ADISSERTATION REPORT

On“A STUDY OF CREDIT APPRAISAL PROCESS WITH REFRANCE TO ”

“CO-OPPRETIVE BANK ,SANGAMNER”SUBMITTED TO

“SAVITRIBAI PHULE UNIVERSITY OF PUNE”IN PARTIAL FULFILLMETNT OF

“MASTER OF BUSINESS ADMINISTRATION”BY

MISS:DURGA KISAN KHAIRNAR(M.B.A) FINANCE

UNDER THE GUIDANCE OFPROF.L.D. SHAH

AMRUTVAHINI INSTITUTE OF MASTER OF BUSINESS ADMINISTRATION(2014-15)

IntroductionI have great pleasure in presenting my project report. The subject of my project is is in “A STUDY OF

CREDIT APPRAISAL PROCESS WITH REFRANCE TO AMRUTVAHINI SAH. BANK LTD. GHULEWADI SANGAMNER & MERCHANT CO-OPPBANK SANGAMNER. completion of this subject Today the base of the country economic development and trade is depending upon banking and credit structure of economy.

The financial structure is the foundation of credit and capital market of the economy. Which solely depend upon the banking business in the country. The basic foundation at any bank is its deposit patterns and Advances come from the deposits which the public keeps in the bank always in a particular ratio and proportion, no bank can grant loan more than its deposit structure. The some technique of loan and Advances in applied all over the word.

• Cash Credit

• Over Draft

• Loan System

Short Term Loan

Medium Term Loan

Long Term Loan

Composite Loan

Consumer Loan/ Consumption Loan

Service Provided By Bank-

A. Loan Distribution

B. Deposit

C. Issue Demand Draft

D. Saving Account

E. Current Account

LETERETURE REVIWE Credit analysis

Credit standard are the criteria which a firm follows in selecting customer for the purpose of credit extension . Credit standards influence the quality of the firms customers there are two aspects of the quality of customers 1) the time taken by customer to repay credit obligation 2) the default rate. The average collection period determine the speed of payment by customer

Financial managementI.M Pandey

Credit scoring One way in which both individual and firm are often evaluated as

a credit risk is the through the use of credit scoring. Credit scoring involved numerical evaluation of each applicant and applicant receives a score based on his or her answer to a simple set of questions

Financial management Keown, martin,petty.scott, jr .

BANK PROFILEShri bhausaheb thorat amrutvahini sah. bank ltd.

NAME OF BANK:-shri bhausaheb thorat amrutvahini sah. bank ltd. ghulewadi,

sangamner.

RAGISTAR NO :- Anr/Smr/Bnk/1207-83

ESTABLISHMENT IN :- 28th July 1983.

ADDRESS:- A/P ghulewadi tal. sangamner , dist –a. Ahmednager.

MANAGER:- Laxman S. Wagh

NUMBER OF MEMBERS:-5659

MERCHANT BANK:-

NAME OF BANK:- The sangamner merchant Co-operative LTD.

ADDRESS:-Indira Gandhi marg p.b no.13, sangamner, dis- Ahmednager.

RAGISTAR NO:- 26/11/1965,ANR/BNK-107 Date & No of R.B.I. license :18/08/1986

U.B.D. MH 500P.

ESTABLISHMENT IN: - 26/11/1965.

MANAGER:-Ravindra joshi

RESEARCH METHODOLOGYMEANING OF RESEARCH

Research as a process involves defining redefining problem hypothesis, formulation, and

organizing, and evaluating data, deriving, inference and conclusion after careful tested.

COLLECTION DATA

Data means facts. Data are those things from which conclusion may be drawn in the form of

figures or in words

Collection of data is essential part of research. The task of data collection start after the objective

of the study and research design had been decided in red to measure properties. I collected

secondary research data

A) PRIMARY DATA

1. Observation Method

2. Questionnaire & Interviews

3. Library Methods

B) SECONDARY DATA

In this project secondary data are use through

a) Books

b) Internet

c) Record available at bank.

OBJECTIVE OF STUDY1. To study Concept of Credit appraisal?

2. To know what are the documents required for different types of loans?

3. To know the process of credit appraisal.

4. To study the NPA of shri bhausheb thorat amrutvahini bank & The sangamner merchant co-op Ltd, sangamner

THEOROTICAL BACKGROUNDCREDIT APPRAISAL

Credit appraisal means an investigation/assessment done by the bank prior before providing any loans &advances/project finance & also checks the commercial, financial & technical viability of the project proposed.

Proper evaluation of the customer is preferred which measures the financial condition & ability to repay backthe loan in future

Credit appraisal is the process of appraising the credit worthiness of the loan applican

DOCUMENTATION DETAILS

1) PROOF OF INCOME

I. Salaried

II. Latest salary slips for the last 2 months.

III. Self-employed

2.) RESIDENCE PROOF

I. Telephone / Electricity bill.

II. Ration card

III. Driving License

IV. Passport

V. Rent agreement

3.) IDENTITY PROOF

I. Passport size photograph

II. Copy of Driving License / Company identity card/ PAN card clearly showing Photo of customer.

III. post dated cheques

CREDIT APPRAISAL PROCESSReceipt of application from applicant

|Receipt of documents

(Balance sheet, KYC papers, Different govt. registration no., MOA, AOA, and Properties documents)|

Pre-sanction visit by bank officers|

Check for RBI defaulters list, willful defaulters list|

Title clearance reports of the properties to be obtained from advocates|

Valuation reports of the properties to be obtained from valuer/engineers|

Preparation of financial data|

Proposal preparation|

Assessment of proposal|

Sanction/approval of proposal by appropriate sanctioning authority|

Documentations, agreements, mortgages|

Disbursement of loan|

Post sanction activities such as receiving stock statements, review of accounts, renew of accounts, etc (on regular basis)

DATA ANALYSIS

PARTICULER(YEAR 2014)

MERCHANT CO-OP BANK ( Rs in lac)

AMRUTVAHINI CO-OP BANK (Rs in lac)

DEPOSITS 22315.49 16991.887

LOAN 14396.49 9578.63

NPA 0.00% 4.64%

PROFIT 125.78 45.63

FINDING1. Credit appraisal is the process of knowing credit worthiness of

customer2. Merchant bank having maximum deposit & loan as compare to

amrutvahini bank its indicate merchant bank effectively used deposit and give loan to Customer.

3. Deposit and loan of merchant bank increase year by year its reflect that bank expand the business effectively. And people having good trust and paid high interest to the depositor.

4. The NPA of bank is decrease year by year. Bank work on maintain low NPA and its work on recover the outstanding

5. The NPA of amrutvahini bank is higher than merchant bank its shows the credit appraisal of amrutvahini bank is not much better and they cannot recover overdue

6. Because of high NPA amrutvahini bank doing more provision for NPA and its reduce the profitability of bank

ConclusionWith a view to move towards international best practice and ensure greater transparency, it has been decided to adopt the 90 days’ overdue’ norm for identification of NPAs, from the year ending March 31, 2004.

1.) Credit appraisal is the internal bank process which is necessary to conduct for every bank for loan distribution.

2.) RBI has put the compulsion on every bank to do credit appraisal for avoid NPA of a bank.

3.) Credit appraisal is the process of measure credit worthiness of borrower and NPA is a scale to measure the durability and creditability as well as goodwill of a bank.

4.) we can understand the banks position by looking at its graph such as profit, advances, Recovery, Deposits.

5.) Its important to amrutvahini bank to understand various steps taken by the merchant bank to manage the NPA level, knowledge about RBI norms for NPA

.6.) if and accounts becomes NPA what are the various measures for recovery taken by the merchant bank.

SUGGESTION1) Positive attitude should be developed by the operation staff to attract

more customers.2) Minimum documents to be asked for sanction. Amrutvahini bank can

follow the credit appraisal process of merchant bank3) Frequent training to the staff should be imparted to update the

knowledge and get feedback from borrower4) The amrutvahini Bank should try to maintain low NPA so its help for

generate more profits to satisfy the equity share holders5) The bank should try to increase the market value of shares through

efficiency & effectiveness.6) Keep maintain low NPA rate as per direction of reserve bank of India.

And follow all rules and guideline as per RBI

THANK YOU