In this case the rate of discounting the bill and can be obtained on demand from the acceptor. In case of purchasing the bill. there is nor date of maturity as incase of discounting the bill and can be obtained on demand from the acceptor.A Study on loans and advances 4. the banker discounts the trade bills exchange for a shorter period say days to 90 days and credit the customer’s account with the proceeds i. The banker then received the face value of the bill when the bill is presented to the drawers of the bill. 5. This is normally given to customer who will be on travel and to business people. In case the bill is dishonored by the banker can recover the amount from the customer who has discounted the bill. In their case the rate of discount will be slightly higher compared to discounting rate only trade bills at sight are purchased.

b) Letter for commercial credits a) Travelers Facility letter:This is issued to a person who will be traveling abroad for a specified period.A Study on loans and advances money to the person or drawn and which plays money to the holder of LC. b) Letter for commercial credit:There are letters of credit used for the purpose of financing shipments of good imported from a country or for the movement of produced manufactured goods from one place to another in the country it letter for commercial credits me also called documentary letter of credit. SSMRV COLLEGE Page 19 . This letter is generally taken when a customer wants to obtain funds during that period such credits are also known as encashment credit. to hold a certain sum at the disposal of a third person who is the holder of that letter and to pay to him such amount on his required against either cheque on the banker giving this letter or on the banker to whom the letter is addressed but not exceeding on total the whole amount covered by the said letter. A letter by which a banker request another to whom the letter is addressed. a) Traveler’s facility letter or personal credit letters. There are two types of LC’s namely.

This study is an attempt to know how the bank finances its funds. SSMRV COLLEGE Page 20 .  STATEMENT OF THE PROBLEM: A financially strong economy has to be backed by a banking sector. It’s a study to know about the various loans & advance and how bank is managing the issuing and recovery of loans provided for the people. The category 2.A Study on loans and advances RESEARCH METHODOLOGY  BACKGROUND OF THE STUDY: A study on Loans and advance at CANARA BANK. This affects the profitability of the bank very seriously. 1) Standard assets 2) Substandard assets 3) Doubtful assets 4) Loss assets According to this definition. the bank loans which are not earning any income are called non-performing assets. Therefore the RBI in the year 1992 issued guidelines to the commercial banks for adopting uniform income recognition and assets classification norms. Accordingly banks are now classified their advances as. 3 and 4 comes under this when any asset becomes non-performing the banks are required to make provision from their profits. So that a clear analysis and interpretation can be put forth. These findings would provide with better suggestion. Their strength should be comparable to international standard.

The bulk of the bank loans in India are provided to trade and industries.A Study on loans and advances In whatever form bank advances are granted they are repayable on demand or at the expiry of some fixed period. The share of advances in the total assets of the bank is about 60% and is the backbone of the banking structure. commercial and industrial activities. About 65% of revenue arises from interest and discount derived from advance including bills purchased land bills discounted. The strength of the banking system thus primarily depends upon the soundness of the advances. the lending of funds. for it makes possible the financing of the agricultural and commercial activities of the country. It explains about NPA and treatment in bank.recoverability of interest and installments of advance given which is the main problem faced by banks.creating constant demand for consumer SSMRV COLLEGE Page 21 . The study mainly focuses on the granting the loans and advances in CANARA BANK. If the loans are not recovered. Bank lending is very much needed to the economy. Bank loans are called “agents of indirect production”. banks through their consumer loans contribute to consumption activities. it will become nonperforming asset (NPA). This study on Loans and advances mainly concentrates on how bank classify their loans according to guidelines issued by RBI. with or without secretly is by far the most important.  NEED FOR THE STUDY: Granting of loans and advances is the primary function of a bank lending operation is one of the most important aspects of banking of all the functions of modern banking. The classification into NPA is based on recoverability and non. In additional to the financing of agriculture.

 To compare the position of various loans with comparison with the other banks  To analyze the problem faced by CANARA BANK.  SCOPE OF THE STUDY:  The study was made to ascertain the customer response on CANARA BANK loans and advances.A Study on loans and advances goods like houses. appliance etc. furniture.  To study the loans and advances of CANARA BANK. agriculture have to depend on the bank finance in one form or other.  To know how the credit applicants are evaluated before granting credit facility. thus all type of business agriculture including trade.  To access the level of consumer satisfaction towards the services provided by the bank. Hence the need for loans and advances are very important aspects  OBJECTIVES OF THE STUDY:  To analyze the need for lending. SSMRV COLLEGE Page 22 .. industry.  To find out whether the lending scheme have reached the real needy people.

A Study on loans and advances  The study shows the evaluation and expectation of Bank’s loan products. Primary data 2.  COLLECTION OF DATA: The data collected in this study have been classified as: 1. Of course. Primary data The methodology adopted for collecting primary data is basically the questionnaire method the most popular among data collection techniques. A sampling design is a definite plan for obtaining a sample from a given population. Secondary data 1. An integral component of the research design is the sampling plan. 2. The sampling procedure selected in random sampling through the questionnaire as it involves both qualitative and quantitative SSMRV COLLEGE Page 23 . Secondary data Sampling is a process of selecting a group of people belonging to a particular locality or different localities and representing to population. some information has been obtained from interviews with the bank employees and very few customers. This method has been mainly employed to extract information from customers.

Random sampling is a good technique when there are comprehensive lists available of the target population According to the simple random sampling method. it is assumed that entire population is homogeneous and the samples are selected in such a way that each and every unit in the population has equal chance of occurrence. The sampling size is 50. The researcher has adopted the most appropriate technique in a domestic research that is Simple Random Sampling. Sampling is a technique or method or selection of samples. It concentrates on 3 aspects:  Who to survey-Sampling Unit  How many to survey-Sampling Size  How to select them-Sampling procedure Sample is the fraction of the population. who want to avail loan.A Study on loans and advances aspects.  SAMPLING TECHNIQUE: The significant component of a research study is the sampling plan. SSMRV COLLEGE Page 24 . The research has been conducted on a sample size of 50 respondents who have availed Loans and Advances from the CANARA BANK and from potential customers. and the study is based on the survey conducted. as time is limited.  SAMPLE SIZE: The sample size is the number of units that we chose for the research purpose.

3) Study was confined to small group of customers. SSMRV COLLEGE Page 25 . 5) The study is limited only to CANARA BANK 6) As the time lapses the certain portion of study start deprecating due to market situations. The limitations of this study are:1) Sample size was restricted to 50 customers only. it is necessary that selection of the sample must be free from business. 2) Direct interviews could be biased because if the busy schedule of the respondent and hesitations to provide information to some questions.A Study on loans and advances Since random sampling implies equal probability to every unit in the population.  LIMITATIONS OF THE STUDY: Every research has its own limitations. 4) Lack of time and cost for the study of project.

Growth of Canara Bank was phenomenal. it was founded with the name Canara Bank Hindu Permanent Fund. but later on the name was changed to Canara Bank Limited. Today. SSMRV COLLEGE Page 26 . the Bank completed a century of operation in the Indian banking industry. a great visionary and philanthropist. Canara Bank was founded by Shri Ammembal Subba Rao Pai. In June 2006. Karnataka by a well known personality Mr. at Mangalore. Ammembal Subba Rao Pai. in July 1906. Widely known for customer centricity. Eighties was characterized by business diversification for the Bank. then a small port in Karnataka. attaining the status of a national level player in terms of geographical reach and clientele segments. The eventful journey of the Bank has been characterized by several memorable milestones.A Study on loans and advances CANARA BANK COMPANY PROFILE Canara Bank is one of the most prominent commercial banks of India. Initially. The Bank has gone through the various phases of its growth trajectory over hundred years of its existence. Canara Bank occupies a premier position in the comity of Indian banks. The bank was established in the year 1906 at Mangalore. especially after nationalization in the year 1969.

SSMRV COLLEGE Page 27 . "A good bank is not only the financial heart of the community. the Bank provides a wide array of alternative delivery channels that include over 2000 ATMs. committed staff and uncanny leadership ability demonstrated by its leaders at the helm of affairs. the Bank has been scaling up its market position to emerge as a major 'Financial Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India and abroad. with 3057 branches spread across all geographical segments. We strongly believe that the next century is going to be equally rewarding and eventful not only in service of the nation but also in helping the Bank emerge as a "Global Bank with Best Practices". serving national priorities. promoting rural development. to the continued patronage of its valued customers. in various corporate social responsibilities. is in fact deeply rooted in the Bank's founding principles. 2681 branches providing Internet and Mobile Banking (IMB) services and 2091 branches offering 'Anywhere Banking' services. Keeping customer convenience at the forefront. namely. but also one with an obligation of helping in every possible manner to improve the economic conditions of the common people".A Study on loans and advances Over the years. The growth story of Canara Bank in its first century was due. This justifiable belief is founded on strong fundamentals.one of the highest among nationalized banks. which has been formed as the basic plank of national policy agenda today. among others. enlightened leadership and a family like work culture. Promoting an inclusive growth strategy. Not just in commercial banking. customer centricity.covering 732 centres. enhancing rural self-employment through several training institutes and spearheading financial inclusion objective. As at June 2010. Under advanced payment and settlement system. the Bank has further expanded its domestic presence. These insightful words of our founder continue to resonate even today in serving the society with a purpose. the Bank has also carved a distinctive mark. all branches of the Bank have been enabled to offer Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) facilities. stakeholders.

the Bank provides a wide array of alternative delivery channels that include over 2000 ATMs. with 3057 branches spread across all geographical segments. Keeping customer convenience at the forefront.one of the highest among nationalized banks. All debit card holders of the bank can make internet purchases by logging on to the merchant SSMRV COLLEGE Page 28 . 3) Internet Purchases Service using debit card leverages Canara Bank's technological capabilities and cost efficiencies to serve customers through internet. the Bank has been scaling up its market position to emerge as a major 'Financial Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India and abroad. Canara Super Savings Salary Account. 2) Zero balance account service.A Study on loans and advances BRANCHES AND ATM SERVICES Over the years. As at June 2010. Under advanced payment and settlement system. large corporate. the Bank has further expanded its domestic presence. for employees of government service. all branches of the Bank have been enabled to offer Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) facilities. mid cap.covering 732 centres. 2681 branches providing Internet and Mobile Banking (IMB) services and 2091 branches offering 'Anywhere Banking' services. It would enable customers to deposit cheques through the on-site ATMs of the bank 24x7. PRODUCTS AND DEPOSITS SCHEMES Some of the products of Canara Bank: 1) ATM Cheque Deposit Facility. IT and ITE’s companies and SME’s.

A Study on loans and advances website directly. DEPOSITS SCHEMES Some of the deposits schems of canra bank : 1) Savings bank account 2) SB Gold scheme 3) Canar tax savings scheme 4) Khmadhenu Deposits 5) Recurring deposits 6) Current account 7) Fixed deposits LOANS AND ADVANCES 1) Retail Lending Schemes 2) Loans Against Securities SSMRV COLLEGE Page 29 . Rs 1. 5) On-Line application for home loan.000.000 and Rs 5. 6) Global Visa and Master Debit Card was the long felt need which eliminates a separate card for international travellers. Rs 2. 7) Gifts go digital through the Canara Bank Gift Card in four denominations of Rs 500. enables the customers to issue cheques that are treated as local cheques in core banking branches.000. 4) Multi-city (MCC) facility.

internet banking. in addition to branches in Hong Kong and London. retail. telebanking. One of India's largest banks. Other services include asset management and factoring.are computerized. SSIs and Others 5) Government Sponsored Schemes 6) Special Schemes for Women and ETC. The financial institution is 73% owned by India's government. SSMRV COLLEGE Page 30 . Canara Bank (also known as CanBank) has a network of more than 2. in a country where that is not a given.including those located in rural areas -. The modernization of all branches allows the bank to offer its customers networked ATMs.A Study on loans and advances 3) Non Fund Based Facilities 4) Advances to Agriculture. and infrastructure loans. NRI Services 1) Deposits 2) Loans 3) Remittances 4) FOREX Branches 5) Helpline for NR Credit Cards 1) Domestic Cards 2) Global cards 3) Debit cards OVERVIEW Canara Bank has a can-do attitude about banking in India. All of Canara Bank's branches -. and debit card services. Canara Bank's lending focus is on agriculture. housing.700 branches throughout India.

Delhi. (REGP) of Khadi and Village Industries Commission (KVIC). Global HR excellence in Training. in South Zone for the year 2007-08. • The Bank won two Silver Corporate Collateral Awards for Best Corporate Ad in the Print Media and Best Corporate Film on Corporate Social Responsibility at the Public Relations Council of India Awards 2009. • Best Performing Bank under Rural Employment Generation Programme. NASSCOM and Times Foundation.A Study on loans and advances AWARDS/ACCOLADE Received during 2008-09 • Conferred 'First Rank' in India's Best Banks awards under the category 'Strength and Soundness' for 2006-07 by a survey conducted by Ernst & Young. SSMRV COLLEGE Page 31 . Received during 2009-10 • Best Bank in South Zone Award for the year 2008-09 in respect of lending under KVIC and PMEGP Schemes. Hon’ble Prime Minister of India.Manmohan Singh. the largest rendezvous of HR Professionals. at its Employer Branding Talent Management Congress held on 22nd and 23rd August 2008. instituted by BSE. instituted by the Ministry of MSME. • • Golden Peacock National Training Award 2008 for excellence in training. Government of India. an award conferred by the Asia Pacific HR Congress. The award was handed over by Dr. • Best Corporate Social Responsibility Practice Award.


