SCFS Cooperative Bank LTD

A study on Credit Appraisal System at S.C.F.
S Cooperative Bank ltd
CHAPTER-1
INTRODUTION
Credit appraisal system
The financial institution generally used this system for providing a loan ,it’s
include how the financial institutions follow the procedure to providing the
loan, and find the repayment capacity of the lender, and maintenance of credit
system in the bank.
Meaning of credit appraisal
It is involved in non-payment of the credit obtained by the customer of the

bank, credit appraisal system it is include overall procedure followed by the
bank to obtained the loans of its customers, and also the banker have to be find
the repayment ability of loans and also find the earning source of the
customers, and banker want to get the full details about of its customers.
 It is assessment of the viability of proposed long term investment in

term of shareholders wealth and the formal analysis of all project
appraisal offers significant benefits to a firm.
 A good appraisal justice’s spending money on a project, crew appraisal
or project planning must be viewed as a process decision making over
time, starting with project identification and proceeding through
various stages of various feasibility studies for (example engineering
financial etc.) then the investment phase, and finally interest
evaluation. This so called concept of the project cycle.
 Getting design and operation of appraisal system right is important, the
proper consideration of each of the key components of project
appraisal is essential. This are:
REVA UNIVERSITY, SCHOOL OF COMMERCE Page 1

A study on Credit Appraisal System at S.C.F.S Cooperative Bank ltd
 Need ,targeting and objectives

 Options
 Input
 Output and outcomes
Key issues in appraising project include the following.
 Need, training and objectives:
The starting point of appraisal: application should provide a detailed

description of the project identifying the local need it aims to meet. To get the
right information about the project
 Options:
Option analysis is concerned with establishing whether there are different

achieving objectives. This is a particularly complex part of project appraisal,
and where guidance varies. It is vital through to review different ways of
meeting local need and key objectives.
 Input:
It’s important to ensure that all the necessary people and resources are in place
to deliver the project. This may mean thinking about funding from various
sources and other inputs, such as volunteer help or premises, appraisal should
that examination of appropriate detailed budgets.
 Outputs and outcomes:
Detailed consideration must be given in appraisal to what the project does and
archives its outputs and more importantly it’s longer-term outcomes. Benefits
to neighbourhoods and their residents and reflects in the improved quality of
life outcomes (jobs better housing, safety, health, and so on), and appraisals
consider if these are realistic.

Credit Appraisal takes care of
 Borrower’s ability to complete the project and its intention to re-

pay the loan after commissioning of the project.
 All the technical details related to the project requirement, end
product, maintenance, project specifications, quality etc.
 All the financial details related to project like cash inflow, cash
outflow, NPV, Break even period, growth opportunity etc.
 Financial appraisal to determine whether the company will be able
to repay the loan from incremental cash flow or not.
 Market Appraisal to determine whether the project is viable or not
and what are chances of being successful.
Importance of credit appraisal
 Credit planning and controller at the macro level.

 Allocation follows up and control of Credit to individual customer
at the micro level.
 Credit decisions are made by bankers and what measures are
commonly adopted.
 To ensure the safety of bank advances without an over emphasis
on physical security.
 It is referred to as the life blood of business enterprise.
 It is valuable to those customers, who cannot barrow from other
sources or fund.
 Advances play an important role in the gross earnings and net
profit of banks.

Advantages
 Reduces risk involved in the loans provided for a project.

 Increases confidence among the corporate bankers and improves
sales decision.
 Reduces NPA (Non-performing Assets ) and possibility of
financial loss.
 Proper assessment is done with different options.
The five Cs of credit appraisal
Each of these Cs is used to ascertain the risk of default
Character
Credit history report is the indicator used by lenders to judge the character of
mortgage. The banks also use the qualitative factors such as the degree of
honesty by cross-checking the facts presented by the borrower. For instance, if
an applicant has hopped his job twice in a year, the reason for switching the
job will be verified from his previous and present employers, to concealed any
information.
Capital
This is critical criterion to ascertain the amount of loan the applicant is worthy
of .It builds the lender’s faith in the applicant repayment capacity. The
applicant’s equity must be good enough to not just meet the monthly
obligations but the additional overheads as well.
Capacity
The capacity of the loan borrower is decided through his annual income .The
FIXED OBLIGATION TO INCOME RATIO (FOIR) is one of the tools that
helps link your potential for the home loan and the amount you need to set
aside for your daily expenses and contingencies. Multiple existing obligations
decrease your chances to get a new loan.

Conditions
Banks offers loans taking into account the prevailing market conditions,
industry status, company, interest rate movements, inflation, price fluctuations
among other things. Thus, strong and positive industry growth and economic
conditions are indicators of the applicant’s ability to generate revenue and
repay the debt.
Collateral
A home loan is availed of against a security or collateral. If the borrower is

unable to repay his debt, lender depends on the strength of the security. In case
of a home loan, the property for which the loan is sought is a collateral .A
vigorous study and examination of the collateral through legal and technical
evaluation techniques is imperative to sanctioning
 Sources of fund lending
A study of balance sheet reveals the main sources of fund available for lending
and investment are follows
 Paid up capital
 Reserve and funds
 Deposits
 Borrowing
 Undistributed profit
 Other financial institution

Classification of credit
Banks offers different kinds of borrowing facilities to their customers the

credit facilities offered may be classified based on securities, maturity and
method of repayment, origin and purpose, the bank advances in the country
are classic as follows:
 Secured or unsecured
 Cash credit
 Demand loans
 Term loans
 Bills discounted
Forms of credit
Banks offer different kind of borrowings to their customers. The credit

facilitates may be broadly classified on security, method of payment, maturity
and payment; the credit may be classified into:
 Loans:
In case of loans, banker advances a lump sum of a certain period on agreed

rate of interest. The entire amount is paid either on occasion cash by credit in
his amount, which can draw anytime. The interest charged for the full amount
sanctioned whether he withdraw the money form his account or not.
 Cash credit system:
A cash credit is an arrangement by which the customers is allowed to borrow

money at to a certain limits, this is a permanent arrangement and the customer
need not draw the sanctioned amount once, but draw the amount as required.

 Overdraft:
Overdraft is an arrangement between the banker and his customer by which

the letter is allowed to withdraw over and above is credit balance in the current
up to an agreed limit. This is only a temporary accommodation usually granted
against securities.
 Bills purchased:
Bills, clean or documentary, are sometime purchased from approved

customers in whose favour regular limits are sanctioned.
 Term loans:
Since some years, bankers have started leading large amount for long period to
industries and agriculture on the security of fixed assets on term loans basis.
Such loans are repayable by installation over an amount of year ranging from
3 to 10 and sometimes more.
Loan processing
 Prospecting:
Prospecting is identifying the right customer borrower who is in need of a loan

is the first phase of the loan process.
 Pre- approval and documentation:
Sales team will be assessing the applicant details to check whether it is

meeting the basic requirements and he/she is eligible for a loan documentation
includes loan applications, KYC documents, income documents, employment
documents, residential details and other supporting documents as per the
lender’s requirements.

 Loan processing:
In processing stage, the applicant details will be confirmed, the risk team will
be checking the authenticity of documents submitted, residential, employment
and reference verification will be completed. Credit report CIBIL request to
check credit history, internal and external verification will be completed
before sending the file credit appraisal.
 Credit appraisal:
Loan officer/credits officer will evaluate the applicant documents based on

5C’s on credits and renders a decision of approval or rejection with valid
reason.
 Disbursal:
Once the loan is approved by credit officer, the operation teams prepare the
final documents and this document goes through the verification process. Then
the loan amount on agreed basis is disbursed to the customer.
 Post disbursal evaluation:
Auditing and post disbursal evaluation will be conducted through the

centralized system to verify all the systems, process, documentation and other
policy related aspects are covered under each stage of loan processing.

CHAPTER 2
COMPANY PROFILE
INDIAN BANKING SYSTEM:

Banking in the India has its original early as the Vedic period. It believed that
the transition from money lending to banking must have occurred before
Manu, the greatest Hindu justice, who has devoted a section of his work
deposits and advances a laid down rules relating to rates of interest during the
Mogul period. The indigenous bankers played a very important role in lending
a money, financial foreign and commerce.
During the days of the east Indian Company, it was the turn of s to carry on
the Banking business, the general bank of India was the first bank to be
established in the year 1786. The others, which followed, were the bank of
Hindustan is reported to have continued until 1906. While the other two failed
in the meantime.
In the first half of 19th century, the East Indian Company established three
banks: the bank of Bengal in 1809, the bank of Bombay in 1840 and the bank
of madras in 1843.
These three also known as the presidency banks were independent units
functioned well. These three banks were amalgamated in 1920 and a new
bank, the imperial bank of India established on 27 January with the passing of
the state bank of India act in 1955, The RBI which was the central bank was
created in 1953 by passing RBI act 1934. Punjab National banks, the bank of
India Ltd, camera banks Ltd, Indian Bank Ltd, the bank of Baroda Ltd, the
central Bank of India Ltd. On 19 July 1969, 14 major banks were nationalized
and on 15 April 1980, 6 more commercial private sectors banks were taken
over by the Government.

 Public sector Banks:
 State bank of bank associate bank called the state bank group,
 Twenty nationalized banks.
 Regional rural banks mainly sponsored public banks.
 Private sector Banks:

 Old generation private sector
 New generation private sector
 Foreign banks in India
 Non-scheduled banks
 Co-operative sector
It has been developed in the country to supplement the village money lender.
It is an important segment of the organization sector of Indian banking is the

co-operative banking the segment is represented by a group of societies
registered under the acts of the states relating to co-operative societies may be
credit societies or non-credit.
 Development Banks:
Development Banks are those financial institutions, which provide long-term

capital for industries and agriculture.
 Nationalized Banks:
Until independence, the banking system was primarily associated with urban
culture. In order to achieve the social and economic objective of the country,
the banks have to spread out into rural and un-balanced area and make credit
available to the large mass of people in that area.
 Therefore, in1950, the imperial bank of India was asked to its
offices in rural area and brought under government control in July
1995 and renamed state bank of India

 In 19 July 1969 the government, nationalized 14 major banks with

deposits of over 50 cores were nationalized.
 In 1986 to supplement efforts of the state bank of India, the
government introduced social control over the banks. nevertheless,
this control is found wanting
 In July 1993 ,new bank of India merged with Punjab national banks
now expectations there are 27 banks in public sector viz., state bank
of India and its 7 associates,19 commercial banks exclusive of
regional rural banks
CO-OPERATIVE BANK
Introduction
Co-operative banks are an important constituent of the Indian financial
system, judging by the role assigned to them, the expectations they are
supposed to fulfil, their number and the number of offices they operate. The
Co-operative movement originated in the West, but the importance that such
banks have assumed in India is rarely paralleled anywhere else in the world.
Their role in rural financing continues to be important even today, and their
business in the urban areas also has increased in recent years mainly due to the
sharp increase in the number of primary Co-operative banks. Some of the Co-
operative banks are quite forward looking and have developed sufficient core
companies to challenge state and private sector banks.
Co-operative movement in India

The Co-operative movement in India has its origin in agriculture and allied
sectors. The first Co-operative credit societies Act was enacted in1904
subsequently to more comprehensive legislation called the Co-operative
societies Act was enacted. This Act provided for the creation of the post
registrar of Co-operative societies and registration of Co-operative societies
for various for various purpose and audit. Under the Montague-Chelmsford
Reforms of 1919 cooperation became provincial subject and provinces were
authorized to make their own cooperation laws. Under the Government of

India Act 1935 Co-operative were treated as a provincial subject. The `Co-
operative Societies `is a subject under entry No32of the state list of the
constitution of Indian.
In order to cover Co-operative societies with membership from that one

province, the government of India enacted the Multi-Unit Co-operative
societies Act 1942. This Act deals with incorporation and winding up of Co-
operative societies having jurisdiction in more than one province. A need was
felt for a comprehensive central Legislation laws governing cooperative
society. This led to the enactment of Multi-state Co-operative societies Act
1984 by the parliament under Entry No 44 of the Union List of the constitution
of Indian.
After Independence, Co-operative assumed a great significance in poverty

removal and faster socioeconomic growth. They become an integral part of the
five year plans. As a result they emerged as a distinct segment in Indian
economy. In the First year plan it was specifically stated that the success of the
plan would be judged among other things, by the extent it was implemented
through Co-operative organizations.
CO OPERATIVE CREDIT INSTITUTION
Rural- co-operative Credit institution Urban co-operative Banks
Short term Long term
Agriculture & Rural

State District Central Primary Development Bank
.
cooperative cooperative agricultural
Bank Bank credit
societies Agricultural & Urban
Development bank

Co-operative movement in Karnataka

Karnataka had build a traditional and culture for and effective network of the
Co-operative in the state the origin of Co-operative credit movement in
Karnataka can be traced pursuing of first Co-operative act on 18th Oct 1904 in
shared was the first urban bank formed in Bombay Karnataka area. The
Bangalore city Co-operative credit was registered on 18th Dec 1906. In
Karnataka there were 302 Primary Co-operative urban banks and are the
salary earners.
Type of bank and working in par with the nationalized, commercial banks, and
their functioning by and large, self supplying and not dependent on outside
progress.
Formation of a Co-operative society
This society must be formed under the Co-operative societies act, 1912 or
under the relevant state Co-operative society law. It can be formed by the least
10 adult members. The members willing to form a society must have common
bond among them. They may be the residents of some locality, employees of
some organization, belonging to some group having affinity etc. The basic
idea is that all the persons intending to form a society should have some
common objections to achieve.
Different types of Co-operative society
Primary Agriculture Credit Societies:
 Operate in villages. A cooperative credit society can be formed by more

than ten persons in most of the states. Deposits are accepted by these
societies from their members and they provide them short term and
medium term loans.
Central cooperative Bank:
 These banks provide financial assistance and supervise the primary

cooperative societies of a district or any part of it.

State Cooperative Bank:
 This is main cooperative bank in every state that runs and lends money
all the central cooperative banks in that state.
Primary Co-operative Agriculture and Rural Development Bank:
 Provide long term loans by mortgaging immovable property of its

debtors as security.
State Co-operative Agriculture and Rural Development Bank:
 Whole State comes under its jurisdiction and it advance loans to primary
cooperative Agriculture and rural development banks.
Urban Co-operative Bank:
 These banks operate in urban areas and accept deposits from the public
and also advance loans to them.
 Supervised by the RBI and managed by the state governments.
Structure of Co-operative banking in India
The structure of cooperative network in India can be dividing into 2 broad

segments
1. Urban cooperative banks
2. Rural cooperative
Urban Co-operative Bank:
It can be further divided into schedule and non-scheduled. Both the Categories
are further divided into multi-state and single-state. Majority of these banks
fall in the non-scheduled and single-state category
 Banking activities of urban cooperative Banks are monitored by RBI.

 Registration and Management activities are managed by Registrar of

cooperative Societies (RCS). These RCS operate in single-state and
Central RCS (CRCS) operate in multiple state.
 Rural cooperative bank:
These banks are further into short-term and long-term structure. The short-
term cooperative banks are three operating in different states, there are
1. State Co-operative Banks-They operate at the apex level in state.
2. District Central Co-operative Banks-They operate at the district levels.
3. Primary Agricultural Credit societies - They operate at the village and
grass-root level
Likewise, the long-term structures are further divided into-
1. State Cooperative Agriculture and rural development banks (SCARDS) -

This operate at state level.
2. Primary cooperative Agriculture and rural development banks

(PCARDBS) This operate at district block level.
The rural banking cooperatives have a complex monitoring structure as they

have a dual control which has led to many problems. A Forum called state
level test force on cooperative Urban Banks (TAFCUB) has been set-up to
look into issues related to duality in control.
All banking activities are regulated by a shared arrangement between RBI

and NABARD
All management and registration activities are managed by Russian.

Importance of Co-operative society
1. Indian cooperative structure are one of the largest such network in the more
than 200 million members. It amounted to about 67%pf the total rural credit.
2. Integral part of credit to Agriculture.
3. Important Instrument in small scale operation.
4. Extensive branch network.
5. Traditional importance.
Problems of Co-operative society
1. The biggest problem facing Co-operative banks is that they have more
than one master in the car of UCBs, you have the RBI and the Registrar of Co-
operative societies (RCS) of the respective state and in the case of district and
state Co-operative banks, and you have NABARD, the RBI and the Russian.
2. Giving the close links between politicians and Co-operative and the fact
that the RCS functions under the state government, in practice this dual or
triple custody of the health of Co-operative banks has, in practice, led to poor
supervision and control. Also most Co-operative banks are lacking in
skill/expertise.
3. Recruitment are politicized as are appointments at most levels. Income

recognition and prudential norms that were introduced for commercial banks
in the early 90s were also not extended to the Co-operative sector.

Features of Co-operative society
 Open membership
The membership if a Co-operative society is open to all those who have a

common interest. The Co-operative societies act doesn't specify the maximum
number of members for any Co-operative society.
 Voluntary organization
A Co-operative society is totally on voluntary membership. Persons having

common interest can join as members. A member can join the society as and
when he likes.
 State control
To protect the interest of member, Co-operative societies are placed under

state control through registration. While getting, registered a society has to
submit details about the members and the business it is to undertake.
 Sources of finance
In a Co-operative society capital is contributed by all the member. However

it can easily raise loans and secure grants from government after its
registration.
 Democratic management
Co-operative societies are managed on democratic lines. A group known as

"Board of directors" manages of society. The members of the board of
directors are the elected representative of the society.
 Service motives
Co-operative is not formed to maximize profit like other forms of business

organization. The main purpose of a Co-operative society is to provide service
to its members.

 Number of members
The minimum number of members required is 10 but there is no limit to the

maximum number of members. Any person can become a member of the
society following these rules and regulations.
 Equality of voting rights
Equality of the essence Co-operative undertaking. Each member has one vote,
irrespective of the number of shares held by him.
 Limited return in capital
The members are given an incentive in the form of a percentage of interest on

capital which they have invested.
 Transfer of shares
The shares of Co-operative society are not freely transferable. A member can
surrender his shares to the society with the permission of the society office
bearers.
 Political and religious neutrality
Co-operative society is neutral for as political and religious affiliations are

concerned.
 Nature of formation
Some middle class and lower class people may form a society in order to
achieve some goals according to the rules of Co-operative society
 Cash trading
Co-operative society conducting business on a cash basis and allow no credit.

Cash trading does not involve bad debts and credit collections expenses.

Profile of Sericulture's Cum Farmer's Service Co-operative

Bank
Introduction
S. C. F. S Co-operative bank limited is a premier sector Indian bank formerly

known as the town Co-operative Bank limited with a heritage of over 36 years
and over 3 million satisfied customers. Started in the date 13/09/1976 as the
name of Sericulture's cum farmer's service Co-operative Hoskote town in the
date of 26/02/1998
Vision and Mission
 Providing banking service with smiling face to our customer smile.
 To mobilize deposits, disburse loan prudently and invest surplus wisely

with the involvement of our committee, dedicated and hardworking
staff to achieve the best.
Objectives of the bank
 To emerge the best service provider for the customer.
 To help increase Agricultural production
 To help existing credit gap in the field of Agriculture.
 To provide adequate and timely credit for viable agriculture schemes.
 To help inculcating banking and saving habits among the rural peoples.
Registered numbers
DRB(R) R.G.N.S-113/1976-77 in the date 13/09/1976
Service area
Hoskote, kasaba Hobli 41 Villages limited area.

Activities
 Short term and medical and medium term loans to members.
 Providing agricultural equipment to farmers.
 Providing loans to SHG group and she Shakti group.
 Distributing food grains to action cards.
 Providing banking information to share holders.
Types of loans provided by the bank to the customers
 Vehicle loan
 gold loan
 pledge loan
 Milk loan
 Salary loan
 Cash investment loan
 KCC crop loan
 Fixed deposits loan

SCFC Co-operative Bank deposit interest rates are
1.Term deposits General Senior citizen
15 to 29 days 4.50 4.50
30 to 60 days 6.00 6.00
61 to 90 days 7.00 7.00
4 to 6 months 8.00 8.00
7 to 12 months 9.00 9.00
1 to 3 years 9.50 10.00
3 and above years 10.00 10.50
2. Saving account 3.5% 3.5%

interest rate
CTD doubling
7 years SI @ 14.40% at general, 18.50% for senior citizen.
CTD 10 years
SI @ 17.10% at general, 18.50% senior citizen.
Competitors of this bank
 State Bank of Mysore
 State Bank of India
 Canara Bank
 Vijaya Bank
 HDFC Bank

 State Bank of Hyderabad
 Syndicate Bank
 Karnataka Bank
Organization Structure of SCFC Bank
President
Vice president
Director
Managers
Officers
Attenders
MEMBERS OF THE BANK:
 Shri. K. Krishnamurthy - President
 Smt. Putta Lakshmi chandrappa - vice president
 Shri. M. Muniyappa - director
 Shri. K. Sathish - director
 Shri. Venkateshamurthy - director
 Shri. C. V. Ganesh - director
 Shri. K.B.Krishnappa - director
 Smt.R.Sujatha ,G.K.Narayanaswamy - director
 Shri. Ramachandra - director
 Shri. Rajanna
 Shri. T. Nrayanaswami - CEO

5 Years total details about the SCFCS Bank
Number of membership in a (in lakhs)
Years No of membership (in lakhs)
2013-14 4325
2014-15 4423
2015-16 3378
2016-17 4505
2017-18 4603
The SCFSC Bank increased the level of No of members in year by year.
Level of share capital of this bank
Years No of share capital (in lakhs)
2013-14 80.12
2014-15 99.00
2015-16 123.34
2016-17 152.45
2017-18 166.85
The SCFSC Bank is increased the level of share capital in year by year.
Level of deposits in SCFSC Bank

