Arushi Project
Arushi Project
CHAPTER-1
INTRODUCTION
FINANCE
Finance is the lifeblood of the business. In our present day economy, finance is
defined as the provisions of the time when it is required. In fact, finance is so indispensable
today that just as circulation of blood is essential in the human body for maintaining life,
finance is very essential to smooth running of all the activities. Finance remains as a focus of
all activities. Without adequate finance no enterprise can possible to accomplish its
objectives. The success of enterprise depends upon the available and optimum utilization of
finance. All business organization requires finance and finance is one of the most important
resources of an organization.
DEFINITION:
The financing function includes day-to-day concern for the use and control of funds
as well as long range planning which is involved with determining future requirements for
fund and optimum uses to which it may be put. The financial policies of the firm or
exemplified in its basic decision about methods of financing growth; dividend distribution
policy, relation with lending institutions, economic evolution of alternative investments in
plant and equipments and other activities which involve uses or sources of funds.
- L.A. and C.E. Gubellini
Business finance may be broadly defined as the activity concerned with planning,
raising, controlling and administrating of funds used in the business.
- H. Guthman and H. Douggal
FINANCIAL MANAGEMENT
Financial management is the effective and efficient utilization of financial resources.
It means creating a balance among financial planning, procurement of funds, profit
administration and sources of funds. The financial management is defined as follows:
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DEFINITION:
Financial management is an area of financial decision making harmonizing
individual motives and enterprise goal.
- Weston and Brigham
Financial management is the application of the planning and control functions of the
finance function.
- Howard and Upton
OBJECTIVES OF FINANCE
The main objective of a business is to maximize the owner economic welfare. This
objective can be achieve by
1. Profit maximization
2. Wealth maximization
Profit maximization:
Profit is the engine that drives the business enterprise. It is also a measure of
efficiency of a business enterprise.
This objective of financial management states that these actions that increase profits
should be undertaken and those that decreases profit are to be avoided.
Wealth maximization:
Wealth is defined as net present value. Wealth maximization is the appropriate and
operationally feasible objective of enterprises. Wealth maximization means maximizing the
net present value of a course of action.
MEANING:
Bank is one of the financial institution which deals with the money and credit. It
accepts the deposits from the general public and they lend the funds to the needed public only
on demand.
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DEFINITION:
Prof. Kinley defines a bank as an establishment which makes to individuals such
advances of money as may be required and safely made and to which individuals entrust
money which is not required by them for use.
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(b) Unsecured loans: Are those loans which are not covered by the security of tangible
assets. Such loans are granted to firms/institutions against the personal security of the owner,
manager or director.
There are various types of securities which may be offered against loans granted, but
all of those are not acceptable to the banks. The types of securities generally accepted by the
bank are the following:
1)
2)
3)
4)
5)
6)
7)
(II)
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The loan application form duly filled in should be submitted to the bank along with
the relevant documents.
(III)
Sanctioning of loan
The bank scrutinizes the documents submitted and determines the credit worthiness
of the applicant. If it is found to be feasible, the loan is sanctioned. If the loan is for Rs 5000
or less,
normally the Branch Manager himself can take the decision and sanction the loan. In case the
amount of loan is more than Rs 5000, the application is considered at regional, zonal or head
office level, depending on the amount of loan.
(IV)
will have to execute an agreement with the bank regarding terms and condition for the
amount of loan raised.
(V)
immovable properties, shares, debentures, fixed deposit receipts, and other documents, like,
Kisan Vikas Patra, National Savings Certificate, as per agreement. When the borrower
completes all the formalities, he is allowed to get the amount of loan/advance/ over draft as
sanctioned by the bank. In case of discounting of bills, the bank credits the amount of bill to
the customers account before the realization of the bill and thus, makes available the fund. In
case, the bill is dishonored on due date, the amount due on the bill together with interest and
other charges are payable by the party whose bill is discounted.
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CHAPTER-2
RESEARCH DESIGN OF THE STUDY
Research:
Research is the process of systematic and in depth study or search for any particular
topic subject on area of investigation backed by collection, computation, presentation and
interpretation of relevant details or data.
Research design:
Research design is a purposeful scheme of action proposed to be carried out in a
sequence during the process of problem to be tackled. It is only a guideline for a researcher to
enable him to keep track of his actions and to know whether he was moving in the right
direction in order to achieve his goal.
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Methodology:
Primary data:
The major portion of the data in the report is collected from the bank manager, bank
employees, bank customers and from the branch website.
Secondary data:
Books
Articles
Internet
News papers
Annual report
Sl. No.
CHAPTER
SUMMARY
Page 7
Chapter-1
Introduction
Chapter-2
Chapter-3
Company Profile
Chapter-4
Chapter-5
Chapter-6
Bibliography
Chapter Scheme:
CHAPTER-3
COMPANY PROFILE
STATE BANK OF MYSORE
HISTORY OF THE BANK
The Bank was incorporated on May 13, 1913 as a public limited company pursuant to
the Mysore Companies Regulation No.III of 1895 as The Bank of Mysore Limited. In
1953, the Bank of Mysore Limited was appointed as an agent of the Reserve Bank of India to
undertake government business and treasury operations. Under the patronage of the erstwhile
Govt. of Mysore, at the instance of the banking committee headed by the great EngineerStatesman, Late Dr. Sir M. Visvesvaraya . Subsequently, in March 1960, the Bank became
an associate of State Bank of India. State Bank of India holds 92.33% of shares. The Banks
shares are listed in Bangalore, Chennai and Mumbai stock exchanges.
Branch Network
The bank has a widespread network of 690 branches (as on 30.06.2010) and 21
extension counters spread all over India which includes 5 specialised SSI branches, 4
industrial finance branches, 3 corporate accounts branches, 4 specialised personal banking
Dept. of Commerce & Management, .G.F.G.C. Dandinashivara
Page 8
Human Resources
The bank has a dedicated workforce of 10028 employees consisting of 3128
supervisory staff, 6900 non-supervisory staff (as on 30.06.2010). The State Bank of Indias
Chairman is also the Chairman of its associate State Bank of Mysore. There is a Chief
General Manager as well as 6 General Managers who assist the Managing Director of the
Bank. The skill and competence of the employees have been kept updated to meet the
requirement of our customers keeping in view the changes in the environment.
Financial Profile
The paid up capital of the Bank is 360 Millions as on 30.06.2010 out of which State
Bank of India holds 92.33%. The net worth of the Bank as on 30.06.2010 is Rs. 2073.40
Crores and the bank has achieved a capital adequacy ratio of 12.42% as at the end of
31.03.2010. The Bank has an enviable track record of earning profits continuously and
uninterrupted payment of dividend since its inception in 1913. The bank earned a net profit
of Rs. 445.77 Crores for the year ended March 2010 and earnings per share is at Rs. 124/-
Business Profile
Following table will showcase the business profile of State Bank of Mysore as on
March 2010 (Figures are in Rs. crores):
Total Deposits
Total Advances
Export Credit
Forex Merchant
39488.95
30603.18
1158.13
30678.46
Turnover
Forex Trading Turnover
125156.64
Forex Services
State Bank of Mysore offers the following forex services to the NRIs:
Dept. of Commerce & Management, .G.F.G.C. Dandinashivara
Page 9
NRI Deposits
Money Transfer to India through Western Union
Remittance facility through State Bank of India, New York Branch
Remittance to India-Global Link Service (GLS)
Organizational Setup
While the Chairman of State Bank of India is also the Chairman of the Bank, The
Managing Director of assisted by a Chief General Manager and 6 General Managers.
General Manager
(Operations)
General Manager
(Treasury)
General Manager
(Technology)
General Manager
Page 10
Board of Directors
Shri O P Bhatt
Chairman Under Section 25(1)(a)
of State Bank of India (Subsidiary Banks) Act 1959
Page 11
Shri S A Thimmiah
Shri K Anand
Nominated by State Bank of
India Under Section 25(1)(c) of
the Act ibid
Shri B S Gopalakrishna
Nominated by Reserve Bank of
India Under Section 25(1) (c)
of the Act ibid
Shri D D Maheshwari
Nominated by Governement of
India Under Section 25(1)(e) of
the Act ibid
Page 12
Milestone
1913
1953
1959
The Bank of Mysore Limited was constituted as a subsidiary of State Bank of India,
pursuant to the notification of the State Bank of India (Subsidiary Banks) Act, 1959.
1961
1963
1996
Issuance of 24,00,000 Equity Shares of the Bank having a face value of Rs. 100 each
for
cash at a premium of Rs.250/- per share
1998
2003
2005
2008
The aggregate of the advances and deposits of the Bank crossed Rs.50,000 crores
2009
Page 13
Corporate Structure
EXECUTIVE BOARD
CM, MD SECT.
MANAGING DIRECTOR
DGM, COMPLIANCE
CHIEF GENERAL
CGM
MANAGER
ZONE No. of
Regions
BANGALORE I - 4
BA NGALORE II - 4
CENTRAL - 3
MYSORE - 5
HUBLI - 4
DELHI REGIONAL
OFFICE
MUMBAI Reg.
OFFICE
BA NGALORE BRA
NCH
DGM [ HR ]
DGM [ LAW ]
CM (BOD)
DGM [BPR]
AGM, G SEVA
DGM [ F & A ]
CM [SHARES &
BONDS]
DGM [FOREIGN
DEPT.]
AGM
[ PREMISES ]
AGM
[ SECURITY ]
DGM,Intgd.
TREASURY,
MUMBAI
General Manager
General Manager
[P&D]
C&I)
General
Manager[Tech]
&
Chief Risk Officer
DGM
[ CREDIT)
CAB
Mumbai
New Delhi
Bangalore
DGM [ AM &
R]
DGM [IT
SERVICES]
AGM [ISS CELL]
AGM [POLICY &
PLG.CELL]
DGM
[INTGD.RISK
MGMT]
CM [S&P]
DGM [ D&RB ]
AGM
[ PLANNING ]
CM [ O P D ]
AGM
[ MARKETING ]
CM [ PUBLIC
REL. ]
AGM [ HOCC ]
CM [ C & I ]
CM [Liaison]
General Manager
[V&I] & CVO
DGMINSPECTION
DGM [ INSPN.
