PROJECT REPORT

“Analysis of various loans

offered by Punjab & Sind
Bank”

Submitted by-

Sony Bagga

(MBA-Finance)

Under Guidance of-

Prof. Abhishek jain

iper
Institute of Professional Education and Research,
Bhopal
October 2010
Page58
 Preface

“A likely impossibility is always preferable to an unconvincing possibility”

This idea is the simplified version to provide the inspiration to the approach performed
for the project .The project is based on the data collection and thereby developing a
hypothesis to provide direction to reach a rational conclusion. Different statistical tools
have been applied like consolidated statement, comparative statement, Trend analysis,
common size statement, correlation and t-test. This assignment inspires you to reach to
a logical result giving an opportunity to reach next dimension of analysis and know-how
about the economical status around your city, perception of people in your city towards
financial development and risk aversion.

The project on completion clearly explains you that the statistical method essentially
depends on having furnished, not merely a list of the significant causes, which is correct
so far as it goes, but a complete list.

For example, suppose three factors are taken into account, there must be no other
significant factor. If there is a further factor, not taken account of, then the method is not
able to discover the relative quantitative importance of the first three.

If so, this means that the method is only applicable where is able to provide beforehand
a correct and indubitably complete analysis of the significant factors. The method is
neither one of discovery nor of criticism.

Page58
 Acknowledgement

This project would not have been possible without the help of Prof.
Abhishek Jain, my project guide who has been co-operative extensively. As
I faced various problems with my topic of project because of the
unavailability of information, Prof. Abhishek Jain has given me incredible
motivational support and helped in successful completion of this project.

This project also involves the dedication of my friends who have helped me
in gathering data.

A special thanks to Mr. Daljit Singh, who has helped me in getting the
financial information of the bank which is otherwise difficult to get.

Last but not the least, Microsoft Office 2007 made the task easier.

Sony Bagga

MBA (Finance)

IPER, Bhopal Page58

 declaration

I Sony Bagga, hereby declare that this research report on “Analysis of

various loans offered by Punjab & Sind Bank” compiled and submitted
by me is an original work concluded under the guidance of Prof. Abhishek
Jain.

It is work done by me as partial fulfillment of the degree in MBA (Finance).

No part of this research will be published or copied for any purpose.

Place- Bhopal Signature

October’10

(Sony Bagga)

Page58
 contents

 Preface

 Acknowledgement

 Declaration

 Chapter-1--Conceptual
Overview.......................................................................7-8

 Chapter-2--Research
Methodology...............................................................9-14

o 2.1-Objectives of the study ……10

o 2.2-Methodology ……11

o 2.3-Significance of the topic ……12

o 2.4-Hypothesis ……13

o 2.5-Limitations ……14

 Chapter-3--Theoretical
background...............................................................15-32

o 3.1- Profile of the organization ……16-17

o 3.2- Important schemes of the Bank…...18-19

o 3.3- Special Tie-ups …….20

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 o 3.4- P & S Bank loan schemes …….21-32

 Chapter-4--Data
Analysis......................................................................33-79

 Chapter-5 – Major Findings &

Suggestions...............................................................80-83

 Bibliography..............................................................84

 Annexure.................................................................. 85-87

Page58
Chapter - 1
Conceptual
overview
Page58
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of
financial assets over time, between the lender and the borrower.
The borrower initially receives an amount of money from the lender, which they pay
back, usually but not always in regular installments, to the lender. This service is
generally provided at a cost, referred to as interest on the debt. A borrower may be
subject to certain restrictions known as loan covenants under the terms of the loan.
Acting as a provider of loans is one of the principal tasks for financial institutions. For
other institutions, issuing of debt contracts such as bonds is a typical source of funding.
Bank loans and credit are one way to increase the money supply.
Legally, a loan is a contractual promise of a debtor to repay a sum of money in
exchange for the promise of a creditor to give another sum of money.

Facts about the loan

Bank plays a very important role in providing the loan of different types. One should
know very clearly that which cheap loans are good for the person.
Advance loans are also known as pay day loans, these loans are for the purpose to hide
the expenses related with the borrower till the pay day, this is also known as cash
advances.
If one want to purchase a particular car, house etc. then instant loans is very suitable
and appropriate. The information about the low loans is available on the internet and the
people should mark the one which is appropriate for meeting the requirements.

Loans are now a day’s very essential for the survival, as we can see that everybody is
taking loan for the following purposes and these are as follows

• To Buy A House
• To Buy Different Products Like Home Appliances
• To Buy Property
• To Buy The Transport Etc
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Best loan is the one on which the interest rate is not very much and it is in relation with
the buying power of the customer.
These loans provide the benefits to the people in many ways; the loans provide the
opportunity for the business people to do something good in the corporate sector.

Chapter-2
Research
methodology
Page58
 2.1-Objective of study

Primary objective
To study the “Analysis of Loans” provided by P & SB.

Secondary objective
1. To compare the various loans provided by P & SB such as-

 Housing loan

 Education loan

 Personal loan

 Business loan

 Auto / Conveyance loan

 Consumer loan

2. To study the trend analysis of various loan schemes.

3. To find out the preference of customers for various loans by getting

questionnaire filled in through respondents.

4. To study the comparative statement of P & SB loans.

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5. To study the common size statement of P & SB loans.

6. To find out whether the hypothesis taken about the acceptance of loans is

correct or not.

2.2- Methodology

Sources of Information
Primary source
 Mr. Daljit Singh - Senior Manager of P & S Bank Zonal office, Bhopal

 Questionnaire

Secondary Source
o PSB pamphlets o Magazines

o Books o Newspapers

o Journals o Internet

Sampling Method
Random & Judgment Sampling

Sampling Size
50

Tools to be used for analysis & information

 Percentage  3- D Pie-  Bar-graphs
s charts
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 Statistical tool
• Trend Analysis

• Common size statement

• Consolidated Statement

• Comparative statement

• Correlation

• t-test

Page58
 2.3- significance of the topic
It's important to know all the ins and outs of a loan. In truth not many people can
purchase everything, whether it is a house, car or washing machine without taking
some form of a loan. It goes without saying that loan has eventually become popular
among general public. Virtually everybody who purchases something does so with
the use of a mortgage. Whatever type of loan you eventually decide to take,
remember that this should be made only after a market survey. The reason is that
the loan is something we have to usually carry with us for a great part of our lives.
Hence the decision when and when not to take such a loan is very serious. The
answer is to take a loan if you have to only when you can pay it all back the moment
you feel you want to.

 Justification of study –

The analysis of various types of loan provided by P & SB helped in

distinguishing various schemes. This includes quantum of finance, margin
asked, rate of interest, processing fee, security to be given etc. Thus one can
decide upon whether the schemes comply with their requirement or not.

 Importance to the Organization –

A detailed analysis of loans will also benefit the organization to point out its
shortcoming and overcome it to fulfill the requirement of its customers. This is
done by making consolidated statement and plotting out the trends of various
loans and comparing loans. Questionnaire helped in adjudging the satisfaction
level and overall rating of the services offered by the bank.
 2.4- Hypothesis

Whether the acceptance of loan by the public depends

upon various loan schemes offered by the bank.
 2.5- Limitations

 Time was the major factor of limitation due to which detailed analysis of the
loans could not be done.

 Sample size was reduced from 100 to 50 as it was difficult to find the
customers of Punjab & Sind Bank.

 Access to information was another major limitation as the Bank was not
disclosing much of their financial information.

 Behavior of respondents was not as expected because of their unwillingness

to fill in the questionnaire.

 Change of project topic in the midst of project making due to unavailability of

information from former company.

 There were no existing facts about the project. No work on this topic was done
earlier, so it was a fresh start and required lots of brainstorming.
Chapter - 3

Theoretical
background
 3.1- Profile of Organization

Punjab & Sind Bank

(A Govt. of India Undertaking)

HISTORY

It was in the year 1908, when a humble idea to uplift the poorest of poor of the land
culminated in the birth of Punjab & Sind Bank with the far-sighted vision of luminaries
like Bhai Vir Singh, Sir Sunder Singh Majitha and Sardar Tarlochan Singh. They
enjoyed the highest respect with the people of Punjab. It is the first bank in
Northern India to get ISO 9002 certification for its selected branches. The total
business of the Bank stood at Rs. 200525 millions.

The chairman & Managing Director of the bank is Mr. R.P.Singh. The senior
manager Bhopal Zonal office is Mr. Daljit Singh. The Banking Ombudsman of
Bhopal is Shri B.P.Kanungo (Madhya Pradesh & Chhattisgarh)

Punjab & Sind Bank has 760 branches and 131 extension counters. It has
opened an exclusive Housing Finance Branch in order to cater the credit need of the
house aspirants. To groom the youngsters, it has its own Hockey Academy at
Jalandhar.

PSB has been restructuring, closing or relocating underperforming branches to

improve profits. It has asked the Indian government, its owner, to grant it an initial
public offering.
 VISION & MISSION

Corporate Vision

We envision emerging as a strong vibrant Bank through synchronization of the

human, financial and technological resources.

Corporate Mission

o To put in place the effective Risk Management and Internal Control Systems.

o To adopt high-level technology standards.

o To strive to achieve excellence in Customer Service.

o To achieve the highest standards of transparency and accountability in the

conduct of banking business.

o To adopt professional approach in effectively managing financial as well as

non-financial risks.

o To maximize profitability and profits of the Bank with due compliance of

prudential guidelines.

o To maximize competitive risk adjusted return on capital.

 3.2- important schemes of the bank
 Credit Facilities for Agriculturists
 There are number of credit schemes for farmers which are liberally available
to our rural and semi urban branches.
 The Bank has very attractive Kisan Credit Card Scheme for meeting the
credit needs of the farmers with provision of personal accident insurance
coverage of KCC holders.
 The Bank has introduced a unique P&S Bank Diamond Krishi Card (DKC)
Scheme to provide more credit and better facilities to A Class farmers.
 For tractor financing Bank has made TIE-UP arrangement with Punjab
Tractor, Eicher Tractor, Bajaj Tempo and Escorts whereby borrower gets
incentives.
 Small Scale Industries
 We extend credit to SSI for meeting financial requirements for purchase of:
 Machinery and equipment
 For construction of building
 For working capital requirements.
 LUCC/KVIC Scheme
 The bank encourages landing under KVIC Scheme and other Govt.
sponsored schemes. We have introduced LAGHU UDYAMI CREDIT CARD
SCHEME (LUCC) for working capital loan.
 ACC Scheme
 Under Artisans credit card scheme hassle free credit facility up to Rs. 2.0 lac
is provided to artisans for their investments needs as well as working capital
requirement.
 Housing Finance
 We have very liberal policy for housing finance to the members of the public.
 Car Loan
 Under this scheme a borrower can get a loan to buy a car on very attractive
terms for personal use.
 Professional Loan
 A loan for professional like Doctors, Engineers, Chartered Accountants,
Lawyers, Architects, etc. to meet their professional needs is given.
 Educational Loan
 To encourage the youth in attaining expertise in educational and professional
fields, our bank is making available finance.
 Loan against own Deposit/Govt. Securities
 We offer loan against bank's own deposit and Govt. Securities like NSCs,
IVP/KVC, etc., for personal use or business purpose.
 Personal Clean Loan Facility
 We offer personal clean loan facility to officials of Govt. and Public sector
undertaking, local bodies, reorganized universities and schools run by
Govt./Local bodies with confirmed service of at least 5 years.
 Clean Loan Scheme for retired personnel/pensioners
 Who have retired from Central/State Govt. or any PSU and should be drawing
his/her pension through our bank.
 ODP Scheme for traders/retailers
 Under this scheme credit is available to traders/retail traders who are in
business for at least 5 years.
 Loan against rent receivables
 We offer this scheme to land lords/owners of commercial, residential property
who have rented their premises to Govt. Deptt./PSUs/Pvt. Ltd.
 ODP Scheme for Contractors
 Who are registered and are income tax payee, having minimum three years of
experience in his business (Contractor ship).
 Festival Loan Scheme
 Under festival loan scheme clean loans are granted.

 Udyogini Scheme
 Under udyogini scheme credit facilities are granted to women entrepreneurs to
avail the loans on liberal terms and exclusive catering of credit under Direct
agriculture activities.
 Club Loan Scheme
 Under club loan scheme employees of reputed clubs in metropolitan/urban
centres are granted credit facility for purchase of consumer items/for personal
use.
 Golden Jubilee Rural Housing Scheme (GJRHS)
 Under this scheme, borrower residing in rural/semi urban areas can avail loan.
 Swaranjayanti Gram Swarozgar Yojana (SGSY)
 Under this scheme, the persons below the BPL level such as rural poor land,
land less educated unemployment, rural artisans, disabled handicapped.
 Prime Minister Rozgar Yojana (PMRY)
 The objective of the scheme is to provide sustained employment to educated
unemployed urban youth in micro enterprises.
 Differential Rate of Interest (DRI) Scheme
 This scheme is to assist poorest of the poor so as to bring them above BPL.
 3.3- special tie-ups

PSB ICICI BANK CREDIT CARD

The "PUNJAB & SIND BANK-ICICI BANK" Co-branded Credit Card will help
not only in retaining the existing clientele but also help in tapping the new
customers. It will also help in increasing the income by way of
issuance/renewal fees, commission on usage and fulfillment charges. The
credit card account will be maintained by ICICI Bank. The ICICI Bank will
provide all operational services for the credit card covering periodical bills,
sending statement, collection, payments and processing of charges etc. The
ICICI bank assumes the responsibility for collection, recovery of all charges
and fees due by the co-branded card member in respect of co-branded credit
card.

PSB AVIVA ALLIANZ INSURANCE

Punjab & Sind Bank has special tie-up arrangements for Non Life insurance
business with M/s Bajaj Allianz General Insurance Company and Life
Insurance business arrangements with M/s Aviva Life Insurance Company
India Pvt. Ltd. for providing its valued customers all the insurance related
services under one roof. The Bank has established insurance desks
throughout the country at the following branches where Insurance Officers are
posted and have also allotted cluster of surrounding branches.

Thus Punjab & Sind Bank offers a wide variety of services and provides loans
according to individual requirements.
 3.4 – p & s bank loan schemes

HOUSING LOANS
Bank's Housing Loan Scheme facilitates for purchase of Plot and for Construction/
Acquisition/ Purchase/ Extension/ Repair / Renovation.

 Eligibility
 Individuals, Group of individuals, and individual members of Co-operative
housing societies are eligible under the scheme. Maximum age limit of the
borrower to be as under-
 For salaried class 60 years
 For salaried class ( Pensionable) 65 years
 For salaried class, pensionable and major son (earning member) stands
as co-borrower 15 years repayment irrespective of date of retirement.
 For other than salaried class 65 years
 In case of salaried class pensionable and major son (earning member) stands as co-
borrower the income of the co-borrower can be clubbed / considered for computing
the eligibility of repayment.

 Quantum of Finance – Upto Rs 150 Lacs.

 Margin
 For construction of house or purchase of house / flat - 25% of the value of
property including registration charges / stamp duties.
 For carrying out repairs / renovation / additions / alterations to existing house /
flat- 25% of estimated cost
 For purchase of plot margin shall be 50% of the cost of land / plot.

 Rate of interest

Category For 5 Years For 10 Years For

20 Years

Up to Rs.20lac BPLR (-) 3.50% BPLR (-) 3.25%

BPLR (-) 2.50%
 Above Rs.20lac BPLR (-) 2.50% BPLR (-) 1.50%
BPLR(-)1.50%

Additional interest of 0.50% for loans sanctioned above Rs.20.0 lac.

 Processing fee
 0.50% of the sanctioned amount .Maxm.Rs.10,000/-
 Processing fee is exempted for Central/ State Govt/ P.S.U. employees.
 Security
 The security for the loan shall be first charge by way of equitable / registered
mortgage of the property. The title of the property must be clear , marketable
and free from encumbrance.
 If an intending borrower who has purchased / has entered into an agreement
to buy housing property on power of attorney basis offers sufficient collateral
in the shape of equitable mortgage of any other property and / or Govt.
Security (ies), the same may be considered and the property / security
obtained at the time of sanction may be released after obtaining the equitable
mortgage of Housing property financed which shall remain the primary
security for the loan. During the intervening period the property financed by
the bank shall remain charged to the bank.

 Repayment
 The loan be allowed only in the shape of term loans for a maximum tenors of
20 years with the following criteria:
 For salaried class Loan to be adjusted up to the age of 60 years
 For salaried class (pensionable) Loan to be adjusted up to the age of 65
years
 For salaried class, pensionable and major son (earning member) stands
as co-borrower 15 years repayment irrespective of date of retirement
 For other than salaried class Loan to be adjusted up to the age of 65 years

 Prepayment
Prepayment charges will be @ 1.0 % of the balance outstanding on the date of
adjustment if the account is adjusted through takeover of loan by another bank.
No pre-payment charge be levied, if the borrower adjust the account in full and
final before scheduled time from his own verifiable legitimate sources i.e. on
receipt of retirement benefits, maturity proceeds of NSC , LIC .etc

 Guarantee
 In case of PSU / Govt. employees where EMI is paid through salary deduction
guarantee of spouse. In case the guarantee of spouse is not available then
suitable third party guarantee required.
 In all other cases, as far as possible, one more guarantee of substantial
means in addition to the guarantee of spouse / suitable guarantee.
 Personal Loan

To meet any genuine personal credit requirement viz for domestic consumption,
Medical expenses, Marriage, Travel, Social ceremonies etc.

 Eligibility
 Employees of Central / State Govt., PSUs ,Local Registered Bodies,
universities recognized by U.G.C. ,Schools/ colleges run by Govt. or local
bodies with confirmed service of 3 years Professionals / Self employed ( like
Doctors , Engineers , Architects & CAs ) , Employees of Bank's corporate
clients , salaried employees of reputed companies. If the spouse is working in
Govt. Deptt / Public Sector Undertaking /any other organization the income of
spouse may be clubbed for availing the said loan.
 Existing borrowers of the Bank having good track record and adequate
collateral security are eligible for personal loans with the under noted
provisions.
 Eligibility to be judged from the past track record of at least 2 years and
that the existing borrowal a/c is a standard one.
 The existing collateral security to be retained / attached while extending
Personal Loans to these borrowers.

 Age Limit
 For Salaried Class - 65 years
 For pensioners -- 65 to 70 years
 For professionals/ -- 65 years Self Employed

 Nature of facility - Term Loan

 Quantum of loan
 For Salaried Class and Pensioners
  For salaried Class: 12 Months Gross Salary / 20 months of net salary or
Rs.2.0 lac whichever is less.
 Pensioners up to the age of 65 years - 10 months of gross pension or
Rs.2.0 lac whichever is less.
 For Pensioners above the age of 65 years and up to the age of 70 years -
5 months of gross pension or Rs.1.0 lac whichever is less.
 For Professionals/ Self Employed: Minimum of Average of last three years
income as per Income tax return or Rs.3.0 lac .
 Existing Borrowers of the Bank : In case of partnership firm , each partner
may be allowed to avail loan for a maximum of Rs.1.0 lakh subject to the
condition that total amount of loan granted to all the partners cumulatively
should not exceed 10% of the loan / limit sanctioned. (Existing collateral
security to be retained).

 Rate of interest
 For Salaried Class and Pensioners : - BPLR
 For Professionals : BPLR + 1

 Processing fee
1.0% of the loan amount. However, ZMs may reduce /waive the processing fee in
case of group of at least 10 accounts from one institution

 Repayment
Maximum repayment period to be 48 months.

 Guarantee
Third party / mutual guarantee/ guarantee of spouse except in salaried class
cases where installment is paid by salary deduction or undertaking from employer
for remitting the terminal benefits are available.
 Conveyance/

Auto Loan scheme

Facilitates owning a vehicle with the friendliest and most convenient car loan. Either
one can purchase a new Car/ Van/ Jeep or raise loan to purchase old vehicles that
are not older than 2 years.

 Eligibility

Employees of Central / State Govt., PSUs, Local Registered Bodies, universities

recognized by U.G.C. ,Schools/ colleges run by Govt. or local bodies with
confirmed service of 3 years Professionals /Self Employed , Employees of
corporate clients of Bank and General public.

 Age limit - 21 to 65 years

 Quantum of loan

 Salaried Class :

 For New Vehicles :Thrice the average of annual income of past three
years as per ITR / Salary details subject to a maximum of Rs.10 lac .
( Income of spouse can be clubbed) .

 For Old Vehicles: Quantum of loan not to exceed Rs.5 lac

 Professionals/ Self employed, CAs doctors , Architects and General public:

  For new vehicle segment. Thrice the average of annual income of the past
three years as per ITR subject to a maximum of Rs.10 lac (Income of
spouse can be clubbed).

 For Old Vehicles : Quantum of loan not to exceed Rs.6 lac Beyond Rs.10
lac , the proposals should be sanctioned after proper appraisal outside the
purview of schematic lending. For this BM /ZM may take up sanctions with
in their ' maximum aggregate discretionary powers" for term loans for
higher limits upto Rs.30 lac , after compliance of guidelines like margin,
income etc

 Margins

 For New vehicles 10%

 For old vehicles 30% ( Amount of loan shall not exceed 70% of market value
of vehicle or value of vehicle net of depreciation @ 20% whichever is low)

 Rate of interest

Category Up to Rs 3 Lac Above Rs 3 Lac

General Public BPLR (-) 2.75% BPLR (-) 2.25%

 Processing fee

Rs.100/- for two wheelers and Rs.500/- for Cars /Vans / Jeeps

 Security
 Hypothecation of vehicle. RC / comprehensive insurance policy with bank clause
incorporated therein

 Guarantee

Third party / mutual guarantee / guarantee of spouse except in salaried class

cases where instalment is paid by salary deduction and undertaking from
employer for remitting the terminal benefits is available.

 Repayment

 For new vehicles 60 months.

 For old vehicles Maxm.36M

 Prepayment Charges

1% of the outstanding balance.

 PSB Consumer Loan Scheme

The scheme facilitates for purchase of consumer durables other than vehicles.

 Eligibility

Employees of Central / State Govt., PSUs, Local Registered Bodies, universities

recognized by U.G.C., Schools/ colleges run by Govt. or local bodies with
confirmed service of 3 years. Professionals /Self Employed, Employees of Bank's
corporate clients and General public.

 Age limit - 21 to 65 years

 Quantum of loan
Category Quantum of Loan

 Employees of Central/ State Govt. PSUs , Up to the gross annual income. Maxim Rs.5.0
organizations , employees of established & lac( Income of spouse can be clubbed )
recognized schools/ colleges / local
registered bodies and corporate clients of
Bank where loan installment is paid by
salary deduction or undertaking from
employer for remitting the terminal benefits
is available
 Professionals/ Self employed, CAs, doctors,
Architects & General Public.

 Twice the average of annual income of past three

years as per return filed or Rs.6.0 lac whichever
is less. (Income of spouse can be clubbed )
 Margins - 10 %

 Rate of interest – BPLR

 Processing fee - Rs.100/-

 Security –

No collaterals, only hypothecation of assets created .

 Guarantee

Third party / mutual guarantee / guarantee of spouse except in salaried class

cases where installment is paid by salary deduction or undertaking from employer
for remitting the terminal benefits is available.

 Repayment - 12 to 60 Months

 Prepayment Charges

1% of the outstanding balance.

 Educational Loan Schemes

 Objective of the scheme

The educational loan scheme outlined below aims at providing financial support
from the banking system to deserving and / meritorious students for persuing
higher education in India and abroad. The main emphasis is that every
meritorious student though poor is provided with an opportunity to persue
education with the financial support from the banking system with affordable
terms and conditions. No deserving student is denied an opportunity to persue
higher education for want of financial support.
 Applicability of the Scheme
The scheme detailed below could be adopted by all commercial Banks. The
scheme provides broad guidelines to the banks for operationalising the
educational loan scheme and the implementing bank will have the discretion to
make changes suiting to the conveninence of the students / to make it more
customer friendly.

 Eligibility Criteria
 Student Eligibility :

 Student should be an Indian National
 Secured admission to professional / technical courses in India or abroad
through entrance Test / Merit Based Selection process.
 Courses Eligible:
 Studies in India : ( Indicative List)
• Graduation courses: B.A. B.Com, B.Sc., etc.
• Post Graduation courses: Masters & Phd.
• Professional Courses: Engg., Medical, Agriculture, Veterinary, Law
,Dental, Management , Computer etc.
• Computer certificate courses of reputed institutes accredited to Deptt.
of electronics or institutes affiliated to university.
• Courses like ICWA , CA , CFA etc.
• Courses conducted by IIM, IIT, IISc , XLRI, NIFT, etc.
• Courses offered in India by reputed foreign universities .
• Evening courses of approved institutes.
• Other courses leading to diploma / degree etc. conducted by colleges/
universities approved by UGC/ Govt/ AICTE /AIBMS/ ICMR etc.
• Courses offered by National Institutes and other reputed private
institutions. Banks may have the system of appraising other institution
courses depending on the future prospects/recognition by user
institutions.
 Studies Abroad :
• Graduation For job oriented professional/technical courses offered by
reputed universities.
• Post Graduation MCA,MBA,MS etc.
• Courses conducted CIMA-Londin, CPA in USA etc.
 Expenses considered for Loan
 Fee payable to College/School/hostel.
 Examination/library/laboratory fee.
 Purchase of books/equipments/instruments/uniforms.
 Caution deposit/building fund/refundable deposit supported by institution
bills/receipts.
 Travel expenses/passage money for studies abroad.
 Purchase of computers-essential for the completion of the course.
 Any other expense required to complete the course- like study tours, project
work, Thesis etc.

 Quantum of Finance
 Need based finance subject to repaying capacity of the parents/students
with margin and the following ceilings:
 Studies in India - Maximum Rs. 7.50 lacs
 Studies abroad - Maximum Rs. 15.00 lacs.
 MARGIN
 Up to Rs. 4.00 lac : NIL
 Above Rs. 4.00 lac:
 Studies in India : 5%
 Studies Abroad : 15%
 Scholarship/assistantship to be included in margin.
 Margin may be brought in on year to year basis as and when disbursements
are made on a pro-rata basis.

 SECURITY
 Upto Rs. 4.00 lac : No Security
 Above Rs. 4.00 lac: Collateral in the form of a suitable third party
 Upto Rs. 7.5 lac guarantee. The Bank may, at its discretion waive third party
guarantee if satisfied with the net worth/means of parent who would be
executing the documents as “joint borrower.”
 Above Rs. 7.5 lac Collateral security of suitable value or suitable third party
guarantee along with the assignment of future income of the student for
payment of installments.

NOTE:

 The loan documents should be executed by both the student and the
parent/guardian as joint borrower.
 The security can be in the form of land/building/Govt. securities/Public Sector
Bonds/Units of UTI, NSC, KVP, LIC Policy, gold, shares/debentures, bank
deposit in the name of student/parent/guardian or any other third party with
suitable margin.
 Wherever the land/building is already mortgaged, the unencumbered portion can
be taken as security on II charge basis provided it covers the required loan
amount.
 In case the loan is given for purchase of computer the same is to be
hypothecated to the Bank.
 Banks who wish to support highly meritorious/deserving students without security
may delegate such powers to fairly higher level authority.

 RATE OF INTEREST

Category Up to Rs 4 Lac Above Rs 4 Lac

General Public BPLR (-) 1.00% BPLR (-) 0.50%

 Staff BPLR (-) 2.25% BPLR (-) 1.50%

 The concession of 1% additional interest on account of service shall be

governed by HO PS Circulatory letter No.67/2004 dt 15.12.2004 as already
laid down under the scheme.
 Further, an additional benefit of 0.50% will be applicable to those borrowers
(including staff) who offer additional collateral covering 100% of the loan
amount.
 Simple interest to be charged during the Repayment holiday/moratorium
period Penal interest @ 2% be charged for above Rs. 4.00 lacs for the
overdue amount and overdue period.

 Appraisal/Sanction/Disbursement
 In the normal course, while appraising the loan the future income prospects of
the student will be looked into. However, where required, the means of
parent/guardian could also be taken into account to evaluate re-payment
capability
 The loan to be sanctioned as per delegation of powers preferably by the
Branch nearest to the place of domicile.
 No application for educational loan received should be rejected without the
concurrence of the next higher authority.
 The loan to be disbursed in stages as per the requirement/demand directly to
the Institutions/Vendors of books/equipments/instruments to the extent
possible.

 Repayment
 Repayment holiday/Moratorium: Course period + 1 year or 6 months after
getting job, whichever is earlier.
 The loan to be repaid in 5-7 years after commencement of repayment.
 If the student is not able to complete the course within the scheduled time ,
extension of time for completion of course may be permitted for a maximum
period of 2 years.
 If the student is not able to complete the course for reasons beyond his
control, sanctioning authority may at his discretion consider such extension as
may be deemed necessary to complete the course.
 The accrued interest during the repayment holiday period to be added to the
principal and repayment in Equated Monthly Installments (EMI) fixed.
  1% interest concession may be provided for loanees if the interest is serviced
during the study period when repayment holiday is specified for interest /
repayment under the scheme.

 Follow Up

Banks to contact college/university authorities to send the progress report at

regular intervals in respect of students who have availed loans.

 Processing Charges

No processing/upfront charges may be collected on educational loans.

 Capability Certificate

 Banks can also issue the capability certificate for students going abroad for
higher studies. For this financial and other supporting documents may be
obtained from applicant, if required.

(Some of the foreign universities require the students to submit a certificate

from their

bankers about the sponsors’ solvency/financial capability ,with a view to

ensure that the sponsors of the students going abroad for higher studies are
capable of meeting the expenses till completion of studies).

 Other Conditions

 No due certificate need not be insisted upon as a pre-condition for considering

educational loan.

 However, banks may obtain a declaration/an affidavit confirming that no loans

are availed from other banks.

 Loan applications have to be disposed of within a period of 15 days to 1

month, but not exceeding the time norms stipulated for disposing of loan
applications under priority sector lending.
 In order to bring flexibility in terms like eligibility, margin, security norms,
banks may consider relaxation in the norms on a case to case basis
delegating the powers to a fairly higher level authority.

Chapter - 4
 Data
Analysis

Data Collection
Punjab & Sind Bank, BHOPAL - Loans Sanctioned from 2007 to 2010

Housing Loans Number Amount issued (in lakhs)

1-4-07 to 31-03-08 167 685
1-4-08 to 31-03-09 99 385
1-4-09 to 31-03-10 70 374

Educational Loans Number Amount issued (in lakhs)

1-4-07 to 31-03-08 47 74
1-4-08 to 31-03-09 12 34
1-4-09 to 31-03-10 51 259

Business Loans Number Amount issued (in lakhs)

1-4-07 to 31-03-08 191 654
1-4-08 to 31-03-09 276 841
1-4-09 to 31-03-10 166 700

Personal Loans Number Amount issued (in lakhs)

1-4-07 to 31-03-08 110 50
1-4-08 to 31-03-09 96 97
1-4-09 to 31-03-10 96 68
Conveyance Loans Number Amount
1-4-09 to 31-03-10 9 20

Consumer Loans Number Amount

1-4-09 to 31-03-10 4 6

Data Representation, Analysis & Interpretation

Punjab & Sind Bank Loans Analysis

Consolidated Statements of P & SB loans

Housing Loans
Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 5 152 73 42
5-10 252 81 67
10-15 52 32 21
15 & above 229 199 244
Total 685 385 374
Interpretation: The consolidated statement of housing loan reveals that there is a
decrease in the amount of loan from 2007-08 i.e. by 43.7.The difference in the last two years
is though minor.

Educational Loans

Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 3 44 8.5 50
3-6 14 6.5 97
6 & above 16 19 112
Total 74 34 259
Interpretation: The consolidated statement of educational loan reveals that there is an
substantial increase in the amount of loan from 2007-08 & 2008-09 i.e. 86.8%.Thus the
popularity of educational loans have been increasing as the disbursement of this loan is easy.

Personal Loans

Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 1 29 53 25
1-2 7 15 12
2-3 14 29 31
Total 50 97 68
Interpretation: The consolidated statement of personal loan reveals that there is an
increase in the amount of loan from 2007-08 & then sudden decrease from 2008-09 i.e. 30%.
This may be due the changes of policy or increase in the interest rate.

Business Loans

Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 5 131 169 140

5-10 164 210 175
10-15 98 126 105
15 & above 261 336 280
Total 654 841 700
Interpretation: The consolidated statement of business loan reveals that there is a
mediocre increase in the amount of loan from 2007-08. The overall financial position of this
loan is satisfactory.

Auto/ Conveyance Loans

Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 3 - 9 -
3-6 - 4 -
6 & above - 7 -
Total - 20 -
Interpretation: The consolidated statement of auto loan reveals that loans were taken
only in the year 2008-09 while it was nil in other two years.

Consumer Loans

Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 3 - 2.5 -
3-6 - 3.5 -
Total - 6 -
Interpretation: The consolidated statement of auto loan reveals that loans were taken
only in the year 2008-09 while it was nil in other two years.

Comparative Statements of P & SB loans

Housing Loans
2008- 2009 2009-2010

In Rs. In % In Rs. In %

-79 -52 -31 -42.4

-171 -68 -14 -17.28
-20 -38 -11 -34.37
-30 -13 +45 +22.61
Interpretation: The comparative statement of housing loan reveals that there has been
increase in the loan by 96.3%

Educational Loans
2008- 2009 2009-2010

In Rs. In % In Rs. In %

-35.5 -81 41.5 488.23

-7.5 -53.57 90.5 1392.3
3 18.75 93 489.47

Interpretation: The comparative statement of educational loan reveals that there has
been a substantial increase in the loan by 96.7%

Personal Loans
2008- 2009 2009-2010

In Rs. In % In Rs. In %

24 82.75 -28 -52.83

8 114.28 -3 -20
15 107.14 2 6.89

Interpretation: The comparative statement of housing loan reveals that there has been
decrease in the loan by 87%
 Business Loans
2008- 2009 2009-2010

In Rs. In % In Rs. In %

38 29 -29 -17.15
46 28 -35 -16.66
28 28 -21 -16.66
75 28 -56 -16.66

Interpretation: The comparative statement of housing loan reveals that there has been
tremendous decrease in the loan.

Auto/ Conveyance Loans

2008- 2009 2009-2010

In Rs. In % In Rs. In %

9 - -9 -100
4 - -4 -100
7 - -7 -100

Interpretation: The comparative statement of housing loan reveals that there has been
decrease in the loan.
 Consumer Loan
2008- 2009 2009-2010

In Rs. In % In Rs. In %

2.5 - -2.5 -100

3.5 - -3.5 -100

Interpretation: The comparative statement of housing loan reveals that there has been
decrease in the loan.

Trend Analysis of p & SB loans

Housing Loans
Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 5 100 48.02 27.63

5-10 100 32.14 26.58
10-15 100 61.53 40.38
15 & above 100 86.89 106.55
Total 100 56.20 54.59
Interpretation: The trend analysis of housing loan reveals that there has been no
particular trend of increase & decrease. The percentage in 2006-07 is 56.20 as compared to
100 in 2007-08 & in 2009-10 are 54.59 as compared to 100 in 2008-2009

Educational Loans
Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 3 100 19.31 113.63

3-6 100 46.42 692.85
6 & above 100 118.75 700
Total 100 45.94 350
Interpretation: The trend analysis of educational loan reveals that there has been
substantial increase in 2009-10. The percentage in 2008-09 is 45.94 as compared to 100 in
2007-08 & in 2009-10 are 350 as compared to 100 in 2008-09

Personal Loans
Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 1 100 182.75 86.20

1-2 100 214.28 171.42
2-3 100 207.14 221.42
Total 100 194 136
Interpretation: The trend analysis of personal loan reveals that there has been no
particular trend of increase & decrease. The percentage in 2008-09 is 194 as compared to
100 in 2007-08 & in 2009-10 are 136 as compared to 100 in 2008-09

Business Loans
Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 5 100 139 106.87

5-10 100 128.04 106.70
10-15 100 128.57 107.14
15 & above 100 128.73 107.27
Total 100 128.59 107.03
Interpretation: The trend analysis of business loan reveals that there has been no
particular trend of increase & decrease. The percentage in 2008-09 is 128.59 as compared to
100 in 2007-08 & in 2009-10 are 107.03 as compared to 100 in 2008-09

Auto/ Conveyance Loans

Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 3 100 - -
3-6 100 - -
6 & above 100 - -
Total 100 - -
Interpretation: The trend analysis of auto loan reveals that there has been no trend
apart from 2008-09.

Consumer Loans

Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 3 100 - -
3-6 100 - -
Total 100 - -
Interpretation: The trend analysis of consumer loan reveals that there has been no
trend apart from 2008-09.

Common Size Statement of p & SB loans

Housing Loans:
Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 5 22.18 18.96 11.22

5-10 36.78 21.03 17.91
10-15 7.59 8.31 5.61
15 & above 33.45 51.70 65.26
Total 100 100 100
Interpretation:

The major change in housing loan has been in the amount above 15 lakh, it has increased in
2009-10 as compared to previous years.

There has been not much of loans sanctioned between amount 10-15 in all the three years.

Educational Loans:
Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 3 59.45 25 19.31

3-6 18.91 19.12 37.45
6 & above 21.64 55.88 43.24
Total 100 100 100
Interpretation:

There has been not much of a difference in the range 3-6 lakhs in 2007-08 & 2008-09.

Large number of educational loans was sanctioned in the year 2007-08.

There has been a sudden increment in 2008-09 for the amount range above 6 lakhs.

Personal Loans:
Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 1 58 54.64 36.77

1-2 14 15.47 17.65
2-3 28 29.89 45.58
Total 100 100 100
Interpretation:

Most of the personal loans are sanctioned in the range upto 1 lakh.

There is a sudden decrease in range 1-2 lakh and then upheaval in 2-3 lakh range again.

Thus, the amount of personal loan is usually less as compared to the amounts of other loans.

Business Loans:
Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 5 20.04 20.09 20

5-10 25.08 24.98 25
10-15 14.98 14.98 15
15 & above 39.90 39.95 40
Total 100 100 100
Interpretation:

There have been minute changes for different ranges of amount of loans.

This show that business requirement of loan never stops and has almost stagnant growth.

Auto/ Conveyance Loans:

Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 3 - 45 -
3-6 - 20 -
6 & above - 35 -
Total - 100 -
Interpretation:

There has been no sanction of loan in 2007-08 and 2009-10, they were only sanctioned in

2008-09.

No comparision of auto/conveyance loan can be done thereby.

Consumer Loans:

Amount / Year 2007-2008 2008-2009 2009-2010

(in lakhs)

Upto 3 - 41.64 -
3-6 - 58.36 -
Total - 100 -
Interpretation:

There has been no sanction of loan in 2007-08 and 2009-10, they were only sanctioned in

2008-09.

No comparision of consumer loan can be done thereby.

Data Collection, Data Representation, Analysis &

Interpretation

Questionnaire
Particulars of respondents:

Age:
[a]Below 25 [b] 25-40 [c] Above 40

Options Number Percentage (%)

Below 25 16 32
25-40 13 26
 Above 40 21 42

Sex:
[a]Male [b] Female

Options Number Percentage (%)

Male 35 70
Female 15 30

Occupation:
[a] Student [b] Service [c] Business [d] Others

Options Number Percentage (%)

[a] 14 28
[b] 18 36
[c] 11 22

[d] 7 14

1). Which of the following loans have you opted for?

[a] Housing Loan [b] Educational Loan [c] Personal Loan
[d]Auto Loan [e] Business Loan [f] Consumer Loan

Options Number Percentage (%)

[a] 14 21
[b] 19 29
[c] 13 20

[d] 8 12
[e] 7 11
[f] 5 7
Interpretation: The loans of Punjab & Sind Bank are more common among students
as the highest number of loans taken is of educational loan, while other loans are customary.
It mainly depends upon the rate of interest to be given as it is evident that it is low in case of
educational loan.

2). Why have you opted this bank for loan facilities?
[a] Lower Rate of Interest [b] Better Services
[c]Better Schemes [d] Low Document Charges

Options Number Percentage (%)

[a] 20 28
[b] 31 44
[c] 17 24

[d] 3 4
Interpretation:

The main attraction of P & SB loans are the services provided by the bank by fulfilling the
requirements of the customers. It includes corruption free service, nodal officers for
grievances/complaints,extended business hours, notify change in interest rate in advance and
rendering of courteous services.

3). Loans sanction procedure of the bank is…..

[a] Excellent [b] Good
[c] Average [d] Weak

Options Number Percentage (%)

[a] 13 25
[b] 30 59
[c] 7 14

[d] 1 2
Interpretation:

The pie-chart shows that getting loans from P & SB is quiet easily accessible. Fair practice
code of P & SB involves application of loans, loan appraisal terms & conditions, post
disbursement supervision and grievances redressal mechanism.

4). Before taking up the loan, were you informed by the employees about the EMI, all
other interest costs, charges, stamp duty payable by you.?
[a] Yes [b] No

Options Number Percentage (%)

[a] 44 88
[b] 6 12
Interpretation:

This shows that P& SB is loyal to its customers, so that the customer can decide upon
whether taking loan from this bank would be at ease or not.

The application for loans portraits all the terms & condition. They are also described in
relation to all statutory laws and regulations.

The equated monthly installment is clearly mentioned for different quantum of finance while
taking up the loan.

5). Are you satisfied with the interest rate charged by your bank on loan facilities?
[a] Totally satisfied [b] Slightly satisfied
[c] Slightly dissatisfied [d] Totally dissatisfied

Options Number Percentage (%)

[a] 12 24
[b] 27 54
[c] 8 16

[d] 3 6
Interpretation:

The above percentage shows that P& SB offers a nominal rate of interest on loans.

It is different for different kind of loans. BPLR is generally the deciding factor.

6). Are the bank officials easily accessible for your queries?
[a] Yes [b] No

Options Number Percentage (%)

[a] 36 72
[b] 14 28
Interpretation:

P& SB has various departments & customers can quiet easily have access to the officials of
banks.

The transactions as well as various others issues and withdrawals are done with a proper
time limit so that there is no rush hours.

The extension of business hours adds to ease of access to officials.

7). Do your bank provide any insurance policies along with the loan schemes?
[a] Yes [b] No

Options Number Percentage (%)

[a] 22 44
[b] 28 56
Interpretation:

The insurance policies depend upon the amount of loan taken.

It is generally not given and also depend upon the type of loan taken.

Punjab & Sind Bank is having a special tie-up arrangements with insurance companies to
provide insurance related services to its customers.

8). Margins asked in case of loans is……

[a] Ultra Expensive [b] Expensive
[c] Reasonable [d] Cheap

Options Number Percentage (%)

[a] 8 16
[b] 19 38
[c] 18 36

[d] 5 10
Interpretation:

Margins are not asked in case of personal loan while it is more in case of business & housing
loan; less in case of educational, auto loan & consumer loan.

9). Processing Fee of this bank is……

[a] Very High [b] High
[c] Low [d] Very Low

Options Number Percentage (%)

[a] 17 28
[b] 19 32
[c] 19 32

[d] 5 8
Interpretation:

Processing fee is nominal depending upon the amount of loan and also the type of loan.

It is 0.50% for housing loan, 1% for personal loan, Rs. 100-500 for auto loan, Rs. 100 for
consumer loan and no processing fee is charged on educational loan.

Processing fee is exempted for central/ state govt./ P.S.U. employees.

10).Do this bank charges any amount for part payment of the loan?
[a] Yes [b] No
[c] No Idea

Options Number Percentage (%)

[a] 8 16
[b] 21 42
[c] 21 42
Interpretation:

The charge on part payments depend upon the maturity date & usually it is not charged.

If the part payment is done after the maturity date, then the bank charges an additional
amount on the left over amount.

11). Appraisal of Educational Loan is…

[a] Easy [b] Time consuming
[c] Delayed [d] No idea

Options Number Percentage (%)

[a] 14 28
[b] 11 22
[c] 7 14

[d] 18 36
Interpretation:

The students get educational loan very easily if they satisfies the requirement & its
disbursement also hold good position.

This may be time consuming because the bank asks for assessment of credit needs of a
customer, conveying the terms and condition, giving sanction letter etc.

12). Did the bank ask your preference regarding due date of EMI?
[a]Yes [b] No

Options Number Percentage (%)

[a] 36 72
[b] 14 28
Interpretation:

The due date of equated monthly installment is generally being asked.

In case of PSU / Govt. employees, EMI is paid through salary and that acts as a deciding
factor. In other cases, it depends on banks discretion.

13). Was the payment of installment commenced & continued as per the schedule
specified in the application form?
[a] Yes [b] No

Options Number Percentage (%)

[a] 31 62
[b] 19 38
Interpretation:

Under normal circumstances, everything goes as per schedule and it changes with the
change in policy.

The bank strictly follows all the norms and collects the installments and informs the customer
about the due amount on the regular basis.

14). Were you informed about all the acts set by the bank in case of events of defaults?
[a] Yes [b] No

Options Number Percentage (%)

[a] 39 78
[b] 11 22
Interpretation:

Acts are mostly being stated before taking up the loan.

Application of loans deals with all the areas in case of defaults. The maturity date, the
circumstances under which the application will be rejected and post disbursement
supervision is clearly informed generally by the bank.

15). What do you think about grievances redressal system in the bank?
[a] Effective [b] Prompt
[c] Time consuming [d] Inconvenient

Options Number Percentage (%)

[a] 10 19
[b] 31 60
[c] 6 11

[d] 5 10
Interpretation:

The grievance redressal system shows a satisfactory level.

To enable the customers to voice their grievances or offer suggestions for improvement in
customer service, “Customer Day" is observed at all the offices of the bank across the
organization covering branches, Zonal Offices and Head Office. Customer Service
Committee Meetings are also held.

In case of any complaint , the matter may be first brought to the notice of concerned branch
manager for immediate redressal.

16). Does your bank update you with the new loan scheme & changes in the policies?
[a] Always [b] Often
[c] Rarely [d] Never

Options Number Percentage (%)

[a] 19 33
[b] 19 33
[c] 20 34

[d] 0 0
Interpretation:

The P & SB are customer friendly and their aim is to benefit customers & involve them.

Most of the changes are displayed on internet on P & SB website while others are being
informed through newsletters and various other postings by the bank.

17).In your opinion which of the following loan schemes offered by your bank is the
best? [a] Housing Loan [b] Educational Loan [c]
Personal Loan [d] Auto Loan [e] Business Loan
[f] Consumer Loan

Options Number Percentage (%)

[a] 14 22
[b] 20 31
[c] 8 12

[d] 10 16
[e] 9 14
[f] 3 5
Interpretation:

As the interest rate & disbursement of educational loan is easy, it is considered as the best
while consumer loan is least popular.

18). What is your satisfaction level of the electronic services on the scale of 0-5.
[ ______ ]

Options Number Percentage (%)

[0-5] 189/250 75.6
Interpretation:

The satisfaction level of various electronic services like online service on internet, fax, ATM
etc are eminent.

The bank provides educational loan online and also filling up of loan application can be
done online.

Any change in the schemes of loan is being displayed online on the website of the bank which
creates an easy customer bank relationship.

19).How would you rate Feasibility of the service provided by bank?

[a] [b] [c] [d] [e]

Options Number Percentage (%)

[a] 1 2
[b] 6 12
[c] 19 38

[d] 18 36
[e] 6 12
Interpretation:

The feasibility of the services provided by the bank is above average level.

After gathering, analyzing data for various kinds of services offered by P & SB, it is clear
that the customers find it quiet practical and within their reach.

20). How was the overall experience of the bank?

[a] Excellent [b] Fair
[c] Good [d] Average

Options Number Percentage (%)

[a] 6 12
[b] 24 48
[c] 13 26

[d] 7 14
Interpretation:

Overall experience of the bank as rated by customers is fair enough.

It needs to identify its lacking areas & thus improve on its shortcomings to come up to the
expectations of the customers.

Testing of Hypothesis

Hypothesis
Whether the acceptance of loan by the public depends upon various
loan schemes offered by the bank.

Correlation

r = Σ dx dy
 Σ dx². Σ dy²

X = Amount sanctioned

Y= No. of schemes

Coefficient of correlation

Between the amount sanctioned by the bank and the no. of schemes
offered by the bank.

Types of Amount dx dx² No. of dy dy² dxdy

loan sanctioned schemes

(X) (Y)

Housing 1444 736.17 541946.27 336 103.7 10753.69 76340.82

loan

Educational 367 -340.83 116165.089 110 -122.3 14957.29 41683.509

loan

Personal 215 -492.83 242881.40 302 69.7 4858.09 -34350.25

loan

Business 2195 1487.1 2211674.60 633 400.7 160560.49 595909.079

loan 7

Auto loan 20 -687.83 473110.10 9 - 49876.28 153613.07

223.3
3
Consumer 6 -701.83 492565.34 4 -228.3 52120.89 160227.789
loan

Total 4078342.7 293126. 993423.952

9 7

X = 4247 = 707.83 Y = 1394 =232.33

6 6

r = Σ dx dy = .90

Σ dx². Σ dy²

Interpretation of correlation:

It is having a high degree of correlation i.e.- .90

Null Hypothesis

There is no significant difference between the acceptance of loan by the

public and offering of various schemes of loans by the bank.

Test –

t=r* n-2

1-r²
 = .908 6-2 = 4.33

1 - (.908)²

Degree of freedom = n-1

= 6-1 = 5

Interpretation of t-test :
When the degree of freedom is 5 and the level of significance is 5%. The critical
value of t= 2.571. Since the calculated value is more than the table value, we
reject the null hypothesis and conclude that there is significant difference between
the acceptance of loan by the public and offering of various schemes of loan by the
bank.
Chapter - 5

Major findings
&
Suggestions

Findings
 There is a high degree of correlation between the amount sanctioned by the bank
and the no. of schemes offered by the bank.

 The Null hypothesis was taken as “there is no significant difference between the
acceptance of loan by the public and offering of various schemes of loans by the
bank” has been proved wrong.
 Overall experience of the bank as rated by customers is fair enough.

 The feasibility of the services offered by the bank is above average level.

 The highest amount is prevalent in educational loan while lowest amount is

prevalent in personal loan.

 The trend has been mediocre in all the loans while there is no trend in
Auto/Conveyance & Consumer loan.

 The comparative statement of educational loan reveals that there has been a
substantial increase in the loan by 96.7%

 The consolidated statement of educational loan reveals that there is an

substantial increase in the amount of loan from 2005-06 & 2006-07 i.e.
86.8%.Thus the popularity of educational loans have been increasing as the
disbursement of this loan is easy.
 Suggestions
Punjab & Sind Bank loans offers satisfactory services. But to improve the services
and level of schemes offered by the bank, the following suggestions are
recommended-

 The bank should up bring auto, business and consumer loan and promote
them as these are lowest taken up by the public.

 The bank should concentrate on interest rate, document charges and new
schemes to attract customers.

 The margin asked in case of loans is expensive as well as reasonable in

some cases. The bank should have a check on the increase and decrease of
margins.

 Processing fee is another criterion where the bank should draw its attention. It
should not be too high and within the reach of the customers.

 Grievances redressal system is prompt but has not reached the excellent
level. Thus the officials should be quick and offer service under this head.

 The electronic services offered by the bank shows a mediocre level i.e.
75.6%, so the bank should improve it and bring in new technological
advances to save time in the transactions and to make the customers at ease.

Punjab & Sind Bank should continuously monitor the likes and dislikes of customers
and create a customer friendly relationship as Customers are said to be God. They
should conduct a periodic survey of the loans as compared to other banks to
overcome its shortcomings.

Conclusion
Punjab & Sind Bank has been adjudged the best bank in “Medium size best bank” by
Business Today. The analysis of loans offered by the bank points out the following-

 The Feasibility of the services offered by the bank is above average level as
surveyed through questionnaire.

 Educational loan is most popular loan among public as maximum people have
opted for this loan & the appraisal of educational loan is easy.

 There is a high level of satisfaction about the services offered by the bank as
well as the bank officials are also easily accessible.

 The interest rate of various loan showed a mediocre acceptance.

 The bank does not charge any amount on the part payment of the loan.

 The bank strictly follows the terms and conditions laid down by it and the
schedule of loan sanctioning procedure and all the acts in case of defaults are
well informed before the customers take loan.

 The survey also reveals that customers find educational loan is the best loan
due to the various quantum of finance n low margin asked in it.

 The bank officials update their customers from time to time about the new
schemes as well as reminds about their due date and the balance amount.

 The satisfaction level of the electronic services like ATM facility, internet, fax
etc is 75.6%.

Finally, there is a significant difference between the acceptance of loan by the public
and offering of various schemes of loans by the bank and there is a high degree of
correlation between the amount sanctioned by the bank and the no. of schemes
offered by the bank.

Bibliography
Bibliography-

Books-

 J. Fabozzi, Frank, “Bank Loans: Secondary Market and Portfolio

Management”, Pg no. 122, july1998
 Gupta & Sharma, r k & shashi, “Financial Management”, Pg no. 5.3, july2007
 Gill, James O, “Financial Analysis: The Next Step”, Pg no. 57, april 1999

Magazines-

 Business Today, Feb edition, 2008

Newspaper-

 The Economic Times

 The Hindu

Websites-

 www.psbindia.com

 http://en.wikipedia.org/wiki/Loan

 http://andromeda.rutgers.edu/~jlynch/Texts/preface.html

 http://www.discoverstudentloans.com/resources/your-credit-score.aspx

 www.investopedia.com/terms/t/trendanalysis.asp

 www.answers.com/topic/comparative-statement

 www.investorwords.com/985/common_size_statement.html
 Annexure

Copy of
Questionnaire

Dear Customer,
I am Sony Bagga, doing a research on the topic “Analysis of Punjab &
Sind Bank Loans”.

Hence I kindly request you to fill in the questionnaire at the best of your
knowledge.

Name: _____________________________________________

Age: Below 25 25 - 40 Above 40

Sex: Male Female

Occupation: a Student Service Business Others

1). Which of the following loans have you opted for?

[a] Housing Loan [b] Educational Loan [c] Personal Loan
[d]Auto Loan [e] Business Loan [f] Consumer Loan

2). Why have you opted this bank for loan facilities?
[a] Lower Rate of Interest [b] Better Services
[c]Better Schemes [d] Low Document Charges

3). Loans sanction procedure of the bank is…..

[a] Excellent [b] Good
[c] Average [d] Weak

4). Before taking up the loan, were you informed by the employees about the EMI, all
other interest costs, charges, stamp duty payable by you.?
[a] Yes [b] No

5). Are you satisfied with the interest rate charged by your bank on loan facilities?
[a] Totally satisfied [b] Slightly satisfied
[c] Slightly dissatisfied [d] Totally dissatisfied

6). Are the bank officials easily accessible for your queries?
[a] Yes [b] No

7). Do your bank provide any insurance policies along with the loan schemes?
[a] Yes [b] No

8). Margins asked in case of loans is……

[a] Ultra Expensive [b] Expensive
[c] Reasonable [d] Cheap

9). Processing Fee of this bank is……

[a] Very High [b] High
[c] Low [d] Very Low
10).Do this bank charges any amount for part payment of the loan?
[a] Yes [b] No
[c] No Idea

11). Appraisal of Educational Loan is…

[a] Easy [b] Time consuming
[c] Delayed [d] No idea

12). Did the bank ask your preference regarding due date of EMI?
[a]Yes [b] No

13). Was the payment of installment commenced & continued as per the schedule
specified in the application form?
[a] Yes [b] No

14). Were you informed about all the acts set by the bank in case of events of defaults?
[a] Yes [b] No

15). What do you think about grievances redressal system in the bank?
[a] Effective [b] Prompt
[c] Time consuming [d] Inconvenient

16). Does your bank update you with the new loan scheme & changes in the policies?
[a] Always [b] Often
[c] Rarely [d] Never

17).In your opinion which of the following loan schemes offered by your bank is the
best? [a] Housing Loan [b] Educational Loan [c]
Personal Loan [d] Auto Loan [e] Business Loan
[f] Consumer Loan

18). What is your satisfaction level of the electronic services on the scale of 0-5.
[ ______ ]

19).How would you rate Feasibility of the service provided by bank?

[a] [b] [c] [d] [e]

20). How was the overall experience of the bank?

[a] Excellent [b] Fair
[c] Good [d] Average