A Study of Agriculture Loan of Kotak Mahindra Bank (MBA Finance)

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A
PROJECT REPORT
ON
“A STUDY OF AGRICULTURAL LOAN”
For
KOTAK MAHINDRA BANK SHRIRAMPUR BRANCH
SUBMITTED TO
SavitribaiPhule Pune University, Pune
IN THE PARTIAL FULFILLMENT OF THE REQUIREMENT
OF
MASTER OF BUSINESS ADMINISTRATION (M.B.A.)
UNDER THE GUIDANCE OF
Prof. V.M.Tidke
SUBMITTED BY
Mr. AVINASH DILIP LABADE
Submitted to
S.R.E.S. College of Engineering Department of MBA, Kopargaon
2015-2017

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SANJIVANI RURAL EDUCATION SOCIETY’S, COLLEGE OF
ENGINEERING,
DEPT. OF MBA
Certificate
This is to certify that Mr.Avinash Dilip labade. Has submitted a summer project on “A Study of
Agricultural loan Kotak Mahindra Bank” to Savitribai Phule Pune University of Pune for the partial
fulfilment of Master in Business Administration (M.B.A.).
We further certify that to the best of our knowledge and belief,
the matter presented in this project has not been submitted to any other
Degree or Diploma course.
Prof. V.M. Tidke Prof. B.M. Londhe
Internal Guide Head of Department
External Examiner

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DECLARATION
Iundersigned hereby declares that, the project titled “A Study of Agricultural
loan “is executed as per the course requirement of two year full time MBA program of
Savitribai Phule of Pune University.Under the guidance of Prof. V.M.Tidke.
This report has not submitted by me or any other person to any other University
or Institution for a degree or diploma course. This is my own and original work.
Place: - (AvinashDilipLabade)
Date: - / / 2016 MBA-II (Finance)

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ACKNOWLEGEMENT
The satisfaction of completion of any successful task is incomplete without
mentioning the name of people who made it encouragement crowned our efforts with
success.
I have a pleasure in submitting the project report & I take this opportunity to express
my sincere gratitude to all those who have helped me in this completion of this project report.
The MBA curriculum given me a unique opportunity to be in association with one of the
largest multinational company in the country.
I am extremely grateful to Mr.Sachin Deshamukh HR-RM of our Organization for
giving me the opportunity to work on the project. I am extremely grateful to Mr.Sachin
Naik(Branch Manager)& Mr. Sharad Wakade Senior manager (Agricultural Dept.) ,for
giving me opportunity constant encouragement, support & guidance. I express my heartily
gratitude to my project guides, for providing me all the facilities required in completing this
project.
My heartily gratitude to all those who have directly or indirectly given assistance in
making this project easier & possible.
Signature
Date: - / /2016 ( )
Place: - Shrirampur Mr.Avinash Dilip Labade
MBA-II (Finance)

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INDEX
Chapter
No.
Chapter Name Page No.
1. Executive Summary 01
2. Introduction 04
3. Industry Profile 08
4. Company Profile 12
5. ProductProfile 18
6. Objective of Study 24
7. ResearchMethodology 26
(i) Primary Data
(ii) Secondary Data
(iii) Sampling
(iv) Scopeofthe study
(v) Limitations of the study
8. Theoretical Background of the study 29
9. Data Analysis and Interpretation 35
10. Findings 51
11. Conclusion 53
12. Suggestions 56
13. Learning objective 58
14. Bibliography 60
Annexure 62

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CHAPTER NO. 1
EXECUTIVE SUMMARY

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1.1 Introduction of the project:
The SavitribaiPhule University of Pune had given the Subject of Summer
internshipProject for Master of Business Administration [M.B.A.] Semester 3rd Our Project
Report subject is practical training for project work in Kotak Mahindra Bank Ltd.
Location:
Kotak Mahindra Bank Shrirampur Branch nearbyAxis Bank, Sangamner Road,
Shrirampur.
Duration:
Duration of the project is 2 Months.
Project title:
“A Study of Agricultural Loan forKotak Mahindra Bank ltd”. The Branch head of the
Kotak Mahindra Bank ShrirampurBranch Pvt. Ltd isMr. SharadWakdesir who has all
information Provide about the Bank& Agricultural Loan. And my subject topic is a study
Agricultural Loan for Kotak Mahindra Bankltd.
In the Bank there are various produce i.e. crop Loan, Export finance, kisan credit
card and other short term loan etc. and various products and services offered agricultural loan
I have collected primary and secondary data from financial statement of Bank and discussion
with various staff member in Bank. And the feedback the farmers who have borrowed loan
from Kotak Mahindra bank
Objective of the project:
 To study the concept of agricultural loan
 To study the perception of farmers towards Kotak Mahindra Bank agricultural loan
 To find out the awareness of farmers about various types of financial products for
Agriculture
 To study the Process of Agriculture loan in Kotak Mahindra Bank

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General Finding, Suggestion & conclusion:
Financial Position of Bank is good.There is a more scope to Improve Bank Liquidity
Position just like the way they have create a better Relationship with customer.
All the Companies assets are effective and efficient to generate the sales so company
in growth stage and it’s required more capital
Profitability position of Bank is good and Bank give higher return on
investment.Solvency position of Bank is good and it should maintain it.
Bank should try to increase their customer relationship and try to do decrees the value
of Accounts.

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CHAPTER NO. 2
INTRODUCTION
2.1 Introduction

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Agriculture
Agriculture is the backbone of the Indian economy. It is the largest industry of the
contry.in India 70% of workforce still engaged in Agriculture & allied activities. At present
(1990-91) Agriculture is the main source of supply & support for Indian transport.
The Agriculture is the main source of raw material for leading industries. It is largely
stands for prosperity of our country. The agriculture gone through the various stages like
Green, White, and Yellow Revolution to floriculture. The drastic change take place from
independence to today.
1 Role of Agriculture in India
 A Flourishing Agriculture sector is far more important for the development of the
Indian economy.
 Since farming is less a business than a tradition in India. Even at this stage about 80%
population lives in rural areas & directly or indirectly depends on Agriculture for its
live hood
 About 85 cores of persons which are further multiplying at the rate of 2.5% per
annum depends on Agriculture sector.
 Most of our traditional industries depends on our bulk or foreign earnings draw their
raw material from this sector.
 The surplus generated by this sector would help Indian economy to reach the “Golden
Stage”
 The share of Agriculture in national income plays crucial indicator in the economic
development of country.
 It supplies the necessities of life today Agriculture is feeding about 100 million
people. Food production crossed mark of 200 milliontons in 1999-2000.
 Agriculture has a greater role in economic development in the less developed
countries as it provides livelihood to a vast majority of people living in the country.
 It provides offers enormous scope of alternative employment.
 Agriculture exports constitute a major portion of India’s exports& accounted for 50%
of the export at present.

