PRESENTATION ONPROJECT FINANCING

FROM J&K BANK

PRESENTED BY SYED

PROJECT FINANCING Project finance is the financing of long-term infrastructure and industrial projects

based upon a complex financial structure where project debt and equity are used to finance the project.

Project financing scheme involves a number of equity investors, known as sponsors, as well as a syndicate of banks which provide loans to the operation. The loans are most commonly non-recourse loans, which are secured by the project itself and paid entirely from its cash flow, rather than from the general assets or creditworthiness of the project sponsors. The financing is typically secured by all of the project assets, including the revenue-producing contracts.

Project lenders are given a lien on all of these assets, and are able to assume control of a project if the project company has difficulties complying with the loan terms. Generally, a special purpose entity is created for each project, thereby shielding other assets owned by a project sponsor from the detrimental effects of a project failure. As a special purpose entity, the project company has no assets other than the project. Capital contribution commitments by the owners of the project company are sometimes necessary to ensure that the project is financially sound.

Project finance is often more complicated than alternative financing methods. It is most commonly used in the mining, transportation, telecommunication and public utility industries.

ABOUT THE BANK HISTORY OF J&K BANK

The Jammu & Kashmir Bank was founded on October 1 1938 under letters patent issued by the Maharaja of Kashmir, Hari Singh. The Maharaja invited eminent Kashmiri investors to become founding directors and shareholders of the bank, the most notable of which were Abdul Aziz Mantoo, Pesten Gee and the Bhaghat Family, all of whom acquired major shareholdings.

The Bank commenced business on July 4, 1939 and was considered the first of its nature and composition as a State owned bank in the country. The Bank was established as a semi-State Bank with participation in capital by State and the public under the control of State Government.

The bank had to face serious problems at the time of independence when out of its total of Ten branches two branches of Muzaffarabad, Rawalakot and Mirpur fell to the other side of the line of control (now Azad Kashmir) along with cash and other assets. Following the extension of Central laws to the state of Jammu & Kashmir, the bank was defined as a government company as per the provisions of Indian companies act 1956

PRODUCT OR SERVICE OFFERJ&K BANK PERSONAL LOANJ &K BANK HOUSING LOANJ&K BANK CAR LOANJ &K BANK EDUCATION LOANJ &K BANK INDUSTRIAL LOANAND ALL OTHER LOANS

Mission of J&K Bank:“To catalyze economic transformation and

capitalize on growth.”The bank aspires to make Jammu & Kashmir the

most prosperous state in the country, by helping create a new financial architecture for the J&K economy, at the center of which will be the J&K.

Vision of J&K Bank:To provide the people of J&K international

quality financial service and solutions and to be a super-specialist bank in the rest of the country.

PERFORMANCE OF THE BANKThe Bank’s aggregate business crossed yet another

psychological mark and stood at Rs. 70,869.57 Crores at the end of the financial year 2010-11. The Bank’s total business increased by Rs. 10,575.18 Crores from the previous year’s figure of Rs 60,294.39 Crores, registering a growth of 17.54%. The core segments of Bank’s business viz. Deposits, Advances, Foreign Exchange and Treasury Operations recorded an impressive growth. The Bank registered highest ever Net Profit of Rs. 615.20 Crores for the financial year 2010-11 compared to Rs. 512.38 Crores for the financial year 2009-10, registering 20.07% surge. The Return on Average Net Worth, Earnings per Share and Book Value per Share for the financial year 2010-11 stood at 18.96%, Rs. 126.9/- and Rs. 717.58/- , against 18.19%, ` 105.69 and ` 621/- respectively for the previous year.

SCOPE OF THE PROJECTCompany has given various guidelines, advice

and projection for obtaining the finance from the banks and other financial services. And developing of the company keeping in the view economic of the country. I have under taken the study of fast developing company with reference to its financial position. It is necessary to under taken the impact of “ANY OTHER COMPANY” & various services provide to their clients.

OBJECTIVES OF THE PROJECTTo analyse the market strategies adopted by

the bank. To know & understanding the banking

monetary system and how the bank sanction the loan.

To find out the right projection of the company.

RESEARCH METHODLOGYThe most of important part and main strength of project comes fromthe process of collecting; classification and analyzing work will dependupon the methodology. It is in a way proposed plan of the study.SOURCE OF DATA COLLECTION: Data Collection is key part of

projectwork. There are two types of data collection, first is primary source

andsecond is secondary of data collection.PRIMARY DATA: The primary data includes company profile,

financialstatements, and case study has been obtained from Sharma paperlimited company’s financial services.SECONDARY DATA: The primary data includes company profile,financial statements, and case study has been obtained from Sharmapaper limited company’s financial services.SAMPLE SIZE: 40 and different question have different sample size.

DATA ANALYSIS AND INTERPREATIONNAME OF THE BANKS AND NO.OF BRANCHES OPERATING IN

DISTRICT SRINAGAR.

J & K BANK : 29 SBI BANK : 5PNB BANK: 4COOPERATIVE BANK : 4CANARA BANK: 3HDFC BANK: 5

58%

10%

8%

8%

6%

10%

J & K BANKSBI BANKPNB BANKCOOPERATIVE BANKCANARA BANKHDFC BANK

Q.1 How many loans you have given during the current financial year

J & K BNKSBI BANK

PNB BANKCANARA BANK

COOPERATIVE BANK HDFC BANK

1640

220 215140

130 200

Bank jk bank Sbi bank Pnb bank

Canara bank Cooperative bank

Hdfc bank

NO. of cases

1640 220 215 140 130 200

The above graph shows that JK Bank is the only bank in the district which has provided more than half of the total loans in the district. SBI is the second one and PNB is the third one in providing the loans in the district Srinagar.

BANK JK BANK SBI BANK PNB BANK COOPRTVE BANK

CANARA BANK

HDFC BANK

TOTAL

YES 11 3 3 3 2 3 25

NO 8 2 1 1 1 2 15

Q.2 DO YOUR CUSTOMER REGULARLY PAY THE LOAN INSTALLMENT OR NOT? SAMPLE SIZE= 40

YES NO0

5

10

15

20

25

30REGULAR PAYMENT OF BANK INSTALLEMENTS

Column1

From the above graph it is clear that about 25 of the total respondents said that the customers

regularly repay their loan installments without any lapse in their installment terms, while as

15 of the respondents said that customers do not pay their installments regularly.

Q.3 HOW MANY NUMBERS OF DEFAULTERS CASES YOUR BANKS HAS FACES DURING THE CURRENT FINANCIAL YEARS?

BANK JK BANK SBI PNB COOPRTVE

CANARA HDFC TOTAL

NO.OF CASES

1640 220 215 140 130 200 2545

DEFAULT CASE

40 10 12 10 11 9 92

JK BANKSBI

PNBCOOPERATIVE

CANARAHDFC

05

10152025303540

40

10 1210

119

Series 1

INTERPREATION The above graph shows that J & K Bank is

leading in case of default cases with total no. of default cases equal to 40 during the current financial year, then the second leading one among default cases is PNB Bank with total no. equal to 12, the third being the SBI &COOPERATIVE with total no. of default cases equal to 10, then CANARA Bank equal to 11 . HDFC is the bank with total no. of default cases equal to 9

Q.4 HOW MUCH TIMES DOES YOUR BANK GIVES TO DEFAULT CUSTOMERS TO TAKE OVER THEIR MORTGAGE?

BANK J&K BANK SBI PNB

COOPERTVE CANARA HDFC TOTAL

TIME (YRS) 4 2 2 3 1 3 15

27%

13%13%20%

7%

20%

Column1

J&K BANK SBIPNBCOOPERATIVECANARAHDFC

The above graph shows that all the banks give 2-4 years for their default customers to take their mortgage. The Canara bank gives only one year for their default customers to take their mortgage.

Q.6 WHEATHER YOUR BANK CHARGE INCREASED OR DECREASED RATE OF INTEREST TO THE DEFAULTER? SAMPLE SIZE=7

Out of the seven respondents five of them said that they decrease the interest rate to their default customers while as two of the respondents said that they increase the interest rate. The decreasing rate are mainly charged by the Kamraz Rural Bank

INCREASED RATES

29%

DECREASED RATES

71%

BANK CHARGES INCREASING RATES OR DECREASED RATES

-CREDIT SURVEY OF J&K BANK The J & K Bank is the only bank in the Srinagar town

which has more than fifty percent of the credit share in the town. The bank has about 77.7 % of the total credit in the market. Every shop of the town is banked with the J&K Bank whether it is the local manufacturing unit or the distributing unit or whether it is the local vegetable grower or the local fruit grower .The J&K Bank has almost covered the entire Srinagar district with a small portion

Remaining aside. The different sections in which J&K Bank has provided

loans include term loans, housing loans, trade loans, industry loans, tourism loans, agriculture loans, transport loans, educational loans and other loans. The total credit of the bank in the Srinagar town is about 70,869.57 crores which are distributed in the different economic sectors of the town. The weight age of the different credits in different sectors is given in the graph below.

TERM LOANS; 24%

HOUSING LOANS; 9%

TRADE LOANS; 1%

SSI LOANS; 1%

AGR.LOANS; 0%

TPT LOANS; 36%

EDUCATION LOANS; 1%

TOURISM LOANS; 8%

OTHER LOANS; 20%

FINDINGSDuring the survey of the town the main findings are

as under-The J&K bank is the only bank in the state having

about more than one third of the total credit share in the town. In other words we can say J&K bank is having monopoly in the town

Education has not been properly served by any bank of the district

Some people are in confusion over the interest rates of the credit provided to them by the different bank

SUGGESTIONSEducation should be given prompt attention and

new schemes should be developed for this purposePeople should be informed about the new schemes

of the JK bank so that maximum profit can be generated by using these schemes by a customer.

LIMITATIONSData collection was strictly confined to

secondary source thus is subject to slight variation than what the study includes in reality

There were various technical terms used in the project, which were difficult to understand

BIBLIOGRAPHYNAME OF THE BOOKS REFERFINANCIAL MANAGEMENT , AUTHOR I.M

PANDAY, VIKAS PUBLISHING HOUSUNG LTDFINANCIAL MANAGEMENT, AOTHOR

M.Y.KHAN AND P.K. JAIN, PUBLISHING TATA MCGRAW HILL CO .LTD.

Source of information:http://www.mcmullan.net/eclj/BOT.htmlwww.worldbank.orgWWW.GOOGLE .COM

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