“A Study of Agriculture Loan Offered by SBI Bank”

CHAPTER NO. 1

INTRODUCTION

1. Introduction

1.1 Loan
A loan is a type of debt like all other debt instrument; a loan entails the redistribution
of financial assets over time between the lender and the borrower.

In a loan the borrower initially receives or borrows amount of money, called the
principal from the lender, and is obligated to pay back or repay an equal amount of
money to the lender at a later time. Typically money is paid back in regular
instalments or partial repayment in an annuity, each instalment is the same amount.

The loan is generally provided at a cost referred to as interest on a debt, which

provides an incentive for the lender to engage in the loan. In a legal loan, each of
these obligations and the restrictions is enforce by contract, which can also place the
borrower under additional restriction known as the loan covenants. Loan is a an act of
giving money property or other material good to another party in exchange for the
future repayment of the principal amount along with interest. Acting as a provider of
loan is one of the principal tasks for the financial institutions such as banks and credit
card companies. Loans typically are secured loan or unsecured loan. A secured loan
involves pledging an assets such as car, boat and house) as collateral for the loan, if
the borrower default or doesn't pay back the loan, the lender takes possession of the
assets. As unsecured loan option is preferred, but not as common if the borrower
doesn't pay back the unsecured loan, the lender do isn't have right to take anything in
return.

Loans can come from individuals, corporations, financial institutions and

government. They are a way to flow the overall money supply in an economy as well
as open up competitions, introduce new products and expand business operations.
Loan is a primary source of revenue for many financial institutions such as banks, as
well as some retailers through the use of credit facilities.

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Definition of Loan

“An arrangement in which a lender gives money or property to the borrower and the
borrower agrees to return the property or to repay the money, usually along with
interest, at some future point (s) in time. Usually, there is a predetermined time for
repaying the loan, and generally the lender has to bear the risk that the borrower may
not repay a loan".

"An amount of money loaned at interest by a bank to a borrower, usually on

collateral security, for a certain period of time"

“A loan may be for a specific, one- time amount or can be available as open-ended
credit up to a specified celling amount".

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1.2 Various Loans Offered by SBI Bank

Various loan schemes offered by SBI bank for their customers.

1. Gold Loan

2. Vehicle Loan

3. Mortgage Loan

4. Term Loan

5. Cash Credit

6. Agriculture Loan

Gold Loan

Agricultural
Vehicle Loan
loan

Various Loans
offered by
bank

Mortgage
Cash Credit
Loan

Term Loan

Chart No. 1

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Vehicle loan

A vehicle loan is basically a loan that you can take out in order to purchase a vehicle.
In a vehicle loan you are not paying on the depreciation of the vehicle like you do
with a lease. Vehicle loan is generally offered by SBI bank at an interest rate of 14%.
You are paying on the vehicle with purchase price plus interest.

Buying the vehicle may be right for you if:

You have the money to make a significant down payment (20% or more)

 You would like to be able to trade in your vehicle.

 You prefer to own your vehicle.
 You like to travel and don't want to have restrictions about mileage
restrictions.
 You are tough on your vehicle and don't want to worry about wear and tear
charges.

Mortgage loan: -

A loan that is secured by a property or real estate is called a mortgage. In exchange

for fund received by the homebuyer to buy property or a home, a lender get the
promise of that buyer to get back the fund within a certain time frame for a certain
cost.

A mortgage loan is also referred to as a mortgage is used by purchasers of real

property to raise funds to buy real estate or by existing property owners to raise funds
for any purpose while putting a lien on the property being mortgaged. The loan is
“secured" on the borrower's property. Mortgage loan is offered at 13% by the bank.

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Term loan:-

A term loan is a monetary loan that is repaid in regular payment over a set period of
time usually last between one and ten years but last as long as 3 years in some case.
A term loan usually involves floating interest rates that will add additional balance to
repay.

Term loan can be given on an individual basis but are often use for small business
loans. The ability to repay over a long period of time is attractive on new or
expanding enterprises as the assumption is that they will increase profit over time.

Term loan provided by Urban Co-operative bank may include:-

 Building and Development term loan for working capital

 Plant and Machinery term loan
 Personal loan

Cash Credit

A cash credit is a short term credit provided by a bank. A bank provides this type of
funding but only after the required security is given to secure the loan. Once a
security for repayment has been given the business that receives the loan can
continuously draw from the bank up to a certain specified amount.

Bank offers cash credit account to business to finance their working capital
requirement the cash credit account is similar to the current account. The cash credit
account is supposed to be overdrawn almost continuously. The extent of overdrawing
is limit to the cash credit limit that the bank sanctioned.

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Gold Loan

As the name suggest gold loan is given against gold. Many nationalized banks,
private bank and other financial companies offer this loan at attractive interest rates.
Many go for this loan for the short-term period to meet the requirement of their
children's education, marriage and other financial problems in the family.

Gold loan doesn't demand any certificate to show your salary, your income or no
credit card history is required. One of the main advantages of gold loan is the low
interest rates. Usually loan over gold is provided at the interest of 12- 16% pa and
this is quite low as compared to personal loan which is available at interest rate of 15-
26% pa.

Fixed Deposit Receipt

A fixed deposit receipt issued by the same bank is the safest security for granting an
advance because the receipt represents the debt due from the banker himself. A
banker should grant an advance on a security of a fixed deposit receipt issued by the
other bank because the later possesses its paramount lien over the receipt. It may over
refuse to register the lien of the banker granting a loan against such receipt. The
banker should normally advance a loan to the same person or persons in whose name
the receipt is issued. In case it is issued in case of two or more persons, and loan is
sought by one of them, all the depositors must signed a letter of authority authorizing
the bank to sanction a loan to one of them on the basis of receipt.

Agricultural Loan

Agricultural loan is a broad term that encompasses a number of businesses in

agriculture including food production, farming, agrochemicals, farm machinery,
warehousing, wholesale and distribution, and processing, marketing and sale of food
products. Agricultural loan are available for a multitude of farming purpose to buy
input for the cultivation of food grain crops as well as for the husbandry, floriculture
and sericulture business.

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1.3. What is agricultural Loan?

Agricultural Loans are made to farmers to finance farming activities. Short-term

agricultural loans are usually seasonal and are used to finance the purchase of seeds,
fertilizers and livestock. These types of loans usually require a lending officer to
inspect the borrower's farm once a year. These types of financing are adapted to the
specific financial needs of farmers, which are determined by planting, harvesting and
marketing cycles. Short terms credit finances operating expenses, intermediate- terms
credit is used for farm machinery, and long-terms credit is used for real-estate
financing.

Agricultural loan is a broad term that encompasses a number of businesses in

agriculture including food production, farming, agrochemicals, farm machinery,
warehousing, wholesale and distribution, and processing, marketing and sale of food
products.

Agricultural loan are available for a multitude of farming purpose to buy input for the
cultivation of food grain crops as well as for the husbandry, floriculture and
sericulture business. These are also special loan to finance the purchase of
agricultural machinery such as tractors, harvesters and trucks. Construction of biogas
plant and irrigation system as well as the purchase of agricultural land may also be
finance through special type of agriculture finance.

Financial assistance rendered to Agriculture can be broadly classified as direct

finance to agriculture and Indirect finance to agriculture.

Direct finance to individual farmers, for agriculture and allied activities (Dairy,
Fishery, Piggery, Poultry, Bee keeping, etc.

Indirect finance denotes finance provided by banks to farmers indirectly i.e. through
other agencies.

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Sources of agriculture finance

1 non-institutional sources

 Money lenders
 Traders
 Commission agents
 Traders

2 Institutional Source

 Co-operative credit societies

 Commercial Banks
 Regional Rural Banks
 National Banks for Agriculture and Rural Development (NABARD)

MEANING

Agriculture loan as the economic study of borrowing of funds by farmers of the

organization and operation of farm, lending agencies and societies interest in credit
for agriculture.

Agricultural loan helps farmers to run their farm more efficiently. It can be difficult
to keep up with all of the cost associated with running a farm. So farmers need low
interest agriculture loans to helps them stay afloat.

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DEFINITION

“Agricultural loan is the amount of investment fund made available for agricultural
production from resources outside the farm sector.”

-Warren L. Lee

A loan is a debt provided by an entity (organization or individual) to another entity at

an interest rates, and evidence by a note which specifies, among other thing, the
principal amount, interest rates and the date of repayment.

The act of giving money, property or other material good to other party in exchange
for the future repayment of principal amount along with the interest or the other
financial charges.

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1.4. Types of Agricultural Credit:

Agriculture requires the following three types of credit;

1. Short-Term Credit

Meeting the working capital arrangements of agriculture. For instance, they need
Short term credit for the purchase of seeds, fertilizers, pesticides, bullock "sand other
casual expenses. Sometimes short term credits are also raised for paying rent,
revenue and also meeting the financial requirements of the family. The Short term
credit is repaid after marketing the product of next crop. The short term credit ranges
up to one year. The farmers need short term credit for credit is repaid after marketing
the product of next crop.

2. Medium Term Credit:

The medium term loan extends from 1 to 5 years. The farmers require medium term
credit for the purchase of cattle, purchase of implements improvements in water
courses etc. The loan is obtained on the security of movable and Implements.

3. Long Term Credit:

The duration of long term credit exceeds five years. The farmers need long term
Credit for making improvements of permanent nature in land such as sinking of Tube
wells, reclamation of land, building, purchase of machinery and implements.

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1.5 Sources of Agricultural Credit:

Credit in the farm sector is available from following sources:-

1. Non-Institutional Source/ Informal Sources:

The major non-institutional sources of farm credit are money lenders, friends,
Relatives, shopkeepers and commission agents. Before 1947, the money lenders
Mostly non-Muslims were the main suppliers of loans to the farmers. After Partition,
however their importance has decreased to a great extent and the short-term credit
needs of the farmers are met from commission agents, friends and relatives which
supply roughly 50% of total rural borrowing. The trader's and commission agents
advance loans to the farmers for short period. These loans are provided mostly for
productive purposes before the maturity of crops. The commission agents force the
farmers to sell the produce to them which generally is purchased at low rates. The
lenders of the informal sources (friends, relativistic) have certain advantages over the
formal credit sources. The informal lenders usually know the borrowers personally.
They require little security for advancing loans. The loan is given for consumption as
well as production purposes. The lenders are approachable at all times. They are also
lenient in rescheduling loans. However, informal lenders are also accused of charging
higher rates of interest. They extract monopoly profits from the borrowers.

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2. Institutional Sources/Formal Sources

The major institutional sources of agricultural credit are Agricultural Development

Bank, State Banks. Commercial Banks. Cooperative Bank.

1 Agricultural Development Bank (ADB): This bank was established in 1961

through merger of Development Finance Corporation and go Bank. It is an important
source for supply of credit to agricultural sector. It provides short, medium and long
term credits for farm and off farm activities. The banks have five windows of
investment. (1), Development (2) Production loans (3) Agri-business loans (4)
Cottage industry loans and (5) Off farm income to farmers generating activities loans.

2. Commercial Banks: This Bank was introduced into the field of agricultural credit
under the Banking Reform Act of 1972. The Banks, since then, are providing loans to
the farmers for meeting their short and medium term requirements. The loans are
advanced to the farmers against the security of land, crops, and fixed assets and even
on personal security, Commercial Banks disburse agricultural credits for the purchase
of inputs Cattle, tractors, dairy farming, and installation of tube wells etc. Banks
provide loans under the Supervise Credit Scheme and outside the Supervise Credit
Scheme.

3. Cooperatives: The cooperatives are oldest institutional sources of farm credit. The
performance of cooperatives in the spread and utilization of credit to the small
farmers is not satisfactory. The loans are mostly utilized by big farmers who have got
their pocket societies Registered with their cooperative department.

4. Taccavi Loans: -Taccavi loans are handled by the Provincial Revenue department.
Necessary funds are allocated for different areas each year in the provincial budgets.
The Taccavi loans are primarily given to farmers for meeting emergencies such as
flood, earthquake, famine etc. The farmers take these advances in the spirit of gift or
relief given in the calamity and are not serious in repaying them. Now this source is
now occupying insignificant position in the disbursement of overall credit to the
farmers. Agricultural loans are being made available to the farmers at low mark up.

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Significance of Agricultural Finance:

1. Agriculture finance assumes vital and significant importance in the agro-

socioeconomic development of the country both at macro and micro level.
2. It is playing a catalytic role in strengthening the farm business and
augmenting the productivity of scarce resources. When newly developed
potential seeds are combined with purchased inputs like fertilizers & plant
protection chemicals appropriate / requisite proportions will result in higher
productivity.
3. Use of new technological inputs purchased through farm finance helps to
increase the agricultural productivity.
4. Accretion to in farm assets and farm supporting infrastructure provided by
large-scale financial investment activities results in increased farm income
levels.
5. Far finance can also reduce the regional economic imbalances and is equally
good at reducing the inter-farm asset and wealth variations, Farm finance is
like Lever with both forward and backward linkages to the economic
development at micro and macro level.
6. As agriculture is still traditional and subsistence in nature, agricultural finance
is needed to create the supporting infrastructure for adoption of new
technology.
7. Massive investment is needed to carry out major and minor irrigation
projectural electrification, installation of fertilizer and pesticides plants,
execution of agricultural promotional programs and poverty alleviation
programs.

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1.6 Need for Agricultural Credit:

Credit is required in every type of business and agriculture is not exception of it. The
Need for agriculture credit becomes more important when it moves from traditional
agriculture to modern agriculture. The agriculture sector at present is best with
number of handicaps. The land holding is very small. The population is growing at a
fast rate, Agricultural labour is often underemployed. Production suffers from
weather risks. The capacity of farmers to save and invest is very low. The agricultural
productivity is low due to low use of inputs. The farmers therefore, need credit to
increase productivity and efficiency in agriculture. This need is increasing over the
years with the rise in use of Fertilizers, mechanization and rise in prices. Briefly the
need for agricultural credit can be summed up as follows:

1. Purchase of new inputs: The farmers need finance for the purchase of new inputs
which include seeds, fertilizers, pesticides, irrigation water etc. If the seed of high
yielding varieties and other modern inputs are made available to the farmers they can
increase productivity not only of land but also of labour.

2. Purchase of implements: Credit is required by the farmers for the purchase of

tractors, threshers, harvesters, water pumping sets etc. The use of appropriate
machinery in land will increase production by growing more than one crop on the
same piece of land at the same time,

3. Better management of risk: Credit enables the farmers to better manage the risks
of uncertainties of price, weather etc. They can borrow money during raining day
sand pay back the loans during peak years of crops.

4. Permanent improvement in land: Credit also helps the farmers to make

Permanent improvements in land like sinking of wells, land reclamation,
Horticulture, rotation of crops etc.

5. Better marketing of crops: If timely credit is available to the farmers, they will
not sell the produce immediately after the harvest is over. At that time the prices of
agricultural goods are low in the market. Credit enables the farmers to withhold the
Agricultural surplus and sell in the market when prices are high.

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6. Facing crises: The credit is required by the farmers to face crisis. The crisis can
because by failure of crop, draught of floods.

7. Balanced development: Agricultural sector generally remains neglected compared

to industrial sector in the country. For balanced development, it is essential that credit
should be provided at concessional rates to the agriculture sector so that it should also
expand and help in "take off process of the country.

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1.7 Agricultural loan products

Details of each agricultural loam products are explained in the table format as under:-

 Crop Loan

Feature Details (Crop Loan)

Nature of Loan Short Term Loan

Eligibility Entities Farmers/Group of Farmers

Eligibility Criteria  No dues with any other bank/Institutions.

 Should have been cultivating land for at least 2
years.

Purpose To meet cultivation expenses

Loan Limit Min. amount Rs.10000 & max. Amount Rs.15 lakhs
Tenure Interest calculations Loan amount is decided
based on the cropping pattern, ancillary and
contingencies need of the farmers for the full year.

Tenure 12 months

Interest calculations As per the guidelines on direct agricultural advances

issued by RBI from time to time.

Security  Hypothecation of crop.

 In case of investment credit, charge on assets
created out of loan.

Margin The scale of finance as determined by the District Level

Technical Committee.

Table No. 1: Crop Loan Product Detsils

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 Farm Equipment Loan

Feature Details

Nature of Loan Term Loan

Eligibility Entities Individual Farmers

Eligibility Criteria  No over dues with any bank/institution.

 Farmers should own minimum of 2 acres irrigated
land
 Pumps should have been approved by Bureau of
Indian Standards BSI
 Farmers should obtain s feasibility certificate
from Electricity Boar indicating the probable date
of energization, where applicable.

Purpose To install new irrigation system to purchase farm

machinery

Loan Limit Min. Rs.30000

Max. Rs.30 lakhs

Tenure 5-9 years

Interest calculations Linked to BPLR

Security Hypothecation of machinery

Margin 15% nil margin for loan up to Rs.50000

Others No penal interest to be charged for loan up to Rs.25000

Table No. 2: Farm Equipment Loan Product Details

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 Purchase of Land For Agriculture Purpose

Feature Details

Nature of Loan Term Loan

Eligibility Entities Small and the marginal farmers, Tenant farmers, share
croppers.

Eligibility Criteria Small and marginal frames

Purpose To finance the farmers to purchase, develop and cultivate

agricultural lands.

Loan Amount It will depend on the area of the land to be purchased and
its valuation and development cost.

Tenure 7 to 12 years with maximum moratorium of 24 months.

Interest 1. Simpler yearly up to end of March every year or close

of loan whichever is earlier.

Security The land purchase out of the bank finance and mortgage
in favour of the bank will form the security.

Margin Up to Rs.50000-No margin

Over Rs.50000-10-25%

Table No. 3: PLAP Product Details

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 Dairy Loans

Feature Details

Nature of Loan Term Loan

Eligibility Entities Individual and group of Farmers

Eligibility Criteria  The eligibility criteria should have arrangements

enough to house the existing animals.
 Should cultivating green fodder and should have
definite arrangements for its supply.
 Drinking water should be available in the area.

Purpose Dairy loans are sanction for:

 Purchase of high yielding milk animals.

 Construction of cattle shed.
 Purchase of dairy equipment.

Loan Limit Min. Rs.20000 & Max. Rs.10 lakhs

Interest As per RBI guidelines

calculations

Security  Hypothecation of milk animals, cattle shed equipment.

 Mortgage of landed properties.

Margin  Up to Rs.50,000 : Nil

 Rs.50000-1,00,000 : 10%
 Rs.1,00,000-2,00,000 : 15%
 Above 2,00,000 : 25%

Others Borrower shall bank exclusively with Yavatmal Urban

Cooperative Bank

Table No 4: Dairy loan product details

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 Financing For Poultry Farming

Feature Details

Nature of Loan Term Loan

Eligibility Entities Farmers (small marginal other) and Individual Institution

Target Segment As above

Eligibility Conditions Project should be technical feasible and Conditions

economically viable

Purpose Poultry farming

Tenure 5 to 7 years

Gestation Period 6 months

Repayment Schedule Quarterly/Half yearly (based on income generation from

the activity)

Interest Applications Quarterly/Half yearly (Based on repayment period)

Security Prime- Hypothecation of assets created out of bank loan

including animals.

Collateral- Mortgage of land and building

Margin 15%-25% (As per applicable norms of RBI)

Table No. 5 FPF Product Details

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 Kisan Credit Card Scheme

Feature Details

Purpose 1. To meet the short term credit requirement for

cultivation of crops.
2. Post-harvest expenses
3. Consumption requirement of farmer household
4. Working capital for maintenance of farm assets
and activities allied to agriculture, like dairy
animals, inland fishery, etc.

Eligibility 1. All farmers/Individuals /Joint Borrowers who are

owner cultivators, Tenants farmers.
2. The party should not be a defaulter to any of the
Financial Institutions.
3. Not be issued to minors and defaulters.

Margin Upton Rs.1 lakhs- No Margin

Above Rs.1 lakhs-

a) Crop cultivation/Maintenance as per SDF

b) Margin of 15% nil & 25% of the projected
expenditure

Security 1. Up to Rs.1,50,000- Hypothecation of crop/assets

Security created out of our finance
2. Above Rs.1,50,000- Mortgage of landed
properties

Repayment Method The term loan component will be normally repayable

Repayment Period within a period of 5 years in half
yearly or yearly instalments.

Table No. 6 Kisan Credit Card Scheme Derails

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CHAPTER NO. 2

REVIEW OF LITERATURE

Agricultural Loan is the sources for farmers and peoples to get loan for their
development purpose. It is very important to get Agricultural Loan from the various
banks which offered them loan products. The data will be gathering through
interaction and discussion with the customers as well as manager of the Bank. This
study provides an inside in to the high level of customers and also attention towards
them.

A study on agricultural loan helps to know the need of customer as well as their
utilization for the customer. While the studying the agricultural loan of the SBI Bank
in Yavatmal. It is a great experience to know the banking so closely.

It is seen that the bank are focusing more and more over the providing agricultural
loan due to which bank getting business. By offering such of facility the bank are the
need of the consumer. A study of agricultural loan with reference to SBI Bank in
Yavatmal.

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CHAPTER NO. 3

RESEARCH METHODOLOGY

3.1 Research Methodology

Research Methodology is a way to solve the research problems. Research is

an art of scientific investigation and refers to a search for knowledge. It can also be
defined as scientific research for pertaining information on specific topic.

It consists of several steps which need to be implemented in a sequential order

for achieving objective of research effectively. Research Methodology is a way of
systematically solves the research problems. It may be understood as a science of
studying's how Research is done scientifically. In it we study various steps that are
generally adopted by a researcher in studying his research problem along with logic
behind them.

To complete the analytical study on Agricultural Loan, the required data is

collected by the way of following means. The required data is classified here by two
ways that is primary data and secondary data. And also collected ways are
mentioned, which help to bring on the conclusion of the project.

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3.2 OBJECTIVE OF THE STUDY

1. To study and understand the product of agricultural loan offered by Urban

Co-operative Bank's

2. To study and understand the purpose of agricultural loans.

3. To study and understand the criteria implemented by Urban Bank in

sanctioning agricultural loans

4. To find out ways and means to improve the service of Urban Co- operative
Bank.

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3.3 SCOPE OF THE STUDY

1. The study will conduct in Yavatmal city. The area is having good number of
Banking service provides.

2. The study was carried out through personal interaction with the customers and
filling of questionnaire.

3. The study tries to put related findings and suggestions forward.

4. The study was part of a drive to make the customers aware about the
agricultural Loan offered by Urban Co-operative Bank.

5. The study is confined to the market survey for the Yavatmal city only, hence
the individual belonging to Yavatmal city only survey to know their
satisfaction level towards the company services.

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3.4 Hypothesis

A] Alternative hypothesis

1. Customers are aware about the agriculture loan provided by the banks.

2. Customers are satisfied with the agricultural loan available in Yavatmal city

B] Null Hypotheses

1. Customers are not satisfied with the agricultural loan offered by bank in Yavatmal
city

2. Customers are not aware about the agricultural loan offered by banks.

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3.5 Overview of the study

 Banking sector is quite similar in offering products and because of that it was
very difficult to discriminate between Yavatmal Urban Co- operative bank's
products and products of the competitors.

 Target customers and respondents were pre-occupied and to get their time and
view for specific questions was very difficult.

 The products offered by SBI bank are specific and needs of the customers
differ so it becomes difficult to customize the products.

 Many of the respondents were reluctant to express their opinion about bank
services.

 Some respondents concealed the needed information since they fell insecure.

 The sample size was limited to 100 respondents. A small portion of

respondents were emotionally attached with the bank and hence they provided
exaggerated information.

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CHAPTER NO. 4

BANK PROFILE

SBI Bank, Yavatmal

SBI is an Indian multinational, Public Sector banking and financial services

company. SBI is one of India’s major banks and is an industry leader in terms of size,
business sector promotion and initiatives for the progress and economic enhancement
of the Indian economy.

SBI is entering into many new businesses with strategic tie ups – Pension Funds,
General Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale
Merchant Acquisition, Advisory Services, organized items and so on – every one of
these activities having a massive potential for development. SBI is moving forward
with forefront innovation and imaginative new saving money models, to strengthen
its presence and widen its client base. The bouquet of services provided by SBI
includes Personal Banking, International, Banking, Agriculture / Rural and Corporate
Banking, SME, Government Business and Domestic Treasury. SBI is a universally
acknowledged regional banking giant and has 20% market share in deposits and
loans among Indian commercial banks.

As on 31.03.2015 revenue earned by SBI was Rs. 2.573 trillion and Net Income was
Rs. 175.2 billion. By the end of December 2013, SBI had assets worth US$388
billion and 17,000 branches, including 190 foreign offices, making it the largest
banking and financial services company in India by assets. SBI has acquired local
banks as part of rescue efforts. Bank of Bihar was acquired in 1969 along with its 28
branches. Krishnaram Baldeo Bank was acquired in 1975 and the Bank of Cochin in
Kerala was acquired in 1985 along with its 120 branches. SBI share is listed in NSE
stock market by the symbol of SBIN

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COMPANY PROFILE OF SBI, NSE, INDIA

Date of Incorporation :-31-Dec-1955

Date of Listing :-03-Nov-1994

Name :-SBI Bank, Yavatmal

Location :-Yavatmal

Headquarter :-Yavatmal

Branch Head : Manohar Prabhakar Dev

Yavatmal :-SBI Square, Yavatmal

Branches :-All Over India

Area of operation : -Yavatmal City

Established :-12h April 1955

Employee : -70

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4.1. Tools of data Collection

Primary Data Collection

 The primary data are those which are collected a fresh and for the first time &
thus happen to the original in character.
 It can be collected by using methods like observation, experimentation, etc
collection of primary data is costly & time consuming.

 Personal discussion with Manager and Employees.

 Questionnaire filled by Customers and Employees.

Secondary Data Collection

The secondary data on the other hand, are those which are already been collected by
someone else and which already have been passed through the statistical process. It is
used to analyse the performance of various investment avenues. The data were
collected from.

The data is collected through the secondary sources like:

 Annual Report of the Bank.

 Study of various Magazines & books

 Internet

4.2. Sample Area

The sample area for the proposed research of the project would be conducted in Yavatmal
city.

4.3. Span of the study

The span of study is one academic year i.e. 2018-2019

4.4. Sample of size

The sample size for this research work would be 100 respondents.

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4.5. Research Objective

In broad terms, the main investment objectives cover how we accomplish most
financial goals. These investment objectives are important because certain products
and strategies work for one objective, but may produce poor results for another
objective. It is quite likely we will use several of these investment objectives
simultaneously to accomplish different objectives without any conflict.

1. To identify the different type of investment avenues.

2. To study the preference of investors on investment avenues.
3. To review the money market developments in recent times in India.
4. To know the impact of socio-economic profile on the investment decision of
small equity investors.
5. To identify the investment pattern of small equity investors, their portfolio
practices based on demographic factors and the problems associated with small
equity investment;
6. To know the investors perception towards risk-return of investment and the post
investment satisfaction of the small equity investors in Indian money market.
7. To suggest measures to overcome the problems for enhancing small investor’s
participation in Indian capital market.

4.6. Research Scope

 The different eligibility factor for taking a particular investment.
 The different documents requirement for investment.
 The study was carried out through personal interaction with the customers and
filling the questionnaire.

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4.7. Hypothesis of Study

Alternative Hypothesis

 The people are aware about the traditional and modern modes of investment
avenues.
 Peoples are getting more benefit in the modern investment avenues than
traditional investment avenues.

Null Hypothesis

 The people are not aware about the traditional and modern modes of investment
avenues.
 Peoples are not getting more benefit in the modern investment avenues than
traditional investment avenues.

4.8. Limitations of Study

 The data for study mainly based on an investment.

 Some people were not willing to disclose the investment profile.
 The time period of the research is limited.
 Issues with sample and selection
 Lack of previous research studies on the topic.
 Methods/ instruments/ techniques used to collect the data.
 The area of sample was decided after taking into consideration the major factors
like:
 Availability of investors
 Approachability
 Time available with investors for interaction, etc.

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 “A Study of Agriculture Loan Offered by SBI Bank”

CHAPTER NO. 5

DATA INTERPRETATION AND FINDINGS

1. Are you aware of the different loan facilities provided by SBI bank?

Particula Percentage
r
Yes 86%
No 14%

Table No. 7

Percentage

14%

Yes
No

86%

Pie Chart No. 2

Data Interpretation: -

From the above chart we can say that

 86% of the respondent agreed that they are aware of the different loan
facilities provided by the bank.
 While only 14% are not aware of the loan schemes provided by the bank.

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2. Are you availing any kind of the facilities provided by the bank?

Availing any loan facilities provided by bank Percentage

Yes 71%
No 29%

Table No. 8

Percentage

29%
Yes
No

71%

Pie Chart No. 3

Data Interpretation: -
From the above chart we can say that
 71% of the total respondents were availing some loan facility from bank.
 29% of the respondents were not availing any kind of loan facility from bank

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3. Which type of loan facility you have taken?

Type of loan Percentage

Direct agriculture loan 74%
Indirect agriculture loan 11%
Loan for allied 15%
activities

Table No. 9

Percentage

0.15,
45
Direct agriculture loan
Indirect agriculture loan

55

Pie Chart No. 4

Data Interpretation: -
From the above chart we can say that
 74% of the customers have taken loan for direct agriculture.
 15% of the customers have taken loan for indirect agriculture.
 11% of the customers have taken loan for allied activities.

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4. What is the amount of loan you have taken?

Amount of loan taken Percentage

Below 50,000 54%
50,000 to 1,00,000 23%
1,00,000 to 5,00,000 16%
5,00,000 or above 7%

Table No. 10

Percentage

0.07
0.16

55% Below 50,000

45 50,000 to 1,00,000

5,00,000 or above

Pie Chart No. 5

Data Interpretation: -
From the above chart we can say that
 54% of the customers have taken loan below 50,000
 23% of the customers have taken loan 50,000 to 1,00,000
 16% of the customers have taken loan 1, 00,000 to 5, 00,000.

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 7% of the customers have taken loan 1, 00,000 to 5, 00,000.

5. How long you have been banking with SBI Bank?

Period Percentage
Less than 1 year 5%
1 to 5 year 30%
5 to 10 years 45%
Not at all 20%

Table No. 11

Percentage

30
5%
0.2

Less than 1 year

1 to 5 year

5 to 10 years

Not at all

0.45

Pie Chart No. 6

Data Interpretation: -
From the above chart we can say that
 5% of the customers have been banking with urban bank for less than 1 year
 30% of the customers have been banking with urban bank for 1 to 5 years.

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 45% of the customers have been banking with urban bank for 5 to 10 years
 20% of the customers have been banking with urban bank not at all.

6. Why did you choose SBI Bank for taking Agriculture Loan?

Reason to choose urban bank for taking loan Percentage

Proximity to farm 33%
Good service 54%
Interest rates 9%
Any other reason 4%

Table No. 12

Percentage

0.09
0.04
33%
Proximity to farm

Good service

Interest rates
54%
Any other reason

Pie Chart No. 7

Data Interpretation: -
From the above chart we can say that
 54% of the customers have chosen urban bank because of good service.

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 “A Study of Agriculture Loan Offered by SBI Bank”

 33% of the customers have chosen urban bank because of proximity to farm.
 9% of the customers have chosen urban bank because Interest rates
 4% of the customers have chosen urban bank because other reasons

7. How do you rate the overall attitude of bank officials/staffs towards you while
making transaction?

Attitude of bank officials/staff Percentage

Excellent 22%
Good 57%
Average 14%
Poor 7%

Table No. 13

Percentage

7%
22%
14%
Excellent
Good
Average
Poor

57%

Pie Chart No. 7

Data Interpretation: -

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From the above chart we can say that

 57% of the customers feel that attitude of bank officials was good.
 22% of the customers feel that attitude of bank officials was excellent.
 14% of the customers feel that attitude of bank officials was average.
 7% of the customers feel that attitude of bank officials was poor.

8. Are you satisfied with the rate of interest?

Satisfied with the rate of Percentage

interest
Yes 53%
No 47%

Table No. 14

Percentage

Yes
47%
53% No

Pie Chart No. 9

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Data Interpretation: -
From the above chart we can say that
 53% of the customers are satisfied with the rate of interest.
 47% of customers feel that interest rates are high.

9. Period of receiving loan from the date of application?

Period of receiving loan No. of respondents

1-10 days 19%
11-30 days 47%
1 month-2 months 21%
More than 2 months 13%

Table No. 15

Percentage

13% 19%
1-10 days
11-30 days
21%
1 month-2 months
More than 2 months

47%

Pie Chart No. 10

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Data Interpretation: -
From the above chart we can say that
 47% of the customers received loan in the period of 11-30 days from the date
of the application.
 21% of the customers received loan in the period of 1- 2 months.
 19% of the customers received loan in the period of 1-10 days
 21% of the customers received loan in the period of more than 2 months.

10. How do you rate the repayment period provided by the bank?

Satisfaction rate Percentage

Highly satisfactory 24%
Satisfactory 55%
Dissatisfactory 11%
Highly dissatisfactory 10%

Table No. 16

Percentage

10%
24%
11% Highly satisfactory
Satisfactory
Dissatisfactory
Highly dissatisfactory

55%

Pie Chart No. 11

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Data Interpretation: -
From the above chart we can say that
 11% of the customers are not satisfied with the repayment period provided by
bank.
 55% of the customers are satisfied with repayment period.
 24% of the customers are highly satisfied.
 10% of the customers are highly dissatisfied.

11. How do you rate overall service quality of SBI bank?

Service quality No. of respondents

Very good 25%
Good 43%
Average 14%
Poor 18%

Table No. 17

Percentage

18%
25%
Very good
Good
14% Average
Poor

43%

Pie Chart No. 12

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Data Interpretation: -
From the above chart we can say that
 43% of the customers fell the service quality was good.
 25% of the customers fell the service quality was very good.
 43% of the customers fell the service quality was average.
 43% of the customers fell the service quality was poor.

12. Do you find any bank in your area providing better services thatn SBI bank?

Better services of No. of respondents

bank
Yes 37%
No 63%

Table No. 18

Percentage

37%
Yes
No
63%

Pie Chart No. 13

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Data Interpretation: -
From the above chart we can say that
 37% of the customers fell that SBI Bank is less service provider bank.
 63% of the customers fell that some other bank does not provides better
services than Yavatmal Urban bank.

13. Would you like to switch over to any other bank?

Switch over other bank Percentage

Yes 25%
No 75%

Table No. 19

Percentage

25%

Yes
No

75%

Pie Chart No. 14

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Data Interpretation: -
From the above chart we can say that
 75% of the customers don’t want to switch to any other bank.
 While 25% of the customers would like to switch to other banks.

14. Is there is any eligibility criteria for offering agricultural loan?

Eligibility for Percentage

loan
Yes 62%
No 28%

Table No. 20

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Percentage

28%
Yes
No

62%

Pie Chart No. 15

Data Interpretation: -
From the above chart we can say that
 62% of customers feel that there is a eligibility criteria.
 While 28% of the customers do not feel that there is any eligibility criteria.

15. Is an agricultural loan to farmers is most sound financial option?

Agricultural loan sounds financial option to Percentage

farmers
Sound 90%
Does not sound 10%

Table No. 21

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Percentage

10%

Sound
Does not sound

90%

Pie Chart No. 16

Data Interpretation: -
From the above chart we can say that
 90% of farmers believe that agricultural loan is most sound financial option.
 While 10% of farmers believe that agricultural loan is unsound financial
option to them.

16. Whether landless farmers, tenants can avail agricultural credit?

Landless farmers, tenants can avail agriculture Percentage

credit
Yes 71%
No 29%

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 “A Study of Agriculture Loan Offered by SBI Bank”

Table No. 22

Percentage

29%
Yes
No

71%

Pie Chart No. 17

Data Interpretation: -
From the above chart we can say that
 71% of the customers are avail of agriculture credit provided by bank.
 While 29% of customers are not availing of the agriculture credit provided by
bank.

17. What type of agriculture loan provided by bank to farmers?

Type of agriculture Percentage

credit

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Short term 54%

Medium term 30%
Long term 16%

Table 23

Percentage

16%

Short term
Medium term
54% Long term
30%

Pie Chart No. 18

Data Interpretation: -

From the above data it is clear that

 54% customers take short term loan.

 30% customers take medium term loan.
 16% customers take Long term loan.

18. Is getting agriculture loan from the bank is a critical process

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Getting agriculture loan is a critical process No. of customers

Yes 11%
No 89%

Table No. 23

Percentage

11%

Yes
No

89%

Pie Chart No. 18

Data Interpretation: -
From the above chart we can say that
 89% of customers feel that getting agriculture loan is not a critical process.
 But 11% of customers feel that it is a critical process.

19. From the following which documents are essential for taking an agriculture loan?
1. Voter Id Card

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2. Aadhar Card
3. Tax Receipt
4. Electricity Bill

Particular No. of respondents

1&2 10%
2&3 21%
1&4 12%
All of the above 57%

Table No. 25

Particular

10%

1&2
21% 2&3
1&4
57% All of the above

12%

Pie Chart No. 20

Data Interpretation: -
From the above chart we can say that
 The 10% respondents are says document 1 & 2 are essential.
 The 21% respondents are says document 2 & 3 are essential.
 The 10% respondents are says document 1 & 4 are essential.
 The 10% respondents are says all of the above.

Findings

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 4% of the respondents are not aware of the different loan facilities provided

by the bank.

 71% of the respondents are availing some loan facility from the bank.

 From the three main loan schemes provided by the bank, maximum customers

have availed direct agricultural loan.

 Maximum customers (54%) have taken loan below Rs. 50000

 More than half of the customers have availed loan because of good service

provided by bank.

 About two third of customers are satisfied with the attitude of bank

official/staff towards them while making transactions.

 About half of the customers are satisfied with the interest rates on loan.

 About 1/3rd of customers take more than a month to receive loan.

 About one third of customers feel that overall service quality of Yavatmal

Urban Cooperative bank is average/below average.

 More than half customer feels that other bank provides better service than

Yavatmal Urban Cooperative Bank.

 90% of farmers believe that agricultural loan is most sound financial option.

 62% of customers feel that there are any eligible criteria for loan.

Hypothesis Testing

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Hypothesis No. 1: Customers are aware about the different loan facilities provided
by the SBI Bank.

1. Awareness of loan facilities provided by SBI Bank

Sr. Particular Percentage

No.
1 Aware 86%
2 Not aware 14%

Percentage

14%

Aware
Not aware

86%

Data Interpretation: - During the study it is found that 86% of the respondents are
aware about the different loan facilities provided by the SBI Bank. Hence in this case
alternate hypothesis is providing.

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Hypothesis No. 2: Customers are satisfied with the procedure for agriculture loan
provided by SBI Bank.
2. Are you satisfied with the interest rates?

Satisfied with the interest rates Percentage

Yes 75%
No 25%

Percentage

25%

Yes
No

75%

Data Interpretation: - During study it is found that 75% of customers are satisfied
with procedure for agriculture loan provided by SBI Bank. Hence in this case
alternate Hypothesis is prove.

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 “A Study of Agriculture Loan Offered by SBI Bank”

CHAPTER NO. 6

CONCLUSION AND SUGGESTIONS

SUGGESTIONS

 Since 6% of the respondents are aware of different loan facilities provided by

bank, in order to create awareness among the rest, the bank should go for
more promotional activities regarding different services of the bank.

 Formalities required for the application and issuance of loan should be

reduced, so that more people can avail loan facilities.

 Above one third of the customers have annual income ranging from50000 to
100000 in order to target some other group as well, bank should prescribe
reasonable interest rates so as to increase the sales and hence profit.

 The staff should be well trained enough to provide maximum information

regarding the loan facilities so the employees of bank take very good care of
customers in all respect, because "Customers is the King"

 68% of the customers look more than a month to receive loan from the date of
application. In order to increase the satisfaction level of the customers, bank
should reduce this time period.

 Bank should improve its overall service quality to be more competitive.

 The lending procedure for customers should be simplified.

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CONCLUSIONS

 The customers are aware of the process of the Agricultural loan and they are
taking it for their purpose.

 The Yavatmal urban cooperative bank has launched several good products
catering to rural and agri community for their customers.

 The bank is making agri sector very important than any other sector

 The bank made the lending procedure very simple for the customers.

 The bank has trained staffs which are making enough care of the customers
Problem regarding agricultural loan.

 The customers are satisfied with the policies and procedures of lending loan
with Yavatmal Urban Cooperative Bank.

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CHAPTER NO. 7 APPENDICES

QUESTIONNAIRE

Dear Sir/Madam,

As per of my MBA curriculum, I Monika B. Meshram, student of CMCS(College of

Management & Computer Science) Yavatmal, I am undertaking a study Project on
"A study of Agricultural Loan offered by Yavatmal Urban Cooperative Bank" for
which I need your views regarding banking Products and services in shapes of a
questionnaire designed by me. The data being collected are solely for academic
purpose. I request you to kindly extend your co-operation.

 Name
 Address
 Phone Number
 Annual Income
 How much land do you hold

1. Are you aware of the different loan facilities provided by SBI Bank?

a) Yes
b) No

2. Are you availing any kind of loan facilities provided by the bank?

a) Yes
b) No

3. If yes, which type of loan you have taken?

a) Direct Agriculture Loan

b) Indirect Agriculture Loan
c) Loan for Allied Activities

4. What is the amount of loan you have taken?

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 “A Study of Agriculture Loan Offered by SBI Bank”

a) Below 50000
b) 50000 to 100000
c) 100000 to 500000
d) 500000 to above

5. How long you have been banking with SBI

Bank?

a) Less than 1 year

b) I to 5 years
c) 5 to 10 years
d) Not at all

6. Why did you choose Yavatmal Urban Cooperative Bank for taking loan?

a) Proximity to farm
b) Good service
c) Interest rates
d) Any other reasons

7. How do you rate the Overall attitude of banks official towards you while making
transactions?

a) Excellent
b) Good
c) Average
d) Poor

8. Are you satisfied with the rate of interest?

a) Yes
b) No

9. Period of receiving loan from the date of application?

c) 1-10 days
d) 11-30 days

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e) 1month 2 month
f) More than 2 months

10. How do you rate the repayment period provided by the bank?

a) Highly satisfactory
b) Satisfactory
c) Dissatisfactory
d) Highly dissatisfactory

11. How do you rate overall service quality of Yavatmal Urban Co- operative Bank?

a) Very Good
b) Good
c) Average
d) Poor

12. Do you find any other bank in your area providing better services than

SBI Bank?

a) Yes
b) No

13. Would you like to switch over to any other bank?

a) Yes
b) No

14. Is there is any eligibility criteria for offering agriculture loan?

a) Yes
b) No

15. Is an Agriculture loan to farmers is most sound financial option?

a) Sound

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b) Unsound

16. Whether landless farmers, tenants can avail agriculture credit?

a) Yes
b) No

17. Which Type of agriculture loan provided by bank?

a) Short term loan

b) Medium term loan
c) Long term loan

18. Is getting Agriculture loan from the bank is a critical process?

a) Yes
b) No

19. From the following which documents are essential for taking an agriculture loan?

a) Voter ID
b) Ration card
c) Aadhar card
d) Land ownership proof receipt

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Bibliography

1. Financial Institution and Markets, L.M. Bhole, McGraw Hill, 4th edition.

2. Commercial Banking, B. W. Gup & J.W. Kolari, Wiley, 3 edition.

3. Banking- Theory and Practice, Dr. P.K. Shrivastav, Himalaya, 8th edition

4. Commercial Banking, G.P. Kapoor, A.P.H., 1" edition

Websites

 www.yavatmalurbanbank.com
 www.urbanco-opbank.com
 www.google.com
 www.wikipedia.com

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