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CHAPTER-1
INTRODUTION
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.
Options:
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.
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.
Advantages
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 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
Secured or unsecured
Cash credit
Demand loans
Term loans
Bills discounted
Forms of credit
Loans:
Overdraft:
Bills purchased:
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:
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:
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.
CHAPTER 2
COMPANY PROFILE
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.
State bank of bank associate bank called the state bank group,
Twenty nationalized banks.
Regional rural banks mainly sponsored public banks.
Co-operative sector
It has been developed in the country to supplement the village money lender.
Development 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.
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.
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.
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.
This is main cooperative bank in every state that runs and lends money
all the central cooperative banks in that state.
Whole State comes under its jurisdiction and it advance loans to primary
cooperative Agriculture and rural development banks.
These banks operate in urban areas and accept deposits from the public
and also advance loans to them.
2. Rural cooperative
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
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
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.
5. Traditional importance.
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.
Open membership
Voluntary organization
State control
Sources of finance
Democratic management
Service motives
Number of members
Equality of the essence Co-operative undertaking. Each member has one vote,
irrespective of the number of shares held by him.
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.
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
Introduction
To help inculcating banking and saving habits among the rural peoples.
Registered numbers
Service area
Activities
Vehicle loan
gold loan
pledge loan
Milk loan
Salary loan
CTD doubling
CTD 10 years
Canara Bank
Vijaya Bank
HDFC Bank
Syndicate Bank
Karnataka Bank
President
Vice president
Director
Managers
Officers
Attenders
Shri. Rajanna
2013-14 4325
2014-15 4423
2015-16 3378
2016-17 4505
2017-18 4603
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.
2013-14 2520.84
2014-15 3893.97
2015-16 3858.49
2016-17 4288.73
2017-18 4063.08
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.
1) Facility purpose
3) Facility type
4) Unsecured loans
Eligibility
Self-employed professionals
Self-employed individuals/proprietorship
Loan range
Program range
Corporate tie-up
Tenure
Fees
Age
Interest rate
SCFSC products/services
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
Personal loan
Trip agreement with borrower consult dairy and bank (for supply of
milk and loan repayment purpose)
Insurance coverage
Tractor loan
Insurance coverage
Pledge loan
KVP-80%
SHG&SSHG
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.
Opportunities
Skilled workforce means that they can be moved and trained into other
areas of the business
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.
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.
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.
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.
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.
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.
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
3. LI JIANJUN
RESEARCH METHODOLOGY
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.
bank.
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.
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.
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.
Data collection
Secondary Data :
Secondary data are the types of data. These secondary data are those data
which are already being collected by someone.
b. Books
c. Websites
Limitations of study
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.
Published papers
Text books
Journals
News papers
CHAPTER 4
Data Analysis
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
GRAP 4.1
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
GRAPH 4.2
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
GRAPH 4.3
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
GRAPH 4.4
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
GRAPH 4.5
150
100
50
Changes in%
Increase/decrease in%
0
2014 2015 2016 2017 2018
-50
-100
Interpretation:
TABLE 4.6
GRAPH 4.6
400
350
300
250
200 Changes in %
Increase/Decrease 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
GRAPH 5.7
500
450
400
350
300
250 Changes 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
GRAPH 4.8
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
GRAPH 4.9
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
GRAPH 4.10
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.
TABLE 4.11
GRAPH 4.11
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
GRAPH 4.12
300
250
200
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
GRAPH 4.13
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
GRAPH 4.14
400
350
300
250
200
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
GRAPH 4.15
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
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.
Conclusion