The

Project Report
On
“MAJOR LAB (FUNCTIONAL AREA 1) M-317”

Submitted in partial fulfillment of the requirements for the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
Specialization in Finance

Submitted to Submitted by
DR. RUCHI SHARMA (ARNAV PUROHIT)
(Assistant prof.) (21MAIXX609)

Department of Management
Arya Institute of Engineering & Technology
(2021-2023)
 Candidate’s Declaration

I hereby declare that the work, which is being presented in( Major lab functional area 1) M-317 in

partial fulfillment for the award of Degree of “Master Of Business Administration” in Department

of Management with Specialization in Finance and submitted to the Department of Management .

Arya Institute of Engineering & Technology, is a record of my own investigations carried under the

Guidance Of Dr. Ruchi Sharma , Assistant Professor. (MBA)

(Signature of Candidate)
ARNAV PUROHIT
21MAIXX609
 Acknowledgement

I wish to express my deep sense of gratitude to my Project Coordinator Dr. Ruchi Sharma,

Assistant Professor, Department of Management, Arya Institute of Engineering & Technology,

Jaipur for guiding me from the inception till the completion of the Project. I sincerely

acknowledge them for giving their valuable guidance.

I would like to first of all express my thanks to Dr. Arvind Agarwal, Chairman,Arya Group of

colleges and Dr. Pooja Agarwal, President, Arya Group of Colleges for providing me such a

great infrastructure and environment for my overall development.

I also like to express my thanks to all supporting faculty members who have beena constant

source of encouragement for successful completion of the seminar.

Also my warm thanks to Arya Institute of Engineering and Technology, who provided me this

opportunity to carryout, this prestigious Degree and enhance my learning in various management

fields.

Arnav Purohit
21MAIXX609
 CHAPTER 1

BANKING AND FINANCE

Q.1 Prepare a report on electronic payment systems used by the banking

industry and online payment gateways.

Ans.

In India’s journey towards E-payments, digitization, merchants, as well as

customers, are getting comfortable adopting new digital technologies.

With customers are getting comfortable with online shopping, nowadays, an

eCommerce site and online payment acceptance is a must to have for any

business.

Customers are happy with browsing and shopping at any time from anywhere

with just a few clicks and along with this rise of online shopping and

eCommerce, E-payments are gaining widespread popularity.

COVID and the limitation it has imposed on people who made online payments

the need of time. Many businesses are now offering their products and services

online.

However, if you are a business and want to accept e payments, you have to

work on your electronic payment system to provide better and secure service for

your customers.
What is an e-payment system?

An e-payment or Electronic Payment system allows customers to pay for the

services via electronic methods.

They are also known as online payment systems. Normally e-payment is done

via debit, credit cards, direct bank deposits, and e-checks, other alternative e-

payment methods like e-wallets, bitcoin, cryptocurrencies, bank transfers are

also gaining popularity.

Types of e-payment system

E-payments can be done in the following ways,

Internet banking – In this case, the payment is done by digitally transferring

the funds over the internet from one bank account to another.

Some popular modes of net banking are, NEFT, RTGS, IMPS.

Card payments – Card payments are done via cards e.g. credit cards, debit

cards, smart cards, stored valued cards, etc. In this mode, an electronic payment

accepting device initiates the online payment transfer via card

Credit/ Debit card – An e payment method where the card is required for

making payments through an electronic device.

Smart card – Also known as a chip card, a smart card, a card with a

microprocessor chip is needed to transfer payments.

Stored value card – These types of cards have some amount of money stored

beforehand and are needed to make funds transfer. These are prepaid cards like

gift cards, etc.

Direct debit – Direct debit transfers funds from a customer’s account with the

help of a third party

E-cash – It is a form where the money is stored in the customer’s device which

is used for making transfers.

E-check – This is a digital version of a paper check used to transfer funds

within accounts.

Alternate payment methods – As technology is evolving, e-payment methods

kept evolving with it (are still evolving..) These innovative alternate e-payment

methods became widely popular very quickly thanks to their convenience.

E-wallet – Very popular among customers, an E-wallet is a form of prepaid

account, where customer’s account information like credit/ debit card

information is stored allowing quick, seamless, and smooth flow of the

transaction.

Mobile wallet – An evolved form of e-wallet, mobile wallet is extensively used

by lots of customers.

It is a virtual wallet, in the form of an app that sits on a mobile device. Mobile

wallet stores card information on a mobile device.

The user-friendly nature of mobile wallets makes them easier to use. It offers a

seamless payment experience making customers less dependent on cash.

QR payments – QR code-enabled payments have become immensely popular.

QR code stands for ‘Quick Response’ code, a code that contains a pixel pattern

of barcodes or squares arranged in a square grid.

Each part of the code contains information. This information can be merchant’s

details, transaction details, etc. To make payments, one has to scan the QR code

with a mobile device.

Contactless payments – Contactless payments are becoming popular for quite

some time. These payments are done using RFID and NFC technology.

The customer needs to tap or hover the payment device or a card near the

payment terminal, earning it a name, ‘tap and go’.

