A REPORT ON BANKING, LENDING AND NBFC PRODUCTS AND SERVICES-I

A Project Submitted to Bharathiar University in Coimbatore Partial Fulfillment of the

requirement of the Award of the Degree of

Bachelor of Commerce With CA

submitted by

HARSHAVARDHINI.V

REG NO : 212AC2456

NM ID :271704A0956BB699D2247EBB0F801C20

Under the Guidance of

TAMILNADU APEX SKILL DEVELOPMENT CENTRE

DEPARTMENT OF COMMERCE WITH CA

ADHARSH VIDHYALAYA COLLEGE OF ARTS AND SCIENCE FOR WOMEN

ADHARSH NAGAR

(Affiliated to Bharathiar University, Coimbatore)

OCTOBER/NOVEMBER-2023
BFSI PROJECT
 PROFILE

NAME HARSHAVARDHINI.V

DEPARTMENT III – [Link](CA)

NAAN MUDHALVAN ID 271704A0956BB699D2247EBB0F801C20

ROLL NO. 212AC2456

COLLEGE CODE 5H

[Link] LOAN
PROJECT TITLE
[Link] DEPOSIT
[Link] LOAN

DATE

SPOC [Link] [Link].,[Link].,Ph.D,

 ACKNOWLEDGEMENT

I wish to express my gratitude to the principal [Link] MCA.,M .

Phil.,Adharsh vidhyalaya college of arts and science for women, Adharsh Nagar.

My deep sense of gratitude to the respected to [Link] BEGAM [Link]

(CA).,[Link].,MBA., Head of the department of Commerce with CA for her

encouragement throughout the training session.

I would like to express my sincere and heartfelt thanks and gratefulness to Dr.M.

ANNAKKODI [Link].,[Link].,Ph.D.,Department of Maths of Adharsh vidhyalaya

College of Arts & science for Women, Adharsh Nagar.

I would like to express my sincere and heartfelt thanks to [Link] M.

com(CA)., Adharsh vidhyalaya College of Arts & Science for Women,Adharsh Nagar.

I would like to convey my sincere thanks to TAMILNADU APEX SKILL

DEVELOPMENT CENTRE for their valuable guidance in completing this project.

 DECLARATION

I hereby Declare that this BFSI Training Report submitted to Bharathiar University

Coimbatore for the academic year 2023-2024 is a record of my original work done under the

guidance of TAMILNADU APEX SKILL DEVELOPMENT CENTRE

Date: Signature of the Student

Place: Adharsh Nagar

([Link])
 INDEX

[Link] TITLE PAGE NO

1 INRODUCTION 1

2 PROJECT- 6 2

EDUCATIONAL LOAN

3 PROJECT-7 8

FIXED DEPOSIT

4 PROJECT- 8 16

HOUSING LOAN

5 CONCLUSION 21
INTRODUCTION

Banking refers to the system of financial institutions, such as banks and credit unions,
that provide various financial services to individuals, businesses, and governments.
Banking services mainly include accepting deposits, lending money, facilitating
transactions, and offering various financial products like savings accounts, loans, and
credit cards. Banking plays a crucial role in the economy by facilitating the flow of
money and enabling economic activities.

There are two main types of financial institutions: banking and non-banking.
Banking institutions include commercial banks, savings and loan associations, and
credit unions. Nonbanking financial institutions include insurance companies, pension
funds, and hedge funds. A financial institution is a company engaged in the business
of dealing with financial and monetary transactions such as deposits, loans,
investments, and currency exchange. Financial institutions include a broad range of
business operations within the financial services sector, including banks, insurance
companies, brokerage firms, and investment dealers.

Banking institutions are financial organizations that provide a wide range of

services, including accepting deposits, making loans, facilitating payments, and
offering various financial products to individuals, businesses, and governments. These
institutions play a crucial role in the economy by channeling funds from savers to
borrowers economic activities.

