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Prof. Harpreet Kaur Amandeep Kaur

MBA – 3rd Sem.

Roll No:-810


I, Amandeep Kaur having Roll no. 810 of MBA Semester 3rd Sem. of Ropar IMT
Shekhupur, hereby declare that the project entitled “EFFICIENCY OF THE CHANDIGARH
AGRICULTURE LOAN “is an original work and the same has not been submitted to any other
institute for award of any other degree.

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

(Supervision) (Student)

Prof. Harpreet Kaur Amandeep Kaur

Department of Management MBA- 3rd Sem.

Roll No-810

If words are considered to be signs of gratitude then let these words convey the very same I am
highly indebted to Branch Manager who provide me with the necessary information and also for
the support extended out to me in the completion of this report and his valuable suggestion and
comments on bringing out this report in the best way possible.

I am greateful to all faculty members of the THE CHANDIGARH COOPERATIVE

AGRICULTURE DEVELOPMENT BANK LTD ( Ropar). and my friends who have helped
in the successful completion of the proect.

Amandeep Kaur


(i) Certificate

(ii) Declaration

(iii) Acknowledgement

Chapter No. Topic Page no.







7 FINDINGS 54-55




Bibliography 62



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 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.

Agricultural Marketing Infrastructure (AMI)
There is a need to promote agricultural marketing infrastructure projects for reducing
intermediation and the post-harvest losses by integrating supply chain which ensures better
remuneration to the farmers and supply of better quality products to both consumers and
processing industries. It is estimated that there is an investment requirement of Rs. 56,000 crores
for different marketing infrastructure and value chain development during the XII plan period. In
this connection Department of Agriculture and Cooperation (DAC), Govt. of India has now
introduced Agri Marketing Infrastructure (AMI) scheme by merging erstwhile Grameen
Bhandaran Yojana (GBY) and Scheme for Development/ Strengthening of Agricultural
Marketing Infrastructure, Grading and Standardization (AMIGS).

Medium Term Refinance Scheme for financing Agricultural Projects

NABARD has been providing financial assistance by way of refinance to financial institutions
for providing production and marketing credit for a period not exceeding 18 months (short term
finance) besides for long term investment activities with a repayment period of 3 years onwards.
In a market where interest rates are dynamic, Banks have been providing investment credit with
shorter duration for financing various agricultural and allied activities and fixing repayment
periods from 1 year but below 3 years and are not eligible to claim refinance for such financing


Under this scheme, farmers can get financial assistance for Agriculture related activities for
Medium and long term. The loan is given as under :-

Scheme Unit cost

Kisan credit card scheme

upto 3 lakh 5 years
Agriculture & allied activities

Kisan credit card scheme

3 lakh to 10 lakh 7 years
Agriculture & allied activities

Kisan credit card scheme

10 lakh to 18 lakh 10 years
Agriculture & allied activities

Kisan credit card scheme
upto 3 lakh 5 years
Non farm sector

Kisan credit card scheme

3 lakh to 10 lakh 7 years
Non farm sector

Kisan credit card scheme

10 lakh to 18 lakh 10 years
Non farm sector


Under this scheme, the borrower has to deposit 10% as the margin money.

Under this scheme, subsidy of 25% to 33.33% is provided by NABARD. The subsidy is given
according to availability of funds.

Loan is given for a unit of 2 to 10 animals for a maximum of 5 lakh Rupees.

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 Secretary-

Cooperation (Chairman)

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

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

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

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

No. Name Designation PADB

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 Singh Director (Nominee of C/o The Fazilka Central
(Nominee of PSCB, Sec 34, Chandigarh) PSCB – Sector 34, Chd.) Coop. Bank Abohar

16. Principal Secretary,Finance to Govt of Punjab, Government Nominee

Department of Finance, Punjab Civil Secretariat


Promotion and sustenance of economic interest and providing easy finance, cost effectives and
quality banking services to customers.


The objects for which the Bank is established are as under:-

1. To serve as a balancing center for cooperative societies (hereinafter called the

society/societies) in the State of Punjab registered under the Act for the time being in force.

2. To promote the economic interest of the members of the Bank and Cooperative Societies in
the State in accordance with cooperative principles and to facilitate the development and funding
of any Cooperative Society registered under the said Act.

3. To establish and support or aid in the establishment of and support to association, institutions,
funds, trusts and convenience designed to benefit the employees or ex-employees of the Bank or
the dependents or connections of such persons to grant pensions and allowances and make
payment toward insurance.

4. To provide long term loan for the maximum period of 15 years to the individuals, Coop.
House Building Societies, Federation of Coop. House Building Societies and members of Group
Housing Societies for purchase of house or construction thereof by enrolling member/nominal
members. To carry on banking and credit business not repugnant to the provisions of the Act and
the Rules framed there under for the time being in force and in particular to provide credit
facilities to the members.

5. To adopt such measures as are conducive to the spread of cooperative education and training.

6. To promote and develop Cooperative Societies in the State.

7. To do all such other things as are incidental or conducive to the promotion or advancement or
objects of the Bank.

8. To solicit or procure insurance business as a Corporate Agents.


Services provided by the bank:-

I. Loans:-

Loans to Public:
1. Consumer durable loans
2. Personal Loan to salary class
3. Minor Irrigation
4. Sehkari Education loan
5. Soil Irrigation
6. Farm Mechanisation
7. Diversified Loaning
8. Plants and Horticulture
9. Non Conservation Energy Resources
10. Farm Forestry
11. Non Farm Sector

Loans to Central Cooperative Banks: (Re-finance)
1. Short term agriculture loan
2. Medium term agriculture loan
3. Short term non-agriculture loan (Consumption Loan)
4. Non farm sector loan
5. Two wheeler loan to farmers
6. Cash Credit Fertilizer
7. Cash Credit Limit to Cooperative Sugar Mills
8. Tube well
9. Poultry
10. Dairy development
11. Biogas
12. 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. Field Office Phone No.

No. Offices With 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,


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

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

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

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-

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

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



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.

1. 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.

 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."

 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.

.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.

2. 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.

3. 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.

4. 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.

5. 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 cornmittee 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,
 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.

 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,

6. 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.

7. 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.

 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

 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.

 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.

8 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).




Loan for the purpose of installing new tubewells can be granted only in those blocks which fall
in the category of semi critical and safe zones as approved by the Agricultural Department or

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

Loan is granted for the purchase of pipes, footvalves, fans, diesel engine and electricity motors.
The amount of loan depends 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

Unit cost Loan

Type of tubewell Specification
(in Rs.) repayment

61 Metre
Tubewell alongwith Pump (200"deep) 9 Years
set 92 Metre 9 years
(300" deep)

Pumpset Replacement 45,000/- 9 Years



Drip irrigation, also known as trickle irrigation or micro irrigation or localized irrigation,is
an irrigation method that saves water and fertilizer by allowing 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 plant.

Unit Cost of Installing Drip Irrigation on a 1 Hectare Plot is as follows:

Sr. Plant spacing (in Repayment

Amt. (in Rs.)
No. metres) period(years

Wide spaced
1 23000/- 9
(10X10 m.)

Medium spaced
2 60,000/- 9
(2.5X2.5 m)

Closed spaced
3 1,10,000/- 9
(1.2X0.6 m)

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


Water is a key factor in increasing agricultural production. About 78% of India's water resources
are used for agriculture out of this 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 of irrigation. One such method
of modern irrigation is sprinkler irrigation system which is becoming more and more popular
among the farmers across the country. Sprinkler irrigation system saves upto 50% of water
compared to surface irrigation method and increases productivity by about 15-25 %.
Sprinkler irrigation method distributes water to crops by spraying it over the crop area
like a natural rainfall. The water under pressure flows through perforations or nozzles and sprays
over the area. The pressure is provided by a pump of suitable capacity and horsepower. With
careful selection of nozzle sizes, operating pressure and spacing, the actual water required for
maintaining the 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 substantially 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, coffee are all
suitable and can be irrigated through sprinklers.

Fertilizers and pesticides 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 follows:

Specification Unit cost(in Rs.) Repayment

period (9 years)

1-2 hectare 32000/- 9


Under this scheme, the agriculturist can get his case sponsored from PEDA (Punjab Energy
Development Agency), Chandigarh or from the concerned Manager avail of the subsidies
offerred . 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 annual installments.


Under this scheme, for a 10m longX10 m broad X 10 m depth tank, loan of Rs. 35000/- is
disbursed. Loan Repayment is 9 years in equated annual installments and grace period is 2 years.


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


Under these schemes, the loans are given as under:-

Repayment Grace
Purpose Unit Cost in Rupees
period period

Soil conservation 1,00,000/- per acre 10 years 1

Reclamation of land 1,00,000/- per acre 10 years 1

90,000/- per hectare 10 years 1

Loan applications under the above scheme shall be recommended by the Soil Conservation
Department, Punjab.Applications should accompany the lay out plan and estimated cost
approved by the Soil Conservation Department.The agriculturist can procure pipes from an
Agency of his choice.

The farmer should have his own means of irrigation or iner 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
firm can be of the choice of the borrower).

For purchase of land, the loan has to be repaid in 10 years in annual equated installments.

Margin money is 10% of the advance given for the purchase of land.

The borrower should not have more than the following size of land, including the land to be

Name of the District Size of land

5.50 acre for irrigated

Amritsar, Ludhiana,Patiala,Sangrur (Except Barnala block)
1. land
Jalandhar,Kapurthala and Gurdaspur (only for Batala block)
and 8.50 for rainfed land

6.75 acre for irrigated

Ferozepur,bathinda,Faridkot and Sangrur(only for Barnala land
and 9.75 acre rainfed

8.50 acre irrigated land

3. Ropar,Hoshiarpur and Gurdaspur (except Batala block) and 12.25 acre rainfed

Loan is given for reclamation of mortgaged land.

Repayment period is 10 years in 10 equated installments.

Rahennama has to be produced for the mortgaged land.


Aonla (Emblica officinalis) is a very hardy, prolific bearer and highly remunerative even without
much after care. Aonla is the richest known natural source of vitamin. Its juice contains 20 times
as much vitamin C as orange juice. Aonla is known for its pharmaceutical properties

It is a wonder herb and one of the precious gifts of nature to man. It is the best of all acid
fruits and most useful for health and body rejuvenation and prevents aging. It's mineral and
vitamin contents include calcium, phosphorus, iron, carotene, thiamine, riboflavin and vitamin C.
Its calorific value is 58. 100 g of fruit provides 470 to 680 mg of vitamin C. The dehydrated
berry provides 2428 to 3470 mg of vitamin C per 100 g.

The use of aonla in such ayurvedic preparations as Chyavanprash, Triphala and

Ashokrishta is age-old. The fruits can be made into preserves, sauce, dried chips, tablets, jellies,
pickles, toffee, powder etc. It is also used in pharmaceutical and cosmetic products such as hair
oil, shampoos, chavanprash, etc. The ascorbic acid and other constituents are well retained even
in dried form of amla fruits.

It boosts immune-system; The most important ingredient of century-old Ayurvedic
medicines; fresh fruits rich in vitamin C are good live tonic, refrigerant, cooling, blood purifier
and anti-diabetic; useful in jaundice, anemia, heart complaints, dyspepsia and indigestion; seeds
used to treat diabetes, asthma, bronchitis and stomach disorders.

Under this scheme, loan shall be sanctioned according to the following:-

Unit cost of the loan shall be Rs. 1,20,000/- per acre.

Margin money 15%.

Loan shall be repaid in half yearly installments.

Grace period shall be 1 year.

The Bank offers Personal Loan for various purposes such as meeting medical expenses,
renovation of residential accommodation, traveling, marriage etc.

Eligibility :Salaried employees of Punjab government, PSUs, Boards, Corporations, Aided

Schools/Colleges, Universities, Public Sector Banks, Premier Medical Institutions, General
Insurance Companies, Co-operative organizations in the state of Punjab or any other
organizations as approved by the Board of Directors of the respective Bank etc.

Age: Minimum 21 years and Maximum 57 years.

Service Tenure: 1 year after the confirmation/regularization.

Loan Amount: 12 Times of gross monthly salary or Rs. 2,00,000/- only , whichever is less.

Period of Loan: Maximum- 5 years. Loan may be repaid in 36/48/60 Equated Monthly
Installments (EMI).

Rate of Interest: 13% p.a.

Income:Net income of the person should not be less than Rs.5,000/- p.m. in case of salaried
persons and Annual Income of not be less than Rs.60,000/- in case of others.

Repayment of Loan: Loan is repayable in equated monthly installments in the form of post-
dated cheques. The 1st installment will start after one month. The Loan will be repaid before



 To find the categories of loan taken by public from co operative banks.

 To find the amount of loan taken by public from co operative banks.

 To find the sort of securities given by public for taking the loan.

 To find the time lag for getting the loan from bank.

 To find the reason for taking the loan from bank.

 To find the problem faced by people for taking the loan from bank.

 To find the reason of over dues of loans.

 To find the satisfaction level of people towards the services provided by bank.



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.

A) Primary Data

Primary data are those, which are collected afresh and for the first time and this happen to be
original in character.

B) 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:

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

Statistical Technique: In the research I have used various statistical techniques like percentage
method .


(1)What is your Occupation?

Occupation Number Percentage (%)

Employee 18 25.71%
Personal Loan 15 23%
Agriculture Loan 10 15.72%
Any other 8 11.42%


Any other 8

Employee 18

Personal Loan 15

Agriculture Loan 10

0 5 10 15 20

Figure 1

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 43% share of the total respondents,
after them employee consists 26 % , non farming and the any other category both have the share
of 11% each and the least share is of the respondents are from the agricultural laborer they are

(2) What is your annual income?

Income Number Percentage%

Less than 20000 6 8.5%
20000-50000 12 17.14%
50000-100000 22 31.42%
100000-500000 26 37.14%
More than 500000 04 5.71%


More than 500000 4

100000-500000 26

50000-100000 22

20000-50000 12

Less than 20000 6

0 5 10 15 20 25 30

Figure 2

Income level of the respondents varies from less than Rs 20000 to Rs 500000. Most of the
respondents are from the income level of Rs 100000-500000 they consists 43% of the total
respondents, after them people from income level of Rs50000-100000 consists 31%, 17%of the
respondents are from the income level of Rs 20000-50000 and the minimum %of the people are
from the less than 20000 income level they consists only 9 %.

(3) Have you ever taken loan from Co-operative banks?

Yes 70
No 0

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

(4) For which of following of the categories loan taken by you from co-operative bank?

Categories Number Percentage%

Agriculture 15 28.57%
Diversified Loans 25 17.14%
Kissan Credit Card 20 28.57%
Personal loan 15 22.85%
Any other 2 2.85%


15 15

Diversified Loans
Kissan Credit Card
Personal loan

Figure 3

Co operative bank provide all type of loans to its customers. Most of the cooperative banks are in
the rural areas and their main aim is to fulfill the credit need of the rural people. Most of the
loans inRopar areas are distributed in the form ofkissancredit card it is 29% of the total loans
distributed, for the agriculture it consists 28% ,loans for the housing consists 23% and for non
farm sector are 25%, respondents under the any other type of the loan are minimum with only

(5) Amount of loan taken from co-operative bank?

Amount Number Percentage%

Below Rs.10000 0 0%
Rs. 10000 to 50000 12 17.14%
Rs. 50000 to 100000 32 45.71%
Rs. 100000 to 200000 22 31.42%
Above Rs 200000 4 5.71%


Below Rs.10000
22 Rs. 10000 to 50000
Rs. 50000 to 100000
Rs. 100000 to 200000
Above Rs 200000


Figure 4

Loan is provided in various forms and for various amounts. Maximum loans are provided
between the Rs 50000-100000 . 46% of the respondents have taken loans between Rs 50000-
100000, these loans help in fulfilling there needs. 31%of the respondents have taken loans
between Rs 100000-200000, these are the loans in the form of kissan credit card,17% of the
loans are provided in the range of Rs 10000-50000 these are for the consumer items or the two
wheelers, only 6% of the respondents have taken loans more than Rs 200000.

(6) Which sort of security do you give for taking loan?

Name of the security Number Percentage%

Land 46 6.57%
House or any personal asset 8 11.42%
Fixed deposit 2 2.85%
Guarantee by Govt. employee 12 17.14%
Any other 2 2.85%

Which sort of security do you give for taking loan?

Any other 2

Guarantee by Govt. employee 10

Fixed deposit 4 SalesWhich sort of security do

you give for taking loan?
House or any personal asset 8

Land 46

0 10 20 30 40 50

Figure 5

All types of loans are provided against any kind of security or the guarantee by any third person.
As most of the cooperative banks are in rural areas and their target customers are agriculturists
and these agriculturist 66% of the loans are provided on the security of land. Some loans are
provided on the guarantee of the govt. employees these type of the loans are 17% of the total
loans. Housing loans are provided against the guarantee of property or the land on which house
is to be build, these consists 11%. 6% of the loans are provided against the security of fixed

(7) Which time span of loan do you usually take?

Time spam Number Percentage%

6 months 8 11.42%
1 year 22 34.42%
2 years 6 8.57%
3 years 14 20%
5 years 20 28.57%

Which time span of loan do you usually take?

20 6 months
1 year
2 years
3 years
5 years

Figure 6

Time spam of the loans differs according to the type of the loan. Kissan credit card limit is for
one year. Housing loans is provided up to 5 years and there are loans which are provided for
short terms for 6 months or one year.

From graph we can interpret that 31% of the respondent have taken loan for one year most of
these are in the form of credit card limit, 20%of the loans are for 3 years, 29% of the loans are
for 6 months these are to fulfill the short term needs of the farmers .11% of the loans are for the 5
years most of these are housing loans. Only 9% of the loans are for the 2 years

(8) For which of the following reason to prefer co-operative bank in taking loan?

Reasons Number Percentage%

Less formalities 14 20%
Effective service 24 34.28%
Low rate of interest 20 28.57%
Easy access (nearness) 10 14.28%
Any other 2 2.85%

For which of the following reason to prefer co-operative

bank in taking loan?

10 14
Less formalities
Effective service
Low rate of interest
Easy access (nearness)
24 Any other

Figure 7

According to the34% respondents main reason from preferring the co operative bank is the
effective service of the bank. According to them dealing of the staff in the bank is very good
that’s why they prefer cooperative bank compared to other bank. 29% respondents say low rate
of interest is the main reason for their preference. According to 20% staff of the bank do
everything for them so they have to follow very less formalities this is a reason for their
preference, 14% says bank is very near to their home that’s why they prefer it.

(9) Time lag in getting loan?

Time lag Number Percentage%

< week 14 20%
< 15 days 40 57.14%
< month 12 17.14%
> month 4 5.71%

Time lag in getting loan


< week
< 15 days
< month
> month


Figure 8

As shown in the graph according to the 57% of the respondents they get loan in less than 15


21% says loan is available to them in a week or less.

According to 17% loan is available within a month.

According to Only 6% of the respondents it takes more than a month to take loan from the

Cooperative bank .

(10)Which of the following is the most prominent problem experienced by you in

Problems Number Percentage%

Filling up of application 12 17.14%

Gathering required documents 22 31.42%

Non – cooperative attitude 14 20%
Time lag in getting loan 14 20%
Any other 8 11.42%

Which of the following is the most prominent problem

experienced by you in getting loan?

14 12

Filling up of application
Gathering required documents
Non – cooperative attitude
Time lag in getting loan

Figure 9

In the survey it comes to know that main problem faced by the customers in loan taking is
gathering required documents.31% of the respondents says that gathering required documents is
very difficult because they have to take all these documents from the Govt. offices and it takes a
lot of time. According to the 20% of the respondents problem is non-cooperative attitude of the
Govt. employee in providing information and time lag in getting loan are the main problems.17%
of the respondents faced the problem of filling of the application and 12%faced any other type of




1) Since agriculture is the main occupation in rural areas, major credit requirement was in
the form of crop loan which is covered under KCC limit in which borrower is free to use
the money for any purpose.

2) As the land is the main collateral taken for giving loans in the rural area, laborers who
didn’t possess any land faced great problem in getting loan from the corporative bank.

3) Time lag between submitting the loan application and receiving of loan amount is usually
as an average is less than 15 days.

4) The major problem experienced by borrowers was getting of required documents by the
Govt. officials like Patwari and the lawyer.

5) The money taken as a loan is most of time is used for the purpose it is taken but some
time it is used for the personal purpose by the loan taken.

6) Repayment trend was quite satisfactory because it was observed that the borrowers
actually believe that they can fresh loan only if they return previous loan.

7) Main reason for overdue as observed from respondents is that they used the money
borrowed for meeting their personal expenses in case of emergency.

8) Cost of borrowing is less form the rates used by the other commercial banks of the area.



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:

 Some employees were hesitant in providing complete information

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

 Lack of adequate time.



1) Usually bank officials do not enquire much after the loan has been granted , but their liberal
attitude in this regards leads to mis utilization of loans in the hands of the borrowers become
the major cause for non repayment of loans on time. So it is suggested that bank officials
should enquire that whether the loan is being used for the purpose taken or not.

2) KCC limit of agriculturist should be increased from time to time as per the increased
requirements due to the inflation.

3) Technology of the bank should be improved, as most of the cooperative banks are still not
using the computers in their offices. Facility should be provided by the cooperative bank.

4) Innovation need to be brought in the field of rural lending. If possible ATM facility should be
provided to the customers.

5) Major problem faced by borrowers is gathering the required documents from the related Govt.
offices so there must be a provision in these offices to provide the required documents as early
as they can.

6) The bank should explain clearly all the terms and conditions of loans that the customer wants
to avail in the local language and nothing should be concealed.

7) There should be complaint boxes installed in the bank that are opened weekly and proper
redressal of complaints are done.

8) Staff of the banks is also needed to be increased according to the increasing demand.



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.

Major loans are taken by the agriculturists of fulfilling their farming needs. Most of the loans are
distributed under the KCC limit by giving land as collateral. Time lag in getting loan is in more
than 50% cases below 15 days.

Repayment trend of the loans is good over the years; general reason for non repayment is funds
used for personal use. Most of the time funds are used for the purpose these are taken.

All the branches under the central bank Ropar are approximately able to achieve the targets set
for year. All are profit gaining over the years. Turnover per employee is also good for the bank.
To conclude, things have been moving in the right direction in ensuring effectiveness in rural
lending by the cooperative bank , but still much need to be done in the same direction in term of
the quantum by adapting to innovation in this field.







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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
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