PRESENTATION REPORT ON

LOANS AND ADVANCES

FOR THE FULFILLMENT OF THE

REQUIREMENT FOR THE DEGREE OF
B.Com OF DAV UNIVERSITY
2017-2020
 ACKNOWLEDGEMENT

I would like to take this opportunity to express my deep and sincere gratitude to
“The Jalandhar Central Cooperative Bank” Who gave me a chance to show my
capability and allowed me to carry out a project guide under Branch Manager Mrs.
Mamta Kaushal.
By working on this project, I got an opportunity to learn many aspects of banking
sector and Loans and Advances. The credit also goes to the timely guidance and
support given by the other banking staff who has helped me in enhancing my
interest and understanding of the intricacies involved with the subject.
Last, but not the least, I would like to thank everybody who has helped me in the
successful completion of the project. The whole experience was gratifying,
especially in terms of knowledge and information.
 
Harpinder Singh
(11701533)
 INTRODUCTION OF BAKING SYSTEM

BANK
Finance is the life blood of trade, commerce and industry. Now-a-days, banking sector acts as the
backbone of modern business. Development of any country mainly depends upon the banking
system.
A bank is a financial institution which deals with deposits and advances and other related services.
It receives money from those who want to save in the form of deposits and it lends money to those
who need it.
 
BANKING STRUCTURE IN INDIA
 

RBI
(Apex Bank)

Scheduled Bank

Public Banks
C o mm erci a l B a n k

Private Bank
Non- Scheduled
Foreign Banks
Bank
RRBs
Cooperative Bank
Reserve Bank of India:
Reserve Bank of India is the Central Bank of our country. It was established on 1st April 1935 accordance
with the provisions of the Reserve Bank of India Act, 1934. It holds the apex position in the banking structure.
RBI performs various developmental and promotional functions.

Scheduled Banks
Scheduled Banks in India refer to those banks which have been included in the Second Schedule of Reserve
Bank of India Act, 1934. In order to be included under this schedule of the RBI Act, banks have to fulfil certain
conditions such as having a paid up capital and reserves of at least 0.5 million and satisfying the Reserve Bank
that its affairs are not being conducted in a manner prejudicial to the interests of its depositors. Scheduled banks
are further classified into commercial and cooperative banks.

Commercial Bank
A commercial bank is a type of financial institution that provides services such asaccepting deposits, making
business loans, and offering basic investment products. Itsoperations regulated by RBI.

Public Sector Banks:-

Currently there are 21 nationalized banks in India. The public sector accounts for 75 percent of total banking
business in India and State Bank of India is the largest commercial bank in terms of volume of all commercial
banks.Examples of public sector banks are: SBI, Bank of India, Canara Bank, etc.
Private Sector Banks:-
The "private-sector banks" are banks where greater parts of stake or equity are held by the private shareholders
and not by government.Examples of private sector banks are: ICICI Bank, Axis bank, HDFC, etc.
 
Foreign banks in India:-
A type of foreign bank that is obligated to follow the regulations of both the home and host countries. Because
the foreign branch banks loan limits are based on the parent banks capital, foreign banks can provide more loans
than subsidiary banks. Examples of foreign banks in India are: HSBC, Citibank, Standard Chartered Bank, etc.

Regional Rural Banks:-

Regional Rural Banks are local level banking organizations operating in different States of India. They have
been created with a view to serve primarily the rural areas of India with basic banking and financial services.
However, RRBs may have branches set up for urban operations and their area of operation may include urban
areas too.

Cooperative Bank
Cooperative bank is an institution established on the cooperative basis and dealing in ordinary banking
business. Like other banks, the cooperative banks are founded by collecting funds through shares, accept deposits
and grant loans. Cooperative banks are generally concerned with the rural credit and provide financial assistance
for agricultural and rural activities.
Aim of Cooperative Bank
The Main aim of cooperative Banks are to provide cheaper credit facilities to their members
and not to maximize profit. They aim at service Motto.
 
Functions of Cooperative Bank
o They function with the rule of “one member, one vote” and function on “no profit, no loss”
basis.
o It performs all the main banking functions of deposit mobilization, the supply of credit and
provision of remittance facilities.
o It provides financial assistance to the people with small means to protect them from the debt
trap of the moneylenders.
o It supervises and guides affiliated societies.
o Mobilization of funds from their members.
o Advance loans to the members.
o Rural financing for farming, cattle, milk, hatchery, personal finance, etc.
o Co-operative banks are perhaps the first government sponsored, government-supported, and
government subsidised financial agency in India. They get financial and other help from the
Reserve Bank of India NABARD, central government and state governments. 
 THE INTRODUCTION OF THE JALANDHAR CENTRAL COOPERATIVE BANK

