Synopsis
On
“Comparitive study of education loans of Canara bank, SBI and HDFC,
ICICI Bank. ”
A report submitted to Rashtrasant Tukadoji Maharaj Nagpur University, in
partial fulfillment of the requirements for award of the degree of Bachelor of
Business Administration, Specialization in Finance
Academic Session 2019-20
Submitted By:
Shriya Gupta
BBA-III
Under the Guidance of:
Dr. Yogesh Gharpure
Tirpude Institute of Management Education 1, Balasaheb Tirpude Marg,
Civil Lines, Sadar, Nagpur
1. Introduction
Education Loan
What Is an Education Loan?
An education loan is a sum of money borrowed to finance college or other school-related
expenses. Payments are often deferred while students are in school and for a six-month grace
period after graduation.
How an Education Loan Works
Education loans are issued for the purpose of attending an academic institution and pursuing an
academic degree. Education loans can be obtained from the government or through private-
sector lending sources. Federal loans often offer lower interest rates, and some also offer
subsidized interest. Private-sector loans generally follow more of a traditional lending process
for application, with rates typically higher than federal government loans.
Types of Education Loans
Although there are a variety of education loans, they break down into two basic types: public
(federal) loans and private loans.
Federal Student Loans
Most borrowers seek federal government financing first if they need to borrow funds for
education expenses. Thus, the first step in seeking education loans is completing a free
application for federal student aid (FAFSA). Varying information will be required for each
applicant depending on their situation and parent dependency. A credit check is not generally
required and the amount of principal on the loan or loans is primarily based on the school a
student will be attending. Once a FAFSA form is completed the government will work with the
schools listed on the application to identify the financial aid package that the student is eligible
for.
Private Student Loans
In some cases, the student loan package issued following a FAFSA form completion may suggest
the borrower apply for additional funds through private lenders. These types of loans will follow
a more standardized application process, typical of any private sector loan, with a credit check
usually required.
Borrowers can apply directly to individual private-sector lenders for funds. Similar to federal
funds, the approved amount will be influenced by the school a borrower is attending. If
approved, funds for educational expenses will first be disbursed to the school to cover pending
bills with the remaining amount of principal sent directly to the borrower.
Special Considerations for Education Loans
Accumulated debt from college can be an overwhelming burden after school days are done.
Upon graduation borrowers will be required to begin payments on their student loans, typically
after a six-month grace period.
If a student has taken out numerous education loans, consolidating them can be a good option for
more easily managing the debt load. Multiple federal education loans can be combined into a
single direct consolidation loan. Also, many private lenders now allow borrowers to combine
both their federal and private loans into one loan. Note: The new loan will be a private one,
issued by the lender. You can't roll up private and public loans into a new federal one. For that
reason, the debt will no longer be eligible for certain federal programs for loan forgiveness and
repayment.
2. Introduction to Industry
The rapid transformation in the banking industry over the last decade has made the industry
stronger, cleaner, transparent, efficient, faster, disciplined and a lot more competitive. The
banking industry in India has a huge canvass of history, which covers the traditional banking
practices from the time of Britishers to the reforms period, nationalization to privatization of
banks and now increasing numbers of foreign banks in India. Therefore, banking in India has
been through a long journey. Rural banking and micro financing are the two gateways for the
Indian banks to grow and compete with international banks.
As we know finance is considered as the life blood of all economic activities and has become
integral part of modern business. A country’s financial system works in a set of financial
markets, financial services and financial institutions.
Broadly, the financial market is categorized into two groups viz.:
(a) Money market which deals only with short term finance, and
(b) Capital market which deals with long- term funds.
Banking industry is the back bone for the growth of any economy. In the recent time, we are
witnessed that the World Economy is passing through some small details or parts circumstances
as bankruptcy of banking and financial institutions, debt crisis in major economies of the world
and euro zone crisis. The banking scenario has become very uncertain causing recession in major
economies like US and Europe.
Generally banking in India was fairly mature in terms of supply, product range and reach- even
though reach in rural India and to the poor still remains a challenge. The government has
developed initiatives to address this through the State Bank of India expanding its branch
network and through the National Bank for Agriculture and Rural Development with things like
microfinance. This also included the 2014 plan by the then prime minister to bring bank accounts
to the estimated 40% of the population that were still unbanked. Banks are a subset of the
financial services industry.
A banking system also referred as a system provided by the bank which offers cash management
services for customers, reporting the transactions of their accounts and portfolios, throughout
day. The banking system India should not only be hassle free but it should be able to meet the
new challenges posed by the technology and any other external and internal factors.
For past three decades, India’s banking system has several outstanding achievements to its credit.
The banks are the main participants of the financial system in India. The Banking sector offers
several facilities and opportunities to their customers. All the banks safeguard the money and
valuables and provide loans, credit, and payment services, such as checking accounts, money
order, and cashier’s cheques.
3. Company profile
CANARA BANK
Canara Bank Ltd. is an India-based bank. The Bank's segments include Treasury Operations,
Retail Banking Operations, Wholesale Banking Operations and Other Banking Operations. The
Bank provides personal banking, corporate banking, non-resident Indians banking, Internet
banking, and micro, small and medium enterprises (MSME) banking services. Its retail lending
operations include education loans and vehicle loans. Its other services include merchant
banking; depository services; executor, trustee and taxation services, and online payment
services. It handles various government business products consisting of direct and indirect tax
collections; payment of pensions of Central Government and State Government; handling of
postal transactions and State Government treasury transactions; public provident fund scheme
and senior citizens' saving scheme, and issue of inflation indexed bonds of Reserve Bank of
India. It has approximately 5,850 branches, including over eight overseas branches.
SBI BANK
SBI is an Indian multinational, Public Sector banking and financial services company. SBI is one
of India’s major banks and is an industry leader in terms of size, business sector promotion and
initiatives for the progress and economic enhancement of the Indian economy.
SBI is entering into many new businesses with strategic tie ups – Pension Funds, General
Insurance, Custodial Services, Private Equity, Mobile Banking, Point of Sale Merchant
Acquisition, Advisory Services, organized items and so on – every one of these activities having
a massive potential for development.SBI is moving forward with forefront innovation and
imaginative new saving money models, to strengthen its presence and widen its client base.The
bouquet of services provided by SBI includes Personal Banking, International, Banking,
Agriculture / Rural and Corporate Banking, SME, Government Business and Domestic Treasury.
SBI is a universally acknowledged regional banking giant and has 20% market share in deposits
and loans among Indian commercial banks.
As on 31.03.2015 revenue earned by SBI was Rs. 2.573 trillion and Net Income was Rs. 175.2
billion. By the end of December 2013, SBI had assets worth US$388 billion and 17,000
branches, including 190 foreign offices, making it the largest banking and financial services
company in India by assets.SBI has acquired local banks as part of rescue efforts. Bank of Bihar
was acquired in 1969 along with its 28 branches. Krishnaram Baldeo Bank was acquired in 1975
and the Bank of Cochin in Kerala was acquired in 1985 along with its 120 branches. SBI share
is listed in NSE stock market by the symbol of SBIN
HDFC BANK
HDFC Bank was incorporated in 1994, with its registered office in Mumbai, Maharashtra, India.
Its first corporate office and a full service branch at Sandoz House, Worli were inaugurated by
the then Union Finance Minister, Manmohan Singh.
As of June 30, 2019, the Bank's distribution network was at 5,130 branches across 2,764 cities.
The bank also installed 4.30 Lakhs POS terminals and issued 235.7 Lakhs debit cards and 85.4
Lakhs credit cards in FY 2017.[6]
HDFC Bank provides a number of products and services including wholesale banking, retail
banking, treasury, auto loans, two wheeler loans, personal loans, loans against property,
consumer durable loan, lifestyle loan and credit cards. Along with this various digital products
are Payzapp and SmartBUY.[12]
ICICI BANK
Incorporation Year: 1994
Ownership Group: ICICI Group
Headquarter: Mumbai, Maharashtra, India
Chairman: M.K. Sharma
Present Head(MD and CEO): Sandeep Bakhshi
Chief Financial Officer: Rakesh Jha
One of the oldest private banks standing in our country, ICICI Bank is the leader in the private
sector.ICICI Bank( Industrial Credit and Investment Corporation of India) is a multinational
banking and financial services company.
The bank caters to both corporate and retail customers through a variety of delivery channels and
subsidiaries. These subsidiaries focus on areas like investment banking, life, non-life insurance,
venture capital, and asset management.
Further, it is indeed an international bank with a presence in 19 countries. The bank currently has
a network of 4867 branches and 14367 ATMs across India. In 2016, it saw a revenue of US$10.3
billion and employed 74,096..
Company’s Own Words
Vision: To be the leading provider of financial services in India and a major global bank.
Mission: ICICI will leverage our people, technology, speed and financial capital to:
be the banker of the first choice for our customers by delivering high quality, world-class
products, and services.
expand the frontiers of our business globally.
play a proactive role in the full realization of India’s potential.
maintain a healthy financial profile and diversify our earnings across businesses and
geographies.
maintain high standards of governance and ethics.
contribute positively to the various countries and markets in which we operate.
create value for our stakeholders.
4. Objectives and Hypothesis
Objectives of study
Objectives of the study areas as below:
1. To study the process of education loans in banks.
2. To compare education loans of private banks to that of public banks.
3. To analyse most popular loan schemes provide by the banks under study.
4. To find out which bank is more preferred by students.
5. Research Methodology
Research methodology is the specific procedures or techniques used to
identify, select, process, and analyze information about a topic.
1. Type of research
In this research I have adopted the descriptive research method for
CANARA bank, SBI, HDFC and ICICI banks.
2. Types of data used :
Primary data
Secondary data
3. Methods of data collection
Primary data :- Information is collected through direct interview and
questionire of customers and employees of bank.
Secondary data :- Information is collected from
-libraries, digital libraries, online weblogs, articles, journals
-Data available on company's website.
-Wikipedia
- Bank old record books.
Sampling method:
The type of sampling method used is simple random method.
4. Sample size:
It has been collected from 4 banks.
5. Sample Distribution:
sample is used to describe a portion selected from a population.
Data are collecteld for each and every unit of a population universe which
are of interest for any particular situation.
Students of the age group 18- 25 years are selected for interviews. And
banks employee are selected.
6. Tools of analysis:
Check sheet - The check sheet is a structured, prepared form for collecting
and analyzing data.
