A DISSERTATION REPORT ON Customer Satisfaction regarding consumer loan with special reference to PUNJAB AND SIND BANK

Submitted To:
MR. NAVEEN CHHABRA

Submitted By:
RAJ KISHOR CHAND

UTTRANCHAL INSTITUTE OF MANAGEMENT DEHRADUN

ACKNOWLEDGEMENT
It gives us immense pleasure to present this report, a written form of the practical experience we have undergone. We want to utilize this opportunity to express our heartfelt gratitude to all those who helped us in making this project work a success. We are greatly indebted to them for taking great pains in guiding us. We shall be failing in our duty if we do not convey our sincere thanks to our teacher MR. NAVEEN CHHABRA, for inspiration and guidance about Research Methodology.

(RAJ KISHOR CHAND)

EXECUTIVE SUMMARY
Today, banks are an integral part of any country. These banks are globally embracing technology in the areas of products and services. In our developing country everything is changing very fast. In order to fulfill the changing needs depository system was introduced in Indian market too. The banks with their vast network occupy a very strategic position in the financial system and have an important role to play in providing credit to customers. This report discusses various aspects related to consumer loan like the procedure for availing loan, various documents required, eligibility criteria, customer satisfaction regarding consumer loan schemes. It also covers different types of frauds in the area of consumer finance. The subject has been discussed with special emphasis on Punjab and Sind Bank. An attempt has been made to make it a genuine study but there are some chances of mistakes.

OBJECTIVES OF THE STUDY

1. To study the procedure of availing Consumer Loan. 2. To study the customer satisfaction regarding Consumer Loan. 3. To study Consumer Loan scheme offered by Punjab and Sind Bank. 4. To know different kinds of frauds pertaining to Consumer Loan.

RESEARCH METHODOLOGY
PROJECT DEFINITION
A loan is debt instrument that entails the redistribution of financial assets over time, between the lender and the borrower. Acting as a provider of loans is one of the principal task for financial institutions. Banks loans are generally funded by deposits. This project is an attempt to study consumer loans schemes offered by Punjab and Sind Bank and level of customer satisfaction regarding these schemes.

RESEARCH DESIGN
A research design is a conceptual structure within which research is conducted. A descriptive research study is done, which is concerned with describing the characteristics of a particular individual or a group.

SAMPLE DESIGN
i. Population To study the satisfaction of customers regarding consumer loans the customers of Punjab and Sind Bank who have availed consumer loan up to Rs. 5, 00,000 constitute my universe. ii. iii. Sample Size Sample size for the study is 30 Consumer loan customers of the bank. Sampling Technique In this study Judgment Sampling technique has been used to draw sample from universe.

DATA COLLECTION DESIGN

i. Sources of Data Both primary and secondary source of data has been used to collect information. Primary data was collected of Punjab and Sind Bank, Sector 17-C, Chandigarh. The data explained about different products/services being offered by their bank. Questionnaire was prepared to study the customers satisfaction regarding Consumer Loans schemes offered by the bank (questionnaire is attached as annexure and interpretation is given). Secondary data was collected by making extensive use of the internet. The data was also collected from various books, journals, publications and annual report of the bank. ii. Technique of Data Collection Data was also collected by personally interviewing the customers of the bank and through questionnaire.

DATA ANALYSIS AND INTERPRETATION

In order to extract meaningful information from the data, analysis of the data was done. Analysis was done by using certain statistical tools like bar graphs, pie-charts, percentage and from these analysis interpretations were drawn.

SCOPE OF STUDY
There are four types of banks operating in India. These are: Public sector banks Private sector banks International banks Co-operative banks Under these categories there are a number of banks. For the purpose of this project, we have chosen The Punjab and Sind Bank, which is a public sector bank and provides many facilities to the customers.

LIMITATIONS OF THE STUDY

The project suffers from the following limitations: 1. Consumer loan customers of only Punjab and Sind Bank have been considered. 2. The sample size is small, i.e. only 30consumer loan customers of Punjab and Sind Bank were interviewed. 3. The concerned officers were at times not easily forthcoming with the detailed information. 4. Many a time the data collected from various sources was contradictory. 5. Customers are not ready to give detailed information about them.

CONCEPTUAL FRAMEWORK OF BANKS

BANKS
In modern age, banking constitutes the fundamental basis of economic growth. Earlier the function of bank was restricted to accepting deposits and advancing loans to the general public. But now the definition of bank has changed. It refers to an institution that deals in money. Besides dealing in money, banks these days perform various other functions like credit creation, agency function, general service, etc. Banks can now be called the nerve-centre of the countrys capital market, industrial as well as trading activities

ROLE OF COMMERCIAL BANKS

Banking system of an economy contributes a great deal in the process of its economic development. The commercial banks play a significant role in the economic development of the country. They collect idle savings of the people and invest them into productive activities. Therefore they help in accelerating the process of capital formation. Banks also take part in capital markets by providing long term advances and finance to the industry, agriculture, small scale industries, exporters, traders, etc. Commercial banks provide service to the economically backward areas. In ancient times the scope of banks was limited to the system which involved the payment of an amount of money by draft and the demand of money. The only function of the banks was to lend money and charge something for the same. Now it does not refer only to a particular place of lending and depositing money but it also acts as an agent which looks after various financial problems of its customers.

FUNCTIONS OF MODERN BANKS

Commercial banks are involved in diversified activities and perform varieties of functions like: Accepting deposits (saving bank deposits, current deposits, fixed deposits) Advancing of loans (overdrafts, loans, cash credits, discounting bills)
Agency services which the modern banks render to the individuals or

to the business institutions as an agent. Banks usually charge little commission for providing these services. It also provides other services like issue of personal and commercial letters of credit, help in the transactions of foreign exchange business.

BANKING IN THE HIGH TECH ENVIRONMENT

At a time when banking all over the world is undergoing a radical transformation due to all pervasive use of information technology then it must respond to the fast changing needs of the financial system and should also become proactive and play the role of a Change Agent and bring about a Skill Revolution in the banking industry.

Change in Financial System

Financial markets throughout the world have witnessed changes during the past two decades. Deregulation and liberalization in the financial sector have stimulated financial innovations. Breathtaking developments in the technology of telecommunications and electronic data processing have further accelerated these changes. As a sequel to these changes the difference between banking and non-banking institutions have become very thin. In the changed millennium the functioning of the financial markets has given rise to some concerns. There is a fear that the state of the financial markets is now more risky than in the past. In a technologically integrated world the chances of systematic risk increases and because of the intense

competition that the banks have to face, both as a result of the growth of the non banking financial institutions as well as securitization , it is feared that the quality of the bank loans may have suffered.

IT and Banking
The new technology has altered the traditional ways of doing business. Customers can view accounts, get account statements, transfer funds, purchase drafts by making just a few keypunches. Availability of ATMs and plastic cards to a large extent avoid customers going to branch premises for cash. The networks have helped to automate the funds transfer thus resulting in a more efficient payment system. Today, the transactions of all banks have been fully computerized and the banks have moved into the direction of inter-branch and inter-bank connectivity. In effect the banking industry is finding its use in five key areas: Convenience in product delivery and access. Managing productivity and performance. Product design. Adapting to market and customer needs. Access to customer markets. For the Indian banking sector these developments are of real interest.

NEW CHALLENGES FACING BANKS

The functions of banks will increase under competitive pressure. These may emanate from within the banking system as well as from non banking institutions. A greater overlap in product coverage between commercial banks and non-banking intermediaries will occur. Thus, both on the liability and assets sides, banks will face increasing competition. Banks should be willing to offer products to savers, which are competitive in terms of both price and service. On the lending sides the effort of the corporate to seek directly from the market will also have an impact on the asset distribution of banks. Competition will also compel banks to keep the interest spread to minimum and this context bank can earn enough for them only by reducing the proportion of non performing assets. Banks will also have to pay attention to market segmentation and greater specialization in different niches of the markets.

BANK PROFILE
History of the Bank
In 1908, luminaries like Bhai Vir Singh, Sir Sunder Singh Majithia and Sardar Tarlochan Singh came up with the idea of establishing Punjab and Sind Bank for the up-liftment of the weaker section of the society. The bank was founded on the principle of social commitments to raise the standard of living of the poor. It was started as a single branch in Hall Bazaar, Amritsar. Decades have gone by; even today Punjab and Sind Bank stands committed to honour the social commitments of the founding fathers. To start with the bank had its branches in Gujranwala, Lahore, Rawalpindi and Layalpur. The bank extended its helping hands to Punjabis. The bank also contributed its rights to serve social cause. The bank helped many educational institutes to come up. The bank also worked for growth of Punjabi language and Punjabi culture. The partition of the country in 1947 caused a heavy loss to the Punjabis in general and Punjab and Sind Bank in particular. Out of the total ten branches which the bank had in undivided Punjab, eight were in the area now forming part of Pakistan. Only two branches namely registered office at Amritsar and another branch at Ludhiana were in India. The head office of the bank tried its best to recover the valuable from branches left in Pakistan but unfortunately nothing substantial could be salvaged. The period from 1968 to 1978 could truly be called a golden era of Punjab and Sind Bank. This was a period of rapid growth and achievements. In this decade, the bank achieved tremendous results in all spheres banking. From a meager figure of Rs. 5.39 crores of deposit in 1968, the bank touched the mark of Rs. 150.31 crore in 1975 in a single year and number of branches increased to 356 besides six extension counters. The bank continued unabated on its branch expansion programme and in the year 1979 alone the bank opened 81 new branches. The bank opened 400th branch on 17th December 1976 at Amritsar, the city where the bank

was founded in 1908. The bank which was operation mainly in the state of Punjab and in a small way in Delhi, Uttar Pradesh and Haryana, spread its wings all over the country. The bank had also opened its branch in South Hall, London in May 1977. This was a matter of pride for the institution that it was amongst the first in private sector banks who were allowed by RBI to open an office there. On 16th April 1980, the bank was nationalized along with five other banks.

VISION AND MISSION

Corporate Vision
We envision to emerge as a strong vibrant Bank through the implementation of effective Risk Management and Internal Control Systems for making appreciable contribution to the needs of the economy in agriculture, industrial as well as service sectors through synchronizations of the human, financial and technological resources.

Corporate Mission
To put in place the effective Risk Management and Internal Control Systems. To adopt and operationalise high-level technology standards. To strive to achieve excellence in Customer Service. To achieve the highest standards of transparency and accountability in the conduct of banking business. To adopt professional approach in effectively managing financial as well as non-financial risks. To maximize profitability and profits of the Bank with due compliance of prudential guidelines. To maximize competitive risk adjusted

Branch Network
The corporate office of the bank is located at Rajendra Palace, New Delhi. There are a total of 19 Zonal Offices scattered all over India. The bank has a vast network of 813 branches and 78 extension counters spread in every nook and corner of the country. Five of the total branches are ISO 9001:2000. All the branches are manned by a dedicated workforce totaling around 9778 personnel. Being a Punjab based bank, it expanded very rapidly in Punjab with approximately 40% of the branches located within Punjab. In
line with the spirit of liberalization, the Bank is laying special stress on International Banking Divisions, Merchant Banking, Hire Purchase and Leasing, Telebanking & Credit Card.

