Sairaj Khopde Home Loan IDBI

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A

PROJECT REPORT ON

“A STUDY ON HOME LOAN SYSTEM AND PERFORMANCE IBDI BANK,


TULJAPUR”

WITH SPECIAL REFERENCE TO


“INDUSTRIAL DEVELOPMENT BANK OF INDIA LIMITED, TULJAPUR”

SUBMITTED TO
BHARATI VIDYAPEETH DEEMED (DEEMED TO BE) UNIVERSITY, PUNE

IN PARTIAL FULFILLMENT DEGREE OF BACHELOR OF


BUSINESS ADMINISTRATION SUBMITTED BY

Mr. SAIRAJ SATISH KHOPADE

BBA:-III

UNDER THE GUIDANCE OF

PROF.SHIVGANGA MENDARGI

THROUGH THE DIRECTOR

BHARATI VIDYAPEETH

ABHIJIT KADAM INSTITUTE OF MANAGEMENT AND SOCIAL SCIENCES, SOLAPUR.

2021-2022
DIRECTOR CERTIFICATES

This is to certify that the project entitled “A STUDY ON HOME LOAN


SYSTEM AND PERFORMANCE IBDI BANK”, prepared by Mr. SAIRAJ SATISH
KHOPADE in partial fulfillment DEGREE OF BACHELOR OF BUSINESS
ADMINSTRATION is carried out under the supervision and guidance of
PROF.SHIVGANGA MENDARGI and same is forwarded to the university.
I also wish him all the best for his career and success to every step he
moves in life.

Place: - SOLAPUR Dr. S.B. SAWANT

B.Sc., MBA, MA(Eco.), M.Phil., Ph.D.,

GDC&A, PGDRD.

Date: - (Director)
GUIDE CERTIFICATE

This is to certify that Mr. SAIRAJ SATISH KHOPADE has satisfactorily


completed the project work entitle, of “A STUDY ON HOME LOAN SYSTEM AND
PERFORMANCE IBDI BANK” For the partial fulfillment of BBA.-III submitted to Bharati
Vidyapeeth Deemeed University, Pune during the academic year 2021-22 under my guidance.
To best my knowledge and belief the matter presented by him is original and not copied from
any source. Also this report has not been submitted earlier for the award of any degree or
diploma of Bharati Vidyapeeth Deemed University or any other University.

Place: - Solapur GUIDE


PROF.SHIVGANGA MENDARGI

Date:-
DECLARATION

I declare that the project titled “A STUDY ON HOME LOAN


SYSTEM AND PERFORMANCE IBDI BANK ” is an original project done by me under the
guidance of PROF.SHIVGANGA MENDARGI, Branch Manager,

Mr. MANISH SIR Layout Branch, IDBI BANK,TULJAPUR .

I further declare that this project is the result of my


own efforts and this report has not been submitted to any other university.

Place: TULJAPUR Mr. SAIRAJ SATISH KHOPADE

Date:
ACKNOWLEDGEMENT

I take this opportunity to express my gratitude to


PROF.SHIVGANGA MENDARGI, A Branch Manager, Mr. MANISH SIR Layout Branch, IDBI
BANK, for providing me an opportunity to do the project under his guidance despite his
busy schedule. His support and suggestions were immense in enabling the successful
completion of this project.

Thank You

Place: Solapur Mr. SAIRAJ SATISH KHOPADE

Date:
INDEX
Sr. No. Particulars Page No.
01 CHAPTER -I
INTRODUCTION
1-9
02 CHAPTER-II
REASEARCH METHODOLOGY
10-19
03 CHAPTER-III
CONCEPTUAL DISCUSSION
20-23
04 CHAPTER-IV
DATA ANALYSIS
24-29
05 CHAPTER-V
FINDINGS AND CONCLUSION
30-36
06 CHAPTER-VI
APPENDIX
37-38
CHAPTER-1 :

INTRODUCTION TO THE
ORGANIZATION
 BANK DESCRIPTION :-

1.1INTRODUCTION OF THE COMPANY

Today’s IDBI is one of the India’s largest banks. It has essayed a significant role in the

country’s Industrial and economic progress for over 40 years- first as a development

financial institution and now as full service commercial bank and now as full service

commercial bank.

Headquarters in Mumbai, the commercial capital of the country. IDBI has been

consistently delivering superior products across convenient delivery channels and

always provide efficient services to its retail and corporate customer.

1.2VISION

“To be trusted partner in progress by leveraging quality human capital and setting global

standards of excellence to build the most valued financial conglomerate"

1.3 PHASES OF IDBI

 IDBI was established in 1964 by parliament as a wholly owned subsidiary of

RBI. In 1976 the bank’s ownership was transferred to the government of India.
 IDBI has provided assistance to development related projects and contributed

to building up substantial capacities in all major industries in India. It has

played a dominant role in balanced industrial development.

 In 1992, IDBI transferred its International Finance Division to Export- Import

bank of India, which was a wholly owned corporation of Government of

India under Export Import Bank of India Act, 1982.

 IDBI set up the Small Industries development Bank of India (SIDBI) as a wholly

owned subsidiary to cater to small industries. In 2001 IDBI reduced its

shareholding in SIDBI to 49 percent.

 IDBI has engineered the development of Capital Market through helping in

setting up of the securities Exchange Board of India (SEBI), National Stock

Exchange (NSE), credit Analysis and Research analysis, Investor Services of

India etc.

 In 1992 IDBI accessed the domestic retail market for the first time by issuing

innovative bonds known as Deep discount Bonds. These bonds were highly

popular among Indian investors.

 In 1994, the IDBI act was amended to permit public ownership upto 49

percent. In July 1995, it raised over Rs 20 billion in its first initial offering (IPO)

of equity, there reducing government stock to 72 percent. In June 2000, a part

of government shareholding was converted into preference capital. This


capital was redeemed in March 2001, which led to a reduction in government

stake. The government stake currently is 58 percent.

 In august 2000, IDBI became the first All India Financial institution to obtain

ISO 9002: 1994 Certification for its treasury operations.

 IDBI has undertaken several initiatives to reposition itself as universal Bank. In

April 2001, IDBI appointed Boston consulting group India private limited as

consultant to draw up a roadmap for conversion into Universal bank.

1.4 Strength/ Opportunities:

The growth for IDBI in the coming years is likely to be fuelled by the
following factors:

• Continued effort to increase low cost deposit would ensure


improvement in NIMs and hence earnings.

• Growing retail & SMEs thrust would lead to higher business growth.

• Strong economic growth would generate higher demand for funds


pursuant to higher corporate demand for credit on account of capacity
expansion.
1.5 Weakness/ Threats:

The risks that could ensue to IDBI in time to come are as under:

• IDBI is currently operating at a lowest CAR. Insufficient capital may


restrict the growth prospects of the bank going forward.

• Stiff competition, especially in the retail segment, could impact retail


growth of IDBI and hence slowdown in earnings growth.

• Contribution of retail credit to total bank credit stood at 26%.


Significant thrust on growing retail book poses higher credit risk to the
bank.

• Delay in technology up gradation could result in loss of market shares.

• Management indicated a likely pension shortfall on account of AS-15 to


be close to

Rs50bn.

• Slow down in domestic economy would pose a concern over credit off-
take thereby impacting earnings growth.
1.6 COMPETITORS:

Competitors and other players in the field:-

Top Performing Public Sector Banks:

Andhra Bank
Allahabad Bank
Punjab National Bank
Dena Bank

Top Performing Private Sector Banks:

HDFC Bank
ICICI Bank
AXIS Bank
Kotak Mahindra Bank
Centurion Bank of Punjab

Top Performing Foreign Banks:

Citibank

Standard Chartered

HSBC Bank

ABN AMRO Bank

American Express
1.7 DIFFERENT PRODUCTS OF IDBI:

DEPOSIT LOANS CARDS PAYMENTS


 Savings  Home Loans  Gold Debit Card  Tax
Account Payments

 Current  Loan Against  International  Stamp


Account Property Debit cum ATM Duty
card Payments

  Fixed  Personal  Gift Card  Easy Fill


Deposits Loans Bill
Payments

 Pension  Auto Loan  World Currency  Card To


Card Card
Account
Money
Transfer
 Sabka  Loans  Cash Card Kids
Account against Debit
Securities

 Suvidha Tx  Education  Platinum Card  Online


Saving Fixed Loan Payments
Deposit

 Jublie Plus  Reverse  Foundation Day


Account Mortgage Cash Back
Loan Scheme 2009

 Super Shakti  Pay Mate


Account for
Women
1.8 BRANCH NETWORK :

TYPES OF BRANCHES NO OF BRANCHES

METRO 169

URBAN 132

SEMI URBAN 85

RURAL 46
CHAPTER NO.2:

RESEARCH METHODOLOGY

2.1 HOME LONE

 Common guidelines applicable for standard Home Loan :


1. Mode of processing :-

 All the Home Loan proposals would be processed (login and sanction) through
Automated Loan Processing System (ALPS) across RACs located PAN India. However,
disbursement to be done through Finacle system which has an interface with ALPS.

 Preference in processing of loan applications, to be given to applicants with disabilities,


women (with overriding preference to widows, single working women), applicants
belonging to EWS/LIG income group & SC/ST/OBC ,
and transgender.

2. Borrower category :-

The following categories of borrower including visually impaired persons and persons not
knowing English may be eligible for availing Home facility as under:

 Salaried
 Pensioners (defense personnel or persons who retire early before attaining the age of
superannuation)

 Non Resident Indian(NRI)(Salaried)/Person of Indian Origin(PIO)(Salaried)/Overseas


Citizens of India(OCI)(Salaried)

 Self Employed Professionals(SEP)


 Self Employed Non Professionals(SENP)

 Exclusions : Hindu Undivided Family, Trusts, and Association of Persons

3. Insurance :-

 Life Insurance to cover borrower’s loan liability may be explored on optional basis, with
the consent of the borrowers.

 Property insurance (mandatory for all home loan cases) and should be availed for full
tenor as allowed under insurance product/ policy subject to minimum of 10 years .
Cases where sanctioned loan tenure is less than 10 years, cover will have to be taken
for full tenure of loan. This norm will be applicable even for staff home loan cases.

 Cover to be taken for (a) 100% of the cost of re-construction of the property to be
mortgaged as per value’s latest technical report or (b) loan amount sanctioned,
whichever is lower.

 Insurance premium to be collected prior to disbursement of loan.

4. Security :-

 By first charge on the property financed by the bank. Title Deed of the property
should be clear and marketable.

 Dealing Group to ensure creation of Mortgage as parents details guidelines provided in


the process manual for Home Loan and LAP along with following circulars issued by
Legal department :

 IDBI Bank/2020-21/55/CC/Legal/6- Stamping of the document s & registration


of notice of intimation of the creation of equitable mortgage in the State of
Maharashtra - Maharashtra Stamp Act, 1958 & Indian Registration Act,
1908 Stamping of the documents & registration of notice of intimation of the
creation of equitable mortgage in the State of Maharashtra - Maharashtra
Stamp Act , 1958 & Indian Registration Act, 1908 dated 29/04/2020.
 IDBI Bank/2020-21/197/CC/Legal/43- Title investigation report dated 16/07/2020.

 Other circulars issued from time to time in this regard.


 For any clarification/suggestion on Mortgage Creation Process, Dealing Group may
contact Bank’s Regional/Zonal Legal Department.

 In case of Second Charge/PariPassu: Charge confirmation/agreement from First mortgagee.


5. Personal Guarantee :-

 Personal Guarantee is to be obtained if the total eligible income is below the


stated norms subject to the satisfaction of the Credit Manager.

 A Guarantor should not stand as Guarantee for more than one loan.
 A guarantor should meet the minimum income and age criteria and should be a
resident Indian.
 Co-applicant cannot be taken as guarantor. Guarantor and co-applicants should
always be different individuals.

 As per the restriction of section 185 of the Companies Act, 2013, no company / entity
can stand as guarantor or offer any security which is in the name of the entity for
securing the repayment of the loan taken by its directors / promoters in their
individual capacities.

 In case of NRI applicants, guarantor is required when local resident individuals are not
available to join as co-applicants.

6. Processing Fees (PF) :-

 For details on PF and PF related concessions refer to the refer to the latest Schedule of
Charges uploaded on intranet.

 Process to be followed on the dishonor of the processing fee cheque;


 In case the cheque is bounced due to technical reasons, the case may be further
processed by taking approval of the Center Head or Branch Head.

 In case the cheque is bounced due to the reasons of insufficient funds, it indicates lack of
financial discipline. Hence in all such cases, the case should be closed and no further
processing should be done. In exceptional circumstances, SRH/GM-SRA(HO)for RH(DGM)
may approve the further processing of the case by recording justifications.
7. Loan Amount :-

Purpose Min (in Rs.Lakh) Max (in Rs.Lakh)#


Extension 1 100
Top Up Loan 2 100% of the original sanction amt
Improvement loan 5 50
Booking Finance 0.05 10
Second charge/Pari Passu 5 50
IDBI Neev/Neev 2.0 10 500
Other purposes 10 500
Balance Transfer 5 500

1. Deviation: Minimum loan amount – All Borrower Categories

 All purposes- For eligible beneficiaries under schemes promoted by Government with
SRH/RH approval (irrespective of the loan amount)

 Cases under ‘IDBI Neev’ and ’Others’ with loan amount above Rs.5 Lakh & upto
Rs.10 Lakh - On exceptional Basis & based on the merits of the proposal, with the approval
from C GM-SRA

2. Deviation - Maximum loan amount - Salaried/ SEP

 Loan proposals above Rs.500 Lakh and up to Rs.1000 Lakh may be considered on case to
case basis with specific approval from CGM-SRA

3. Deviation - # Maximum loan amount – SENP

The maximum loan amount norms for SE NP borrowers would be as under.


Category A) Cities Likes
Properties located in Mumbai, New Mumbai, Mumbai Metropolitan Region (MMR), Delhi,
NCR, Kolkata, Chennai, Pune, Hyderabad, Ahmedabad, Bangalore.

Loan Amount Approving Authority

Up to Rs.200 Lakh Not Applicable


Above Rs.200 Lakh & below
Rs.300 Lakh C GM-SRA

Above Rs.300 Lakh ED-SRA

Category B) other cities

Loan Amount Approving Authority


Up to Rs.100 Lakh Not Applicable

Above Rs.100 Lakh & below Rs.200 Lakh C GM-SRA

Above Rs.200 Lakh ED-SRA

 For All Borrower Categories-

 Loan proposals above Rs.1000 Lakh not allowed.


 Please note that the loan amount above Rs.500 Lakh is subject to compliance of
guidelines as per internal policy on credit exposure issued from time to time.

 In cases with loan amount of Rs.500 Lakh & above compliance with Legal Audit
policy guidelines dated 05.05.2021 to be ensured.
8. Mode of repayment :-

 Standing Instruction (SI) / Electronic Clearing System(ECS)/ Post Date Cheques(PDCs)


(wherever ECS is not available)

 NRI :
 SI / NACH/ECS from NRE a/c / NRO a/c.
 FCNR a/c may be used for making any lump sum repayment.
 The norms for repayment are subject to RBI guidelines issued from time to time in this
regard.

 Additional two undated security cheques in CTS-2010 format (mandatory and no deviation is
available in this regard).

 All security cheques submitted by the customer at the time of availing the loan and at
the time of change in repayment mandate will be returned only after closure of loan
account

9. Loan To Value (LTV)-applicable for all categories of borrowers :-


Loan Amount Permitted
LTV

Loan up to Rs.30 Lakh 90%

Loan above Rs.30 Lakh and up to Rs.75 Lakh 80%

Loan amount above Rs.75 Lakh 75%

Subject to realisable sales value (valuation by panel valuer) or document value whichever is lower.

Documented Cost Technical valuation

Purchase of new flat


Agreement Value (+) Amenities (40%) (+) Rooftop Valuation by the empanelled valuer
Solar PV + Applicable Taxes (including Rooftop Solar PV) + Applicable
Taxes

Resale

Agreement value + Amenities(40%) + Rooftop Solar Valuation by the empanelled valuer


PV + Applicable Taxes (including Rooftop Solar PV)

Improvement / Renovation /
Extension
Detailed Abstract and Estimate from Regd. Valuation by the empanelled valuer
architect / Engineer (including Rooftop Solar PV) (including Rooftop Solar PV)

Plot +Construction

Plot: Agreement Value + Applicable Taxes Plot :Valuation by empanelled valuer + Applicable Taxes

Construction: Detailed Abstract and Estimate from Construction: Based on the estimate by technical valuer as
Registered architect / Engineer (including Rooftop per submitted sanction plan (including Rooftop Solar PV).
Solar PV).

10. Age-Norms Applicant:-

Applicant

Borrower category Salaried SEP SENP

Minimum 22 yrs. 25 yrs.

Maximum 70 yrs or retirement age, whichever is earlier (subject to


(i.e maximum age at 65 yrs.
loan termination) submission of proof for continuity of
income)
Devation :
 Minimum: Center Head (Manager) and above, subject to borrower/s not being minor.
 Maximum :

a. Salaried : Loan tenor can exceed the date of retirement only if


 repayment capacity gets established beyond the date of retirement or

 Co-applicant i.e immediate legal heir (wife / son) having sufficient income joins the
loan. The term sufficient income refers to compliance of norms pertaining to Net
Adjusted Income (NAI), FOIR and Residual income as per extant norms.
 Up to 70 yrs: Sanctioning Authority

 Up to 75 yrs: SRH/GM-SRA(HO)for RH(DGM).Co-applicant having age within the


standard age norms will be mandatory in such cases.

b. SEP:
 Up to 70 yrs. by SRH/RH
 Up to 75 yrs – SRH/GM-SRA(HO)for RH(DGM) Co-applicant having age within the
standard age norms will be mandatory in such cases Succession plan will not be
applicable in SEP cases.

c. SENP:
 Maximum age of applicant may be relaxed as per devi ations given below subject to
availability of the proper succession plan and income proof. Successor will have to be
mandatorily included as co-applicant to the loan.

 Up to 70 yrs - SRH/RH
 Up to 80 yrs – SRH/GM-SRA(HO)for RH(DGM). Co-applicant having age within the
standard age norms will be mandatory in such cases.
CHAPTER NO.3:

Conceptual
Discussion

3.1 Covid-19 Related Policy Reforms


 Important announcements since the onset of COVID-19 :-

▪ The RBI significantly reduced the repo rate to 4% in May 2020 and
injected a large amount of liquidity of approximately 3.9% of GDP.
▪ With 100 bps cut in CRR, 155 bps cut in reverse repo and increase in
MSF to 3% of net demand and time liabilities, attempts were afloat to
enhance credit flow in the economy and provide banks with increased
access to funds

▪ The RBI deferred the implementation of the last tranche of 0.625 per
cent. of the Capital Conservation Buffer (CCB) from September 30,
2020 to April 1, 2021 and deferred the implementation of Net Stable
Funding Ratio (NSFR) guidelines from September 30, 2020 to April 1,
2021.

▪ A window provided under the Prudential Framework for Resolution of


Stressed Assets Directions 2019 to enable lenders to implement a
resolution plan in respect of eligible corporate exposures without
change in ownership as well as personal loans for borrowers having
stress on account of COVID-19, while classifying such exposures as
‘Standard’, subject to specified conditions

▪ The Union Government of India, in announcements from May 12 to


May 17, 2020, declared a series of measures across sectors as a part
of a Special Economic Package of more than INR 20 trillion – ‘Atma
Nirbhar Bharat Abhiyan’ to mitigate the impact of COVID-19.

3.2 Covid-19 Provisioning by the Bank:-

▪ In accordance with the RBI guidelines relating to ‘COVID-19


Regulatory Package’ the Bank has granted a moratorium on the
payment of installments and or interest, as applicable, falling due
between March 1, 2020 and August 31, 2020 to eligible borrowers
classified as Standard, even if overdue, as on February 29, 2020,
without considering them as restructuring.

▪ The Bank has made a total cumulative provision of Rs. 7.06 Bn which
is more than minimum required as per the RBI guidelines.

▪ Bank has made COVID 19 related provision of Rs 2.47 Bn in March


2020 quarter and Rs 1.89 Bn in June 2020 quarter - cumulative
COVID 19 related provision of Rs. 4.36 Bn as at September 30, 2020).
The provision made by the Bank is more than minimum required as
per the RBI guidelines.

▪ In response to RBI Resolution framework for COVID -19 related


stress, the Bank has made provision of Rs. 2.7 Bn towards the
expected provisioning requirement for cases to be restructured under
the Resolution framework.

▪ An additional provision of Rs. 0.31 Bn has been created under


Provision for Standard Assets and interest of Rs. 0.16 Bn has been
reversed for the overdue interest on the accounts not classified as NPA
as per RBI circular.
CHAPTER NO.4:

Data Analysis

ANALYSIS AND INTERPRETATION

1. IDBI, size of the loan can't be less than Rs 40 million and anything above Rs 200 million will have

to be backed by a completion guarantee IDBI Bank is the leader in the pack, having late last year

decided to double its exposure limit to Rs 2 billion. IDBI, for instance, funds only corporate who
have a track record of three years and insist on a 1:1 debt equity ratio. "We don't deviate from

these lending norms.

Other banks like UTI have entered the fray, but the lending is still extended to select production

houses and the norms are strictly observed.

2. BANK OF INDIA which has financed just Rs 250 million for five movies over a four year

period. Because of its risky nature, bank have an upper ceiling of Rs 50 million per movie,"

3. An early lender into the film business, BANK OF BARODA is extremely cautious about

providing debt to the film sector.

4.) EXPORT-IMPORT BANK OF INDIA (EXIM) has recently agreed to lend $7 million to Crest

Animation Studios.

