DESIGN AND CASE STUDY OF THE PROBLEM

LOANS
Loans and advances become the backbone of any banking business. So lending is he most
profitable activity. Any amount borrowed or lend is called loan. Loan is a method of lending
under which bank gives credit to a borrower for a fixed period and for a specific purpose. Bank
charge interest for loans. Loans are promises for future payments; they have to be repaid in
periods beyond a year.
The nature of borrowing is that the money is disbursed and recovery is made in installments.
Depending upon the purpose and period of loan each loan scheme has its own procedure for
granting loan. However, the bank has the liberty to accept or reject loan application depending
upon its own cash position and lending policy.
As per Co-operative society's Act 1969, the bank only provides loans to its members or
shareholders. The loan application sanctioned after getting the permission of board of directors
in the board meeting.
The Bank provides different types of loans to members, they are:
• AGRICULTURE LOAN
• GOLD LOAN
• ORDINARY LOAN
• SIMPLE& MORTGAGE LOAN
• RESURGENT LOAN
• SELF EMPLOYMENT LOAN
• BUSINESS LOAN
• KUDUMBASREE LOAN
PROCEDURE FOR SANCTIONING LOAN
The loan is issued only to members who have taken the requisites number of shares.
The prescribed application form should be filled up with necessary information regarding the
name, address, membership number, share taken, land or other assets possessed, amount,
purpose etc.
On the receipt of the application form the secretary shall scrutinize the proposal
with reference in the following:
1. Loans eligibility of members with reference to share Capital and scale of finance for each
crop.
2. Actual requirement.
3. Genuineness of the purpose of loan
4. Period of loan.
5. Repaying capacity
6. Security offered
In the case of mortgage of immovable property, the legal verification of title deed and last 13
years encumbrance certificate, Land Tax Receipt, if a building, building tax receipt, possession
and land Acquisition certificate of the property is inevitable to clear the title of the borrower.
After these steps loan application will have handed over to the members of committee for
valuation.
The valuation includes total enquiry, spot inspection, consideration of sales tariff of property in
the area etc. After Verification, the amount is sanctioned by the society. For disbursement of
loans the following books are to be kept by the society.
• Loan application register.
• Loan ledger.
• Liability register.
• Land register.
• Credit Limit statement.
• Loan sanction report Sanctioned by Board of Directors.
LOAN RECOVERY PROCEDURE
1. Intimate the defaulter through oral reminders.
2. Follow them up with a written reminder.
3. Send a legal notice asking for all pending dues to be cleared within a specified period or else
face legal proceedings.
4. Ask the Board of Directors for a resolution empowering the bank official to file recovery suite
against the defaulter.
5. Serve notice of prosecution and summons to the loance and sureties.
6. Convince the competent authorities with supporting documentation, to issue an award to
recover the loans from the defaulter.
7. After receiving the competent authority's award, the degree for execution of the award or
order is decided. The outstanding payments can be recovered by attaching the movable and
immovable property of the borrowers and guarantors with the right to sell the properties thus
attached.
In this process of recovery, the bank can seek the help of the co-operative department which is
a government body. The special recovery officers thus appointed by the bank can enjoy the
rights of the civil court. They also have the seal of Government of the state which gives them
the powers to recover the loan amount without much legal complications.
LOANS AT GLANCE
SL NO TYPES OF LOAN DURATIO INTEREST PENAL
LOAN AMOUNT N INT.
1 Ordinary loan 25000 2 year 12% 2%
2 Self - 500000 5 year 10% 2%
employment
loan
3 Business loan 100000 2 year 10% 2%
4 Kisan credit 100000 1 year 11.7% 2%
loan
5 Gold loan 600000 6 months 10% 2%
3 months 9.5%
6 Mortgage 1500000 5 year 12% 2%
loam
7 Kudumbasree 1000000 36 months 8.25% 2%
loan
 TYPES OF LOANS

AGRICULTURAL LOAN
Short term, medium term agricultural loan based on personal security or security on the
property, the loan amount determined by the registrar, interest rate, maturity equity ratio not
exceeding can be given to members as per the direction of board of directors.
TABLE SHOWING AGRICULTURAL LOAN

year Loan amount Changing in the percentage

amount from
previous year
2017-2018 5906579.00
2018-2019 7675574.00 1768995 29.94%
2019-2020 7754056.00 78482 1.02%
2020-2021 12524105.00 4770049 61.51%
2021-2022 8841105.00 -3683000 29.40%

DIAGRAM SHOWING AGRICULTURAL LOAN

14000000

12000000

10000000

8000000

6000000

4000000

2000000

0
2018-2019 2019-2020 2020-2021

Interpretation
Agricultural loan started in the year 2017-2018.
 GOLD LOAN
Gold loan is a type of loan in the bank that accepts any type of gold ornaments of jewellery as
securities for giving the loan. The interest of loan varies to the duration that six months, three
months and one month.
TABLE SHOWING GOLD LOAN

year Loan amount Changing in the percentage

amount from
previous year
2017-2018 55023176
2018-2019 56194301 1171125 2.12%
2019-2020 61490282 5295981 9.42%
2020-2021 62689133 1198851 1.94%
2021-2022 58679062 -4010071 6.39%

(BY=PY)

DIAGRAM SHOWING GOLD LOAN

70000000

60000000

50000000

40000000

30000000

20000000

10000000

0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation:
ORDINARY LOAN
Ordinary loan is provided by the bank to its members on the personal security. A maximum of
25000 for 2 year can be availed under the ordinary loan.
TABLE SHOWING ORDINARY LOAN

year Loan amount Changing in the percentage

amount from
previous year
2017-2018 5191731
2018-2019 4718691 -473040 9.11%
2019-2020 4005116.13 -713575 15.12%
2020-2021 5031483 1026367 25.62%
2021-2022 8984313 3952830 78.56%

DIAGRAM SHOWING ORDINARY LOAN

10000000

9000000

8000000

7000000

6000000

5000000

4000000

3000000

2000000

1000000

0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation:
RESURGENT LOAN
Resurgent Kerala loan scheme is aimed to provide immediate financial support to regain the life
and livelihood and to hold and pacify those who stands in misery along with the loss of this
state followed by impact of the worst natural disaster faced by.
TABLE SHOWING RESURGENT LOAN

year Loan amount Changing in the percentage

amount from
previous year
2017-2018 232839139
2018-2019 31937585 -200901553 86.28%
2019-2020 23556974 -8380611 26.24%
2020-2021 27301467 3744493 15.89%
2021-2022 15833760 -11467707 42.00%

DIAGRAM SHOWING RESURGENT LOAN

250000000

200000000

150000000

100000000

50000000

0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation:
Simple & Mortgage loan
Simple loan is distinguished from other forms of mortgage by the presence of a personal
covenant.
TABLE SHOWING MORTAGE LOAN

year Loan amount Changing in the percentage

amount from
previous year
2017-2018
2018-2019 234646233
2019-2020 255440687 20794454 8.86%
2020-2021 27301467.50 -228139219.5 89.31%
2021-2022 244996764 217695296.5 797.37%

DIAGRAM SHOWING MORTGAGE LOAN

300000000

250000000

200000000

150000000

100000000

50000000

0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation:
TOTAL LOANS
The important function of the bank is to lend money. Loans are granted either on personal
securities or on other tangible securities.
TABLE SHOWING TOTAL LOANS

year Loan amount Changing in the percentage

amount from
previous year
2017-2018 298960625
2018-2019 335172384 36211759 12.11%
2019-2020 352247115 17074731 5.09%
2020-2021 366696622 14449507 4.10%
2021-2022 337335004 29361618 8.00%

DIAGRAM SHOWING TOTAL LOANS

400000000

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2017-2018 2018-2019 2029-2020 2020-2021 2021-2022

Interpretation
TOTAL DEPOSITS

TABLE SHOWING TOTAL DEPOSITS OF BANK

Year Amount Increase/ percentage

Decrease
2017-2018 421867761.29
2018-2019 469065847.73 47198086.44 11.18
2019-2020 508927067.16 39861219.43 8.49
2020-2021 540143417.11 31216349.95 6.13
2021-2022 507446724.29 -32696692.82 6.05

DIAGRAM SHOWING TOTAL DEPOSITS OF BANK

600000000

500000000

400000000

300000000

200000000

100000000

0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation:
OVERDUE POSITION

TABLE SHOWING OVERDUE POSITION

Year Amount Increase/Decrease percentage

2017-2018 86721365
2018-2019 100585044 13863679 15.98%
2019-2020 118588136 18003092 17.89%
2020-2021 134511214 15923078.5 13.42%
2021-2022 158169151 23657936.5 17.58%

DIAGRAM SHOWING OVERDUE POSITION

180000000

160000000

140000000

120000000

100000000

80000000

60000000

40000000

20000000

0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation:
COMPARISON BETWEEN TOTAL LOANS&TOTAL DEPOSITS

CREDIT DEPOSIT RATIO

CD RATION= TOTAL LOANS OUTSTANDING/TOTAL DEPOSITS OUTSTANDING *100

TABLE SHOWING CD RATIO

Year Total loan Total Deposit C D Ratio
2017-2018 298960625.13 421867761.29 70.8%
2018-2019 335172384.63 469065847.73 71.4%
2019-2020 352247115.63 508927067.16 69.2%
2020-2021 366696622.63 540143417.11 67.8%
2021-2022 337335004.36 507446724.29 66.4%

DIAGRAM SHOWING C D RATIO

400000000

350000000

300000000

250000000

200000000

150000000

100000000

50000000

0
2017-2018 2018-2019 2019-2020 2020-2021 2021-2022
Interpretation: