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A Report Submitted to Punjabi University in Partial Fulfillment of the Requirements for the Degree of Bachelor of Business Administration

(2010-2012) Submitted to: Mrs. Kulwinder kaur submitted by: Harjinder Kumar


DECLERATION I hereby declared that the project entitled Banking and Schemes , A study conducted at Punjab State Cooperative Bank Limited Head Office Chandigarh is an original work carried out by me under guidance of Lect.Kulwinder kaur, submitted in the partial fulfillment of Bachelor of Business Administration and this has not been submitted in part or full towards any other degree or diploma.

ACKNOWLEDGEMENT Thanks to the almighty for showering his blessing on completion of my project. I want to thanks all the employees of the Punjab State Co-operative Bank Ltd. (Chandigarh) for their cooperation in successfully completion my project works on P.S.C.B. I am very thankful to all employees of Sector 34,Branch for their co-operation. I am thrilled to find that people here were very co-operative and helped me in all possible ways I am especially thankful to Mr.Rakesh Gupta (Manager) who is one of the busiest people for giving me actual knowledge about the successful banking, detail knowledge of Loan Procedure, Loan Schemes and giving me time out of his precious schedule. I would also like to thank to Ms Kulwinder Kaur who encourage me time to time and guide me for the completion of my project. At last but not least, I also thanks to all those persons who gave me every necessary knowledge and their heartily help in completion of my project work.

Harjinder Kumar



CHAPTER I : - INTRODUCTION Introduction to Banking Industry

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History of Banking Banking Institutions Functioning of a Bank Role of Banking Features of Cooperative Banks Cooperative Movement in India . A Historical Perspective Cooperative Banking in India Types of a Co-operative Bank Financial Sector Reforms and Credit Cooperatives Banking Sector Reforms and Urban Cooperative Banks

Introduction to Cooperative Banks

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Introduction to State Level organization Profile of The Punjab State Cooperative Bank
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Name of Departments Various Branches of PSCB Mission of the Bank: Objectives of Bank Technology Used In Bank Vision


Definition Research Design Objective of Study Collection of Data Limitations of Study


Definition of Loan Importance of Loans in Today's Life What is a Procedure? Importance of Procedure Manuals Loan Procedure Loan Schemes




Introduction to Banking Industry While walking in the streets of any town or city you might have seen some signboards on buildings with names-Canara Bank, Punjab National Bank, State Bank of India, United Commercial Bank, etc. What do these names stand for? Did you ever try to know about them? If you enter any such building you will find some kind of a business office. You will see some employees sitting behind counters dealing with visitors standing in front of them. You will find that some are depositing money at one counter while some are receiving money at another counter. Behind the counters in the office you will see tables and chairs

occupied by officers. On one side of the office you will also see a chamber (small partitioned room) where the manager is sitting with papers on his table. This is the office of a Bank. Bank, as we know people earn money to meet their day-to-day expenses on food, clothing, education of children, housing, etc. They also need money to meet future expenses on marriage, higher education of children, house building and other social functions. These are heavy expenses, which can be met if some money is saved out of the present income. Saving of money is also necessary for old age and ill health when it may not be possible for people to work and earn their living. The necessity of saving money was felt by people even in olden days. They used to hoard money in their homes. With this practice, savings were available for use whenever needed, but it also involved the risk of loss by theft, robbery and other accidents. Thus, people were in need of a place where money could be saved safely and would be available when required. Banks are such places where people can deposit their savings with the assurance that they will

be able to withdraw money from the deposits whenever required. People who wish to borrow money for business and other purposes can also get loans from the banks at reasonable rate of interest. Bank is a lawful organization, which accepts deposits that can be withdrawn on demand. It also lends money to individuals and business houses that need it. Banks also render many other useful services like collection of bills, payment of foreign bills, safe-keeping of jewellery and other valuable items, certifying the creditworthiness of business, and so on. Banks accept deposits from the general public as well as from the business community. Any one who saves money for future can deposit his savings in a bank. Businessmen have income from sales out of which they have to make payment for expenses. They can keep their earnings from sales safely deposited in banks to meet their expenses from time to time. Banks give two assurances to the depositors

a. Safety of deposit, and b. Withdrawal of deposit, whenever needed On deposits, banks give interest, which adds to the original amount of deposit. It is a great incentive to the depositor. It promotes saving habits among the public.

On the basis of deposits banks also grant loans and advances to farmers, traders and businessmen for productive purposes. Thereby banks contribute to the economic development of the country and well being of the people in general. Banks also charge interest on loans. The rate of interest is generally higher than the rate of interest allowed on deposits. Banks also charge fees for the various other services, which they render to the business community and public in general. Interest received on loan sand fees charged for services which exceed the interest allowed on deposits are the main sources of income for banks from which they meet their administrative expenses. The activities carried on by banks are called banking activity. Banking as an activity involves acceptance of deposits and lending or investment of money. It facilitates business activities by providing money and certain services that help in exchange of goods and services. Therefore, banking is an important auxiliary to trade. It not only provides money for the production of goods and services but also facilitates their exchange between the buyer and seller. As we may be aware that there are laws which regulate the banking activities in our country. Depositing money in banks and borrowing from banks are legal transactions. Banks are also under the control of government. Hence they enjoy the trust and confidence of people. Also banks depend a great deal on public confidence. Without public confidence banks cannot survive. History of Banking Banking industry in India originated in the last decades of the 18th century. The oldest bank in existence in India is the State Bank of India, a government-owned bank that traces its origins back to June 1806 and that is the largest commercial bank in the country. Central banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over these responsibilities from the then Imperial Bank of India, relegating it to commercial banking functions. After India's independence in 1947, the Reserve Bank was nationalized and given

broader powers. In 1969 the government nationalized the 14 largest commercial banks; the government nationalized the six next largest in 1980. To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and III Phase I The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks, mostly Europeans shareholders. In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of India came in 1935. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline the functioning and activities of commercial banks, the Government of India came up with The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers for the supervision of banking in India as the Central Banking Authority. During those days public has lesser confidence in the banks. As an aftermath deposit mobilization was slow. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Moreover, funds were largely given to traders.

Types of a Co-operative Bank There are two types of co-operative banks in India. The first is the short term lending oriented Co-operative Banks. In this category there are again three sub categories of banks which are the State Co-operative banks, District Cooperative banks and the Primary Agricultural Co-operative societies. The second is the long term lending oriented Co-operative banks. In this second category there are land developments banks which are at three levels. First is the state level, the second is district level, and the third is the village level. Again the Co-operative banking structure in India is divided into five main categories and these categories are: 1. Primary Urban Co-operative Banks. 2. Primary Agricultural Credit Societies. 3. District Central Co-operative Banks. 4. State Co-operative Banks. 5. Land Development Banks. It is very much clear that co-operative banks have very much importance in national development. Without the help of co-operative banks, millions of people in India would be lacking the much needed financial support

Financial Sector Reforms and Credit Cooperatives: The process of economic and financial sector reforms were initiated in 1991, as a step

towards a broader process of international economic integration and globalization of financial markets. The objectives of the reform program have been to remove the structural constraints in the factor and product markets, allowing market forces to improve efficiency and ensuring outward orientation to the economy for bringing about a higher degree of integration of the Indian economy with the rest of the world. It may be mentioned that the structural reforms in the trade regime and industrial and financial policies have been given utmost priority in order to ensure macro-economic stability. A healthy financial system being the principal pre-requisite for the globalization process, the banking sector being an important component thereof came into sharper focus.

Thematic Framework for Analysis: The literature relating to the economic reforms, impact of reforms on cooperative sector, banking reforms and its impact on credit cooperatives and so on are rather opulent. In so far as the impact of reforms on the cooperative character of the cooperatives is concerned, be it in credit or non-credit segment, one may safely say that neither the policy makers nor the researchers have shown any

serious interest. And this is particularly true in India. It seems the cooperative researchers, particularly doctoral students are more concerned with the assessment and measurement of the impact of reforms on the performance of cooperatives using a definite and quantifiable parameters. While the difficulties in examining the impact of reforms on the cooperative character of cooperatives are quite understandable, it does not mean the same can not be attempted meaningfully. What is required perhaps is a normative analytical framework, which is different from the one usually used for capturing the impact of reforms on cooperatives. Using this normative analytical framework, Ramesha (1996) in his empirical study points out that Self Help Groups (SHGs) which are not registered as cooperatives are, in practice, much more closer to cooperative principles than cooperatives themselves. Given the diversity that prevails today in the cooperative sector and the levels of reforms thereof, a general discussion on the impact of reforms (economic or banking sector) on cooperative character would be almost impossible. For the sake of research, even if one attempts, the conclusions could be abstruse. Thus, in the present paper an attempt is made to evolve a conceptual framework for further research concerning Urban Cooperative Banks (UCBs) in India against the backdrop of banking sector reforms. However, all through the discussion, it is attempted to maintain a special thrust on the cooperative character of UCBs. The analytical framework for the aforesaid purpose rests on three basic assumptions; a) Banking sector reforms essentially refers to the guidelines/directions from the regulator (central bank of the country) and the Government during the last ten years.

b) Urban Cooperative Banks (falling under Banking Regulation Act of 1949)

are more influenced by banking sector reforms in the short-run than other credit cooperatives. c) Cooperative character of urban cooperative banks can be captured in terms of the adherence to cooperative principles.

Urban Cooperative Banks in India Inspired by the success of urban cooperative movement in Germany and Italy, in the early part of the last century, urban cooperative credit societies were organized on community basis and their lending operations were confined to meeting the consumption oriented credit needs of their members. Many urban cooperative banks, which were organized initially, were essentially credit societies but later converted themselves into urban cooperative banks. Interestingly, many urban cooperative credit societies, which were not engaged in any banking functions, also used the word .bank. There was no well-defined concept of urban cooperative bank till 1996, when banking laws (provisions of section 5(CCV) of Banking Regulation Act 1949) were made applicable to cooperative banks. Accordingly, an urban cooperative bank was defined as a Primary Cooperative Bank other than a primary agricultural credit society; (i) the primary object of which is the transaction of banking business, (ii) the paid up share capital and reserves of which are not less than Rs.1 lakh (0.1 Mn) and (iii) the by-laws of which do not permit admission of any other cooperative society as a member. The word .primary. is used to denote that the urban cooperative banks perform the role of a primary unit in a 3-tier cooperative credit structure. Over a century old urban co-operative credit movement today, has a network of 2,084 urban co-operative banks with 7,368 branch outlets spread all over the country. The deposits and advances of urban cooperative banks constitute for about 9 and 8 percents of the aggregate deposits and advances of the banking system

respectively. In so far as the growth and performance are concerned, it may be mentioned that the urban cooperative banks were a shade better than the scheduled commercial banks and public sector banks till 1999 (Ramesha K, 2001). However, it has to be recognized that the prudential standards and regulatory system prescribed for urban cooperative banks were relatively soft in comparison with those of commercial banks. This is partly on account of historical reasons and partly due to the preferential treatment of cooperative structure in general. If one benchmarks the growth and performance of urban cooperative banks with that of the banking industry (which is dominated by public sector banks) after 2000 and onwards, then the scenario undergoes a complete change. For instance, between

2001 and 2002, although owned fund, deposits and advances of urban cooperative banks increased somewhat impressively, i.e., by 27, 15 and 14 percents respectively, the gross Non Performing Assets (NPAs % to total advances) during the same period went up from 16 to 22 percent (3). The percentage of the profit making urban cooperative banks to the total stood at 87 percent as at the end of March 31, 2002. On the whole, the performance of the urban cooperative banks particularly after 2000 has been on the decline, and a host of factors may be responsible for this which may include increasing

competition, tightening prudential standards and supervision and regulatory standards, multiple control, etc. Following are the features of urban cooperative credit banks in India. 1) Urban cooperative banks are registered under Cooperative Societies Act of the respective state Governments. The Reserve Bank of India (Central Bank of the country) is the regulatory and supervisory authority for UCBs for their banking related operations. Managerial/Administrative aspects of UCBs continue to remain with the state Governments. The Union Government regulates the UCBs having multi-state presence and such banks are registered under Multi-state Cooperative Societies Act. Controlling of UCBs by state Government and the Central Bank of the country is generally known as .duality of control.. 2) The discernible characteristic feature of UCB structure is its heterogeneity. Nearly 50 percent of the banks are unitary in nature (with single branch banking). Heterogeneity in their size is another facet of the UCB structure. The larger UCBs (scheduled UCBs) numbering just 51 accounts for more than 40 percent of the business from UCB sector as against 800 UCBs accounting for just 6 percent. 3) UCB structure is exemplified by its pronounced focus on the needs of small men and micro credit sector. The average size of the loan also works out to be relatively low and an overwhelming segment of UCBs have been able to comply with the priority sector lending targets (directive from central bank to lend to certain sectors like small enterprises, trade & business, housing etc) set by the central bank of the country. 4) Urban cooperative credit movement in general, and the number of UCBs in particular is concentrated in few states. Five states account for 80 percent of the total UCBs in the country and one of them accounts for as high as 32 percent of the total UCBs.

5) A noticeable feature of urban banking sector is its financial independence. Unlike the agricultural cooperative credit structure, the urban cooperative banks are not surviving on external assistance such as refinance support. In fact, UCBs have been supporting federal units (District Central Cooperative Banks and State Cooperative Banks) by keeping their surplus resources in the form of deposits.

Banking Sector Reforms and Urban Cooperative Banks: The reform measures as applicable to UCB sector may be classified into three broad categories. First, while recognizing the differences between commercial and urban cooperative banks, a majority of the prudential norms introduced for commercial banks are being extended to UCBs, albeit in a phased manner. Second, policy initiatives have been introduced (through Monetary & Credit Policies) to contain the systemic risk emanating from cooperative sector, in particular from UCB sector. Lastly, duality/multiplicity of control has been recognized as an irritant to their effective regulation and supervision. Although, the focal point of the reforms has been prudential norms, steps are also being initiated to professionalize the management and manpower of UCBs. The influence of the reforms on the functioning as well as the cooperative character of UCBs is discussed below. Prudential Standards: To begin with, in 1993, RBI introduced Income Recognition and Asset Classification Norms to UCBs. In 1995, the prudential exposure norms

to single/group borrowers were also made applicable to them. Subsequently, in a phased time frame, the capital adequacy norms (capital to risk weighted asset ratio) were also made applicable to UCBs. While the promotion of prudent financial practices has become a sine quo non in the highly competitive globalize environment (for safeguarding the financial health of the system, in particular of the UCB sector), it should not be forgotten that such standards were contrived essentially for commercial banks. Although, the notion of a code of good practices is intuitively appealing, the temptation to prescribe universally valid model codes which do not allow for differences in institutional development, legislative frame work and more broadly, different stages of development must be avoided. To put it differently, while there is no dispute that UCBs should be subjected to prudential standards (capital adequacy, asset classification, income recognition and provisioning norms), it is not yet clear, whether the prudential standards prescribed for commercial banks would work without distorting the cooperative character of UCBs.

For instance, capital is widely regarded as a measure of the risk taking ability of a financial intermediary and therefore, prescription of a minimum capital the urban cooperative bank (to conduct banking business) may seem to be justified from the viewpoint of ensuring stability in the financial system. If one looks at a cooperative credit society/bank, as a typical cooperative created on the basis self help and mutual help, then possibly the members (generally with limited means) may not be able to raise the required capital. If capital base is to be strengthened, as it is happening in India, these banks will have to start dealing with non-members (or nominal members) on a large scale and perhaps may have to shift from .surplus. to The need to increase the deposit base as also to gainfully employ the funds generated have made it necessary to have a large number of customers who are

not the members. It is worth mentioning that in India, urban cooperative banks though on par with commercial banks with regard to prudential standards, like the latter, are not permitted to boost their capital base through sub-ordinate debts. Further, there are ceilings on the value individual share holdings have not been revised since long. Secondly, in order to ensure the adherence to the prudential standards by cooperative credit societies/banks, the regulators frequency (as also scope) of intervention increases thereby affecting the cooperative character. In this regard, in India regulators intervention has indirectly infringed upon the functional autonomy covering areas like share-linkage, credit, investment, deposit and so on. Thirdly, in the name of protecting the interests of the depositors (majority of whom are not the members of cooperative banks), not only prudential standards are extended but even the professional content in the management committee of the urban cooperative credit societies/banks is also stipulated in India by the regulator/Government. While one can not remain ignorant of the role of the Government in the promotion of and development of cooperation in India, prescribing the number and qualification of the nominee directors would no doubt impair the cooperative character. Fourthly, the strict entry norms in terms of minimum capital, membership prescription as it prevails in India, prevents the birth of new credit cooperatives and constrain the existing societies in so far as the expansion is concerned. Fifthly, with the introduction of same prudential standards the difference between urban credit cooperatives/banks and commercial banks get blurred and possibly, the former may have to progressively imbibe the character of the latter (identity crisis?). There could be several such dimensions as discussed above. Nonetheless, it appears that the benefits of the prudential standards to urban credit cooperatives/banks come at a cost. The cost, needless to mention, is the dilution in the cooperative character (in terms of adherence to the principles).

Supervision and Regulation: At present in India, urban credit cooperatives/banks are subjected to duality of control, meaning that the administration related aspects are being supervised and regulated by State Government and the banking operations are supervised and regulated by the central bank of the country. This has, understandably resulted in overlapping jurisdiction of the state Government and the central bank of the country. Moreover, a clear-cut demarcation of the financial and administrative areas for regulation is almost impossible and even if it is possible it surely acts as an impediment in effective supervision. While the central bank of the country has the wherewithal under the Banking Regulation Act for dealing with crucial aspects of functioning of commercial banks, in the case of co-operative banks it requires the intervention of the Registrar of Cooperative Societies (state Government). Given the number of urban credit cooperatives/banks, the central bank of the country is not in a position to effectively supervising them. Thus, the duality of control not only affects the quality of supervision and regulations, but also the functioning of the urban cooperative banking

sector. Needless to mention, under this regime of duality of control the urban cooperative banks may turn out to be neither cooperative nor commercial banks. There are some areas of concern, some of them may be good for research as well.

While the progress of the cooperative movement in India in general, and the cooperative banking in particular has been rather appreciable, the movement can not be termed as a vibrant one in regard to cooperative values and philosophy as enunciated in cooperative principles. With regard to the extension of reforms to cooperative banking segment, it is yet not clear as to whether the same would ensure soundness and stability in the cooperative banking segment. Although the promotion of prudent financial practices in urban cooperative banks has become a sine quo non in the present competitive environment, one can not afford to ignore that such practices were contrived essentially for commercial banks. It must not be forgotten that the notion of a code of good practices though intuitively appealing, the temptation to prescribe universally valid model codes which do not allow for differences in institutional development, legislative framework and more broadly, different stages of development must be avoided. It seems the extension of reforms/prudential standards to urban cooperative banking has provided substantial scope for the external intervention and in the process, affecting the cooperative character in terms of adherence to the cooperative principles. Logically, if the prudential standards, and supervision and regulation for cooperative banks were same as that of commercial banks, then there would not be any difference worth mentioning between these entities. There are several areas that need the intervention of researchers and

perhaps, more important amongst them are prudential standards, professional management & governance and supervision & regulation. The framework for such research should essentially be within the guiding principles of cooperation. However, in the long run, if cooperative character of credit cooperatives is to be preserved, the prudent practices, system of governance and supervision & regulation all should emanate from the guiding principles of cooperation.



Introduction to State Level organization

The Punjab State Cooperative Bank was established on 31st August, 1949 at Shimla vide registration No. 720 has a principle financing institution of the cooperative movement in Punjab. In 1951 its Head Office was shifted to Jalandhar from where it moved in 1963 to its present building at Chandigarh. In the cooperative Banking structure, the position of the Punjab State Cooperative Bank is extremely important as the whole credit system revolves around it. It has 3 Divisional Offices at Amritsar, Bhatinda and Jalandhar. It has 19 branches and 3 extensions counters operating in the city of Chandigarh. Besides this, there are 19 District Central Cooperative Banks having 783 branches and 16 extension counters in the State of Punjab affiliated with it. The bank was established to help to provide timely and adequate flow of credit to the farmers for agriculture and allied activities through PSCB

Organizational Structure The bank operates in the city of Chandigarh having 19 branches and 3 extensions Counters. It has 3 Divisional Offices in Punjab at Amritsar, Jalandhar & Bathinda. The organizational structure is as under:-

Organizational Structure So State co-operative banks are a federation of central co-operative banks and act as a watchdog of the co-operative banking structure in the state. Its funds are obtained from share capital, deposits, loans and overdrafts from the Reserve Bank of India. State co-operative banks lend money to central co-operative banks and primary societies and not directly to farmers. Expectation of the bank from the public for enhancing its effectiveness and Efficiency:The Bank expects that the general public should take maximum benefits of the services offered by it. The bank expects from the public that they should keep their surplus money in the shape of deposits with the Bank and take maximum benefits of various loan schemes of the Bank. The bank also expects that public should repay the loans taken by it timely so that the bank may be able to channelize the same. It will be in the interest of the public also. Arrangements and methods made for seeking public participation/contribution:The Bank has an elected Board of Directors which is the main governing body of the bank. District and State level Technical Committees are established to fix the

scales of finance of various crops. Customer meets Annual General Body meeting, Annual Cooperative Week celebrations during the month of November every year. Mechanism available for monitoring the services delivery and public grievances resolution:The Bank is governed by an elected Board of Directors which regularly monitors the services delivery system. The Bank is regulated and inspected by Reserve Bank of India, NABARD and State Govt. There is a statutory audit system in the Bank by the Auditors, under the control of Chief Auditor, Cooperative Societies, Punjab. To properly handle the public grievances/complaints, a separate Vigilance Cell has been created at the Head Office of the Bank.


HEAD OFFICE, CHANDIGARH Central co-operative banks are the federations of primary credit societies in a district and are of two types those having a membership of primary societies only and those having a membership of societies as well as individuals. The funds of the bank consist of share capital, deposits, loans and overdrafts from state co-operative banks and joint stocks. These banks finance member societies within the limits of the borrowing capacity of societies. The profile of Patiala Central Cooperative bank is as under:

Name of society- The Punjab State Co-Operative Bank Ltd. Area Of OperationAs per bye-law no. 3, the object of the Bank is to Facilitate the operation of. The affiliated Co-operative societies by.

Providing Banking and credit facilities to its members as convenient and easy terms are possible. Encouraging thrift and saving amongst its members by offering suitable facilities. Making arrangement for supervision and inspection of its affiliated Cooperative Societies. Undertaking such measures as are conductive to the spread of Co-operative education and training.

Under the Indian Co-operative Societies Act-ii of 1912 the P.C.C.B with registration no. 776 on 28-09-1949 by the registrar co-operative. Co-operative Societies PEPSU although the old bylaws do not mention that area of operation of the Bank. The copy of the application submitted for its registration shows Patiala and Sangrur district as area of operation of the Bank. With the creation of new district of Mohali , Dera Bassi block transferred to that district. There are 8 Blocks Patiala, Bhunerheri, Samana, Patran, Nabha, Rajpura, Ghanour and Sanour. There are 4 Subdivisions namely Patiala, Samana, Nabha and Rajpura.

Name of Departments There are various sections / departments which are working in the Bank. Here we tell us about those departments / sections which play important role in Banking. We tell about his Head of Department, its functions & number of members working in the departments. Functions of Various Departments

To maintain monthly statements etc; like as LIC, Income Tax, GSLI Grievance of public & branches. Yearly statements. Master policy of holder such as EDLT, GI, and House Loan. Statements of NABARD. House Loan To issue charge sheets of employees & maintain it. To maintain Misc. files. To maintain several records (with service book of employees) Transfer of employees. Increment concerned with employees. Pass T.A. D.A. bill of employees Salary of employees maintained.

Fuctions of Account Section

The Misc. department reconciled the A/c of all the branches. That department issues the drafts of local, state level /aims. Furniture fixture. This department keeps up the current A/C related with commercial bank. It helps to maintain sundry A/C. Maintain the current A/C with P.S.C.B. Passing the M.C.L. of societies. Sanctioned of cash credit limits of societies. Maintenance of receipt and dispatch register.

Number of Persons Working Under above Section

In this section number of persons working is ten. 1 Senior Manager 2 Manager 2 Assistant Manager 2 Clerks

Functions of Loan Department

Sanction all types of loans; like as Consumer Composite /integrated Vehicle Loan

Computer loan only for staff member

Sanction all types of limits; like as cash credit trader

Cash credit farmers Loan against property Rural godown Mini dairy Mai Bhago scheme Renewal of cash credit limits. Physical verification done before sanctions the limits or loans.

Vehicle loan two wheeler, three wheeler, & S.R.T.O. Maintain statements for refinance &send to NABARD. Functions of State Section

Planning Renewing Compiling Achievements (for net result of the bank) Next year forecasting

Number of Persons Working Under are There are seven persons working in stat section

1 Senior Manager 1 Manager 2 Assistant Manager 1 Accountant 1 Clerk 1 Typist

Account and Finance Department Keeping of account and maintaining books of accounts, preparing profits and loss accounts, preparing budgets, pay rolls, recording receipts and payments, preparing statement of assets and liabilities etc. are office activities of specialized nature. All these are office work and performed by this special office. Miscellaneous Activities

Office Time: - The P.C.C.B. has fixed the timing for all the employees the timing of this company is 10a.m. To 5p.m. The recorded of the arrival & departure was recorded through Attendance register company maintenance the attendance registers. All the employees come at 10a.m. Entered the time in the Attendance register in the first column and at time of lunch. The entire employee entered. The departure time for lunch at 2p.m. When they come after lunch they will entered the arrival time 2.30p.m. Than duty was complete they will entered the departure time 5.00p.m. And also entered the total working hours in the full day. There is no extra system for recording the time.

Log Book : -All the vehicles of the company having logbook. Each vehicle has own separate logbook. All the records of this vehicle were kept in this logbook. The perform shows that, how much kilometer are to

be used by this log book the person who used the vehicle fill this log book and signed on also fill that for what purpose. The vehicle was used.

FACILITIES FOR STAFF The following facility is available to staff members.

House Loan facility at subsidiary rate. Scooter loan/ motorcycle/ car loan at subsidiary rate. Festival loan. Medical loan LTC Loan (Loan Traveling Concession) DA (daily allowance) TA (traveling allowance)

MISSION OF THE BANK Promotion and sustenance of economic interest and providing easy finance, cost effectives and quality banking services to customers and PACS. Objectives of the Bank: The objects for which the Bank is established are as under:-

1. To serve as a balancing center for cooperative societies (hereinafter called the society/societies) in the State of Punjab registered under the Act for the time being in force. 2. To promote the economic interest of the members of the Bank and Cooperative Societies in the State in accordance with cooperative principles and to facilitate the development and funding of any Cooperative Society registered under the said Act. 3. To establish and support or aid in the establishment of and support to association, institutions, funds, trusts and convenience designed to benefit the employees or ex-employees of the Bank or the dependents or connections of such persons to grant pensions and allowances and make payment toward insurance. 4. To provide long term loan for the maximum period of 15 years to the individuals, Coop. House Building Societies, Federation of Coop. House Building Societies and members of Group Housing Societies for purchase of house or construction thereof by enrolling member/nominal members. To carry on banking and credit business not repugnant to the provisions of the Act and the Rules framed there under for the time being in force and in particular to provide credit facilities to the members. Providing Long Term Loan for the maximum period of 15 years to individuals, Coop. House Building Societies and members of Group Housing Societies for purchase of house or construction thereof by enrolling members/nominal members.

5. To adopt such measures as are conducive to the spread of cooperative education and training. 6. To promote and develop Cooperative Societies in the State.

7. To do all such other things as are incidental or conducive to the promotion or advancement or objects of the Bank. 8. To solicit or procure insurance business as a Corporate Agent


RESEARCH METHODOLOGY Research methodology Research is composed of two syllables, a prefix re and a verb search. Re means again, anew, over again. Search means to examine closely and carefully, to test and try, to probe. The

two words form a noun to describe a careful and systematic study in some field of knowledge, undertaken to establish facts or principles. Research is an organized and systematic way of finding answers to questions. Redman and Mory defines research as a Systematized effort to gain new knowledge. It may be noted, in the planning and development, that the significance of research lies in its quality and not in quantity. Research methodology is the specification of method of accruing the information needed to structure or solve at hand. It is not concerned to decision of the fact, but also building up to data knowledge and to discover the new facts involved through the process of dynamic change in the society. Research Design Research design is a pattern or an outline of research project working. It is a statement of essentials elements of a study, those that provide the basic guidelines for the details of the project. Further a research design is an arrangement of condition for collection and analysis of data in manner that aims to combine relevance to the research purpose with economy in procedure. Research design stands for advance planning of the methods to be adopted for collecting the relevant data and the techniques to be used in their analysis, keeping in view of the objectives of the research. Under this project, Research design carried out was exploratory in nature Objective of Study

To get information about a cooperative bank & its functions etc. To know the structure and various schemes of loans provided by The Central

Cooperative Bank Head Office Patiala .

To know the purpose of granting various types of loans by the bank according to

the various categories of customers.

To know the process of granting loans by the bank.

Collection of Data Collection of data is most significant stage of every research. There are two types sources from where data is collected . These are : I) Primary Sources II) Secondary sources Data has been collected both primary as well as secondary sources as described below:

Primary Sources

The primary sources of data were circulars relating to the bank and personal observation.

Secondary Sources

The secondary sources of the data were the information about the PATIALA CENTRAL CO-OPERATIVE BANK LTD. and the banks profile which includes functions of bank and various schemes of granting loans etc. These helped in gaining knowledge about the Bank. Limitations of Study

Lack of personal interest of employees to provide information and adequate time. Some employees were hesitant in providing complete information.


Definition of Loan An arrangement in which a lender gives money or property to a borrower, and the borrower agrees to return the property or repay the money, usually along with interest, at some future point(s) in time. Usually, there is a predetermined time for repaying a loan, and generally the lender has to bear the risk that the

borrower may not repay a loan (though modern capital markets have developed many ways of managing this risk). Importance of Loans in Today's Life Everyone needs money at every stage of their life. Sometimes it so happens that they have keen desire to purchase their favorite stuff but they are incapable to purchase due to shortage of money. Here lies a question that a person who does not have a good amount of money at particular time has no right to see dreams? Is he not authorized to fulfill his desires on time? Should he stop dreaming? No, because there is solution for these queries. Loans are available for these purposes only. Loans are provided to people for such critical circumstances which may occur at any time. In anyone's life a situation may come when all of sudden you require cash. A moment when you do not want to borrow cash from your relatives. There may occur any kind of emergency when you need huge amount of money. There are various types of loans like home loans, personal loans, student loan, business loan etc. You can take any type of loan you need. For each and every kind of need, loans are available. Home loans are available for general home purposes like buying a luxurious car, going for a holiday trip, educational purpose, home improvement etc. Many of your desires can be fulfilled by this loan. Personal loans are available for personal requirements like wedding ceremony, purchasing a home etc. Student loan as it itself suggest is that it is provided basically to students for higher education. Students who want to study more but can not afford can get apply for such loans and continue their studies.

To start a new business you require a huge amount of money. A person willing to setup a business may not have that much cash which can meet out his requirements. For this business loans are available. You can get business loans to start and well establish a new business in market. Whatever may be the kind of loan, all have full fledged facilities. All kind of loans have their own importance. Above all, need of money explains the importance of loan. Appling for loan is very easy. Apply for that loan whichever is needed to you. But before applying you should go through different lender's policies and apply for that lender which is beneficial for you. Different lenders have different policies. If you get loan for long term with low rate of interest then it is beneficial for you. Due to competition, lenders are trying their best to attract people by providing different schemes which in turn is good for people. And cooperative bank is also one of them. What is a Procedure? A procedure is a specified series of actions or operations which have to be executed in the same manner in order to always obtain the same result under the same circumstances (for example, emergency procedures). Less precisely speaking, this word can indicate a sequence of tasks, steps, decisions, calculations and processes, that when undertaken in the sequence laid down produces the described result, product or outcome. A procedure usually induces a change. Importance of Procedure Manuals

One of the worst case scenarios of office problems involves a very important job that cannot be completed by the support staff because of a lack of information on procedures. Nearly every company prepares job descriptions, but most neglect efficient, exact

and up-to-date procedures manuals. A job description entails. A procedures manual gives a detailed and informative guide to how the job is done and enables someone to do the job in an emergency. Henrik Ibsen once said, "A community is like a ship; everyone ought to be prepared to take the helm." Likewise, an office - people should be able to pitch in and get the job done. This is possible only if they are provided with the proper instructions and materials. Every job entails a certain sequence of paperwork, routine tasks and contacts. For example, someone might be in charge of travel arrangements. A job description would state that the job entails making both domestic and foreign travel arrangements and processing invoices for this. A procedures manual would give the names and phone numbers of various travel agencies used for the firm, the best people to contact, how to process the invoices by explaining the forms and what department handles them. If the person in charge of travel arrangements is out of the office, someone else can open the procedures manual and follow the directions to do the job. Managers should see that every support staff employee in his or her department prepares a procedures manual for each job. At the beginning, the manager should meet with each employee individually and discuss the preparation of the manual so that its function is fully understood. An outline of what is expected should be prepared and given to each employee to follow. The outline should cover: 1. What - A description of the task. 2. When - How often it is done. 3. Who - What people are involved in completing the task. 4. How To - Sequence of steps to complete the job. Phone numbers, addresses, chain of command, forms or materials needed (and where they are kept), potential problems and solutions based on experience. If office machines are involved (computers or word processors), a description of how they are operated

for this particular job (i.e. if disks are used, where information is stored, how to retrieve the information, electronic mail, etc.). If a computer sequence is followed to complete forms or reports for the task, copies of each screen used should be made and placed in the procedures manual in the proper order. A "dummy" of each page should be filled out so that it can be easily followed.

Important details One of the most important aspects of a procedures manual is that it is detailed and gives all the necessary information to get the job done in the quickest way possible. If persons, agencies or companies outside your company have to be contacted to complete a job, the procedures manual should give specific names, departments, addresses and phone numbers as well as a brief description of what each does, how long it will take, what you need from them and what they need from you.

Another important part of the manual is making sure that it is up to date. Outdated information will only confuse someone and will not get the job done. All employees should be instructed to check the procedures manual they have prepared at least once a month to see if phone numbers, names or directions need updating. Both the employee and manager should have copies that are accessible to others.

One of the problems in every office involves employees who are reluctant to, or refuse to, share information because they feel it will diminish their importance. Keeping the job "complicated" and being the only one able to do it gives this type of person a sense of job security and self-esteem. They do not want someone else to do their job at all, no less do it well. Unfortunately, this type of thinking does much more harm than good. A good manager must be able to communicate to these employees that a procedures manual is vital and must closely monitor the employee to see that a manual is prepared and is viable. Employee resistance to the idea of doing a procedures manual is to be expected. Some people will be afraid

that their writing skills are inadequate and they will be unable to do their part properly. These employees should be helped as much as possible and

Loan Procedure The loan to get passed, it has passed through many hands as shown in the following figure.

Procedure for getting a loan


Customer Under the above procedure customer means the per who wants to take a loan. Custer may be a farmer , student, employee of govt. or semi govt. or any institution approved by the board of directors of the bank, individuals , companies, trust, firm, cooperative Societies etc.


Reception Here a person (customer) inquires about the loan rates and other prerequisites that are to be submitted. He is provided this information by the clerk at the reception. For example a person want to take a vehicle loan . At this step he is get the information about the amount sanction criteria, interest rate, period of time, mode of loan disbursement, mode of repayment, perquisite documents etc.


Submission of documents:

After getting the information customer submit the required document to bank facility. For example: to take a House Loan he submitted various types of documents like: 1. Demand Pronote note (D.P.. note) 2. Two latest attested passport size photographs of borrower 3. Proof of Residence 4. Source of Finance for own contribution 5. Copy of approved drawing of the proposed dwelling unit to be constructed/purchased from Sarpanch/Numberdar. 6. Agreement of sale deed. 7. Details of cost/estimate from approved Architecture/valuer/Engineer of the house to be purchased/constructed/ renovated/addition to made. 8. Non encumbrance certificate. 9. Latest jamabandi and girdawri. 10. Certificate of ownership of land/property situated within Red Line of the village from the Sarpanch/Numberdar/Patwari 11. The borrower shall be also required to submit collateral security @100%of loan amount etc. 12. To take a loan borrower firstly required to take nominal member ship of bank.

Only after fulfillment and submission of all documents which are required according to take various types of loans, the process is started actually. VI. Credit rating: Based on the documents submitted by the customer, the credit rating of the customer is done i.e. how much the loan amount should be granted to the customer is calculated. This is done as follows. 1. First the total value of the customers assets is calculated. For example if loan is on a stock plus if he has provided the papers of his business land, then in this case his credit will be calculated as a sum of the value of both these assets. i.e. total value = value of stock + value of land 2. Now, according to the rules of bank some percentage of the value of these assets can only be given as loan. This percentage varies for different types of loans and based on it the sanctioned loan amount is calculated. V. Inspection: After having calculated the credit and the amount that can be sanctioned for loan, the file is forwarded for inspection. Here, the officer verifies the work done by the clerk at the credit rating desk. Moreover, he checks the banks database to see if the loan taker has any previous obligations

which are remaining to be met (if he is an old customer). After the satisfaction with all the parameters, he hands over the file to the loan manager. VI. Loan Manager: At this step , the file of customer reexamined by the loan manager. If the loan is consumer loan then it is directly granted by branch manager . But if the loan is personal loan or vehicle loan or any other type of loan then it is granted by senior manager or district manager. The powers of granting different types loans of different mangers are as under:

Branch Manager: Branch Manager has power only to grant the consumer loan. The maximum amount is granted up to 100000 Rs./-. Senior Manager: Senior Manger has power to grant a loan up to amount 200000 Rs./- only. District Manager : District Manager can grant a loan from 200000 Rs./to 500000 Rs./- only Board of Directors: If the loan amount is greater than 500000 Rs./- then it is granted by the board of directors of the Patiala Central Cooperative Bank.

So according to different types and different amounts of loans, these are granted by above parties. At this stage loan granting manager recheck all the documents. Loan manager pass the loan if customer fulfill all requirements. But if there is any thing which is unclear or insufficiency in the documents, he has power to reject the loan application. But he is also liable to give specific reason to the customer about the rejection of loan.

VII. Meeting: If the amount of loan is grater than 5 laces then a meeting is conducted between board of Directors of the bank After having examined the file, the file is then put forward before the Chairman and Managing Director (MD) in a meeting. This file is then cross examined. If all the members of top management are mutually consent then the application of loan is ready for disbursement of loan amount. VIII. Insurance: Before issuing the loan amount or opening of a/c for loan, the customer is required to get insurance on the thing on which he wishes to take loan. This is done by bank with the help of United India (UI) Insurance Company. Moreover, if any other thing is mortgage for taking loan, then the insurance is taken on that particular thing also. This is explained in detail in the coming sections. IX. Giving away of Loan: After paying the insurance amount, the loan amount or account is handed over to the customer. Before the disbursement of loan amount to customer firstly bank require becoming a nominal member of bank, then loan amount is paid to the customer. In some type of loan schemes the amount of loan is paid into installments. Like in case of Rural Housing Loan amount is paid into two installments:a. 1st installment at the time of starting


construction up to plinth level.

b. 2nd installment after completion up to


roof level. In case Urban Housing Loan amount of loan is disbursed into three installments: a. For purchase of plot 50% b. Up to roof level c. After roof level 25% 25%

So above are the various stages into loan procedure adopted The Patiala Central Cooperative Bank. Any customer can easily get a loan to fulfill his/her various requirements and get it fastly as per as possible.

Loan Schemes

* Scheme for Financing Rural Housing * Preamble:- With a view to provide housing facilities to the masses which is a basic need of human beings, the GOI and State Govt. are attaching utmost importance to the financing of housing sector. Several housing schemes for this are in operation. With a view to supplement these schemes, it has been decided by the Coop. Bank to start housing finance for acquisition, construction, repair/alteration etc. This scheme has particularly been designed for rural people, where other financing institutions are reluctant to advance. The scheme shall be called the Scheme for Financing Rural Housing and is applicable to individual/members of house building cooperative societies in the state of Punjab and Chandigarh (U.T.) Eligible Borrower: - 1) Individuals 2) Cooperative Housing Societies Purpose of Loan: - Loan shall be advanced under the scheme for purchase of built up house, construction of a new house or repair/ renovation/addition/alteration of existing house in rural areas. Ceiling on the cost: - The loan for a dwelling unit may not exceed Rs.15.00 lacs. In case land is being acquired the cost of land may be reckoned as margin money, otherwise cost of land should not be included in the project cost Quantum of Bank loan for Individual : - The quantum of loan shall depend upon repaying capacity of the borrowers, subject to 85% of cost of construction or value of property to be purchased. For construction/purchase of new House a. Maximum loan Rs.15.00 lacs b. Margin Money 15%

Repayment period Up to 15 years in monthly/half yearly installments. Due date shall be 30th June and 31st December every year. For Renovation/Repair/Addition/Alteration: a. Maximum loan Rs.5 lacs (for repair/ addition /alteration of House) b. Margin money 15% c. Repayment period 10 years in monthly/half yearly installments. Loan eligibility shall be calculated on the basis of repayment capacity of the borrower. The repaying capacity shall be determined on the basis of land holding and other known sources of income and commitments/subsistence towards his family. A reasonable installment to income ratio i.e. normally upto 35% of the gross income can be taken as repayment capacity of the borrower. Income of the co-applicant can also be considered for loan eligibility. Period of Loans: - The maximum period of loan shall be upto 15 years and loan shall be repayable in equated monthly/half yearly installments. The first installment shall become due after expiry of 9 months from the date of drawl of first installment in case of construction and whereas in case of purchase of built up house, it shall start after expiry of 3 months from the date of purchase. Rate of Interest: - At present rate of Rural Housing is 11% and further it shall be determined by financing bank from time to time and debited to loan account. Interest Is charged as contract made with the loanee. Penal interest @ 2% over and above the normal rate shall be charged in case of default, on the default amount for the default period. 0.5% concession is allowed to women. Security: - The security of the loan shall be first mortgage charge on the house property to be financed by the bank by way of registered regular mortgage. In addition to it collateral security shall be taken @ 100% of the loan amount in the form of agriculture land. Value of agriculture land as per norms fixed by the

District Collector from time to time should be taken into consideration. In case of employees of the Govt., semi govt., Boards, Corporation, etc., constructing house within rural areas, loan can be advanced on primary security i.e. mortgage of house to be financed, along with two good sureties and undertaking under section 39 of Punjab Cooperative Societies Act., 1961. Sanction and disbursement of Loan: - The loan shall be sanctioned after it is ascertained that the applicant fulfils all the requirements and enjoys reputation as a good pay master. For construction loan, the borrower should be in possession of plot with unquestionable and indisputable title. In case of built up house, the payment shall be made @ 75% of total value of the house/Loan sanctioned. Payment shall, however, be made to third party in lump sum after getting margin money from the borrower and remaining 25% shall be released after obtaining Mortgage Deed in favour of the Bank. For construction of house, loan shall be disbursed in 2 installments, which is as under:-

c. 1st installment at the time of starting


construction up to plinth level.

d. 2nd installment after completion up to


roof level.

2nd installment shall be disbursed after ensuring proper utilization of previous installment. Processing Fee & Other Charges: - Processing Fees and other charges @ 0.25% of loan amount shall be charged Documentation & general requirements: - Following documents are required for financing under Rural Housing Scheme 1. Application form 2. Loan agreement 3. D. P. Note 4. Two latest attested passport size photographs of the borrowers. 5. Proof of residence. 6. Source of Finance for own contribution. 7. Copy of approved drawing of the proposed dwelling unit to be constructed/purchased from Sarpanch / Numberdar. 8. Agreement of sale deed. 9. Details of cost/estimate from approved Architecture/ Valuer/ Engineer of the house to be purchased/ constructed /renovated /addition to be made. 10. Non-encumbrance certificate. 11. Latest Jamabandi and Girdawari. 12. Certificate of ownership of land/property situated within Red Line (i.e. Phirni) of the village from the Sarpanch/Numberdar/Partwari. 13. The borrower shall mortgage his existing property : to be constructed/purchased in favour of the bank for the full value of loan. 14. The borrower shall be required to submit collateral security @ 100% of the loan amount. Additional Documents from Employees: i. ii. Salary Certificate. Undertaking U/S 39.

iii. iv.

Post dated Cheques. Completion certificate.

* Scheme for Urban Housing Loan * Short title Extent and Commencement a. This scheme may be called Urban Housing Loan Scheme to individual and members of house Building Societies by The Punjab State Cooperative Bank/Central Coop .Bank (s) in the State of Punjab. b. The scheme shall be implemented through the branches of the PSCB/Central Cooperative banks concerned and shall be limited to urban areas falling in the area of operation of the lending Bank. It shall come into force from the date as the Registrar Coop. Societies, Punjab Chandigarh decides. Purpose: - Loan shall be advanced for the purchase of plot, purchase of built up house, construction of house or repair, renovation, additions, alteration, etc. in the existing house. Loans shall also be given for acquiring a plot, flat, house in an existing or proposed Cooperative House Building Society and approved scheme of PUDA, House fed, Improvement Trust or any other Govt. Agency. Loan can also be advanced for take over of an existing loan advanced by any other bank/financial institution subject to the condition that the loan account should have remained in the standard category of assets for at least last 2 years in the previous financial institution Eligibility: - An individual residing in the area of operation of the Bank may apply for the loan in his individual name or along with another person being joint owner of the land/property as co-applicant. The applicant and co-applicant,

if any will be enrolled as nominal members of the bank under the Act, Rules and Bye Laws. Note: The Borrower should not have defaulted in any other loan. The applicant shall be eligible for a total house building loan not exceeding 75% of the total cost of house (cost of construction + cost of plot, if plot is to be purchased) and the loan out of it for purchase of plot will not exceed 50% of the total loan sanctioned. The remaining, exceeding or up to 50% shall be utilized for construction of house thereon. The employees of the Punjab State Cooperative Bank or Central Cooperative Banks who have already availed house loan under Govt. or Bank Scheme from the Punjab State Coop. Bank or Central Cooperative Banks can also get loan under the scheme subject to maximum of Rs.25 lacks under both house loan scheme. It will be further subject to the repaying capacity of the employee in accordance with their last salary statement. Further this loan to employee will be against second charge on the said property.

Quantum of Loan: - The quantum of loan will depend upon the repayment capacity of applicant to be calculated by the bank as under : 21 yrs. To 45 yrs of age.

48 times of the net monthly income (NMI) or 4 times of Net Annual Income (NAI) Above 45 years 36 times of Net Monthly Income (NMI) or 3 Times of Net Annual Income of the spouse or family member can be considered if spouse or family member is coapplicant or guarantor. Maximum loan amount for construction of house or purchase of house/flat, purchase of plot + construction thereon under this scheme is Rs.25 lacks or 75% of total cost of construction, purchase of house (cost of construction + cost of plot, if plot is to be purchased), whichever is less. The loan for purchase of plot will not exceed 50% of the total loan sanctioned. For repair/renovation maximum amount of loan shall be Rs.5 lacks. For addition/alterations in existing house, maximum loan amount shall be Rs.10 lacks. Interest: - At present rate of Urban Housing is 11% and further it shall be determined by financing bank from time to time and debited to loan account. Interest Is charged as contract made with the loanee. Penal interest @ 2% over and above the normal rate shall be charged in case of default, on the default amount for the default period. 0.5% concession is allowed to women. Period of Loan/ Repayment of Loan: - Maximum period (including moratorium period) shall be 15 years or attaining the age of 65 years whichever is earlier. In case of repair/renovation /addition/alteration loan cases maximum period shall be 10 years. Repayment of the loan shall, however, be in monthly equated installment to be started from 9 months after the first installment of loan disbursed. In case of the

farmers availing loan under this scheme, repayment of loan may be in half yearly installments i.e. 30th June and 31st December every year. Security: - Security for the loan is a first mortgage of the property to be financed normally by way of deposit of original title deeds. Disbursal of Loan: - The loan shall be disbursed after the property is technically appraised, all legal documentation completed and borrower having invested own contribution in full (own contribution is the total cost of proposed property Bank loan). In case of purchase of plot + construction, the disbursement shall be in 3 installments as follows:For purchase of plot 50% Up to roof level After roof level 25% 25%

Loan will be disbursed at one go for purchase of a built up house. However, for construction on pre-owned plot, the disbursement shall be in two installments. 1st Installment for construction after plinth level 50% 2nd Installment for construction of the building after roof level 50% Loan for repair, additions, alterations and renovation shall be disbursed in two equal installments. The second and subsequent installment of loan shall be disbursed only after ensuring the utilization of previous installment to Banks satisfaction. Bank shall not be bound to accept progress construction as assessed by builder. * Second Hand Vehicle Loan Scheme *

In the modern era there is a heavy demand for purchase of second hand vehicles and the banks have surplus loan-able funds to diversify the loan portfolio and to provide financial assistance to the borrowers for purchase of second hand vehicle, this scheme has been diversified. Short title, extent and commencement:a. This scheme may be called Second Hand Vehicle Loan Scheme to individual sole proprietor professional and partnership concern residing in the area of operation of the lending bank by the State and Central Banks as the case may be. b. The scheme shall be implemented through the branches of the State and Central Coop. Banks in UT and in the State of Punjab. c. It shall come into force from the date of approval by the Registrar Coop. Societies Punjab Chandigarh.
d. The vehicle to be purchased by the loanee should not be more than 3

years old, should be accident free, one time road tax paid, bearing Registration Number of U.T. Chandigarh or the State of Punjab. Purpose: - Loan shall be advanced for the purchase of second hand vehicle such as car, jeep, sumo, qualis, etc. for personal/public use. Eligibility: - An individual, sole proprietor, professional and partnership concern residing in the area of operation having permanent account number provided by the Income Tax authority in urban areas and in case of rural area having at least 5 acres of agriculture land and should not be defaulter. The applicant will be enrolled as nominal member of the bank under the Act, Rules and Bye-laws. Documentation : 1. Identity proof 2. Residential proof

3. Two self attested recent passport size photographs of the applicant and sureties each. 4. Photocopy of the PAN 5. Copy of Income Tax Return for last three years duly acknowledged by ITO 6. Photocopy of the Driving License 7. A photocopy of the RC of the Vehicle and case of rural people copy of Fard, Jamabandi. 8. Loan application form 9. Loan agreement 10. DP Note 11. Hypothecation deed/Collateral Security/Agreement Bond from Sureties. 12. Agreement of Sale. 13. Certificate of present value of car assessed by Surveyor of company guide or as determined on the basis of guidelines of the Punjab Govt. on the Subject.

Insurance: - Comprehensive insurance in the joint names of the borrower and the bank shall be made at the cost of the borrower. In case of default bank will be at liberty to get a policy renewed by debiting to loan account of the borrower. Dispute: - If at any stage any dispute raised, it shall be settled/referred for arbitration under the provisions of Punjab Coop. Societies Act. 1961 and rules frames there under and bye-laws of the bank * Scheme of granting Loan against Property * Short title, extent and commencement: - This scheme may be called Scheme of LOAN AGAINST PROPERTY(LAP). The scheme shall be implemented through the branches of the Punjab State Cooperative Bank Limited & Central

Cooperative Banks only through an urban branch in the State of Punjab and shall be available to Individuals. Beneficiaries should be enrolled as Nominal Member of the bank. It shall come into force from the date as the Registrar, Coop. Societies, Punjab, Chandigarh decides. Purpose: - The scheme is for providing finance against mortgage of immovable property situated at Chandigarh, U.T. Periphery by Punjab State Cooperative bank and at urban areas (within Municipal Limit) by Central Cooperative bank through its urban branches, and is designed to offer instant solutions relating to socio-economic needs such as childrens higher education, travel, daughters marriage, medical emergencies, etc. The loan will, however be not avail for speculative purpose.

Eligibility: a. An individual residing in and having a self occupied immovable property in the area mentioned in the Purpose Clause no.3 may apply for the loan in his individual name or along with another person being joint owner of the land/property as co-applicant. The applicant and co-applicant, if any, will be enrolled as nominal members of the bank under the Act, Rules and Bye-laws. The age of borrower should not exceed 65 years at the time of applying for the loan. b. Employees of the PSCB/DCCB can avail this loan against property already mortgaged with the bank by creating second charge of property subject to the repaying capacity of the employee as per the scheme of loan.

Type and Quantum of Loan: - The loan can be given in the shape of Term Loan or Credit Limit. Loan can also be given for both purposes i.e. partly for term loan and partly for credit limit subject to quantum of loan for both the loan and limit will not exceed from Rs.25.00 lacs. Quantum of loan will be three times of net annual income or 50% of value of property, whichever is less. However maximum loan amount will be Rs.25 lacs. Income of family member can be considered for the purpose of eligibility of loan. Interest: - Interest shall be charged @ 15% p.a. compounded quarterly or as may be revised by the bank from time to time. In case of defaults a penal interest @18% p.a. over. Security: I. Security for the loan is a first mortgage of the property, against which loan/limit is granted, by way of deposit of title deeds. The valuation of the property will be based on the basis of last reserve price of the auction fixed by the Chandigarh Administration. For the properties situated out side the Chandigarh, it will be the official rates of registration fixed for the same by respective Municipal or Registration Authority or current market value whichever is lower. II. Suitable one guarantee acceptable to the bank. The guarantor should have its net worth equal to or more than the loan amount to advanced. In case the income of family member is taken while calculating loan eligibility, he/she must be taken as guarantor. III. Post dated cheques for the months for which repayment of term loan option is due.

In basic idea behind selecting the topic of Employee Hiring is to study how employees are hired. Today organizations are coming up with the new techniques of hiring people. Hence to study how the actual process is carried in the organization. Research methodology This project aims the finding out and analyzing the hiring process in the organization. The method of approach adopted for the same, would be as follows: 1. To wok out the various steps and procedures involved. 2. To contacts various companies and collect information

3. To collect the information secondary like magazines, newspapers, internets Importance and scope 1. This projects will provide a value insight to student on the topic. 2. This project will help to get the practical knowledge in employee hiring in the organization. 3. The project will equip me for my future in H. R. M. Limitation 1. Organization did not disclose full information. 2. Data collected in this field are not sufficient.

People form an integral part of the organization. The efficiency and quality of its people determines the fate of the organization. Hence choice of right people and placing them at right place becomes essential. Hiring comes at this point of time in the picture. Hiring is a strategic function for HR department. Recruitment and selection form the process of hiring the employees. Recruitment is the systematic process of generating a pool of qualified applicant for organization job. The process includes the step like HR planning attracting applicant and screening them. This step is affected by various factors, which can be internal as well as external. The organization makes use of various methods and sources for this purpose. Selection is carried from the screen applicant during the recruitment process. There is also some specific process is involved. By the way of conducting preliminary interview and conducting the various test , if required reference check and further final interview is conducted. During the process there are certain difficulties and barriers that are to be overcomes.

Different organization adopts different approaches and techniques for their employees. To know the practical application of the employees hiring process, the analysis of IMS Learning Resources Pvt. Ltd. was undertaken.


People are integral part of any organization today. No organization can run without its human resources. In todays highly complex and competitive situation, choice of right person at the right place has far reaching implications for an organizations functioning. Employee well selected and well placed would not only contribute to the efficient running of the organization but offer significant potential for future replacement. This hiring is an important function. The process of hiring begins with human resource planning (HRP) which helps to determine the number and type of people on organization needs. Job analysis and job design enables to specify the task and duties of hobs and qualification expected from prospective job HRP, job analysis, hob design helps to identify the kind of people required in an organization and hence hiring. It should be noted that hiring is an ongoing process and not confined to formative stages of an organization. Employees leave the organization

in search of greener pastures, some retire and some die in the saddle. More importantly an enterprises grows, diversifies, take over the other units all necessitating hiring of new men and women. In fact the hiring function stops only when the organization ceases to exist. Hiring involves two board activities:i) ii) Recruitment Selection

The word recruitment has many meaning and plays an important role. Employees leave the organization in search of greener pastures- some retire some die in saddle. The most important thing is that enterprise grows, diversifies, and takes over other units-all necessitating hiring of new men and women. In fact recruitment functions stop only when the organization ceases to exist. To understand recruitment in simple terms it is understood as process of searching for obtaining applications of job from among from whom the right people can be selected. To define recruitment we can define it formally as it is a process of finding and attracting capable applicants for employment. The process begins when new recruit are sought and ends when their application are submitted. The result is a pool of applicants from which new employees are selected. Theoretically, recruitment process is said to end with receipt of application in practice the activity extends to the screening applicants as to eliminate those who are not qualified for job.


The general purpose of recruitment is to provide a pool of potentially qualified job candidates.

Specifically, the purposes are to: 1. Determine the present and future requirement of the organization in conjunction with its personnel planning and job analysis activities; 2. Increase the job pool of job candidates at minimum cost; 3. Help increase the success rate of the selection process by reducing the number visibly under qualified or job application; 4. Help reduce the probability that job applicants, once recruited selected, will leave the organization only after a short period of time; 5. Meet the organizations legal and social obligation regarding the composition of its workforce; 6. Being identifying and preparing potential job applicants who will be appropriate candidates; 7. Increase organization individual effectiveness in the short term and long term; 8. Evaluate the effectiveness of various recruiting technique and sources for all types of job applicants.


There are a number of factors that affect recruitment. These are broadly classified into two categories: 1. Internal factors 2. External factors

The internal factors also called as endogenous factors are the factors within the organization that affect recruiting personnel in the organization. Some of these are:Size of the organization The size of the organization affects the recruitment process. Larger organization finds recruitment less problematic than organization with smaller in size. Recruiting policy The recruitment policy of the organization i.e. recruiting from internal sources and external sources also affect the recruitment process. Generally, recruitment through internal sources is preferred, because own employees know the organization and they can well fit in to the organization culture.

Image of the organization Image of the organization is another factor having its influence on the recruitment process of the organization. Good image of the organization earned by the number of overt and covert action by management helps attract potential and complete candidates. Managerial actions like good public relations, rendering public service like building roads, public parks, hospitals and schools help earn image or goodwill for organization. That is why chip companies attract the larger numbers of application. Image of the job

Better remuneration and working conditions are considered the characteristics of good image of a job. Besides, promotion and carrier development policies of organization also attract potential candidates.

Like internal factors, there are some factors external to organization, which have their influence on recruitment process. Some of these are given below:Demographic factors As demographics factors are intimately related to human beings, i.e. employees, these have profound influence on recruitment process. Demographic factors include age, sex, Literacy, economics status etc . Labor market Labor market condition I.e. supply and demand of labor is of particular importance in affecting recruitment process. E.g. if the demand for specific skill is high relative to its supply is more than for particular skill, recruitment will be relatively easier. Unemployment situation The rate of unemployment is yet another external factor its influence on the recruitment process. When the employment rate in an area is high, the recruitment process tends to simpler. The reason is not difficult to seek. The number of application is expectedly very high which makes easier to attract the best-qualified applications. The reserve is also true. With low rate of unemployment, recruiting process tend to become difficult . Labor laws

There are several labor laws and regulations passed by the central and state governments that govern different type of employment. These cover working condition, compensation, retirement benefits, safety and health of employee in industrial undertakings. The child Labour Act,1986; for example prohibits employment of children in certain employments. Similarly several other acts such as the Employment Exchange Act,1958; The Apprentice Act, 1961; the Factory Act,1948; and The Mines Act, 1952 deal with recruitment.

Legal consideration Another external factor is legal consideration with regard to employment reservation of jobs for schedule tribes, and other backward class (OBC) is the popular examples of such legal consideration. The supreme court of India has given its verdict in favor of 50 per cent of jobs and seats. This is so in case admission in the educational institutions also.


Present employees: Promotions and transfer from among the present employees can be good sources of recruitment. Promotion implies upgrading of an employee to a higher position carrying higher status, pay and responsibilities. Promotion from among the present employees is advantageous because the employees promoted are well acquainted with the organization culture, they get motivated and it is cheaper also. Promotion from among the person employees also reduces the requirement of job training. However, the disadvantage lies in limiting the choice of the few people and denying hiring of outsiders who may be better qualified and skilled. Furthermore, promotion

from among present employees also results in inbreeding, which creates frustration among those not promoted. Transfer refers to shifting an employee from one job to another without any change in the position/post, status and responsibilities. The need for transfer is felt to provide employees a broader and carried base, which is considered necessary for promotion. Job rotation involves transfer of employees from one job to another job on the lateral basis. Former employees: Former employees are another source of applicant for vacancies to be filled up in the organization. Retired or retrenched employees may be interested to e come back the company to work on the part time basis. Similarly, some former employees who had left the organization for any reason, any come back to work. This source has the advantages of hiring people whose performance is already known to the organization. Employee referrals: This is yet another internal source of recruitment. The existing employees refer to the family members, friends and relatives to the company potential candidates for the vacancies to be filled up in the organization. This source serves as the most effective methods of recruiting people in the organizations because refer to those potential candidates who meet the company requirement known to them from their own experience. The referred individuals are expected to be similar in type in the of race and sex, for example, to those who are already working in the organization

Previous applicant: This is considered as internal source in the sense that applications from the potential candidates are already lying with organization. Sometimes the organization contacts though mail or messengers these applicants to fill up the vacancies particularly for unskilled or semiskilled jobs.


Let us, evaluate the internal source of recruitment. Obviously, it can be done in terms of its advantage and disadvantage the same are spelled out as follows: ADVANTAGES: The advantages of the internal source of recruitment include the following: Familiarity with own employees: The organization has more knowledge and familiarity with the strengths and weaknesses of its own employees than of strange on unknown outsiders. Better use of the talent: The policy of internal recruitment also provides an opportunity to the organization to make a better use of talents internally available and to develop them further and further. Economical recruitment: In case of internal recruitment, the organization does not need to spend much money, time and effort to locate and attract the potential candidates. Thus, internal recruitment proves to be economical, or say, inexpensive. Improves morale: This method makes employees sure that they would be preferred over the outsiders as and when they filled up in the organization vacancies. A motivator: The promotion through internal recruitment serves as a source of motivation for the employees to improve their carrier and income. The employees feel that organization feel that organization is a place where they can build up their life-long career. Besides, internal recruitment also serves as a means of attracting and retaining employees in the organization.

DISADVANTAGES: The main drawback associated with the internal recruitment is as follows: Limited choice: Internal recruitment limits its choice to the talents available within the organization. Thus, it denies the tapping of talents available in the vast labor market outside the organization. Moreover, internal recruitment serves as a means for inbreeding, which is never healthy for the future organizations.

Discourage competition: In this system, the internal candidates are protected from competition by not giving opportunity to otherwise competent candidates from outside the organization. This in turn, develops a tendency among the employees to take the promotion without showing Stagnation of skills: With the feeling that internal candidates will surely get promoted, their skill in the long run may become stagnant or obsolete. If so, productivity and sufficiency of the organization, in turn, decreases. extra performance.

Creates conflicts: Conflicts and controversies surface among the internal candidates, whether or not they deserve promotion.


External sources of recruitment lie outside the organization. These outnumber internal sources. The main ones are listed as follows:

Employment exchanges: The national commission labor (1969) observed in its report that in the pre-independence era, the main source of labor war rural areas surrounding the industries. Immediately after independence, national employment services were established to bring employer and job seeker together. In response to it, the compulsory notification of vacancies act of 1959 (Commonly called employment exchange act) was instituted which become operative in 1960.the main functions of these employment exchanges with the branches in most cities are registration of job seeker and tier placement in the notified vacancies. It is obligatory for employer to inform about the outcome of selection within 15 days to the employment exchange. Employment exchange is particularly useful in recruiting blue-collar, white- collar and technical workers.

Employment agencies: In addition to the government agencies, there are number of private agencies that register

candidates for employment and furnish a list of suitable candidates from the data bank as and when sought by the prospective employer. Generally, these agencies select personnel for supervisory and the higher levels. The main function of these agencies is to invite application and short-list the suitable candidates for the organization. Of course, the representative of the organization takes the final decision on selection. The employer organizations derive several advantages through this source. The time saved

in this method can be better utilized elsewhere by the organization. As the organizational identity remains unknown to the job speakers, it, thus, avoid receiving letters and attempts to influence.

Advertisement: This method of recruitment can be used for jobs like clerical, technical, and managerial. The higher the position in the organization, the more specialized the skills or the shorter the supply of that resources in the labour market, the more widely dispersed the advertisement are likely to be. For instance, the search for a top executive might include advertisements in a national daily like the Hindu. Some employers/companies advertise their post by giving them post box number of the name of some recruiting agency. This is done to particular keep own identity secret to avoid unnecessary correspondence with the applicants. However the disadvantage of these blind advertisement, i.e., post box number is that the potential job seekers are the hesitant without unknowing the image of the organization, on the one hand, and the bad image/ reputation that the blind advertisement have received because of the organizations that placed such advertisements without position lying vacant just to know supply of labor/ workers in the labor market, on the other. While preparing advertisement, a lot of care has to be taken to make it clear and to the point. It must ensure that some self-selection among applicant take place and only qualified applicant responds the advertisement copy should be prepared by using a four-point guide called AIDA . The letters in the acronym denote that advertisement should attract Attention, gain Interest, arouse a Desire and result in action. However, not many organizations mention complete detail about job positions in there advertisement. What happened is that ambiguously worded and broad-based advertisements may generate a lot irrelevant application, which would, by necessity, increasing the cost of processing them.

Campus Recruitment

This is another source of recruitment. Though



is a common phenomenon

particularly in the American organizations, it has made rather recently. Of late, some organizations such as HLL, HCL, L&T, Citibank, Cadbury ANZ Grind lays, etc., in India have started visiting educational and training institute/ campuses for recruitment purposes. Many Institutes have regular placement cells / offices to serve liaison between the employer and the students. Tezpur Central University has one Deputy Director (Training and Placement) for purpose of campus recruitment and placement.

The method of campus recruitment offers certain advantages to the employer organizations. First, the most of the candidates are available at one place; second, the interviews are arranged at short notice; third, the teaching is also met; fourth, it gives them opportunity to sell the organization to a large students body who would be graduating subsequently. The disadvantages of this of recruitment are that organizations have to limit their selection to only entry positions and they interview the candidates who have similar education and experience, if at all.


Another source of recruitment is deputation I.e., sending an employees to another organization for the short duration of two to three years. This method of recruitment is practice in a pretty manner, in the Government department and public sector organization does not have to incurred the initial cast of induction and training. However, the disadvantages of this of deputation is that deputation period of two/three year is not enough for the deputed employee to provide employee to prove his/her

mettle, on the one hand, and develop commitment with organization to become part of it, on the other.


Some organizations in India also practice the word-of-mouth method of recruitment. In this method , the word is passed around the vacancies or opening in the organization. Another from of word-ofmouth method of employee-pinching i.e., the employee working In another organization is offered by the rival organization. This method is economic, in terms of both time and money. Some of the organization maintain a file applications and sent a bio-data by a job seeker. These serve as a very handy as when there is vacancy in the organization. The advantage of this method is no cost involved in recruitment. However, the disadvantages of this method of recruitment are non- availability of the candidates when needed choice of candidates is restricted to a too small number.

Raiding or Poaching:

This is another sources of recruitment whereby the rival firm by offering terms and conditions, try to attract qualified employees to join the. This raiding is a common feature in the Indian organizations. For instance, service executive of HMT left to join Titan Watch Company, so also exodus of pilot from Indian Airlines to join the private air taxi operator. In fact, raiding has become challenge for the human resource manager.

Besides these, walk - ins, contractors, radio and television, acquisitions and merger, etc., art some other sources of recruitment used by organization.

EVALUATION OF EXTERNAL SOURCES: Like the internal source of recruitment, external sources are mixed of advantages and disadvantages ADVANTAGES:Open process Being a more open process, it is likely to attract a large number of applicants/application. The, in turn, widens it option of selection.

Availability of Talented Candidates:With the large pool of applicants, it becomes possible for organization to have talented candidates from the outside. Thus, it introduces new blood in the organization. Opportunity to Select the Best Candidate; With the large pool of applicants, selection process becomes competitive. This increases prospects for selection the best candidates.

Provides healthy competition:

As the external members are supposed to be more trained and efficient. With such a background, they work with the positive attitude and greater vigor. This helps create healthy competition and conductive work environment in the organization.

DISADVANTAES: However, the external sources of recruitment suffer from certain disadvantages too, these are: Expensive and time consuming: This method of recruitment is both expensive and time consuming. There is no guarantee that organization will get good and suitable candidates.

Unfamiliarity with the Organization: As candidates some outside the organization, they are not familiar with tasks, job nature and the international scenario of the organization.

Discourage the Existing Employee: Existing employees are not sure to get promotion. This discourages them to do the hard work. This, in turn, boils down to decreasing productivity of the organization.


The traditional philosophy of recruiting has been to get as many people to apply for a job as possible. A large number of jobseekers waiting in queues would make the final selection difficult, often resulting in wrong selection. Job dissatisfaction and employee turnover are the consequence of this. A persuasive agreement can be made that matching the needs of the organization to the needs of the applicants will enhance the effectiveness of the recruitment process. The result will be a workforce which is likely to stay with the organization longer and performs at a higher level of effectiveness. Two approaches are available to bring about match. They are:

Realistic Job Preview (RJP) Job Compatibility Questionnaire (JCQ)

Realistic Job Previews: Realistic job preview provides complete job related information , both positive and negative, to the applicants. The information provided will help job seekers to evaluate the compatibility among the jobs and their personal ends before hiring decisions are made. RJPs can result in self selection process- job applicant can decide where to attend the interviews and tests for final selection or withdraw them the initial stage. Research on realistic recruiting shows a lower rate of employee turnover incase of employee recruited through RJPs, particularly for more complex jobs and higher level of job satisfaction and performance, at the initial stage of employment. RJPs are more beneficial for organization hiring at entry level, when there are unemployment. Otherwise the approach may increase the cost of recruiting by increase the average time it takes to fill each job.


Job Compatibility QuestionnaireThe job compatibility questionnaire was developed to determine whether applicant preferences for work match the characteristics of the job. The JCQ is designed to collect the information on aspect of a job, which has bearing on employee performance, absenteeism, and turnover and job satisfaction. The underlying assumption of the JQC is that greater the compatibility between an the jobseeker, the greater the profitability of employee effectiveness and longer the tenure. The JCQ is a 400- item instrument that measure job factors, which are related to performance, satisfaction, turnover and absenteeism. Items cover the following job factors: task requirement, physical environment, customer characteristics, peer characteristics, leader characteristics,

compensation preference, task variety, job autonomy, physical demands, and work schedule.


As stated earlier, recruitment is the process of location, identifying, and attracting capable applications for jobs available in an organization. Accordingly, the recruitment process comprises the following five steps:

Recruitment planning; Strategy Development;

Searching; Screening; Evaluation and Control.

Recruitment Planning: The first involved in the recruitment process is planning. Hire, planning involves to draft a

comprehensive job specification for the vacant position, outline its major and minor responsibilities; the skills, experience and qualifications needed; grade and level of pay; starting date; whether temporary or permanent; and mention of special condition, if any, attached to the job to be filled.

Strategy Development:Once it is known how many with what qualification of candidates are required, the next step involved in this regard is to device a suitable strategy for recruitment the candidates in the organization. The strategic considerations to be considered may include issues like whether to prepare the required candidates themselves or hire it from outside, what type of recruitment method to be used, what geographical area be considered, for searching the candidates, which source of recruitment to be practiced, and 21 what sequence of activities to be followed in recruiting candidates in the organization.

Searching:This step involves attracting job seeders to the organization. There are broadly two sources used to attract candidates. These are:

Internal Sources External Sources.

Screening:Through some view screening as the starting point of selection, we have considered it as an integral part of recruitment. The reason being the selection process starts only after the

application have been screened and short listed. Let it be exemplified with an example. In the Universities, application is invited for filling the post of Professors. Application received in respond to invitation, i.e. advertisement are screened and short listed on the basis of eligibility and

suitability. Then, only the screened applicant are invited for seminar presentation and personal interview. The selection process starts from here, i.e., seminar presentation or interview. Job

specification is invaluable n screening. Applications are screened against the qualification, knowledge, skills, abilities, interest and experience mentioned in the job specification. Those who do not qualify are straightway eliminated from the selection process. The techniques used for screening candidates are vary depending on the source of supply and method used for recruiting. Preliminary applications, deselections tests and screening interviews are common techniques used for screening the candidates.


Evaluation and control:Given the considerable involved in the recruitment process, its evaluation and control is, therefore, imperative. The costs generally incurred in a recruitment process include: Salary of recruiters; Cost of time spent for preparing job analysis, advertisement, etc; Administrative expenses; Cost of outsourcing or overtime while vacancies remain unfilled;

Cost incurred in recruiting unsuitable candidates.

In view of above, it is necessary for a prudent employed to try answering certain questions like: Whether the recruitment methods are appropriate and valid? Whether the recruitment process followed in the organization is effective at all or not?


Recruitment methods refer to the means by which an organization reaches to the potential job seeker. It is important to mention that the recruitment methods are different from the resources of recruitment. The major line of distinction between the two is that while the former is the means of establishing links with the prospective candidates, the latter is location where the prospective employees are available. Dunn and Stephen have broadly classified methods of recruitment into three categories. These are;

Direct Method;

Indirect Method; Third Party Method. Brief descriptions of these are follows:

Direct Method: In this method, the representatives of the organizations are sent to the potential candidates in the educational and training institutes. They establish contacts with the candidates seeking jobs. Person pursuing management, engineering, medical, etc. programmers are mostly picked up the manner.

Sometimes, some employer firm establishes with professors and solicits information about student with excellent academic records. Sending the recruiter to the conventions, seminars, setting up exhibits at fairs and using mobile office to go to the desired centers are some other methods used establish direct contact with the job seekers.

Indirect Method;

Indirect methods include advertisements in the newspaper, on the radio and television, in professional journals, technical magazines, etc. this method is useful when

Organization dose not find suitable candidates to be promoted to fill up the

higher posts,

When the organization want to reach out a vast territory, and

When organization wants to fill up scientific, professional and technical posts.

The experience suggests that the higher the position to be filled up in the organization, or the skill sought by the sophisticated one, the more widely dispersed advertisement is likely to be used to reach too many suitable candidates. Sometimes, many organizations go for what referred to as blind advertisement in which only Box No. is given and the identity of the organization is not disclosed. However, organizations with regional or national repute do not usually use blind advertisements for obvious reasons. While placing an advertisement to reach to the potential candidates, the following three points need to borne in mind: To visualize the type of the applicant one is trying recruit; To write out a list of the advantages the job will offer; To decide where to run the advertisement , i.e., newspaper with local, state, nation-wide and international reach or circulation.

Third Party Method: These include the use of private employment agencies, management consultants, professional bodies pr associations, employee referral or recommendation, voluntary organization, trade banks, labor contractors, etc., to establish contact with the job seekers.

Now, a question arises; which particular method is to be used to recruit employee in the organization? The answer to it is that it will depend on the policy of the particular firm, the position of the labor supply, the government regulations in this regard and agreements with labor organizations. Notwithstanding, the best recruitment method is to look first within the organization.

EFFECTIVENESS OF RECRUIITMENT PROGRAMME Though there has so far not been evolved any formula such that makes recruitment programme necessitates having certain attributes such as:

A well defined recruitment policy. A proper organizational structure. A well - laid down procedure for locating potential jobseekers. A suitable method and technique for tapping and utilizing these candidates

A continuous assessment of effectiveness of recruitment programme and modifications from time to improve the effectiveness of the programme.

incorporation of suitable

An ethically sound fool-proof telling an applicant all about the job and its position, the firm to enable the candidate to judiciously decide whether or not to apply and join the firm, if selected.


Selection is the process of picking individuals (out of the pool of job applicants) with requisite qualifications and competence to fill jobs in the organization. A formal definition of Selection is:-

It is the process of differentiating between applicants in order to identify (and here) those with a greater likelihood of success in a job.

Recruitment and selection are the two crucial in the HR process and are often used interchangeably. There I, however, a fine distinction between the two steps. While recruitment refers to the process of identifying and encouraging prospective employees to apply for jobs, selection is concerned with picking the right candidates from the pool of applicants. Recruitment is said to be positive in its approach as it seeks to attract as many candidates as possible. Selection, on the other hand, is negative in its application in as it seeks to eliminate as many unqualified applicants as possible in order to identify the right candidates.