SL - No SL - No Chapter-I Introduction: "A Study On Various Loan Offered by CPSSN Bank at Gangavathi"

“A STUDY ON VARIOUS LOAN OFFERED BY CPSSN BANK AT GANGAVATHI”
CONTENTS
Sl.No CHAPTER SL.NO
CHAPTER-I INTRODUCTION
 Introduction
 Objectives of Study
1 2-5
 Research methodology
 Limitation of the Study
CHAPTER-II PROFILE
2  Bank profile 6-12
 Objectives
CHAPTER-III
3 13-18
 THEORETICAL BACKGROUND
CHAPTER-IV
FINANCIAL ASSISTANCE BY CPSSN
4 19-35
 Types of loans offered by CPSSN
 Guidelines
CHAPTER-V
5 36-46
 Data analysis and Interpretation
CHAPTER VI
 Findings
6 47-50
 Suggestions
 Conclusion
ANNEXURE
7  Questionnaire 51-53
 Bibliography
“Department of PG Studies & Research in Commerce” V.S.K.U. P.G. Center Koppal Page 1
CHAPTER-I
INTRODUCTON
 Introduction Project.
 Objectives of Study.
 Research methodology.
 Limitation of the study.
INTRODUCTION
The main objective of the study is to have an exposure to the corporate world to
understand how really business organizations operate. As the study is made on the study is
made on the “SHRI CHANNABASAVA PATTINA SOUHARDHA SAHAKARI
NIYAMIT [CPSSN]” co-operative society which is a co-operative banking finance
company and there was a need to know about how they manage their loans and advance .
In Gangavathi, presently CPSSN society is one of the leading co-operative societies.

This is local bank. All people will know about the bank. I choose the topic about loans and
advances because some people don’t know what types of loans are given by the bank; what
types of document they maintain. Finance is one of the powerful strength to every person so
loans and advances are also one type of the strength or assistance to people who want that.
Finance is one of the powerful strength to every person. The primary function of any
financial intermediaries is to facilitate the allocation and employment of economy resources.
The financial intermediaries, by acting as live links between those who are able and willing to
save and those who are able and willing to invest productively, influence the economic
activities of the economy the main function of the financial intermediaries is to mobilize the
savings of the community by offering suitable incentives and to make them available at a
profit to those in need of such savings.
In the functional sections under the bank, sometimes the failures have occurred
because of ineffective controls and lack of proper knowledge.
In this backdrop, now the challenge is to how to promote equity without sacrificing
efficiency. The divergent ideologies should be brought on a platform, where convergent
decisions can be taken without affecting the interest of any group hence this study is attempt
in this Endeavour.
Objective of the study :
 To view the services offered by the CPSSN Society.

 To get practical knowledge about loans and advances.
 To get knowledge about securities asked for sanctioning loans.
 To introduce or for giving information to the various people about bank loans and
bank.
METHODOLOGY
The methodology of the study is the arrangement of information, and analysis of data
in a manner that aims to combined relevant for research Purpose with economy in
procedure, in fact, it constitutes the blue print of collection ,measurement and analysis of
data and finally presentation. In the present study we have adopted coercive method of
study. Conveniently observation method, hold decision with officials, Customer and
secondary data above been utilized.
SOURCES OF DATA
There are two sources of data, viz,

1. Primary source data.
2. Secondary source data.
Primary sources data.

Primary data has been collected from the structured Interview schedule
administered to bank officials, customers, exports. The primary data are very useful for
analysis, interpretations, Conclusion and suggestions.
Secondary source data.
Secondary data are also very important ; the data already collected by someone
else which is available in the systematic manner.
The major sources of secondary data are;
 Bank annual report, brochures and other printed materials.
 Standard research journals.
 Industry and banking dictionary.
 Reference books ,magazines, news paper etc.,
 Internet reference.
LIMITATION OF THE STUDY:
 The study was based on available information and documents.

 The study was carried out in the light of the limited knowledge.
 The study is limited to only Gangavathi.
CHAPTER-II
PROFILE OF THE BANK
PROFILE:
As the study was conducted in the co-Operative society it is necessary to have some
information about the Co-operative sector.
As per the banking regulation Act 1949 RBI given authority to co-Operative banks to
do banking business were extended to co-Operative Banks. It has been licensing of existing
and new banks branches, sanctioning of credit limits to sate co-Operative banks on behalf of
primary co-operative Banks. The present Banking system in India was undergone a program
of tremendous branch expansion program which has helped sector banks to mobiles savings
substantially from the for huge areas of the country and out funds to the weaker sections of
the society banks have penetrated in to Rural, semi urban and backward Areas.
Co-operative Societies:
Co-Operative banks are component of the Indian banking organization originated in

India with the enactment of the Co-operative credit Societies Act of 1904 which provided for
the formation of Co-operative credit societies. under the Act of 1904, a new Act was passed
in 1991, which provided for the establishment of Co-operative central banks by a union of
primary credit societies.
Meaning:
Co-operative society is an institution established on the Co-operative basis and

dealing in ordinary banking business. Like other banks, the Co-operative banks collect funds
through shares. They accept deposits and grant loans. They are generally concerned with the
rural credit and provide financial assistance for agricultural and rural activities.
Structure of Co-Operative banks
Co-operative bank
Co-operative banking in India is federal in its structure. It has three sections. At the top
there is the state Co-operative bank which is the apex bank at the state level. At the
intermediate level there are the central unions or the central Co-operative banks. There is
generally one central Co-Operative bank for each district. At the base of the pyramid there
are the primary credit societies which cover the small towns and villages. Each higher level
institution is a federation of those bellows, with membership and loan operation restricted to
the affiliated units. This structure of Co-operative banks is shown in chart.
State
Co-operative bank
Central Co-operative Bank
(District level)
Primary Credit Societies
(Village, Towns, Cities)
Principles:
The Co-operative principles or guidelines by which Co-operatives put their values into
practice.
 Voluntary and open membership.

 Democratic member Control.
 Member economic participation.
 Autonomy and Independence.
 Education, Training and Information.
 Co-operation among Co- operatives.
 Concerned for community.
‘’Each for all and all for each’’
Values:
Co- operative are based on the values of self- responsibility, Democracy, equality
equity and solidarity .In the tradition of their Founders, Co-operative members believe in the
ethical values of honesty, Openness, social responsibility and caring for other.
Objective of co-operative society;
 To ensure increased flow of assistance to the neglected sector.

 To spend up the growth of new and progressive entrepreneurs.
 To extend banking services especially to urban, semi – urban and rural areas.
 To give financial assistance for increasing the agriculture’
Trade, small entrepreneur and other productive activities in Rural areas.
CPSSN Profile:
As the Gangavathi is the part of Koppal district it is considered as One of the
most emerging economics in the field of Agriculture, Trade and commerce, Banking
sectors etc.
As the Gangavathi is well known as a ‘’Rice Bowl of Karnataka’’ and Also
commercially known as ‘’paddy city’’ and famous for the gracious Presence of Lord
Channabasava swami. Entire Gangavathi Tluka is very Potential in Agricultural
market and it is surrounded by More than 140 Rice mills 40% of the Rice is being
exported to foreign Countries like Singapore, Hong kong and many other countries .
CPSSN is a residuary co-operative society. This was established on
16th may 2003. S.B Reddy is the main promoter of the society .He Started the society
with the initial capital of Rs.15,00,000/- ,Earning is Rs,61000/- - In Gangavathi
CPSSN is playing a major role in the banking sector , as per daily transaction of
CPSSN is about 10 lacks. It has been facing Competition from other co-operative
banks.
As being the potential market in Gangavathi SHRI S.B .Reddy (chairman)
planned to do co-operative society with the committee which will be helpful for local
trader and investors. The main aim of the Society is to give utmost service to the
smaller region people as the Gangavathi is surrounded by many villages .
Distinctions;
 5 year in service
 Pioneered small savings.
 Wide transactions.
 Door step customer service.
 Free value added service
 Involvement in social categories.
 Providing extra benefits for senior citizens .
 Giving service to all community people.
STRATEGIC INTENT
Vision;
 To reach Rs.25 crores in deposits .

 Convert from co-operative society to co-operative bank with in 2020.
 Extending its branches for better customer service at different places
like karatagi, sriram nagar etc .
 Maintain transparency in dealing with customer and invariable fulfil all
commitments.
 Train its employees to render professional and pleasing services .
Special feature of CPSSN:
 The bank is paying two thousand to the member for their funeral function if it
occurs.
 Twenty –five thousand to one lakh is paid for accidental death of Members.
 Cash prize is given for the highest scorer in Under – Graduation.
 The society used to sponsor scholarship to a poor student.
 It is also participating in social service works , like Blood Donation camp, eye
camp etc.
OBJECTIVE:
1. The bank ensure safety and profitability of assets by due diligence and by adopting
appropriate information technology provide financial assistance.
2. Aim to agriculture and village industries for meeting their working capital.
3. The bank aims to grow in size and geographical spread by Introducing variety of
innovative services.
ORGANIZATION STRUCTURE
BOD
Chairman
Deputy chairman
Manager
Assistant manager For loan section

Assistant manager
For Account Section
Cashier
Junior Assistant Junior Assistant
Staff
CHAPTER III:
THEORETICAL BACKGROUND
THEORETICAL BACKGROUND
Introduction:
Banking occupies one of the most important positions in the Morden economic world.
It is necessary for trade and small scale and Short term loan holder’s great agencies of
commerce. One of the primary functions of a bank is to grant loans. Whatever money the
society receives by way of deposit, it lends a major part of its customers by way Of loans,
advances, cash credit and over draft interest received on such Loans and advances are the
major sources of its income. The bank makes a Contribution to the economic development of
the cover by growing loans to industrial and agricultural source.
Definition of Banking:
The banking companies’ act of India defines bank as ‘’A Bank is a Financial
institution which accepts money from the public for the Purpose of lending or investment
repayable on demand or otherwise Withdraw able by cheques, drafts or order or otherwise’’.
Thus we can say that a bank is a financial institution which deals in debts and credits. It
accepts deposits, lends money and also creates money. It bridges the gap between the savers
and borrowers. Banks are not merely traders in money but also in an important sense
manufactures of money.
Meaning of loans: (In General)
Giving money to the various people by taking their various security for various
purposes.
Types of loans Advances:
Loans and advances are of different types. There can mainly be classified on the
following bases.
I. On the basis of object or purpose:

For which purpose a loan is being taken it may be for the following purpose.
Commercial loans:
This loan is taken to meet show room requirement of capital.
Eg: Working capital.
Consumer loan:
This loan is taken to finance house hold goods like fridge, tv, and scooter etc.
Agricultural loans:
Such loan is taken by the farmers to meet their short term requirement like to
buying seeds, Fertilizers, Insecticides etc.
II. On the basis of time:
Short term loans: Such loan is taken for a period of less than a year.
Eg: To meet working capital requirements.
Medium term loans: Such loan is taken for a period ranging from 1 year to 3 year.
For Eg: to purchase equipments for professional or furniture etc.
Loan term loans: such loan is taken to meet long term requirements from 3 years
to 20 years or more. For Eg: Loans to purchase land, buildings, plant and whichever
etc, however banks provide long term loans to a very limited extent only.
III. On the basis form:

A. Loan: This is the old age and popular form of lending by banks. In case of
loans, financial assistance is given for a specific purpose and for fixed period.
The customer can withdraw the entire amount of loan in a single instalment. As
such interest is payable on the entire amount. Ordinary the loan is repayable in
one instalment. However a consumer may return the loan in more than one
instalment also.
Merits of growing loans:
 Simplicity: The method is very simple interest is payable on the entire
amount of the loan.
 Better recovery of interest and loan: The customer known in advance
the time of return of the loans.
 Profitability: From the point of view of the bank, the method is

economical.
Demerits:
 Inflexibility: Borrower has to be made a fresh request for the loan every time he
requires the loan.
 More Formalities: As compared to cash credit and overdraft needs loan
documentation is more complicated.
B. Cash credit: under this system a limit called the credit limit is specified by the bank. A
borrower is entitled to borrow up to that limit. It is granted against the security of tangible
assets or guarantee. The borrower can deposit any amount of surplus funds with in form time
to time.
Merits:
a) Flexibility.
b) Economical.
c) Les Formality.
Demerits :
a) Over borrowing.
b) Division of funds.
c) Non utilization of funds.
Overdraft: One of the main advantages of current account is that its holder can avail of
the facility of overdraft. An overdraft facility is granted to customer on written request
sometimes it may be implied where a customer overdraft his account and the bank honours
his changes.
Features:
 This is a running account and the customer may deposit and

Withdraw may number of times.
 The bank provides cheque book facility.
 It is permitted only in a current account.
 Usual account opening formalities for a current account has to be gone through.
Principle of sound lending:

1) Safety
2) Liquidity
3) Profitability
4) Diversification
5) Object of loan
6) Security
7) Margin money
8) National interest
Principal of sound lending
1. Safety 6.Securiy
2. Liquidity 7.Margin Money
3. Profitability 8.National Interest
4. Diversification 9.Characte of the borrower
5. Object of Loan
LENDING PROCESS:
Whatever may be the type of advances, the process of appraisal of a loan proposal is very
important, lending money involves the following functions.
1. Understanding the market.

2. Prospecting for the right customer.
3. Credit investigation.
4. Sourcing for the customer by obtaining the application.
5. Obtaining and collection the required information for appraisal.
6. Doing the appraisal process including verification of place of business securities.
7. Recommendation and sanction.
8. Obtaining securities, documentation and creation of colleges.
9. Disbursement.
10. Enquiring the end use.
11. Follow up monitoring and renewal.
12. Recovery of advances.
Modes of charging:
Lien: A lien is the right of person or a bank to retain the goods or securities in his possession
until the debt to him is settled.
Pledge: The bailment of goods as security for the payment of a debit or performance of a
promise.
Mortgage: It is of charge created on immovable properties like land and building. It is the
transfer of legal or equitable interest in property as security for the debit.
Hypothecation: It is charge on a property of which neither ownership nor possession is

transferred to the creator. In simple world it is a pledge without transferring the possession of
goods.
CHAPTER IV
 Types of loan offered by CPSSN Guidelines
The main purpose of bank lending is to helps economic Development of the country.
All types of business activity including Trade, industry and agriculture have to depend upon
bank in one form or the other banks help in canalizing the saving of the people into
Productive uses. Thus from banks help both depositor and borrowers. It helps in creation of
employment potential and thus helps raising the Standard of living of the people.
Following are the various loans & advances offered by the society
1. Gold Loan
2. Loan on Fixed Deposit
3. Trade Loan
4. Loan on pigmy
5. Loan on recurring deposit
6. Mortgage loan
7. Overdraft Account
8. Cash or Limit Account
9. Consumption Loan
10. Key Loan
11. Personal Loan
12. Construction Loan
13. Hypothecation Loan
14. Warehouse receipt loan
15. Surety Loan
16. Loan on Securities
17. Housing Loan
18. Vehicle Loan
19. Loan on Poultry farm
20. Professional Loan
21. Employee Loan
Loans against fixed deposit
Eligible Borrowers:
Loans against deposit can be sanctioned either to the depositor or third persons.
Types of deposit Eligible Borrower
a. Deposit in single name The depositor himself
All depositor jointly or one of the depositors

b. Deposit in joint name with consent / authority from all.
[Upon a declaration that loan is required for

c. Guardian operated minors deposit
the benefit of the minor.
Third parties:
 Persons not connected to can also avail loan against authorization from depositors. Such
third party loans carry a different rate of interest.
 Loan given to a proprietor against the deposit in his firm name or vice versa should not
be treated as third party loans.
 Loans given to partnership firm against the deposits in the name of a partner avails loan
against deposits in the name of the firm it should be treated as a third party loans.
Ineligible Deposits:
 Self operated minor’s deposit: Loans cannot be sanctioned against self

operated minor’s term deposits, neither to the minor nor to his guardian.
 Third party loan against guardian operated minor deposit account:
Is not operated.
 Term deposit under capital gains scheme[issued under section 541 of
tax act 1961] can not be taken as security.
 Other bank term deposit: Bank does not sanction loans against term of
other banks, as the latter will not register the assignment offering its right
of general lien on such deposits.
 Deposits representing earnest money for a contract: It should not be
taken as the deposit already charged to the concerned department.
Document to be obtained:
A. Original deposit receipt duly discharged by the depositor [s] on revenues stamp is to
be obtained. Discharge must be undated as dated discharge may tantamount to
payment before maturity.
B. A document containing the following convenient should also be obtained.
 Application for the loan by the borrower.
 Understanding to drive the security.
 Authority to bank to exercise general lien & right to set off.
 Authority to renew deposit on maturity.
 A letter of continuity [if the loan is sanctioned as a overdraft or cash
credit].
1. Advances against national saving certificate:
Bank can sanction loans against NSC 8 issue. NSCs are government Securities being
sold through post offices .It is available in denominations Of Rs.100, Rs.500 and Rs.1000
& Rs.10000. NSC 8 issue was introduced In 1989. They mature for payment after 6 year
with interest compound. At half with interest compounded at half yearly rests. Certificates
issued before 31st December 1988 carry @ 12% P.A Certificates issued from 1.1.1999
carry from15.1.2000 carry interest @ 11% P.A.
NSC in the name of a minor loan can be given to a guardian where he declares that the
loan is meant for the benefit of the minor. As per NSC Issue rules can be transferred to bank
as security.
This transfer is affected by submitting to post office the duly filled Letter of pledge in
prescribed format under the signature of the NSC Holder & the bank. The post office charge
Rs 5/- per certificate under its seal. A bank officials and third party should get the engaged
for this purpose.
Margin and maximum loan:
Margin as per their commercial judgement .loan can be sanctioned against principal value
plus accrued interest.
Rate of interest:
Commercial rate of interest at Bank’s discretion.
For staff : The loan will bear interest at a rate which is minimum 1% .Highest than the
interest rate payable on the NSC.
Documentation:
 Application form for loan

 Security delivery letter
 NSC in original
 Form NSC 41 duly singed by NSC holder & for getting the NSC pledged in favour of
bank.
 Demand promissory note.
 Repayment letter.
There is no need to get the NSC discharged [by its holder by signing on
Its back with or without revenue stamp]
The transferee bank is entitled for the interest apart from the principal.
NSC does not have a prior right over the pledge.
In case of a NSC in the name of a minor, the guardian can borrow on to replete them
to for availing Behalf of minor for the letter’s benefits.
After the closure of the loan the bank should write to the post office in standard
format for transferring the NTSC’s bank in the name of the depositor.
3] Loans against gold ornaments:
Eligibility:
 Customer who own gold ornaments.

 Loans should be sanctioned against gold ornaments & not against Gold
biscuits purring of gold should be minimum 18 carets
 A pawn broker holding jewellers as pledge is ordinary not allowed to replete
them to for availing loan.
Loan amount:
Quantum & rate as decided by the advance amount if found out on The basis of weight,
fineness of gold & as per the rate prescribed by the bank from time to time .
Appraisal:
It has to be done by an approved appraiser appointed by the Commission paid to the

appraiser is to be recovered from the borrower.
Repayment Period:
As per the rules fixed by the Board . Generally between 12 to 36 months.
Procedure:
 Application in the prescribed format should be obtained.

 Jewel loan cards should be obtained in triplicate. 1st copy to be pinned to the bag
outside – the 3rd copy to be given to the Borrower.
 DP note.
Auction of jewels:
 Bank should send demand notices by registered post with AD given 15 days
notice for payment of dues.
 It should publish the notice of sale in the local newspapers preferably in
vernacular language & display notice in the in the branch office notice board.
 Member of the staff of the bank cannot participate in the auction sale.
 Auction can be made through a licensed auctioneer.
 Highest bidder to deposit immediately 5% of the bid.
 The minimum bid should be fixed @ 80% of the current market values .
 Once conforms the bid bidder should deposit the balance within three days of
demand.
4] Vehicle Loans:
Purpose:
1. For purchase of vehicles for self use [by individuals]

2. Exclusively for the use of Educational Institution.
3. For transport operators.
Eligibility for all individuals.
Repayment period: 36 to 48 months.
Rate of interest: 16% for up it loan Rs 50000/- & 15% for above the loan Rs 50000/-
Maximum limit
75% of cost the vehicle subject to a maximum of Rs 05lakhs for Individuals.
75% of the costs of vehicle subject to a maximum of Rs .15lakhs for Transport operators.
Security:
Primary security will be hypothecation of vehicle purchased out of the loan. The
vehicle should be registered in the joints names of the borrowers and the bank. Additional
collateral security as prescribed by the management .All loans above Rs. One lakh should be
given with collateral security only. Regular member associate members nominal members
may act as securities.
Documents to be obtained:
1. Loan application form duly singed by all borrowers.

2. Last three years income tax assessment.
3. Assets and liability statement for calculating repaying capacity.
4. In case of salaried borrower, letter from the employer about the salary with details of
deduction made.
5. Hypothecation Agreement.
6. Registration of charge with the Road Transport Authority.
7. Insurance of the vehicle in the respect of collateral security.
8. Mortgage formalities in respect of collateral security.
9. Copy of the R.C. Book, Duplicate Key and the Insurance Policy should be deposited
by the borrower.
10. Copy of permanent Driving license.
Disbursement of the loan:
The borrower should deposit the margin money with the society. The cost of the vehicle will
be paid directly to the dealer to the vehicle by means of society cheque or demand draft.
5] Surety loans:
Eligibility purpose:
Personal purpose like inland and foreign tours , repayments of debts, medical expenses,
educational expenses, marriage , thread ceremonies, for purchase of sits / house, repairs,
payment of Rent Advances etc.,.
Rate of Interest: 18%
Maximum amount of loan:
As prescribed by the Board from time to time .The maximum amount should relate
to the repaying capacity of the borrower assessed by the society.
Documents to be obtained:
a. Application form
b. Demand Promissory note.
c. Letter of guarantee from two approved sureties.
d. Letter from the employer [ in case of salaries borers] Agreeing to deduct the loan
instalment and remit the same directly to the bank
e. Letter of authority by the borrower addressed to the employer asking him to deduct
the loan instalment from his salary.
f. Salary slip indicating details of salary and deduction made thereon .
g. Information regarding assets and liability of the borrower or last three years income
tax assessment.
h. If the take home salary is not sufficient from the slips, Bank should ascertain from the
borrower, additional sources of income for the family.
i. If there are more earning member in the family , then the guarantee of other
earning member should be obtained, if their earning are also included for
considering the repaying capacity of the borrower.
Terms and condition;

Managing comity as under has prescribed maximum amount of housing loan .
This can be granted by our society.
 The maximum amount of housing loan which can be granted by having
deposits up to Rs .20 lakhs will be Rs .2 lakhs.
 Income criteria for determining the quantum of housing loan to an individual
borrower belonging to economically weaker section , low middle and higher
income group has been discontinued deposit resource ,repaying capacity of the
borrower etc.,.
 Maximum amount of loan for repairs, additional and alternations per
individual‘s borrower is Rupees 75,000.
 The quantum of housing advances is now related to deposit resources of bank
irrespective of the fact whether it is scheduled bank or not. The Bank can
utilize up to 15% of the deposit resources to provide housing loans and other
block capital loans.
Security:
The loan should secured by entire by mortgage of property or by government guarantee

or by both.
Rate of interest: 14%
6] Cash credit Limit:
Purpose:
This facility is sanctioned to meet their working capital requirement business improvement
purpose.
Eligibility:
Generally cash credit limit shall be granted to traders against hypothecation /pledge
of stock as approved by the bank to member, associate members . They must be engaged
in confide trade industry or other business activity.
Period:
Cash credit limit are generally sanctioned for a period of one year at the first instance.
Depending upon the operations & deed, the limit is reviewed at the end of the first year. Cash
credit accounts are running accounts like current account.
Margin: Up to rupees 2.5lakhs.
Documents to be obtained;
 Deed of hypothecation.
 Promissory note.
 Letter of continuity.
 Letter of lien & setoff.
 Mortgage formalities in respect of collateral security.
 Declaration about ownership of goods.
 Letter of access for inspection of shop / godown.
 Letter of guarantee in case of guarantee.
 Copy of sanction letter duly acknowledgement by the borrower.
7] Professional loans:
Purpose: For purchase of officer requirement.
Eligibility ;
Medical practitioners including Dentists, Charted accountants ,Cost Accountants , practicing

company secretary, lawyer, solicitors, Engineers, Architects, surveyors, Construction,
contractors, or Management consultant.
Margin: 75% of amount
Security: Bills Quotation.
8] Loan on pigmy depositors;
Purpose: Scheme for pigmy depositor to meet any contingencies.
Eligibility: regular contributor for pigmy amount.
Quantum of loan: 80% of pigmy amount.
9] Loan on Recurring Deposit;
This deposit is paid against amount of 80% of deposit.
10] Mortgage loan;
Purpose: Issued for any purpose repayment of old debt, agricultural, trade, construction etc,
Margin: 60% of collateral securities.
Repayment period: up to 3 years.
This is medium term loan.
Securities; Collateral securities like land & building etc,
11] Over draft accounts;
Purpose: for improvement of business.
Eligibility: for traders
Margin: up to 2.5 lakhs
Security: Collateral securities [Land & building].
12] Consumption loan:
Purpose: given for purchase of consumer durable like TV, Refrigerators.
Eligibility: Salaried / non salaried class.
Surety: Two members
13) Key loan:
Purpose: For seasonal requirements.
Eligibility: For Traders
Security; against the pledge of stock – paddy, rice, ground nuts .
Borrower should pay insurance on the stock & bank charges.
14) Personal loan:
Rate of interest : 18%
Purpose : For general purpose
Surety; two members is given up to 25000/-
15) Hypothecation loan:
Purpose: To purchase official requirement like X-ray machine, printing, off set.
Payment period: 3 year
Eligibility: doctor, printers, others
Margin: 75% of amount
16). Warehouse receipt loan:
Purpose; to meet the warehouse facilities
Margin: up to 60%
Securities: warehouse, security receipt issued by the warehouse authorities
Goods pledge in the name of financial institute.
17) Loan on poultry form or dairy loan:
Eligibility: For the formers as agriculture allied activity.
Purpose: Poultry form, piggery of birds
Security: Poultry form premier along with the stocks. Additional security of land & building .
Surety: two members
18). Employee loan:
Eligibility: employees of all kinds.
Surety: two members
Purpose: to meet their personal requirements.
Security: Undertaking letter, salary certificate / against their wages.
Guidelines on Documentation:
Documentation is the term used to describe the execution of documents in proper

form and in accordance with the requirement to low proper documentation constitution the
legal security of the Bank. Since it has established the legal relationship between the society
and the borrower. Documents should be properly drawn up executed and Stamped as required
by law. They should also be attested and registered where so required by law. Then only the
right and obligations of the bank and the borrower can be said to have established.
Documentation is necessary to enforce the society‘s right against the borrower to recover the
amount advanced .
Keep in mind the following ‘’DO s’’ and Don’t‘’ of documentation.
Do
 Issues a letter with terms and condition of credit facilities Sanctioned and obtained
acknowledgement of the borrower/s and Guarantor/s.
 Get the documents filled up and then get them executed in the presence of an officer
of the society.
 Use correct form of DP notes as per the constitution of the borrower
 Obtained full signature of the borrower wherever there is any alteration/
addition / deletion of the document.
 Ensure that the document is adequately stamped as per the law application in the
state where it is executed
 Use proper description of stamp on documents.
 Get the revenue stamp cancelled with the signature of the borrower
 Stamp the document executed outside India within 3 months after it is received in
the country .
 Mention the rate of increase linking to prime lending rate except in case of advance
against deposits.
 In the case of illiterate borrowers , with the name of the illiterate to person
below the thumb impression mark.
 Obtain a statement signed by a third party staring that the contents of the
document were explained to the illiterate borrower .
 Obtain signature of all parties to the documents.
 Examine all documents in the detail before disbursement.
 Ensure that charges requiring registration are filled with the registrar of companies as
per section 125 of the Indian companies Act.
 Send a copy of the certificate of registration to the borrower after receiving the
original.
 Verify the articles of association above use of ‘’Common seal’’ of the company on
documents.
 Examine fully the legal opinion on property issued by the advocate.
 Send the mortgage duel for registration to the sub registrar.
 Draw the memorandum in case of equitable mortgage on the next day of the deposit
of the instruments.
 Take acknowledgement of debt from borrower / guarantor once in six months.
 Try to obtain debit balance confirmation / acknowledgement of debt on banks format

from all parents / guarantor.
 Obtain signature of the party wherever payment is made into loan account .
 Obtain fresh DP note and agreement for revival of time barred debt for full amount
due up to date. [Including interest up to date]
 Issue a notice to the borrower guarantor before filling of suit.
 Keep the envelope unopened if the ‘’Suit Notice ‘’ or Letter ‘’ is returned
undelivered or refused.
 Obtained fixed deposit receipt duly discharge by all the joint holders along with the
letter of lien.
Do not;
 Disburse advance without obtaining all documents as per sanction letter.
 Hand over the society documents to the borrower for execution.
 Send document by post of the borrower for execution.
 Fill up document unless adequate stamp duty is paid.
 Get the document typed.
 Keep any column in the document blank.
 Use different colour ink / pen for filling up the documents.
 Affix revenue stamp one below the other.
 Cancel the revenue stamp papers on DP note by crossing them as ‘’X’’
 Accept share signatures of borrowers on documents unless it is required as per rules.
 Attach black stamp papers to the document.
 Disburse loan without registering the mortgage deed.
 Accept photocopy / true copy of title deed for equitable mortgage.
 Accept any letter from the owner of the property along with the title deeds.
 Prepare memorandum on the same day of deposit of title deeds.
 Issue receipt for the title deeds on the same day.
 Part with the title deeds / securities during the currency of advance.
 Obtain revised hypothecation agreement for enhanced limit in respect of limited
companies.
 Advance loan against party paid up shares.
 Accept a minor as a borrower / co- borrower / guarantor.
 Punch in the documents.

 Offer opinion on document to the borrower.
Steps involved in documentation;
1. Drafting of document.
2. Preparing a set of documents.
a. Constitution of borrower.
b. Types of advance granted.
c. Nature of security offered
d. Types of charge to be created.
3. Constitution of borrower
4. Stamping of document.
5. Execution of document.
Revival of time barred debt;
In is not possible to review time barred debt either by taking acknowledgement

or by accepting part payment after the expiry of the limitation period. A time barred
debt should be given a new life by a specific and express promise prepared in the form
of an agreement.
 Fresh promise to pay the time barred debt is not to be obtained in writing.
 Fresh DP note is to be obtained. In case of term loans the amount
outstanding inclusive of interest up to date is be filled in the DP Note.
Whereas, in case of running accounts like cash credit and over drafts the amount of
limit or outstanding inclusive of interest up to date, whichever is more , is to be filled
the DP note.
CHAPTER IV
DATA ANALYSIS AND INTERPRETATION
1. SURITY LOAN
TABLE 4.1 SHOWING SURITY LOAN
YEAR AMT TOTAL %AGE

2014-15 59.48 480.28 8.0746469
2015-16 40.99 445.45 10.867285
2016-17 57.78 491.05 8.4986154
600
500
400
2014-15
300
2015-16
200 2016-17
100
0
AMT TOTAL %AGE
INTERPRETATION :
In above graph & figures in year 2014-15 the% of the surety loan is 8.7% in the year of
2015-16 it is increased to 10.86% & in the year 2015-16 % is slightly to 8.49 comparing
2016-17.
2. SECURITY LOAN
TABLE 4.2 SHOWING SECURITY LOAN
YEAR AMT TOTAL %AGE

2014-15 99.03 480.28 4.84988435
2015-16 79.68 445.45 5.59044869
2016-17 74.86 491.05 6.55957779
500
450
400
350
300 2014-15
250 2015-16
200 2016-17
150
100
50
0
AMT TOTAL %AGE
INTERPRETATION :
In above graph & figures in year 2014-15 the % of the security loan is 4.8% in the year
of 2015-16 it is increased to 5.5% & in the year 2016-17 % is slightly to 6.5% comparing
2014-15.
3. EMPLOYESS EARNER LOAN
TABLE 4.3 SOWING SALARY EARNER LOAN
YEAR AMT TOTAL %AGE

2014-15 7.26 480.28 66.15427
2015-16 5.62 445.45 79.26157
2016-17 6.26 491.05 78.44249
1%
12%
AMT
TOTAL
%AGE
87%
INTERPRETATION:
of 2015-16 it is increased to 79.26 %& in the year 2016-17 % is slightly to 78.44
comparing 2014-15.
4. KEY LOANS
TABLE 4.4 SHOWING KEY LOAN
YEAR AMT TOTAL %AGE

2014-15 94.05 480.28 5.106645
2015-16 82.04 445.45 5.429668
2016-17 91.05 491.05 5.393191
600
500
400
2014-15
300
2015-16
200 2016-17
100
0
AMT TOTAL %AGE
INTERPRETATION :
of 2015-16 it is increased to 5.42% & in the year 2016-17 % is slightly to 5.39
comparing 2014-15.
5. LOAN ON PIGMY DEPOSIT
TABLE 4.5 SHOWING LOAN ON PIGMY DEPOSIT
YEAR AMT TOTAL %AGE

2014-15 9.2 480.28 52.20435
2015-16 8.2 445.45 54.32317
2016-17 6.2 491.05 79.20161
AMT TOTAL %AGE
2%
9%
89%
INTERPRETATION :
comparing 2016-17.
6. FIXED DEPOSITS
TABLE 4.6 SHOWING LOAN ON FIXED DEPOSITS
YEAR AMT TOTAL %AGE

2014-15 11.66 480.28 41.19039
2015-16 10.12 445.45 44.0168
2016-17 13.77 491.05 35.66086
Chart Title
600
500
491.05
400
2014-15
300
2015-16
200 2016-17
100
13.77 35.66086
0
AMT TOTAL %AGE
INTERPRETATION :
In above graph & figures in year 2014-15 the% of the security loan is 41.19% in the year
comparing 2014-15.
7.GOLD LOAN
TABLE 4.7 SHOWING GOLD LOAN
YEAR AMT TOTAL %AGE

2014-15 12.03 480.28 39.92352
2015-16 14.5 445.45 30.720669
2016-17 17.43 491.05 28.17269
Chart Title
600
500
491.05
400
2014-15
300
2015-16
200 2016-17
100
17.43 28.17269
0
AMT TOTAL %AGE
INTERPRETATION :
comparing 2014-15.
8.OVER DRAFT ACCOUNT
TABLE 4.8 SHOWING OVER DRAFT ACCOUNT
YEAR AMT TOTAL %AGE

2014-15 50.44 480.28 9.521808
2015-16 49.64 445.45 8.97361
2016-17 55.54 491.05 8.841376
Chart Title
600
500
491.05
400
2014-15
300
2015-16
200 2016-17
100
55.54 8.841376
0
AMT TOTAL %AGE
INTERPRETATION:
of 2015-16 it is increased to 8.97% & in the year 2016-17 % is slightly to 8.84 comparing
2014-15.
9.STAFF LOAN
TABLE 4.9 SHOWING STAFF LOAN
YEAR AMT TOTAL %AGE

2014-15 20.28 480.28 23.68245
2015-16 18.82 445.45 23.66897
2016-17 19.78 491.05 24.82558
Chart Title
600
500
491.05
400
2014-15
300
2015-16
200 2016-17
100
55.54 8.841376
0
AMT TOTAL %AGE
INTERPRETATION :
In above graph & figures in year 2014-15 the% of the security loan is 23.68% in
the year of 2015-16 it is increased to 23.66% & in the year 2016-17 % is slightly to 24.82
comparing 2014-15.
C.P.S.S.N SOUHARDA PATTIN SAHAKARI NIYAMITHA
GANGAVATHI - 583227 [DIST: KOPPAL] KARANATAKA STATE

BALANCE SHEET AS ON 31-3-2017
Liabilities Amount Assets Amount

Capital 20,01,000-00 Cash 5,33,113-00
Reserve and
90,30,190-00 Bank balance 80,95,716-00
surplus funds
Deposits 5,18,15,313-00 Investment 1,44,11,719-00
Other liabilities Loans and
11,08,944-00 4,91,05,636-00
and Provisions advances
Premises and
Loans receivable Nil 2,67,290-00
fixed assets
Interest and
48,05,549-00
deposit
Profit(loss) 40,35,784-00 Other assets 3,83,306-00
Total 7,27,96,780-00 7,27,96,780-00
CHAPTER VI
FINDINGS, SUGGESTIONS & CONCLUSION
 FINDING
 SUGGESTIONS
 CONCLUSION
FINDINGS:
By studying this project, I have found these following assumptions.
 Society charges the different interest rates for different loans.

 Majority of the customers prefer mortgage loan.
 Society is investing very less capital for loan on recurring deposit.
 Society will not divide the loans like various segments.
 Society also introduces the new loan for its staff members.
 Most of the members taken pigmy deposit loan provided.
 The number of instalment given by the society for repayment of loan is satisfied for
maximum members.
SUGGESTIONS:
After seeing the performance of CPSSN bank it will not be worthy in giving any
specific suggestion because the banks management is quite good .
But still after my detailed study, those are as follows;
 Society should divide the loans such as personal loan,

 Consumption loan, trade loan, self employment loans.
 Society should launch still more loans especially for women.
 Society should undergo market innovation.
 Effective advertisement must be given to loans and advances.
 Various educational loans should be launched.
 Society should maintain close interaction with the borrower so that Loan can be
recovered in time.
 The society can provide modern facilities like ATM, Debit Card, Credit Card , Online
banking, to their members.
 Most of members created accounts for loan , other benefits like
Interest rate, mobilization of saving must be improved.
CONCLUSION:
The thorough study on financial assistance in the form of loan and advances I can
conclude that the bank has been giving financial assistance to its customers in the form of
loan and advances on the security basis. It has been following rules and regulations regarding
eligibility, surety etc., strictly while sanctioning loan and advances.
ANNEXURE
 Bibliography
 Questionnaires
Bibliography
Marketing research - A. Parusharaman

Financial management – Philip kotlar
Service marketing - Zithmal
1. Websites;
www.fundmanagement . com
2. Project report writing – Rampal & Gupta
3. Effective project management –
4. Project management & control – Narendra singh
QUESTIONNAIRES:
Name:
Age:
Gender:
Qualification:
Designation:
1. Which loan you have availed from CPSSN?

Personal loan
Vehicle loan
Agricultural Loan
Gold loan
Other.
2. What factor influenced you to approach CPSSN?

a. Image of CPSSN
b. Easy accessibility
c. Interest rates
d. Quick response
e. Any other
3. Are the formalities for application of loan complicating?
Yes
No
4. What are the documentation you submitted when you applied for a loan in
CPSSN?
5. How long did it take for the loan to get sanctioned after submitting application
along with fees?
7-15 Days
15-30 months
1-2 months
Above 2 months
6. What is your opinion of the appraisal procedures of getting the loan?

Rigid
Moderate
Flexible
Simple
7. Compared to other financial institutions the interest rate offered to you is

High
Medium
Low
8. Your mode of loan instalment payment

Monthly
Quarterly
Annually
9. Would you recommend anyone to take loan from CPSSN SOCIETY LTD ?
Yes
No

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“A STUDY ON VARIOUS LOAN OFFERED BY CPSSN BANK AT GANGAVATHI”

In Gangavathi, presently CPSSN society is one of the leading co-operative societies.

Objective of the study :

 To view the services offered by the CPSSN Society.

There are two sources of data, viz,

Primary sources data.

Secondary source data.

LIMITATION OF THE STUDY:

 The study was based on available information and documents.

PROFILE OF THE BANK

Co-Operative banks are component of the Indian banking organization originated in

Co-operative society is an institution established on the Co-operative basis and

Structure of Co-Operative banks

Central Co-operative Bank

Primary Credit Societies

(Village, Towns, Cities)

 Voluntary and open membership.

Objective of co-operative society;

 To ensure increased flow of assistance to the neglected sector.

 To reach Rs.25 crores in deposits .

Special feature of CPSSN:

Assistant manager For loan section

Junior Assistant Junior Assistant

Meaning of loans: (In General)

Types of loans Advances:

I. On the basis of object or purpose:

II. On the basis of time:

Eg: To meet working capital requirements.

III. On the basis form:

 Profitability: From the point of view of the bank, the method is

 This is a running account and the customer may deposit and

Principle of sound lending:

Principal of sound lending

2. Liquidity 7.Margin Money

3. Profitability 8.National Interest

4. Diversification 9.Characte of the borrower

1. Understanding the market.

Hypothecation: It is charge on a property of which neither ownership nor possession is

FINANCIAL ASSISTANCE BY CPSSN

 Types of loan offered by CPSSN Guidelines

FINANCIAL ASSISTANCE BY CPSSN

Loans against fixed deposit

Types of deposit Eligible Borrower

a. Deposit in single name The depositor himself

All depositor jointly or one of the depositors

[Upon a declaration that loan is required for

 Self operated minor’s deposit: Loans cannot be sanctioned against self

1. Advances against national saving certificate:

Margin and maximum loan:

Commercial rate of interest at Bank’s discretion.

 Application form for loan

3] Loans against gold ornaments:

 Customer who own gold ornaments.

It has to be done by an approved appraiser appointed by the Commission paid to the

As per the rules fixed by the Board . Generally between 12 to 36 months.

 Application in the prescribed format should be obtained.

1. For purchase of vehicles for self use [by individuals]

Eligibility for all individuals.