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1.1 INTRODUCTION OF BANKING INDUSTRY

As people earn money to meet their day-to-day expenses on food, clothing, education
of children, housing, etc. They also need money to meet future expenses on marriage,
higher education of children, house building and other social functions. These are
heavy expenses, which can be met if some money is saved out of the present income.
Saving of money is also necessary for old age and ill health when it may not be
possible for people to work and earn their living. The necessity of saving money was
felt by people even in old days. They used to hoard money in their homes. With this
practice, savings were available for use whenever needed, but it also involved the risk
of loss by theft, robbery and other accidents. Thus, people were in need of a place
where money could be saved safely and would be available when required. Banks are
such places where people can deposit their savings with the assurance that they will
be able to withdraw money from the deposits whenever required. People who wish
to borrow money for business and other purposes can also get loans from the banks at
reasonable rate of interest.Bank is a lawful organization, which accepts deposits that
can be withdrawn on demand. It also lends money to individuals and business houses
that need it. Banks also offer many other useful services like collection of bills,
payment of foreign bills safe-keeping of jewellery and other valuable items, certifying
the credit-worthiness of business, and so on. Banks accept deposits from the general
public as well as from the business community. Any one who saves money for future
can deposit his savings in a bank. Businessmen have income from sales out of which
they have to make payment for expenses. They can keep their earnings from sales
safely deposited in banks to meet their expenses from time to time. Banks give two
assurances to the depositors.
a) Safety of deposit
b) Withdrawal of deposit
Whenever needed On deposits, banks give interest, which adds to the original amount
of deposit. It is a great incentive to the depositor. It promotes saving habits among the
public. On the basis of deposits banks also grant loans and advances to farmers,
traders and businessmen for productive purposes. Thereby banks contribute to the
economic development of the country and well being of the people in general. Banks
also charge interest on loans. The rate of interest is generally higher than the rate of
interest allowed on deposits. Banks also charge fees for the various other services,
which they render to the business community and public in general. Interest received
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on loans and fees charged for services which exceed the interest allowed on deposits
are the main sources of income for banks from which they meet their administrative
expenses. The activities carried on by banks are called banking activity. Banking as
an activity involves acceptance of deposits and lending or investment of money. It
facilitates business activities by providing money and certain services that help
in exchange of goods and services. Therefore, banking is an important auxiliary to
trade. It not only provides money for the production of goods and services but also
facilitates their exchange between the buyer and seller .As we may be aware that
there are laws which regulate the banking activities in our country. Depositing money
in banks and borrowing from banks are legal transactions.Banks are also under the
control of government. Hence they enjoy the trust and confidence of people. Also
banks depend a great deal on public confidence. Without public confidence banks
cannot survive.
1.1.1 History of Banking
Banking industry in India originated in the last decades of the 18th century. The
oldest bank in existence in India is the State Bank of India, a government-owned bank
that originated back in June 1806 and that is the largest commercial bank in the
country. banking is the responsibility of the Reserve Bank of India, which in1935
formally took over these responsibilities from the then Imperial Bank of India,
relegating it to commercial banking functions. After India's independence in 1947, the
Reserve Bank was nationalized and given broader powers. In 1969 the government
nationalized the 14 largest commercial banks; the government nationalized the six
next largest in 1980.
Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan
and Bengal Bank. The East India Company established Bank of Bengal (1809), Bank
of Bombay (1840) and Bank of Madras (1843) as independent units and called it
Presidency Banks. These three banks were amalgamated in 1920 and Imperial Bank
of India was established which started as private shareholders banks, mostly
Europeans shareholders. In 1865 Allahabad Bank was established and first time
exclusively by Indians, Punjab National Bank Ltd. was set up in 1894 with
headquarters at Lahore. Between 1906 and1913, Bank of India, Bank of India, Bank
of Baroda, Canara Bank, Indian Bank,and Bank of Mysore were set up. Reserve Bank
of India came in 1935.During the first phase the growth was very slow and banks also
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experienced periodic failures between 1913 and 1948. There were approximately
1100 banks, mostly small. To streamline the functioning and activities of commercial
banks, the Government of India came up with The Banking Companies Act, 1949
which was later changed to Banking Regulation Act 1949 as per amending Act of
1965 (Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers
for the supervision of banking in India as the Banking Authority. During those days
public has lesser confidence in the banks. As an aftermath deposit mobilization was
slow. Abreast of it the savings bank facility provided by the Postal department was
comparatively safer. Moreover, funds were largely given to traders.
Phase II
Government took major steps in this Indian Banking Sector Reform after
independence.In 1955, it nationalized Imperial Bank of India with extensive banking
facilities on a large scale especially in rural and semi-urban areas. It formed State
Bank of India to act as the principal agent of RBI and to handle banking transactions
of the Union and State Governments all over the country.Seven banks forming
subsidiary of State Bank of India was nationalized in 1960 on 19thJuly, 1969, major
process of nationalizations was carried out. It was the effort of the then Prime
Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was
nationalized.Second phase of nationalization Indian Banking Sector Reform was
carried out in 1980 with seven more banks. This step brought 80% of the banking
segment in India under Government ownership.The following are the steps taken by
the Government of India to Regulate Banking Institutions in the Country:

1949: Enactment of Banking Regulation Act.

1955 : Nationalization of State Bank of India
1959: Nationalization of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalization of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalization of seven banks with deposits over 200 crore.After the
nationalization of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by
11,000%.Banking in the sunshine of Government ownership gave the public
implicit faith and immense confidence about the sustainability of these
institutions.
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Phase III
This phase has introduced many more products and facilities in the banking sector in
its reforms measure. In 1991, under the chairmanship of M Narasimham, a committee
was set up by his name which worked for the liberalization of banking practices.The
country is flooded with foreign banks and their ATM stations. Efforts are being putto
give a satisfactory service to customers. Phone banking and net is introduced. The
entire system became more convenient and swift. Time is given more importance than
money.Currently, India has 88 scheduled commercial banks - 27 public sector
banks (that is with the Government of India holding a stake), 31 private banks (these
do not have government stake; they may be publicly listed and traded on stock
exchanges) and 38foreign banks. They have a combined network of over 53,000
branches and 17,000ATMs. According to a report by ICRA Limited, a rating agency,
the public sector banks hold over 75 percent of total assets of the banking industry,
with the private and foreign banks holding 18.2% and 6.5% respectively.With the
growth in the Indian economy expected to be strong for quite some time-especially in
its services sector-the demand for banking services, especiallyretail banking,
mortgages and investment services are expected to be strong. One may also expect M
& As, takeovers, and asset sales.The growth in the Indian Banking Industry has been
more qualitative than quantitative and it is expected to remain the same in the coming
years. Based on the projections made in the "India Vision 2020" prepared by the
Planning Commission and the Draft 10th Plan,the report forecasts that the pace of
expansion in the balance-sheets of banks is likely to decelerate. The total assets of all
scheduled commercial banks by end-March 2010 is estimated at Rs 40, 90, 000/crore. That will comprise about 65 per cent of GDP at current market prices as
compared to 67 per cent in 2002-03.Bank assets are expected to grow at an annual
composite rate of 13.4 per cent during the rest of the decade as against the growth rate
of 16.7 per cent that existed between 1994-95 and 2002-03. It is expected that there
will be large additions to the capital base and reserves on the liability side.

1.1.2 About The Organization

Co-operative banks are small-sized units organized in the co-operative sector which
operate both in urban and non-urban centers. In India, co-operative banks finance
small borrowers in industrial and trade sectors, besides professional and salary
classes. Co-operative banks perform the main banking functions of deposit
mobilization, supply of credit and provision of remittance facilities. They provide
limited banking products and are specialists in agriculture-related products. Cooperative banks are regulated by the Reserve Bank of India and governed by the
Banking Regulations Act, 1949, and Banking Laws (Co-operative Societies) Act,
1965. Rural co-operative banks are regulated by state registrar of co-operatives.The
sources of funds for co-operative banks are: and state government, Reserve Bank of
India and NABARD, other co-operative institutions, ownership funds and deposits or
debenture issues. Intra-sector flows of funds are much greater in co-operative banking
than in commercial banking. Inter-bank deposits, borrowings and credit also form a
significant part of assets and liabilities of co-operative banks
1.1.2.1 Features of Cooperative Banks

Co-operative Banks are organized and managed on the principal of co-operation,

self-help, and mutual help. They function with the rule of "one member, one
vote". function on "no profit, no loss" basis. Co-operative banks, as a principle, do

not pursue the goal of profit maximization.

Co-operative bank performs all the main banking functions of deposit

mobilization, supply of credit and provision of remittance facilities.

Co-operative Banks provide limited banking products and are functionally
specialists in agriculture related products. However, co-operative banks

now provide housing loans also.

UCBs provide working capital loans and term loan as well. The State Cooperative Banks (SCBs), Co-operative Banks (CCBs) and Urban Co-operative
Banks (UCBs) can normally extend housing loans up to Rs 1lakh to an individual.
The scheduled UCBs, however, can lend up to Rs 3 lakh for housing purposes.

The UCBs can provide advances against shares and debentures also.
Co-operative bank do banking business mainly in the agriculture and rural
sector.However, UCBs, SCBs, and CCBs operate in semi urban, urban, and
metropolitan areas also. The urban and non-agricultural business of these banks

has grown over the years. The co-operative banks demonstrate a shift from rural to

urban, while he commercial banks, from urban to rural.

Co-operative banks are perhaps the first government sponsored, governmentsupported, and government-subsidized financial agency in India. They get
financial and other help from the Reserve Bank of India NABARD, government
and state governments. They constitute the "most favored" banking sector with
risk of nationalization. For commercial banks, the Reserve Bank of India is lender
of last

1.1.2.1 Types of a Co-Operative Bank

There are two types of co-operative banks in India. The first is the short term lending
oriented Co-operative Banks. In this category there are again three sub categories
of banks which are the State Co-operative banks, District Co-operative banks and the
Primary Agricultural Co-operative societies. The second is the long term lending
oriented

Co-operative

banks.

In

this

second

category

there

are

land

developments banks which are at three levels. First is the state level, the second is
district level, and the third is the village level.Again the Co-operative
banking structure in India is divided into five main categories and these categories
are:

1.1.3 The Co-Operative Bank

The Cooperative Bank was established on 31st August, 1949 at Shimla wide
registration No. 720 has a principle financing institution of the cooperative movement
in Punjab. In 1951 its Head Office was shifted to Jalandhar from where it moved in
1963 to its present building at Chandigarh. In the cooperative Banking structure, the
position of the Punjab State Cooperative Bank is extremely important as the whole
credit system revolves around it.
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It has 19 branches and 1 extension counters in Chandigarh. There are 20 DCCB

having 804 branches all over Punjab, mostly in rural areas of the State. In the
Cooperative banking structure the position of the Punjab State Coop. Bank is
extremely important as a the whole short term credit system revolves around it. This
bank ensures that its member cooperative banks follow sound banking practices and
observe strict financial discipline. The Cooperative Banks are financing the farmers
through PACS at the village Level. There is no arena of life where this premier
institution has not played its part. From a farmer, artisan to traders/businessman,
everybody has been covered in the fold of this institution. The green, white and sweet
revolutions in the state of Punjab are some of the major achievement in which this
institution has plays a vital role.

1.1.3.1 Important Aspects of the Organization

The Cooperative Bank has already been awarded "BEST PERFORMANCE AWARD"
from NABARD and NAFSCOB. For the year 2003-04, Punjab Cooperative Bank has
been selected for NABARDs Best Performance Award which is based on
performance of all the SCBs in the country. Jalandhar DCCB has also been selected
for NABARDs Best Performance Award out of all the DCCBs in the country for
the year 2003-04.

1.1.3.2 Objectives of the Coperative Bank

To serve as a Balancing Centre for Cooperative Societies in the State for Cooperative
Societies in the State of Punjab registered under the Punjab Cooperative Societies Ac,
1961 for the time being in force.
To promote the economic interest of the member banks and cooperative societies in
the state in accordance with cooperative principles and to facilitate the development
and funding of any cooperative society registered under the said act. To carry on
banking and credit business.
Management and Organizational Structure

Three Directors to be nominated by Govt. so long as the Govt. is member.

Eight Directors to be elected out of members Co-operative Marketing
cum processing Societies. One Director to be elected out of member industrial

Co-operative societies. In case, The No. of these societies exceeds fifty-one.

Directors to be elected out of the remaining Co-operatives societies.

None of elected Directors has incurred any disqualification of director so far and
there is no Director who continuously remained absent in three consecutive
meeting of Board of Directors.

1.1.3.3 Swot Analysis of Coperative Bank

A. Strength

The bank provides the easiest way to open a new account into any of
its branch as the customers has to fill minimum requirements which are

asked by other banks.

The bank has the branches in the remote areas where the branches of
other banks are not yet opened which give the bank edge over the other

banks.
As the bank is a cooperative bank thus bank gets the advantage of
getting priority by the different cooperative societies for transactions and

loans.
Due to the cooperative in nature peoples has faith in the bank.
Cooperative staff is the main strength of all the organization as in

case of the bank its cooperative staff is the main strength of the bank.
Adherence to coop values and principles.

B. Weakness

The Cooperative Bank has less resources as compared to the other nationalized

and public banks.

Political pressures on the employees of the bank as compared to the

other banks.
No internet banking and mobile banking.
ATM network is not well spread like other nationalized and public

banks.
Most of the branches are not online however they are computerized.
Less advertisement is other weakness.
Lack of time management.
Lack of knowledge about the many aspects of banking to the employees.

C. Opportunities

Various Loan Schemes For Rural Area.

Easy Installments Facilities For Farmers.
No Much Formalities like Private Banks.
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D. Threats

Capital Market slow-down

Competition
Rising Rate of interest
Other better Saving, investment option available (like Insurance, Mutualfund,

Real-estate, Gold)
Government Rules And Regulation

1.2 INTRODUCTION TO LOANS

An4 arrangement which a lender gives moneyor property to a borrower , and
the borrower agrees to return the property or repay the money, usually along with
interest, at some future point(s) in time. Usually, there is a predetermined time for
repaying a loan, and generally the lender has to bear the risk that the borrower may
not repay a loan(though modern capital marketshave developedmany ways of
managing this risk).

1.2.1 Importance of Loans in Today's Life

Everyone needs money at every stage of their life. Sometimes it so happens that they
have keen desire to purchase their favorite stuff but they are incapable to purchase due
to shortage of money.Here lies a question that a person who does not have a good
amount of money at particular time has no right to see dreams? Is he not authorized to
fulfill his desires on time Should he stop dreaming? No, because there is solution for
these queries. Loans are available for these purposes only.Loans are provided to
people for such critical circumstances which may occur at anytime. In anyone's life a
situation may come when all of sudden you require cash. A moment when you do not
want to borrow cash from your relatives.There may occur any kind of emergency
when you need huge amount of money. There are various types of loans like
home loans, personal loans, student loan, business loan etc.You can take any type of
loan you need. For each and every kind of need, loans are available Home loans are
available for general home purposes like buying a luxurious car, going for a holiday
trip, educational purpose, home improvement etc. Many of your desires can be
fulfilled by this loan.Personal loans are available for personal requirements like
wedding ceremony, purchasing a home etc. Student loan as it itself suggest is that it is
provided basically to students for higher education. Students who want to study more
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but can not afford can get apply for such loans and continue their studies.To start a
new business you require a huge amount of money. A person willing to setup
a business may not have that much cash which can meet out his requirements. For
this business loans are available. You can get business loans to start and well establish
a new business in market.
Whatever may be the kind of loan, all have full fledged facilities. All kind of loans
have their own importance. Above all, need of money explains the importance of
loan.Applying for loan is very easy. Apply for that loan whichever is needed to you.
But before applying you should go through different lender's policies and apply for
that lender which is beneficial for you.Different lenders have different policies. If you
get loan for long term with low rate of interest then it is beneficial for you. Due
to competition, lenders are trying their best to attract people by providing different
schemes which in turn is good for people. And cooperative bank is also one of them.

1.2.2 Loan Procedure

The loan to get passed, it has passed through many hands as shown in the following
figure. Inquire Information
(A) Procedure for getting a loan
a. Customer

Under the above procedure customer means the per who wants to take a
loan.Custer may be a farmer , student, employee of govt. or semi govt. or any
institution approved by the board of directors of the bank, individuals
,companies, trust, firm, cooperative Societies etc
b. Reception
Here a person (customer) inquires about the loan rates and other prerequisites
that are to be submitted. He is provided this information by the clerk at the
reception.For example a person want to take a vehicle loan . At this step he is
get the information about the amount sanction criteria, interest rate, period of
time, mode of loan disbursement, mode of repayment, perquisite
documents etc
c. Submission of document
After getting the information customer submit the required document
to bank facility. For example: to take a House Loan he submitted various

types of documents like

Demand Pro note note (D.P.. note)
Two latest attested passport size photographs of borrower
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Proof of Residence
Source of Finance for own contribution
Copy of approved drawing of the proposed

constructed/purchased from Sarpanch/Numberdar.

Agreement of sale deed.
Details of cost/estimate from approved Architecture/ valuer/ Engineer of the

house to be purchased/constructed/renovated/addition to Made

Non encumbrance certificate.
Latest jamabandi and girdawri.
Certificate of ownership of land/property situated within Red Line of the

village from the Sarpanch/Numberdar/Patwari

The borrower shall be also required to submit collateral security @100%of

loan amount etc.

To take a loan borrower firstly required to take nominal member ship of bank.

dwelling

unit to

be

Only after fulfillment and submission of all documents which are required
according to take various types of loans, the process is started actually.
d. Credit rating
Based on the documents submitted by the customer, the credit rating of the customer
is done i.e. how much the loan amount should be granted to the customer is
calculated. This is done as follows.1. First the total value of the customers assets is
calculated. For example if loan is on a stock plus if he has provided the papers of his
business land, then in this case his credit will be calculated as a sum of the value
of both these assets.i.e. total value = value of stock + value of land. Now, according
to the rules of bank some percentage of the value of these assets can only be given
as loan. This percentage varies for different types of loans and based on it the
sanctioned loan amount is calculated.
e. Inspection
After having calculated the credit and the amount that can be sanctioned for loan,the
file is forwarded for inspection. Here, the officer verifies the work done by the clerk at
the credit rating desk. Moreover, he checks the banks database to see if the loan taker
has any previous obligations which are remaining to be met (if he is an old customer).
After the satisfaction with all the parameters, he hands over the file to the loan
manager
f. Loan Manager

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Employee individually and discuss the preparation of the manual so that its function is
fully understood. An outline of what is expected should be prepared and given to each
employee to follow. The outline should cover:
At this step, the file of customer reexamined by the loan manager. If the loan is
consumer loan then it is directly granted by branch manager . But if the loan
is personal loan or vehicle loan or any other type of loan then it is granted by
senior manager or district manager. The powers of granting different types loans
of different mangers are as under:

Branch Manager : Branch Manager has power only to grant the consumer loan.The

maximum amount is granted up to 100000 Rs./-.

Senior Manager : Senior Manger has power to grant a loan up to amount

200000Rs./- only.
District Manager : District Manager can grant a loan from 200000 Rs./- to500000

Rs./- only
Board of Directors: If the loan amount is greater than 500000 Rs./- then it is granted
by the board of directors of the Cooperative Bank.So according to different types
and different amounts of loans, these are granted by above parties. At this stage
loan granting manager recheck all the documents.Loan manager pass the loan if
customer fulfill all requirements. But if there is anything which is unclear or
insufficiency in the documents, he has power to reject the loan application. But
he is also liable to give specific reason to the customer about the rejection of loan.

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g. Meeting
If the amount of loan is greater than 5 laces then a meeting is conducted
between board of Directors of the bank After having examined the file, the file is
then put forward before the Chairman and Managing Director (MD) in a meeting.
This file is then cross examined. If all the members of top management are mutually
consent then the application of loan is ready for disbursement of loan amount
h. Insurance
Before issuing the loan amount or opening of a/c for loan, the customer is required to
get insurance on the thing on which he wishes to take loan. This is done by bank with
the help of United India (UI) Insurance Company. Moreover,if any other thing is
mortgage for taking loan, then the insurance is taken on that particular thing also. This
is explained in detail in the coming sections.
i. Giving away of Loan
After paying the insurance amount, the loan amount or account is handed over to the
customer. Before the disbursement of loan amount to customer firstly bank require
becoming a nominal member of bank, then loan amount is paid to the customer. In
some type of loan schemes the amount of loan is paid into installments. Like in case
of Rural Housing Loan amount is paid into two installments:a. 1stinstallment
at the time of starting 50%construction upto plinth level
b. 2nd installment
after completion up to 50%roof level
In case Urban Housing Loan amount of loan is disbursed into three installments:
a.
b.
c.

For purchase of plot 50%

Up to roof level 25%
After roof level 25%

So above are the various stages into loan procedure adopted The Cooperative Bank.
Any customer can easily get a loan to fulfill his/her various requirements and get it
fastly as per as possible.

1.2.3 Loan Schemes

(A) Scheme for Financing Rural Housing
Preamble with a view to provide housing facilities to the masses which is a basic need
of human beings, the GOI and State Govt. are attaching utmost importance to the
financing of housing sector. Several housing schemes for this are in operation. With a
view to supplement these schemes, it has been decided by the Coop. Bank to start
housing finance for acquisition, construction, repair/alteration etc. This scheme
has particularly been designed for rural people, where other financing institutions are
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reluctant to advance. The scheme shall be called the Scheme for Financing Rural
Housing and is applicable to individual/members of house building cooperative
societies in the state of Punjab and Chandigarh (U.T.)
(B) Eligible Borrower
1) Individuals
2) Cooperative Housing Societies

Loan:-Loan shall be advanced under the scheme for purchase of built up

house, construction of a new house or repair/ renovation/addition/alteration of
existing house in rural areas.

Ceiling on the cost :-The loan for a dwelling unit may not exceed Rs.15.00
lacs. In case land is being acquired the cost of land may be reckoned as margin
money, otherwise cost of land should not be included in the project cost

Quantum of bank Loan for individual :- The quantum of loan shall depend
upon repaying capacity of the borrowers, subject to 85% of cost of
construction or value of property to be purchased.
a. Maximum loan

Rs.15.00 lacs

B Margin Money 15%

Repayment period Up to 15 years in monthly/half yearly installments. Due
date shall be 30thJune and 31stDecember every year.

a.
b.
c.

For Renovation/Repair/Addition/Alteration

Maximum loan
Margin money
Repayment period

Rs.5 lacs (for repair/ addition /alteration of House)

Rs.5 lacs
10 years in monthly/half yearly installments

Loan eligibility shall be calculated on the basis of repayment capacity of the

borrower.The repaying capacity shall be determined on the basis of land
holding and other known sources of income and commitments/subsistence
towards his family. A reasonable installment to income ratio i.e. normally upto
35% of the gross income can be taken as repayment capacity of the borrower.
Income of the co-applicant can also be considered for loan eligibility.

Period of Loans:-The maximum period of loan shall be upto 15 years and

loan shall be repayable in equated monthly/half yearly installments. The first
installment shall become due after expiry of 9 months from the date of drawl

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of first installment in case of construction and whereas in case of purchase of

built up house, it shall start after expiry of 3 months from the date of purchase.

Rate of Interest :-At present rate of Rural Housing is 11% and further it shall
be determined by financing bank from time to time and debited to
loan account. Interest is charged as contract made with the loanee. Penal
interest @ 2% over and above the normal rate shall be charged in case of
default, on the default amount for the default period. 0.5% concession is
allowed to women.

Security:- The security of the loan shall be first mortgage charge on the house
property to be financed by the bank by way of registered regular mortgage.
In addition to it collateral security shall be taken @ 100% of the loan amount
in the form of agriculture land. Value of agriculture land as per norms fixed by
the District Collector from time to time should be taken into consideration. In
case of employees of the Govt., semi govt.Boards, Corporation, etc.,
constructing house within rural areas, loan can be advanced on primary
security i.e. mortgage of house to be financed, along with two good sureties
and undertaking under section 39 of Punjab Cooperative Societies Act., 1961.

Sanction and disbursement of Loan: -The loan shall be sanctioned after it is

ascertained that the applicant fulfills all the requirements and enjoys reputation
as a good pay master. For construction loan, the borrower should be in
possession of plot with unquestionable and indisputable title. In case of built
up house, the payment shall be made @ 75% of total value of the house/Loan
sanctioned. Payment shall, however, be made to third party in lump sum after
getting margin money from the borrower and remaining 25% shall be released
after obtaining Mortgage Deed in favor of the Bank.For construction of house,
loan shall be disbursed in 2 installments, which is as under.
a.

1stinstallment at the time of starting 50%construction up to plinth

b.
c.

level.
2ndinstallment after completion up to 50%roof level.
2ndinstallment shall be disbursed after ensuring proper utilization of
previous installment.

Processing Fee & Other Charges: -Processing Fees and other charges @
0.25% of loan amount shall be charged
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Documentation & general requirements: -Following documents are

required for financing under Rural Housing Scheme

1.
2.
3.
4.
5.
6.
7.

Application form
Loan agreement
D. P. Note
Two latest attested passport size photographs of the borrowers.
Proof of residence.
Source of Finance for own contribution.
Copy of approved drawing of the proposed dwelling

unit to

be

constructed/purchased from Sarpanch / Numberdar.

8. Agreement of sale deed.
9. Details of cost/estimate from approved Architecture/ Valuer/ Engineer of the
house to be purchased/ constructed /renovated /addition to be made.
10. Non-encumbrance certificate.
11. Latest Jamabandi and Girdawari.
12. Certificate of ownership of land/property situated within Red Line (i.e. Phirni)
of the village from the Sarpanch/Numberdar/Partwari.
13. The borrower shall mortgage his existing

property

: to

be

constructed/purchased in favors of the bank for the full value of loan.

1.2.4 Scheme for Urban Housing Loan
(A) Short Title Extent and Commencement
a. This scheme may be called Urban Housing Loan Scheme to individual and members of
house Building Societies by The Punjab State Cooperative Bank/ Coop .Bank (s) in
the State of Punjab.
b. The scheme shall be implemented through the branches of the PSCB/Cooperative banks
concerned and shall be limited to urban areas falling in the area of operation of the
lending Bank.It shall come into force from the date as the Registrar Coop. Societies,
Punjab Chandigarh decides.

Purpose:- Loan shall be advanced for the purchase of plot, purchase of built up
house,construction of house or repair, renovation, additions, alteration, etc. in the existing
house. Loans shall also be given for acquiring a plot, flat, house in an existing
or proposed Cooperative House Building Society and approved scheme of PUDA, House
fed, Improvement Trust or any other Govt. Agency.Loan can also be advanced for
takeover of an existing loan advanced by any other bank/financial institution subject to
the condition that the loan account should have remained in the standard category
of assets for at least last 2 years in the previous financial institution

Eligibility: -An individual residing in the area of operation of the Bank may apply
for the loan in his individual name or along with another person being joint owner
17

of the land/property as co-applicant. The applicant and co-applicant, if any will be

enrolled as nominal members of the bank under the Act, Rules and Bye Laws.
Note: The Borrower should not have defaulted in any other loan.
The applicant shall be eligible for a total house building loan not exceeding 75%
of the total cost of house (cost of construction + cost of plot, if plot is to be
purchased) and the loan out of it for purchase of plot will not exceed 50% of the
total loan sanctioned. The remaining, exceeding or up to 50% shall be utilized for
construction of house thereon
The employees of the Punjab State Cooperative Bank or Cooperative Banks who
have already availed house loan under Govt. or Bank Scheme from the Punjab
State Coop. Bank or Cooperative Banks can also get loan under the scheme
subject to maximum of Rs.25 lacks under both house loan scheme. It will
be further subject to the repaying capacity of the employee in accordance with
their last salary statement. Further this loan to employee will be against second
charge on the said property.

Quantum of Loan: -The quantum of loan will depend upon the repayment
capacity of applicant to be calculated by the bank as under :
a. 21 yrs. To 45 yrs of age
48 times of the net monthly income (NMI) or 4 times of Net Annual Income
(NAI)

18

b. Above 45 years
36 times of Net Monthly Income (NMI) or 3 Times of Net Annual Income of
the spouse or family member can be considered if spouse or family member is coapplicant or guarantor. Maximum loan amount for construction of house or
purchase of house/flat, purchase of plot + construction thereon under this scheme
is Rs.25 lacks or 75% of total cost of construction, purchase of house (cost of
construction + cost of plot, if plot is to be purchased), whichever is less. The loan
for purchase of plot will not exceed 50% of the total loan sanctioned. For
repair/renovation

maximum

amount

of

loan

shall

be Rs.5

lacs.

For

addition/alterations in existing house, maximum loan amount shall be Rs.10 lacks.

Interest: - At present rate of Urban Housing is 11% and further it shall be

determined by financing bank from time to time and debited to loan account.
Interest is charged as contract made with the loanee. Penal interest @ 2% over and
above the normal rate shall be charged in case of default, on the default amount
for the default period. 0.5% concession is allowed to women.

Period of Loan/ Repayment of Loan: -Maximum period (including moratorium

period)shall be 15 years or attaining the age of 65 years whichever is earlier. In
case of repair/renovation /addition/alteration loan cases maximum period shall be
10 years. Repayment of the loan shall, however, be in monthly equated installment
to be started from 9 months after the first installment of loan disbursed. In case of
the farmers availing loan under this scheme, repayment of loan may be in half
yearly installments i.e. 30thJune and 31stDecember every year.

