Page |1

Name:Aaditi Singh
Class:XII C
Roll no:27
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Topic Page no
Economics Project 1
Content 2
Introduction 3-6
Objective and methodology 7
of study
Commercial Banks and their 8-16
functions
Central bank and credit 17-25
control
Movement of CRR and SLR 26
in the previous years
HDFC Bank 27-32
ICICI Bank 33-39
Axis Bank 40-47
Bank Of Baroda 48-55
Kotak Mahindra Bank 56-62
Issues on non-performing 63-66
assets
Report on my findings 67-68
Bibliography 69
 Page |3

• What is Bank?
A bank is a financial institution that accepts
deposits of money from the public,withdrawable
by cheque or otherwise and uses the money so
collected for lending to the households,the
firms and the government.

• Types of banks:

1)Central bank:The central bank is the apex

institution in the banking and financial
structure of the country.It is the central bank
which issues currency in the country.It also
controls and regulates the banking and financial
structure of the country.

2)Commercial banks: Commercial banks are

the most important type of banks in a
 Page |4

country.These banks accept deposits from the

public and give mainly short period loans to
individuals,traders and business institutions.In
the process of accepting deposits and
extending loans,commercial banks create
‘deposit money’ or ‘credit money’.

3)Cooperative Banks:These banks run on a

cooperative basis.These banks were originally
started in rural areas in the form of
cooperative societies for the purpose of
granting easy credit to the farmers.Cooperative
banks have now been established in the urban
areas as well.

4)Regional rural banks:These banks have

been set up in the rural areas to meet the
needs of the weaker sections of the rural
population like small farmers,rural
artisans,etc.That is why they are called “small
man’s banks”.They are basically scheduled
commercial banks.

5)Land development banks:Land

development banks,also known as land mortgage
 Page |5

banks,provide long-term credit to the farmers

for a variety of purposes such as improvement
of land,purchase of costly agricultural
equipments like tractors,construction of
wells,fencing,etc.Loans are given against the
security of landed property.These loans are
given at concessional rates.

6)Exchange Banks:Exchange banks help

people engaged in foreign trade.They finance
foreign trade and carry on foreign exchange
business.They do so by
purchasing,selling,discounting and accepting bills
of exchange arising out of foreign trade.

7)Exim Banks:Exim banks,popularly known as

‘Export-Import Banks’,have been set up to
provide long term finance to exporters and
importers to meet their financial needs related
to international trade.

8)Development Banks:Development Banks

have been set up in the country to promote
development of industrial activities.They grant
long-term loans and provide various types of
 Page |6

development services such as underwriting the

new issues,provision of technical advice,market
information,etc. to the private sector
industries.Industrial Financial Corporation of
India(IFCI),Industrial Credit and Investment
Corporation Of India(ICICI) and Small
Industries Development Bank of India(SIDBI)
are some of the important types of
development financial institutions.
 Page |7

The main objective of making this project

is to gain knowledge about the Indian
Banking System.To gain knowledge about
the various Commercial Banks,about their
Cash Reserve Ratio(CRR),Statutory
Liquidity Ratio(SLR).
 Page |8

Commercial bank:Commercial bank is an

institution which performs the functions of
accepting deposits,granting loans and making
investments,with the aim of earning profits.

Functions of Commercial Banks:

1)Accepting Deposits:It is the most
important function of commercial banks.They
accept deposits in several forms according to
the requirement of different sections of the
society.The main kind of deposits are as
follows:

(a)Saving A/C or Saving Deposit:

• This was started to motivate people to
deposit their savings in the bank.
• It is opened in the personal name of the
A/C holder.It cannot be opened in the
firm’s name.
 Page |9

• The depositer gets an interest on their

money deposited in bank,which is less than
the interest rate on fixed deposit.
• The depositors are given cheque facility to
withdraw money from their
account.But,some restriction are imposed on
number and amount of withdrawls in order
to discourage frequent use of saving
depoits.

(b)Current A/C Deposits:

• Such deposits are maintained by
businessmen with an intention of making
transactions with such deposits.
• The money can be withdrawn by a cheque
without any restriction.
• Banks do not pay any interest on these
accounts.Rather,banks impose service
charges for running these accounts.
• The current account holder gets the
overdraft facility from the banks.
 P a g e | 10

• Deposits in current account are payble on

demand and hence are known as demand
deposits.

(c)Fixed depost/Time Deposit/Term

Deposit:
• These are those deposits,in which amount is
deposited with the bank for a fixed period
of time.
• These deposits carry the highest rate of
interest.
• The depositor cannot withdraw money
before the expiry of the term.However,if
the depositor needs money,in case of
emergency,before the term expires,he will
get the monet back but the bank will deduct
certain charges as penalty.
• Such deposits do not enjoy chequeable
facility.
• The depositor can avail loan by keeping the
fixed deposit as a security with the bank.

(d)Recurring Deposits:
 P a g e | 11

They are one type of fixed deposits.In this

case,a depositor makes a regular deposit of a
given sum for a specified period.Such deposits
are designed to motivate the small savers to
save a particular amount regularly.

2)Advancing of loans:
Deposits received by the bank does not remain
idle.So,after keeping certain cash reserve,the
balance is given to the needy borrowers and
interest is charged from them.The following are
the different types of loans given by the bank:

(a)Cash Credit:It refers to the loan given to

the borrower against his current assets likes
shares,stocks,bonds,etc. A credit limit is
sanctioned and the amount is credited in his
account.The borrower may withdraw any amount
within his credit limit and the interest is
charged on the amount actually withdrawn.

(b)Overdraft facility:It refers to the

facility in which a customer is allowed to
overdraw his current A/C. upto an agreed
 P a g e | 12

limit.This facility is generally given to

respectable and reliable customers for short
period.The interest is charged by the bank on
the amount actually withdrawn.

(c)Outright Loans(Term loans):Banks

provide outright loans for a fixed period.The
loans are advanced for dhort term and medium
term.In this case,the entire amount of the loan
sanctioned is credited in lumpsum to the
borrower’s current account.The borrower has to
pay interest on the entire amount he has
borrowed from the bank,no matter how much
amount is actually used by the borrower.

(d)Discounting bills of Exchange:An

important form of bank lending is through
discounting or purchasing the bills of
exchange.A bill of exchange is drawn by a
creditor on the debtor specifying the amount of
debt and also the date when it becomes
payble.Such bills of exchange are normally
issued for a period of 90 days.This means that
the creditors that the creditors cannot get it
 P a g e | 13

encashed from the debtors before the expiry

of the 90 days period.However,if the creditor
needs money before the expiry of the 90 days
period,he can sell it,i.e.,he can get it discounted
from a commercial bank.The bank makes
payment to the creditor after deducting its
commission.When the bill matures,the bank will
get payment directly from the banker of the
debtor who has accepted the bill.Thus,by
discounting bills,the bank pays money to the
creditor when he needs it and allows the debtor
to make payment only when the bill is due for
payment.Discounting of bills of exchange
is,therefore,really one form of bank lending.

3)Facilitation of Payments through

Cheques:Banks have provided a very
convenient system of payment in the form of
cheques.We can receive payments from others
through cheques and deposit these cheques in
our bank.These cheques maybe drawn on some
other commercial banks,but our bank will collect
payment from these banks on our
 P a g e | 14

behalf.Similarly,we can make payments to

others through cheques.The cheque is the
principal method of payment in business in
recent times.It is convenient,cheap and safe
means of making payments.

4)Transfer of funds:Banks help in the

remittance or transfer of funds expeditiously
and safely from one place to another through
the use of various credit instruments like
cheques,drafts,pay orders,mail
transfers,telegraphic transfers,e-mail,etc.

5)Agency functions:Banks provide various

types of agency functions for their
customers.The banks charge commission or
service charge for for such functions.The main
agency functions are:
(a)The commercial banks collect payments made
through cheques,drafts,bills of
exchange,hundies and other financial
instruments on behalf of their customers.
 P a g e | 15

(b)They make and collect various types of

payments on behalf of their customers.Banks
make payments of insurance premia,taxes,etc.
on behalf of their customers from their
deposits.They receive payments of insurance
claims,pensions,dividends and interest on shares
and debentures on behalf of their customers
and credit them to their account.
(c)The commercial banks act as agents of their
customers in the sale and purchase of stock and
shares.They provide instrument services to the
companies by acting as underwriters and
bankers for the new issues of securities to the
public.
(d)They render agency services of various types
such as buying and selling foreign
currency,national savings certificates and units
of UTI on behalf of their customers.
(e)The commercial banks act as trustees and
executors.For instance,they keep the wills of
their customers and execute them after their
death.
 P a g e | 16

6)General utility functions:Commercial

banks provide various general utility services
such as providing locker locker facilities for
safe custody of jewellery and other
valuables,issuing traveller’s cheques and gift
cheques,providing credit cards,helping their
customers in providing tax assistance and
investment and finance advice,etc.

7)Credit Creation:A very important and

unique function of the commercial banks is that
they have the power of credit creation.In the
process of acceptance of deposits and granting
of loans,commercial banks are able to create
credit.This means that they are able to grant
more loans than the amount of initial or primary
deposits made by the customers.
 P a g e | 17

Central bank is an ‘Apex’ body that

controls,operates,regulates and directs the
entire banking and monetary structure of the
country.
It is known as the Apex(supreme)body as it
occupies the top most position in the monetary
and banking system of the country.All the
financially developed countries have their own
central bank.

Monetary policy is the policy of the central

bank to control and regulate the availability and
flow of credit with the public as well as the
cost and use of money for achieving certain
predetermined objectives of economic
policy.The central bank of a country adopts
various methods to control and regulate the
money supply.These methods are called tools pf
 P a g e | 18

credit control.These methods of credit are

generally under two broad categories which are:

I)Quantitative Credit Control

Instruments:
1)Repo Rate-Repo rate is the rate at which
Central Bank of a country(RBI)lends money to
commercial banks to meet their short term
needs.
During the period of excess demand and
inflation,RBI increases the Repo Rate,which
increases the cost of borrowing from the
RBI.It forces the commercial banks to increase
the lending rate,which discourages the
borrowers from taking loans,reducing the money
supply in an economy and solving the problem of
excess demand and inflation.
On the other hand,during the period of
deficient demand and deflation,RBI reduces the
Repo Rate,which reduces the cost of borrowing
from the RBI.It allows the commercial banks to
reduce the lending rate,which encourages the
 P a g e | 19

borrowers to take loans,increasing the money

supply in an economy and solving the problem of
deficient demand and deflation.

2)Bank rate or discount rate:Bank rate is

the rate at which the central bank of a
country(RBI)lends money to commercial banks
to meet their long term needs.
During the period of excess demand and
inflation,RBI increases the Bank Rate,which
increases the cost of borrowing from the
RBI.It forces the commercial banks to increase
the lending rate,which discourages the
borrowers from taking loans,reducing the money
supply in an economy and solving the problem of
excess demand and inflation.
On the other hand,during the period of
deficient demand and deflation,RBI reduces the
Bank Rate,which reduces the cost of borrowing
from the RBI.It allows the commercial banks to
reduce the lending rate,which encourages the
borrowers to take loans,increasing the money
 P a g e | 20

supply in an economy and solving the problem of

deficient demand and deflation.

3)Cash Reserve Ratio(CRR):Every

commercial bank needs to keep a minimum
percentage of their net demand and time
liabilities(NDTL)with RBI,known as CRR.
During the period of excess demand and
inflation,RBI increases the CRR,which leaves
lesser cash resources with the commercial
banks,reducing the money supply in an economy
and solving the problem of excess demand and
inflation.
On the other hand,during the period of
deficient demand and deflation,RBI reduces the
CRR,which leaves more cash reserves with the
commercial banks,increasing the money supply in
an economy and solving the problem of deficient
demand and deflation.

4)Statutory liquidity rates(SLR):Every

commercial bank needs to maintain a certain
percent of net demand and time
liabilities(NDTL)with themselves,either in the
 P a g e | 21

form of cash or in the form of any liquid

assets(Gold,government approved
security),known as SLR.
During the period of excess demand and
inflation,RBI increases the SLR,which leaves
lesser cash ratio with the commercial
banks,reducing the money supply in an economy
and solving the problem of excess demand and
inflation.
On the other hand,during the period of
deficient demand and deflation,RBI reduces the
SLR,which leaves more cash resources with the
commercial banks,increasing the money supply in
an economy and solving the problem of deficient
demand and deflation.

5)Open Market Operations:Open Market

operations refer to the sale and purchase of
securities in the open market by the RBI on
behalf of the government.By selling the
securities in the open market,the RBI soaks
liquidity from the economy.And,by buying the
securities,the RBI releases liquidity.
 P a g e | 22

When the liquidity is soaked,cash reserves of

the commercial banks are squeezed,implying a
cut in their credit creation capacity.On the
other hand,when liquidity is released,cash
reserves of the banks tend to rise,implying a
rise in credit creation capacity of the
commercial banks.
Thus,inflation is corrected by selling the
securities and soaking liquidity,while deflation is
corrected by buying the securities and releasing
liquidity.

II)Qualitative Credit Control

Instruments:
1)Margin Requirement:The margin
requirement refers to the difference between
the current value of the security offered for
loan and the value of loan granted.Suppose,a
person mortgages his house worth Rs 1 crore
with the bank for a loan of Rs 80 lakh.The
margin requirement in this case would be Rs 20
lakh.The margin requirement is raised when the
supply of money needs to be reduced.The
 P a g e | 23

margin requirement is lowered when the supply

of money is to be increased.Often the margin
requirement is kept high for speculative
activities.

2)Rationing Of Credit:Rationing Of Credit

refers to fixation of credit quotas for
different business activities. Rationing Of
Credit is introduced when the supply of credit
is to be checked particularly for speculative
activities in the economy.The RBI fixes credit
quota for different business activities.The
commercial banks cannot exceed the quota
limits while granting loans.This restricts the
supply of money in the economy,and inflation is
controlled.On the other hand,rationing of credit
is withdrawn to increase the supply of
money.This controls deflation.

3)Moral suasion:Moral suasion is the method

of persuasion,request,informal suggestion and
advice to the commercial banks by the central
bank.Central bank convenes the meeting of the
heads of the commercial banks and explains to
 P a g e | 24

them the need for adoption of a particular

monetary policy and appeals to them to follow
this policy.For instance,the central bank may
request the commercial banks not to grant loans
for speculative purposes.Central bank relies
upon its moral influence on the commercial
banks as the head and leader of the financial
institutions.
4)Direct Action:Direct Action refers to various
directives issued by the central bank to
commercial banks from time to time to regulate
their lending and investment activities.The
central bank can take direct actions against
commercial banks. This policy may not be used
against all the banks,but against erring banks
which do not follow the policies of the central
bank.These direct actions may take the form of
refusal of discounting facilities or refusal of
loans from the central bank.These direct
actions may take the form of refusal of
discounting facilities or refusal of loans from
the central bank,charging of penal rate of
interest.etc.
 P a g e | 25

CRR and SLR

2002

1997

1996

1992

0% 10% 20% 30% 40%

SLR CRR
 P a g e | 26

HDFC Bank Limited is an Indian banking and

financial services company headquartered
in Mumbai, Maharashtra. It has a base of
104,154 permanent employees as of 30 June
2019. HDFC Bank is India’s largest private
sector bank by assets. It is the largest bank
in India by market capitalisation as of March
2020.
A subsidiary of the Housing Development
Finance Corporation, HDFC Bank was
incorporated in 1994, with its registered office
in Mumbai, Maharashtra, India. Its first
corporate office and a full-service branch at
Sandoz House, Worli were inaugurated by the
then Union Finance Minister, Manmohan Singh.
As of 30 June 2019, the Bank's distribution
network was at 5500 branches across 2,764
cities. The bank also installed
430,000 POS terminals and issued 23570,000
 P a g e | 27

debit cards and 12 million credit cards in FY

2017.

HDFC provides different types of home

loans,they are:
• Home loans
• Personal loans
• Two wheeler loans
• New car loans
• Used car loans
• Overdraft against car
• Express loans
• Loans against securities
• Loans against property
1)Home loans: HDFC offers home loans with EMIs
starting from ₹659 per lac and interest rates
starting from 6.90% per annum. Their housing loan
is tailor made for salaried individuals as they offer
an attractive rate of interest and a longer tenure.
They also provide with legal and technical
counselling to help customers make the right home
buying decision. HDFC Housing Loan offers all
 P a g e | 28

online Home Loan solutions if someone wants to

buy, construct or renovate their house.

Home Loan Key Features:

Home Loans for purchase of a flat, row

•

house, bungalow from private developers

in approved projects
Home Loans for purchase of properties
•

from Development Authorities such as

DDA, MHADA etc
Loans for purchase of properties in an
•

existing Co-operative Housing Society or

Apartment Owners' Association or
Development Authorities settlements or
privately built up homes
Loans for construction on a freehold /
•

lease hold plot or on a plot allotted by a

Development Authority
 P a g e | 29

Expert legal and technical counselling to

•

help customers make the right home

buying decision
Integrated branch network for availing
•

and servicing the Home Loans anywhere in

India
Special arrangement with AGIF for Home
•

Loans for those employed in the Indian

Army.

Features of HDFC Personal Loan:

• No collateral or security required to avail a
personal loan.
• Loan disbursal within a day of applying for
the loan.
• HDFC personal loan interest rates range
from 10.75% - 21.30% p.a.
• Borrowers can opt for the ‘Sarv Suraksha
Pro’ policy, which provides a credit shield
cover, an accidental hospitalisation cover,
and a permanent disability/accidental
death cover.
 P a g e | 30

• Borrowers can also avail an optional

insurance cover that will offer coverage
against personal accidents and critical
illnesses.

Key feature of HDFC Bank Loan against

Property (Mortgage Loan):
The loan against property offered by HDFC
Bank comes with a number of attractive
features including:
• Interest rates: The bank offers
attractive rate of interest on loan against
property.
• High loan amount: A borrower can receive
higher loan amount against his/her
property for longer tenure.
• Faster processing and quick approvals with
minimal documentation.
• HDFC Bank accepts both residential and
commercial properties as security.
• The bank offers customized loan options
for self-employed individual
 P a g e | 31

Credit deposit Ratio:

CREDIT DEPOSIT RATIO

90

80
79.08
76.41
70 72.66

66.78
65.35
60

50

40

30

20

10

0
2008 2009 2010 2011 2012

CREDIT DEPOSIT RATIO

 P a g e | 32

ICICI Bank Limited is

an Indian multinational banking and financial
services company with its registered office
in Vadodara, Gujarat and corporate office
in Mumbai, Maharashtra. It offers a wide range
of banking products and financial services for
corporate and retail customers through a
variety of delivery channels and specialised
subsidiaries in the areas of investment
banking, life, non-life insurance, venture
capital and asset management.
ICICI Bank is one of the Big Four banks of
India.The bank has subsidiaries in the United
Kingdom and Canada; branches in United States,
Singapore, Bahrain, Hong Kong, Qatar, Oman,
Dubai International Finance Centre,
China and South Africa; as well as
representative offices in United Arab Emirates,
Bangladesh, Malaysia and Indonesia. The
company's UK subsidiary has also established
branches in Belgium and Germany.
Lending operations:
 P a g e | 33

The different types of loans provided by ICICI

Bank are as follows:
• Home loans
• Car loans
• Loan against property
• Loan against securities
• Gold loan
• Consumer Finance
• Education Loan
• Personal loan
• Commercial Business Loan
• Pradhan Mantri Mudra Yojana
• Stand-up India Scheme

Pradhan Mantri MUDRA Loan

Under the aegis of Pradhan Mantri MUDRA
Yojana (PMMY), MUDRA has created three
products i.e. 'Shishu', 'Kishore' and ‘Tarun’ as
per the stage of growth and funding needs of the
 P a g e | 34

beneficiary micro unit. These schemes cover loan

amounts as below:

a. Shishu: covering loans up to ₹50,000

b. Kishore: covering loans above ₹50,000 and
up to ₹5,00,000
c. Tarun: covering loans above ₹5,00,000 and
up to ₹10,00,000

All Non-Corporate Small Business Segment

(NCSBS) comprising of proprietorship or
partnership firms running as small manufacturing
units, service sector units, shopkeepers,
fruits/vegetable vendors, truck operators, food-
service units, repair shops, machine operators,
small industries, food processors and others in
rural and urban areas, are eligible for assistance
under Mudra.

Bank branches would facilitate loans under

Mudra scheme as per customer requirements.
Loans under this scheme are collateral free
loans.
 P a g e | 35

Mudra Loans could be availed for the

following
Vehicle loan: Commercial vehicle loan, Car loan
and Two-wheeler loan.

Business Installment Loan (BIL): Loan for

working capital requirement, buying plant and
machinery, renovating offices etc.

Business Loans Group Loans (BLG) and Rural

Business Credit (RBC): They offer Drop line
overdraft/Overdraft facility/Working capital
loans.

LOAN AGAINST SECURITIES:

Key features of the product:

• Loan by way of an Overdraft facility
• Interest payable only on the amount used
• Unique facility of selling pledged shares
online
• No pre-payment charges and flexible
repayment options
 P a g e | 36

• Quick turn-around time and easy

documentation
• Digital Loan Against Shares and Mutual
Funds available for select customers.

Loan against Securities is available against

the following securities:

• Demat Shares
• Mutual Funds
• Insurance Policies
• Tax-free Bonds
• Fixed Maturity Plans(FMPs)
• Sovereign Gold Bonds
• Unit linked Insurance Plans(ULIPs)

Personal Loan:
A Personal Loan from ICICI Bank helps
customers meet their diverse financial needs
during an emergency. It is an unsecured loan
and can be used for marriage expenses, paying
the medical bills, going for a vacation or
renovating their home.
 P a g e | 37

Personal Loan can be availed up to Rs 20 lakh

and meet personal exigencies.The quick approval
process of Personal Loans from ICICI Bank
ensures the customers have an easy borrowing
experience.

Key features of Personal loan:

• ICICI Bank gives the customers the

flexibility to choose a loan tenure from 12 to
60 months.
• The interest rate is fixed and it remains the
same throughout the loan tenure.
• The interest rate starts from 11.25% per
annum.
 P a g e | 38

CREDIT DEPOSIT RATIO OF ICICI Bank

92.23

91.44

90.04

87.81

84.99

2008 2009 2010 2011 2012

CREDIT DEPOSIT RATIO

 P a g e | 39

AXIS
BANK

Axis Bank Limited is an Indian private sector

bank headquatered in Mumbai, Maharashtra.It
sells financial services to large and mid-size
companies, SMEs and retail businesses.
As of 30 June 2016, 30.81% shares are owned
by the promoters and the promoter group.The
remaining 69.19% shares are owned by mutual
funds, FIIs, banks, insurance companies,
corporate bodies and individual investors.
The bank was founded in December 1993 as
UTI Bank, opening its registered office
in Ahmedabad and corporate office
in Mumbai.UTI Bank began its operations in
1993, after the Government of India allowed
new private banks to be established. The bank
was promoted in 1993 jointly by the
Administrator of the Unit Trust of
India (UTI),Life Insurance Corporation of
India (LIC), General Insurance Corporation,
National Insurance Company, The New India
 P a g e | 40

Assurance Company, The Oriental Insurance

Corporation and United India Insurance
Company. The first branch was inaugurated on 2
April 1994 in Ahmedabad by Dr. Manmohan
Singh, the then finance minister of India.

Loans provided by Axis Bank:

• Home loan
• Personal loan
• Business loan
• Car loan
• Two wheeler loan
• Loan against Securities(Mortgage loan)
• Commercial Vehicle Construction Equipment
loan
• Education loan
• Loan against property
• Loan against Fixed Deposits
• Gold loan
• Holiday Loan
 P a g e | 41

HOME LOAN:
Axis Bank Home Loan offers home loans
starting at Rs. 3,00,000. The Axis Bank Home
Loan comes with a host of benefits such as
smaller EMIs where customers can space out
their payment over a longer tenure, attractive
interest rates, an easy application process,
doorstep service, etc.
Features of Home loan:
• The customers can transfer their existing
home loans to Axis bank.
• There are no prepayment charges for
paying off the home loan before the due
date(only for loans availed at floating rate
of interest)
• Axis Home Loan offers eligible customers
housing loan options with interest rates
starting at 6.90% p.a. on floating rate
loans, and 12% p.a. on fixed rate loans.
• The tenure can be extended up to 30
years in the case of floating rate loans
and 20 years in the case of fixed rate
loans.
 P a g e | 42

• The customers can repay their home loans

in smaller EMIs,over a longer
tenure,depending on the situation of the
customer’s finances.

Loan Against Fixed Deposits:

Axis Bank provides a Loan Against Fixed
Deposit for customers cash requirements
without having to liquidate their fixed deposits.
The customers can upto 85% of the value of
their fixed deposit without losing out on the
interest and paying a penalty for breaking the
fixed deposit.
Features of loan Against Fixed Deposits:
• The customers can avail upto 85% of the
value of their fixed deposit.The minimum
limit is Rs 25,000.00/-
• In case of an emergency,instead of breaking
the fixed deposit,the customer can take a
loan against it instead.
• The customers will be charged interest only
on the actual amount utilised and for the
 P a g e | 43

tenure of utilisation.No EMI or post-dated

cheques required.
• The customers can get an overdraft account
with chequebook,ATM card and Internet
Banking Facilities-availabe to them upto the
remaining tenure of the Fixed Deposit on
renewable basis.Overdraft facility is
granted to them for a minimum of 3 months.
• No prepayment charges.Payment can be
done in overdraft account from valid
banking channels and instruments.

Personal loans:
Axis Bank Personal Loans offer fast processing
of the loan. Personal Loans can be used for
plenty of purposes. They can be availed for
planning a vacation, renovating one’s home or
arranging a wedding for somebody in the
family.Customers can get a Personal Loan from
Rs. 50,000 upto Rs. 15,00,000 with minimal
documentation and speedy approval from Axis
Bank. Also, they can transfer their existing high
interest Personal Loan to Axis Bank as well.
 P a g e | 44

Features of Personal Loan:

1)One needs to be of a minimum age of 21 years
and should have a valid set of documents like
ID, income and residence proof, among
other documents, to avail a Personal Loan from
Axis Bank.

2)To ease the burden of paying off the Personal

Loan immediately, you may opt for the EMI
(Equated Monthly Instalment) facility.

3)The repayment tenure can range from

anywhere between 12 to 60 months.

4)The interest rates of Axis Bank personal loan

starts from 15.75%.
 P a g e | 45

Advances by Axis bank in the

previous 5 years:
 P a g e | 46

k
 P a g e | 47

Bank of Baroda (BOB) is an

Indian multinational, public sector banking
and financial services company. It is the third
largest public sector bank in India, with 131
million customers, a total business of US$218
billion, and a global presence of 100 overseas
offices. Based on 2019 data, it is ranked 1145
on Forbes Global 2000 list.
The government of India announced the merger
of Bank of Baroda, Vijaya Bank and Dena
Bank on September 17, 2018, to create the
country's third largest lender. The
amalgamation is the first-ever three-way
consolidation of banks in the country, with a
combined business of Rs14.82 trillion (short
scale), making it the third largest bank after
State Bank of India (SBI) and ICICI Bank.
Loans provided by Bank of baroda:
• Home Loan
• Education Loan
 P a g e | 48

• Personal loan
• Vehicle loan
• Fintech
• Baroda Ashray(Reverse Mortgage Loan)
• Mortgage Loan
• Mudra Loan
• Loan for public issues

Home loans:
Bank of Baroda housing loan can be used for a
variety of purposes. For instance, one can buy
a plot, purchase a flat, build their own home
and even extend their existing residence with
a home loan.
Both resident and non-resident Indians are
eligible for their home loans.

Features of Home Loan:

• Low interest rates and processing
charges: Bank of Baroda offers low loan
interest rates. In addition, the processing
 P a g e | 49

charges on their home loans are minimal, and

there no pre-closure charges.
o Processing Charges

o Rate of Interest

• Higher loan amount: A customer can

improve their eligibility when they add a
close family member as co-applicant to their
home loan. This will enable the customer to
receive a higher home loan amount.
• Free credit card and insurance: With
their home loan, one can enjoy a free credit
card and concession of 0.25% for car loans.
Additionally, they offer free accident
insurance with every home loan.
The customer can also opt for group credit
life insurance cover when they apply for a
home loan. This cover protects the family
against the death of the borrower, and the
family is not required to repay the home
loan to the extent of the claim amount.
They can pay the premium for the cover
along with the EMIs of their home loan.
• Longer tenures: With a tenure of up to 30
years on home loans, the equated monthly
installments (or EMIs) are low. Instead, the
 P a g e | 50

borrower can easily repay their home loan in

EMI amounts best suited to their financial
needs.
• Top up loans: One of the key benefits of
Bank of Baroda home loans is that you the
borrower can apply for a top-up loan during
his loan tenure, up to a maximum of five
times.

Personal loan:
Personal loans are an ideal choice for those
who need funds urgently. It is recommended
to opt for a personal loan overusing credit
cards. The latter have strict credit limits,
whereas, in the former, one can choose exact
personal loan amount. Also, not all suppliers or
vendors accept credit cards, whereas, one can
use the funds from their personal loan to pay
someone via cheque, bank transfer or cash.
Additionally, the customer needs to pay
their credit card bill by the due date, but
one can repay a personal loan over a period
of time with pre-determined EMIs.
 P a g e | 51

Features of Personal Loan:

• To apply for a personal loan, applicants can
be employees of government bodies or
private companies with minimum continuous
service of one year. Similarly, self-employed
professionals or business persons who want
to apply for personal loans need to have
their business or practice for at least one
year.
• Applicants need to be at least 21 years of
age to be eligible for a personal loan, while
co-applicants are not allowed. The maximum
age to apply for personal loans is 60 years
for salaried and 65 for non-salaried persons
at the end of the repayment period.
• The personal loan amount varies by location.
In metro and urban areas, the loan amounts
can range from Rs.1 lakh to Rs.10 lakh. In
semi-urban and rural areas, the personal
loan amount varies from Rs.50,000 up to
Rs.5 lakh.
 P a g e | 52

• The processing charges for personal loans is

calculated as 2% of the loan amount, with a
minimum of Rs.1000 up to Rs.10,000.

Baroda Ashray(Reverse Mortgage

Loan):
Baroda Ashary loan has been started for
supplementing the cash flow stream of senior
citizens in order to address their financial
needs.
Features of Baroda Ashray(Reverse
Mortgage Loan):
• The borrower should be senior citizen of
India, above 60 years of age.
• Married couples are eligible as joint
borrowers provided one of them is above
60 years of age and age of spouse is not
below 55 years at the time of application.
• The borrower should be the owner of a
residential property (house or flat)
located in India in his/her own
name.Residential property should be used
 P a g e | 53

as permanent primary residence (fully self

occupied property).
The Commercial property is not taken
as a security under the product.
• The rate of interest is BRLLR+Strategic
Premium+1.75%.
• The processing charges are 0.20% of loan
amount.
• The maximum amount is Rs 10,000/- and
upfront charges are Rs 7,500/-.
P a g e | 54
 P a g e | 55

Kotak Mahindra Bank Limited is

an Indian private sector bank headquartered
in Mumbai, Maharashtra, India. It offers
banking products and financial services for
corporate and retail customers in the areas
of personal finance, investment banking, life
insurance, and wealth management. As of April
2019, it is the second largest Indian private
sector bank by market capitalization.
In 1985, Uday Kotak founded what later
became an Indian financial services
conglomerate. In February 2003, Kotak
Mahindra Finance Ltd. (KMFL), the group's
flagship company, received a banking licence
from the Reserve Bank of India. With this,
KMFL became the first non-banking finance
company in India to be converted into a bank:
Kotak Mahindra Bank Limited.
 P a g e | 56

Types of Loan provided by Kotak

Mahindra Bank:

• Personal Loans
• Home Loans
• Loan Against Property(Mortgage Loan)
• Education Loan
• PayDay Loan
• Home Improvement Loans
• Home Loan Balance Transfer
• Gold Loans
• Commercial Vehicle Finance
• Loan Against Securities(Mortgage Loan)
• Consumer Finaance

Home loan:
Home loans are a breather for millennials
today. Being funded with 75% to 80% of the
property cost by Kotak, it becomes easy for
any housing loan borrower to go for a home
loan.The loan is usually paid back in equated
monthly instalments and the amount payable
per EMI usually depends on the tenure of the
loan, the interest rate, the amount of the
 P a g e | 57

loan etc.So, principally, Kotak intends to

simplify the entire process and make it
seamless, hassle-free and memorable. Kotak
provides housing loans at attractive interest
rates, along with extending to the borrower
an insurance policy.
Features of Home loan:
• A person is eligible for home loan if he/she
is between 18 to 60 years old and is
salaried.
• The interest rate is 6.75%.
• Zero processing fess on an online application
for home loan
• There are insurance to cover home loans,at
attractive premium.
• The borrower can opt for a loan period of
up to 20 years or outstanding tenure of the
proposed loan to be taken over whichever is
lower and can vary depending on his/her
profile.
• Prepayment / foreclosure is allowed on
Home Loan without any charges.
 P a g e | 58

PayDay loan:
PayDay loan is a Single installment loan. In
other words, the full loan amount and interest
due [plus overdue fees and charges if any] will
be automatically deducted from customers
Kotak Bank account in the next month after
which he has availed the loan.
PayDay Loans are instant and quick fix to
customees cash shortfalls anytime during the
month.They can manage emergencies and cash
crunch with ease with Payday loans.
Features of PayDay loan:
• The interest rate charged is 10% per annum
• Instant online disbursal to the customer’s
Kotak Bank Account.
• No Documentation is required for availing
this loan.No postdate cheques are also
required.
• This type of loan is available online only.
 P a g e | 59

• The loan is pre-approved at 50% of the

borrower’s net salary, and offered to salary
account holders of Kotak.
• The minimum amount that the customers
can avail is Rs 3,000 and the maximum
amount is Rs 1,50,000.

Loan against Property(Mortgage

loan):
Loan Against Property is primarily taken for
the purpose of Business Expansion.
Features of Mortgage loan:
• Flexible Loan Eligibility option is available.
• The value of loan varies from Rs 10 lakh to
Rs 5 crore.
• Loan is given against
commercial,residential or industrial
property.
• Flexible loan offerings in the form of
EMI-based loans or overdraft facility.
 P a g e | 60

• Easy repayment options are available at

Kotak Mahindra Bank.
• A non-refundable processing fee of up to
1% is charged.
• Term Loan and Overdraft facility under
Loan against Property is also offered.
• A loan up to 10 years, and maximum
permissible tenure of 15 Years is offered.
 P a g e | 61

CREDIT DEPOSIT RATIO

Credit deposit Ratio

89.7

88.99

87.35

87.06

86.57

86.04

2015 2016 2017 2018 2019 2020

 P a g e | 62

What is NPA?
• You may note that for a bank, the loans
given by the bank is considered as its
assets. So if the principle or the
interest or both the components of a
loan is not being serviced to the lender
(bank), then it would be considered as a
Non-Performing Asset (NPA).
• Any asset which stops giving returns to
its investors for a specified period of
time is known as Non-Performing Asset
(NPA).
• Generally, that specified period of time
is 90 days in most of the countries and
across the various lending institutions.
However, it is not a thumb rule and it
may vary with the terms and conditions
agreed upon by the financial institution
and the borrower.
 P a g e | 63

Issues of non-performing Assets:

• More than Rs. 7 lakh crore worth loans
are classified as Non-Performing Loans
in India. This is a huge amount.
• The figure roughly translates to near
10% of all loans given.
• This means that about 10% of loans are
never paid back, resulting in substantial
loss of money to the banks.
• When restructured and unrecognised
assets are added the total stress would
be 15-20% of total loans.
• NPA crisis in India is set to worsen.
• Restructuring norms are being misused.
• This bad performance is not a good sign
and can result in crashing of banks as
happened in the sub-prime crisis of 2008
in the United States of America.
• Also, the NPA problem in India is worst
when comparing other emerging
economies in BRICS.
 P a g e | 64

Impact of NPA:
• Lenders suffer a lowering of profit
margins.
• Stress in banking sector causes less
money available to fund other projects,
therefore, negative impact on the larger
national economy.
• Higher interest rates by the banks to
maintain the profit margin.
• Redirecting funds from the good
projects to the bad ones.
• As investments got stuck, it may result
in result in unemployment.
• In the case of public sector banks, the
bad health of banks means a bad return
for a shareholder which means that the
government of India gets less money as a
dividend. Therefore it may impact easy
deployment of money for social and
infrastructure development and results
in social and political cost.
• Investors do not get rightful returns.
• Balance sheet syndrome of Indian
characteristics that is both the banks
 P a g e | 65

and the corporate sector have stressed

balance sheet and causes halting of the
investment-led development process.
• NPAs related cases add more pressure
to already pending cases with the
judiciary.
 P a g e | 66

Report on my findings:
1) The home loan interest rate is same with
both the banks,that is,Axis and HDFC Bank
which is 6.90%.
2)Almost all the banks offer insurance with
home loan but Bank of Baroda exclusively
gives it’s customers a free credit card with an
insurance policy on taking a home loan.
3)Kotak Mahindra Bank has a slightly lower
interest rate on home loan than the other
banks which is 6.75%.
4)Axis bank has the highest interest rate on
home loans that starts from 15.75% while
other banks like HDFC and ICICI Banks start
from 10.75% and 11.25%.
5)Bank Of Baroda offers an exclusive loan for
senior citizens named Baroda Ashray(Reverse
Mortgage) and this type of loan is not
available in other banks.
6)Kotak Mahindra Bank also offers an
exclusive loan named “PayDay Loan” where the
customers can avail a loan when they are in
 P a g e | 67

need of urgent cash for their expenses and

this loan has to be paid within a month.
7)The credit deposit ratio of ICICI Bank is
the highest than all the banks.It means that
ICICI is providing more credits to their
customers from their deposits.It is clear that
ICICI is generating more risks for the
depositors.
 P a g e | 68

Websites referred:
www.hdfc.com
www.academia.edu
www.bing.com
www.icici.com
en.wikipedia.org
www.axisbank.com
www.statista.com
www.citefin.com
www.bankbazaar.com
www.financialexpress.com
www.slideshare.net
www.bankofbaroda.in
www.business-standard.com
www.kotak.com
dil.bankofbaroda.co.in
www.clearias.com