1
 PROJECT 6

EDUCATIONAL LOAN

LOAN:

Loans are financial arrangements in which a lender provides a sum of money to a

borrower with the expectation that the borrower will repay the borrowed amount,
typically with interest, over a predetermined period. Loans serve various purposes,and
they play a significant role in the financial world. In this essay, we will delve into the
intricacies of loans, understanding their functions, impact on borrowers and the economy,
interest rates, and loan terms.

WHAT IS EDUCATIONAL LOAN?

An educational loan, also known as a student loan, is a type of financial

assistance specifically designed to help individuals fund their education [Link]
loans are typically offered to students and their parents to cover the costs of tuition,
textbooks, fees, and other educational-related expenses. Educational loans can be used to
Support various levels of education, including undergraduate and graduate degrees,
vocational training, and other forms of post-secondary education.

Types:

Educational loans come in various forms, including federal student loans (provided by
the government), private student loans (offered by banks and other financial institutions),
and sometimes, even loans from educational institutions themselves.

Interest Rates:

The interest rates on educational loans can vary depending on type of loan and the
lender. Federal student loans often have fixed, relatively low interest rates, while private
student loans may have variable rates and potentially higher interest costs.

Repayment:

Many educational loans offer deferment options, meaning students don’t need to
begin repaying the loan until after they graduate or leave school.

2
Public Bank:
A public bank is a financial institution that is owned and operated by the
government or a government agency. These banks are typically established to provide essential
banking services to the general public. Public banks play a crucial role in the economy by
offering a wide range of financial services, including savings and checking accounts, loans,
and investment products. They are often considered more stable and reliable due to government
backing. Examples of public banks include the State Bank of India, Indian overseas Bank.
Private Bank:
A private bank, on the other hand, is a financial institution owned and operated by
private individuals or entities. These banks typically cater to high-net-worth individuals and
offer specialized services such as wealth management, investment advisory, and estate
planning. Private banks are known for their personalized and exclusive services, focusing on
the unique financial needs of their clients. Ex: private banks include Axis bank, HDFC
bank.
Non-Banking Financial Company (NBFC):
An NBFC is a financial institution that provides banking and financial services but
does not hold a banking license. NBFCs can offer services similar to traditional banks, such
as loans, credit, and investment products, but they are not allowed to accept demand
deposits like regular banks. NBFCs are an essential part of the financial system, filling
gaps in services that traditional banks may not address. Ex: NBFCs
include Bajaj finserve, Mahindra & Mahindra Financial Services, and L&T Finance.
Education Loan Company:
An education loan company specializes in providing loans to individuals who want
to pursue higher education. These companies offer financial assistance to students and their
parents to cover tuition fees, living expenses, and other educational costs. Education loan
companies play a significant role in enabling access to education, as pursuing higher
education can be costly. They offer various loan products tailored to the specific needs of
students and typically have favorable terms, including lower interest rates and flexible
repayment options. Ex:ducation loan companies include Avanse Financial Servicesand HDFC
Credila.
Education Loan Eligibility

The vital education loan eligibility criteria that the candidates need to fulfil to get approval
for the loan are listed here:
✓ The candidate applying for the loan must be a resident of India.

3
✓ He/she must have confirmed admission to recognized educational institutes in India or
abroad.
✓ The age of the candidate must fall within the bracket of 18 to 35 years during loan
application.
✓ He/she must be undergoing a graduate/postgraduate degree or a PG diploma.
✓ The applicant should have secured admission to a college or university affiliated with
University Grants Commission (UGC)/All India Council for Technical Education
(AICTE)/Govt. etc.
✓ Students pursuing full-time courses need to have a co-applicant who can either a
parent/guardian or spouse/parent-in-law (in the case of married candidates).
✓ The co-applicant must have a regular income source.
✓ A strong academic record facilitates speedy loan approval.

Education Loan Eligibility Tabular representation

PARTICULARS ELIGIBILITY
Nationality Indian
Minimum 18 years
Age
Maximum 35 years
Academic record Proven good
Qualification Pursuing graduate/Post graduate degree or PG diploma
Income source Parents/Guardian
University applied to Recognized In India/Abroad
Admission status Confirmed
Tangible collateral or guarantor- depending on the loan amount
Security
and income source.
Minimum interest rate 8.30% p.a.

