PSB Training Project

8/8/2019 PSB Training Project

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PROJECT REPORT

Analysis of various loansoffered by Punjab & Sind

Bank

Submitted by-

Sony Bagga

(MBA-Finance)

Under Guidance of-

Prof. Abhishek jain

iperInstitute of Professional Education and Research,

Bhopal

October 2010


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Preface

A likely impossibility is always preferable to an unconvincing possibility

This idea is the simplified version to provide the inspiration to the approach performed

for the project .The project is based on the data collection and thereby developing a

hypothesis to provide direction to reach a rational conclusion. Different statistical tools

have been applied like consolidated statement, comparative statement, Trend analysis,

common size statement, correlation and t-test. This assignment inspires you to reach to

a logical result giving an opportunity to reach next dimension of analysis and know-how

about the economical status around your city, perception of people in your city towards

financial development and risk aversion.

The project on completion clearly explains you that the statistical method essentiallydepends on having furnished, not merely a list of the significant causes, which is correct

so far as it goes, but a complete list.

For example, suppose three factors are taken into account, there must be no other

significant factor. If there is a further factor, not taken account of, then the method is not

able to discover the relative quantitative importance of the first three.

If so, this means that the method is only applicable where is able to provide beforehand

a correct and indubitably complete analysis of the significant factors. The method is

neither one of discovery nor of criticism.


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Acknowledgement

This project would not have been possible without the help of Prof.

Abhishek Jain, my project guide who has been co-operative extensively. As

I faced various problems with my topic of project because of the

unavailability of information, Prof. Abhishek Jain has given me incredible

motivational support and helped in successful completion of this project.

This project also involves the dedication of my friends who have helped me

in gathering data.

A special thanks to Mr. Daljit Singh, who has helped me in getting thefinancial information of the bank which is otherwise difficult to get.

Last but not the least, Microsoft Office 2007 made the task easier.

Sony Bagga

MBA (Finance)

IPER, Bhopal


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declaration

I Sony Bagga, hereby declare that this research report on Analysis of

various loans offered by Punjab & Sind Bank compiled and submittedby me is an original work concluded under the guidance of Prof. Abhishek

Jain.

It is work done by me as partial fulfillment of the degree in MBA (Finance).

No part of this research will be published or copied for any purpose.

Place- Bhopal Signature

October10

(Sony Bagga)


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contents

Preface

Acknowledgement

Declaration

Chapter-1--Conceptual

Overview.......................................................................7-8

Chapter-2--Research

Methodology...............................................................9-14

o 2.1-Objectives of the study 10

o 2.2-Methodology 11

o 2.3-Significance of the topic 12

o 2.4-Hypothesis 13

o 2.5-Limitations 14

Chapter-3--Theoretical

background...............................................................15-32

o 3.1- Profile of the organization 16-17

o 3.2- Important schemes of the Bank...18-19

o 3.3- Special Tie-ups .20


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o 3.4- P & S Bank loan schemes .21-32

Chapter-4--Data

Analysis......................................................................33-79

Chapter-5 Major Findings &

Suggestions...............................................................80-83

Bibliography..............................................................84

Annexure.................................................................. 85-87


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Chapter - 1Conceptual

overview


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A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of

financial assets over time, between the lenderand the borrower.

The borrower initially receives an amount of money from the lender, which they pay

back, usually but not always in regular installments, to the lender. This service is

generally provided at a cost, referred to as interest on the debt. A borrower may be

subject to certain restrictions known as loan covenants under the terms of the loan.

Acting as a provider of loans is one of the principal tasks forfinancial institutions. For

other institutions, issuing ofdebt contracts such as bonds is a typical source of funding.Bank loans and credit are one way to increase the money supply.

Legally, a loan is a contractual promise of a debtor to repay a sum of money in

exchange for the promise of a creditor to give another sum of money.

Facts about the loan

Bank plays a very important role in providing the loan of different types. One should

know very clearly that which cheap loans are good for the person.

Advance loans are also known as pay day loans, these loans are for the purpose to hide

the expenses related with the borrower till the pay day, this is also known as cash

advances.

If one want to purchase a particular car, house etc. then instant loans is very suitable

and appropriate. The information about the low loans is available on the internet and the

people should mark the one which is appropriate for meeting the requirements.

Loans are now a days very essential for the survival, as we can see that everybody is

taking loan for the following purposes and these are as follows

To Buy A House

To Buy Different Products Like Home Appliances

To Buy Property

To Buy The Transport Etc
http://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Assethttp://en.wiktionary.org/wiki/lenderhttp://en.wiktionary.org/wiki/borrowerhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Money_supplyhttp://en.wikipedia.org/wiki/Money_supplyhttp://www.takebankloan.com/bank-loans.htmhttp://www.takebankloan.com/loans.htmhttp://www.takebankloan.com/car-loans.htmhttp://www.takebankloan.com/home-loans.htmhttp://en.wikipedia.org/wiki/Assethttp://en.wiktionary.org/wiki/lenderhttp://en.wiktionary.org/wiki/borrowerhttp://en.wikipedia.org/wiki/Moneyhttp://en.wikipedia.org/wiki/Interesthttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Loan_covenanthttp://en.wikipedia.org/wiki/Financial_institutionhttp://en.wikipedia.org/wiki/Debthttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Money_supplyhttp://www.takebankloan.com/bank-loans.htmhttp://www.takebankloan.com/loans.htmhttp://www.takebankloan.com/car-loans.htmhttp://www.takebankloan.com/home-loans.htmhttp://en.wikipedia.org/wiki/Debt


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Best loan is the one on which the interest rate is not very much and it is in relation with

the buying power of the customer.

These loans provide the benefits to the people in many ways; the loans provide the

opportunity for the business people to do something good in the corporate sector.

Chapter-2

Research

methodology


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2.1-Objective of study

Primary objective

To study the Analysis of Loans provided by P & SB.

Secondary objective

1. To compare the various loans provided by P & SB such as-

Housing loan

Education loan

Personal loan

Business loan

Auto / Conveyance loan

Consumer loan

2. To study the trend analysis of various loan schemes.

3. To find out the preference of customers for various loans by getting

questionnaire filled in through respondents.

4. To study the comparative statement of P & SB loans.


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5. To study the common size statement of P & SB loans.

6. To find out whether the hypothesis taken about the acceptance of loans is

correct or not.

2.2- Methodology

Sources of Information

Primary source

Mr. Daljit Singh - Senior Manager of P & S Bank Zonal office, Bhopal

Questionnaire

Secondary Source

o PSB pamphlets

o Books

o Journals

o Magazines

o Newspapers

o Internet

Sampling Method

Random & Judgment Sampling

Sampling Size

50

Tools to be used for analysis & information

Percentage

s

3- D Pie-

charts

Bar-graphs


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Statistical tool

Trend Analysis

Common size statement

Consolidated Statement

Comparative statement

Correlation

t-test


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2.3- significance of the topic

It's important to know all the ins and outs of a loan. In truth not many people can

purchase everything, whether it is a house, car or washing machine without taking

some form of a loan. It goes without saying that loan has eventually become popular

among general public. Virtually everybody who purchases something does so with

the use of a mortgage. Whatever type of loan you eventually decide to take,

remember that this should be made only after a market survey. The reason is that

the loan is something we have to usually carry with us for a great part of our lives.

Hence the decision when and when not to take such a loan is very serious. The

answer is to take a loan if you have to only when you can pay it all back the moment

you feel you want to.

Justification of study

The analysis of various types of loan provided by P & SB helped in

distinguishing various schemes. This includes quantum of finance, margin

asked, rate of interest, processing fee, security to be given etc. Thus one can

decide upon whether the schemes comply with their requirement or not.

Importance to the Organization

A detailed analysis of loans will also benefit the organization to point out its

shortcoming and overcome it to fulfill the requirement of its customers. This is

done by making consolidated statementand plotting out the trends of various

loans and comparing loans. Questionnaire helped in adjudging the satisfaction

level and overall rating of the services offered by the bank.


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2.4- Hypothesis

Whether the acceptance of loan by the public depends

upon various loan schemes offered by the bank.


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2.5- Limitations

Time was the major factor of limitation due to which detailed analysis of the

loans could not be done.

Sample size was reduced from 100 to 50 as it was difficult to find thecustomers of Punjab & Sind Bank.

Access to information was another major limitation as the Bank was notdisclosing much of their financial information.

Behavior of respondents was not as expected because of their unwillingnessto fill in the questionnaire.

Change of project topic in the midst of project making due to unavailability ofinformation from former company.

There were no existing facts about the project. No work on this topic was doneearlier, so it was a fresh start and required lots of brainstorming.


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Chapter - 3

Theoretical

background


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3.1- Profile of Organization

Punjab & Sind Bank

(A Govt. of India Undertaking)

HISTORY

It was in the year1908, when a humble idea to uplift the poorest of poor of the land

culminated in the birth of Punjab & Sind Bank with the far-sighted vision of luminaries

like Bhai Vir Singh, Sir Sunder Singh Majitha and Sardar Tarlochan Singh. They

enjoyed the highest respect with the people of Punjab. It is the first bank in

Northern India to get ISO 9002 certification for its selected branches. The totalbusiness of the Bank stood at Rs. 200525 millions.

The chairman & Managing Director of the bank is Mr. R.P.Singh. The senior

manager Bhopal Zonal office is Mr. Daljit Singh. The Banking Ombudsman of

Bhopalis Shri B.P.Kanungo (Madhya Pradesh & Chhattisgarh)

Punjab & Sind Bank has 760 branches and 131 extension counters. It has

opened an exclusive Housing Finance Branch in order to cater the credit need of the

house aspirants. To groom the youngsters, it has its own Hockey Academy at

Jalandhar.

PSB has been restructuring, closing or relocating underperforming branches to

improve profits. It has asked the Indian government, its owner, to grant it an initial

public offering.


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VISION & MISSION

Corporate Vision

We envision emerging as a strong vibrant Bank through synchronization of the

human, financial and technological resources.

Corporate Mission

o To put in place the effective Risk Management and Internal Control Systems.

o To adopt high-level technology standards.

o To strive to achieve excellence in Customer Service.

o To achieve the highest standards of transparency and accountability in the

conduct of banking business.

o To adopt professional approach in effectively managing financial as well as

non-financial risks.

o To maximize profitability and profits of the Bank with due compliance of

prudential guidelines.

o To maximize competitive risk adjusted return on capital.


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3.2- important schemes of the bank

Credit Facilities for Agriculturists

There are number of credit schemes for farmers which are liberally available

to our rural and semi urban branches. The Bank has very attractive Kisan Credit Card Scheme for meeting the

credit needs of the farmers with provision of personal accident insurance

coverage of KCC holders.

The Bank has introduced a unique P&S Bank Diamond Krishi Card(DKC)

Scheme to provide more credit and better facilities to A Class farmers.

For tractor financing Bank has made TIE-UP arrangement with PunjabTractor, Eicher Tractor, Bajaj Tempo and Escorts whereby borrower getsincentives.

Small Scale Industries

We extend credit to SSI for meeting financial requirements for purchase of:

Machinery and equipment For construction of building

For working capital requirements. LUCC/KVIC Scheme

The bank encourages landing under KVIC Scheme and other Govt.

sponsored schemes. We have introduced LAGHU UDYAMI CREDIT CARD

SCHEME (LUCC) for working capital loan.

ACC Scheme

Under Artisans credit card scheme hassle free credit facility up to Rs. 2.0 lac

is provided to artisans for their investments needs as well as working capital

requirement.

Housing Finance

We have very liberal policy for housing finance to the members of the public.

Car Loan

Under this scheme a borrower can get a loan to buy a car on very attractive

terms for personal use.

Professional Loan

A loan for professional like Doctors, Engineers, Chartered Accountants,

Lawyers, Architects, etc. to meet their professional needs is given. Educational Loan

To encourage the youth in attaining expertise in educational and professional

fields, our bank is making available finance.

Loan against own Deposit/Govt. Securities

We offer loan against bank's own deposit and Govt. Securities like NSCs,

IVP/KVC, etc., for personal use or business purpose.

Personal Clean Loan Facility

We offer personal clean loan facility to officials of Govt. and Public sector

undertaking, local bodies, reorganized universities and schools run byGovt./Local bodies with confirmed service of at least 5 years.


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Clean Loan Scheme for retired personnel/pensioners

Who have retired from Central/State Govt. or any PSU and should be drawing

his/her pension through our bank.

ODP Scheme for traders/retailers

Under this scheme credit is available to traders/retail traders who are inbusiness for at least 5 years.

Loan against rent receivables

We offer this scheme to land lords/owners of commercial, residential property

who have rented their premises to Govt. Deptt./PSUs/Pvt. Ltd.

ODP Scheme for Contractors

Who are registered and are income tax payee, having minimum three years of

experience in his business (Contractor ship).

Festival Loan Scheme

Under festival loan scheme clean loans are granted.

Udyogini Scheme

Under udyogini scheme credit facilities are granted to women entrepreneurs to

avail the loans on liberal terms and exclusive catering of credit under Direct

agriculture activities.

Club Loan Scheme

Under club loan scheme employees of reputed clubs in metropolitan/urban

centres are granted credit facility for purchase of consumer items/for personal

use. Golden Jubilee Rural Housing Scheme (GJRHS)

Under this scheme, borrower residing in rural/semi urban areas can avail loan.

Swaranjayanti Gram Swarozgar Yojana (SGSY)

Under this scheme, the persons below the BPL level such as rural poor land,

land less educated unemployment, rural artisans, disabled handicapped.

Prime Minister Rozgar Yojana (PMRY)

The objective of the scheme is to provide sustained employment to educated

unemployed urban youth in micro enterprises.

Differential Rate of Interest (DRI) Scheme

This scheme is to assist poorest of the poor so as to bring them above BPL.


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3.3- special tie-ups

PSB ICICI BANK CREDIT CARD

The "PUNJAB & SIND BANK-ICICI BANK" Co-branded Credit Card will help

not only in retaining the existing clientele but also help in tapping the new

customers. It will also help in increasing the income by way of

issuance/renewal fees, commission on usage and fulfillment charges. The

credit card account will be maintained by ICICI Bank. The ICICI Bank will

provide all operational services for the credit card covering periodical bills,

sending statement, collection, payments and processing of charges etc. The

ICICI bank assumes the responsibility for collection, recovery of all charges

and fees due by the co-branded card member in respect of co-branded credit

card.

PSB AVIVA ALLIANZ INSURANCE

Punjab & Sind Bank has special tie-up arrangements for Non Life insurance

business with M/s Bajaj Allianz General Insurance Company and Life

Insurance business arrangements with M/s Aviva Life Insurance Company

India Pvt. Ltd. for providing its valued customers all the insurance related

services under one roof. The Bank has established insurance desks

throughout the country at the following branches where Insurance Officers areposted and have also allotted cluster of surrounding branches.

Thus Punjab & Sind Bank offers a wide variety of services and provides loans

according to individual requirements.


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3.4 p & s bank loan schemes

HOUSING LOANSBank's Housing Loan Scheme facilitates for purchase of Plot and for Construction/

Acquisition/ Purchase/ Extension/ Repair / Renovation.

Eligibility

Individuals, Group of individuals, and individual members of Co-operative

housing societies are eligible under the scheme. Maximum age limit of the

borrower to be as under-

For salaried class 60 years

For salaried class ( Pensionable) 65 years

For salaried class, pensionable and major son (earning member) stands

as co-borrower 15 years repayment irrespective of date of retirement.

For other than salaried class 65 years

In case of salaried class pensionable and major son (earning member) stands as co-

borrower the income of the co-borrower can be clubbed / considered for computing

the eligibility of repayment.

Quantum of Finance Upto Rs 150 Lacs.

Margin

For construction of house or purchase of house / flat - 25% of the value of

property including registration charges / stamp duties.

For carrying out repairs / renovation / additions / alterations to existing house /

flat- 25% of estimated cost

For purchase of plot margin shall be 50% of the cost of land / plot.

Rate of interest

Category For 5 Years For 10 Years For

20 Years

Up to Rs.20lac BPLR (-) 3.50% BPLR (-) 3.25%

BPLR (-) 2.50%


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Above Rs.20lac BPLR (-) 2.50% BPLR (-) 1.50%

BPLR(-)1.50%

Additional interest of 0.50% for loans sanctioned above Rs.20.0 lac.

Processing fee

0.50% of the sanctioned amount .Maxm.Rs.10,000/-

Processing fee is exempted for Central/ State Govt/ P.S.U. employees.

Security

The security for the loan shall be first charge by way of equitable / registered

mortgage of the property. The title of the property must be clear , marketable

and free from encumbrance.

If an intending borrower who has purchased / has entered into an agreement

to buy housing property on power of attorney basis offers sufficient collateral

in the shape of equitable mortgage of any other property and / or Govt.Security (ies), the same may be considered and the property / security

obtained at the time of sanction may be released after obtaining the equitable

mortgage of Housing property financed which shall remain the primary

security for the loan. During the intervening period the property financed by

the bank shall remain charged to the bank.

Repayment

The loan be allowed only in the shape of term loans for a maximum tenors of

20 years with the following criteria:

For salaried class Loan to be adjusted up to the age of 60 years

For salaried class (pensionable) Loan to be adjusted up to the age of 65

years

For salaried class, pensionable and major son (earning member) stands

as co-borrower 15 years repayment irrespective of date of retirement

For other than salaried class Loan to be adjusted up to the age of 65 years

Prepayment

Prepayment charges will be @ 1.0 % of the balance outstanding on the date of

adjustment if the account is adjusted through takeover of loan by another bank.No pre-payment charge be levied, if the borrower adjust the account in full and

final before scheduled time from his own verifiable legitimate sources i.e. on

receipt of retirement benefits, maturity proceeds of NSC , LIC .etc

Guarantee In case of PSU / Govt. employees where EMI is paid through salary deduction

guarantee of spouse. In case the guarantee of spouse is not available then

suitable third party guarantee required.

In all other cases, as far as possible, one more guarantee of substantial

means in addition to the guarantee of spouse / suitable guarantee.


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Personal Loan

To meet any genuine personal credit requirement viz for domestic consumption,Medical expenses, Marriage, Travel, Social ceremonies etc.

Eligibility

Employees of Central / State Govt., PSUs ,Local Registered Bodies,

universities recognized by U.G.C. ,Schools/ colleges run by Govt. or localbodies with confirmed service of 3 years Professionals / Self employed ( like

Doctors , Engineers , Architects & CAs ) , Employees of Bank's corporate

clients , salaried employees of reputed companies. If the spouse is working in

Govt. Deptt / Public Sector Undertaking /any other organization the income of

spouse may be clubbed for availing the said loan.

Existing borrowers of the Bank having good track record and adequate

collateral security are eligible for personal loans with the under notedprovisions.

Eligibility to be judged from the past track record of at least 2 years and

that the existing borrowal a/c is a standard one.

The existing collateral security to be retained / attached while extending

Personal Loans to these borrowers.

Age Limit

For Salaried Class - 65 years

For pensioners -- 65 to 70 years

For professionals/ -- 65 years Self Employed

Nature of facility - Term Loan

Quantum of loan

For Salaried Class and Pensioners


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For salaried Class: 12 Months Gross Salary / 20 months of net salary or

Rs.2.0 lac whichever is less.

Pensioners up to the age of 65 years - 10 months of gross pension or

Rs.2.0 lac whichever is less.

For Pensioners above the age of 65 years and up to the age of 70 years -

5 months of gross pension or Rs.1.0 lac whichever is less.

For Professionals/ Self Employed: Minimum of Average of last three years

income as per Income tax return or Rs.3.0 lac .

Existing Borrowers of the Bank : In case of partnership firm , each partner

may be allowed to avail loan for a maximum of Rs.1.0 lakh subject to the

condition that total amount of loan granted to all the partners cumulatively

should not exceed 10% of the loan / limit sanctioned. (Existing collateral

security to be retained).

Rate of interest

For Salaried Class and Pensioners : - BPLR

For Professionals : BPLR + 1

Processing fee1.0% of the loan amount. However, ZMs may reduce /waive the processing fee in

case of group of at least 10 accounts from one institution

Repayment

Maximum repayment period to be 48 months.

Guarantee

Third party / mutual guarantee/ guarantee of spouse except in salaried class

cases where installment is paid by salary deduction or undertaking from employer

for remitting the terminal benefits are available.


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Conveyance/

Auto Loan scheme

Facilitates owning a vehicle with the friendliest and most convenient car loan. Eitherone can purchase a new Car/ Van/ Jeep or raise loan to purchase old vehicles that

are not older than 2 years.

Eligibility

Employees of Central / State Govt., PSUs, Local Registered Bodies, universities

recognized by U.G.C. ,Schools/ colleges run by Govt. or local bodies with

confirmed service of 3 years Professionals /Self Employed , Employees of

corporate clients of Bank and General public.

Age limit - 21 to 65 years

Quantum of loan

Salaried Class :

For New Vehicles :Thrice the average of annual income of past three

years as per ITR / Salary details subject to a maximum of Rs.10 lac .

( Income of spouse can be clubbed) .

For Old Vehicles: Quantum of loan not to exceed Rs.5 lac

Professionals/ Self employed, CAs doctors , Architects and General public:


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For new vehicle segment. Thrice the average of annual income of the past

three years as per ITR subject to a maximum of Rs.10 lac (Income of

spouse can be clubbed).

For Old Vehicles : Quantum of loan not to exceed Rs.6 lac Beyond Rs.10

lac , the proposals should be sanctioned after proper appraisal outside the

purview of schematic lending. For this BM /ZM may take up sanctions with

in their ' maximum aggregate discretionary powers" for term loans for

higher limits upto Rs.30 lac , after compliance of guidelines like margin,

income etc

Margins

For New vehicles 10%

For old vehicles 30% ( Amount of loan shall not exceed 70% of market value

of vehicle or value of vehicle net of depreciation @ 20% whichever is low)

Rate of interest

Category Up to Rs 3 Lac Above Rs 3 Lac

General Public BPLR (-) 2.75% BPLR (-) 2.25%

Processing fee

Rs.100/- for two wheelers and Rs.500/- for Cars /Vans / Jeeps

Security


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Hypothecation of vehicle. RC / comprehensive insurance policy with bank clause

incorporated therein

Guarantee

Third party / mutual guarantee / guarantee of spouse except in salaried class

cases where instalment is paid by salary deduction and undertaking from

employer for remitting the terminal benefits is available.

Repayment

For new vehicles 60 months.

For old vehicles Maxm.36M

Prepayment Charges

1% of the outstanding balance.


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Category

Employees of Central/ State Govt. PSUs ,

organizations , employees of established &

recognized schools/ colleges / local

registered bodies and corporate clients of

Bank where loan installment is paid by

salary deduction or undertaking from

employer for remitting the terminal benefits

is available

Professionals/ Self employed, CAs, doctors,

Architects & General Public.

Quantum of Loan

Up to the gross annual income. Maxim Rs.5.0

lac( Income of spouse can be clubbed )

Twice the average of annual income of past three

years as per return filed or Rs.6.0 lac whicheveris less. (Income of spouse can be clubbed )

PSB Consumer Loan Scheme

The scheme facilitates for purchase of consumer durables other than vehicles.

Eligibility

Employees of Central / State Govt., PSUs, Local Registered Bodies, universities

recognized by U.G.C., Schools/ colleges run by Govt. or local bodies with

confirmed service of 3 years. Professionals /Self Employed, Employees of Bank's

corporate clients and General public.

Age limit - 21 to 65 years

Quantum of loan


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Margins - 10 %

Rate of interest BPLR

Processing fee - Rs.100/-

Security

No collaterals, only hypothecation of assets created .

Guarantee

Third party / mutual guarantee / guarantee of spouse except in salaried class

cases where installment is paid by salary deduction or undertaking from employer

for remitting the terminal benefits is available.

Repayment - 12 to 60 Months

Prepayment Charges

1% of the outstanding balance.


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Educational Loan Schemes

Objective of the schemeThe educational loan scheme outlined below aims at providing financial supportfrom the banking system to deserving and / meritorious students for persuing

higher education in India and abroad. The main emphasis is that everymeritorious student though poor is provided with an opportunity to persueeducation with the financial support from the banking system with affordableterms and conditions. No deserving student is denied an opportunity to persuehigher education for want of financial support.

Applicability of the SchemeThe scheme detailed below could be adopted by all commercial Banks. Thescheme provides broad guidelines to the banks for operationalising theeducational loan scheme and the implementing bank will have the discretion tomake changes suiting to the conveninence of the students / to make it morecustomer friendly.

Eligibility Criteria


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Student Eligibility :

Student should be an Indian National

Secured admission to professional / technical courses in India or abroad

through entrance Test / Merit Based Selection process.

Courses Eligible: Studies in India : ( Indicative List)

Graduation courses: B.A. B.Com, B.Sc., etc.

Post Graduation courses: Masters & Phd.

Professional Courses: Engg., Medical, Agriculture, Veterinary, Law

,Dental, Management , Computer etc.

Computer certificate courses of reputed institutes accredited to Deptt.

of electronics or institutes affiliated to university.

Courses like ICWA , CA , CFA etc.

Courses conducted by IIM, IIT, IISc , XLRI, NIFT, etc.

Courses offered in India by reputed foreign universities .

Evening courses of approved institutes.

Other courses leading to diploma / degree etc. conducted by colleges/

universities approved by UGC/ Govt/ AICTE /AIBMS/ ICMR etc.

Courses offered by National Institutes and other reputed private

institutions. Banks may have the system of appraising other institution

courses depending on the future prospects/recognition by user

institutions.

Studies Abroad :

Graduation For job oriented professional/technical courses offered byreputed universities.

Post Graduation MCA,MBA,MS etc.

Courses conducted CIMA-Londin, CPA in USA etc.

Expenses considered for Loan Fee payable to College/School/hostel. Examination/library/laboratory fee. Purchase of books/equipments/instruments/uniforms. Caution deposit/building fund/refundable deposit supported by institution

bills/receipts.

Travel expenses/passage money for studies abroad. Purchase of computers-essential for the completion of the course. Any other expense required to complete the course- like study tours, project

work, Thesis etc.

Quantum of Finance Need based finance subject to repaying capacity of the parents/students

with margin and the following ceilings: Studies in India - Maximum Rs. 7.50 lacs

Studies abroad - Maximum Rs. 15.00 lacs.


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MARGIN Up to Rs. 4.00 lac : NIL Above Rs. 4.00 lac:

Studies in India : 5% Studies Abroad : 15%

Scholarship/assistantship to be included in margin. Margin may be brought in on year to year basis as and when disbursements

are made on a pro-rata basis.

SECURITY Upto Rs. 4.00 lac : No Security Above Rs. 4.00 lac: Collateral in the form of a suitable third party

Upto Rs. 7.5 lac guarantee. The Bank may, at its discretion waive third partyguarantee if satisfied with the net worth/means of parent who would beexecuting the documents as joint borrower.

Above Rs. 7.5 lac Collateral security of suitable value or suitable third partyguarantee along with the assignment of future income of the student forpayment of installments.

NOTE:

The loan documents should be executed by both the student and theparent/guardian as joint borrower.

The security can be in the form of land/building/Govt. securities/Public SectorBonds/Units of UTI, NSC, KVP, LIC Policy, gold, shares/debentures, bankdeposit in the name of student/parent/guardian or any other third party withsuitable margin.

Wherever the land/building is already mortgaged, the unencumbered portion canbe taken as security on II charge basis provided it covers the required loanamount.

In case the loan is given for purchase of computer the same is to be

hypothecated to the Bank. Banks who wish to support highly meritorious/deserving students without security

may delegate such powers to fairly higher level authority.

RATE OF INTEREST

Category Up to Rs 4 Lac Above Rs 4 Lac

General Public BPLR (-) 1.00% BPLR (-) 0.50%


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Staff BPLR (-) 2.25% BPLR (-) 1.50%

The concession of 1% additional interest on account of service shall be

governed by HO PS Circulatory letter No.67/2004 dt 15.12.2004 as already

laid down under the scheme.

Further, an additional benefit of 0.50% will be applicable to those borrowers

(including staff) who offer additional collateral covering 100% of the loan

amount.

Simple interest to be charged during the Repayment holiday/moratorium

period Penal interest @ 2% be charged for above Rs. 4.00 lacs for the

overdue amount and overdue period.

Appraisal/Sanction/Disbursement

In the normal course, while appraising the loan the future income prospects of

the student will be looked into. However, where required, the means of

parent/guardian could also be taken into account to evaluate re-payment

capability

The loan to be sanctioned as per delegation of powers preferably by the

Branch nearest to the place of domicile.

No application for educational loan received should be rejected without the

concurrence of the next higher authority.

The loan to be disbursed in stages as per the requirement/demand directly to

the Institutions/Vendors of books/equipments/instruments to the extent

possible.

Repayment

Repayment holiday/Moratorium: Course period + 1 year or 6 months after

getting job, whichever is earlier. The loan to be repaid in 5-7 years after commencement of repayment.

If the student is not able to complete the course within the scheduled time ,

extension of time for completion of course may be permitted for a maximum

period of 2 years.

If the student is not able to complete the course for reasons beyond his

control, sanctioning authority may at his discretion consider such extension as

may be deemed necessary to complete the course.

The accrued interest during the repayment holiday period to be added to the

principal and repayment in Equated Monthly Installments (EMI) fixed.


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1% interest concession may be provided for loanees if the interest is serviced

during the study period when repayment holiday is specified for interest /

repayment under the scheme.

Follow Up

Banks to contact college/university authorities to send the progress report at

regular intervals in respect of students who have availed loans.

Processing Charges

No processing/upfront charges may be collected on educational loans.

Capability Certificate

Banks can also issue the capability certificate for students going abroad for

higher studies. For this financial and other supporting documents may be

obtained from applicant, if required.

(Some of the foreign universities require the students to submit a certificate

from their

bankers about the sponsors solvency/financial capability ,with a view to

ensure that the sponsors of the students going abroad for higher studies are

capable of meeting the expenses till completion of studies).

Other Conditions

No due certificate need not be insisted upon as a pre-condition for considering

educational loan.

However, banks may obtain a declaration/an affidavit confirming that no loans

are availed from other banks.

Loan applications have to be disposed of within a period of 15 days to 1

month, but not exceeding the time norms stipulated for disposing of loanapplications under priority sector lending.


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In order to bring flexibility in terms like eligibility, margin, security norms,

banks may consider relaxation in the norms on a case to case basis

delegating the powers to a fairly higher level authority.

Chapter - 4


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Data

Analysis

Data Collection

Punjab & Sind Bank, BHOPAL - Loans Sanctioned from 2007 to 2010

Housing Loans Number Amount issued (in lakhs)

1-4-07 to 31-03-08 167 685

1-4-08 to 31-03-09 99 385

1-4-09 to 31-03-10 70 374

Educational Loans Number Amount issued (in lakhs)

1-4-07 to 31-03-08 47 74

1-4-08 to 31-03-09 12 34

1-4-09 to 31-03-10 51 259

Business Loans Number Amount issued (in lakhs)

1-4-07 to 31-03-08 191 654

1-4-08 to 31-03-09 276 841

1-4-09 to 31-03-10 166 700

Personal Loans Number Amount issued (in lakhs)

1-4-07 to 31-03-08 110 50

1-4-08 to 31-03-09 96 971-4-09 to 31-03-10 96 68


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Conveyance Loans Number Amount

1-4-09 to 31-03-10 9 20

Consumer Loans Number Amount

1-4-09 to 31-03-10 4 6

Data Representation, Analysis & Interpretation

Punjab & Sind Bank Loans Analysis

Consolidated Statements of P & SB loans

Housing Loans

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 5 152 73 42

5-10 252 81 67

10-15 52 32 21

15 & above 229 199 244

Total 685 385 374


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Interpretation: The consolidated statement of housing loan reveals that there is a

decrease in the amount of loan from 2007-08 i.e. by 43.7.The difference in the last two years

is though minor.

Educational Loans

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 3 44 8.5 50

3-6 14 6.5 97

6 & above 16 19 112

Total 74 34 259


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Interpretation: The consolidated statement of educational loan reveals that there is an

substantial increase in the amount of loan from 2007-08 & 2008-09 i.e. 86.8%.Thus the

popularity of educational loans have been increasing as the disbursement of this loan is easy.

Personal Loans

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 1 29 53 25

1-2 7 15 12

2-3 14 29 31

Total 50 97 68


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Interpretation: The consolidated statement of personal loan reveals that there is an

increase in the amount of loan from 2007-08 & then sudden decrease from 2008-09 i.e. 30%.

This may be due the changes of policy or increase in the interest rate.

Business Loans

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 5 131 169 140

5-10 164 210 175

10-15 98 126 105

15 & above 261 336 280

Total 654 841 700


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Interpretation: The consolidated statement of business loan reveals that there is a

mediocre increase in the amount of loan from 2007-08. The overall financial position of this

loan is satisfactory.

Auto/ Conveyance Loans

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 3 - 9 -

3-6 - 4 -

6 & above - 7 -

Total - 20 -


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Interpretation: The consolidated statement of auto loan reveals that loans were taken

only in the year 2008-09 while it was nil in other two years.

Consumer Loans

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 3 - 2.5 -

3-6 - 3.5 -

Total - 6 -


44/91

Interpretation: The consolidated statement of auto loan reveals that loans were taken

only in the year 2008-09 while it was nil in other two years.

Comparative Statements of P & SB loans

Housing Loans

2008- 2009 2009-2010

In Rs. In % In Rs. In %

-79 -52 -31 -42.4

-171 -68 -14 -17.28

-20 -38 -11 -34.37

-30 -13 +45 +22.61


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Interpretation: The comparative statement of housing loan reveals that there has been

increase in the loan by 96.3%

Educational Loans

2008- 2009 2009-2010


-35.5 -81 41.5 488.23

-7.5 -53.57 90.5 1392.3

3 18.75 93 489.47

Interpretation: The comparative statement of educational loan reveals that there has

been a substantial increase in the loan by 96.7%

Personal Loans

2008- 2009 2009-2010


24 82.75 -28 -52.83

8 114.28 -3 -20

15 107.14 2 6.89


decrease in the loan by 87%


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Business Loans

2008- 2009 2009-2010


38 29 -29 -17.15

46 28 -35 -16.66

28 28 -21 -16.66

75 28 -56 -16.66


tremendous decrease in the loan.


2008- 2009 2009-2010


9 - -9 -100

4 - -4 -1007 - -7 -100


decrease in the loan.


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Consumer Loan

2008- 2009 2009-2010


2.5 - -2.5 -100

3.5 - -3.5 -100


decrease in the loan.

Trend Analysis of p & SB loans

Housing Loans

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 5 100 48.02 27.63

5-10 100 32.14 26.58

10-15 100 61.53 40.38

15 & above 100 86.89 106.55

Total 100 56.20 54.59


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Interpretation: The trend analysis of housing loan reveals that there has been no

particular trend of increase & decrease. The percentage in 2006-07 is 56.20 as compared to

100 in 2007-08 & in 2009-10 are 54.59 as compared to 100 in 2008-2009

Educational Loans

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 3 100 19.31 113.63

3-6 100 46.42 692.85

6 & above 100 118.75 700

Total 100 45.94 350


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Interpretation: The trend analysis of educational loan reveals that there has been

substantial increase in 2009-10. The percentage in 2008-09 is 45.94 as compared to 100 in

2007-08 & in 2009-10 are 350 as compared to 100 in 2008-09

Personal Loans

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 1 100 182.75 86.20

1-2 100 214.28 171.42

2-3 100 207.14 221.42

Total 100 194 136


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Interpretation: The trend analysis of personal loan reveals that there has been no

particular trend of increase & decrease. The percentage in 2008-09 is 194 as compared to

100 in 2007-08 & in 2009-10 are 136 as compared to 100 in 2008-09

Business Loans

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 5 100 139 106.87

5-10 100 128.04 106.70

10-15 100 128.57 107.14

15 & above 100 128.73 107.27

Total 100 128.59 107.03


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Interpretation: The trend analysis of business loan reveals that there has been no

particular trend of increase & decrease. The percentage in 2008-09 is 128.59 as compared to

100 in 2007-08 & in 2009-10 are 107.03 as compared to 100 in 2008-09


Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 3 100 - -

3-6 100 - -

6 & above 100 - -

Total 100 - -


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Interpretation: The trend analysis of auto loan reveals that there has been no trend

apart from 2008-09.

Consumer Loans

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 3 100 - -

3-6 100 - -

Total 100 - -


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Interpretation: The trend analysis of consumer loan reveals that there has been no

trend apart from 2008-09.

Common Size Statement of p & SB loans

Housing Loans:

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 5 22.18 18.96 11.22

5-10 36.78 21.03 17.91

10-15 7.59 8.31 5.61

15 & above 33.45 51.70 65.26

Total 100 100 100


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Interpretation:

The major change in housing loan has been in the amount above 15 lakh, it has increased in

2009-10 as compared to previous years.

There has been not much of loans sanctioned between amount 10-15 in all the three years.

Educational Loans:

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 3 59.45 25 19.31

3-6 18.91 19.12 37.45

6 & above 21.64 55.88 43.24

Total 100 100 100


55/91

Interpretation:

There has been not much of a difference in the range 3-6 lakhs in 2007-08 & 2008-09.

Large number of educational loans was sanctioned in the year 2007-08.

There has been a sudden increment in 2008-09 for the amount range above 6 lakhs.

Personal Loans:

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 1 58 54.64 36.77

1-2 14 15.47 17.65

2-3 28 29.89 45.58

Total 100 100 100


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Interpretation:

Most of the personal loans are sanctioned in the range upto 1 lakh.

There is a sudden decrease in range 1-2 lakh and then upheaval in 2-3 lakh range again.

Thus, the amount of personal loan is usually less as compared to the amounts of other loans.

Business Loans:

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 5 20.04 20.09 20

5-10 25.08 24.98 25

10-15 14.98 14.98 15

15 & above 39.90 39.95 40

Total 100 100 100


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Interpretation:

There have been minute changes for different ranges of amount of loans.

This show that business requirement of loan never stops and has almost stagnant growth.

Auto/ Conveyance Loans:

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 3 - 45 -

3-6 - 20 -

6 & above - 35 -

Total - 100 -


58/91

Interpretation:

There has been no sanction of loan in 2007-08 and 2009-10, they were only sanctioned in

2008-09.

No comparision of auto/conveyance loan can be done thereby.

Consumer Loans:

Amount / Year

(in lakhs)

2007-2008 2008-2009 2009-2010

Upto 3 - 41.64 -

3-6 - 58.36 -

Total - 100 -


59/91

Interpretation:

There has been no sanction of loan in 2007-08 and 2009-10, they were only sanctioned in

2008-09.

No comparision of consumer loan can be done thereby.

Data Collection , Data Representation, Analysis &

Interpretation

Questionnaire

Particulars of respondents:

Age:

[a]Below 25 [b] 25-40 [c] Above 40

Options Number Percentage (%)

Below 25 16 32

25-40 13 26


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Above 40 21 42

Sex:

[a]Male [b] Female


Male 35 70

Female 15 30

Occupation:

[a] Student [b] Service [c] Business [d] Others


[a] 14 28

[b] 18 36

[c] 11 22

[d] 7 14

1). Which of the following loans have you opted for?

[a] Housing Loan [b] Educational Loan [c] Personal Loan

[d]Auto Loan [e] Business Loan [f] Consumer Loan


[a] 14 21

[b] 19 29

[c] 13 20

[d] 8 12

[e] 7 11

[f] 5 7


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Interpretation: The loans of Punjab & Sind Bank are more common among students

as the highest number of loans taken is of educational loan, while other loans are customary.

It mainly depends upon the rate of interest to be given as it is evident that it is low in case of

educational loan.

2). Why have you opted this bank for loan facilities?

[a] Lower Rate of Interest [b] Better Services

[c]Better Schemes [d] Low Document Charges


[a] 20 28

[b] 31 44

[c] 17 24

[d] 3 4


62/91

Interpretation:

The main attraction of P & SB loans are the services provided by the bank by fulfilling the

requirements of the customers. It includes corruption free service, nodal officers for

grievances/complaints,extended business hours, notify change in interest rate in advance and

rendering of courteous services.

3). Loans sanction procedure of the bank is..

[a] Excellent [b] Good

[c] Average [d] Weak


[a] 13 25

[b] 30 59

[c] 7 14

[d] 1 2


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Interpretation:

The pie-chart shows that getting loans from P & SB is quiet easily accessible. Fair practice

code of P & SB involves application of loans, loan appraisal terms & conditions, post

disbursement supervision and grievances redressal mechanism.

4). Before taking up the loan, were you informed by the employees about the EMI, all

other interest costs, charges, stamp duty payable by you.?

[a] Yes [b] No


[a] 44 88

[b] 6 12


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Interpretation:

This shows that P& SB is loyal to its customers, so that the customer can decide upon

whether taking loan from this bank would be at ease or not.

The application for loans portraits all the terms & condition. They are also described in

relation to all statutory laws and regulations.

The equated monthly installment is clearly mentioned for different quantum of finance while

taking up the loan.

5). Are you satisfied with the interest rate charged by your bank on loan facilities?

[a] Totally satisfied [b] Slightly satisfied

[c] Slightly dissatisfied [d] Totally dissatisfied


[a] 12 24

[b] 27 54

[c] 8 16

[d] 3 6


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Interpretation:

The above percentage shows that P& SB offers a nominal rate of interest on loans.

It is different for different kind of loans. BPLR is generally the deciding factor.

6). Are the bank officials easily accessible for your queries?

[a] Yes [b] No


[a] 36 72

[b] 14 28


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Interpretation:

P& SB has various departments & customers can quiet easily have access to the officials of

banks.

The transactions as well as various others issues and withdrawals are done with a proper

time limit so that there is no rush hours.

The extension of business hours adds to ease of access to officials.

7). Do your bank provide any insurance policies along with the loan schemes?

[a] Yes [b] No


[a] 22 44

[b] 28 56


67/91

Interpretation:

The insurance policies depend upon the amount of loan taken.

It is generally not given and also depend upon the type of loan taken.

Punjab & Sind Bank is having a special tie-up arrangements with insurance companies to

provide insurance related services to its customers.

8). Margins asked in case of loans is

[a] Ultra Expensive [b] Expensive

[c] Reasonable [d] Cheap


[a] 8 16

[b] 19 38

[c] 18 36

[d] 5 10


68/91

Interpretation:

Margins are not asked in case of personal loan while it is more in case of business & housing

loan; less in case of educational, auto loan & consumer loan.

9). Processing Fee of this bank is

[a] Very High [b] High

[c] Low [d] Very Low


[a] 17 28

[b] 19 32

[c] 19 32

[d] 5 8


69/91

Interpretation:

Processing fee is nominal depending upon the amount of loan and also the type of loan.

It is 0.50% for housing loan, 1% for personal loan, Rs. 100-500 for auto loan, Rs. 100 for

consumer loan and no processing fee is charged on educational loan.

Processing fee is exempted for central/ state govt./ P.S.U. employees.

10).Do this bank charges any amount for part payment of the loan?

[a] Yes [b] No

[c] No Idea


[a] 8 16

[b] 21 42

[c] 21 42


70/91

Interpretation:

The charge on part payments depend upon the maturity date & usually it is not charged.

If the part payment is done after the maturity date, then the bank charges an additional

amount on the left over amount.

11). Appraisal of Educational Loan is

[a] Easy [b] Time consuming

[c] Delayed [d] No idea


[a] 14 28

[b] 11 22

[c] 7 14

[d] 18 36


71/91

Interpretation:

The students get educational loan very easily if they satisfies the requirement & its

disbursement also hold good position.

This may be time consuming because the bank asks for assessment of credit needs of a

customer, conveying the terms and condition, giving sanction letter etc.

12). Did the bank ask your preference regarding due date of EMI?

[a]Yes [b] No


[a] 36 72[b] 14 28


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Interpretation:

The due date of equated monthly installment is generally being asked.

In case of PSU / Govt. employees, EMI is paid through salary and that acts as a deciding

factor. In other cases, it depends on banks discretion.

13). Was the payment of installment commenced & continued as per the schedule

specified in the application form?

[a] Yes [b] No


[a] 31 62

[b] 19 38


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Interpretation:

Under normal circumstances, everything goes as per schedule and it changes with the

change in policy.

The bank strictly follows all the norms and collects the installments and informs the customer

about the due amount on the regular basis.

14). Were you informed about all the acts set by the bank in case of events of defaults?

[a] Yes [b] No


[a] 39 78

[b] 11 22


74/91

Interpretation:

Acts are mostly being stated before taking up the loan.

Application of loans deals with all the areas in case of defaults. The maturity date, the

circumstances under which the application will be rejected and post disbursement

supervision is clearly informed generally by the bank.

15). What do you think about grievances redressal system in the bank?

[a] Effective [b] Prompt[c] Time consuming [d] Inconvenient


[a] 10 19

[b] 31 60

[c] 6 11

[d] 5 10


75/91

Interpretation:

The grievance redressal system shows a satisfactory level.

To enable the customers to voice their grievances or offer suggestions for improvement in

customer service, Customer Day" is observed at all the offices of the bank across the

organization covering branches, Zonal Offices and Head Office. Customer Service

Committee Meetings are also held.

In case of any complaint , the matter may be first brought to the notice of concerned branch

manager for immediate redressal.

16). Does your bank update you with the new loan scheme & changes in the policies?

[a] Always [b] Often

[c] Rarely [d] Never


[a] 19 33

[b] 19 33

[c] 20 34

[d] 0 0


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Interpretation:

The P & SB are customer friendly and their aim is to benefit customers & involve them.

Most of the changes are displayed on internet on P & SB website while others are being

informed through newsletters and various other postings by the bank.

17).In your opinion which of the following loan schemes offered by your bank is the

best? [a] Housing Loan [b] Educational Loan [c]

Personal Loan [d] Auto Loan [e] Business Loan

[f] Consumer Loan


[a] 14 22

[b] 20 31

[c] 8 12

[d] 10 16

[e] 9 14

[f] 3 5


77/91

Interpretation:

As the interest rate & disbursement of educational loan is easy, it is considered as the best

while consumer loan is least popular.

18). What is your satisfaction level of the electronic services on the scale of 0-5.

[ ______ ]

Options Number Percentage (%)[0-5] 189/250 75.6


78/91

Interpretation:

The satisfaction level of various electronic services like online service on internet, fax, ATM

etc are eminent.

The bank provides educational loan online and also filling up of loan application can be

done online.

Any change in the schemes of loan is being displayed online on the website of the bank which

creates an easy customer bank relationship.

19).How would you rate Feasibility of the service provided by bank?

[a] [b] [c] [d] [e]


[a] 1 2

[b] 6 12

[c] 19 38

[d] 18 36

[e] 6 12


79/91

Interpretation:

The feasibility of the services provided by the bank is above average level.

After gathering, analyzing data for various kinds of services offered by P & SB, it is clear

that the customers find it quiet practical and within their reach.

20). How was the overall experience of the bank?

[a] Excellent [b] Fair

[c] Good [d] Average


[a] 6 12

[b] 24 48

[c] 13 26

[d] 7 14


80/91

Interpretation:

Overall experience of the bank as rated by customers is fair enough.

It needs to identify its lacking areas & thus improve on its shortcomings to come up to the

expectations of the customers.

Testing of Hypothesis

Hypothesis

Whether the acceptance of loan by the public depends upon various

loan schemes offered by the bank.

Correlation

r = dx dy


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dx. dy

X = Amount sanctioned

Y= No. of schemes

Coefficient of correlation

Between the amount sanctioned by the bank and the no. of schemes

offered by the bank.

Types of

loan

Amount

sanctioned

(X)

dx dx No. of

schemes

(Y)

dy dy dxdy

Housing

loan

1444 736.17 541946.27 336 103.7 10753.69 76340.82

Educationalloan

367 -340.83 116165.089 110 -122.3 14957.29 41683.509

Personal

loan

215 -492.83 242881.40 302 69.7 4858.09 -34350.25

Business

loan

2195 1487.1

7

2211674.60 633 400.7 160560.49 595909.079

Auto loan 20 -687.83 473110.10 9 -

223.3

3

49876.28 153613.07


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Consumer

loan

6 -701.83 492565.34 4 -228.3 52120.89 160227.789

Total 4078342.7

9

293126.

7

993423.952

X = 4247 = 707.83 Y = 1394 =232.33

6 6

r = dx dy = .90

dx. dy

Interpretation of correlation:

It is having a high degree of correlation i.e.- .90

Null Hypothesis

There is no significant difference between the acceptance of loan by the

public and offering of various schemes of loans by the bank.

Test

t = r * n-2

1-r


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= .908 6-2 = 4.33

1 - (.908)

Degree of freedom = n-1

= 6-1 = 5

Interpretation of t-test :

When the degree of freedom is 5 and the level of significance is 5%. The critical

value of t= 2.571. Since the calculated value is more than the table value, we

reject the null hypothesis and conclude that there is significant difference between

the acceptance of loan by the public and offering of various schemes of loan by the

bank.


84/91

Chapter - 5Major findings

&

Suggestions

Findings

There is a high degree of correlation between the amount sanctioned by the bank

and the no. of schemes offered by the bank.

The Null hypothesis was taken as there is no significant difference between the

acceptance of loan by the public and offering of various schemes of loans by the

bank has been proved wrong.


85/91

Overall experience of the bank as rated by customers is fair enough.

The feasibility of the services offered by the bank is above average level.

The highest amount is prevalent in educational loan while lowest amount is

prevalent in personal loan.

The trend has been mediocre in all the loans while there is no trend in

Auto/Conveyance & Consumer loan.

The comparative statement of educational loan reveals that there has been a

substantial increase in the loan by 96.7%

The consolidated statement of educational loan reveals that there is an

substantial increase in the amount of loan from 2005-06 & 2006-07 i.e.

86.8%.Thus the popularity of educational loans have been increasing as the

disbursement of this loan is easy.


86/91

Suggestions

Punjab & Sind Bank loans offers satisfactory services. But to improve the services

and level of schemes offered by the bank, the following suggestions are

recommended-

The bank should up bring auto, business and consumer loan and promote

them as these are lowest taken up by the public.

The bank should concentrate on interest rate, document charges and new

schemes to attract customers.

The margin asked in case of loans is expensive as well as reasonable in

some cases. The bank should have a check on the increase and decrease of

margins.

Processing fee is another criterion where the bank should draw its attention. It

should not be too high and within the reach of the customers.

Grievances redressal system is prompt but has not reached the excellent

level. Thus the officials should be quick and offer service under this head.

The electronic services offered by the bank shows a mediocre level i.e.

75.6%, so the bank should improve it and bring in new technological

advances to save time in the transactions and to make the customers at ease.

Punjab & Sind Bank should continuously monitor the likes and dislikes of customers

and create a customer friendly relationship as Customers are said to be God. They

should conduct a periodic survey of the loans as compared to other banks to

overcome its shortcomings.

Conclusion


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Punjab & Sind Bank has been adjudged the best bank in Medium size best bank by

Business Today. The analysis of loans offered by the bank points out the following-

The Feasibility of the services offered by the bank is above average level as

surveyed through questionnaire.

Educational loan is most popular loan among public as maximum people have

opted for this loan & the appraisal of educational loan is easy.

There is a high level of satisfaction about the services offered by the bank as

well as the bank officials are also easily accessible.

The interest rate of various loan showed a mediocre acceptance.

The bank does not charge any amount on the part payment of the loan.

The bank strictly follows the terms and conditions laid down by it and the

schedule of loan sanctioning procedure and all the acts in case of defaults are

well informed before the customers take loan.

The survey also reveals that customers find educational loan is the best loan

due to the various quantum of finance n low margin asked in it.

The bank officials update their customers from time to time about the new

schemes as well as reminds about their due date and the balance amount.

The satisfaction level of the electronic services like ATM facility, internet, faxetc is 75.6%.

Finally, there is a significant difference between the acceptance of loan by the public

and offering of various schemes of loans by the bank and there is a high degree of

correlation between the amount sanctioned by the bank and the no. of schemes

offered by the bank.

Bibliography


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Bibliography-

Books-

J. Fabozzi, Frank, Bank Loans: Secondary Market and Portfolio

Management, Pg no. 122, july1998

Gupta & Sharma, r k & shashi, Financial Management, Pg no. 5.3, july2007

Gill, James O, Financial Analysis: The Next Step, Pg no. 57, april 1999

Magazines-

Business Today, Feb edition, 2008

Newspaper-

The Economic Times

The Hindu

Websites-

www.psbindia.com

http://en.wikipedia.org/wiki/Loan

http://andromeda.rutgers.edu/~jlynch/Texts/preface.html

http://www.discoverstudentloans.com/resources/your-credit-score.aspx

www.investopedia.com/terms/t/trendanalysis.asp

www.answers.com/topic/comparative-statement

www.investorwords.com/985/common_size_statement.html
http://books.google.com/books?id=QZ61vrmJHX0C&printsec=frontcover&dq=loans&sig=q_6V85Wzbywzw-Lq_I26k_59e3khttp://books.google.com/books?id=QZ61vrmJHX0C&printsec=frontcover&dq=loans&sig=q_6V85Wzbywzw-Lq_I26k_59e3khttp://www.psbindia.com/http://en.wikipedia.org/wiki/Loanhttp://andromeda.rutgers.edu/~jlynch/Texts/preface.htmlhttp://andromeda.rutgers.edu/~jlynch/Texts/preface.htmlhttp://www.investopedia.com/terms/t/trendanalysis.asphttp://books.google.com/books?id=QZ61vrmJHX0C&printsec=frontcover&dq=loans&sig=q_6V85Wzbywzw-Lq_I26k_59e3khttp://books.google.com/books?id=QZ61vrmJHX0C&printsec=frontcover&dq=loans&sig=q_6V85Wzbywzw-Lq_I26k_59e3khttp://www.psbindia.com/http://en.wikipedia.org/wiki/Loanhttp://andromeda.rutgers.edu/~jlynch/Texts/preface.htmlhttp://www.investopedia.com/terms/t/trendanalysis.asp


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Annexure

Copy ofQuestionnaire

Dear Customer,


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I am Sony Bagga, doing a research on the topic Analysis of Punjab &

Sind Bank Loans.

Hence I kindly request you to fill in the questionnaire at the best of your

knowledge.

Name: _____________________________________________

Age: Below 25 25 - 40 Above 40

Sex: Male Female

Occupation: Student Service Business Others

1). Which of the following loans have you opted for?

[a] Housing Loan [b] Educational Loan [c] Personal Loan

[d]Auto Loan [e] Business Loan [f] Consumer Loan

2). Why have you opted this bank for loan facilities?

[a] Lower Rate of Interest [b] Better Services

[c]Better Schemes [d] Low Document Charges

3). Loans sanction procedure of the bank is..

[a] Excellent [b] Good

[c] Average [d] Weak

4). Before taking up the loan, were you informed by the employees about the EMI, allother interest costs, charges, stamp duty payable by you.?

[a] Yes [b] No

5). Are you satisfied with the interest rate charged by your bank on loan facilities?

[a] Totally satisfied [b] Slightly satisfied

[c] Slightly dissatisfied [d] Totally dissatisfied

6). Are the bank officials easily accessible for your queries?

[a] Yes [b] No

7). Do your bank provide any insurance policies along with the loan schemes?

[a] Yes [b] No

8). Margins asked in case of loans is

[a] Ultra Expensive [b] Expensive

[c] Reasonable [d] Cheap

9). Processing Fee of this bank is

[a] Very High [b] High

[c] Low [d] Very Low

a


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10).Do this bank charges any amount for part payment of the loan?

[a] Yes [b] No

[c] No Idea

11). Appraisal of Educational Loan is

[a] Easy [b] Time consuming

[c] Delayed [d] No idea

12). Did the bank ask your preference regarding due date of EMI?

[a]Yes [b] No

13). Was the payment of installment commenced & continued as per the schedule

specified in the application form?

[a] Yes [b] No

14). Were you informed about all the acts set by the bank in case of events of defaults?[a] Yes [b] No

15). What do you think about grievances redressal system in the bank?

[a] Effective [b] Prompt

[c] Time consuming [d] Inconvenient

16). Does your bank update you with the new loan scheme & changes in the policies?

[a] Always [b] Often

[c] Rarely [d] Never

17).In your opinion which of the following loan schemes offered by your bank is the

best? [a] Housing Loan [b] Educational Loan [c]

Personal Loan [d] Auto Loan [e] Business Loan

[f] Consumer Loan

18). What is your satisfaction level of the electronic services on the scale of 0-5.

[ ______ ]

19).How would you rate Feasibility of the service provided by bank?

[a] [b] [c] [d] [e]

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