A Study and Analysis of Bank Loans
A Study and Analysis of Bank Loans
A Study and Analysis of Bank Loans
Place: Chennai
Date:
DECALARATION
I, Ms. C. ESSTHER RANI hereby declare that the project work titled A
Date:
Ms.________________
ACKNOWLEDGEMENTS
I adore and honor the Holy Trinity for strengthening me, being with me to guide and
help me complete this research work successfully.
ABSTRACT
A COMPARATIVE STUDY WITH REFERENCE TO RELATED
BANK LOANS IN CHENNAI.
Table of Contents
SL.NO
LIST OF CONTENTS
1.
LIST OF TABLES
2.
3.
CHAPTER 1 INTRODUCTION
PAGE NO
A2
A3
1
10
12
13
15
20
26
28
65
CONCULATION
67
BIBLIOGRAPHY
LIST OF TABLES
Table
No.
1
Title
Page No.
32
33
34
36
37
38
41
42
10
44
11
47
12
52
13
54
14
56
15
58
16
64
A2
40
LIST OF CHARTS
CHART
TITLE
NO
1
Lost four year Revenue statement
PAGE .NO.
45
Growth of Income
46
Jewel Loans
48
49
Development Loan
50
Secured Loan
51
53
55
60
10
61
11
62
12
63
A3
CHAPTER I
INTRODUCTION
9
CHAPTER-1
INTRODUCTION
India has a well developed banking system. Most of the banking in India was
founded by Indian entrepreneurs and visionaries in the pre-independence era to provide
financial assistance to traders to trade, agriculturists and budding India industrialist.
Indian banks have played a significant role in the development of Indian economy by
lending finance to Indian industry.
While the RBI became a state owned institution from January 1 st 1949, the
banking regulation act was enacted in 1949 providing a framework for regulation and
supervision of commercial banking activity. The first step towards the nationalization of
commercial banks was the result of a report by the committee of direction of all India
Credit survey. The committee recommended one strong integrated state partnered
commercial banking institution to stimulate banking development in general and rural
credit in particular.
10
REPCO bank is provided the loan in rehabilitating repatriates and customers through
following credit system in co-operative act. Banks provide the loan based on security
value. Governed by the Ministry of Home Affairs, Govt. of India.
The objective was to serve better the need of development of the conformity with
national priorities and objectives. Eleven years after nationalization of commercial
bank .The Government announced the nationalization of six more scheduled commercial
bank.
11
PRE-REFORM STATUS
While technically there was a competition between the banks and non-banks and
among bank substantially, competition was conditioned by policy as well as regulatory
environment common ownership by the government and agreement between government
of India as an owner and workers represented by the unions. Governed by the Ministry of
Home Affairs, Govt. of India.
REFORM MEASURES
The major challenge of the reform has been to introduce element of market incentive as
dominant factor gradually replacing the administratively coordinated planned action for
development. Such paradigm shift has several dimensions, the corporate government
being one of the important elements.
During reform period, the policy environment enhanced competition and provided greater
opportunity for exercise of what may be called genuine corporate element in each bank to
replace the element of coordinated the action of all entitled as join family to fulfill the
predetermined the priority
12
1) First greater competition was infused in banking system by permitting enter of private
sector banks to external loan to all sector and it is mainly focused on the repatriates &
customers
2) Second the reforms accord greater flexibility to the repco banking systems to manage
both of the pricing and quantity of resources for repatriates
4) An appropriate legal, institutional and regulatory framework has been put in place for
the repatriates other sector markets.
13
Over the years people have observed that, a company first task is to create customers
but todays customers face a vast array of product and brand choices, prices and services.
Thus, the traditional marketing theory and practice have focus on attracting new
customers rather than retaining existing once. Today, however although attracting new
customers remain as an important task, the emphasis should also be towards retaining
current customers and to build profitable long term relationship with them, but at the
same time have to think about the expansion of the present market also through the
proper promotion.
Facing an expanding economy and a rapidly growing market, companies should expand
their markets for facing new challenges, competitive strategies and practices. Growing
markets meant plentiful supply of new customers. Organizations could keep filling the
marketing bucket with new customers are rising, so organizations should evolve efficient
methods to promote their products.
It means the entire stream of purchases that the customer would make over a life time of
patronage. The key to building everlasting relationship is the creation of superior
customer value and satisfaction, and it should be reflected on the promotional activities of
the product.
