Industry Profile Banking Industry in India:: Study On Agricultural Credit Facility of Canara Bank

STUDY ON AGRICULTURAL CREDIT FACILITY OF CANARA BANK
CHAPTER 1
INDUSTRY PROFILE
Banking Industry in India:-

The world economy today is driven by the way the banks in the world perform. The
economical position of the country is also driven by the performance of banks. Banks, by
extending their services to areas hitherto untouched and making themselves accessible to the
common man, have become a part of our lives. The banking institutions in the past performed
very limited functions such as receiving deposits against bank notes and then issuing notes in the
country, as the time advanced and with the progress of commerce and industry, the scope of
banking also expanded. Modern banking institution is a large corporate giant with large
resources and a vast field of activity. Since the nationalization of some big commercial banks in
India in the year 1969, there has been a great surge of banking industry throughout the world
with the growing number of banking offices. The banking business today has become highly
critical and competitive between various classes of banks in offering a greater variety of services
nationally and internationally. With globalization setting in, banks are also modernizing
operations with a view to satisfying modern customers with an aim to improve bank operations
with a view to maintain high standard banking system that involves applications of better
management techniques. In India, class banking has given way to mass banking, bringing in its
fold very large number of customers. Banks are now looked upon as development agents instead
of purveyors of credit to the large industries and big business companies. Apart from providing
credit to trade, industry and agriculture it is also involved in offering pension for retired
employees, government servants and collection of utility bills.
The Indian banking system can be classified into nationalized, private and specialized banking
institutions. The industry is highly fragmented with 30 banking units contributing to almost
50%of deposits and 60% of advances. The Reserve Bank of India is the foremost monitoring
body in the Indian Financial sector.
Department of M.B.A, AIT, Chikmagalure Page | 1

It is a centralized body that monitors discrepancies and short comings in the system. Industry
estimates indicate that out of 274 commercial banks operating in the country, 223 banks are in
the public sector and 51 are in the private sector. These private sector banks include 24 foreign
banks that have begun their operations here. The specialized banking institutions that include
cooperatives, rural banks, etc. form a part of the nationalized banks category
The Indian banking system is financially stable and resilient to the shocks that may arise due to
higher non-performing assets (NPAs) and the global economic crisis, according to a stress test
done by the Reserve Bank of India (RBi). Significantly, the RBI has the tenth largest gold
reserves in the world after spending US$ 6.7 billion for the purchase of 200 metric tones of gold
from the International Monetary Fund (IMF). The purchase has increased RBIs share of gold
holdings from approximately 4% to 6%.In the annual international ranking conducted by UK-
based Brand Finance Plc,20 Indian banks have been included in the Brand Finance Global
Banking 500. The State Bank of India has become the first Indian bank to be ranked among the
Top 50 banks in the world, capturing the 36th rank, as per the Brand Finance study. The brand
value of SBI increased from US$ 1.5 billion in 2009 to US$ 4.6 billion in 2010.ICICIBank also
made it to the Top 100 list with a brand value of US$ 2.2 billion. The total brand value of the
20Indian banks featured in the list stood at US$ 13 billion.

Following the recent financial crisis, new deposits have gravitated towards the public
sector banks. According to RBI's 'Quarterly Statistics on Deposits and Credits of Scheduled
Commercial Banks :December 2009, nationalized banks, as a group, accounted for 50.9% of the
aggregate deposits, while State Bank of India and its associates accounted for 23.4%. The share
of other scheduled commercial banks, foreign banks and regional rural banks in aggregated
deposits were 17.1%, 5.5% and 3% respectively. With respect to gross bank credit,
nationalized banks hold the highest share of 50.6% in the total bank credit, with SBI and its
associates at23.8% and other scheduled commercial banks at 17.8%. Foreign banks and regional
,rural bank shad a share of 5.3% and 2.5% respectively in the total bank credit.
The confidence of non-resident Indians (NRIs) in the Indian economy is reviving again.
NRI deposits have increased by nearly US$ 47.8 billion on March 2010, as per the RBIs June
2010 bulletin. Most of this has come through Foreign Currency Non-resident (FCNR) accounts
and Non-resident External Rupee Accounts. Foreign exchange reserves were up by US$ 1.69
billion to US$ 272.8 trillion, for the week ending June 11, on account of revaluation gains.
June 21,2010

CHAPTER 2
COMPANY PROFILE
CanaraBank :
A good bank is not only the financial heart of the community, but also one with an obligation of
helping in every possible manner to improve the economic conditions of the common people
2. a. BACKGROUND AND INCEPTION OF THE COMPANY

Canara Bank was founded by ShriAmmembalSubbaRaoPai, a great visionary and philanthropist,
in July 1906, at Mangalore, then a small port in Karnataka. It was started as 'Canara Bank Hindu
Permanent Fund’s in 1906. This small seed blossomed into a limited company as' CanaraBank
Ltd .' in 1910 with its head office in Bangalore. The Bank has gone through the various phases of
its growth trajectory over the hundred years of its existence. In1958, the Reserve Bank of India
(RBI) ordered Canara Bank to acquire G. RaghumathmulBank,in Hyderabad. This bank had
been established in 1870, and had converted to a limited company in 1925. At the time of the
acquisition the bank had five branches. The growth of Canara Bank was phenomenal, especially
after nationalization by the Government of India along with 13 other major banks in the country
in the year 1969.It has attained the status of a national level player in terms of geographical reach
and clientele segment . In 1976, Canara Bank inaugurated its 1000th branch.
Eighties was characterized by business diversification for the Bank. In the year 1985 Canara
Bank opened its first overseas office in London and also established a subsidiary in Hong Kong,
Indo Hong Kong International Finance Ltd and opened its third foreign branch, this one in
Shanghai. It has established in the areas of mutual funds, venture capital and factoring .It is the
First Bank to be conferred with ISO 9002 certification for one of its branches in Bangalore and is
the maiden bank to start Initial Public Offering (IPO). It has launched internet and
mobile banking services.

In June 2006, the Bank completed a century of operation in the Indian banking industry. This
event full journey of the Bank has been characterized by several memorable milestones. Today
,Canara Bank occupies a premier position in the comity of Indian banks. With an unbroken
record of profits since its inception, Canara Bank has several firsts to its credit. These include
 Launching of Inter-City ATM Network

 Obtaining ISO Certification for a Branch
 Articulation of Good Banking Bank’s Citizen Charter
 Commissioning of Exclusive Mahila Banking Branch
 Launching of Exclusive Subsidiary for IT Consultancy
 Issuing credit card for farmers
 Providing Agricultural Consultancy Services
Over the years, the Bank has been scaling up its market position to emerge as a major 'Financial
Conglomerate' with as many as nine subsidiaries/sponsored institutions/joint ventures in India and
abroad
 Can fin Homes Limited

 Can bank Factors Limited
 Can bank Venture Capital Fund Limited
 Can bank Computer Services Limited
 Gilt Securities Trading Limited
 CanaraRobeco Asset Management Company Limited
 Can bank Financial Services Limited
 Canara HSBC Oriental Life Insurance Company Limited
As at March 2010, the Bank has further expanded its domestic presence, with 3043 branches
spread across all geographical segments. Keeping customer convenience at the forefront, the
Bank provides a wide array of alternative delivery channels that include over 2000 ATMs- one
of the highest among nationalized banks- covering 728 centers, 1959 branches providing Internet

and Mobile Banking (IMB) services and 2091 branches offering' Anywhere Banking' services.
Canara bank made a partnership with UNEP to initiate a successful solar loan program. It was a
four-year $7.6 million effort, launched in April 2003 to help accelerate the market for financing
solar home systems in southern India.
Canara Bank had a major IT initiative to network all branches and move them to a single
software platform. Canara Bank chose Flex cube from I-flex solutions as the application. The
Bank entered into an agreement with IBM for rolling out flex cube to over 1000 branches as part
of Phase I. The all India network of Canara Bank boasts of multiple branches in all the
major cities like Chennai, Pune , Bangalore, Mumbai, New Delhi, Gurgaon , Kolkata, Lucknow
and Hyderabad. The Canara Bank official site gives us an ATM and branch locator that can give
you the exact location and address of your nearest Canara Bank branches and ATM's
2. b. NATURE OF THE BUSINESS CARRIED

Canara Bank is a Public Sector Company undertaking which is running under the Administrative
Control of Govt of India. The total share capital is Rs 410 crores of which government capital is
300 crores, others Rs 110 crores and, the total business of the Bank reached 403,986 crore.
Canara Bank was ranked at 1299 in the Forbes Global 2000 list.
Canara bank offers its services to the industry, NRI’s and all the classes of people such as
Personal Banking, Corporate Banking, NRI banking, Priority credit and other services etc. It has
come to the forefront of the commercial and financial services and established a leadership in the
financial services. The Bank has also carved a distinctive mark, in various corporate social
responsibilities, namely, serving national priorities, promoting rural development, enhancing
rural self-employment through several training institutes and spearheading financial inclusion
objective.

2. c. VISION , MISSION AND QUALITY POLICY
VISION
“To emerge as a Best Practices Bank by pursuing global benchmarks in profitability, operational
efficiency, asset quality, risk management and expanding the global reach.”
MISSION
“To provide quality banking services with enhanced customer orientation, higher value creation
for stakeholders and to continue as a responsive corporate social citizen by effectively blending
commercial pursuits with social banking”.
QUALITY POLICY
 To remove Superstition and ignorance.
 To spread education among all to sub-serve the first principle.
 To inculcate the habit of thrift and savings.
 To transform the financial institution not only as the financial heart of the community but
the social heart as well.
 To assist the needy.
 To work with sense of service and dedication.
 To develop a concern for fellow human being and sensitivity to the surroundings with a
view to make changes/remove hardships and sufferings

2. d. PRODUCTS AND SERVICES OF CANARA BANK

(Table 1)
Personal Banking Corporate Banking NRI Banking Priority and SME
Credit
Savings and Deposits Account and deposits Deposits Products Schemes
Loan Products Cash Management Loan and Advances SME Business
Service
Technology Product Loan and Advance Remittance Facilities RRB Division
Mutual Funds Syndication Service Consultancy Service Agri- Marketing
Insurance Business IPO Monitoring Other Service Agri – Consultancy
Activity
International Service Merchant Banking Rural Development
Service
Card Service TUF schemes Social Banking
Consultancy Service Canara e-tax CED for Women
Depository Service One time settlement
for M and S E
Ancillary Service

Personal Banking (Table 2)
Deposits 2 Loan products 3Credit service 4Consultancy

Current account Housing loan Cash credit for Tax assistance
working capital service
Fixed deposits Home improvement loan Bill discounting Trustee service
private and charitable
Recurring deposits Canara cash (shares) Bank guarantee Debenture trusteeship
Kamdhenu deposits Canara mobile vehical Loan for SME’s Security trusteeship
Canara Flexi Deposit Canara site loan Finance to SSI’s Attorney ship
Savings bank gold Teacher’s loan Agricultural loan Estate and will
service
Canara champ Canara budget-Personal
deposit scheme loan
Canarasaral savings Canara pensions
account
Canara tax saver Canara rent
scheme
Ashraya deposit Canara Trade
scheme
Canara bank Auto Canara mortgage
Renewal deposit
Canara super savings Doctor’s choice
salary account
Savings Deposits Education loan
Swarna loan
5 card service 6 Mutual funds 7Ancillary service 8 Other service
Canaravis a classic CanaraRobecoMFproduct Safe deposit lockers Insurance (life and

general)
Canara global gold Safe custody Technology
card services products(ATM)
Canara corporate 7day banking Depository service
DD shoppe
Extended banking
hrs
Corporate Banking (Table 3)
Account and deposits Cash management Loans and advances Other service
service
Current deposits Super fast service Term loans Canara e-tax
Fixed deposits Bulk collection Gold card scheme for TUF scheme
service exporters
Kamdhenu deposits Fast track service Infrastructural Merchant banking
financing service
Recurring deposits Working capital IPO Monitoring
finance activity
Export finance Syndication service

NRI Services (Table 4)
Deposits Loans and Remittance Consultancy Other service

products advance facilities service
NRE (non- Housing loan CAN bank remit NRI consultancy Safe custody
resdident money scheme
external rupee)
account
NRO(non- Home Bank Western Safe deposit
resident improvement union remittance locker
ordinary) loan scheme
account
FCNR (foreign CAN jewel Swift Nomination
currency non facility
resident) account
CAN cash Rupee drawing Investment
(shares) arrangement
CAN mortgage Attorney ship
service
CAN mobile NRI service
(vehicle) centre
CAN site Facilities for
Returning
Indians
Loan against
deposits

Priority Credit Finance (Table 5)
Agriculture and Education loan and RRB Division Rural Others

rural credit scheme other priority sector Development
loan scheme
Kisan credit card Loan for students Pragatigrameen Rural clinic GOVT.
bank service Sponsered
scheme (SJSRY
and SGSY)
Loan for agri-clinics LaghuUdyami South Malabar Rural service Lead bank
credit card scheme Gramin bank Volunteer scheme initiative 26 dist
Minor irrigation Loan for retail ShreyasGramin Jalyoga scheme SME Business
loan traders bank unit
Farm development Loan for solar HarikalyanaYojna SEM marketing
loan Water Heating unit
system
Gold loan for Direct financing to Rural Resources Agri-Business
agricultural purpose SHG’s Development Marketing Unit
KisanTatkal Lending to MCG’s Mobile Sale Van Agri-
(for helping Consultancy
women service
entrepreneur in
marketing)
KrishiMitra cards Finance to CED for women
scheme NGO/MFI for on
lending to SHG
General credit card Social Banking

2. e. AREAS OF OPERATION
Over the years, Canara Bank has a reputation as a top quality service provider to its customers
and it believes in the centricity of its customers. Canara Bank of India has a network of
3046 branches, spread over 25 States/4 Union Territories of the country .It has its Head office in
Bangalore along with 34 circle offices and 1 international division. The bank also has
international presence in several centers, including London, Hong Kong, Moscow, Shanghai
,Doha, and Dubai. In terms of business it is one of the largest nationalized commercial banks in
India. Canara Bank has international division which supervises the functioning of its various
foreign departments to give the required thrust to foreign exchange business especially exports
and to meet the requirements of NRI’s
2. f. OWNERSHIP PATTERNS
The board consists of a whole time Chairman and Managing Director and two executives
director and one director representing Govt. of India and one representing Reserve bank of India
and four part times Non-official Director. Canara bank is a public sector undertaking
(PSU),73.17% of its share his held by Govt. of India and mutual fund/other institutions 5.75%
private corporate bodies 3.33% and public ownership is 17.75%. The bank is listed NSE, BSE
and Bangalore Stock Exchange

Ownership Pattern of Canara Bank (Table 6)

Category Number of shares %of equity
Promoters central govt./state govt 300000000 73.17
Institutional Investors
Mutual funds/UTI 8070610 1.96
Financial institutions 420940 0.10
Insurance companies 31064973 7.58
Foreign Institutional Investors 47581514 11.61
Non institutions Bodies corporate 1983985 0.48
Individuals –Individual shareholders 2006041 4.89

holding
nominal share capital uptoRs. 1 lakh.
Individual shareholders holding nominal 489984 0.12

Share capital in excess of Rs. 1 lakh
Trusts 5560 0.00

Clearing Members 74085 0.02
Non-resident
India 252308 0.06
Total 410000000 100

Ownership pattern of Canara Bank

central/state Govt. mutual funds/UTIs financial instn./Insurance cos Foreign Instnl. Investors
Bodies corporate Indian public NRI/OCB Trusts
(figure 1)
0% 0%
0%
5%
12%
central/state govt
mutual funds/uti
8% financial instn/insurance cos
foreign instnl,investors
3% bodies corporate
indian public
NRI/OCB
72% Trusts

2. g. COMPETTIORS INFORMATION
1 State Bank of India:

The State Bank Group, with over 16000 branches, has the largest branch network in India and the
bank has 141 overseas offices spread over 32 countries. State Bank of India is one of the Big
Four Banks of India with ICICI Bank, Axis Bank and HDFC Bank.The State bank of India is
29th most reputable company in the world according to Forbes. The products of the bank are
Loans Credit Cards, Savings ,Investment, vehicles, SBI Life Insurance etc
2 ICICI Bank:
It is India's largest private sector bank by market capitalization and second largest overall in
terms of assets. The Bank also has a network of 1,640 branches and about4,816 ATMs in India
and presence in 18 countries, as well as some 24 million customers. ICICI Bank offers a wide
range of banking products and financial services to corporate and retail customers through a
variety of delivery channels. ICICI Bank is also the largest issuer of credit cards in India.
3 Bank of India:
It was established on 7 September 1906 is with its headquarters in Mumbai. Government-owned

since nationalization in 1969, It is one of India's leading banks, with about 3101 branches
including 27 branches outside India. Bank of India is a founder member of SWIFT (Society for
Worldwide Inter Bank Financial Telecommunications) in India which facilitates provision of
cost-effective financial processing and communication services.

2.h. INFRASTRUCTURAL FACILITY
 Canara bank is located in the centre of the city where the bank has multi-floor building
where it has separate partition for all the departments.
 The bank is fully computerized and well furnished with air condition facility to the
employees
 The bank provides medical facilities to its employees
 It also provides educational facility to the employees and their children.
 The bank also provides vehicle faculty or traveling allowances to their employees
 The bank also has provided with quarters facilities to its employees (officers).
 The bank has established its own training centre to develop the employee knowledge,
skill & attitude.

2.i. Organization Structure of Canara Bank (figure 2)
Board of Directors
Chairman
Managing Director
Executive Director
General Manager
Deputy General Manager
Assistant General Manager
Chief Manager
Senior Manager
Manager
Officers
Clerical Staff
At tenders

Work Flow Model For Loan Section (figure 3)
Account holder
Request for loan to the

Branch
Approval /Rejection by the

Branch / C.O/ H.o
Figure 3 :- The loan sanction process
The bank has a two way approach in its work flow pattern. Let’s consider a loan sanction model
,the person who requires the loan needs to fill an application and submit it to the
respective branch authority. Each branch has certain limitations regarding the loan amount; bank
needs to check the authentication of the details and information produced by the party. Loan can
be sanctioned only if the securities pledged are valid and are free from legal considerations.
The loan is sanctioned by the bank authorities if the requirements are fulfilled; else if the loan
mount is exceeding the limits of the branch, the request is forwarded to the circle office or
the23head office. The circle or the head office verifies and approves or rejects the proposal. The
order (approved/rejected) is sent back to the respective branch, and hence sent to the person. The
figure above provides a clear understanding of the same

2.j. AWARDS/ACHIEVEMENTS
 First National Award, instituted by the Ministry of Micro, Small & Medium Enterprises,
Govt. of India for 'Excellence in Micro & Small Enterprises (MSE) Lending 'for 2006-07.
 Golden Peacock Award for Corporate Social Responsibility for the year 2007. Canara Bank is
the first PSB to receive the award since its institution in the year 1991.
 Golden Peacock National Training Award-2007 instituted by the Institute of Directors, New
Delhi, a pioneer in Quality Revolution.
 Conferred the Business Super brands Status for 2008.
 The Organization of the Year Award- for PR Excellence instituted by Public Relations
Council of India.
 Excellence in the field of Khadi& Village Industries in South Zone for the year 2006-
07,instituted by Khadi& Village Industries Commission, Ministry of Micro, Small &
Medium Enterprises, Government of India.
 Received during 2008-09Conferred First Rank in India s Best Banks awards under the
category Strength and Soundness for 2006-07 by a survey conducted by Ernst & Young.
 Best Performing Bank under Rural Employment Generation Programme , (REGP) of Khadi
and Village Industries Commission (KVIC), in South Zone for the year 2007-
08,instituted by the Ministry of MSME, Government of India
 . Golden Peacock National Training Award 2008 for excellence in training.
 Global HR excellence in Training , an award conferred by the Asia Pacific HR Congress ,the
largest rendezvous of HR Professionals, at its Employer Branding Talent Management
Congress held on 22nd and 23rd August 2008, Delhi.
 Best Corporate Social Responsibility Practice Award, instituted by BSE, NASSCOM and
Times Foundation
 The Bank won two Silver Corporate Collateral Awards for Best Corporate Ad in the Print
Media and Best Corporate Film on Corporate Social Responsibility at the Public Relations
Council of India Awards 2009.

 Best Bank in South Zone Award for the year 2008-09 in respect of lending under KVIC and
PMEGP Schemes. The award was handed over by Dr.Manmohan Singh, Honorable
Prime Minister of India
 The Bank received the Credit Guarantee Approval Certificate issued by CGTMSE from
ShriPranab Mukherjee, Honorable Finance Minister of India
2.k. FUTURE GROWTH AND PROSPECT

 The Bank aims to reach an aggregate business figure of Rs.5 lakh crore, comprising total
deposits of Rs.285000 crore and advances of Rs.215000 crore.
 The Bank will continue to focus on core business, with the objective of
augmenting profits and profitability.
 Expanding global footprints, the Bank is likely to open a Representative Office at Sharjah
shortly in addition to RBI approval already obtained in 9 international centres.
 Targets to achieve 100% CBS coverage by June 2010
 The Bank has plans to open over 200 new branches during FY2011

CHAPTER 3
McKINSEY’S 7s FRAMEWORK
The Mckinsey’s 7s plays a vital role for the success of any organization. There are hard and soft
components. The figure below shows the frame work (.Figure. 4: Mckinsey’sFramewok)
STRUCTURE
STRATEGY SYSTEM
URE
SHAREDVALUE
SKILL
STYLE
STAFF
1 Structure
The design of organizational structure is a downward communication of information in the bank.
The information flows top down, i.e. from top-level management to lower levels. The chairman
and managing director have the sole authority in the organization. They give instructions to the
executive director and the general manager who in turn give instructions to the lower level
managers. The middle level management consists of general manager and company secretary.
Among these departments the General Manager division is very large .It consists of many
sections and sub sections. All sectional heads will communicate or report their
sectional performance or activities regularly to the general manager.

2 Skills
The important software for the success any organization is the skills of the
employees & of the management. The Canara bank is having highly skilled employees. The
skills of the organization are
Credit Skills:
They face the challenges in improving the asset quality suitable training programs for upgrading
the appraisal & credit monitoring skills, pre-sanction & post-sanction supervision, including
monitoring of stocks, financial statements, etc., will be provided. The rigor of NPA discipline &
provisioning will only increase in the days to come & they have to equip themselves for this task.
Technology Skills:
Canara bank is having a very good brand equity & loyalty of customers. Bank has already
introduced product like, Tele-Banking, credit cards, ATMs etc., cross selling of other financial
services like insurance, mutual funds, government securities. Increasing non-funding come,
personal segment advances & trades finance in order to improve the profitability & to make
growth in business volumes more sustainable .Importance has also been given to areas like low
cost deposits, NPAs/AUCs recovery & reduction in operating expenses to improve efficiency of
their operations.
Operating Skills:
Bank has to increasing non-fund income, personal segment advances & trades finance in order to
improve the profitability & to make growth in business volumes more sustainable.
Importance has also been given to area like low cost deposits, reduction in operating expenses
taken sufficient measures to identify measure, monitor & manage various risks associated with
the Banking business in the areas of credit, interest rate & liquidity

3 Style
The style of an organization according to the Mckinsey framework becomes evident through
the pattern of actions taken by members of top management team over a period of time.
Leadership Style in Canara Bank
It has been observed in the Canara bank that the behavior of superior towards the subordinate
is pleasant. They motivate fresher who are working under them. The superior tells subordinates
what exactly he has to do. The object of the work is clearly defined to them. Otherwise the
superior councils the subordinate, superiors who act as leaders conduct meetings,
discussions, presentation etc, on regular basis and take suggestions and ideas given by
subordinates. The leader takes the final decisions only. This style of leadership is called
conservative leadership
4Strategy
Strategy indicates a specific program of action for achieving the organization objectives by
efficiently employing the firms resources. It involves preparing oneself for meeting unforeseen
factors. It is also concerned with meeting the challenges posed by the policies and actions
of other competitors in the market. The policies are operational efficiency , asset quality, and
also in risk management
5 Systems
Training System :
The Bank under various categories were imparted training in diverse functional areas such as
assets liability management, consumer credit, housing finance, retail finance Recovery, trade
finance. The Bank adopts its own training system with the help of their training centers. Training
mainly helps with updating skills, knowledge improvement etc

Technology System:
The bank has initiated business process re-engineering with an effort to stay at the top in the
competition. It has enabled Core-Banking Service, has its own Cheque Processing unit, and has
initiated installation of ATM’s in all the areas. The Bank has taken necessary steps to implement
structured financial messaging system(SFMS) a modularized software solution for financial
message communication in a highly secured environment.
Recruitment & Selection System:

The sources of recruitment at the organization in the form of both external & internal. The Bank
follows the recruitment & selection processes that are commonly followed by public sector
Banks.
Systems and Procedures:
Many systems and procedures in the Bank were received re-oriented and simplified during the
year without diluting any controls. Noteworthy among the initiatives were revision/updating of
all ten credit manuals, rationalization of entire applications in retail lending schemes,
simplification of documentation against valuable securities, rationalization of printing supply
and usage of forms, pilot implementation of single window system at select branches revision of
DD payment procedures & streamlining of procedures or scanning of signature at branches
6 Staff
The bank is motivated to harness the unique assets of the human resources for growth of the
institution and to imbibe team spirit for self and mutual development among bank’s staff.
The bank has made inroads towards establishment of quality circle concept among its employees.
Training & Development Canara bank has been a fore runner in establishment of its own training
college at Bangalore,supported by 13 regional training centers spread over length & breadth of
the country. These centers take care of knowledge, skill & attitudinal development of the
employees.

7 Shared values
 Improve market share on rural & semi-urban markets.
 Increase number of performing branches and eliminate below performing branches.
 To develop competent and vibrant human work force.
 To develop the competencies and skills of the employees through training (Internal
&external) and other HRD measures.
 To improve the work environment in the bank through welfare measures and healthy
Industrial relations.
 To encourage employees to share knowledge and information about the various activities
in the bank through the House Magazine and other publications.
 To encourage employees for implementation of office language in their day to day work.
 The wing will continually improve all the processes involved during the performance
of the above functions for Total satisfaction of customer´ (Internal) by implementing
quality management system requirements of all personal of the Bank as
per IS/ISO9001:2000

CHAPTER 4
SWOT ANALYSIS
The bank had envisioned to not only offer financial services but also fulfill social causes
such as removal of superstitions and ignorance, promotion of habit of saving, providing
assistance to the people in need and develop a sense of humanity among the people.
Strengths
 It is the first bank in India to have launched Inter-City ATM network

 It is the first bank to have been awarded ISO Certification for providing credit card
for farmers for the first time in India along with offering Agricultural Consultancy Services
 It has established more than 3500 branches across the nation as of March of 2010.
 it has the maximum number of ATM installations among all the nationalized banks
summing up to more than 2000 of them at 698 centers
 1959 branches of the bank provide Internet and Mobile Banking (IMB) services
 Anywhere Banking services are being provided at 2091 of its branches
 All the branches of Canara Bank are enabled with Real Time Gross Settlement (RTGS)
and National Electronic Fund Transfer (NEFT) transaction facilities
 Bank also offers Personal Banking Services, Corporate Banking Services, NRI
 Banking Services and Priority & SME Credit Services
Weakness
 Still sticks to most of the traditional banking systems

 Requires training program due to introduction of many new schemes & technologies
 Weak research team
 Staff take time to get adjusted to the new inventions
 It provides less facilities to the employee when compare to other banks

Opportunities
 To improvise on mutual funds, to lead the banks into MF transactions

 To adapt to the new technological inventions, to stay at the top in the competitive market
 To provide enough training facilities to the staff, to deliver efficient & effective services
 To provide extra privileges to the customers to maintain & retain customers
 To attract customers with good loan offers at very impressive rates, against the
competitors.
 To be aware of the changes in the market, & provide space for instantaneous changes
 Conducting road shows twice or trice in a year under head office guidance in circle office
to promote banking products to customer
Threats
 Establishment of private banks, increasing the competition

 Introduction of new technologies in the new banks with high infrastructure
 Innovative interest rates & attractive customer care services by other banks
 Adoption of many technologies & banking systems from abroad
 Very efficient research team, who are always tracking the new inventions in the market
 Most of the private banks provide 24hrs facility

CHAPTER 5
Financial statement
Ratios ForCanara Bank (Table 7)

Mar' Mar'
12 11
PER SHARE RATIOS
Adjusted E P S (Rs.) 74.08 90.87
Adjusted Cash EPS (Rs.) 77.62 94.28
Reported EPS (Rs.) 74.10 90.88
Reported Cash EPS (Rs.) 77.64 94.29
Dividend Per Share 11.00 11.00
Operating Profit Per Share (Rs.) 76.06 89.40
Book Value (Excl Rev Res) Per Share 465.57 405.00
(Rs.)
Book Value (Incl Rev Res) Per Share 512.19 452.37
(Rs.)
Net Operating Income Per Share (Rs.) 730.06 552.37
Free Reserves Per Share (Rs.) 229.02 202.26
PROFITABILITY RATIOS
Operating Margin (%) 10.41 16.18
Gross Profit Margin (%) 9.93 15.56
Net Profit Margin (%) 9.76 15.65
Adjusted Cash Margin (%) 10.22 16.23
Adjusted Return On Net Worth (%) 15.91 22.43
Reported Return On Net Worth (%) 15.91 22.43
Return On long Term Funds (%) 132.08 112.95
LEVERAGE RATIOS
Long Term Debt / Equity 0.00 0.00

Total Debt/Equity 15.86 16.39
Owners fund as % of total Source 5.93 5.75
Fixed Assets Turnover Ratio 0.09 5.22
LIQUIDITY RATIOS
Current Ratio 0.96 0.81
Current Ratio (Inc. ST Loans) 0.02 0.02
Quick Ratio 29.11 30.86
Inventory Turnover Ratio 0.00 0.00
PAYOUT RATIOS
Dividend payout Ratio (Net Profit) 17.28 14.09
Dividend payout Ratio (Cash Profit) 16.49 13.58
Earning Retention Ratio 82.72 85.91
Cash Earnings Retention Ratio 83.51 86.42
COVERAGE RATIOS
Adjusted Cash Flow Time Total Debt 95.11 70.38
Financial Charges Coverage Ratio 0.20 0.34
Fin. Charges Cov.Ratio (Post Tax) 1.15 1.27
COMPONENT RATIOS
Material Cost Component(% earnings) 0.00 0.00
Selling Cost Component 0.08 0.09
Exports as percent of Total Sales 0.00 0.00
Import Comp. in Raw Mat. Consumed 0.00 0.00
Long term assets / Total Assets 0.92 0.92
Bonus Component In Equity Capital (%) 0.00 0.00

Profit & Loss ForCanara Bank (Table 8)
Mar' 12 Mar' 11
Income :
Operating Income 32,341.82 24,470.09
Expenses
Material Consumed 0.00 0.00
Manufacturing Expenses 0.00 0.00
Personnel Expenses 2,973.09 2,954.84
Selling Expenses 26.67 24.38
Adminstrative Expenses 2,811.16 2,289.91
Expenses Capitalised 0.00 0.00
Cost Of Sales 28,972.23 20,509.87
Operating Profit 3,369.60 3,960.22
Other Recurring Income 1,281.52 1,253.90
Adjusted PBDIT 4,651.12 5,214.12
Financial Expenses 23,161.31 15,240.74
Depreciation 156.89 151.36
Other Write offs 0.00 0.00
Adjusted PBT 4,081.71 5,025.44
Tax Charges 800.00 1,000.00
Adjusted PAT 3,281.71 4,025.44
Non Recurring Items 1.00 0.45
Other Non Cash adjustments 0.00 0.00
Reported Net Profit 3,282.71 4,025.89
Earnigs Before Appropriation 3,282.71 4,025.89
Equity Dividend 487.30 487.30
Preference Dividend 0.00 0.00
Dividend Tax 80.00 80.00
Retained Earnings 2,715.41 3,458.59

Balance Sheet for Canara Bank (Table 9)
Mar' 12 Mar' 11
SOURCES OF FUNDS
Owners' Fund
Equity Share Capital 443.00 443.00
Share Application Money 0.00 0.00
Peference Share Capital 0.00 0.00
Reserves & Surplus 20,181.82 17,498.46
Loan Funds
Secured Loans 0.00 0.00
Unsecured Loans 327,053.73 293,972.65
Total 347,678.54 311,914.11
USES OF FUNDS
Fixed Assets
Gross Block 4,858.37 4,686.15
Less: Revaluation Reserve 2,065.14 2,098.36
Less: Accumulated 2,000.84 1,841.74
Depreciation
Net Block 792.40 746.05
Capital Work-in-progress 0.00 0.00
Investments 102,057.43 83,699.92
Net Current Assets
Current Assets, Loans & 8,576.01 6,359.15
Advances
Less : Current Liabilities & 8,891.12 7,804.64
Provisions
Total Net Current Assets -315.11 -1,445.49

Miscellaneous Expenses not 0.00 0.00
written
Total 102,534.72 83,000.48
Note
Book Value of Unqouted 0.00 0.00
Investment
Market Value of Qouted 0.00 0.00
Investment
Contingent liabilities 202,552.87 140,847.47
Number of Equity shares 4,430.00 4,430.00
outstanding (in Lacs)
Interpretation
 The reserves and surplus are increasing ,it indicates good performance of the bank
(20,181.82 in 2012 and 17,498.46 in 2011).
 Investment are increasing it provides sources of income to the bank (102,057.43 in 2012
and 83,699.92 in 2012).
 Bank not have optimum level of current asset it indicates difficult to discharge the
liability (-315.11 in 2012 and -1,445.49 in 2011)
 Accumulated depreciation is increasing indirectly profit to the bank . bank can get tax
benefits (2,00.84 in 2012 and 1,841.74 in 2011)
 Current liabilities and provision is increased compared to previous year it is burden to the
bank (8,89.12 in 2012 and 7,804.64 in 2011)

CHAPTER 6
LEARNING AND EXPERIENCE
Project training conducted for 10 weeks helped to gain a lot of practical experience. The data has
been collected by interacting with the external guide and employees of the company.
The project has helped me to know the importance of agriculture loan, what is the procedure of
agriculture loan, performance of agriculture loan in last 3 years, how information technology and
various system have reduced the time of an activity and documentation, how different employees
have different skills, talent, ability etc.,, and how they are being utilized in optimum manner in
achieving organization goals. It also helped me to get to know how decision are communicated,
the flow of decision process in recovery of agriculture loan .

CHAPTER 7
General Introduction:
Finance is an essentially requirement for every productive activity. Agriculture is no exception to

it. Its importance in India needs no further emphasiswith agriculture being most predominant
sector in the economy even today. Indian agriculture is the largest private sector enterprise in the
country of over 100 million farmers.
It is also the major sources of income of the people. It also provides employment opportunities to
the large number of people in the country. Agriculture not only provides job opportunities &
employment to the people but its role is more significant in so for as the generation of
employment opportunities are concerned.
Banking sector in India plays a vital role in the development of the Indian economy by providing
the financial assistance to the needy persons of the India.
The users of credit service are heterogeneous & include farmers, households, planters, petty
businessmen’s, agri-business entrepreneurs , non -farm micro enterprises & dairy enterprises,
who demand for short term working capital as well as long term investment loan and also
consumption loans. The Canara Bank is one such major bank in the banking fraternity which is
offering this kind of credit facilities to agricultural sector.
Indian credit facilities characterized by a variety of finance service it may be micro or macro
finance facilities. Availing these credit facilities includes various procedure and compliance to
policies stipulated by the competent authorities.
Credit is a key factor in agricultural development. In the context of technological up gradation &
commercialization of agriculture which is envisaged in the coming years. It is necessary that
credit support to agriculture sector is stepped up considerably.

a. Statement of the problem:
The study on recent trend in financing to agriculture is taken up in order to know what variation
are happened in financing from the Canara bank , shimoga for past 3 years. Particularly this
topic is take for the study as agriculture is important for the development of the Nation.
b. Objectives of the Study
 The primary objective of the study carried out in canara bank is to gain knowledge about
lending of loans for agriculture sector.
 To study the progress and movement of Agriculture lending of the bank during past 3
years
 To study which of the loan scheme is having more demand among the various type of
agriculture loan offered by the canara bank
 To study the criteria like interest rate , repayment period, recovery, security, etc., which
are significant while considering sanctioning of agriculture loans.
c. Scope of the study

The scope of the study is restricted to Shimoga region and helps to create awareness about
the variety of agriculture loan products offered by the Canara Bank and performance in the
last 3 years in shimoga . This study was mainly concentrated on agriculture credit facility
being adopted by the Canara bank. The procedure followed by the bank to give advances
and further actions for satisfying the requirement of customer .

The procedure for give the advance will influence more on the profit of the canara bank .
So the study of agriculture credit facility has vital role to understand the efficient system of the
bank.
d. Methodology
The data collection for the study based on survey method employing both primary &
secondary.
Primary data: primary data is collectedthrough personal interview with the manger ,and
officials.
Secondary data: The data is collectedthrough bank website, annual reports of the bank and
canara bank loan manual, journals , magazines of the bank.
Tools for data analysis: Data analysis is done with the help of graphs.
e. Limitation of the Study
The study has focused on the borrowers of village but the study reflects the silent feature
& problems of the borrower & the agriculture people in the study area.
 Due to lack of time it was not possible to make a broad study on the credit
policies.
 Lack of information due to busy schedule of the work in the bank.
 More information based on secondary sources due to every short period given for
the collection of the information.

In information agricultural credit has less important role of play because credit is used
for maintenance rather than expanding agriculture activities, credit is used for storage, marketing
& processing of the agriculture surplus for the purpose of ensuring steady supply to consumer
throughout the year.
In modern agriculture the high quantum of credit is needed. Various short term cash
inputs like use of improved seeds, fertilizers, medium & long term investment for irrigation, land
improvement etc
f. THEORETICAL FRAME WORK
Introduction
India in predominantly an agriculture country. A vast majority of people i.e. 82% use to
live in villages70% of people directly as indirectly depend on agriculture for their livelihood. On
the accounts of rural indebtedness the farmers are not able to provide their own funds finance for
the development of agriculture.
Agriculture finance in essential service which is much needed for development of

enterprises and establishment in the field of agriculture.
Agricultural credit is an integral part of the process of modernization of agriculture and

commercialization of the rural economy. The introduction of easy and cheap credit is the
quickest way for boosting agricultural production. Therefore it was the prime policy of all the
successive government to meet the credit requirement the farming community.
Credit is the back bone for any business and more for agriculture which has traditional
been a non monetary activities for the rural population.
Agriculture as a sector depends more on credit than any other sector of economy because
of the seasonal variation in the farmers returns and changing trend from subsistence to
commercial farming.

In traditional agriculture credit has been important role to play because credit is used for
maintained rather than expanding agriculture activities, generally, credit is used for storage,
marketing and processing of ensuring steady supply to consumers throughout the year. Besides
these needs the credit is also used to meet the case requirement of the cultivators.
On other hand, in modern agriculture the high quantum of credit is needed various short term
cash inputs like use of improved seeds, fertilizers ,etc,. The modern agriculture also requires co-
ordinations of various activities like appropriate estimate of credit, timely and adequate supply of
inputs repayment arrangement favourable to framers efficient machinery for recovery of loans
adequate marketing accommodations.
So in modern agricultural introduction of institution channels of credit is necessary

further in such cases where credit is required to make a significant impact on agricultural, it is
necessary that the credit machinery should be expanded fastly to meet the growing credit needs
of the cultivator. Formers tended towards replacement of traditional methods of farming with
scientific and developed methods. Due to this the farmers compulsory depends upon borrowed
funds. This cause the increasing demand for disbursing credit to most of the farmers, so in
respect of transformation traditional and importance of the agricultural credit has increased
comparatively more.
Essential Features of Agricultural credit Systems
With a view to fulfil the credit needs of the farmers and to ensure that it serve the national
economy a dynamic factor it is essential that a sound systems of credit should build up such
system should be able to commence the present static credit into dynamic credit. Because the
static credit does not increased the output .Income and assets at the time of maturity i.e. end of
the credit period contrary to it under dynamic of credit a satisfactory increase in output income
and assets may be notified after the maturity of credit. In the other words as credit systems
should be efficient to promote the development.

The criteria a registered a good credit system for agricultural financial have been
produced by many expert. As for the agricultural credit in concerned it must be provided from
another angle. While dealing with Indian farmers who are uneducated and ignorant in respect of
implication of various aspects of agricultural credit. So, the credit system should be scientific and
flexible, this credit system should also be able to encourage the farmers for increasing their
production and also a higher standard of living. It may be possible by the favourable support
from government and its agencies.
Various criteria for a good credit system
 The agricultural credit should be provided for a satisfactory long period and it should
commensurate with the operational for which it is desired to facilitate.
 It should be provided at lower rate of interest.
 With a view to present the abuse of credit it should be adequately secured but the security
should not be necessary be material.
 The credit should be granted against personal security of the borrowers and on the basis
of farming ability.
 Credit should be provided according to the average yield of the farmers and capacity to
repay specially in the times of economic depression.
 The credit should be provided through institutions the officials of which have analyzed
special training and have actual banking experience.

According to RBI agricultural credit system should have following
 The credit systems for modern agriculture should integrated the credit with services for
ensuring the arrangement of inputs and service along with credit.
 Under the credit systems all areas and farmers should be covered. In other words the
credit system should be so efficient to expanded its activities horizontally as well as
vertically.
 Under a good system of credit for modern agricultural emphases should be given to be
for production purposes. But the consumption loans should not be prohibited completely.
 In a credit system the cost of handling credit and service should be recovers. In the
absence of this most the farmers will any credit. Which may cause a burden beyond their
repaying capacity.
 The credit system should be such which mobilises sufficient resources to provided
finance for purpose of investment required for modern agriculture.
Some feature of a sound agricultural credit system has been determined by the All-
India Rural Credit Survey Committee. These includes,
 It should have the strength of adequate resources and of well trained personnel.
 It should be an effective alternative to the private agencies of credit.
 It should lend not merely on security of land and other usual forms of security but also on
the security of anticipated crops.
 It should effectively supervise the use of credit and consequently bear in mind the
borrowers legitimate needs and interest.

From the above discussion suitable criteria for a good and sound system of agricultural
credit can be given,
 All the credit needs- short, medium and long term of the farmers should be net.
 Credit should be made available as at near to the door step as possible and where needed
by the farmer.
 It should generate savings and accelerates economic growth.
 Supply and other services too should be made available to them.
 The lending agency should be geared to financing the entire farming system.
 The credit agency should be in a position to inter lines with marketing agencies to ensure
full recovery of loans.
Thus, in a good and sound system of agricultural credit there should be a provision of
continuous evaluating of the credit programmes. This respect will assist to estimate
quantitatively the impact on improvement. In respect of farm production, cropping pattern
cropping intensity, farm output employment opportunities and actual farm income, under the
secondary credit system, guidance should be available to credit institutions in this regard from
time to time. In the words of E.C Johnson, The fundamental problems the agricultural credit is to
increased the income of farmers improve their capacity to repay and raise their stand and of
living.
Agricultural finance has to play significant and crucial role in the growth of agricultural so
for the problems of agriculture are concerned they might be put into two categories one is the
institutional problems, another in the technological problems.
NABARD was establish in terms of the preamble to the act for providing credit for the
promotion of agriculture, small scale industries, handcrafts and other allied economic activities
in rural area with a view to promotion integrated rural development and securing prosperity of

rural area. It took over the function of while agricultural credit development and rural planning
and credit cell of the RBI and ARDC, after the establishment NABARD. The entire under taking
of the ARDC including all business property assets and liabilities, right interest privileges and
obligation of whatever nature have been transferred to and vested in the national bank.
It diverse credit needs of the agricultural and rural credit. The bank is a specified institution
in the field of agriculture credit and in able to tackle the problems arising from integrated rural
development.
The modern and the latest technology of production are essentially required for the purpose of
stepping up production. Irrigational facility is necessary required for the introduction and
applicable of modern sophisticated scientific techniques.
Agricultural credit system in India
The government of India and RBI approved the proposed of CRAFICARD. The parliament
though the act of 1981 approved its setting up the NABARD act was passed by the parliament on
1st December 1981. It came in to existence on July 12 1982 and started functioning with effects
from July 15 1982. The bank was dedicated to the service of the nation by the hobble prime
minister Smt. Indira Gandhi on Nov 5 1982.Storage a rural enterprises for this the bank will
combine in itself the development and financial role.
Credit flow to the agriculture sector as exceeded the targets since, announcement of farm
credit package in 2004 and overall farm credit as expanded despite such expansion on of rural
credit nearly 7.3% of farmers in his country who own been than 2 hectares of land are not
reached by institutional credit.
The CRAFL CARD considered various names for the national bank, namely agricultural
development bank of India rural development bank of India and national bank for agriculture and
rural development.

Institutional it is concerned with policy planning and operation in the field of agriculture’s in
rural area.
Types of Agricultural Credit Schemes
1.Kisan credit card
Canara bank is the pioneer in implementing credit card schemes for farmers.
The schemes is called as Canara Bank Krishi card schemes and the credit card is renamed
is” Krishi card’.
Purpose
For meeting the cultivation needs of farmers and others and host term requirement including
those of subsidiary / consumption needs.It is an innovative attempt to make the agricultural
credit more easily available to farmers.
Eligibility
 Any farmer who are cultivating authorized leased lands are also eligible. The farmer
should not be a defaulter of any financial institution.
 Any credit worthy farmer borrowers agricultural credit facility from bank and repayment
is considered eligible for extending credit under the Krishi card scheme.
 The farmer should own minimum 2 crore of agricultural land and his production credit
requirement should not be less than Rs. 500/-
Limit of credit
Minimum limit under Krishi card schemes is fixed as Rs 5000 and minimum limit as at Rs.
50000/-.minimum cost of farm equipment and other agricultural expenses included in the loan
amounts.

Rate of interest
Attractive interest rare 9 to 10% depending on loan amount.
1. General credit card scheme
It advised by RBI to scheduled commercial banks for providing credit facility to area.
Objectives
 General Credit Card Schemes has been introduced as important measure in the
area of financial inclusion.
 To provide has free credit to rural and semi-urban households without insistence
on security purpose or end use of the credit.
 Loan can be sanctioned for any general purpose including that of consumption.
Eligibility
All rural/ semi- urban households are eligible irrespective of their activity whether agricultural
and non agricultural and income level. To meet the obligation on demand in eligible to cover
under the scheme.
2. Quantum of loan
Loan quantum shall be 50% of the net annual income of the entire household maximum limit
is restricted to Rs. 25000/-
Margin
No margin shall be insisted.
Tenability
Limit extended is of overdraft nature tenable for 3 years.

Security
No security is insisted third party guarantee.
3.KisanSuvidha
Purpose
 For meeting the comprehensive credit needs of farmers.
 Working capital requirement for crop cultivation expenses, maintenance of farm

machinery/ equipments, non farm sector activities and consumption needs.
 Term loans requirement like purchase of agricultural implements land development

purchase of bullocks and carts, purchase of farm machinery, minor irrigation
Eligibility
Agriculturists can avail finance for working capital requirements either under kisan credit
card schemes KisanSuvidha and not under both the schemes
4.CanaraKisan OD
Purpose
To provided a hassle free overdraft facility for working capital expenses of agriculturist
to be incurred for allied activities repairs and replacement of farm machinery and for non farm
sector activities and consumption needs subject to handling of each type of expenses.
The account can also be operated by ATM card or cheque leakers.
Eligibility
Agriculturist having satisfactory repayment record for the past 1 year the scheme is
operational only in select branches of the banks.

5.KrishiMitra Card Schemes
Objectives
To provided easy credit to individual tenant farmers oral lessees share croppers and
farmers cultivating lands without proper records.
Purpose
 Cultivation of crops
 Maintenance of animals and farm machinery
 Repair and replacement of machinery
Loan quantum
Maximum of Rs. 50000/- subject to scale of finance and a maximum of 50% of the value of the
produce.
Tenability
Extended either as an operative limits with a tenability of 3 years or as single transaction

limit, repayable in 5 years in quarterly or yearly instalments.
Security
Hypothecation of crops

6.KisanTatkal
Objectives
To provided credit for meeting the post harvest expenses of the farmer who have availed
KCCS loans
Purpose
To meet the expenditure towards storing processing treatment of food grain go down
charges etc.
Loan quantum
Minimum of Rs.1000/-
Maximum of Rs 50000/- but not to exceed 50% of KCCS limits 25% of annual income
Repayment
In 3-5 years in half yearly/ annual instalments
Security
Collateral of security extended to KCCS loans.
7. Gold Loans for Agricultural Purposes:
Objective
To provide loans to farmers for various agricultural purpose against the pledge of gold
jewelleries.
Purpose
To meet all farm requirement of the farmers.

Loan Quantum
Maximum of Rs.300000/- subject to 80% of the appraised value or per gram.
Repayment
Within 12 months.
Security
Pledge of gold jewelleries.
8. Farm Development Loan
Purpose
Development loan are considered for digging/depending of wells, construction of tanks, ponds,
and repairs thereof, bounding land reclamation, leveling of land, terracing conversion of dry
lands into wet irrigable lands. Development of farm drainage, laying lining irrigation channels,
fencing, construction of farm houses, cattle and poultry sheds and other development activities of
the farm. Where the investment made will result in creation of immovable asset resulting in
increase in the value of land and income of the farmers.
Eligibility
 The farmers should be a owner of the land.
 The should own an economic land holding with a minimum of 2 acres. However loans
can be considered even if the benefiting area is less than 2 acres provided the farmers is
able to sell the surplus water or the viability of the project is ensured.
Margin
Up to Rs. 50000/- - Nil

Above Rs.50000/- - 15.25%
In case of land based activities where value of the mortgaged land and building is twice
the exposure for loans above Rs. 50000/- but up to Rs.2 lakh the margin requirement is 10% to
15%.
Security
The following are the security norms,
Up to Rs. 50000/- No Security.
Above Rs. 50000/- Mortgaged of lands property.
General Aspects
 For loans granted for land development such as land leveling and other on farm
development the landed property on which the development are proposed to be carried
out are to be mortgaged.
 However, if the sanctioning authority feels that is need for additional collaterals
depending on risk factors the same may be insisted for loan above Rs.50000/-.

9. Crop Loans
Purpose
Crop loans are granted for meeting the cost of seasonal operation to raise crops viz, cost of seeds,
fertilizers, pesticides, irrigation charges, labour charges etc.
Eligibility
 The applicant should be either owners cultivator or tenant or share cropper.
 Crop loans can be granted to farmers duly ensuring viability.
 The applicant should not be a default to any financing agency and generally free
from any outside liabilities..
 Crops loans can be granted both under irrigation and rain fed conditions.
 The respect of borrowers of land not exceeding Rs. 50000 may be considered on
production of no objection certificate and no over due certificate and same should not
be dated more than 15 days prior to the date of approach.

Security (Table 10)
Extent Of Limit Security
For crop loan limit up to Rs.50000/- Hypothecation of crops

within the overall agriculture limit of
Rs.65000/-
1. For crop loan limits of above 1. Hypothecation of crops

Rs.50000/-
2. In cases crops loan limits is less than 2. Mortgage of landed property.

Rs.50000/- but overall limit under
agriculture exceeds Rs.65000/-.
Repayment
The period of repayment should always coincide with harvesting and marketing of produce. In
any case, it should not be more than a months in respect of short duration crops of like paddy,
ragi, etc. and 15 months in cases of long duration crops like sugarcane, pineapple, etc. In respect
of coffee crops loan the repayment should be linked within marketing of produce. Normally
coffee crops loans granted during the year are to t be cleared before 30th June of next year.

10. Special Purpose Agriculture Credit
Purpose
SPAC is to assist farmers for carrying out repair and replacement to the farm machinery vehicle
and implements such as tractor power tillers, pump sets, grain threshers, fishing boats, nets,
bullock carts, machineries, utilized in dairy and poultry farming, loans can also be made
available for purchase of new tyres for tractors, bullock carts fitted with pneumatic tyres. Loans
can also be granted for improving the efficiency of pump sets already installed repayment of
undersized/defective piping system foot value and correcting installation/other defects in existing
pump sets installed.
Eligibility
Farmers satisfying following criteria are eligible for availing loan assistance under the
scheme.
 Machinery/implement/vehicle for which repair are to be carried out must have
o Either been purchased through our finance, if so the account should not be
overdue.
o If purchased through outside borrowings or from other financial institution, it

must have been cleared leaving no charge of vehicle for which the proposed
repair are to be carried out.
 Loans can also be considered to agro service centre, other service organization
including state owned corporations.
Margin
Up to Rs,50000/- Nil
Above Rs.50000/- 15-25%

Security
Up to Rs.50000/- --- Hypothecation of farm machinery.
Above Rs.50000/- ----Hypothecation of farm machinery + mortgaged of landed

property.
Repayment
The loans are to be repaid over a period of 3 years either in monthly/ quarterly/half years
or annual instalment depending upon income generation. The periodicity of instalments shall be
decided taking into consideration the quantum of loan, economic life of the
implement/machinery proposed to be repaired. The installment amount is to be determined based
on cropping pattern, other sources of income, surplus available etc.
Summary:
Agriculture is the backbone of the Indian economy as nearly 60% of Population of the
country depends on agriculture. Credit facilities is essential Service which is much needed for
development of agriculture. Credit was the prime policy of all the successive government to meet
the credit requirement of the farming community. Credit facilities are sponsored by government
of India. NABARD, RBI for agricultural development. It improve the agriculture from Tradition
to modern by adopt machinery, technology, and Canara Bank providing different schemes to
rural area for development of agriculture field. Under the credit system, Canara Bank provides
the finance for purpose of investment required for modern agriculture. The Canara Bank has
been financing to farm mechanization and minor irrigation activities since its inception.
Agricultural credit scheme is provided by Bank to rural area. In different amount

loan and different rate of interest and repayment of loan at given period of time.

CHAPTER 7
ANALISIS AND INTERPRITATION
1. Contribution of canara bank to agricultural sector. (table 11)
Year Total advance in shimoga Agriculture advance in

(Rs. In crore ) shimoga (Rs. In crores)
2010 1287 792
2011 1390 820
2012 1520 985
(Graph:2)
1600 1520
1390
1400 1287
1200
985
1000
792 820
800
600 Total advance in shimoga(rs in

crores)
400
200
agricultural advance in
0 shimoga(rs in crores)
2010 2011 2012
ANALYSIS AND INTERPRETATION:
The above table reveals that annual growth rate , there were margin variation in credit of Canara
Bank . Agriculture loan and advance of Canara Bank increased absolute terms in present reform
period from Rs. 1287 crores in 2010 to Rs.1390 crores in 2011 and also compare to previous
years it is little bit increase from Rs.1520 crores in 2012 .In 2012 agriculture loan is improved
and utilization of credit is increased and it more improve than actual from years to years.

2. Target achieved in agricultural loan. (table 12)

Year Targets ( rs in crores) Achieved (rs in crores)
2010 980 792

2011 1070 820
2012 1075 985
(Graph:3)
1200
1070 1075
980 985
1000
820
792
800
target(rs in crores)
600
achieved (rs in crores)
400
200
0
2010 2011 2012
From the above table we can analyze thattarget achieved in agricultural loan in 2010 is 792
, 2011 is 820 and 2012 is 985 .
From the above analysis we can interpret that, the target are achieved are increasing year
by year

3. Type of deposits offered by canara bank to the farmers in shimoga branch (table 13)
Year Aggregate deposits Current deposits (rs Savings deposits (rs
(rs in crores) in crores) in crores)
2010 1670 45 720

2011 1750 60 750
2012 1820 72 800
(Graph:4)
2000
1820
1800 1670
1600
1400
1200
aggregate deposits (rs in crores)
1000
800 Current deposits (rs in crores)
800 720
Savings deposits (rs in crores)
600
400
250
170
200 60 72
45
0
2010 2011 2012

The above table it is clear that the total deposit from Canara bank is increased from year to years,
but customer mainly castrate on saving deposits, not a current account own saving deposits more
important than current deposit, every agriculturist have their account for purpose deposit of
getting loan. Every loan can be given on the basis of customer saving in account. Current
deposits variation in growth rate according to Canara bank performance during the year of 2010
– 2012.

4. Demand in agricultural loan (table 14)

Schemes 2010 2011 2012
KCC 27100 29600 32400
FDL 10200 19100 12600
CKOD 7600 7900 8100
(Graph:5)
32400
35000
29600
30000 27100
25000
19100 2010
20000
2011
15000 12600 2012
10200
10000 7600 7900 8100
5000
0
KCC FDL CKOD
The above table is showing the total KCC, FDL and CKOD loan provided by the bank to
the customer . In the year 2010 KCF was 27100, FDL was 10200 and CKOD was 7600.
In 2011 KCF was 29600, FDL was 19100 and CKOD was 7900 and in 2012 KCF was
32400, FDL was 12600 and CKOD was 8100.
Canara bank is assisting the finance to the people who are needed of it .which may help
the potentiality of the farmer and this scheme is also growing year by year.

