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Punjabi University Patiala Naina

MBA 4th Sem

Roll No:-813


I, Naina, having Roll no. 813 of MBA of Ropar IMT Shekhupur, hereby declare that the
original work and the same has not been submitted to any other institute for award of any other

The feasible suggestions have been duly incorporated in consultation with the guide.


Success is not a description but a journey. While I reach towards the end of this journey , I
realized I may not have come this far without the guidance, help and support of people who acted
as guides, friends and torch bearers along the way.

I take this opportunity to thank Prof. Harpreet Kaur without their cooperation I would not have
been able to complete this project.

(i) Declaration

(ii) Certificate

(iii) Acknowledgement

Chapter No. Topic Page no.


2. TYPES OF LOAN 15-20





7 FINDINGS 38-39




ANEXXURE (i) Bibliography 46-49

(ii) References

(ii) Questionnaire

The origin of banking in India can be traced back to almost the Vedic period. The transformation

from pure money lending to proper banking appears to have taken place before the times of

Manu, a great Hindu jurist , has devoted a section of his work explaining deposits and advances

and he even laid down certain rules on rates of interest.

Throughout Maurya period and latter on indigenous bankers played some role in the economy of

the country. However, it was during the Mughal period that indigenous bankers started playing a

vital role in lending money and financing of the foreign trade and commerce.


 The first joint stock bank, namely The General Bank of India was established in 1786.

 Later on Bank of Hindustan and Bengal Bank also came into existence. Bank of Hindustan

carried on the business till 1906.

 East India Company established the following three banks, namely The Bank of Bengal in 1809,

The Bank of Bombay in 1840, and Bank of Madras in 1843. They were collectively called

Presidency Banks and were well functioning independent units.

 The three banks established by the East India Company were amalgamated in 1920 and a new

bank called Imperial Bank of India was established.


The bank has an important role for the development of Indian economy. The growth of output
in any economy depends on the increase in the proportion of saving/ investment to a nation’s
output of goods and services. The financial institutions help in the diversion of rising current
income into saving/ investments.

A financial system may be defined as a set of institutions, instruments and markets which
foster saving and channels them to their most efficient use. The system consists of individuals
(savers), intermediaries, markets user of saving. Economic activity and growth are greatly
in term of efficiency of the market in mobilizing saving and allocating them among
competing users.

Well developed financial markets are required for creating a balanced financial institution
play more important role. Deep and liquid markets provide liquidity to meet any surge in
demand for liquidity in the times of financial crisis. Such types of markets are also necessary to
derive appropriate reference for pricing financial assets.

The Punjab State Co-operative Agricultural Development Bank Limited, which was previously
known as The Punjab State Co-operative Land Mortgage Bank Ltd., was registered on
26.02.1958, under the Cooperative Societies Act basically with the object to grant long term
loans to the owners of land or other immovable property so as to enable them to discharge their
debts, to carry out Agricultural improvements, to acquire land for the formation of economic
holdings and other purposes, thereby to promote thrift and self help among them.
Working AreaAt the initial stage, the Bank had started functioning through the Central
Cooperative Banks, by appointing them as its Agents. The Agency system was discontinued in
the year 1962 when 14 Primary Cooperative Land Mortgage Banks, now known as Primary
Cooperative Agricultural Development Banks came into existence and were affiliated to the
then-The Punjab State Co-operative Agricultural Development Bank, for the purpose of
advancing long term loans to the farmers in the State.
The long term structure in the Punjab State, as such, is a Federal Structure with Punjab State
Cooperative Agricultural Development Bank (in short, SADB) as an Apex Institution with
Primary Cooperative Agricultural Development Banks as its members (in short, PADB). At
present, the number of the Primary Cooperative Agricultural Development Banks in the State is
89, besides two other members i.e. Punjab State Electricity Board and Punjab State Tubewell
Corporation. Each PADB, while seeking membership to the SADB is required to purchase
atleast, one share of the value of Rs. 1000/- and pay Rs. 1000/- as Admission Fee.
The Management of the Bank is vested in its Board of Directors, which is constituted, as per
provision of Bye-law No.29 of the Bye-laws of the Bank which states:-

The Board is constituted in the following manner:-

i) A nominee of the State Cooperative Bank;

ii) One representative of NABARD to be nominated by NABARD.
iii) Not more than three officials to be nominated by the State Government as long as the
Government is a share holder;
iv) Registrar of Cooperative Societies or his nominee;
v) One Director from every zone of 5 contiguous member PADBs/Institutions shall be elected
provided if the number of PADBs/Institution is not divisible by 5 the left out member,
PADBs/Institutions shall be included in the adjoining zone in such a way that no zone has more
than 6 member PADBs/Institutions. However, if the number of left out members is more than 2,
a separate zone may be formed. The present Board of Directors has been constituted on
14.07.2016 and the Chairman was elected on 20.07.2016.

