Meaning of the Loan

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MEANING OF THE LOAN:-

Loan is a method of lending under which bank gives credit to a borrower for a fixed period and for a specific
purpose. Loan are promises for future payment, they have to be repaid in periods beyond a year and are therefore
long-term liabilities.
In other words

“When a banker makes a advance in a lump-sum which can not be paid wholly or partly and which the customer
has permission to withdraw subsequently, it is called a loan.”

An arrangement in which a lender gives money money to a borrower and the borrower agrees to return the
property or repay the money, usually along with interest, at some future point(s) in time. Usually, there is a
predetermined time for repaying a loan, and generally the lender has to bear the risk that the borrower may not
repay a loan (though modem capital markets have developed many ways of managing this risk.

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LOAN PROCEDURE
SUBMIT THE APPLICATION. First of all the loan borrower should submit application to the particular bank. The borrower is required to fill out
a common application form, which seeks comprehensive information about proprietor’s and loan borrower’s
back ground and his business network and as well as his cost of project and economic consideration.
APPRAISAL OF LOAN. The bank follows good appraisal system for effective lending and to make easy repay in future way. The main
task of the lending bank is to make sure that the income generated from the loan is sufficient to repay the loan
installments according to the terms and conditions of amortization. The risk involved in term lending is much
more than the risk in short-term lending.
DOCUMENTATION. After completing the step of submit the application and appraisal system of loan. Then loan applicant should
collect the document for borrowing loan, every documents and requirement are needed according to the cooperative bank rate.
CONVENE TO LOAN APPLICATION. After collecting the necessary documents, an officer of the recipient bank review it to ascertain whether it is
complete for processing, when the application is considered complete. Then the co-operative bank held meeting
of his loan applicant and sanctioned the particular loan.
. To ISSUE DRAFT OR PAY ORDER. At the last stage is that, after convening of loan applicant and sanctioning loan, borrower should pay its stamp
duty, margin and one installment of loan, then in the stamp document or stamp procedure. Then bank gives to
them pay order or draft.

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Loan Schemes In Cooperative Bandk
RURAL EQUSING LOAN SCHEME
Beneficiary: - any individual or member of house building cooperative societies Purpose:For construction, purchase, repair renovation addition or alternation of house Amount of loan: - for purchase &
construction of house maximum Rs. 5.00 lac For repair, renovation, addition, alternation of existing house
maximum Rs. 1.00 lac Margin money:-15% in both cases Rate of interest: - 8.50% p.a
Fee and other charges: - rs.1000/- or 1/2% of loan amount which ever is less.
Period of loan: - 10 to 15 years in case of purchase /construction of house 7 years in case of repair, renovation,
addition or alternation of existing house.
Repayment of loan: - half yearly installments i.e. 31/5 and 30/11 Security: - mortgage of house to be
constructed or purchased
LOAN DISBURSEMENT
Procedure: - FOR CONSTRUCTION OF HOUSE:
1. 1st installation of 50% at the time of starting construction after plinth level
2. 2nd installment of 50% shall be disbursed after completion up to roof level and ensuring proper utilization of
1st installment.
For purchase of house:
1. Payment to third party
2.75% of loan amount as 1st installment
3. Remaining 25% after obtaining the mortgaged deed in favour of the bank
IN CASE OF ADDITION ALTERNATION/RENEWAL/REPAIR:
Maximum Rs. 1.00lac will be distributed in one installment

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Documents:Pre-sanction:



Application form



Two latest attested passport size photographs of borrower and guarantors.



Proof of residence of borrower & guarantors



Proof of income: - it may be

IN CASE OF SALARIED EMPLOYEE

1.

Form 16

2.

Latest salary statement with deductions

3.

Income tax returns (itrs) for the last three years. (If income tax payee)

IN CASE OF BUSINESSMAN

1.

Copy of balance sheet,profit & loss account for last three years

2.

Proof of business

3.

ITRs for the last three years

4.

Estimate from approved architect

5.

Approved map from panchayat/sarpanch

6.

Documents relating to collateral security

IN CASE OF AGRICULTURE LAND

1.

Jammabandi

2.

Fard hakiat girdawari

3.

Non-encumbrance certificate

4.

Map from patwari

IN CASE OF OTHER PROPERTIES

1.

Title deed

2.

Valuation report

3.

Mutation certificate

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4.
5.

Non-encumbrance certificate
Proof of source of margin money

6.

Proof of age

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.Agreement of sale deed in case purchase of built up house

POST SANCTION

1.

Application for nominal membership from borrower, guarantors and mortgagor

2.

D.p. note

3.

Letter of lien &set off

4.

Letter of waivers

5.

Loan agreement

6.

letter of guarantee from guarantors

7.

Mortgage deed duly registered and mutation in favour of the bank

8.

Irrevocable letter of authority from the employee in case of loan to employee.

PRECAUTIONS TO BE TAKEN AFTER DISBURSEMENT

1.

Bills to be obtained in case of construction, repair, renovation or addition of house.

2.

Utilization of 1st installment be got verified before release of 2nd installment

3.

Completion certificate to be obtained from the loanee in case of construction of house

4.

Mutation be get confirmed from revenue record after one month

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SEHKARI SHEKHRI AWAS YOJNA
Beneficiary;- any individual and member of group housing societies residing in the area of operations of the
bank jointly or individually.
Purpose:For construction, repair, addition, alternation etc.
Amount of loan:For construction and purchase of house

max Rs 10.00 lacs

For repair/renovation etc.

max Rs 2.00 lacs

Or
if borrower 21 years to 45 years age

-48 times of net monthly income

if borrower above 45 years of age

-36 times of

Or
85% of the value of the house / property which ever is less
Margin money. -15% IN ALL CASES
Rate of interest rate: - 8.50%p.a rate of interest is subject to change from time to time
Period of loan: - 15 years including moratorium period
or
Up to the age of 65 years which ever is earlier
Repayment of loan:- in monthly installments
Security:-primary & collateral security mortgage of the land on which house is constructed or to BE constructed
Fee & other charges: processing fee rs .1000/- or 0.5% of loan amount, whichever is less shall be payable along
with application form.
Documents pre - sanction :

1.

Application form

2.

Residence proof of the borrower and guarantors

3.

Proof of ownership of house property.

4.

In case of loan to women beneficiaries then a duly attested affidavit from legal heirs

5.

Proof of income

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IN CASE OF SALARIED EMPLOYEES

1. From 16
2. Latest salary slip with deduction
3. Income tax returns (itrs) for the last three years
4. If the job is transferable , proof of permanent address
In case of businessman:-

1. Copy of balance sheet and profit & loss account for the last three years
2. Proof of business
3. ITRs for the last three years
4. A detailed note on the nature of business details of suppliers , clients etc.
5. Additional information in case construction cases:
6. Construction plan approved by a competent authority.
7. Detailed cost estimate from approved architect.
IN CASE OF PURCHASE OF BUILT UP HOUSE

1. Agreement of sale deed
2. Photocopy of sale deed
Cost estimate from approved architect.
IN CASE OF ALLOTMENT OF FLAT / HOUSE

1.

Copy of allotment letter

2.

Details of payment made with proof.

In case of repair /renovation / addition / alternation of house ;

1. Detailed cost estimate from approved architect.
2. Details regarding the current balance in saving bank account. National savings
certificate. Fixed

deposits etc. along with documentary evidence.

3. Proof of source of margin money.
Post sanction

1. Application for nominal membership from borrower and guarantors.
2. D.P notes
3. Letter of lien and set off.
4. Letter of waivers
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5. Loan agreement
6. Letter of guarantee from guarantors.
7. Mortgage deed duly registered and mutation in favour of bank.
8. Irrevocable letter of authority from the employee in case loan to employees.
Precautions to be taken after disbursement:

1. Bills to be obtained in case of construction, repair, renovation or addition of house.
2. Utilization of 1st installment be got verified before release of 2nd installment.
3. Completion certificate to be obtained from the loanee in case of construction of
house .

4. Mutation be got confirmed from revenue record after one month.

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MINI DAIRY SCHEME
Beneficiary: - member of milk producer coop, societies (MPCS) or

PACS having knowledge of diary

farming and having cattle shed.
Purpose: to increase the income of milk producers by helping them in purchase of high yielding milch cattle’s.
Amount of loan:- Rs.15000/- to 3 lacs
Margin money: 15%
Rate of interest:- 1 l%p.a subject to change from time to time.
Security:-

primary security :-hyp. Of live stock
Collateral security: - 150% of loan amount

Period of loan: - 5 years (including moratorium period)
Repayment of loan: monthly installments
Insurance: comprehensive insurance of animals jointly with bank and borrower Documents: pre - sanction:

1. Application form
2. Residence proof of borrower & guarantors.
3. Certificate of society regarding membership and credit report.
4. Agreement to sell.
5. Documents relating to collateral security:
In case of agriculture land:

1. Jammabandi
2. Fard hakiat
3. Girdawari
4. Non - encumbrance certificate
5. Map from patwari
In case of other properties:

1. Title deed
2. Valuation report
3.

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Mutation certificate

4. Non - encumbrance certificate
Post sanction:

1. Application for nominal membership of borrower, guarantor & mortgagor
2. D.p note
3. Letter of lien & set off
4. Letter of waivers
5. Letter of guarantee from guarantors
6. Loan agreement
7. Mortgage deed for collateral securities duly registered & mutation in favour of
the bank.

8. Health certificate from veterinary doctor.
9. Insurance cover note.
Precautions for disbursement:

1. Loan to be disbursed in two equal installments with a sufficient gap of at least 6
months

2. Delivery letter duly signed by the borrower.
3. Receipt of payment from the seller.

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PURCHASE OF TWO WHEELERS FARMER
Beneficiary- farmer having landed property and aged not less than 21 years and not more than 60 years at the
time of maturity.
Purpose of the loan:For purchase of two wheeler i.e. scooter, motorcycle, moped etc. to increase the mobility of farmers at
cheaper cost.
Amount of loan> Rs.50000/- or 85% of the cost of two wheeler which ever is less.
Margin money 15%
Rate of interest- 11%p.a
Rate of interest are subject to change from time to time Period of loan: 5 years
Security; primary security:-hypothecation of the vehicle
Collateral security:-100% of loan amount if the borrower is not willing to.
Mode of repayment; half yearly / monthly installments
Insurance; comprehensive insurance shall be in the joint names i.e. bank as well as borrower
Disbursement of loan ; third party payment after depositing margin money
DOCUMENTS
Pre sanction;

1. Application
2. Residence proof of borrower, guarantors and mortgagor.
3. Quotation of the vehicle to be purchased.
4. Copy of driving license.
5. Documents relating to collateral security. If applicable.
Post sanction;

1. Application for nominal membership of borrower, guarantor & mortgagor.
2. D.p. note.
3. Letter of lien & set off.
4. Letter of waivers.
5. Letter of guarantee from guarantors.


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Loan agreement.
 Mortgage deed duly registered and mutation in favour of the bank, if applicable
Precaution for disbursement:

1. Payment to be made to third party directly
2. To obtained insurance cover note.
3. To obtained copy of R.C duly entered hypothecation clause in favour of the bank.
4. Duly signed post dated cheques for installment.

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SEHKARI EDUCATION LOAN FACILITY (SELF
Beneficiary- any individual with 50% marks in +2 .

)

Purposes
to provide financial assistance to students for perusing higher studies in India or abroad ,i.e. engineering
,medical, dental ,law , veterinary , computer agriculture , icwa ,ca , cfa ,c.s.. m.b.a ,or any other course run by
recognized university / institute .
Duration of course : not more than 5 years .
Amount of loan!;

in India

Rs.5.00 lacs

for studies abroad

Rs. 10.00 lac

Rate of interest: - up to
Above

Rs.2.00 lac 10.00%
Rs. 2.00 lac 10.50%
At half yearly rests

* Interest rates are subject to change from time to time .
Penalty for pre - payment!; no penalty.
Recovery of loan : ; the recovery of principle amount will start after one year of total duration of course
Or
After 6 months of getting the job by the applicant, whichever is earlier.
Security!; collateral security: equal to the loan amount
In case parent / guardian are salaried employee of Punjab govt, /local bodies, no collateral security is required if
loan is up to Rs. 5.00 lacs. Only undertaking and authority letter from the employee is required.
Insurance!; insurance policy will be taken on the life of the student for an amount equal to the loan amount
assigned in favour of the bank.
Disbursement of loan!;

1.

The branch will get sanction of total loan amount from competent authority , but will disburse the

amount based on yearly expenses of the course.

2.

Third party payment in favour of concerned university or college .

3.

In case purchase of equipment / books / computer, the payment shall be made to the applicant.

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Documents: - pre - sanction:
Income proof, it may be .
In case of salaried persons;

1. Form 16
2. latest salary slip with deductions .
3. Income tax returns 9itrs) for the last three years , if income tax payee .
In case of businessman;

1. Copy of balance sheet and profit & loss account of the last three years .
2. Proof of business .
3. itrs for last three years , if income tax payee.
In case of agriculturist;

1. Proof of land holding.
2. Form ‘j’ to the satisfaction of the bank.
3. Proof of residence of parents / guardian and guarantors.
4. 4 passport size photographs each of student, parent, guardian & guarantor.
5. Proof of admission in the course.
6. Copy of certificate of educational qualification .
7. Schedule of expenses of the course ( enclosed copy of prospectus of university .
college or letter

signed by the head of the institution .

8. Documents relating to collateral security , if applicable .
Post-sanction;

1. Application nominal membership from the student / parent / guardian /
guarantors .

2. D.p. note.
3. Letter of lien & set off.
4. Letter of waivers.
5. Letter of guarantee from guarantors.
6. Loan agreement.
7. Affidavit from parent / guardian regarding
Payment of interest,
Repayment of loan, incase of default by the applicant.

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He will not go abroad permanently without prior permission of the bank and
 He will intimate the bank regarding any change in the status of study, if any.

8. Mortgage of collateral security duly registered & mutation in favour of the bank, if
required.

9. Irrevocable letter of authority in case of salaried parent / guardian.
Precautions for disbursement:

1. Third party payment except for purchase of equipment / books.
2. Payment of loan amount for the 2nd year be made after obtaining the documents
relating to passing the first year & so on.

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Beneficiary-- any individual, group of individuals or a partnership firm.
Purpose:-To provide financial assistance to purchase new vehicle for business & personal use Amount of loan>
6.00 lac or 80% of the value of the vehicle which ever is less Margin money;; 20% (minimum)
Rate of interest> up to Rs. 2.00 lac 10.00%
Above Rs. 2.00 lac 10.50%
* Interest rate are subject to change from time to time .
Period of loan- 5 years Repayment!; in monthly installments
Insurance!; comprehensive insurance jointly with the name of bank and the borrower.
Security- primary: - hypothecation of the vehicle in favour of the bank and should be registered with the r.t.o.
Collateral :-at the discretion of the bank.
:if loan amount is up to 60% of the value of the vehicle no guarantors are required.
Documents- Pre - sanction :

1. Application for loan.
2. Residence proof of borrower & guarantors.
3. Copy of driving license .
4. Proof of income.
In case of salaried employee

1. Farm 16.
2. Latest salary statement with deduction.
3. Income tax returns (itrs) for the last three years. If income tax payee.
In case of business /

1. Copy of balance sheet and profit & loss account for last three years.
2. Proof of business.
3. Itrs for the last three years.
In case of agriculturist;

1. Proof of land holding.
2.

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Form ‘j’ to the satisfaction of the bank.
QUOTATION OF THE VEHICLE Identity proof.
It may be copy of passport, voter card , driving license , pan card , account holder of the bank, credit card with
photo, identify card of govt. / semi govt. / recognized educational institute .
Incase of Arms:

1. Copy of partnership deed,
2. Authorization letter.
3. Proof of office in case of firms.
In case of companies:

1. Memorandum and articles of association.
2. Copy of resolution .
Documents relating to collateral security, if applicable.
Post sanction:

1. Application for nominal membership of borrower, guarantor & mortgagor.
2. D.P. note.
3. Letter of lien & set off.
4. Letter of waivers.
5. Hypothecation deed.
6. Loan agreement.
7. Mortgage deed duly registered and mutation in favour of the bank, if applicable.
8. duly signed post dated cheques for installments .
Precaution for disbursement:-

1. The following documents be obtained after disbursement:
2. Insurance cover note.
3. Copy of registration certificate.
4. Original invoice.
5. One set of duplicate keys.

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Beneficiary- all salaried employees of Punjab govt. cooperative department, Punjab state coop, banks , (except
staff on deputation with Chandigarh administration boards and corporations)
Purposes
to provide credit facility for meeting out socio-economic needs of employees such as child’s education ,
furnishing home , buying computer, son/daughter’s marriage holiday’s tour etc.
Age- minimum 21 years and maximum 57 years.
Service tenures 1 years after the confirmation .
Amount of loan;-10 months gross salary
or
Rs.2 lac (whichever is less).
Rate of interest;-12% p.a
Interest rates are subject to change from time to time .
Repayment of loan> loan is repayable in equated monthly installments in the form of post - dated cheques . The
loan shall be repaid before retirement.
Security: z no collateral security is required, only two guarantors, employees of the same institution as of the
borrower.
Pre - payment of loan a pre - payment fee of 1%11 be payable on the outstanding loan amount. No partprepayment is allowed.
DocumentsPre - sanction:

1. Application form.
2. Latest photograph of the borrower & guarantors.
3. Bank account statement.
4. Proof of income.
5. Employer certificate of identity proof of continuity of current job.
6. Proof of residence of the borrower & guarantors.
7. Salary certificate.

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Post sanction:
1. Application for nominal membership of borrower & guarantors.

2. Demand pronote
3. Agreement for term loan
4. Letter of lien & set off.
5. Letter of waiver.
6. Irrevocable letter of authority.
7. Letter of guarantee from guarantors.
8. Duly signed post dated cheques for installments.
9. Authority letter to debit the

SB

account.

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RURAL GODOWN
Beneficiary- any individual, group of individuals , property , partnership firms , N.G.O’s ,SHG.s , companies ,
cooperatives , marketing , committees , marketing boards , agro processing corp. Purpose- for construction of
godown and repair of godown .
Assistance for renovation / expansion of rural godown will however be restricted to the godowns constructed by
cooperatives only .
Amount of loan:> 75% of the total project cost.
Margin money : - 25% of total project cost.
Rate of interest: - 10% p.a.
*interest rates are subject change from time to time.
Period of loan ; - 1 0 - 1 5 years including moratorium period .moratorium period maximum up to one year.
Minimum capacity- 100 M.Ts
Location: - outside the municipal corporation area.
Security:Hypothecation of assets created or to be created in future.
Mortgage of godown .
Documents: - pre sanction:

1. Application for loan.
2. Residence proof of borrower & guarantors.
3. Project report.
4. Estimate of the building to be constructed, from an approved architect.
5. Map of the godown duly approved by the competent authority.
6. Quotations for the other assets required.
7. Documents relating to collateral security.
In case of partnership firms:

1. Partnership deed.
2. Form A & C registration.

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In case of companies.
1. Memorandum & articles of association.

2. Certificate of incorporation.
3. Copy of resolution.
In case of cooperative societies:

1. Copy of bye - laws.
2. Copy of resolution.
Post sanction:

1. Application for nominal membership of borrower, guarantor & mortgage.
2. D.P.note.
3. Letter of lien & set off.
4. Letter of waivers.
5. Letter of guarantee for guarantors.
6. Loan agreement.
7. Mortgage deed duly registered & mutation in favour of the banks.

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Whenever a study is conducted, it is done on the basis of certain objectives in mind. A successful completion of a
project is based on the objectives of the study that could be stated as under:  To know about the loan procedure in cooperative bank



To knowledge about the loan schemes in cooperative bank.



To know about the customer’s behavior towards the cooperative banks.



To find out the satisfaction level of customer towards loan schemes.



To understand the operating and processing system of loan schemes in banking
sector.



To identify the factors that affects the customer while selecting various loan
schemes.



To study the perception and preferences of individuals towards various loan
schemes.



To suggest the method to improve customer satisfaction level.



To provide better services to its customers.

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Research methodology
Research problem
To find out the customer perception towards loan schemes provide by co-operative bank.
Research design DESCRIPTIVE RESEARCH:
It is to provide an accurate picture of some aspects of market environment. Descriptive research is used when the
objective is to provide a systematic description that is as factual and accurate as possible. It provides the number
of time something occurs, or frequency, lends itself to satisfied calculations such as determining average number
of occurrences.
Sampling design
The study aimed to survey 50 samples from who get loan from the central co-operative bank’s branch village
bhari.
Data collection
Both primary and secondary data have been collected for meeting the objective of the current study .
For the purpose of the collection of the primary, personal interview of the respondents was conducted. The
questionnaire was prepared which was administered to the respondent for the purpose of getting the information.
The data was collected from 50 peoples who get the loan from co-operative bank branch village bhari.
For the purpose of secondary data, secondary sources of information like magazines, newspapers,
journals; studies conducted in past etc. The main sources of secondary data in the study
Bank’s detail books
Websites
Books etc.
Analysis techniques
The data have been analyzed by the use of pie chart.
SAMPLING

TECHNIQUES:-

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Probability sampling technique is one in which every unit in the population has a
Chance (greater than zero) of being selected in the sample and this probability can be
Accurately determined.
UMITA TION OF THE STUD Y



more population is illiterate



Some respondents were hesitant in providing complete information.



The findings of this study are based on the expressed opinion of the respondents.



Difficulty was faced in getting the responses to various questions because the
customers could not



devote enough time to us and the communication problem was there.

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