A

Research Project

On

“Customer Attitude Towards

Commercial Loan”

(A Study Conducted at JIND)

(Submitted in the fulfillment for the award of master degree in

business administration)

(Session 2009-11)

Under the guidance of:- Submitted By:-

DR. DALEEP SAURABH VERMA
Faculty Member M.B.A. HONS. 2nd SEM.
MBA IMSAR Roll No. - 2174

INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

MAHARISHI DAYANAND UNIVERSITY, ROHTAK

1
 ACKNOWLEDGEMENT

"Appreciation can make a day, even change a life. Your willingness to

put it into words is all that is necessary".

A research study cannot be completed without able and willing

inspiration, guidance and co-cooperation from various quarters.
This study also bears the imprints of much person.
I take this opportunity to express my deep sense of gratitude to
all those who directly and indirectly help me in pursuance of
this research study.

I particularly indebted to my worthy guide and mentor Dr.

Daleep Singh, who provide me with his valuable time, support
and inspiration during the pursuance of this research study.

I am also grateful to Dr. Ajay Rajan (Principal Director, IMSAR)

without whose guidance and motivational encouragement I
could not do anything. Last but not the least, I would like to
place a word of appreciation on record for all those who
directly or indirectly have helped me for the successful
completion of the project.

SAURABH VERMA

2
 PREFACE

In this project attempt has been made to understand the

customer attitude with respect to loan Schemes. The customers
studied were the residents of Jind city. Study could not be
made detailed, as there were obvious constraints of time and
resources.
The nature of present study is descriptive. It was aimed at
establishing correlation and finding inter-relationship among
various deciding factors. For this purpose the technique
random sampling was used.
On the basis of easy access sample size of 100 was
selected. Thus an attempt was made to strike a balance
between size and representative character of sample. While
analyzing, the effort was made to explore possible correlation
between consumer preference and some biographical aspect of
respondents. So that better quality of service product can be
produced resulting in consumer satisfaction and profit for the
group.

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 DECLARATION

I SAURABH VERMA, student of INSTITUTE OF MANAGEMENT

STUDIES AND RESEARCH (Maharishi Dayanand University
Rohtak) hereby declare that the research report on “Customer
Attitude towards Commercial Loan” is my original work and
has not been submitted by any other person. I also declare that
I have done my work sincerely and accurately.

SAURABH VERMA

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 RESEARCH SUPERVISOR’S CERTIFICATE

Certified that the Project Report entitled “CUSTOMER

ATTITUDE TOWARDS COMMERCIAL LOAN” Submitted to
IMSAR, MDU Rohtak for the award of degree of MBA(HONS.) is
a record of independent research work carried out by MR.
SAURABH VERMA, a research scholar MBA programme, IMSAR
under my supervision & guidance. This has not been previously
submitted for the award of any degree diploma or other similar
titles.

Rohtak
May 2010

Name
Sign of supervisor:

INTRODUCTION ABOUT THE STUDY

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  There are many financial institutes which are providing many loans
and provide many financial schemes in which commercial loans play
very important role. Financial schemes development involves raising
the socio economic status of the population on sustainable bails
through optimum utilization of resources, both human and society. The
essence of financial schemes like commercial loan is to make life easy
people have many dreams regarding their comfort, but for that
sometime they don’t have enough money. Then these banks help them
to come out from the problem. 

      Commercial loans are of two types, they are given for either
manufacturing purpose or trading purpose but both types of loan is
income generated it is also called business loan. It is given for the setup
of the industry and for the growth and development of the country.
Human needs can be fulfilled by these types of loan. This concept is
very comprehensive and multidimensional in nature. 

CONSUMER BEHAVIOUR
A consumer is an individual or a set of individuals who have an actual or
potential interest in the purchase or usage of any product, idea or a
service.
Consumer behaviour is the study of the processes involved when
individuals or groups select, purchase, use or dispose of products to
satisfy their needs and wants.
Consumer behavior is very complex phenomenon, which is considered
primarily in marketing decisions. It has been rightly said "Understand,
you do not understand, you will not understand, you cannot
understand all your customers but still you have to do your best to
understand them."
In consumer behavior this is very difficult to make a uniform theory that
may suggest that a particular individual or group will behave in a
particular manner. Consumer behavior is dynamic and to be studied
regularly. Increasing awareness, living standards and urbanization has
6
led to increase in the changing preferences and the same has forced
the marketers to change their product features, packaging styles,
distribution channels and so on. Identical products always have their
life cycle the product life cycle suggests that there is a level of maturity
of the product and after that no more consumers can be attracted for
that.
 
  INDUSTRIAL DEVELOPMENT A TASK 
      Yes
it is truly said that industrial growth and to improve economy of
India is great task for that there is lots of hard work has to done for the
setup of industry one must need money as well as infrastructure for the
development of business or firm or any organization people takes loan
from banks these loans are given for commercial purpose to generate
income either from trading or manufacturing etc. 

      Industrial growth is a complex process. It could therefore achieved

only through concentrated efforts on various front. It is rightly said it
seems that of major weak links in the rural development planning are
absence of total approach at the strategy level lack of coordinated
planning at the programmed level and weak planning components of
individual programmers. 

      Commercial loans programming or business is not successful

without adequate regional planning strong central coordination
effective local organization and people active participation at the
planning and implementation stage. 

      Industrial development can be possible if only there is proper

balance between services oriented programmed and development
oriented programmed and self centered programmed. The importance
attached to service oriented schemes besides this, has also resulted in
the wastage of precious resources.

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 WHAT IS A BANK?

Banking operations started in India as early as 1870 with the

establishment of the Bank of Hindustan, considered as the first bank in
India.
The second development in the banking sector happened with the
incorporation of the Bank of Calcutta, the Bank of Bombay and the
Bank of Bombay in accordance with the Presidency Bank's Act, 1876. All
these banks joined hands to form the Imperial Bank of India. The
reserve Bank of India was engaged in the performance of central
banking activities before the establishment of the Reserve Bank of
India.
In simple words, bank refers to an institution that deals in money. This
institution accepts deposits from the people and gives loans to those
who are in need. Besides dealing in money, banks these days perform
various other functions such as credit creation, agency job and general
service. Bank, therefore is such an institution which accepts deposits
from the people, gives loans, creates and undertakes agency work.
Banking is the mirror reflection of an economy. The performance of any
economy to a large extent is dependent on the performance of banks.
A competitive banking system requires privatisation of banks so that
the full benefits of competition can accrues to the economy.

DEFINATION OF BANK

According to Whitehead,
"A bank is defined as an institution which collects surplus funds from
the public, safeguards them, and makes them available to the true
owner when required, but also lends sums not required by their true
owner to those who are in need of funds and can provide security."

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 TYPE OF BANKS
(A) Classification on the basis of ownership banks are of the
following types:

(1) Public Sector Banks

Public sector banks are those banks which are owned by the
government. The government runs these banks. In India, 20 banks
were nationalised in 1969 and 1980. All these banks now belong to the
public sector category. Social welfare is their principal objective.

(2) Private Sector Banks

These are those Banks which are owned and run by the private sector
Like ICICI Bank belongs to this category. An individual has control over
these banks in proportion to the shares of the banks held by him.

(3) Cooperative Banks

Cooperative banks are those banks which are jointly run by a group of
individuals having equal share in these banks. The affairs of the bank
are managed by its share holders.

(B) Classification according to law

Banks are classified in to the following two categories on the basis of
Reserve Bank Act, 1934.

(1) Scheduled Banks

These are the banks having paid up capital of at least Rs 5 lacs. These
are like a joint stock company or a cooperative organization.

(2) Non Scheduled Banks

These banks are not mentioned in the second schedule of Reserve
Bank. Paid up capital of banks is less than Rs 5 lacs.

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(C) Classification according to function
On the basis of their functions, banks are classified as under:
(1) Commercial Banks
These banks make short loans to the public and business
establishments, and keep their deposits with them. Credit creations are
the principal function of these banks. Punjab National Bank, Oriental
Bank of Commerce and Allahabad Bank are examples.
Commercial Banks in India are broadly categorized into Scheduled
Commercial Banks and Unscheduled Commercial Banks. The Scheduled
Commercial Banks have been listed under the Second Schedule of the
Reserve Bank of India Act, 1934. The selection measure for listing a
bank under the Second Schedule was provided in section 42 (60 of the
Reserve Bank of India Act, 1934.
Commercial banks are joint stock companies dealing in money and
credit. A commercial bank may be defined as a financial institution that
accepts cheque from the public and also uses the money with it for
lending. The most distinctive function of a commercial bank is that it
accepts deposits called ' demand deposits ' from the public which are
cheque, i.e. with draw by means of cheques. Its essential function is to
make use of these deposits for lending to others. Commercial banks
usually give short term loans and advances. They occupy a dominant
place in the money market. The commercial banks in India are
governed by the Indian Banking Regulation Act 1949 Brought up to date
to include additional rules thereto. Under the law, commercial banks
are not supposed to do any other business, except banking. In India,
However, there is a mixed banking system. At present there are 20
Nationalised banks plus the STATE BANK OF INDIA and 7 subsidiaries
constituting public sector banking which controls over’s 90 percent of
the banking business in the country.

(2) Industrial Banks

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Industrial Banks are those banks which offer long term and medium
term loans to the industries and also work for their development
industrial Bank of India, Industrial Finance Corporation, and State
Finance Corporation are examples.

(3) Agricultural Banks

Agricultural banks are those banks that give credit to agricultural sector
of the economy. Short period loans are given to the farmers for the
purchase of seeds, fertilizers and other inputs. Long period loans are
given for making permanent improvement on land.

HISTORY OF BANKING INDUSTRY IN INDIA:

Banking in India originated in the last decades of the 18th century. The
oldest bank in existence in India is the State Bank of India, a
government-owned bank that traces its origins back to June 1806 and
that is the largest commercial bank in the country. Central banking is
the responsibility of the Reserve Bank of India, which in 1935 formally
took over these responsibilities from the then Imperial Bank of India,
relegating it to commercial banking functions.

After India's independence in 1947, the Reserve Bank was nationalized

and given broader powers. In 1969 the government nationalized the 14
largest commercial banks; the government nationalized the six next
largest in 1980.

Currently, India has 88 scheduled commercial banks (SCBs) - 27 public

sector banks (that is with the Government of India holding a stake), 29
private banks (these do not have government stake; they may be
publicly listed and traded on stock exchanges) and 31 foreign banks.

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FROM WORLD WAR 1 TO INDEPENDENCE
The period during the First World War (1914-1918) through the end of
the Second World War (1939-1945), and two years thereafter until the
independence of India were challenging for Indian banking. The years
12
of the First World War were turbulent, and it took its toll with banks
simply collapsing despite the Indian economy gaining indirect boost due
to war-related economic activities. At least 94 banks in India failed
between 1913 and 1918 as indicated in the following table:

Year Number of banks Authorised capital Paid-up Capital

s that failed (Rs. Lakhs) (Rs. Lakhs)

1913 12 274 35

1914 42 710 109

1915 11 56 5

1916 13 231 4

1917 9 76 25

1918 7 209 1

POST-INDEPENDENCE
The partition of India in 1947 adversely impacted the economies of
Punjab and West Bengal, paralyzing banking activities for months.
India's independence marked the end of a regime of the Laissez-faire
for the Indian banking. The Government of India initiated measures to
play an active role in the economic life of the nation, and the Industrial
Policy Resolution adopted by the government in 1948 envisaged a

13
 mixed economy. This resulted into greater involvement of the state in
different segments of the economy including banking and finance. The
major steps to regulate banking included:

 In 1948, the Reserve Bank of India, India's central banking

authority, was nationalized, and it became an institution owned by the
Government of India.
 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.

ROLE OF BANKS PROVIDING COMMERCIAL LOANS 

      The banking sector in India has overgrown diversified and
overstretched like many of the sprawling big cities in India it has tried
to accommodate all types of banking activities especially after the
industrial revolution. Major slice banking was acquired by the state in
its attempts to cover the commanding heights of the economy. 

      It is the public sector bank if we talk about state bank of India who is
the largest bank known for providing loans in various areas commercial
loans are one of them besides this many private banking are also come
into existence to provide many loans here we will discuss commercial
loans only .

Collateral security:
Collateral security by way of mortgage of immovable property / any
other specified securities to cover 100% of loan amount Documents:
1. Attested copy of latest salary slip of self / parent and Form 16 for
salaried employees

14
2. Income tax returns for the last 3 years for self-employed persons.
3. Pass book or bank statements for last six months
4. Proof of Age and Residence of Self / Parent.
5. Certificate / Mark Sheet of last qualifying exam.
6. Details of proposed course
7. Copy of sale agreement, share certificate, NOC from society/builder
or documents pertaining to other collateral as applicable.
Documentation 1. Promissory Note 2. D. P. Note Delivery Letter 3.
Documents pertaining to collateral security 4. Authority letter in
duplicate from borrower authorizing salary deduction or PDCs 5. No
dues affidavit 6 All documents to be signed jointly by the student and
parent / guardian.
 

TYPES OF COMMERCIAL BANKS

There are two type of commercial bank.

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(1) Public Sector Banks
Public sector banks are those banks which are owned by the
government. The government runs these banks. In India, 20 banks
were nationalised in 1969 and 1980. All these banks now belong to the
public sector category.
(2) Private Sector Banks

These are those Banks which are owned and run by the private sector
Like ICICI Bank belongs to this category. An individual has control over
these banks in proportion to the shares of the banks held by him.

BANKS INCLUDED IN THE STUDY

The banks which are included in the study are the following as under:

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A. ICICI Bank

B. IDBI Bank

C. Punjab National Bank (PNB)

D. State Bank of India (SBI)

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A. ICICI Bank at a Glance
1955: The Industrial Credit and Investment Corporation of India Limited
(ICICI) incorporated at the initiative of the World Bank, the Government
of India and representatives of Indian industry, with the objective of
creating a development financial institution for providing medium-term
and long-term project financing to Indian businesses. Mr.A.Ramaswami
Mudaliar elected as the first Chairman of ICICI Limited

2000: ICICI Bank became the first commercial bank from India to list its
stock on NYSE.

2002: ATM-on-Wheels, India’s first mobile ATM, launched in Mumbai.

2003: India’s first ever "Visa Mini Credit Card", a 43% smaller credit
card in dimensions launched.

2004: Max Money, a home loan product that offers the dual benefit of
higher eligibility and affordability to a customer, introduced, Mobile
banking service in India launched in association with Reliance Infocom,
India’s first multi-branded credit card with HPCL and Airtel launched.

2006: Introduced a new product - ‘NRI smart save Deposits’ – a unique

fixed deposit scheme for nonresident Indians.

2008: ICICI Bank enters US, launches its first branch in New York, ICICI
Bank enters Germany, opens its first branch in Frankfurt, ICICI Bank
launched iMobile, a breakthrough innovation in banking where
practically all internet banking transactions can now be simply done on
mobile phones.

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 B. IDBI Bank at a Glance
IDBI Bank is a Board-managed organization. The responsibility for the
day-to-day management of operations of the Bank is vested with the
Chairman & Managing Director and two Deputy Managing Directors,
who draw upon the support and expertise of a cross-disciplinary Top
Management Team. As on March 31, 2008, IDBI Bank had a combined
employee base of 8989, including professionals from the fields of
accountancy, management, engineering, law, computer technology,
banking and economics.

Advantages of IDBI Loans:

 Maximum Funding
 Flexibility of choosing between Floating or Fixed interest rate
 Attractive rate of interest
 EMI on daily reducing balance
 Personalised doorstep service
 Simple documentation
 Legal and technical assistance
 Balance transfer facility

Reassessment and adjustment of applicant's loan eligibility in case of

change of income and residence status

Securities accepted by IDBI bank against loans:

 Loan against Shares

 Loan against bonds
 Loan against Mutual fund units
 Loan against life insurance policies

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 Loan against NSCs / KVP

C. Punjab National Bank (PNB) at a glance

Established in 1895 at Lahore, undivided India, Punjab National Bank
(PNB) has the distinction of being the first Indian bank to have been
started solely with Indian capital. The bank was nationalised in July
1969 along with 13 other banks. From its modest beginning, the bank
has grown in size and stature to become a front-line banking institution
in India at present this bank have Largest branch network in India -
4525 Offices including 432 Extension Counters spread throughout the
country.

Amongst Top 1000 Banks in the World, ‘The Banker’ listed PNB at 255th
place. Further the leading international Credit Rating index provider,
Standard & Poor’s (2006) listed PNB, amongst the 300 World
companies & 7 Indian companies, which are expected to emerge as
challengers to the world’s leading blue chip companies.

Financial Performance:

Punjab National Bank continues to maintain its frontline position in the

Indian banking industry. In particular, the bank has retained its number
one position among the nationalized banks in terms of number of
branches, operating and net profit in the year 2006-07. The
performance highlights of the bank in terms of business and profit are
shown below:
(Rs in Crore)
Parameters March 05 March 06 March 07
Gross Profit 2404 2917 3231
Net Profit 1410 1439 1540
Deposits 103167 119685 139860
Advances 60413 74627 96597
Business 163580 194312 236457
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D. State Bank of India (SBI) at a glance
SBI, the premier Nationalized Indian Bank. State Bank of India is
actively involved since 1973 in non-profit activity called Community
Services Banking
State Bank of India is India’s largest bank amongst all public and private
sector bank operating in India
Moreover, State Bank of India has Colleges/Institutes/Training Centers
that are the seats of learning and research and development. It caters
not only to the employees of State Bank of India but also other
banks/establishments in India and abroad.

Though SBI was the clear market leader in India, the new age private
sector banks that had appeared in the Indian banking arena after the
reforms in the banking sector were introduced in the early 1990s, were
rapidly gaining on it.

These private sector banks had revolutionized the banking sector in the
country by providing top class service and introducing several
technological advancements.

According to a 2008 Reserve Bank of India (RBI) report Trend and

Progress of Banking in India, while the banking industry on an average
grew by 20 percent per annum between 2001-02 and 2006-07, the new
private banks led by ICICI Bank grew by 35 percent per annum during
the same period.The share of the private banks increased from 9
percent to 16 percent between 2002 and 2007, while that of SBI and its
associates dropped by 4 percentage points to 24 percent, according to
the same report.Analysts felt that to maintain its leadership position
and to gear itself up to meet the threat of intensified competition in the
sector post-2009, SBI was in the process of merging all its associate
banks with itself.
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 OBJECTIVES OF THE STUDY
Primary Objective:
The primary objective of the study is to know about the customer
perception & attitude towards commercial Loan in the financial sector
& also to check the customer satisfaction level towards their
commercial loan providers.

Secondary Objective:
The secondary objectives of the study were the following:
1. To know the industrial development financial schemes provided by
different players in
this segment. 
2. To know the effectiveness of industrial financial scheme.  
3. To make the comparison of commercial loan & its providers in the
financial market
with reference to Private & public sector.
4. To know the RBI role & its provision towards commercial Loan.
5. To study the different financial Institution in private sector & public
sector & their role
in the Industrial Development.
SCOPE OF THE STUDY
This research study is very important for analyzing the attitude of
the different customer. It shows the positive and negative behavior of
the customers towards a particular bank. The study is also helpful in
finding out that which bank is providing more satisfaction to the
customers in compare to the other available banks. The study is also

22
important for knowing better available option for taking loan and can
compare with another one easily.

RESEARCH METHODOLOGY
      Research is a systemic and objective process of gathering recording
and analyzing data for aid of making decision regarding a particular
problem. Research methodology is a way to systematically solve the
research problem. It may be understood as a science of studying how
research is done scientifically. In it we study the various steps, the
research process that is generally adopted to study the research
problem and basic logics behind them.     In quantitative research your
aim is to determine the relationship between one thing (an
independent variable) and another (a dependent or outcome variable)
in a population. Quantitative research designs are either descriptive
(subjects usually measured once) or experimental (subjects measured
before and after a treatment). A descriptive study establishes only
associations between variables. An experiment establishes causality.

MEANING OF RESEARCH METHODOLOGY

All business undertakings operate in the world of uncertainty. There is
no unique method which can entirely eliminate uncertainty. But
research methodology, more than any other procedure, can minimize
the degree of uncertainty. Thus it reduces the probability of making a
wrong choice amongst alternative course of action. This is particularly
significant in the light of increasing competition and growing size which
make the task of choosing the best course of action difficult for any
business enterprise. It is imperative that any type of organization in the
present environment needs systematic supply of information coupled
with tools of analysis for making sound decisions which involves
minimum risk. It is in this context that research methodology plays a
very important role.

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RESEARCH PROCESS
The research process is the step to step procedure for gaining
new knowledge with the help of proper scientific and other statistical
method with the help of data. The research process starts from defining
the problem, covers various steps involve in it and ends with the proper
result or solution of the problem. It is the process of discover new best
solution of the problem faced.
Chart of Research Process

Define the research problem and its

objectives

Review concepts and theories

Research design including sample design

Collection of data survey

Analysis of data

Interpretation and report writing

The research consisted of two stages. In the first stage, a survey was
conducted to collect the data about the people. The second stage
involved analysis of the data collected in the first stage.

24
1. RESEARCH DESIGN
The research design is a master plan specifying the methods and
procedures for collecting and analyzing the needed information.  

DESCRIPTIVE RESEARCH 

The research design of my dissertation is descriptive research

which includes surveys and facts findings inquiries of different kinds.

2. DATA COLLECTION
 The data can be collected from various sources which comes under
two categories primary and secondary as shown in the following
figure:-

Data Collection Methods

P S
Questionnaire Published Data E
R C
O
I N
D
M Scheduler Books A
R
A Y

R
Case Study Magazines
Y D
A
T
25
 Observation etc. Through Internet

(i) SECONDARY DATA

The sources of secondary data are the websites, magazines and

catalogues of different banks. The secondary data was collected from
the journals, magazines, books and from websites of the banks which
are included in the study.

(ii) PRIMARY DATA

The survey method is used for this research project. Primary data
is gathered through a survey with the help of questionnaire. A general
survey is to be conducted at JIND to gather the required data. The data
is to be collected through both the primary as well as secondary
sources. The primary source of the data is the users and nonusers of
the commercial loan.

3. SAMPLING TECHNIQUE
This is the type of technique that one uses to select the items for the
sample. The sampling method which is used in this study is simple
random sampling which is a type of probability sampling.

4. SAMPLE DESIGN 
 Target population was the people from various organization.

 Sample size was 100 people.

26
 Sampling technique used in this research is random sampling.

 Sampling area JIND city.

5. RESEARCH INSTRUMENT
      Questionnaire

A questionnaire was prepared for collecting the primary

data from the respondents. The questionnaire was developed in this
way that it can provide data from those persons also who did not take
loan yet but wants to take in coming future.

ANALYTICAL TOOL
The tools which I have applied in my research is Correlation analysis,
Hypothesis testing, percentage analysis and mean analysis, coefficient
of variation, coefficient of correlation, range of variation and the
research design framed for the study.
CORRELATION ANALYSIS:
Correlation analysis refers to the techniques used in measuring the
relationship between the variables.
According to Simpson and Kafka “correlation analysis deals with the
association between two or more variables”.
It helps in determining the degree of relationship between two or more
variables but it does not tell us anything about cause and effect
relationship.

Types:
Correlation is classified in several different ways. Three of the most
important ways are
 Positive or negative
 Simple partial or multiple
27
 Linear or non-linear
There are two types of variables
Static-Consumer preference
Dynamic- Brand Name, Price, Availability.
Reason for using Correlation: I have used correlation to show the effect
of the different factors (Price, Brand name & Availability) on the
purchase behaviour of the respondents.
RANGE
Range is the value which can be determined by subtracting the smallest
value from the largest value.
HYPOTHESIS TESTING
The chi-square test is one of the simplest and widely used non-
parametric tests in statistical work. The symbol is Greek letter chi. It
was first used by Karl Pearson’s in the year 1990. The quantity chi-
square describes the magnitude of the discrepancy between theory and
observation
Chi-square= Σ (O-E) 2
E
Where O=observed frequency
And E=expected frequency
Reason for using hypothesis testing:
By using hypothesis testing we can check that are really the different
factors affect the purchase decision for the television or not. We take
one null hypothesis (opposite of what we want to prove) and one
Absolute hypothesis (what we want to prove). If the null hypothesis get
rejected then our Hypothesis is right.
FORMULATION OF HYPOTHESIS

It is often convenient to structure a research problem in terms of a

hypothesis to be tested. The hypothesis must be agreed upon by the
both the manager and researcher, although the formal statement is
primarily the responsibility of the researcher. In this use of the word, a

28
hypothesis is worded in such a way that either one or the other is
correct. They can not both be simultaneously correct and they cannot
both be simultaneously incorrect. Second, in order for these two
hypotheses to be useful in a research decision making situation, the
decision makers should choose first act if the first is true and the
second act if the second act is true. Both statements are characteristics
of both situations in which a research problem is properly structured in
terms of hypothesis testing.
HYPOTHESIS OF THE STUDY
In context of statistical analysis, we often talk about null hypothesis and
alternative hypothesis. If we are to compare method A with method B
about its superiority and if we proceed in the assumption that both
method are equal good, then their assumption is termed as Null
hypothesis. When we are starting that method A is superior or the
method B is inferior, it is stated as Alternative hypothesis.
CHI SQUARE AS A TEST OF HOMOGENIETY:

Number of people considering commercial loans for business

Business Non- TOTAL
purpose business
purpose
Strongly Favors 30 20 50
Moderately Favors 20 10 30
Some how Favors 10 5 15
Not in Favors 0 5 5
TOTAL 60 40 100

STEP 1:
Ho: People prefer commercial loans for business.
H1: People not prefer commercial loans for business.
STEP 2:

29
The rejection and non rejection regions are to be determined. The
significance level is 5 %. As the homogeneity test is right tail, the area of
the rejection region is 0.05, which lies in the right tail of the chi square
distribution curve.
As this contains five rows and two columns, the degree of freedom is:
df = (r-1) (c-1) =
(5-1)(2-1)=4 From Appendix Table5, the critical value of chi square for
4df and alpha=0.05 area in the right tail of the chi square distribution
curve is 9.488.
We have to calculate the value of the test statistic. For this purpose, it
is now necessary to calculate the expected frequencies (E). The
expected frequencies are calculated on the basis of the following
formula.
E= (Row total) (Column total)/Total number of observations

WORKSHEET FOR CALCULATING CHI SQUARE

For Business purpose For none

Business Purpose
OBSERV EXPECTE OBSERVE EXPECTE
ED D D D
Strongly Favors 30 25 20 8

Moderately Favors 20 12 10 9

Some how Favors 10 7 5 4

Not in Favors 0 0 5 2

Chi square=∑ (Oi-Ei)2/Ei

30
= (30-25)2/25+ (20-12)2/12+(10-7)2/7+(0-0)2/0+(20-8)2/8+(10-9)2/9+(5-
4)2/4+(5-2)2/2
= 1+5.33+1.28+0+18+0.11+0.25+4.5
= 30.47
Make a decision- The value of the test statistic of chi square = 8.934 is
lesser than the critical value of chi square =9.488 for 4 degrees of
freedom at 0.05 level of significance. As such, the calculated value falls
in acceptance region. We therefore, accept the hypothesis and
conclude that the consumer used commercial loans for business
purposes.

31
 ANALYSIS AND INTERPRETAION
Q.1 What is your occupation?
Businessman 61
Traders 17
Contractors 12
Other 10

Occupation Chart

Other
10%
Contractors
12% Businessman
Traders
Contractors
Traders Businessman
17% 61% Other

Interpretation:-
There were one hundred respondent in the survey out of
which 61% were businessman, 17% were traders, 12% were contractors
and 10% were others. This analysis shows that businessmen were more
in the study and 10% were those respondents whose occupation was
different from the others. This analysis also shows that most of people
like to be businessman as compare to other options included in the
study.

32
 Q.2 Have you taken any commercial loan or plan?

Yes 78
No 22

Loan Taken Chart

No
22%

Yes
No

Yes
78%

Interpretation:-
As the analysis shows:-
 There were 78% people who have taken loan from any financial
institute in order to establish their self or for some other purpose.
 Only 22% were those did not take the loan facility so they did not
enjoy the loan benefits.
 According to the persons who have taken the loan facility, loan is
the easy way to finance.
 It also provides the help in establishment, the required fund for
trading, for the settlement of the debts and other various different
purposes.

33
 Q.3 If yes then which bank you preferred?
ICICI 21
IDBI 26
SBI 11
PNB 14
Other 06

Bank Preferred Chart For Loan Taken

Other
8% ICICI
PNB 27%
18% ICICI
IDBI
SBI
PNB
SBI
14% Other
IDBI
33%

Interpretation:-
As the analysis shows I included the four banks in my study.
The above charts represent the following:-
 The persons who have taken loan from the different banks out of
them 33% have taken loan facility from IDBI bank, 27% from ICICI bank,
18% from PNB, 14% SBI and remaining 8% from other banks.
 This analysis shows that the persons showed their interest
towards IDBI bank more as compare to ICICI bank, PNB and SBI etc.
After IDBI bank the customer showed their interest towards ICICI bank.

34
 Q.4 How did you come to know about schemes?

From 41
Advertisement
Bank 19
Employees
From Relative 11
Other 07
Knowing Factor for Scheme

Other
9%
From Relative From Advertisement
14% From Bank Employees
Advertisement
From Relative
53%
Bank Other
Employees
24%

Interpretation:-
This analysis shows that how the loan seeker became aware
about the scheme. According to the survey conducted:-
 53% persons got the information of the availed scheme fro the
advertisement given by the bank for promoting the commercial loan
scheme.
 24% persons got the information of the availed scheme by the
bank employees.
 14% said that they got the information about the available loan
scheme from their relatives.
 9% people got the information from other related source.
35
  Q.5 Are you getting tax benefit on your loan scheme?

Yes 29
No 49

Getting Tax Benefit on Loan

Yes
37%
Yes
No
No
63%

Interpretation:-
This analysis shows that the loan takers are getting any tax
rebate through the loan scheme or not. As the survey was conducted
following results occurred:-
 63% people are not getting the tax rebate through the loan
scheme. The reason was that they were not aware about the tax rebate
on the loan.
 37% people said that they are getting the tax rebate on their loan
scheme.

36
 Q.6 Are you satisfied towards your existing commercial loan?

Highly Satisfied 19
Satisfied 39
Dissatisfied 13
Highly 07
Dissatisfied

Satisfaction Chart

Highly
Dissatisfied
9% Highly Satisfied
24%
Dissatisfied Highly Satisfied
17% Satisfied
Dissatisfied
Highly Dissatisfied
Satisfied
50%

Interpretation:-
This analysis shows the satisfaction level of the persons who
are either enjoying or has enjoyed the loan facility from the different
banks. As the analysis represents:-
 24% persons are highly satisfied from their existing commercial loan,
50% are satisfied, 17% are dissatisfied and 9% are highly dissatisfied.
 According to the conducted interview the main reason for highly
satisfaction was easily availability of the loan and low interest rate as
compare to other banks.
 The main reason for satisfaction was that the bank helped them for
providing the required fund in time when needed.
 The main reason for dissatisfaction was that you can not delay in the
payment of installment. You have to pay installment in time either
there are sufficient fund is available or not for paying the installment.

37
 Q.7 Do you have any problem regarding your existing commercial
Loan?

Yes 18
No 60

Problem with Existing Loan Scheme

Yes
23%

Yes
No

No
77%

Interpretation:-
As the 78 persons are enjoying the loan scheme so there is
only 78 persons for this analysis because this analysis is related with the
loan taker only. This analysis shows that the loan taker has any problem
in regard to his commercial loan scheme or not. As the charts shows:-
 77% persons have not any problem from their existing commercial
loan scheme because the bank is providing the satisfactory service to
them.
 23% customers have the problem from their existing commercial
loan scheme. They are less satisfied from their loan scheme due to
various reasons.
 The main reason behind the problem is that the bank provides the
less information to them in regard to loan.

38
 Q.8 What do you think about the services & information provided by
your lender?

Best 04
Better 06
Good 26
Average 28
Poor 09
Very Poor 05

Service Chart

Very Poor
Best
6% Better
5%
8%
Poor Best
12%
Better
Good
Good Average
33% Poor
Average
Very Poor
36%

Interpretation:-
The above designed chart represents the level of service and
information provided to the loan taker. According to the person who
have taken loan:-
 5% person believes that their bank provides the high level of
service and information to them as required.
 8% says that their bank is providing the better services and
information as compare to other banks.
 33% says that their bank is providing the good services and
information to them.
 36% says that their bank is providing the services and information
when ask them.
 12% says that their bank is providing the poor services and the
required information to them.
39
 Q.9 Are you satisfying with the scheme availed for you?

Yes 56
No 22

Satisfaction from Loan Scheme

No
28%

Yes
No

Yes
72%

Interpretation:-
This chart shows that how many persons are satisfied from
the current loan scheme which one is adopted by them. According to
the above analysis:-
 72 % people are satisfied from their existing commercial loan scheme.
 28% are not satisfied from their existing commercial loan scheme.
 The main reason for dissatisfaction is that the new scheme is more
beneficial as compare to the adopted scheme because of flexibility and
low interest rate.

40
 Q.10 In your view interest rate is?

High 29
Moderate 37
Low 12

Interest rate Chart

Low
15%
High
37% High
Moderate
Low

Moderate
48%

Interpretation:-
This chart shows the views of different persons in regard to the interest
rate on the loan. According to this:-
 37% people say that the interest rate charged on their
commercial loan is higher as compare to other.
 48% people say that the interest rate charged on their
commercial loan is reasonable. This is neither low nor high as compare
to other.
 15% people think that the interest rate charged on their loan
is low as compare to other banks because some banks are charging
higher rate of interest on loan.

41
 Q.11 What type of security is taken by your lender against the Loan?

Fixed Assets 57
Personal 09
Guarantee
Both 12

Security Taken Chart

Both
15%
Personal
Fixed Assets
Guarantee
12% Personal Guarantee
Both
Fixed Assets
73%

Interpretation:-
This chart shows that which security is taken by the banks
for providing the commercial loan. According to the analysis:-
 73% people say that their bank demand for the fixed assets
documents as security in order to escape from the risk.
 12% says that their bank provides the loan on the basis of
personal guarantee.
 15% says that their bank provides the loan after getting the fixed
assets as security and the personal guarantee.
 These days most of banks take the both personal guarantee and
fixed assets as security but because the study was conducted at JIND so
there the banks mainly concern on fixed assets most.

42
 Bank Preferrence Chart For Future Loan

Other
7%
Q.12 If you did not take loan then in future which bank you will prefer
SBI
for commercial loan?4% ICICI ICICI
35%
IDBI
ICICI PNB 10
PNB
29%
IDBI 07 SBI
PNB 08 Other
SBI 01
IDBI
Other 02 25%

Interpretation:-
This graph represents the views of those persons who did
not take the commercial loan but now wants the loan for settling the
various tasks and projects.
 According to this analysis 35% would like to go with ICICI bank for
taking the loan in future, 29% would like to go with PNB, 25% would
like to go for IDBI, 4% with SBI and 7% would like to go with other
banks.
 This analysis shows that in these days the person gives more
importance to the ICICI bank.
 After ICICI bank they would like to go with PNB, IDBI, and SBI etc.
43
Q.13 What parameters you are considering before taking the Loan?

Rate of Interest 39
EMI 09
Amount of Loan 48
Other 04

Parameters Considering Before Loan Taken

Other
4%

Rate of Interest
Rate of Interest
39%
EMI
Amount of Loan Amount of Loan
48%
Other

EMI
9%

Interpretation:-
This chart shows that which factor influences more to the
loan seeker. What are the factors which the loan seekers consider
before taking the loan? The above chart represents that there are 39%
persons who give importance to the rate of interest when taking the
loan, 48% give the importance to the amount of loan instead of rate of
interest and amount of EMI, 9% give preference to the amount of EMI
whenever 4% persons are also who consider the other factor than rate
of interest, EMI and amount of loan. The other factor can be easily
availability of loan etc

44
 Q.14 For which purpose you are taking or have taken commercial
loan?

Manufacturing 31
Trading 43
Establishment 20
Other 06

Loan Purpose

Other
6%
Establishment Manufacturing
20% 31%
Manufacturing
Trading
Establishment
Other

Trading
43%

Interpretation:-
This chart represents the purpose of the loan taker. This
shows the reason why a loan seeker wants to get the loan from the
bank. What is the purpose of getting the loan? This shows where an
individual want to utilize the amount of fund for which purpose he/she
is taking the loan. According to the survey:-
 It was found that 43% persons want the loan for the purpose of
trading.
 31% persons want the loan for the purpose of manufacturing for
producing the goods and services for the customers in order to make
the profit for their organization.
 20% persons want the loan for establishing organization setup.
45
 Q.15 What factors influence you to go for the scheme?

Easy Availability 41
Low Interest 48
Rate
Amount of Loan 09
Other 02

Influencing Factor Chart

Other
2%
Amount of Loan
9% Easy Availability
Easy Availability
41% Low Interest Rate
Amount of Loan
Low Interest Other
Rate
48%

Interpretation:-
The above chart represents the available factor in the
scheme of loan of the loan seeker which influenced those most.
According to the survey conducted at JIND city :-
 48% persons were influenced to go with the loan scheme because
the interest rate charged on the loan is low. These persons say that
they will consider only low interest rate for taking the loan.
 41% people give preference to the easy availability of loan. They
think that loan should be available easily so that every loan taker can
utilize the amount of loan immediately when needed. There should not
be extra delay in loan sanctioning.
 9% persons say that amount of loan should be according to their
need. Some banks provide lesser amount than the required amount by
the loan taker.

46
 Q.16 According to you which bank is providing the best services these
days?

ICICI 28
SBI 13
IDBI 25
PNB 21
Other 13

Best Service Provider Bank

Other
13% ICICI
28% ICICI

PNB SBI
21% IDBI
PNB
SBI Other
13%
IDBI
25%

Interpretation:-
This chart shows the credibility of the banks among the people. This
shows how much persons give the importance to which bank. As I
included four banks in my study so the above analysis represents the
credibility of the persons in regards to these banks only. According to
the survey conducted:-
 28% persons believe that ICICI bank is providing the best services
as compare to the other banks.
 25% persons think that IDBI is providing quick and best services
among all banks.
 21% believe that PNB is providing better services as compare to
other banks.
47
 13% believe that SBI is providing best services because there is
most number of ATM’s all over the country of SBI.
 Whenever 13% persons think that other banks provide the better
services as compare to the ICICI, IDBI, SBI and PNB

Q.17 Do you want to give any suggestion for the commercial Loan
services?

Yes 19
No 81
Suggestion for Commercial Loan Service

Yes
19%

Yes
No

No
81%

Interpretation:-
This representation shows that how many persons want to
give their suggestions in regard to the commercial loan scheme.
According to the survey conducted:-
 19% persons provide their suggestions in regard to improve the
commercial loan scheme.
 81% persons did not like to give any suggestion in order to
improve the commercial loan scheme. According to them the current
commercial loan scheme are not so bad.
 The suggestions provided by the persons are mostly give the
preference to the quick service in the commercial loan scheme. They
think that commercial loan scheme should be faster as compare to the
current scheme. The documents verification should be fast so that the
loan can be provided within the reasonable time so that the loan takers
can also utilize the amount according to the need within the required
time period.
48
 SUGGESTIONS
1. The all commercial banks should review their loan schemes time to
time.

2. The loan scheme should be according to the need of the customer.

3. The terms and conditions of the bank should be cleared to the

customer.

4. The all required information should be given to the customer about

the loan scheme.

5. The loan scheme should be flexible.

6. Most of the people get loan awareness through advertisement so

the banks should give advertisement of the loan schemes.

7. Bank should also try to make procedures more simplified for people.

8. The banks should try to see from time to time that application
submitted to banks under commercial loan are dealt promptly 

9. Invest more in marketing activates so as to impart knowledge among

peoples regarding the availability to the commercial loan  

49
10. To make procedure transparent enough so as to avoid any fraud
and obtaining people confidence.

50
 LIMITATIONS OF THE STUDY

1. Various hindrances occurred while carrying out the research. They

have acted as limitation of the study and a few of them are:-

2. Short time period: The time period for carrying out the research was
short as a result of which many facts have been left unexplored.
3. Small area for research: The area for study was Panipat which is
quite a small area to judge out the consumer preferences for the
commercial loan.
4. Lack of resources: Lack of time and other resources as it was not
possible to conduct survey at large level.
5. Small number of respondents: Only 100 respondents have been
chosen which is a small number to represent the whole of the
population of Panipat.
6. Unwillingness of respondents: When collecting the data many
consumers were unwilling to fill the questionnaire.
7. Respondents were feeling wastage of time for them. They thought
that they could utilize this time to any where else instead of filling
questionnaire. They thought that what the benefit of filling up the
questionnaire is for them.

51
 CONCLUSION
At last I derived the following suggestions from my study:-

 These banks make a periodic review of commercial loan to evaluate,

identification, formulation, release and use of funds.

 The most of people were aware about the loan schemes available for
them.

 Overall in the jind city 78% people were enjoying the loan schemes
out of which most of persons were the businessmen.

 Most of people preferred IDBI bank for taking the commercial loan
schemes.

 SBI was preferred only by 14% people.

 The most of persons came to know about the scheme of commercial

loan through advertisement given by the bank.

 There were only 37% people who were getting the tax rebate
through loan scheme. The main reason for this low percentage was
that the most of persons were not aware about tax rebate available
through loan scheme.

 There were 24% people who were highly satisfied from their loan
scheme and 50% were average satisfied.

 17% people were dissatisfied and 9% people were highly dissatisfied

because their bank did not provide the full information when needed
or demanded by the customer. Sometimes information was available
after delay.

52
 77% persons have no problem with their existing commercial loan
scheme whenever 23% are those people who have any problem with
their existing commercial loan scheme. The main reason for problem
was that there was no option for the full payment in between the
loan scheme term and unnecessary delay in the information.

 48% of the persons said that the interest rate on their current
commercial loan scheme is moderate, 37% persons said that the
interest rate is higher and 12% persons said that it is lesser in
compare to other banks.

 73% persons disclose that the bank preferred fixed assets as the
security against the loan scheme and 15% said that fixed assets and
personal guarantee both were taken as security by the bank.

 The persons who did not take any loan scheme yet out of them 35%
would like to take loan from ICICI bank.

 48% of persons consider the amount of loan and 39% of persons

consider rate of interest as the considering factor before taking the
loan.

53
 QUESTIONNARE
Dear respondent,
I am conducting the survey on “Customer Attitude Towards
Commercial Loan” which is a part of M.B.A. Program. All the
information provided by you will be kept secret & will be used
exclusively for academic purpose.

Q.1 What is your occupation?

(a) Business man (b) Traders
(c) Contractor (d) Other ……………………..

Q.2 Have you taken any commercial loan or plan?

(a) Yes (b) No

Q.3 If yes then which bank you preferred?

(a) ICICI (b) IDBI
(c) SBI (d) PNB
(e) Other …………………….

Q.4 How did you come to know about schemes?

(a) From Advertisement (b) Bank Employees

54
 (c) From Relative (d) Other ……………………..

 Q.5 Are you getting tax benefit on your loan scheme?

(a) Yes (b) No

Q.6 Are you satisfied towards your existing commercial loan?

(a) Highly Satisfied (b) Satisfied
(c) Dissatisfied (d) Highly Dissatisfied

Q.7 Do you have any problem regarding your existing commercial

Loan?
(a) Yes (b) No

Q.8 What do you think about the services & information provided by
your lender?
(a) Best Service (b) Better Service
(c) Good Service (d) Average Service
(e) Poor Service (f) Very Poor Service

Q.9 Are you satisfying with the scheme availed for you?
(a) Yes (b) No

Q.10 In your view interest rate is?

(a) High (b) Moderate
(c) Low

Q.11 What type of security is taken by your lender against the Loan?
(a) Fixed Assets (b) Personal Guarantee
(c) Both

Q.12 If you did not take loan then in future which bank you will prefer
for commercial loan?
55
 (a) ICICI Bank (b) IDBI Bank
(c) PNB (d) SBI
(e) Other

Q.13 What parameters you are considering before taking the Loan?
(a) Rate of Int. (b) EMI
(c) Amount of Loan (d) Other ……………………..

Q.14 For which purpose you are taking or have taken commercial
loan?
(a) Manufacturing (b) Trading
(c) Establishment (d) Other ……………………..

Q.15 What factors influence you to go for the scheme?

(a) Easy Availability (b) Low Interest Rate
(c) Amount of Loan (d) Any other ………………

Q.16 According to you which bank is providing the best services these
days?
(a) ICICI (b) SBI
(c) IDBI (d) PNB
(e) Other ……………………..

Q.17 Do you want to give any suggestion for improving the

commercial Loan services?
(a) Yes (b) No

If yes please write your suggestion here:

……………………………………………………………………………………………………………
………………………………………………………………………………

56
Dear respondent thank a lot for your kind information and time given
for this survey. I again thank you for the co-operation.

57
 BIBLIOGRAPHY 

 Bhole L M Financial Institutions and Markets Tata McGraw hill

third edition
 Sundaram Satya industrial development Himalaya publishing
house first edition
 Desai Vasant the Indian financial system
 Marketing management by Philip Kotler
 websites
www.icicibank.com
www.idbi.com
www.pnbindia.com
www.statebankofindia.com
www.altavista.com
www.scribd.com
www.google.com

58