Recovery of Loans Kdccb Karimnagar

7/28/2019 Recovery of Loans Kdccb Karimnagar

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INTRODUCTION

Agriculture plays a vital role in the Indian economy. It contributes

approximately more than half of the national income more than 70 percent of our

people depends on Agriculture and 80 percent live within villages, but the economic

position of these people Is still not satisfactory and they are unable to meet their

financial requirements for farming operations therefore they depend upon money

lenders immensely for necessary financial requirements.

In India the co-operative has started officially in the year 1904 when the

Government of India passed the first co-operative act. The co-operative movement

was introduced in India with the main objective of making a breakthrough in the

provision of credit to the Poor classes. Especially for the vast majority of

agriculturists who were suffering under the heavy weight of indebtedness. With the

overwhelming importance assigned to food Production in our successive five-year

plans the planners and pioneers of our country came to the firm conviction that

cooperation is the most effective instrument for the economic growth and prosperity

of our Nation.

Co-operation has been defined "as a firm of organization however in persons

voluntarily associates together as human beings on the basis of equality for the

promotion of the economic interest them".

LOANS AND ADVANCES

Banks are known to accept deposits for the purpose of keeping over the year.

The process of lending have been stream lined in to purpose oriented lending in Indiaby means of various direction guidelines issued by R.B.I, lending are recorded in,

bank books under "loans and advances" of various types the approved purposes for

which loans and advances can be usually granted are

Working capital needs of trade, commerce, industry and agricultureintroducing priority sectors.

Consumption requirements of individuals.


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LOANS

In to select the objectives of the bank in lending and also to meet the

requirements of the people of district co-operative bank. Has been lending money for

various purposes which include as follows:

1. Short term loans2. Medium term loans3. Long term loans

SHORT TERM LOANS

A short-term loan is given for a period of not exceeding one year and it is

given mainly for the working capital requirement of the industries.

MEDIUM TERM LOANS

Medium term loans are granted for a period of month exceeding five years.

Loans given for a period of five years and above came under the category long-term

loans.

LONG TERM LOANS

Long-term loans are granted for meeting capital expenditure like purchase of

machinery construction of factory building etc.

Term loans are generally granted for a period of more than three years and

less than ten years by banks. Term loans up to seven years are called medium term

loans and beyond that are long-term loans.

CLASSIFICATION OF LOANS AND ADVANCES

The loans and advances granted by bank are broadly classified as fallows

Secured Unsecured


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SECURED

According to section 5(a) of the banking regulation on act 1949, secured

loans. "A secured loans or advance" means a loan or advance made on the security of

assets. The market value of which is not at any time less than the amount of such loan

or advance.

The distinguishing features of a secured loans or advances as follows:

The loan must be made on the security of tangible assets. The market value of such security must not be less than the amount of the loan

at any time till the loan is repaid.

UNSECURED

Unsecured loan or advance means a loan are advance not to secure. These

advances are otherwise called "clean advances" clean advances are obviously granted

to parties enjoying high reputation and sound financial position. Unsecured advances

are sanctioned loan by seeing the credit worthiness of a barrower. It depends on

his/her honesty and integrity.

NEED & IMPORTANCE OF THE STUDY

Since the banks are playing a vital role in modern days, it is important to

understand the Recovery performance of loans in the Banks. In general sense the term

"Recovery" is referred as repayment or reimbursement of loans issued to the

customers for their respective needs according to the predetermined terms and

conditions. Recovery plays a vital role in functioning of the bank as it acts as a sourcefor earning interest through the loans already issued which are then recovered to

continue the cycle of mobilization of loans.


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OBJECTIVE OF THE STUDY

The main objective of the present study is to evaluate or appraise the recovery

performance of "THE KARIMNAGAR DISTRICT CO-OPERATIVE CENTRAL

BANK" in respect of loans for the time period of five years.

1.To study the recovery performance of the bank in relation to loans and advances.2.To analyze the effectiveness of the bank performance in analyzing funds in the

form of different types of loans for different purposes.

3.To assess the performance of the bank with regard to recovery of loans andadvances and analyze the problems relating to the recovery of loans.

4.To know what measures are followed by the bank to recover the different types ofloans.

5.Finally to make suitable suggestions for improving the recovery performance ofthe bank.

SCOPE OF THE STUDY

The DCCBs have come into existence due to the failure of primary societies to

attract required resources in the form of deposits from well to do sections of the

village community on one hand and to inspire the habit of thrift and savings among

their members to provide strong capital base on the other.

The present study covers exclusively the recovery performance of DCCB,

Karimnagar District, in terms of loans and advances. For the purpose of study five

years financial data has been taken into account.


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RESEARCH METHODOLOGY

Methodology is systematic procedure of collecting information in order to analyze

and verifying a phenomenon. The collection of date is done through two principle

source viz.

1. Primary Data2. Secondary Data

Primary Data

It is the information collected directly without any reference. In the study, it was

mainly interviews with concerned officer and staffs either individually or collectively.

This study does not include any primary data.

Secondary Data

The Secondary data was collected from already published sources such as

pamphlets annual, reports and internal records. The data includes:

1. Collection of required data from annual reports of "THE KARIMNAGARDISTRICT CO-OPERATIVE CENTRAL BANK".

2. Reference form text books and journals relating to financial management andarticles published in business dairies like the Economics times, Business line

etc.,

LIMITATIONS OF THE STUDY

The study is based mainly on secondary data. Since the study is confined to only few aspects like loans and advances, so the

overall performance of the bank cannot be measured accurately.

Here, the calculations are approximated. Here, the accuracy of the results is subjected to the accuracy of the data

furnished by the annual reports.

Documents

Recovery of Loans Kdccb Karimnagar