Analysis of Loan of Allahabad Bank
Content
CONTENTS
SUMMARY CHAPTER-I 1. . INTRODUCTION TO THE TOPIC……………………….......... 2. OBJECTIVES OF THE STUDY………………………………. 3. METHODOLOGY……………………………………………. 4. LIMITATIONS……………………………………………….... CHAPTER-II 5. INTRODUCTION TO THE ORGANIZATION………………... 6. RATIONALE OF THE PROJECT……………………………... CHAPTER-III 7. DATA ANALYSIS & INTERPRETATION…………………….. CHAPTER-IV 8.MAJOR FINDINGS………………………………………….... 9.SUGGESTIONS……………………………………………….. 10.CONCLUSION………………………………………………
BIBLIOGRAPHY ANNEXURE
SUMMARY Allahabad Bank offers loans of various types to meet the requirements of the individuals. It offers loans to self employed persons, business men, salaried employees and professionals. The diverse range of Allahabad Bank loans that are offered to the individuals includes:
• • • • • • • • • • • • • • • •
Housing Loan Education Loan Car Loan Saral Loan Personal Loans for Pensioners Personal Loans for Doctors Loan against NSC/KVP Allbank Rent Loan Allbank Property Scheme Allbank Furnishing Loan Gold Loan Scheme All Bank Mobike Scheme AllBank Abhushan Scheme Allbank Trade Scheme AllBank Gyan Dipika Scheme AllBank Reverse Mortgage Scheme
The car loans by the Allahabad Bank are given for the purchase of the new vehicle, which are to be for personal use only. It also offers loans for the purchase of pre- owned vehicle, which is not more than 3 years old. To get the benefit of the loan, the person should be a salaried person, with the gross income of Rs. 10,000 p.m. Agriculturalists and professional self employed and business men are also eligible to get loans from Allahabad Bank. It must be kept in mind that the
car loan should be fully repaid before the individual turns 70 years of age. The car loan amount that is offered to the individual does not exceed 2 times of the Net Annual Income or Net Annual Salary. Allahabad Bank Home Loans Allahabad Bank offer home loans for the construction of the residential house on the already owned land. It also offers loans for other purposes like purchase of plot by salaried people, purchase of flat or house, renovation of residential house and other purposes. Home loans are offered to permanent salaried people, businessmen, self employed persons and individuals with regular income who can liquidate loans. Allahabad Bank offers term loans to the loan seekers. For the salaried persons the loan amount is restricted to 60 times of the monthly gross salary. For other individuals, the loan amount is limited to 4 times of the gross income. Allahabad Bank Education Loans The educational loans are offered by the Allahabad Bank to the Indian students only. The students should seek admission to educational courses through entrance test selection process. The bank offers loans for various courses like graduation and post graduation courses, professional courses, computer certificate courses, courses conducted by IIM, IIT etc. Allahabad Bank offers loans for studies abroad as well. For the students studying in India, the maximum loan amount offered is Rs.10 lacs and for studying abroad the maximum loan amount increases to Rs. 20 lacs.
Allahabad Bank Personal Loans Personal loans are offered to all the pensioners drawing pensions from Allahabad Bank. The personal loans are given to the pensioners who have not exceeded 70 years of age. This kind of loan can be availed without assigning any definite purpose. The maximum loan amount of Rs.75,000 and minimum of Rs.15,000 are offered to the individuals. Personal loans are also provided to the doctors and medical practitioners by the Allahabad Bank. The loans are offered for the expenses of professional requirement. Annual income or Rs. 5 lacs, whichever is less are offered as the loan amount. Allahabad Bank Loans are offered to the Non Resident Indians as well. NRIs are offered housing loans and education loans by this bank. How you use the money is entirely up to you. Personal loans are unsecured loans with a fixed payment schedule and payment amount. Use them to consolidate debt, pay off a credit card, or put money in the bank. One can apply quickly for personal loan today and quickly access cash and also pay of credit cards make upgrades to your home. And confidential and secure no-obligation quotes. One can get from Allahabad bank which provides it at very low rate of interest.For students bank can understand that paying for college can be difficult. Find low-interest public and private loans specifically designed for students. Private loans help students fill the gap when federal loans, scholarships, and grants don't cover all of your college expenses. That's why we made getting the additional funds you need an easy process. Federal aid doesn't always cover all of the costs and Many student loans don't require repayment until graduation and also interest rates on student loans is generally lower than other loan types All for this is the bank from which student can get the loan. One person always have the dream of his own house and Allahabad bank get the dream to fulfill through home loans.Whether you're looking to purchase a home, refinance an existing mortgage, or take out a low interest second mortgage to consolidate loans or get some cash, lenders are standing by to compete for your business. Credit.com has partnered with Home-Account.com to help guide you through the process. Bank provide the home loan based on your income, learn how much house you can afford , Find out if
refinancing makes sense (dollars and cents) for you and also Discover if points on a mortgage is a good investment , also avoid common mistakes on the path to home ownership.
CHAPTER-I 1. RATIONALE OF THE PROJECT 2. OBJECTIVES OF THE STUDY 3. METHODOLOGY 4. LIMITATIONS
CHAPTER-I
INTRODUCTION TO THE TOPIC
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over 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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Types of loans
Secured
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan. A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security — a lien on the title to the house — until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it. In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter — often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer. A type of loan especially used in limited partnership agreements is the recourse note. A stock hedge loan is a special type of securities lending whereby the stock of a borrower is hedged by the lender against loss, using options or other hedging strategies to reduce lender risk.[citation needed] A pre-settlement loan is a non-recourse debt, this is when a monetary loan is given based on the merit and awardable amount in a lawsuit case. Only certain types of lawsuit cases are eligible for a pre-settlement loan.[citation needed] This is considered a secured non-recourse debt due to the fact that if the case reaches a verdict in favor of the defendant the loan is forgiven.
Unsecured
Unsecured loans are monetary loans that are not secured against the borrower's assets. These may be available from financial institutions under many different guises or marketing packages:
• • • • •
credit card debt personal loans bank overdrafts credit facilities or lines of credit corporate bonds
The interest rates applicable to these different forms may vary depending on the lender and the borrower. These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may come under the Consumer Credit Act 1974.
Demand
Demand loans are short term loans that are atypical in that they do not have fixed dates for repayment and carry a floating interest rate which varies according to the prime rate. They can be "called" for repayment by the lending institution at any time. Demand loans may be unsecured or secured.[1]
Loan payment
The most typical loan payment type is the fully amortizing payment in which each monthly rate has the same value overtime.[2] The fixed monthly payment P for a loan of L for n months and a monthly interest rate c is: [3]
Abuses in lending
Predatory lending is one form of abuse in the granting of loans. It usually involves granting a loan in order to put the borrower in a position that one can gain advantage over him or her. Where the moneylender is not authorized, they could be considered a loan shark. Usury is a different form of abuse, where the lender charges excessive interest. In different time periods and cultures the acceptable interest rate has varied, from no interest at all to unlimited interest rates. Credit card companies in some countries have been accused by consumer organisations of lending at usurious interest rates and making money out of frivolous "extra charges".[4] Abuses can also take place in the form of the customer abusing the lender by not repaying the loan or with an intent to defraud the lender.
taxes
Most of the basic rules governing how loans are handled for tax purposes in the United States are uncodified by both Congress (the Internal Revenue Code) and the Treasury Department (Treasury Regulations — another set of rules that interpret the Internal Revenue Code).[5] Yet such rules are universally accepted.[6] 1. A loan is not gross income to the borrower.[7] Since the borrower has the obligation to repay the loan, the borrower has no accession to wealth.[8] 2. The lender may not deduct the amount of the loan.[9] The rationale here is that one asset (the cash) has been converted into a different asset (a promise of repayment). [10] Deductions are not typically available when an outlay serves to create a new or different asset.[11] 3. The amount paid to satisfy the loan obligation is not deductible by the borrower.
[12]
4. Repayment of the loan is not gross income to the lender.[13] In effect, the promise of repayment is converted back to cash, with no accession to wealth by the lender.[14] 5. Interest paid to the lender is included in the lender’s gross income.[15] Interest paid represents compensation for the use of the lender’s money or property and thus represents profit or an accession to wealth to the lender.[16] Interest income can be attributed to lenders even if the lender doesn’t charge a minimum amount of interest.[17] 6. Interest paid to the lender may be deductible by the borrower.[18] In general, interest paid in connection with the borrower’s business activity is deductible, while interest paid on personal loans are not deductible.[19] The major exception here is interest paid on a home mortgage.[20]
Income from discharge of indebtedness
Although a loan does not start out as income to the borrower, it becomes income to the borrower if the borrower is discharged of indebtedness. [21] Thus, if a debt is discharged, then the borrower essentially has received income equal to the amount of the indebtedness. The Internal Revenue Code lists “Income from Discharge of Indebtedness” in Section 62(a)(12) as a source of gross income. Example: X owes Y $50,000. If Y discharges the indebtedness, then X no longer owes Y $50,000. For purposes of calculating income, this should be treated the same way as if Y gave X $50,000. For a more detailed description of the “discharge of indebtedness”, look at Section 108 (Cancellation of Debt (COD) Income) of the Internal Revenue Code.[22]
Research Design
This dissertation is consisted by the following structure of five chapters which can be seen in below: Figure 1.1: Research Design
Chapter 1: Introduction
Chapter 2: company profile
Chapter 3: Research Methodology
Chapter 4: Data Analysis – Results
Chapter 5: Conclusions
Loan offered by Allahabad bank
1.1Emergency Loans We need a loan every time we face a situation where we can not meet the ends meet and we need some kind of financial injection that’ll cure the problem. Specially in emergencies, getting a loan can really help and once the emergency is over, repaying that loan never feels like a burden. Emergencies can vary, one might have to travel to attend an important an event like a wedding or a tragic family funeral or might require some quick cash in order to pay for expensive medicines if he/she falls sick etc. Ever now and then we face a situation where things are not under our control and if you are low on savings or have low income, a loan provided in emergency does feel like a blessing. In such cases, people mostly prefer short term loans that they mean to pay back on the next pay day or a couple of months max. The best places to get a loan are the financial institutions but you can also apply for payday advance loans that are available online. Google the terms and you’ll see how many choices can be found online.Apply now for an EmergencLoan 1.2 Home Loans Banks, as I am sure that you are already aware of, can also provide loans. People usually apply in banks for large sum of loans for instance home loans. First time home buyers mostly plan to spend around a hundred and fifty thousand (USD $150,000) to three hundred thousand dollars ($300,000). For the first time home buyers, it’s absolutely important that they find a bank which is offering home loans on lower interest rates and with a good 25-30 years of repayment schedule. 1.3 Car loans / Auto Loans At present, one of the most widely used and important loan for a common man is a car loan. These types of loans are designed for people who want to purchase a car and are normally known as car loans or auto loans. You can apply for a car loan regardless what kind of car you are looking for. It can be a small more economical compact car or it can
also be a SUV. The amount of loan that you want to borrow and the interest rates will heavily depend on your credit, your monthly income and your age. If you have a poor employment history then that will also have a negative effect on the total amount and the interest rate associated with the loan. 1.4 Student Loans You can apply for a student loan if you are going to a college or a trade school. You can also apply for student loan if you want to get a new diploma in a specialized field. You can get in touch with government or private sector lenders to borrow these loans. What you have to make sure is that you strike a deal where you don’t have to pay high interest rates. If you are going to a trade school then there is a good chance that you won’t have to borrow as much money as you would if you are going to join a college and graduate in 4 years. With trade schools, your loan repayment schedule will begin after you have graduated. 1.5 Personal Loans People need loans for personal needs, needs that do not really have anything to do with the basic necessities of life like medical, car loans or loans for home purchasing. For instance personal needs like traveling during holidays, cosmetic surgeries, going out for a lovely honeymoon or getting a loan to have a wedding of your dream. This type of loan is known as Personal loan. Usually personal loans carry a higher interest rate because these loans are tailor made for personal needs of the borrower that vary from case to case. Before you apply for personal loans with a financial institute, you should do a little research on the internet. There is a good chance that you will find a lender that is offering these loans on lower interest rates. 1.6 Credit Cards Many people do not realize that by using credit cards, they are already using loans. In fact, many Americans believe that they just have to have a credit card because for them
it’s a thing that everybody has which can also lead you to believe that their interest rates are the lowest possible interest rates and life can become very easy thanks to credit cards. The fact is that credit cards are the biggest loan industry in the world, left alone America. It makes your life easier by giving facilities like not paying using cash or having to buy something off the shelf when you don’t have enough to pay for it at once but the interest rates are pretty high compared to any other loan. There are good chances that you will miss paying a monthly bill because lets face it, sometimes work and domestic issues can lead to missing out the deadline of the bill that you need to clear before you cross the due date and that will leave a big bad stain on your credit report.
Housing loans
The housing finance market is on a high growth trajectory. Over the last seven years, it has grown exponentially from Rs4630 crore in 1996-97 to an estimated Rs42, 000 crore in 2003-04. This makes it one of fastest growing industries in the country, with growth rates in excess of 37 percent per annum. Going by the shortage of housing in the country, it is poised to grow at a similar pace for the next three years at least. The penetration of housing in India is among the lowest in the world, with a housing –to-GDP ratio of 2 percent. By contrast, in most Asian countries the ratio is around 15 percent. Government estimates of housing shortage in the country are 1.9crore units. Also, on the financing side, household debt-to-GDP ratio in India is around 4 percent, much lower than the 25-30 percent in most Asian countries. Retail buyers have mushroomed over the last couple of years, thanks to growing income levels, low penetration of housing, fall in retail property prices and steep fall in interest rates on housing loans. In the last seven years, interest rates have come down by over 50 percent (from 14 percent to 7 percent), resulting in huge savings. Now a 20-years Rs 10 lakh loan will save the customer over Rs 11.24 lakh in interest costs.
Falling interest rates have further boosted an individual’s preference to avail credit. Now almost 60-65 percent of individuals finance their home through a mortgage as against 30-35 percent five years ago.A reason for this growth is that consumers ,particularly the younger generation ,have become less debt averse. The average age of individuals opting for a housing loan has fallen to around 32 years as against an age of early 40’s around seven years ago. Another reason that has contributed to the growth in housing finance is the sharp rise in disposable income levels. The cost of a house today is merely five times the average annual income. About seven years ago, it used to be more than 20 years income. Back then it was also difficult to get a loan for more than 7-8 years, now loans are offered for a period of 15-20 years. Besides, property prices have stayed in the last 3-4 years. Having peaked in the mid –90’s, prices tumbled by more than 40 percent, making homes more affordable .the Indian buyer has also become more quality conscious .now they want facilities like schools, hospitals, shopping malls, recreation centers and health clubs close to their place of residence. Developers have tuned into their demands and are offering quality products, thus giving an all –round push to housing and housing finance. The housing finance portfolio is considered safe as loan defaults have traditionally been below 1 percent. this is why many public sector banks and foreign banks have entered the industry. In fact, in the last three years, banks have tripled their exposure to retail loans –the bulk of which is towards housing-from about 5 percent of the total credit three years ago to 14-17 percent. Adoption of prudential norms with reference to capital adequacy asset classification. Income recognition and provisioning has improved the internal health, i.e.
the soundness and solvency of each Bank. Banks have made major headway in housing finances where the competition is the severest. The main reason for this is that this product offers maximum security, fixed yield, long repayment period and opportunities into the banks cross sell other products. Due to income tax exemption for interest &repayment and eligibility for coverage under priority sector. Advances, the share of housing finances in retail banking operations is the largest. Housing Finance is the fastest growing sub- segment in retail Finance. Incidence of NPA is also the lowest in this sub segment being only around 0.50 to 0.75 percent of total finance. The total market size of HF is present Rs.25000 and is expect to grow at an annual growth of 30%. Housing is a priority area even for the government, which is providing various incentives for boosting growth and development in this sector, the factors responsible for growth in this sub segment have been: • • Repeat of urban land ceiling Act Fall in the prices of real estate to more realistic levels and increase in income levels resulting in improved ratio of cost of housing to annual income 14.66 to 5.22 in 2001-02 • Deduction of interest paid on housing loans from total income for calculation of Income tax and rebate under section 88 for repayment of principal up to Rs. 20000 p.a. However, reforms are necessary in stamp act and tenancy has to give further boost to this sector. Although of the implementation of the Kelkar committee recommendation might result in a set back to the development of this sector. Home Financing had been a safe proposition as instances of NPA have minimal. But the story has changed of late and home loan players are being forced to do a rethink.
The first hint of a revision in strategy was done by an unassuming Union Bank of India. The bank hiked its interest rates for fresh home by 50bps. (Ref. The Financial Express March 15,2004). The latest buzzword in the real estate market is for home finance companies to purchase real estate and then lease it out to multinational companies. ALLAHABAD BANK Home Finance has invested Rs.200 crore in acquiring space in hi- tech cities across in India, which are then rented out to IT companies. Home finance sector leader Housing Development Finance Corporation (HDFC) proposes to set up a separate entity for acquiring and leasing properties to corporate clients. The housing finance major proposes to set up a separate entity with 49% equity holding which will acquire properties and lease them to MNCs. “there is a good potential for such business in the country as currently there are no institution property finance companies willing to own property and lease them out to corporate."
HOUSING FINANCE SECTOR
Against the milieu of rapid urbanization and a changing socio-economic scenario, the demand for housing has grown explosively. The importance of the housing sector in the economy can be illustrated by a few key statistics. According to the National Building Organization (NBO), the total demand for housing is estimated at 2 million units per year and the total housing shortfall is estimated to be 19.4 million units, of which 12.76 million units is from rural areas and 6.64 million units from urban areas. The housing industry is the second largest employment generator. It is estimated that the budgeted 2 million units would lead to the creation of an additional 10 million man-years of direct employment and another 15 million man-years of indirect employment. Having identified housing as a priority area in the Ninth Five Year Plan (1997-2002), the National Housing Policy has envisaged an investment target of Rs.
1,500 billion for this sector. In order to achieve this investment target, the Government needs to make low cost funds easily available and enforce legal and regulatory reforms. Thus the research indicates that customer are seeking more than just a loan, they seek convenience in the entire process of acquiring a home loan as well as finance for it. The aim is to make the process seamless for the customer by offering access to the complete real estate market in his city at one place, helping him to select the property as per the requirement, guiding him through the documentation and also providing the loan. Leading players are looking at acquiring the customer not only through fresh application, but also through refinance.
Importance of customer satisfaction
Customer satisfaction has been regarded as an important theoretical and practical issue for many academics and most marketers (e.g. Dabholkar et al., 1996; Fournier and Mick, 1999). Unfortunately, today many managers still think that customer satisfaction is not something necessary and important element of success (Goodman and Ward, 1993). However, customer satisfaction is very crucial for the success of the companies in this competitive world of business and more and more companies recognize its importance as a serious organizational goal (Jamal and Naser, 2002; Bitner and Hubbert, 1994). Similarly, Bhote (1996) refer that “clearly defining and understanding customer satisfaction can help any company identify opportunities for product and service innovation and serve as the basis for performance appraisal and reward systems”. Additionally, Lynch (1995) argues that organizations in order to increase their customer satisfaction must take into consideration five key elements: self-esteem, security, information for customers and “atmospherics”.
RATIONALE OF THE PROJECT
1). Longer tenure of loans, ranging from minimum 5 years to 20/30 years. Higher outlays of funds longer duration of housing loans make it different from that of other retail loans. Therefore the risk horizon also differs for the hosing loans. 2). Rather low cost of operations in terms of deployment of manpower for processing and follow up etc. as compared to other loans of the same size within the retail or any other segments. 3). Safe advances, as these are invariably backed by tangible security in the form of mortgage of house/flat. 4). Tendency to default on housing loan is low as house is considered as big ticket deal of an individual’s life. 5). At present, the housing loan portfolio of banks is highly sensitive to sops announced by the government on exemption on personal tax.
1.
OBJECTIVES OF THE STUDY
To get a fair view of the functioning of the vehicle finance department in a banking organization. To know about the inflow and the outflow of the funds in the loans department. To know the reason behind the fluctuation in the interest rates charged by banks. To know about the various competitors which really give a tough competition to the I.C.I.C.I bank. To know about the role played by reserve bank of India in deciding the interest rate charged on loans by any bank. To know about the basis for calculating the loan interest rate. To do the comparative study on the basis of the interest rates charged by various banks. To know about the various deciding factors for any individual before taking car loan from any bank. How is Allahabad Bank better than other banks in terms of extending loans and serving their customers? What is the customer base of ALLAHABAD BANK? What are the formalities that an individual is supposed to comply with before acquiring for educational loan from Allahabad Bank? How can ALLAHABAD BANK bank take an edge over their competitors? How far are the customers satisfied with the services extended by Allahabad Bank and what changes do they expect that can be brought about to have a smooth functioning of the loans department? How far are the employees satisfied with the functioning of the loans department of their bank and how can the changes be brought about to make the functioning more effective and efficient?
METHODOLOGY
After we have discussed the relevant past research in regard to our research problem ,now in this Chapter we are going to proceed and explain the research methodology that we have used for our project. The main discussed issues will be based to the six proposed stages of the research process by Zikmund (1994)
Problem discovery and definition According to Malhotra and Birks (2003, p.31), problem definition can be defined “the general problem and the identification of the specific components of the research problem”. Parasuraman (1991) refer that is critical to define the problem in order to communicate it correctly to both decision - makers and researchers, however at the same time we should fully understand the scope and the nature of the problem avoiding any misconceptions. Research design “The Research Design is the ‘blueprint’ that enables the investigator to come up with solutions to these problems and guides him or her in the various stages of the research” (Nachmias and Nachmias, 1996; Churchill, 1991). Research design involves different research techniques that we are going to use to get the information needed relevant to the problem, the measurement and scaling techniques for understanding the collected information, the questionnaire design etc (Lawley and Gardiner, 1999; Malhotra and Birks, 2003). Also Tull and Hawkins (1987) argue that one of important research
design’s goals is to maximize the accuracy of the gathered information to create a proper budget level. Research design can be broadly classified in some basic types. One useful classification is the one that is related with the main target of the research into three main categories which are: (i) Exploratory research, (ii) Descriptive research and (iii) Causal research (e.g. Churchill, 1979; Green and Tull, 1978). Exploratory research The primary goals of research design are to help to the understanding of marketing phenomena, determine the problem in a better way and provide additional insights and ideas (Malhotra and Birks, 2003; McDaniel and Gates, 1999). Descriptive research Descriptive research is a very important research design method and may be undertaken to describe something e.g. consumer’s beliefs and attitudes, other market characteristics etc (Parasuraman, 1991; Jobber, 2004). According to Churchill (1979, p.53-54) descriptive research can be used to describe the characteristics of certain groups, to estimate the proportion of people in a specified population who behave in a certain way and to make specific predictions. Causal research Causal research “is used to obtain evidence of cause-and-effect (causal) relationships” (Malhotra and Birks, 2003, p.69). The most common types of causal studies are the experiments, since they are the best to determine the cause and the effect (Churchill, 1979; Zikmund, 2000). The research approach and strategies
This is the first stage of the research design; it involves the way that we are going to conduct the research. The choice of the research is a difficult decision and it depends on the nature and scope of the problem, the funding of the research and to the availability of the time (Birn, 2000). Secondary data Secondary data are the data gathered or authored by another person who has a different research purpose from that of the initial researcher (Bailey, 1982). Secondary data include internal published data such as annual company reports, reports to stockholders and external published data such as government reports and statistics (McDaniel & Gates, 1999; Peneault & McCarthy, 1997). In addition, another form of collecting secondary data is the search engines (e.g. Google) where the data can be quickly and simply collected (Jobber, 2004). Primary data Primary data are “the data originated by the researcher specifically address the research problem” (Malhotra and Birks, 2003, p.85). Parasuraman (1991) argues that primary data are necessary where the secondary data are unavailable or inappropriate and can be collected by several methods. The purpose of primary data collection is the answering of questions of the defined problem of the study (Dodge et al., 1982). Below we are going to refer to the three main types of primary research. Surveying Surveys are regarded to be the most popular method of collecting primary data and are used to describe marketing phenomena at a particular time (Dodge et al., 1982). “Survey
techniques are the techniques based upon the use of structured questionnaires given to a sample of a population” (Malhotra and Birks, 2003, p.224). The main advantages of surveys are that they are more objective and reliable; they have a more representative sample of the target population; the gathered data can be manipulated with the use of statistical techniques; the collection of the information is not time consuming, costly and difficult (Dodge et al., 1982; Emory, 1980; Zikmund, 2000). Observations Observation method is defined as “the systematic process of recording the behavioural patterns of people, objects and occurrences without questioning or communicating with them” (Zikmund, 2000, p.217). McDaniel and Gates (1999) argue that there are three conditions for using observation research. These are: a) the observation research duration should be of relatively short duration; b) the needed information must be observable or inferable; c) the behaviour of the interest should be relatively frequent, repetitive and predictable. Experiments Experiment is “a research investigation in which conditions are controlled so that one or more variables can be manipulated in order to test a hypothesis”. The main purpose of the experimental research is the control of the research evaluation in order to evaluate causal relationships between several variables (Zikmund, 2000, p.238). The research method After we have chosen the survey method as the research approach that we are going to use we should talk now for the four options when choosing that method. As we have said
before, the survey method is based on the use of a structured questionnaire given to respondents to obtain useful information (Malhotra and Birks, 2003). Face-to-face surveys Personal or face-to-face interviewing “is a two-way purposeful conversation initiated by an interviewer to obtain information that is relevant to some research purpose” (Emory, 1980, p.293). The interviewer asks from the respondent to answer issues in the form of attitudes, opinions, feelings, motives, intentions and so on; thus the personal interviewing is regarded as an excellent data collection method because of the great personal interaction between the interviewer and the respondent (Dodge et al., 1982). Telephone surveys Telephone survey can be characterized as a semi-personal method of collecting information which is very popular because of the widespread acceptance of the telephone from all the people as a basic communication tool (Nachmias and Nachmias, 1996). Mail and internet surveys A mail survey is self-administered questionnaire sent to respondents through the mail. On the other hand, internet survey appears when a computer user intentionally navigates and answers questions in a web site (Zikmund, 2000, p.201+210). Questionnaire construction “A questionnaire is simply a set of questions designed to generate the data necessary for accomplishing a research project’s objectives” (Parasuraman, 1991, p.363). Malhotra and Birks (2003) present the questionnaire design process in ten steps, as shown in Figure 3.2.
Figure 3.2: Questionnaire design process
Source: Malhotra N.K. and Birks D.F. (2003). “Marketing Research: An Applied Approach”, 2nd European Edition, England: FT Prentice Hall
There are three conditions that are important researchers to take into consideration in order to get a true response to questions. These are: i) the questions must be clear for respondents; ii) respondents must be able to give the information; iii) respondents must be reluctant to answer (Jobber, 2004). Pilot testing In order to identify and eliminate any potential problems in the functionality of the questionnaire and ensure that there aren’t any mistakes in it, Sampling Another key component in the research process is the selection of the sample population that we are going to study (Emory, 1980).
Data collection As we have said in previous sessions we have used face-to-face interviews to collect any data and information for our study.
4. LIMITATIONS
LIMITATIONS LIMITATIONS Educational loan is not offered by Allahabad Bank in Bhopal. Interest rates charged on CAR loan is very high. Lot many formalities like notary, guarantors etc are involved. The documentation part is very lengthy and time consuming. They don’t have any customer redressal system. Whenever any individual acquires for any loan from ALLAHABAD BANK. bank, he does not gets a proper information and guidance from the staff working their. They give More priority to their personal work and do not readily listen to the customer until they are done with their work, in short the customer does not holds a top place in their priority list. The staff does not gives proper directions and guidelines to guide the customer as in how the customer should move further with the further proceedings. Inspite of the centralized air conditioning the atmosphere inside is very sticky. A lot of hidden charges are there at various transactional levels. At time it is experienced that the staff working there is relatively inexperienced as is comprises of the youth which does not live upto the expectations of the customers.
The recovery system adopted by Allahabad Bank is considered to be unethical and also illegal at times.
CHAPTER-II
• INTRODUCTION TO THE ORGANIZATION • INTRODUCTION TO THE TOPIC
CHAPTER-II
INTRODUCTION TO THE ORGANIZATION
Allahabad Bank
Allahabad Bank,(Hindi: इलाहाबाद बैक) which began operations in 1865, now has its headquarters in Kolkata. Currently the bank has 2260 branches
[1]
across the country. The
Chairman and Managing Director of the bank is Shri J P Dua. The bank has a branch in Hong Kong and a representative office in Shenzen. The bank's internet banking is maintained by EBankWorks Team of TCS.
History
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On April 24, 1865, a group of Europeans founded the bank at Allahabad, making it the oldest Joint Stock bank in India. In 1920, P&O Bank bought Allahabad Bank. In 1923 the bank moved its headquarters to Calcutta. In 1927, Chartered Bank of India, Australia and China acquired and amalgamated P&O Bank. However, Chartered Bank continued to operate Allahabad Bank as a separate entity.
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On July 19, 1969, the Government of India nationalized Allahabad Bank, together with 13 other banks. In October, 1989 Allahabad Bank acquired United Industrial Bank, a Calcuttabased bank that had been established in 1940.
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In October, 2002, the bank came out with Initial Public Offer (IPO), which reduced the Government's shareholding to 71%. A second public offering in April, 2005, further reduced the Government shareholding to 55%. In June, 2006, the bank opened a representative office at Shenzen, China, its first office outside India. In February, 2007, Allahabad Bank opened its first overseas branch, in Hong Kong.
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CHAPTER-III DATA ANALYSIS & INTERPRETATION
CHAPTER-III DATA ANALYSIS & INTERPRETATION
Q1.
Which loan have you taken?
options No.of respondent 22 6 2
S.NO.
(A) (B) (C)
Educational loan Home loan Personal loan
INTERPRETATION:73% of the respondent loans have taken education loan.
Q2.
Which types of loan do you prefer most?
Options No.of respondent 21 7 2
S.no.
(A) (B) (C)
Educational loan Home loan Personal loan
INTERPRETATION:70% of the respondent loans have preferred education loan.
Q3.
How many types of loan are provided by Allahabad bank?
S.no.
Options
(A) (B) (C) (D)
30 25 20 15 10 5 0
Educational loan Home loan Personal loan All
No.of respondent 0 0 0 30
Educational loan Hom loan e Pers onal loan All
No.of res pondent
INTERPRETATION:70% of the respondent loans have preferred education loan.
Q4.
For how many years loan is provided by the bank?
S.no.
Options
(A) (B) (C) (D)
25 20 15 10 5 0
1years 2years 3years More than 3years
No.of respondent 0 0 6 24
1years 2years 3years More than 3years
No.of res pondent
INTERPRETATION:80% of the respondent have taken loans for more than 3years which is provided by the bank
Q5.
How much time is given by bank to payback loan?
s.no.
Options
(A) (B) (C)
0 to 2 years 2 to 4 years More than 4 years
No.of respondent 2 13 15
INTERPRETATION:80% of the respondent says that more than 4 years of time is given by bank to payback loan
Q6.
Which types of installment is best?
Options No.of respondent 15 7 7 1
s.no.
(A) (B) (C) (D)
Monthly Quarterly Half year yearly
INTERPRETATION:50% of the respondent says that monthly installment types of installment are best.
Q7.
How is EMI of loan?
s.no.
Options
(A) (B)
Affordable Not affordable
No.of respondent 30 0
INTERPRETATION:100% of the respondent says that EMI of loan is affordable.
Q8.
Which types of securities do they ask usually?
No.of respondent 1 10 19
s.no.
Options
(A) (B) (C)
In the form of Jewelry Fixture Fixed deposit
INTERPRETATION:63% of the respondent says that types of securities do they ask usually is fixed deposit.
Q9.
Are you Satisfy with the rate of interest charged by Allahabad bank?
No.of respondent 29 1
s.no.
Options
(A) (B)
Satisfy Dissatisfy
INTERPRETATION:-
97% of the respondent says that they are Satisfy with the rate of interest charged by Allahabad bank
Q10.
Do your loans provide benefit of Zero percent interest?
S.no.
Options
(A) (B)
Agree Disagree
No.of respondent 29 1
INTERPRETATION:97% of the respondent says that loans provide benefit of Zero percent interest.
Q11.
Is the facility of providing loan is better than other bank?
S.no.
Options
(A) (B)
Yes No
No.of respondent 30 0
INTERPRETATION:100% of the respondent says that the facility of providing loan is better than other bank
Q12.
Do you get timely loan for your benefit?
s.no.
options
(A) (B) (C)
Agree Disagree can’t say
No .of respondent 11 11 8
INTERPRETATION:37% of the respondent says that they are agreeing get timely loan for your benefit.
Q13.
Are you Satisfy with the rate of interest changed?
S.no.
Options
(A) (B) (C) (D)
Ok Less than competitor More than competitor No idea
No.of respondent 10 1 11 0
INTERPRETATION:50% of the respondent says that they more than competitor satisfy with the rate of interest changed.
Q14.
Do you get any relaxation in getting the loan?
s.no.
options
(A) (B) (C)
Agree Disagree can’t say
no. of respondent 22 2 6
INTERPRETATION:73% of the respondent says that they are get any relaxation in getting the loan
Q15.
Are you Satisfy with the down payment system of the bank?
s.no.
options
(A) (B)
Satisfy Dissatisfy
no.of respondent 30 0
INTERPRETATION:73% of the respondent says that they are Satisfy with the down payment system of the bank.
Q16.
According to your view it is easy to pay down payment with out any Complication?
s.no.
options
(A) (B)
Agree Disagree
no.of respondent 28 2
INTERPRETATION:-
93% of the respondent says that According to their view it is easy to pay down payment without any Complication
Q17.
Are you Satisfy with the loan demonstration by the bank?
S.no.
Options
(A) (B)
Satisfy Dissatisfy
No.of respondent 30 0
INTERPRETATION:-
100% of the respondent says that they are Satisfy with the loan demonstration by the bank.
Q18.
Do you agree with the repayment facility of loan is simple in Allahabad bank?
S.no.
Options
(A) (B)
Agree Disagree
No.of respondent 30 0
INTERPRETATION:100% of the respondent says that they are agree with the repayment facility of loan is simple in Allahabad bank
Q19.
Do you find this bank in superior over other banks in providing loan facility?
S.no.
Options
(A) (B)
Agree Disagree
No.of respondent 29 1
INTERPRETATION:100% of the respondent says that they are found this bank in superior over other banks in providing loan facility.
Q20.
Do you fully agree with the terms & condition of Allahabad bank?
S.no.
Options
(A) (B) (C) (D)
Strongly agree Agree Disagree Can’t say
No.of respondent 5 23 0 2
INTERPRETATION:77% of the respondent says that they are agreeing with the terms & condition of Allahabad bank.
CHAPTER-IV
MAJOR FINDINGS SUGGESTIONS CONCLUSION
CHAPTER-IV MAJOR FINDINGS
The following findings have been interprets from the above graph • • • • 73% of the respondent loans have taken education loan. 70% of the respondent loans have preferred education loan. 70% of the respondent loans have preferred education loan. 80% of the respondent have taken loans for more than 3years which is provided by the bank • 80% of the respondent says that more than 4 years of time is given by bank to payback loan • • • 50% of the respondent says that monthly installment types of installment are best. 100% of the respondent says that EMI of loan is affordable. 63% of the respondent says that types of securities do they ask usually is fixed deposit. • 97% of the respondent says that they are Satisfy with the rate of interest charged by Allahabad bank • • 97% of the respondent says that loans provide benefit of Zero percent interest. 100% of the respondent says that the facility of providing loan is better than other bank • • 37% of the respondent says that they are agreeing get timely loan for your benefit. 50% of the respondent says that they more than competitor satisfy with the rate of interest changed.
• •
73% of the respondent says that they are get any relaxation in getting the loan 73% of the respondent says that they are Satisfy with the down payment system of the bank.
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93% of the respondent says that According to their view it is easy to pay down payment without any Complication
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100% of the respondent says that they are Satisfy with the loan demonstration by the bank.
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100% of the respondent says that they are agree with the repayment facility of loan is simple in Allahabad bank
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100% of the respondent says that they are found this bank in superior over other banks in providing loan facility.
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77% of the respondent says that they are agreeing with the terms & condition of Allahabad bank.
SUGGESTIONS
According to banking officials the brochures and pamphlets are not for the general public and are published only for the staff members of the Allahabad Bank As all the other banks including their own diversified business unit keeps brochures for the general public so even they should start providing brochures. as it is when all the information is also available on the net there is no point hiding such information from public.
According to the banking ombudsman scheme every bank must have a customer grievances cell within their organization, but still this is not strictly practiced in most of the organizations, if the ALLAHABAD BANK can handle the customer queries efficiently then they can take an edge over their competitors. The formalities involved in acquiring educational loan are very lengthy and time consuming so certain changes should be brought about in the documentation part to make it more simpler and user friendly.
Although a separate cell for providing information regarding the loans is their within an organization still the information which they provide to the individuals is not satisfactory as they neither have the brochure with them nor do they give proper guidelines to the individuals as from where they can be obtained. The loan recovery pattern followed by Allahabad Bank is very harsh and is generally not liked by the customers. Instead of keeping the brochures and pamphlets in the locked almirahs inside the store rooms They should keep the brochures and pamphlets at a place from where they are easily within the reach of the visitors, so that as and when any individual comes to seek any information related to loans he can first take a look over a brochure and still if he is not satisfied and holds any further queries which need to be sorted out then he should avail the help from the person sitting at the desk. Instead of making an individual run every time to the notary shop to get the notary work done, they should hire a person who would do this on the behalf of an applicant for the bank, and a sum of money should be charged from the applicant so that both the bank and the applicant are not bound with such time consuming formalities. This will be a kind of additional service extended by the bank to the applicant, through which a bank can avail the benefits of the word of mouth publicity in future. The basic requirements like fresh drinking water and toilets should be their not only for the employees but also for the general public who visits the bank. One time information should be given to the applicant so that he is not asked to come again and again to fulfill the obligations of the bank.
CONCLUSION
CONCLUSION
Believe it or not, buying a car is still considered a status symbol in India. Though the advent of the small car has created a huge dent in this reputation, but the fact still remains that a car is a cherished dream of every Indian. Owning a car is made simpler by the fabulous offers by various banks and car finance companies in India on almost every car model. Now, you don't need to book a car ( most of the models) in advance, there is no requirement that you pay entire cost of the car in cash, just have a part of the total cost, add some creditworthiness and rest is filled up by a decent car loan. Almost every car be it used or new is financed and acessible to all those who inspire confidence in banks and car finance companies. With the car loan taking so much importance and lots and lots of information bombarded on the average consumer by different media, it is very easy to get lured into a trap. To know the intricacies of car loans is the only way one can avoid getting into an unwanted situation and later repent in leisure. Here Are a few such things, which can save a lot for every car loan customer.
Earlier it was very difficult for an individual to buy a his dream car because of the financial constraints.. The boom in the banking sector has led to release of large amount of funds for car loan. Now, car loans are easily available from various banks in India and this change is encouraging more and more people to owe luxurious and as per comfort cars despite of their financial shortcomings. Many nationalized banks have come up with various car loan schemes that people can benefit from. Loans from Indian Banks are easily available and the other loans that you can get include the Auto loans, Commercial loans, equipment loans, travel and real estate loans. Some of the Indian banks which offer loans are United Bank of India, IDBI bank, Punjab National Bank, State Bank of India and Oriental bank of commerce etc.The maximum amount of loan offered for car in India is Rs.10 lacs. Different banks have different set of formalities and EMI pattern followed ALLAHABAD BANK is better than other banks in many respects as it offers Good healthy infrastructure, strong heirarchial pattern, proper mix of the youth and the wel experienced staff in their hierarchy, core banking solutions, net banking facility, SMS facility, ATM facility, e-banking facility etc. There are many banks in Bhopal which do not extend education loan in Bhopal like standard chartered bank, IDBI bank etc.
BIBLIOGRAPHY
BIBLIOGRAPHY
1. WEBSITES: www.Allahabad Bank.com www.eassytown.com www.google.com www.valueresearchonline.com
2. BOOKS AND MAGAZINES BERI, G.C. (1999) Marketing Research, Tata McgrawHill. BHALLA,V.K. (2003) Mgt. Of Financial Services, Anmol publication. Kothari, C.R. (1996) Research Methodology, Wishwa Prakashan. Kotler, Philip (1999) Marketing Mgt. Tata McGrawHill RAO, RAMESH, K.S. (1989) Fundamentals of Financial Management, Macmilan Publishing Fact Sheet of Allahabad Bank Ltd. Fact Sheet of ICICI Bank Ltd. 3. OTHER RESOURCES Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1994), "Reassessment of expectations as a comparison standard in measuring service quality: implications for future research", Journal of Marketing, Vol. 58, pp. 111-124. Interrogating SERVQUAL: a critical assessment of service quality measurement in a high street retail bank, Karin Newman, Professor, Middlesex University Business School, London, UK
SUMMARY CHAPTER-I 1. . INTRODUCTION TO THE TOPIC……………………….......... 2. OBJECTIVES OF THE STUDY………………………………. 3. METHODOLOGY……………………………………………. 4. LIMITATIONS……………………………………………….... CHAPTER-II 5. INTRODUCTION TO THE ORGANIZATION………………... 6. RATIONALE OF THE PROJECT……………………………... CHAPTER-III 7. DATA ANALYSIS & INTERPRETATION…………………….. CHAPTER-IV 8.MAJOR FINDINGS………………………………………….... 9.SUGGESTIONS……………………………………………….. 10.CONCLUSION………………………………………………
BIBLIOGRAPHY ANNEXURE
SUMMARY Allahabad Bank offers loans of various types to meet the requirements of the individuals. It offers loans to self employed persons, business men, salaried employees and professionals. The diverse range of Allahabad Bank loans that are offered to the individuals includes:
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Housing Loan Education Loan Car Loan Saral Loan Personal Loans for Pensioners Personal Loans for Doctors Loan against NSC/KVP Allbank Rent Loan Allbank Property Scheme Allbank Furnishing Loan Gold Loan Scheme All Bank Mobike Scheme AllBank Abhushan Scheme Allbank Trade Scheme AllBank Gyan Dipika Scheme AllBank Reverse Mortgage Scheme
The car loans by the Allahabad Bank are given for the purchase of the new vehicle, which are to be for personal use only. It also offers loans for the purchase of pre- owned vehicle, which is not more than 3 years old. To get the benefit of the loan, the person should be a salaried person, with the gross income of Rs. 10,000 p.m. Agriculturalists and professional self employed and business men are also eligible to get loans from Allahabad Bank. It must be kept in mind that the
car loan should be fully repaid before the individual turns 70 years of age. The car loan amount that is offered to the individual does not exceed 2 times of the Net Annual Income or Net Annual Salary. Allahabad Bank Home Loans Allahabad Bank offer home loans for the construction of the residential house on the already owned land. It also offers loans for other purposes like purchase of plot by salaried people, purchase of flat or house, renovation of residential house and other purposes. Home loans are offered to permanent salaried people, businessmen, self employed persons and individuals with regular income who can liquidate loans. Allahabad Bank offers term loans to the loan seekers. For the salaried persons the loan amount is restricted to 60 times of the monthly gross salary. For other individuals, the loan amount is limited to 4 times of the gross income. Allahabad Bank Education Loans The educational loans are offered by the Allahabad Bank to the Indian students only. The students should seek admission to educational courses through entrance test selection process. The bank offers loans for various courses like graduation and post graduation courses, professional courses, computer certificate courses, courses conducted by IIM, IIT etc. Allahabad Bank offers loans for studies abroad as well. For the students studying in India, the maximum loan amount offered is Rs.10 lacs and for studying abroad the maximum loan amount increases to Rs. 20 lacs.
Allahabad Bank Personal Loans Personal loans are offered to all the pensioners drawing pensions from Allahabad Bank. The personal loans are given to the pensioners who have not exceeded 70 years of age. This kind of loan can be availed without assigning any definite purpose. The maximum loan amount of Rs.75,000 and minimum of Rs.15,000 are offered to the individuals. Personal loans are also provided to the doctors and medical practitioners by the Allahabad Bank. The loans are offered for the expenses of professional requirement. Annual income or Rs. 5 lacs, whichever is less are offered as the loan amount. Allahabad Bank Loans are offered to the Non Resident Indians as well. NRIs are offered housing loans and education loans by this bank. How you use the money is entirely up to you. Personal loans are unsecured loans with a fixed payment schedule and payment amount. Use them to consolidate debt, pay off a credit card, or put money in the bank. One can apply quickly for personal loan today and quickly access cash and also pay of credit cards make upgrades to your home. And confidential and secure no-obligation quotes. One can get from Allahabad bank which provides it at very low rate of interest.For students bank can understand that paying for college can be difficult. Find low-interest public and private loans specifically designed for students. Private loans help students fill the gap when federal loans, scholarships, and grants don't cover all of your college expenses. That's why we made getting the additional funds you need an easy process. Federal aid doesn't always cover all of the costs and Many student loans don't require repayment until graduation and also interest rates on student loans is generally lower than other loan types All for this is the bank from which student can get the loan. One person always have the dream of his own house and Allahabad bank get the dream to fulfill through home loans.Whether you're looking to purchase a home, refinance an existing mortgage, or take out a low interest second mortgage to consolidate loans or get some cash, lenders are standing by to compete for your business. Credit.com has partnered with Home-Account.com to help guide you through the process. Bank provide the home loan based on your income, learn how much house you can afford , Find out if
refinancing makes sense (dollars and cents) for you and also Discover if points on a mortgage is a good investment , also avoid common mistakes on the path to home ownership.
CHAPTER-I 1. RATIONALE OF THE PROJECT 2. OBJECTIVES OF THE STUDY 3. METHODOLOGY 4. LIMITATIONS
CHAPTER-I
INTRODUCTION TO THE TOPIC
Loan
A loan is a type of debt. Like all debt instruments, a loan entails the redistribution of financial assets over 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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Types of loans
Secured
A secured loan is a loan in which the borrower pledges some asset (e.g. a car or property) as collateral for the loan. A mortgage loan is a very common type of debt instrument, used by many individuals to purchase housing. In this arrangement, the money is used to purchase the property. The financial institution, however, is given security — a lien on the title to the house — until the mortgage is paid off in full. If the borrower defaults on the loan, the bank would have the legal right to repossess the house and sell it, to recover sums owing to it. In some instances, a loan taken out to purchase a new or used car may be secured by the car, in much the same way as a mortgage is secured by housing. The duration of the loan period is considerably shorter — often corresponding to the useful life of the car. There are two types of auto loans, direct and indirect. A direct auto loan is where a bank gives the loan directly to a consumer. An indirect auto loan is where a car dealership acts as an intermediary between the bank or financial institution and the consumer. A type of loan especially used in limited partnership agreements is the recourse note. A stock hedge loan is a special type of securities lending whereby the stock of a borrower is hedged by the lender against loss, using options or other hedging strategies to reduce lender risk.[citation needed] A pre-settlement loan is a non-recourse debt, this is when a monetary loan is given based on the merit and awardable amount in a lawsuit case. Only certain types of lawsuit cases are eligible for a pre-settlement loan.[citation needed] This is considered a secured non-recourse debt due to the fact that if the case reaches a verdict in favor of the defendant the loan is forgiven.
Unsecured
Unsecured loans are monetary loans that are not secured against the borrower's assets. These may be available from financial institutions under many different guises or marketing packages:
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credit card debt personal loans bank overdrafts credit facilities or lines of credit corporate bonds
The interest rates applicable to these different forms may vary depending on the lender and the borrower. These may or may not be regulated by law. In the United Kingdom, when applied to individuals, these may come under the Consumer Credit Act 1974.
Demand
Demand loans are short term loans that are atypical in that they do not have fixed dates for repayment and carry a floating interest rate which varies according to the prime rate. They can be "called" for repayment by the lending institution at any time. Demand loans may be unsecured or secured.[1]
Loan payment
The most typical loan payment type is the fully amortizing payment in which each monthly rate has the same value overtime.[2] The fixed monthly payment P for a loan of L for n months and a monthly interest rate c is: [3]
Abuses in lending
Predatory lending is one form of abuse in the granting of loans. It usually involves granting a loan in order to put the borrower in a position that one can gain advantage over him or her. Where the moneylender is not authorized, they could be considered a loan shark. Usury is a different form of abuse, where the lender charges excessive interest. In different time periods and cultures the acceptable interest rate has varied, from no interest at all to unlimited interest rates. Credit card companies in some countries have been accused by consumer organisations of lending at usurious interest rates and making money out of frivolous "extra charges".[4] Abuses can also take place in the form of the customer abusing the lender by not repaying the loan or with an intent to defraud the lender.
taxes
Most of the basic rules governing how loans are handled for tax purposes in the United States are uncodified by both Congress (the Internal Revenue Code) and the Treasury Department (Treasury Regulations — another set of rules that interpret the Internal Revenue Code).[5] Yet such rules are universally accepted.[6] 1. A loan is not gross income to the borrower.[7] Since the borrower has the obligation to repay the loan, the borrower has no accession to wealth.[8] 2. The lender may not deduct the amount of the loan.[9] The rationale here is that one asset (the cash) has been converted into a different asset (a promise of repayment). [10] Deductions are not typically available when an outlay serves to create a new or different asset.[11] 3. The amount paid to satisfy the loan obligation is not deductible by the borrower.
[12]
4. Repayment of the loan is not gross income to the lender.[13] In effect, the promise of repayment is converted back to cash, with no accession to wealth by the lender.[14] 5. Interest paid to the lender is included in the lender’s gross income.[15] Interest paid represents compensation for the use of the lender’s money or property and thus represents profit or an accession to wealth to the lender.[16] Interest income can be attributed to lenders even if the lender doesn’t charge a minimum amount of interest.[17] 6. Interest paid to the lender may be deductible by the borrower.[18] In general, interest paid in connection with the borrower’s business activity is deductible, while interest paid on personal loans are not deductible.[19] The major exception here is interest paid on a home mortgage.[20]
Income from discharge of indebtedness
Although a loan does not start out as income to the borrower, it becomes income to the borrower if the borrower is discharged of indebtedness. [21] Thus, if a debt is discharged, then the borrower essentially has received income equal to the amount of the indebtedness. The Internal Revenue Code lists “Income from Discharge of Indebtedness” in Section 62(a)(12) as a source of gross income. Example: X owes Y $50,000. If Y discharges the indebtedness, then X no longer owes Y $50,000. For purposes of calculating income, this should be treated the same way as if Y gave X $50,000. For a more detailed description of the “discharge of indebtedness”, look at Section 108 (Cancellation of Debt (COD) Income) of the Internal Revenue Code.[22]
Research Design
This dissertation is consisted by the following structure of five chapters which can be seen in below: Figure 1.1: Research Design
Chapter 1: Introduction
Chapter 2: company profile
Chapter 3: Research Methodology
Chapter 4: Data Analysis – Results
Chapter 5: Conclusions
Loan offered by Allahabad bank
1.1Emergency Loans We need a loan every time we face a situation where we can not meet the ends meet and we need some kind of financial injection that’ll cure the problem. Specially in emergencies, getting a loan can really help and once the emergency is over, repaying that loan never feels like a burden. Emergencies can vary, one might have to travel to attend an important an event like a wedding or a tragic family funeral or might require some quick cash in order to pay for expensive medicines if he/she falls sick etc. Ever now and then we face a situation where things are not under our control and if you are low on savings or have low income, a loan provided in emergency does feel like a blessing. In such cases, people mostly prefer short term loans that they mean to pay back on the next pay day or a couple of months max. The best places to get a loan are the financial institutions but you can also apply for payday advance loans that are available online. Google the terms and you’ll see how many choices can be found online.Apply now for an EmergencLoan 1.2 Home Loans Banks, as I am sure that you are already aware of, can also provide loans. People usually apply in banks for large sum of loans for instance home loans. First time home buyers mostly plan to spend around a hundred and fifty thousand (USD $150,000) to three hundred thousand dollars ($300,000). For the first time home buyers, it’s absolutely important that they find a bank which is offering home loans on lower interest rates and with a good 25-30 years of repayment schedule. 1.3 Car loans / Auto Loans At present, one of the most widely used and important loan for a common man is a car loan. These types of loans are designed for people who want to purchase a car and are normally known as car loans or auto loans. You can apply for a car loan regardless what kind of car you are looking for. It can be a small more economical compact car or it can
also be a SUV. The amount of loan that you want to borrow and the interest rates will heavily depend on your credit, your monthly income and your age. If you have a poor employment history then that will also have a negative effect on the total amount and the interest rate associated with the loan. 1.4 Student Loans You can apply for a student loan if you are going to a college or a trade school. You can also apply for student loan if you want to get a new diploma in a specialized field. You can get in touch with government or private sector lenders to borrow these loans. What you have to make sure is that you strike a deal where you don’t have to pay high interest rates. If you are going to a trade school then there is a good chance that you won’t have to borrow as much money as you would if you are going to join a college and graduate in 4 years. With trade schools, your loan repayment schedule will begin after you have graduated. 1.5 Personal Loans People need loans for personal needs, needs that do not really have anything to do with the basic necessities of life like medical, car loans or loans for home purchasing. For instance personal needs like traveling during holidays, cosmetic surgeries, going out for a lovely honeymoon or getting a loan to have a wedding of your dream. This type of loan is known as Personal loan. Usually personal loans carry a higher interest rate because these loans are tailor made for personal needs of the borrower that vary from case to case. Before you apply for personal loans with a financial institute, you should do a little research on the internet. There is a good chance that you will find a lender that is offering these loans on lower interest rates. 1.6 Credit Cards Many people do not realize that by using credit cards, they are already using loans. In fact, many Americans believe that they just have to have a credit card because for them
it’s a thing that everybody has which can also lead you to believe that their interest rates are the lowest possible interest rates and life can become very easy thanks to credit cards. The fact is that credit cards are the biggest loan industry in the world, left alone America. It makes your life easier by giving facilities like not paying using cash or having to buy something off the shelf when you don’t have enough to pay for it at once but the interest rates are pretty high compared to any other loan. There are good chances that you will miss paying a monthly bill because lets face it, sometimes work and domestic issues can lead to missing out the deadline of the bill that you need to clear before you cross the due date and that will leave a big bad stain on your credit report.
Housing loans
The housing finance market is on a high growth trajectory. Over the last seven years, it has grown exponentially from Rs4630 crore in 1996-97 to an estimated Rs42, 000 crore in 2003-04. This makes it one of fastest growing industries in the country, with growth rates in excess of 37 percent per annum. Going by the shortage of housing in the country, it is poised to grow at a similar pace for the next three years at least. The penetration of housing in India is among the lowest in the world, with a housing –to-GDP ratio of 2 percent. By contrast, in most Asian countries the ratio is around 15 percent. Government estimates of housing shortage in the country are 1.9crore units. Also, on the financing side, household debt-to-GDP ratio in India is around 4 percent, much lower than the 25-30 percent in most Asian countries. Retail buyers have mushroomed over the last couple of years, thanks to growing income levels, low penetration of housing, fall in retail property prices and steep fall in interest rates on housing loans. In the last seven years, interest rates have come down by over 50 percent (from 14 percent to 7 percent), resulting in huge savings. Now a 20-years Rs 10 lakh loan will save the customer over Rs 11.24 lakh in interest costs.
Falling interest rates have further boosted an individual’s preference to avail credit. Now almost 60-65 percent of individuals finance their home through a mortgage as against 30-35 percent five years ago.A reason for this growth is that consumers ,particularly the younger generation ,have become less debt averse. The average age of individuals opting for a housing loan has fallen to around 32 years as against an age of early 40’s around seven years ago. Another reason that has contributed to the growth in housing finance is the sharp rise in disposable income levels. The cost of a house today is merely five times the average annual income. About seven years ago, it used to be more than 20 years income. Back then it was also difficult to get a loan for more than 7-8 years, now loans are offered for a period of 15-20 years. Besides, property prices have stayed in the last 3-4 years. Having peaked in the mid –90’s, prices tumbled by more than 40 percent, making homes more affordable .the Indian buyer has also become more quality conscious .now they want facilities like schools, hospitals, shopping malls, recreation centers and health clubs close to their place of residence. Developers have tuned into their demands and are offering quality products, thus giving an all –round push to housing and housing finance. The housing finance portfolio is considered safe as loan defaults have traditionally been below 1 percent. this is why many public sector banks and foreign banks have entered the industry. In fact, in the last three years, banks have tripled their exposure to retail loans –the bulk of which is towards housing-from about 5 percent of the total credit three years ago to 14-17 percent. Adoption of prudential norms with reference to capital adequacy asset classification. Income recognition and provisioning has improved the internal health, i.e.
the soundness and solvency of each Bank. Banks have made major headway in housing finances where the competition is the severest. The main reason for this is that this product offers maximum security, fixed yield, long repayment period and opportunities into the banks cross sell other products. Due to income tax exemption for interest &repayment and eligibility for coverage under priority sector. Advances, the share of housing finances in retail banking operations is the largest. Housing Finance is the fastest growing sub- segment in retail Finance. Incidence of NPA is also the lowest in this sub segment being only around 0.50 to 0.75 percent of total finance. The total market size of HF is present Rs.25000 and is expect to grow at an annual growth of 30%. Housing is a priority area even for the government, which is providing various incentives for boosting growth and development in this sector, the factors responsible for growth in this sub segment have been: • • Repeat of urban land ceiling Act Fall in the prices of real estate to more realistic levels and increase in income levels resulting in improved ratio of cost of housing to annual income 14.66 to 5.22 in 2001-02 • Deduction of interest paid on housing loans from total income for calculation of Income tax and rebate under section 88 for repayment of principal up to Rs. 20000 p.a. However, reforms are necessary in stamp act and tenancy has to give further boost to this sector. Although of the implementation of the Kelkar committee recommendation might result in a set back to the development of this sector. Home Financing had been a safe proposition as instances of NPA have minimal. But the story has changed of late and home loan players are being forced to do a rethink.
The first hint of a revision in strategy was done by an unassuming Union Bank of India. The bank hiked its interest rates for fresh home by 50bps. (Ref. The Financial Express March 15,2004). The latest buzzword in the real estate market is for home finance companies to purchase real estate and then lease it out to multinational companies. ALLAHABAD BANK Home Finance has invested Rs.200 crore in acquiring space in hi- tech cities across in India, which are then rented out to IT companies. Home finance sector leader Housing Development Finance Corporation (HDFC) proposes to set up a separate entity for acquiring and leasing properties to corporate clients. The housing finance major proposes to set up a separate entity with 49% equity holding which will acquire properties and lease them to MNCs. “there is a good potential for such business in the country as currently there are no institution property finance companies willing to own property and lease them out to corporate."
HOUSING FINANCE SECTOR
Against the milieu of rapid urbanization and a changing socio-economic scenario, the demand for housing has grown explosively. The importance of the housing sector in the economy can be illustrated by a few key statistics. According to the National Building Organization (NBO), the total demand for housing is estimated at 2 million units per year and the total housing shortfall is estimated to be 19.4 million units, of which 12.76 million units is from rural areas and 6.64 million units from urban areas. The housing industry is the second largest employment generator. It is estimated that the budgeted 2 million units would lead to the creation of an additional 10 million man-years of direct employment and another 15 million man-years of indirect employment. Having identified housing as a priority area in the Ninth Five Year Plan (1997-2002), the National Housing Policy has envisaged an investment target of Rs.
1,500 billion for this sector. In order to achieve this investment target, the Government needs to make low cost funds easily available and enforce legal and regulatory reforms. Thus the research indicates that customer are seeking more than just a loan, they seek convenience in the entire process of acquiring a home loan as well as finance for it. The aim is to make the process seamless for the customer by offering access to the complete real estate market in his city at one place, helping him to select the property as per the requirement, guiding him through the documentation and also providing the loan. Leading players are looking at acquiring the customer not only through fresh application, but also through refinance.
Importance of customer satisfaction
Customer satisfaction has been regarded as an important theoretical and practical issue for many academics and most marketers (e.g. Dabholkar et al., 1996; Fournier and Mick, 1999). Unfortunately, today many managers still think that customer satisfaction is not something necessary and important element of success (Goodman and Ward, 1993). However, customer satisfaction is very crucial for the success of the companies in this competitive world of business and more and more companies recognize its importance as a serious organizational goal (Jamal and Naser, 2002; Bitner and Hubbert, 1994). Similarly, Bhote (1996) refer that “clearly defining and understanding customer satisfaction can help any company identify opportunities for product and service innovation and serve as the basis for performance appraisal and reward systems”. Additionally, Lynch (1995) argues that organizations in order to increase their customer satisfaction must take into consideration five key elements: self-esteem, security, information for customers and “atmospherics”.
RATIONALE OF THE PROJECT
1). Longer tenure of loans, ranging from minimum 5 years to 20/30 years. Higher outlays of funds longer duration of housing loans make it different from that of other retail loans. Therefore the risk horizon also differs for the hosing loans. 2). Rather low cost of operations in terms of deployment of manpower for processing and follow up etc. as compared to other loans of the same size within the retail or any other segments. 3). Safe advances, as these are invariably backed by tangible security in the form of mortgage of house/flat. 4). Tendency to default on housing loan is low as house is considered as big ticket deal of an individual’s life. 5). At present, the housing loan portfolio of banks is highly sensitive to sops announced by the government on exemption on personal tax.
1.
OBJECTIVES OF THE STUDY
To get a fair view of the functioning of the vehicle finance department in a banking organization. To know about the inflow and the outflow of the funds in the loans department. To know the reason behind the fluctuation in the interest rates charged by banks. To know about the various competitors which really give a tough competition to the I.C.I.C.I bank. To know about the role played by reserve bank of India in deciding the interest rate charged on loans by any bank. To know about the basis for calculating the loan interest rate. To do the comparative study on the basis of the interest rates charged by various banks. To know about the various deciding factors for any individual before taking car loan from any bank. How is Allahabad Bank better than other banks in terms of extending loans and serving their customers? What is the customer base of ALLAHABAD BANK? What are the formalities that an individual is supposed to comply with before acquiring for educational loan from Allahabad Bank? How can ALLAHABAD BANK bank take an edge over their competitors? How far are the customers satisfied with the services extended by Allahabad Bank and what changes do they expect that can be brought about to have a smooth functioning of the loans department? How far are the employees satisfied with the functioning of the loans department of their bank and how can the changes be brought about to make the functioning more effective and efficient?
METHODOLOGY
After we have discussed the relevant past research in regard to our research problem ,now in this Chapter we are going to proceed and explain the research methodology that we have used for our project. The main discussed issues will be based to the six proposed stages of the research process by Zikmund (1994)
Problem discovery and definition According to Malhotra and Birks (2003, p.31), problem definition can be defined “the general problem and the identification of the specific components of the research problem”. Parasuraman (1991) refer that is critical to define the problem in order to communicate it correctly to both decision - makers and researchers, however at the same time we should fully understand the scope and the nature of the problem avoiding any misconceptions. Research design “The Research Design is the ‘blueprint’ that enables the investigator to come up with solutions to these problems and guides him or her in the various stages of the research” (Nachmias and Nachmias, 1996; Churchill, 1991). Research design involves different research techniques that we are going to use to get the information needed relevant to the problem, the measurement and scaling techniques for understanding the collected information, the questionnaire design etc (Lawley and Gardiner, 1999; Malhotra and Birks, 2003). Also Tull and Hawkins (1987) argue that one of important research
design’s goals is to maximize the accuracy of the gathered information to create a proper budget level. Research design can be broadly classified in some basic types. One useful classification is the one that is related with the main target of the research into three main categories which are: (i) Exploratory research, (ii) Descriptive research and (iii) Causal research (e.g. Churchill, 1979; Green and Tull, 1978). Exploratory research The primary goals of research design are to help to the understanding of marketing phenomena, determine the problem in a better way and provide additional insights and ideas (Malhotra and Birks, 2003; McDaniel and Gates, 1999). Descriptive research Descriptive research is a very important research design method and may be undertaken to describe something e.g. consumer’s beliefs and attitudes, other market characteristics etc (Parasuraman, 1991; Jobber, 2004). According to Churchill (1979, p.53-54) descriptive research can be used to describe the characteristics of certain groups, to estimate the proportion of people in a specified population who behave in a certain way and to make specific predictions. Causal research Causal research “is used to obtain evidence of cause-and-effect (causal) relationships” (Malhotra and Birks, 2003, p.69). The most common types of causal studies are the experiments, since they are the best to determine the cause and the effect (Churchill, 1979; Zikmund, 2000). The research approach and strategies
This is the first stage of the research design; it involves the way that we are going to conduct the research. The choice of the research is a difficult decision and it depends on the nature and scope of the problem, the funding of the research and to the availability of the time (Birn, 2000). Secondary data Secondary data are the data gathered or authored by another person who has a different research purpose from that of the initial researcher (Bailey, 1982). Secondary data include internal published data such as annual company reports, reports to stockholders and external published data such as government reports and statistics (McDaniel & Gates, 1999; Peneault & McCarthy, 1997). In addition, another form of collecting secondary data is the search engines (e.g. Google) where the data can be quickly and simply collected (Jobber, 2004). Primary data Primary data are “the data originated by the researcher specifically address the research problem” (Malhotra and Birks, 2003, p.85). Parasuraman (1991) argues that primary data are necessary where the secondary data are unavailable or inappropriate and can be collected by several methods. The purpose of primary data collection is the answering of questions of the defined problem of the study (Dodge et al., 1982). Below we are going to refer to the three main types of primary research. Surveying Surveys are regarded to be the most popular method of collecting primary data and are used to describe marketing phenomena at a particular time (Dodge et al., 1982). “Survey
techniques are the techniques based upon the use of structured questionnaires given to a sample of a population” (Malhotra and Birks, 2003, p.224). The main advantages of surveys are that they are more objective and reliable; they have a more representative sample of the target population; the gathered data can be manipulated with the use of statistical techniques; the collection of the information is not time consuming, costly and difficult (Dodge et al., 1982; Emory, 1980; Zikmund, 2000). Observations Observation method is defined as “the systematic process of recording the behavioural patterns of people, objects and occurrences without questioning or communicating with them” (Zikmund, 2000, p.217). McDaniel and Gates (1999) argue that there are three conditions for using observation research. These are: a) the observation research duration should be of relatively short duration; b) the needed information must be observable or inferable; c) the behaviour of the interest should be relatively frequent, repetitive and predictable. Experiments Experiment is “a research investigation in which conditions are controlled so that one or more variables can be manipulated in order to test a hypothesis”. The main purpose of the experimental research is the control of the research evaluation in order to evaluate causal relationships between several variables (Zikmund, 2000, p.238). The research method After we have chosen the survey method as the research approach that we are going to use we should talk now for the four options when choosing that method. As we have said
before, the survey method is based on the use of a structured questionnaire given to respondents to obtain useful information (Malhotra and Birks, 2003). Face-to-face surveys Personal or face-to-face interviewing “is a two-way purposeful conversation initiated by an interviewer to obtain information that is relevant to some research purpose” (Emory, 1980, p.293). The interviewer asks from the respondent to answer issues in the form of attitudes, opinions, feelings, motives, intentions and so on; thus the personal interviewing is regarded as an excellent data collection method because of the great personal interaction between the interviewer and the respondent (Dodge et al., 1982). Telephone surveys Telephone survey can be characterized as a semi-personal method of collecting information which is very popular because of the widespread acceptance of the telephone from all the people as a basic communication tool (Nachmias and Nachmias, 1996). Mail and internet surveys A mail survey is self-administered questionnaire sent to respondents through the mail. On the other hand, internet survey appears when a computer user intentionally navigates and answers questions in a web site (Zikmund, 2000, p.201+210). Questionnaire construction “A questionnaire is simply a set of questions designed to generate the data necessary for accomplishing a research project’s objectives” (Parasuraman, 1991, p.363). Malhotra and Birks (2003) present the questionnaire design process in ten steps, as shown in Figure 3.2.
Figure 3.2: Questionnaire design process
Source: Malhotra N.K. and Birks D.F. (2003). “Marketing Research: An Applied Approach”, 2nd European Edition, England: FT Prentice Hall
There are three conditions that are important researchers to take into consideration in order to get a true response to questions. These are: i) the questions must be clear for respondents; ii) respondents must be able to give the information; iii) respondents must be reluctant to answer (Jobber, 2004). Pilot testing In order to identify and eliminate any potential problems in the functionality of the questionnaire and ensure that there aren’t any mistakes in it, Sampling Another key component in the research process is the selection of the sample population that we are going to study (Emory, 1980).
Data collection As we have said in previous sessions we have used face-to-face interviews to collect any data and information for our study.
4. LIMITATIONS
LIMITATIONS LIMITATIONS Educational loan is not offered by Allahabad Bank in Bhopal. Interest rates charged on CAR loan is very high. Lot many formalities like notary, guarantors etc are involved. The documentation part is very lengthy and time consuming. They don’t have any customer redressal system. Whenever any individual acquires for any loan from ALLAHABAD BANK. bank, he does not gets a proper information and guidance from the staff working their. They give More priority to their personal work and do not readily listen to the customer until they are done with their work, in short the customer does not holds a top place in their priority list. The staff does not gives proper directions and guidelines to guide the customer as in how the customer should move further with the further proceedings. Inspite of the centralized air conditioning the atmosphere inside is very sticky. A lot of hidden charges are there at various transactional levels. At time it is experienced that the staff working there is relatively inexperienced as is comprises of the youth which does not live upto the expectations of the customers.
The recovery system adopted by Allahabad Bank is considered to be unethical and also illegal at times.
CHAPTER-II
• INTRODUCTION TO THE ORGANIZATION • INTRODUCTION TO THE TOPIC
CHAPTER-II
INTRODUCTION TO THE ORGANIZATION
Allahabad Bank
Allahabad Bank,(Hindi: इलाहाबाद बैक) which began operations in 1865, now has its headquarters in Kolkata. Currently the bank has 2260 branches
[1]
across the country. The
Chairman and Managing Director of the bank is Shri J P Dua. The bank has a branch in Hong Kong and a representative office in Shenzen. The bank's internet banking is maintained by EBankWorks Team of TCS.
History
•
On April 24, 1865, a group of Europeans founded the bank at Allahabad, making it the oldest Joint Stock bank in India. In 1920, P&O Bank bought Allahabad Bank. In 1923 the bank moved its headquarters to Calcutta. In 1927, Chartered Bank of India, Australia and China acquired and amalgamated P&O Bank. However, Chartered Bank continued to operate Allahabad Bank as a separate entity.
• • •
•
On July 19, 1969, the Government of India nationalized Allahabad Bank, together with 13 other banks. In October, 1989 Allahabad Bank acquired United Industrial Bank, a Calcuttabased bank that had been established in 1940.
•
•
In October, 2002, the bank came out with Initial Public Offer (IPO), which reduced the Government's shareholding to 71%. A second public offering in April, 2005, further reduced the Government shareholding to 55%. In June, 2006, the bank opened a representative office at Shenzen, China, its first office outside India. In February, 2007, Allahabad Bank opened its first overseas branch, in Hong Kong.
•
•
•
CHAPTER-III DATA ANALYSIS & INTERPRETATION
CHAPTER-III DATA ANALYSIS & INTERPRETATION
Q1.
Which loan have you taken?
options No.of respondent 22 6 2
S.NO.
(A) (B) (C)
Educational loan Home loan Personal loan
INTERPRETATION:73% of the respondent loans have taken education loan.
Q2.
Which types of loan do you prefer most?
Options No.of respondent 21 7 2
S.no.
(A) (B) (C)
Educational loan Home loan Personal loan
INTERPRETATION:70% of the respondent loans have preferred education loan.
Q3.
How many types of loan are provided by Allahabad bank?
S.no.
Options
(A) (B) (C) (D)
30 25 20 15 10 5 0
Educational loan Home loan Personal loan All
No.of respondent 0 0 0 30
Educational loan Hom loan e Pers onal loan All
No.of res pondent
INTERPRETATION:70% of the respondent loans have preferred education loan.
Q4.
For how many years loan is provided by the bank?
S.no.
Options
(A) (B) (C) (D)
25 20 15 10 5 0
1years 2years 3years More than 3years
No.of respondent 0 0 6 24
1years 2years 3years More than 3years
No.of res pondent
INTERPRETATION:80% of the respondent have taken loans for more than 3years which is provided by the bank
Q5.
How much time is given by bank to payback loan?
s.no.
Options
(A) (B) (C)
0 to 2 years 2 to 4 years More than 4 years
No.of respondent 2 13 15
INTERPRETATION:80% of the respondent says that more than 4 years of time is given by bank to payback loan
Q6.
Which types of installment is best?
Options No.of respondent 15 7 7 1
s.no.
(A) (B) (C) (D)
Monthly Quarterly Half year yearly
INTERPRETATION:50% of the respondent says that monthly installment types of installment are best.
Q7.
How is EMI of loan?
s.no.
Options
(A) (B)
Affordable Not affordable
No.of respondent 30 0
INTERPRETATION:100% of the respondent says that EMI of loan is affordable.
Q8.
Which types of securities do they ask usually?
No.of respondent 1 10 19
s.no.
Options
(A) (B) (C)
In the form of Jewelry Fixture Fixed deposit
INTERPRETATION:63% of the respondent says that types of securities do they ask usually is fixed deposit.
Q9.
Are you Satisfy with the rate of interest charged by Allahabad bank?
No.of respondent 29 1
s.no.
Options
(A) (B)
Satisfy Dissatisfy
INTERPRETATION:-
97% of the respondent says that they are Satisfy with the rate of interest charged by Allahabad bank
Q10.
Do your loans provide benefit of Zero percent interest?
S.no.
Options
(A) (B)
Agree Disagree
No.of respondent 29 1
INTERPRETATION:97% of the respondent says that loans provide benefit of Zero percent interest.
Q11.
Is the facility of providing loan is better than other bank?
S.no.
Options
(A) (B)
Yes No
No.of respondent 30 0
INTERPRETATION:100% of the respondent says that the facility of providing loan is better than other bank
Q12.
Do you get timely loan for your benefit?
s.no.
options
(A) (B) (C)
Agree Disagree can’t say
No .of respondent 11 11 8
INTERPRETATION:37% of the respondent says that they are agreeing get timely loan for your benefit.
Q13.
Are you Satisfy with the rate of interest changed?
S.no.
Options
(A) (B) (C) (D)
Ok Less than competitor More than competitor No idea
No.of respondent 10 1 11 0
INTERPRETATION:50% of the respondent says that they more than competitor satisfy with the rate of interest changed.
Q14.
Do you get any relaxation in getting the loan?
s.no.
options
(A) (B) (C)
Agree Disagree can’t say
no. of respondent 22 2 6
INTERPRETATION:73% of the respondent says that they are get any relaxation in getting the loan
Q15.
Are you Satisfy with the down payment system of the bank?
s.no.
options
(A) (B)
Satisfy Dissatisfy
no.of respondent 30 0
INTERPRETATION:73% of the respondent says that they are Satisfy with the down payment system of the bank.
Q16.
According to your view it is easy to pay down payment with out any Complication?
s.no.
options
(A) (B)
Agree Disagree
no.of respondent 28 2
INTERPRETATION:-
93% of the respondent says that According to their view it is easy to pay down payment without any Complication
Q17.
Are you Satisfy with the loan demonstration by the bank?
S.no.
Options
(A) (B)
Satisfy Dissatisfy
No.of respondent 30 0
INTERPRETATION:-
100% of the respondent says that they are Satisfy with the loan demonstration by the bank.
Q18.
Do you agree with the repayment facility of loan is simple in Allahabad bank?
S.no.
Options
(A) (B)
Agree Disagree
No.of respondent 30 0
INTERPRETATION:100% of the respondent says that they are agree with the repayment facility of loan is simple in Allahabad bank
Q19.
Do you find this bank in superior over other banks in providing loan facility?
S.no.
Options
(A) (B)
Agree Disagree
No.of respondent 29 1
INTERPRETATION:100% of the respondent says that they are found this bank in superior over other banks in providing loan facility.
Q20.
Do you fully agree with the terms & condition of Allahabad bank?
S.no.
Options
(A) (B) (C) (D)
Strongly agree Agree Disagree Can’t say
No.of respondent 5 23 0 2
INTERPRETATION:77% of the respondent says that they are agreeing with the terms & condition of Allahabad bank.
CHAPTER-IV
MAJOR FINDINGS SUGGESTIONS CONCLUSION
CHAPTER-IV MAJOR FINDINGS
The following findings have been interprets from the above graph • • • • 73% of the respondent loans have taken education loan. 70% of the respondent loans have preferred education loan. 70% of the respondent loans have preferred education loan. 80% of the respondent have taken loans for more than 3years which is provided by the bank • 80% of the respondent says that more than 4 years of time is given by bank to payback loan • • • 50% of the respondent says that monthly installment types of installment are best. 100% of the respondent says that EMI of loan is affordable. 63% of the respondent says that types of securities do they ask usually is fixed deposit. • 97% of the respondent says that they are Satisfy with the rate of interest charged by Allahabad bank • • 97% of the respondent says that loans provide benefit of Zero percent interest. 100% of the respondent says that the facility of providing loan is better than other bank • • 37% of the respondent says that they are agreeing get timely loan for your benefit. 50% of the respondent says that they more than competitor satisfy with the rate of interest changed.
• •
73% of the respondent says that they are get any relaxation in getting the loan 73% of the respondent says that they are Satisfy with the down payment system of the bank.
•
93% of the respondent says that According to their view it is easy to pay down payment without any Complication
•
100% of the respondent says that they are Satisfy with the loan demonstration by the bank.
•
100% of the respondent says that they are agree with the repayment facility of loan is simple in Allahabad bank
•
100% of the respondent says that they are found this bank in superior over other banks in providing loan facility.
•
77% of the respondent says that they are agreeing with the terms & condition of Allahabad bank.
SUGGESTIONS
According to banking officials the brochures and pamphlets are not for the general public and are published only for the staff members of the Allahabad Bank As all the other banks including their own diversified business unit keeps brochures for the general public so even they should start providing brochures. as it is when all the information is also available on the net there is no point hiding such information from public.
According to the banking ombudsman scheme every bank must have a customer grievances cell within their organization, but still this is not strictly practiced in most of the organizations, if the ALLAHABAD BANK can handle the customer queries efficiently then they can take an edge over their competitors. The formalities involved in acquiring educational loan are very lengthy and time consuming so certain changes should be brought about in the documentation part to make it more simpler and user friendly.
Although a separate cell for providing information regarding the loans is their within an organization still the information which they provide to the individuals is not satisfactory as they neither have the brochure with them nor do they give proper guidelines to the individuals as from where they can be obtained. The loan recovery pattern followed by Allahabad Bank is very harsh and is generally not liked by the customers. Instead of keeping the brochures and pamphlets in the locked almirahs inside the store rooms They should keep the brochures and pamphlets at a place from where they are easily within the reach of the visitors, so that as and when any individual comes to seek any information related to loans he can first take a look over a brochure and still if he is not satisfied and holds any further queries which need to be sorted out then he should avail the help from the person sitting at the desk. Instead of making an individual run every time to the notary shop to get the notary work done, they should hire a person who would do this on the behalf of an applicant for the bank, and a sum of money should be charged from the applicant so that both the bank and the applicant are not bound with such time consuming formalities. This will be a kind of additional service extended by the bank to the applicant, through which a bank can avail the benefits of the word of mouth publicity in future. The basic requirements like fresh drinking water and toilets should be their not only for the employees but also for the general public who visits the bank. One time information should be given to the applicant so that he is not asked to come again and again to fulfill the obligations of the bank.
CONCLUSION
CONCLUSION
Believe it or not, buying a car is still considered a status symbol in India. Though the advent of the small car has created a huge dent in this reputation, but the fact still remains that a car is a cherished dream of every Indian. Owning a car is made simpler by the fabulous offers by various banks and car finance companies in India on almost every car model. Now, you don't need to book a car ( most of the models) in advance, there is no requirement that you pay entire cost of the car in cash, just have a part of the total cost, add some creditworthiness and rest is filled up by a decent car loan. Almost every car be it used or new is financed and acessible to all those who inspire confidence in banks and car finance companies. With the car loan taking so much importance and lots and lots of information bombarded on the average consumer by different media, it is very easy to get lured into a trap. To know the intricacies of car loans is the only way one can avoid getting into an unwanted situation and later repent in leisure. Here Are a few such things, which can save a lot for every car loan customer.
Earlier it was very difficult for an individual to buy a his dream car because of the financial constraints.. The boom in the banking sector has led to release of large amount of funds for car loan. Now, car loans are easily available from various banks in India and this change is encouraging more and more people to owe luxurious and as per comfort cars despite of their financial shortcomings. Many nationalized banks have come up with various car loan schemes that people can benefit from. Loans from Indian Banks are easily available and the other loans that you can get include the Auto loans, Commercial loans, equipment loans, travel and real estate loans. Some of the Indian banks which offer loans are United Bank of India, IDBI bank, Punjab National Bank, State Bank of India and Oriental bank of commerce etc.The maximum amount of loan offered for car in India is Rs.10 lacs. Different banks have different set of formalities and EMI pattern followed ALLAHABAD BANK is better than other banks in many respects as it offers Good healthy infrastructure, strong heirarchial pattern, proper mix of the youth and the wel experienced staff in their hierarchy, core banking solutions, net banking facility, SMS facility, ATM facility, e-banking facility etc. There are many banks in Bhopal which do not extend education loan in Bhopal like standard chartered bank, IDBI bank etc.
BIBLIOGRAPHY
BIBLIOGRAPHY
1. WEBSITES: www.Allahabad Bank.com www.eassytown.com www.google.com www.valueresearchonline.com
2. BOOKS AND MAGAZINES BERI, G.C. (1999) Marketing Research, Tata McgrawHill. BHALLA,V.K. (2003) Mgt. Of Financial Services, Anmol publication. Kothari, C.R. (1996) Research Methodology, Wishwa Prakashan. Kotler, Philip (1999) Marketing Mgt. Tata McGrawHill RAO, RAMESH, K.S. (1989) Fundamentals of Financial Management, Macmilan Publishing Fact Sheet of Allahabad Bank Ltd. Fact Sheet of ICICI Bank Ltd. 3. OTHER RESOURCES Parasuraman, A., Zeithaml, V.A. and Berry, L.L. (1994), "Reassessment of expectations as a comparison standard in measuring service quality: implications for future research", Journal of Marketing, Vol. 58, pp. 111-124. Interrogating SERVQUAL: a critical assessment of service quality measurement in a high street retail bank, Karin Newman, Professor, Middlesex University Business School, London, UK
