loans

A STUDY ON LOANS AND ADVANCES (SBM)

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:

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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.‖

Meaning of Loans and Advances: The term ‗loan‘ may be regarded as ‗credit‘ granted where the money is disbursed and its recovery is made on a later date. It is the debt for the borrower. While granting loans, credit is given for a definite purpose and for a predetermined period. Interest is charged on the loan at agreed rate and intervals of payment. The term ‗advance‘ refers to a ‗credit facility‘ granted by the bank. A credit facility repayable within one year may be known as advances. Banks grant advances largely for short-term purposes, such as purchase of goods traded in and meeting other short-term trading

Nature and Security of Loans and Advances: To ensure the safety of funds lent, the first and most important factor considered by a bank is the capacity of borrowers to repay the amount of loan. The bank therefore, relies primarily on the character, capacity and financial soundness of the borrower. But the bank can hardly afford to take any risk in this regard and hence it also has the security of tangible assets owned by the borrower. In case the borrower fails to repay the loan, the bank can recover the amount by attaching the assets. It can sell the assets offered as security and realize the amount. Thus from the view point of security of loans, we can divide the loans into two categories:

(a) Secured loans and (b) Unsecured loans. (a)Secured loans: Are those which are granted against the security of tangible assets, like stock in trade and immovable property.

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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)

Tangible assets such as plant and machinery, motor-van, etc.

2)

Documents of title to goods, like Railway Receipt (R/R), Bills of exchange, etc.

3)

Financial Securities (Shares and Debentures)

4)

Life-Insurance Policy

5)

Real estates (Land, building, etc).

6)

Fixed Deposit Receipt (FDR)

7)

Gold ornaments, Jewellery etc.

Procedure of granting Loans and Advances The procedure of applying for and sanction of loans and advances differs from bank to bank. However, the steps which are taken in SBM are as follow:–

(I)

Filling up of loan application form Each bank has separate loan application forms for different categories of borrowers.

When you want to borrow money from a bank, you will have to fill up a loan application form available with the bank free of cost. The loan application form contains different columns to be filled in by the applicant. It includes all information required about the borrower, purpose of loan, nature of facility (cash-credit, overdraft etc) required, period of `repayment, nature of security offered, and the financial status of the borrower. A running business limit may be required to furnish additional information in respect of : — assets and liabilities — profit and loss for the last 2 to 3 years. — The names and addresses of three persons (which may include borrowers, suppliers, customers and bankers) for reference purposes. Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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(II)

Submission of form along with relevant documents 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) Executing the Agreement When the loan is sanctioned by the bank and the borrower is informed about it, he will have to execute an agreement with the bank regarding terms and condition for the amount of loan raised.

(V)

Arrangement of Security for Loan The borrower will now arrange for security against the loan. These securities may be

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 customer‘s 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.

Title of the study: ―A study on the LOANS AND ADVANCES‖ with respect to STATE BANK OF MYSORE , Ammasandra.

Place of the study: STATE BANK OF MYSORE Birla circle Ammasandra-572 211 Tumkur (District) Karnataka.

Statement of the problem: This report is specially focused on the types of loans and advances offered by the State Bank of Mysore along with the company profile. And to find out the awareness among the people about loans and advances. Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Objectives of the study: 1. The study on loans and advances available from SBM. 2. To make the public know about the different types of loans and advances available and to make use of them. 3. To understand the procedures to be followed for availing the loans. 4. To help the borrowers in comparing the interest rates and processing charges from one bank to another bank. 5. To enlist the utility of granting the loans and advances. 6. To point out the nature of security provided for loans. 7. To find the effectiveness of loans and advances. 8. To know the parameters or factors influencing the borrowers. 9. To find out the satisfaction level of the customers or borrowers on the loans and advances.

Scope of the study: This study helps to express clear opinion about loans and advances granted by the banks are highly beneficial to individuals, firms, companies and industrial concerns. Loans and advances granted by the banks help in meeting short term and long term financial needs of business enterprises. So it is necessary to study the loans and advances on whole. This survey is limited to Ammasandra branch only.

Duration of the study: February and March 2011.

Methodology: Primary data: The major portion of the data in the report is collected from the bank manager, bank employee‘s, bank customers and from the branch website.

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Secondary data: Books Articles Internet News papers Annual report

Limitations of the study: 1. Some of the confidential data's are not revealed by the bank personnel. 2. The study has to be completed within a short period of time due to which detailed study was not possible. 3. The study is also based on the data supplied by the bank personnel. 4. Since the study was done in only Ammasandra branch, so the data collected may not be considered 100%.

Sl. No.

CHAPTER

SUMMARY

Chapter-1

Introduction

Deals with introduction of the study

Chapter-2

Research design of the study

Shows research methodology of the study

Chapter-3

Company Profile

Gives brief knowledge about the company

Chapter-4

Theoretical background of the study

Explains the theory with related to study

Chapter-5

Data Analysis and Interpretation

Shows the analysis and interpretation of data using graphs

Chapter-6

Findings, suggestions and conclusion

Concludes the study with healthy suggestions

Bibliography

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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 Bank‘s 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 branches, 10 agricultural development branches, 3 treasury branches, 1 asset recovery branch and 8 service branches, offering wide range of services to the customers.

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 India‘s 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. Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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

39488.95

Total Advances

30603.18

Export Credit

1158.13

Forex Merchant

30678.46

Turnover Forex Trading Turnover

125156.64

Forex Services State Bank of Mysore offers the following forex services to the NRI‘s: 

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)

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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.

Management Committee of the Bank

Managing Director

Mr. Dilip Mavinkurve

Chief General Manager

Mr. Sudhir Dubey

General Manager

Mr. Sushil K Bhasin

(Operations) General Manager

Mr. Abhay Nath

(Planning & Development) General Manager

Mr. S. Vijay Kumar

(Commercial & Institutional Banking) General Manager

Mr. M.K. Nanjunda

(Treasury) General Manager

Mr. A.K. Basu

(Technology) General Manager

Mr. T. Thomas Mathew

(Vigilance & Inspection)

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Board of Directors

Shri O P Bhatt Chairman Under Section 25(1)(a) of State Bank of India (Subsidiary Banks) Act 1959

Shri Dilip Mavinkurve Managing Director Under Section 25(1)(aa) of the Act ibid

Smt. Ratna K Makhija

Shri S A Thimmiah

Nominated by Reserve Bank of

Nominated by Reserve Bank of

India Under Section 25(1)(b) of the Act ibid

India Under Section 25(1)(c) of the Act ibid

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Shri Gururaja Rao Nominated by Government of India Under Section 25(1)(cb) of the Act ibid

Shri B S Gopalakrishna Nominated by Reserve Bank of India Under Section 25(1) (c) of the Act ibid

Shri K Anand Nominated by State Bank of India Under Section 25(1)(c) of the Act ibid

Shri Milind S Katti Appointed by Government of India Under Section 25(1)(ca) of the Act ibid

Shri D D Maheshwari Nominated by Governement of India Under Section 25(1)(e) of the Act ibid

Smt. May Rose Steele Elected Under Section 25(1)(d) of the Act ibid

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Key Milestones of the Bank Milestone Year 1913 1953

Incorporation of the Bank The Bank of Mysore Limited was appointed as an agent of the Reserve Bank of India to undertake government business and treasury operations

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

Shares of the Bank were listed on the MSE

1963

Shares of the Bank were listed on the BSE - Became the Lead Bank in three districts – Mysore, Mandya and Tumkur. Currently lead bank in Mysore, Chamrajnagar and Tumkur districts

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

Shares of the Bank were listed on the BSE

2003

100% computerization of the branches.

2005

Core Banking Solutions implemented in all branches of the bank.

2008

The aggregate of the advances and deposits of the Bank crossed Rs.50,000 crores

2009

Shares of the Bank were listed on the NSE

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Corporate Structure EXECUTIVE BOARD

CM, MD SECT.

MANAGING DIRECTOR

DGM, COMPLIANCE

CHIEF GENERAL MANAGER

General Manager [O]

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

General Manager [Try.]

DGM [ F & A ] CM [SHARES & BONDS] DGM [FOREIGN DEPT.] AGM [ PREMISES ] AGM [ SECURITY ] DGM,Intgd. TREASURY, MUMBAI

CGM SECT.

General Manager

General Manager

[P&D]

C&I)

General Manager[Tech] & Chief Risk Officer

DGM [ CREDIT) C A B 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]

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

General Manager [V&I] & CVO

DGMINSPECTION DGM [ INSPN. – MOBILE ] DGM (CREDIT AUDIT)

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TECHNOLOGY INCENTIVES The Bank made significant investment in order to upgrade technology and the major developments are as under:

CORE BANKING SOLUTION State Bank of Mysore is the first Karnataka-based Bank with fully networked branches. The Bank is fully on "CORE BANKING SOLUTION" from 31.12.2005. In record time of one calendar year, the Bank completed the exercise of converting all the branches to Core Banking to provide the convenience of anytime, anywhere banking to all our valued customers. State Bank of Mysore embarked upon the latest Banking Technology platform by implementing the Core Banking Solutions (CBS) across all its branches, with an objective of providing banking convenience to the customers. Following are some of the features of CBS. > Facilitates 24 X 7 Banking > Anywhere Banking > Integration with strategic sectors > Business Process Re-engineering (BPR) enabler

INTERNET BANKING (INB) Transaction based Internet Banking facility that enables customers to view and operate their accounts through the internet, 24x7 hrs and 365 days, is now available to both retail and corporate customers. >>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 Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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REAL TIME GROSS SETTLEMENT (RTGS) Consequent to introduction of Core Banking Solution all the branches have been enabled to effect RTGS transactions. This facility enables seamless transfer of funds between accounts of customers of different banks / branches that have been RTGS enabled. Transfer of funds between banks is also to be done through RTGS.

INTERNAL RISK FACTORS 1. The Bank is exposed to high concentrations of loans to a few borrowers and default by any one of them would adversely affect the Bank‘s business. 2. Regulations in India require the Bank to extend a minimum level of loans to certain specified sectors in India which may subject the Bank to higher delinquency rates. 3. The Bank is exposed to higher credit risk as Loans and advance to MSMEs as on September 30, 2010 amount to 10.63% of the Bank‘s loan portfolio. 4. The Bank‘s funding is primarily through short-term and medium-term deposits, whereas significant portion of Bank‘s loan assets are Cash credits and Overdrafts renewed periodically. If depositors do not roll over deposited funds on maturity or if the Bank is unable to continue to increase its deposits, the Bank‘s liquidity could be adversely affected.

5. The mismatch between Assets and Liabilities could affect the net profit.

EXTERNAL RISK FACTORS 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 Bank‘s business and affect the price of the Bank‘s Equity Shares. 3. Hostilities, terrorist attacks, civil unrest and other acts of violence could adversely affect the financial markets and the Bank‘s business. 4. Natural calamities could have a negative impact on the Indian economy and harm the Bank‘s Business. Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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5. Political instability and significant changes in the Government‘s policy on liberalisation of the Indian economy could impact the Bank‘s 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

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 Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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

III MICRO AND SMALL ENTERPRISES LOANS (MSE) 1. Credit Guarantee Fund Trust Scheme for Micro, Small & Medium Enterprises (MSEs) 2. Loans to Micro and Small Enterprises (MSEs) 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 Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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.

IV COMMERCIAL AND INSTITUTIONAL LOANS 1. Scheme for Trades - Liberalised Trade Finance 2. Handy Loans Scheme 3. Corporate Loan 4. Current Account Plus 5. Rent Plus 6. SBM Paryatan Plus 7. SBM School Plus

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BRIEF INFORMATION ABOUT SOME POPULAR LOANS AND ADVANCES

I PERSONAL LOANS 1. GNANAMITRA EDUCATION LOAN Purpose To enable students with academic brilliance to meet tuition and other fees / maintenance costs / books and equipment and cost of passage for studies abroad etc., for pursuing studies at recognised school / college / institution.

Courses Eligible- Higher Studies Diploma / Graduate / Post-graduate courses in the faculties of Engineering, Technology, Architecture, Medicine, Dental Science, Agricultural Science, Veterinary Science and Computer Certificate courses of reputed institutes accredited to department of electronics or affiliated to university.

Limit Amount of loan ( (in Indian Rupees) Higher Education- In

MIN(Rs.)

MAX(Rs.)

10000

10.00 lacs

10000

20.00 lacs

India Higher EducationAbroad

Margin Upto Rs. 4.00 lacs

Nil

Above Rs. 4.00 lacs

-

For studies in India

5%

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For studies abroad

15%

Rate of interest

Fixed rate-

Upto 4.00 Lacs 12.50% Above 4.00 Lacs 13.25%

Floating rate- Upto 4.00 Lacs 11.25% 4.00 to 7.50 Lacs 12.75% Above 7.50 Lacs 11.75%

Second Educational Loan To enable the students for taking higher education, provided the student secures 60% marks in existing course. The second loan is to be availed only from the branch where the first educational loan has been sanctioned.

Repayment Technical / Professional Higher studies in India / Abroad Repayment of loan to commence immediately after disbursal, by the parent / guardian, out of his / her income. Installments may be nominal (to cover interest portion, atleast) during the period the student is undertaking the studies. The installments will be stepped up one year after the completion of the course or after the student gets a job, whichever is earlier, so that the loan gets repaid together with interest within a period of 60 to 84 months thereafter.

Insurance An insurance policy will be taken on the life of the student borrower for an amount equivalent to the loan amount and the policy should be convertible whole-life one for 25 / 30 years, convertible after 5 years into one with endowment benefits. The Bank will pay the insurance premia on the policy by debiting it to the loan account. On liquidation of the loan, the policy will be reassigned and delivered to the borrower.

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Security Amount

Security

Upto Rs. 4.00

NIL

lacs Above Rs. 4.00

Collateral in the form of a suitable 3rd party guarantee

lacs and upto Rs. 7.50 lacs Above Rs. 7.50

Collateral security by way of immovable property or equal

lacs and upto Rs.

to the loan amount in the form of Government securities /

10.00 lacs

NSCs / Units of UTI. Guarantee of parents / guardians (in the case of minors, the parent / guardian will execute the documents on behalf of the minor and also in his capacity as co-borrower) / third party guarantee where sufficient collateral security is not available.

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.

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2. PERSONAL LOAN Eligibility Individuals, employees of state / central government, Public Sector undertakings, reputed profit making Public limited companies, Multinational companies with a minimum service of two years and drawing a net salary of Rs. 6,000/- or above.

Purpose To meet personal expenses like marriage, family functions, medical expenses, travel etc.

Loan Amount Upto Rs. 1.50 lacs depending on repayment capacity of the individuals.

Security Third party guarantee of equal means. Securities like LIC policies, NSC, KVIP, Shares etc.

Period of Repayment 12 months to 36 months.

Rate of interest 15%

Type of Loan Demand loan.

Processing Fee 1% of loan amount (one time).

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3. SBM EASY CAR LOAN Eligibility 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

Margin

Loans upto

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. Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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A STUDY ON LOANS AND ADVANCES (SBM)

3rd party guarantee good for the loan amount.

Insurance: Comprehensive insurance for full value of the vehicle. FREE ACCIDENT INSURANCE COVER (DEATH RISK ONLY)

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

 Construction or Purchase of a new house or flat  Repairs / Renovation / Extension of existing house  For purchase of plot for construction of house within two years  For purchase of built houses not more than 15 years old  Housing loan against II charge  For Purchase of Furnishings / Consumer durables as part of the project cost. Attractive features of State Bank of Mysore’s Housing Finance scheme 

Loans from State Bank of Mysore are cheaper than housing finance agencies / companies.



Nominal processing charges.



No administration charges.



No commitment charges.



Interest charged on reducing balances.



Facility available at all branches in India.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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A STUDY ON LOANS AND ADVANCES (SBM)



Exemption from wealth tax for one house under Wealth Tax Act.

Quantum of Loan amount Loan amount for all categories Net Annual Income

EMI / NMI Ratio

Upto Rs. 60000/-

20%

Above Rs. 60000 to less than Rs.1,20,000/-

25%

Above Rs. 1,20,000/- to less than Rs.2,00,000/-

30%

Above Rs. 2,00,000 to less than Rs.5,00,000/-

50%

Above Rs. 5,00,000 to less than Rs.10,00,000/-

55%

Above Rs. 5 lacs

55%

Maximum Repayment period Age

Repayment period

For persons below 35 years of age

25 years

For persons below 45 years of age

20 years

For persons above 45 years of age

15 years

Margin Amount

Margin (%)

Upto Rs. 30 lakhs

20%

Above Rs. 30 laks to 75 lakhs

20%

Above Rs 75 lakhs to 1.00 Crore

25%

Above Rs 1.00 crore

40%

Interest Penal interest of 1% in case of default of three or more consecutive instalments.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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%

Above 15 to

9.75%

(UPTO Rs.20.00 LACS)

inclusive of 25 years HOUSING LOANS

Upto 5 years

9.25%

Above 5 to 15 years

9.50%

Above 15 to

9.75%

(Above Rs.20 lacs upto 30 Lacs)

inclusive of 25 years HOUSING LOANS

Upto 5 years

9.75%

Above 5 to 15 years

10.00%

Above 15 to

10.25%

(Above Rs.30 Lacs)

inclusive of 25 years

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Processing charges Loan Amount

Processing fee (Including Service tax) Rs.

Up to Rs.5 lakhs

1000/-

Above Rs.5 lakhs & upto Rs.10 lakhs

2000/-

Above Rs. 10 lakhs & upto Rs.20 lakhs

5000/-

Above Rs.20 lakhs & upto Rs.50 lakhs

7000/-

Above Rs.50 lakhs & upto Rs. 1 Cr

8000/-

Above Rs. 1 Crore & upto Rs. 5 Cr

10000/-

Above Rs. 5 Crores

20000/-

Insurance 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.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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.

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 Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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

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  water saving 50-70%  saving of labour and energy 60-90%  use of low quality water  Increase in yield 15-50%  saving of nutrients 30-60%  use in hilly terrain / problem soils

Crops

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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.

2. SCHEME FOR PURCHASE OF LAND FOR AGRICULTURAL PURPOSE

Purpose Purchase of agrl. land as well as fallow and waste land to SF / MF / landless agri labourers.

Eligibility

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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SF and MF and landless agri labourers. Total land holding should not exceed the prescribed ceiling of land holdings including the purchased one as advised by NABARD.

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.

3. KISAN CREDIT CARD SCHEME

Purpose To meet the timely Cash Credit and Consumption credit requirements of the farmers.

Eligibility All farmers.

Quantum of loan o

Entire crop production requirements for full year is fixed based on operational land holding, cropping pattern and scale of finance.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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o

Ancilliary to crop production viz. maintenance of Agri-machiney implements, electricity charges also may be considered.

o

Contingency requirement to an extent of 20% of the peak credit limit for expenses like Medical, Education, Marriage, Funerals, Birth and other religious ceremonies.

