Maleeha Nazir Project (18036114001) MBA4th Sem

A PROJECT REPORT
ON
Title of your Project
“POTENTIAL OF MICRO-FINANCE OF J&K BANK”
MASTERS of Business Administration

(MBA)
Submitted By
Maleeha nazir
Registration No. 18036114001
IQBAL INSTITUTE OF TECHNOLOGY &

MANAGEMENT
Sheeshgaribagh, Srinagar – 190014
AFFILIATED TO
UNIVERSITY OF KASHMIR
BATCH 2018
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Potentials of Microfinance-a review of J&k Bank
A PROJECT REPORT
ON
Title of your Project

“POTENTIAL OF MICRO-FINANCE OF J&K BANK”
MASTERS of Business Administration (MBA)
UNIVERSITY OF KASHMIR
IQBAL INSTITUTE OF
TECHNOLOGY &
MANAGEMENT
Submitted By
MALEEHA NAZIR
Registration No. 18036114001
Under The Guidance Of
Name of the Mentor/External Supervisor Mr. Adil Mehraj

Designation of the mentor Lecturer
Name of the organization Department of Management Studies
IITM
BATCH 2018
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Dedicated to
***************
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DECLARATION
I hereby declare that the project entitled “POTENTIALS OF MICRO-FINANCE ” has been
pen-locked by me during my Summer Internship Programme at “J&K BANK”, under the
valuable guidance of “name of your external guide” and under the supervision of “Mr.Adil
Mehraj” in partial fulfillment for the degree of the MBA from university of Kashmir.
I also declare that this project report is the result of my own effort and has not been
submitted to any other university or organization before.
Maleeha Nazir
REG. NO: 18036114001
Place: Srinagar
Date:
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IQBAL INSTITUTE OF
TECHNOLOGY AND MANAGEMENT
CERTIFICATE
This is to certify that “Maleeha Nazir”, the student of Department Of Management
Studies, Iqbal Institute of Technology & Management has carried out a project entitled
“POTENTIALS OF MICRO-FINANCE OF J&K BANK”
This has been performed in partial fulfillment of his Master’s Degree in Business
Administration (MBA) from University of Kashmir. The project finds less scope for duplication
and plagiarism and has not been submitted for award of any other degree, diploma or course in
any university or institute. The study has been completed within the time schedule as prescribed
under the University Statutes.
We wish him/them all the success in his future endeavors.
Mr./s. ********
Head, Department of Management Studies
IITM
Place: Srinagar.
Date:
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ACKNOWLEDGEMENT
First of all, I would thank Almighty ALLAH who gave me each & every devise of
uplifting myself that I ever desired.
I would like to express gratitude for venerated “J&K BANK” for providing all the
indispensable requirements that I needed in order to carry out my project. I would also feel a
deep sense of gratitude to my beloved and highly esteemed Department of Management Studies,
IITM for growing me into true connoisseurs.
It is my privilege to thank “NAME OF EXTERNAL GUIDE” for his immense support
throughout my study. I wish to thank “NAME OF THE MANAGER/HEAD OF YOUR
OGNASIATAION” for his support and encouragement throughout the Project. I am very much
obliged to “NAME OF INTERNAL GUIDE” for guiding me and allowing me to carry out the
project work in the aforesaid organization. I am grateful to my beloved parents & my friends for
their encouragement, which is the greatest source of my inspiration.
Maleeha Nazir
Place: Srinagar
Date:
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S.NO CONTENTS PAGE NO.
1 Executive Summary 9
2 Micro Finance 11
3 Background 12
4 Research Methodology 13
5 Requirement Of Micro Finance 14
6 The Target Group 15
7 How Does Micro Finance Help The Poor 16
8 Micro Finance In India 19
9 Micro, Small and Medium Enterprises Development (MSMED) 20
10 Top Microfinance Institutions 22
11 Company Profile 23
12 Brand Identity 25
13 Mission And Vision Of The Bank 27
14 SWOT Analysis 29
15 Product And Services Of J&K Bank 30
16 Board Of Directors 32
17 Organisational Structure 35
18 Functional Departments Of The Organisation 36
19 J&K Banks Microfinance 39
20 Microfinance Outreach- Global Scenario 63
21 Present Scenario Of India 64
22 Data Analysis 68
23 Conclusion 70
24 Findings 71
25 Suggestions 73
26 Bibliography 75
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Executive Summary
Indian banking system, which is among the largest banking networks in the world, did not reach most of
the rural poor in India. About 70% of the Indian population from rural areas accounted for only 30% of
bank deposits. The banks did not meet the credit requirements of the poor and they were forced to fall
back on moneylenders for credit. Though the banks were nationalized, they perceived rural credit to be a
high risk and high cost proposition.
The rural borrowers were bogged down by elaborate procedures that were required to obtain
loans. The central bank in India, RBI, on its part, tried to cater to the needs of the rural poor by
establishing regional rural banks and cooperative banks, but did not meet with success. In the early
1990s, to provide credit and savings services to the poor, microfinance was envisaged. It received
further boost with involvement of several non-governmental organizations and microfinance
institutions. These efforts led to formation of Self Help Groups (SHGs), where poor from homogenous
background formed into groups of around 20 each and pooled money that was lent to the needy in the
group. By the mid 1990s, several mainstream banks began providing credit and savings facilities to
SHGs that built credible financial discipline. The program was called SHG ± Bank linkage program. Over
the time, the banks provided other facilities like housing loans and micro insurance services to the poor.
There were for profit MFIs, mutual benefit MFIs and not for profit MFIs that participated actively in
spreading microfinance initiatives across India. By 2004, there were around1,000 MFIs in the country.
Realizing under lying potential of microfinance, several commercial banks entered into partnership
with MFIs. Both banks and MFIs stood to benefit from this association as banks could reach the
interior part of the country and MFIs could access more funds and thus reach more people. With the
huge potential and low NPAs, several private and foreign banks, unveiled their plans to enter the Indian
microfinance sector. The government and the RBI announced several measures to boost microfinance
activities in the country. RBI allowed the NGOs involved in microfinance activities to raise External
Commercial Borrowings up to US$ 5million a year. With increase in competition and availability of
funds, the Indian microfinance sector could be the ultimate beneficiary. Still there are several poor,
who were not under the purview of microfinance, the number of SHGs and microfinance programs did
not have any major impact on poverty alleviation in the country.
Only in some of the well-developed states in the country, SHGs and microfinance gained
popularity. Lot of ground work was required to spread microfinance activities in North and North East
regions of the country.
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The purpose of this study is to understand the mechanism of Micro-finance in J&K STATE, and its
potential in J&K STATE with respect to J&K BANK.
The study was descriptive in nature and contained detailed interviews with Managers (1-level, 2-level,
and 3-level) and bank officials of J&K Bank for understand the potential of Jammu & Kashmir Potential in
terms of Micro-finance. The secondary data was collected during the study it include Annual reports of
bank, different websites, books etc.
The man focus of study was to know the potential of micro-finance of Jammu and Kashmir bank and
different schemes of Jammu and Kashmir bank in-terms of micro-finance. Time constraint (only 45
days), money constraint and situation in the state were the study was conducted contributed to the
limitation of the study.
The J&K State is 19th populous state of Country .However stands second last in case of literacy
positioned after Bihar. We also stand in the bottom four in case of employment. Still only 3.8% of our
population is below poverty line, which shows that people here are skilled in various craftsmanship and
so self made which again depict huge potential for micro enterprises in J&K.
According to one survey we have 27 Handicraft Federation in J&K with around 270 SHG’s and 2700
members
The analysis of the study
The study among others has the following findings
 The J&K Bank is the only Bank in the state having about more than one third of the total credit
share in the STATE.
 The J&K Bank is the only in the state which has provided the credit to the
Tourism industry.
 The potential in the under – financed productive sectors like, tourism, Handicrafts, Dastkar
finance and Agriculture commodities and in the artisan sector & zafran has not been fully taped by
the J&K Bank.
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 The J&K Bank has established the credit counseling centers in the every district of the STATE,
which helps the people in getting information regarding various lending schemes of the bank.
During the internship I have worked in loans & advances department, the opportunity help to see
firsthand way of working of officials in loans & advance department. I was given ample opportunity to
see how different loans are granted and the terms and conditions for granting of micro-finance loans.
Micro Finance
Micro Finance is a source of financial services for entrepreneurs and small businessmen, lacking access
to banking and related services. The two main mechanisms for the delivery of financial services to such
clients are:-
 Relationship based banking for individual entrepreneurs and small businesses.

 Group based models, where several entrepreneurs come together and apply for loans and
other services as a group.
The concept of micro finance was pioneered in 1976 by Mohd. Yunus founder of Grameen bank in
Bangladesh.
Micro finance is a general term to describe financial services to low income individuals or to those who
do not have access to typical banking services.
Micro finance is also the idea that low-income individuals are capable of lifting themselves out of
poverty if given access to financial services.
Micro finance is a broad category of services, which include microcredit. Microcredit is provision of
credit services to poor clients. Microcredit is one of the aspects of microfinance and the two are often
confused.
BACKGROUND
NEED FOR MICRO-FINANCE: THE GAP BETWEEN DEMAND AND
SUPPLY
Since the 1950,s various governments in India have experiments in India have
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Experimented with a large number of grant and subsidy based poverty alleviation progmmers’. Studies
show these mandatory and dedicated subsidized financial programmers'. Implemented through banking
institutions, have not been successful in meeting their social economic objective:
The common features of these programmers were:
1. Target orientation
2. Based on grant /subsidy, and
3. Credit linkage through commercial banks.
These Programmers
a. Were often not sustainable.
b. Perpetuated the dependent status of the beneficiaries.
c. Depended ultimately on government Employees for delivery.
d. Led to misuse of both credit and subsidy and
e. Were treated at best as poverty alleviation interventions.
This thing was totally ignored by the banks. The reason behind this was that, Banks too never really look
on them as a profitable and commercial activity. According to a 1995 World Bank estimate, in most
developing countries the formal financial system reaches only the top 25% of the economically active
population-the bottom 75% have no access financial services apart from money lenders'. In India to the
formal financial institutions have not been able to reach the poor householder, particularly, women in
the unorganized sector. Structural rigidities and overheads lead to high cost of making small loans.
Organizational philosophy has not been oriented towards recognizing the poor as credit worthy. The
problem has been compounded by low level of influence of the poor, either about their credit
worthiness or their demand for savings services.
Large banks at government request have often implemented micro-finance programmers'. Low levels of
recovery have been further eroded due to loan wavier programmers'.Lending to institutional
disenchantment with lending to small borrowers.
All this gave rise to the concept of micro-credit for the poorest segment along with a new set of credit
delivery techniques. With the support of NGO, s an informal sector comprising Small Self Help Groups
(SHGs) [Definition of SHGs in Box-A] started mobilizing savings of their members and lending these
resources among the members on a micro scale. The potential of these SHGs to develop as local
financial intermediaries to reach the poor has gained recognition due to their community based
participatory approach and sustainability-recovery rates have been significantly higher than those
achieved by commercial banks in spite of loans going to poor, unorganized individuals without security
or collateral
SHG Definition
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A Self-Help Group (SHG) is a registered or unregistered group of micro entrepreneurs having

homogenous social and economic background voluntarily, coming together to small amount
regularly, to mutually agree to contribute to a common fund and to meet their emergency needs on
mutual help basis. The group members use collective wisdom and peer pressure to ensure proper end
use of credit and timely repayment thereof. In fact, peer pressure has been recognized as an
effective substitute for collaterals.
Advantages of financing through SHGs

Economically poor individual gain strength as part of a group. Besides, financing through SHGs
reduces transaction costs for both lenders and borrowers. While lenders have to handle only a single
SHG account instead of a large number of small-sized individual accounts, borrowers as part of a SHG
cut down expenses on travel (to & from the branch and other paces) for completing paper work and
on the loss of workdays in canvassing for loans.
Success stories in neighboring countries, like Grameen Bank in Bangladesh, Bank Rakiat in
Indonesia, commercial & industrial Bank in Philippines etc. gave further boost to the concept in India in
the 1980s.
The Global summit on Micro-Finance held in Washington in feb.1997 set a global target of covering 100
million poor families with credit by 2005. It was accepted that 25-30 million of these could be in India
alone.
The poor in India define the micro-finance market. The Planning Commission estimate of 1993-
94 says36% of the population or 320 million people live below the poverty line, out of which
140-150 million are women. Assuming that only 30% of -finance as a method of poverty alleviation, it is
estimated that 40-50 million poor women would need credit.
As against this, it is estimated that all agencies in India engaged in the provision of micro-finance
services, would have together covered barely 1 million poor people by the close of 1998-99
The most prominent national level micro-finance apex organization providing micro finance
services for women in India is the National Credit Fund for Women or the Rashtriya Mahila Kosh (RMK).
Objectives of the Research:

1. To objective of the research is to understand concept of Microfinance.
2. To find out existing Structure of Microfinance in India.
3. The main objective of the research is to find out Potential of Microfinance in
Jammu & Kashmir bank.
4. To understand Microfinance structure in J&K Bank and to Find out Flaws if any.
Scope of study:
The research study was done to understand the micro-finance of Jammu and Kashmir and how it helps
to reduce the poverty and the menace of unemployment in state. For this purpose the data was
collected both primary and secondary. The main focus of study was to know the potential of Micro-
Finance of Jammu & Kashmir bank and to understand the different schemes of the bank in-terms of
micro finance and to understand the importance of micro-finance today world.
During the study the researcher studied the different schemes, criteria under which the micro-finance
(micro-credit) is granted to customers.
Source of Information:
Primary Source: it is the first hand collection of data from the Managers by Face to face interview.
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Secondary Source: This is the second data that has already by collected by others. It includes data collection
through
 Magazines
 Journals
 Internet
Research methodology:
This chapter deals with the methodological steps adopted in the present study. The
research procedures followed are described under the following headlines:
 Selection of locale
 Selection of sample
 Tools and techniques used in the study
 Procedure for data collection
 Analysis
Tools and technique used in the study:
Primary Data:
Personal Interview.
Secondary Data: Journal and other research reports.

Interview
Interview is a Screening of information through a professional conversation with Managers for a
research study or to aid in social diagnoses or treatment. The interview is in a sense, their foundation
upon which all other elements rest, for it is the data gathering phase.
RESEARCH DESIGN
Fundamental to any marketing research project is a sound research design. A good research design has
certain characteristics viz. problem definition specific method of data collection and analysis etc;
A Research design is purely and simply the frame work or plane for a study that guides the collection
and analysis of data in this descriptive research method was adopted.
DATA COLLECTON
Data collection is an essential part of every project. Success or failure of any project entirely depends on
the method of collection of data. The data can be collected by the following two ways.
 a) PRIMARY SOURCE
 b)SECONDARY SOURCE
In this project, primary data was collected from the Managers through face to face interviews
The information brochures of the bank and articles in newspapers have been consulted as a
secondary source of information. Secondary data has also been collected through the various
websites on the Internet.
Contact method- The respondents were contacted personally.
 Sampling plan
 Population:-The managers operating in District Baramulla.
 Sample unit:- Any manager of the J&K bank.
 Sampling Procedure:- Convenience Sampling
 Sample size:- 50 Mangers (1 level 2nd level 3rd level)
 Technique for Data Analysis:- Analysis of data is explained with the help and Bar Graphs and
tabular representation.
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Requirement of Micro-finance
The lack of access to credit for the poor is attributable to practical difficulties arising from the discrepancy
between the mode of operation followed by financial institutions and the economic characteristics
and financing needs of low-income households. For example, commercial lending institutions require
that borrower s have a stable source of income out of which principal and interest can be paid back
according to the agreed terms. However, the income of many self employed households is not stable,
regardless of its size. A large number of small loans are needed to serve the poor, but lenders prefer
dealing with large loans in small numbers to minimize administration costs. They also look for collateral
with a clear title - which many low- income households do not have. In addition bankers tend to consider
low income households a bad risk imposing exceedingly high information monitoring costs on
operation .Emphasis shifted from rapid disbursement of subsidized loans to prop up targeted sectors
towards the building up of local, sustainable institutions to serve the poor. Microcredit has largely been a
private (non-profit) sector initiative that avoided becoming overtly political, and as a consequence, has
outperformed virtually all other forms of development lending. Indeed, since the 1980s, microfinance
programs have improved upon original methodologies and extended beyond conventional thinking.
First, micro finance demonstrated that poor people, and especially women, had excellent repayment
rates (and often, rates that performed better than those in formal financial sectors). And second, that the
poor were willing and able to pay interest rates that would allow the micro finance institutions
(MFIs) to cover costs.
Traditionally microfinance was focused on providing a very standardized credit product. The poor, just
like anyone else, need a diverse range of financial instruments to be able to build assets, stabilize
consumption and protect themselves against risks. Indeed, in many developing countries, self-
employment through microcenter -price is often the only way to provide for families and the local
environment. Thus, we see a broadening of the concept of microfinance---our current challenge is to find
efficient and reliable ways of providing aricher menu of microfinance products.
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The TARGET GROUP:
The typical microfinance clients are low- income persons that do not have access to formal financial
institutions. Their “microenterprises" represent an estimated 80% of the total enterprises in the world,
50% of urban enterprises and 20% of the GNP of their countries.
Microfinance clients are typically self-employed, often household-based entrepreneurs. In rural areas,
they are usually small farmers and others who are engaged in small income-generating activities such as
food processing and petty trade. In urban areas, micro are more diverse and include shopkeepers,
service providers, artisans, street vendors, etc. Microfinance clients are poor and vulnerable non-poor
who have a relatively stable source of income Access to conventional for multi- financial institutions, for
many reasons, is inversely related to income: the poorer you are the less likely that you have access. The
poor often obtain financial services from informal financial relationships - credit can be available
from commercial and non-commercial lenders, but often at very high interest rates; saving services
can be available through savings clubs, credit associations and the like. As a result, the chances are that,
the poorer you are, the more expensive or onerous informal financial arrangements. Moreover, informal
arrangements may not suitably meet certain financial service needs or may exclude you anyway.
Individuals in this excluded and under- served Market segment are the clients of microfinance
.Microfinance generally targets poor women because they have proven to be reliable credit risks and
when they have the financial means, they invest that money back into their families, resulting in
better health and education, and stronger local economies. By providing access to financial services -
loans and responsibility for repayment, maintaining savings accounts, providing insurance - microfinance
programs send a strong message to households and communities. Studies have shown that women
become more assertive and confident, have increased mobility, are more visible in their communities and
play stronger roles in decision making.
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How does microfinance help the poor?
Microfinance brings the power of credit to the grassroots by way of loans to the poor, without
requirement of collateral or previous credit record. Experience shows that microfinance can help
the poor to increase income, build viable businesses, and reduce their vulnerability to external
shocks. It can also be a powerful instrument for self-empowerment by enabling the poor,
especially women, to become economic agents of change .Poverty is multi-dimensional, and by
providing access to financial services, microfinance plays an important role in the fight against the many
aspects of poverty. Access to credit allows poor people to take advantage of economic opportunities -
for their homes, their domestic environments and their communities. For instance, income
generation from a business helps not only the business activity expand but also contributes to
household income and its attendant benefits on food security, children's education, etc. Moreover, for
women who, in many contexts, are secluded from public space, transacting with formal institutions
can also build confidence and empowerment. Recent research has revealed the extent to which
individuals around the poverty line are vulnerable to shocks such as illness of a wage earner, weather,
theft, or other such events. These shocks produce a huge claim on the limited financial resources of the
family unit ,and, absent effective financial services, can drive a family so much deeper into poverty that it
can take years to recover.
Microfinance services are provided by three types of sources:

 Formal institutions
 Semi- formal institutions such as NGOs
 Informal sources such as money lenders and shopkeepers Institutional microfinance includes
microfinance services provided by both formal and semiformal institutions. Microfinance
institutions (MFIs) are institutions whose major business is the provision of microfinance services.
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Microfinance in India:
“Money, says the proverb makes money. When you have got a little, it is often easy to get more. The
great difficulty is to get that little.”Adams Smith.
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Today India is facing major problem in reducing poverty. About 250 million people in India are under
below poverty line. With low per capita income, heavy population pressure, prevalence of massive
unemployment and underemployment, low rate of capital formation, misdistribution of wealth and
assets, prevalence of low technology and poor economics organization and instability of output of
agriculture production and related sectors have made India one of the poor countries of the world.
Some 30 million women have formed 2.2 million small businesses and another 400,000 are expected to
be in place by March, 2007, according to the National Bank of Agriculture and Rural Development. About
$2.48 billion has been extended to these groups, which predominantly run by women, over the last
decade.
1. Micro, Small & Medium Enterprises Development (MSMED) Act, 2006
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The government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED)
Act, 2006 on June 16, 2006 which was notified on October 2, 2006. With the enactment of MSMED Act
2006, the paradigm shift that has taken place is the inclusion of the services sector in the definition of
Micro, Small & Medium Enterprises, apart from extending the scope to medium enterprises. The
MSMED Act, 2006 has modified the definition of micro, small and medium enterprises engaged in
manufacturing or production and providing or rendering of services. The reserve bank has notified the
changes to all scheduled commercial banks. Further, the definition, as per act, has been adopted for
purposes of bank credit vide RBI.
1.1 Definition of Micro, Small & Medium Enterprises.
a) Manufacturing Enterprise i.e. Enterprises engaged in the manufacture or production,

processing or preservation of goods as specified below:
I. A Micro Enterprise is an enterprise where investment in Plant and Machinery does

not exceed Rs 25 Lakh.
II. A Small Enterprise is an enterprise where the investment in Plant and Machinery is
more than Rs 25 Lakh but does not exceed Rs 5 crore.
III. A Medium Enterprise is an Enterprise where the investment in plant and

Machinery is more than Rs 5 crore but does not exceed Rs 10 crore.
b) Service Enterprises i.e. enterprises engaged in providing or rendering of services and

whose investment in equipment are specified below:
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I. A Micro Enterprise is an enterprise where the investment in equipment

does not exceed Rs 10 Lakh.
II. A small Enterprise is an Enterprise where the investment in equipment is more

than Rs 10 Lakh but does not exceed Rs 2 crore.
III. A Medium Enterprise is an Enterprise where the investment in equipment is more

than Rs 2 crore but does not exceed Rs 5 crore.
Top 22 Micro Finance Institutions in India
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1) SKS Microfinance Ltd (SKSMPL).

2) Spandana Sphoorty Financial Ltd (SSFL).
3) Share Microfin Ltd (SML).
4) Asmitha Microfin Ltd (AML).
5) Shri Kshetra Dharmasthala Rural Development Project (SKDRDP) .
6) Bhartiya Samruddhi Finance Ltd (BSFL).
7) Bandhan Society.
8) Casper Micro Credit (CMC).
9) Grama Vidiyal Microfinance Pvt Ltd (GVMFL).
10) Grameen Financial Services Pvt Ltd (GFSPL).
11) Madura Micro Finance Ltd (MMFL).
12) Equitas Microfinance india P Limited (Equitas).
13) BSS Micro Finance Bangalore Pvt Ltd (BMPL).
14) Bandhan Financial Services Pvt Ltd (BFSPL).
15) Sarvodaya Nano Finance Ltd (SNFL).
16) BWDA Finance Ltd (BFL).
17) Ujjivan Financial Services Pvt Ltd (UFSPL).
18) Future Finance Services Chittoor Ltd (EMFIL).
19) ESAF Microfinance &Investments Pvt Ltd (EMFIL).
20) S.M.I.L.E Microfinance Ltd.
21) SWAWS Credit Corporation India Pvt Ltd (SCCI).
22) Sanghamithra Rural Financial Services (SRFS).
COMPANY PROFILE
INCEPTION OF THE ORGANISATION
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The origin of Jammu and Kashmir bank limited, more commonly referred to as J&K Bank, can be traced
back to the year 1938, when it was established as the first state- owned bank in India. The bank was
incorporated Ist October 1938 and it was in the following year (more precisely on 4 thJuly 1939) that it
commenced its business, in Kashmir. It was initially set up as a semi-state bank, with its capital being
contributed by state as well as the public under the control of the state government.
Jammu and Kashmir bank has to face serious problems in 1947 i.e. at the time of independence. With
the partition of Pakistan, two out of the ten branches of the bank, namely the ones in Muzaffarabad and
Mirpur, fell to the other side of the line of control (now pak occupied Kashmir), along with cash and
other assets. At that point of time, in keeping with the extended central laws of the state, J&K Bank was
categorized as a government company, as per the provisions of Indian companies Act 1956.
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It was in the year 1971 that Jammu and Kashmir bank was granted the status of a ‘Scheduled Bank’. Five
years later, it was declared as “A” class Bank, by the Reserve Bank of India (RBI).
As the year passed on, the bank started achieving more and more success. Today, it boasts of more than
685 branches across the country. It was only recently that Jammu and Kashmir Bank became a billion
dollar company. Governed by the Companies Act and Banking Regulation Act of India, it is regulated by
RBI and SEBI. It finds a listing on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) as
well.
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BRAND IDENTITY
The new identity for J&K Bank is a visual representation of the Bank philosophy and business strategy.
The three colored squares represent the regions of Jammu, Kashmir and Ladakh. The counter- form
created by the interaction of the squares is a falcon with outstretched wings a symbol of power and
empowerment. The synergy between the three regions peoples the bank towards new horizons. Green
signifies growth and renewal, Blue signifies stability and unity and Red signifies energy and power. All
these attributes are integrated and assimilated in the white counter- form.
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MISSION OF THE BANK
The company’s mission is two- fold: To provide the people of J&K international quality financial service
and solutions and to be a super-specialist bank in the rest of the country. The two together will make it
the most profitable bank in the country.
VISION OF THE BANK
The Banks vision is “To catalyze economic transformation and capitalize on growth”. The bank aspires to
make Jammu and Kashmir the most prosperous state in the country, by helping create a new financial
architecture for the J&K economy, at the centre of which will be the J&K Bank. The Bank is committed to
achieve healthy growth in profitability and simultaneously to remain consistent with the Banks risk
appetite and at the same time ensuring the highest levels of ethical standards, professional integrity and
regulatory compliance.
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SWOT ANALYSIS
The term SWOT is the acronym made up of four words viz, strength, weakness, opportunities and
threats. The first two variables are internal to an organization whereas the last two are external. The
value of SWOT analysis cannot be over emphasized. It is rightly said “Winners recognize their
limitations but focus on their strengths; losers recognize their strength but focus on their limitation”.
SWOT ANALYSIS
INTERNAL ENVIRONMENT EXTERNAL ENVIRONMENT
STRENGTHS OPPERTUNITIES
WEAKNESS THREATS
 INTERNAL FACTORTS
1. STRENGTH
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Strength is defined as something which is positive, good o such other characteristics that give to the
company an edge in the competitive market. The Bank has one unique source of strength which if
cultivated carefully, can be virtually impregnable – its roots are in the state, and as such it shares with
the people of Jammu and Kashmir a kinship and empathy for the cause of the state’s progress, which no
outside bank ever can. The J&K Bank also performs the leader’s role in the J&K. As a leader the bank
continued to discharge its lead Bank responsibility in 8 out of 14 districts of J&K state satisfactorily.
 A listed company of the state on BSE and NSE.

 Company owned property.
 Tele banking, anywhere banking, SMS, and mobile banking etc.
 99% of the total business is computerized.
2. WEAKNESS
A weakness refers to something which one lacks. It is something which restricts us to move forward.
While doing my winter training in the J&K Bank I found the following weakness:
1. There is less competent staff at lower level.

2. Weak competitive capability because of lack of lesser advertisement budget.
3. Labour problems because of militancy in the state which results in strikes and tense conditions.
4. The activities of branch managers are not effectively monitored.
5. Less coverage in east and south India.
 EXTERNAL FACTORS
Page 27 of 74
1. OPPORTUNITIES
Opportunities are entirely external concerning the business environment. Opportunities do not come
very frequently and therefore, the management must exploit them to the maximum extent without any
delay. Each opportunity should be analyzed in terms of its profitability. The opportunities analyzed for
the J&K Bank are:
 There is agriculture market which is still fully not trapped by the J&K Bank. There is lots of
schemes regarding agriculture such as post Harvest Preservation scheme and many other
schemes.
 The historical activities of the state such as carpet industry, dastakar finance, khatamband
schemes and many other activities of historical importance are not still fully covered by J&K
Bank.
 Increase business activities particularly in south and east India.
 Making banking activity more simple and fast.
 Taking up newly and big venture projects.
 Continued emphasis on infrastructure facilities.
2. THREATS
With every opportunity, there also goes alongside certain threats which may adversely affect the
profitability and competitive capability of an enterprise. The threats analyzed are:
1. Competitors like HDFC Bank, Central Co-operative Bank, ICICI Bank etc. may enter in the field to
provide finance facility.
2. There may be change in the policies of the state government.
3. Better facilities in terms of technology, people and funds.
4. Economic liberalization allowed private banks to operate completely, thus forcing treat.
Products and Services of J&K Bank

Page 28 of 74
LOAN SCHEMES
1) Housing Finance:
2) Educational Finance:
 Education Loan Scheme
 Term Loan For B.Ed/ M.Ed. Courses
 Budshah Primary Education Finance
3) Automobile Finance:
 Car Loan Scheme
 School Bus Finance
 Two-Wheeler Finance
 Car Loan for Used Cars
 Commercial Vehicle Finance
 Passenger Bus/mini-bus Finance
 Old Passenger Buses/mini-buses Finance
 Commercial Vehicle Finance (used vehicles)
4) Specialized Finances:
 Zafran Finance
 Dastkar Finance
 Contractor Finance
 Laptop/PC Finance
 Giri Finance Scheme
 Roshni Financing Scheme
 All Purpose AgriTerm Loan
 Craft Development Finance
 Commercial Premises Finance
 Khatanband Crafts men Finance
 fruit Advances Scheme( for apple)
 Help Tourism (For Kashmir valley only)
 Establishment of Mini Sheep farms in private Sector
5) Other Finances:
 Consumer Loan
 Fair Price Shop Scheme
 SAHOLIAT/SARAL Finance
 Personal Loan to Pensioners
 Travel & Tourist Taxi Operators
 Mortgage Loan for Trade & Service Sector
 Loans against Mortgage of Immovable Property
6) Saving and Deposits

 Current Accounts
 Gift Cheque Scheme
 Vale Added Schemes
 Term Deposit
Page 29 of 74
 Saving Bank Deposit
7) Insurance
 Non Life Insurance products
 Life Insurance products
8) Cards
 Merchant Acquiring
 Empowerment Credit Card
 Global Access Debit Card
9) Tax Products
 Tax Saver Deposit Scheme
10) Mutual Funds

 Mutual Funds
11) Support Services

 Merchant Acquiring
 Debit & Credit Card Bank
 ATM Services
 SMS Banking
 Internet Banking
 Anywhere Banking
12) Third Party Services
 Insurance Services
 Remittance Services
 Mutual Funds
13) Depository Services
 Basic Information
 Network
 Account Opening
14) Non Resident Banking

Apart from the above mentioned services, the Jammu and Kashmir Bank also offers the following
services to its non-resident Indian customers:
 NRE Rupee Deposits
 NRE Savings Account
 NRE Fixed Deposits
 NRO Rupee Deposits
 NRO Fixed Deposits
 NRO Savings Account
Deposit Plans for Returning Indians

 Deposit Plans for Returning Indians
Foreign Currency Non-resident- Banks (FCNR-B)

 Helpful Information- NRO Rupee Deposits
Page 30 of 74
 Foreign Currency Non resident Bank(FCNRB)
Remittance from abroad

 Money Transfer
 Remittance of Funds from Overseas locations
BOARD OF DIRECTORS
The Board of Directors of the Bank consists of 10 members. The Board sits more than a dozen
times in a year to review the business activities of the Bank. It also plans and regulates the
future activities of the Bank through policy decisions and administrative guidelines. All the
important decisions of the Bank have to be endorsed by the Board of Directors before their
implementation.
Page 31 of 74
BOARD OF DIRECTORS
Mr. R.K. Chhibber
Chairman and CEO
Dr. Arun Kumar Mehta Dr. Rajeev Lochan Bishnoi Ms. Monika Dhawan
IAS Director Director Executive
Mr. Naba kishore Sahoo Mr. Vikram Gujral Mr. Nitishwar Kumar
Executive Director Director Director
Mr. Anil Kumar Misra Dr. Mohd. Ishfaq Wani Mr. Zubair Iqbal
Director Director Director
ORGANISATIONAL STRUCTURE
The J&K Bank has a four tier organizational structure, namely:
Page 32 of 74
Corporate Head Quarters
Zonal Office Area/District Offices
Branch Office
 CORPORATE HEADQUARTER
The corporate Headquarter of the Bank is located at Srinagar and is headed by chairman cum
Chief Executive officer (CEO), who is appointed by the J&K Government for a period of 3 to 5
years. Generally, the chairman is selected from reputed Economists, Bankers or the
Administrators of the state. The chairman is guided by the Board of Directors of the Bank.
 ZONAL OFFICE
Under Corporate Headquarters there are 4 Zonal Officers spread all over India. A zonal Manager,
who is of the rank of joint General Manager/Deputy General Manager of senior Management
cadre, heads Zonal officers and is assisted by the Assistant General Managers/Chief Managers
heading respective Departments.
 AREA/DISTRICT OFFICES
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Under Zonal Offices, there are Area/District Offices. The District Office is headed by the
concerned District Manager. The Branch Managers report to their respective District Manager.
Presently the Bank has 11 District Offices and 3 Area Offices.
 BRANCH OFFICE
The various Branches of the Bank in Jammu And Kashmir State are divided into 5 different
categories whereas in Delhi Zone they are divided into 2 categories, depending on the quantum
of business.
Page 34 of 74
FUNCTIONAL DEPARTMENTS OF THE ORGANIZATION
BANKING OPERATIONS
Audit
Banking Operations
Communications
Corporate Services
Debt Administration
Executive and Legal Services
Financial Markets
Financial Services
Monetary and Financial Analysis
Research
Page 35 of 74
a) AUDIT
Audit is responsible for conducting the independent and objective appraisals that will
examine and evaluate Bank operations.
b) BANKING OPERATIONS
Key players in three of the bank’s core functions: Currency, Financial system, and funds
Management.
c) COMMUNICATIONS
Helps the Bank to meet its commitment, openness, transparency and build public
relations.
d) CORPORATE SERVICES
The Corporate Services helps to comprise the following service areas: Human Resources,
Information Technology, Knowledge and Information, Facilities and Protective services.
e) DEBT ADMINISTRATION
Ensures the delivery of cost-effective back-office operations and provides policy advice.
f) EXECTIVE AND LEGAL SERVICES
It supports the Banks management by providing decision-support functions to the

executive and to the Board of Directors.
Page 36 of 74
g) FINANCIAL MARKETS
Functions include implementing monetary policy, managing the federal government’s

cash balance and foreign exchange reserves.
h) FINANCIAL SERVICES
It is responsible for the accounting and financial reporting of the Bank.
i) MONETARY AND FINANCIAL ANALYSIS
Monitors carries out researches on the financial sector.
j) RESEARCH
Research provides the Bank to manage with high-quality analysis of the economy and
related policy issues and new trends in the market.
Page 37 of 74
J&K Banks Microfinance
Micro-finance focuses on to help poorest families with very small loans (Micro-credit) either to engage
them in productive activities or grow their tiny businesses. With the passage of time it has been realized
that the poor and very poor who lack access to traditional formal financial institutions require a verity of
financial products.
Poverty is an age old and worldwide phenomenon. It affects the quality of life of the people in the
society in one form or other. J&K is having a huge percentage of population living below poverty line.
The unemployment / underemployment, underdeveloped agricultural and horticultural sectors,
unbalanced development with huge regional imbalances, illiteracy, shortage of capital, lack of
entrepreneurships etc are some of the major causes of poverty in the J&K state.
Relief and subsidies cannot eradicate poverty. It needs to be removed through creation of productive
employment opportunities, development of basic infrastructure and other social conditions. Productive
employment generates growth, creates assets and thus improves the economic condition of the poor
who can get engaged in such pursuit. At the same time, growth through productive employment creates
a multiplier effect for bringing about a change in the economic scene.
In the backdrop, the J&K Bank has been playing significant role for the upliftment of poor and to raise
the living standard of masses and ameliorate their socio-economic conditions to achieve balanced
economic growth with social justice in the state of Jammu and Kashmir. The bank has reached to those
people who have certain entitlements in the form of productive assets, education and skills; the
possession of otherwise can generate incomes to by the food requirements above the subsistence level.
Since poverty originates in the villages the bank took various initiatives to continue it. A number of
banks poverty eradication programme are rural centric. Under the programme the bank undertakes
various initiatives to raise the standard of people and elevate poverty. The program covers area of
agriculture, horticulture, village & cottage industries, Handicraft (Shawls, carpets), tourism and other
allied industry on one hand promotion of health, sanitation, education and others.
The Micro-finance is being regarded as the dignified way of crossing the poverty line by the weakest
section of the society. This anti-poverty tool has been tested in many parts of the world.
The J&K Bank has been organizing micro finance awareness camp throughout the state and created
awareness about various credit products which are given as under:
 Kissan Credit Cards
 Self Help Groups
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 Crop Loans
 Village Industries and
 Self-employment Schemes
 Handicraft Term Loans.
In order to generate employment avenues for the masses, the bank substantially contributes to the six
major government sponsored schemes these are:
 Swarnjyanti Gram Swarozgar Yojana (SGSY)
 Prime Minister Rozgar Yojna (PMRY)
 J&K Self-employment schemes (SJSRY)
 The Scheme for Schedule Caste/Schedule Tribe and other backward classes (SSC/SST)
 Khadi and Village Industry (KVIB)
The bank has played a major role in providing employment through financing of the projects under
these schemes. Disbursement through SHGs is an effective tool for delivering credit to rural pool for
their economic empowerment and social development. The impact of SHG on members is in term of
developing savings and thrifts empowerment, relief from private money lenders, assistance for welfare
and economic activities, increase in literacy levels, reduction in transaction cost and credit at door step.
Keeping this in a view, the bank disbursed Rs. 400 million through SHGs in J&K state, much more than
any other state.
J&K Grameen Bank
J&K Grameen Bank (JKGB), was established on 30th June 2009 after amalgamation of two erstwhile
RRBs viz. JRB and KRB in accordance with GOI Notification dated 30th June 2009 issued under sub-
section (1) of section 23A of the RRB Act, 1976 (21 of 1976). The area of operation of the back is
extended to 11 Districts, besides some parts of District Srinagar and Ganderbal of J&K State. The
network of the bank consists of two Regional Offices, Six Area Offices and 176 branches with 7 extension
counters. The main objective of the Bank is to improve the economy of rural, semi-urban & urban
centers.
Page 39 of 74
Help Tourism (For Kashmir valley only)

Purpose  Exclusive scheme providing hassle free credit for the
conversion of residential properties into tourist guest houses

(renovation/refurbishment only)
Eligibility  The house should be owned by the borrower, suitably located

and having a motorable approach. The house should not be
more than 15 years old.
 Proper registration with the Tourism Department, J&K
Government, and permission for the conversion/ renovation/
refurbishment from Municipality/ concerned authority,
wherever necessary. - The guest house should be managed by
the owner himself. - The prospective borrower required to
submit proper estimates/project report for the
renovation/refurbishment plan for the proposed guest house
to assess the viability.
 The renovation/refurbishment should be completed within a
period of three months from the date of first disbursement. -
The existing hotels/guest houses already registered with the
Tourism Department not come under the purview of this
scheme.
Quantum of  Maximum: 50,000/= per room and 10.00 lacs per guest
Loan house.
Components of
 Cost on account of renovation, painting, bedding, furniture,
Project Cost
dining table, flooring, crockery, cutlery, colour television etc.,

required for renovation/refurbishing of the house.
Security  Primary: Hypothecation of all furniture fittings and other

movable assets of the guest house.
Page 40 of 74
 Collateral: Upto 2.00 lacs: Third party guarantee of two

persons having sufficient means to withstand the liability.
Above 2.00 lacs: Mortgage of the house property/guest
house.
Margin  30%

Rate of
Interest (Conditions Apply)
Moratorium  6 months.

All Purpose Agri Term Loan

 Agricultural Term Loan
Nature of Facility
Objective  To provide adequate and timely credit for comprehensive

requirements of farmers with flexible and simple features
Purpose  Purchase of assets (farm equipments, bullocks, etc)

 Creation of assets (Orchard Development, Dairy Development,
Poultry development etc)and
 Any other activity under Agriculture, Horticulture, Sericulture,
Animal Husbandry, Plantation, Fisheries etc.
 An indicative list of activities is presented herein below.
o Setting up of small Dairy/Poultry units · Orchard
Development
o Crops (Paddy, wheat, maize, oil seeds, saffron,
vegetables etc)
o Purchase of Farm Machinery eg. Water pumps/Spray
pumps
o Dug wells, Bore wells, shallow tube wells, sprinklers
and drip irrigation.
o Purchase of plough animals
o Purchase of seeds, pesticides/fertilizers · Vegetable
farming
Page 41 of 74
o Setting up Rural Retail Agricultural outlets

o Construction of Godowns/grading sheds
o Plantation, nurseries
Eligibility  All Persons engaged in agricultural and allied in Semi urban

and rural areas including all categories of farmers.
Quantum of finance  Max. 1.00 Lac depending upon the activity to be financed.
Multiple activities can also be considered for assessing the

quantum of finance.
Rate of
Interest(Subject to (Conditions Apply)
Change)
Repayment  5 years after a moratorium of three months.

Fruit Advances Scheme (Apple)

Salient  a) Finance to Growers
Features i. Assessed on entire fruit bearing orchard owned by the grower
farmer or any of his family member.
ii. Up to an individual credit limit of 1.00 lac no revenue
record of land holding is required.
iii. The credit limit of Growers is to be assessed and sanctioned
for a period of 3 years. The limit will get automatically renewed
annually subject to satisfactory conduct of the account.
iv. Option for the grower to enter the scheme to avail the
financial assistance at any of the following stages:
• Pre-harvest stage for production cost.
• Harvesting stage for picking/ packing/ grading.
• Post harvesting stage for marketing.
• For entire production & marketing cycle.
v. The grower is not required to submit any financial statement/
balance sheet for sanction of credit facility excepting personal
Page 42 of 74
statement and land holding record wherever required in

addition to papers under KYC norms.
vi. Option for additional financial assistance for carriage and
cold storage of the produce as per stipulated rates.
vii. No collateral Security upto the loan limit of 1.00 lakh.
b) Finance to the Traders/Arthias/Commission & Forwarding Agents
i) The scale of finance to be assessed on the basis of number of fruit

boxes marketed/ forwarded during the previous year with a reasonable
increase based on average growth during the last three years.
ii) The average per box market price will be aligned to the actual market
rates.
iii) Hassle free renewal of the credit limit from January onwards subject
to satisfactory conduct of the account.
iv) Option for additional financial assistance for cold storage of the
produce as per stipulated rates.

Purpose  To provide comprehensive and timely financial assistance with

flexible and simplified procedure adopting whole farm approach
taking care of the production/marketing credit needs of Apple
Growers/Traders/Arthias/Commission & Forwarding Agents of
the J&K State with a reasonable component for
consumption/subsistence of the growers.
Under the scheme finance will be available for following

components:-
Production/Input Cost
• Cost of fertilizer
• Cost of fungicides/pesticides/insecticides etc.
• Cost of fertilizers/fungicides/pesticides/insecticides
application
• Cost of Watch & Ward and
• Post Harvest maintenance
Marketing Costs
• Cost of Boxes
• Cost of Packing Material
Page 43 of 74
• Cost of Picking, Packing & Grading

• Cost of Transportation
• Cost of Cold Storage of produce (optional)
Nature of  Cash Credit /SOD

Facility  SOD
 All Fruit Growers/Orchardists owning orchards with fruit

Eligibility
bearing trees.
 All Local Traders/Arthias/Commission & Forwarding Agents
having a market standing of at least one year.

Scale of S.No Particulars of Borrower Amount

Finance* .
1. Growers (Per Acre of orchard) 2.88 lac
2. Local Trader/Arthias (per box of 20 Kgs) 263/-
3. Commission/Forwarding Agent (per box of 20 132/-
Kgs)

*Provision for additional finance is available for cold storage of produce

at 20/- per box subject to a maximum limit of 10.00 lac per
borrower against pledge of cold storage receipts duly endorsed in favour
of the bank.
Security  Primary
• Hypothecation of fruit crop/packing material.
• Hypothecation of book debts.

 Collateral:
Security
Limit
Upto 1.00 lac Nil other than personal
Page 44 of 74
guarantee of the borrower

Above 1.00 lac upto 3.00 Third party guarantee of
lacs two persons
Above 3.00 lacs Mortgage of
orchards/immovable
property with a minimum
value of 125% of the credit
limit.
 Margin

10% (to be contributed in the shape of labour incurred

Grower
on fertilizer/pesticide/fungicide
application and post harvest maintenance)

Trader 25%
Margin  25%.

Zafran Finance
Objective  To provide adequate and need based financial assistance for
cultivation of saffron. The term loan shall cover the entire
plantation & production costs including plant material,
agricultural machinery, labour, etc.
Nature of  Agricultural Term Loan

facility
Eligibility  All saffron growers including small, marginal & large farmers
 including contract farmers engaged in cultivation of saffron or

intending to commence the cultivation of saffron.
Quantum of  The unit cost, Margin & maximum amount of finance inclusive
Finance of the interest during moratorium (capitalized) shall be as
follows:
Page 45 of 74
For Loans upto 2 lacs: Amount in

a. Unit b. Unit c. Unit d. Interest e. f. Loan g. Loan

Size Cost Cost @ during Marg Amoun amount
(Land excluding inclusive moratorium in @ t inclusive
Holding Capitalize of *. 20% of
) d Interest. capitalize of b. capitalize
d d
Interest. Interest.
1 Kanal 28,500 32,305 3805 5700 22,800 26,605
For loans above 2 lacs to 10 lacs. Amount in
a. Unit b. Unit c. Unit d. Interest e. f. Loan g. Loan
Size Cost Cost @ during Margi Amoun amount
(Land excluding inclusive moratorium n @ t inclusive
Holding Capitalize of *. 20% of

) d Interest. capitalize of b. capitalize
d d
Interest. Interest.
1 Kanal 28,500 32,692 4192 5700 22,800 26,992
 The finance shall take care of 1st & 2nd year’s costs.
 Minimum unit size to be financed under the scheme will be 0.5
Kanals. The unit-sizes indicated in the Tables-above are for I
Kanal of land. However, in actual cases the unit size can be of
varied sizes. The unit cost of the farms should therefore be
calculated in proportion to the unit cost prescribed in the
Tables.
 For the purpose of loan limit, the amount of Interest during
moratorium has been calculated on worst –case scenario
assuming that 1st & 2nd installment during year 1 are disbursed
during April. However, in practice branches shall calculate the
interest during moratorium on actual disbursement basis.
Page 46 of 74
Minimum &  Minimum - 0.06 Lacs

Maximum
Amount of  Maximum - 10.00 Lacs.
Loan

Security Amount of Loan Security to be furnished

Hypothecation of the Asset created.Third
Upto 0.50 lacs.
Party Guarantee of one person.
Above 0.50 lacs Hypothecation of the Asset created.Third

upto 3 lac/- Party Guarantee of two persons
Hypothecation of the Asset created
Above 3 lacs to 10
Mortgage of unencumbered immovable
lacs.
property.
Disburseme  The loan facility sanctioned under the scheme shall be

nt of Loan disbursed as follows:
a) 90% of loan amount including Margin but excluding amount
earmarked for interest charged during moratorium to be
disbursed in 2 installments in the Year 1 during the months of
April –August as per the requirements of the grower.
b) 10% of loan amount including Margin but excluding amount

earmarked for interest charged during moratorium to be
disbursed during April-August of 2nd year.
c) Amount earmarked for interest to be released on yearly basis
for servicing of interest during moratorium. Interest for
remaining period of moratorium, i.e. 8 months shall be applied
as well as disbursed at the end of the moratorium period.
Moratorium  There shall be an initial moratorium of 20 months from the date

Period of disbursal of loan. Interest for the moratorium shall be

capitalized.
Page 47 of 74
Repayment  Option 1 : Interest for the moratorium period shall be

of Loan capitalized. At the end of the moratorium period, the
outstanding loan amount inclusive of capitalized interest shall
be paid in three yearly installments in the ratio of 20, 35 & 45%
with the first installment to be paid immediately after
completion of the moratorium period. Interest for the period
after initial moratorium shall be paid along with the annual

installments.
 Option 2 : This option shall be similar to the first option except
for the difference that here a borrower shall pay the interest
portion every month after the moratorium period till the
liquidation of the loan at the time of payment of 3rd yearly
installment.
Processing  Nill

Charges
Rate of  (Conditions Apply)

Interest

Establishment of Mini Sheep Farms in Private Sector

Aims & Objectives  To enhance the productivity of local sheep in
terms of wool and mutton production, by
crossing them with superior quality breeding
rams.
 To ensure elimination of sheep with
pigmentation, coarse wool and such other
undesirable characters through selective
breeding and rigorous culling.
 To improve the economic condition of sheep
breeders by increasing the productivity of
their sheep, providing them subsidized inputs
and remunerative prices for their produce.
 To provide increased opportunities of
livelihood to small/marginal farmers,
agricultural labourers, entrepreneurs,
Page 48 of 74
unemployed youth etc.
Size of the Farm  50 Crossbred Ewes

Breeding Coverage  Two Quality Breeding rams to be provided free

of cost by Directorate Sheep Husbandry for

breeding coverage.
Rate of Interest(Subject to
(Conditions Apply)
Change)
Margin from Borrowers  15% of unit cost

Disbursement  Term loan component of 17,200/- plus

margin amount of 37800/- from the
borrower shall be utilized for construction of
low cost shelter and procurement of
equipment as per technical specification
provided by Directorate of sheep Husbandry.
 The cost of live stock i.e. 1,50,000/- .shall be
remitted out of the Term Loan component
directly in favour of the supplier of live stock.,

after ensuring proper end use of funds
released for shelter and equipment.
 Grazing, feeding & Vet. Healthcare charges
of 32, 800/- per unit shall be released to the
borrower in four equal quarterly installments
of 8, 200/- each. 1st installment shall be
disbursed immediately after procurement of
live stock.
Tenor  6 years including Moratorium of one and a half

year from 1st Disbursement.
Repayment Period  The Term loan facility of 2.00 lacs shall be
repaid in 10 equal half yearly installment of
Page 49 of 74
20, 000/- each starting after 18 months from

1st disbursement.
Security  Hypothecation of live stock, and other assets

created.
 3rd party guarantee of two persons, having
sufficient means to withstand the liability.
Insurance a) Live stock
Comprehensive Insurance of Live Stock.
b) Breeder (borrower)
Insurance cover to sheep breeders under the “social

Security Scheme” of Central Wool Board which shall
cover natural as well as accidental death and also total
or partial disability @ 330/annum, out of which the
breeder shall pay 80/- and the rest shall be
contributed by Government of India & LIC. The cover
shall be:
(Amt.
in Natural Death 60,000
Accidental death 1,50,000
Total Disability 1,50,000
Partial Disability 75,000
Rupees)

Pre-payment  The borrower can pre pay the Term loan after
initial lock in period of 3 years from the date of
disbursement. The Subsidy component over
and above the actual utilization in such

accounts shall be returned to the Directorate
of Sheep Husbandry Via account Payee
instrument.
Page 50 of 74
Identification of Borrowers  Borrowers under the scheme shall be

identified & sponsored by Concerned District

Sheep Husbandry Officer.
Other incentives from sheep  The Department shall provide two good
Husbandry Department. quality rams free of cost to each unit for
breeding coverage.
 The department shall provide round the year
free veterinary healthcare /aid to each Mini
sheep Farm. The medicines required for the
purpose and available with the Deptt. Shall be
provided to the unit at subsidized rates.
Processing\ upfront charges  Nil

JK Bank Commercial Floriculture Finance

Nature of Facility Composite Term loan
Objective  To provide adequate and need based financial

assistance for commercial cultivation of
Flowers.

Eligibility  All individuals/entities having registration with

Dept of Floriculture.
 Applicant/s should have at least 1 Kanal of
cultivable land (on which the green house is to
be constructed), either in his/their own name
or on lease hold basis (with mortgage rights)
Page 51 of 74
for availing loans for construction & operation

of upto 2 green houses and at least 2 Kanals
for 3 green houses. In case of Gladiolus
cultivation the applicant/s should have at least
4 kanals of land either owned in his/their own
name or on lease basis with mortgage rights.
 In case the land belongs to parents/spouse,
then they shall be involved as co-borrowers.
 Applicant must have know-how of floriculture.
He must either have a Degree/Diploma in
Agriculture from a recognized institution, or
he must have undergone training from the
Floriculture Department or some other
recognized institution like E DI.
 Applicants having a track record of over 3
years experience in production and sales of
flowers shall also be eligible .They shall be
exempt from the educational/ training
criteria.
 Finance for more than one Green house or for
cultivation of Gladiolus on more than 4 Kanals
of land shall be provided only to the
floriculturists having a sound track record of
at least 4 years.
 Age of applicants should be between 18 to 65
years.
 Applicant must be a State Subject.
Quantum of The quantum of the product finance and the requisite

finance & Margin margin money shall be as per below.
amount.

Page 52 of 74
The unit cost, Margin & maximum amount of
Potentials of Microfinance-a review
financeof J&k Bank be
shall as follows:
A) Finance for cultivation under Green Houses
a) Composite loan for cultivation of

T i) Lillium Amt in
h a) Unit Size 20 x 80 ft
i b) Capital Cost for construction of
3,50,000
s Greenhouse's
c) Operative Expenses 2,25,000
d) Total Cost 5,75,000
e) Margin @ 20% of d. 1,15,000
f) Total Loan Amount 4,60,000
g) TL component 2,80,000
h) WCTL Component 1,80,00
ii) Carnation
20 x 80
a) Unit Size
ft.
b) Capital Cost for construction of
3,50,000
Greenhouse's
e) Margin @ 20% of d. 93,000
h) WCTL Component 92,000
iii) Rose
a) Unit Size 20 x 80 ft
b) Capital Cost for construction of
3,50,000
Greenhouse's
c) Operative Expenses 70,000
e) Margin @ 20% of d. 84,000
h) WCTL Component 56,000
B) Finance for cultivation of Gladiolus in Open
Fields
a) Unit Size (size of land) 4 Kanals
b) Capital Cost 2,20,000
Page 53 of 74
e) Margin @ 20% of d. 1,04,000
amount has been calculated for 1 Green house in case

of flowers grown in Green houses, and for 4 Kanals of
land in case of Gladiolus which is grown in open fields.
The cost of Green house has been calculated for a
standard size of 80 x 20 ft.; for different sizes the cost
should be calculated on pro rata basis. Similarly, a
common Green house has been used for calculating
the finance amount. In case, the borrower wants
finance for hi-tech ones, the cost amount over and
above the one used for common green house has to
be contributed by the borrower.
Maximum finance for upto 3 Green houses can be

provided, subject to a maximum of 15 lacs. In case
of Gladiolus the maximum finance shall be for 12
kanals of land holding subject to the ceiling of 15
lacs. Proposals for higher finance shall be treated as
project finance and subjected to normal assessment
as is done in case of other cases in that category.

Security  Security to be obtained :
Upto 5lacs
1) Hypothecation of the stocks &Assets
created.
2) Third Party Guarantee of Two person
Above 5lacsto 15lacs

1) Hypothecation of the stocks & Asset

created
2) Mortgage of immovable property,
preferably the land on which the activity is
undertaken, having value at least equivalent
to 100% of the sanctioned amount. Security of
additional immovable property should be
taken in case the value of land is less than the
sanctioned amount.
Moratorium  The moratorium period shall be 6 months.

Period
Page 54 of 74
Repayment of  At the end of moratorium period, the

Loan outstanding loan amount inclusive of interest
during moratorium is to be repaid in 9 equal
half-yearly installments. Maximum repayment
period shall be 5.0 years inclusive of
moratorium.
Processing  0.5% of the loan amount sanctioned subject

Charges to a maximum of 3,000.
Rate of Interest  (Conditions Apply)

Seed Capital Fund Scheme under “Sher-e –Kashmir Employment and Welfare
Programme for the Youth (SKEWPY)” of Government of Jammu & Kashmir.

Objective  To provide finance to eligible candidates sponsored
by JKEDI under the Seed Capital Fund Scheme of
Government of Jammu & Kashmir.

Purpose  Finance under this product shall be available to

trained and registered first generation entrepreneurs
sponsored by the JKEDI under the Seed Capital
Scheme to start environment-friendly ventures
relating to certain core areas of the state economy
which inter-alia shall include:
i) Horticulture, floriculture, cultivation of medicinal
and aromatic plants;
ii) food-processing at the household/village level;
iii) establishment of facilities for storage of food
products/horticulture products: particularly cold
chains;
iv) handloom, handicrafts and other artisanal
products: particularly design improvement,
technology-transfer and marketing;
v) ventures in poultry, sheep-breeding and
production, collection, storage and marketing of milk:
Page 55 of 74
aimed at import substitution;

vi) setting up of computer literacy/training institutes
in villages/habitations particularly with a population
of less than 3000 souls;
vii) setting up of Fair Price Shops at small habitations
across the State;
viii) Health services unit/dental care units set up by
doctors;
ix) Pathological labs including diagnostic facilities set
up by doctors/trained professionals;
x) Services industry units engaged in maintenance
,repairing, testing of both electrical and electronic
equipments/ instruments, services of all types of
vehicles and machinery including TV’s, Radio’s,
transformers, motors, etc set up by technically
qualified persons such as Engineers or trained
entrepreneurs;
xi) Servicing and supply of components/parts of
agricultural farm equipments/machinery items such
as tractors, pumps, boring machines ,etc, set up by
Engineers or technically trained entrepreneurs.
xii) Tailoring and boutique units set up by educated
and trained entrepreneurs;
xiii) Tourism-related enterprises covering houseboat
owners, setting up of Paying Guest facilities, small
dhabas and restaurants with a capacity of 20 seats.
xiv) All the above activities as approved by JKEDI or
any other economically viable activity as may be
approved by JKEDI;

Classification  Priority Sector Advance.

Eligibility  The following shall be eligible under the Scheme:-
(a) A state subject in the age group of 18 to 37 years

having a qualification of 10+2 or above who is
unemployed;
(b) There will be no income ceiling for coverage under
the scheme;
Page 56 of 74
(c) The beneficiaries must be registered with the

concerned District Employment and Counseling
Centre. They can also be registered with other
departments and institutions like DICs etc. wherever
required so as to take advantage of the benefits
which may accrue through such registrations. The
JKEDI shall facilitate this during the course of training
under Entrepreneurship Development Programme;
(d) Any person or any, existing units and the units
which have already availed of any incentive or subsidy
under any scheme of the Government of India or the
State Government shall not be eligible for assistance
under the scheme;
(e) No institution, corporate body, society or an NGO
shall be eligible for assistance under the scheme.

Funding Pattern  a)SEED CAPITAL:

Seed Capital for different categories of borrowers
shall be as under:
I). Individuals
Under Graduates/Graduates: 35% of the project cost
subject to a maximum of 3 lacs.
Post Graduates: 35% of the project cost subject to a
maximum of 5 lacs.
Technically Qualified persons*: 35% of the project
cost subject to a maximum of 7.5 lacs.
In Individual Cases where costlier technologies are
involved, the upper limit shall be 10.00 lacs**.
II). Groups
35% of the project cost subject to a maximum of 10
lacs.
* Technically Qualified Persons shall include
Engineers, Doctors, Computer Science& Technology
Graduates, MBAs, etc.
** The Screening Committee shall decide as to which
case falls in this category.
 Bank Loan:
65% of the project Cost .In cases where the bank
finance is secured by CGTMSE Cover, the maximum
Page 57 of 74
ceiling on Bank Finance shall be 25 lacs. However, if

the loan amount is secured by collateral security of
immovable property, there shall be no ceiling on the
amount of Bank finance.
 c) Borrowers Contribution:
Normally, the borrower shall not be required to
contribute any margin money. However, in cases,
where the project outlay exceeds the Seed Capital
requirement and the Bank Loan, the entrepreneur/s
shall induct the deficit amount from his own sources
 d) Interest during moratorium:
Interest during moratorium shall be capitalized and
shall form part of the total project cost.
 e) Project cost comprises of Capital Cost as well as
the entire working capital requirement.

Moratorium Period  Maximum of 2 years.

Maximum The maximum repayment period for different categories of

Repayment Period. borrowers shall be as under:
Individual Undergraduates 5 Years

Graduates 6 Years
Group 7 Years

The repayment period shall be exclusive of the applicable

moratorium period. For categories where sophisticated
equipment is needed, the repayment period shall be 8 years
after the applicable moratorium period.

Security  Primary Security:

Hypothecation of assets created out of Bank Finance.
 Collateral Security:
a. For MSE Units where Bank Finance is up to 25
lacs
Guarantee cover under Credit Guarantee Scheme of
CGFTMSE.
b. For MSE Units where Bank Finance is above 25
Page 58 of 74
Bank Loan upto Third party guarantee of two

5.00 lacs * Persons with sufficient means
Bank Loan above Mortgage of unencumbered
5.00 lacs: immovable property having value
not less than 100% of Loan
amount
*However under Agriculture and allied activities, loans
upto 1.00 lacs shall be sanctioned against personal
guarantee of the borrower without any collateral / 3rd
party guarantee.
lacs / Units not covered under MSE
Mortgage of unencumbered immovable property
having value not less than 100% of the Loan amount.
C. For units not covered under MSE
Insurance  Comprehensive insurance of assets created out of

Bank finance with the usual bank Clause.
Processing Charges  Nil

Rate of Interest  (Conditions Apply)

Disbursement  Disbursement of Bank Loan shall be subject to receipt

of full Seed Capital which shall be kept in a linked
current account to be opened in the name of the
borrower.
 Finance including seed capital and margin, if any, shall
be disbursed to borrowers in the manner as phased
out in DPR.

 Working Capital component of the Project cost shall
be made available as a running facility(Cash Credit).
 Finance for acquiring of Technology /machinery, etc
shall be made directly to suppliers of goods.
 Amount earmarked for interest to be released as
applicable for servicing of interest during moratorium.
Page 59 of 74
Scheme for Establishment of Mini Sheep Farms in Private Sector

Aims & 1. To enhance the productivity of local sheep in terms of
Objectives wool and mutton production, by crossing them with
superior quality breeding rams.
2. To ensure elimination of sheep with pigmentation, coarse
wool and such other undesirable characters through
selective breeding and rigorous culling.
3. To improve the economic condition of sheep breeders by
increasing the productivity of their sheep, providing them
subsidized inputs and remunerative prices for their
produce.
4. To provide increased opportunities of livelihood to
small/marginal farmers, agricultural labourers,
entrepreneurs, unemployed youth etc.

Size of the  50 Crossbred Ewes

Farm
Unit Cost Fixed cost Amt. in

i. Cost of 50 crossbred ewes 150000
1-1/2 -2 years of age @ .3000/- per ewe
ii. Cost of other infrastructure 50,000
a. Low Cost Shed 5,000
b. Equipments
Total Fixed Cost 205,000
Recurring Cost (1st year)
Grazing charges@ .50/- Per sheep 2500
1. Feeding Expenses 27700
1. Veterinary Healthcare 2600
Total Recurring Cost (1st Year) 32800

Total Unit Cost (A) 2,37,800
Funding Pattern
a. Term Loan 2,00,000
b. Borrowers Contribution 37,800
Page 60 of 74
Total 2,37,800
Margin from  15% of unit cost.

Borrowers
Disbursement  Term loan component of 17,200/- plus margin amount

of 37800/- from the borrower shall be utilized for
construction of low cost shelter and procurement of
equipment as per technical specification provided by
Directorate of sheep Husbandry.
 The cost of live stock i.e. 1,50,000/- .shall be remitted
out of the Term Loan component directly in favour of the
supplier of live stock., after ensuring proper end use of
funds released for shelter and equipment.
 Grazing, feeding & Vet. Healthcare charges of 32, 800/-
per unit shall be released to the borrower in four equal
quarterly installments of 8, 200/- each. 1st installment
shall be disbursed immediately after procurement of live
stock.
Tenor  6 years including Moratorium of one and a half year from

1st Disbursement.
Repayment  The Term loan facility of 2.00 lacs shall be repaid in 10
Period equal half yearly installment of 20, 000/- each starting

after 18 months from 1st disbursement.
Security 1. Hypothecation of live stock, and other assets created.

2. 3rd party guarantee of two persons, having sufficient

means to withstand the liability.
Identification  Borrowers under the scheme shall be identified &

of Borrowers sponsored by Concerned District Sheep Husbandry

Officer.
Other 1. The Department shall provide two good quality rams free
incentives of cost to each unit for breeding coverage.
Page 61 of 74
from sheep 2. The department shall provide round the year free
Husbandry veterinary healthcare /aid to each Mini sheep Farm. The
Department medicines required for the purpose and available with
the Deptt. Shall be provided to the unit at subsidized
rates
Processing\
 Nil
upfront
charges
Rate of  (Conditions Apply)

Interest
Microfinance Outreach-Global Scenario:

The microfinance sector has grown over time with more and different types of actors becoming
involved, with increasing numbers of geographic regions around the world being serviced, with new
types of products and services being developed, and with new ideas and technologies to support it.
The global picture regarding microfinance outreach is quite impressive. From a mere 7.6 million poorest
families in 1997, the Microcredit Summit Campaign reported an outreach of more than 92 million clients
by December 31, 2011. This number includes 66.6 million families who were among the poorest when
they started with a program of these 66.6 million poorest clients, 55.7 million or 83.6 percent were
served by the 52 largest individual institutions, all with 100,000 or more clients. The number of the
world's poorest people, 83% of them women, received small loans to start or expand small businesses. If
all microcredit borrowers are included, not just those categorized as "poorest", the total is over 92
million. This is a huge increase for the micro credit borrowers worldwide rapidly. In 2011, more than 66
million estimated 7.6 million borrowers worldwide before the Microcredit Summit campaign began in
1997 among these largest MFls, 79% are in Asia, 17% are in Africa and only 4% are in Latin America. Of
the 3,164 institutions that had reported to the Microcredit Summit Campaign by December 31, 2004,
1628 were in Asia, 994 in Africa, 388 in Latin America and Caribbean, 48 in North America, 34 in the
Middle East, 72 in Europe and the Newly Independent States (NIS).The increase in the number of
institutions reporting. From 618 in 1997 to 3164 in 2004, is definitely an indication of an impressive
growth in the field of microfinance.
Of the over 92 million people reached by the end of 2011, 81.5 million were in Asia, 7 million in Africa
and 3.8 million in Latin America and the Caribbean. Only 5.2 million of the 61.5 million poorest families
in Africa and the Middle East were covered by Micro finance programs by the end of 2004. Asia, which is
home to some 67% of the worlds people living on less than USS 1 a day can therefore rightfully boast of
a vibrant microfinance sector.
In Asia, Bangladesh distinguishes itself by reaching more than 75 percent of poor families with
microfinance. It is home to 31 percent of the largest programs in the world, who have individually
reached more than 100,000 clients. MFPs in Bangladesh reached over 18 million poorest clients by the
end of 2011. The intensity and density of microfinance is greater in Bangladesh than in any other
country. The pioneering role of Grameen Bank; the bold initiative of NGO-MFls; the participation of
banks; the implementation of Government programs like BRDB, PDBP, etc.; the operation of PKSF; and
the strong commitment and competitive spirit of the major players in the field have largely contributed
to such a development of microfinance in Bangladesh.
Page 62 of 74
Present Scenario of India:

India falls under low income class according to World Bank. It is second populated country in the world
and around 70 % of its population lives in rural area. 60% of people depend on agriculture, as a result
there is chronic underemployment and per capita income is only $ 326.2.This is not enough to provide
food to more than one individual. The obvious result is abject poverty, low rate of education, low sex
ratio, and exploitation the major factor account for high incidence of rural poverty is the low asset base.
According to Reserve Bank of India, about 51 % of people house possess only 10% of the total asset of
India. This has resulted low production are either linked to NGOs or to local banks. From the banks they
can access funds 2-3% a month and through NGOs providing micro-credit 15 to 20 % per annum. There
is a possibility of generating a credit demand of 25 billion Indian Rupees from savings from the poor in
the short term. (Source GOI Survey, September2013)
Poverty alleviation programmers and conceptualization of Microfinance
India has supported social banking for a long time. Policy directions to rapidly expand rural branches,
mandate credit allocations for priority sectors (including agriculture), deliver large subsidy oriented
credit programmers to serve marginal communities and poor households and control interest rates have
been tried for over 35 years.
The new generation microfinance was slow in coming to India. Low levels of grants to microfinance
institutions, an unfavorable policy environment, substantial traditional banking infrastructure and a
search for context specific solutions has constrained rapid scale up. The first breakthrough emerged
from policy support to enable informal self help groups of 15-20 members (mainly women) to transact
with commercial banks. These groups build up and rotate savings amongst themselves open bank
accounts and take responsibility for lending and recovering money financed by banks.
At a time when a money questioned the need for specialised microfinance institutions
(MFIs) in India, the Small Industries Development Bank of India (SIDBI) recognized the opportunity and
started implementation of an ambitious national programme. Providing loan and capacity building
support to MFIs and capacity building and rating support for sector development, this programme
aleady supports 70 MFs and has disbursed USS46 million.
Microfinance has been perceived as an alternative tool of providing financial services to poor client in
India. SEWA (Self Employed Women Association) Bank is the oldest microfinance organisation in the
country. The Community Based Organisations (CBOs) and Non Governmental Organizations (NG0s)
initiated the microfinance movement and the formal financial Sector joined in at a later stage. The
popular mode of delivering microfinance in India is Self Help Groups (SHGs). Initially, NGOMFIs
motivated poor to form SHGs and supported them to manage their savings and internal lending
activities within the SHG. In the year 1992.
NABARD initiated a pilot project on SHG-Bank Linkage programme in India. For this pilot project,
Southern States in India were chosen NABARD took up this programme on a full fledged manner in 1998
after experiencing an immense success of the pilot project. Now SHG-Bank Linkage Programme is the
largest microfinance programme in the world. Within a span of 15 years, the outreach of this
programme had increased to 2.24 million credit linked SHGs in the year 2006 from 255 credit linked
SHGs in the year 1992. In the present Indian microfinance sector, Commercial Banks, Regional Rural
Banks, Cooperative Banks, Non Banking Financial Companies (NBFCs) and NGOs are involved in offering
microfinance services to the poor.
Microfinance movement in India can be divided into two phases. In the first phase of this
Movement, it was found that NGOs and CBOs took the initiative of group formation. They
Nurtured these SHGs and provided micro-credit. In this phase most of the programmes were sponsored
by national and international donor agencies.
Page 63 of 74
DATA ANALYSIS
ACCUMLATED DEPOSITS V/S LOAN GRANTED IN DIFFERENT BANKS OPPERATING IN JAMMU AND KASHMIR
Name of bank Accumulated deposits(crores) Loan Granted(crores)

J&K bank 35308.34 12356.86
SBI 7321.26 1899.16
PNB 3407.91 858.39
40000
35000
30000
25000
ACCUMALATED
20000 DEPOSITS(CRORES)
LOANS GRANTED(CRORES)
15000
10000
5000
0
J&K BANK SBI PNB
CREDIT-DEPOSIT OF DIFFERENT BANKS OPERATING IN JAMMU AND KASHMIR
NAME OF BANK Credit-Deposit Ratio(CD RATIO) (%)

J&K BANK 38
SBI 27.56
PNB 22.3
Page 64 of 74
CASH DEPOSIT RATIO (CD RATIO)%
22.3
J&K BANK
38 SBI
PNB
27.56
AGRICULTURE SECTOR LOAN PATTERN OF DIFFERENT BANKS IN JAMMU AND KASHMIR
NAME OF THE BANK PRIORITY SECTOR (CRORERS) AGRICULTURE SECTOR(CRORES)

J&K BANK 2738.94 600.75
SBI 224.66 42.78
PNB 186.13 79.71
3000
2500
2000
1500 PRIORITY SECTOR(CRORES)

AGRICULTURE SECTOR(CRORES)
1000
500
0
J&K BANK SBI PNB
Page 65 of 74
J&K bank has highest branch network of almost 817 branches, which include 45 metro branches, 186 urban branches, 152
semi-urban branches and 434 rural branches, which are spreed over around 20 states and one union territory. The company
operates around 885 automated tellar machines (ATMs). The countrys biggest bank, State bank of india (SBI) has only 72
branches in rural areas and Punjab National Bank (PNB) with just 59 branches including 29 in rural area. Comparative
analysis of all these banks reveals startling facts. As against the benchmark of 60%, the C.D. Ratio of all banks operating in
the state at the end of Q2 of FY 2014 to 2015 stood at 43.38% against 40.47% during the corresponding period of previous
year. Which has gone down by our 10% when compared to march 2013. JK Bank alone has disbursed Rs 3,916.27 crores,
which accounts for 71% of the total credit disbursed by 46 banks/ financial institutions operating in the state upto 30th sep
2014 total advances at the end of march 2014 of all banks stood at Rs. 19993.88 crore against total deposits of Rs 55,143.60
Crores accumulated by them.
The JK Bank is the only private sector bank in the country assigned with the responsibility of convening state level bankers’
committee (SLBC) meetings. The bank continued to discharge its lead bank responsibility in 12 districts i. e Srinagar,
Ganderbal, Budgam, Baramulla, Bandipora, Kupwara, Anantnag, Kulgam, Pulwama, Shopian, Poonch, Rajouri out of 22
districts of JK satisfactory. The other 10 districts i.e Jammu, Samba, Kathua, Udhampur, Reasi, Doda, Ramban, Kashtwar, Leh
and kargil are managed by State bank of India.
ANALYSIS OF J&K BANK SCHEMESWISE:

The J&K bank started Micro-Finance in year 2015 in first year 6129 loans were granted and number of
schemes were introduced and each passing year new schemes were introduced like CRAFT
DEVELPOMENT FINANCE, MINI SHEEP FARMS FINANCE, GIRI FINANCE SCHEME (WALNUT) etc, each
passing year the number of loans very increased from initial (2015-16 year) 6,129 to 22,247 (2020-21
year)
NUMBER OF LOANS (MICRO-FINANCE) GIVEN DURING LAST SIX (6) YEARS
NAME OF SCHEMES 2015 2016 2017 2018 2019 2020

HELP TOURISM (KASHMIR 721 1571 2100 2562 3064 3869
VALLEY ONLY)
ALL PURPOSE ARGI TERM LOAN 551 884 1143 1479 1988 2782
FRUIT ADVANCES 678 990 1232 1594 1767 2199
SCHEME(APPLE)
ZAFRAN FINANCE 232 359 476 554 602 821
ROSHNI FINANING SCHEME 211 341 436 661 954 1148
CRAFT DEVELPOMENT FINANCE 235 420 574 698 804 989
J&K DASTKAR FINANCE 1065 1234 1659 2290 2786 3159
GIRI FINANCE 78 109 176 247 341 412
SCHEME(WALNUT)
CRAFTSMEN FINANCE 84 123 194 286 392 468
COMMERICIAL PREMISES 366 437 693 745 874 981
FINANCE(POSSESSION OF
Page 66 of 74
SHOPS,OFFICES)
SEED CAPTAL FUND SCHEME 299 446 574 711 823 922
J&K HANDICRAFTS FINANCE 1109 1448 1687 1906 2560 2994
MINI SHEEP FARMS FINANCE 258 372 494 604 711 827
FLORICULTURE FINANCE 242 304 390 476 581 676
TOTAL 6,129 9,038 11,828 14,813 18,247 22,247
 Help tourism, J&K Handicrafts finance, J&K Dastkar finance is best choice people have adopted,
reason begin Tourism and handicrafts are backbone of J&K state.
 Zafran finance is also increasing but not as per required, the J&K state produces best zafran in
the, more schemes should be there, people should be encouraged to take zafran finance.
 Bank has financed commercial premises finance The Sunday market in Srinagar is an example of
that Rs 98 crore business a month. J&K Bank has a turnaround of Rs 32 crore from the every
week
 The floriculture is increasing day by day with J&K state have Asia’s biggest “tulip garden” more
and more schemes should be introduced in floriculture.
ALL PURPOSE ARGI TERM LOAN, FRUIT ADVANCES SCHEME (APPLE) finance is also increasing.
Conclusion
Some valuable lessons can be drawn from the experience of successful Microfinance operation. First
of all, the poor repay their loans and are willing to pay for higher interest rates than commercial
banks provided that access to credit is provided. The solidarity group pressure and sequential
lending provide strong repayment motivation and produce extremely low default rates. Secondly,
the poor save and hence microfinance should provide both savings and loan facilities. These two
findings imply that banking on the poor can be a profitable business. However, attaining financial
viability and sustainability is the major institutional challenge. Deposit mobilization is the major
means for microfinance institutions to expand outreach by leveraging equity (Sacay et al 1996). In
order to be sustainable, microfinance lending should be grounded on market principles because
large scale lending cannot be accomplished through subsidies.
The absence of savings has unfortunately been one of the distinguishing features of Indian microfinance
and prevents it from providing a financial service to the poor which is as valuable to them as
Page 67 of 74
microcredit,” the report outlines. There are strong synergies between micro insurance and microcredit.
Insurance offers safeguards to assets created under microcredit programmes. It also protects savings
from being wiped out by shocks arising out of sickness, death, accidents or droughts
A main conclusion of this project is that microfinance can contribute to solving the problem of
inadequate housing and urban services as an integral part of poverty alleviation programmes. The
challenge lies in finding the level of flexibility in the credit instrument that could make it match the
multiple credit requirements of the low income borrowers without imposing unbearably high cost of
monitoring its end-use upon the lenders. A promising solution is to provide multi-purpose loans or
composite credit for income generation, housing improvement and consumption support.
Consumption loan is found to be especially important during the gestation period between
commencing a new economic activity and deriving positive income. Careful research on demand for
financing and savings behavior of the potential borrowers and their participation in determining the
mix of multi-purpose loans are essential in making the concept work (tall 1996).
Eventually it would be ideal to enhance the creditworthiness of the poor and to make them more
"bankable" to financial institutions and enable them to qualify for long-term credit from the formal
sector. Microfinance institutions have a lot to contribute to this by building financial discipline and
educating borrowers about repayment requirements.
The J&K bank is help the people of J&K in every possible way in terms of granting micro-finance
loans and is in-terms helping to tackle the menace of unemployment and is helping the J&K STATE to
grow economically as well.
Lot needs to be more done in-terms of micro-finance to grow rapidly because micro-finance is need
of hour not only is J&K but is entire country to tackle the unemployment , to reduce poverty and to
increase the economy of country.
It is observed that JK Bank is playing a significant role in Micro-Finance. It provides different types of
services to the people.
All the employees of the JK Bank are working efficiently to provide services to the customers. Yet there
is a gap between the bank and the customers. For this the bank has to take the remedial measures and
should provide the facilities and the assurance to the customer that the bank is always in their service.
FINDINGS
Page 68 of 74
 No doubt the concept of microfinance is not new to subcontinent however the introduction of
microfinance as a programme for developing and uplifting poor and underprivileged segments
of society has not been taken seriously.
 During my market survey (Target Area District Anantnag) I observed that, a huge chunk of
population more than 56% is still unattended. The reasons are:-
1) Unawareness about developments in financial sector.
2) Illiteracy among Masses.
3) Lack of information.
4) Scarcity of MFOs/Financing Agencies.
 The key bottleneck is the shortage of MFIs operating in the state. No doubt there are numerous
micro financing organizations and NGOs in India but J&K in general and south Kashmir in
particular have hardly any organization working towards the cause of micro financing. There are
few organizations with limited resources operating in this part of valley.
 At some places it has been observed that instead of eradicating poverty. Micro financing have
driven poor households into a debt trap.
1) High interest rates – interest rate ceiling hurt poor households that choke off the supply
of credit. The reasons are summarized as under:-
2) High establishment cost.
3) Low scale of finance (Ranging from 250,000 to 30lacs)
4) Diversion of funds. Money from loans is often used for durable consumer goods,
weddings, medical care and other consumption purpose instead of being used for
productive investments.
 MFI/ Banks increasingly try to cater to customs who are influential, better off than their original
costumers, primarily poor families.
1) Corruption/ Red tapism.
2) Favoritism.
3) Selection Bias.
Page 69 of 74
4) Mismanagement.
5) Gender Bias.
6) Selective funding in order mitigate risks and incur lower costs on financing.
 Involvement of brokers /inter mediaries have aggravated the situation and restricted the
outreach of finance to deserving.
 Low subsidies mixed with cumbersome disposal.
 The potential in the under – financed productive sectors like, tourism, Handicrafts, Dastkar
finance and Agriculture commodities and in the artisan sector & zafran has not been properly
taped by the J&K Bank.
 The people are not still aware of the new products of the J & K Bank. These new schemes
include Budshah primary Education Finance J K Bank Zafran Finance, JK Bank Khatamband
Finance, JK Bank Craft Development Finance, JK Bank Giri Finance, and many other such
schemes
 The J&K Bank has established the credit counseling centers in the every district of the STATE,
which helps the people in getting information regarding various lending schemes of the bank
SUGGESTIONS
 Commercialize and integrate microfinance into main stream financial markets and to situate
microfinance amongst legitimate financial institutions.
 Encourage entry of other players from financial markets, in order to expand outreach.
 Improve governance, management and transparency, through ownership and capitalization.
Page 70 of 74
 Influencing policies and finance sector, in favor of poor.
 Microfinance experts agree that women should be primary focus on service delivery. Evidences
show that they are less likely to default on their loans than men. These initiatives shell help to
improve the:
1. Standard of living help among impoverished community.
2. Help women empowerment.
3. Improve health and child education.
4. Help in eradicating common social evils.
 Bank/ state government agencies should design schemes, there by extend loans to those with
little to no assets and should engage in small size loans typically associated with microfinance as
microfinance is based on the philosophy that small amounts of credit can help end the cycle of
poverty.
 RBI should be approached by the J&K state government to provide licenses to some state based
NGOs to transform into full-fledged MFIs. The J&K Bank should frame a separate department
properly licensed from RBI in order to cater to this segment.
 The significance of this study lies in the fact that 60-80% of the total populations in valley are
small scale former and apple growers.
 Some economically viable sectors of the state viz- tourism, agriculture, horticulture, handicraft,
has not been fully brought into the ambit of financing.
 Government Agencies/Departments in credit supply to poor households should be regularized

properly through:
1. Efficient and skilled management.
2. Effective selection, screening, implementation and monitoring.
3. In time and Hassel free disbursement of subsidies.
4. Selections should be based on merit basis.
5. Free training programs should be conducted.
Page 71 of 74
 Financial awareness and educating people about the benefits of micro financing and about
schemes designed by governments and financial institutions for upliftment of impoverished
community.
 The J&K Bank should adopt an integrated approach to agriculture financing by addressing an
entire chain from production to consumption with a deep sectoral focus. The Bank should also
include credit facilities to cold storage and warehouses.
 The J&K Bank should also focus on financing of post harvest, infrastructure such as grading,
packing facility, cold storage and fruit juice manufacturing and other such facilities
 The J&K Bank should now follow intensive lending rather than extensive lending; the process of
intensive lending builds the network of financial intermediation and then leverages these for
extensive lending.
 The people should be informed about the new schemes of the JK Bank such as. Budshah primary
Education Finance,J K Bank Zafran Finance, JK Bank Khatamband Finance, JK Bank Craft
Development Finance, JK Bank Dastakar
 The tradition arts and dastakar should be financed with the new schemes of the JK Bank so that
the traditional economic sector of the state can be boosted and can be retained in its original
form which it has lasted from past few years.
 The JK Bank should develop customer oriented strategy so that the new customers can be
attract
BIBLIOGRAPHY
BOOKS:
Dr.vinod Kumar,(2009) Micro Finance, university science press [available

http://books.google.co.in/books?
id=GG8saxQM9pQC&printsec=frontcover&dq=micro+finance&hl=en&sa=X&ei=jVMIULyHIsiGrAeC5cjXD
g&ved=0CDoQ6AEwAA#v=onepage&q=micro%20finance&f=false
Page 72 of 74
Suresh sundaresan (2008) Micro finance-emerging trends & challenges,MPG books ltd [available
id=iVdIxfNHyakC&printsec=frontcover&dq=micro+finance&hl=en&sa=X&ei=jVMIULyHIsiGrAeC5cjXDg&v
ed=0CD8Q6AEwAQ#v=onepage&q=micro%20finance&f=false
Susan johson (2007) Micro finance and poverty reduction, Oxfam publication [available
id=MjWewiCahk0C&printsec=frontcover&dq=micro+finance&hl=en&sa=X&ei=jVMIULyHIsiGrAeC5cjXDg
&ved=0CF4Q6AEwBg#v=onepage&q=micro%20finance&f=false
Websites:
http://www.accion.org/page.aspx?pid=265
http://www.cse.iitb.ac.in/~cs671/web07/web06/web05/lectureslides/microfinance_annie.ppt
http://www.in.undp.org/content/dam/india/docs/ready_reckoner_on_microfinance.pdf
http://www.jkbank.net
http://www.jkbank.net/specialisedLoans.php
http://www.jkhandloomdepartment.org
http://www.jkhandloomdepartment.org/downloads/Progress%20of%20Sanctioned%20Handloom
%20Clusters%20for%20Jammu.pdf
http://www.kashmircorps.org/reports_files/2009-2010%20Microcredit%20in%20Kashmir.pdf
http://megselfhelp.gov.in/workshop/17032007/Status%20of%20Micro%20Finance%20in%20India.pdf
http://www.risingkashmir.in/news/jk-bank-for-loans-to-educated-unemployed-youth-1030.aspx
http://www.sa-dhan.net/Resources/Micro%20Finance%20Matters-March%202012%20FINAL.pdf
Research Paper:
Development microeconomics P Bardhan, C Udry – 1999 – b

Microeconomics RS Pindyck, DL Rubinfeld, PL Mehta – 1995
Microeconomics of banking X Freixas, JC Rochet – 2008
Page 73 of 74
Microeconomics B Fine – University of Chicago Press Economics Books, 2016

Microeconomics: theory and applications D Salvatore – OUP Catalogue, 2008
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A PROJECT REPORT

MASTERS of Business Administration

IQBAL INSTITUTE OF TECHNOLOGY &

Title of your Project

MASTERS of Business Administration (MBA)

Under The Guidance Of

Name of the Mentor/External Supervisor Mr. Adil Mehraj

pen-locked by me during my Summer Internship Programme at “J&K BANK”, under the

submitted to any other university or organization before.

REG. NO: 18036114001

This is to certify that “Maleeha Nazir”, the student of Department Of Management

“POTENTIALS OF MICRO-FINANCE OF J&K BANK”

under the University Statutes.

We wish him/them all the success in his future endeavors.

uplifting myself that I ever desired.

IITM for growing me into true connoisseurs.

It is my privilege to thank “NAME OF EXTERNAL GUIDE” for his immense support

throughout my study. I wish to thank “NAME OF THE MANAGER/HEAD OF YOUR

their encouragement, which is the greatest source of my inspiration.

S.NO CONTENTS PAGE NO.

The analysis of the study

The study among others has the following findings

 Relationship based banking for individual entrepreneurs and small businesses.

A Self-Help Group (SHG) is a registered or unregistered group of micro entrepreneurs having

Advantages of financing through SHGs

Objectives of the Research:

Tools and technique used in the study:

Secondary Data: Journal and other research reports.

The TARGET GROUP:

How does microfinance help the poor?

Microfinance services are provided by three types of sources:

1. Micro, Small & Medium Enterprises Development (MSMED) Act, 2006

1.1 Definition of Micro, Small & Medium Enterprises.

a) Manufacturing Enterprise i.e. Enterprises engaged in the manufacture or production,

I. A Micro Enterprise is an enterprise where investment in Plant and Machinery does

III. A Medium Enterprise is an Enterprise where the investment in plant and

b) Service Enterprises i.e. enterprises engaged in providing or rendering of services and

I. A Micro Enterprise is an enterprise where the investment in equipment

II. A small Enterprise is an Enterprise where the investment in equipment is more

III. A Medium Enterprise is an Enterprise where the investment in equipment is more

Top 22 Micro Finance Institutions in India

1) SKS Microfinance Ltd (SKSMPL).

INCEPTION OF THE ORGANISATION

MISSION OF THE BANK

VISION OF THE BANK

INTERNAL ENVIRONMENT EXTERNAL ENVIRONMENT

 A listed company of the state on BSE and NSE.

1. There is less competent staff at lower level.

Products and Services of J&K Bank

6) Saving and Deposits

 Saving Bank Deposit

10) Mutual Funds

11) Support Services

14) Non Resident Banking

Deposit Plans for Returning Indians

Foreign Currency Non-resident- Banks (FCNR-B)

 Foreign Currency Non resident Bank(FCNRB)