Internship P

Karnataka Bnak
Karnatak Law Society’s
INSTITUTE OF MANAGEMENT EDUCATION AND

RESEARCH, BELAGAVI
A Project Report on
“Analysis of Priority Sector Lending At Karnataka Bank”
Submitted to
Rani Channamma University,

Belagavi
(In partial fulfilment of Post graduate Degree in Master of Business Administration)
Submitted By:
Pratibha Alagawadi
Registration No.: MB181468
MBA II semester, 2018-2020
UNDER THE GUIDANCE OF

1
INSTITUTE GUIDE: COMPANY GUIDE:
Prof.Sanjay Deshpande Mr. shreenivas kulkarni

KLS Institute of Management Education and Research,Belagavi
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AssistantProfessor Branch manager
KLS’sIME Belagavi590008
Belagavi
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DECLARATION
I Miss. Pratibha Alagawadi undersigned, hereby declare that the

“Summer Internship Project” report entitled “Analysis of Priority Sector
Lending At Karnataka Bank” at “Karnataka Bank”, has been prepared by me
under the supervision and guidance of prof. Sanjay Deshpande, faculty at KLS’s
Institute of Management Education and Research, Belagavi. Now, being submitted in
partial fulfilment of the college for the academic year 2019-20.
I further state that, this report is based on original study undertaken by me and has
not formed a basis for the award of any other degree for any other university.
Date: Signature
Place:Belagavi Pratibha Alagawadi
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INSTITUTE OF MANAGEMENT EDUCATION AND RESEARCH
Belagavi
I N T E R N A L GUIDE’S CERTIFICATE
This is to certify that Internship Report entitled “Analysis of Priority Sector

Lending At Karnataka Bank” at “Karnataka Bank”, at is an individual work of I
Miss. Pratibha Alagawadi, RCU Examination Registration No MB181468of IV
semester, KLS’s Institute of Management Education and Research, Rani
Channamma University, Belagavi, now being submitted in the partial fulfilment of
requirement,fortheawardoftheDegreeofMasterofBusinessAdministrationofRani
Channamma University, Belagavi under my supervision and guidance.
I further certify that the work is original work and student has made his best efforts to
bring the work in this format.
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Date:10-03-2016 Internal Guide
(Prof. Sanjay Deshpande)
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INSTITUTE OF MANAGEMENT EDUCATION AND RESEARCH
Belagavi
ECTOR’S CERTIFICATE
D
This is to certify that Internship Report entitled “analysis of Priority Sector Lending
At Karnataka Bank” at “Karnataka Bank,is an individual work of Miss.Pratibha
Alagawadi, RCU Examination Registration No MB181468 of II semester,KLS’s
Institute of Management Education and Research, Rani Channamma University,
Belagavi, now being submitted in the partial fulfilment of requirement, for the award
of the Degree of Master of Business Administration of Rani Channamma University,
Belagavi.
Date: Dr. Atul Deshpande
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ACKNOWLEDGEMENT
The satisfaction and euphoria that accompany the successful completion of any task would be
incomplete without the mention of the people who made it possible, whose constant guidance and
encouragement crowned our effects with success
I thank the management of Karnataka Bank for giving me an

opportunity to undergo my summer internship project. I would like to express
my gratitude to the organization guide,Mr.Shreenivas Kulkarni and for his
time, co-operation and valuable guidance without which the study would not
have been possible.
I also thank all the department heads and employees who gave their
precious time in guiding me and giving me the information during my every
visit to the bank branch.
I extend my academic gratitude to Dr. Atul Deshpande(Director)
KLS’s Institute of Management Education and Research, Belagavi and to my
internal guide Prof. Sanjay Deshpande, KLS’s Institute of Management
Education and Research, Belagavi for their guidance in completing this task.
Date: Signature
Place:Belagavi Pratibha Alagawadi

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CHAPTER SCHEME
CHAPTER SCHEME
CHAPTER NO TITLE PAGE NO

Declaration from student i
Certificate from Company ii
Certificate from Internal Guide iii
Directors Certificate iv
Acknowledgement v
Chapter Scheme vi
Executive Summary ix
I Introduction 01
1.1 Background of the study 02
1.2 Need of the study 03
1.3 Importance of the study 04
1.4 Objectives of the study 05
II Literature Review 06
III Research Methodology 07

3.1 Research Design 08
3.2 Data Sources 08
3.3. Limitations of Study 09
IV Company Profile 10
4.1 Historical Background 11
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4.2 Vision & Mission 18
4.3 Organizational Structure - Different Departments 19
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4.4 Product /Service Profile 26

4.5 Area of Operation 28
4.6 Business Practices-Fin/HR/Marketing/Operations 28
4.7 Current Status 29
4.8 Future Plans 29
4.9 SWOT Analysis 30
5. Data Analysis 51
6. Findings and Conclusions 63
7. Recommendation 67
8. Bibliography 68
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EXECUTIVE SUMMERY
This project is on “Karnataka Bank Limited, Adarsh Nagar Hindwadi, BELAGAVI” This
project work is undertaken as a part of academic requirement for post graduation of master of
business administration. It is title as “Analysis of priority sector lending at Karnataka Bank”
This research work has been undertaken for “Karnataka Bank Limited, Adarsh Nagar
,Hindwadi, Belagavi” from 5thSeptember 2019 to5thNovember 2019 Where attempt has been
made to understand the management of the organisation and “Analysis of priority sector
lending at Karnataka Bank. The research deal with “Analysis of priority sector lending” at
“Karnataka Bank”. Adarsh Nagar, Hindwadi, Belagavi. In this study make a try to
understand the Analysing the priority sector lending.
For this study a period of 2 months i.e. from 5thSeptember 2019 to 5th November 2019 and
the data referred for analysis is 5years (2014-2019) The study has employed both primary and
secondary data including general approach. In secondary data where I got extra tools i.e.
Balance sheet, Profit & loss account, where can analyse my topic i.e. “Analysis of Priority
Sector lending Followed At Karnataka Bank.
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1. INTRODUCTION
1.1Background of the study
The present study is an attempt to understand and ascertain the Priority Sector lending
analysis followed at Karnataka Bank, Hindwadi Belgaum.
INTRODUCTION
In most of the developing economies a big proportion of income lies in the hands of few.
Such unjustifiable distribution of income leads to the creation of a deprived group of a people
who are socially as well as economically backward to others. This is a hard core reality in
context to India also. To avoid further vulnerability and promote poor section of the
economy, an emergent need was being recognised to invest into some specific sectors like
agriculture, small and medium enterprises etc. This resonance leads to the concept of lending
to priority sector (LPS). LPS basically aims at providing adequate financial support to
economically deprived group of the economy. In recent few years many stringent provisions
have been enacted to ensure credit flow to the needy section of the society. After 1969 this
concept has further been crystallized. As per the present norms of Reserve Bank of India
(RBI), an Indian bank has to lend 40 per cent of the adjusted net bank credit (ANBC) or
credit equivalent amount of off balance sheet exposures (OBE), whichever is higher, to the
priority sector. Further RBI has also fixed a sub-target at 18 per cent and 10 per cent of
ANBC or credit equivalent amount of OBE, whichever is higher, to ensure flow of funds to
agriculture and the weaker sections. Here the lending to agriculture sector may be a direct
lending as well as an indirect lending. But if indirect lending exceeds to 4.5 per cent of
ANBC or credit equivalent amount of off balance sheet exposures (OBE), whichever is
higher, the excess will not be reckoned for assessing banks performance towards the sub-
target of 18 per cent. This has been done to avoid any possible dilution of direct lending. In
case of foreign banks the target has been relaxed to 32% of ANBC or credit equivalent
amount of OBE (whichever is higher). Further, the sub-target for ensuring advances to micro
11 & small enterprises and export has been fixed at 10% and 12% of ANBC or credit equivalent
amount of OBE, whichever is higher, respectively. In respect of indirect finance, banks may
classify their entire.
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Credit outstanding under general credit card (GCCs) and overdrafts up to Rs. 25,000 (per
account) granted against, no-frills accounts in rural and semi-urban areas. RBI has issued
directives to all scheduled commercial banks for strict adherence to lending norms. If
somehow, any bank fails to attain the stipulated targets, it has to park the money in Rural
Infrastructure Development Fund (RIDF) as a disincentive. RIDF will be maintained with
NABARD or funds with other financial institutions as prescribed by RBI. This deposited
money is entitled for a coupon rate. It has become applicable for the private banks also since
April 1, 2009. In spite of the strict guidelines, banks are still found to be reluctant to adhere
with these norms. Particularly in context to agriculture sector, private banks hesitate to lend
money to small and marginal farmers. In this reference, the present paper attempts to study
the lending pattern of Indian banks to priority sector for the period of 11 years from 2000-01
to 2010-11. It aims at analysing whether there is any influence of ownership of banks for
directing funds to priority sector or not. In other words, whether LPS is similar in public and
private banks or is there any substantial difference in that.
Priority Sector
• Priority Sector refers to those sectors of the economy which may not get timely and
adequate credit in the absence of this special dispensation. PrioritySector Lending is an
important role given by the Reserve Bank of India (RBI) to the banks for providing a
specified portion of the bank lending to few specific sectors like agriculture and allied
activities, micro and small enterprises, poor people for housing, students for education and
other low income groups and weaker sections.. This is essentially meant for an all-round
development of the economy as opposed to focusing only on the financial sector.
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 Need for the Study:

