Description
A cooperative ("coop"), co-operative ("co-op"), or coöperative ("coöp") is an autonomous association of persons who voluntarily cooperate for their mutual, social, economic, and cultural benefit.
Study reports on Loans and Advances the Muslim Cooperative Bank Limited Pune
6
INDEX
SR. NO.
TOPIC INTRODUCTION a) Background of the study b) Objectives of the study c) Scope of the study d) limitation COMPANY PROFILE a)Company History b)Corporate overviews c) c)Organizational Hierarchy THEOREITICAL FRAMEWORK
1
2
a)Chistor
3 4
RESEARCH METHODOLOGY
a) Meaning of research b) Method of data collection DATA ANALYSIS AND INTERPRETATION
5 6 7 8 9
CONCLUSION SUGGESTIONS QUESTIONNAIRE BIBLIOGRAPHY
PAGE NO.
INTRODUCTION
Loans and advances are the most important aspect of any banking organization .
Loan is a type of debt. Like all debt instruments, a loan entails the
Redistribution of financial assets over time. The borrower initially receives
An amount of money from the lender, which they pay back , usually but not
Always in regular installment , to the lender . This service is generally
Provided at a cost , referred to as interest on the debt . A sum of borrowed
Money (Principal) that is generally repaid with interest . Loan - to -Value -
Ratio the relation between the amount of the mortgage loan and the appraised
Value of the property expressed as a percentage.
Lock lenders guarantee that the mortgage are quoted will be good for a specific
Number of days from day of application . Money Margin, the amount of a
Lender adds to the index on an adjustable ratio mortgage to establish
7
The adjusted interest rate . ADVANCE is a term that describes a secured loan
Made to a member. Advances are offered at fixed or floating rates with specific
Maturities or with embedded options for early redemption .
There are different types of loan offered by a bank . Different loans fetch a
different rate of interest and have different securities against them.
CONSUMER LOANS
HOUSING LOANS
CAR LOANS
EDUCATION LOANS
LOAN AGAINST MORTAGE
8
BACK GROUND OF THE STUDY
No one can say for certain where the history of loans began? it?s likely that
people have been practicing lending and borrowing for as long there has been a
concept of ownership.
The history of loans and advances can be documented at least several thousand
Years back forms of lending were evident in ancient Greek and Roman times ,of course? it is, however ,important to realize that lending started much earlier than
many people would imagine and has its origin in much older times .
Indentured loans
One of the early forms of lending that should be explored in the history of loans
Is the indentured loan (also known as indentured servitude,) Initially practiced In the middle ages and through the 19th century by landowners and the wealthy
9
indentured servitude allowed poor individuals to borrow the money needed for
major expenses such as travel and real estate once the land owner or wealthy
individual had secured a ship passage or piece of real estate for an individual,
that would then have to work off real estate for an individual that individual would then have to work off their debt over the course of several years ?.
unfortunately , many a times the land owner was very dishonest and would
greatly inflate the debt or would continue to add provisions to the debt long
after it had been repaid . Indentured servants often had very few rights, and
were seen by some wealthy individuals as a way to maintain slave labor long
after slavery had been abolished in both Europe and
the United States.
Banking Loans
Luckily legitimate banks were developing even as indentured servitude was
10
rampant. individuals known as money lenders played an important part in the history of loans? in fact, it?s from the Italian moneylenders of the middle
ages that we get both the English words "banks" and "bankrupt" that we use
today.
Indian moneylenders would set up benches in the local marketplace (with the
word for bench being "banca' from which, we eventually derived the word
"bank" ) The moneylenders would charge interest on their loans at a rate
that they set, and would sometimes be quite successful and become very wealthy.
As an interesting side none to the history of loans, if the moneylenders were
not successful, though, theywould break up their benches and pursue other venues.
The Latin expression for breaking up benches in this way was "bnaca rupta" ,
(which carries a much steeper connotation than simply a broken bench .).
11
Modern banking loans
Of course , the history of loans has progressed quite a bit from the days of
the middle ages moneylender. Interest rates are much more controlled , loan
terms have a much higher degree of fairness to them , and banks of out era aren?t out to simply get as much money out of borrowers as they can
The modern banks , finance companies , and online lenders that provide loan
to the public and private sectors provide a great service to the world economy,
and are regulated by both local and governmental policy so as to make sure
that nothing interferes with that service.
However , if not for some of the oppression and misdealing that was present
Through the history of lending then fairness and opportunity that exists in
Banking today might not be possible.. even the oppression that resulted from
12
Indentured servitude in the past helped to establish modern banking by showing
What factors needed to be eliminated so as to benefit both lender and borrower.
13
OBJECTIVES OF THE STUDY
To assess the different interest rate on the different loans schemes
Provided by the bank .
To study different loans provided by the bank.
To assess the total loans provided by the bank in a nutshell as well as
Individually that is car loan, housing loan, personal consumer loan and
Other schemes .
To study the process and formalities that needs to be completed
for acquiring the loan.
14
SCOPE OF THE STUDY
To be competitive in modern banking / corporate world , constant Capital flow
is essential. Whether to expand business or to relocate production
unit to some other place of cost effectiveness, you require finance is required. It?s not always possible to fund them through internal sources. A delay of a
few days can cost millions.
To make an your enterprise successful and to run a your business strategically,
a secured business loan is an option worth trying for. Life can take an adverse turn at any moment. We can?t be certain about our future responsibilities and
obligations. In an hour of need, we look for various options to raise money.
Many new ways have been evolved to raise money, but as a human being ,
we tend to rely on the most favored options. A secured loan provides easier and
15
way to acquire loan. One can easily plan his future investments and
can easily fulfill his requirement and needs of life without risk.
Loan like housing loans, car loans, educational have helped people fulfill their
needs with ease.
BENEFIT TO THE LENDER
He/ she has borrowed.
returns on the investment to be utilized in the future and can build a
good reputation in the market.
16
BENEFIT TO THE BORROWER
loans is that you can design your repayment period
as well as monthly installments according to your financial capacity .
