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1. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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CHAPTAR NO: 1
INTRDUCTION
1.1 Introduction of Loan:-
Loan is an amount of money advanced to a borrower, to be repaid at a
later date, usually with interest. Legally, a loan is a contract between a buyer (the
borrower) and a seller (the lender), enforceable under the Uniform Commercial
Code in most states. The terms and conditions for repayment of a loan, including
the finance charge or interest rate, are specified in a loan agreement. a loan may
be payable on demand (a Demand Loan), in equal monthly installments (an
installments loan)
It is also define as when a lender gives money or property to a borrower
and the borrower agrees to return the property or repay the borrowed money,
along with interest, at a predetermined date in the future.
Definition
An arrangement in which a lender gives money or property to a borrower,
and the borrower agrees to return the property or repay the money, usually
along with interest, at some future point(s) in time. Usually, there is a
predetermined time for repaying a loan, and generally the lender has
to bear the risk that the borrower may not repay a loan (though
loan modern capital markets have developed many ways of managing this risk).
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.
In a loan, the borrower initially receives or borrows an amount of money, called
the principal, from the lender, and is obligated to pay back or repay an equal
amount of money to the lender at a later time. Typically, the money is paid back
in regular installments, or partial repayments; in an annuity, each installment is
the same amount.
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The loan is generally provided at a cost, referred to as interest on the debt, which
provides an incentive for the lender to engage in the loan. In a legal loan, each of
these obligations and restrictions is enforced by contract, which can also place the
borrower under additional restrictions known as loan covenants. Although this
article focuses on monetary loans, in practice any material object might be lent
1.2 Secured Loan:-
A secured loan is a loan in which the borrower pledges some asset (e.g. a
car or property) as collateral.
A mortgage loan is a very common type of debt instrument, used by many
individuals to purchase housing. In this arrangement, the money is used to
purchase the property. The financial institution, however, is given security —
a lien on the title to the house — until the mortgage is paid off in full. If the
borrower defaults on the loan, the bank would have the legal right to repossess the
house and sell it, to recover sums owing to it.
In some instances, a loan taken out to purchase a new or used car may be
secured by the car; in much the same way as a mortgage is secured by housing.
The duration of the loan period is considerably shorter — often corresponding to
the useful life of the car. There are two types of auto loans, direct and indirect. A
direct auto loan is where a bank gives the loan directly to a consumer. An indirect
auto loan is where a car dealership acts as an intermediary between the bank or
financial institution and the consumer.
1.3 Unsecured Loan:-
Unsecured loans are monetary loans that are not secured against the
borrower's assets. These may be available from financial institutions under many
different guises or marketing packages:
credit card debt
personal loans
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bank overdrafts
credit facilities or lines of credit
corporate bonds (may be secured or unsecured)
The interest rates applicable to these different forms may vary depending on
the lender and the borrower. These may or may not be regulated by law. In the
United Kingdom, when applied to individuals, these may come under
the Consumer Credit Act 1974.
Interest rates on unsecured loans are nearly always higher than for secured
loans, because an unsecured lender's options for recourse against the borrower in
the event of default are severely limited. An unsecured lender must sue the
borrower, obtain a money judgment for breach of contract, and then pursue
execution of the judgment against the borrower's unencumbered assets (that is, the
ones not already pledged to secured lenders). In insolvency proceedings, secured
lenders traditionally have priority over unsecured lenders when a court divides up
the borrower's assets. Thus, a higher interest rate reflects the additional risk that in
the event of insolvency, the debt may be uncollectible.
Rules:-
1. A loan is not gross income to the borrower.
Since the borrower has the obligation to repay the loan, the borrower has
no accession to wealth.
2. The lender may not deduct (from own gross income) the amount of the
loan.
The rationale here is that one asset (the cash) has been converted into a
different asset (a promise of repayment) Deductions are not typically available
when an outlay serves to create a new or different asset.
3. The amount paid to satisfy the loan obligation is not deductible (from own
gross income) by the borrower.
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4. Repayment of the loan is not gross income to the lender.
In effect, the promise of repayment is converted back to cash, with no
accession to wealth by the lender.
5. Interest paid to the lender is included in the lender’s gross income.
Interest paid represents compensation for the use of the lender’s money or
property and thus represents profit or an accession to wealth to the lender. Interest
income can be attributed to lenders even if the lender doesn’t charge a minimum
amount of interest.
6. Interest paid to the lender may be deductible by the borrower.
In general, interest paid in connection with the borrower’s business
activity is deductible, while interest paid on personal loans are not deductible. The
major exception here is interest paid on a home mortgage
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CHAPTER NO: 2
BANK PROFILE
2.1 History
Bank of Baroda (BoB) (BSE: 532134) is the third largest bank in India,
after the State Bank of India and the Punjab National Bank and ahead of ICICI
Bank BoB is ranked 763 in Forbes Global 2000 list. BoB has total assets in
excess of Rs. 3.58 lakh cores, or Rs. 3,583 billion, a network of over 3,778
branches and offices, and about 1,657 ATMs. It plans to open 400 new branches
in the coming year. It offers a wide range of banking products and financial
services to corporate and retail customers through a variety of delivery channels
and through its specialized subsidiaries and affiliates in the areas of investment
banking, credit cards and asset management. Its total business was Rs. 5,452
billion as of June 30.
As of August 2010, the bank has 78 branches abroad and by the end of
FY11 this number should climb to 90. In 2010, BOB opened a branch in
Auckland, New Zealand, and its tenth branch in the United Kingdom. The bank
also plans to open five branches in Africa. Besides branches, BoB plans to open
three outlets in the Persian Gulf region that will consist of ATMs with a couple of
people.
The Maharajah of Baroda, Sir Sayajirao Gaekwad III, founded the bank on
20 July 1908 in the princely state of Baroda, in Gujarat. The bank, along with 13
other major commercial banks of India, was nationalized on 19 July 1969, by
the government of India.
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2.2 Year wise History:
1908-1959
1908: Maharaja Sayajirao Gaekwad III set up Bank of Baroda (BOB).
1910: BoB established its first branch in Ahmedabad.
1953: BoB established a branch in Mombasa and another in Kampala.
1954: BoB opened a branch in Nairobi.
1956: BoB opened a branch in Dar-es-Salaam.
1957: BoB established a branch in London.
1959: BoB acquired Hind Bank.
1960s
1961: BoB merged in New Citizen Bank of India. This merger helped it
increase its branch network in Maharashtra. BOB also opened a branch
in Fiji.
1962: BoB opened a branch in Mauritius.
1963: BoB acquired Surat Banking Corporation in Surat, Gujarat.
1964: BoB acquired two banks, Umbergaon People’s Bank in
southern Gujarat and Tamil Nadu Bank of Baroda in Tamil Nadu state.
1964: BoB lost its branch in Narayanjanj (East Pakistan) due to the Indo-
Pakistan war. It is unclear when BOB had opened the branch.
1965: BoB opened a branch in Guyana.
1967: The Tanzanian government nationalized BoB’s three branches there
and transferred their operations to the Tanzanian government-owned
National Banking Corporation.
1969: The Government of India nationalized 14 top banks, including BoB.
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BoB incorporated its operations in Uganda as a 51% subsidiary, with the
government owning the rest.
1970s
1972: BoB acquired The Bank of India’s operations in Uganda.
1974: BoB opened a branch each in Dubai and Abu Dhabi.
1975: BoB acquired the majority shareholding and management control
of Bareilly Corporation Bank (est. 1928) and Nainital Bank (est. in 1954),
both in Uttar Pradesh. Since then, Nainital Bank has expanded
to Uttarakhand State.
1976: BoB opened a branch in Oman and another in Brussels. The
Brussels branch was aimed at Indian firms from Mumbai (Bombay)
engaged in diamond cutting and jewellery having business in Antwerp, a
major center for diamond cutting.
1978: BoB opened a branch in New York and another in the Seychelles.
1979: BoB opened a branch in Nassau, the Bahamas.
1980s
BoB opened a branch in Bahrain and a representative office in Sydney, Australia.
BoB, Union Bank of India and Indian Bank established IUB International
Finance, a licensed deposit taker, in Hong Kong. Each of the three banks took an
equal share.
1985: BoB (20%), Bank of India (20%), Bank of Baroda of India (20%)
and ZIMCO (Zambian government; 40%) established Indo-Zambia
Bank (Lusaka). BoB also opened an Offshore Banking Unit (OBU) in
Bahrain.
1988: BoB acquired Traders Bank, which had a branch network in Delhi.
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1990s
1990: BoB opened an OBU in Mauritius, but closed its representative
office in Sydney.
1991: BoB took over the London branches of Union Bank of
India and Punjab & Sind Bank (P&S). P&S’s branch had been established
before 1970 and Union Bank’s after 1980. The Reserve Bank of
India ordered the takeover of the two following the banks' involvement in
the Sethia fraud in 1987 and subsequent losses.
1992 BoB incorporated its operations in Kenya into a local subsidiary with
a small tranche of shares quoted on the Nairobi Stock Exchange.
1993: BoB closed its OBU in Bahrain.
1996: BoB Bank entered the capital market in December with an Initial
Public Offering (IPO). The Government of India is still the largest
shareholder, owning 66% of the bank's equity.
1997: BoB opened a branch in Durban.
1998: BoB bought out its partners in IUB International Finance in Hong
Kong. Apparently this was a response to regulatory changes following
Hong Kong’s reversion to the People’s Republic of China. The now
wholly owned subsidiary became Bank of Baroda (Hong Kong), a
restricted license bank. BoB also acquired Punjab Cooperative Bank in a
rescue. BoB also incorporate wholly owned subsidiary BOB Capital
Markets Ltd.for Broking Business.
1999: BoB merged in Bareilly Corporation Bank in another rescue. At the
time, Bareilly had 64 branches, including four in Delhi. In Guyana, BoB
incorporated its branch as a subsidiary, Bank of Baroda Guyana. BoB
added a branch in Mauritius, but closed its Harrow Branch in London.
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2000s
2000: BoB established Bank of Baroda (Botswana).
2002: BoB acquired Benares State Bank (BSB) at the Reserve Bank of
India’s request. BSB was established in 1946 but traced its origins back to
1871 and its function as the treasury office of the Benares state. In 1964,
BSB had acquired Bareilly Bank (est. 1934), with seven branches; it also
had taken over Lucknow Bank in 1968. The acquisition of BSB brought
BOB 105 new branches.
2002: Bank of Baroda (Uganda) was listed on the Uganda Securities
Exchange (USE).
2003: BoB opened an OBU in Mumbai.
2004: BoB acquired the failed Gujarat Local Area Bank, and returned
to Tanzania by establishing a subsidiary in Dar-es-Salaam. BoB also
opened a representative office each in Kuala Lumpur,Malaysia,
and Guangdong, China.
2005: BoB built a Global Data Centre (DC) in Mumbai for running its
centralized banking solution (CBS) and other applications in more than
1,900 branches across India and 20 other counties where the bank
operates. BoB also opened a representative office in Thailand.
2006: BoB established an Offshrore Banking Unit (OBU) in Singapore.
2007: In its centenary year, BoB’s total business crossed 2.09 lakh crores,
its branches crossed 1000, and its global customer base 29 million people.
2008: BoB opened a branch in Guangzhou, China (02/08/2008) and in
Kenton, Harrow United Kingdom. BoB opened a joint venture life
insurance company with Andhra Bank and Legal and General (UK)
called IndiaFirst Life Insurance Company
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2010s
2010: Malaysia awarded a commercial banking license to a locally
incorporated bank to be jointly owned by Bank of Baroda, Indian
Overseas Bank and Andhra Bank. The new bank, India BIA Bank
(Malaysia), will reside in Kuala Lumpur, which has a large population of
Indians. Andhra Bank will hold a 25% stake in the joint-venture, BoB will
own 40% and IOB the remaining 35%.
BoB opened a branch in New Zealand
2.3 BOARD OF DIRECTORS:
1. Shri. M. D. Mallya
Chairman & Managing Director
2. Shri Rajiv Kumar Bakshi
Executive Director
3. Shri N S Srinath
Executive Director
4. Shri Alok Nigam
Director
5. Shri Sudarshan Sen
Director
6. Shri Ajay Mathur
Director
7. Shri Vinil Kumar Saxena
Director
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8. Shri V. B. Chavan
Director
9. Dr. Masarrat Shahid
Director
10. Shri Satya Dev Tripathi
Director
11. Shri Maulin Vaishnav
Director
12. Shri Surendra Singh Bhandari
Director
13. Shri Rajib Sekhar Sahoo
Director
2.3)TYPE OF PRODUCTS:
Product Profile
Followings are the main products of The Bank of Baroda.
Deposits
Gen-next
Loans
Credit Cards
Debit Cards
Services
Lockers
(1)Deposits:
Bank of Baroda offers various deposit plans that you can choose from
depending on the term period, nature of deposit and its unique saving and
withdrawal features. A part from competitive interest rates and convenient
withdrawal options, our deposit plans offer other features such as overdraft
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facility, outstation cheque collections, safe deposit lockers, ATM's etc. Fixed
deposits are categorized into deposits with a term period of less than 12 months,
more than 12 months and recurring deposits. These deposit plans offer convenient
solutions to both working individuals as well as senior citizens. Current and
saving deposits are ideal for individuals who wish to take advantage of multiple
benefits within the same plan and even be eligible to opt for overdrafts.
(2)Gen-next:
2.1: Gen-Next Junior (Saving Account)
Product Nature:
This is a Special kind of Savings Bank Deposit product for children to be
made available in Gen-Next Pune branch.
Target Group:
Children’s upto18 years of age.
Minimum Amount & Balance:
QAB: Rs 500/-
Charges for non-maintenance of QAB is Rs 50/ per quarter only.
Maximum Amount:
In case of joint accounts with parent and minors (with sole
account) above 14 years, there is no ceiling on the maximum
amount.
An account in the sole name of minor above 10 years and below 14
years, maximum limit is Rs 1 lakh.
Single / Joint Accounts:
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In case of minor below 10 years the account shall be opened jointly
with parents / guardian.
Minors above 10 years (below 18 years) can open the account in
their sole name subject to :
Minor is able to read and write any of the recognized languages,
and
capable in the opinion of the Bank officials of understanding the
what he / she is doing and SB account rules and regulations
2.2: Gen-Next Lifestyle
Type of Facility:
Term Loan (Combo Pack) Purpose :
Purchase of Home Furnishings / Consumer Durable goods
(includes color T.V., video camera / refrigerator / washing machine
/ music system / air-conditioners / cooking system etc).
Purchase of vehicle i.e. two-wheeler / four-wheeler.
Purchase of Laptop / PC.
Purchase of any new electronic gadgets like Mobile, i-Pod, Handy
cam etc.
Target Group:
Working executives/ professionals.
Eligibility:
Should be an Indian National
Permanent Employees of State / Central Government, Public Sector
Undertakings, Semi government Organization, State /Central Govt.
Corporations, Urban Development Authorities, Educational
Institutions, Universities. Regular Employees of MNCs, Public Ltd
Companies with minimum two years experience out of which
minimum one year service with the present organization.
Employees of Private Limited Companies, Regional head willpermit
on case-to-case basis.
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Present gross annual emoluments / income of the applicant shouldnot be less than
Rs. 2.50 lacks.
Age:
Minimum – 21 years
Maximum – 45 years
Maximum Loan Amount:
Subject to maximum of:
Furniture & Fixture / New Consumer Durables : Rs. 2 lacks
New Vehicle (Four Wheeler) : Rs. 6 lacks (Two Wheeler) : Rs. 1lac
Old Four Wheeler (Not more than 3 years old) : Rs. 4 lacks
New modern gadget/s: Rs. 1 lack
Aggregate loan amount should not be more than Rs. 8.00 lacks.
Subject to:
24 times gross Monthly income.
Total deductions including EMI of proposed loan should notexceed 60%
of the gross income.
Margin:
Furniture & Fixture / New Consumer Durables : 20%
New Vehicle (Two wheeler / Four wheeler) : 15%
Old Vehicle (Four wheeler only) : 40%
New Modern Gadgets (Including Laptop / PC) : 20%
2.3 Gen-Next Power (OD Facility):
Product Nature:
This is a special Savings Deposit product having an in built feature
of overdraft facility to be available at Gen-Next Pune branch. Target Group The
product is targeted to working executives and other working professionals. Our
Bank’s Staff members are not eligible to avail the product.
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Minimum Amount & Balance
There is no minimum balance requirement in the account and as such no
service charges shall be levied towards this. Maximum Amount There shall be no
ceiling on the amount to be deposited and credit balance in the account.
Eligibility Criteria:
Permanent Employees of State / Central Government, Public Sector
Undertakings, Semi government Organization, State /Central Govt.
Corporations, Urban Development Authorities, Educational Institutions,
Universities. Regular Employees of MNCs, Public Ltd Companies with
minimum two years experience out of which minimum one year service
with the present organization.
Employees of Private Limited Companies, Regional head will permit on
case-to-case basis.
Minimum age of 21 years.
Minimum take home Salary should not be less than Rs.10,000/-.
Maintaining satisfactorily conducted salary account with theBank at least
for three months.
Special Feature:
The branch SHALL offer Overdraft facility (Clean/unsecured) to
employees who fulfill the eligibility criteria mentioned above to meetout their
regular short-term personal / family needs.
Overdraft Facility:
Maximum Age: 45 years. (This product is meant for youth)
Amount: 5 times of net take home monthly salary subject to:
Min Rs. 50,000/-
Max Rs. 2.00 lacs, subject to condition:
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Risk Rating Category “A” & “B” Rs. 2.00 lack
Category “C” Rs. 1.00 lack
Category “D” NIL.
For credit rating purpose, model meant for personal loan will be taken into
consideration.
PROCESSING & DOCUMENTATION CHARGES:
0.50% of limit sanctioned / reviewed subject to minimum of Rs. 250/-+ service
tax as applicable.
Security Documents:
D.P. Note.
Letter of continuing security.
A stamped undertaking from the employee authorizing the employer to
remit the salary every month to the bank for credit of specified SB /
Current Account during the currency of the OD facility and also to deduct
from the retirement / terminal benefits, the outstanding overdraft amount
with the interest in case of retirement / resignation / cessation of
employment for any reason. A copy of the undertaking duly
acknowledged by the employer has to be kept on branch.
Third party guarantees having adequate net worth. Cross guarantee may be
accepted.
Rate of Interest:
1.5% above BPLR i.e. 14% p.a. with monthly rests. A Minimum interest
of Rs. 10/- shall be charged during a month if OD is availed. Period: 12 months,
subject to annual review.
Other Conditions:
The account is to be brought into credit once in a year.
Interest Rate on Credit Balance in The A/C:
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Interest shall be payable on credit balance in the account as per savings
bank account rules viz. relating to periodicity, rate andsystem of application of
interest, computation of eligible balances etc.
2.4: Gen Next Suvidha:
Product Nature:
This is a Recurring Deposit product enabling the customer to makeregular
savings on monthly basis and earns higher interest.
Customer Segment:
Individuals in their single / joint names.
Minors of age 10 years and above jointly with their parents /natural
guardians.
Minors below 10 years age through their parents.
Minimum / Maximum Amount:
There is no minimum balance requirement in the account and assuch no
service charges shall be levied towards this.
Maximum Amount:
“Gen-next Suvidha” Account can be opened with monthly installments of
Rs.100/- or above & in multiples thereof with a maximum of Rs.10, 000/-
per month.
The number of installments can range from 12 to 36 months (In multiples
of 3 months).
The depositor shall, at the time of opening the account, stipulate the
amount of core monthly installment and the number of installments
payable by him which shall not subsequently alter.
The depositor is given an option to deposit higher monthly installment in
the account as and when available and the maximum amount should not
exceed Rs. 10,000/- per month. However, monthly installments paid
during the time gap of less than 24/12 months (depending upon the period
chosen) at the ending stage of the account’s tenure, shall not exceed in any
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month three times the core monthly installment or Rs. 10,000/-whichever
is less.
Rate of Interest:
As decided by bank from time to time for Term Deposits of same tenure.
Loan against Deposit:
Loan can be considered against the deposit in the account in
accordance to normal guidelines for advances against Recurring
Deposit.
Interest shall be charged on such loan at the rates advised from
time to time on Loan against Bank’s Own Deposits.
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CHAPTER3
RESEARCH METHODOLOGY
3.1 RESEARCH METHODOLOGY:-
. Research Methodology is process of systematic gathering, recording
and analyzing of data collected by various techniques to access the respond and
accordingly prepare a report based on impact of promotional activity. It is careful
investigation or inquiry especially through search of knowledge through objective
and systematic method of finding solution of a problem. Thus in short the term
research refers to formulating a hypothesis.
The present study is based on secondary data for the facts and figures
and primary data as personal interview and questionnaire. The information is
taken from the News paper, books and magazines.
Research problem is one which require a researcher to find out the best
solution for the best solution for the given problem that is to find out by which
course of action the objective can be attained optimally in context of given
environment.
3.2 OBJECTIVE OF STUDY:-
To study the different types of loans provided by Bank of Baroda and its
eligibility criteria and conditions.
To study the benefits of these loans scheme to bank.
To study the benefits of different loans to customer of bank.
3.3 RESEARCH DESIGN:-
A research design case the arrangement of condition for collection and
analysis of data in manner that aims to combine relevance to research purpose
with economic procedure. The most important research process is deciding on
research design.
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3.4 EXPLORATORY RESEARCH:-
Exploratory research is conducted when the researcher does not know how
and why a certain phenomenon occurs. To understand this phenomenon, several
researchers have conducted focus group discussion to identify these quality
parameters.
Since the prime goal of an exploratory research is to know the unknown,
this research is unstructured. Experts and even search and even for printed or
published information are some common techniques.
3.5 DATA SOURCE:-
After identifying and defining the research problem and deterring
specific information required solving the problem, the researcher’s task is to look
for the type source of data, which may yield the desired result. Research
methodology carried for this study can be two types.
1) PRIMARY DATA:-
a) Primary data collected by the researcher through interview of
bank manager and banker.
b) By structured questionnaires customer of the bank.
2) SECONDARY DATA:-
Secondary data collected by researcher through bank circular, bank
website and RBI guide lines published by RBI.
SAMLING:-
1) UNIVERS: - All person who have taken loans from bank.
2) SIZE: - 100 people who taken different loans.
3) TECHNIQUE: - No probability convenient sampling.
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3.6 LIMITATIONS:-
1) The topic is based on purely academic purpose.
2) The topic is based the study of Bank of Baroda only.
3) The study is limited to Khamgaon city only.
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CHAPTER NO: 4
PRODUCT DETAILS
4.1 TYPE OF LAONS:
Following are the different types of loans provided by the bank.
a) Home Loan:-
o Eligibility
Existing Borrowers under Direct Housing Finance Scheme having
completed minimum 3 (three) years of repayment schedule without any
default.
In case Housing loan is in Joint Name, Both the Joint borrowers should
join as borrower for the loan or consent / no objection for extending
charge of house property created out of Housing loan should be obtained.
o Quantum of loan
Maximum of Rs.10.00 lakhs.
o Margin
25% on the Present Market value of the property for aggregate loan up to
Rs.30 lakhs including the proposed limit under this scheme.35% on the
Present Market value of the property for aggregate loan above Rs.30 lakhs
including the proposed limit under this scheme.
o Security
Extension of mortgage on the House property for which Housing Loan
was sanctioned.
o Repayment
The loan has to be repaid in 120 equal monthly installments.
o Rate of Interest & Processing Charges
Rate of Interest as applicable to Bank's Existing Housing Loan Scheme in
case of renovation.The rate of interest will be 1% more than the rate of
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existing housing loan in case of refurbishment, buying of furniture,
television, home theater etc.
b) Education Loan:-
The Government of India, Ministry of Human Resource Development,
Department of Higher Education has formulated an Interest Subsidy
scheme on Educational Loans for the students of economically weaker
sections (EWS) for pursuing technical/professional courses in India.
Salient features of scheme are as under:
Scheme is applicable for the loan amount availed from April 01, 2009 to
March31, 2010(Academic Year 2009-10).
For Loans sanctioned earlier to 1.04.2009, only amounts disbursed during
the above period are also eligible.
Applicable to students from EWS with a annual parental/family income
limit of Rs.4.50 lakhs or less and for studies in recognized technical and
professional courses in India after Class XII from institutes recognized by
UGC/AICTE.
Interest subsidy shall be available to the eligible students only once, either
for the first undergraduate degree course or the post graduate
degrees/diplomas. Interest subsidy shall, however, be admissible for
combined undergraduate and post graduate courses.
Entire repayment holiday period interest to be provided as interest
subsidy.
In case of discontinuance of the course midstream, due to expulsion on
disciplinary or academic ground, no interest subsidy to be paid.
Moratorium period: Course duration plus one year or six months after
loaner’s employment, whichever is earlier?
After the period of moratorium is over, the interest on the outstanding loan
amount shall be paid by the student.
Proof of income is required to be certified by Tehsildar or any other
authorities to be designated by the concerned State Government.
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The eligible student has to execute an Agreement with the disbursing
Branch for receiving Interest Subsidy.
c) Vehicle Loan:-
'VEHICLE' Scheme
Sr.
No
Parameter Details
1 Purpose: To purchase two wheeler i.e. Scooters, Mopeds, Motor Bikes,
electronic bikes (e-bikes) and four Wheeler i.e. Car, Jeep,
Utility Vehicles, SUV, electric cars like Reva, battery operated
vehicles etc. for personal use. (i.e. not for hiring/ferrying
passengers)
The finance can also be extended for purchase of old / second
hand cars which should not be older than 3 years and have
expected residual life of minimum 10 years
2 Eligibility: All individuals of age 18 years and above who are
Companies / Proprietorships, Partnership Firm
/Societies/etc.
Minimum Income Criteria (Gross Income)
Salaried Persons:
i. For Four wheelers - Rs.15,000/- p.m.
ii. For Two wheelers - Rs.5,000/- p.m.
Other than salaried person.
i. For Four wheelers - Rs.1,80,000/- p.a.
ii. For Two wheelers - Rs.60,000/- p.a.
3 Quantum of
Finance:
The maximum loan amount should be as under
Indian made vehicles : Rs.20.00 lakh
Imported Vehicles : Rs.40.00 lakh
Old Vehicle : Rs.10.00 lakh
25. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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4 Margin: New Vehicles:-
Upto Rs.20 lakh: 15%
More than Rs.20 lakh: 25%
Old Vehicles:-
40% irrespective of loan amount.
5 Security: Hypothecation of vehicle purchased. Our Hypothecation
charge should be registered with Regional Transport Office
Authorities.
6 Rate of
Interest
& Processing
Charges
Scheme Base
Rate %
(a)
Spread
%
(b)
Effective
Rate %
(a+b)=(c)
Processing
Charges *
Cent Vehicle
Complete
waiver of
Processing
Charges
a) New vehicles
repayable within
36 months
10.75 + 0.75 11.50
b) New vehicles
repayable beyond
36 months
10.75 + 1.50 12.25
c) Second hand
vehicles
10.75 + 3.00 13.75
Cent Vehicle-
TATA Vehicle:
Upto 36 months 10.75 + 1.00 10.75
> 36 months to
60 months
10.75 + 2.00 12.75
> 60 months 10.75 + 3.00 13.75
7 Repayment: Loan is repayable in Equated Monthly Installments
commencing from subsequent month of disbursement as
below.
i. In case of New Vehicle:
26. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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For four wheelers = Maximum 84 months
For two wheelers = Maximum 48 months
ii. In case of Old Vehicle:
Up to 2 years old = Maximum 36 months
More than two years old = Maximum 24
months
8 Guarantee: No Personal Guarantee to be obtained in case of loan up to
Rs.5.00 lakh.
9 Net Take
Home Pay
Criteria:
The sanctioning Authority should ensure that the applicant
complies to Net Take Home Pay criteria of 40% i.e. Net Take
Home Pay after accounting for all deductions including
present loan EMI should be minimum 40% of gross monthly
salary.
10 Prepayment
Charges
No prepayment penalty is levied if the loan is adjusted by the
borrower from his own sources. However, if loan is taken over
by other Banks/Financial Institutes, Prepayment Penalty is
charged @ 1.00 % on outstanding balance on the date of such
take over.
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d) PersonalLoan:-
Personal Loan Scheme (Non corporate)
1 Purpose Personal / Domestic
2 Eligibility Permanent Employees of Railways, Government institutions
central and State Government, schools, Hospitals etc,
having completed 5 years of service and drawing salary
through our branches.
3 Facility Demand Loan
4 Loan
Amount
Twenty times of gross salary subject to maximum
of Rs.500,000/- and minimum net home pay of 40% of gross
salary after taking into consideration payment of statutory
dues, repayment of various loans including the instalment of
proposed loan.
5 Security a) Salary to be routed through account maintained with
our branch.
b) The borrower should give an irrevocable undertaking
for not transferring salary account to any other Bank
during currency of loan. Such undertaking should be
got registered with/acknowledged by the employer.
c) Authority to be obtained from the borrower to debit
the salary account for monthly instalments.
d) In case the salary is not routed through our Branch, the
following undertaking to be obtained for sanction of
loan:
Irrevocable undertaking from the employer to
deduct EMIs from the salary of the borrower
employee and pay the same directly to the
Bank, till full adjustment of loan amount.
Undertaking should cover deductions not only
from salary but also from bonus / exgratia
28. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
Page 28
payment / terminal dues in case of retirement,
death, cessation of service for any other reason
and any other dues from the employer.
6 Guarantee Third party guarantee by a person having worth at least equal
to loan amount and acceptable to Bank.
7 Interest
Rate &
Processing
Fee
Scheme Base
Rate
%
(a)
Spread
%
(b)
Effective Rate
%
(a+b)=(c)
Processing
Charges *
Personal Loan
to other than
Corp.
Employees
10.75 4.50 15.25 Complete
waiver of
Processing
Charges
8 Repayment 48 Months -EMI or within the left over service whichever is
less.
Installments to commence one month after disbursement.
29. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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e) PersonalGoldLoan:-
Nature of Facility
Demand Loan or overdraft against pledge of gold and gold
ornaments of 22 Carat purity.
Purpose
To meet urgent personal expenses like marriage / medical /
educational needs etc.
Target group
Individuals of 18 years and above. Staff members will also be
eligible for the facility on the same terms and conditions. The
borrowers have to open Savings Account with us
Security
Pledge of gold ornaments of 22 Carat purity or Gold Coins sold by
our Bank.
Quantum
Minimum - Rs 10,000/Maximum - Rs 10,00,000/- (Rs 1400/ per
gram maintaining a minimum margin of 20%). Drawingns power
to be revised suitably based on the market value of gold.
Maximum Limit of loan per gram
Rs.1500/- per gram of gold ornaments and Rs.1700/- per gram of
gold coins sold by our Bank, maintaining margin of 20%
Repayment 12 to 36 Months. In the case of overdraft facility, the
limit to be reviewed on annual basis
Rate of Interest & Processing Charges
Base Rate
% (a)
Spread
%(b)
Effective
Rate %
(a+b)=(c)
Processing
Charges *
OD 10.75 +2.00 12.75 Complete waiver
of Process Charges
DL 10.75 +2.00 12.75
30. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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f) Mortgage Loan:-
1 Purpose To meet any sort of Personal or Business needs, but not for
any speculative purpose / real estate activity / capital market
activity.
2 Eligibility Loan against mortgage of immovable property located
in Metro / Urban / Semi Urban/Rural Centers
3 Target
Group
Individuals including staff, singly or jointly, Traders,
Businessmen, Professionals or self employed persons,
proprietary firms, partnership firms (excluding Traders or
partnership firms where HUF is a partner), companies
(excluding NBFCs) and NRIs (with co-borrower locally i.e.
with Resident Indian who is blood relative of the NRI
borrower as co-borrower), having known and regular source
of minimum monthly income of Rs.10,000/- or more and not
engaged in real estate/speculative activity /capital market
activity.
4 Nature of
Facility
Term Loan and Overdraft
The Overdraft facility will be for one year and to be
reviewed annually.
5 Loan
Amount
Minimum : Rs.1 lakh
Maximum: Rs.50.00 lakh for property located in rural
area and Rs.500.00 lakh for property located in other
areas.
EMI inclusive of other borrowings should not exceed
50 % of Gross Monthly Income.
6 Security EM of non-encumbered residential house /flat, commercial or
industrial property situated in metro/urban/ semi urban/rural
centers only in the name and possession of the borrower either
self-occupied or vacant or partially rented out/leased out. The
value of property should be equal to 150- 200% of the loan
amount.
7 Insurance The property will be insured against fire, riots wherever
required and also against other appropriate hazards, such as
earthquake, flood, lightning etc with bank's clause for full
value of the property.
8 Guarantee Personal guarantee of the joint /co-owner of the property (if
any).
In case of mortgage loan to firm/company, personal guarantee
of partners/ directors to be taken.
9 Interest Rate
10 Prepayment Nil, in case prepaid from borrower's own sources.
31. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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Charges If the loan a/c is taken over by other Bank/FI,
prepayment charges to be levied @ 1% of loan
outstanding as on the date of such take over.
11 Repayment Loan is to be repaid in Maximum 120 equated monthly
installments (EMIs), commencing from next month of
disbursement.
Repayment of EMIs through ECS mandate/ Post dated
cheques.
32. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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CHAPTER NO: 5
DATA INTERPRETATION
Table No.5.1 Analysis according to age group.
Graph No .5. 1: Analysis according to age group
(Source: Primary data)
Interpretation:-
From the above data, it is clear that major group of age is 30-35 (30%),
Second major group is 25-30 (28%), major group 20-25 (26%) and minor group is
35 & above (14%),below (2%), and the negligible response is from below 20
group.
0%
5%
10%
15%
20%
25%
30%
Below 20 20-25 25-30 30-35 35 &
Above
2%
26%
28%
30%
14%
Percentage
Percentage
Age-Group Response Percentage
Below 20 02 02
20-25 26 26
25-30 28 28
30-35 30 30
35 & Above 14 14
Total 100 100
33. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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Table No.5.2 Analysis according to Gender.
Graph No. 5.2: Analysis according to gender.
(Source: Primary data)
Interpretation:-
From above data, it reveals that out of total response male respondents are
76% and female respondents are 24%.
76%
24%
Precentage
Male
Female
Gender Response Percentage
Male 76 76
Female 24 24
Total 100 100
34. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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Table No.5.3 Analysis according to occupation.
Graph No. 5.3: Analysis according to occupation.
(Source: Primary data)
Interpretation:
From the above data, it is clear that out of total response, 26% respondents
are Govt. employee, 42% are private employee, 12% are businessmen, 11%
respondents are professor and only 27% respondents are other categories
respectively.
11% 12%
26%
24%
27%
0%
5%
10%
15%
20%
25%
30%
Professor Businessman Govt.
Employed
privet
Employed
Other
Percentage
Occupation Response Percentage
Professor 11 11
Businessman 12 12
Govt. Employed 26 26
Private Employed 24 24
Other 27 27
Total 100 100
35. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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Table No.5.4 Analysis according to income.
Graph No. 5.4 Analysis according to income.
(Source: Primary data)
Interpretation:
From the above data, it is clear that out of the total response, 29%
respondents belong to 2 lack-3 lack, 25% respondents belong to the below 1 lack,
24% respondents belong to 1 lack-2 lack, 22% respondents belong to the higher
income group 3 lack & above.
0%
5%
10%
15%
20%
25%
30%
Below 1 lakh 1 lakh-2 lakh 2 lakh-3 lakh 3 lakh &
above
25% 24%
29%
22%
Percentage
Percentage
Income group Response Percentage
Below 1 lack 25 25
1 lack-2 lack 24 24
2 lack-3 lack 29 29
3 lack& above 22 22
Total 100 100
36. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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Table No.5.5 Analysis according to educational qualification:-
Educational
Qualification
Response Percentage
S.S.C 0 0
H.S.C 2 2
Graduate 38 38
Post graduate 48 48
Other 12 12
Graph No. 5.5 Analysis according to educational qualification
(Source: Primary data)
Interpretation:-
From above data, it shows that out of total response, 0% respondents are
passed S.S.C, 2% respondent are H.S.C, 38% respondents are graduate, 48%
respondents are post graduate & 12% are other qualification.
0%
2%
38%
48%
12%
0%
10%
20%
30%
40%
50%
60%
S.S.C H.S.C Graduate Post graduate Other
Percentage
Percentage
37. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
Page 37
Table No.4.6 Analysis according to loan taken.
Graph No. 5.6: Analysis according to Loan taken.
(Source: Primary data)
Interpretation:
From the above data, we can see that out of total response, 29%
respondents have taken home loan, 21% respondents are taken education loan,
18% respondent are taken vehicle loan, 16% respondent are taken personal loan,
9% respondent are taken gold loan and 7% respondent are taken mortgage loan.
29%
21%18%
9%
16%
7%
Percentage
Home loan
Education loan
Vehicle loan
Gold loan
Personal loan
Mortgage loan
Types of loan Response Percentage
Home loan 29 29
Education loan 21 21
Vehicle loan 18 18
Gold loan 9 9
Personal loan 16 16
Mortgage loan 7 7
Total 100 100
38. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
Page 38
Table No.5.7 Analysis according to which year take a loan.
Graph No. 5.7: Analysis according to which year take a loan.
(Source: Primary data)
Interpretation:
From the above data, it reveals that out of the total respondents ,31% are
taken a loan before 2000, 24% are 2004-07, 22% are 2008-11, 18% are 2000-03
and 5% are 2012 & onwards.
0%
10%
20%
30%
40% 31%
18% 24% 22%
5%
Percentage
Percentage
year Response Percentage
Before 2000 31 31
2000-03 18 18
2004-07 24 24
2008-11 22 22
2012 & onwards 5 5
Total 100 100
39. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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Table No.5.8 Analysis according to marital status
Graph No. 5.8: Analysis according to marital status.
(Source: Primary data)
Interpretation:
From the above data, it shows the analyses according to marital status 28%
are married and 72% are unmarried.
28%
72%
Percentage
Married
Unmarried
Married & unmarried Response Percentage
Married 28 28
Unmarried 72 72
Total 100 100
40. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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Table No.5.9 Analysis according to different sources of information.
Graph No. 5.9: Analysis according to different sources of information.
(Source: Primary data)
Interpretation:
From the above data, it is revealed that out of total response, 22 respondents
are select loan as friend’s advice. , 20% are from internet, 20% are from news
paper, 21 are from bank, 12% are other and 5% are from T.V.
0%
5%
10%
15%
20%
25%
5%
20% 21% 22%
20%
12%
Percentage
Sources Response Percentage
T.V. 5 5
News papers 20 20
Bank 21 21
Friends 22 22
Internet 20 20
Other 12 12
41. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
Page 41
Table No.5.10 Analysis according to Factors responsible for selection of loan.
Graph No.5.10: Analysis according to factors responsible for selection of
loan.
(Source: Primary data)
Interpretation:
From the above data, we can say that out of total respondent 31% are rate of
interest, 23% are low documentation, 18% are convenient repayment, 16% are
low service charges and 12% are good customer service.
0%
5%
10%
15%
20%
25%
30%
35%
31%
23%
16%
12%
18%
Percentage
Percentage
Factors Response Percentage
Rate of interest 31 31
Low documentation 23 23
Low service charges 16 16
Good customer service 12 12
Convenient repayment 18 18
Total 100 100
42. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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Table No.5.11 Analysis according to Rate of interest.
Level of significance Response Percentage
High significant 56 56
Significant 26 26
Not significant 18 18
Total 100 100
Graph No. 5.11: Analysis according to Rate of interest.
(Source: Primary data)
Interpretation:
From the above data, Out of total respondents 56% are high significant, 26%
are significant and 18% are not significant.
0%
10%
20%
30%
40%
50%
60%
High
significant
Significant Not
significant
56%
26%
18%
Percentage
Percentage
43. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
Page 43
Table No.5.12 Analysis according to easy & fast procedure.
Level of
significance
Response Percentage
High
significant
59 59
Significant 31 31
Not significant 10 10
Total 100 100
Graph No. 5.12: According to easy & fast procedure.
(Source: Primary data)
Interpretation:
From the above data, Out of total respondents 59% are high significant, 31%
are significant and 10% are not significant.
59%
31%
10%
Percentage
High significant
significant
Not significant
44. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
Page 44
Table No.5.13 Analysis according to Low documentation.
Graph no.5.13: According to Low documentation
(Source: Primary data)
Interpretation:
From the above data, we can see that out of total respondents 81% are
said Yes and 19% are said No.
0%
20%
40%
60%
80%
100%
Yes No
81%
19%
Percentage
Percentage
Yes/no Response Percentage
Yes 81 81
No 19 19
Total 100 100
45. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
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Table No.5.14 Analysis according to low service charges.
Yes/No Response Percentage
Yes 60 60
No 40 40
Total 100 100
Graph No. 5.14: According to low service charges.
(Source: Primary data)
Interpretation:
From the above data, we can see that out of total respondents 60% are said
Yes and 40% are said No.
60%
40%
Percentage
Yes
No
46. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
Page 46
Table No.5.15 Analysis according to face any difficulty.
Yes/No Response Percentage
Yes 19 19
No 81 81
Total 100 100
Table No. 5.15: According to face any difficulty.
(Source: Primary data)
Interpretation:
From the above data, we can see that out of total respondents 81% are said
Yes and 19% are said No.
19%
81%
Percentage
Yes
No
47. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
Page 47
Table No.5.16 Analysis according to grade.
Grade Response Percentage
Excellent 29 29
Good 35 35
Average 21 21
Poor 15 15
Total 100 100
Graph No. 5.16: Analysis according to grade
(Source: Primary data)
Interpretation:
From the above data, It is clear that 35% respondents are given excellent
grade, 29% are given good, 21% are given average and 15% are given poor.
29%
35%
21%
15%
Percentage
Excellent
Good
Average
Poor
48. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
Page 48
Table No.5.17 Analysis according to property as mortgage.
Type of property Response Percentage
Plot paper 29 29
House paper 7 7
Insurance paper 21 21
Other 43 43
Total 100 100
Table No. 5.17: According to property as mortgage
(Source: Primary data)
Interpretation:
From the above data, It is clear that 29% respondents are mortgage there plot
paper, 21% are given insurance paper, 7% are given house paper and 43% are
given other documents as mortgage.
29%
7%
21%
43%
Percentage
Plot paper
House paper
Insurance paper
Other
49. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
Page 49
CHAPTER NO: 6
FINDINGS & CONCLUSIONS
6.1 FINDINGS:-
It is found that, majority of respondents were between the age group of 30-
35.
Majority of respondent were male.
Majority of respondents were government employees.
Majority of respondents were unmarried.
Majority of respondent were taken a loan before the year 2000.
It is found that, rate of interest, low documentation, low service charges;
good customer service and convenient payment were the most important
factor which plays an important role in decision making process of
selecting loans.
Majority of respondents were not facing any difficulty while taken a loan
from bank.
Majority of respondents have post graduate and their income is 1 lack to 3
lack and taken different types of loan and enjoy the benefits of these loans
schemes.
Majority of respondents have given good grade to bank because of their
cheapest interest rate, low documentation and low charges etc.
Majority of respondents have taken home loan from Bank of Baroda of
India because of their cheapest interest rate and these people are in age
group of 32 to 35.
Majority of respondents got information about different loan schemes of
Bank of Baroda of India from friends i.e. 22%. It means that, friends were
strongest source of information.
50. “A study of various loans scheme provided by Bank of Baroda in Khamgaon”
Page 50
6.2 SUGGETIONS:
Branches of organization should arrange customers meeting to popularize
these lending schemes.
Bank of Baroda should appoint financial adviser for loans. At the apex
level a lot of publicity should be given on the advantages of bank loans.
Loan application forms should be simplified.
The system of changing a reduced rate of interest based on the credit
rating of the borrowers may be introduced in personal loan schemes.