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A

PROJECT REPORT

ON

LOANS AND ADVANCES

of

State Bank Of India

Submitted to Himachal Pradesh University for fulfillment ofthe requirement for the award of

BACHELORS OF BUSINESS ADMINISTRATION

SUBMITTED TO: SUBMITTED BY:MR . Vishal Deep

ACADEMIC SESSION2011-2012

ACKNOWLEDGEMENT

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I avail this opportunity to express my deep sense of

gratitude to Mrs. Mini Mam the respected for providing me an

opportunity to work as a Virtual Private Network (VPN).I also take this opportunity to thank to my guide Mr.

Sushil Narayan for providing me proper direction to my project,

for sparing their valuable time and rendering all possible

guidance whenever approached. Thus, from which I have gained

many insights. I am also thankful to my family and friends who

gave me complete support to work on this project.

(AARIF BHAT)

DECLARATION BY THE STUDENT

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I hereby declare that this project tilted LOANS AND

ADVANCES is based on the original work carried out by me

under the supervision of Ms. Shikha Sharma is an original and

bonafide work carried out in partial fulfillment of the

requirement of the Award of the degree of Bachelors of

Business Administration of Himachal Pradesh University.

This is my original work and not submitted for any other

diploma, fellowship, award or prizes. This is my sole effort.

Shikha Sharma

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CERTIFICATE -I

Certified that research project entitled LOANS ANDADVANCES is a bonafide research work conducted by me

under the supervision and guidance of Lecturer Mr Arshadsubmitted to K.L.B.D.A.V in partial fulfillment for thedegree of Bachelors of Business Administration. No part ofthe research project is submitted for any other degree.

Shikha Sharma

CERTIFICATE-II

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This is to certify that the research project entitled loans andAdvances submitted by Showkat Ahmad is a bonafideresearch work conducted under the supervision of Mr.Muzamil Ahmad. No part of the research project has beensubmitted for evaluation in partial fulfillment of therequirement for the degree of BBA before. The assistanceand help received during the course of investigation hasbeen duly acknowledged.

Vishal Deep

CONTENTS

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S. No. Title of the Chapter Page No.I INTRODUCTION TO THE

COMPANY7

II ACHIEVEMENTS 14III RECOGNISATION & AWARDS 17IV INTRODUCTION TO THE PROJECT 19V SCOPE OF THE STUDY 25

VI THEORTICAL FRAMEWORK 27VII OBJECTIVES 51VIII RESEARCH METHODOLOGY 52IX DATA ANALYSIS &

INTERPRETATION58

X FINDINGS 69XI LIMITATIONS 70XII SUGGESTIONS 71

XIIIIX

x

CONCLUSIONSBIBLIOGRAPHYQUESTIONNAIRE

727475

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COMPANY

PROFILE

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INTRODUCTION

TO

THE

PROJECT

INTRODUCTION TO THE PROJECT

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Loans and advances is the most important unit of any banking

organization. Loan is a type of debt. Like all debt instruments, a loan

entails the redistribution of financial assets over time. The borrower

initially receives an amount of money from the lender, which they pay

back, usually but not always in regular installments, to the lender. This

service is generally provided ata cost, referred to as interest on the debt.A sum of borrowed money (principal) that is generally repaid with

interest. Loan-to-Value Ratio the relationship between the amount of the

mortgage loan and the appraised value of the property expressed as a

percentage.

Lock Lender's guarantee that the mortgage rate quoted will be good for a

specific number of days from day of application. Money Margin, the

amount a lender adds to the index on an adjustable rate mortgage to

establish the adjusted interest rate. Advance is a term that describes a

secured loan made to a member. Advances are offered at fixed or floating

rates with specific maturities or with embedded options for early

redemption. There are different types of loans offered by a bank :

CONSUMER LOANS

HOUSING LOANS

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CAR LOANS

EDUCATION LOAN

PERSONAL CONSUMPTION LAON

LOAN AGAINST MORTIGAGE

LOAN AGAINST FIXED DEPOSITS/BOND/SHARES

MORTIGAGE LOAN FOR TRADE

BACK GROUND OF THE STUDY

No one can say for certain where the history of loans began it's likelythat people have been practicing lending and borrowing for as long as

there has been a concept of ownership.

The history of loans can be documented at least several thousand years

back forms of lending were evident in ancient Greek and Roman times,

and monetary loans were even mentioned in the Christian bible.

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The modern history of loans started much later than these ancient times,

of course it is, however, important to realize that lending started much

earlier than many people would imagine and has its origin in much older

times.

Indentured loans

One of the early forms of lending that should be explored in the history of

loans is the indentured loan (also known as indentured servitude.)

Initially practiced in the middle ages and through the 19th century by

landowners and the wealthy indentured servitude allowed poor

individuals to borrow the money needed for major expenses such as

travel and real estate work off their debt over the course of several

years unfortunately, many a times they continue to add provisions to

the debt long after it had been repaid.Indentured servants often had very

few rights, and were seen by some wealthy individuals as a way to

maintain slave labor long after slavery had been abolished in both Europe

and the United States.

Banking loans

Luckily, legitimate banks were developing even as indentured servitude

was rampant. Individuals known as moneylenders played an important

part in the history of loans in fact, it's from the Italian moneylenders of

the Middle Ages that we get both the English words bank" and

bankrupt" that we use today.

Italian moneylenders would set up benches in the local marketplace (with

the word for bench being banca" from which, we eventually derived the

word bank"). The moneylenders would charge interest on their loans at

a rate that they set, and would sometimes be quite successful and become

very wealthy.

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As an interesting side note to the history of loans, if the moneylenders

were not successful, though, they would break up their benches and

pursue other venues. The Latin expression for breaking up a bench in this

way was banca rupta", which eventually became the English word

bankrupt" (which carries a much steeper connotation than simply a

broken bench.).

Modern banking loansOf course, the history of loans has progressed quite a bit since the days of

the middle Ages moneylender. Interest rates are much more controlled,

loan terms have a much higher degree of fairness to them, and the banks

of our era aren't out to simply get as much money out of borrowers as

they can.

The modern banks, finance companies, and online lenders that provideloans to the public and private sectors provide a great service to the world

economy, and are regulated by both local and governmental policy so as

to make sure that nothing interferes with that service.

However, if not for some of the oppression and misdealing that was

present throughout the history of lending then the fairness and

opportunity that exists in banking today might not be possible even the

oppression that resulted from indentured servitude in the past helped to

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establish modern banking by showing what factors needed to be

eliminated so as best to benefit both lender and borrower.

SCOPE OF THE STUDY

To be competitive and successful in modern corporate

world, constant capital flow is essential. Whether to

expand your business or to relocate your production unit

to some other place for cost effectiveness, you require

finance. Its not always possible to fund them through

internal sources. A delay of a few days can cost you in

millions.

To make your enterprise successful and to run your

business strategically, a secured business loan is an

option worth trying for. Life can take an adverse turn at

any moment. We cant be certain about our future

responsibilities and obligations. In an hour of need, we

look for various options to raise money. Many new ways

have been evolved to raise money, but as a human being,

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we tend to rely on the most favored options. A secured

loan provides easier and olden way to acquire loan.

One can easily plan his future investments and can easily

fulfill his requirements and needs of life without risk

Loans like housing loans, car loans, educational have

made people to fulfill their needs at very ease.

BENEFITS TO THE LENDER

The lender of the loan gets the desired rate of interest on the

amount he has owed to the borrower.

The lender can plan his investments and can earn solid amount of

returns on the investment to be utilized in the future and can build a

good reputation in the market.

BENEFITS TO THE BORROWER

The advantage with loans is that you can design your

repayment period as well as monthly installments

according to your financial capacity. A secured business

loan comes at a lower interest rate when compared

with other business loans. As these loans are taken

against collateral, any default in repayment can put

your commercial property at risk.

14
http://www.finance-hub.co.uk/securedbusinessloan.htmlhttp://www.finance-hub.co.uk/securedbusinessloan.htmlhttp://www.finance-hub.co.uk/securedbusinessloan.htmlhttp://www.finance-hub.co.uk/securedbusinessloan.html

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Interest rates offered on secured business loan is variable and

easily affordable. Such opportunities are provided to entrepreneurs

to encourage them and ultimately enhance the economy of the

region. By promoting business or industries, local government can

even eradicate unemployment and improve overall standard of

living.

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THEORETICALFRAMEWORK

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L O A N S A N D A D V A N C

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TYPES OF LOANS

CONSUMER LOANS

HOUSING LOANS

CAR LOANS

EDUCATION LOAN

PERSONAL CONSUMPTION LAON


LOAN AGAINST FIXED DEPOSITS/BOND/SHARES

MORTIGAGE LOAN FOR TRADE

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CONSUMER LOANS

It is a loan that establishes consumer credit that is granted for personal

use; usually unsecured and based on the borrower's integrity and ability to

pay. For acquiring consumer loan one has to complete all the formalities.

There are many types of consumer loans provided by the bank.

Computer (P.C).

Scooter/Motor cycle.

Refrigerator/Washing machine/Air condition.

Color T.V/VC

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LOANS AND ADVANCES

a) Scale of Finance Rs.3000/= to Rs.40, 000 per Article

b) Maximum Finance(More than Onearticle/Durable)

Rs.75000/= subject to 12 times net monthly Salary.

c) Eligibility Employees of Govt., Semi-Govt., Civic Bodies, Self employed(with assured income) having minimum net monthly Salary/Income of Rs.1800.

d) Security Primary Hypothecation of Article Financed.

Collateral Third party Guarantee of one person.

e) Rate of Interest(subject to change)

f) Repayment 60 months

g) Margin 25 % (min.) of cost of article.

U

ptoRs.25000/=

12

%p.a

OverRs.25000/=

13%

p.a

OverRs.250

00/=

S.E

for

professionalsD

octors /Engineers/Cha

rteredAccountants/Architects/Lawyer

etc.12.5%

p.a

SalientFeatures:

h)

ApprovedConsu

merDurables:

ITEMS

Max.Finance

Min.NetS

alary/

Income

i)C

o

mputer(P.C)

Rs.40,000/=

Rs.5,000/=

ii)

MotorC

ycle/

Scooter/Air

Conditioner

Rs.30,000/=

Rs.5,000/=

iii)

ColorTV/VCP/VCR/Generator/

Washing

Machin

e(automatic) /Co

okingrange.

Rs.15,000/=

Rs.3,500/=

iv)Refri

gerator/DishAntenna/KeroseneR

oomHeater/Washi

ngmachine(Sem

iAutomatic)

Rs.7500/=

Rs.3,000/=

v)V

ac

uumcleaner

Rs.5000/=

Rs.1800/=

vi)WaterFiltercump

urifier/B&WTV/T

apeRecorders /G

eyser /Cooler.

Rs.3000/=

Rs.1800/=

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HOUSING LOANS

It is a loan that establishes consumer credit that is granted for building

house; usually unsecured and based on the borrower's integrity and ability

to pay. For acquiring housing loan one has to complete all the formalities.

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Salient Features:

a) Quantum of loan

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OANS AND ADVANCES

OANS AND ADVANCES

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22

i) For Construction /Purchase

The maximum amount of loan to besanctioned under the scheme would be 40

times the net monthly income/salary of theapplicant and there would be no ceiling viz aviz. The amount of loan.

ii) For Renovation /Addition

The maximum loan granted for carrying outrepairs, additions, extensions, improvement,completion, renovation of existing house isRs. 4 Lakhs (Subject to 20 times net monthlysalary/income).

Also as an incentive for small borrowers, theloans up to Rs. 1.5 Lakhs granted forrepairs/renovations of existing houses wouldnow be secured by third party guarantee of 2persons

IC policies, Government securities, IVPs,NSCs, KVPs or such other security as isdeemed appropriate by the sanctioning

authority.However, negative lien would bestipulated over the existing house property forwhich the facility is granted and also have anir-revocable power of attorney executed by theborrower authorizing the bank to sell thehouse in case of default.

b) Eligibility i) Employees of Govt., Semi-Govt. Dept.,Civic Bodies, PSU's with min. 5 years

service.

ii) Reputed Businessmen with min. 5 yearsStanding.

iii) Professionals & Self employed like

Doctors, Engineers, CAs, Advocates, withmin. 5 years standing.

c) Security Primary: Mortgage of the house Property to

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EDUCATIONAL LOAN

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An advance of funds to a student for the purpose of financing a

college or vocational education. For acquiring consumer loan one has

to complete all the formalities. There are two types of educational

loans provided by the bank.

1. For those who study in India

2. For those who study in Foreign

Salient Features:

a) Scale of Finance i) Rs.7.50 Lakhs for studies in India.ii) Rs.15.00 Lakhs for studies abroad.

b) Courses Allowedfor

i) Graduate / P.G Courses in:Medicine, Surgery, Engineering, HotelManagement, Design, Architecture, Bio-

chemistry, Agriculture, Veterinary etc.ii) P.G Courses in:Business Management, Chartered or CostAccounting, Company Secretary ship.

c) Eligibility i) Should be an Indian Nationalii) Should have secured admission to professional/technical courses throughentrance test/selection process.

iii) Should have secured admission toforeign universities/institutionsiv) Should have passed the qualifyingexamination for admission to the courses.v) Employed person intending to improvetheir educational qualification and/orreceive training in modern technology inIndia or abroad can also be assisted underthis scheme provided training offersprospects of better placement.

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d) Security i) Personal guarantee of borrower/s.ii) Collateral security equal to amount ofloan.

e) Margini) For loans upto Rs. 4 Lakhs- nilii) For loans above Rs. 4 Lakh Studies inIndia - 5%

Studies abroad - 15%

f) Interest(subject to change)

Upto Rs.25, 000 9% p.a

Rs.25, 000 toRs.5.00 Lakhs 10% p.a

Above Rs.5.00Lakhs

11% p.a

g) Repayment Course period plus one year or six

months after getting job, whicheveris earlier

Loan to be repaid in 5 - 7 years after

commencement of repayment

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CAR LOANS

Automobile loan: a personal loan to purchase an automobile.

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27

Salient Features

a)Scale

ofFinance

Rangingfr

omRs.1.00LactoRs.5.

00Lakhsde

pendinguponthe

NetAnnual

Income /Salary

b)Eligi

bility

i)Em

ployeesofG

ovt./ SemiGovt.,Ci

vicBodies,PSU's/ I

ndividual/ Pro

prietorshipConcerns /Firms /

LimitedCom

c)Security

i)PrimaryHyp

othecationofVehicle

Financed

ii)CollateralThird

partyGuarant

eeofone

person

d)R.O.Intere

st(sub

jecttochange)

Period

RateofInte

rest

Lessthan3

years

9.50%

p.a.

withmonthlyrests

3years

andabove

11.00%

p.a.withmonthlyrests

e)R

epayment

5ye

arsinequalmonthlyinstallments.

f)

Margin

25

%g)QuantumofFinance

Net

Annual

Inco

me /Profit

MaximumFinance

Rs.75,000to

Rs

.1,20,000

Rs.1.00Lac

Rs.1,20,001toR

s.1,75,000

Rs.2.00Lakhs

Rs.1,75,001to

Rs.2,50,000

Rs.3.00Lakhs

Rs.2,50,001

toR

s.3,50,000

Rs.4.00Lakh

s

Rs.3,50,0

01toRs.5.00Lakhs

Rs.5.00La

khs

Above

Rs. 5LakhstoRs.6.

50Lakhs

Rs.7.

00Lakhs

Abo

veRs.6.50Lakhsto

Rs.10Lakhs

Rs.

10.00Lakhs

(O

therconditionsap

pl

y)

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This scheme is for individuals/business enterprises/professionals

and self employed as an ideal source of funds for expendituresof any nature.

ELIGIBILITY CRITERIA:

The scheme would provide finance to Individuals/Business

Enterprises having minimum net annual income of Rs.1.20

Lakhsper annum against mortgage of unencumbered

immovable property situated in Metros/Urban/Semi-Urban

Areas. Salaried Individuals must have put in a minimum

confirmed service of 3 years. Business Enterprises, professionals

and self-employed must have a minimum standing of 3 years in

the respective line of activity.

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PURPOSE:

For meeting their business and/or any personal

need/expenditure.

INCOME CRITERIA:

Minimum net income should be Rs.1.20 Lakhs.

AMOUNT OF LOAN:

20 times net monthly income or Rs.10 Lakhs whichever is

lower.

LOANS AND ADVANCES

MINIMUM LOAN AMOUNT: Rs.2.00 lakhsMAXIMUM LOAN AMOUNT: Rs.10.00 lakhs.

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In case of Individual borrowers, the income of the spouse can be

taken in to consideration for determining the loan amount. In

such cases, the facility would be allowed in the joint name.

MARGIN: nil.

TYPE OF LOAN:

Term loan.

UPFRONT FEE/PROCESSING CHARGES:

0.25% of the loan sanctioned would be recovered as processing

charges.

SECURITY:

Registered/Equitable mortgage of unencumbered residential

house/flat, commercial or industrial property with a clear

marketable title situated in the Metros/Urban/Semi-Urban

areas/Center only and which stands in the name and possession

of the borrower (individual/business enterprise). The forced sale

value/market value of the property shall have to be at least equal

to 1.5 times of the loan amount. Besides the property should be

vacant.

RATE OF INTEREST:

2.5% above the Banks Prime Lending Rate (PLR) (presently

12% per annum). Effective rate of interest would be 14.5% p.a.

and would be charged with quarterly rests.

REPAYMENT:

The loan granted under the scheme together with interest

thereon would be repayable within a maximum period of 60

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months through Equated Monthly Installments (EMI`s)

commencing one month after disbursement of the loan. The

repayment shall have to be fixed on realistic basis so that the

gross deductions including the EMI for the loan granted under

this scheme does not exceed 50% of the borrower gross income.

In case of individual borrowers the income of spouse shall be

taken into account for determining the repaying capacity of the

borrower.

INSURANCE:

The property against which the loan is granted will have to be

comprehensively insured against all risks for its full value

during the continuance of the loan facility from the Bank. The

cost of the insurance to be borne by the borrower and the Policy

will be drawn in the joint names of the Bank and the borrower

with usual Bank clause therein.

LOANS AGAINST SHAR E S/BONDS

TYPE OF FACILITY

i) Over Draft

ii)Term Loan

SECURITY

Pledge of Shares/Bonds/debentures in demat format only

PURPOSE OF LOAN:

Loan can be availed for any purpose.

AMOUNT OF LOAN:

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Minimum Rs.0.50 Lakhs

Maximum Rs.20.00 Lakhs. The advance to single scrip shall be restricted

to Rs.2.00 Lakhs only.

MARGIN:i) 50% on the 52 weeks of average price

ii) 25% margin in case of bonds/Govt.Securities

In case of bonds, the rating should be not less than 'AAA' by CRISIL or

equivalent rating by any other recognized rating agency.

PROCESSING CHARGES:

0.25% of the loan amount.

REPAYMENT:

The Term Loan together with interest thereon shall be repayable in 36

Equated Monthly Installments commencing one month after

disbursement of loan.

The overdraft facility shall be for one year renewable after review.

DISBURSEMENT:

The disbursement shall be by Credit to the saving/CD account of the

borrower.

GENERAL TERMS AND CONDITIONS:

1) The party should have dematted account preferably with J&K Bank.

2) The loan should be granted against the security of not less than two

scripts preferably of different business houses.

3) The Shares should be fully paid.

4) Individuals cannot pledge scrips of companies of which they

themselves are directors/promoters.

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5) The Shares of J&K Bank are not eligible for finance under this scheme

in terms of Sec.20 (1) of BR Act, 1949.

6) The facility should be granted against the Shares of companies as are

given in the Annexure I only.

7) The Shares to be pledged should not be under lock-in-period.

8) The facility of loan against shares shall be available at branches as are

detailed in Annexure- II.

9) The branches shall pay 0.50% p.a. as service charges to the Depository

.

ROLE OF DEPOSITORY SERVICES CONNAUGHT PLACE,

NEW DELHI.

The Depository Services, Connaught Place New Delhi, will provide Risk

Management Services to the Branches for loan facility against demat

Shares/Securities under LAS Scheme. The Risk Management Services

will include:

1) Processing of Application for LAS received directly from clients and

those forwarded by branches.

2) Verification of Demat Account Status of the Applicant.

3) Scrutiny of Shares/Securities proposed to be pledged on the basis ofBanks approved list of Shares/Securities.

4) Creation of charge on the securities.

5) Valuation of securities and assessment of Drawing Power on the basis

of 52 weeks average price or current market value of securities, which

ever is lower.

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6) Regular monitoring value of securities and advising the concerned

branch of the D.P. to regulate drawings.

7) Branches will invariably be furnished valuation report on weekly basis

or as and when demanded by the branch or the day indices (Nifty/Sensex)

fall by 3% or more.8) In case branches directly receive request regarding

the reshuffling of portfolio from the clients, the branches will send the

request to Depository Services Connaught Place New Delhi for necessary

actions.

The sanctioning authorities/operative levels are advised to give wide

publicity to the scheme and ensure that credit requests there under are

disposed judiciously and expeditiously. Branches are also advised to keep

close liaison with Depository Services.

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MORTIGAGE AGAINST LOAN TRADE

Purpose:

To provide hassle free working capital finance to the borrowers.

Nature of facility:The loan facility should be granted as cash credit and

overdraft.

Eligibility: Retail and Wholesale Traders and Other Business

Enterprises, with a satisfactory track record of 3 years. (Cash profits

during the last 3 years and net profit in the immediate preceding year).

Amount of Loan:

Minimum Loan: Rs.2.00 Lakhs

Maximum Loan: Rs.50.00 Lakhs

Basis of Assessment: 15% of the Projected Annual Sales Turnover.

OR

50% of the forced realizable value of the property (whichever is

lower).Sales Turnover shall be supported with Sales Tax Return

acknowledgements or Turnover through account, which should be at least

60% of the sales turnover reflected in the Balance Sheet. If it is below

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60% the Sales Turnover shall be adjusted in proportion to the account

turnover by multiplying it with conversion factor 1.66. To elucidate

Turnover in the account is Rs25 Lakhs the sales turnover will be assumed

at Rs.25 Lakhs 1.66= Rs.41.50 Lakhs.

Projected annual turnover should not exceed 125% of the turnover

achieved in the immediate preceding year.

Security Primary:

Hypothecation of stocks and book-debts.

Collateral:

Mortgage of Unencumbered residential house/flat, commercial or

industrial property with a clear marketable title in the name and

possession of the borrower/Proprietor/ Partner/s/Director/s either self-

occupied or vacant.

Valuation:

Forced Value of the property should be based on latest Valuation Report

of the Bank's approved Value and concerned Branch Manager should

satisfy himself about the valuation so made.

Rate of interest:

PLR +1% i.e. 12.00% with monthly rests

Disbursement:

The loan amount to be released for business purpose only

Validity: sanctioned limits shall be valid for a period of 3years .

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OBJECTIVE OF RESEARCH

To know the procedure for the payment of loan by J&K bank

To know about the interest rates of the J&K bank.

*. To know customers loyalty towards J&K bank.

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[Type text]

RESEARCH

METHODOLOGY

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MEANING OF THE RESEARCH

Research may mean the first small step in an endeavor to understand

better the change occurring and at times forced upon we as individuals or

as society.

Research as a process involves defining problems, hypothesis,

formulation and organization and evaluating data, deriving deductions,

interferences and conclusion after careful testing.

In this research study of LOANS AND ADVANCES simple random

sampling was used .Both primary and secondary data was collected. The

survey was confined only to the costumers of SBI bank. The size of

sample was twenty two (22) .Both open ended and close ended questions

were asked to the respondents. Among these respondents 6 were govt.

employees, 9 were businessmen, 5 were students and others were 2.

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METHODS OF DATA COLLECTION

Data is of primarily of two kinds.

1. Primary data2. Secondary data.

Secondary data may be defined as data that has been collected earlier for

some purpose other than the purpose of the present study. Any data that is

available prior to the commencement of the research project is secondary

data and it is called historic data

USES OF SECONDARY DATA

It acts as a reference for the present study.

The secondary data can be a useful benchmark, which the findings

of the study can be tested.

At times it may be the only source of data.

SOURCES OF SECONDARY DATA

Published Sources

Unpublished sources

LOANS AND ADVANCES

Data collection methods can be classified as follows

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Observation

Interviewing

Experimentation

Simulation

Projective techniques

In this project two methods of collection were used. They are--------------

1. Interviewing.

2. Published source of data in the form of books of accounts.

INTERVEIWING

It is the most commonly used method of data collection. It is two ways purposive communication between the interviewer and the respondent

aimed at obtaining and recording information pertinent to the subject

matter of the study.

HOUSING LOANS

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EDUCATIONAL LOAN

Repayment Course period plus one year or six months

after getting job, whichever is earlier

Loan to be repaid in 5 - 7 years aftercommencement of repayment

CAR LOANS

Repayment 5 years in equal monthly installments.


REPAYMENT:

The loan granted under the scheme together with interest

thereon would be repayable within a maximum period of 60

months through Equated Monthly Installments (EMI`s)

commencing one month after disbursement of the loan. The

repayment shall have to be fixed on realistic basis so that the

gross deductions including the EMI for the loan granted under

this scheme does not exceed 50% of the borrower gross income.

In case of individual borrowers the income of spouse shall be

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Repayment i) For Construction of New House 20 years

Including 9 months moratorium in equalmonthly installments.

(Applicable to new loans anddisbursements only)ii) For addition / Renovation 5 years Including2 months moratorium in equal monthlyInstallments.

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taken into account for determining the repaying capacity of the

borrower.

LOANS AGAINST SHARS/BONDS

REPAYMENT:

The Term Loan together with interest thereon shall be repayable in 36

Equated Monthly Installments commencing one month after

disbursement of loan.

The overdraft facility shall be for one year renewable after review.

MORTIGAGE AGAINST LOAN TRADE

Sanctioned limit shall be valid for a period of 3 years subject to

review/renewal at the end of the year.

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DATA ANALYSIS,INTREPRETITION

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LOANS AND ADVANCES

1. How long you have been banking with the SBI bank?

10 percent of respondents are dealing with bank from last 1year.

15 percent of respondents are dealing with bank from last 5years.

60 percent of respondents are dealing with bank from 10years.

15 percent are not dealing at all.

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LOANS AND ADVANCES

2. Are you aware of the different loan schemes provided by the bank?

From The above graph we can say that:

80% of the respondents agreed that they are aware of the different

loan schemes provided by the bank.

While only 20% are not aware of the loan schemes provided by the bank.

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LOANS AND ADVANCES

3. If you are aware of the loan scheme offered by the bank and desire to

avail the facility of the scheme but have not availed so far, what is the

reason?

a.Indifference of the branch people

b. complicated formailities

c. Slow pace of processing

From The above graph it is clear that:65% of the respondents said that the reasons for not availing the different

loan schemes are the complicated formalities

.20% of the respondents said that the reasons for not availing the different

loan schemes are the slow processing of applications.

15% of the respondents gave the other reasons for not availing the

different loan schemes.

LOANS AND ADVANCES

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4. How do you rate the attitude of bank officials towards youself while

making transactions?

From The above graph it is clear that:

59% of the customers think that the attitude of the bank officials

while making transactions is excellent.


while making transactions is good.


while making transactions is satisfactory

LOANS AND ADVANCES

02% of the customers think that the attitude of the bank while

making transactions is poor.


while making transactions is very poor.

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5. What interest rates do you suggest for the maximum loan amount (15

Lakhs)?

From The above graph it is clear that: 60% of the respondents think that interest rates should be 6 to 7%

25% of the respondents think that interest rates should be between

8 to 10%

LOANS AND ADVANCES

6. The bank provides different loans schemes, which one you availamong these?

a. Home loans.b. Education loans.c. Cars loans.d. Business loans.

Scheme No. of customersHome Loans 6

Education Loans 5Car Loans 3

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Business Loans 8


23% of respondents avail education loan36% of respondents avail bus. Loan27 % of respondents avail home loans& only 14% of responds avail car loans.

7. Why do you want to avail this scheme?

a. Need to build my house.b. Need for higher studies.c. Need to buy a car.d. Need to start/invest in the business.

Schemes No. of Customers

Need to build to house 6Need for higher studies 5Need to buy a car 3Need to start/invest in the business 8

From The above graph it is clear that:27% of the respondents avail the scheme to build house.23% of the respondents avail the scheme for higher studies.14% of the respondents avail the scheme to buy a car.36% of the respondents avail the scheme to invest/start business.

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8. What is the procedure to repay the loan?

a. Monthly.b. Quarterly.c. Yearly.d. After 5years.

Procedure DurationMonthly 3Quarterly 5Yearly 8After 5years 6


14% of the respondents say the procedure monthly.23% of the respondents say the procedure is quarterly.376% of the respondents say the procedure is yearly.27% of the respondents say the procedure is after 5 years.

9. Are you satisfied with bank dealings?a. Yes.

b. No.

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77% of the respondents are satisfied with bank dealings.And 13% of the respondents are not satisfied.

10. Would you like to borrow money again from the bank?a. Yes.

b. No.

From The above graph it is clear that:77% of the respondents would like to borrow again.And 13% of the respondents will not borrow again.

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LOANS AND ADVANCES

FINDINGS

The J&K bank is one of the leading and fast growing banks. The bank hasits branches in all parts of Jammu & Kashmir and other states of thecountry. The bank with its better customer service and almost all thefacilities which must be present in the present technological world is

widely accepted by the people.

1. The J&K bank has wide range of acceptance.2. The J&K bank provides better customer service.3. The bank has good fame among customers.4. The bank is loyal to its customers and provides every possible help tothem.5. The bank provides loans on easy terms which are easily full filled bythe customers.6. The bank provides every possible assistance to unemployed youth.

7. Insufficient employees increases the processing time in the banks.8. High interest rates make obstacles in borrowing from bank.9. Less promotion of the bank products.10. The attitude of bank officials is good towards customers.11. Mostly the customers go for business loans.

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LIMITATIONS

My research was limited because of the fact that the major source of data

was from the annual reports of the company, which were subject to

accounting policies and practices followed by the company.

The major limitations are

Due to strict confidentiality policy of the company the accounts

department provided only screened information.

Accuracy of the data provided cannot be guaranteed which does

not statements obtain secondary data

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LOANS AND ADVANCES

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SUGGESTIONS

There are lots of benefits by acquiring any type of loan and one can

easily fulfill his needs and basic requirements of life. There are also

tax related benefits that is tax liability can be reduced a lot by showing

more debt than equity in capital structure.

Banks also get the interest on the loans so accordingly they can

also earn profits and plan the future investments.

A lot of documentation and formalities are to be completed for

raising the loan, which requires a lot of time so the procedure of

raising the loan should be simplified to some extent.

Banks can adopt few qualitative techniques to educate the borrower

about its lending policies

LOANS AND ADVANCES

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CONCLUSION

As we observe the trends in Indian financial sector is changing rapidlythrough innovation, dependability of loans and advances has also

increased and much awareness of this concept has been found.

Loans and advances have become the important source of raising

the finance among the individual, corporate as well as for the

higher organizations.

A secured business loan is a loan given for commercial

Purposes. It keeps business properties as collateral.

It can be taken for a variety of purposes like

Diversification, research and development or to buy

Plants and machineries.

The advantage with loans is that you can

design your repayment period as well as monthly

installments according to your financial capacity. A loan

comes

LOANS AND ADVANCES

a lower interest rate when compared with other business

loans. As these loans are taken against collateral, any

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default in repayment can put your commercial property at

risk.

To be competitive and successful in modern corporate

world, constant capital flow is essential. Whether to

expand your business or to relocate your production unit

to some other place for cost effectiveness, you require

finance. Its not always possible to fund them through

internal sources. A delay of a few days can cost you in

millions. To make your enterprise successful and to run

your business strategically, a secured business loan is an

option worth trying for.

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BIBLOGRAPHY

1: WWW.J&KBANK.COM

2:WWW.SBIBANK.CO.IN

3:WWW.SBIBANK LOANS.COM

4:WWW.LOANSCHEMS OF SBI BANK.COM

5:WWW.ECNOMICTIMES.COM

6: DIRECT SEARCH

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LOANS AND ADVANCES

Questionnaire for customer

M/S. ______________________________________________________

Address: ___________________________________________________

Phone: ____________________________________________________

Dear customer

It has always been our earnest endeavor to serve you better. The

following questionnaire is aimed at knowing your satisfaction level. You

are requested to respond fairly to the questions and guide us in

developing strategies for serving you better.

1. How long you have been banking with the SBI bank?

a. 1 year

b. 1-5 years

c. 5-10 years

d. Not at all

1. Are you aware of the different loan schemes provided by the bank?

a. Yes

b. No

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LOANS AND ADVANCES

3. What interest rates do you suggest for the maximum loan amount (15

Lakhs)?

a. 6-7%

b. 8-10%

c. Agree with existing

4. How do you rate the attitude of bank officials towards you while

making transactions?

a. Excellent

b. Good

c. Satisfactory

a. Poor.

1. If you are aware of the loan scheme offered by the bank and desire

to avail the facility of the scheme but have not availed so far, what

is the reason?

a.Indifference of the branch people

b. complicated formailities

c. Slow pace of processin

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2. The bank provides different loans schemes, which one you availamong these?

a. Home loans.b. Education loans.c. Cars loans.d. Business loans.

1. Why do you want to avail this scheme?

a. Need to build my house.b. Need for higher studies.c. Need to buy a car.d. Need to start/invest in the business.

1. What is the procedure to repay the loan?

a. Monthly.

b. Quarterly.c. Yearly.d. After 5years

1. Are you satisfied with bank dealings?

a. Yes.b. No

1. Would you like to borrow money again from the bank?a. Yes.

b. No.

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Documents

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