PROJECT REPORT

ON
“MICRO FINANCE WITH REFRENCE TO
J&K BANK”
Submitted in Partial Fulfillment of the requirement for the
Award of the Degree of

MASTER OF BUSINESS ADMINISTRATION (MBA I.C)

(2013-2018)

PUNJABI UNIVERSITY PATIALA

SUBMITTED TO: - SUBMITTED BY:

Dr. MONIKA MAM Roomi Jan
(Astt.Professor) MBA 4TH semester
ROLL NO 3761

CORDIA INSTITUTE OF BUSINESS MANAGEMENT

1
 DECLARATION

I declare that the Project entitled (“MICRO FINANCE WITH REFRENCE TO

J&K BANK”) is a record of independent work carried out by me under the
supervision and guidance of (Mr. IMRAN BHAT Deputy Branch Head in J & K
Bank). This has not been previously submitted for the award of any other
diploma, degree or other similar title.

Roomi Jan

ROLL NO.

MBA 4TH SEM

2
 ACKNOWLEDGEMENT

I owe a great many thanks to a great many people who helped and supported me
during the preparation of this project report.

My deepest thanks to Mr. HAKEEM MEHRAJ (Branch Head J&K Bank) the Guide
of the project for guiding and correcting various documents of mine with attention
and care. He has taken pain to go through the project and make necessary
corrections as and when needed.

Thanks and appreciation to the helping employees of J&K Bank for their support.

I would also thank my Institution and my faculty members without whom this
project would have been a distant reality.

I also extend my heartfelt thanks to my family, friends and well wishers.

Roomi Jan

ROLL NO. 3761

MBA 4TH SEM

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 CONTENTS

1. INTRODUCTION ABOUT BANKING…………………………………5-6

2. HISTORY OF BANKING IN INDIA……………………………………7-14

PHASE I
PHASE II
PHASE III
RESERVE BANK OF INDIA

3. INTRODUCTION ABOUT J&K BANK………………………………15-38

VISSION AND MISSION

4. INTRODUCTION ABOUT TOPIC (MICRO FINANCE)………….39-47

5. RESEARCH METHODOLOGY………………………………………48-50
6. OBJECTIVES OF THE STUDY………………………………………51-52
7. DATA ANALYSIS AND INTERPRETATION………………………53-62
8. FINDINGS………………………………………………………………63-65
9. SUGGESSTIONS AND CONCLUSION……………………………..66-67
10. LIMITATIONS OF THE STUDY…………………………………...68-69
11. BIBLOGRAPHY………………………………………………………70-71
12. QUESTIONAIRE………………………………………………………72-75

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 CHAPTER NO 1
INTRODUCTION ABOUT BANKING

5
 INTRODUCTION ABOUT BANKING

In modern age, banking constitutes the fundamental basis of economic growth.

The term bank is used since long time but there is no clear conception regarding
its beginning.
According to one viewpoint, in good old days, Italian moneylenders were known
as Banchi or Banacheri, because these people kept special type of table to transact
their business called Banchi. Origin of the word Bank belongs to the word Banchi
or to the Greek word Banque. Both these words refer to some kind of banking.
According to another viewpoint, bank originated from the German word (ital)
Banque meaning joint fund.
Casa De SanGiorgio was the first bank to be established in 1148.

The First Public Bank of Venice. It was established in 1157.

As per Banking regulating Act 1949, “BANKING” means

“Accepting for the purpose of lending or investment of deposit of money from the
public, repayable on demand or otherwise and withdraw able by cheque, draft, order or
otherwise”
In simple words bank refers to an institution that deals in money. This institution
accepts deposits from the people and gives loans to those who are in need.
Besides dealing in money, banks these days perform various other functions such
as credit creation, agency job and general service.
Bank therefore, is such an institution, which accepts deposits from the people
gives loans creates credit and undertakes agency work.

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 CHAPTER NO 2
HISTORY OF BANKING IN INDIA

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 HISTORY OF BANKING IN INDIA
Without a sound and effective banking system in India, it cannot have a healthy
economy. The banking system of India should not only be hassle free but it
should be able to meet new challenges posed by the technology and any other
external and internal factors.
For the past three decades, India’s banking system has several outstanding
achievements to its credit. The most striking is its extensive reach. It is no longer
confined to only metropolitan or cosmopolitan in India. Infact Indian banking
system has reached even to the remote corner of the country. This is one of the
main reasons of the India’s growth process.
The government regular policy for Indian bank since 1969 has paid rich dividends
with the nationalization of fourteen major private banks of India. Not long ago, an
account holder had to wait for hours at the bank counters for getting a draft or for
withdrawing his/her money. Today he/she has various options available in front of
him that are easiest and consume very little time. Gone are the days when the
most efficient bank transfer money from one branch to another in two days. Now
it is as simple as instant messaging or dial a pizza. Money has become the order
of the day.
The first bank in India though conservative, was established in 1786. from 1786
till today, the journey of Indian banking can be segregated into three distinct
phases which are mentioned below.
 Phase-I (from 1786 to1969 of Indian banks).
 Phase-II (From Nationalization of Indian banks to 1991 i.e. prior to
Indian banking sector reforms).
 Phase-III (with the advent of Indian financial and banking sector reforms
after 1991).
To make this clear, all the phases have been discussed one by one very briefly as
under:

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Phase-I
The General Bank of India was set up in the year 1786. Next came Bank of
Hindustan and Bengal Bank. The East India Company established Bank of Bengal
(1809), Bank of Bombay (1840) and Bank of Madras (1843) as independent units
and called it Presidency Banks. These three banks were amalgamated in 1920 and
Imperial Bank of India was established which started as private shareholders
banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indian,
Punjab National Bank Ltd. was set up in 1894 with headquarters at Lahore.
Between 1906 and 1913, Bank of India, Central Bank of India, Bank of Baroda,
Canara Bank, Indian Bank, and Bank of Mysore were set up. Reserve Bank of
India came in 1935.
During the first phase the growth was very slow and banks also experienced
periodic failures between 1913 and 1948. There were approximately 1100 banks,
mostly small. To streamline the functioning and activities of commercial banks,
the Government of India came up with The Banking Companies Act, 1949 which
was later changed to Banking Regulation Act 1949 as per amending Act of 1965
(Act No. 23 of 1965). Reserve Bank of India was vested with extensive powers
for the supervision of banking in India as the Central Banking Authority. During
those day’s public has lesser confidence in the banks. As an aftermath deposit
mobilization was slow. Abreast of it the savings bank facility provided by the
Postal department was comparatively safer. Moreover, funds were largely given
to traders.

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Phase-II
Government took major step in this Indian banking sector reform after
independence. Seven banks forming subsidiary of State Bank of India was
nationalized in 1960’s on 19th July 1969, major process of nationalization was
carried out. It was the effort then prime minister of India, Mrs. Indra Gandhi.
Fourteen major commercial banks in the country were nationalized.

Second phase of nationalization Indian banking sector reform was carried out in
1980 with seven more banks. This step brought 80% of the banking segment in
India under government ownership.

The following are the steps taken by the government of India to regulate banking
institution in the country:

 1949: Enactment of banking regulating act.

 1955: Nationalization of State Bank of India.
 1959: Nationalization of SBI subsidiaries.
 1961: Insurance cover extended to deposits.
 1969: Nationalization of 14 major banks.
 1971: Creation of credit Guarantee Corporation.
 1975: Creation of regional rural banks.
 1980: Nationalization of seven banks with deposits over 200 crore.

After the nationalization of banks, the branches of the public sector bank in India
rose to approximately 800% in deposits and advances took a huge jump by
11000%. Banking in the sunshine of government ownership gave the public

10
implicit faith and immense confidence about the sustainability of these
institutions.

Phase-III

This phase has introduced many more products and facilities in the banking sector
in its reforms measure. In 1991, under the chairmanship of M Narasimham, a
committee was set up by his name, which worked for the liberalization of banking
practices.

The country is flooded with foreign banks and their ATM stations. Efforts are
being put to give a satisfactory service to customers. Phone banking and net
banking is introduced. The entire system became more convenient and swift.
Time is given more importance than money.

The financial system of India has shown a great deal of resilience. It is sheltered
from any crisis triggered by any external macroeconomics shock as other East
Asian Countries suffered. This is all due to a flexible exchange rate regime, the
foreign reserves are high, the capital account is not yet fully convertible, banks
and their customers have limited foreign exchange exposure.

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 COMPOSITION OF THE BANKING SYSTEM IN
INDIA
At present, the number of nationalized banks is twenty. Several foreign banks
were allowed to operate as per the guidelines of the RBI. At present the banking
system can be classified in following categories:
PUBLIC SECTOR BANKS
 Reserve Bank of India (RBI)
 State Bank of India and its associate Banks
 Nationalized Banks (20 in number)
 Regional Rural Banks sponsored by Public sector Banks.
PRIVATESECTOR BANKS
 Old Generation Private Banks
 New Generation Private Banks
 Foreign Banks in India
 Scheduled co-operative Banks
 Non Scheduled Banks
CO-OPERATIVE SECTOR BANKS
 State co-operative Banks
 Central co-operative Banks
 Primary agriculture credit societies
 Land Development Banks
 Urban co-operative banks
 State Land development banks
DEVELOPMENT BANKS

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  Industrial Financial corporation of India (IFCI)
 Industrial Development Bank of India (IDBI)
 Industrial Credit and Investment Corporation of India (ICICI)
 Industrial Investment Bank of India (IIBI)
 Small Industrial Development Bank of India (SIDBI)
 National Bank For Agriculture And Rural Development (NABARD)

RESERVE BANK OF INDIA

The reserve Bank of India (RBI) is the central bank of India, and was established
on April 1, 1935 in accordance with the provisions of the Reserve Bank Of India
act, 1934. The central office is located at Mumbai since inception. Though
originally privately owned, since nationalization in 1949, RBI is fully owned by
the government of India.
RBI is governed by a central board (board headed by a governor) appointed by the
central Government of India. The current governor of RBI is Dr.Y.Vanugopal
Readdy, who succeeded Dr. Bimal Jalan on September 6, 2003. RBI has 22
regional offices across India.

13
 CHAPTER NO 3
INTRODUCTION ABOUT J&K BANK

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INTRODUCTION
The Jammu & Kashmir Bank is today one of the fastest growing banks in India
with a network of more than 900 branches/offices including extension counters
spread across the country offering world class banking products/services to its
customers. Today, the Bank has a status of value driven organization and is
always working towards building trust with Shareholders, Employees, Customers,
Borrowers, Regulators and other diverse Stakeholders, for which it has adopted a
strategy directed to developing a sound foundation of relationship and trust aimed
at achieving excellence, which of course, comes from the womb of good
Corporate Governance. Good Governance is a source of competitive advantage
and a critical input for achieving excellence in all pursuits. J&K Bank considers
good Corporate Governance as the sine qua non of a good banking system and
has adopted a policy based on all the four pillars of good governance –
transparency, disclosures, accountability and value, enabling it to practice
trusteeship, transparency, fairness and control, leading to stakeholders delight,
enhanced shareholder value and ethical corporate citizenship. It also ensures that
bank is managed by an independent and highly qualified Board following best
globally accepted practices, transparent disclosures and empowerment of
shareholders, besides ensuring to meet shareholders aspirations and societal
expectations following the principles of management's executive freedom to drive
the bank forward without undue restraints but within the framework of effective
accountability. The excellence achieved by the bank in its operations stemming
from the roots of voluntary good Governance has not gone unrecognized and
Bank has recently bagged three very prestigious awards for following fair
business practices and commitment to social obligations.

15
Historical background
Entire banking in the state of Jammu and Kashmir was performed by traditional
lenders till 1920 -30 and that too at exorbitant interest rates .At the same time
some banks functioned at a very limited scale, such as Punjab National Bank
Limited, Grindlay's Bank and Imperial Bank of India.
The role of these banks was reduced to the acceptance of deposits, as they could
not grant loans and advances to the people of the state owing to the statutory
limitations. Under this scenario banks could not revolutionize the financial and
social position of the people of the state. To over come this critical situation the
then Maharaja of the state conceived an idea of setting up of a state bank in the
state. After a prolonged exercise and deliberations the assignment
for establishment of “The Jammu and Kashmir Bank Limited” was given to the
late Sir Sorabji N Pochkhanwala, the then Managing Director of the Central Bank
of India. Mr.Pochkhawala formulated a scheme on 24-09-1930, suggesting
establishment of a semi state Bank with participation in capital by state and the
public under the control of state Government. Thus the bank was formally
incorporated on the Fist of October 1938 and commenced business from 4th of
July 1939 at its Registered Office Residency Road Srinagar, Kashmir. The Jammu
& Kashmir Bank Limited has been the first of its nature and composition as a
State owned bank in the country .The state Govt. besides contributing half of the
issued capital also appointed it as its bankers for general banking and treasury
business .In its formative years, the bank had to encounter several serious
problems, particularly around the time of independence, when out of its total of
ten branches two branches of Muzaffarabad and Mirpur fell to the other side of
the line of control(now Pak Administered Kashmir) along with cash and other
assets, in 1947. However the State Govt. came to its rescue with the assistance of
Rs.6.00 Lacs to meet the claims however the bank overcomes its difficulties and
kept growing.

16
Following the extension of Central laws to the state of Jammu & Kashmir, the
bank was defined as a govt. company as per the provisions of Indian companies
act 1956 .The bank had its first full time chairman in 1971, following social
Central measures in banks .The year 1971 was a turning point for the bank on
conferment of scheduled bank status and witnessed remarkable progress in all the
vital fields of operations .The bank was declared as "A" Class Bank by Reserve
Bank of India in 1976 .In recognition of dominant role and exalted performance,
Reserve bank of India appointed the bank as its agent for performing the general
banking business of the Central Govt. especially in maintaining currency chests
and collection of taxes.
Financials
The Bank recorded an outstanding achievement in the fiscal (2013-14) in key
areas of its operations. During the year 2013-14, the Bank achieved business
turnover of Rs.70870.24 crore from Rs.60294.75 crore of the previous year .
During this year there was an improvement in operational efficiency of the bank,
The Capital & Reserves of the Bank increased to Rs. 2008.73 crore as on 31 st
march 2012 to Rs.11799.47 crore of the previous year. The Capital Adequacy
Ratio (CAR) stood at 13.24% as on 31 st march 2014 which is comfortably much
above the minimum stipulated by Reserve Bank of India. The bank does not
foresee any major impact on CAR on implementation of Basel II norms.
The Bank posted a net profit of Rs.615.49 crore for the year 2013-14 against the
figure of Rs.512.84 crore in 2010-11 registering an impressive growth ..

Deposits
Bank's aggregate deposits recorded Rs.44676.29 crore as on 31st march 2014. The
deposit mix has shown improvement with a focused attention on liability
management contribution in increased low cost CASA ratio to 37%.

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Advances
The credit portfolio of the Bank also recorded an appreciable growth during the
year. The total advances of the Bank recorded Rs 23057.23 crore as on 31th
march 2014
Advances yield in percentage as given:
2013-14 (10.68) %
2010-11 ( 10.65) %
2009-10 ( 11.53) %

Net Performing Assets

The net NPAs stood at 1.13% as on March 31 st and NPA coverage ratio was
maintained at over 92.71.
Foreign Exchange
During the year, the Foreign Exchange business recorded an impressive growth of
19.57%, moving to Rs.22573.58 crore and generated a net earning of Rs 8.84
crore against Rs. 7.39 crore of the previous year. The export turnover of the Bank
increased from Rs.1928.86 crore to Rs.2211.51 crore registering an increase of
15%.
Keeping in view overall performance of the Bank, the Bank, after the approval of
shareholders, paid 80% dividend (free of tax) for the year ended 31st March 2012.
The productivity levels continued to show sustained growth with per branch and
per employee business increasing to Rs.9373 lakhs and Rs.7386.72 lakhs
respectively of the previous year.

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Vision and Mission

VISION
To engender and catalyze economic
transformation of Jammu and Kashmir and
capitalize the growth induced financial
prosperity thus engineered. The bank
aspires to make Jammu and Kashmir the
most prosperous state in the country, by
helping create a new financial

MISSION
J&K Banks Mission is two fold:
 To provide the people of J&K
international quality financial service
solutions.
 To be a super-specialist bank in the
rest of the country.
The two together will make us the most
profitable bank in the country.

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 Information Technology Initiatives

With a view to provide greater convenience and alternate channels to customers,

J&K Bank launched a slew of IT initiatives during the year. These include:

 Interconnectivity of over 900 branches

 Total number of ATMs increased to 2000 plus

 Number of branches/offices rolled to core banking solution.

 Number of RTGS enabled branches through Treasury Office Mumbai-12

 Number of Debit cards issued reached to 13,00,000

 Number of point of sale terminal installed increased to 1000 plus.

The card issuing and accruing department has started in-house development and
deployment of Automated Debit Card Requisition Software application over
Intranet and Reconciliation Software for Master Card Domestic/International
Transactions & National Financial Switch (NFS) transactions. To push up the
credit card base, the bank also outsourced marketing of credit cards.

Recognition and Awards

The Bank recently won the prestigious Asian Banking Award – 2005 for its
‘Development Project Financing Programme', contributing significantly to the
development of tourism industry of the J&K State. The Under Secretary Finance
presented the award, Philippines, at a glittering Gala Dinner award function held
at Manila, Philippines on June 17, 2005.
The annual Asian banking awards recognize and honor Asian banks for
outstanding, innovative and world-class products and programme implemented
during the previous year. It is the most respected and premier banking awards
programme in Asia Pacific region.
It is worth mentioning that the Bank has won the Asian Banking Award
consecutively for the second year. Last year, the Bank won the award for

20
Customer Convenience Programme and was also given runners up certificate for
its project ‘Motivating Employees for Better Performance' under ‘operational
efficiency programme' category.
The Bank was ranked fifth among the top ten Asian banks and 762nd among top
1000 World banks. A renowned business journal "Business Today" ranked JK
Bank among 25 top investor friendly companies in India, the only bank in the
whole Indian Banking industry, which has been ranked in the magazine among
first 10 Investor Friendly Companies. The Bank for the second consecutive year
was ranked Best Private Sector Bank in Financial Express/ Ernest and Young
combined Survey for the year 2002-03 released recently. Bank was awarded
‘Shiromani Award' for outstanding achievements in the field of banking and
commitment to national progress and human welfare during the year under report.
The Bank has figured among 24 Indian companies in Forbes Global - 100 best
‘under a billion Asia's Rising Companies', listed by Forbes magazine in its latest
issue dated November 1. The publication has commended J&K Bank for
representing ‘economic dynamism' in the region, sustained growth in all spheres
and an excellent track record of rewarding its shareholders.

Services Provided by J&K Bank

The J&K Bank is the organization that is serving the people over the decades.
This is the only organization in the valley, which has a major contribution towards
the economy of J&K state. It is the J&K Bank who had lifted the people of J&K
for the extreme poverty to the leading business of the valley. Examples are
Kanwal Spices.
The J&K Bank has always tried to provide efficient and better service to the
customers. The J&K bank is trying to provide the qualitative services to its
customers. The bank has installed a network of about 1605 ATMs both Off & On
site at various centers across the country. Besides, Anywhere Banking and Tele-
Banking services are available at various locations. The Central DATA centre of
the bank has been set up with Finacle - as core banking solution.
The rollover of bank on the data center has already begun. With the commencing
of the said Data Centre, the Bank is eyeing at offering Internet Banking soon to its

21
customers.
Anywhere banking is presently available almost at all centers and with the
completion of interconnectivity; the said facility will be made available from all
its computerized branches. Tele banking is available at most of the centers.
Though, with the increase in the number of customers the bank is going to
facilitate its customers with Tele-banking facilities with ease.
The bank introduced new value added floating rate deposit schemes viz., ‘Super
Earner Deposit Scheme’ and ‘Super Reinvestment Deposit Scheme’ to add to the
options/choices available to the customers. Bank also introduced another new
deposit product under the name and style of ‘Mehendi Deposit Scheme’ targeted
for girl child. The scheme has also value-added features and a free accidental
insurance cover.
The bank continued its emphasis on maintaining high standards of service to its
customers. In this direction, the bank introduced various hi-tech and customer
friendly products during the year, providing value added services to achieve
customer satisfaction. Customer complaints received are dealt promptly and
expeditiously. The bank is a member of the Banking Codes and Standards Board
of India and has adopted ‘Code of Bank’s Commitment to Customers’, a
voluntary code providing protection and ‘Right to Know’ to the customers. The
bank has established a 24 X 7 help desk to address customer queries and the desk
is slated to be converted into a full fledged call centre in 2009-10. The bank is
also keenly pursuing for ISO 9000 certification for its customer service.
The bank has revamped its delivery channels and added ‘Business Development
and Promotion Centre’s’ (BDPCs) with an aim to get closer to and provide hassle-
free service to the customers. Marketing managers and business promotion
officers have been placed in all the zones for execution of the marketing
initiatives.

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Loan facility given By The Bank
The different types of loans provided by the bank to its customers as per their
requirement are:

1. Educational Loan
2. House Loan

3. Car Loan

4. Consumer Loan

5. Dastkar Finance Scheme

6. Craft Development Scheme

7. Khatamband Finance Scheme

8. Roshni Financing Scheme

Personal Loan Scheme:

In addition to above products JK bank also extend “Personal Loan Facility” for
general public, which covers the following segment.
1. Housing Loan Scheme.
2. Consumption Loan Scheme.
3. Car Loan Scheme.
4. Education Loan Scheme.
5. Consumer Loan Scheme.
6. Loan for financing of School buses.

New Products Launched during 2013-14

In synchronization with the Bank’s new strategy focus on increasing lending and
financial deepening of economy in J&K State, a host of new products customized

23
and tailored to the requirements of customers were designed and launched. Some
of these products are:
1. All purpose Agri-Term Loan.
2. Term Loan for B.Ed / M.Ed Courses.
3. Housing Loan for Leh.
4. Tax Saver Term Deposit Scheme.
5. Smart Saver.
6. Naunihalon Ka Naya Savera.
7. Used-car Loan.
8. Value Added Current accounts.
Deposit Schemes & Products
It has been an endeavor of JK bank to indicate all the sections of the society into
the fold of basic banking service besides inculcating saving habits in the general
masses. Accordingly, various deposit products have been designed by JK bank
which are discussed hereunder:
1. Savings Account
2. SB Ujala (No-frills Saving Account)
3. Childcare Deposit Scheme
4. Depositors Pension Account
5. Current Deposit.
Risk Management
The bank continued to focus on risk management on an enterprise wide basis and
developing Integrated Risk Management Systems for efficient management of
various risks viz. Credit, Market and Operational. The bank has taken the
following initiatives for strengthening risk management practices in line with
business strategies as also to achieve compliance with industry best practices and
regulatory requirements.
i) Credit Risk: The bank has focused on improving the credit appraisal and
approval processes. New standardized appraisal formats have been introduced in
the Corporate and SME segments. Centralized processing of credit proposals has
been introduced to separate the business development and credit appraisal system.
To bring objectivity to the credit risk assessment, eligible borrowers in corporate

24
and SME segments are proposed to be brought under the internal credit rating
system, which is in the final phase of customization and was operational during
2007-08. Credit Audit / Loan Review Mechanism have been introduced for
standard accounts of Rs. 5 Crore and above and identified weak accounts of Rs. 1
Crore and above with elevated risk characteristics. It would help to improve the
credit quality and manage credit risk proactively.
The bank is also doing periodic parallel runs of Standardized Approach for credit
risk measurement as per regulatory guidelines.
ii) Market Risk: The bank is implementing the recommendations of the
consultants engaged by the bank for developing a cohesive integrated risk
management system particularly in relation to interest rate risk quantification
techniques, liquidity management and reporting systems. With an endeavor to
further improve our Asset Liability management and thereby the market risk
management, the bank has switched over to Duration Gap Analysis instead of the
Traditional Gap Analysis. With these systems in place, the bank has contained
market risk particularly on investment portfolio by reducing the non-SLR bonds
and debentures portfolio and the duration of overall investment portfolio.
iii) Operational Risk: The bank has constituted an Operational Risk
Management Committee (ORMC) at the apex level to monitor progress on
operational risk management. A comprehensive policy for Disaster Management
and Business Continuity Plan (BCP) has been formulated. The bank has already
initiated identification of operational risk areas of business units, capturing
various operational risk events and analyzing their causative factors.
iv) Migration to Basel II: The bank is gearing up to migrate to ‘Revised Capital
Adequacy Norms’ by March 2009 i.e. the time schedule set out in RBI guidelines
on the subject. Defining and restructuring the management information system for
this purpose has been initiated. For smooth transition, process for conducting
parallel runs for calculation of capital requirements for credit risk and operational
risk as per Standardized Approach and Basic Indicator Approach respectively has
been established.

25
Third Party Products
The Bank diversified its business activities into insurance, both life and non-life.
The bank is not only the strategic partner of METLIFE INDIA INSURANCE CO.
Ltd but also has been acting as corporate agent of the said company for the
distribution of their life insurance products through network of its branches. The
Bank also has entered into a tie-up with BAJAJ ALLIANZ GENERAL
INSURANCE COMPANY for the distribution of their non-life insurance
products. In addition to this the bank had made tie ups with the mutual fund
companies for selling their mutual funds. The companies who mutual funds are
sold by J&K Bank are RELIENCE, ICICI PRUDENTIAL, UTI, KOTAK
MAHINDRA and in the near future, it is going to get tie ups with other
companies for the same.

26
BANKS NEW IDENTITY

The new identity for J&K Bank is a visual representation of the banks philosophy
and business strategy. The three colored squares represent the three regions of
J&K namely Jammu, Kashmir and Ladakh. The counter form created by the
interactions of the squares is a falcon with outstretched wings-a symbol of power
and empowerment.

Green signifies Growth and Renewal.

Blue conveys Stability and Unity.

Red Represent Energy and Power.

27
CHAIRMAN/CEO

EXECTIVE DIRECTOR

PRESIDENT

VICE PRESIDENTS
Senior Executive Manager

Executive Manager

Senior Executive

Executive

Associate Executive

Banking Associate

Banking Attendant

BACKGROUND
NEED FOR MICRO-FINANCE: THE GAP BETWEEN DEMAND AND
SUPPLY
Since the 1950,s various governments in India have experiments in India have
experimented with a large number of grant and subsidy based poverty alleviation
programmers’. Studies show that these mandatory and dedicated subsidized

28
financial programmers’ implemented through banking institutions, have not been
fully successful in meeting their social economic objective:
The common features of these programmers’ were:
I. Target orientation
II. Based on grant / subsidy, and
III. Credit linkage through commercial banks.
These Programmers
a. Were often not sustainable
b. Perpetuated the dependent status of the beneficiaries.
c. Depended ultimately on government employees for delivery.
d. Led to misuse of both credit and subsidy and
e. Were treated at best as poverty alleviation interventions.
This thing was totally ignored by the banks. The reason behind this was that,
Banks too never really look on them as a profitable and commercial activity .
According to a 1995 World Bank estimate, in most developing countries the
formal financial system reaches only the top 25% of the economically active
population-the bottom 75% have no access to financial services apart from
moneylenders’.
In India too the formal financial institutions have not been able to reach the poor
householder, particularly women, in the unorganized sector. Structural rigidities
and overheads lead to high cost of making small loans. Organizational philosophy
has not been oriented towards recognizing the poor as credit worthy. The problem
has been compounded by low level of influence of the poor, either about their
credit worthiness or their demand for savings services.
Large banks at government request have often implemented micro-finance
programmers’. Low levels of recovery have been further eroded due to loan
wavier programmers’ leading to institutional disenchantment with lending to
small borrowers.
All this gave rise to the concept of micro-credit for the poorest segment along
with a new set of credit delivery techniques. With the support of NGO, s an
informal sector comprising Small Self Help Groups (SHGs) [Definition of SHGs
in Box-A] started mobilizing savings of their members and lending these

29
resources among the members on a micro scale. The potential of these SHGs to
develop as local financial intermediaries to reach the poor has gained recognition
due to their community based participatory approach and sustainability- recovery
rates have been significantly higher than those achieved by commercial banks in
spite of loans going to poor, unorganized individuals without security or
collateral.
Table-A: SHG Definition

A Self-Help Group (SHG) is a registered or unregistered group of micro

entrepreneurs having homogenous social and economic background voluntarily,
coming together to save small amounts regularly, to mutually agree to contribute
to a common fund and to meet their emergency needs on mutual help basis. The
group members use collective wisdom and peer pressure to ensure proper end-use
of credit and timely repayment thereof. In fact, peer pressure has been recognized
as an effective substitute for collaterals.

Advantages of financing through SHGs

An economically poor individual gain strength as part of a group. Besides,

financing through SHGs reduces transaction costs for both lenders and borrowers.
While lenders have to handle only a single SHG account instead of a large
number of small-sized individual accounts, borrowers as part of a SHG cut down
expenses on travel (to & from the branch and other places) for completing paper
work and on the loss of workdays in canvassing for loans.

Success stories in neighboring countries, like Grameen Bank in Bangladesh, Bank

Rakiat in Indonesia, commercial & Industrial Bank in Philippines etc., gave
further boost to the concept in India in the 1980s.
The Global summit on Micro-Finance held in Washington in feb.1997 set a global
target of covering 100 million poor families with credit by 2005. It was accepted
that 25-30 million of these could be in India alone.

30
The poor in India define the micro-finance market. The Planning Commission
estimate of 1993-94 says36% of the population or 320 million people live below
the poverty line, out of which 140-150 million are women. Assuming that only
30% of the country’s poor women are ready to adopt micro-finance as a method
of poverty alleviation, it is estimated that 40-50 million poor women would need
credit.
As against this, it is estimated that all agencies in India engaged in the provision
of micro-finance services, would have together covered barely 1 million poor
people by the close of 1998-99.
The most prominent national level micro-finance apex organization providing
micro-finance services for women in India is the National Credit Fund for Women
or the Rashtriya Mahila Kosh (RMK).
CONCEPT AND FEATURES OF MICRO-FINANCE
Micro-finance, as being practiced by the National Credit Fund for Women or the
Rashtriya Mahila Kosh (RMK), could be defined as a set of services comprising
the following activities:

Table-B: Micro Credit and Micro Savings

Small loans; primarily for income generating activities, but

also for consumption and contingency needs.
Micro Credit is defined as provision of thrift, credit and other
a) Micro-credit financial services and products of very small amount to the
poor in rural, semi-urban and urban areas for enabling them to
raise their income levels and improve living standards. Micro
Credit Institutions are those which provide these facilities

Micro-
b) Thrift or small savings from borrower’s own resources.
savings

The main features of micro-finance services being provided by RMK are:

1. It is a tool for empowerment of the poorest, the higher the income and better
the asset position of the borrower, the lower the incremental benefit from
further equal doses of micro-credit is likely to be.
2. Delivery is normally through self help groups (SHGs).

31
 3. It is essential for promoting self-employment. The opportunities of wage
employment are limited in developing countries. Micro-finance increases the
productivity of self-employment in the informal sector of the economy
-generally used for (a) direct income generation (b) rearrangement of assets
and liabilities for the household to participate in future opportunities and (c)
consumption smoothing.

4. It is not just a financing system, but a tool for social change, specially for
women. It does not spring from market forces alone, it is potentially welfare
enhancing. There is a public interest in promoting the growth of micro finance.
This is what makes it acceptable as a valid goal for public policy.
5. Because micro-credit is aimed at the poorest, micro-finance lending
technology needs to mimic the informal lenders rather than the formal sector
lending. It has to (a) provide for seasonality (b) allow repayment flexibility (c)
eschew bureaucratic and legal formalities (d) fix a ceiling on loan sizes.
Microfinance approach is based on creation proven truths, which are not
always recognized. These are:
That the poor are bankable and successful initiates in micro-finance
demonstrate that there need not be trade off between reaching the poor
profitability. Microfinance constitutes statement that the borrowers are not
‘weaker sections’ in need of charity, but can be treated as responsible people on
business terms for mutual profit.
 That almost all poor householder need to save, have the inherent
capacity to save small amounts regularly and are willing to save
provided they are motivated and facilitated to do so
 That easy access to credit is more important than cheap subsidized
credit which involves lengthy bureaucratic procedures.( some
institutions in India are already lending to groups or SHGs at
higher rates. This may prevent the groups from enjoying a
sufficient margin and rapidly accumulating their own funds, but

32
 members continue to borrow at these high rates. Even those who
can borrow individually from banks.

REASONS FOR FOCUS ON POOR WOMEN

The National Credit Fund for Women or the Rashtriya Mahila Kosh (RMK)
is working exclusively for poor women. Its loans are available solely and entirely
to this target group. The reasons for this are several:
 Among the poor women are the most disadvantaged they are
characterized by lack of education and access to resources, both of which
are required to help them work their way out of poverty and for upward
economic and social mobility.
 The problem is more acute for women in countries like India, despite the
fact that women’s labour makes a critical contribution to the economy this
is due to low social status and lack of access to key resources.
 Evidence shows that groups of women are better customer than men they
are better managers of resources, benefits of loan are spread wider among
the householder if loans are routed through women mixed groups are
often inappropriate in India society record of all male groups is worse
than that of all women groups, everywhere.
RMK-ITS PROFILE, AIMS &OBJACTIVES, ROLE
It has been felt for some time in India that the formal financial institutions in the
country needs of poor women, particularly in the unorganized sector, have not
adequately addressed the credit. The vast gap between demand for and supply of
credit to this sector established the need for a Notional credit fund for women.
The national credit for women or the Rashtriya Mahila Kosh (RMK) was set
up in March 1993 as an independent registered society by the Department of
women &Child Development in Government of India’s Ministry of Human
Resource Development with an initial corpus of Rs.310, 000,000 not to replace

33
the banking sector but to fill the gap between what the banking sector offers and
what the poor need.

Its Main Objectives Are:

 To provide or promote the provision of Micro-Credit to poor women for
income generation activities or for asset creation.
 To adopt a quasi-informal delivery system, which is client friendly, uses
simple and a minimal procedure, disburse quickly and repeatedly, has
flexibility of approach, links thrift and savings with credit and has low
transition costs both for the borrower and for the lender.
 To demonstrate and replicate participatory approaches in the organization
of women’s groups for thrift and savings and effective utilization of credit.
 To use the group concept and the provision of credit as an instrument of
women’s empowerment, socio-economic change and development.
 To co-operate with and secure the co-operation of the Government of
India, State Governments, Union Territory administrations, credit
institutions, industrial and commercial organizations, NGOs and other in
promoting the objectives of the Kosh.
 To disseminate information and experience among all these above
agencies in the government and non-government sectors in the area of
microfinance for poor women.
 To receive grants, donations, loans, etc., for the furtherance of the aims
and objectives of the Kosh.
The office of the Kosh is situated in New Delhi. The Kosh does not have any
branch offices.
The executive Director is chief executive officer of the Kosh. The executive
Director functions under the overall supervision, direction and control of the
governing board.

34
The governing Board comprises 16 members consisting of senior officers of the
government of India and state government, specialist and representatives of
NGOs active in the field of micro-finance for women. The governing board is
chaired by the minister in charge of the department of women & child
development in the Government of India.
The general body of three Kosh consists of all members of the board, institutional
members and individual members.

The Kosh has three main rules:

Wholesaling Role
Its act as a wholesaling apex organization for canalizing funds from
government and donors to retailing intermediate micro-finance
organizations (IMOs)
[The Kosh has no for received only one-time grant from government and
has not needed to raise fund from any other sources]
Market Development Role
It develops the supply side of the micro-finance market by offering
institution building support to new and existing-but-inexperienced IMOs by
structures of incentives, transfers of technology, training of staff and other
non-financial services.
[The Kosh realizes that it can play a value adding wholesaling role only
when a sufficiently large and well established micro-finance sector already
exists-this depends on the number of IMOs and the sustainability of IMOs-
subsided institution building increases the equity of any IMO can reduce
the effectiveness of any institution building efforts].

Advocacy Role
RMK acts as an advocate or agent for influencing development and micro-finance
policy and creating a more enabling policy and legal environment for spread of
micro-finance activities in India.

35
 CHAPTER NO 4
INTRODUCTION ABOUT TOPIC
(MICRO FINANCE)

36
 INTRODUCTION
The interest in micro-finance (defined in Table-C) has burgeoned during the last
tow decades: multilateral lending agencies, bilateral donor agencies, developing
and developed country governments, and non government organizations NGOs all
support the development of micro-finance. A verity of private banking institutions
has also joined this group in recent years. As result micro-finance services have
grown rapidly during the last decade, although from an initial low level, and have
come to the forefront of development discussion concerning poverty reductions.
Despite this growth as concluded in the recently completed rural Asia study,
“rural finance markets in Asia are ill-prepared for the 21st century”. About 95
percent of some 180 million poor households in the Asian and pacific Region still
have little access to institutional financial services. Development practitioners,
policy makers, and multilateral and bilateral lenders, however, recognize that
providing efficient microfinance services for this segment of the population is
important for a variety of reasons.
I. Microfinance can be critical element of an effective poverty reduction
strategy. Improved access and efficient provision of savings, credit,
and insurance facilities in particular can enable the poor to smoothen
their consumption, manage their risks better, build their income
earning capacity, and enjoy an improved quality of life. This is shown
in box-2 below. Microfinance services can also contribute to the
improvement of resource allocation, promotion of markets, and
provide better technology. Thus, microfinance helps to promote
economic growth and development.

37
 II. Without permanent access to institutional microfinance, most
households continue to rely on meager self-finance or informal
sources of microfinance, which limits their ability to actively
participate in and benefit from the development opportunities.
Table-C: Definition of Microfinance
Microfinance is the provision of a board range of financial services
such as deposits, loans, payments services, money transfer, and
insurance to poor and low-income household and their micro
enterprises. Microfinance services are provided by three types of
sources:
 Formal institution, such as rural banks and cooperatives;
 Semiformal institutions, such as, nongovernmental
organizations; and
 Informal sources such as moneylenders and shopkeepers.
Institutional microfinance is defined to include microfinance services
provided by both formal and semiformal institutions. Microfinance are
defined as institutional whose major business is the provision of
microfinance services.
III. Microfinance can provide an effective way to assist and empower
poor women, who make up a significant proportion of the poor and
suffer disproportionately from poverty.
IV. Microfinance can contribute to the development of the overall
financial system through integration of financial markets.
Table-D: Micro-finance Poverty Reduction Nexus
Financial Results Impact on Poverty
services
Savings facilities More financial savings, Reduce household
of microfinance Income from savings, vulnerability to risks/external
institutions Greater capacity for self- shocks,
(MIFs) investment, Less volatility in household
Capacity to invest in better consumption,
technology, Greater income,

38
 Severity of poverty is
Enable consumption reduced,
smoothening, Empowerment,
Enhance ability to face Reduce social exclusion.
external shocks,
Reduce heed to borrow from
money lenders at high interest
rates,
Enable purchase of productive
assets,
Reduce distrust selling of
assets, improve allocation of
resources,
Increase economic growth.
Credit Facilities Enable taking advantage of Higher income,
profitable investment More diversified income
opportunities, sources,
Lead to adoption of better Less volatile income,
technology, Less volatility in household
Enable expansion of micro- consumption,
enterprises, Increase household
Diversification of economic consumption,
activities, Better education for children,
Enable consumption Severity of poverty is
smoothing, reduced,
Promote risk taking, Empowerment,
Reduce reliance on expensive Reduce social exclusion.
informal sources,
Enhance ability to face
external shocks,
Improve profitability of
investments,

39
 Reduce distress selling of
assets,
Increase economic growth.
Insurance More savings in financial Greater income,
services assets, Less volatility in
Reduce risks and potential consumption,
losses, Greater security.
Reduce distress selling of
assets,
Reduce impact of external
shocks,
Increase investments.
Payments/Money Facilitate trade and Greater income,
Transfer Services investments. Higher consumption.
.
Developing countries in the Region have used microfinance services to reduce
poverty. About 21% of the Grameen Bank borrowers and 115 of the borrowers of
the Bangladesh Rural Advancement Committee, microfinance NGO, managed to
lift their families out of poverty within about four years of participation. These
services also had a significant positive impact on the severity of poverty among
the poor’s. Extreme poverty declined from 33% to 10% among Grameen Bank
participants, and from 34% to 14% among Bangladesh Rural advancement
Committee participants. Without exclusively targeting the poor, the Bank Rakyat
Indonesia (BRI) have also assisted hundred of thousands of household in lifting
themselves to come out of extreme poverty over the past decades. a 1988 sample
survey showed that micro credit has had a major impact on their families
standards of living.
The study estimated that net household incomes of borrowers increased by about
76% and the employment increased by 84% with three years of program
participation in Indonesia. The studies have, in general, shown that microfinance
services have also had a positive impact on the specific socioeconomic variables
such as children’s schooling, household nutrition status, and women’s
empowerment. Microfinance institutions have also brought the poor, particularly

40
poor women, into the formal finance system and enabled them to access credit
and accumulate small savings in financial assets, reducing their household
poverty. However, researchers and practitioners generally agree that the poorest
of the poor are yet to benefit from microfinance programs in most of the countries
partly because most MFIs (Definition in Table-E) do not offer products and
services that are attractive to this category. Thus, to increase the overall impact of
microfinance on poverty reduction, it is essential to extend a wide range of
services on continuing basis to the poor who are still excluded from the benefit of
microfinance.

Providing microfinance services efficiently top this excluded segment of the

market remains a major challenge in the region. However, given that the Asian
Development Bank (ADB) has adopted poverty reduction as its overarching
objective, ADB must respond to this challenge effectively. Supporting the
development of sustainable MFIs that can reach the poor provides ADB an
opportunity to respond to this challenge and make a significant contribution to its
poverty reduction objective and the development of the overall financial system in
its developing member countries (DMCs).
Table-E: - Definition of MFIs
Micro-finance Institutions (MFIs) is an organization that offers financial services
to low-income population. Almost all these offer micro credit and only take back
small amount of savings from their own borrowers not from the general public.

J&K Banks Micro-Finance

Micro-finance focuses on to help poorest families with very small loans (Micro-
credit) either to engage them in productive activities or grow their tiny businesses.
With the passage of time it has been realized that the poor and very poor who lack
access to traditional formal financial institutions require a verity of financial
products.
Poverty is an age old and worldwide phenomenon. It affects the quality of life of
the people in the society in one form or other. J&K is having a huge percentage of

41
population living below poverty line. The unemployment / underemployment,
underdeveloped agricultural and horticultural sectors, unbalanced development
with huge regional imbalances, illiteracy, shortage of capital, lack of
entrepreneurships etc are some of the major causes of poverty in the J&K state.
Relief and subsidies cannot eradicate poverty. It needs to be removed through
creation of productive employment opportunities, development of basic
infrastructure and other social conditions. Productive employment generates
growth, creates assets and thus improves the economic condition of the poor who
can get engaged in such pursuit. At the same time, growth through productive
employment creates a multiplier effect for bringing about a change in the
economic scene.
In the backdrop, the J&K Bank has been playing significant role for the
upliftment of poor and to raise the living standard of masses and ameliorate their
socio-economic conditions to achieve balanced economic growth with social
justice in the state of Jammu and Kashmir. The bank has reached to those people
who have certain entitlements in the form of productive assets, education and
skills; the possession of otherwise can generate incomes to by the food
requirements above the subsistence level. Since poverty originates in the villages
the bank took various initiatives to continue it. A number of banks poverty
eradication programme are rural centric. Under the programme the bank
undertakes various initiatives to raise the standard of people and elevate poverty.
The program covers area of agriculture, horticulture, village & cottage industries,
Handicraft (Shawls, carpets), tourism and other allied industry on one hand
promotion of health, sanitation, education and others.
The Micro-finance is being regarded as the dignified way of crossing the poverty
line by the weakest section of the society. This anti-poverty tool has been tested in
many parts of the world.
The J&K Bank has been organizing micro finance awareness camp throughout the
state and created awareness about various credit products which are given as
under:
 Kissan Credit Cards
 Self Help Groups

42
  Crop Loans
 Village Industries and
 Self-employment Schemes
 Handicraft Term Loans.
In order to generate employment avenues for the masses, the bank substantially
contributes to the six major government sponsored schemes these are:
 Swarnjyanti Gram Swarozgar Yojana (SGSY)
 Prime Minister Rozgar Yojna (PMRY)
 J&K Self-employment schemes (SJSRY)
 The Scheme for Schedule Caste/Schedule Tribe and other backward
classes (SSC/SST)
 Khadi and Village Industry (KVIB)

The bank has played a major role in providing employment through financing of
the projects under these schemes. Disbursment through SHGs is an effective tool
for delivering credit to rural pool for their econmic empowerment and social
development. The impact of SHG on members is in term of developing savings
and thrifts empowerment, relief from private money lenders, assistance for
welfare and economic activities, increase in literacy levels, reduction in transction
cost and credit at door step. Keeping this in a view, the bank disbursed Rs. 400
million through SHGs in J&K state, much more than any other state.

43
 CHAPTER NO 5

RESEARCH METHODOLOGY

44
RESEARCH METHODOLOGY
Success or failure of any project entirely depends upon methodology adopted by
the researcher. Methodologies basically use different methods of research
systematically and scientifically. Objectives if the study, its research design, its
sampling design, coding and editing methods, presentations and analyses of the
data together with interpretation of the data are essential part of research
methodology.
RESEARCH DESIGN
Fundamental to my marketing research project is a sound research design. A good
research design has the characteristics viz. problem definition, specific method of
data collection and analyses, a research design is purely and simply the
framework or plan for a study that guide the collection and analysis of data. In
this research Descriptive Research method was adopted.
DATA COLLECTION
Data collection is an essential part of every project. Success or failure of any
project entirely depends on the way of collection of data. The data can be
collected by the following two ways.
a) Primary source
b) Secondary source
In this project, primary data is collected from information that was collected form
the respondents through structured questionnaire. The information brochures of
the bank, articles in newspapers have been consulted as a secondary source of
information. Secondary data has also been collected through the various websites
on the Internet.
Contact method: - The respondents were contacted personally and a structured
questionnaire was administered to them.
Sampling plan
Population- The customers of the bank.
Sample unit- any individual residing in District Anantnag
Sample size- 200

45
Sampling procedure- Convenience Sampling.

CHAPTER NO 6

OBJECTIVES OF THE STUDY

46
OBJECTIVES OF THE STUDY
o To evaluate level of awareness for various micro-financial products in
J&K bank.
o To analyze the perception of customers about the steps to be taken by J&K
bank to serve the segment effectively.
o To study level of satisfaction among the customers regarding the
performance of J&K bank.
o To analyzes the ways through which the role of intermediaries in
financing these business units can be minimized.

47
 CHAPTER NO 7

DATA ANALYSIS AND

INTERPRETATION

48
1. Business respondents are dealing with.

Chart 1

120
100
80
60
40
20
0
Carpets

Walnut

Cutting and
Embriodery
Shawls

Tailoring
Crewel

The above graph shows that among 200 customers 50% of customers were
dealing with shawls, 17.5% are dealing with carpet, and 15% are dealing with
walnuts, 10% dealing with crewel and Embroidery works and 7.5% with cutting
and tailoring. This shows that shawl business is the leading one among small scale
business on which J&K Bank should concentrate more and then carpets and soon.
We all know that this segment of Kashmir is famous all over the world so the
banks thrust on this very segment should fetch them more and also develop the
economy of the valley.
Thus according to the different views of the people in Anantnag, the Banks most
target customers are those who are dealing with shawl and carpet.

49
2. Numbers of employs working in these business units.
This question was posed to know the employee strength in these different
business units. This would assist us to know the extent of their business process.
Chart-2

Employes Working In Business Unit

120 110

100

80
Responses

60
Series1
40 35
From the 28 data
20 10 8 6 3 collected,
it is 0
e
to
5 10 20 30 40 50 ov
1 to to to to to A b
5 10 20 30 40 50
Employes

interpreted that 55% of the business units have employees’ strength ranges from
5-10. This shows that these are very small business units and their needs can be
fulfilled by the micro-credit. Rest of the respondents have given their employee
strength as, 15% has 1-5, 13% has 10-20, 5% has 20-30 and soon.
Thus J&K bank has a great scope for financing these businesses. Only one thing
is needed there, i.e. to communicate that to these business owners.

50
3. Sources of Financing for Business Units
By this question, an effort was made to point out the most common source of
finance used by these business owners to finance their business units.
Chart-3

Visited Any Branch Of J&K Bank for

Such Loan
25, 13%
50, 25%

Banks
Self Financing
90, 44% 35, 18% Intermideries
Others
On

analysing the above figure, it reveals that only 25% of the people are financing
their business units through banks. The major portion (i.e. 44%) of the sample
(respondents) was financed by the intermediaries to run their business units. The
other respondents were financing by self-financing and other means. This shows
that the most of the portion of the population are unaware about the benefits of the
banks. Therefore the bank has to market their products in very proper way.
Now J&K Bank has recruited about 800 people recently, out of which, most have
been sent to BDPCs (Business Development and Promotion Centre) for marketing
these products.

51
4. Awareness among the Business Unit Holders about Various
Loans Provided By Bank.
Through this question, an attempt was made to figure out the respondents’
awareness about the loans available at the various banks in the valley, especially
at J&K Bank.
Chart-4

Awareness Among Respondent

About Small Business Loans

85,
43%
115, YES
NO
57%

From the above

graph, it can be interpreted that majority of the respondent are unaware about the
loans provided by the banks to them. Only 43% of the respondents are aware
about various small-scale business loans, while, as 57% of respondents were
unaware about the various small-scale business loans.

52
5. Whether Respondents Have Visited J&K Bank Branch for
availing such Loan Facilities.
An attempt has been made to figure out that the respondents who are aware
about the loans provided by the banks whether they have visited any branch of
J&K Banks.
Chart-5

Visited Any Branch Of J&K Bank for

Such Loan

35, 41%
yes

50, 59%
No

The above chart shows that the most of the respondents has visited J&K bank
branches. This shows that out of 85 respondents who are aware about the
loans provided by the banks 50(59%) of the respondent have visited at least a
branch of J&K bank.

53
6. Ranking by Respondents of Various Banks Who Were
Aware About the Loans Provided By Banks
An attempt has been made to figure out the respondent’s priority to various banks
operating in valley especially in district Anantnag. Rank 1 was used for highly
preferred and Rank 5 for least preferred.
Chart-6

Ranking of Various Banks by

Respondents
5 4.41
3.9
Scale of Responses

4 3.45
3
2.05
2 1.34
1

0
JKB SBI CCB EDB PNB
It may Responses be

depicted from the above chart that the (JKB) J&K Bank has been ranked at
near about 1. It means that the respondents who have visited and are aware
about the loans provided by Banks prefer this bank. The CCB (Central
Cooperative Bank) is ranked at number 2. The third, fourth, fifth and sixth
ranks are given to SBI (State Bank of India), EDB (Ellaqui Dehati Bank) and
PNB (Panjab National Bank) respectively.

54
7. How do the Respondents Rate the Performance of J&K Bank?
An attempt has been made to find out the rate at which the respondents rate
the performance of J&K Bank.
Chart-7

Visited Any Branch Of J&K Bank for

Such Loan
30
25
25
No. of Responses

20

15
10
10
5
5 2 3

0
The Excellent Good Average Poor Very
Responses Poor
graph
shows the level at which the respondents are satisfied with the performance of
bank. The scale used for this ranges from Excellent to Very Poor dthrough Good,
Average, and Poor. The scale is shown as below:

Excellent Good Average Poor Very Poor

It can be easily depicted from the above chart that majority of the respondents
rated performance of J&K Bank as Excellent i.e. about 50% respondents out
of 50, and 20% of respondents rated it as good, 10% rated it as average. Rest
of the respondent’s rate it as poor and very poor. This shows that the majority
of the respondents are satisfied with the performance of the bank.

55
 8. If J&K Bank Markets the Products of these Business Units
the People Cooperate or Not.
The main thing behind this question was to check the trust and belief on the J&K
Bank of the respondents.
Chart-8

wether Respondents Will Coperate if

their Products Are Market By JK Bank

25%

Yes
No

75%

Through this question an attempt was made to figure out that if the products of
these small business units are marketed by the bank what will be the attitude of
the owners of these units i.e. whether they will cooperate or not.
It is clear from that above figures that majority of the respondents are willing to
sell their products through J&K Bank. 75% of the respondents are ready to

56
cooperate with the bank if the bank markets their products. Only 25% of the
respondents responded negative. This shows that the customers who are well-
known about J&K Bank are having a great degree of trust and belief in this very
organisation.

9.What are the Factors Which Are Considered while Applying

for Loans and Ranking of these Factors by Respondents
According to their Preferences?
Through this Question an attempt was made to figure out the factors, which are
highly considered while applying for loans and their role in respondent’s
decisions
Chart-9

Ranking of factors considered by

respondents
3.5 3.26
3 2.76
Average Responses

2.5 2.19
2 1.65
1.5
1
0.5
0
Low Interest Quick Maximum Reasonable
Rate Sanction Time For Mortgages
Repayment
Factors

The above chart shows that the factor quick sanctioning of loans is ranked first
and low interest Rate is ranked at second. The factors Maximum time for
repayment and reasonable mortgage are ranked at third and fourth respectively.

57
This shows that the respondents are highly concerned about quick sanctioning of
loans so as to invest at right time to earn profits.
This was actually open-ended question, but the responses given by the customers
were revolving around these options. That is why I made it like this.

CHAPTER NO 8

FINDINGS AND CONCLUSION

58
FINDINGS/CONCLUSIONS
1) Shawl is the main component of small-scale business. As majority of the
respondents i.e. 50% are dealing with shawls. Also the business units are of
medium size employing 5-10 employees in their units.
2) The most common source of finance for these businesses is financing by
intermediaries. The local forwarding agents who finance these units at very
high rate of interest finance these units. This could be because of unawareness
among respondents regarding the facility of availability of loans from banks
for such businesses. As 55% of respondents are not aware of the loans
provided to them by various banks in the Valley. This unveils the weak
promotion planning of the banks in valley.
3) Most of the business unit owners have visited branches of J&K Bank i.e. 50
respondents out of total 85 who are aware about loans provided by banks to
this segment. This shows that in the Valley, the J&K Bank is the most famous
bank and is the leading one. Because the J&K Bank has been rated at the
excellent rank of 1.34 that is close to one. The bank is the most preferred bank
among its competitors like SBI, CCB, EDB and PNB.
4) The overall performance of the J&K Bank was rated as excellent. This shows
that the persons are very much satisfied with the overall performance of the
bank, although it needs to improve in some fields.

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5) There is an opportunity for the bank to diversify its business. This is because
the most of the respondents desire that the bank itself should market their
products. The respondents have given surety that they will totally cooperate.
6) Quick sanctioning of the loans has been preferred by the most of the
respondents. After quick sanctioning, low interest rates are highly considered
by respondents by applying for such loans. Monitoring of the functioning of
these units, reasonable mortgage are considered secondarily.
7) In the segment of shawl, carpet and walnut there is an opportunity for the
bank to implement the total market orientation programme, which shall
include both service as well as proactive orientation.
8) It has been found the J&K bank is not monitoring the activities of Branch
managers especially of the branches of Larkipora, Shangas & Mattan

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 CHAPTER NO 9

SUGGESSTIONS

SUGGESTIONS
The J&K Bank is one of the most vibrant banking institutions and is performing
well. The skilled and motivated manpower is it advantage over other. The micro-
financial market share is increasing day by day but is still low as compared to
intermediaries and need to appreciate further. The J&K Bank from last few
decades has been to performing well. The bank is the only institution whose
contribution towards J&K economy is the most. Still there is the scope of
improvement in the different fields. Below given are some recommendations,
which may help the bank.
 The bank needs to look at its advertising operations. In today’s environment
advertising is the media to reach the public faster. The bank should adopt

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 strategic audit of its advertising. It should arrange visits to trade fairs, display
advertising, road shows etc to aware people for small-scale business loans i.e.
micro-finances.
 The staff should also give information about these loans to the customers, so
that the customers apply for loan to bank rather than other intermediaries.
 The bank has recruited the various Relationship Executives/ Financial Service
Executives for promoting its business, but they are not having proper direction
of what they have to do and also the branches are not coordinating with them
fully.
 The customers committee meetings/customers relation programs should be
conducted at the branch level once in a quarter. This will assist them to serve
in a very better manner.
 The bank should develop potential customer database and the calls should
make on the basis of that for the promotion of these business loans.
 The bank should focus on the segment of shawls and carpet as their market
orientation programme can be implemented that will serve the customers
expressed needs like the financing of their business unit and customer latent
need like the marketing of their products.

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 CHAPTER NO 10
LIMITATIONS OF THE STUDY

LIMITATIONS OF THE STUDY

However, every care has been taken to make this report authentic in every sense.
Yet, there were a few uncomfortable factors, which might have had their
influence on the final report. It is said, ‘nothing is perfect’ and if this quote is true
I am sure there would be few shortcomings in this project also. Sincere efforts
have been made to eliminate due to the limitations of the study. These are:

I. The study was to be completed in a short time, the time put a

considerable limit on the scope and the extensiveness of the study.

63
II. The unsupportive attitude of the respondents while responding to the
questions, requiring the qualitative information may have affected the
final findings and outcomes.
III. The survey was conducted in District Pulwama, thus the respondents
belonged only to this region of the country. This could have brought
biasness into the study.
IV. Because of the diversity of nature of respondents, the findings of the
survey could not be generalized.
V. Some of the respondents gave ambiguous replies for certain questions,
so I felt they were unnecessary and I omitted these responses of such
persons. The interpretation of some responses became difficult and
could generate wrong results.

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 CHAPTER NO 11

BIBLIOGRAPHY

BIBLIOGRAPHY

BOOKS
Research methodology. C.R. Khothari
Marketing Management Philip Kotler
Marketing Research G. C. Beri
Marketing Management Harold Koontz
Bank Watch Sajad Bazaz

Magazines

65
Bank Quest 2013-14
Trust (Newsletter) 2013-14
IBR Bulletin 2013-14

Websites
www.google.com
www.rbi.com
www.jkbank.net
www.myiris.com
www.theunjusmedia.com
www.indiainfoline.com

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 CHAPTER NO 12
QUESTIONNAIRE

QUESTIONNAIRE

1. Your Age: ____________________

2. Education Qualification.
 Undergraduate □
 Graduate □
Postgraduate □
3. Marital Status

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  Married □
 Single □
No. of Children: __________

4. Occupation.

 Business
 Profession
 Service
(Please mention below the type of business/profession you are in incase of service
please mention your organization name and designation)

5. Your annual household income.

 <than 2 lack □
 Between 2 to 5 lack □
 Between 5 to 8 lack □
 >than 8 lack □

6. Do you want to open an savings account with J&K Bank?

 Yes
 NO

7. Do you have all the documents which are required to open an account?

 Yes □
 No □

9. Are you aware of that J&K Bank provide you free phone banking & net
banking services. If you open a new savings account with J&K bank?

 yes □
 No □

10. Are you aware of different terms and conditions which are very much
essential to maintain an account at J&K Bank?

 Yes □
 No □

12.when you have any kind of problem the bank shows a sincere interest in
solving it?
 Yes □
 No □

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13. Employees in the bank give you right information about their Financial
services?
 Yes □
 No □

14 You feel safe in your transactions with the J&K bank?.

 Yes □
 No □

15. The employees of the bank understand your specific needs?

 Yes □
 NO □

16. Do you think that J&K bank provides various benefits for customers and a
wide range of useful Financial services than other banks?
 Yes □
 No □
 Can’t say □

17. Any suggestions/ complaints regarding Micro Finance from your

bank?

Ans.
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
…………………………………………………………………………
………………………………………………………………………

………………………………………………………………………

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