Internship report

On

“LOANS AND ADVANCES”

in

The Rajasthan State Cooperative Bank

A report submitted in partial fulfillment for the Degree of

Bachelors of Commerce

Submitted by: Himanshi Singh

Roll no. : 2014476

Student ID: WBBCM20457

Department of Commerce and Management

BANASTHALI VIDYAPITH

(RAJASTHAN, INDIA)
 DECLARATION

I Himanshi Singh, hereby declare that this report entitled

“Loans and Advances” has been prepared by me for the fulfillment of the

requirement for the award for the degree of Bachelors of Commerce

(B.COM.)

under the guidance of Dy. General Manager, Mr. RK Sharma, and the
entire team of The Rajasthan State Cooperative Bank, Head office and
The Rajasthan State Cooperative Bank, Jagatpura, Jaipur.

I also declare that this project is my original work and has not been
previously

submitted.

Name: Himanshi Singh

Roll no. - 2014476

 INDEX
S. Particulars Page no.
no
1. INTRODUCTION 1-7
a) Types of Banks
b) About RStC Bank
c) Objectives of RStC Bank
d) Mission of RStC Bank
e) Priorities of RStC Bank
f) RStC Bank’s organizational Set up
2. LITERATURE REVIEW 8-9
3. RESEARCH METHODOLOGY 10-15
a) Types of loans
b) Non- Performing Assets
c) ECGC/DICGC
4. ANALYSIS AND FINDINGS 16-23
a) PACS
b) DCCB
c) Highlights of the year 2020-21
d) Share Capital Reserves and Provisions and own Funds
of RStCB
5. SUMMARY & CONCLUSIONS 24-26
Reference 27
INTRODUCTION

1
Banking is a financial activity that includes accepting and safeguarding the money of
individuals and entities and then lending them to other needy individuals in order to
earn money.

Banks in India have been classified into four categories:-

1. Commercial Banking
2. Payment Banks
3. Small Finance Banks
4. Cooperative Banks

Each of them works differently yet efficiently.

TYPES OF BANKS:

Commercial Banks:-

Commercial banks are the financial institutions that are regulated under the Banking
Regulation Act, 1949 with the main objective of earning profit by accepting deposits
and granting loans to the general public, corporate and government.

Commercial Banks are classified into four types:-

• Public sector Banks

• Private Sector Banks

• Foreign Banks

• Regional Rural Banks

Payments Banks:-

Payment Banks are the newly conceptualized bank by the Reserve Bank of India on
a smaller scale. It only accepts deposits if the customers up to ₹ 1,00,000 without
involving credit risk.

Besides it can offer remittance services, mobile payments/transfers/purchases, and

other banking services like ATM/debit cards, net banking, and third-party fund

2
transfers. In simple words, it can carry out most banking operations but can’t advance
loans or issue credit cards.

Finance Bank:-

As licensed under Section 22 of the Banking Regulation Act, 1949 and governed by
the provisions of RBI Act, 1934 and FEMA, these banks provide financial inclusion to
sections of the society that are not served by other banks, i.e, micro industries, small
and marginal farmers, unorganized sector entities and small business units.

Cooperative Banks:-

I got a chance to work with The Rajasthan State Cooperative Bank for a month and
learned the efficient working of such banks in favor of agriculture and allied activities.
Besides, these banks also perform all the activities that a commercial bank does.

About The Rajasthan State Cooperative Bank:-

The Rajasthan State Cooperative Bank was established on 14th October 1953 with its
headquarters in Jaipur,

It has 497 branches across the state of Rajasthan.

It provides all the financial services to the customers like saving deposits, fixed
deposits, recurring deposits, loans, personal loans, net banking facility, RTGS, NEFT,
and the different schemes launched by the state government for the customer’s
convenience.

But above all the given services to the customers, RStC Bank works for the agriculture
and allied activity workers.

3
Objectives of RStC Bank:-

o Promoting the economic interest of the members of the bank according to

cooperative principles.
o Serving as a balancing center for all the cooperative societies and banks
present in the state.
o Granting loans to the registered institutions under the Act and other
members enrolled as per provisions of bylaws.
o Lending money or granting overdrafts to, or opening cash credit for the
depositors and members of the bank’s staff on the security of:-
• Fixed Deposits
• Government securities.
• Other securities approved by the registrar.

RStC Bank also grants clean overdrafts to deposits, who are at

least nominal members according to rules framed by the board.

o Receiving safe custody securities, ornaments, and valuables.

o Another objective of RStC Bank is to open, establish, maintain & operate
current chest & small coin deposits in such terms and conditions, as may
be required by the RBI Act, 1934 and to enter into all administrative or
other arrangements for understanding such functions with RBI.
o It also aims to open branches wherever it is required.

4
Mission of RStC Bank:

The corporate mission of a strong & competitive cooperative Banking Network, which
offers innovative financial products along with a varied range of services to serve rural
masses with a rejuvenated short-term cooperative credit structure to serve the people
of Rajasthan.

What are the Priorities of RStC Bank?

• RStC Bank prioritizes issuing Kisaan Credit Card (KCC) to all eligible farmers.

• Inculcating thrift habits in rural areas by mobilizing rural savings through PACS and
branches of CCBs.

• Computerizing of PACS in the state.

• Releasing farmers from the clutches of money holders by providing cheaper and
timely institutional credit.

• To increase investment credit to farmers to create capital formation in the state.

• Promoting farmers’ clubs and SHGs & special efforts for women SHGs.

• Starting Mobile Banking services & Internet Banking.

• Serving the rural masses through Mini Banks in about 4000 Bharat Nirman Atal Sena
Kendra’s constructed at Gram Panchayat level.

5
RStC Bank’s Organizational Set-up:-

RStC Bank is a Board-managed organization. As the term of the board is over, the
administration is functioning in its place until a new election takes place.

The CEO (Chief Executive Officer) of the Bank is designated as Managing Director and is
responsible for the general administration of the Bank subject to the control of the Board or
Administrator as applicable.

MD is being assisted by General Managers for different departments in Head Office in its day-
to-day management.

The six different departments of RStC Bank at the HO Level are as follows:-

• Administration & Personal (A&P)

• Operation

• Accounts & Finance

• Planning & Development

• Inspection & Supervision

• Electronic Data Processing.

6
7
LITERATURE
REVIEW

8
The report of The Royal Commission on Agriculture (1928) focused on the working of the
cooperative movement. Referring to the role of cooperatives, it commented, “These were the
best hope of rural India.

The Central and Provincial Banking Enquiry Committee (1931) observed that, as there is
no better instrument for raising level of agriculture in the country than the cooperative, in spite
of the cooperative movement’s imperfections, it deserves every possible assistance from
every quarter.

Palaniappa Mudaliar’s (1962) report on the working of cooperative societies in the state of
Madras stated that the cooperative movement especially in the area of cooperative credit,
cooperative marketing, cooperative dairying, weaver’s cooperatives and housing has
progressed over time. It found that the cooperatives covered 82% of the villages and 32% of
the rural families were brought within their fold.

Shah (2007) worked on the financial health of Sangli and Buldana District Central Cooperative
Banks in Maharashtra. He concluded that main reason for downfall in health of these banks
were overdues or NPAs. As per study financial health of both the banks had declined, during
the late nineties as compared to the early nineties time period.

Chander Ramesh and Chandel Jai Kishan (2010) in their article stated that there is poor
financial management in Cooperative Credit Institutes in Haryana. Profitability of institutes can
be analyzed through financial ratios. Banks had been suffering from underutilization of
resources so these banks should change their vision and transparency in their working.

