SUNDAR D K

COLLGE CERTIFICATE
VIJAYA FIRST GRADE COLLEGE VIJAYAPURA
Date:
This is to certify that MR.SUNDAR D K bearing
Register No.U19RV21C0032 is a student of VI SEM B.COM of our

College.
She has prepared Internship report entitled “A Study on Effective

Techniques Adopted in Loan Recovery Management To primary
cooperative agricultural land and rural development bank,
SIDLAGATTA” from 23/03/2024 to 13/04/2024 towards the
partial fulfilment of the requirement of Bachelors of Commerce
Degree of
Bengaluru North University.
Principal
[Seal & Signature]

STUDENT DECLARATION
I MS SUNDAR D K bearing Registered No. U19RV21C0032 hereby declare
that this report entitled “A Study on Effective Techniques Adopted in
Loan Recovery Management” during the summer vacation between

the period from 23-03-2024 to 13/04/2024 at on primary co-operative
agricultural land and rural development bank, SIDLAGATTA” under the
supervision and guidance of NANDINI G, Associate professor of
Commerce, Vijaya First Grade college vijayapura
Date:Signature
Place: SUNDAR D K
Reg No: U19RV21C0032

ACKNOWLEDGEMENT
The successful completion of this internship report required significant

guidance and assistance from many individuals, and I am truly grateful for
their support throughout this journey.
Firstly, I would like to express my sincere appreciation to Sri/Mr. C N

KRISHNAN, primary cooperative agricultural and rural development bank
SIDALAGATA, Branch for providing me with the opportunity to intern at their
esteemed organization.
I am also deeply grateful to our faculty coordinator, Mrs. NANDINI G, and

our principal, Dr. FAYAZ PASHA, for their unwavering support and for
granting me the valuable opportunity to intern, which has been
instrumental in my learning and exposure to the field of accountancy and
finance.
I would like to extend my heartful thanks to my parents for their

permission and constant encouragement throughout this internship.
Additionally, I am thankful to my friends for their support whenever I
needed their assistance during this project.
Lastly, I would like to express my profound gratitude to all individuals who

directly or indirectly contributed to the completion of this report.
Table of Contents
SL NO CHAPTERS PAGE NO
1 Introduction 1-17
2 Description of the Organization 18-25
3 Experiential Learning 26-39
4 Internship Outcomes and Conclusion 40-42
5 Bibliography 43
6 Annexures 44-45
A STYDY ON EFFECTIVE TECHNIQUES ADOPTED IN LOAN RECOVERY MANAGEMENT AT PCA & RD
SIDLAGHATTA
C H AP T E R - 1
INTRODUCTION
INTRODUCTION OF FINANCE
Finance is one of the major elements, which activates the overall growth of
economy. Finance is the lifeblood of economic activities. The study of business
finance is concerned with the provision, flow and use of finance within a business
organization and with demand for and supply of funds for business within the
economy as a whole.
This would enable the country to have supply of funds to the industry and
agriculture continuously. Economics problems of the nation can be solved
comfortably through which self-sufficiency can be attained. Thus the financial
system plays a significant role in the building up the economy. Every enterprise,
whether big, medium or small needs finance to carry on its operations to achieve its
targets. Hence, finance is so indispensable today that it is rightly said it is life blood
of an enterprise. Without adequate finance, no enterprise can possibly accomplish
its objectives. The function of finance has been traditionally classified into two
type's namely Private finance and Public finance.
Private finance is concerned with the requirements, receipts and

disbursement of funds in case of an individual, a profit seeking business
organization and a non- profit organization.
A STYDY ON EFFECTIVE TECHNIQUES ADOPTED IN LOAN RECOVERY MANAGEMENT AT
PCA & RD, SIDLAGHATTTA
THE MAIN FEATURES OF FINANCE
1. Investment Opportunities
In Finance, Investment can be explained as a utilization of money for profit

or returns. Investment can be done by:
1. Creating physical assets with the money (such as development of land, acquiring
commercial assets, etc.)
2. Carrying on business activities ( like manufacturing, trading, etc)

3. Acquiring financial securities (such as shares, bonds, units of mutual funds, etc).
Investment opportunities are commitments of monetary resources at different

times with an expectation of economic returns in the future.
2. Profitable Opportunities
In Finance, Profitable opportunities are considered as an important aspiration goal
Profitable opportunities signify that the firm must utilize its available resources
Most efficiently under the conditions of cut-throat competitive markets
Profitable opportunities shall be a vision. It shall not result in short-term profits at

the expense of long-term gains.
For example, business carried on with non-compliance of law, unethical ways
of acquiring the business, etc., usually may result in huge short-term profits but
may also hinder the smooth possibility of long-term gains and survival of
business in the future.
3. Optimal Mix of Funds
Finance is concerned with the best optimal mix of funds in order to obtain
the desired and determined results respectively.
Primarily, funds are of two types namely,

1. Owned funds (Promoter Contribution, Equity shares, etc.)
2. Borrowed funds (Bank Loan, Bank overdraft, Debentures, etc.)

The composition of funds should be such that it shall not result in loss of profits
to the Entrepreneurs (Promoters) and must recover the cost of business units
effectively and efficiently.
4. System of Internal Controls

Finance is concerned with internal controls maintained in the organization or
workplace. Internal controls are set of rules and regulations framed at the
inception stage of the organization and they are altered as per the requirement
of its business.
However, these rules and regulations are monitored at various intervals to accomplish
the same which have been consistently followed.
5. Future Decision Making
Finance is concerned with the future decision of the organization. A “Good

Finance”is an indicator of growth and good returns. This is possible only with
the good analytical decision of the organization. However, the decision shall be
framed by giving more emphasis on the present and future perspective
(economic conditions) respectively.
LOAN PRODUCTS:
1.Continuous Loan:
a. Secured Over Draft Against Financial Obligation[SOD(FO)]
b. Secured Over Draft Against Work Order[SOD(G)]
c. Cash Credit(Hypothecation)
d. Cash Credit(Pledge)
e. Export Cash Credit(ECC)
2. Demand Loan:
a. Loan General
b. Demand loan against ship breaking
c. Payment against documents(pad)
d. Loan against import merchandise(LIM)
e. Loan against trust receipt(LTR)
f. Forced loan
g. Packing credit
3. Term loan
a. Project loan
b. Transport loan
c. House building loan
d. Small business loan
e. Consumer finance loan
f. Lease finance
g. Personal loan
LOAN PRODUCTS:
4. Continuous Loan:
a. Secured Over Draft Against Financial Obligation[SOD(FO)]
b. Secured Over Draft Against Work Order[SOD(G)]

c. Cash Credit(Hypothecation)
d. Cash Credit(Pledge)
e. Export Cash Credit(ECC)
CREDIT ANALYSIS: What makes a good loan?
Credit analysis is the analysis of financial statement of business/customers for the

purpose of lending. Credit analysis are conducted to determine whether the customer
is creditworthy and whether the customer has sufficient cash flow and back up assets
to repay the loan. The main purpose of credit analysis is to ascertain whether the loan
can be serviced by the customer and whether the bank is well protected to realize the
loan in the event of default by the borrower to repay the loan.
The quality of credit analysis in our country is very poor. Many of the
credit officers even do not know how to analyze credit proposal or what is its
importance in credit making process.
MAJOR ISSUES ANALYZED IN CREDIT ANALYSIS:
Is the borrower credit worthy?
Whether purpose of the loan is consistent with bank's credit policies and
government regulations
Whether the customer or his business has the ability to generate enough cash
to repay the loan
Whether sufficient security has been offered, so that in the event of default
bank's fund can be recovered
Whether bank claims on the security can be established without risk or
with low risk.
Fixing of amount of loan, loan terms and conditions, documentations,

etc meet the needs of the borrower and to protect the interest of the
bank.
BUSINESS POSITION:
1. Cash Flow:
•Three source to repay loan:
i. Cash flow generated form sales or income ii.

The sale or liquidation of assets iii. Funds
raised by issuing debt or equity securities.
• Cash flow= Net profit ( revenue less expenses) Non-cash expenses

(Depreciation)
Cash flow= Net profit + Non-cash expenses + addition to account payable-
addition to inventories and accounts receivable.
• History of earning and sales: Whether there is history of steady growth in
earning or sales and whether there is high probability that such growth
will continue.
2. Condition:
• Analyze recent trends in the borrower's business and industry and

whether changing economic condition might affect business or
loan.
3. Control:
• Whether there are chances of change in government policy or law

which adversely affect borrower's business.
LOAN RECOVERY PROCEDURES:

It is the duty of the PCA & RD to recover the landed fund within the
stipulated time and if the borrower fails to repay the money within the staid
period MF will declare him as a defaulter and recover the fund by selling the
securities given by the borrower or by freezing his account or make a suit
against him.
STRATEGIES FOR RECOVERY

Recovery of loan can be made in the following 3 methods.
1) Persuasive
2) Voluntarily
1) Persuasive recovery:
If the borrower didn't paid the due amount of loan in time then the first
step of bank is private communication with him. It creates a mental
pressure on borrower to repay the loan amount. In this case mf can
provide some advice to the borrower for repaying the loan.
2) Voluntarily recovery:
In this method, some steps are followed for recovering loan. Those are
• Building taskforce
• Arranging seminar
• Loan rescheduling policy
• Waiver of interstate
3) Legal recovery:
When all steps fails to keep an account regular and the borrower does
not pay the installments and interests then bank take necessary legal steps
against the borrower for realization of its dues. In this case
“artharinadalatain-2003” plays an important role for collecting the loan.
Recovery procedure of PCA & RD is the ultimate combination of time,

effort of money. It follows four procedural steps to recover the lending
amount, which is joint effort of bank, society and legal institutions, which are
shown below
RECOVERY MANAGEMENT
INTRODUCTION:
Recovery is defined as the process of

regaining and saving something lost or in danger of becoming
costs.
Recovery is a key to the stability of the banking sector there should be

no hesitation in stating that Indian banks have done a remarkable job in
containment of Non-Performing Assets (NPA) considering the overall
difficult environment.
Recovery management is also linked to the bank's interest margin's we

must recognize that cost and recovery management supported by enabling
legal framework hold the key to future health and competitiveness of the
Indian banks. The existing procedure for recovery of debts due to banks has
blocked a significant portion of their funds in unproductive assets, the value

of which deteriorates with the passage of time.
Recovery management is of fresh loans or an old loan is central to
NPA Management. This Management process needs to start at the loan
initiating stage.
RECOVERY MANAGEMENT IN PCA & RD
Recovery of loans and advance is an integral part of credit

management in PCA & RD. In the normal circumstances it should be the
endeavor of an institutions to increases its loan portfolio, taking into account
the resources available opportunities for lending and other relevant factor
like desired risk return profile.
The emphasis should be on building a healthy credit portfolio in turn
with the corporate objectives and this should have enough cushions to
absorb loan losses.
THE VARIOUS LEGAL PROCEEDINGS FOR RECOVERY OF DEBTS ARE
1. Legal notice
2. Suit
3. Summons to defendant
4. Written statement from the defendant
5. Notice to admit facts
6. Summons witness
7. Hearing and disposable
8. Judgment debtor
FACTORS OF RECOVERY OF LOAN
The banking sector has been facing the serious problems of loan
recovery.
Internal Factors
1. Poor Credit Appraisal System
Poor credit appraisal is another factor for recovery of loan. Due

to
poor credit appraisal the bank gives advance to those who are able to
repay it back.
Inappropriate Technology
Due to appropriate technology and management information

system market driven decision on real time cannot be taken.
2. Credit Rating Service
The ICICI, the UTI and number of commercial bank financial institutions
have promoted the Credit Rating Information Services of India Ltd
[CRISIL] the principle is to provide a quality of rating in respect of
prospective of corporate borrower.
The financial institutions and bank likely to use [CRISIL] rating as
one of prime inputs in making their credit decisions.
3. Credit Policy
The firm's objective with respect to receivables management are

not merely to collection receivable quickly but attention should also be
gives to benefit cost trade off involved in the various areas of account
receivables management the first decision area is credit policy.
The credit policy of a firm provides a framework to determine
a) Whether or not to extend credit to a customer.
b) How much credit to be extend.
The credit policy decision of a firm has two broad dimensions
a) Credit Standards
b) Credit Analysis
A firm has to establish and to use standards in making credit

decisions, develop appropriate source of credit information and method of
credit analysis.
CREDIT STANDARDS
The term credit standard represents the basic criteria for the
extension of credit to customers.
The quantitative basis of establishing credit standards are factors

such as credit rating credit reference average payments period and credit
financial ratios. To illustrate the tradeoff between benefit and cost has
divided overall standards into.
a) Tight or restrictive
b) Liberal or non-restrictive
The Tradeoff with reference to standards covers
1. The collection cost
2. The average collection cost
3. Level of sales
4. Level of bad debts
These factors should be considered while deciding whether to relax

credit standards or not if standards are relaxed. It means mere credit will be
extended while if standard is tighter less credit will be extended.
I.THE COLLECTION COST
The implication of the four factors are explained below
a) More credit
b) A large credit department to service accounts receivables and

related matters
c) Increases in allocation cost
d) A higher incidence of bad debts loss
e) A large investment in receivable
Tightened credit standards have the opposite effects
a) Deposit sales
b) Reduce the incidence of bad loss
c) Investment in receivable will be decrease
d) Lower the collection cost

II. AVERAGE COLLECTION PERIOD/ CREDITPERIOD
The credit period refers to the length of time customers are allowed to
pay for their purchase firm does not extend any credit. The credit period
would be zero if allow 30 days of credit with discount to induce any early
payment its terms are stated as not 30. Lengthening of the credit period
sales up by inducing existing customers to purchase more and attracting
additional customers and if this is lower will result in large investment in
debtors and higher incidence of bad debts loss. Short having of the credit
period would have opposite effort; it tends to lows sales decrease
investment in debtors and incidence of bad debts loss.
III. LEVEL OFSALES
Changing credit standard can also expected to change the volume of

sales as standards are relaxed. Sales are expected to improve
continuously a tightening is to cause a decline sale.
IV. LEVEL OF BADDEBTS
Another factor which is expected to be affected by charge in credit

standards in bad debts expenses they can be expected to increase with
relaxation in credit standards and decreases if the credit standards
become more restrictive.
CREDIT ANALYSIS
Beside establishing credit standards, a firm should proceed for evaluating

credit applicants the second aspect of credit policies of a firm it credits
analysis and investigation.
Two basic aspects are involved in the credit investigation process.
a) Obtaining credit information.
b) Analysis of credit information.

It is the basis of credit analysis that decision to grant credit to a customer
as well as the quantum of credit would be taken.
A. OBTAINING CREDIT INFORMATION
The first step in credit analysis obtaining credit information on which

to base year the evaluation of a customer the source of information, broadly
they are
i. Financial Statement
One external source of credit information it, the published financial

statement that the balance sheet and profit and loss account.
The financial statement contains very useful information. They are
very helpful in assessing the useful positions of a firm, which
significantly it's credit standard.
ii. Trade Reference
These reference to the allocation of information from with which the

applicant has dealing and who as the basis of their experience would
reach for the applicant.
B. ANALYSIS OF CREDIT INFORMATION
One the credit information has been collected from different sources,
it should be analyzed to determine the credit worthiness of the applicant
these are not established procedure to analysis the information the firm
should devise its own procedure to suit needs the analysis should cover two
aspects.
C. QUANTITATIVE ASPECTS
The assessment of quantitative aspect it based on the factual

information available from the financial statement, the past records of the
firm the first step involved in this type of assessment is to prepare an again
schedule of account payable another step in analyzing the credit information
is through a ratio analysis of the liquidity profitability and dealt capacity of
the applicant. More over trend analysis over a period of time would reveal the
financial strength of time would reveal the financial strength of the customer.
D. QUALITATIVE ASPECTS
The qualitative assessment should be supplemented by a qualitative

subjective interpretation of this credit standing.
External Factors
1. Ineffective Recovery Tribunal

The government has set of numerous recovery tribunals which
work for recovery of loans and advances. Due to their negligence and
ineffectiveness in their work the bank suffers the consequence of non-
recovery there by reducing their profitability and liquidity.
2. Willful Default
There are borrowers who are able to pay back loans are
intentionally withdrawing it. This group of people should be identified
and proper measure should take in order to get back the money
extended the money extended to them as advance and loans.
3. Natural Calamities
This is measure factor which is creating alarming rise in NPAs.
Every now and then India hit by major natural calamities thus making
the borrowers unable to pay back there loans.
Thus the bank has large amount of provision in order to compensate
those loans, hence end up the fiscal with a reduce profit.
4. Industrial Sickness
a. Improper project than ding
b. Ineffective management
c. Lack of adequate resources
d. Lack of advance technology
e. Day to day changing government
CREDIT TERMS
The second decision area in account receivable management in the

credit terms after the credit standard have been established and credit
worthiness of the terms and conditions on which trade is to be made
available the stipulation under which the goods are sold an credit are referred
to as credit terms. These related to the payment of the amount under the
credit sales. Credit sales are these components.
1) Credit period
In terms of the duration of credit extended to the customer the

amount must be repaid promptly before the due date.
2) Cash discount
If any which the customer can take advantage of that is the overall
amount that will be reduced by this amount.
3) Cash discount period
This refers to the period advanced during which the discounted can
be availed.
BAD DEBTS LOSS
Bad debts losses arises when the firm is unable to collect its account
receivables, the size of bad debts losses depends on the quality of account
accepted by the firm. The firm tends to sell to customers with reality less
credit standing when its losses its credit policy, some of the customers delay
payment and some of them do not pay to all. As a result bad debts losses
increases the firm can certainly avoid as minimize bad debts losses if that
does not sell an credit and then the firm is not availing the opportunity of
using as a marketing tool for expanding sales and will lose income
opportunity.
ELEMENTS OF DEBT RECOVERY
1) Specific tasks to be accomplished.
Example: The amount to be recovered from the specified loan accounts

in default and the broad time frame.
2) Debt Recovery Policy and Procedure of the PCA & RD.
3) Code of conduct in recovery process may include dress code,

verbal and written Communication rules to be followed by the
individuals employed by the agency for the purpose of collection.
4) Duties of the agent.
5) Rights of the agent, including the commissions/fees payable by the

principal to the agent/agency for the recovery of debt/other services.
TOOLS FOR RECOVERY
1. Debt Recovery Tribunals (DRT)
The recovery of debts due to banks and financial institutions passed

in March 2000 has helped strengthening the function of DRTs. Provision for
placement of more than one recovery officer, power to attach defendant's
property/assets before judgment penal provision for disobedience of
tribunal's order or for breach of any terms of order and appointment of
receiver with power of realization management protection and presentation
of property are expected to provide necessary teeth to the DRT and speed up
the recovery of NPA in the times to come.
2. SARFAESI Act,2002
The full form of SARFAESI Act is Securitization and Reconstruction of Financial Assets
and Enforcement of Security Interest Act, 2002. Banks utilize this act as an effective
tool for bad loans (NPA) recovery. It is possible where non-performing assets are
backed by securities charged to the Bank by way of hypothecation or mortgage or
assignment. SARFAESI is effective only for secured loans where
bank can enforce the underlying security e.g.

hypothecation, pledgeand mortgages.
3. Asset Recovery Construction Industry Limited(ARCIL)
The word asset reconstruction company is a typical used in India.

Globally the equivalent phrase used is "Asset Management Companies". The
word "asset reconstruction" in India was used in Narasimham
CHAPTER -2
DESCRIPTION OF THE ORGANIZATION
PRIMARY CO-OPERATIVE AGRICULTURAL AND RURAL DEVELOPMENT

BANK AT SIDLAGHATTA
Primary Co-Operative Agriculture and Rural Development Bank Ltd. Otherwise called as
PCARD. The bank is situated at Sidlagatta taluk, Sidlagatta, Chickkballapur district. The
bank started in the year 20 March 1945 under the registration 1584 comes under the Co-
Operative society by Mysore state. The bank works for overall development of, Sidlagatta
taluk and all villages surrounding the Sidlagatta taluk. The bank is controlled by Karnataka
state Co-Operative bank ltd which is situated at Tippu Sultan Place Road, Chamarajapete,
Bengaluru-560018.The banks provide various types of loans for people in and around
Sidlagatta and surrounding villages. The bank elects the president, vice president by a
team of directors, shareholders for a financial year or more. All transactions are carried
out by the guides of the chief manager and final decision will be taken by the president
and directors in their monthly meeting. It is currently head by the President Sri K.M. Bee
mesh and Vice President Sri M.P Ravi; it mainly concentrates on improving the agricultural
and rural development.
GENERAL BODY
BOARD OF DIRECTOR
PRESIDENT
VICE PRESIDENT
ORGANISATION CHARt
OFFICE ADMINISTRATION CHART
MANAGER
ACCOUNTANT
FIELD OFFICER
ASSISTANTS
D GROUP WORKERS
BOARD OF MEMBERS
SL NO NAME POSITION
1 SRI. K.M. BEAMISH PRESIDENT
2 SRI. M.P. RAVI PRESIDENT
3 SRI. ASHWATHNARAYAN REDDY DIRECTOR
4 SRI. MUNIYAPPA DIRECTOR
5 SMT. R.B. JAYADEV DIRECTOR
6 SRI. C. ASHWATHNARAYANA DIRECTOR
7 SRI. C.M GOPAL DIRECTOR
8 SRI. H. SHANKAR DIRECTOR
9 SRI. L.N. SHIVAREDDY DIRECTOR
10 SRI.SIDDAPPA DIRECTOR
11 SMT. RAMADEVI M. N DIRECTOR
12 SMT. BHAGYAMMADIRECTO DIRECTOR

FUNCTIONS OF THE BANK
Bank functions with the guidance of the president, vice president, directors, committee
members and also shareholders and experienced staff. There are about 5792 members
(shareholder) and about 224new membership out of which 670 SC/ST candidate. Bank
maintain a separate for each type of loans, fixed deposit, income and expenditure, register,
own property and pledge properties, loan registration.
THE BANK PROVIDES LOANS FOR MORTGAGING OF LAND
➢It also provides loans for agriculture purpose.
➢It provides loans for the purchase of cows and cattle, pigs.
➢It provides loans for the purchases of tractors.
➢Provides loans for mulberry plantation.
➢To provide cheap and liberal credit facilities to small and marginal farmers, agriculture
labourers, artisans, small entrepreneurs and other weaker sections ➢To save the rural
poor from the moneylenders.
➢To develop underdeveloped regions and thereby strive to remove economic disparity
between regions.
➢Loans are provided for rose plantation.
➢Bank covers health insurance also.
➢Provides loans at less rate of interest.
➢Farmers will get subsidy form government and NABARD also.
➢Providing loans for improvement of villages.
➢E stamping (E-Stamping is a computer-based application and a secured electronic way

of stamping documents. It’s an electronic way of paying stamp duty to the Government)
provided for the members of the banks
MISSION OF THE BANK

It develops economic status to the farmers by providing valuable credit services and
guidelines to the farmers. The aim is to provide long term credit facilities to farmers
according to the requirements.
DEVELOPMENT PURPOSE OF THE BANK

Banks always try to develop their business, by providing various types of loans such as
personal loans for members Agri loan, vehicle loans land development, sericulture loan,
poultry loan mango plant loan rose plantation, grapes plantation, coconut plantation,
tractor loan and non-agriculture loan such as digging of bore well and well. It focuses on
the development of the land.
PRODUCT PROFILE
Bank try to attract the customers with the low rate of interest are available for all types of
loans and attract the shareholders and fixed depositors with high rate of interest
compared to other cooperative banks. It provides loan term loans for the cattle. A pair of
Rs 72000. And the loan has to be repaid monthly. For a period of five years Poultry loans
are provided for a period of five years. And the payment is made quarterly. Sheep and goat
for a period of five years and the payment to be made half yearly.
TRACTOR LOANS
Bank will provide 90% of the total cost of a tractor through companies’ quotation and 10%
of the cost should borne by the purchaser and period of the loan is for eight years and the
payment should be made half yearly.
SERICULTURE LOAN
Loan provided for a period of eight years and repayment is done half yearly.
ROSE PLANTATION
Loan for a period of five years repayment should be made quarterly.

AWARDS
The bank was awarded 2ndp lace for the recovery of the loan in the year 2017-18 in
Chickkballapur district.
VISION OF THE BANK

Bank always provides new scheme to attract as many shareholders with higher rate of
interest and various other schemes with guaranteed returns and improve the lifestyle of
the individuals in
Sidlagatta and surrounding villages and bank has started pig me collection scheme.
BACKGROUND OF THE BANK
Bank runs on its own building and has its own furniture. Bank runs on its own shares and
fixed deposits and grants from the government and non-government interest against
loans.
COMPETITORS OF PCARD BANK
Regional Rural Bank
Regional Rural Banks were established under the provisions of an Ordinance passed on
September 1975 and the RRB Act 1976 to provide sufficient banking and credit facility for
agriculture and other rural sectors. These were set up on the recommendations of The
Narasimhan Working Group during the tenure of Indira Gandhi's government with a view
to include rural areas into economic mainstream since that time about 70% of the Indian
Population was of Rural Orientation. Also, on 2 October 1976 five regional rural banks were
set up with a total authorized capital of Rs. 100 crores ($10 Million) which later augmented
to 500 crores ($50 Million). The Regional Rural Bank were owned by the Central
Government, the State Government and the Sponsor Bank (There were five commercial
banks, PMB, SBI, UNITED BANK and UNITED COMMERICAL BANK, which sponsored the
regional rural banks) who held shares in the ratios as follows Central Government-60%,
State Government-20% and Sponsor Banks-20%. Earlier, RBI had laid down ceilings on the
rate of interest to be charged by these RRBs.
TO NAME A FEW REGIONAL RURAL BANKS:
➢ Allahabad UP Garmin bank
➢ Karnataka Vikas Garmin bank
➢ JK Garmin bank ➢ Telangana Garmin bank ➢ Kaveri Garmin Bank.
SWOT ANALYSIS OF THE BANK
STRENGTHS
Strengths of the bank are quick service to the customer. Co-operative bank provides the
quick service such as accepting deposits from the public, withdrawal facility, loan
sanctions, cheque discounting and all services. Loans are providing within reasonable
time, after obtaining all the documents and necessary certificate it submitted to the board.
Board takes the quick decision when compared to the nationalized banks because there
is a lengthy process for sanctioning of loans.
WEAKNESS
The main weaknesses of the bank such as
LACK OF STAFF;
The number of saving bank a/c, current a/c, fixed deposit a/c, other loan accounts has
increased to the greatest extent over the year but management has not appointed
additional staff to look after increased work.
DEPENDENCY OF SERVICE PROVIDERS;
The banking cooperative is unable to generate resource internally. We recommend

encouraging active participation in running their own businesses and promote in the
sharing of capital of the cooperative to strengthen their owned funds increasing their
borrowing power.
OPPORTUNITIES
There is an opportunity of the bank to attract the customer by providing high interest rates
in their fixed deposits. In hotspot area small scale industry situated. It is the great
opportunity for the bank to provide the loans and advances to these industries.
THREATS
The greatest threats from nationalized banks because they

provide the loans and advances at lower rate of interest's usually co-
operative bank charge high interest rates for loans and advances. So, nationalized banks
grasp the customers from the cooperative banks. RD bank
functions in relations to their respective regional office loans are channelled through PCA&
RD bank which a network of branches and sub offices credit for farmers another rural folk.
DIFFERENT SCHEME AND FACILITIES OF PCARD BANK
The PCARD Bank is having totally eleven different schemes:
➢ Minor irrigation scheme
➢ Open well scheme
➢ Land development scheme
➢ Silk house
➢ Cattle bearing scheme
➢ Fishery
➢ Fertilizers
➢ Agricultural vehicles
➢ Rural housing scheme
➢ Personal scheme
➢ Agriculture scheme
IMPORTANT DOCUMENTS REQUIRED TO AVAIL LOANS FROM PCARD BANK

➢ One-year Panni (Land Document)
➢ Clearance Certificate
➢ 4 Photos
➢ Family Tree
➢ Land Mark
➢ Bank Clearance Certificate
➢ Mutation Certificate
➢ Voter I D
➢ Ration Card
FACILITIES FOR FARMERS IN PCARD BANK
The PCARD Bank loan was taken under by IFFCOTOKIA General Insurance to protect the
farmers from uncertainties. They give insurance on Tractors and Cows and sheep rearing.
There is a scheme which protects the health of the farmers, and also provides medical
free services through yashiswini card holders.
DEPARTMENT IN PCARD BANK
Human resource management
Recruitment process-all the recruitment process is conducted by common cared committee

Bangalore.
Salary and pay scale
Training and Workshops
Training is provided by the co-operative society.
Once in month district level workshops are conducted.
TYPES OF BOOKS USED
• Cash Book
• Daily petty Cash entry book
• Financial statement
AUDITING
At the financial year end (31STMarch) of every year. Auditing is conducted which shows
the performance of the bank.
CHAPTER- 03
EXPERIENTIAL LEARNING
The purpose of the data analysis and interpretation phase is to

transform the data collected into credible evidence about the development
of the intervention and its performance.
This process usually includes the following steps;
• Organizing the data for analysis (Data
Preparation)
• Describing the data

• Interpreting the data
Where quantitative data have been collected, statistical analysis can;
1) Help measure the degree of change that has been place
2) Allow an assessment to be made about the consistency of the data
Where qualitative data have been collected, interpretation is more difficult.
Here it is important to group similar responses into categories and

identify common patterns that can help derive meaning from what may
seem unrelated and diffuse responses.
This is particularly important when trying to assess the outcomes of focus
groups and interviews.
After collecting all the filled questionnaire the data from the consumers the
collected data was transferred to a work sheet the data relating to set
objectives was then classified and the findings recovered after which the
data was graphically represented.
TABLE-5.1
THE TABLE SHOWING AGE CLASSIFICATION OF THE RESPONDENTS
Age No. of
Percentag e
group Respondents
Below 20 0 0
20-30 26 52
30-40 10 20
Above 40 14 28
Total 50 100
ANALYSIS:
From the above table out of 50 respondents, there is no respondent falls

under below 20 years, 52% under 20-30 years, 20% respondents under 3040 years
and 28% respondents under above 40 years.
CHART-5.1
THE CHART SHOWING THE AGE CLASSIFICATION OF THE

R E SPO ND E N T S
No of re spondants
Belo w 2 0
0%
A b o ve 4 0
28%
2 0 -3 0
52%
3 0 -4 0
20%
( S o u r c e : p r i m a r y d a ta )
INTERPRETATION:
The above chart reveals that 52 percent of the respondents fall in the age group
of 20 to 30 years, 20 percent of the respondents fall under the age group of 30
to 40 years and 28 percent of the respondents comes under the age group of 40
years and above. Hence it is clear that majority of the respondents are in the
age group of 20 to 30 years.
TABLE-5.2 THE TABLE SHOWING MARITAL STATUS OF THE RESPONDENTS
Percentage
No. of
Marital status
Respondents
Married 33 66
Unmarried 17 34
Total 50 100
ANALYSIS:
The above table shows that out 50 respondents 66% are married and
remaining 34% are unmarried.
CHART-5.2 THE CHART SHOWING MARITAL STATUS OF THE RESPONDENTS
MARIT IAL S TATUS
120
100
80
60
40
20
0
Married unmarried Total
Respondants 33 17 50
Percentage 66 34 100
INTERPRETATION
The above chart represents about the marital status of the respondents.
Out of 50 respondents 66 percent of the respondents are married and remaining
34 percent of the respondents are unmarried.
TABLE-5.3
THE TABLE SHOWING QUALIFICATION
Qualificatio No. of the

Percentag e
N Respondents
Illiterates 05 10
SSLC 19 38
Graduate 24 32
Others 02 04
Total 50 100
ANALYSIS
The above table shows that out of 50 respondents 14 percent of the

respondents are illiterates and 38 percent of the respondents are qualified
SSLC and 32 percent of the respondents are qualified graduates and

remaining 4 percent of the respondents are having other qualification.
CHART-5.3
THE CHART SHOWING QUALIFICATION
QUALIFICATION
120
100
80
60
40
20
0
ILLITERATES SSLC GRADUATES OTHERS
TOTAL
ILLITERATES SSLC GRADUATES OTHERS TOTAL

No of respondants 5 19 24 2 50
Percentage 10 38 32 4 100
INTERPRETATION
From the above chart it is clear that out of 50 respondents 14 percent

of the respondents are illiterates and 38 percent of the respondents are
qualified SSLC and 32 percent of the respondents are qualified graduates
and remaining 4 percent of the respondents are others. Hence it is clear that
majority of the respondents are literates and illiterates are very few.
TABLE-5.4
THE TABLE SHOWING MONTHLY INCOME
Monthly No. of Percentag

income respondents e
Below 10,000 33 66
10,000 to 05 10
20,000
20,000 to 06 12
30,000
30,000 to 04 08
40,000
40,000 & above 02 04
Total 50 100
ANALYSIS:
The above table is showing an income group of the respondents. Out of 50

respondents 66% of the respondents are below 10,000 income per month, 10%
of the respondents are 10,000 to 20,000, 12% of the respondents are 20,000 to
30,000, 08 percent of respondents are 30,000 to 40,000 and 04 percent of
respondents are in the income of 40,000 and above.
(Source: primary data)
INTERPRETATION:
The above table is showing an income group of the respondents. Out of 50

respondents 66 percent of the respondents are below 10,000 income per
month and 10 percent of the respondents are 10,000 to 20,000 and 12 percent
of the respondents are 20,000 to 30,000, 08 percent of respondents are 30,000
to 40,000 and 04 percent of respondents are in the income of 40,000 and
above. So it clearly states that the most of respondent’s earnings are
belowRs.10, 000
THE TABLE SHOWING THE ANY CHARGES ADOPTING FOR RECOVERY
No. of
Statements
respondents Percentag e
Feel any Agri loan charges

10 20
and fees
25 50
Modern equipment charges
15
No any extra charges 30
Total 50 100
ANALYSIS:
From the above table out of 50 respondent’s majority of the respondents says
that in PCA & RD BANK modem equipment charges will be applied.
CHART-5.5 THE CHART SHOWING WHETHER ANY CHARGES ADOPTING FOR

RECOVERY
(Source: primary data)
INTERPRETATION:
The above chart reveals that majority of the respondents says that in
PCA & RD BANK modern equipment charges will be applied.
TABLE-5.6
THE TABLE SHOWING THE MEASURES THAT WILL HELP TO REDUCE

THE INCIDENCE OF LOAN DEFAULT
Responses No. of
Percentag e
Respondents
Demand Notice 12 24
Taking legal 24 48
action
Realizing the 14 28
Security (Agri
etc.)
Total 50 100
ANALYSIS:
The above table states that, out of 50 respondents, 12 respondents

prefer for demand notice to their customers, 12 respondents for taking
legal action and 14 respondents prefer for realizing the Agri.
CHART-5.6
THE CHART SHOWING THE MEASURES THAT WILL HELP TO REDUCE

THE INCIDENCE OF LOAN DEFAULT
No of Respondants
28 % 24 %
Demand notice
Taking legal action
48 % Realizing the security
INTERPRETATION:
The above chart represents those measures will help to reduce the
incidence of loan default Majority of the respondents prefer for taking legal
action for defaults.
CHAPTER — 4
Internship Outcomes and Conclusion
During my internship period I had worked mainly in Recovery

Technique Section as well as in PCA & RD BANK, Sidalghatta Branch.
Throughout these two months the major findings of the study are:
1. 52% of respondents are under the age group of 20-30years.
2. 94% of the respondents are from male category.
3. 66% of the respondents are married.
4. 90% of the respondents are qualified.
5. 66% of the respondents have monthly income less thanRs.10000
6. 38% of the respondent's perceptions towards maintaining of error free

records.
7. 36% of the respondent's perception towards customer services in PCA & RD

is highly flexible.
8. Small range of Agri loan offered by PCA & RD BANK, Sidalghatta Branch
is another problem in diversifying its Agri loan risk.
9. In most of the cases Agri loan disbursement is centrally controlled from
the Head Office, sometimes which creates problem in PCA & RD BANK.
10. The credit proposal evaluation process is lengthy. Therefore sometimes
valuable clients are lost.
11. Monitoring of Agri loan is not sufficient.
12. Branches of PCA & RD BANK are not sufficient to compare with other
financial institutions.
13. Innovation of new financial products is a rare case in PCA & RD BANK
rather they hardly upgrade their offerings on the basis on some changes
in interest rate and maturity.
14. The website does not contain information about Agri loan and other sections.
SUGGESTIONS: PCA & RD BANK
On the basis of the findings the following recommendations are made for
the PCA & RD BANK, Sidalghatta Branch.
1. At first PCA & RD BANK should find out the way to reduce its unrecovered
Agri loan amount further to improve its Agri loan quality.
2. PCA & RD BANK should increase their Agri loan to compete in the market.
3. The Agri loan policy and Agri loan sanction procedure should be made
flexible and easy.
4. PCA & RD BANK can give attention to the foreign exchange and
remittance services to maximize profit.
5. PCA & RD BANK should give more attention to advertisement and
promotion of products, which is helpful to collect more deposits and
increase investments scope. PCA & RD BANK could use various media
for advertisement like TV, News Paper, Internet and Billboard.
6. Strict supervision must be adopted in case of high-risk borrowers. Time
to time visit to the projects should be done by the PCA & RD BANK
officers.
7. The website of the PCA & RD BANK should be more informative that
customers get the all information about the different activities and
facilities of the PCA & RD BANK.
CONCLUSION:
PCA & RD BANK always contributes towards the economic

development of a country. Compared with other, PCA & RD BANK is also
playing leading role in socio-economic development of the country. The PCA
& RD BANK is currently doing average. By analyzing its performance it is
observed that a potential growth might be accelerated through effective
implications of some policy. Being PCA & RD BANK, it has an advantage
compared to newly established PCA & RD BANK in the form of wide range of
activities. However policy implication needs to be as fast as possible to grab
the early mover advantage.
The PCA & RD BANK through years has been able to spread operation in
mass PCA & RD BANK rather than concentrating in niches. It can hedge poor
performance of one sector by some other sector for its wide range of
offering. Capital market operation has become a great potential for the PCA
& RD BANK to increase its profitability. PCA & RD BANK brokerage house is
concentrating to establish new work stations in order to facilitate investor of
remote places.
The PCA & RD BANK is able to create a multi component Agri loan portfolio.
However non performing Agri loan are a real challenge to the sound credit
management. Default is increasing for lack of monitoring. The PCA & RD
BANK is trying to increase its Agri loan quality by accelerating its recovery
policy. The PCA & RD BANK can concentrate on the Agri loan sector where
default risk is low and its investments are profitable. The Agri loan procedure
has been made more calculative, logical to keep the credit sound.
BIBLIOGRAPHY
BOOKS AND JOURNALS
BOOKS AUTHOR NAME
Financial management- N.SUDARSHANAREDDY
Research methodology- Dr.K.RAMACHANDRA
JOURNALS AND MAGAZINES
Company journals
Company prospects
Indian agriculture magazine

Government publications in news
paper
WEBSITES
www.deal4loans.com.
http://www.indiastat.com
http://en.wikipedia.com
http://data.gov.in
1ANNEXURES
QUESTIONNAIRES
Respected Sir / Madam,
I am SUNDAR D K Studying 6th semester B. Com in Royal degree College,
Chintamani undertaking a project titled “A Study on Effective Techniques

Adopted for Loan Recovery Management at PCA & RD BANK Sidalghatta.” I will
be grateful if you could spare your precious time in answering the following
questionnaires. Your answer will be kept confidential and will be used only for
my project purpose.
THANK YOU
SUNDAR D K
1. Name 2.
Address
l) Age
a. Below 20
b. 20 --30
c. 30--40
d. above 40
2) Gender a.
Male
b. Female
3) Educationa
qualificatio
4) a. Illiterate
b. SSLC
c. Graduate
d. Others
5) Which
income
group do
you
belong?
[Monthly]
a. Below l0,000
b. 10,000 to 20,000
c. 20,000 to30,000
d. 30,000 to 40,000
e. 40,000 and above
Opinion about maintenance of records?

a. Keep promises
b. Maintain error free records
c. Reliable for documents submitted
How customer service in PCA & RD BANK recovery?

a. Willing to help customers
b. Informed customers about service
c. Satisfaction with the Agri loan.
8) How PCA & RD BANK transactions related to recovery?

a. Safe transactions
b. Ability of relationship officer
c. No safe records
9) Are you satisfaction recovery of Agri loan interest?

a. Satisfaction with Agri loan interest
b. Highly satisfied with Agri loan interest
c. Not satisfied with Agri loan interest
10) Are you any charges adapting for recovery?

a. Feel any Agri loan charges and fees
b. Modern equipment’s charges
c. No any extra charges
11) Facing any risk while getting Agri loan?

a. High
b. Normal
c. Low
12) Duration for getting Agri loan?

a. below 5min
b. 5 to 10 min
c. 10 to 20min
d. 20 to 30 min
13) Did you charge any charging fees?
a. Yes
b. No
VIJAYA FIRST GRADE COLLEGE VIJAYAPURA

SUNDAR D K

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COLLGE CERTIFICATE

VIJAYA FIRST GRADE COLLEGE VIJAYAPURA

This is to certify that MR.SUNDAR D K bearing

Register No.U19RV21C0032 is a student of VI SEM B.COM of our

She has prepared Internship report entitled “A Study on Effective

Bengaluru North University.

[Seal & Signature]

I MS SUNDAR D K bearing Registered No. U19RV21C0032 hereby declare

that this report entitled “A Study on Effective Techniques Adopted in

Loan Recovery Management” during the summer vacation between

Reg No: U19RV21C0032

The successful completion of this internship report required significant

Firstly, I would like to express my sincere appreciation to Sri/Mr. C N

I am also deeply grateful to our faculty coordinator, Mrs. NANDINI G, and

I would like to extend my heartful thanks to my parents for their

Lastly, I would like to express my profound gratitude to all individuals who

2 Description of the Organization 18-25

3 Experiential Learning 26-39

4 Internship Outcomes and Conclusion 40-42

Private finance is concerned with the requirements, receipts and

THE MAIN FEATURES OF FINANCE

In Finance, Investment can be explained as a utilization of money for profit

2. Carrying on business activities ( like manufacturing, trading, etc)

Investment opportunities are commitments of monetary resources at different

In Finance, Profitable opportunities are considered as an important aspiration goal

Most efficiently under the conditions of cut-throat competitive markets

Profitable opportunities shall be a vision. It shall not result in short-term profits at

3. Optimal Mix of Funds

Primarily, funds are of two types namely,

2. Borrowed funds (Bank Loan, Bank overdraft, Debentures, etc.)

4. System of Internal Controls

5. Future Decision Making

Finance is concerned with the future decision of the organization. A “Good

a. Secured Over Draft Against Financial Obligation[SOD(FO)]

b. Secured Over Draft Against Work Order[SOD(G)]

b. Demand loan against ship breaking

c. Payment against documents(pad)

d. Loan against import merchandise(LIM)

e. Loan against trust receipt(LTR)

c. House building loan

d. Small business loan

e. Consumer finance loan

a. Secured Over Draft Against Financial Obligation[SOD(FO)]

b. Secured Over Draft Against Work Order[SOD(G)]

e. Export Cash Credit(ECC)

CREDIT ANALYSIS: What makes a good loan?

Credit analysis is the analysis of financial statement of business/customers for the

MAJOR ISSUES ANALYZED IN CREDIT ANALYSIS:

Is the borrower credit worthy?

Fixing of amount of loan, loan terms and conditions, documentations,

•Three source to repay loan:

i. Cash flow generated form sales or income ii.

• Cash flow= Net profit ( revenue less expenses) Non-cash expenses

• Analyze recent trends in the borrower's business and industry and

• Whether there are chances of change in government policy or law

LOAN RECOVERY PROCEDURES:

STRATEGIES FOR RECOVERY

• Loan rescheduling policy

Recovery procedure of PCA & RD is the ultimate combination of time,

Recovery is defined as the process of

Recovery is a key to the stability of the banking sector there should be

Recovery management is also linked to the bank's interest margin's we

blocked a significant portion of their funds in unproductive assets, the value

RECOVERY MANAGEMENT IN PCA & RD