UPI payments – NPCI (National Payment Corporation of India) has developed

an instant real-time payment system to facilitate interbank transactions.

This payment system is titled UPI(Unified Payment Interface). Payments via

UPI can be made via an app on a mobile device.

Biometric payments – Biometric payments are done via using/scanning various

parts of the body, e.g. fingerprint scanning, eye scanning, facial recognition, etc.

These payments are replacing the need to enter the PIN for making transactions

making these payments more accessible and easy to use.

Payments are done via Wearable devices – Wearable devices are rapidly

becoming popular among customers.

These devices are connected to the customer’s bank account and are used to

make online payments.

An example of a wearable used for making an online payment is a smartwatch.

AI-based payments – As machine learning and Artificial Intelligence is creating

a revolution all around the world, AI-based solutions are becoming more

popular.

Payments based on AI such as speakers, chatbots, ML tools, deep learning tools,

etc are making it easier for businesses to maintain transparency.

How e-payment system works?

Entities involved in an online payment system

The merchant

The customer / the cardholder

The issuing bank

The acquirer

Payment Processor

Payment Gateway

Working of e-payments can be explained in the following three steps,

Payment initiation – Customer finalizes the product/service and chooses the

payment method to initiate the transaction.

Depending on the payment method, the customer enters the required

information like card number, CVV, personal details, expiration date, PIN, etc.

The chosen payment method either redirects the customer to an external

payment page or a bank’s payment page to continue the payment process.

Payment authentication – The information submitted by the customer along

with other details like payment information, customer’s account information is

authenticated by the operator.

The operator can be a payment gateway or any other solution involved. If

everything gets authenticated positively, the operator reports a successful

transaction.
Lyra Payment Gateway For Seamless Payment Processing Experience

01/09/2020

Lyra Payment Gateway For Seamless Payment Processing Experience A

payment gateway is becoming a necessity for businesses that want to accept...

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On the contrary, if there is any problem with any of the authentication checks,

the transaction fails.

After the successful transaction, the customer gets a payment confirmation.

Payment settlement – After the successful authentication process, payment from

the customer’s bank gets transferred into the merchant’s account by the online

payment service provider.

Benefits of e-payment systems

People are almost comfortable with online shopping and e-payments. With this

trend, accepting online payment is a must for any business.

E-payments are making shopping and banking more convenient. They are

helping customers to reach more clients locally and globally.

E-payments are faster making the transactions efficient.

With e-payments, customers can pay online at any time from anywhere, making

them easily accessible and convenient for customers.

It’s easy to integrate online payment solutions with businesses as many payment

processing solution providers offering different types of solutions.

Online payment solutions come with security and risk and anti-fraud tools

making them reliable and secure not only for customers but also for merchants.

E-payments are proved to be highly effective for international transactions, as

they are cheaper, easier, faster, and generally are real-time.

In conclusion, if you are running a business, accepting online payments is the

need of current times.

You need to find out what your target customers are preferring and accordingly

you need to provide the most convenient and relevant online payment solutions.

Security features of a payment gateway

Dealing with confidential payment card data, security and compliance is the

number one priority for payment gateways. As we explored above, however,

just as digitalisation has enabled eCommerce sales to thrive, so too have online

businesses and their customers become more vulnerable to cybercriminals. In

fact, online payment fraud globally is expected to hit $48 billion by 2023, which

makes the payment security that payment gateways provide all the more

important.
Investing in robust risk management solutions that can help detect and deter

online fraudulent transactions is key and having the right payment gateway on

your side is a great start. Below we list some of the security measures payment

gateways use to help you choose the right one for your eCommerce business.

PCI DSS compliance

Payment Card Industry Data Security Standards (PCI DSS) is a set of

international security regulations implemented by card schemes. PCI DSS is

developed to safeguard credit and debit card transactions while preventing the

misuse of cardholders' personal information. Businesses that accept, store,

process and transmit sensitive card information must be PCI compliant to

effectively prevent fraud (watch the video below and stay in the loop about all

things PCI compliance).

Tokenisation

Tokenisation is another way that payment gateways protect users’ payment card

details. During the payment process, the sensitive bank card details are replaced

by a unique identifier – namely, a token. Meaning if someone attempts to

intercept your data before it reaches the secure decryption endpoint, they'll only

see an unintelligible form.

Tokenisation allows consumers to only input their card details once, so there's

no need to re-enter the same details for future transactions. Using this
technology helps merchants achieve smoother and safer payment experiences

for their customers, as after the first transaction, they have one less step to take

at checkout on the merchant’s website.

3D Secure authentication

3D Secure is an authentication protocol intended to minimise fraud and enhance

security in online card payments. During a transaction, customers complete an

additional two-factor verification step with the card issuer to verify the payment

after inputting their payment card details.

3D secure payment gateways enable safer and frictionless payment processing

across different devices. Visa and Mastercard announced that they would

globally decommission the 3DS1 protocol and only support 3D Secure 2

(3DS2), which is the enhanced version of 3DS1, effective as of October 2022. It

should be noted that card schemes will mandate the upgrade to 3DS2 for

merchants in India and Bangladesh from October 2023.

What's the role of a merchant account?

A merchant account is a specific bank account necessary for accepting

debit/card and electronic card payments. Issued by institutions ranging from

payment service providers, acquirers, and payment gateways, such accounts

allow businesses to receive funds from customers safely and promptly.

However, a merchant account should not be confused with the business bank

account that merchants use for everyday expenditures. Merchant accounts serve
as an indicator that the merchant is the owner of the payment data transferred to

the bank as well as the recipient of the funds from the online payments.

The payment gateway (or the entity that sets up the merchant account for you)

deposits the funds from a customer's payments in the merchant account. This

makes merchant accounts necessary from when customers submit their card

details, and the acquirer transfers the funds onto the business account to when

merchants receive the money.

Essentially, a merchant account simplifies how you’re getting paid; your

payment gateway collects them in your merchant account and combines them

into one single deposit for your bank account.

Supporting different currencies with your payment

gateway

Payment gateways that support multiple currencies are vital eCommerce

infrastructure for merchants that accept international payments, which means

that your business charges customers in more than one currency (e.g., in British

pounds, euros, etc.). emerchantpay enables online merchants to use multi-

currency pricing (MCP) for their website and achieve a smooth global

expansion. This is because MCP enables businesses to price and charge for

products/services in multiple foreign currencies while receiving their funds (a

process known as settlement) and reporting in their domestic currency.

Through a payment gateway that processes payments in several currencies, you

can:

Boost customer trust and conversions – Survey from The Payers reveals

that over seven in ten (73%) of cross-border buyers feel more comfortable

buying from a brand that includes their familiar local currency on pricing.

Accepting payments in several currencies can help boost your sales volumes

and profitability, achieving this via a single payment gateway integration under

the same merchant account.

Gain a competitive edge – Accepting payments in the preferred currency of

your target consumers gives you a strategic advantage over your competitors

who do not.

How to choose the best payment gateway for your business

Payment gateways may sound complex, but they don’t have to be when you

partner with a trusted and experienced payment service provider and acquirer.

Counting over 20 years of experience in online payment processing, with

emerchantpay you can be sure that you provide a streamlined and engaging

payment experience for your customers. Besides our PCI Level 1 compliance

year on year, we also take pride in our one-stop-shop approach. Through this,

we offer you a flexible, easy-to-use payment platform that includes payment

gateways, global acquiring, alternative payment methods (APMs), card

issuing and in-house risk and fraud management services.

By leveraging our all-in-one payment solution designed for today’s demanding

consumers, you're well placed to deliver frictionless and safe checkout

experiences to your customers for maximised revenue.

Ready to boost your profit margins with our robust payment solutions? Talk to

our payment experts and start accepting online payments today.

The key players in online payments

Before we delve deeper into what a payment gateway is, let's identify the key

players in online payments. When a customer clicks on the “Pay” button on

your website, there are various key players involved in the payment process (If

you want to find out more about the different entities taking part in the

transaction flow, check our video here):

The merchant – the online business that accepts card payments, operates in any

vertical (e.g., travel, retail, eCommerce, gaming, forex, etc.) and delivers digital

or physical products or services to consumers. 

The customer (also known as the cardholder) – the individual who accesses the

goods and services that the merchant is selling and initiates the transaction. 

The issuing bank, or the issuer – the bank, financial institution, company, or
credit union that issues or helps issue payment cards to customers on behalf of

the card schemes.

The acquiring bank, or the acquirer – the financial institution that processes card

payments on behalf of merchants while maintaining the merchant account. One

of its main roles is to securely route the card payment data onto the card

schemes (more of this below) for authorisation by the issuer.

The payment gateway – the technology used by merchants to authenticate and

securely transfer payment data between the various parties involved in the

transaction process. Once the payment is approved or declined by the parties

involved, the payment gateway sends back the relevant message to the

merchant. 

Card schemes – the entities that enable payments between merchants and card

issuers. Some major international credit card schemes include Mastercard, Visa,

American Express, Discover, and UnionPay.  

What is a payment gateway?

A payment gateway is a transaction processing technology that captures, stores,

and transmits card information from the customer to the acquirer. It then shares

the payment acceptance or decline notification back to the customer. In other

words, the payment gateway works as the middleman between a customer and
the merchant. By acting as an interface between a merchant’s website and their

acquirer, an online payment gateway can simplify how merchants process card

payments.

A payment gateway protects the customer’s sensitive payment data, as it relays

it from the merchant to the acquirer and then the issuer using data encryption.

The gateway follows several strict procedures for securing data that are defined

by the PCI-DSS compliance standard, which also includes annual audits and

recertifications to ensure the standard's validity (more of this below).

How does a payment gateway work?

Now that you’ve understood why a payment gateway is a must-have for

merchants, let’s analyse how it works throughout the payment journey. This

also includes the steps taken during payment card processing – i.e.,

authorisation, capture, and settlement.

When the customer selects the products/services they want to purchase, they

proceed to the payment page of an eCommerce website. Most payment

gateways offer different options for a checkout page. emerchantpay’s payment

gateway offers tailored options for your payment page that match your business

needs. (Learn all you need to know about the different integration options in our

relevant article and video).

The customer enters their credit or debit card details on the payment page,

including the cardholder’s name, card number, card expiration date and card

verification value (CVV) number. This information is securely passed onto the

payment gateway depending on the merchant's preferred integration (hosted

payment page, server-to-server integration, or client-side encryption).

The payment gateway encrypts the card details and performs fraud checks

before sending the card data to the acquirer.

The acquirer securely sends the information to the card schemes which carry out

another layer of fraud checks, and the schemes transmit the payment data to the

issuer for payment authorisation.

Authorisation – The issuer authorises the transaction once it performs the

necessary fraud screening – namely, it validates the transaction information and

ensures the cardholder has adequate funds for the purchase and/or that the bank

account is valid. The issuer's approved or declined payment message is

transferred from the card schemes to the acquirer.

The acquirer sends the approval or decline message back to the payment

gateway which then transmits the message to the merchant. Based on the

message, the merchant may either display a payment confirmation page or ask

the customer to provide another payment method.

Card capture requests – once the authorisation is completed, the merchant can

“capture” the amount for the purchase from the buyer to the merchant account.

The customer will not be billed until the capture has occurred, but the funds are
reserved, and their card limit is reduced.

Settlement – if the payment is approved, the acquirer collects the payment

amount from the issuing bank and puts the funds ‘on hold’ into the merchant

account (more on the merchant account below). When the actual settlement will

happen depends on the agreement the merchant has with their payment service

provider.

Both merchants and customers benefit from a payment gateway, although most

of its activity happens behind the scenes of the payment process. All the steps

mentioned above can happen in near real-time or take a few second

Online Payment Gateways in India

A payment gateway is an application that makes the online payment

process very simple and easy. It is actually a medium that connects a

merchant's mobile application or website with the bank. When you make

payments through a payment gateway, the merchant's website sends your

debit/credit card details to the gateway for confirmation. The payment

gateway then verifies the details from the bank and the amount gets

transferred from your bank account to the merchant's bank account.

Online Payment Gateways in India 2023

There are various payment gateways in India that allow customers to make

payments online. Some of the popular ones are:

Cashfree Payments

Bill Desk

PayU

CCAvenue

Instamojo 

Direcpay

JusPay

 Atom Paynetz

 ePaisa

  Airpay

  Emvantage

  Transecute

  Zaakpay

 Razorpay

Cashfree Payments

Cashfree Payments is a renowned payment and API banking firm in India. It

accepts over 120 payment modes including debit cards, credit cards, Paytm, net

banking (65+ banks), EMI options, and UPI. In addition to this, Cashfree

Payments supports PayPal, NEFT, and IMPS.

Bill Desk

Bill Desk is a popular payment gateway that allows people to pay and receive

all their bills at one place. A lot of Indian banks are connected with Bill Desk to
make the payment process simple, quick and safe. Using Bill Desk, customers

can decide how and when to make payments and they can also set payment

reminders or alerts.

PayU

PayU is one of the top payment gateways in India, which supports 150+ modes

of payment including UPI, net banking, debit and credit cards, and static and

dynamic QR. The payment gateway allows businesses to accept payments in

multiple currencies. It also provides a variety of payment solutions such as EMI

and BNPL, Native OTP, and Pay with Rewards for loyalty programs. It

simplifies the process of managing payments for businesses through its user-

friendly merchant dashboard.

CCAvenue Payment Gateway

CCAvenue is another a popular payment gateway, which offers multiple

payment options. It supports six credit cards, namely, JCB, MasterCard, Visa,

American Express, Diners Club and eZeClick. CC Avenues payment page can

be viewed in 18 different languages (Indian as well as international) and it

accepts payments in 27 foreign currencies. Some of these currencies are Euro,

Singapore Dollar, Indian Rupees, Japanese Yen, American Dollar, UAE

Dirham, Pound Sterling, Hong Kong Dollar, Qatari Riyal, Bahraini Dinar, Baht,

Sri Lankan Rupee, Malaysian Ringgit, Taka, New Zealand Dollar, Canadian

Dollar, Nepalese Rupee, Australian Dollar, Omani Rial, Swiss Franc, Kuwaiti

Dinar, Chinese Yuan Renminbi, etc.

Instamojo Payment Gateway

Instamojo is one of the best payment gateways for purchase of digital files,

tickets, services, goods, music, videos, etc. The payment process is quick and

secured with bank level security. Merchants can use this payment gateway to

collect payments on Facebook, Whatsapp and Instagram among others. This

gateways also allows merchants to collect their payments via SMS, Email and

instamojo username.

Direcpay Payment Gateway

Direcpay is a payment gateway that supports different types of credit cards and

debit cards. Using Direcpay merchants can accept mobile payments and

payments made via net banking as well. It is a solution for merchants and

companies who deal with ecommerce and online transactions. Payments using

Direcpay can be made using different types of foreign currencies. This payment

gateway is secure and easy to use.

