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Chapter-I
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Introduction
In an organization there will be a normal of activities carried on like production, Marketing, planning, financier etc., among all these finances plays a major role, which made to study on this. Finance came to studied as a part of Economics before the turn of the present category formation of large sized undertakings by consolidating the smaller ones brought before the Managements the problem of financing to these enterprises. The study of potentiality of different securities as a source of procuring funds from outside world & the role & function of institutional agencies continue to be emphasized during 1921. The problem of financing ensured a new dimension in the II world war. In 1940s financial wizards continued to be concern with the necessity for choosing sells a financial structure as would be able to with stand stress & strains of the part war adjustments. In 1960s & 70s period was marked by a very faithful & exciting Era for a nor of alternative developments. The financial manager started thinking on such important issues. prices, business sale & etc. The dimension of Business financial that was earlier limited to period but in recent years broadened according to- day-to-day operations. As aggregate stock
Performance Of Loans And Advances Of Vijaya Bank Finance is regarded as lifeblood of an Enterprise. This is because in the modern money oriented of all Economy finance is one of the basic foundations of all kinds of economic activities. master key. employed in manufacturing activities. It is the Which provides accedes to all sources for being
convenience of people based on the different categories. So, it is felt very much essential to make a study on these Loan/Advances schemes that how it influences on the development of Economy & what are the conditions & terms that are to be fulfilled to make the Loan/Advances under various schemes.
Methodology:
Personal interview was adopted for collecting data from Vijaya Bank regarding Loan/Advances schemes for collecting primary data and secondary data is collected through the following 1. 2. Financial Books Annual reports
Tools & the techniques of data: Analysis & interpretation of data in based on both primary & secondary data. Primary data: Primary data are the first hand information collected, through various methods such as observation, interviews. Secondary data: & official website. Secondary data are obtained from text books,
magazines, news paper & Annual reports & Broachers of the bank
Limitation of study:
Every efforts has been made to make study complete & has exhaustive as possible, however the study is not free from certain limitations. Sometimes respondents dislikes to discuses regarding data collection. Time limit for the study The study is only confined to Vijaya Bank & the performance of other banking company is not compared with it. The collected information is limited & factual to some extent since some information is confidential & Bank opposed to dispose it. The Exhaustive study has not been made on Vijaya Bank & is limited to the partial fulfillment for the degree of B.B.M. Collection of data & study was based purely on observation of the operation of Vijaya Bank constraint.
Chapter II
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Industry Profile
Banking in India has a long and elaborate history of more than 200 years. The beginning of this industry can be traced back to 1786, when the countrys first bank, Bank of Bengal, was established. But the industry changed rapidly and drastically, after the nationalization of banks in 1969. As a result, the public sector banks began experiencing numerous positive changes and enormous growth. Then came the much-talked-about liberalization and economic reforms that allowed banks to explore new business opportunities and not just remain constrained to generating revenues from mere borrowing and lending. This provided the Indian banking scenario a remarkable facelift that only continues to get better with time. However, even today, despite the foray of foreign banks in the country, nationalized banks continue to be biggest lenders in the country. This is primarily due to the size of the banks and the penetration of the networks. Savings banks and savings and loan associations, sometimes called thrift institutions, are the second largest group of depository institutions. They were first established as community-based institutions to finance mortgages for people to buy homes and still cater mostly to the savings and lending needs of individuals. Credit unions are another kind of depository institution. Most credit unions are formed by people with a common bond, such as those who work for the same company or belong to the same labor union or church. Members pool their savings and, when they need money, they may borrow from the credit union, often at a lower interest rate than that demanded by other financial institutions. Federal Reserve banks are Government agencies that perform many financial services for the Government. Their chief responsibilities are to regulate the banking industry and to help implement our Nations monetary policy so our economy can run more efficiently by controlling the Nations money supply
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Although 72 percent of public & private sector bank respondents expressed their satisfaction with the recently devised road map for the foreign banks, majority of foreign Bank respondents (75 percent) expressed complete dissatisfaction with this Roadmap.
75 percent of the foreign bank respondents expressed that time frame prescribed to expand through Merger & Acquisitions should have been less and equal number voiced that the guidelines are not in line with international norms.
Consolidation in the banking industry followed by Technological up gradation was considered as key factors currently required to enhance the international Competitiveness of the Indian banks.
Free trade agreements (FTA) considered a positive step in the area of banking by almost all respondents. The available market size and the level of access provided to Survey on Status of Indian banking Industry Progress & Agenda ahead 2 Indian banks in foreign countries should be
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More than 70 percent of banks felt the need of advanced security softwares and stricter security policies to safeguard and ensure the security of customer information. Some of the legal changes suggested are detailed in the survey.
53 percent of respondent banks considered 6 months transition period to shift from MIFOR rupee benchmarks for interest rate derivatives to be inadequate.
Majority of banks felt that their Risk management framework for implementation of BASEL II was well in place.
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Mission:
To create long term value by empowering individual investors through superior financial services supported by culture based on highest level of teamwork, efficiency and integrity.
Quality Policy:
IMAGE is committed to enhance knowledge, competencies & professional skills of individuals enabling conversion of training outputs into business opportunities for achieving organizational growth & excellence. IMAGE strives for developing innovative training programs &
methodologies, for higher involvement of personnel to effectively achieve the dynamic business needs. IMAGE motivates & trains all levels of personnel for continual improvement of the quality management system. In order to achieve the above policy, IMAGE works on the following quality objectives.
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Products/Service Profile
Products Savings Account Current Account Salary Account RD Account Education Loan Home Loan Agriculture Loan Jewel Loan Loans to Micro Entrepreneurs Vehicle Loan
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NRI Services Deposits Loans Remittances FOREX Branches FCNR(B) Branches Helpline for NRIs
Remittance Collection and Facilities FOREX Remittances Inland Remittances Electronic Remittance Services Inward / Outward Collection Instruments
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Other Services Merchant Banking Vijaya Rakshak V-Arogya Bima Policy Credit Cards Mutual Funds Leasing Hiring Purchases
OWNERSHIP PATTERN The Vijaya Bank is owned by government as well as public sector.
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Ownership Pattern:
Ownership Pattern/Shareholder Pattern
The share holding pattern in Vijaya Bank Ltd is as given below in the form of table
Dmat No of Shareholders Percentage No of shares
Promoter Foreign Promoter Indian Promoter Total Promoter Non Promoter Institutions Mutual Funds / UTI FI/Bank Insurance Govt FII Other Non-Institution Bodies Corporate NRIs/OCBs Individuals Others Total Non-Institution Total Non Promoter Depository Receipts Total
0 0 233,517,8001 233,517,8001
0 233,517,800 233,517,800
14 20 5 9 69 0
1.74 1.12 5.65 4.56 8.66 0.00 3.26 0.62 19.76 0.00 24.40 46.13 0.00 100.00
7,536,167 4,864,651 24,514,928 19,760,268 37,542,895 0 14,115,017 2,668,569 85,652,275 0 105,781,091 200,000,000 0 433,517,800
12,672,717 1,800 2,198,569 2,311 60,379,605 271,095 0 0 78,596,121 276,711 172,814,530276,828 0 0 406,332,330276,829
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Infrastructural Facilities:
As regards to the infrastructural facilities provided in Vijay Bank Offices
The Head office of Vijaya Bank has a central air condition system which helps the employees to escape from the heat. Canteen The Bank provides canteen facility to all its employees and it
is situated inside the Bank premises. System The Bank is one of the few banks in the country which uses
Finical Software which in turn helps the bank to serve its customers more efficiently. The Bank also provides internet facility to its employees
Achievement/Awards:
In recognition of performance in implementing Hindi Language, the Bank was awarded III prize under the prestigious INDIRA GANDHI RAJBHASHA PURASKAR for the year 2007-08. The Bank has also been awarded II prize in Region 'C" for Progressive Use of Hindi under Reserve Bank Rajbhasha Shield Scheme for the year 2011-12. The Bank was awarded I prize by Regional Implementation Office (North- East), Ministry of Home, Govt of India in North Eastern Region for Progressive Use of Hindi for the year2011-12. SLBC Gujarat also conferred on the Bank III prize for effective implementation of the Official Language.
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The Bank's Regional Office, Bangalore (North) was awarded I Prize by TO LIC, Bangalore for effective Implementation of Official Language for the year 201112. Also Regional Offices, Kolkata and Hubli, were awarded II Prize by TO LIC, Kolkata and Hubli respectively for effective Implementation of Official Language. Regional Office, Ahmadabad has been awarded Consolation prize by TO LIC, Ahmadabad during the year. The staff members working in Bangalore city participated in the Inter-Bank competitions conducted under the aegis of TO LIC. 12 competitions were conducted, in which our Bank bagged 9 prizes, out which 2 were First prizes. During the year, the Bank received an award from the NABARD in recognition of the highest share of SHG business to its overall business, under SHG Bank linkage programme for the year 2011-12, among commercial Banks in the State of Karnataka.
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SWOT ANALYSIS
A SWOT analysis focuses on the internal and external environments,
examining strengths and weaknesses in the internal environment and opportunities and threats in the external environment.
STRENGTHS
Ability to lead with the customer. It has value in the market. Strong relationship with customer. Best value of money Proactiveness Low NPA Value
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OPPORTUNITIES
Increasing Network penetration. Can take new Initiatives to make itself from other banks More than 60% of the market is untapped in India. Building Relationship with clients Unfulfilled customer needs India is experiencing in rapid growth in its insurance industry
THREATS
Market may not accept new products Increased competition from other insurance vendors Competition from Canara bank, Indian Bank.
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Particulars
Banks - Public Sector Net Interest Income / Total funds Non Interest Income / Total Funds Total Income / Capital Employed (%) Interest Expended / Capital Employed (%) Operating Expense / Total Income Interest Income / Total Funds Interest Expended / Total Funds Operating Expense / Total Funds Profit Before Provisions / Total Funds Net Profit / Total Funds Interest Expended /Interest Earned Other Income / Total Income Credit Deposit Ratio Investment Deposit Ratio Cash Deposit Ratio Advances / Loan Funds (%)
2.20 1.35 0.00 0.00 17.69 7.88 5.69 1.63 1.91 0.77 0.00 14.62 66.10 33.05 8.44 0.00
1.91 1.29 0.00 0.00 15.57 8.89 6.98 1.59 1.62 0.45 0.00 12.72 65.53 33.18 11.12 0.00
1.69 1.10 0.00 0.00 15.93 7.92 6.23 1.44 1.36 0.74 0.00 12.23 65.35 33.47 10.59 0.00
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126.82 115.28 161.90 853.77 1,257.77 108.38 18.42 25.00 10.47 61.44
65.62 146.27 50.81 750.47 1,013.17 43.36 7.36 10.00 5.88 53.47
90.32 24.96 101.44 750.69 967.41 86.70 14.74 20.00 7.99 48.59
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Chapter III
Theoretical Background
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THEORETICAL BACKGROUND
BANK MEANING; A bank is a financial institution and a financial intermediary that
accepts deposits and channels those deposits into lending activities, either directly by loaning or indirectly through capital markets. A bank is the connection between customers that have capital deficits and customers with capital surpluses. .
Objectives: enlist the utility of granting loans and advances by commercial banks; differentiate borrowing rates from lending rates; enumerate the ways of lending money; distinguish between long-term and short-term loans; point out the nature of security provided for loans; and outline the procedure for grant of cash credit, overdraft and Discounting of bills of exchange.
Meaning of Loans and Advances The term loan refers to the amount borrowed by one person from another. The amount is in the nature of loan and refers to the sum paid to the borrower. Thus, from the view point of borrower, it is borrowing and from the view point of bank, it is lending. Loan may be regarded as credit granted where the money is disbursed and its recovery is made on a later date. It is a debt for the borrower. While granting loans, credit is given for a definite purpose and for a predetermined period. Interest is charged on the loan at agreed rate and intervals of payment. Advance on the other hand, is a credit facility granted by the bank. Banks grant advances largely for short-term
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Lending of Money
You have noted in the earlier that commercial banks lend money in four different ways: (a) direct loans, (b) cash credit, (c) overdraft, and (d) discounting of bills. These are briefly discussed below: (I) Loans Loan is the amount borrowed from bank. The nature of borrowing is that the money is disbursed and recovery is made in installments. While lending money by way of loan, credit is given for a definite purpose and for a pre-determined period. Depending upon the purpose and period of loan, each bank has its own procedure for granting loan. However the bank is at liberty to grant the loan requested or refuse it depending upon its own cash position and lending policy.
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A Demand Loan is a loan which is repayable on demand by the bank. In other words, it is repayable at short-notice. The entire amount of demand loan is disbursed at one time and the borrower has to pay interest on it. The borrower can repay the loan either in lump sum (one time) or as agreed with the bank. For example, if it is so agreed the amount of loan may be repaid in suitable installments. Such loans are normally granted by banks against security. The security may include materials or goods in stock, shares of companies or any other asset. Demand loans are raised normally for working capital purposes, like purchase of raw materials, making payment of short-term liabilities.
Term Loans : Medium and long term loans are called term loans. Term loans are granted for more than a year and repayment of such loans is spread over a longer period. The repayment is generally made in suitable instalments of a fixed amount. Term loan is required for the purpose of starting a new business activity, renovation, modernization, expansion/extension of existing units, purchase of plant and machinery, purchase of land for setting up of a factory, construction of factory building or purchase of other immovable assets. These loans are generally secured against the mortgage of land, plant and machinery, building and the like.
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IV Discounting of Bills Apart from sanctioning loans and advances, discounting of bills of exchange by bank is another way of making funds available to the customers. Bills of exchange are negotiable instruments which enable debtors to discharge their obligations to the creditors. Such Bills of exchange arise out of commercial transactions both in inland trade and foreign trade. When the seller of goods has to realize his dues from the buyer at a distinct place immediately or after the lapse of the agreed period of time, the bill of exchange facilitates this task with the help of the banking institution. Banks invest a good percentage of their funds in discounting bills of exchange. These bills may be payable on demand or after a stated period.
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Procedure of granting Cash Credit, Overdraft and Discounting Bills We have studied in this lesson that banks provide financial assistance to its customers in the form of loans, advances, cash credit, overdraft and through the discounting of bills. The procedure of applying for and sanction of loans and advances differs from bank to bank. However, the steps which are generally to be taken in all cases are as follow: Filling up of loan application form Each bank has separate loan application forms for different categories of borrowers. When you want to borrow money from a bank, you will have to fill up a loan application form available with the bank free of cost. The loan application form contains different columns to be filled by the applicant. It includes all information required about the borrower, purpose of loan, nature of facility (cash-credit, overdraft etc) required, period of repayment, nature of security offered, and the financial status of the borrower. A running business limit may be required to furnish additional information in respect of: assets and liabilities profit and loss for the last 2 to 3 years. The names and addresses of three persons (which may include borrowers, suppliers, customers and bankers) for reference purposes.
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The borrower will now arrange for security against the loan. These securities may be immovable properties, shares, debentures, fixed deposit receipts, and other documents, like, Kisan Vikas Patra, National Savings Certificate, as per agreement.When the borrower completes all the formalities, he is allowed to get the amount of loan/advance/ over draft as sanctioned by the bank. In case of discounting of bills, the bank credits the amount of bill to the customers account before the realization of the bill and thus, makes available the fund. In case, the bill is dishonored on due date, the amount due on the bill together with interest and other charges are payable by the party whose bill is discounted.
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The main activities of a commercial bank include acceptance of deposits, that is mobilisation of funds, and lending these funds to people who require it for various purpose. On the deposits received the bank pays interest to the depositors at a specified rate. This is known as the Borrowing Rate. When the Reserve Bank of India lends money to commercial banks, the rate of interest it charges is known as Bank rate. The other important activity of a bank is that of granting loans and advances to the public. The rate of interest at which commercial banks lend money to the people is known as Lending rate. The borrowing rates and lending rates are subject to change from time to time. There are four different ways of lending money by banks; viz. (a) Direct loans; (b) Cash credits; (c) Overdraft, and (d) discounting of bills. Bank loans may also be classified into 3 categories i.e. Short-term loan, medium term loan and Long-term loan. Short-term loans are granted by banks to meet the working capital needs of business. Medium term loans and long-terms loans are generally known as Term loans. These loans are granted for more than one year for heavy repairs, expansion of units, modernisation/renovation etc. Such loans are sanctioned against the security of permanent, immovable assets. To ensure the safety of the funds lent, banks require the security of tangible assets owned by the owner, both in the case of short-term and term loans. Unsecured loans are those granted against the personal security of the borrowers. There are various types of securities which are acceptable by banks against loans and advances.
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Loans Against Securities Non Fund Based Facilities Advances to Agriculture, SSIs and Others Government Sponsored Schemes Prime Minister's Rozgar Yojana Swarna Jayanti Gram Swarozgar Yojana Scheme For Liberation And Rehabilitation of Scavangers Golden Jubliee Rural Housing Scheme Differential Rate of Interest Scheme
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V Wheels
Purpose For purchase of new two-wheeler / motorcar of any make for private use or professional or business use. For purchase of second hand / used two-wheeler / motorcar of not more
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V-Rakshak
Objective An honour in recognition and appreciation of the role of Defence Personnel to the nation. Purpose To meet the credit needs of the Defence Personnel (serving/retired) for purchase of consumer durable/ motor vehicles, for meeting any type of household expenses such as repairs/ renovations of the house, educational / marriage/ medical expenses/ family functions, etc/ traveling expenses in India and abroad, etc.
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V Cash Scheme
V-CASH is a very convenient scheme that one can avail of to meet short- term credit needs for individuals / working women / pensioners / Senior Citizens. Purpose For meeting unforeseen short time credit needs of the applicants / family members which includes medical expenses, marriage of applicant / family members, purchase of consumer durables, etc
V-Shikshak
Objective An honour in recognition and appreciation of the role of teachers in serving the society by imparting knowledge to the younger generations. Purpose Teachers can avail any of the following schemes under concessional rate : V-Cash Vijaya Home Loan Vijaya Wheels V-Equip
V Swashakti
Objective To expand the employment and Income Generating Schemes and Programme so as to make women Self-reliant and economically independent. Purpose Offering assistance to Women Entrepreneurs for economic pursuits in Small Business, Professional or Professional or Self Employed and Retail Trade and Credit facilities to Women Entrepreneurs (Term Loan / Working capital) for the following:
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Education Loan
Central Scheme of Interest Subsidy for Educational Loans An initiative to help students from Economically Weaker Sections One of the major concerns of the Government of India is to ensure that nobody is denied professional education because he or she is poor. Indian Banks' Association (IBA) has formulated a comprehensive model educational loan scheme for adoption by all Banks. In order to support students from Economically Weaker Sections of the Society, Department of Education, Ministry of Human Resource Development, Government of India has launched this interest subsidy scheme.
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No. advance shall be made against deposits of other banks. The interest rate chargeable in respect of advances shall depend upon the category of the borrower and the purpose of the advance.
Advances Against Nre And Fcnrb Deposits For guidelines on loans against the security of deposits of NRI/FCNR refer H.O.Gen.circular 8/2001, Gen. circular No.3/02. and guidelines issued by International Banking Division, H.O. Bangalore, and RBI from time to time. Advances Against Ivp/Kvp/Nsc Loans/Overdrafts can be sanctioned for productive purposes at the Banks usual rate of interest with a margin of 25% on the face value of IVP/KVP for a period not exceeding the maturity period of IVP/KVP as the case may be lodged as security. Genuineness of the Bearer securities and bonafide of the borrower shall be ensured by the Branches by observing the guidelines given in MOA-Vol-II.Item No.27-11-6. The margin prescribed at 35% in case of NSCs purchased within a period of the preceding 12 months and 25% in other cases on the face value.
Only after the concerned Post office makes an endorsement on the relative certificate to the effect that the certificate has been transferred
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Advances Against Shares Advances against companies debentures and approved shares may be made either as loans or as Overdraft. While considering grant of advance against shares/Debentures, Banks must follow the normal procedures for pre-sanction appraisal and post sanction follow up. Advances against primary security of shares/debentures may be given only to Individuals Stock & share brokers Trusts & endowments.
Loans & Advances against demated approved shares & debenturesMaximum Limit Rs.20 lakh.
Margin-
40%
demated
shares.
Margin 50% on physical / InfoTech shares on the lowest price as on the last Friday of the month in a recognised stock exchange or monthly average price whichever is lower.
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Loan up to 80% (Margin 20%) The age of the house up to 30 years. Maximum repayment is 15 to 20 years. Age of the building up to 50 years for repair. Loan amount up to 60 months salary/income.
Mortgage Loans Against Immovable Properties Immovable Property includes land, benefits to arise out of land and things attached to earth but do not include standing timber, growing crops or grass. Though the proposals of the following categories will continue to be regarded as low priority, proposals of such categories may be entertained subject to fulfilling the eligible norms stated in HOC.5/2002 and guidelines given at chapter 44 of MOA-Vol-3.
Loans to Real Estate/Property developers/Builders. Loans to construction of cinema Theatre. Loans to Community/convention/Meeting/Marriage halls. Loans to Educational Institutions. Loans for setting up Hotels, Lodges, Holiday resorts, Private clubs. Trading in Tobacco & Processing Advances to coffee curing and trading in coffee beans.
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Jewel Loan can also be granted for agriculture purpose but the quantum of the loan should be need based and assessed on the basis of crops grown or investment proposed. Advances Against Hypothecation Of Machinery Where machines are proposed as security, the following procedure should be followed : If the plant and machinery proposed to be hypothecated are permanently embedded to the earth and the land and building in which they are so embedded are owned by the applicant but have already been mortgaged by him to someone else, such Machinery can not be taken as security and therefore Branches should not take interest in such proposals. If the land & building belongs to a person other than the applicant and has been taken on lease by the applicant, hypothecation of machinery
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Branch should be fixed on each item of machinery to evidence that the plant & Machinery are under hypothecation to the Bank. If the borrower is a limited company, the charge created in favour of the Bank should be got registered with Registrar of companies. The Machinery should be got valued by a competent engineer approved by the Bank. The original invoice should be got scrutinized. The market value of machinery may be taken into account for purpose of valuation after considering its life. Whenever advances are granted against Machinery/equipments, branches should ensure that the prescribed margin on the value thereof is maintained at all times. When advances are granted against motor vehicles, banks lien on such
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The various instructions contained in the chapter on advances against motor vehicles and industrial advances should be followed.
Loans To Real Estate Property Developers And Builders Though the proposals of Real Estate Property Developers and Builders will continue to be regarded as low priority, proposals of such categories may be entertained subject to fulfilling the eligible norms stated in HOC.5/2002 and guidelines given at chapter 44 of MOA-Vol-3.and policy guidelines issued from time to time. Loans To Construction Of Cinema Theatres Production Of Motion Pictures Though the proposals of Real Estate Property Developers and Builders and loans to construction of Cinema theatres will continue to be regarded as low priority, proposals of such categories may be entertained subject to fulfilling the eligible norms stated in HOC.5/2002 and guidelines given at chapter 44 of MOA-Vol-3.and policy guidelines issued from time to time. Hypothecation of Book Debts and Receivables While extending such facilities, the terms of contract with the drawee companies should be studied to ensure that the period of credit does not exceed 90 days generally. Though advances against book debts is now being classified as secured advances (HOC 189/2000), there is a ceiling (within the total limits) to be observed while exercising the delegated powers. In respect of advance against supply bills, irrevocable power of attorney executed by the borrower in favour of the bank should be got registered with the drawees on
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Persons belonging to SC/STs, Advises engaged in agricultural operations and/ or allied activities
Persons engaged in collection of forest products, fodder and selling these in markets.
Persons engaged in Village and Cottage Industries on a very small scale. Indigent students aspiring to pursue higher studies. Physically handicapped persons.
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Under component (1) a voluntary agency having minimum 3 years of proven track record in assisting womens groups, womens development corporation set up by the central/State governments, KVIC/KVIBs or any institutions under the KVIC/KVIB fold, any other registered institution including cooperatives, trusts and corporations set up by central/State governments for the purpose may evolve a scheme to organise rural womens groups for undertaking any productive activity in the non-farm sector and assist them in setting up their own units and /or provide such other backward/forward linkages including training as are considered necessary for improving viability of individual/group enterprises. The loan assistance under the scheme to the individuals, should not normally exceed Rs.50000/- per borrower or say Rs.10 lakhs for a group activity involving 20 rural women.
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Chapter: IV
Data analysis and Interpretation
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1.Table showing bank net interest income of total funds in public sector
YEAR 2012 2011 2010 NET INT INCOME IN TOTAL FUND 1.69 1.91 2.20 Total In % 29% 33% 38% 100
In %
40% 35% 30% 25% 20% 15% 10% 5% 0% 2012 29% 2011 33%
2010 38%
In %
Graph showing bank net interest income of total funds in public sector
Interpretation : As per the above analysis the net interest of on income in total fund in the 2012 is the least that is 29 % it is comparably high in before years as in 2010 & ,2011 that is 38%, 33% as the interest declining in the year of 2012 is 1.69.
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30% 2012
37% 2011
-; Graph showing interest expended on total funds ;Interpretation: As per the above analysis the interest expanded on total funds in the 2012 30% and in 2010 it is same but in 2011 it is increased to 37% as the interest declining in the year 2012 is 5.29
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YEAR
NET INT EARNED In % ON THE DEPOSITS OF BANK 36% 5200.65 37% 5237.83 27% 3888.54 100 Total
In %
40% 30% 20% 10% 0% 2012 36% 2011 37% 2010 27%
-; Graph showing net interest earned on deposits ;Interpretation: As per above analysis the net interest earned on the deposit of the bank in 2012 36% and in 2011 37% and in 2010 27% as the interest declining in the year of 2010 is 3888.54
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YEAR
In %
40% 35% 30% 25% 20% 15% 10% 5% 0% 39% 2012 35% 2011
26% 2010
-; Graph showing operating expenses ;Interpretation: As per the above analysis operating expenses of the bank in the year 2012 39%, in the year 2011 35%, and in 2010 its 26%, as per he operating expenses declining in the year of 2010 is 705.95
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Performance Of Loans And Advances Of Vijaya Bank 5.Table showing provisions and contingencies in the bank YEAR PROVISIONS AND In % CONTINGENCIES OF THE BANK 754.70 43% 691.04 40% 304.97 17% Total 100
In %
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 43% 2012 40% 2011 17% 2010
Interpretation: As per the above analysis the provisions and contingencies of the bank in the year 2012 is 43%, and in the year 2011 is 40%, and in 2010 is 17% as per the provisions and contingencies declining in the year of 2010 is 304.97
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In %
35% 2011
25%
-; graph showing other incomes ;Interpretation: As per the above analysis the other incomes of the bank in the year 2012 40%, and in the year 2011 35%, and in the year 2010 is 25% as the other incomes declining in the year 2010 542.08
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36% 35% 34% 33% 32% 31% 30% 29% 28% 27% 30% 2010 36% 2012
34% 2011
-: graph showing non interest incomes:Interpretation: As per the above analysis the non interest incomes of the bank in the year 2012 36%,in the year 2011 34%,and in the year 2010 its 30% as the non interest incomes declining in the year 2010 is 1.10
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In %
37% 2011 37% 36% 35% 34% 33% 32% 31% 30% 29% 28% 32% 2012 31% 2010
-: graph showing borrowings :Interpretation: As per the above analysis the borrowings of the bank in the 2012 32%,in 2011 it is 37% it is highest when compared to 2012 and 2010 as the borrowings of the bank declining in the year 1918.87
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In %
30% 2010 37% 2012
33% 2011
-: graph showing reserves and surplus:Interpretation: As per the above analysis the reserves and surplus of the bank in the year 2012 37%, and in the year 2011 33%, and in 2010 30% as the reserves and surplus declining in the year 2010 is 2025.53
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In %
40% 30% 20% 10% 0% 26% 2012 40% 2011 34% 2010
-:graph showing cash balance with RBI:Interpretation: As per the above analysis the cash balance with RBI in the year 2012 26%, is low when compared to 2011 and 2010, and 2010 is 34% as the cash balance with RBI is declining in the year 2012 4099.58
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Chapter V
Findings & Suggestions
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FINDINGS:
Interest and /or installment of principal remain overdue for a period of more than 90 days in respect of a Loan, The account remains 'out of order' for a period of more than 90 days, in respect of an overdraft/ cash Credit(OD/CC), The bill remains overdue for a period of more than 90 days in the case of bills purchased and discounted, Interest and/ or installment of principal remains overdue for two harvest seasons but for a period not exceeding two half years. in the case of an advance granted for agricultural purpose, and Any amount to be received remains overdue for a period of more than 90 days in respect of other accounts. Vijaya bank can also be look upon as a bank which is functioning as a social business entity cause of its interest taken in educating people and students in banking with the help of its extension
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Suggestions
The Vijaya bank should also have to concentrate in providing agricultural loans to the customer. The vijaya bank has to build a strong relationship with customers.
The vijaya bank has to improve its services provided to investors. It should also pay attention to political environment and labour conditions of the area where if any potential project is to be located
Market and environmental analysis is much more of importance before launching any of the service so Vijaya bank should also foresee the exact market segment
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Conclusion
As a leading bank in the banking industry Vijaya bank should not neglect the promotional activities at all in its activity towards making business as promotional activity is necessary in any business so that the society and customer would know about the benefits of the service and that are influenced to buy. Strikes, Lockouts, Industrial Peace and Communal Harmony in the area play a decisive role in examining success or failure of the project. for each of its product cause many of the schemes are only suitable to a particular location and class of people. Also we should consider the slowdown in the economy due to the recession as banks suffered the most during this time but Vijaya bank was able to maintain the business throughout. The bank is also having a good workforce and also is recruiting fresh employees which mean it is creating opportunities for growth in the income per person in country. .
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Annexure
Yearly Report- Vijaya Bank
Mar'12 INCOME: Net Sales Turnover Other Income Total Income EXPENSES Stock Adjustments Raw Material Consumed Power and Fuel Employee Expenses Administration and Selling Expenses Research and Development Expenses Expenses Capitalised Other Expenses Provisions Made TOTAL EXPENSES Operating Profit EBITDA Depreciation EBIT Interest EBT Taxes Profit and Loss for the Year Extraordinary Items Prior Year Adjustment Other Adjustments Reported PAT KEY ITEMS Reserves Written Back Equity capital Reserves and Surplus Equity Dividend Rate Agg. Non-Promoter Shares(lacks) Agg. Non-Promoter Holding (%) Government Share Capital Adequacy Ratio EPS (Rs.) Mar'11 Mar'10 Mar'09 Mar'08
5,200.65 5,237.82 3,983.42 2,823.11 2,311.80 679.45 698.81 437.15 274.79 368.99 5,880.10 5,936.63 4,420.57 3,097.90 2,680.79 0.00 0.00 0.00 705.62 0.00 0.00 0.00 365.95 355.82 1,427.39 3,773.26 4,452.71 0.00 4,808.53 3,751.57 1,056.96 193.85 863.11 0.00 0.00 -355.82 507.29 0.00 433.52 1,884.55 0.00 2,000.00 45.13 53.87 11.79 11.45 0.00 0.00 0.00 597.47 0.00 0.00 0.00 327.23 357.41 1,282.11 3,955.71 4,654.52 0.00 5,011.93 4,113.02 898.91 279.02 619.89 0.00 0.00 -357.41 262.48 0.00 433.52 1,672.89 0.00 2,000.00 46.13 53.87 13.08 6.05 0.00 0.00 0.00 404.92 0.00 0.00 0.00 296.35 383.29 1,084.56 2,898.86 3,336.01 0.00 3,719.30 3,058.42 660.88 -83.69 744.57 0.00 0.00 -383.29 361.28 0.00 433.52 1,672.89 0.00 2,000.00 46.13 53.87 11.22 8.33 0.00 0.00 0.00 392.14 0.00 0.00 0.00 258.58 348.27 998.99 1,824.12 2,098.91 0.00 2,447.18 1,751.16 696.02 16.41 679.61 0.00 0.00 -348.27 331.34 0.00 433.52 1,186.62 10.00 2,000.00 46.13 53.87 11.21 7.64 0.00 0.00 0.00 378.84 0.00 0.00 0.00 244.70 538.77 1,162.31 1,149.49 1,518.48 0.00 2,057.25 1,339.02 718.23 52.58 665.65 0.00 0.00 -538.77 126.88 0.00 433.52 1,236.05 10.00 2,000.00 46.13 53.87 11.94 2.93
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Performance Of Loans And Advances Of Vijaya Bank Balance Sheet of Vijaya Bank
Mar 2012 CAPITAL AND LIABILITIES Capital Reserves and Surplus Deposits Borrowings Other Liabilities & Provisions TOTAL ASSETS Cash & Balances with RBI Balances with Banks & money at Call & Short Notice Investments Advances Fixed Assets Other Assets TOTAL Contingent Liabilities 4,099.58 1,449.68 21,107.45 41,521.72 493.16 1,550.50 5,730.41 1,941.77 17,387.70 35,467.67 493.25 1,361.36 5,661.55 435.81 16,617.32 31,689.22 507.82 1,273.40 3,399.71 1,670.41 12,018.41 24,223.55 186.18 859.31 2,248.64 586.50 11,179.70 16,664.01 202.49 655.71 933.52 2,541.63 61,931.75 1,938.56 2,876.63 933.52 2,215.78 54,535.42 2,269.24 2,428.20 433.52 2,025.53 47,952.01 1,918.87 3,855.19 433.52 1,463.16 37,604.50 198.14 2,658.25 433.52 1,235.63 27,709.29 515.82 1,642.79 Mar 2011 Mar 2010 Mar 2009 Mar 2008
70,222.09 62,382.16 56,185.12 42,357.57 31,537.05 10,760.84 11,836.82 12,551.42 9,048.03 9,083.26
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3. What is the interest earned on the deposits of bank? In the year of 2012 2011 2010 -----------------------------------
4. What is the operating expense in the bank? In the year of 2012 2011 2010 -----------------------------------
5. What are the provisions and contingencies in the bank? In the year of 2012 2011 2010 -----------------------------------
6. What are the other incomes in the bank? In the year of 2012 2011 2011 2010 -----------------------------------------------
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8. What are the borrowings of the bank? In the year of 2012 2011 2010 -----------------------------------
9. What is the reserves and surplus in the bank? In the year of 2012 2011 2010 In the year of 2012 2011 2010 -------------------------------------------------------------------
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Bibliography
REFERENCES B.S. Raman M.L. Seth Banking Theory Money banking and International Trade Banking Theory Banking & Financial Systems
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