The presentation will provide an introduction to Rajkot
Nagarik Sahakari Bank Ltd.
The presentation will then establish the definition of a
‘long term loan’.
The presentation will evaluate the ‘long term loan
policies’ of Rajkot Nagarik Sahakari Bank Ltd.
Rajkot Nagarik Sahakari Bank is a leading Co-operative
Bank in Gujarat state, India.
It was established on 5th October 1953 with a small
capital of Rs.4890 and had a membership of 59 members
under the leadership of late Keshav Amritlal Parkeh.
The membership of the bank has increased to 2,50,000
as of 2014. The bank has more than 6 lakh deposit
accounts with a deposit base of 711 crores. It has lent
more than 485 crores as advances.
A loan is a debt provided by one entity to another at an
interest rate, and evidenced by a note which specifies
among other things, the principal amount, the interest
rate and date of repayment.
1. Secured Loans: A secured loan is a loan in which the
borrower pledges some asset as a collateral. Ex:
2. Unsecured Loans: Unsecured loans are loans that are
not secured against the borrower asset.
3. Demand loans are short term loans. In other words,
they are atypical in that they do not have a fixed date of
repayment and they carry a floating interest rate which
varies according to the prime lending rate. They may ne
called for repayment at any time. Demand loans may be
secured or unsecured.
Long term loans can be defined as those loans that have a
fixed date of repayment and fixed rate of interest. So, by
implication any loan policy of the Rajkot Sahakari Bank
that fulfils these criteria can be characterized as long term
The various types of loans provided by Rajkot
Nagarik Sahakari Bank Ltd. are:
1. Loans for Domestic Appliances
2. Loans Against Fixed Deposits
3. Loans Against Gold Ornaments
4. Loans Against Land Buildings
The Maximum loan amount is 60% of the purchase value of
the domestic appliance or Rs. 20,000 whichever is lesser.
The rate of interest levied is 13.50%.
The duration of the repayment is 66 months.
To avail this loan facility, the person must
1. be member of Rajkot Nagarik Sahakari Bank Ltd.
2. He must have the guarantee of 2 Guarantors. However, the
two guarantors cannot be his relatives.
3. Quotation of the item to be purchased must be there in the
application. On sanction, the payment will directly be made
to the dealer.
Loans are provided by Rajkot Nagarik Sahakari Bank Ltd.
against Fixed Deposit Receipts (FDr).
A fixed deposit is financial instrument provided by banks
which provides investors with higher rate of interest than
regular savings account. They are time deposits/ term
deposits. In other words, they can be withdrawn after the
expiry of a fixed period of time. Banks issue a separate
receipt for every Fixed Deposit. This receipt is known as
Fixed Deposit Receipt.
Normal interest rate on the Loan is the Rate of Interest in
Third Party FDr is also accepted as security.
In order to overcome the immediate need of the small
people, bank has a Gold Loan Scheme.
An interest rate of 12% is charged on the loans provided
on the Gold Loan Scheme.
Bullet Payment facility available for an amount upto Rs.
1,00,000. In amounts in excess of 1,00,000 the loan
amount is disbursed by way of installments.
The Gold ornaments will be preserved in safe under the
supervision of Bank Official. It is returned to the
borrower on the repayment of loan.
The duration of repayment of the loan is 180 months.
The loan amount is 80-100% of the Market Value or the
Document value of the Land/ Building in the question.
The loan amount is granted having due regard to the risk
The person can have one person as guarantor if the
guarantor owns immovable property. In any other case,
the person who seeks to secure the loan shall have two
The property has to be located in the Nagarpalika in
order to avail the loan facility.
The maximum amount that can be disbursed to a member is
Rs.5000 and Rs. 10,000 to its employees.
For Government employees Salary deduction confirmation duly
signed by authorized signatories is a must for availing the loan
The duration of repayment is 40 months.
The rate of interest is 15.50% of the loan amount.
The requirements for availing the loan facility are:
1. There should be two members who are required to be
2. The source of income of the applicant and guarantor shall be
3. The member who is applying for the loan shall have Smart
Loans are provided upto 75% of the value of the vehicle
If a customer is purchasing an old vehicle upto 5 years old,
50% of the value is provided as loan.
40 equal installments for Advances upto 1 Lakh Rupees and
rate of interest is 13.50%.
40 equal installments for advances above 1 lakh to 10 lakh &
Rate of Interest is 14.25%.
The lender should have two guarantors who will guarantee the
repayment of the loan.
A security deposit worth 1000/- for 2 wheelers, 3000/- for 3
wheelers and 10,000/- for 4 wheelers.