Prof. Bharati R. Hiremath (2016) in their paper analyzed the financial performance of
Cooperative banks. Profitability ratios were used to analyse the performance. It concludes that
in order to attract more customers and investors bank had to improve its operational strategy.
This study was helpful for bankers in decision making. The study suggest that banks must use
modern technology and recovery mechanism for improving the performance of banks.

9
 RESEARCH

METHODOLOGY

10
Being an Intern in the bank, I was majorly taught about the loans provided by the bank branch.
Here is a brief description of what I have been taught.

The Rajasthan State Cooperative Bank provides several loans same as commercial banks,
such as,

1. HOME LOAN:

The Rajasthan state cooperative bank provides home loans up to 40 lakhs for a flexible tenure
of 20 years. Customers have to do minimal documentation and get faster approvals. They has
the facility of choosing fixed and floating interest rates

The bank provides the loan interest rate of 8.50%.

Documents required to avail the loan are,

• PAN Card – For Individual / Partnership Firm

• Identity Proof – Voter ID / Driving License / Passport)

• Address Proof – Voter ID / Driving License / Passport / Telephone Bill / Electricity Bill /
Registered Lease Deed or Sale Agreement / Bank Statement)

• Business Continuity Proof – Any one document dated 5 years old (Bank Statement / Sales
Tax Challans / IT Returns / Shops & Est. Certificate / Partnership Deed)

• Passport Size Photographs

• Any other valid Photo ID card issued by central or state government

• Original documents of the property

2. VEHICLE LOAN:

The Bank provides loans for cars/vehicles ranging from small & compact cars to SUVs and
MUVs. New Vehicle Loan amount ranging up to Rs.20 Lakhs as 85% value of the new vehicle
(includes Ex-Showroom Price + applicable taxes + Insurance) for the convenient loan
repayment tenure from 36 to 84 months. The loan is given at the rate of 7% of interest.

Documents required to avail the loan are,

• PAN Card – For Individual / Partnership Firm

• Identity Proof – Voter ID / Driving License / Passport / Aadhar Card.

11
• Address Proof –Voter ID / Driving License / Passport / Telephone Bill / Electricity Bill /
Registered Lease Deed or Sale Agreement / Bank Statement.

• Business Continuity Proof – Any one document dated 3 years old (Bank Statement / Sales
Tax Challans / IT Returns / Shops & Est. Certificate / Certificate of Incorporation / Partnership
Deed)

• Passport Size Photographs of all applicants & co-applicants.

3. EDUCATION LOAN:

Students are being facilitated with the loan amount up to Rs 6 lakhs for studies in India and
up to Rs.10 lakhs for studies abroad with convenient principal repayment (Moratorium period
of 1 year after course period or 6 months after getting a job, whichever is earlier)in which up
to 90% of tuition fee, living expenses, and other expenses covered for the tenure of 5 years.

The loan is provided at the rate of 9% of interest.

The applicant & co-applicant should be a resident of Rajasthan.

Documents required to avail the loan are,

• Completely filled application form with signature

• Proof of Identity & Age Proof- Pan card/ Passport/ Valid Driving License/ Voters ID Card

• Proof of Address & Signature -Voter's ID Card/ Valid Driving License/ Valid Passport/ Utility
Bill (Electricity / Telephone / Mobile - not more than 2 months old), Bank Statement (Monthly
Statement not more than 3 months old)

• Relationship Proof with co-applicant

• Passport Size Photograph

• Educational proof of applicant: Mark sheets of standard 10th, 12th, Graduation or Diploma,
etc.

• Admission proof confirming the admission of the applicant along with the tuition fee, course
fee details, duration of the course, etc.

• Documentation of guaranter

Additional documents for Education abroad

12
• Passport copy is a mandatory document for students pursuing the course abroad

• Mark Sheets / Certificates of English proficiency test and other qualifying tests like GRE,
GMAT, SAT, TOEFL etc.

4. MORTGAGE LOAN:

RStC Bank provides loans up to 35 lakhs to the Salaried or Self-Employed resident individuals
against their property in order to meet their urgent cash requirements at the rate of 9.50%
interest with the convenient loan repayment option of up to 120 months.

Both residential and commercial property are accepted as collateral and the customer avail
loan up to 90% of the property value.

Documents required to avail of the loan are,

• PAN Card – For Individual / Partnership Firm

• Identity Proof – Voter ID / Driving License / Passport

• Address Proof - Voter ID / Driving License / Passport / Telephone Bill / Electricity Bill /
Registered Lease Deed or Sale Agreement / Bank Statement

• Business Continuity Proof – Any one document dated 5 years old (Bank Statement / Sales
Tax Challans / IT Returns / Shops & Est. Certificate / COI / Partnership Deed)

• Passport Size Photographs

• Original Documents of Property

5. PERSONAL LOAN:

RStC Bank provides the loan amount with the limit of Rs.2 lakhs with the convenient loan
repayment option of 12 to 60 months at the interest rate of 9%.

Documents required to avail the loan are,

• PAN Card – For Individual

• Identity Proof – Voter ID / Driving License / Passport.

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• Address Proof – Voter ID / Driving License / Passport / Telephone Bill / Electricity Bill /
Registered Lease Deed or Sale Agreement / Bank Statement

• Relationship Proof (if required)

• Passport Size Photographs

• Any other valid Photo ID card issued by central or state government

• Latest 6 months Salary credit bank statements

• Latest 3 months pay slips and Form 16 issued by the employer

Non Performing Assets:

Loan account holders which do not pay installments for more than 90 days from the date it
was due on, will be considered as NPA (Non-performing Assets).

Income is being recognized on the two basis:

i) STANDARD/ REGULAR ACCOUNTS:

Income will be recorded on the accrual basis, i.e, will be recorded on the date it is
due on.
ii) NPA (Overdue):
Income will be recorded on cash/ receipt basis, i.e, when the income is received.

NPA is divided into three categories:

NPA

Sub
Doubtful Loss Assets
standard

Secured Unsecured

DI (3-4
years)

D2 (4-6
years)

D3 (Above
6 years)

14
Provision to be made for NPA’s and Standard Accounts:

i) Standard accounts:
a) For the priority sector, i.e, agricultural and allied activities- 0.25% of the loan
amount.
b) For others- 0.40%
ii) For NPA’s:
a) Secured: D1 (3-4 years)- 20% of the loan amount
D2 (4-6 years) – 30% of the loan amount
D3 (above 6 years)- 100% of the loan amount
b) Unsecured: 100% of the loan amount
c) Loss Assets: 100% of the loan amount

ECGC/ DICG:

ECCG is Export Credit Guarantee Commission and DICGC is Deposit Insurance and Credit
Guarantee Commission. These are the commissions that promise to pay a particular amount
of loan on behalf of the account holder if he/ she fails to do so.

15
ANALYSIS

AND

FINDINGS
16
To achieve the objectives, an extensive network has been analyzed to cater to the needs of
the citizens of Rajasthan.

• RStC Bank has it’s 5 regional offices cum branches and 11 branches in Jaipur at Apex
level.
• It has 29 DCCBs that are covering 33 districts of the state having 450+ branches at
the district level.
• 6514 PACS are present at the grass-root level covering 100% of the geographical area
of the state that includes 44672 villages.

PACS:

PACS are the Primary Agriculture Cooperative Societies that are the backbone of
Short term Cooperative Credit Structure. 5425 PACS out of 6632 PACS in the state
also has the status of Mini Banks and collects deposits from their members.

According to the latest reports for the year 2020-21, PACS has an estimated total
deposit of Rs. 2621.97 crores while the predecessing years had the deposit as follows,

YEAR TOTAL DEPOSITS

2016-17 2692.24 Crores
2017-18 2483.15 Crores
2018-19 2478.42 Crores
2019-20 2532.06 Crores
2020-21 2621.97 Crores

17
DCCBs:

DCCBs are the District Central Cooperative Banks that connects PACS and the RStCB,
performing the responsibility of Central Financing Agency at District level.

