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CHAPTER 1
WHAT IS BANKING
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1.1 INTRODUCTION
Finance is the life blood of trade, commerce and industry. Now-a-days, bank
money acts as the backbone of modern business. Development of any country
mainly depends upon the banking system.
The term bank is derived from the French word Banco which means a Bench or
Money exchange table. In olden days, European money lenders or money changers
used to display (show) coins of different countries in big heaps (quantity) on
benches or tables for the purpose of lending or exchanging.
A bank is a financial institution which deals with deposits and advances and other
related services. It receives money from those who want to save in the form of
deposits and it lends money to those who need it.
1.2 DEFINITION OF BANK
Oxford Dictionary defines a bank as "an establishment for custody of money,
which it pays out on customer's order."
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1.3 BANKING SECTOR- AN OVERVIEW
Banking in India originated in the last decades of the 18th century. The oldest bank
in existence in India is the State Bank of India, a government-owned bank that
traces its origins back to June 1806 and that is the 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 then 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 next largest in 1980.
Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector
banks (that is with the Government of India holding a stake), 31 private banks
(these do not have government stake; they may be publicly listed and traded on
stock exchanges) and 38 foreign banks. They have a combined network of over
53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a
rating agency, the public sector banks hold over 75 percent of total assets of the
banking industry, with the private and foreign banks holding 18.2% and 6.5% res
The Indian banking sector comprises 26 state sector banks, besides a number of
private as well as co-operative sector players.
The banking sector in India has made significant progress in the last five years –
the growth is well reflected through parameters including profitability, annual
credit growth, and decline in non-performing assets (NPAs). In the last decade, the
sector witnessed many positive developments, as policy makers which comprise
the Reserve Bank of India (RBI), Ministry of Finance and associated government
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and financial sector regulatory entities, made several distinguished efforts to
improve regulation.
Worth noting is the fact that India?s banking sector has been one of the very few
ones that have actually been able to maintain resilience without much impacting
the growth process.
Growth in the sector has been favored by factors including low defaulter ratio,
strong economic growth, central bank?s regular intervention and pre-emptive
adjustment of monetary policy.
India has the potential to become the third largest banking sector by 2050 after
China and US, according to a PricewaterhouseCoopers (PwC) report titled
“Banking In 2050”. The report states that India has particularly strong long-term
growth potential.
? Indian Banking Sector – Key Drivers
The banking sector in India is expected to have another good year during 2011,
with growth being propelled by factors such as good economic growth, favorable
demographics and low penetration, according to a report titled „Indian banks are
likely to ride an economic growth wave?, by research firm Standard & Poor?s.
? The country?s economy grew by 8.5 per cent in the last fiscal and the
government expects the growth impetus to continue this year as well
? More than 50 per cent of India?s population is under the age of 30 years,
which is a major target group for banks
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? Penetration of banking services in the country remains low. The government
has set targets to provide banking facilities to all areas with a population of
over 2,000 by March, 2012.
? Indian Banking Sector – Key Statistics
The banking sector in India is well capitalized, with capital ratios being above the
global average. The average tier-1 Capital Adequacy Ratio (CAR) of the Indian
banking industry is above 10 per cent compared to the Basel III norm of 8.5 per
cent including the contingency buffer. Moreover, the Reserve Bank of India, in its
Financial Stability Report (FSR) has also asserted that the sector remains well
capitalized with both core capital adequacy and leverage ratios at comfortable
level.
Efficient internal capital generation, fairly active capital markets, and strong
support from the government ensured good capitalization for most banks. The
overall CAR reached 14 per cent as on March 31, 2011. High levels of public
deposits also ensured a comfortable liquidity profile
The total assets size of the banking industry rose by more than five times between
March 2000 and March 2010 - from US$ 250 billion to more than US$ 1.3 trillion
- a Compound Annual Growth Rate (CAGR) of 18 per cent compared to the
average GDP growth of 7.2 per cent during the same period.
During the last five years, while the annual rate of credit growth was 23 per cent,
profitability was maintained at around 15 per cent.
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While the Indian banking sector is characterized by the presence of a large number
of players, top 10 banks accounted for a significant 57 per cent share of the total
credit as on March 31, 2011.
Nationalized banks accounted for 52.2 per cent of the aggregate deposits, with
State Bank of India (SBI) and its Associates accounting for 22.1 per cent. The
share of new private sector banks, foreign banks, old private sector banks, and
regional rural banks in aggregate deposits was 13.3 per cent, 4.8 per cent, 4.6 per
cent and 3.0 per cent, respectively, according to RBI?s Quarterly Statistics on
Deposits and Credit of Scheduled Commercial Banks, December 2010.
With respect to gross bank credit, nationalized banks had the highest share of 51.6
per cent in the total bank credit. They were followed by SBI and its associates at
22.7 per cent and new private sector banks at 13.7 per cent. Foreign banks, old
private sector banks and regional rural banks had comparatively lower shares in the
total bank credit at 5.1 per cent, 4.5 per cent and 2.5 per cent, respectively.
India's foreign exchange reserves were US$ 314.6 billion as on July 8, 2011,
according to the data in the weekly statistical supplement (WSS) released by RBI.
Indian bank loans increased by 19.9 per cent year-on- year (y-o-y) as of July 1,
2011, according to the central bank's WSS. Deposits rose by 18.4 per cent from a
year earlier.
? Indian Banking – Trends& Developments
The last three decades have demonstrated a significant increase in the size, spread
and scope of activities of banks in India. The business profile of banks has changed
significantly to include non-traditional activities such as merchant banking, new
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financial services, mutual funds, etc. The evolution from class banking to mass
banking and rising customer focus is immensely changing the landscape of Indian
banking.
? Payments and banking transactions through mobile phones in India are
likely to reach US$350 billion by 2015, according to global management
consulting firm, The Boston Consulting Group (BCG). This, in turn, will
provide banks, telecom operators, device makers and service providers an
opportunity to earn fee income of US$4.5 billion
? With an objective of increasing the financial inclusion, the SBI has opened
21 new branches, besides, 101 new Automatic Teller Machines (ATMs) and
400 green channel counters.
? Around 350,000 villages spanning the entire India would have access to
financial services offered by banks in the next two financial years, according
to a plan given by banks to the RBI. RBI has directed banks to ensure that
223,473 villages have access to basic financial services by March 2012
? Three local banks have partnered with a global financial technology firm -
Polaris Software with its headquarters in India - to establish a joint venture
IT Company in Bangladesh. The company would start with providing
software solutions to these three banks before selling customized services to
other banks, non-bank financial institutions and insurance companies
respectively.
? Commercial Banks:
In 1969, fourteen major commercial banks were nationalized. In 1980, six
more commercial banks were nationalized. The State Bank of India and its
subsidiaries are also own by the central government. After this amendment the
existing structure has evolved in
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? Public sector
? Private sector
Public sector banks have either the Government of India or Reserve Bank of India
as the majority shareholder. This segment comprises of:
? State Bank of India (SBI) and its subsidiaries.
? Other nationalized banks.
Private sector banks consist of
? Scheduled Commercial Banks
? Unscheduled Banks
Scheduled commercial Banks constitute those banks which have been included in
the Second Schedule of Reserve Bank Of India (RBI) Act, 1934. RBI in turn
includes only those banks in this schedule which satisfy the criteria laid down vide
section 42 (60 of the Act. Some co-operative banks are scheduled commercial
banks albeit not all co-operative banks are. Being a part of the second schedule
confers some benefits to the bank in terms of access to accommodation by RBI
during the times of liquidity constraints.
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CHAPTER 2
CO-OPERATIVE BANKING
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2.1 DEFINATION
“A Co-operative bank, as its name indicates is an institution consisting of a
number of individuals who join together to pool their surplus savings for the
purpose of eliminating the profits of the bankers or money lenders with a view to
distributing the same amongst the depositors and borrowers.”
The Co-operative Banks Act, of 2007 (the Act) defines a co-operative bank
as a co-operative registered as a co-operative bank in terms of the Act whose
members – Are of similar occupation or profession or who are employed by a
common employer or who are employed within the same business district; or Have
common membership in an association or organization, including a business,
religious, social, co-operative, labour or educational group; or have common
membership in an association or organization, including a business, religious,
social, co-operative, labour or educational group; or Reside within the same
defined community or geographical area.
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2.2 INTRODUCTION
Co-operative bank, in a nutshell, provides financial assistance to the people
with small means to protect them from the debt trap of the moneylenders. It is a
part of vast and powerful structure of co-operative institutions which are engaged
in tasks of production, processing, marketing, distribution, servicing and banking
in India. A co-operative bank is a financial entity which belongs to its members,
who are at the same time the owners and the customers of their bank. Co-operative
banks are often created by persons belonging to the same local or professional
community or sharing a common interest. These banks generally provide their
members with a wide range of banking and financial services (loans, deposits,
banking accounts…). Co-operative banks differ from stockholder banks by their
organization, their goals, their Values and their governance.
The Co-operative Banking System in India is characterized by a relatively
comprehensive network to the grass root level. This sector mainly focuses on the
local population and micro- banking among middle and low income strata of the
society. These banks operate mainly for the benefit of rural areas, particularly the
agricultural sector. According to National Federation of Urban Co-operative Banks
and Credit Societies Ltd., (NAFCUB). the total deposits & lending?s of Co-
operative Banks is much more than Old Private Sector Banks & also the New
Private Sector Banks. This exponential growth of Co-operative Banks is attributed
mainly to their much better local reach, personal interaction with customers, and
their ability to catch the nerve of the local clientele.
Though registered under the Co-operative Societies Act of the Respective States
(where formed originally) the banking related activities of the co-operative banks
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are also regulated by the Reserve Bank of India. They are governed by the Banking
Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.
2.3 OVERVIEW OF CO-OPERATIVE BANKS
Co-operative movement is quite well established in India. The first
legislation on co-operation was passed in 1904. In 1914 the Maclagen committee
envisaged a three tier structure for co-operative banking viz. Primary Agricultural
Credit Societies (PACs) at the grass root level, Central Co-operative Banks at the
district level and State Co-operative Banks at state level or Apex Level. The first
urban co-operative bank in India was formed nearly 100 years back in Baroda.
Co-operative Institutions are engaged in all kinds of activities namely
production, processing, marketing, distribution, servicing, and banking in India and
have vast and powerful superstructure. Co-operative Banks are important cogs in
this structure.
In the beginning of 20th century, availability of credit in India, more
particularly in rural areas, was almost absent. Agricultural and related activities
were starved of organized, institutional credit. The rural folk had to depend entirely
on the money lenders, who lent often at usurious rates of interest.
The co-operative banks arrived in India in the beginning of 20th Century as
an official effort to create a new type of institution based on the principles of co-
operative organization and management, suitable for problems peculiar to Indian
conditions. These banks were conceived as substitutes for money lenders, to
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provide timely and adequate short-term and long-term institutional credit at
reasonable rates of interest.
In the formative stage Co-operative Banks were Urban Co-operative
Societies run on community basis and their lending activities were restricted to
meeting the credit requirements of their members. The concept of Urban Co-
operative Bank was first spelt out by Mehta Bhansali Committee in 1939 which
defined on Urban Co-operative Bank. Provisions of Section 5 (CCV) of Banking
Regulation Act, 1949 (as applicable to Co-operative Societies) defined an Urban
Co-operative Bank as a Primary Co-operative Bank other than a Primary Co-
operative Society was made applicable in 1966.
With gradual growth and also given Philip with the economic boom, urban
banking sector received tremendous boost and started diversifying its credit
portfolio. Besides giving traditional lending activity meeting the credit
requirements of their customers they started catering to various sorts of customers
viz.self-employed, small businessmen / industries, house finance, consumer
finance, personal finance etc.
Categories
There are two main categories of the co-operative
Banks.
(a) Short term lending oriented co-operative Banks - within this category
there are three sub categories of banks viz state co-operative banks, District
co-operative banks and Primary Agricultural co-operative societies.
(b) Long term lending oriented co-operative Banks - within the second
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category there are land development banks at three levels state level, district
level and village level.
The co-operative banking structure in India is divided into following main 5
categories:
1. Primary Urban Co-op Banks
2. Primary Agricultural Credit Societies
3. District Central Co-op Banks
4. State Co-operative Banks
5. Land Development Banks
2.4 FORMATION OF CO-OPERATIVE SOCIETY
A Co-operative Society can be formed as per the provisions of the Co-operative
Societies Act, 1912. At least ten persons having the capacity to enter into a
contract with common economic objectives, like farming, weaving, consuming,
etc. can form a Co-operative Society.
A joint application along with the bye-laws of the society containing the details
about the society and its members has to be submitted to the Registrar of Co-
operative Societies of the concerned state. After scrutiny of the application and the
bye–laws, the registrar issues a Certificate of Registration.
Requirements for Registration:
1. Application with the signature of all members
2. Bye-laws of the society containing:
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? Name, address and aims and objectives of the society;
? Names, addresses and occupations of members;
? Mode of admitting new members;
? Share capital and its division.
2.5 CO-OPERATIVE BANKS-STRUCTURE AND FUNCTIONS
The primary objective of a Co-operative bank is to encourage „Thrift and self help?
and to raise resources by way of deposits. Hence the basic tenet of a Co-operative
bank is to encourage the savings habits of its members. Co-operation is definitely a
school of thrift, and co-operative saving create first the basis of funds, which are
then employed for granting credits and for securing the confidence of depositors
and clients.
Another objective of co-operative banks is to lend money to those who may
not have acceptable assets to secure funds, but who is in need of it, especially to
the weaker section of the community. The resources of banks should not be given
to a few chosen members. All members are entitled to get loans and an individual
maximum if fixed to avoid the monopolizing of resources by a few. While lending
money, the Co-operative banks see that they are properly used for productive
purpose. Then only it would be possible for the borrower to repay the loans in
time. The Co-operative system possesses certain qualities, which eliminate the
difficulty encountered by commercial banks when lending to small borrowers. Co-
operative banks are generally local in character and they have local feel. Therefore,
lending by them is more to the needy people of the community and hence recovery
becomes easier. The aim of Co-operative lending is not to weaken a member by
making debt on unbearable burden but to help him to get rid of financial
difficulties by creating assets and to start a new economic life.
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The purpose of a Co-operative bank is also to offer service to the customer at a
reasonable cost. As profit motive is eliminated, a Co-operative banker can afford to
render services at a reasonable cost. Co-operative banks been enjoying legislative
support from the government. In India, they have been working under the Co-
operative Societies Acts of the respective states and have been provided certain
concessions In order to help them to face challenges from commercial banks. They
now have to pay income tax on their income. At present, Co-operative Banks have
been providing all modern banking services comparable to that offered by any
Commercial Bank.
The functions of Co-operative Banks in India are governed by the Banking
Regulation Act, 1949. The Banking Regulation Act was not applicable to Urban
Co-operative Bank till March 1966. It was made applicable to them with the
ultimate objective of protecting customers interest as large amounts of deposits of
deposits were at stake. According to section 6 of banking Regulation Act, Urban
Co-operative Banks can conduct following functions.
In addition to normal business of banking, Co-operative banks may engage in any
one or more of the following activities namely:
? The borrowing, raising or taking up of money, the lending or advancing
of money either upon or without security, the drawing making accepting
discounting, buying, selling, collecting and dealing of bills of exchange,
hundies, promissory notes, coupons, drafts, bills of landing, railway
receipts, warrants, debentures, certificates, scrip?s and other instruments
and securities whether transferable or negotiable or not; the granting and
issuing of letters of credit, travelers cheques, circular notes: the buying
and selling of foreign exchange, securities and investments of all kinds,
the purchasing and selling of bonds, scrips or valuables on deposits or for
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safe custody or otherwise, the providing of safe deposits vaults: the
collecting and transmitting and securities.
? Acting as an agent for any government or local authority or any other
persons or persons: the carrying on of agency business of any
descriptions including the clearing and forwarding of goods, giving of
receipts an discharges and otherwise acting as an attorney on behalf of
customers.
? Contracting for public and private loans and negotiating and issuing the
same.
? Carrying on and transacting every kind of guarantee and indemnity
business.
? Managing, selling and realizing any property which may come into the
possession of the Co-operative bank in satisfaction or part satisfaction of
its claims.
? Undertaking and executing trusts.
? Undertaking the administration of estates as executor, trustee or
otherwise:
? The acquisition, construction, maintenance, and alteration of any building
or works necessary or convenient for the purpose of the Co-operative
bank.
? Acquiring and undertaking the whole or any part of the business of any
persons or company or Co-operative society: when such business is of
nature enumerated or described in the sub-section:
? Doing all such other things as are identical or conducive to the promotion
or advancement of the business of the Co-operative bank.
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? Any other form of business which the central government may by
notification in the official gazette, specify as a form of business in which
it is lawful for a Co-operative bank to engage.
2.6 EVOLUTION OF URBAN CO-OPERATIVE BANKS
The term Urban Co-operative Banks (UCBs), though not formally defined,
refers to primary cooperative banks located in urban and semi-urban areas. These
banks, till 1996, were allowed to lend money only for non-agricultural purposes.
This distinction does not hold today. These banks were traditionally centered on
communities, localities work place groups. They essentially lent to small
borrowers and businesses. Today, their scope of operations has widened
considerably. Currently 1721 Urban Co-operative Bank?s 7500 Branches across
India over 20 Million Members.
The origins of the urban cooperative banking movement in India can be traced
to the close of nineteenth century when, inspired by the success of the experiments
related to the cooperative movement in Britain and the cooperative credit
movement in Germany such societies were set up in India. Cooperative societies
are based on the principles of cooperation, - mutual help, democratic decision
making and open membership. Cooperatives represented a new and alternative
approach to organization as against proprietary firms, partnership firms and joint
stock companies which represent the dominant form of commercial organization.
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2.7 STRUCTURES AND SPREAD OF UCBs
In terms of geographical spread, UCBs are unevenly distributed across the states.
Five states viz., Maharashtra, Gujarat, Karnataka, Andhra Pradesh and Tamil Nadu
Account for 1523 out of 1942 banks that presently comprise the sector. Further, the
UCBs in these states account for approximately 82% of the deposits and advances
of the sector as may be seen from the table below:
Name of the
State
No of
banks in
operation
% to
total
no. of
banks
Deposits
(Rupees
in
Lakhs)
% of
deposits
to total
deposits
Advance
(Rupees in
Lakhs)
% of
Advanc
es to
total
advance
s.
Maharashtra 639 26.68 60,72,498 55.08 37,42,401.2 55.09
Gujarat 321 15.24 16,27,946 14.77 9,70,287.03 14.28
Karnataka 300 14.25 8,35,274 7.58 5,37,186.7 7.91
Tamil Nadu 132 6.27 3,10,521 2.82 2,12,113.28 3.12
Andhra
Pradesh
131 6.22 2,11,324 1.92 1,37,888.23 2.03
Total 1,523 2,106 90,57,563 82.15 55,99,876.5 82.44
For all UCBs in the country, the total Deposits are Rs. 1, 10, 25,642 Lakhs and
total Advance are Rs. 67, 93,017 Lakhs.
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2.8 PRESENT STATUS OF UCBs
The urban cooperative banking system has witnessed phenomenal growth during
the last one and a half decades. From 1307 urban cooperative banks (UCBs) in
1991, the number of UCBs has risen to 2105 in the year 2004. Deposits have
increased by over 1100 percent from Rs.8600 crore to over Rs.100, 000 crore,
while advances have risen from Rs.7800 crore to over Rs.65, 000 i.e. by 733
percent during the above 15-year period. This growth path has been possible
mainly on account of the enabling policy environment in the Post 1991 period,
which encouraged setting up of new urban cooperative banks. Further, the
deregulation of interest rates, as available to commercial banks, enabled the UCBs
to mobilize vast deposits, which, together with the liberal licensing policy
propelled the growth of UCBs in terms of numbers as also in size. This significant
growth in business, which has come about in a competitive environment was
largely due to the efforts and the ability of the sector to harness resources from the
small depositors.
Thus, while the sector has shown spectacular growth during the last decade
exhibiting substantial potential for sustained growth, there are certain infirmities in
the sector that have manifested in the form of weakness of some of the entities
resulting in erosion of public confidence and causing concerns to the regulators as
also to the sector at large. There is, thus, a need to harness the benefit of rapid
growth and mitigate the risk to which individual banks and the system are exposed
by providing a regulatory and supervisory framework that will address the
problems of the sector as also the shortcomings of dual control.
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CHAPTER 3
COMPANY PROFILE
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3.1 THE THANE JANATA SAHAKARI BANK LTD (TJSB)
History
With the modest beginning in 1972 in the co-operative field, the dynamism infused
by the Board of Directors, unflinching loyalties of clientele and devotion of staff
has propelled the sound foundation of The Thane Janata Sahakari Bank Ltd
(TJSB) and has emerged as one of the leading multi state scheduled co-operative
Bank in the country.
TJSB presently is catering to the needs of society through a close network of 54
Branches and 1 Extension Counters spread all over the city of Thane, Mumbai,
Navi Mumbai, Nashik, Pune and Satara. All these Branches have made remarkable
progress on all fronts in all these years.
TJSB believes that "customer delight" is the ultimate goal and has a strong belief
that Customers & all Stakeholders wholehearted support, absolute faith and their
patronage has largely been responsible for its enviable growth. TJSB is committed
to provide banking with speed, comfort and convenience.
TJSB feels proud to acknowledge the growth of large number of successful
industrialists, traders and professionals who have grown leaps & bound due to
timely assistance and support of the Bank.
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TJSB has set before a Visionary Growth Plan focusing all business strategies
solely on creation of Stakeholders value.
3.2 PROFILE
? Professional Board and Pragmatic decision making
? Consistent profit and growth for last 38 Years
? Equilibrium in Growth and profits
? Strong Internal Reserves and CRAR at 14.74%
? Balanced Credit Portfolio & focus on Retail /SME Segment
? Strong Focus on Recovery and NPA Management
? First Co-op Bank to offer Bancassurance Product in association with Max
New York
? Anywhere Any Branch Banking facility in all Branches
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? 50 ATM?s installed in Branches at Thane, Mumbai, Pune, Nashik and
Satara
? 24x 7 Cheque Issuance Machine at e-Lobby at Naupada Branch
? 24x 7 Cheque Depository machine at 37 branches
? Value Added services for Customers
3.3 TECHNOLOGY INITIATIVES
TJSB, a Techno-savvy Bank has implemented successfully the Core Banking
Solution (CBS). This has helped the Bank to migrate the Branches from being the
processing centers to marketing customer centric outfits. It will also extend the
Bank?s reach to its customers by multiple delivery channels such as ATM, Internet,
Mobile etc. This has brought the Bank on par with the leading Banks. Bank has
network of 58 ATM?s across Thane, Mumbai, Navi Mumbai, Pune and Nashik.
TJSB is the first Bank in Co-operative sector to install Cheque Depository
Machines at 44 branches, which are operational 24 X 7.
TJSB has put in place Real Time Gross Settlement System (RTGS) transactions.
With Core Banking Solution in place the Bank is Providing RTGS facility to all its
customers.
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TJSB has initiated process for strategic alliance with other Banks for the usage of
their delivery channels by which nearly 60,000 ATMs will be available to Bank?s
customers across the country.
TJSB is first Bank In the country to introduce Automated Cheque Issuance
Machine which enables Customers to take Personalized Cheque Book 24 X 7
i. Business Process Re-engineering
With the successful implementation of Core Banking Solution TJSB has initiated
Business Process.
ii. Re-engineering by establishing
? Specialized Credit Cell
? Specialized Retail Banking Cell
? Centralized Monitoring Cell
? Centralized Back office Processing Cell
? e-lobby
iii. Bancassurance
TJSB (License No. 1126801) is Corporate Agent for Max New York Life
Insurance Co. Ltd. for Life Insurance products and with The Oriental Insurance
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Co. Ltd. for General Insurance. TJSB?s Bancassurance is recognized as one of the
most successful Bancassurance in the country.
"Insurance is the subject matter of solicitation"
3.4 BUSINESS EXPANSION PLANS
TJSB has recognized the opportunity for its expansion through the Merger and
Takeover of the other Banks. To step forward it has recently acquired two Pune
based Co-operative Banks namely The Navjeevan Nagrik Sahakari Bank Ltd and
The Sadguru Jungli Maharaj Sahakari Bank Ltd.
3.5 SPECIAL MENTION
One of the very few co-operative banks to get AD1 license to deal in Foreign
exchange
The Indian Bank Association (IBA) have accolade TJSB with TECHNOLOGY
BANK OF THE YEAR award in the Co-operative Banks category for FY 2009
TJSB has been awarded 1st Prize for the Best Co-Operative Bank in Maharashtra
by “Maharashtra State Urban Bank?s Federation Ltd.”
For the F.Y.2004-2005.
TJSB has been awarded 1st Prize as “Padmabhushan Vasantdada Patil Utkarsha
Nagri Sahakari Bank” for the F.Y.2003-2004 from Kokan Region for the second
time consecutively.
TJSB was recognized amongst top 5 Co-Operative banks in the country, during
centenary celebration of Co-Operative movement by Kalupur Commercial Co-
Operative Bank Ltd.
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With its distinctive culture, as the most trusted bank, TJSB has become the Most
Preferred Bank too.
3.6 24x7 BANKING
i. Technology Services
On the Technology front, Bank has implemented successfully the "Core Banking
Solution" (CBS) developed by M/s Infrasoft Technologies Ltd. Bank has state of
art Data Center This has helped them to migrate the Branches from being the
processing centers to marketing customer's centric outfits. It will also extend the
Bank's reach to its customers by multiple delivery channels such as ATM, Internet,
and Mobile etc. This has brought the Bank on par with the leading Banks. TJSB is
the first Bank in Co-Operative sector to install Cheque Depository Machines at 44
branches, which are operational 24 x 7. TJSB is the first Bank to install Cheque
Book Making and Issuance Machine at Naupada - E-Lobby by which customers
can avail the facility of issuance of Personalized Cheque Book, which is
operational 24 x 7.
ii. ATM?s
All the 58 ATM?s of the bank are connected to Central ATM Switch and
Customers are able to do all the transactions through any of the Branches of the
bank in Thane, Mumbai, Pune, Nashik & Satara.
To overcome the geographical barrier the Bank has made ATM Sharing
Arrangement with BANKS ATM & NFS ATM network. Major Banks
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participating in NFS & BANKS is SBI, IDBI, ICICI, AXIS Bank, HDFC, Bank of
Baroda, Bank of India and etc. Now the TJSB ATM card holder can access all his
TJSB accounts with the ' NEW TJSB ATM Card' from more than 60,000 ATMs
across all over India.
iii. e-Lobby at Naupada Branch
Customer Delight being the Moto the bank has implemented and focusing on
creation of virtual service outlets operated through Customer Activated delivery
channels. The e-Lobby of the Bank at Naupada is now equipped with 3 ATM?s, 2
Cheque Depository machines and 24x7 Automated Cheque Book Issuance
machines.
iv. Cheque Depository Machines
Branches of the Bank are fully equipped with Cheque depository machines giving
the convenience to the customers to deposit the cheques 24x7x365. The printed
acknowledgement is given to the Customers by the Cheque depository machine for
Cheque being deposited in the machine.
v. Automated Cheque Issuance Machine
Bank has always put the thrust on providing value added services to the customers
which will be operational on 24x7x365. As part of this process Bank has installed
the Automated Cheque Issuance Machine at its e-lobby at Naupada Branch. Under
single customer Id all the accounts maintained in the bank will be displayed for
29
selection. Customer has to just enter the Customer Id and secret pin issued to him
and customer?s personalized Cheque book will be issued without any manual
intervention. All the Customers of the bank irrespective of the Branch where the
account is maintained will able to take the benefit of the facility.
vi. SMS Banking
SMS Banking services are available for the Customers of the bank to know the
latest balances and last 3 transactions in their account using the SMS feature of the
Mobile Phones. Apart from Customer pull operations Bank is also giving SMS
alerts to the Customers for clearance of cheques, maturity of terms deposits, return
of the cheques and host of other services.
vii. Statement on E-mail
Customers of the Bank can get the Statement of Account by mail at desired
Intervals.
viii. Business Expansion Plans
TJSB has recognized the opportunity for its expansion through the Merger and
Takeover of the other Banks. To step forward it has recently acquired two Pune
based Co-operative Banks namely The Navjeevan Nagrik Sahakari Bank Ltd and
The Sadguru Jungli Maharaj Sahakari Bank Ltd.
30
3.7 FOREX
FOREIGN EXCHANGE SERVICES
i. Currency Changing
They change all the convertible currencies in exchange of Indian Rupees for our
clients. Also we issue the foreign currency for the persons going on business tour
or leisure trips, individually or in group.
ii. Traveller's Cheque
They issue Travelers cheques of American Express Bank for USD, EURO, GBP
which can be availed by the persons going abroad for business, leisure trips. They
also exchange all travellers? cheques for the customers against rupees
iii. Post- shipment
They handle the documents on collection for our exporters and credit the proceeds
on realization.
They negotiate the documents through our correspondents against specific sanction
of limits.
They grant advance against the export bills sent on collection at a concessional rate
of interest.
They handle the inward remittances received as advance payments for exports.
iv. Import Services
• Import Payments \ Outward Remittances:
31
• Import Letter of Credit:
• Bank Guarantee: Bank Guarantee facility to our clients guaranteeing their
Performance / financial obligations
• Co-acceptance facilities
3.8 CRISIL RATING
CRISIL upgrades rating on THE THANE JANATA SAHAKARI BANK to
„P2+?
CRISIL has upgraded its rating on the bank guarantee facility of The Thane Janata
Sahakari Bank Ltd (TJSB) to„P2+? from „P2?. The upgrade factors in the
comfortable liquidity position of the bank given its adequate resource profile and
conservative asset-liability management policies.
The rating, besides adequate resource profile, also reflects TJSB?s moderate
earnings position. These rating strengths are partially offset by risks inherent in the
urban cooperative banks sector, and TJSB?s average capitalization. While the
bank?s asset quality is better than that of other urban cooperative banks, its gross
non-performing assets remain higher than that of scheduled commercial banks.
32
3.9 FUTURE PLAN
TJSB has some aggressive growth plans. It plans to open new branches in
Karnataka and Gujarat as the new licenses to open branches has been relaxed by
RBI The bank is expecting five more licenses from RBI. Other plans include
having a HRMS system so it all HR related and payroll systems can be
consolidated and streamlined. It would be in line with Employee Self Service
wherein any employee can log into the system to access their personal details as
well as apply for leave online.
33
CHAPTER 4
VARIOUS LOANS IN THANE JANATA SAHAKARI
BANK (TJSB)
34
4.1 COMMERCIAL LOAN
i. TRADECASE
Hassle free credit facility for traders
FEATURES
Types of facility • Term Loan / Overdraft.
Eligibility • The business units like small business enterprises (SBE),
Traders should have been established in the line of
business for a minimum period of 2 years and making
profits for last 2 years and submission of IT returns for 2
years.
Loan Limits • Maximum Rs. 50.00 lacks
Repayment Period • For term loan 60 months (maximum).
Rate of interest • Minimum 15.00% P.A. (Subject to change as per change
in PLR)
Security • Hypothecation of stock and book-debts and Mortgage of
immovable property, (preferably commercial).
35
ii. SANJEEVANI
Lifeline for professionals
FEATURES
(A) Clean overdraft
Nature of facility • clean overdraft for working capital W.C.T.L.
Limit • Up to Rs. 200,000/-
Margin • Nil - Up to Rs. 1.00 Lac
• 10% - Above Rs. 1.00 Lac to Rs. 2.00 Lacks
Guarantors • Nil
Eligibility • Any Professional like Medical Practitioners,
Charted Accountants, Cost Accountants, Company
Secretaries, Architects etc, 3 years in the profession.
Documentation • Professional Qualification certificate.
• Last two year?s assessment order or return copy.
• Proof of address of residence/clinic / hospital / office.
•Copy of Registration Certificate of concerned
authorities for commencing practice.
Interest • 13.50% Floating
Processing charges • @ 0.25% of loan amount. (Min Rs. 500/-)
Exclusive Banking or NOC from existing Banker.
36
Review/Renewal every year.
Security • Hypothecation of Equipment / Furniture / Mortgage
of Property to be purchased.
Prepayment penalty 2.00% on outstanding balance for takeover loan.
(B)Equipment Financing / Purchase of office / furniture
Nature of Facility • Term loan.
Limit Rs.20,00,000/- (maximum)
Security • Hypothecation of Equipment / Furniture / Mortgage
of Property to be purchased.
Guarantors • Up to Rs. 2.00 Lacks - Nil
• Above Rs. 2.00 Lacks up to Rs. 5.00 Lacks - No
Outside guarantors incase of satisfactory track record of
borrowing with our bank.
Interest • 13.50% Floating
(0.5% incentive lacks- No outside guarantors in case of
satisfactory track record of borrowing with our bank.
Margin •10% in Term Deposit.
Repayment • With 48EMI / 60EMI / 72 EMI months with 3 months
moratorium.
Eligibility • Established in profession for minimum period of 3
years.
• Annual Income: Up to Rs.75, 000/-
Maximum Loan; Rs.2.00 lacks.
37
Rs.75, 001/- to Rs.1, 50,000/-
Maximum Loan: Rs.5.00 lacks.
Rs.1, 50,001/- to Rs.3, 00,000/-
Maximum Loan: Rs.10.00 lacks.
Above Rs.3, 00,000/-
Maximum Loan: Rs.20.00 lacks.
• Should not be defaulter for loan
repayment of our Bank.
Documentation • Professional Qualification certificate.
• Last six months Bank Statement.
• Last two years assessment order or Income Tax Return
copy.
• Proof of Residence / Business place.
• Guarantors Income and Residential proof.
• 12 post dated cheques.
• Copy of Registration Certificate of Concerned
Authorities for commencing practice.
Processing charge • @ 1% of loan amount (Min 1000/-)
Prepayment penalty •2.00% on outstanding balance for takeover of
loan by any other financial institutions / Bank etc.
38
EMI TABLE FOR SAJEEVANI
EMI per lack (In Rs.)
INT (% p.a) 36 M 48 M 60 M 84 M
10.25 3211 2527 2119 1659
10.50 3222 2539 2131 1672
10.75 3233 2550 2143 1685
11.00 3244 2561 2155 1697
11.25 3255 2573 2167 1710
11.50 3267 2584 2179 1723
11.75 3278 2596 2191 1736
12.00 3289 2608 2203 1748
12.25 3300 2619 2215 1761
12.50 3311 2631 2227 1774
12.75 3322 2643 2239 1787
13.00 3333 2654 2251 1800
13.50 3356 2678 2275 1826
i. SMALL & MEDIUM SIZE ENTERPRISES
Bank has special focus for extending credit facilities to Small and Medium Size
Enterprises. Bank has customized solutions for Small Business Enterprises, Small
Scale Industries and Medium Scale Industries. Credit Facilities are offered in the
nature of Term Loans for establishment of new industries, acquisition of
39
machineries, technology up-gradation, or execution of ad-hoc orders or for
expansion, modernization or diversification programs. Finance offered will be in
the form of Fund base as well as non fund base facilities as per the requirements of
the Business. Working Capital Term Loan requests are considered for viable small
and medium size enterprises requiring infusion of fresh funds by way of one time
core working capital assistance.
FEATURES:-
Purpose • For establishment \ modernization \ up-gradation of
Fixed Assets
• Setting up Office, Renovation of the premises
• Purchase of vehicles, etc.
• Working Capital Limits
• Export Finance and Guarantee Limits.
Eligibility • Individuals/Partnership Firms /Companies.
• Experience / qualification in the proposed line of
activity.
Loan Amount • As per the project requirement
• Working Capital as per project requirements
• Maximum period up to 84 months.
• Maximum moratorium 6 months.
• Working Capital for one year on renewable basis.
Margin
Requirements
• Minimum of 25 % and project assessment. Security
• Mortgage / Hypothecation of Asset financed.
Processing Fees • 1% of the sanctioned amount ( Minimum - Rs. 1000 )
40
ii. COMMERCIAL & OTHER LOANS :-
Bank is actively lending to all sectors of the Industries \ Business and provide
customized solutions for Small Business activities, Transporters, wholesalers,
stockiest, Distributors, Retailers having exclusive showrooms dealing in FMCG
products, readymade garments, consumer durables, pharmaceutical stores, etc.
Bank also actively considers Working Capital Term Loans for execution of ad-hoc
orders or Loans against mortgage of existing securities for specified purposes.
FEATURES:-
Purpose • For establishment \ modernization \ up-gradation of
Fixed Assets
• Setting up Office, Renovation of the premises
• Purchase of vehicles, etc.
• Working Capital Limits
• Export Finance and Guarantee Limits.
• Eligibility Exiting running business activity and good
track record.
Loan Amount • As per the business requirements
• Working Capital as per assessment
• Maximum period up to 84 months.
• Maximum moratorium 6 months.
• Working Capital for one year on renewable basis.
Margin Requirements.
Margin • Minimum of 25 % Security
41
Requirements • Mortgage / Hypothecation of Asset.
Processing Fees • 1% of the sanctioned amount ( Minimum - Rs. 1000 )
4.2 RETAIL LOAN:-
i. SWAYAM SIDDHA LOAN
Granting loans to the members of “Women Self Help Groups” (SHG) so as to cater
needs of weaker section in the society.
FEATURES:-
“SWAYAM SIDDHA” SCHEME
Type of credit facility • Term Loan to MBG (Max Rs. 2.00 Lacks)
• Term Loan to Individual Members of MBG (Max Rs.
50,000)
Eligibility •MBG should be registered
•MBG should have been in active existence for period of
Six months.
•Size of the Bachat Gat Min 11 and Max 20 persons.
•Savings per month by each member – Min Rs.50/- for
Urban areas and Rs.25/- for semi urban areas.
•There is no ceiling on maximum contributions.
•The saving duration will be for a minimum period of 60
months and maximum period of 120 months.
42
In the form of Recurring Deposit. (RD to be lien marked
till the repayment of loan).
•The person should be a member of MBG. His application
should be referred by Executive / Administrative
body of the MBG under their seal and signature for
consideration of loan proposal.
Loan Limit •Term Loan to MBG (Max Rs. 2.00 Lacks) for on lending
to group members for business, education, ceremonial
purpose and for medical)
•Term Loan to Individual Members of MBG (Max Rs.
50,000)
Max Rs.50,000/ for business.
Max Rs.50, 000/ for education.
Max Rs.15, 000/ for ceremonial expenses.
Max Rs.10, 000/ for medical expenses.
Security , Margin ,
Bank Charges & Pre
Payment charges
•NIL
Repayment period •Max 60 months. The SHG should make repayment to the
Bank.
Rate of Interest •10.50% p.a. at monthly rests.
43
ii. KALPATARU CONSUMER FINANCE SCHEME
“Fulfills all your Dreams & Desires”
FEATURES:-
Purpose •For purchase of Electronic Appliances /Consumer
Durables / Furniture & Fixtures / Two Wheelers etc.
Eligibility •Salaried / Self Employed / Businessman.
Loan Amount •Maximum Rs. 2.00 lacks.
Repayment • Maximum 5 years.
Rate of Interest Floating
• When Salary Deduction is available.
15.00%
• When Salary Deduction is not available.
16.50%
Service Charges • Flat Processing Fees Rs. 750/-
Guarantee / Surety • Personal Guarantee of 1 / 2 persons
Pre-payment • No penalty for pre-payment
Documents Required ? • Income Proof of Applicant(s) & Guarantor(s)
? Residential Proof of Applicant(s) & Guarantor(s)
Original Quotation / Invoice etc.
• First Installment at the time of disbursement
Loan Installment EMI Per Rs.1,00,000/- Loan Amount
36 M 48 M 60 M
@15.00%
p.a.
3,424/- 2,749/- 2,350/-
44
iii. AUTO FINANCE SCHEME
FEATURES
Loan Amount
a. Brand New car •100% of Invoice Value.
b. Second Hand Car •80% of Agreement Value or Valuation
Report whichever is less, if car is up to 2 years old.
•70% Of Agreement Value or Valuation Report
whichever is less, if car is 2 to 3 years old.
Rate of Interest
a. For New Vehicle •Repayment Period up to 3 years. 12.00% Floating
•Repayment Period up to 5yrs. 12.50% Floating
b. Second Hand
Vehicle
•Repayment Period Up to 3 years - 15.00%
For Vehicle less than
3 yrs. old
•Repayment Period up to 3 yrs Loan Up to 2 Lacks -
Loan above 2 Lacks
Service Charges • 0.50% of loan amt. (Min. Rs.2000/-)
EMI Chart
EMI per lack (in Rs.)
INT (% p.a) 36 M 48 M 60 M
12.00 3289 2607 2202
12.50 3311 2631 2227
15.00 3424 2749 2350
45
iv. TRAVEL NOW
Around the world Travel Fast,
Travel Now!
With TRAVEL NOW,
Take off to any part of the globe.
Now, you don't have to save for that annual holiday.
You could take short breaks or long holidays any time of the year. Enjoy
Mauritius, Seychelles, Singapore, Malaysia, Maldives or Shimla, Kulu Manali,
backwaters in Kerala. Think of a place, leave the rest to us.
We have excellent loans for travel for various reasons. Our travel loans are simple
and easy to acquire. Just check out our schemes and Enjoy!
So, get the wings to reach your favorite holiday destinations now! Enjoy families?
holidays or go for business cum holiday trips or simply discover beautiful places in
India and Abroad. For travel - be it holiday or business
Choose TRAVEL NOW
46
FEATURES
Purpose •To meet expenditure of traveling (in India and abroad) for
family or individual tour, for pleasure or business visit for
seminars, high tech exhibitions or group education tours
etc, accommodation, hotel ling and all peripheral expenses.
Loan Amount •Rs. 25,000/-(min.) To Rs. 2.00 Lacks (max.)
Process Fees Rs. 1,000/-
Repayment •12 months to 36 months by post dated cheques in
advance/ECS or any convenient mode mutually agreed
upon with at least 3 blank cheques with undertaking u/s
138 of NI Act.
Age •Minimum 25 years, Maximum 60 years at loan maturity.
Security •NIL
Guarantors •One earning family member or outsider with regular
income tax returns for last 2 years.
Margin •NIL
Membership •Regular membership of borrower.
Requisites •Proof of ownership residence: Residence within
corporation limit with min. flat area 500 sq. ft. built up.
•PAN card
•Proof of traveling: ticket reservation/travel booking copy.
•Self estimation of expenditure.
•One year bank statement of regular or salary account
with healthy operation without cheque return charges &
47
min bal charges.
•Repayment through PDC?s/ECS/through existing
account.
•One time disbursement to account credit.
•One acceptable guarantor.
Rate of Interest •14.00 % (Fixed)
Income Criteria
Professional & Self
Employed
Businessman Salaried
I.T. Return more
than Rs.2.00 Lacks
p.a. for last 3 years.
I.T. Return more than
Rs.2.00 Lacks p.a. for last 3
years.
Form 16 showing income
more than 2.50 Lacks for
last three years.
•All income tax return must have been filed regularly during every year.
•Return filed at one stroke for last 2/3 years will not be considered.
EMI Chart
EMI per lack (in Rs.)
INT (% p.a) 36 M 48 M 60 M
11.00 3244 2561 2155
11.50 3267 2584 2179
12.00 3289 2608 2203
12.50 3311 2631 2227
13.00 3333 2654 2251
13.50 3356 2678 2276
14.00 3378 2701 2300
48
4.3 Loan Process & Credit Analysis in Thane Janata Sahakari Bank
(TJSB)
The Loan Process Flow in TJSB Bank Is As Follows:
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Pre-Qualifying Application Processing Underwriting Closing
The popularity of loan and advances facility provided by TJSB bank is due to its
effectively structured loan process and credit policy. The credit policy is being
revised at regular interval. These efforts resulted in maintaining the NPAs almost
at Zero level Credit analysis of the loan proposal is been carried out as per the
outline of credit policy.
>> Preliminary
determination
of borrowing
capacity and
credit history
>> Fill out
loan
application.
>> Gathering
documents
from
applicant.
>> Consent
letter from
surety.
>> Credit
check.
>> Appraisal
of property.
>> Title
search.
>>
Employment
& residential
history
complied.
>>
Verification of
financial
reserves.
>> Compiling
industrial visit
report.
>> Loan
goes to for
approval.
>> All
conditions
prescribed
in credit
policy are
met.
>> Loan is
approved.
>> Signing
documents
drawn.
>> Documents
sent to title
company.
>> Buyers
bring in money
and sign
documents.
>> Title
company
records deed.
>> Escrow is
now closed.
>> Buyers get
keys to
property.
49
CHAPTER 5
DETAILED STUDY OF HOME LOAN
50
5.1 PURPOSE OF HOUSING LOAN
Owning a piece of land or property is a lifetime dream for every individual. There
are many home loans provider in the market to make your dream come true. But
before you opt for any home loan provider, one need to consider certain factors
related to property that one are interested in buying and also about the salient
features offered by a home loan provider and also study some Home Loans and
Home Insurance FAQs which helps in applying a Home Loan in India.
And the most important thing is one should know about each and every term
related with Home Loans before applying for a Loan. It is always advisable to
consult a home loan expert or consultant before applying for a home loan or
purchasing a property.
One can take different types of home loans like Bridge Loans, Home construction
Loans, Home Equity Loans, Home Extension Loans, Home Improvement Loans,
Land Purchase Loans etc for different schemes available in the market. There are
different types of home loans tailored to meet your needs.
? Home Purchase Loans: These are the basic forms of home loans used for
purchasing of a new home.
? Home Improvement Loans: These loans are given for implementing repair
works, healing and renovations in a home that has already been purchased.
? Home Construction Loans: These loans are available for the construction
of a new home.
? Home Extension Loans: These loans are given for expanding or extending
an existing home. For e.g.: addition of an extra room etc.
? Home Conversion Loans: These loans are available for those who have
financed the present home with a home loan and wish to purchase and move
to another home for which some extra funds are required. Through home
conversion loan, the existing loan is transferred to the new home including
the extra amount required, eliminating the need of pre-payment of the
previous loan.
? Land Purchase Loans: These loans are available for purchasing land for
both construction and investment purposes.
51
? Bridge Loans: Bridge loans are designed for people who wish to sell the
existing home and purchase another one. The bridge loans help finance the
new home, until a buyer is found for the home.
5.2 IMPORTANCE OF HOME LOAN
The rising cost of residential accommodation has led to the popularity of Home
Loans in India. Home loan is the finance borrowed from a bank or financial
institution to buy or modify a residential real estate property. Any Resident or
Non-resident individual who is planning to buy a house in India can apply for a
Home loan. If you have decided to buy a property in the near future you can even
apply for a loan before you select your property. It becomes easier if the property
you are planning to buy is in a condominium or township that is pre-approved by a
bank or financial institution.
Today, the amount of money that a city dweller spends on rent is roughly the same,
or only slightly less than the amount he pays as the EMI (Equated Monthly
Installments) on a housing loan. Home loans are made available by financial
institutions to both Indian and NRI applicants at floating or fixed rate of interest
and also at attractive EMI options:
• For construction or buying a new home
• For purchase of plots for construction of house
• For home repairs and renovations or extension of an existing house or flat
• Against mortgage of property
• Purchase of home consumer durables and furnishings as included in the project
cost
52
5.3 HOME LOAN IN THANE JANATA SAHAKARI BANK
(TJSB)
SADASAVALI HOUSING FINANCE SCHEME
Purpose To acquire /construct House/Flat for self
accommodation or to take over housing loan from
financial institutions.
Loan amount Max. Upto Rs. 15.00 lacs per beneficiary of a dwelling
unit.
Rate of interest
Floating
Loans upto Rs.20 lacks 11.50%
Loans above Rs.20 lacks 11.75%
Margin 15% to 30% as the case may be
Repayment Maximum upto 15 years.
Various repayment
option
Regular/ Step up/Accelerated.
Service charges 0.80% of Loan Amount
(Exclusive of Stamp Duty for Mortgage).
Security Equitable/Registered mortgage of flat/house.
53
CHAPTER 6
DETAILED STUDY OF EDUCATION LOAN
54
6.1 VIDYA SIDDHI EDUCATIONAL LOAN
ELIGIBILITY
? Occupations: Salaried/Self employed/Businessman.
? Gross Income: Above Rs. 8,000/- p.m. Age: Min. 21 years, Max. 60 years at
loan maturity.
? Repayment capacity it will be considered on total income of the applicant
and co-applicant.
? Student as Co-Applicant.
LOAN DETAILS
Quantum of Loan
? Studies in India :Maximum Rs.10.00 lakhs
? Studies abroad :Maximum Rs.15.00 lakhs
Margin of Loan
? Upto Rs. 4.00 Lakhs : NIL
55
? Above Rs. 4.00 lakhs :Studies in India:5 %
? Studies Abroad:15 %
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 completion of the course.
? Any other expense required to complete the course-like study tours, project
work, thesis etc.
RATE OF INTEREST
? 11.05%
REPAYMENT
? Maximum upto 7 years + 18 months moratorium.
SECURITY
? For Loan above Rs.1.00 Lac equivalent collateral security is required.
DOCUMENTS REQUIRED
56
? Income Proof of Applicant(s) & Guarantor(s).
? Residential Proof of Applicant(s) & Guarantor(s)
? Original Quotation / Invoice, etc
? Bank Account Statement One Year
MORATORIUM PERIOD
? Applicable Max 18 months.
6.2 BHUSHAN COMPUTER LOAN SCHEME
“Change the way your Child Learns Gift a COMPUTER Today”
Purpose
? To buy a Personal Computer or laptop for the Students.
57
Guarantee / Surety
? No Guarantors (In case of both the parents are earners).
? One acceptable Guarantor (In case, either of the parents is earner).
Rate of Interest
? 12.00 % P.a. Floating
Eligibility
? Repayment capacity will be considered on total income of the applicant and
co-applicant.
Key Criteria
? Student should open a saving account at any of our branches.
Loan Amount
? Rs. 15,000 to Rs. 1, 00,000/-.
Margin
? Nil.
Repayment
? 60 EMI Maximum.
Service charges
? Flat Processing Fees Rs. 250/-
Documentation Charges
? At actual.
58
Special Feature
? Quick credit delivery and simple documentation.
Security
? Computer/ Laptop.
Information / Documents
? Loan Application Form.
? Income proof of Application (s) & Guarantor (s).
? Residential Proof of Applicant (s) & Guarantor (s). Photocopy of Ration
Card / Municipal Tax Receipt / Society Receipt / Passport / Voter?s
Identity Card.
? Banking. Last six months Statement of Accounts.
? One Photograph of the Applicant / Co-Applicant/ Guarantor.
? Signature Verification.
? Saving account of student with our Bank.
EMI chart
Month 12 24 36 48 60
EMI/Rs. 87.58 46.18 32.44 25.61 21.55
59
CHAPTER 7
DATA ANALYSIS
&
INTERPRETATION
60
Total 100 people were contacted and 50 were respondent.
1. Which is the type of services preferred by you the most?
Interpretation
According to survey, 60% customers prefer ATM service and 8 % of
customer can prefer internet banking service. 8 % customers prefer phone banking
and 10% customers prefer SMS banking, 4% customers prefer Safe deposit lockers
& 10% customers prefer core banking service.
0
5
10
15
20
25
30
Customers
30
4 4
5
2
5
ATM SERVICE
INTERNET BANKING
Phone BANKING
SMS BANKING
SAFE DEPOSIT LOCKERS
CORE BANKING
61
2. Which retail banking product have you availed?
Interpretation
In the above graph, it is indicated that 30% of customers prefer Home Loans
and 18% of customer can availed car loan & 14% for educational loan, this
because of this three are major chunk of retail product. So, rest 26% can availed
personal & 12% for other product availed by customer.
0
2
4
6
8
10
12
14
16
Customers
15
9
7
13
6
Home Loans
Car Loans
Education Loans
Personal Loans
others
62
3. How did you come to know about TJSB products?
Interpretation
10% of customer can awareness the product through television & 40% can
aware through newspaper and magazines & 10%can aware through radio. So this
both can give more information about product to customer. Also 30% can aware
through word of mouth & rest 10% through billboards / hoardings.
0
5
10
15
20
Customers
5
20
5
15
5
Television
Newspaper and magazines
Radio
word of mouth
billboards / hoardings
63
4. Are you satisfied with TJSB loan services?
Interpretation
In this survey 50% of customer can satisfied with TJSB loan services
because it provides core services. Also 20% of customer not satisfied with loan
services provided by TJSB bank & rest 30% cannot decide anything.
0
5
10
15
20
25
Customers
25
10
15
Yes
No
Cant say
64
5. Can TJSB provide better facility than other bank?
Interpretation:
In this survey 20% of customers are satisfied with TJSB?s services as
compared to other bank?s services and 60% of customers are not satisfied with
services of TJSB as compared to other bank?s services & rest 20% cannot decide
anything.
0
5
10
15
20
25
Customers
25
12
13
Yes
No
Cant say
65
CHAPTER 8
CONCLUSION
&
SUGGESTION
66
RECOMMENDATIONS
After learning the credit appraisal process at THANE JANATA SAHAKARI
BANK (TJSB) and observing the findings, I put some of my recommendations
which, firmly believe, would enhance the overall credit delivery process of the
bank and experience of the corporate clients.
My suggestions are as follows
Findings
Currently, the processing of credit proposal is done manually by officers.
Suggestion
The processing of credit appraisal can be expedited by using suitable software
that can help the Bank in calculation of Ratios, credit rating and pricing. The
Bank could therefore make use of tools to evaluate the proposals for different
interest rates and conditions.
Findings
The government and Reserve Bank of India have devised compromise
settlement schemes to help Banks recover nonperforming assets especially for
genuine borrowers. The scheme provides concession and interest waivers so
that immediate settlements can take place.
Suggestion
There are special software available that enables the Bank and the users in
respect of:
? Speedy preparation, evaluation and approval of settlement proposals.
? Availability of reliable information and systems to monitor and
control the recovery process.
? Need document procedure easy to understand customer.
Thus, such software could be installed to prepare and evaluate settlement
schemes.
67
CONCLUSION
The study has been conducted on “study of loans in tjsb” of various services
offered by Thane Janata Sahakari Bank at Thane.
Currently the credit policy of the TJSB Bank is reviewed periodically by taking
into account changes in political environment, economical environment and money
markets, changes in credit policy announced by the Reserve Bank of India and
happening of other events to protect the interest of the Bank and to maintain
profitability.
Proper credit appraisal involving performance of client, sureties and industrial
visits helps bank to reduce its NPAs and hence to reduce its credit risks.
Bank has classified all the sectors in to five different categories such as core sector
general sectors, sensitive sectors, banned sectors and restrictive sectors.
If an individual or Business concern or any other applicant need loan from Bank,
they have to be member of the bank.
Bank use its own credit rating system, CIBIL report as well as confidential report
from other banks as per the needs to judge the credit worthiness of clients.
The study has concluded that the bank should announce more innovative loan
services to their product.
68
ANNEXURE
69
QUESTIONNAIRE TO BANK
1. What Types Loans offered by TJSB bank?
2. On what basis do you provide loan?
3. At what rate of interest loan are provided?
4. What kind of security required for granting loan to customer?
5. What are eligibility criteria of loan taker?
6. What are the processing charges?
7. What are the EMI payables?
8. What are the pre-payment charges?
9. What are the supporting documents required to be submitted while granting
loan?
10. Does the bank require any guarantor? If yes, what documents of the guarantor
are required?
11. On what basis do you provide loan to a NRI?
12. What are the other banking service provide by bank?
13. What is a clean loan?
14. Is an additional guarantor required for Housing Loan?
15. Why insurance of house is required in case of housing loan?
16. Is a housing loan available for purchase of land?
17. Is cost of stamp duty considered in the housing loan?
18. How does TJSB approve working capital loans?
19. What is the repayment schedule like?
70
QUESTIONNAIRE TO CUSTOMER
1. Are you satisfied with TJSB loan services?
2. How did you come to know about TJSB products?
3. Which retail banking product have you availed?
4. Which is the type of services preferred by you the most?
5. Can TJSB provide better facility than other bank?
71
BIBLIOGRAPHY
Books
Financial management - Prasanna Chandra
Banking and law practices – S.L. Gupta
Hand book on co-operative bank- John D?silva
Annual report of tjsb- 2010-2011
Websites
www.rbi.org.in
www.cibil.com
www.thanejanata.co.in
doc_697559353.docx
CHAPTER 1
WHAT IS BANKING
2
1.1 INTRODUCTION
Finance is the life blood of trade, commerce and industry. Now-a-days, bank
money acts as the backbone of modern business. Development of any country
mainly depends upon the banking system.
The term bank is derived from the French word Banco which means a Bench or
Money exchange table. In olden days, European money lenders or money changers
used to display (show) coins of different countries in big heaps (quantity) on
benches or tables for the purpose of lending or exchanging.
A bank is a financial institution which deals with deposits and advances and other
related services. It receives money from those who want to save in the form of
deposits and it lends money to those who need it.
1.2 DEFINITION OF BANK
Oxford Dictionary defines a bank as "an establishment for custody of money,
which it pays out on customer's order."
3
1.3 BANKING SECTOR- AN OVERVIEW
Banking in India originated in the last decades of the 18th century. The oldest bank
in existence in India is the State Bank of India, a government-owned bank that
traces its origins back to June 1806 and that is the 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 then 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 next largest in 1980.
Currently, India has 88 scheduled commercial banks (SCBs) - 27 public sector
banks (that is with the Government of India holding a stake), 31 private banks
(these do not have government stake; they may be publicly listed and traded on
stock exchanges) and 38 foreign banks. They have a combined network of over
53,000 branches and 17,000 ATMs. According to a report by ICRA Limited, a
rating agency, the public sector banks hold over 75 percent of total assets of the
banking industry, with the private and foreign banks holding 18.2% and 6.5% res
The Indian banking sector comprises 26 state sector banks, besides a number of
private as well as co-operative sector players.
The banking sector in India has made significant progress in the last five years –
the growth is well reflected through parameters including profitability, annual
credit growth, and decline in non-performing assets (NPAs). In the last decade, the
sector witnessed many positive developments, as policy makers which comprise
the Reserve Bank of India (RBI), Ministry of Finance and associated government
4
and financial sector regulatory entities, made several distinguished efforts to
improve regulation.
Worth noting is the fact that India?s banking sector has been one of the very few
ones that have actually been able to maintain resilience without much impacting
the growth process.
Growth in the sector has been favored by factors including low defaulter ratio,
strong economic growth, central bank?s regular intervention and pre-emptive
adjustment of monetary policy.
India has the potential to become the third largest banking sector by 2050 after
China and US, according to a PricewaterhouseCoopers (PwC) report titled
“Banking In 2050”. The report states that India has particularly strong long-term
growth potential.
? Indian Banking Sector – Key Drivers
The banking sector in India is expected to have another good year during 2011,
with growth being propelled by factors such as good economic growth, favorable
demographics and low penetration, according to a report titled „Indian banks are
likely to ride an economic growth wave?, by research firm Standard & Poor?s.
? The country?s economy grew by 8.5 per cent in the last fiscal and the
government expects the growth impetus to continue this year as well
? More than 50 per cent of India?s population is under the age of 30 years,
which is a major target group for banks
5
? Penetration of banking services in the country remains low. The government
has set targets to provide banking facilities to all areas with a population of
over 2,000 by March, 2012.
? Indian Banking Sector – Key Statistics
The banking sector in India is well capitalized, with capital ratios being above the
global average. The average tier-1 Capital Adequacy Ratio (CAR) of the Indian
banking industry is above 10 per cent compared to the Basel III norm of 8.5 per
cent including the contingency buffer. Moreover, the Reserve Bank of India, in its
Financial Stability Report (FSR) has also asserted that the sector remains well
capitalized with both core capital adequacy and leverage ratios at comfortable
level.
Efficient internal capital generation, fairly active capital markets, and strong
support from the government ensured good capitalization for most banks. The
overall CAR reached 14 per cent as on March 31, 2011. High levels of public
deposits also ensured a comfortable liquidity profile
The total assets size of the banking industry rose by more than five times between
March 2000 and March 2010 - from US$ 250 billion to more than US$ 1.3 trillion
- a Compound Annual Growth Rate (CAGR) of 18 per cent compared to the
average GDP growth of 7.2 per cent during the same period.
During the last five years, while the annual rate of credit growth was 23 per cent,
profitability was maintained at around 15 per cent.
6
While the Indian banking sector is characterized by the presence of a large number
of players, top 10 banks accounted for a significant 57 per cent share of the total
credit as on March 31, 2011.
Nationalized banks accounted for 52.2 per cent of the aggregate deposits, with
State Bank of India (SBI) and its Associates accounting for 22.1 per cent. The
share of new private sector banks, foreign banks, old private sector banks, and
regional rural banks in aggregate deposits was 13.3 per cent, 4.8 per cent, 4.6 per
cent and 3.0 per cent, respectively, according to RBI?s Quarterly Statistics on
Deposits and Credit of Scheduled Commercial Banks, December 2010.
With respect to gross bank credit, nationalized banks had the highest share of 51.6
per cent in the total bank credit. They were followed by SBI and its associates at
22.7 per cent and new private sector banks at 13.7 per cent. Foreign banks, old
private sector banks and regional rural banks had comparatively lower shares in the
total bank credit at 5.1 per cent, 4.5 per cent and 2.5 per cent, respectively.
India's foreign exchange reserves were US$ 314.6 billion as on July 8, 2011,
according to the data in the weekly statistical supplement (WSS) released by RBI.
Indian bank loans increased by 19.9 per cent year-on- year (y-o-y) as of July 1,
2011, according to the central bank's WSS. Deposits rose by 18.4 per cent from a
year earlier.
? Indian Banking – Trends& Developments
The last three decades have demonstrated a significant increase in the size, spread
and scope of activities of banks in India. The business profile of banks has changed
significantly to include non-traditional activities such as merchant banking, new
7
financial services, mutual funds, etc. The evolution from class banking to mass
banking and rising customer focus is immensely changing the landscape of Indian
banking.
? Payments and banking transactions through mobile phones in India are
likely to reach US$350 billion by 2015, according to global management
consulting firm, The Boston Consulting Group (BCG). This, in turn, will
provide banks, telecom operators, device makers and service providers an
opportunity to earn fee income of US$4.5 billion
? With an objective of increasing the financial inclusion, the SBI has opened
21 new branches, besides, 101 new Automatic Teller Machines (ATMs) and
400 green channel counters.
? Around 350,000 villages spanning the entire India would have access to
financial services offered by banks in the next two financial years, according
to a plan given by banks to the RBI. RBI has directed banks to ensure that
223,473 villages have access to basic financial services by March 2012
? Three local banks have partnered with a global financial technology firm -
Polaris Software with its headquarters in India - to establish a joint venture
IT Company in Bangladesh. The company would start with providing
software solutions to these three banks before selling customized services to
other banks, non-bank financial institutions and insurance companies
respectively.
? Commercial Banks:
In 1969, fourteen major commercial banks were nationalized. In 1980, six
more commercial banks were nationalized. The State Bank of India and its
subsidiaries are also own by the central government. After this amendment the
existing structure has evolved in
8
? Public sector
? Private sector
Public sector banks have either the Government of India or Reserve Bank of India
as the majority shareholder. This segment comprises of:
? State Bank of India (SBI) and its subsidiaries.
? Other nationalized banks.
Private sector banks consist of
? Scheduled Commercial Banks
? Unscheduled Banks
Scheduled commercial Banks constitute those banks which have been included in
the Second Schedule of Reserve Bank Of India (RBI) Act, 1934. RBI in turn
includes only those banks in this schedule which satisfy the criteria laid down vide
section 42 (60 of the Act. Some co-operative banks are scheduled commercial
banks albeit not all co-operative banks are. Being a part of the second schedule
confers some benefits to the bank in terms of access to accommodation by RBI
during the times of liquidity constraints.
9
CHAPTER 2
CO-OPERATIVE BANKING
10
2.1 DEFINATION
“A Co-operative bank, as its name indicates is an institution consisting of a
number of individuals who join together to pool their surplus savings for the
purpose of eliminating the profits of the bankers or money lenders with a view to
distributing the same amongst the depositors and borrowers.”
The Co-operative Banks Act, of 2007 (the Act) defines a co-operative bank
as a co-operative registered as a co-operative bank in terms of the Act whose
members – Are of similar occupation or profession or who are employed by a
common employer or who are employed within the same business district; or Have
common membership in an association or organization, including a business,
religious, social, co-operative, labour or educational group; or have common
membership in an association or organization, including a business, religious,
social, co-operative, labour or educational group; or Reside within the same
defined community or geographical area.
11
2.2 INTRODUCTION
Co-operative bank, in a nutshell, provides financial assistance to the people
with small means to protect them from the debt trap of the moneylenders. It is a
part of vast and powerful structure of co-operative institutions which are engaged
in tasks of production, processing, marketing, distribution, servicing and banking
in India. A co-operative bank is a financial entity which belongs to its members,
who are at the same time the owners and the customers of their bank. Co-operative
banks are often created by persons belonging to the same local or professional
community or sharing a common interest. These banks generally provide their
members with a wide range of banking and financial services (loans, deposits,
banking accounts…). Co-operative banks differ from stockholder banks by their
organization, their goals, their Values and their governance.
The Co-operative Banking System in India is characterized by a relatively
comprehensive network to the grass root level. This sector mainly focuses on the
local population and micro- banking among middle and low income strata of the
society. These banks operate mainly for the benefit of rural areas, particularly the
agricultural sector. According to National Federation of Urban Co-operative Banks
and Credit Societies Ltd., (NAFCUB). the total deposits & lending?s of Co-
operative Banks is much more than Old Private Sector Banks & also the New
Private Sector Banks. This exponential growth of Co-operative Banks is attributed
mainly to their much better local reach, personal interaction with customers, and
their ability to catch the nerve of the local clientele.
Though registered under the Co-operative Societies Act of the Respective States
(where formed originally) the banking related activities of the co-operative banks
12
are also regulated by the Reserve Bank of India. They are governed by the Banking
Regulations Act 1949 and Banking Laws (Co-operative Societies) Act, 1965.
2.3 OVERVIEW OF CO-OPERATIVE BANKS
Co-operative movement is quite well established in India. The first
legislation on co-operation was passed in 1904. In 1914 the Maclagen committee
envisaged a three tier structure for co-operative banking viz. Primary Agricultural
Credit Societies (PACs) at the grass root level, Central Co-operative Banks at the
district level and State Co-operative Banks at state level or Apex Level. The first
urban co-operative bank in India was formed nearly 100 years back in Baroda.
Co-operative Institutions are engaged in all kinds of activities namely
production, processing, marketing, distribution, servicing, and banking in India and
have vast and powerful superstructure. Co-operative Banks are important cogs in
this structure.
In the beginning of 20th century, availability of credit in India, more
particularly in rural areas, was almost absent. Agricultural and related activities
were starved of organized, institutional credit. The rural folk had to depend entirely
on the money lenders, who lent often at usurious rates of interest.
The co-operative banks arrived in India in the beginning of 20th Century as
an official effort to create a new type of institution based on the principles of co-
operative organization and management, suitable for problems peculiar to Indian
conditions. These banks were conceived as substitutes for money lenders, to
13
provide timely and adequate short-term and long-term institutional credit at
reasonable rates of interest.
In the formative stage Co-operative Banks were Urban Co-operative
Societies run on community basis and their lending activities were restricted to
meeting the credit requirements of their members. The concept of Urban Co-
operative Bank was first spelt out by Mehta Bhansali Committee in 1939 which
defined on Urban Co-operative Bank. Provisions of Section 5 (CCV) of Banking
Regulation Act, 1949 (as applicable to Co-operative Societies) defined an Urban
Co-operative Bank as a Primary Co-operative Bank other than a Primary Co-
operative Society was made applicable in 1966.
With gradual growth and also given Philip with the economic boom, urban
banking sector received tremendous boost and started diversifying its credit
portfolio. Besides giving traditional lending activity meeting the credit
requirements of their customers they started catering to various sorts of customers
viz.self-employed, small businessmen / industries, house finance, consumer
finance, personal finance etc.
Categories
There are two main categories of the co-operative
Banks.
(a) Short term lending oriented co-operative Banks - within this category
there are three sub categories of banks viz state co-operative banks, District
co-operative banks and Primary Agricultural co-operative societies.
(b) Long term lending oriented co-operative Banks - within the second
14
category there are land development banks at three levels state level, district
level and village level.
The co-operative banking structure in India is divided into following main 5
categories:
1. Primary Urban Co-op Banks
2. Primary Agricultural Credit Societies
3. District Central Co-op Banks
4. State Co-operative Banks
5. Land Development Banks
2.4 FORMATION OF CO-OPERATIVE SOCIETY
A Co-operative Society can be formed as per the provisions of the Co-operative
Societies Act, 1912. At least ten persons having the capacity to enter into a
contract with common economic objectives, like farming, weaving, consuming,
etc. can form a Co-operative Society.
A joint application along with the bye-laws of the society containing the details
about the society and its members has to be submitted to the Registrar of Co-
operative Societies of the concerned state. After scrutiny of the application and the
bye–laws, the registrar issues a Certificate of Registration.
Requirements for Registration:
1. Application with the signature of all members
2. Bye-laws of the society containing:
15
? Name, address and aims and objectives of the society;
? Names, addresses and occupations of members;
? Mode of admitting new members;
? Share capital and its division.
2.5 CO-OPERATIVE BANKS-STRUCTURE AND FUNCTIONS
The primary objective of a Co-operative bank is to encourage „Thrift and self help?
and to raise resources by way of deposits. Hence the basic tenet of a Co-operative
bank is to encourage the savings habits of its members. Co-operation is definitely a
school of thrift, and co-operative saving create first the basis of funds, which are
then employed for granting credits and for securing the confidence of depositors
and clients.
Another objective of co-operative banks is to lend money to those who may
not have acceptable assets to secure funds, but who is in need of it, especially to
the weaker section of the community. The resources of banks should not be given
to a few chosen members. All members are entitled to get loans and an individual
maximum if fixed to avoid the monopolizing of resources by a few. While lending
money, the Co-operative banks see that they are properly used for productive
purpose. Then only it would be possible for the borrower to repay the loans in
time. The Co-operative system possesses certain qualities, which eliminate the
difficulty encountered by commercial banks when lending to small borrowers. Co-
operative banks are generally local in character and they have local feel. Therefore,
lending by them is more to the needy people of the community and hence recovery
becomes easier. The aim of Co-operative lending is not to weaken a member by
making debt on unbearable burden but to help him to get rid of financial
difficulties by creating assets and to start a new economic life.
16
The purpose of a Co-operative bank is also to offer service to the customer at a
reasonable cost. As profit motive is eliminated, a Co-operative banker can afford to
render services at a reasonable cost. Co-operative banks been enjoying legislative
support from the government. In India, they have been working under the Co-
operative Societies Acts of the respective states and have been provided certain
concessions In order to help them to face challenges from commercial banks. They
now have to pay income tax on their income. At present, Co-operative Banks have
been providing all modern banking services comparable to that offered by any
Commercial Bank.
The functions of Co-operative Banks in India are governed by the Banking
Regulation Act, 1949. The Banking Regulation Act was not applicable to Urban
Co-operative Bank till March 1966. It was made applicable to them with the
ultimate objective of protecting customers interest as large amounts of deposits of
deposits were at stake. According to section 6 of banking Regulation Act, Urban
Co-operative Banks can conduct following functions.
In addition to normal business of banking, Co-operative banks may engage in any
one or more of the following activities namely:
? The borrowing, raising or taking up of money, the lending or advancing
of money either upon or without security, the drawing making accepting
discounting, buying, selling, collecting and dealing of bills of exchange,
hundies, promissory notes, coupons, drafts, bills of landing, railway
receipts, warrants, debentures, certificates, scrip?s and other instruments
and securities whether transferable or negotiable or not; the granting and
issuing of letters of credit, travelers cheques, circular notes: the buying
and selling of foreign exchange, securities and investments of all kinds,
the purchasing and selling of bonds, scrips or valuables on deposits or for
17
safe custody or otherwise, the providing of safe deposits vaults: the
collecting and transmitting and securities.
? Acting as an agent for any government or local authority or any other
persons or persons: the carrying on of agency business of any
descriptions including the clearing and forwarding of goods, giving of
receipts an discharges and otherwise acting as an attorney on behalf of
customers.
? Contracting for public and private loans and negotiating and issuing the
same.
? Carrying on and transacting every kind of guarantee and indemnity
business.
? Managing, selling and realizing any property which may come into the
possession of the Co-operative bank in satisfaction or part satisfaction of
its claims.
? Undertaking and executing trusts.
? Undertaking the administration of estates as executor, trustee or
otherwise:
? The acquisition, construction, maintenance, and alteration of any building
or works necessary or convenient for the purpose of the Co-operative
bank.
? Acquiring and undertaking the whole or any part of the business of any
persons or company or Co-operative society: when such business is of
nature enumerated or described in the sub-section:
? Doing all such other things as are identical or conducive to the promotion
or advancement of the business of the Co-operative bank.
18
? Any other form of business which the central government may by
notification in the official gazette, specify as a form of business in which
it is lawful for a Co-operative bank to engage.
2.6 EVOLUTION OF URBAN CO-OPERATIVE BANKS
The term Urban Co-operative Banks (UCBs), though not formally defined,
refers to primary cooperative banks located in urban and semi-urban areas. These
banks, till 1996, were allowed to lend money only for non-agricultural purposes.
This distinction does not hold today. These banks were traditionally centered on
communities, localities work place groups. They essentially lent to small
borrowers and businesses. Today, their scope of operations has widened
considerably. Currently 1721 Urban Co-operative Bank?s 7500 Branches across
India over 20 Million Members.
The origins of the urban cooperative banking movement in India can be traced
to the close of nineteenth century when, inspired by the success of the experiments
related to the cooperative movement in Britain and the cooperative credit
movement in Germany such societies were set up in India. Cooperative societies
are based on the principles of cooperation, - mutual help, democratic decision
making and open membership. Cooperatives represented a new and alternative
approach to organization as against proprietary firms, partnership firms and joint
stock companies which represent the dominant form of commercial organization.
19
2.7 STRUCTURES AND SPREAD OF UCBs
In terms of geographical spread, UCBs are unevenly distributed across the states.
Five states viz., Maharashtra, Gujarat, Karnataka, Andhra Pradesh and Tamil Nadu
Account for 1523 out of 1942 banks that presently comprise the sector. Further, the
UCBs in these states account for approximately 82% of the deposits and advances
of the sector as may be seen from the table below:
Name of the
State
No of
banks in
operation
% to
total
no. of
banks
Deposits
(Rupees
in
Lakhs)
% of
deposits
to total
deposits
Advance
(Rupees in
Lakhs)
% of
Advanc
es to
total
advance
s.
Maharashtra 639 26.68 60,72,498 55.08 37,42,401.2 55.09
Gujarat 321 15.24 16,27,946 14.77 9,70,287.03 14.28
Karnataka 300 14.25 8,35,274 7.58 5,37,186.7 7.91
Tamil Nadu 132 6.27 3,10,521 2.82 2,12,113.28 3.12
Andhra
Pradesh
131 6.22 2,11,324 1.92 1,37,888.23 2.03
Total 1,523 2,106 90,57,563 82.15 55,99,876.5 82.44
For all UCBs in the country, the total Deposits are Rs. 1, 10, 25,642 Lakhs and
total Advance are Rs. 67, 93,017 Lakhs.
20
2.8 PRESENT STATUS OF UCBs
The urban cooperative banking system has witnessed phenomenal growth during
the last one and a half decades. From 1307 urban cooperative banks (UCBs) in
1991, the number of UCBs has risen to 2105 in the year 2004. Deposits have
increased by over 1100 percent from Rs.8600 crore to over Rs.100, 000 crore,
while advances have risen from Rs.7800 crore to over Rs.65, 000 i.e. by 733
percent during the above 15-year period. This growth path has been possible
mainly on account of the enabling policy environment in the Post 1991 period,
which encouraged setting up of new urban cooperative banks. Further, the
deregulation of interest rates, as available to commercial banks, enabled the UCBs
to mobilize vast deposits, which, together with the liberal licensing policy
propelled the growth of UCBs in terms of numbers as also in size. This significant
growth in business, which has come about in a competitive environment was
largely due to the efforts and the ability of the sector to harness resources from the
small depositors.
Thus, while the sector has shown spectacular growth during the last decade
exhibiting substantial potential for sustained growth, there are certain infirmities in
the sector that have manifested in the form of weakness of some of the entities
resulting in erosion of public confidence and causing concerns to the regulators as
also to the sector at large. There is, thus, a need to harness the benefit of rapid
growth and mitigate the risk to which individual banks and the system are exposed
by providing a regulatory and supervisory framework that will address the
problems of the sector as also the shortcomings of dual control.
21
CHAPTER 3
COMPANY PROFILE
22
3.1 THE THANE JANATA SAHAKARI BANK LTD (TJSB)
History
With the modest beginning in 1972 in the co-operative field, the dynamism infused
by the Board of Directors, unflinching loyalties of clientele and devotion of staff
has propelled the sound foundation of The Thane Janata Sahakari Bank Ltd
(TJSB) and has emerged as one of the leading multi state scheduled co-operative
Bank in the country.
TJSB presently is catering to the needs of society through a close network of 54
Branches and 1 Extension Counters spread all over the city of Thane, Mumbai,
Navi Mumbai, Nashik, Pune and Satara. All these Branches have made remarkable
progress on all fronts in all these years.
TJSB believes that "customer delight" is the ultimate goal and has a strong belief
that Customers & all Stakeholders wholehearted support, absolute faith and their
patronage has largely been responsible for its enviable growth. TJSB is committed
to provide banking with speed, comfort and convenience.
TJSB feels proud to acknowledge the growth of large number of successful
industrialists, traders and professionals who have grown leaps & bound due to
timely assistance and support of the Bank.
23
TJSB has set before a Visionary Growth Plan focusing all business strategies
solely on creation of Stakeholders value.
3.2 PROFILE
? Professional Board and Pragmatic decision making
? Consistent profit and growth for last 38 Years
? Equilibrium in Growth and profits
? Strong Internal Reserves and CRAR at 14.74%
? Balanced Credit Portfolio & focus on Retail /SME Segment
? Strong Focus on Recovery and NPA Management
? First Co-op Bank to offer Bancassurance Product in association with Max
New York
? Anywhere Any Branch Banking facility in all Branches
24
? 50 ATM?s installed in Branches at Thane, Mumbai, Pune, Nashik and
Satara
? 24x 7 Cheque Issuance Machine at e-Lobby at Naupada Branch
? 24x 7 Cheque Depository machine at 37 branches
? Value Added services for Customers
3.3 TECHNOLOGY INITIATIVES
TJSB, a Techno-savvy Bank has implemented successfully the Core Banking
Solution (CBS). This has helped the Bank to migrate the Branches from being the
processing centers to marketing customer centric outfits. It will also extend the
Bank?s reach to its customers by multiple delivery channels such as ATM, Internet,
Mobile etc. This has brought the Bank on par with the leading Banks. Bank has
network of 58 ATM?s across Thane, Mumbai, Navi Mumbai, Pune and Nashik.
TJSB is the first Bank in Co-operative sector to install Cheque Depository
Machines at 44 branches, which are operational 24 X 7.
TJSB has put in place Real Time Gross Settlement System (RTGS) transactions.
With Core Banking Solution in place the Bank is Providing RTGS facility to all its
customers.
25
TJSB has initiated process for strategic alliance with other Banks for the usage of
their delivery channels by which nearly 60,000 ATMs will be available to Bank?s
customers across the country.
TJSB is first Bank In the country to introduce Automated Cheque Issuance
Machine which enables Customers to take Personalized Cheque Book 24 X 7
i. Business Process Re-engineering
With the successful implementation of Core Banking Solution TJSB has initiated
Business Process.
ii. Re-engineering by establishing
? Specialized Credit Cell
? Specialized Retail Banking Cell
? Centralized Monitoring Cell
? Centralized Back office Processing Cell
? e-lobby
iii. Bancassurance
TJSB (License No. 1126801) is Corporate Agent for Max New York Life
Insurance Co. Ltd. for Life Insurance products and with The Oriental Insurance
26
Co. Ltd. for General Insurance. TJSB?s Bancassurance is recognized as one of the
most successful Bancassurance in the country.
"Insurance is the subject matter of solicitation"
3.4 BUSINESS EXPANSION PLANS
TJSB has recognized the opportunity for its expansion through the Merger and
Takeover of the other Banks. To step forward it has recently acquired two Pune
based Co-operative Banks namely The Navjeevan Nagrik Sahakari Bank Ltd and
The Sadguru Jungli Maharaj Sahakari Bank Ltd.
3.5 SPECIAL MENTION
One of the very few co-operative banks to get AD1 license to deal in Foreign
exchange
The Indian Bank Association (IBA) have accolade TJSB with TECHNOLOGY
BANK OF THE YEAR award in the Co-operative Banks category for FY 2009
TJSB has been awarded 1st Prize for the Best Co-Operative Bank in Maharashtra
by “Maharashtra State Urban Bank?s Federation Ltd.”
For the F.Y.2004-2005.
TJSB has been awarded 1st Prize as “Padmabhushan Vasantdada Patil Utkarsha
Nagri Sahakari Bank” for the F.Y.2003-2004 from Kokan Region for the second
time consecutively.
TJSB was recognized amongst top 5 Co-Operative banks in the country, during
centenary celebration of Co-Operative movement by Kalupur Commercial Co-
Operative Bank Ltd.
27
With its distinctive culture, as the most trusted bank, TJSB has become the Most
Preferred Bank too.
3.6 24x7 BANKING
i. Technology Services
On the Technology front, Bank has implemented successfully the "Core Banking
Solution" (CBS) developed by M/s Infrasoft Technologies Ltd. Bank has state of
art Data Center This has helped them to migrate the Branches from being the
processing centers to marketing customer's centric outfits. It will also extend the
Bank's reach to its customers by multiple delivery channels such as ATM, Internet,
and Mobile etc. This has brought the Bank on par with the leading Banks. TJSB is
the first Bank in Co-Operative sector to install Cheque Depository Machines at 44
branches, which are operational 24 x 7. TJSB is the first Bank to install Cheque
Book Making and Issuance Machine at Naupada - E-Lobby by which customers
can avail the facility of issuance of Personalized Cheque Book, which is
operational 24 x 7.
ii. ATM?s
All the 58 ATM?s of the bank are connected to Central ATM Switch and
Customers are able to do all the transactions through any of the Branches of the
bank in Thane, Mumbai, Pune, Nashik & Satara.
To overcome the geographical barrier the Bank has made ATM Sharing
Arrangement with BANKS ATM & NFS ATM network. Major Banks
28
participating in NFS & BANKS is SBI, IDBI, ICICI, AXIS Bank, HDFC, Bank of
Baroda, Bank of India and etc. Now the TJSB ATM card holder can access all his
TJSB accounts with the ' NEW TJSB ATM Card' from more than 60,000 ATMs
across all over India.
iii. e-Lobby at Naupada Branch
Customer Delight being the Moto the bank has implemented and focusing on
creation of virtual service outlets operated through Customer Activated delivery
channels. The e-Lobby of the Bank at Naupada is now equipped with 3 ATM?s, 2
Cheque Depository machines and 24x7 Automated Cheque Book Issuance
machines.
iv. Cheque Depository Machines
Branches of the Bank are fully equipped with Cheque depository machines giving
the convenience to the customers to deposit the cheques 24x7x365. The printed
acknowledgement is given to the Customers by the Cheque depository machine for
Cheque being deposited in the machine.
v. Automated Cheque Issuance Machine
Bank has always put the thrust on providing value added services to the customers
which will be operational on 24x7x365. As part of this process Bank has installed
the Automated Cheque Issuance Machine at its e-lobby at Naupada Branch. Under
single customer Id all the accounts maintained in the bank will be displayed for
29
selection. Customer has to just enter the Customer Id and secret pin issued to him
and customer?s personalized Cheque book will be issued without any manual
intervention. All the Customers of the bank irrespective of the Branch where the
account is maintained will able to take the benefit of the facility.
vi. SMS Banking
SMS Banking services are available for the Customers of the bank to know the
latest balances and last 3 transactions in their account using the SMS feature of the
Mobile Phones. Apart from Customer pull operations Bank is also giving SMS
alerts to the Customers for clearance of cheques, maturity of terms deposits, return
of the cheques and host of other services.
vii. Statement on E-mail
Customers of the Bank can get the Statement of Account by mail at desired
Intervals.
viii. Business Expansion Plans
TJSB has recognized the opportunity for its expansion through the Merger and
Takeover of the other Banks. To step forward it has recently acquired two Pune
based Co-operative Banks namely The Navjeevan Nagrik Sahakari Bank Ltd and
The Sadguru Jungli Maharaj Sahakari Bank Ltd.
30
3.7 FOREX
FOREIGN EXCHANGE SERVICES
i. Currency Changing
They change all the convertible currencies in exchange of Indian Rupees for our
clients. Also we issue the foreign currency for the persons going on business tour
or leisure trips, individually or in group.
ii. Traveller's Cheque
They issue Travelers cheques of American Express Bank for USD, EURO, GBP
which can be availed by the persons going abroad for business, leisure trips. They
also exchange all travellers? cheques for the customers against rupees
iii. Post- shipment
They handle the documents on collection for our exporters and credit the proceeds
on realization.
They negotiate the documents through our correspondents against specific sanction
of limits.
They grant advance against the export bills sent on collection at a concessional rate
of interest.
They handle the inward remittances received as advance payments for exports.
iv. Import Services
• Import Payments \ Outward Remittances:
31
• Import Letter of Credit:
• Bank Guarantee: Bank Guarantee facility to our clients guaranteeing their
Performance / financial obligations
• Co-acceptance facilities
3.8 CRISIL RATING
CRISIL upgrades rating on THE THANE JANATA SAHAKARI BANK to
„P2+?
CRISIL has upgraded its rating on the bank guarantee facility of The Thane Janata
Sahakari Bank Ltd (TJSB) to„P2+? from „P2?. The upgrade factors in the
comfortable liquidity position of the bank given its adequate resource profile and
conservative asset-liability management policies.
The rating, besides adequate resource profile, also reflects TJSB?s moderate
earnings position. These rating strengths are partially offset by risks inherent in the
urban cooperative banks sector, and TJSB?s average capitalization. While the
bank?s asset quality is better than that of other urban cooperative banks, its gross
non-performing assets remain higher than that of scheduled commercial banks.
32
3.9 FUTURE PLAN
TJSB has some aggressive growth plans. It plans to open new branches in
Karnataka and Gujarat as the new licenses to open branches has been relaxed by
RBI The bank is expecting five more licenses from RBI. Other plans include
having a HRMS system so it all HR related and payroll systems can be
consolidated and streamlined. It would be in line with Employee Self Service
wherein any employee can log into the system to access their personal details as
well as apply for leave online.
33
CHAPTER 4
VARIOUS LOANS IN THANE JANATA SAHAKARI
BANK (TJSB)
34
4.1 COMMERCIAL LOAN
i. TRADECASE
Hassle free credit facility for traders
FEATURES
Types of facility • Term Loan / Overdraft.
Eligibility • The business units like small business enterprises (SBE),
Traders should have been established in the line of
business for a minimum period of 2 years and making
profits for last 2 years and submission of IT returns for 2
years.
Loan Limits • Maximum Rs. 50.00 lacks
Repayment Period • For term loan 60 months (maximum).
Rate of interest • Minimum 15.00% P.A. (Subject to change as per change
in PLR)
Security • Hypothecation of stock and book-debts and Mortgage of
immovable property, (preferably commercial).
35
ii. SANJEEVANI
Lifeline for professionals
FEATURES
(A) Clean overdraft
Nature of facility • clean overdraft for working capital W.C.T.L.
Limit • Up to Rs. 200,000/-
Margin • Nil - Up to Rs. 1.00 Lac
• 10% - Above Rs. 1.00 Lac to Rs. 2.00 Lacks
Guarantors • Nil
Eligibility • Any Professional like Medical Practitioners,
Charted Accountants, Cost Accountants, Company
Secretaries, Architects etc, 3 years in the profession.
Documentation • Professional Qualification certificate.
• Last two year?s assessment order or return copy.
• Proof of address of residence/clinic / hospital / office.
•Copy of Registration Certificate of concerned
authorities for commencing practice.
Interest • 13.50% Floating
Processing charges • @ 0.25% of loan amount. (Min Rs. 500/-)
Exclusive Banking or NOC from existing Banker.
36
Review/Renewal every year.
Security • Hypothecation of Equipment / Furniture / Mortgage
of Property to be purchased.
Prepayment penalty 2.00% on outstanding balance for takeover loan.
(B)Equipment Financing / Purchase of office / furniture
Nature of Facility • Term loan.
Limit Rs.20,00,000/- (maximum)
Security • Hypothecation of Equipment / Furniture / Mortgage
of Property to be purchased.
Guarantors • Up to Rs. 2.00 Lacks - Nil
• Above Rs. 2.00 Lacks up to Rs. 5.00 Lacks - No
Outside guarantors incase of satisfactory track record of
borrowing with our bank.
Interest • 13.50% Floating
(0.5% incentive lacks- No outside guarantors in case of
satisfactory track record of borrowing with our bank.
Margin •10% in Term Deposit.
Repayment • With 48EMI / 60EMI / 72 EMI months with 3 months
moratorium.
Eligibility • Established in profession for minimum period of 3
years.
• Annual Income: Up to Rs.75, 000/-
Maximum Loan; Rs.2.00 lacks.
37
Rs.75, 001/- to Rs.1, 50,000/-
Maximum Loan: Rs.5.00 lacks.
Rs.1, 50,001/- to Rs.3, 00,000/-
Maximum Loan: Rs.10.00 lacks.
Above Rs.3, 00,000/-
Maximum Loan: Rs.20.00 lacks.
• Should not be defaulter for loan
repayment of our Bank.
Documentation • Professional Qualification certificate.
• Last six months Bank Statement.
• Last two years assessment order or Income Tax Return
copy.
• Proof of Residence / Business place.
• Guarantors Income and Residential proof.
• 12 post dated cheques.
• Copy of Registration Certificate of Concerned
Authorities for commencing practice.
Processing charge • @ 1% of loan amount (Min 1000/-)
Prepayment penalty •2.00% on outstanding balance for takeover of
loan by any other financial institutions / Bank etc.
38
EMI TABLE FOR SAJEEVANI
EMI per lack (In Rs.)
INT (% p.a) 36 M 48 M 60 M 84 M
10.25 3211 2527 2119 1659
10.50 3222 2539 2131 1672
10.75 3233 2550 2143 1685
11.00 3244 2561 2155 1697
11.25 3255 2573 2167 1710
11.50 3267 2584 2179 1723
11.75 3278 2596 2191 1736
12.00 3289 2608 2203 1748
12.25 3300 2619 2215 1761
12.50 3311 2631 2227 1774
12.75 3322 2643 2239 1787
13.00 3333 2654 2251 1800
13.50 3356 2678 2275 1826
i. SMALL & MEDIUM SIZE ENTERPRISES
Bank has special focus for extending credit facilities to Small and Medium Size
Enterprises. Bank has customized solutions for Small Business Enterprises, Small
Scale Industries and Medium Scale Industries. Credit Facilities are offered in the
nature of Term Loans for establishment of new industries, acquisition of
39
machineries, technology up-gradation, or execution of ad-hoc orders or for
expansion, modernization or diversification programs. Finance offered will be in
the form of Fund base as well as non fund base facilities as per the requirements of
the Business. Working Capital Term Loan requests are considered for viable small
and medium size enterprises requiring infusion of fresh funds by way of one time
core working capital assistance.
FEATURES:-
Purpose • For establishment \ modernization \ up-gradation of
Fixed Assets
• Setting up Office, Renovation of the premises
• Purchase of vehicles, etc.
• Working Capital Limits
• Export Finance and Guarantee Limits.
Eligibility • Individuals/Partnership Firms /Companies.
• Experience / qualification in the proposed line of
activity.
Loan Amount • As per the project requirement
• Working Capital as per project requirements
• Maximum period up to 84 months.
• Maximum moratorium 6 months.
• Working Capital for one year on renewable basis.
Margin
Requirements
• Minimum of 25 % and project assessment. Security
• Mortgage / Hypothecation of Asset financed.
Processing Fees • 1% of the sanctioned amount ( Minimum - Rs. 1000 )
40
ii. COMMERCIAL & OTHER LOANS :-
Bank is actively lending to all sectors of the Industries \ Business and provide
customized solutions for Small Business activities, Transporters, wholesalers,
stockiest, Distributors, Retailers having exclusive showrooms dealing in FMCG
products, readymade garments, consumer durables, pharmaceutical stores, etc.
Bank also actively considers Working Capital Term Loans for execution of ad-hoc
orders or Loans against mortgage of existing securities for specified purposes.
FEATURES:-
Purpose • For establishment \ modernization \ up-gradation of
Fixed Assets
• Setting up Office, Renovation of the premises
• Purchase of vehicles, etc.
• Working Capital Limits
• Export Finance and Guarantee Limits.
• Eligibility Exiting running business activity and good
track record.
Loan Amount • As per the business requirements
• Working Capital as per assessment
• Maximum period up to 84 months.
• Maximum moratorium 6 months.
• Working Capital for one year on renewable basis.
Margin Requirements.
Margin • Minimum of 25 % Security
41
Requirements • Mortgage / Hypothecation of Asset.
Processing Fees • 1% of the sanctioned amount ( Minimum - Rs. 1000 )
4.2 RETAIL LOAN:-
i. SWAYAM SIDDHA LOAN
Granting loans to the members of “Women Self Help Groups” (SHG) so as to cater
needs of weaker section in the society.
FEATURES:-
“SWAYAM SIDDHA” SCHEME
Type of credit facility • Term Loan to MBG (Max Rs. 2.00 Lacks)
• Term Loan to Individual Members of MBG (Max Rs.
50,000)
Eligibility •MBG should be registered
•MBG should have been in active existence for period of
Six months.
•Size of the Bachat Gat Min 11 and Max 20 persons.
•Savings per month by each member – Min Rs.50/- for
Urban areas and Rs.25/- for semi urban areas.
•There is no ceiling on maximum contributions.
•The saving duration will be for a minimum period of 60
months and maximum period of 120 months.
42
In the form of Recurring Deposit. (RD to be lien marked
till the repayment of loan).
•The person should be a member of MBG. His application
should be referred by Executive / Administrative
body of the MBG under their seal and signature for
consideration of loan proposal.
Loan Limit •Term Loan to MBG (Max Rs. 2.00 Lacks) for on lending
to group members for business, education, ceremonial
purpose and for medical)
•Term Loan to Individual Members of MBG (Max Rs.
50,000)
Max Rs.50,000/ for business.
Max Rs.50, 000/ for education.
Max Rs.15, 000/ for ceremonial expenses.
Max Rs.10, 000/ for medical expenses.
Security , Margin ,
Bank Charges & Pre
Payment charges
•NIL
Repayment period •Max 60 months. The SHG should make repayment to the
Bank.
Rate of Interest •10.50% p.a. at monthly rests.
43
ii. KALPATARU CONSUMER FINANCE SCHEME
“Fulfills all your Dreams & Desires”
FEATURES:-
Purpose •For purchase of Electronic Appliances /Consumer
Durables / Furniture & Fixtures / Two Wheelers etc.
Eligibility •Salaried / Self Employed / Businessman.
Loan Amount •Maximum Rs. 2.00 lacks.
Repayment • Maximum 5 years.
Rate of Interest Floating
• When Salary Deduction is available.
15.00%
• When Salary Deduction is not available.
16.50%
Service Charges • Flat Processing Fees Rs. 750/-
Guarantee / Surety • Personal Guarantee of 1 / 2 persons
Pre-payment • No penalty for pre-payment
Documents Required ? • Income Proof of Applicant(s) & Guarantor(s)
? Residential Proof of Applicant(s) & Guarantor(s)
Original Quotation / Invoice etc.
• First Installment at the time of disbursement
Loan Installment EMI Per Rs.1,00,000/- Loan Amount
36 M 48 M 60 M
@15.00%
p.a.
3,424/- 2,749/- 2,350/-
44
iii. AUTO FINANCE SCHEME
FEATURES
Loan Amount
a. Brand New car •100% of Invoice Value.
b. Second Hand Car •80% of Agreement Value or Valuation
Report whichever is less, if car is up to 2 years old.
•70% Of Agreement Value or Valuation Report
whichever is less, if car is 2 to 3 years old.
Rate of Interest
a. For New Vehicle •Repayment Period up to 3 years. 12.00% Floating
•Repayment Period up to 5yrs. 12.50% Floating
b. Second Hand
Vehicle
•Repayment Period Up to 3 years - 15.00%
For Vehicle less than
3 yrs. old
•Repayment Period up to 3 yrs Loan Up to 2 Lacks -
Loan above 2 Lacks
Service Charges • 0.50% of loan amt. (Min. Rs.2000/-)
EMI Chart
EMI per lack (in Rs.)
INT (% p.a) 36 M 48 M 60 M
12.00 3289 2607 2202
12.50 3311 2631 2227
15.00 3424 2749 2350
45
iv. TRAVEL NOW
Around the world Travel Fast,
Travel Now!
With TRAVEL NOW,
Take off to any part of the globe.
Now, you don't have to save for that annual holiday.
You could take short breaks or long holidays any time of the year. Enjoy
Mauritius, Seychelles, Singapore, Malaysia, Maldives or Shimla, Kulu Manali,
backwaters in Kerala. Think of a place, leave the rest to us.
We have excellent loans for travel for various reasons. Our travel loans are simple
and easy to acquire. Just check out our schemes and Enjoy!
So, get the wings to reach your favorite holiday destinations now! Enjoy families?
holidays or go for business cum holiday trips or simply discover beautiful places in
India and Abroad. For travel - be it holiday or business
Choose TRAVEL NOW
46
FEATURES
Purpose •To meet expenditure of traveling (in India and abroad) for
family or individual tour, for pleasure or business visit for
seminars, high tech exhibitions or group education tours
etc, accommodation, hotel ling and all peripheral expenses.
Loan Amount •Rs. 25,000/-(min.) To Rs. 2.00 Lacks (max.)
Process Fees Rs. 1,000/-
Repayment •12 months to 36 months by post dated cheques in
advance/ECS or any convenient mode mutually agreed
upon with at least 3 blank cheques with undertaking u/s
138 of NI Act.
Age •Minimum 25 years, Maximum 60 years at loan maturity.
Security •NIL
Guarantors •One earning family member or outsider with regular
income tax returns for last 2 years.
Margin •NIL
Membership •Regular membership of borrower.
Requisites •Proof of ownership residence: Residence within
corporation limit with min. flat area 500 sq. ft. built up.
•PAN card
•Proof of traveling: ticket reservation/travel booking copy.
•Self estimation of expenditure.
•One year bank statement of regular or salary account
with healthy operation without cheque return charges &
47
min bal charges.
•Repayment through PDC?s/ECS/through existing
account.
•One time disbursement to account credit.
•One acceptable guarantor.
Rate of Interest •14.00 % (Fixed)
Income Criteria
Professional & Self
Employed
Businessman Salaried
I.T. Return more
than Rs.2.00 Lacks
p.a. for last 3 years.
I.T. Return more than
Rs.2.00 Lacks p.a. for last 3
years.
Form 16 showing income
more than 2.50 Lacks for
last three years.
•All income tax return must have been filed regularly during every year.
•Return filed at one stroke for last 2/3 years will not be considered.
EMI Chart
EMI per lack (in Rs.)
INT (% p.a) 36 M 48 M 60 M
11.00 3244 2561 2155
11.50 3267 2584 2179
12.00 3289 2608 2203
12.50 3311 2631 2227
13.00 3333 2654 2251
13.50 3356 2678 2276
14.00 3378 2701 2300
48
4.3 Loan Process & Credit Analysis in Thane Janata Sahakari Bank
(TJSB)
The Loan Process Flow in TJSB Bank Is As Follows:
Stage 1 Stage 2 Stage 3 Stage 4 Stage 5
Pre-Qualifying Application Processing Underwriting Closing
The popularity of loan and advances facility provided by TJSB bank is due to its
effectively structured loan process and credit policy. The credit policy is being
revised at regular interval. These efforts resulted in maintaining the NPAs almost
at Zero level Credit analysis of the loan proposal is been carried out as per the
outline of credit policy.
>> Preliminary
determination
of borrowing
capacity and
credit history
>> Fill out
loan
application.
>> Gathering
documents
from
applicant.
>> Consent
letter from
surety.
>> Credit
check.
>> Appraisal
of property.
>> Title
search.
>>
Employment
& residential
history
complied.
>>
Verification of
financial
reserves.
>> Compiling
industrial visit
report.
>> Loan
goes to for
approval.
>> All
conditions
prescribed
in credit
policy are
met.
>> Loan is
approved.
>> Signing
documents
drawn.
>> Documents
sent to title
company.
>> Buyers
bring in money
and sign
documents.
>> Title
company
records deed.
>> Escrow is
now closed.
>> Buyers get
keys to
property.
49
CHAPTER 5
DETAILED STUDY OF HOME LOAN
50
5.1 PURPOSE OF HOUSING LOAN
Owning a piece of land or property is a lifetime dream for every individual. There
are many home loans provider in the market to make your dream come true. But
before you opt for any home loan provider, one need to consider certain factors
related to property that one are interested in buying and also about the salient
features offered by a home loan provider and also study some Home Loans and
Home Insurance FAQs which helps in applying a Home Loan in India.
And the most important thing is one should know about each and every term
related with Home Loans before applying for a Loan. It is always advisable to
consult a home loan expert or consultant before applying for a home loan or
purchasing a property.
One can take different types of home loans like Bridge Loans, Home construction
Loans, Home Equity Loans, Home Extension Loans, Home Improvement Loans,
Land Purchase Loans etc for different schemes available in the market. There are
different types of home loans tailored to meet your needs.
? Home Purchase Loans: These are the basic forms of home loans used for
purchasing of a new home.
? Home Improvement Loans: These loans are given for implementing repair
works, healing and renovations in a home that has already been purchased.
? Home Construction Loans: These loans are available for the construction
of a new home.
? Home Extension Loans: These loans are given for expanding or extending
an existing home. For e.g.: addition of an extra room etc.
? Home Conversion Loans: These loans are available for those who have
financed the present home with a home loan and wish to purchase and move
to another home for which some extra funds are required. Through home
conversion loan, the existing loan is transferred to the new home including
the extra amount required, eliminating the need of pre-payment of the
previous loan.
? Land Purchase Loans: These loans are available for purchasing land for
both construction and investment purposes.
51
? Bridge Loans: Bridge loans are designed for people who wish to sell the
existing home and purchase another one. The bridge loans help finance the
new home, until a buyer is found for the home.
5.2 IMPORTANCE OF HOME LOAN
The rising cost of residential accommodation has led to the popularity of Home
Loans in India. Home loan is the finance borrowed from a bank or financial
institution to buy or modify a residential real estate property. Any Resident or
Non-resident individual who is planning to buy a house in India can apply for a
Home loan. If you have decided to buy a property in the near future you can even
apply for a loan before you select your property. It becomes easier if the property
you are planning to buy is in a condominium or township that is pre-approved by a
bank or financial institution.
Today, the amount of money that a city dweller spends on rent is roughly the same,
or only slightly less than the amount he pays as the EMI (Equated Monthly
Installments) on a housing loan. Home loans are made available by financial
institutions to both Indian and NRI applicants at floating or fixed rate of interest
and also at attractive EMI options:
• For construction or buying a new home
• For purchase of plots for construction of house
• For home repairs and renovations or extension of an existing house or flat
• Against mortgage of property
• Purchase of home consumer durables and furnishings as included in the project
cost
52
5.3 HOME LOAN IN THANE JANATA SAHAKARI BANK
(TJSB)
SADASAVALI HOUSING FINANCE SCHEME
Purpose To acquire /construct House/Flat for self
accommodation or to take over housing loan from
financial institutions.
Loan amount Max. Upto Rs. 15.00 lacs per beneficiary of a dwelling
unit.
Rate of interest
Floating
Loans upto Rs.20 lacks 11.50%
Loans above Rs.20 lacks 11.75%
Margin 15% to 30% as the case may be
Repayment Maximum upto 15 years.
Various repayment
option
Regular/ Step up/Accelerated.
Service charges 0.80% of Loan Amount
(Exclusive of Stamp Duty for Mortgage).
Security Equitable/Registered mortgage of flat/house.
53
CHAPTER 6
DETAILED STUDY OF EDUCATION LOAN
54
6.1 VIDYA SIDDHI EDUCATIONAL LOAN
ELIGIBILITY
? Occupations: Salaried/Self employed/Businessman.
? Gross Income: Above Rs. 8,000/- p.m. Age: Min. 21 years, Max. 60 years at
loan maturity.
? Repayment capacity it will be considered on total income of the applicant
and co-applicant.
? Student as Co-Applicant.
LOAN DETAILS
Quantum of Loan
? Studies in India :Maximum Rs.10.00 lakhs
? Studies abroad :Maximum Rs.15.00 lakhs
Margin of Loan
? Upto Rs. 4.00 Lakhs : NIL
55
? Above Rs. 4.00 lakhs :Studies in India:5 %
? Studies Abroad:15 %
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 completion of the course.
? Any other expense required to complete the course-like study tours, project
work, thesis etc.
RATE OF INTEREST
? 11.05%
REPAYMENT
? Maximum upto 7 years + 18 months moratorium.
SECURITY
? For Loan above Rs.1.00 Lac equivalent collateral security is required.
DOCUMENTS REQUIRED
56
? Income Proof of Applicant(s) & Guarantor(s).
? Residential Proof of Applicant(s) & Guarantor(s)
? Original Quotation / Invoice, etc
? Bank Account Statement One Year
MORATORIUM PERIOD
? Applicable Max 18 months.
6.2 BHUSHAN COMPUTER LOAN SCHEME
“Change the way your Child Learns Gift a COMPUTER Today”
Purpose
? To buy a Personal Computer or laptop for the Students.
57
Guarantee / Surety
? No Guarantors (In case of both the parents are earners).
? One acceptable Guarantor (In case, either of the parents is earner).
Rate of Interest
? 12.00 % P.a. Floating
Eligibility
? Repayment capacity will be considered on total income of the applicant and
co-applicant.
Key Criteria
? Student should open a saving account at any of our branches.
Loan Amount
? Rs. 15,000 to Rs. 1, 00,000/-.
Margin
? Nil.
Repayment
? 60 EMI Maximum.
Service charges
? Flat Processing Fees Rs. 250/-
Documentation Charges
? At actual.
58
Special Feature
? Quick credit delivery and simple documentation.
Security
? Computer/ Laptop.
Information / Documents
? Loan Application Form.
? Income proof of Application (s) & Guarantor (s).
? Residential Proof of Applicant (s) & Guarantor (s). Photocopy of Ration
Card / Municipal Tax Receipt / Society Receipt / Passport / Voter?s
Identity Card.
? Banking. Last six months Statement of Accounts.
? One Photograph of the Applicant / Co-Applicant/ Guarantor.
? Signature Verification.
? Saving account of student with our Bank.
EMI chart
Month 12 24 36 48 60
EMI/Rs. 87.58 46.18 32.44 25.61 21.55
59
CHAPTER 7
DATA ANALYSIS
&
INTERPRETATION
60
Total 100 people were contacted and 50 were respondent.
1. Which is the type of services preferred by you the most?
Interpretation
According to survey, 60% customers prefer ATM service and 8 % of
customer can prefer internet banking service. 8 % customers prefer phone banking
and 10% customers prefer SMS banking, 4% customers prefer Safe deposit lockers
& 10% customers prefer core banking service.
0
5
10
15
20
25
30
Customers
30
4 4
5
2
5
ATM SERVICE
INTERNET BANKING
Phone BANKING
SMS BANKING
SAFE DEPOSIT LOCKERS
CORE BANKING
61
2. Which retail banking product have you availed?
Interpretation
In the above graph, it is indicated that 30% of customers prefer Home Loans
and 18% of customer can availed car loan & 14% for educational loan, this
because of this three are major chunk of retail product. So, rest 26% can availed
personal & 12% for other product availed by customer.
0
2
4
6
8
10
12
14
16
Customers
15
9
7
13
6
Home Loans
Car Loans
Education Loans
Personal Loans
others
62
3. How did you come to know about TJSB products?
Interpretation
10% of customer can awareness the product through television & 40% can
aware through newspaper and magazines & 10%can aware through radio. So this
both can give more information about product to customer. Also 30% can aware
through word of mouth & rest 10% through billboards / hoardings.
0
5
10
15
20
Customers
5
20
5
15
5
Television
Newspaper and magazines
Radio
word of mouth
billboards / hoardings
63
4. Are you satisfied with TJSB loan services?
Interpretation
In this survey 50% of customer can satisfied with TJSB loan services
because it provides core services. Also 20% of customer not satisfied with loan
services provided by TJSB bank & rest 30% cannot decide anything.
0
5
10
15
20
25
Customers
25
10
15
Yes
No
Cant say
64
5. Can TJSB provide better facility than other bank?
Interpretation:
In this survey 20% of customers are satisfied with TJSB?s services as
compared to other bank?s services and 60% of customers are not satisfied with
services of TJSB as compared to other bank?s services & rest 20% cannot decide
anything.
0
5
10
15
20
25
Customers
25
12
13
Yes
No
Cant say
65
CHAPTER 8
CONCLUSION
&
SUGGESTION
66
RECOMMENDATIONS
After learning the credit appraisal process at THANE JANATA SAHAKARI
BANK (TJSB) and observing the findings, I put some of my recommendations
which, firmly believe, would enhance the overall credit delivery process of the
bank and experience of the corporate clients.
My suggestions are as follows
Findings
Currently, the processing of credit proposal is done manually by officers.
Suggestion
The processing of credit appraisal can be expedited by using suitable software
that can help the Bank in calculation of Ratios, credit rating and pricing. The
Bank could therefore make use of tools to evaluate the proposals for different
interest rates and conditions.
Findings
The government and Reserve Bank of India have devised compromise
settlement schemes to help Banks recover nonperforming assets especially for
genuine borrowers. The scheme provides concession and interest waivers so
that immediate settlements can take place.
Suggestion
There are special software available that enables the Bank and the users in
respect of:
? Speedy preparation, evaluation and approval of settlement proposals.
? Availability of reliable information and systems to monitor and
control the recovery process.
? Need document procedure easy to understand customer.
Thus, such software could be installed to prepare and evaluate settlement
schemes.
67
CONCLUSION
The study has been conducted on “study of loans in tjsb” of various services
offered by Thane Janata Sahakari Bank at Thane.
Currently the credit policy of the TJSB Bank is reviewed periodically by taking
into account changes in political environment, economical environment and money
markets, changes in credit policy announced by the Reserve Bank of India and
happening of other events to protect the interest of the Bank and to maintain
profitability.
Proper credit appraisal involving performance of client, sureties and industrial
visits helps bank to reduce its NPAs and hence to reduce its credit risks.
Bank has classified all the sectors in to five different categories such as core sector
general sectors, sensitive sectors, banned sectors and restrictive sectors.
If an individual or Business concern or any other applicant need loan from Bank,
they have to be member of the bank.
Bank use its own credit rating system, CIBIL report as well as confidential report
from other banks as per the needs to judge the credit worthiness of clients.
The study has concluded that the bank should announce more innovative loan
services to their product.
68
ANNEXURE
69
QUESTIONNAIRE TO BANK
1. What Types Loans offered by TJSB bank?
2. On what basis do you provide loan?
3. At what rate of interest loan are provided?
4. What kind of security required for granting loan to customer?
5. What are eligibility criteria of loan taker?
6. What are the processing charges?
7. What are the EMI payables?
8. What are the pre-payment charges?
9. What are the supporting documents required to be submitted while granting
loan?
10. Does the bank require any guarantor? If yes, what documents of the guarantor
are required?
11. On what basis do you provide loan to a NRI?
12. What are the other banking service provide by bank?
13. What is a clean loan?
14. Is an additional guarantor required for Housing Loan?
15. Why insurance of house is required in case of housing loan?
16. Is a housing loan available for purchase of land?
17. Is cost of stamp duty considered in the housing loan?
18. How does TJSB approve working capital loans?
19. What is the repayment schedule like?
70
QUESTIONNAIRE TO CUSTOMER
1. Are you satisfied with TJSB loan services?
2. How did you come to know about TJSB products?
3. Which retail banking product have you availed?
4. Which is the type of services preferred by you the most?
5. Can TJSB provide better facility than other bank?
71
BIBLIOGRAPHY
Books
Financial management - Prasanna Chandra
Banking and law practices – S.L. Gupta
Hand book on co-operative bank- John D?silva
Annual report of tjsb- 2010-2011
Websites
www.rbi.org.in
www.cibil.com
www.thanejanata.co.in
doc_697559353.docx