5. Unpaid agricultural loan (Table 15)

Year Total NPA(in crores) Agriculture NPA(in crores)
2010 137 93
2011 140 97
2012 145 110
(Graph:6)
160 145
137 140
140
110
120
93 97
100
total NPA
80
agriculture NPA
60
40
20
0
2010 2011 2012

From the above table , we can analyse that the total NPA and Agriculture NPA in 2010
was 137and 93, 2011 was 140 and 97 and in 2012 was 145 and 110
From the above analysis we can interpret that the unpaid loan amout is decreasing year
by year

6. Recovery Of Agricultural Loan (Table 16)

Year Total Advance General Advance Agricultural
Advance
2010 56% 68% 49%
2011 59% 77% 52%
2012 62% 80% 58%
(Graph:7)
80%
77%
80%
68%
70%
62%
59% 58%
60% 56%
52%
49%
50%
Total advance
40% General advance
Agricultural advance
30%
20%
10%
0%
2010 2011 2012

From the above table we can analyse that the total advance, general advance and
agriculture advance in the year 2010 it was 56%, 68%and 49%. In 2011 was 59%, 77%
and 52%.in 2012 it was 62%, 80% and 58%.
From the above analysis we can interpret that canara bank recovery is increasing year by
year

CHAPTER 8
FINDINGS
 The agriculture credit is providing for satisfactory long period and also providing for
low interest rate
 In Canara bank they providing preference to agriculture credit compare to other credit
facility
 In canara bank disbursement of agriculture loan not meeting the sanction
 Deposits offered by canara bank for farmers is current deposit and savings deposits
 Demands for agriculture loan is increasing year by year for various schemes
 Recovery of agriculture loan is 49% in the 2010 , 58% in the 2011,and 52% in the 2012

CHAPTER 9
CONCLUSION
India in predominantly an agriculture based country. A vast majority of people i.e. 82%
live in villages, of which 70% of people directly and indirectly depend on agriculture for their
livelihood.
Agriculture being the seasonal activity, the income of most of the farmers will be restricted to
particular seasons viz, Kharif, Rabi and summer based on the crops cultivated by the farmers.
Hence, it will be difficult for the farmers to meet the timely financial requirements for cultivation
of the crops.
In order to facilitate the timely financial needs of the farmers, Canara Bank has formulated
various credit schemes for different categories of farmers as detailed in this report.
On completing my study like it can be conclude that Canara Bank is successful in

implementation of various credit schemes for meeting the crop production and other agriculture
needs of the famers.
Further, the timely credit distention system followed by Canara Bank is not only meeting
financial needs of the borrowers but also helping in agriculture production and productivity at
gross root level and GDP growth of the country are apex level.

CHAPTER 10
SUGGESTION
 They have make strict collection of advances from the customers.
 They can introduce other agriculture credit product which helpful for the customer
 They can increase agriculture credit disbursement by giving advertisement
 They can give special deposit facility for farmers , which will helpful to farmers.
 The loan should be sanctioned to the agriculturist at earliest possible time.
 Bank would make sincere efforts to disburse maximum loan as per the credit plan of
respective years.
 If the customer has not repaid the loan within a sufficient time, the banker has to take
corrective action measures.

ANNEXURE
Financial statement
Balance Sheet for Canara Bank

Mar' 12 Mar' 11 Mar' 10 Mar' 09 Mar' 08
SOURCES OF FUNDS
Owners' Fund
Equity Share Capital 443.00 443.00 410.00 410.00 410.00
Share Application Money 0.00 0.00 0.00 0.00 0.00
Peference Share Capital 0.00 0.00 0.00 0.00 0.00
Reserves & Surplus 20,181.82 17,498.46 12,129.11 9,629.61 7,885.63
Loan Funds
Secured Loans 0.00 0.00 0.00 0.00 0.00
Unsecured Loans 327,053.73 293,972.65 234,651.44 186,892.51 154,072.42
Total 347,678.54 311,914.11 247,190.55 196,932.12 162,368.06
USES OF FUNDS
Fixed Assets
Gross Block 4,858.37 4,686.15 4,480.37 4,440.07 4,254.33
Less: Revaluation Reserve 2,065.14 2,098.36 2,132.68 2,168.16 2,204.86
Less: Accumulated Depreciation 2,000.84 1,841.74 1,620.99 1,510.61 1,337.46
Net Block 792.40 746.05 726.69 761.30 712.01

Capital Work-in-progress 0.00 0.00 0.00 0.00 0.00
Investments 102,057.43 83,699.92 69,676.95 57,776.90 49,811.57
Net Current Assets
Current Assets, Loans & Advances 8,576.01 6,359.15 3,216.92 4,060.26 2,684.17

Less : Current Liabilities & 8,891.12 7,804.64 6,977.30 13,488.91 13,438.55
Provisions
Total Net Current Assets -315.11 -1,445.49 -3,760.38 -9,428.66 -10,754.38
Miscellaneous Expenses not 0.00 0.00 0.00 0.00 0.00
written
Total 102,534.72 83,000.48 66,643.27 49,109.55 39,769.21
Note
Book Value of Unqouted 0.00 0.00 0.00 0.00 0.00
Investment
Market Value of Qouted 0.00 0.00 0.00 0.00 0.00
Investment
Contingent liabilities 202,552.87 140,847.47 131,833.49 162,609.12 121,010.49
Number of Equity shares 4,430.00 4,430.00 4,100.00 4,100.00 4,100.00
outstanding (in Lacs)

BIBLOGRAPHY
BOOKS
 Banking Theory, Law And Practice, Gordon Natarjan, Himalaya Publishing
House, 21st Revised Edition.
 Banking and Financial System , D.M. Mithani, E Gordon , , Himalaya Publishing
House, 8th Revised and Updated Edition 2008.
 Banking Theory And Practice, K.C. Shekhar , Lekshmy Shekhar, Vikas
Publishing House/ Private ltd
Websites:
 www.rbi.org
 www.rbi.com
 www.banknetindia.com/banking
 www.canarabank.com

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STUDY ON AGRICULTURAL CREDIT FACILITY OF CANARA BANK

Banking Industry in India:-

Department of M.B.A, AIT, Chikmagalure Page | 1

Department of M.B.A, AIT, Chikmagalure Page | 2

Department of M.B.A, AIT, Chikmagalure Page | 3

2. a. BACKGROUND AND INCEPTION OF THE COMPANY

Department of M.B.A, AIT, Chikmagalure Page | 4

 Launching of Inter-City ATM Network

 Can fin Homes Limited

Department of M.B.A, AIT, Chikmagalure Page | 5

2. b. NATURE OF THE BUSINESS CARRIED

Department of M.B.A, AIT, Chikmagalure Page | 6

2. c. VISION , MISSION AND QUALITY POLICY

Department of M.B.A, AIT, Chikmagalure Page | 7

2. d. PRODUCTS AND SERVICES OF CANARA BANK

Department of M.B.A, AIT, Chikmagalure Page | 8

Personal Banking (Table 2)

Deposits 2 Loan products 3Credit service 4Consultancy

Department of M.B.A, AIT, Chikmagalure Page | 9

Corporate Banking (Table 3)

Department of M.B.A, AIT, Chikmagalure Page | 10

NRI Services (Table 4)

Deposits Loans and Remittance Consultancy Other service

Department of M.B.A, AIT, Chikmagalure Page | 11

Priority Credit Finance (Table 5)

Agriculture and Education loan and RRB Division Rural Others

Department of M.B.A, AIT, Chikmagalure Page | 12

Department of M.B.A, AIT, Chikmagalure Page | 13

Ownership Pattern of Canara Bank (Table 6)

Mutual funds/UTI 8070610 1.96

Financial institutions 420940 0.10

Insurance companies 31064973 7.58

Foreign Institutional Investors 47581514 11.61

Non institutions Bodies corporate 1983985 0.48

Individuals –Individual shareholders 2006041 4.89

Individual shareholders holding nominal 489984 0.12

Trusts 5560 0.00

India 252308 0.06

Total 410000000 100

Department of M.B.A, AIT, Chikmagalure Page | 14

Ownership pattern of Canara Bank

Department of M.B.A, AIT, Chikmagalure Page | 15

1 State Bank of India:

It was established on 7 September 1906 is with its headquarters in Mumbai. Government-owned

Department of M.B.A, AIT, Chikmagalure Page | 16

2.h. INFRASTRUCTURAL FACILITY

Department of M.B.A, AIT, Chikmagalure Page | 17

2.i. Organization Structure of Canara Bank (figure 2)

Deputy General Manager

Assistant General Manager

Department of M.B.A, AIT, Chikmagalure Page | 18

Work Flow Model For Loan Section (figure 3)

Request for loan to the

Approval /Rejection by the

Figure 3 :- The loan sanction process

Department of M.B.A, AIT, Chikmagalure Page | 19

Department of M.B.A, AIT, Chikmagalure Page | 20

2.k. FUTURE GROWTH AND PROSPECT

Department of M.B.A, AIT, Chikmagalure Page | 21

Department of M.B.A, AIT, Chikmagalure Page | 22

Department of M.B.A, AIT, Chikmagalure Page | 23

Department of M.B.A, AIT, Chikmagalure Page | 24

Recruitment & Selection System: