SET 1.

Q. CASE 1

ABC Branch of XYZ Bank has decided to give 10 Lakh of loan each on
long term basis to only two of their customers (accountholders), who are
businessmen of the locality. About 20 businessmen had applied for loan in
order to develop their business further. In order to reject some of the
applications (as the fund was limited), the Bank decided that
accountholder who had maintained a minimum balance of 50000 INR
wound only be considered for the loan. As a result, 10 applications were
automatically rejected as they were not satisfying the requirement of
minimum balance. Now, the 10 applications remained and it was found
that monthly minimum balance in all the cases were more than 50000 INR
for the last 12 months. Their account details of monthly minimum balance
are given below.
Months Monthly Minimum Balance In INR

A/C A/C A/C A/C A/C A/C A/C A/C A/C A/C
Holder Holder Holder Holder Holder Holder Holder Holder Holder Holder
1 2 3 4 5 6 7 8 9 10

jan,2008 60000 56000 66000 86000 56000 59000 59000 52000 53000 56000

feb,2008 70000 76000 74000 96000 76000 96000 78000 73000 98000 76000

mar,2008 55000 110000 112000 190000 110000 120000 115000 112000 113000 120000

apr,2008 90000 89000 90000 98000 89000 97000 87000 93000 66000 89000

may,200 56000 88000 84000 84000 88000 98000 90000 89000 87000 86000
8

jun,2008 80000 52000 57000 57000 52000 57000 55000 54000 59000 72000

jul,2008 82000 58000 96000 66000 58000 56000 86000 55000 98000 98000

aug,2008 79000 95000 55000 93000 95000 98000 99000 96000 59000 95000

sep,2008 51000 86000 76000 74000 86000 88000 89000 97000 87000 84000

oct,2008 95000 90000 95000 99000 90000 99000 95000 99000 95000 90000

nov,2008 82000 82000 87000 84000 82000 88000 87000 88000 86000 82000

dec,2008 83000 55000 56000 57000 55000 59000 59000 59000 52000 53000
Total 883000 937000 948000 1084000 937000 1015000 999000 967000 953000 1001000

You as an Assistant Branch Manager of the Bank are entrusted the task of
selecting two account holders for sanctioning the loans. How you will select
the two individuals among the 10 applications to give the loan using
appropriate statistical techniques? Give proper justification for your
selection.

Solution: Case Study

TABLE –A
Months Monthly Minimum Balance In INR

A/C A/C A/C A/C A/C A/C A/C A/C A/C A/C
Holder Holder Holder Holder Holder Holder Holder Holder Holder Holder
1 2 3 4 5 6 7 8 9 10

jan,2008 60000 56000 66000 86000 56000 59000 59000 52000 53000 56000

feb,2008 70000 76000 74000 96000 76000 96000 78000 73000 98000 76000

mar,2008 55000 110000 112000 190000 110000 120000 115000 112000 113000 120000

apr,2008 90000 89000 90000 98000 89000 97000 87000 93000 66000 89000

may,200 56000 88000 84000 84000 88000 98000 90000 89000 87000 86000
8

jun,2008 80000 52000 57000 57000 52000 57000 55000 54000 59000 72000

jul,2008 82000 58000 96000 66000 58000 56000 86000 55000 98000 98000

aug,2008 79000 95000 55000 93000 95000 98000 99000 96000 59000 95000

sep,2008 51000 86000 76000 74000 86000 88000 89000 97000 87000 84000

oct,2008 95000 90000 95000 99000 90000 99000 95000 99000 95000 90000

nov,2008 82000 82000 87000 84000 82000 88000 87000 88000 86000 82000

dec,2008 83000 55000 56000 57000 55000 59000 59000 59000 52000 53000

Total 883000 937000 948000 1084000 937000 1015000 999000 967000 953000 1001000

Use the weighted method for solution:

1st a/c holder Wx=883000, W=12

W.Avg.=883000/12

= 73583

2nd a/c holder Wx=937000, W=12

W.Avg.=937000/12

=78083.33

3rd a/c holder Wx=948000, W=12

W.Avg.=948000/12

= 79000

4th a/c holder Wx=1084000, W=12

W.Avg.=883000/12

= 90333.33

5th a/c holder Wx=937000, W=12

W.Avg.=937000/12

= 78083.33

6th a/c holder Wx=1015000, W=12

W.Avg.=1015000/12

= 84583.33

7th a/c holder Wx=999000, W=12

W.Avg.=999000/12

= 83250

8th a/c holder Wx=967000, W=12

W.Avg.=967000/12

= 80583.333

9th a/c holder Wx=953000, W=12

 W.Avg.=953000/12

= 79416.667

10th a/c holder Wx=1001000, W=12

W.Avg.=1001000/12

= 83416.667

Table - B

Monthly
A/c Holder Avg
Balance
1st a/c holder 73583
2nd a/c holder 78083
3rd a/c holder 79000
4th a/c holder 90333
5th a/c holder 78083
6th a/c holder 84583
7th a/c holder 83250
8th a/c holder 80583
9th a/c holder 79416
10th a/c
holder 83416

According to case ABC Branch of XYZ have decided to give 10 Lack of loan each
on long term basis to only two of their customer or accountholder, about 20
businessmen had applied for loan in order to develop their business further. In order
to reject some of the application as (the fund was limited); the Bank decided that
accountholder who had maintained a minimum balance of 50000 INR would only be
considered for the loan. As a result, 10 applications were automatically rejected as
they were not satisfying the requirement of minimum balance. Now, the 10
applications remained and it was found that monthly minimum balance in all the
cases were more than 50000 INR for the last 12 month. If I were assistant manager
XYZ Bank, I would select from remained 10 applications choose 4th and 6th A/c
Holder for give loan .This is because they are only eligible who are maintaining
maximum balance more than remains Eight A/c Holder’s. Only 4 th and 6th A/c
Holder has maximum average than remains eight A/c Holder. So, it should be
consider of them for give loan.