The 29 DCCBs covering 33 districts of the state is serving as the intermediary in agriculture
refinance through their branches .

As per the reports of the year 2020-21, DCCBs have issued loans of 16251.54 crores.

Here is the data of loan outstanding and the total amount of deposits for the previous 5 years,

YEAR LOANS O/S TOTAL DEPOSITS

2016-17 11682.78 CR. 11424.62 CR.
2017-18 14190.44 CR. 11560.64 CR.
2018-19 11255.27 CR. 12359.41 CR.
2019-20 12757.42 CR. 9721.10 CR.
2020-21 13656.59 CR. 11699.03 CR.

18
19
HIGHLIGHTS OF THE YEAR 2020-21:

• RStCB registered Rs.65.81 Crore net profit in 2020-21.

• The Bank registered an annual growth of 6.41 % in own fund.

• The reserves and provisions of RStCB have increased from Rs. 795.85
crore to Rs.871.32 crore in 2020-21.

• RStCB loan outstanding remained to the tune of 9662.90 crores as on

31.03.2021.

• RStCB Net working was of 13125.19 crores.

• The level of recovery against the Principal stood at 99.77%.

• Per employee average productivity was Rs.59.39 Crore and

per branch business was Rs.801.82 Crore.

• RStCB has India's first currency chest in the cooperative sector, which is
operative at the Tonk Road branch of the Bank.

• The total deposits of the Bank increased from Rs. 3522.11crore to Rs.
4032.05 crores and have shown an increase of 14.48 % in 2020-21.

• The CD ratio on an average basis during 2020-21 remained at 280.48 %

while as of 31-03-2020 the CD ratio stood at 314.89 %.

• The cost of deposit of RStCB has shown a favorable trend and gone
down from 6.01 to 5.18 in 2020-21, while the financial margin of the
bank is 0.83.

20
SHARE CAPITAL, RESERVES AND PROVISIONS, AND OWN FUNDS

OF
THE RAJASTHAN STATE COOPERATIVE BANK

21
22
23
 SUMMARY
AND
CONCLUSION

24
SUMMARY:

I worked with The Rajasthan State Cooperative Bank for a month to fulfill
the requirement of my university’s internship training, During the whole
training period, I learned several things, processes, ethics, and work done
in banks.

Although the bank was cooperative, I was sent to a general branch that
does not deal with the cooperative bank’s main mission and just covers
the general Banking issues. Thus, I couldn’t learn much about agricultural
lending but had a great experience learning whatever I had been taught
in the Branch.

Under the great guidance of the entire Branch team, I performed several
deposits, and withdrawals, made queues for the cheque clearance, and
also send all the cheques from another bank for clearance to the head
office through scanning.

Amidst all this work, I majorly learned about the loans provided by the
bank and their processes.

Overall, I found this one month training internship very effective, helpful,
and informative and it surely gave me a great experience in the field of
Finance and Banking.

25
CONCLUSION:

A cooperative bank is a legal entity owned and dramatically controlled by

its members who often have a close association with the organization as
producers or consumers of its products or services, or as its employees.

From the above analysis of the Co-operative Banks in India. We found

that these banks are working efficiently, increasing the profits level and
using managerial talent within the best way. The increasing amount of
deposits was achieved as the results of increased membership. the

general financial performance of the Co-operative Banks in India all fronts

namely, Membership, Share Capital, Deposits, Loans, and Advances,
Loans issued, etc., are showing a significant trend.

26
REFERENCE:
➢ www.nabard.org

➢ rscb.org.in

➢ shodhganga.inflibnet.ac.in

➢ papers.ssrn.com

➢ www.studocu.com

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