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STATUTORY REQUIREMENTS
LOANS & ADVANCES.
1.SHORT TERM AGRICULTURAL ADVANCES.
. SHORT TERM AGRICULTURAL RECOVERY
(DCCBs).
2.REVOLVING CASH CREDITS.
3.NON FARM SECTOR LOANS
NON-FARMINGSECTOR
OF BANKING
During the early phase Punjab State Cooperative Bank deals in
agriculture loan only but to diversify its loaning portfolio the
Punjab State Cooperative Bank entered in the field of Non
Agriculture advances During the year 1992- 93.
Initially four Central Cooperative Banks namely Jalandhar,
Nawanshahr, Kapurthala and Ludhiana were permitted by the
Registrar Cooperative Societies. Punjab to undertake financing
of Non Agricultural activities up to Rs. 50,000/- in a single case
(composite loan). Later on all the Central Cooperative Banks
were allowed to composite loan(block capital and working
capital up to Rs. 62500/-
Under the loaning portfolios, various Non Agricultural
Schemes were introduced by the Punjab State
Cooperative Bank and these are as following:-
revolving cash credit to farmers
two wheeler loans to farmers
rural godown scheme
personal loan scheme
cash credit to businessmen and traders
shekari bank bima yogna
second hand car loan
kisan credit card scheme.
small road transport operation shekari education loan
facility consumer durable loan:
to salary earners
to non salary earners
non farm sector loan
loan against national saving certificate
TOPIC UNDERTAKEN FOR
THIS STUDY
During the training period, I concentrated only on five
kinds of loans, which are pervaded by the Punjab state
cooperative bank, Chandigarh. The reason being that
the branch has provisions for only these five finds of
loans, thus is providing these non agricultural loans
only. A detailed study of the procedure for applying to
these loans, documents, required and other formalities
relate to these loans were studied. These loans are
stated as under:
House Building Loan
Personal Loan
Consumer Loan
Two Wheeler loan
Education Loan
What kind of loan have you taken from
organization?
Kind of Loan No. of Respondent Percentage(%)
INTERPRETATION: House loan 16 32%
Personal loan 15 30%
than 20,000,
20 % respondents
prefer 20,000 to
50,000,12 % prefer more
than 1 lac and 60% of
the respondents prefer
more than 1 lac.
What is the term of
loan ?
INTERPRETATION:- Term of Loan
Less than 1 year
No. of respondent
6
Percentage(%)
12%
paying rate of
9% to 12% 24 48%
More than 12 % 24 48%
interest 9 to 12 % and
more than 12 % and 4 %
of the Respondents pay
less than 9 % of rate of
interest.
How many time have you taken
loan before?
No. of respondent Percentage (%)
No. of times loan taken
% of the respondents
took loan once , 32 %
of the respondents
took loan for 1 to 3
times and 10 % took
loan for more than 3
times.
to take loan from the
institute?
Reason for taking loan No. of Respondent Percentage (%)
Reasonable rate of interest 6 12%
INTERPRETATION:
More schemes 5 10%
Table reveals that 38 Less formalities 17 34%
operative banks, 30 %
from the private banks
and 14 % from the public
banks
INTERPRETATION:
Do you
The think the
bank is bank is able
able toto reach upto your satisfaction level?
reach upto the
satisfaction level of
74% of its employess
while the remaining
26% are not satisfied
by the services
provided by the bank.
Hence, the bank should Yes
No.of respondent
37
Percentage (%)
74%
the customer
satisfaction level.
Would you like to refer the
bank to your friends and
relatives?
Bank refer to others No. of respondent Percentage (%)
Always 39 78%
Sometimes 9 18%
Never 2 4%
PROBLEMS FACED BY COOPERATIVE BANKS
1. The cooperative financial institution is facing severe problems which
have restricted their ability to ensure smooth flow of credit and
also in meeting the requirement of the farming
Limited ability to mobilize resources.
Low Level of recovery.
High transaction of cost.
Administered rate of interest structure for a long time.
2. Due to cooperative legislation and administration mandates Govt
interference has become a regular feature in the gay –to-day
administration of the cooperative institution. Some of the problem area
that arise out of the applicability of the cooperatives legislative are:
• Deliberate control of cooperatives by the government.
• Nomination of board of director by the government.
• Participation of the nominated director by the government.
• Deputation of government officials to cooperative institution etc.
3. The state cooperative banks are not able to formulate their respective
policies for investment of their funds that include their surplus
resources because of certain restrictions.
4. Prior approval of RBI is mandatory for opening of new branches of
SCBs. The SCBs are required to submit the proposal for opening of new
branches to RBI through NABARD, whose recommendation is primarily
taken into consideration while according permission.
5. There is the condition of government guarantee by NABARD while
sanctioning credit limits to SCBs and DCCBs but no stage the
commercial bank and regional rural banks are called upon to execute
any Govt Guarantee while sanctioning reference by NABARD.
6. On the number of occasions institute like food cooperation of India.
Indian Oil Corporation, Hindustan Petroleum etc. Have issued instruction
in writing that demand draft/ pay order should be obtained from the
nationalization/ schedule bank.
7. SCBs does not provide loan directly to farmers due to which they
cannot keep pace the changing requirements of the farmers.
FINDINGS &
UGGESTOIONS
FINDING SUGGESTIONS:
Majority of the respondent The bank should adopt the
were having housing loan modern methods of banking
from this bank. like internet banking, credit
Most of the people prefer to cards, ATM, etc
take long term loan which is The bank should plan to
more than 3 years. introduce new schemes for
attracting new customers and
Easy repayment and less
satisfying the present ones.
formalities are the main
factors determining The bank should improve the
customer’s selection of customer services of the bank
to a better extent
loans.