14
a customer might have different level of expectations. Here if the product services
match their expectations they may rank it good, if the services exceeds expectations they
may rank it excellent, if it is ordinary they may rank it moderate and if the services are
not at all good they may rank it poor, thus leading to loss of customers.
The researcher carried a work on standing of REPCO Bank .with regard to the loan
product. Thus survey is totally based on the selected banks.
This study also helped to get good suggestion from the customers.REPCO bank has 43
branches with operations spread all over India.
In order to get more competitive and attract a large base of customers, it is important for
service institutions to provide good quality service to the customer. Range and quality
would enable the bank to improve the efficiency of the service offered. The REPCO bank
has in the past used internal resources in assessing the quality of service offered. It is now
felt that a study among their customers conducted by external agent would be necessary
to gain customers satisfaction with the service offered.
15
The project is a comparative analysis of the selected loan of the REPCO bank. this
project is carried out to find out the standing of REPCO loans compare to some selected
banks, which includes understand the product awareness and perception among target
customers, findings the features on which the sales force and bank should give more
importance and do a work to promote the product in the market. Thus, this project
becomes essential to get a competitive edge. Through this project an attempt has been
made to identify the explicit needs, attitude of the customers and promote the loan , as
they are the final judge of the services provided by the bank only when the bank is in
constant touch with its target customers.
16
PRIMARY OBJECTIVE:
Study and analysis the factors consider for bank loans (Repco bank) to
granted jewel loan (1 year), jewel loan special (6 months), development loan
(business loan), and secured loan (property loan).
SECONDARY OBJECTIVE:
17
18
Research in common parlance refers to search for knowledge. One can also define
research as a scientific and systematic search for pertinent information on a specific topic.
A research design is the arrangement of conditions for collection and analysis of data in a
manner that aim to combine relevance to the research purpose with economy in
procedure. In fact research design is the conceptual structure within which research is
conducted; it constitutes the blueprint for the collection, measurement and analysis of
data.
STATEMENT OF PROBLEM
This research is conducted to know the various ways to increase the loan product
through conducting comparative study with the product of the competitors and knowing
the bank report banks loan product. The study is also trying to find the standing of the
REOCO bank loan product in the market and suggest ways to make the product more
customers, oriented and effective. It is also going to help the organization to retain its
business and for further growth.
19
SOURCES OF DATA:
Datas:
The secondary includes the findings or the basic research already done by the
organizations. Beside, it also includes the appropriate material from newspapers, journals,
reports and books and internet.
Secondary Datas:
Audit report
Balance sheets
Company profile report
20
To study and analysis all the loans but Time available is short (90days) so all
loans could not be fully analyses.
21
CHAPTER II
COMPANY PROFILE
22
CHAPTER-2
COMPANY PROFILE
REPCO BANK Ltd. was commenced in the year 1969 by Govt. of India with the main
objective of rehabilitating repatriates from Burma and Srilanka. The Schemes are open to
all on admission as members of the bank so as to enable the bank serve its main objective
effectively. The bank is governed by the Ministry of Home Affairs, Govt. of India. Bank
after 1985to start a commercial banking service.
Bank only to provide financial service only for repatriates in previews. Multistate cooperative act 1985 bank was started commercial service. Banks provide the service in two
types of customers A (class) & B (class). A (class) customers is a share holder of the
bank, B (class) customer is other then repatriates share holders. Banks provide the service
mainly for repatriates. So bank give the some of the special benefits in rate of interest 1%
reduce all loan rates and 1% increases all deposit rates. Share capital of the bank
constitutes government investment.
The share capital was subscription by state government (Tamilnadu, Andrapradesh,
Karnataka, Kerala, Pondicherry, and individual repatriates members. Banking
administrated nominated by the government of India. The chief executive director looks
day to day banking operation.
Banks has now 44 branches cover the five states.
23
Equity capital:
The bank share capital has touched Rs 5.02 crors. Actual number of member as on
31-3-07 reach levels of 21183 A class member .the bank proposes to pay dividend of
23% for the year 2006-2007 amounts of 111.92 lakh. To the participating government and
A class repatriate members.
24
25
15
Decentralized credit planning through the Lead Bank Scheme was also introduced to
spearhead the credit allocation for agricultural lending.
In order to emphasize the developmental and promotional role assigned to the ARC in
addition to refinancing, the ARC was renamed as the Agricultural Refinance and
Development Corporation (ARDC) in 1975. Despite all these efforts, the flow of credit to
the agricultural sector failed to exhibit any appreciable improvement as the cooperatives
lacked resources to meet the expected demand. To solve these problems, the Regional
Rural Banks (RRBs) were set up in 1975. In order to strengthen the institutional credit for
agriculture and rural development, NABARD was set up on July 12, 1982. On its
establishment, NABARD took over the entire functions of the ARDC, the refinancing
functions of the Reserve Bank in relation to cooperatives and Regional Rural Banks
(RRBs).
The State Government and the Registrar of Cooperative Societies appointed by the State
are the main regulatory authorities for the cooperative societies that are operating only
within a State.
The regulation and supervision of the urban cooperative banks (UCBs) have been
brought within the ambit of the Reserve Banks statutory control under the Banking Laws
(as Applicable to Cooperative Societies) Act, which came into force from March 1, 1966.
The regulatory powers conferred on the Reserve Bank with regard to cooperative banks
are limited.
26
While the principles of supervision with regard to cooperative banks have been
formulated and implemented by the Reserve Bank in respect of UCBs under the Banking
Regulation Act, 1949, the Act does not apply to primary agricultural credit societies and
land development banks, thus leaving them under the regulatory purview of the State.
One important feature of providing agricultural credit in India has been the existence of a
widespread network of rural financial institutions.
The present structure of the rural financial institutions consists of a three-tier rural
cooperative credit institutions (Primary agricultural credit societies, District central
cooperative banks, and State cooperative banks), RRBs, Local area banks, urban
cooperative banks and branches of commercial banks. Some important issues related to
regulation and supervision of cooperative banks is discussed in this section.
The rural credit structure consists of many types of financial institutions as large scale
branch expansion was undertaken to create a strong institutional base in rural areas. The
number of various cooperative institutions at present is over 110,000. This has led to an
expansion in rural credit. However, the share of cooperative institutions credit to
agriculture has been declining with the share of commercial banks and RRBs increasing
during the 1980s and 1990s (Mohan, 2004a). This calls for a wider reach of the
cooperative credit institutions.
66 Instances such as the Madhavapura Mercantile Cooperative Banks failure brought to
the fore the need to have stringent regulatory control over the cooperative banking
system. In order to strengthen the supervisory mechanism, the Reserve Bank extended the
27
17
Off-site Surveillance System (OSS) to all non-scheduled UCBs having deposit size of
Rs.100 crore and above. A supervisory reporting system was introduced for the scheduled
UCBs since March 2001 as a first step towards setting up of OSS for all UCBs.
The capital adequacy norms have been introduced in a phased manner since March 2002.
Better risk management through avoidance of concentration of credit risk, off-site
surveillance for non-schedule UCBs and following up of KYC guidelines have also been
introduced to strengthen the UCBs.
A total ban has been imposed since October 2003 on grant of loans and advances to
directors of UCBs, their relatives and concerns in which they have interest with a view to
preventing certain irregularities. The Reserve Bank has also directed that UCBs should
undertake usual due diligence in respect of investments in non-SLR securities. The
Reserve Bank introduced a new system of grading of UCBs in April 2003, which is based
on their CRAR, level of net NPAs, record of losses and compliance with regulatory
environment. Similarly, a system of supervisory rating for UCBs under the CAMELS
model has also been introduced. Initially, it was implemented for scheduled UCBs but,
subsequently its simplified version was extended to non-scheduled UCBs in March 2004.
Notwithstanding the structural and cultural differences between UCBs and commercial
banks, the above measures suggest that the Reserve Bank has been exercising its
regulatory and supervisory powers to ensure that the cooperative credit structure is
strengthened on the lines similar to the regulation and supervision of commercial banks.
28
In sum, the Reserve Bank has been bestowing greater attention in recent years towards
strengthening of the regulation and supervision of the cooperative banking structure in
the country.
As a prudent step towards aligning the UCBs with the financial system, a Draft Vision
Document (2005) of the Reserve Bank seeks to rationalise the existing regulatory and
supervisory system; facilitate a focused system of supervision through enhancement of
technology; and to evolve mechanism to address the dual control. The future course of
action envisaged by the Reserve Bank is to remove operational irritants and to strengthen
the UCBs and align them with the commercial banks.
29
Banks provide 20 types of loans but analysis of study is fore leading loans following.
Jewel loan, Jewel loan special, development loan, secured loan.
This bank lends the maximum no of loans
1) JEWEL LOAN :
Loan maximum duration is within one year only. This type of loan is short period
only. Rate of interest 12.5% pa, minimum 15 days rate of interest to calculated.
Loan limit:
Maximum loan amount fix by head officers. Loan limit of the bank is Rs
700 per gram gold.
Appraisal of jewel:
Appraisal appointed by head office. Appraisal gets only commission based
on lone.
Appraisal process:
1. Touchstone testing
2. Nitric acid testing
30
3. Testing by filing
4. Water testing
5. Gold purity
Loan limit
Maximum loan amount fix by head officers. Loan limit of the bank is Rs
750 per gram gold.
31
Appraisal of jewel:
Appraisal appointed by head office. Appraisal gets only commission based
on lone.
Appraisal process:
1. Touchstone testing
2. Nitric acid testing
3. Testing by filing
4. Water testing
5. Gold purity
32
3) Development loan
The development loan maximum repayable duration is four year only. The
interest on loan amount must be declared only on the basis of period of repayment
made by the customer. Security value based to give the loan. Bank first cheek the
legal pros edger and formalities and following thinks.
Whom:
Development loan may be granted to borrowers for improving business purpose.
Loans provide all type of legal business in processing of this business and existing
business.
1) Trade
2) Business
3) Industry group
4) Starting new business in same other branches.
33
Documents:
1) Last fore year audit report
2) Ownership of business
3) Municipality or corporation license
4) Evidence of the material purchase
5) Cash & fund flow statement
6) Printer balance sheet in five years
7) Machine detail record
8) Sales & purchase account register
9) Rent receipt
To verify all related document inspection officer. After verify to give loan its a branch
manager response. Loan is based on security and turnover of the income states only to
provide.
Limit of loan:
Loan limit is fixing 80% of security value. Security values calculate register value
only. Limit of loan to fixing by head officer only.
Rate of interest:
Below 2 laks loan = 17.5 %
34
5) Secured loan:
This loan is a long term loan. The repayable period is 5 to 10 years.
Interest rate and duration period are determined on the basis of the loan amount. The
loan amount is varying from one customer to another customer on the basics of the
securities offered by the customer against the loan.
REPCO Bank to give Security loan provide only for bank members. Security
value based to grant the loan, in is following rules under the head of the banking norms.
2)
35
CHAPTER III
REVIEW OF
LITERATURE
36
CHAPTER-III
REVIEW OF LITERATURE
Websites, books, journals, and other relevant bank reports conduct this project. In
internet, Google search engine was mainly used to collect information from different
websites for this project. This help to get an idea about the research topic. The websites
of the banks such as REPCO bank, RBI bank, and TNCP bank helped to me to get a lot of
information about the banks and their different loan products.
37
By going through various websites, books, and other internal audit records, it gave me
more information about the banking industry, REPCO bank and the project topic. It also
helped to the earlier similar research, conclusion derived from the earlier researches etc.
the internet facilitated more to know about the various researches conducted by various
organizations. It even helped in preparing the tools.
38
CHAPTER IV
DATA ANALYSIS
And
INTERPRETATION
39
CHAPTER-IV
ANALYSIS AND INTERPRETATION
Percentage method:
When there are more series of data this percentage method is used to compare the
relation ship.
No of respondents
% of respondents =
-------------------------Total no of respondents
40
* 100
Introduction:
In this comparative analysis, for jewel loans, jewel loan special, development loan ,
secured loan of REPCO bank are compared with other banks rate of interest . The loan
product comparative analysis and percentage method to use in the calculation. The data
for comparison are obtained through secondary data collection. The features, benefits and
interest charges of each loan product of REPCO bank are comparing with other
competitive banks.
To find best loan in the bank, and calculate the comparative analysis and percentage
method.
41
The Cooperative Banks functioning in Tamil Nadu are fulfilling the credit requirements
of the farmers, weavers, rural artisans, consumers of urban area. These institutions are
known as Cooperative Credit Institutions. The Coop. institutions are functioning under
two categories. They are: long-term coop. credit institutions, short-term coop. credit
institutions. The coop. credit institutions functioning under short-term credit structure are
of three-tier in nature. At the grass root level, the Primary Agricultural Coop. Banks
(PACBs) is functioning at village level. At the district level, the Central Coop. Banks
(CCBs) is functioning with the headquarters at district capital and their branches in
various places of the districts concerned. At the apex level, the Tamil Nadu State Apex
Coop. Bank Ltd., (TNSC Bank) is functioning at Chennai which co-ordinates the entire
short- term coop. credit structure.
The Tamil Nadu State Apex Co-operative Bank Ltd., commenced its business during
November 1905 as an Urban Coop. Bank. It was subsequently changed into a District
Central Coop. Bank during July 1920. At present, the Bank is functioning at Chennai
with 44 branches, an Extension Counter and H.O. TNSC Bank is guiding the Dist.
Central Coop. Banks / Primary Agricultural Coop. Banks in their functioning and it is
playing a major role in the coop. movement of Tamil Nadu.
42
TNSC Bank was formed in the year in which the coop. movement of Tamil Nadu was
formed. As such, the Bank has been serving the people of Tamil Nadu for a centenary for
their economic development. As far as Indian coop. movement is concerned, the Bank
has commenced its business from the very next year of the formation of coop. movement
in India. TNSC Bank is the first ever State Coop. Bank having the credit of celebrating
the centenary year.
TNSC Bank has got the license of Reserve Bank of India to carry on the banking
business. TNSC Bank is a Scheduled Coop. Bank and has been listed under the Second
Schedule of RBI Act. TNSC Bank is a member of the Deposit Insurance and Credit
Guarantee Corporation (DICGC) and is an insured coop. bank as per DICGC Act. TNSC
Bank has got the privilege of having its share capital by the Government of Tamil Nadu.
TNSC Bank has been under close supervision and monitoring of the higher financing
agencies, viz., RBI, NABARD. Periodical inspection and supervision are done by
NABARD as per RBI guidelines. Government of Tamil Nadu is reviewing the
performance of the Bank periodically.
= 10% pa
43
Name of the
Minimum of
Rate of
Loan
loan
interest
period
REPCO Bank
Jewel Loan
Rs 700
12%
1Year
TNSC Bank
Jewel Loan
Rs 600
10%
1Year
Banks
REPCO Jewel Loan and TNSC Bank Jewel Loan are popular loans of both the
Banks. The REPCO Bank rate of interest is 12% per annum. But TNSC Bank rate of
interest is 10%. Both Banks maximum period of Jewel loan is 1Year. Compare with both
banks REPCO Bank is charging 2% high rate of interest.
REPCO Bank provide maximum lone of Rs 700 per gram, but TNSC Bank
provide only Rs 600 per gram of maximum limit. Compare with two banks REPCO Bank
gives Rs 100 more than TNSC Bank. Both Banks are giving the minimum loan amount
5000.
Compared with two banks REPCO Bank charges high rate of interest in 2% high.
TABLE 2
44
REPCO Bank Jewel Loan V/S PANDIAN GRAMA Bank Jewel Loan
Name of the
Minimum of
Rate of
Loan
loan
interest
period
Jewel Loan
Rs 700
12%
1Year
Jewel Loan
Rs 550
11%
10 Months
Banks
REPCO Bank
PANDIAN
GRAMA
Bank
REPCO Jewel Loan and PANDIAN GRAMA Bank Jewel Loan are the popular
loan both the Bank. The REPCO Bank rate of interest is 12% per annum and maximum
loan period is 1 Year. But PANDIAN GRAMA Bank rate of interest is 11% and
maximum loan period is 10 Months. When compared with both banks REPCO Bank
charging 1% high rate of interest.
REPCO Bank provide maximum lone of Rs 700 per gram, but PANDIAN
GRAMA Bank provide only Rs 550 per gram of maximum limit. When Compare with
two banks REPCO Bank gives Rs 150 more than PANDIAN GRAMA Bank. REPCO
Bank is giving the minimum loan amount Rs 5000, But PANDIAN GRAMA giving the
minimum loan amount Rs 4000.
Compare with two banks REPCO Bank charge high rate of interest,
That is 1% high.
TABLE 3
REPCO Bank Jewel Loan V/S URBAN Bank Jewel Loan
45
Name of the
Minimum of
Rate of
Loan
loan
interest
period
Jewel Loan
Rs 700
12%
1Year
Jewel Loan
Rs 650
11%
1Year
Banks
REPCO Bank
URBAN
Bank
REPCO Jewel Loan and URBAN Bank Jewel Loan are popular loan of both the
Bank. The REPCO Bank rate of interest is 12% per annum. But URBAN Bank rate of
interest is 11%. Both of Banks maximum period of Jewel loan is 1Year. Compare with
both banks REPCO Bank charging 1% high rate of interest.
REPCO Bank provide maximum lone of Rs 700 per gram, but URBAN Bank
provide only Rs 650 per gram of maximum limit. Compare with two banks REPCO Bank
gives Rs 50 more than URBAN Bank. Both Banks are giving the minimum loan amount
Rs 5000.
Compared with two banks REPCO Bank charge high rate of interest,
That is 1% high.
In this Comparative analysis we find than comparison with other banks REPCO Bank is
charging high rate of interest. At the same time REPCO Bank provides maximum lone of
Rs 700 per gram compared with other selected banks. All selected banks to maintain of
loan duration on 1 year and PANDIAN GRAMA Bank maintains is 10 months only.
46
TABLE 4
COMPARISON OF BUSINESS LOAN
47
Maximum of
Bank
Name of loan
Rat of interest
loan amount
Development
REPCO Bank
80% of security
18%
loan
value
70% of security
TNSC Bank
Business loan
16%
value
Here I have taken the basic BUSINES LOAN of selected banks for the comparison.
Development loan of the REPCO Bank and business loan of the TNSC Bank. Both banks
provide loan only for business purpose. REPCO Bank charge 18% rate of interest, but
TNSC Bank charge 16% rate of interest. Both the banks provide loan based on security
value. REPCO Bank to give the maximum loan is 80% of security value TNSC Bank to
give the maximum loan is 70% of security value.
REPCO Bank provides loan only to existing business only but TNSC Bank to give to
new and existing business.
TABLE 5
REPCO Banks development loan V/S PANDIAN GRAMA Bank business unit loan
Bank
48
Name of loan
Rat of interest
Maximum of
loan amount
Development
REPCO Bank
80% of security
18%
loan
value
PANDIAN
Business unit
70% of security
GRAMA Bank
loan
18%
value
Development loan and business unit loan are the very familiar loan in both banks. Both
banks provide loan only for business purpose. REPCO Bank charge 18% rate of interest,
PANDIAN GRAMA also charge same rate of interest. Both the banks provide loan based
on security value. REPCO Bank to give the maximum loan of 80% of security value
PANDIAN GRAMA Bank to give the maximum loan is 70% of security value. Two
banks provide loan only to existing business only.
Of the two banks REPCO Bank to highly charge 1% rate of interest when compared to
PANDIAN GRAMA Bank.
TABLE 6
REPCO Banks development loan V/S URBAN Bank business loan
Maximum of
Bank
Name of loan
Rat of interest
loan amount
49
Development
REPCO Bank
80% of security
18%
loan
value
60% of security
URBAN Bank
Agri loan
8%
value
REPCO Bank provides business loan is development loan for business development
purpose. But URBAN Bank provide business loan only for agriculture purpose. REPCO
Bank is to charge 18% rate of interest, URBAN Bank 8% rate of interest to be charge.
Both the banks provide loan based on security value. REPCO Bank to give the maximum
loan is 80% of security value URBAN Bank to give the maximum loan is 70% of security
value.
Of the two banks REPCO Bank charge 10% rate of interest compare with URBAN Bank.
URBAN Bank mainly concentrates on farmers so to give low rate of interest. REPCO
Bank provides loan for commercial purpose so as to get high rate of interest.
In this Comparative analysis to find comparison with other banks REPCO Bank to charge
high rate of interest. At the same time REPCO Bank provide maximum lone of 80% of
security value compared with other selected banks. All selected banks to provide loan for
business purpose, developing business, and start new business. REPCO Bank collected
50
loan from customer on EMI. Bank provide loan on GOVT value to be calculated. REPCO
Bank couldnt give for new business; other banks give to the new business.
TABLE 7
COMPARTIVE OF SECURED LOAN
REPCO Bank secured loan V/S TNSC bank
51
Maximum of
Bank
Name of loan
Rat of interest
loan amount
REPCO Bank
Secured loan
18%
80%
TNSC Bank
Property loan
16%
80%
Here I have taken the basis of SECURED LOAN from selected banks for the
comparison. SECURED loan of the REPCO Bank, and PROPERTY loan of the TNSC
Bank. Both banks provide loan only for buying new property. REPCO Bank charges 18%
rate of interest, but TNSC Bank charges 16% of rate of interest. Both the banks provide
loan based on security value. REPCO Bank is to give the maximum loan of 80% of
security value TNSC Bank also gives the maximum loan of 80% of security value.
When compared to analysis of the two banks REPCO Bank charges high rate of interest.
TABLE 8
REPCO Bank secured loan V/S PANDIYAN GRAMA Bank
52
Maximum of
Bank
Name of loan
Rat of interest
loan amount
REPCO Bank
Secured loan
18%
80%
TNSC Bank
Property loan
16%
70%
Security loan and property loan are provided only for buying new property or buying new
land. REPCO Bank charges 18% rate of interest, PANDIAN GRAMA charges 16% rate
of interest. Both the banks provide loan based on security value. REPCO Bank is to give
the maximum loan of 80% of security value PANDIAN GRAMA Bank is give the
maximum loan of 70% of security value. Two banks lending loan only buy new property.
Of the two banks REPCO Bank to charge 2% rate of interest compared to PANDIAN
GRAMA Bank.
TABLE 9
REPCO Bank secured loan V/S URBAN Bank
53
Maximum of
Bank
Name of loan
Rat of interest
loan amount
REPCO Bank
Secured loan
18%
80%
12%
60%
Secure property
URBAN Bank
loan
Security loan and property loan are provides only for buying new property or buying new
land. REPCO Bank charges 18% rate of interest, URBAN Bank charges 12% rate of
interest only. Both the banks provide loan based on security value. REPCO Bank is to
give the maximum loan of 80% of security value URBAN Bank to give the maximum
loan 60% of security value. Two banks lending loan only to buy new property of the two
banks REPCO Bank is to charge 6% rate of interest compared to URBAN Bank.
In this Comparative analysis to find comparison with other banks REPCO Bank is to
charge high rate of interest. At the same time REPCO Bank provides maximum lone is
80% of security value compared with other selected banks. All selected banks to provide
loan for buying new land or property. REPCO Bank was collected loan from customers to
EMI. Bank provides loan on GOVT value to be calculated.
54
REPCO Bank loans compared with other selected banks loan interest is high in all
type of selected loans. Jewel loan, development loan, secured loan are the maximum loan
limit is high compared with other selected banks.
TABLE 10
Previous four years revenue comparative statement
YEAR
55
REVENUE
IN Lakhs
INCREASE
IN Lakhs
% OF INCREASE
2003-2004
5870
2004-2005
6822
2004-2005
6822
2005-2006
8343
2005-2006
8343
2006-2007
10684
952
16%
1521
22%
2341
28%
The bank revenue increased in last four year. Compare to the last fore year statement.
Revenue is increased in 952 lakh, 1521lakh, 2341 lakh respectively.
CHART 1
56
CHART 2
TABLE-11
YEAR
PARTCULAR
2004-2005
2005-2006
2006-2007
2007-2008
Jewel loan
24388
36638.65
37542.5
5818.3
Jewel loan
special
9970.3
12514.8
42694.1
18776.1
Development
loan
17605
17268
18348.223
2025
Secured loan
47697.4
54030.5
43828.8
12134.8
Inference:
From the above table shows last fore years loans in thousands. 2004 to 2008
selected loans of jewel loan, jewel loan special, development loan, and secured loan
reports in thousands. Loan particulars are given in the 1st quarter of 2007-2008.
CHART 3
59
CHART 4
60
CHART 5
61
CHART 6
62
TABLE-12
63
Particular
Year
2005-2006
Degreases
3%
13%
8%
1.5%
Year
2006-2007
Jewel loan
47
51
70
51
Development loan
12
24
Secured loan
16
18
145
144
Total
Increases
In a particular year some of customers didnt finish loan in the particular period. The
minimum customer could not pay development loan and secured loan with in scheduled
time. Jewel loan has been decrease to 13% in 2005 and 2006. But other loans have been
increased
64
CHART 7
65
TABLE-13
Bad debt of 2005-2006 & 2006-2007 bank loan
Particular
Year
2005-2006
Year
2006-2007
Jewel loan
24
19
37
30
Development loan
Secured loan
Inference:
The above table shows that bad debt position of loans in last two year. The bad debt of
jewel has been decreased from 37 to 30.
66
CHART 8
Bad debt of 2005-2006 & 2006-2007 bank loan
TABLE-14
67
TYPES OF
LOAN
2004-05
2005-06
2006-07
2007-08
JEWEL LOAN
24388
36638.6
37542.5
5818.3
JEWEL LOAN
SPECIAL
9970.3
12514.8
42697.1
18776.1
DEVELOPMENT
LOAN
17605
17268
18348.2
2025
SECURED
LOAN
47697.3
54030.5
43825.8
12534.8
HOUSEING
LONE
2565.4
1473.3
735.6
SALARY
LOAN
635.1
2482.5
1626
83.9
VEHICEL
LOAN
47.8
83.6
132
34
EDUCATION
LOAN
76.5
93.3
OD LOAN
876
1163
1465
210
CONSUMER
LOAN
17.6
12.3
48
LEASE LOAN
MEDICAL
LOAN
MICRO
FINANCE
433.6
2607
3860
834
LOAN ON
DEPOSIT
4363
5672.6
5997
148
Inference:
68
REPCO Bank varies type of loan lending to customer. They give maximum of loan for
secured loan and development loan respectively. 2007-2008 is an only 1 st quarter loan
amounts (April-June).
TABLE - 15
69
TYPES OF
LOANS
2004-05
2005-06
2006-07
2007-08
JEWEL LOAN
22%
27%
23%
14%
JEWEL LOAN
SPECIAL
9%
9%
27%
46%
DEVELOPMENT
LOAN
16%
13%
11%
5%
SECURED LOAN
44%
40%
27%
30%
HOUSEING LOAN
2.5%
1%
0.5%
SALARY LOAN
0.6%
0.2%
1%
0.2%
VEHICLE LOAN
0.2%
0.5%
0.1%
EDUCATION
LOAN
0.2%
0.2%
OD LOAN
1%
0.2%
1%
0.5%
CONSUMER LOAN
0.2%
0.1%
LEASE LOAN
MEDICAL LOAN
MICRO FINANCE
0.3%
2%
2.5%
2%
LOAN ON DEPOSIT
4%
4%
4%
0.4%
Inference:
70
REPCO Bank providing varies type of loans to the customers. They give maximum
preference to secured loan and development loan respectively. Compare with other loans
more loan amount provided to jewel loan special 46% of total amount within first quarter
(2007-2008).
CHART 9
71
CHART 10
72
CHART 11
73
CHART 12
74
TABLE-16
75
% bank loans
Years
Jewel loan
2004-2005
2005-2006
2006-2007
2007-2008
Total
20%
30%
31%
19%
100%
Jewel loan
special
7%
9.5%
30%
30.5%
100%
Development
loan
29%
28%
30%
13%
100%
Secured loan
24.5%
28%
22.5%
25%
100%
Year
Jewel loan
Jewel loan
special
Development
loan
Secured
loan
2005-2006
10%
2.5%
-1%
4.5%
2006-2007
11%
20.5%
12%
-5.5%
2007-2008
-12%
23.5%
-17%
2.5%
76
CHAPTER V
FINDING &
SUGGESTIONS
77
CHAPTER-V
FINDINGS & SUGGESTIONS
FINDINGS
The major finding in this project, it is found then comparative analysis of the bank
loans in REPCO Bank is charging high rate of interest.
They are not providing loans to start the new business and entrepreneurs.
They are providing property loans based on the government value of the property.
So the customer will get small amount of loan.
It is found in the comparative analysis of the bank jewel loan special growth is
25% increasing compared with last 3 years. At the same time jewel loan is slowly
down at 12% compared with last 2 years.
It is found than the trend analysis of the bank maximum amount of loan provided
to the SECURED LOAN.
78
SUGGESTIONS
Competitive banks are receiving low rate of interest. So, they must decrease rate
of interest.
All other banks have to give new business and entrepreneurs loans. So, they must
give these types of loan.
Compare with previous years, 6 months jewel loan special is increased compared
with 12 month jewel loan. So they will concentrate 3 months jewel loan.
Finally, bank must increase the different types of schemes in secured loans.
79
CHAPTER VI
CONCLUSION
80
CONCLUSION
REPCO Bank having lot of loan schemes, but they concentrate on some particular loans
like secured, jewel Loan, Not concentrate on some other loans like lease, vehicle,
consumer loan and etc. They should create attractive schemes for loan based on customer
needs and, if they reduce the rate of interest compare with other competitive bank rates,
they can achieve numerous end users.
81
CHAPTER VII
BIBLIOGRAPHY
82
BIBLIOGRAPHY
1) C.R. Kothari, research methodology New Delhi, wisva prakasan, 1990, second
edition
2) S. N. Maheswari. Financial management New Delhi 2000 third edition
WEB-SITE
www.repcobank.com
www.tnsebank.com
www.pandianbank.com
www.finance.indiamart.com
www.google.com
83
68