Ch 1 Introduction

Introduction of Credit Appraisal

Credit appraisal is

a process of determining the eligibility of a person too giving

various loans adopted by

banks & various financial institutions. A person wants any

type of loan has to go thought various stages of process called credit appraisal.
The eligibility of a person depends on credit worthiness &

it in turns depends on

various factors like income of a person, purpose for taking loan, age, person engaged in
occupation, net worth of person. Eligibility is determined for knowing repayment
capacity of borrower.
Every bank has its own & different criteria to satisfy itself on credit worthiness

or

eligibility of borrower.

Problem Statement:

Credit Appraisal process for different types of loan

From solution of problem bank would know about their strength and parameters that
attract customers and it also could know about problems with their system and things
that can be changed and improved.

Objectives:

To know different eligibility criteria and documents required for different loans.
To compare credit appraisal process of co. op banks against nationalizes banks.
Different yojana presented by the bank for giving advances.

Ch 2 Literature review

Literature review provides available research with respect to the selected topic of the
project or the research findings by an author which has been done with respect to the
research topic. Literature review provides the overall view of the available literature with
respect to the topic of the project.
Definition:
The process of reading, analyzing, evaluating, and summarizing scholarly materials
about specific topic.

1) 7, July 2013
Author: Dr. Ram Jass Yadav
Credit risk simply means the risk of default being made by a customer owing to non
repayment of the credit obtained by him from a bank. Proper evaluation of the
customer measures the financial condition and the ability of the customer to repay loan
in future. Credit appraisal is a process of collecting related information of customers
and projects to undertake risk assessment exercise by the bank prior providing any
4

loans & also checks the technical, economical & financial viability of the project
proposed.

2)5 july 2009

Author: V.M.V.Subba Rao
Research was conducted by Mr, V.M.V.Subba Rao B.Com., FCA, DISA (ICA), and MICA
on Monitoring of Advances -- A New Look. The researcher gave two views on the
commencement of monitoring process-(i)Narrow view- the monitoring starts only after
the advance is disbursed, (ii)Broad view- at the time of conducting credit investigation of
the borrower and continue in all other stages of credit .

3) 19September 2008
Author:Mritunjay Kumar Pandey
Conduct a study on Financial Performance Appraisal of TISCO, the paper of which was
published in Accounting World, September 2008, The ICFAI University Press. The
Objectives of the study was to check the profitability and efficiency of the firm in the
near future, to give brief summery about the ratios which affect the organizations
financial structure and to point out the relationship between ratios and reasons behind it.

4) 3 September 1995
Author: Eleanor Charles
Eleanor Charles in his paper Appraising the Role of the Appraiser Published:
September 3, 1995, talked about the centralized function of the appraiser to grant the
loan and virtually every loan applicant will have to rely on an appraisal to set a value on
the property against which the loan is to be made.

5)25 January 2006

Author S. Kanungo, S.Sharma

The research Paper on Evaluation of decision support systems for credit management
decisions by S. Kanungo, S.Sharma, P.K. Jain from Department of studies, IIT Delhi
have conducted a study to evaluate the efficiency
(DSS)

for

of

decision

support

system

credit management. This study formed a larger initiative to access the

effectiveness of the I.T based credit management process at SBI. Such a study was
necessitated since credit appraisal has become an integral sub-function of the Indian
banks.

6)15 august 2006

Author: Christian
Focused on the changing intensity of three policies that are commonly associated with
financial repression, namely interest rate controls statutory pre-emption and directed
credit as well as the effects these policies had. The main findings are that the degree of
financial repression has steadily increased between 1960 and 1980, and then declined
somewhat before rising to a new peak at the end of the 1980s. Despite the high degree
of financial repression, no statistically significant negative effects on savings, capital
formation and financial development could be established which is contrary to the
predictions of the financial liberalization hypothesis.

7)28 august 2009

Author: Gary
Examined that the 'shadow banking system' at the heart of the current credit crisis is, in
fact, a real banking system and is vulnerable to a banking panic. Indeed, the events
starting in August 2007 are a banking panic. A banking panic is a systemic event
because the banking system cannot honors its obligations and is insolvent. Unlike the
historical banking panics of the 19th and early 20th centuries, the current banking panic
is a whole sale panic, not a retail panic. In the earlier episodes, depositors ran to their

banks and demanded cash in exchange for their checking accounts. Unable to meet
those demands, the banking system became insolvent.

8)9 January 2004

Author: Linbo
Worked with risk and efficiency in big bank of United State. He provides two important
information on the bank efficiency in terms of profit creation related to risk of those
banks. His finding suggests that profitability of a bank is sensitive to credit and solvency
risk but not to liquidity risk or to the investment/ portfolio mix. The relationship between
liquidity risk and loan-to-deposit ratio was examined

9)25 April 2004

Author: Wetmore
From his study it was found that loan-to-deposit ratio has been increased during the
period which facilitated a change in asset/liability management practices. A positive
relation between market risk and them in the process of awarding credit . The policy
sets the rules on who should access credit, when and why one should obtain the
including repayment arrangements and necessary collaterals. The method of
assessment and evaluation of risk of each prospective applicant are part of a credit
control policy.

10)2march 1969
7

Author: Hsiu-Kwang
Observe that sound credit policy would help improve prudential oversight of asset
quality, establish a set of minimum standards, and apply a common language and
methodology (assessment of risk, pricing, documentation, securities, authorization and
ethics) for measurement and reporting of nonperforming assets, loan classification and
provisioning.

11)15 july 1998

Author: Brealy & Myers
Creditworthiness of a customer lies in assessing if that customer is liable to repay the
loan amount in the stipulated time, or not and every bank has their own methodology of
determining whether the borrower is creditworthy or not. It is determined in terms of the
norms and standards set by the banks. Being a very crucial step in the sanctioning of a
loan, the borrower needs to be very careful in planning his financing modes. However,
the borrower alone doesnt have to do all the hard work. Banks need to be cautious to
minimize their risk exposure.

12)28 1992
Author: Bhatt and Ghosh
Stated that the probability of commercial banks depends on several factors some of
them are endogenous and some exogenous. The endogenous factors represent control
of expenditure, expansion of banking business, timely recovery of loan and productivity.
The exogenous factors consist of direct investment, such as SLR (Statutory Liquidity
Ratio), CRR (Cash Reserve Ratio) and direct credit program such as region wise,
guidelines on lending to priority sector. The regulated and restricted regime in the

operation of banking system of investment, credit allocation, branch expansion, interest

rate determination and internal management corded the productivity and profitability.

Ch 3 Industry Overview
9

Introduction
Bank is a financial institution that performs several functions like accepting deposits,
lending loans, agriculture and rural development etc. Bank plays an important role in the
economic development of the country.
It is necessary to encourage people to deposit their surplus funds with the banks. These
funds are used -for providing loans to the industries thereby making productive
investments.
A bank is a financial intermediary that accepts deposits and channels those deposits
into lending activities. They are the active players in financial market. The essential role
of a bank is to connect those who have capital with those who seek capital. After the
post economic liberalization and globalization, there has been a significant impact on
the banking industry.
Banking in India originated in the 18th century. The oldest bank in existence in India is
the State Bank of India, a government-owned bank in 1806. SBI is the largest
commercial bank in the country.
10

After the independence, Reserve Bank of India was nationalized and given .wide
powers. Currently, India has 96 Scheduled Commercial Banks, 27 public sector banks,
31 private banks and 38 foreign banks.
Today, banks have diversified their activities and are getting into new products and
services that include opportunities in credit cards, consumer finance, wealth
management, life and general insurance, investment banking, mutual funds, pension
fund regulation, stock broking services, etc.
Further, most of the leading Indian banks are going global, setting up offices in foreign
countries, by themselves or through their subsidiaries.

Market Size
The Indian banking sector is fragmented, with 46 commercial banks jostling for business
with dozens of foreign banks as well as rural and co-operative lenders. State banks
control 80 percent of the market, leaving relatively small shares for private rivals.
At the end of February, 13.7 crore accounts had been opened under Pradhanmantri Jan
Dhan Yojna (PMJDY) and 12.2 crore RuPay debit cards were issued. These new
accounts have mobilised deposits of Rs 12,694 crore (US$ 2.01 billion).Standard &
Poors estimates that credit growth in Indias banking sector would improve to 12-13 per
cent in FY16 from less than 10% in the second half of CY14.

7 Essentials of a Sound Banking

1. Liquidity:
One of the essentials of a sound banking system is to have a higher degree of liquidity.
The bank holds a small proportion of its assets in cash. Therefore, its other assets must
possess the criterion of liquidity so that they may be turned into such easily. A
commercial bank is under an obligation to pay its depositors cash on demand. This is
only possible if the bank possesses such securities which can be easily liquidated
2. Safety:
11

Another essential of a sound banking system is that it must be safe. Since the bank
keeps the deposits of the people, it must ensure the safety of their money. So it should
make safe loans and investments and avoid unnecessary risks.
3. Stability:
A sound banking system must be stable. It should operate rationally. There should
neither be undue contraction nor expansion of credit. If the bank restricts the creation of
credit when trade and industry need it the most, it will harm the interests of the business
community.

4. Elasticity:
But the stability of banking operations should not be interpreted as rigidity. Rather, the
banking system should have sufficient elasticity in its lending operations. It should be in
a position to expand and contract the supply of loanable funds with ease in accordance
with the directives of the central bank of the country.
5. Profitability:
A sound banking system should be able to earn sufficient profits. Profits are essential
for it to be viable. It has to pay the corporation tax like any other company, pay interest
to its depositors, dividend to shareholders, salaries to the staff and meet other
expenses.
6. Reserve Management:
Sound banking system must follow the principle of efficient reserve management. A
bank keeps some amount of money in reserve for meeting the demand of its customers
in case of emergency.
7. Expansion:
A sound banking system must be spread throughout the country. It should not be
concentrated only in big towns and cities.

12

Ch 4 Company Overview
13

Introduction of Kalupur commercial co-op Bank

The bank had a very humble, but very inspiring beginning on 5th December 1970. The
Bank is a professionally managed Financial Institution a benchmark of transparency,
credibility and innovation.
The Bank is founded by Late Shri Baldevbhai Dosabhai Patel, Late Shri Gopaldas
Shivlal Patel and Shri Arvindbhai Jivanlal Saheba. The Bank has nurtured its traditional
values in business practices and in serving the small businessmen. These were the
people with deep and abiding ideas, faith, vision, optimism and entrepreneurial skills
with commendable sense of service and duty. The dynamism infused by the Board of
Directors, affectionate loyalties of clients and devotion of staff members has created the
sound foundation of The Kalupur Commercial Co-operative Bank Ltd and has emerged
as one of the leading Multi Sate Scheduled Co-operative Bank in the country. The Bank
has adopted new technologies and advanced Banking tools to add value to its services.

14

The Kalupur Bank has earned a name in co-operative Banking sector due to its rich
heritage,

integrity

and

adherence

to

prudent

banking

practices,

technology

advancement customized products and services.

The Kalupur Bank believes that Customer Delight is the ultimate goal and has a strong
belief that customers and all shareholders, wholehearted support, absolute faith and
their patronage coupled with hard work of the staff members has been largely
responsible for its noteworthy and appreciable growth.
The Kalupur Bank is committed to provide banking services with speed, comfort and
convenience. The Kalupur Bank has a visionary growth plan focusing all business
strategies.
It has 43 branches of which 33 are situated in Banks own premises. These branches
are spread over Ahmadabad, Sanand, Bareja, Bavla, Anand, Khambhat, Vadodara,
Surat, Gandhinagar and Mumbai.

Mission:
Kalupur Bank will provide to its customers, premier banking services through technology
up gradation.

Vision:
Kalupur Bank will strive to emerge as the most preferred co-operative Bank by 2020.
It is said "Vision Statement is not a prediction of what will happen in the future, it is also
not a wish list of desirable but unattainable goals. It is neither the statistical information

15

nor the mathematical calculation. It helps to provide a direction for the course to be
followed and the aims to be achieved in the future.

16

Ch 5
Research methodology

17

1 Introduction:
Research Methodology is a way to systematically analysis the research subject and it
may be understood as a science of study how research at done scientifically. Research
is common parlance refer to a research for knowledge.
Research Methodology is a way to systematically solve the problem. It may be
understood as a science of studying how research is done scientifically.

2. Project Title
Credit appraisal of kalupur commercial co op bank

3 Data Collection:
Primary Sources
Informal discussion with the branch manager & other staff members of the
Bank.
Survey of the customers by Questionnaire

Secondary Sources

Books
Magazines
Journals
Policies
Annual report of the bank
Audit report of the bank

4) Objective of study:
18

To study the credit appraisal system of kalupur commercial co.op bank.

To understand the credit appraisal procedure followed to grant loan of bank.
To examine the disbursement of loan by people to bank
To explore the causes for default in returning the loan by people to bank.
To assess the total amount lend by the bank for few years and assist the bank in
improving their financial performance.

5) Scope of the study:

The study aim at forecasting its future position in few aspects such as
disbursement, reimbursement and NPA of loan.
To study also aims to identify the various reasons for delay in repayment ane
non-payment of loan by people to bank.
The study aims at analyzing the overall profitability.

6) Research Design:
In this report, Descriptive research design is to be used because it described

the

phenomenon under study and recommendation or findings were specific under this
study. It is also describing the issue to formulate a problem, provide alternative
approaches to a problem and provide options for further research .

7) Sample Size
8) Sample unit: consumer of different age, gender and occupation.
9) Sample area: Ahmadabad
10) Statistical Tools & Techniques
One sample t-test

Conceptual framework

19

A credit appraisal is an important part of determining the eligibility for a loan, and the
quantum of the loan. A prospective borrower has to go through the various stages of the
credit appraisal process of the bank. Each bank has its own criteria to satisfy itself on
the credit worthiness of the borrower.
The eligibility for the loan that a person can get depends on his credit worthiness,
determined in terms of the norms and standards of the bank. Being a crucial step in the
loan process, a borrower needs to be careful in planning his financing modes. The
credit worthiness, basically, assures the repayment capacity of the borrower - whether
the borrower is capable of repaying the loan and dues on time.

Broadly, the information collected is on these aspects:

- Incomes of the applicant and co-applicant
- Age of applicants
- Qualifications
- Family details
- Nature of profession
- Experience
- Employer
- Security of tenure
- Tax history
- Assets owned and their financing patterns
- Additional sources of income
- Past loan record, if any

20

- Recurring liabilities
- Investments
- Other present and expected liabilities
The norms differ from bank to bank. Each has certain norms within which a prospective
borrower needs to fit to be eligible for the loan. Based on these parameters, the
maximum amount eligible is worked out.

CREDIT APPRAISAL
21

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Types of loan
22

Doctor Mitra
In recognition of services provided by Doctors community to the society, Bank considers
it necessary to extend credit facilities at reasonable
Interest rates and on other easy terms .Bank has devised a scheme Doctor
Mitra Yojna to extend credit facilities to them ,the details of which are as under .

Purpose

Guarantee

For construction of Hospital / Clinic, For purchase of Instruments /

Equipments, Furniture & Working Capital Requirement
Term Loan Rs. 1000.00 Lacs (Maximum)
Secured Cash Credit for working capital Rs. 25.00 Lacs (Maximum)
11.00% (Subject to Terms & Consitions)
11.50% (Not eligible for Credit Rating)
Guarantor possessing the own property & also the Income Tax payer.

Security

Mortgage & Hypothecation of Assets financed

Loan / Limit
Rate of
interest

23

Kal Housing Loan

Own house is a dream of everyone. We convert the dream to reality and make you
proud owner of your own house. We provide finance up to Rs.70.00 lacs at reasonable
interest rate .Drop in at any of our branches and go back with a smiling face.
Purpose

(i) For construction of Bunglow/Tenaments

Loan

(ii) For purchase of ready build flat/Tenament/Raw house

Max 70.00 Lacs or 85% of sale deed whichever is lower.

Amount
Margin

15% of sale deed ( 25% in case of House under construction )

Repayment

20 years

Period
Rate of

10.25% p.a. ( 10.00% p.a. in case of woman beneficiary)

interest
Guarantee

1) Age above 35 years with regular, steady and proven record of income
for last five years.
2) In case of professionally qualified persons with age above 30 years
with minimum income of Rs 50,000/ p.m.

24

Vehicle Loan
Gujarat has become automobile hub of India. Car manufacturing units are coming to
Gujarat one by one. Car Finance has become a lucrative business of banks. We are not
lagging behind. Drop in art of our branches and avail car loan on easy terms. Wish you
happy riding.
Purpose

For Purchase of new car

Loan Amount

For Commercial vehicles

80% of Quotation of vehicles (Basic price + insurance + R.T.O. charges)

Margin

20% of quotation of vehicles

Repayment Perio
d
Rate of interest

Max 84 months

Guarantee

For personal use :

Upto 36 months 10.00% p.a.
Upto 60 months 10.50% p.a.
Upto 84 months 10.75% p.a.
For commercial use :
13.50% p.a. at monthly rest ( Not eligible for Credit rating)
Two guarantor Possessing property and also Income tax-payer

Security

Hypothecation of Vehicles

25

Vyapar Mitra
Small traders and businessmen provide yeoman service to the community. They are
honest and hard working and not so educated community with low financial means who
need to be supported by banks.
Bank has recognized their potential. They are trusted and trustworthy people .
.

Purpose

Limit
Amount
Margin

Small traders/ businessmen

Maximum cash credit of Rs.30 lacs or 60% of valuation of Property or 30%of
projected sales looking to last two year growth whichever lower
40% of valuation of mortgage property

Repayment
Period

Renew of limit every year

Rate of
interest

13.5% P.A at monthly rest (Subject to change at the discretion of Bank) (not
eligible for credit rating rebate)

26

Guarantee

Guarantor possessing own property and also Income tax-payer

Security

Mortgage of office/Resident immovable property

Education Loan
Higher education is becoming costlier day by day. The middle class families are the
worst suffers. It is a social responsibility of every bank to extend finance for higher
education on easy terms. Ours is the bank which extends education loan on lowest
interest rate in India.

Purpose

Higher Education course approved by AICTE,and Govt.,approved

Eligible Course

university/college
For Approved Graduation, Post graduation,P.hd. ,Research courses in

Loan Amount

Engineering ,Pharmacy,Medical ,Management ,Computer

(i) For study in India - Maximumof Rs.10.00 lacs

Repayment

(ii) For study in foreign Maximum of Rs.20.00 lacs

Maximum 84 months (Including moratorium period up to course period)

Period

27

Rate of interest

10.00% P.A (Subject to change at the discretion of Bank) Interest at

Guarantee

monthly rest ( not eligible for credit rating base rebate )

Two guarantor possessing property and also Income tax-payer

Security

(i) Up to Rs.50000/- Nil

(ii)Above Rs.50000/- Mortgage of Immovable property or lien/assignment
of Govt. securities

Process of Loan:
A Person will be undergoing the following process for obtaining the loan.

A p lic a t io P r o c e s in In v e s t ig a t io S a n c t io n - in g D o c u m e A c e p t a n t a n c D is b u r s e m e n
n F o r m g F e s n C h e c k o f L o a n n t a t io n e o f L o a n t o f L o a n

Below is the step by step procedure for getting the loan sanctioned and
disbursed.
1. Application Form:

It is the first document which loan provider will be using as a base for sanctioning
the loan.
It includes,
Personal Information
28

Contact Details
Property Details
Total ( various ) Costs involved in buying property
Loan Amount required
Income Details
Tenure Required
Details of Guarantors

If any Company than additional details like,

Details of Company (Name, Incorporation date, address etc.)
Details of Director / Proprietor of Company
Details of Sales tax and Income tax
Financial details of company ( capital , Assets & Liabilities , last 6
months stock statement)
Technical details

2. Processing Fees:
It is necessary to deposit processing fee along with filed
application form and documents. This processing fees varies from loan provider
to loan provider. It is necessary to check with loan provider that up to when the
processing fee is valid.
3. Investigation check:
After applying for the loan many people are even not eligible for it. In order to
check this, the loan providers check them personally. It can be weekly, fortnightly
or monthly.
4. Sanctioning of loan:
Branch manager has power to sanction the loan up to Rs. 20,00,000/- (except
Education Loan). Loan sanction below Rs.5.00 lacs are not send for Post sanction
scrutiny to HO , but above Rs.5.00 lac are send to HO for Post Sanction Scrutiny.
After receiving PSS done file from HO, (if any query comes than firstly solve that)

29

then file is send to Advocate for preparing mortgage documents. After completion
of mortgage, the loan is disbursed to the applicant.
After the above few steps the loan provider will give applicant the loan
sanctioning letter. It has the details of the amount of loan sanctioned by loan
provider. Final loan amount sanctioned and loan eligibility are two different
things.
Following things need to be there in Sanction letter:
Loan sanctioned amount
Interest rates ( fixed or floating and related to which reference rate e.g.

base rate)
Tenure of loan
EMI amount and mode of payment
Conditions
Validity of the loan
Any other terms and conditions

5. Documents:
It includes,
KYC ( Pan card, Election ID /Passport/Licence , Address proof)
Photographs
Income tax Returns ( last 2 years)
Mortgaged property papers ( 7/12 no utaro , Sale deed etc )
Bank statement ( last 6 months)
In case of company additional documents like,
Incorporation Certificate
GPCB Permission
GIDC Allotment letter
CMA reprt ( more than Rs.1 crore )
Financial details
2 [R] Permission
Sales tax Certificate

30

6. Acceptance of sanction letter:

If agreed to all the conditions of the loan it is to be accepted by returning the
Sanction letter along with the sign of the applicant. Loan provider will sanction loan
by seeing credit worthiness/ability to repay, but will disburse the loan by seeing
applicants property and its appropriate papers like as per their income tax returns.

7. Disbursement of loan:
Disbursement of loan is the last but important step of loan procedure. For disbursing
the loan Applicant has to submit all the property papers. Payment receipts in original
to loan provider which will be kept as security for loan amount given to you. Loan
provider will do the following with the papers:

1) Legal check
2) Technical check
These inspections are carried out to protect consumer interests in terms of
Authenticity of the legal documents, construction quality, adherence to local
laws, approved building plans, etc.
A technical inspection also lets the loan provider understand the progress of
construction so as to release the staggered disbursements.

31

Ch 6
Data Analysis And
Interpretation

32

Age

Frequency
Valid

Percent

Valid

Cumulative

Percent

Percent

25-35

25

22.7

22.7

22.7

36-45

49

44.5

44.5

67.3

46-55

36

32.7

32.7

100.0

Total

110

100.0

100.0

Interpretation:
It can be interpreted from the above chart that 22.7% of the total respondents belonged
to the age group of between 25-35 years. 44.5 % were between 36 to 45 years of age,
only 32.7% were between 46-55 years of age. it is clearly that more % respondent in
age between 36-45.

33

Gender
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

male

63

57.3

57.3

57.3

female

47

42.7

42.7

100.0

110

100.0

100.0

Total

Interpretation:
57.3% of the total respondents were males, while only 42.7% of the respondents were
found to be females.

34

Education
Cumulative
Frequency
Valid

HSC
Graduation
post graduation
Total

Percent

Valid Percent

Percent

14

12.7

12.7

12.7

75

68.2

68.2

80.9

21

19.1

19.1

100.0

110

100.0

100.0

Interpretation:
Its clear from the chart that 68.2% of the total respondents were Graduates and 19.1%
were Post-Graduates. While only 12.7% of the respondents were non-graduates.

35

Occupation
Cumulative
Frequency

Valid

Percent

Valid Percent

Percent

Business

32

29.1

29.1

29.1

Services

58

52.7

52.7

81.8

Student

12

10.9

10.9

92.7

Retired

7.3

7.3

100.0

110

100.0

100.0

Total

Interpretation:
In above chart 29.1% respondents were occupation of business.52% of respondents
were occupation of services.10.9% respondent were student. and few remaining 7.3%
were retired.

1)

36

annul income
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

below 5,00,000

33

30.0

30.0

30.0

5,00,000-10,00,000

60

54.5

54.5

84.5

10,00,000-15,00,000

17

15.5

15.5

100.0

110

100.0

100.0

Total

Interpretation:
Of the total, respondents having income group of less than 5 lakhs were

30%.

Respondents having income group of 5 lakhs to below 10 lakhs were 54.5%. 15.5%
respondents belonged to income group of 10 lakhs to below 115 lakhs.

2)
37

awareness about product and services

Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

Yes

66

60.0

60.0

60.0

NO

44

40.0

40.0

100.0

110

100.0

100.0

Total

Interpretation:
It is 60% respondent were aware about product and services. And 40 % respondents
were not aware about product and services.

38

3)

type of account
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

current account

23

20.9

20.9

20.9

saving account

49

44.5

44.5

65.5

4.5

4.5

70.0

33

30.0

30.0

100.0

110

100.0

100.0

Recurring account
fixed deposit
Total

Interpretation:
It is in above chart 20.9% respondent have current account.44.5% respondent have
saving account. 4.5% respondents have recurring account. 30% respondent have fixed
deposit account

39

4)
time period of account
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

less than 1year

34

30.9

30.9

30.9

1 to 5 years

54

49.1

49.1

80.0

5 to 10 years

22

20.0

20.0

100.0

110

100.0

100.0

Total

Interpretation:
It is in above chart 30.9%respodent have account in bank lee than 1 year.49.1%
respondent have account in bank between period of 1 to 5 years. 20% respondents
have account in bank between periods of 5 to 10 years.

5)

40

Step 1: Ho: Mean score is greater than 3 Influence to open account in KCCB

Ha: Mean score is less than 3 Dont influence to open account in KCCB
Step 2: To prove this hypothesis, one sample t test will be used
Step 3: = 0.05
Step 4 : Iftcal is less then t tab, and then reject null
Step 5
One-Sample Statistics
N

Mean

Std. Deviation

Std. Error Mean

Advertising

110

3.8818

1.40596

.13405

Brand image

110

3.5273

.97406

.09287

Goodwill

110

3.1000

.96688

.09219

Employee

110

3.1273

1.24965

.11915

Friends

110

2.9545

1.32295

.12614

Co worker

110

3.0545

1.31216

.12511

Employer

110

2.6455

1.27493

.12156

Step - 6
One-Sample Test
Test Value = 3
95% Confidence Interval of the
Difference

Mean
T

df

Sig. (2-tailed)

Difference

Lower

Upper

Conclusion

Advertising

6.578

109

.000

.88182

.6161

1.1475

fail to reject null

Brand image

5.677

109

.000

.52727

.3432

.7113

fail to reject null

Goodwill

1.085

109

.280

.10000

-.0827

.2827

fail to reject null

Employee

1.068

109

.288

.12727

-.1089

.3634

fail to reject null

Friends

-.360

109

.719

-.04545

-.2955

.2045

Reject null

.436

109

.664

.05455

-.1934

.3025

fail to reject null

-2.917

109

.004

-.35455

-.5955

-.1136

Co worker
Employer

Reject null

6
41

from which bank you preferred loan

Cumulative
Frequency
Valid

PUBLIC SECTOR BANK

Percent

Valid Percent

Percent

4.5

4.5

4.5

Private sector bank

11

10.0

10.0

14.5

Scheduled bank

17

15.5

15.5

30.0

co-operative

77

70.0

70.0

100.0

110

100.0

100.0

Total

Interpretation:
In above chart 4.5% respondent prefer loan from public sector bank.10% respondent
prefer loan from private sector bank.15% respondents prefer loan from scheduled
bank.70% respondent prefer loan from co-operative bank.

7)

42

Step 1: Ho: Mean score is greater than 3 Factors affect decision about loan
Ha: Mean score is less than 3 Factors dont affect decision about loan
Step 2: To prove this hypothesis, one sample t test will be used
Step 3: = 0.05
Step 4: If tcal is less than ttab, then reject null
Step 5:

One-Sample Statistics
N
Interest rate

Mean

Std. Deviation

Std. Error Mean

110

4.4909

1.08995

.10392

110

3.2909

.45626

.04350

Charges

110

3.0909

.94379

.08999

Time taken

110

3.2636

1.18614

.11309

Staff member

110

3.1091

1.27319

.12139

Transparency

110

3.2273

.87429

.08336

110

3.0273

1.24487

.11869

110

3.5091

1.43191

.13653

Documentation process

Resolution of query
Pre payment charges

Step - 6

43

One-Sample Test
Test Value = 3
95% Confidence Interval of the
Mean
t
Interest rate

df

Sig. (2-tailed)

Difference

Difference
Lower

Upper

Conclusion

14.346

109

.000

1.49091

1.2849

1.6969

6.687

109

.000

.29091

.2047

.3771

Charges

1.010

109

.315

.09091

-.0874

.2693

Fail to reject

Time taken

2.331

109

.022

.26364

.0395

.4878

Fail to reject

Staff member

.899

109

.371

.10909

-.1315

.3497

Fail to reject

Transparency

2.726

109

.007

.22727

.0621

.3925

Fail to reject

.230

109

.819

.02727

-.2080

.2625

3.729

109

.000

.50909

.2385

.7797

Documentation
process

Resolution of
query
Pre payment
charges

Fail to reject
Fail to reject

Fail to reject
Fail to reject

8)
44

type of loan
Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

Vehicle loan

28

25.5

25.5

25.5

Housing loan

31

28.2

28.2

53.6

Education loan

29

26.4

26.4

80.0

Bussiness loan

22

20.0

20.0

100.0

110

100.0

100.0

Total

Interpretation:
In above chart 25.5% respondent have vehicle loan. 28.2% respondent have housing
loan.26.4% respondent have education loan.20% respondent have business loan.

45

9)
Step 1: Ho: Mean score is greater than 3 Satisfied with the factors
Ha: Mean score is less than 3 Not satisfied with the factors
Step 2: To prove this hypothesis, one sample t test will be used
Step 3: = 0.05
Step 4: If tcal is less than ttab, then reject null
Step 5:

One-Sample Statistics
N
Interest rate

Mean

Std. Deviation

Std. Error Mean

110

3.9364

1.32220

.12607

110

3.2727

1.06581

.10162

Charges

110

2.5909

.81607

.07781

Time taken

110

3.6091

1.21229

.11559

Staff member

110

2.8091

1.13732

.10844

110

3.1727

1.08246

.10321

110

3.0818

1.32119

.12597

110

3.0818

1.37562

.13116

Documentation
process

Transparency

Resolution of
query
Pre payment
charges

46

Step - 6
One-Sample Test
Test Value = 3
95% Confidence Interval of the
Difference

Mean
t
Interest rate

df

Sig. (2-tailed)

Difference

Lower

Upper

Conclusion
Fail to reject

7.428

109

.000

.93636

.6865

1.1862

process

2.684

109

.008

.27273

.0713

.4741

Charges

-5.258

109

.000

-.40909

-.5633

-.2549

Fail to reject

5.270

109

.000

.60909

.3800

.8382

Fail to reject

Staff member

-1.761

109

.081

-.19091

-.4058

.0240

Reject null

Transparency

1.674

109

.097

.17273

-.0318

.3773

Fail to reject

.650

109

.517

.08182

-.1679

.3315

.624

109

.534

.08182

-.1781

.3418

Documentation

Time taken

Fail to reject

Resolution of
query

Fail to reject

Pre payment
charges

Fail to reject

10)

47

secured and unsecured loan

Cumulative
Frequency
Valid

YES

110

Percent
100.0

Valid Percent

Percent

100.0

100.0

Interpretation:

In above chart100% respondent have secure loan as per survey.

11)
Step 1: Ho: Mean score is greater than 3 ask for secure the loan
48

Ha: Mean score is less than 3 not ask for secure the loan
Step 2: To prove this hypothesis, one sample t test will be used
Step 3: = 0.05
Step 4: If tcal is less than ttab, then reject null
Step 5:
One-Sample Statistics
N
Mortgage
Hypothecation
Personal
guarantee

Mean

Std. Deviation

Std. Error Mean

110

3.8000

.94626

.09022

110

3.7273

1.06581

.10162

110

3.1273

1.21993

.11632

Step-6
One-Sample Test
Test Value = 3
95% Confidence Interval of the
Difference

Mean
t
Mortgage
Hypothecation
Personal
guarantee

df

Sig. (2-tailed)

Difference

Lower

Upper

8.867

109

.000

.80000

.6212

.9788

7.157

109

.000

.72727

.5259

.9287

1.094

109

.276

.12727

-.1033

.3578

Conclusion
Fai to reject
Fai to reject
Fai to reject

12)

49

bank use other means to recover loan

Cumulative
Frequency
Valid

Percent

Valid Percent

Percent

YES

72

65.5

65.5

65.5

NO

38

34.5

34.5

100.0

110

100.0

100.0

Total

Interpretation:
In above chart 65.5% respondent believe in when loan are not repaid bank use other
means to recover loan. 34.5% respondent not believes in bank use other mean when
loan are not repaid.

50

Ch 7 Finding & Suggestions

51

Finding
During my internship, I found that mostly all customers prefer less paper work.
Customers prefer less installment amount.
I found from my survey that 60%of respondent were aware about product and
services provided by bank.
From the t- test calculation it was found that friends and employer do not

influence respondent to open account in bank.

I survey that most of the people preferred to avail loan from co-operatives bank.
All factors consider in the survey affect decision about loan.
From the t-test it is found that respondents not satisfied with staff member.
According to the survey bank offered secure loan.

Suggestion
52

The process of loan should be easy to be understood by customers.

Create problem solving program for the customers
Give special offer related to loan or F.D. to increase customers.
Customers also expects from bank unsecured loan. So it should also provide

unsecured loan to customer.

The bank should improve the facilities as compare to other private bank.
Implement some special scheme to improve customers
Bank must want to increase the period of payment of loan.
Encourage the customers about new services of bank.
Bank should take steps immediately to solve customers problem.
Customers are must be aware about the financial programs which are done in

the bank.
Bank must be providing the facilities as much as possible.
If the customer is not able to pay loan than bank should give some little time to
pay loan.

Learning
Every

graduate wants go-getters. Given that internships are usually not

required in college, such experience will prove that you are proactive about
career development.
53

 Internships help you learn more about youself. Through an internship, I gain
clarity on your strengths, weaknesses, and interests. Equally important, I can
also learn what I dont enjoy doing.
Internships increase my professional confidence. By interning, I can confront
and overcome the fear of the unknown that I may have about what its like to
work in a professional environment
. Internships improve my communication skills. . By interacting with others in a
professional environment during an internship, you will have many opportunities
to become a better communicator
Internships help me prove our self in the real-world. Academic success
matters, but achievement in the real-world is even more important when i am
looking for full-time work.
In summary, internship experience makes me a better job candidate, helps me decide
what type of job/career i want to pursue.

Beneficiaries of Report

To The Bank:
54

Credit appraisal system is very much necessary for the profitability and growth of the
bank. This project report will help the bank to know the factors that affect customer
influence toward take loan, so that it can improve on those factors and satisfy the
customer needs. which will be ultimately beneficial for the development of the bank.

To The Researchers:
Researchers can use this project report to explore their study on credit appraisal. They
can study this report in order to get information regarding the topic which might prove to
be beneficial for his / her further study.

To The Students:
Conducting this type of project works has become a part of the academic field. Students
are allotted projects as a part of their academics. This project report will be helpful to the
students conducting such surveys on credit appraisal or related topics. They can use
this report for studying various aspects of credit appraisal or related topics and
successfully complete the project work.

Limitation

Our sample size was of 100 people, the information given by fewer
Respondent may not give actual fact.

55

 The sample that was collected is only from Ahmadabad and in particular area
only as K.C.C.B has too many branches.
The data collected and analyzed is based on the replies of the borrowers
selected. Any biased information provided may alter the result of the study.
Due to less time of internship programmed, we have analyzed less market

conditions.
Some of the customers are less educated, so they cant give proper

response.
Customers feel boring to give proper response

Conclusion

The Kalupur Commercial co-op .bank ltd is one of the biggest multistate
scheduled banks.
The experience to work with this organization was tremendous.

56

 Working with such a growing company which has great vision and potential in
future gave me an edge over my theoretical management knowledge as well
as practical knowledge.
By doing the project, we came in to the contact with different customers who
have also guided us and gave us tremendous knowledge and practical
exposure.
The staff of kalupur Co-op bank is amazing staff. Because they are very
friendly with the customers, so if customers are facing any kind of problem
related to bank or finance than the staffs members are also help them.
They also learn me about banking services. They maintain very good relation
with each other and with the customers.
Staff members are very excited to help customers. And they are trying to give
quick service and problem solving.

Bibliography
(1) Kalupur Co-op Bank annual report- 2012-2013 and 2013-2014
(2) Measurement scales chapter no. 13.
Book: Business research methodology
Donald R. Cooper & Pamela S. Schindlar
57

(3) International Journal of Scientific and Research Publications, Volume 3,

February 2013, Dr.T.Vasanthi , D.Gowri

Web sites:
http://www.asklaila.com/listing/kalupur/Mandvi+Chowk/kaluput+People+CoOperative+Bank+Limited/x1DOTGJm/
http://iosrjournals.org/iosr-jbm/papers/Vol16-issue1/Version-2/C016121724.pdf
http://www.ijsrp.org/research-paper-0213/ijsrp-p14135.pdf

www.rbi.in

www.idealizenow.com

Annexure
QUESTIONNAIRE
The Study on Credit Appraisal of Kalupur commercial Co Operative Bank
Respected Sir/Madam,
I, Panchal Tejal, am a student of MBA sem-2(LDRP-ITR Gandhinagar). I am conducting
a survey on Kalupur Commercial Co- operative bank. I request the Respondents to
provide their valuable views on the same by answering to this Questionnaire .The
58

information provided by you will be used solely for Academic purpose.

I shall be thankful for your kind support in my Research Work.
Name: ___________________________________________________________
Age:

1) below 25
4) 46-55

Gender:

1) Male

Education: 1) SSC

2)25-35

3)36-45

5) above 56

2) Female
2) HSC

.
3) Graduation

.
4) Post graduation
Occupation: 1) business

2) Services

3) Student

.
4) Retired

5) professional

1) What is your Annul income?

1) Below 5, 00,000

3)1000000-1500000

2) 500000-1000000

4) above 1500000

2) Are you aware about the products & services provided by the K.C.C.B?

59

1) Yes

2) No

3) Which type of account you have in K.C.C.B?

(1) Current account

(2) Saving account

(3) Recurring account

(4) Fixed deposit

4] Since how long you have an account in K.C.C.B?

(1) Less than 1 year

(2) 1 to 5 years

(3) 5 to 10 years

(4) More than 10 years

5) Who have influenced you to open account in K.C.C.B bank?

1) Not at all influence
(1)

2) Not influence 3) Neutral 4) Influence 5) highly influence

(2)

(3)

(4)

(5)

Advertisin
g
Brand
image
goodwill
of bank
Employee
of bank
friends
Co-worker
Employer

6) Which bank would you prefer to avail the loan from?

1) Public sector banks

2) Private sector banks

60

3) Scheduled banks

4) co operative

7) Have you taken the loan from K.C.C.B.?

1) Yes
Why no, then tick the following
Highly

2) No

Disagr Neutral

disagree

ee

(1)

(2)

(3)

Satisfied

Highly

(4)

agree
(5)

Interest rate
Documentatio
n process
charges
Time
taken
for loan
Staff member
loan
Transparency
Resolution of
query
Pre payment
charges

8) If Yes then, which type of loan have you taken?

1) Vehicle loan

2) Housing Loan

3) Education Loan

4) business Loan

9) How much you are satisfied for the following parameter.

1) Highly dissatisfied 2) dissatisfied 3) Neutral 4) satisfied 5) highly satisfied
(1)

(2)

(3)

(4)

(5)

Interest rate
Documentatio
n process
61

charges
Time
taken

for loan
Staff member
loan
Transparency
Resolution of
query
Pre payment
charges
10) Bank has offered both secured and unsecured loan.
1) Yes

2) No

11) The following collaterals are often asked for to secure the loan
1) Highly dissatisfied 2) dissatisfied 3) neutral 4) satisfied 5) highly satisfied
(1)

(2)

(3)

(4)

(5)

Mortgage
hypothecatio
n
Personal
guarantee
12) When loan are not repaid, banks often use the other means to recover the loan?
1) Yes

2)

62

63