•The Jalandhar Central Cooperative Bank Ltd. Jalandhar is a prestigious Bank in the State of Punjab. It was
registered on 11.02.1909. The plan to open the bank was motivated by Hon’ble Rai Bahadur Badri Dass and
Hon’ble Khan Bahadur Ahmed Shah with all. Worthy Khan Bahadur Ahmed Shah was the first President of
Bank. Bank started its business in a rented accommodation with a small amount of share capital Rs. 2.00 lac.
The Bank constructed its own building in 1924 at G.T. Road, Jalandhar and was inaugurated by C.A.H.
Townsend Esq. C.I. Commissioner, Jalandhar. The Head Office building of the bank situated Opp. General
Post Office, G.T. Road Jalandhar was inaugurated in 1987 by Shri M.S. Gill, I.A.S. Financial
Commissioner (Development).The Main Branch and NRI Branch are operational in this Building currently.
Previously, the Cooperative Societies and individual organization were having the partnership in the bank
but now individual’s partnership has been retired.

There were five Unions collaborating with the Bank for providing loan to Cooperative Organizations. These
Unions were completely merged with the bank in 1956. Bank is providing services in Shahkot, Nakodar,
Phillaur and Jalandhar tehsils of District Jalandhar. In the year 1956, the Bank was functioning with only two
branches in the district. As of now, the presence of the bank is spread in every nook and corner of the District
Jalandhar through a wide network of 72 branches and the business of the bank crossed Rs.194005.21 lacs as
on 31.3.2014 which is highest amongst all the Cooperative Banks in the State of Punjab in absolute term.
 There are 814 Cooperative societies which are members of this bank, out of which
245 are Agriculture Cooperative Societies. Bank is fulfilling the requirements of
46015 members of these societies through Kisan Credit Cards by providing loan at the
cheapest rate of interest i.e. 7%. Thus, Bank is covering 90% rural families to provide
them services through these societies. The Bank is also providing loan for Self
Employment to Unemployed youngsters. Thus the Bank’s role is restricted not only to
societies but reaching out to the Individuals also.

The Bank has formed 621 Groups under Self Help Group Schemes launched by
Government of India  and out of 621 Self Help Groups, 463 Self Help Groups have
been linked with Credit facility.

Apart from the District Manager/Chief Executive Officer of the Bank, the affairs of the
Bank are being managed by the elected Board of Directors consisting of 9(nine)
Directors which were elected on 22.12.2010 for the term of five years.
 SWOT Analysis of The Jalandhar Central Cooperative Bank

Strengths
Control NPA
High Rate of Interest
Approach to Lower Section of Society
Controlled by NABARD

Weaknesses
Lack of basic Infrastructure
Lack of Modern Technology
Lack of staff members

Opportunities
Small scale business banking across India
Can use Modern Technology
Installation of ATM’s and better customers services

Threats
Economic crisis and economic fluctuations
Highly competitive environment
 
 INTRODUCTION OF LOANS AND ADVANCES

The term ‘loan’ refers to the amount borrowed by one person from another. The amount is
in the nature of loan and refers to the sum paid to the borrower. Thus, from the view point
of borrower, it is ‘borrowing’ and from the view point of bank, it is ‘lending’. Loan may be
regarded as ‘credit’ granted where the money is disbursed and its recovery is made on a
later date. It is a debit for a borrower. While granting loans, credit is given for a definite
purpose and for a predetermined period. Interest is charged on the loan at agreed rate and
intervals of payment. ‘Advance’ on the other hand, is a ‘credit facility’ granted by bank.
Banks grant advances largely for short-term purpose, such as purchase of goods traded in
and meeting other short-term trading liabilities. There is a sense of debt in loan, where as an
advance is a facility being availed of by the borrower. However, like loans, advances are
also too repaid. Thus a credit facility repayable in installments over a period is termed as
loan while a credit facility repayable within one year may be known as advances.
 
Loans and advances granted by commercial banks are highly beneficial to individuals,
firms, companies and industrial concerns. The growth and diversification of business
activities are effected to a large extent through bank financing. Loans and advances granted
by banks help in meeting short-term and long term financial needs of business enterprises.
LOANS PROVIDED BY THE JALANDHAR CENTRAL COOPERATIVE BANK

• Short Term Agriculture Loans (Crop Loan)

• Medium Term Agriculture Loan
• Revolving Cash Credit to Farmers(RCC)
• Dairy Loan to Members of MPCS
• Mini Dairy Scheme
• Commercial Dairy Development Scheme
• Non Farm Sector Loan Scheme (NFS)
• Rural Housing Scheme
• Urban Housing Scheme
• Personal Loan Scheme
• Vehicle Loan Scheme
• Second Hand Vehicle Loan Scheme
• Consumer Durable Loan
• Two Wheeler Loan to Farmers
• Cash Credit Facility to Traders
• Education Loan
• Cooperative Education Loan Scheme Children of Poor Farmers, Dalits, BC, etc.
• Loan Against Property
• Loan Against Rental Income Scheme
• Loan Scheme for Earnest Money
• Mai Bhago Istri Shakti Scheme
• Bhai Lalo Sehkari Kirt Shakti Scheme
• Credit for Setting up of Net House
• Credit for Setting up of Agricultural Service Centre
• Personal Loan Scheme for Professionals
• Overdraft Facility to Salaried Employees having Salary Account with Coop. Bank
• Bee Keeping Loan Scheme
• Piggery Loan Scheme
• Goat Rearing Loan Scheme
• Fishery Development Loan Scheme
• Dairy loan for Purchase of One Cow
 WORK UNDERTAKEN

I got to know various things in the bank and it helped me alot to develop my
interpersonal skills. There were various thing that I used to do over there are performed
various activities too such as form filling which helped me to know every feature of the
form that what information is used for what purpose and also I helped other customers
who were unable to fill up the forms. Other than this I dealed with customers to help
them with their problems and with the staff I got to know that how I can tackle customer
problems or how to communicate with them so that they feel satisfied with the solutions
to their problems. Along with that i helped the customers by giving them the information
about loan requirements such as its eligibility, form filling, other requirements,etc. I
learned a way to make a good customer relationship which enhanced my ability to
communicate with others more confidently. Moreover many new things come up in my
way during internship which helped me to look closer to the working of the banks and
their staff members that how hardworking job that is. It just didn't provide me with an
internship certificate but it provided me with more curiosity to learn, to develop my
skills, to build more confidence in me and most importantly how to interact with the
outside world by tackling their problems or interecting with the new people. 
 
 The Forms are filled in bank:

• Deposit Form: A deposit slip is a small written form that is sometimes used to deposit funds

into a bank account. A deposit slip indicates the date, the name of the depositor, the
depositor's account number and the amounts of checks, cash and coin being deposited.
Withdrawal Form:A withdrawal Form involves removing funds from a bank account, savings
plan, pension or trust. In some cases, conditions must be met to withdraw funds without
penalization, and penalization for early withdrawal usually arises when a clause in an
investment contract is broken.
Transfer Voucher Form:The transfer voucher form is used to transfer cash (not budget) from one
unrestricted account to another.
Opening a new Account:-
Account opening form shall be filled up either by the customer or alternatively by the official of the bank.
All column of a form shall be up and no column shall be left blank. Struck off the column which is not
applicable. Name, parentage and address shall be taken on the AOF. Specimen of signature shall also be
obtained in the requisite column. Any alternation or cutting in the AOF (Account Opening Form) shall be
authentication by the customer(s) with full signature.

Special features of filling up of form:-

Form shall be filled up in the presence of the official of the bank.
Name: full name of the person desiring to open the account shall be obtained. In case of account of firm,
company, institution etc. the nature of the firmetc. shall be obtained in detail.

Address :address obtains shall be complete i.e. name, house no., floor no., street no., village and post
office, name of district, city, town and pin code are to be recorded in the form to avoid fictitious account.
• Permanent account number(PAN)
• Identity card issued by election commission
• Ration card
• Passport by regional passport office
• Aadhaar card
Any other documentary evidence in support of his address given in declaration.

Photograph: Account holder required to fix his/her recent passport size photo
Specimen of signature of all account holder must be taken in the presence of not only the bank
official but also the introducer.
Opening Account Form
INTER BANK CHEQUE DEPOSITS:
This bank received different types of cheques from different banks and branches. These
cheques are generally of their clients and this service is been given to clients for more ease
and transparency. This service had increases the trade as cheques can be deposited from any
state due to its nature of interbank.
KYC;-
It is the process of a business identifying and verifying the identity of its clients. The term is
also used to refer to the bank and anti-money laundering regulations which governs these
activities.

Why KYC is important:-

KYC or Know Your Customer is the process of a business identifying and verifying the
identity of its clients.The objective of KYC guidelines in banks is to prevent the banks from
being used, intentionally or unintentionally, by criminal elements for money laundering
activities.KYC is nothing but the bank asking for your identity proof. This prevents fraud and
misuse of banking facility. Kind of a security check. Just imagine if anyone can enter any
airplane without any security check or luggage scanning.
Process of KYC:-
To create and run an effective KYC program requires the following elements:
• Customer Identification Program (CIP): The CIP mandates that any individual conducting
financial transactions needs to have their identity verified. As a provision in the Patriot Act,
it’s designed to limit money laundering, terrorism funding, corruption and other illegal
activities.
• Customer Due Diligence: For any financial institution, one of the first analysis made is to
determine if you can trust a potential client. You need to make sure any potential customer is
worthy; customer due diligence (CDD) is a critical element of effectively managing your
risks.
• Ongoing Monitoring: It’s not enough to just check your customer once, you need to have a
program that knows your customer on an ongoing basis. The ongoing monitoring function
includes oversight of financial transactions and accounts based on thresholds developed as
part of a customer’s risk profile.