Summer Project Black Book (1)

8/11/2019 Summer Project Black Book (1)

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MAHATMA EDUCATION SOCIETYS

PILLAI INSTITUTE OF ART, COMMERCE &SCIENCE

SECTOR-16, NEW PANVEL

RE-ACCREDITEDBY NAAC WITH`A`GRADE

PROJECT ON

IN THE SUBJECT :-COST ACCOUNTING

SUBMITTED BY

UNIVERSITY OF MUMBAI

FOR SEMESTER-1 OF

MASTER OF COMMERCE

By

PRATAP NARESH GHARAT

UNDER THE GUIDANCE OF

PROF.GAJANAN PANDIT WADER

2013 -2014


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STUDENT`S DECLARATION

I, Pratap Naresh Gharat student of M Com SEMESTER-1 Roll

Number hereby declare that the project for the subject

cost accounting titled

Submitted by me for semester 1 during the academic year

2013-2014 is based on actual work carried out by me under the

guidance and supervision of prof.Gajanan Pandit Wader. I

further state that this work is original and submitted anywhere

else for any examination

Signature of student


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EVALUATION CERTIFICATE

This is to certify that the undersigned have assessed and

evaluated the project on

Submitted by Pratap Naresh Gharat student of M Com part 1.This project is original to the best of our knowledge and has

been accepted assessment.

Internal Examiner External Examiner

Principal


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PILLAI INSTITUTE OF ART, COMMERCE &SCIENCE

Internal Assesssment:Project-40 Marks

Name of the student Class Division Roll

Number

First name: Pratap

Father`s Name: Naresh

Surname: Gharat

M COM

SEM-1

Subject :-COST ACCOUNTING

Topic for the project:

Market Awarded Signature

DOCUMENTATION

Internal Examiner(out of 10 Marks)

External Examiner

(out of Marks)

Presentation

(out of 10Marks)

Viva and Interaction

(out of 10 Marks)

TOTAL MARKS(out of 40)


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EXECUTIVE SUMMARY

The report contains introduction to Banks, which includes past, present

and future of banks and challenges for banking industry in future. Banks plays the

most important role in providing various banking services. Earlier banks were

engaged in accepting and lending money. But in the recent past the scope of services

provided by the banks has increased. The growing competition requires prompt and

efficient services to the customer sat reasonable cost. These days bank aim to provide

maximum satisfaction to their customers.

The next section of report i.e. training methodology consist title of report,

duration of training session, objective and limitation of study etc. this section

basically giving the outline of the report.

The next part is a brief introduction of BANK OF MAHARASHTRA

comes in the report which consist the history, and objective made by Chief Manager

MRS. RUPAM CHAUKEKAR. The current financial position of the bank alsoincludes in this part.

Next section consist the loan facility provided by bank. This section

consist various loans provided by bank the detail regarding those loans, procedure to

recover it, consumers detail about term loans, and recommendation and to

face future challenges and the suggestions for the improvement. Final section of

report consist conclusion and bibliography


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INDEX

Chapter Nos. Table of Contents Page Nos.

Chapter 1

Introduction

Objective of the study

Scope of the Project

Research Methodology

Limitations of the Project

Chapter II

Bank Profile

Organization Chart

Benefits given by Bank

ChapterIII

Theoretical Background.Data Analysis & Interpretations

ChapterIV

Findings

Suggestions / Recommendations

Conclusion

Bibliography


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INTRODUCTION

A bank is considered a safe and secure place where we could invest our

wealth as cash, keep our valuables in locker and also cash transactions. Often when

there is a tight for our cash flow we take loan from the bank. This may be for various

purposes like educational, occasional, agricultural, property, vehicle etc. If we are

starting a new business where we are investing a huge amount of money, the first

thing we do will be to choose a suitable banking partner. A bank can help the business

grow in many areas, for e.g. the bank gives a special privilege called Overdraft or OD.This OD will help the company during financial crisis and allow them to run their

business smoothly. The process. This portal allows users to check the details of the

banks financial position and ranking, it also allows users to go through the status of

their various undertaken loans and bank balance online.

Of selecting a bank is pretty much simple; we can go through their balance

sheets per financial year. The banks performance will be directly shown in the yearly

report. The interest rate that banks provide would be mentioned on their financial year

report and the risks associated with it could be also could be read from it. The fiscal

rating will be also mentioned in yearly report.


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OBJECTIVE OF THE STUDY

The study was mainly conducted to understand the concept of home loan,

education & vehicle scheme and the eligibility criteria of the customers.

The study is done to understand the documents involved in the home, education

loan scheme and the repayment methodology adopted by various banks.

The innovative home, education & vehicle loan schemes and the risk capturing

mechanism adopted by banks and the future of the house , education & vehicle loan

segment has been undertaken as a part of this study.

