The document provides details about a study report submitted to Tezpur University on the procedure for disbursing commercial loans by Allahabad Bank, including its related aspects and case study of the Tezpur branch. It includes an introduction to banking and loan types. It then discusses Allahabad Bank's profile and details three main types of commercial loans offered: commercial vehicle finance scheme, trade loan, and property loan. For each loan type, it outlines the eligibility criteria, terms, rates of interest, and documentation required. The report aims to understand the end-to-end loan disbursement process and related policies.

1. A Detailed Study Report on the Procedure of
Disbursing Commercial Loans and Its Related Aspects
With Special Reference To
Submitted To-
Dr. (Prof.) Chandana Goswami
Department of Business Administration
Tezpur University
Submitted By-
Suparna Neog (BAM16006)
Saurav Kumar Choudhury (BAM16015)
Suprakash Kar (BAM16016)
Chandan Kumar Das (BAM16032)
Vandana Dutta (BAM16039)

3. PREFACE
This report attempts to bring under one roof the entire work and dedication
put by our group in the completion of the project work on “Procedure of
Disbursement of Commercial Loans by Allahabad Bank and its related aspects.”
We have expressed our experiences in our own simple way. We hope all the
readers of this report find it useful and informative and it will be worth reading. All
constructive feedback is cordially invited.
1

4. ACKNOWLEDGEMENT
Every project big or small is successful largely due to the effort of a number
of wonderful people who have always given their valuable advice or lent a helping
hand. We sincerely appreciate and thank for the inspiration, support and guidance
of all those people who have been instrumental in completing and making this
report a success.
At this juncture we feel deeply honored in expressing our sincere thanks to
Mr. Pankaj Neeraj, Senior Manager, Allahabad Bank, Tezpur Branch for
making the resources available at right time and providing valuable insights
leading to the successful completion of our project.
We the students of Department of Business Administration are extremely
grateful to Dr. (Prof.) Chandana Goswami Madam for the confidence bestowed
in us and providing us the opportunity to learn and understand the matter well.
Last but not the least we place a deep sense of gratitude to all our friends
who have been constant source of inspiration during the preparation of this Project
Report.
-Regards
Suparna Neog
Saurav Kumar Choudhury
Suprakash Kar
Chandan Kumar Das
Vandana Dutta
2

5. CONTENTS
TOPIC PAGE NO.
PREFACE 1
ACKNOWLEDGEMENT 2
CONTENTS 3-4
LIST OF TABLES 5
LIST OF FIGURES 5
Introduction 6 – 8
Allahabad Bank : Its Profile 9
Commercial Loan 10 – 12
Commercial Vehicle Finance Scheme 13 – 16
Trade Loan 17 – 19
Property Loan 20 – 23
Processing Fees & Repayment Fees 24
Documentation 25 – 26
Recovery of overdue loan 27
Disbursement of loan 28 – 29
Findings of the study 30
3

6. TOPIC PAGE NO.
Conclusion 31
Reference 32
Questionnaire 33 – 36
4

7. LIST OF TABLE
SL.
Table Page No.
No.
1
Rate of interest of AB Commercial Vehicle Finance
14
Scheme
2 Rate of interest of AB Fleet Finance Scheme 16
3 Rate of interest of Trade Loan 19
4
Processing Fees & Prepayment Fees for Commercial
24
Loan
5 Documents to be submitted to the bank 25 – 26
LIST OF FIGURE
SL.
Figure Page No.
No.
1 Functions of Banks 7
5

8. INTRODUCTION
Accounting for trillions in asset worldwide, the banking system is a crucial
component of the global economy. Banks are one part of the world of financial
institutions, standing alongside investment banks, insurance companies, finance
companies, investment managers & other companies that profit from the creation
and flow of money. As financial intermediaries, banks stand between depositors
who supply capital and borrowers who demand capital.
The Indian Banking Sector is broadly classified into Scheduled Bank and
Non-Scheduled banks. The Scheduled banks are those included under the 2nd
Schedule of the Reserve Bank of India Act, 1934. The Scheduled Banks are further
classified into : Nationalized Bank ; State Bank of India and its associates ;
Regional Rural Banks (RRBs) ; Foreign Banks ; and other Indian private sector
banks. The term commercial bank refers to both Scheduled and Non-Scheduled
commercial banks regulated under The Banking Regulation Act, 1949.
Types of Bank:
Savings Bank: These banks function with the intention to culminate savings
habits among people, especially those who belong to low income groups or those
who are salaried.
Commercial Bank: these banks functions to help the entrepreneurs and
businesses.
Cooperative Bank: these banks are controlled, owned, managed and operated by
cooperative society and came into existence under the Cooperative Societies Act,
1912.
6

9. Investment Bank: these are financial institutions that provide financial and
advisory assistance to their customers.
Specialized Bank: these banks provide unique services to their customers which
include Foreign exchange Banks, Development Bank, Export Bank, etc.
Central Bank: the central bank is banker’s bank in a country. It regulates the
monetary policy of the country. In India Reserve Bank Of India is the Central
Bank.
Functions of Banks:
Figure 1 : Functions of Banks
7

10. Loan and its Types:
In Finance a loan is the lending of money from one individual, or business
organization or entity to another individual, organization or entity. A loan is a debt
provided by an entity to another entity at an interest rate.
A bank loan is a fixed amount for a fixed term with regular fixed
repayments. A bank loan can be further sub-divided into:
 Secured Loan (Example: - Home loan, vehicle loan, etc.)

 Unsecured Loan (Example: - Credit card facility, personal loan, etc.)

 Demand Loan (Example :- Overdraft)

 Subsidized Loan (Example :- Subsidized Education Loan)

 Concessional Loan (Example :- The Chinese government announced a
grant and soft loan package totaling US$23 million to support Ethiopian
development activities.)
Objective of the study:
The project has been undertaken to study the procedure of disbursing commercial
loan of Allahabad Bank, Tezpur Branch.
8

11. ALLAHABAD BANK: IT’S PROFILE
Allahabad Bank is a nationalized bank with its headquarters in Kolkata,
India. It is the oldest joint stock bank in India. It was founded in the year 1865 in
Allahabad. On 24 April 2014, the bank entered into its 150th year of establishment.
As of 31 March 2015, Allahabad Bank had over 3,071 branches across India.
The bank did a total business of INR 358,352 crore during the FY 2015-16. The
bank's market capitalization in March 2016 was INR 6178.32 crore and it
ranked 1,834 on the list.
VISION AND MISSION STATEMENT:
VISION: To put bank on a higher growth path by building a strong customer-base
through Talent Management, induction of State-of-the-art Technology and through
Structural Re-organization.
MISSION: To ensure anywhere and anytime banking for the customer with latest
state-of-the-art technology and by developing effective customer centric
relationship and to emerge as a world-class service provider through efficient
utilization of Human Resources and product innovation.
Employee:
As on 31 March 2016, the bank had 24,557 employees, out of which around
15% were women. Out of the total employees, 51% were officers, 30% were clerks
and remaining 19% were subordinate staff.
Allahabad Bank provides various loans and advances, but with our limited
scope, time and resources we will only focus on the types of commercial loan the
bank offers to its customers.
9
Forbes Global 2000

12. COMMERCIAL LOAN
A commercial loan is a debt-based funding arrangement between a business
and a financial institution, typically used to fund major capital expenditures and/or
cover operational costs that the company may otherwise be unable to afford. Most
of the commercial loans are secured.
Expensive upfront costs and regulatory hurdles often prevent small
businesses from having direct access to debt and equity markets for financing. So,
smaller businesses must rely on other lending products, such as a line of credit,
unsecured loans or term loans.
Types of Commercial Loan
Cash Credit Facility :
Cash Credit Facility are loans granted in the form of overdrafts on the
security of stock in trade or process or raw materials. Cash credit facilities are
usually secured by pledging current assets of the organization like inventory or
receivables. Cash credit limits are based on drawing power which is arrived at after
deduction of margin fixed by the bank over the stocks. It is ensured that the
balance outstanding doesn’t exceed the drawing power. Cash credit facility is ideal
for financing working capital.
Accounts Receivable Loan :
An Accounts receivable loan allows us to pay monthly operating expenses
while waiting for payments from customers. This type of loan is based on having
credit worthy customers.
10

13. Term Loan :
Term loans provide a set amount of capital for a particular need. These loans
are funded all at once and then paid back over a specified length of time, generally
5 to 15 years. Term loans are secured with cash, inventory, equipment, securities or
real estate.
Equipment and Vehicle Loan :
These loans are provide for purchase of computer, heavy equipment, new or
used car, van, truck or other machinery for commercial use. Repayment terms are
dependent upon type and age of collateral.
Real Estate Loan :
Financing is for purchase, refinance or construction of office buildings,
apartments, retail buildings, industrial buildings, medical/dental offices or
warehouses. Collateral is usually the property acquired or refinanced.
Land and Subdivision Development
This type of loan allows us to purchase a lot to build on or buy land to
subdivide. Subdivision loans usually allow up to 18 months to subdivide, improve
and begin selling. Lot loans usually allow up to 5 years.
Letter of Credit :
A Letter of Credit is a type of credit facility wherein the bank guarantees
that the seller will receive payment on certain conditions. In the event that the
buyer vis unable to make payment on the purchase, the bank will cover the
outstanding amount. Letters of Credit are often used by import/export business,
11

14. contractors and travel agencies to serve as an assurance of payment. Documentary
letters of credit are usually for less than six months. A stand-by letter of credit may
be renewed annually.
Types of commercial loan rendered by Allahabad Bank
A variety of business loans are available to suit the requirements of various
types of requirements of the divergent business units. Allahabad Bank believes that
for any business unit to succeed the availability of funds throughout its life cycle is
of paramount importance and hence Allahabad Bank offers a wide range of
services in loan segment to meet the banking requirements of its business clients.
However the limit of the loans to be provided are decided keeping a view the
need of the organization / proprietor, value of security offered, credit score of the
customer, previous relationship with the bank and other alike factors.
The various kinds of business advances under the roof of Allahabad Bank
include the following:-

Commercial Vehicle Finance Scheme



Trade Loan



Property Loan

12

15. COMMERCIAL VEHICLE FINANCE SCHEME`
The Commercial Vehicle Finance Scheme of Allahabad Bank is further
subdivided into:-

AB Commercial Vehicle Finance Scheme



AB Fleet Finance Scheme

AB Commercial Vehicle Finance Scheme
Eligibility Criteria:
All individual transport operators/firms/companies/association of persons engaged
in transportation business.
Minimum Age :
 Individuals 21-65 years.

 Partnership Firms, Companies & Associations of persons should have in
existence for at least 2 years.
Quantum of Finance :
Maximum INR 200 lakhs.
Margin :
For loans up to INR 5 lakhs – 10% of the Project Cost.
For loans above INR 5 lakhs – 20% of the Project Cost.
13

16. Working Capital :
25% minimum.
Moratorium Period :
Up to 3 months
Repayment Period :
Five years including moratorium period. (7 years in case of heavy
commercial vehicles.)
Security :
Primary: Hypothecation of vehicles.
Collateral: Suitable collateral security.
Insurance :
Comprehensive insurance of the vehicles with Bank’s clause at the borrowers
cost till pendency of the loan.
Rate of interest :
Loan Amount Micro Enterprise Small Enterprise
Up to Rs.0.50 Lac 9.55% 9.55%+0.50%
Above Rs.0.50 Lac to
9.55%+1.00% 9.55%+1.50%
Rs.2Lac
Above Rs.2 Lac to
9.55%+1.50% 9.55%+2.00%
Rs.10Lac
Above Rs.10.00 Lac Rate of Interest is linked to Risk rating of the borrower
Table 1 : Rate of interest of AB Commercial Vehicle Finance Scheme
14

17. AB Fleet Finance Scheme
Eligibility Criteria:
Surface Transport Operators owning 10 vehicles and having 3 years experience in
the line of activity.
Minimum Age:
 Individuals – 18 to 60 years.

 Partnership Firms, Companies & Associations of persons should have in
existence for at least 3 years.
Quantum of Finance:
Minimum above Rs 200 lacs, Maximum Rs 500 lacs
Purpose:
Financing Trucks, Tankers, Trailers, Luxury Busses etc..
Margin:
Term Loan For Chassis 20% of the cost.
Body Building – 30% of the cost.
Road Tax & Insurance – 10% of the cost.
Working Capital:
25% minimum.
15

18. Moratorium Period:
Up to 3 months
Repayment Period:
Maximum 7 years.
Security:
Primary: Hypothecation of vehicles.
Collateral: varies from case to case and in some cases fully waived.
Insurance:
Comprehensive insurance of the vehicles with Bank’s clause at the borrowers
cost till pendency of the loan.
Rate of interest :
Loan Amount Micro Enterprise Small Enterprise
Up to Rs.0.50 Lac 9.55% 9.55%+0.50%
Above Rs.0.50 Lac to
9.55%+1.00% 9.55%+1.50%
Rs.2Lac
Above Rs.2 Lac to
9.55%+1.50% 9.55%+2.00%
Rs.10Lac
Above Rs.10.00 Lac Rate of Interest is linked to Risk rating of the borrower
Table 2 : Rate of interest of AB Fleet Finance Scheme
16

19. TRADE LOAN
Target Group:
 All Traders who are individuals, firms, companies, co-operative societies dealing
in any lawful trading activity i.e. trading in goods & services, which is neither
restricted nor prohibited by RBI/Govt.

 Business concerns/agencies providing services such as Xeroxing, dry cleaning,
licenses to deal in petroleum products/LPG, auto service centers, ISD/STD PCO
Booths etc. are also eligible.
Eligibility:
 Traders/ Business concerns having Registration/ License as applicable under local
laws (i.e. Shops & Establishments Act)/ appropriate authorities.

 The proponent should preferably be engaged in the line of business for at least
one complete financial year for which Income Tax Returns have been submitted
along with Statement of Financial Results duly certified by a firm of Chartered
Accountants acceptable to the sanctioning authority. The unit should be a profit
making one.
Purpose:
 Working Capital Requirements: To meet day to day working capital requirement
of the unit/establishment.

 Term Loan: Acquiring/construction of premises, go-downs on ownership basis
required for running the business/for repair, furnishing, renovating existing
17

20. business premises and/or purchase of furniture & fixtures and for purchase of
brand new equipments, business tools, computers, UPS etc.
Quantum of Loan:
Credit facilities will be sanctioned up to a limit of Rs. 5.00 Crore.
Security:
Primary
Exclusive hypothecation charge on stocks, book debts & other current assets and
exclusive hypothecation charge on all fixed assets such as, equipments, business
tools, computers, furniture & fixtures etc. of the unit. In case of loan sanctioned
for acquiring/ construction of premises on ownership basis, the property should
be mortgaged in favour of Bank as per Bank’s manual of mortgages.
Collateral
For existing units :
 Collateral security in the shape of NSC’s, LIP (Surrender Value) or any other
tangible security with realizable value at least equivalent to 75% of the total
exposure.
For New units:
 Collateral security in the shape of NSC’s, LIP (Surrender Value) or any other
tangible security with realizable value at least equivalent to 100 % of the total
exposure.
18

21. Guarantee:
 In case of Partnership firms, personal guarantee of all the partners.

 For Private Limited companies, personal guarantee from all the promoter
directors required.

 For Public Limited companies, personal guarantee of at least one of the promoter
directors and/or directors having major financial stake in the business required.
Margin:
 25% on stocks

 30% on receivables up to 90 days only

 25% on term loan sanctioned for equipments, tools, furniture & fixture, computer
hard-wares etc.

 50% on term loan sanctioned for acquiring/construction of premises, go-downs.

 20% cash for Letter of Credit/ Bank Guarantee.
Tenure of Repayment:
Depending upon the cash flows as well as effective life of the equipment, a
maximum of 84 months including moratorium.
Rate of interest:
Loan Amount Micro Enterprise Small Enterprise
Up to Rs.0.50 Lac 9.55% 9.55%+0.50%
Above Rs.0.50 Lac to
9.55%+.050% 9.55%+1.00%
Rs.2Lac
Above Rs.2 Lac to
9.55%+1.0% 9.55%+1.50%
Rs.10Lac
Above Rs.10.00 Lac Rate of Interest is linked to Risk rating of the borrower
Table 3: Rate of interest of Trade Loan
19

22. PROPERTY LOAN
Target Group:
 Individuals (singly or jointly) including salaried persons, professionals & self-
employed and agriculturist/ firms / company/ trust/ societies registered under
Society Act

 The loan for trust and society will only be permitted for those activities which
are covered under trust / society deeds.

 Loan to HUF is not considered.
Eligibility:
Income Criteria
 Individual: Income should be minimum Rs.1.20 Lacs per annum.

 Joint Borrower: While computing quantum of loan in case of joint borrowers,
income of all borrowers will be clubbed.

 In case of firm/ Company, Net Cash generation (after adding back depreciation)
is considered as income for calculation of loan amount and considering repayment
capacity. However, the income will be taken as per audited balance sheet/ IT return
of last financial year.

 In case of firm, personal income of proprietor/ partners and in case of company
personal income of Directors may be clubbed with the income of firm /Company if
the source of income is different.
20

23. Age Criteria
 Minimum 21 years & maximum 70 years at the time of sanction of loan.

 In case of Firms/ Companies/ Society/ Trust, it should be minimum five years
old.
Nature of owned property Criteria
 Un encumbered Residential or Commercial Property free from all litigation (i.e.
litigation with tenant or other occupant) in the name/s of borrower/s & situated at
good residential or business centre will be covered in the Scheme. Property should
be in the name of the proposed Borrower.

 Loan will not be extended against property that have been developed /
constructed for the purpose of sale.

 Loan will not be extended against Agricultural Property.

 Loan will not be extended against Partition Deed.

 Open Land under this scheme can also be accepted on the condition that Land is
identifiable, demarcated, situated in residential/ commercial area and easily
marketable.
Purpose:
Any Purpose for meeting business/ personal needs but not for speculative Purpose.
However, Loan / limit sanctioned to the companies / firms should be for existing
business purpose only.
21

24. Loan Amount:
Minimum: Rs.5.00 Lac
Maximum: Rs 200.00* Lacs
 For Salaried Persons: 36 times of monthly take home salary.

 For others except agriculturist: 3 times of the net cash generation (after
adding back depreciation) as per audited Bal. Sheet/ I.T Return of last
Financial Year.

 For Agriculturist: 3 times of the net annual income. The income will be
assessed on the basis of value of produce less standard cost of production
(as prescribed by NABARD/ DLCC from time to time) as per the
cropping pattern adopted by the agriculturist.
Repaying Capacity:
Net monthly Income/Take Home Salary (taking in to account all existing & new
deductions/EMI) should not be below 40% of the Gross Monthly Income/Salary.
Margin :
 50% of the valuation of property in case of Residential & Commercial Building.

 60% of the valuation of property in case of open land.
Primary Security:
Equitable Mortgage of Property against which loan is sanctioned.
Property to be mortgaged should be on first charge basis.
22

25. Guarantee:
In case of credit facility in the name of firm/ company/ Trust/ society, personal
guarantee of proprietor/ individual
major partners/ promoter directors/ Trustee/office bearer or authorized signatory
to be obtained.
Repayment :
Maximum 108 Months (Equated Monthly Installment). Repayment
will start from next month of the date of disbursement.
Rate of interest:
9.55% (Marginal Cost Lending Rate) + 5.50%
23

26. PROCESSING FEES & PRE-PAYMENT FEES
Scheme Processing Charges Prepayment Penalty
Up to Rs 25 lakhs 1.22%,
Minimum Rs 30705
Above Rs 25 lakhs 0.61%,
2.28% of Outstanding Balance only
7Property Loan Minimum Rs 30705
in case of takeover.
Above Rs 150 lakhs 0.31%,
Minimum Rs 92115
Rs 230 per lakh
Trade Loan Minimum Rs 2047
2.28% of Outstanding Balance only
in case of takeover
Maximum Rs 23029
Commercial
0.41% of loan 2.28% of Outstanding Balance only
Vehicle Finance
Minimum Rs 2047 in case of takeover
Scheme
Table 4: Processing Fees & Prepayment fees for commercial loan
24

27. DOCUMENTATION
TYPE OF CUSTOMERS
GENERAL
SPECIFIC DOCUMENTS
DOCUMENTS/KYC
ID PROOF BANK STATEMENTS, LAST 2
(PASSPORT, VOTER YEARS ITR’S, GUARANTOR
ID, DL, AADHAR AGREEMENT,
CARD), ADDRESS HYPOTHECATION/MORTGAGE
PROOF ( RATION AGREEMENT, PROOF OF
CARD, TELEPHONE BUSINESS EXISTENCE,
BILL, ELECTRICITY PROJECT REPORTS, CASH
INDIVIDUALS/PROPRIETORS BILL, LEASE FLOW REPORTS, ESTIMATED
AGREEMENT, TRADE PROFITABILITY REPORTS,
LICENSE), COPY OF PROJECTED INCOME ETC.
PAN CARD, ,
EDUCATIONAL
QUALIFICATION
CERTIFICATES, AGE
PROOF, ETC.
PROOF OF BUSINESS CASH FLOW REPORTS,
EXISTENCE ESTIMATED PROFITABILITY
REPORTS, PROJECTED
PROJECT REPORTS,
INCOME, DETAILS OF
TRADE LICENSE, EXISTING ASSETS AND THE
BUSINESS UNITS/ENTITIES PROJECTED BUSINESS WORKING CYCLE,
BALANCE SHEET,
Memorandum and Articles of
Association of the Company,
BANK STATEMENTS, GUARANTOR AGREEMENT,
ITR’S, ETC. HYPOTHECATION/MORTGAGE
AGREEMENT, etc.
25

28. Copy of Ration Certified copy of
card/Passport / Voter Memorandum and Articles of
ID card of all the Association /Certificate of
promoters / directors / Incorporation,
SMSE/ SSI guarantors, Audited Financial statements
photograph of all the for the last three years, SSI
promoters / directors, registration certificate.
etc. Bio data and Net worth, etc.
Table 5: Documents to be submitted to the bank
26

29. RECOVERY OF OVERDUE LOANS
The bank disburses loans to its customers always with good faith and with
the expectation that the customer shall remain loyal to the bank and will not
default over the same. However many a times it is found that the customers do not
keep the faith intact and the loans turns into an Non Performing Asset (NPA). As
such bank has certain policies regarding the recovery of unpaid loans and NPAs.
This includes the following:-
 At the first stage a demand notice is served to the customer for repayment
of the outstanding interest installments.

 Secondly if the customer does not reply, the bank will serve a Legal
Notice to the customer.

 Thirdly a total loan amount recall notice is sent to the customer.

 After that the loan is declared as an NPA and appropriate steps are
undertaken for auctioning of the property kept as security under the
SARFAESI Act (Securitization and Reconstruction of Financial Assets
and Enforcement of Security Interest Act).

 As a last step the bank also files a case with the Lok Adalat against
the willful defaulter.
27

30. DISBURSEMENT OF LOAN
The procedure for disbursement of loan at Allahabad Bank is as follows:
1. Filled in Application Form: - The bank receives the filled in loan application
form along with all other necessary documents from the customer. The loan
application form contains certain fields for entering personal and property
details, loan amount required tenure for which the loan is required and most
importantly the purpose of the loan.
2. Scrutiny of documents and the Application form: - Once the bank has
received the application form with documents, it does a proper and through
scrutiny of all the papers and asks for a cheque regarding the processing fee from
the customer. The bank has also provisions for refunding of the processing fees if
the loan is rejected. The process of scrutiny of loan documents is done within
time frame of 5-7 days depending upon the loan amount seeded.
3. On the basis of the loan amount the application once scrutinized and found
appropriate is forwarded to the Credit Managers for further approvals and
completion of formalities who in turn assesses the various risk factors involved
on the loan.
4. Field Investigation: - The bank usually carries on a field verification of the
prospective buyers through undisclosed agents who provides a confidential report to
the Credit Manager regarding various parameters on which the visit is done.
5. Approval/Rejection: - The bank after completing all its formalities and
checks on the customer, it either approves or rejects the loan application. In case
of rejection, the applicant is informed with proper reasons for rejecting and the
processing fee is refunded as per bank policies.
28

31. 6. Sanctioning: - Once the bank approves a loan of the customer, the amount of
loan is sanctioned in the name of the applicant which may vary form 75-90% of the
loan amount applied for depending upon bank policies. The bank issues a sanction
letter to the customer and the customer is asked to provide further documentation
for disbursement of the loan within the time frame provided and signing of the loan
agreement takes place at this stage.
7. Disbursement: - The bank will finally disburse the amount of loan to the
customer through cheque/ draft in the name of the applicant. The applicant is also
informed from time to time regarding any changes in the interest rates , EMI’s
etc with regards to the loan he/she has taken.
8. Post Disbursement Review: - The responsibility of the bank does not end with
the disbursement of the loan. Allahabad Bank has the policy of reviewing the
utilization of the loan amount by the customer quarterly through which it
determines whether the said amount has been utilized for the purpose mentioned in
the loan application.
29

32. FINDINGS OF THE STUDY
Allahabad Bank being one of the topmost nationalized and commercial bank
in India with an asset size of Rs 235828.38 crores is serving to a large public size
in India with respect to Commercial Loan lending. Currently its total loan size
amounts to Rs 157707 crores as on March 2016 through its 6300 branches spread
across India.
Through the study of this project we came to know the entire process of
disbursement of commercial loans starting from the base till the end, its types and
all other related aspects.
The bank has a total of 3 types of commercial loans available under it
primarily. However it has many other forms of loans to suit the business
requirements of its clients and prospective borrowers. The bank is also taking
initiative in providing loans mainly to the small scale sector business units, small
business units, Small Scale Industries etc. It has also adopted certain women
friendly strategies to attract woman entrepreneurs like providing loans at an
concessional rates. However it also caters to large business houses for meeting
their short term liabilities and fund requirements.
With respect to Tezpur Branch of Allahabad Bank we found that currently it
does not have large base of commercial loan customers but it is trying to expand its
base at a large scale by attracting customers through implementation of new
marketing strategies of banking products, field visits and conducting survey of
customers requiring business loans. This Branch is mainly serving its local area,
small scale business houses and is being approached mainly by industries like
Commercial Dairy Units, Packaging Industries, Agri Business Units and
Readymade Food Packaging Units etc.
30

33. CONCLUSION
Based on the study conducted at Tezpur Branch of Allahabad Bank with
respect to Commercial Loans we can conclude that presently the branch has a
limited number of offers in terms of commercial loans and it has also a limited
base of customers for Business Loans. The branch is currently categorized as a
Semi Urban Branch. However the bank’s other zonal branches and regional
branches are fully functioning in terms of disbursement of Business Loans.
We also came to know about the total process of disbursing a Commercial
Loan and all its related aspects and the various types of loans available under the
roof of Allahabad bank.
However the bank is seen to be taking lot of initiative in attracting
customers, helping them financially and provide expert support as and when
required to its nearby business units to either set up or expand its operations.
The report is hereby concluded assuming that it had tried to touch every
aspect for which the report was prepared.
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34. REFERENCE
1. Mr. Pankaj Neeraj, Senior Manager, Allahabad Bank, Tezpur Branch
2. Allahabad Bank website – www.allahabadbank.in
3. www.allbankingsolutions.com
4. www.en.wikipedia.org/wiki/Allahabad_Bank
5. www.allbankonline.in
6. www.moneycontrol.com
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35. QUESTIONNAIRE
1. What are the different types of commercial loan ?
2. Who is the target group for different types of commercial loan ?
3. What is the income slab for different target groups ?
4. For how many years the proprietor should be engaged in the line of
business for applying commercial loan ?
5. What is the minimum and maximum quantum of loan for different types
of commercial loan and different target groups ?
6. What are the documents to be submitted by the customer to the bank on
the basis of which the bank can give a loan ?
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36. 7. What is the loan amount stated in your bank circular for which an
audit report is required ?
8. What kind of security and mortgage does the bank accept for giving a loan?
9. What is the loan to mortgage ratio ?
10. Who are the guarantor in the following cases :-
i) Individual
ii) Partnership Firm
iii) Co-operative society
iv) Private Ltd Company
v) Public Ltd Company
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37. 11. What is the tenure of repayment of different types of commercial loan?
12. What is the procedure of repayment of the loans ?
13. How much time is required for sanctioning of different types of commercial
loan ?
14. Please state in brief the process of commercial loan disbursing .
15. What is the current rate of interest at which the bank is sanctioning the loans?
16. What is the processing fees ?
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38. 17. Is there any pre-payment penalty ?
18. Does all the branch disburse commercial loan ? If so then what is the
maximum limit of loan a branch can disburse.
19. What steps are taken incase a loan becomes a Non Performing Asset ?
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