1.

1 INTRODUCTION:

In this study we compare the performance of Mortgage loan in Co-operative and Nationalist
Bank. Here we discuss the about the working of loan department in the banking sector, giving
special reference to mortgage loan. A variety of financial services are offered to consumers
and businesses by the banking industry, which is the backbone of contemporary economies. It
also plays a critical role in facilitating financial transactions and economic progress. Dating
back several centuries, the banking sector has developed into a dynamic, intricate structure
that adjusts to the constantly shifting demands of a worldwide community.

The banking sector provides a wide range of financial services to individuals and companies,
and it is the foundation of modern economies. Additionally, it is essential for enabling
financial transactions and the advancement of the economy. The banking industry, which has
been around for several centuries, has grown into a complex, dynamic system that responds
to the ever-changing needs of the global community.

Banks also serve as middlemen in the financial system, bridging the gap between people who
have extra money and people who need capital. The role of intermediary promotes
investment, employment growth, and general economic progress. The banking industry's
resilience is demonstrated by its capacity to withstand shifts in regulations, technological
disruptions, and economic ups and downs, highlighting its critical role in preserving financial
stability.

Investigating the systems that control banking operations, legal frameworks, and the
prevailing trends that mould its environment becomes essential as we negotiate the
complexities of this diverse sector. The results of this investigation will provide insight into
the subtleties of a sector of the economy that promotes global economic growth while
simultaneously protecting the financial interests of individuals and companies.

Aspiring homeowners and financial institutions have a mutually beneficial relationship when
it comes to mortgage loans. Banks, credit unions, and other lending organisations act as
middlemen, providing financial solutions that let people fulfil their aspirations of becoming
homeowners. Since homeownership not only satisfies personal goals but also promotes

1
community stability and development, it is a process that is deeply knit into the fabric of
economic growth.

Mortgage loans represent a large financial commitment for both people and families, and the
choice of lender can significantly affect the loan's total cost and experience. Cooperative
banks and nationalised banks are the two main categories of entities in India that provide
mortgage loans. It is imperative that borrowers thoroughly weigh their options before making
a selection because every type of bank has a unique set of benefits and drawbacks.

Co-operative Banks:

Cooperative banks are financial institutions owned by its members with a primary goal of
meeting the needs of their immediate communities. To their members, they usually provide a
variety of financial services and products, such as mortgage loans. Cooperative banks are
renowned for their dedication to provide their members accessible financial solutions and for
their personalised service.

As member-owned institutions dedicated to meeting the many needs of their local

communities, cooperative banks are the cornerstones of community-centric financial services.
These banks put the empowerment of their customers first thanks to a democratic governance
structure that gives every member a voice. Cooperative banks customise its services to meet
the unique needs of local businesses and communities by providing a wide range of financial
services, including mortgage loans. What distinguishes them is their commitment to
accessibility, as they work to close gaps in financial inclusion by interacting with
marginalised communities. Cooperative banks are well-known for providing individualised
service and cultivating strong bonds with their members to build a collaborative and trusting
environment.

Key points of Co-operative Banks:

 Co-operative Banks are member- owned and democratic banks.

 Co-operative Banks focus on the local community.
 Co-operative Banks usually have affordable financial products and services.
 Co-operative Banks have strong commitment towards society.

2
  Co-operative Banks are resilient in times of economic crisis.

Advantages and Disadvantages of Co-operative Banks:

ADVANTAGES:
 Personalized Services
 Competitive Interest Rates
 Local Knowledge
 Affordable Financial Solutions.
 Social Responsibility

DISADVANTAGES:

 Limited Product Range

 Limited Capital
 Smaller Branch Network
 Potential Conflict of Interest

Nationalised Banks:

Nationalized banks are financial institutions that are owned and controlled by the government of a
country. They are essential to a nation's financial system because they offer a vast array of financial
services to the public, private, and corporate sectors. They are India's biggest providers of mortgage
loans. Nationalised banks are renowned for their wide branch network and stability.

Nationalised banks are essential to a nation's financial landscape since they are government-owned
and regulated and act as important pillars of the economic system. A strategic alignment with national
economic goals and policy objectives is ensured by this ownership structure. These financial
institutions, which provide a wide range of services to the public, private, and corporate sectors, are
crucial to the growth and stability of the financial sector.

3
Being a significant supplier of mortgage loans is one of the nationalised banks' most important roles.
For numerous people and families, these loans make it possible to fulfil their dream of becoming
homeowners. Nationalised banks boost the real estate industry and, consequently, the economy as a
whole by providing competitive interest rates and a variety of mortgage options.

Keys Points of Nationalised Banks:

 Nationalised Banks are government owned banks.

 It is popular for its wide range of services.
 Nationalised Banks provides services to all segment of society.
 National Banks can be used to promote Financial Inclusion.

Advantages and Disadvantages of Nationalised Banks:

ADVANTAGES:
 Stability
 Accessibility
 Social Responsibility
 Affordability.

DISADVANTAGES:

 Limited Innovation
 Potential for Inefficiency
 Bureaucracy
 Limited Capital

1.2 NEED FOR THE STUDY:

Banking industry's essential position in modern economies. Banks serve as the foundation of
the financial system, facilitating transactions, advancing economic growth, and offering a
range of financial services to both individuals and companies. Since home loans require a

4
substantial financial commitment from individuals and families, the study focuses on
analysing the performance of mortgage loans in cooperative and nationalist banks. For
borrowers to make wise selections, they must be aware of how the lending departments
operate, particularly in relation to housing and mortgage loans. Given the win-win situation
between prospective homeowners and financial institutions, it is imperative to look into the
specifics of these loans in various banking institutions. The study attempts to offer insightful
information about a field that supports the health of the banking industry overall by
protecting people's and businesses' financial interests while simultaneously fostering global
economic progress.

1.4 OBJECTIVES OF THE STUDY:

 To study the difference between the co-operative and nationalised banks mortgage
loans

 To study the Working of Loan department in Co-operative Banks and Nationalised

Banks.

 To assess the loan approval process and eligibility criteria for mortgage loans from
cooperative and nationalized banks.

1.3 SCOPE OF THE STUDY:

 The study aims to analyse the difference in the working of Mortgage loan department
between Co-operative and Nationalised banks.
 This study intends to understand and compare the performance of Mortgage loans in
The Agrasen Co-operative Urban Bank and State Bank of India.
 The study attempts to analyse mortgage loans of the banks for the period of 5 years

5
1.5 RESEARCH METHODOLOGY:

1.5.1 Research Design:

1.5.2 Data Sources:

Data Sources

The data is collected from various sources like:

 Company Manuals
 Company website
 Company’s Annual Statements

1.6 CHAPTERIZATION:
CHAPTER1: INTRODUCTION
This chapter consists of INTRODUCTION to the study, the need for study, objectives,
Research methodology, sources of data, and scope of the study, structure of the study with
sound explanation.

CHAPTER2: LITERATURE REVIEW

The second chapter includes a "REVIEW OF LITERATURE" that includes ten research
articles and highlights the relevant theoretical and empirical foundation of the issue.

CHAPTER3: INDUSTRY & COMPANY PROFILE

The third chapter contains the BANK INDUSTRY &COMPANY PROFILE which includes
a SWOT analysis, PESTLE analysis, and a brief historical review on the company.

CHAPTER4: DATAANALYSIS& INTERPRETATION

6
Fourth chapter consists of DATA ANALYSIS AND INTERPRETATION based on the
collected data from various primary and secondary sources.

CHAPTER5: FINDING, SUGGESTION & CONCLUSION

The fifth chapter consists of FINDINGS, CONCLUSION AND SUGGESTIONS along with
LIMITATIONS and is concluded with BIBILIOGRAPHY.

7
CHAPTER2 -LITERATURE REVIEW

8
2.1 MEANING AND DEFINITION:

MEANING:

A mortgage loan is a type of financial arrangement whereby a borrower borrows money to

buy or refinance real estate from a lender. The real estate, which is typically a home, acts as
loan collateral. The borrower consents to make regular payments, usually monthly
instalments, to repay the loan balance plus interest over a predetermined period of time. Until
the borrower repays the loan in full, the lender—typically a bank or mortgage company—
holds a security interest in the property. The lender may be entitled to take ownership of the
property through a legal procedure called foreclosure if the borrower defaults on the loan.

The loan amount, interest rate, length of the loan, and any other costs or fees are all included
in the terms of a mortgage loan. The structure of mortgage loans can differ; fixed-rate
mortgages have a fixed interest rate for the duration of the loan, while adjustable-rate
mortgages (ARMs) have variable interest rates that change depending on the state of the
market.

A mortgage loan's terms comprise the loan amount, interest rate, loan term (repayment
period), and any other costs or penalties. There are two types of mortgage loans: fixed-rate
mortgages, which have an interest rate that stays the same for the duration of the loan, and
adjustable-rate mortgages (ARMs), whose interest rates change depending on the state of the
market.

DEFINITION:

A mortgage is a loan secured by real estate, typically used to finance the purchase of a home.
The borrower agrees to repay the loan amount, plus interest, over a specified period. The
property serves as collateral, and failure to meet repayment terms may lead to foreclosure by
the lender.
9
2.2TYPES OF MORTGAGE LOANS:

There are different types of Mortgage loans:

1. SIMPLE MORTGAGE:

In a simple Mortgage the borrower pledges their personal belongings as security for the loan.
If the borrower fails to repay the loan in full under a basic mortgage, the lender may sell the
property.

A straightforward and conventional type of property-backed borrowing arrangement is a

simple mortgage. Under this arrangement, a borrower in need of money puts their assets as
security for the loan. A simple mortgage does not need the title to the property to be
transferred to the lender, in contrast to more intricate mortgage arrangements. Rather, during
the duration of the loan, the borrower is still the owner of the asset.

The process starts with a legal agreement between the lender and the borrower that specifies
the loan's terms, including its amount, interest rate, repayment plan, and any other pertinent
requirements. The asset serves as security for the loan and is typically a home or other real
estate. This means that the lender has the legal right to seize the property through a procedure
known as foreclosure if the borrower defaults on the agreed-upon repayment terms.

This mortgage arrangement is straightforward and easy to understand. The property serves as
security for the debt when the borrower receives funds from the lender for a particular
purpose, such buying a home or paying for large expenses. The borrower keeps ownership of
the property and continues to live there during the repayment period.

A mortgage deed or agreement, a legally binding document that outlines the rights and duties
of both parties, usually contains the terms and conditions of a basic mortgage. Simple
10
mortgages are now available to individuals and families looking to finance real estate thanks
to this uncomplicated structure, which eliminates the need for complicated financial
instruments or legal procedures.

2. MORTGAGE BY CONDITIONAL SALE:

Under this type of mortgage, the borrower sells their property with the condition that the sale
will become effective if they default in repayment but becomes void on successful repayment
of the loaned amount of money. In a mortgage by conditional sale, the lender, also known as
the mortgagee, purchases the property from the borrower, sometimes known as the
mortgagor, with the understanding that ownership will return to the borrower upon loan
payback in full. This arrangement creates a conditional transfer of property rights by fusing
aspects of a mortgage and a sale.

A unique financial instrument that deftly combines aspects of real estate transactions and
conventional mortgages is a mortgage by conditional sale. This arrangement involves a
special transaction between the lender, known as the mortgagee, and the borrower, known as
the mortgagor. With one important caveat—that the sale will only take place in the case of a
loan repayment default—the borrower essentially sells their home to the lender. As a result,
there is a conditional transfer of property rights, giving the lender security akin to a mortgage.
One interesting aspect of this arrangement is that the transaction will automatically be
voidable in the event that the borrower successfully repays the entire loan amount.

In these circumstances, the borrower regains ownership of the asset with ease. The
conditional sale structure fulfils two purposes: it provides the lender with a risk-mitigation
plan in the event of default and encourages the borrower to fulfil repayment commitments in
order to retain title to the property without challenge. In order to guarantee that all parties to
this novel mortgage model have a clear grasp of their rights and obligations, legal paperwork
is essential in defining the terms and circumstances.

3. MORTGAGE BY TITLE DEED DEPOSIT:

11
Under the mortgage by title deed deposit, the borrower deposits the title deed of the property
in question, that is mortgaged with the lender, against the loan that it is available for. In a
mortgage by title deed deposit, the lender, acting as the mortgagee, receives the title deed
from the borrower, commonly referred to as the mortgagor, who promises the property as
security for a loan. Under this arrangement, the borrower keeps ownership of the asset but
gives the title deed as collateral to the lender. Until the borrower fully repays the loan, the
lender retains ownership of the title deed. The lender is legally entitled to obtain possession
of the property through the title deed in the event that the borrower fails on the loan.

This kind of mortgage is a type of secured loan since it gives the lender some security but still
permits the borrower to use the property. In order to formalise the terms and circumstances of
the mortgage by title deed deposit and outline each party's rights and obligations, legal
documentation is usually required.

A mortgage by title deed deposit is a type of lending arrangement in which the lender, acting
as the mortgagee, receives the title deed from the borrower, known as the mortgagor,
presenting the property as security. In this arrangement, as opposed to traditional mortgages,
where the property is kept as security, the borrower keeps possession of the property and
gives the lender the necessary title deed. This legal commitment, which represents the loan's
collateral, is represented by this deed. The borrower will continue to use and occupy the
property for the duration of the loan. But in the event that the borrower defaults on payments,
the lender, who is in possession of the title document, is legally entitled to take ownership of
the asset.

This mortgage structure complies with secured loan guidelines and gives the lender a sense of
security. Legal documentation, which outlines the precise circumstances, rights, and duties of
both the borrower and the lender under this special mortgage by title deed deposit
arrangement, is usually used to assure clarity and adherence to the agreed-upon terms.

4. RESERVE MORTGAGE:

12
Reverse mortgage loans are typically backed by real estate that allows the borrower to access
the property's unmortgaged worth. With reverse mortgages, homeowners can avoid making
monthly mortgage payments by converting the equity in their house into legal tender income.
With the help of a reverse mortgage, homeowners—who are usually seniors—can turn a
portion of their home's equity into cash without giving up ownership of the property. In a
reverse mortgage, the homeowner receives payments from the lender instead of the lender
receiving payments from the borrower as in a standard mortgage. The loan proceeds can be
given to the homeowner in a number of ways, such as a lump sum, regular instalments, or a
line of credit.

Repayment of a reverse mortgage is typically deferred until the homeowner sells the house,
vacates the property, or passes away. This is one of its main characteristics. At that point, the
revenues from the sale of the house are used to repay the debt. The homeowner or their heirs
get the remaining monies if the proceeds are greater than the loan amount.

For elderly homeowners with significant home equity but low incomes, reverse mortgages
are intended to offer financial flexibility. The loan amount can build over time, potentially
decreasing the bequest for heirs, therefore it's critical for borrowers to comprehend the terms
and ramifications of a reverse mortgage. The ins and outs of reverse mortgages might differ,
and before taking out this kind of loan, applicants are usually obliged to attend counselling to
make sure they get the full ramifications.

2.3 CHARACTERISTICS OF MORTGAGE LOANS:

1. SECURED DEBTS:

A key feature of mortgage loans is secured debt, which creates a physical link between the
borrowed money and a valuable asset, typically the house being financed. This
collateralization, which gives the lender an extra degree of security, is an essential component
of the lending arrangement. Regarding mortgage loans, the lender, or mortgagee, is legally
entitled to begin foreclosure procedures in the event that the borrower, or mortgagor, defaults
on the repayment commitments specified in the loan agreement. Through the legal process of

13
foreclosure, the lender can seize the property, sell it, and utilise the sale proceeds to pay off
the outstanding debt.

Collateral, usually the property being financed, is used to secure mortgage loans. This implies
that the lender has the legal authority to foreclose and seize possession of the property in the
event that the borrower defaults on the debt. By providing the lender with a kind of security,
the property lowers the risk attached to the loan and frequently results in better interest rates
for borrowers.

Since there is physical value underlying the loan, the property serves as a security measure,
reducing the risk to the lender and fostering confidence. Because the lender bears less risk, a
more competitive loan pricing structure may be offered, which benefits borrowers by
translating into more favourable interest rates. Mortgage loans are classified as secured debt
instruments in the world of financial transactions because of this connection between the loan
and the property, which is protected from foreclosure.

Mortgage loans are based on secured debt, which establishes a mutually beneficial
relationship between lenders and borrowers around the valuable asset that is being financed:
the house. The property is pledged by the borrower as collateral in this financial arrangement,
creating an unambiguous and legally binding connection between the borrowed money and
the underlying asset. The lender uses this collateralization as a safety precaution. In the event
that the borrower defaults on their loan, the lender may use its legal authority to foreclose on
the property.

2. FIXED OR ADJUSTABLE INTEREST RATES:

Fixed-rate mortgages give borrowers monthly payment certainty because the interest rate
remains constant for the duration of the loan. On the other hand, interest rates on adjustable-
rate mortgages (ARMs) are subject to periodic adjustments, typically in line with a particular
financial index. ARMs may have lower starting interest rates, but there is a chance that
payments may change over time.

14
A crucial decision for borrowers navigating the world of mortgage loans is whether to choose
fixed or adjustable interest rates. Each option has pros and downsides of its own. Stability is
the defining characteristic of fixed-rate mortgages. Fixed rate loans allow borrowers to
guarantee an interest rate that stays the same for the whole loan term. Their comprehension of
their monthly payments is enhanced by this regularity, which promotes budgeting consistency
and long-term financial planning. Because it protects borrowers from the volatility of interest
rate swings in the larger financial market, the fixed-rate structure is especially attractive
during difficult economic times.

Conversely, ARMs, or adjustable-rate mortgages, offer a flexible option. The interest rates on
these mortgages are variable at predefined intervals; these intervals are usually aligned with
particular market indexes. Comparing ARMs to their fixed-rate equivalents, they frequently
have lower beginning interest rates, which could result in early loan cost savings. But there is
a trade-off: interest rates could rise, which would result in higher monthly payments and
possibly higher borrowing expenses overall. This interest rate flexibility might be helpful to
borrowers who intend to sell or refinance their home before any future rate adjustments, or
who anticipate positive market conditions.

The decision between fixed and adjustable interest rates for mortgage loans essentially comes
down to the borrower's financial objectives, risk tolerance, and market outlook. Fixed rates
give a predictable and safe course, but adjustable-rate mortgages (ARMs) offer flexibility and
possible cost savings, but they also carry a certain amount of risk due to interest rate
volatility. This choice becomes crucial in determining how borrowers' financial lives turn out,
as it affects their monthly cash flow, resilience to market fluctuations, and general financial
health over the course of the loan.

3. AMORTIZATION:

An amortisation schedule, or table that shows the monthly payments over the loan period, is
usually used for mortgage loans. Principal and interest are covered by these installments, with
a larger initial percentage going towards interest. More of each monthly payment is allocated
to the principal as the amount owed declines over time.

15
At the core of the mortgage loan repayment structure is amortisation, which provides a
methodical and planned way to gradually reduce the outstanding debt during the loan
duration. Like a financial road plan, the amortisation schedule is a detailed table that outlines
the particulars of each monthly payment. This schedule stands out since it allocates payments
to both the main and interest components.

During the first few months of a mortgage, a large amount of each monthly payment goes
towards paying interest on the outstanding loan balance. This interest payment that is paid at
the beginning of the loan is a reflection of the risk that the lender assumed. But with time,
because of the consistent payments, the outstanding amount reduces, which causes a change
in the distribution of funds. As the amount owed decreases, a larger portion of each month's
payment is allocated to the principal, hastening the debt's total reduction.

The elegance of amortisation is found in its capacity to gradually alter the borrower's outlay
of funds throughout the course of the loan. It facilitates the loan's ultimate full repayment
while guaranteeing a consistent and predictable decrease in the outstanding balance.
Borrowers can increase the equity in their houses with this organised strategy, which also
provides a clear financial trajectory and a thorough grasp of how payments affect principle
and interest components. This helps borrowers make future plans. For mortgage borrowers,
then, the amortisation process becomes a fundamental component of financial literacy,
helping them to navigate the changing nature of their home loan obligations.

4. LONG TERM:

The length of time the borrower consents to repay the mortgage is known as the loan term.
Terms like 15, 20, or 30 years are typical. While a lengthier term may offer lower monthly
payments but higher total interest charges, a shorter loan term typically results in higher
monthly payments but lower overall interest costs.

One important component of mortgage loans is the loan term, which represents the
predetermined period of time that borrowers commit to paying back the money they have
borrowed. These terms can have different durations; 15, 20, or 30 years are typical choices.
This time component profoundly affects how borrowers view their financial environment and
how their mortgage obligations evolve.
16
Choosing a shorter loan term accelerates some financial benefits but compresses the
repayment timetable, leading to higher monthly payments. Because the borrower pays less
interest throughout the course of the loan, a shortened timetable results in lower overall
interest payments. Furthermore, shorter terms frequently correspond to faster equity growth,
enabling borrowers to hasten the process of becoming property owners.

On the other hand, a longer loan term gives borrowers the benefit of reduced monthly
payments, giving them more financial freedom. Higher total interest costs are the price paid
for the longer payback time, nevertheless. Borrowers need to consider the total amount of
interest paid over the course of the loan, even though the affordability of monthly payments
may seem alluring.

Depending on long-term planning, cash flow, and personal financial objectives, selecting a
loan term becomes a strategic choice. Shorter periods may be preferred by borrowers who
want to maximise their financial efficiency and accelerate the accumulation of equity, while
longer terms may be preferred by those who value budget flexibility and less immediate
payment obligations.

5. DOWN PAYMENT:

Usually, borrowers must contribute a down payment equal to a portion of the cost of the
property. As the borrower's original equity in the house, the down payment affects the loan
amount, interest rate, and need for mortgage insurance.

An essential part of the mortgage lending process, the down payment is a financial
commitment made by the borrower and shapes several parts of the home finance
arrangement. The down payment is typically stated as a percentage of the purchase price and
acts as the initial infusion of equity into the house.

The down payment is more important than just a requirement for financing. First off, because
the down payment lowers the total amount that must be borrowed, it immediately affects the
loan amount. A higher down payment can lead to a smaller loan balance, which may result in
better loan terms, including a lower interest rate. The borrower may then benefit from long-
term savings as a result of this.

17
Furthermore, the down payment has an initial impact on the borrower's equity in the house.
Increased down payments provide the borrower a bigger ownership position in the home and
lay the groundwork for future equity growth. This equity may prove to be a useful asset,
providing financial flexibility for upcoming projects like home renovations, debt relief, or
even borrowing for additional investments.

Furthermore, a borrower's ability to avoid paying private mortgage insurance (PMI) is largely
dependent on their down payment. Lenders frequently need PMI in order to reduce their risk
when the down payment is less than 20% of the total cost of the home. Borrowers must
comprehend how the PMI criteria and down payment quantity interact in order to design a
sound financial mortgage arrangement. In the end, the down payment represents an
investment that goes beyond a one-time cost. It moulds the mortgage's financial environment,
impacting everything from the loan amount and interest rate to the continuous equity and
insurance needs. By carefully weighing the down payment amount, borrowers can customise
their home loan to meet their specific financial objectives and strike a balance between short-
term affordability and long-term security.

18
2.4 LITERATURE REVIEW:

1. Tengku Wulan Handayani, MiraAgustina, the article titled as “ANALYSIS OF

PENSIONER CREDIT GROWTH RATE AT NASARI SAVINGS AND LOAN
COOPERATIVE IN LHOKSEUMAWE”, This study aims to determine the growth of
pension loans at the Savings and Loans Cooperative in Lhokseumawe. the data obtained or
taken is based on the results of interviews conducted at the Nasari Savings and Loans
Cooperative in Lhokseumawe using data from 2017 to 2021. The results showed that the
growth of pension loans in savings and cooperative loans fluctuated and tended to decline.
The author advises the savings and loan cooperative Nasari in Lhokseumawe to reduce the
interest rate on pension loans, so that it can compete with other cooperatives and increase
credit growth every year. In this research, we conducted the research location at the Nasari
Savings and Loans Cooperative by taking the research location that corresponds to the
author's residence o Jl. New Ocean, Simpang Empat Banda Sakti, Lhokseumawe City.
This study uses qualitative research in which the data obtained or taken is based on the results
of interviews conducted at the Nasari Savings and Loans Cooperative in Lhokseumawe. The
population in this study are all people who have a salary/job and are retired in Lhokseumawe,
while the sample used in this study is a number of people who have a salary/job and are
retired who wish to borrow pension loans from the Nasari Savings and Loans Cooperative
in Lhokseumawe.

2. Putri Rahmayani,Sultan Haris Al-Muridhillah, the article titled as “ANALYSISOF

THE ROLE OF SAVING AND LOAN CREDIT IN PNS RETIREMENTS IN THE
NASARI SAVING AND LOAN COOPERATIVE (KSP) KOTA LHOKSEUMAWE”,

19
This study focuses on the growth of pension credit at the Nasari Savings and Loans
Cooperative, LhokseumaweCity. The methodology used in the researchprocess is descriptive
qualitative, namely knowing the growth of pension credit each year at the Nasari Savings and
Loans Cooperative, Lhokseumawe City, using existing data. The analysis used in this
research is trend analysis. The results showed that the growth of pension credit in the Nasari
Savings and Loans Cooperative fluctuated and tended to decrease with the average credit
growth. The author gives advice to the Nasari Savings and Loans Cooperative in
Lhokseumawe City in order to reduce interest rates on pension credit loans, so that they can
compete with other cooperatives and increase credit growth every year. The NASARI
Savings and Loans and Financing Cooperative is always improving and improving the best
service for all members and obligations to the state. Various efforts were made by the
NASARI Savings and Loans Cooperative to achieve this. In paying/depositing taxes, the
NASARI Savings and Loans and Financing Cooperative performs according to a
predetermined schedule and use facilities issued be the Directorate General of Taxes to
facilitate tax payments/deposits, namely by using E-Billing and depositing via Internet
Banking. In addition to making it easier, using this facility also saves time because there is no
need to queue anymore. KSP Nasari's capital does not only come from individuals, but also
this capital is obtained from several Conventional Banks that work closely with KSP Nasari.
Customers do not need to worry if they are afraid that this Cooperative lacks capital or does
not even provide good service. This cooperative has also been supervised by the OJK and
what is certain is that it has been approved directly and InshaAllah Amanah.

3. John Baptist Kowa, Justus Turinawe, the article titled as “A CRITICAL ANALYSIS
OF LOAN POLICIES AND LOAN RECOVERY AT A SAVINGS AND CREDIT
COOPERATIVE ORGANISATION (SACCO) IN UGANDA: A CASE OF Y-SAVE
SACCO”. The major objective of the study is to investigate the effect of loan policies on
loan recovery in a Christian based Savings and Credit Cooperative Organisation (SACCO)
using Y-Save Multipurpose Society Limited in Kampala in Uganda as a case study. Using
self-administered questionnaires and interview guides data was collected from 181
respondents. Respondents were selected using purposive and random sampling techniques
from a study population of 320. The study was guided by three specific objectives and three

20
hypotheses. Loan policies are the independent variable of this study, while Loan recovery is
the dependent variable. Loan policies are made up of the following attributes: Loan Appraisal
policies, Loan Approval and Loan Monitoring policies. Loan recovery is made up of the
following attributes: Loan Recovery Rate, Loan Loss ratio, and Portfolio at Risk. SPSS
version 23 was used to run statistical analysis.

4. Carmleo Algeri, Antonio Faabio Forgione, the article titled as “SPATIAL

DEPENDENCE IN THE NON-PERFORMING LOANS OF SMALL ITALIAN
COOPERATIVE BANKS”. This paper investigates the presence of spatial dependence in
the non-performing loans (NPLs) ratio of small Italian cooperative banks. As these financial
intermediaries operate in a delimited area, the strategies they adopt to recover NPLs can
produce spatial spillover effects on the ability of neighbouring banks to recover credit.
Furthermore, small banks’ reliance on the relationship lending technique to select and
monitor borrowers suggests a similar ability to identify underperforming borrowers, which
may have a negative impact on the community in which those banks operate. Our empirical
estimations provide strong evidence for both spatial and spatial–temporal variables driving
impaired loans in local banks. The results indicate different effects of the spatial terms,
showing a direct positive effect of the contemporaneous spatial lag variable and a negative
effect of the space–time autoregressive coefficient. Whereas the former effects can be
ascribed to changes in the macroeconomic cycle, the latter confirms the insight that the
recovery capacities of local banks can be harmed by neighbouring banks’ credit recovery
policies.

5. Rym Ayadi, Sandra Challita, the article titled as “COOPERATIVE BANKS,

BUSINESS MODELS AND EFFICIENCY: A STOCHASTIC FRONTIER
APPROACH ANALYSIS”, our study examines the relationship between bank business
models (BBMs) and the cost and profit efficiency of cooperative banks from fifteen European
countries over the period 2010–2020. Using the cluster analysis method, we identify five
BBMs, i.e., three retail-oriented BBMs and two market-oriented BBMs, and suggest that
although cooperative banks share common characteristics and objectives, such as mutualism,
localism and a stakeholder view, they pursue their goals by implementing different strategies.
Moreover, we measure the cost and profit efficiency using the stochastic frontier approach
21
(SFA), and the main results underline different levels of efficiency depending on the BBM
implemented. Our results mainly suggest that more retail-oriented banks are more cost and
profit efficient, while market-oriented banks are less. However, less cost- and profit-efficient
banks can improve their efficiency by changing their bank business model. These results are
crucial in shedding some light on the efficiency of cooperative banks and on the diversity in
terms of business models observed within these specific groups of banks.

6. Dr.S.Thiruvarangadas, the article titled as “A STUDY ON COOPERATIVE BANK

IN INDIA WITH SPECIAL REFERENCE TO MARKETING STRATEGIES”,
Banking business has done wonders for the world economy. The simple looking method of
accepting money deposits from savers and then lending the same money to borrowers,
banking activity encourages the flow of money to productive use and investments. This in
turn allows the economy to grow. In the absence of banking business, savings would sit idle
in our homes, the entrepreneurs would not be in a position to raise the money, ordinary
people dreaming for a new car or house would not be able to purchase cars or houses. The
government of India started the cooperative movement of India in 1904. Then the
government therefore decided to develop the cooperatives as the institutional agency to tackle
the problem of usury and urban indebtedness, which has become a curse for population. In
such a situation cooperative banks operate as a balancing centre. This research looks at the
marketing and operations practises of Cooperative Bank in India's when used in this context,
"marketing strategy" refers to any set of actions taken with the intention of increasing
demand for a certain product or service. In light of the increased competitiveness in the
banking industry, the use of this term has become widespread. To stay ahead of the
competition, banks need to develop and implement strategies that provide them a distinct
advantage. Providing excellent customer service is a crucial component in maintaining a
competitive edge. The study's overarching purpose was to learn more about the methods
Cooperative Bank uses in its marketing efforts to win new clients and keep existing ones
happy. The information used for the study comes from both primary and secondary sources
related to Cooperative banking.

22
7. Stefania Veltri, Elena Cristiano, the article titled as “ EXAMINING THE QUALITY
OF THE CONSOLIDATED MANDATORY NON-FINANCIAL STATEMENTS OF A
COOPERATIVE BANKING GROUP: A LONGITUDINAL ANALYSIS”, With the
2014/95/EU Directive, implemented in Italy with the Legislative Decree no. 254/2016, public
interest entities with specific requirements, among which credit institutions, have been
obliged to report several aspects of non-financial information (NFI) in a non-financial
statement (NFS). It remains an open question whether NFI disclosure regulations leads to an
improvement in reporting quality. In this article, we investigate the quality of the
consolidated mandatory NFSs (CNFSs) for the Iccrea Cooperative Banking Group (ICBG)
for the 2017–2020 period. This article is the first study exploring the quality of mandatory
NFDs using a longitudinal approach for a cooperative banking group, and it is also the first to
use three different meanings of quality in the same study (quality as compliance to the Decree
requirements, as multidimensional construct, and as completeness) under the theoretical lens
of material legitimacy.

8. Dr..Ashish Srivastava, the article titled as “WHAT AILS PRIMARY

COOPERATIVE BANKS: A MULTIDIMENSIONAL ANALYSIS”, primary
Cooperative Banks, popularly known as Urban Cooperative Banks (UCBs), are increasingly
becoming marginal players in the Indian financial system as their clientele share is
increasingly being taken away by other banks. Despite their localised presence in large
numbers and an important role in the last mile reach, they are unable to create a niche for
themselves. UCBs face a considerable challenge, if not an existential one, requiring a multi-
dimensional analysis of the issues internal to their working and functions. This paper offers a
practitioner’s perspective on the subject. It highlights the critical issues concerning the
cooperative structure, business model and positioning, capital and market relativity, scale,
cost-efficiency, and governance relating to UCBs and suggests a way forward. The above
discussions bring to the fore the key issues, constraints, bottlenecks, and conundrums faced
by the UCBs, due to which the UCB sector is gradually conceding space to other banks and is
not able to make a mark for itself. In a large and diverse country like India, there is a need for
differentiated banks to suit the varying requirements of individuals, artisans, farmers, small,
medium, and large businesses, etc. Cooperative banking, besides catering to the savings and

23
credit needs of people, has tremendous scope for being an effective tool for social
transformation.

9. Mohd. Shamim Ansari, Monika and Irfan Ali, the article titled as “ DATA
ENVELOPMENT ANALYSIS IN EFFICIENCY MEASURING OF DISTRICT
CENTRAL COOPERATIVE BANKS IN INDIA: A CASE STUDY”, Over time,
cooperative banks lost their dominance in agricultural credit which they enjoyed earlier, and
presently they are facing many issues such as deposit management, liquidity management,
deterioration in asset quality and so on which affect the performance and efficiency of banks.
This study will help the policymakers and management to understand the nature and extent of
inefficiency in District Central Cooperative Banks (DCCBs). Efficiency is essential for
profitable growth of any decision-making units (DMUs), which will ensure value
appreciation and survival in the long run. This paper is an attempt to measure the technical
efficiency of DCCBs of Uttar Pradesh by applying Charnes, Cooper and Rhodes (CCR)
model (Charnes et al., 1978) of data envelopment analysis. For the study purpose, all 50
DCCBs operating in the Uttar Pradesh state of India have been divided into 18 divisions as
per the zonal classification of Uttar Pradesh administration. The estimated result shows that
two-division are relatively most efficient, while three-division are less efficient. By
improving the management of NPA, deposit management, increasing borrowing, loans and
advances, less efficient banks can improve their efficiency.

10. Shilpa R, the article titled as “A STUDY ON THE ROLE OF E-BANKING OF CO-
OPERATIVE AND RRB’S IN ECONOMIC SUSTAINABILITY OF INDIA”, The
Banking industry plays a very important role in economic growth and environmental
protection by promoting environmentally sustainable and socially responsible institutions.
The term green banking is getting popularised day by day. Adopting green banking practises
will help the environment as well as increase operational effectiveness, reduce exposure to
fraud and manual errors, and minimise costs associated with banking operations. Similarly,
there are certain banks which are have already adopted sustainable banking practice and there
are banks which have no idea what and how sustainable banking works. The paper highlights
the role of RBI in order to make banks adopt sustainable, where the cooperative and RRB’s
stand in the adoption of sustainable banking. Also, the paper focuses on green products which
24
has to be brough into practice and several challenges which the bank face to move towards
sustainability.

CHAPTER3-INDUSTRY

AND COMPANY PROFILE

25
3.1INDUSTRY PROFILE:

BANKING SECTOR:

In any economy, the banking industry is an essential component. It offers the financial
infrastructure necessary for people and companies to transact, save, and obtain loans.
Additionally essential to fostering stability and economic prosperity is the financial industry.

As the backbone of the economy, the banking industry provides the capital necessary for
people and companies to do business, save money, and make investments. It facilitates the
easy flow of money by offering services ranging from simple transactions to intricate
financial products through a network of banks and financial institutions. The banking
industry promotes capital accumulation through safe investment opportunities and savings
programmes. This cash is then used to fund profitable loans, which in turn boost economic
expansion. The sector's crucial role in providing credit, which aids people, companies, and
governments in their pursuit of many economic endeavours, is fundamental to this.

In addition, banks help maintain economic stability by assisting in overcoming obstacles and
offering capital during recessions. In order to maintain the integrity of the financial system,
they are governed by extensive frameworks and run under the supervision of regulatory
bodies and central banks. Technological developments have brought in a new age in the
current scenario, where fintech and digital banking technologies improve efficiency and
accessibility. The banking industry, a dynamic force that continues to support growth and
stability while adapting to the shifting demands of society, is still a vital component of
economic prosperity.

Beyond its core duties, the banking industry plays an essential role in the economy that
affects societal well-being, policy formation, and economic dynamics. Through their broad
range of financial services, banks play a pivotal role in facilitating innovative and
26
entrepreneurial endeavours. The banking industry provides the vital cash infusions that small
and medium-sized businesses (SMEs), which are frequently the backbone of economies, need
to create jobs and promote economic diversification. This makes the industry a driver for
socioeconomic advancement and helps lay the groundwork for long-term, steady economic
growth.

Also, during times of financial instability, the importance of the banking industry to
economic stability is highlighted. By serving as middlemen in the financial system, banks are
essential to the dissemination of monetary policies that central banks design. Central banks
work in tandem with commercial banks to preserve price stability and economic balance by
modifying interest rates and affecting credit availability. Overall macroeconomic stability of
a country is greatly enhanced by the banking sector's flexibility and resilience in enacting
these policies.

Banking becomes a force for social empowerment when it comes to financial inclusion.
Banks are using digital platforms more and more to reach areas that were previously
underserved as technology develops. People who were previously shut out of the official
financial system are given more access to banking services thanks to mobile banking, internet
financial services, and creative payment methods. This promotes economic inclusion, lowers
income inequality, and improves financial literacy.

Ensuring the integrity of the banking industry and safeguarding customer interests are critical
functions of the regulatory system that oversees it. Strict regulations are intended to reduce
systemic risks, encourage honest and open business practises, and protect individual
investors' money and deposits. The ability of the banking industry to withstand economic
downturns is frequently cited as proof of the effectiveness of regulatory supervision in
preserving financial stability.

The banking industry is facing new possibilities and difficulties as it develops. For example,
cybersecurity has grown to be of utmost importance, requiring strong defences against
sophisticated attacks to safeguard confidential financial data. Concurrently, the industry
adopts cutting-edge technology like blockchain, data analytics, and artificial intelligence,
which transforms consumer experiences, risk management, and operations.

27
The banking industry's many contributions go much beyond its conventional roles. The
industry continues to be a dynamic force influencing the state of the economy, whether it is
through promoting financial inclusion, advancing technical innovation, or accelerating
economic growth and stability. Its endurance and ongoing significance in the complex
interplay of global economies are highlighted by its ability to strike a balance between
innovation and regulatory conformance.

KEY POINTS OF BANKING SECTOR:

1. DIGITALISATION:

Traditional banking models are being revolutionised by the rise of digitalization in the
financial industry. Banks are using technology to create new financial products, improve
consumer experiences, and streamline operations. Customers may now easily and
conveniently manage their finances with the widespread use of digital wallets, smartphone
apps, and online banking platforms. In addition, the banking industry is changing into a more
customer-focused and agile environment by utilising technology like artificial intelligence
and machine learning for fraud detection, process automation, and personalised financial
advising.

By integrating cutting-edge technologies, digitalization in the banking industry represents a

significant and revolutionary movement that is changing the traditional boundaries of
financial services. This trend entails a thorough redesign of banking structures in order to
satisfy the changing demands of a tech-savvy customer base, rather than just implementing
digital tools.

Banks are using technology strategically to improve internal processes and streamline
operations for more productivity and lower costs. Routine chores, backend operations, and
data administration are now routinely automated, freeing up bank resources for more strategic
endeavours and customer-focused innovations.

28
 2. REGULATION

The banking industry is seeing a general trend towards more regulatory scrutiny, which is
motivated by the desire to safeguard consumers, maintain financial stability, and reduce
systemic risks. To improve compliance, risk management, and transparency, regulatory
agencies are putting strict restrictions into place. Strong data protection and risk management
procedures are mandated by dynamic regulatory frameworks like Basel III, GDPR, and anti-
money laundering (AML) laws, which banks must adjust to. Adherence to these standards
serves to preserve not only the welfare of consumers but also the general steadiness and
soundness of the financial structure.

As regulatory agencies throughout the world step up their efforts to strengthen financial
stability, safeguard customers, and reduce systemic risks, the banking sector is seeing a trend
of increased regulatory scrutiny, which highlights a fundamental change in the industry's
landscape. By highlighting the necessity of a robust and transparent financial system, this
proactive regulatory strategy represents a collective response to the lessons learnt from
previous financial crises.

To improve openness and strengthen risk management procedures in banks, regulatory

agencies are enforcing stricter regulations. Financial institutions' capacity to manage risk,
maintain enough capital, and handle liquidity is intended to be improved by the adoption of
regulatory frameworks like Basel III. These frameworks lay out rules to make sure banks
keep enough capital reserves, which lowers the chance of insolvency and adds to the general
stability of the financial system.

With the General Data Protection Regulation (GDPR) playing a crucial role in protecting
customer information and privacy, data protection has emerged as a primary focus of
regulatory activities. Banks must put strong data protection procedures in place to guarantee
that client data is processed, shared, and stored securely. By doing this, customers are
shielded from potential privacy violations and the financial system is given more credibility.

29
 3. COMPETITION:

New entrants such as fintech firms, digital banks, and internet lenders are posing a greater
threat to the banking industry. With its cutting-edge products like robo-advisors, peer-to-peer
lending, and blockchain-based transactions, fintech companies are upending the conventional
banking industry. The lack of physical branches is allowing digital banks to become more
and more popular due to their user-friendly interfaces and faster procedures. To stay
competitive and maintain customer loyalty in a financial world that is changing quickly,
traditional banks are being forced to innovate, adapt, and improve their digital capabilities
due to the increased competition.

The banking industry is experiencing a spike in competition, which is being led by non-
traditional firms. This disruption is radically changing the financial services industry.
Leading this change are fintech startups, which are using technology to reimagine classic
banking structures. Peer-to-peer lending services allow anyone to lend and borrow money
without going through traditional banks, democratising access to credit. Robo-advisors are
posing a challenge to the conventional wealth management model by offering automated
financial advice. They are driven by algorithms and artificial intelligence.

A key component of fintech innovation, blockchain technology is transforming transactions

by providing safe, open, and decentralised substitutes for conventional banking procedures.
Because they operate on blockchain networks, cryptocurrencies present new value exchange
paradigms that traditional institutions must navigate. These paradigms present both
opportunities and obstacles.

Digital banks are becoming more competitive since they don't have to pay for the
infrastructure that traditional branches do. These organisations prioritise improved digital
experiences, user-friendly interfaces, and streamlined procedures. Consumers are moving
more and more towards digital banks because of its effectiveness, accessibility, and
frequently more affordable cost schedules. Traditional banks are being forced to review their

30
service offerings and make investments in digital capabilities in order to keep up with the
demands of their customers, which are becoming more and more digital-first.

CHALLENGES FACED BY BANKING SECTORS:

1. LOW INTEREST RATE:

Since the conventional business model of banks is built on interest rate spreads, low interest
rates pose a serious challenge to them. Due to the historically low interest rates, lending
activities are less profitable as the difference between interest paid on deposits and interest
generated on loans narrows. The banks are under pressure to discover new sources of income
and reduce expenses in order to stay financially viable, as a result of the constriction of net
interest margins (NIMs). It affects the sector's general economic outlook as well as the
desirability of specific banking goods and services.

2. INCREASING CUSTOMER EXPECTATIONS:

Customer expectations have completely changed as a result of the digital era, and they now
demand more accessible, easy, and personalised banking services. Customers increasingly
want rapid transaction processing, individualised financial advice, and user-friendly web and
mobile interfaces from their banks. It will take significant expenditures in data analytics,
customer relationship management systems, and technology to live up to these expectations.
In order to draw and keep consumers, banks must constantly innovate and strike a balance
between the need for cutting-edge technology and strong cybersecurity safeguards. This is
because consumers are growing more tech-savvy and used to better digital experiences.

3. CYBER- SECURITY THERATS:

Because banks retain so much sensitive financial data, they are a prime target for
cyberattacks. Threats to cybersecurity, such as ransomware attacks, phishing scams, and data
breaches, can seriously jeopardise financial institutions' reputations and undermine consumer
trust. Banks need to make significant investments in a strong cybersecurity infrastructure, use
cutting-edge threat detection tools, and inform both employees and clients about possible

31
hazards. Tight cybersecurity regulations are also enforced by regulatory organisations, and
noncompliance may have serious negative effects on one's finances and image. For the
banking industry, striking a balance between the requirement for digital innovation and the
criticality of protecting consumer data is a constant problem.

It is imperative that the banking sector adopt a proactive and strategic stance as it navigates
these difficulties. In order to lessen the effects of low interest rates and cybersecurity
concerns, this entails creating strong risk management techniques, embracing creative
business models, and utilising technology to improve client experiences. Furthermore, banks
must have flexibility and agility if they are to prosper in a world where client expectations are
changing and technology is advancing quickly.

OPPORTUNITIES FOR BANKING SECTOR:

1. GROWTH IN EMERGING MARKETS:

The possibility for expansion in emerging nations is a strong prospect for banks that aim to
broaden their worldwide reach and leverage the advantages of quickly developing economies.
In addition to broadening the geographic reach, this development entails customising banking
offerings to satisfy the distinct requirements of various clientele inside these developing
countries.

A. DIVERSE BANKING SERVICES:

Basic Financial Products: Savings accounts, remittance services, and reasonably priced
transactional accounts are among the fundamental financial goods that are in greater demand
in emerging nations. These programmes serve the underbanked and unbanked, encouraging
financial inclusion and giving people access to basic banking services.

Increasingly Complex Investment and Credit Offerings: As economic growth quickens, so do

people's and companies' financial requirements. Banks can offer a variety of financial goods,
such as credit facilities, insurance services, and investment alternatives. This serves the
expanding middle class as well as budding business owners looking for ways to build their
companies and create money.

32
 B. STRATEGIC PRESENCE:

Portfolio Diversification: Banks can diversify their holdings by building a strong presence in
emerging regions. Banks can meet the diverse financial demands of the community by
providing a broad range of banking services, thereby establishing themselves as all-inclusive
financial partners in the development of both individuals and enterprises.

Localised Strategies: Gaining a thorough grasp of the customs, laws, and economic climate of
growing markets is essential for a successful expansion. Localised tactics can be employed by
banks to cater to the distinct requirements and inclinations of their target audience, thereby
guaranteeing that their products and services complement the distinctive features of every
area.

2. AGING POPULATION:

Tailored Financial Services: Banks have a chance to create customised financial services and
solutions that address wealth management, retirement planning, and financing for healthcare
due to the ageing population. Understanding the particular requirements of an elderly
population gives banks an opportunity to establish enduring connections and tackle the fiscal
intricacies linked to ageing.

The ageing population gives banks a great chance to go beyond standard offerings and create
customised financial services and products that address the particular requirements and
difficulties experienced by the elderly. Acknowledging and managing the financial intricacies
linked to ageing not only positions banks as reliable financial collaborators but also cultivates
enduring connections with this expanding population.

3. RISE OF FINTECH:

Innovation Partnerships: Traditional banks have two opportunities as a result of the fintech
boom. Banks can gain access to cutting-edge technologies and business models by working
33
with fintech startups. By working together, banks are able to improve their digital services,
optimise their processes, and stay on the cutting edge of technology, all of which help them
stay competitive in the quickly changing financial market.

Traditional banks can take advantage of this trend by strategically partnering with fintech
startups. The rise of fintech is a revolutionary force in the financial system. In the ever-
changing world of financial technology, this partnership-oriented strategy not only helps
banks maintain their competitiveness but also promotes innovation, operational effectiveness,
and an improved client experience.

INDUSTRY OUTLOOK:

The banking industry's future is characterised by a complex environment that includes both
possibilities and difficulties. Even if persistently low interest rates provide issues for
profitability, banks can find new revenue streams by strategically investing in technology,
diversifying their revenue streams, and optimising their processes. A customer-centric
strategy is required due to the rising expectations of customers, which are a result of the
digital age. In order to better understand and address changing consumer needs and promote
increased satisfaction and loyalty, banks can innovate through new product introductions,
improved digital experiences, and data analytics.

The increasing risk associated with cybersecurity necessitates continuous investments in

strong infrastructure and adherence to regulations. To protect sensitive financial data, banks
must maintain vigilance against complex cyber threats, putting in place cutting-edge
detection technologies and encouraging a culture of cybersecurity awareness. On the other
hand, there is a strategic path for growth in emerging markets. Banks can benefit from this by
carrying out in-depth analyses of the market, customising services to meet regional demands,
and promoting financial inclusion, all of which will increase their clientele and promote
economic growth.

Banks can offer specialised financial services, such as wealth management, full retirement
planning, and funding for healthcare, as a result of the ageing population. Seniors can easily
use digital banking systems when technology is used to make accessibility possible.
Traditional banks are able to maintain their competitiveness by promoting innovation through
34
strategic partnerships, thanks to the disruptive rise of fintech. Long-term success requires
constant technological adaptability, agility, and a proactive approach to fintech integration.

3.2COMPANY PROFILE:

THE AGRASEN CO-OPEARTIVE URBAN BANKS

The Agrasen Bank was founded in 1998 and has been steadily expanding its footprint in
Hyderabad, Telangana, India's "City of Pearls." Under the leadership of the energised current
Board of Directors, the Bank has advanced technologically.

Over 10,000 people, representing a wide range of backgrounds, are shareholders of the bank.
These include professionals, independent contractors, salaried individuals, small
industrialists, traders, senior citizens, and well-known city dwellers.

At present, the Bank effectively provides a range of services at all 4 Branches and the Head
Office using Core Banking Solutions (CBS). With its extensive network of branches across
Hyderabad and Secunderabad, the Bank is dedicated to provide the public the much-needed
banking services.

BOARD OF DIRECTORS OF THE AGRASEN CO-OPEARTIVE

URBAN BANK:

CHAIRMAN: Pramod Kumar Kedia

35
The Chairman on the Board of Directors Shri Pramod Kumar Kedia Ji is an eminent
practising Advocate since 1983 and a Former President of City Civil Court Bar Association.
He is actively involved with many Social Organisations and Trusts.

Directors of The Agrasen Co-opeartive Urban Bank:

Vice Chairman: Naveen Kumar Agarwal

Directors:

1. Vijay Kumar Pitti

2. Narsing Das
3. Om Prakash Agarwal
4. Suresh Kumar Agarwal
5. Gopal Chand Agarwal
6. Narayan Gupta
7. Mohan Agarwal
8. Pramod Kumar Agarwal
9. Mahesh Kumar Agarwal
10. Rajesh Kumar Agarwal
11. Anju Kedia
12. Apoorva Agarwal

36
OBJECTIVES OF THE AGRASEN CO-OPEARATIVE URBAN BANK:

The principal object of the Bank will be to promote the interests of all its members to attain
their social and economic betterment through self-help and mutual aid in accordance with the
Co-operative Principles.

The objects of the Bank shall be to engage in any one or more of the forms of business
enumerate in section 6 as amended by section 56 of the Banking Regulation Act, 1949 and in
particular to carry out the following forms of business:

To do banking business on Co-operative principles by accepting for the purpose of lending or

investment of deposit of money from members as well as the public, repayable on demand or
otherwise and withdrawable by cheques, draft, pay order or otherwise.

To raise funds by issue of shares and/or any other securities as permitted by the Regulatory
Authority.

 To do banking business on Co-operative principles by accepting for the purpose

of lending or investment of deposit of money from members as well as the
public, repayable on demand or otherwise and withdrawable by cheques, draft,
pay order or otherwise.
 To raise funds by issue of shares and/or any other securities as permitted by the
Regulatory Authority.
 To encourage thrift, self-help and Co-operation among members.
 To prevent members from failling into permanent indebtedness and to assist
them financially in times of difficulty and to help them to get out of debt.
 To engage in any one or more of the following forms of business namely:
37
 i. Borrowing, raising or taking up of money.

ii. Lending or advancing of money to members either upon or without

security.

iii. Drawing, making, accepting, discounting, buying, selling, collecting and

dealing in bills of exchange, hundies, promissory notes, coupons, drafts,
bills of lading, railway receipts, warrants, certificates, scrips and other
instruments and other securities whether transferable or negotiable or
not.

iv. Granting and issuing of letters of credit, travelers` cheques and circular
notes and to do all forms of foreign exchange business.

v. Buying, selling and dealing in bullion and species on behalf of member

customers.

vi. Acquiring, holding, issuing on commission, underwriting and dealing in

stock, funds, shares, debentures, debenture stock, bonds, obligations,
securities and investments of all kinds.

vii. Purchasing and selling of bonds, scrips of other forms of securities on

behalf of constituents or others, the negotiating of loans and advances.

viii. Receiving of all kinds of bonds, scrips and valuables on deposit or for
safe custody or otherwise.

ix. Providing of safe deposit vaults.

x. Collecting and transmitting of money and securities.

xi. Acquiring and holding and generally dealing with any property or any
right, title or interest in any such property which may form the security

38
 or part of the security for any loans and advances or which may be
connected with any such security.

xii. Carrying on and transacting guarantee and indemnity business, on behalf

of the constituents in the ordinary course of banking business and to
provide necessary cash margin to facilitate such business.

xiii. Opening Branches, Extension Counters and Sub-Officers or any Office

and ATM centers or to have arrangement of ATMs of other Banks etc. as
per the norms of the Reserve Bank of India.

xiv. Subject to the previous approval of the Central Registrar establishing and
supporting or aiding in the establishment and support of associations,
institutions, funds, trusts and conveniences calculated to benefit
members, employees, ex-employees of the bank or the dependents or
connections of such persons granting pensions and allowances and
making payments towards insurance, subscribing to or guaranteeing
monies for charitable benevolent object or for any exhibition or for any
public, general or useful object.

xv. Undertaking and executing trusts, undertaking the administration of

estates as an executor, trustee or otherwise, with the previous permission
of the Central Registrar.

xvi. Acquisition of land/buildings, construction, maintenance and alteration

of any land/building or works necessary or convenient for the purposes
of the Bank.

xvii. Act as Insurance Agent as per norms of RBI and IRDA.

xviii. Promote one or more subsidiary institutions this may be registered under
any law for the time being in force for the furtherance of its stated
objects.

39
 xix. Any other form of business which the Central or the State Governments
may specify as a form of business in which it is lawful for a banking
institution to engage.

xx. Doing all such other things as are incidental and conducive to the
promotion or advancement of the business of the Bank

 To amalgamate with another Bank with same or similar objects.

 To engage in Credit / Debit Cards.
 To do merchant banking business.
 To takeover another society with similar object.
 To develop market information system, logo brand promotion, quality control
and technology upgradation.
 To enter into participation, consortium arrangement with Bank/s or financial
institutions with object of making loans and advances.
 To act as agents for collection of moneys of various government quasi
government and statutory bodies.

COMPANY’S VISION:

 To achieve Scheduled Bank status as soon as possible

 Become the preferred financial service provider for all
 To encourage thrift, self-help and Co-operation among members
 To cross the total business target of 1700 crores by 2025
 To adopt the latest technology for customers delight

COMPANY’S MISSION:
40
  To provide innovative financial solutions
 To achieve excellence in customer service
 To be competitive among the banks by offering smart products
 To adopt best practices in the products offering and rendering customer service
 To make the Bank universally acceptable by adopting latest and smart
technologies

COMPANY’S VALUES:

 We work for the healthy growth of the Bank

 We serve all customers up to their expectations
 We believe in updating the knowledge levels of our human resources
 We are committed first to Customer Safety and Security of banking transactions
 We are committed to ensure the highest levels of ethical standards in banking
operations
 We strictly adhere to the Business Ethics, Corporate Governance and Regulatory
compliances

FINANCIALS OF THE AGRASEN CO-OPERATIVE URBAN BANK:

Annual General Meeting – 17th September, 2023

Annual General Meeting of the Bank was held on 17th September, 2023 and Dividend at
15% for FY 2023 has been declared by the Bank on the occasion.

Agrasen Bank is a leading co-operative Bank in Hyderabad with its operations driven by a
cutting edge Banking IT platform designed specifically for co-operative sector. The Bank
offers personalized banking and financial solutions to its clients in the retail and corporate

41
banking arena through its four branches spread in prominent business areas of Hyderabad and
Secunderabad.

Agrasen Bank, a small Cooperative Bank, which started its journey way back in 1998 with
Rs.0.89 Crores Share Capital and Rs.3.04 Crores Deposits has now became a big tree of
prosperity touching and enlightening the lives of people, reaping rich dividends from its fruits
with Rs.2240.22 Lakhs Share Capital and Rs.56840.71 Lakhs Deposits as on 31/03/2023.

The bank believes in orienting its business in line with the needs of its people, the
environment and the community at large. The Bank is bound by the guiding principles of
honesty, sincerity, confidence and service. It places people before power and treats everyone
on par irrespective of caste, creed or colour.

The bank has achieved great heights due to the trust and confidence reposed in it by the
people and patrons.

Few Highlights are:

Financial Position

31/03/2020 (Rs. 31/03/2021 (Rs. 31/03/2022 (Rs. 31/03/2023 (Rs. Increase /

Particulars in Lakhs) in Lakhs) in Lakhs) in Lakhs) Decrease in %

Share Capital 2247.71 2240.89 2232.25 2240.22 0.36%

42
 31/03/2020 (Rs. 31/03/2021 (Rs. 31/03/2022 (Rs. 31/03/2023 (Rs. Increase /
Particulars in Lakhs) in Lakhs) in Lakhs) in Lakhs) Decrease in %

Deposits 45559.06 52794.32 54741.36 56840.71 3.84%

Advances 32038.37 33866.21 37160.99 38586.05 3.83%

Reserves 2950.05 3467.53 4495.37 5006.48 11.37%

Total Income 5233.12 5700.75 6006.94 5820.01 -3.11%

Net Profit 1207.81 1214.88 1128.40 1007.76 -10.69%

before Income
Tax

Net Profit after 902.95 908.16 840.89 752.94 -10.46%

Income Tax

Total Business 77597.43 86660.53 91902.35 95426.76 3.83%

CRAR 16.54% 17.10% 17.43% 17.91% RBI Stipulation

minimum 12%

CD Ratio 70.32% 64.15% 67.88% 67.88%

CASA % 15.32% 13.92% 15.43% 17.71%

43
STATE BANK OF INDIA:

State Bank of India (SBI) a Fortune 500 company, is an Indian Multinational, Public Sector
Banking and Financial services statutory body headquartered in Mumbai. The rich heritage
and legacy of over 200 years, accredits SBI as the most trusted Bank by Indians through
generations.

SBI, the largest Indian Bank with 1/4th market share, serves over 48 crore customers through
its vast network of over 22,405 branches, 65,627 ATMs/ADWMs, 76,089 BC outlets, with an
undeterred focus on innovation, and customer centricity, which stems from the core values of
the Bank - Service, Transparency, Ethics, Politeness and Sustainability.

The Bank has successfully diversified businesses through its various subsidiaries i.e SBI
General Insurance, SBI Life Insurance, SBI Mutual Fund, SBI Card, etc. It has spread its
presence globally and operates across time zones through 235 offices in 29 foreign countries.

Growing with times, SBI continues to redefine banking in India, as it aims to offer
responsible and sustainable Banking solutions.

44
VISION, MISSION, VALUES:

Vision:

“BE THE BANK OF CHOICE FOR A TRANSFORMING INDIA”

Mission:

“COMMITTED TO PROVIDING SIMPLE, RESPONSIVE AND INNOVATIVE

FINANCIAL SOLUTIONS”

VALUES:

“SERVICE, TRANSPARENCY, ETHICS, POLITENESS, SUSTAINIBILITY”

EVOLUTION OF STATE BANK OF INDIA:

The origin of the State Bank of India goes back to the first decade of the nineteenth century
with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. Three years later
the bank received its charter and was re-designed as the Bank of Bengal (2 January 1809). A
unique institution, it was the first joint-stock bank of British India sponsored by the
Government of Bengal. The Bank of Bombay (15 April 1840) and the Bank of Madras (1
July 1843) followed the Bank of Bengal. These three banks remained at the apex of modern
banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921.

Primarily Anglo-Indian creations, the three presidency banks came into existence either as a
result of the compulsions of imperial finance or by the felt needs of local European
commerce and were not imposed from outside in an arbitrary manner to modernise India's
economy. Their evolution was, however, shaped by ideas culled from similar developments
in Europe and England, and was influenced by changes occurring in the structure of both the
local trading environment and those in the relations of the Indian economy to the economy of
Europe and the global economic framework.
45
ESTABLISHMENT:

The establishment of the Bank of Bengal marked the advent of limited liability, joint-stock
banking in India. So was the associated innovation in banking, viz. the decision to allow the
Bank of Bengal to issue notes, which would be accepted for payment of public revenues
within a restricted geographical area. This right of note issue was very valuable not only for
the Bank of Bengal but also its two siblings, the Banks of Bombay and Madras. It meant an
accretion to the capital of the banks, a capital on which the proprietors did not have to pay
any interest. The concept of deposit banking was also an innovation because the practice of
accepting money for safekeeping (and in some cases, even investment on behalf of the
clients) by the indigenous bankers had not spread as a general habit in most parts of India.
But, for a long time, and especially upto the time that the three presidency banks had a right
of note issue, bank notes and government balances made up the bulk of the investible
resources of the banks.

The three banks were governed by royal charters, which were revised from time to time. Each
charter provided for a share capital, four-fifth of which were privately subscribed and the rest
owned by the provincial government. The members of the board of directors, which managed
the affairs of each bank, were mostly proprietary directors representing the large European
managing agency houses in India. The rest were government nominees, invariably civil
servants, one of whom was elected as the president of the board.

BUSINESS:

The business of the banks was initially confined to discounting of bills of exchange or other
negotiable private securities, keeping cash accounts and receiving deposits and issuing and
circulating cash notes. Loans were restricted to Rs.one lakh and the period of accommodation
confined to three months only. The security for such loans was public securities, commonly
called Company's Paper, bullion, treasure, plate, jewels, or goods 'not of a perishable nature'
and no interest could be charged beyond a rate of twelve per cent. Loans against goods like

46
opium, indigo, salt woollens, cotton, cotton piece goods, mule twist and silk goods were also
granted but such finance by way of cash credits gained momentum only from the third decade
of the nineteenth century. All commodities, including tea, sugar and jute, which began to be
financed later, were either pledged or hypothecated to the bank. Demand promissory notes
were signed by the borrower in favour of the guarantor, which was in turn endorsed to the
bank. Lending against shares of the banks or on the mortgage of houses, land or other real
property was, however, forbidden.

Indians were the principal borrowers against deposit of Company's paper, while the business
of discounts on private as well as salary bills was almost the exclusive monopoly of
individuals Europeans and their partnership firms. But the main function of the three banks,
as far as the government was concerned, was to help the latter raise loans from time to time
and also provide a degree of stability to the prices of government securities.

MAJOR CHANGE IN CONDITIONS:

A major change in the conditions of operation of the Banks of Bengal, Bombay and Madras
occurred after 1860. With the passing of the Paper Currency Act of 1861, the right of note
issue of the presidency banks was abolished and the Government of India assumed from 1
March 1862 the sole power of issuing paper currency within British India. The task of
management and circulation of the new currency notes was conferred on the presidency
banks and the Government undertook to transfer the Treasury balances to the banks at places
where the banks would open branches. None of the three banks had till then any branches
(except the sole attempt and that too a short-lived one by the Bank of Bengal at Mirzapore in
1839) although the charters had given them such authority. But as soon as the three
presidency bands were assured of the free use of government Treasury balances at places
where they would open branches, they embarked on branch expansion at a rapid pace. By
1876, the branches, agencies and sub agencies of the three presidency banks covered most of
the major parts and many of the inland trade centres in India. While the Bank of Bengal had

47
eighteen branches including its head office, seasonal branches and sub agencies, the Banks of
Bombay and Madras had fifteen each.

PRESIDENCY BANKS ACT:

The presidency Banks Act, which came into operation on 1 May 1876, brought the three
presidency banks under a common statute with similar restrictions on business. The
proprietary connection of the Government was, however, terminated, though the banks
continued to hold charge of the public debt offices in the three presidency towns, and the
custody of a part of the government balances. The Act also stipulated the creation of Reserve
Treasuries at Calcutta, Bombay and Madras into which sums above the specified minimum
balances promised to the presidency banks at only their head offices were to be lodged. The
Government could lend to the presidency banks from such Reserve Treasuries but the latter
could look upon them more as a favour than as a right.

BANK OF MADRAS:
The decision of the Government to keep the surplus balances in Reserve Treasuries outside
the normal control of the presidency banks and the connected decision not to guarantee
minimum government balances at new places where branches were to be opened effectively
checked the growth of new branches after 1876. The pace of expansion witnessed in the
previous decade fell sharply although, in the case of the Bank of Madras, it continued on a
modest scale as the profits of that bank were mainly derived from trade dispersed among a
number of port towns and inland centres of the presidency.

India witnessed rapid commercialisation in the last quarter of the nineteenth century as its
railway network expanded to cover all the major regions of the country. New irrigation
networks in Madras, Punjab and Sind accelerated the process of conversion of subsistence
crops into cash crops, a portion of which found its way into the foreign markets. Tea and
coffee plantations transformed large areas of the eastern Terais, the hills of Assam and the
Nilgiris into regions of estate agriculture par excellence. All these resulted in the expansion

48
of India's international trade more than six-fold. The three presidency banks were both
beneficiaries and promoters of this commercialisation process as they became involved in the
financing of practically every trading, manufacturing and mining activity in the sub-
continent. While the Banks of Bengal and Bombay were engaged in the financing of large
modern manufacturing industries, the Bank of Madras went into the financing of large
modern manufacturing industries, the Bank of Madras went into the financing of small-scale
industries in a way which had no parallel elsewhere. But the three banks were rigorously
excluded from any business involving foreign exchange. Not only was such business
considered risky for these banks, which held government deposits, it was also feared that
these banks enjoying government patronage would offer unfair competition to the exchange
banks which had by then arrived in India. This exclusion continued till the creation of the
Reserve Bank of India in 1935.

PRESIDENCY BANKS OF BENGAL:

The presidency Banks of Bengal, Bombay and Madras with their 70 branches were merged in
1921 to form the Imperial Bank of India. The triad had been transformed into a monolith and
a giant among Indian commercial banks had emerged. The new bank took on the triple role of
a commercial bank, a banker's bank and a banker to the government.

But this creation was preceded by years of deliberations on the need for a 'State Bank of
India'. What eventually emerged was a 'half-way house' combining the functions of a
commercial bank and a quasi-central bank.

The establishment of the Reserve Bank of India as the central bank of the country in 1935
ended the quasi-central banking role of the Imperial Bank. The latter ceased to be bankers to
the Government of India and instead became agent of the Reserve Bank for the transaction of
government business at centres at which the central bank was not established. But it
continued to maintain currency chests and small coin depots and operate the remittance
facilities scheme for other banks and the public on terms stipulated by the Reserve Bank. It
also acted as a bankers' bank by holding their surplus cash and granting them advances
against authorised securities. The management of the bank clearing houses also continued

49
with it at many places where the Reserve Bank did not have offices. The bank was also the
biggest tenderer at the Treasury bill auctions conducted by the Reserve Bank on behalf of the
Government.

The establishment of the Reserve Bank simultaneously saw important amendments being
made to the constitution of the Imperial Bank converting it into a purely commercial bank.
The earlier restrictions on its business were removed and the bank was permitted to undertake
foreign exchange business and executor and trustee business for the first time.

IMPERIAL BANK:

The Imperial Bank during the three and a half decades of its existence recorded an impressive
growth in terms of offices, reserves, deposits, investments and advances, the increases in
some cases amounting to more than six-fold. The financial status and security inherited from
its forerunners no doubt provided a firm and durable platform. But the lofty traditions of
banking which the Imperial Bank consistently maintained and the high standard of integrity it
observed in its operations inspired confidence in its depositors that no other bank in India
could perhaps

then equal. All these enabled the Imperial Bank to acquire a pre-eminent position in the
Indian banking industry and also secure a vital place in the country's economic life.

When India attained freedom, the Imperial Bank had a capital base (including reserves) of
Rs.11.85 crores, deposits and advances of Rs.275.14 crores and Rs.72.94 crores respectively
and a network of 172 branches and more than 200 sub offices extending all over the country.

FIRST FIVE YEAR PLAN:

In 1951, when the First Five Year Plan was launched, the development of rural India was
given the highest priority. The commercial banks of the country including the Imperial Bank
of India had till then confined their operations to the urban sector and were not equipped to
respond to the emergent needs of economic regeneration of the rural areas. In order,
therefore, to serve the economy in general and the rural sector in particular, the All India

50
Rural Credit Survey Committee recommended the creation of a state-partnered and state-
sponsored bank by taking over the Imperial Bank of India, and integrating with it, the former
state-owned or state-associate banks. An act was accordingly passed in Parliament in May
1955 and the State Bank of India was constituted on 1 July 1955. More than a quarter of the
resources of the Indian banking system thus passed under the direct control of the State.
Later, the State Bank of India (Subsidiary Banks) Act was passed in 1959, enabling the State
Bank of India to take over eight former State-associated banks as its subsidiaries (later named
Associates).

The State Bank of India was thus born with a new sense of social purpose aided by the 480
offices comprising branches, sub offices and three Local Head Offices inherited from the
Imperial Bank. The concept of banking as mere repositories of the community's savings and
lenders to creditworthy parties was soon to give way to the concept of purposeful banking
subserving the growing and diversified financial needs of planned economic development.
The State Bank of India was destined to act as the pacesetter in this respect and lead the
Indian banking system into the exciting field of national development.

AWARDS AND RECOGNISITION:

 SBI honoured with India’s Best Annual Report Awards-2022 by Free Press Journal.

 SBI honoured with three Gold Awards at ET Human Capital Awards

o HR Leader of the Year - Large Scale Organisations

o Excellence in Business Continuity Planning & Management

o Most Valuable Employer During COVID-19

 SBI won two Awards from NASSCOM -DSCI

51
 o Best Security Operations Centre of the Year

o Cyber Security Awareness

 Gold & Silver awards in The ET HR World Future Skill Awards

 SBI awarded “Issuer of the Year - Private Placement” at the 5th National Summit &
Awards on Corporate Bond Market 2022 by ASSOCHAM

 SBI won Gold category in Public Sector Bank in Outlook Money Awards 2022.

52
DATA ANALYSIS AND INTERPRETATION:

TYPES OF MORTGAGE LOANS PROVIDED BY BANKS:

A mortgage is a kind of loan that is used to buy or keep up a house, land, or other real estate.
The borrower consents to repay the lender gradually, usually by making a number of

53
consistent instalments that are split between principal and interest. Then, the asset is used as
security to get the loan. Different banks provided various types of mortgage loans based upon
their capacity to bare the risk. It also depends upon the size of the bank. It is seen that
nationalised banks have more types in mortgage loans when compared to co-operative banks
as their target audience is comparably larger to that of co-operative banks. The following are
the types of mortgage loans provided by The Agrasen Co-operative Urban Bank and State
Bank of India.

Mortgage loans provided by The Agrasen Co-operative Urban Bank ltd.

1) Long Term Loans

2) Business Loans

1. Long Term Loans:

Long term loan, borrowers receive a fixed amount of money up front in return for certain
lending conditions. Term loans are often intended for small, well-established companies with
solid financial records. The borrower consents to a specific repayment schedule with a fixed
or variable interest rate in exchange for a predetermined quantity of cash. Significant down
payments on term loans may be necessary in order to lower the loan's overall cost and
monthly amounts.

Key Takeaways:
 Term loans provide the borrowers with a sum of upfront money in exchange of
borrowing terms.
 Borrower agrees to pay the lender a fixed amount of money for a certain period.
 The rate of interest charged is either on fixed or floating rate system.
 Term loans are commonly preferred by small business man to purchase fixed assets.

54
 Long term loans at The Agrasen Bank are provided to Individual, Firms, and
Associations. The amount of the loans is decided based upon the value of the asset or
upon the past achievements and future projections of the firms, generally it is upto 70-
75%. The repayment mode for loan term loan is through EMI i.e. Equated Monthly
Instalments. The security that is taken as collateral could be any asset such as land and
building along with 2 guarantors who are capable of repaying the loan amount in case of
default. The rate of interest is charged between 14%-16% based on different factors such
as amount of loan, duration of loan, collateral against the loan etc...
This scheme provides loan / overdraft facility against mortgage of property to meet
financial needs of the people. The scheme is for people engaged in trade, commerce and
business and also Professionals and self-employed proprietary firm, partnership firm,
companies etc and individuals with high net worth including salaried people. The product
provides an opportunity to customers to borrow against mortgage of property to meet the
credit needs of trade, business, marriage, medical, education, repairs, renovation,
extension to residence / commercial property, purchase of property, pilgrimage, tours etc.

Eligibility Individuals, Firms and Associations with GST

Registration
Type of facility Cash Credit/ term loan
Amount of loan 70-75% based on past achievements/
Projections
Repayment EMI
Security Land and building without any encumbrance
Rate of Interest 14.00% to 16.00%
Documentation Hypothecation Agreement, Guarantee Deed
Sanctioning Authority General Manager/CEO/ Board
Margin Minimum 25% of the projected cost

2. Business Loans:

55
Business owners and banks or private lenders enter into lending arrangements for business
loans. Either to finance operations or just to get off the ground and start making money,
businesses require capital. Provided they repay the money with interest on a prearranged
timetable, banks and lenders are prepared to offer them the advance they require.
A lending agreement between a lender and a business in which the lender gives money to the
business, and the business pays it back in an agreed-upon amount of time with an agreed-
upon amount of interest.

Benefits of Business loans:

 Financial Flexibility:
An online business loan offers the necessary working capital to enable flexibility in handling
ongoing costs, taking advantage of opportunities, and adjusting to variations in cash flow.

 Business Expansion:
Loans help companies grow by allowing them to diversify their product offerings, create
additional locations, extend their operations, and enter new markets, all of which boost sales
and market share.

 Technology and Equipment Investments:

Loan proceeds can be used to purchase state-of-the-art machinery and technology, increasing
productivity, competitiveness, and efficiency.

 Tax Benefits:
Because the interest paid on an online business loan is often tax deductible, borrowing
becomes more financially feasible for the company and lowers total tax burden.

 Marketing and Promotions:

A business Loan in India can be used for marketing campaigns, promotions, and advertising, boosting
brand visibility and attracting more customers, thereby increasing sales and revenue.

56
The Agrasen bank believes that based upon the objectives and nature of the business it requires
various kinds of financial solutions. Agrasen bank helps the business to get the right type of loan for
the business. They offer solutions that are specially designed for the financial requirements of the
emerging businesses.
Facilities offered by Agrasen bank under Business loan:
1) Cash credit/ overdraft to meet the working capital requirements.
2) Term loan for purchase of assets.
3) Letter of credit to facilitate trade.
4) Bank guarantees for meeting financial obligations.

Details of Business Loan at The Agrasen Bank

Eligibility Individuals, Firms and Associations with GST

Registration
Type of facility Cash Credit/ term loan
Amount of loan Depends upon business estimates/ 75% of
secured value
Repayment Regular limit/ EMI
Security Land and building without any encumbrance
Rate of Interest 14.00% to 16.00%
Documentation Hypothecation Agreement, Guarantee Deed
Sanctioning Authority General Manager/CEO/ Board
Margin Minimum 25%

Types of Mortgage loans provided by State Bank of India:

State Bank of India offers variety of Mortgage loans to render service to its customer’s
diverse needs. Mortgage loans are specifically meant to finance the purchase of property or
57
land. The mortgage loan service that SBI provides is in home loans. SBI home loans is the
greatest mortgage lender in India, which has helped over 30 lakh families in owing their
dream homes. The reason behind SBI’s success in mortgage loan is that it has build trust
among the customer by providing transparency in its operation. Another reason is it has given
value to its customers by delivering wide range of services.
FEATURES OF HOME LOAN:
 Wide range of products
 Interest calculation on daily reducing balance
 Overdraft facility available
 Low interest rates
 Low processing fees
 No hidden cost
 No pre-payment penalty

As one of the main features of home loans by SBI is that is provides wide range of products,
below are some important products of SBI under home loans.
SBI Products:
 Regular Home Loan
 Balance transfer Home Loan
 NRI Home Loan
 Flexipay Home Loan
 Privilege Home Loan
 Shaurya Home Loan
 Pre- approved Home Loan
 Realty Home Loan
 Home top up Loan
 Regular Home loans:
Regular home loan, this is the most common type, it includes options for purchase of ready
build property, purchase of under construction property, purchased of pre-owned homes,
construction of house, purchase of plot + construction of house.
58
  Balance transfer of Home Loan:
Balance transfers of home loans are made possible by SBI to customers of Scheduled
Commercial Banks (SCBs), Private and Foreign Banks, Housing Finance Companies (HFCs)
registered with the National Housing Bank (NHB), and employers of the borrower if they
work for the Central or State Government or for their undertakings or Public Sector
Undertaking. However, the borrower must meet the requirements for home loan eligibility as
set forth by the Bank and must have made timely payments of interest and/or instalments of
the existing loan according to the original terms of sanction. The borrower must possess
legitimate paperwork attesting to the ownership of the home.

 NRI Home Loan:

SBI NRI Home Loan allows many NRIs (Non-Resident Indians) to get home loans when
investing in properties. Financially, it makes sense to purchase a property through home loan
rather than through personal financing especially when you can invest your personal funds
somewhere else for better returns.

 Flexipay Home Loan:

Exclusively for salaried borrowers, the SBI Flexipay Home Loan offers the possibility of a
larger loan amount. For the moratorium (pre-EMI) period, it gives the consumer the option to
pay simply interest; after that, reduced EMIs are due. In the years that follow, the EMIs will
increase. Young earners can benefit greatly from this SBI home loan option. The SBI
Flexipay home loan has the capacity to draw in a sizable portion of prospective borrowers.

 Privilege Home Loan:

SBI has introduced the SBI Privilege Home Loan, which is only available to public sector
workers. Applying for this house loan is open to everyone who works for the federal
government or a state government, including PSBs, PSUs, and other people with pensionable
service. A number of factors, including the applicant's age, assets and liabilities, anticipated

59
home or flat cost, and income and ability to repay the loan, will be taken into account when
determining the loan amount.

 Shaurya Home Loan:

The SBI Shaurya Home Loan programme provides loans to the country's armed forces and
defence personnel. Only personnel of the defence department will be eligible for this unique
home lending programme. Applications for SBI Shaurya Home Loans from defence
employees exclusively will be eligible for reduced interest rates and other extra perks.
Defence staff will benefit from lower interest rates on their house loans, as well as easier
repayment alternatives and possibly a longer loan repayment.

 Pre-approved Home Loan:

The SBI Pre-approved loan (PAL) provides sanction of Home Loan limits to the customers
before finalization of the property which enables them to negotiate with the Builder/Seller
confidently. The loan eligibility will be assessed based on income details of the applicant.
Non-refundable processing fee as applicable to the Home Loan will be collected at the time
of sanction.

 Realty Home Loan:

SBI Realty provides an opportunity to the customer to purchase a plot for construction of a
dwelling unit. Within three years of the loan's approval and disbursement, the house's
construction should be finished. The client may also be eligible for a second home loan from
SBI Realty to build a house on a plot. With a comfortable 10-year repayment period, the
highest loan amount that may be granted to a consumer is Rs. 15 crores.

 Home top up Loan:

60
Customers can borrow up to a specified amount over the amount of their home loan with
SBI's "SBI Home Top Up Loan". house Top up loans are available to customers who
currently have an SBI house loan and need additional money. It is available for use for any
private objective. In comparison to standard personal loan interest rates, the rates are
significantly lower.

Interpretation:

When it comes to mortgage loan products, SBI has a noticeably greater selection than The
Agrasen Bank with products including NRI house loans, flexipay loans, and exclusive
programmes for public servants and military people, SBI offers solutions to meet a wide
range of demands. However, The Agrasen Bank only provides two loan kinds: business loans
and long-term loans.
By providing long-term loans for people, businesses, and groups, The Agrasen Bank appears
to be concentrating on a more limited, localised target market. Since SBI is a nationalised
bank, it serves a wider range of customers with different requirements and financial
situations. While SBI serves a larger client base and offers a greater selection of specialised
mortgage solutions with possibly more competitive features, The Agrasen Bank just offers
basic long-term loans.

PROCEDURE FOR MORTGAGE LOANS IN BANKS:

61
Procedure in The Agrasen Co-operative Urban Banks:

As The Agrasen banks provides various types of loans to its customer the procedure that is
followed is similar for all kinds of loans.

PROCEDURE:

STEP 1: Purpose of Loan

Firstly, the banks understand the purpose of the customer to take the loan as based upon the
reason of the loan other factors can be determined. So, here the reason for loan are evaluated

STEP 2: Type of Loan:

After evaluating the purpose of the loan, the bank advises the customer which type of loan
would be suitable for them and be beneficial for them

STEP 3: Evaluation of Financial Statements:

After deciding the suitable loan form, the bank collects all the required financial statements
and income statements to determine the financial capability and capacity of the customer.
Financial documents include Balance sheet, Income and Expenditure Account, Income Tax
Returns of past 3 years.

IN CASE OF BUSINESS LOAN

STEP 4: Previous year Business trends:

In case the customer is taking business loan then the bank look into the business trend that the
customer has maintained from past few years whether it is a profitable business or not. They
also consider different financial parameter like Net profit, sales, etc… and compare it with
previous year statements. This step is important as it helps to determine the base for the
amount to be sanctioned and it also helps to analyse the financial position of the customer and
business whether they can repay the loan amount or not

STEP 5: Future Projections of Business:

62
Banks even take in consideration business future projections that is business estimated
profits, projects which gives bank a overall idea of that business future.

IN CASE OF PROPERTY LOAN:

STEP 4: Property offered:

Here the property that is offered as collateral is examined carefully from its legal paper to its
physical existence. As for the bank this property is the security in case of default. So, all the
legal paper are checks and made sure if in future under any circumstances that particular
property can be sold and the loan amount is collected. And current market value of the
property is also calculated

STEP 5: Legal Opinion:

Once the loan departments verify everything the details are send to board of banks for the
approval. The Board then approves the loan based upon the different parameters.

PROCEDURE FOR LOAN IN STATE BANK OF INDIA

SBI home loan process involves several stages:

Pre-Application:

1. Lead Generation
2. Eligibility Check
3. Document Collection

Application Processing:

1. Loan Application Review

2. Creditworthiness Assessment
3. Property Valuation
4. Legal Verification

63
Loan decision and Disbursement:

1. Loan Sanction
2. Loan Agreement
3. Loan Disbursement

Post-Loan Management:

1. Loan Monitoring
2. Delinquency Management
3. Customer Service

 Pre-Application:

1. Lead Generation:

To generate leads and identify potential borrowers, the bank uses a variety of channels,
including marketing efforts, collaborations with developers, and branch referrals.
2. Eligibility Check:
In order to determine the borrower's eligibility for the loan product, bank staff evaluate the
borrower's financial health based on employment history, credit score, and evidence of
income.
3. Document Collection:
The borrower is asked to provide the bank with certain necessary documents for verification,
including evidence of identity, proof of income, proof of address, and documents pertaining
to the property (agreement, receipts, etc.).

 Application Processing:

64
 1. Loan Application Review:
Loan officials carefully review the application and supporting documentation to ensure they
are accurate and comprehensive.
2. Creditworthiness Assessment:
To assess the borrower's ability to repay the loan, the bank looks at their credit history,
including their credit score and previous loan repayment history.
3. Property Valuation:
In order to determine the property's market worth and make sure the loan-to-value (LTV)
ratio specifications are met, the bank assigns a valuer.
4. Legal Verification:
To reduce risk, the bank hires an attorney to confirm the property's legal ownership and
documentation.

 Loan Decision and Disbursement:

1. Loan Sanction:
The bank determines whether to approve the loan and, if so, what the terms and interest rate
will be based on the creditworthiness, property valuation, and legal verification.
2. Loan Agreement:
The bank drafts a loan agreement including the loan amount, interest rate, payback schedule,
terms and conditions, and security information (the mortgage on the property) if the loan is
approved.
3. Loan Disbursement:
When an agreement is signed and all requirements are met, the bank gives the loan money
straight to the seller (if buying a property) or according to the terms specified.

 Post-Loan Management:
1. Loan Monitoring:
The bank keeps an eye on the loan account at all times, checking EMI payments and staying
in touch with the borrower.
2. Delinquency Management:
65
The bank takes a number of steps in the event of late payments or defaults, such as reminding
the borrower, charging late fees, and, if required, restructuring the loan or filing for
bankruptcy.
3. Customer Service:
Throughout the loan repayment period, the bank offers continuous customer care to handle
questions, complaints, and any difficulties pertaining to the borrower.

Interpretation:
For all loan kinds, The Agrasen Bank uses a broad strategy that emphasises the borrower's
financial competence, eligibility, and loan goal. With discrete steps including pre-application,
application processing, loan decision and disbursement, and post-loan administration, SBI
employs a unique procedure designed for home loans. Whereas The Agrasen bank appears to
lack a specific pre-application stage, SBI has one that includes lead generation, eligibility
checks, and document collection. While both banks evaluate applications, determine
creditworthiness, and appraise properties, SBI goes above and beyond by obtaining legal
proof. While both banks take comparable procedures, SBI specifically lists certain acts such
as executing loan agreements and meeting disbursement requirements. Comprehensive post-
loan operations including as loan monitoring, delinquency management, and customer service
are highlighted by SBI and are not specifically specified for The Agrasen bank.

PROCESSING FEE CHARGED BY BANKS:

66
Processing fees refers to charges levied by bank for handling various banking services, those
particularly involving paperwork verification, and admiration task. The main purpose of
charging this fee is to recover the cost incurred by bank like personnel cost, technology,
admirative overhead. Banks are required to disclose the charges clearly and have
transparency. There are different types of processing fees charged by banks, they are:

1. Loan processing fees

2. Account set-up fees
3. Account maintenance fees
4. Transaction processing fees
5. Closure fees

Processing fees charged by the Agrasen Bank:

As The Agrasen Bank is a corporative bank and don’t have a wide range of products in
mortgage loans it has fixed percentage set irrespective of loan provided. The Agrasen Co-
operative Urban Bank charges 1% of loan amount as its processing fees. And this has not
change for the past few years.

Processing fees charged at State Bank of India:

State Bank of India charges processing fees based upon the product that is selected by the
customer. The following are the fees charged by SBI for different types of mortgage loan.

1. Regular home loan:

Processing fees charged for regular home loan is 0.35% of the loan amount plus applicable
GST, minimum Rs.2,000/- plus applicable GST and maximum of Rs. 10,000/- plus
applicable GST

2. Other home loans:

Other home loans products include NRI home loan, Realty home loan, Maxgain, CRE,
Flexipay, Non- salaried, PAL, Trible plus, Apon- ghar loan above 15 lacs. The processing
that is charged for this is 0.35% of the loan amount plus applicable GST, minimum
Rs.2,000/- plus applicable GST and maximum of Rs. 10,000/- plus applicable GST.

67
3. Home Top-Up Loan:

Processing fees charged for Home top-up loan is 0.35% of the loan amount plus
applicable GST, minimum Rs.2,000/- plus applicable GST and maximum of Rs. 10,000/-
plus applicable GST.

PROCESSING FEE- CARD RATES:

Home Related Products Processing fees

Home Loans -Regular
Other Home loan Products - NRI, Realty,
Maxgain, CRE, Flexi-pay, Nonsalaried, PAL,
Trible Plus, Apon GharLoan above 15 lacs
Home Top-Up Loan
Personal Loan against Property (P-LAP)
YONO Insta Home Top-Up Loan (Digital
Product)
SMART Home Top-Up Loan
Insta Home Top-Up Loan
Reverse Mortgage Loan
Earnest Money Deposit (EMD) Scheme
Suraksha Loan
Privilege & Shaurya Home Loans
PMAY
Apon Ghar (HL upto Rs 15 lacs)
0.35% of the loan amount plus applicable
GST, minimum Rs.2,000/- plus applicable GST
and maximum of Rs. 10,000/- plus applicable
GST
0.35% of the loan amount plus applicable
GST, minimum Rs.2,000/- plus applicable GST
and maximum of Rs. 10,000/- plus applicable
GST
0.35% of the loan amount plus applicable
GST, minimum Rs.2,000/- plus applicable GST
and maximum of Rs. 10,000/- plus applicable
GST
1% of loan amount plus applicable Tax,
maximum Rs. 50,000/ plus applicable taxes.
2000+GST
2000+GST
2000+GST
0.50% mini2000, maximum 10000 plus GST
0.50%
NIL
NIL
NIL
NIL

68
 Kerala Govt Employees Home loans scheme NIL
Staff Home Loans/SBI Pensioners Home Loans NIL

Interpretation:

For all mortgage loans, The Agrasen Bank levies a one-time fee equal to 1% of the loan
amount that hasn't changed in a few years.
SBI levies various processing costs according to the particular loan package that the client
selects:
0.35% of the loan amount (minimum Rs. 2,000, maximum Rs. 10,000) plus GST is the
payment for standard home loans.
Additional house financing options: similar to conventional house financing.
Home top-up loans are identical to standard home loans.
For non-mortgage loan products such as personal loans against property (P-LAP), SBI levies
extra costs.
Transparency: By explicitly disclosing their charge structures, both banks appear to be
upfront about their processing fees.

BANKS ACTION IN CASE OF DEFAULT:

69
In case, if the customer skips more than 3 EMI instalments or is unbale to repay the loan
amount to the bank so, the bank has to take legal action against the customer to recover the
loan amount. Every bank has overall similar procedure but have slight variations in them.

Procedure in The Agrasen Co-operative Urban Banks

Mortgage loans reduces the risk of non-payments for banks as if such case arises banks can
sell the collateral security and recover the amount. For that every bank has to follow certain
procedure, the following is the procedure followed by The Agrasen bank

Procedure:

STEP 1: Notice:

A notice is sent to the customer if the cheque deposited by the customer bounces for more
than 3 times.

STEP 2: Outstanding Balance:

After notice is issued, the customer is asked to draw a cheque of outstanding amount (due
amount) if that cheque is also bounced then the bank considers to take legal action against it

STEP 3: Court Case:

Court case is the last option for bank, here a case is filed against the customer and then after
all the legal proceedings the property is auctioned

STEP 4: Auction:

The collateral asset for the loan is then auctioned to interested party the bank makes sure that
the price of asset covers the loan amount.

Procedure in State Bank of India:

70
In case of default on SBI home loan the banks follow a specific procedure to recover the
outstanding amount. The steps are break down into 3 categories, they are

 Early stage
 Later stage
 Final stage

1. Early Stage:
 Reminder and Notice:

In the event that customer fail to make an EMI or payment, SBI will contact the customer by
letters, phone calls, emails, or SMS. The overdue amount will be highlighted in these
reminders, and the customer will be urged to make frequent payments to prevent future
penalties.

 Penal Charges:

Penal interest may be assessed on the past-due amount in accordance with SBI's terms and
conditions, which would increase the total debt load. This acts as a deterrent to payments that
arrive late.

2. Later Stage:
 Negotiation and Restructuring:

SBI may make an effort to get in touch and find out why there was a delay if the default
continues. They might provide choices to reorganise the loan, such adjusting the EMI amount
or lengthening the repayment duration. This strategy seeks to resolve the issue amicably and
assist you in starting to make your repayments on time.

71
  Legal Action: If the default continues, and no solution is reached through negotiation,
SBI may resort to legal action. This could involve:
 Demand Notice:

A formal notice demanding immediate payment of the outstanding dues, outlining the
potential consequences of non-compliance.

 Recovery Suit:

Filing a suit against you in court to recover the dues, including principal, interest, penalties,
and legal expenses. This legal action aims to enforce the loan agreement and recover the
owed amount through a court order.

3. Final Stage:
 Sale of Property:

As a last resort, SBI may start the process of regaining ownership of the mortgaged property
and holding an auction to sell it in order to raise the remaining balance. The bank will only
pursue this option if all other options have failed, as it is the most serious consequence of
default.
Interpretation:
The procedure used by The Agrasen Bank is simple and consists of three steps: notice,
outstanding balance check, and legal action (court case and auction).
SBI takes a more sophisticated three-phase method.
When a cheque bounces, The Agrasen Bank takes a more severe stance, taking the borrower
to court, which could lower their credit rating and cause further anxiety.
By providing early intervention techniques like reminders, talks, and restructuring choices
before turning to legal action, SBI exhibits greater flexibility. This might provide debtors a
chance to make things right and preserve their property.

FINDINGS:
72
The findings of the study are how mortgage loan departments functions in Co-operative and
Nationalized banks, and then these banks are compared on bases of different factors. The
study also includes various parameter that impact the decision of banks whether to approve
and sanction the loan. These banks differ in various factors from its establishment.

State Bank of India was initially Imperial Bank of India later it became State Bank of India
on 1st July 1995 when RBI took over its operations. It is a statutory body with its headquarters
in Mumbai, Maharashtra. Where as The Agrasen Co-operative Urban Bank was established
on 30th August 1998. It has its operations spread in Hyderabad district of Telangana. One of
the main similarities between both the banks is that their motive to serve the customer
keeping their interest in mind, but the target audience of SBI is much larger than that of The
Agrasen Bank. SBI being a nationalized bank renders services and various financial products
for entire nation, on the other hand The Agrasen Bank is a co-operative bank which provides
its services to particular community limiting it target audience.

The vision of The Agrasen Bank is to be an active participant of the financial growth that the
nation will be witnessing in next decade and to be ready for the revolutionary technological
upgradation and digital transformation. Mission of State Bank of India is to be the bank of
choice for transforming India. As SBI has already established a significant position in the
customer mind and in the banking industry its vision is now to become customer 1st choice
for any banking and other financial services but in case of Agrasen bank it is still at a
growing phase so its vision is to become one of the leading banks in banking industry.

Moving towards the mission of banks, The Agrasen bank focuses achieving customer
satisfaction and to implement various practices to achieve them. SBI’s mission is to provide
simple, responsive and innovative financial solutions. The missions are arrived or set based
upon their vision. One of the main reasons of such huge difference in banks is because of the
size of the banks. The Agrasen Bank has 4 branches and an overall 51-200 employees in total
whereas SBI has 16,333 and approx. 2,40,198 employees (as per 31st December 2022). This
makes a huge difference as it affects the market share acquisition and growth in services.

73
This study has considered some factors to analyse and interpret the difference between the
mortgage loans of banks, they are the types of Mortgage loan products or services provided
by bank, the procedure that the bank follows before approving the loan, processing fees
charged by banks, action taken by bank in case of loan default.

When it comes to rage of products in mortgage loans SBI has noticeably wider options than
The Agrasen Bank which includes products like regular loan, NRI loan, realty loan, flexipay
loans, its has even sperate products public servants as well as military people. As the target
market of is huge so to keep up with different types of customers and their unique demands
SBI has come up with varied financial solutions. Where as The Agrasen Bank provides
mainly two types of mortgage loan i.e. term loan and business loan. In SBI business loan is
taken as a different type of loan and does not include in mortgage loan. Basically, The
Agrasen Bank focuses on providing basic long-term loans, SBI offers wide range of products
with more competitive features which helps in creating a customer base.

Different banks have different procedure when comes to approval of loan as it is a crucial
decision for the banks because it involves risk of potential default that might become problem
for bank in future. As SBI provides wide range of services and different services requires
different documents so to avoid confusion it has a detailed and structured procedure for each
type. The Agrasen Banks has simple procedure and does not involve any complexities. The
procedure is similar for both the types of mortgage loans and only some of its steps varies.
The reason is The Agrasen Bank is established with a motive to be co-operative to its
customers so it tries to make the loan process hustle free. This feature attracts the customer to
prefer co-operative banks over nationalised banks. Not just the loan procedure but the charges
that bank charge for rendering their services play an important role for customer to decide
which bank is to be approached and with what product. In case, of Mortgage loans the
charges are termed as Processing fees banks based upon their expenditure decides the fees
and this processing fees is considered as income sources to meet the working capital
requirements of the banks, SBI has different charges for different products, like for products
like regular home loan, NRI loan, realty loan, flexipay etc… have same % of processing fees
that is 0.35% of loan amount +GST charges. In The Agrasen Bank the % charged as
processing fees is fixed irrespective of what kind of loan product the customer choses the %
74
charged is 1% of loan amount. Both the banks ensured that the transparency is maintained
regarding the charges and no hidden fees are charged later on. Banks have to be ready for any
misfortunate situations where in the customer is not in a position to repay the loan or misses
the EMI instalments. If such case arises the banks have to take strict action against the
defaulter so that it sets an example for other customer regarding the consequences that the
customer might have to face in case, he defaults the payment.

The Agrasen Bank being a small size bank it cannot bear large number of defaulter as it
impacts the efficiency and financial position of the bank, so they have to apply a strict
approach to recover the loan amount and to reduce the chances of default in future. The banks
issues notice to customer or the borrower when they miss their EMI payment date or if the
cheque deposited by the customer bounces resulting in non-payment of instalments if the
cheques bounce for more than three times consecutively then the bank takes legal action and
files a court case and if the customer is declared bankrupt or is not in a position to repay the
loan then the security which is kept as collateral is auction to interested parties. SBI on the
other hand demonstrates greater flexibility by sending reminders, renegotiation and
restructuring the terms of loans and tries to rectify the situation rather than taking harsh
decision which might affect the credit score and credit worthiness of the customer.

75
CONCLUSION:

SBI may be a better alternative for borrowers looking for more features and a larger selection
of loan options with the support of a national bank. Particularly for lesser loan amounts, those
who value cheaper processing fees and maybe quicker turnaround times may find ACUB to
be attractive. Both banks seem to be transparent about their loan terms, costs, and default
procedures, which is important. It is essential to comprehend the borrower's unique
requirements and situation while choosing a mortgage provider. To explore potential
solutions and prevent default situations, it is imperative to maintain open communication
with the bank, particularly if experiencing difficulty with repayments.

While State Bank of India and The Agrasen Co-operative Urban Bank share the goal of
supplying mortgage loan services to their clients, they do it in distinct ways with regard to
products offered, payment schedules, processing times, and default handling. While SBI
offers a wide choice of goods and a more structured approach to processing and client
management, Agrasen Bank prioritises simplicity and localised services. Depending on the
bank they choose to work with, the results indicate that clients have access to a wide range of
options and services catered to their unique requirements and preferences.

The Agrasen Co-operative Urban Bank and State Bank of India's mortgage loan options and
processing methods differ in terms of scope, complexity, and customer-centricity, as the
comparison makes clear. Although, Agrasen Bank concentrates on a small number of
mortgage loan products and uses a simple processing method, SBI's wide array of products,
organised processes, and proactive default management demonstrate its ability to serve a
wide range of customers with different financial demands. Both banks' processes demonstrate
the need of transparent processing fees and unambiguous actions in the event of a default,
which are critical components of customer pleasure and trust.

76
SUGESSTIONS:

For The Agrasen Co-operative Urban Bank Ltd

 Expand Product Portfolio:

To better serve a more varied clientele, think about providing a greater selection of mortgage
loan options. Look at consumer demands and market trends to find possible financing
solutions.

 Reviewing Processing Fees:

Assess the existing structure of processing fees and think about providing competitive rates
or tiered pricing according to loan amount.

 Implement Early Intervention Strategy:

Before taking legal action in the event of a default, think about putting early intervention
methods like reminders, tailored communications, and possible loan restructuring options into
place. This could strengthen ties with clients and lessen the possibility that defaults will
necessitate going to court.

For State Bank of India:

 Clearly communicate processing fee structure:

Even though SBI already makes its processing costs available to the public, think about
streamlining the data even more and making it more easily accessible to consumers.

 Improve transparency in legal action process:

Although the information supplied describes the various phases of SBI's legal action
procedure, it would be beneficial to include more information regarding the precise
repercussions of non-compliance at each level. This could make it easier for borrowers to
comprehend the possible consequences of loan default.

77
LIMITATIONS:

The study is subjected to following limitations:

 The study focuses only on mortgage loans provided by banks which limited the scope
of comparison
 The study is relied on publicly available information it may not include details and
complexities faced by the bank
 It does not involve any interaction with customer or loan officer
 The study concentrates only on current state of banks and do not account for any
future changes in loan offering

78
BIBLIOGRAPHY

Websites:

 https://en.wikipedia.org/wiki/Mortgage\
 https://bank.sbi/
 https://homeloans.sbi/
 https://agrasenbank.in/
 https://agrasenbank.in/mortgage_loan.php
 https://agrasenbank.in/business_loan.php
 https://scholar.google.com/

Newspaper:
 The Wall Street Journal
 Financial Express
 The Economic Times
 Business Standards

79
80