SCOPE OF STUDY:

The study covers a period of 2 months from may and june 2013. There are severalreasons for selecting this period.

The study is limited to only Bank of Maharashtra. This study is mainly related to

the individuals who are interested in taking home loans from banks to fulfill their

dreams.

The study is mainly related to the term loans provided by Bank Of Maharashtra.


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RESEARCH METHODOLOGY

RESEARCH OBJECTIVES :-

To understand term loans procedure in the Bank of Maharashtra.

To make a comparative study among Bank of Maharashtra

Operating in public and private sector.

To understand the consumer behavior in respect to the service offered by

different banks.

To offer the suggestions for improvement for different sectors of the bank

DATA SOURCES :-

The research involved gathering Secondary data as well as Primary data.

For the purpose two types of survey was conducted by me to collect the data.

PRIMARY DATA :-

The approach adopted was a survey with the customers visiting .

and interview session with management of the company.


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SECONDARY DATA :-

In our case secondary data were collected from:

News paper (Economic Times)

Information Brochures.

On the job training

Pamphlets

News paper (Economic Times)

QUESTIONNAIRE DESIGN / FORMATION :-

We started off with distribution of questionnaire at various places like Outside

the Government Banks:


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LIMITATIONS OF THE PROJECT

The sample size of customers and prospects is fairly small and consistent

conclusions cannot be drawn on the information provided. Satisfaction being a

relative term cannot be much commented on as it varies from individual to individual

and can only be measured if the respondent has also experienced the services of a

similar organizations in a similar sphere. One major constraints was the small sample

size as it may lead to slight variations in the end result. A few customers were either

quite reluctant to part with their precious time or had problems

in attaching weights and emphasis to different attributes. Customers in refinance cases

were in direct contact with the dealers and were more bothered with getting the

delivery of the car rather than handling the delays on availing the finance as it did not

directly affect them. There is bound to be a subjective bias in the results because of

inconsistency and selective perception about the opinions of the respondents.

In the context of this rule, the following definitions apply:

(A) "Person" means an individual; a corporation; a government, governmental

subdivision or agency; a business trust; an estate; a trust; a partnership or association;

a limited liability company; two or more persons having a joint or common interest;

or any other legal or commercial entity.

(B) "Commitment to lend or extend credit" includes, but is not limited to:

(1) Undisbursed portions of operating, construction or other lines of credit, up to

limits established by a written agreement between the lender and the borrower;

(2) Undisbursed portions of credit lines established to cover overdrafts;

(3) Undisbursed portions of credit card plans;

(4) Standby letters of credit.

(C) "Common enterprise" occurs when two or more persons combine to acquire,

operate or control a business enterprise or property interest. Credit to a common

enterprise includes:


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(1) Loans or extensions of credit to two or more persons when:

(a) Loans or extensions of credit are used for a common purpose; and

(b) The expected source of repayment for each loan or extension of credit is the same

for two or more of the persons, and those persons lack another source of income from

which the loans or extensions of credit, together with the person's other liabilities,

may be fully repaid.

(c) Loans or extensions of credit made:

(i) To persons who are related directly or indirectly through common control,

including where one person is directly or indirectly controlled by another person; and

(ii) Substantial financial interdependence exists between or among the persons.

Substantial financial interdependence is deemed to exist when 50% or more of one

person's gross receipts or gross expenditures, on an annual basis, are derived from

transactions with the other person.

(d) "Control" means the following:

(i) The ownership, control or ability to vote 25% or more of a corporation's

outstanding voting stock.

(ii) The ability to control, in any manner, the election of a majority of a

corporation's directors;

(iii) The power to exercise a controlling influence over the management or policies

of a corporation.

(e) The proceeds of a loan or extension of credit to a person will be deemed to be used

for the "direct benefit" of another person and the amount of the loan will be attributed

to the other person when the proceeds, or assets purchased with the proceeds, are

transferred to the other person. For the purpose of this definition, when the proceeds

are used to acquire property, goods or services through a bona fide arm's length

transaction, a direct benefit will not have occurred with regard to the seller of the

property, goods or services.


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(i) "Bona fide arm's length transaction" means an actual transaction, performed in

good faith, between two or more parties, with each party acting in his or her own self-

interest.

(f) "Loan or extension of credit" includes, but is not limited to:

(i) Direct loans, whether on the bank's books or charged off the bank's books,

subject to the exclusions in (3) (a) below,

(ii) Loans, extensions of credit, or participation in loans or extensions of credit sold

with recourse to or guaranteed by the bank,

(iii) Letters of credit, other than standby letters of credit,

(iv) Overdrafts, excluding intra-day overdrafts for which the bank receives payment

prior to its close of business.

(2) For lending limit purposes, loans or extensions of credit will be combined as

follows:

(a) Loans or extensions of credit to a person will be combined with loans or

extensions of credit to one or more other persons when:

(i) Proceeds of a loan or extension of credit are to be used for the direct benefit of

the other person, or

(ii) A common enterprise is deemed to exist between the persons, to the extent that

loan proceeds are used for the benefit of the common enterprise and repayment is

dependent upon the common enterprise.

(b) A loan or extension of credit guaranteed by a person shall be aggregated with the

person's other loans and extensions of credit only to the extent that the person receives

direct benefit from the loan.


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COMPANY PROFILE

Bank of Maharashtra is a government bank in Maharashtra, which

offers personal banking, cash management, retail loans and other financial services.

Their services include deposits, savings/current bank account, vehicle loans, personal

loans, retail trade finance, global banking, lending to priority sector and small scale

sector, foreign exchange and export finance, corporate loans and equipment loans.

The Bank has one subsidiary, namely The Maharashtra Executor & Trustee Company

Pvt Ltd, which undertakes management of public/ private trusts and administration/

execution of Will. They also sponsored three Regional Rural Banks, namely

Aurangabad Jalna Gramin Bank, Thane Gramin Bank and Marathwada Gramin

Bank with head office at Aurangabad, Thane and Nanded respectively. Bank of

Maharashtra was incorporated on September 16, 1935 and started their business on

February 8, 1936. In April 10, 1946, The Maharashtra Executor & Trustee Company

Pvt Ltd was incorporated as a wholly owned subsidiary of the Bank. In July 1969,

Bank of Maharashtra was nationalized along with 13 other banks. After

nationalization, the Bank expanded rapidly. In the year 1998, the Bank attainted the

autonomous status, which helped the Bank in providing more and more services with

simplified procedures without intervention of Government. In the year 2000, they

incorporated Magic eMoney Ltd (MeM) a joint venture of Bank of Maharashtra, Dena

Bank, NextStep Infotech P. Ltd. (NSIPL) and Magic Software Enterprises (MSE)

Israel continued to undertake departmental projects. During the year 2003-04, the

Bank came with their initial public offer of 10 crore shares of Rs 10/- each at a

premium of Rs 13/- amounting to Rs 230 crore. The issue received overwhelming

response and was over subscribed by more than 11 times. Also, they opened 34 new

branches and upgraded 10 extension counters into full fledged branches during the

year. During the year 2004-05, the Bank opened 14 new branches, 2 extension

counters and up-graded 1 extension counter into a full-fledged branch. Also, they

opened Holiday Home at Shirdi in addition to 5 existing Holiday Homes at different

places. The Bank acquired a stake of 9% in Global Trade Finance Pvt Ltd, a non

banking finance company promoted by the EXIM Bank. In January 2006, the Bank


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signed a MoU with Life Insurance Corporation of India, for distribution of their

insurance products. Also, they launched a scheme of money transfer service for Non

Resident Indians and other foreign account customers, using the Western Union

Money Transfer Services provided by Western Union Financial Services Inc. For this

regard, the Bank has entered into agreement with Weizmann Forex Ltd, the primary

agent of Western Union Financial Services Inc. During the year 2006-07, the Bank

opened 29 new branches and upgraded 16 extension counters into full fledged

branches. They expanded the ATM Network from 145 ATMs to 302 ATMs during

the year and entered into collaboration with VISA for issuance of Debit cards. The

Bank commissioned their own Data Center at Pune and Disaster Recovery (DR) site

at Hyderabad. Also, they established six IT Labs at Delhi, Kolkata, Chennai,

Hyderabad, Bangalore and Lucknow in order to take care of the massive training

requirement for the CBS project. The Bank launched new schemes like Mahalaxmi

Term Deposit Scheme (3 years term deposit scheme), Mahadeep Scheme (Financing

of Solar Water Heating System), Insta Remit Scheme (RTGS scheme for instant fund

transfer), etc during the year. In May 2006, they entered into tie up with United

Insurance Company Ltd for distribution of their non-life insurance products. During

the year 2007-08, the Bank also launched two group insurance schemes, namely Maha

Suraksha Deposit Scheme for all types of deposit account holders and Maha GrihSuraksha for home loan borrowers. Also, they entered into distribution agreement

with 15 select Asset Management Companies during the year. They opened 20 new

branches upgraded 10 extension counters into full fledged branches. They also opened

3 Currency Chests during the year. In March 2008, the two Regional Rural Banks,

namely Aurangabad Jalna Gramin Bank and Thane Gramin Bank were amalgamated

into one unit in the name of Maharashtra Godavari Gramin Bank with head office at

Aurangabad and having area of operation in nine districts of Maharashtra.As at March

31, 2008, the total branch network comprised of 1,375 branches and three extensions

counters spread over 22 states and two union territories.


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Our Logo

The Deepmal

With its many lights rising to greater heights

The Pillar

Our institution- Symbolizing strength

The Diyas

Our Branches- Symbolizing service.

The 3 Ms Symbolizing

-Mobilization of Money

-Modernization of Methods and

-Motivation of staff

Our Aim

The bank wishes to cater to all types of needs of the entire family, in the whole

country. Its dream is;

"One Family, One Bank, Bank of Maharashtra


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ORGANISATION CHART

ChiefManager

Mrs. Rupam Chaukekar

Officer

Mr. T. N. Shirvayye

SpecialAssistance

D.S. Sonawane

Cashier

J.P. Sakpal

Manoj Isawe

Peon

K.G . Pawar


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BENEFITS GIVEN BY BANK

Followings are the services provide by Bank Of Maharashtra;

o Bank Deposits

o Lending Of Loan

o ATM Service

o Credit Cards

o Demat Services

o Bancs

o Bancassurance

o Distribution Of Mutual Fund

o Executors And Tustee Services

o Mahabill Pay

o Mahabank Insta Remit Scheme

o Capital Market Application(ASBA)

o

NEFT

o MAHAeTRADE ( ON LINE Trading Facility)


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THEORETICAL BACKGROUND

Loan :-

Loan is the amount borrowed from bank. The nature of borrowings that the

money is disbursed and recovery is made in installments while lending money by way

of loan, credit is given for a definite purpose and for a pre-determined period.

Depending upon the purpose and period of loan, each bank has its own procedure for

granting loan. However the bank is at liberty to grant the loan requested or refuse it

depending upon its own cash position and lending policy. There are two types of loan

available from banks:

(a) Demand loan, and

(b) Term loan

Demand Loan :-

Demand Loan is a loan which is repayable on demand by the bank. In other

words, it is repayable at short-notice. The entire amount of demand loan is disbursed

at one time and the borrower has to pay interest on it. The borrower can repay the loan

either in lump sum (one time) or as agreed with the bank. For example, if it is so

agreed the amount of loan may be repaid in suitable installments. Such loans are

normally granted by banks against security. The security may include materials or

goods in stock, shares of companies or any other asset. Demand loans are raised

normally for working capital purposes, like purchase of raw materials, making

payment of short-term liabilities.

Term Loans :-


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Medium and long term loans are called term loans. Term loans are granted

for more than a year and repayment of such loans is spread over a longer period. The

repayment is generally made in suitable installments of a fixed amount.

Term loan is required for the purpose of starting a new business activity,

renovation, modernization, expansion/ extension of existing units, purchase of plant

and machinery, purchase of land for setting up of a factory, construction of factory

building or purchase of other immovable assets. These loans are generally secured

against the mortgage of land, plant and machinery, building and the like.

Long-term and Short-term Loans :-

Commercial banks grant loans for different periods-long, short and medium

term for different purposes.

(1)Short-term loans :-

Short term loans are granted by banks to meet the working capital needs of

business. The working capital needs refer to financial needs for such purposes as,

purchase of raw materials, payment of wages, electricity bill, taxes etc. Such loans are

granted by banks to its borrowers to be repaid within a short period of time not

exceeding 15 months. Short term loans are normally granted against the security of

tangible assets like goods in stock, shares, debentures, etc. The rate of interest charged

on short term loans ranges from 12% to 18% p.a.


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(2) Long Term Loans :-

Medium and long term loans are generally known as term loans. These

loans are granted for more than 15 months. In case of medium term loan, the period

ranges from 15 months to less than 5 years. Medium term loans are generally granted

for heavy repairs, expansion of existing units, modernization/renovation etc. Such

loans are sanctioned against the security of immovable assets. The normal rate of

interest ranges between 12% to 18% depending upon the period, purpose, nature and

amount of the loan. Though banks may grant long term loans, they avoid granting

loan for more than 5 years.

(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.

(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


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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 Rs5000, 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, fixed deposit receipts, and other documents. National

Savings Certificate, as per agreement. When the borrower completes all the

formalities, he is allowed to get the amount of House, Education,& Vehicle as

sanctioned by the bank. In case of discounting of bills, the bank credits the amount

of bill to the customers account before the realization of the bill and thus, makesavailable the fund. In case, the bills 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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Bank of Maharashtra loan process :-

Loan is an important factor of every bank. People need loan for various

reason like Personal need like for their house or Vehicle, Students need loan for their

education. Bank provide loan to person after fulfill condition require for loan and

collect interest from debtor.

BOM has been providing various type of loan like vehicle loan, Home Loan

Education Loan, Personal loan, as well as any kind of security against loan BOM

charges reasonable interest again this loan. The financial assistance by way of loan

and advance can be extend only to a benefited member of the bank who is the either a

regular or nominal member of the bank.

Financial assistance given to the member borrower is for a stipulated period

in may be for a short term or a medium term, short term advance are repayable within

24 months, medium term loan/advance are repayable within 60 months and the long

term loan/advance other than housing finance are repayable within 7 and more year

advance sanction for housing are repayable within 15 year or as board of director may

think fit and proper from time to time.

Loan should be repaid by monthly or by quarterly installments or by half year

installments as per sanction given by board of director in each specific case. The

period of repayment should be decided by the board of directors Jr and senior officer

of the head office and branch manager taking into consideration the business, and

repaying capacity of the borrower

The Bank will work out the available disposable fund for lending a determine

the period of repayment. If the board of director deem in fit and proper in case of

standard assets regular loan bank may grant rebate in interest which will not exceed

1% PA in overdue case. The bank can charge interest at the rate not exceeding 2%

over and above the rate of interest applicable on that particular loan.

The bank has right to debit actual expenses on account of postage incident exp

and personal visit for verification etc. In case of default legal exp connected with


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recovery including advocate fees incidental charges etc will amount recovered

from the borrower.

Bank make advance against following securities for Term Loan

The Bank makes advance against specific securities. The loan and

advance are classified on the basis of securities that are offered by the borrower

classification of loan as per securities is as under

1] Loan against bank fixed deposit receipts

2] Loan against mortgage of land and building

3] Loan for purchase of vehicles against hypothecation of vehicle

4] Housing loan against mortgage of said flat, building plot and constructed

thereon

5] Loan against the letter of undertaking given by the employer to deduct the

amount of installment from the salary/wages to sent complete salary/wages

to the bank till the total repayment of the loan.

6] Loan against any other securities approved by board of director

7] Education loan.

Term Loans are granted generally following purpose

Construction and repair of dwelling house.

Purchase of consumer durable goods/domestic goods.

For education expenses.

For commercial expenses/medical expenses.


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HOUSING LOAN :-

Housing loans are provided by Bank of Maharashtra largely. Usually bank

provided this type of loan long thermally and against mortgage of said flat, building

plot and constructed thereon.

Bank of Maharashtra Bank Home Loan schemes are provided both to the

resident and non-resident Indians thereby helping them work towards realizing their

dream to own a home. The Bank of Maharashtra home loans are offered keeping in

mind the individual needs and requirements of people wishing to buy/construct a

house of their own. Loan applicants with a steady and consistent source of allowance

can apply for Indian Bank housing loans

Target Group:

The target group is the salaried class, professionals, Self-employed & business-

men. Banks fix the age criteria for availing the loan.

Purpose:

The purpose of housing loan is for the Construction or Purchase of House or

Flat or Apartment, repairs & renovation of house.

Eligibility:

Age: Minimum 21 Years

60 years in case of salaried persons having Pension.

60 years for Businessmen.

65 years for professionals i.e. Doctors/ Architects/CAs/ Engineers/Lawyers/CS/CWA,

etc.

*Age Maturity of Loan should not be more than 75 years.

Amount of Home Loan


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The quantum of home loan offered by Bank of Maharashtra for salaried

class 60 times of gross or70 times of net monthly salary whichever is higher subject to

applicable margin. The applicant can also add the income of the spouse in order to get

a home loan of a larger amount. The total income left after EMI and other deductions

should not exceed 65% of gross monthly salary / annual income

Home Loan Disbursement

The bank offers lump sum home loan amount in case the loan applicant goes

for purchasing an already existing house or a flat.

Repayment Tenure:

The bank has prescribed a loan repayment period of 20 years(includingholidays) in case of buying or constructing a house or a flat on floating interest rate

method. The home loan repayment period prescribed by the bank on fixed interest rate

scheme lasts to 10 years.

Home loan Rates

Therate of interestoffered On Bank of Maharashtra Home Loan are offered on

two types of interest rate schemes - Floating Interest Rate, Fixed Interest Rate. The

interest rate on home loan keeps on changing according to the movements of the

market. The current fixed interest rate on BOM Bank Housing loan for a loan amount

of up to Rs 25 lacs is charged at the rate of 10.25% for 5 years and Rs25 lakh up to 30

for above 5 to 10 year 10.25% and the same on a home loan amount of over Rs 30

lakh up to Rs 75 lakh is charged at the rate of 11% for 5 year to 10 year

Security:

The property purchased or constructed out of the bank loan is taken by way of

mortgage.
http://www.homeloanshub.com/indian-bank/home-loan-rates.htmlhttp://www.homeloanshub.com/indian-bank/home-loan-rates.htmlhttp://www.homeloanshub.com/indian-bank/home-loan-rates.htmlhttp://www.homeloanshub.com/indian-bank/home-loan-rates.html


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Guarantor:

In home loan, Guarantor is most important.