Security: - Security for the loan is a first mortgage of the property to be finance
normally by way of deposit of original title deeds.

Disbursal of Loan: -The loan shall be disbursed after the property is technically
appraised, all legal documentation completed and borrower having invested own
contribution in full (own contribution is the total cost of proposed property Bank loan).
In case of purchase of plot + construction, the disbursement shall be in 3 installments as
follows:For purchase of plot 50%
Up to roof level 25%
After roof level 25%

Loan will be disbursed at one go for purchase of a built up house. However, for construction
on pre-owned plot, the disbursement shall be in two installments.

19

1stInstallment for construction after plinth level 50%

2ndInstallment for construction of the building after roof level 50%

Loan for repair, additions, alterations and renovation shall be disbursed in two equal
installments. The second and subsequent installment of loan shall be disbursed only
after ensuring the utilization of previous installment to Banks satisfaction. Bank shall
not be bound to accept progress construction as assessed by builder.

Fee & other charges: - A processing fee @0.25% of the loan amount
sanctioned will be charged.

Documentation - Pre-sanction stage: 1.

2.
3.

Identify proof
Residential Proof
Self attested recent passport size photographs of the

4.

applicant and co- applicant(two).

Copy of Income-tax Return for the

5.

duly acknowledged by ITO concerned

Sources of Finance for own contribution.6.Non-

6.

encumbrance certificate.
Search report & legal opinion along with photograph of

three

years

the property
7. Mortgage Deed
8. Spot Physical verification
9
Purchase agreement of property
10. Income Proof/J-Form.
11. Loan application Form Post

Post Sanction Stage

1. Loan agreement.
2. Demand Promissory Note.
3. Mortgage Deed
4. Letter of Lien and Set Off
5. Letter of Waiver
6. Letter of Guarantee
Employed applicants: - Undertaking from the employee under section 39 of
Punjab Cooperative Societies Act, 1961.

Insurance: -Comprehensive insurance in the joint names of the borrower and

the bank shall be made of the property mortgaged against fire, riots
earthquake lighting floods etc.In case of default bank will be at liberty to get a
policy renewed by debit to house loan account of the borrower

20

Additional Documents in construction cases

a

Construction

competent authority.
Detailed Cost estimate

Architect/ Civil Engineer.

.A photocopy of registered

title

or allotment

of

letter

approved

(in

from

case

by a

Registered
deeds
member

of Cooperative House Building Societies

In purchase of Built Up House cases.
a.

Agreement of sale/sale deed/detailed cost

b.

estimate from approved engineer.

In case of allotment of flat/houses,
photocopy of
detailsof

Plan

allotment

letter

and

balance payment, if any.

Disputes

a. If at any stage any dispute arises, it will be settled/referred under the Punjab
Cooperative Societies Act 1961
b. The Bank offers Personal Loan for various purposes such as meeting medical
expenses, renovation of residential accommodation, traveling, marriage etc.

Eligibility : -salaried employees of Punjab government, PSUs, Boards,

Corporations,Aided

Schools/Colleges,

Universities,

Public Sector Banks,

Premier Medical Institutions, General Insurance Companies, Co-operative

organizations in the state of Punjab or any other organizations as approved by
the Board of Directors of the respective Bank etc.
a. Age: - Minimum 21 years and Maximum 57 years.
b. Service Tenure: - 1 year after the confirmation/regularization.
c. Loan Amount:-12 Times of gross monthly salary or Rs. 2,00,000/- only ,
whichever is less.
d. Period of Loan:- Maximum- 5 years. Loan may be repaid in 36/48/60
Equated Monthly Installments (EMI).
e. Rate of Interest: -14% p.a.
f. Income: - Net income of the person should not be less than Rs.5,000/p.m. in case of salaried persons and Annual Income of not be less than
Rs.60,000/- in case of others.
g. Repayment of Loan: -Loan is repayable in equated monthly installments
in the form of post-dated cheques. The 1Stinstallment will start after one
month. The Loan will be repaid before retirement.
21

h. Security: - No collateral security is required, only two guarantor know to

the bank.
i. Option to repay loan:-Borrower can make the part pre-payment of loan.
No penalty will be charged.
j. General:- No employee will be given this loan facility, which has
defaulted in repayment of loan under any other scheme.
1.2.5 Sehkari Education Loan Scheme
Education loan is granted for higher studies in colleges in India and abroad in any
educational field in college affiliated with recognized universities, medical
colleges,technical institutions, pharmaceutical colleges, Information Technology and
professional courses, Management etc, so that students from poor & middle classes as
well as brilliant and needy students can take advantages of the scheme. [The scheme
will not cover any correspondence course.

Eligibility: -

a. Age of student -An Indian National with minimum of 17 years and maximum 35
years of age can apply for this loan.
b. Age of Father -The age of Father/Guardian should not be more than 65 years till
full recovery of loan amount
c. Education Qualification- Minimum Qualification for co-operative education
loan (CEL)is plus two (+2) and the applicant must have secured at least
50% marks in the last examination passed.
d. Admission to Course - The applicant must secured admission or has got the
consent of the institution to admit to any one of the above-mentioned courses.
e. Duration Of Course: -The course should not be more than 5 years.
Purpose of Loan
i. Admission Fee
ii. Purchase of books and stationary
iii.
Purchase of instrument required for course undertaken by applicant
iv. Laboratory charges if any.
v. Monthly/quarterly tuition fee.
vi. Library charges.
vii. Caution deposit/Building Fund.
viii.
Refundable deposits, if any.
ix. Expenses on projects if any.
x.
Boarding and Lodging expenses
xi. Computer purchase if required.
xii. Air fare for joining the course (for study abroad)
xiii.
Examination Fee.

22

Amount

Rs. 10.00 lacs

Rate of interest: -The rate of interest on Cooperative Education Loan Facility

of

loan:-

For Studies in India Rs. 5.00 lacs

For Studies Abroad

(CEL)shall be 7.25% per annum. This rate is however subject to change from time

to time
Processing Charges:- No processing charges shall be charged under CEL.
Insurance of student: -Life Insurance Policy will be taken on the life of the
student borrower for an amount equal to the loan amount and should be assigned

in favor of Bank.
Security: - No collateral security is required up to a loan of 25000/-. This loan
shall be advanced against two good sureties. The loan above Rs.25000/- will be
advanced against collateral security by the applicant/guardian. The collateral
security can be in the form of land/building NSC/KVP/LIC Policy/bank deposits
in the name of student/parents/guardian. The valuation of the collateral security

shall be equivalent to the loan amount.

Disbursement of Loan: -The branch will get sanction of whole loan amount from
competent authority but will disburse the amount based on yearly expenses of
course. In the first year disbursement will be equivalent to the expenses of first
yearly only. Subsequently the loan amount for the next year will be disbursed after
successful completion of previous year. The disbursement of loan should be by
Demand Draft/bank cheque in favor of concerned university /college. In case of
purchase of equipment/books/computer the payment shall be made to the

applicant.
Recovery of Loan: - The recovery of principle amount will start after one year of
total duration of course or after 6 months of getting the job/employment by the

1.
2.
3.

applicant, whichever is earlier.

Basic Requirements: Admission Letter.
Mark Sheet / Certificate for passing last Board / University examination.
Students going abroad for study will have to submit the necessary documents such
as copy of Passport, copy of Admission Letter, copy of Form I-20 (for U.S),Visa,

etc.
4. Applicant should produce year-wise estimated total expenditure which is to be
incurred such as Tuition Fees, Term Fees, Living Expenses, Traveling, Cost
of Books, Examination Fees, etc. Hypothecation of stocks and book debts.
5. Progress Report of the studies of the student from time to time.

23

6. Disbursement of loan will be made at stages during the duration of the course
of the study as per the requirement as mentioned in the schedule of year wise
estimated expenditure.
7. Any scholarship received during the course of study must be intimated to the
bank and as far as possible such amount received should be adjusted in loan
account.
8. If study is discontinued for whatsoever reason, Bank must be informed and loan
amount must be paid immediately.
9. All other documents and information to be provided as per checklist provided with
the Application Form.
10. The loan documents should be executed by both the student and the Parent
/Guardian as C o-applicant.

24

REVIEW OF LITERATURE
A literature review is a critical and in depth evaluation of previous research. And it is
part of the scientific process. A literature review is a kind of text that aims to review
the current

knowledge which includes substantive findings and also it includes

theoretical as well as methodological contribution to a particular topic.

Satyasai and Badatya (2012) examined a few structural constraints that hamper the
credit delivery and has discussed some of the measures taken to improve the situation.
The public policy on rural credit in India has been focused on in studies
nationalisation as a means of providing cheaper credit to farmers. As a result, the
share of private moneylenders has decreased substantially from 93 per cent in early1950s to 31 per cent by 1991. Disturbingly enough, they have emerged as an
important source, more so for the resource-poor with a share of 39 per cent by 2002.
The multi agency system onset for giving a wide choice to farmers has turned out to
be ineffective due to deficiencies of design and architecture. Also, ailing cooperatives,
backtracked RRBs and commercial banks with waning interest in rural credit have
contributed to the ineffectiveness of the multi agency system, hampering the credit
delivery. Several measures have been taken to revitalise the system from time to time.
Cooperatives are being given a package assistance for revival following the
Vaidyanathan Committee Report. RRBs have been amalgamated and are being given
capital to cleanse up their balance sheets. Commercial banks have been successfully
involved in Farm Credit Package for doubling the credit and other initiatives of
Government of India.
Shah (2013) studied the credit cooperatives in Maharashtra & shown slower growth
in their membership and institutional financing. On the other hand, a faster growth has
been observed in out standings against loan advances. A lackadaisical attitude of
Primary Agriculture Cooperative Credit Societies(PACS) had been observed towards
SC/ST members, particularly in terms of their coverage, pattern of loan advances to
them and recovery pattern. The study has identified several issues that need to be
taken cognizance of to revitalize the rural credit delivery system through the
cooperatives. One of these is wide variations in total and crop loan advances across
25

various districts and regions of Maharashtra. A decline in the loan advances with rise
in GCA in the Konkan region is another issue, but the most important one among all
is the mounting overdues and non-performing assets (NPAs) of the cooperatives
operating in both forward and backward regions of Maharashtra.
Methews (2013) studied that the viability of two level credit institutions, viz. Sangli
District

Cooperative Bank and Buldana District

Cooperative Bank, has been

estimated. In order to rejuvenate the rural credit delivery system through cooperatives,
the major problems facing the system, viz. high transaction cost, poor repayment
performance, mounting NPAs, distributional aspect of credit, low coverage of SC/ST
members, etc. need to be tackled with more fiscal jurisprudence reserving exemplary
punishment for willful defaults, particularly by the large farmers.
Acharya (2014) studied the effect of focus (specialization) vs. diversification on the
return and the risk of banks using data from 105 Italian banks over the period 1993
1999. Specifically, he analyzed the trade offs between (loan portfolio) focus and
diversification using data that is able to identify loan exposures to different industries,
and to different sectors, on a bank-by-bank basis. Our results are consistent with a
theory that predicts a deterioration in the effectiveness of bank monitoring at high
levels of risk and upon lending expansion into newer or competitive industries. Our
most important finding is that both industrial and sectoral loan diversification reduce
bank return while endogenously producing riskier loans for high risk banks in our
sample. For low risk banks, these forms of diversification either produce an inefficient
riskreturn trade off or produce only a marginal improvement. A robust result that
emerges from our empirical findings is that diversification of bank assets is not
guaranteed to produce superior performance and/or greater safety for banks
Molyneux and Williams (2014) concluded that the study results was proposed on a
framework for benchmarking European co-operative banks and the rationalization of
their operational activities. The analysis is based on the Luenberges productivity
indicator. A key advantage of this method is that it allows for both input contraction
and output expansion in determining relative efficiencies and productivity changes.
Benchmarks are provided for improving the operations of those banks which perform
worse than others. Several interesting and useful managerial insights and implications
26

arise from the study. The general conclusion is that, between 1996 and 2003,
productivity increased for the majority of European co-operative banks analyzed
Mishra (2015) attempted to estimate the impact of the identified variables on the
financial margin of the Cooperative Banks in Punjab with the help of correlation and
multiple step wise regression approach. The ratio of own funds to working funds and
the ratio of recovery to demand are observed to be having significant influence on
financial margin, whereas the ratio of overdues to total loans is having a negative one.
A high use of own funds and timely recovery of previous loans, as a source for
funding further loans by the bank, help the financial margin in a positive way.
Shah (2015) conducted a case study of Sangli and Buldana District Cooperative
Banks regarding the financial health of credit cooperatives in Maharashtra and found
NPA or over dues as main culprit for deterioration in health of these banks. The study
revealed that both these banks showed a decline in their financial health and economic
viability during the late nineties as against the early nineties period.
Murthy (2016) concluded that after independence, the credit delivery in rural areas in
India was mostly confined to Cooperatives. In order to give boost to the rural finance
through commercial banks, in 1969 the government nationalized the commercial
banks. However, this nationalization also could not extend the credit in rural areas as
desired, mainly due to non availability of equivalent physical collateral security from
the poor. Though this nationalization resulted in increase in the outreach but could not
replace the existing informal credit supplied in rural areas through money lenders
which was easily accessible to the poor without much risk.
This project was undertaken to know about various loan activities of Cooperative
Bank towards customer. How it is carried out, who carries it out, why it is carried out,
and most important what is the benefit of carrying it out.

27

28

3.1 Need of the Study

The brief study on review of literature revealed the fact that number of studies have
been carried out in the area of loan and schemes but in Indian context, still a wide gap
exist in the research field with particular stress on the same aspect. In order to fill the
research gap of focus only on the loan procedure and schemes and the need aroused to
study consumer perception towards Loan Services Provided by CoOperative Bank

3.2 Scope of the Study

The scope of the study was limited to the customers visiting to Co-operative
Bank,Head Office,Jalandhar.
3.3 Objectives of the Study
The objectives can be taken as the purpose of this research as what aspects will
be covered under the research.
1. To get information about a cooperative bank & its functions etc.
2. To know the structure and various schemes of loans provided by the bank.
3. To know the reasons for taking loan from co-operative bank.
4. To know the satisfaction level of co-operative bank respondents.

29

30

RESEARCH METHODOLOGY
Research Methodology was a way to systematically solve the research problem. The
Research Methodology included the various methods and techniques for conducting a
Research. Marketing Research was the systematic design, collection, analysis and
reporting of data and finding relevant solution to a specific marketing situation or
problem. D.Slesinger and M.Stephenson in the encylopedia of Social Sciences define
Research as the manipulation of things, concepts or symbols for the purpose of
generalizing to extend, correct or verify knowledge, whether that knowledge aids in
construction of theory or in the practice of an art.
Research was, thus, an original contribution to the existing stock of knowledge
making for its advancement. The purpose of Research was to discover answers to the
Questions through the application of scientific procedures. The project had a specified
framework for collecting data in an effective manner. Such framework is called
Research Design. The research process consists of following steps:
4.1 Research Design
Research design is a pattern or an outline of research project working. It is a statement
of essentials elements of a study, those that provide the basic guidelines for the details
of the project. Further a research design is an arrangement of condition for collection
and analysis of data in manner that aims to combine relevance to the research purpose
with economy in procedure. Research design stands for advance planning of the
methods to be adopted for collecting the relevant data and the techniques to be used in
their analysis,keeping in view of the objectives of the research.Under this project,
Research design carried out was exploratory in nature
4.1.1. Conclusion Oriented Research:-Research designed to assist the decision
maker in the situation. In other words it was a research where various views
about the research had been given.
4.1.2. Descriptive Research:-A type of conclusive research which had as its major
objective the description of something-usually market characteristics or
functions. In other words descriptive research was a research where in
researcher has no control over variable. He just presented the picture which
had already been studied.

31

4.2 SAMPLING DESIGN

Sampling can be defined as the section of some part of an aggregate or totality on the
basis of which judgement or an inference about aggregate or totality was made. The
sampling design helps in decision making in the following areas:4.2.1 Sample Unit- The Study population includes the customers of bank and
sampling unit for study was Individual Customer
4.2.2 Sample Size- Sample size was the number of elements to be included in a study.
Keeping in mind all the constraints 50 respondents were selected.
4.2.3 Sampling Techniques- The sampling techniques used in this study was
judgement sampling.It is the type of sampling where the researcher selects the sample
according to his or her convenience.
4.3 DATA COLLECTION AND ANALYSIS
4.3.1 Methods of Data Collection- Collection of data is most significant stage of
every research. There are two types sourcesfrom where data is collected . These are :

Primary Sources

Secondary sources: Data has been collected both primary as well as secondary
sources as described below:

a. Primary Sources : The primary sources of data were circulars relating to the Bank
a)

Observation Method

b) Interview Method
c)

Structured Questionnaire

b. Secondary Sources: The secondary sources of the data were the information about
the CO-OPERATIVE BANK LTD.

Annual reports of the bank

Manual of instructions on loans and advances

Books

Articles and Research Papers

Internet

32

33

DATA ANALYSIS AND INTERPRETATION

The data has been processed and analysed by tabulation interpretation so that findings
can be communicated and can be easily understood. The findings are presented in the
best possible way. Tables and graphs had been used for illustration of findings of the
research.
Table 5.1: Demographic Profile of Customers
Demographics

No. of Respondents

Percentage

Age
25-35 years
35-45 years
45-55 years

10
20
10

20
40
20

Above 55 years

10

20

Total
Gender
Male
Female

50

100

30
20

60
40

Total
Occupation
Govt. Employees
Private Employees

50

100

30
15

60
30

Businessman

10

Others please specify

Total
Income (Rs.)/month
Below10,000

50

100

15

30

10,000-30,000
30,000-50,000
Above 50,000
Total

20
10
5
50

40
20
10
100

34

Statement 5.1 Preferences of the customers for the Loans

Table 5.2 Preference of the customers for the loans
Kind of Loan
House Loan
Personal loan
Agriculture Loan
Educational loan
Vehicle Loan
Other
Total

No. of Respondents

Percentage

16
15
6
8
3
2

32%
30%
12%
16%
6%
4%

50

100

Fig 5.1 Preference of the customers for the loans

Analysis and Interpretation

From the above we may observe that most of the respondents have taken house loans
& personal loans and less respondents prefer agriculture, educational and vehicle
loans.

35

Statement 5.2 Range of the Amount of the Loans

Table 5.3 Range of the Amount of the Loans
Loan Amount
Less than 20,000
20,000-50,000
50,000- 1 lac

No. of Respondent
4
10
6

Percentage
8%
20%
12%

More than 1 lac

30

60%

Total

50

100

Fig 5.2 Range of the Amount of the Loans

Analysis and Interpretation :

From the above we may observe that 8 % people prefer loan less than 20,000, 20 %
respondents prefer 20,000 to 50,000,12 % prefer more than 1 lac and 60% of the
respondents prefer more than 1 lac.

36

Statement 5.3 Preferable Term Loan

Table 5.4 Preferable Term Loan
Term of Loan
Less than 1 year
1 to 3 years
More than 3 years

No. of Respondents

Percentage

6
10
34

12%
21%
67%

50

100

Total

Fig 5.3 Preferable Term Loan

Interpretation :
We can easily see from the above data that 64 % respondents take loan for more than
3 years, 20 % take loan for 1 to 3 years and 12% take loan for the period of less than 1
year.

37

Statement 5.4 What Prompted The Customer to Take Loan from Cooperative
Bank.
Table 5.5 What Prompted The Customer to Take Loan from Cooperative Bank.
Reason for Taking Loan
Reasonable Rate of Interest
More Schemes
Less Formalities
Easy Repayment
Any other

No. of Respondents
6
5
17
19
3

Percentage
12%
10%
34%
38%
6%

50

100

Total

Fig 5.4 What Prompted The Customer to Take Loan from Cooperative Bank.

Analysis and Interpretation:

The result is that 38 % take loan because banks provide easy payment,34% take loans
because of less formalities and other respondents take loan because of reasonable rate
of interest, more schemes .
.

Statement 5.5 Average Time Taken for the Processing of the Loan
Table 5.6 Average Time Taken for the Processing of the Loan
38

Average Time for Processing of

No. of Respondents

Percentage

Loan
Less than 7 days
Between 7 to 14 days
More than 14 days

34
13
3

68%
26%
6%

Total

50

100

Fig 5.5 Average Time Taken for the Processing of the Loan

Analysis and Interpretation:

From the above we may observe that 68% respondents says that average time taken
for processing of the loan is less than 7 days, 26% says that it takes 7 14 days and 6
% says that it takes more than 14 days.

39

Statement 5.6 Ranking of the Facilities Provided by Cooperative Bank

Table 5.7 Ranking of the Facilities Provided by Cooperative Bank
Rank the Facility
Above average
Average
Below average

No. of Respondents
16
30
4

Percentage
32%
60%
8%

50

100

TOTAL

Fig 5.6 Ranking of the Facilities Provided by Cooperative Bank:

Analysis and Interpretation:

Here we may see that 60% of the respondent says that facility provided by the bank
are average, 32% say that its above average and 8% says that its below average.

40

Statement 5.7 Customers Ranking for the Service of the Bank

Table 5.8 Customers Ranking for the Service of the Bank
Rank the customer services
Excellent
Good

No. of Respondents
12
26

Percentage
24%
52%

Average
Poor

12
1

24%
2%

Total

50

100

Table 5.7 Customers Ranking for the Service of the Bank

Analysis and Interpretation :

The study shows that 52% of the respondents says that customer service of the bank is
good, 24% says that it is excellent and another 24 % says its average and only 2 %
says its poor.

41

Statement 5.8 Satisfaction of the Customer with the Amount & Period of
Installments
Table 5.9 Satisfaction of the Customer with the Amount & Period of Installments
Satisfaction
Yes
No
Can`t Say
Total

No. of Respondents

Percentage

34
6
10

68%
12%
20 %

50

100

Fig 5.8 Satisfaction of the Customer with the Amount & Period of Installments

Analysis and Interpretation:

This Study shows that 68% are satisfied with the amount and period of installment,
12% are not satisfied and 20 % cant say.

42

Statement 5.9 Preferable Banks for Borrowing Facilities

Table 5.10: Preferable Banks for Borrowing Facilities.
Preferable Bank

No. of Respondents

Percentage

Public banks

14%

Private banks

15

30%

Cooperative bank

28

56%

Total

50

100

Table 5.9: Preferable Banks for Borrowing Facilities.

Analysis and Interpretation:

In the above table, there is more or less equal result, depicts that 56 % of the
respondents will prefer loans from co-operative banks, 30 % from the private banks
and 14 % from the public banks.
43

44

Statement 5.10 Customers who would like to Refer Co.op. Bank to their Friends
& Relatives
Table 5.11: Customers who would like to Refer Co.op.Bank to their Friends &
Relatives.
Bank Refer to Others
Always
Sometimes
Never
Total

No. of Respondents
39
9
2
50

Percentage
78%
18%
4%
100

Fig 5.10: Customers who would like to Refer Co.op.Bank to their Friends &
Relatives.

Analysis and Interpretation:

From the above figure, it was clear that 78% of the respondents would like to refer the
bank to their friends and relatives which shows that they are satisfied from the
services and lending practices of the bank.

45

46

47

FINDINGS OF THE STUDY

After conducting the survey, the various findings of the research are mentioned
below:
Most of the respondents have taken house loans & personal loans and less
respondents prefer agriculture, educational and vehicle loans.
8 % people prefer loan less than 20,000, 20 % respondents prefer 20,000 to
50,000,12 % prefer more than 1 lac and 60% of the respondents prefer more than
1 lac.
64 % respondents take loan for more than 3 years, 20 % take loan for 1 to 3 years
and 12% take loan for the period of less than 1 year.
38 % take loan because banks provide easy payment,34% take loans because of
less formalities and other respondents take loan because of reasonable rate of
interest, more schemes .
68% respondents says that average time taken for processing of the loan is less
than 7 days, 26% says that it takes 7 14 days and 6 % says that it takes more
than 14 days.
60% of the respondent says that facility provided by the bank are average, 32%
say that its above average and 8% says that its below average.
52% of the respondents says that customer service of the bank is good, 24% says
that it is excellent and another 24 % says its average and only 2 % says its poor.
68% respondents are satisfied with the amount and period of installment, 12% are
not satisfied and 20 % cant say.
There is more or less equal result, depicts that 56 % of the respondents will prefer
loans from co-operative banks, 30 % from the private banks and 14 % from the
public banks.
78% of the respondents would like to refer the bank to their friends and relatives
which shows that they are satisfied from the services and lending practices of the
bank.

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49

7.1 Conclusion
The main conclusion of this training report is that the various the bank is offering various loans
schemes for the customers know about customer which is very beneficial for the rural area as well as
urban area but banks lacks full services for the customers like ATM service, Phone Banking,Net
Banking etc. The feedback From the customer regarding the working of bank s and their loan schemes
help me in gaining more practical knowledge. During this training period I have learned about lots of
things, I am quite able to know about the main activities which are concerned with the loans of the
bank. There are lots of financial activities which are provided by the bank for the assistance of
customer. Banks are just mediators which gives direct assistance to customer. The persons which are
satisfied with the service of the banks are from rural area.

50

7.2 Recommendations
The research has been conducted to know consumer perception towards Mutual
Funds. Various view point has been given by different people to know the Position.
Some of the valuable recommendations out of those suggestions are included in this
research:
If

the

interest

rate

has

been

reduced

or

has

become

unfavorable to the customer, the bank should inform him.

The bank should explain clearly all the terms and conditions of loans that the
customer wants to availing the local language and nothing should be concealed.
The bank should act as per the standing instructions of the customers, and thus
avoid inconvenience.
The bank should keep the information of the Accounts of the customer
confidential.
The sanction of rejection of the loan applied by the customer should be conveyed
in writing.
The loan documents should be filled in the presence of the customer.
There should be complaint boxes installed in the bank that are opened weekly and
proper redressal of complaints is done.
All the counter staff should be thoroughly trained with all the schemes/rules and
regulations of the bank, so that the customer gets one window service.
Branches should be computerized.
Rate of interest should be reviewed periodically.
Single men Branches are functioning so, there is a great operation risk in the
Bank and management should pay attention about it.

51

52

REFERENCES

Acharya

and Customer Satisfaction; pp95-144 http://www.bank.org.uk/internet-banking

Methews et. al. (2013). Loyalty and Satisfaction Construct in Retail Banking - An

et.

al.

(2014).

Banking

Markets:

Productivity,Risk

Empirical Study onBank Customers, The Chittagong University Journal of

Business Administration, Vol. 19, 2004 http://www.bank.org.uk/internet-banking

Mishra P. (2015). Means of Improving Disclosure; Nomura Capital Market

Review, Vol. 8, No.3, pp. 14-20, Autumn 2005.

Murthy et. al. (2016) Measuring Customer Relationships; The IUP Journal of
Marketing Management, Vol. VIII, Nos. 3 & 4, pp. 74-95, August & November

2009 http://ssrn.com/abstract=730723
Molyneux et. al. and Williams et. al. (2014). Tripe the Relative Efficiency of

Banks; 20th Australasian Finance & Banking Conference 2007 Paper .

Satyasai et. al. and Badatya P. (2012). Impact of Service Quality
on Customer Loyalty, Commitment and Trust in the Indian Banking Sector; The
IUP Journal of Marketing Management, Vol. VIII, Nos. 3 & 4, pp. 74-95, August

& November 2009.

Shah et. al. (2013). Customer Satisfaction with Service Quality; The IUP Journal

of Management Research, Vol. VIII, No. 9, pp. 7-17, September 2013

Shah et. al. (2015). Impact of Service Quality on Customer Loyalty, Commitment
and Trust in the Indian Banking Sector; The IUP Journal of Marketing

Management, Vol. VIII, Nos. 3 & 4, pp. 74-95, August & November 2009
Taisley M. (2016). Customer Satisfaction with Service Quality; The IUP Journal
of Management Research, Vol. VIII, No. 9, pp. 7-17, September 2016.

53

54

QUESTIONNAIRE
Dear Respondent,
I am a student of BBA III Semester at Apeejay Institute of Management Technical
Campus, Jalandhar is conducting a research on the topic Consumer Perception
towards Loan Services Provided by Co-Operative Bank. Kindly help me to

gather the information by sparing your 5-10 minutes for filling the questionnaire. I
will be very thankful. I assure you that the information will be kept confidential.
Q1. Preferences of the customers for the loans ?
House Loan
Personal Loan
Agriculture Loan
Educational Loan
Vehicle Loan
Others
Q2. Range of the Amount of Loans ?
Less Than 20,000
20,000 50,000
50,000-1 LAC
More Than 1 Lac
Q3. Preferable Term Loan ?
Less than 1 year
1 to 3 year
More than 3 years
Q4.What prompted the customers to take loan from cooperative banks?
Reasonable Rate of Interest
More Schemes
More than 3 years
55

 Easy Repayment
Any Other
Q5.Average time taken for the processing of the loan ?
Less than 7 days
Between 7 to 14 days
More than 14 days
Q6.Ranking of the facilities provided by the co-op. banks ?
Above Average
Average
Below Average
Q7.Customers ranking for service of the bank ?
Excellent

Good

Average
Poor
Q8.Satisfaction of the customers with the amount & period of installment?
Yes

No

Cant Say

Q9.Preferable banks for borrowing facilities ?

Private Bank
Public bank

Cooperative Bank

Q10.Customers who would like to refer the co-op. banks to their friends and
relatives?
Always
56

 Sometimes

Never

57