5) For Repairs. wardrobes. 7) Short term Bridge Finance for the interim period between sales of the existing/ old house and purchase of a new house (HOME BRIDGE LOAN) –to the extent of SSMRV COLLEGE Page 33 . 4) For purchase of old house /flat of age of 30 years and below. electrical/solar power fittings) of existing house of age 50 years and below (HOME IMPROVEMENT LOAN). 6 )For extending the existing house building HOME EXTENSION LOAN. CANARA BANK HOME LOAN PURPOSE: 1) For construction of a house building in the plot/site already purchased /owned 2) For purchase of a plot/site and a house building thereon. racks. 3) For purchase of a new house/flat.A Study on loans and advances • CANARA PENSOIN • TEACHERS LOAN • SWARANA LOAN • CANARA RENT • CANARA JEEVAN • DOCTORS CHOICE • CANARA MORTGAGE 1. Renovation (including cost of kitchen Cabinet.

A Study on loans and advances 80% of market price of the existing house or 80% of cost of the new house to be purchased whichever is less but invariably against the Security of new house. individuals engaged in business / professionals and selfemployed persons. 7) For NRIs up to 2 years' gross income and selectively up to 3 years' gross income.7. upto Rs. SSMRV COLLEGE Page 34 . 2) For persons involved in business or self-employed individuals: 4 years of gross yearly income 3) For Non-Resident Indians: Up to 2 years’ gross income and discriminatorily up to 3 years’ gross income. a loan amount of upto 5 years’ gross income/salary also allowed 5) Rs. 6) Discriminatorily.15 lacs in Urban Centres.5 lacs for renovations/maintenance/extensions to the existing residential dwelling unit/flat. 2) NRIs are also eligible to avail loans without specific permission of RBI QUANTUM OF LOAN. 4) Discriminatingly. 1) For salaried employees: 4 years of gross salary income. 8) For taking over of the existing Housing loans availed from other Banks/Other lending Companies/Agencies. ELIGIBILITY: 1) Salaried individuals.

The cost shall include Land cost. Pelmets. Geysers etc. Kitchen cabinets / racks. Dressing Mirror. Registration charges.A Study on loans and advances LOAN ENTITLEMENT : New house / flat (including those for purchase of site & construction of house thereon) Old house/flat For second or more houses :15% :20% :25% MARGIN: 20% of the cost in general. Stamp duty. Fixtures like Ward Robes. SECURITY: The branches shall obtain the security of the site and building / flat constructed / to be constructed / to be purchased for which the finance is being extended. REPAYMENT: i) For Salaried Persons: A maximum repayment period of 20 years or up-to the date of superannuation (including a moratorium /repayment holiday of maximum of 18 months for construction of houses and 6 months for repair of houses) whichever is earlier may be SSMRV COLLEGE Page 35 . subject to satisfactory valuation and applicant’s clear marketable title / free from encumbrance the property.

000 and no hidden cost. no repayment holiday shall be granted.A Study on loans and advances allowed. ii) For others (Other than Salaried class): Same guidelines as applicable to Salaried class subject to maximum repayment period of 20 years or 65 years of age of the applicant whichever is earlier (inclusive of maximum repayment holiday of 18 months in case of loans for construction and 6 months for repairs to existing houses). Prepayment Penalty: 2% on the outstanding liability in case of transfer of Housing Loan Accounts to other banks/ housing finance institutions. 500 and max of Rs. In case of outright purchases of ready built house/flat. No application fee.18 months: generally in equated Monthly PROCESSING CHARGES: 0. DOCUMENTS: 1) Stipulated Loan Application with 2 passport size photos of applicant / guarantor 2) Sale Deed 3) Agreement for Sale 4) Copy of the approved plan for the proposed construction / extension / addition 5) Detailed cost estimate / valuation report from Bank's Panel Chartered Engineer / Architect SSMRV COLLEGE Page 36 . 10.50%of the loan amount minimum of Rs.

. SKhata and permission for mortgage. EC for the past 13 years. etc. type of organization. ELIGIBILITY : 1) Salaried persons with qualifying income and required repayment capacity. year of establishment.A Study on loans and advances 6) Allotment letter of Co-operative Housing Society / Apartment Owners' Association / Housing Board / NOC from the Society / Association / Builders / Housing Board 7) Legal Scrutiny Report. CAN MOBILE(VECHILE) PURPOSE: For buying new or used four wheeler . NEW CAR LOANS: 1) Up to 90% finance of the invoice value on a brand new car. 3) Reputed firms and corporate are also eligible. SSMRV COLLEGE Page 37 .16 (in case of salaried persons) 9) IT Returns filed for the past two years (in case of non-salaried persons) 10) A brief note on the nature of business. 2) No ceiling on maximum loan amount. Property Tax paid receipt. wherever necessary 8) Salary Certificate and Form No. 2) professionals and business people with qualifying income and required repayment capacity.

REPAYMENT: In convenient Equated Monthly Instalments up to 72 months.16 / income .50% (fixed) 2) Interest is charged on the daily reducing balance. RATE OF INTEREST (FIXED RATE): 1) Car loan . In zero percent finance offers. DOCUMENTS: 1) Stipulated Loan Application with 2 passport size photos 2) Latest salary certificate and Form No. So.A Study on loans and advances USED CAR LOANS: 1) Finance used cars not older than 5 years 2) Finance 75% of the agreed price or 75% of the value of the car. step into any of our branches and drive away your dream car. PROCESSING CHARGES: 0.6 lakh whichever is lower.and maximum of Rs.proof like ITAO / IT Return. Financial Statements as the case may be 3) Performa Invoice or valuation report (as the case may be) SSMRV COLLEGE Page 38 . as assessed by an automobile engineer or Rs. So you don't have to pay interest even for a day extra on the portion repaid by you. the terms are normally upto one year only.1% on the loan amount with a minimum of Rs.250/.9.500/-.

autonomous institutions like IIT.(graduation / post graduation LOAN DETAILS : SSMRV COLLEGE Page 39 .IIM etc. technical / professional courses. other documents as per norms VIDYASAGAR EDUCATIONAL LOAN: ELIGIBILITY : a) Studies in India • • Graduation Post-graduation including technical / professional courses with employment potential conducted by colleges / Universities approved by UGC / Govt. Waiver considered selectively 5) For used vehicle./AICTE/Department of Electronics / IMC.A Study on loans and advances 4) Guarantee / co-obligation. b) Studies abroad: • Job oriented.

instruments.50 lakhs: colletral security equal to 100% of the loan amount RATE OF INTEREST SSMRV COLLEGE Page 40 .00 lacks .00 lacs upto Rs. uniform Payment of hostel fees.50 lacs . 7. equipments. examination fees. study tours Passage expenses (for studies abroad) QUANTUM : • • For studies in India : Max.4.10.20.No security Above Rs.4.00 lacks for studies in India : 5% studies abroad : 15% SECURITY : Loan is given jointly to the student and parent /guardian Assignment of future income of the student • • • Upto Rs.00 lacs For studies abroad : Max Rs.00 lacs .4.A Study on loans and advances • • • • Payment of course fees Purchase of books.4.Satisfactory third party guarantee Above Rs.Nil Above Rs. 7. Rs.00 lacs MARGIN : • • Up to to Rs.

A Study on loans and advances

Subject to changes as advised by Bank/RBI from time to time.

0.1% on the loan amount subject to a minimum of Rs.100/- and maximum of Rs.250/

• •

To be repaid in 5 to 7 years. Initial repayment holiday of One year both for principal & interest from the date of completion of course or six months of getting a job whichever earlier. Interest will be debited quarterly on simple basis during the repayment holiday / moratorium period. After commencement of repayment,the accrued interest is added to the principal amount and EMIs fixed on total outstanding

• •

amount. Penal Interest @ 2% will be charged for above 2.00 Lacs for the overdue amount and overdue period


A Study on loans and advances

HOME IMPROVEMENT LOAN “Home Improvement Loan Scheme” provides a packaged financial assistance to individuals for furnishing their houses / flats at incredibly low rates of interest". PURPOSE:
For furnishing house / flat with household furniture items, air conditioners, wardrobes, kitchen cabinets, refrigerator, washing machine, etc.,
• •

Can be availed along with a Housing Loan from Canara Bank OR Separately in cases where Housing Loan is obtained from other Banks / Financial Institutions OR Without any Housing Loans


A Study on loans and advances


Owners of House / flat who are salaried individuals / individuals engaged in business / professionals / self-employed. NRIs are also eligible.

1. When availed along with Housing Loan from our Bank, amount upto one year's gross salary / income over and above the normal eligible amount for housing finance. 2. In other cases, one year's gross income / salary will be reckoned to determine the loan quantum under this Scheme. 3. Subject to above, normally, the maximum loan quantum shall be Rs.2 lacs. Higher quantum considered selectively. 4. If availed as a part of the housing finance from our Bank, then, the margin stipulated is 15%. In other cases, the margin is 20%.

1. Hypothecation of assets created out of this loan. 2. Mortgage of house / flat (if housing loan is availed from us) 3. Suitable co-obligation / personal guarantee. Waiver considered selectively.


In convenient equated monthly instalments upto 60 months.


0.50%of the loan amount minimum of Rs. 500, no hidden cost. No application fee.


DOCUMENTS / FORMALITIES: • • • • Stipulated Loan application with 2 passport size photographs Latest Salary Certificate and Form No. etc.Existing customers with satisfactory dealings. Bonds or Units. Instead. No need to liquidate your investments even during dire necessities. you can avail Canara Cash loan pledging your investments in Shares. etc.16 ITAO / IT Returns (for professionals and non-salaried persons) Performa Invoices. the loan can also be disbursed against Performa invoice.A Study on loans and advances DISBURSEMENTS: • Amount will be normally disbursed only after acquiring ready built house / flat or completion of construction of house / flat or completion of repairs / renovations. ELIGIBILITY: • • Individuals . New customers .. where the loan is availed along with housing finance. cost estimates CANARA CASH Instant cash against Shares / Debentures / Bonds / Units ! PURPOSE: • • • Earn on your investments. And keep them too.well-introduced and credit worthy can also avail. SSMRV COLLEGE Page 44 . In case this loan is sanctioned independent of a housing loan then. Debentures.

5 lacks Maximum loans up to Rs.and maximum of Rs. Nominal charges for substitution of securities REPAYMENT: • • Up to 60 months.A Study on loans and advances QUANTUM OF LOAN : • • • Shares and Debentures . DOCUMENTS / FORMALITIES : • • • • • Stipulated Loan Application with 2 passport sized photographs Guarantee / co-obligation where applicable Statement of holding of scrip's issued by DP Latest salary certificate / income proof like ITAO / IT Return Financial Statements for the last 2 years (in case of non-salaried individuals) SSMRV COLLEGE Page 45 . Avail up to Rs.20 lacks if demat account is maintained with DPs of our bank.upto 50 % of market value PSU Bonds upto 70% of Market Value Units of UTI and CBMF .100/. EMI also acceptable. Securities can be replaced / substituted during the currency of the loan up to 10 times. Selectively OD limit is also considered.250/-.1% of the loan amount subject to a minimum of Rs.50% of NAV or market value whichever is less. PROCESSING CHARGES: • 0.

A Study on loans and advances CANARA BUDGET A simple Personal Loan Scheme exclusively for the benefit of employees of Corporate. Government Departments. etc. and also Non salaried class like .. Institutions. PSUs. professional/self employed. ELIGIBILITY: • • Confirmed employees of reputed PSUs and Joint Stock Companies Confirmed Central / State Government officials SSMRV COLLEGE Page 46 . businessmen PURPOSE: To meet genuine personal needs other than speculative purpose.

• • Employees salary account has to be maintained with our branch QUANTUM : • • Salaried :.50. SECURITY : • Salaried : Normally. Non Salaried : Suitable co-obligation is required.1 lacks Higher quantum also considered selectively.50% of average gross annual income of the applicant for last 3 years subject to maximum of Rs.1 lacks whichever is less.Business/self employed who are in the business / profession for minimum period of 3 year and who are having satisfactory dealings with the branch for atleast 1 year.000/-. Professors / Professors of Colleges / Research Institutions and Universities. Non salaried : In convenient Equated Monthly Instalments upto 36 months. • SSMRV COLLEGE Page 47 . but do not mention the rates! REPAYMENT: • • Salaried : In convenient Equated Monthly Instalments upto 60 months.A Study on loans and advances • Lecturers / Asst.Six months' gross salary or Rs. • RATE OF INTEREST: Compare this with high rates charged for clean Personal Loans by some banks who advertise aggressively about Personal Loans. Waivers considered selectively. Non Salaried :. For Non salaried :. Co-obligation is required for loans above Rs.

Co-obligation (unless waived) CANARA SITE LOAN PURPOSE: • A Loan Scheme to individuals for purchase of Housing sites from State Development/Town Planning Development authorities.500/-.16 / ITR/ITAO for last 3 years. SSMRV COLLEGE Page 48 . Housing loan can be availed whenever required for construction of house of the sites purchased.A Study on loans and advances PROCESSING CHARGES: • 0. Central and State Governments local authorities either exclusively or in partnership with private sector entities.and maximum of Rs. or from any other body constituted by the Government for distribution of sites provided such layouts are duly approved by the concerned statutory authority. DOCUMENTS / FORMALITIES • • • Stipulated Loan Application with 2 copies of passport size photographs Latest Salary Certificate and Form No.100/.5% of the loan amount subject to a minimum of Rs.

PROCESSING CHARGES: • 0. Hyderabad and Secunderabad and Rs. Bangalore.1 lacks or above.10000/-.15 lacks for properties situated at six metros of Mumbai.500/. No Co obligation/personal guarantee will be insisted. MARGIN : • 20% on the project REPAYMENT PERIOD: • 5 Years SECURITY • Mortgage of the housing site proposed to be purchased.and maximum of Rs.A Study on loans and advances ELIGIBILITY: • Confirmed salaried class individuals and businessmen/professional who are in the business for a minimum period of 3 years and whose net annual income is Rs. SSMRV COLLEGE Page 49 .5% of the loan amount subject to a minimum of Rs. Kolkata. For employees Net take home salary should be 40% of the gross salary. Delhi. Chennai. QUANTUM : • Three years gross annual salary/income with a maximum of Rs.10 lacks for properties situated at other centers.

.e. technical literature etc. mobile telephone. PURPOSE • Purchase of computer. SSMRV COLLEGE Page 50 . • • • CANARA GUIDE OBJECTIVE • Loan scheme to finance individuals possessing a valid certificate to practice as a Tax Return Preparer (TRP) as per the scheme formulated by the Ministry of Finance.A Study on loans and advances DOCUMENTS / FORMALITIES : • • • Application with 2 passport size photographs Layout/site plan issued by the development authorities.16 for salaried class and latest ITAO for Businessmen/professionals. Latest 6 months Salary Certificate/Form No. Government of India for preparation of income tax returns. necessary software. tax books. Legal Scrutiny Report form Bank’s panel Advocate Allotment letter other any other evidencing purchase/allotment of sites issued by the development authorities. furniture. Printer and other peripherals/accessories i.

500/. SECURITY • Hypothecation of the assets created out of the loan & Suitable Co-obligation. SSMRV COLLEGE Page 51 .A Study on loans and advances ELIGIBILITY • Individual customers of the bank with satisfactory dealings possessing a valid TRP Certificate. LOAN QUANTUM • Need based finance with a maximum of Rs. PROCESSING CHARGES • A lump sum amount of Rs.(Rupees Five hundred only) INSURANCE: • The assets created to be insured. the account should be properly introduced to the Bank and should satisfy other eligibility norms. For new customers.60000/-. with 3 months repayment holiday. MARGIN • A minimum margin of 15% on project cost REPAYMENT • • Entire loan together with interest shall be repaid within 60 months in step up EMIs. (Rupees Sixty thousand only).

A Study on loans and advances CANARA PENSOIN PURPOSE: • To meet the cost of medical expenses and other genuine needs ELIGIBILITY: • Pensioners of Central / State Governments / PSUs / Corporate Pensioners / Pensioners of Banks provided they all draw pension through our branches. QUANTUM : SSMRV COLLEGE Page 52 .

ELIGIBILITY: • All confirmed teaching / non-teaching staff working in a school / college . REPAYMENT : • Up to 36 months in EMIs.whichever is lower.000/.A Study on loans and advances • Ten month's pension amount or 1.drawing salary through our branches QUANTUM : SSMRV COLLEGE Page 53 .00. SECURITY : • Co-obligation of spouse / suitable person TEACHERS LOAN PURPOSE: • To meet any genuine personal needs.

REPAYMENT : • Up to 60 months.whichever is less. quick loan.00. • • Hassle-free. PROCESSING CHARGES: • 1% of the loan amount with a minimum of Rs.1.A Study on loans and advances • 6 months' gross salary or Rs..50/.000/. Reasonable rate of interest PURPOSE: Loan against gold jewellery / ornaments.16 Co-obligation where applicable SWARANA LOAN Let your idle gold also glitter. co-obligation and no guarantee required. SECURITY : • Suitable co-obligation DOCUMENTS/FORMALITIES : • • • Stipulated Loan Application with 2 passport size photographs Latest Salary Certificate and Form No. REPAYMENT: SSMRV COLLEGE Page 54 .

New customers -well introduced and creditworthy SSMRV COLLEGE Page 55 .2.A Study on loans and advances • The entire loan is to be repaid in 24 Equated Monthly Instalments ( EMI ) ELIGIBILITY: • Credit-worthy SB Account holders with satisfactory dealings or new customers properly introduced and credit-worthy.00.000/- DOCUMENTS & FORMALITIES: • • • Application for Swarana Loan Certificate by the Jewel Appraiser (Bank will arrange) Salary Certificate and Form No. against rents receivable.16 / income proof CANARA RENT PURPOSE: To provide loans to owners of the property to meet their business needs and / or genuine personal needs. QUANTUM: • Maximum Rs. ELIGIBILITY: • • Existing customers with satisfactory dealings.

by way of EMI. mortgage of alternative property also accepted provided the value of the property is 150 % of the loan amount. Selectively up to 84 months considered.A Study on loans and advances The property should have been leased / rented out to PSUs / Central / State / Govt. REPAYMENT: • Maximum 60 months or unexpired period of lease which ever is earlier. reputed corporate.2 copies each SSMRV COLLEGE Page 56 .5% of loan amount. QUANTUM: • Up to 75% of the gross monthly rent receivables for the unexpired lease period less TDS portion and advance rent collected. MNCs and banks including Canara Bank branch / office / quarters. financial institutions. insurance companies. Waiver considered selectively. value of which should be at least 100% of the loan amount. • • Assignment of lease rentals in favour of the Bank. DOCUMENTS / FORMALITIES: • Stipulated Loan Application with passport size photographs . PROCESSING CHARGES: • 0. Personal guarantee from person / s of adequate net worth acceptable to the Bank. SECURITY: • Equitable Mortgage of the leased property. undertakings. In exceptional cases.

A Study on loans and advances • • Copy of Lease Deed Income proof of the applicant and lessees (Salary Certificate. if available Title deeds of the property. SSMRV COLLEGE Page 57 . latest tax paid receipt.16 / Other proof) ITAO / IT Return / Wealth Tax Assessment Order. Form No. for most senior citizens and those nearing retirement the biggest fear is the need for money to live comfortably after retirement. EC. Legal Scrutiny Report Approved plan of building Certificate of balance if finance is availed against property from any other sources Annual Financial Statements for the past 2 years (in case of firms and companies) • • • • • CANARA JEEVAN REVERSE MORTGAGE LOAN SCHEME FOR SENIOR CITIZENS (RML) In the present scenario. Reverse mortgage loan scheme helps them to convert their dwelling house property into liquid cash flows to meet their living expenses.

OBJECTIVE: To meet the financial needs of Senior Citizens owning self occupied residential property. PURPOSE OF THE LOAN: • • • For supplementing pension/other income Maintenance of family. Property self acquired and self occupied as permanent primary residence and property free from encumbrances Residual life of property should be at least 20 year Incase of flats the age of the flat should not be more than 10 year. above 60 years of age. maintenance/insurance of residential property Meeting any other genuine need • • • ELIGIBILITY • Owners of residential house/flat. renovation and extension of residential property For uses associated with home improvement.A Study on loans and advances With this objective of meeting the financial needs of the Senior Citizens. namely “CANARA JEEVAN” . Medical. • • • SSMRV COLLEGE Page 58 .Reverse Mortgage Loan Scheme For Senior Citizens. emergency expenditure Repayment of an existing loan taken for the residential property to be mortgaged Up gradation. who are residents of India. a new loan scheme is introduced.

not more than 20 % of the eligible loan amount. • Period of Loan: Maximum 15 years. (*) • • (*) Loan amount including interest till maturity. at least one of them should be above 60 years of age and the spouse/joint borrower should be more than 55 years of age. SSMRV COLLEGE Page 59 . • In case of jointly owned properties the joint owner who is aged above 60 years shall be the first borrower. • DETERMINATION OF ELIGIBLE AMOUNT OF LOAN: • Depending upon the age of the borrower and the assessed value of the property. the payments shall be made during the loan period of 15 years or till the death of the last surviving spouse.A Study on loans and advances • Couples will be eligible as joint borrowers and in such cases.00 lacs.5.00 lacs . Commercial property not eligible under the scheme.00 lacs and maximum Rs. as under: • Periodic payments (monthly/quarterly) • One time Lump-sum payment. Incase of independent house Minimum loan quantum Rs.00 lacs and maximum Rs.50.25. (*) Incase of flats Minimum loan quantum Rs. flats/house. In case of periodic disbursement. NATURE OF PAYMENT: Nature of payment to be decided in advance as part of the RML covenants. whichever is earlier.5.

a.A Study on loans and advances INTEREST RATE: 10. DOCTORS CHOICE Complete solution to cater to the needs of medical practitioners PURPOSE: • Purchase of equipment SSMRV COLLEGE Page 60 . (fixed) with reset every three years. by way of Registered Mortgage or equitable mortgage with memorandum of deposit of title deeds in favour of the bank.50 % p. SECURITY: The loan shall be secured by way of mortgage of residential property. or permanently moves out of the house. REPAYMENT OF THE LOAN: • The loan shall become due and payable only when the last surviving borrower dies or would like to sell the house.

whichever is less MARGIN LOAN LIMIT Loans upto Rs.2 lacs for Working Capital) Term Loan (TL): Need Based Working Capital (WC): • • • 25% of previous years’ turnover or 25% of the expected turnover of current year or 2 times the Annual Net Income or • The ceiling amount mentioned above. ambulance. computers and other essential equipments Meet working capital needs ELIGIBILITY: • • All qualified registered medical practitioners A well established practice / experience of minimum 3 years LOAN AMOUNT: Maximum of Rs. Expansion / renovation / modernisation of exiting premises Purchase of vehicles. etc. X-ray lab.A Study on loans and advances • • • • Setting up of Clinic.000/SSMRV COLLEGE Page 61 BOTH TERM LOAN AND WORKING CAPITAL NIL .25.10 lacs (Sub-ceiling of Rs. Nursing Home.

00.00. salaried persons Customers having satisfactory dealings with our bank SSMRV COLLEGE Page 62 .00.2.A Study on loans and advances Rs.2..25. businessmen.5.000 Rs.10. ELIGIBILITY: • • Professionals..other than speculative purposes. ! For meeting genuine needs .00..000 10% 25% SECURITY: PRIME : Hypothecation of assets financed by the Bank : COLLATERAL : Loans upto Rs.000/Existing Assets. if any Existing assets and collaterals as stipulated by the Bank REPAYMENT : Term Loan – 5-7 years in monthly instalments / EMI a) OD Limit valid for one year b) Loan – repayable in 24-36 months in instalments / EMI Working Capital CANARA MORTGAGE Discover the power of your property .5.000/Beyond Rs.001 to Rs.00.001 to Rs.

5% of loan amount DOCUMENTS / FORMALITIES : • • • Stipulated Loan Application with passport size photographs . QUANTUM : • Up to 50% on the value of the property offered as security as per the valuation report of the bank's panel-valuer. Waiver considered selectively. GUARANTEE: • Personal Guarantee from person / s of adequate net worth acceptable to the Bank.A Study on loans and advances • New customers well introduced and credit worthy with satisfactory banker's / market reports on them. REPAYMENT : • Up to 60 months by way of EMI SECURITY: • Equitable Mortgage of property acceptable to the Bank having clear marketable title. PROCESSING CHARGES: • 0.2 copies each Copy of lease deed Income proof of the applicant and guarantor SSMRV COLLEGE Page 63 .

The resolving of problems by reducing the conditions that are in SSMRV COLLEGE Page 64 . and the resolving of knowledge into its original principles. latest tax paid receipt / Legal Scrutiny Report Approved plan of building Certificate of balance if finance is availed against property from any other source Annual Financial Statements for the past 2 years (in case of persons other than salaried individual • ANALYSIS AND INTREPRETATION Analysis Definition: The tracing of things to their source.A Study on loans and advances • • • • Income Tax Assessment Order / IT Returns Title deeds of the property / EC.

personality. two financial analysts may differ in their perceptions of what the market price of the company's stock should be. For example.A Study on loans and advances them to equations. after performing a detailed analysis of the financial statements of a company. A degree of subjectivity is involved on the part of the individual. TABLE 1 TABLE SHOWING THE AGE OF RESPONDANTS AGE 18-25 26-40 41-50 50&> TOTAL NO OF CUSTOMERS 4 10 28 8 50 PERCENTAGE 8% 20% 56% 16% 100% SSMRV COLLEGE Page 65 . Interpretation Definition: Opinion regarding a set of facts. A syllabus. or table of the principal heads of a discourse. disposed in their natural order. and biases. based on his or her experience.

INTREPRETATION: From the above table it is clear that the all age groups between 18 to 50&> are aware of CANARA BANK. 56% of the customers.e.A Study on loans and advances ANALYSIS: From this table we analyze that 8% of customers are from the age group of 18-25. 56% of customers are from the age group of 41-50. The maximum customers are from the age group of 41-50 i. and lastly 16% of customers are from the age group of 50&> respectively. GRAPH 1 GRAPH SHOWING AGE PROFILE OF RESPONDENTS AGE OF CUSTOMERS 50&> 16% 18-25 8% 26-40 20% SSMRV COLLEGE Page 66 41-50 56% . 20% of customers are from the age group of 26-40.


A Study on loans and advances From this above table 20% customers are from business category. 6% of customers are from retired category.e.e. maximum customers are of Employees category i. 10% are from student’s category and lastly 6% customers are from agriculture category. INTREPRETATION: From this above table showing occupation classification of customers. 20% of the total customers. 58% of the total customers and the second maximum are from Business category i. GRAPH 2 GRAPH SHOWING OCCUPATIONAL CLASSIFICATION OF CUSTOMERS OCCUPATI ON OF CUSTOMERS 30 25 20 15 10 5 SSMRV COLLEGE Page 68 0 BUSINESSEMPLOYEE RETIRED STU DENT AGRICULTURE . So many of them customers are Employees and Business men's. 58% of customers are from Employees category.

SSMRV COLLEGE Page 69 . 8% customers are transacting with the CANARA BANK for less than 5 years.A Study on loans and advances TABLE 3 TABLE SHOWING ASSOCIATION WITH THE BANK NO OF YEARS <5 YEARS 5-15YEARS 15YEARS&> NO OF CUSTOMERS 4 10 36 PERCENTAGE 8% 20% 72% ANALYSIS: From the above table showing association with the bank. and 72% customers are transacting with the bank for more than 15years. 20% customers are transacting with the same bank for between 5 to 15 years.

This is very much advantageous to the bank. The bank has many customers from many years.A Study on loans and advances INTREPRETATION: From the above table showing customers association with the bank. GRAPH 3 GRAPH SHOWING ASSOCIATION WITH THE BANK ASSOCIATION WITH THE BANK <5 YEARS 8% 5-15YEARS 20% <5 YEARS 5-15YEARS 15YEARS&> 15YEARS&> 72% SSMRV COLLEGE Page 70 . the maximum customers transacting with the bank from about more than 15 years i. 72% of the total customers.e.


20% of the respondents are not satisfied with the services provided by the CANARA BANK.A Study on loans and advances From the above table it is shown that 80% of the respondents are satisfied with the services provided by CANARA BANK. maximum no of respondents i. INTREPRETATION: From the above table showing the respondents satisfaction towards the services provided by CANARA BANK.e. 80% of the total respondents largely satisfied with the services provided by the CANARA BANK. GRAPH 4 GRAPH SHOWING OPINION OF RESPONDENTS TOWARDS THE SATISFACTION TOWARDS THE SERVICES PROVIDED BY THE CANARA BANK SATISFACTION TOWARDS THE SERVICES PROVIDED BY THE BANK 45 40 35 30 25 20 15 10 0 YES NO NO OF RESPONDE NTS SSMRV COLLEGE Page 72 5 .


80% of respondents have availed the loan from the bank and 20% have not availed any loan facility from the bank INTREPRETATION: From the above table showing opinion of respondents who have availed loan facility. GRAPH 5 GRAPH SHOWING OPINION OF RESPONDENTS WHO HAVE AVAILED LOAN FACILITY NO OF CUSTOMERS WHO HAVE AVAILED LOAN FACILITY 40 35 30 25 20 15 SSMRV10 COLLEGE Page 74 5 0 YES NO NO OF CUSTOMERS WHO HAVE AVAILED LOAN FACILITY . 80% have availed loan facility from the bank. maximum respondents i.A Study on loans and advances From the above table showing opinion of respondents who have availed loan facility.e.


38% of customers have availed house loan. 22% of customers have availed vehicle loan.A Study on loans and advances From the above table given. 38% of the total customers. the maximum customers have availed house loan i. INTREPRETATION: From the above table given. and lastly 15% of people have availed educational loan. GRAPH 6 GRAPH SHOWING TYPES OF LOAN AVAILED BY THE CUSTOMERS T YPES OF LOANS EDUCATIONAL LOAN VEHICLE LOAN PERSONAL LOAN HOUSE LO AN 6 9 1 0 1 5 0 5 10 15 20 SSMRV COLLEGE Page 76 NO OF CUSTOMERS . 25% of customers have availed personal loan. Hence many of the customers are focused towards the property.e.

SSMRV COLLEGE Page 77 .A Study on loans and advances TABLE 7 TABLE SHOWING OPINION OF RESPONDENTS TOWARDS THE EASY REPAYMENT OF LOAN OBJECTTIVE EASY REPAYMENT OF LOAN PERCENTAGE YES 43 87% NO 7 13% ANALYSIS: From the above given table. 12% of respondents are not satisfied with the easy repayment of loan. 88% of respondents are satisfied with the easy-repayment of loan and easier also.

A Study on loans and advances INTREPRETATION: From the above table. The bank should pay attention to 12% of respondent who are not satisfied with the repayment of loan GRAPH 7 GRAPH SHOWING OPINION OF RESPONDENTS TOWARDS THE EASY-REPAYMENT OF LOAN EASY REPAYMENT OF LOAN NO 13% YES 87% SSMRV COLLEGE Page 78 . maximum respondents of 88% are satisfied with the repayment of loan.

A Study on loans and advances TABLE 8 TABLE SHOWING OPINIONS OF RESPONDENTS TOWARDS THE RATE OF INTEREST OBJECTIVE RATE OF INTEREST PERCENTAGE YES 35 70% NO 15 30% ANALYSIS: From the above given table. 70% of respondents are satisfied with the rate of interest of each type of loan and 30% of respondents are not satisfy INTREPRETATION: SSMRV COLLEGE Page 79 .

A Study on loans and advances From the above table given the Maximum respondents of 70% are satisfied with the rate of interest and the bank should pay attention to the remaining 30% of the respondents who are not satisfied with the rate of interest. GRAPH 8 GRAPH SHOWING OPINION OF RESPONDENTS TOWARDS THE RATE OF INTEREST RATE OF INTEREST NO 15 RATE OF… YES 35 YES RATE OF INTERESTPage 80 35 SSMRV COLLEGE NO 15 .

INTREPRETATION: SSMRV COLLEGE Page 81 .A Study on loans and advances TABLE 9 TABLE SHOWING OPINION OF RESPONDENTS TOWARDS THE REPAYMENT OF LOAN OBJECTIVE MONTHLY QUARTERLY NO OF CUSTOMERS 35 15 PERCENTAGE 70% 30% ANALYSIS: From the above given table. 70% of customers wants the repayment of loan to be done monthly and 30% of the customers wants the repayment of loan to be done quarterly.

A Study on loans and advances From the above given table. the maximum no of customer are of 75% who wants the repayment of loan to be done monthly. The bank should also pay attention for the remaining 25% of customer who wants the repayment of loan to be done quarterly. GRAPH 9 GRAPH SHOWING OPINION OF RESPONDENTS TOWARD THE REPAYMENT OF LOAN OPINION OF REPAYMENT OF LOAN Q UARTERLY 25% MONT HLY 75% MON THLY QUAR TERLY SSMRV COLLEGE Page 82 .

SSMRV COLLEGE Page 83 .A Study on loans and advances TABLE 10 TABLE SHOWING RECOMMENDATION TO FRIENDS AND RELATIVES OBJECTIVE RECOMMENDATION TO FRIEND/RELATIVE PERCENTAGE 90% 10% YES 45 NO 5 ANALYSIS: From the above table given. 90% of customers said that they will recommend taking any type of loan from CANARA BANK and 10% of customers have said no.

the bank should pay attention to the less percentage of customers who said that they will not recommend anyone to avail any types of loans. GRAPH 10 GRAPH SHOWING RECOMMENDATIONS TO FRIENDS AND RELATIVE RECOMMENDATION TO FRIEND/RELATIVE YES 90% NO 10% YES NO SSMRV COLLEGE Page 84 .A Study on loans and advances INTREPRETATION: From the above table given.

Maximum respondents are from the age group of 41-50 i. This shows that all age groups between 18 to 50&> are aware of the Bank.e.e. 8% of respondents of the sample. The summary of the research undertaken is as below: The study comprises of different age groups from 18 to 50&>.e. 6% of respondents and lastly the fourth maximum respondents are from the age group of 18-25 i. The second maximum respondents are from the business SSMRV COLLEGE Page 85 .e. The third maximum respondents are from the age group of 50&> i.  As we observe from the study which comprises of occupation of respondents. The second maximum respondents are from the age group of 26-40 i. as it is the easy means of getting finance. the first maximum respondents are from the Employees category that forms 58% of respondents.A Study on loans and advances SUMMARY OF FINDINGS The research has been conducted by the questionnaire method by considering sample size of 50. 56% of respondents. The research reveals that the people have availed loan from the bank. 20% of respondents.

 An observation says that 88% of respondents are satisfied with the easy repayment of loan and 12% of respondents are not satisfied. 25% of respondents have availed personal loan. 20% of respondents have been transacting with the bank between 5 to 15 years and recent 8% of customers who have been transacting with the bank are less than 5 years.  As we observe from the study it is clear that 80% of respondents are satisfied with the services provided by the Bank and 20% of the respondents are not satisfied. About 80% of respondents have availed the loan from the Bank.  The no of respondents who have availed loan from the bank has been revealed from this study. SSMRV COLLEGE Page 86 . The third maximum of respondents are from student’s category that forms 10% of respondents.  The study reveals that the 72% of respondents have been transacting with the bank for more than 15years. personal loan. 22% of respondents have availed vehicle loan and 15% of respondents have availed educational loan. Majority of respondents have availed house loan that forms 38% of respondents. vehicle loan and educational loan.  This study reveals that the different types of loans such as house loan.A Study on loans and advances category that forms 20% of respondents. The fourth maximum respondents are from the retired and agriculture category that forms 6% respectively.

70% of respondents feel that they are satisfied with the interest rates charged and 30% of them are not satisfied.  The documentations should be reduced and they should stick to the documents mentioned in brochure rather than asking for more and more documents.  As we observe from the study.A Study on loans and advances  As the Bank provide the loans by charging interest.  Observations says that 75% of respondents want the repayment of loan to be done monthly and 25% of customers wants the repayment of loan to be done quarterly. which will be useful for the students and also SSMRV COLLEGE Page 87 .  The Bank should pay attention to the small percentage of respondents who have said that they will not recommend taking loans from their Bank to their friends and relatives. the study reveals the satisfaction of interest rates provided by the bank.  The Bank should try to reduce the interest rates of educational loan as it is more compared to other bank.  The Bank should pay attention to the small percentage of respondents who are not satisfied with the easy repayment of loan and interest rates charged. 90% of respondents said that they will recommend taking any type of loan from the Bank to their friends and Relatives. SUGGESTIONS  All loans should be sanctioned in a shorter period of time. if the required documents are proper and the loan should be disbursed quickly.

 Attempts can be made to extend more loan facilities for rural sectors.A Study on loans and advances introduce special schemes for students who want pursue their higher education abroad.  E-Banking facilities should also be improved more so that he loans can be availed very easily through online.  The Bank’s ATM’S are a good place to increase awareness of its Bank’s loan product because many individuals do not have time to go to enquire product. as their net income will not be able to meet their expenses.  The Bank has to advertise about new branches that are opened which will in turn increase the number of walk-in to the Bank and which will increase in the sale of every loans. whose incomes are directly deducted from their account.  The Bank has to simplified policies and procedures for advances to public. can be considered as prompt borrowers who can avail concessional interest or discount on processing fee.  Salaried class of customer. SSMRV COLLEGE Page 88 . These customers must be provided with the flexible repayment policy to meet unforeseen periods of financial difficulties.  Lower income group who have availed loan which are directly deducted from salaries are facing lot of problem.

By this the research was successful and depends on how well and flexible are strategies planned and implemented. The respondents are satisfied with the services provided by the Bank. Vehicle loan and Educational loan. the various types of loans availed by them are House loan. Personal loan.A Study on loans and advances CONCLUSION:The research conducted on “Loans and Advances at CANARA BANK”. SSMRV COLLEGE Page 89 . we can conclude that the CANARA BANK is earning a good profit. From the various findings done. The respondents are satisfied with the repayment of loan and rate of interest charged.

I am IMAM HUSSAIN doing my undergraduate Management Course (BBM) at S. IMAM HUSSAIN 1) NAME 2) AGE : : 18-25 41-50 26-40 50 & Above 3) OCCUPATION : Employees/services SSMRV COLLEGE Page 90 . kindly spare your valuable time in filling up this questionnaire.R.V DEGREE COLLEGE. This is compulsory for the completion of my degree. I am conducting a survey on “loans and Advances at CANARA BANK”.S.A Study on loans and advances QUESTIONNAIRE Dear Sir/Madam. So.M. I thank for your co-operation.

A Study on loans and advances Business Retired Student Agriculture Others specify 4) Since how long are you related with this Bank? 5) Are you satisfied with the services provided by the Bank? YES NO 6) Have you availed any loan facilities of this Bank? YES 7) If yes which type of loan? home loan vehicle loan Others specify 8) Does it facilitate easy re-payment of loan? YES NO personal loan Educational loan NO 9) How would you like the repayment of loan to be done? MONTHLY QUARTERLY 10) Are you satisfied with the rate of interest? YES NO SSMRV COLLEGE Page 91 .

wikipedia.com  www.com SSMRV COLLEGE Page 92 .researchandmarkets.A Study on loans and advances 11) Would you recommend your friend/relative to avail this loan? YES 12) If NO why? NO BIBILIOGRAPHY WEBSITES:  www.com  www.thehindubusinessline.com  www.Canara bank.

A Study on loans and advances BOOKS:  Canara Bank Manual  Canara Bank check list  Loan Application forms SSMRV COLLEGE Page 93 .