Years No of deposits(in lakhs)
2013-14 2520.84
2014-15 3893.97
2015-16 3858.49
2016-17 4288.73
2017-18 4063.08
The SCFSC Bank is increased the level of deposits in year by year.
Level of net profit of SCFSC Bank
Years No of net profit (in lakhs)
2013-14 36.99
2014-15 41.27
2015-16 64.92
2016-17 70.08
2017-18 82.52
The SCFSC Bank is increased the level of net profit in year by year.
SCFSC Bank personal loan
The accelerated growth in the customer market has bought in number of

competitors with packages and much liberalized financial assistance to the
individual while the growing economy has played a pivoted role in
strengthening the buying powers of millions of Indian nationals. The various
financial scheming are only uncreative and useful to there the financiers have
found and an immense potential in there are of lending with yield and scatted
risk.
1) Facility purpose

2) Financial for personals needs
3) Facility type
4) Unsecured loans
Eligibility
 Salaried individuals including SCFSC group member
 Self-employed professionals
 Self-employed individuals/proprietorship
Loan range
Minimum Rs 20000 and minimum Rs 25000 in case of gold credit card

holders program maximum Rs 10000
Program range
 Income proof program
 Surrogate income program
 Corporate tie-up
 Loans to SCFSC group employees
Tenure
 Minimum tenor of 12 months for individuals under income program

and 6 months in case of track record program
 Minimum tenor of 60 months for individuals under income program
 36 months under track record program
 48 months for SCFSS group employee
Fees

Processing fee 2% for individuals 1% for corporate tie-ups. Predominates fee

2% of principle outstanding. Fee structure will be announced by retail from
time to time. To salaries and self employed professional.
Age
21 years as on the date Personal loans of application 55 years as on the date of

application or 60 years or less as on maturing of the loan.
Interest rate
 13% for salaries customers and self-employed professionals
 13% for existing SCFCS Bank customers
 13% for self employed non-professionals
SCFSC products/services
KCC (kissan cash credit) loan
He should be living in bank service area. Crop wishes, the kisan credit card
introduced in the year 1997-98 aim at providing adequate and timely credit
supports from the Banking system to the farmers for their cultivation needs in
flexible and cost effective manner. The scheme enables farmers to purchase
agricultural inputs such as fertilizer, pesticides and draw cash for their
production needs.
Gold loan
Market value of the gold on 70% of loan authorized recommended amount.
Personal loan
On the basis of salary on percentage 5%, 10%.

Medium term loan
 Dairy loan (purchase of cross bid cow)
 13 years encumbrance certificate
 Trip agreement with borrower consult dairy and bank (for supply of
milk and loan repayment purpose)
 Insurance coverage
Tractor loan
 Minimum 5 acres land should be there
 Hypothecation to the bank in RC book
 Insurance coverage
Pledge loan
KVP-80%
NSC (National service crops)
SHG&SSHG
 Members limit from 10-20maximum
 UNDER registered group
 Loan in the basis of capital of SHG i.e. 1:5
 Limit 30000-60000
 Self-employment

SWOT Analysis
Strength
Global Business
16000 people Weakness
50 countries
Manufacturing High cost structure
Strong R&D
ISO 9001 certified
facilities
Threats
Opportunities
Low cost
Already have prior Competitors
R&D in smart home
Unique product
If swot analysis can be tied to customer, products and delivery systems, it can
be a very useful planning technique.
Internal strength and weaknesses
 Concentrate on the current and past performance of your company in

the market place. Review marketing, financial, manufacturing and
organization and any other competencies that are relevant to your
company. Brainstorm factors that influence each competency.
 Priorities this list.
 On Table 1.1 strength/Weakness analysis from supplied rate each

factor from major strength to major weakness. Also give each factor
an importance rating.
 Plot each factor on the importance-performance(Table 1.3)

 Items in cell 1 should be strengthened. Items in cell 2 are in. Item in

cell 3 are of low priority. Item in cell 4 point to potential miss-
application of resources.
 Strengths and weaknesses are essentially internal to the organization

and relate to matters concerning resources, programmers and
organization in key areas.
Opportunities
 Good financial position creating a good reputation for future bank

loans and borrowings
 Skilled workforce means that they can be moved and trained into other
areas of the business
 Competitors going bankrupt (Takeover opportunity)
 Broadband technology has been installed in the area (useful for

Internet users)
 Increased spending power in the local/National economy
 Moving a product into a new market sector

CHAPTER: 3
REVIEW OF LITERATURE
Review of literature
Secondary data are in integral part of a research study to bypass the costs and
benefits of doing primary research. In many ways research situations one
conduct primary research because physical, legal and cost influences.
1 .HRISHIKESH BHATTACHRYA (2011)
Analysis lending strategies, credit appraisal, risk analysis and lending

decisions keeping in mind the broad framework of corporate banking
strategy. And helps us understand better the vast and significant changes in the
financial market. Numeric 8 examples from the world of business have been
provides to facilitate better understanding.
2. VINOD JERSEY (2014)

The assessment of the various risks that can impact on the repayment of loan
us credit appraisal. In short, we are determining "Will I get my money back?"
Depending on the purpose of loan and the quantum, the appraisal process may
be simple or elaborate. For small personal loans, credit scoring based on
income, life style and existing may suffice. But for project financing, the
process comprises technical, commercial, marketing, financial, managerial
appraisals as also implementation schedule and ability.
3. NABEEN JAVAID (2015)
Credit Appraisal: It is a process Procedures of credit Appraisal: It revolvers

around character, collateral capacity. It takes into account various factors like
income of the applications number of dependents, monthly expenditure,
repayment capacity, employment history, number of years of service and other
factors which affect credit rating of the borrower.
By which the lender assesses the credit worthiness the borrower.

4. AWAID BUTT (2016)
Credit Appraisal in general is the process of evaluating the credit worthiness

of the loan applicant. Credit or project appraisal means an investigation
/assessment done by the financial institutions prior to providing any
Funding/Loan/Project Finance, in which it checks the economic, financial and
technical viability of the proposed project.
The appraisal of a credit involves the examination of
 Technical Feasibility: To determine the suitability of the technology

selected and the adequacy of the technical investigation and design.
 Economic Feasibility: To determine the conclusiveness of economic

parameters to setting up the project and their impact on the scale of
operations. It also contains Market Demand/survey providing rational
for undertaking the process.
 Financial Feasibility: To determine the accuracy of cost estimates,

suitability of the envisaged pattern of financing and general soundness
of the capital structure.
 Commercial viability: To ascertain the extent of profitability of the

project and it's sufficiency in relation to the repayment obligations
pertains to term finance.
 Managerial Competency: To ascertain that competent men are behind

the project to ensure its successful implication and efficient
management after commencement of commercial production.
5. ELKE WOOFTER (2008)
The assessment of the various that can impact on the repayment of loan is
credit appraisal. Credit appraisal is a process of appraising the credit
worthiness of the loan applicant.

6. NADEEM ASGHAR (2008)
The act of assessing risks associated with repayment of loan amount, I'd
known as credit Appraisal. The process may be simple or complicated,
depending upon the loan amount purpose of loan and terms of repayment. The
process involving critical and objective evaluation of reputation and credit
worthiness of borrower, Nature of the project, Macro economic conditions etc.
7. SHIRMEYER, ROSLYN (2006)
Over the many years that the banks have been making residential real-estate
loans, the traditional appraisal has been one of the constant of the process,
whether performed by staff or hired outsiders. But just a many other aspects
of mortgage and hoe-equity lending are changing the use of appraisals and
even what will fulfil the traditional role of the full-blown appraisal is evolving.
8. SAM PETER (2012)
Banks could succeed avoiding truly bad loans, only miner benefits derived
from being distinctively competent at risk rating, pricing and monitoring. No
longer is this the case the appraisal management is only option to avoid those
problems.
9. DINESH BHAI (2012)
Credit appraisal means investigation done by the bank before providing any
loans and advances/ project finance and also checks the commercial, financial
and industrial viability of the project proposed its funding pattern and further
checks the primary and to study the collateral security cover avail for recovery
of such funds. Credit appraisal system with respect to banking industry which
means how the managers in banks appraise the corporate firms lending
process and how the whole process carried forward like a system keeping
certain aspects like risk, legal into concern. The scope lays in ways a bank
finance its potential borrowers which us tailor made at time to meet the client
need and help with all the services the bank can deliver in order to meet its
persons goals and objective.

10. Dr. ROSY KALRA (CREDIT APPRAISAL SYSTEM IN

ALLAHABAD BANK)
Finance is required at every stage of business either meeting day to day
operations for operation or for starting up a new Project. One of the important
sources of raising finance is Loans from banks. Commercial lending is on of
the prime functions of any bank. But how does the Bank appraise the credit
worthiness of a Borrower? What are the criterions to be fulfilled for Granting
Loans? What are the tools used by the Banks to appraise the Loan Appraisal.
These questions are being answered.
11. LI JIANJUN (DESIGN AND COMPARISON OF ENTERPRISE

PERFORMANCE APPRAISAL SYSTEM FOR COMMERCIAL
BANKS IN CHINA)
Enterprise performance appraisal of commercial banks, which aims to quantify
performance through power coefficient and analytics coefficient, refers to
quantitative analysis of financial efficiency, liquidity, safety and growth
potential on one hand and qualitative analysis of internal management on the
other. The paper establishes a tentative index system and quantitative model of
performance appraisal for commercial banks in our country. Through
comparison of enterprise performance appraisal among 12 commercial banks
of different owner-ship in the year of 2001, it is found that although state-
owned commercial banks are superior to other commercial banks in terms of
liquidity, they should act quickly to raise their financial efficiency and growth
potential so as to better performance.
12. HAMISU SULEIMAN KARGI (CREDIT RISK AND THE

PERFORMANCE OF NIGERIAN BANKS)
Recently banks witnessed rising non-performing credit portfolio and these
significantly contributed to Financial Distress in the Banking Sector. Banks
collect deposits and lends to customer but when customers fails to meet their
obligations problems such as non-performing loans arise. This Study evaluates
the impact of credit Risk on the Profitability of Nigerian banks. Financial

ratios as measures of bank performance and credit risk were the Data
Collected from Secondary Sources mainly the annual reports and accounts of
sampled banks from 2004-2008.
REFERENCE
1. Hrishikesh Bhattacharya
Oxford University Press, 2011

Books.google.co.in
2. Dr. ROSY KALRA
CREDIT APPRAISAL SYSTEM - INTERNATIONAL JOURNAL OF

MANAGEMENT AND ENGINEERING 2 (5), 537-559,2012
Citeseerx.ist.psu.edu
3. LI JIANJUN
DESIGN AND COMPARISON OF ENTERPRISE PERFORMANCE

APPRAISALSYSTEM FOR COMMERCIAL BANKS IN CHINA FINANCE
FORUM en.cnki.com.cn
4. HAMISU SULEIMAN KARGI

AHMADU BELLO UNIVERSITY, ZARIA, 2011
Academia.edu

RESEARCH METHODOLOGY
Research methodology is a scientific and systematic way to slice research

problems. The methodology may differ from problem to problem. It deals
with the research methods and takes into consideration the logic behind the
methods.
Title of the study

A STUDY ON "CREDIT APPRAISAL SYSTEM” at SERICULTURIST’S
CUM FARMER’S SERVICE CO-COPERATIVE LTD, HOSKOTE
Statement of the study
Verifying whether all the criteria's of the bank has been satisfied by the
company for obtaining the loan from bank and identifying constraints if any.
Objectives of the study
 To study and understand different types of loans provided by SCFSC
bank.
 To study the procedure of obtaining loan from SCFSC bank.
 To analyses the CREDIT APPRAISAL SYSTEM at SCFSC Bank.
 To give suggestions for improvements.
Thus, overall objectives of this project is to understand the credit appraisal
system used in the bank. The credit appraisal system has been analyzed as per
different credit facilities provided by the bank. The detailed explanation about
the techniques and process has been discussed in detail in further chapter.

Scope of the study
The scope of the study is confined to SCFSC Bank Ltd in Hoskote. The study
Credit Management aims to covering the process of financing and managing
credit. The concept of credit appraisal and credit monitoring has been covered
in detail. The study of credit management is applied in banking and financial
institutions.
The scope of the study is limited to the date of the SCFSC bank Ltd.
 The study is exclusively conducted at the SCFSC Bank Ltd.
 The study is confined to finance department.
 By analyzing systematically this could understand the credit

worthiness of the society and its strength and weakness.
Need for the study:
An important need for study is an understanding of the expenditure and

benefits of a project, usually expressed in terms of its inputs and outputs. And
the expected timing of this project must also be made clear. And detailed study
is generally necessary for before decisions can be taken before offer are made.
And to understanding the bank credit policy and credit recovery management.
And to understanding and clear about the present credit risk management steps
undertaken by bank.
Statement of the problem:
SCFSC Society Ltd. are primarily set active to support local rural economies
with credit facilities, this banks normally cater for rural borrowers comprising
farmers, small and micro wages earners and low income salaried employees.
With this type of clientele, credit risk could be high, judging from the 2
financial statement of this bank, any credit financing system lies in the ability
of both lenders and borrowers to 3 asses credit risk, therefore, the study was
understanding the how the bank will manage the credit risk.

Type of the Research
Since it is an institutional specific study, the type of research is descriptive

/diagnostic research based on the secondary data given by the bank.
Data collection
 Secondary Data :
Secondary data are the types of data. These secondary data are those data
which are already being collected by someone.
a. Annual report of the bank
b. Books
c. Websites
Limitations of study
The organization Co-operative whole - heartedly during the course of my

project work, through information was given reluctantly. Information about
their competitors cannot be collected as they revealed that Reserve Bank of
India, according to the Banking Regulation Act of 1956, curbs the competition
of the bank. It is felt that such data should be kept confidential.
 Availability of data is very less
 The study is limited only to the SCFSC bank.
 The study is conducted only the basis of the data provided by the
banks.
 All financial data was in secrets, because it was the confidential data
for all the banks.

Tools
Tools and techniques will help to complete project successfully. For the better
presentation and for the explanation tools statistics I have used. Basic tools
used for project are
1. Trend equation
2. Bar chart
3. Pie Chart
4. Tables
Bar chart and pie chart are very useful tools for every research to show the
result clear and simple way. Because with the help of bar charts and pie charts
data can be shown in a systematic way so that I have used the bar charts and
pie charts and tables.
Tools for data collection:
 Published papers
 Text books
 Journals
 News papers
 Bank financial reports
5 Years data will be collected for data analysis

CHAPTER 4
DATA ANALYSIS AND INTERPRETATION
Data Analysis
Data analysis it is the process of inspecting, transformation, and modelling the

goal of discovering useful information, suggesting conclusion and supporting
decision making.
Interpretation-
Interpretation which means it is a device through which the factor that seem to
explain what has been observed by researcher in the course of study can be
better understood and it also provides a theoretical conception which can serve
as a guide for further researchers.
Secondary data
Secondary data has been collected through bank reports, financial statement
and sources through internet.
TABLE 4.1
TABLE SHOWING THE % INCREASE OR DECREASE OF

TOTAL DEPOSITS IN (2014- 2018)
YEARS ABSOLUTE CHANGES INCREASE/

CHANGES SHOWING IN% DECREASE IN
(in Rupees) %
2014 25,20,84,280.00 100% -
2015 38,93,97,437,00 154.47% 54.47%
2016 38,58,49, 486,90 152.18% 52.18%
2017 42,88,73,352,90 170.13% 70.13%
2018 40,88,73,055,70 161.17% 61.17%

SOURCE: Balance sheet
GRAP 4.1
GRAPH SHOWING THE% INCREASED OR DECREASED

TOTAL DEPOSITS IN (2014-2015)
180%
160%
140%
120%
100%
Changes in %
80% Increase/Decreasein%
60%
40%
20%
0%
2014 2015 2016 2017 2018
Interpretation
The graph showcases the detail regarding the Total Deposits changes in %, the
year 2014 considered as the base year for Trend Analysis with Rs.
25,20,84,280.00 as 100%. Compared to the base year 2014, there was an
increase in all the following years (YEAR 2014-2018) but comparatively 2017
had the highest deposit counted with an increase in total deposits by 70.13%
from 2014.
TABLE 4.2
SHOWING THE % OF INCREASE OR DECREASE OF

RECURING DEPOSITS IN (2014-2018)

CHANGES (in SHOWING DECREASE IN
Rupee) IN% %
2014 20,75,306,00 100% -

2015 23,43,774,00 112.93% 12.93%
2016 24,17,620,00 116.49% 16.49%
2017 34,57,260,00 166.59% 66.59%
2018 40,48,201,00 195.06% 95.06%
GRAPH 4.2
GRAPH SHOWING THE %INCREASE OR DECREASE OF

TOTAL RECURRING DEPOSITS IN (2014-2018)
250
200
150
Changes in %
Increase/Decrease in %
100
50
0
2014 2015 2016 2017 2018
Interpretation:
The above graph shows the total recurring deposits form 2014-2018. There is
increasing trend in the recurring deposits graph this is because it is inferred
that among the deposits of opt to deposits the bank most of them are fixed
income earners. And due to a good service advantage people in this bank.

TABLE 4.3
THABLE SHOWING THE % INCREASE OR DECREASE

OF TOTAL CASH INVESTMENT DEPOSITS IN (2014-2018)

CHANGES (in SHOWING DECREASE
Rupees) IN% IN%
2014 1,64,03,324,00 100% -
2015 2,37,35,959,00 144.70% 44.70%
2016 3,14,22,112,00 191.55% 91.55%
2017 3 86,45,027,00 235.59% 135.59%
2018 3,86,60,420,00 235.68% 135.68%
GRAPH 4.3
GRAPH SHOPWING THE % INCREASED OR

DECREASED OF TOTAL CASH INVESTMENT DEPOSITS
IN (2014-2018)
250
200
150
Changes in %
Increase/Decrease in%
100
50
0
2014 2015 2016 2017 2018

Interpretation:
The graph shows state of increase or decrease in the percentage of total cash
investment deposits.
The trend of cash investment deposits are increased year by year. Many
business people have the account in this bank. These cash investment deposits
are maintained by them. As increased business concern in this area due to
good service provided by bank more business persons are attracted towards
this bank and this has led to increasing trend in the above graph.
TABLE 4.4

TOTAL SAVING BANK S.H.G DEPOSIT IN (2014-2018)

CHANGES(in SHOWING DECREASE
Rupee) IN% IN%
2014 47,90,163,00 100% -
2015 42,90,163,00 89.56% -10.43%
2016 59,06,083,00 123.29% 23.29%
2017 69,49,391,00 235.07% 135.07%
2018 56,92,749,00 208.84% 108.84%

GRAPH 4.4
GRAPH SHOWIMG THE % OF INCREASE OR

DECREASE OF TOTAL SAVING BANK S.H.G DEPOSITS
IN (2014-2018)
250
200
150
Changes in %
100 Increase/Decrease %
50
0
2014 2015 2016 2017 2018
-50
Interpretation
The above table 4 reveals the total saving bank S.H.G deposits of the SCFSC
from 2014 to 2015.
According to the above table graph shows that in the year 2017 the total
savings are increased compared to 2018. The saving bank S.H.G deposits are
varying year by year. This graph is also indicating the economic and societal
issues that were existing, In the year 2015, 2016 it shows this was given less
importance and as years changed and empowerments came into existence this
had grown and now is being given importance, so the scales have changed in
an increasing trend.

TABLE 4.5
TABLE SHOEWING THE % OF INCREAE OR DECREASE

OF TOTAL SALARY LOAN (2014-2018)
YEAR ABSOLUTE CHANGES INCREASE/

CHANGE(in SHOWING IN DECREASE IN
Rupees) %E %
2014 43,88,193,00 100% -
2015 20,72,121,00 47.22% -52.77%
2016 13,80,558,00 31.46% -68.53%
2017 11,19,165,00 25.50% -74.49%
2018 65,54,249,00 14.90% -85.09%
GRAPH 4.5
GRAPH SHOWING THE % INCREASE OR DECREASE OF

TOTAL SALARY LOAN (2014-2018)
150
100
50
Changes in%
Increase/decrease in%
0
2014 2015 2016 2017 2018
-50
-100

Interpretation:
From the above interpretation, it is concluded that total salary loan is

decreasing in 2015; compared to the previous year2014.In the year 2018, it has
been decreased. The salary loan is decreased year by year. This is a positive
result for the bank as it is helping in retaining a lot of Revenue and this also
explains that the Salary to employees have become sufficient enough.
TABLE 4.6

FIXED DEPOSITS LOAN IN (2014-2018)

CHANGES(In SHOWING DECREASE IN
rupee) IN% %
2014 1,16,57,315,00 100% -
2015 1,72,33,793,00 147.83% 47.83%
2016 2,54,24,680,00 218.10% 118.10%
2017 1,81,84,496,00 155.99% 55.99%
2018 3,90,95,068,00 335.36% 234.36%

GRAPH 4.6
GRAPH SHOWING THE % INCREASED OR DECREASED

OF FIXED DEPOSITS LOAN IN (2014-2018)
400
350
300
250
200 Changes in %
150
100
50
0
2014 2015 2016 2017 2018
Interpretation:
The graph shows the state increase or decrease in the percentage of fixed
deposits loan,
From the above interpretation, it is concluded that the SCFSC bank fixed
deposit is increased in the year 2018 compared to 2017. The fixed deposit loan
is increased year by year. The bank has to maintain same in order to increase
from year to year. The reason for an overall increase in fixed deposit loan is an
increase in the number of investors, and the rates over such deposits being
lesser compared to the traditional loans.
TABLE 4.7

TABLE SHOWING THE %INCREASED OR DECREASED

OF MORTGAGE LOAN IN (2014-2015)
YEAR ABSOLUTE CHANGE INCREASE/

CHANGES (in SHOWING IN DECREASE IN
Rupee) % %
2014 3,20,18,608,00 100% -
2015 5,23,18,845,00 163.47% 63.47%
2016 11,09,26,601,00 346.60 246..60%
2017 15,08,61,871,00 471.39% 371.39%
2018 13,43,02,669 419.64% 319.64%
GRAPH 5.7

MORTGAGE LOAN IN (2014-2018)
500
450
400
350
300
250 Changes in %
200 Increase/Decrease in%
150
100
50
0
2014 2015 2016 2017 2018
Interpretation:
The graph shows the state of increase or decrease in the percentage of the total
mortgage loan. On the basis of data collected can that the bank is providing

more mortgage loans year by year. There is rapid growth in mortgage loan
graph. The assets held under the real estate’s had a huge increase in the years
due to which public started raising loans over them.
TABLE 4.8
TABLE SHOWING THE %OF INCREASE OR DECREASE

OF GOLD LOAN IN (2014-2015)

CHANGES SHOWING IN DECREASE
(in rupee) % IN%
2014 14,12,26,862,00 100% -
2015 16,41,81,756,00 116.25% 16.25%
2016 17,79,19,916,00 125.98% 25.98%
2017 17,19,53,180,00 121.75% 21.75%
2018 9,26,00,317 152.51% 52.51%
GRAPH 4.8
GEAPH SHOWING THE % INCREASE OR DECREASE OF

TOTALGOLD LOAN (2014-2018)

180
160
140
120
100
Changes in %
80 Increase/Decrease in%
60
40
20
0
2014 2015 2016 2017 2018
Interpretation:
The graph shows the state of increase or decrease in the percentage of the total
gold loan. In this graph, X-axis denotes the year and Y-axis denotes the
changes in the % an increase or decrease in % of the gold loan.
In the year2015, the percentage of gold loan is increased by 16.25% and in the
year 2016, the gold loan percentage is increased by 9.73% when compared to
2015.And in the year 2017, the gold loan percentage decreased by 4.23%
compared to the year2016. And in the 2018, the gold loan percentage is again
increased. There is a moderate trend in the graph it has increased constantly.
The bank provides the more gold loan in the year 2018 when compared to
previous year.
TABLE 4.9

TABLE SHOWING THE% IINCREASE OR DECREASE OF

S.H.G GROUP LOAN (OWN FUND) IN (2014-2018)

CHANGES SHOWING DECREASE IN
(In rupee) IN% %
2014 9,81,041,00 100% -
2015 48,86,654,00 498.10% 398.10%
2016 55,20,472,00 562.71% 462.71%
2017 46,78,991,00 476.94% 376.94%
2018 64,08,622,00 653.24% 553.24%
SOURCE: balance sheet
GRAPH 4.9
GRAPH SHOWING THE% INCREASE OR DECREASE OF

S.H.G GROUP LOAN (OWN FUND) IN (2014-2018)

700
600
500
400
Changes in %
300 Increase/Decrease in %
200
100
0
2014 2015 2016 2017 2018
Interpretation:
The graph shows the state of increase or decrease in the % of the total S.H.G
group loan (own fund). In this X-axis denotes the year and Y-axis denotes the
changes in % and increase/decrease in % of S.H.G group loan (own fund).
The S.H.G group loan (own fund) graph is fluctuating year by year. When
compared to the other loans provides by the bank these loan are high and
increased fast.
TABLE 4.10

TABLE SHOWING THE %INCREASE OR DECREASE OF

MEMBER’S TOTAL NON AGRICULTURAL LOANS IN
(2014-2018)

CHANGES SHOWING DECREASE
(in rupee) IN% IN%
2014 19,57,09,692,00 100% -
2015 24,18,16, 252,00 123.55% 23.55%
2016 32,26,15,676,00 164.84% 64.84%
2017 34,95,09,639,00 178.58% 78.58%
2018 29,13,22,562,00 148.85% 48.85%
GRAPH 4.10
SHOWING THE % INCREASE OR DECREASE OF

MEMBER’S TOTAL NON –AGRICULTURAL LOANS IN
(2014-2018)

200
180
160
140
120
100 changes in %
80 Inrease/decrease in %
60
40
20
0
2014 2015 2016 2017 2018
Interpretation:
The graph shows the state of increase or decrease in the % of total Member’s
total non-agricultural loans. In this graph, the X-axis denotes the year and Y-
axis denotes the changes in % and increase/decrease in % Member’s total non-
agricultural loans.
The non-agriculture loans have gained significance in the recent dates, as

public is mostly involved in non-agriculture activities, it is mostly expected
that it had to be increasing in the year 2017 when the level of non-agriculture
activities had increased and finance had become mostly necessary and it was
the best source.
TABLE 4.11

TOTAL INVESTMENT IN (2014-2018)


CHANGES SHOWING IN DECREASE IN
(in rupee) % %
2014 6,09,01,363,00 100% -
2015 15,61,70,515,00 256.43% 156.43%
2016 8,79,97,910,00 144.49% 44.49%
2017 11,99,91,478,00 197.02% 97.02%
2018 16,84,79,115,00 276.64% 176.64%
GRAPH 4.11
GRAPH SHOWNG THE% INCREASE OR DECREASE

TOTAL INVESTMENT IN (2014-2018)
300
250
200
150 Changes in %
Increase/Decrease in %
100
50
0
2014 2915 2016 2017 2018

Interpretation:
The graph shows the state of increase or decrease in the percentage of total
investment. In this graph, the X-axis denotes the year and Y-axis denotes the
changes in% and increase/decrease in % of total investment.
In the above graph showed that there is increasing trend for total investments
in the year 2015 and 2018. This is because there is a downward trend in of
total loans provided. In 2015 and 2018 bank uses its fund more on investments
the graph rather than loans providing. In the years 2016 and 2017 bank
provided more loans and its funds are used less on investments that’s why he
graph showed a downward trend.
TABLE 4.12
TABLE SHOWS THE% INCREASE OR DECREASE OF

NET PROFIT IN (2014-2018)

CHANGES SHOWING IN DECREASE
(in rupee) % IN%
2014 36,98,999.18 100% -
2015 41,27,024.00 111.57% 11.57%
2016 64,91,803.94 175.50% 75.50%
2017 70,08,582.41 189.47% 89.47%
2018 93,74,270.00 253.42% 153.42%

GRAPH 4.12

NET PROFITS IN (2014-2018)
300
250
200
150 changes in%

Increase/decrease in%
100
50
0
2014 2015 2016 2017 2018
Interpretation:
In the above graph shows the state of increasing or decreasing the level of net
profit in SCFSC bank. On the basis the above graph, the net profits of the bank
are increased year by year. The bank is performing well. There is a constant
increase in the net profit graph.
TABLE 4.13
TABLE SHOWING THE % DECREASE INCREASE OR OF

K.C.C CROP LOAN IN (2014-2018)


CHANGES (in SHOWING IN DECREASE IN
rupees) % %
2014 2,53,01,983.00 100% -
2015 2,73,01,983.00 107.72% 7.72%
2016 4,04,87,133.00 159.74% 59.74%
2017 3,75,88,000.00 148.30% 48.30%
2018 2,77,42,000.00 109.45% 9.45%
S0URCE: Balance sheet
GRAPH 4.13

K.C.C CROP LOAN IN (2014-2018)
180
160
140
120
100
Changes in%
80 Increase/decrease in %
60
40
20
0
2014 2015 2016 2017 2018

Interpretation
In the year 2015, the percentage of K.C.C crop loan is increased by 7.72%
compare to the base year. And in the year 2017,the K.C.C crop loan
percentage has come down by 11.44% when compare to 2016 and it is
continuing to reduce in2018 and it is reduced by 38.85%compare to
2017.According to the above trend, I concluded that bank has reduced crop
loan.
TABLE 4.14

MILK LOAN IN (2014-2018)

(in rupees) IN% %
2014 15,20,956.00 100% -
2015 30,73,357.00 202.03% 102.06%
2016 51,33,835.00 333.54% 237.54%
2017 25,24,793.00 166.00% 66.00%
2018 3,72,209.00 -25.47% -75.52%
GRAPH 4.14

MILK LOAN IN (2014-2018)

400
350
300
250
200
150 Changes in%

100
50
0
2014 2015 2016 2017 2018
-50
-100
Interpretation
In the above graph shows the state of increasing or decreasing the level of
milk loan in SCFSC bank. During 2015, the bank had 102.06% are increased
in the milk loan. As it has attracted more customers in the year 2016 and but in
the present year, 2018 it has decreased by 75.52% compared to base year.
TABLE 4.15

MEMBER’S TOTAL AGRICULTURAL LOANS IN (2014-
2018)

(in rupees) IN% %
2014 2,76,94,410.00 100% -
2015 3,07,77,891.00 111.13% 11.33%
2016 4,58,57,468.00 165.58% 65.58%
2017 4,03,49,293.00 145.69% 45.69%
2018 2,83,50,709.00 102.36% 2.36%
GRAPH 4.15
GRAPH SHOWING THE % OR INCREASE OR DECREASE

OF MEMBER’S TOTAL AGRICULTURAL LOAN IN (2014-
2018)
180
160
140
120
100
Changes in %
80 Increase/decrease in%
60
40
20
0
2014 2015 2016 2017 2018
Interpretation
The above graph shows the status of increase or decrease of members total
agricultural loan. During 2015 the bank had 11.33% as the increase in the
members total agriculture loan. As it has attracted more customers in the year
2016 and also in present year 2018, it has increased by 2.36% compared to
base year.

CHAPTER 5
FINDINGS SUGGESTIONS AND CONCLUSION
Findings
 The major findings in SCFSC bank we found that high school

customers are not more in banking operations.
 SCFSC bank is imposed providing credit appraisal system for self
employees much in percentage 48.62% is availed only to self-
employees.
 The major impact on credit appraisal system of bank loan and
customers are satisfied with availing loans with low rate of interest and
easy repayment facility.
 It is observed that the deposits level of SCFSC bank the total deposits
are fluctuating in the year 2017 the total deposits was increased smaller
level.
 The recurring deposits are increasing year by year compare to base
year.
 The saving bank S.H.G deposits decreases in the year 2015 and in the
year 2018 the S.H.G deposits the smaller reduction compare to 2017.
 The salary loan shows decreasing values in the year by year.
 The fixed deposits is increased in the year 2016 and 2018 and in the
year 2017 the fixed deposits shows the smaller reduction compare to
2016 and 2018.
 Mortgage loan are increase year by year.
 The gold loan shows the increasing value in the year 2016 and 2018
and in the year 2017 the percentage(%) of gold loan is have a smaller
decreasing value compare to 2016.
 The S.H.G (own fund) shows the fluctuating the year by year.
 Non-agricultural loans are decreasing in the year 2018.

 The investments are decreases in the year 2016 and 2017 compare to
2015 and 2018.
 The net profit is increasing year by year.
 The KCC crop loan are shows the fluctuating values in the year by
year.
 The milk loan shows the reduction value in the 2018.
 Agriculture loan shows the decrease in the year 2017 and 2018
compare to 2016.
Suggestions
 The SCFSC bank is want concentrate about the deposits like recurring
deposits and fixed deposits by providing a good service to the customer
compare to other banks.
 The bank should provide subsidy on the loans specially on agriculture
loans which will helps to create good reputation and enhance economic
growth in the society.
 The bank should provide the customer advances service such as E-
commerce, tele banking services etc... to the customer it helps to attract
the more and more customers and it helps to increase the profitability of
the bank.
 The bank should increases the short term loans to maximum extent, so
the banks have more possibility to get profit.
 The bank should provide concentrate on availing new and attractive
schemes to the backward sectors.
 The funds borrowed should be utilized and invested effectively, where it
can availed appropriate returns.
 The employment of the bank should be trained to understand the
applications and managements activity.
 The procedure in sanctioning the loan is to be reduced as it is focused
much as on middle class.

 The bank should mainly focused its competitors according to changing

criteria and implement require operations.
 Suggest to adopt an Electronic fund transfer system (EFT), Electronic
clearing system (ECS) in all the branches.
Conclusion
S.C.F.S Co-operative bank limited is a premier sector Indian bank formerly

known as the town co-operative bank limited with heritage of over 3 million
satisfied customers. Started in the date 13/09/1976 as the name of sericulture’s
cum farmer’s service co-operative bank, Hoskote town in the date of
26/02/1998.
The bank will improve its service operations and provide satisfactory an
average annual growth of operational net profit per share of at least 12% due
to the economic downturn and the losses claim relating to attacks on the trade
centre. SCFSC records an increase of 3% in operational net profit per share,
which is considerably below the target. However a longer term basis, SCFSC
continues to meet this target since its creation in on 1991 the annual growth
rate in profit per share has been 13%.
services to the customers in future days that trend will enhance its profitability
has its growth is increasing year to year.

SCFS Cooperative Bank LTD

Загружено:

Сведения о документе

Оригинальное название

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

SCFS Cooperative Bank LTD

Загружено:

Авторское право:

Доступные форматы

A study on Credit Appraisal System at S.C.F.

S Cooperative Bank ltd

Credit appraisal system

Meaning of credit appraisal

It is involved in non-payment of the credit obtained by the customer of the

 It is assessment of the viability of proposed long term investment in

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 1

 Need ,targeting and objectives

Key issues in appraising project include the following.

 Need, training and objectives:

The starting point of appraisal: application should provide a detailed

Option analysis is concerned with establishing whether there are different

 Outputs and outcomes:

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 2

Credit Appraisal takes care of

 Borrower’s ability to complete the project and its intention to re-

Importance of credit appraisal

 Credit planning and controller at the macro level.

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 3

 Reduces risk involved in the loans provided for a project.

The five Cs of credit appraisal

Each of these Cs is used to ascertain the risk of default

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 4

A home loan is availed of against a security or collateral. If the borrower is

 Sources of fund lending

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 5

Banks offers different kinds of borrowing facilities to their customers the

Banks offer different kind of borrowings to their customers. The credit

In case of loans, banker advances a lump sum of a certain period on agreed

 Cash credit system:

A cash credit is an arrangement by which the customers is allowed to borrow

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 6

Overdraft is an arrangement between the banker and his customer by which

Bills, clean or documentary, are sometime purchased from approved

Prospecting is identifying the right customer borrower who is in need of a loan

 Pre- approval and documentation:

Sales team will be assessing the applicant details to check whether it is

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 7

Loan officer/credits officer will evaluate the applicant documents based on

 Post disbursal evaluation:

Auditing and post disbursal evaluation will be conducted through the

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 8

INDIAN BANKING SYSTEM:

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 9

 Public sector Banks:

 Private sector Banks:

It is an important segment of the organization sector of Indian banking is the

Development Banks are those financial institutions, which provide long-term

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 10

 In 19 July 1969 the government, nationalized 14 major banks with

Co-operative movement in India

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 11

In order to cover Co-operative societies with membership from that one

After Independence, Co-operative assumed a great significance in poverty

CO OPERATIVE CREDIT INSTITUTION

Rural- co-operative Credit institution Urban co-operative Banks

Short term Long term

Agriculture & Rural

REVA UNIVERSITY, SCHOOL OF COMMERCE Page 12

Co-operative movement in Karnataka

Formation of a Co-operative society

Different types of Co-operative society

Primary Agriculture Credit Societies: