T.Y. BANKING AND INSURANCE (SEM-V)
“TO STUDY ABOUT RURAL BANKING IN KOKAN REGION” IN PARTIAL FULLFILLMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF BANKING INSURANCE PREPARED BY KEDAR BHIDE ROLL NO. 03 T.Y.B&I MATRUSHRI KASHIBEN MOTILAL PATEL COLLEGE OF COMMERCE AND SCIENCE THAKURLI (E) - 421201 GUIDE Mrs. LEKHA VISARIA. UNIVERSITY OF MUMBAI, MUMBAI- 400028 Year 2013- 2014
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MAT.K.M.PAETL COLLEGE OF COMMERCE AND SCIENCE THAKURLI (E)
Format of Declaration by Research Student
I declare that the thesis/dissertation entitled “ MR.KEDAR BHIDE” submitted by the undersigned as a part of Third Year TYBBI Projects is a record of independent research work carried out by me under the supervision and guidance of Prof. and research guide MRS LEKHA VISARIA. This research project has not been previously submitted for the award of any diploma, degree, associate ship, or other similar title. Place: _________ Date: __________
Signature of the Researcher: ______________
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FORMAT RESEARCH SUPERVISOR’S CERTIFICATE MAT. K.M.PATEL SENIOR COLLEGE OF COMMERCE & SCIENCE
This is to certify that the work incorporated in the thesis submitted by MR.KEDAR BHIDE under was carried out under the guidance and supervision of MRS.LEKHA VISARIA such material is a record of independent research work carried out and has not been previously submitted for the award of any diploma, degree, associate-ship, or other similar title.
Place: __________ Date: ___________ Supervisor : ___________________
External Examiner: ____________________ Internal Examiner : ____________________
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ACKNOWLEDGEMENT
In this section, the researcher acknowledges the assistance and support received from individuals and organisations in conducting the researcher. It is thus intended to show his gratitude. Good taste calls for acknowledgement to be expressed simply expressed and nicely. I take this opportunity to thank all of them who played a major role in completing this project. I express my deep gratitude towards Prof.MRS.LEKHA VISAIRAcourse coordinator for encouraging me to work on this project. I also thank our in charge Principal Mrs. Lekha Visaria for her continuous encouragement to our activities. I must especially record my sincere thanks to my family members and all my friends for their constant support.
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Abstract
„Rural banking? describes the provision of banking and financial services that consequently pursue, as their main objective, a positive contribution to the potential of all human beings to develop, today and in the future.
In Rural Banking, the focus is on satisfying existing needs in the rural economy and the society whilst
simultaneously taking into account their social, cultural, ecological and economic sustainability. Furthering the common good by generating multiple returns with respects to these aspects is at its core. Generating a monetary profit is not an end but a frequent prerequisite to guaranteeing the necessary flexibility for pursuing its objective in a continuously changing environment.
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INDEX SR.NO PARTICULER CHAPTER.1 INTRODUCTION
1.1 1.2 1.3. BACKGROUND OF TOPIC PLACING RESEARCH PROBLEM STATING NEEDS FOR SURVEYING RESEARCHERS PRECISE INTERESTS IN THE STUDY TITLE OF THE STUDY OBJECTIVES OF THE STUDY HYPOTSIS DEFINITION OF THE IMPORTANT TERNS 1.9 1.10 1.11 1.12 ASSUMPTION OF THE STUDY REVIEW OF LITERATURE METHODOLOGY
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1.4. 1.5 1.6 1.7 1.8
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1.13
THE RESEARCH QUESTION
1.14
SIGNIFICANCE OF PRESENT STUDY SCOPE & LIMITATIONS OF THE PRESENT STUDY
1.15
CHAPTER.2 REVIEW OF LITERATURE CHAPTER.3 RESEARCH METHEDOLOGY
3.1 3.2 3.3 3.4 3.5 SAMPLING PLAN 3.6 3.7 3.8 VALIDATION OF TOOL DATA COLLECTION INSTRUMENTS RESEARCH METHOD SOURCES OF DATA RESEARCH AREA METHOD USE FOR DECIDING PLAN
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3.9 3.10
RATING SACLE RESEARCH PERIOD DATA PROCESSING & ANALYSIS
CHAPTER.4 DATA ANALYASIS & INTERPRITENTION CHAPTER 5 FINDING, SUMMERY& CONCLUSION CHAPTER 6 SUGGESTION &B RECOMMENDATION BIBLIOGRAPHY ANNEXURE
51
70
76
80 81
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Chapter-1 INTRODUCTION
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1.1) Background Of The Study
Indian economy is basically agrarian. Nearly 65% of the Indian population depends upon agriculture for a livelihood. As one of the measures to develop the economy and to provide support for nation building rural banking services are provided by banks. Since
independence, the efforts of the Government have revolved around expanding financial institution to rural and unbanked areas, so as to increase access to formal credit in rural underdeveloped regions. Banks were supposed to concentrate on rendering service to underprivileged people, living below poverty line, and cover more and more unbanked areas rather than just concentrating on commercial and corporate banking and not just their own profitability. The sectors now well known as priority sector such as Agriculture, Small-Scale Industries and exports remained the last priority of the Banking Sector.
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The All India Rural Credit Review Committee (1969) observed that Commercial banks have generally been more successful than co-operative institutionsinmobilizing deposits in the semi-urban areas. This may be partly on account ofsuperior customer services and partly because of a more sustained drive for deposits. In short rural banking provides the basic financial support required by the economically weaker sections of the society and thereby enables them to participate and benefit from the development programme. Once this is achieved, rural banking plays pivotal role for poverty alleviation through the network of Commercial banks, Regional banks (RRBs), Microfinance Institutions, Primary Agriculture Credit Societies and Self Help Groups (SHGs). Rural banking provides banking services like credit, deposits (recurring, fixed, savings and current), sale of third party products (insurance, mutual funds, goldcoins), remittances, and bill payment Majority of poor rural and semi urban population in India are unable to avail the basic banking facilities. As a result they are made to rely on private money lenders, charging exorbitant interest rates and are trapped in vicious circle
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of debt. The banks also rarely evaluate customer expectation. DIFFERENT SCHEMES PROVIDED UNDER RURAL BANKING LAGHU UDHAMI CREDIT CARD SCHEMEThe objective is to provide credit facility to small business retail traders, professionals, self-employed person and small industrial unites.
? Existing customers with a satisfactory record with working capital limits up to Rs.10 lakhs for the last three years are eligible for card.
? The credit card limits are fixed at 20% of the annual turnover declared for tax purposes in the case of artisans, businessmen, traders, and small entrepreneurs, while for the self employed.
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? In case of professionals, it is 50% of the gross annual income . ? Maximum per party credit limit is Rs.10 lakhs.
? The credit limit will be valid for three years and the bank will conduct internal reviews annually and enhancement of the limit will happen based on the operations.
? SWAROJGAR CREDIT SCHEME? ObjectiveTo provide adequate/timely credit, i.e, working capital or block capital or both to small artisans, handloom weavers, service sector, fishermen, self employed person, rickshaw owners, other micro entrepreneurs etc. In a flexible, hassle free and cost effective manner.
? Nature of financial accommodation13
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Composite loan including term loan (repayable 5 years) / revolving cash credit. ? CeilingRs.25,000 based on initial investment in fixed assets and/or working capital requirements/recurring
expenditure. (banks have discretion to enhance this limit beyond Rs.25,000) ? Validity and issueValidity for five years and could be renewed on a yearly basis. ? Renewal of working capital limits*Annual renewal based on the amount credited to the cash credit account/repayment performance in term loan account. *The revolving cash credit for working capital repaid within 12 months may be renewed
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*No withdrawal should be permitted if revolving cash credit remains outstanding for more than twelve months. ? InsuranceBeneficiaries would automatically be covered under the group insurance scheme and the premium would be shared by the bank and the borrower equally.
? Security/Margin/Interests/Prudential NormsSecurity, margin, rate of interest and prudential norms would be applicable as per the Reserve Bank?s norms. ? NATIONAL EQUITY FUNDSTo provide equity type support to small entrepreneurs for their projects, a fund entitled National Equity Fund is being administered by small industries Bank of India in participation with the Government. ? Eligible concerns*New as well as existing entrepreneurs in the tiny and SSI sector and service industry are eligible for assistance.
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*Sanction of refinance in respect of term loan for the projects by SIDBI is a pre-requisite for equity type assistance under the scheme.
*The complete requirement of the project in the form of equity assistance, the term loan and working capital will be provided by one agency i.e the Nationalized Bank/SFCs. ? KVIC?S MARGIN MONEY SCHEMEGRAMODYOG ROJGAR SCHEMEScheme introduced during July 1997 with the objective of improving employment in rural areas and check migration to urban area now called Gramodyog Rojgar (REGP). Scheme is operated through public sector banks and RRBs.
?Purpose-
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To start industrial activity in rural area in which fixed capital investment per head of an artisan or a worker does not exceed Rs.50,000 thus generating employment. ? Borrower?s contribution10% of project cost in case of SC/ST and other weaker section 5%.
? Bank finance90% of the project cost for General Category beneficiary and 95% of the project cost weaker section beneficiary. Project can also be financed by the Bank in the form of Composite Loan.
? REVISED KISSAN CREDIT SCHEMEKissan Credit Card (KCC) Scheme was introduced in banks in August 1998 on the lines of Model Scheme prepared by NABARD on RV Gupta committee
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recommendations. In order to cover term loans and agriculture. ? ObjectiveThe Scheme aims at providing adequate and timely credit for the comprehensive of farmers under single window, including the short-term credit needs and a reasonable component for consumption needs, through Kissan Credit Card. ? Participating BankAll Commercial Banks RRBs, State Co-operative Banks PACS/DCCBs and Scheduled Primary Co-operative Banks.
? Nature of financial accommodationTerm loan and revolving cash credit. ? Quantum of limitShort term credit limit for crops term loan and working capital limit for agriculture.
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? Validity period of KCCCoinciding with the introduction of term loan facility under KCC, the validity of KC card may be extended from 3 years as at present to 5 years.
INTENSIFICATION OF PRIORITY SECTIONSPriority sectors are identification by National Credit Council. The finance minister of Central Government is the chairman of this Council and the Governor of Reserve Bank of India is the Vice-chairman.
SEGMENTS OF PRIORITY SECTORThe following is a list of the segments forming the priority sector? AGRICULTURE? Short-term loan for raising crops i.e for crop loans-
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In addition, advances up to 10 lakh to farmers against pledge of agriculture produce (including warehouse
receipts) for a period not exceeding 12 months, where the farmers were given crop loans for raising the produce, provided the borrowers drawn credit from one bank. ? Medium and Long-term loans*Purchase of agriculture implements and machinery. *Construction of farm building and structures. *Land Development Schemes. *Production and processing of hybrid seeds for crops. ? Indirect Finance to Agriculture*Credit for financing the distribution of fertilizers,
pesticides, seeds etc. *Loans up to Rs.40 lakhs granted for financing distribution of inputs for the allied activities such as, cattle feed, poultry feed, etc. incurred by them for providing Low Tension connection from step-down point to individual farmers for energizing their wells.
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*Loans to SEB are for systems Improvement Scheme under Special Project Agriculture (SISPA) *Loans to farmers through PACS, FSS and LAMPS. *Deposits held by the banks in RIDF maintained with NABARD. *Subscription to bonds issued by Rural Electrification Corporation (REC) exclusively for financing in rural and semi-urban areas and also for financing System
Improvement Program. *Subscription to bonds issued by NABARD for financing exclusively for agriculture/allied activities. ? SMALL SCALE INDUSTRYA working definition of small scale unit was first evolved in the year 1955 where after review was undertaken from time to time and presently the investment ceiling for SSI is Rs.100 lakhs from December 24, 1999. Units which had obtained permanent registration (i.e investment up to Rs.3 crore) prior to December 1999 notification would continue to be regarded as Small Scale Industries.
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Government increased the investment ceiling from Rs.1 crore to Rs.5 crore.
? TINY UNITSThe small scale units engaged in manufacturing
processing preservation of goods, mining, servicing and repairing of specified type of machinery and equipment, agro service units, where the investment in plant and machinery does not exceeds Rs.25 lakhs. ?SMALL SCALE INDUSTRIESAn undertaking which is engaged or is proposed to be in the manufacturing of production of parts, components, tooling or intermediates or the rendering of services and undertaking supplies or proposes to supply or renders not more than 50% of its production or services, as the case may be, to one or more other industrial undertaking and whose investment in fixed assets in plans and machinery, where held on ownership terms or on lease or on hire purchase, does not exceed Rs.100 lakh.
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?ARTISANS, VILLAGE AND COTTAGE INDUSTRYIt is defined as Artisans or small industrial activities in villages and small towns with a population not exceeding 50,000 involving utilization of locally available natural resources and/or human skills were individual credit requirements do not exceeds 50,000/-. It possesses negligible capital investment. There is hand-made
production and no wage earning person is employed in cottage industry. The industries in rural areas having population below 10,000 and having less than Rs.50,000 as fixed capital investment per worker are termed village industries and KVIC provide economic and technical assistance in establishment and operation of such industries.
? RETAIL TRADEAdvances granted to retail traders dealing in essential commodities and consumer co-operation stores and private retail traders with credit limits not exceeding Rs.10 lakhs.
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?SMALL
ROAD
AND
WATER
TRANSPORT
OPERATORS? Advances to small road and water transport operator sowing a fleet of vehicles not exceeding 10 vehicles, including the one proposed to be financed.
? Advances to NBFC?s for on-lending to truck operator and SRWTO?s other than truck operators satisfying the eligibility criteria. Also, portfolio purchases from NBFC?s made after 31.07.98 would also qualify for inclusion under priority sector lending, provided the portfolio purchases relate to SRWTO?s satisfying priority sector norms.
? PROFESSIONAL AND SELF- EMPLOYED PERSONS?Loans to professional and self-employed persons include loans for the purpose of purchasing repairing or renovating equipment including computer for professional
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use and/or business or tools and/or for working capital requirement to medical practicing company secretary, Lawyers, Engineers, Architects, Surveyors, or
Management
Consultants,
Accredited
freelancer
journalists, Cameramen, persons running health centre or to a person trained in any other art or craft who holds either a degree or diploma from many institutions established, Aided, or recognized by Government or to a person who is considered by the Bank as technically qualified or skilled in the field in which he is employed. The following will also be eligible for classified under this item-
*The term also includes firms and joint ventures of such professional and self-employed persons. This category will include all advances granted by the bank under special schemes, if any, introduced for the purpose.
*Only such professional and self-employed persons whose borrowings do not exceed Rs.10 lakhs which not more than Rs.2 lakhs should be for working capital
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requirements, are covered under this category. However, in the case of professionally qualified medical
practitioners, setting up of practice in semi-urban and rural areas, the borrowing limits should not exceed Rs.15 lakhs with a sub-selling of Rs.3 lakhs for working capital requirements. Advances granted for purchases of one motor vehicles to professional and self-employed persons other than qualified medical practitioners will not be included under the priority sector.
? EDUCATION LOAN SCHEME-
Courses eligible for studies?In India- All kinds of education in India.
?Abroad-
Graduation,
Post
graduation,
Courses
conducted by CIMA-London, CPA in USA etc.
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?Eligibility-Indian National having secured admission to professional/technical courses through Entrance
Test/selection process secured admission to foreign university/institution. There are no minimum marks criteria.
?Quantum of finance- Need based subjected to repaying capacity of parent/student.
?Studies abroad- Maximum Rs.15 lakhs.
?Collateral Security- No security may be insisted upon for loans up to Rs.7.50 lakhs. Parents would be co-obligates.
?Moratorium- Course period plus one year or six months after getting job whichever is earlier.
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?Repayment-
5-7
year
after
commencement
of
repayment. The accrued interest during there payment holiday period to be added the principal and repayment in Equated Installment (EMI) fixed. Half percentage interest concession may be provided when repayment holiday is specified for interest/repayment under the scheme.
?STATE
SPONSERED
ORGANISATION
FOR
SCHEDULED CASTE/SCHEDULED TRIBESAdvanced sanctioned to such organizations for the specific purpose of purchases and supply of inputs to and/or the marketing of the outputs of the beneficiaries of these organizations.
? WEAKER SECTION PRIORITY SECTORThe concept of weaker sections under priority sector was introduced as per recommendations of Krishna Swami Committee (1980). It comprises-
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? Small and marginal farmers with land holding of 5 acres and less and landless laborers, tenant farmers and share croppers.
?Artisans, village and cottage industries where individual credit limits do not exceed Rs.50,000/-.
?Beneficiaries of Differential Rate Interest (DRI) scheme.
?Beneficiaries of SwarnaJayantiRojgarYojana (SJSRY).
?Beneficiaries
under
Scheme
for
Liberation
and
Rehabilitation of Scavengers (SLRS).
?Advances to Self Help Group including NGOs for onlending purposes.
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?Loans to distressed urban poor to prepay their debt to non-institutional lenders.
1.2) Placing The Research Problem:An important implication of the challenge which awaits banks generally and co-operative banks in particular is that they can win the confidence and patronage of the prospective depositor (rural), only if they can provide him with banking services attuned to his needs, preferences and convenience. Rural banks are engaged in providing finance to farmers to meet their agriculture requirement i.e. purchase of seed, machinery, equipment etc.Rural population is illiterate so either they do not have information on how to avail loans or they may not understand legal formalities to be complied to avail banking services. >Cultural and Psychological Barriers: Low income households believe that it is primarily rich households that save in bank accounts, whereas poor households are seen to be more likely to save informally at home or in livestock.
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>High Minimum Deposits: Banks typically require high minimum balances to open accounts, which low-income households are unable to provide. >Lack of Proper Documentation: Poor households rarely have proof of identity, address, or employment. This problem is more acute for women and migrant workers.
1.3) Stating the Need for Survey:-
Regional Rural Banks (RRBs) are a type of governmentowned commercial bank that account for 19 percent of total deposits in rural areas.51 Over thepast couple of years, deposits in RRBshave been growing, but in different ways compared to othercommercial banks. For example, regular savings deposits inRRBs exceed term deposits, and a larger number of accounts that are opened focus on high liquidity. Rural banking plays an important role in rural
development. More people of rural area is engaged with the activities like farming, poultry, horticulture, cottage
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industry, small scale industry related to the agriculture etc. banks provides the finance to those sectors for their development. so there is need to see the actual scenario of effectiveness of the rural banking in rural areas of the country. What is more important, in providing these services the banks have to display a degree of enterprise and spirit of innovation? The innovation may have to vary from area to area and can only come up from experience depending on the local circumstances and preferences.
1.4) Researcher Precise Interest In Study:Being student of T.Y.B&I it is necessary to take the banking project of Vth semester .For this researcher accessed people residing at devgad, sindhudurg district. The area is mond village of devgadtaluka, where researcher met the rural people having accounts in bank. It was interesting to know how many people residing in these rural areas had bank accounts and for what purpose. The researcher was also intrigued to find if these rural people were aware of various banking facilities
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provided to them,
difficulties and also satisfaction of the
customers while availing the rural banking facilities. The researcher also wanted to find the various difficulties faced while availing rural banking facilities like complying with legal formalities, requirement of documentation, limited knowledge about the various credit schemes, and limitation on credit, interest amount and security issues.
1.5) Title of the Study: - To Study About Rural Banking In Kokan Region.
1.6) Objective of The Study:1) To know popular sources of awareness of rural banking among the customer. 2) To know the various scheme under rural banking. 3) Find out customer satisfaction towards legal formalities of rural banking.
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4) To find out the overall satisfaction about the rural banking5) To know the sources from which customer get awareness about rural banking facilities.
1.7) Hypothesis: Majority rural people are aware about rural banking facility and they also avail the banking facility.
1.8) Definition Of The Important Terms:1)Bank:-An establishment authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers. 2) Rural banking: - Rural banking is also called as ethical banking. It is a bank concerned with rural and environment impact of its investment and loan. The „Rural Banking? policies being followed by the country resulted in widening the „geographical spread and functional reach? of commercial banks in rural areas in the period that followed the nationalization of Banks.Borrowers in priority
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sector are given preferential treatment while lending. Interest rates are lower, security norms are relaxed. .
1.9) Assumption Made For Present Study:1) Customer quires are solved by bank immediately. 2) With the minimum balance and minimum legal formalities they get the rural banking facilities.
1.10) Review Of Literature:Government of India promoted rural banking through Regional Rural Banks (RRBs) through the RRBs Act of 1976 to bridge the gap in the flow of credit to the rural poor. The RRBs have a special place in the multi-agency approach adopted to provide agricultural and rural credit in India. These banks are state-sponsored, regionallybased and rural-oriented. Besides the RRBs, commercial and co-operative banks have been catering to the credit requirements of the rural sector.
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The
renewed
emphasis
on
agricultural
and
rural
development by the Government of India would lead to a growing demand for different types of financial services in the rural areas. The present structure of rural credit may not be able to cater to the same. RRBs would be called upon to play a greater role in providing such services due to their rural character and feel. RRBs have to take over a larger share of credit disbursements calling for much larger resource mobilization, as also greater efforts for their institutional strengthening.
1.11) Methodology:The researcher approaches to 50 respondents in Devgad Taluka. Out of 50respondent 35 respond to questionnaire. The final study of project was done through based on these 35 respondents. The analysis of data was done with help of mean (%) and excel sheet.
1.12) Research Question:Which facility provided under rural banking facility.
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1.13) Significance Of The Study:1) The importance of the rural banking in the economic development of a country cannot be overlooked. 2) Without the upliftment of the rural economy as well as the rural people of our country, the objectives of economic planning cannot be achieved. 3) The real growth of Indian economy lied in the emancipation of rural masses from acute poverty, unemployment, and socio-economic backwardness. 4) Bank and other financial institutions are of vital importance for development of rural economy of a country.
1.14) Scope and Limitation Of The Present Study:ScopeThe present study has been taken to find out various rural banking facilities and analyze the customer awareness and satisfaction from the above scheme. The study will also identify effectiveness of rural banking.
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Limitation1) A study was conduct by researcher in Sindhudurg district in Devgad Taluka only. 2) The data was collected from only thirty-five customer applied for rural banking services and from one bank offering social banking services. 3) The study was limited to only respondents in this district .To analysis the number of visits made by them to bank for which they are applied loan for, satisfaction towards legal formalities by rural banking services.
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Chapter- 2 Review Of Literature
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(1) Do Rural Banks Matter? Evidence from the Indian Rural Banking Experiment
http://ideas.repec.org/p/bri/cmpowp/04-104.html Background Lack of access to finance is often cited as a key reason for why poor people remain poor.Between 1977 and 1990, the Indian central bank mandated that a
commercial bank can open a branch in a location with one or more bank branches only if it opens four locations with no bank branches. Findings – 1) We show that, between 1977 and 1990, this rule caused banks to open relatively more rural branches in Indian states with lower initial financial development. 2) The reverse was true outside this period. We exploit this fact to identify the impact of opening a rural bank on poverty and output. Our estimates suggest that the Indian rural branch expansion program significantly lowered rural poverty, and increased non-agricultural output.
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(2) Financial Inclusion –Role of Banking Industry
http://ideas.repec.org/a/ucp/ecdecc/doi10.1086657122.html Background Banks that have global ambitions must meet local aspirations. Financial access will also attract global market players to our country that will result in increasing employment and business opportunities. Findings 1) If we look at the progress that has been achieved, banks are able to scale up and sustain their efforts, India is quite hopeful that the targets set by the banks and objectives of achieving universal financial inclusion are attainable.
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(3) The Distributive Consequences of Rural Banking: A Micro empirical Analysis of the Indian Experience
JMINTERNATIONAL JOURNAL OF HR REVIEW BackgroundThe governments of many developing economies have actively promoted the expansion of banks in rural areas, believing that such investments are necessary to reduce poverty and existing levels of wealth inequality. There is little evidence on whether such “rural banking” programs succeed in their objectives. This article uses the government of India's credit policies of the 1980s to test the effect of the two main components of the socialbanking program on households, the spread of rural banks and required lending for agriculture.
Findings1) I find that rural banking had a larger effect on no poor households relative to poor, defined in terms of wealth and land ownership. Of the two components of the program, it is bank access that matters.
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(4) A STUDY RURAL BANKING IN INDIA: PRIORITY SECTOR LENDING AND ITS DEVELOPMENTS
P.Raman Research Scholar, Bharathiar University, Coimbatore. BackgroundThe banking system touches the lives of millions and has to be inspired by larger social purpose and has sub verse national priorities and objectives such as rapid growth of agriculture, small industries and exports, rising of literacy rate, encouraging new entrepreneurs and development of backward areas. [email protected]
Findings1) Branch expansion and priority sector lending scheme became the main part of rural banking. 2) During the post nationalization period, spanning more than 3 decades, the Bank has grown in size and stature with more than 80,547 branches (31,667 branches in rural and 18,969 branches in semi-urban) spread across the length and breadth of the country.
.
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(5) Rural banking for operational flexibility and Effectiveness.
http://ideas.repec.org/p/bri/cmpowp/04-104.html BackgroundGovernment of India initiated the revolutionary concept of rural banking for operational flexibility and effectiveness. Priority sector lending is another notable initiative of the government of India to strengthen the rural banking concept. Branch banking into unbanked areas and priority sector lending to target sectors have succeeded in the reduction of poverty in India and bringing about a uniform sect oral development particularly in rural areas to some extent.
Findings1) The extension of banks to rural areas has led to increases were driven by agricultural and nonagricultural output.
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2) When the banks were given freedom in case of placing branches they seem to bypass the needy and poor society.
(6)The Future of Rural Banking
http://www.kpmg.com/global/en/issuesandinsights/articles publications/social-banker/pages/future-of-socialbanking.aspx
Background "One thing is certain: rural networking will be a game changer for banks."
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Chapter – 3 RESEARCH METHODOLOGY
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3.1) Research Method:Researcher decides to survey in Devgad Taluka at Sindhudurg District. The researcher used survey method for present study.
3.2) Sources of Data:-
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a) Primary data:The researcher collected the primary data personally through face to face interaction and also with observation method. a) Secondary data:The secondary data was collected through various ways which Journals Newspaper Internet Books
3.3) Research Area:The researcher has made research in devgad taluka at kokan region.
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3.4) Method Use for Deciding the Sampling Plan:The sample constituted of 35 respondents. The sample size was 35.the element of sample was customer selected through random method. The entire respondent whom researcher approaches was availing rural banking facility.
3.5) Sampling Plan:The approach was made to the respondent two times.at first visits out of 35 respondents 19 responded very perfectly and then remaining 16 respondents responded on second visit.
3.6) Validation of Tool:49
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The tool was send to bank official, professor to verify their validity & correction where made after receiving their suggestion the tool was then finalize.
3.7) Data Collection Instruments:The types of instruments used for data collection were through surveying, internet, approaching to banks and customer to know about rural banking services for rural people.
3.8) Rating Scale:Liker scale used for quantative analysis.
3.9) Research Period:The researcher has made research during the month of July to December 2013.
3.10) Data Processing &Analysis of Plan:The data processing & analysis with the help of mean percentage method using excel sheet.
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Chapter - 4 Data Analysis and Interpretation
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1) Are you aware about rural banking facility? TABLE PARTICULAR YES NO. 1 RESPONSE RECEIVED 45 2 TOTAL RESPONDENT 50
NO 05 50
100 90 80 70 60 50 40 30 20 10 0
90%
10%
YES
NO
Interpretation: 1) Out of total respondent 90% are aware about rural banking facility. 2) Only 10% respondent is unaware about rural banking facility.
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2) Where did you come to know about rural banking facility? TABLE PARTICULAR PERSONAL COMMERICAL PUBLIC NO 1 RESPONSE 07 08 35 RECEIVED 2 TOTAL 50 50 50 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 PERSONAL COMMERICAL PUBLIC 14% 16% 70%
Interpretation: 1) Out of total respondents 70% are knowing about rural banking facility through public source i.e. TV, Radio etc. 2) 10-20% respondents are knows through commercial and personal sources.
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3) Have you applied for any loan or borrowing? TABLE NO PARTICULAR YES 1 RESPONSE RECEIVED 35 2 TOTAL RESPONDENT 50
NO 15 50
100 90 80 70% 70 60 50 40 30% 30 20 10 0 YES NO
Interpretation:1) More than 50% respondents are applies for loan under rural banking facility. 2) Only 30% are not applies for loan.
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4) How many times you approach for inquiry in banks? TABLE PARTICULAR 1 2 3 3& MORE NO VISIT VISITS VISITS VISITS 1 RESPONSE 15 11 06 03 RECEIVED 2 TOTAL 35 35 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 1 VISITS 2 VISITS 3 VISITS 3 + VISITS 17% 8% 43% 31%
Interpretation: 1) Maximum people are visited in bank only 1 time for inquiry. 2) 31% are visited by 2 times. 3) 05-20% people are visited for 3 and more times.
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5) Were your quires cleared by bank? TABLE NO PARTICULAR YES 1 RESPONSE 35 RECEIVED 2 TOTAL 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0% 0 YES NO 100%
NO 00 35
Interpretation: 1) 100% respondent responded that all quires are solved by banks.
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6) For which purpose you apply a loan? TABLE PARTICULAR AGRICULTURE SME’s EDUCATION OTHER NO 1 RESPONSE 20 05 10 00 RECEIVED 2 TOTAL 35 35 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0% 0 AGRICULTURE SME's EDUCATION OTHER 14% 29% 57%
Interpretation: 1) Maximum people are taking loan for agriculture purpose. 2) Up to 14% are taking for SMEs purpose. 3) More than 20% customers is applying for education loan.
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7) What minimum balance required to opening bank account? TABLE PARTICULAR 0 BALANCE UPTO UPTO NO RS-200 RS- 400 1 RESPONSE 22 06 07 RECEIVED 2 TOTAL 35 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 ZERO BALANCE UPTO RS 200 UPTO RS 400 17% 20% 63%
Interpretation: 1) In maximum banks minimum balance is 0 for opening account to avail rural banking facilities. 2) 15-20% banks charges from Rs-0 to Rs-400 for account opening.
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8) How are the legal formalities to avail the banking service? TABLE PARTICULAR GOOD SATISFACTORY NON NO SATISFACTORY 1 2 RESPONSE 13 RECEIVED TOTAL 35 RESPONDENT 18 35 04 35
100 90 80 70 60 50 40 30 20 10 0 GOOD SATISFACTORY NON SATISFACTORY 12% 37% 51%
Interpretation: 1) Maximum i.e.51%respondent said that legal formalities are satisfactory. 2) 37% respondents told that legal formality is good. 3) Only 12% customer dissatisfied with this formalities.
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9) Do you expect softer legal formalities? TABLE NO PARTICULAR YES 1 RESPONSE 29 RECEIVED 2 TOTAL 35 RESPONDENT
NO 06 35
90 80 70 60 50 40 30 20 10 0
83%
17%
YES
NO
Interpretation: 1) Out of total respondents only 17% are not expecting softer legal formalities. 2) Maximum respondents are expects softer legal formalities from the bank.
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10) How did bank provide you consultancy services? TABLE PARTICULAR PERSONAL COMMERICAL NO 1 RESPONSE 18 17 RECIVED 2 TOTAL 35 35 RESPONDENT
PUBLIC 00 35
100 90 80 70 60 50 40 30 20 10 0% 0 PERSONAL COMMERICAL PUBLIC 51%
49%
Interpretation: 1) 51% banks provide consultancy services through their personal sources i.e. employee, executive etc. 2) Only 49% banks provide through commercial sources.
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11) How much amount of loan or funds you applied? TABLE PARTICULAR UPTO RS-100000 RS-100000 NO TO 1000000 1 RESPONSE 15 08 RECEIVED 2 TOTAL 35 35 RESPONDENT
RS-1000000 & MORE 12 35
100 90 80 70 60 50 40 30 20 10 0 UPTO RS100000 RS-100000 TO RS-1000000& 1000000 MORE 23% 43% 34%
Interpretation: 1) Maximum people are taking loan up to Rs 100000 only. 2) 34% is taking loan more than Rs 1000000. 3) Up to 23% people are taking Rs 100000 to 1000000.
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12) Any problem you faced while taking the loan? TABLE NO PARTICULAR YES NO 1 RESPONSE 06 29 RECEIVED 2 TOTAL 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 YES NO 17% 83%
Interpretation: 1) Maximum respondents have not faced any problem while taking loan. 2) Only 17% respondents faced problem while taking loan.
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13) Is rate of interest charged by bank, is satisfactory? TABLE NO PARTICULAR YES 1 RESPONSE 20 RECEIVED 2 TOTAL 35 RESPONDENT
NO 15 35
100 90 80 70 60 50 40 30 20 10 0 YES NO 57% 43%
Interpretation: 1) Majority respondent are satisfied with interest rate charged by banks. 2) Below 50% respondents are not satisfied with interest rate charged by banks.
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14) How do you make repayment of borrowing? Loans? TABLE NO PARTICULAR BY CASH BY CHEQUE 1 RESPONSE 20 15 RECEIVED 2 TOTAL 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 BY CASH BY CHEQUE 57% 43%
Interpretation: 1) Maximum respondent respond makes repayment through cash mode only. 2) Out of total respondents only 43% make repayment by cheque.
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15) What is period for repayment amount? TABLE PARTICULAR MONTHLY QUARTERLY HALF YEARLY NO YEARLY 1 2 RESPONSE 02 RECEIVED TOTAL 35 RESPONDENT 04 35 16 35 13 35
100 90 80 70 60 50 40 30 20 10 0 MONTHLY QUERTARLY HALF- YEARLY YEARLY 6% 11% 46% 37%
Interpretation: 1) Generally the period for repayment is half yearly. 2) 37% repaid by yearly. 3) 5%-20% respondent repaid money monthly to quarterly.
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16) Have you failed to make repayment of loan? TABLE NO PARTICULAR YES 1 RESPONSE 01 RECEIVED 2 TOTAL 35 RESPONDENT
NO 34 35
100 90 80 70 60 50 40 30 20 10 0 YES 3%
97%
NO
Interpretation: 1) Maximum respondent have not failed to make repayment of loan. 2) Only 3% respondent are failed to make repayment of loan.
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17) Do you have any complaint against rural banking facilities? TABLE NO PARTICULAR YES NO 1 RESPONSE 03 32 RECEIVED 2 TOTAL 35 35 RESPONDENT
100 91% 90 80 70 60 50 40 30 20 10 0 YES NO 9%
Interpretation: 1) 91% respondent doesn’t have any complain regarding rural banking. 2) Only 9% having complained regarding rural banking.
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18) Will you suggest to other for rural banking facilities? TABLE NO PARTICULAR YES NO 1 RESPONSE 25 10 RECEIVED 2 TOTAL 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 YES NO 29% 71%
Interpretation: 1) 71% respondents suggest to other for rural banking facility. 2) 29% respondents are not suggested for rural banking facility.
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Chapter 5 SUMMERY OF FINDINGS AND CONCLUSIUON
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Findings:1) It is found that awareness of rural banking
facility in rural area are more?
2) It is found that majority People i.e. are aware
about rural banking facility through public source i.e.TV, Radio.
3) It is found that majority people from rural area
are taking loan facility.
4) Major people approaches in banks only 1 time
for their inquiry.
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5) No people have a quires regarding rural
banking facility. Means banks solve all the quires of the customer.
6) Majority people apply for agriculture loan than
the other type of loan.
7) It is found that Banks provides the rural
banking facility with zero balance account to majority people i.e.63%.
8) Most of customer is feeling that legal formality
is satisfactory and not too much hard.
9) Although customer satisfied with the present
legal formality, but they want that it should be softer in future.
10) It is found that in rural areas banks provides
constancy through personal sources i.e. by face to face, through sales personal etc.
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11) Majority customer is low earning group, so
they may take loan of small amount that is up to Rs .100000.
12) It is found that there is no major problem faced
by people while taking credits under rural banking scheme.
13) It is found that more people are satisfied with
interest rate charged by the banks.
14) It is found that because of customer?s
unawareness about modern banking facility, they prefer to make repayment by cash mode only.
15) It is found that majority customer is repaying
the loan amount half yearly basis i.e. after completing the one crop season.
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16) It is found that major customer repays their
loan amount in specific time limit which given by the banks.
17) It is found that most customers are satisfied
with the rural banking services provided by banks.
18) It is found that awareness and Popularity of
rural banking facility in rural area is very large.
Summary:Nowadays rural people are interested to take rural credit because of easy availability and smooth functioning of their agricultural activity. The main objective of this study is to know the present scenery & nature of rural banking in kokan region.in this study researcher found that majority rural people have applied for rural credit. Mainly it has taken for agriculture purpose & amount taken as loan is mostly up to Rs-
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100000.and most of the customer are satisfied with the facility and interest rate provided by bank.
Conclusion:Rural banking provides the basic financial support required by the economically weaker sections of the society and thereby enables them to participate and benefit from the development programme. Once this is achieved, rural banking plays pivotal role for poverty alleviation through the network of Commercial banks, Regional banks (RRBs), Microfinance Institutions,
Primary Agriculture Credit Societies and Self Help Groups (SHGs). However, availability of credit alone cannot alleviate poverty. Several other reforms are too needed like land reform which would better enable absorption of microfinance. But in any case, banks and financial institutions do ensure flow of credit to the poor strengthen their economy.
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Chapter 6 SUGGESTION
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1) Government should encourage and support banks to take appropriate steps in rural development. 2) Efforts should be made to ensure that the non-interest cost of credit to small borrowers is kept as low as possible. 3) Policy should be made by government for opening more branches in weaker and remote areas of state. 4) Productivity can be improved by controlling the costs and increasing the income. 5) To participation cost, subsidy should be adjusted towards the end of the transaction for which loan assistance is sanctioned. 6) Government should take firm action against the defaulters and shouldn?t make popular announcements like waiving of loans.
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7) The rural banks have to make an important change in their decision making with regard to their investments. 8) The Rural banks have to be very careful and reduce the operating expenses, because it has been found from our study that these expenses have increased the total expenditure of the banks. 9) The Rural banks have to give due preference to the micro-credit scheme and encourage in the formation of self-help group. 10) Cooperative societies may be allowed to sponsor or co-sponsor with commercial banks in the establishment of the rural banks. 11) A uniform pattern of interest rate structure should be devised for the rural financial agencies. 12) The rural banks must strengthen effective credit administration by way of credit appraisal, monitoring the progress of loans and their efficient recovery. 13) The credit policy of the rural banks should be based on the group approach of financing rural activities.
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14) The rural banks may relax their procedure for lending and make them easier for village borrowers.
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BIBLIOGRAPHY
WWW.RBI.CO.IN WWW.SME.IN WWW.MANAGEMENT PARADIZE.COM
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ANNEXURE
Questionnaire for Customer
MAT.K.M.Patel senior College of Commerce & Science
Padmakar Colony, Near railway station, thakurli(East)
Research Topic : To study about rural Banking in kokan region. By – kedar Bhide. (T.Y.B.B.I )
Name Address
: -------------------------------------------------------------: ---------------------------------------------------------------------------------------------------------------------------
Phone No Qualification
: -------------------------------------------------------------: -------------------------------------------------------------Questioner for customer
1)
Are you aware about rural banking facilities?
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T.Y. BANKING AND INSURANCE (SEM-V)
1. Yes 2)
2. No
Where did you come to know about rural banking facility? 1. Personal sources – face to face 2. Commercial sources – Pamphlet, advertisement 3. Public sources – TV, radio
3)
Are you applied for any loan or borrowing? 1. Yes 2. No
4) How many time you approach for inquiry in bank 1. 1 visit 2. 2 visits 3. 3 visits 4. More than 3 visits 5) Were your quires cleared by bank? 1. Yes 2. No For which purpose you applied a loan? 1. Agriculture 4. Other 7) What minimum balance required to open bank account? 1. Zero balance 2. Up to Rs 200 3. Up to Rs 400 2.SME’s 3.Education
6)
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8)
Which documents are submitted by you? ----------------------------------------------------------------------------------------------------------------------------------------------------------How are the legal formalities to avail banking services? 1. Good 2. Satisfactory 3. Non- Satisfactory Do you except softer legal formalities? 1. Yes 2. No
9)
10)
11)
How did bank provide you consultancy services? 1. Personal 3. other 2. Commercial
12)
How much amount of loan or funds you applied? 1. Rs.100000 2. Rs.100000 to 1000000
2. Rs.1000000and more 13) Any problem/ error faced by you while taking funds? 1. Yes 14) 2. No
Is rate of interest charged by bank , is satisfactory? 1. Yes 2. No
15)
How do you make repayment of borrowing? loans? 1. By Cash 2. By Cheque
16)
What is period of repayment amount?
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1. Monthly 3. Half-yearly 17)
2. Quarterly 4. Yearly
Have you failed to make repayment of loan? 1. Yes 2.No
18) How much amount bank charged as fine for laterepayment ? ------------------------------------------------------------------------------------------------------------------------------------------------------19) Do you have any complaint against rural banking facilities? 1. Yes 2. No
20) Will you suggest to other for rural banking facility or this service? 1. Yes 21) give? 2. No
Any suggestions to bank & customer you would like to
-----------------------------------------------------------------------------------------------------------------------------------------------------
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Questionnaire for Bank
MAT.K.M.Patel senior College of Commerce & Science
Padmakar Colony, Near railway station, thakurli(East)
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Research Topic : Social Banking with Reference to Bank of India By – kedar Bhide. (T.Y.B.B.I )
Questioners for bank
1)
Do your bank providing rural banking related facility? 1. Yes 2. No 2. For which sector bank is providing? 1. Agriculture sector 2. Small scale industry 2. Retail trade 4. Professional – self employed 5. Other Which is preferred by the customer? Why? 1. For Agriculture 2. For small scale industry 3. For self-employed 4. For other purpose --------------------------------------------------------------------
2)
3)
4)
How do you bring awareness among customer with respect to different facilities? 1. Personal face to face, workshop, seminar 2. Commercial – News paper, advertisement, pamphlet
5)
How many customer approach for enquiry with respect to social banking? 1. Yes 2. No
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T.Y. BANKING AND INSURANCE (SEM-V)
6)
How many customer approximately do you provide rural banking service in your branch? 1. Up to 25 2. 25 to 50 3. 50 & more
7)
What is minimum balance need for open account to avail facility under priority sector? 1. Zero balance 2. Upto Rs.200 3. Upto Rs. 400
8)
What are the norms accessing facilities under social banking? 1. Documents 2. Minimum balance 3. Eligibility criteria 4. Other
9)
How are the legal formalities to avail banking service? 1. Convenient to customer 2. Easy & quick 3.Liberal 4. Strict Do you expect softer legal provisions for increasing opportunities in rural banking? 1. Yes 2. No 2. How do you provide consultancy service to customer in priority sector? 1.By personal service 2.By commercial service
10)
11)
12)
How big is your portfolio of credit with respect to priority sector lending?
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1.Upto 30%
2.Upto 50
3.More than 50%
13)
What is policy regarding or respect with SME’s (Small Scale enterprise) ---------------------------------------------------------------------------------------------------------------------------------------------
14) ------
Any special policy for Agriculture sector? --------------------------------------------------------------------------------------------------------------------------------------
15)
Do you have regulatory body to safeguard frauds? 1.Yes 2.No
16)
Do you follow any model of cost management technique to mitigate any losses? 1.Yes 2.No Which technique followed by bank? -------------------------------------------------------------------------------------------------------------------------------------------
17)
18)
It is really helpful to this people i.e farmer, small traders etc to implementing this Policy? 1.Yes 2.No
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T.Y. BANKING AND INSURANCE (SEM-V)
19)
Do you need to keep innovative to match bank requirements? 1.Yes 2.No
20)
Will innovations in banking industry increase social banking opportunity agriculture Sector? 1.Yes 2.No Will social banking lead to sustainable development of banking industry? 1. Yes 2. No Have you achieved your objective of mass banking through social banking? 1.Yes 2.No
21)
22)
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doc_395754542.pdf
“TO STUDY ABOUT RURAL BANKING IN KOKAN REGION” IN PARTIAL FULLFILLMENT FOR THE AWARD OF THE DEGREE OF BACHELOR OF BANKING INSURANCE PREPARED BY KEDAR BHIDE ROLL NO. 03 T.Y.B&I MATRUSHRI KASHIBEN MOTILAL PATEL COLLEGE OF COMMERCE AND SCIENCE THAKURLI (E) - 421201 GUIDE Mrs. LEKHA VISARIA. UNIVERSITY OF MUMBAI, MUMBAI- 400028 Year 2013- 2014
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T.Y. BANKING AND INSURANCE (SEM-V)
MAT.K.M.PAETL COLLEGE OF COMMERCE AND SCIENCE THAKURLI (E)
Format of Declaration by Research Student
I declare that the thesis/dissertation entitled “ MR.KEDAR BHIDE” submitted by the undersigned as a part of Third Year TYBBI Projects is a record of independent research work carried out by me under the supervision and guidance of Prof. and research guide MRS LEKHA VISARIA. This research project has not been previously submitted for the award of any diploma, degree, associate ship, or other similar title. Place: _________ Date: __________
Signature of the Researcher: ______________
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T.Y. BANKING AND INSURANCE (SEM-V)
FORMAT RESEARCH SUPERVISOR’S CERTIFICATE MAT. K.M.PATEL SENIOR COLLEGE OF COMMERCE & SCIENCE
This is to certify that the work incorporated in the thesis submitted by MR.KEDAR BHIDE under was carried out under the guidance and supervision of MRS.LEKHA VISARIA such material is a record of independent research work carried out and has not been previously submitted for the award of any diploma, degree, associate-ship, or other similar title.
Place: __________ Date: ___________ Supervisor : ___________________
External Examiner: ____________________ Internal Examiner : ____________________
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T.Y. BANKING AND INSURANCE (SEM-V)
ACKNOWLEDGEMENT
In this section, the researcher acknowledges the assistance and support received from individuals and organisations in conducting the researcher. It is thus intended to show his gratitude. Good taste calls for acknowledgement to be expressed simply expressed and nicely. I take this opportunity to thank all of them who played a major role in completing this project. I express my deep gratitude towards Prof.MRS.LEKHA VISAIRAcourse coordinator for encouraging me to work on this project. I also thank our in charge Principal Mrs. Lekha Visaria for her continuous encouragement to our activities. I must especially record my sincere thanks to my family members and all my friends for their constant support.
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T.Y. BANKING AND INSURANCE (SEM-V)
Abstract
„Rural banking? describes the provision of banking and financial services that consequently pursue, as their main objective, a positive contribution to the potential of all human beings to develop, today and in the future.
In Rural Banking, the focus is on satisfying existing needs in the rural economy and the society whilst
simultaneously taking into account their social, cultural, ecological and economic sustainability. Furthering the common good by generating multiple returns with respects to these aspects is at its core. Generating a monetary profit is not an end but a frequent prerequisite to guaranteeing the necessary flexibility for pursuing its objective in a continuously changing environment.
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T.Y. BANKING AND INSURANCE (SEM-V)
INDEX SR.NO PARTICULER CHAPTER.1 INTRODUCTION
1.1 1.2 1.3. BACKGROUND OF TOPIC PLACING RESEARCH PROBLEM STATING NEEDS FOR SURVEYING RESEARCHERS PRECISE INTERESTS IN THE STUDY TITLE OF THE STUDY OBJECTIVES OF THE STUDY HYPOTSIS DEFINITION OF THE IMPORTANT TERNS 1.9 1.10 1.11 1.12 ASSUMPTION OF THE STUDY REVIEW OF LITERATURE METHODOLOGY
6
PAGE.NO 08
1.4. 1.5 1.6 1.7 1.8
T.Y. BANKING AND INSURANCE (SEM-V)
1.13
THE RESEARCH QUESTION
1.14
SIGNIFICANCE OF PRESENT STUDY SCOPE & LIMITATIONS OF THE PRESENT STUDY
1.15
CHAPTER.2 REVIEW OF LITERATURE CHAPTER.3 RESEARCH METHEDOLOGY
3.1 3.2 3.3 3.4 3.5 SAMPLING PLAN 3.6 3.7 3.8 VALIDATION OF TOOL DATA COLLECTION INSTRUMENTS RESEARCH METHOD SOURCES OF DATA RESEARCH AREA METHOD USE FOR DECIDING PLAN
39 46
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3.9 3.10
RATING SACLE RESEARCH PERIOD DATA PROCESSING & ANALYSIS
CHAPTER.4 DATA ANALYASIS & INTERPRITENTION CHAPTER 5 FINDING, SUMMERY& CONCLUSION CHAPTER 6 SUGGESTION &B RECOMMENDATION BIBLIOGRAPHY ANNEXURE
51
70
76
80 81
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Chapter-1 INTRODUCTION
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1.1) Background Of The Study
Indian economy is basically agrarian. Nearly 65% of the Indian population depends upon agriculture for a livelihood. As one of the measures to develop the economy and to provide support for nation building rural banking services are provided by banks. Since
independence, the efforts of the Government have revolved around expanding financial institution to rural and unbanked areas, so as to increase access to formal credit in rural underdeveloped regions. Banks were supposed to concentrate on rendering service to underprivileged people, living below poverty line, and cover more and more unbanked areas rather than just concentrating on commercial and corporate banking and not just their own profitability. The sectors now well known as priority sector such as Agriculture, Small-Scale Industries and exports remained the last priority of the Banking Sector.
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T.Y. BANKING AND INSURANCE (SEM-V)
The All India Rural Credit Review Committee (1969) observed that Commercial banks have generally been more successful than co-operative institutionsinmobilizing deposits in the semi-urban areas. This may be partly on account ofsuperior customer services and partly because of a more sustained drive for deposits. In short rural banking provides the basic financial support required by the economically weaker sections of the society and thereby enables them to participate and benefit from the development programme. Once this is achieved, rural banking plays pivotal role for poverty alleviation through the network of Commercial banks, Regional banks (RRBs), Microfinance Institutions, Primary Agriculture Credit Societies and Self Help Groups (SHGs). Rural banking provides banking services like credit, deposits (recurring, fixed, savings and current), sale of third party products (insurance, mutual funds, goldcoins), remittances, and bill payment Majority of poor rural and semi urban population in India are unable to avail the basic banking facilities. As a result they are made to rely on private money lenders, charging exorbitant interest rates and are trapped in vicious circle
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T.Y. BANKING AND INSURANCE (SEM-V)
of debt. The banks also rarely evaluate customer expectation. DIFFERENT SCHEMES PROVIDED UNDER RURAL BANKING LAGHU UDHAMI CREDIT CARD SCHEMEThe objective is to provide credit facility to small business retail traders, professionals, self-employed person and small industrial unites.
? Existing customers with a satisfactory record with working capital limits up to Rs.10 lakhs for the last three years are eligible for card.
? The credit card limits are fixed at 20% of the annual turnover declared for tax purposes in the case of artisans, businessmen, traders, and small entrepreneurs, while for the self employed.
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? In case of professionals, it is 50% of the gross annual income . ? Maximum per party credit limit is Rs.10 lakhs.
? The credit limit will be valid for three years and the bank will conduct internal reviews annually and enhancement of the limit will happen based on the operations.
? SWAROJGAR CREDIT SCHEME? ObjectiveTo provide adequate/timely credit, i.e, working capital or block capital or both to small artisans, handloom weavers, service sector, fishermen, self employed person, rickshaw owners, other micro entrepreneurs etc. In a flexible, hassle free and cost effective manner.
? Nature of financial accommodation13
T.Y. BANKING AND INSURANCE (SEM-V)
Composite loan including term loan (repayable 5 years) / revolving cash credit. ? CeilingRs.25,000 based on initial investment in fixed assets and/or working capital requirements/recurring
expenditure. (banks have discretion to enhance this limit beyond Rs.25,000) ? Validity and issueValidity for five years and could be renewed on a yearly basis. ? Renewal of working capital limits*Annual renewal based on the amount credited to the cash credit account/repayment performance in term loan account. *The revolving cash credit for working capital repaid within 12 months may be renewed
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*No withdrawal should be permitted if revolving cash credit remains outstanding for more than twelve months. ? InsuranceBeneficiaries would automatically be covered under the group insurance scheme and the premium would be shared by the bank and the borrower equally.
? Security/Margin/Interests/Prudential NormsSecurity, margin, rate of interest and prudential norms would be applicable as per the Reserve Bank?s norms. ? NATIONAL EQUITY FUNDSTo provide equity type support to small entrepreneurs for their projects, a fund entitled National Equity Fund is being administered by small industries Bank of India in participation with the Government. ? Eligible concerns*New as well as existing entrepreneurs in the tiny and SSI sector and service industry are eligible for assistance.
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T.Y. BANKING AND INSURANCE (SEM-V)
*Sanction of refinance in respect of term loan for the projects by SIDBI is a pre-requisite for equity type assistance under the scheme.
*The complete requirement of the project in the form of equity assistance, the term loan and working capital will be provided by one agency i.e the Nationalized Bank/SFCs. ? KVIC?S MARGIN MONEY SCHEMEGRAMODYOG ROJGAR SCHEMEScheme introduced during July 1997 with the objective of improving employment in rural areas and check migration to urban area now called Gramodyog Rojgar (REGP). Scheme is operated through public sector banks and RRBs.
?Purpose-
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T.Y. BANKING AND INSURANCE (SEM-V)
To start industrial activity in rural area in which fixed capital investment per head of an artisan or a worker does not exceed Rs.50,000 thus generating employment. ? Borrower?s contribution10% of project cost in case of SC/ST and other weaker section 5%.
? Bank finance90% of the project cost for General Category beneficiary and 95% of the project cost weaker section beneficiary. Project can also be financed by the Bank in the form of Composite Loan.
? REVISED KISSAN CREDIT SCHEMEKissan Credit Card (KCC) Scheme was introduced in banks in August 1998 on the lines of Model Scheme prepared by NABARD on RV Gupta committee
17
T.Y. BANKING AND INSURANCE (SEM-V)
recommendations. In order to cover term loans and agriculture. ? ObjectiveThe Scheme aims at providing adequate and timely credit for the comprehensive of farmers under single window, including the short-term credit needs and a reasonable component for consumption needs, through Kissan Credit Card. ? Participating BankAll Commercial Banks RRBs, State Co-operative Banks PACS/DCCBs and Scheduled Primary Co-operative Banks.
? Nature of financial accommodationTerm loan and revolving cash credit. ? Quantum of limitShort term credit limit for crops term loan and working capital limit for agriculture.
18
T.Y. BANKING AND INSURANCE (SEM-V)
? Validity period of KCCCoinciding with the introduction of term loan facility under KCC, the validity of KC card may be extended from 3 years as at present to 5 years.
INTENSIFICATION OF PRIORITY SECTIONSPriority sectors are identification by National Credit Council. The finance minister of Central Government is the chairman of this Council and the Governor of Reserve Bank of India is the Vice-chairman.
SEGMENTS OF PRIORITY SECTORThe following is a list of the segments forming the priority sector? AGRICULTURE? Short-term loan for raising crops i.e for crop loans-
19
T.Y. BANKING AND INSURANCE (SEM-V)
In addition, advances up to 10 lakh to farmers against pledge of agriculture produce (including warehouse
receipts) for a period not exceeding 12 months, where the farmers were given crop loans for raising the produce, provided the borrowers drawn credit from one bank. ? Medium and Long-term loans*Purchase of agriculture implements and machinery. *Construction of farm building and structures. *Land Development Schemes. *Production and processing of hybrid seeds for crops. ? Indirect Finance to Agriculture*Credit for financing the distribution of fertilizers,
pesticides, seeds etc. *Loans up to Rs.40 lakhs granted for financing distribution of inputs for the allied activities such as, cattle feed, poultry feed, etc. incurred by them for providing Low Tension connection from step-down point to individual farmers for energizing their wells.
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T.Y. BANKING AND INSURANCE (SEM-V)
*Loans to SEB are for systems Improvement Scheme under Special Project Agriculture (SISPA) *Loans to farmers through PACS, FSS and LAMPS. *Deposits held by the banks in RIDF maintained with NABARD. *Subscription to bonds issued by Rural Electrification Corporation (REC) exclusively for financing in rural and semi-urban areas and also for financing System
Improvement Program. *Subscription to bonds issued by NABARD for financing exclusively for agriculture/allied activities. ? SMALL SCALE INDUSTRYA working definition of small scale unit was first evolved in the year 1955 where after review was undertaken from time to time and presently the investment ceiling for SSI is Rs.100 lakhs from December 24, 1999. Units which had obtained permanent registration (i.e investment up to Rs.3 crore) prior to December 1999 notification would continue to be regarded as Small Scale Industries.
21
T.Y. BANKING AND INSURANCE (SEM-V)
Government increased the investment ceiling from Rs.1 crore to Rs.5 crore.
? TINY UNITSThe small scale units engaged in manufacturing
processing preservation of goods, mining, servicing and repairing of specified type of machinery and equipment, agro service units, where the investment in plant and machinery does not exceeds Rs.25 lakhs. ?SMALL SCALE INDUSTRIESAn undertaking which is engaged or is proposed to be in the manufacturing of production of parts, components, tooling or intermediates or the rendering of services and undertaking supplies or proposes to supply or renders not more than 50% of its production or services, as the case may be, to one or more other industrial undertaking and whose investment in fixed assets in plans and machinery, where held on ownership terms or on lease or on hire purchase, does not exceed Rs.100 lakh.
22
T.Y. BANKING AND INSURANCE (SEM-V)
?ARTISANS, VILLAGE AND COTTAGE INDUSTRYIt is defined as Artisans or small industrial activities in villages and small towns with a population not exceeding 50,000 involving utilization of locally available natural resources and/or human skills were individual credit requirements do not exceeds 50,000/-. It possesses negligible capital investment. There is hand-made
production and no wage earning person is employed in cottage industry. The industries in rural areas having population below 10,000 and having less than Rs.50,000 as fixed capital investment per worker are termed village industries and KVIC provide economic and technical assistance in establishment and operation of such industries.
? RETAIL TRADEAdvances granted to retail traders dealing in essential commodities and consumer co-operation stores and private retail traders with credit limits not exceeding Rs.10 lakhs.
23
T.Y. BANKING AND INSURANCE (SEM-V)
?SMALL
ROAD
AND
WATER
TRANSPORT
OPERATORS? Advances to small road and water transport operator sowing a fleet of vehicles not exceeding 10 vehicles, including the one proposed to be financed.
? Advances to NBFC?s for on-lending to truck operator and SRWTO?s other than truck operators satisfying the eligibility criteria. Also, portfolio purchases from NBFC?s made after 31.07.98 would also qualify for inclusion under priority sector lending, provided the portfolio purchases relate to SRWTO?s satisfying priority sector norms.
? PROFESSIONAL AND SELF- EMPLOYED PERSONS?Loans to professional and self-employed persons include loans for the purpose of purchasing repairing or renovating equipment including computer for professional
24
T.Y. BANKING AND INSURANCE (SEM-V)
use and/or business or tools and/or for working capital requirement to medical practicing company secretary, Lawyers, Engineers, Architects, Surveyors, or
Management
Consultants,
Accredited
freelancer
journalists, Cameramen, persons running health centre or to a person trained in any other art or craft who holds either a degree or diploma from many institutions established, Aided, or recognized by Government or to a person who is considered by the Bank as technically qualified or skilled in the field in which he is employed. The following will also be eligible for classified under this item-
*The term also includes firms and joint ventures of such professional and self-employed persons. This category will include all advances granted by the bank under special schemes, if any, introduced for the purpose.
*Only such professional and self-employed persons whose borrowings do not exceed Rs.10 lakhs which not more than Rs.2 lakhs should be for working capital
25
T.Y. BANKING AND INSURANCE (SEM-V)
requirements, are covered under this category. However, in the case of professionally qualified medical
practitioners, setting up of practice in semi-urban and rural areas, the borrowing limits should not exceed Rs.15 lakhs with a sub-selling of Rs.3 lakhs for working capital requirements. Advances granted for purchases of one motor vehicles to professional and self-employed persons other than qualified medical practitioners will not be included under the priority sector.
? EDUCATION LOAN SCHEME-
Courses eligible for studies?In India- All kinds of education in India.
?Abroad-
Graduation,
Post
graduation,
Courses
conducted by CIMA-London, CPA in USA etc.
26
T.Y. BANKING AND INSURANCE (SEM-V)
?Eligibility-Indian National having secured admission to professional/technical courses through Entrance
Test/selection process secured admission to foreign university/institution. There are no minimum marks criteria.
?Quantum of finance- Need based subjected to repaying capacity of parent/student.
?Studies abroad- Maximum Rs.15 lakhs.
?Collateral Security- No security may be insisted upon for loans up to Rs.7.50 lakhs. Parents would be co-obligates.
?Moratorium- Course period plus one year or six months after getting job whichever is earlier.
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T.Y. BANKING AND INSURANCE (SEM-V)
?Repayment-
5-7
year
after
commencement
of
repayment. The accrued interest during there payment holiday period to be added the principal and repayment in Equated Installment (EMI) fixed. Half percentage interest concession may be provided when repayment holiday is specified for interest/repayment under the scheme.
?STATE
SPONSERED
ORGANISATION
FOR
SCHEDULED CASTE/SCHEDULED TRIBESAdvanced sanctioned to such organizations for the specific purpose of purchases and supply of inputs to and/or the marketing of the outputs of the beneficiaries of these organizations.
? WEAKER SECTION PRIORITY SECTORThe concept of weaker sections under priority sector was introduced as per recommendations of Krishna Swami Committee (1980). It comprises-
28
T.Y. BANKING AND INSURANCE (SEM-V)
? Small and marginal farmers with land holding of 5 acres and less and landless laborers, tenant farmers and share croppers.
?Artisans, village and cottage industries where individual credit limits do not exceed Rs.50,000/-.
?Beneficiaries of Differential Rate Interest (DRI) scheme.
?Beneficiaries of SwarnaJayantiRojgarYojana (SJSRY).
?Beneficiaries
under
Scheme
for
Liberation
and
Rehabilitation of Scavengers (SLRS).
?Advances to Self Help Group including NGOs for onlending purposes.
29
T.Y. BANKING AND INSURANCE (SEM-V)
?Loans to distressed urban poor to prepay their debt to non-institutional lenders.
1.2) Placing The Research Problem:An important implication of the challenge which awaits banks generally and co-operative banks in particular is that they can win the confidence and patronage of the prospective depositor (rural), only if they can provide him with banking services attuned to his needs, preferences and convenience. Rural banks are engaged in providing finance to farmers to meet their agriculture requirement i.e. purchase of seed, machinery, equipment etc.Rural population is illiterate so either they do not have information on how to avail loans or they may not understand legal formalities to be complied to avail banking services. >Cultural and Psychological Barriers: Low income households believe that it is primarily rich households that save in bank accounts, whereas poor households are seen to be more likely to save informally at home or in livestock.
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T.Y. BANKING AND INSURANCE (SEM-V)
>High Minimum Deposits: Banks typically require high minimum balances to open accounts, which low-income households are unable to provide. >Lack of Proper Documentation: Poor households rarely have proof of identity, address, or employment. This problem is more acute for women and migrant workers.
1.3) Stating the Need for Survey:-
Regional Rural Banks (RRBs) are a type of governmentowned commercial bank that account for 19 percent of total deposits in rural areas.51 Over thepast couple of years, deposits in RRBshave been growing, but in different ways compared to othercommercial banks. For example, regular savings deposits inRRBs exceed term deposits, and a larger number of accounts that are opened focus on high liquidity. Rural banking plays an important role in rural
development. More people of rural area is engaged with the activities like farming, poultry, horticulture, cottage
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T.Y. BANKING AND INSURANCE (SEM-V)
industry, small scale industry related to the agriculture etc. banks provides the finance to those sectors for their development. so there is need to see the actual scenario of effectiveness of the rural banking in rural areas of the country. What is more important, in providing these services the banks have to display a degree of enterprise and spirit of innovation? The innovation may have to vary from area to area and can only come up from experience depending on the local circumstances and preferences.
1.4) Researcher Precise Interest In Study:Being student of T.Y.B&I it is necessary to take the banking project of Vth semester .For this researcher accessed people residing at devgad, sindhudurg district. The area is mond village of devgadtaluka, where researcher met the rural people having accounts in bank. It was interesting to know how many people residing in these rural areas had bank accounts and for what purpose. The researcher was also intrigued to find if these rural people were aware of various banking facilities
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T.Y. BANKING AND INSURANCE (SEM-V)
provided to them,
difficulties and also satisfaction of the
customers while availing the rural banking facilities. The researcher also wanted to find the various difficulties faced while availing rural banking facilities like complying with legal formalities, requirement of documentation, limited knowledge about the various credit schemes, and limitation on credit, interest amount and security issues.
1.5) Title of the Study: - To Study About Rural Banking In Kokan Region.
1.6) Objective of The Study:1) To know popular sources of awareness of rural banking among the customer. 2) To know the various scheme under rural banking. 3) Find out customer satisfaction towards legal formalities of rural banking.
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T.Y. BANKING AND INSURANCE (SEM-V)
4) To find out the overall satisfaction about the rural banking5) To know the sources from which customer get awareness about rural banking facilities.
1.7) Hypothesis: Majority rural people are aware about rural banking facility and they also avail the banking facility.
1.8) Definition Of The Important Terms:1)Bank:-An establishment authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers. 2) Rural banking: - Rural banking is also called as ethical banking. It is a bank concerned with rural and environment impact of its investment and loan. The „Rural Banking? policies being followed by the country resulted in widening the „geographical spread and functional reach? of commercial banks in rural areas in the period that followed the nationalization of Banks.Borrowers in priority
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T.Y. BANKING AND INSURANCE (SEM-V)
sector are given preferential treatment while lending. Interest rates are lower, security norms are relaxed. .
1.9) Assumption Made For Present Study:1) Customer quires are solved by bank immediately. 2) With the minimum balance and minimum legal formalities they get the rural banking facilities.
1.10) Review Of Literature:Government of India promoted rural banking through Regional Rural Banks (RRBs) through the RRBs Act of 1976 to bridge the gap in the flow of credit to the rural poor. The RRBs have a special place in the multi-agency approach adopted to provide agricultural and rural credit in India. These banks are state-sponsored, regionallybased and rural-oriented. Besides the RRBs, commercial and co-operative banks have been catering to the credit requirements of the rural sector.
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T.Y. BANKING AND INSURANCE (SEM-V)
The
renewed
emphasis
on
agricultural
and
rural
development by the Government of India would lead to a growing demand for different types of financial services in the rural areas. The present structure of rural credit may not be able to cater to the same. RRBs would be called upon to play a greater role in providing such services due to their rural character and feel. RRBs have to take over a larger share of credit disbursements calling for much larger resource mobilization, as also greater efforts for their institutional strengthening.
1.11) Methodology:The researcher approaches to 50 respondents in Devgad Taluka. Out of 50respondent 35 respond to questionnaire. The final study of project was done through based on these 35 respondents. The analysis of data was done with help of mean (%) and excel sheet.
1.12) Research Question:Which facility provided under rural banking facility.
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T.Y. BANKING AND INSURANCE (SEM-V)
1.13) Significance Of The Study:1) The importance of the rural banking in the economic development of a country cannot be overlooked. 2) Without the upliftment of the rural economy as well as the rural people of our country, the objectives of economic planning cannot be achieved. 3) The real growth of Indian economy lied in the emancipation of rural masses from acute poverty, unemployment, and socio-economic backwardness. 4) Bank and other financial institutions are of vital importance for development of rural economy of a country.
1.14) Scope and Limitation Of The Present Study:ScopeThe present study has been taken to find out various rural banking facilities and analyze the customer awareness and satisfaction from the above scheme. The study will also identify effectiveness of rural banking.
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T.Y. BANKING AND INSURANCE (SEM-V)
Limitation1) A study was conduct by researcher in Sindhudurg district in Devgad Taluka only. 2) The data was collected from only thirty-five customer applied for rural banking services and from one bank offering social banking services. 3) The study was limited to only respondents in this district .To analysis the number of visits made by them to bank for which they are applied loan for, satisfaction towards legal formalities by rural banking services.
38
T.Y. BANKING AND INSURANCE (SEM-V)
Chapter- 2 Review Of Literature
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T.Y. BANKING AND INSURANCE (SEM-V)
(1) Do Rural Banks Matter? Evidence from the Indian Rural Banking Experiment
http://ideas.repec.org/p/bri/cmpowp/04-104.html Background Lack of access to finance is often cited as a key reason for why poor people remain poor.Between 1977 and 1990, the Indian central bank mandated that a
commercial bank can open a branch in a location with one or more bank branches only if it opens four locations with no bank branches. Findings – 1) We show that, between 1977 and 1990, this rule caused banks to open relatively more rural branches in Indian states with lower initial financial development. 2) The reverse was true outside this period. We exploit this fact to identify the impact of opening a rural bank on poverty and output. Our estimates suggest that the Indian rural branch expansion program significantly lowered rural poverty, and increased non-agricultural output.
40
T.Y. BANKING AND INSURANCE (SEM-V)
(2) Financial Inclusion –Role of Banking Industry
http://ideas.repec.org/a/ucp/ecdecc/doi10.1086657122.html Background Banks that have global ambitions must meet local aspirations. Financial access will also attract global market players to our country that will result in increasing employment and business opportunities. Findings 1) If we look at the progress that has been achieved, banks are able to scale up and sustain their efforts, India is quite hopeful that the targets set by the banks and objectives of achieving universal financial inclusion are attainable.
41
T.Y. BANKING AND INSURANCE (SEM-V)
(3) The Distributive Consequences of Rural Banking: A Micro empirical Analysis of the Indian Experience
JMINTERNATIONAL JOURNAL OF HR REVIEW BackgroundThe governments of many developing economies have actively promoted the expansion of banks in rural areas, believing that such investments are necessary to reduce poverty and existing levels of wealth inequality. There is little evidence on whether such “rural banking” programs succeed in their objectives. This article uses the government of India's credit policies of the 1980s to test the effect of the two main components of the socialbanking program on households, the spread of rural banks and required lending for agriculture.
Findings1) I find that rural banking had a larger effect on no poor households relative to poor, defined in terms of wealth and land ownership. Of the two components of the program, it is bank access that matters.
42
T.Y. BANKING AND INSURANCE (SEM-V)
(4) A STUDY RURAL BANKING IN INDIA: PRIORITY SECTOR LENDING AND ITS DEVELOPMENTS
P.Raman Research Scholar, Bharathiar University, Coimbatore. BackgroundThe banking system touches the lives of millions and has to be inspired by larger social purpose and has sub verse national priorities and objectives such as rapid growth of agriculture, small industries and exports, rising of literacy rate, encouraging new entrepreneurs and development of backward areas. [email protected]
Findings1) Branch expansion and priority sector lending scheme became the main part of rural banking. 2) During the post nationalization period, spanning more than 3 decades, the Bank has grown in size and stature with more than 80,547 branches (31,667 branches in rural and 18,969 branches in semi-urban) spread across the length and breadth of the country.
.
43
T.Y. BANKING AND INSURANCE (SEM-V)
(5) Rural banking for operational flexibility and Effectiveness.
http://ideas.repec.org/p/bri/cmpowp/04-104.html BackgroundGovernment of India initiated the revolutionary concept of rural banking for operational flexibility and effectiveness. Priority sector lending is another notable initiative of the government of India to strengthen the rural banking concept. Branch banking into unbanked areas and priority sector lending to target sectors have succeeded in the reduction of poverty in India and bringing about a uniform sect oral development particularly in rural areas to some extent.
Findings1) The extension of banks to rural areas has led to increases were driven by agricultural and nonagricultural output.
44
T.Y. BANKING AND INSURANCE (SEM-V)
2) When the banks were given freedom in case of placing branches they seem to bypass the needy and poor society.
(6)The Future of Rural Banking
http://www.kpmg.com/global/en/issuesandinsights/articles publications/social-banker/pages/future-of-socialbanking.aspx
Background "One thing is certain: rural networking will be a game changer for banks."
45
T.Y. BANKING AND INSURANCE (SEM-V)
Chapter – 3 RESEARCH METHODOLOGY
46
T.Y. BANKING AND INSURANCE (SEM-V)
3.1) Research Method:Researcher decides to survey in Devgad Taluka at Sindhudurg District. The researcher used survey method for present study.
3.2) Sources of Data:-
47
T.Y. BANKING AND INSURANCE (SEM-V)
a) Primary data:The researcher collected the primary data personally through face to face interaction and also with observation method. a) Secondary data:The secondary data was collected through various ways which Journals Newspaper Internet Books
3.3) Research Area:The researcher has made research in devgad taluka at kokan region.
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T.Y. BANKING AND INSURANCE (SEM-V)
3.4) Method Use for Deciding the Sampling Plan:The sample constituted of 35 respondents. The sample size was 35.the element of sample was customer selected through random method. The entire respondent whom researcher approaches was availing rural banking facility.
3.5) Sampling Plan:The approach was made to the respondent two times.at first visits out of 35 respondents 19 responded very perfectly and then remaining 16 respondents responded on second visit.
3.6) Validation of Tool:49
T.Y. BANKING AND INSURANCE (SEM-V)
The tool was send to bank official, professor to verify their validity & correction where made after receiving their suggestion the tool was then finalize.
3.7) Data Collection Instruments:The types of instruments used for data collection were through surveying, internet, approaching to banks and customer to know about rural banking services for rural people.
3.8) Rating Scale:Liker scale used for quantative analysis.
3.9) Research Period:The researcher has made research during the month of July to December 2013.
3.10) Data Processing &Analysis of Plan:The data processing & analysis with the help of mean percentage method using excel sheet.
50
T.Y. BANKING AND INSURANCE (SEM-V)
Chapter - 4 Data Analysis and Interpretation
51
T.Y. BANKING AND INSURANCE (SEM-V)
1) Are you aware about rural banking facility? TABLE PARTICULAR YES NO. 1 RESPONSE RECEIVED 45 2 TOTAL RESPONDENT 50
NO 05 50
100 90 80 70 60 50 40 30 20 10 0
90%
10%
YES
NO
Interpretation: 1) Out of total respondent 90% are aware about rural banking facility. 2) Only 10% respondent is unaware about rural banking facility.
52
T.Y. BANKING AND INSURANCE (SEM-V)
2) Where did you come to know about rural banking facility? TABLE PARTICULAR PERSONAL COMMERICAL PUBLIC NO 1 RESPONSE 07 08 35 RECEIVED 2 TOTAL 50 50 50 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 PERSONAL COMMERICAL PUBLIC 14% 16% 70%
Interpretation: 1) Out of total respondents 70% are knowing about rural banking facility through public source i.e. TV, Radio etc. 2) 10-20% respondents are knows through commercial and personal sources.
53
T.Y. BANKING AND INSURANCE (SEM-V)
3) Have you applied for any loan or borrowing? TABLE NO PARTICULAR YES 1 RESPONSE RECEIVED 35 2 TOTAL RESPONDENT 50
NO 15 50
100 90 80 70% 70 60 50 40 30% 30 20 10 0 YES NO
Interpretation:1) More than 50% respondents are applies for loan under rural banking facility. 2) Only 30% are not applies for loan.
54
T.Y. BANKING AND INSURANCE (SEM-V)
4) How many times you approach for inquiry in banks? TABLE PARTICULAR 1 2 3 3& MORE NO VISIT VISITS VISITS VISITS 1 RESPONSE 15 11 06 03 RECEIVED 2 TOTAL 35 35 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 1 VISITS 2 VISITS 3 VISITS 3 + VISITS 17% 8% 43% 31%
Interpretation: 1) Maximum people are visited in bank only 1 time for inquiry. 2) 31% are visited by 2 times. 3) 05-20% people are visited for 3 and more times.
55
T.Y. BANKING AND INSURANCE (SEM-V)
5) Were your quires cleared by bank? TABLE NO PARTICULAR YES 1 RESPONSE 35 RECEIVED 2 TOTAL 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0% 0 YES NO 100%
NO 00 35
Interpretation: 1) 100% respondent responded that all quires are solved by banks.
56
T.Y. BANKING AND INSURANCE (SEM-V)
6) For which purpose you apply a loan? TABLE PARTICULAR AGRICULTURE SME’s EDUCATION OTHER NO 1 RESPONSE 20 05 10 00 RECEIVED 2 TOTAL 35 35 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0% 0 AGRICULTURE SME's EDUCATION OTHER 14% 29% 57%
Interpretation: 1) Maximum people are taking loan for agriculture purpose. 2) Up to 14% are taking for SMEs purpose. 3) More than 20% customers is applying for education loan.
57
T.Y. BANKING AND INSURANCE (SEM-V)
7) What minimum balance required to opening bank account? TABLE PARTICULAR 0 BALANCE UPTO UPTO NO RS-200 RS- 400 1 RESPONSE 22 06 07 RECEIVED 2 TOTAL 35 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 ZERO BALANCE UPTO RS 200 UPTO RS 400 17% 20% 63%
Interpretation: 1) In maximum banks minimum balance is 0 for opening account to avail rural banking facilities. 2) 15-20% banks charges from Rs-0 to Rs-400 for account opening.
58
T.Y. BANKING AND INSURANCE (SEM-V)
8) How are the legal formalities to avail the banking service? TABLE PARTICULAR GOOD SATISFACTORY NON NO SATISFACTORY 1 2 RESPONSE 13 RECEIVED TOTAL 35 RESPONDENT 18 35 04 35
100 90 80 70 60 50 40 30 20 10 0 GOOD SATISFACTORY NON SATISFACTORY 12% 37% 51%
Interpretation: 1) Maximum i.e.51%respondent said that legal formalities are satisfactory. 2) 37% respondents told that legal formality is good. 3) Only 12% customer dissatisfied with this formalities.
59
T.Y. BANKING AND INSURANCE (SEM-V)
9) Do you expect softer legal formalities? TABLE NO PARTICULAR YES 1 RESPONSE 29 RECEIVED 2 TOTAL 35 RESPONDENT
NO 06 35
90 80 70 60 50 40 30 20 10 0
83%
17%
YES
NO
Interpretation: 1) Out of total respondents only 17% are not expecting softer legal formalities. 2) Maximum respondents are expects softer legal formalities from the bank.
60
T.Y. BANKING AND INSURANCE (SEM-V)
10) How did bank provide you consultancy services? TABLE PARTICULAR PERSONAL COMMERICAL NO 1 RESPONSE 18 17 RECIVED 2 TOTAL 35 35 RESPONDENT
PUBLIC 00 35
100 90 80 70 60 50 40 30 20 10 0% 0 PERSONAL COMMERICAL PUBLIC 51%
49%
Interpretation: 1) 51% banks provide consultancy services through their personal sources i.e. employee, executive etc. 2) Only 49% banks provide through commercial sources.
61
T.Y. BANKING AND INSURANCE (SEM-V)
11) How much amount of loan or funds you applied? TABLE PARTICULAR UPTO RS-100000 RS-100000 NO TO 1000000 1 RESPONSE 15 08 RECEIVED 2 TOTAL 35 35 RESPONDENT
RS-1000000 & MORE 12 35
100 90 80 70 60 50 40 30 20 10 0 UPTO RS100000 RS-100000 TO RS-1000000& 1000000 MORE 23% 43% 34%
Interpretation: 1) Maximum people are taking loan up to Rs 100000 only. 2) 34% is taking loan more than Rs 1000000. 3) Up to 23% people are taking Rs 100000 to 1000000.
62
T.Y. BANKING AND INSURANCE (SEM-V)
12) Any problem you faced while taking the loan? TABLE NO PARTICULAR YES NO 1 RESPONSE 06 29 RECEIVED 2 TOTAL 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 YES NO 17% 83%
Interpretation: 1) Maximum respondents have not faced any problem while taking loan. 2) Only 17% respondents faced problem while taking loan.
63
T.Y. BANKING AND INSURANCE (SEM-V)
13) Is rate of interest charged by bank, is satisfactory? TABLE NO PARTICULAR YES 1 RESPONSE 20 RECEIVED 2 TOTAL 35 RESPONDENT
NO 15 35
100 90 80 70 60 50 40 30 20 10 0 YES NO 57% 43%
Interpretation: 1) Majority respondent are satisfied with interest rate charged by banks. 2) Below 50% respondents are not satisfied with interest rate charged by banks.
64
T.Y. BANKING AND INSURANCE (SEM-V)
14) How do you make repayment of borrowing? Loans? TABLE NO PARTICULAR BY CASH BY CHEQUE 1 RESPONSE 20 15 RECEIVED 2 TOTAL 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 BY CASH BY CHEQUE 57% 43%
Interpretation: 1) Maximum respondent respond makes repayment through cash mode only. 2) Out of total respondents only 43% make repayment by cheque.
65
T.Y. BANKING AND INSURANCE (SEM-V)
15) What is period for repayment amount? TABLE PARTICULAR MONTHLY QUARTERLY HALF YEARLY NO YEARLY 1 2 RESPONSE 02 RECEIVED TOTAL 35 RESPONDENT 04 35 16 35 13 35
100 90 80 70 60 50 40 30 20 10 0 MONTHLY QUERTARLY HALF- YEARLY YEARLY 6% 11% 46% 37%
Interpretation: 1) Generally the period for repayment is half yearly. 2) 37% repaid by yearly. 3) 5%-20% respondent repaid money monthly to quarterly.
66
T.Y. BANKING AND INSURANCE (SEM-V)
16) Have you failed to make repayment of loan? TABLE NO PARTICULAR YES 1 RESPONSE 01 RECEIVED 2 TOTAL 35 RESPONDENT
NO 34 35
100 90 80 70 60 50 40 30 20 10 0 YES 3%
97%
NO
Interpretation: 1) Maximum respondent have not failed to make repayment of loan. 2) Only 3% respondent are failed to make repayment of loan.
67
T.Y. BANKING AND INSURANCE (SEM-V)
17) Do you have any complaint against rural banking facilities? TABLE NO PARTICULAR YES NO 1 RESPONSE 03 32 RECEIVED 2 TOTAL 35 35 RESPONDENT
100 91% 90 80 70 60 50 40 30 20 10 0 YES NO 9%
Interpretation: 1) 91% respondent doesn’t have any complain regarding rural banking. 2) Only 9% having complained regarding rural banking.
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T.Y. BANKING AND INSURANCE (SEM-V)
18) Will you suggest to other for rural banking facilities? TABLE NO PARTICULAR YES NO 1 RESPONSE 25 10 RECEIVED 2 TOTAL 35 35 RESPONDENT
100 90 80 70 60 50 40 30 20 10 0 YES NO 29% 71%
Interpretation: 1) 71% respondents suggest to other for rural banking facility. 2) 29% respondents are not suggested for rural banking facility.
69
T.Y. BANKING AND INSURANCE (SEM-V)
Chapter 5 SUMMERY OF FINDINGS AND CONCLUSIUON
70
T.Y. BANKING AND INSURANCE (SEM-V)
Findings:1) It is found that awareness of rural banking
facility in rural area are more?
2) It is found that majority People i.e. are aware
about rural banking facility through public source i.e.TV, Radio.
3) It is found that majority people from rural area
are taking loan facility.
4) Major people approaches in banks only 1 time
for their inquiry.
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5) No people have a quires regarding rural
banking facility. Means banks solve all the quires of the customer.
6) Majority people apply for agriculture loan than
the other type of loan.
7) It is found that Banks provides the rural
banking facility with zero balance account to majority people i.e.63%.
8) Most of customer is feeling that legal formality
is satisfactory and not too much hard.
9) Although customer satisfied with the present
legal formality, but they want that it should be softer in future.
10) It is found that in rural areas banks provides
constancy through personal sources i.e. by face to face, through sales personal etc.
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11) Majority customer is low earning group, so
they may take loan of small amount that is up to Rs .100000.
12) It is found that there is no major problem faced
by people while taking credits under rural banking scheme.
13) It is found that more people are satisfied with
interest rate charged by the banks.
14) It is found that because of customer?s
unawareness about modern banking facility, they prefer to make repayment by cash mode only.
15) It is found that majority customer is repaying
the loan amount half yearly basis i.e. after completing the one crop season.
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16) It is found that major customer repays their
loan amount in specific time limit which given by the banks.
17) It is found that most customers are satisfied
with the rural banking services provided by banks.
18) It is found that awareness and Popularity of
rural banking facility in rural area is very large.
Summary:Nowadays rural people are interested to take rural credit because of easy availability and smooth functioning of their agricultural activity. The main objective of this study is to know the present scenery & nature of rural banking in kokan region.in this study researcher found that majority rural people have applied for rural credit. Mainly it has taken for agriculture purpose & amount taken as loan is mostly up to Rs-
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100000.and most of the customer are satisfied with the facility and interest rate provided by bank.
Conclusion:Rural banking provides the basic financial support required by the economically weaker sections of the society and thereby enables them to participate and benefit from the development programme. Once this is achieved, rural banking plays pivotal role for poverty alleviation through the network of Commercial banks, Regional banks (RRBs), Microfinance Institutions,
Primary Agriculture Credit Societies and Self Help Groups (SHGs). However, availability of credit alone cannot alleviate poverty. Several other reforms are too needed like land reform which would better enable absorption of microfinance. But in any case, banks and financial institutions do ensure flow of credit to the poor strengthen their economy.
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Chapter 6 SUGGESTION
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1) Government should encourage and support banks to take appropriate steps in rural development. 2) Efforts should be made to ensure that the non-interest cost of credit to small borrowers is kept as low as possible. 3) Policy should be made by government for opening more branches in weaker and remote areas of state. 4) Productivity can be improved by controlling the costs and increasing the income. 5) To participation cost, subsidy should be adjusted towards the end of the transaction for which loan assistance is sanctioned. 6) Government should take firm action against the defaulters and shouldn?t make popular announcements like waiving of loans.
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7) The rural banks have to make an important change in their decision making with regard to their investments. 8) The Rural banks have to be very careful and reduce the operating expenses, because it has been found from our study that these expenses have increased the total expenditure of the banks. 9) The Rural banks have to give due preference to the micro-credit scheme and encourage in the formation of self-help group. 10) Cooperative societies may be allowed to sponsor or co-sponsor with commercial banks in the establishment of the rural banks. 11) A uniform pattern of interest rate structure should be devised for the rural financial agencies. 12) The rural banks must strengthen effective credit administration by way of credit appraisal, monitoring the progress of loans and their efficient recovery. 13) The credit policy of the rural banks should be based on the group approach of financing rural activities.
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14) The rural banks may relax their procedure for lending and make them easier for village borrowers.
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BIBLIOGRAPHY
WWW.RBI.CO.IN WWW.SME.IN WWW.MANAGEMENT PARADIZE.COM
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ANNEXURE
Questionnaire for Customer
MAT.K.M.Patel senior College of Commerce & Science
Padmakar Colony, Near railway station, thakurli(East)
Research Topic : To study about rural Banking in kokan region. By – kedar Bhide. (T.Y.B.B.I )
Name Address
: -------------------------------------------------------------: ---------------------------------------------------------------------------------------------------------------------------
Phone No Qualification
: -------------------------------------------------------------: -------------------------------------------------------------Questioner for customer
1)
Are you aware about rural banking facilities?
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1. Yes 2)
2. No
Where did you come to know about rural banking facility? 1. Personal sources – face to face 2. Commercial sources – Pamphlet, advertisement 3. Public sources – TV, radio
3)
Are you applied for any loan or borrowing? 1. Yes 2. No
4) How many time you approach for inquiry in bank 1. 1 visit 2. 2 visits 3. 3 visits 4. More than 3 visits 5) Were your quires cleared by bank? 1. Yes 2. No For which purpose you applied a loan? 1. Agriculture 4. Other 7) What minimum balance required to open bank account? 1. Zero balance 2. Up to Rs 200 3. Up to Rs 400 2.SME’s 3.Education
6)
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8)
Which documents are submitted by you? ----------------------------------------------------------------------------------------------------------------------------------------------------------How are the legal formalities to avail banking services? 1. Good 2. Satisfactory 3. Non- Satisfactory Do you except softer legal formalities? 1. Yes 2. No
9)
10)
11)
How did bank provide you consultancy services? 1. Personal 3. other 2. Commercial
12)
How much amount of loan or funds you applied? 1. Rs.100000 2. Rs.100000 to 1000000
2. Rs.1000000and more 13) Any problem/ error faced by you while taking funds? 1. Yes 14) 2. No
Is rate of interest charged by bank , is satisfactory? 1. Yes 2. No
15)
How do you make repayment of borrowing? loans? 1. By Cash 2. By Cheque
16)
What is period of repayment amount?
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1. Monthly 3. Half-yearly 17)
2. Quarterly 4. Yearly
Have you failed to make repayment of loan? 1. Yes 2.No
18) How much amount bank charged as fine for laterepayment ? ------------------------------------------------------------------------------------------------------------------------------------------------------19) Do you have any complaint against rural banking facilities? 1. Yes 2. No
20) Will you suggest to other for rural banking facility or this service? 1. Yes 21) give? 2. No
Any suggestions to bank & customer you would like to
-----------------------------------------------------------------------------------------------------------------------------------------------------
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Questionnaire for Bank
MAT.K.M.Patel senior College of Commerce & Science
Padmakar Colony, Near railway station, thakurli(East)
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Research Topic : Social Banking with Reference to Bank of India By – kedar Bhide. (T.Y.B.B.I )
Questioners for bank
1)
Do your bank providing rural banking related facility? 1. Yes 2. No 2. For which sector bank is providing? 1. Agriculture sector 2. Small scale industry 2. Retail trade 4. Professional – self employed 5. Other Which is preferred by the customer? Why? 1. For Agriculture 2. For small scale industry 3. For self-employed 4. For other purpose --------------------------------------------------------------------
2)
3)
4)
How do you bring awareness among customer with respect to different facilities? 1. Personal face to face, workshop, seminar 2. Commercial – News paper, advertisement, pamphlet
5)
How many customer approach for enquiry with respect to social banking? 1. Yes 2. No
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6)
How many customer approximately do you provide rural banking service in your branch? 1. Up to 25 2. 25 to 50 3. 50 & more
7)
What is minimum balance need for open account to avail facility under priority sector? 1. Zero balance 2. Upto Rs.200 3. Upto Rs. 400
8)
What are the norms accessing facilities under social banking? 1. Documents 2. Minimum balance 3. Eligibility criteria 4. Other
9)
How are the legal formalities to avail banking service? 1. Convenient to customer 2. Easy & quick 3.Liberal 4. Strict Do you expect softer legal provisions for increasing opportunities in rural banking? 1. Yes 2. No 2. How do you provide consultancy service to customer in priority sector? 1.By personal service 2.By commercial service
10)
11)
12)
How big is your portfolio of credit with respect to priority sector lending?
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1.Upto 30%
2.Upto 50
3.More than 50%
13)
What is policy regarding or respect with SME’s (Small Scale enterprise) ---------------------------------------------------------------------------------------------------------------------------------------------
14) ------
Any special policy for Agriculture sector? --------------------------------------------------------------------------------------------------------------------------------------
15)
Do you have regulatory body to safeguard frauds? 1.Yes 2.No
16)
Do you follow any model of cost management technique to mitigate any losses? 1.Yes 2.No Which technique followed by bank? -------------------------------------------------------------------------------------------------------------------------------------------
17)
18)
It is really helpful to this people i.e farmer, small traders etc to implementing this Policy? 1.Yes 2.No
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19)
Do you need to keep innovative to match bank requirements? 1.Yes 2.No
20)
Will innovations in banking industry increase social banking opportunity agriculture Sector? 1.Yes 2.No Will social banking lead to sustainable development of banking industry? 1. Yes 2. No Have you achieved your objective of mass banking through social banking? 1.Yes 2.No
21)
22)
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