A case study on

“Financing of Agriculture by Vijaya

Bank in Shivamogga District”
‘a special reference with Haranahalli Branch’

CONTENTS
Chapter 1
INTRODUCTION
 Introduction
 Objective
 Need and scope of study
 Methodology
 Limitation of the study

Chapter 2
INTRODUCTION TO BANKING
 Introduction
 Origin of Bank
 Banking regulation Act 1949
 Meaning and features of Banker
 Functions of Bankers
 Functions of Bank

Chapter 3
AGRICULTURAL FINANCE
 Introduction
 Objectives
 Role of Finance in Agriculture
 Source for Agricultural Finance

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  Agricultural Finance by Commercial Banks

Chapter 4
VIJAYA BANK PROFILE
 History
 Vision and Mission
 Milestones
 Agriculture in India
 Contribution of Agriculture to the Indian economy
 Branch profile

Chapter 5
CONCEPTUAL BACKGROUND
 Introduction to the District
 Agriculture and Rural credit schemes of Vijaya Bank

Chapter 6
DATA ANALYSIS AND INTERPRETATION

Chapter 7
FINDINGS, SUGGESTIONS AND CONCLUSION

Annexure
 Questionnaire
 Bibliography

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 Chapter 1
INTRODUCTION

 Introduction
 Objective
 Need and scope of study
 Methodology
 Limitation of the study

3
 INTRODUCTION
Agriculture finance is a loans, notes bills of exchange, and banker’s
acceptance financing agricultural transactions. Banks lend to former for
a verity of purposes, including 1) short credit to cover operating expenses
: 2) Inter mediate credit for investment in form equipments and real estate
improvements; 3) Long –term credit for aqueision of form real estate and
construction financing ; and 4) debt repayment and refinancing
commercial banks are the largest source of agricultural credit, followed
by the farm credit Banks.
Professional money lenders were the only source of credit to agriculture
till 1935. They use to charge unduly high rates of interest and follow
services practice while giving loans and recovering them. As a result,
farmers were heavily burdened with debts and money of them
perpetuated debts. There were widespread discontents among farmers
against these practices and there were instances of riots also.
With the palling of Reserve Bank of India Act 1934, District central co-
op. Banks Act and land development Bank Act, agricultural credit
received impetons and there were improvements in agricultural credit. A
powerful alternative agency came into being. Large scale credit become
available with reasonable rates of interest at easy terms, both in terms of
granting loans and recovery of them. Although the co- operative banks
started financing agriculture with their establishments in a930’s real
impelons was received only after Independence when suitable legislation
were palled and policies were formulated. Thereafter, Bank credit to

4
agriculture made phenomenal progress by opening branches in rural areas
and attaching deposits.
Till 14 major commercial banks were nationalized in 1969, co- operative
banks were the main institutional agencies providing finance to
agriculture. After nationalization, it was made mandatory for these banks
to provide finance to agriculture as a priority sector. These banks
undertook special programs of branch expansion and created a network
of banking services throughout the country and started financing
agriculture on large scale. Thus agriculture credit acquired multi –agency
dimension. Development and adoption of new technologies and
availability of finance go hand in hand. In bringing “ Green Revolution”,
“White revolution” and now “ Yellow revolution” finance has played a
crucial role. Now the agriculture credit, through multi agency approach
has come to stay.
The procedures and amount of loan for various purpose have been
standardized. Among the various purpose “ Crop Loans” ( short term
loan) has the purchase of electric motor with pump, tractor and other
machinery, digging wells or boring wells, installation of pipe lines, drip
irrigation, planting fruit orchards, purchase of dairy animals and feeds/
dodder for them, poultry, sheep / goat keeping and far many other allied
enterprises.

Objectives
The study is to comprehend the agricultural finance practices and
products of Vijaya bank in Shivamogga District.
Sub Objectives

5
 To know the opinion of the bankers about the advance given by them
to farmers.
 To know the several attitudes of bankers towards their client.
 To know the effectiveness of the agricultural finance and service
provided by the bank comparison with other banks.
 To Know whether the services provide by the bank is satisfactory of
not.
 To analyze the customer purpose, perception and difficulties while
taking agricultural loan.

Need for the study

The need for conducting this study is to have the practical knowledge
about the agricultural finance schemes of Vijaya Bank have been offering
to public and also its relation with the customer and the bank made of
operation and to study the various agricultural loan schemes. This
research is also be helpful to understand the perception of customer
towards agriculture lending schemes of bank.

Scope of the Study

This study surrounds the area of agriculture finance practice of the
proffered bank i.e Vijaya Bank. This research may be helpful for
understanding the perception of the farmer towards agriculture of the
bank in this sector in Shivamogga district.

Methodology

6
For the purpose of the study, secondary and primary data has been
collected however; the project report is prepared primarily on the basis of
secondary data.
Primary data is collected by using questionnaires to the customers and
got the answer and based on the analysis of the answer conclusion have
been drawn up.
Secondary data is collected from the book journals, magazines and
annual report of the bank etc
This project report has been prepared within a stipulated time period, the
available time has been utilized to the utmost extend possible to collect
data and analyzed for successful completion of this report.
This project report may not give a true picture because of the biased
nature of the response received.
The study of agricultural finance by commercial bank is limited to Vijaya
Bank, main a road, Harnahalli. The data relating to 2007 to 2011 has been
analyzed to study various types of the loans granted by Vijaya Bank.

Limitations
The project report will have some limitations.
 This project report has been prepared with in a instructed period of
time.
 The study is confirmed to Haranahalli only.
 The opinion of the formers may be biased.
 The accuracy of the project depends upon the answer received from
the informants.
 Time constraints

7
 Chapter 2
INTRODUCTION TO BANKING

 Introduction
 Origin of Bank
 Banking regulation Act 1949
 Meaning and features of Banker
 Functions of Bankers
 Functions of Bank

8
 INTRODUCTION TO BANKING

Introduction
Bank in modern days act as the chief agent in mobilizing the
dormant funds of the community and distribute them into production
channels. Banks today are the backbone of modern industry. They are an
essential part of the community. A banking company deals with the
money belonging to others. It deals with the money, which is deposited
by the general public.
Bank borrows money from the public to be able to lend again.
Their own funds are limited. Most of their business is done with funds
collected from the public by way of deposits.

Origin of bank
There is no unanimous opinion as to the term ‘bank’ or ‘banking’
or even ‘banker’ among the authorities on banking. According to some
authorities, the word ‘bank’ or ‘banking’ is derived from the Italian word
“Banco” the Latin word ‘Bancus’ and the French word ‘Banque’, which
means a bench. They are of the opinion that the European bankers
transacted their banking activities, Viz. Money changing and money
lending by displaying coins of different countries aid of different
denominations in big heaps on the benches in the market places.
The term ‘Bank’ is derived from the Germany word “Banck”,
which means a joint stock fund or a common fund raised from a large
number of members of the public. The word’ bank’ is generally

9
associated with an institution dealing in heaps of money raised from the
public.

Definition
According to Dr.H.L. Hart defines a banker as “one who in the
ordinary course of his business, honours cheques drawn upon him by
persons from and for whom he receives money on current accounts”.
According to crowther
“A dealer in debt, his own and other peoples.”

BANKING REGULATION ACT 1949

Sec 5 (1) (b) of the act defines the term “banking” as ‘accepting for
the purpose of lending or investment of deposits of money from the
public, repayable on demand or otherwise and withdraw able by cheque,
draft, order or otherwise’.
The Indian banking regulation Act of 1949, has the essential
characteristics they are as follows:
 Acceptance of deposits from the public on current, fixed and savings
bank accounts.
 Allowing of withdrawals of there deposits by cheques, drafts, orders
or otherwise.
 Utilization of deposits in hand for the purpose of lending or
investment in securities.
 Performance of banking business as the main business.

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MEANING AND FEATURES OF BANKER

Meaning of Banker
A banker is a person who does the business of banking. He is a
dealer in money credit and credit investments. Since banker occupies all
the deposit and he heads money to other for some purpose.
According to H.L.Hart Defines a banker as “One who in the
ordinary course of his business, honours cheques drawn upon him by
persons from and for whom he receives money on current accounts”.

Features of banker
 Acceptance of deposit from public.
 Profitable employment of funds so collected.
 Obligation to repay deposit on demand.
 Lending of money.
 Banking as a main business.

Functions of banker
1. Primary functions.
2. Secondary functions.

1. Primary functions
i. Acceptance of deposits.
ii. Lending of funds.
iii. Discounting bills of exchange.
2. Secondary functions

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 i. Agency service.
ii. General or Miscellaneous utility services.
i. Agency service
The important agency services are.
 Banks collect cheques, bank drafts, and interests on behalf of their
customers.
 Banks pay bills of exchange, L.I.P on behalf of their customers.
 Banks purchase and sell securities on behalf of their customers.

ii. Miscellaneous or general utility services

The important general utility services are;
 Banks accept precious articles, documents.
 Banks help exporters and importers in their foreign trade.
 Banks issue traveler’s letters of credit, circular notes.
 Banks act as referee and supply information about the financial
standing of their customers to others.

Classification of bank
Banks are classified on the basis of their functions. Such as classification
of banks is called functional classification of banks. On the basis of their
functions, banks are classified into six categories they are.
 Commercial banks or deposit banks.
 Industrial banks or investment banks.
 Agricultural banks.
 Exchange banks.
 Savings banks.

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  Central banks.

Commercial or Deposit Banks

This type of banks accept deposit from various source
withdrawable generally at short notice since their deposits are mainly for
a short term, they grant loans and advances for a short period to meet the
working capital needs of trade and industry.
The main function of commercial banks are:
 They accept deposits from the public on various accounts such as
current accounts, savings bank accounts and fixed deposit accounts
and their deposits are repayable on demand.
 They lend funds to trade and commerce and industry they grant
advances by way of loans, overdraft, cash credit etc.
 They are not merely dealers in money linking depositors and
borrowers, but also manufacturers of money.
 They also perform many subsidiary services known as agency and
general utility service of their customers.

Industrial Banks or Investment Banks

They provide industrial capital by subscribing for shares and
debentures of companies. They also grant long term loans to meet the
fixed capital needs of the industry.
Functions of industrial banks
 They grant long term loans to industries for periods ranging from
5-15 years for the construction of a factory building etc.

13
 They subscribe to the share capital and debentures of industrial
concerns.
 They provide technical assistance to industries.
 They advise the government on matters relating to industries.

Agricultural Banks
There types of bank provide finance to agriculture they are called
agricultural banks. Agricultural banks, organized in India on the co-
operative basis, are of two types. They are(1)Agricultural co-operative
banks (2) land mortgage or land development banks. Agricultural co-
operative banks provide short-term finance to the agriculturists for the
purchases of fertilizers, pesticides etc. land development banks provide
long-term finance to the farmers for the purchase of agricultural
machinery, installation of pump sets etc.

Exchange Banks
They deal primarily in transactions involving foreign exchange
such banks have branches and agencies in different parts of the world and
they finance the export import trade.

Savings Banks
Savings banks are special banks, which specialize in the
mobilization of the small savings of the middle and low income groups.
As they are concerned with mobilization of the small savings of the
people. They are called “Savings Banks”.

14
Central Banks
A central bank is the highest banking and monetary institution of a
country. It is a leader of all other banking and monetary institutions found
in a country. It occupies central position in the banking structure of a
country. It is called the ‘Central banks”.

15
 CHAPTER – 3
AGRICULTURAL FINANCE
 Introduction
 Objectives
 Role of Finance in Agriculture
 Source for Agricultural Finance
 Agricultural Finance by Commercial Banks

16
 AGRICULTURAL FINANCE
Introduction
Indian economy is agro based. The country greatly depends upon
the contribution from the sector both interms of output as also as
potential source of employment.
Agricultural plays a very important role in India’s economic
development. The country is predominantly Agricultural with 62% of
population depending directly on agriculture it contributes about 1/3 of
gross value added in India it role in economic development apart. It is a
way of life and therefore, in its development lies the general well being
of the people.

Objectives
Some of the objectives of agricultural lending are as follows,
 Increase in agricultural production
 Finance should be need based and timely
 Providing finance for variable scheme of allied actively like poultry
diary etc
 Attention to develop small farmers etc
a. Marginal farmers
b. Agricultural labours
c. Tribunal farmers etc

Rule of Finance in Agricultural

India is predominantly agricultural country 76% of the population
depending on agriculture in the beginning of the country to about 62%

17
the total number of population depending on agriculture there is a big
increase which must have affected the availability of land per capita. This
sector contributes around 29% of GDP

Agriculture has a big role in the development of industries

specially the agro based industries such as textile sugar tea paper the
prosperity of the agro based industries is directly dependent upon the
availability of inputs from the agricultural sector the agriculture company
in a way owes all obligation to generate surpluses for growth of
industries and other sectors of economy.

The countries foreign trade especially in the Export of traditional

commodities like jute, tea, tobacco and coffee depends a great deal on the
supplies the agricultural sector. The cost of living of the people in the
country is also liked with agricultural prosperity agriculture is said to be
gamble in rains because incorrectly of the monsoons.

A large majority of people its directly dependent on agricultural

production, indirectly a considerable part of trade and commerce depends
on agricultural production. The problem indirectly a considerable part of
trade and commerce depends on agricultural production. The agricultural
operations or on agro based rural industries.

A large majority of people its directly dependent on agricultural

production. Indirectly a considerable part of trade and commerce depends

18
on agricultural production. The problem of unemployment in the country
the agricultural operation or an agro – based rural industries.

Sources of Agricultural Finance

It can be divided into two categories
i. Non-institutional sources and
ii. Institutional sources

Non-institutional sources
Money Lenders, Relatives, Traders, Commission agents, Land
lords

Institutional sources
 Co- operative Credit Societies
There are two separate wings of the co-operative credit structure in
India one provides short term and medium term loans where as the
second provides long term loans. The farmer has their tier system with
the state co-operative bank at the apex. Central co-operative bank at the
indirect level and primary agricultural credit societies at the village level.
Long-term co-operative credit is provided by the state co-operative land
development banks and primary co-operative land development banks.
The share of co-operative societies has almost increased 17 times
but there are certain. Criticism with regard to co-operative societies.
i. The first important bottleneck is the continued existence of high
level of over dues. The percentage of our dues to demand is about
30%.

