Prepared by:- Hardik H. Vekariya

Prof. Tejal shah

Project guide:-

Topic:- ‘ANALYSIS OF LOAN & FIXED DEPOSIT’

Enrollment no. :- 117110592084

INTRODUCTION TO PROJECT

Main reason behind joining RNSB as my summer training program location was to know the basic operation of bank. In future If we want to serve in banking sector, it is helpful to know operation. Basically I was interested in understanding the loan and fixed deposits with this main objective I also handled other basic operation which includes function of cash counter, cheque clearing, fixed deposit, locker facility etc.

History of RNSB

• Rajkot Nagarik Sahakari bank is a leading co-operative bank in Gujarat state,

India. Bank was established on 5th October 1953 with a small capital of RS

4890 and membership of 59 person under the leadership of late keshvalal

amrutlal parekh as a chairman, and late Janmashankar antani as M.D. bank has

made tremendous and real progress under the leadership of former chairman

late Shri Arvindbhai Maniar.

• During past year bank has played vital and leading role for the development of

industries, business & economy of Rajkot city, development and nursing of co-

operative movement in the Saurashtra region of Gujarat state. Bank was the

first co-operative institute to start functioning in the Saurashtra. Bank was

inaugurated (opening) by "SAHAKAR MAHARSHI" late Shri Vainkunthbhai

Metha.

MILE STONES17 Jan 2001 Bank was registered under multi-state co-operative society act. Area of operation was

extended outside the state of Gujarat.

12 mar 2001 Reserve bank of India gives license for opening branches at Mumbai.

05 oct 2001 Bank starts dp department, start offering depository services (demat share & security trading). As depository participant of central depository services India limited (cdsil).

Mar 2002 First ever branch outside the state of Gujarat was opened at Mumbai.

31 mar 2003 Net profit crosses Rs. 10 Crores, 25 % dividend was declared.

05 oct 2003 Bank celebrates golden jubilee year.

2005-2006 Bank treasury department awarded iso 9001-2000 certification by tuv a german organisation.

2005-2006 The dolls museum only the second of in kind in the country has taken shape at our yagnik road branch premises with the joint efforts of Rajkot Nagarik Sahakari bank ltd./arvindbhai maniar jankalyan trust and rotary midtown club

2006-2007 Bank has awarded for largest member base by gujarat urban co.op. Banks federation.

2006-2007 Bank has provide free coast bsnl mobile connections to our members.

2007-2008 Bank has started Real Time Gross Settlement (RTGS)service.

2007-2008 Bank awarded for a scheme "for total interest rebate to regular borrowers with limits below Rs. 25000

MARKET COVERAGE

• Rajkot Nagarik Sahakari bank has market coverage in all over India. It has

following branch detail which shows market coverage of the bank.

• Branch detail 

12 branch in Rajkot

07 branch in Rajkot district

09 branch in Gujarat state

01 branch in Maharashtra state i.e. in Mumbai

BACKGROUND OF THE TOPIC

• Research methodology gives students the necessary training in gathering

and arranging them, participation in the field work when required and

techniques for the collection of the data appropriate problem in the use of

statistics questionnaire and controlled experimentation and in recording

evidence, storing it out and interpreting it.

• The financial services industries become more complex, the financial

information provided becomes more difficult to understand. One must

possess the ability to understand and oversee risk.

LITERATURE REVIEW

• A loan commitment is an agreement by which a bank promises to lend to a

customer at prespecified terms while retaining the right to renege on its promise if

the borrower's creditworthiness deteriorates. The contract also specifies the

various fees that must be paid over the life of the commitment. Loan commitments

are widely used in the economy. As their use has spread, a rich literature has

evolved to explain why they exist, how they are priced, and how they affect the

risk of the bank and the deposit insurer. This article summarizes what we have

learned on these issues. Its main insight is that loan commitments are an optimal

tool for risk sharing and for resolving informational problems. The author also

points out some issues that the current literature leaves unexplained.

• (Ozgur Emre Ergungor Federal Reserve Bank of Cleveland in its journal

Economic Review)

RESEARCH PROBLEM

• In my project report the research problem arise s on the loan procedure of

the Rajkot Nagarik Sahakari Bank.

 

• OBJECT IVE OF THE RESEARCH

 

• The importance of any research work depends upon the objectives of that

research. Simply saying, researches need to have proper objectives,

otherwise, they may prove irrelevant after the lengthy exercise if there is

no proper objective.