MOBILE ]
DGM (CREDIT
AUDIT)
Page 14
TECHNOLOGY INCENTIVES
The Bank made significant investment in order to upgrade technology and the major
developments are as under:
Page 15
>>Transaction based Internet Banking in SBM has been in operation since JULY 2005
>> Customers of any branch of State Bank of Mysore can avail this facility
>>It is a 24 X 7, 365 days service channel for use anywhere, anytime
>> The Channel has real time transaction processing capability and is supporting various
business initiatives suitable to all segments of customers
>> Provides for select banking operations through the Internet and enables customers to
obtain information
5. The mismatch between Assets and Liabilities could affect the net profit.
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1. Changes to the prudential norms by the RBI requiring banks to maintain higher
provisioning norms would adversely affect the profitability.
2. Financial instability in other countries, particularly emerging market countries, could
disrupt the Banks business and affect the price of the Banks Equity Shares.
3. Hostilities, terrorist attacks, civil unrest and other acts of violence could adversely affect
the financial markets and the Banks business.
4. Natural calamities could have a negative impact on the Indian economy and harm the
Banks Business.
5. Political instability and significant changes in the Governments policy on liberalisation of
the Indian economy could impact the Banks financial results and prospects.
CHAPTER- 4
THEORETICAL BACKGROUND OF THE STUDY
I PERSONAL LOANS
1. Mortgage Loan
2. Housing Loan
3. Happy Home- Consumer Durable Loan Scheme
4. Gnanamitra Educational Loan
5. Personal Loans
6. Loan for purchase of residential site / plot
7. My Bank Arakshak
8. My Bank Adhyapak
9. My Bank Utsav
10. Comprehensive Car loan for new vehicles
11. Sanjeevini - New product scheme for high cost treatment
12. My Bank Samachar
13. Gagan Mitra
14. My Bank Udyogi Gnanamitra
Dept. of Commerce & Management, .G.F.G.C. Dandinashivara
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II AGRICULTURAL LOANS
1. Kisan Gold Card Scheme
2. Kisan Credit Card Scheme
3. Gramin Bhandaran Yojana (GBY)
4. Scheme for Combined Harvesters
5. Kisan Chakra Scheme
6. Agriclinics and Agri business centers. (ABC 10 dated 30.08.01)
7. Solar Photo Voltaic Pumpsets(SPV) for Irrigations
8. Scheme for purchase of land for agricultural purposes
9. Scheme for development of Vanilla
10. Establishment of Bio-Fertiliser Units (Model Scheme)
11. Produce Marketing Loan (PML)
12. Drip Irrigation
13. Sprinkler Irrigation
14. Farm Mechanisation- SBM Agri Farm Scheme
15. Swarna Mitra Scheme
16. My Krishigen
17. Scheme for cultivation of Gherkins
18. Scheme for financing LPG connection in rural areas
19. Scheme for financing to tenant farmers & Oral lessees
20. Rain water harvesting scheme for SC/ST farmers
21. Scheme for financing of Jatropha plantation
22. Scheme for financing to cultivation of patchouli
23. General Credit Card
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3. Retail Trade- Advances to Retail Traders (Other than Fertilizers & Mineral Oils)
4. MSEs- Service Sector (Small Business Enterprises)
5. Professionals & Self-Employed persons
6. Transport Operators
7. Laghu Udyami Credit Card Scheme
8. Stree Shakthi package for Women entrepreneurs
9. MyBank Sanchari Suvidha- Finance to Hotels, Restaurants and Lodges
10. Annapurna- Scheme for financing Women for establishing Food Catering Units
11. Mybank Doctor - New product to assist Doctors & Medical professionals for setting up
Clinic/Nursing Home
12. Flexi (SSI) Term Loan
13. SME Credit Plus
14. Green Auto
15. Swarojgar Credit Card scheme
16. Mybank Professional Plus
17. Artisans Credit card (ACC)
18. Stand-by-line of Credit (Term Loan) for SSI and C&I Borrowers
19. Reimbursement Facility under Term Loans: (SIB and C&I Segment borrowers)
20. "Sooryadeepa": Scheme for Financing Solar Home-lighting system
21. Rice Mill Plus
22. Contractor Plus
23. Channel financing to ACC Cement Dealers
24. State wise roadmap for increase of credit to minority over the next two years
25. Priority Sector Lending (PSL) target for Minority Communities as on September 2008 :
State-wise report.
Page 19
MIN(Rs.)
10000
MAX(Rs.)
10.00 lacs
10000
20.00 lacs
Abroad
Dept. of Commerce & Management, .G.F.G.C. Dandinashivara
Page 20
Margin
Upto Rs. 4.00 lacs
Above Rs. 4.00 lacs
For studies in India
For studies abroad
Nil
5%
15%
Rate of interest
Fixed rate-
Page 21
Security
Amount
Upto Rs. 4.00
Security
NIL
lacs
Above Rs. 4.00
10.00 lacs
Repayment
Completion of course + 1 year or 6 months after getting a job, whichever is
earlier.The interest to be debited monthly on simple basis during the repayment holiday /
moratorium period. Penal interest @2% will be charged for amount above Rs. 2 lacs for the
overdue amount and overdue period. Interest concession of 1% per annum is available,
provided the interest is repaid during moratorium period as and when the interest is
applied.
2. PERSONAL LOAN
Eligibility
Dept. of Commerce & Management, .G.F.G.C. Dandinashivara
Page 22
Page 23
Individuals of age 21 to 65 years and salaried class with annual income of Rs. 75000/& above. Self-employed & Professionals with annual income of Rs. 75000/- & above.
Loan amount:
30times of Net Monthly Income for salaried persons.
2.5 times of Net Annual Income for others.
Margin:
Amount
Loans upto
Margin
15%
Rs.6.00 lacs
Above Rs. 6.00
30%
lacs
Rate of interest
Fixed rate: During 1st year 8.25%
During 2nd & 3rd year 10.25%
Floating rate: For 4th & 5th year 3.75% above Base rate, present effective rate
being 11.50%
For 6th & 7th year 4.00% above Base rate, present effective rate being 11.75%
Security:
Hypothecation over the car .
Guarantee of spouse if employed.
3rd party guarantee good for the loan amount.
Insurance:
Comprehensive insurance for full value of the vehicle. FREE ACCIDENT INSURANCE
COVER (DEATH RISK ONLY)
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Disbursal:
Direct to the supplier.
Repayment:
Loan should be repaid within 7 years from the date of original purchase of the vehicle.
4. HOUSING LOAN
Under Personal Segment, You can avail a loan for
Loans from State Bank of Mysore are cheaper than housing finance agencies /
companies.
Nominal processing charges.
No administration charges.
No commitment charges.
Page 25
25%
30%
50%
55%
55%
Repayment period
25 years
20 years
15 years
Margin
Amount
Margin (%)
20%
20%
25%
40%
Interest
Penal interest of 1% in case of default of three or more consecutive instalments.
Rate of Interest
NAME OF THE
PERIOD
SCHEME
HOUSING LOANS
Rate Of Interest
(Base Rate 7.75%p.a)
Upto 5 years
9.25%
Above 5 to 15 years
9.50%
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HOUSING LOANS
Above 15 to
9.75%
inclusive of 25 years
Upto 5 years
9.25%
Above 5 to 15 years
9.50%
Above 15 to
9.75%
inclusive of 25 years
Upto 5 years
9.75%
Above 5 to 15 years
10.00%
Above 15 to
10.25%
HOUSING LOANS
(Above Rs.30 Lacs)
inclusive of 25 years
Processing charges
Loan Amount
Up to Rs.5 lakhs
Above Rs.5 lakhs & upto Rs.10 lakhs
Above Rs. 10 lakhs & upto Rs.20 lakhs
Above Rs.20 lakhs & upto Rs.50 lakhs
Above Rs.50 lakhs & upto Rs. 1 Cr
Above Rs. 1 Crore & upto Rs. 5 Cr
Above Rs. 5 Crores
tax) Rs.
1000/2000/5000/7000/8000/10000/20000/-
Insurance
Dept. of Commerce & Management, .G.F.G.C. Dandinashivara
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The house property has to be insured covering all risks. Group insurance is available
to cover the life of the borrower on payment of one time upfront premium.
Disbursement
Direct to the sellers in case of purchase.
For Construction / Repairs / Renovations in a phased manner.
Repayment
Repayable in monthly installments. Repayment period ranging from 5 to 25 years,
including a moratorium period ranging from 6 to18 months from the date of the first
disbursement.
5. MYBANK ADHYAPAK
Personal loan scheme for teacher community.
Eligibility
Permanent Teachers / Non-Teaching Staff of Central / State Govt. Educational
Institutions and also Teachers and Non-Teaching Staff of Govt. Recognised Schools /
Colleges / Aided Institutions.
Purpose
Personal Loan for any purpose including purchase of consumer durables.
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Loan amount
10 times net monthly income with a maximum of Rs. 1.00 lac.
Income of Spouse
Spouse income may be added to arrive at the eligible loan amount provided spouse is also
employed and stands as guarantor.
Type of account
Demand loan account.
Margin
Nil.
Repayment
Maximum of 36 months in equated monthly installments.
Rate of interest
13.75%.
Processing Fee
Rs. 250/- flat.
Security
Upto Rs. 25000/- Nil (only check off facility)
Above Rs. 25000/- check off facility. NSC, LIC policy may be insisted for security wherever
possible or third party guarantee of equal means.
II AGRICULTURAL LOANS
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1. Drip Irrigation
It is a method of irrigation in which the required quantity of water is supplied at low
pressure to the root Zone of each plant drop by drop by drippers / emitters through a network
of pipes so that the plants would not experience any stress through growing phase.
Why Drip Irrigation?
Drip irrigation is a boon to the farmers in arid and semi arid areas where water is
scarce. Main advantages of drip are
Crops
The system can be used for all plants. However it is ideal for wide spaced high value
Horticultural crops viz. coconut, plantation crops, fruit crops, medicinal plants, spices, flower
plants etc.
Components of drip system
Water supply pump, filters, fertilizer mixing tank, control system, main and sub main
lines, laterals, micro-tubes and drippers.
Unit Cost
As approved by NABARD for various crops.
Subsidy
Capital subsidy on Drip irrigation equipments enhanced to 50% for all farmers and
100 % for SC/STs and Horticulture crops in Bijapur Districts.
Rate of interest
13.75% (1.00% above SBMPLR)
Repayment
10-15 years with a grace period of 11 months in case of yielding plantations
In case of new plantations grace period up to the period of maturity / yielding
For crops like sugarcane 7 years coinciding with harvesting / marketing.
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Quantum of loan
Should not exceed Rs.2 lacs by way of ATL and investment on land development and
provision of irrigation should not exceed 50% of the cost of land.
Margin
20% or prescribed by RBI from time to time.
Interest
13.75% (As applicable to ATLs)
Repayment
7-10 years in half yearly / yearly instalments including a moratorium of 24 months.
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Drawing power
Appropriate drawing may be fixed based on seasonality in credit requirements,
projected cash flow / repayment , peak level requirement
Rate of interest
13.25% (0.50% above SBMPLR)
Repayment
KCC is like revolving cash credit limit valid for 3 years subject to annual review.
Repayment to coincide with harvesting / marketing. Any number of withdrawals and
repayment within the limit allowed.
Credit card
A credit card cum pass book issued to the farmer borrower.
Mode of withdrawal
Withdrawal slips.
Other terms
As applicable to Agricultural Advances.
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Repayment Period
Maximum 9 years.
Registration of the tractor
The tractor should be registered with the concerned Regional Transport Authority.
Insurance
Comprehensive Insurance cover should be obtained in respect of the assets acquired.
Premium for first year will be paid by the concerned Company dealers.
Selection of Tractors
Bank may consider financing of tractors on the basis of viability of individual
proposals but the choice and selection of such tractors may be left to the choice of individual
beneficiaries.
Security
As per Banks norms.
(a) Hypothecation of Tractors.
(b) Equitable Mortgage of lands.
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Extent of Finance
Credit limits up to Rs.20 lacs.
Rate of Interest
As per prevailing rates from time to time.
Margin
No margin upto Rs. 25000/- 15 to 20%, for credit limits exceeding Rs. 25000/Security
Assets created out of Banks finance collateral security as per Banks norm.
Security
Primary:
Assets created out of Bank finance.
Collateral:
Obtention of collateral Security exempted.
Up to Rs. 5 lacs.
Over Rs. 5 lacs and up to Rs. 25 lacs, based on good track record and satisfactory
financial position.
Dept. of Commerce & Management, .G.F.G.C. Dandinashivara
Page 35
Interest
As per prevailing rates from time to time.
Export Finance
Establishment of Letter of Credit.
Pre-shipment finance.
Post-shipment finance.
Assistance against Duty draw back.
3. TRANSPORT OPERATORS
Eligibility
Advances to Small Road and Water Transport operators.
Extent of Finance
Not exceeding Rs 200 lakhs.
Rate of Interest
As per prevailing rates from time to time.
Margins
No margin upto Rs. 25000/15 to 25% for credit limit exceeding Rs. 25000/Security
Assets created out of Banks finance.
Collateral security as per Banks norm.
Page 36
Branch Manager and the field Staff will provide necessary inputs and assistance to
those women who do not plan to set up ful-fledged industrial ventures but would like to do
something at home.
Concession in Margin :
Retail Traders
Category Limit Slab in Rs.
Over Rs. 5000/- upto Rs. 25000/-
Margin concession
NIL
5%
Business Enterprises
Category Limit Slab in Rs.
Upto Rs. 25000/Over Rs. 25000/- upto Rs. 1.00 lac
Margin concession
NIL
5%
Margin concession
NIL
5%
SSI
Category Limit Slab in Rs.
Upto Rs. 25000/Above Rs. 25000/-
Margin concession
NIL
5%
Interest concessions
No interest concession in respect of SSI units enjoying credit limits over Rs.25000/- but
up to Rs.2 lacs.
Above Rs.2 lacs and up to Rs.50 lacs, interest rate lower by 0.50% than the applicable
rate.
For Small Business enterprises under the scheme, interest rate lower by 0.50% than the
applicable rate.
For advances to professionals and self employed persons interest rate lower by 0.50%
than the applicable rate.
No interest concession to advances granted to private retail traders.
Page 37
Page 38
Term Loan.
Amount
Minimum of Rs.2 Lacs and maximum of Rs.25 Lacs.
Handy Loan can be availed for :
o Holding stocks / Receivables.
o Acquisition of land and buildings for establishing trading house.
o Building construction & renovation of offices, showrooms, godowns etc.
o Purchase of equipment, furniture & vehicles.
o Augmenting networking capital.
o Payment of long term deposits / advances to supplier.
o General trade purposes.
Eligibility
Applicants should be engaged in trade, services activities, and have rating of SBM 1 to 4
Repayment
Repayable between 3 to 5 years.
Quantum of loan
Upto 75% of the project cost.
Interest
SBM Prime Lending Rate plus spread as per Credit Risk Assessment System.
Security
Hypothecation of current assets/Equitable Mortgage of Immovable property.
Insurance
Comprehensive insurance of all securities.
Audited Financial Statements must for limits above Rs.25 lacs.
Page 39
year.
Personal guarantee of the promoters / partners / directors of the company.
Immovable property to be mortgaged to the bank. Third party guarantee is also accepted.
Page 40
Eligible Customers
Educational Institutions with adequate source of income.
Purpose
Construction / Renovation / repairing of school/College buildings; Purchase of Electronic
equipments such as computers; Laboratory Equipments, Library books etc.
Quantum of Finance
Minimum Rs.50000/Maximum Rs. 25.00 lacs
Margin
15% of the cost.
Period of repayment
Maximum period of 7 years.
Rate of interest
Amount
Rate of Interest(%)
Primary Security
Equitable mortgage of the immovable property / hypothecation of assets acquired out of the
Bank loan.
Collateral Security
Personal guarantee of key persons / Trustees / Promoters. Equitable mortgage of immovable
property.
Insurance
Adequate Insurance cover to be obtained.
Page 41
Page 42
CHAPTER-5
DATA ANALYSIS AND INTERPRETATION
Table No.1
Table showing the respondents educational qualification.
Sl. No.
Educational Qualification
1.
Under Graduates
10
20
2.
Graduates
16
32
3.
Post Graduates
4.
Total
Others
20
50
40
100
Interpretation: The above table shows that, out of total respondents 40% of them lies under
Others category, 32% of them lies under Graduates category, 20% of them are Under
graduates and 8% of them are Post graduates.
Conclusion: It can be easily inferred that the majority of respondents comes under Other
educational group. Among all the respondents 40%(majority) of them falls under Others
category and 8%(minority) of them falls under Post Graduate category.
Page 43
Graph No. 1
Graph showing the respondents educational qualification.
Educational Qualification
45%
40%
35%
30%
25%
20%
40%
32%
15%
10%
20%
5%
8%
0%
Under Graduates
Graduates
Post Graduates
Others
Table No. 2
Table showing number of respondents on the basis of occupation.
Page 44
Sl. No.
Occupation
No. of respondents
Percentage (%)
1.
Salaried
21
42
2.
Retired
10
20
3.
Self-employed
11
22
4.
Others
16
50
100
Total
Interpretation: The above table clearly shows that out of 50 respondents 21 of them are
salaried persons, 10 of them are retired persons, 11 of them are self-employed persons and 8
of them belongs to others category.
Conclusion: It can be easily inferred that among 50 respondents 42% of the respondents are
salaried persons, 22% of them comes under self-employed category, 20% of them are retired
and 16% of them falls under others category.
Graph No.2
Graph showing number of respondents on the basis of occupation.
Page 45
Occupation
16%
Salaried
Retired
42%
Self-employed
Others
22%
20%
Table No. 3
Table showing the rate of interested borrowers.
Sl. No.
Interested
No. of respondents
Percentage (%)
1.
2.
Total
Yes
No
36
14
50
72
28
100
Page 46
Interpretation: Out of 50 respondents 36 of them are interested in borrowing loans and only
few that is 14 members are not interested in borrowing loans.
Conclusion: It is clear by seeing the graph that majority (72%) of the respondents like to
borrow loans and minority(28%) of respondents have considerably less interest in borrowing
loans due to various reasons.
Graph No. 3
Graph showing the rate of interested borrowers.
Page 47
Interested
80%
72%
70%
60%
50%
40%
28%
30%
20%
10%
0%
Yes
No
Table No. 4
Table showing the reasons for not borrowing the loans.
Sl. No.
Reasons
No. of respondents
Percentage (%)
1.
Not necessary
29
2.
14
21
3.
Page 48
4.
Local lenders
Total
36
14
100
Graph No. 4
Graph showing the reasons for not borrowing the loans.
Page 49
Reasons
40%
35%
30%
25%
20%
15%
10%
5%
0%
Table No. 5
Table showing the preferences of borrowers in borrowing loans and advances.
Sl. No.
Preference
1.
2.
Personal
Agricultural
28
34
Page 50
3.
4.
Total
12
24
14
50
100
Conclusion: Most of the respondents prefer to obtain agricultural loans and only a few
respondents like to borrow commercial & institutional loans. Thats why our India is called
as an agriculture based country.
Graph No. 5
Graph showing the preferences of borrowers in borrowing loans and advances.
Page 51
Preference
Commercial & institutional
14%
24%
Preference
Agricultural
34%
Personal
0%
28%
5%
10%
15%
20%
25%
30%
35%
40%
Table No. 6
Table showing the factors that influenced the respondents to borrow the loans.
Sl. No.
Factors
No. of respondents
Percentage (%)
1.
Loan amount
16
32
2.
Purpose
12
Page 52
3.
Interest rate
20
40
4.
Repayment period
16
50
100
Total
Conclusion: Majority of the respondents are influenced by the interest rate factor, secondly
by the factor of loan amount and least influenced by repayment factor.
Graph No. 6
Graph showing the factors that influenced the respondents to borrow the loans.
Page 53
Factors
Loan amount
16%
Purpose
Interest rate
32%
40%
12%
Repayment period
Table No. 7
Table showing repayment period preferences.
Page 54
Sl. No.
Repayment Period
No. of respondents
Percentage (%)
1.
10
2.
1-5 years
15
30
3.
5-10 years
20
40
4.
Above 10 years
10
20
50
100
Total
Interpretation: Out of 50 respondents 5 respondents comes under less than one year, 15
respondents comes under one to five year, 20 respondents comes under five to ten years and
10 respondents comes under above ten years.
Conclusion: From the graph we can say the majority of the respondents would like to repay
the loan from 5-10 years, because it is suitable for all levels of customers.
Graph No. 7
Graph showing repayment period preferences.
Page 55
Repayment Period
40%
40%
35%
30%
30%
25%
20%
Repayment Period
20%
15%
10%
10%
5%
0%
Less than 1 year
1-5 years
5-10 years
Above 10 years
Table No. 8
Table showing respondents choice from among the following agricultural loans.
Sl. No.
Agricultural Loans
No. of respondents
Percentage (%)
1.
Drip irrigation
17
34
2.
18
Page 56
3.
Farm Mechanisation
12
24
4.
14
5.
10
50
100
Total
Conclusion: Among the five popular agricultural loans majority of the respondents
would prefer in borrowing drip irrigation loan, secondly for farm mechanization loans
and minority in borrowing Kisan credit card loan.
Graph No. 8
Graph showing respondents choice from among the following agricultural loans.
Page 57
Agricultural Loans
35%
30%
25%
20%
15%
10%
5%
0%
34%
18%
24%
14%
10%
Table No. 9
Table showing respondents preference in borrowing the below listed personal loans.
Page 58
Sl. No.
Personal Loans
No. of respondents
Percentage (%)
1.
Car loan
18
2.
Gnanamitra
education loan
12
24
3.
Housing loan
10
20
4.
Personal loan
14
28
5.
My Bank Adyapak
10
50
100
Total
Interpretation: In the above analysis out of 50 respondents 9 respondents comes under car
loan, 12 respondents comes under gnanamitra loan, 10 respondents comes under housing
loan, 14 respondents comes under personal loan and 5 respondents comes under my bank
adyapak loan.
Conclusion: Most of the respondents would like to borrow personal loan from the other five
popular personal loans and secondly they give more preference in borrowing gnanamitra
education loan.
Graph No. 9
Graph showing respondents preference in borrowing the below listed personal loans.
Page 59
30%
25%
20%18%
28%
24%
20%
15%
10%
10%
5%
0%
Table No. 10
Table showing respondents choice in borrowing the following micro & small enterprises
loans.
Page 60
Sl. No.
No. of respondents
Percentage (%)
1.
Annapurna Scheme
16
2.
16
32
3.
Loans to MSEs
18
4.
Transport Operators
12
5.
11
22
50
100
Total
Interpretation: By seeing the above table out of 50 respondents 32% of the respondents
prefer stree shakti loan, 22% of respondents in loans to retail traders, 18% of respondents in
loans to MSEs, 16% of respondents in Annapurna loan and 12% of respondents in transport
operators.
Conclusion: After having a look over the above graph we are able to say that most part of
the respondents are interested in borrowing stree shakti loan.
Graph No. 10
Graph showing respondents choice in borrowing the following micro & small
enterprises loans.
Page 61
Annapurna Scheme
22%
16%
Stree Shakthi package
Loans to MSEs
12%
32%
Transport Operators
18%
Table No. 11
Table showing which loan does the respondents like to obtain from the below listed
commercial & institutional loans.
Sl. No.
Commercial &
Institutional Loans
No. of respondents
Percentage (%)
1.
10
20
Page 62
2.
13
26
3.
Handy loans
20
40
4.
14
50
100
Total
Conclusion: 40% of the respondents are interested in handy loan scheme and other schemes
have considerable interests. So majority of respondents like handy loan.
Graph No. 11
Graph showing which loan does the respondents like to obtain from the below listed
commercial & institutional loans.
Page 63
14%
20%
Handy loans
40%
Table No. 12
Table showing the level of satisfaction towards loans and advances.
Sl. No.
Satisfaction
No. of respondents
Percentage (%)
1.
2.
3.
Highly satisfied
Satisfied
Considerably satisfied
6
32
10
12
64
20
Page 64
4.
Total
Not satisfied
2
50
4
100
Conclusion: From the graph we can say majority of the respondents are satisfied with the
loans and only a few respondents are not satisfied.
Graph No. 12
Graph showing the level of satisfaction towards loans and advances.
Page 65
Satisfaction
4%
12%
20%
Highly satisfied
Satisfied
Considerably satisfied
Not satisfied
64%
Table No. 13
Table showing the expectations of the borrowers from loans.
Sl. No.
Expectations
No. of respondents
Percentage (%)
1.
2.
24
16
48
32
Page 66
3.
10
4.
Subsidy
10
50
100
Total
Interpretation: Out of 50 respondents 48% of respondents comes under low rate of interest,
32% under more amount, 10% under long repayment period and 10% under subsidy.
Conclusion: From the analysis one can say that majority of the respondents expect low rate
of interest and also more amount from the loans.
Graph No. 13
Graph showing the expectations of the borrowers from loans.
Page 67
Expectations
10%
10%
Low rate of interest
More amount
Subsidy
32%
CHAPTER-6
FINDINGS, SUGGESTIONS AND CONCLUSIONS
LEARNING EXPERIENCE:
Page 68
During this training period, I really learnt many aspects. I have learnt about the
loans and advances, their interest rates, types like term loan/demand loan, insurance coverage
and security etc.
FINDINGS
1. During the study it is found that out of 100% respondents still 28% of them are not
interested
in borrowing loans.
2. From the study it is known that the level of highly satisfied respondents is less when
compared to level of satisfied and considerably satisfied respondents.
3. Most of the respondents are expecting low rate of interest and also more loan amount from
the loans.
4. Compared to other types of loans and advances customers in more number are borrowing
agricultural loans in the Ammasandra branch and personal loans occupy the next position.
5. The study discloses that Stree Shakti package is more popular than any other micro &
small enterprises loans.
6. Many of the respondents gave reasons for not borrowing loans is due to the influence of
local money lenders.