Total Branches Ten Years at a Glance

900

850

800

887
750

890

891

700

691
650

700
20 00 -0 1

704
20 01 -0 2

711

726

736

746

19 99 -0 0

20 02 -0 3

20 03 -0 4

20 04 -0 5

20 05 -0 6

20 06 -0 7

20 07 -0 8

SOURCE: - www.psbindia.com

20 08 -0 9

Organization Chart

Chairman cum Managing Director Executive Director General Manager Deputy General Manager Assistant General Manager Chief Manager Senior Manager Manager Officers Clerks (Workmen and Staff)

Management of Punjab and Sind Bank

SHRI R.P. SINGH - Chairman & Managing Director SHRI G S MATTA - Executive Director
DIRECTORS SHRI N.S. VISHWANATHAN (CGM, Reserve Bank of India Mumbai) SARDAR AVTAR SINGH MANN (Officer's Director) SARDAR MOHAN SINGH SEKHON (Workman Employee Director) MAJOR MISS KRISHNA MOHINI SHRI HARCHARAN SINGH JOSH SHRI UMESH KUMAR SHARMA NON- OFFICIAL DIRECTORS SHRI K.K. SHARMA MRS. KAMAL MANN GENERAL MANAGERS SARDAR GAJINDER SINGH SARDAR MANJIT SINGH SARANG SARDAR JASPAL SINGH SARDAR DAVINDER SINGH SARDAR G.S. VEDI SARDAR UPKAR SINGH SARDAR J. S. KATHURIA SHRI R. L. SHARMA (Posted at H. O.) (Posted at Chandigarh, Local H.O.) (Posted at H.O.) (Posted at H.O.) (Posted at H.O.) (Posted at H.O.) (Posted at H.O.) (CVO, New Delhi)

BALANCE SHEET 2009

( 000's are omitted )

CAPITAL & LIABILITIES CAPITAL RESERVE & SURPLUS DEPOSITS BORROWINGS OTHER LIABILITIES AND PROVISIONS TOTAL ASSETS CASH & BALANCES WITH RESERVE BANK OF INDIA BALANCES WITH BANKS & MONEY AT CALL AND SHORT NOTICE INVESTMENTS ADVANCES FIXED ASSETS OTHER ASSETS TOTAL CONTINGENT LIABILITIES BILLS FOR COLLECTION

As on As on As on 31/03/2009 31/03/2008 31/03/2007 7430560 2,430,560 2,430,560 4791310 1,973,002 2,235,371 169245806 14,170,657,9 13,64,20,316 1947 3,318,5 1,00,683 8960756 11,031,833 89,26,983 190430379 157,175,159 15,01,13,913

8336716 13133936

9,472,224 1,06,71,693 7,374,930 45,93,267

69555984 70,815,764 6,77,65,937 91074702 63,222,179 6,03,00,142 2842223 641,803 6,32,754 5486818 5,648,259 61,50,120 190430379 157,175,159 15,01,13,913 28898009 20,644,016 1,83,48,507 5412000 4,782,039 4,784,994

PROFIT & LOSS 2009

Year ended March 31,2009 INCOME Interest Earned Other Income Total EXPENDITURE Interest Expanded Operating Expenses Provisions and Contingencies Total PROFIT/LOSS Net Profit/Loss for the year Profit/Loss (-) brought forward Withdrawal from Investment Fluctuation Reserve Withdrawl from Leave Encashment Fund Total APPROPRIATIONS TRANSFER TO: Statutory Reserves General Reserve Capital Reserve (Investment) Investment Fluctuation Reserve Deferred Tax Liability Staff Welfare Fund Balance carried over to Balance Sheet Total 275000 96100 10478 110000 11000 10000 104551 617129 0 Nil 0 Nil 0 -466,122 -466,122 30,000 Nil 1,62,051 Nil 2,664 244,511 4,39,226 1083251 -466122 0 0 617129 -710,633 244,511 0 0 -466,122 88,857 3,13,318 12,051 25,000 4,39,226 6689881 4829887 1902518 13422286 6,758,990 5,709,571 3,289,290 15,757,851 78,51,836 59,95,911 14,07,208 1,52,54,955 12995549 1509988 14505537 Year ended Year ended March 31,2008 March 31,2007 12,485,831 2,561,387 15,047,218 1,27,85,011 25,58,801 1,53,43,812

Performance and Achievements

The total business of the Bank was up by 26% as on 31, March 2009. The bank earned a Net Profit of Rs.108.32 Crore in the last fiscal year. The total advances of bank were up by 40.53%. The total deposits of bank were up by 19.43% The total NPAs were down from 8.11% to 2.43%. It is the first bank in Northern India to get ISO 9002 certification for our selected branches. In the spirit of liberalization, the bank lays special stress on international banking, merchant banking, hire purchase, leasing, tele-banking and credit cards.

SERVICES OFFERED BY PUNJAB AND SIND BANK

EDUCATION LOAN
The high cost of education in premier institutions need no longer stand between you and your career aspirations. While you plan your education in world class universities, Punjab and Sind Bank takes care of all the expenses. The education loan scheme aims at providing financial support on reasonable terms from the banking system to deserving/meritorious students for pursuing their higher education in India and abroad. The main emphasis is that every meritorious student, though poor is provided with an opportunity to pursue education with the financial support from the banking system with affordable terms & conditions. No deserving student is denied an opportunity to pursue higher education for want of financial support.

In short, the scheme aims at providing financial assistance on reasonable terms: To the poor and needy to undertake basic education. To the meritorious students to pursue higher/ professional/ technical education. The total amount of loan that you can avail is Rs. 7.5 lacs for studies in India and Rs. 1.5 lacs for studies abroad.

Eligibility:
Should be an Indian National. Should have secured admission to professional/ technical courses through entrance test/ Merit Based selection process. Age above 18 years.

CONSUMER LOAN
Consumer loans help you to take care of your immediate requirements without much of a hassle. The most attractive feature of the consumer loan is that you do not have to give any kind of security to avail this loan. No collaterals, only hypothecation of assets to be created. The maximum amount of consumer loan for which you are eligible depends upon the net salary you take home. Loans are repayable in Equal Monthly Installments (EMIs).Loan tenure varies from 1 to 5 years. Punjab and Sind Bank offers a broad range of consumer loans to meet the customers specific needs and situations. Punjab and Sind Bank consumer loans are hassle free, quickly approved and are on very attractive interest rates. Consumer loans are given for the purpose of consumer durables and vehicles.

Eligibility:
Employees of central/state government or a public limited company Self employed professional. Age between 21 and 55 years.

HOME LOANS
Building our own home is one of the most important decisions that we make in our life. It provides an impetus in our lifestyle and provides financial security. Punjab and Sind Bank offers home loan with appropriate Equated Monthly Installments (EMIs) with regard to customer as well as home loan executive. It is simple and quick in processing with easy payment terms and interest rates are very attractive.

Eligibility:
Qualified professionals and self employed persons having assured source of income. Person employed in Central Government/ State Government undertakings are covered under the scheme. An owner of an existing house/flat which is free from encumbrance and can be mortgaged with bank.

AUTO LOANS
Punjab and Sind Bank auto loans are fast, cost efficient and user friendly. Some of its features are: Simple and quick in processing Personalized services Easy terms of service Attractive interest rates Finance is available on all models and makes

Eligibility:
Salaried individual Self employed/sole proprietor Partnership firm Private or public limited companies

TWO WHEELER LOANS

Punjab and Sind Bank offers two wheeler loans which are economical, friendly and offer easy installment options. Under two wheeler loans only scooter and motor cycles are financed. Finance is offered up to specified percentage of the price of product and rest is paid as margin by borrower himself. The loan can be repaid in a period ranging from 1 to 3 years.

Eligibility:
Minimum 18 years of age and less than 60 years of age at the time of completion of loan.

Minimum gross income of Rs.3000 per month (in case of scooter) and
Rs. 4000 (in case of motor cycle)

SECOND HAND CAR LOANS

Punjab and Sind Bank offers a prompt, cost efficient and simple second hand car loan scheme. The applicant should have an earning capacity of Rs. 50,000 per annum. The repayment period ranges from 1 to 4 years.

Eligibility:
Salaried individual Self employed/sole proprietor Partnership firm Private or public limited companies

FOREIGN EXCHANGE
Preparing for an overseas trip for a first time or a seasonal traveler is always full of anxiety and last minute chores to be tied up for the occasion. And in the middle of it all is the task of arranging ones foreign exchange, which should come at a fair exchange rate and in the right denomination and currency. Punjab and Sind Bank bouquet of services now covers foreign exchange services too, that is almost like handling your boarding pass. The bank has setup a special division that dedicatedly looks into monitoring and dispersing the best exchange rate, arranging multiple choices of currencies and traveler cheque.

Payment terms:
All payments should be received in advance Payment against sale of currencies and traveler cheque can be received in the form of cash or through bankers cheque for draft issued by the debit from customers bank account.

CONSUMER LOAN OFFERED BY PUNJAB AND SIND BANK

CONSUMER LOAN
A loan is debt instrument that entails the redistribution of financial assets over time, between the lender and the borrower. The borrower initially receives an amount of money from the lender, which they pay back, usually but not always in regular installments, to the lender. This service is generally provided at a cost, referred to as interest on the debt. Acting as a provider of loans is one of the principal task for financial institutions. Bank loans are generally funded by deposits. For other institutions issuing of debt contracts, such as bonds is a typical source of funding. Consumer loans is a loan that establishes consumer credit that is granted for personal use, usually unsecured and based on the borrowers integrity and ability to pay. It helps you to take care of your immediate requirements without much of a hassle. The most attractive feature of the consumer loan is that you do not have to give any kind of security to avail this loan. No collaterals, only hypothecation of assets to be created. The maximum amount of consumer loan for which you are eligible depends upon the net salary you take home. Loans are repayable in equal monthly installments (EMIs). Loan tenure varies from 1 to 5 years. Punjab and Sind Bank offers a broad range of consumer loans to meet the customers specific needs and situations. Punjab and Sind Bank consumer loans are hassle free, quickly approved and are on very attractive interest rates. Consumer loans are given for the purpose of consumer durables and vehicles.

ACTIVITY CHART OF BRANCH/CONSUMER LOAN EXECUTIVE

Before giving loan to any party, there are some general steps to be taken by bank. These are performed by consumer loan executive.

Marketing:
Punjab and Sind Bank use the following strategies to increase its customers: Credit card operation Tie ups Identify various opportunities for promotional activities like carnivals, advertisements Keeping track of competitors activities Market research and analysis Ensuring timely service to customers

Documentation:
It is imperative that loan documentation should be perfect. The branch head loan executive is responsible for completion of documentation. The documentation comprises mainly of: Pre sanction stage: It is prior step for sanctioning the loan. It requires various documents and proof of the borrower. This stage encompasses mainly of following:

 Loan application along with photograph Income proof like salary certificates for employees and income tax return for others Residence proof of the applicant like voters card, passport, driving license, ration card etc Signature proof Copy of bank account statement for last six months Details of assets and liabilities of the applicant Opening of account and depositing the processing fee. Any other document as required therein for the loan proposal.

Post sanction Documentation: Issuing the sanction letter Promissory note Hypothecation(Hyp.) deed Original bill for purchase of asset Collection of administrative fees Preparation and approval of disbursement Other miscellaneous documents

Procedure of Availing Loan

The person who intends to avail loan approaches the loan manager and tells him the purpose of loan. The manager checks whether the person is account holder of their bank or not. If that person is a account holder than the manager checks his credit worthiness and if he is not a account holder than the banker satisfies himself that why that person wants to avail loan from their bank. If banker is satisfied he asks the person to fulfill all formalities. The person submits the required documents and the manager checks the authenticity of the documents and after full satisfaction the banker grants the loan.

Precautions:
To make sure that the applicant will utilize the credit for the purchase of consumer good only and not for any other personal purpose. For this the name of the banker should be impeded as a financer in bill/ demand draft/cheque. To ensure that all the guidelines pertaining to know your customer (KYC) are fulfilled. To verify personally that the asset purchased by the applicant is not sold and proper insurance of the asset is done. To ensure that the installments are received regularly and the customer is contacted personally in case of default. The documents submitted for availing the loan such as income tax return, salary certificate etc. should be duly attested by gazzeted officer/ manager.

 Bank has to make sure that the disposable income of the borrower should not fall below the level i.e. 40% of gross income after paying installment of loan. Identity and record of the borrower must be verified before sanctioning the loan.

Prepayment charges
Prepayment charges are levied @ 1% on the outstanding balance.

Rate of Interest
Rate of interest is very volatile aspect of consumer loans. Frequent changes in the rate of interest are imperative looking to the emergence of banks and other financial institutions into the consumer finance business.

Type of durables For new vehicle and consumer durables For old vehicles For overdue accounts

Rate of Interest PLR-2.0% or 9% p.a. whichever is higher PLR or 11% whichever is higher PLR+4% = 15% at present

Reasons for Default

Problems related to family, employment, death of earning member, loss of income and mental problems. Lack of systematic professional, procedures and controls. False information, heavy borrowing, lack of information from bank, intention of default, delay in payment of salary by the employer and misutilization of funds.

 Poor customer service Careless attitude

Security
In consumer loan scheme no collaterals are required, only hypothecation of asset to be created. In case of vehicles bank clause is to be incorporated in RC/insurance policy. Hypothecation (Hyp.): It is a pledge of property as security for debt without transfer of possession. When a person pledges a mortgage as collateral for a loan, it refers to the right that a banker has to liquidate goods if you fail to service a loan.

Repayment
Repayment is done normally in Equated Monthly Installments (EMIs) comprising of Principal and Interest. However, as a special case, half-yearly/quarterly installments may be fixed depending on the source of income of the borrower. The bank must obtain post-dated cheques for required EMIs in all the cases where loan installment from salary deduction is not available. The repayment period ranges from 12 to 60 months.

Equated monthly installment (EMI):

The repayment of loan is through EMI which starts after the final disbursement of the loan amount is made. The installment comprises of interest as well as principal. Post-dated cheques for each installment at the time of disbursement should be taken

 Repayment should not normally extend beyond the age of 65 years or age of retirement in case of employees. Co-applicants age can also be taken into consideration while fixing repayment plan in case the applicants age does not fall within the scheme.

For old vehicle repayment should be done within 36 months (but

before retirement age i.e. repayment period to coincide with date of retirement)

Reporting
A register of loans granted under managers discretionary power is maintained in which each transaction related to loan is recorded. The branch manager is required to send a monthly statement of progress under the scheme to their respective Zonal Manager on the last day of each month. Queries (if any) are asked by the Zonal Manager and are solved by the concerned person. Zonal Manager should send the consolidated statement to Head Office on 7th of each month.

CONSUMER LOANS SCHEME OFFERED BY PUNJAB AND SIND BANK

Purpose Eligibility Quantum of Loan Margin

Consumer durables and Vehicles. Policemen, Teachers of Govt. Schools/Colleges, Central/ State Govt. employees and PSUs employees Up to annual income, (Income of spouse can be clubbed.) i. ii. i. ii. 10% of the cost of Vehicles 10% for consumer durables 72 EMIs for Vehicles 48 EMIs for consumer durables

Repayment

Security Insurance Interest Processing Fee

No collaterals required only hypothecation of assets created -with bank loan to be taken. Assets to be insured Prime Lending Rate (PLR) i. ii. Rs. 100/- for consumer durables and two wheelers Rs. 500/- for four wheelers.

PUNJAB AND SIND BANK SCHEME FOR CONSUMER CREDIT FOR MARRIED COUPLES

Eligibility

General public as well as employees in Pvt. /Public undertakings like Central/State Govt., Local bodies, PSUs, Universities recognized by UGC, large public limited companies. For purchase of Car, Motor cycle/scooter for personal use. One vehicle per person, consumer durables.

Purpose of Loan

Amount of loan linked to income of the borrower (net of Quantum of other repayment obligations) Loan Margin i. ii. i. ii. i. ii. 20% on Vehicles 10% on Consumer durables 72 EMIs for Vehicles 48 EMIs for Consumer durables PLR+0.50% p.a. where one of spouse is in service PLR where both, husband & wife are in service.

Repayment Rate of interest Security

Hypothecation of assets to be created with bank loan Third party guarantee, but where both husband & wife are in service- and avail a joint loan, then no guarantor required. i. ii. Rs. 100/- for two wheeler/consumer items. Rs. 500/- for four wheeler.

Guarantee Processing fee

PUNJAB AND SIND BANK PERSONAL CLEAN LOAN SCHEME UPTO Rs l Lac TO OFFICIALS OF GOVT. & PSUs

Eligibility

Employees of Central/State Govt./PSUs/Local bodies Universities recognized by U.G.C./Schools run by Govt., with confirmed service of more than 4 years, are eligible. Minimum gross salary should be Rs. 5,000/- pm. i. For income Rs.5000- Rs. 9000 Max. loan Rs. 50000 For income Rs.9000- Rs.15000, Max. Rs.50,000 For income above Rs.15, 000, Max. loan Rs.1 lac. Rs.1 lac - Rs.2 lac for Govt. & PSU employees only, having a minimum salary of Rs.15, 000 and maintaining salary account with our bank.

Quantum of loan

ii. iii. iv.

Age limit Purpose of loan Processing Fee Rate of interest Repayment Guarantee Security Prepayment Charges

21 to 55 years For purchase of consumer durables, consumption loan or loan for any other personal use. One time @ 2% of loan amount, at the time of sanction i. ii. For clean loan PLR+1%p.a. For Consumer durables @ PLR

EMIs by post dated cheques Third party guarantee acceptable to the bank. i. ii. Hyp. of Motor Vehicles/Consumer durables Personal (For clean loan)

Nominal fee of 2% of Outstanding balance

PUNJAB AND SIND BANK SPECIAL FESTIVAL LOAN SCHEME FOR PUBLIC
i. Scheme would cover the officials of state or central Govt./PSUs/LocalBodies/Universities/colleges recognized by UGC/Schools run by Govt. or local bodies / Private-aided schools. Scheme would cover Doctors, Lawyers, Architects, C.As, Engineers, etc. In case of salaried persons - confirmed service of more than four years with no departmental or criminal case pending against the employee. Age limit should be 21 to 55 years. The minimum gross salary Rs.5000/- per month. The income of the spouse (if employed) may be clubbed for availing the loan. In case of self employed / professionals, the applicant should be an I.T. payee. In case of existing borrowers under other schemes, the eligibility would be judged from the good past track record of at least two years and the existing borrower accounts are Standard account and there is no irregularity.

ii. iii.

Eligibility

iv. v.

Purpose of credit Type of credit

To meet special expenditure for festival celebration such as furnishing of house/shop/office, consumer goods, personal expenditure. Clean loan

Maximum Rs. 1, 00,000/i. In case of salaried class -five times of the net carry home salary. Quantum of ii. In case of professionals/self employed - 20% of the credit annual income as per IT return. In case of existing borrowers under the scheme - 10% of the loan/limit already sanctioned.

Processing fee Rate of interest Security

Nil PLR No collaterals required. However, in case of existing borrowers, the existing collateral, if any may be attached

The repayment programme to commensurate with income of the borrowers, loan to be adjusted in 12 to 36 months in Repayment monthly / quarterly / half yearly (in case of agriculturists) installments No third party guarantor required .However, guarantee of the spouse/major son to be obtained. Nil

Guarantee Prepayment Charges

PUNJAB AND SIND BANK SCHEME FOR GRANTING CLEAN LOAN AND CONSUMER LOAN TO CLUB EMPLOYEES

Eligibility

The Employees of reputed clubs in metropolitan/urban centers having minimum confirmed service of seven years. Age limit should be 21-55 years. The minimum gross salary Rs.5000/- per month. The income of the spouse (if employed) may be clubbed for availing the credit facility. For purchase of consumer items and for any personal use.

Purpose of Credit

Five times the gross monthly salary of the employee subject to ceiling as under: Personal Loan Consumer Loan Quantum of Officers Max. Rs.50000/- Max. Rs.80000/-Class IV Max. credit Rs.25000/- Max. Rs.25000/- employees Margin Processing charges Rate of interest Security 15% of the cost of vehicles/consumer durables As per guidelines issued by Head Office i. ii. Clean loan PLR +1% p.a. Consumer loan PLR + 0.5% p.a.

Clean loan Personal Consumer loan Hypothecation of assets to be purchased with bank loan i. ii. Officers - Third party guarantee acceptable Bank Class IV Employees - Guarantee of other staff member to be taken

Guarantee

Repayment

The loan to be repaid in 36 EMIs including interest by deduction from the salary of the employees.

FRAUDS IN THE AREA OF CONSUMER FINANCE

Loans were granted to persons without verifying their antecedents/ details. As a result, subsequently they were found to be non-existent. The documents submitted for availing the loans such as the deeds, income tax returns, salary certificate etc. were found to be fake/ fictitious. The Chartered Accountant (C.A.) who had purportedly issued/ verified the documents were found to be non-existent themselves. Vehicle/consumer loans were obtained by submitting fake/ forged invoices/ quotations and were misappropriated without creating charge on the security. Assets are normally not purchased by applicant and money is utilized for some other purpose. Sometime asset are purchased and these are sold in market immediately after availing the loan.

DATA ANALYSIS AND INTERPRETATION

Occupation
Table No. 1 Options Salaried Professional Business Total Responses 15 12 3 30 Percentage 50 40 10 100

Occupation
Graph No. 1

10% 40% 50%

Salaried Professional Business

Interpretation:
The above Pie Chart indicates that 50% of the respondents belong to salaried class while 40% of respondents are professional. Only 10% of respondent belong to business class.

Annual Income
Table No. 2 Options Below Rs. 50,000 Rs. 50,000 Rs. 1,00,000 Rs. 1,00,000 Rs. 5,00,000 Above Rs. 5,00,000 Total Responses 3 15 9 3 30 Percentage 10 50 30 10 100

Annual Income
Graph No. 2

10% 30%

10%
Below Rs. 50,000 Rs. 50,000 - Rs. 1,00,000 Rs. 1,00,000 - Rs. 5,00,000

50%
Rs. 5,00,000 Above

Interpretation:
The above Pie Chart shows that 50% of the respondents fall in the income group of Rs. 50,000 Rs. 1,00,000, 30% of the respondents fall in the income group of Rs.1,00,00 Rs. 5,00,000 and only 10% of respondents fall in the income group above Rs. 5,00,000

Duration of Account with Punjab and Sind Bank

Table No. 3 Options Less than 2 Years 3 to 5 Years More than 5 Years Total Responses 7 12 11 30 Percentage 23 40 37 100

Duration of Account
Graph No. 3 40 40 35 30 25 20 15 10 5 0 1-2 Years 3-5 Years More than 5 Years 23 37

Interpretation:
The above graph depicts that 37% people have their account with Punjab and Sind Bank for more than five years and only 23% people have their account with Punjab and Sind Bank for less than 2 years.

Satisfaction Regarding Interest Rate

Table No. 4 Options Yes No Total Responses 25 5 30 Percentage 83 17 100

Satisfaction Regarding Interest Rate

Graph No. 4

100 83 80 60 40 20 0 Yes No 17

Interpretation:
The survey reveals that 83% respondents are satisfied with the interest rate charged by bank and 17% respondents are not satisfied with the interest rate charged by bank.

Satisfaction Regarding Processing Fee

Table No. 5 Options Yes No Total Responses 28 2 30 Percentage 93 7 100

Satisfaction Regarding Processing Fee

Graph No. 5

100 80 60 40 20 0 Yes

93

7 No

Interpretation:
The above graph indicates that 93% of respondents are satisfied with the processing fee charged by bank and 7% respondents are not satisfied with processing fees.

Time Taken for Disbursement of Loan

Table No. 6 Options 1 day 2 to 3 days More than 3 days Total Responses 6 20 4 30 Percentage 20 66 14 100

Time Taken for Disbursement of Loan

Graph No. 6

66%
1 Day 2 - 3 Days More than 3 Days

20%

14%

Interpretation:
The data reveals that more than 3 days were taken for disbursement of loan of 14% respondents while 2 to 3 days were taken for 66% respondents. Only 20% respondents get their loan disbursed with in a day.

Proper solution of account related queries

Table No. 7 Options Yes No Total Responses 18 12 30 Percentage 60 40 100

Proper solution of account related queries

Graph No. 7 60 60 50 40 40 30 20 10 0 Yes No

Interpretation:
The above depicts that 60% of respondents queries are solved properly and 40% respondents feel that their queries are not solved properly.

Awareness Regarding Hidden Charges

Table No. 8 Options Yes No Total Responses 16 14 30 Percentage 53 47 100

Awareness Regarding Hidden Charges

Graph No. 8

54 52 50 48 46 44 Yes

53

47

No

Interpretation:
The above graph indicates that 53% of the respondents are sure that no hidden charges are debited in their account and they are aware about these charges.

Satisfaction Regarding Bank Services

Table No. 9 Options Excellent Very good Good Fair Total Responses 2 8 15 5 30 Percentage 7 27 50 16 100

Satisfaction Regarding Bank Services

Graph No. 9 50 50 45 40 35 30 25 20 15 10 5 0 Excellent Very Good Good Fair 7 16 27

Interpretation:
The above graph indicates that 50% of the respondents feel that the services provided by bank is good, 27% respondents feel that services are very good and 7% respondents feel that services provided by bank is excellent.

Customers Perception Regarding Cross-Checking of Information

Table No. 10 Options Yes No Total Responses 9 21 30 Percentage 30 70 100

Customers Perception Regarding Cross-Checking of Information

Graph No. 10 70 60 50 40 30 20 10 0 Yes No 30 70

Interpretation:
The above chart depicts that 30% of the respondents feel that the information provided by them for getting loan is being cross checked

Reason for Selecting Punjab and Sind Bank

Table No. 11 Options Good service Attractive schemes Recommended by some person You are an employee of Punjab and Sind Bank Near to your place Responses 18/30 21/30 10/30 12/30 4/30 Percentage 60 70 33 40 13

Reason for Selecting Punjab and Sind Bank

Graph No. 11 70 70 60 50 40 30 20 10 0
Good Service Attractive Others PSB Employee Near to your Schemes Recommendation Place

60

40 33

13

Interpretation:
The above bar graph shows that most of the customers have taken loan from Punjab and Sind Bank due to quality of services provided by bank and due attractive schemes.

Preference of Existing Customer for availing Loan in Future

Table No. 12 Options Yes No Cant say Total Responses 12 6 12 30 Percentage 40 20 40 100

Preference of Existing Customer for availing Loan in Future

Graph No. 12

20%
Yes

40%
No

40%

Can't say

Interpretation:
The survey reveals that 40% of respondents will prefer Punjab and Sind Bank for taking loan while 20% of respondents will not prefer Punjab and Sind Bank.

Strongest Point of Punjab and Sind Bank

Table No. 13 Options Efficient staff Attractive schemes Excellent customer service Branch ambience Responses 18/30 21/30 14/30 Percentage 60 70 46 -

Strongest Point of Punjab and Sind Bank

Graph No. 13
70 70 60 60 50 40 30 20 10 0 0 Efficient Staff Attractive Schemes Customer Service Branch Ambience 46

Interpretation:
The above bar graph reveals that the customers feel that the strongest point of Punjab and Sind Bank are attractive schemes, efficient staff and good customer service.

FINDINGS
Most of the respondents are satisfied with the interest rate charged by the bank which shows that interest rate of Punjab and Sind Bank is quite reasonable as compared to other banks. All the respondents except two are satisfied with the processing fee as they feel that it is less as compared to other banks. 84% of the respondents are satisfied with the level of services provided by bank but they feel that these services can still be made better. Most of the people who have taken loan either belong to salaried class or are professional. Most of the respondents have selected Punjab and Sind Bank for availing loan either due to attractive schemes, good customer service or due to the fact that they are an employee of Punjab and Sind Bank. Customers queries are not solved properly by the officials 40% of the respondents say that next time when they want to avail loan they will prefer Punjab and Sind Bank. Punjab and Sind Bank is popular among masses due to efficient staff, attractive schemes and good customer service. Generally customers are not aware about hidden charges so they must be given full information about these charges. Customers are not satisfied with branch ambience.

SUGGESTIONS
Customers must be given full information about all the charges and fees related to a particular scheme in detail. More young and energetic staff should be employed to manage the work load. Punjab and Sind Bank should revise its schemes with special reference to interest rate from time to time in order to attract new customers. The efforts should be made to improve bank ambience and to increase the speed of service. A customer grievances cell should be made functional and steps should be taken to enhance speedy settlement of the compliant.

CONCLUSION
Punjab and Sind Bank is one of the most efficiently run financial institution of India. The management of this institution is quiet content and satisfied by the progress made by it since its humble beginning in 1908 at Amritsar. Punjab and Sind Bank offers a broad range of consumer loans to meet the customers specific needs and situations. This project is an attempt to study consumer loans schemes offered by Punjab and Sind Bank and level of customer satisfaction regarding these schemes. This project throws light on procedure of availing consumer loan as well as different kind of frauds pertaining to these loans. A questionnaire is also incorporated to know the level of customers satisfaction regarding these loans and evaluation has been done on the basis of responses retrieved by customers of the bank. After making research with the help of questionnaire and personal interview it is found that customers are satisfied with the consumer loan schemes offered by Punjab and Sind Bank. They are also contended with the services provided by the bank but they feel that these can be made better. It can be done by employing more young and energetic staff to manage the work load. The customers are not aware about the hidden charges so they must be given full information about all the fees and charges.

SOURCES
www.psbindia.com Questionnaires Research Methodology by C.N. Kothari

QUESTIONNAIRE
Name ___________________________ Age ___________________________ Gender ___________________________

1. Occupation:(a) Salaried (b) Professional (c) Business 2. Annual Income:(a) Below Rs. 50,000 (b) Rs. 50,000 to Rs. 1 lakh (c) Rs. 1 lakh to Rs. 5 lakh (d) Above Rs. 5 lakh 3. What is duration of your account with Punjab and Sind Bank? (a) 1 to 2 years (b) 3 to 5 years (c) More than 5 years 4. Are you satisfied with the interest rate charged by Punjab and Sind Bank? (a) Yes (b) No

5. Are you satisfied with the processing fee charged by Punjab and Sind Bank? (a) Yes (b) No

6. How much time was taken by Bank between submission of application and disbursement of loan? (a) 1day (b) 2 to 3 days (c) More than 3 days 7. Are queries related to your account being solved properly? (a) Yes (b) No 8. Are you sure that no hidden charges are debited in your account? (a) Yes (b) No If No than specify the kind of charges debited in your account ____________________________________________ ____________________________________________ 9. What do you think about the standard of services provided by Punjab and Sind Bank? (a) Excellent (b) Very good (c) Good (d) Fair 10. At any point of time do you think that the information Provided by you to bank is being cross-checked?

(a) Yes (b) No

11. Why do you select Punjab and Sind Bank for availing of loan? (a) Good service (b) Attractive schemes (c) Recommended by some person (d) You are an employee of Punjab and Sind Bank (e) Near to your place 12. Next time when you want to avail loan would you avail it from Punjab and Sind Bank? (a) Yes (b) No (c) Cant say 13. What according to you is the strongest point of Punjab and Sind Bank? (a) Efficient staff (b) Attractive schemes (c) Excellent customer service (d) Branch ambience

(Thanks for your cooperation)