 

• To understand the loan procedure of the bank

 

• To know the fixed deposit transaction of RNSB

DATA COLLECTOIN

• Primary Data: 

Primary data is collected from manager, officer and all the employees

of the Rajkot Nagarik Sahakari bank.

 

• Secondary data:

 

Secondary data is collected from the following sources:

 

Website of RNSB

From customers

Nagarik Samanvay – (monthly news paper)

Policy document

Document file of applicant

RESERCH ANALYSIS

Here in this research I have make research on the mortgage loan of the

RNSB for construction of building and purchase of new house.

• Rate of interest: 

Rate of interest of mortgage loan of construction of building is 15% and

purchase of new house is 14%. Both rates are decided on the basis of the security.

• Procedure: 

Procedure of mortgage loan of construction of building is 2 week and

purchase of new house is 5 to 6 days.

• Repayment period: 

Repayment period of mortgage loan for construction of building is 10 year

and purchase of new house is 12 year

Cont…

• Necessary document: 

All the document are same in both loan procedure but while in

purchase the new building the one more document require is

“SATAKHAT”

• Mortgage:

While taking a loan for construction for building that time applicant

have to put old house for mortgage and for purchase of new building that

time applicant have to put new property for mortgage.

 

• Expenses:

Expenses in term of processing charge are same as both procedures.

LOANS PROVIDED BY RNSB

• Loan against gold ornaments(Gold loan)

• Loan against Fix Deposits

• Loan against self surety

• Loan against stock in trade

• Loan against vehicle

• Loan against demat securities

• Loan against over draft

• Loan given for purchase of Domestic Appliances

• Loan land and building (Home loan)

PROCESS OF GRANTING LOAN

1) Fill QRR or PMR.

2) Document inward.

3) TCC accepted.

4) Shakh report

5) Place search.

6) Loan Reporting.

7) Loan sanction.

8) Prepared minute book.

9 ) Committee approval

10) Sanction letter (condition letter).

11) Document sign.

12) Loan a/c opening at Head office.

13) Loan a/c opening at branch office.

14) Passing voucher.

15) Record department-filling

FOLLOWING TABLE SHOW THE PROCCESSING CHARGE

Sr. No Amount Rs

1 100000 720

2 200000 830

3 300000 940

4 400000 1050

5 500000 1160

6 600000 4280

7 700000 4890

8 800000 5500

9 900000 6110

10 1000000 6720

HOW TO CALCULATE THE PROCESSING CHARGE

For example: loan amount between 100000 to 500000

112 * loan amount + legal fee + cearsai form + fees of 177 form

 

Here

Legal fee is 250

Cearsai form fee is 250

Fees of 177 form is 100

For example:

Loan amount is 300000

112*3+250+250+100

= 940

Note:

If loan amount is 450000 so we have to consider 500000 for calculation for processing

charge.

FOLLOWING TABLE SHOW THE RATE OF INTEREST AND MONTHLY INSTALLMENT

AGAINST PER LACS

Rate of int. Saral Dhiran10 years

Sthami Dhiran12 years

13.00 1493 1375

13.50 1523 1406

14.00 1553 1437

14.50 1583 1469

15.00 1613 1501

15.50 1644 1533

ANALYSIS

YEARYEAR 20052005 20062006 20072007 20082008 20092009 20102010 20112011 20122012

ADVANCEADVANCE 4289891 4309082 8048418 623788 7604200 9136904 11121760 14940677

Here amount of the advances are increase year to year mean growth rate increase in high rate. In year 2005 amount of advance was Rs. 4289891000. Which is increase to rs. 14940677000. It means growth rate are 248% increase in these eight year. It suggest bank are in super normal growth in advance or loan.

MAIN CHARACTERISTICS OF FIXED DEPOSITS:

• Fixed deposits have due dates.

• Longer the period higher the rate of interest on the deposit.

• Interest is compounded every quarter.

• Every transaction in respect of Fixed deposit is a separate contract.

• These deposits are neither negotiable nor transferable.

• Bank accepts Fixed deposit for a minimum period 15 days and maximum

period of 120 months.

FIXED DEPOSITS SCHEME AT RNSB:-

Comparative to other banks the Fixed Deposit scheme provided by RNSB is better. In Fixed

of the rates and also other facilities given on the fixed deposit are been not found in some of the

banking available.

Fixed deposits are been provided on the any amount of the customers.

Any customer who is in need of the money can have loan on fixed deposit they are not

required to break their FD.

The loan is been also given upto the 80 to 85% in some of the cases of customers.

The provided loan is charged at the 1% more than the rate of their FD.

For Example, if the FD of Rs.50000 is taken for the period of the 3 years @ of 10.25% rate

of interest. Now if the same party wants loan over the FD than in such case loan can be granted upto

Rs.40000 i.e. 80% and installments would be charged at 11.25% that is 1% more.

So this is been very beneficial scheme given by bank.

Even Overdraft facility is also given on the FD. One can easily raise the required amount of

OD on the FD available with them.

Fixed deposits not only provide the more rates of interest and saving but it also one of the

tools to avoid the tax too. One can easily avoid the tax by having the share of the bank. The share of the

bank can be obtained by having the FD of amount rs.49000 or more.

CURRENT RATES OF FIXED DEPOSITS

Time Period Rate

15 to 45 days 5.00%

46 to 90 days 6.00%

91 to 180 days 6.75%

181 to 364 days 7.75%

1 year or more till 2 years 8.75%

2 years or more till 3 years 10.25%

3 years or more till 5 years 9.25 %

5 years or more till 10 years 9.50 %

OPTIONS AVAILABLE:These are the options available to the officer for the quick procedure of the customers.

There are four different options or number given for the different options of investments

they are as follows

 

(1) Re-investment - 1 year or more.

(2) Short Fixed - 1 year or less.

(3) Monthly investment - investment for monthly interest.

(4) Quarterly - investing for quarterly interest.

 

These numbers are mentioned on the slip so that easily it can be identified that it is for

which period it is been invested.

The options which are available to the investors are that they can invest any amount they

want. And can also have any numbers of receipts for the same. So they can avoid the Tax i.e. If one

want to invest Rs.100000 then instead of investing in one receipt it can be invested in four parts of

Rs.25000 each.

Another option is that one can add any other name whenever required.

FINDINGS

• If deviation is in file that time loan procedure of the bank is too much long maximum 2 week

required for sanction of loan.

• Bank not sanction more amount then the other bank limit of the bank for sanction loan is are as

follow:

70% loan granted for construction of building

80% loan granted for purchase of building

 

• Rate of interest is very high normally 15% on purchase of new building and 14% on

construction on new building.

• Time period for the repayment of the loan is 10 years for the construction of building and 12

year for the purchase of new building.

• If any customer wants to take loan from the bank so they have the share of the bank if they have

no share of the bank so first they have to purchase the share and become the member of the

bank.

• Rate of interest on the fixed deposit is less

• Bank not has highly technology or software. If any customer deposit the amount in the bank that

time they not made entry of their transaction in the pass book.

SUGGESTION  

• The bank should make its loan process easy and fast basically when deviation are in fileThe bank should make its loan process easy and fast basically when deviation are in file

• The bank has to sanction 100% loan amount.The bank has to sanction 100% loan amount.

• Bank should try to provide cheaper rate of interest on the loan which is easily payable by Bank should try to provide cheaper rate of interest on the loan which is easily payable by

applicantapplicant

• Bank should decline the time period for the both loanBank should decline the time period for the both loan

• Share price of the bank is 15000 which is too much high so bank should reduce the price Share price of the bank is 15000 which is too much high so bank should reduce the price

of the share.of the share.

• Increase the rate of interest on fixed depositIncrease the rate of interest on fixed deposit

• RNSB must adopt the new and advance technology, by this adaptation bank should RNSB must adopt the new and advance technology, by this adaptation bank should

provide better facility to customer and the process will be time savings by this.provide better facility to customer and the process will be time savings by this.

• Bank should also provide newer facility like internet banking or phone banking. Bank Bank should also provide newer facility like internet banking or phone banking. Bank

will started phone banking but try to more and more customer use these facilities.will started phone banking but try to more and more customer use these facilities.

CONCLUSION

• The RNSB believes that best practices under corporate governance

facilitate effective control and management of bank and in turn deliver

optimum results to its stakeholders. The bank is committed to establish a

frame work of strategic control and decision making and constantly

reviewing its efficiency. If any person wants to take loan so they have to

go their respective area branch.