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.

4. FARM MECHANISATION- SBM AGRI FARM SCHEME

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Mechanisation of farming has been considered as one of the important inputs in farming, to complete the farm operations on time and to increase production and reduce the drudgery of human labour. With the rapid advancement in agriculture, there has been an increased use of farm machanisation equipments like Tractors and Power Tillers which help us tiding over the labour problem for Agriculture. We have been assisting the farmers for purchase of Tractors / Power tillers etc. However, with a view to enhance our lending under Farm Mechanisation, our Bank has entered into an MOU with the following Tractor manufacturing Companies a) M/S Escorts b) M/S HMT Limited c) M/S TAFE d) M/S Swaraj e) M/S New Holland Tractor (Ford) f) M/S SAME Tractors g) M/S International Tractors Limited (Sonalika) h) M/S Eicher Tractors i) M/S L&T John Deere private Limited j) M/S Bajaj tempo Limited k) M/S Mahindra Gujarat Tractor l) M/S Mahindra and Mahindra Limited m)M/S Standard Combines (P) Ltd n) M/S Indo Farm Tractors o) M/S SAS Motors ltd., (Angad Tractors) p) M/S Preet Tractors (p) Ltd

POWER TILLER COMPANIES a) M/S Greaves Cotton Limited b) M/S Bengal Tools Limited

Norms for financing of Tractors Acreage Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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The borrower should possess a minimum of 4 acres of wet land or 6 acres of dry land to ensure viability of the medium term loan to be extended for the purpose. Tractor finance to farmers who are having lesser land holdings than stipulated can also be considered on a case to case basis provided the applicant is having sufficient income from other sources to service the debt. Economic use of Tractor The tractor should have a minimum of 1000 hrs production work in agri. per year either on own farm or on custom hire or both. Minimum 3 implements should be owned by the beneficiary (either with bank finance or purchased with own funds) The Tractor financed should have the necessary commercial test report as per BIS code issued by CFMTTI (Central Farm Machinery Training and Testing Institute), Budni, Madhya Pradesh.

Margin Money Down payment in respect of farm mechanization loan for new tractors will be not less than 10% of the investment cost in case of tractors and implements.

Rate of interest 11.50% pa irrespective of the limit.

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.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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 Bank‘s norms. (a) Hypothecation of Tractors. (b) Equitable Mortgage of lands.

5. SWARNA MITRA SCHEME

The salient features of the scheme are presented below: Purpose to provide easy loans to meet their immediate agricultural requirement. Loans against pledge of Gold Ornaments. Rate of interest as applicable to agricultural cash Credits. Repayment coinciding with the harvesting season. Advance amount Rs. 650/- per gram, subject to a maximum of Rs 5 lacs per borrower.

III MICRO AND SMALL ENTERPRISES LOANS (MSE)

1. RETAIL TRADE- ADVANCES TO RETAIL TRADERS (OTHER THAN FERTILIZERS & MINERAL OILS)

Eligibility

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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All types of Retail Traders are eligible. Persons who propose to start retail trade business, fair price shop, consumer co-operative stores are also eligible for finance.

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 Bank‘s finance collateral security as per Bank‘s norm.

2. LOANS TO MICRO & SMALL ENTERPRISES (MSEs)

Eligibility Any individual / partnership firm / Public or Private Ltd. Companies desirous of promoting MSEs (Manufacturing sector) with investment in Plant & Machinery not exceeding Rs. 5 crore and Medium Enterprises with investment in plant & Machinery is above Rs. 5 Crore and upto Rs. 10 crores.

Extent of Finance Need based (both fund based and non-fund based).

Margin Working capital/ medium term loan. a) No margin upto Rs. 25000/b) Credit limit over Rs. 25000/Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Flexible approach: 15% - 25% depending on the merits of each case.

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.



Over Rs.25 lacs at the discretion of the Bank.

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 Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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 Bank‘s finance. Collateral security as per Bank‘s norm.

4. STREE SHAKTI PACKAGE FOR WOMEN ENTERPRENEURS

Women entrepreneurs comprise those small scale units managed by one or more women entrepreneurs who have stake not less than 51% of the equity.

The important features of the package are: The entrepreneurs who have undergone EDP conducted by State level Agencies or programmes co-sponsored/sponsored by Bank are eligible for financial assistance. 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. Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Concession in Margin : Retail Traders Category Limit Slab in Rs. Over Rs. 5000/- upto Rs. 25000/Over Rs. 25000/- upto Rs. 1.00 lac

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%

Professionals & Self-employed women Category Limit Slab in Rs. Upto Rs. 25000/Over Rs. 25000/-

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.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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5. ANNAPURNA- SCHEME FOR FINANCING WOMEN FOR ESTABLISHING FOOD CATERING UNITS Eligibility Women (both individual and Partnership firms).

Purpose For establishing food Catering Unit for selling tiffin/food/lunch packs etc.

Extent of Finance Maximum loan of Rs.50000/-

Type of loan Composite Term Loan (Working Capital portion will be within 50% of CTL).

Purpose of loan Term Loan component can be used for purchase of utensils and cutlery, gas connection, Refrigerator, Mixer cum Grinder, Hot case, Utensil stand, Tiffin boxes, Working table, Water filter etc.

Repayment Upto 36 monthly installments including one month moratorium period.

Margin : 10%.

Rate of Interest: As per prevailing rates. Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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. Security Hypothecation of assets created out of Bank Loan.

Guarantee One guarantor (with sufficient means) acceptable to the Bank.

IV COMMERCIAL AND INSTITUTIONAL LOANS

1. HANDY LOANS SCHEME- FOR TRADE & SERVICES SECTOR Coverage: Metropolitan, Urban & Semi-Urban Branches.

Salient features of the scheme: Type of loan 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

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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

Applicants should be engaged in trade, services activities, and have rating of SBM 1 to 4 under Credit Risk Assessment System.



Earned pre-tax profits in the immediately preceding 3 years.



Sales tax registration & relevant business license.

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.

2. SCHEME FOR TRADERS- LIBERALISED TRADE FINANCE State Bank of Mysore has designed schemes for traders to meet their working capital needs – under C&I and SME Segment. The following categories of borrowers will be covered: a. Small business enterprises. b. Retail traders/ wholesale traders. c. Professional and Self employed.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Salient features of the scheme: A maximum amount of Rs.500.00 lacs is extended by way of cash credit/ term loan facility, with margin 35%.

Rate of interest Cash credit – 13.00% i.e. 4.75% above base rate. Term loan – 13.50% i.e. 5.25% above base rate. Limit is available for a period of 12 months renewable annually for cash credit and for term loan 60 months. The hypothecated stocks and other securities offered are to be insured comprehensively. Stock statements/ book debt statements to be furnished quarterly in case of loan for inventories or current assets. Immovable property of 153% of the loan amount to be mortgaged to the bank. No third party guarantee.

Salient features of the scheme:(revised scheme wef 10.04.07)  A maximum amount of Rs.50 Lacs is extended by way of Cash Credit facility, with margin ranging between 25 % and 35%.  65% of realisable value of property mortgaged. Valuation report not more than three months old. Types of properties that can be mortgaged are restricted.  For limits Rs.25 Lacs & above audited financial statements are to be submitted.  Annual interest liability should not exceed 50% of gross profit.  Limit is available for a period of 12 months, renewable annually.  The hypothecated stocks and other securities offered are to be insured comprehensively.  Stock statements / book-debts statements to be furnished annually as on 31st March every 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.

3. SBM SCHOOL PLUS Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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A new scheme for Construction / Renovation / Repairing of School/College Buildings; Purchase of electronic equipments such as Computers, Laboratory Equipments, Library Books etc.

Salient features of the scheme: Nature of facility Demand Loan / Term Loan. 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 Upto Rs. 2.00 lacs Above Rs. 2.00 lacs & upto Rs. 25.00 lacs a) Repayable in less than 3 years b) Repayable in 3 years & above

Rate of Interest(%) 12.25%(1% below SBMPLR, i.e. 13.25-1.00 =12.25%)

At SBMPLR i.e. 13.25% 13.75%(0.5% above SBMPLR i.e. 13.25+0.50=13.75%)

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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.

4. SBM PARYATAN PLUS A new scheme targeted at the Tourism Industry for Construction / Modernization of hotels, restaurants, health clubs, amusement parks etc., Purchase of Luxury buses, Coaches, Cars etc., at tourist centres.

Salient features of the scheme: Nature of facility Cash Credit, Term Loan, Letter of Credit, Bank Guarantee.

Purpose Construction / Modernization of hotels, restaurants, health clubs, amusement parks etc., Purchase of Luxury buses, Coaches, Cars etc., at tourist centres.

Quantum of Finance Minimum Rs.2.00 lacs.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Margin 20% of the project cost. 40% in case of second hand vehicles/equipments.

Period of repayment Between 3 to 7 years in case of Term Loans.

Rate of interest SBMPLR + spread as per Credit Risk Assessment System. Between 14.00% to 15.50%.

Primary Security Hypothecation of assets created out of Bank's Loan.

Collateral Security Tangible collateral in the form of immovable property / NSCs etc.

Insurance: Insurance cover for 100% of the loan amount required.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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CHAPTER-5 DATA ANALYSIS AND INTERPRETATION Table No.1

Table showing the respondents educational qualification.

Sl. No.

Educational Qualification

No. of respondents Percentage (%)

1.

Under Graduates

10

20

2.

Graduates

16

32

3.

Post Graduates

4

8

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.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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.

Graph No. 1

Graph showing the respondents educational qualification.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Table No. 2

Table showing number of respondents on the basis of occupation.

Sl. No.

Occupation

No. of respondents

Percentage (%)

1.

Salaried

21

42

2.

Retired

10

20

3.

Self-employed

11

22

4.

Others

8

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.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Table No. 3

Table showing the rate of interested borrowers.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Sl. No.

Interested

No. of respondents

Percentage (%)

1. 2. Total

Yes No

36 14 50

72 28 100

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.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Table No. 4

Table showing the reasons for not borrowing the loans. Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Sl. No.

Reasons

No. of respondents

Percentage (%)

1.

Not necessary

4

29

2.

2

14

3.

Lack of information about loans Unsure about repayment

3

21

4.

Local lenders

5

36

14

100

Total

Interpretation: Out of 14 respondents not interested in borrowing loans 4 of them comes under not necessary category, 2 of them under lack of information about loans category, 3 of them under unsure about repayment category and 5 under local lenders category.

Conclusion: Most of the respondents gave reasons for not borrowing loan is due to local lenders. So the Banks should consider this reason in order to increase the rate of interested respondents in future.

Graph No. 4

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Graph showing the reasons for not borrowing the loans.

Table No. 5 Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Table showing the preferences of borrowers in borrowing loans and advances.

Sl. No.

Preference

1. 2. 3.

Personal Agricultural Micro & Small Enterprises Commercial & institutional

4. Total

No. of respondents Percentage (%) 14 17 12

28 34 24

7

14

50

100

Interpretation: Out of 50 respondents 14 respondents comes under personal loans, 17 respondents comes under agricultural loans, 12 respondents comes under micro & small enterprises loans and 7 respondents comes under commercial & institutional loans.

Conclusion: Most of the respondents prefer to obtain agricultural loans and only a few respondents like to borrow commercial & institutional loans. That‘s why our India is called as an agriculture based country.

Graph No. 5 Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Graph showing the preferences of borrowers in borrowing loans and advances.

Table No. 6 Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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

6

12

3.

Interest rate

20

40

4.

Repayment period

8

16

50

100

Total

Interpretation: Out of 50 respondents 16 belongs to loan amount, 6 belongs to purpose, 20 belongs to interest rate and 8 belongs to repayment period.

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.

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Graph No. 6 Graph showing the factors that influenced the respondents to borrow the loans.

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Table No. 7 Table showing repayment period preferences.

Sl. No.

Repayment Period

No. of respondents

Percentage (%)

1.

Less than 1 year

5

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.

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Graph No. 7 Graph showing repayment period preferences.

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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.

Scheme for purchase of land for Agr. Purpose

9

18

3.

Farm Mechanisation

12

24

4.

Swarna Mitra Scheme

7

14

5.

Kisan Credit Card Scheme

5

10

50

100

Total

Interpretation: In the above table out of 50 respondents 17 respondents comes under drip irrigation, 9 respondents comes under scheme for purchase of land for agricultural purpose, 12 respondents comes under farm mechanization, 7 respondents comes under Swarna mitra scheme and 5 respondents comes under Kisan credit card scheme.

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.

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Graph No. 8 Graph showing respondents choice from among the following agricultural loans.

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Table No. 9

Table showing respondents preference in borrowing the below listed personal loans.

Sl. No.

Personal Loans

No. of respondents

Percentage (%)

1.

Car loan

9

18

2.

Gnanamitra education loan

12

24

3.

Housing loan

10

20

4.

Personal loan

14

28

5.

My Bank Adyapak

5

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.

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Graph No. 9 Graph showing respondents preference in borrowing the below listed personal loans.

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Table No. 10 Table showing respondents choice in borrowing the following micro & small enterprises loans.

Sl. No.

Micro & Small Enterprises Loans

No. of respondents

Percentage (%)

1.

Annapurna Scheme

8

16

2.

Stree Shakthi package

16

32

3.

Loans to MSEs

9

18

4.

Transport Operators

6

12

5.

Loans to Retail Traders

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.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Graph No. 10 Graph showing respondents choice in borrowing the following micro & small enterprises loans.

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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.

SBM School Plus

10

20

2.

Scheme for traders

13

26

3.

Handy loans

20

40

4.

SBM Paryatan Plus

7

14

50

100

Total

Interpretation: Among 50 respondents 20 respondents comes under handy loan, 10 respondents comes under SBM school plus, 13 respondents comes under scheme for traders and 7 respondents comes under SBM paryatan plus.

Conclusion: 40% of the respondents are interested in handy loan scheme and other schemes have considerable interests. So majority of respondents like handy loan.

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Graph No. 11 Graph showing which loan does the respondents like to obtain from the below listed commercial & institutional loans.

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Table No. 12

Table showing the level of satisfaction towards loans and advances.

Sl. No.

Satisfaction

No. of respondents

Percentage (%)

1. 2. 3. 4. Total

Highly satisfied Satisfied Considerably satisfied Not satisfied

6 32 10 2 50

12 64 20 4 100

Interpretation: Out of 50 respondents 6 respondents are highly satisfied, 32 respondents are satisfied, 10 respondents are considerably satisfied and only 2 respondents are not satisfied with the loans and advances.

Conclusion: From the graph we can say majority of the respondents are satisfied with the loans and only a few respondents are not satisfied.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Graph No. 12 Graph showing the level of satisfaction towards loans and advances.

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Table No. 13 Table showing the expectations of the borrowers from loans.

Sl. No.

Expectations

No. of respondents

Percentage (%)

1.

Low rate of interest

24

48

2. 3.

More amount Long repayment period

16 5

32 10

4.

Subsidy

5

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.

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Graph No. 13 Graph showing the expectations of the borrowers from loans.

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CHAPTER-6 FINDINGS, SUGGESTIONS AND CONCLUSIONS

LEARNING EXPERIENCE: 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. Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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 woman‘s 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 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.

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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.

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.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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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:

1. Education Qualification: Under Graduate

Graduate

Post Graduate

Others (please specify)

2. Occupation: Salaried

Retired

Self-employed

Others

3. Are you interested in borrowing loans? Yes

No

4. If the answer is no, why you have not borrowed loan? Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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Not necessary

Lack of information about loans

Unsure about repayment

Local lenders

5. What type of loans and advances you prefer? Personal loans

Agricultural loans

Commercial loans

MSE loans

6. Why do you prefer the above option? Loan amount

Purpose

Interest rate

Repayment period

7. How much period do you prefer for repayment? Less than a year

1 to 5 years

5 to 10 years

Above 10 years

8. Among the following agricultural loans, which loan do you prefer? Drip irrigation

Scheme for purchase of land for Agr.Purpose

Farm Mechanisation

Swarna Mitra Scheme

Kisan Credit Card Scheme

9. Which loan do you like to borrow among the below listed personal loans? Car loan

Gnanamitra education loan

Housing loan

Personal loan

My Bank Adyapak

10. Among the following micro & small enterprises loans, which do you like to borrow? Annapurna Scheme

Stree Shakthi package

Loans to MSEs

Transport Operators

Loans to Retail Traders

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11. Which loan do you like to obtain from the below listed commercial & institutional loans? SBM School Plus

Scheme for traders

Handy loans

SBM Paryatan Plus

12. How satisfied are you with loans and advances? Highly satisfied

Satisfied

Not satisfied

Considerably satisfied

13. What are your expectations from loans? Low rate of interest

More amount

Long repayment period

Subsidy

Any suggestions,

THANK YOU

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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BIBLOGRAPHY Books Referred Financial Management

-

Shashi K Gupta, R.K. Sharma, Neeti Gupta

Law and Practice of Banking

-

K. Venkataramana

Business Research Method

-

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

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

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ANNEXURE

LIST OF TABLES

Table No. 1

Title Table showing the respondents educational qualification.

2

Table showing number of respondents on the basis of occupation.

3

Table showing the rate of interested borrowers.

4

Table showing the reasons for not borrowing the loans.

5

Table showing the preferences of borrowers in borrowing loans and advances.

6

Table showing the factors that influenced the respondents to borrow the loans.

7

Table showing repayment period preferences.

8 9

Page No.

Table showing respondents choice from among the following agricultural loans. Table showing respondents preference in borrowing the below listed personal loans.

10

Table showing respondents choice in borrowing the following micro & small enterprises loans.

11

Table showing which loan does the respondents like to obtain from the below listed commercial & institutional loans.

12

Table showing the level of satisfaction towards loans and advances.

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13

Table showing the expectations of the borrowers from loans.

LIST OF GRAPHS

Graph No.

Title

1

3

Graph showing the respondents educational qualification. Graph showing number of respondents on the basis of occupation. Graph showing the rate of interested borrowers.

4

Graph showing the reasons for not borrowing the loans.

5

Graph showing the preferences of borrowers in borrowing loans and advances. Graph showing the factors that influenced the respondents to borrow the loans.

2

6 7

Graph showing repayment period preferences.

8

Graph showing respondents choice from among the following agricultural loans.

9

Graph showing respondents preference in borrowing the below listed personal loans.

10

Graph showing respondents choice in borrowing the following micro & small enterprises loans.

11

Graph showing which loan does the respondents like to obtain from the below listed commercial & institutional loans.

12

Graph showing the level of satisfaction towards loans and advances.

Dept. of Commerce & Management, .G.F.G.C. Dandinashivara

Page No.

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13

Graph showing the expectations of the borrowers from loans.

FINANCIAL STATEMENT BALANCE SHEET OF STATE BANK OF MYSORE

Capital & Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital 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)

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 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

36.00 36.00 0.00 0.00 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

36.00 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

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