Tools and Techniques:

As no study could be successfully completed without proper tools

and techniques, same with my project. For the better presentation and right

explanation I used tools of statistics and computer very frequently. And I am

very thankful to all those tools for helping me a lot. Basic tools which I used for

project from statistics are:-

 Bar Charts
 Pie charts
 Tables
Bar charts and pie charts are really useful tools for every research to show the

result in a well clear, ease and simple way. Because I used bar charts and pie charts

in project for showing data in a systematic way, so it need not necessary for any

observer to read all the theoretical detail, simple on seeing the charts any body

could know that what is being said.


Technological Tools:

 Ms- Excel

 Ms-Access

 Ms-Word

Above application software of Microsoft helped me a lot in making

project more interactive and productive. Microsoft-Excel had a great role in my

project, it created for me a situation of “you sit and get”. I provided it simply all

the detail of data and in return it given me all the relevant information.

Microsoft-Access did the performance of my personal assistant

who organizes my all the details of document without disturbing them even a

single time in all the project duration. And in last Microsoft-Word did help me

for the documentation of the project in a presentable form.

Applied Principles and Concepts:

While I started to do the project the main thing which was the

matter of concern was that around what principles I have to revolve my

project. Because with out having any hypothesis and objective we can

not determine that what output or result we are expecting form the

project. And second thing is that having only tools and techniques for the
purpose of project is not relevant until unless we have the principals for

which we have to use those tools and techniques.

o Mathematical Averages
o Standard Deviation
o Correlate

  Sources of Primary and Secondary data:

For the purpose of project data is very much required which works as a food
for process which will ultimately give output in the form of information. So before
mentioning the source of data for the project I would like to mention that what type
of data I have collected for the purpose of project and what it is exactly.
Primary Data:

Primary data is basically the live data which I collected on field while doing

cold calls with the customers and I shown them list of question for which I had

required their responses. In some cases I got no response form their side and than

on the basis of my previous experiences I filled those fields.

Source:

Main source for the primary data for the project was questionnaires which I got

filled by the customers or some times filled me on the basis of discussion with the

customers.

1. Secondary Data:

Secondary data for the base of the project I collected from intranet of the Bank and

from internet, RBI Bulletin, Journal by ICFAI University.

RATIO ANALYSIS

     What is Ratio Analysis?

For most of us, accounting is not the easiest thing in the


world to understand, and often the terminology used by accountants is part of
the problem. “Financial ratio analysis” sounds pretty complicated. The analysis
of the financial statements and interpretations of financial results of a
particular period of operations with the help of 'ratio' is termed as "ratio
analysis." Ratio analysis used to determine the financial soundness of a
business concern.
The term 'ratio' refers to the mathematical relationship between any two
inter-related variables. In other words, it establishes relationship between
two items expressed in quantitative form. According J. Batty, Ratio can be
defined as "the term accounting ratio is used to describe significant
relationships which exist between figures shown in a balance sheet and
profit and loss account in a budgetary control system or any other part of
the accounting management.

   Classification of Ratios:-

Accounting Ratios are classified on the basis of the different parties


interested in making use of the ratios. A very large number of accounting ratios
are used for the purpose of determining the financial position of a concern for
different purposes. Ratios may be broadly classified in to:

· Classification of Ratios on the basis of Balance Sheet.

·   Classification of Ratios on the basis of Profit and Loss Account.

· Classification of Ratios on the basis of Mixed Statement (or) Balance


Sheet and Profit and Loss account.
To meet the objective the study groups ratios and divides
three main parts which are Liquidity Ratios, Profitability Ratios, and Asset
Management Ratios.

 1.   Liquidity Ratio:


Liquidity ratio refers to the ability of a company to interact its assets that is
most readily converted into cash. Assets are converted into cash in a short
period of time that are concerns to liquidity position. However, the ratio made
the relationship between cash and current liability.

a.   Current Ratio:

Current Ratio = Current assets / Current liabilities


 b.   Cash Ratio:

 Cash Ratio = Cash / Current Liabilities

c.    Quick Ratio:

Quick Ratio = (Quick Assets - Inventories) / Quick Liabilities

**Quick Asset = Current Assets - (Stock + Prepaid Expenses)

**Quick Liabilities = Current Liabilities - Bank Overdraft

2.   Profitability Ratio:


Profitability ratios designate a bank's overall efficiency and performance. It
measures how to use assets and how to control its expenses to generate an
acceptable rate of return. It also used to examine how well the bank is
operating or how well current performance compares to past records of bank.

a.    Net Profit Margin:

Net Profit margin = Net Profit / Sales

b.    Return on Common Stock Equity Ratio:


 Return on Common Stock Equity Ratio = Net Income / Common Stockholders'Equity

c.    Return on Total Assets:


Return on Total Assets = Net Profits / Total Assets

3.   Asset Management Ratio:


Asset management ratios are most notable ratios of
financial ratios analysis. It measure how effectively any organization uses and
controls its assets. It is analysis how a company quickly converted to cash or
sale on their resources. It is also called Turnover ratios because it indicates the
asset converted or turnover in to sales.

a.    Current Asset Turnover Ratio:


Current Asset Turnover Ratio = Sales / Current Assets

b.    Total Asset Turnover:

Total Asset Turnover = Sales / Total Assets


c.    Debt Equity Ratio:

Debt Equity Ratio = Total Liabilities / Total Shareholder’s Equity

1.  Cash Ratio:


 

Cash Ratio =

Showing the Bank's Cash Ratio

Cash Current Ratio


Year Liabilities

(A) (B) (A/B)

2015- 33,686.09 3,29,103.91 0.1024


16

2016- 32,684.08 3,39,204.26 0.0964


17

2017- 16,580.54 3,46,650.34 0.0478


18
Quick Ratio
1.2000

1.0000

0.8000

0.6000

Ratio (A/B)
0.4000

0.2000

0.0000
2015-16 2016-17 2017-18

 INTERPRETATION:

Above table presents Quick Ratio of three years from


2016 to 2018. In the above ratios the bank’s quick ratio (acid test ratio) of
2016 is 1.0454, 2017 is 1.0464 and 2018 is 1.0597 it shows us that bank
liquidity increasing positive growth year by year.

2. Current Ratio:

Current Ratio =

Table Showing the Bank's Current Ratio


Current Assets Current Liabilities Ratio
Year (A) (B) (A/B)
2015-16 3,44,044.55 3,29,103.91 1.0454
2016-17 3,54,958.96 3,39,204.26 1.0464
2017-18 3,67,349.00 3,46,650.34 1.0597
Current Ratio
1.2000

1.0000

0.8000

0.6000
Ratio (A/B)
0.4000

0.2000

0.0000
2015-16 2016-17 2017-18

 INTERPRETATION:

Table 6.1 presents Current Ratio of three years from 2016 to 2018. In
the above ratios the bank’s current ratio of 2016 is 1.0454, 2017 is
1.0464 and 2018 is 1.0597 it shows us that bank’s current ratio is
increasing positive growth year by year.

3.Quick Ratio:

Quick Ratio =
QUICK RATIO

Table Showing the Bank's Quick


Ratio

Year Quick Assets Current Liabilities Ratio

  (A) (B) (A/B)

2015-16 3,44,044.55 3,29,103.91 1.0454

2016-17 3,54,958.96 3,39,204.26 1.0464

2017-18 3,67,349.00 3,46,650.34 1.0597

Quick Ratio
1.2000

1.0000

0.8000

0.6000

Ratio (A/B)
0.4000

0.2000

0.0000
2015-16 2016-17 2017-18

 INTERPRETATION:
Table 6.3 presents Quick Ratio of three years from 2016 to 2018. In the
above ratios the bank’s quick ratio (acid test ratio) of 2016 is 1.0454, 2017
is 1.0464 and 2018 is 1.0597 it shows us that bank liquidity increasing
positive growth year by year.

4. Return on Total Assets:


 

Return on Total Assets Ratio =

RETURN ON TOTAL ASSETS

Table 6.6 Showing the Bank's Return on Total


Assets Ratio

Net Profit Total Assets Ratio


Year

(A) (B) (A/B)

2015-16 16,730.31 3,50,313.63 0.0478

2016- 7,985.42 3,61,767.92 0.0221


17

2017- 2,752.61 3,74,372.14 0.0074


18
Return on Total Assets
0.0600

0.0500

0.0400

0.0300
Ratio (A/B)
0.0200

0.0100

0.0000
2015-16 2016-17 2017-18

 INTERPRETATION:

Table 6.6 presents Return on Asset Ratio of three years from 2016
to 2018. In the above ratios the bank’s return on asset ratio of 2016
is 0.0478, 2017 is 0.0221 and 2018 is 0.0074 it shows us that bank
profitability is not satisfactory because it’s decreasing year by year.
CHAPTER NO.5:

Findings, Conclusion
and Suggestions

PROJECT Findings:
 From this project it is found that IDBI advance product having the 1 st
place in the market at Tuljapur, there is a great opportunity to
compete with ICICI Bank & to retain its customer by fulfilling the
requirement of customer in IDBI advance product.
 It has been observed that approximately 85% correspondents are
using advance product of IDBI and 15% are not using any type of
advance product of IDBI in Tuljapur.
 All of IDBI customers are satisfied with the services provided by the
bank.
 Many of these customers satisfied with the low interest rate and
longer repayment period of the advance product.
 Most of the customers at Tuljapur prefer to take loan from IDBI.
 Approximately 43% of advance product users said that the service of
IDBI in advance product is excellent.
 A response from customer care is so clear & good.
 Many customers have no time to call customer care so that they are
not able to know about the service & features of IDBI advance
product.
 Most customers are shifted from other bank’s advance product to
IDBI because of hidden charges, high interest rate, less repayment
period.
 Government employees are more concern than private employees for
advance product.

REASONS FOR HIGHLY USE OF IDBI ADVANCE PRODUCT:


 LESS PAPER WORK
 ATTRACTIVE INTEREST RATES
 TRANSPARENCY
 SIMPLE & FAST PROCESSING
 LONGER REPAYMENT PERIOD
 QUICK PROCESSING

Suggestion & Recommendation

Recommendation:

 Customer awareness program is required so that more people should


attract towards advance product.
 If there are any kind of hidden charges than that must disclose to
customer before giving loan to them.
 IDBI must take some steps so that customers can get their loan in
time. Like phone verification by customer care that one customer is
got their loan on time or not .It must be before a certain date so
necessary steps can be taken.
 IDBI should more concern about physical verification rather than
phone verification so it will avoid fraud or cheating.
 Advance product selling agents must not give any type of wrong
information regarding advance product.
 For the better service new offers would be require.
 IDBI customer care should more concern about the fastest settlement
of customer problems.
 Before deducting or charging any monetary charge IDBI must consult
with customer.
 Agents should be trained, well educated & proper trained to convince
the people about different advance product.
 It is the duty of the bank to disclose all the material facts regarding
advance product, like interest charged, repayment period, other types
of charges, etc.
 Special scheme should be implemented to encourage both customer
and agents.
 The bank should increase the period for repayment of loan.
 IDBI should more focus on Retaining existing customers.
 IDBI must focus on Segmentation based on customer knowledge
Product offering based on customer demand.
 IDBI must take feedbacks of customers regarding features &
services.

Suggestions given by the consumers at the time of survey:


 There is more time period for repayment of education loan.
( Pruthviraj Kadam)

 Education loan should be providing to private college also which is not


under AICTE or any kind of University.
( Sarvesh Shinde )

 IDBI should take steps to solve customer problems immediately.


( Swapnil Jagtap)

 Agents should be trained, well educated & proper trained to convince the
people about different advance product.
 Loan sanction date should be according to customer convenient.
(Shantanu Patil)

 A customer awareness program should be taking place in rural area.


(Rishikesh Kewedkar)

Conclusion

From the analysis part it can be conclude that customers have a good respond
towards IDBI advance products in Tuljapur. IDBI is in 1 st position having large
number of customers & providing good services to them. The bank has a wide
customer base, so the bank should concentrate on this to retain these customers.

In present scenario IDBI is the largest advance product issuer in India. Within a
very short period of time the achievement made by IDBI is excellent, what a
normal bank cannot expect, but it is being done by IDBI. It happens due to
employee dedication towards the organization, fastest growing Indian economy,
& brand image.

To be the largest advance product issuer, IDBI should focus on-

 Launch Innovative product


 Customized advance products
 Better customer services
 Fastest customers problem solving techniques
 Customer retention
Apart from all the above, IDBI believe in providing good customer services to their
customers which is a key factor for success in future.

Reference & Bibliography:

www.idbibank.com
www2.idbibank.com

www.google.com

The Times of India

Appendix
NAME………………………………………………………………………………

AGE……………………………………. SEX: MALE/FEMALE

CITY………………………………………PIN CODE………………………………....

CONTACT NO. …………………………………………………………………………

Email-ID.......................................................................................................

1. How long have you been associated with IDBI Bank Ltd?

1.1 Years 1-5 Years 5-10 Years Above 10 Years

2. Which services have you availed from the Bank?

Savings Current Fixed Deposits Loans Investment

3. Are you currently

A Student Service Self Employed Retired HouseWife


Businessman

4. How do you rate the services of the Bank?

Excellent Very Good Good Satisfactory Needs Improvement

5. IDBI bank ltd. is a good bank for-

Service people Business persons


Politicians General public

All of above

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