 The theoretical aspects of Priority Sector provide the frame work of the study. A
conceptual and the practical approach is the need of the hour.
 Hence the field study becomes as essential part of the curriculum. Thus this project
study conducted to integrate theoretical and practical aspects of priority sector lending
analysis in the organization.
 Importance of the study:

 Priority lending is an important role given by the Reserve Bank of India (RBI) to the
banks for providing a specified portion bank of the bank lending to few specific
sectors like Agriculture and allied activities, Micro and small enterprises, Poor people
for housing, Students for education and other low income groups and weaker
sections.
 This study helps to know and understand the various process and activities involved
in priority sector at Corporation Bank.
 Objectives of the study:

 To study the different loans provided by Corporation Bank under Priority Sector.
13  To study sector wise lending’s of Karnataka Bank. To study and analyse the Priority
Sector advances.
 To compare present and previous year’s performance of Karnataka bank.
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 To know the NPA (Non-Performing Assets) of the Karnataka bank under

prioritysector.
2.LITERATURE REVIEW:
(Ahmed, 2009): The priority sector lending is mainly intended to ensure that the assistance from the
banking system to those sectors of the economy which has not received adequate support of
institutional finance. The attainment of the socio economic priorities of the government like growth
of agriculture, promotion of small entrepreneurs and development of backward area etc is the major
responsibility of commercial banks. Since seventies, Reserve Bank of India and government of India
have stipulated guidelines for priority sector lending by banks. The same was revised on April 30,
2007 and overall priority sector lending target was fixed at 40 per cent for domestic banks and 32
per cent for foreign banks.
(Shajahan, 1998): Priority sector bank lending was an active instrument of our financial policy
with an aim to restore sectoral balance within credit disbursement and to channel credit to the
weaker sections within these sectors. But banking sector reforms initiated as part of the
liberalisation programme, since the beginning of the 1990s, has almost brought the priority sector
lending policy to a halt. Moreover, the position of the poorer states in regard to priority sector
bank credit seems to have worsened because of the manner in which priority sector targeting
has been done by linking it to total bank credit rather than to bank deposits.
(Uppal, 2009): An enunciation of the need to channelize the flow of credit to certain sectors of the
economy, known as the priority sectors, in the largest interest of the country, can be traced to the
Reserve Bank’s credit policy for the year 1967 - 1968. The government initiated measures for social
control over banks in 1967 - 1968 with a view to securing a better adaptation of the banking system
to the needs of economic planning and it is playing a more active role in aiding sectors like
agriculture and small scale industries (SSIs). The present study is an attempt to study the priority
sector advances by the public, private and foreign bank groups. This study is based on the
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parameters like lending to priority sector by public, private sector and foreign bank groups, targets
achieved by public, private sector and foreign bank group NPAs (Non-performing assets), while
lending to priority sector.
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(garg, 2015): Priority sector lending has become an important component of national agenda after
the nationalization of banks. It is a scheme which is proposed for the important sectors of the
economy i.e. agriculture, small scale industries, education loan, housing, weaker sections etc. The
present paper is an attempt to study the trends of priority sector advances by public, private and
foreign banks during 2011-12 to 2012-13. This study is based on the parameters like lending to
priority sector by public, private sector and foreign banks as well as on the targets achieved by
public, private sector and foreign banks while lending to priority sector. On the base of these
parameters the study concludes that both public sector and private sector banks could not achieve
the target which was fixed by RBI for development of priority sectors whereas foreign banks
achieved all over target of 32% during the study period. This paper also highlights the issues faced by
banks and strategies to overcome these issues.
3. RESEARCH METHODOLOGY:
Methodology is the systematic approach to the given problem. In other words, it is the way in
which we go for the collection of the data. Therefore the better way of collecting data is more
important than the collected because, ultimately the data collected is depended upon how we
approach towards the data. The data has been collected in the following way.
1) PRIMARY DATA:
It is the actual and very important data collected by researchers himself, it involves the formal
way of collecting the data where in there is a formal meeting with deferent managerial
personal observation
Source of Primary data:
o Observation
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o Direct Interaction with the managers
2) SECONDARY DATA:
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Secondary data is the data which is already collected by someone else and which is used for
study purpose. It is the data, which gives relevant information in the different fields wherever
we want. There are different sources of secondary data collection.
Secondary data source data collection:
o Internet
o Books and Journals
o Annual Reports
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COMPANY OVERVIEW
INTRODUCTION TO BANKING INDUSTRY
Banking in India has its origin as carry as the Vedic period. It is believed that the transition
from money lending to banking must have occurred even before Manu, the great Hindu jurist,
who has devoted a section of his work to deposits and advances and laid down rules relating
to the interest. During the mogal period, the indigenous bankers played a very important role
in lending money and financing foreign trade and commerce. During the days of East India
Company, it was to turn of the agency houses top carry on the banking business. The general
bank of India was the first joint stock bank to be established in the year 1786.The others
which followed were the Bank of Hindustan and the Bengal Bank. The Bank of Hindustan is
reported to have continued till 1906, while the other two failed in the meantime. In the first
half of the 19thCentury the East India Company established three banks; The Bank of Bengal
in 1809, The Bank of Bombay in 1840 and The Bank of Madras in 1843.These three banks
also known as presidency banks and were independent units and functioned well.
The first phase of financial reforms resulted in the nationalization of 14 major banks in1969
and resulted in a shift from class banking to mass banking. This in turn resulted in the
significant growth in the geographical coverage of banks. Every bank had to earmark a
min percentage of their loan portfolio to sectors identified as “priority sectors” the
manufacturing sector also grew during the 1970’s in protected environments and the banking
sector was a critical source. The next wave of reforms saw the nationalization of 6more
commercial banks in 1980 since then the number of scheduled commercial banks increased
four- fold and the number of bank branches increased to eight fold. After the second phase of
financial sector reforms and liberalization of the sector in the early nineties. The PSB’s found
it extremely difficult to complete with the new private sector banks and the foreign banks.
The new private sector first made their appearance after the guidelines permitting them were
issued in January 1993.
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Indian Banks are classified into commercial banks and Co-operative banks. Commercial
banks comprise: (1) Schedule Commercial Banks (SCBs) and non-scheduled commercial
banks. SCBs are further classified into private, public, foreign banks and Regional Rural
Banks (RRBs); and (2) Cooperative banks which include urban and rural Co-operative banks.
The Indian banking industry has its foundations in the 18th century, and has had a varied
evolutionary experience since then. The initial banks in India were primarily traders’ banks
engaged only in financing activities. Banking industry in the pre-independence era developed
with the Presidency Banks, which were transformed into the Imperial Bank of India and
subsequently into the State Bank of India. The initial days of the industry saw a majority
private ownership and a highly volatile work environment. Major strides towards public
ownership and accountability were made with Nationalisation in 1969 and 1980 which
transformed the face of banking in India. The industry in recent times has recognised the
importance of private and foreign players in a competitive scenario and has moved towards
greater liberalisation.
Nationalisation-
The next significant milestone in Indian Banking happened in late 1960s when the then Indira
Gandhi government nationalized on 19th July 1949, 14 major commercial Indian banks
followed by nationalisation of 6 more commercial Indian banks in 1980.
The stated reason for the nationalisation was more control of credit delivery. After this, until
1990s, the nationalised banks grew at a leisurely pace of around 4% also called as the Hindu
growth of the Indian economy. After the amalgamation of New Bank of India with Punjab
National Bank, currently there are 19 nationalized bank in India.
Liberalization-
In the early 1990’s the then Narasimha Rao government embarked a policy of liberalization
18 and gave licences to a small number of private banks, which came to be known as New
generation tech-savvy banks, which included banks like ICICI and HDFC.This move along
with the rapid growth of the economy of India, kick started the banking sector in India, which
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has seen rapid growth with strong contribution from all the sectors of banks, namely
Government banks, Private Banks and Foreign banks
The new policy shook the Banking sector in India completely. Bankers, till this time, were
used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new
wave ushered in a modern outlook and tech-savvy methods of working for traditional banks.
All this led to the retail boom in India. People not just demanded more from their banks but
also received more.
Meaning of bank:
A Bank is an institution which accepts deposits from the general public and extends loans to
the households, the firms and the government. Banks are those institutions which operate in
money. Thus, they are money traders, with the process of development functions of banks are
also increasing and diversifying now, the banks are not nearly the traders of money, they also
create credit. Their activities are increasing and diversifying. Hence it is very difficult to give
a universally acceptable definition of bank. "Banking business" means the business of
receiving money on current or deposit account, paying and collecting cheques drawn by or
paid in by customers, the making of advances to customers, and includes such other business
as the Authority may prescribe for the purposes of this Act.
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Definitions of Bank:
Indian Banking Regulation act 1949 section 5 (1) (b) of the banking Regulation Act 1949
Banking is defined as.
“Accepting for the purpose of the landing of investment of deposits of money from public
repayable on demand or other wise and withdraw able by cheques, draft, order or otherwise.”
“Bank means a bench or table for changing money.”
- Greek History
“Bank is an establishment for custody of money received from or on Behalf of its customers.
Its essential duty is to pay their drafts unit. Its profits arise from the use of the money left
employed them.”
- Oxford Dictionary
A banker is defined as a person who carries on the business of banking, which is specified as
conducting current accounts for his customers, paying cheques drawn on him, and collecting
cheques for his customers.
English common law
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Structure of Indian Banking
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Organisational Structure
1. Reserve Bank of India:
Reserve Bank of India is the Central Bank of our country. It was established on 1st April
1935 accordance with the provisions of the Reserve Bank of India Act, 1934. It holds the
apex position in the banking structure. RBI performs various developmental and promotional
functions.
It has given wide powers to supervise and control the banking structure. It occupies the
pivotal position in the monetary and banking structure of the country. In many countries
central bank is known by different names.
For example, Federal Reserve Bank of U.S.A, Bank of England in U.K. and Reserve Bank of
India in India. Central bank is known as a banker’s bank. They have the authority to
formulate and implement monetary and credit policies. It is owned by the government of a
country and has the monopoly power of issuing notes.
2. Commercial Banks:
Commercial bank is an institution that accepts deposit, makes business loans and offer related
services to various like accepting deposits and lending loans and advances to general
customers and business man.
These institutions run to make profit. They cater to the financial requirements of industries
and various sectors like agriculture, rural development, etc. it is a profit making institution
owned by government or private of both.
Commercial bank includes public sector, private sector, foreign banks and regional rural
banks:
3. Public Sector Banks:

Currently there are 21 Nationalised banks in India. The public sector accounts for 75 percent
of total banking business in India and State Bank of India is the largest commercial bank in
22 terms of volume of all commercial banks.
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Now from Aug 30, 2019 amalgamation of 10 public sector banks into four big banks. After
this the total number of public sector banks in the country will come down to 12 from 27
banks in 2017.
Government has decided to merge Punjab National bank, Oriental Bank of Commerce and
United Banks, Canara Bank of Indian, Andhra Bank and Corporation Bank, Indian Bank and
Allahabad Bank.
Nationalised Banks in India are:

1. Allahabad Bank
2. Andhra Bank
3. Bank of India
4. Bank of Baroda
5. Bank of Maharashtra
6. Canara Bank
7. Central Bank of India
8. Corporation Bank
9. Dena Bank
10. Indian Bank
11. Indian Overseas Bank
12. IDBI Bank
13. Oriental Bank of Commerce
14. Punjab & Sindh Bank
15. Punjab National Bank
16. State Bank of India
17. Syndicate Bank
18. UCO Bank
19. Union Bank of India
20. United Bank of India
21. Vijaya Bank
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4. Private Sector Banks:
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The private-sector banks in India represent part of the Indian banking sector that is made up
of both private and public sector banks. The "private-sector banks" are banks where greater
parts of stake or equity are held by the private shareholders and not by government.
List of Private Sector Banks in India

1. Axis Bank.
2. Bank of Punjab
3. Centurion Bank Ltd.
4. Development Credit Bank
5. ICICI Bank.
6. IndusInd Bank
7. Kotak Mahindra Bank
8. Yes Bank
9. Balaji Corporation Bank Limited
10. HDFC bank
11. Bandhan bank
12. IDFC Bank
5. Foreign Banks:
A foreign bank with the obligation of following the regulations of both its home and its host
countries. Loan limits for these banks are based on the capital of the parent bank, thus
allowing foreign banks to provide more loans than other subsidiary banks.
Foreign banks are those banks, which have their head offices abroad. CITI bank, HSBC,
Standard Chartered etc. are the examples of foreign bank in India. Currently India has 36
foreign banks.
List of some foreign banks in India:

1. Doha Bank
2. Bank of Bahrain and Kuwait
3. Bank of America
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4. Barclays Banks
5. DBS Bank
6. Royal Bank of Scotland
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7. Deutsche Bank
8. HSBC India
9. Standard Chartered Bank
10. Citi Bank
6. Regional Rural Bank (RRB):

The government of India set up Regional Rural Banks (RRBs) on October 2, 1975. The banks
provide credit to the weaker sections of the rural areas, particularly the small and marginal
farmers, agricultural labourers, and small entrepreneurs. There are 82 RRBs in the country.
NABARD holds the apex position in the agricultural and rural development.
List of some RRBs is given below:
1. Karnataka Vikas Grameena Bank
2. Kaveri Grameena Bank
3. Pragathi Krishna Grameena Bank
4. Maharashtra Grameena bank
5. Andhra Pradesh Grameena Vikas Bank
6. Arunachal Pradesh Rural Bank
7. Assam Grameena Vikas Bank
8. Baroda Gujarat Grameena Bank
9. J & K Grameena Bank
10. Uttarakhand Grameena Bank
7. Co-operative Bank:
25 Co-operative bank was set up by passing a co-operative act in 1904. They are organised and
managed on the principal of co-operation and mutual help. The main objective of co-
operative bank is to provide rural credit.
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The cooperative banks in India play an important role even today in rural co-operative
financing. The enactment of Co-operative Credit Societies Act, 1904, however, gave the real
impetus to the movement. The Cooperative Credit Societies Act, 1904 was amended in 1912,
with a view to broad basing it to enable organisation of non-credit societies.
Name of some co-operative banks in India are:
1. The Karnataka State Co- operative Apex bank Ltd
2. Andhra Pradesh State Co-operative Bank Ltd
3. The Bihar State Co- operative Bank Ltd.
4. The Maharashtra State Co-operative Bank Ltd
5. The Delhi State Co-operative Bank Ltd
6. The Manipur State Co-operative Bank Ltd
7. Chhattisgarh Rajya Sahakari Bank Maryadit
8. The Gujarat State Co-operative Bank Ltd.
9. The Punjab State co-operative Bank Ltd.
10. Haryana Rajya Sahakari Bank Ltd.
Three tier structures exist in the cooperative banking:

i. State cooperative bank at the apex level.
ii. Central cooperative banks at the district level.
iii. Primary cooperative banks and the base or local level.
Scheduled and Non-Scheduled Banks:
The scheduled banks are those which are enshrined in the second schedule of the RBI Act,
1934. These banks have a paid-up capital and reserves of an aggregate value of not less than
Rs. 5 lakhs, they have to satisfy the RBI that their affairs are carried out in the interest of their
depositors.
26 All commercial banks (Indian and foreign), regional rural banks, and state cooperative banks
are scheduled banks. Non- scheduled banks are those which are not included in the second
schedule of the RBI Act, 1934. At present these are only three such banks in the country.
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4. Company profile:
Type Public
Founded 1924
Headquarters Mangalore, Karnataka, India
Key People
Industry Bank
Products Consumer Banking, Corporate Banking,
Finance and Banking, Investment Banking,
Mortgage Loan, Private Banking, Private
Management, Wealth, Credit Cards, etc.
Advances 25 crores
Operating Profit 5.65 lakhs
Net Profit
Operating Profit
Website
https://karnatakabank.com
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HISTORICAL BACKGROUND:
Karnataka Bank Limited, a leading 'A' Class Scheduled Commercial Bank in India, was
incorporated on February 18th, 1924 at Mangaluru, a coastal town of Dakshina Kannada
district in Karnataka State. The bank took shape in the aftermath of patriotic zeal that
engulfed the nation during the freedom movement of 20th Century India. Over the years the
Bank grew with the merger of Sringeri Sharada Bank Ltd., Chitradurga Bank Ltd. and Bank
of Karnataka.
With over 9 decades of experience at the forefront of providing professional banking services
and quality customer service, we now have a national presence with a network
of 840 branches spread across 22 states and 2 Union Territories.
Managed by a dedicated & professional management team, we have over 8,220 employees,
1,46,000 shareholders and over 10.21 million customers.
Today, we have emerged as a leading financial service institution in India.
Karnataka Bank Limited was incorporated on 18 February 1924, and commenced business on
23 May 1924. Its founders established it at Mangalore, a coastal town in the Dakshina
Kannada district of Karnataka.[4] Among the founders, who created the bank to serve the South
Kanara region, was B. R. Vysaray Achar.[4] K. S. N. Adiga, who served as the Chairman from
1958 to 1979.[4]
In the 1960s Karnataka Bank Limited acquired three smaller banks. In 1960 Karnataka Bank
Limited acquired the Sringeri Sharada Bank, which was established in 1942 had four branches.
Four years later, Karnataka Bank Limited took over Chitradurga Bank (also known as Chitladurg
Bank), which was established in 1868 in Mysore State and was the oldest bank in Mysore. In
1966 Karnataka Bank Limited took over Bank of Karnataka. Bank of Karnataka was established
in 1946 and had opened one branch in Belgaum in 1947. At the time of this acquisition, Bank of
Karnataka had 13 branches.
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In 2000, Karnataka Bank Limited signed a memorandum of understanding with Infosys
Technologies to develop a core banking solution called Finacle.[5].[6] The main motto of this
programme is "Anytime/Anywhere banking".[6] In the year 2004, the bank introduced the
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Karnataka Bnak
MoneyPlant Debit Card that allows customers to withdraw money from their Karnataka Bank
accounts.[5][7]
In September 2003, the bank shifted its head office from Kodialbail to Kankanady
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VISION AND MISSION OF KARNATAKA BANK
Mission Statement
"Our mission is to be a technology savvy, customer centric progressive bank with a national
presence, driven by the highest standards of corporate governance and guided by sound
ethical values."
VALUES:
 Excellence in customer service
 Profit orientation
 Belonging commitment to Bank
 Fairness in all dealings and relations
 Risk taking and innovative
 Team playing
 Learning and renewal
 Integrity
 Transparency and Discipline in policies and systems
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5.3 LIST OF BOARD OF DIRECTORS AND GENERAL MANAGERS
Board of Directors General Managers
Sri P Jayarama Bhat Sri B Chandrashekar Rao
Sri Mahabaleshwara M S Sri Subhaschandra Puranik
Sri Ashok Haranahalli Sri Muralidhar K Rao
Sri Rammohan Rao Belle Sri Nagaraja Rao B
Sri B A Prabhakar Sri Manjunatha Bhat B K
Sri Ullal Ravindra Bhat Sri Mahalingeshwara K
Sri Keshav Krishnarao Desai Sri s Ramesh
Sri D Surendra Kumar Sri Vinaya Bhat P J
SMT. Mythily Ramesh Sri Vadiraj K A
Sri Rajakumar P H
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PRODUCTS AND SERVICES OF KARNATAKA BANK
PERSONAL
Saving account
 Privilege savings account

 KBL SB-TASC
 KBL SB salary Scheme in three variants
 SB General
 KBL Vanitha (women)
 KBL Tarun(student 18-25yrs)
 KBL Kishore (chiidren10-18 yrs)
 SB Sugama (BSBED)
 SB Small account
Loans
 Vehicle loans
 Home loans
 Loan against property
 Education loans
33  Personal loans
 Gold loan
 Other loans
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Karnataka Bnak
Term deposits
 Fixed deposit
 Abhyudaya cash certificate
 Tax planners
 Recurring deposits
 Soulabhya deposits
Cards
 Credit card
 Debit card
 Deposit only card
 Image card
 Travel card
 Gift card
Digital banking
 Mobile banking
 Internet banking
 KBL Direct pay
 E commerce
 Missed call banking
 IVR facilities
 ATM/ELobby
 Demat and online trading
34
Insurance
 Life insurance
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 General insurance
 Health insurance
Investments
 Mutual funds
 Atal pension yojana
 National pension system
 Sovereign gold bond
Remittance
 Money transfer
 Online fund remittances
 Remit2india
Other services
BUSINESS
Current premium
 Money pearl
 Money ruby
 Money diamond
 Money diamond plus
 Money platinum
Digital banking
35
 Internet banking
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Loans
 KBL MSME
 KBL commodity pledge
 KBL contractor mitra
 KBL mortgage OD
 Women entrepreneur
Forex services
KBL e-collect
Merchant acquiring services
AGRICULTURE
 KBL Agri Gold Scheme

 Krishik sarathi scheme
 Krishik pushpankura scheme
 Krishik sinchana schene
 Krishik bhandar
 Krishik godham
 KBL agro processing scheme
 KBL instant agri credit sheme
 Kisan kredit card sheme
NRI
 Acoounts and deposits

36  Loans and advances
 Cards
 Remittance of funds from abroad
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 Value added services

 General information and useful links.
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AWARDS AND ACCOLADES
2019-20
 ET Business Excellence Award 2019, in the category “Excellence in Banking

Service” received on 19-09-2019.
 STP Award 2018: In recognition of Bank’s outstanding payment formatting and

straight-through rate, instituted by Bank of New York, Mellon.
 Bank’s in-house magazine ‘ABHYUDAYA ‘– awarded as the Best In House

Magazine in the National Awards for Marketing Excellence presented by Business
Television India (BTVI).
 Bank bags Atal Pension Yojana “Game Changers” award instituted by PFRDA on 01-
07-2019, for achieving 100% of AAPB target for the FY 2018-19.
2018-19
 ASSOCHAM Social Banking Excellence Awards – 2018, under small bank category,
received on 26-02-2019.
o Winner in Technology.
o Runner up in priority sector lending other than Agriculture.
o Runner up in Overall best social banking award.
 IBA banking technology Awards – 2019, under small bank category, received on 21-
02-2019.
o Runner up in ‘Most Customer Centric Bank’.
 ’ET NOW - Employee Engagement Leadership Awards’ instituted by ET NOW –

World HRD Congress, in the following categories, received on 16-02-2019.
o Best Employee Engagement in Banking Sector.

38
o Best Change Management Program.
o Best Learning & Development Strategy.
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Karnataka Bnak
o Best use of Training in Employee Engagement ‘Best E-Learning module

online award’.
 ”Bank with Best Technology Orientation” and “Best Corporate Social Responsibility
Practices” awards instituted by ET NOW – World BFSI Congress, received on 14-02-
2019.
 Award in Atal Pension Yojana “Perform for Pride” Campaign under Branch
Category, conducted by PFRDA, received on 11-02-2019.
 Award in Atal Pension Yojana “Lead to Leap Award” Campaign, conducted by

PFRDA, received on 16-11-2018.
 ‘Best MSME Bank Award – Runner Up’ instituted by Chamber of Indian Micro
Small & Medium Enterprises [CIMSME], received on 20-07-2018.
2017-18
 IBA – Banking Technology Awards 2018, under the Small Bank Category, received on 23-
02-2018.
[a] Runner up – Technology Bank of the Year.
[b] Runner up – Best use of Digital and Channels Technology.
[c] Runner up – Best Payment Initiatives.
 'Best Financial Services & Foreign Exchange Earner in Southern Region’ award for the year
2016-17 under GOLD Category, instituted by FIEO, received on 18-01-2018.
 Atal Pension Yojana – Golden Trophy” under Private Bank Category in the ‘Challengers
Gold’ campaign for the Atal Pension Yojana Social Security Scheme, conducted by PFRDA,
 Best Bank Award among Small Banks for use of Technology for Financial Inclusion”,
instituted by IDRBT, received on 01-09-2017.
 Winner in ‘Atal Pension Yojana – Brand Ambassador Trophy’ contest, for the Atal Pension
Yojana – Social Security Scheme, conducted by PFRDA, received on 01-09-2017.
39  ISO 9001: 2015’ Certification: bagged by Staff Training College, Mangaluru, for compliance
to quality management standards, instituted by TVE Certification Services Pvt. Ltd., Trichy,
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 Atal Pension Yojana Award: Winner under other private sector banks category, in the Atal
Pension Yojana campaign conducted by Pension Fund Regulatory and Development
Authority (PFRDA), and bagged ‘Indian Pension League [IPL]-Become the Best of the Best’
trophy, received on 05-06-2017.
 MSME Banking Excellence Awards 2016, under the category - ‘CSR Initiatives & Business
Responsibility Award– Runner Up-(Emerging Category), instituted by Chamber of Indian
Micro, Small & Medium Enterprises, received on 20-04-2017, at New Delhi.
SWOT ANALYSIS OF CORPORATION BANK
STRENGHTS OPPORUNITIES
∙ More efficient operational ∙ Expansion into rural areas
40
structure ∙ Widening on consumer base
∙ Market leading positions ∙ Innovative products and services
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∙ Good distribution network ∙ New branches and ATM’s

∙ Large number of employees
WEAKNESS THREATS
∙ Huge amount of staff ∙ Intensifying Competition
∙ Employees show reluctance to ∙ New bank licenses by RBI
solve issues quickly. ∙ Foreign banks that have sophisticated products. ∙ Rise in
∙ Less publicity and branding in inflation figures which would lead to increase in interest rates.
comparison with leadings
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Organisation structure:
Managing Director/ CEO
Executive Director
Chief General Manager
(Circle Office)
GM (C & B) GM (F & S) I & CVO

GM (R & D)
DGM
S (HO/ Zonal DGM (HO/ Zonal DGM (HO/ Zonal DGM (HO/
Branch Branch Branch Zonal Branch
I&
AGM (HO/ Zonal/ AGM (HO/ AGM (HO/ AGM (HO/
Branch) Zonal/ Branch) Zonal/ Branch) Zonal/ Branch)
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Operation workflow:
Chairman & Managing Director
Executive Director
General Manager
Deputy General Manager
Assistant General Manager
Chief Manager
Senior Manager
Manager
Assistant Manager
Clerk
Sub staff
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Competitors of Karnataka Bank:
Company Current price Previous High price Low price

name price
ICICI Bank 392.90 312.50 392.90 392.90
SBI 303.80 1730 303.80 303.80
Axis Bank 755.75 571.25 755.75 755.75
HDFC Bank 1253.80 2096.20 1253.80 1253.80
Kotak Mahindra 1237.90 1283.65 1237.90 1237.90

bank
IndusInd Bank 1505.00 1400.00 1505.00 1505.00
Lakshmi vilas 71.00 89.00 71.00 71.00

bank
Yes bank 252.15 798.65 252.15 252.15
RBL Bank 654.20 637.35 655.75 635.00
Bandhan Bank 487.80 487.85 493.55 487.85
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5.DATA ANALYSIS AND INTERPRETATION
• CATEGORIES OF PRIORITY SECTOR
The broad categories of priority sector for all scheduled commercial banks are
as under:
(i) Agriculture and Allied Activities (Direct and Indirect finance):

• Direct finance to agriculture shall include short, medium and long
term loans given for agriculture and allied activities directly to
individual farmers, Self-Help Groups(SHGs) or Joint Liability Groups
(JLGs) of individual farmers without limit and toothers (such as
corporate, partnership firms and institutions) up to Rs. 20 lakh, for
taking up agriculture/allied activities.
 Indirect finance to agriculture shall include loans given for agriculture
and allied activities as specified in Section I, appended.
 This distinction between direct and indirect agriculture is dispensed
with. Instead, thelending to agriculture sector has been re-defined to
include.
(i) Farm Credit (which will include short-term crop loans and
medium/long-term credit to farmers)
(ii) Agriculture Infrastructure and
(iii) Ancillary Activities
45
(ii) Small Scale Industries (Direct and Indirect Finance):

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Karnataka Bnak
Direct finance to small scale industries (SSI) shall include all loans
given to SSI unitswhich are engaged in manufacture, processing or
preservation of goods and whoseinvestment in plant and machinery
(original cost) excluding land and building doesnot exceed the
amounts specified in Section I, appended.
Indirect finance to SSI shall include finance to any person providing

inputs to or marketing the output of artisans, village and cottage
industries, hand-looms and to co-operatives of producers in this sector.
(iii) Small Business / Service Enterprises:

Shall include small business, retail trade, professional & self-
employed persons, small road & water transport operators and other
service enterprises as per the definitiongiven in Section I and other
enterprises that are engaged in providing or rendering ofservices, and
whose investment in equipment does not exceed the amount specified
inSection I, appended.
(iv) Micro Credit:

Provision of credit and other financial services and products of very
small amounts not exceeding Rs. 50,000 per borrower to the poor in
rural, semi-urban and urbanareas, either directly or through a group
mechanism, for enabling them to improvetheir living standards, will
constitute micro credit.
46 (v) Education loans:

Education loans include loans and advances granted to only
individuals for educational purposes up to Rs. 10 lakh for studies in
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India and Rs. 20 lakh for studiesabroad, and do not include those
granted to institutions;
(vi) Housing loans:
Loans up to Rs. 28 lakh in metropolitan cities where population is
above 10 lakh and Rs. 20 Lakh at other centre s for
construction/purchase of a dwelling unit per family
provided total cost of the unit in metropolitan centres and at other
centres does not exceed Rs. 35 Lacs and Rs. 25 Lacs respectively.
(excluding loans granted by banksto their own employees) and loans
given for repairs to the damaged houses ofindividuals up to Rs.5 lakh
in metropolitan centres and Rs. 2 Lakh at other centres.
(2) Investments by banks in securitised assets, representing loans to
agriculture (direct or indirect), small scale industries (direct or
indirect) and housing, shall be eligible forclassification under
respective categories of priority sector (direct or indirect)depending on
the underlying assets, provided the securitised assets are originated by
banks and financial institutions and fulfil the Reserve Bank of India
guidelines onsecuritisation.
 Under Weaker Sections:

Priority sector loans to the following borrowers are considered under
Weaker Sections category:-
(a) Small and marginal farmers;
(b) Artisans, village and cottage industries where individual credit
47 limits do not exceed 50,000;
(c) Beneficiaries of Swarnajayanti Gram Swarozgar Yojana (SGSY),
now NationalRural Livelihood Mission (NRLM);
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Karnataka Bnak
(d) Scheduled Castes and Scheduled Tribes;

(e) Beneficiaries of Differential Rate of Interest (DRI) scheme;
(f) Beneficiaries under Swarna Jayanti Shahari Rozgar Yojana
(SJSRY);
(g) Beneficiaries under the Scheme for Rehabilitation of Manual
Scavengers (SRMS);
(h) Loans to Self Help Groups;
(i) Loans to distressed farmers indebted to non-institutional lenders;
(j) Loans to distressed persons other than farmers not exceeding
50,000 per borrower to prepay their debt to non-institutional lenders;
(k) Loans to individual women beneficiaries up to `50,000 per
borrower.
(l) Also called or known as priority sector advancement (PSA);
(m) Account holders under Pradhan Mantri Jan Dhan Yojana
(PMJDY)
(vii) Renewable energy sector has also been added to priority sector
lending in the year 2015.
Types of loans under Priority Sector
In line with National Priorities, Government of India has identified sectors such
as Agriculture, Small & Micro Enterprises, artisans, village and cottage
industries, self-help groups, Housing and Education loan for directed lending by
Banks. Development of these sectors is expected to improve the standard of
living of rural masses; who are weaker sections of the society.
48 RBI/ GOI stipulated to deploy at least 40% of ANBC to priority sector. 18% of
ANBC for agriculture apart from agriculture 8% of ANBC for small and
marginal farmers is to be achieved by March 2017. Under micro enterprises
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banks are required to lend up to 7.5% of ANBC by March 2017. Further 10% of
ANBC is to be deployed to weaker sections.
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Agriculture schemes
KBL Agri gold scheme
purpose Financeto meet short term agriculture operation expenses
Eligibility Individuals, HUF and Corporate engaged in Agriculture or Allied activities.
Name of the Period Maximum loan amount

product
Agri production 12 months Maximum of 25 lakhs per
borrower
Agri subvention 12 Months 3lakh
Only in rural and
semi urban
branches, as per the
government of India
instruction.
Security  Primary Security : Hypothecation of Crops/Assets.

 Collateral Security: Pledge of Gold ornaments/specially minted
gold coins (not exceeding 50 gram / borrower) sold by Banks.
Repayment  On or before due date. Interest to be serviced yearly/ on due date.
Conditions Apply:The above information is subject to terms and conditions. The

information provided is only indicative and not exhaustive and subject to changes from
time to time.
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Krishik sarati schemes
Purpose  Purchase of farm machineries / Two wheeler /Jeep/Van

and innovative equipment’s used by the agriculturists for
transporting agriculture produce and farm operations.
Eligibility  Individual, Firm, Company, HUF or Trust engaged in
Agri Activities.
Limit  90% of the cost including Tax & Registration, but

excluding insurance (maximum Limit 100 lakh)
Period  Up to nine years

security  Up to 1lakh:
 Hypothecation of Farm machinery /Vehicle/Assets
Purchased.
 Above 1lakh up to 15 lakhs:
 Hypothecation of Farm Machinery/Vehicle/Assets
purchased.
 Collateral security of properties covering at least 50% of
loan limit. OR guarantee of third party acceptable to the
Bank
 Above 15 lakhs:
 Hypothecation of Farm Machinery/Vehicle/ Assets
purchased.
 Collateral security of properties covering at least 50% of
loan limit and guarantee of third party acceptable to the
Bank.
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Repayment Yearly Instalments coinciding with harvesting/marketing of crop.
Condition Apply: The information provided is only indicative and not exhaustive and subject to
Changes from time to time.
Krishik pushpankur Scheme
purpose  Establishment and maintenance of floriculture units, nurseries and

tissue culture units.
Eligibility  Individual, Firm, Company, HUF, SHG etc.
Limit  Maximum loan amount/limit ₹ 200.00 lakh.

 Term loan –up to 85.00% of the total project cost.
 Overdraft - up to 75.00% of recurring cost of one operating
cycle.
Period  Term loan -Maximum 9 years.

 Overdraft- One year.
Security  Hypothecation of flower crops / saplings/ plant materials /

machineries / assets acquired out of Bank loan.
 Collateral security of properties equivalent to 100% of the loan
amount/limit.
Repayment  Term loan- In Quarterly/half-yearly/yearly Instalments.

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Conditions apply. The information provided is only indicative and not exhaustive and subject
to changes from time to time.
53
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 Krishik Sinchana Scheme
Purpose  Financing all types of minor irrigation projects.
Eligibility  Individual, Firm, Company, HUF and Trust engaged in

Agriculture Activities.
Limit  Maximum upto ₹ 100.00 lakh.
Margin  Minimum 15% on the cost of equipments/project cost.
Period  Up to 9 years.
Security  Up to ₹ 1.00 lakh:

 Hypothecation of crops and assets purchased out of
Bank loan.
 Above ₹ 1.00 lakh:
 Hypothecation of crops and assets purchased.
 Collateral security of Agriculture
land/commercial/residential properties covering at least
100.00% of loan amount.
Repayment  Yearly Instalments coinciding with

harvesting/marketing of crop.
Conditions apply: The information provided is only indicative and not exhaustive and subject to
changes from time to time.
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KBL Instant Agri Credit Scheme
Purpose  To meet agricultural expenses like crop

cultivation, development of agriculture and
allied activities.
Eligibility  Individuals, Corporates, Partnership firms,

Societies & Associations, SHGs, JLGs and
other legal entities.
Limit  Maximum of 90% of the deposit value.
Loan can be sanctioned as overdraft or
fixed loan.
Peroid  Maximum of 24 months.
Security  Pledge of own term deposit.
Conditions apply. The information provided is only indicative and not exhaustive and
subject to changes from time to time.
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Krishik Godham
Purpose  Construction, including renovation and

running of storage facilities like
Warehouses, market yards, godowns, silos
and cold storage units designed to store
agriculture produce/products.
Eligibility  Individuals, farmers, Group of
farmers/growers, Partnership/ Proprietary
firms, Non-Government Organizations
(NGO's), Self Help Groups (SHGs),
Companies, Corporations, Co-operatives,
Local Bodies other than Municipal
Corporations, Federations, Agricultural
Produce Marketing Committees, Marketing
Boards and Agro Processing Corporations.
Limit  Maximum loan amount/limit - ₹500 lakh.
Period  Term loan -Maximum 10 years.

 Overdraft- Maximum 18 months.
Security  Hypothecation of machineries/assets

acquired out of Bank loan.
 Security of properties not less than 100% of
the loan amount/limit.
Repayment  Term Loan- In half yearly/yearly

56
instalments.
 Overdraft- On demand.
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KBL Agro Processing Scheme
Purpose  Establishment and/or improvement of the unit,

repairs and renovations, acquiring machinery/
vehicles/equipment’s/any fixed assets for the agro
processing unit.
 Working capital requirement.
Eligibility  Individuals, Farmers, Group of

Farmers/growers, Companies, Partnership,
Trust, SHG and other legal entities.
Limit  Maximum loan: ₹500 lakh.
Period  DPN Loan: Up to 34 months.

 Term Loan: Up to 120 months.
 Working Capital: Maximum up to 18 Months.
Repayment  Hypothecation of machineries/ assets acquired out of

Bank loan.
 Security of non- agricultural immovable properties
57 with value not less than 75% of the loan.
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Kisan Credit Card Scheme:
Purpose  KCCOD (KISAN CREDIT CARD OVER

DRAFT)
To meet the short term credit requirements for
 cultivation of crops.
 Post-harvest expenses.
 Produce marketing loan.
 Consumption requirements of farmer
household.
 Working capital for maintenance of farm
assets and activities allied to agriculture.
 KCCTL (KISAN CREDIT CARD TERM
LOAN)
To meet Investment credit requirement for
agriculture and allied activities.
Eligibility  Farmers - individual/joint borrowers who are owner

cultivators.
 Tenant farmers, oral lessees & share croppers.
 Self Help Groups (SHGs) or Joint Liability Groups
(JLGs) of farmers including tenant farmers, share
croppers etc.
Limit  The limit will be assessed based on scale of
finance, anticipated average farm income,

repaying capacity.
Nature of facility  KCCOD – Overdraft.
59  KCCTL - Term loan.
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Karnataka Bnak
Margin  For KCCOD – NIL.

 For investment credit – 10 % to 25% depending upon
the investment.
Maximum Repayment  KCCOD / KCCTL – Five years

Period
Repayment Schedule  KCCOD – On demand (within the repayment period

with annual review).
 KCCTL - In Monthly / quarterly / half yearly / yearly
instalments depending upon the activity undertaken /
depending upon the anticipated harvesting and
marketing period for the crops which loan is granted.
Security  Up to one lakh – Hypothecation of crops.

 Above one lakh –
 Hypothecation of crops &

 Collateral of agricultural lands and / or
liquid securities / other securities
acceptable to the Bank.
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MSME:
KBL MSME
Eligibility criteria  All Micro, Small and Medium enterprises engaged in

manufacturing or production, processing or preservation
of goods and engaged in providing or rendering of
services, conforming to the definition of MSME as per
MSMED Act 2006.
Purpose  Working Capital requirements.
 Establishment and/or improvement of the unit, repairs &
renovations, acquiring machineries/vehicles/ equipments/ any
fixed assets for the unit,
61  Purchase/acquiring of property (shop/factory/godown /office) for

self-use.
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Amount of finance  Maximum up to ₹1500 lakh.

 In case of loans eligible to be covered under CGTMSE, maximum
up to ₹200 lakh, subject to certain conditions and loans upto ₹10
lakh is collateral free.
 Purchase of vehicle up to ₹100 lakh.
Tenure of Loan  Working capital OD - up to 18/15/12 months, DPN - 34 months.

 Term loan up to 120 months.
Security  Hypothecation of stocks/book debts /assets acquired/Mortgage of

business premises or property acquired out of loan amount.
 Collateral security of properties to be obtained shall not be less
than 60% of the exposure and a Guarantee/co-obligation of a
suitable third party.
Repayment  OD/BPC/BG/LC/DPG: As per rules.

 Others: In equal monthly instalments + Interest as & when debited
OR in EMI.
Margin  BG/LC/DPG: Cash margin of 25% of the loan amount.

 New vehicles/Equipment’s/Projects/Others: 15%- 30% on the
cost.
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Rate of Interest As per MCLR guidelines
KBL Contractor Mitra
Eligibility Criteria  Individuals, Company, Partnership, LLP engaged in

civil contract activities..
Purpose  Purchase of new vehicles/second hand vehicles (including
JCB, tractors which are registered with RTA).
 Purchase of new machineries required for civil contract
activities.
Maximum Amount  Based on requirement of the civil contractor with a

maximum of ₹1000 lakh.
Maximum Period of  New vehicles/ machineries: Maximum 84 months.
Loan  Used vehicles: Depending upon the residual life of vehicle,
maximum up to 48 months.
Security  Hypothecation of vehicle / machineries to be

purchased
Repayment  In Equated Monthly Instalments (EMI).
Margin  New vehicles/machineries: 10%-15% on the cost.

 Old vehicles : 30% of cost
Rate of Interest  As per MCLR guidelines

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KBL Other Schemes:
There is a demand for about 25 million dwelling units in the country of which 95% is
required by urban canters. It is reported that housing is central to economic growth and has
multiplier effects on employment, poverty reduction etc. It is estimated that alleviating the
Gross Domestic product) by the least 1-1.5% and have a decisive impact on improving the
basic quality of life. Education is an investment that augments the stock of human capital
over a period. There is strong economic evidence to support that the return on investment
(both public and private) is positive and highly correlated with economic well-being
education loans well extended by banks have brought higher education within the reach of
deserving poor and brought it to the masses Sector Advances loans to very small amount help
the poor access credit from formal financial institutions. Such loans are generally extended
for creation of income generating assets and sometimes include emergency and consumption
purposes. Such loans not exceeding Rs.50000/- per borrower to the poor Sections.
Education Loan: KBL Vidhyanidhi
Eligibility Criteria  Any student, representing himself / herself if

major, or a minor student represented by
parent or guardian, of Indian nationality, who
has secured admission to a professional /
technical / other course, in India or abroad.
Eligibility Courses  Studies in India:
Graduate Courses: B.A.,B.Sc., B.Com., B.C.A., B.B.M.,
Diploma in Engineering.
Post Graduate Courses : Masters and Ph.D.
Professional Courses : Engineering, Medical,
Agriculture, Nursing, Veterinary, Law, Dental,
Management, Computer, Pharmacy, Physiotherapy,
65
Hotel Management, ICWA, CA, CFA.
Courses conducted by IIM, IIT, XLRI, NIFT
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Courses offered in India by reputed foreign universities;

Evening Courses of approved Institutes.
Other Courses leading to Diploma / Degree conducted
by Colleges / Universities approved by UGC / GOVT. /
AICTE /AIBMS / ICMR; Courses offered by National
Institutes and other reputed private Institutions.
 Studies Abroad:
Graduation : Only for job oriented professional /
technical courses offered by the reputed Universities
Post Graduation : MCA, MBA, MS; Courses conducted
by CIMA-London, CPA in USA etc.
 In India - a maximum of ₹10 lakh.

 Abroad - a maximum of ₹20 lakh.
Amount of Loan  In India - a maximum of ₹10 lakh.

 Abroad - a maximum of ₹20 lakh.
Expenses eligible to cover  In India:

under the scheme Tuition Fees, Hostel Fees and Boarding and Lodging
Fees if resident outside Hostel; Examination /
Laboratory and Library Fees; Purchase of Books / Study
material / Equipment and Uniforms; Caution Deposit /
Building Fund / Refundable Deposits (supported by
Receipts issued by the Institution); Travel expenses /
passage money .
 For study abroad:
Purchase of Computer if certified as essential for
66
completion of course.
other expenses like Project Work, Study Tour and
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Karnataka Bnak
Thesis, which are necessary for completion of course.
Margin  Up to ₹4 lakh: No margin required.

 Above ₹4 lakh:
5% for studies in India.
15% for studies abroad. Scholarship / Assistantship may
be reckoned as part of margin. Margin may be brought
in on year-to-year basis as and when disbursements are
made, on a pro-rata basis.
Security  Up to ₹7.5 lakh(covered under CGFSEL): No security

 Above ₹4 lakh and upto ₹7.50 lakh: Collateral in the
form of a suitable third party guarantee.
 Above ₹7.50 lakh: Collateral security of suitable value
/suitable third party guarantee along with the assignment
of future income of the student for payment of
installments.
Repayment  Repayment of the loan (after study period and

subsequent moratorium period) will be in equated
monthly installments for period up to 15 years.
 The completion of the course includes internship or
apprenticeship if compulsory for award of Degree.
 If the student does not complete the course within the
scheduled period, a maximum period of 2 years is
permitted for completion.
 If the student is unable to complete the course for
67 reasons beyond his control then extension may be
granted if deemed necessary to complete the course.
 The accrued interest during the repayment holiday will
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Karnataka Bnak
be added to the principal and repayment in equated

monthly installments (EMI) shall be fixed.
68
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Karnataka Bnak
Home loan:
KBL Apna Ghar
Eligibility Criteria  Individuals who are resident of India.
 NRIs holding an Indian passport.
 Minimum age Limit: 18 years
 Income:
Resident Indian:
o Salaried Persons: Minimum gross

monthly salary ₹10,000/-
o Agriculturist: Minimum Annual net

income ₹1,20,000/-
o Business Men/Professionals/Self
Employed: Minimum Annual gross
income ₹1,20,000/-
NRIs:
o Salaried Person: Minimum gross
monthly salary ₹40,000/-
o Business Men/Professionals/Self
69
Employed: Minimum Annual gross
income of ₹4,80,000/-
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Karnataka Bnak
Purpose  Construction / purchase of house / flat.
 Renovation / remodelling / repair to existing

house / flat.
Amount of Finance  Salaried Person: 60 times of latest monthly Net

salary.
 Businessmen/Professionals/Self Employed: 5
times the average net income/Profit plus
depreciation provided, if any, of the last 2
years as per P&L a/c in case of traders/Self-
employed/Professional.
 Agriculturist: 5 times the current year net

income.
Maximum Amount  Purchase/Construction: up to ₹500 lakh.
 Renovation/Remodelling/Extension/Repair: Up
to ₹30 lakh.
Period of Loan  Construction: Maximum up to 30 years.
 Renovation/Repair: 7 years.
Secutity  Mortgage of house property to be constructed /

purchased / repaired / remodeled/renovated.
 Guarantee of the spouse wherever feasible in

the absence of which third party solvent
70 guarantor.
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Karnataka Bnak
Repayment  General: In equal / equated monthly

instalments (EMIs).
 Agriculturist: Yearly basis including yearly

interest.
Margin  New construction: 10-25 %
 Houses/ Flat above 10 years: 30 %
Rate of interest  Up to Rs 75 lakh 8.65 - 9.00

 Above Rs 75.00 lakh 8.75 – 9.00
KBL home comfort
Eligibility Criteria  Who have already availed loan

under KBL-Apna Ghar/Elite
scheme.
 Who have not availed any loan from

any FI for their Residential property/
closed the housing loan already
availed.
Purpose  Furnishing, interior works, acquiring

furniture-fixtures, Solar
heating/lighting systems.
Amount of Finance  Up to 75% of the estimated cost of
assets to be purchased/works to be
carried out.
Maximum Amount  ₹100 lakh.
71
Period of Loan  Maximum up to 120 months.
Security  Hypothecation of assets acquired out
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Karnataka Bnak
of loan.
 Already Mortgaged house/flat

property obtained for the housing
loan(for KBL-Apna Ghar/Elite
Scheme loan).Or Mortgage of the
relative house/flat property for
which the facility is sought
 Guarantee of the spouse wherever

feasible in the absence of which
third party solvent guarantor.
Repayment  In equal / equated monthly

instalments (EMIs).
Margin  25 %
Rate of interest
KBL Ghar Niveshan
Eligibility Criteria  Individuals who are resident of India.
 NRIs holding an Indian passport.
 Minimum age Limit: 21 years .
 Income:
Resident Indian:
 Salaried Persons
:Minimum gross monthly
salary ₹10,000/-
 Others : Minimum Annual
72
gross income ₹1,20,000/-
NRIs:
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Karnataka Bnak
 Salaried Person: Minimum

gross monthly salary
₹40,000/-
 Others : Minimum Annual
gross income of
₹4,80,000/-
Purpose Purchase of house site.

Amount of finance  Up to 80% of the Registration value of
the site with a maximum of ₹50 lakh.
Period of Loan  Maximum up to 60 months
Security  Mortgage of house site to be acquired

feasible in the absence of which third
party solvent guarantor.
Repayment  General: In equal / equated monthly

instalments (EMIs).
 Agriculturist: Yearly basis including

yearly interest.
Margin  20 %
Rate of interest
KBL Mortgage OD:
Eligibility Criteria  Customers/units eligible to be

classified under Priority Sector (MSE)
73 only.
 Age Limit: 21 years and above.
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Karnataka Bnak
Purpose  For meeting business/

professional/Working capital needs.
Amount of finance  Three times of the average annual
income of last two years/50% of the
market value of the property (40 % in
case of industrial properties).
 Subjected to a minimum of ₹11 lakh

and maximum of ₹100 lakh.
Maximum Period of loan  12 months.
Security  Mortgage of properties.

feasible in the absence of which third
party solvent guarantor.
Repayment  As per Overdraft guidelines.
Margin  Minimum up to 60%
Rate of Interest
KBL Mahila Udyog
74
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Karnataka Bnak
Eligibility Criteria  Individuals (Women).
 Firm/Company where at least

51% of the shareholding and
controlling stake is held by
Woman entrepreneur.
 Women Self Help Group.
Purpose  For meeting credit requirement

for any income generating
activity.
Maximum Amount  Working Capital: Maximum up
to ₹2 lakh.
 TL/DPN: Maximum up to ₹10

lakh (including the working
Capital limit under the scheme
and the overall exposure under
MSE should not exceed ₹10
lakh per borrower).
Maximum Period Of Loan  OD: 12 months.
 DPN: Up to 34 months.
 TL : Up to 120 months
Security  Hypothecation of assets created

with Bank finance.
 CGTMSE coverage wherever

permissible.
75
Repayment  OD: As per OD rules.
 DPN/TL: In EMI OR, in equal
Page 75
Karnataka Bnak
monthly instalments + Interest

as & when debited.
Margin  15% - 30%.
Rate of interest  As per MCLR guidelines
KBL Ravi Kiran:
Eligibility Criteria Individuals/HUF/Farmers/Traders/Businessmen/Proprietorship

concerns/Professionals/Salaried persons/Institution etc.
Purpose Installation of solar lighting system, Solar water heating
system, solar latern etc.
Amount of finance Maximum ₹10 lakh.
Period of loan Maximum up to 60 months.
Security  Hypothecation of solar energy products with

accessories installed.
 Third party solvent co-obligation/guarantee.
Repayment Equal/Equated Monthly/quarterly/half yearly/yearly

76
Instalments.
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Karnataka Bnak
Margin 15% of the project cost.
Rate of Interest `
Priority Sector Advances:
Agriculture Advances:
Table No 1
Amount
Years Percentage
(Crores)
2014-15 4273.15 16.30684489
2014-16 4547.53 17.35391137
2016-17 5396.6 20.59406273
2017-18 5891.87 22.48407152
2018-19 6095.49 23.26110948
Chart No 1:( In terms of Amount)
77
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Karnataka Bnak
Agriculture Advances
7000
5891.87 6095.49
6000 5396.6
Amount in crores
5000 4547.53
4273.15
4000
3000
2000
1000
0
2014-15 2014-16 2016-17 2017-18 2018-19
years
78
Chart No 2:( In terms of Percentage)

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Karnataka Bnak
25
Agriculture Advances 23.26110948
22.48407152
20.59406273
20
17.35391137
16.30684489
Percentage
15
10
0
2014-15 2014-16 2016-17 2017-18 2018-19
years
Interpretation
As per the above table and the advances given to agriculture under priority sector are
increased year by year . Advances to Agriculture are increased from Rs 4273.15 crores to Rs
6095.49 Crores between 2014-15 and 2018-19.
The Agriculture advances in the year 2014-15 16.30% and in the year 2018-19 it is
increased by 23.26%.
79
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Karnataka Bnak
MSME’s Advances
Table No 2
Amount
Years Percentage
(crores)
2014-15 6358.62 13.99439354
2015-16 7954.48 17.50664823
2016-17 8234.31 18.12251317
2017-18 11146.73 24.53232405
2018-19 11742.77 25.844121
Chart No 3: (In terms of Amount)
MSME's Advances
14000
11742.77
12000 11146.73
Amount in crores
10000
7954.48 8234.31
8000 6358.62
6000
4000
2000
0
2014-15 2015-16 2016-17 2017-18 2018-19
years
80
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Karnataka Bnak
Chart No4:(In terms of Percentage)
MSME's Advances
30
25.844121
24.53232405
25
20 17.50664823 18.12251317
Percentage
13.99439354
15
10
0
2014-15 2015-16 2016-17 2017-18 2018-19
Years
Interpretation
The advances given to micro small and medium enterprises under priority sector
areincreased year on year .Advances micro Small and medium enterprises are
increased from Rs. 6358.62 croresto Rs.11742.77 crores between 2014-15 and
2018-19.
The Micro small and medium enterprises are 13.99% in the year 2014-15 and in
the year 2018-19 increased by 25.84%.
81
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Karnataka Bnak
Other Priority Sector Advances:
Table No 3
Amount
years Percentage
(crores)
2014-15 2066.82 18.44368831
2015-16 2100.49 18.7441494
2016-17 2208.7 19.70978332
2017-18 2273.07 20.2842021
2018-19 2557.03 22.81817687
Chart No 5:( In terms of Amount)
3000
Other priority advances
2557.03
2500 2208.7 2273.07
2066.82 2100.49
Amount in crores
2000
1500
1000
500
0
2014-15 2015-16 2016-17 2017-18 2018-19
Years
82
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Karnataka Bnak
Chart No 6: (In terms of Percentage)
Other Priority Advances

25 22.81817687
19.70978332 20.2842021
20 18.44368831 18.7441494
Percentage
15
10
0
2014-15 2015-16 2016-17 2017-18 2018-19
Years
Interpretation
The above chart no5 shows that the bank has increased in the providing other
priority advance.As per the above table other priority advances given by the
bank are slowly increased in the year 2014-15 from Rs2066.82 crores to
2557.03 crores in the year 2018-19.
The chart no 6 shows that there is increase in other priority advances from
2014-15 to 2018-19 the percentage of 18.44 to 22.81.
83
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Karnataka Bnak
Total Priority Advances
Table No 4
years Amount (crores) Percentage

2014-15 12698.59 15.3276387
2015-16 14602.5 17.62572413
2016-17 15839.61 19.11895882
2017-18 19311.67 23.3098557
2018-19 20395.29 24.61782264
Chart No 7: ( In terms of Amount)
Total Priority Advances

25000
20395.29
19311.67
20000
Amount in crores
15839.61
14602.5
15000 12698.59
10000
5000
0
2014-15 2015-16 2016-17 2017-18 2018-19
Years
84
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Karnataka Bnak
Chart No 8: (In terms of Percentage)
Total Priority Sector

30
24.61782264
25 23.3098557
19.11895882
20 17.62572413
percentage
15.3276387
15
10
0
2014-15 2015-16 2016-17 2017-18 2018-19
Years
85
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Karnataka Bnak
Table No 5 (TableShowing Total Priority Sector in terms of percentage)
Total Proirity
Sector 2014-15 2015-16 2016-17 2017-18 2018-19
Agriculture 16.3 17.35 20.59 22.48 23.26
MSME's 13.99 17.5 18.12 24.53 25.84

other Priority
Sectors 18.44 18.74 19.7 20.28 22.81
Total 48.73 53.59 58.41 67.29 71.91
Chart No 9: (ChartShowing Total Priority Sector in terms of Percentage)
30
25.84
24.53
25 23.26 22.81
22.48 Agriculture
20.59 20.28
19.7
20 18.44 18.74 18.12
17.3517.5
16.3
Percentage
MSME's
15 13.99
other Priority
10 Sectors
0
2014-15 2015-16 2016-17 2017-18 2018-19
Years
86
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Karnataka Bnak
Interpretation
The priority sector lending by Karnataka bank during the year 2014-15 to 2018-
19 represented in table No 4.
The Total priority advances Karnataka Bank increased from Rs12698.59crores

in 2014-15 to Rs 20395.29 crores in 2018-19.
Agriculture advances are increasing yearly .In 2014-15 it was 4273.15 crores
but it is increased up to Rs 6095.49 crores in 2018-19. In terms of percentage
the agriculture advances increased by 23.26%.
Micro small and medium enterprises are also increased yearly. In the year 2014-
15 it was 6358.62 crores but it is increased up to 11742.77 crores. Advances to
Micro small and medium enterprises were more compared to other sectors .The
MSME’s in terms percentage in the year 2014-15 it was 13.99% and in the year
2018-19 increased by 25.84%.
Advances to other priority sector are also increased from Rs 2066.82crores to

Rs.2557.03crores between 2014-15 and 2018-19.The other priority sector in
terms of percentage increased by 18.44% in the year 2014-15 it was increased
22.81% in the year 2018-19.
The chart No 9 represents that overall priority sector in terms of percentage.
87
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Karnataka Bnak
Non- Performing Assets
Table No 6
Years Amount (crores)
2014-15 944.21
2015-16 1180.4
2016-17 1581.59
2017-18 2376.07
2018-19 2456.38
Chart No 10: (In terms of Amount)
NPA with respected to priority sector

3000
2376.07 2456.38
2500
Amount in crores
2000
1581.59
1500 1180.4
944.21
1000
500
0
2014-15 2015-16 2016-17 2017-18 2018-19
Years
Interpretation
88 The above table the NPA’s in priority sector by Karnataka bank during period
under the study. As per the above table the Non-Performing Assets of Bank are
Page 88
Karnataka Bnak
increased year on year. NPA’s are increased from Rs.944.21 Crores to Rs

2456.38 crores between 2014-15 and 2018-19.
6. Findings
 The Karnataka Bank is providing different types of loans under Priority

Sector.
 The Agriculture Advances in the year 2014-15 it was 16.30% and in the
year 2018-19 it is increased by 23.26%.
 The Micro small and medium enterprises was 13.99% in the year 2014-
15 and Micro small and medium enterprises has reached a level of
25.84% in the year 2018-19.
 Other Priority Sectors housing,education, personal loan, vehicle Etc. are
marketed under brand name “KBL Schemes “.
 The Non-Performing assets of bank increased year on year. In the
year2014-15 it was Rs 944.21 Crores and increased up to Rs 2456.38
crores in 2018-19.
89
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Karnataka Bnak
7. CONCLUSION
The contribution ofPSL (Priority Sector Lending) in increasing the credit supply
to priority sectors, primarily agriculture, MSEs and export in India is clear.
However, imposing mandatory PSL restrictions on all types of SCBs uniformly,
is not only an inefficient means of meeting the needs of the sectors, but is also
costly for the banks. Further, the responsiveness of sectors to increase in PSL is
governed by sector specific factors. Agriculture, in particular is characterized by
factors such as dependence on monsoons, stagnating / lowering productivity,
fragmentation of land holdings and the existence of an informal credit market
that throttles the impact of increased PSL from reaching the intended
beneficiaries, and contributing to the sector’s growth.
Thus looking at the costs incurred by banks in extending credit to priority

sectors by opening more branches, and in light of a strong informal credit
market competing with the formal credit due to comparative advantage of
proximity to the borrower, we recommend alternate channels of disbursing
credit to these sectors specially agriculture. Resetting PSL targets for banks
based on their underlying business models will certainly enable them to meet
their targets efficiently. However, considering the costs of PSL for banks, credit
90 availability to priority sectors in the long run can be sustained by making these
sectors, especially agriculture, attractive for private sector investment and by
strengthening specialized financial institutions like RRBs, cooperatives and
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Karnataka Bnak
MFIs to meet the credit needs of these priority sectors and stimulate positive
feedback effect on the growth of these sectors.
Recommendations
• For maintaining the same performances levels, the bank are suggested to
properly check all the documents while sanctioning the loan.
• As the demand for Micro Small and Medium Enterprises is increasing the
bank is suggested to provide more loan for Micro Small and medium Scale
Enterprises.
• The Bank should identify the problem very early so that they can try their best
to Stop NPA’s.
• Bank should try their Best to recover NPA’s. Regular follow up and proper
legal proceedings will reduce the slippage of NPA’s.
91
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Karnataka Bnak

Karnatak Law Society’s

INSTITUTE OF MANAGEMENT EDUCATION AND

“Analysis of Priority Sector Lending At Karnataka Bank”

Rani Channamma University,

(In partial fulfilment of Post graduate Degree in Master of Business Administration)

MBA II semester, 2018-2020

UNDER THE GUIDANCE OF

Prof.Sanjay Deshpande Mr. shreenivas kulkarni

AssistantProfessor Branch manager

KLS Institute of Management Education and Research,Belagavi

I Miss. Pratibha Alagawadi undersigned, hereby declare that the

Place:Belagavi Pratibha Alagawadi

KLS Institute of Management Education and Research,Belagavi

Karnatak Law Society’s

INSTITUTE OF MANAGEMENT EDUCATION AND RESEARCH

This is to certify that Internship Report entitled “Analysis of Priority Sector

KLS Institute of Management Education and Research,Belagavi

Date:10-03-2016 Internal Guide

(Prof. Sanjay Deshpande)

KLS Institute of Management Education and Research,Belagavi

Karnatak Law Society’s

INSTITUTE OF MANAGEMENT EDUCATION AND RESEARCH

Date: Dr. Atul Deshpande

KLS Institute of Management Education and Research,Belagavi

I thank the management of Karnataka Bank for giving me an

Place:Belagavi Pratibha Alagawadi

KLS Institute of Management Education and Research,Belagavi

CHAPTER NO TITLE PAGE NO

III Research Methodology 07

KLS Institute of Management Education and Research,Belagavi

4.4 Product /Service Profile 26

KLS Institute of Management Education and Research,Belagavi

KLS Institute of Management Education and Research,Belagavi

1.1Background of the study

KLS Institute of Management Education and Research,Belagavi

KLS Institute of Management Education and Research,Belagavi

 Need for the Study:

 Importance of the study:

 Objectives of the study:

KLS Institute of Management Education and Research,Belagavi

 To know the NPA (Non-Performing Assets) of the Karnataka bank under

Source of Primary data:

KLS Institute of Management Education and Research,Belagavi

Secondary data source data collection:

KLS Institute of Management Education and Research,Belagavi

INTRODUCTION TO BANKING INDUSTRY

KLS Institute of Management Education and Research,Belagavi

KLS Institute of Management Education and Research,Belagavi

KLS Institute of Management Education and Research,Belagavi

“Bank means a bench or table for changing money.”

English common law

KLS Institute of Management Education and Research,Belagavi

Structure of Indian Banking

KLS Institute of Management Education and Research,Belagavi

1. Reserve Bank of India:

3. Public Sector Banks:

KLS Institute of Management Education and Research,Belagavi

Nationalised Banks in India are: