A Comparative Study Of Loans And Advances Of Federal Bank (1).docx

“A COMPARATIVE STUDY OF LOANS AND ADVANCES OF FEDERAL BANK AND STATE BANK OF INDIA WITH RESPECT TO GOLD LOAN ”

A PROJECT SUBMITTED TO UNIVERSITY OF MUMBAI FOR PARTIAL COMPLETION OF THE DEGREE OF BACHELOR OF COMMERCE (ACCOUNTING AND FINANCE) UNDER THE FACULTY OF COMMERCE

BY BIJOY. B.MAMAN

UNDER THE GUIDANCE OF DR. FARHAT FATMA SHAIKH MAHATMA EDUCATION SOCIETY`S PILLAI COLLEGE OF ARTS, COMMERCE AND SCIENCE DR.K.M.VASUDEVAN PILLAI CAMPUS SECTOR-16, NEW PANVEL – 410206 FEBRUARY, 2019

DECLARATION

I THE UNDERSIGNED MR. BIJOY.B.MAMAN HERE BY, DECLARE THAT THE WORK EMBODIED IN THIS PROJECT WORK TITLED “A COMPARATIVE STUDY OF LOANS AND ADVANCES WITH RESPECT TO GOLD LOAN”, FORMS MY OWN CONTRIBUTION TO THE RESEARCH WORK CARRIED OUT UNDER THE GUIDANCE OF DR.FARHAT FATMA SHAIKH IS RESULT OF MY OWN RESEARCH WORK AND HAS NOT BEEN PREVIOUSLY SUBMITTED TO ANY OTHER DEGREE/DIPLOMA TO THIS OR ANY OTHER UNIVERSITY. WHEREVER REFERENCE HAS BEEN MADE TO PREVIOUS WORKS OF OTHER, IT HAS BEEN CLEARLY INDICATED AS SUCH AND INCLUDED IN THE BIBLIOGRAPHY. I, HERE BY FURTHER DECLARE THAT ALL INFORMATION OF THIS DOCUMENT HAS BEEN OBTAINED AND PRESENTED IN ACCORDANCE WITH ACADEMIC RULES AND ETHICAL CONDUCT.

BIJOY.B.MAMAN

CERTIFIED BY

DR.FARHAT FATMA SHAIKH ( GUIDING TEACHER)

ACKNOWLEDGEMENT

TO LIST ALL HAVE HELPED ME IS DIFFICULT BECAUSE THEY ARE SO NUMEROUS AND THE DEPTH IS SO ENORMOUS. I WOULD LIKE TO ACKNOWLEDGE THE FOLLOWIN AS BEING IDEALISTIC CHANNELS AND FRESH DIMENSIONS IN THE COMPLETION OF THIS PROJECT. I TAKE THIS OPPORTUNITY TO THANK THE UNIVERSITY OF MUMBAI FOR GIVING ME CHANCE TO DO THIS PROJECT. I WOULD LIKE TO THANK MY PRINCIPAL, DR GAJANAN WADER FOR PROVIDING THE NECESSARY FACILITIES REQUIRED FOR COMPLETION OF THIS PROJECT. I TAKE THIS OPPRTUNITY TO THANK OUR COORDINATOR, PROFESSOR SUNITA SAINI FOR HER MORAL SUPPORT AND GUIDANCE. I WOULD ALSO LIKE TO EXPRESS MY SINCERE GRATITUDE TOWARDS MY PROJECT GUIDE DR. FARHAT SHAIKH WHOSE GUIDANCE AND CARE MADE THE PROJECT SUCCESSFUL. I WOULD LIKE TO THANK MY COLLEGE LIBRARY, FOR HAVING PROVIDED VARIOUS REFERENCE BOOKS AND MAGAZINES RELATED TO MY PROJECT. LASTLY, I WOULD LIKE TO THANK EACH AND EVERY PERSON WHO DIRECTLY OR INDIRECTLY HELPED ME IN THE COMPLETION OF THE PROJECT ESPECIALLY MY PARENTS AND PEERS WHO SUPPORTED ME THROUGHOUT MY PROJECT.

INDEX

CHAPTERS

TITLE

CHAPTER 1

INTRODUCTION 1.1 INTRODUCTION OF BANK 1.2 DEFINITION OF BANK 1.3 FEATURES OF BANK 1.4 CLASSIFICATION OF BANK 1.5 LOANS AND ADAVANCES 1.6 DIFFERENT TYPES OF LOANS AND ADAVACES 1.7 ADVANTAGES AND DISADVANTAGES OF LOANS AND ADVANCES

CHAPTER 2

RESEARCH METHODOLOGY 2.1 OBJECTIVE OF STUDY 2.2 HYPOTHESIS OF THE STUDY 2.3 LIMITATIONS OF THE STUDY 2.4 SIGNIFICANCE OF THE STUDY 2.5 SCOPE OF THE STUDY 2.6 SAMPLE SIZE 2.7 DATA COLLECTION 2.8 TECHNIQUE AND TOOLS

CHAPTER 3

CONCEPTUAL FRAMEWORK 3.1 FEDERAL BANK LIMITED 3.1.1 Federal Bank Gold Loan Interest Rates 3.2 STATE BANK OF INDIA 3.2.1 STATE BANK OF INDIA GOLD LOAN 3.2.2 FEATURE OF STATE BANK OF INDIA GOLD LOAN 3.2.3 STATE BANK OF INDIA GOLD LOAN INTEREST RATE 3.2.4 SBI Gold Loan Details 3.2.5 Gold Loan Schemes of SBI 3.3 GOLD LOAN 3.3.1 Feature of gold loan 3.3.2 Advantages of Gold Loan 3.3.3 Charges associated with Gold Loan: 3.3.4 Advise On Gold Loans 3.3.5 Documents required For Gold Loan

PAGE NO.

3.3.6 GOLD LOAN SCHEME 3.3.7 GOLD LOAN INTEREST RATE CALCULATOR 3.3.8 Types of Banks Offering Gold Loans 3.3.9 Gold loan benefits 3.3.10 Ways Gold Loan Proves To Be The Best For Your Financial Needs 3.3.11 Different Ways of Repaying Your Gold Loan 3.3.12 Factors while taking a gold loan 3.3.13 CONSEQUENCES FOR NONPAYMENT OF GOLD LOAN

CHAPTER 4

REVIEW OF LITERATURE 4.1 REVIEW OF LITERATURE ON GOLD LOAN 4.2 REVIEW OF LITERATURE ON FEDERAL BANK 4.3 REVIEW OF LITERATURE ON STATE BANK OF INDIA

CHAPTER 5

DATA ANALYSIS AND INTERPRETATION CONCLUSION SUGGESTION BIBLIOGRAPHY APPENDIX

“A COMPARATIVE STUDY OF LOANS AND ADVANCES OF FEDERAL BANK & STATE BANK OF INDIA WITH RESPECT TO GOLD LOAN”

CHAPTER: 01 INTRODUCTION

1.1 INTRODUCTION OF BANK A bank is a financial institution that accepts deposits from the public and creates credit. Lending activities can be performed either directly or indirectly through capital markets. Due to their importance in the financial stability of a country, banks are highly regulated in most countries. Most nations have institutionalized a system known as fractional reserve banking under which banks hold liquid assets equal to only a portion of their current liabilities. In addition to other regulations intended to ensure liquidity, banks are generally subject to minimum capital requirements based on an international set of capital standards, known as the Basel Accords. Banking has existed in some form or another in the ancient and medieval eras but in its modern sense, Banking in India originated in the last decades of 18th Century. Established in the 1770 and 1786, Bank of Hindustan and General Bank of India were among the first banking institutions in the country. The former was liquidated in 1829-32 while the latter failed within 5 years of starting business. State Bank of India is the oldest existing bank in the country. In 1806, it was originated as Bank of Calcutta and was later named Bank of Bengal in 1809. It was among the three banks funded by a presidency government all of which were merged in 1921 to form Imperial Bank of India. After India’s independence, the Imperial Bank of India was renamed as State Bank of India in 1955.

1.2 DEFINITION OF BANK

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Under English common law, a banker is defined as a person who carries on the business of banking by conducting current accounts for his customers, paying cheques drawn on him/her and collecting cheques for his/her customers.

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An establishment authorized by a government to accept deposits,pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers.

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Oxford Dictionary defines a bank as "an establishment for custody of money, which it pays out on customer's order."

1.3 FEATURES OF BANK 1. Dealing in Money Bank is a financial institution which deals with other people's money i.e. money given by depositors. 2. Individual / Firm / Company A bank may be a person, firm or a company. A banking company means a company which is in the business of

banking.

3. Acceptance of Deposit A bank accepts money from the people in the form of deposits which are usually repayable on demand or after the expiry of a fixed period. It gives safety to the deposits of its customers. It also acts as a custodian of funds of its customers. 4. Giving Advances A bank lends out money in the form of loans to those who require it for different purposes. 5. Payment and Withdrawal A bank provides easy payment and withdrawal facility to its customers in the form of cheques and drafts, It also brings bank money in circulation. This money is in the form of cheques, drafts, etc. 6. Agency and Utility Services

A bank provides various banking facilities to its customers. They include general utility services and agency services. 7. Profit and Service Orientation A bank is a profit seeking institution having service oriented approach. 8. Ever increasing Functions Banking is an evolutionary concept. There is continuous expansion and diversification as regards the functions, services and activities of a bank. 9. Connecting Link A bank acts as a connecting link between borrowers and lenders of money. Banks collect money from those who have surplus money and give the same to those who are in need of money. 10. Banking Business A bank's main activity should be to do business of banking which should not be subsidiary to any other business. 11. Name Identity A bank should always add the word "bank" to its name to enable people to know that it is a bank and that it is dealing in money.

1.4 Classification of Banks The apex banking body is the Reserve Bank of India (RBI). It is the central banking institution and the supreme monetary authority in the country. Formed in 1935 under the Reserve Bank of India Act, 1934, RBI plays a monumental role in designing the monetary policies. The main functions of RBI are to regulate the banks in the country and also provide important financial services like controlling inflation in the country and storing financial exchange reserves. Banks are classified into scheduled and nonscheduled banks. Scheduled banks can further be classified into commercial banks and cooperative banks. Commercial Banks can be further classified into public sector banks, private sector banks, foreign banks and Regional Rural Banks (RRB). On the other hand,

cooperative banks are classified into urban and rural. Apart from these, a fairly new addition to the structure is payments bank.

Scheduled Banks :- Schedules banks are those that are covered under the 2nd Schedule of the Reserve Bank of India Act, 1934. A bank that has a paid-up capital of Rs. 5 Lakh and above qualifies for the schedule bank category. These banks are eligible to take loans from RBI at bank rate. •

Commercial Banks :-Commercial Banks are regulated under the Banking Regulation Act, 1949 and their business model is designed to make profit. Their primary function is to accept deposits and grant loans to the general public, corporates and government. Commercial banks can be divided into1- Public Sector Banks :These are the nationalised banks and account for more than 75 per cent of the total banking business in the country. Majority of stakes in these banks are held by the government. In terms of volume, SBI is the largest public sector bank in India and after its merger with its 5 associate banks (as on 1st April 2017) it has got a position among the top 50 banks of the world. There are a total of 21 nationalised banks in the country namely below:

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State Bank of India

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Bank of India

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Allahabad Bank

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Bank of Maharashtra

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Canara Bank

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Indian Overseas Bank

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IDBI Bank

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Oriental Bank of Commerce

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Central Bank of India

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Corporation Bank

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Andhra Bank

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UCO Bank

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Bank of Baroda

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Union Bank of India

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United Bank of India

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Vijaya Bank

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Dena Bank

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Indian Bank

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Punjab & Sindh Bank

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Punjab National Bank

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Syndicate Bank

2- Private Sector Banks :These include banks in which major stake or equity is held by private shareholders. All the banking rules and regulations laid down by the RBI will be applicable on private sector banks as well. Given below is the list of private-sector banks in India•

HDFC Bank

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ICICI Bank

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Axis Bank

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YES Bank

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IndusInd Bank

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Kotak Mahindra Bank

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DCB Bank

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Bandhan Bank

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IDFC Bank

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City Union Bank

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Tamilnadu Mercantile Bank

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Nainital Bank

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Catholic Syrian Bank

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Federal Bank

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Jammu and Kashmir Bank

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Karnataka Bank

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Dhanlaxmi Bank

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South Indian Bank

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Lakshmi Vilas Bank

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RBL Bank

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Karur Vysya Bank

3- Foreign Banks :- A foreign bank is one that has its headquarters in a foreign country but operates in India as a private entity. These banks are under the obligation to follow the regulations of its home country as well as the country in which they are operating. Citi Bank, Standard Chartered Bank and HSBC are some leading foreign banks in India. 4- Regional Rural Banks :- These are also scheduled commercial banks but they are established with the main objective of providing credit to weaker sections of the society like agricultural labourers, marginal farmers and small enterprises. They usually operate at regional levels in different states of India and may have branches in selected urban areas as well. Other important functions carried out by RRBs include•

Providing banking and financial services to rural and semi-urban areas

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Government operations like disbursement of wages of MGNREGA workers, distribution of pensions etc.

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Para-Banking facilities like debit cards, credit cards and locker facilities

5- Small Finance Banks :- This is a niche banking segment in the country and is aimed to provide financial inclusion to sections of the society that are not served by other banks. The main customers of small finance banks include micro industries, small and marginal farmers, unorganized sector entities and small business units. These are licensed under Section 22 of the Banking Regulation Act, 1949 and are governed by the provisions of RBI Act, 1934 and FEMA.

•

Co-operative Banks :-Co-operative banks are registered under the Cooperative Societies Act, 1912 and they run by an elected managing committee. These work on no-profit no-loss basis and mainly serve entrepreneurs, small businesses, industries and self-employment in urban areas. In rural areas, they mainly finance agriculture-based activities like farming, livestock and hatcheries.

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Payments Bank :- This is a relatively new model of bank in the Indian Banking industry. It was conceptualised by RBI and is allowed to accept a restricted deposit. The amount is currently limited to Rs. 1 Lakh per customer. They also offer services like ATM cards, debit cards, net-banking and mobile-banking.

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

Utility of Loans and Advances :- Loans and advances granted by commercial banks are highly beneficial to individuals, firms, companies and industrial concerns. The growth and diversification of business activities are effected to a large extent through

bank financing. Loans and advances granted by banks help in meeting short-term and long term financial needs of business enterprises. We can discuss the role played by banks in the business world by way of loans and advances as follows:(a) Loans and advances can be arranged from banks in keeping with the flexibility in business operations. Traders, may borrow money for day to day financial needs availing of the facility of cash credit, bank overdraft and discounting of bills. The amount raised as loan may be repaid within a short period to suit the convenience of the borrower. Thus business may be run efficiently with borrowed funds from banks for financing its working capital requirements. (b) Loans and advances are utilized for making payment of current liabilities, wage and salaries of employees, and also the tax liability of business. (c) Loans and advances from banks are found to be ‘economical’ for traders and businessmen, because banks charge a reasonable rate of interest on such loans/advances. For loans from money lenders, the rate of interest charged is very high. The interest charged by commercial banks is regulated by the Reserve Bank of India. (d) Banks generally do not interfere with the use, management and control of the borrowed money. But it takes care to ensure that the money lent is used only for business purposes.

(e)

Bank loans and advances are found to be convenient as far as its repayment is concerned. This facilitates planning for future and timely repayment of loans. Otherwise business activities would have come to a halt. (f) Loans and advances by banks generally carry element of secrecy with it. Banks are duty-bound to maintain secrecy of their transactions with the customers. This enhances people’s faith in the banking system.

1.6 Different type of loans and advances 1.Home loan :- Home loan is most common loan available in India. Home loan is given by bank in order to purchase property. Home loan is available with two variant fixed interest and variable interest. It is good idea to purchase variable interest rate loan. Home loan gives you tax benefit also.Interest rate: 9 -11%. 2.Education loan :- If you are student and seeking money for higher education you can apply for Education Loan. Education loan is available for Indian and foreign education. You can avail tax benefit under section 80E for the education loan.Interest rate: 1114.5%. 3.Car loan :- If you want to purchase new vehicle you can opt of vehicle loan or car loan. You can avail this loan from bank. You need to submit income proof in order to avail this loan. Interest rate: 9.6-10.6%. 4.Personal loan :- Personal Loan is loan given by bank or financial organization without any collateral. This loan is given purely based on your credit profile and credit score.Interest rate: 15-25%. 5.Gold loan :- Gold loan or loan against gold is a secured loan in which a customer pledges his/her gold ornaments as collateral with a gold loan company. ... It is a very quick and easy way of fulfilling one's financial needs as compared to the other loans.

1.7 Advantages and Disadvantages of loans and advances :Advantages of loans and advances 

The loan is not repayable on demand and so available for the term of the loan generally three to ten years - unless you breach the loan conditions.

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Loans can be tied to the lifetime of the equipment or other assets you're borrowing the money to pay for.

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At the beginning of the term of the loan you may be able to negotiate a repayment holiday, meaning that you only pay interest for a certain amount of time while repayments on the capital are frozen.

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While you must pay interest on your loan, you do not have to give the lender a percentage of your profits or a share in your company.

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Interest rates may be fixed for the term so you will know the level of repayments throughout the life of the loan.

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There may be an arrangement fee that is paid at the start of the loan but not throughout its life. If it is an on-demand loan, an annual renewal fee may be payable.

Disadvantages of loans and advances 

Larger loans will have certain terms and conditions or covenants that you must adhere to, such as the provision of quarterly management information.

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Loans are not very flexible - you could be paying interest on funds you're not using.

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You could have trouble making monthly repayments if your customers don't pay you promptly, causing cashflow problems.

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In some cases, loans are secured against the assets of the business or your personal possessions, eg your home. The interest rates for secured loans may be lower than for unsecured ones, but your assets or home could be at risk if you cannot make the repayments.

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There may be a charge if you want to repay the loan before the end of the loan term, particularly if the interest rate on the loan is fixed.

CHAPTER: 02 RESEARCH METHODOLOGY 2.1 OBJECTIVE OF STUDY 1. To study different types of loans and advances provided by public sector bank (SBI) and private sector bank (Federal bank). 2. To study about gold loan provided by public sector bank (SBI) and private sector bank (Federal bank) . 3. To know about rate of interest charged by private sector bank (Federal Bank) and public sector bank (SBI) on gold loan. 4. To make comparsion of gold loan between public sector bank(SBI) and private sector bank (Federal bank). 5. To study various gold loan schemes of (SBI) and private sector bank (Federal bank). 6. To study the satisfaction of customer towards gold loan of (SBI) and private sector bank (Federal bank). 7. To study various services provided by(SBI) and private sector bank (Federal bank) towards gold loan.

2.2 HYPOTHESIS OF THE STUDY Hypothesis 1 : 

Ho :- Federal bank does not provide variety of schemes as compared to SBI. H1 :- Federal bank provides variety of schemes as compared to SBI.

Hypothesis 2 :

Ho :- Customers of federal bank are not satisfied with gold loan as compared to

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SBI. H1 :- Customer of federal bank are satisfied as compared to SBI.

Hypothesis 3 :

Ho :- Federal bank does not provide proper services on gold loan as compared to

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SBI. H1 :- Federal bank provide proper services on gold loan as compared to SBI.

2.3 Limitations of the study 1. The study only compare two banks. 2. The study is restricted to small area ie. Navi Mumbai. 3. The study do not deal with employee benefits. 4. The study do not study banks performance. 5. The study do not consider other than gold loan. 6. Only questionnaire method is used for data collection. 7. Only 50 sample is used for collecting data.

2.4 Significance of the study Loans in today’s world are occupying a pivotal position. Every individual wishes to buy several things and amenities but that it is not possible in all cases. The expenses are too

high, and the income of the people is the same. Inflation is at its peak, but the income level has remained the same. Due to this, there is a lot of pressure on the breadwinner of the family as he is responsible for carrying the burden of all the expenses of the family. Due to such reasons, Loans have become the solutions for all these issues. There are many kinds of loans available in the market. The idea of loans is basically designed for the people who wish to buy several things but can’t afford them. One of these types of loans is gold loan. These are loans that are given on gold. In other words, gold is pledged as collateral by the borrower for a particular sum of money. Most of the people who buy gold as an investment for future purposes. It is the most beneficial for people who need a loan for instance financing. When loans are available on gold, it becomes very easy for the borrower to apply for them as he doesn’t need to go for long procedures or verifications. The best thing about gold loans is that they are easily available in the market. That is, all the banks and financial institutions give such loans to people. The provision of the loan is solely on the discretion of the banks. By taking gold loans, one can maintain liquidity in his finance, without selling off any asset or the gold itself. Gold works as a security for getting a required amount of finance from any bank. The most attractive part of these loans is that the loan is given for an amount which is more than 80% of the value. These loans are also termed as ‘ATL’ which means anytime liquidity. This means that the person can get the loan in less than 30 minutes easily and quickly. The most tedious thing that people feel about taking a loan is that it is a very long process and requires a lot of documentation. But this is not the case with gold loans. There is very less documentation and also the paperwork is very simplified. The most highlighting thing is that you are not supposed to pay any EMI; you just have to service the interest and benefit from these loans. And also, the loan is given in a very short time. I mean you just have to apply for the loan and you get the money in a few hours. So, if you are a working individual and you require a quick loan, gold loan is the best option for you. It is no more harassing for the person to get a loan. The first thing that bothers people before taking a loan is the interest rate. This is because one is supposed to pay the asked amount of interest during the repayment. When you apply for Gold loan you should be least bothered about the interest. The Gold Loan Interest Rate that is charged on the gold loans is very less. So even if you do not have a long repayment period but a low rate of interest,

the option becomes an acceptable one. In comparison to personal loans and other categories of loans, the rate of interest in case of gold loans is the least. This makes gold loans the most preferable and the rational choice of the masses. Also, the funds derived from gold loans can be used for all purposes. There is no usage restriction like that of home loans, education loans, Auto loans etc. All these reasons make a gold loan a very attractive deal for the borrower.

2.5 Scope of the study A. Conceptual scope : 1. The Gold Loan : The researcher has made an attempt to study Gold Loan provision by both Organised and unorganized lenders in Mumbai. The Gold Loan involves 1. Gold Loan on Jewellery 2. Gold Loan on Coins 2. Collateral : In lending agreements, collateral is a borrowers pledge of specific property to a lender, to secure repayment of a Loan. The collateral serves as protection for a lender against a borrower's default - that is, any borrower failing to pay the principal and interest under the terms of a Loan obligation. If a borrower does default on a Loan (due to insolvency or other event),that borrower forfeits (gives up) the property pledged as collateral and the lender then becomes the owner of the collateral. Collateral , especially within banking, traditionally refers to secured lending (also known as assetbased lending).More recently, complex collateralization arrangements are used to secure trade transactions (also known as capital market collateralization).The item used as collateral provides security to the lender, letting them know that they'll get their money back whether or not you're able to satisfactorily repay the Loan. The former often presents unilateral obligations secured in the form of property, surety, guarantee or other as collateral (originally denoted by the term security), whereas the latter often presents bilateral obligations secured by more liquid assets such as cash or securities, often known for margin.

3. Guarantor : A person who guarantees to pay for someone else's debt if he or she should default on Loan obligation than a guarantor acts as a cosignor of sorts, in that they pledge their own assets or services if a situation arises in which the original debtor cannot perform their obligations, therefore people or businesses with poor or limited credit history can only get a Loan if they have a guarantor. For example, an individual with a comparatively low credit score looking to obtain a line of credit to cover unforeseen expenses may be required by the bank to find a guarantor before the bank will issue them the line of credit. 4. Unsecured Guarantor Loan : A guarantor Loan is a type of unsecured Loan that requires a guarantor to co-sign the credit agreement. A guarantor is a person who agrees to repay the borrowers debt should he or she default on agreed repayments. Guarantor Loans are often seen as alternatives to payday Loans and associated with the sub-prime finance industry, due to them being aimed at people who have no credit score, due to having never obtained credit in the past, or people with a damaged credit score, due to having missed payments towards debt in the past. Although guarantors are a relatively new introduction to the unsecured Loan market, it's not uncommon for people to be asked to provide a guarantor to co-sign other forms of financial agreement, such as in residential letting contracts, where young people without previous references are often required to provide a guarantor and in the mortgage industry, where guarantors are often used to help people obtain a mortgage when they would otherwise be declined due to being considered a credit risk. 5. Credit risk Credit risk refers to the risk that a borrower will default on any type of debt by failing to make required payments. The risk is primarily that of the lender and includes lost principal and interest, disruption to cash flows, and increased collection costs. The loss may be complete or partial and can arise in a number of circumstances. 6. ETFs : A gold Exchange Traded Fund or GETF (Gold Exchange Traded fund)that aims to track the price of gold, Gold ETFs are units representing physical gold which may be in paper or dematerialized form. These units are traded on the exchange like a single stock of any company.

B. Geographical scope : Navi Mumbai formerly New Bombay, is a planned city off the west coast of the Indian state of Maharashtra in Konkan division. The city is divided into two parts, North Navi Mumbai and South Navi Mumbai, for the individual development of Panvel Mega City, which includes the area from Kharghar to Uran. Navi Mumbai has a population of 1,119,477 as per the 2011 provisional census.

2.6 Sample size

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For the study random sampling technique is selected. Random sampling = Random sampling is a part of the sampling technique in which each sample has an equal probability of being chosen. A sample chosen randomly is meant to be an unbiased representation of the total population. If for some reasons, the sample does not represent the population, the variation is called a sampling error. 

Around 50 samples were collected from Navi Mumbai. No. of male No. of female Total

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24 26 50

Age group Age 0-18 19-45 46-70 Total

2.7 Data collection

:

No. of recipient 5 35 10 50

Data collection is the process of gathering and measuring information on variables of interest, in an established systematic fashion that enables one to answer stated research questions, test hypotheses, and evaluate outcomes. Sources for collection of data are of two types : A. Primary sources

B. Secondary sources

A. Primary sources : A primary source is an original source that documents an event in time, a person or an idea. Primary data is collected in the course of doing experimental or descriptive research by doing experiments, performing surveys or by observation or direct communication with respondents. Several methods for collecting primary data are given below – 1.Observation Method It is commonly used in studies relating to behavioural science. Under this method observation becomes a scientific tool and the method of data collection for the researcher, when it serves a formulated research purpose and is systematically planned and subjected to checks and controls.

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Structured (descriptive) and Unstructured (exploratory) observation – When a observation is characterized by careful definition of units to be observed, style of observer, conditions for observation and selection of pertinent data of observation it is a structured observation. When there characteristics are not thought of in advance or not present it is a unstructured observation.

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Participant, Non-participant and Disguised observation – When the observer observes by making himself more or less, the member of the group he is observing, it is participant observation but when the observer observes by detaching himself from the group under observation it is non participant observation. If the observer observes in such a manner that his presence is unknown to the people he is observing it is disguised observation.

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Controlled (laboratory) and Uncontrolled (exploratory) observation – If the observation takes place in the natural setting it is a uncontrolled observation but when observer takes place according to some pre-arranged plans, involving experimental procedure it is a controlled observation.

2.Interview Method This method of collecting data involves presentation of oral verbal stimuli and reply in terms of oral – verbal responses. It can be achieved by two ways :(A) Personal Interview – It requires a person known as interviewer to ask questions generally in a face to face contact to the other person. It can be – 

Direct personal investigation – The interviewer has to collect the information personally from the services concerned.

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Indirect oral examination – The interviewer has to cross examine other persons who are suppose to have a knowledge about the problem.

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Structured Interviews – Interviews involving the use of pre- determined questions and of highly standard techniques of recording.

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Unstructured interviews – It does not follow a system of pre-determined questions and is characterized by flexibility of approach to questioning.

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Focused interview – It is meant to focus attention on the given experience of the respondent and its effect. The interviewer may ask questions in any manner or sequence with the aim to explore reasons and motives of the respondent.

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Clinical interviews – It is concerned with broad underlying feeling and motives or individual’s life experience which are used as method to ellict information under this method at the interviewer direction.

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Non directive interview – The interviewer’s function is to encourage the respondent to talk about the given topic with a bare minimum of direct questioning.

(B) Telephonic Interviews – It requires the interviewer to collect information by contacting respondents on telephone and asking questions or opinions orally.

3.Questionnaire In this method a questionnaire is sent (mailed) to the concerned respondents who are expected to read, understand and reply on their own and return the questionnaire. It consists of a number of questions printed on typed in a definite order on a form on set of forms. It is advisable to conduct a `Pilot study’ which is the rehearsal of the main survey by experts for testing the questionnaire for weaknesses of the questions and techniques used. Essentials of a good questionnaire –

-It should be short and simple -Questions should proceed in a logical sequence -Technical terms and vague expressions must be avoided. -Control questions to check the reliability of the respondent must be present -Adequate space for answers must be provided -Brief directions with regard to filling up of questionnaire must be provided -The physical appearances – quality of paper, colour etc must be good to attract the attention of the respondent. B. Secondary sources : A researcher can obtain secondary data from various sources. Secondary data may either be published data or unpublished data. You can break the sources of secondary data into internal as well as external sources. Inner sources incorporate data that exists and is stored in your organization. External data refers to the data that is gathered by other individuals or associations from your association’s outer environment.



Universities



Government sources



Foundations



Media, including telecast, print and Internet



Trade, business and expert affiliations



Corporate filings



Commercial information administrations, which are organizations that find the data for you.

2.8 Technique and tools Research is basically a term used for a systematic search for getting relevant answers on any taken up topic. Methodology may be understood as all those methods and techniques that are used for conducting a particular research. It may include the methods of data collection, statistical tools for analyzing the data etc. In this study there are two techniques are been used namely:a. Mean method

b. Graphical method

A. Mean method :- The mean is the average of the numbers. It is easy to calculate: add up all the numbers, then divide by how many numbers there are. In other words it is the sum divided by the count. Also called the Arithmetic Mean, because there are other means such as the geometric mean and harmonic mean.

B. Graphical method :- Scatter plots are a simple graphical method and results can be readily interpreted. This method is useful for comparing data sets side by side. The use of scatter plots Graphical representation of multiple observations from a single point used to illustrate the relationship between two or more variables. 

Pie chart :- A pie chart (or a circle chart) is a circular statistical graphic which is divided into slices to illustrate numerical proportion. In a pie chart, the arc length of each slice (and consequently its central angle and area), is proportional to the quantity it represents. While it is named for its resemblance to a pie which has been sliced, there are variations on the way it can be presented. The earliest known pie chart is generally credited to William Playfair`s Statistical Breviary of



1801. Histogram :- A histogram is an accurate representation of the distribution of numerical data. It is an estimate of the probability distribution of a continuous variable (quantitative variable) and was first introduced by Karl Pearson. It

differs from a bar graph, in the sense that a bar graph relates two variables, but a histogram relates only one. To construct a histogram, the first step is to "bin" (or "bucket") the range of values—that is, divide the entire range of values into a 

series of intervals—and then count how many values fall into each interval. Diagram :- A diagram is a symbolic representation of information according to some visualization technique. Diagrams have been used since ancient times, but



became more prevalent during the Enlightenment. Table :- A table is an arrangement of data in rows and columns, or possibly in a more complex structure. Tables are widely used in communication, research, and data analysis. Tables appear in print media, handwritten notes, computer software, architectural ornamentation, traffic signs, and many other places. The precise conventions and terminology for describing tables vary depending on the context. Further, tables differ significantly in variety, structure, flexibility, notation, representation and use.

CHAPTER : 03 CONCEPTUAL FRAMEWORK

3.1 FEDERAL BANK LIMITED :Federal Bank Limited is a major Indian commercial bank in the private sector headquartered at Aluva Kerala. The Bank operates in four segments: treasury operations wholesale banking retail banking and other banking operations. Treasury operations include investment and trading in securities shares and debentures. The Bank's products and services include working capital term finance trade finance specialized corporate finance products structured finance foreign exchange syndication services and electronic banking requirements. The bank has 1252 branches 1696 ATMs and 231 Cash Machines as on 31 March 2018. The bank also has its Representative Offices at Abu Dhabi and Dubai and an IFSC Banking Unit (IBU) in Gujarat International Finance Tec-City (GIFT City).The Bank offer its customers a variety of services such as Internet banking Mobile banking on-line bill payment online fee collection depository services Cash Management Services merchant banking services insurance mutual fund products and many more as part of its strategy to position itself as a financial super market and to enhance customer convenience .Federal Bank Ltd was incorporated on April 28 1931 with the name Travancore Federal Bank Ltd. The company was established with an authorized capital of rupees five thousand at Nedumpuram a place near Tiruvalla in Central Travancore under the Travancore Company's Act. The Bank was founded by K.P.Hormis. They started business of auction -chitty and other banking transactions connected with agriculture and industry. In May 18 1945 the registered office of the Bank was shifted to Aluva. They opened their first branch at Aluva and commenced operations. In the year 1946 they opened their second branch at Angamally. In March 24 1947 the name of the Bank was changed to Federal Bank Ltd. In April 1947 they opened their third branch of the Bank was at Perumbavoor. In July 11 1959 the Bank was licensed under Sec.22 of the Banking

Companies Act 1949. The Bank floated several kuries one after another. They also introduced several new deposit schemes during the same period. In the year 1964 the Bank took over the assets and liabilities of the Chalakudy Public Bank Ltd The Cochin Union Bank Ltd and The Alleppey Bank Ltd. In the year 1965 the St.George Union Bank Ltd was amalgamated merged with the Bank. In the year 1968 The Marthandom Commercial Bank Ltd was amalgamated with the Bank. In the year 1970 the Bank became a Scheduled Commercial Bank.In the year 1973 the Bank became an Authorized Dealer in Foreign Exchange and the International Banking Department of the bank was started functioning from Mumbai. In the year 1975 the Bank opened 53 branches. In the year 1976 they opened 42 branches. In the year 1982 the Bank shifted the International Banking Department to Cochin as part of consolidation and centralization of activities. As part of the organization redesigning recommended by National Institute of Bank Management (NIBM) the Agricultural Finance Department was set up in head office in November 1984. In July 1985 the Bank set up Personnel and Industrial Relations Department. Also they installed the first Advanced Ledger Posting Machine (ALPM-a Wipro banker) at Br.Aluva-Bank Junction branch. In the year 1987 they inaugurated the administrative building complex. In the year 1989 the Bank entered into the Merchant Banking Operations. In March 1994 the Bank came out with the public issue. In February 17 1997 the bank inaugurated their first ATM at Eranakulam North. In the year 2000 the Bank started their Any Where Banking (ABB) at Bangalore connecting all branches located in the Bangalore metro. They launched Depository Services in association with NSDL. Also they commenced Internet Banking under the name of 'FedNet' with software support from Infosys Technologies Ltd. They entered into marketing pacts with some commercial agencies for their E-commerce business.In the year 2001 the bank made a tie up with Escotel Communications to launch mobile banking services using SMS technology. Also they launched a new deposit scheme christened as 'Suraksha' for senior citizens. The bank became a member of INFINET the financial network supported by RBI. In February 2002 they set up full-fledged systems for the RBI's Negotiated Dealing Systems (NDS) at the Funds & Investment Branch in Mumbai enabling online trading in securities. In the year 2003 the Bank unveiled the Anywhere Banking that provided the convenience of doing transactions from 300-plus interconnected branches. In the year

2004 the Bank obtained the level of 100% interconnectivity among all their branches. Also they launched an Equity Subscription Scheme a new retail product for financing the IPOs and public issue applications of their own customers. The Bank joined hands with ICICI Prudential Life Insurance Company Ltd for premium collection through their branches and introduced new Fed e-Pay services. In the year 2005 JRG Securities Ltd forged an alliance with the Bank for providing loans for subscribing to initial public offers (IPOs). The bank emerged as the first bank in India to offer Real Time Gross Settlement (RTGS) across all of their branches. In September 2 2006 Ganesh Bank was amalgamated with the Bank and the 32 branches of erstwhile Ganesh Bank of Kurundwad Ltd were successfully integrated to bank's network. During the period of 2006-07 the Bank entered into a joint venture agreement with IDBI Ltd & Fortis Insurance International N V for incorporating a Life Insurance Company under the name of IDBI Fortis Life Insurance Company Ltd. During the year 2007-08 the Bank opened their Representative office at Abu Dhabi Capital of UAE for the gateway of the bank to the whole of Middle East and also as an interface between their existing customers of GCC countries and its Branches /Offices in India. In March 2008 the Bank's joint venture life insurance company IDBI Fortis Life Insurance Company Ltd commenced their operation.During the year 2009-10 the Bank opened 60 new branches and 115 new ATM centres. During the year 2010-11 they opened 71 new branches and 73 new ATMs. As on March 31 2011 the total number of branches and ATMs of the Bank increased to 743 and 805 respectively as against 672 and 732 in the last financial year. As of March 31 2011 the Bank had two A category branches and 78 branches designated as B category for handling the foreign exchange business.Federal Bank opened 66 branches across the length and breadth of the nation on the occasion of the bank's 66th Founders Day on 18 October 2011. In November 2011 the bank launched its second 24x7 Customer Care Contact Centre manned by differently able people. In December 2011 Federal Bank signed Inward Remittance Agreement with Samba Bank one of the largest banks in Saudi Arabia (KSA).In January 2012 Federal Bank's Islampur branch became the first branch to implement ICT model Financial Inclusion product `FedJyothi' in Maharashtra. During the month Federal Bank launched Fast Biz Visa International Business Debit Card to SME/Corporate Clients. In March 2012 Federal Bank formally launched 100 branches on

a single day pan India taking the total number of branches 935. In April 2012 Federal Bank launched IMPS the instant interbank fund transfer service through mobile phone by which the amount is instantly credited to the account of the beneficiary. In August 2012 Federal Bank opened its 1000th branch at Tiruvalla Muthoor in Kerala. In December 2012 the total employee strength of the bank crossed 10000.Federal Bank's 3rd Currency Chest in Mumbai was inaugurated in March 2013. During the month the bank's Money Exchange Bureau was inaugurated at Trivandrum International Airport. Federal Bank crossed Rs 1 lakh crore of total business at the end of financial year 2012-13.In May 2013 Federal Bank introduced Value Added Services (Travel Tax Advisory Service) to NRI customers through website. In June 2013 Federal Bank entered into a tie up with Tata Communications Payment Solutions Ltd (TCPSL) for acting as the sponsor bank for white label ATMs to be deployed by TCPSL. Federal Bank is the first bank in India to be the sponsor bank for White Label ATMsIn August 2013 Federal Bank launched FedBook the first electronic passbook launched by a bank in India. FedBook is a mobile app through which customers can view their passbook details.Federal Bank's total number of branches crossed 1150 in February 2014. The bank continued to expand its footprint and added 32 branches and 47 ATMs during the quarter ended 31 March 2014 to take the tally to 1174 branches and 1359 ATMs as on 31 March 2014.The bank added 29 branches and 33 ATMs during the quarter ended 30 June 2014 to take the tally to 1203 branches and 1392 ATMs as on 30 June 2014. During the quarter ended 30 September 2014 Federal Bank added 11 branches and 43 ATMs to take the tally to 1214 branches and 1435 ATMs as on 30 September 2014. Federal Bank opened its first International Standard 24 X 7 Banking facility christened Federal Experience Center on 21 November 2014 at Nedumbassery Kochi.In March 2015 Federal Bank joined hands with Startup Village in Kerala and MobME wireless to launch India's first focused FinTech Accelerator Programme a unique programme that aims at speeding up technological innovations in the financial sector space.In May 2015 Federal Bank and SBI Card announced their collaboration to launch Federal Bank-SBI co-branded credit cards. Through this alliance Federal Bank launched two new variants of Visa credit cards for its customers namely Platinum and Gold `N More.In June 2015 Federal Bank launched Scan N Pay an innovative payment app for smartphones. The bank also launched Mobile Recharge

facility through its ATMs.In August 2015 Federal Bank launched its first digital loan FedE-Credit an online loan against deposit facility. During the month the bank enabled Cardto-Card fund transfer facility through its ATMs and also launched FedBook Selfie - a mobile based savings banks (SB) account opening application which is first of its kind in India.In October 2015 Federal Bank became the first bank to introduce Currency Conversion Desk and mobile ATM facility at the Cochin Port facilitating passengers of cruise ships to exchange currency upon arrival. During the month the bank introduced Missed call based banking services for Balance Enquiry and Mini Statement. During the month Federal Bank became the second bank to open an International Financial Services Centre (IFSC) Banking Unit (IBU) in Gujarat International Finance Tec-City (GIFT City). In December 2015 Federal Bank introduced Missed call based banking services for Mobile Recharge.In January 2016 Federal Bank introduced Missed call based banking services for Fund transfer. In March 2016 Federal Bank launched Payment Gateway facility for KSEB electricity Bill payment. In April 2016 Federal Bank entered into a strategic partnership with Phillip Capital (India) Pvt. Ltd. a subsidiary of the Singapore headquartered Phillip Capital group for providing Portfolio Investment Scheme (PIS) services to NRIs.In June 2016 Federal Bank launched `Launchpad' an exclusive outlet for start-ups. `Launchpad' is a one stop facility providing a range of advisory services in addition to customized banking offerings to budding entrepreneurs who wish to set up start-up ventures in diverse sectors like Digital Financial Services Biotechnology Hi-Tech Farming Healthcare Logistics E-Commerce/E-Markets etc. In August 2016 Federal Bank launched its Unified Payments Interface (UPI) application 'Lotza'. Built on the concept 'Accounts of different Banks on one App' Lotza offers seamless and secure financial transaction capability between accounts of different Banks through a single app.On 15 November 2016 Federal Bank announced that RBI has given its approval to the bank to open a representative office in Manama Bahrain and also to open a branch in DIFC Dubai UAE.The Credit Committee & Investment and Raising Capital Committee of the bank at its meeting held on 29 June 2017 approved the issue and allotment of 21.55 crore equity shares to Qualified Institutional Buyers (QIB) at the issue price of Rs 116 per share aggregating to Rs 2500 crore. The Qualified Institutional Placement (QIP) issue was closed on 27 June 2017.On 8 November 2017 Federal Bank announced that the Reserve

