INDEX

TITLE
SR.NO PAGE

 Executive Summary

1 Introduction of study

2 Company Profile

3 Objectives and Scope of study

4 Theoretical Background

5 Research Methodology

6 Data Analysis And Interpretation

7 Finding

8 Suggestions Recommendation

9 Limitations

10 Conclusion

Bibliography

Annexure
Abbreviations
Questionnaire

EXECUTIVE SUMMARY

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 EXECUTIVE SUMMARY

The report contains introduction to Banks, which includes past, present and future of banks and
challenges for banking industry in future. Banks plays the most important role in providing
various banking services. Earlier the banks were engaged in accepting and lending money. But in
the recent past the scope of services provided by the banks has increased. The growing
competition requires prompt and efficient services to the customers at reasonable cost. These
days batik aim to provide maximum satisfaction to their customers.

The next part of the report consist the knowledge about the cooperative banks in India. It
includes history of cooperative bank in indianite’s features and service provided by it in rural and
urban sector. The structure of cooperative bank in India is also includes in it.

Then a brief introduction of UNION BANK OF BANK LOAN POINT, NASHIK comes in
next part of the report which consist the history, management team and objective and scope. The
current financial position of the bank also includes in this part.

Then the meaning of certain terminology includes in this report these terms are related with the
topic for cash credit, hypothecation, secured loan, unsecured loan etc. the objective of this section
is only to make aware about certain terminology used by bank regarding loan facility.

The next section of report i.e. research methodology consist title of report, duration of training
session, objective and limitation of study etc. this section basically giving the outline of the
report.

Next section consist the loan and credit facility provided by bank. This section is to recover it,
actual position of bank in loan area, and recommendation and the suggestions for the
improvement.

Final section of report consist conclusion and bibliography.

INTRODUCTION OF STUDY

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 A loan is an arrangement between a lender and a borrower. The lender
gives money, property, or either asset to the borrower and borrower agrees to repay the
money with interest at some future point of time. There is usually a predetermined time for
repaying the loan and generally the lender bears the risk that the borrower might not repay the
loan. There are many different types and classes of loans each with their own set of rules and
terms.

Given the current interest rates and the likelihood that tae rate will go
up over the next year as the economy starts picking up, it is a good time to go in for a good
rate for a loan. The interest rates will go up as the economy improves and one needs to be
locked into a long-term low interest rate. If one has a personal debt, like from credit cards or
any other place, they should probably consider consolidating the debt. One will definitely get
a better rate than a credit card will offer. If one has many loans and debt, putting them
together into a larger amount allows one to negotiate a better rate.

A loan is based on a simple idea- someone gives you money and you
promise to pay it back, usually with interest. Since one must pay back the lender whether the
business is a fabulous success or a miserable failure, the entire risk of the new enterprise is
placed squarely on ones shoulders. But if you are confident about the prospects of a business
and one has the opportunity borrow money, a loan may be a more attractive source of money
than getting it from equity investor who will own a piece of a business and receive a share of
the profits. If the business succeeds as one hopes abd the person pays back the lender as
promised, one will reap all future profits there is no need to share them with investors.

Banks

The Indian banking system has a large geographic and functional

coverage. Presently the total asset size of the Indian banking sector is US $270 billion while
the total deposits amount to US $220 billion with a branch network exceeding 66,000
branches across the country. Revenues of the banking sector have grown at 6% CAGR over
the past few years to reach a size of US $15 billion. While commercial banks cater to short
and medium term financing requirements. This distinction is getting blurred with commercial
banks extending project finance. The total disbursements of the financial institutions in 2001
were US $14 billion.

Banking today has transformed into a technology intensive and

customer friendly model with a focus on convenience. The sector is set to witness the
emergence of financial supermarkets in the form of universal banks providing a suite of
services from retail to corporate banking and industrial lending to investment banking. While

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corporate banking is clearly the largest segment, personal financial services is the highest
growth segment.

The recent favourable government policies for enhancing limits of

foreign investments to 49% among other key initiatives have encouraged such activity.
Larger banks will be able to mobilise sufficient capital to finance asset expansion and fund
investments in technology.

Personal Loans Origination

Disbursals in 2004 were higher by 91% at Rs 243 crore, compared to Rs

127 crore in the year 2001. 84,986 units were financed in 2002, as compared to 38,069 units
in the previous year, an increase of 127%. The average ticket size of loans fell from Rs 33.4
K to Rs 28.6 K. Nineteen new personal loan branches were opened this year, and they
accounted for 25% of the total originations in the year 2002. New customers increased their
share in originations to 38% in 2004 (2001-24%), with account financed more than three
times that of 2003 at Rs 93 crore. The Auto, Two wheeler and Consumer durable products
serve as feeder products for new personal loans.

Existing customers accounted for 62% of the total amount financed this
year, while their share in 2001 disbursals was 76%. Conversions from existing loans
increased by 66% in terms of units, and 50% in terms of amount financed, as against the
previous year. Conversions from personal loans as a feeder product this year increased by
almost four times the amount in the year 2003, and this increase came from all locations.
Constitution of conversions by previous product in 2002 and 2003 is given below. The live
till date conversion ratio to eligible base for Auto, Two wheeler and Consumer durables
combined is 18%. The conversion rate for Two wheeler is highest at 12% while that of
consumer durables is 19%. The live till date conversion rate for Personal loan is 12%.

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 NAME: -UNION BANK OF INDIA.

ADRESS: -Branch: NASIK - SSI FINANCE BRANCH

1ST FLOOR, HARIYALI CHAMBERS,

NEAR DEEPALI NAGAR BUS STOP,

MUMBAI AGRA HIGHWAY,

NASIK - 422009 , MAHARASHTRA.

City: NASHIK
District: NASHIK
State: MAHARASHTRA

HEAD OFFICE: Union Bank Bhavan,

239 Vidhan Bhavan Marg,

Nariman Point, Mumbai - 400 021,

Maharashtra, India

BOARD OF DIRECTORS OF BANK:-

M. V. Nair Chairman & Managing Director

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 Rajkiran Rai G. Executive Director
Dr. Uttam Kumar Sarkar Shareholder Director
Dr. K. Ramesha Part Time Non Official Director
Shri. Raj kamal Verma Executive Director
Rakesh Sethi Executive Director
Shri. Kewal Handa Director
Shri Jayadev M. Shareholder Director
Dr. Madnesh Kumar Mishra Nominee Director

FEATURES:-

The main features of this bank is that-

 Well skilled and trained workers.

 To provide good facility
 To provide loan to every person of Society.
 To protect the people’s deposited amount up-to 342720Rs. Crore.
 To provide nomination facility for the locker and deposited amount.
 Locker facility available in the Urban & rural area’s 4196 branches
 To provide loans instead of gold & NSC
 The economical condition of the bank is very good.

AIM:-

 It is one of the bank which helps rural areas to an agriculture, for their social and
economical development.
 Develop close relationships with farmers and societies
 Transform ideas into viable and creative solution

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  Provide consistently high returns to shareholders,

VISION:-

 To improve the standard of living of the society.

 To provide maximum loan to the needed people.
 To improve the economic condition of the country

LOGO & SLOGAN: -The slogan of this bank is “Good people to bank with”

HISTORY

Union Bank of India (UBI) is one of the largest government-owned banks of India (the government
owns 63.44% of its share capital). It is listed on the Forbes 2000, and has assets of USD 13.45 billion. All
the bank's branches have been networked with its 6909 ATMs as on 30 September 2015. Its online
Telebanking facility are available to all its Core Banking Customers - individual as well as corporate. It
has representative offices in Abu Dhabi, United Arab Emirates, Beijing, Peoples Republic of China,

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 London and Shanghai, and branches in Hong Kong, Dubai, Antwerp and Sydney. The bank had 4196
branches in India as of 31 March 2016.

ESTABLISHMEN OF THE BANK:-

Union Bank of India (Union Bank) was registered on 11 November 1919 as a limited company
in Mumbai and was inaugurated by Mahatma Gandhi. At the time of India's Independence in
1947, Union Bank only had four branches - three in Mumbai and one in Saurashtra, all
concentrated in key trade centres. After Independence Union Bank accelerated its growth and by
the time the government nationalised it in 1969, it had grown to 240 branches in 28 states.Then
in 1985 Union Bank merged in Miraj State Bank, which had been established in 1929, and
which had 26 branches. In 1999 the Reserve Bank of India requested that Union Bank
acquire Sikkim Bank in a rescue after extensive irregularities had been discovered at the non-
scheduled bank. Sikkim Bank had eight branches located in the North-east, which was attractive
to Union Bank.

Union Bank began its international expansion in 2007 with the opening of representative offices
in Abu Dhabi, United Arab Emirates, and Shanghai, Peoples Republic of China. The next year,
Union Bank established a branch in Hong Kong, its first branch outside India. In 2009, Union
Bank opened a representative office in Sydney, Australia.

At present, the offshore banking operations of Union Bank of India are led by its branches in
Hong Kong and newly opened branch in Dubai at Dubai International Financial Centre

BRANCHES:- There are mainly 19 branches of Bank in whole district i.e.

NASIK CITY SERVICE BRANCH – NASHIK

PAWAN NAGAR – NASIK SHAHADA

SAUBHAGYA NAGAR – NASIK PANCHVATI, NASIK

NASIK - SSI FINANCE BRANCH PIMPALGAON BASWANT

MANMAD R.O.NASIK

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 M.G. ROAD NASIK GANGAPUR ROAD

DEOPUR AMBAD

JAIL ROAD NASIK MUMBAI NAKA-NASIK

DEPARTMENT:-

There are mainly 10 members in this bank one is the branch manager Mr. C.D.Gavit ,
As well as clerk of this branch, Inspection Officer, Agriculture Land Inspection Officer . & also
there are two securities.

DISTRIBUTION NETWORK:-

There are mainly branches UNION BANK OF INDIA all over in India which are distributed in
the different areas. Some branch in Nashik

NASIK CITY SERVICE BRANCH – NASHIK

PAWAN NAGAR – NASIK SHAHADA

SAUBHAGYA NAGAR – NASIK PANCHVATI, NASIK

NASIK - SSI FINANCE BRANCH PIMPALGAON BASWANT

MANMAD R.O.NASIK

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 M.G. ROAD NASIK GANGAPUR ROAD

DEOPUR AMBAD

JAIL ROAD NASIK MUMBAI NAKA-NASIK

Customers from various locations are using Telephone Banking for agriculture guidence.
The Bank's expansion plans take into account the need to have a presence in all industrialand
commercial centers where its corporate customers are located as well as the need to build a
strong retail customer base for both deposits and loan products.

SERVICES:-

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 saving A/c

Shares salary A/c

Insurance deposits

current
ATM'S
A/c

debit card loans

ORGANIZATIONAL CHART

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 OBJECTIVE
 To study of various types of loan providing by bank.

 To study different loan scheme in bank

 To study the loan sanctioning policy of the bank.

 To study change in interest rate as per different loan scheme.

 To study various formalities required to get various types of loans.

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 SCOPE OF STUDY Formatted: Left, Right: -0.38"

Following research is Ltd only for banking sector. There is a scope to introduce any factor. This
techniques also use in finance, management, cost, accountancy and same audit report. This
research only limited in a particular area.

THEORATICAL BACKGROUND

BANKING: -

Banking in traditional sense is the business of accepting deposits of money from pubic for the
purpose of lending and investment. These deposits can have a distinct feature like being
withdrawn able by cheques, who know other financial institution can offer. In addition, Bank
also offers financial services, which include.

1) The issue of the demand draft and travelers cheques

2) Credit cards
3) Collection of cheques, bill of exchange
4) Safe deposit lockers

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 5) Custodian services
6) Investment and insurance services

The business of the banking is highly regulated since banks deals with money offered to them by
the public money are one of the prime responsibilities of any bank. That is way banks are
expected to be prudent in their leading and investment activities. Every bank has a compliance
department, which is responsible to ensure that all the services offered by the bank and the
processes followed are in compliance with the local regulations and the bank corporate policy.

The major regulation and act govern the banking business are:-

1) Banking regulation act 1949

2) Foreign exchange management 1999
3) Indian contract act1932
4) Negotiable instrument act 1881

Bank lends money either for productive purpose to individuals, firms, corporate etc.for buying
house property, car and other consumer durables and for investments purpose to individuals and
the others. However banks do not finance any speculative activity. Lending is the risk taking. The
depositors of banks are also assured of safety of their money by deploying some percentage of
deposit in statutory reserves like SLR & CLR

BANKING STRUCTURE IN INDIA:-

India has a well developed banking system. Most of the banks are in India were founded by
Indian entrepreneurs and visionaries in the pre- independence area to provide financial assistance
to trader, agricultures and budding Indian industrialist\s The origin of banking in India can be
traced back to the last decades of the 18th century. The general bank of India and the bank of
Hindustan, which started in 1786, were the first bank in India. Both are the banks are now
defunct. The oldest bank in existence in India at the moment is the state bank of India. The state
bank of India came in to existence in 1806.

The role of central bank in India is looked by the Reserve bank of India,
which is 1935 formally took over these responsibilities from them imperial bank of India.

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 Reserve bank of nationalizes in 1947 and was given broader powers in 1969, 14 largest
commercial banks are nationalizes followed by six next largest in 1980. But with adoption of
economic liberalization in 1991, private banking was again allowed.

Banking means accepting for the purpose of lending or investment of deposit of money from the
public repayable on demand or otherwise one withdraw able by cheque, draft or otherwise.

NATIONALISATION

They got issued and ordinance and nationalized the 14 largest commercial bank it effect from the
midnight of july 19 1969.jayprakash Narayan, a national leader of India described a step as a
“masterstroke of political sagacity. Within two weeks of the issue of the ordinance the parliament
passed the banking companies (acquisition and transfer of undertaking) bills and it’s received the
presidential approval on 9 august on 1969.

A second dose of nationalization of six more commercial banks followed in 1980.

The stated reason for the nationalization was to give the government of more control of credit
delivery. With the second dose of nationalization the GOT controlled around 91% of the banking
business of India. Later on in the year 1993 the government merged new bank in India with
Punjab national bank. It was the only merger between nationalized bank and resulted in the
reduction of the number of nationalized banks grew at the space of around 4% closer to the
average growth rate of the Indian economy,

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 LIBERALIZATION:-

In the early 1999s thenNarsimha Rao government embarked on a policy of

liberalization. licensing a small number of private banks these came to known as a new
generation tech-savvy and included global Trust bank( the first of new generations banks to be
set up ) which later amalgamated with oriental bank of commerce, Axis bank (earlier as UYTI
bank) ICICI bank and HDFC bank. This move along with rapid growth in the economy of India
revitalized the banking sector in India which has seen rapid growth with strong contribution from
all the three sectors of banks, private banks and foreign banks. The next stage for the Indian
banking has been set up with the proposed relaxation in the norms for foreign direct investment,
when all foreign investors in banks may be given voting rights which could exceed the present
cap of 10% at present it has gone up to 74% with some restrictions.

The new policy shook the banking sector in India completely bankers till this time were used to
the 4-6-4 method (borrowed at 4% lend at 6% go home at 4%) of functioning. The new wave
ushered in a modern outlook and tech –savvy method of working for traditional bank all this led
to the retail boom in India. People are not just demanded more from their banks but also received
more.

Currently (2014) banking in India is generally fairly mature in terms of supply product range and
reach even though reach in rural India still remains a challenge for the private sector and foreign
banks in terms of quality to assets and capital adequacy Indian banks are considered to have
clean strong and transparent balance sheet relative to other bank in comparable economies in its
region. The Reserve bank of India is autonomous body with minimal pressure from the
government the state policy of the bank on Indian rupee is to manage volatility but without any
fixed exchange rate and this has mostly been true.

With the growth in Indian economy expected to be strong for quite for some time especially in its
services sector the the demand for banking services specially retail banking mortgage and
investment services are expected to be strong. One may also expect M & As takeovers assets
sales.

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 INDIAN BANKING INDUSTRY:-

The Indian banking system has the Reserve bank of India (RBI) as the apex body for all matters
relating to the banking system. It is the combination of the banks of India and bankers to the all
other banks as well

The Indian banking industry which is governed by the banking regulation act of India1949 can
be broadly classified in to two major categories scheduled banks and non-scheduled banks.

1. Scheduled banks:-
These banks must have paid up capital and reserve of amount less than Rs 5000000 they must
satisfy the RBI than its affairs are not conducted in a manner detrimental to the interest of its
depositors, these are further classified is followed
1 state corporate banks
2 commercial banks
Scheduled banks comprise commercial banks and the co operative banks in term of ownership
commercial banks can be further grouped into nationalized banks the state bank of India and the
group banks regional rural bank and the private sector bank (the old new domestics and foreign)
these banks have over 67000 branches spread across the country in every city and villages of all
nook and corners of the land.

2 Non -scheduled banks:-

These are banks which are not included in the second scheduled of the banking regulations act
1965 it means they do not satisfy the conditions laid down by that schedule. They are further
classified as back

1 central co-operative banks and primary credit societies

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 2 commercial banks

COMMERCIAL BANKS:-

Commercial banks in India are broadly categorized into scheduled commercial banks and
unscheduled commercial banks. The scheduled commercial banks have been listed under the
second schedule of the Reserve Bank of India act 1934 the selection measure for listing a bank
under the second schedule was provided in section 42 (60 of the Reserve Bank of India act 1934
the modern commercial banks in India cater to the financial needs of different sectors. The main
functions of the commercial bank comprise:-

1) Transfer of funds
2) Acceptance of deposits
3) Offering those deposits as loans for the establishment of industries
4) Purchases of houses, equipments, and capital investments purposes etc.
5) The bank is allowed to act as trustee. on account of the knowledge of the financial market
of India the financial companies are attracted towards them to
6) Act as trustee to take responsibility of the security for the financial instruments like a
debenture.
7) The Indian government presently hires the commercial banks for various purpose like tax
collection and refund payment of pensions etc

Joint stock banks can be divided into two groups; the scheduled and non- scheduled banks

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 CO-OPERATIVE BANKS:-

Co-operative banks are small sized unite organized in the co-operative sector which operate both
in urban and non urban sectors. These banks are traditionally centered on communities’ localities
and workplace group and they essentially lend to small borrowers and businesses.

The urban co-operative bank (UCBs) though not formally refers to primary co-operative banks
located in a urban and semi urban areas. These banks until 1996 could only lent for non
agriculture purpose.

However today this limitations is not longer prevalent. While the co-operative banks in rural area
mainly finance agriculture based activities including farming, cattle, milk, hatchery, personal
finance etc along with some small scale industries and self employment driven activities, the co-
operative urban areas mainly finance various categories of people for self employment, industries
small scale units and home finance.

Co-operative bank in India is registered under the co-operative societies act. The co-operative
bank also regulated by the RBI. They are governed by the banking regulations act 1949 and
banking laws (co-operative societies) Act 1965.

These banks provide most services such as currents accounts, safe deposits lockers loan and
mortgage to private and business customerfor middle class user for whom a bank is where they
can save their money facilities like internet banking is not very important

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 Co-operative bank functions on the basis of ‘no profits no loss’ co-operative banks as a principle
do not per sue the goal of profit maximization. Therefore these banks do not focus on offering
more than the basic banking services so co-operative banks finance small borrowers in industrial
and trade sectors besides professional and salary classes.

Co-operative banks differ from stockholder banks by their organization their goals their values
and their governance.In most countries they are supervised and controlled by banking authorities
and have to respect prudential banking regulation which put them at the level playing field with

stockholder banks. Depending on countries this control and supervision can be implements
directly by set entities or delegated to a co-operative federation or a central body.

These are two main categories of the co-operative banks.

A) Short term lending co-operative oriented banks:-

Within this category there are three sub categories of banks viz co-operative bank district co-
operative banks and primary agriculture co-operative societies.
B) Long term lending oriented co-operative banks:-
Within the second category there are land development banks at three levels state levels
district levels and village level..

Meaning of CIBIL

CIBIL or (Credit Information Bureau India Ltd) to collect the data from various types of credit
grantors and then share the same within the group Banks, Financial Institutions, Non Banking
Financial Companies, Housing Finance Companies & Credit Card Companies

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LOANS AND ADVANCES

In finance, a loan is a debt provided by one entity (organization or individual) to another entity at
an interest rate, and evidenced by a note which specifies, among other things, the principal
amount, interest rate, and date of repayment. A loan entails the reallocation of the subject asset(s)
for a period of time, between the lender and the borrower.

In a loan, the borrower initially receives or borrows an amount of money, called the principal,
from the lender, and is obligated to pay back or repay an equal amount of money to the lender at
a later time. Typically, the money is paid back in regular installments, or partial repayments; in
an annuity, each installment is the same amount.

The loan is generally provided at a cost, referred to as interest on the debt, which provides an
incentive for the lender to engage in the loan. In a legal loan, each of these obligations and
restrictions is enforced by contract, which can also place the borrower under additional
restrictions known as loan covenants. Although this article focuses on monetary loans, in practice
any material object might be lent.

Acting as a provider of loans is one of the principal tasks for financial institutions. For other
institutions, issuing of debt contracts such as bonds is a typical source of funding

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 Advance on other hand is a credit facility granted by the bank.

Utility of loans and advances:-

Loans and advances granted by commercial banks are highly beneficial to individuals, firms,
companies and industrial concerns. The growth and diversification of business activities are
affected is large extent through bank financing. Loan and advances granted by the banks help in
meeting short term and long term financial need of business enterprises.

We can discuss the role played by banks in the business world by way of loans and advances as
follows:-

Loan and advances can be arranged from banks in keeping with the flexibility in business
operations. Trader may borrow money for day to day financial needs availing of the facility of
cash credit bank overdraft and discounting of the bills. The amount raised as loan may be rapid
within a short period to suit the convenience of the borrower. Thus business may be efficiently
with borrowed fund from banks for financing it working capital requirement,

a) Loans and advances can be arranged from banks in keeping with the flexibility in business
operations. Traders may borrow money for day to day financial needs availing of the facility of
the cash credit banks overdrafts and discount of the bills. The amount raised as loan may be
repaid within a short period to suit the convenience of the borrower. The business may be run
efficiently with borrowed funds from banks for financing it working capital requirements.

(b) Loans and advance are utilized for making payment of current liabilities, wages and salaries
of employees, and also the tax liability of business.

(c) Loans and advances from banks are found to be ‘economical’ for traders and businessmen,
because banks charge a reasonable rate of interest on such loans/advances. For loans from money
lenders, the rate of interest charged is very high. The interest charged by commercial banks is
regulated by the Reserve Bank of India.

(d) Banks generally do not interfere with the use, management and control of the borrowed
money. But it takes care to ensure that the money lent is used only for business purposes.

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 (e) Banks loans and advances are found to be convenient as far as its repayment is concerned.
This facilitates planning for future and timely repayment of loans. Otherwise business activities
would have come to a halt.

(f) Loans and advances by banks generally carry element of secrecy with it. Banks are duty-
bound to maintain secrecy of their transactions with the customers. This enhances people’s faith
in the banking system.

Borrowing Rate and Lending Rate

People make their funds available to the banks by depositing their ‘savings’ in various types of
accounts. In other words, bank funds mainly consist of deposits from the public though banks
may also borrow money from other institutions and the Reserve Bank of India. Bonds thus
mobilize funds through its deposits. On public deposits the banks pay interest and the rates of
interest vary according to the type of deposits. The borrowing rate refers to the rate of interest
paid by a bank on its deposits. The rates which the banks allow depend upon the nature of deposit
account and the period for which the deposits are made with the bank. No interest is generally
paid on current account deposits. The rate is relatively lower on savings account deposits. Higher
rates ranging from 6% to 12% per annum are paid on fixed deposit accounts according to the
period of deposit. Banks also borrow from other institutions as well as from the Reserve Bank of
India. When the Reserve Bank of India lends money to commercial banks, the rate of interest it
charges for lending is known as ‘Bank Rate’.

The rate at which commercial banks make funds available to people is known as ‘Lending-rate’.
The lending rate also varies depending upon the nature of loans advances. The rates also vary
according to the purpose in view. For example if the loan is sanctioned for the purpose of
activities for the development of backward areas, the rate of interest is relatively lower as against
loans and advances for commercial/business purposes. Similarly for smaller amounts of loan the
rate of interest is higher as compared to larger amounts. Again lending rates for consumer
durables, e.g. loans for purchase of two-wheelers, cars, refrigerators, etc. are relatively higher
than for commercial borrowings.

However, the Reserve Bank of India from time to time announces changes in the interest-
rate structure to regulate the lending of funds by banks. Different rates of interest are prescribed
for various categories of advances, such as advances to agriculture, small scale industries, road

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 transport, etc. Graded rates of interest are prescribed for backward areas. Lower rate is normally
charged from agencies selling food-grains at fixed price through Govt. approved outlets. Lastly,
lower rate of interest is charged for loans granted to persons belonging to ‘weaker sections of the
society’.

Lending of Money

Commercial banks lend money in four different ways: (a) direct loans, (b) cash credit, (c)
overdraft, and (d) discounting of bills. These are briefly discussed below:

a) Loans
Loan is the amount borrowed from bank. The nature of borrowing is that the money is
disbursed and recovery is made in installments. While lending money by way of loan, credit is
given for a definite purpose and for a pre-determined period. Depending upon the purpose and
period of loan, each bank has its own procedure for granting loan. However and period of loan,
each bank has its own procedure for granting loan. However the bank is at liberty to grant the
loan requested or refuse it depending upon it show cash position and lending policy.
 Demand loan and
 Tern loan
b) A demand loan is a loan which is repayable on the demand by the bank. In other words, it
is repayable at short notice. The entire amount of demand loan is disbursed at one time and the
borrower has to pay interest on it. The borrower can repay the loan either in lump some (one
time) or as agree with bank for example if it so agree the amount of loan may be repaid in
suitable installments. Such loans are normally granted by the banks against security.
The may includes the material or good in stock share of company or any other asset. Demand
loans are raised normally for working capital purpose like purchase of row material, making
payments of short term liabilities.
c) Term loans: Medium and long term loan are called term loans. Term loans are granted for
more than a year and repayment of such loan is spread over a longer period. The repayment is
generally made in suitable installments of a fixed amount. Term loan is required for the purpose
of starting a new business activity, renovation, modernization, and expansion, extension of
existing units, purchase of plant and machinery, purchase of a land for setting up a factory,
construction of factory building or purchase of either immovable asset. These loans are generally
secured against the mortgage of land, plant of machinery, building and the like.

Long term and short terms loans:-

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 Commercial bank grant loan for different period long, -short and medium term for different
purpose.

 Short terms loans:-

Short term loans are granted by banks to meet the working capital need of business. The working
capital needs refer to financial needs for such purpose as purchase of row materials, payment of
wages, electricity bill taxes etc.such loan are granted by the banks to its borrower to be repaid
within a short period of time not exceeding 15 months.
Short term loan are normally granted against the security of tangible assets like goods in stock,
share, debenture etc. the rate of interest charge on a short term loans range from 12% to15% p.a.
 Term loans:-
Medium and long term loans are generally known as tern loans. This loan can grant for more
than 15 months. In case of medium term loan, the period range from 15 months to less than 5
years. Medium term loan are generally granted for heavy repairs expansion of existing units,
modernization/renovacation etc. such loans are sanctioned against the security of immovable
assets. The normal rate of interest range between 12% to 18% depending upon the period,
purpose, nature and the amount of the loan. Though bank may grant long term loans they avoid
granting loan for more than 5 years.

Nature of loans:-
To ensure the safety of funds lent, the first and most important factor considered by a bank is the
capacity of borrowers to repay the amount of loan, the bank therefore, relies primarily on the
character, capacity and financial soundness of the borrower. But the banks can hardly afford to
take any risk in this regard and hence it also has the security of tangible assets owned by
borrower. In case of borrower fails to repay the loan, the bank can repay the amount by attaching

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 the assets. It can sell the assets offer as security and realize the amount thus from the view point
of security of loans we can divided the bank into the two categories.
a) Secured and
b) Unsecured.
Unsecured loans are those loans which are not covered by the security of tangible assets such
loan are granted to firms/institutions against the personal security of the owner, manager and
director.
Secured loans are those which are granted against the security of tangible assets, like stock in
trade and immovable property. Thus while granting loan against the security of some assets, a
charge is created over the assets of the borrower in favor of the bank this enables the banks to
recover the dues from the customer out of the sale proceeds of the assets in case of borrower fails
to repay the loan. There are various types of securities which may be offered against the loans
granted but all of those are not acceptable to the banks are following:
 Tangible assets such as plant and machinery, motor van etc
 Document of title to goods, like railway receipt, bills of exchange etc
 financial securities (share and debenture)
 life insurance policy
 real estate (land and building)
 fixed deposit receipt (FDR)
 Gold ornaments, jewellery etc.

TYPES OF LOANS

Personal Loan

Union Personal:

Salaried Individuals 14.40%

Under Tie up (BSNL Empoylees) 13.40%
For Housing Loan borrowing 11.60%
Non Tie up Govt Employees(Fixed) 13.50%

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 Non Salaried Individuals 14.40% (Fixed)
For C-DAC Employees 12.40% (Fixed)
Employees 12.85%
(Defence, Officers in all India Services, Top
executives, GOI ministries, etc)
VEHICLE LOAN

Union Miles:

New 4 Wheeler MCLR+0.50% = 9.95%

New 2 Wheeler 14.40% (Fixed)
Old 4 Wheeler (Not older than 3 yrs) MCLR 3.50 = 11.85%

EDUCATIONAL LOAN:-

Union Education:

Male Female

Upto 4 Lac 12.60% 12.10%

Above 4 lac to 7 lac 12.35% 11.85%
Above 7.5 lac 11.60% 11.10%

Union Education Skill Development:

MALE 12.60%
Female 12.10%
Home Loan

Union Home/ Paradise

Floating rate
Upto to 75 lac MCLR + 0.10% =9.55%
Above 75 lac MCLR +0.15% =9.60%
Fixed Rate 5 Year

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 Upto 30 lac 11.40%
30 lac to 50 lac 12.40%
50 lac to 200 lac 12.65%

Union home- Smart Save

Upto 75 lac 9.80%

Above 75 lac 10.10%
Union Health

Fixed 12%
Floating 12.60%

Union Mortgage

Rate of Interest 12.35%

RESEARCH METHODOLOGY

Research is a purposive investigation of hypothetical propositions. Research as a process

involves defining and refining problems, hypothesis formulation organizing and evaluating data,
deriving deductions, inferences and conclusions, after careful testing.

DEFINITION OF RESEARCH

“Research concerns itself with obtaining information empirical observation that can be used to
systematically develop logically related propositions so to attempt to establish casual relationship
among variables.”

Research is basically searching something for development purpose or some innovations to be

done in the existing system. Research is defined as “human activity based on intellectual
application in the investigation of matter”..

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 TYPE OF RESEARCH

DESCRIPTIVE RESEARCH

All are the types of the research and in my project Descriptive research is done. Descriptive
research is also known as non- experimental research, descriptive research is designed to describe
something, it describes record, analyses and interprets conditions that exist, it allows both
implicit and explicit hypothesis to be tested depending on the research problem.

DATA COLLECTION

Data means facts. Data are those things which are certainly known and task of data from which
conclusions may be drawn.

METHODS OF DATA COLLECTION:

 PRIMARY DATA
 SECONDARY DATA

PRIMARY DATA:

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 Primary data is the data collected to solve problem or take advantage at an opportunity on which
decision is pending. In this project work the primary data was collected through conversation
with managers and officers of the bank.

SECONDARY DATA:

This is the existing data, collected from known sources. Some of the secondary means of data
collection are:

1. Internet
2. bank data sources
3. Required data for making of project report has been collected from Internet
4. Magazine
5. Bank Book
6. Brochures

The basic and foremost intention of research on “LOANS” is to know the loan department
trends and techniques used to sanction the loan

Sampling Method (Area Sampling)

A method of sampling when no complete frame of reference is available. The total area under
investigation is divided into small sub-areas which are sampled at random or by some restricted
random process.

Sample Size – 09 cases

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 Process of various loan
Personal Loan
Bank First Parameter
Criteria
Min. Age 21 yrs
Min Income 4000-20000
Max Loan Amt 50 Lac

Bank Second Parameter

• Pan card

• Light & Phone Bill

Documents
• IT Return

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 • Bank Passbook

Bank Third Parameter

CIBIL Score
(+ve)

CIBIL Score (-
ve)

In these parameter bank checks CIBIL score either Positive or Negative.

With the help of this score the individual or applicant is eligible. If the
score is below 600 points then the individual is defaulter and if the score
is above 600 points then the individual/ applicant is capable.

Bank Fourth Parameter

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 After all this bank Inspection the loan file is send for login in Union
Bank of India System. After login is done then the loan is sanctioned and
cheque is hand over to applicant or individual

Gold Loan Process

Bank First Parameter

Min 21 yrs And Max 70 yrs Age

Criteria Self Employed, Professional/Non

Professional

Framer, Traders, Salaried etc

Bank Second Parameter

• Two Photograph

• Gold Purchased Bill/ Invoice

Documents
• ID Proof-
Pan Card , License, etc.

• Address Proof- Ration Card,

Rent Agreement

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 Bank Third Parameter
In this bank verify all the document which is attach with loan
application. Not only single person check the document, it is check by
sale executive of gold loan than after it is check by loan dept manager
then after it is send to bank gold smith to do valuation of gold. After
valuation of gold by gold smith bank sanction 80% loan to customer

Submit Doument

Verifiaction of Doument

Gold of Individual is sent to verification

Bank Gold Smith Does Verification (Weight,

purity,Hall mark,etc)

After Verification and Checking by Gold

Smith of Bank Loan is Sanction

After all this process bank sanction the loan i.e 80% . Loan Sanction
amount is transfer to that customer bank account

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Car Loan Process: Bank First Parameter

Minimum 21 years of age

Income eligibility based on

latest salary slip and Form 16

Minimum Net Annual Salary of Rs.

Criteria 2,40,000 p.a. for all approved car
models

Minimum of 1 year
continuous employment

Maximum 70 years of age at

maturity (conditions apply)

Bank Second Parameter

Age proof

ID proof

Application form

Photograph

Document Residence proof

Income proof

Bank statement

Signature verification proof

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 Pro-forma Invoice or Rate List

Process Of Car loan

Very first process is the customer has to take a standard quotation for
a authorized car dealer in a printed form with a stamp of that showroom
which ever customer want to purchase i.e. Two wheeler or Four wheeler
After that customer has to submit the quotation and all his document
which is mention in above diagram( while verifying the document at the
same time the CIBIL score is also seen by loan dept)
Then Bank Inspection officer contact to showroom for checking that
showroom really issued the quotation to that customer (this checking is
done because fraudulent activity are more now-a-days
After verification document and showroom bank send that file for
login at that time also loan dept checks all document and quotation , after
doing all verification bank does its login. After 30 days of login the loan
is sanction by bank
Bank gives DD (Demand Draft) against showroom at the same time
bank also inform to customer

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Process

Car Quotation

Customer Document to
Bank

Bank verification
(Document,CIBIL score,etc)

Cross check with

Showroom

DD Against Showroom

Finally Customer Gets

there Dream Car/ Bike

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Process For Home Loan

1) Documentation :-
Application Form
Credit Information
ID proof
Latest Photos

i) Salaried Person:- Salary Slip (3 to 6 months)

Salary A/c Bank Statement
CA certified IT Return(If taxable income is there)

ii) Businessmen:- Shop Act/ Business Licenses

Bank Statement Current / Saving a/c (A/c in which
business transaction Is done)

CA certified IT Return (2 to 3 yrs)

(All document is verified with the original document , an after that bank accept the
Xerox document.. After this bank start work either same day or next day)

2) Customer Point Verification:-

i)Residence Verification :- Surprise visit by bank inspection officer to

customer home on 06/06/2016. In this visit bank conform whether customer is
really leaving there or not, and also asked to neighbours how long customer is
leaving in that house.

ii)Employment Verification :- Here also surprise visit to work place is

done on same day i.e 06/06/2016.

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 iii)Document Verification :- After verification of original document.
Bank accept xerox copy of all document

Bank statement is verified by bank to that particular bank of customer & also IT
returns are checked by bank

3) CIBI Score is check (Out 900):-

700+ is good
EMI & Pre Loans can be check
Also can check running Loans

(Not every time we can get information of credits & Loan because same time bank
or finance company not p& Credit is also checked in bank Stament)

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 4) Repayment capacity :-
Salary person 55% is repayment capacity after tax
deduation

Example Gross salary 20000

(-) Prof. tax 200
(-) PF 800
-------------
Net Salary -- 19000

Calculate on Gross Exp. :- 8910

45% Amt available for Repayment 19800

(-) 800
(-) 8910
-------------
10090

Less : (Previews Loans) 1090

(Insurance Etc)

----------

Repayment Amt :- 9s000

Elible Amt In Lac = Repayment Amt / Per Lac EMI

5) Legal Opinion by Advocate

1) 7/12 Extract
2) 6D Mutation Entry verification
3) Transfer document
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 4) Final Report
5) Title deed are verified with certified Xerox copy’s

6) Valuation report :- In this bank inspection officer visit to property

to check this thing which is given below. This visit made on 21/06/2016

Commencement certificate

Approved Building Plan

Architect consummation (life of Building)

Final report (Value, life of building)

7) Sensation of Loan:-
Sensation of loan in bank only but not proceed to
customer.

8) Mortgage
A) Simple
(Deposit is not compulsory of title deed, but generally it is taken)

B) Equitable
(Deposit of title deed can be created in notified areas)

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 Bank does not disclose about title deed is not compulsory

Notice of intimation for equitable mortgage is to registered with respective sub

registrar authority within 30 days from the date of creation of equitable mortgage.

9) Final disbursement loan by cheque RTGS

10) Utilization of funds:-

1) Payment receipts
2) Occupancies certificate or letter

11) Post disbursement inspection

(Verification of property is given to borrower by seller)

Case 1

Client Vinod Umesh Gupta

Occupation Working in WNS Nasik

Loan Personal Loan
Amount 200000
Date 28/05/2016
CIBIL Score 350 points
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 Interpretation 10 EMI of SBI was not paid,
So loan was not Sanction

Case 2

Client Lalit Sharma

Occupation Working in Samraat Group,Nasik
Loan Gold Loan
Amount 72000
Loan sanction 80%
Loan Mortgage 25 grams
Interpretation 56000

Case 3

Client Kunal Patil

Occupation Work in PWD as a Clerk
Loan Car Loan
Amount 880000 (Swift zdi)
Date 28/05/2016
CIBIL Score 650 points
Interpretation Full Loan was sanction after

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 30 days 28/06/2016 because the
CIBIL score was good
(All Detail are in loan Application Form)

Case 4

Client Mahaveer Ghogre

Occupation RM in Nagarjuna fertilizers
Loan Car Loan
Amount 1965000 Innova 2.4 l L VX MT
Date 29/05/2016
CIBIL Score 865 points
Interpretation Full Loan was sanction after
30 days 29/06/2016 because the
CIBIL score was good

Case 5

Client Devidas Tukaram Bagul

Occupation Maharashtra Police (Inspector)
Loan Home Loan
Amount 15 Lac
Date 03/06/2016
Payment Rs 28626
Addition Income (House Rent) Rs 10000
Mortgage Property Agriculture land Plot Size 11 acres
Survey no.29/102, Baratpada, Tal
Kalvan, Nashik
Loan Amount Sanction Rs 1152000
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 CIBIL Score 750 Point
Interpretation As bank had sanction his loan
Because the CIBIL score of
Mr. Bagul was positive and
Mortgage property valuation was
more than Loan

Case 6

Client Nikhilesh Kale

Occupation Account in KTHM College
Loan Car Loan
Amount 135000 (TATA NANO)
Date 01/07/2016
CIBIL Score 636 point
Interpretation The client had submitted the
document and quotation with
bank. After that bank had
done verification but due to my
internship period was over so

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 this case is incomplete
(All Detail are in loan Application Form)

Case 7

Client Rahul Lawate

Occupation ASM in Birla Cement
Loan Car Loan
Amount 1200000(Verna Fluid)
Date 05/07/2016
CIBIL score
Interpretation The client had just submitted the
document and quotation with
bank
(All Detail are in loan Application)

Case 8

Client Amol Bhalerao

Occupation Genmark Pvt Ltd
Loan Personel Loan
Amount 450000
Date 07/07/2016
CIBIL score
Interpretation The client had just submitted the
document and quotation with
bank

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 Case 9

Client Anuj Chabbra

Occupation Lear Pvt Ltd
Loan Gold Loan
Amount 182000
Date 07/07/2016
Interpretation The client had just submitted the
document and gold with
bank.

Finding

 Documentation of home loan are very less, more verification should be done.
 Verification of asset are properly should be done by that particular specialist
person. For example Agriculture land has to verify by any BSC Agri person, Any
house or home should be verify or should be evaluate by any Civil Engg.
 Sanctioning process are very lengthy
 Interest should be stable , it should not change frequently
 In Gold loan process bank just ask document i.e Invoice copy. But bank does not
verify this invoice. It should be verify by bank
 The car loan is very easy and simple but the sanctioning process period should be
short

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 Suggestions

 The process of home loan is very lengthy it should be shorten. In home loan
process step 6 i.e Valuation Report gets to bank after 7 days this can be decrease to
3 days

 The Gold loan should be shorten, gold loan process hardly needs 4-5 hours. But
bank sanction gold loan in 2 days

 Educate the customers regarding the process of loan sanctioning

 Union Bank Of India must issue the letter of clearance immediately on the payment
of the last EMI, as this help to gain customer satisfaction

 Interest rates and processing charges have to fixed and competitive, so it also can
attract the customers and customer will not think much while taking a loan if the
interest rates are fixed and competitive

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 Conclusion

After the completion of the study I would like to conclude the following points:-

 Executives are the frontline employees of the organization so they have to be

trained and polite
 Customer requirements :- Low interest rate
Low cheque bounce charge,

Proper customer care,

Better service facility,

Clear and transparent information about the loan

 Most of the customer are getting loan in time(i.e. with in the time promised by
Union Bank Of India

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 BIBLIOGRAPHY
Union Bank Annual Report

I M. Pandey : Vikas Publication 2008 ( financial management)

Website

www.unionbankofindia.com

Wikipedia

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