A

PROJECT REPORT

ON

“A STUDY ON LOAN APPRAISAL PROCESS AT

THE NANDURA URBAN CO.OP.BANK LTD NANDURA”
(scheduled bank)

A Report Submitted to

Rashtrasant Tukadoji Maharaj Nagpur University.

In fulfillment of the requirement of

Master of Business Administration

Specialization in Finance & Marketing

Academic Session: 2021_2022

Submitted by Sachin Satao

Project Guide Dr. Anant Deshmukh

Department Of Business Management,

Rashtrasant Tukadoji Maharaj Nagpur University,Nagpur
 CERTIFICATE

This is to Certify that Sachin Satao is a bonafide Student of the Master of Business Administration
(MBA) course specialization in Finance & Marketing For Academic session 2021_2020 of the RTMNU,
Department Of Business Management, Nagpur.

The Candidate has worked under the supervision of Dr. Anant Deshmukh and has satisfactorily finished her
project work in this academic session. The project submitted by her is her own work and is complete so as to
warrant its presentation for examination.

His project work titled “A Study On Loan Appraisal Process At The Nandura Urban Co.Op.Bank Ltd
Nandura” (Scheduled Bank) which is in partial fulfillment of the requirement for the above course, is being
forwarded to Rashtrasant Tukadoji Maharaj Nagpur University for examination.

Dr. Anant Deshmukh

Project Guide
RTMNU, Department Of Business Management
Nagpur
Date:
 DECALARATION

I Sachin Satao, hereby declare that with the exception of suggestions and guidance received from my

Supervisor, Dr. Anant Deshmukh, this project work titled “A Study On Loan Appraisal Process At The

Nandura Urban Co.Op.Bank Ltd Nandura” (Scheduled Bank) is my own hard work. This report as one, which

is substantially the same as this, has not been submitted by me for any other examination of this University or

any other University.

Date: Mr.Sachin Satao

Place: Nagpur MBA IV SEM

 Acknowledgement

The compilation of the dissertation in the present form would not have been possible but for
the valuable guidance, assistance, encouragement and contribution of various people at
different stages of time.

I am grateful to my guide, Dr. Anant Deshmukh, who helped me to organize my

thoughts, work and study so as to compile this project report. It was due to his constant
guidance and support that I was able to study the topic in a detailed and analytical manner.

I would also like to thank, Dr Anant Deshmukh (H.O.D) of, RTMNU,

Department Of Business Management, Nagpur, for giving me the opportunity to present this
report.

Mr. Sachin Satao

MBA IV SEM

Page | 4
 Table Of Contents

Sr. No. Content Page No.

1. Acknowledgement
4

2. Chapter I :Introduction
1.1 Objectives of the study
1.2 Need of the study 8
1.3 Scope of the study
1.4 Limitation of the study
3. Chapter II :Organisational Profile
13
4. Chapter III : Research Methodology
21
5. Chapter IV : Literature Review
24
6. Parties Of Process & Process Of Finance
27
7. Chapter IV :Data Analysis & Interpretation
Case Study I, Case Study II 30
8. Reason Of Rejected Loan Case
47
9. Chapter V :Observation & Findings
51
10. Chapter VI :Suggestions & Recommendation
52
11. Conclusion
54
12. Biblography
55

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 Executive Summary

Project Name : “A STUDY ON LOAN APPRISAL PROCESS AT THE

NANDURA URBAN CO.OP.BANK LTD”

Industry Type: Banking

Duration : 8 weeks

The project assigned to me was to study how to the loan process actually works. Also other
work which was assigned to me was to thoroughly study the loan case study those borrower
borrow the money instent of the mortgage property in this report.

Through a thorough study and analysis, my aim is to study loan policies & sanctioning
procedure of the co-oprative societies. To study te credibility of a borrower by the co-
oprative societies.

The project work entitled “A STUDY ON LOAN APPRISAL PROCESS AT THE

NANDURA URBAN CO.OP BANK LTD.” is an attempt to analyze performance and
efficiency of the Bank. The Banks are operating in a highly competitive market and it is
important to know the pulse of the market to keep moving beyond the competitors. The
project work had been a good experience. It acted as a bridge between institute and the Bank.
The test of success of a business enterprise is its ability to earn profit and continue its
operation and growth. Profit may be considered as an index of success. It is really a
challenging task to sustain in such a market which is already flooded with many competitors.

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INTRODUCTION

Page | 7
1.1 OBJECTIVE OF THE STUDY:
Every research has some specific objective or purpose. For accomplishing the
objective, he go on through the different stages of project work such as
selecting methodology, finding, observation, conclusion
Following are the objective of project work:

1. To study the loan policies & sanctioning procedure of the co-oprative societies.

2. To study the various problems faced by borrowers as well as banker

regarding loan.

3. To study the credibility of a borrower by the co-oprative societies.

The analyses of loan procedure helps to know the overall procedure of loan sanctioning,
recovery of it and there conditions regarding loans. It also helps to know the various
suggestions to overcome the problems and helps for future growth

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1.2 Need of the study:-
1. A project report help to evaluate the organization objective, to what extent they are
achievable. For this purpose, an entrepreneur is expected to consider the input data
analysis the data, predict outcome, choose best alternative, take action, measure result
with prediction.
2. Eventually the importance of this project is mainly to understand the credit appraisal
techniques used by the special reference to “Nandura Urban Co. Bank LTD”

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1.3 Scope of study:-
Loan has been one of the important economic activities in India which serves
to providing money to needy, raising the quality of life particularly that of the poor,
creating an environment conducive for better health sanitation, creating additional
employment, achieving urban rural and interpersonal equity in terms of standard of
living and above all, generating additional voluntary savings at all levels. Loan
peocess is important to development aspects. It is a way to improve the standerd of
leaving as will as help to the poor people those who are wants to starts new business.
It is relevant not only in terms of improving the quality of life, but also in terms of
capital formation by encouraging savings. According to the national statistics of the
‘Central Statistical Organization’ (CSO) that contribute a great part in GDP, it is a
good source of capital formation

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1.4 Limitation of study:-
 The time was very limited as for requirement of study.
 Sample as carried out the study.Therefore, all the limitations
with sample.
 Sometime the respondent does not want to disclose some
relevant information
 The information provided by the respondent may not be
authentic.

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ORGANISATIONAL PROFILE

Page | 12
2.1 ABOUT NANDURA URBAN CO-OPRATIVE BANK Ltd.

Passion for people and their lives, compassion for their adversities and needs, respect for
values and discipline, focus on humanity, concern for society, an unwavering faith in the
principle of co-oprative, all this and much more is at the root of India larestt co-oprative
credit society The Nandura urban co-oprative Bank Ltd Nandura.

Co-oprative leads to prosperity are committed to the welfare of the society. With this belief,
Nandura Urban was established way back in 16 April 1996. It was a time when people
viewed co-oprative with distrust. Nandura Urban was a pioneering credit society that
reinstated the trust by connecting itself to people in more ways than one. Being run and
regularized by people, it worked flawlessly and relentlessly for the benefit of the people and
their day-to day problem.

Nandura Urban initiated “micro finance”, a facility that supported and transformed countless
common lives. It went beyond finance to enrich and empower the common man, with an
array of socio-economic activities. It took co-oprative movement to the grass root level and
utilized it to uproot problem. By procuring secured finance to the farmers and offering
solutions to their problems such as storage and distribution of their products, Nandura Urban
gave them economic stability and confidence.

It has been a trailblazing journey since its inception. Today Nandura Urban stands tall with a
well-connected network of 21 Branches across Maharastra and a number of firsts to its credit.
Nandura Urban is the first credit society to core banking. Its deposit have exceeded 254.59cr
and loan recovery is at 97% to 98%

Nandura Urban as proudly extended its activities In the state of Maharashtra. The society is
an epitome of reliability and a fine blend of traditional values and professionalism. This
miraculous progress is a result of visionary leadership, seamless process, perfect co-
ordination, excellent teamwork, customer oriented approach and total trust of the account
holders.

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2.2 MISSION/VISION/AIM

Following are the vision and mission of the Nandura Urban co-op Bank

2.1.1 VISION:

To be a multi-faceted, world-class financial entity rooted in co-oprative and social

responcibility.

1. To establish at least one branch of Nandura Urban every single district of Maharastra
2. To construct godown (warehouse) wherever required.
3. To achive 0% N.P.A (Non-Performance Asset)

2.1.2 MISSION:-

To work with strategic focus on excellent quality, affordable cost, timely delivery and
customer satisfaction.

1. To shoulder our responsibility as a global citizen.

2. To go beyond finance to ensure sustainable economic future of the common man.

2.3 BOARD OF DIRECTOES

Following are the Board of Directors of Nandura Urban co-op Ltd. Nandura.

 Mr. Pralhad Bharambe (chairman)

 Mr. Jagannath Supdaji Dange (voice chairman)
 Mr. Champalal Radhakishanaji Zawar (Manaigng Director)
 Mr. Vitaldas Gangadasji Daga (Director)
 Mr.Satram Madhvlalji Harunani (Director)
 Mr.Arun Haribhau Pandao (Director)

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  Mr. Satram Madavlalji Harunani( Director)
 Mr. Arun Haribhau Pandao( Director)
 Mr. Bhartkumat Mohanlalji Butada(Director)
 Mr. Sahebrao Sonaji Javre( Director)
 Ms. Anup Prabhakar Kolte(Director)
 Miss. Ashadevi Prakash Kandelwal(Director)
 Mr. Ganesh Surajmal Natthani( Director)
 Mr. Sumandevi Rakesh Mihani(Director)
 Mr. Suresh Pralhad Rane (CEO)

2.4 PRODUCTS OF NANDURA URBAN CO-OPRATIVE BANK LTD

 Easy Access Saving Account.

 Prime Saving Account.
 Senior Citizens Saving Account.
 Current Account.
 Term Deposits.
 Depository Services
 Credit Loans.

2.5 SERVICES PROVIDED BY THE BANK TO TE CUSTOMER

 Any branches banking

 PAN card
 SMS banking
 Locker Facilities
 Demand Draft(DD)
 Telephonic Transfer(TT)
 Money Transfer.
 ITZ Services (Mobile recharge, Dish TV recharge etc.)
 Real Time Gross Settlement (RTGS), National Electronic Fund Transfer (NEFT)
 New Indian Insurance.

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2.6 FOLLOWING DIFFRERNT TYPES OF LOAN ARE GIVEN BY
NANDURA URBAN CO-OPRATIVE BANK LTD.

 Loan to Shopkeepers/Traders/Manufactures/Distributors etc.

 Personal loan to self employees/salaries persons.
 Loan for self employed and professionals for business/profession.
 Loans to SSI Units for acquitting Gala in Industrial Coop Society for purchasing
machinery, for working capital.
 Loans to Industrialists for manufacturing/business.
 Loan against fixed deposit.
 Loans against NSC certificates/LIC policy.
 Loan against Gold.

 Loan against vehicle.

Nandura Urban co-optative Society devised special loan scheme to meet the requirement of
various borrowers. Rebate is given to General Loans repaid regularly.

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What is “Bank”?
A bank is a financial institution that provides banking and other financial services to
their customers. A bank is generally understood as an institution which provides
Fundamental Banking Services such as accepting deposits and providing loans to
trade, commerce, agriculture as well as individuals in the economy.

History Of Banking:
The pre-independence period was largely characterized by the existence of private
banks organised as joint stock companies. Most banks are small and had private
shareholding of the closely held variety. They were largely localized and many of
them failed. The period from 1967 to 1991 was characterized by major developments
like social control on banks in 1967 and nationalization of 14 banks in 1969 and 6
more in 1980. The period beginning from the early 1990s witnessed the
transformation of the banking sector as a result of financial sector reforms that were
introduced as a part of structural reforms initiated in 1991.
From 1991 to current date so many innovations and advancing is made in Indian
banking and its functioning like Mobile banking, Net banking, Plastic money ie.
ATM, Debit card, Credit card. Currently there are different types of schemes
providing by Banks. New government has launched program link “JAN DHAN
YOJANA” which motivate as well as attract common people to go with bank and
save money because the account can be open in that scheme with ‘Rs 00’. And other
program was launched i.e. Digital India, which motivates to maintain balance in
account of person for making transactions of purchase and sales.
Reserve Bank of India It is a central bank of India It regulates all other banks comes
under it. All decisions regarding supply of money, printing notes, monetary policies
are taken by RBI. Banking Regulation Act 1949: The Banking Regulation Act,
enacted in 1949, has been a milestone in the history of banking in India. This act
provide a framework for regulation and supervision of commercial banking activity

Page | 17
 INDIAN BANKING STRUCTURS:-

RESEARVE BANK OF INDIA

SCHEDULE COMMERICAL BANK SCHEDUAL

CO-OPRATIVE BANK

PUBLIC SECTOR BANK SCHEDUAL URBAN CO-

OPRATIVE

NATIONALISED BANK SCHEDUAL CO-OPRATIVE

BANK

SBI

PRIVATE SECTOR BANK FOREIGN BANK

OLD PRIVATE BANK RBIS

NEW PRIVATE BANK

In India. It is necessary to have a licenser form the Reserve Bank under section 22 of Banking
Regulation Act for commencing or carrying on the business of banking. Every Banking
sector has to use the word “Bank” as part of its name under section 7 of the Act and no
company other than a carrying company can use the words “Bank”, “Bankers”, “Banking” as
part of its name.

The present economic growth of the world represents the potential of banks. In the
absence of bank there may be stable growth chances. The role of banks in developed and
under developed countries is remarkable important. In the country like India bank have a
enouch scope to play their skillful roles. We know that India is under developed country

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so banks are expected to generate funds to invest as seeds to grow to fruit of development.

The feature of Indian economy are under developed country over population lack of per
capita income, unequal distribution of wealth, so to overcome these problems banks play
most important role with the help of following points:

1. To mobilization of savings
2. To provide the finance to the various sectors to promote and to regulate smoothness of
economy in India.
The co-operative banks are organize and managed on the principal of co-operations,
self-help and mutual help. The co-oprative bank arrived in India in the beginning of
20 century as official efforts to create a new type of institution based principals of co-
oprative bank were conceived as substitute for money lenders, to provide timely and
adequated short term institution credit at reasonable rates of interest.
The co-opreative banking structure in India is divided into following main five
categories:
1. Urban co-oprative Bank
2. Agriculture credit societies
3. District co-oprative Bank
4. State Co-oprative Bank
5. Land Development Bank

The present reseaech study focuses on the financial of the loan procedure of the Nandura
Urban co.op LTD Nandura. Researcher has chosen the bank in co-oprative sector for study
purpose. The Nandura Urban co. op LTD. Is one of the lending co-oprative bank in
Maharastra state. Bank always in front liner to help the financially weaker section in society,
for accepting deposits as well as grating loam band creates self and mutual help to the
society. The present topic is the loan procedure of the Nandura Uran co.op Bank Ltd.
Contains overall process of loan sanctioning as well as recovery. It also contain what are the
problem faced by bank regarding borrowers and bankers there to.

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RESEARCH METHODOLOGY

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4.1 MEANING OF RESEARCH METHODOLOGY:

4.1.1 Meaning:-

Research in common sense refers to a search for knowledge. Research simply put os an
endeavor to discover the answer to problem through the application of scientific method to
the knowledge universe.

Research is important for systematic enquiry seeking fact through objective and eligible
method in order to discover the relationship among them and from broad principles or laws. It
is really a methid of critical thinking. The defining and redefining problems, formulations
hypothesis or suggested solution and at least, carefully testing the conclusion to determine
whether they fit the formulated hypothesis. Thus, the term research conclusion, In the light of
facts discovered newly.

4.1.2 Definition:

“Research is the investigation of the underlying process operative in the lives of persons who
are in association”

4.2 Types of research methodology:

There are basic two types of Reseaech Methodology. Thse are as follows:

4.2.1 PRIMARY DATA

The required data was collected by way of distribution of questionnaires to investors at

random and by way of telephonic interviews and online distribution questionnaire.

Tools/ technique of data collection

 Presonal Interwiew
 Observation
 Survey conduction

4.2.2 Secondary data:

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Already existing data is collected secondary data. I am collected them by following method.

 Internet
- www.rbi.com
 Book
- Financial management
- Annual report of Nandura Urban co-op.society Ltd, Nandura

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Literature Review

Page | 23
5.1 Literature review:-

The chapter is different existing literature of different scholars, the definition of loan
management is a bank provide a loan that a person better known as the borrowers, owes to a
bank. Its basically an agreement between the borrower and the bank about a certain amount
of money that the borrower will borrow and then pay the back in specific increment at a
specific interest rate.

1.1 Determinants of Non-Performing Loans at Traditional Banks

Before examining the existing literature on non-performing loans (NPL), it is necessary to

define several terms within the context of this paper and the related literature. The terms
“traditional bank” and “traditional lenders” are used within the scope of this paper to identify
non-MFIs from MFIs. In other words, “traditional banks” refers to financial intermediaries
and lending institutions that are not MFIs. Within the category of traditional banks there are
of course numerous types of lenders. For example, lenders may target specific business
sectors or consumers. However, much of the literature on loan performance does not
segregate between the types of lender, but rather looks at an aggregate metric of loan
performance. While much of the empirical work1.1 Determinants of Non-Performing Loans
at Traditional Banks Before examining the existing literature on non-performing loans (NPL),
it is necessary to define several terms within the context of this paper and the related
literature. The terms “traditional bank” and “traditional lenders” are used within the scope of
this paper to identify non-MFIs from MFIs. In other words, “traditional banks” refers to
financial intermediaries and lending institutions that are not MFIs. Within the category of
traditional banks there are of course numerous types of lenders. For example, lenders may
target specific business sectors or consumers. However, much of the literature on loan
performance does not segregate between the types of lender, but rather looks at an aggregate
metric of loan performance. While much of the empirical worker viewed here uses aggregate
loan data, it should be noted that the data primarily are drawn from a conglomerate of
commercial, retail and housing loans.

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Furthermore, comparison across different types of lenders is the most appropriate benchmark
for the empirical analysis of MFIs. Borrowers that take out microloans may do so for a
number of reasons—entrepreneurial, housing, consumption smoothing, life events or natural
disasters among other reasons. In order to analyze loan performance based on the type of
loan, it would be necessary to have loan-level data from MFIs. Since such data is not
available, this paper follows the literature on aggregated loan performance. The phrase non-
performing loans (NPL) is a catch-all term that refers to all loans that have not been repaid

according to schedule. The exact definition varies from study to study, and there is no

defined formula for NPL. Typically NPL are measured as some ratio of the sum of loans in
arrears plus loans in default over the loan portfolio. In other words, it is usually the percent of
the gross loan portfolio that has missed a payment or has defaulted. Given the general
definition of NPL above, there are two primary values that constitute NPL—loans in arrears
and loans in default. Classifying late loans is relatively straightforward and unambiguous. If a
borrower has missed a payment for a predetermined amount of time, that loan is said to be in
arrears. For example, 90-day portfolio-at-risk (PAR90) is the value of the loans that are at
least 90 days overdue. There is, however, some variation in the categorization of arrears
across empirical work that renders direct comparison between studies problematic. Banking

institutions may be required to report portfolio-at-risk for different time intervals according
to their 11 regulatory agencies. For example, banks in one country may be required to report
PAR60 while banks in another country are required to report PAR270. Despite the
differences in portfolio at risk, the literature generally finds the benefits associated with
cross-country estimation to be informative.

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6. Parties involve in Project Financing

1. Sponsors

2. Lenders

3. Input supplier

4. Operator

5. Financial Advisor

6. Technical Advisor

7. Legal Advisor

8. Insurance Provider

9. Regulatory Agencies
10. Off – Takers

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6.Process of Project Finance

1} Arrival of customer demanding loan for starting of new project or want to expand old
business plant.
2} Oral enquiry about customer, his business, and need about taking credit is done by an
officer.
3} After oral communication an officer get filled the nominal information form which is
called as an interview form which include all detail information regarding project.
4} Then an officer study the form if he get the person is genuine, background of project are
legal, there will be no issue about environment like pollution due to activities into business,
plant, factory etc. he will pass that form to senior officer.
5} Senior officer also study and give permission to create a loan case.
6} After getting permission an officer provide an application form, list of documents
required as per nature of business.
7} At first they take photocopy of all the documents for prior process.
( For sanctioning of any Loan There are two parts ‘Prior’ and ‘Final’)
8} If in prior an H O get all things genuine and legal then case is ready to get final.
9} In the final stage of the case all the original documents are collected and separate folder
is maintained for it.
10} The final case is transfer through an officer to Head Office to finalize the case and give
permission to pay amount of loan to the customers.
11} After all formalities the loan amount will be given to the customer.

Documents required for Loan case:

1. Application Form Of Loan

2. Borrower must be the member of Bank (Holder of Share)
3. No Due’s Form (Borrower haven’t any outstanding loan)
4. Income Tax Return ( of last 3 years)
5. KYC (Know Your Customer) of individual or parteners

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a. Adhar card (Photo copy)

b. Pan Card (Photo copy)

c. Electricity bill

d. Passport size Photo

5. Firm Documents-Shop Act ,License of the Firm

6. Balance Sheet
-Audited Balance Sheet
-Provisional Balance Sheet
-Projected Balance Sheet
7. Partnership Deed ( if there are partners )

8. Rent Agreement ( if any proprty of business is taken on rent )

9. Property to be Mortgage
-Xerox copy of Sale Deed
-Tax Receipt
-Sanction Map & Construction
10. Permission of Environment Department

11. Account Statement

-Current Account Statement

-Loan Account Statement-Permission
-Sanction Layout
12. KYC of Guarantors -Two Guarantor, Sub document of property, Tax

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Data Analysis & Interpretation
Case Study I

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Case Study 1-
Age Applicant Age-29 yr.
Name of Firm Thokal Multispeciality Dental Clinic
Product Code Term Loan
Constitution Doctor
Contact details Mob:-9623334574
Business activity Hospital Business
Address of firm At-Near Railway gate, Akot Road, Banosa,
Daryapur, Amravati, Pin- 444803
Address of Residence At-Sangludkar Nagar, Akot Road, Daryapur,
Amravati, Pin- 444803
Standing Newly Started
Banking Relation with us Newly connected Saving A/c-2002324426
Other bankers N. A.
Purpose of application with us
1. A Term Loan for Hospital Machinery &
furniture of Rs.-12.00 LAC.

Security for Term Loan Mortgage property for the loan are
1) S.No-12/1, N. Sheet No-41, Plot No-1660
Ward No-10 Tq- Daryapur Dist- Amravati-
444803.

Area of plot-111.48 Sq. Mts or 1200 Sq. Ft.

Valuation of land & building of FDV Rs.-
20.00 Lac.
Guarantor Name 1.Mr. Morey Sureshingh Govinsingh
2.Mr. Kale Ramesh Narayanrao

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Remarks:-
The Applicant Family relation with us from Branch opening & enjoying Saving, Daily
Deposit etc. Facility. The applicant newly connected with Bank. The applicant have
completed degree in BDS (Bachelor of dental surgery) from Saraswati Dhanwantrari Dental
College & Hospital, Parbhani in year-2014, the passing Certificate & Degree Certificate
attached with application from. Also he can successfully completed internship. Applicant
have approximate one & half years experiences.
Now Applicant want to start his own clinic in daryapur. The Applicant made registrar of
clinic under Maharashtra State Dental Council Mumbai. The photo copy registration attached
with loan file. The applicant age 24 year old. The applicant demand loan for hospital
machinery & furniture. The applicant submitted project report and as per project report
applicant demanded loan Rs-12.00 lac. The Applicant offer mortgage property is on the name
of applicant mother. We have taken mother as guarantor & also taken “No Objection letter”
of mother. The applicant mother is housewife & don't have any income.
The applicant can not taken any Education loan at time completion of BDS Degree.
The Mortgage Property NA copy & Mortgage Property Sanction Map also attached with

Application From as per R O Amravati Demanded.

INTRODUCTION:-

Project cost & Mean of Finance

Sr no. COST OF PROJECT Amt.
1. Pre- operative cost 26,000.00
installation & electrification
Charges

2. Plant & Machinery 10,82,700.00

3. Furniture 4,73,014.00

4. Margin money for working 66,850.00

capital
(for one month)
TOTAL 16,48,564.00

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 MEAN OF FINANCE Amt.

Promoters Contribution 4,48,546.00

Term Loan 12,00,000.00

Total 16,48,564.00

 Details of Proposed plant & machinery for hospital :-

Sr. Particulars Quantity Rate Amt In Rs.
No
1 Challenger 2 2,54000.00 5,08,000.00
dental chair

2 Compressor oil 1 28,000.00 28,000.00

free 35 ltr Tank

3 HP super Torq 1 5,400.00 5,400.00

Allure

4 Micrometer 1 9,000.00 9,000.00

Marathon M33
Engine

5 Light Cure Unit 1 6,400.00 6,400.00

Allure 7 cordless
Withh light
guide & stand
(Back)
6 HP Contra 1 5,300.00 5,300.00
Angle Torq
Allure

7 Dentply X-Mart 1 94,000.00 64,000.00

8 Suni Medical 1 2,10,000.00 2,10,000.00

Imaging RVG
Unit

9 Basic Dental 2 25,260.00 25,260.00

Material

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10 Boiling Water 1 2,400.00 2,400.00
Sterilizer

11 Autoclave 12 ltr 1 9,140.00 9,140.00

with Drum

12 X-ray Machine 1 52,000.00 52,000.00

Bio-medicare

13 Woodpecker 1 7,500.00 7,500.00

Ultrasonic
Scaler

VAT@ 12.5% 1,20,300.00

TOTAL RS… 10,82,700.00

Details of Proposed Furniture for hospital :-

Sr.No. Particular Amt. In Rs.

1 Partition work 1,85,714.00
2 Table 32,300.00
3 Waiting Table 28,000.00
4 Wall Unit pp 70,000.00
5 All ANO Window 52,000.00
6 Furniture Setup For 1,05,000.00
Machinary
Total Rs- 4,73,014.00

Repayment Schedule:-
Particular 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year

Profit After 4.47 6.02 8.00 10.32 13.06 17.08 20.18

Tax

Depreciation 2.13 1.83 1.58 1.36 1.17 1.01 0.87

Interest on 0.74 1.41 1.31 1.20 1.07 0.93 0.77

Term Loan

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(A) Funds 7.34 9.26 10.89 12.88 15.30 19.02 21.82
Available

Interest on 0.74 1.41 1.31 1.20 1.07 0.93 0.77

Term Loan

Repayment 1.08 2.16 2.16 2.16 2.16 2.16 2.16

(B) Funds 1.82 3.57 3.47 3.36 3.23 3.09 2.93

Required

DSCR 4.03 2.59 3.14 3.83 4.74 6.16 7.45

(A/B)=

Average DSCR = 4.56

Page | 34
Debt Service Coverage Ratio (DSCR)
Debt service coverage ratio (DSCR) essentially calculates the repayment capacity of a
borrower. DSCR less than 1 suggests the inability of firm’s profits to serve its debts whereas
a DSCR greater than 1 means not only serving the debt obligations but also the ability to pay
the dividends.

WHY DSCR?
Debt Service Coverage ratio (DSCR), one of the leverage / coverage ratios, calculated in
order to know the cash profit availability to repay the debt including interest. Essentially,
DSCR is calculated when a company / firm takes a loan from bank / financial institution / any

other loan provider. This ratio suggests the capability of cash profits to meet the repayment
of the financial loan. DSCR is very important from the viewpoint of the financing authority

as it indicates a repaying capability of the entity taking a loan. Just a year’s analysis of DSCR

does not lead to any concrete conclusion about the debt servicing capability. DSCR is
relevant only when it is seen for the entire remaining period of a loan.
Spot Verification:- We have personally visited the propose ,mortgage property
situated within the limit of Daryapur, S.No-12/1, N. Sheet No-41, Plot No-1660 Ward No-10
Tq- Daryapur Dist- Amravati Pin-444803. Area of Plot-111.48 Sq. Mts or 1200 Sq. Ft.
We have also visited hospital place At-Near Railway gate, Akot Road, Banosa, Daryapur,

Amravati, Pin- 444803, were Borrower has started work furniture of hospital. The hospital
location is center point of city & near bus stop & railway Station, It is easy to patient reach to
hospital. In Daryapur this is Second Dental Clinic, But it is advance facility available first
clinic in city.
Valuation:-
The Valution is taken by Arct. Mr. N.N Katta as on Date-26-05-2017 in respect of property Mortgage
of property situated within the limitat daryapur property S.No-12/1, N. Sheet No-41, Plot No-1660
Ward No-10 Tq- Daryapur Dist- Amravati Pin-444803.

Page | 35
Total Area of plot-111.48 Sq. Mts or 1200 Sq. Ft. Valuation of land & building of Rs.-
20.00 Lac.
Search Report:-
The Applicant offered Mortgage of property as mention below-
1) S.No-12/1, N. Sheet No-41, Plot No-1660 Ward No-10 Tq- Daryapur Dist- Amravati Pin-
444803. Total Area of plot-111.48 Sq. Mts or 1200 Sq. Ft.

The title of the plot is clear and does not have any kind of encumbrance over the above
mentioned property as per the search report submitted by Adv. N G Joshi as on Date-18-05-
2017. The advocate has suggested to be obtaining Registered Mortgage Deed before
disbursement of loan.
Guarantors:-
The advance will be guaranteed by-
1) Mr. Morey Sureshingh Govinsingh, he is working as Professional At-daryapur. His annual
income, As per his ITR is Rs-2.83 lac.

2) Mr. Kale Ramesh Narayanrao, He is working as Teacher At- G.P. school Daryapur. His
annual income asper from no. 16 is Rs-4.92 lac.
3) Miss. Thokal Chaya Manohar, She is housewife & she don't have income.

Recommended Sanction:-
Keeping in view the above facts a term loan of Rs-12.00 lac. For sanction to Mr. Thokal
Akash Manoharunder Doctor Scheme of the bank.
Amount of Loan Rs-12.00 lac.

Rate of Interest 12.50% p.a.

Repayment period 120 month ( 10 Year )
Repayment of loan Rs-12.00 lac.
Security Mortgage of property situated within the limitat daryapur
property S.No-12/1, N. Sheet No-41, Plot No-1660 Ward
No-10 Tq- Daryapur Dist- Amravati Pin-444803. Total Area
of plot-111.48 Sq. Mts or 1200 Sq. Ft. Valuation of land &
building of Rs.-20.00 Lac.The Valution is taken by Arct. Mr.
N.N Katta as on Date-26-04-2016 in respect of property
1.Mr. Morey Sureshingh Govinsingh,
Guarantors 2.Mr. Kale Ramesh Narayanrao

Page | 36
Case Study II

Page | 37
Branch DARYAPUR
Firm name M/s Ravi Industries
Product Code Term Loan+ CCIND504
Name of the Proprietor Mr. Ravindra Vishwasrao Bayaskar
Age 47yr
Constitution PROPRIETARY CONCERN
Contact details 9823160667.
Business activity Business
Address of Residence At-Narsingh pur, Post -Nanded (BK ), Tq-
Daryapur, Dist-Amravati
State Maharashtra
Pin 444107
Business Activity Industrial Equipment & Heavy Engineering
Equipment
Address of firm Plot No C-18, Growth Center, MIDC
Office Address Murtizapur, Dist -Akola
Standing NEW
Purpose of application with us A Term Loan of Rs-250.00 lac. & SCC Limit
Rs-50.00 lac.
Security for term Loan Mortgage property for the loan are
Plant & Machinery of the firm located at Plot
1) Plot No C-18, Growth Center, MIDC
Murtazapur, Dist -Akola Admeasuring -
133946.07Sq ft, FDV Rs-14.31 lac & Plant
Building Construction FDV Rs-101.45 lac
2) The Jurisdiction of Sub Reg. Amravati
City At-Mouze Raja Peth out of Nazul Sheet
No 80-D Plot No-7, Admeasuring-4935.00
Sq Ft , Together With Construction Theron.
FDV Rs-229.92 lac.

Total Area both Plot is-138881.07 Sq ft,

Total FDV of Two Plot & plant Rs-345.68
lac

Remarks:-
The Applicant Mr. Ravindra Vishwasrao Bayaskar, The applicant is Proprietary concern of firm. The
applicant firm is at MIDC area Murtizapur on The Name of M/s Ravi

Page | 38
The Applicant Mr. Ravindra Vishwasrao Bayaskar, The applicant is Proprietary concern of
firm. The applicant firm is at MIDC area Murtizapur on The Name of M/s Ravi Industries, he

want to start manufacturing industries of product “Industrial Equipment & Heavy

Engineering Equipment” of annual production capacity is 2000 M.T.. Raw material for

industries is required “Steel Plates & Structural Steel”. The Product mostly use in power
Generation, Sugar Industries, cement Industries, Warehousing etc. The applicant requested
term loan of Rs-250.00 lac & SCC Rs-50.00 lac.

Location:-
The distance between bank to applicant firm is approximate 25 km, on at Murtizapur Karaja
Road, also it attached with Amravati to Akola National Highway 6 from only 1 km distance.
36
Important thing is that this first industries in this area & also not in Amravati, Akola Distract,
It is only present in Nagpur.

Personal Experience:-
The Applicant Mr. Ravindra Vishwasrao Bayaskar is a mechanical Engineer by got the huge
techno commercial experience of 14 years in various fields like manufacturing, procurement,
Design, Administration & Erection & commissioning.
The Applicant career Path since 2000 is , He work from Training Engineer, Senior Manager,
Dy. Manager, Project manager etc. 1) S S Engineering Pvt. Ltd. Pune. 2) LIPI Boilers Ltd.
Pune 3) Themax Ltd. Pune 4) NRG Industries. Pune.

Name of Product Manufacture :-

The Engineering Equipment are majorly use at sugar plant, cement plant & power plant for
various purpose i.e. ESP bag filter for pollution control, piping & ducting for gas flow, fluid
flow etc. The product name manufactures at factory is Tanks, Vessels, Air Pre -Heater, Dust
Collector, Electrostatic preciapitator, Bagass feeder, Coal Bunker, Ducting(Stream, Air,
Fuel), Stack, Economizer, Juice Heater, Evaporator, etc.
Raw material:-
Raw material availability i.e. Steel around the location is

Page | 39
1) Plates- Llyodes Steel, Wardha-55 km

2) Structural Steel - Raipur hub of Steel-250 km

3) Structural Steel- Nagpur hub of Steel -150 km

Structural Steel- Bhailai Steel city of steel-300 km

Marketability:-
There are limited big players in India who engaged in manufacturing of infrastructure
projects related to power plants, Sugar Industries, cement Industries, chemical industry plant,
textiles plant etc. Some of the companies are L& t Ltd, Thermax Ltd. ICSEC, CMIFPE etc.
There are few vendors developed by them who is manufacturing the required equipment to

carry out such big projects.The applicant Mr. Ravidra Bayaskar is one of them who is also
dealing in the same kind of business. Proprietor has huge experience of field & having unit at
pune in the name of NRG industries proprietor Mr,. Narendra Bayaskar Brother of Ravindra

Bayakar & have good relationship with their customers like L&T, Thermax & well known
for execution of their orders timely with no negotiation in quality.

Implementation & Effective Steps Taken:-

The Applicant have taken following effective steps for the purpose of implementation of the
project as below-
1) Land already acquired at MIDC Murtizapur.

2) Site Development is completed & civil work started.

3) Required power 100H.P. Is sanction & installed.

4) The other status of statutory registration & approval as below attached with this sheet.

Page | 40
Project cost & Mean of Finance:-
Sr No Details Amount (In lac)
Cost of Project
1 Building 142.91
2 Plant & Machinery 263.70
3 Working Capital 73.17
4 Pre-Operative Exp. 20.42
Total 500.2

Sr No Details Amount (In lac)

Mean of Finance
1 Promoters Contribution 130.20
2 Unsecured loans from 70.00
family members &
relatives
3 Term Loan 250.00
4 Cash Credit 50.00
Total
500.20

Details of proposed Plant & Machine:-

In machinery Price added Excise duty @12.36%, Vat @12.50% & CST@2% as given by
project report.
Sr NO. Particulars Name of Supplier Amount (lac)
1 Surface preparation NRG Industries, 35.14
& coating Unit Pune
2 Rolling Machine NRG Industries, 7.96
Capacity 20MM thk Pune
with 2200 mm bed
size
3 Pipe Bending NRG Industries, 4.74
machine alongwith Pune
electric motors &
gear box, starter etc.
4 Hydraulic power NRG Industries, 14.73
press @ 200MT Pune
5 Support structure & NRG Industries, 68.62
gangtry for 20Mt Pune
capacity EOT
6 10MT Double Girder Excellent Handling, 18.33
EOT crane Pune

Page | 41
 EOT Crane Pune
7 Air Compressor 5HP Faith machinery 2.36
+2HP & BIM Make Stores Pvt. Ltd. Pune
heavy duty profile
cutting
8 Heavy duty airless Jaguar Surface 1.51
spray painting Coating Equipment,
equipment Pune
9 Mona brand heavy Standard Machine 2.55
duty shimoga type Tools Tradex Pvt.
lathe machine Ltd. Pune
10 Dhanlaxmi brand Standard Machine 6.00
heavy duty steel Tools Tradex Pvt.
fabricated body Ltd. Pune
geared piller type
power press complete
11 Electronic Avery Weigh Tronix, 14.21
Weighbride Baroda
12 ARC saw welding Faith machinery 13.50
machine & radial drill Stores Pvt. Ltd. Pune
machine with motors
13 Lathe machine,Drill Faith machinery 3.85
machine,Inverter base Stores Pvt. Ltd. Pune
welding machine,
inverter base welding
machine & inverter
base CO2 welding
Machine
14 Inverter based argon Faith machinery 1.76
welding machine, pug Stores Pvt. Ltd. Pune
cutting machine,
morse taper, Drill
machine
15 Arc Welding Sadgurukrupa 19.91
Machine Enterprises, Pune
16 SAW & CO2 Alweld Sales & 7.53
Welding Machines Services, Pune
17 OXY -Acety Cutting Alweld Sales & -
Machines Services, Pune
18 Electrical Coponenent Inamdar Electrical, 13.64
& power cables Pune
Say Rs. In Lac---- 236.34

Page | 42
Add : Transport Loading & Unloading Charges@5% 13.50
249.85
Add : Errection, Installation & Electrification Expenses @5% 13.86
263.70
Say Rs. In Lac---- 263.70

Spot Verification Report :-

Mortgage property for the loan on Plant & Machinery of the firm location at Mouje- Hatgaon,
Plot No- C-18, within the limits of Hatgaon Grampanchayat, Murtizapur Growth Center
Industrial Area, Village Hatgaon Tq- Murtizapur, Dist- Akola. Area of plot is -12448.52 Sq.
Mtrs. layout sanction map enclosed in proposal. Visited by Branch Manager as on date-
20/05/2016. Also seen there the work of plant building construction is completed up to 60%.

Security :-
The Applicant offer as security Two Plot &Plant & Machinery of the firm as mention Below
-
1) Rajapeth, pragane- Badnera, Nazul Sheet No-80-D, nazul Plot No-7/17, within the limit of
Amravati Municipal Corporation, Janardhan Peth, Near Ekvira Devi Magal Karyalaya,
Amravati.

Area of plot is -4935 Sq ft. I.e. -458.46 Sq. Mtrs.

2) This is industrial plot where firm located. Mouje- Hatgaon, Plot No- C-18, within the
limits of Hatgaon Grampanchayat, Murtizapur Growth Center Industrial Area, Village
Hatgaon Tq- Murtizapur, Dist- Akola. Area of plot is -12448.52 Sq. Mtrs

3) Plant & Machinery in firm.

Search Report:-
The search was taken by Adv Arun Gupta from Amravati on date-05/10/2015 in respect Mortgage of
property 1st plot situated within the limit at Amravati,

Page | 43
1) Rajapeth, pragane- Badnera, Nazul Sheet No-80-D, nazul Plot No-7/17, within the limit of
Amravati Municipal Corporation, Janardhan Peth, Near Ekvira Devi Magal Karyalaya,
Amravati. Area of plot is -4935 Sq ft. I.e. -458.46 Sq. Mtrs. on and has confirmed clear title
in the name of Smt.Pramila Haridas Thakare, Amravati. Only before mortgaging the property
for the loan, Take release deed of the property is to be obtained from SBI Bank.

2) Second plot of mortgage property can not taken Search report.

The Advocate is not our bank but after pre-sanction case, we will take search report from our
bank Advocate & also second property Search report will be take after pre-sanction..

Valuation Report:-
The Valuation was taken by Arct. N A Chandak, Amravati on date-03/09/2015 in respect
Mortgage of property situated within the limit of
1) Rajapeth, pragane- Badnera, Nazul Sheet No-80-D, nazul Plot No-7/17, within the limit of
Amravati Municipal Corporation, Janardhan Peth, Near Ekvira Devi Magal Karyalaya,
Amravati. Area of plot is -4935 Sq ft. I.e. -458.46 Sq. Mtrs. Valuation property of FDV is Rs-
229.92 lac
2) This is industrial plot where firm located. Mouje- Hatgaon, Plot No- C-18, within the
limits of Hatgaon Grampanchayat, Murtizapur Growth Center Industrial Area, Village
Hatgaon Tq- Murtizapur, Dist- Akola. Area of plot is -12448.52 Sq. Mtrs. Valuation property

of FDV is Rs-14.31 lac

3) Plant & Machinery in firm. Valuation plant building Rs-101.45 lac
Total valuation all two plot & plant building is Rs-345.68 lac.
The Arct. is not our bank but after pre-sanction case, we will be take Valuation from our
bank Valuates .

RecommendedSanction:-
Keeping in view the above facts a term loan of Rs-250.00 lac.& SCC Loan of Rs-50.00 lacFor
sanctioned to Mr.Ravindra Vishwasrao Bayaskarunder Industrial Term loan

Page | 44
& Industrial SCC loan Schemeof the bank.For given the information applicant demand for
loan facility. As per the applicant request branch manager recommended sanction as
mention below-

Type of Loan Term Loan SCC

Amount of Loan Rs-250.00 lac. (Term Loan) Rs-50.00 lac (SCC)

Rate of Interest 13.00 % p.a. 13.00 % p.a.

Repayment period 84 month or ( 7-Year + Renewal after one years.

Moratorium period 12
month)

Repayment of loan Rs-4,54,799/-p.m.(inclusive

of Interest)

Security 1) Rajapeth, pragane- Badnera, Nazul Sheet No-80-D, nazul

Plot No-7/17, within the limit of Amravati Municipal
Corporation, Janardhan Peth, Near Ekvira Devi Magal
Karyalaya, Amravati. Area of plot is -4935 Sq ft. I.e. -458.46
Sq. Mtrs.
2) This is industrial plot where firm located. Mouje- Hatgaon,
Plot No- C-18, within the limits of Hatgaon Grampanchayat,
Murtizapur Growth Center Industrial Area, Village Hatgaon
Tq- Murtizapur, Dist- Akola. Area of plot is -12448.52 Sq.
Mtrs
3) Plant & Machinery in firm.

Guarantors
1. Miss. Thakare Pramila Haridas
2. Mr. Parde Maheshkumar Bhaurao
3. Mr. Parde Umeshkumar Bhaurao

Page | 45
Reason Of Rejected Loan Case

Page | 46
Reasons for bank loan rejected.

The reasons for a loan rejection cab be determine broadly under six reasons, however
these vary form one lender to another, each lender have their own internal policy to determine
the creditworthiness and risk rating.

 Scant credit score

 Unstable employment
 Insufficient income
 Working in a delisted private company
 Not falling into the age limit
 Living in a location where defaults are high

Page | 47
  The nandura urban bank loan criteria.

 Employment requirement :
The nandura urban Bank provides loans exclusively to people who are
doctor, caratered accountants, employees of private limited companies, employees from
public sector undertakins, including central, state and local bodies. If you do not fall under
this category, your personal loan application is very muc likely to get rejected.

Sometime, you might be working in a private company and still get your personal loan
rejected. This could happen if the company you are workin for is under the category of
delisted companies in the bank.

 Age criteria:

To get qualified for getting a personal loan application, you must be minimum of 23 years
old and should not be more than 58 year old. If you do not fall under this age category, you’re the
nandura urban bank loan application would be rejected. The bank set an age limit because they
want to be assured that you are able to repay the loan without difficulty.

 Insufficient Income:
A steady source of income is the proof for any lender that you are
capable fo repaying your loan. Every bank sets minimum monthly or annual
iincome requirement to be qualified for a loan. If you are fail to meet this minimum
income requirement, your bank loan application may get rejected.

 Career Instability:
Frequent job switching give an impression to the lender that uou
are unreliable to organization you are working for. With that notion, it could become
difficult to secure a loan as ti si an unsecured loan for which you do not have to
pledge any collateral.
The Nandura Urban Bank expects their borrower to have a stable employment for at
least 2 years and more important to be working for the current employer for the past
1year.
 Poor Credit Score:

Page | 48
 A credit score is generated by credit bureaus based in your credit
behavior. A good score reflects how responsible in handling your finance. Lenders
consider it an important criterion to evaluate the borrowers creditworthiness.
Having a poor credit rating is going to hurt your loan eligibility. This could be one
of the main reason why bank loan application could have been rejected.

 To many Application in a Short Time:

This is another criterion which could lead to
loan rejection. Too many loan application provide a hint to the lender indirectly that
your credit hungry and might turn a risky candidate.

 The Nandura Urban co-op Bank Loan Rejection & Its Impact in Credit
Source:
The answer to this question depend on the level of your loan application
being processed. The borrower generally applies for a loan after checking the
eligibility criteria and proceed with document submission. If there are difficulties in
furnishing the relevant document, the Bank loan might get rejected.
If all your document are verified, the lenders will check your credit score to assess your
creditworthiness. It is called hard enquiry. In worst case scenario, if your credit score is low
and loan and the loan gets rejected, the hard enquiry will have an impact on your credit score
further in a small way. Hence, if you are faced with multiple hard enquiries, your credit score
is sure to take a hit with it.

Page | 49
Observation And Findings
 The Financial Management of THE NANDURA URBAN CO_OPERATIVE LTD
has been working well in the organization.

 The funds from operation of a bank has been increased from year by year.

 The Nandura Urban Co_ Operative bank provide every type of loan.

 The candidate for loan are increase compare to previous year.

 The banks liquidity ratio shown a satisfactory trend.

 Loan and advances ratio shown that the banks loan and advances has reduced as
compare to current assets.

Page | 50
Suggestions & Recommendations


Page | 51
Suggestions & Recommendations
 THE NANDURA URBAN CO_ OPERATIVE SOCIETAY should try to match their
assets with the liability in case of surplus asset, it should be invested either in
securities or should be used to repay borrowings.

 The bank should determine the optimum cash balance to be kept.

 The bank followed an aggressive policy of financing working capital should try to
finance of their working capital using long term source and improve their status.

 The bank should try to follow a matching policy for financing currant assets using
both long term and short term sources of finances.

Page | 52
Conclusion

The financial management analysis done on the financial position of the bank has provided a
clear view on the activities of the bank. The use of the financial analysis ,statement and other
accounting and financial management helped in this study to find out the financial positions
of the Nandura Urban Co_ Operative LTD.

This project was very useful for the judgment of the financial status of the bank and the loan
performance from the management point of view. This evaluation proved a great deal to the
management to make a decision on the regulation of the funds to increase the loan ratio for
increase the credit as will as goodwill of the Nandura Urban Co_ Operative LTD. And bring
profit to the bank.

Before I conclude I wish a convey my thankfulness in regard to the training given to me in

THE NANDURA URBAN CO_ OPERATIVE LTD. Its gave me extreme satisfaction and
practical knowledge of the financial activities carried out in the bank. The kindness, attention
and immense co_ operations extended to me buy all the officials in the BANK maid my
project easy and comfortable. Really it was a very pleasant experience in NANDURA
URBAN CO_ OPARATIVE LTD.

Page | 53
BIBLIOGRAPHY

 Website-www.Nandurabank.org

 Information brochures of the bank

Page | 54