Documents Required for Student Loan

✓ Proof of income (parents/sibling/guarantor)

✓ Proof of identification.
✓ Proof of address.
✓ Bank statement of last six months.

4
 ✓ Copy of admission letter of the institute along with fees schedule
✓ Demand letter from college or university
✓ Loan agreement/sanction letter/disbursement request form signed by applicant, co-
applicants
✓ Documents for collateral security (if any)
✓ Form A2 signed by applicant or co-applicants for studies in overseas institute
✓ Mark sheets, or pass certificate

Create a chart and table showing the differences between Educational Loan offered by
Public sector bank
Private sector bank
NBFC
Education loan company

5
 NBFC(Non
EDUCATIONAL
PUBLIC PRIVATE banking
FEATURE LOAN
BANK BANK Financial
COMPANY
Company)

Typically Generally
Interest Rate Vary May vary
lower higher

Loan
Generally
Amount Higher Higher Varies
lower
Limit

Eligibility More
Strict Flexible Varies
criteria flexible

Collateral Sometime Often May be

Varies
requirement requires required required

Processing Usually
Faster Faster Varies
Time longer

Repayment More
Flexible Flexible Varies
terms flexible

Interest
Government Rarely
subsidies/ Varies May offer
schemes available
discount

Customer Generally
Average Varies Varies
service better

Wide Limited Limited

Accessibility Online presence
network branches branches

Grace Typically Typically

Varies May vary
Period shorter shorter

Co borrower Sometimes Often May be

Varies
requirements required required required

6
List of lending banks, NBFC and Education loan company

Lending public Lending private

Lending NBFC’s
bank for bank for Education loan
for education loan
education loan in education loan in company
in India
India India
State Bank of India
Union Bank of
India HDFC Bank
Avanse
Punjab and Sid ICICI Bank Bajaj Finance Auxilo
Bank IDFC Bank Mahindra & HDFC Credila
Punjab National Axis Bank Mahindra Financial
Bank Services InCred
IDBI Bank
Bank of Baroda L&T Finance.
Kotak Mahindra
Bank of Bank
Maharashtra
Bank of India

Comparison between the education loan offered by SBI, HDFC, BAJAJ FINANCE
and AVANSE.

FEATURE SBI HDFC BAJAJ AVANSE

FINANCE

Interest rate 9.15% to 9.50% 10.10% to 10% to 16.5%

11.15% 11.50%

Loan amount 1.5 crore 10 lakhs 10.50 crore No limit

limit

Processing 15 days 15 days 3 days 3 days

time

Repayment 15 years 15 years 8 years 15 years

tenure

7
 PROJECT 7

FIXED DEPOSIT

A fixed deposit (FD) is a financial instrument where you deposit a lump sum of money
with a bank or financial institution for a specific period at a fixed interest rate.

The funds are locked in for the predetermined duration, and you’ll receive the principal
amount along with the interest at the end of the term. FDs are a low-risk investment option
and are commonly used for saving and earning interest. The interest rate and tenure can vary
from one bank to another, and early withdrawals often result in penalties.

PROS AND CONS OF FIXED DEPOSIT

PROS

Safety:
Fixed deposit are considered a safe investment as they are typically
offered by banks and are insured up to a certain limit, which varies by country.

Stability:
The interest rate is fixed at the time of deposit, providing
predictability in returns.

Guaranteed Returns:
You’re assured of receiving the principal amount along with the interest
at maturity.

Liquidity:
While fixes are for a fixed tenure, they are relatively more liquid
compared to other long-term investments
8 like bonds or real estate. You can still
access your funds with a penalty.
 CONS

Low Returns:
Fixed deposit interest rates are usually lower compared to other
investment options like stocks, mutual funds, or real estate, which means lower
returns.

Fixed Tenure:
Your money is locked in for a specific period, and early
withdrawals can result in reduced interest earnings or penalties.

Inflation Risk:
FD returns might not always keep up with inflation, potentially reducing
your purchasing power over time.

Taxation:

The interest earned on Fixed deposits is taxable, which can further

reduce your overall returns.

Limited Flexibility:
Once you invest, you can’t adjust the interest rate or terms until maturity.

Opportunity Cost:
By tying up your money in an Fi, you might miss out on better
investment opportunities that could offer higher returns.

TYPES OF FIXED DEPOSITS

1. Regular Fixed Deposits:

Regular fixed deposits are the most common form of FDs. Investors
deposit a lump sum amount for a fixed tenure and earn a
predetermined interest rate. The principal amount, along with the interest, is paid
at maturity. These FDs offer stability, guaranteed returns, and safety of capital,
making them suitable for individuals looking to grow their savings without
taking significant risks.

2. Tax-Saving Fixed Deposits:

Tax-saving fixed deposits are specifically designed to help investors
save on income tax. Under Section 80C9 of the Income Tax Act, the amount
invested in these FDs is eligible for tax deductions up to a specified limit. The
 is taxable. These Fixed deposit provide a dual benefit of saving taxes and
ensuring fixed returns.
3. Senior Citizen Fixed Deposits:
Senior citizen fixed deposits are tailored for individuals aged 60 and
above. They typically offer higher interest rates than regular FDs, providing
better returns for senior citizens who rely on fixed income. Some banks
also provide additional benefits, such as preferential interest rates and
periodic interest payouts.
4. Cumulative Fixed Deposits:
Cumulative fixed deposits are ideal for investors who want to
reinvest their interest earnings to maximize returns. In these FDs, the interest
is compounded at regular intervals, usually quarterly or annually. The principal
and compounded interest are paid together at maturity. Cumulative FDs are a
valuable choice for long-term goals, such as saving for a child’s education or
retirement.

5. Non-Cumulative Fixed Deposits:

Non-cumulative fixed deposits are suitable for those who require a
regular income stream. In these FDs, the interest is paid out at predetermined
intervals, which can be monthly, quarterly, half-yearly, or annually. Non-
cumulative FDs offer liquidity and a consistent source of income, making them
ideal for retirees or individuals with specific financial needs.

LOAN AGAINST FIXED DEPOSIT (FD)

Depositors can leverage their FD to avail loans. Loans against FD are usually offered
in the form of overdraft facility, wherein the credit limit is sanctioned on the basis of the
Fixed deposit amount pledged as collateral and the interest is also levied only on the amount
drawn till its repayment.
Moreover, the borrower continues to earn interest on the pledged FDs during the loan
tenure. Withdrawals can be made anytime up to the credit limit from their overdraft account
and repay it as per their repayment capacity.

10
 These features of loans against FDs make them an excellent tool for mitigating frequent
liquidity and cash flow mismatches, without requiring prematurely closing Fixed dnd
incurring premature withdrawal penalties. In India, Fixed Deposits are one of the most
popular ways to save money. They are a safe investment, offer good returns, and are easy to
open.

INVESTMENT OF 2 lakhs

Return after 24
Organization Amount Interest
months
Government Bank 15000 6.75% 17149
Private Bank 80000 7.25% 92363
NBFC 70000 7.55% 81295
Post Office savings 35000 7.00% 40211
Total 200000 231018

2,00,000 was divide to invested in various organization, after 24 months it would be

Increased to 2,31,018. Twenty four month of interest is 31018. I invest 80000 in private
bank, 70000 in NBFC, 35000 in Post office savings and 15000 in government. When I
invest the amount in the organisation, I consider the two factors the first one is risk and the
other one is interest rate. Among all the four institution NBFC has the highest interest, but it
includes high risk so I don’t want to invest the high amount in that and the Private bank has
comparatively low risk and moderate interest so I invested 80000 in it and invested the
remaining amount based on its interest rate.

There are 3 types of investors

✓ Low risk takers (Old & conservative people).

✓ Moderate risk takers (Middle aged people having medium risk apatite).
✓ High risk takers (Young & who aspire to move forward as a front runner)
✓ THE FORMULA FOR CALCULATING INTEREST .
M= P + (P x r x t/100)
Where, P is the principal amount that you deposit
R is the rate of interest per annum
T is the tenure in year

11
GOVERNMENT BANK

Bank Bank of Baroda

Type of customer Normal

Date of deposit 01.04.2023

Date of maturity 01.04.2025

Tenure 2 years

Amount 15000

Interest rate 6.75

Total interest 2149

Maturity amount 17149

12
PRIVATE BANK

Bank Kotak Mahindra Bank

Type of customer Normal

Date of deposit 01.04.2023

Date of maturity 01.04.2025

Tenure 2 years

Amount 80000

Interest rate 7.25%

Total interest 12363

Maturity amount 92363

13
NBFC(NON BANKING FINANCIAL COMPANIES)

NBFC Bajaj FinServ

Type of customer
Normal
Date of deposit 01.04.2023

Date of maturity 01.04.2025

Tenure 2 years

Amount 70000

Interest rate 7.55%

Total Interest 11295

Maturity amount 81295

14
POST OFFICE SAVINGS

Post office savings

Type of customer Normal

Date of deposit 01.04 2023

Date of maturity 01.04.2025

Tenure
2 years

Amount 35000

Interest rate 7%

Total interest 5211

Maturity amount 40211

15
 PROJECT 8

HOUSING LOAN

Buying a house is one of the biggest dreams come true for most people and an
extravagant affair altogether. Imparting life to such a dream requires a lot of effort from the
buyers’ end and the best one can do to accommodate the home in their budget is through a

home loan. A home loan can be opted to buy a new house/flat or a plot of land where you
construct the house, and even for renovation, extension, and repairs to an existing house.

TYPES OF HOUSING LOAN

• Home Loan
• Home Construction Loan
• Home Extension Loan
• Home Improvement Loan
• Composite Home Loan
Home Loan:

A traditional mortgage used to buy a new or existing home. It’s a long-term

loan with fixed or adjustable interest rates and typically requires a down
payment.
Home Construction Loan:

16
 This loan is for financing the construction of a new home he funds are released
in stages as construction progresses, and once the home is complete, it can be
converted into a regular home loan.
Home Extension Loan:

Designed for expanding or renovating an existing home, this loan provides

the necessary funds for adding extra rooms, improving living spaces, or
extending the property.

Home Improvement Loan:

Meant for making repairs or enhancements to an existing home, such

as renovating the kitchen, adding a bathroom, or upgrading the electrical
and plumbing systems.

Composite Home Loan:

Combines a home loan with the funds needed for other purposes like
home furnishings or buying appliances, offering a convenient way to cover
various home-related expenses.

ELIGIBILITY

Banks have a list of eligibility criteria for home loans. The first thing banks look at is one’s
credit history to understand their repayment habits. Typically, a credit score of 750 and above
is preferred. Some other important factors taken into account are as follows:

• Age

• Employment Type

• Minimum Annual Salary

17
 • Collateral Security

• Margin Requirements

• Assets, liabilities, stability, and continuity of occupation

• Residency status (Resident Indian/ Non-Resident India

[Link] FOR GOVERNMENT EMPLOYEE ANNUAL INCOME RS.10

LAKH

REASON

When it comes to applying for a home loan, government employees enjoy certain privileges.
A secured job with a stable salary makes them suitable borrowers. While getting a home loan
for government employees is simple, it can also be overwhelming with so many options
available.

ELIGIBILITY CRITERIA FOR GOVERNMENT EMPLOYEES

• The eligibility criteria for a smooth application process for housing loan for
government employees requires:
• You must be an Indian citizen between the age of 23 and 62 years

• You must have a work experience of at least 3 years

• You must have a CIBIL score of 750 or above

HOW TO APPLY FOR A HOME LOAN FOR GOVERNMENT EMPLOYEES

To enjoy the home loan benefits for government employees, follow the steps mentioned
below when applying:

• Step 1: Go to the bank’s website, choose the ‘Home Loan’ option, and simply click
on the ‘Apply Now’ button
• Step 2: Enter basic contact information and the One Time Password (O received on
your registered mobile number
• Step 3: Input your personal, financial and property details to complete your
application process

18
 Then the information that you shared with the portal will undergo a verification process. If
verified successfully, the lender will credit the loan amount into your bank account within a
week. The rest of the instalments will follow as per the disbursement schedule.

DOCUMENTS REQUIRED FOR A HOME LOAN FOR GOVERNMENT

EMPLOYEES

Mentioned below are the documents required to apply for a housing loan for government
employees

• Salary certificates or pay stubs to prove income.

• Employment verification letter from the government department.
• Income tax returns for the last few years.
• Proof of identity and residence (Aadhar card, passport, utility bills).Bank statements
to demonstrate financial stability.
• Property documents, such as the sale deed and property valuation report.
• Any other documents required by the lending institution, such as a no-objection
certificate from the government employer.

D. A RICH FARNER WITH LANDS WORTH OVER RS.1 CRORE

REASON
The farmer has a consistent and substantial income generated from his agricultural
business, which has been thriving for many years. This income stability ensures that he can
comfortably meet his loan repayment obligations. With land worth 1crore, the farmer
possesses a substantial and valuable asset that can serve as collateral for the house loan. This
collateral not only reduces the lender’s risk but also provides an additional source of
repayment security.

ELIGIBILITY TO APPLY
Agriculturists owning and cultivating agricultural lands of more than 5 acres Irrigated
lands / 10 acres of Dry lands in their name/s.

In case of Agriculturists engaged in Dairy farming, Poultry farming, Plantation

Crops and Horticultural produce, the minimum land holding criteria does not

19
Apply. Instead such category of borrowers should have minimum gross annual Income of
Rs.5.00 Lakhs

Existing customer of our Bank with satisfactory dealings with us for the last two Years.(This
condition can be relaxed in select cases)

The age of the borrower or at least one of the joint borrowers should not be More than 55 years
at the time of availing the loan.

DOCUMENTS REQUIRED

✓ Loan application form.

✓ 3 photographs passport sized.
✓ Identify proof
✓ Residence proof
✓ Bank Account Statement/Passbook for last 6 months.
✓ Signature verification by bankers of the applicant.
✓ Liabilities statement and Personal Assets.
✓ Property detailed documents

TERMS AND CONDITIONS

Indicated below are the broad terms and conditions applicable to home loans for self-
employed applicants:
TENURE OF THE LOAN
The maximum tenure for home loans under adjustable rates can stretch up to 30 years. In
case of fixed rate home loans, the maximum tenure is 20 years.
AMOUNT OF LOAN
The amount of loan approved by the lender will depend on a number of factors such as the
customer’s repayment capacity, age, etc. Indicated below is the maximum amount the lender
would offer depending on the cost of the property:
• 90 percent of the property cost – loan amount up to Rs.30 lakh
• 80 percent of the property cost – loan amount between Rs.30.01 lakh and Rs75 lakh
• 75 percent of the property cost – loan amount above Rs.75 lakh

INTEREST RATES
Lenders offer two kinds of interest rate options – fixed and adjustable.

20
ADJUSTABLE RATE HOME LOAN

I t is linked to the lender’s benchmark or Retail Prime Lending Rate (RPLR). The
rate is revised every quarter depending on any change in the RPLR. If the interest rate
changes, it usually results in a change in your home loan tenure, with or without a change
in EMI.

FIXED RATE HOME LOAN

Here, the interest rate remains the same as the rate determined at the time of
loan disbursement. However, it remains fixed for a stipulated period of 2/3/10 years, after
which the loan automatically gets converted to adjustable rate. Some lenders allow
customers to switch between fixed and adjustable rates depending on certain conditions.

CONCLUSION

Banking holds a crucial role in our day-to-day life. We must adhere to

the banking system as responsible citizens. The banking system acts as a
crucial base for the financial system as well as the entire economic system
of the country. It provides a base to the market and the companies. For the
savings and other economical aspects banks are the most reliable option for
us where we can save, invest or borrow money by a given terms and
conditions. That's why we can easily say that money and banking are the most
important segment in the economic circumstances.

21