LOANS AND ADVANCES IN NAGRIK SAHAKARI BANK

BACHLEOR OF COMMERCE
BUSINESS MANAGEMENT STUDY
SEMESTER V
2016-17
SUBMITTED BY
PUJYA A. SOMVANSHI
SEAT NO.102
B.N.N COLLEGE

DECLARATION
PUJYA A.SOMVANSHI, Student of BMS Semester V (2016-17) Hereby, Declare that I have completed
the project on; "TYPES OF LAONS AND ADVANCES IN NAGRIK SAHAKARI BANK"
The Information Submitted is true & original to the best of my knowledge.

SIGNATURE
PUJYA A.SOMVANSHI
SEAT NO 102

INTRODUCTION TO LOANS

One of the primary functions of the commercial bank. Through lending commercial banks me
their objective of making profits. The deposits collected from the public cannot be kept idle. It has to
beutilized in order to derive benefits out of it. The bank collects deposits with the objective of lending and
makes profit out of the interest received and paid. Their main aim is to deal in money and provide for
those who need it. The banker performs the job of lending within the framework of statues governing the
banking business, the government policy and guidelines issued by the authorities of the country (RBI in
India).The basic objective of nationalization of commercial banks was to provide funds to the neglected
sectors like agriculture, tiny industries and other weaker sections of the society. Today nearly 40% of the
total commercial bank advances are the priority sectors. Greater part of the commercial bank funds are
employed in the form of loans and advances. Loans bring good money to the bank in the form of profit by
charging interest. Lending function of a commercial bank benefits the bank in the form of profit and the
one who takes loans enjoy the benefit of money required for their activities. The wheels of industry
cannot run without the bank advances. The bank needs to assess the condition of industry or trade or any
business enterprise while making advances

Definition of Loans
The amount lent by the lender to the borrower for a specific purpose like the construction of the
building, capital requirements, purchase of machinery and so on, for a particular period of time is known
as Loan. In general, loans are granted by the banks and financial institutions. It is an obligation which
needs to be repaid back after the expiry of the stipulated period. The loan carries an interest rate on the
debt advanced. Before advancing loans, the lending institution checks the credit report of the customer, to
know about his credibility, financial position and capacity to pay. Loan is classified in the following
categories:

On the basis of Security:

Secured Loan: The loan which is backed by securities is Secured Loan.

Unsecured Loan: The loan on which no asset is pledged as security is Unsecured Loan.

On the basis of Repayment:

Demand Loan: The loan which is repaid on demand of the lender is Demand Loan.

Time Loan: Loan, which is repaid in full at a future specified date is Time Loan.

Installment Loan: Loans which are to be repaid in evenly distributed monthly installments is
Installment Loan.

On the basis of Purpose:

Home Loan

Car Loan

Education Loan

Commercial Loan

Industrial Loan

Gold Loan

Mortgage Loan

Personal Load
Definition of Advances

Advances are the source of finance, which is provided by the banks to the companies to meet the
short-term financial requirement. It is a credit facility which should be repaid within one year as
per the terms, conditions and norms issued by Reserve Bank of India for lending and also by the
schemes of the concerned bank. They are granted against securities which are as under:

Primary Security: Hypothecation of Debtors, Stock Pro-notes, etc.

Collateral Security: Mortgage of land and buildings, machinery, etc.

Guarantees: Guarantees given by partners, directors or promoters, etc.

The following are the forms of bank advances:

Short term loans: Advance in which the entire amount is provided to the borrower at one time.

Overdraft: A facility provided by the bank in which the customer can overdraw money from his
account up to a specified limit.

Cash Credit: A facility granted by the bank in which the customer can advance money up to a
certain limit against the asset pledged.

Bills Purchased: An advance facility provided by the bank against the security of bills.

SHORT TERMS LOANS FINANCED BY COMMERCIAL BANKS

Commercial banks are the most important source of short-term capital. The major portion of working
capitalloans are provided by commercial banks. They provide a wide variety of loans tailored to meet the
specificrequirements of a concern. The different forms in which the banks normally provide loans and
advances areloans and advances are loans, cash credit, overdrafts, purchasing and discounting of bills.
LOANS:
When a bank makes an advance in lump-sum against some security it is called a loan. Here, a
specifiedamount is sanctioned by the bank to the customers. The loan amount so sanctioned is paid to the
borrower either in cash or by credit to his account. A certain amount of interest has to be paid by the
borrower for theloan that has to be borrowed. A loan can be repaid in lump-sum or in
installements.Commercial banksgenerally provide short term loans up to one year for meeting the
working capital requirements. But thesedays, term loans exceeding one year are also provided by banks.
The term loans may be either medium termor long term loans In finance, a loan is the lending of money
from one individual, organization or entity to another individual, organization or entity. A loan is a debt
provided by an entity (organization or individual) to another entity at an interest rate, and evidenced by a
promissory note which specifies, among other things, the principal amount of money borrowed, the
interest rate the lender is charging, and date of repayment. A loan entails the reallocation of the subject
asset(s) for a period of time, between the lender and the borrower.

In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the
lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time.

The loan is generally provided at a cost, referred to as interest on the debt, which provides an incentive
for the lender to engage in the loan. In a legal loan, each of these obligations and restrictions is enforced
by contract, which can also place the borrower under additional restrictions known as loan covenants.
Although this article focuses on monetary loans, in practice any material object might be lent.

Acting as a provider of loans is one of the principal tasks for financial institutions such as banks and
credit card companies. For other institutions, issuing of debt contracts such as bonds is a typical source of
funding

Types
Secured
See also: Loan guarantee
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral.

A mortgage loan is a very common type of loan, used by many individuals to purchase things. In this
arrangement, the money is used to purchase the property. The financial institution, however, is given
security a lien on the title to the house until the mortgage is paid off in full. If the borrower defaults on
the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to
it.

In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the
same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter
often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A
direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car
dealership acts as an intermediary between the bank or financial institution and the consumer.

Unsecured
Unsecured loans are monetary loans that are not secured against the borrower's assets. These may be
available from financial institutions under many different guises or marketing packages:

credit card debt

personal loans

bank overdrafts

credit facilities or lines of credit

corporate bonds (may be secured or unsecured)

peer-to-peer lending

The interest rates applicable to these different forms may vary depending on the lender and the borrower.
These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these
may come under the Consumer Credit Act 1974.

Interest rates on unsecured loans are nearly always higher than for secured loans, because an unsecured
lender's options for recourse against the borrower in the event of default are severely limited. An
unsecured lender must sue the borrower, obtain a money judgment for breach of contract, and then pursue
execution of the judgment against the borrower's unencumbered assets (that is, the ones not already
pledged to secured lenders). In insolvency proceedings, secured lenders traditionally have priority over
unsecured lenders when a court divides up the borrower's assets. Thus, a higher interest rate reflects the
additional risk that in the event of insolvency, the debt may be uncollectible.

Demand
Demand loans are short term loans[1] that are typically in that they do not have fixed dates for repayment
and carry a floating interest rate which varies according to the prime lending rate. They can be "called"
for repayment by the lending institution at any time. Demand loans may be unsecured or secured.

Subsidized
A subsidized loan is a loan on which the interest is reduced by an explicit or hidden subsidy. In the
context of college loans in the United States, it refers to a loan on which no interest is accrued while a
student remains enrolled in education.

Concessional
A concessional loan, sometimes called a "soft loan", is granted on terms substantially more generous than
market loans either through below-market interest rates, by grace periods or a combination of both.[3]
Such loans may be made by foreign governments to developing countries or may be offered to employees
of lending institutions as an employee benefit.

Personal Loans
These loans are offered by most banks, and the proceeds may be used for virtually any expense (from
buying a new stereo system to paying off a common bill). Typically, personal loans are unsecured, and
range anywhere from a few hundred to a few thousand dollars. As a general rule, lenders will typically
require some form of income verification, and/or proof of other assets worth at least as much as the
individual is borrowing. The application for this type of loan is typically only one or two pages in length.
Approvals (or denials) are generally granted within a few days. The downside is that the interest rates

these loans can be quite high. According to the Federal Reserve, they range from about 10-12%. The other
negative is that these loans sometimes must be repaid within two years, making it impractical for
individuals looking to finance large projects.In short, personal loans (in spite of their high interest rates)
are probably the best way to go for individuals looking to borrow relatively small amounts of money, and
who are able to repay the loan within a couple of years.

Credit Cards
When consumers use credit cards, they are essentially taking out a loan with the understanding that it will
be repaid at some later date. Credit cards are a particularly attractive source of funds for individuals (and
companies) because they are accepted by many - if not most - merchants as a form of payment. In
addition, to obtain a card (and, by extension, $5,000 or $10,000 worth of credit), all that's required is a
one-page application. The credit review process is also rather quick. Written applications are typically
approved (or denied) within a week or two. Online / telephone applications are often reviewed within
minutes. Also in terms of their use, credit cards are extremely flexible. The money can be used for
virtually anything these days from paying college tuition to buying a drink at the local watering hole. (To
find out more about this process, see The Importance of Your Credit Rating and How Credit Cards Affect
Your Credit Rating.)There are definitely pitfalls, however. The interest rates that most credit-card
companies charge range as high as 20% per year. In addition, a consumer is more likely to rack up debt
using a credit card (as opposed to other loans) because they are widely accepted as currency and because
it's psychologically easier to hand someone a credit card than to fork over the same amount of cash. (To
read more on this type of loan, see Take Control Of Your Credit Cards, Credit, Debit And Charge: Sizing
Up The Cards In Your Wallet and Understanding Credit Card Interest.)

Home-Equity Loans
Homeowners may borrow against the equity they've built up in their house using a home-equity loan. In
other words, the homeowner is taking a loan out against the value of his or her home. A good method of
determining the amount of home equity available for a loan would be to take the difference between the
home's market value and the amount still owing on the mortgage. The loan proceeds may be used for any
number of reasons, but are typically used to build home additions, or for debt consolidation. The interest
rates on home-equity loans are very reasonable as well. In addition, the terms of these loans typically
range from 15 to 20 years, making them particularly attractive for those looking to borrow large amounts
of money. But, perhaps the most attractive feature of the home-equity loan is that the interest is usually
tax deductible. The downside to these loans is that consumers can easily get in over their heads by
mortgaging their homes to the hilt. Furthermore, home-equity loans are particularly dangerous in
situations where only one family member is the breadwinner, and the family's ability to repay the loan
might be hindered by that person's death or disability. Even a 1% increase in interest rates could mean the
difference between losing and keeping your home if you rely too heavily on this style of loan. Note: In
situations like these, life/disability insurance is frequently used to help protect against the possibility of
default. (To keep reading on this subject, see Home-Equity Loans: The Costs and The Home-Equity Loan:
What It Is And How It Works.)

Home-Equity Line of Credit

This line of credit acts as a loan and is similar to home-equity loans in that the consumer is borrowing
against his or her home's equity. However, unlike traditional home-equity loans, these lines of credit are
revolving, meaning that the consumer may borrow a lump sum, repay a portion of the loan, and then
borrow again. It's kind of like a credit card that has a credit limit based on your home's equity! These
loans may be tax deductible and are typically repayable over a period of 10 to 20 years, making them
attractive for larger projects. Because specific amounts may be borrowed at different points in time, the
interest rate charged is typically pegged to some underlying index such as the "prime rate". This is both
good and bad in the sense that at some times, the interest rates being charged may be quite low. However,
during period of rising rates, the interest charges on outstanding balances can be quite high. There are
other downsides as well. Because the amount that can be borrowed can be quite large (typically up to
$500,000 depending upon a home's equity), consumers tend to get in over their heads. These consumers
are often lured in by low interest rates, but when rates begin to rise, those interest charges begin racking
up and the attractiveness of these loans starts to wane.

Cash Advances
Cash advances are typically offered by credit-card companies as short-term loans. Other entities, such as
tax-preparation organizations, may offer advances against an expected IRS tax refund or against future
income earned by the consumer.While cash advances may be easy to obtain, there are many downsides to
this type of loan. For They are not typically tax deductible. Loan amounts are typically in the hundreds of
dollars, making them impractical for many purchases, particularly large ones.The effective interest rate
charges and related fees can be very high. In short, cash advances are a fast alternative for obtaining
money (funds are typically available on the spot), but because of the numerous pitfalls, they should be
considered only as a last resort. (Learn more about cash advances in Payday Loans Don't Pay.)

Small Business Loans

The Small Business Administration (SBA) or your local bank typically extend small business loans to
would-be entrepreneurs, but only after they've submitted (and received approval for) a formal business
plan. The SBA and other financial institutions typically require that the individual personally guarantee
the loan, which means that they will probably have to put up personal assets as collateral in case the
business fails. Loan amounts can range from a few thousand to a few million dollars, depending on the
venture. While the term of the loan may vary from institution to institution, typically, consumers will have
between five and 25 years to repay the loans. The amount of interest incurred from the loan depends on
the lending institution in which the loan is made. Keep in mind that borrowers can negotiate with the

lending institution with regard to the level of interest charged. However, there are some loans on the
market that offer a variable rate.Small business loans are the way to go for anyone looking to fund a new
or existing business. However, be forewarned: getting a business plan approved by the lending institution
may be difficult. In addition, many banks are unwilling to finance "cash businesses" because their books
(ie. tax records) often do not accurately reflect the health of the underlying business.

The Bottom Line

While there are many sources that individuals and businesses may tap for funds, all consumers should
assess both the positive and negative aspects of any loan before signing on the dotted line.

Personal Loans
These loans are offered by most banks, and the proceeds may be used for virtually any expense (from
buying a new stereo system to paying off a common bill). Typically, personal loans are unsecured, and
range anywhere from a few hundred to a few thousand dollars. As a general rule, lenders will typically
require some form of income verification, and/or proof of other assets worth at least as much as the
individual is borrowing. The application for this type of loan is typically only one or two pages in length.
Approvals (or denials) are generally granted within a few days.The downside is that the interest rates on
these loans can be quite high. According to the Federal Reserve, they range from about 10-12%. The other
negative is that these loans sometimes must be repaid within two years, making it impractical for
individuals looking to finance large projects.In short, personal loans (in spite of their high interest rates)
are probably the best way to go for individuals looking to borrow relatively small amounts of money, and
who are able to repay the loan within a couple of years.

Credit Cards
When consumers use credit cards, they are essentially taking out a loan with the understanding that it will
be repaid at some later date. Credit cards are a particularly attractive source of funds for individuals (and
companies) because they are accepted by many - if not most - merchants as a form of payment. In
addition, to obtain a card (and, by extension, $5,000 or $10,000 worth of credit), all that's required is a
one-page application. The credit review process is also rather quick. Written applications are typically
approved (or denied) within a week or two. Online / telephone applications are often reviewed within
minutes. Also in terms of their use, credit cards are extremely flexible. The money can be used for
virtually anything these days from paying college tuition to buying a drink at the local watering hole. (To
find out more about this process, see The Importance of Your Credit Rating and How Credit Cards Affect
Your Credit Rating.) There are definitely pitfalls, however. The interest rates that most credit-card
companies charge range as high as 20% per year. In addition, a consumer is more likely to rack up debt
using a credit card (as opposed to other loans) because they are widely accepted as currency and because
it's psychologically easier to hand someone a credit card than to fork over the same amount of cash. (To
read more on this type of loan, see Take Control Of Your Credit Cards, Credit, Debit And Charge: Sizing

Up The Cards In Your Wallet and Understanding Credit Card Interest.)

Home-Equity Loans
Homeowners may borrow against the equity they've built up in their house using a home-equity loan. In
other words, the homeowner is taking a loan out against the value of his or her home. A good method of
determining the amount of home equity available for a loan would be to take the difference between the
home's market value and the amount still owing on the mortgage. The loan proceeds may be used for any
number of reasons, but are typically used to build home additions, or for debt consolidation. The interest
rates on home-equity loans are very reasonable as well. In addition, the terms of these loans typically
range from 15 to 20 years, making them particularly attractive for those looking to borrow large amounts
of money. But, perhaps the most attractive feature of the home-equity loan is that the interest is usually
tax deductible. The downside to these loans is that consumers can easily get in over their heads by
mortgaging their homes to the hilt. Furthermore, home-equity loans are particularly dangerous in
situations where only one family member is the breadwinner, and the family's ability to repay the loan
might be hindered by that person's death or disability. Even a 1% increase in interest rates could mean the
difference between losing and keeping your home if you rely too heavily on this style of loan.

Note: In situations like these, life/disability insurance is frequently used to help protect against the
possibility of default. (To keep reading on this subject, see Home-Equity Loans: The Costs and The
Home-Equity Loan: What It Is And How It Works.)

Home-Equity Line of Credit

This line of credit acts as a loan and is similar to home-equity loans in that the consumer is borrowing
against his or her home's equity. However, unlike traditional home-equity loans, these lines of credit are
revolving, meaning that the consumer may borrow a lump sum, repay a portion of the loan, and then
borrow again. It's kind of like a credit card that has a credit limit based on your home's equity! These
loans may be tax deductible and are typically repayable over a period of 10 to 20 years, making them
attractive for larger projects. Because specific amounts may be borrowed at different points in time, the
interest rate charged is typically pegged to some underlying index such as the "prime rate". This is both
good and bad in the sense that at some times, the interest rates being charged may be quite low. However,
during period of rising rates, the interest charges on outstanding balances can be quite high.There are
other downsides as well. Because the amount that can be borrowed can be quite large (typically up to
$500,000 depending upon a home's equity), consumers tend to get in over their heads. These consumers
are often lured in by low interest rates, but when rates begin to rise, those interest charges begin racking
up and the attractiveness of these loans starts to wane.

5. Cash Advances
Cash advances are typically offered by credit-card companies as short-term loans. Other entities, such as
tax-preparation organizations, may offer advances against an expected IRS tax refund or against future
income earned by the consumer.

While cash advances may be easy to obtain, there are many downsides to this type of loan. For example:

They are not typically tax deductible.

Loan amounts are typically in the hundreds of dollars, making them impractical for many purchases,
particularly large ones.
The effective interest rate charges and related fees can be very high.
In short, cash advances are a fast alternative for obtaining money (funds are typically available on the
spot), but because of the numerous pitfalls, they should be considered only as a last resort. (Learn more
about cash advances in Payday Loans Don't Pay.)

Small business loans

Small Business Administration (SBA) or your local bank typically extend small business loans to wouldbe entrepreneurs, but only after they've submitted (and received approval for) a formal business plan. The
SBA and other financial institutions typically require that the individual personally guarantee the loan,
which means that they will probably have to put up personal assets as collateral in case the business fails.
Loan amounts can range from a few thousand to a few million dollars, depending on the venture. While
the term of the loan may vary from institution to institution, typically, consumers will have between five
and 25 years to repay the loans. The amount of interest incurred from the loan depends on the lending
institution in which the loan is made. Keep in mind that borrowers can negotiate with the lending
institution with regard to the level of interest charged. However, there are some loans on the market that
offer a variable rate. Small business loans are the way to go for anyone looking to fund a new or existing
business. However, be forewarned: getting a business plan approved by the lending institution may be
difficult. In addition, many banks are unwilling to finance "cash businesses" because their books (ie. tax
records) often do not accurately reflect the health of the underlying business.

The Bottom Line

While there are many sources that individuals and businesses may tap for funds, all consumers should
assess both the positive and negative aspects of any loan before signing on the dotted line.

SMALL BUSINESS LOAN

Theoretically, a small business loan is an amount of money borrowed by a small business person to start
or run a small business. Realistically, a small business loan is a euphemism used by lending institutions to
describe personal loans given to small business people.Consider that you may have an excellent credit
rating and a solid business plan and still not be able to get a small business loan because you have no
collateral. Even established business people can find themselves in this position, if they do not own
enough tangible assets, such as houses or other property.In other words, the small business loan is not
being granted on the status of your business; it's being granted on your personal financial status. That's
why it's important that your personal financial house is in order before you apply for a small business
loan.You will also find that many lenders just don't provide seed money. While they're perfectly willing to
give a small business loan to help a business grow, they don't want to take the risk of lending to a start up.
All that being said, you can get a small business loan if you know where to look and are prepared.

LOW/NO INTEREST LOAN

While a grant is obviously an ideal source of government funding, you have an even greater chance of
accessing government programs which provide financing for small businesses through loans. So if you've
made the rounds of the banks and been shown the door, don't give up yet.In fact, government loans are
often better than bank loans. They may be interest-free, or may offer highly competitive rates. (In some
cases, your loan may even be considered "non-repayable", which is another way the government says
"grant".) Government loans carry additional advantages. They're more likely to be unsecured; that is, you
don't need to put up collateral against the loan.You'll find loans under a variety of programs, directed at
different industries, different geographical regions, and even loans directed specifically at women and
young entrepreneurs. For example, the federal Canadian Youth Business Foundation (CYBF) offers startup loans of up to $15,000, amortized over three to five years, to young people starting a business. Young,
in CYBF parlance, means anywhere from 18 to 34 years old. You'll need to complete a viable business
plan as part of the program, but that should be top of your to-do list anyway. The program often matches

you with an experienced business person who can mentor you during (and after) the start-up phase.

GOVERNMENT GUARANTEED LOAN

One of the reasons banks shy away from financing small businesses is the high risk factor. Many small
businesses fail, and when that happens, the bank is stuck with a bad loan. But if someone is willing to
guarantee the loan, or a substantial part of it, financial institutions are a lot more willing to pony up. It's
like having Dad co-sign for that car loan.Government insurance (available for low premiums or even no
premiums) provides this option to small businesses. For example, the Canadian Small Business Finance
Program (CSBFP) can help you get a loan of up to $500,000 to buy or improve real property or
equipment, or to make leasehold improvements.Your loan will finance up to 90 percent of these costs.
Interest rates on CSBF loans are either floating or fixed, but the floating rate can't be more than three
percent higher than residential mortgage rate. You will pay a fee of two percent of the total amount of the
loan, but this, too, can be financed and added to the total as long as it doesn't exceed the maximum of
$500,000e lender's expectations.

NAGRIK SAHAKARI BANK

BACKGROUND
THE NAGARIK SAHAKARI BANK LTD, BHIWANDI, was incorporated in 1949. The bank provides
services through seven branches.The area of operation of the bank as per the bye lwas is within the
geographical area of BHIWANDI TALUKA.
BASIS OF PREPARATION
Basis of Accounting
The financthe accrual basis of acconuting unless otherwise stated, and in accordance with geneally
accepted accounting principles and confirm to the statutory requirements prescribed under the bnaking
regulation Act,1949, circulars issued by the Reserve Bnak Of India (RBI) from time to time and current
prevailing within the banking industry in india.ial statements have been prepared by following going
concern concept on historical cost convention and on
Use of Estimates
The presentation of the financial statements requires estimstes and assumptions to be made that affect the
reported amount of assets and liabilities at the date of the financial statement and the reported amounts of
revenues and expenses during the reporting period. difference between the actual results and estimates are
recognized in the period in which the results are known / materialized.
III ) SIGNIFICANT ACCOUNTING POLICIES:i) Accounting Convention:The financial statements are drawn up in accordance with the historical cost covention and on the going
basis. They are in confirmity with generally accepted principles and practies prevalling in India, statutory
provisions and guildiness issued by RBI. Accounting Standard issued by the Istitution of Chartered
Accountans of india (ICAI) except where otherwise stated.

ii) Revence Recongition

Item of Income and Expenditure are generally accounted on accrual basis except

a. Interest on Non-performing assests is recognized to the extent realized, in pursance with

guidlines issued by the Reserve Bank of India.

b. Commission, exchange and brokerage is recognized on realization.

c.

Divident on investment, commision, incidential charges, services charges are accountant on

charges on cash basis.

d. Locker Rent.
III) SIGIFICANT ACCOUNTING POLICIES :i) Accounting Convention :The financial statements are drawn up in accordance with historical cost convention and on the going.
They are in confirmity with genrally accepted principles and practices prevalling in India, Statutory
provisons and guidlines issued by RBI, Accounting Standard issued by the Instution of Chartered
Accountans of India (ICAI) except where otherwise stated.
ii) Revenue Recognition :Items of Income and Expenditure are generally accounted on accrual basis except

a.

Interest on Non -performing are generally assets is recozies to the extent realized, in
pursuance with the guidlines issued is recozies to the extent realized, in pursuance with the gu
guidlines issued by the Reserve Bank Of India.

b. Commission, exchangeand brokrage is reconized on realiztion.

c. Divident on investment, commision, incidential charges, services charges are accountant on cash
basis.

d. Locker rent.
Held to Maturity (HTM)
The valution of investments in the above category has been done as follows:-

investments in HTM category are carried at cost of acquisition. The premium if any, paid on acquisition
is amortized over balance period of maturity. The bank has the practice of debiting amortized premium to
profit & loss account . government securities (GOI) are valuued as per the price quoted in the Fixed
Income Money Market & Derivatives Association of India (FIMMDA) as on 31.03.2016.

Amortization
Premium on acquisition of Government Securities under HTM category has been amortized over the
balance period of maturity. broken period interest (the amount of interest from the previous interest
payment date till the date of purchase / sale of instruments ) on debt instruments is treated as a revenue
item.
Foreign Exchange Transaction
The bank does not have any foreign exchange business.
Fixed Assets
Fixed Assets are stated at their weitten down value.
Depreciation on Fixed Assets is charged on written down value (WDV) basis as per the rates determined
by the management.
Depreciation on Fixed assets purchased during the year is charged for entire year if the asset is purchased
and retained for 180 days or more, otherwise it is cherged at 50% of the normal rate.
No Depreciation is charged in case in of assets disposed during the Year. Profit / Loss on sale of asset are
recognized in the year if sale / disposal.
Staff Retirements Benefits (AS-15)

i. Provient Funt contribution are made to Government Provident Fund on actual basis.
ii. Staff Group Gratuity
bank is bolding reatuity fund and provision bas been made to gratuity fund on yearly basis . However
there is no system of obtaining actuarial valuation of gratuity liabilty every year from the certified valuer
making provision thereof.
Group Leave Encashment

Leave encashment is accounted on accrual basis.

Bank bas provided for liability for leave encasbment to the employees. The libility towards Leave
encashment sbould be valued every year and provision sbould be made accordingiy. As per accouning
Standard 15 with regards to Retirement benefits , the provision for Leave Ecashment & Gratuity is to be
made on the basis of actuarial valuarial . However , Bank bad not obtained the actuarial valuation of
liablity towards leave encashment . Hence , the effect of the same on the results of the bank could not be
quantified.

Income Tax

a.

Provision For current tax is made on the basis of the amount expected to be paid to tax
authorities as per Income Tax Act,1961.

b. The bank has not recognized deferred Tax liability / assets in the books of accounts
NOTES TO ACCOUNTS

1. Order Under Section 77(A) of the MCS Act 1960

An order under section 77 (A) of the maharashtra Co-Operative Societies Act 1960 was passed by the
Deputy District Registrar , Thane on 29th December, 2014 which was received by the bank on
30.12.2014.
The above order was passed to supersede the Board of Directors of the bank . In Compliance of the above
order, the Commissioner of Co-Operation appointed Board of Administratirs with effect form 29th
Decembar, 2014, having one Cheirman and Two Members in place of Board of Directors to manage the
affairs of the bank as per the provisions of MCS Act 1960 , Rules 1961 Bye Laws of the bank of Rules
and Regulations as applicable to working of the said bank. Since then the bank was under the
management and control of Board of Administrators appointed by the Deputy District Registrar. Election
was conducted in February 2016 and new board is setup in the April 2016.
2. certin items of Income & Expendiure as ststed in para '3' of the significant accouning policies are
accounted on cash basis. These are in deviation form the generally accepted practice and as laid down by
Accounting Standard-9 on 'Revenue Recognition issued by The Institute of Chartered Accountants of
India, which specifies such items to be accounted for on accrual basis of accouning. This has resulted in
such items being accounted for only in the year of realization / the transaction to that extent. Further in
the absence of information, we are unable to quantify the effect of the same to the profit of the bank.
3.

FIXED ASSETS

None of the assets have been revalued during the year.

Accouning standards 6 and 10 issued by the Institute of Chartered Accountants of India relating to
Accounting for Fixed Assets and deprecition requies for disclsure of gross and net values of assets and
accumulated depreciation thereon. However as per the format applicable to the Co- Operative banks, the
above disclosure are not made in the accounts to that extent,the disclosure norms of Accouning Standards
as referred above have been followed. However, the same has no impact on the results of the bank.
4. Investments

No securities are held under 'Held For Trading' (HFT) and Available for sale (AFS) categories. It may be
noted that bank is holding Investment in Non SLR securities in the form of Bonds of Gujarat Road and
Infrastructure Company Limited, a unlisted company,The Non SLR securities should be classified under
Available For Sale category and valuation should made accordingly.
5. ADVANCE
bank has made adequate provision in respect of Substandard, Doubtful and Loss Assets classified by the
bank, as stipulated in the Provisioning norms laid down by the RBI in this regard.

a. We have obeserved that sbifting of Non Perfoming Assets as per the IRAC norms laid down
down by RBI is not made by the bank. Some of the NPA accounts which are to be classified as
standard though they are substandard, resulting into short provision to the extent of Rs.6.39 Lacs
in BDDR.

b. Bank is not considering Gold Loan accounts for classification of Non Perfoming Assets. Hence,
Bank has not followed IRAC Norms in this regard. We have observed thet there are 98 Gold Loan
Accounts having aggregate balance outstanding amount of Rs. 76.81 Lacs, which are eligible to
be classified as NPA but not classified by the Bank, thus resulting in short provision of Rs. 7.68
Lacs.

c. Bank has advanced some loans against the security of Stock of goods, Two wheeler and Four
wheeler Vehicles and classified these loans as Hypothecation Loans We have observed that most
of these loans are classified by the bank as NPA(Doubtful Assets) long Back. Further in the
present scenario, yhe value of the securities bypothecated to the bank cannot be ascertained in the
absence of adequate details. However, bank has Classified these loans as secured advances and
provision has been made accoringly. In the absence of proper details it is difficult to quantify the
effect on Profit and Loss Account.

NAGARIK SAHAKARI BANK IN TYPES OF LOANS AND ADVANCES

GOLD LOAN
Gold loan is a loan. In which gold ornament is secured with the bamk / or lender in exchage of fand /
money.
DOCUMENTATION NECESSARY FOR AVAILING THE GOLD LAON

a. ID proof
b. Address Proof
c. Franing agreement bond with T&C
d. 2 passart size photo
e. (NMF) Nominal Membar fees in Compulson only if customer in not holding share in particular
bank

f. The customer can avail loan facuty only if they are account holder in the parlicular bank.

In this policy / loan Minimum paper work like franling, band agreement on stamp paper is neessary after
this limited. pwecdure person get money immediataiy.
The fanding institution provide loan amount of upto 70 to 75% of the markt value of the gard at the
sanctioned loan on purity basis of gold loan.
If the person suyfer from bend financial condition or any emergeney for money it can apply for
gold loan for immendidte hapt payment like medical treatment coust procedure any personal thing or
problems.
In gold loan there is requirement of any documention or ralidation for income or salary of the
person.if you are unemplyed or you do not earning any meney you can still avail a gold loan. becase you
are pledging a valuasle Asset gold with bank or lender.
Another advantage of taking a gold loan is that they are avail alse at low interest 12.16% annually
in comprison to personal loan interest which is 15.26% per annum.
The duration of loan is opprox 1 years or bank charged a fixed rate of Interest on sanchioned
account.
1. You can get 100% satety and seanntiy of you gold / assets
2. Enjoy and time liquiclity
3. To avail gold loan time consumption very leass i.e 15-30 min.
Dis- advantage
If honec / customre is failed to repay the loan amount on due date or expiry date of loan . bank will
conduct the aution for gold for to recover their loan amount.

HOUSING LOAN

For purchase of filat or Construction of House

The persons eligible are salaried, sell- employed or Businessman

Maximum Loan Amount is 25 lacs

Repayment upto 15 years.

Secunity is Registetered Mortagage of Flat to be Purchased / House to be constructrd

Floting Rate of Interest is 13.50%

1. Loan Limit : is maximum Upto Rs. 1,00,000

2. INTEREST RATE : 12%.
3. No Pre-payment Penalty.
4. Rate of Interest : is Applicable from time to time.
5. Service Charges : are Applicable from time to time.
6. Margin : is Applicable from time to time.

ELIGIBILITY
Get Personal Loans from TJSB Bank.

1. For Salaried Persons :

A. i. Employees of reputed and financially sound organization.
ii. Minimum Gross take home salary of INR.15,000/- per month and Confirmed service for at least one year.

2. For businessmen & Professionals :

A. Business should have establish
B. ment of minimum of three years.
3. Co-Applicant :
A. Spouse /parents of the applicant can be taken if required.