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CHAPTER 1
INTRODUCTION
Loans and advances are the most important aspect of any banking organization.
Loan is a type of debt. Like all debt instruments, a loan entails the Redistribution of financial
assets over time. The borrower initially receives an amount of money from the lender, which
they pay back, usually but not always in regular instalment, to the lender. This service is
generally provided at a cost, referred to as interest on the debt .The Sum of borrowed Money
(Principal) that is generally repaid with interest.
Loan– to –Value –Ratio the relation between the amount of the mortgage loan and
the appraised Value of the property expressed as a percentage. Lock lenders guarantee that the
mortgages are quoted will be good for a specific Number of days from day of application.
Money Margin, the amount of a Lender adds to the index on an adjustable ratio mortgage to
establish the adjusted interest rate. ADVANCE is a term that describes a secured loan Made
to a member. Advances are offered at fixed or floating rates with specific Maturities or with
embedded options for early redemption. There are different types of loan offered by a bank.
Different loans fetch a different rate of interest and have different securities against them.
Consumer loans
Housing loans
Car loans
Education loans
Against mortgage
Profit is the pivot on which the entire business activity rotates. Banking is a essentially
a business dealing with money and credit. Like a every other business activity, banks are
profit oriented a bank invest its funds in many ways to earn incomes. The bulk of its income
is dividend from loans and advances. Banks makes loans and advances to traders, business
and industrialist against the security of some assets are on the basis of the personal security of
the borrower in either case, the banks run the risk of the default in repayment therefore, banks
have to follow caution policy and sound lending principle in the matter of lending.
Banks in India have to consider the national interest along with their own interest
determining the lending policy. Many times a borrowers need funds fixed asset on non-
respective types of activities and thus, seeks money from the bank that bank in one lump-
sum.
The loan amount is normally repaid in instalment. Loan may be short terms, medium
or long-terms. The term ‘loan’ refers to the amount borrowed by one person from another.
The amount is in the nature of loan and refers to the sum paid to the borrower. Thus, from the
view point of borrower, it is ‘borrowing’ and from the view point of bank, it is ‘lending’.
Loan may be regarded as ‘credit’ granted where the money is disbursed and its recovery is
made on a later date. It is a debit for a borrower.
While granting loans, credit is given for a definite purpose and for a predetermined
period. Interest is charged on the loan at agreed rate and intervals of payment. ‘Advance’ on
the other hand, is a ‘credit facility’ granted by bank. Banks grant advances largely for short-
term purpose, such as purchase of goods traded in and meeting other short-term trading
liabilities. There is a sense of debt in loan, where as an advance is a facility being availed of
by the borrower. However, like loans, advances are also too repaid. Thus a credit facility
repayable in instalments over a period is termed as loan while a credit facility repayable
within one year may be known as advances.
Loans and advances granted by commercial banks are highly beneficial to individuals,
firms, companies and industrial concerns. The growth and diversification of business
activities are effected to a large extent through bank financing. Loans and advances granted
by banks help in meeting short-term and long term financial needs of business enterprises.
We can discuss the role played by banks in the business world by way of loans and
advances as follows:-
(a) Loans and advances can be arranged from banks in keeping with the flexibility
in business operations. Traders may borrow money for day to day financial needs availing of
the facility of cash credit, bank overdraft and discounting of bills. The amount raised as loan
may be repaid within a short period to suit the convenience of the borrower. Thus business
may be run efficiently with borrowed funds from banks for financing its working capital
requirements.
(b) Loans and advances are utilized for making payment of current liabilities,
wage and salaries of employees, and also the tax liability of business.
(c) Loans and advances from banks are found to be ‘economical’ for traders and
businessmen, because bank charge a reasonable rate of interest on such loans/advances. For
loans from money lenders, the rate of interest charged is very high. The interest charged by
commercial banks is regulated by the Reserve Bank of India.
(d) Banks generally do not interfere with the use, management and control of the
borrowed money. But it takes care to ensure that the money lent is used only for business
purpose.
(e) Bank loans and advances are found to be convenient as far as its repayment is
concerned. This facilities planning for future and timely repayment of loans. Otherwise
business activities would have come to halt.
(f) Loans and advances by banks generally carry element of secrecy with it.
Banks are duty- bound to maintain secrecy of their transactions with the customers. This
enhances people’s faith in the banking system.
Lending of Money
(c) Overdraft.
LOANS
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A STUDY ON LOANS & ADVANCES AT UJJIVAN SMALL
FINANCE BANK IN CHINTAMANI
Loan is the amount borrowed from bank. The nature of borrowing is that the money
is disbursed and recovery is made in installments. While lending money by way of loan,
credit is given for a definite purpose and for a pre-determined period. Depending upon the
purpose and period of loan, each bank has its own procedure for granting loan. However the
bank is a liberty to grant the loan requested or refuse it depending upon its own cash position
and lending policy.
(2) Term loans: -medium and long term loans are called term loans. Term loans
are granted for more than a year and repayment6 of such loans is spread over a longer period.
The repayment is generally made in suitable installment of a fixed amount. Term loan is
required for a purpose of starting a new business activity, renovation, and modernization,
expansion/extension of existing units, purchase of plant and machinery, purchase a land for
setting up a factory, construction of a factory building or purchase of immovable assets.
These loans are generally secured against the mortgage of land, plant and machinery, building
and etc.
CASH CREDIT
Cash Credit is a flexible system of lending under which the borrower has the option to
withdraw the funds as and when required and to the extent of his needs. Under this
arrangement the banker specifies a limit of loan for the customer (known as cash credit limit)
up to which the customer is allowed to draw. The cash credit limit is based on the borrower’s
need and as agreed with the bank. Against the limit of cash credit, the borrower is permitted
to withdraw as and when he needs money subject to the limit sanctioned.
It is normally sanctioned for a period of one year and secured by the security of some
tangible assets or personal guarantee. If the account is running satisfactorily, the limit of cash
credit may be renewed by the bank at the end of the year. The interest is calculated and
charged to the customer’s account. Cash credit, is one of the types of bank lending against the
security by way of pledge or /hypothetication of goods. ‘Pledge’ means bailment of goods as
security for the payment of debt.
Its primary proposes is to put the goods pledged in the procession of lender. It ensures
recovery of loans in case of failure of borrower to repay the borrowed account. In
‘hypothetication’, goods remain in the possession of the borrower, who binds himself under
the agreement to give possession of goods to the banker whenever the banker requires him to
do so. So hypothetication is a device to create a charge over the asset under circumstances in
which transfer of possession is either inconvenient or impracticable.
OVERDRAFT
Over draft facility is more or less similar to ‘cash credit’ facility is the result of an
agreement with the bank by which a current account holder is allowed to draw over and
above the credit balance in his/her account. It is a short-period facility. This facility is made
available to current account holder who operates their account through cheques. The
customer is permitted to with the amount of overdraft allowed as and when he/she needs it
and to repay it through deposit in the account as and when it is convenient to him/her.
The following are some of the benefits of cash credit and over draft:-
(1) Cash credit and some overdraft allow flexibility of borrowing, which depends
upon the needs of the borrower.
(2) There is no necessity of providing security and documentation again and again
for borrowing funds.
(3) This mode of borrowing is simple and elastic and meets the short term
financial needs of the business.
DISCOUNTING OF BILLS
Apart from sanctioning loans and advances, discounting of bills of exchange by bank
is another way of making funds available to the customers. Bills of exchange are negotiable
instruments which enables debtors to discharge their obligations to the creditors. Such bills of
exchange arise out of commercial transactions both in inland trade and foreign trade.
When the seller of goods has to release his dues from the buyer at a distant place
immediately or after the lapse of agreed period of time, the bill of exchange facilitates this
task with the help of banking institution. Banks invest a good percentage of their funds in
discounting bills of exchange. These bills may be payable on demand or after a stated period.
In discounting a bill, the bank pays the amount to the customer in advance, i.e. before
the due date. For this purpose, bank charges discount on the bill at a specified rate. The bill so
discounted is retained by the bank till its due date and is presented to drawer on the date of
maturity. In case the bill is dishonoured on due date the amount due on bill together with
interest and other charges is debited by the bank to the customer’s account.
To ensure the safety of funds lent, the first and most important factor considered by a
bank is the capacity of borrowers to repay the amount of loan; the bank therefore, relies
primarily on the character, capacity and financial soundness of the borrower. But the bank
can hardly afford to take any risk in this regard and hence it also has the security of tangible
asset owned by the borrower. In case the borrower fails to repay the loan, the bank can
recover the amount by attacking the assets. It can sell the assets offered as a security and
realize the amount.
Thus from the view point of security of loans, we can divide the loans into two
categories: (a) secured, and (b) unsecured.
Unsecured loans are those loans which are not covered by the security of tangible
assets. Such loans are granted to firms/institutions against the personal security of the owner,
manager or director. On the other hand, Secured loans are those which are granted against the
security of tangible assets, like stock in trade and immovable property. Thus, while granting
loan against the security of some assets, a charge is created over the assets of the borrower in
favor of bank. This enables the bank to recover the dues from the customer out of sale
proceeds of the assets in case the borrower fails to repay the loan. There are various types of
securities which may be offered against loans granted, but all of those are not acceptable to
the banks.
The types of securities generally accepted by the bank are the following:
• Life-Insurance Policy.
1. Safety
2. Liquidity
3. Profitability and
4. Security.
Safety: A bank lends what it receives from the public as deposits. The success of the
bank depends upon confidence of the depositing public. Confidence could be infused in the
depositories by the investing the money in safe and sound security. Safety depends upon:
The repaying capacity and willingness of the debtors to repay the loan with interest.
Liquidity: It refers to the ability of asset to convert into cash without loss within a
short time. The liabilities of bank are repayable on demand are at a short notice. To meet the
demand of the depositories in the time, the banks should keep its funds in liquid state. Money
locked up in the long term such as land, building, plants, machineries etc cannot be received
in bank and show less liquid.
Profitability: like all other commercial banks are run for the profit even government
owned is not exception to this. Banks earn profit to pay interest to depositories, declared
dividends to shareholders and meet establishment changes and other expenses, provide for
the reserve for bad and doubtful debts, description, maintenance of the improvement of
property owned by the bank and sufficient resource to the meet the contingent loss. So profit
is an essential consideration.
Security: consumer may offer different kinds of securities viz, land, building,
machinery, goods and raw materials to get advance. The securities of the customers are
insurance and banker can back upon than in times of necessity. Securities which could be
marketed easily, quickly and without less should be preferred.
Before sanctioning loans a banker should enquire about the purpose for which it is
needed loans for undesirable activities such as speculation and hording should be
discouraged. Banks readily allow borrowings for productive purposes. It is also equally
important on part of banks to insure that a loan is utilized for the proposed for which it is
granted so that repayment will be prompt.
Proposed of the loan has assumed a special significance in the present day concept of
banking it is equally important to insure that the loan is utilized for the proposed for which it
is granted.
Sources of repayment:
Before giving a financial accommodation, a banker should consider the source from which
repayment is promised.
Diversifications of risk:
The security conciseness of a banker and the integrity of the borrower are not adequate
factors to keep the bankers on safe side, what are important the diversifications of risk. So
that a bank should follow wise-policy for ‘do not lay all the eggs in the same basket bank
must advance moderate some to a large number of spread over a wide area and belonging to
different industries.
A sound credit is one their timely repayment is assumed. This largely depends on the
earning power of the business units. And repaying capacity of the borrowers so great
emphasis is laid on the productivity of loan. Since the banks have should earned and
additional responsibility of keeping the tempo of development of an economy. They should
consider productivity of loans as the cheap criterion for advising loan.
• Profit liability
Limitation of Loan:
• Inflexibility: Every time loan is required it is to be negotiated with the banker to avoid
its borrower, may borrow in excess of their extent requirement contingencies.
• Though loans are fixed periods: But in practice their role over, that is, they are
renewed frequently
TYPES OF LOANS:
Banks grant loans for different periods- short, medium and long-term for different purpose
broadly the loans granted by banks are classified as follows:
Bank
loans
Short-term loans: Loans are granted to meet the working capital needs of the borrowers.
These loans are granted against the security on the tangible assets mainly the movable assets
like goods and commodities, shares and debentures etc. since April 1995, the RBI has made it
mandate for the banks to grant to portion of banks credit to big customers in the forms of
loans which may be for various maturities. The RBI has also as permitted the banks to roll
over research loans i.e.to extend the loan for the another period at expire of the tender of the
first loan
Term loans: Term loans are given for medical and loan periods, and loans are used for
acquiring for fixed asset or for not modernization and expansion of the existing units. They
may also be used for working capital requirements. An important feature of the term loan is
the felt that they are repayable in yearly or half-yearly installments over a period of time.
Payment is to be made according to specified schedule, extending up to 15 years which
imposes a short off financial discipline on borrowing concern. The amortization gradually
starts two to three years after the sanction of the loan.
Bridge Loan: Bridge loan are essentially short-term loans which are granted to industrial to
meet their urgent and essential needs during the period in formalities for the availing of the
term loans sanctioned by the financial institutions are being fulfilled or necessary steps are
being taken to raise the capital market. These loans are granted by financial institutions.
Composite loan: When a loan is granted both for buying capital asset and for working capital
purposes, it is called composite loans. Such loans are granted to small borrower, such as
artisans, farmers and industries etc.
Consumption Loan: The normally banks provide loans for productive purpose only, but as an
exception loans are also granted on the limited scale to meet the medical needs or educational
expenses or expenses relating to marriages and other social care monies etc.
LOANS SCHEMES:
1. Vehicle loan
2. Machinery loan
3. Education loan
4. Consumer loan
5. Staff loan
6. Clean loan
8. Housing loan
1) Vehicle Loan:
2) Machinery loan:
This loan provides to purchase machinery. New machinery purchased and hand-over
machinery valuation loan. The machinery loan provides to partnership loan and
proprietorship firm etc.
3) Education loan:
Education loan is a better facility to the students of higher study in India or foreign. The
bank providing loan according to the students parents income. The rate of loan is different
in India and foreign. This loan is providing after standard 12th. This facility is could
facility students who want study more.
4) Consumer loan:
It is providing to purchase a daily use in the house. Banks these types of loans involve
different types of instruments like daily use of house, television, refrigerator, telephone,
computer etc.
5) Staff loan:
This loan is provided to bank staff with low rate of interest and loan margin is also favors
for the staff. This loan is provided related to employee’s salary. This loan is more benefit
to the staff and their self use.
6) Clean loan:
Personal individual loan is called clean loan on which the rate of interest is at 14% p.a.
this loan is provided to only individual person for use of personal work.
7) NSC (KVP):
RBI suggests to co-operative bank that bank take 25% of margin on national saving
certificate and does not take interest on margin. In this way up to 75% loans granted by
the bank.
8) Housing loan:
Housing loan is providing to purchase house, plats, shops, office or a building. The loan
providing to individual, partnership and proprietorship, private limited company to
customer etc.
A FFP loan is finance for professional persons. A person with the professional degree and
engaged in the professional independently for example doctors, architects, lawyer etc.
CHAPTER 2
Banking in India is originated in last decades of 18th century. The oldest bank in the
bank is existence in India is the ‘State Bank of India’; a government-owned bank that traces
its origin back to June 1806 and that is largest commercial bank in the country. Central
banking is the responsibility of the Reserve Bank of India, which in 1935 formally took over
these responsibilities from the Imperial Bank of India, relegating it to commercial banking
functions. After India’s independence in 1947, the Reserve bank was nationalized and given
broader powers. In 1969 the government nationalized the 14 largest commercial banks, the
government nationalized the six largest in 1980.
The first bank of India, General Bank of India was established in 1786. From 1786 till
today, the journey of Indian Banking system can be segregated into three distinct phases.
They are as follows
BANKING IN INDIA
BANKING DURING BRITISH PERIOD BEFORE INDEPENDENCE
• The first Joint stock Bank, namely the General Bank of India was established
in 1786.
• Later on Bank of Hindustan and Bengal Bank also came in to existence, bank
of Hindustan carried on business till 1906.
• East India Company established the following three banks, namely the Bank
of Bengal in 1809, The Bank of Bombay in 1840 and The Bank of Madras in 1843.
• They were collectively called Presidency Banks and were well functioning
independent units.
• The three banks established by the East India Company were amalgamated in
1920 and new bank called Imperial Bank of India was established.
AFTER INDEPENDENCE
• In 1955, Imperial Bank of India was nationalized and was given the name
“State Bank of India”. It was established under State Bank of India Act 1955.
• In 1960, RBI was empowered to force the compulsory merger of the weak
banks with the strong ones. This led to the reduction in the number of Banks from 566 in
1951 to about 89 in 1969.
• On July19, 1969, 14 major banks were nationalized, this raising the number of
nationalized banks to 20.
• On the suggestions of Narashiman Committee, the Banking Regulation Act
was amended in 1933 and thus the gates for the new Private sector banks opened.
Reserve Bank of India (RBI) is the Central Bank and all Banks of India are required to
follow the guidelines issued by RBI. The present structure of the Indian Banking system is
as follows:-
RESEARCH METHODOLOGY
Research is common refers to search for knowledge. It is the pursuit of truth with the
help of study, observation, composition and experiment.
Sample Design
Sample size: 150
Source of data: Both primary and secondary data used
Primary data: Filled questionnaires from 150 respondents
Secondary data: Through internet.
Sampling Plan
The following factors have to be decided within the scope of the sampling
plan.
Sampling Unit
The unit refers to the definitions of the particular person who is to be survey.
DESCRIPTIVE RESEARCH
Descriptive research includes surveys and fact-finding enquires of different kinds.
The major purpose of descriptive research of the sate of affairs as it exits at present. In social
science and business research, we quite often use the term Ex post facto research for
descriptive research studies.
SAMPLING PROCEDURE
This refers to the procedure by which the respondents should be chosen. In
order to obtain a representative sample, a probability sample of the population was drawn.
Probability sampling can be of the following types.
- Simple random sample
- Stratified random sample.
FORMATION OF QUESTIONNAIRE
Quite often the questionnaire is considered as the heart of a survey operation. Hence it
should be carefully constructed. in the words of good and Hatt, "In general, the word
questionnaire refers to a device for securing answers to questions by using a form which the
respondent fills in himself." All the questions in a questionnaire are framed with a specific
objective in mind and are placed in logical, sequential order. The questionnaire framed for the
purpose of the study consists of a limited number of questions placed in a logical order. The
questions were framed keeping in mind the educational and social background of the
companies dealers. The questions were both open and closed ended as well as multiple
choices.
STATEMENT OF PROBLEM
To find out the need of the customer and hence formulate the
strategy to level the economy in the society.
How the products are helping the customer.
Aware the Bank about the customer problems faces by the advances products
OBJECTIVES OF STUDY
Project gives a practical exposure and helps in acquiring the on road skills.
First objective is to find out the reasons for using of Advance Product from Ujjivan
To find out the services that other bank given to their customer.
To sort out the prospective leads from the data I have collected through the survey.
To build the relationship with the customers and to follow up them, make
To get more references from the customers and generate new leads by
To place from Ujjivan small finance bank Advance Product ahead of the
competitors.
To make the customer aware of the benefits of the product and convince
CHAPTER 3
COMPANY PROFILE
Ujjivan Small Finance Bank Limited is a mass market focused bank in India, catering
to financially unserved and underserved segments and committed to building financial
inclusion in the country. Our Promoter, Ujjivan Financial Services Limited (UFSL)
commenced operations as an NBFC in 2005 with the mission to provide a full range of
SJES College of Management Studies, Medahalli, Bangalore Page 20
A STUDY ON LOANS & ADVANCES AT UJJIVAN SMALL
FINANCE BANK IN CHINTAMANI
financial services to the ‘economically active poor’ who were not adequately served by
financial institutions.
Ujjivan Small Finance Bank serves over 54.7 lakh customers through 575 branches
and 17,370 employees spread across 244 districts and 24 states and union territories in India.
Gross Loan Book stands at 14,366 crore with a deposit base of 11,057 crore as of June 30,
2020. Apart from the network of branches, ATMs and Automated Cash Recyclers, we have a
phone banking unit that services customers in nine languages, a mobile banking application
that is accessible in five languages as well as internet banking facility for individual and
corporate customers.
In October 2019, Ujjivan Small Finance Bank received approval from the Securities
and Exchange Board of India to raise 1,200 crores (US$175 million) in an initial public
offering (IPO).The IPO was 166 times oversubscribed by the final day of bidding, 4
December 2019
Ujjivan SFB provides a range of products and services such as savings account, current
account, fixed deposits (FD), recurring deposits (RD), Micro Loans, Home Loans & Small
Business Loans.The bank also offers internet banking, phone banking and mobile banking
facilities to customers. Ujjivan SFB ATM is biometric enabled, thereby enabling customers
to withdraw money through biometric authentication.Customers can open their bank account
in 5–7 minutes on a hand-held device through Aadhaar enabled KYC.
Through strategic partnership with Parinaam Foundation for the formulation and
implementation of financial literacy programs such as Diksha+, and other community centric
initiatives, we aim to raise the level of financial awareness of our customers and develop a
deeper connect with the community
SWOT ANALYSIS
STRENGTHS
WEAKNESSES
2.The branches are not modernized in many cities as compared to leading firms
OPPORTUNITIES
THREATS
1.New licenses
2.Foreign players
3. Disinvestments
CHAPTER 4
The data collected during data collection process are organized and presented in a
comprehensible sequence to make them more meaningful.
PRESENTATION OF DATA
After the data has been properly organized, it is ready for presentation. There are
different modes of presentation like tables, charts etc. The main objectives of
presentation are to put collected data into an easy readable form.
ANALYSIS OF DATA
After organizing and presenting the data, the researchers then have to proceed towards
conclusion by logical inferences. The raw data is then analyzed:
INTERPRETATION
Interpretation means to bring out meaning of data or to convert mere data into
information. From the analysis of data the various conclusions are find out on the
basis of logical inferences.
CLASSIFICATION OF DATA
If refers to the process of arranging data into homogenous classes. Subsequent to the
collection of data, the results were sorted out and arranged in different categories like
Graph, Table etc.
The Scheme
Purpose
The loan will be granted for any legitimate purpose what so ever (e.g. expenses for
domestic or foreign travel, medical treatment of self or a family member, meeting any
financial liability, such as marriage of son/daughter, defraying educational expenses
of wards, meeting margins for purchase of assets etc.).
Eligibility
To be eligible one has to be a Resident Indian of National having capability to repay a
loan, except agriculturists.
Loan Amount
The personal loan limit would be determined by the income and repayment capacity
of the applicant.
Minimum: Rs.24, 000/- in metro and urban centres Rs.10, 000/- in rural/semi-urban
centres
Maximum: 12 times Net Monthly Income for salaried individuals and pensioners and
1 year's Net Annual Income in case of others, subject to a ceiling of Rs.10 lacs in all
centres
Documents Required
Important documents to be furnished while opening a Personal Loan Account:
• For existing bank customers
Passport size photograph
• From salaried individuals
Latest salary slip and Form 16
Margin
UJJIVAN does not insist on any margin amount.
Interest Rates
3% above SBAR floating i.e. 13.75% p.a.
Repayment
The loan is repayable in 48 EMI. You are allowed to pay more than the EMI if you
wish to, Without attracting any prepayment penalty.
Security NIL
Processing Fee
Processing charges are 1-2% of the loan amount. This is amongst the lowest fees in
the industry. Processing fees have to be paid up front. There are no hidden costs or
other administrative charges.
4.2 HOUSING LOAN
Home is where the heart is! At UJJIVAN, they understand this better than most – the
toil and sweat that goes into building/ buying a house and the subsequent pride and
joy of owning one. This is why UJJIVAN Housing loan schemes are designed to
make it simple for you to make a choice at least as far as financing goes.
4.2.1 UJJIVAN-Home Loans Unique features:
• No cap on maximum loan amount for purchase/ construction of house/ flat
• Option to club income of your spouse and children to compute eligible loan
amount
• Provision to club expected rent accruals from property proposed to compute
eligible loan amount
• Provision to finance cost of furnishing and consumer durables as part of
project cost Repayment permitted upto 70 years of age
Purpose:
Eligibility:
Loan Amount:
• Applicant/ any one of the applicants are aged over 21 years and upto 45 years
– 60 times Net Monthly Income (NMI) or 5 times Net Annual Income (NAI), subject
to aggregate repayment obligations not exceeding 57.50% of NMI/ NAI
• Applicant(s) aged over 45 years of age– 48 times NMI or 4 times NAI, subject
to aggregate repayment obligations not exceeding 50%of NMI/ NAI
Margin:
Processing Fee:
Prepayment Penalty:
2% of the loan prepaid if the loan is preclosed before expiry of half the original
tenure.
Security: Equitable mortgage of the property other tangible security of adequate value
like NSCs, LIC policies etc., if the property cannot be mortgaged
Moratorium:
Up to 18 months from the date of disbursement of first installment or 2 months after
final disbursement in respect of loans for construction of new house/ flat (moratorium
period will be included in the maximum repayment period)
Disbursement:
A unique product if the customers are on the lookout for a loan to purchase a plot of
land for house construction. The loan is available for a maximum amount of Rs.20
lacs* and with a comfortable repayment period of up to 15 years. Customers are also
eligible to avail another Housing Loan for construction of house on the plot financed
above with the benefit of running both the loans concurrently. (House should be
constructed within 5 years from the date of availment of ‘UJJIVAN-Realty’ Housing
Loan).
A revolutionary product designed for customers who are on the lookout for a source
of finance for a property they want to invest in without mortgaging the same. All you
have to do is pledge any financial security that you have and you will get a Home
Loan for your dream home.
It’s a must-take for those who do not want to pay stamp duty for mortgage of their
property or go through the Hassles of creation of mortgage. You there is an option to
take the loan by way of mortgage of the property and pledge financial securities in
lieu of margin money.
Home is where the heart is. At UJJIVAN, they know this better than most - the toil
and sweat that goes into building/buying a house and the subsequent pride and joy of
owning one.
This is why their housing loan schemes are designed to make it simple for you to
make a choice at least as far as financing goes.
No hidden clauses or costs or unnecessary documentation. The loans have the longest
tenors and the repayment terms are amongst the most flexible. They offer you a
totally transparent process and yes, there is no fine print. They even give you an in-
principle approval prior to identifying a house/flat, relieving you of the tension of
anticipating the approved amount.
Last, but not the least, they have specialized Housing loan branches to serve your
needs better. Their newly opened personal banking branches also specialize in this.
Why should you opt for a housing loan from State Bank of India ?
• Excellent service and lower costs. A quick survey of similar schemes available
elsewhere and you will find that UJJIVAN housing loans offer you the lowest costs.
• Lowest Equated Monthly Installments (EMI) Lowest interest rates, currently
between 7.50% pa and 8.50% p.a. on daily reducing balances. A nominal processing
fee of 0.25% will be charged. Compare this with the 1.5% - 2% charged by others.
• No hidden costs or administrative costs
• In-principle approval given prior to your identifying a house /flat, giving you
flexibility in choice.
• Complete transparency – For the stated rate of interest as 8% p.a. you pay only
8%. When others say 8.5%, you may be paying even 10% p.a., as interest may be
levied even on the amounts you have already repaid. This is because UJJIVAN
applies interest on a daily reducing balance while housing finance companies/ other
banks mostly apply interest on annual reducing balance.
Purpose
Loan can be taken for:
Eligibility
You can avail of an UJJIVAN Housing loan if you are over 21 years of age and have
steady source of income.
Documents Required
You will need to furnish the following documents along with the completed
application form:
In addition to the above mandatory documents, you are also required to furnish one or
more of the following documents wherever applicable: •
Loan Amount
While there is no ceiling to the amount of loan we sanction the actual loan amount is
determined on the basis of repayment capacity taking into account your income, age,
assets and liabilities. As a rule of thumb - Upto 60 times the net monthly income will
be sanctioned depending upon your age. Usually, your spouse's income and the
expected rental would also be taken into account.
Margin
The customer’s contribution (margin) for the housing loan is as under: 15% for new
house/ flat 20% for old house/ flat 20% for repairs and renovation.
Interest
Avail of the lowest interest rates in the market. We give you the option of locking in
the low interest rates for the full tenure of the loan or keeping your interest option
open by linking it to the Bank's Term Lending rate. Therefore, you could either avail
the loan at a fixed rate of interest, which stays constant throughout the loan period, or
at a floating rate of interest where the interest changes (increases or decreases)
depending on changes in the Bank's Term Lending Rate.
Repayment
In 60 Equated Monthly Installments. Our repayment terms are amongst the most
flexible in the market. Depending on your age and capacity to repay, you could pay
back the loan in easy installments. You may prepay at will without attracting any
penalty, or pay more than your stipulated monthly installment at any time, depending
upon availability of funds with you. However, in case of takeover of loan by other
banks/finance companies, prepayment penalty of 2% may be levied.
If you have already taken a housing loan from any other bank/financial institution and
wish to benefit from our low rates of interest, we can take over your existing loan.
In-principle Approval
They also give in-principle approvals based on your income and capacity to repay, to
enable you to identify a house/ flat with full confidence.
Do you want funds readily available to you whenever you desire to go on a vacation
that you plan with your family or friends? UJJIVAN’s Easy Travel Loan is the
answer to your questions. UJJIVAN Advantages:
Purpose
To meet any kind of Travel expense such as cost of ticket, hotel stay, visa, airport tax,
purchase of Basic Travel Quota, etc.
Eligibility
You are eligible if you are:
• A State/Central Govt. Employee, employee of public sector
undertaking/reputed profit making public limited company, reputed institutions, MNC
with a minimum service experience of 2 years.
• A self employed professional, with a minimum 2 years standing. You should
be 60 years of age or less.
Salient Features
Loan Amount
Your personal loan limit would be determined by your income and repayment
capacity. Minimum: Rs.24,000/-
Maximum : 12 times Net Monthly Income for salaried individuals and pensioners and
1 year's net annual income in case of self employed professionals with the under
noted ceilings. For Salaried individuals and self employed professionals: Rs.2.5 lacs
(Rs.5 lacs in New Delhi, Chennai, Bangalore, Hyderabad, Mumbai and Kolkata and
can be further increased to Rs.10 lacs if the self-employed professional maintains a
satisfactorily conducted account with our branch or the salary of individual is
regularly credited to their account with our Bank).
For pensioners: Rs.1.5 lacs. For members of business community: Rs.3.0 lac or 1
year’s net annual profit during the preceding financial year, whichever is lower.
Documents Required
For existing bank customers
• Copy of Passport (for overseas travelers)
• Copies of Rail-tickets/Bus tickets/Air tickets and visas(for overseas travelers)
• Copy of consolidated invoice containing ticket charges, insurance charges,
other sundry charges, etc.
• Passport size photograph
• For salaried individuals Latest salary slip and Form 16, for Self-employed
individuals and Professionals IT returns for the last two financial years.
• Proof of Professional Qualification (for self employed professionals)
• Copy of highest Professional degree held
Interest Rates
3% above SBAR Floating i.e.13.75% p.a.
Repayment
The loan is repayable in a maximum of 48 EMI. You are allowed to pay more than the
EMI if you wish to, without attracting any prepayment penalty.
Security
No security is needed except in the case of members of business community where
suitable third party guarantee is required.
4.4 CAR LOAN
Move ahead in life with UJJIVAN Car Loans! If you have been putting off purchasing
that car, they invite you to go through their Car Loans scheme.
Low interest rates, easy repayment options, total transparency, Low processing
charges, finance to include vehicle registration charges, insurance and one time road
tax.
Well, what are you waiting for? Just step in to any of our branches (more than 6000)
that offer Car Loans or our Personal Banking Branches and give wheels to your
desire!
• A new car, jeep, Multi Utility Vehicle (MUV) or SUV (any make or model)
• An old car / jeep / MUV /SUV (not more than 5 years old). (any make or
model)
UJJIVAN Advantages:
Excellent service and lower costs. A quick survey of similar schemes available
elsewhere and you will find that UJJIVAN Car Loans for new and old vehicles offer
you
thereafter. When you pay interest on an annual reducing balance, as charged by many
other companies/banks, the interest amount for the coming year is determined on the
amount outstanding at the beginning of the year. You continue to pay interest even on
the amounts you repay during the year.
Purpose
You can take finance for A new car, jeep or Multi Utility Vehicles (MUVs) An old
car / jeep (not more than 5 years old).(Any make or model)
Takeover of existing loan from other Bank/Financial institution (Conditions apply)
Eligibility
be sanctioned. If married, your spouse's income could also be considered provided the
spouse guarantees the loan the loan amount includes finance for one-time road tax,
registration and insurance! Loan amount for used cars is subject to a maximum limit
of Rs. 15 lacs.
Documents Required
You would need to submit only the following documents along with the completed
application form if you are an existing UJJIVAN account holder:
If you are not an account holder with UJJIVAN you would also need to furnish
documents that establish your identity and give proof of residence.
Margin
New/used vehicles
Repayment
You enjoy the longest repayment period in the industry with us. Repayment period for
new vehicles: Maximum of 84 months.
Repayment period for old vehicles: Up to 84 months from the date of original
purchase of the vehicle.
Processing Fee
0.50% of Loan amount, to be paid upfront
A term loan granted to Indian Nationals for pursuing higher education in India or
abroad where admission has been secured.
Eligible Courses
All courses having employment prospects are eligible.
Amount of Loan
For studies in India, maximum Rs. 10 lacs, Studies abroad, maximum Rs. 20 lacs
Interest Rate
Processing Fees
Repayment Tenure
Repayment will commence one year after completion of course or 6 months after
securing a job, whichever is earlier.
Margin
Documentation Required
A dream comes true. An ALL PURPOSE LOAN for anything that life throws up at
you!! Do you need funds for a Marriage ceremony, want to take your family to a well-
deserved holiday or for a sudden medical emergency? You have some property, but
would rather not sell it? Then why not avail of this ALL PURPOSE LOAN from
UJJIVAN? UJJIVAN now makes it very much possible for you to only keep your
property but also have liquid funds.
UJJIVAN Advantage
1) An individual who is
a) An Employee or
b) A Professional, self-employed or an income tax assesse or
• 24 times the net monthly income of salaried persons (Net of all deductions
including TDS) OR
• 2 times the net annual income of others (income as per latest IT return less
taxes payable)
Margin
we will finance up to 75% of the market value of your property.
Interest
Repayment
Maximum of 60 equated monthly instalments, upto 120 months for salaried
individuals with check-off facility. You could opt to divert any surplus funds towards
prepayment of the loan without attracting any penalty.
If you are a Central or State Government pensioner drawing your pension through one
of our branches and are not more than 72 years of age, you can avail of a loan from
your branch to meet your personal expenses. We understand you may have an urgent
or unexpected need for funds or a family obligation to be fulfilled and appreciate your
association with us. You can avail a loan of up to a maximum of 12 months pension,
subject to a ceiling of Rs.1,00,000. The documentation is easy.
The loan may be repaid over 5 years and will carry a low interest rate of 10.75% p.a.
There are no processing fees, no hidden costs and no prepayment penalties.
Eligibility:
All Central and State Government pensioners, whose pension accounts are maintained
by our branches, The pensioner should not be more than 72 years of age.
Purpose:
To meet personal expenses.
Loan Amount:
A maximum of 12 months pension with a ceiling of Rs.1,00,000/-
Margin:
Nil
Security:
The spouse eligible for family pension should guarantee the loan or any other family
member or a third party worth the loan amount.
Repayment:
60 Equated Monthly Installments (EMIs) – if age of Pensioner at the time of loan
sanction is up to 70 years
48 Equated Monthly Installments (EMIs) – if age of Pensioner at the time of sanction
is between 70 – 72 years
Rate of Interest:
0.50% above SBAR floating i.e. 11.25% p.a.
4.8 LOAN FOR EARNEST MONEY DEPOSIT
This product addresses the financial requirements towards Earnest Money Deposit to
book residential plots/ built-up houses/ flats being sold by Govt. Housing Agencies,
Urban Development Authorities like PUDA, HUDA and Housing Boards.
Scheme highlights
Eligibility
• Rs.100,000.
• 90% of application money, or
• 10 times Net Monthly Income of the applicant Whichever is the least, subject
to the following:
o One person can be financed only for one application at any point of time
o In case of applications in more than one name, incomes of all the applicants
may be taken into account
Security
Repayment
Rate of Interest
Disbursement
The loan would be disbursed by issuance of draft/ banker’s cheque favouring the
concerned Government Agency.
Documents
• Proof of Identity*
- Voters’ I-card/ Passport/ Driving License/ PAN Card etc.
• Proof of residence*
- Passport/ Driving License/ PAN Card/ Ration Card
- Any other satisfactory proof of residence
• Proof of Income
Avail of UJJIVAN's Festival Loan and bring back the cheer and celebrate in style!!!
Hurry, the gifts and the sweets are waiting….
UJJIVAN offers you the unique facility of Festival Loans to help you meet any kind
of festival related expenses.
Purpose
To meet any kind of festival related expenses.
Eligibility
You are eligible to avail a Festival Loan if you are:
An Employee of Govt., PSUs, profit making public/private limited companies/
institutions etc with a minimum of 2 years service OR
Self employed person with minimum 3 years standing/experience OR
A person having regular source of income from verifiable channels like Pension and
interest from TDRs/NSCs/Govt. Securities etc
You have a net monthly income of Rs.3000/- and above.
Your spouse's income can also be considered in calculating the loan amount provided
he/she guarantees the loan or the loan is taken jointly.
Loan Amount
Your festival loan limit would be determined by your income and repayment capacity.
Minimum : Rs.5000/-
Maximum : 4 times your Net Monthly Income, subject to a ceiling of Rs.50,000/-.
Documents Required
Passport Size Photograph
Proof of official address for self employed individuals and professionals,
This can include shop and establishment certificate/Lease deed/Telephone Bill.
Latest Salary Slip and Form 16, in the case of salaried persons IT returns for the last
two financial years, in the case of self employed individuals and professionals
Interest
3% above SBAR Floating i.e. 13.75% p.a
Repayment
You can repay the loan over a period of 12 months through Equated Monthly
Installments (EMI). Should you wish to deploy your surplus funds towards
prepayment of the loan, feel free to do so without any prepayment penalty.
Security
Personal guarantee of the spouse or any other person of adequate worth where check
off facility is not available.
Processing Fee
You need to pay only a nominal processing fee of 1.10% of the loan amount.
RESPONSESOF PEOPLE IN %
4%
10% 6%
UJJI
ICICI
HDFC
80% OTHER
Interpretation:
It has been observed that approximately 80% correspondents are using the service
of UJJIVAN for their daily transaction, around 10% of people are using ICICI
Bank for their transaction and only 4% & 6% of people are using HDFC & other
Bank service respectively in Bangalore. It also shows that UJJIVAN have the
highest market position in Bangalore as per my sample.
NO 18% (9)
TOTAL NO OF PEOPLE 50
NO 18%
YES 82%
Interpretation:
From the above data it is clear that most of the customers (around 82%) of
Bangalore have the idea about the product & services of UJJIVAN, the rest
18% have the idea about the product they are using. In this 18% most of the
people are from typical rural area.
Q3. If yes are you aware of the advance products (Loan segments) of
UJJIVAN?
NO 6% (3)
TOTAL NO OF PEOPLE 50
% OF PEOPLE
6%
YES
NO
94%
Interpretation:
It is clear that most of the people have the idea about the advance
product of UJJIVAN. Almost all the 95% people who have the idea
about the advance product are the user of UJJIVAN product & service.
ICICI 8% (4)
HDFC 6% (3)
OTHER 4% (2)
TOTAL NO OF PEOPLE 50
8%
UJJIVA
N
ICICI
82% HDFC
OTHER
Interpretation:
Q5. If you prefer UJJIVAN for taking loan than what influence you to
take Loan from UJJIVAN?
As: Most of the people said that they prefer UJJIVAN for taking loan
because of the transparency and the lowest interest rate for any kind
of loan product. And it is easy to get loan from UJJIVAN as compare to
other bank because less paper work is require and as it is the largest
govt. bank in India and having partnership with RBI (Reserve Bank of
SJES College of Management Studies, Medahalli, Bangalore Page 52
A STUDY ON LOANS & ADVANCES AT UJJIVAN SMALL
FINANCE BANK IN CHINTAMANI
OTHER 5% (2)
TOTAL NO OF PEOPLE 40
8% 5%
HOME LOAN
13%
EDUCATIONAL LOAN
20% 55%
CAR LOAN
PERSONAL LOAN
OTHER
Interpretation:
From the sample size 82% of people are using the UJJIVAN loan
product. From the 40 people 55% of people took home loan from
UJJIVAN. 20% of people took education loan for their children, 13% of
people took car loan from UJJIVAN. Some of the customer took 2 type
of loan from UJJIVAN like both car & educational loan and home & car
loan. 8% of people took personal loan. And 5% of people took other
loans.
Bad 0% (0)
Satisfactory 6% (3)
0%
6%
40% BAD
SATISFACTORY
54%
GOOD
EXCELLENT
Interpretation:
From this it is clear that the service provide by UJJIVAN in its advance
product is good in between the customer. All of them satisfy with the
product provide by UJJIVAN. 55% of people said that the service
provide by UJJIVAN is good & 43% said it is excellent & just 2% of
people said that it is satisfactory.
Interpretation:
Most of the people like the attractive interest rate & longer
repayment period. It’s easier for people to repay the whole loan
amount with its interest with low interest rate and with longer
repayment period.
16%
30%
Less than 1 year
1 to 5 years
34%
3 to 5 years
20%
More than 5 years
Interpretation:
From this we get to know that 34% of people like to repay their loan
within 1 to 5 years. And 30% person who took Home loan they prefer
More than 5 years. And 20% of people who runs small business like to
repay the loan amount in 3 to 5 years.
payments in installments
20%
46%
Monthly
Quarterly
34% Annually
Interpretation:
Form this sample size we got to know that 46% of people prefer to
repay their Loans in Annual instalments basis. 34% and 20% of people
like to repay the loan amounts in Quarterly and Monthly respectively.
Total no of people 50
32%
yes
68% no
Interpretation:
In this survey we got to know that 68% of the people are assessed to
TAX and TAX helps in growth of the country’s economy. 32% of people
are not assessed to TAX. From this we got to know that there is more
Tax payer in Bangalore.
No 9% (3)
Total no of people (assessed to Tax) 34
9%
Yes No
91%
Interpretation:
From this we get to know that 91% of people are aware of the Tax
deduction on the loan up to a certain limit. The bank helps the people
in all time in various ways.
No 48% (24)
Total no of people 50
48%
52%
Yes
No
Interpretation:
In this sample size this shows that the people are not much aware
of new product of loan. 52% of people are aware of new loan
product and around 48% of people are not aware of such product.
Total no of people 50
Yes
76% No
Interpretation:
Most of the people think that the interest rates on Loans are
comparatively less than the other banks. So they prefer to take loan
Very Good 6 30
Good 9 45
Normal 4 20
Not Good 1 5
Total 20 100
Very Good
Good
Normal
Not Good
Interpretation:
Yes 14 70
No 6 30
Total 20 100
Yes
No
Interpretation:
Yes 16 80
No 4 20
Total 20 100
Interpretation:
Good
OK
Poor
Interpretation:
Out of 20 respondents, 50% of respondents’ opinions about customer help desk is good, 40% of
respondents told ok and 10% of respondents told poor. Major of the respondents told they are
happy regarding the information and service provided by customer help desk
CHAPTER 5
FINDINGS:
Analysis of a research project is based on the primary data and secondary data which
is being collected from various sources to take out some conclusions of the research study
being taken.
From this project it is found that UJJIVAN advance product having the 1st
place in the market at Bangalore, there is a great opportunity to compete with ICICI Bank &
to retain its customer by fulfilling the requirement of customer in UJJIVAN advance product.
advance product of UJJIVAN and 18% are not using any type of advance product of
UJJIVAN in Bangalore.
All of UJJIVAN customers are satisfied with the services provided by the
bank.
Many of these customers satisfied with the low interest rate and longer
Many customers have no time to call customer care so that they are not able to
Most customers are shifted from other bank’s advance product to UJJIVAN
Government employees are more concern than private employees for advance
product.
Majority of respondents told they have satisfaction with the service of the
Most of the customers told they dial to customer help disk for product related
enquiry.
SUGGESTIONS:
Customer awareness program is required so that more people should attract towards
advance product.
If there are any kind of hidden charges than that must disclose to customer before
Must take some steps so that customers can get their loan in time. Like phone
verification by customer care that one customer is got their loan on time or not .It
Advance product selling agents must not give any type of wrong information
Customer care should more concern about the fastest settlement of customer
problems.
It is the duty of the bank to disclose all the material facts regarding advance
product, like interest charged, repayment period, other types of charges, etc.
CONCLUSION
As there are lots of local and foreign banks in India, UJJIVAN Bank is promising
commercial Bank among them. In this competitive market UJJIVAN Bank has to compete
the others commercial banks. At the end of the report it can be mentioned that, Economic
emancipation is our largest victory. Better banking system can pave the way of this greatest
achievement. UJJIVAN bank has been playing a very vital role in this arena.
. Contribution of this bank for our industrial development was unparalleled. It needs
some modification which is the demand of the time. So, necessary steps such as reforms,
restructuring should be taken to run the banking system smoothly and efficiently as we know
it very well that a sound banking system can ensure a strong financial structure in a country.
BIBLIOGRAPHY
BOOKS:-
MAGAZINES:-
WEB:-
1) https://www.ujjivansfb.in
2) www.financialexpress.com
3) www.irdaindia.com
4) www.google.com
5) www.indiacore.com
ANNEXURE
QUESTIONNAIRE
1 NAME : INCOME :
AGE : SEX :
OCCUPATION : PHONE NO. :
Q5. If you prefer UJJIVAN for LOAN than what influences you to take a
Loan from UJJIVAN?
(e) OTHERS [ ]
Q7. What do you feel about the services providing by UJJIVAN on Advance
products?
Q14. Is the Rate of Interest on loans are very low compared to other banks?
(a) High [ ] (b) Medium [ ]
(c) Low [ ]