19
ii. There has been considerable diversion of loans to uses other than
those intended.
iii. There has a considerable regional disparity in the distribution of
credit-by-credit societies.
 Land Development Banks
Land development banks are long-term co-operative credit
institution set up for the purpose of providing long-term credit to farmers.
Against the security of lands at moderate rate of interest for the purpose
of land development.
They include
a. Primary land development banks at the taluk or district levels,
providing credit to farmers directly.
b. central land development banks at the state level, providing finance to
primary land development banks.
Land development bank grant loan to farmers for long periods
varying form 15-25years. Loans are repayable in easy installments.
Loans are given against the mortgage or security of lands.
 Regional Rural Banks (RRBs)
A scheme of RRBs was started in 1975 with the establishment of 5
RRBs to cater to the need of rural banking in India. There were 196
banks with networks of 14,450 branches by the end of June 2000. A study
conducted by the working group of the RBI has suggested the
strengthening of this set up. So far 15% of the total 400 and add districts
have been covered and it is expected that remaining district will be
covered.

20
 Commercial Banks
The real involvement of banks in agricultural financing
commenced in 1969 with the introduction of lead bank scheme. The
banks were charged with responsibility of preparing development
programmers. For their respective districts Nationalization of banks in
1969 & 1980 accelerated the association of banks with agricultural
finance.
The commercial banks provide loans for all agricultural operations
and allied purposes. The District credit provided by commercial banks
takes the form of short-term loans, medium term loan. The indirect and
long-term credit by banks takes form of credit to farmers through same
intermediary agency.
Commercial banks participate in agricultural finance in many ways
they are.
 They have helped in the organization of “Farmer’s service societies”
in a few selected centers to provide the farmers an integrated package
credit and other services including supply of agricultural inputs
 They have also introduced the Village adoption scheme under which
they provided finance for the various needs of the adopted villages.
 They are also participating in the lead bank scheme under the scheme,
they are financing the credit needs of several backward districts.

 Agricultural Refinance and Development Corporation

The ARDC was set up on 1st July 1963 under the agricultural
refinance corporation Act of 1973.

21
Objectives
The main objective of the corporation are
i. To provide long-term refinance to institution, which are engaged in
the provision of long-term finance to agriculture.
ii. To diversify agricultural finance for over all agricultural
development

 National Bank for Agriculture and Rural Development

(NABARD)
The NABARD was set up on 1st July 1982 with view to bringing
about better co-ordination among the various agencies engaged in rural
credit
Functions
a. It acts as the apex refinancing institution in the country to look after
the credit requirement the rural sector.
b. It brings about better co-ordination among the various agencies
engaged in rural credit.

Commercial Banking in India

At the time of independence India had a fairly well developed
banking system with more than 645 banks having more than 4800 branch
offices. Their banks generally catered to the needs of industries and that
100 big houses. Other priority sectors like agriculture, small-scale
industries, exports etc. were almost neglected to overcome these
deficiencies. The government amounted the nationalization of 14 major

22
commercial banks with effect from July 1969. Six more banks were
nationalized in 1980.

Meaning of Indian Commercial Banks

Indian commercial banks are banks formed as joint stock
companies under the Indian company act for performing commercial
banking business.
Classification of Indian banks
i. Public sector banks
ii. Private sector banks
Their two sectors going to be further divided into sub-sectors which
can be better understand by the following chart.

Commercial Banks

Public Sector Private Sector

State bank Nationalized Scheduled Non-Scheduled

Group Bank bank bank

Commercial banks participate in agricultural financial in many ways they

are:
They provide direct finance to farmers. They provide not only
“short term Credit” for agriculture operations but also “Medium term”

23
and even “Long term loans” for construction of embankments and funds
for pump sets, tractor and agricultural machinery etc.

They provide indirect agricultural finance in the following ways

i. They provide funds to land development banks, which in turn,
provide long-term loans to agriculturists.
ii. They have sponsored several regional rural banks, which provide
rural finance.

Agricultural Finance by Commercial Banks

The significance of the role that banking industry has to play in the
development of agricultural sector of the country is undisputable since
the introduction of social control measure in 1969 the government of
India and RBI have been emphasizing the need for greater assistance to
priority sectors of which agriculture is major one. RBI has been setting
up certain targets for agricultural finance by commercial banks presently
the target is 18% of Net Bank Credit.

Objective
The following objectives of agricultural finance
 To cater financial needs of all agricultural and allied activities.
 For crop production.
 To include banking habit among agricultural especially in villages.
 To free agriculturists from the clutches of private moneylender.
 To aid form mechanization and improve infrastructure facilities.
 To help them to improve their socio-economic conditions.

24
 To increase food production.
 To promote better management practices like adequate use of inputs.

Types of Agricultural Advances

Agricultural advances can be broadly classified as direct and
indirect depending upon the nature and purpose of advance.

The Direct advance

 The direct advance are those granted directly to agriculturists, firms
companies for production and development of agriculture and allied
activities.
 The direct advances are also granted for allied agricultural activities
such as diary development poultry, farming, fisheries, piggery,
sericulture, sheep/goat development, vermiculture, beekeping,
mushroom cultivation.
 The agricultural advances also include advances for cultivation of
plantation crops like tea, coffee, rubber, fruit crops etc. and
horticultural crops like areca nut, coconut banana etc.

Indirect Advance
The indirect advances are those granted to individual, firm,
companies, agencies who/which are engaged in supply of inputs of
production services etc. for the development of agricultural and allied
activities.

25
 The indirect finance normally covers advances granted to retail
traders in fertilizers and pesticides, co-operative societies, primary
agricultural credit societies. Custom service units etc.
 The direct agricultural advances can be further classified as short,
medium and long term loans based on repayment period.

Short-term loans are granted for the purpose of production or

working capital. The period is normally 12-18 months. Medium and
long-term advances are usually granted for the purpose of purchasing
equipments or carrying out development activities. The period is usually
3 to 5 years for medium term loans and above 5 years for long-term
loans.

Guidelines for Loan Papers

Loan papers required
Application for agricultural advances should be obtained in form
no 986 together with the annexure inform no 987 to form no 1000
depending upon the activity for which loan is applied for the following
papers should be obtained under all agricultural advances
 Declaration of assets and liabilities of co-obligant/guarantor if any.
 Property statement of co-obligant.
 True extracts of revenue records.
 Encumbrance certificate for last 13 years.
 Tax Revenue assessment paid receipt.
 Agricultural income tax assessment orders, wherever applicable.

26
 No due no obligation certificate from the co-operative society/ land
development banks.
 2 copies of passport size photos of the applicant.

Appraisal
While considering the proposal the needs of the applicant should
be ascertained.
It should be ensured that the activity for which finance is
considered is carried on generally authors the service area of the branch.
If outside service area the branch should be in a position to monitor the
advance and to pay regular visits to the farm when the financial activities
are carried out.
While considering crop loans, it is essential to be conversant with
the suitability of the lands and agro climatic condition of the type of
crop-grown crops are classified as follows.

Season Loan Disbursements Cropping period

Kharif April to August April to September
Robi September to December October to January
Summer January to March December, January April

In the care of development / investment loans, the viability of

development proposed is to be supported by the proper technical
feasibility-um-economic viability report obtained from a technical
consultant or the banks AFO as the care may be.
The availability of the subsidies margin money if any, from the
government agencies, availability of the refinance facility from

27
NABARD should be considered. Where the loan is considered under
IRDP or other schemes its should be ensured that the terms and
conditions of the said schemes or complied with.
Normally, there are occasions where the applicant night have availed
certain credit facilities from other banks.
Where the property is offered as security, it should be ensured that it
is free from prior encumbrances.
It is essential to pay a visit to the form before considering the
proposal. This will enable to as certain the condition of the farm, its
actual location standard of living of the applicant etc.

28
 Chapter 4
VIJAYA BANK PROFILE

 History
 Vision and Mission
 Milestones
 Agriculture in India
 Contribution of Agriculture to the Indian economy
 Branch profile

29
 Vijaya Bank Profile

History
Vijaya Bank, was founded on 23rd October 1931 by late Shri A.B.Shetty
and other enterprising farmers in Mangalore, Karnataka. The objective of
the founders was essentially to promote banking habit, thrift and
entrepreneurship among the farming community of Dakshina Kannada
district in Karnataka State. The bank became a scheduled bank in 1958.

Vijaya Bank steadily grew into a large All India bank, with nine smaller
banks merging with it during the 1963-68. The credit for this merger as
well as growth goes to late Shri M.Sunder Ram Shetty, who was then the
Chief Executive of the bank. The bank was nationalised on 15th April
1980. The bank has built a network of 1512 branches, 48 Extension
Counters and 1528 ATMs, that span all 28 states and 4 union territories in
the country.

Vision
Vision is to evolve into a strong sound and globally competitive financial
system, providing integrated services to customers from all segments,
leveraging on technology and human resources, adopting the best
accounting and ethical practices and fulfilling corporate and social
responsibilities towards all stakeholders.

Mission

30
Mission is to emerge as a prime national bank backed by modern
technology meeting customer aspirations with professional banking
services and sustained growth contributing to National development.

Milestones
1980 - The Government of India taking over the undertaking of Vijaya
Bank Ltd. The Bank is engaged in transacts all types of banking Business
including foreign exchange and is a Government of India Undertaking.
1984 - Capital worth Rs 10 lakhs subscribed by Government.

1985 - The Bank sponsored its first Regional Rural Bank under the
name and style Visweswaraya Grameena Bank in March. This
Regional Rural Bank would cater to the needs of the target group
belonging to Mandya district of Karnataka State.
Capital worth Rs 772 lakhs subscribed by Government.

1986 - Capital worth Rs 1000 lakhs subscribed by Government.

1989 - Rs 800 lakhs subscribed by Government.

1992 - Rs 2500 lakhs subscribed by Government.

The bank has introduced automatic renewal facility up to four Times in
respect of short term deposits accepted for periods from forty
six days to one year for the convenience of the customers.
The novel scheme of `Vijaya Vichar Vihar' was introduced by he Bank in
1989 and is now flourishing in 25 centers as on March.

31
1993 - Rs 5000 lakhs subscribed by Government. The Bank has installed
68 ALPMs in 25 branches. The 'Vijaya Bank Diamond Jubilee
Scholarship Scheme' was introduced as a part of Diamond Jubilee
Celebrations of the Bank, with the objective of awarding scholarships to
such of those children of serving permanent sub-staff employees.

1994 - Rs 6500 lakhs subscribed by Government. The Bank had entered

into the Memorandum of Understanding with the Reserve Bank of India,
undertaking to fulfill definite Performance commitments. The Bank
introduced the new schemes viz. Vijaya Gift Bond Scheme and Vijaya
Service Card for enlarging its services to its Business clientele.

1996 - The Bank opened its first subsidiary, VIBANK HOUSING

FINANCE LTD to add impetus to housing finance. Vijaya Bank
introduced three new loan schemes, namely, 'Vijaya Nivruthi', 'Vijaya
Krishi Vikas' and 'Vijaya Mangala' to cater to the credit needs of
pensioners, farmers and working women respectively. The Bank has also
entered into tie-up arrangements with ICICI Banking Corporation
Limited and Oman International Bank Ltd. The Bank introduced
innovative banking service called 'Any Branch Banking.'

1997 - Vijaya Bank has introduced a novel way to improve customer

Service. The Bank has recently introduced a new `trade finance' scheme.

32
1998 - Vijaya bank has introduced a jewel scheme under which loans are
granted by the bank to fund the purchase of jewellery by keeping the
purchased item as collateral till the loan has been repaid.
1999 - Vijaya Bank has entered into a Rs 200-crore take-out financing
Agreement with the Housing and Urban Development Corporation for
funding infrastructure projects.

2000 - Vijaya Bank has introduced a new scheme named V-Star savings
bank Account scheme. Vijaya Bank Chairman and Managing Director S
Gopalakrishnan were elected as the president of Indian Banks'
Association, Bangalore.

2003 -Vijaya Bank signs a pact with LIC to offer Life insurance cover to
all its existing as well as its new deposit-holders.
2004 -Vijaya Bank ties up with NIC to offer free insurance policy.US-
based Principal Group enters distributorship tie-ups with Vijaya Bank.
Delhi based Punjab National Bank (PNB) and Bangalore-based Vijaya
Bank enter into a four-way partnership with Principal Financial of the US
and Berger Paints to set up an insurance broking company.
Bangalore-based Vijaya Bank has launched a new credit facility for
Farmers who are caught up in the clutches of private money-lenders and
help them to improve their financial status. Vijaya Bank ties up with New
Holland Tractors. Vijaya Bank ties up with National Insurance

2005 -Vijaya Bank ties up with TAFE. Vijaya Bank sets up new branches

33
2008 - Vijaya Bank inked a memorandum of understanding with credit
rating Agency, Crisil, for rating its corporate customers.
Vijaya Bank has inked a pact with Credit Analysis & Research Ltd
(CARE), one of the RBI accredited rating agency, to provide bank loan
Ratings to its corporate clients at a concessional fee.-Vijaya Bank has
informed that Shri. Ranjan Shetty has been nominated as Officer
Employee Director of the Bank with immediate effect; vide Letter dated
September 09, 2008 received from Government of India, Ministry of
Finance, and Department of Financial Services.

2009 - Vijaya bank has plans to issue 1,000 biometric smart cards to
Account-holders residing in villages by the end of this fiscal. Vijaya
Bank forged an alliance with VE Commercial Vehicles, a leading auto
brand, to become a preferred financier for the latter's commercial
vehicles.

2013-2014- Vijaya Bank’s Business level has crossed Rs. 2 lakhs crore
mark, aggregate deposits crossed Rs. 1 lakh crore mark, the Bank’s
branch network crossed the 1500 mark.

Board of Director’s
 Shri V. Kannan, Chairman & Managing Director
 Shri K.R. Shenoy, Executive Director
 Shri B.S. Rama Rao, Executive Director
 Shri V.K. Chopra, Director
 Smt. Suma Varma, Director

34
  Shri P.C. Nalwaya, Non Official Director
 Shri P. Vaidyanathan, Shareholder Director
 Smt. Bharati Rao, Sahreholder Director
 Shri Ashok Gupta, Non Official Director
 Shri H. Harish Ballal, Officer-employee Director
 Shri Y. Muralikrishna, Workmen Director

Awards and achievements

In recognition of varied initiatives, the bank was conferred several

awards and accolades during 2013-2014.
 ‘Best banker – HR’ award by Sunday Standard of The New Indian
Express group for excellence in human resources management
practices.
 ‘Amity Leadership award for business excellence by leveraging IT’
by Amity University for excellence in IT initiatives.
 The Chairman of the bank received the ‘CEO with HR Orientation’
award by Institute of Public Enterprises.
 Bank’s Credit Department is accredited with ISO/IEC 27001:2005
certification for information security management system by
British Standard Institute (BSI)

AGRICULTURE IN INDIA

35
The written history of agriculture in India dates back to the Rigveda,
written about 1100 BC. Today, India ranks second worldwide in farm
output. Agriculture and allied sectors like forestry and fisheries
accounted for 13.7% of the GDP (Gross Domestic Product) in 2013,
about 50% of the total workforce. The economic contribution of
agriculture to India's GDP is steadily declining with the country's broad-
based economic growth. Still, agriculture is demographically the broadest
economic sector and plays a significant role in the overall socio-
economic fabric of India
As Per the 2010 FAO world agriculture statistics, India is the world's
largest producer of many fresh fruits and vegetables, milk, major spices,
select fibrous crops such as jute, several staples such as millets and castor
oil seed. India is the second largest producer of wheat and rice, the
world's major food staples. India is also the world's second or third
largest producer of several dry fruits, agriculture-based textile raw
materials, roots and tuber crops, pulses, farmed fish, eggs, coconut,
sugarcane and numerous vegetables. India ranked within the world's five
largest producers of over 80% of agricultural produce items, including
many cash crops such as coffee and cotton, in 2010. India is also one of
the world's five largest producers of livestock and poultry meat, with one
of the fastest growth rates, as of 2011

Contribution of Agriculture to the Indian economy

Agriculture is the backbone of the Indian economy. Despite major
emphasis on industrial development during the last four decades,
agriculture continues to occupy a place of pride in our economy.

36
The importance of agriculture can be brought out from the following
facts:

Share in national income

Although the share of agriculture in the total national income has been
gradually decreasing on account of the development of the secondary and
tertiary sectors, it still contributed about 18 % of nation income in 2012-
13.

Source of employment
In India, agriculture is the main source of employment. Even in 2011-12,
more than 56% of the total labour force of India is engaged in agriculture
and depend on it for their livelihood. It becomes evident from this fact
that other sectors of the economy could not generate enough employment
for the growing population.

Provision of foodgrains
In a developing country like India where a very large proportion of
income is spent on food and the population is increasing rapidly, the
demand for foodgrains has been increasing at a fast rate. Agriculture In
India has played an important role in meeting almost the entire food
needs of the people.

Supply of raw materials to industrial sector

Agriculture plays an important role in industrial development. Many
industries like cotton industry, jute industries, sugar industries, food

37
processing industries, etc. depends on agriculture for their raw material
requirements. Moreover, workers engaged in various industries depend
on agriculture for their food requirement.

Market for industrial product

Agriculture provides markets for a large number of industrial products.
Since about two thirds of India lives in rural areas, there is a large rural
purchasing power which has created a large demand for all types of
industrial products. Green revolution has considerably increased the
purchasing power of the large farmers substantially in the recent years.
Thus for the demand for various products like soaps, detergents, clothes,
cycles, scooters, radios, television, torches, lead batteries, etc. has
witnessed a marked increase. Likewise, the demand for a variety of
agricultural inputs like chemical fertilizer, tractors, pump-sets, pesticides
etc. has increased sharply. This has stimulated the development of
industries producing these inputs.

Earner of foreign exchange

Agriculture plays an important role in Indian economy as an earner of
foreign exchange through exports of agricultural commodities like tea,
cotton, coffee, jute, fruits, vegetables, spices, tobacco, sugar, oil, cashew
kernels, etc. in the past, export of agricultural products accounted for
about 70% of the export earnings of the country.

38
Significance for trade and transport
Agriculture helps in the development of tertiary (or service) sector. For
example various means of transport like roadways and railways get bulk
of their business from the movement of agricultural commodities and raw
materials. A significant part of internal trade constitutes mainly of
agricultural products.

Source of revenue for the government

Through the direct contribution of agricultural taxes to the central and
state governments is not significant, they get a significant part of their
total revenue in terms of land revenue, irrigation charges, taxes imposed
on the commodities purchased by the cultivators etc. central government
also earns revenue from export duties on agricultural production. Freight
charges imposed by Indian Railways for carrying agricultural product
generate huge revenue to the central exchequer.

39
Profile of a Branch
The Bank is a public Limited Company with a Representative
Board of Directors and a Chairman as Functional Head.
The Bank functions under the control of government and reserve
Bank of India and is Member of the India Bank Association a Body
Representative of Bank in India.
The functional executive of the administrative office regulates
monitor the functions of the various Branches situated in the country.
Another Branch of Vijaya Bank Limited is situated at Haranahalli
of main road branch. The branch are Managed by Managers, branches
falling in select areas are controlled by divisional managers, a zone
comprising of a member of division headed by senior Branch Manager at
the administrative office control and administrator division decision and
the bank introduced member method of withdrawing money as when
required called ATM. The persons having ATM card enter their number
and draw the required amount at any time.

Staff members
The Bank consists of 1 Senior branch followed by one Manager
and 2 Assistant manager and 8 Clerical Staff and 2 Peons in turn the
branches.
The branch functions with manager as the head with officers to
assist supervision and clerks and peon to carryout the work relating to the
business of the bank.

40
 The branches are provided with set rules and regulations in the
form of a manual of instructions, which normally govern’s the bank
function.
The bank has well equipped training center for training personal
working at the branches for effective implementation of the place on set
rules and regulations formed by the management from time for proper
control of the business of the branch to achieve co-origination to set for
the branch.
All the information are guide by Mr.Ravindra. By giving a special
reference to “A case study on financing of agriculture by Vijaya bank in
Shivamogga district -with special reference to Haranahalli branch.
The bank for effective co-origination among the staff for effective
functioning have a regular meeting to sort out the problems found by this
in carrying out their work.

41
 Organization of Branch

Senior Manager / Branch Manager

Assistant Branch Manager

Assistant Manager

Special Assistant

Clerks

Sub Staff

Sweeper

42
 CHAPTER 5
CONCEPTUAL BACKGROUND

 Introduction to the District

 Agriculture and Rural credit schemes of Vijaya Bank

43
 CONCEPTUAL BACKGROUND

This chapter with explanation with reference to various concepts relating

to Agricultural loan.

Introduction to the District

Shivamogga is essentially an agrarian district, with not just its economy
but its whole society being largely defined by the seasons and success of
agriculture. About 70% of the district’s work force is engaged in the
agricultural sector which contributes about 70% of the district’s income,
known the world over, historically, for its production and processing of
arecanut ( borne by the betel palm areca catechu), Shivamogga is also
the rice bowl of Karnataka. The other principal crops include Ragi,
Jowar and Maige; ground nut and sunflower, red Grtam and Bengal
gram; sugarcane, cotton and tobacco. Money varites of fruit, vegetables
and spices are also grown in the district. About two thirds of the area is
under cardals, potato and oilseeds occupying 4-5 % each. Different types
of crops are cultivated in different natural regions of the district, with
Bhadravathi leading in paddy and sugar cane, by virtue of its irrigational
strength, sugar being the first in arecanut production.

Its powerful sources and resources of water and irrigation have been
particularly responsible for the distinguished profile Shivamogga enjoys
in the agricultural sectors. In addition to the major rivers and streams ( A
whole heat of major, medium and minor) irrigation schemes, notably the
Bhadra reservoir project and the Tunga left and right Bank canals, have

44
been launched for harnessing them), numerous tanks, cannels, wells and
lift irrigation system plus substantial groundwater resources render the
district one of the best irrigated regions of Karnataka.

Because of increasing irrigation facilities, there is now a pronounced shift

from dry to wet crop cultivation, more rotation of crops, and cultivation
of multiple crops at the some time.
Agriculture and Rural credit scheme of Vijaya Bank
Kisan credit Card
Vijaya Bank is the pioneer in implementing credit card scheme for
farmers.

Purpose For meeting the cultivation needs of farmers and other

short term requirements including those of
subsidiary / allied activities and consumption needs.
Eligibility Individual farmers / joint borrowers/ partnership
firms/ private and public Ltd, companies who are
owner cultivators/ engaged in allied/ subsidiary
activities. Formers who are cultivating authorized
leased lands are also eligible. The farmer should not
be a defaulter of any financial institution.

Loans for Agri clinics/ Agri business centre for strengthening Transfer of
Technology and extension services in field of Agriculture.

Purpose For providing export services and advice to

farmers on cropping practices, technology

45
 dissemination, crop protection from pests and
diseases, market trend and prices of various
crops in the market, clinical services for animal
health.
Eligibility Graduates in Agriculture/ Horticulture/ Animal
Husbandry/ Forestry/ Dairy/ Veterinary poultry
forming/ Pisciculture – Individual/ Joint/ Firms/
limited companies.
Limit For individuals Rs 10 lakh for groups /
partnership firms Rs 100 lakhs

Minor Irrigation / Pump set loans

Purpose For purchase of electrical motors, oil engine,

submersible irrigation pump sets for irrigation of
agricultural pump etc, pipelines including
installation charges, installing generator sets, sector
pump sets, installation of drip/ sprinkler irrigation
systems, fertilizer mixers.
Eligibility Owner cultivators with minimum 2acres of land.
Loans can be considered for less than 2 acres area
provided, viability of the project is insured.

Form machinery loans

For strengthening transfer of technology and extension services in field
of agriculture.

46
Purpose For purchase of tractor, power tiller, trailers
combine harvester, grain these here, dusters,
ploughs, drills, mechanical welders or any other
modern agricultural machinery
Eligibility Farmers who sanctify the bank’s norms.

Farm development Loans

Purpose For digging/ deepening of wells, construction of

tanks, ponds, drilling of bore wells, soil and
water conservation watershed development
bundling land reclamation, leveling of land,
terracing, conversion of dry land into wet,
irrigable lands. Financing construction of form
haves and other allied activities.
Eligibility Farmer should be owner of the land.

47
Vehicle loan for Agriculturists

Purpose For purchase of brand new vehicles such as

bicycles, mopeds, two wheeler/ three wheeler
carriage/ jeeps, vans and other light motor
vehicles for supervising agricultural operation/
management of form/ estate and for
transportation of agricultural produce/ inputs,
vehicles may also be considered. purchase of
heavy vehicles such as lorries for big farmers
owning at least 15 acreas of perennially
irrigated land.
Eligibility Agriculturist cultivating his own land or
engaged in allied activities such as dairy,
poultry, sericulture, fish farming etc..

Loan for plantation crops

Purpose For establishment of estates, clearing of jungle,

conversion of barren land into cultivable land,
purchase of planting material, rejuvenation/
replanting
Eligibility Owner of the land who have experience
knowledge in the proposed activity.

48
Loan for Marine Fishers
Marine Fishers Purchase / Construction of mechanized fishing
vessels, fishing equipments working capital
requirement for voyages.
Inland Fisheries Construction / deepening/ widening/ delisting of
ponds. Purchase of fingerlings, equipments,
manures, feeds and labour inputs.
Eligibility Well experienced fish farmers with suitable land,
professional fishermen.

Loan for sericulture

Purpose For cultivation of mulberry, rearing of silk
worms, construction of reusing house purchase
of reaning equipments/ wire mesh/ disease free
laying (DFL)
Eligibility License permission from sericulture
department for rearing silkworms in the area,
wherever required, Technical assistance from
sericulture department or any other organization
dealing with sericulture development should be
available on continues basis.
Margin For limits up to Rs. 50000 % ¨Nil
For limits above Rs. 50000 % : 15-25 %.

49
Produce loan
Purpose To keep the produce is an approved go down or
warehouse or in farmers’ residence enabling
term to tell the produce for a better price of a
later date.
Eligibility 1. Farmers who have availed crop ;loan / Kcc
2. Formers who have not availed crop loan/
KCC.
Maximum Limit 3. Rs 10 lakhs per party within 12 months from
Repayment the date of grant.

Loan for cold storage and rural Godown

Purpose 1. For creation of scientific storage capacity
with allied facilities to store from produce,
processed farm produce and agricultural
inputs.
2. Promotion of grading standardization and
quality control of agricultural produce
prevention of districts sale, strong than
agriculture marketing infrastructure.
Eligibility Individuals/ farmers, group of farmers/ growing
partnership/ proprietary firms Ngo’s SHgs
companies, corporation co- operatives, agro
processing co- operative societies agricultural
produce marketing committee, marketing Board
and Agro processing corporation Growers
Associations.

50
Drip /Sprinkler Irrigation Loans

Purpose For purchase of drippers, pressure regulations

fitters, pipes accessories, fertilizers mixere and
pump sets. Constructing of overhead tanks and
installation of sprinkler irrigation units.
Purchase of water saving devices/ modern
irrigation equipment.
Eligibility Owners of land. Tenant cultivator com also be
considered.

Gold Land for Agricultural purpose

Objective To provide loans to farmers for various
agricultural purposes against the pledge of gold
Jewelleries.
Purpose To meet all form requirement of the farmers.
Loan quantum Maximum of Rs. 300000% subject to 80% of
the appraised values or pre gram limit specified
from time to time.
Repayment Within 12 months
Security Pledge for gold jewelleries.

Other loan products

The schemes mentioned above are only illustrative and not exhaustive.
We have other loan products also to supplement the farmer’s income. The
important once are
Tissue culture Lift Irrigation projects
Floriculture Piggery, Rabbit rearing, Bee keeping, Bullock cart
loans, Sheet, Goat rearing

51
Mushroom Bio gas plants
cultivation
Aquaculture Dealers of distribution of facilities are, seeds etc.
Exp[ort oriented Custom service units for maintaining fleet of
agriculture tractor, bulldozer, well boring equipments
Seed production Loans for farm forestry, Bio diesel, plants, tree
and processing borne oil seeds etc.

Documents to be produced by the applicant

1. Certified copies of record in respect of land owned
2. NOC / No DUC certificate from other financial institutions
wherever applicable
3. Two present size photographs.
4. Documents of title and other relevant documents wherever sanded
properties are taken as security.
5. Plant and estimate in respect of constriction/ deepening of wells,
proforma invoice/ quotation in case of machines vehicle etc.

Application form and loan procedure

 The application form as finalized by the RBI on the recommendation
of R. Gupta committee and the simplified form and lending
procedures for loans to agriculture and allied activities should be
adopted.
 Advance planning should be done by the branches to collect and
process applicant disbursement of loans for certain purpose such as
loan for land reclamation, lying of irrigation pipelines, form houses
etc, should be restricted to non monsoon / non cultivation periods so
as to percent by any possible diversion/ multi utilization of loans.

52
 So for as term loans are concerned banks should take steps to increase
the share of advances for minor irrigation and land development
purpose.
 The scales of finance for crop loans should be these worked out by the
technical committee of the respective district for the various crops
grown locally. The scale of finance to determined and approved by
the various crops grown locally.
 5.Thge crop loan should generally be decided into cash and kind
components. It should be ensured that the kind components is lifted
in kind and necessary payment mode directly by the bank. A list of
approved dealers may be maintained for this purpose.
 A branch should generally serve the population residing either within
the service are allotted to it i.e 16km from the branch.
 The detail guidelines being issued to the branches from head office/
regional office should be followed by the branch heads to facilitate
early sanction of loans for different purposes.

Asset sub classification codes (ASCC)

Standard assets are sub classified into following 4 stages
1. 1.Standard asset sub classification code -51
2. Standard asset sub classification code -52
3. Standard asset sub classification code -53
4. Standard asset sub classification code -54
All standard assets shall be classified under the following category
1. Sub standard assets (SS)
2. Doubtful assets : Cub classified code D1

53
 3. Doubtful assets : Sub classified code D2
4. Doubtful assets : Sub classified code D3

All doubtful assets during the third year on words have to be classified as
D3
The bank shall monitor the borrowed accounts on an on going basic,
based on various monitoring tools as ongoing in the following paragraphs
1. Stocks statements cum monthly select operational data [MSOD]
statement.
2. Periodical review return.
3. Credit monitoring system.
4. Midterm review [MTR]
a) MTR applicability
b) Exclusion from MTR
5. Assets sub classification code system [ASCC]
6. Quarterly/ half yearly operating system [QOS / HOS]
7. System is prevent deterioration in the standard assets, special
watch category borrowed accounts.

Review of loan sanctions made by each authority

1. Sanctions made at branch level and submission of related records
for review.
2. Sanctions made at regional office.
3. Sanctions made at consolidated office level.
4. Review of branch sanctions at regional office
5. Review made at consolidated office level.

Follow up and recovery of agricultural loans

Agricultural advances require more attention and supervision, content
personal contact will help in improving recovering performance. The
following are some of the steps to improve the recovery position of
agricultural advances.

54
I Regular periodical follow up inspection of securities in all loan
accounts as per guidelines should be conducted. Branch manager / AEO/
Office are permitted to collect payments from the borrower for inspection
or otherwise when the borrower for inspection or otherwise when the
borrower visits the bank. The following procedures should be followed in
such cases.
a) The borrower should be advised to call on the branch as for as
possible to pay installment / interest.
b) The borrower must be advised at the time of granting the loan that
every payment mode should be got entered in the loan pass book.
c) The manager /CEO officer on receipt of any part payment, should
make an entry in the loan pass book then and there it self and full
signature must be affixed against the entry.
d) In addition to making the entry in the passbook, a chalen with
counterfoil must also be prepared for the amount received and the
counterfoil duly signed has to be given to the borrower.

Initiating recovery measures

The guidelines issued by recovery wing, Ho in the matter of recovery and
follow up shall be hard to for agricultural loans also.
Compromise on time settlement: the guidelines issued by the recovery
wing Ho. In the matter of compromi8se/ OTs shall be followed in the
matter of agricultural loans also.
Procedures taken to make the NPA viable and loan recovery policy.

Objectives of loan recovery policy

55
1. Minimizing accretion of fresh NPAs
2. UP gradation of existing NPAs
3. Enforcement of securities as per provision of SARFASI ACT.
4. Enforcement of securities as per the terms of the loan documents ( in
respect of secured assets not covered under SARTASI act)
5. Recovery by compromise/ one time settlement
6. Recovery through legal action.
7. Invoking claims with ECGC/ CGTMSE
8. Minimizing provision by improving recovery.
9. Sale of NPAs to ARCs.
10. Sale/ purchase of NPAs to form banks / FIS/ NBFCs.
11. Implementation of / adherence to guidelines prescribed by the bank /
RBI/ Government from time to time.
Guidelines on review/ monitoring and follow uop of NPA accounts.
Elimination of non recoverable loans.

Methods of recovery
1. Minimizing accretion of fresh NPAs
a) Effective monitoring of the borrowable accounts.
b) Recovery of critical amount to avoid slippage.
c) Replacement of existing loan/ facilities, if the need is genuine.
d) Ensure timely renewal/ regularization of credit limitation
e) Ensure prompt as submission of stock statements.
2. Up gradation of existing NPAs
a) Up gradation of accounts by recovering the overdue amount.
b) Implementation of rehabilitation / restructuring package
permitted by BIFR/ CDR and ensures recovery as permitted.

56
c) Enforcement of securities as per the provisions of SARFAESI
act.
d) Enforcement of securities as per the loan documents
e) Recovery through compromise.
f) Settlement through compromise.
g) Invoking claim with ECGC/ CGISI
h) Sale of NPAs to asset reconstruction companies
i) Sale of NPAs to banks? FIs ?NBFCs.
j) Recovery through legal methods

57
 CHAPTER-6
DATA ANALYSIS AND INTERPRETATION

58
 DATA ANALYSIS AND INTERPRETATION

This chapter covers data analysis of the project work for which data
collected from survey of customers of Vijaya Bank.
Analysis based on the survey conducted gender of the respondents
Table-1
Table showing the gender of respondents
Gender No. of respondents Percentage
Male 80 80
Female 20 20
Total 100 100 %
Source: Survey data

Chart showing the gender of respondents

Interpretation
Above chart shows total 100 respondents were approached out of which
80 respondents are male and 20 respondents are women. The objective
behind this question is to know the total number of males and females
opting for on agricultural loan . This help in analyzing the different
opinion of the respondents.

59
 Table-2
Table showing the Occupation of respondents
Occupation No. of respondents Percentage
Agriculturist 80 80
Businessmen` 5 5
Employee 5 5
Others 10 10
Total 100 100%
Source : Field Survey
Chart showing the occupation of respondents.

Interpretation
The above chart shows that the occupation of the respondents. The more
number of respondents are dependent on agriculture i.e, 80% and the
20% of the respondents are businessman, and other occupations.

60
 Table-3
Table showing the educational qualification of the respondents
Education qualification No. of respondents Percentage
SSLC 30 30
PUC 60 60
Degree 10 10
Post Graduate 0 0
Total 100 100%
Source : Field survey
Chart showing education/ qualification

Interpretation
The above chart shows that education/ qualification level of the
respondents the respondents below SSLC are 30%. The graduate
respondents are 10 % and 60% of the respondents are PUC.

61
 Table-4
Age group of the respondents

Age of respondents No. of respondents Percentage

Below 30 5 5
30- 40 15 15
40-50 80 80
Above 50 0 0
Total 100 100%

Source : (Field Survey)

Chart showing the age of respondents

Interpretation:
The above chart shows that the age of respondents who have taken loans
from bank. The 5% of respondents are below 30 years of age, 15% of the
respondents are 43- -40 year and 80% of the respondents are above 40.

62
 Table 5
Showing the interest payable by Bank
Source : Survey result
Interest No. of respondents Percentage
High 0 0
Low 15 15
Medium 85 85
Total 100 100 %

Interpretation:
From the above survey only 15 persons say that the interest paid is low
and remaining 85 persons say that interest paid is medium.

63
 Table -6
Source of information of respondents about Vijaya Bank

Sources No. of respondents Percentage

Friends & relatives 50 50
News papers 0 0
Directly approached the bank 30 30
Other 20 20
Total 100 100 %
Source : field Survey
Chart showing the source of interpretation respondents have got
about the bank scheme

Interpretation
The above chart shows the sources where respondents come to know
about the bank’s agriculture lending schemes 50% 40% of the
respondents have got information from friends and relatives. 30 % of the
respondents had directly approached by the bank.
Table- 7

64
 Classification of family monthly Income
Income No. of respondents Percentage
Below 10000 95 95
10000 – 20000 5 5
20000 -30000 0 0
Above – 30000 0 0
Total 100 100%
Source : Survey Field

Interpretation:
The above table shows that below 10000 there are 95% respondent and
10000 to 20000 there are 5% from the income group of 20000 – 30000
there are 0%
The income group of below 10000 contribute the major portion.

65
 Table -8
Table showing the type of Farmers

Farmers No. of respondents Percentage

Small farmer 60 60
Marginal farmer 40 40
Total 100 100 %
Source : Survey Field

Interpretation:
From the above table it is clear that small farmer are 60% were are
marginal farmers are little less they are 40%.

66
 Table -9
Table showing service of banker
Service No. of respondents Percentage
Excellent 10 10
Good 40 40
Satisfactory 48 48
Bad 2 2
Total 100 100 %
Source : Survey field

Interpretation:
From the above respondents only 10 persons say that bankers service is
excellent and , 40% say the service is good and only 2 persons say that
banks service is bad.

67
 Table -10
Repayment period preferred by the customer
Basis No. of respondents Percentage
Monthly 90 90
Half yearly 5 5
Quarterly 0 0
Yearly 5 5
Total 100 100 %
Source : Survey field

Interpretation:
The above chart shows the repayment period preferred by the
respondents most of them have preferred to pay the loan amount on a
monthly basis only 5% of the respondents have preferred to pay the loan
amount on half yearly basis.

Table -12
Showing the nature of Income satisfaction

68
Nature No. of respondents Percentage
Yes 90 90
No 10 10
Total 100 100 %
Source : Field survey

Interpretation:
From the above chart shows that the 90% of persons says the income is
satisfaction and remain 10% respondents says the income is
unsatisfaction.

69
 CHAPTER-7
FINDINGS, SUGGESTIONS AND CONCLUSION

70
 FINDINGS, SUGGESTIONS AND CONCLUSION

In this chapter covers findings and suggestions of the project work

Survey Findings
 It is ascertained that 80% of the agriculture loan borrowers arte male,
where as only 20% are female.
 The trend towards agriculture as occupation has been decreasing in
the district. The percentage of older generation farmers are more in
agriculture field compared to the new generation.
 Most of the farmers are not educated, but they have got skills to do the
work in farm. They will work hard in the field and they will get more
income then the educated farmers.
 Table 5 reveals that interest paid by bank is low revealed by
agriculturist.
 The formers are investing lot of money in agriculture and they are
getting satisfactory income. Some time of harvest the price for the
crop will be less and they are to wait till they get good market price
for produce.
 Most of the people dependent on agriculture in our country. Hence
government has been announcing many agricultural scenes to help
the farmers but still some people are neglected it.
 The farmers delay the repayment of the loan because they wait till the
announcement of the government programs such as loan waiver
special subsidy etc.
 The most of the respondents use to compare the various schemes of
banks and interest rate on loan with other banks and then they will
decide to avail loan from bank.

71
Suggestions
 The bankers should adopt more liberalized procedures in order to
extend more loan facilities to the needy borrowers there by achieve
good process.
 The bank must consider the needs and various aspects of agricultural
developments keeping in view these issues the bank should give more
amount of loan.
 The banker should be more vigilant as regards to recovery and should
take effective steps and recover the amount on the due date.
 The banker should also keep some tempo in future and if possible the
bank should simplifies the procedure in sanctioning the loan so that
the loan is sanctioned in the minimum days.
 Since the loans are sanctioned to the small, medium and big land
holders keeping in view their capacity of repaying the loan amount.
 The bankers should adopt more scientific methods in recovering the
loan in the interested of the farmers.
 Rate of interest on deposit should be increased to attract the
customers.
 Interested on loan has be reduced in priority sectors and it is available
to get some amount of income from other sources.
 The banker should and give necessary information to their customers
art a special scheme.

Conclusion

The study on agricultural finance in Vijaya bank was under taken to

analyze how the agriculturist gets financial help from the international
source. It is an attempt made about now best. The rural people utilize the

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credit facilities. The study reveals problems that arte faced by the
agriculturist and suggest remedies for the some.

This project attempted to know the agriculture finance practices by

Vijaya Bank. Over the years there has been substantial growth in
agriculture, to the credit requirement, bank has tailored different types of
loan schemes the agricultural financing includes financing to irrigation
purposes, fisheries, horticulture, farm house, land developments, crop
loan for storage and allied purposes etc.

This report suggest improvement in some areas of agriculture loan which

is suggested by the customers, most of the customers have mentioned
that interest rate of the bank is high. Bank should speed –up the sanction
of loan amount.

Vijaya bank being a public sector Bank is under the process of

development to achieve greater heights. The technology platform has
helped the bank to provide whole range of services to satisfy the
customers.

The study reveals that the Vijaya bank fulfilled the activities of providing
financial assistance to agricultural people the survey reveals so that the
agricultural people face some problems in getting loans and they suggests
many measures to over come these problems if they suggestions in the
may be in position to help in a better was not only customer but also
itself better future.

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 Questionnaire
Sir / Madam
I am student of Final Year BBM in ATNCC Shivamogga. I am
conducting the survey of “Financing of Agriculture by Vijaya Bank in
Shivamogga District” – with special reference to Haranahalli Branch. So
please help me by filling this questionnaires.

Thanking you
Yours Faithfully

Pavithra .D
1. Name :
2. Address :
3. Age :
a) 15- 30 []
b) 31- 45 []
c) 45 – 60 ` []
d) Above 60 []
4. Gender
a) Male []
b) Female []
5. Marital status
a) Married []
b) Unmarried []
6. Educational background
a) SSLC [ ]
b) PUC []
c) Degree [ ]
d) Other []
7. Family Monthly Income
a) Below Rs 10000 []
b) 10000-20000 []
c) 20000-30000 []
d) Above 30000 []
8. Occupation

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 a) Agriculturist [ ]
b) Business man [ ]
c) House wife []
d) Employee []
9. Do you know about Vijaya bank?
a) Yes []
b) No []
10.How did you come to know about this bank?
a) Friends [ ]
b) relative [ ]
c) brokers [ ]
d) Others [ ]
11.Type of farmers
a) Small farmer []
b) Marginal farmer []

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12.Service provided by branch is
a) Excellent []
b) Good []
c) Satisfactory []
d) Bad []
13. What type of loan are provided to farmer and by bank?
a) Short term []
b) Long Term []
c) Medium term [ ]
d) Al these []
14. Is the rate of interest on agricultural firming is
a) High []
b) Medium []
c) Low []
15.How long you have been a customer of Vijaya Bank?
a) 1 year []
b) 1 to 3 year [ ]
c) Above 3year [ ]
16. What is the mode of repayment of loan?
a) Monthly [ ]
b) Half yearly [ ]
c) Quarterly [ ]
d) Yearly [ ]

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17. Is agriculture finance given by Vijaya Bank is
a) Adequate []
b) More [ ]
c) Less [ ]
18. Do you think loan given to agriculturist is profitable?
a) Yes []
b) No [ ]
19.Your opinion about the service at the staff
a) Excellent []
b) Good []
c) Poor []
20 Rate of Interest is ?
a) Satisfactory [ ]
b) Unsatisfactory [ ]
21 What is opinion about punctuality of staff ?
a) Excellent []
b) Good []
c) Satisfactory []
d) Bad []
22 Your suggestion
___________________________________________

Date : Signature
Place :

BIBLIOGRAPHY

BOOKS
 Indian Economic By: B.S.Raman

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 Theory of Banking By: B.S.Raman
 Annual report of Vijaya bank

E-source:
www.google.com
www.vijayabank.com

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