K.B.P.I.M.S.R SATARA M.B.

A PROJECT

A
PROJECT REPORT
ON

‘A STUDY OF LOAN PROCEDURE’

WITH REFERENCE TO
“THE PATAN URBAN CO-OPRATIVE BANK LTD PATAN’

SUBMITTED TO
SHIVAJI UNIVERSITY, KOLHAPUR

IN PARTIAL FULFILMENT OF THE REQUIRMENT FORTHE DEGREE

OF MASTER OF BUSINESS ADMINISTRATION

BY
MR. BHUSARI SANKET ANANT.
B.COM

UNDER THE GUIDANCE OF

MS. KOLHATKAR S.V.
(LL.B M.B.A)

THROUGH
THE DIRECTOR

KARMAVEER BHAURAO PATIL INSTITUTE OF

MANAGEMENT STUDIES AND RESEARCH, SATARA

2013 -2014

1
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

DIRECTOR RECOMMENDATION

This is to certify that Mr. Bhusari Sanket Anant is a bonafied student studying in M.B.A.-II. He
has completed project report titled ‘A STUDY OF LOAN PROCEDURE with reference to The
Patan Urban Co-Operative Bank Ltd Patan’, under the guidance of MS. S.V. Kolhatkar
satisfactorily and submitted to Shivaji University, Kolhapur for partial fulfillment of the
requirement of the award of the Degree of Master of Business Administration. The matter
presented in the project report has not been submitted earlier.

Dr. B. S. Sawant.

Director
Date: - Karmaveer Bhaurao Patil Institute
Place: - SATARA of Management Studies and Research,
Satara.

2
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

GUIDE CERTIFICATE

This is to certify that Mr. Bhusari Sanket Anant has completed his project report on ‘A STUDY
OF LOAN PROCEDURE with reference to The Patan Urban Co-Operative Bank Ltd Patan’
under my guidance satisfactorily.
The Project work is of original nature and not copied from any other earlier project work and
further no part has been submitted to any university as a full or partial fulfillment conditions for
passing any examination.
His observation and conclusions are based on data collected by her during in-plant training.

MS. KOLHATKAR S.V.

.
Date: - Karmaveer Bhaurao Patil Institute
Place: - SATARA of Management Studies and Research,
Satara.

3
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

DECLARATION

To,

The Director,
Karmaveer Bhaurao Patil Institute
Of Management Studies and Research,
Satara – 415001.

Respected Sir,

I, the undersigned hereby declare that project report titled ‘A STUDY OF LOAN PROCEDURE
with reference to The Patan Urban Co-Operative Bank Ltd Patan’, under the guidance of Ms.
S.V. Kolhatkar and submitted to Shivaji University, Kolhapur for partial fulfillment of the
requirement of the award of the Degree of Master of Business Administration, written and
submitted by me under the guidance of Ms. S.V. Kolhatkar.
The empirical findings in this project are based on data collected by myself while preparing the
project report. I have not copied from any report.
I understand that any copying is liable to be punished in a way the University authorities deem
fit.

Date: -
Place: - SATARA Mr. Sanket Anant Bhusari.

4
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

ACKNOWLEDGEMENT

The gratification and joy that accompanies the successful completion of any task would be
incomplete without the humble deep – felt expression of gratitude to the people who made it
possible, because success is bridge between hard work and efforts and above all encouraging
guidance and support.
I would like to extend my heartiest thanks to Mr. K.R.Shinde, Managing Director, of The Patan
Urban Co-Operative Bank Ltd Patan. They gave me a golden opportunity to work under him.
I would like to convey my sincere thanks to Ms. S.V. Kolhatkar my internal project guide, the
constant source of motivation an inspiration for me who guided and helped in bringing the best
out of me.
I am also thankful to all members of The Patan Urban Co-Operative Bank Ltd Patan.
Who helped me one way and other in successfully completing the project.
I am also thankful to my friends for helping me to complete my project work.

Date: -

Place: - SATARA Mr. Sanket Anant Bhusari.

5
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

CONTENTS

PAGE
CHAPTER TITLE
NO.
NO.
INTRODUCTION TO STUDY.
1.1 Introduction. 1
1.2 Management Problem. 1
1.3 Research Problem. 1
1.4 Title of Study. 2
CHAPTER I 1.5 Objectives of study. 2
1.6 Importance of the Study. 2
1.7 Scope of the Study. 2
1.8 Research methodology. 2
1.9 Data Required. 3
1.10 Chapterization. 4

2.1 Introduction. 5
2.2 History of the Bank. 5-6
2.3 Bank location. 6
2.4Strategic contents. 6
2.5 Objectives of the Bank. 7
CHAPTER II 2.6 Future plans of the Bank. 7
2.7 Services of Bank. 7-8
2.8 Function of Bank. 8-9
2.9 Financial Scenario. 11
2.10 H.R Scenario. 11
2.11 Competitors. 11
2.12 Organization Chart. 12

6
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

CONCEPTUAL FRAMEWORK

3.1 Introduction. 13
3.2 Concepts related to borrowing of loan. 13-15
CHAPTER 3.3 Various types of loan schemes of Bank 15-17
III 3.4 Loan sanctioning procedure. 17-19
3.5 Loan disbursement procedure. 19-20
3.6 Advantages of loan system. 20-21
3.7 Drawbacks of loan systems. 21

DATA ANALYSIS AND

INTERPRETATION.
CHAPTER
IV 4.1 Tables, graphs and Interpretation 22-29

FINDING AND SUGGESTIONS.

5.1 Introduction. 30
CHAPTER V 5.2 Finding of the Study. 30
5.3 Suggestion of the Study. 31
5.4 Conclusion of the Study. 31

Annexure. 32-33
Bibliography. 34

7
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

CHAPTER 1

INTRODUCTION OF STUDY

1.1 Introduction

The banking sector is increasing day by day with some fundamental changes. With the
increasing competition it is important to sustain the customer with fulfilling his demands so loan
segment is important for banks which is major business. So in order to ensure proper growth of
loan it is important to review the loan disbursement process.
The Patan Urban Co-Operative Bank Ltd Patan provides banking products and services in
Patan. Bank offers various deposit schemes including savings deposits, current deposits, and
term deposits. It also provides housing loan, cash credit loan, vehicle loans, gold loan, and salary
secured loan, overdrafts, letters of credit, and guarantees, as well as loans for Agriculturists,
Entrepreneurs, Individuals, Professionals, and Corporate Customers.

1.2 Management problem

Organization is leading co-operative bank for all types of finance. Bank wants to make growth in
business. For taking further steps, they want to check the satisfaction level of various loans
schemes among the customers and also they want to know problems faced in loan sanctioning
procedure. This will help them to improve their performance.

1.3 Statement of research problem

The present study focuses on a study of loan procedure & to check satisfaction level of
customers with respect to The Patan Urban Co-Operative Bank Ltd Patan.

8
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

1.4 Title of Study

‘A Study of Loan Procedure’ with reference to The Patan Urban Co-Operative Bank Ltd Patan.

1.5 Objectives of Study

1. To study the various types of loans.
2. To study procedure of loan.
3. To know the satisfaction level of customers.

.
1.6 Importance of Study
This study is helpful to bank to know the satisfaction level of customers. The study is also
helpful to know problem in loan sanctioning Process. All this will help bank to make
improvement in their performance and to grow business.

1.7 Scope of the Study

1) Geographical Scope:-
The geographical scope of the study is confined to Patan branch only.
2) Conceptual Scope:-
The conceptual Scope Of study is confined to Loans procedure.
3) Analytical Scope:-
The analytical scope of study is confined to use of simple statistical tools like percentage and
weighted average.

1.8 Research Methodology

The study of research is descriptive inferential type.

9
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

1.9. 1 Data required:

To fulfill the objectives of the study researcher needs various types of data. The required data for
the study is as follow-:
a) Primary Data :-
Customer’s opinions about loan procedure, their satisfaction level etc.

b) Secondary Data :-
Data of various loan of The Patan Urban Co-Op Bank Ltd Patan condition of loan sanctioning,
Limit of loan sanctioning Rules and condition for loans, Data of past years loans.

1.9.2 Data source:

Basically data is collected from two sources i.e. primary source and secondary source.

c) Primary Data :-
The information collected by researcher through schedule as well as through
observation and discussion with customers and management.
d) Secondary Data :-
Secondary data has been collected through web site and bank records and books.
1.8.4 Sampling:
Sample size 61
1.8.5 Sampling Method:-
For sampling use convenient sampling method.

10
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

1.9 Chapterisation:
This project report has been prepared through five chapters as follows-:

Chapter 1:- Introduction to Study

This chapter highlights on introduction to study management problem, Objectives, scope and
importance of the study and research methodology.

Chapter 2:- Company Profile

This chapter is related to organizational profile. This chapter encompasses introduction of the
company/organization, history, financial
Performance, future thrust of the bank.

Chapter 3:- Conceptual Framework

This chapter deals with conceptual framework. This chapter encompasses introduction, history of
various schemes objectives and Needs, advantages of loans.

Chapter 4:- Data Analysis & Interpretation

This chapter focuses on analysis and interpretation of data, researcher has collected data for the
purpose of study this data is clearly fulfill the objectives of the study.

Chapter 5:- findings & suggestion

In order to derivation meaningful result researcher has analyzed the table & graph. The
researcher has drawn some findings & has given suggestion based on data analysis &
observation of data.

11
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

CHAPTER 2
ORGANIZATIONAL PROFILE

2.1 Introduction:
Patan taluka is very small and undeveloped village in the Satara district. In this village only one
or two large industry gives the opportunity for job. all over Maharashtra and near the state of
Maharashtra industries and business developing in large scale for help of electronic sources of
Patan taluka “koyna dam” on these electronic projects supplying light for all business or industry
on these way Patan taluka is undeveloped is not good situation for all peoples of Patan.
At present time Patan Urban Bank is playing in very vital role in developing Patan taluka and
they are opening new branches namely Patan Urban Co-Operative Bank Ltd Malharpeth and
Patan Urban Co-Operative Bank Ltd Debewadi. These new branches and main branch develops
good manners and main thing good will, transparency in transaction.

2.2 History of bank

Patan taluka depend upon other outsiders banks it is not good for development of Patan
so people can decide change this situation we can starting or establishing the own bank? This
bank supplying large capital for the small scale and large scale industries in the Patan taluka on
these purpose and thought of employees come together and establish The Patan Urban Co-
Operative Bank on the date of 31-3-97. The end of year banks total number of share holders is
1487.
The period of starting collection of capital for bank people’s gives very good response
this is unexpected &very fabulous. Only one and half day bank can collect capital for Rs.11,
00,000 on the date of 17-1-96. Receiving the registration notice bank is very thankful for people.
Reserve bank of India license have also important for starting actual bank transaction reserve
bank gives the license on the date of 18-6-96. License no. is UBD/ maharashtra/1251p. And bank
registration date of 7-11-96. But actual banking transaction starts the date of 22-10-96. End of
the year balance sheet & profit& loss a/c these first annual report urban bank is publish the date

12
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

of 20-10-96. This day of “dshera” on these day bank can officially celebrating the opening
ceremony bank is start actual banking transaction in 22-10-96.

2.3 Location of Bank:

Bank Details:

Bank Name: THE PATAN URBAN CO-OPERATIVE BANK LTD, PATAN

Address: 886 A, Main road, Patan
Tal-Patan. Dist-Satara 415206.
E-mail: patanurban@rediffmail.com
Phone no: (02372)282921
Fax: 283350
Established: 17/01/1996
Plant: Total area 6000 sq. feet.
State: Maharashtra.

2.4 Strategic contents:

2.4.1 Vision:
Bank has a network of 5 branches in Patan taluka. The planning for spreading network of 15
branches by the year 2015in the satara district. Bank has plan for introducing core banking
solution and A.T.M. centre to offer integrated service to its customer.

2.4.2 Mission:

The Patan Urban Co-Operative Bank Ltd Patan has Following Mission -:
 To ensure quick and efficient response to customer expectations.

 To adopt latest technology on a continuous basis.

 To build proactive, professional and involved workforce.

 To enhance the shareholders’ wealth through best practices.

13
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

2.5 Objectives of Bank

The Patan Urban Co- Operative Bank Ltd Patan has following Objectives:-
1. The mission of bank is to best in Patan taluka & most linked in other urban banks.
2. The bank wishes to cross business level of Rs.470 Lakes by March 2013
3. To start ATM facilities.
4. To provide financial help to family members of shareholders for business purpose,
Education purpose, agriculture etc

2.6 Future plans of the bank:

1. To start net banking facility in all branches of bank.
2. To start ATM facility in selected location.
3. To take new area of business for loan sanctioning.
4. Main future plan is decrease the rate of interest because more borrowers take loan from
this bank
.

2.7 Services of bank:

The bank offers following products to its customer-

2.7.1. Deposits:
The bank provides various deposit schemes under different account heads. Bank gives attractive
interest rates to all the account holders. Bank gives highest interest to the deposits of senior
citizens. The bank gives interest on the deposit as per the type and period of deposit. The
following are the account heads under which bank accepts the deposits –
1. Current Account
2. Saving Account
3. Fixed Deposit Account
4. Other type Deposit Account
14
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

2.7.2. Loans & Advances of The bank:

Advances are the most important product of the bank which generates revenue. The Patan Urban
Bank’ provides the various loan types under different heads. The loans provided by bank carry
different interest rates as per its loan type. The bank gives loan after putting some margin to
every hypothecation loan to the customer. The various types of loan offered by bank are as
follows-
1. Cash Credit Loan
2. Machine Loan
3. Vehicle Loan
4. Gold Loan
5. Housing Loan
6. Loan against fix deposit
7. Salary secured Loan
8. National saving certificate

2.7.3. Ancillary Services of the Bank:

Bank provides the ancillary services for the additional revenue generation. The motive behind
these services can be the existing product promotion. The Patan Urban Bank provides various
ancillary services as under-

1. Locker facility

2. Demand draft and Cheque Clearance

3. Issue of D.D./M.T./T.T.

15
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

2.7.4 Locker facility:

It is important services provided by bank of keeping in safe custody valuables of its customers
such as gold, silver ornaments, important document etc.

1. Demand draft and cheque clearance:

One of the important agency service provided by bank is clearance of D.D. and Cheque of
customers and to encase the amount from the instrument.

2. Issue of D.D./M.T./T.T:

By operating this function bank transfers the funds from one place to another. They serve as best
mediums for remittance of funds

2.8 Function of bank:

The function of bank are divided into two categories

1. Primary function

2. Secondary functions including agency functions

1. Primary function:

The primary functions of the Patan Urban Co-Operative Bank include

A. Accepting deposits

B. Granting loans and advances

16
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

A. Accepting deposits:

The most important activity of a co-operative bank is to mobilize deposits from the public.
People who have surplus income and savings find it convenient to deposit the amounts with
banks.

Depending upon the nature of deposits, funds deposited with bank also earn interest. Thus,
deposits with the bank grow along with the interest earned. If the rate of interest in higher. Public
are motivated to deposited more funds with the bank. There is also safety of funds deposited with
the bank.

B. Granting of Loans and Advances:

The second important functions of a co-operative bank are to grant loans and advances. Such
loans and advances are given to member of the public and to the business community at a higher
rate of interest charged on loans and advances various depending upon the purpose, period and
the mode of repayment. The differences between the rate of interest allowed on deposits and the
rate charged on the loans is the main source of Bank’s income.

2. Secondary functions:

Besides the primary functions of accepting deposits and lending money, banks perform a No. of
other functions which are called secondary functions. There are as follows –

a. Issuing letters of credit, traveler’s cheques notes etc.

b. Undertaking safe custody of valuables, important documents, and securities by providing safe
deposit vaults or lockers.
17
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

c. Providing customers with facilities of foreign exchange

d. Transferring money from one place to another and from one branch to another branch of the
bank.

e. Standing guarantee on behalf of its customers, for making payments for purchase of goods,
machinery, vehicles etc.

f. Collecting and supplying business information.

g. Issuing demand drafts and pay orders.

h. Providing reports on the reports on the credit worthiness of customers.

18
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

2.9 Financial Position of bank

Sr. no. Year Deposit Advance Net profit

(In Lakes.) (In Lakes ) (In Lakes.)
1 09-10 3135.76 1772.74 21.70
2 10-11 3762.72 2213.72 25.61
3 11-12 4425.71 2934.57 35.44
4 12-13 5581.25 3643.21 62.82

Above table shows financial position of the bank. It includes the data of Deposit, Advance, and
Net Profit. Deposits and advances increases year by year.

2.10Human Resource scenario:

Designation No. of Employees
Branch Manager 1
Assistant Manager 1
Cashier 1
Clerks 3
Sub-staff 1
Total 7
(Source: secondary data)

2.11 Competitors:
All co-operative banks, nationalized banks, private banks in Patan are competitors of bank.

19
SHIVAJI UNIVERSITY, KOLHAPUR
 K.B.P.I.M.S.R SATARA M.B.A PROJECT

2.12 Organization Structure:

Board of Directors

Managing Director

Manager Manager

Recovery Advance EDP

Account/Audit Administration Officer Officer
Officer Officer
Clerk
Clerk
Clerk Clerk Clerk
Clerk Clerk

Clerk
Clerk

Clerk Peon
Clerk

Clerk
Peon Peon
Clerk nnn

Peon
Peon

20
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

CHAPTER 3
CONCEPTUAL FRAMEWORK
3.1 Introduction:
The Patan Urban Co-Operative Bank Ltd Patan Loans in three types of ways Short Term,
Medium Term and Long Term Loans. The following diagram shows the various ways of
loans.

3.2 Concepts related to borrowing of loan:

Following are mentioned various concepts which are generally used in banking industry.
These concepts are related with different types of loan.

Loan

Long Term Medium Term Short Term

Loan Loan Loan

21
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

A. Loan:
Loan means “a banker paid a certain sum of money to its borrowers on his hand at certain
period and at certain rate of interest”
The loan classified into three types such as term loan, cash credit and overdraft and its
duration depends upon the type of loan i.e. long term, medium term & short term.

1. Long term loan:

The duration of long term loan is up to7 years to 10 years are entered in to long term loan
housing loan, machinery loan are entered into long term loan.
2. Medium term loan:
The duration of loan is more than 3 years but less than 7 years are entered in to medium.
Medium term loan is useful for vehicle loan borrower.
3. Short term loan:
The duration of repay the loan depend upon the type of loan. Loan should be less than 3
years entered in to the short term generally cash credit is entered in to short type of loan.

B. Cash credit:
A cash credit is an agreement where customer is allowed to borrow money up to certain
limit. It is permanent arrangement here customer cannot with draw whole sanctioned amount
once, but draw the amount as when requires. Interest only charged on whatever amount with
draw an.
Businessman are mostly preferred such type of loan and they required more amount for day to
day transaction.

C. Overdraft:
Overdraft is arrangement between bank and customers by which the letter is allowed to with
draw over and above his credit balance. The interest charged on whatever amount withdraws by
borrower.

22
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

D. Purposes of loan:
The loan can be secured for any following purposes:
I. For the purpose of land and building or construction.

II. For the purpose of machinery.

III. For financing the working capital.

IV. For the purchase of vehicle.

V. For some personal purposes.

3.3 Various types of loan schemes of Bank:

The Patan Urban Co-Operative Bank Ltd Patan provides loan facilities to the customer
these facilities are as follows.

1. Housing loan:
Bank provides loan housing purposes includes the housing construction, purchase of land
and purchase the flat. This type of loan is also one of the major constructions to the credit of the
bank these loans basically taken by the public for housing and are also taken by the builders for
contraction purpose.

I. Amount: Rs. 50000to Rs.25,00,000

II. period: 3 to 7 years

III. Rate of interest 15%

23
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

2. Loan against fixed deposit:

The bank providing the loan against fixed deposit these are short term loan.
I. Amount- Minimum amount in fixed deposit.

II. Period – It depends upon amount of loan receipt.

III. Rate of interest- it differs to amount of loan.

3. Gold loan:
The bank has been also providing for consumer is gold loan consumers having various reasons
for gold loan have to take.
I. Amount- Minimum- RS.20000

II. Period – 1 year

III. Rate of interest- 13%

4. Vehicle loan:
As the name implies the bank gives loan the purchase of vehicle in the case the valuation of
the vehicle is must. This valuation can be done by the bank or the customer himself. In case of
loan vehicle the bill quotation is used for considering vehicles values.

I. Amount – 75% amount of vehicle amount.

II. Period- Minimum 3 years to maximum 5 years.

III. Rate of interest- 14%

5. Cash credit loan-

Bank has been also providing for the consumer is short term facilitate to cash credit.
I. Amount- minimum Rs. 100000 to maximum Rs.700000.

II. Period- 1 year.

III. Rate of interest – 15%

24
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

6. Unsecured loan-
Unsecured loan means a loan means a loan not so secured. These are monetary that are not
secured against the borrowers assets. The bank has been also providing for consumer is
unsecured loan.
I. Amount- Rs.100000.

II. Period – 1 year.

III. Rate of interest- 16%.

7. Salary secured loan-

The bank has also providing the facility through this type of loan. In this type of loan
borrowers salary is secured.
I. Amount- Rs. 100000.

II. Period – 3 years to 5 years.

8. Staff loan-
This loan is also providing to the staff who is working in this bank.
I. Amount- It depends on salary of particular employee.

II. Period- 3 years to 5 years.

III. Rate of interest- 5% minimum.

3.4 Loan sanctioning procedure:

1. Generation of steps/Sourcing of business.

2. Contact & collection of documents from customer.
3. Completion of documents.
4. Field investigation report.
5. Verification of relationship officer.
6. Personal discussion.

25
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

7. Final approval or rejection by the branch manager.

8. Sanction letter delivered to the customer.

1. Generation of leads/Sourcing of business:

This is an important step in the loan procedure cycle to keep the organization moving
successfully. It is essential to generate cases to credit The Patan Urban Co-Operative Bank Ltd
Patan. Uses methods to source business & generate leads-
I) Mail.
II) Walk-in interview.
III) Telephone enquiry.
IV) Customer reference.
V) Approved project file.

2. Contact & collection of documents from customer:-

Once the lead has been sourced the clerk contacts him & gives him a list of documents long with
other corresponding information. When the documents are handed over to clerk, he submits
documents along with the application form to The Patan Urban Co-Operative Bank Ltd Patan.
Clerk gives an idea about how much loan cans customer avail as per his income.

3. Completion of documents:-
The document have been collected by the clerk, hand over to the administration officer, then
complete documents in special file provided for The Patan Urban Co-Operative Bank Ltd Patan
in accordance with the requirement of The Patan Urban Co-Operative Bank Ltd Patan.

4. Field investigation report:-

After completing the documents the administration officer is field investigation report with the
data compiled from the file before moving it on the next stage.

26
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

5. Verification by manager:-
After completion of documents and filing of it, the documents are handed over to the manager,
who verifies the documents to check for loan analysis the strength and weakness of a case, the
loan eligibility & the requirement of additional documents. The sales manager act as a filter
allowing good case to flow through for final approval while do not fit into the polices of The
Patan Urban Co-Operative Bank Ltd Patan. Manager make signature if the case fit into policies
of the bank.

6. Personal discussion:
PD is an important stage in sanction process. As per norms loan amount is decided on the basis
of documentation but the customer knowledge, his behavior can be decided on the basis of PD
with him. It helps to judge the creditworthiness of applicant which helps organization in future.
Manager make signature if the case fit into policies of the bank.

7. Final approval or rejection by the branch credit manager/Board Member’s of bank

The file is send to the branch credit manager for final approval. After checking the file branch
credit manager take final decision of approval or rejection of the case. If the case is rejected the
documents are returned to the customer & if the case is approved then it goes to the next step.

8. Sanction letter delivered to the customer

This is the final step in sanction process after receiving the sanction letter it hand over the
sanction letter to customer along with a list of legal documents required for the next stage i.e.
disbursement stage.

27
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

3.5 Loan Disbursement Procedure:

1. Collection of legal documents.
2. Completion of documents.
3. Legal appraisal.
4. Technical appraisal.
5. Final check by the B M.
6. Cheque of disbursement.
1. Collection of legal documents:

This is the first step towards the disbursement of cheque after sanction of the case. Already the
clerk collects the legal document from the customer.

2. Completion of documents:

Once the documents are collected by the clerk he hand it over to the administration officer for
compilation the officer complete the documents and process.
3. Legal Appraisal:

The legal appraisal of a case is an important step & it done by lawyer specially appointed. The
lawyer verifies the documents to check if the title of the property is free & marketable from all
obligations; other legal aspect is free from any fraud. Once the documents have been verified he
submits a legal report to bank. The lawyer report is very essential without his approval no case
is clear. In case of negative remark mentioned by the lawyer the case is being rejected.
.
4. Final Cheque by the B M:-
The B M makes a final check of the documents before taking his decision. If the case is clear
then B M sends the file to M D.

5. Cheque disbursement:-
This is final step in the disbursement stage. The operation manager prepare the cheque along
with the letter which is handed over to the sales officer who then five it to the customer.
28
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

Disbursement of cheque is done in accordance with the stage of construction a reported by

technical advisor.
The cheque is disbursed in two ways,
1. as a part disbursement.
2. Fully disbursement.

3.6Advantages of loan system:

1. Finical discipline on the borrowers-

As the time of repayment of the loan or its installments is fixed in advance this systems ensures
a greater degree of self discipline on the borrower as compared to the cash credit system.

2. Periodic review of local account-

Whenever any loan is granted or its renewal is sanctioned the banker gets on opportunity of
automatically. Reviewing the loan account unsatisfactory loan account may be discontinued at
the discretion of the banker.

3. Profitability:
The system is comparatively simple. Interest accrues to the bank on the entire amount lent to a
customer.

3.7 Drawbacks of loan systems:

1. Inflexibility:
1. Every time loan is required it is to be negotiated with the banker. To avoid it, borers may
borrow in excess of their exact requirements to provide for any contingency.

29
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

2. Bank has no control over the use of funds borrowed by the customer. However banks insists
vehicle purchased with loan amount.

3. through the loans are for fixed periods but in practice they all over i.e. they are renewed
frequently.

4. Loan documentation is more comprehensive as compared to each credit system.

30
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

CHAPTER 4
DATA ANALYSIS AND INTERPRETATION

4.1 INTRODUCTION
After collection of data it is analyzed as per the outline laid down in research design. In the
process of analysis of data, computation of various percentages, weighted average methods are
used. This chapter deals with data processing, tabulation, presentation analysis and interpretation
of data.

4.2 DATA ANALYSIS AND INTERPRETATION

Data Analysis deals with analysis of whole data collected through various techniques. The
researcher uses simple statistical tools likert scale, rank, weighted average, such as and for data
analysis purpose.

31
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

Table 4.2.1 Occupation of the respondent

Following table shows occupation of the respondent
Sr No Particular Frequency Percentage
1 Business 14 22.95%
2 Service 19 31.14%
3 Farming 11 18.03%
4 House wives 7 11.47%
5 Other 10 16.39%
Total 61 100
(Source- Primary Data)

Above table shows the classification of respondents according to their occupation, in which
majority of respondent i.e. 31.14% are doing service, 22.95% are doing business, 18.03% are
farmers, 16.39% are in other fields and only 11.47% are house wives.

Graph 4.2.1
Occupation of the respondent

35

30

25

20
percentage
15

10

0
Business service farming house wife other

32
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

Table no 4.2.2 Income Wise classification of respondent

Following table shows Income Wise Classification

Sr No Particular Frequency Percentage

1 Below 5000 4 6.55%
2 5001-10000 23 37.70%
3 10001-15000 16 26.22%
4 15001-20000 07 11.47%
5 Above 20000 11 18.03%
Total 61 100%
(Source- Primary Data)
The Above table shows the income wise classification of respondent in which 37.70%
respondents are belongs to 5001-10000 income group, 26.22% are belongs to 10001-15000,
18.03% are belongs to above 20000, 11.47% are belongs to 15001-20000, 6.55% respondent
belongs to Below 5000 income group.

Graph 4.2.2
Income wise classification of respondent
40
35
30
25
20
15
percentage
10
5
0

33
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

Table 4.2.3 Types of loan

Following table shows that types of loan which is borrowed by the respondents.
Sr No Particular Frequency Percentage
1 Housing loan 10 16.39 %
2 Cash credit 16 26.22%
3 Gold loan 14 22.95 %
4 Vehicle loan 12 19.67%
5 Salary secured loan 9 14.75 %
Total 61 100
(Source- Primary Data)

The Above table shows the loan taken by the respondent in which 26.22% respondents take cash
credit loan, 22.95% respondent take gold loan, 19.67% respondent take vehicle loan, 14.75%
respondents take salary secured loan, 16.39% respondents take housing loan.

Graph 4.2.3
Types of the loan
30.00%

25.00%

20.00%

15.00%
Percentage
10.00%

5.00%

0.00%
Housing Cash credit Gold loan Vehicle Salary
loan loan secured
loan

34
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

Table 4.2.4 Loan amount borrowed by the respondents

Following table shows that amount of the loan

Sr No Particular Frequency Percentage

1 Below 50000 15 24.59%
2 50000-100000 25 40.98%
3 100000-500000 09 14.75%
4 500000-1000000 08 13.11%
5 Above 1000000 04 6.55%
Total 61 100
(Source- Primary Data)
The Above table shows that amount of loan taken by the respondent in which 40.98% respondent
are belongs to 50000-100000, 24.59% respondent are belongs to below 50000, 14.75% are
belongs 100000-500000, 13.11% are belongs 500000-1000000, 6.55% of belongs above
1000000.

Graph 4.2.4
Loan borrowed by the respondent

45
40
35
30
25
20
15 percentage
10
5
0

35
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

Table no 4.2.5 Interest rate charged by bank

Following table shows that different interest charged by the bank

Sr. No Particular Frequency Percentage

1 10% to 12% 19 31.14%
2 12% to 14% 28 45.90%
3 14% to 16% 14 22.95%
Total 61 100
(Source- Primary Data)
The Above table shows that different interest rate charged by the bank that is 45.90%
respondents are charged with the interest rate from 12% to14%, 31.14% are charged 10%to12%
and 22.95% are charged 14%to16%.

Graph 4.2.5
Interest charged by the bank
50
45
40
35
30
25
Percentage
20
15
10
5
0
10%to12% 12%to14% 14%to16%

36
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

Table 4.2.6 Time taken by bank to sanction the loan

Following table shows that time taken by bank to sanction the loan.
Sr. Particular Frequency Percentage
No
1 1 to 2 weeks 08 13.11%
2 2 to 4 weeks 20 32.78%
3 1 to 2 months 26 42.62%
4 Above 2 months 07 11.47%
Total 61 100
(Source- Primary Data)

The Above table shows that the time taken by bank to sanction the loan that 42.62% respondent
said 1 to 2 months, 32.78% said 2 to 4weeks, 13.11% said 1 to 2 weeks & 11.47% said above 2
months.

Graph 4.2.6
Graph is shows that time taken by bank to sanction the loan

45.00%
40.00%
35.00%
30.00%
25.00%
20.00% percentage
15.00%
10.00%
5.00%
0.00%
1 to 2 weeks 2 to 4 weeks 1 to 2 months Above 2
months

37
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

Table no 4.2.7 Satisfaction level of the respondent:

Following table shows Satisfaction level of the respondents towards loan procedure

Sr. No Particulars Weighted Rank

average
1 Loan information 13.33
given by authority 5
2 Interest Rate 17.00 1
3 Bank Location 15.66 3
4 Documentation required 14.53 4
5 Service quality 16.8 2
6 Bank charges 12.2 6
7 Knowledge of employees 7.66 10
8 Behavior of staff 11.66 7
9 Time taken for loan sanction 10.33 8
10 Repayment duration 6.73 11
11 Convenience of installment 9.33 9
(Source- Primary Data)

The above table shows the satisfaction level of respondents. Majority of respondents are
satisfied about the interest rate of the bank and service quality of the bank which is ranked 1 and
2. But maximum of respondents are not satisfied about the repayment duration and knowledge of
employee as less preferred as ranked 11 and 10.

38
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

CHAPTER 5
FINDINGS AND SUGGESTION

5.1 Introduction:
In order to define meaningful result researcher has analyzed the data and findings are drawn
based on analysis of data as well as from researcher at the time of study. The findings are as
follows.

5.2 Findings:
With the help of the analysis researcher has observed the following findings.

1. Most of the Respondents that is 31.14% and 22.95% of the bank are from service
and business category.(Table No.4.2.1)

2. Most of the Respondents that is 37.70% having the income between 5001- 10000.
(Table No.4.2.2)

3. Most of the Respondents that is 26.22% have taken cash credit loan and only 16.39%
have taken housing loan.(Table No.4.2.3)

4. Most of the Respondents have taken loan up to Rs. 100000. ( Table No.4.2.4)

5. Loan sanctioning period for 42.62% of the respondents is from 1to 2 months.

(Table No.4.2.6)
39
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

6. Most of the Respondents are satisfied with the bank location. (Table No.4.2.5)

7. Most of the respondents are not satisfied about repayment duration of loan.
(Table No.4.2.5)

8. Some of the respondents are not satisfied about the knowledge of employees.
(Table No.4.2.5)

5.2 Suggestions:
The researcher has provided some suggestions to the bank. These are as follows
1) The bank should reformulate the repayment duration of loan.

2) The bank should increase the advertisement of the housing loan.

3) Bank should do take steps to reduce the sanctioning period of loan.

4) Bank should give special training to the employees of the bank to increase their
Knowledge.

5.3 Conclusions:
The above study was focused on knowing satisfaction level toward various loans and also the
procedure of loan. Bank can arrange training programs for employees for increasing knowledge
of employees. Reformulation of repayment duration and reduction in sanctioning period of loan
should be done by bank. If the bank takes the corrective measures as per suggested it will be
advantageous to it.

40
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

Annexure
Questionnaire
1. Name of Borrower:-
2. Address:-
3. Contact No:-

4. What is your occupation?

i. Business ii. Service
iii. Farming iv. House wife
v. Other

5. What is your monthly income?

i. Below 5000 ii.5001-10000
Iii.10001-15000 iv.15001-20000
v. Above 20000

6. Which type of loan you have borrowed?

i. Housing loan ii. Cash credit
iii. Gold Loan iv. Vehicle Loan
v. salary secured loan

7. How much amount you borrowed?

i. Below 50000 ii. 50000-1Lakhs
Iii.1Lakhs-5Lakhs iv.5Lakhs-10lakhs
v. Above 10Lakhs

8. What is interest rate charged by bank?

i.10% to 12% ii.12% to 14%
iii.14% to 16%

41
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

9. How many days were taken by bank to sanction the loan after submitting the document?
i. 1 to 2 week’s ii. 2 to 4 weeks
iii. 1 to 2 months iv. Above 2 months
10. What is your Experience in collecting and submitting the document?
11. Express your overall satisfaction level regarding following services availed by you

Sr. Particulars Satisfaction Level

No. Strongly Dissatisfied Partially Satisfied Strongly
Dissatisfied (2) Satisfied (4) Satisfied
(1) (3) (5)

1. Loan information
give by authority
2. Interest Rate
3. Bank Location
4. Documentation
required
5. Service quality
6. Bank charges
7. Knowledge of
Employees
8. Behavior of staff
9. Time taken For
loan sanction
10. Repayment
Duration
11. Convenience of
Installment
42
SHIVAJI UNIVERSITY, KOLHAPUR
K.B.P.I.M.S.R SATARA M.B.A PROJECT

BIBLIOGRAPHY

1. Bank annual publications and financial reports.

Reference Book:

1. Misra Puri - Indian Economy Book (29th edition)

Websites:

1. www.wikipedia.org
2. www.investopdia.com
3. www.sebi.com

43
SHIVAJI UNIVERSITY, KOLHAPUR