7. It is found that most of the respondents preferred 5-10 years of repayment period.
8. From this study it has come to light that among all the agricultural loans drip irrigation
loan is more popular.
9. Among the total population of Ammasandra majority of them are employed and thus there
is more demand for personal loans in this branch.
10. It was clear from the study that large number of womans has been greatly empowered by
Stree Shakti package.
11. Bank Manager plays a key role in making public knowledgeable about availability of
different types of loans and advances for different purposes.
12. Most of the farmer respondents were expecting more subsidies on agricultural loans.
SUGGESTIONS
Page 69
1. Still there are a number of aspects to be considered in order to make loans and advances
more popular like rate of interest, insurance coverage, security, eligibility etc.,
2. Bank has to take several steps to make loans more reliable with public interest.
3. Timely awareness programmes related to loans are needed in order to literate the public
about the loans and advances.
4. Procedure to borrow loans and advances should be made more liberal.
5. Most of the respondents say that the duration between applying for loan and disbursement
of loan amount needs to be minimized.
6. During the study most of the respondents said that the insurance coverage over the loans is
needed to be extended still more.
7. The amount of subsidies on agricultural loans should be increased in order to encourage
the farmers.
CONCLUSION
From this study I would like to conclude that the bank is playing a very significant
role in the development of Ammasandra and its surroundings. And I like to say another
important aspect without forgetting that most of the youths, unemployed and other category
people have got immense advantage from this bank by borrowing loans to start their own
business and many of them are also successful in it. Directly or indirectly the bank has
reduced the rate of unemployment in its limits.
Page 70
This study made me to understand the various types of loans available and their
features, so from this knowledge I am able to create awareness among the people around me.
According to me the students can be benefitted by borrowing the educational loans for their
higher studies which is helpful in bringing down the burden of the parents. Since it is a rural
area majority of the loans borrowed in this bank is agricultural loan.
From the previous chapter data analysis and interpretation I conclude that most of the
respondents were satisfied with the loans provided to them by the bank and they also have
made full use of those loans.
Finally, I conclude that the bank and its employees are sincerely working towards the
development and welfare of the society through their dedicated service which is
commendable.
QUESTIONNAIRE
Dear sir/madam
I am pursuing .B.B.M Degree from Tumkur University and my project topic is A
Study On Loans and Advances (with respect to State Bank of Mysore, Ammasandra).
This Questionnaire is being administered for the purpose of collecting the individual
perception on loans and advances and it will be used exclusively for academic interest. I
request you to kindly spare some time and reply to this questionnaire.
Personal information
Name:
Age:
Gender M/F:
Dept. of Commerce & Management, .G.F.G.C. Dandinashivara
Page 71
1. Education Qualification:
Under Graduate
Post Graduate
Graduate
Others (please specify)
2. Occupation:
Salaried
Self-employed
Retired
Others
No
Loans to MSEs
Transport Operators
Page 72
11. Which loan do you like to obtain from the below listed commercial & institutional loans?
SBM School Plus
Handy loans
Satisfied
Not satisfied
Considerably satisfied
More amount
Subsidy
Any suggestions,
THANK YOU
Page 73
BIBLOGRAPHY
Books Referred
Financial Management
K. Venkataramana
Research Methodology
C.R. Kothary
Websites Used
www.statebankofmysore.com
www.google.com
www.wikipedia.com
www.osun.org
News Papers
Business Times
Annual Report
ANNEXURE
LIST OF TABLES
Table
No.
Title
Page No.
Page 74
8
9
10
11
12
13
LIST OF GRAPHS
Graph
No.
Title
Page No.
Page 75
2
3
6
7
10
11
12
13
FINANCIAL STATEMENT
BALANCE SHEET OF STATE BANK OF MYSORE
AS ON
31-03-2008
AS ON
31-03-2009
(Rs. in Crore)
AS ON
31-03-2010
36.00
36.00
0.00
0.00
36.00
36.00
0.00
0.00
36.00
-
Page 76
Reserves
Revaluation Reserves
Net Worth
Deposits
Borrowings
Total Debt
Other Liabilities & Provisions
Total Liabilities
Assets
Cash & Balances with RBI
Advances
Investments
Gross Block
Accumulated Depreciation
Net Block
Capital Work In Progress
Other Assets
Total Assets
Contingent Liabilities
Bills for collection
Book Value (Rs)
1,341.81
0.00
1,377.81
27,4 62.40
1,7 31.53
29,193.93
2,4 97.96
33,0 69.70
1,635.11
599.93
2,271.04
32,9 15.77
2,7 62.08
35,677.85
2,536.90
40,485.78
2,037.40
591.89
2,665.29
38,880.00
2,274.01
41,154.01
1,589.64
45,408.94
AS ON
31-3-2008
AS ON
31-3-2009
AS ON
31-3-2010
2,661.55
21,027.15
8,402.76
406.56
283.57
122.99
0.00
610.72
33,069.71
12,871.72
2,888.47
3,827.26
1,735.05
25,616.05
11,377.96
1,060.28
328.91
731.37
0.00
617.70
40,485.79
17,073.90
2,935.90
464.20
2,765.62
29,535.86
11,494.41
1,107.10
374.11
732.99
0.00
606.20
45,408.93
20,057.35
51.60
575.94
Page 77