Loans for self employment
Due to recession, lock outs and frequent strikes in the industry, people find it safe to be self employed. So there is a need to attract new and young entrepreneurs.
Bank lending for a self employment purpose is increasing therefore more attention should be given towards this area.
Advertising
The area of operations of the bank is mainly the industrial as well as residential sector in the area of Solapur, Vijapur, and other district’s places. The bank should take advantage
of this and arrange any advertising campaigns and loan festivals to attract new customers.
Housing Loans
As there is more demand for housing loans, it forms the major part of advances portfolio of the bank. Almost 25% of the total advances are given for the housing loan purpose.
Population is increasing rapidly in the places where the branches are located especially in the area of Solapur, Pandharpur and mohol and also people shift their homes from old chawls and buildings to newly constructed, fully furnished flat systemised buildings, which costs a lot than the resale value of their previous houses. Now in this case people require housing loans to meet the margin. So such customers can be targeted and served considering their convenience.
First of all is to keep the margin for housing loans to lower side. Because the cost of accommodation is increasing and its very much difficult for a common man to buy a house with his own savings.
The bank may bring flexibility in their rules and follow easy instalment schemes.
If possible, the bank should be more liberal while lending for housing purposes. At present the bank advances 30 times of the net income of the borrower. Instead the bank should advance more times of customer’s salary/ income.
Broaden the work area
The bank should broaden the area of work and its service. At present the bank already has 35 branches in Maharashtra & Karnataka. But still some important districts are unexplored by the bank. Districts like Baramati and Usmanabad, where the industrial
area is much widen now a days, these districts are still untouched by Bank.
Special scheme offering
Bank can introduce new and attractive loan scheme at the time of festival or such occasions so that more number of customers can be delighted with the special offers or discounts. The bank has to give attention towards the interest rates it charges from the competitor analysis it has been found that almost all the banks charge at reducing balance method. Today the bank has to change with changing time and improve their lending rates.
Concentration on personal loan
It has been observed that the personal loan has higher interest rates. Personal loan in the bank is given up to 6.65 Cr. only. Thus it indicates that the proportion of the money lend is relatively smaller than the money they will have to lend in case of housing loan or vehicle loan. It is also observed that the customers are willing to get personal loan for the purpose of repayment of previous debts. It means the customer has hurry to get the personal loan from the bank as soon as possible. Thus on higher rate of interest and with lenient security against loan or without any mortgage the bank can provide the loan and create the bank value in the eyes of the customer.
Small scale industry finance.
Small scale industry finance seems the ignorant sector from the big commercial bank like ICICI , IDBI and HDFC banks. Small scale sector is growing rapidly. So that, the bank needs to attend the small scale industry customers and serve their purpose. Today small scale industry can be said as the back bone of industry. So the bank can’t ignore this anymore. More encouragement is required to be given to the small scale businessmen by the bank.
Documentation of guarantors
To decrease the growing numbers of NPAs, bank needs to take more care while selecting the guarantor. The guarantor’s financial viability should be up to the mark and he should complete his all the documentation work for the forward procedure of the money lending.
At least 2 valid guarantors should be there in any loan application.
Easy instalment facility
The applicant should be made available with the easy instalment facility. The borrower sometimes may be busy with the work or due to any other reasons he may not be able to come to the bank personally to make the payment of instalment of the loan taken. In this case the bank should facilitate the borrower with the direct debit from the saving bank account service. This will save the time of borrower and make him relax and tensionless.
From the bank’s point of view, time to time payment will be made from the borrower which will result into a good reputation of the bank.
Check of fraud
It is observed that in general more number of bank related frauds is made by borrower of loan. Fake and forger documents are represented and thus loans are taken. So to avoid that special auditing department to check the viability and competency level of the loan applicant should be created. Document inspection, special interview and personal inspection in case of property mortgage should be done by the department. This department should check the creditworthiness of the loan applicant and then they will submit their report to upper level which is Credit department which is in charged by Mr.Fadatare.R.V
Proper Remainder System:
It is very much observed that Bank lacks in proper remainder system for the loan account holders to pay their due instalments in time. It will also help their creditworthiness with the bank. Therefore, I would advice to the bank to keep good remainder system to remind its loan account holders. It will certainly reduce the amount of NPAs. If the NPAs amount goes down then, it will surely reflect in the profit of the bank.
CHAPTER 8
SUGGESTIONS
•
• Suggestions:
• The basic function of the bank is to accept deposits in various ways through customers which are account holders of the bank and invest them into productive activities in the form of loans. The difference between the rate of deposits and the rate of interest on lending money in term of loan is the profit for the bank.
• Suggestions to improve bank’s lending procedure
• Finance to business community
• Focus on housing and commodity loan
• Bifurcate housing loans according to the loan amount
• Finance to small scale industries
• Service area should be broadened
CHAPTER 9
• CONCLUSION
• CONCLUSION:
While doing my project I had a chance to look into the vast field of Loan Procedure and disbursement. I could only touch a small part of the topic. But after going through the whole process I firmly believe that before going for any loan decision there is a need to classify the borrower type and his need according to the creditworthiness of the borrower.
It is also true that there is confusion towards a new loan offer by the Banks. Not it’s always better to take loan from the bank having good past record.
I have learnt the provisions of granting the loan to the borrower according to their income level and degree of need. The Dhanshri Multi-State Co-operative Bank Ltd is marketing its bank properly by adopting new banking schemes like SMS Banking, Internet Banking and Telephone Banking. Bank is the first Dhanshri Multi-State cooperative bank in Solapur,jat to introduce SMS Banking. Keeping proper marketing agenda in mind
The bank is also visiting to the villages which are near to the Solapur, Jat, Vijapur district. Bank has to start the Transferring money from one place to another
(remittances).It is first Multi-State Co-operative bank in Solapur ,Jat ,Vijapur to start Call Deposite for 15 Days to the customer.
The Loan management of this Bank consists of many stages. It is responsibility of Loan officer to check the credit worthiness of the applicant.