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PROJECT ON
EDUCATION LOAN SCHEME
OF
ABHUDAYA BANK
SUBMITTED TO
THE UNIVERSITY OF MUMBAI
IN PARTIAL FULFILLMENT FOR THE AWARD OF
THE DEGREE OF BACHELOR OF COMMERCE
(BANKING AND INSURANCE)
SEMESTER V
(SEAT NO:
BY
NIYATI SHREEKANT WARKAR
THE S.I.A COLLEGE OF HIGHER
EDUCATION
2016-2017
SIGNATURE OF STUDENT
(NIYATI WARKAR)
ACKOWLEDGEMENT
SIGNATURE
sia.college@yahoo.com
CERTIFICATE
This is to certify that,
Mr. NIYATI SHREEKANT WARKAR Student of BCOM (Banking and
Insurance V) 2016-17
Seat No.
has successfully completed his Project Work on
EDUCATION
LOAN IN ABHUDAYA BANK under the guidance of
PROF .MR. MAHESH.G.KANDALKAR as per Mumbai University syllabus.
COURSE CO-ORDINATOR
EXTERNAL EXAMINER
PROJECT GUIDE
PRINCIPAL
INDEX
CHAPTERS NO.
CHAPTERS NAME
PAGE NO.
1.
INTRODUCTION OF TOPIC
2.
REVIEW OF LITERATURE
12
3.
39
4.
51
5.
CONCLUSION
63
6.
BIBLIOGRAPHY
65
CHAPTER 1
INTRODUCTION
TITLE
THE PROJECT
ON
Objective of study:
Scope:
It was just a month back when Reserve Bank Governor Raghuram Rajan
while answering queries about educational loans explained the role of
central bank in improving the quality of student loans. Despite high level of
defaults in repayment of loans taken by students to pursue higher
education the governor empathises with the students while informing the
media about the various issues and loops in the system of student loans
disbursed. Cases of students defaulting on loan payments prompted Indian
Bankers Association to review the education loan scheme. We explore
what this means for students.
Education loan is becoming popular day by day because of rising fee
structure of higher education. It came into existence in 1995 started by SBI
Bank and after that many banks started offering student loan.
The Indian banking sector began giving education loan from 2001 onwards.
But recently, in the wake of increasing Non Performing Assets (NPA) on
educational loans, the Indian Bankers Association (IBA) has revised the
educational loan scheme, framed in 2001. Though the situation is far from
worrying, banks have been advised to be prudent and cautious while
granting educational loans. For instance, State Level Bankers Committee
(SLBC) Chairperson Usha Ananthasubramanian sent a strong message to
banks in Punjab and Haryana when she told in a committee meeting
that,The non-performing assets level is certainly on the higher side in case
of education loan advanced collateral free. Only the meritorious rather than
the deserving candidates should be considered for granting education
loan.
Limitations of study:
CHAPTER 2
REVIEW OF LITERATURE
HISTORY
of
Abhyudaya Co-Operative Bank
The Beginning:
A dedicated group of social workers and labour movement activists, imbued
with the spirit of service to the cause of mill workers, other industrial and
hitherto neglected economically weaker sections of society started
Abhyudaya Co-op. Credit Society Ltd. in 1964, with a small share capital
of Rs. 5,000. The area of Kalachowki, Sewri, Parel and their surroundings
were predominantly populated by low income industrial labour and lower
middle class people at that time. In a short period of time Abhyudaya Coop. Credit Society got converted into an Urban Co-op. Bank. Finally in June
1965, Abhyudaya Co-op. Bank Ltd. was established full-fledged cooperative Bank.
A Forward March:
The Bank was conferred with Scheduled Bank Status by Reserve Bank of
India in September 1988. Over a span of 51years, it became one of the
leading Urban Co-op. On 11 January 2007 the Bank was registered as a
multi-state co-operative bank by the Central Registrar, New Delhi.
deposit to earn further interest. Loan is also available against the deposit
up to a maximum limit of 90%.
Recurring Deposit Scheme in this scheme the depositor has the facility
to make monthly deposits of smaller amounts which would cumulate into a
large corpus. The account can be opted with a minimum monthly deposit of
Rs.50 and loans up to 90% can also be availed on the deposits.
Abhyudaya tax Saving Scheme a scheme of fixed deposit designed
with the objective of saving tax under Section 80C. The minimum value of
deposit should be Rs.5000 and the deposit has to be held for a minimum
tenure of 5 years to make it eligible for tax exemption.
The fixed deposits earn a rate of interest which depends on the tenure
chosen. The general range of interest rates for the banks fixed deposit
schemes is 6.50% to 8.50%. Senior citizens get an additional interest rate
which can be 0.25% or 0.50% with the latter being more common.
Loan / SOD against Term Deposits term deposits held with the bank
can be pledged to avail loan which would be limited to 90% of the balance
in the deposit account.
Vehicle Loan (Private) loan for buying a private vehicle for private
purposes with a maximum of Rs.75 lakhs
Vehicle Loan (Commercial)- loan granted to fund purchases of a
commercial vehicle to be used for commercial purposes with a maximum
limit of Rs.100 lakhs
Taxi - Auto Loans specific loans provided to buy a taxi or an auto. The
maximum allowable amount is 90% of the on-road price of the vehicle
Loan against Property loans up to Rs.100 lakhs can be taken by
mortgaging any private or commercial propertyOther Loans some other
specialized loans are:
SOD against Immovable Property Rent Securitization Loan Loans for
repairs/renovations of flats/houses, Shops and Galas Loans & Advances to
Medical Practitioners Loans & Advances to other Professionals
Internet Banking
Though the bank has a limited reach, yet it also has the facility of internet
banking like its contemporaries. Every customer of the bank is provided
with a unique user id using which the customer can log into his account and
carry out banking transactions online easily. Whether it is making fund
transfers, monitoring individual accounts, applying for loans or investing in
fixed deposit schemes, internet banking has the solution for every need
Education Loan
Abhyudaya Co-operative Bank Limited offers two types of Education Loan
schemes to students.
One loan is for higher studies taken in India or abroad while
the other one is for Vocational courses and training.
thesis work, etc.For studying in India, the maximum allowable limit of loan
is Rs.10 lakhs and for studying abroad, the limit is extended to Rs.20
lakhsThere is a repayment holiday when the loan is not required to be
serviced. This period is called the moratorium period and is equivalent to
the course year plus one year or 6 months after getting a job, whichever is
earlier.The loan if taken up to the value of Rs.7.5 lakhs should be repaid
within 10 years and loans above this value should be repaid within a
maximum period of 15 years. However, the total repayment period of the
loan including the moratorium period must not exceed 20 years.There will
be a concession of 1% in the interest rate chargeable if the student
services the interest part of the loan during the moratorium periodFor loans
up to Rs.4 lakhs, the bank does not require any margin. For loans higher of
this value, 5% margin for Indian education and 15% margin for foreign
education is requiredRegular membership would be required for the
applicant and the co-applicant and the charge would be 1% of the amount
of loan sanctioned with a minimum of Rs.1000 and a maximum of Rs.2500.
sureties can make do with nominal membership of Rs.100For loans up to
Rs.4 lakhs, parents would act as co-borrowers. Loans above this amount
would require a security. Loans above Rs.4 lakhs and up to Rs.7.5 lakhs
would require an additional collateral security in the form of two outside
sureties acceptable to the bank. For loans higher than Rs.7.5 lakhs, the
security would be a tangible collateral security of a value equal to the loan,
two outside sureties and the assignment of future income of the student to
the bank. Parents would have to act as co-borrowers in all cases
above.There is no service charge on the loanThere is no prepayment
penalty for prepaying the loan.
Documents required:
The following documents should be submitted for availing the loan:
Latest photograph of the applicant Photo identity proofAddress proofPAN
CardParents and guardians having regular source of income so that they
can pay the monthly interestA declaration or an affidavit stating that no
other Education Loans have been availed from anywhere elseAn offer letter
from the university, college or institution stating the course details and the
procedure of admission.Passport copy for seeking admission abroadLatest
mark sheets.
Eligibility:
The student should comply with the following eligibility criteria to
successfully avail the loan:
He or she should be an Indian National.The student should have obtained
admission in a college or a university based on a merit-based selection
process or examination.
Rate of interest :
The rate of interest charged on the loan depends on the gender of the
student and the amount of loan availed:
For boys:
Loans up to Rs.10 lakhs charge an interest rate of 13% per annum and
loans above Rs.10 lakhs charge an interest rate of 14% per annum.
For girls:
Loans of up to Rs.10 lakhs would charge an interest rate of 12.50% and
loans of higher values would charge an interest rate of 13.50% per annum.
Documents required:
The following documents should be submitted:
Latest photograph of the applicant and co-applicantsA valid Photo identity
proofA valid Address proofPAN CardParents and guardians having regular
source of income so that they can pay the monthly interestA declaration or
an affidavit stating that no other Education Loans have been availed from
anywhere elseAn offer letter from the university, college or institution stating
the course details and the procedure of admissionPassport copy for
seeking admission abroadLatest mark sheets
Eligibility:
The following would be eligible for this scheme of loan:
The student must be an Indian NationalThe student must have passed
Class X examinations conducted by the State or Central BoardsThe
student must have obtained admission in a Government recognized
vocational training course which would result in him getting a job.The
parents of the student must act as joint borrower. If the student is married,
the spouse, parents or the parents-in-law can act as a joint borrower.
Rate of Interest
The Vocational Education Loan would charge a 13% rate of
interest for boy students and a 12.50% rate of interest for girl
students.
EMI Calculator
Every loan of the bank can be calculated to give the payable instalment
through the banks EMI calculator facility which calculates the EMIs
payable for the loan. One would have to provide the loan amount, the
repayment tenure and the rate of interest in the required fields and the
instalment would be calculated. For example:
A loan for higher education in India taken by a male student for Rs.10 lakhs
and repayable within 10 years would attract a rate of 13% and the
corresponding EMI would come to Rs.14, 932. If the loan would have been
availed by a girl child, the equivalent EMI would have come to Rs.14, 638
at a rate of interest of 12.50%If the loan is taken for vocational education to
the tune of Rs.1 lakh and payable in 5 years, the rate of interest for a boy
would have been 13% with an EMI of Rs.2276. For a girl, the EMI would
have reduced to Rs.2250 at an interest rate of 12.50%.
CHAPTER 3
RESEARCH
&
METHODOLOGY
Research meaning
Research is the systematic process of collecting and analyzing information (data)
in order increase our understanding of the phenomenon about which we are
concerned or interested.
The following kind of projects usually don't make for good research:
self-enlightenment
comparing data sets
correlating data sets
problems with yes/no answer
Methodology
The underlying and analysis of how research does or should proceed often
influenced by discipline.
"An epistemology is a theory of knowledge. It is the theory that decides what can
be observed.
TABLE
Data collection
Primary source
Questionnaire
Secondary source
External source
Internal
source
Survey
observations
Experiments
Sales records
Internet
Marketing
activities
Published
data
Standardis
ed
Cost
information
Distribution
reports
Electroni
c
Printed
Government
Trade
associations
Periodicals
Store audits
Warehouse
withdrawal
Services
News papers
Consumer
purchase
Books
Panels
Annual reports
Single source
data
Primary Source
Primary source is use to collect initial material during the research process.
Primary data is the data that the researcher collects himself using methods such as
surveys, direct observations, interviews, as well as logs. Primary data is the reliable
way to collect data because the researcher we know where it came from and how it
was collected and analyse since he did it himself. Primary sourness of information
allows the learner to accesses original and unedited information. A primary source
requires the learner to interact with the source and extract information.
Primary Data can be gathered by following methods
1)
2)
3)
4)
Surveys
Questionnaires
Observation
Experiments
Survey Research
Survey research is one of the most important areas of measurement in applied
research. The broad area of survey research encompasses any measurement
procedure that involved asking questions of respondent. A survey can be anything
from a short paper and predating feedback from to an intensive one on one in death
interview
Survey can divide in to two categories: the Questioner and the interviews
questionnaires are usually are in the written format that the respondent completes.
Interviews are completed by the interviewer base on the respondent says.
Sometimes, its hard to tell the difference between the questionnaires and the
interview. For instance, some people think questioner always asked short closedEnded questions while interviews always asked open-ended once. But you will see
questionnaires with open ended questions and their will often be a series of closed
ended questions asked in an interview.
Survey research has change dramatically during last few decades. We have
Automated telephone Service that use random dealing methods there are
computerized kiosks in public places that allow People to ask input. A whole new
variation of group interview as evolved has focus group methodology. Increasingly,
survey research is tightly integrated with the delivery of service. Your Hotel room
has a survey on the desk. Indian railway and catering company presents a short
customer satisfaction survey when you Travel By a Railways. You get a call for an
interview several days after your last call to a computer company for technical
assistance. You are asked to complete a short survey when you visit a website.
When most people think of questionnaires, they think of the male survey. All of us
have at some time or the other, receive a questionnaire in the mail there are many
advantages in mail surveys. They are relatively inexpensive to administrator. You
can send the exact same instrument to a wide number of people. They allow the
respondents to fill it out at their often very low. And, mail questionnaires are not
the best vehicles asking for the details return responses.
INTERVIEWS
SECONDARY SOURCES
Limitations of Secondary
Sources
Despite many potential benefits of Secondary Source, it has a
number of limitation.
1.
Problems of fit are likely to occur between the date required
for current research and the available data.
2.
The researchers have no knowledge of how the data were
collected, not do they have any control over it. Therefore, they do
not know anything about its accuracy or its bounds of error.
3.
It is also very difficult to evaluate the accuracy of the data
already collected
4.
In many cases the Secondary Source may not be sufficient
to meet the data requirement
for the research at hand. Secondary Source can be outdate, and
hence, cannot be used in current research.
Suitability
The central problem of Secondary Source by which definition
was not gathered for purposes of the present research.
May only partially address the research question.
Data definitions, categories, levels of aggregation may differ, if
only slightly, from those required, time series many not be
continuous.
Validity of data may vary - government sources likely to be valid,
but company statistics may be unreliable, minutes of meetings
may be messaged; newspaper articles adhere to journalistic
standards; Integration of Secondary Source with each other and
with primary data also an issue.
Common sources of Secondary Source are social science surveys
and data from government agencies, including the Bureau of the
Census, the Bureau of Labor Statistics and various other
agencies. The data collected is most often collected via survey
research methods. Data from experimental studies may also be
used.
Finally, once you have your questions written, there is the issue of
how best to place them in your survey. Youll see that although
there are many aspects of survey construction that are just
common sense, if you are not careful you can make critical errors
that have dramatic effects on your results.
CHAPTER 4
DATA ANALYSIS
&
INTERPRETATION
INTRODUCTION
Data analysis is critical to the management of risk and the oversight of
claims handling. Understanding a programs experience sets the direction for
future action by outlining what has occurred, where the program stands
today (the current baseline), and what opportunity.
Data analysis as a discipline contains three interrelated components
Process Management
Data
Analysis
Process management provides the frame work for initiating and
directing a data analysis project. A widely accepted approach within
the discipline is the Cross Industry Standard process of Data Mining
(CRISP-DM). A complete explanation of the steps in the steps in the
process and supporting documentation can be found at
http://www.crisp-dm.org/ . Aside from a frame work data analysis
requires a solid foundation, which is the data itself. Previous articles
have outlined the data life cycle (Higdon, Keith M., Understanding the
Data Lifecycle, John Liner Review , Vol, 24, NO. 1, Standard Publishing
Corp, Boston, MA, Spring 2010) and its five stages.
1. Capture
2. Storage
3. Access
4. Analysis
5. Deployment
When considering a data analysis project, understanding the first three
stages of the lifecycle create the foundation by setting boundaries
around what is currently possible. The purpose of this article is to
expand on the processes within stage 4 (analysis) with additional
considerations for making the act of solution deployment (stage 5)
have a more practical impact. By having a better understanding of the
methods of analysis, metrics commonly used in data analysis and
statistical techniques, risk management departments will be in a better
position to assess their need for analysis, to indentify the resources
and commitment necessary to design and implement a data analysis
project, and to set appropriate expectations as to the usefulness of the
information obtained.
Questionnaire
In general the word questionnaire refers to a device for securing answer
to the questions by using form which the respondent fills in himself. .
Tools preparation
The tools chosen for the research work was questionnaire. It consisted of
one questionnaire forms which are asked to customers . A list of 9
questions was asked to customer to know there point of view.
Yes
No
70%
30%
70%
60%
50%
40%
30%
20%
10%
0%
YES
NO
Interpretation:
From the above graph it is clear that 70% of respondent know about the
education loan whereas 30% of them are not aware about it.
Advertisement
64%
word of mouth
20%
70%
60%
50%
40%
30%
20%
10%
0%
Interpretation:
From the above graph 64% of the respondents came to know
about the education loan through advertisement, 20% came to
know through word of mouth & 16% came to know through
friend/family.
56%
18%
14%
12%
60%
50%
40%
30%
20%
10%
0%
Service Quality Simple Procedure
Interest Rate
Advertisement
Interpretation:
From the above graph it is clear that 56% of respondent selected this bank
because of its service quality,18% selected this bank because of the simple
procedure,14% selected due to low interest rate and 12 % through
advertisement.
Good
76%
Average
20%
Poor
4%
80%
70%
60%
50%
40%
30%
20%
10%
0%
good
average
bad
Interpretation:
From the above graph it is clear than 76% of respondent felt that the
marketing strategy of the bank is good, 20% felt it's average, 4 % said it's
poor.
24%
16%
10%
50%
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
CA
CS
NIIT's
MBA
Interpretation:
From the above graph it is clear that 24% of respondent have taken
education loan for chartered accountant, 16% for company secretary, and
10% for NIIt's course & 50% for MBA
70%
30%
70%
60%
50%
40%
30%
20%
10%
0%
YES
NO
Interpretation:
From the above graph 70% are satisfied with bank's service
whereas 30% are not satisfied.
76%
24%
70%
60%
50%
40%
30%
20%
10%
0%
YES
NO
Interpretation:
From the above graph it is clear that around 76% of respondent
think that the interest rate charged by bank is reasonable and
24% think that it is not reasonable.
68%
32%
70%
60%
50%
40%
30%
20%
10%
0%
YES
NO
Interpretation:
From the above graph it is clear that 68% of respondent said that
education loan was passed immediately but 32% said that it was not
passed immediately.
78%
22%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Yes
No
Interpretation:
From the above graph we came to know that 78% of
respondent said that they got the tax benefit & 22% said
they didnt get tax benefit yet.
CHAPTER 5
CONCLUSION
CHAPTER 6
BIBLIOGRAPHY
Bibliography
https://en.wikipedia.org/wiki/Abhyudaya_Cooperative_Bank_Ltd
https://www.abhyudayabank.co.in/english/Profile.aspx
http://www.paisabazaar.com/abhyudaya-co-operativebank/education-loan/