Credit Policy of J&K Bank

CREDIT SURVEY OF DISTT.
BARAMULLA
(A COMPARATIVE STUDY)
Summer Training
Project Report
On
CREDIT SURVEY OF DISTRICT BARAMULLA
In Partial Fulfillment of the Requirements

For the Degree of
Master of Business Administration
June – August 2009
Of
Punjab Technical University
Submitted To - Submitted By-

Mr. Divakar Joshi BILAL AHMAD PARRAY
H.O.D In Management MBA 3rd
1
CREDIT SURVEY OF DISTT. BARAMULLA
St. Soldier Management and Technical

Institute Jalandhar Punjab.
ACKNOWLEDGEMENT
I would like to acknowledge the invaluable

assistance extended by Mr.Reyaz Ahmad Mir;
Cluster II head Distt.Baramulla Who gave me his
kind permission to successfully complete the
project in his organization. I would like to pay
my heart full gratitude to Mr. Mohd Aslam and
Mr. Javid Ahmad Of Human Resource
Department of J&K Bank who provided me their
timely guidance to me at every step and also
provided to me all relevant and essential data
regarding my project report .I also feel a sense
of indebtedness to my reverent teacher
Mr.Kishore Luthra Lecturer Research Dept. who
encouraged, motivated and guided to complete
my project report.
2
Finally I would also like to thank my parents and

friends who inspired me and encouraged me to
complete my project at J&K Bank in time.
Bilal Ahmad Parray.
Cer tificate -1
This is to certify that the Project report “Credit

survey of Distt. Baramulla” in Jammu and Kashmir
bank” has been submitted by Bilal Ahmad to the
department of management ,St. soldier
Management & Technical Institute ,Jalandhar for
the fulfillment of the requirement of the degree of
M.B.A 3rd sem. and has been carried by his under
my supervision.
3
Training & Placement Officer

SSMTI. Jalandhar.
4
TABLE OF CONTENT
CHAPTERS PAGE
EXECUTIVE SUMMARY 5
A BRIEF HISTORY OF BANKING 6
INTRODUCTION ABOUT BANK 8
HISTORY OF BANKING IN INDIA 9
COMPANY PROFILE 13
RESERVE BANK OF INDIA 15
TYPES OF BANKS 18
BACKGROUND OF J & K BANK 19
VISION OF THE BANK 21
SERVICES PROVIDED BY J & K BANK 24
BANKS NEW IDENTITY 30
SWOT ANALYSIS 31
RESEARCH METHODOLOGY 34
OBJECTIVES OF THE RESEARCH 36
ANALYSIS & INTERPRETATION 37
CREDIT SHARES OF DIFFERENT BANKS 53
€FINDINGS 55
SUGGESTIONS 57
LIMITATIONS OF THE STUDY 59
QUESTIONNAIRE 60
BIBLIOGRAPHY 62
Executive Summary
Indian banking system, which is among the largest banking networks in the world, did not
reach most of the rural poor in India. About 70% of the Indian population from rural areas
accounted for only 30% of bank deposits. The banks did not meet the credit requirements
of the poor and they were forced to fall back on moneylenders for credit. Though the banks
were nationalized, they perceived rural credit to be a high risk and high cost proposition.
The rural borrowers were bogged down by elaborate procedures that were required to
obtain loans.
5
The central bank in India, RBI, on its part, tried to cater to the needs of the rural poor by
establishing regional rural banks and cooperative banks, but did not meet with success. In
the early 1990s, to provide credit and savings services to the poor, microfinance was
envisaged. It received further boost with involvement of several non-governmental
organizations and microfinance institutions.
These efforts led to formation of Self Help Groups (SHGs), where poor from homogenous
background formed into groups of around 20 each and pooled money that was lent to the
needy in the group. By the mid 1990s, several mainstream banks began providing credit
and savings facilities to SHGs that built credible financial discipline. The program was
called SHG – Bank linkage program. Over the time, the banks provided other facilities like
housing loans and micro insurance services to the poor.
There were for profit MFIs, mutual benefit MFIs and not for profit MFIs that participated
actively in spreading microfinance initiatives across India. By 2004, there were around
1,000 MFIs in the country. Realizing underlying potential of microfinance, several
commercial banks entered into partnership with MFIs. Both banks and MFIs stood to
benefit from this association as banks could reach the interior part of the country and MFIs
could access more funds and thus reach more people.
With the huge potential and low NPAs, several private and foreign banks, unveiled their
plans to enter the Indian microfinance sector. The government and the RBI announced
several measures to boost microfinance activities in the country. RBI allowed the NGOs
involved in microfinance activities to raise External Commercial Borrowings upto US$ 5
million a year. With increase in competition and availability of funds, the Indian
microfinance sector could be the ultimate beneficiary.
Still there are several poor, who were not under the purview of microfinance, the number of
SHGs and microfinance programs did not have any major impact on poverty alleviation in
the country. Only in some of the well-developed states in the country, SHGs and
microfinance gained popularity. Lot of groundwork was required to spread microfinance
activities in North and North East regions of the country.
6
A Brief History of Banking

In the recent era, the story of "the Banks" commences with the development of the modern
banking system in Middle Ages Europe. At that time, disposable wealth was usually held in
the form of gold or silver bullion. For safety, such assets were kept in the custody of the
local goldsmith, he usually being the only individual who had a vault on his premises. The
goldsmith would issue a receipt for the deposit and, to undertake financial transactions, the
buyer would withdraw his gold and give it to the seller, who would then deposit it again,
frequently with the same goldsmith. As this was a time-consuming process, it became
common practice for people to simply exchange smiths' receipts when conducting financial
transactions.
As time passed, the goldsmiths began to issue receipts for specific values of gold, making
buying and selling easier still. The smiths' receipts thus became the first banknotes. The
goldsmiths, now fledgling bankers, noticed that at any one time only a small proportion of
the gold held with them was being withdrawn. So they hit upon the idea of issuing more of
the receipt notes themselves, notes that did not refer to any actual deposited wealth. By
giving these receipts to people seeking capital, in the form of loans, the goldsmiths could
use the money deposited with them by others to make money for themselves. It was found
that, for every unit of gold held by the goldsmith, ten times the sum could be safely issued
as notes without anyone usually becoming any the wiser. If a goldsmith held, say, 100
pounds of other people's gold in his vaults, he could issue banknotes to the value of 1000
pounds. As long as no more than 10 percent of the holders of those notes wanted their gold
at any one time, no one would realize the fraud being perpetrated. This practice, known as
"fractional reserve lending," continues to this day and is actually the backbone of the
modern banking industry. Banks typically loan ten times their actual financial holdings,
meaning 90% of the money they lend does not now, never has, and never will exist.
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Loans issued by the goldsmiths had to be paid back to them with interest, meaning non-
existent money slowly became converted to tangible assets in the form of goods and labor.
Should the loan be defaulted upon, the banker had the right to seize the defaulter's property.
As time passed, therefore, the goldsmiths became wealthier and wealthier. They had
devised a scheme to create money out of thin air and then convert this money into real
goods, labor, or property. A loan of money at 12% interest recouped not merely 12% for
the banker, but 112%, as it does to this day.
As the industrial era began, so the potential for furthering this scheme increased
exponentially. The goldsmiths were now fully-fledged bankers, and their ability to create
money out of thin air and then convert it into tangible assets enabled them to begin to
control whole industries to the point where the worlds of banking and industry became, to
all intents and purposes, seamless entities.
As the twentieth century dawned, the banking families hit upon a new means to
consolidate and increase their gains. They discovered that by periodically restricting the
money supply crashes within the emergent stock exchanges of the world could easily be
engineered. The most notable example of this was the famous Wall Street Crash of 1929.
What the history books usually fail to record is that, in a crash, wealth is not actually
destroyed, but merely transferred. The "Crash of '29" allowed the most powerful of the
banking and industrial families to absorb the weaker elements, generating even greater
levels of centralized control.
As the technological revolution progressed, so the buying up of TV stations and

newspapers allowed the creation and control of the mass media. This served to ensure that
only a portrayal of events that suited the interests of the elite banking families would get to
public attention - invariably one that all but denied their very existence.
8
INTRODUCTION ABOUT BANK
In modern age, Banking constitutes the fundamental basis of economic growth. The term
bank is being used since long time but there is no clear conception regarding its beginning.
According to one viewpoint, in good old days, Italian moneylenders were known as Bane
chi or Banacheri, because these people kept special type of table to transact their business,
called Ban chi. Origin of the word bank belongs to the word Banchi or to the Greek word
Banque. Both these words refer to some kind of banking. According to another viewpoint,
bank originated from the German word (ital) Banque meaning Joint Fund.
Casa De SanGiorgio was the first bank to be established in 1148.

The First Public bank of Veanice. It was established in 1157.
As per Banking Regulation Act. 1949, “Banking” means:
“Accepting for the purpose of lending or investment of deposit of money from the public,
repayable on demand or otherwise and withdraw able by cheque, draft, order or
otherwise”
In simple words, bank refers to an institution that deals in money. This institution
accepts deposits from the people and gives loans to those who are in need. Besides dealing
in money, banks these days perform various other functions such as credit creation, agency
job and general service.
Bank, therefore, is such an institution, which accepts deposits from the people,
gives loans, creates credit and undertakes agency work.
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HISTORY OF BANKING IN INDIA

Without a sound and effective banking system in India, it cannot have a healthy economy.
The banking system of India should not only be hassle free but it should be able to meet
new challenges posed by the technology and any other external and internal factors.
For the past three decades, India's banking system has had several outstanding
achievements to its credit. The most striking is its extensive reach. It is no longer confined
to only metropolitan or cosmopolitan areas in India. In fact, Indian banking system has
reached even to the remote corners of the country. This is one of the main reasons of India's
growth process.
The government's regular policy for Indian bank since 1969 has paid rich dividends
with the nationalization of 14 major private banks of India. Not long ago, an account holder
had to wait for hours at the bank counters for getting a draft or for withdrawing his own
money. Today, he has a choice. Gone are days when the most efficient bank transferred
money from one branch to other in two days. Now it is as simple as instant messaging or
dialing for a pizza. Money has become the order of the day.
The first bank in India, though conservative, was established in 1786. From 1786 till
today, the journey of Indian Banking System can be segregated into three distinct phases.
They are as mentioned below:
Phase 1:-Early phase from 1786 to 1969 of Indian Banks
Phase 2:-Nationalization of Indian Banks and up to 1991 prior to Indian banking

sector Reforms.
Phase 3:-New phase of Indian Banking System with the advent of Indian Financial
& Banking Sector Reforms after 1991.
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Phase I
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of
Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency
Banks. These three banks were amalgamated in 1920 and Imperial Bank of India was
established which started as private shareholders banks, mostly Europeans shareholders.
In 1865, Allahabad Bank was established and first time exclusively by Indian, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and
1913, Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank,
and Bank of Mysore were set up. Reserve Bank of India came in 1935.
During the first phase, the growth was very slow and banks also experienced periodic
failures between 1913 and 1948. There were approximately 1100 banks, mostly small. To
streamline the functioning and activities of commercial banks, the Government of India
came up with The Banking Companies Act, 1949 which was later changed to Banking
Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of
India was vested with extensive powers for the supervision of banking in India as the
Central Banking Authority.
During those days public had lesser confidence in the banks. As a result deposit
mobilization was slow. However, the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.
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Phase II
Government took major steps in Indian Banking Sector Reform after independence. In the
1960’s a major portion of nationalization was carried out with nationalization of seven
banks forming subsidiaries of State Bank of India on 19th July 1960. It was the effort of the
then Prime Minister of India, Mrs. Indira Gandhi. Fourteen major commercial banks in the
country were nationalized.
Second phase of nationalization under Indian Banking Sector Reform was carried out in
1980’s with seven more banks. This step brought 80% of the banking segment in India
under Government ownership.
The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country:
• 1949: Enactment of Banking Regulation Act.

• 1955: Nationalization of State Bank of India.
• 1960: Nationalization of SBI subsidiaries.
• 1961: Insurance cover extended to deposits.
• 1969: Nationalization of 14 major banks.
• 1971: Creation of Credit Guarantee Corporation.
• 1975: Creation of regional rural banks.
• 1980: Nationalization of seven banks with deposits over 200 crore.
After the nationalization of banks, the branches of the public sector banks in India
experienced a rise of approximately 800% in deposits and advances took a huge jump by
11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.
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Phase III
This phase is characterized by introduction of many more products and facilities in the
banking sector due to various reform measures. In 1991, under the chairmanship of M
Narasimham, a committee of the same name was set up. Which worked for the
liberalization of banking practices?
The country was flooded with foreign banks and their ATM’s proliferation. Efforts were
started to give a satisfactory service to customers. Phone banking and net banking were
introduced. The entire system became more convenient and swift.
The financial system of India has shown a great deal of resilience. It is sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian Countries
suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high,
the capital account is not yet fully convertible, and banks and their customers have limited
foreign exchange exposure.
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Company Profile
The Jammu and Kashmir Bank Limited
Founded 1938
Headquarters India
No. of locations 500 branches/offices
Industry Financial, Commercial Banks
Revenue 20,595,000,000 (2008)
Employees 6833
Website http://www.jkbank.net/
Jammu & Kashmir Bank was founded on October 1,1938 and it commenced business from
July 4, 1939. The Jammu & Kashmir Bank Limited has been the first of its nature and
composition as a State owned bank in the country. The Bank was established as a semi
State Bank with participation in capital by State and the public under the control of State
Government. The Bank opened its first branch at Residency Road, Srinagar
The Jammu & Kashmir Bank is today one of the fastest growing banks in India with a
network of more than 500 branches/offices spread across the country offering world class
banking products/services to its customers. Today, the Bank has a status of value driven
organization and is always working towards building trust with shareholders, customers,
borrowers, regulators, employees and other diverse stakeholders, for which it has adopted a
strategy directed to developing a sound foundation of relationship and trust aimed at
achieving excellence, which of course, comes from the womb of good corporate
governance. Good governance is a source of competitive advantage and a critical input for
achieving excellence in all pursuits. J&K Bank considers good corporate governance as the
sine qua non of a good banking system and has adopted a policy based on all the four
pillars of good governance– transparency, disclosures, accountability and value.
The bank expanded its areas of operation and widened its credit base by financing
schemes like integrated Rural Development Programmes (IRDP), SEED, PMRY, NRY and
other self employment programmes sponsored by State and Central Governments. In 1976,
the Jammu & Kashmir Bank became the first and only bank, which was permitted by the
Reserve Bank of India to sponsor two regional banks, namely, Kamraz Rural Bank and
Jammu Rural Bank.
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COMPOSITION OF THE BANKING SYSTEM IN INDIA AS AT THE

BEGINNING OF NEW MILLENIUM
At present, the number of nationalized banks is 20. Several Foreign banks were allowed to
operate as per the guidelines of RBI. At present the banking system can be classified in
following categories:
PUBLIC SECTOR BANKS
o Reserve Bank of India

o State Bank of India and its 7 associate Banks
o Nationalized Banks (20 in number)
o Regional Rural Banks sponsored by Public sector Banks
PRIVATE SECTOR BANKS
o Old Generation Private Banks

o New Generation Private Banks
o Foreign Banks in India
o Local Area Banks
o Non Scheduled Banks
CO-OPERATIVE SECTOR BANKS
o State Co-operative Banks

o Central Co-operative Banks
o Primary Agriculture Credit Societies
o Land Development Banks
o Urban Co-operative Banks
o State Land Development Banks
o Scheduled Co-operative Banks
DEVELOPMENT BANKS
o Industrial Finance Corporation of India (IFCI)

o Industrial Development Bank of India (IDBI)
o Industrial Credit & Investment Corporation of India (ICICI)
o Industrial Investment Bank of India (IIBI)
o Small Industries Development Bank of India (SIDBI)
o National Bank for Agriculture & Rural Development (NABARD)
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o Export-Import Bank of India
RESERVE BANK OF INDIA
The Reserve Bank of India (RBI) is the central bank of India, and was established on April
1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The
Central Office is located at Mumbai since inception. Though originally privately owned,
since nationalization in 1949, RBI is fully owned by the Government of India.
RBI is governed by a central board (board headed by a governor) appointed by the Central
Government of India. The current governor of RBI is Dr.Y.Venugopal Reddy, who
succeeded Dr. Bimal Jalan on September 6, 2003. RBI has 22 regional offices across India.
Main Functions
Monetary Authority:
o Formulates implements and monitors the monetary policy.

o Objective: maintaining price stability and ensuring adequate flow of credit
to productive sectors.
Regulator and supervisor of the financial system:
o Prescribes broad parameters of banking operations within which the

country's banking and financial system functions.
o Objective: maintain public confidence in the system, protect depositors'
interest and provide cost-effective banking services to the public.
• Manager of Exchange Control:

o Manages the foreign exchange under Foreign Exchange Management Act,
1999.
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o Objective: to facilitate external trade and payment and promote orderly

development and maintenance of foreign exchange market in India.
• Issuer of currency:
o Issues and exchanges or destroys currency and coins not fit for circulation.
o Objective: to give the public adequate quantity of supplies of currency notes
and coins and in good quality.
• Developmental role
o Performs a wide range of promotional functions to support national
objectives.
• Related Functions
o Banker to the Government: performs merchant banking function for the
central and the state governments; also acts as their banker.
o Banker to banks: maintains banking accounts of all scheduled banks.
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CHART SHOWING INDIAN BANKING SYSTEM

Central Bank & Monetary Authority“RBI”Apex Banking Institutions
APEX BANKING INSTITUTION
IDBI NABARD EXIM HB National Housing

BANK Bank
Banking Institutions
BANKING
INSTITUTIONS
Commercial Regional Rural Co-operation

Banks Banks Bank
State Co-
Public Private operative Bank
sector Sector
banks Banks
Central Distt. Co-
operative Bank
State Nationalized
Banks Banks
Indian Foreign Primary Credit
Banks Banks Societies
Subsidiary
Companies
State Bank Subsidiary Old New Local

of India banks Banks Banks Banks
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TYPES OF BANKS
ACCORDING ACCORDING ACCORDING

TO TO TO
OWNERSHIP LAW FUNCTION
PUBLIC PRIVATE
SECTOR SECTOR
BANKS BANKS
CO- SCHEDULED NON-

OPERATIVE BANKS SCHEDULED
BANKS BANKS
COMMERCIAL INDUSTRIAL SAVING

BANK BANK BANK
EXCHANGE AGRICULTURE CENTRAL

BANK BANK BANK
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HISTORICAL BACK GROUND OF THE J&K BANK

Ltd.
Entire banking in the state of Jammu and Kashmir was performed by traditional lenders till
1920 -30 and that too at exorbitant interest rates. At the same time some banks functioned
on a very limited scale, such as Punjab National Bank Limited, Grind-lay’s Bank and
Imperial Bank of India.
The role of these banks was reduced to the acceptance of deposits, as they could not grant
loans and advances to the people of the state owing to the statutory limitations. Under this
scenario banks could not ameliorate the financial and social position of the people of the
state. To over come this critical situation the then Maharaja of the state conceived an idea
of setting up of a state bank in the state. After a prolonged exercise and deliberations the
assignment for establishment of “The Jammu and Kashmir Bank Limited” was given to the
late Sir Sorabji N Pochkhanwala, the then Managing Director of the Central Bank of India.
Mr. Pochkhawala formulated a scheme on 24-09-1930, suggesting establishment of a semi

state Bank with participation in capital by state and the public under the control of state
Government. Thus the bank was formally incorporated on the Ist of October 1938 and
commenced business from 4th of July 1939 at its Registered Office, Residency Road,
Srinagar, Kashmir.
The Jammu & Kashmir Bank Limited has been the first of its nature and composition as a
State owned bank in the country. The state Govt. besides contributing half of the issued
capital also appointed it as its bankers for general banking and treasury business. In its
formative years, the bank had to encounter several serious problems, particularly around
the time of independence, when out of its total of ten branches two branches of
Muzaffarabad and Mirpur fell on the other side of the line of control along with cash and
other assets; in 1947. However the State Govt. came to its rescue with the assistance of
Rs.6.00 Lacs to meet the claims thereafter, the bank stead fastily over came its difficulties
and kept growing.
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Following the extension of Central laws to the state of Jammu & Kashmir, the bank was
defined as a govt. company as per the provisions of Indian Companies Act 1956 .The bank
had its first full time chairman in 1971, following social Central measures in banks .The
year 1971 was a turning point for the bank on conferment of scheduled bank status and
witnessed remarkable progress in all the vital fields of operations .The bank was declared
as "A" Class Bank by Reserve Bank of India in 1976. In recognition of dominant role and
exalted performance , Reserve bank of India appointed the bank as its agent for performing
the general banking business of the Central Govt. especially in maintaining currency chests
and collection of taxes.
INTRODUCTION ABOUT THE J&K BANK Ltd.
The Jammu & Kashmir Bank is today one of the fastest growing banks in India with a
network of more than 526 branches/offices spread across the country offering world class
banking products/services to its customers. Today, the Bank has a status of value driven
organization and is always working towards building trust with Shareholders, Employees,
Customers, Borrowers, Regulators and other diverse Stakeholders, for which it has adopted
a strategy directed to developing a sound foundation of relationship and trust aimed at
achieving excellence, which of course, comes from the womb of good Corporate
Governance. Good Governance is a source of competitive advantage and a critical input for
achieving excellence in all pursuits. J&K Bank considers good Corporate Governance as
the sine qua non of a good banking system and has adopted a policy based on all the four
pillars of good governance – Transparency, Disclosures, Accountability and Value,
enabling it to practice Trusteeship, Transparency, Fairness and Control, leading to
stakeholders delight, enhanced shareholder value and ethical corporate citizenship. It also
ensures that bank is managed by an independent and highly qualified Board following best
globally accepted practices, transparent disclosures and empowerment of shareholders,
besides ensuring to meet shareholders aspirations and societal expectations following the
principles of management's executive freedom to drive the bank forward without undue
restraints but within the framework of effective accountability.
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VISION OF THE BANK
The Bank's vision is “To catalyze economic transformation and capitalize on growth”.
The bank aspires to make Jammu and Kashmir the most prosperous state in the country, by
helping create a new financial architecture for the J&K economy, at the center of which
will be the J&K Bank.
The Bank is committed to achieve healthy growth in profitability and

simultaneously to remain consistent with the Bank's risk appetite and at the same time
ensuring the highest levels of ethical standards, professional integrity and regulatory
compliance.
MISSION OF THE BANK
The company’s mission is two-fold: To provide the people of J&K international quality
financial service and solutions and to be a super-specialist bank in the rest of the country.
The two together will make it the most profitable bank in the country.
FINANCIALS OF THE BANK
The Bank recorded an outstanding achievement in the last financial year (2006-07) in key
areas of its operations. During the year 2006-07, the Bank the bank continued to register an
impressive improvement in earnings. During the year, the total income has increased by
13.34% to Rs. 2056.54 crore from Rs.1817.10 crore in the previous year. The Capital &
Reserves of the Bank increased from Rs.1799.47 crore to Rs.2008.73 crore as on 31st
March 2007. The Capital Adequacy Ratio stood at 13.24%, which is comfortably much
above the minimum stipulated by Reserve Bank of India.
The Bank posted a net profit of Rs.274.49 crore in the last fiscal as against the previous
year figure of Rs.176.84 crore in 2005-06, registering an impressive growth of 55.22%.
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Bank's aggregate deposits recorded an appreciable accretion of 7.28% to Rs.25194.29

crore at the end of financial year 2006-07.
The credit portfolio of the Bank also recorded an appreciable growth during the year. The
total advances of the Bank increased to Rs.17080 crore against the corresponding period of
the previous year registering a growth of 23%.
The net NPA’s stood at 1.09%, as on the end of financial year 2007-08.
During the year, the Foreign Exchange business recorded an impressive growth of 19%,
moving to Rs.22573.58 crore. The contribution of this segment to the Bank's gross income
has been to the tune of Rs.36.98 crore.
Keeping in view overall performance of the Bank, the Bank, after the approval of
shareholders, paid 115% dividend (free of tax) for the year ended 31st March 2007.
INSURANCE BUSINESS
The Bank has diversified its business activities into insurance, both life and non-life. The
Bank not only became the strategic partner of, M/S METLIFE INDIA INSURANCE CO.
Ltd but also has been acting as corporate agent of the said company for distribution of their
life insurance products through network of its branches. The Bank also entered into a tie-up
with BAJAJ ALLIANZ GENERAL INSURANCE COMPANY for distribution of their
non-life insurance products. In view of Bank's deep branch network and loyal customer
base particularly in Jammu and Kashmir, the Bank has been able to distribute insurance
products in deep rural and far flung areas and has made penetration in the new areas
thereby adding to its non-interest and fee based income.
The bank’s insurance business continued to record splendid growth. During the year under
report the bank as a corporate agent further extended the marketing of products of M/S
METLIFE INDIA INSURANCE CO. Ltd into new areas, which were hitherto neglected by
the traditional competitors in the business. Bank has sold 9019 life policies of METLIFE
23
INDIA and collected annualized premium amount of Rs. 1277.84 lacs during the year. In
the non-life business, the bank has shown a better performance and collected aggregate
premium amount of Rs. 1759.03 lacs. This has yielded non-interest income of Rs.509.21
lacs to the bank
RECOGNITION AND AWARDS
The Bank recently won the prestigious Asian Banking Award – 2005 for its ‘Development
Project Financing Programme', contributing significantly to the development of tourism
industry of the J&K State. The award was presented by the Under Secretary Finance,
Philippines, at a glittering Gala Dinner award function held at Manila, Philippines on June
17, 2005.
The annual Asian banking awards recognize and honour Asian banks for outstanding,
innovative and world-class products and programmes implemented during the previous
year. It is the most respected and premier banking awards programme in Asia Pacific
region.
It is worth mentioning that the Bank has won the Asian Banking Award consecutively for
the second year. Last year, the Bank won the award for Customer Convenience
Programmes and was also given runners up certificate for its project ‘Motivating
Employees for Better Performance' under ‘operational efficiency programme' category.
The Bank was ranked fifth among the top ten Asian banks and 762nd among top 1000
World banks. A renowned business journal "Business Today” ranked JK Bank among 25
top investor friendly companies in India, the only bank in the whole Indian Banking
industry, which has been ranked in the magazine among first 10 Investor Friendly
Companies. The Bank for the second consecutive year was ranked Best Private Sector
Bank in Financial Express/Ernest and Young combined Survey for the year 2002-03
released recently. Bank was awarded ‘Shiromani Award' for outstanding achievements in
the field of banking and commitment to national progress and human welfare during the
year under report. The Bank has figured among 24 Indian companies in Forbes Global -
24
100 best ‘under a billion Asia's Rising Companies', listed by Forbes magazine in its issue
dated November 01 2006. The publication has commended J&K Bank for representing
economic dynamism' in the region, sustained growth in all spheres and an excellent track
record of rewarding its shareholders.
SERVICES PROVIDED BY THE JAMMU AND KASHMIR BANK TO

CUSTOMERS UNDER VARIOUS SCHEMES:
o The J&K Bank Savings Accounts
o The J&K Bank Current Accounts
o The J&K Bank Fixed Deposits
o The J&K Bank’s various Loans Schemes
o The J&K Bank various Depository Schemes
NEW PRODUCTS OF J&K BANK:-

For the benefit of the people of J & K State , the has developed some special schemes for
some special category. These schemes are as under
 APPLE ADVANCE SCHEME.
 J & K BANK DASTAKAR FINANCE.
 J & K BANK ALL TERM AGRI TERM LOANS.
 J & K BANK AHATANBAND FINANCE.
 J & K BANK ZAFRAN FINANCE
 J & K BANK RATION CARD.
APPLE ADVANCE SCHAME:-

J&K Bank’s specially designed product named as apple advance scheme has struck at
the root of the explorative system that thrived on scant or untimely fund availability at
times even lack of finance through formal channels. Last year after a detailed study of
the apple economy, need based, time specific product was introduced. The product
incorporated all the critical necessary to make our financial intervention effective and
grow friendly.
25
Apple advance scheme was introduced to meet the comprehensive requirements of the
apple growers with distinctive features like reduced margins ,higher scale of finance
that includes production and post harvest maintenance, auto renewal of limits and most
importantly very easy and hassle free documentation.. The scale of finance was
increased to Rs. 1.5 lacks per acre from Rs. 40000 per acre
The objectives that guided the customization of the product include the easy access,
simplified documentation, avoiding redundancies, shortened process time and flexible
fund limit. Even for the for the growers who have just leased orchards can avail finance
under the scheme.With hypothecation of fruit crop and third party guarantee of two
persons as security and no emphasis on collaterals, the borrower is also allowed drawls
up to 50 % of the previous year limit till the bank renews the sanction foe the next
year.The process has been made extremely easy and hassle free to ensure that
comprehensive requirements of apple growers to take care of production and marketing
costs are fulfilled adequately and in time. Simplified legal documentation has been
made to expedite the loan processing.
J&K BANK DASTAKAR FINANCE:-

J & K Bank in its Endeavour to promote trade, industry and to preserve the tradition
arts and crafts of the state devised a scheme aimed at the financial needs of the artisan
community aptly called J & K Bank dastakar finance.
The scheme provides easy and soft credit to the crafts men engaged in the trade ,a and
helps them to set up their own ventures, weeding out the middle men responsible for
their exploitation. Keeping in view the specific production cycle associated with this
trade loan comprises of term loan and working capital components. The disbursement is
phased in quarterly installments and aligned to the status of work in progress
[WIP].This ensures proper end use, quality control and timely completion of work. The
weavers ascertain are allowed a reasonable time for the repayment of the bank finance.
26
To make the credit hassle free no third party \collateral guarantee is required. The
product has been designed on the banks philosophy of confidence-based lending as
opposed to collateral based lending. There are no requirements of any collateral security
under this product. The legal documentation has been kept at bare minimum with only
two documents to be executed for disbursement of the loan.
In order to increase the reach of the product the data base of the weaver’s artisans
available with the various trade associations is being utilized besides identification of
the people by concerned of the bank.
J&K BANK ALL PURPOSE AGRI TERM LOAN:-

The product aptly named as All-Purpose Agro Term Loan has been designed in a way
that lays special emphasis on small and marginal farmers and provides sufficient and
more importantly timely finance to the farmers engaged in all types of agriculture and
allied activities. The product aims to cater to the needs of the small farmers within very
little land holdings in the rural and semi urban areas of the J & K State.
The objective has been to provide easy finance to needy farmers through regular
channels of finance and to wean them away from the exploitative circle created by the
non banking intermediaries. Foe that purpose, the product has been devised in such a
way that hitherto un-banked customers get an easy access to banking services through
simple and affordable documentation process. A maximum credit of 1 lakh, depending
upon the agri-activity to be financed is provided but multiple activities can also be
considered for finance. The product is offered at affordable interest rates.
This product is available for farmers of cereal crops and vegetables, orchids. It is also
available for unemployed rural youth for setting up of small dairy, poultry units, in
purchase of seeds, pesticides, fertilizers, plough and farm machines. This seems just the
beginning, as the fruits of this harvest are expected to yield much. The strengths of
being a community bank with a monopolistic presence are being exploited more
effectively so that the product reaches all the small growers of the state. And with every
loan granted, we are having more and more happy faces.
27
J&K BANK KHATAMBAND FINANCE:-

Khatamband craft is a specialized scheme that provides employment to few thousand
people living in the J & K State .a specialized scheme was customized to the people
according to the needs of the Khatamband craftsmen. The product was tailored to
provide comprehensive and timely credit to them, based on paper understanding of the
production cycle and need for finance at its different stages.
The finance is provided as a revolving facility, eligible for enhancement every year on
the basis on the turn-over. The product has been intentionally targeted at crafts men
aged between 18-55 years, no collateral security is asked for and the documentation
process has been kept simple . The prospective borrowers have to only submit their
identity proofs to avail the facility.
The response to the khatamband finance so far, has been Impressive. It has again
generated hope among the traditional khatamband crafts of the JK State, especially to
the small ones. Access to affordable finance is no longer a problem or them. Kindling
such hope is the first step towards the revival of all such culturally rich arts and crafts in
the state.
J&K BANK TRUMP CARD:-

Deepening of financial intermediation is a pre-requisite for sustained economic growth.
The bank have given a new meaning to inclusive growth by working on empowering
people and demonstrating that people with lesser means can be reached and reached
profitably. For bank, making making a difference in people’s lives and making profits
can not be mutually exclusive. The bank is therefore combining the sensibility of social
enterprises with the form of a far- profit business.
A very novel initiative was started in this respect , which proved to be quite useful in
reaching out to almost every house hold of J & K State. The initiative was to print the
ration books for the Govt. The state Govt. annually prints and distributes twenty lakh
Ration books to customer families to facilitate them purchase of rations from Govt.
28
owned fair prices. Practically every family in the state gets a ration book including
more than eight lakh BPL families. These ration books reached places where even roads
don’t go. There ration cards can be used as an ideal delivery vehicle to reach out to the
unbanked people and to carry out the empowerment initiative through an assured and
established distribution network system active across J 7 K State. The ration books also
contained personal information coupons which helped the bank create a data base of
around twenty lakh people .The data would be used for strategizing the banks other
initiatives aimed at economic empowerment.
The bank spent quite a sum on printing these ration books, which was other wise to be
spent by the J & K State government. But the smiles on the faces of our people were a
return that was match less. Applications forms provided within the ration book, they
went to their nearest branches to put their hard earned money to better use instead of
keeping the cash at home.
JK BANK ZAFRAN FINANCE:-

With a view of preserving this prized spice, JK Bank tailored a specific product named
JK Bank Zafran Finance .Its purpose is to provide adequate ,timely and need based
finance to Saffron growers.
The scheme is for all saffron growers, especially the smaller and Marginal ones
including even the contract farmers engaging in or intending to start its cultivation. The
quantum of finance is to proportionate to the land holding of a grower. The product also
provides an additional finance for post harvest and packaging. The disbursement is
done in two phases; 60 % in the first year and 40 % in the second ,when the growers are
in need of funds. The repayment of the advance is scheduled within th four year
growing cycle of saffron. Refinancing facility can be availed on fresh plantation of the
crop. The documentation has been simplified and kept minimum to make it hassle free.
Saffron finance has made the middle men and other informal channels of finance and
attractive for the saffron growers. Besides it has encouraged the small growers to with
stand the price fluctuations because now they are not forced to sell their produced and
they can wait till they are satisfied with the rates .With the much needed direct finance
29
leading to the prosperity of some, others have already made up their mind to follow.
Hence the product is in demand across the saffron belts of the valley.
OTHER FACILITIES AT THE J&K BANK Ltd:

o Automatic Teller Machines.
o Locker Facility.
o Mobile ATM Service.
o The J&K Bank Credit Cards.
o The J&K Bank Global Access Debit Cards.
o SMS Banking
o Anywhere banking facility
o The J&K bank is the only bank in India which provides Amaranth Yatra Tickets
to pilgrims.
30
BANKS NEW IDENTITY
The new identity for J&K Bank is a visual representation of the Bank’s philosophy
and business strategy. The three coloured squares represent the regions of Jammu, Kashmir
and Ladakh. The counter-form created by the interaction of the squares is a falcon with
outstretched wings – a symbol of power and empowerment. The synergy between the three
regions propels the bank towards new horizons. Green signifies growth and renewal, blue
conveys stability and unity, and red represents energy and power. All these attributes are
integrated and assimilated in the white counter-form.
31
SWOT ANALYSIS
The term SWOT is the acronym made up of four words viz, Strengths, Weaknesses,
opportunities and Threats. The first two variables are internal to an organization whereas
the last two are external. The value of SWOT analysis cannot be over emphasized. It is
rightly said” winners recognize their limitations but focus on their strengths; losers
recognize their strength but focus on their limitations.”
SWOT Analysis
__________________________________________________________________
Internal Environment External Environment
____________________ ____________________
Strengths Weaknesses Opportunities Threats
Internal factors
Strength:
Strength is defined as something which is positive, good or such other characteristics that
give to the company an edge in the competitive market. The Bank has one unique source of
strength which if cultivated carefully,can be virtually impregnable – its roots are in the
state, and as such it shares with the people of Jammu and Kashmir a kinship, and empathy
for the cause of the state’s progress, which no outside bank ever can. The J&K Bank also
performs the leaders role in the J&K. As a leader the Bank continued to discharge its Lead
Bank responsibility in 8 out of 14 districts of J&K State satisfactorily.
32
Weaknesses:
A weakness refers to something which one lacks. It is something which restricts us to move
forward. While doing my summer training in the J&K Bank I found the following
weaknesses;
(i) There is less competent staff at lower level.
(ii) Weak competitive capability because of lack of lesser advertisement budget.
(iii) Labour problems because of militancy in the state which results in strikes and tense
conditions.
(iv) The activities of Branch managers are not effectively monitored.
External factors
Opportunities:
Opportunities are entirely external concerning the business environment. Opportunities do

not come very frequently and therefore, the management must exploit them to the
maximum extent without any delay. Each opportunity should be analyzed in terms of its
profitability. The opportunities analyzed by me for the J&K Bank are;
(i) There is agriculture market which is still fully not trapped by the J& K
Bank .There are a lot of schemes regarding agriculture such as post
harvest , preservation scheme and many other schemes
(2) The historical activities of the state such as carpet industry, dastakar
finance, khatamband schemes and many other activities of historical importance
are not still fully covered by J&K Bank
33
Threats:
With every opportunity, there also goes alongside certain threats which may adversely
affect the profitability and competitive capability of an enterprise. The threats analyzed are;
(i) Competitors like HDFC Bank, Central Co-operative Bank, ICICI Bank
etc. may enter in the field to provide finance facility.
(ii) There may be change in the policies of the state government
Objectives of the Study
 To find out the credits given under various schemes by different banks.
 To find out in which sector J&K Bank is lagging behind the other banks in
providing the credit.
 Credit flow of J&K bank in different sectors of the economy.
 What should be done for the sectors in which J&K k is lagging behind.
What extra facilities are provided by the other banks to their customers
34
RESEARCH METHODOLOGY
Success or failure of any project entirely depends upon methodology adopted by the
researcher. Methodologies basically use different methods of research systematically and
scientifically. Objective of the study, its research design, its sampling design, coding and
editing methods, presentations and analyses of the data together with interpretation of the
data are essential part of research methodology.
RESEARCH DESIGN
Fundamental to any marketing research project is a sound research design. A good research
design has certain characteristics viz. problem definition, specific method of data collection
and analysis etc; a research design is purely and simply the framework or plan for a study
that guides the collection and analysis of data. In this research Explorative and Descriptive
Research method was adopted.
DATA COLLECTION
Data collection is an essential part of every project. Success or failure of any project
entirely depends on the method of collection of data. The data can be collected by the
following two ways.
a) PRIMARY SOURCE
b) SECONDARY SOURCE
In this project, primary data is collected from information that was collected from the
respondents through structured questionnaire. The information brochures of the bank
35
and articles in newspapers have been consulted as a secondary source of information.

Secondary data has also been collected through the various websites on the Internet.
Contact method- The respondents were contacted personally and a structured

questionnaire were administered to them.
Sampling plan
Population – The managers of different banks operating in Anantnag.
Sample unit-Any manager of the bank.
Sample size- 50
Sampling Procedure-Convenience Sampling.
36
Objectives of the Research:
1. To objective of the research is to understand concept of Microfinance.
2. To find out existing Structure of Microfinance in World and in India
3. . To understand Policies adopted by different bank
4. The main objective of the research is to find out Potential of Microfinance in

Jammu & Kashmir
5. To understand Microfinance structure in J&K Bank and to Find out Flaws if any.
Source of Information:
Primary Source:
• Through Structured questions.
• Face to face interview.
Secondary Source:
• Records maintained by Bank.
• Websites.
• Times of India.
Research Methodology: The study pertains to detailed understanding

of concept of Microfinance, its need, Supply and regulatory methods adopted by various
agencies. An exploratory research design was adopted to conducted research, method of
selecting sample was convenience sampling. Field survey was carried out to collect the
necessary data.
Data Used: Both Primary and Secondary Data were used. Websites,
Departmental visits, newspapers, Survey magazines, Statistical digest etc were used to
collect data.
Data Collection: Though most of the respondents were illiterate so Face to
face interview was the main source of collecting data. Respondents were interviewed in a
structured format.
37
Analysis & Interpretation

BANKS OPERATING IN THE DISTRICT:-
There are a number of banks operating in the Baramulla District which includes J&K
Bank, SBI, Canara Bank, Cooperative Bank, Punjab National Bank, HDFC Bank etc. The
J&K Bank is among the most prominent bank with 29 branches in the town and one zonal
office. The SBI has 5 branches; PNB, Cooperative and Kamaraz Rural Bank are having 4
branches each, Canara bank has 3 and HDFC Bank has 1 branch.
J&K Bank SBI PNB Cooperative Canara KRB HDFC Total

29 5 4 4 3 4 1 50
Name of Banks and No of Branches

J&K Bank
Operating in District
SBI
4
1
3 PNB
4 Cooperative
Bank
Canara Bank
4 29
HDFC
5 Kamaraz
Rural Bank
38
Q1:What is the total amount of credit your branch has offered during the current
financial year?
Through this question an attempt was made to figure out the total potential of credit in the
district Baramulla
Tab: 01 (Rupees in crores)
J&K Cooperative Canara Kamaraz Rural
Bank SBI PNB Bank Bank HDFC Bank Total
70 7 0.5 89.25
crores crores 5 crores 3 crores 2.5 crores crores 1.25 crores crores
Chart: 01
Total amount of credit by different

Amount (in crores)
banks
80 70
60
40
20 7 5 3 2.5 0.5 1.25
0
Rural Bank
J&K Bank
Cooperative
Canara
HDFC
PNB
SBI
Kamaraz
Bank
Bank
Various Banks
The above graph shows that JK Bank is the only bank in the district with about one fourth
of the total credit and is equal to the 70 crore during the current financial year. The PNB
and SBI enjoys a credit share of 5 & 7 crores respectively. The Cooperative and the Canara
bank enjoys 3 & 2.5cror . The HDFC and the CRZ has less than 2 crore of credit in the
district equal to .5 and 1.25 respectively
39
Q.2:What are the various credit schemes offered by your Bank in district Baramulla ?
Through this question an attempt was made to figure out the various credit schemes
different banks offer in the district Baramulla?
Table: 02
Different Banks offering Various Credit Schemes
S.No J&K BANK SBI PNB Cooperative Canara HDFC KRB
1 Term loans
2 Housing Housing Housing Housing Housing Housing Housing
3 Trade Trade Trade Trade Trade Trade Trade
4 SSI SSI SSI SSI SSI SSI SSI
5 Agriculture Agriculture Agriculture Agriculture Agriculture Agriculture
6 TPT. TPT. TPT. TPT. TPT. TPT. TPT.
7 Education Education
8 Tourism Personal Personal
9 Others Others
40
Q.:3How many loans you have given during the current financial year
Through this question an attempt was made to determine the total no. of credit cases given
by the different banks
Bank JK SBI CANARA COOP. KRB HDFC TOTAL
PNB
BANK BANK BANK
No. of 1640 220 215 140 130 110 90 2190
cases
TOTALNO.OFCREDITCASES
BYBA NKS
1800
1600
1400
1200
NO.
1000
Series1
800
600
400
200
JK BANK
CANARA
COOP.
HDFC
PNB
KRB
0
SBI
BANK
The above graph shows that JK Bank is the only bank in the district which has provided
more thatn half of the total loans in the district. SBI is the second omne and PNB is the
third one in providing the loans in the district baramulla?
Q.4: Do your customers regularly pay the loan installments or not?
41
Sample size-501
BANK JK SBI PNB COOP. CANARA KRB HDFC TOTAL
BANK
YES 21 3 3 3 2 2 1 35
NO 8 2 1 1 1 2 0 15
REGULARPAYM ENTOFBANK
INSTALLEMENTS
40
NO. OF RESP.
35
35
30
25 Series1
20
15
15
10
5
0
YES NO
BANK
From the above graph it is clear that about 35 of the total respondents said that the
customers regularly repay their loan installments with out any lapse in their installment
terms, while as 15 of the respondents said that customers do not pay their installments
regularly.
42
Q.5: How many number of default cases your Banks has faced during current
financial year?
BANK JK SBI PNB COOP. CANARA KRB HDFC TOTAL
BANK
No. of 1640 220 215 140 130 110 90 2190

cases
DEFAULT 40 10 12 10 11 6 3 92
CASES
PERCENTAGE
PERCENTAGEOFDEFAULT
CASES
9 7.9
8 7.4
7 5.8
6
5 4.5 Series1
4 2.8
3
2 0.6
1
A
K
0
N .
R
C
N
P
B
B
I
F
O
B
A
D
S
B
O
P
H
A
C
k
BANK
J
The above graph shows that J & K Bank is leading in case of default cases with total no. of
default cases equal to 35 during the current financial year, then the second leading one
among default cases is Cooperative Bank with total no. equal to 18, the third being the PNB
with total no. of default cases equal to 12, then KRB equal to 9 , SBI and Canara having 7
& 4 default cases respectively. HDFC is the bank with no default case.
43
Q.6: What is the main reasons behind non-repaying of loan installments according to
your view?
Sample size 50
REASON Unaware about Weak economic Abnormal factors
repaying date condition
NO. OF
25 15 10
RESP.
R
easonsfornotpay inglaon
installemen ts
20% Unawa reab out

repayingdate
Weake conomic
50%
condition
30% Abn ormal

factors
The above graph shows that fifty percent of the defaults are due to the unaware ness of
repaying date by the customers , thirty percent of the default cases are due to the weak
44
economic comditions of the customers and twenty percent of the default cases are due to
the abnormal factor
Q.7: How much time does your bank gives to default customers to take over their
mortgage?
Bank J&k PNB SBI COOP. CANARA KRB HDFC

bank
Time 4 2 2 3 1 4 3
Time for taking over the mortgage

(InYears)
3 4 J&K Bank
SBI
PNB
4 2 Cooperative Bank
Canara Bank
2 HDFC
1
3 KRB
45
The above graph shows that all the banks give 2-4 years for their default customers to take
their mortgage. The Canara bank gives only one year for their default customers to take
their mortgage.
Q.8; Does your bank charge the same rate to the defaulters or not ?
YES 9
NO 7
chargingof increasedor
decreasedinterest rates
44% yes
56% No
46
The graph shows that 56 % of the respondents said that they charge the same interest rate to
their default customers while as 44% of the respondents said that they does not charge the
same interest rates to their default customers.
Q.9: whether your bank charge increased or decreased rate of interest to the
defaulters ?
Sample size 7
Banks charge increasing rate or

decreasing rate
Increasing rate
Decreasing rate
Out of the seven respondents five of them said that they decrease the interest rate to their
default customers while as two of the respondents said that they increase the interest rate.
The decreasing rate are mainly charged by the Kamraz Rural Bank
47
CREDIT SURVEY OF J & K BANK:-
The J & K Bank is the only bank in the Baramulla town which has more than fifty percent
of the credit share in the town. The bank has about 77.7 % of the total credit in the market.
Every shop of the town is banked with the J&K Bank whether it is the local manufacturing
unit or the distributing unit or whether it is the local vegetable grower or the local fruit
grower .The J&K Bank has almost covered all the Baramulla district with a small portion
remaining aside.
The different sections in which J&K Bank has provided loans include term loans, housing
loans, trade loans, industry loans, tourism loans, agriculture loans, transport loans,
educational loans and other loans. The total credit of the bank in the Baramulla town is
about 70 crores which are distributed in the different economic sectors of the town. The
weight age of the different credits in different sectors is given in the graph below.
48
JK BANK CREDITS TO DIFFERENT SECTORS

TERM LOANS
HOUSING LOANS
TRADE LOANS
20% 24% SSI LOANS
AGR. LOANS
8%
TPT. LOANS
9%
1% EDUCATION
1% 1% LOANS
0.14%
36% TOURISM LOANS
OTHER LOANS
CREDIT SURVEY OF PUNJAB NATIONAL BANK:-
The Punjab national bank has a credit of about 5 crore in the town . The Punjab National
Bank enjoys only a small portion of the total credit in the town . Punjab national banks
credit percentage is about 5.6 % .The different sectors in which Punjab National Bank has
allotted credit are car loans, personal loans, housing loans, transport loans, small scale
industry loans, trading loans, and agriculture loans. Among these all sectors the trade
constitutes about one third of the total credit of the Punjab national bank. The different
amount in different sectors are shown as in the graph below.
49
CREDIT OFPNBINDIFFERENT SECTORS

HOUSINGLOANS
14% 9% TRADELOANS
3% SSI LOANS
AGR. LOANS
34%
23% TPT. LOANS
PERSONAL
10% 7%
CARLOANS
50
CREDIT SURVEY OF SBI:-
The SBI is the bank among different banks operating in the town with large market share
after J&K Bank. Like J&K Bank the SBI bank also has provided loans or credit in different
sectors of the economy of the town. These sectors include housing loans [both for public as
well as for staff persons], term loans, agriculture loans, tourism loans, industry loans,
transport loans, educational loans and other loans. The total credit given by the SBI bank is
about 7 crores. The total market share of the SBI is about 7.7 % of the total credit of all the
banks given in the town. Among the credits given trade loans constitutes about 40 % of the
total credit given by the SBI in the town’s contribution in the different sectors of the
economy given by the SBI is given in the graph.
51
CREDIT SURVEY OF COOPERTIVE BANK:-
The Cooperative bank enjoys a small portion of the credit finance in the town. The total
credit given by the cooperative bank in the town is about 3 crore. This constitutes about 3.4
% of the total finance in the town. The credit given by the Cooperative bank in the sectors
includes trade loans, transport loans, small scale industry loans, agriculture loans and the
other loans. The amount of credit given in the each sector is shown in the diagram below
credits of cooperative bank
17% 1% AGR. LOANS

22%
TRADE LOANS
SSI LOANS
TPT. LOANS
OTHER LOANS
34% 26%
52
CREDIT SURVEY OF CANARA BANK:-
Like the credit of the cooperative bank same is the case with the Canara bank. Canara bank
also enjoys a credit of about 2.5 crore in the town .This constitutes it a market share of
about 2.8 % in the total town. The credits given in the different sectors of the economy are
housing loans, credit loans, agriculture loans, small scale industry loans , educational loans,
transport loans and other loans . The trade lone alone constitutes about one third of the total
credit given by the Canara bank. The weight age of each sector in terms of money is given
in the graph below.
C R E D IT OF C AN AR A B AN K
1%
1%
20%
29% A G R. LO A NS
HO US IN G LO A NS
TR A DE LO A NS
10%
S S I LO A NS
TP T. LO A NS
O THE R LO A N S
39%
53
Credit flow of Kamraz Rural Bank.
The above pie chart shows that Kamraz rural bank has more credit flow in small scale
industries, trade and in transportation having in each sector 27%, 26%and 21%
respectively. The agriculture and housing has 12% and 14% respectively
54
CREDIT SHARE OF DIFFERENT BANKS :-
The total credit of all the banks in the town is about ninety five crores. The market share of
J&K Bank alone is about eighty percent of the total market share of all the banks. The other
twenty percent market share is collectively shared by the SBI, Punjab National Bank,
Canara Bank, Cooperative Bank, and HDFC. The percentage of each bank is shown in the
diagram below.
55
The above graph shows that JK Bank is the only bank which has about 78 % of the total
credit in the market .The SBI has a 8% of the total market share , PNB 6% ,Canara and
Cooperative has 3% and 1% for each HDFC and KRZ
OVER ALL CREDIT IN DIFFERENT SECTORS BY ALL THE BANKS :-
The over all credits in different sectors shows that transportation is the main sector among
all the sectors which constitutes about one third of the total credits in the town. The
percentage of different sectors by all the banks is as shown in the chart.
CREDITS IN DIFFERENT SECTORS BY ALL THE BANKS

40
35
30
PERCENTAGE
25
20
15 Series 1
10
5
0
I
E
SS
RS
S
HO N
RE
S
N
AD
AN
O
IN
AN
IO
HE
TU
TI
US
TR
LO
AT
LO
A
OT
CL
UC
RT
RM
M
RI
ED
PO
IS
AG
TE
UR
NS
TO
A
TR
The above graph shows that transport is the main sector which shares a credit facility of 37
% of the total credit, term loans and others has about 20 % of the total credit and the
remaining each sectors constitutes less than 10 % of the credit
56
FINDINGS
During the survey of the town the main findings are as under
• The J&K Bank is the only Bank in the state having about more than one third of the
total credit share in the town. In other words we can say J
&K Bank is having monopoly in the town.
• The J&K Bank is the only in the district which has ptovided the credit to the
Tourism industry.
• Education has not been properly served by any bank of the district
• The agriculture and the horticulture has not properly encouraged by the J& K Bnak
The transportation is the main sector in which J7K Bank and other banks has
The maximum credit
• The potential in the under – financed productive sectors like, horticulture,

commodities and in the artisan sector has not been properly taped by the J&K
Bank.
• While complicated structured products and derivatives have been designed by the J
& K Bank, little attention has been paid to create simple financial products on the
basis of customer requirements, their income generating patterns, the phases in
their business, their inter-temporal repayment capabilities and the leveraging of
business rather than their assets
57
• The people are not still aware of the new products of the J & K Bank. These new
schemes include Budshah primary Education Finance J K Bank Zafran Finance, JK
Bank Khatamband Finance, JK Bank Craft Development Finance, JK Bank
Dastakar Finance, JK Bank Giri Finance, JK Bank Commercial Premises Finance
and many other such schemes.
• The J & K Bank has still not initiated the credit counseling centers in the town, so
many of the people are not sill having sufficient and complete information about
the credit facilities of the JK Bank.
• Some people are in confusion over the interest rates of the credits provided to them
by the different banks
• Transport is the main economic sector of the town which has consumed about 12
crores of the total credit in the town which is about 14 percent of the total credit
provide by all the banks
• Arts and Dastakar finance has been totally ignored in the town which are associate
with the history of the Kashmir.
• JK Bank is the only bank in the town which provides finance to the Tourism
Industry and has thus helped the Tourism Department of the state in the promotion
of the tourism
• There are also some reports of over charging while applying for the credit facility
to the Bank.
58
SUGGESTIONS
• The agriculture and the horticulture should be given prompt attentions and new
schemes regarding these sectors should be implemented the fruit grower and the
farmer could get more benefits from the scheme
• The J&K Bank should adopt an integrated approach to agriculture financing by

addressing an entire chain from production to consumption with a deep sectoral
focus. The Bank should also include credit facilities to cold storage and warehouses.
• The J&K Bank should also focus on financing of post harvest, infrastructure such as
grading, packing facility, cold storage and fruit juice manufacturing and other such
facilities
• Education should be given prompt attention and new schemes should be developed
for this purpose
• The J&K Bank should now follow intensive lending rather than extensive lending ,
the process of intensive lending builds the network of financial intermediation and
then leverages these for extensive lending.
• Credit counseling centers should be created so that customers can get complete and
adequate information about the different products adopted by the JK Bank and the
interest rates
• The people should be informed about the new schemes of the JK Bank such as.
Budshah primary Education Finance J K Bank Zafran Finance, JK Bank
59
Khatamband Finance, JK Bank Craft Development Finance, JK Bank Dastakar

Finance, JK Bank Giri Finance, JK Bank Commercial Premises Finance and many
other such schemes and the best use of these schemes to their customers so that
maximum profit can be generated by using these schemes by a customer
• The tradition arts and dastakar should be financed with the new schemes of the JK
Bank so that the traditional economic sector of the state can be boosted and can be
retained in its original form which it has lasted from past few years.
• The JK Bank should strength its operations department so that while applying for
the credit facility in the JK Bank it should not take more time
• There are still some sectors such as saw mills in which J&K Bank doesn’t provide
credit facility, due to which these sectors are lagging behind in the valley. Therefore
JK Bank should take some steps towards such industries so that losses in these
sectors can be minimized.
• The JK Bank should develop customer oriented strategy so that the losted customers
can be attracted.
• The JK Bank should focus on turn over lending rather on asset lending
• The JK Bank should develop rural strategy for capacity building and offering of
new financial services.
60
LIMITATIONS OF THE STUDY
However, every care has been taken to make this report authentic in every sense. Yet, there
were a few uncomfortable factors, which might have had their influence on the final report.
It is said,” nothing is perfect” and if this quote is true I am sure there would be few
shortcomings in this project also. Sincere efforts have been made to eliminate due to the
limitations of the study. These are:
• The study was to be completed in a short time; the time factor put a considerable
limit on the scope and the extensiveness of the study.
• Because of the diversity of nature of respondents the findings of the survey could
not be generalized.
• Some of the respondents gave ambiguous replies for certain questions or omitted
the responses to some of them. The interpretation of some responses become
difficult and could generate wrong results.
• The survey was conducted only to Baramulla district
Questionnaire
61
Q NO.1:- What is total amount of credit your bank has offered during the
current financial year?
(a) Below 1 crore

(b) 1-2 crore
(c) 2-3 crore
(d) Above 3 crore
Q NO.2:- What are the various credit schemes offered by your Banks in
district Anantnag?
(a) Transportation
(b) Business
(c) SSI
(d) Education
(e) Agriculture
(f) Term loans
(g) Tourism
(h) Housing
(i) Others
Q NO.3:- How many loans you have given during current financial year?
(a) 1-5
(b) 5-10
(c) 10-15
(d) 15 above
Q NO.4:- Are your customers regularly paying the installments?
(a) Yes (b) No
Q NO.5:- How many defaults cases your bank has faced during the current
financial year?
62
(a) 1-5
(b) 5-10
(c) 10-15
(d) Above 15
Q NO.6:- What is the main reason behind non reoaying of loan installements
according to your view?
Q NO.7:- How much time does your bank give to defaulters to take over
their mortgage?
(a) 1 years
(b) 2 years
(c) 3 years
(d) 4 years
Q NO.8:- Does you charge the same interest rates to defaulters or not?
(a) Yes (b) No
Q.9: whether your bank charge increased or decreased rate of interest to the
defaulters ?
(a) Increased rate (b) Reduced rate
63
BIBLIOGRAPHY
BOOK CONSULTED
• Zeithmal,A.V, A.V. (2007). Service marketing. Tata McGraw-Hill publishing

company, vol.6, 16-78
• Kotler, p., Keller, k., Koshy, A. & Jha, M. (2008). Marketing management. Pearson
Education, VOL.12, 339-359.
WEB SITES
• http://www.j&k Bank.org
• www.RBI,com
• www.myiris.com
• www.jkbank.net
64

Credit Policy of J&K Bank

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CREDIT SURVEY OF DISTT.

CREDIT SURVEY OF DISTRICT BARAMULLA

In Partial Fulfillment of the Requirements

Punjab Technical University

Submitted To - Submitted By-

St. Soldier Management and Technical

I would like to acknowledge the invaluable

Finally I would also like to thank my parents and

Bilal Ahmad Parray.

This is to certify that the Project report “Credit

Training & Placement Officer

A Brief History of Banking

As the technological revolution progressed, so the buying up of TV stations and

INTRODUCTION ABOUT BANK

Casa De SanGiorgio was the first bank to be established in 1148.

As per Banking Regulation Act. 1949, “Banking” means:

HISTORY OF BANKING IN INDIA

Phase 1:-Early phase from 1786 to 1969 of Indian Banks

Phase 2:-Nationalization of Indian Banks and up to 1991 prior to Indian banking

• 1949: Enactment of Banking Regulation Act.

The Jammu and Kashmir Bank Limited

COMPOSITION OF THE BANKING SYSTEM IN INDIA AS AT THE

PUBLIC SECTOR BANKS

o Reserve Bank of India

PRIVATE SECTOR BANKS

o Old Generation Private Banks

CO-OPERATIVE SECTOR BANKS

o State Co-operative Banks

o Industrial Finance Corporation of India (IFCI)

o Export-Import Bank of India

RESERVE BANK OF INDIA

o Formulates implements and monitors the monetary policy.

Regulator and supervisor of the financial system:

o Prescribes broad parameters of banking operations within which the

• Manager of Exchange Control:

o Objective: to facilitate external trade and payment and promote orderly

CHART SHOWING INDIAN BANKING SYSTEM

APEX BANKING INSTITUTION

IDBI NABARD EXIM HB National Housing

Commercial Regional Rural Co-operation

State Bank Subsidiary Old New Local

ACCORDING ACCORDING ACCORDING

CO- SCHEDULED NON-

COMMERCIAL INDUSTRIAL SAVING

EXCHANGE AGRICULTURE CENTRAL

HISTORICAL BACK GROUND OF THE J&K BANK

Mr. Pochkhawala formulated a scheme on 24-09-1930, suggesting establishment of a semi

INTRODUCTION ABOUT THE J&K BANK Ltd.

VISION OF THE BANK

The Bank is committed to achieve healthy growth in profitability and

MISSION OF THE BANK

FINANCIALS OF THE BANK

Bank's aggregate deposits recorded an appreciable accretion of 7.28% to Rs.25194.29

RECOGNITION AND AWARDS

SERVICES PROVIDED BY THE JAMMU AND KASHMIR BANK TO

NEW PRODUCTS OF J&K BANK:-

APPLE ADVANCE SCHAME:-

J&K BANK DASTAKAR FINANCE:-

J&K BANK ALL PURPOSE AGRI TERM LOAN:-

J&K BANK KHATAMBAND FINANCE:-

J&K BANK TRUMP CARD:-

JK BANK ZAFRAN FINANCE:-