Bank of India has given its approval to the bank for opening representative offices at Kuwait and Singapore. With the opening of these offices the bank will be able to widen its services to NRI diaspora and also enhance the international visibility of the bank.The total business of the bank crossed the milestone figure of Rs 2 lakh crore in Q4 March 2018. The bank also delivered its highest operating profit of Rs 589 crore in Q4 March 2018.On 11 May 2018 Federal Bank informed the stock exchanges that the Reserve Bank of India accorded approval to the bank for acquisition of up to 19.90% of the equity capital of Equirus Capital Private Limited (ECPL) as against approval of the Board of Directors of the bank for acquisition of a significant minority stake of up to 26% of ECPL. Earlier on 22 February 2018 the Board of Directors of the bank approved acquisition of a significant minority stake of up to 26% of ECPL a financial services company subject to statutory and regulatory approvals and satisfactory completion of financial and legal due diligence. On 11 May 2018 Federal Bank and Fedbank Financial Services Limited (Fedfina) a wholly owned subsidiary of the bank entered into definitive agreements for Fedfina to issue fresh equity shares subject to statutory and regulatory approval constituting 26% of the post-issue paid up share capital of Fedfina to a fund managed by True North Enterprise Private Limited.On 12 June 2018 Federal Bank and Equirus Capital Private Limited (ECPL) entered into definitive agreements for investment by the bank upto 19.89% in the equity share capital of Equirus Capital Private Limited. Low interest rate Loan offers. . We can help you find the right loan deals in India. We work with major banks & financial institutes like HDFC Bank & Fullerton India who offer great personal loan deals at low interest rates with fast & simple online approval process. For Home Loans we work with HDFC Ltd, Axis Bank, ICICI Bank & others to get you the best home loan interest rates. To help you buy your dream car in India we work with Axis Bank and HDFC Bank to get you the best car loan interest rates. Applying for a Federal Bank Loan :

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Privacy: Your application is sent only to the lender you choose, and is never shared with anyone else.

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Trust: Top private banks in India like HDFC Bank, ICICI Bank and Axis Bank uses -powered technology to give thier customers the best Loan experience on their websites.

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Compare Loan offers: Compare customized Personal Loans, Home Loans and Car Loan offers in India from various banks based on your eligibility criteria and apply online for the one you like.Your application will be sent electronically to the lender you chose. The lender will contact you within one day.



3.1.1 Federal Bank Gold Loan Interest Rates Gold Loan

Loan Details

Federal Gold Loan Rate

11.75% onwards

Processing Fee

Nil

Loan Tenure

6 months to 12 months

Loan Amount

Rs. 1,000 to Rs. 75 Lakh

Prepayment Charges

Nil

Gold Loan Scheme

Bullet Repayment Scheme, Overdraft Scheme

Federal Bank offers one of lowest gold loan rate of 11.75% , both for its existing bank customers as well as new borrowers. Federal jewel loan interest rate varies by amount of loan, purity of gold and loan to value ratio. Gold Loans are loans availed by pledging your gold ornaments with a bank. Federal gold loan can be taken for meeting urgent personal expenses like children education, marriage and other financial emergencies in the family as well as for business purposes. The gold mortgaged acts as a security to the loan. Taking a loan from Federal has the following benefits:  Overdraft facility available.  Free insurance cover and secured credit card.  Interest charged only on the amount used.

The following details of gold loan schemes under federal bank : 

Purpose of Gold loan: To meet personal and business expense requirements



Collateral: Loan against security of your gold jewelry



Type of Gold Accepted: Gold jewelry or gold coins of up to 50 grams with a purity of 18 to 22 carat



Customer Segments: Federal offers jewel loans to all individuals above 18 years of age including salaried, self-employed professionals, businessmen, students, pensioners and housewives



Gold Loan Features o

Federal Bank Gold Loan Interest Rate starts from 11.75% to 13.50%

o

Federal Bank charges a processing fees of Nil

o

Loan Tenure of Gold Loan ranges from 6 months to 12 months

o

Lowest EMI per lakh on Gold Loan from Federal Bank is Rs. 8,873 offered at the lowest interest rate of 11.75% at the longest loan tenure of 12 months

o 

Federal allows prepayment of jewel loans with Nil charges Documents Requirement: Only basic KYC documents for address proof and

income proof required. The bank doesn’t require you to submit your income proof or doesn’t check your CIBIL score for approving a gold loan. 

Popular Gold Loan Schemes of Federal o

Bullet Repayment Scheme

o

Overdraft Scheme

Federal bank interest rate calculator Lowest Gold Loan Interest Rate in Federal Bank is 11.75%.The factors that are used by Federal Bank to calculate interest on gold loan are loan amount, loan tenure and loan required as a percent of value of gold jewelry. Federal Bank’s existing account holders get gold loan at best rates compared to other customers. 

Loan Amount: The amount of gold loan you can avail depends on the weight of jewelry you can pledge with the bank. Generally, banks offer a jewel loan per gram of

gold which differs by the purity of gold and loan to value ratio offered. Banks offer lower interest rates for higher amount. Federal Bank offers loan between Rs. 1,000 and Rs. 75 Lakh amount. 

Relationship with the Bank: Federal Bank offers special rates, offers and charges to the existing account holders of the bank. Those who have made their payments on time in the past can get the benefit of low gold loan interest rate from Federal Bank.



Loan tenure: Many banks charge higher rate of interest for gold loans of lower tenure and lower interest rate for gold loans of higher tenure. Federal Bank offers gold loan with a tenure of 6 months to 12 months.



Loan to Value ratio: Maximum gold loan to value of gold jewelery ratio on gold jewelry has been fixed at 75% by RBI. However, Federal Bank also offers loans at lower LTVs. Interest rate on loans with lower LTV will be lower compared to loans with higher LTV. Maximum LTV offered by Federal Bank is 75% calculated on net weight of gold in your jewelry.



Purpose of Loan: All banks, including Federal Bank also offer gold loan for agricultural purposes at low concessional rates, as the same is counted under priority sector lending targets of the bank. Federal's gold loan interest rate for agricultural loans is generally lower by 1-2% compared to its gold loan rate for regular customers.

3.2 STATE BANK OF INDIA :The State Bank of India (SBI) is an Indian multinational, public sector banking and financial services company. It is a government-owned corporation headquartered in Mumbai, Maharashtra. The company is ranked 216th on the Fortune Global 500 list of the world's biggest corporations as of 2017. It is the largest bank in India with a 23% market share in assets, besides a share of one-fourth of the total loan and deposits market. The bank descends from the Bank of Calcutta, founded in 1806, via the Imperial Bank of India, making it the oldest commercial bank in the Indian subcontinent. The Bank of

Madras merged into the other two "presidency banks" in British India, the Bank of Calcutta and the Bank of Bombay, to form the Imperial Bank of India, which in turn became the State Bank of India in 1955. The Government of India took control of the Imperial Bank of India in 1955, with Reserve Bank of India (India's central bank) taking a 60% stake, renaming it the State Bank of India. In 2008, the government took over the stake held by the Reserve Bank of India. SBI acquired the control of seven banks in 1960. They were the seven regional banks of former Indi (SBBJ), State Bank of Hyderabad (SBH), State Bank of Indore (SBN), State Bank of Mysore (SBM), State Bank of Patiala (SBP), State Bank of Saurashtra (SBS) and State Bank of Travancore (SBT). All these banks were given the same logo as the parent bank, SBI. The plans for making SBI a single very large bank by merging the associate banks started in 2008, and in September the same year, SBS merged with SBI. The very next year, State Bank of Indore (SBN) also merged. In the same year, a subsidiary named Bharatiya Mahila Bank was formed. The negotiations for merging of the 6 associate banks (State Bank of Bikaner and Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala, State Bank of Travancore and Bharatiya Mahila Bank) by acquiring their businesses including assets and liabilities with SBI started in 2016. The merger was approved by the Union Cabinet on 15 June 2016. The State Bank of India and all its associate banks used the same blue Keyhole logo. The State Bank of India wordmark usually had one standard typeface, but also utilized other typefaces. On 15 February 2017, the Union Cabinet approved the merger of five associate banks with SBI. What was overlooked, however, were different pension liability provisions and accounting policies for bad loans, based on regional risks. The State Bank of Bikaner & Jaipur, State Bank of Hyderabad, State Bank of Mysore, State Bank of Patiala and State Bank of Travancore, and Bharatiya Mahila Bank were merged with State Bank of India with effect from 1 April 2017.

3.2.1 STATE BANK OF INDIA GOLD LOAN:

Gold Loans are loans availed by pledging your gold ornaments with a bank. SBI gold loan can be taken for meeting urgent personal expenses like children education, marriage and other financial emergencies in the family as well as for business purposes. The gold mortgaged acts as a security to the loan. Taking a loan from SBI has the following benefits: 

SBI offers loans against gold with simple documentation, quick processing, and no hidden charges.



You can avail gold loans of long tenure of 30 months.



SBI has a special agricultural gold loan scheme for borrowers engaged in farming and looking to borrow funds for meeting their farming expenses. SBI interest rate on agricultural gold loans is lower than that of its regular gold loan scheme.

3.2.2 Feature of state bank of india gold loan :

The existing customers of the SBI bank can avail this loan and it is not sold to anybody else.



Loan can be availed for a maximum amount of Rs.20 lakhs. The minimum amount of loan which can be availed is Rs.10,000 in rural and semi-urban areas and Rs.20,000 for metros and urban areas. So the applicant can borrow any amount of the loan as per his requirement as long he stays within the specified minimum and the maximum limits of the loan



Gold ornaments or jewelry are to be pledged to the bank for availing the loan. Gold coins issued by SBI can also be pledged to avail a loan under this scheme



The process of sanctioning the loan and disbursing of the amount is fast and simple. Very simple documents which are easily available with the individual are asked to be submitted and once submitted, the loan is issued instantly



The rate of interest charged on the loan is low which can suit the pockets of the borrowers when they are making the payment of the loan installment.



The bank maintains a margin of 25% of the value of the gold. Thus, the applicant ends up receiving 75% of the value of his gold pledged with the bank while the remaining 25% is retained by the bank as margin.



The maximum tenure for repaying the loan instalments is 30 months for demand loan and 36 months for overdraft. The instalment payment would commence one month post the date the disbursement of the loan is made and would be required to be paid off within the stipulated tenure. The individual may choose a lower tenure of repayment like 1 or 2 years but the period or repayment cannot exceed 2.5 years and the loan has to be repaid within 30 months or 36 months depending on loan type



The security required for availing the loan is the gold ornaments including gold coins which are issued by the bank

3.2.3 STATE BANK OF INDIA GOLD LOAN INTEREST RATE :SBI offers one of lowest gold loan rate of 10.55% , both for its existing bank customers as well as new borrowers. SBI jewel loan interest rate varies by amount of loan, purity of gold and loan to value ratio. Gold Loan

Loan Details

SBI Gold Loan Rate

10.55% onwards

Processing Fee

0.50% of the loan amount subject to a minimum of Rs. 500

Loan Tenure

3 months to 36 months

Loan Amount

Rs. 20,000 to Rs. 20 Lakh

Prepayment Charges

Nil

Gold Loan Scheme

Bullet Repayment Scheme.

Lowest Gold Loan Interest Rate in SBI is 10.55%.The factors that are used by SBI to calculate interest on gold loan are loan amount, loan tenure and loan required as a percent of value of gold jewelry. SBI’s existing account holders get gold loan at best rates compared to other customers. 

Loan Amount: The amount of gold loan you can avail depends on the weight of jewelry you can pledge with the bank. Generally, banks offer a jewel loan per gram of gold which differs by the purity of gold and loan to value ratio offered. Banks offer lower interest rates for higher amount. SBI offers loan between Rs. 20,000 and Rs. 20 Lakh amount.



Relationship with the Bank: SBI offers special rates, offers and charges to the existing account holders of the bank. Those who have made their payments on time in the past can get the benefit of low gold loan interest rate from SBI.



Loan tenure: Many banks charge higher rate of interest for gold loans of lower tenure and lower interest rate for gold loans of higher tenure. SBI offers gold loan with a tenure of 3 months to 36 months.



Loan to Value ratio: Maximum gold loan to value of gold jewelery ratio on gold jewelry has been fixed at 75% by RBI. However, SBI also offers loans at lower LTVs. Interest rate on loans with lower LTV will be lower compared to loans with higher LTV. Maximum LTV offered by SBI is 75% calculated on net weight of gold in your jewelry.

Purpose of Loan: All banks, including SBI also offer gold loan for agricultural purposes at low concessional rates, as the same is counted under priority sector lending targets of the bank. SBI's gold loan interest rate for agricultural loans is generally lower by 1-2% compared to its gold loan rate for regular.

3.2.4

SBI Gold Loan Details :-

If you are planning to take a Loan against Gold from SBI, you need to know the following details of its gold loan schemes: 

Purpose of Gold loan: To meet personal and business expense requirements



Collateral: Loan against security of your gold jewelry



Type of Gold Accepted: Gold jewelry or gold coins of up to 50 grams with a purity of 18 to 22 carat



Customer Segments: SBI offers jewel loans to all individuals above 18 years of age including salaried, self-employed professionals, businessmen, students, pensioners and housewives



Gold Loan Features o

SBI Gold Loan Interest Rate starts from 10.55%

o

SBI charges a processing fees of 0.50% of the loan amount subject to a minimum of Rs. 500

o

Loan Tenure of Gold Loan ranges from 3 months to 36 months

o

Lowest EMI per lakh on Gold Loan from SBI is Rs. 3,253 offered at the lowest interest rate of 10.55% at the longest loan tenure of 36 months

o 

SBI allows prepayment of jewel loans with Nil charges Documents Requirement: Only basic KYC documents for address proof and

income proof required. The bank doesn’t require you to submit your income proof or doesn’t check your CIBIL score for approving a gold loan. 

Popular Gold Loan Schemes of SBI - Bullet Repayment Scheme.

3.2.5 Gold Loan Schemes of SBI SBI offers several gold loan products to meet your various product requirements. These include loans with different repayment options 

Gold Loan with Bullet Repayment o

SBI offers a bullet repayment option for its gold loans. Under this, customers can pay the entire principal amount of the loan at the end of the tenure.

This results in lower monthly payments (consisting of only interest

o

component) during the life of the loan, reducing the burden significantly. This repayment option is more prevalent for gold loans of short tenures.

o 

Gold Loan for Agriculture SBI offers this scheme for farmers wherein, loan is offered to them against

o

gold ornaments in order to meet farming expenses. Presenting a proof of farming activity and ownership of an agriculture

o

land is mandatory. The end use of the gold loan must be mentioned by the borrower. The current rates for SBI Gold Loan for Agriculture are in the range of 7-

o 9.95%.

3.3 GOLD LOAN :As the name suggests this is the loan given against gold. Many nationalized banks, private banks and other financial companies offer this loan at attractive rates. Many go for this loan for short period to meet the requirement of their children’s education, marriage and other financial problems in the family. And others think that instead of keeping the gold idle at home or locker, loan against gold is the best option. Moreover with the rise in gold rates the demand from companies and banks offering such loans has raised. For instance, Muthoot Finance, one of the leading gold loan companies has seen 24 percent rises in gold loan against 17 percent raise in the market value of gold.

3.3.1 Feature of gold loan :Transparent System: Firstly, the system of the gold loan is very clear therefore, there are no hidden norms No Debt Burden: Next, There can be situations in which an applicant is not able to repay the loan amount in such a case the applicant will not be under debts as the bank will only confiscate the ornaments.

CIBIL Score: Moreover, the banks are not concerned about the Credit Score of a person. People with Weak CIBIL Score can also apply for a Gold Loan. Low Rate of Interest: Major advantage, the applicant will have to pay the least interest rate in comparison to other loans. Advantage on the rate of interest for Farmers: As a matter of fact, The farmers are given a rebate on the interest rate on availing this service. No Income bounds: There are no restrictions on the salary or income of the applicant hence, anyone with any income rage can avail a gold loan. Security of Assets: One of the major advantage, the applicant does not has to worry about the safety of the ornaments as it is the headache of the bank and not the owner. Fast Process: This is a secured loan therefore, you can get your gold loan disbursed in just 30 minutes Minimal Documents: Lastly, the applicant has to submit very fewer documents to avail a gold loan which makes it a hassle-free service.

3.3.2 Advantages of Gold Loan 

Gold loan doesn’t demand any certificate to show your salary or income and even no credit card history is required. Thus even unemployed and non working people can go for gold loan.

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Unlike any other unsecured loan, gold loan doesn’t require many papers, only few documents such as ID proof and address proof is enough to avail for such loan.

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One of the main advantages of gold loan is its low interest rates. Usually loan over gold is provided at the interest of 12-16% per annum and this is quite low compared to personal loans available at interest rates of 15-26% per annum.

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In rural areas Agricultural loan against gold is also available for agriculturist at very nominal rate of Interest of 7%-8%, proof of agricultural document needs to be provided

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Gold loan is the most simple and convenient forms of loan because here all you need to do is pledge your gold with a bank or finance company and get upto 80% of the market value of the gold as a loan.

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Borrower will be given an option to pay only interest during the entire term and at the end of the tenure you can pay complete borrowed amount in single shot.

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In case of gold loan processing time is very less. Usually banks take just few hours to complete the process where as in case of NBFC’s (Non Banking Financial Companies) a few minutes is enough for the same. So for immediate financial help this is the best option.

3.3.3 Charges associated with Gold Loan: 

Loan processing charge: While some of the service providers may waiver these charges, some banks do charge a processing fee.

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Valuation Charge: These are the charges to be paid to the valuator. These charges are also specific to the service provider and those having in-house valuators do not charge any extra amount for valuation.

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Late payment penalty: Most of the service providers charge late payment penalty and this too can vary from one institution to the other.

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Pre-payment penalty: Most of the service providers do not charge a penalty for repayment before the loan tenure is over. But some may still have this charge in place.

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It is advisable to check with the loan provider before taking the loan. These charges could change the amount that you may finally receive.

3.3.4 Advise On Gold Loans 

Go for gold loan if you are confident of returning the money in time otherwise, you will be penalized and all your pledged gold will come under the control of bank or finance company.

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While opting for gold loan check the interest rates in various banks and private finances. If you go for private lenders then better to go with one who has been in this business for many years.

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As far as you are not emotionally linked to your gold ornaments this is the best option. However nothing like this can help you during your difficulties and with the fall of dollars and euro many think gold is the only safe thing left.

3.3.5 Documents required For Gold Loan 

Identity proof such as passport, voters ID or driving license.

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Address proof such as electricity bill, ration card, telephone bill etc.

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For signature proof you need to submit your passport copy, driving license or any other document with your sign.

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2 passport size photographs.

3.3.6 GOLD LOAN SCHEME Gold Loan Schemes can be categorized based on the purpose of lending. Banks usually offer lower rate of interest for agricultural gold loans which are offered to farmers and people engaged in agriculture for meeting their farming expenses. 

Agricultural Gold Loans: These are loans extended to farmers and agriculturists against gold ornaments to provide them finance for crop production expenses and investment purpose in agriculture or allied agricultural activities. Key Features of such loans are: o

Evidence of farming activity in form of proof land records is required

o

Written undertaking by the borrower on the purpose for which he intends to use the loan is required. Banks may also monitor the end use of such loans

o

Loans extended for agriculture are categorized under priority sector lending and are eligible for interest subvention scheme from government, which reduces the interest cost to the borrower

o

These loans are allowed generally for a maximum period of 3 years

o

Some banks also offer the option of overdraft facility on such loans

o

Interest Rate on agricultural gold loans ranges from 8.00 to 10.00 %

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Non Agricultural Gold Loans: Loans extended to all other categories of borrowers excluding farmers and agriculturists are known as non agricultural gold loans. These loans are available to all individuals including salaried, self employed professionals, businessmen, women, females, housewives, students, retired officials who own gold and want to pledge the same to get loan. The features on non agricultural gold loans have been explained under the loan schemes by repayment options.

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Bullet Repayment: This is one of the most popular repayment option offered by banks and NBFCs, where the entire principal amount is repaid at the end of the tenure. This repayment option is more prevalent for shorter tenure jewel loans of less than 6 months, as this allows the borrower to utilize all borrowed funds for the required purpose and hence, save them from the burden of repaying principal every year. Key Features of such schemes are: o

Loan amount is repaid at the end of the tenure

o

Interest is calculated on a monthly basis, with an option to pay interest only EMIs every month, where you pay monthly interest in the form of EMIs

o

Some banks allow a lower LTV of 65% on such schemes compared to maximum LTV of 75% on other loan schemes.

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EMI Scheme: Though not very popular earlier, this scheme is increasingly being offered to jewel loan borrowers. Borrowers are required to pay monthly instalments or monthly EMIs to banks. This scheme is especially popular for longer tenure gold loan schemes with greater loan amounts. Key Features of such schemes are: o

Lowest EMI for a Rs 1 Lakh loan is Rs. 2,560 at the lowest gold loan interest rate of 10.50% and maximum tenure of 4 years.

o

Attractive LTVs of upto 75%

o

Banks call for 6 months PDCs for EMIs. Some banks exempt the borrowers from PDC requirement for larger ticket size loans

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Overdraft Scheme: This schemes is especially designed for businessmen and self employed who have fluctuating requirement for funds. The overdraft scheme allows the borrowers to withdraw any fund requirements or deposit any surplus in an overdraft requirements within a pre approved credit limit. Interest is charged only on the utilized portion at any given point of time. Key Feature of such schemes are: o

Has an overdraft facility that allows deposit and withdrawal of funds during loan tenure

o

Interest expenses are minimized as it allows the borrower to deposit funds in the account when he has surplus funds

o

Available on all ticket sizes, though will be more suitable for relatively larger ticket size loans

o

Also comes with an option to renew the limit at the end of the tenure by paying processing fees.

3.3.7 GOLD LOAN INTEREST RATE CALCULATOR Interest rates are charged on the borrowed loan amount for the loan tenure. Lowest interest rate on gold loan is 10.50%. Interest rate to get loan against gold depends on multiple factors Loan amount – This is the amount borrowed by the borrower from a bank. Generally, interest rate are high for smaller loan amount and vice-versa. Loan to Value Ratios - Banks charge higher interest on gold loan with high LTV ratio. Hence, higher the loan to value of jewellery, higher the interest rate and vice versa. Relationship with the Bank - Banks offer lower rate of interest on jewel loan for their existing account holders with a quick turnaround.

3.3.8 Types of Banks Offering Gold Loans In India, there are many banks and non-banking companies which offer customers loans against gold. Most banks and lenders also offer multiple gold loan schemes to allow

customers to avail gold loans as per their requirements. Some of the top banks which provide loans against gold are listed as follows: 1.

ICICI Bank – Provides gold loans under the EMI Scheme at an interest rate ranging between 12 % to 16.50%.

2.

State Bank of India – The nation’s largest public sector bank provides loans against gold at 2.50% above the base rate of 9.85%. The current rate of interest for loans against gold ornaments (demand loan) is 12.50%.

3.

Axis Bank – Provides loans against gold under the EMI Scheme and the Bullet Repayment Scheme. The bank provides loans against gold at interest rates between 14.50% up to 17 %.

4.

Muthoot Finance – One of the very first companies to introduce the facility of gold loans in India, Muthoot Finance provides multiple gold loan schemes with differing rates of interest and tenures. The interest rates for the various gold loan schemes range from between 12% and up to 24%, for loans featuring different time periods.

5.

Punjab National Bank – Provides gold loans under the Bullet Repayment Scheme, EMI Scheme and the Overdraft Scheme. The interest rates for this loan range between 11.10% to 12.10%.

6.

Manappuram Finance Limited – One of India’s highest credit rated companies, Manappuram Finance also offers customers a variety of gold loan schemes like the EMI scheme and Bullet Repayment Scheme. Interest rates for Manappuram Gold loans range between 12.00% to 26.00%.

7.

IndusInd Bank – Provides gold loans against gold at interest rates ranging between 13.50% to 15.50%.

8.

Canara Bank – Canara Bank offers the Swarna Loan (loan against gold) to its customers under the Bullet Repayment Scheme at 3.10% above the base rate of 9.65%. The applicable interest rate is 12.75%.

9.

HDFC Bank – Offers the Sampoorna Bharosa gold loan, a highly affordable gold loan which can be availed at any HDFC bank branch. This gold loan comes with very convenient terms and is offered at an interest rate ranging between 6.70% to 15.65%.

10.

Federal Bank – Offers two different types of gold loans under the Overdraft Scheme and the Bullet Repayment scheme. The interest rates applicable on these gold loans range between 13.00% to 13.50%.

3.3.9 Gold loan benefits :Indian’s love for gold in known to the world. We are the biggest importers of gold in the world. Gold is not only the store of value but has also seen good amount of capital appreciation over the decade. But did you know that you can use this gold to fund your emergency cash requirements such as medical emergency, child education, business expansion, down payment for the purchase of vehicle and holiday with your family. If you are in a dire situation and need cash urgently, you can utilize the ideal gold lying in your locker to fund the emergency cash requirement. Many banks and non-banking financial companies (NBFCs) offer gold loans. These loans are one of the quickest and hassle-free ways of getting instant cash. You can get the loan against the gold in any form whether jewelry, gold coins, bars and biscuits. BENEFITS OF GOLD LOAN :

Faster processing: – As the gold loans are backed by physical gold, the bankers are generally more than happy to give loan. Lending against gold is safe for the banks as they have the option to sell the gold in case you default, therefore banks generally disburse the loan in few hours. This is because the processing time is less.

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Option to pay interest only: – Gold loans have a unique feature where the borrower has the option of paying just the interest part and the principal amount can be paid at the time of the closing of the loan.

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Lower interest rate: – As these are secured loans banks charge a lower interest rate compared to unsecured loan such as personal loan. The interest rates are generally in the range of 13 to 14% while personal loan generally starts with an

interest rate of 15%. Also, if you attach another security as collateral, the gold loan interest rate can be reduced further. 

No processing fees: – Many NBFCs and banks don’t charge processing fees as these loans are given instantly in lieu of gold which is held as collateral with the lender.

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Low or no foreclosure charges: – Some of the lenders don’t charge any prepayment charges while some of the banks do charge a prepayment penalty of 1%.

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No-income proof required: – Generally lenders don’t ask for income proof as the loan is secured against the gold to keep with the bank.

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Bad credit history not an issue: – Unlike other loans where the loan amount is given depending on the repayment capability and credit history, the case is different in case of gold loan. As the gold is used as collateral, the lenders are not worried about the principal component and thus don’t check the credit history of the borrower.

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Safety of gold: – The onus of the security of the gold lies with the lender. It will remain safe in its vault, you don’t have to worry about that. After you repay the loan you will get your gold back.

3.3.10 Ways Gold Loan Proves To Be The Best For Your Financial Needs : There are several types of loans available for people today. Among these, personal loans, education loans, car loans, property/home loans are the most popular. And along these options, you can even get loan against precious metals you own, especially gold. Banks and NBFCs are eager to provide gold loan because most of us Indians posses gold in form of jewellery and as the gold ornaments see a good amount of capital appreciation over years, it is considered as secured asset for providing a loan on.

Taking a loan against gold from NBFC or bank provides you instant cash for most of the immediate expenses such as a quick family holiday, vehicle purchase, medical emergency etc. Here we list to you top 10 benefits of taking a gold loan from financial institutions via loanbaba.com. 1.

Instant Processing and Disbursal

You submit the gold jewellery to financial institution; the bank/NBFC evaluates it and credits the loan amount to your bank amount. The gold is kept with the lender as collateral until the loan is repaid. Value determination of gold is conducted on spot by an expert so that you get the funds within a few hours, sometimes as less as 45 minutes, thus cutting down the processing and fund disbursal time. 2. Fulfils Your Short-term Financial Needs/Goals The repayment tenure of the loan starts from 6 months and is up to 2 years, which means, you can close the loan sooner than most of other loans. It also means that loan against gold can fulfil short-tem financial needs and goals. For long-term needs, you can contact loanbaba for a suitable loan type and scheme. 3. You can Borrow in Thousands and Lakhs Normally a personal loan or business loan is not offered if the amount needed is lower than Rs.1 lakh. But, if you choose gold loan, you can borrow anywhere between Rs.50,000 and Rs.50 lakhs or maximum up to 75 percent of the gold‘s current value. Thus, your gold assets can provide for both small and huge financial requirements. 4. Your Gold is Safe and Secured The financial institution offers triple layered security for gold ornaments you submit as collateral. Your gold will be kept secured in bank vault throughout the time and when you repay the loan in complete, you get the jewellery back. 5. You Can Use the Loan Amount for Any Purpose Many take the loan for investment, educational and medical expenses, business needs, marriage expenses etc. There is no restriction on the end purpose of the loan. You can use the amount to fund an essential purchase, home repairs, vacation, just about anything as long as the purpose is legit and not illegal.

6. Basic Documentation Only, No CIBIL Score While personal loan and other loans mandate the financial institution to check on CIBIL score, your income, income tax returns etc, for gold loan, you have to just provide basic documents such as identity proof and address proof etc along with your passport size photographs. 7. Easy Eligibility Criteria If you are above 18 years of age, you are eligible to apply for the gold loan. Other loans are usually offered to people who are of at least 21 years of age. The approval of gold loan application depends not on your credit score, repayment history, but the value of the gold ornaments you have. The loan is available for everyone (salaried, businesspersons etc.), which means even homemakers can apply for the loan, as long as they have a good repayment capacity. 8. Lower Interest Rates Financial institutions charge a very low interest rate for loan against gold as compared to unsecured loans. As the bank/NBFC keeps your gold jewellery as collateral in hand, it does not have to worry about recovering the principal loan amount in case you default at loan repayment. Some banks can offer rates as low as 10.5%, while personal loans start at interest rate of 11.49%-12% and higher. 9. Flexible Repayment Options and Lower Monthly Outflow Generally for any other loan, the EMI consists of both the interest and principal component of the loan amount. But, with gold loan, you just have to pay the interest amount on the loan until the loan tenure. You pay the principal amount borrowed when the loan tenure comes to an end. 10. Special Gold Loan Schemes Government has announced special gold loan schemes for women and agriculturists. Thus, you can contact the financial institution with which you applied for the loan, for any special scheme for gold loan that you may be eligible for. Loan against gold is offered at discounted rates to many. Special schemes of this loan are also available for businesspersons and small and medium sized firms.

Gold loan is one of the most affordable credit facilities that you can use for financial emergencies. Since gold assets always appreciate in value, it helps lenders to trust you and provide you a loan on the jewellery. You can apply for loan against gold on our website and get funds the same day.

3.3.11 Different Ways of Repaying Your Gold Loan Gold ornaments are not only a piece of jewellery. They are a form of backup which have the power to rescue you from financially tough times. One of the quickest and easiest ways through which your gold ornaments can help you is if you avail a loan against them. Loans availed by pledging your gold ornaments with a lender are called Gold Loans. You would have read about or seen a representation of such gold loans in books and films where gold ornaments were handed over as collateral to a moneylender and then he/she gave the borrower the much-needed cash. This traditional way of lending-borrowing gold ornaments have transcended into the modern financial ecology and now gold loans are being provided by all major public and private sector banks and non-banking financial institutions too. There are other loans, similar to gold loans in the market. These loans fulfil a similar purpose of providing the borrower desired cash without much hassle. They are personal loans and credit card loans. All of, gold, personal and credit card loans have various advantages and disadvantages. However an area where gold loan scores above them is that it is always a secured loan i.e. availed against collateral, in this case, gold ornaments. Precisely due to this reason it is easy to pay off gold loans since the collateral enables the lenders to grant you the loan at lower interest rates in comparison to the interest rates of personal loans and credit card loans. Gold loan applications are also comparably quickly processed and require minimal documentation. Since gold loans are easier to process and grant, lenders including banks and non-banking financial companies have come up with 4 types of gold loans by altering the way they are repaid. Let’s find out more about them below:-

1. Pay Interest as EMI & Principal later: Through this option, you can repay the interest amount as per the EMI schedule of the gold loan however the principal amount borrowed is to be paid, in full, at the time of maturity. Such an arrangement works wonders for most borrowers as throughout the loan tenure one is liable only to pay the interest and not worry about principal repayment. 2. Make Partial Payments: Make partial payments of both interest and principal amounts as and when you desire. Conforming to the EMI schedule is not important in this kind of gold loan repayment schedule. Now this is a customercentric approach for gold loan customers! Partial or even complete payment of both the interest and principal components is allowed irrespective of the pre-set EMI schedule. If you repay your principal initially, then your total interest payout, which is usually calculated daily on amount of loan outstanding, is bound to reduce. This way you can save on a lot of serviceable interest. 3. Bullet Repayment: In the Bullet Repayment method, you have to repay the entire amount of both the principal and interest amount at the end of the loan’s term. Yes, you heard it right! No need to pay principal and interest during the loan tenure! Just pay the entire amount after your loan is finished. You need not service EMIs in this type of gold loan; just pay the entire due amount at the end of the term in a single shot, hence the term bullet repayment. Moreover, in this repayment mechanism, interest is calculated each month however its payment (along with principal repayment) becomes due only at the end of the term. 4. Regular EMI option: Catered towards the salaried class, the regular EMI Gold loan is developed for those who have cash inflows to their bank accounts monthly. Here the EMI amount includes both interest and principal amount pay-outs. Granting this loan is also a quick process since it is going out to salaried applicants. You can pre-pay most gold loans as and when desired as most of them do not have prepayment penalty or a minimum lock-in period. Gold loans have short repayment

tenures, most with tenure of a maximum of 5 years and with an average tenure of 1 year or less. When you visit the lender to close your gold loan account, you will have to deposit the outstanding loan principal amount with updated interest amount and then the loan account will stand closed. Once the closure of loan account is confirmed, the concerned authority (mostly bank branch manager) will hand back the collateral gold to you and obtain your acknowledgement. And so it will be an end of it, the gold jewellery which not only provided you with much-needed cash at a time of financial urgency will again be at your service, shining with eternal glow and mesmerizing beauty to embrace your ownership.

3.3.12 Factors while taking a gold loan :1.Purpose and tenure of loan: Gold loans are generally short-term loans, with maximum tenure generally being 12 months. Hence you must borrow only if you are sure you can repay during this term. Else, your gold may be auctioned by the lender. Also, it is not advisable to take a gold loan for speculation or for other risky purposes. 2. Interest rates and other charges: Interest rate on gold loan is generally higher than other forms of loan, especially if taken from a NBFC. Hence, explore if you can meet your needs from other sources. If not, you can take a gold loan, but remember to repay it within the specified tenure. Also consider other charges such as processing fees and prepayment charges when you take a gold loan. 3.Loan amount: The maximum amount of loan varies from one lender to another, with NBFCs usually having a higher range of loan amounts. Product variations are also higher in an NBFC. Remember that you will not receive the entire value of gold as a loan, as the lender retains a margin amount. Understand the valuation methodology adopted by the lender, as this also determines the amount of loan you can avail.

4.Understand repayment terms: Repayment structure differs depending on the lender. Some lenders allow payment of principal at the end of the tenure, while some require repayment in the form of EMI, where both interest and principal are repaid during the loan tenure. Enquire these details before you finalise the lender.

3.3.13 CONSEQUENCES FOR NONPAYMENT OF GOLD LOAN:Notices & reminders by Bank: This is the first step taken by the lenders i.e., Bankers or NBFC's. where lender sallow one or two payments to slip, which they call them as late payments. But if borrower fails to pay EMI even in the third month , Bankers or NBFC's send notice to the borrower under SARFAESI Act.,2002. If he fails to pay for more than 90 days then it is treated as NPA(Non Performing Assets), this closes all the options for borrower for further future actions. 

Legal actions: If the borrower doesn't respond to Bank notice then legal actions are taken. lenders send legal notice to borrower and even asks to contact the collateral in case the borrower is not responding.

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Penalty: Generally Banks/NBFC's impose penalty on the late payments, this happens in case of unsecured loans where the lenders doesn't have any option to recover from collateral.

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Asset /Collateral(GOLD):This is the last thing which gets affected by nonpayment of EMI's. If the borrower is not responding to any of the above actions, to repay loan, the last option left to the lenders. As gold ornaments are the collateral in this case , ownership goes/shifts on to the lender where later lender can sell the collateral through auction & recover the loan amount.

CHAPTER : 04 REVIEW OF LITERATURE A literature review or narrative review is a type of review article. A literature review is a scholarly paper, which includes the current knowledge including substantive findings, as well as theoretical and methodological contributions to a particular topic. Literature

reviews are secondary sources, and do not report new or original experimental work. Most often associated with academic-oriented literature, such reviews are found in academic journals, and are not to be confused with book reviews that may also appear in the same publication. Literature reviews are a basis for research in nearly every academic field. A narrow-scope literature review may be included as part of a peerreviewed journal article presenting new research, serving to situate the current study within the body of the relevant literature and to provide context for the reader. In such a case, the review usually precedes the methodology and results sections of the work.

4.1 REVIEW OF LITERATURE ON GOLD LOAN :1. Misha Sharma “STUDY OF GOLD LOAN MARKET AS AN ALTERNATIVE SOURCE OF CREDIT FOR LOW INCOME HOUSEHOLDS” :- The study adopts a holistic approach to understand the gold loan market by gaining perspectives from both the demand and supply side of the gold loan sector. A survey was conducted among informal and formal clients of gold loan market to understand the difference in the characteristics of these clients. An attempt was also made to find the reasons for preference of unorganised over organised service providers and vice versa. Results suggest that there are significant differences between formal and informal clients in terms of socio- economic indicators. Formal clients were found to be economically much more stable, had less outstanding debt and fared better in reading tests than informal gold loan clients. It was also found that the primary factor leading to a choice of a given financial institution is ‘proximity to home’. This shows that people prefer convenience over 15 any other structural benefit of the gold loan product itself. Therefore, interest rate, loan to value ratio, customer service, etc. does not matter much as long as the financial service provider is located closely to the client’s place of residence. According to the data gathered, gold loan was mostly acquired for consumption soothing purposes; however, it was also observed that the source of loan varied according to the purpose for acquiring loan. Lastly, we explored reasons as to why people buy gold and the results suggest that people view gold as an insurance that helps in safeguarding their future against uncertainty. Gold loans in India have been in existence for centuries now in the form of pawn shops delivering quick and easy access to loans against gold as collateral. Until a

couple of decades ago, gold loans were delivered only through the unorganised sector by private money lenders and pawn brokers. However, with the entrance of formal financial institutions in the gold loan sector, the market dynamics changed completely as they introduced innovative gold loan products at cheaper costs and better customer service. While it is true that high demand for gold burdens the current account balance by increasing deficit, the fact that gold is the most valued asset among Indians, cannot be neglected either. Over the years, gold has become an inseparable part of the Indian society, as it not just holds an emotional value but is also used for various other financial purposes like savings, investment and insurance. This fact is more so true in the context of rural India, which accounts for 65% of the total gold stock9. Therefore, curbing demand for gold and gold loans should be complemented by introducing innovative financial products that can act as a substitute for gold loans. Gold loans are more than just a conduit for credit- they also act as a delivery mechanism that helps progress the lives of some of the poorest households and policymakers needs to be sensitive to these realities. 2. S.Shankarii “A Study On Awareness and Satisfaction Level of Gold Loan Credit Facility by Non Banking Financial Companies”:- From the study it can be concluded that the demand for gold as an investment is gaining momentum among consumers, the investment pattern shows that in the last three months gold was a major investment haven for consumers ,portrays the non-risk taking behavior of consumers. ‘Price’ is the most important factor among consumers when deciding to buy gold. It is interesting to note that gold is purchased in more quantity when price is slashed down. This makes it clear that gold is price sensitive at low prices but it is insensitive to price increase, As the investment pattern is increased it is treated as liquidity for any emergency purpose of all levels of income of people. This finding has a lot of implications when authorities formulate policies to curb consumption of gold. The gold loan has to be limited and regulated by the Reserve bank of India and the rural banks have to be monitored by the committee. As one side the India is moving towards the investment and other moving towards the creditability of that asset. A price insensitive customer is not influenced by the price of a product when deciding whether or not to purchase it. This study is a slightly different case of consumer behavior. People tend to buy gold regardless of its price

because it is an essential commodity; a costly essential commodity as opposed to the Indian Finance Minister’s take on gold that it is a costly non-essential commodity. 3. Eritriya Roy “THE CONCEPT OF GOLD LOAN IN INDIA” :- For borrowers, gold loans have emerged as one of the best means of raising quick, short-term capital. For lenders, gold loans are more advantageous compared with home and car loans because of the shorter tenures, lower processing time and cost, and greater returns due to higher interest rates. These factors, along with appreciation in value of gold, have led to an explosion in the gold loan market. The organized sector is challenging the large unorganized gold loan market dominated by pawnbrokers and moneylenders, with NBFCs leading the pack due to simpler approval and disbursal processes, flexible products and better accessibility. Further expansion in the organized sector is required. When expanding, firms need to ensure consonance of services and operations throughout the network. Also efficient tracking of borrower accounts, process transparency and minimization of operational costs are essential. Firms need to manage risks related to possible sharp fall in gold prices and non-adherence of regulatory norms and also need to ensure that physical assets are properly valued, stored and documented. Firms need to invest in technology to better manage the increasing volumes and to reduce risks. Provision of accurate real-time information will lead to faster decision making and reduced turnaround time for loan disbursals. 4. GEETHA G.NAIR & DR JANCY DAVY “ A STUDY ON THE ATTITUDE TOWARDS GOLD LOAN” :- For borrowers, gold loans have emerged as one of the best means of raising quick, short-term capital. Gold loans were preferred over conventional personal loans due to less procedures, fast disbursement and easy instalments. The study shows that the respondents preferred gold loans from the banks, and most of the respondents use the fund for their consumption smoothing. 5. M.S. Sibi “Borrowers’ Perspective towards Gold Loan Protection Practices Followed By Banks and NBFCs” :- Gold loans business by NBFCs as well as Banks helps the marginal and vulnerable sections of society in meeting their necessary funding requirements. In view of the fact that the financial services should be made available to

the users at reasonable prices/charges in line with the objectives of fair practices code and financial inclusion, particularly for the financial transactions involved with low income group, the business practices followed by gold Loan Institutions needs to be monitored and reviewed.

4.2 REVIEW OF LITERATURE ON FEDERAL BANK :1. Panda J. and Lall G.S. (1991) in their research paper presented that improvement in profitability can be achieved through the development of certain internal management techniques. They concluded that productivity, deployment of funds, quality of advances, information system, organizational set up and branch expansion are the factors which influence the profitability of banks to a great extent. 2. Mishra M.N. (1992) in his study, made an attempt to discuss the profitability of scheduled commercial banks in India on the basis of the interest and non-interest income, interest and non-interest expenditure, man power expenses and other expenses. They further stated that the profitability of the commercial banks have declined on account of the growing pre-emption of funds in the form of SLR, CRR, acceleration in the expenses as compared to the total income, acceleration in advances and total investment than interest income. 3. Chandra M. (1992) in her study entitled “On Increasing Profitability of Public Sector Banks” observed that the role of public sector banks was significant in the field of mobilisation of resources and economic growth of the economy, but still, they are getting stepmotherly treatment and discrimination. They further narrated that inspite of having huge working funds, PSBs were not be able to show better results owing to high cost of operation because of priority sector advances and increase in branch network in the rural areas - the percentage being 56 percent. 4. Vijaya Walia (1992) in his article entitled “Computers in Indian Banks” focused on the causes of falling profitability and customer services in banks. The study pointed out that the manual accounting system used in banks is the main cause for the problems such as error in posting, maintaining a large number of ledgers, delayed posting in the books of

accounts etc., The study suggested that all the banks should resort to computerization for overcoming the problems and for quick disposal of customer demands. 5. Bhattacharyya (1997) by using the technique of data envelopment analysis (DEA) analysed the data of 70 Indian commercial banks from 1986 to 1991 and found that publicly owned Indian banks are the most efficient among all ownership categories considered in the study, followed by foreign-owned banks and Indian private banks respectively. However, they also found something odd (and almost diametrically opposite) when the inter-temporal behaviour of such performance was considered. Evidence of temporal improvement was seen in the performance of foreign-owned banks, virtually no such trend is found in Indian private banks and a temporal decline in that of the publicly owned banks. They explained these patterns in terms of the government's evolving regulatory policies. 6. The study by Ahmed A. and Khababa N. (1999) assessed the financial performance (profitability) of commercial banks in Saudi Arabia. The author employed a regression model to test the effect of business risk, concentration and market size on the profitability of the bank, measured in terms of Return On Assets (ROA) and Return On Equity (ROE), and Earnings Per Share (EPS). The author used both time series and pooled time series data for the analysis. The empirical results generated from three models showed that business risk and the bank size were the main variables which determined bank’s profitability. 7. Barr (1999) evaluated the productive efficiency and the performance of the US commercial banks over the period 1984-98 using a constrained multiplier, input-oriented DEA model. They found that the relationship between efficiency of inputs and outputs is strong and consistent, as well as independent measures of bank performance. They also discovered that the impact of varying economic conditions is mediated to some extent by the relative efficiencies of the banks that operate in these conditions. In recent years, changes in the regulatory environment, huge growth in off-balance sheet risk management financial instruments, introduction of e-commerce with on-line banking, and significant financial industry consolidation have made the US banking industry highly

competitive. The bank examiner ratings determine that there is a close relationship between efficiency and soundness. 8. Das (1999) also opined that there is convergence in the performance of different bank groups in India. The report on the committee on Financial Sector Assessment (CFSA) noted that ‘the relatively higher productivity ratios of new private sector banks and foreign banks in terms of business per employee could be due to increased mechanisation, lower staff strength and increased outsourcing activities as compared to PSBs. PSBs have a legacy of labour intensive work procedures and greater penetration in rural, areas which also result in comparatively low business per employee (RBI 2009). 9. The research study by Ganesan (2001)examined the determinants of profitability of Public Sector Banks in India by an empirical estimation of profit function model. The study showed that interest cost, interest income, other income, deposit per bank, credit to total assets, proportion of priority sector advances in interest income were the significant determinants of profits and profitability of Indian Public Sector Banks. Also, the average establishment cost positively contributed to the profitability but adversely affected the net profit of the Indian Public Sector Banks. 10. Wahab A. (2001) has analysed the performance of the commercial banks under reforms. He also highlighted the major issues that are to be considered for further improvement. He concluded his study by stating that the reforms have produced favourable effects on the performance of commercial banks in general. However, there are some distortions like low priority sector advances, low profitability etc., that needs to be reformed further to enhance the profitability of the banking sector in India. 11. “Assessment of India’s Banking Sector Reforms from the Perspective of the Governance of the Banking System” by Sayuri Shirai (2001) stated that the financial reforms have had a moderately positive impact on reducing the concentration of the banking sector (at the lower end) and improving performance. The empirical estimation showed that regulation (captured by the time variable) lowered the profitability and cost efficiency of public-sector banks at the initial stage of the reforms, but such a negative impact disappeared once they adjusted to the new environment. In line with these results,

the study showed that profitability turned positive in 1997-2000, cost efficiency steadily improved over the reform period and the gap in performance compared with foreign banks has diminished. Moreover, allowing banks to engage in non-traditional activities has contributed to improved profitability and cost and earnings efficiency of the whole banking sector, including public-sector banks. In contrast, investment in government securities has lowered the profitability and cost efficiency of the whole banking sector, including public-sector banks. Lending to priority sector and the public-sector has not had a negative effect on profitability and cost efficiency, contrary to our expectations. Further, foreign banks (and private domestic banks in some cases) have generally performed better than other banks in terms of profitability and income efficiency. This suggested that ownership matters and foreign entry have a positive impact on banking sector restructuring. As 10 years have passed since the reforms were initiated and publicsector banks have been exposed to the new regulatory environment, it may be time for the government to take a further step by promoting mergers and acquisitions and closing unviable banks. A further reduction of SLR and more encouragement for non-traditional activities (under the bank subsidiary form) may also make the banking sector more resilient to various adverse shocks. 12. Alias (2002) analyzed the efficiency and productivity of Indonesian commercial banks from 1991 to 1999 using the DEA and the Malmquist productivity index. They explained that, although there was a decline in productivity in 1997, due largely to the financial crisis, the technical efficiency and productivity still grew at the frontier over the period. They also stated that the level of efficiency and productivity of the bank is not really reflected by the structure of the commercial banks (in terms of asset sizes and total loans). Regarding the technical efficiency results, respective banks need to manage their inputs and to avoid wastage thereby increasing the efficiency as to the bank assets. 13. Mr.Bheemanagouda (2002) in his article “Performance Appraisal of Commercial Banks”, stated that sound and vibrant financial system of a nation is a moving force towards the economic development. The development of innovation culture both at the product level and the process level is a prerequisite for survival of the banks. It is high time for the banks to adapt changes and skills to meet the challenges and to exploit the

opportunities by appraising their past activities and performance. Acquisitions and mergers have made markets highly competitive. Advancement in information technology has brought about the market at fingertips. By realizing all these developments, banks have to overcome the technology lag as immediately as possible. A shift from traditional activities to technology-based activities is the dire need of the hour. Banks must look for new lucrative avenues such as housing and merchant banking, focus on fee-based activities and should strive hard to provide facilities in all the days and round the clock. Retail banking is a green pasture before the bankers and ‘Customer Delight’ is a crucial challenge. Banks should adapt the skills and develop expertise in credit assessment, risk management and capitalize on the opportunities provided by liberalization and globalization to meet the challenges. Finally, the performance of the banks cannot be measured in absolute terms of profitability and banking network. It is also very much important to achieve social goals along with the economic goals to alleviate poverty. 14. Grigorian and Manole (2002) applied DEA to bank level-data from a wide range of transition countries to measure the efficiency of commercial banks by stressing profit maximization and provision of transaction services as banks' primary objectives. The DEA results imply that the banking sector with a few large and wellcapitalized banks has more chances to generate better efficiency and higher rates of intermediation. They argued that it was necessary to model various types of functions performed by banks and control the inputs necessary to provide a certain level of utility to owners (profits) and depositors (services) in order to fully assess the efficiency of commercial bank operations. They also asserted that privatization of banks does not guarantee significant improvements in efficiency

4.3 REVIEW OF LITERATURE ON STATE BANK OF INDIA :1. Domar and Timbergen (1946)', measured the profitability of banks for the economic development purpose and settled the theoretical framework in expanded form which was first introduced by Jorgenson and Nishimizudin for international economic growth comparison and development.

2. Sharma (1974) said, "The expansion of banking facilities was uneven and lopsided and banks were concentrating their operations in metropolitan cities and towns. A fairly large number of rural and semi urban centre with reasonable potentialities of growth failed to attract the attention of commercial banks. As far as the deposit mobilization in the rural areas is concerned, much remains to be done."This gives emphasis on the rural and semi urban growth of banks. 3. Gopal Karkal(1977) said, "Some regions have done well in spreading the banking facilities, while some regions have still very backward. Further, our clients are larger merchants and big industrialists. They approach with their demand for larger loans and advances, and in return give large business. If we transfer our limited resources to small industry, agriculture etc., how can we increase our deposits, advances etc., and how can we survive." As it give emphasis on a policy of planned and systematic branch expansion laying stress not only on opening branches in the underdeveloped and neglected areas but also in the providing additional banking facilities to the growing metropolitan and Chapter 1 Introduction urban areas to cope with the ever-increasing requirements of trade, industry and commerce is more desirous. 4. Raghupathy (1977), gave his view on the system of banking sector that "if the objectives are not fully achieved, the fault does not lie entirely with the bankers. The fault lies in our, not being able to integrate all powerful instruments of development into an effective system". 5. Shah (1977) gave his view regarding bank profitability and productivity. He has expressed concern about increased expenses and overheads. Slow growth in productivity and efficiency is due to wasteful work of the banks. He concludes that the higher profitability can be result from increased spread and innovations have a limited role. He favored written job descriptions for improvement of staff productivity. He also emphasized reduction of costs, creation of a team spirit improvement in the management for improving bank profitability and productivity. 6. V.N. Saxena(1978) analsyed that "Improvement in the systems and procedures of inspection of stocks, maintenance of stock register is required. Reforms should be

initiated in extension of sponsorship schemes, recovery, and consultancy". This can be supporting tools for banks. 7. Desai (1978), conducted a study entitled "Measuring Staff Productivity in Bank - A New Approach" in 1981, covering a regional office of a premier bank having 155 branches in the region. Primary objective of the study was to detect and correct staffing Imbalances. The study emphasized on providing for the management of productivity related staff development technique. He followed it up with another study of Patna Circle of the bank having 607 branches, in 1982. The main objective again was to provide management with the productivity based technique for rational manpower development. It identified 'Labour Intensive and Less Labour-Intensive' banking sector and identified pockets of staffing imbalances. He felt that a services industry like banking with wide variations in work mix, a universally applicable and fully scientific formula is difficult to involve in any area of management. 8. Divatia and Venkatachalam (197, in their study of operational efficiency and performance. They recognized the problems in creating such a composite index, some of which will be due to understanding of the term: operational efficiency. This study divided the chosen indicators into operational efficiency in terms of productivity, operational efficiency in terms of social objectives, and profitability. The approach was taking to the approach profitability of banks proposed to create a composite index that would explore certain indicators that would suitably represent varied aspects of banks of PEP Committee. 9. Kulkarni (1979)examined his study on developmental responsibility and profitability of banks stated that while considering banks costs and profits-social benefits arising out of bank operations cannot be ignored. He claimed that profit maximization approach is out of place while referring to profitability of banks. He recognized that while fulfilling the social responsibility, banks should try to make the developing business as successful as possible, to reduce costs, improve banking system and increase the overall productivity.

CHAPTER : 05 DATA ANAYLSIS AND INTERPRETATION Data analysis is a process of inspecting, cleansing, transforming, and modeling data with the goal of discovering useful information, informing conclusions, and supporting decision-making. Data analysis has multiple facets and approaches, encompassing diverse techniques under a variety of names, while being used in different business,

science, and social science domains. In today's business, data analysis is playing a role in making decisions more scientific and helping the business achieve effective operation. Data interpretation refers to the implementation of processes through which data is reviewed for the purpose of arriving at an informed conclusion. The interpretation of data assigns a meaning to the information analyzed and determines its signification and implications. The importance of data interpretation is evident and this is why it needs to be done properly. Data is very likely to arrive from multiple sources and has a tendency to enter the analysis process with haphazard ordering. Data analysis tends to be extremely subjective. That is to say, the nature and goal of interpretation will vary from business to business, likely correlating to the type of data being analyzed. While there are several different types of processes that are implemented based on individual data nature, the two broadest and most common categories are “quantitative analysis” and “qualitative analysis”. Q1. ARE YOU AWARE ABOUT GOLD LOAN ? OPTION

NO.OF RESPONSES

PRECENTAGE (%)

YES

25

50 %

NO

25

50 %

TOTAL

50

100 %

Object 3

Object 5

ANALYSIS :- From the above table it is clear that 50% of the respondent are aware about gold loan and 50% of the respondent are not. INTERPRETATION :- From the above pie chart and graph we can see that equal no. of respondent are aware as well as unaware about gold loan.

Q2. HOW DO YOU COME TO KNOW ABOUT GOLD LOAN ?

OPTION TV NO.OF 5 RESPONSE PERCENTAGE(%) 10 %

WALL PAINTING

NEWSPAPAER

BANNERS FRIENDS AND RELATIVES

4

10

5

26

8%

20 %

10 %

52%

Object 7

ANALYSIS :- From the above table it is clear that 10% of respondent are aware because of TV and banners, 8% of respondent are aware because of wall painting, 20% of respondent are aware because of newspaper, 52% of respondent are aware because of friends and relatives.

INTERPRETATION :- From the above graph it is clear that majority of respondent are aware only because of friends and relatives, some because of newspaper and very few are aware because of TV, banners, wall painting. Q3. HAVE YOU EVER DEAL IN GOLD LOAN ? OPTION YES NO TOTAL

NO.OF RESPONSE 35 15 50

PERCENTAGE (%) 70% 30% 100%

Object 9

Object 11

ANALYSIS :- From the above table it is clear that 70% of respondent deal in gold loan whereas 30% of respondent do not deal in gold loan.

INTERPRETATION :- From above pie chart and graph it is clear that majority of respondents deal in gold loan and very few deal do not deal in gold loan.

Q4. DO YOU WANT TO DEAL IN GOLD LOAN IN FUTURE ?

OPTION YES NO TOTAL

NO.OF RESPONSE 45 5 50

PERCENTAGE (%) 90% 10% 100%

Object 13

Object 15

ANALYSIS :- From the above table it is clear that 90% of the respondent are going to deal in gold loan in future whereas 10% of the respondent are are not going to deal in gold loan.

INTERPRETATION :- From the above graph and pie chart it is clear that majority of the respondent are going deal in gold loan and very few respondent are not going to deal in gold loan.

Q5. . WITH WHICH COMPANY YOU DEAL OR WISH TO DEAL ?

OPTION NO.OF RESPONSE PERCENTAGE

FEDERAL BANK 25

STATE BANK OF INDIA 7

HDFC FINANCE 10

OTHER

50%

14%

20%

16%

Object 17

8

Object 20

ANALYSIS :- From the above table it is clear that 50% of respondent prefer federal bank, 20% of respondent prefer HDFC finance, 14% of respondent prefer SBI, 16% of respondent prefer other. INTERPRETATION :- From the above pie chart and graph it is clear that majority of respondent prefer federal bank and remaining few respondent prefer HDFC finance, SBI and other.

Q6. WHICH OF THE FOLLOWING IS THE MOST PREFERABLE THINGS AT THE TIME OF AVAILING GOLD LOAN ? OPTION

RATE OF INTEREST

FLEXIBILITY

ANY OTHER

40

MAXIMUM PER GRAM RATE 4

NO.OF RESPONSE PERCENTAGE

4

2

80%

8%

8%

4%

Object 23

Object 25

ANALYSIS :- From the above table it is clear that 80% of respondent prefer rate of interest, 8% of respondent prefer maximum per gram and flexibility and 4% of respondent prefer any other for gold loan. INTERPRETATION :- From the above pie chart and graph majority of respondent prefer rate of interest for gold loan and very few respondent prefer maximumper gram, flexibility and any other for gold loan.

Q7. . ARE YOU SATISFIED WITH CURRENT DEAL ?

OPTION YES NO TOTAL

NO.OF RESPONSE 22 28 50

PERCENTAGE 44% 56% 100%

Object 27

Object 30

ANALYSIS :- From the above table it is clear that 44% of respondent are satisfied with current deal and 56% of respondent are unsatisfied with the current deal. INTERPRETATION :- From the above pie chart and graph it is clear that majority of respondent are unsatisfied with the current deal and very few respondent are satisfied with the current deal.

Q8. WHICH OF THE FOLLOWING ARE MAIN REASON OF SATISFACTION?

OPTION

RATE OF INTEREST

MAXIMUM RATE

FLEXIBILITY

OTHER

NO.OF RESPONSE PERCENTAGE

40

5

3

2

80%

10%

6%

4%

Object 32

ANALYSIS :- From the above table it is clear that 80% of respondent prefer rate of interest, 10% of respondent prefer maximum rate, 6% of respondent prefer flexibility and 4% of respondent prefer other for gold loan.

INTERPRETATION :- from the above graph it is clear that majority of respondent prefer rate of interest and remaining few respondent prefer maximum rate, flexibility and other factor for gold loan.

Q9. HOW FERQUENT YOU TAKE GOLD LOAN ? OPTION NO.OF RESPONSE PERCENTAGE

6 MONTH 15 45%

1-2YEAR 25 50%

3-4YEAR 10 20%

Object 34

Object 36

ANALYSIS :- From the above table it is clear that 45% of respondent take gold loan in 6months, 50% of respondent take gold loan in between 1 -2 year and 20% of respondent take gold loan in 3-4 year.

INTERPRETATION :- From the above pie chart and graph it is clear that mojarity of respondent take gold loan in 1-2year as compared to other.

Q10. WHAT AMOUNT OF GOLD LOAN YOU TAKE ? OPTION NO. OF RESPONSE PERCENTAGE

RS 10,000 – RS 50,000 10 20%

Object 38

Object 40

RS 50,000 – RS 1,00,000 26 52%

RS1,00,000 & ABOVE 14 28%

ANALYSIS :- From the above table it is clear that 20% of respondent take loan of Rs 10,000 – Rs 50,000, 52% of respondent take loan of Rs 50,000 – Rs 1,00,000 and 28% of respondent take loan of Rs 1,00,000 & above. INTERPRETATION :- From above pie chart and graph it is clear that majority of respondent take loan for Rs 50,000 – Rs 1.00.000 as compared to other.

Q11. ON WHAT BASIS YOU COMPARE GOLD LOAN OF PUBLIC BANK AND PRIVATE BANK ? OPTION NO. OF RESPONSE PERCENTAGE

RATE OF INTEREST

MAXIMUM RATE

FLEXIBILITY

OTHER

40

4

3

3

80%

8%

6%

6%

Object 42

ANALYSIS :- From the above table it is clear that 80% of respondent compare gold loan of private bank and public bank on the basis of rate of interest, 8% of respondent

compare gold loan of private bank and public bank on the basis of maximum rate, 6% of respondent compare gold loan of private bank and public bank on the basis of flexibility and other. INTERPRETATION :- From the above graph it is clear that majority of respondent compare gold loan of private bank and public bank on the basis of rate of interest charged on gold as compared to other basis.

Q12. . DO YOU HAVE ANY RISK IN GOLD LOAN ? OPTION YES NO TOTAL

NO. OF RESPONSE 5 45 50

Object 44

PERCENTAGE 5% 95% 100%

Object 46

ANALYSIS :- From the above table it is clear that 95% of respondent do not have risk in gold loan, but 5% of respondent face risk on gold loan. INTERPRETATION :- From the above pie chart and graph it is clear that majority of respondent do not have risk in gold loan but few respondent has to face risk in gold loan.

Q13. WHAT TIME PERIOD ARE GIVEN BY YOUR BANK TO REPAY GOLD LOAN? OPTION NO. OF RESPONSE PERCENTAGE

UPTO 1 YEAR 21 42%

2- 3 YEAR 19 38%

3 YEAR & ABOVE 10 20%

Object 48

Object 50

ANALYSIS :- From the above table it is clear that 42% of respondent get time period upto 1 year to repay the gold loan, 38% of respondent get time period of 2-3 year to repay gold loan, 20% of respondent get time period of 3 year & above to repay gold loan. INTERPRETATION :- From the above pie chart and graph it is clear that most of the respondent take gold loan upto 1 year and few respondent take more amount in form of gold loan for greater time period.

Q14. ARE YOU AWARE OF VARIOUS SCHEMES UNDER GOLD LOAN ? OPTION YES NO TOTAL

NO. OF RESPONSE 21 29 50

PERCENTAGE 42% 58% 100%

Object 52

Object 54

ANALYSIS :- From the above table it is clear that 42% of respondent are aware of various schemes under gold loan and remaining 58% of respondent are unaware of various schemes under gold loan. INTERPRETATION :- From the above pie chart and graph it is clear that majority of respondent are unaware of various schemes under gold loan and remaining are aware of the schemes.

Q15. HOW DO YOU RATE YOUR BANK SERVICES IN TERMS OF GOLD LOAN ? OPTION NO.OF RESPONSE

1 1

2 3

3 6

4 40

PERCENTAGE

2%

6%

12%

80%

Object 56

Object 58

ANALYSIS :- From the above table it is clear that 80% of respondent are satisfied with the service of their bank,12% of respondent & 6% of respondent are good with the service of their bank and 2% are having some problems. INTERPRETATION :- From the above pie chart and graph it is clear that majority respondent are satisfied with the service given by their bank in terms of gold loan.

CONCLUSION The study can be concluded by saying gold play a vital role in our day to day life as it is termed to be a liquid form of money which can be converted easily to cash . As per John Tamny, economist, H.C. Wainwright Economics “When the price of gold moves, gold’s price isn’t moving; rather it is the value of the currencies in which it’s priced that is changing.”Gold loan is take for short period of time in mostly to meet the the short term requirement. As gold loan are provided by various companies, thus there is a huge competition between companies on the basis of rate of interest, schemes, repayment period, loan amount etc. As per the research most of the respondent are unaware of gold loan. Most of the respondent prefer taking gold loan from private bank (federal bank) than taking from public bank (SBI) . As to stay in the competition companies need to bring changes in there gold loan policies, advertisement etc

SUGGESTION 1. There lot of benefits can be acquired due to gold loan and one can easily fulfill his/her requirements. 2. Customer should be aware of gold loan rate charged by different banks that is private bank and public bank.

3. Bank can adopt qualitative techniques to educate the borrowers regarding gold loan policies. 4. As to take a gold loan lot of paper work need to be completed so banks can improve new techniques to reduce the paper work and so that less time is being wasted. 5. It is better to take gold loan from banking institution than to take from NBFCs. Due to reliability, trustworthy. 6. Gold loan interest rate is comparative less than other loans.

BIBLIOGRAPHY BOOKS:  Kothari C.R. (1990) Research Methodology: Method and Techniques; WishvaPrakashan, NewDelhi.  Bodie.Z, Kane.A & Mracus.J: Essentials of Investments.  Prof. E Gordon & Dr. K. Natrajan “Banking Theory Law and Practice”.  “Indian financial System & Commercial Banking” by Khan Masood Ahmed  “Banking in India” by P.N.Varshney MAGAZINE:  Business World  Business Today  The Smart Manager WEBSITES:  www.centurionbop.co  www.statebankofindia.com  www.federalbank.com  www.rbi.org.in  www.iba.org.in

 www.knowledgestom.com  www.goldloan.com  www.loanandadvances.com

APPENDIX

QUESTIONNAIRE Q1. GENDER a. MALE

b. FEMALE

Q2. AGE GROUP a. O-18 b. 19-45 c. 46-70 Q3. ARE YOU AWARE ABOUT GOLD LOAN ? a. YES

b. NO

Q4. HOW DO YOU COME TO KNOW ABOUT GOLD LOAN ? a. b. c. d. e.

TV WALL PAINTING NEWSPAPAER BANNERS FRIENDS AND RELATIVES

Q5. HAVE YOU EVER DEAL IN GOLD LOAN ?

a. YES

b. NO

Q6. DO YOU WANT TO DEAL IN GOLD LOAN IN FUTURE ? a. YES

b. NO

Q7. WITH WHICH COMPANY YOU DEAL OR WISH TO DEAL ? a. b. c. d.

FEDERAL BANK SBI HDFC FINANCE OTHER

Q8. WHICH OF THE FOLLOWING IS THE MOST PREFERABLE THINGS AT THE TIME OF AVAILING GOLD LOAN ? a. b. c. d.

RATE OF INTEREST MAXIMUM PER GRAM RATE FLEXIBILITY ANY OTHER

Q9. ARE YOU SATISFIED WITH CURRENT DEAL ? a. YES

b. NO

Q10. WHICH OF THE FOLLOWING ARE MAIN REASON OF SATISFACTION? a. b. c. d.

RATE OF INTEREST MAXIMUM RATE FLEXIBILITY OTHER

Q11. HOW FERQUENT YOU TAKE GOLD LOAN ? a. b. c. d.

ONCE IN 1 MONTH ONCE IN 6 MONTH ONCE IN 1 YEAR OTHER

Q12. WHAT AMOUNT OF GOLD LOAN YOU TAKE ? a. 10,000 – 50,000 b. 50,000 - 1,00,000

c. 1,00,000 – above. Q13. ON WHAT BASIS YOU COMPARE GOLD LOAN OF PUBLIC BANK AND PRIVATE BANK ? a. RATE OF INTEREST b. MAXIMUM RATE c. FLEXIBILITY d. OTHER Q14. DO YOU HAVE ANY RISK IN GOLD LOAN ? a. YES

b. NO

Q15. WHAT TIME PERIOD ARE GIVEN BY YOUR BANK TO REPAY GOLD LOAN? a. 6 MONTH b. 1 YEAR c. MORE THAN 1 YEAR.

Q16. ARE YOU AWARE OF VARIOUS SCHEMES UNDER GOLD LOAN ? a. YES

b. NO

Q17. HOW DO YOU RATE YOUR BANK SERVICES IN TERMS OF GOLD LOAN ? a. b. c. d.

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