A PROJECT REPORT ON

RESEARCH ON LOANS AND ADVANCES PROVIDED BY

PRIVATE AND PUBLIC BANKS FROM THE CUSTOMERS
POINT OF VIEW
SUBMITTED
TO THE UNIVERSITY OF MUMBAI
AS A PARTIAL REQUIREMENT FOR COMPLETING THE
DEGREE OF
[Link] (Accountancy) SEMESTER 3

SUBMITTED BY:
Avani Rawat
ROLL NO.: 38

UNDER THE GUIDANCE OF PROF

________Prof._Dhanabalu Raju Naikar_________
SIES College of Commerce and Economics
Month and Year
 SIES COLLEGE OF COMMERCE AND ECONOMICS,

PLOT NO. 71/72, SION MATUNGA ESTATE

T.V. CHIDAMBARAM MARG,

SION (EAST), MUMBAI – 400022.

CERTIFICATE

This is to certify that ______Avani Rawat______ of [Link] (Accountancy)

Semester _3__(Academic year _2021- 2022) has successfully completed a research

project on “_A study on loans and advances offered in private and public banks from
the customers point of view_” under the Guidance of _Prof. Dhanabalu Raju
Naikar__.

Project Guide name Payal Bhatia

Prof. Dhanabalu Raju Naikar__ ___________________

(Project Guide) (Course Co-ordinator)

_Prof. Ashok A. Gujar__ ___________________

(External Examiner) (Dr Mrs Nina Roy Choudhury)

(Principal)

Place: _____________
Date: ___________
 DECLARATION

I, Avani Rawat,_ Student of [Link] (Accountancy) Semester _3_

(Academic year 2021- 2022_) hereby declare that, I have completed the research
project on A study on loans and advances provided by private and public banks
from the customers point of view.

The information presented in this project is true and original.

to the best of my knowledge. This project is previously not submitted to any

University for any Degree or Diploma Course of this or any other University.

_Avani Rawat___

(Student Name & Sign)

Roll No.: 38

Place: Mumbai
Date:_____________
 ACKNOWLEDGEMENT
I would like to thank the University of Mumbai, for introducing
[Link](Accountancy) course, thereby giving its students a platform to be
abreast with changing business scenario, with the help of theory as a base and
practical as a solution.

I am indebted to our Principal Dr Nina Roy Choudhury for providing

necessary facilities required for completion of the Project.

I take this opportunity to thank our co-ordinator Ms. Payal Bhatia for her
support and guidance. I would sincerely like to thank her for all her efforts.

I would like to express my sincere gratitude towards my project guide

Prof. Dhanabalu Raju Naikar whose guidance and care made the project
successful.

I would like to thank my College library for having provided various

reference books and magazines related to my project.

Last but not the least; I would like to thank my parents for giving the best
education and for their support and contribution without which this project
would not have been possible.

_Avani Rawat_

(Student Name and sign)

ROLL NO. 38
Executive Summery
Inside the developing global competition, the productivity of any commercial enterprise
challenge depends upon the behavioral aspects of consumers. In today’s world customers are
the most important for the businesses to keep going on. Businesses cannot survive without
the customers in this world. Customers truly are the king of the market.

Likewise, banks are also equally important for a country to run smoothly without any money
issues. Banks help to keep up the flow of money in the market . They help people by
accepting their deposits and providing them with loans with a rate of interests so that they can
also earn and the money keeps on flowing in the market smoothly, without banks a country
cannot survive. It will completely get destroyed.

There are many functions of a bank. The main functions include accepting deposits and
providing loans to its customers. Like all other businesses banks too need customers in order
to survive in the market and keep on earning money and providing loans to the people in
need.

In this research project I have focused on the loans and advances provided by the bank to its
customers and how they can improve and attract more customers

In the first part of the project I have introduces the meaning of banks and explained
everything regarding banks and the loans that they provide to the customers.

Then I have explained the objectives, scope and limitations of my study on loans and
advances provided by the bank to its customers.

In the next part I have explained how I conducted the research. i.e the method used to
research on the topic.

Next I have analyzed the data collected by me and also interpreted the questionnaire prepared
for the purpose of this research based on how the people have responded to the questions.
Index

Sr. No Particulars

Executive summery

1. Introduction

1.1 Banks

1.2 History of banks

1.3 Type of banks

1.4 Types of loans

1.5 Importance of banks

1.6 Axis banks

1.7 Punjab National bank

2. Objectives

3. Scope and limitations

3.1 Scope

3.2 Limitations

4. Research methodology

4.1 Type of research

4.2 Data collection tools

5. Review of literature

6. Data analysis and interpretation

6.1 Personal loans

6.2 Home loans

6.3 Business loans

6.4 Vehicle loans

6.5 Educational loans

6.6 Data interpretation

7. Conclusions, suggestions and recommendations

7.1 Conclusions

7.2 Suggestions and recommendations

8. Bibliography

9. Appendix
CHAPTER 1 : INTRODUCTION
1) INTRODUCTION
The term ‘loan’ refers to the amount borrowed by one person from another. The amount is in
the nature of loan and refers to the sum paid to the borrower. Thus, from the view point of
borrower, it is ‘borrowing’ and from the view point of bank, it is ‘lending’. Loan may be
regarded as ‘credit’ granted where the money is disbursed and its recovery is made on a later
date. It is a debit for a borrower. While granting loans, credit is given for a definite purpose
and for a predetermined period. Interest is charged on the loan at agreed rate and intervals of
payment. ‘Advance’ on the other hand, is a ‘credit facility’ granted by bank. Banks grant
advances largely for short-term purpose, such as purchase of goods traded in and meeting
other short-term trading liabilities. There is a sense of debt in loan, where as an advance is a
facility being availed of by the borrower. However, like loans, advances are also too repaid.
Thus, a credit facility repayable in installments over a period is termed as loan while a credit
facility repayable within one year may be known as advances.

The term loan refers to a type of credit vehicle in which a sum of money is lent to another
party in exchange for future repayment of the value or principal amount. In many cases, the
lender also adds interest and/or finance charges to the principal value which the borrower
must repay in addition to the principal balance. Loans may be for a specific, one-time
amount, or they may be available as an open-ended line of credit up to a specified limit.
Loans come in many different forms including secured, unsecured, commercial, and personal
loans.

Here's how the loan process works. When someone needs money, they apply for a loan from
a bank, corporation, government, or other entity. The borrower may be required to provide
specific details such as the reason for the loan, their financial history, Social Security Number
(SSN), and other information. The lender reviews the information including a person's debt-
to-income (DTI) ratio to see if the loan can be paid back. Based on the applicant's
creditworthiness, the lender either denies or approves the application. The lender must
provide a reason should the loan application be denied. If the application is approved, both
parties sign a contract that outlines the details of the agreement. The lender advances the
proceeds of the loan, after which the borrower must repay the amount including any
additional charges such as interest.
Let us take a look at what the banks are which provide loans and advances to the
customers:-

1.1 Banks

A bank is a financial institution licensed to receive deposits and make loans. Banks may also
provide financial services such as wealth management, currency exchange, and safe deposit
boxes. There are several different kinds of banks including retail banks, commercial or
corporate banks, and investment banks. In most countries, banks are regulated by the national
government or central bank.

Banks are a very important part of the economy because they provide vital services for both
consumers and businesses. As financial services providers, they give you a safe place to store
your cash. Through a variety of account types such as checking and savings accounts, and
certificates of deposit (CDs), you can conduct routine banking transactions like deposits,
withdrawals, check writing, and bill payments. You can also save your money and earn
interest on your investment.

Banks also provide credit opportunities for people and corporations. The money you deposit
at the bank—short-term cash—is used to lend to others for long-term debt such as car loans,
credit cards, mortgages, and other debt vehicles. This process helps create liquidity in the
market—which creates money and keeps the supply going.

Just like any other business, the goal of a bank is to earn a profit for its owners. For most
banks, the owners are their shareholders. Banks do this by charging more interest on the loans
and other debt they issue to borrowers than what they pay to people who use their savings
vehicles.

Because banks play an important role in financial stability and the economy of a country,
most jurisdictions exercise a high degree of regulation over banks. Most countries have
institutionalized a system known as fractional reserve banking, under which banks hold liquid
assets equal to only a portion of their current liabilities. In addition to other regulations
intended to ensure liquidity, banks are generally subject to minimum capital requirements.

Banks act as payment agents by conducting checking or current accounts for customers,
paying cheques drawn by customers in the bank, and collecting cheques deposited to
customers' current accounts. Banks also enable customer payments via other payment
methods such as Automated Clearing House (ACH), Wire transfers or telegraphic transfer,
EFTPOS, and automated teller machines (ATMs).

Banks can create new money when they make a loan. New loans throughout the banking
system generate new deposits elsewhere in the system. The money supply is usually
increased by the act of lending, and reduced when loans are repaid faster than new ones are
generated.

Overall bank is an institution set up to help the public in need of money and also help them to
save their money. It is the safest place in the whole world to save your money.
Let’s look at the history of banking in India and see how it all started.

1.2 History of the banks in India

Modern banking in India originated in the last decade of the 18th century. Among the first
banks were the Bank of Hindustan, which was established in 1770 and liquidated in 1829–32;
and the General Bank of India, established in 1786 but failed in 1791.

The largest and the oldest bank which is still in existence is the State Bank of India (SBI). It
originated and started working as the Bank of Calcutta in mid-June 1806. In 1809, it was
renamed as the Bank of Bengal. This was one of the three banks founded by a presidency
government, the other two were the Bank of Bombay in 1840 and the Bank of Madras in
1843. The three banks were merged in 1921 to form the Imperial Bank of India, which upon
India's independence, became the State Bank of India in 1955. For many years, the
presidency banks had acted as quasi-central banks, as did their successors, until the Reserve
Bank of India was established in 1935, under the Reserve Bank of India Act, 1934.

In 1960, the State Banks of India was given control of eight state-associated banks under the
State Bank of India (Subsidiary Banks) Act, 1959. These are now called its associate banks.
In 1969, the Government of India nationalized 14 major private banks; one of the big banks
was Bank of India. In 1980, 6 more private banks were nationalized. These nationalized
banks are the majority of lenders in the Indian economy. They dominate the banking sector
because of their large size and widespread networks.

The Reserve Bank of India, India's central banking authority, was established in April 1935,
but was nationalized on 1 January 1949 under the terms of the Reserve Bank of India
(Transfer to Public Ownership) Act, 1948 (RBI, 2005b). In 1949, the Banking Regulation Act
was enacted, which empowered the Reserve Bank of India (RBI) to regulate, control, and
inspect the banks in India. The Banking Regulation Act also provided that no new bank or
branch of an existing bank could be opened without a license from the RBI, and no two banks
could have common directors.

Despite the provisions, control and regulations of the Reserve Bank of India, banks in India
except the State Bank of India (SBI), remain owned and operated by private persons. By the
1960s, the Indian banking industry had become an important tool to facilitate the
development of the Indian economy. At the same time, it had emerged as a large employer,
and a debate had ensued about the nationalization of the banking industry. Indira Gandhi, the
then Prime Minister of India, expressed the intention of the Government of India in the
annual conference of the All-India Congress Meeting in a paper entitled Stray thoughts on
Bank Nationalization.

Thereafter, the Government of India issued the Banking Companies (Acquisition and
Transfer of Undertakings) Ordinance, 1969 and nationalized the 14 largest commercial banks
with effect from the midnight of 19 July 1969. These banks contained 85 percent of bank
deposits in the country. Within two weeks of the issue of the ordinance, the Parliament
passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it
received presidential approval on 9 August 1969.

The history of Nationalization can be traced back in the 1947 which is also known as the pre-
independence period. It was during this time when the banking system in India was
established. It began with the foundation of Bank of Hindustan in the year 1770. There are
many banks that started operating during those days and are still operating like Allahabad
bank, Punjab National Bank, etc. this period was marked as the merging period where most
of the banks were merged with one another. The Imperial bank is one of the biggest example
in that regard which is a merger of Bank of Madras, Bank of Bombay and Bank of Bengal
which later turned into what we know as the ‘Reserve Bank of India’.

After that the second phase started from 1947 to 1991 which was majorly known as the
Nationalizing period for the banks in India. Indira Gandhi, the Prime Minister that time put
up a proposal for the same on behalf of the Central government and thereafter the
Government of India started issuing ordinance of Banking Companies (Acquisition and
Transfer of Undertakings) 1969. And after 14 days or so of the issue of ordinance Parliament
enacted Banking Companies (Acquisition and Transfer of Undertakings) act. As a result of
that, few banks were nationalized like- Allahabad bank, Bank of Baroda, Bank of India, Bank
of Maharashtra, Canara bank, Punjab National Bank, UCO Bank, Union Bank of India, etc.

In the year 1980 the second round of Nationalization started where 6 more commercial banks
like Punjab and Sind bank, Oriental Bank of Commerce, Corporation Bank, Andhra Bank,
New Bank of India and Vijaya Bank got nationalized. The credit delivery to government was
the major reason for the same. With the second round of nationalization, government
controlled approx. 91% of the banking business of the country.

The third phase started from the year 1991 till date. The policy of Liberalization was duly
followed in this period and as a result of that a small number of these banks got licensed.
They were known as the New generation tech-savvy banks which later merged with the
Oriental bank of commerce, IndusInd Bank, UTI bank, ICICI bank and HDFC bank. The
three sectors of banks i.e. Government, Private, Foreign contributed their best to the overall
growth of the economy. As a result of liberalization of banking policies, a lot of private banks
also came into effect.
1.3 Types of banks

 Central bank
The Reserve Bank of India (RBI) is India's central bank and regulatory body under the
jurisdiction of Ministry of Finance, Government of India. It is responsible for the issue
and supply of the Indian rupee and the regulation of the Indian banking system. It also
manages the country's main payment systems and works to promote its economic
development. Bharatiya Reserve Bank Note Mudran is one of the specialised divisions of
RBI through which it mints Indian bank notes and coins. RBI established the National
Payments Corporation of India as one of its specialised division to regulate the payment
and settlement systems in India. Deposit Insurance and Credit Guarantee Corporation was
established by RBI as one of its specialised division for the purpose of providing
insurance of deposits and guaranteeing of credit facilities to all Indian banks.

 Co-operative bank
The co-operative banking system came into being with the aim to promote saving and
investment habits among people, especially in rural parts of the country. In India, co-
operative banks play a crucial role in rural financing, with funding of areas under
agriculture, livestock, milk, personal finance, self-employment, setting up of small-scale
units among the few focus points for both urban and rural cooperative banks. They
provide a much-needed alternative to the age-old exploitative practice of people
approaching the village moneylender, most often getting into a debt-trap that they
struggle to pull themselves out of. The cooperative banking system came into being with
the aim to promote saving and investment habits among people, especially in rural parts
of the country.

 Regional rural banks

Regional Rural Banks (RRBs) are government owned scheduled commercial banks of
India that operate at regional level in different states of India. These banks are under the
ownership of Ministry of Finance , Government of India. They were created to serve rural
areas with basic banking and financial services. However, RRBs also have urban
branches. The area of operation is limited to the area notified by the government of India
covering, and it covers one or more districts in the State. RRBs perform various functions
such as providing banking facilities to rural and semi-urban areas, carrying out
government operations like disbursement of wages of MGNREGA workers and
distribution of pensions, providing para-banking facilities like locker facilities, debit and
credit cards, mobile banking, internet banking, and UPI services.

 Local area banks

Local Area Banks were set up as per a Government of India Scheme announced in
August 1996. The intention of the government was to set up new private local banks with
jurisdiction over two or three contiguous districts. The objective of establishing the local
area banks was to enable to mobilization of the rural savings by local institutions and
 make them available for investments in local areas. Thus, the overall idea was to bridge
the gaps in the credit availability in the rural and semi-urban areas, thereby strengthening
the institutional credit mechanism in such areas.

 Specialized banks
The specialized banks are defined as those banks that are banking operations that serve a
specific type of economic activity, such as industrial activity or agricultural or real estate,
under the resolutions of their establishment. Specialized bank does not have to accept
demand deposits of the main aspects of its activities.

 Commercial banks
Commercial banks form a significant part of the country’s Financial Institution System.
Commercial Banks are those profit seeking institutions which accept deposits from
general public and advance money to individuals like household, entrepreneurs,
businessmen etc. with the prime objective of earning profit in the form of interest,
commission etc. The operations of all these banks are regulated by the Reserve Bank of
India, which is the central bank and supreme financial authority in India. The main source
of income of a commercial bank is the difference between these two rates which they
charge to borrowers and pay to depositors. Loans and advances granted by commercial
banks are highly beneficial to individuals, firms, companies and industrial concerns. It
can further be classified into private banks and public banks.

1) Private Sector Banks

Private sector banks are those banks in which the majority of the stake is held
by shareholders of the bank and not by the government. RBL bank, HDFC
Bank, ICICI Bank, Yes Bank, Axis bank, etc. are the private sector banks in
India. They provide all the banking products and services to the customers.
Private banks are known for introducing information technology in the
banking system.

2) Public sector banks

Public sector banks are those banks where the government holds more than
50% ownership. With these banks, the government regulates the financial
guidelines. Because of government ownership, most depositors believe that
their money is more secured in public sector banks. As a result, most public
sector banks have a large customer base. Bank of Baroda, State bank of India,
Bank of Maharashtra, Central bank of India, Punjab national bank, etc. are the
public sector banks in India.
3) Foreign banks
A foreign bank branch is a type of foreign bank that is obligated to follow the
regulations of both the home and host countries. Because the foreign bank
branch has loan limits based on the total bank capital, they can provide more
loans than subsidiary banks. That is because the foreign bank branch, while
possibly small in one market, is technically part of a larger bank. Hence, it
enjoys the capital base of the larger entity.
 1.4 Types of loans
One of the main functions of a bank is providing loans and advances to its customers. It is
also a source of income for the bank. The interest paid by the customers on the loan taken
form the banks become the income of the bank. Let us look at the different types of loans and
advances provided by private and public sector banks to its customers,

I. Personal loan
A personal loan is a type of unsecured loan that helps you meet your current financial
needs. It can be used for any personal financial need such as renovating your home,
marriage-related expenses, a family vacation, your child's education, purchasing latest
electronic gadgets or home appliances, meeting unexpected medical expenses or any
other emergencies. It is provided on the basis of key criteria such as income level, credit
and employment history, repayment capacity, etc. Unlike a home or a car loan, a personal
loan is not secured against any asset. The interest rate on personal loans is higher than
that of other loans because of the greater perceived risk when sanctioning them. However,
like any other loan, defaulting on a personal loan has its own adverse implications, as it
would reflect in your credit report and cause problems when you apply for credit cards or
other loans in future.

II. Home loan

A house loan or home loan simply means a sum of money borrowed from a financial
institution or bank to purchase a house. Home loan consists of an adjustable or fixed
interest rate and payment terms. People generally take a home loan for either buying a
house/flat or a plot of land for construction of house, or renovation, extension and repairs
to the existing house. The property is mortgaged to the lender as a security till the
repayment of the loan. The bank or financial institution will hold the title or deed to the
property till the loan has been paid back with the interest due for it. The interest rates for
home loans can be fixed or floating, or partly fixed and or partly floating, suiting the
needs of the borrower. Tax benefits can also be availed by the people taking home loans.
However, these benefits can only be taken by those people who are taking the housing
loan for the first time.

III. Business loan

A business loan is borrowed capital that companies apply toward expenses that they are
unable to pay for themselves. Business loans allow you to usher in funds for your
enterprise to expand your existing business, boost production, take your operations
online, buy new machinery, and more. The quick infusion of cash through business
finance enables you to make necessary purchases and payments on time ensuring smooth
business functioning. There are many different types of business loans like term loan,
startup loan, working capital loan, invoice financing, etc. The business loan amount you
are eligible for depends on your expected profits and the size of your business. The bank
will want to make sure your business is capable of repaying the loan.
IV. Vehicle loan
A vehicle loan is a sum of money a customer borrows in order to purchase a vehicle from
the bank or any other financial institution. Till the loan is fully repaid, the vehicle
purchased through loan is held as the collateral by the bank. If the loan is not repaid by
the customer, the bank will take the vehicle away and sell it in order to get back the
money given by them to the customer. The interest rates of the loan vary from one bank
to the other. The repayment period can also range from one to seven years depending
upon the conditions of the bank and the ability of the customer to repay the loan.

V. Education loan
Education loans are basically a form of monetary assistance availed by students to meet
the expenses associated with their studies. Education loans can be taken by means of
funding, scholarships, financing and rewards, and are granted in cash, which has to be
repaid to the lender along with a rate of interest. Students who wish to avail education
loans are advised to borrow based on their needs as the repayment periods for these loans
can vary to a great extent depending upon the lender and the amount borrowed by the
student. Most of the student loans available to individuals in India are granted at a
relatively low rate of interest, and interest payments need not be made immediately.
Students are usually granted a period of time before from the time they take the loan to
the time they start making repayments.
1.5 Importance of banks
The Indian economy is a system that is constantly growing and strengthening. A country’s
healthy economy is largely due to the smooth functioning of its banking system, which
enables people to accumulate their savings and turn them into investments, and helps in
creating new demand deposits, facilitate trading systems within the country and
internationally. It also and increase capital mobility and financial stability of the country.

In this way, finance and banking together form the backbone of the trade, commerce, and
industry proceedings of a country. The Indian banking sector today is also one of the largest
service sectors found in the country.
1.6 Axis Bank
Axis Bank is the third largest private sector bank in India. The Bank offers the entire
spectrum of financial services to customer segments covering Large and Mid-Corporates,
MSME, Agriculture and Retail Businesses.

The Bank has a large footprint of 4,594 domestic branches (including extension counters)
with 11,333 ATMs & 5,710 cash recyclers spread across the country as on 31st March, 2021.
The Bank has 6 Virtual Centres and has over 1500 Virtual Relationship Managers as on 31st
March [Link] Overseas operations of the Bank are spread over eight international offices
with branches at Singapore, Dubai (at DIFC) and Gift City-IBU; representative offices at
Dhaka, Dubai, Abu Dhabi, Sharjah and an Overseas subsidiary at London, UK. The
international offices focus on Corporate Lending, Trade Finance, Syndication, Investment
Banking and Liability Businesses.

Axis Bank is one of the first new generation private sector banks to have begun operations in
1994. The Bank was promoted in 1993, jointly by Specified Undertaking of Unit Trust of
India (SUUTI) (then known as Unit Trust of India), Life Insurance Corporation of India
(LIC), General Insurance Corporation of India (GIC), National Insurance Company Ltd., The
New India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India
Insurance Company Ltd. The share holding of Unit Trust of India was subsequently
transferred to SUUTI, an entity established in 2003.

With a balance sheet size of Rs. 9,96,118 crores as on 31st March 2021, Axis Bank has
achieved consistent growth and with a 5 year CAGR (2015-16 to 2020-21) of 13% each in
Total Assets & Advances and 15% in Deposits.

History of Axis bank

he bank was founded on 3 December 1993 as UTI Bank, opening its registered office in
Ahmedabad and a corporate office in Mumbai.[10] The bank was promoted jointly by the
Administrator of the Unit Trust of India (UTI),[11] Life Insurance Corporation of India
(LIC), General Insurance Corporation, National Insurance Company, The New India
Assurance Company, The Oriental Insurance Corporation and United India Insurance
Company. The first branch was inaugurated on 2 April 1994 in Ahmedabad by Manmohan
Singh, then finance minister of India.[12]

In 2001 UTI Bank agreed to merge with Global Trust Bank, but the Reserve Bank of India
(RBI) withheld approval and the merger did not take place. In 2004, the RBI put Global Trust
under moratorium and supervised its merger with Oriental Bank of Commerce. The following
year, UTI bank was listed on the London Stock Exchange.[13] In the year 2006, UTI Bank
opened its first overseas branch in Singapore. The same year it opened an office in Shanghai,
China. In 2007, it opened a branch in the Dubai International Financial Centre and branches
in Hong Kong.[14]

On 30 July 2007, UTI Bank changed its name to Axis Bank.

In 2009, Shikha Sharma was appointed as the MD and CEO of Axis Bank.

In 2013, Axis Bank's subsidiary, Axis Bank UK commenced banking operations.

On 1 January 2019, Amitabh Chaudhry took over as MD and CEO.

In year 2021,the Bank had reduced its stake in Yes Bank from 2.39 per cent to 1.96 per cent.
1.7 Punjab National Bank
Punjab National Bank, abbreviated as PNB, is an Indian nationalised bank. Its headquarters
are in New Delhi, India. It is under the ownership of Ministry of Finance , Government of
India. The bank was founded in May 1894 and is the second largest government-owned bank
in India, both in terms of its business volumes and its network. The bank has over 180 million
customers, 12,248 branches, and 13,000+ ATMs.[5][3]

PNB has a banking subsidiary in the UK (PNB International Bank, with seven branches in the
UK), as well as branches in Hong Kong, Kowloon, Dubai, and Kabul. It has representative
offices in Almaty (Kazakhstan), Dubai (United Arab Emirates), Shanghai (China), Oslo
(Norway), and Sydney (Australia). In Bhutan, it owns 51% of Druk PNB Bank, which has
five branches. In Nepal, PNB owns 20% of Everest Bank Limited, which has 50 branches.
Lastly, PNB owns 41.64% of JSC (SB) PNB Bank in Kazakhstan, which has four branches.

History
Punjab National Bank is a PSU working under union Government of India regulated by
Reserve Bank of India Act, 1934 and Banking Regulation Act, 1949. Punjab National Bank
was registered on 19 May 1894 under the Indian Companies Act, with its office in Anarkali
Bazaar, Lahore, in present-day Pakistan. The founding board was drawn from different parts
of India professing different faiths and of varying backgrounds, with the common objective
of creating a truly national bank that would further the economic interest of the country.[1]
PNB's founders included several leaders of the Swadeshi movement such as Dyal Singh
Majithia and Lala Harkishen Lal, Lala Lalchand, Kali Prosanna Roy, E. C. Jessawala, Prabhu
Dayal, Bakshi Jaishi Ram, and Lala Dholan Dass.[6][7] Lala Lajpat Rai was actively
associated with the management of the Bank in its early years. The board first met on 23 May
1894.[1] The bank opened for business on 12 April 1895 in Lahore.

PNB is the first Indian bank to have been started solely with Indian capital that survives to
the present earlier Oudh Commercial Bank was established in 1881, but failed in 1958.

Mahatma Gandhi, Jawahar Lal Nehru, Lal Bahadur Shastri, Indira Gandhi and the Jalianwala
Bagh Committee have held PNB accounts.[1]
CHAPTER 2 : OBJECTIVES
2) OBJECTIVES

 To study about the different types of loans and advances offered by the banks to its
customers.

 To study about the differences between private and public banks.

 To know the customer opinion with regards to loans and advances provided by the banks.

 To compare the private and public banks on the basis of services provided by these banks
with regard to the loans provided by them to their customers.

 To get a better understanding of what a customer actually expects from the banks
providing them loans and their opinion on the same.

 To know the main reason of why people, opt for loans and advances from private or
public banks. On what criteria do they decide the bank from which they have to take the
loan.

 To study the loans and advances provided by the private banks.

 To study the loans and advances provided by the public banks.

CHAPTER 3 : SCOPE AND LIMITATIONS OF THE STUDY
3) Scope and limitations of the project

3.1 Scope

 To understand the concept of loans and advances

The banks provide many services tom its customers. One of the important services is
providing loans to the customers when they need money and do not have sufficient
funds to fulfill their needs. Banks help them by lending them money at a certain rate
of interest. They can borrow the money and return it in the future with installments.
There are a lot of things for which a customer requires a loan. For example, to buy a
house, or a vehicle, or for the growth of their business, etc. Therefore, the banks have
classified the loans into certain types so that its easy for the customer to apply for the
type of loan and it also helps in reducing the work of the bank. Hence, it is necessary
to study the concept of the of loans and advances so that the customers can understand
it better.

 To study is limited to only private and public banks

There are lot of type of banks in the country. They are classified on the basis of the
area or place they are located in, their purpose and the type of people who can apply
for loans in such banks. For example, Regional rural banks are set up for the people
living in the rural areas to fulfill their needs of money. Their function can be a little
different from the functions of the banks operated in the urban areas, then also
specialized banks that come into existence for a specific economic activity like solely
for the industrial sector or real estate, etc. Like this there are many type of banks set
up for different purposes. But the commercial banks or the private and public banks
provide loan to a large variety of people. Be it common employee of an organization,
or a business man, or a taxi driver, etc. If you have the ability to pay back the loans,
these banks will never deny you for the loan. Therefore, the research is based on these
banks as it will help understand diversity of these banks with regards to the loans and
advances provided.

 This study covers loans and advances provided from the customers point
of view and not the bank
Customers are the most important priority of a bank. Without the customers the bank
cannot function or survive. The customer base of a bank is the most important
requirement of a bank to grow. Providing loans to the customers becomes the income
of the banks as the customer has to repay the loan with interest which turns to be the
income for the bank. Sa as many loans a bank has the potential to provide, if no
defaults are made, becomes the profit of the bank and helps it to prosper. Thus,
understanding the customers point of view on the loans and advances provided by the
banks can help the banks to increase their customer base.
3.2 Limitations of the research

 The study was limited to only one of the important activities of the bank i,e loans and
advances.

 The study was limited to only customers, i,e the loans and advances were studied
from the view point of customers.

 Accuracy of the data provided cannot be guaranteed as it is completely based on what

the customers said and cannot be verified if it’s true.

 The major part of information provided was limited to only secondary data available
from other sources.
CHAPTER 4 : RESEARCH METHODOLOGY
4) Research Methodology
It is the technique for information representation which helps in analyzing the data
collected and study it thoroughly.

4.1 Type of research

Descriptive research is used in this study in order to identify the lending practices of the
bank and determining customer’s level of satisfaction. The method used was questionnaire
made for the customers and secondary information about the loans and advances provided
by the banks on the internet.

4.2 Data collection tools

I. Primary data
The primary data or the first-hand information collected for the purpose of this
research was done by the following methods of primary data collection.

i. Survey or interview method

Survey method was used for the purpose of this research. A questionnaire
was prepared with 18 questions on a google form, which had to be
answered compulsorily. It was then bifurcated into private and public banks
for the purpose of individual research. The questionnaire was sent to many
people by way of mails and google link. The questionnaire contained all the
necessary questions in order to conduct the research on the satisfaction
level of the customers from the loans and advances provided to them
through the private or public banks.

ii. Observation method

This method was also used for the research. Although it was not helpful
much but it did help in analyzing the different types of loans that people
want to take form the banks. For the purpose of this research, I visited a
bank and just observed at what kind of questions people requiring a loan
can ask to the bank. It also helped me realize some of the expectations that
the customer has from the bank.
II. Secondary data
The secondary data or the second- hand information was also collected for the
purpose of this research and was done by the following methods of secondary data
collection.

i. Pamphlets of the banks

The pamphlets of the banks were used to gain knowledge about the loans
provided by the banks to its customers. Pamphlets of the banks that provide
the information regarding the banks so that it is easier for the customers to
decide whether to create an account or take loan from the bank or other
services of the bank. The pamphlet regarding loans provided useful
information about the type of loans provided by the banks and other
information regarding taking loan form the bank like rate of interest,
different periods of loan repayment and other services provided by the bank
with regards to loans for the customers.

ii. Internet
Internet was used to get information about the research. It is a very good
source of information which can be used by anybody for getting
information. It was a very useful source for gaining knowledge about the
research. It provided all the information about the banks chosen for the
projects and also all the data regarding the type of loans and advances
provided by these banks to its customers.
CHAPTER 5 : REVIEW OF LITERATURE
5) Review of literature
The main purpose of literature review is to critically summarize the current knowledge in
the area under investigation. The review helps in understand the historical background,
recent development of the concept, performance in different areas in different time periods
etc. It further helps in get acquainted with the advancement of work done in the subject
area i.e., Loans and advances provided by private and public sector banks to its customers.
There are a large number of research works conducted by different scholars relating to
various dimensions of priority sector lending. Some of are given below:

i K.S.R. Rao carried out an econometric exercise on the determinants of demand for
bank credit of some selected industries for the period between 1970-71 and 1984-
85. He observed that output of these industries was the most important factor in
determining its demand for bank credit whereas, interest rate of banks and relative
rate of interest of other sources of borrowing played only a secondary role. Price of
output was also found to have affected the demand for credit significantly. The
relative interest rate variable was significant with respect to industries like textiles,
engineering and total manufacturing, while it was not significant for industries like
sugar and other food products and chemicals.

ii Sakthivel and Jansirani (2017), in this research specialist has focused on the
customer understanding with regards to the places of customer preference,
customer satisfaction, commitment, repurchase decision and stressing behavior of
customers in the purchase of real estate fund. In the current situation the real estate
fund business has become liberalized and aggressive. It is found that checking
behavior of the customers can use will give an understanding to real estate fund to
increase their clients. Our research was on judgmental base we arbitrarily selected
people around us and has gathered the data. Our research tool was set of questions.
The entry of commercial financial institutions into real estate fund in early 90's was
definitely a milestone in the development of real estate industry in Indian. Though,
the financial industry was initially shy to enter the real estate 9 fund industry, once
they joined, they joined it with great vitality. Consequently, real estate fund
experienced incredible development and real growth during the last two decades.
Banks are now the major players in the field. Housing fund has appeared as an
important section of the credit profile of the financial institutions. This particular
development has also brought in fundamental changes in the real estate fund
program and real estate industry in Indian. It has become very aggressive and the
increasing competition has helped the clients can use significantly. However, its
rapid rate of development in the past few years has become “the cause for
prospective worry” to the regulator RBI. It is more so particularly while the
subprime lending problems in the real estate industry in US. The time has,
therefore, come for financial institutions to assess the possibility or prospective of
wide spread failing in the present real estate fund program and get the safety
measures necessary to ensure its durability and soundness. Against this
 background, this research made an attempt to assess in detail the performance and
functional problems faced by the financial industry in increasing fund to the real
estate industry and based on findings; get the places of concerns and strategic
treatments needed.

iii Boyd (1994) the study closes on rate of interest charged on advances, enthusiasm
on bank accounts, notoriety. All these interest have played an essential part for
customers and money related execution of a bank in business sector.
However, customers likewise mind other criteria, for example, the amount of
agreeableness of representatives, item, online offices, paper work and
postliminary. Spencer (1991) pointed that the significance of bank picture as
focused technique for expanding customer activity stream. Inclination for bank
amongst understudies as supplier of money related administrations, more
noteworthy trust in huge medium estimated banks, significance of customers by
work force, focused store rates and credit accessibility were the key discoveries.

iv Petersen et al., (1994) in the research article titled “The benefits of lending
relationships: Evidence from small business data” has identified the benefits
of lending relationship. The research article compared the relationship between
a firm and its lenders through credit availability and cost of raising funds to the
firm. The authors finally volume of loan is more important than the price of
loan in a lending relationship in other words the lending relationships and
their bondage is stronger in a high-volume loan than in a low volume loan. The
quantities operate the loan than the price paid for the loan.

v Johnson M D et al.,(1996) in the article titled “Expectation, perceived performance

and customer satisfaction for a complex service: The case of bank loans” analyzed
the data collected from Swedish customer satisfaction barometers. The authors
compared the predictive power of the customers with respect to services, non-
services and bank loans. The authors concluded that the predictive power of
customers vary from services to non-services and bank loans and added that the
predictive power of the expectations is greater in case of non-services than for
other services. The authors also added that the predictive power of bank loans is
less when compared to predictive power of services and predictive power of non-
services.

vi Pawan Agarwal June (2006) public sector banks had a total outstanding exposure
of Rs.71 billion against 488,000 education loan accounts. A market research
company conducted a com-prehensive study of the students’ loan performance in
India. The study covered 350+ branches of 78 banks covering public and private
sector banks including foreign and co-operative banks in 20 cities in Maharashtra
and Delhi.
vii Rangarajan(1988) Remarks that division of banks credit for gainful reason in vital
for financial improvement. Banks are more unbending in loaning exercises and
along these lines meriting and poor individuals are not getting budgetary help. New
measures are key to guarantee that advance achieve meriting hands.

viii Mishkin (2009) analysed point out the money related transmission instruments
incorporate the financing cost channel, the swapping scale channel the benefit
value channel and the credit channel. The loan fee channel is the essential money
related transmission in the traditional micro economics model, per example, IS-LM
model. Those models hold that fiscal arrangement works through the risk side of
bank balance sheet given some level of value stickiness, an adjustment in cash.

ix Karthikeyan K (2011): an investigation of booked business banks in India for the

time of 10 years with the reason to examine the size of NPAs, viability of NPA
administration and the view of branch supervisors in regards to administration of
NPAs. Factual procedures like compound development rates, averages, correlation
and component examination have been utilised for the study.

x Bhaskaran and Josh (2000): presumed that the recuperation execution of co-agent
credit establishments proceeds to inadmissible which adds to the development of
NPA even after the presentation of prudential regulation. They proposed
authoritative and approach remedies to make co-agent credit establishments more
effective, beneficial and productive association tuned in to focused business
managing an account.

xi Khan (1994): In the report entitled “Farm credit Recovery overview report of the
Palestinian issue and possible solutions” found pristine credit for the general public
and federal banks and other commercial banks have been important to adequately
address this need. He reasoned that banks should be exceedingly careful in
screening of candidates prior to the dispensing of credit to lessen the non-
instalment and need solid weights and checks after the dispensing all together to
guarantee the convenient recuperation.
 CHAPTER 6 : DATA ANALYSIS AND INTERPREATTION

6) Data analysis and interpretation

 Data analysis of loans and advances provided by Axis Bank and Punjab
National Bank to the customers.

6.1 Personal loans

Whenever needed the funds are readily available, in the event that an unexpected get away
that you plan with your family or pressing finances required for medical treatment etc. In
such situations personal loans are very helpful.

Purpose

The loan will be granted for any legitimate purpose. The advance will be allowed for
authentic reason at all. For instance, for household and outside movement, medical treatment
of self or a family, meeting any monetary obligation, example, marriage of son or daughter
and settling instructive costs of wards, meeting the edges for buy of advantages.

Eligibility

Resident Indian of National having ability to reimburse an advance, with the exception of
agriculturists.

Loan Amount

The individual advance point of confinement would be dictated by the salary and
reimbursement limit of the candidate.

A) Axis Bank
Least : Rs. 50,000
Maximum : Rs. 15,00,000
Processing fees : At the discretion of the bank
Maximum time : 12 to 60 months

B) Punjab National Bank

Least : Rs. 50,000
Maximum : Rs. 10,00,000
Processing fees : Up to 1% of loan amount
Maximum time : 60 months

Documents required

Both the banks require same documents for loan application.

 Identity proof- Aadhaar card, Passport, Voter ID, etc.

 Address proof - House registration certificate or rent/lease, Aadhaar card, Voter ID card,
etc.
 Income proof – IT returns certificate, income pay slips, bank statements, Form 16, etc.
 Duly-filled application form.
 Standing Instructions/ECS form or post-dated cheques.
 Passport-size photographs.

Interest rates

Axis bank : 12% to 21%

Punjab national bank : 8.95% to 14.50%

Security

It is not required by both the banks

6.2 Home loans
Whenever you want to purchase a house of your own or want to construct one for yourself,
home loans are the best option in case you have insufficient funds.

Purpose

The loan will be granted for buying an existing house or flat, constructing a new flat or
house, renovating and repairing of new flat or house, purchasing of a land to build a new
home and taking over of a current advance from other housing finance company or banks.

Eligibility

A) Axis bank : Minimum age is 21 years and maximum age is 65 years.

B) Punjab national bank : Customers who are below the age of 50 years and existing
housing loan borrowers who have availed loan under our
housing loan scheme for public subject to fulfillment of all
terms and conditions of this variant.

Loan Amount

A) Axis bank
Least : Rs. 3,00,000
Maximum : As required by the customer and up on the eligibility of the customer to
repay the loan.
Processing fees : Rs. 5,000 plus GST
Maximum time : Depends up on the loan amount and EMI plan chosen by the
customer.

B) Punjab national bank

Least : Rs. 2,00,000
Maximum : As required by the customer and up on the eligibility of the customer to
repay the loan.
Processing fees : Minimum Rs. 2,500 and Maximum Rs. 15,000

Maximum time : Depends up on the loan amount and EMI plan chosen by the
customer.

Documents required

 Application form with photos.

 Identity and residential address proof
 Salary slips of last 3 months.
 Form 16.
 Salaried credit statement of last 6 months.
 Processing fees
 Apart from this Punjab national bank also requires education qualification and some other
documents of the person and Axis bank requires PAN card compulsorily.

Interest rates

Axis bank : 12%

Punjab national bank : 7.20% to 10.50%

Security

Security for the loan is a first charge by way of an equitable mortgage of the property to be
financed and/or such other collateral securities as may be deemed fit by the banks.
6.3 Business loan
If you want to expand your business or have a new idea and want to turn it into your own
business or want to go for a start-up, you need funds for doing the same. You may often have
insufficient funds to follow your dream of becoming a business man, business loan is the best
option to go for in such situations.

Purpose

This loan will be granted to individual wanting to open a new business, existing business who
want to expand, companies / firms who are short at funds for operating their business
sufficiently and smoothly and trust and societies operating for education or hospital needs.

Eligibility

Minimum age is 21 years and Maximum age is 58 years.

It is the same for both the banks.

Loan amount

A) Axis bank
Least : Rs. 50,000
Maximum : Depends on the type of business the customer operates and the amount
required by the customer.
Processing fees : Up to 2% plus applicable taxes
Maximum time : 6 to 36 months

B) Punjab national bank

Least : Rs. 50,000
Maximum : Depends on the type of business the customer operates and the amount
required by the customer.
Processing fees : 1.8% plus taxes
Maximum time : 12 to 60 months

Documents required

A) Axis bank
 KYC documents
 Duly filled in application form signed by the customer
 Relevant financial documents
 Bank account statements of last 6 months
 PAN card or form 60
 Business proof
 B) Punjab national bank

 Duly filled application form with Passport-sized photographs

 Self-drafted Business Plan
 Business PAN card
 Identity proof and Address proofs, including Aadhaar Card, Voters Identity Card,
Passport and Driving License
 Business Incorporation Certificate
 Last 12 months’ bank statement
 Last 2 years’ Balance Sheet, P&L statement, ITR and Sales Tax returns
 Any other document required by the bank

As per the scheme’s eligibility criteria or for further information, the bank might ask
for more supporting documents.

Interest rate

Axis bank : 11% to 25%

Punjab national bank : 12.65% to 15.65%

Security

A) Axis bank : It does not require any kind of security for providing business loan

B) Punjab national bank : Collateral or security depends on the type and nature of business
loan. All unsecured business loans do not require any collateral and secured business loans
can be availed only after depositing collateral or security.
6.4 Vehicle loan

If you are considering purchasing a new or used private or commercial vehicle but, you are
short on your funds or do not have enough finances to purchase the same, Vehicle loan
provided by the banks is the option you can go for. It helps you to buy your dream vehicle
without any problems.

Purpose

This loan is provided to the customers who want to purchase any kind of vehicle. Be it a two-
wheeler or a four-wheeler, or for personal use, or for commercial use, or for starting a new
business.

Eligibility

Minimum age is 18 or 21 years depending upon the type of category you belong to and the
maximum age is 60 or 65 years depending upon the same.

It is same for both the banks

Loan amount

A) Axis bank
Least : Rs. 1,00,000
Maximum : Rs. 1,00,00,000
Processing fees : Rs. 3,500 to Rs. 7,000
Maximum time : Up to 7 years

B) Punjab national bank

Least : Rs. 1,00,000
Maximum : Rs. 1,00,00,000
Processing fees : Rs. 1,000 to Rs. 1,500
Maximum time : 1 year to 7 years

Documents required

A) Axis bank
 Application form
 Proforma invoice
 Passport size photograph of each applicant
 KYC documents
 Office or business proof
  Income proof : latest 2 salary slips and latest form 16
 Last 3 months bank statements
 Driving license or PAN card
 Passport or banks verification

B) Punjab national bank

 Identity proof
 Address proof
 Age proof
 Income proof
 Educational qualification proof
 PAN card or driving license

Interest rate

Axis bank : 7.45% to 14.50%

Punjab national bank : 7.55% to 9.25%

Security

The vehicle purchased by taking the loan from the bank is considered as a security until the
loan is repaid to the bank. If the loan installments keep on getting delayed, the bank may take
the vehicle in their custody.
6.5 Education loan

If you want to continue your studies after completing school or desire to study abroad after
completing your graduation or for graduation but do not have enough money to do so.
Educational loan provided by the bank is the right and safe choice for you to fulfil your
dream.

Purpose

This loan is provided to the customers who fees payment of college, school or hostel, or
examination fees, library fees, laboratory fees, or travel expenses for studying abroad, or any
other expense regarding studies.

Eligibility

Indian citizenship is required to avail this loan along with marksheets of the classes passed.

It is same for both banks.

Loan amount

A) Axis bank
Least : Rs. 50,000
Maximum : Rs. 1,00,00,000
Processing fees : Nil to Rs. 15,000
Maximum time : 1 year to 20 years

B) Punjab national bank

Least : Rs. 50,000

Maximum : Based on the need of the customer
Processing fees : 1% of loan amount
Maximum time : 1 year to 15 years

Documents required

A) Axis bank
 KYC documents
 Bank Statement or Pass Book of last 6 months
 Optional – Guarantor Form
 Copy of admission letter of the Institute along with fees schedule
 Mark sheets or passing certificates of S.S.C., H.S.C, Degree courses
 B) Punjab national bank
 Loan application on Bank`s format.
 Passport size photograph.
 Proof of Address.
 Proof of Age.
 Copy of PAN of student’s Borrower.
 Proof of having cleared last qualifying examination.
 Letter of admission.
 Prospectus of the course wherein charges like Admission Fee, Examination Fee,
Hostel Charges etc. are mentioned.
 Details of Assets & Liabilities of parents/co-obligants/guarantors.
 In case loan is to be collaterally secured by mortgage of IP, copy of Title Deed,
Valuation Certificate and Non-encumbrance Certificate from approved Lawyer of
the Bank be obtained at the cost of the borrower.
 Photocopy of Passport & Visa in case of study abroad.
 Any other document/information, depending upon the case and purpose of the
loan.

Interest rate

Axis bank : 13.70% to 15.20%

Punjab national bank : 6.90% to 9.55%

Security

Does not require any kind of security. But the bank may demand security in certain cases
where it finds doubtful situations

It is same for both the banks.

6.6 Data Interpretation

This interpretation is based on the questionnaire prepared by me for my research purposes.

Q1. Your age group?

No. of responses Percentage (%)

18 to 29 33 32.4%
30 to 40 29 28.4%
40 to 50 25 24.5%
50 & above 15 14.7%
102

Interpretation

It is clear from the above data that out of the 102 respondents, maximum people who have
taken loan fall in the category of 18 to 29 (33). Next comes the category of age between 30 to
40 which is 29. Then comes the category of age group of 40 to 50 which is 25 and the least
have taken the loan in the age category of 50 and above which is 15.
Q2. Status of the respondent?

No. of responses Percentage (%)

Employee 61 59.8%
Business person 12 11.8%
Student 24 23.5%
Other 5 4.9%
102

Interpretation

It can be said based on the above data that maximum people who take loans are employees
(61). Next the people who often want to continue their studies further but do not have
sufficient funds (24) and then comes the business man for either continuing or starting of new
business (12). The people who fall into other categories are the least interested in taking loans
from the bank (5).
Q3. Have you ever taken loan from the bank?

No. of responses Percentage (%)

Yes 96 94.1
No 6 5.9%
102

Interpretation

The above chart shows that maximum number of people take loan form the bank. In this
research, 96 people out of 102 have taken a loan. Only 6 of them have not taken a loan.
Q4. Type of loan taken from the bank?

No. of responses Percentage(%)

Personal loan 28 27.5%
Home loan 27 26.5%
Business loan 12 11.8%
Vehicle loan 16 15.7%
Education loan 19 18.6%
102

Interpretation

The above data shows that maximum people apply for loans in the banks for personal
purposes (28). Next maximum loan is applied for purchasing home which is (27) and then
comes vehicle loans which is (16). Many people also apply loans for continuing their studies
further which is (19). According to the research a few people apply for vehicle loans which is
(16) and very few people apply for business loans which is (12).
Q5. Loan taken from which bank?

No. of responses Percentage(%)

Axis bank 23 22.5%
Punjab national bank 28 27.5%
Other private bank 29 28.4%
Other public bank 22 21.6%
102

Interpretation

The above data shows that the maximum people prefer private banks more than public banks
with (29) responses and then comes the Punjab national bank which is (28) responses. In
private banks (23) people prefer axis bank and (22) prefer other public banks other than
Punjab national bank.
Axis bank or Other private banks

Q1. Reasons for choosing the bank

No. of responses Percentage(%)

Rate of interest 38 37.5%
Credibility 8 7.5%
Long term low EMI 36 35%
Better than public banks 20 20%
102

Interpretation

The main reason why people choose axis or private banks is because of rate of interests. They
provide reasonable rate of interests. Therefore, 38 people have chosen the bank on the basis
of rate of interest. Then comes the low EMI scheme which attracts the customers which is
(36). Next is conditions better than public banks which is 20 and the last is credibility which
is (8).
Q2. Documentation procedure while taking loan?

No. of responses Percentage(%)

Quicker 51 50%
Slower 20 19.6%
Complicated 14 13.7%
Easier 17 16.7%
102

Interpretation

The above data shows that in private banks the documentation procedure was quicker for the
people who have taken loan from the bank (51) and for around (17) people it was easier.
Q3. Customer services provided by the bank?

No. of responses Percentage(%)

Good and satisfying 64 62.7%
Bad and unsatisfying 11 10.8%
Better than private banks 7 6.9%
Better than public banks 20 19.6%
102

Interpretation

The table shows that the services of the people were good and satisfying (64) and also (20)
people responded that the services were better than the public banks.
Q4. Disbursal of loan

No. of responses Percentage(%)

Long time after 58 56.9%
documentation
Done faster than expected 44 43.1%
102

Interpretation

This shows that (44) people’s disbursement pf loans were done faster than they had expected.
In some cases, delay may be there .
Q5. Documents required to apply for the loans

No. of responses Percentage(%)

More as compared to private 28 27.5%
banks
More as compared to public 11 10.8%
banks
Enough but took a long time 25 24.5%
Enough and done in a short 38 37.3%
duration
102

Interpretation

The above data shows that the documents were enough and were accepted quickly by the
bank (38) people say that. Also (11) people say that the documents were than what is
demanded in the public banks.
Q6. The processing fees?

No. of responses Percentage (%)

Lower 62 60.8%
higher 40 39.2%
102

Interpretation

The data shows that the processing fees was charged higher in case of private banks as
compared to public banks.
Q7. Extra charges charged by the bank?

No. of responses Percentage(%)

Yes 41 40.2%
No 61 59.8%
102

Interpretation

The data above shows that the extra charges were charged by the private banks. About (41)
people have responded to yes.
Q8. Prepayment charges charged by the bank?

No. of responses Percentage(%)

Yes 53 52%
No 49 48%
102

Interpretation

This shows that (53) respondents agree that prepayment charges were charged by the banks.
Q9. Behaviour of the employee with the customer?

No. of responses Percentage(%)

Kind and helpful 81 79.4%
Did not pay much attention 21 20.6%
102

Interpretation

The above data suggests that in private banks to 81 respondents the employee was kind and
helpful. This also includes some numbers of the public bank. Likewise, from the 21 who
responded negatively some include the ones from the private banks.
Q10. Customer using digital means to take care of bank activities?

No. of responses Percentage(%)

Yes 91 89.2%
No 11 10.8%
102

Interpretation

This data shows that maximum people use digital means to carry on their bank activities.
About 91 people use digital means for their bank requirements,
Q11. Experience of handling loan activities digitally?

No. of responses Percentage

Technology well updated 61 59.8%
Okay, but faced some 30 29.4%
problems
Not a good experience 11 10.8%
102

Interpretation

The above data shows that the experience of using digital means for private bank customer
was really good as the technology was well updated. 61 people responded that it was a really
good experience of using digital means for banking purposes.
Punjab national bank or Other public banks

Q1. Reasons for choosing Punjab national bank or other public bank?

No. of responses Percentage(%)

Rate of interest 13 12.5%
Credibility 26 25%
Trustworthy than private 54 52.5%
banks
Better than private banks 10 10%
102

Interpretation

The above data shows that most people take loans form the public banks due to the
trustworthiness of the banks. About 54 people find public banks trustworthy and 26 due to
credibility and 13 due to rate od interest and the rest 10 because they find the conditions
better than private banks.
Q2. Documentation procedure while taking loan?

No. of responses Percentage(%)

Quicker 51 50%
Slower 20 19.6%
Complicated 14 13.7%
Easier 17 16.7%
102

Interpretation

The above data shows that in private banks the documentation procedure was quicker for the
people who have taken loan from the bank (51) and for around (17) people it was easier.
Q3. Customer services provided by the bank?

No. of responses Percentage(%)

Good and satisfying 64 62.7%
Bad and unsatisfying 11 10.8%
Better than private banks 7 6.9%
Better than public banks 20 19.6%
102

Interpretation

The table shows that the services of the people were good and satisfying (64) and also (20)
people responded that the services were better than the public banks.
Q4. Disbursal of loan

No. of responses Percentage(%)

Long time after 58 56.9%
documentation
Done faster than expected 44 43.1%
102

Interpretation

This shows that (44) people’s disbursement pf loans were done faster than they had expected.
In some cases, delay may be there .
Q5. Documents required to apply for the loans

No. of responses Percentage(%)

More as compared to private 28 27.5%
banks
More as compared to public 11 10.8%
banks
Enough but took a long time 25 24.5%
Enough and done in a short 38 37.3%
duration
102

Interpretation

The above data shows that the documents were enough and were accepted quickly by the
bank (38) people say that. Also (11) people say that the documents were than what is
demanded in the public banks.
Q6. The processing fees?

No. of responses Percentage (%)

Lower 62 60.8%
higher 40 39.2%
102

Interpretation

The data shows that the processing fees was charged higher in case of private banks as
compared to public banks.
Q7. Extra charges charged by the bank?

No. of responses Percentage(%)

Yes 41 40.2%
No 61 59.8%
102

Interpretation

The data above shows that the extra charges were charged by the private banks. About (41)
people have responded to yes.
Q8. Prepayment charges charged by the bank?

No. of responses Percentage(%)

Yes 53 52%
No 49 48%
102

Interpretation

This shows that (53) respondents agree that prepayment charges were charged by the banks.
Q9. Behaviour of the employee with the customer?

No. of responses Percentage(%)

Kind and helpful 81 79.4%
Did not pay much attention 21 20.6%
102

Interpretation

The above data suggests that in private banks to 81 respondents the employee was kind and
helpful. This also includes some numbers of the public bank. Likewise, from the 21 who
responded negatively some include the ones from the private banks.
Q10. Customer using digital means to take care of bank activities?

No. of responses Percentage(%)

Yes 91 89.2%
No 11 10.8%
102

Interpretation

This data shows that maximum people use digital means to carry on their bank activities.
About 91 people use digital means for their bank requirements,
Q11. Experience of handling loan activities digitally?

No. of responses Percentage

Technology well updated 61 59.8%
Okay, but faced some 30 29.4%
problems
Not a good experience 11 10.8%
102

Interpretation

The above data shows that the experience of using digital means for private bank customer
was really good as the technology was well updated. 61 people responded that it was a rally
good experience of using digital means for banking purposes.
Q6. How was the experience of taking loan from the bank?

No. of responses Percentage(%)

Good 76 74.5%
Excellent 21 20.6%
Bad 5 4.9%
102

Interpretation

This shows that most of the people who have taken loan from the bank had a good experience
with it (76) people. Some had excellent experience (21) people and a few had bad experience
(5).
CHAPTER 7 : CONCLUSIONS, RECOMMENDATIONS AND
SUGGESTIONS
7) Conclusions, Suggestions and Recommendations

7.1 Conclusions

 Same type of loans

The private and public banks both offer the same type of loans to its customers. Be it
educational loans for students or business loans for business persons They provide the
same loans. But the public banks have many other schemes for different type of
customers.

 Rate of interest
It can be concluded from the following study that the rate of interest charged by
private and public banks differs a lot. In fact, many customers take loans from these
banks only for the sake of low interest rates offered by the banks. They decide by
comparing the rates offered by the banks.

 Credibility of banks
The people are very cautious while taking a loan form the bank. Credibility of a bank
plays a major role in deciding whether to take loan or not. Therefore, many people
prefer public banks because it is partially owned by the government and is
trustworthy. However, some people still prefer private banks if they trust the
credibility of the bank.

 Conditions of the banks

Many people consider the conditions of private banks to be better than the public
banks in many situations like customer services and the environment of the bank. The
way they trat their customers is considered better than public banks. Many people
prefer private banks for this reason that they would be given full information and
treated fairly.

 Documentation required by the banks

The documents required by the bank have a very important role while applying for a
loan. Without the documents of the applicant, loan cannot be granted by the bank.
Therefore, it’s important for the customer to submit all the required documents to the
bank. But sometimes public banks demand more documents as compared to the
private bank. It is already difficult for the customer to prepare the documents as there
are many of them and require 2 or3 copies of each. On top of that public banks
demand additional documents that don’t seem necessary. This frustrates the customer
and they tend to shift to public banks.
 Approval of loan
The approval of loan is a very important thing for a customer. To get the money and
fulfil their dreams and wishes. Hence, when the bank accepts the documents of the
applicant, the customer wishes that the loan is fast approved so he can continue with
the work that he/she has planned. But many a times public banks take a long time
before approving the loan of the customer. This frustrates the customer and they move
to private banks instead.

 Charges of the bank

When a customer applies for a loan in a bank, the bank charges the customer a certain
amount of fees to lend them the money for their loans. Private banks are said to
charge a higher amount for such charges and also charge some extra charges that are
not charged by the public banks to its customers. Also, the regular charges which are
charged by private and public banks, are higher in case of private banks. This makes
the people shift for loans to public banks instead of applying to private banks and pay
those extra charges.

 Customer base
There is always a huge customer base of public banks than private banks. The public
banks are never short on customers. They always have a huge number of customers
despite their deficiencies. While, the private always have to fight to maintain their
customer base and increase it. For this purpose, they offer a lot of offers to the general
public for attracting a lot of customers. Yet, public banks always have more
customers than private banks.

 Employee behaviour
Customers are the most important priority of a bank. Without the customers, the bank
would not be able to function and will go bankrupt. Therefore, it’s the responsibility
of the bank to take care of its customers in order to spread good words about bank and
increase its customer base. However, since the public banks already have a huge
customer base they don’t care much about its customers. On the other hand, private
banks employees treat their customers very nicely which shifts the customers from
public to private banks.

 Digital banking
In today’s world you cannot survive without the use of technology. It has become a
very important part of our lives. Private banks seem to understand this and have
themselves to the digital means and also have updated to the latest technology.
However, even though the public banks have accepted digital means and accepted the
technological ways of operating the bank. They are way behind the latest technology,
which makes it difficult for the customers to operate their banking functions online
and they turn to private banks.
7.2 Suggestions and Recommendations

The private and public banks both have a few flaws which upsets the customers and they
tend to shift to other banks. Here, are a few suggestions and recommendations that can be
applied so that both the banks can satisfy their customers,

I. Private banks

 The private need to create more credibility for their banks so that the customers can
trust the banks and choose their bank for opening an account or to take a loan or to
avail the other services provided by the bank.

 They also need to stop charging higher charges to the banks. These are one of the
main reasons why people tend to go to public banks. They should try and match the
levels of public banks in case of the charges charged by them. They should also stop
charging all those extra charges charged by them to provide services to its customers.

 Customer base is the most problem of the private banks. They should try to increase
their customer base by building trust with the customers regarding their banks. They
should build such a position of themselves that the people can trust their banks and
not fear of bankruptcy.

 They should also try to give the same services to all the customers and not shift to the
ones who pay more interest or are trustees of the banks. Many times, unfair treatment
is also noticed in the banks regarding the customers. The banks should treat them
fairly.

If the private banks focus on these points, it surely will be able to increase its customer base
and prosper no less than a public bank.
II. Public banks

 The public banks need to improve the way they behave with their customers. They
have to wait in long ques for their turn to come. Many employees behave rudely with
the customers. They do not care about the customers feelings. This makes banks loose
its customers.

 The public banks also need to stop harassing people over the documentation they
require. They demand for way too much documents for a loan which may not even be
required. They need to match the levels of private banks in this case. They should try
to match their standards.

 The public banks take a long time for providing any services to its customers. A
person has to visit a bank at least 2 or 3 times to get a work done. They are very slow
as compared to private banks. Even the whole loan process takes a lot of time in
comparison with the private banks.

 The public banks also need to accept and apply the latest technology for the purpose
of digital banking. They need to update their website with more information and also
make it so its easier for the customers to access their accounts online and need not
have to visit the bank personally. Its good for both, the bank and the customer.

The public bank can also improve if these suggestions are followed by the bank.
CHAPTER 8 : BIBLIOGRAPHY
8) Bibliography

 [Link]
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benefits
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 [Link]
 [Link]
CHAPTER 9 : APPENDIX
9) Appendix

This is the questionnaire prepared for the research.

Topic: A study of loans and advances offered in private and public sector

banks from the customers point of view.

Name:-

Q1) Your age group

1} 18 to 29

2} 30 to 40

3} 41 to 50

4} 50 & above

Q2) Status:-

1} Employee

2} Business person

3} Student

4} Other

Q3) Have you ever taken any loan from a bank?

• Yes

• No
Q4) Type of loan taken from the bank

1} Personal loan

2} Home loan

3} Business loan

4} Vehicle loan

5} Education loan

Q5) Loan taken from which bank

1} Axis Bank

2} Punjab National Bank

3} Other private bank

4} Other public bank

Q6) Reasons for choosing Axis bank

1} Rate of interest

2} Credibility of the bank

3} Long term but low EMI

4} Conditions better than public banks

Q7) Reasons for choosing Punjab National Bank

1} Rate of interest

2} Credibility of the bank

3} More trustworthy than private banks

4} Conditions better than other private banks

Q8) The documentation procedure while taking a loan,

1} was quicker than other banks

2} was slower than other banks

3} was complicated

4} was easier

Q9) The customer services provided by the bank,

1} were very good and satisfying

2} were very bad and unsatisfying

3} were at least better than private banks

4} were at least better than public banks

Q10) Disbursal of loan,

1} took a long time after documentation

2} was done faster than expected

Q11) The documents required for applying the loan

1} were more as compared to private banks

2} were more as compared to public banks

3} were enough but took a look a long time for acceptance

4} were enough and was accepted in a short duration

Q12) The processing fee,

1} was lower than other banks

2} was higher than other banks

Q13} Were any extra charges charged by the bank for providing loan?

• Yes

• No

Q14) Did the bank charge any prepayment charges for providing the

loan?

• Yes

• No

Q15) How was the behaviour of the employee who was dealing with

you?

1} He was kind and helped throughout

2} He did not pay much attention throughout

Q16) Did you take care of your loan through digital means?

• Yes

• No

Q17) How was experience in handling the loan activities digitally?

1} Good the technology was well updated

2} It was okay but, faced some problems

3} It was not that good an experience

Q18) Overall how was your experience of taking loan from the bank?

1} Good

2} Excellent

3} Bad