A PROJECT REPORT ON STUDY OF LOANS & ADVANCES IN CO-OP.

BANKING SECTOR
AT

THE THANE JANATA SAHAKARI BANK LTD. SUBMITTED BY

Mr.Ganesh S. Dayma

SUBMITTED TO

Dr. Babasaheb Ambedkar University,Aurangabad

IN PARTIAL FULFILLMENT OF 2 YEARS FULL TIME COURSE M.COM. II
(BATCH 2012-2013)

UNDER THE GUIDANCE OF

Prof. Rathi Madam

Swami Ramanand Teerth Mahavidyalaya Ambajogai

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ACKNOWLEDGEMENT
The project is never an individual effort. It is contributory effort of many hearts, hands & brains. For the completion of this project. This project would not be possible if not aided by few kind souls. First & foremost I would like to take this opportunity to thank The Thane Janata Sahakari Bank Ltd. Pune for giving me such opportunity to do this project in such esteem organization.

I would also like to thanks Mrs Rathi Madam, (Project Guide) & all other faculty members for providing valuable suggestion in preparing my project without them this project would not have been possible.

DATE: -

/2013

Mr. Ganesh Dayma (M.Com II)

PLACE: - Ambajogai

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INDEX:SR. NO. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Introduction Objective of the study Company Profile Review of Literature Research Methodology Data Analysis and Interpretation Limitation of the Study Findings Suggestions Conclusion PARTICULAR PAGE NO. 4 8 10 16 44 47 56 57 58 59

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INTRODUCTION

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INTRODUCTION

A period of less than a year. Under the loans system, the loan amount is given to the borrower normally in one installment and further drawings in the loan account are permitted. The amount is given for a predetermined period. Normally loans are repayable in installments. Funds are required for single non-repetitive transaction. As the period of repayment of the loan or its installments ate fixed in advances, the loans system ensures greater degree of discipline on the part of the borrower. Interest on the full amount of the loan is available Banking system occupies in an import ant place in every nations economy. A good banking system with strong banking institutions is indispensable for the economic growth of a country. In India, we have an organized banking structure comprising Co-op. banks and private scheduled / non-scheduled banks, foreign banks, commercial and co-operative banks, development banks etc. This complex structure has developed over a period of last 150 years. The objectives and methods of working of banks have undergone significant changes. In the case of Co-op. banks, it was necessary to pass laws in order to control their irregularities and mushroom growth. However, in the case of Co -op bank it was found necessary to make legal provisions so that the bank will be encouraged to come into existence. After doing this project I have come to know that now a days banking sector or any financial institute plays very important role in the society. As in this topic we can see the various types of loans and what is the procedure for sanctioning the loan. Loan constitutes the major form of intermediate term financing. Unlike short-term loans, which are self-liquidating over able to the bank under this system and it is, therefore, profitable from the banks point of view

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 IMPORTANCE OF THE TOPIC:Banking system occupies an important place in every nations Economy. Good banking system with strong banking institutions is Indispensable for the economic growth of a country. In India, we have an organized banking structure comprising Co-op banks and private scheduled / non-scheduled banks, foreign banks, commercial and co-operatives, development banks etc. This complex structure has developed over a period of last 150 years. The objectives and methods of working of banks have undergone significant changes. In the case of commercial banks, it was necessary to pass laws in order to control their irregularities and mushroom growth. However, in the case of banks it was found necessary to make legal provisions so that the national banks will be encouraged to come into existence. Generally the banks grant loans against different types of securities like fixed deposits, shares, goods, machineries etc. Certain special precautions have to be taken while granting the loans. Term loans is emerging as an important source of business financing in recent years because of added advantage of easy availability of the loan, its cheapness and flexibility. A firm with assured credit for a stipulated period of time can go ahead with plans and projects benefiting the firm. Since the terms of the outcome direct negotiation between the lender and the borrower, the same can be tailed to satisfy the needs of the borrower. Furthermore, term loan is available quickly and at less expense as compared to public issue of debentures. If a firm decides to float debentures of loan funds from the market, it must seek the permission of SEBI, prepare prospectus and registrations statement and file with Registrar of Joint Stock Companies and allot debentures to then applicants. All this ~6~

costs to the firm about 3% of the borrowing amount. This can be avoided in bank terms loans. A Bank is an institution, which is engaged in the business of accepting deposits and giving loans & Advances. Bank accepts deposits from various peoples, institutions that have surplus funds and advance the loans to those who need them. Thus, the main function of bank is to accept deposits by mobilizing the savings and give loans & Advances to needy people for different purposes. There are different definitions stated by different authorities, which make the nature and important functions of bank very closer.

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OBJECTIVES OF THE STUDY:The aims and objectives of the study can be summarized under the Following points. 1. The aim of the study is to analyze the different types of loans and studying the procedure of granting the loans. 2. To secure information regarding the documents required for acquiring the loan 3. To analyze the education loan scheme in respect of eligibility, quantum of finance, security, interest rates, repayment, etc. 4. Aim of the study is to understand the concept of loan under Co-op banking sector in the small places. 5. The mail objective of the study is to analyze and interpret the data which has given through financial statements and through the annual financial report of the bank. 6. This study is required for every shareholder, who is the real owner of the organization. The shareholder should know how the items in the balance sheet are varying and inter relationship with other components in the statement. 7. The aim of the study is to analyze the different types of loans and studying the procedure of granting the loans. 8. To secure information regarding the documents required for acquiring the loan 9. To analyze the education loan scheme in respect of eligibility, quantum of finance, security, interest rates, repayment, etc. 10.Aim of the study is to understand the concept of loan under Co-op banking sector in the small places.

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11.The mail objective of the study is to analyze and interpret the data which has given through financial statements and through the annual financial report of the bank. 12.This study is required for every shareholder, who is the real owner of the organization. The shareholder should know how the items in the balance sheet are varying and inter relationship with other components in the statement.

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COMPANY PROFILE

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INTRODUCTION TO ORGANISATION:-

The Birth Registered on 04th Feb 1972 with an authorized capital of Rs 10.00 lakh and commenced business on 8th Feb 1936. The Childhood Known as a common man's bank since inception, its initial help to small units has given birth to many of today's industrial houses. After nationalization in 1969, the bank expanded rapidly. It now has 1421 branches all over India. The Bank has the largest network of branches by any Public sector bank in the state of Maharashtra. The Adult The bank has fine tuned its services to cater to the needs of the common man and incorporated the latest technology in banking offering a variety of services. Organization vision To be a vibrant, forward looking, techno-savvy, customer centric bank serving diverse sections of the society, enhancing shareholders and employees value while moving towards global presence.

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The Deepmal With its many lights rising to greater heights.

The Pillar Our institution- Symbolizing strength. The Diyas Our Branches- Symbolizing service.

The 3 M's Mobilization of Money Modernization of Methods and Motivation of Staff. Organizations Aims:-

The bank wishes to cater to all types of needs of the entire family, in the whole country. Its dream is "One Family, One Bank, Bank of Maharashtra ". The Autonomy:The Bank attained autonomous status in 1998. It helps in giving more and more services with simplified procedures without intervention of Government. Our Social Aspect:-

The bank excels in Social Banking, overlooking the profit aspect; it has a good share of Priority sector lending having 38% of its branches in rural areas. ~ 12 ~

Other Attributes: Bank is the convener of State level Bankers committee. Bank offers Depository services and Demat facilities at 131 branches. Bank has a tie up with LIC of India and United India Insurance Company for sale of Insurance policies. All the branches of the Bank are fully computerized. Its Quest for excellence through exploring new horizons Banking.

The bank has been committed to its quality policy which is to strive to meet the expectations of their Customers, to be reliable provider of their services and facilities in respect of several schemes launched by the bank. Due to its wide scope and spectrum I looked forward towards the opportunity to work with the bank as a summer trainee. It is my privilege having achieved the same. With the presence of a well established management and supportive and cooperative employee network, I could perform my study successfully at the bank.

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ACHIVEMENTS: Date of Establishment of Bank Date of Commencement of Business First Branch Open at Bajirao Road, Pune 100th branch opened at Swargate, Pune Nationalization of bank along with 13 other Major Banks 500th branch opened at Allahabad 500th opened in Maharashtra state (Nariman point, Mumbai) 100th branch opened in Madhya Pradesh (sehore) 100th branch opened in Pune district (Kale colony, district-Pune) 1000th branch opened at Indri Vaasa, Pune Banks IPO opened for subscription of 10 core Equity shares at a premium of RS.13/- each (Over subscribed 10 times) Listing of banks shares on stock exchanges Bank entered into an agreement with Western Union Money Transfer to enable NRIs to remit Funds from abroad to India

: 16.09.1935 : 08.02.1936 : 06.02.1936 : 17.12.1965 : 19.07.1969

: 21.06.1977 : 14.05.1980

: 10.03.1983 : 12.03.1983

: 27.12.1987 : 25.02.2004

: 12.04.2004 : 21.10.2005

Banc assurance (non-life) launched for selling Non-life insurance products of united India Insurance co. ltd. ~ 14 ~

: 18.05.2006

 Banc assurance (life) launched for selling Life insurance products of life insurance corp. Of India. Bank tied-up with Franklin Templeton Mutual Fund for selling mutual fund products Bank surpassed Business landmark of RS. 50000 crores

: 26.07.2006

: 05.10.2006

: 01.12.2006

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REVIEW OF LITERATURE

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Definition of Bank:Definition by the Indian Regulation Act 1949:

This act defines a banking company under section 5c as a company, which transacts business of banking. This definition makes it clear that bank can be defined only with reference to the business, which goes with the term banking. The act also define the term banking in section 5b according to which Banking means acceptance, for the purpose of lending or investment of deposits of money from public repayable on demand or otherwise, withdrawal by Cheques, Draft or order.

Definition by Prof. R. S. Sayers:A Bank is an institution whose debts, usually referred to as bank deposits are commonly accepted in final settlement of other people debts.

Origin of the concept of Banking:We have understood the meaning & scope of the term Bank in the light of the various functions that a bank performed today. But the present character of a bank has evolved through time. It is therefore, necessary to follow this process of the evolution banking. According to one view, the English word bank owes its origin to the Italian words Banco, Bancus, Banque or Banc. All these words means a Bench upon which the mediaeval European moneylenders & moneychangers used to display ~ 17 ~

their coins. The Jews in Europe practiced this business. These Jews possibly flourished most in Italy in the early years; & hence the Italian word came into vogue. In England, Banking as an independent business dates back to the fourteenth century. In those days the Jews of Lombardy, in England used to transact their business on benches at market places. One can further point to a historical fact in support of this view. When a banker was unable to meet his obligations to his customers, according to the custom, his banco. Were destroyed or broken to pieces. Hence, the word Bankrupt was derived. Thus it appears that the word bank is derived from the Italian words Banco, Bancus etc. Here are others however, who trace the word bank is derived from the Italian word Monte, which means a mound or a heap. This word implies that one requires a heap of money for carrying on the banking business. We are obviously not interested in the controversy over the etymology of the word bank. We are interested in the origin of banking & whichever view is accepted, the fact remains that this derivation takes banking back to the Middle Ages.

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Classification of Bank :Bank can be classified on different basis clarity demand that the basis of classification should be determined first & then classifications should be made. On the basis of direct dealing with the public, banks can be divided into central & other banks. Banks are also divided on the basis of their day to day transaction means as per heavy transaction they are classified under particular categories.

A] Central Bank:In the banking system of any country, there is a central bank & a number of other types of banks. Central banks are different from all the other types of banks. All the distinctive features of a central bank are a partly & precisely summarized in this quotation. A central bank has the monopoly of note-issue. It acts as bank to the government. It acts as a friend, philosopher & guide to the entire bank in the country. Regulation & control of credit is an important responsibility of a central bank. Thus, the central bank is an apex institution, which stands out as the supreme bank above all other banks. A central bank does not directly deal with public. It does not accept the public deposits; nor does it grant loans to individuals. Indirectly, it can help agriculture, industry, and etc. by augmenting the resources of the other banks.

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B] Commercial Banks:Commercial banking is, by far, the most important type of banking, so much so that the term bank unqualified by any objective, is taken to mean a commercial bank. Like any other, receipt of deposits & provision of credit are primary functions of a commercial bank. However, the major part of the working capital with a commercial bank comes from public deposit. This is why commercial banks are called deposit banks, because commercial banks have a commitment to return the deposits as & when required by the deposits they provide mainly short-term credit. Thus, for example, British banks do not provide industrial credit, but Japanese commercial bank provides it. Indian commercial banks are playing an increasingly important role in agricultural credit. Thus though commercial banks are basically deposit banks normally providing only commercial credit, they also called as investment banks, saving banks, etc.

C] Industrial Banks:Industrial banks as the term indicates specialize in industrial finance. Modem industries require long-term credit for the exaction of factories & plants. They also require medium-term loans for the purchases of equipment, import of spares & so on. The function of making long term investment is left to investment banks .which is another name for industrial banks. Industrial credit also requires different types of banking expertise. An industrial bank maintains this expertise & specialized in this type of activity Thus the role played by industrial banks is very important in planning, promoting & developing industrial units.

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D] Agricultural banks:Financing of agricultural poses special problem. The credit needs of agriculture are three folds:

1) Short term 2) Medium term 3) Long term

1) Short-term credit: Short-term credit is requires for carrying out the day in day agriculture operations and for the purchase of manure, seeds, etc. 2) Medium term credit: Medium term credit serves the purpose of buying cattle, etc. 3) Long term credit: Long term credit is require for purchase of agriculture machinery, for effecting permanent like digging wells, leveling land etc. & for buying additional land.

Since agriculture is followed as personal or family occupation, the loan virtually becomes a personal loan. But many times, as in India, the credit worthiness of an agriculturist is limited.

E] Co-operative banks:Co-operative bank means a state co-operative bank, a central co-operative society. The primary object of which is to provide financial accommodation to its members & includes a co-operative Land Mortgage Bank. Director, in relation to co-operative society, includes a member of any committee or body, for the time being wasted with the management of the affairs of their society. Primary agricultural credit society is distinguished from other societies in that it finances ~ 21 ~

agricultural purpose. Primary co-operative bank means a co-operative society carrying out banking with a paid-up capital reserve of more than one lack. With less than one lack it becomes primary credit society.

F] Exchange banks:Just as a trader needs a credit in internal trade, they need it in international trade as well. The traders in the field of international trade are import & export trade. They provide facilities for the remittance of money from one country to another country. They discount bills of exchange, which arise in international trade. They also issue letters of credit. Due to the nature of exchange banking some very big banks dominates this field. These banks have branches in all the important centers of the world. Now a day, however commercial banks are also participating in the foreign exchange business in India.

H] International Banks:International banks are a class by themselves. the fun timing of these banks , unlike that of all other banks enumerated so far , is on an official level in the sense that the government of various countries are involve in their formation , working & control. G] Consumer banks:Consumer banks came in to existence in the U.S.A they became popular these & then spread to other advance countries, these banks provide credit to consumer for buying car furniture & other durable consumer goods. Credit for housing is an important aspect of these banks. People can borrow money a long term basis from these banks for purchasing or constructing houses. The repayment of is spread over a long periods in easy monthly installment. ~ 22 ~

THEORY RELATING TO TOPIC:Under the loans system, the loan amount is given to the borrower normally in one installment and further drawings in the loan account are permitted. The amount is given for a predetermined period. Normally loans are repayable in installments. Funds are required for single non- repetitive transactions. As the period of repayment of the loan or its installments are fixed in advances, the loans system ensures greater degree of the loan is available to the bank under this system and it is, therefore, profitable from the banks point of view. Loans are given short, medium and long term basis according to the purpose of the loan. Short term loans are up to a period of 15 months. Medium term loan are up to the period of 5 years. As the borrower gets a lump-sum he is able to purchase consumer articles like TV, fridge, vehicle or a flat for his residence. Installments are fixed for repayment of the loans on the basis of repaying capacity of the borrower. As loans are given only once, and no further drawings in these accounts are permitted, the management cost of loans is less. At times loan amount is made available to the borrowers in installments as per the programmed of this project and till the full amount is drawn by him, repayment installments are not fixed. For examples, if a loan is given for the constructions of the house, the loan amount is released in installments taking into account the progress of constructions. This procedure ensures that the loan amount is used for the purpose for which it is sanctioned. Term loan constitute the major form of intermediate term financing. Unlike short-term loans are given for a period of more than one year but less than ten years. Such loans are generally employed to finance more a permanent portion of working capital requirements. As a result, most of these loans are paid in the regular and periodic installments, through there are exceptions to the rule. Term loan may take form of an ordinary loan or a revolving credit. In ordinary term loan the lender lends funds as per the agreement outright for a period of more than a year and up to ~ 23 ~

ten year. A revolving credit, on the other hand, is a formal commitment by a lender to lend up to a certain amount of money to a concern over a specified period of time. This is thus a guaranteed time of credit where by the lender agrees to lend the money on demand in a future period, frequently for two to three years.

MATURITY:Term loan bear a maturity period of more than one year but not more than ten year. In India commercial banks generally grants term loans mostly for a period of five to seven years.

PURPOSE:-

Term loans are sought for financing core portion of working capital, minor additions to stock of plant and equipments and research and development activities. Term loans are also used for meeting all expenses, including those for repairs, replacement of equipment and others due to modernization of the plant.

COLLATERAL:-

Term loans are more frequently secured than short term loans due to greater risks involved in term lending. Term loans are usually secured against mortgage secured loans does not exceed the appraised value of the property. In India, commercial banks and the other financial institutions are subject to regulations imposed by the Reverse Bank of India which limit these mortgages to certain specified portion of the appraised value of the property.

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Different Types of Loan

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 Educational Loan:-

Who is eligible?

Students enrolled with an approved educational institute and desirous of availing the education loan can make an application, with the earning parent/guardian being the co-applicant to the loan. Currently, new entrants and existing students of only selected leading national educational institutions are eligible to apply for education loans.

Terms & Conditions:-

Loans are given to students who are citizens of India. The student should have a consistently good academic record, and admission to an approved educational institute for pursing a recognized course. Loans can be availed up to a maximum of 90% of the total cost as determined by Maharashtra Bank. The costs would generally cover expenses incurred towards the course fee, library charges, hostel and mess charges, cost of books and equipment. Maharashtra Bank lends up to a maximum of Rs 7,50,000 (studies in India) & Rs.15,00,000(studies outside India) on an educational loans.

The repayment period of the loan is determined on the merits of each case but would not exceed 5 years. The repayment can be accelerated on completion of the

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course, considering the earning capacity of the student. Maharashtra banks main concern is to help individuals comfortably repay the borrowed amount. You repay the loan in Equated Monthly Installments (EMI) comprising principal and interest. EMI commence three months after the completion of the course Pending commencement of EMI, you pay simple interest on the portion of the loan disbursed. This is payable every month from the date of each disbursement up to the date of commencement of EMI. This interest is called preEMI interest. Prepayment of the loan in full or parts is possible. In the event where the student plans to leave the country for any reason, the loan would generally be required to be in full, however, the same would be considered on a case-to-case basis depending on the merits of each case and on such terms as May required. The security for the loan would normally comprise personal guarantees and such other security acceptable to Maharashtra bank.

MARGIN:-

No margin up to For loan above

: Rs. 4.00 lakhs : Rs. 4.00 lakhs

For studies in India For studies outside India

:5% : 15%

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Rate of Interest: Up to 4.00 lakhs- BPLR at present 12.00%p.a Above 4.00 lakhs- BPLR +1 at present 13.00%p.a

PROCESSING FEE:-

0.50% of Loan amount with a cap of Rs.10,000/-(including Service Tax)

MAXIMUM REPAYMENT PERIOD: For applicants up to 45 years of age: 25 years For applicants over 45 years of age: 15 years

SECURITY:

No security up to 4.00 lakhs Above 4.00 lakhs & 7.50 lakhs collatereral in the form of third party Equitable mortgage of the property 2 additional guarantors acceptable by bank. How to apply:-

The loan application forms are available at your nearest Maharashtra Bank office. The completed application form, together with all supportive documents, needs to be submitted through your Educational Institute. Maharashtra bank will make inquiries as are necessary or call the applicant for a discussion. ~ 28 ~

The loan would be disbursed in suitable installments on the compliance of necessary formalities such as providing personal guarantees; execution of loan documents etc. further, disbursement of the loan would also be subject to review of progress reports from the concerned Educational Institute.

Consumer Loan:Finance your consumer goods purchases with the Maharashtra Bank consumer loan The consumer loan will facilitate the purchase of a wide range of consumer durables like TVs washing machines, refrigerators, air-conditioners, pcs branded furniture, new two wheelers and new cars. In addition, the loan can be also be used to refinance a purchase made in the last six month and/or to repay an outstanding car/two wheeler/consumer durable loan taken from any other institution or bank. To top it all, the Maharashtra bank consumer loan can be used to purchase more than one product and can be availed over a period of time.

Terms & Conditions:Maharashtra banks consumer loans are easy to apply for and repayable in comfortable monthly installments all the applicants of the housing loan availed from Maharashtra Bank, (including co-applicants) are required to apply for the consumer loan if they wish to also take this loan.

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Amount:-

Loans can be availed up to 100% of the cost of the products. Maharashtra Bank will determine the loan amount based on the repayment capacity of the individual. Maharashtra banks main concer n is to help individuals comfortably repay the borrowed amount.

Fees:An administrative fee of 0.30 % of the amount disbursed is payable at the time of & Minimum Rs 100/-, Maximum Rs. 300/However, the administrative fees are being waived for loans disbursed before March 31, 2009.

Rate of Interest and Repayment Term:-

Prepayment:-

You can repay your loan ahead of schedule. In the case of a consumer durable/ two-wheeler loan, you can prepay only the entire loan amount. In case of a car loan, you may make a part prepayment (subject to minimum amount of 25% of the outstanding loan amount). There is a charge of 9.25% payable only if the loan is prepaid within one year from the date of disbursement.

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Security for loan:-

Security for the consumer loan will be the extension of the existing security on your housing loan. In case the current value of the security is not adequate, then you may be required to provide to provide additional security.

How to apply:Its simple! You can get the application form by head office of Maharashtra Bank. Alternately, you can collect the application from any of your nearest branch of Maharashtra bank in Nasik district. You need to submit the application form along with the supporting documents.

Supporting Documents to be attached:-

With the application form: 1. Proof of ID having your photograph 2. latest salary slip/certificate (if employed) 3. latest balance sheet, P&L account and income-tax return (if self-employed) 4. clean loan to be guaranteed by 1 acceptable guarantor

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At the time each disbursement:-

1. Applicable administrative fee 2. Proof of ID having your photograph 3. Copy of perform invoice(s)

After each disbursement:-

1. Copy of final invoice(s) 2. Copy of registration book (for two-wheelers and cars only)

Home Loan:Terms & Conditions:-

Home loans offers you various unique benefits and are easy to arrange and repayable in easy monthly installments. The term of the loan can be structured according to your unique requirements. Home loans can be applied for by either individually or jointly. Proposed owners of the property, in respect of which the loan is being sought, will have to be co-applicants. However, the co-applicants need not to be co-owners. Loans can be availed up to a maximum of 85% of the cost of the property (Including the cost of the land) on a home loan to an individual. You can repay the loan over a we will determine the loan amount after evaluating the repayment

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capacity of the individual. Maharashtra banks main concern is to help individuals comfortably repay the borrowed amount.

Fees:-

A processing fee of 15% of the loan amount applied for i.e. up to Rs.5,00,000 RS. 1000/- of the loan applied for is payable when the application forms submitted to the bank. This fee is in respect of costs incidental to the application. For example:

Loan applied for RS.5,00,000

Fees RS. 1000/-

On approval of the loan, a loan offer is made to you. On acceptance of the offer, you will have to pay an administrative fee of 2% of the loan approved. You can also pay the processing fee and administrative fees upfront i.e. 1% of the loan at the time of submission of the loan application itself. Rate of Interest:-

The current applicable fixed rate of interest in respect of the total loan approved is are as follows.

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Annual Rest Option:-

Term of Loan (No. of years) Up to 5 6-10 11-20

Rate of Interest (%p.a.) 9.00% 9.50% 9.75%

You repay the loan in Equated Monthly Installments (EMI) comprising principal and interest.

RS. EMI per 1, 00,000 for Annual Rest Option Term of loan (No. of Years) 5 10 20 Rupees 2416 1208 604

Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest.

Security for the loan:Security for the loan is a first mortgage of the property to be financed, normally by way of deposit of title deeds and/or such other collateral security as may be necessary. Interim security may be required, if the property is under construction.

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How to apply:Its simple! You can get the application form by the bank itself or form any of its branches. You need to submit it along with supporting documents and the processing fee at any head office of the bank or to any branch that convenient to you. You can make payments by cheque marked Payees account only drawn on a bank in a city where Maharashtra bank has an office, by demand draft (payable at par to Maharashtra bank) or by cash. You can make an application at any time after you have decided to acquire a house, even if the house has not been selected or the construction has not commenced. Maharashtra bank will consider your application, make enquires as it deems necessary and convey its decision to you. On acceptance of the offer, you will have to pay an administrative fee for the loan approved. You can take disbursement of the loan after the property has been technically appraised, all legal documentation has been completed and you have invested your own contribution in full (own contribution is the total cost of the property less Maharashtra bank loan). The loan will be disbursed in full or in suitable installments (normally not exceeding three in number) taking into account the requirement of funds and the progress of construction, as assessed by Maharashtra bank and not necessarily according to a builders agreements.

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DOCUMENTS REQUIRED FOR HOME LOAN: Completed application form. Passport size photograph. Proof of Identity PAN Card/ Voters ID/ Passport/ Driving License. Proof of Residence Recent Telephone Bill/ Electricity Bill/ Property tax receipt/Passport / Voters ID. Proof of business address in respect of businessmen/ industrialist

Supporting Documents to be attached

a) Common for all applicants:-

1. Allotment letters of the national bank/ associations of apartment others. 2. Copy of approved drawings of proposed construction/ purchase. 3. Agreement for sale/ sale deed/ detailed from architects/ engineers for the property to be purchased or conducted. 4. If you have been in your present employment / business or profession for less than a year mention details of occupations for the previous 5 years, giving position held, reasons for change and period of the same. 5. Application processing fees. 6. Any other information regarding your repayment that is necessary and will assist Maharashtra bank in appraising the case. 7. Passport size photograph for security purpose.

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Additionally

If You Are Employed:-

1. Latest salary slip/salary certificate showing all deductions. 2. If your job is transferable, permanent address where correspondence relating to the application can be mailed. 3. A letter from your employer agreeing to deduct monthly installment towards repayment of the loan from your loan salary. This will expedite the processing of your loan application

If You Are Self-Employed: Balance Sheets and Profit & Loss Accounts of the business/ profession along with copies of individual income tax returns for the three years certified by a Chartered Accountant. A note giving information on the nature of your business/ profession, from of organization, clients, suppliers, etc.

Home Equity loans:With an Maharashtra bank Home Equity Loan, you can cash your investment in a dwelling unit without having to dispose it off. The end usage of the funds will not be monitored by Maharashtra bank. However, the funds should not be used for speculation or any illegal purposes. Loans can be advanced against any ~ 37 ~

freehold or leasehold properties that have a clear marketable title. Loans can be repaid on an EMI basis or on a simple interest basis. Moreover, the loan shall be approved only in respect of units that are self occupied; units which are rented out are not covered under this scheme.

Terms & Conditions:Maharashtra banks Home Equity Loans are easy to arrange and repayable in easy monthly installments. The terms of the loan can be structured according to your unique requirements. Home Equity Loans can be applied either individually or jointly. Owners of the current property, in respect of which the loan is being sought, will have to be co-applicants. However, the co-applicants need not be co-owners. Maharashtra banks technical officers at the branch offices would ascertain the market value of the unit. Valuations could also be carried out by government approved value/ external agency acceptable to/ recommended by Maharashtra bank. Loans can be availed up to a maximum of 40% of the market value of the property (including the cost of the land). You can repay the loan over a maximum period of 5 years for a loan on an EMI basis and 2 years for a loan on a simple interest basis. We will determine the loan amount after determining the repayment capacity of the individual. At Maharashtra bank, our main concern is to help individuals comfortably repay the borrowed amount.

Fess:A processing fee of 2% of the loan amount applied for, i.e. Rs. 20 per Rs. 1000 of the loan applied for, is payable when the application form is submitted to Maharashtra bank. This fee will cover the valuation fee for valuations undertaken. ~ 38 ~

In case of closures/cancellations, the processing fee less valuation fee would be refunded. No refund is entertained in case the valuation fees exceed the processing fee.

Rate of Interest Annual Rest:-

The rate of interest on the home equity loan (simple interest) on a fixed rate basis is 12.00% p.a. while the interest on home equity loan (EMI) on a fixed rate is 11.00% p.a.

Monthly Rest:The rate of interest on the home equity loan (simple interest) on a fixed rate basis is 12.00% p.a. While the interest on home equity loan (EMI) on a fixed rate basis is 11.00% p.a. Maharashtra bank wills advances funds in the form of a term loan. The loan will be repayable by way of (EMI) comprising principal and interest. Pending final disbursement, you pay interest on the portion of the loan disbursed. This interest is called pre-EMI interest. However, in case loans with simple interest rates, the principal repayments would be in equal quarterly installments with interest payments being made on a monthly basis. Post-dated cheques for repayment of loan will be required in all cases. No early redemption charge would be charged if the loan is prepaid ahead of schedule.

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Security for the loan:-

Security for the loan is a first mortgage of the property against which Maharashtra bank has advanced the loan. In addition, Maharashtra bank may request for additional/interim/collateral security. Liquid securities in the nature of shares, fixed deposits etc. may be accepted as additional securities on a selective basis.

How to apply:Maharashtra bank will consider your application, make enquiries as it deems necessary and convey its decision to you. On approval of the loan, a loan offer is made to you. On acceptance of the offer, you will have to pay an administrative fee for the loan approved.

Supporting Documents to be attached For approval of loan a) Common for all applicants:-

1. Allotment letter of the national bank / associations of apartment owners. 2. Agreement for sale /sale deed for the property. 3. If you have been in your present employment/ business or profession for less than a year, mention details of occupation for previous 5 years, giving position held reasons for change and period of the same. 4. Applicable processing fees. 5. Any other information regarding your repayment capacity that is necessary and will Assist Maharashtra bank in appraising the case. ~ 40 ~

b) Additionally If you are Employed:-

1. Latest salary slip/salary certificates showing all deductions. 2. If your job is transferable, permanent address where correspondence relating to the application can be mailed. 3. A letter from your employer agreeing to deduct the monthly installments towards repayment of the loan salary. This will expedite the processing of your loan application.

If you are Self-Employed:-

1. Balance sheets and profit & loss accounts of the business/profession along with copies of individual income tax returns for the last three years certified by C.A. 2. A note giving information on the nature of your business/profession, form of organization, clients, suppliers, etc. 3. Please take photocopies of all documents that are submitted to Maharashtra bank (including the application form) for your personal record.

4. Personal Loan:-

These loans are generally granted without obtaining any specific from the borrower. However, the bank may ask for the security if it feels it necessary to do so in the case of borrowers with a financially weaker status. The following procedure and precautions are normally taken. ~ 41 ~

Who is eligible?

1. The prospective borrower should have dealings with the bank for a period of at least 3 years or more. 2. The loan should be guaranteed by two independent guarantors (who should be Members or nominal members). 3. The borrower and guarantors should be working or serving in the area of operation of the branch. 4. Where necessary, the bank may ask the borrower to furnish adequate security by way of gold ornaments, shares, life policies etc.

Security: If necessary the bank may order for good security in that case the borrower should give the security.

Guarantors: For personal loan the borrower should have minimum two guarantors with him/her. These people should be member or the nominal member of urban bank.

Limitation: Normally, loans for consumption purpose should not exceed an amount of RS.50000/-. For other purposes, the limit may be fixed at RS.200000/- depending on the purpose of the advance. If the borrower is an employee of any institution, the maximum loan amount should not normally exceed 5 times his monthly total emoluments. If he has any other source of income a larger, amount of advances could be considered. ~ 42 ~

The loan should be repaid within a period of 3 to 5 years in monthly installments. If advances are granted by way of cash credit, the limit will have to be renewed every year. Rate of interest:

The rate of interest will be governed by the directives, if any, I issued by the Reserve Bank of India from time to time. The interest will be calculated on daily product basis and debited to the borrowers loan account in March, June, September and December. If it is not paid within month, the bank may charge penal interest at 2% over the normal rate of interest both for overdue installment and interest. BPLR+ 2% i.e. 14% p.a.

Other conditions:

The borrower should utilize the loan amount for the purpose for which it is granted and may be asked to provide a proof of having done so if the borrower has taken a loan from any other bank or institution, normally no loan may be granted. However, if the other institution gives a No Objection Certificates and if the bank is satisfied about the need and creditworthiness of the borrower, it may consider grant of loan to him. How to apply:

The loan application forms are available at your nearest Maharashtra bank office. The completed application form, together with all supportive documents. Maharashtra bank will make all such enquiries as are necessary or call the applicant for a discussion. ~ 43 ~

RESEARCH METHODOLOGY

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RESEARCH METHODOLOGY:Research in common parlance refers to a search for knowledge. One can also define research as a scientific and systematic search for pertinent information on a specific topic. The word research has been derived from French word Researcher means to search. FRANCIES RUMMER defined Research: It is a careful inquiry or examination to discover new information or relationship and to expand or verify existing knowledge. Research is the solution of the problem, whether created or already generated. When research is done, some new outcome, so that the problem (created or generated) to be solved.

RESEARCH OBJECTIVES:
The main objectives of research in management are: To verify and to test the existing facts and theories. To gain familiarity with a phenomenon or to achieve new insights into it. To establish generalization in various fields of knowledge. To bring to limelight information that could have never been brought to the knowledge under normal course.

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RESEARCH DESIGN:Research Design is the conceptual structure within which research is conducted. It constitutes the blueprint for collection, measurement and analysis of data. The design used for carrying out this research is Descriptive.

DATA TYPE: - In this research the type of data collection is

Primary data The primary sources of information collection were through discussion with the faculties and the advisors in the company. Secondary data The main source of information is taken from annual reports of the companies and through related websites which has enabled in analyzing the equities. Internet sources Annual Reports Text Books

DATA SOURCE: - The sources of collection of secondary data are: Books Websites Brochure Annual Reports ~ 46 ~

DATA ANALYSIS

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Data analysis
Under this chapter I have discussed about loans, advances, investments and working capital. In which whatever data I have collected from the organization Interest on loans is the first income of any financial institute or may bank so loan plays very important loan in banking sector. From last three years what are the positions of loans, deposits, investment and working capital in the bank of Maharashtra we can analyze below.

DEPOSITS:YEAR 2007-08 2008-09 2009-10 2010-11 AMOUNT. 26906,18,75 33919,33,85 41758,33,23 52254 ,91 ,96

Under this table I have shown the amount as per the year. As per this table the amount of deposit has increased comparatively last year. The graph has shown in the next page.

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Deposits
60000 50000 40000 30000 20000 10000 0 2007-08 2008-09 2009-10 2010-11

Deposits means saving a sum of amount in the bank for a fixed period of the time bank gives the same amount including the interest as per the banks rate of interest. From last five years the deposits have increased drastically as in the this bar graph in 1997 the deposit was 1405.09 lakhs and after five years that is in 2001 the deposit is 5315.04 lakhs. From this bar d diagram we can understand that the bank is increasing its goodwill in market.

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Working capital:YEAR 2007-08 2008-09 2009-10 2010-11 AMOUNT. 312,394,14 325,90,28 354,24,93 394,001,42

Working capital
450 400 350 300

250
200 150 100 50 0 2007-08 2008-09 2009-10 2010-11

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Under this table I have shown the amount of working capital. This amount has shown in thousands, & even in this table the amount has increased comparatively last year. The graph has shown in next page.

Working capital can be defined in two ways. 1. Working capital means the difference between the current assets and current liabilities. 2. Working capital is the portion of current assets which is financed in long term funds. Under the working capital the capital has increased very fast because of the daily transaction of the bank. The working capital of the bank in the last year ended 2009-2010 is 394,001,42 Thousand RS

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Loans:YEAR 2007-08 2008-09 2009-10 2010-11 AMOUNT. 488,38,04 200,90,08 199,24,83 190 ,01 ,32

As loan is very important role in any banking firm. So even of this bank the loan which has given to the customer is very high comparatively every year. Even in this graph the amount has shown in thousand and the graph is shown in the next page.

Loans
9 8 7 6 5 4 3 2 1 0

2007-08

2008-09

2009-10

2010-11

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Under the loan system, the loan amount is given to borrower in one installment and further drawings in the loan account are permitted. Getting interest loan is the first and basic income of any bank or financial institution. So receiving the proper interest on loan is very necessary. For any bank. In this bank the bank has given the loan very efficiently. In the above table bank has given the loan in year ended 2005-06 488,38,04And after 5 years 2008-09 the bank has given 190 ,01 ,32

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Investment:YEAR 2007-08 2008-09 2009-10 2010-11 AMOUNTPER YEAR 11354,26,19 11298,39,55 12282,95,24 18382 ,14 ,36

Under this table I have shown the how much is the investment of the bank in other financial institute. According to this table the investment has decrease in the year end of the year. The amount has shown in thousand and the graph is shown on next page.

Investment
20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 2007-08 2008-09 2009-10 2010-11

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Investment is very third category of fixed assets. It represents the investments of funds in the securities of the companies. They are long term assets outside the business of the firm. The purpose of such investment is either to earn return or control other company. It customarily shown in the balance sheet at cost with value shown in the parenthesis.

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LIMITATIONS OF THE STUDY:Although every effort has been made to study the STUDY OF LOANS & ADVANCES IN NATIONALISE BANKING SECTOR in detail, in an organization of MAHARASHTRA BANK, it is not possible to make exhaustive study in a limited duration of 2 months. Financial matters. Apart from the above constraint, one serious limitation of the study is that it is not possible to reveal some of the financial data owing to the policies and procedures laid down by MAHARASHTRA BANK. However the available data is analyzed with great effort to get an insight into Loans and Advances Company generally cannot disclose its internal policies to outsiders. In such case, it is very difficult to find out and gather complete and true information in the forms of figures regarding

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FINDING & SUGGESTIONS

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Findings:1. Bank has concentrated only on the part of deposits rather than advances which is the most important area of the whole banking. Rate growth of deposit is much higher than the rate of advances. Management should understand that the deposits are the liabilities of the bank and advances are the real income of the bank. 2. For the purpose of attracting the customers bank has undertaken a deposit scheme of the higher rate of interest. Due this banks deposit rises tremendously. Bank become famous but in the coming years bank will have to pay the interests on their deposits. 3. At the stage when the bank is having a plenty of funds in their hands, it has

seen that the management is not taking any serious step towards increasing the level of advances. When an organization is having surplus funds, it should try to invest it to earn maximum possible returns on it. 4. As far as banks activities are concern it looks like bank is really working to provide maximum customer service which is one of the most important object of any bank, so that object is very well served by the bank. 5. Thus banks social images are well settled. Goodwill which is the most

precious asset, is with the bank even the financial growth of the bank is very much satisfactory as the employees has got the bonus as their salaries.

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Suggestions:1. It is suggested that the bank should concentrate on higher amount of advances, rather than high amount of deposits.

2. Advances should be profitable advances in the sense it should contain those advances which can be repayable in the specified time of period.

3. To attract the customer for availing advances, there are certain types of loans which I have mentioned in this project i.e. educational loan, home loan, home equity loan, personal loan, consumer loan. Thus the bank should concentrate more on these loans other than other than other types of clean loans.

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Conclusion:The study of project reveals that the Bank of Maharashtra ware in the analysis & interpretation of the project states that the bank provides various types of loans & advances to the society. The bank makes various steps in reducing loss again the loans & advances provided to the society. As compare to the private financial organization the Bank of Maharashtra had more efficient and valuable changes in the facilities to the common people with less of charges. Different types of loan like Personal loan, Consumer loan, House loan, Education loan etc. are made available by bank in the same manner crop loan for the farmer are provided as per the NABARD and RBI NORMS. The KISAN credit card facility is also made available to the farmer. The overall study reveals back customer connect to the Bank of Maharashtra are made over satisfied with the bank. The Bank of Maharashtra play very important role in the development of rural areas by lending funds.

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