Institute of Management and Planning &Advanced Computer

Training (IMPACT), Patna

Affiliated To Aryabhatta Knowledge University

Project Report

ON

LOAN DISBURSEMENT AND RECOVERY PROCEDURE OF

STATE CO-OPERATIVE BANK
In Partial fulfillment for the award of the degree of

Bachelor of Business Administration

2023

Guide Name: Ms. Priya Student Name: Ritesh Raj

Designation: Faculty at Impact College Reg.no: 20302316058
 ACKNOWLEDGEMENT

I feel great pleasure for the completion of this project.At the very outset I would express my
sincere thanks and deep sense of gratitude to Mr.Prabhat Kumar (D.G.M of BSCB, Patna)
& Mr.Akhilesh Kumar( M.D of BSCB, Patna) who helped me during the collection of data
and gave me rare and valuable guidance for the preperation of this report.

I am greatly thankful to my project guide Priya Mam of Institute of Management and Planning
& Advanced Computer Training (IMPACT), Patna for giving me such a wonderful opportunity
to work with corporate as a part of my project work and constantly motivating right from the
beginning.

I take oppurtunity to thanks all my friends and also thanks all the people who directly or
indirectly concerned with this project . I also express my gratitude to my parents who give a
costant support and love throughout my life and career.

(Ritesh Raj)
 CERTIFICATE OF ORIGINALITY

This is to certify that the project report entitled Loan Disbursement And
Recovery Procedure of State Co-Operative Bank Submitted to Aryabhatta
Knowledge University in partial fulfillment of the requirement for the award of
the degree of Bachelor of Business Administration, is an original work carried
out by Mr. Ritesh Raj, Registration No.:20302316058 under the guidance of
Ms. Priya

The matter embodied in this project is a genuine work done by the

student and has notbeen submitted whether to this University or to any other
University / Institute for thefulfillment of the requirement of any course of study.

Ritesh Raj Ms. Priya

BBA 2020-23 Faculty

20302316058 Impact College

Impact College
 Guide Details

Ms. Priya

Faculty

Master’s In Business Administration ( MBA )

EXPERIENCES:

 More than 5 years of teaching experience at various Colleges in

Bihar.
 Worked as Territory Sales Manager in Telenor India Pvt Ltd at
Patna.

Ms. Priya
 Declaration

I the undersigned, a BBA student of IMPACT College bearing

registration number 20302316058 do solemnly declare that project

work titled Loan Disbursement And Recovery Procedure OF State

Co-Operative Bank is based on my own work, carried out under the

supervision of guide Ms. Priya. I assert that the statements made are

the outcome of my work. I ensure that project work is original, not

acopy paste job and consequences of plagiarism. I affirm that this

project work has not been submitted whether to this University or to

any other University/Institute for the fulfilment of the requirement of

any course of study.

 TABLE OF CONTENT

CHAPTER TITLE PAGE

No. No.
EXECUTIVE SUMMARY
Chapter -1 INTRODUCTION TO STUDY AND RESEARCH DESIGN

 Introduction to study 1

 Background of the study 2

 Scope of the study 3

 Objective of the study 4

 Project methodology and limitation 5-6

Chapter -2 INDUSTRY AND COMPANY PROFILE
 Industry profile 7-11
 Profile of the BSCB 11-12
 Vision ,mission and objectives 12-13

 Product and service profile 13-14

 Organisation set-up 14-15

 Future growth and prospects 15-16

 Area of operation and branches 16-20
Chapter -3 CONCEPTUAL BACKGROUND OF THE STUDY

 Loans and its classification 21-23

 Loan disbursement and its procedure 24-25

 Loan recovery and it’s process 26-27

 Loan monitoring system 28-32
 Risk factors of loan 32-33

 Products and services by BSCB 33-39

Chapter -4 DATA, ANALYSIS AND INTREPRETATION
 Analysis and interpretation of bank 39-52
Chapter - 5  FINDING ,SUGGESTIONS AND CONCLUSION
 Summary of finding 53

 Suggestions 53-54
 Swot analysis 55
 Conclusion 56
BIBLIOGRAPY
 LIST OF FIGURES

Table No. Particulars Page No.

Graph -1 Graph showing vehicle loan 40

Graph -2 Graph showing housing loan 41

Graph -3 Graph showing agriculture loan 43

Graph -4 Graph showing small enterprise loan 44

Graph -5 Graph showing business loan 46

Graph -6 Graph showing education loan 47

Graph – 7 Graph showing jewel loan 48

Graph- 8 Graph showing house building advances 50

Graph -9 Graph showing staff vehicle advances 51

 LIST OF TABLES

Table Particulars Page

No. No.
Table – 1 List of branches 18
Table – 2 List of DCCB’S 19-20
Table – 3 Rate of interest on schemes 33
Table – 4 Growth rate of vehicle loan 39
Table – 5 Growth rate of housing loan 40-41
Table – 6 Growth rate of agricultural loans 42
Table – 7 Growth rate of small enterprise loan 43-44
Table – 8 Growth rate of business loan 45
Table – 9 Growth rate of education loan 47
Table – 10 Growth rate of jewel loan 48
Table – 11 Growth rate of housing building advance 49
Table – 12 Growth rate of staff vehicle advance 50
Table – 13 Total amount of loan and advances 51-52
 EXECUTIVE SUMMARY
A key topic that plays an important role in understanding and assessing the
overall capacity and performance of a given bank is to study “LOAN
DISBURSEMENT AND RECOVERY PROCEDURE”.As a result,this topic was
selected as an internship project.This project was carried out at the “BIHAR
STATE COOPERATIVE BANK”.

“ Loan Disbursement And it’s Recovery Procedure” is a very broad subject

and a very important concern in the banking sector and it is impossible to
understand all the concepts at a time.It means the transfer of loan amount
from the lender’s account to the borrower’s account.

The purpose of this study is to understand the data related to “Loan

Disbursed And Recovered” in recent years.Data relating to the various
schemes of loans and their respective interest rates are discussed.

The next part of the report is devoted to knowledge about Co-operative

banks.It also includes the history of BSCB banks and their services provided
by the bank.

The following report provide information on loans and credit facilities

provided by the bank.This section covers the different types of loans
offered by the bank ,the details of these loans ,the procedure of disbursing
and recovering them ; Next section ,covers the Analysis,Intrepretation
followed by Conclusion , Finding and Suggestions.

This Research has been conducted by using financial statements, annual

report and financial document as a baseline data . The annual report of the
last four years has been taken in to account for the research.
 Introduction To Study :

• This project is a part of summer training at

“Bihar State Co-operative Bank “ .This project
entitled “Loan disbursement and recovery
procedure of state Co-operative Bank with
special reference to ‘’Bihar State Co-operative
Banks holds much importance for the
organization since it determines the level of
funding and the nature of organization.

• It is a comprehensive Loan disbursement and

recovery system that helps to control the
organization’s fund flow so that the firms
become well balanced in this respect.

1
BACK-GROUND OF THE
REPORT :

Bank is a financial institution which accepts

money from its customers as deposits and gives
money as a loan to the borrowers .
It is a financial intermediary a dealer in loans
and debts.
As a student of Bachelor of
Business administration (BBA) , I wanted to
complete my internship programme from, a
reputed bank which would be helpful for my
future professional growth. I got the opportunity
to perform my internship in the ‘Bihar State Co-
operative Bank’ .

2
Scope of the Study :
Loan disbursement means lending a fixed
amount of money to borrower for a certain
period of time .The borrower must repay the loan
within the given time period.
In loan, the disbursement will take place for one time.
The borrower can repay the loan at a time or by
installment. Loan disbursement is extended by a
creditor, also known as lender , to a debtor also known
as a borrower in default. Account receivable previously
written off as uncollectible is now collected.
Loan disbursement and recovery process are significant
in underlying countries economics growth ,
employment generation and accelerated
industrialization.
The main issue of this study is to access the loan
disbursement procedure and its overall condition . The
loan recovery process and its current status will also be
covered in this study .

3
Objective of the Study :
Without objectives any study cannot be
considered as successful one . This report is also
prepared on objectives which are as follows :-
➢ To find out basic appraised for loan approval

➢ To know the disbursement and recovery procedure of

approved loans .

➢ To know the success factor of approval credit , loan

disbursement and recovery system at co-operative

bank.

➢ To make some recommendation and conclusion to

further the development of loan disbursement and

recovery system .

4
 PROJECT METHODOLOGY
The first steps to collect the data from various sources like :

➢ Primary Source :
A proper interaction with the department heads,
Finance Manager, employs who are working in different
department and educational guide.

➢ Secondary Sources:

Through Balanced Sheet, profit and loss account

and annual Reports etc.

After the collection of data , it has been analyzed to find out the
points to be worked on , These points are future analyzed in detail
and rearranged according to the requirements , so that te required
results can be obtained . The suggestion of different departments
especially the finance departments’ personals are taken to get the
correct information.

Methodology used in this project

During the course of conduction the study, the data information was
gathering mainly through the annual reports, balanced sheet and
others financial statements. In addition to this extensive use of
internet was done to gather the required knowledge and information
.

5
 LIMITATIONS OF STUDY
Every project has its own limitations, so as mine , but I have
to work irrespective of these limitation and find my way, so
that I can achieve the required aim.
Some of the limitation of my project are:-
➢ As my project is based on data recorded by the
organization, the limitation of extracting the particular
data faced by me because my access is limited for the
sake of confidential information of the organization.
➢ Another limitation is the report is done manually certain
error on account of human tendency is possible. So,
there is a chance of human error.
➢ The grouping of different items in the balance sheet also
created hindrance for me , and it is very difficult to
identify which items is clubbed with which head, but
thanks to accounts personal that made it easy to
understand these clubbing.
➢ Analysis based on balance sheet and profit and loss
account provider of the company.
➢ The duration of the project is only two months which
was not sufficient.
All conclusion are made on my own judgment.

6
INTRODUCTION

BANK
Finance is the life blood of trade ,commerce and industry. Now-a-
days, banking sector acts as the backbone of modern business.
Development of any country mainly depends upon the banking
system.

The term ‘Bank’ is either derived from the old Italian word ‘Banca’ or
from a french word ‘Banque’ both mean a ‘Bench’ or any money
exchange table’. In order days ,European money lenders or money
changers used to display coins of different countries in big heaps
(quantity) on bences or tables for the purpose of lending or exchange
.

A bank is a financial institution which deals with deposits and

advance and others related services. It receives money from those
who wants to save in the form of deposits and it lends money to
those who need it.

Some of the features are as follow:-

• Deals in money
• Individual/Firm/Company
• Acceptance of deposits
• Giving and withdrawal
• Agency and utility services
7
• Profit and service orientation
• Connecting link between borrowers and lenders

Co-operative banks

The origin of the Co-operative Banking Movement in India can

be traced to the close of 19th century when inspired by the
success of the experiments related to the Co-operative
Movement in Britain and the Co-operative Credit Movement in
Germany,such societies were set up in India .The Co-operative
Bank are important constituent of the financial system of India.

They are the primary financiers of agricultural activities ,small-

scale industries and self-employed workers. The Anyonya Co-
operative bank in India is considered to have been the first co-
operative bank in Asia .

Banks in India can be broadly classified under two groups-

Commercial Banks and Co-operative Banks .While commercial
banks account for an overwhelming share of the banking
business, the co-operative banks also play an important role.

Initially , co-operative banks were set up to supplant indigenous

source of rural credit ,particularly money lenders, today they
mostly serves the needs of agriculture and allied activities ,
rural based industries and to a lesser extent , trade and
industry in urban centers.

8
The structure of the commercial banking is of
branch banking type , while the co-operative
banking structure is a there is a three tier federal
one i.e.
• A State Co-operative Bank works at the apex level .(State
Level)
• A District Co-operative Bank works at the intermediate
level (District Level)
• A primary Co- operative Credit Societies works at the base
level.(Village Level)

The Co-operative Movement in India primarily for dealing with

the problems of rural credit . The history of Indian Co-operative
Banking started with the passing of Co-operative Credit
Societies ‘’to encourage thrift , self –help and co-operative
among agriculture, artisans and person od limited means’’.

Many Co-operative Credit Societies were set up under the Co-

operative Societies Act ,1912 as they recognized the need of
establishing new organizations for supervision ,auditing and
supply of co-operative credit . These organization were –

• A union consisting of primary societies

• The Central Primary Societies
• Provincial Banks

9
 Although beginning has been made in the direction
of establishing

Co-operative credit ,but in the progress remained

unsatisfactory in
Pre- independence period , even after being in the operation for
a
century , the co-operative credit formed only 3.1% of the total

total rural credit in 1951-52.

Banking Regulation Act ,1949 is fully applicable to all

commercial banks while it is partially applicable to co-operative
banks. In other words , RBI has partial control on co-operative
banks. The Co-operative Banks works on the principals of
cooperation that’s why co-operative banks succeed in getting
finance assistance from RBI on concessional rate . The
government share to the financial package as been increased
from 53% to 68% on an aggregate basis.

Co-operative Banks is an institutional established on the co-

operative basis and dealing in ordinary banking business . Like
other banks, the co-operative banks are founded by collecting
funds through shares , accept deposition and grant loans. The
co-operative banks are small – sized units which operate both
in urban non-urban centers and finance small borrowers in
industrial and trade sector besides professional and salary
classes . They are regulated by the RBI and are governed by the
Banking Regulation Act , 1949 and Co-operative Societies
ACT,1912

10
 Some of the features are as follow ;-

• It issues share of the unlimited liability.

• In tis banks ,one share older as one vote
whatever the share he may hold.
• These are generally –concerned with the rural credit and
provide financial assistance for agriculture and rural
activites .
• The bank as a federal structure.
• These are located in the villages spread over entire
country.

Profile of the Bihar State Co-operative Bank Ltd

The bank was registered in the name of Bihar and Orissa provincial
Co-operative Bank on 16.03.1914 under C0-operative Societies Act-2
of 1912 and its registration number is 267/1913-14. Initially, the area
of operation of the bank was Bihar and Orissa both. After separation
of Orissa in the year 1936-37 ,its area
of operation was confined to Bihar and its name was changed as
Bihar State Co-operative Bank Ltd ,in December 1950. After
application of Banking Regulation Act,1949 to the Co-operative Bank
on 1st Marc ,1966, tis bank was included in the second schedule f RBI
in the month of July ,1966. Earlier, the bank was doing trading
business also, but this business was transferred to the Bihar State Co-
operative Marketing Union after the establishment in the month of
June ,1958.

11
Founding Members

The founding members of the Bihar Co-operative Bank

Ltd. Are as follows;-

• Maharaja Bahadur Guru Mahadev Sharan Prasad Shahi (Hathu)

• Raja Baadur Kriya Nand Sinha (Banaili)
• Rai Bahadur Harihar prashad Narayan Singh (Dumraon)
• Raja P.C .Lal (Purnea)

Vision :
➢ Receive deposits in order to promote saving habits in the minds
of the public and members.
➢ Offers different types of loans facilities to members and
associate members .
➢ Row your business by opening branches, covering large areas
and providing banking service to many people.
➢ Contribution to agriculture by providing short and medium
term credit facilities to farmers .

With a deposit of 1,000 crores of rupee , a progressive portfolio will

be created in the next eight years and the banking network will be
extended to branches

Mission :
➢ Respond to the rowing desire of bank customers in a changing
environment in general .
➢ Gives total customers satisfaction by providing quality service .
➢ Promote socio-economics development and make it a nation
and social goal.

12
➢ Improve credit efficiency and reduce credit risk
through careful and continuous monitoring.

Quality policy:
➢ Use designated features for account holders ,including saving
bank accounts and current cardholders.
➢ Bank exchange cut bank note in accordance with RBI guideline.
➢ The bank provides instructions for the payment of bills, rents,
interest and premiums.
➢ Banks provide essential and important guidelines to the holders

Product profile and service:

➢ Basic banking services
➢ SMS notification function
➢ Renewal of vehicle insurance
➢ Health Insurance
➢ Electronic buffer paper
➢ Accident insurance
➢ Draft Application
➢ Withdrawal
➢ Cash receipts
➢ Sanction and lending expenses
➢ Locker facilities
➢ Check the reconciliation
➢ Payment order
➢ Send an email
➢ Bank transfer
➢ Open, running, repetitive and fixed deposits

13
 ➢ RTGS and NEFT –Bank provide IDBI and IndusInd
with RTS and NEFT facilities facilitating the
transfer of funds.
➢ Solvency Certificate – A salary certificate is issued
to the client so that they can declare that their financial
situation meets certain conditions.

Objectives:
The Bihar State Co-operative Bank Ltd. Was established in Patna
way back in 1914 and was registered under Co-operative Societies
Act-2 of 1912 with the following objectives:-

➢ To serve the apex bank in the state of Bihar for societies.

➢ To guide and promote co-operative activities in the state.
➢ To organize the provision of credit for CO-operative Societies.
➢ To serve as a balancing center in the Co-operative Credit
Structure of the State.
➢ To function as a financing bank in the terms of the act and rules
and to carry on general business.

Organizational set-up
Keeping in view ,the emergency competition in banking financial
services , as well as the challenges and priorities confronting the
State co-operative Banks (SBC’s), it is considered necessary to the
Department to setup at the Head Office of the State Co- operative
Bank depending upon their category.

The proposed organization structure at the head office of the State

Co-operative Bank-

14
Board of Director
Chairman
Managing Directors
Deputy General Manager
Assistant General Manager
Manager
Deputy Manager
Assistant Manager
Staff Officer
Class 3
Class 4

Business Performance
The bank is doing its business through its 16 branches and 30
DCCB’s affiliated to it . After separation of Jharkhand from
unified Bihar in 2000,its 5 branches are now in Jharkhand and
11 in Bihar. Similarly, out of existing 30 DCCB’s are located in
Jharkhand and 22 DCCB’s in Bihar.

Since, the Jharkhand State Co-operative Bank has been

established and assets and liabilities have not yet been
bifurcated, present area of the Bihar in Jharkhand and Bihar
both .

The bank was earlier doing the lending business under

agriculture sector only . But , after the issuance of guidance
from NABARD regarding non- agriculture finance, the bank
started under non- agriculture sector in 1990 . Thus, the bank is

15
presently doing the lending business in
Agriculture as well as Non-Agriculture Sector.

Operational Efficiency and Future

Programme
Bank has improved its efficiency during the last 2-3 years .The
employees of the bank are being sent to BIRD and other
training institution for importing training. Some new
recruitment on contractual basis has made of the person
having technical qualification like MBA,MCA,BCA,BBA etc. to
improve the operational efficiency.
Some other efforts have also made by the bank for
improvement in the present efficiencies of the bank via :
• Premises of head office as well as 7 other branches
located at Patna have been renovated and modernized.
Modernization of the other outstation branches us also
under process.
• Computerization of all its branches except Motihari and
Bihta had been finalized Computerization of above two
branches as well as head office is under process.
• The bank has also started government security trading to
increase its profitability.
• The bank has a proposal to install ATM at same
inside/off-site location at Patna.
• Number of Branches
• There are altogether 16 branches of the bank out which
11 are located under the Jharkhand State Jurisdiction.
• Affiliated DCCB’s

16
• Previously , 34 DCCB’s were affiliated with
the bank of which one under the
jurisdiction of the Jharkhand state i.e.
Daltanganj and three under the jurisdiction
of Bihar state i.e. Chapra, Darbhanga and Madhepura
have been bounded up by the RBI. Accordingly, the
DCCBs are presently under liquidation as per the order of
RCS. Thus, there are only 30 DCCB’s functional at present
, affiliated to this bank. Out of 30, 22 DCCBs are under
the jurisdiction of the Bihar state and 8DCCBs are under
the jurisdiction of the Jharkhand state .
• Out of 22 DCCBs functional in the Bihar state, 14 DCCBs
are not complying with the provisions regarding
minimum capital requirements i.e. section 11 (1) of the
Banking Regulation Act and 8 DCCBs which are complying
with the provisions of the section 11(1) of the Banking
Regulation Act are Arrah , Partliputra, Bhagalpur,
Vaishali, Bettiah, Auranagabd, Siwan and Gopalganj.
• Out of 14 DCCBs, not complying with the provision of
section 11 (1) , 11 DCCBs namely, Purnea, Rohika,
Magadh, Sasaram, Katihar, Muzaffarpur, Nalanda,
Patliputra, Munger, Begusarai and Khagaria have been
showcase noticed by the RBI as to why their license
application should not been rejected
• However, penal action against these DCCBs has been
kept in abeyance by RBI/NABARD in the light of
acceptance of the Revival Package of Vaidyanathan
Committee Recommendation.
• The bank is presently doing its business through its 11
branches and 23 DCCBs in the state of Bihar. Now, we

17
 have look on the location of the different
branches and DCCBs, which are given
below.

List of Branches:
1. Bakipur Ashok, Rajpat, Patna
2. Maurya Lol Maurya Lol ,Patna
3. New Secretariat New Secretariat, Patna
4. New Market New Market, Patna
5. Kankarbhagh Kankarbhagh, Patna
6. Musallahpur Hatt Musallahpur Hatt, Patna
7. Nala Road Nala Road, patna
8. Motihari Motihari
9. Bettiah Bettiah
10. Darbhanga Darbhanga
11. Chapra Chapra

18
List of District Co-operative Central Banks
(DCCB’s):

Sr.No DISTRICT Name of the DCCB’s

1. Arrah Arrah- Buxar Distict Co-operative Central Bank
Ltd.
2. Aurangabad Auranabad Distict Co-operative Central Bank
Ltd.
3. Begusarai Begusarai Distict Co-operative Central Bank
Ltd.
4. Bettiah Bettiah Distict Co-operative Central Bank Ltd.
5. Bhagalpur Bhagalpur Distict Co-operative Central Bank
Ltd.
6. Gopalganj Gopalganj Distict Co-operative Central Bank
Ltd.
7. Katihar Katihar Distict Co-operative Central Bank Ltd.
8. khagaria Khagaria Distict Co-operative Central Bank Ltd.
9. Hajipur Hajipur Distict Co-operative Central Bank Ltd.

10. Gaya Gaya Distict Co-operative Central Bank Ltd.

11. Motihari Motihari Distict Co-operative Central Bank Ltd.
12 Muzaffarpur Muzaffarpur Distict Co-operative Central Bank
Ltd.
13 Nawada Nawada Distict Co-operative Central Bank Ltd.
14 Bihar Sharif Bihar Sharif Distict Co-operative Central Bank
Ltd.
15 Patna Patna Distict Co-operative Central Bank Ltd.
16 Samastipur Samastipur Distict Co-operative Central Bank
Ltd.
17 Purnea Purnea Distict Co-operative Central Bank Ltd.

19
18 Siwan Siwan Distict Co-operative Central Bank Ltd.
19 Sasaram Sasaram Distict Co-operative Central Bank Ltd.
20 Sitamarhi Sitamarhi Distict Co-operative Central Bank Ltd.
21 Munger Mugner Distict Co-operative Central Bank Ltd.
Board of Directors
In terms of amended Bihar Societies Act, 2002, the total numbers of
Board of Directors is Against the above 17 members, 2 post are
reserved for SC member i.e. RFCS, CGM, NABAR Regional and
Managing Directors of the bank. Out of the above 17 post, 3 posts
are vacant under reserved category.

1. Sri Ramesh Chandra Chaubey (Honorable Chairman)

2. Sri Vishun Dev Rai (Director)
3. Sri Amarnath Pandey (Director)
4. Sri Rajesh Kumar Raman (Director)
5. Sri Devendra Prasad (Director)
6. Sri Amrendra Kumar (Director)
7. Smt Madhu Priya (Director)
8. Smt Mintu Devi (Director)
9. Sri Village Vatsyayan (Director)
10. Sri Shalendra kumar (Co-opted Director Professor Category)
11. Smt Pragya Pathak (Co- opted Director Professor Category)
12. Sri Mukul Kumar sinha J.R., Saran Chapra (Representative RCS)
13. Sri Chandra Shekhar Singh (Managing Director)

20
Definition of Loan :
According to L.R.Chowdhuary (2012 ), when an
advance is made in a lump sum repayable either in
fixed ,monthly installments or in lump sum and no subsequent debit
is ordinarily allowed except by way of interest, incidental charges ,
etc., it is called loan .

Loans are, thus, allowed for a definite purpose and for a

predetermined period to those parties who have either fixed source
of income or who desire to pay it in lump sum .

Objective of Loan:
According to A.R.Khan (2009), while lending funds, the banker
enquires forms the borrower the purpose for which he seeks the
loan. Banks do not grant loans for each and every purpose, they
ensure the safety and liquidity of their funds by granting loans for
productive purpose only.

• Help underserved sector; programs can be designed for

residential, small business, multi-family and other sector to
provide financing to credit-worthy property owners who may
not qualify for private –sector loans.
• Support private-sector lending by providing loan loss reserves
or other credit enhancements. These enhancements encourage
lenders to qualify more borrowers and to offer loan terms that
work for energy improvement projects.
• Collect loan loss date from the programs they develop and
support. According to the Bangladesh Council for an Energy
Efficiency Economy, clean energy lending is low-risk investment.

21
 Additional data will help private lenders justify
offering a lower interest rate for clean energy
loans.
• Generate demand for clean energy loans. Some
lenders that have tried to market clean energy on their own
have concluded that there is too little demand to justify the
effort.
State and local Governments can work with clean energy
program administrators to develop a comprehensive marketing
and installation process that can create broad demand.
• Link program participants to private-sector solution. State and
local programs can cultivate relationships with local lenders and
other potential partners to encourage further market
transformation.
• Provide program continuity to extend financing programs
started under the American Recovery and Reinvestment Act
(ARRA). State and local governments can explore sources of
funding, including ;bonds, such as Qualified Energy
Conservation Bonds(QECBs); service benefit charges; and state
treasury funds. Funding can take a year or more to arrange, so
planning ahead is crucial.

Loan Classification:
• According to R.M.Debnath (2004), loan classification attempts
to categorize the debt information in a systematic manner.
Loan classification is defined in terms of degree of risk
associated with loans .Classification of loans mean and include
only such assets of the balance sheet of a bank which do not
yield interest income and which have remained past due for
some quarters. Loan are generally categorized in two types:-

22
• Classified Loan
• Unclassified loans

Classified loan: If any continuous credit is not

adjusted/renewed within expiry date, the loan will be treated as
classified/ irregular loan from the next day of the expiry date.
Loan can be three types:

Classified loan
• Substandard
• Doubtful
• Bad/loss

Substandard: If the loan unadjusted for six months or more but

less than nine months, the loan will be treated as
‘’substandard’’
Doubtful: For nine months and above but less than twelve
months the loan will be treated as ‘’doubtful’’.
Bad: If the period is twelve months or more , the loan will be
classified as ‘’bad’’ .
Unclassified loan :Unclassified loan are those which are repay
regularly .Objectives of loan classification :
• Find out net worth/adjust capital of a bank
• Help for assessing financial soundness of a bank .
• Calculate the required provision and the amount of interest
suspense

23
 Definition of Loan
Disbursement:
According to P.N.Varshney (2005), the bank’s loan disbursement
procedures affect the control of corruption in bank-financed
projects. When the bank lend heavily for large infrastructure
projects, the proceed of loans were often disbursed directly to
contractors, on presentation by government of payment
documentation. Now, with a different mix of projects and in an
efforts to develp0 borrowers institutional capacity , increase project
effectiveness , and reduce the banks costs, disbursements are

increasingly made into special accounts established by the

borrower, around $8 billion out of $16 billion investment
lending is routinely disbursed through special accounts .This
includes about $4 billion of some $9 billion annually, or
approximately one half of total disbursements, which are made
against statement of expenditure .The extent of which the bank
can check statement of expenditure is constrained by several
items in the project accounts and to determine whether the
items are eligible for bank financing.

Loan disbursement process :

According to Advance Manual (1992), all required documents
as mentioned before should be obtained before any loan is
disbursed . Disbursed of any loan facility requires approval of
the component authority that should ensure before exercising
such delegated authority that all the required documentation
have been completed. Approval authority may be as following:-

24
 Step 1: Loan approval authority has been
delegated to Branch Manager . Loan Committee
by the MD/Board.

Step 2: Delegated approval authorities shall be reviewed

annually by MD/Board
.
Step 3 : Approval must be evidenced in writing .Approval
records must be kept on file with loan application.

Step 4 :The aggregate exposure to any borrower or borrowing

group must be used to determine the approval authority
required
The following diagram illustrates of the loan process:

Loan disbursed application recommended by Branch

Manager/Relationship Manager/Corporate

Head Office Loan Committee

Head Office, Loan Division

Executive Committee of Board of Director

25
Defination of Recovery:

According to L.R.Chowdhury (20012), it is the duty of the recovery

department of the bank to recover the landed fund with in the
stipulated time and if the borrowers fails to repay the money with in
the said period Bank will declare him as a defaulter and recover the
fund by selling the securities given by the borrower or by freezing his
account or make a suit against him .

Recovery process:
According to Advance Manual (1992), recovery plan is one of the
components of performance plan. It is a future intended action in
respect of recovery . In other words, it is a conscious and deliberate
efforts to recover all current dues and overdue loans.

26
These four steps are described in detail below-

Step 1: Reminder to the client is given through a formal

communication channel. A letter is written and
properly signed on the bank’s papers. This is issued
several times to remind the honorable loaner to repay his/her
outstanding portion.

Step 2: If the loan amount is not yet repaid after sending a series of
letters , then social pressure is created on the client by person
referred while opening account in the bank.

Step 3: Legal notice is prepared and sent by Bank when above two
steps fails to recover the amount. It is a threat to the borrower.

Step 4: The last and final step of the recovery procedure is the help
form the court. Bank sincerely tries to avoid this kind of situation for
its honorable clients but cannot help doing for its own sustainability.

The following diagram illustrate of the Recovery process :

Reminders to the clients

Creating social pressures

Sending legal notice and

Legal action

27
Loan Monitoring System :
According to Advance Manual (1992), investment
monitoring implies that the checking of the pattern of
use of the disbursed fund to ensure whether it is used for the right
purpose or not .It includes the reporting system and communication
arrangement between the borrower and the lending institution and
within department, appraisal, disbursement, recovery, follow-up etc.

• The borrower’s behavior of turnover.

• The information regarding the profitability, liquidity, cash flow
situation and trend in sales in maintaining various rations.
• Regular checking the balance of SB/CD/STD accounts of the
borrower.
• Periodical visit with the customers to maintain relationship of
supplied articles.
• Legal action to be taken after failing all possible efforts to
recover the bank’s due .
• Issuance of legal notice to the defaulter customers and
guarantors prior to classification of the loans.

Following steps are taken against a defaulter :

• Reminder the party to repay the loan after validity dates

• Send final notice
• Send legal notice
• Eventually sue a case against the party

General disbursement procedure of a loan

The following procedure is applicable for giving advance to the
customer. These are

28
 A. Collecting CIB report from Bangladesh Bank
B. Making Investment proposal
C. Project appraisal
D. Head office approval
E. Sanction letter
F. Documentation
G. Charges on Securities

Step 1: First Information sheet : First information sheet is the
prescribed from provides by the respective branch that contains
Bihar State Co-operative Bank in formation of the borrower . After
getting the information branch credit committee analyzes that
information , which is known as credit analysis. Like other banks
Bihar State Co-operative Bank Limited do two types of credit analysis
. One is quantitative analysis ( Financial Statement Analysis ) and
other is qualitative analysis ( Evaluating the credit worthiness of the
borrower ). Quantitative analysis reflects the past performance of
the organization but the qualitative analysis reflects the future of the
business.

Step 2 : Application for investment : After receiving the first

information sheet from the borrower Bank official verifies all the
information carefully . He also checks the account maintains by the
borrower with the bank. If the official becomes satisfied then he
gives application or Investment from to the prospective borrower.

29
 First Information Sheet


Application for Investment

Collecting for Investment

Making investment proposal

Project Appraisal

Head Office Approval

Sanction Letter

Documentation

Charges on Securities

Step 3 : Collecting CBI Report from RBI bank : After receiving the
application for advance , Bihar State Co-operative Bank sends a
letter to RBI bank for obtaining a report from there. This report is
called CIB (Credit Information Bureau ) report .

Step 4 : Makin Investment Proposal : After receiving CIB report,

concern branch prepare an Investment proposal, which contains
terms, and conditions of Investment for approval of Head Office or
Head of the concerned branch. If the officer thinks that the project is

30
feasible then he will prepare a proposal .JBL prepares
the proposal in a specific form called Investment
proposal.

Step 5: Project Appraisal : It is the pre- investment

analysis done by the officer before approval of the project. Project
appraisal in the Banking sector is need for the following reason :

• To justify the soundness of an investment.

• To ensure repayment of Bank finance.
• To achieve organizational goals.
• To recommend if the project is not designed properly .

Step 6: Head Office Approval : Upon receipt of the Investment

proposal from the branch, the Head Office aging appraises the
project , If it seems to be a viable one , the HO sends it to the Board
of Directors for the approval of the Investment . The Board of
Director (BOD) considers the proposal and takes decision whether to
approve the Investment or not..

Step 7: Sanction Letter : After getting the approval of the HO the

branch issues sanction letter to the borrower.

Step 8 : Documentation : If the borrower accept the sanction letter ,

the Documentation starts. Documentation is a written of fact
evidencing certain transactions covering the legal aspects duly by the
authorized persons having the legal status .

Step 9 : Charges on Securities : There are 6 types of moods of

charging on securities :

Pledge : pledge is the bailment of goods as security for payment of a

debt or performance of a promise.

31
Hypothecation : In case of hypothecation the
possession and the ownership of the goods both rest
the borrower.

Mortgage : According to section (58) of the Transfer of

Property Act , 1882 mortgage is the transfer of an interest in specific
immovable property for the purpose of securing the payment of
money advanced or to be advanced by way of loan, existing or future
debt or the performance of an engagement which may give rise to a
pecuniary liability.

Lien : Lien is the right of thr banker to retain goods of the borrower
until the loan is repaid . The banker’s lien is generak lien.

Assignment : Assignment means transfer of any existing or future

right, property or debt by one person to another person.

Set-off : Set-off means the total or partial merging of a claim of one

person against another in a counter claim by te latter against the
former.

Risk factors of Loan :

Bankers look into key factors or qualitative analysis which has been
classified according to the five Cs of credit :

i) Character : Character refers to the borrower’s honesty and

trustworthiness . A banker must assess the borrower’s integrity and
subsequent intent to repay. If there are any serious doubts, the loans
should be rejected.

ii) Capital : Capital to the borrower’s wealth position measured by

financial soundness and market standing. It helps cushion loss and
reduces the likelihood of bankruptey.

32
iii) Capacity : Capacity involves both borrower’s legal
standing and management’s expertise in maintaining
operations so the firm or individual can repay its debt
obligations.

iv) Condition :A condition refers to the economics environment or

industry specific supply production and distribution factors
influencing a firm’s operations.

v) Collateral : Collateral is the lender’s secondary source of

repayment or security in the case of defalt.

Rate of Int. On Various Scheme Of Non- Ag Loans

SI.No. Name of the Scheme Rate Of INT

1. Consumer Loan 12.00%

2. Personal Loan 12.00%
3. Cash Credit/Term Loan 12.00%
4. Over Draft 12.00%
5. Car Loan 11.00%
6. Housing Loan 8.50%
7. S.R.T.O. Loan 12.00%
8. Gold Loan 11.00%
9. Education Loan 12.00%

Home Loan
Product Feature :

• Home loans of upto Rs 75 lacs.

• Low processing fee .
• Repayment upto 20 years .

33
• Fixed rate of Interest (Current Rate of
Interest -07.50%).
• No Hidden Charges .
• Moratorium period may be offered for
construction.

Eligibility :
• home loan can be availed by salaried individuals, self employed
individuals and professionals.
• Minimum Age – 21 Years
• Maximum Age -65 Years ( the age by which loan should be fully
repaid ).

Purpose :
• Purchase or construction of new house /flat.
• Purchase of old house / flat or extension of old house .
• Repair or renovation of existing house/flat.

Documents Required (applicable to all applicants)

• Loan Application : Loan application form dully filled in affixed
with 2 passport size photographs.
• Proof of Identity ( Any one ) : PAN/Passport/Driving
License/Voter ID Card .
• Proof of Residence/Address ( Any one ) : Recent copy of
Telephone Bill/Electricity Bill/Passport.

Personal Loan

34
 Product Features :
• Personal Loans of up to Rs. 5 Lacs.
• Repayment up to 4 years.
• Fixed rate of interest.
• No Hidden Charges

Eligibility :
• Personal Loans can be availed by salaried employees of
central/state government, semi-government central/ State
PSUs, Education Institute of national repute.
• Minimum Age : 21 Years.
• Maximum Age : 65 Years (the age by which loans should be
fully repaid)
Documentation required ( applicable to all applicants ):
• Proof of identity (Any one): PAN/Passport/Driving
License/Voter ID Card .
• Proof of Residence/Address ( Any one ) : Recent copy of
Telephone Bill/Electricity Bill/Passport/Voter ID card /Aadhar
Card
• Proof of Income : Latest 6 months salary slip or latest Form 16
(in case of income tax payers ).

Vehicle Loan
Product Features :
• Maximum permissible LTV(Loan to Value) Ratio is 80% of ‘on
road price’ of the vehicle.
• Low Processing Fee.
• Repayment up to 5 years.
35
• Fixed Rate of Interest (Current rate of Interest :-
08.50 %)
• No hidden charges

Purpose :
• Purchase of new passenger cars, Multi Utility Vehicle(MUVs)
and Sports Utility Vehicles (SUVs) .

Eligibility :
• Vehicle loan can be availed salaried individuals ,
Self employed individuals ,Professionals ,Businessman,
proprietary firms and others who are income Tax assesses.
• Minimum Age : 21 Years.
• Maximum Age : 65 Years

Documentation required ( applicable to all applicants ):

• Loan Application : Loan application from dully filled in affixed
with 2 passport size photographs.
• Proof of identity (Any one): PAN/Passport/Driving
License/Voter ID Card .
• Proof of Residence/Address ( Any one ) : Recent copy of
Telephone Bill/Electricity Bill/Passport/Voter ID card /Aadhar
Card
• Proof of Income : Latest Salary slip with Form 16 .

Cash-Credit Loan
Product Features :
• Cash – credit loans up to Rs. 2 Crore.
36
• Low Processing Fee.
• Cash-credit loans can be renewed after 12
months.
• Fixed rate of interest.
• No hidden charges.

Purpose :

• Cash –credit loans are provided for income generating small

business activity in manufacturing, service sector or trading
(including Agriculture activities)

Eligibility :
• Cash-credit loans can be availed by individuals, proprietary
concern, partnership Firm, Private Ltd. Company, Public
Company and any other legal firms.
• Minimum Age : 21 Years.
• Maximum Age : 60 Years

Documentation required ( applicable to all applicants ):

• Proof of identity (Any one): PAN/Passport/Driving
License/Voter ID Card .
• Proof of Residence/Address ( Any one ) : Recent copy of
Telephone Bill/Electricity Bill/Passport/Voter ID card /Aadhar
Card
• Proof of Income : Latest Salary slip with Form 16.

37
 Student Education Loan
Product Features :
• Repayment period :Course period +1 years or 6 months after
getting job, whichever is either.
• No processing charges on Education loans.
• Education Loan can be sanctioned up to Rs 10 lakh (To study in
India) and up to Rs 30 Lakh (To study in Abroad) .
• Fixed Rate of Interest.
• No hidden charges.

Purpose :
• Education Loan Scheme seeks to extend financial assistance to
deserving/ meritorious students to pursuing higher education
in India and Abroad .

Eligibility :

• AICTE/UGC approved courses.

• Off Campus/ Off-Shore Campus/Study centre/Distance
Education/ Foreign Universities .
• Imparting Technical education in India .
• Student should be an Indian Citizen .

Loan Against Deposit

Product Features

38
 • Avail up to 75 of the face value of the Term
deposit/Recurring Deposit /National Saving
Certificate (NSC) /Kisan Vikas Patral (KVP) pledge
with the bank.
• Repayment period: The loan will be recovered from the
maturity proceeds of the Term Deposit / Recurring Deposit/
NSC/KVP.

Eligibility :
i. Loan against deposit can be availed by an individual, institution
,firm, company or trust .

Vehicle loan
Table: 1 Calculation of the growth rate of Vehicle Loan

Years Loan(Rs lakhs) Growth rate (%)

2015 75.64 Nil

2016 84.56 11.58

2017 88.25 2.90

2018 89.75 1.52

Mean = /n =17/4 =4.25

Analysis

39
 The above table is showing a vehicle loan of bscb
bank is give the loan most of vehicle loan are
giving the year is 2018 finally bank issue of loan
increasing every year from the 2015 to 2018
Graph: 1 showing growth rate of vehicle loan
120

100

80

60 loan(Rs in lakhs)
Series 2
40

20

0
2015 2016 2017 2018

INTERPRETATION
The above graph indicates that more vehicle loans given in the year
2018 that is 89.75 lakhs with a growth rate of 1.57 % and it is seams
that the growth of the loan is increasing every year from the 2015 to
2018 .

Housing loan
Table 2 : Calculation of the growth rate housing loan
Years Loan (Rs in lakhs) Growth rate (%)
2015 38532.33 Nil
2016 37985.33 -1.91
2017 37000.25 -3.50

40
2018 37800.35 1.94
x/n =-2.47

Mean x/n=-2.47/4=-0.63

Analysis
The above table is showing a house loan in the bscb in this bank
providing a housing loan every year in the year 2016 and 2017 the
bank will provided very level of lone provided after the next the bank
is increasing the housing loan.2018

Graph: 2 showing growth rate Housing loan

35000

30000

25000

20000
Loan (Rs in lakhs)
15000 Loan(rs in lakhs)

10000

5000

0
2015 2016 2017 2018

41
Interpretation
The above graph indicates that more housing loan
provided in the year 2016 is 37985.33 lakhs with graph
rate of -1.91 it has suddenly depressed year by year from 2015 to
2016 it shows that bank provided low loans to purchase house and
finally this year means 2018 increased that is 37800.35 lakhs with a
graph rate of 1.94.

Agriculture loan
Table: Calculation of the growth rate of Agriculture loan
years Loan (Rs in lakhs) Growth rate (%)
2015 380.22 Nil
2016 499.52 42.57
2017 480.52 -4.75
2018 492.10 -3.04
x/n=34.78
Mean =X/N= 34.78/4=8.7

Analysis
The above table showing Agriculture loan is provided more in the
year 2016 Also increased year by year 2015 to 2016 that bank has
provided more number of loan the Agriculture and also has been
declined in the year 2017.

Graph: 3 Showing growth rate of agriculture loan

42
 Agriculture Loan
450
400
350
300
Loan (Rs in
250
lakhs)
200
Growth rate
150
(%)
100
50
0
2015 2016 2017 2018

Interpretation
The above graph indicates that more Agriculture loan is provided
more in the year 2016 that is 499.52 lakhs with a graph rate of
42.57% it also increased year by year from 2015 to 2016 shows that
bank has provided more number of loan on the Agriculture and also
has been declined in the year 2017 that is 480.52 lakhs with the
negative growth value -4.75 and it is expected that in coming future
years the loan given to agriculture will start increasing year by year.

Small Enterprises Loan

Table : 4 Calculation of the growth rate small Enterprises
loan
Years Loan(Rs in lakhs) Growth rate (%)
2015 49295.80 Nil
2016 49495.30 0.50
2017 40050.32 1.40

43
2018 40200.52 3.75
x/n5.65
Mean = x/n= 5.65/4=41

Analysis
The above table showing the that more small Enterprises Loan is
giving in year 2016 it has also increased year by year from 2015 to
2018 it shows that bank has provided many loans on the small
Enterprises.

Graph: Showing growth rate of small Enterprises loan

Small Enterprises Loan

5

4.5

3.5

2.5 Series 1
Series 2
2

1.5

0.5

0
Category 1 Category 2 Category 3 Category 4

44
Interpretation
The graph indicates that more small Enterpriser loan is
giving year 2016 that is 49494.3 lakhs with a growth
rate of 5.172% it has of 5.172% it has also increased year by year
2015 to 2018 it shows that bank has provided many loans on the
small Enterprise

Business Loan
Table: Calculation of the growth rate of Business Loan
Years Loan (Rs in lakhs) Growth rate (%)

2015 349.87 Nil

2016 347.12 68.94
2017 389.21 7.41
2018 425.21 8.50
x/n =95.85
Mean =x/n=95.85/4=23.96

Analysis
The above table showing the that more business loan is given in the
2018 that is more compare to the other year the lowest of the period
is in the year 2015 it shows that bank has provided many loans on
the different types of loan.

Graph : Showing growth rate of Business loan

45
 Business Loan

Series 1
3
Series 2
Series 3
2

0
Category 1 Category 2 Category 3 Category 4

Interpretation
The above graph indicates that more business loan is given in the
year 2018 that is more compare to the other year 2015 that is
425.21 lakhs with a growth rate 6.59% the lowest of the period is in
the 2015 that is 439.87 lakhs with the growth rate of 21.32% it shows
that bank has provided many loans on the different types of loan

Education Loan
Table:6 Calculation of the growth rate Education Loan

46
Years Loan (Rs in lakhs) Growth rate (1%)
2015 752.25 Nil
2016 8882.20 40.58
2017 898.20 1.62
2018 1080.90 16.30
x/n =70.5
Mean = x/n =70.5/4 = 17.62

Analysis
The table showing the that more Education Loan is giving in year
2018 it has also increased year by year 2015 to 2018 it shows that
bank provided many loans on the Education Loan.

Graph : 6 Showing growth rate of Education Loan

Education Loan
1400

1200

1000

800
Loan (Rs in lakhs)
600 Column2

400

200

0
2015 2016 2017 2018

Interpretation
47
The above graph indicates that more Education Loan is
giving increased year from 2015 to 2018 it shows that
bank has provided many loans on the Education loans.

Jewel loan
Table: Calculation of the growth rate of jewel loan
Years Loan ( Rs in lakhs) Growth rate (%)
2015 3545.25 Nil
2016 1932.25 -35481
2017 2254.25 10.98
2018 2393.25 4.27
x/n=-20.23
Mean =x/n=-20.23/4=-5.05

Analysis
The above table showing the that more Jewel loan is given in the
year 2015 it has shown previous years may be more so this shows
negative value but it also indicates that 2017 and 2018 it has started
increasing and it may go on.

Graph:7 showing growth rate of Jewel Loan

5000
4500
4000
3500
3000
2500 Series 1
2000 Series 2
1500
1000
500
0
2015 2016 2017 2018

Interpretation
48
The graphs indicates that more Jewel loan is the year
2015 that is 2015 is 3545.25 lakhs with a growth rate of
negative that is -13.01% it has shown previous years
may be more so this year shows very negative value
but it also indicates that in 2017 and 2018 it has started increasing
and it may go on.

House Building Advance

Table : 9 Calculation of the growth rate Housing Building
Advance
Years Loan ( Rs in lakhs) Growth rate (%)
2015 295.25 Nil
2016 269.25 -6.5
2017 198.25 7.85
2018 310.75 3.13
x/n=-4.48
Mean = x/n=-48/4=1.12

Analysis
The above table showing the that in house building Advance more is
given in the year 2018 in the precious year 2016 is getting negative
value it has shown the loan provided will be increasing to year by
year

Graph : 9 Showing growth rate of House Building Advance

49
 500

400

300
Loan(Rs in lakhs
200
growth rate
100

0
2015 2016 2017 2018

Interpretation
The above graph indicates that in house building Advance is given in
the year 2018 that is 310.75 lakhs with the growth rate 3.13%. in the
previous year 2016 is getting negative value that is 269.25 lakhs with
the growth rate -6.5% it has shown the loan provided will be
increasing to year by year.

Staff Vehicle Advance

Table : 10 Calculation of the growth rate of staff Vehicle
Advance
Years Loan (Rs in lakhs) Growth rate (%)

2015 38.25 Nil

2016 40.25 2.03
2017 44.25 7.96
2018 50.75 11.98
x/n=-21.97
Mean =x/n 21.97/4=5.49
Analysis

50
The above table showing the that more Staff Vehicle
Advance is giving in year 2018 it has also increased year
by year from 2015 to 2018 it shows that bank provided
many loans on the Staff Vehicle Advance.

Graph : 10 Showing growth rate of staff vehicle advance

70

60

50

40
Loan( Rs in lakhs )
30
Growth rate (%)
20

10

0
2015 2016 2017 2018

Interpretation
The above graph indicates that more Staff Vehicle Advance is giving
in year 2018 that is 50.75 lakhs with a growth rate of 11.98% it has
also increased year by year from 2015 to 2018 it shows that bank has
provided many loans on the Staff Vehicle Advance.

Loans and Advance from 2014-2015 to 2017-2018(Rs in

lakhs)
Table: 12
LOANS & 2014-2015 2015-2016 2016-2017 2017-2018
ADVANCES

Vehicle loan 75.64 84.56 88.25 89.75

Jewel loan 3545.25 1932.25 2254.25 2393.25
Retail trade 3562.32 3832.23 4125.22 4357.78
51
loan
Housing loan 11952.86 18523.33 17985.34 27800.35
Construction 3136.75 4753.58 4952.25 4997.90
loan
Agriculture 180.22 299.52 280.52 292.10
loan
Micro credit 2045.65 2254.52 2325.25 3001.10
loan
Business loan 149.87 347.12 389.21 425.91
Small 29295.8 29495.3 30050.32 40200.52
Enterprises
loan
Transport 225.25 442.25 501.25 598.09
loan
Education 552.25 982.2 898.2 1280.2
loan
Special Salary 148.66 139.36 245.36 385.36
Advance
Housing 295.25 269.25 298.25 310.75
building
advances
Staff Vehicle 39.25 40.25 44.25 50.75
Advance
Festival 1.652 3.25 5.652 6.123
Advance
TOTAL 55206.672 63398.86 64443.572 83188.833

This table above is showing the details loans and advances provided
by Bihar state cooperative Bank Limited in that bank has issued more
for small enterprises loans and housing building advances are issued

52
more compare to advances during the year of 2014-
2015 to 2017-2018.

Analysis
As per this table we can finalize that more customers are interested
to get loans from BSCC Bank interested in issuing Housing building
advances compare to other advances. The loans given to borrower
are increasing every by year it is showing that the bank will increase
the every year.

Findings
➢ The Bihar state co-operative Bank Limited is best placed to
meet the needs of customers and their needs.
➢ Dividends and advance payments increase each year.
➢ The Bihar state Co-operative Bank Limited will increase each
year by providing loans and loans.
➢ Interest rates that provide deposits and loans to various
customers in the income group.
➢ The Bank has established a Balance sheet Management
Committee for asset and liability management purposes and
adheres strictly to RBI’s guidelines for ATMs.

Suggestions
1. The bank must grant loans to avoids any repayment and know the
solvency of the customer before making a loan.

2. You must inform you bank of the obligation to return the money
you have borrowed. The borrower must be informed of the different
loan and loan collection protocols at the time of the loan.

53
3. Evaluation techniques used in the ALTMAN-Z SCORE
analysis is a better way to determine the
creditworthiness of the borrower. The bank must
inform the bank of this fact to reduce the risk.

4. The Bihar co-operative will conduct detailed research on the

borrower and the various risk before approving the loan.

5. Loan should be provided at low rates and in sufficient quantities

for all kinds of people to do so and save money in the loan.

6. A bank that maintains sufficient cash balances to maintain a better

liquidity position.

7. The bank must provide the bank with more ATMs and other
banking services.

8. The must increase the number of branches in other regions and

increase the facilities available to customers for future growth.

9. The bank should focus on providing additional services to existing

customers other than banking services.

54
 SWOT ANALYSIS
1. STRENGTH:
I. Provide loan farmer & artisans at low of interest.
II. Provide MICRO FINANCE.
III. Help in rural upliftment.
IV. Backed by government.
V. No profit making motive.

2. WEAKNESS:
1. Far from technology.
2. No ATM machines.
3. No RTGS , NEFT system available ( not yet).
4. Poor structure of bank .
5. Lack of staff.

3. OPPORTUNITY
1. Development opportunity available.
2. Scope of expansion.
3. job opportunity

4. THREATS:
1. Increase in number of NPA (Non Performing Asset).
2. No ATM it be threat in nearer future.
3. Large customers is of poorer status

55
Conclusion :
This project was being conducted on “Loan Disbursement And
Recovery Procedure Of State Cooperative Bank” with regard to Bihar
State Cooperative Bank . Loans play an important role in the financial
performance of the bank’s long- term growth. Banks should focus on
reducing the risks associated with loans. The lower the level of risk,
the higher the risk, the lower the profits of the bank.

There is a wide range of loan components in India, particularly in the

small business lending and housing construction sector. Banks must
adopt a dynamic and innovative credit system. The study concluded
that various types of lending and borrowing functions are superior in
all areas. The study concluded that loans granted by banks for
housing construction and SME loans are increasing every years .

Banks must adopt essentially quantitative methods such as the

ALTMA-Z-SCORE test to manage the credit risk associated with loans.
First, identify the risks and assess the risk of good decisions. The
bank can then decide to lend the loan or lend it to the company or
individual. You must then adjust the appropriate interest rate based
on the borrower’s rating. Banks focus on measuring credit risk .
Connect with various bank borrowers. For this purpose, the primary
valuation variable of the bank is used as the predictor variable. It’s
difficult to say decisively. An approach is best suited for predicting
defects, and each approach has its advantages and disadvantages.

56