The Board of Directors lay down the broad policy guide-lines regarding the working of the Bank.

The present list of the members of the Board of Directors is given below:-

No. Name Designation PADB

1. Sh.D.P. Reddy, IAS Additional Chief

Cooperation (Chairman)

2. S.Ravel Singh s/o Joginder Singh Director Amritsar

3. S.Tejinder Singh Middukhera s/o Gurnam Director Lambi

No. Name Designation PADB

4. S. Jatinder Singh s/o Daljit Singh Director Zira

5. S. Ravinder Singh s/o Avtar Singh Director Jalandhar

6. S. Manmohan Singh s/o Rashpal Singh Director Dera Baba Nanak

7. S. Sucha Singh s/o Naranjan Singh Director Phillaur

8. S. Bal Ram s/o Labhu Ram Director Balachaur

9. S. Kanwarpal Singh s/o Des Raj Director Derabassi

10. S. Ajaib Singh s/o Hazara Singh Director Ghanour

11. S. Balwinder Singh s/o Bikkar Singh Director Ludhiana

12. S. Jeet Singh s/o Hakam Singh Director Sangrur

13. S. Bhup Singh s/o Birbal Dass Director Sardulgarh

14. S. Jagtar Singh s/o Ruldu Singh Director Rampuraphul

15. S. Jesrat Singh Sandhoo s/o S. Gurinder Pal Director (Nominee of C/o The Fazilka
Singh (Nominee of PSCB, Sec 34, PSCB – Sector 34, Central Coop. Bank
Chandigarh) Chd.) Abohar

16. Principal Secretary,Finance to Govt of Government Nominee

Punjab, Department of Finance, Punjab
Civil Secretariat Chandigarh
Promotion and sustenance of economic interest and providing easy finance, cost effectives and
quality banking services to customers


Services provided by the bank:-

I. Loans:-
Loans to Public:
1. Consumer durable loans
2. Personal Loan to salary class
3. Housing Loan
4. Sehkari Education loan

Loans to Central Cooperative Banks: (Re-finance)

 Short term agriculture loan
 Medium term agriculture loan
 Short term non-agriculture loan (Consumption Loan)
 Non farm sector loan
 Two wheeler loan to farmers
 Cash Credit Fertilizer
 Cash Credit Limit to Cooperative Sugar Mills
 Tube well
 Poultry
 Dairy development
 Biogas
 Soil conservation & water management
As per laws No. 28 the Board Of Directors shall be constituted as under

 Three Directors to be nominated by Govt. so long as the Govt. is member.

 Eight Directors to be elected out of members Co-operative Marketing cum processing
Societies. One Director to be elected out of member industrial Co-operative societies. In
case, The No. of these societies exceeds fifty-one. Directors to be elected out of the
remaining Co-operatives societies.
 None of elected Directors has incurred any disqualification of director so far and there is
no Director who continuously remained absent in three consecutive meeting of Board of


A part from its head office at Ropar, The Bank has been in the services of the people through a
network of its 26 branches spread over the district.

Sr. Office Phone No. With

Field Offices Address
No. STD Code

R.O. Patiala SCO. 8, Near Sodhi Eye Hospital, S.S.T. Nagar, 0175-5002852,
Patiala. 147001 2370039, 5018548

I AGM Patiala SCO 8, Near Sodhi Eye Hospital, S.S.T. Nagar, 0175-5002939,
Patiala. 147001 5012939

1 PATIALA S.C.O. 8, Near Sodhi Eye Hospital, S.S.T. Nagar, 0175-5001188,

Patiala. 147001 5012316

2 Devigarh Pehwa Road, Channa Mor,Devigarh. 147111 0175-2631023,

Sr. Office Phone No. With
Field Offices Address
No. STD Code


2 Devigarh Pehwa Road, Channa Mor,Devigarh. 147111 0175-2631023,


3 Nabha #398, Opp. College Ground, Hira Mahal, Nabha. 01765-222584, 504176

4 Rajpura SCO No. 4014-15 Near Railway Station & Bus Stand 01762-501180, 222202

5 Ghanaur Ward No 2, Ghanaur 140702 01762-267379, 267380

6 Samana Near Johri Hospital, Samana 147101 01764-220162, 500392,


7 Patran Chunagra Road, Nr. Old Bus Stand, Patran 147105 01764-244500, 242033

II AGM Sirhind Cooperative Bhawan ,Jyoti Saroop Chowk Fatehgarh 01763-510344

Sahib 140406

1 SIRHIND Cooperative Bhawan ,Jyoti Saroop Chowk Fatehgarh 01763-503233

Sahib 14040

2 B. Pathana Market Committee building ,adjoining SSP office , 01763-509268

Bassi Pathana Distt :- Fatehgarh Sahib 140412

3 Amloh Khanna Road , Near post office Amloh Distt 1765-509743, 01765-
Fatehgarh Sahib 147203 231233
Sr. Office Phone No. With
Field Offices Address
No. STD Code

4 Khamano Grain market, opposite Market Committee Office 01628-268386

Khamano Distt Fatehgarh Sahib 141801

III AGM Ropar House No 316, Giani Zail Singh Nagar, Near LIC 01881-228940, 01881-
Building. Ropar 140001 220176

1 ROPAR House No 316, Giani Zail Singh Nagar, Near LIC 01881-222312, 01881-
Building. Ropar 140001 220476

2 Morinda Near PNB Bank, Opposite Axis Bank, Ludhiana- 0160-2633280

Changarh road, Morinda 140101

3 A.P. Sahib Mohalla Sis Ganj, Near Old Thana, Above Allahabad 01887-233185, 01887-
Bank. Anandpur Sahib. 140116 230185

4 Kharar Opposite Satyam Medicos, Landran Road, Kharar 0160-5009476


5 Derabassi BDPO Complex, Opposite Bus Stand, Chandigarh- 01762-506193, 01762-

Ambala Road, Derabassi. 140507 280567

IV AGM Barnala Opp. Bijli Board Office Barnala. 148101 01679-230672

1 BARNALA Opp. Bijli Board Office Barnala. 148101 01679-230272

2 Tapa Opp. Telephone Exchange Tapa. 148103 01679-272710

V AGM Sangrur Opposite Dr. Dharampal Child specialist,Sangrur. 01676240151

An agriculture loan is an overdraft facility which could be used to meet the cost of farming,
cultivation ad working capital activities for agri-business. It is help for buying cattle, purchase
equipment for farming and other agriculture requirements.

Loan for the [purpose of installing new tubewells can be granted only in those blocks which fain
the category of semi critical and safe zones as approved by the agriculture department or

No loan id granted for the installation of tubewells in over expokited and critical ares.

Loan is granted for the purpose of pipes, fans, dissel engine and electricity motors. The amount
of depend on the depth of water.

This loan has to be repaid within 9 years with interest.

The machinery that has been purchased with this loan has to be insured.

The Greek alphabet

Enrollment in local colleges, 2005

Type of tubewell Specification Unit of cost Loan repayment

Tubewell alongwith 61metre 273526 9 year

pumpset (200”deep)

92metre 402156 9 year


Pumpset replacement 45000 9 year

Drip irrigation also know as trickle irrigation or micro irrigation or loacalized irrigation is an
irrigation that saves water and fertilizers by allowing a water to drip slowly to the roots of plants,
either onto the soil surface or directly onto the root zone through a network of valves , pipes,
tubing and emitters. It is done through narrow tubes that deliver water directly to the base of the

Unit cost of installing drip irrigation on a hectare plot is as follows:

Plant spacing Amt. (in Rs.) Repayment

(in metres) Priods(years)

Wide spaced 23000 9


Medium spaced 60000 9


Closed spaced 110000 9


This loan has to be repaid within 9 years in annual installment.

Water is a key factor in increasing agricultural production. About 78% of Indians water
resources are used for agriculture out of this is only 50% is actually used by plants and the
remaining water resources are wasted either as deep percolation or as evaporation. Excess
irrigation not only reduces crop production and damages soil fertility but also causes ecological
hazards like water logging and salinity. With competitive use of water and its increasing
scarcity,it has become imperative to economise water use for optimum productivity. This is
possible only through improved water management and adopting advanced techniques vof

Sprinkler irrigation method distribute water to crops by spraying it over the crop ares like a
natural rainfall. The water under pressure flows through perforations or nozzles and sprays over
the area. The pressure is provide by a pump of suitable capacity and horsepower. With carefull
selection of nozzle size , operating pressure and spacing , the actual water required for
maintaining soil moisture at field capacity is applied uniformly at a rate to suit the infiltration
rate of soil thereby obtaining efficient water application.

It is estimated that the sprinkler irrigation system substainly reduces the use of water and the
crop productivity also increases.

Suitable crops

Nearly all crops are suitable for sprinkler irrigation system except crops like paddy, jute
etc. the dry crops , vegetables, flowering crops, orchards, plantation crops,like tea, coffe are all
suitable and can be irrigated through sprinklers.


Fertilizers and pestisides can be effectively applied in split doses through sprinklers at little extra
cost. This facilitates uniform fertilizer application and effective pest control.

The overall cost of labour is generally reduced.

Erosion of soil cover which is common in surface irrigation can be eliminated.

Unit cost of installing sprinkler irrigation on a 1 hectare plot is as follws:

specification Unit cost Repayment


1-2hectare 32000 9
Under this scheme, the agriculturist can get his case sponsored from Punjab energy development
agency, Chandigarh or from the concerned manager avail of the subsidies offered . under it , for
a 3.5 horsepower set , a loan of 4.50 lakh Rs. is disbursed. Repayment of loan is 9 years in
equated annually installment.


Under this scheme , fir a 10 metre long X broadX10 metre depth tank, loan of rupees 35000 is
disbursed. Loan repayment is 9 years in equated annual instalments and grace period is 2 years.


Under this scheme, loan is provided for following purposes:-


Under this scheme, loan are given as under:-

purposes Unit of cost Repayment period Grace period

Soil conservation 100000 per acre 10 years 1

Reclamation of 100000 per acre 10 years 1


Underground 90000 per hectare 10 years 1

Channels /pipeline
Loan application under this the above scheme shall be recommended by the soil conservation
department, Punjab . applications should accompany the layout plan and estimated cost approved
by the soil conservation department. The agriculturist can procure pipes from an agency of hir

The farmer should his on meaning of irrigation or inner his fields.

Loan upto 2 lakh shall be done directly to the borrower, the condition being that only I.S.I.
marked pipes and other material be used.

Loan above 2 lakh for ISI marked pipes shall be disbursed directly to the firm supplying it.


The loan is given for reclamation of mortgage land .

Repayment period is 10 years in 10 equated installments.

Rahennama has to be produced for the mortgagew land .

1. To study the concept of agriculture loan.

2. To study perception of farmers towards agriculture cooperative development bank

3. To find out the awareness of farmers about various types of financial product for


4. To find which age mostly taken loan

5. To study the number of farmers in terms of land holding in acres.

6. To study about the interest rate


This chapter is an education of literature relating to the flow of credit from various organised
and unorganised sources ofhousing and real estate finance. The aim of such a perusal is to
have a bird's eye view of the concurrent and corresponding issues and problems related to the
present study. The first part deals with the flow of credit from organised institutions to
various sectors like manufacturing industry, private corporate sector and various other
industrial concerns. Studies on the institutional flow of credit in Kerala are also discussed.
The unorganised sector consisting of indigenous financial agencies is enumerated in the next
part. Understanding the operation of and the potential for housing finance is important, since
in many developing countries 'housing' policy is about establishing new and more innovative
finance policies.

 The banking system in India comprises of the Reserve Bank of India, Commercial
banks and cooperative banks and credit societies. The commercial banks are the premier
institutional structure of the 104 banking system. The principal function of these
institutions is to satisfy simultaneously the portfolio preferences of the borrowers on one
side and the lenders on the other. They mobilize resources from the savers in the form of
deposits and extend credit facilities to borrowers in the form of loans, advances and
securities. Loans and advances provided by these institutions can be categorized into
short-term funds and long-term funds. The latter are advanced for purchase of plant and
machinery while the former are provided for purchase of raw materials, stores, spare
parts and the like. However following the traditional British banking practice,
commercial banks provide more short term funds to the investors in industry and trade
than long term loans. The pattern of credit disbursement has undergone substantial
changes since 1950.

A) Commercial banks extended credit to commerce and trade to a larger extend than to
manufacturing industry until 1958. Since the commencement of the second five Year Plan,
which laid emphasis on rapid industrialisation, the pattern of credit flow took a new turn infavour
of medium and large industry. As a result, the share of industry, in public and private sectors in
total bank credit increased from 34.8% to 67.5% during the period 1954 to 1968. Since
nationalisation of 14 major commercial banks in July 1969, the Government of India assigned
new priorities to commercial banks with regard to the flow of credit to hitherto neglected sectors,
called 105 "priority sectors." The emphasis thus shifted from industry to the priority sectors.
Further the supply of credit was controlled through

B) On the other hand the demand for bank credit has also undergone substantial increase. Factors
such as, large growth in the number of industrial units, diversification of existing units, increase
in industrial and agricultural production, increasing needs of short and long-term funds to
maintain the increased levels of production, pushed up the demand for bank credit.

1.Divatia and shankar6 in their paper discussed the role of internal and external sources of funds
and their components in financing capital formation of the private corporate sector. The study
was based on the RBI company finance studies relating to medium and large public and private
limited companies and covered the period 1961-76. They also discussed the trends and patterns
of financing for four individual industries, viz, cotton textiles, jute, sugar and cement.

 S. Adve had some interesting findings in his article "Financial Practices in Indian Corporate
Sector," based on the RBI company finance data. He underlined the rising dependence on
borrowed capital in relation to the total capital employed in the 6 V.V.Divat~a et a1 (1979).
"Capital Formation and its Financing in the Private Corporate Sector 1961-62 to 1975-76." The
Journal of Income & Wealth, April 118-152. 7 S. Adve (1980). "Financial Practices in Indian
Corporate Sector, Inter-Groupand -Size Differences," Economic and Political Weekly, Feb. 23.
109 Indian corporate sector. Trade credit was pointed out to be important sources of capital when
the bank credit was squeezed. Making an industry-wise analysis, the author came to the
conclusion that the industries with large profit margins and those with large depreciation and
development rebate reserves had a relatively lower order of overall indebtedness and many
ofthem also had a lower order of bank borrowings in relation to overall indebtedness. Industries
with high profit margin such as silk and rayon textiles, aluminium, basic industrial chemicals and
medicine and pharmaceutical preparations had lower proportion of borrowed funds as compared
to the average of the medium and large public Ltd. companies.
 L.S. Gupta' from the extensive study viewed that the growth of institutional finance emerged in
lndia due to structural change for industrial financing system with wide change of socio-political
situations in lndia. He attempted to measure overall impact of financial institutions on capital
formation in the organised private sector as also the allocative efficiency of financial system. He
observed that during the first pla? financial assistance rendered by special institutions
represented only 4.1 per cent of gross fixed investment in private industry, which rose to 7.9 per
cent in the second plan and further to 18.1% in the third plan period. He also 8 L.S. Gupta
(1969). Changing Structure of Industrial Finance in Indra, The Impacr ~f'lnstrtutronal Finance,
Clarendon Press: Oxford. 110 found that commercial banks remained the most important single
agency for financing the private corporate industry and LIC was the single largest purchaser of
industrial securities and the underwriter of new issues of large and established companies.

 M.S. Joshi examined the role of financial intermediaries in providing finance to large-scale
industries in the private sector. After analysing the contribution of each important intermediary
towards industrial development in India, he estimated that these intermediaries have participated
with 17% of investment in various industries against 39% in share capital of public Ltd.

 Studies on Institutional Credit in Kerala Among the studies on the state of Kerala, few have
looked at the inter regional development of banking. The study conducted by the Travancore-
Cochin banking enquiry c~rnmittee'~ was the first of its kind in the post-Independence era. The
report traced the development of banking in the two regions of Travancore and Cochin. It noted
that in terms of the average number of people per bank office, they had the smallest figure in the
whole of lndia. It was noted that the expansion of commercial banks in the rural areas is more
pronounced than in any other state. 9 M.S. Joshi (1965). Financial Intermediaries in India.
Makhanlal& Sons Pvt. Ltd, Bombay. 10 Gok (Various Years) Kerala Economic Review,
Thimvananthapuram. 11 1
1. M.A. Oornrnenl' historically reviewed the expansion of commercial banking in the Travancore-
Cochin region prior to the period of planning. He noted some of the salient features of banking in
Kerala: their community or sectarian origin and ownership, the rural areas bias, over extension of
credit and predominance of small accounts. He noted the presence of a special concentration of
banking in Tiruvalla and Trichur.

2. The Kerala Planning Board (1982) too made an effort tounderstand the performance of
commercial banks in Kerala after nationalization. This study was confined only to a quantitative
assessment of the performance of nationalized banks and looked at the mobilization of deposits,
trend in credit expansion and the sectoral distribution of bank advances. Even though the number
of bank offices in the state is more than that of other states, some districts like Malappuram and
ldukki lacked banking infrastructure. Ernakulam was found to be the best-banked district in the
state followed closely by Trivandrum. It accounted for 22 per cent of the deposits and 30 per cent
of the credit disbursed in the state. Idukki, Malapuram and Palghat were way behind.

I I MA. Oommen (1976). "Rise and Growth of Banking In Kerala." Vol 5. 80
3 112

 Among the more recent studies, Sunanda's" study of institutional agricultural credit in Kerala
highlights the inter district disparity. She reviews the socio-economic background for the origin
and growth of banks in Kerala (performance of commercial banks and co-operatives only) and
concentrates on the agricultural credit disbursed by them. In credit per hectare, Ernakulam and
Trichur stood highest while Palghat ranked the lowest. Regional disparity of agricultural credit
from commercial banks decreased between 1974175 and 1985186 while that of co-operatives
increased. She has used Principal Component Analysis to explain the variation. Three sets of
variables are used for explaining the variation of credit per hectare from commercial banks and
co-operatives viz, Banking variables, Asset variables and Productivity variables.
 The book 'Reminiscences', written by Shri. K.C. MammenMappilai throws some light on the
banking developments that took place in Kerala prior to independence and also the role played
by the Christian community in developing the banking system in the state. It also contains the
history of the National Quilon Bank, which was the premier bank at that time and explains the
reasons for its failure. " S. Sunanda (1991). "Institutional Credit for Agriculture in Kerala-A
Disaggregated Analysis", M. Phil dissertation, CDS, Thiruvananthapuram. " K. C.
MammenMappilai (1959). Reminiscences, MalayalaManorama Printing and Publishing Co.
Kottayam, Kerala. 113
 Shri. A.K. Seshadri's "A Swadeshi Bank from South lndia"l4 gives an account of the
banking crisis that occurred in the state in 1930 due to the failure of the National Quilon
Bank and that in 1960 consequent upon the liquidation of the Palai central Bank, Palai.

 The Indian Banks association , Bombay published a book 'Kerala's Banking Profile' in 1987.
This book contains a quick review on the banking and the economic scenario in Kerala from
1969 to 1987 and also has dealt with the impact of the non-banking private financial
institutions on the banking system in the state. It also contains a quick analysis of the role of
the NRI sector in the growth of the commercial banks in Kerala. Though the book contains
information regarding deposits, advances, number of branches, net state domestic product, per
capita income, per capita deposits etc, it does not make any attempt to analyse these factors and
to find out whether any relation exists between these factors. In 1992 Canara Bank, the
convener of State Level Bankers' Committee Kerala had brought out a brochure on Kerala's
banking profile. This book contains a review of the district and state wise performance of the
commercial banks during the 3 year period from 1989 to 1992. But this does not contain
certain vital information like I4 A K Seshadrl (1982). A SwadeshiBank,from South India,
Indian Bank,

Madras. I Indian Banks Association (1987). Kerala: A Banking Profile, Bombay. 114
classification of deposits and advances according to population group wise, a review on the
productivity of banks in Kerala etc.

o Indigenous Financial Agencies The availability of literature on indigenous financial system is

scarce. The Central and Provincial Banking Enquiry Committee Reports give comprehensive
information regarding the working of the agencies. But even such information appears to have
become outdated in many respects as the enquiry was conducted more than 55 years ago. The
Rural credit survey and Central banking Enquiry Committee attempted to obtain quantitative
information, including capital invested in the business from the agencies but failed in their task.
Hence as far as the quantitative aspect is concerned, it is impossible to collect correct
information from these agencies as their nature of business is selective and also as their exact
number is not known.
1. G. Karkal brings out some of the problems of indigenous banking in India in the present context
of economic development. He attempts a scientific definition of the term 'agencies' and points
out how the earlier definitions were defective. Karkal's book estimates the magnitude of capital
involved in the unorganized " G Karkal (1 967). Unorganized Money Market in India. Lalvani.

Publishing House Bombay. 115 market through the help of data regarding 'Hundi' sales. With the
help of available data the study points out the nature of the interest rate in the various rural-urban
regions. It indicates the trend of and

Effect of the contact between the two markets viz., the organized money market and unorganized
financial sector. Again the study discusses the methods of strengthening the 'Agencies.' Here it
pleads for the recognition of the 'hundi' as a liquid asset - at least in the case of trusted
indigenous bankers, thereby giving an impetus to the unorganized sector to encourage the bill

2. B.A. ~raksh" provides an interesting account of the functioning of private financing firms in
Kerala. The study based on a survey of the private financing firms in Trichur town seeks to
examine the factors, which contributed to the emergence of these institutions, the method of their
functioning and their importance as a parallel banking system. However he is silent on questions
such as types of borrowers, total amount of uncounted money generated by the private financing
firms, safety of depositors' money and so on.

3. D. Rajasekhar" based on a survey of 8 private financing firms in Bellary town in Karnataka tries
to probe the factors " BA Prakash (1984). "Private Financing firms in Kerala", Economic and
Political Weekly. Vol XIX. Dec. 15. '' D Rajasckhar (1988). "Private Financing Firms in
Karnataka: A boom for tax dodgcrs " Working Paper No: 228. CDS, Thil-uvananthapuram. 116
responsible for the growth of private financing firms. It also documents and analyses the
functioning of private financing firms and critically examines the type of borrowers, the use
pattern of the borrowings and also tries to estimate the black money generated by the private
financing firms.
o Housing Finance A strong relationship between levels of urbanization and wealth has been
demonstrated both theoretically and empirically in numerous study Traditionally, faced with
other development priorities, governments and international agencies have been reluctant to
encourage investment in housing, which has often been seen as an item of consumption (UNCHS
1991).' Moreover, many of the first waves of housing finance institutions were poorly managed
and contributed to macro-economic disruption." Even by the late 1980s en and^^ was able to
observe that 'few aspects " S. Malpezz(1990). "Urban Housing and financial markets: Some
international Comparisons", (JrhnnStudies, 27, 6: 971-1022. '" World Bank (1993). "Housing:
Enabling Markets to Work", World Bank i'olic), PnperWashtngton DC: World Bank. '' United
Nations Centric for Human Settlements (1991). "Integrating

Housing Finance into the National Finance Systems of Developing Countries: Exploring the
Potentials and the Problems", Nairobi: UNCHS. " R.M. Buckley er a/. (1989). "Housing policy
in developing economies: evaluating thc macroeconomic impacts", Review uf Urban & Regional
Development Studies. 2: 27-47. '' B. Renand (1987). "Financing Shelter" in L. Rodwin (ed)
Shelter, Settlement nndIleveiopmenf Boston: Allen and Unwin. 117 of economic development
remain as unexplored and poorly analysed as the potential to induce financial development and
ways to improve the financing of housing.' These practical and conceptual difficulties
notwithstanding, during the 1990s housing finance moved to the top of the urban agenda. Under
pressure to reform urban management, governments have made important legislative and
institutional reforms to enable private institutions and non-governmental organizations (NGOS)
to have a greater role in the provision of housing finance. The lead of the World Bank has been
especially important in making the shift from housing projects towards the delivery of housing
financez4 from 1983 to 1988. Bank lending for housing finance exceeded the total for sites and
services from 1972 to 1988, and by 1989 almost one-half of all Bank urban lending was for
housingfinance programmes.z5 This reorientation went beyond the need to deliver more and
better housing, to make urban policy compatible with macro-economic management, particularly
in the context of structural adjustment programmes in which control of foreign exchange risks
and fiscal policy have been paramount. "World Bank (1993). The Housing Indicators program:
Preliminary Result, Washington, DC World Bank. " R.M. Buckley el a!. (1989). "Housing policy
in developing economies: evaluating the macroeconomic impacts," Review of Urban d; Regional
Development Study.. 2: 27-47.

Need of the study:

Since about 70% of India’s population lives in rural areas and 27.5% of the countries national
income is derived from agriculture, choosing of the topic ‘Different types of loans provided by
Co-operative Bank Ropar in distributing rural credit’ justifies itself. It has been generally
observed that although great efforts made by cooperative banks in credit flow to small farmers
remained below needs. These days issues with regards to rural credit have acclaimed great
priority requiring proper research into its depth. This study is an attempt to go to the depth of the
problems of the rural people with respect to rural lending. I have noted that in the lack of
adequate funds for fulfilling the short term and long term needs formers are committing suicides
in Punjab state. So in this study I am looking the role played by the cooperative bank in fulfilling
the needs of the rural people in Ropar district.

Research problem: To study efficiency of central co operative bank Ropar in distributing

rural credit. Research Design:Exploratory as well as descriptive research will be undertaken to
achieve the stated objectives of the study.

Method of data collection:

Actually data is of two kinds so researchers should keep in mind both types of data.

o Primary Data:- Primary data are those, which are collected afresh and for the
first time and this happen to be original in character.
o Secondary Data:-Secondary data are those data which have already been
collected by someone else and which have already been used as per required.

After only keeping in mind one can think about what type of data has to be collected during
research as our research is concerned we have to gather primary data for Customer behavior.
Research Instruments:

o Questionnaire: We collected primary data through sample survey or census

surveys from the selected elements. So for this purpose I have used the most
popular tool of primary data collection through direct communication with
respondents. The tools which is used are questionnaires.

The customer survey has been done in the ropar city and sample size for this survey was
(1)What is your Occupation?

Occupation Number
Employee 19
Agriculture loan 27
Personal loan 13
Any other 6

Series 1
10 Series 1
Employes Agriculture Personal Loan Any Other

According to the survey it is clear that most of the persons who have taken loans from the co
operative bank are agriculturist (landlords). They consists the share of the total respondents,
after them employee consists , non farming and the any other category both have the share of
each and the least share is of the respondents are from the agricultural laborer they are.
(2) Have you ever taken loan from Agriculture Co-operative banks?

Yes 65
No 0

The target people in this survey are only persons who have taken loans from the agriculture co operative bank

(3) Analysis and interpretation of data

Sr. no. Age group No. of farmers

1 20-30 2
2 30-40 14
3 40-50 30
4 50-60 10
5 60-70 5
6 70-80 4

Series 1
15 Series 1
20-30 30-40 40-50 50-60 60-70 70-80

Number of farmers in terms of age group maximum number belongs to 40-50.minimum

number of farmer in the age group 20-30.
(4) land holding of farmers

Sr. no. Land in acres No. of farmers

1 1 24
2 2 14
3 3 12
4 4 9
5 5 6

Series 1



Series 1

1 2 3 4 5

Number of farmers in terms of land holding in acres . The maximum number of farmers having
land in acres is 1 acres. The minimum number of farmers having land in acres is 5 acres.
(5) Farmers recommend the agriculture cooperative bank to others

Sr. no. opinion No. of farmers

1 Yes 55
2 No 10

Series 1



Series 1


Yes No

The farmers recommend the agriculture bank to others in which 55 people wants to
recommend and 10 people do not have any interest to recommend agriculture bank to others.
(6) Genders of farmers

Sr. no. Gender No. of farmers

1 Male 50
2 Female 15

Series 1



Series 1


Male Female

The distribution of farmers according to gender. In which male farmers have majority 50 in Commented [T1]:

number. The minimum number of female is 15 in number.

(7) Awareness about the financial product.

Sr. no. Financial product No. of farmers

1 Kisan credit card 5
2 Drip irrigation 25
3 Vehicle loan 10
4 Sprinkler irrigation 25

Series 1



Series 1

Kisan credit card Drip irrigation Vehicle Loan Sprinkler

The people related to financial product of the agriculture loan schemes of the agriculture
cooperative bank.
(8) Which sort of security do you give for taking loan.

Sr. no. Name of security No. of farmers

1 Land 44
2 Any personal asset 10
3 Fixed deposit 3
4 Guarantee by Govt. employee 8

Series 1
20 Series 1

Land Any personal asset Fixed deposi Guarantee by govt.

All types of loans are provided against are kind of security or the guarantee by any third person.
As most of the agriculture cooperative banks in the rural areas and their target customers are
agriculturists and these agriculturist 44 farmers of the are provided on the security of land.
Some loans are provided on the guarantee of the Govt. employees these types of loan are 8
farmers of the total loan.
o Farmers are less aware about the other financial product related to the agriculture loan.
o Age group of 40-50 borrowing loans from banks
o The awareness about the different financial product related to agriculture loan very less like
kisan credit card and for agriculture business.
o The number of farmers in terms in holding in 2 acres
o The mostly farmers gives land for the security and for the loan to the bank.
Commented [T2]:


Every project faces some limitation and because of this limitation the required and necessary data to complete the
project may not gather in proper manner. The limitations which we observe were as follows:

o Some employees were hesitant in providing complete information

o Respondents may have given bias information.
o With respect to actual population the sample size was too small. This might be effect the final
o As non probability sampling technique is used in the research so there will be biasness.
o Lack of adequate time.

1. Bank officers also have to increase the contacts with farmers.

2. Encourage people by conducting seminars some programmes related to the
agriculture schemes.
3. The bank have so take some efforts to create awareness about different financial
product by taking some programmes
4. People of young age group who are risk takes by nature may be targeted seperatly
. at present era they are taking the decision related each activity so the bank
officers have to target the youngsters age group.
5. Technology of the bank should be impropved. Facility should be provided by the
agriculture cooperative bank
6. innovation need to be brought in the field of rural lending.

Since majority of people in India still reside in rural areas effective rural lending is very essential
for rural development and overall economic development. This rural lending is provided by
credit authorities namely: commercial banks, Cooperative banks and regional rural banks. But
this study is related only to the cooperative bank Ropar.
Aim of the study was to analyze the effectiveness of the cooperative bank in rural lending. The
objective laid down was covered during the study. Findings of the study laid down that there has
been considerable progress in rural lending by the cooperative bank although there is still great
requirement of credit in the form of various categories of loans to enable rural people to meet all
sort of credit needs.





 Chandra, Buddhadeb (2006), “Performance of Burdwan Central Cooperative Bank in the Development of
the District (1988-89 to 1998-99)”,

 Fulbag Singh and Balwinder Singh (2006), "Funds management in the central cooperative banks of Punjab-
an analysis of financial margin", The ICFAI Journal of Management, Vol. 5, 74-80.

 Ramesha and Nagaraju (2007), "Prudential Standards and the performance of Urban Co-operative Banks
in India: An Empirical Investigation", The ICFAI Journal of Financial Risk Management, June, 2007.

 DuttaUttam and BasakAmit (2008), “Appraisal of financial performance of urban cooperative banks- a
case study.” The Management Accountant, case study, March 2008, 170-174.

 Chander Ramesh and Chandel Jai Kishan (2010), “Financial Viability of an Apex Cooperative Credit
Institution- A Case Study of the HARCO Bank”, Asia-Pacific Business Review Vol. VI, No.2, April-June
2010, pp 61-70
I am MBA student conducting research for my summer training. Please
space your precious time to fill the questionnaire.



1. : MALE


1. 1-1.50 Lack

2. 1.50-2 Lack

3. 2.Lack-2.50 Lack

4. 2.50Lack-5 Lack

1.What is your occupation

 Employee
 Agriculture loan
 Personal loan
 Any other

2. Have you ever taken loan from agriculture cooperative loan

o Yes
o No

3. Analysis and interpretation of data

o 30-40 age
o 40-50 age
o 50-60 age
o 60-70 age
4. Land holding of farmers

o 1acres
o 2 acres
o 3 acres
o 4 acres

5. Farmers recommend the agriculture cooperative bank to others

o Yes
o No

6.Gender of farmers

o Male
o Female

7.Awareness about the financial product

o Kissan credit card

o Drip irrigation
o Vehicle loan
o Sprinkler irrigation

8.Which sort of security do you give for taking loan

o Land
o Personal asset
o Fixed deposit
o Guarantee by Govt. employee