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MEANING OF FINANCE:-
Finance may be defined as the provision of money at the time when required.
Finance refers to management of flows of money through an organization. It concerns
with the application of skills in the manipulation, use and control of money. Different
authorities have interpreted the term “Finance” differently. However, there are three
main approaches to finance.
3. The third approach views finance as being concerned with rising of funds and
their effective utilization.
DEFINITION OF FINANCE:-
In the words of Panther and Wert, “Business finance deals primarily with raising,
administering and disbursing funds by privately owned business operation in non-
financial fields of industry.”
IMPORTANCE OF FINANCE:-
Finance is the life blood and nerve centre of business. Just as circulation of
blood is essential in the human body for maintaining life, finance is a very essential to
smooth running of the business. It has been rightly termed as Universal Lubricant,
which keeps the enterprise dynamic. No business, whether big, medium or small can
be started without an adequate amount of finance. Fight from the very beginning i.e.,
conceiving an idea to business, finance is needed to promote or establish the business,
acquire fixed assets, make investigations such as market surveys, etc, develop product,
keep men and machine at work, encourage management to
Make require further finance for making improvements or expanding the
Business.
Thus, the importance of finance cannot be over emphasized and the subject of
business finance has become utmost important both to the academicians and
practicing managers.
SCOPE OF FINANCE:-
The first task of a financial manager is to estimate short-term and long-term financial
requirements of his business. For this purpose, he will prepare a financial plan for
present as will as for future. The amount required for purchasing fixed assets and
funds for working capital will have to be ascertained. The estimations should be
based on sound financial principles so that neither there are inadequate not excess
funds with the concern. The inadequacy of funds will adversely affect the day-to-day
working of the concern where as excess funds may attempt a management to indulge
in extravagant spending and for speculative activities.
OBJECTIVE OF FINANCE:-
Financial management is concerned with procurement and use of funds. Its main
aim is to use business funds in such a way that the firm’s value/earnings are
maximized. These are various alternatives available for using business funds. Each
alternative course has to be evaluated in detail. The pros and cons of various
decisions have to look in to before making a final selection. The decisions will have
to take into consideration the commercial strategy of the business. Financial
management provides a frame work for selecting a proper course of action and
deciding a viable commercial strategy. The main objective of a business is to
maximize the owner’s economic welfare. The objective can be achieved by:
1. Profit maximization:-
Profit earning is the main aim of every economic activity. A business being an
economic institution must earn profit is a measure of efficiency of a business
enterprise. Profits also serve as a protection against risks which cannot be ensured.
The accumulated profits enable a business to face risks like fall in prices, competition
from other units, adverse government policies etc. thus following arguments are
advanced in favor of profits maximization as the objective of business.
a) When profit-earning is the aim of business then profit maximization
should be the obvious objective.
b) Profitability is a barometer for measuring efficiency and economic
prosperity of a business enterprise, thus profit maximization is justified
in the grounds of rationality.
2. Wealth maximization:
Financial decisions:
Financial decisions refer to decisions concerning financial matters of a business
firm. There are many kinds of assets to be acquitted, pattern of capitalization,
distribution of firm’s income etc. we can classify these decisions into three major
groups.
1. Investment decisions
1. Financial decisions
2. Dividend decisions
The investment decision is important not only for the settings up of new units by
also for the expansion of present units, replacement of permanent assets, research and
development project costs, and reallocation of funds, in case, investments made earlier
do not fetch results as anticipated earlier.
A finance manager has to select such sources of funds, which will make optimum
capital structure. The important thing to be decided here is the proportion of various
sources in the overall capital mix of the firm. The debt-equity ratio should be fixed in
such a way that it helps in maximizing the profitability of the concern. The raising of
more debts will involve fixed interest liability and dependence upon outsiders. It may
help in increasing the return on equity but will also enhance the risk.
The rising of funds through equity will bring permanent funds to the business
but the shareholders will expect higher rate of earnings. The financial manger has to
strike a balance between various so that the overall profitability then the market prices
of the shares will go up maximizing the wealth of shareholders.
The third major financial decision relates to the disbursement of profits back to
investors who supplied capital to the fir. The term dividend refers to that part of
profits of a company which is distributed by it among its shareholders. It is the reward
of shareholders of investment made by them in the share capital of the company. The
dividend decision is concerned with the quantum of profits to be distributed among
shareholders. A decision has to be taken whether all the profits to be distributed, to
retain all the profits in business or to keep a part of profits in the business and
distributed others among shareholders. The higher rate of dividend may raise the
market price of shares and thus, maximize the wealth of shareholders. The firm should
also consider the question of dividend stability, stock dividend (bonus shares) and
cash divide
INDUSTIRAL PROFILE
INTRODUCTION TO BANKING:-
Some people have the opinion that the word “Bank” is derived from the French
words “Bancus” or “Banque” which means a “Bench”. Initially, the bankers, the Jews
in Lombardy, transacted their business on benches in the market place and the bench
resembled the banking counter. If a banker failed, his ‘Banque’ (bench) was broken
up by the people, hence the world “Bankrupt” as come. In simple terms, bankrupt
means a person who has lost all his money, wealth or financial resources.
In India, the Banking Regulation Act, 1949, under which banks are regulated by
the Reserve Bank of India, defines a banking company and banking as under:-
Banking company:-
The Banking Regulation Act, 1949, defines a banking company as a company which
transacts the business of banking in India [section 5 (c)].
Banking:-
Section 5 (b) defines Banking as accepting for the purpose of lending or investments
of deposits of money from the public, repayable on demand or otherwise and
withdrawal by cheques, drafts, order or otherwise.
DEFINITION OF A BANK:-
Prof. Kinley “Bank has an establishment which makes to individuals such advance of
money as may be required and safely made and to which individuals entrust money
which is not required by them for use.
SCHEDULE BANKS:-
Scheduled banks are those banks which are listed in the second schedule to the RBI
Act, 1934. the banks satisfying the following conditions are only included in the
second schedule that the bank’s paid up capital plus free reserves are not less than
Rs.5lakhs and that the affairs of the bank are not conducted to the detrimental interest
of the depositors.
The RBI also has powers to reschedule a bank, when the above mentioned conditions
are not satisfied.
According to sec 5 of the Banking Regulation Act 1949, a loan and advances means a
loan or an advances made on the security of assets the market value of which is not at
any time less than the amount of such loan or advances.
The major portion of banks fund is employed by way of loans and advances
which is the most profitable employment of its funds Advances comprises a very large
portion of a banks total asset and form the backbone of every bank’s structure.
Advances not only play an important part in gross earnings of banks, but also promote
the economic development of the country. All types of business activity including
trade, industry and agriculture have to depend on bank finance in one form or the
other.
In the money lending business, the money lender must carefully consider the
chances of his being repaid by the borrower. He therefore, does not normally depend
on the obligation of the borrower alone but wants some tangible security to safeguard
his advances in case the borrower is unable to meet his obligation. He must have the
ability to judge the character and credit worthiness of his customer. A wise and
prudent policy in regard to advances in considered an important factor inspiring
confidence in the depositors and prospective customers of a bank.
Loans are repayable on the expiry of the periods for which they are granted. In
case the loan is repayable in the installments and default occurs in the payment of any
installments the entire loan usually becomes immediately recoverable at the option of
the bank.
A banker enquires from the borrower the purpose of loan before lending the
loan to an individual. Banks do not grant loans for speculative purpose. They ensure
the safety and liquidity of their funds by granting loans for productive purposes where
Advances to agriculture, small scale Industries (SSI) and small Business Finance
(SBF) are classified as priority sector advances. These advances help to increase the
productivity and development of the nation by generating employment and revenue.
They also help in exports which earn foreign exchange. Incidentally they will
improve the standard of the people of our country.
On the other hand, if advances are given for unproductive or risky purpose such
as the financing of pleasure tour, meeting of domestic expenses, repayment of
ancestral debts, speculative purpose or anti-social purpose such as the financing
Hoarding of stocks, smuggling, etc the
Chances of failure will be more and the banker will not able to recover all his
advances or loans.
The banker’s follows are very cautions policy while lending his funds and
conducts this business on the basis of will know principles of sound lending in order
to minimize the risks. The following principles are followed by the banking
institutions while appraising and advances proposal.
Safety
Safety first is the most crucial principle of good lending when the bankers lends, he
must feel certain that the advances is safe is that a borrower is in a position to repay
the loan along with interest according to the terms of the loan contract. If the bank
funds are not safely employed bank cannot survive. Hence the advance as for as
possible should be made only to people who care for repaying the bank loan honestly.
Insincere and dishonest people should not be given the loan. They only the bank
funds will be safer.
Liquidity
The bankers must ensure that the borrower is able to repay the loan on demand or with
in a short period in accordance with agreed terms of re-payment. This depends upon
the nature of assets owned by the borrower and pledged the banker. The source of
repayment must also be definite. The Banker regards liquidity as important as safety
because a bulk of their deposits is repayable on demand or at a short notice. If the
banker lends a large portion of his fund to borrowers from whom repayment would be
coming but slowly, the ability of the banker to meet the demands made on him would
be seriously affected in spite at the safety at the advance.
Profitability
Profitability means earning profit on the assets acquired. Assets here refer to the bank
loans and advances. The bank must employ their funds profitably so as to earn
sufficient income out of which to pay interest to the depositors, salaries to the staff
and to meet various establishment expenses and distribute dividends to the
shareholders. The sound principle of lending is not to sacrifice safety and liquidity for
the sake of higher profitability. Therefore the banks do not grant advances to unsound
parties who are doubtful in repaying, even if they accept to pay a very high rate of
interest. Such advances ultimately prove to be irrecoverable to the detriment of the
interest of the bank and its depositors.
Diversification
This is a principle of sound lending loans and advanced must spread to different
categories so that it will not concentrate on only one sector. An element of risk is
always present in every advance however secure it might appears to be. In fact, the
entire banking business is one of taking calculated risks and a successful banker an
expert is assessing such risk. He is keen in disturbing the risks involved in leading
over a large number of borrowers over a large number of industries and areas over
different types of securities. The principle of diversification is based on the famous
marks “Do not keep all at the eggs in one basket” it means that the banker would not
concentrate his advances in a few big fines or few industries or in few cities or regions
of the misfortune or certain trade or industries are of the bank will not be jeopardy.
Hence while lending the banker should keep in mind the concept of diversification.
Security
Another guiding factor in bank advance is security “it has been the practice banks not
to lend as for as possible expect against security. Security is considered as insurance
or a cushion to full back upon in case of an emergency. When the banker advances
without security he will run the risk of losing the money. If the borrower is prompt in
repayment then there will be no worry. But it is essential that the banker should have
substantial security for his advances. Banker carefully identifies the entire different
expert if an advance before granting it with sufficient security likes gold silver, stock
exchange securities, goods insurance policy etc, because he will be managing the
public money and if the confidence of the public is lost there will be run on the bank.
Hence the banker will not advance without sufficient security. The security should
cover the money advanced interest there on and other changes. Thus the banker
should also bear in mind the security principle while lending.”
FORMS OF ADVANCES:-
Advances by commercial banks are made in different forms, which are short
from advances namely:
1. Loans
2. Overdrafts
3. Cash Credits
4. Discounting of bills
5. Purchasing of bills
6. Letters of credit (LC)/Bank Guarantees.
1. Loans
A loan is a financial arrangement under which an advance is granted by the bank to a
borrower on a separate account called loan account. From this account the loan
amount is paid in one lump sum to the borrower by cash or by transfer to the credit of
his current account, if any. The repayment of loan is provided in lump sum or by
installments without allowing the demand character of the loan to be affected in a way
interest is charged in the loan amount from the date of sanction. The period of loan
ranges from one year to ten-twelve years. A loan granted for a period at more than
one year, 2years, 5years and 7years etc., is called a “Term loan” if the loan is given
for still longer period, it is called “long term loan”.
Types of loans:
i) Secured loans
ii) Unsecured loan
I) SECURED LOANS:
According to section 5 (a) of Banking Regulation Act 1949, secured loans of
advances means a loans or advance made on the security of assets the market value of
which is not at any time less than the amount of such loan or advance.
A Banker secured his advances by stock exchange securities, goods and
documents of title of goods sometimes other securities such as real estate, plant and
machinery, gold bullion, gold ornament, life policies fixed deposits receipts, book and
supply like are also accepted as securities for loans or advances.
2. Over drafts
Overdraft means over drawing the current account up to sanctioned limit. When the
current account holder is permitted by the banker to draw more than what stands to his
credit, such an advance is called an overdraft. The banker may take some collateral
security or may grant such advances on the personal security. An agreed rate of
interest is paid on the utilized portion of the advance sanctioned and for the period it
utilized so it is very advantageous to the borrower. The customer is permitted to
withdraw the amount as and when he needs its and to make deposits in his accounts as
and when he like. Hence an overdraft is a fluctuating account wherein the balance
some terms may be in credit and at the other times in debit. A cheque book will be
issued in an overdraft account. Though overdrafts are considered to be an occasional
way of granting advance this distinction on is not significant now. Overdraft
arrangement is very disadvantageous to the banker, because while he can change into.
Only on the amount actually overdrawn by the customer, he is required to keep at the
disposal of the borrower fine full amount at the overdraft sanctioned. Therefore to
protect the interest of the banker generally, there is a prevision for charging
commitment charge on the utilized portion of the credit limit at the ration of 1% p.a.
3. Cash Credit
Cash Credit is a very popular type of advance made by the commercial bank. It is a
finance arrangement under which a borrower is allowed an advance under a separate
a/c called cash credit a/c up to a specified limit. He can withdrawn and put back the
amount as and when he needs. Thus cash credit is like a running a/c or current a/c
which can be operated according to the will of the borrower cash credit is sanctioned
against the hypothecation or pledge of the goods like agricultural or industrial
products or against the guarantee of the individual or co-obligates or against the
tangible assets as security. The interest will be charged quarterly or half yearly on the
amount actually issued at agreed ratio.
4.Discounting of bills
Discounting of bills is a type of financial accommodation made between the banker
and customer. According to this, the banker discounts the trade bills exchange for a
shorter period say days to 90 days and credit the customer’s account with the proceeds
i.e. face value of the bill minimum discount charges. Then on the due date of the bill,
the banker receives its face value from its acceptor of the bills. In case the bill is
dishonored by the banker can recover the amount from the customer who has
discounted the bill.
5.Purchasing of bills
The bankers besides discounting the bill also purchasing of bill means obtaining a bill
at sight for the consideration from a customer. The consideration will be credited to
the customer’s account. The banker then received the face value of the bill when the
bill is presented to the drawers of the bill. In case of purchasing the bill, there is nor
date of maturity as incase of discounting the bill and can be obtained on demand from
the acceptor. In this case the rate of discounting the bill and can be obtained on
demand from the acceptor. In their case the rate of discount will be slightly higher
compared to discounting rate only trade bills at sight are purchased.
money to the person or drawn and which plays money to the holder of LC. There are
two types of LC’s namely.
a) Traveler’s facility letter or personal credit letters.
b) Letter for commercial credits
RESEARCH METHODOLOGY
A study on Loans and advance at CANARA BANK. This study is an attempt to know
how the bank finances its funds. It’s a study to know about the various loans &
advance and how bank is managing the issuing and recovery of loans provided for the
people. So that a clear analysis and interpretation can be put forth. These findings
would provide with better suggestion.
According to this definition, the bank loans which are not earning any income are
called non-performing assets. The category 2, 3 and 4 comes under this when any
asset becomes non-performing the banks are required to make provision from their
profits. This affects the profitability of the bank very seriously.
In whatever form bank advances are granted they are repayable on demand or at the
expiry of some fixed period. This study on Loans and advances mainly concentrates
on how bank classify their loans according to guidelines issued by RBI. It explains
about NPA and treatment in bank. If the loans are not recovered, it will become non-
performing asset (NPA). The classification into NPA is based on recoverability and
non- recoverability of interest and installments of advance given which is the main
problem faced by banks. The study mainly focuses on the granting the loans and
advances in CANARA BANK.
Bank lending is very much needed to the economy, for it makes possible the
financing of the agricultural and commercial activities of the country. The bulk of the
bank loans in India are provided to trade and industries. Bank loans are called “agents
of indirect production”. In additional to the financing of agriculture, commercial and
industrial activities, banks through their consumer loans contribute to consumption
activities- creating constant demand for consumer
goods like houses, furniture, appliance etc., thus all type of business agriculture
including trade, industry, agriculture have to depend on the bank finance in one form
or other. Hence the need for loans and advances are very important aspects
To compare the position of various loans with comparison with the other
banks
COLLECTION OF DATA:
1. Primary data
The methodology adopted for collecting primary data is basically the questionnaire
method the most popular among data collection techniques. This method has been
mainly employed to extract information from customers. Of course, some information
has been obtained from interviews with the bank employees and very few customers.
2. Secondary data
aspects. The sampling size is 50, as time is limited, and the study is based on the
survey conducted.
SAMPLE SIZE:
The sample size is the number of units that we chose for the research purpose.
The research has been conducted on a sample size of 50 respondents who have availed
Loans and Advances from the CANARA BANK and from potential customers, who
want to avail loan.
SAMPLING TECHNIQUE:
Random sampling is a good technique when there are comprehensive lists available of
the target population
According to the simple random sampling method, it is assumed that entire population
is homogeneous and the samples are selected in such a way that each and every unit in
the population has equal chance of occurrence.
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A Study on loans and advances
Since random sampling implies equal probability to every unit in the population, it is
necessary that selection of the sample must be free from business.
Every research has its own limitations. The limitations of this study are:-
1) Sample size was restricted to 50 customers only.
2) Direct interviews could be biased because if the busy schedule of the
respondent and hesitations to provide information to some questions.
CANARA BANK
COMPANY PROFILE
Canara Bank is one of the most prominent commercial banks of India. The bank was
established in the year 1906 at Mangalore, Karnataka by a well known personality Mr.
Ammembal Subba Rao Pai. Initially, it was founded with the name Canara Bank
Hindu Permanent Fund, but later on the name was changed to Canara Bank Limited.
Widely known for customer centricity, Canara Bank was founded by Shri Ammembal
Subba Rao Pai, a great visionary and philanthropist, in July 1906, at Mangalore, then a
small port in Karnataka. The Bank has gone through the various phases of its growth
trajectory over hundred years of its existence. Growth of Canara Bank was
phenomenal, especially after nationalization in the year 1969, attaining the status of a
national level player in terms of geographical reach and clientele segments. Eighties
was characterized by business diversification for the Bank. In June 2006, the Bank
completed a century of operation in the Indian banking industry. The eventful journey
of the Bank has been characterized by several memorable milestones. Today, Canara
Bank occupies a premier position in the comity of Indian banks.
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. As at June 2010, the Bank has further
expanded its domestic presence, with 3057 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 732 centres, 2681 branches providing Internet
and Mobile Banking (IMB) services and 2091 branches offering 'Anywhere Banking'
services. Under advanced payment and settlement system, all branches of the Bank
have been enabled to offer Real Time Gross Settlement (RTGS) and National
Not just in commercial banking, 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. Promoting an
inclusive growth strategy, which has been formed as the basic plank of national policy
agenda today, is in fact deeply rooted in the Bank's founding principles. "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". These insightful words of our founder continue
to resonate even today in serving the society with a purpose. The growth story of
Canara Bank in its first century was due, among others, to the continued patronage of
its valued customers, stakeholders, committed staff and uncanny leadership ability
demonstrated by its leaders at the helm of affairs. We strongly believe that the next
century is going to be equally rewarding and eventful not only in service of the nation
but also in helping the Bank emerge as a "Global Bank with Best Practices". This
justifiable belief is founded on strong fundamentals, customer centricity, enlightened
leadership and a family like work culture.
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. As at June 2010, the Bank has further
expanded its domestic presence, with 3057 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 732 centres, 2681 branches providing Internet
and Mobile Banking (IMB) services and 2091 branches offering 'Anywhere Banking'
services. Under advanced payment and settlement system, all branches of the Bank
have been enabled to offer Real Time Gross Settlement (RTGS) and National
Electronic Funds Transfer (NEFT) facilities.
2) Zero balance account service, Canara Super Savings Salary Account, for
employees of government service, mid cap, large corporate, IT and ITE’s companies
and SME’s.
3) Internet Purchases Service using debit card leverages Canara Bank's technological
capabilities and cost efficiencies to serve customers through internet. All debit card
holders of the bank can make internet purchases by logging on to the merchant
website directly.
4) Multi-city (MCC) facility, enables the customers to issue cheques that are treated as
local cheques in core banking branches.
7) Gifts go digital through the Canara Bank Gift Card in four denominations of Rs
500, Rs 1,000, Rs 2,000 and Rs 5,000.
DEPOSITS SCHEMES
NRI Services
1) Deposits
2) Loans
3) Remittances
4) FOREX Branches
5) Helpline for NR
Credit Cards
1) Domestic Cards
2) Global cards
3) Debit cards
OVERVIEW
Canara Bank has a can-do attitude about banking in India. One of India's largest
banks, Canara Bank (also known as CanBank) has a network of more than 2,700
branches throughout India, in addition to branches in Hong Kong and London. All of
Canara Bank's branches -- including those located in rural areas -- are computerized,
in a country where that is not a given. The modernization of all branches allows the
bank to offer its customers networked ATMs, telebanking, internet banking, and debit
card services. Canara Bank's lending focus is on agriculture, retail, housing, and
infrastructure loans. Other services include asset management and factoring. The
financial institution is 73% owned by India's government.
AWARDS/ACCOLADE
• Conferred 'First Rank' in India's Best Banks awards under the category
'Strength and Soundness' for 2006-07 by a survey conducted by Ernst &
Young.
India.
• 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, Hon’ble Prime Minister of India.
PRODUCT PROFILE:
2) CAN MOBILE(VECHILE)
4) PERSONAL LOANS
• HOME IMPROVEMENT LOAN
• CANARA CASH
• CANARA BUDGET
• CANARA SITE LOAN
• CANARA GUIDE
• CANARA PENSOIN
• TEACHERS LOAN
• SWARANA LOAN
• CANARA RENT
• CANARA JEEVAN
• DOCTORS CHOICE
• CANARA MORTGAGE
PURPOSE:
7) Short term Bridge Finance for the interim period between sales of the existing/
old house and purchase of a new house (HOME BRIDGE LOAN) –to the extent of
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A Study on loans and advances
80% of market price of the existing house or 80% of cost of the new house to be
purchased whichever is less but invariably against the Security of new house.
8) For taking over of the existing Housing loans availed from other Banks/Other
lending Companies/Agencies.
ELIGIBILITY:
2) NRIs are also eligible to avail loans without specific permission of RBI
QUANTUM OF LOAN;
LOAN ENTITLEMENT :
MARGIN:
20% of the cost in general. The cost shall include Land cost, Stamp duty,
Registration charges, Fixtures like Ward Robes, Pelmets, Dressing Mirror, Kitchen
cabinets / racks, Geysers etc.
SECURITY:
The branches shall obtain the security of the site and building / flat
constructed / to be constructed / to be purchased for which the finance is being
extended, subject to satisfactory valuation and applicant’s clear marketable title / free
from encumbrance the property.
REPAYMENT:
PROCESSING CHARGES:
0.50%of the loan amount minimum of Rs. 500 and max of Rs. 10,000 and no hidden
cost. No application fee. Prepayment Penalty:
2% on the outstanding liability in case of transfer of Housing Loan Accounts to other
banks/ housing finance institutions.
DOCUMENTS:
2) Sale Deed
4) Copy of the approved plan for the proposed construction / extension / addition
5) Detailed cost estimate / valuation report from Bank's Panel Chartered Engineer /
Architect
7) Legal Scrutiny Report, EC for the past 13 years, Property Tax paid receipt,
SKhata and permission for mortgage, wherever necessary
9) IT Returns filed for the past two years (in case of non-salaried persons)
CAN MOBILE(VECHILE)
PURPOSE:
For buying new or used four wheeler .
ELIGIBILITY :
2) Finance 75% of the agreed price or 75% of the value of the car, as assessed by
an automobile engineer or Rs.6 lakh whichever is lower.
2) Interest is charged on the daily reducing balance. So you don't have to pay
interest even for a day extra on the portion repaid by you.
REPAYMENT:
PROCESSING CHARGES:
0.1% on the loan amount with a minimum of Rs.250/- and maximum of Rs.500/-.
DOCUMENTS:
2) Latest salary certificate and Form No.16 / income - proof like ITAO / IT Return,
Financial Statements as the case may be
ELIGIBILITY :
a) Studies in India
• Graduation
• Post-graduation including technical / professional courses with employment
potential conducted by colleges / Universities approved by UGC /
Govt./AICTE/Department of Electronics / IMC, autonomous institutions like
IIT,IIM etc.
b) Studies abroad:
QUANTUM :
MARGIN :
SECURITY :
Loan is given jointly to the student and parent /guardian
Assignment of future income of the student
RATE OF INTEREST
PROCESSING CHARGES:
0.1% on the loan amount subject to a minimum of Rs.100/- and maximum of Rs.250/
REPAYMENT :
• To be repaid in 5 to 7 years.
• Initial repayment holiday of One year both for principal & interest from the
date of completion of course or six months of getting a job whichever earlier.
• Interest will be debited quarterly on simple basis during the repayment
holiday / moratorium period. After commencement of repayment,the accrued
interest is added to the principal amount and EMIs fixed on total outstanding
• amount.
• Penal Interest @ 2% will be charged for above 2.00 Lacs for the overdue
amount and overdue period
PURPOSE:
For furnishing house / flat with household furniture items, air conditioners, wardrobes,
kitchen cabinets, refrigerator, washing machine, etc.,
ELIGIBILITY:
1. When availed along with Housing Loan from our Bank, amount upto one year's
gross salary / income over and above the normal eligible amount for housing
finance.
2. In other cases, one year's gross income / salary will be reckoned to determine
the loan quantum under this Scheme.
3. Subject to above, normally, the maximum loan quantum shall be Rs.2 lacs.
Higher quantum considered selectively.
4. If availed as a part of the housing finance from our Bank, then, the margin
stipulated is 15%. In other cases, the margin is 20%.
SECURITY:
REPAYMENT:
PROCESSING CHARGES:
• 0.50%of the loan amount minimum of Rs. 500, no hidden cost. No application
fee.
DISBURSEMENTS:
• Amount will be normally disbursed only after acquiring ready built house / flat
or completion of construction of house / flat or completion of repairs /
renovations, etc., where the loan is availed along with housing finance. In case
this loan is sanctioned independent of a housing loan then, the loan can also be
disbursed against Performa invoice, etc.
DOCUMENTS / FORMALITIES:
CANARA CASH
PURPOSE:
ELIGIBILITY:
QUANTUM OF LOAN :
Securities can be replaced / substituted during the currency of the loan up to 10 times.
Nominal charges for substitution of securities
REPAYMENT:
PROCESSING CHARGES:
DOCUMENTS / FORMALITIES :
CANARA BUDGET
PURPOSE:
ELIGIBILITY:
QUANTUM :
RATE OF INTEREST:
Compare this with high rates charged for clean Personal Loans by some banks who
advertise aggressively about Personal Loans, but do not mention the rates!
REPAYMENT:
SECURITY :
PROCESSING CHARGES:
DOCUMENTS / FORMALITIES
PURPOSE:
ELIGIBILITY:
QUANTUM :
MARGIN :
REPAYMENT PERIOD:
• 5 Years
SECURITY
PROCESSING CHARGES:
DOCUMENTS / FORMALITIES :
CANARA GUIDE
OBJECTIVE
PURPOSE
ELIGIBILITY
LOAN QUANTUM
MARGIN
REPAYMENT
• Entire loan together with interest shall be repaid within 60 months in step up
• EMIs, with 3 months repayment holiday.
SECURITY
• Hypothecation of the assets created out of the loan & Suitable Co-obligation.
PROCESSING CHARGES
INSURANCE:
CANARA PENSOIN
PURPOSE:
ELIGIBILITY:
QUANTUM :
REPAYMENT :
• Up to 36 months in EMIs.
SECURITY :
TEACHERS LOAN
PURPOSE:
ELIGIBILITY:
QUANTUM :
PROCESSING CHARGES:
REPAYMENT :
• Up to 60 months.
SECURITY :
• Suitable co-obligation
DOCUMENTS/FORMALITIES :
SWARANA LOAN
PURPOSE:
REPAYMENT:
ELIGIBILITY:
QUANTUM:
• Maximum Rs.2,00,000/-
CANARA RENT
PURPOSE:
To provide loans to owners of the property to meet their business needs and / or
genuine personal needs, against rents receivable.
ELIGIBILITY:
The property should have been leased / rented out to PSUs / Central / State / Govt.
undertakings, reputed corporate, financial institutions, insurance companies, MNCs
and banks including Canara Bank branch / office / quarters.
QUANTUM:
• Up to 75% of the gross monthly rent receivables for the unexpired lease period
less TDS portion and advance rent collected.
SECURITY:
REPAYMENT:
PROCESSING CHARGES:
DOCUMENTS / FORMALITIES:
CANARA JEEVAN
In the present scenario, for most senior citizens and those nearing retirement the
biggest fear is the need for money to live comfortably after retirement. Reverse
mortgage loan scheme helps them to convert their dwelling house property into liquid
cash flows to meet their living expenses.
With this objective of meeting the financial needs of the Senior Citizens, a new loan
scheme is introduced, namely “CANARA JEEVAN” - Reverse Mortgage Loan
Scheme For Senior Citizens.
OBJECTIVE:
To meet the financial needs of Senior Citizens owning self occupied residential
property.
ELIGIBILITY
• Couples will be eligible as joint borrowers and in such cases, at least one of
them should be above 60 years of age and the spouse/joint borrower should
be more than 55 years of age.
• In case of jointly owned properties the joint owner who is aged above 60 years
shall be the first borrower.
• Commercial property not eligible under the scheme.
• Depending upon the age of the borrower and the assessed value of the
property. flats/house.
• Incase of independent house Minimum loan quantum Rs.5.00 lacs and
maximum Rs.50.00 lacs . (*)
• Incase of flats Minimum loan quantum Rs.5.00 lacs and maximum Rs.25.00
lacs. (*)
NATURE OF PAYMENT:
• One time Lump-sum payment, not more than 20 % of the eligible loan
amount.
• In case of periodic disbursement, the payments shall be made during the loan
period of 15 years or till the death of the last surviving spouse, whichever is
earlier.
INTEREST RATE: 10.50 % p.a. (fixed) with reset every three years.
SECURITY:
• The loan shall become due and payable only when the last surviving borrower
dies or would like to sell the house, or permanently moves out of the house.
DOCTORS CHOICE
PURPOSE:
• Purchase of equipment
SSMRV COLLEGE Page 60
A Study on loans and advances
ELIGIBILITY:
LOAN AMOUNT:
MARGIN
SECURITY:
COLLATERAL :
REPAYMENT :
CANARA MORTGAGE
ELIGIBILITY:
• New customers well introduced and credit worthy with satisfactory banker's /
market reports on them.
QUANTUM :
• Up to 50% on the value of the property offered as security as per the valuation
report of the bank's panel-valuer.
REPAYMENT :
SECURITY:
GUARANTEE:
PROCESSING CHARGES:
DOCUMENTS / FORMALITIES :
Analysis
Definition:
The tracing of things to their source, and the resolving of knowledge into its
original principles. The resolving of problems by reducing the conditions that are in
Interpretation
Definition:
Opinion regarding a set of facts. A degree of subjectivity is involved on the
part of the individual, based on his or her experience, personality, and biases. For
example, after performing a detailed analysis of the financial statements of a
company, two financial analysts may differ in their perceptions of what the market
price of the company's stock should be.
TABLE 1
ANALYSIS:
From this table we analyze that 8% of customers are from the age group of 18-25,
20% of customers are from the age group of 26-40, 56% of customers are from the
age group of 41-50, and lastly 16% of customers are from the age group of 50&>
respectively. The maximum customers are from the age group of 41-50 i.e. 56% of the
customers.
INTREPRETATION:
From the above table it is clear that the all age groups between 18 to 50&> are aware
of CANARA BANK.
GRAPH 1
AGE OF CUSTOMERS
18-25
50&> 8%
16%
26-40
20%
TABLE 2
ANALYSIS:
From this above table 20% customers are from business category, 58% of customers
are from Employees category, 6% of customers are from retired category, 10% are
from student’s category and lastly 6% customers are from agriculture category.
INTREPRETATION:
From this above table showing occupation classification of customers, maximum
customers are of Employees category i.e. 58% of the total customers and the second
maximum are from Business category i.e. 20% of the total customers. So many of
them customers are Employees and Business men's.
GRAPH 2
OCCUPATI ON OF CUSTOMERS
30
25
20
15
10
5
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BUSINESSEMPLOYEE RETIRED STU DENT
AGRICULTURE
A Study on loans and advances
TABLE 3
ANALYSIS:
From the above table showing association with the bank, 8% customers are
transacting with the CANARA BANK for less than 5 years, 20% customers are
transacting with the same bank for between 5 to 15 years, and 72% customers are
transacting with the bank for more than 15years.
INTREPRETATION:
From the above table showing customers association with the bank, the maximum
customers transacting with the bank from about more than 15 years i.e. 72% of the
total customers. The bank has many customers from many years. This is very much
advantageous to the bank.
GRAPH 3
<5 YEARS
8%
5-15YEARS
20% <5 YEARS
5-15YEARS
15YEARS&>
15YEARS&>
72%
TABLE 4
NO OF PERCENTAGE
RESPONDENTS
YES 40 80%
NO 10 20%
ANALYSIS:
From the above table it is shown that 80% of the respondents are satisfied with the
services provided by CANARA BANK. 20% of the respondents are not satisfied with
the services provided by the CANARA BANK.
INTREPRETATION:
From the above table showing the respondents satisfaction towards the services
provided by CANARA BANK, maximum no of respondents i.e. 80% of the total
respondents largely satisfied with the services provided by the CANARA BANK.
GRAPH 4
45
40
35
30
25
NO OF RESPONDE NTS
20
15
10
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Page 72
0
YES NO
A Study on loans and advances
TABLE 5
NO OF CUSTOMERS PERCENTAGE
WHO HAVE
AVAILED LOAN
FACILITY
YES 40 80%
NO 10 20%
ANALYSIS:
From the above table showing opinion of respondents who have availed loan facility,
80% of respondents have availed the loan from the bank and 20% have not availed
any loan facility from the bank
INTREPRETATION:
From the above table showing opinion of respondents who have availed loan facility,
maximum respondents i.e. 80% have availed loan facility from the bank.
GRAPH 5
40
35
30
NO OF CUSTOMERS
25 WHO HAVE AVAILED
20 LOAN FACILITY
15
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YES NO
A Study on loans and advances
TABLE 6
ANALYSIS:
From the above table given, 38% of customers have availed house loan, 25% of
customers have availed personal loan, 22% of customers have availed vehicle loan,
and lastly 15% of people have availed educational loan.
INTREPRETATION:
From the above table given, the maximum customers have availed house loan i.e. 38%
of the total customers. Hence many of the customers are focused towards the property.
GRAPH 6
T YPES OF LOANS
6
EDUCATIONAL LOAN
9
VEHICLE LOAN
1
PERSONAL LOAN 0
1
HOUSE LO AN 5
SSMRV COLLEGE Page 76
0 5 10 15 20
NO OF CUSTOMERS
A Study on loans and advances
TABLE 7
OBJECTTIVE YES NO
EASY REPAYMENT 43 7
OF LOAN
PERCENTAGE 87% 13%
ANALYSIS:
From the above given table, 88% of respondents are satisfied with the easy-repayment
of loan and easier also, 12% of respondents are not satisfied with the easy repayment
of loan.
SSMRV COLLEGE Page 77
A Study on loans and advances
INTREPRETATION:
From the above table, maximum respondents of 88% are satisfied with the repayment
of loan. The bank should pay attention to 12% of respondent who are not satisfied
with the repayment of loan
GRAPH 7
NO
13%
YES
87%
TABLE 8
OBJECTIVE YES NO
RATE OF INTEREST 35 15
PERCENTAGE 70% 30%
ANALYSIS:
From the above given table, 70% of respondents are satisfied with the rate of interest
of each type of loan and 30% of respondents are not satisfy
INTREPRETATION:
From the above table given the Maximum respondents of 70% are satisfied with the
rate of interest and the bank should pay attention to the remaining 30% of the
respondents who are not satisfied with the rate of interest.
GRAPH 8
RATE OF INTEREST
NO 15
RATE OF…
YES 35
YES NO
RATE OF
INTEREST 35 15
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A Study on loans and advances
TABLE 9
ANALYSIS:
From the above given table, 70% of customers wants the repayment of loan to be done
monthly and 30% of the customers wants the repayment of loan to be done quarterly.
INTREPRETATION:
From the above given table, the maximum no of customer are of 75% who wants the
repayment of loan to be done monthly. The bank should also pay attention for the
remaining 25% of customer who wants the repayment of loan to be done quarterly.
GRAPH 9
Q UARTERLY
25% MON THLY
QUAR TERLY
MONT HLY
75%
TABLE 10
OBJECTIVE YES NO
RECOMMENDATION 45 5
TO
FRIEND/RELATIVE
PERCENTAGE 90% 10%
ANALYSIS:
From the above table given, 90% of customers said that they will recommend taking
any type of loan from CANARA BANK and 10% of customers have said no.
INTREPRETATION:
From the above table given, the bank should pay attention to the less percentage of
customers who said that they will not recommend anyone to avail any types of loans.
GRAPH 10
RECOMMENDATION TO FRIEND/RELATIVE
YES YES
90% NO
10% NO
SUMMARY OF FINDINGS
The study reveals that the 72% of respondents have been transacting with the
bank for more than 15years. 20% of respondents have been transacting with
the bank between 5 to 15
years and recent 8% of customers who have been transacting with the bank are
less than 5 years.
As we observe from the study it is clear that 80% of respondents are satisfied
with the services provided by the Bank and 20% of the respondents are not
satisfied.
The no of respondents who have availed loan from the bank has been revealed
from this study. About 80% of respondents have availed the loan from the
Bank.
This study reveals that the different types of loans such as house loan, personal
loan, vehicle loan and educational loan. Majority of respondents have availed
house loan that forms 38% of respondents. 25% of respondents have availed
personal loan, 22% of respondents have availed vehicle loan and 15% of
respondents have availed educational loan.
An observation says that 88% of respondents are satisfied with the easy
repayment of loan and 12% of respondents are not satisfied.
As the Bank provide the loans by charging interest, the study reveals the
satisfaction of interest rates provided by the bank. 70% of respondents feel that
they are satisfied with the interest rates charged and 30% of them are not
satisfied.
As we observe from the study, 90% of respondents said that they will
recommend taking any type of loan from the Bank to their friends and
Relatives.
SUGGESTIONS
The documentations should be reduced and they should stick to the documents
mentioned in brochure rather than asking for more and more documents.
The Bank should pay attention to the small percentage of respondents who
have said that they will not recommend taking loans from their Bank to their
friends and relatives.
The Bank should pay attention to the small percentage of respondents who are
not satisfied with the easy repayment of loan and interest rates charged.
The Bank should try to reduce the interest rates of educational loan as it is
more compared to other bank, which will be useful for the students and also
SSMRV COLLEGE Page 87
A Study on loans and advances
introduce special schemes for students who want pursue their higher education
abroad.
The Bank’s ATM’S are a good place to increase awareness of its Bank’s loan
product because many individuals do not have time to go to enquire product.
The Bank has to advertise about new branches that are opened which will in
turn increase the number of walk-in to the Bank and which will increase in the
sale of every loans.
Salaried class of customer, whose incomes are directly deducted from their
account, can be considered as prompt borrowers who can avail concessional
interest or discount on processing fee.
Lower income group who have availed loan which are directly deducted from
salaries are facing lot of problem, as their net income will not be able to meet
their expenses. These customers must be provided with the flexible repayment
policy to meet unforeseen periods of financial difficulties.
The Bank has to simplified policies and procedures for advances to public.
Attempts can be made to extend more loan facilities for rural sectors.
CONCLUSION:-
QUESTIONNAIRE
Dear Sir/Madam,
I am IMAM HUSSAIN doing my undergraduate Management Course (BBM) at
S.S.M.R.V DEGREE COLLEGE. I am conducting a survey on “loans and
Advances at CANARA BANK”. This is compulsory for the completion of my
degree. So, kindly spare your valuable time in filling up this questionnaire. I thank for
your co-operation.
IMAM HUSSAIN
1) NAME :
3) OCCUPATION : Employees/services
Business
Retired
Student
Agriculture
Others specify
12) If NO why?
BIBILIOGRAPHY
WEBSITES:
www.wikipedia.com
www.thehindubusinessline.com
www.Canara bank.com
www.researchandmarkets.com
BOOKS: