ANALYZE THE CORRELATION BETWEEN THE CREDIT

FACILITIES AND BUYER’S PURCHASING HABIT.

FACAULTY SUPERVISOR: MRS.SUMAM VIJ

VIRBHADRA KAPOOR
8NBDH198
MBA (2008-10)
ICFAI NATIONAL COLLEGE DEHRADUN

CONTENTS
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Introduction…………………...………………………………………3-6

Objective of the study……………………………………………….…..6

Description of the problems………………………………………….…7

Justification for the purposed study……………………………………..8

Database………………………………………………………………..9

Methodology/Analytical procedure……………………………………10

Project schedule…………………..………………………………..…..11

References……..…………………………………………………….....12

INTRODUCTION
Banking Sector

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Financial sector reforms were initiated as part of overall economic reforms in the country and
wide ranging reforms covering industry, trade, taxation, external sector, banking and financial
markets have been carried out since mid1991. A decade of economic and financial sector
reforms has strengthened the fundamentals of the Indian economy and transformed the operating
environment for banks and financial institutions in the country. The sustained and gradual pace
of reforms has helped avoid any crisis and has actually fuelled growth. As pointed out in the RBI
Annual Report 2001-02, GDP growth in the 10 years after reforms i.e. 1992-93 to 2001-02
averaged 6.0%against 5.8% recorded during 1980-81 to 1989-90 in the pre-reform period.

The most significant achievement of the financial sector reforms has been the marked
improvement in the financial health of commercial banks in terms of capital adequacy,
profitability and asset quality as also greater attention to risk management. Further, deregulation
has opened up new opportunities for banks to increase revenues by diversifying into investment
banking, insurance, credit cards, depository services, mortgage financing, securitization, etc. At
the same time, liberalization has brought greater competition among banks, both domestic and
foreign, as well as competition from mutual funds, NBFCs, post office, etc. Post-WTO,
competition will only get intensified, as large global players emerge on the scene. Increasing
competition is squeezing profitability and forcing banks to work efficiently on shrinking spreads.
Positive fallout of competition is the greater choice available to consumers, and the increased
level of sophistication and technology in banks. As banks benchmark themselves against global
standards, there has been a marked increase in disclosures and transparency in bank balance
sheets as also greater focus on corporate governance.

Challenges Ahead:
• Improving profitability:

• Reinforcing technology

• Reinforcing technology

• Sharpening skills

• Greater customer orientation

• Corporate governance

• International standards

A bank is a financial institution licensed by a government. Its primary activities include

borrowing and lending money. Many other financial activities were allowed over time.

Under English common law, a banker is defined as a person who carries on the business of
banking, which is specified as:

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 • Conducting current accounts for his customers
• Paying cheques drawn on him, and
• Collecting cheques for his customers.

CONCLUSION
The face of banking is changing rapidly. Competition is going to be tough and with financial
liberalization under the WTO, banks in India will have to benchmark themselves against the best
in the world. For a strong and resilient banking and financial system, therefore, banks need to go
beyond peripheral issues and tackle significant issues like improvements in profitability,
efficiency and technology, while achieving economies of scale through consolidation and
exploring available cost-effective solutions. These are some of the issues that need to be
addressed if banks are to succeed, not just survive, in the changing milieu

People have many desires and wants and they can not complete all of them with their own
resources, to get these desires and wants they have to take the credit and the credit will be given
back by the people in installments or after some interval of time. This research is the study of the
credit facilities given by the bank for their customers.

CREDIT FACILITIES:

A loan or collection of loans taken by an individuals or corporations. These loans can be many
different types, depending upon the needs of the company, and can vary from letters of credit to
term loans, and can be committed or uncommitted.

A standing credit facility which can be drawn upon by certain designated account holders .The
facility can be used automatically at the initiative of the account holder. The loans typically take
the form of either advances or overdrafts on an account holder's current account which may be
secured by a pledge of securities or by repurchase agreements.

Credit is amount of money borrowed from the bank which have to return to banks either in the
form of installment with interest or with in the time limit allotted by bank for which bank takes
the charges. Banks give many kinds of credit facilities to their customer to get their desires and
the credit is given back by the customer to bank according to the time allotted by banks.

Different kinds of credits given by Bank of Baroda is:

• Loan

o personal loan

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 o car loan

o Home Loan

o education loan

 Baroda Vidya (These loans are provided for studies between Nursery and
12th standard.

 Baroda Gyan (It is a loan scheme specially meant for the students
pursuing undergraduate, postgraduate, professional and other type of
courses in India

o loan for the business

o Loan for agriculture development etc.

• Credit card facility

• Overdraft facility etc.

If a person want to buy a car but he has not the sufficient amount of money to purchase the car
here bank provide the car loan facility to the customer where he can take the loan from the bank
and purchase the car and return the money to the banks in the installment with interest.

Customer can not purchase many things which are costly if these credit facilities are not given by
the banks. Customer can do the shopping with the credit card and if the amount is less in his
account customer can withdraw more money through his credit card and the more money which
is withdrawal by the customer he has to return the money with in the time limit given by the
bank.

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 OBJECTIVES OF THE STUDY
SPECIFIC:

• To understand the correlation between buyers purchasing habits and the credit facility
given the banks.

GENERAL:

• To study the various credit facilities given by the banks.

• To study the consumer purchasing habits.
• Study the customer perception towards the credit facility given by the banks.

DISCRIPTION OF THE PROBLEM

People want to achieve so many things in their life but people can not achieve all the things with
their own resources. Banks provide the loan facility to the customer to purchase the things. Like
Car loan, Home Loan, Education Loan, Loan for business, Loan for agriculture etc.

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Sometime people need more money and if the amount of money is less in his account banks
provide the Overdraft facility to the customer and the amount of money has to be refund with in
the time period set by the banks.

Carrying large amount of money is risky nowadays so people want to carry less amount of
money along with them so they want such kind of facility which reduces their risk. Bank
provides the facility of credit Card to their customer which can be used in shopping, online
shopping.

Due to the various kinds of credit facility people’s can purchase the things which they want.
People are enjoying various kinds of credit facility according to their needs.

JUSTIFICATION FOR THE PORPOSE STUDY

Nowadays there is change in the purchasing habit of the customer. They are purchasing now
more. People are purchasing car, making their own home, studying their children in the good
colleges and this is the possible due to the various credits given by the banks. People are using
credit cards and overdraft facility which is increasing the consumer purchasing facility.

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In this research I will find out the correlation between the credit facility given by the banks to his
customer and the consumer buying habits. Nowadays the purchasing habit of the customer has
been increased due to the credit facility. They are doing the shopping by the credit card if they
like anything in the shopping mall and thee use their credit card and purchase it. They are taking
various kinds of loans from the banks like car loan, home loan, education loan etc.

In this research I will find out that is there increase in the consumer purchasing habit due to the
credit facility given by the bank. What is the perception of the customer towards the credit
facility given by the banks?

DATABASE
Database contains the information of data how the data will be collected. In this research first
data will be collected from the records of bank and those customers will be selected who have
taken the credit facility from the bank. After receiving the data through random selection
customers will be chosen. To get the information from the customer a well defined questionnaire
will be prepare and distributed to the customers selected by the random selection. On the basis of
all the information collected through above techniques, the data will be critically analyzed
through various quantities methods such as CORRELATION.

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 SAMPLING

The population under study comprise of the entire customer’s who have taken the credit facility
from the bank. So sampling would be done from this set of population but sample will constitute
only the customer’s residing in Dehradun.

• Sampling technique to be followed: Random Sampling.

• Sample Size: 60

Proceeding further after determines the Methodology and limitation of the study the next step is
to analyze the Data being collected for the study. Data is being collected from various sources
like:-

 Questionnaire
 Personal visit
 Telephonic Information etc.

METHODOLOGY
This research is based on the customer’s opinion regarding various credit facilities given by the
bank. So a clear customer’s opinion would be required to know the actual benefit of the credit
facilities. Hence research will be done on the basis of the data collected through both primary as
well as secondary sources which would help us do an unbiased study.

• Sources of primary data: Primary data regarding customer’s opinion for credit facilities
through questionnaires will be collected.

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 • Sources of secondary data: Secondary data will be collected through internet and
articles from the magazine related to the study and few articles related to the topic will be
read from the books and their review will be shown.

On the basis of all the information collected through above techniques, the data will be critically
analyzed through various quantitative methods such as CORRELATION.

HYPOTHESIS

Null Hypothesis (H0): There is no significant difference in the consumer buying habit by the
credit facilities given by the banks.

Alternate Hypothesis (H1): There is a significant difference in the consumer buying habit by the
credit facilities given by the banks.

PROJECT SCHEDULE

DATE ACTIVITY

July 16, 2009 Commencement of Management Thesis

July 17 - July 18, 2009 Orientation of Management Thesis

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July 28, 2009 Workshop I - Title Finalization and Presentation of
Research Outline

August 03, 2009 Approval of Title and Synopsis Evaluation

August 10 – September 07, 2009 Workshop II - Literature Review and Research

Design

September 09 – 18, 2009 (Wednesday to Friday) Interim Evaluation

September 29 – October 23, 2009 Workshop III - Data Analysis and Findings of Study

November 03 – 12, 2009 (Tuesday to Thursday) Final Evaluation

November 13, 2009 End of management Thesis

REFERENCES

www.bankofbaroda.com

www.pnbindia.com

www.sbi.com

www.centralbank.com
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www.economywatch.com

www.rbi.org.in

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