A secured business loan comes at a lower interest rate when compared
with other business loans . As these loans are taken against collateral,
any default in repayment can put the commercial property at risk.
affordable. Such opportunities are provided to entrepreneurs to encourage
them and ultimately enhance the economy of the region. By promising
business or industries, local government can even eradicate unemployment
and improve overall standard of living.
17
LIMITATIONS
My research was limited because of the fact that the major source of data
was from the annual reports of the company, which were subject to accounting
policies and practices followed by the company.
The major limitations are :
departments provided only screened information.
Not give a clear idea about the actual functioning of the bank . ?
financial statements obtain secondary data .
18
ORGANIZATION PROFILE
19
The Muslim co-operative Bank was started in the year 1931. Earlier it was
a credit society , and then it converted itself into a co-operative bank in the year
1936 , registered and incorporated. Mr. Ramzan Umar Shaikh and Abdul Kadir
Ebrahim established the Muslim national co-operative bank in the year 1931
on May 25th today the bank is officially recognized as "The Muslim co-operative
Bank Ltd."
Important aspects of the Bank
communities
specially the minority community, which is considered as
economically and educationally backwards.
engage itself in creating awareness for saving by means of colleting
deposits
and lending
the
same
to the
needy people
of the minority
community.
20
social , political , and religious persuasion.
between the depository and the borrower.
The Muslim co-operative Bank has in all 18 branches in the main areas of
Pune city at camp, Raviwar Peth , Kondwa , Hadapsar, Wanwori and
Yerewada etc. and also in other cities at Sangamner, Baramati Mumbai
and Junnar branch. The Muslim co-operative bank has
main administration office at Bhavani peth. Pune 42, which is considered
as powerhouse, and it has its registered office at Raviavar Peth Pune 42
21
KEY FEATURES OF THE MUSLIM CO-OPERATIVE BANK
-operative bank has 3 of its branches working 12 hours daily from 8.3o a.m. to 8.30 p.m. These branches are the main head office, camp branch , M.G. road, Mominpura branch and works for 365 days.
0%Net N. P. A. for the session 2005-2006.
above in their exams.
-operative banks provides educational allowances to the children of the employees.
additional services to the customers and thus at that time it was called "THE NEVER SLEPPING BANK".
22
technologies and software used in the banking sector.
bank provides other services such as safe deposit vaults, issue of D.D. at any place within Maharashtra under Mutual arrange scheme and PLR on fixed and floating basis minimum at 8 %.
-Resident external Rupee account and non-Resident ordinary account facility.
23
OBJECTIVES OF THE BANK
relation between the customer and bank
24
THE MUSLIM CO-OPERATIVE BANK LTD., PUNE ORGANISATIONAL HIERARCHY
CHAIRMAN
Mr. Shaikh Shafi F.M. Delhiwala
Vice Chairman Miss Mumtaz Z. Sayed
SECRETARY - C.E.O. J. L .Mandrupkar
Co-opted Director Taslim Khan
Staff - Director Imtiyaz Mulla
25
THEORETICAL FRAMEWORK
26
Different types of loans provided by Muslim Co-Operative Bank Ltd.
Sr.No. 1. 2.
Types of Loan Personal Loan Salary Loan Property Mortgage Loan
Short Loans
Term Medium Term Long Loans 2,12,42,748.75 13,71,501.90 48,00,00,888.10 Loans
Term Total (Rs.) 2,12,42,748.75 13,71,501.90 3. 48,00,00,888.10
4. 5.
Gold Loan
2,55,52,000.00
2,55,52,000.00 7,68,91,471.00
Fixed Deposit 7,68,91,471.00 Loan
6.
Dam Loan
Duppat 1,30,85,926.00
1,30,85,926.00
7.
Recurring Deposit Loan
2,27,352.00
2,27,352.00
8.
Education Loan
13,26,795.00
13,26,795.00
9.
Building Loan 24,99,438.65 Advance Loan
37,22,73,235.93 24,99,438.65 11.
37,22,73,235.93 10. Festival 58,18,924.00
House Loan 58,18,924.00
12.
Cash
Credit 8,01,606.00
8,01,606.00
Reinvestment Loan 13. 14. Shop Loan Cash Credit 22,27,470.71 7,49,15,564.00 7,49,15,564.00 22,27,470.71
Term Loan 15. Reinvestment Deposit Loan TOTAL 135443602.71 505114577.4 448515594.93 1,08,90,73,775.04 1,08,38,853.00 --------------------------1,08,38,853.00
27
CONSUMEER LOANS
It is a loan that establishes consumer credit that is granted for personal use ; usually unsecured and based on the borrower?s integrity and ability to pay .
For acquiring consumer loan one has to complete all the formalities .
Following are the kinds of loan provided by the bank
28
a) Scale of finance :
up to Rs. 75, 000
b)Eligibility
:
Employee of Govt. , Semi-Govt. , Civic Bodies Self employed having minimum net monthly
Salary or income of Rs. 1800.
c)Security
:
Primary Hypothecation of article financed. Collateral third party Guarantee of one person.
d)Rate of interest : e) Repayment f)Margin : :
11.25 % p. a.
30 months
10 % of cost of article
29
HOUSING LOAN
It is a loan that establishes consumer credit that is granted for building house : usually unsecured and based on the borrower?s integrity and ability to pay.
For acquiring housing loan one has to complete all the formalities.
30
Salient Features :
a)_Quantum of Loan
i) for construction / purchase :The maximum amount of loan to be sanctioned under the
scheme would be 40 times the net monthly income/ salary of the applicant and
there would be no ceiling viz a viz . The amount of loan.
ii) For Renovation / Addition : The maximum loan granted for carrying out
repairs, additions, extensions, improvement, completion, renovation of existing
house is Rs. 4 lakhs (subject to 20 times net monthly salary / income )
31
Also as an incentive for small borrower?s the loans up to Rs.1.5 lakhs
granted for repairs / renovation of existing houses would now be secured by
third party guarantee of 2 persons or LIC policies, Government securities, IVPs
NSCs, KVPs or such other security as is deemed appropriate by the sanctioning
authority.
However, negative lien would be stipulated over the existing house
property for which the facility is granted and also have an ir-revocable power
of attorney executed by the borrower authorizing the bank to sell the house
in case of default.
b) Eligibility :
i) Employee of Govt., Semi-Govt., Civic Bodies PUS?s
with minimum 5 years service.
32
ii) Reputed Businessmen with minimum 5 years standing
iii) Professionals & self employed like Doctors, Engineers, C.A.?s, Advocates, with minimum 5 years standing .
c) Security :
Primary - mortgage of the house property to be
purchased / constructed .
Collateral : Third party Guarantee of two person , or
assignment of LIC Policies, pledge of Govt. securities etc.
d)Rate of interest (SUBJECT
EMI REGULAR
TO CHANGE)
11.25 % 13.50 %
e)Repayment :
i) For construction of new house 180 months including
9 months moratorium in equal monthly installments .
33
ii)
For addition / renovation 5
years including 2
months moratorium in equal monthly installments .
f) Margin
:
i) For construction /purchase15 %(cost of land inclusive) ii) For renovation 25%
g) Processing charges :
0.25 % of loan amount
34
EDUCATIONAL LOAN
An advance of funds to a student for the purpose of financing a college or
vocational education . For acquiring loan one has to complete all the formalities
The Muslim Co-Operative bank provide loans for P. G. courses
SAILENT
FEATURS
a) Scale Of Finance :
up to 2 lakhs
35
b) Courses Allowed for : i)
P. G. Courses in : Medicine, Surgery, Bio
-chemistry, Agriculture, Veterinary , Architecture
etc. .
c) Eligibility
:
i) Should have secured admission to professionals /
technical courses through entrance test / selection
process.
ii) Should have passed the qualifying examination
for admission to the courses.
iii) Employed person intending to improve their
educational qualification and / or receive training
in modern technology.
36
d) Security
:
Personal guarantee of borrower?s
e) Margin f) Interest
: :
Nil
@ 13.25 % monthly pay on amount of loan
g) Repayment :
Course period plus one year after getting the job.
37
CAR LOANS
The Muslim Co - Operative bank provides a personal
loan to purchase
automobiles.
38
Salient Features
Scale of finance : Ranging from Rs. 1 Lac. depending upon the Salary /
Net Annual Income
Eligibility
: i) Employees of Govt. Semi Govt., Civic Bodies, PSU?s
Individual / Proprietorship Concerns / Firms / Limited
Companies known to the Bank
ii) Net Annual Income should exceed Rs. 75000 /-
iii) The applicant (individuals) should
have a valid
driving license in his/her own name .
iv) The employees of the State Govt. / Semi Govt.
Departments / Other Organizations
should
have
minimum 3 years service in the organization.
39
Security Interest
: Primary :
Hypothecation of vehicle financed
@ 13.25%
Repayment : 5 years
Margin
: 25 %
40
LOAN AGAINST MORTGAGE
This scheme is for individuals / business enterprises / professionals and self
employed as an ideal source of funds for expenditures of any nature.
Eligibility criteria :
The scheme would provide finance to Individuals / Business Enterprises
having minimum net annual income of Rs. 1 lac per annum against mortgage
of unencumbered immovable property situated in Metros/Urban areas. Salaried
individuals must have put in a minimum confirmed service of 3 years.
Business Enterprises, professionals and self-employed must have a minimum
standing of 3 years in the respective line of activity.
41
Purpose :
For meeting their business and / or any personal need / expenditure .
AMOUNT OF LAON : 1 Lac INTEREST MARGIN PROCESSING FEES : @ 13. 25 % : Nil : .0. 25 % Of the loan amount sanctioned would
be charged as processing fees.
SECURITY
: Registered/Equitable mortgage of unencumbered
residential house / flat, commercial or industrial
property with a clear marketable title situated
in the Metros Urban areas only and which stands
in the name and profession of the borrower.
42
The property should be vacant
REPAYMENT
: The loan granted under the scheme together with
interest thereon would be repayable within a
maximum period of 60 months through equated
monthly installments(EMI)commencing one month
after disbursement of the loan. The repayment
shall have to be fixed on realistic basis so that
the gross deduction including the EMI for the
loan granted under this scheme does not exceeds
50 % of the borrower gross income. In case of
individual borrower the income of spouse shall
be taken into account for determining the repaying
capacity of the borrower.
43
INSURANCE
: The property against which the loan is granted
will have to be comprehensively insured against
all risks for its full value during the continuance
of the loan facility from the Bank. The cost of
the insurance to be borne by the borrower & the
policy will be drawn in the joint names of the
bank and the borrower within usual bank clause
therein.
44
RESEARCH METHODOLOGY
45
MEANING OF THE RESEARCH
Research may mean the first small step in an endeavor to understand better the change occurring and at times forced upon us as individuals or as society.
Research as a process involves defining problems, hypothesis formulation and organization and evaluating of data , deriving deductions interferences and conclusions after careful testing.
OBJECTIVE OF RESEARCH
1. It extends, verifies or corrects knowledge. 2. It enables us to have a better understanding of our world. 3. It aids in purposeful planning. 4. Research initiates, formulates, deflects and clarifies theory.
METHODS OF DATA COLLECTION
Data is of two kind. 1. Primary Data 2. Secondary Data
46
Secondary data may be defined as data that has been collected earlier for some purpose other than the purpose of the present study. Any data that is available prior to the commencement of the research project is secondary data and it is called historic data.
USES OF SECONDARY DATA
1) It acts as a reference for the present study. 2) The secondary data can be a useful benchmark, against which the findings of the study can be tested.
3) At times it may be the only source of data.
SOURCES OF SECONDARY DATA
1) Published Sources 2) Unpublished Sources
DATA COLLECTION METHODS
1) Observation 2) Interviewing 3) Experimentation 4) Simulation
47
In this project following data collection methods are used. They are------------
1) Interviewing 2) Published source of data in the form of books of accounts.
INTERVIEWING
It is the most commonly used method of data collection. It is two ways purposive communication between the interviewer and the respondent aimed at obtaining and recording information pertinent to the subject matter of the study.
48
DATA ANALYSIS, interpretation
AND FINDINGS
49
AWARENESS ABOUT LOANS
90 80 70 60 50 40 30 20 10 0 AGREED AGREED NOT AGREED NOT AGREED
80 % of the respondents agreed that they are aware of the different
loan schemes provided by the bank .
While only 20 % are not aware of the loan schemes provided by the
bank
50
REASONING FOR NOT AVALING THE LOAN
70
60
50
40
30
20
10
0 COMPLICATED SLOW PROCESSING SLOW PROCESSING OTHER REASON OTHER REASON
COMPLICATED
From the above graph it is clear that :
65 % of the respondents said that the reasons for not availing the different loan schemes are the complicated formalities .
20 % of the respondents said that the reasons for not availing the
different loan schemes are the slow processing of applications.
51
15 % of the respondents gave the other reasons for not availing the
different loan schemes .
52
ATTITUDE OF BANK OFFICIALS WHILE MAKING TRANSACTIOS
60 50 40 30 20 10 0 EXCELLENT EXCELLENT POOR SATISFACTORY GOOD VERY POOR VERY POOR SATISFACTORY
59 % of the customers think that the attitude of the bank officials while making transactions is excellent.
21 % of the customers feel that the attitude of the bank officials while making transactions is good .
53
15 % of the customers think that the attitude of the bank officials while making transactions is satisfactory .
02 % of the customers think that the attitude of the bank officials while making transactions is poor .
03 % of the customers think that the attitude of the bank officials while making transactions is very poor .
54
SUGGESTION OF THE INTEREST RATE
NONE, 15, 15%
NON FAVOURABLE, 25, 25%
Z
FAVOURABLE, 60, 60%
60 % of the respondents think that interest rates should be 6 % to
7%
55
25 % of the respondents think that interest rates should be between
8 % to 10 %
Rest of them agree with the existing policy of the bank
56
CONCLUSIONS
57
CONCLUSION
As we observed the trends in Indian financial sector is changing rapidly through Innovation and dependability of loans and advances has also increased and much awareness of this concept has been found.
finance amongst individual, corporate as well as for the higher organizations.
secured business loan is a loan given for commercial purpose. It Keeps business properties as collateral. It can be taken for a variety of purposes like diversification, research and development or to buy plants and machineries.
advantage with loans is that you can design your repayment period as well as monthly installments according to your financial capacity. A loan comes at a lower interest rate when compared with other business loans. As these loans are taken against collateral, any default in repayment can put to your commercial property at risk..
58
capital flow is essential. Whether to expand your business or relocate your production unit to some other place for cost. effectiveness, you require finance. It?snot always possible to fund them to internal sources. A delay of a few days can cost you in millions.To make your enterprise successful and to run your business strategically, a secured business loan is an option worth trying for.
59
SUGGESTIONS
60
SUGGESTIONS
There are lots of benefits accruing from loans and one can easily fulfill his needs and basic requirements of life. There are also tax related benefits that is tax liability can be reduced a lot by showing more debt than equity in capital structure.
earn profits and plan the future investments.
lot of documentation and formalities are to be completed for raising the loan, which requires a lot of time so the procedure of raising the loan should be simplified to some extent.
about its lending policies.
ATM facility .
61
QUESTIONNAIRE
62
QUESTIONNAIRE FOR CUSTOMER
M/S. : Address : Phone :
Dear Customer It has always been our earnest endeavor to serve you better. The following questionnaire is aimed at satisfaction level. You are requested to respond fairly to the questions and guide us in developing strategies for serving you better.
1) How long you have been banking with The Muslim Co-Operative Bank?
a. 1 year b. 1-5 years c. 5-10 years d. Not at all
2) Are you aware of the different loan schemes provided by the bank?
a. Yes b. No
63
3) What interest rates do you suggest for the maximum loan amount(15 Lakhs)?
a. 6-7% b. 8-10% c. Agree with existing
4) How do you rate the attitude of bank officials towards you while making transactions?
a. Excellent b. Good c. Satisfactory d. Poor
5) If you are aware of the loan scheme offered by the bank and desire to avail the facility of the scheme but have not availed so far, what is the reason?
a. Indifference of the branch people b. Complicated formalities c. Slow pace of processing
64
BIBLIOGRAPHY
65
BIBLIOGRAPHY
NAME OF THE BOOK
NAME OF THE AUTHOR
EDITION
Financial Management
I. M. Pandey
6th
Marketing of banking services
Lewis h. Haney
3rd
Marketing Management
Philip Kotler
4th
ANNUAL REPORT OF THE MUSLIM CO_OPERATIVE BANK LTD.
66
ANNEXURE Statement showing financial position of The Muslim Co-Operative Bank Ltd. as on 31st March
Name of The Bank Head Office Address Date Of Registration Date & No. Of RBI License Jurisdiction The Muslim Co-Operative Bank Ltd. 633 Raviwar Peth PUNE-411002 No. 7000 Dated 25th May 1931 UBD-MH-411/P Dated 18th Nov. 1984 Pune, Solapur, And Ahmednagar District , Greater Mumbai (Municipal Limit), Nasik, Thane As On 31st March 2008 (Rs.In Lacs.) 19 24300 2498 597.40 4440.55 10823.52 4344.74 11752.47 12469.27 401.56 88.85% 15.25% NIL NIL NIL 11016.00 5.00 6774.51 8.67% „I? „A? 272.77 159 45 204 32815.99
Items No. of Branches including Head Office Membership Regular Nominal Paid Up-Share Capital Total Reserve And Funds Deposits Saving Current Fixed Secured Advances Un-Secured Total % of Priority sector Total % of Weaker Section D.C.C. Borrowings M.S.C. Others D.C.C. Investments M.S.C. Others Overdue Percentage RBI Grade Audit Classification Profit For The Year Other Staff Sub Staff Total Staff Working Capital
67
doc_175849566.docx
A cooperative ("coop"), co-operative ("co-op"), or coöperative ("coöp") is an autonomous association of persons who voluntarily cooperate for their mutual, social, economic, and cultural benefit.
Study reports on Loans and Advances the Muslim Cooperative Bank Limited Pune
6
INDEX
SR. NO.
TOPIC INTRODUCTION a) Background of the study b) Objectives of the study c) Scope of the study d) limitation COMPANY PROFILE a)Company History b)Corporate overviews c) c)Organizational Hierarchy THEOREITICAL FRAMEWORK
1
2
a)Chistor
3 4
RESEARCH METHODOLOGY
a) Meaning of research b) Method of data collection DATA ANALYSIS AND INTERPRETATION
5 6 7 8 9
CONCLUSION SUGGESTIONS QUESTIONNAIRE BIBLIOGRAPHY
PAGE NO.
INTRODUCTION
Loans and advances are the most important aspect of any banking organization .
Loan is a type of debt. Like all debt instruments, a loan entails the
Redistribution of financial assets over time. The borrower initially receives
An amount of money from the lender, which they pay back , usually but not
Always in regular installment , to the lender . This service is generally
Provided at a cost , referred to as interest on the debt . A sum of borrowed
Money (Principal) that is generally repaid with interest . Loan - to -Value -
Ratio the relation between the amount of the mortgage loan and the appraised
Value of the property expressed as a percentage.
Lock lenders guarantee that the mortgage are quoted will be good for a specific
Number of days from day of application . Money Margin, the amount of a
Lender adds to the index on an adjustable ratio mortgage to establish
7
The adjusted interest rate . ADVANCE is a term that describes a secured loan
Made to a member. Advances are offered at fixed or floating rates with specific
Maturities or with embedded options for early redemption .
There are different types of loan offered by a bank . Different loans fetch a
different rate of interest and have different securities against them.
CONSUMER LOANS
HOUSING LOANS
CAR LOANS
EDUCATION LOANS
LOAN AGAINST MORTAGE
8
BACK GROUND OF THE STUDY
No one can say for certain where the history of loans began? it?s likely that
people have been practicing lending and borrowing for as long there has been a
concept of ownership.
The history of loans and advances can be documented at least several thousand
Years back forms of lending were evident in ancient Greek and Roman times ,of course? it is, however ,important to realize that lending started much earlier than
many people would imagine and has its origin in much older times .
Indentured loans
One of the early forms of lending that should be explored in the history of loans
Is the indentured loan (also known as indentured servitude,) Initially practiced In the middle ages and through the 19th century by landowners and the wealthy
9
indentured servitude allowed poor individuals to borrow the money needed for
major expenses such as travel and real estate once the land owner or wealthy
individual had secured a ship passage or piece of real estate for an individual,
that would then have to work off real estate for an individual that individual would then have to work off their debt over the course of several years ?.
unfortunately , many a times the land owner was very dishonest and would
greatly inflate the debt or would continue to add provisions to the debt long
after it had been repaid . Indentured servants often had very few rights, and
were seen by some wealthy individuals as a way to maintain slave labor long
after slavery had been abolished in both Europe and
the United States.
Banking Loans
Luckily legitimate banks were developing even as indentured servitude was
10
rampant. individuals known as money lenders played an important part in the history of loans? in fact, it?s from the Italian moneylenders of the middle
ages that we get both the English words "banks" and "bankrupt" that we use
today.
Indian moneylenders would set up benches in the local marketplace (with the
word for bench being "banca' from which, we eventually derived the word
"bank" ) The moneylenders would charge interest on their loans at a rate
that they set, and would sometimes be quite successful and become very wealthy.
As an interesting side none to the history of loans, if the moneylenders were
not successful, though, theywould break up their benches and pursue other venues.
The Latin expression for breaking up benches in this way was "bnaca rupta" ,
(which carries a much steeper connotation than simply a broken bench .).
11
Modern banking loans
Of course , the history of loans has progressed quite a bit from the days of
the middle ages moneylender. Interest rates are much more controlled , loan
terms have a much higher degree of fairness to them , and banks of out era aren?t out to simply get as much money out of borrowers as they can
The modern banks , finance companies , and online lenders that provide loan
to the public and private sectors provide a great service to the world economy,
and are regulated by both local and governmental policy so as to make sure
that nothing interferes with that service.
However , if not for some of the oppression and misdealing that was present
Through the history of lending then fairness and opportunity that exists in
Banking today might not be possible.. even the oppression that resulted from
12
Indentured servitude in the past helped to establish modern banking by showing
What factors needed to be eliminated so as to benefit both lender and borrower.
13
OBJECTIVES OF THE STUDY
To assess the different interest rate on the different loans schemes
Provided by the bank .
To study different loans provided by the bank.
To assess the total loans provided by the bank in a nutshell as well as
Individually that is car loan, housing loan, personal consumer loan and
Other schemes .
To study the process and formalities that needs to be completed
for acquiring the loan.
14
SCOPE OF THE STUDY
To be competitive in modern banking / corporate world , constant Capital flow
is essential. Whether to expand business or to relocate production
unit to some other place of cost effectiveness, you require finance is required. It?s not always possible to fund them through internal sources. A delay of a
few days can cost millions.
To make an your enterprise successful and to run a your business strategically,
a secured business loan is an option worth trying for. Life can take an adverse turn at any moment. We can?t be certain about our future responsibilities and
obligations. In an hour of need, we look for various options to raise money.
Many new ways have been evolved to raise money, but as a human being ,
we tend to rely on the most favored options. A secured loan provides easier and
15
way to acquire loan. One can easily plan his future investments and
can easily fulfill his requirement and needs of life without risk.
Loan like housing loans, car loans, educational have helped people fulfill their
needs with ease.
BENEFIT TO THE LENDER
He/ she has borrowed.
returns on the investment to be utilized in the future and can build a
good reputation in the market.
16
BENEFIT TO THE BORROWER
loans is that you can design your repayment period
as well as monthly installments according to your financial capacity .
A secured business loan comes at a lower interest rate when compared
with other business loans . As these loans are taken against collateral,
any default in repayment can put the commercial property at risk.
affordable. Such opportunities are provided to entrepreneurs to encourage
them and ultimately enhance the economy of the region. By promising
business or industries, local government can even eradicate unemployment
and improve overall standard of living.
17
LIMITATIONS
My research was limited because of the fact that the major source of data
was from the annual reports of the company, which were subject to accounting
policies and practices followed by the company.
The major limitations are :
departments provided only screened information.
Not give a clear idea about the actual functioning of the bank . ?
financial statements obtain secondary data .
18
ORGANIZATION PROFILE
19
The Muslim co-operative Bank was started in the year 1931. Earlier it was
a credit society , and then it converted itself into a co-operative bank in the year
1936 , registered and incorporated. Mr. Ramzan Umar Shaikh and Abdul Kadir
Ebrahim established the Muslim national co-operative bank in the year 1931
on May 25th today the bank is officially recognized as "The Muslim co-operative
Bank Ltd."
Important aspects of the Bank
communities
specially the minority community, which is considered as
economically and educationally backwards.
engage itself in creating awareness for saving by means of colleting
deposits
and lending
the
same
to the
needy people
of the minority
community.
20
social , political , and religious persuasion.
between the depository and the borrower.
The Muslim co-operative Bank has in all 18 branches in the main areas of
Pune city at camp, Raviwar Peth , Kondwa , Hadapsar, Wanwori and
Yerewada etc. and also in other cities at Sangamner, Baramati Mumbai
and Junnar branch. The Muslim co-operative bank has
main administration office at Bhavani peth. Pune 42, which is considered
as powerhouse, and it has its registered office at Raviavar Peth Pune 42
21
KEY FEATURES OF THE MUSLIM CO-OPERATIVE BANK
-operative bank has 3 of its branches working 12 hours daily from 8.3o a.m. to 8.30 p.m. These branches are the main head office, camp branch , M.G. road, Mominpura branch and works for 365 days.
0%Net N. P. A. for the session 2005-2006.
above in their exams.
-operative banks provides educational allowances to the children of the employees.
additional services to the customers and thus at that time it was called "THE NEVER SLEPPING BANK".
22
technologies and software used in the banking sector.
bank provides other services such as safe deposit vaults, issue of D.D. at any place within Maharashtra under Mutual arrange scheme and PLR on fixed and floating basis minimum at 8 %.
-Resident external Rupee account and non-Resident ordinary account facility.
23
OBJECTIVES OF THE BANK
relation between the customer and bank
24
THE MUSLIM CO-OPERATIVE BANK LTD., PUNE ORGANISATIONAL HIERARCHY
CHAIRMAN
Mr. Shaikh Shafi F.M. Delhiwala
Vice Chairman Miss Mumtaz Z. Sayed
SECRETARY - C.E.O. J. L .Mandrupkar
Co-opted Director Taslim Khan
Staff - Director Imtiyaz Mulla
25
THEORETICAL FRAMEWORK
26
Different types of loans provided by Muslim Co-Operative Bank Ltd.
Sr.No. 1. 2.
Types of Loan Personal Loan Salary Loan Property Mortgage Loan
Short Loans
Term Medium Term Long Loans 2,12,42,748.75 13,71,501.90 48,00,00,888.10 Loans
Term Total (Rs.) 2,12,42,748.75 13,71,501.90 3. 48,00,00,888.10
4. 5.
Gold Loan
2,55,52,000.00
2,55,52,000.00 7,68,91,471.00
Fixed Deposit 7,68,91,471.00 Loan
6.
Dam Loan
Duppat 1,30,85,926.00
1,30,85,926.00
7.
Recurring Deposit Loan
2,27,352.00
2,27,352.00
8.
Education Loan
13,26,795.00
13,26,795.00
9.
Building Loan 24,99,438.65 Advance Loan
37,22,73,235.93 24,99,438.65 11.
37,22,73,235.93 10. Festival 58,18,924.00
House Loan 58,18,924.00
12.
Cash
Credit 8,01,606.00
8,01,606.00
Reinvestment Loan 13. 14. Shop Loan Cash Credit 22,27,470.71 7,49,15,564.00 7,49,15,564.00 22,27,470.71
Term Loan 15. Reinvestment Deposit Loan TOTAL 135443602.71 505114577.4 448515594.93 1,08,90,73,775.04 1,08,38,853.00 --------------------------1,08,38,853.00
27
CONSUMEER LOANS
It is a loan that establishes consumer credit that is granted for personal use ; usually unsecured and based on the borrower?s integrity and ability to pay .
For acquiring consumer loan one has to complete all the formalities .
Following are the kinds of loan provided by the bank
28
a) Scale of finance :
up to Rs. 75, 000
b)Eligibility
:
Employee of Govt. , Semi-Govt. , Civic Bodies Self employed having minimum net monthly
Salary or income of Rs. 1800.
c)Security
:
Primary Hypothecation of article financed. Collateral third party Guarantee of one person.
d)Rate of interest : e) Repayment f)Margin : :
11.25 % p. a.
30 months
10 % of cost of article
29
HOUSING LOAN
It is a loan that establishes consumer credit that is granted for building house : usually unsecured and based on the borrower?s integrity and ability to pay.
For acquiring housing loan one has to complete all the formalities.
30
Salient Features :
a)_Quantum of Loan
i) for construction / purchase :The maximum amount of loan to be sanctioned under the
scheme would be 40 times the net monthly income/ salary of the applicant and
there would be no ceiling viz a viz . The amount of loan.
ii) For Renovation / Addition : The maximum loan granted for carrying out
repairs, additions, extensions, improvement, completion, renovation of existing
house is Rs. 4 lakhs (subject to 20 times net monthly salary / income )
31
Also as an incentive for small borrower?s the loans up to Rs.1.5 lakhs
granted for repairs / renovation of existing houses would now be secured by
third party guarantee of 2 persons or LIC policies, Government securities, IVPs
NSCs, KVPs or such other security as is deemed appropriate by the sanctioning
authority.
However, negative lien would be stipulated over the existing house
property for which the facility is granted and also have an ir-revocable power
of attorney executed by the borrower authorizing the bank to sell the house
in case of default.
b) Eligibility :
i) Employee of Govt., Semi-Govt., Civic Bodies PUS?s
with minimum 5 years service.
32
ii) Reputed Businessmen with minimum 5 years standing
iii) Professionals & self employed like Doctors, Engineers, C.A.?s, Advocates, with minimum 5 years standing .
c) Security :
Primary - mortgage of the house property to be
purchased / constructed .
Collateral : Third party Guarantee of two person , or
assignment of LIC Policies, pledge of Govt. securities etc.
d)Rate of interest (SUBJECT
EMI REGULAR
TO CHANGE)
11.25 % 13.50 %
e)Repayment :
i) For construction of new house 180 months including
9 months moratorium in equal monthly installments .
33
ii)
For addition / renovation 5
years including 2
months moratorium in equal monthly installments .
f) Margin
:
i) For construction /purchase15 %(cost of land inclusive) ii) For renovation 25%
g) Processing charges :
0.25 % of loan amount
34
EDUCATIONAL LOAN
An advance of funds to a student for the purpose of financing a college or
vocational education . For acquiring loan one has to complete all the formalities
The Muslim Co-Operative bank provide loans for P. G. courses
SAILENT
FEATURS
a) Scale Of Finance :
up to 2 lakhs
35
b) Courses Allowed for : i)
P. G. Courses in : Medicine, Surgery, Bio
-chemistry, Agriculture, Veterinary , Architecture
etc. .
c) Eligibility
:
i) Should have secured admission to professionals /
technical courses through entrance test / selection
process.
ii) Should have passed the qualifying examination
for admission to the courses.
iii) Employed person intending to improve their
educational qualification and / or receive training
in modern technology.
36
d) Security
:
Personal guarantee of borrower?s
e) Margin f) Interest
: :
Nil
@ 13.25 % monthly pay on amount of loan
g) Repayment :
Course period plus one year after getting the job.
37
CAR LOANS
The Muslim Co - Operative bank provides a personal
loan to purchase
automobiles.
38
Salient Features
Scale of finance : Ranging from Rs. 1 Lac. depending upon the Salary /
Net Annual Income
Eligibility
: i) Employees of Govt. Semi Govt., Civic Bodies, PSU?s
Individual / Proprietorship Concerns / Firms / Limited
Companies known to the Bank
ii) Net Annual Income should exceed Rs. 75000 /-
iii) The applicant (individuals) should
have a valid
driving license in his/her own name .
iv) The employees of the State Govt. / Semi Govt.
Departments / Other Organizations
should
have
minimum 3 years service in the organization.
39
Security Interest
: Primary :
Hypothecation of vehicle financed
@ 13.25%
Repayment : 5 years
Margin
: 25 %
40
LOAN AGAINST MORTGAGE
This scheme is for individuals / business enterprises / professionals and self
employed as an ideal source of funds for expenditures of any nature.
Eligibility criteria :
The scheme would provide finance to Individuals / Business Enterprises
having minimum net annual income of Rs. 1 lac per annum against mortgage
of unencumbered immovable property situated in Metros/Urban areas. Salaried
individuals must have put in a minimum confirmed service of 3 years.
Business Enterprises, professionals and self-employed must have a minimum
standing of 3 years in the respective line of activity.
41
Purpose :
For meeting their business and / or any personal need / expenditure .
AMOUNT OF LAON : 1 Lac INTEREST MARGIN PROCESSING FEES : @ 13. 25 % : Nil : .0. 25 % Of the loan amount sanctioned would
be charged as processing fees.
SECURITY
: Registered/Equitable mortgage of unencumbered
residential house / flat, commercial or industrial
property with a clear marketable title situated
in the Metros Urban areas only and which stands
in the name and profession of the borrower.
42
The property should be vacant
REPAYMENT
: The loan granted under the scheme together with
interest thereon would be repayable within a
maximum period of 60 months through equated
monthly installments(EMI)commencing one month
after disbursement of the loan. The repayment
shall have to be fixed on realistic basis so that
the gross deduction including the EMI for the
loan granted under this scheme does not exceeds
50 % of the borrower gross income. In case of
individual borrower the income of spouse shall
be taken into account for determining the repaying
capacity of the borrower.
43
INSURANCE
: The property against which the loan is granted
will have to be comprehensively insured against
all risks for its full value during the continuance
of the loan facility from the Bank. The cost of
the insurance to be borne by the borrower & the
policy will be drawn in the joint names of the
bank and the borrower within usual bank clause
therein.
44
RESEARCH METHODOLOGY
45
MEANING OF THE RESEARCH
Research may mean the first small step in an endeavor to understand better the change occurring and at times forced upon us as individuals or as society.
Research as a process involves defining problems, hypothesis formulation and organization and evaluating of data , deriving deductions interferences and conclusions after careful testing.
OBJECTIVE OF RESEARCH
1. It extends, verifies or corrects knowledge. 2. It enables us to have a better understanding of our world. 3. It aids in purposeful planning. 4. Research initiates, formulates, deflects and clarifies theory.
METHODS OF DATA COLLECTION
Data is of two kind. 1. Primary Data 2. Secondary Data
46
Secondary data may be defined as data that has been collected earlier for some purpose other than the purpose of the present study. Any data that is available prior to the commencement of the research project is secondary data and it is called historic data.
USES OF SECONDARY DATA
1) It acts as a reference for the present study. 2) The secondary data can be a useful benchmark, against which the findings of the study can be tested.
3) At times it may be the only source of data.
SOURCES OF SECONDARY DATA
1) Published Sources 2) Unpublished Sources
DATA COLLECTION METHODS
1) Observation 2) Interviewing 3) Experimentation 4) Simulation
47
In this project following data collection methods are used. They are------------
1) Interviewing 2) Published source of data in the form of books of accounts.
INTERVIEWING
It is the most commonly used method of data collection. It is two ways purposive communication between the interviewer and the respondent aimed at obtaining and recording information pertinent to the subject matter of the study.
48
DATA ANALYSIS, interpretation
AND FINDINGS
49
AWARENESS ABOUT LOANS
90 80 70 60 50 40 30 20 10 0 AGREED AGREED NOT AGREED NOT AGREED
80 % of the respondents agreed that they are aware of the different
loan schemes provided by the bank .
While only 20 % are not aware of the loan schemes provided by the
bank
50
REASONING FOR NOT AVALING THE LOAN
70
60
50
40
30
20
10
0 COMPLICATED SLOW PROCESSING SLOW PROCESSING OTHER REASON OTHER REASON
COMPLICATED
From the above graph it is clear that :
65 % of the respondents said that the reasons for not availing the different loan schemes are the complicated formalities .
20 % of the respondents said that the reasons for not availing the
different loan schemes are the slow processing of applications.
51
15 % of the respondents gave the other reasons for not availing the
different loan schemes .
52
ATTITUDE OF BANK OFFICIALS WHILE MAKING TRANSACTIOS
60 50 40 30 20 10 0 EXCELLENT EXCELLENT POOR SATISFACTORY GOOD VERY POOR VERY POOR SATISFACTORY
59 % of the customers think that the attitude of the bank officials while making transactions is excellent.
21 % of the customers feel that the attitude of the bank officials while making transactions is good .
53
15 % of the customers think that the attitude of the bank officials while making transactions is satisfactory .
02 % of the customers think that the attitude of the bank officials while making transactions is poor .
03 % of the customers think that the attitude of the bank officials while making transactions is very poor .
54
SUGGESTION OF THE INTEREST RATE
NONE, 15, 15%
NON FAVOURABLE, 25, 25%
Z
FAVOURABLE, 60, 60%
60 % of the respondents think that interest rates should be 6 % to
7%
55
25 % of the respondents think that interest rates should be between
8 % to 10 %
Rest of them agree with the existing policy of the bank
56
CONCLUSIONS
57
CONCLUSION
As we observed the trends in Indian financial sector is changing rapidly through Innovation and dependability of loans and advances has also increased and much awareness of this concept has been found.
finance amongst individual, corporate as well as for the higher organizations.
secured business loan is a loan given for commercial purpose. It Keeps business properties as collateral. It can be taken for a variety of purposes like diversification, research and development or to buy plants and machineries.
advantage with loans is that you can design your repayment period as well as monthly installments according to your financial capacity. A loan comes at a lower interest rate when compared with other business loans. As these loans are taken against collateral, any default in repayment can put to your commercial property at risk..
58
capital flow is essential. Whether to expand your business or relocate your production unit to some other place for cost. effectiveness, you require finance. It?snot always possible to fund them to internal sources. A delay of a few days can cost you in millions.To make your enterprise successful and to run your business strategically, a secured business loan is an option worth trying for.
59
SUGGESTIONS
60
SUGGESTIONS
There are lots of benefits accruing from loans and one can easily fulfill his needs and basic requirements of life. There are also tax related benefits that is tax liability can be reduced a lot by showing more debt than equity in capital structure.
earn profits and plan the future investments.
lot of documentation and formalities are to be completed for raising the loan, which requires a lot of time so the procedure of raising the loan should be simplified to some extent.
about its lending policies.
ATM facility .
61
QUESTIONNAIRE
62
QUESTIONNAIRE FOR CUSTOMER
M/S. : Address : Phone :
Dear Customer It has always been our earnest endeavor to serve you better. The following questionnaire is aimed at satisfaction level. You are requested to respond fairly to the questions and guide us in developing strategies for serving you better.
1) How long you have been banking with The Muslim Co-Operative Bank?
a. 1 year b. 1-5 years c. 5-10 years d. Not at all
2) Are you aware of the different loan schemes provided by the bank?
a. Yes b. No
63
3) What interest rates do you suggest for the maximum loan amount(15 Lakhs)?
a. 6-7% b. 8-10% c. Agree with existing
4) How do you rate the attitude of bank officials towards you while making transactions?
a. Excellent b. Good c. Satisfactory d. Poor
5) If you are aware of the loan scheme offered by the bank and desire to avail the facility of the scheme but have not availed so far, what is the reason?
a. Indifference of the branch people b. Complicated formalities c. Slow pace of processing
64
BIBLIOGRAPHY
65
BIBLIOGRAPHY
NAME OF THE BOOK
NAME OF THE AUTHOR
EDITION
Financial Management
I. M. Pandey
6th
Marketing of banking services
Lewis h. Haney
3rd
Marketing Management
Philip Kotler
4th
ANNUAL REPORT OF THE MUSLIM CO_OPERATIVE BANK LTD.
66
ANNEXURE Statement showing financial position of The Muslim Co-Operative Bank Ltd. as on 31st March
Name of The Bank Head Office Address Date Of Registration Date & No. Of RBI License Jurisdiction The Muslim Co-Operative Bank Ltd. 633 Raviwar Peth PUNE-411002 No. 7000 Dated 25th May 1931 UBD-MH-411/P Dated 18th Nov. 1984 Pune, Solapur, And Ahmednagar District , Greater Mumbai (Municipal Limit), Nasik, Thane As On 31st March 2008 (Rs.In Lacs.) 19 24300 2498 597.40 4440.55 10823.52 4344.74 11752.47 12469.27 401.56 88.85% 15.25% NIL NIL NIL 11016.00 5.00 6774.51 8.67% „I? „A? 272.77 159 45 204 32815.99
Items No. of Branches including Head Office Membership Regular Nominal Paid Up-Share Capital Total Reserve And Funds Deposits Saving Current Fixed Secured Advances Un-Secured Total % of Priority sector Total % of Weaker Section D.C.C. Borrowings M.S.C. Others D.C.C. Investments M.S.C. Others Overdue Percentage RBI Grade Audit Classification Profit For The Year Other Staff Sub Staff Total Staff Working Capital
67
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