JusPay

This secure payment gateway is popular for offering the express checkout

feature and Secure 1-Click experience for Mobile Payments. It auto processes

OTP from SMS and optimizes network efficiently to reduce the loading time of

a page.

Apply Credit on Bankbazaar

Atom Paynetz Payment Gateway

Atom Paynetz is a leading payment gateway that provides over a hundred

payment options. It supports domestic credit cards such as Visa, MasterCard,

JCB, American Express, Discover and Diners. It offers revenue boosters such as

Promotion and Discount Engine, Multi Bank EMI, express payments, etc., to

merchants.

ePaisa

ePaisa is a Point of Sale Android App that empowers business owners with the

simplest and smartest tools for accepting all forms of payment, managing

inventory, accessing real-time sales reports and customer information on one

seamless, multi-lingual, cloud-based platform.

Airpay

This payment gateway allows merchants and businesses to accept debit or credit

card payments on website, wapsite and mobile apps in a secure and hassle free

manner.

Emvantage

Using this payment gateway, merchants can manage a large number of

transactions easily and in a secure way. Emvantage allows merchants to collect

payments using multiple payment modes such as credit cards, debit cards,

prepaid cards, mobile payments, Netbanking, etc.

Transecute

Using this payment gateway, merchants can accept online payments from their

customers. People can pay using their Visa or MasterCard credit cards. The

service is easy to use and integration takes less than 30 minutes.

The above mentioned payment gateways are among the best in India and they

provide extremely secure platforms for people to make their payments online

quickly without any worry.

Zaakpay Payment Gateway

Zaakpay is another popular payment gateway that supports all international and

Indian MasterCard credit cards, Visa credit cards, Discover, and Diners credit

cards. It is a secure gateway and the payments on this portal can be made using

a few clicks.

Razorpay Payment Gateway

Razorpay was founded in 2014 and is one of the top payment gateway in India.

The Bangalore-based emerging fintech company has received more than $200

million in funding to date and became a unicorn startup of India in October

2020 with over a $1 billion valuation. The payment gateway allows you to

accept payment via various types of methods such as credit/debit card, net

banking, UPI, and popular wallets that include JioMoney, FreeCharge, Airtel

Money, etc.

Find a CAR

FAQs on Online Payment Gateways in India

What is Airpay?

Airpay is a payment gateway platform and this helps in global ecommerce and

retail. This is an all-inclusive payment app and this provider works towards

making your monetary transactions easier and faster.

Which is better, Paytm or PayPal?

PayPal is easy in terms of website integration. Most Indian customers prefer

Paytm over PayPal. Both allow you to accept INR payments. While PayPal

charges 2.5% for every transaction, Paytm charges you 2%.

Which is the cheapest payment gateway?

Cashfree Payment gateway is as of now, one of the cheapest payment gateways

in the country. This offers the lowest TDR.

Is UPI available only in India?

As of December, 2022, UPI is available in India, Bhutan, Nepal, UAE and the

UK. Soon, UPI can also be accessed in the European Union, Singapore and

other locations around the globe.

Who regulates payment gateways in India?

The Reserve Bank of India (RBI) regulates the payment gateways in India. RBI

sets the policy for all the online payment gateways in India and decides the fund

transfer limits, offers and others.

Can the same payment gateway be used by multiple websites?

Yes, multiple websites can use a single gateway. This helps to forecast market

movement, manage proceeds, and compare more easily by managing all internal

accounts with a single user.

What is chargeback in payment gateway?

Chargeback is a provision by banks and card networks to protect the cardholder

from fraudulent or unauthorized payments. This is a dispute against a

transaction which is made by the cardholder and is reported to the bank that

issued the card.

Does ePaisa support mobile devices?

Yes, ePaise support mobile devices such as iPhone, Android devices, and even

iPads.

Can I have multiple UPI IDs?

Yes, if you have more than one bank account, you can create an UPI ID for each

of your bank accounts.

I have cancelled a transaction made through BillDesk. When will I receive

my refund?

The refund gets initiated by the merchant once you have canceled a transaction.

The refund is generally credited to the bank account within 5-7 days from the

date of refund. In case, refund not credited contact the merchant customer care

for details.

What is the maximum amount allowed on the payment page for each

transaction?

A customer can make a maximum payment of Rs.5 lakh for each transaction

and the transaction limit can be raised by making a request with Razorpay

support.
Q. 2. Study and document different lines of credit offered
by the banks to retail customers in India.

ANS.
Different Types of Bank Loans in India

Loans can be utilised for various things in today’s world. It can be used for

funding a start-up to buying appliances for your newly purchased house. Let us

talk about the different types of loans available in the market and their specific

characteristics that make these loans useful to the customers.

Personal Loans:

Most banks offer personal loans to their customers and the money can be used

for any expense like paying a bill or purchasing a new television. Generally,

these loans are unsecured loans. The lender or the bank needs certain documents

like proof of assets, proof on income, etc. before approving the personal loan

amount. The borrower must have enough assets or income to repay the loan. In

case of personal loans, the application is 1 or 2 pages in length. The borrower

gets to know about the denial or approval of the loan within a couple of days.

You must remember that the rate of interest associated with these loans can be

on the higher side. The tenure of these loans is not that long. So, if you borrow a

big amount, it can be difficult for you to repay without planning your finances

properly.
Credit Card Loans:

When you are using a credit card, you must understand that you will have to

repay for all the purchases you make at the end of the billing cycle. Credit cards

are accepted almost everywhere, even when you are travelling abroad. As it is

one of the most convenient ways to pay for the things you buy, it has become a

popular loan type.

In order to apply and avail a credit card, all you need to do is fill out a simple

application form provided by the card issuer. You can also choose to apply for a

credit card online. These plastic cards come with great rewards and benefits. It’s

the loan where you need to repay on time but you are also handsomely rewarded

for using it.

Obviously, there are pitfalls associated with this type of loan. You must

understand that there is a high amount of interest on the amounts you borrow on

your credit card. If you do not pay your credit card bills on time, the interests

will keep piling and might be difficult for you to manage your finances with the

rising outstanding balance. But if you use a credit card wisely and clear all your

debts on time, it can definitely prove to your best friend in your pocket.

Home Loans:

When you wish to purchase a house, applying for a home loan can help you to a

great extent. It provides you the financial support and helps you buy the house

for yourself and your loved ones. These loan generally come with longer
tenures (20 years to 30 years). The rates offered by some of the top banks in

India with their home loans start at 8.30%. Your credit score is checked before

the loan request is approved by the lender. If you have a good credit score, there

is a fair chance that you will be able to enjoy lower rates of interest with your

home loan.

Home loans are primarily taken for buying new homes. However, these loan can

also be used for home renovations, home extensions, purchasing land

property, under-construction houses, etc.

Car Loans:

Buying a car can definitely instil a great sense of joy and happiness in you. A

car will remain as your asset and it is going to be one of the biggest investments

that you make. A car loan helps you to pave the path between your dream of

owning a car and actually buying your car. Since credit reports are crucial for

judging your eligibility towards any loan, it is good to have a high credit score

when you apply for a car loan. The loan application will get approved easily and

you might get a lower rate of interest associated with the loan.

Car loans are secured loans. If you fail to pay your instalments, the lender will

take back your car and recover the outstanding debt.

Wheeler Loans:

A two-wheeler is pretty essential in today’s world. May it be going for a long

ride or a busy road in a city – bikes and scooters help you to commute

conveniently. A two-wheeler loan is easy to apply for. This amount you borrow

under this loan type helps you to purchase a two-wheeler. But if you do not pay

the instalments on time and clear your debt, the insurer will take your two-

wheeler to recover the loan amount.

Small Business Loans:

Small Business Loans are loans that are provided to small scale and medium

scale businesses to meet various business requirements. These loans can be used

for a variety of purposes that help in growing the business. Some of these could

include purchase of equipment, buying inventory, paying the salaries of

employees, marketing expenses, paying off business debts, meeting

administrative expenses, or even to open a new branch or take up a franchise.

The eligibility criteria for small business loans varies from lender to lender, but

the common ones are the age of the business owner, the number of years the

business has been operational, income tax returns, and statement of the previous

year’s turnover that has been audited by a Chartered Accountant (CA).

Payday Loans:

Payday loans are also called salary loans. These are unsecured short-term loans

that require the customer to be employed with a steady income. They usually

have high interest rates. This is based on the applicant’s credit profile, age, and

income. Documents required would be salary statements and other proof of

income.

Cash Advances:

These loans are offered by credit card issuers and allow credit card users to

withdraw cash from an ATM machine using the credit card. The amount of cash

that can be withdrawn from a credit card in this way will depend on the credit

limit available. The cash has to be paid back with interest, which is usually

calculated from the day the cash has been withdrawn. There are also other fees

associated with a cash advance, such as cash advance fees and ATM or bank

fees.

Home Renovation Loan:

Home innovation loans are offered by most lenders. These can be availed to

meet the expenses related to renovation, repairs, or improvement of an existing

residential property. Depending on the lender, there is a lot of flexibility with

what you can do with a home renovation loan. You can use it to buy products or

pay for services. For example, you can use it to pay for the services of a
contractor, architect, or interior decorator. You can also use it to buy furniture,

furnishings, or household appliances such as a refrigerator, washing machine,

air conditioner, etc. It can be used for painting, carpentry, or masonry work as

well.

Agriculture Loan:

Agriculture loans are loans that are provided to farmers to meet the expenses of

their day-to-day or general agricultural requirements. These loans can be short

term or long term. They can be used for raising working capital for crop

cultivation or to buy agricultural equipment.

Gold Loan:

A gold loan can be used to raise cash to meet emergency or planned financial

requirements, such as business expansion, education, medical emergencies,

agricultural expenses, etc. The loan against gold is a secured loan where gold is

placed as security or collateral in return for a loan amount that corresponds to

the per gram market value of gold on the day that the gold has been pledged.

Any other metals, gems, or stones that are in the jewelry will not be calculated

when determining the value of the gold loan.

Loan Against Credit Card:

Loan against credit card is like a personal loan that is taken against your credit

card. These are usually pre-approved loans that do not require any additional
documentation. Depending on the lender, this can be converted into a personal

loan that is interest free within a certain period of time. After that, it will attract

a certain percentage of interest. There is a processing fee associated with

converting the credit limit that is pre-assigned into a loan.

Education Loan:

An education loan is availed specifically to finance educational requirements

towards school or college. Depending on the lender, it will cover the basic fees

of the course, the exam fees, accommodation fees, and other miscellaneous

charges. The student is the borrower with any other close relative being the co-

applicant, such as a parent, grandparent, spouse, or sibling. It can be availed for

courses in India or abroad. It can be taken for a wide variety of recognised

courses which are either part time or full time. They cover vocational courses as

well as undergraduate and postgraduate courses.

Consumer Durable Loan:

Consumer durable loans are loans that are availed to finance the purchase of

consumer durables such as a electronic gadgets and household appliances.

Depending on the lender, they can be used to buy anything from mobile phones

to television sets. Loan amounts range from Rs.5,000 to Rs.5 lakh. There is no

security deposit required usually. Some lenders offer 0% interest on consumer

durable loans with instant approvals and minimal documentation required as

well.
 RELEVANT PAGES FOR YOU

 Loan Against Agricultural Land

 Guide to Buy Flats

 Home Loan Procedure

 Top Housing Finance Companies

 Types Of Agricultural Loans In India

 Home Loan Processing Fee

 Home Loan Provisional Certificate

 Documents Required For Home Loan

 Documents for Buying Resale Flat

 Secured Vs Unsecured Loan

 Home Loan Approval Time

 Guied To Buy New House

Loan Against the Insurance Schemes:

If your insurance scheme is eligible for a loan, you can avail the loan amount

from your insurer. You may also use the investment for insurance as collateral.

Generally, loans cannot be availed right from the commencement of the

insurance policy. After 3 years into the scheme, you can apply for a loan against

insurance.
 Loan Against Fixed Deposits:

This is a type of loan where your fixed deposit is the collateral. For example, if

you have a fixed deposit of Rs.10 lakh in the bank, you can avail a loan of up to

Rs.8 lakh. However, the rate of interest associated with this kind of a loan is

usually higher than the fixed deposit rate.

Loan Against Mutual Funds and Shares:

Certain lenders provide loan against your mutual fund value and share value.

However, you will not be able to borrow huge amounts under this type of loans.

What is a Secured Loan?

A secured loan is a loan given out by a financial institution wherein an asset is

used as collateral or security for the loan. For example, you can use your house,

gold, etc., to avail a loan amount that corresponds to the asset’s value. In the

case of a secured loan, the bank or financial institution that is dispensing the

loan will hold on to the ownership deed of the asset until the loan is paid off.

Examples of secured loans

 Loan against property

 Home equity line of credit

 Car loan
 What is an Unsecured Loan?

Unsecured loans, like the name suggests, is a loan that is not secured by a

collateral such as land, gold, etc. These loans are comparatively riskier to a

lender and therefore associated with a high interest rate. When a lender releases

an unsecured loan, he does so after evaluating your financial status and

assessing whether or not you are capable of repaying your loan.

Examples of unsecured loans

 Credit cards

 Personal loans

 Student loans

Difference Between Secured and Unsecured Loan (Secured vs

Unsecured loan)

 The most important difference between a secured and unsecured loan is the

collateral required to attain the loan. A secured loan requires you to provide

the lender with an asset that will be used as a collateral for the loan. Whereas

and unsecured loan doesn’t require you to provide an asset as collateral in

order to attain a loan.

 Another key difference between a secured and unsecured loan is the rate of

interest. Secured loans usually have a lower rate of interest when compared to
 an unsecured loan. This is because unsecured loans are considered to be risker

loans by lenders than secured loans.

 Secured loans are easier to obtain while unsecured loans are harder to obtain,

as it is less risker for a banker to dispense a secured loan.

 Secured loans usually have longer repayment periods when compared to

unsecured loans. In general, secured loans offer a borrower a more desirable

contract that an unsecured loan would.

 Secured loans are easier to obtain for the mere fact that they are less risky for a

lender to give out, while unsecured loans are comparatively harder to obtain.

Is a Secured Loan Better than an Unsecured Loan?

Apart from being easier to obtain, the contract on a secured loan is usually more

favourable for a borrower than an unsecured loan. Often times, the repayment

periods are a lot longer, the interest rates are lesser, and borrowing limits are

higher. All these factors imply that opting for a secured loan is more beneficial

for a borrower.

Ever lenders prefer secured loans over unsecured loans as they are less risker to

dispense. Since borrowers have to provide an asset as collateral to obtain a

secured loan, there is a degree of certitude in the mind of the lender. The lender

is assured to get back the money loaned out, and even if he doesn’t the asset can

be used to recover the loss of non-payment.

 FAQs on Secured Loan

1. What is a secured loan's major benefit?

Due to the lower risk to the lender, you would be able to ask for higher sums

of money when it comes to secured loan. Some lenders provide unsecured

loans with longer repayment periods and lower interest rates. Due to the

collateral, obtaining a secured loan might be simpler.

2. What are some examples of secured loan?

Car loan, home loan, and loan against property are some examples of secured

loans.

3. What are some examples of unsecured loan?

Student loans, personal loans, and credit cards are some of the examples of

unsecured loans.

4. What is the main difference between secured and unsecured loan?

The collateral needed to obtain a loan is the key distinction between a secured

and an unsecured loan. When applying for a secured loan, you must deliver an

item that will serve as collateral for the loan. As opposed to secured loans,

which require collateral such as assets, unsecured loans do not.

5. What is the definition of unsecured loan?

Unsecured loans are loans that are not backed by a valuable asset, such as gold

or real estate. These loans carry a higher interest rate since they pose a greater

risk to the lender. When a lender approves an unsecured loan, he does so after
 examining your finances and determining whether you have the ability to pay

back the loan.

6. What are the disadvantages of secured loans?

The personal property listed as collateral for the loan is in jeopardy. If you run

into financial trouble and are unable to pay back the loan, the lender may seize

your property. Usually, the borrowed funds can only be used to buy a

particular object, such a house or a car.

7. Is obtaining a secured loan challenging?

No, obtaining a secured loan is not challenging. As you will be providing a

collateral for the loan, it will not be difficult to obtain.

 Hands on Practice Software
R Software
Introduction to R

R is a language and environment for statistical computing and graphics. It is

a GNU project which is similar to the S language and environment which was

developed at Bell Laboratories (formerly AT&T, now Lucent Technologies) by

John Chambers and colleagues. R can be considered as a different

implementation of S. There are some important differences, but much code

written for S runs unaltered under R.

R provides a wide variety of statistical (linear and nonlinear modelling, classical

statistical tests, time-series analysis, classification, clustering, …) and graphical

techniques, and is highly extensible. The S language is often the vehicle of

choice for research in statistical methodology, and R provides an Open Source

route to participation in that activity.

One of R’s strengths is the ease with which well-designed publication-quality

plots can be produced, including mathematical symbols and formulae where

needed. Great care has been taken over the defaults for the minor design choices

in graphics, but the user retains full control.

R is available as Free Software under the terms of the Free Software

Foundation’s GNU General Public License in source code form. It compiles and

runs on a wide variety of UNIX platforms and similar systems (including

FreeBSD and Linux), Windows and MacOS.

The R environment
R is an integrated suite of software facilities for data manipulation, calculation

and graphical display. It includes

 an effective data handling and storage facility,

 a suite of operators for calculations on arrays, in particular matrices,

 a large, coherent, integrated collection of intermediate tools for data

analysis,

 graphical facilities for data analysis and display either on-screen or on

hardcopy, and

 a well-developed, simple and effective programming language which

includes conditionals, loops, user-defined recursive functions and input

and output facilities.

The term “environment” is intended to characterize it as a fully planned and

coherent system, rather than an incremental accretion of very specific and

inflexible tools, as is frequently the case with other data analysis software.
R, like S, is designed around a true computer language, and it allows users to

add additional functionality by defining new functions. Much of the system is

itself written in the R dialect of S, which makes it easy for users to follow the

algorithmic choices made. For computationally-intensive tasks, C, C++ and

Fortran code can be linked and called at run time. Advanced users can write C

code to manipulate R objects directly.

Many users think of R as a statistics system. We prefer to think of it as an

environment within which statistical techniques are implemented. R can be

extended (easily) via packages. There are about eight packages supplied with

the R distribution and many more are available through the CRAN family of

Internet sites covering a very wide range of modern statistics.

 Book Review
Benjamin Graham(2013)The Intelligent Investor, Harper
Business
While physicist Sir Isaac Newton is widely viewed as the leading authority on

gravity and motion, economist Benjamin Graham, best known for his book The

Intelligent Investor, is lauded as a top guru of finance and investment. Known

as the father of value investing, The Intelligent Investor: The Definitive Book

on Value Investing is considered one of the most important books on the topic.

By evaluating companies with surgical precision, Graham excelled at making

money in the stock market without taking big risks.

One of Graham's key contributions was to point out the irrationality and group-

think that was often rampant in the stock market. Thus, according to Graham,

investors should always aim to profit from the whims of the stock market,

rather than participate in it. His principles of investing safely and successfully

continue to influence investors today.

This article will examine Graham's early career work, some key concepts

related to value investing from The Intelligent Investor, and how Graham's

ideas helped inform the successful investing principles of later investors,

namely Warren Buffett.1

KEY TAKEAWAYS
 Economist Benjamin Graham, best known for his book The Intelligent

Investor, is lauded as a top guru of finance and investment.

 Known as the father of value investing, The Intelligent Investor: The

Definitive Book on Value Investing is considered one of the most

important books on the topic.

 Graham's method advises investors to concentrate on the real-life

performance of their companies and the dividends they receive, rather

than paying attention to the changing sentiments of the market.

 Graham also advocated for an investing approach that provides a margin

of safety—or room for human error—for the investor.

 Most importantly, investors should look for price-value discrepancies—

when the market price of a stock is less than its intrinsic value.