Bank has to fulfillment following document to housing loan

A] Sales deed

B] Builder NOC

C] Society NOC

D] Agreement bond/hypothecation deed

E] Demand promissory note

F] Letter of lien and set off

Particular document to be submitted to customer

A] Payment receipt or income tax return file

B] Guarantors payment receipt or income tax return file

C] Proof of residence, Pan card Xerox

* Xerox copies of Ration Card or Voters Identity Card or Passport or Electricity or

Telephone bill or any such document acceptable to the ban

Securitization Act:

Under the Securitization Act 2002, house is mortgage for the bank up to

repayment of loan. Suppose the customer cannot repay loan for the given/available

period the bank can sold this house & recover their dues.


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Property Insurance:

Bank does the general insurance/property insurance of the tenure of loan & cost

of the property. The building financed has to have an insurance policy against the risk

of fire, earth quake, floods, etc. These days, banks are insisting on the insurance on

the life of the borrower so as to cover the loan amount by paying a onetime premium.


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EDUCATION LOAN :-

Bank of Maharashtra provides convenient educational loans for

meritorious/deserving students to acquire knowledge and skill in the field of their

interest. By playing beacon, new-generation's quest for success is ably supported,

paving way for Generation Banking

Eligibility :-

The applicant should be an Indian National.

He / She should have secured admission to professional / technical courses in India or

abroad through Entrance Test / Merit based selection process

Purpose :-

To meet the cost of education covering fee payable to college / school / hostel,

exam fees, purchase of books / equipment's, travel expenses / passage money for

studies abroad, purchase of computers essential for completion of the course etc.

Caution Deposit, Building fund/ refundable deposit supported by institution

bills/receipts, subject to a maximum of 10% of total tuition fees for the entire course.

Insurance premium for student borrower

Studies in India

Diploma/Graduation/Post-graduation courses in various disciplines.

Computer certificate courses of reputed institutes accredited to The Department of

Electronics

Studies Abroad


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Job-oriented professional/technical courses offered by reputed universities

MCA, MBA, MS etc.

Maximum permissible amount of loan :-

For Studies in India - Rs.10.00 lakh

For Studies Abroad - Rs.20.00 lakh

Rate of interest :-

Up to Rs.4.00 lakh(base rate + 2.00 % )

Above Rs.4.00 lakh_ (base rate + 2.75 %)

Securities :-

Above Rs. 4.00 lakh to Rs. 7.50 lakh_ satisfactory third party guarantee

Above Rs. 7.50 lakh _ Value of collateral security after providing requisite margine as

below should be equal to the quantum of finance plus 2 acceptable guarantors.

Computers purchased out of loan hypothecated.

Margin :- up to Rs. 4.00 lakhNil

Above Rs .4.00 lakh_

5 % for studies in India

15% for studies abroad


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Particular document to be submitted for education loan :-

Si

no

Particular Studies in India Studies in abroad

1 Proof of residence Xerox copies of Ration Card or Voters Identity Card or

Passport or Electricity or Telephone bill or any such

document acceptable to the bank

Same as in Col.3

2 Academic record Copy of the Xth std/XIIth std mark list, for under

graduates. Degree mark list/provisional certificate for

post graduates

Same as in Col.3

3 a. Date of birth/age

b. Community (for statistical

purpose only)

SSLC/TC/Mark list

Community Certificate

Same as in Col.3

besides Passport

4 Family Income Salary certificate/Pension certificate/Auditor's certificate

in case of business category/IT return filed/any other

proof for the income stated

Same as in Col.3

5 Admission

Admission letter/ Bonafied student certificate from the

College/University

Certificate/I 20

from the

College/Universit

y

6 Fee structure Letter/Certificate from the College/University Certificate/I 20

from the

College/Universit

y

7 Passport/VISANot applicable

Copies to be

enclosed

8 Guarantee/Co-obligation Parent's/Guardian's Co-obligation to be furnished Same as in Col.3

9 Collateral, wherever required LIC policy (surrender value of which should be not less

than the loan amount at the time of availing the loan)

/Share certificates/Units of UTI etc. Valuation certificate

from Bank's approved panel values and legal opinion

from Bank's panel advocate in case of land/buildings.

Same as in Col.3

10 Margin (Above Rs.4.00 lakh)

For studies in India: 5%

For studies abroad: 15%

Details regarding source of funds for meeting the margin

furnished along with documentary evidence

Same as in Col.3

11 Declaration/affidavit stating

that no Educational Loan is

availed from any other bank

by the applicant and his

parent

To be submitted To be submitted

12 Documents to be enclosed A & L of the student/parent/guardian/guarantor

Details of securities in Col.9

Same as in Col.3


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VEHICLE LOAN :-

Personal vehicle Loan :-

Bank also provide loan to customer for purchase personal o vehicle. Turn

your dream into reality own that new car always desired, with a little help from us we

offer car loan up to 80% of ex-showroom of the car our interest rate pleasantly

surprise you can take up to 5 year to repay the loan.

Target Group :-

Salaried Class, pensioners, professionals, self-employed business persons &

other individuals who have regular income

Loan on the strength of your income:

Submit income proof as required and avail finance up to 80% of the ex-

showroom price car loan with fixed interest rate Bank of Maharashtra offer new car

loan with fixed interest opportunity

Interest Rate for vehicle loan is as following :

New two/ four wheeler personal use 10.50%

New two/ four wheeler personal use up to Rs 5 lakh 10.50%

Up to Rs 2 lakh ( old vehicle) 10.5


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Commercial vehicle loan :-

Every business person need commercial vehicle for their business they cannot

raise such finance quickly, BOM provided Commercial vehicle loan large scale. BOM

has extended products like founding of new vehicle, finance of used vehicle, top up

on existing loan.

For new commercial vehicles

Utmost flexibility of selecting a finance scheme that suits our need Speedy

delivery of vehicle after the initial payment and the submission of all necessary

documents maximum finance provided 80% of chassis cost.

Loan Amount :-

80% of Invoice Value + Registration Charges + Insurance

For old vehicle

Quick against vehicle that are up to 5 year old. Maximum tenure of up to 60

manths maximum finance provided is 50% of the value as assessed by BOM.

Interest Rate for vehicle loan is as following

New vehicle (commercial use) 10.50%

Above Rs 2 lakh (old vehicle) 13%

Loan Amount For old vehicle

50% of Agreement value or valuation whichever is less


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Bank has to fulfillment following document Vehicle loan :

A] Agreement bond

B] Demand promissory note

C] Letter of continuity (whenever necessary)

D] Delivery letter

E] road tax &insurance receipt

F] letter of authority from the borrower addressed to the concerned RTO

countersigned by the borrower for transfer of vehicle favor of the bank

G] letter of hypothecation creating a charge in respect of hire vehicle

H] Registration certificate (i.e. R C book)

I] comprehensive insurance policy in respect of vehicle duly assess in favor of

bank

J] Valuation report of vehicle in case of old vehicle

K] Bank transfer (RTO) duly signed by the borrower

Security :-

Vehicle & Salary/Income

Repayment :-

Maximum 5 years


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Balance Sheet of BOM

(Rs. in Crores)

Particulars Mar-13

SOURCES OF FUNDS :

Capital 1,249.48

Reserves Total 5,147.46

Deposits 94,336.93

Borrowings 12,877.49

Other Liabilities & Provisions 3,442.15

TOTAL LIABILITIES 117,053.51

APPLICATION OF FUNDS :

Cash & Balances with RBI 5,265.29

Balances with Banks & money at Call 907.56

Investments 31,430.31

Advances 75,470.78

Fixed Assets 1,429.48

Other Assets 2,550.09

Miscellaneous Expenditure not written off 0.00

TOTAL ASSETS 117,053.51

Contingent Liability 24,361.76

Bills for collection 2,549.00


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DATA ANALYSIS AND INTERPRETATION

1] Do you know about loans & advances.

Interpretation :-

50% of the respondent said that they keep the loans & advances.

%

Yes

No

Yes 50 %

No 20 %


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2] Have you ever opted from any loan & advances from Bank of Maharashtra?

Yes 40 %

No 30 %

%

Yes

No


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3] If yes , which bank loan or advance have you taken ?

Banks %

SBI 20

Bank of Punjab 8

Oriental Bank 10

BOM 16

UTI 7

HDFC 5

ICICI 4

Interpretation :-

Maximum banks products followed by INB & then BOM. So the

market leader is SBI.

0

2

4

6

8

1012

14

16

18

20

SBI Bank of

Punjab

Oriental

Bank

BOM UTI HDFC ICICI

%

%


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4] How did you come to know about Loans & advances ?

Advertisement 40 %

Word of mouth 10 %

Referred by your company

/ friend

10 %

Interpretation :-

Most of the respondent said that they know about loans though

advertisement.

%

Advertisement

Word of mouth

Referred by your company /

friend


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5] What motivates you for selection any bank?

a) Service 30 %

b) Brand Name 10 %

c) Procedure 8 %

d) Facilities 5 %

e) Possible 10 %

f) Advertisement 9 %

Interpretation :-

People keep the product due to sales man efficiency with 30 %,

Followed by customers demand with 25 % , followed by profit margin with 15%.

%

0%

10%

20%

30%

%

%


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6 ] Which company would you prefer if you have never applied for bank loans &

advances ?

SBI 30 %

Bank of Punjab 7 %

Oriental Bank 8 %

Bank of Maharashtra 19 %

UTI 1 %

ICICI Bank 2%

HDFC 3%

Interpretation :-

50 % of people are satisfied with the bank loan & advances and 20 %

are not satisfied with the banks.

%

0%

10%

20%

30%

%

%


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Bank of Maharashtra Deposits and Loan since 2 years

For the Yearend 31st March (Rs in crore)

On the basis of questionnaire a detailed data collection was done and

analyzed. All analysis detail are provided in annexure in the letter part of report

0

5

10

15

20

25

30

35

40

2011-12 2012-13

Deposits

Loan

Sr. no. Year ended Deposits

Growth %

Loan

Growth %

1 2011-2012 16.51 25.86

2 2012-2013 19.28 38.09


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Bank of Maharashtra Progress Report for Last 5 Year

Year ended 31st march (Rs in crore)

Sr. no Year Profit

1 2008-2009 375.17

2 2009-2010 439.58

3 2010-2011 330.39

4 2011-2012 430.83

5 2012-2013 759.52

0

100

200

300

400

500

600

700

800

2008-09 2009-10 2010-11 2011-12 2012-13

PROFIT

PROFIT


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MAJOR FINDINGS OF THE STUDY

Based on the quantitative analysis the major findings of the study have been

highlighted below.

Most of the people are satisfied with the extent of their Loans & Advances

cover. They are not interested in opting for more Loans & Advances.

People do not consider Loans & Advances as a good savings because of high

interest rate.

As Loans & Advances is a long term contract. Maximum people do not have

faith on private Loans & Advances companies, they still prefer Bank of

Maharashtra Loans & Advances & public limited companies.

Because of less advertising not many people are aware about private Loans

&Advances companies.

Most of the people do not know about broker, corporate agents and bank

assurance, they rely on their agents only

The most preferred type of plan is money back. The reason being availability

of funds after every five years which can be used for paying further premium,

thus saving the regular income.

Some people have no idea about what type of cover they have.

Most of the people feel that Loans is essential but they think returns are low.

Some people have their doubts on the credibility and long stay of private tools

of loan companies.


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Advertising of the Loans & Advances product should stress on the need

of security.

Loans & Advances should be popularized as the means of securing future

rather than saving tax.

New entrants should come out with innovative riders.

Possible should be issued quickly and with less formalities

Other service should also be improved.

Newspaper/Magazines and television are the most effective medium of

advertising Loans & Advances.


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RECOMMENDATION

1] From our research I could find out that people are not aware about the possible and

features of tools of loan. Therefore Bank of Maharashtra Tools of loan and ICICI are

recommended to shed light on possible and explain the benefits, thus increasing the

awareness.

2] The penetration of tools of loan in India is around 22%. This indicates that a vast

majority of rural population is not covered. The market player needs to explore this

untapped potential through their marketing and sales network.

3] Loan should be given from bank @ 60% or more of total deposit

4] Interest to be given on deposit should be more therefore customer will attract to

bank result in increase deposit

5] Interest to be charge on loan should not be more therefore customer will attract to

bank result in increase in profit


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CONCLUSION

Risk taking is a necessary condition for wealth creation. Risk arises as a

deviation between what happens and what was expected to happen. Banks are no

exception to this phenomenon. As a result managements have to create efficient

systems to identify measure and control risk and ALM is just one component of the

overall cluster.

1] Bank deposit- loan ratio is very well in 2008-2009 the deposit of bank was Rs

22,87.30 crore i.e.75.47% & loan was Rs 732.47 i.e. 24.26 %

Bank deposit- loan ratio is very well in 2009-2010 the deposit of bank was Rs

48,28.69 crore i.e. 71.95% & loan was Rs 1882.19 i.e. 28.05 %


31,31.18 crore i.e. 47.09% & loan was Rs 3518.64 i.e. 52.91 %


43,96.38 crore i.e. 44.29 % & loan was Rs 55,29.05 i.e. 55.71 %


56,76.06 crore i.e. 42.32 % & loan was Rs 77,35.87 i.e. 57.68 %

2] Bank charge reasonable interest on loan & giving appropriate interest on customer

deposit & bank give maximum duration to repayment of loan as well as provide loan

quickly

3] There has been tremendous change in the tools of loan history. And with it

there has been continues growth in this sector both in Indian as well as world context.


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4] New players like Bank of Maharashtra are leading the sector due to

their strategic management and tailored made projects.

5] From research also I conclude that we do not invest in tools of loan

for returns; rather we invest in it for regrettable necessities.


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BIBLOGRAPHY

Books

Banking Aspects

Principle of bank -Mc Million

Website

www.google.com

www.BankofMaharashtra.co.in

Report refer

HDFC Bank

ICICI Bank
http://www.google.com/http://www.bankofmaharashtra.com/http://www.bankofmaharashtra.com/http://www.google.com/