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Agriculture
FOOD NATIONAL INCOME INDUSTRY FOREIGN
EXCHANGE
EMPLOYMENNT TRADE RURAL VOCATION
DEVELOPEMENT
Figure: contribution of agriculture in different sectors
The rural area is become more & more independent on the moneylender. it was necessary to
relieve the poor farmer from the clutches of village moneylender& stop their exploitation
after many days the financial institution are introduced like government ,commercial
,private& co-operative societies are introduced & they act as a financial support to the
farmers to Agriculture production.
Today the Agriculture have boom all over the world.
2.2 Introduction to financial sectorin India.
After the globalized economical process, lot of growth opportunities incorporated in
service sector. Hospitality. Entertainment, Tourism, Banking Insurance & Finance sectors
grown up fatly not only in terms of employments but also started offering various products
and services to customers. Among the above mentioned service sectors the banking and
finance sector is proved to be essential component of consumer’s life so far as financial need
are concerned.
Now–a-days the consumers are concerned about financial products in terms of
personal loans, Individual loans, and Educational Loans and Agricultural loans. Being a
student of financial management I have decided to study the Agricultural loan as a financial
product. The reasons for the same is being in the next subtitle.
2.3 Selectionof the Topic

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Regarding the topic selected by me for study purpose, I want to quote following reasons
why this specific financial product is selected.
(A) History of Agriculture
 10,000 years ago the man invented agriculture.
 A primitive form of agriculture was shifting cultivation of crops.
 After few years when these plots lost fertility & heavily infected with grass and soil born
pests, the cultivator would shift to new site.
 It is the backbone of Indian economy.
(B) Agriculture in India
 Agriculture is prime source of live hood of most of the population in India.
 It provides food for population fodder & also other needs like fiber, fuel, timber, and
wood& row materials to various industries.
 60% of the Indian population is engaged in agriculture & agro – based industries.
 At present it occupied 35% shares of the Indian economy.
 India is exporting fruits, Tea, Coffee, Basmati rice & also many other agriculture
commodities, which help to get foreign exchange.
 India is the only country having all types of soil & climatic conditions suitable for
growing variety of crops.
Different Agro-industry system suitable for Protection of environment Proper Land

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CHAPTER NO. 3
INDUSTRY PROFILE
3.1 Industry Profile:

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Indian banking is the lifeline of the nation and its people. Banking has helped in
developing the vital sectors of the economy and usher in a new dawn of progress on the
Indian horizon. The sector has translated the hopes and aspirations of millions of people into
reality. But to do so, it has had to control miles and miles of difficult terrain, suffer the
indignities of foreign rule and the pangs of partition. Today, Indian banks can confidently
compete with modern banks of the world. Before the 20th century, usury, or lending money
at a high rate of interest, was widely prevalent in rural India. Entry of Joint stock banks and
development of Cooperative movement have taken over a good deal of business from the
hands of the Indian money lender, who although still exist, have lost his menacing teeth. In
the Indian Banking System, Cooperative banks exist side by side with commercial banks and
play a supplementary role in providing need-based finance, especially for agricultural and
agriculture-based operations including farming, cattle, milk, hatchery, personal finance etc.
along with some small industries and self-employment driven activities. Generally, co-
operative banks are governed by the respective co-operative acts of state governments. But,
since banks began to be regulated by the RBI after 1 st March 1966, these banks are also
regulated by the RBI after amendment to the Banking Regulation Act 1949. The Reserve
Bank is responsible for licensing of banks and branches, and it also regulates credit limits to
state co-operative banks on behalf of primary co-operative banks for financing SSI units. 4
Banking in India originated in the first decade of 18th century with
The General Bank of India coming into existence in 1786. This was followed by Bank
of Hindustan. Both these banks are now defunct. After this, the Indian government
established three presidency banks in India. The first of three was the Bank of Bengal, which
obtains charter in 1809, the other two presidency bank, viz., the Bank of Bombay and the
Bank of Madras, were established in 1840 and 1843, respectively. The three presidency
banks were subsequently amalgamated into the Imperial Bank of India (IBI) under the
Imperial Bank of India Act, 1920 – which is now known as the State Bank of India. A couple
of decades later, foreign banks like Credit Lyonnais started their Calcutta operations in the
1850s. At that point of time, Calcutta was the most active trading port, mainly due to the
trade of the British Empire, and due to which banking activity took roots there and
prospered. The first fully Indian owned bank was the Allahabad Bank, which was established
in 1865. By the 1900s, the market expanded with the establishment of banks such as Punjab
National Bank, in 1895 in Lahore and Bank of India, in 1906, in Mumbai – both of which
were founded under private ownership.

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The Reserve Bank of India formally took on the responsibility of regulating the Indian
banking sector from 1935. After Indians independence in 1947, the Reserve Bank was
nationalized and given broader powers. As the banking institutions expand and become
increasingly complex under the impact of deregulation, innovation and technological up
gradation, it is crucial to maintain balance between efficiency and stability. During the last
30 years since nationalization tremendous changes have taken place in the financial markets
as well as in the banking industry due to financial sector reforms. The banks have shed their
traditional functions and have been innovating, improving and coming out with new types of
services to cater emerging needs of their 5 customers. Banks have been given greater
freedom to frame their own policies. Rapid advancement of technology has contributed to
significant reduction in transaction costs, facilitated greater diversification of portfolio and
improvements in credit delivery of banks. Prudential norms, in line with international
standards, have been put in place for promoting and enhancing the efficiency of banks. The
process of institution building has been strengthened with several measures in the areas of
debt recovery, asset reconstruction and securitization, consolidation, convergence, mass
banking etc. Despite this commendable progress, serious problem have emerged reflecting in
a decline in productivity and efficiency, and erosion of the profitability of the banking sector.
There has been deterioration in the quality of loan portfolio which, in turn, has come in the
way of bank’s income generation and enhancement of their capital funds. Inadequacy of
capital has been accompanied by inadequacy of loan loss provisions resulting into the
adverse impact on the depositors andinvestors confidence. The Government, therefore, set up
Narasimham Committee to look into the problems and recommend measures to improve the
health of the financial system.
The acceptance of the Narasimham Committee recommendations by the Government has
resulted in transformation of hitherto highly regimented and over bureaucratized banking
system into market driven and extremely competitive one. The massive and speedy
expansion and diversification of banking has not been without its strains. The banking
industry is entering a new phase in which it will be facing increasing competition from non-
banks not only in the domestic market but in the international markets also. The operational
structure of banking in India is expected to undergo a profound change during the next
decade. With the emergence of new private banks, the private bank sector has 6 become
enriched and diversified with focus spread to the wholesale as well as retail banking. The
existing banks have wide branch network and geographic spread, whereas the new private

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banks have the clout of massive capital, lean personnel component, the expertise in
developing sophisticated financial products and use of state-of-the-art technology. Gradual
deregulation that is being ushered in while stimulating the competition would also facilitate
forging mutually beneficial relationships, which would ultimately enhance the quality and
content of banking. In the final phase, the banking system in India will give a good account
of itself only with the combined efforts of cooperative banks, regional rural banks and
development banking institutions which are expected to provide an adequate number of
effective retail outlets to meet the emerging socio-economic challenges during the next two
decades. The electronic age has also affected the banking system, leading to very fast
electronic fund transfer.
However, the development of electronic banking has also led to new areas of risk
such as data security and integrity requiring new techniques of risk management.
Cooperative (mutual) banks are an important part of many financial systems. In a number of
countries, they are among the largest financial institutions when considered as a group.
Moreover, the share of cooperative banks has been increasing in recent years; in the sample
of banks in advanced economies and emerging markets analyzed in this paper, the market
share of cooperative banks in terms of total banking sector assets increased from about 9
percent in mid- 1990s to about 14 percent in 2004.

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CHAPTER NO. 4
COMPANY PROFILE
4.1 Introduction:

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HISTORY OF KOTAK MAHINNDRA BANK
Established in 1984, The Kotak Mahindra Group has long been one of India’s most
reputed financial organizations. In Feb 2003, Kotak Mahindra Finance Ltd., the group’s
flagship company was given the license to carry on banking business by the Reserve Bank of
India (RBI).This approval creates banking history since Kotak Mahindra Finance Ltd is the
first company in India to convert to a bank. The license authorizing the bank to carry on
banking business has been obtained from the RBI in tune with Section 22 of the Banking
Regulation Act 1949.
KMBL was promoted by Mr. Uday.S.Kotak, Kotak and Company Ltd and Mr. Sidney
& A.APinto under the name of Kotak Capital Management Finance Ltd on 21st Nov 1985
and obtained a Certificate of Commencement of Business on 11th Feb 1986.
The bank customers have access to entire VISA network of 4500 ATM’S in India and
800000ATM’S worldwide accepted in more than 56000 establishments across India and 10
million worldwide. The customer also has access to over 800 ATM’s with sharing
arrangements with UTI BANK, of these 125 are in the NCR.
Key group companies and their businesses
Kotak Mahindra Bank
The Kotak Mahindra Group's flagship company, Kotak Mahindra FinanceLtd which
was established in 1985, was converted into a bank- KotakMahindra Bank Ltd in March 2003
becoming the first Indian company toConvert into a Bank. Its banking operations offer a
central platform forCustomer relationships across the group's various businesses. The bank
hasPresence in Commercial Vehicles, Retail Finance, Corporate Banking,Treasury and
Housing Finance.
MISSION AND VISION
Mission
 Customer Service and Product Innovation tuned to diverse needs of individual and
corporate clientele.
 Continuous technology up gradation while maintaining human values.
 Progressive globalization and achieving international standards.
 Efficiency and effectiveness built on ethical practices.

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Vision:
To be the most trusted Global Indian Financial Services brand and the most preferred
financial services employer with focus on creating value.
The Global Indian Financial Services Brand
Our customers will enjoy the benefits of dealing with a global Indian brand that best
understands their needs and delivers customized pragmatic solutions across multiple
platforms.
We will be a world class Indian financial services group. Our technology and best
practices will be bench-marked along international lines while our understanding of
customers will be uniquely Indian.
The Most Preferred Employer in Financial Services
A culture of empowerment and a spirit of enterprise attracts bright minds with an
entrepreneurial streak to join us and stay with us.
Working with a home grown professionally managed company, which has
partnerships with international leaders, gives our people a perspective that is universal as well
as unique
The Most Trusted Financial Services Company
We will create an ethos of trust across all our constituents. Adheringto high standards
of compliance and corporate governance will be an integral part of building trust.
Kotak Mahindra Capital Company
Kotak Mahindra Capital Company Limited (KMCC) is India's premierInvestment
Bank. KMCC's core business areas include Equity Issuances,Mergers & Acquisitions,
Structured Finance and Advisory Services.
Kotak Securities
Kotak Securities Ltd. is one of India's largest brokerage and securities distribution
houses. Over the years, Kotak Securities has been one of the leading investment broking
houses catering to the needs of both institutionalAnd non-institutional investor categories
with presence all over the countryThrough franchisees and coordinators. Kotak Securities
Ltd. offers online andOffline services based on well-researched expertise and financial
products to
Non-institutional investors.
Kotak Mahindra Prime

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Kotak Mahindra Prime Limited (KMP) (formerly known as Kotak MahindraPrimus
Limited) has been formed with the objective of financing the retailAnd wholesale trade of
passenger and multi utility vehicles in India. KMPOffers customers retail finance for both
new as well as used cars and Wholesale finance to dealers in the automobile trade. KMP
continues to beAmong the leading car finance companies in India.
Kotak Mahindra Asset Management Company
Kotak Mahindra Asset Management Company Kotak Mahindra AssetManagement
Company (KMAMC), a subsidiary of Kotak Mahindra Bank,Is the asset manager for Kotak
Mahindra Mutual Fund (KMMF). KMMF Manages funds in excess of Rs. 20,800 crore and
offers schemes catering to Investors with varying risk-return profiles. It was the first fund
house in theCountry to launch a dedicated gilt scheme investing only in governmentSecurities
Kotak Mahindra Old Mutual Life Insurance Limited
Kotak Mahindra Old Mutual Life Insurance Limited is a joint ventureBetween Kotak
Mahindra Bank Ltd. and Old Mutual plc. Kotak LifeInsurance helps customers to take
important financial decisions at everyStage in life by offering them a wide range of
innovative life insuranceProducts, to make them financially independent.
4.2 BOARD OF DIRECTORS

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The Bank has 10 members on the Board. Dr. Shankar Acharya is the Chairman and
Mr. UdayKotak MD& CEO of the Bank.
The members of the Board are:
Dr. Shankar Acharya Chairman
Mr. UdayKotak Executive Vice Chairman
& Managing Director
Mr. C. Jayaram Joint Managing Director
Mr.Dipak Gupta Joint Managing Director
Mr. AsimGhosh Director
Mr. Amit Desai Director
Mr.PrakashApte Director
Mr.N.P. Sarda Director
Prof. S. MahendraDev Director
Mr.FaridaKhambata Director
Mr. Mark Edwin Newman Additional Director
Mr. C.Jayaram Executive Director
Mr. Dipak Gupta Executive Director
4.3ORGANIZATION FLOW CHART

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Chief Manager
Senior manager (Loans)
Assistant ManagerAssistant Manager
Senior manager (Deposits) Senior manager (Agricultural)
Clericals Clericals Clericals

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CHAPTER NO. 5
PRODUCT PROFILE
5.1 PRODUCT AND SERVICES

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Product and Services
Accounts
• Easy Access Savings Account
• Prime Savings account
• Salary Savings Account
• Power salute: A salute to the defiance forces
• Senior Privilege Savings Account
• For the woman of today – Smart Privilege Savings Account
• A complete banking solution for Trusts, Associations,
Societies, Government Bodies, Section 25 companies and NGOs
• Pension Savings Bank Account,
Deposits
• Fixed Deposits
• Recurring Deposits
• In cash 24
• Tax Saver Fixed Deposit
Loans
Welcome to the wide range of KOTAK MAHINDRA Bank's
Loan
products. Put an end to your financial troubles.
• Power Homes
• Power Drive
• Personal Power
• Study Power
• Asset Power
• Two Wheeler Loan
• Loan Against Security
• Consumer Power
Cards
Apart from Gold & Silver
credit cards, KOTAK
MAHINDRA Bank
provides
• KOTAK MAHINDRA
Bank Meal Card
• KOTAK MAHINDRA
Bank Gift Card

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1) Trust/NGO Savings Account
Thoughtful banking for people who spend their lives thinking of others Need special
banking for special causes?
KOTAK MAHINDRA Bank's Trust Account is an effort to offer thoughtful banking
for people who spend their lives thinking of others. It is a complete banking solution for
Trusts, Associations, Societies, Government Bodies, Section 25 companies and NGOs, so
that the organizations can devote all of their time to their noble motivations.
2) KOTAK MAHINDRA BANK -AGRICULTURE LOAN SCHEMES
AGRICULTURE
1 Direct finance to farmers for agriculture Purposes
1. Short term loans for raising crops i.e. Crop Loan.
2. Medium and long loans
 Purchase of agricultural implements and machinery
 Purchase of Farm nursery
 Development of irrigation potential
 Reclamation and land Development schemes
 Construction of farm buildings and structures
 Construction and running of storage facilities
Capital Markets
• Debt Solutions
• Equity Solutions
• Private Equity, Mergers & Acquisitions
• Advisory Services
• Trusteeship Services
• Depository Services
• Capital Market Funding
• e-Broking
Credit
• Working Capital Finance
• Term Loans
• Trade Services and Trade
Finance
• Structured Finance
• Supply Chain Management
• Overseas Financing and
Transactions
• SME Standard Products
• Power Trace

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MINOR IRRIGATION FOR AGRICULTURISTS
Purpose Digging of new wells, revitalization of existing well, purchase
of oil engine, electric motor, pump set installation of pipe line,
sprinkler, irrigation, drip irrigation, tube well, bore well, etc.
Eligibility Agriculturist who owns agricultural land.
Amount For new dug wells as per the NABARD Unit costs for
equipment’s/estimates.
Repayment Depending upon the repaying capacity 7 to 11 years.
Security Mortgage of land,
Hypothecation of movable assets and guarantors.
Other Terms &
Conditions
Proposed well should be located in white watershed area. It
should not be in dark watershed area.
3)KOTAK MAHINDRA BANK - LOAN FOR PURCHASE OF
AGRICULTURE LAND
 Eligibility- small and marginal farmers who would own maximum of non-irrigated
and irrigated land, share croppers/ Tenant farmers.
 Purpose- purchase, develop and cultivate agricultural land
 Margin- up to Rs.50000/- Nil , above Rs.50000/- min. 10% margin
 Security- Mortgage of land
 Interest Rate-Applicable under scheme.
 Repayment period- Loan may be repaid in 7-12 years
 Repaying capacity- The financing branch satisfies itself that borrowers have an
adequate surplus.

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4) KOTAK MAHINDRA BANK - EXPORT FINANCE
A) Types of pre- shipments finance.
B) Liquidation of packing credit advance.
C) Post shipment finance – the advance is against receivables Bank Guarantees
in foreign exchange
 Bid bond Guarantees.
 Performance Guarantees.
 Guarantees for advance payment made by foreign buyer to Indian exporter.
5)KISAN CREDIT CARD(MKCC)
KOTAK MAHINDRA BANK Kisan Credit Card
Purpose Cultivation of crops
Meeting the short-term credit needs of farmers for crop
production and allied activities etc.
Maintenance of farm equipment’s etc.
Eligibility Agriculturist who owns agricultural land
Amount As decided by District Technical committee & limit worked out
for the purpose.
Security Mortgage of land.
Hypothecation of crop/Assets.
Revolving credit facility for 3 years.

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Repayment Coinciding with harvesting of crops-season/marketing of
produce.
Other Terms &
Conditions
Assured and timely availability of working capital for crop
cultivation.
Borrowers are covered under personal accident insurance
scheme.
Insurance for notified crops is available.
6) DEVELOPMENT OF COMMERCIL HORTICULTURE THOUGH
PRODUCTION AND POST HARVEST MANAGEMENT(N..H.B)
 To improve linkage between horticultural producers and marketers To create
integrated network for marketing of horticultural product.
 High density plantation, Micro-Propagations.
Horticulture
Purpose Cultivation of fruit crops-mango, Pomegranate, Grapes etc.
Eligibility Agriculturist with adequate provision of irrigation
Amount As per NABARD Unit costs/ Project
Security Mortgage of land.
Hypothecation of crops.
Repayment Within 15 years.

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CHAPTER NO. 6
OBJECTIVE OF STUDY

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6.1 Objectives of the Study:
The study is undertaken with the following objectives.
 To study the concept of agricultural loan
 To study the perception of farmers towards Kotak Mahindra Bank agricultural loan
 To find out the awareness of farmers about various types of financial products for
agriculture

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CHAPTER NO. 7
RESEARCH
METHODOLOGY

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7.1 Research Methodology
Research Definition:-
Research is a scientific activity in which decision is made & problem is solved.
1 )Research Methodology
The method or formwork within which the research is to be done is called Research
Methodology.
Type of Research of my study is
 Exploratory
 Descriptive procedure of KOTAK MAHINDRA BANK
2) Data Collection
(1) Primary Data :-
In the form of feedback of the farmers collected through questionnaire.
(2) Secondary Data : -
All the data is collected from the books, publication, Records by the bank. Websites.
Sample Size :-
The determined sample size for the study is 100 farmers.
Hypothesis:
Related to the study undertaken, following statements can be the statements for hypothesis,
1) Agriculture credit/ finance has its impact on the farmer’s progress
2) Agriculture credit/ finance has no impact on the farmer’s progress
3) The farmer’s borrowed loan from KOTAK MAHINDRA BANK are satisfied
4) The farmer’s borrowed loans from KOTAK MAHINDRA BANK are not satisfied.
3) Scope of the Study
The scope of the study lies in three dimensions.
(a) Scope for the Student
The student studying the topic will get an exposure to the Agriculture Sector, financial
procedure to agriculture credit finance procedure.

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(b) Scope for KOTAK MAHINDRA BANK
The Kotak Mahindra Bank as an organizational study, will come to know the exact
feedback of customers for the schemes & offer they are making towards them it some
derivation will found then definitely it will useful for the Bank itself to improve their
functioning.
(c) Scope for the society in general
As the agriculture sector and the farmers are the part and parcel of the society, the study itself
and the findings as such will be definitely useful for the society. The society in general and
farmers in particular can be well understood in terms of the agriculture Finance procedures
4) Limitation of the Study
The study is completed with following probable limitations.
 Only one is bank is selected to study so there is no comparative analysis.
 The scope is limited for Ahmednagar district & specifically Shrirampur branch
 The time available for the purpose of study is very less i.e. two months only. Mostly
secondary data is referred than the primary data for the study is limited.

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CHAPTER NO. 8
THEORETICAL
BACKGROUND OF THE
STUDY

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8.1 Terms & concepts
1) Agriculture
Agriculture is most important enterprise in India. It is a very broad term comprising
all aspect of production .It provides food for population ,fodder for livestock & fulfills needs
like fiber, Fuel, timbre, wood & Raw Material to various industries.
April: Soil.
Culture: Cultivation
2) Agricultural Finance
The funds are required for the agriculture & for its allied activities. it provides financial
assistance to various purposes or agriculture operation for short & medium periods like minor
Irrigation, Land Development, soil conservation, Farm mechanization, Plantation &
Horticulture , cold Storage & other Allied activities.
3) Direct Agriculture loans
It means short term production & investment loans provided directly to farmers for
agriculture purposes. This would also include such loans provided directly to farmers for
agriculture Purposes.
4) Need of agriculture finance
2/3rd population depends on agriculture. Low growth in agriculture output results in
rise in food prices. Majority of the poor are farmers, a labor& casual labortherefore for
reduction ultimately & elimination of poverty. Agriculture has a significant share in GDP . If
GDP is low then overall GDP is fall down.
5) Agricultural Finance
Since independence India has made substantial progress in respect of agricultural
finance. The reports of all India Rural Credit Survey Committee and All India Rural Credit
Review Show That farmers were entirely dependent sources of credit. Money Enders are
main sources of credit. They were most convenient and easiest source . his administration as
simple and flexible. The Indian government launched the three-tier banking structure in India.
At the apex is NABARD at the middle level are the urban co-operative banks (UCBS) and a
few public sector banks (PSBS); and at the base are Primary Agriculture credit societies
(PACS).

36
 NABARD
 UCBS, PSBS
 PACS
6)Finance in villages is of two types
1. Agricultural finance (credit)
2. Non Agricultural finance
1)Agricultural credit is of two types
1. Production credit
2. Consumption credit
PRODUCTION CREDIT
a. Short term:
Loans for 15to 18 months.
Loans for meet daily working requirements
 Cash components
 Kind component: co-operative marketing societies.
b. Medium term
 Loans for 15months to 5 years.
 NABARD gives loan for 1 to 7 years.
 Creating capital asset
 Purchase livestock, machinery, equipment
c. LONG TERM
 5-7 YEARS
 Land fencing mechanization construction of farm house, storage facilities
2) CONSUMPTION CREDIT
It is basically for survival of farm families
Sources of agricultural credit

37
A) Co-operative credit
 Primary co-operative credit :short term
 Co-operative land development bank : medium term
B) RBI
 THE National agree credit fund(long term & stabilization RBI guidelines
 Margin and Security
 Credit norms finance: cash to kind proportion.
 Recovery r default
C) SBI
 IT provides financial assistance to marketing.
D) Commercial Banks
 Direct finance is granted for agricultural operation for short period.
E) Agricultural refinance
 Co-ordinate , guide and assist long term finance.
 Help in reduction of regional imbalances.
 Reduce regional disparities.
F) RRB
 Rural based
 Cater to need back word areas
 Authorized capital structure: Rs. 1 crore
G) NABARD
(National bank for Agriculture and Rural development)
 Serve as a an apex refinancing agency.
 Co-ordination the rural financing activity.
 Monitoring and evaluation of projects refinanced by it.
H) Government finance
 To assist farmers overcome emergencies.
 Land Improvement loans Act 1883- Long term
 Agriculturist loans Act 1884- short term.

38
Current Situation *****
Agriculture Debt Waiver & debt relief scheme 2008
Hon`ble Union Finance minister during his budget speech for 2015-16 announced above
scheme for farmers. It covers direct agriculture loan extended to marginal & small farmers &
Other farmers. It includes short term production loan & investment loans to farmers for
agriculture purpose.
Short term production loan:
A loan gives in connection with rising of crops which is to be repaid within 18
months.
It includes working capital loans not exceeding rs. 1.00 lacs.
Investment loan:
It related to the replacement & maintenance of wasting asset
E.g. Tractor dug well, installation of pump sets
It divides farmers into 3 types
 Marginal farmer
It means farmer cultivating agriculture land up to 1 hectare (2.5 Acres).
 Small farmer
Farmer cultivating agriculture land of more 1 hectare up to 2 hectare (5 Acres).
 Other farmers
Farmer cultivating agriculture land more than 2 hectare (more than 5 Acres).
Salient features
 Production loan for plantation & horticulture crops to be covered the scheme a
ceiling of Rs. 1.00 Lakh has been prescribed.
 Term loans overdue portion as on 31st Dec. 2007 7 which is not repaid up to
29.02.2008 will eligible for waiver in case of small & marginal farmers.
 Loans availed by the farmers in for agriculture activities up to 50000 will be
eligible for loan waiver for all farmers.

39
 In case of other farmers there will be one time settlement under which the farmer
will give 25% is rebate & eligible amount pays the balance of 75% eligible
amount.
KOTAK MAHINDRA BANK is lead bank in Ahmednagar district. It implemented the
scheme in right earnest& true spirit. It has identified 1, 38,000 borrowers. The small farmer
who have become eligible for the waiver is 91,000 & the to be waived Rs. 22,205.75 lacs. In
other farmers in which 47000

40
CHAPTER NO. 9
DATA ANALYSIS
AND INTERPRETATION

41
9.1 SECURITIES
Securities against which banks lends money can be of two types.
Primary Security
Whenever any loan is sanctioned some goods or assets are brought with the help of funds .
These are called Primary Security.
Collateral security
On Primary Security bank don`t have control on goods. The goods are under lock Key of the
bank. In such cases, bank prefer to insist some additional security which is called as collateral
securities.
KOTAK MAHINDRA BANK gives revised margin & security norms for Agriculture
Advances.
Sr.No. Type of credit Loan amount Margin
1 Margin money
a. Crop loans & other short
Term loans.
i. Up to Rs. 50000/-
ii. Over Rs. 50000/-
No Margin.
15to 20%(depend
on quantum of
finance).
b. Term Loans i. Up to Rs. 50000/-
No Margin.
15to20%.
2 Security norms
c. Crop loans & other short
Term loans.
i. Up to Rs. 50000/-
ii. Over Rs. 50000
Hypothecation of
crops.
Mortgage of land&
third party
guarantee.
d. Term loans i. Up to Rs. 50000/-
Hypothecation of
Asset. Land.

42
9.2 Disbursement of Loan in 5 Year
Sr.No Year Loan Amount (lack)
1 2015-2016 89.16
2 2014-2015 68.93
3 2013-2014 48.78
4 2012-2013 42.65
5 2011-2012 38.32
(SOURCE: PRIMERY DATA)
INTERPRETATION
The above graph indicates classification of number of farmers in having loan
Their loan amount increased year by year.
0
10
20
30
40
50
60
70
80
90
2015-2016 2014-2015 2013-2014 2012-2013 2011-2012
Disbursementof Loan in 5 Year

43
9.3 Last 5 year Defaulter of Kotak Mahindra bank
Sr.No Year No of farmer Amount(Rs)
1 2015-2016 4 68000
2 2014-2015 7 98000
3 2013-2014 7 105000
4 2012-2013 10 115000
5 2011-2012 12 109000
INTERPRETATION
The above graph indicates classification of number of farmersDefaulterand
TheMinimumnumber of 4 farmers having Defaulter loan is 2015-2016 in Rs 68000The
maximum numberof 12 farmershavingDefaulter loan is 2011-2012 in Rs 109000
0
20000
40000
60000
80000
100000
120000
2015-2016 2014-2015 2013-2014 2012-2013 2011-2012
Last 5 year Defaulter of Kotak Mahindra bank
No of farmer Amount(Rs)

44
9.4 Analysis & Interpretation of data
A) Age Group
Sr. No. Age Group No.of Farmers Percentage
1 20-30 4 4%
2 30-40 26 26%
3 40-50 40 40%
4 50-60 12 12%
5 60-70 10 10%
6 70-80 16 16%
Total 100 100%
(SOURCE: PRIMARY DATA)
INTERPRETATION
The above graph indicates classification of number of farmers in terms of age group.
Maximum number of farmer belongs to the age group 40-50 i.e 40 in numbers
40%.Minimum number of farmer in the age group 20-30 i.e. 4 in number & 4%
0
10
20
30
40
50
20-30 30-40 40-50 50-60 60-70 70-80
Age Group
No.of Farmers Percentage

45
B) Land holdings of farmers
Sr. No. Land in Acres No. of farmers Percentage
1 0-5 44 44%
2 5-10 20 20%
3
10-15 16 16%
4
15-20 10 10%
5 20-25 4 4%
6
25 & Above 6 6%
Total
100 100%
INTERPRETATION
The above graph indicates that classification of number of farmers in terms of Land
holdings in Acres The maximum number of farmers having in age group of 0-5 land in acres
i.e. 44 farmers & 44 %The minimum number belongs to group of 20-25 lands in Acres have
4 Farmers are 4%.
0
5
10
15
20
25
30
35
40
45
50
0-5 5_10 10_15 15_20 20_25 25_30 No of Farmers

46
C) Gender of Farmers
Sr.no. GENDER No. of Farmers Percentage
1 Male 82 82%
2 Female 18 18%
Total 100 100%
INTERPRETATION
The above chart indicates the distribution of Farmers according to Gender. In which male
farmers have a majority.82 in number. & 82%.The minimum number of female 18 in number
&18%.
Male
82%
Female
18%
Gender Of the farmer
Male
Female

47
D) Purpose of borrowing loan
Sr. No GENDER No. of
Farmers
%
1 Farming purchase 4 4%
2 Equipment 14 14%
3 Irrigation 52 52%
4 Development 10 10%
5 Other(Plantation, Angle) 20 20%
Total 100 100%
INTERPRETATION
Above chart shows the Farmers taking loan from the bank for various purposes like farming
purchase, Equipment, Irrigation, Development & Other activities like (Plantation, Angle).
In which maximum number of farmer taking more credit for Drip Irrigation is 52% & 20%
for the other agriculture activities.
E) Media / Sources ofinformation
4 14
52
10 20
0
10
20
30
40
50
60
NumberofFarmers
Purposes
Purpose of Borrowing Loan
Series1

48
Sr.No. Sources of
Information
No. of Farmers %
1 Newspaper 8 8%
2 T.V - -
3 Bank Officers 32 32%
4 Friends & Relatives 60 60%
Total 100 100%
INTERPRETATION
The above chart shows that bank creates awareness in the people through different sources of
information like Newspaper,Bank officers, T.V & Friend & Relatives.
The maximum number of people comes to know about agriculture loan schemes of Kotak
Mahindra bank through Friends & Relatives i.e. 60% & from Bank officers is 32%.
F) Satisfactionabout Loan Procedure
8 0
32
60
Newspaper T.V Bank Officers Friends &
Relatives
NumberofFarmers
Medias
Sources of Information
Series1

49
Sr. No Satisfaction Level No. Of Farmer No. Of Farmer In
%
1 YES 62 96%
2 NO 9 4%
INTERPRETATION
The above chart shows the satisfaction level of farmers about the loan procedure of Kotak
Mahindra Bank In which 96% of the farmers are satisfied about the loan procedure.
& 4% of the farmers are not satisfied.
96%
4%
SATISFACTION ABOUT LOAN PROCEDURE
Yes No

50
G) Approach of Bank Officers towards farmers
Sr. No. Heads No. of Farmers %
1 Co- operative 84 84%
2 Friendly 16 16%
3 Non co-operative - -
Total 100 100%
INTERPRETATION
The above table shows the approach of bank officers towards Farmers. Like Co-
operative, friendly & Non co-operative. 84% of farmer said that Approach of bank officers
towards the farmers is co-operative, & 16% are said that Approach of bank officers towards
the farmers Friendly in nature.
Approach of Bank officers
0
10
20
30
40
50
60
70
80
90
Co-operative Friendly Non Co-operative
Heads
No.ofFarmers
Series2
Series1

51
H) Feedback aboutInterest Rate
Sr. No. Feedback about
Interest Rate
No. of Farmers %
1 High 4 4%
2 Medium 84 84%
3 Less 12 12%
Total 100 100%
INTERPRETATION
Above chart shows feedback about interest rates on the Agriculture Loan. The majority of the
Farmers means 84% said that interest Rate is Medium.12% said that the rate is Less& 4%
said that Rate is High.
Feedback about Interest Rate
0
10
20
30
40
50
60
70
80
90
High Medium Less
Heads
No.ofFarmers
Series1

52
I) Feedback aboutwaiting period for Sanctioning & Disbursement of loan
Sr. No. Opinion No. of Farmers %
1 Long 22 22%
2 Short 78 78%
Total 100 100%
INTERPRETATION
Above chart shows feedback about Waiting Period for Sanctioning & Disbursement of
loan.78% farmers think that Waiting Period for Sanctioning & Disbursement of loan is short
& 22% farmers think that it is long period.
Long
22%
Short
78%
Waiting Period for Sanction and
Disbursment

53
J) Opinion about Repayment option
1 Hard 12 12%
2 Medium 38 38%
3. Easy 50 50%
Total 100 100%
INTERPRETATION
Above chart shows Opinion about Repayment option of the Loan In which 50% of farmers
said that Repayment loan option are easy& 12% people said that Repayment loan option is
Hard.
0
5
10
15
20
25
30
35
40
45
50
Hard Medium Easy
Opinion about Repayment option

54
K) Awareness about the FinancialProduct
Sr. No. Financial Products No. of Farmers %
1 N.H.B ( National Horticulture
Board)
10 10%
2 Kisan Credit Card 5 5%
3 Drip Irrigation 35 35%
4 Vehicle Loan 12 12%
5 Cold Storage 10 10%
6 Allied activity 15 15%
7 Agri clinic &Agri business 5 5%
8 Not known 8 8%
Total 100 100%
INTERPRETATION
Above chart shows the awareness in the people related to Financial Product of the agriculture
loan schemes of the KOTAK MAHINDRA BANK
0
5
10
15
20
25
30
35
40
N.H.B(National
HorticultureBoard)
KisanCreditCard
DripIrrigation
VehicleLoan
ColdStorage
Alliedactivity
Agriclinic&Agri
business
Notknown
1 2 3 4 5 6 7 8
Series1
Series2

55
L) Farmers wants to recommend the KOTAK MAHINDRA BANK To
Others
1 Yes 92 92%
2 No 8 8%
Total 100 100%
INTERPRETATION
Above chart shows the farmers want to recommend the Bank of Maharashtra to others
in which 92% people wants to recommend & 8% people don’t have any interest to
recommend Bank of Maharashtra to others.
92%
8%
Recommendationto other
Yes
No

57
Findings
 Many farmers are borrowing loan for agriculture loan for Irrigation i.e. Drip
Irrigation.
 Farmers are less aware about the other financial product related to the to agriculture
loan.
 The Awareness about the different financial product related to agriculture loan is very
 less like N.H.B. (National Horticulture Board), Kisan credit card and for Agri –
business and Agri – clinic.
 no one farmer came to know through the T.V so the very less awareness through the
T.V.
 Age group of 40-50 borrowing loan from the bank.
 In general observation found that many farmers are intentionally avoid repayment of
loan.
 If more than one agency lends money for the same purpose at the same time there is
an overlapping of credit to borrower.

59
Conclusions
After analyzing & interpreting Data it was found that Kotak Mahindra Bank is very
good various facilities are provided to farmer’s relation between the branch officers & the
farmers are very good.
Relatedto Study
 Maximum no. of farmers belong to age group 40 – 50 i.e. 40%.
In India have a Hindu undivided family system in which only one person is head
of the family. They have knowledge about farming activities. He can handle the
all responsibilities related to family. He also have handholding as a security.
 In which the 82% of land belongs to the male farmers according to HUF. Head of
the family is a male farmer so the male farmer is more than female farmer.
 Maximum number of farmers belongs to age Landholding 0 – 5 Acres i.e. the
44%. It because of division of family. They also think that when small farm is
available we can develop the land by using the different techniques like farm
mechanization, fertilizers & effective utilization of resources.
 60% farmers come to know through friends & relatives penetration of banking
sector reach to the remote consumers & create awareness among farmers about the
different loan scheme so the information is spread more through friends &
relatives.
 Farmers said that approach of Bank officers towards farmers is co – operative
Bank officers aim to bridging the gap between their co – operative approach to
friendly approach and provide continuously inform about the different Scheme.
 In the loan schemes many farmers take loan for irrigation i.e. Drip irrigation for
horticulture plantation (Grapes, pomegranate) farmers also get subsidy for
plantation. 50% of the total cost for Drip irrigation.
 Bank officers are co – operative & provide every information to farmers, which
are needed & provide knowledge about different schemes. They have full
involvement of Branch manager. Successful marketing of Agriculture loan with
zeal and mission.

60
 Kotak Mahindra Bank a medium rate of interest said by farmers. The rate of
interest is only levied on whatever amount is withdrawn from sanctioned amount.
So interest only paid on that amount.
 The gap between sanctioned and disbursement is keep at minimum level cheap,
timely and adequate, provision of loans. It helps agriculture diversification. The
very short period for sanctioning disbursement of loan said by 78% of farmers.
 92% farmers said that repayment of loan is easy because they give some time to
repayment of loan. They encourage people by providing extensive credit and
smooth recovery. Adjustment in Borrowers Account in which the repayment
schedule will be drawn on the loan amount in such way that subsidy amount is
adjusted after the bank loan portion (excluding subsidy) is liquidated.
 96% farmers are satisfied about loan procedure because fewer documents are
required. It takes less five for sanctioning and disbursement. They consider
agriculture land as a security and sanctioned the loan otherwise it is very difficult
to get financial support because land is not easily converted into money. It
produces productive lending to farmer

62
Suggestions
Looking at the level of awareness it is recommends that promotion of agriculture loan
different can be done in different ways
 Bank officers also have to increase the contacts with farmers. Encourage the people
by conducting seminars; some programmers related to the agricultural schemes how it
is useful in remote areas. So it creates awareness in the farmers.
 Bank have to focus on enhancing the quality of the some new schemes related to the
farm development, equipment, plantation and farm mechanization which are helpful
to fostering the agriculture production which are more important for the development
of Indian economy
 So the, Bank have so take some efforts to create awareness about different financial
product by taking some programmers and bank officers have play a proactive role in
aggressive marketing of short term and investment credit to potential borrowers.
 Bank will have to some promotional activities through T.V
 People of young age group who are risk takes by nature may be targeted separately.
At present era they are taking the decision related each and activity in the family. So
the bank officers have to target the youngster’s age group.
 some farmers are capable to repay the loan but they intentionally avoid to repay the
loan. In which the government & bank recovery policy should tighten-up. after
recovery of the funds can utilized for various purposes.
 Because of overlapping of credit result in financial indiscipline both parts of lenders
& borrowers. There is strictly restrict to farmers to borrowing loan from more than
one agency

63
CHAPTER NO. 13
LEARNING THROUGH
THE PROJECT

64
LEARNING FROM PROJECT:
I have done my summer internships in the Bank which is Kotak Mahindra Bank Pvt.
Ltd. This Bank is private sector Bank, basically they are attention to selling Banking products
in Market.
I had joined Kotak Mahindra Bank Shrirampur Branch as an intern on 25th may 2016
to 25 July 2016. There my work an Agricultural Loan,to motivate the people to open the
Account in Kotak Mahindra Bank.
There I came to know a brief information about various, Loan dept., Insurance dept.
During my project they not only gave me the information about some financial but also
taught website given the information to me. I have Study financial Management & Operation
of Kotak Mahindra Bank & I have learn in that how is Banking process and they are how do,
then how to create relationship with the customer, then how to sold product in market. The
financial position so Bank is creased liquidity and reduce operating expenses due to high
returns to stakeholders.

66
Bibliography
 Author. Kothari C.R, “Research Methodology” 1998 3rdEdition.
 S.K.Puri “Indian Economy”1996, 2th Edition.
 P.N. Varshney “Banking Law & Practices”1991 4th Edition.
 Kotak MahindraBank Annual Report.
 Publication of Kotak Mahindra Bank
 www.kotakmahindra.com

67
Annexures
- QUESTIONNAIRE (FARMERS) -
Name :-
Address :-
Age :- Sex :- M/ F
Marital Status:- Single / Married
Landholding (Acre) :- Contact No.
Q.1. Have you borrowed Agriculture Loan from KOTAK MAHINDRABANK?
Yes No
Q.2. If yes from which branch and why?
Q.3 Give reasons, why do you have selected KOTAK MAHINDRA BANK?
i)
ii)
Q.4. How did you come to know about Agriculture Loan of KOTAK MAHINDRA BANK?
(i) Newspaper (ii) T.V. (iii) Bank officers (iv) Friends and Relatives
Q.5. What is the purpose of borrowing the loan?
(i) Farming purchase (ii) Equipment (iii) Irrigation (iv) Development (v) Other
Q.6. Are you satisfied with the Loan procedure of KOTAK MAHINDRA BANK?
Yes No
Q.7. If Yes, Why? And If No, Why? Specify reasons?
i)
ii)
Q.8. Give your Comment on :-
i) Approach of Bank officers :- co-operative / friendly / Non – co- operative.
ii) Interest Rates:- High / medium / less.
iii)Repayment option :- Hard / Easy
iv) Waiting period for sanctioning and disbursement of loans: - Long / Short
Q.9. Are you aware about other financial products related to agriculture loan KOTAK
MAHINDRA BANK?
If yes, enlist some of them.
i) ii)
Q. 10. Do you want to recommend KOTAK MAHINDRA BANK agriculture loan to the others?
Yes No
( )
Name of the Farmer & Signature

A Study of Agriculture Loan of Kotak Mahindra Bank (MBA Finance)

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