FLOW OF CREDIT
TO
THE RETAIL SECTOR
(
A NEW APPROCH OF SBI,A STUDY OF UNITS OF, BERHAMPUR)A
Summer Internship Project Report Submitted in partial fulfillment of the
MASTER OF FINANCIAL CONTROL Under, BrehampurUniversity, 2010-11
Submitted
By
Eloean Pattanaik
ROLL NO.: MF0410
Regd NO.187/2009
Under the guidance of
Prof. K.C Raut
Mr B. Maharana
.
DECLARATION
I do hereby declare that this projects entitled ‘’ flow of credit to the retail
sector ‘’ is the result of my training at ‘’SBI RASMECCC IN BERHAMPUR ‘which
has been carefully prepared and submitted by me as a partial fulfillment of
MASTER OF FINANCE AND CONTROL under the guidance of Mr.B.Maharana
(A.G.M,SBI Berhampur unit)and Prof.K.C.Raut (Berhampur University)
All the data and analytic statement being stated in the project that is
submitted by may be accepted as fully authentic genuine.
Eloean pattanaik
MFC, Berhampur University
ACKNOWLEDGENT
I am grateful to all who helped me on preparation of this project report. In particular I
express my sincere and gratitude to A.G.M. SBI,Berhampur Unit for his constant pursuance and
encouragement.
I express my deep sense of gratitude to my project guide Mr.R.K .Rout,Manager (Retail
Loans)SBI Berhampur,who permitted me to undertake the project work at SBI,Berhampur.His
scholar guidance and illuminating suggestions inspire me in shaping my project report to this
existing form.
I also express my heartful appreciation to my professors, Mr.K.C. Raut (Comm.Deptt.)
MFC Berhampur University progamme of their timely suggestion for completion of this report.
I am very much thankful to Mr.B.R.Roy( H.OD, Comm Deptt.)for his kind permission to
persure my project under the well working environment of SBI.
I am also highly obligated to Mr.B.Maharana(A.G.M),Mr.R.K Rout(Manager,Retail
Loans),Mr D.Mohanty(Manager,SME)for their suggestions and promot guidance to carryout and
complete this study.
CERTIFICATE BY THE GUIDE
This is to certify that this project report on “
FLOW OF CREDIT TO THE RETAIL SECTOR”submitted by Miss Eloean Pattanaik, a student of M.F.C 3
rdsemester in the
Post Graduate Department Of Commerce, Berhampur University in partial fulfillment of
the award of M.F.C was done under my guidance
Signature Of The Guide
CONTENT
CHAPTER-1
INTRODUCITON
SCOPE AND OBJECTIVE OF THE STUDY
METHODOLOGY
LIMITATION OF STUDY
CHAPTER-2
INTRODUCTION
MARKET SEGMENTATION OF SBI LOANS
CLASSIFICATION OF RETAIL LOANS OF SBI
FORMATION OF RASMECCC, SARC
(BERHAMPUR AND ITS STRUCTURE)
MARKETING OF LOANS BY BRANCHESA
PROCESS CHART
LOAN PRODUCT OF SBI
CHAPTER-3
ACHIVEMENT
BUSINESS PERFORMANCE
TAT POSITION
PERFORMANCE SUMMARY
BRANCH SOURCEING
INTERPRETATION
CHAPTER-4
SUMMARY OF FINDINGS & CONCLUSION
REASON OF HIGH RETURNS
CHAPTER-1
INTRODUCTION
India is the largest country in south Asia with a huge financial system characterized by many
and varied financial institution and instrument. The India financial sector was well –developed
even prior to the political independence of the country in 1947.The vastness of the Indian
banking system could be gauged.
At the top of banking system is the RBI, which is responsible for the prudential supervision of
the banks and the non- banks financial institution and for performing the other central banking
function. Indian‟s largest banks –the bank of India and its seven associate banks were brought
under social control in the mid-to late fifties.
Thereafter with two successive nationalization of banks, another 19 banks (14 banks in 1969 and
six in 1980s)where brought into the public sector. The PSBs occupy a predominant position in
the Indian financial system. The important banking indicators of the commercial banks in India.
It is very essential to known the major function and working of the banks.SBI is the oldest. The
largest and highest profit making bank in India. So, its very important to known the performance
of the banks. As, the bank deals with many function. But the most important function is credit
facilities provided by the bank. To known the loan sanction rejection of proposal of the bank
received. Performance of the bank and the rate of demand of the loan. Find out what is the reason
for rejection of proposal and return of proposal. This project also contains the structure of the
bank, the flow of proposal. Layout the problems and drawbacks of faced by public and staff.
The retail banking strategies of bank are undergoing major transformation; a bank adopts a mix
of strategies likes organic growth, acquisition and alliances. This has resulted in a paradigm shift
in the marketing strategies of the banks. Public sector banks player are adopting aggressive
strategies, leveraging their rural branch networking and their customer base to earn a larger share
of retail pie. Banks are also going in for innovative strategies like cross selling, packaged selling
of retail products and technology based banking.
SCOPE AND OBJECTIVE OF THE STUDY
To find the sanction growth in between two year.
To know the essential segment of loan required by the public.
Make comparison between the different units of the SBI within the region.
To find out the reason for the rejection and return of proposal.
To evaluate the efficiency of the bank.
To examine the having performing quantitative TAT position (total arounding time).
METHODOLOGY
Required data collected from the workflow register, monthly performance tracking and
business performance relating to the retail sector of RASMECCC, SARC in the combination of
RACPC, SMECCC of Berhampur. RACPC performance sheet, TAT position sheet.
The data collection for the research is secondary data which are collected from the register of
bank. The data is collected for two years from 2009-2010.And the data of various units of the
RASMECCC, SARC, Berhampur.
LIMITATION OF STUDY
Data is collected from the regional bank of SBI , Berhampur
The problem of each unit is ignored.
The data is not collected from individual units.
Limited area of survey.
Data is collected is of secondary data.
Difficult in comparison between different units and sourcing, sanction of proposal made.
The information which is collected is of particular region of Berhampur, other parts of
CHAPTER-2
INTRODUCTION
SBI is the oldest, the largest and the highest profit making bank in India. Its evolution is not intimately interwoven with the economic development of modern Indian but also with our nation building process to an extent perhaps unparalleled in the world. Moving like a colossus on the Indian financial turf, it has become a symbol of national pride and economic development.
It is interesting to remember that SBI bank traces its lineage to Bank of Calcutta established in 1806 (The first joint sector Bank of British India sponsored by government). Its genesis was based on the classical political economy of Adam smith as a branch of statecraft besides addressing the demands of imperial finance and European Commerce. The Bank which combined deposit banking with the right of currency issue was a unique institution Bank of Bengal (1809), the successor to bank of Calcutta, and the two other presidency banks-Bank of Bombay (1840) and Bank of Madras (1843) were merged in 1921 to form the imperial Bank of India. SBI succeeded the imperial bank in 1955 with clear cut objectives of reaching out to every nook and corner of the country and catalyzing rural and social economic development while re-activating its commercial banking character.
This gigantic quantization is moving with times splendidly adapting to environment metamorphosis and societal expectations, growing healthier and stronger as a trendsetter. Facing competition head on, exploiting opportunities optimally, daring to go to new and exciting area opened up by liberalization; it is in a state of constant flux and renewal.SBI provides commercial loans, personal loans to various segment society for economic growth & societal development where its mission and vision matches to the expectation of national govt. and demand of society. The retail loan which comprise P.segment loan is the main sources of interest earner for the bank. It not only enhance the profitability of the bank but also spread the risk factor of the bank through the wider segment of the customer reaching out to small customer spread all across the country through its vast and varied network, SBI trying its best for social and economic upliftment of poor down trader . Its earns goodwill of society as well as business to the bank. The banks present paunch word-banker to the enemy Indian can be fructified only through the retail loans.
In area of product innovation, customization information technology, reorganization to name a few it is trying to usher in would class standard to book signification global business.
As SBI provide various products, but use focus on retail loans. Basically retail loan mean the following 5 five loans.
House Loans: Owing a home is every person dreams, but the ever escalating property price and
sky rocketing interest rate act us a great hindrance to all. Even if one decides to buy a home through home loan finance, the very prospect of meeting several home loan providers to check out their current home loan rate before reaching a final decision, scares the units out off the buyer mind. In this regard SBI provides transparent, trauble free home loans to all eligible home services.
Education Loan: Education loans to all aspiring and deserving students. Now, one can opt free
any education. The application is processed within a short span of time. The financial assistance is dependent on a few factors like the course opted you, reputation of the institution, family asset, past career / educational record of the student etc. Education loan is definitely one kind of financial assistance tat cum shape up child’s future.
Personal Loan: Due to the uncertaintyofmovement of economy and no reliance on the wiled of future, many a time we are confronted with situations where we require a substantial amount of money. We cannot ignore them, neither do we want to but some times we just lack the adequate monetary resource required to handle a situation properly during the courses of our lite. This is where personal loans come in.
A personal loan is basically meant to cater to an individuals need during any requirement, urgent or otherwise. Be it the purchase of a television or refrigerator, paying off your credit card dues wedding of your children etc. you can use it for anything you want. The major advantage of taking a personal loan is the fact of all purpose utility for ones personal use. To add to its benefits, there is no need for any clarification to the lending party regarding as to how one would use would this borrowed money (unlike specific loan like car loans and education loans). Advantage is that the processing is also faster when compared to other loans. What’s more you don’t ever need any security collateral or guaranty for the same. While personal loans are the seemingly perfect solution to ones needs, proper care must always be to compare all options before taking the final leap. The most important factor, as always is the rate of interest being charged which is higher as compared to other loans provided by SBI like education loans, home loans etc.
Car Loan: Owing a car is every one’s dream. Whether its your first car for self , or the second
one for the family , be it a compact car you want to buy or a luxury one on eve of its a SUV SBI all feel the need of a car finance, at some or the other time. This holds good for the business segment too. SBI assist you in evaluating the best car loan interest rates, in the shortest possible time, through our car loans calculator and comparator. SBI assure you the best car loan deal with the lowest EMI and processing fees, through our tie-ups with the car loan providers, dealing in customised car loans.
Other Mortgages Loan: As the name suggested mortgage means security against the loan. The
security means mortgage of property of the borrower or of third party if he/she agrees to guarantee the loan. The margin must be 25% of the market values of property. It is provided on term loan.
MARKET SEGMENTATION OF SBI LOANS
In order to keep its number one position SBI has planned to grow organically by diversiting into different segments like.
Corporate Banking Group
a) MCG – Mid Corporate Group. b) CAG – Corporate Account Group. c) Leasing.
d) Project Finance.
National Banking Group (NBG)
a) Small & Medium enterprise. b) Personal Banking / Retail Banking. c) Cross Selling.
d) Government Business.
INTERNATIONAL BANKING GROUP ASSOCIATE & SUBSIDIARIES GROUP TREASURER AND MARKETING GROUP RURAL AND AGRI – BUSINESS GROUP
CLASSIFICATION OF RETAIL LOANS OF SBI
i) SBI Loan to Pension.
ii) SBI Personal Loan to Affluent Pensioner. iii) Personal Loan
iv) SBI Saral
1. Personal Loan – Xpress Credit Housing Loans.
i) Normal Housing Loan ii) NRI Housing Loan iii) Gram Nivas Loan iv) Sahayog Nivas Loan
And many other sub product introduced by SBI to cater the needs of various economy group of society.
Now latest promotion housing loan introduced by SBI which are going to be closed by 30.06.2010.
SBI easy home loans-up to 50 lakhs(rate of interest 8% -1st yr ,fixed),(9% -2nd&3rd yr, fixed)
SBI Advantage home loan-less than 50 lakhs(-do-)
2. Education Loans.
i) SBI student loan
ii) SBI scholar education loan
3. Auto Loans.
i) Car Loan
iii) NRI Car Loan iv) Two Wheeler Loan
Now, presently 2 promotional car loan schemes has been introduced by SBI
SBI advantage car loan (Loan Amt More than or equal to 5 lakhs)
SBI Ezee Car Loan (Less than 5 lakhs Amt) a) 0.25% below SBAR for 7 yr. repayment b) 0.50% below SBAR for 5 yr. repayment
D. Personal Loans
Personal loan against
v) Mortgage of Immovable Property. vi)
vii) Festival Loan viii) SBI Easy Travel Loan ix) Aptech Courses x) SBI Education Plus xi) SBI Home Cash xii) Mahila Shakti Schemes
xiii) SBI Career Loan –now it is being withdrawn due to lack of demand. xiv) SBI Reverse Mortgage
FORMATION OF RASMECCC, SARC OF BERHAMPUR AND ITS STRUCTURE
SBI always put importance to productivity and profitability. In order to achieve that goal it has constantly being changed/ reorganized. Its loans delivery system, product ligaments and product diversion in the latest position to garner the largest share of business in metro and urban area. It has developed a centralized system has existence centralize system of loan sourcing, processing,sanction,documentation,disbursement,follow-up,recoveryof sticky loans to ensure uniform application of system and procedure, reduction in loan processing time, enhancement of loan recovery with low NPA asset, enhanced profitability with good looking balance sheet The end result is customer to bank. In respect it has established RACPC (Retail Asset Central Processing Centre), SMECC (Small and Medium Enterprises City Center) to cater the needs of business segments and SARC (Stressed Asset Resolution Centre) which to under took activities of loans recovery of stressed assets. In small and medium cities it has established RASMECCC – Retail Asset Small and Medium Enterprises Credit City Centre. This is combination of RACPC, SMECCC and SARC under one umbrella.
RASMECCC, SARC is the combination of RACPC, SMECCC, SARC.
At, Berhampur SBI has established RASMECCC, SARC which is headed by an AGM (Asst.. General Manager). There are 17 branches and one MPST (Multi Product Sales Team) link to the unit, all the retail loan as well as SME loan of Berhampur centre are being processed, sanctioned disbursed & maintained by RSMECCC, SARC.
MARKETING OF LOANS BY BRANCHES AND MARKETING TEAM.
In the Berhampur centre the loan proposal are being marketed / sourced by various unit like branches, MPST, CRE, MRO, RMPB.
MRO = Marketing Recovery Officers. CRE = Customer Relation Executives. CRA = Customer Relation Assistance. MPST = Multi Product Sales Team.
Branches source the proposal from, a customer for different products like housing, car loan, education loan etc and enter the application into Dream Home format and work flow software from which they get identification (ID) for the loan application and IPL (in principled Sanction Letter) whose one copy is given to the customer.
Later, loan application with ID one copy of IPL sent to RASMECCC, SARC for processing of the proposal. At RASMECCC there is control officer (CO) who on the receipt of physical application verifies with work flow. ID and after that enter in the workflow it and registered. The application gets automatically
distributed among the processing officer by the software. Then the CO Handover the allotted loan application to the designated processing officers.
BRANCHES:
They are prime source of mobilization of loan application / business. Since they are at the local point level to interact with customer, they assume important role in sourcing loan applications. With the introduction hi-tech product like mobile banking, internet banking, ATM/ Debit card and Credit card, the visit of customer to branch reduced drastically. Still it is the main sources of interaction with the customer for popularizing and marketing the product.
Branches took all the efforts to meet nearly all the requirement of the customer like deposit, advances, insurances etc. under single window system to improve customer satisfaction
MPST – It is headed by an officer called as team leader who is assisted by marketing personal. They act
as a separate entity with specific target for sourcing. They work like a branch for sourcing of loan proposals. They covered the entire city and sources proposal of customers and non-customers of all branches.
CRA - They are posted at rural branches for mobilization of deposits and sourcing of business. They
source retail loan proposal and agri-business proposal. They send the proposal to RASMECCC through their branch head.
CRE- They are executives on contractual basis. Their main work is to popularizing the hi-tech products,
cross selling products (SBI Life Products, Mutual Fund Products etc). They market the high-tech product along with the sourcing of loan proposal.
MRO- They are also posted at branch having agriculture business. They mainly concerned for marketing
as well as recovery of loan products.
RMPB – He is posted to take care of the needs of the HNI as well as the need of all the customer of the
branch at large. In Berhampur one RMPB is posted at Berhampur branch. He interacts with the customer and understand their needs and expectation and advices them suitable product to meet their
requirement. He obtains the loan proposal from the customers and sends it to the RASMECCC, SARC, Berhampur.
o .
FLOW OF LOANS PROPOSAL AT RASMECCC (PROCESS CHART)
(C.O)
Receives the proposals. Allots the Proposal to the processing officer (P.O)
(P.O. (Processing Officer) Here, P.O. may ask for
- Additional document if required - Scrutinized the proposal
- Undertook pre-santion Customer
Approaches
BRANCH / MPST / SOURCING UNIT
Loan Proposal Sources RASMECCC
- Processing of Loan Proposal
(By the P.O.)
By santioning officer
(Document Officer)
Formalities for sign of documents Embossing (Stamp Cancellation) EM Creation (Equitable Mortgage)
- For checking C/F - Maintenance
- Authorization of loans PROPOSAL PROCESSED
RECOMMENDED FOR SANCTION / RETURN/REJECTION
SANCTIONED THE PROPOSAL
D.O.
MANAGER Maintenance
Which is done by Account officer (A.O)
For the maintenance
-Whether Account opened properly under proper scheme code
- Name of applicant
Amt., interest rate, repayment period and finally he does data purification in case of need.
He maintains accounts-sees the normal
Repayment it
It no repayment is coming then sending of letter, phone
Call, personal meeting. If no repayment is Coming for more them 3 months then
Transferred the said loan document along with all reports to SARC under permission from AGM.
o Regd. letter to customer, personal visit. o Lawyer notice
o Still no payment is coming than legal action is taken. Filing of suit at district court, DRT, enter into compromise(in case of need o Write off the sticky loans
A.M.O.
o Under took recovery process in case of written off account.
GET A LOAN PRODUCT OF SBI
Furthermore, the lender also evaluates the residential proof, the tenure of one’s work experience and most importantly, the repayment capacity based on one’s income, savings and debt obligations so as to ensure the borrower’s credibility to pay off the loan.
KYC (KNOW YOUR CUSTOMER)
1. Proof of identity (any one)
o Passport o Driving License o Voter’s ID o PAN Card 2. Proof of Age 3. Proof of residence o Electricity bill o Telephone Bill
4. Proof of Income (Salaried)
o Proof of Continuity in Current Profession
o Bank Statement from Operating Account for 6 month
o Income Tax Returns for 2 years with Computation of Income / Certified Financials o Form 16
5. Proof of Income (Business Man)
o IT Return of 3 years with computation sheet ,balance sheet o Nature of business
o Types of business o Place of Business
o Account where the turnover is reflected This document are common for all types of loans.
GET A LOAN PRODUCTS OF SBI Documents:
a) Home Loan:
- RSD-Regd. Sale deed
- ROR-Record of right (Patta or Khatian) - Revenue Receipt
- Holding Tax (For existing house) - Plan approval by competent authority - Estimate of plan
- Link document if required
- Title investigation report to be prepared by bank
b) Education Loans:
Co-Applicant with the student Co-Applicant may be father Mother, in case parent deceased Grand Father / Grand Mother -10th to last qualifying examination
Mark Sheet
Certificate Photocopies -Domicile Proof
- Selection procedure (XAT/GAT/CAT/MAT) with Rank Card. -Admission letter / Intimation letter
c) Car Loans:
For New Cars -Quotations
-Provision of Margin
For used car
-Agreement to sale -RC Book, Insurance Copy
-Car should not be a second hand, car nor should insurance claim be there. -Valuation by approved garage owner
d) Personal Loans: For account holder whose salary is being credited at SBI.
- Latest Salary Slip Signed by DDO (Drawing Disbursing Officer) - Check off facility provided by DDO
(If no check off, PDC to be provided for the entire tenure of the loan)
e) Other Mortgages Loan:
Like HL all documents to be provided.
a) Valuation – Done by Bank but cost borne by the customer.
Home Cash:
-Valuation, if the value/loan amount is equal to or less than 2 lakhs,no valuation required. If loan amount is more 2 lakhs valuation needed for processing the proposal
- Latest list receipt / Revenue Receipt - Latest Non-Encumbrance Certificate
Home Loans:
Purpose
a) Purchase of plot
b) Purchase & construction of new house of the flat.
c) Purchase of existing cold house / flat / extension of existing house d) Repair / Renovation of existing house / flat
e) Furnishing / consumer durable as part project cost. Maximum percentage of the project cost amount Rs. 3, 00, 000.00.(3 lakhs) or 10% of the project cost whichever is less proof of source of fund before completion of 12 months.
f) Re-investment of investment made from own resources giving the proceeding 12 months for purchase / construction / repair / extension of house.
Loans for more than one house can be granted to one individual provided he/she fulfill the income criteria.
Take over of house loan from other banks/ financial institution is also considered.
Eligibility;
a) Minimum age more than 18 years maximum age 70 years.
(The loan will be repaid fully on or before 70 years of age of customer.
b) Loan can be avail by individual along with wife, son unmarried daughter as co-borrower. c) Land should be in his own name.
STUDENT LOAN
SBI EDUCATION LOAN SCHEME (SBI STUDENT LOAN SCHEME)
Introduction The education loan scheme was formulated in November 2004 on IBA guidelines
as per Govt. of India directives. The model education loan scheme was revised by IBA in November 2007 and forwarded to member banks for implementation. IBA has also advised few changes subsequently, which have been incorporated in the scheme.
Renaming the scheme
The education loan scheme was renamed as SBI student loan scheme w.e.f. January 10, 2006.
Purpose The scheme seeks to extend financial assistance to deserving / meritorious students
for pursuing higher education in India and abroad.
Eligibility Criteria Courses Eligible
a. Studies in India:
Graduation course: B. A, B. Com., B.Sc etc. Post Graduation courses: Master Degree and Ph. D. Professional Courses
Engineering Medical, Agriculture, Veterinary, Law, Dental, Management, Computer etc.
Computer Certificate course of reputed institutes accredited to Department of Electronics or Institutes affiliated to a university.
Courses like ICWA, CA, CFA etc.
Courses conducted by IIM, IIT, IISc, XLRI, NIFT etc. Courses offered in India by reputed foreign universities. Evening courses of approved institutes.
Other courses leading to Diploma / Degree etc. conducted by college / university approved by UGC / Govt. / AICTE / AIBMS / ICMR etc. Courses offered by National Institutes and other reputed private
institutions.
Regular Degree / Diploma courses like Aeronautical, Shipping etc., approved by Director General of Civil Aviation / Shipping if the course is pursued in India. In case the course is pursued abroad, the Institute should be recognized by the competent local aviation / shipping authority (Except
Pilot training course which is presently considered under SBI Career Loan Scheme).
Teacher Training Course /Nursing Course B.Ed., will be eligible for education loan provided the training institutions are approved either by the Central Government or by State Government and such courses should lead to Degree or Diploma Course and not to Certification Course. The fees to be considered for the purpose should be the fees structure as stipulated in Central / State Government Colleges.
Vocational Training and skill development study courses will not be covered under the Model Education Loan Scheme, as the scheme is framed to provide bank loans for higher studies. Such course / requests may be considered under normal credit lending programmes.
Medical course in countries of the erstwhile USSR, China, Nepal and other countries not recognised by Medical Council of India will not be covered.
The GM (Network) may approve institutions / tie-ups with educational institutions and the specific courses for which loans may be granted, for their area of operations, depending on future prospects / recognition by user institution. The LHO concerned will advise all other Circles directly regarding the name of the institution and other details of the arrangements, subject to compliance of KYC norms both by the student and the parent. A record of such arrangements should be maintained at the LHO and brief details thereof, advised on monthly basis to the Personal Banking Business Unit at this office for building up data base. Such institutions / courses should be revised periodically for renewal of the arrangement or
otherwise. While approving the courses by GM (Network), aspect relating to the reputation / standing of the course and institution in respect of which Education Loan could be provided may be examined with a view to ascertaining the employment prospects of the course and applicant‟s future income.
b. Studies abroad:
Graduation: For job oriented professional / Technical courses offered by reputed universities.
Post graduation: MCA, MBA, MS etc.
Courses conducted by CIMA (Chartered Institute of Management Accountants) – London, CPA (Certified Public Account) in USA etc.
Aicte/UGC Approved Courses:
AICTE vide Advt. No. AICTE / Admn. IV / 08 (01) / 2008 published in the News Papers that it is mandatory to obtain AICTE approval for “Technical Education”.
In terms of Ministry of Human Resource Development, Government of India, Notification No. F.2.1. / 2006 U.3(A) it is not a pre-requisite for an institution notified as „Deemed to be University to obtain the approval of AICTE to start any programme in technical or management education leading to an award, including degrees in disciplines covered under the AICTE Act, 198. However, institutions notified as „Deemed to be University are required to ensure the maintenance of the minimum standards prescribed by the AICTE for various courses that come under the jurisdiction of the said Council. It is expected that the institutions notified as „Deemed to be University maintain their standards of education higher than the minimum prescribed by AICTE.
AICTE / UGC guidelines on institutions notified as „Deemed to be University‟ are available on the official web-site (www.ugc.ac.in) & (www.aicte.ernet.in) of the UGC and the AICTE respectively. Branches / RACPCs may refer AICTE notification while considering Management / Technical Courses.
Car Loans:
1. Purpose: Terms & Overdraft will be sanctioned by the Bank for purchase of new passenger cars, Multi Utility Vehicles (MUVs) and SUVs .
2. Eligibility: Age: 21-65 years. (For Sanction of loan)
Loans can be granted by sanctioning authority to individuals who have sufficient, regular and continuous source of income for servicing the loan repayment beyond 65 years. Loan must be fully repaid before the borrower attains the age of 70 years.
Following applicants are eligible under the scheme:
i) Regular employees of State / Central Govt. Public sector undertakings, corporations, private sector companies, and reputed establishments.
ii) Professionals self-employed, businessmen, proprietary firms who are income tax assesses. iii) Loans to existing Units enjoying limits for a minimum period of 1 year and the account is
conducted satisfactorily and classified and classified as Standard asset.
iv) Loans to New Units enjoying limited with other banks and account conducted satisfactorily and classified as Standard asset subject to satisfactory opinion report and verification of statement of accounts for 12 months.
Minimum Income:
Net Annual Income of applicant and / or co-applicant if any, together should be Rs. 1,00,000/- p.a. and above. Net monthly income of applicant’s should be at least 2 times EMI. Income from other sources like bank interest / dividends of listed companies, rent agriculture income can be added.
Self-employed, professional and proprietary / partnership firms.
Net profit or gross taxable income of Rs. 1, 00,000/- p.a. as per ITR after netting off depreciation and repayment of all existing loans or turnover of Rs. 10.00 lakh p.a. Business income from other sources like bank interest / dividends of listed companies rent agriculture income can be added.
3. Authorized Branches.
All RACPCs, RASECCs, RCPCs all PBBs all super circle of excellence branches all districts headquarter branches, project area branches and branches specially authorised by the AGM (Region) will implement the scheme.
4. Loan Amount.
Now two promotional car loan scheme introduced by SBI .one is
-SBI Ezee car loan where the loan amount is less than 5 lakhs and 2nd is SBI Advantage car loan where the loan amount is more than 5 lakhs.
a) Personal Loan against Mortgage of Immovable Property.
Purpose General Purpose Loan
Eligibility Individuals Maximum age Minimum credit score Income
Employees / Professionals & Self employed and others who are IT assesses / Agriculturists and others engaged in allied activities.
Individual should not be more than 60 years of age cut off score of 60 marks as per credit scoring model devised for this scheme.
Min.NMI of Rs. 12000/- for salaried Minimum NAI of Rs. 12000/- for salaried
Minimum NAI of Rs. NAI of Rs. 1,50,000/- in case of all others.
Loan Amount Minimum Rs. 25,000/-
Max. 75% of market value of property with a ceiling of Rs. 1.00 crore subject to EMI/NMI<50%. [as per Bank‟s approved valuer‟s report not more than 3 months old.]
Security Mortgage of property of the borrower or of third party if he/she agrees ti guarantee the
loan.
Insurance Insurance is a must against risk of fire, riots earthquake, lightning, floods etc. in joint
names of borrower and Bank for full market value.
In case the borrower provides additional liquid collateral the insurance ca be waived.
Margin 25% of the market value of property.
Type of Loan Term Loan No. overdraft facility.
Repayment Period With checkoff: maximum of 120 months [or date of retirement]
Without checkoff: 60 months. Where check off is not available, PDCs should be obtained.
Processing Fee 1.10% of the loan amount [ inclusive if service tax]
Inspection Annual inspection for Standard Assest accounts.
Twice a year for NPAs.
Authorised Branches PBBs, Branch with P Division and Any other branch authorised by the Circle Management.
.
PERSONAL LOAN – X-press credit PERSONAL BANKING ADVANCES
XPRESS CREDIT SCHEME MODIFICATIONS
Our Xpress Credit Scheme was launched in the year 2004 to give loan on concessionary terms to low-risk target groups, like employees of government, semi-government, profit making PSUs and educational institutions of national repute. Subsequently the Target Group was enlarged to include employees of SB1, SB2 rated companies. The scheme was built around the concept of check-off (the process by which the salary disbursing officer undertakes to deduct loan installments from the salary of the borrower and remits the same to the Bank for credit of the loan account). Xpress Credit Loans may also be sanctioned in those cases where the borrower gives sufficient PDCs (Post Dated Cheques) for entire tenure of the loan with the approval of the GM) Network).
2. During our phone calls to branches across the country, we have been given to understand that the lack of check-off is proving a hindrance to business growth under the scheme. Further, while the scheme in its present form generates satisfactory NIM of around 2%, the interest rate needs to be fine tuned to suit the risk element involved in financing various groups of salaried employees. Also, we are of the view that the scheme needs to be revised with a view to bringing high quality personal loans to our books, while excluding the lower grade employees who have hitherto contributed a significant portion of the NPAs in this portfolio.
i) Net Monthly Income.
The minimum Net Monthly Income (NMI) required for eligibility under the scheme has been enhanced from Rs. 2500/- to Rs. 5000/-.
ii) Requirement of check-off.
a) Obtention of the following documents may be waived by the sanctioning authority in the case of employees of Central/State Government, PSUs University and reputed colleges.
Irrevocable authority from employer for making payment out of any amount payable to the employer, e.g. terminal benefits in case of his/her retirement, resignation, discontinuance of service or death.
Undertaking from the employer to obtain a NOC from the Bank before setting the dues of the borrower on transfer, resignation, retirement etc.
b) In the case of other employers, the CGM of the Circle has been permitted to waive the above documents. However, there would be no waiver of this stipulation in the case if IT sector employees.
c) Cases may also be accepted as check-off where all the following requirements would be fulfilled.
The employer pays the borrower’s salary into his Savings /Current Account with our Bank.
The borrower give an irrevocable Standing Instruction (SI) for recovery of the loan installments from his aforesaid account with the SI being synchronized with the date of credit of salary in the borrower’s Saving / Current Account, and also The employer undertakes to inform the Bank if and when there is a severance
due to borrower’s transfer, resignation, retirement etc.
iii) Interest Rate.
The interest rate for Xpress Credit Scheme which was fixed at floating SBAR (currently 10.25%) has been revised as under:
a) SBAR floating (current 10.25%) for all loans where we have availability of check-off from the employer as defined in paragraph 1 above and the employer undertakes to inform the Bank if and when there is a severance due to borrower’s transfer, resignation,
retirement etc. Check-off would include recovery by debiting the salary account of the borrower maintained at the branch based on Sls given by him.
b) 1% above SBAR floating (currently 11.25% for all loans where check-off is available, but the employer is not willing to inform the Bank if and when there is a severance due to borrower’s transfer, resignation, retirement etc. The same rate would also be applicable in cases where no check-off is available, but the borrower provides monthly PDCs for entire tenure of the loan with the approval of the GM (Network).
c) 2.5% above SBAR floating (currently 12.75% in all other cases.)
Rationale: To streamline the instructions and make it more customer friendly.
Index Under: Personal Banking Advances – Xpress Credit Scheme – Check-off facility guidelines.
Check-off facility – personal Banking Advances – Xpress Credit. Xpress Credit Modifications
PERSONAL LOAN (SARAL) 4. Eligibility.
Any personal will be eligible for SBI Saral Loan, who satisfies all the following conditions: He should have sufficient cash flows to repay the loan from salary (in the case of
employees) or regular income (in the case of other persons), as evidenced by 6 months salary slips / income tax returns of 2 years (Employees should have minimum 1 years length of service). Income in all cases should be sufficient to take care of a ratio of EMI/NMI of 50% at least.
He should provide proof of residence and proof of identity to satisfy KYC norms. He should produce 6 months satisfactory statement of bank account (at any bank). If the customer is a credit card holder he should be asked to submit last 3 months credits
card statement (pertaining to any bank).
He should score minimum 50 marks in the Credit Scoring Model.
5. Minimum Income.
For employees, the net monthly income (NMI) should be at least Rs. 5000/- after all deductions (including income tax).
For others, the net annual income (NAI) should be at least Rs. 60,000/- (i.e. income as per latest income tax return less tax payable)
Income of spouse must be considered if the loan is availed jointly or the spouse guarantees the loan.
6. Loan Amount.
Minimum : Rs. 24,000/- in metro and urban centers Rs. 10,000/- in rural / semi urban centers Maximum :
12 months NMI for salaried individuals 1 year’s NAI in case of others
Ceiling of Rs. 10 lakhs in all centers, subject to credit score of 50 or more.
7. Security.
The loan is clean in nature and security should not be taken for SBI Saral Loans. A borrower who is able to provide security, will be financed not under Saral Scheme but under the relevant scheme corresponding to the nature of the security eg. Mortgage loan against property, Share Loan against Shares, Secured Loans against security etc.
8. Type of Loan.
SBI HOME PLUS
This scheme launched in August 2007, is a personal Loan, tailor-made exclusively for existing Home Loan Customers
Eligibility All Home Loan Customers with a satisfactory repayment record of at least one year and who
maintain a CA/SB a/c with Us. Eligible loan
amount
Present market value of the house property (to be decided by a fresh valuation from an approved panel engineer/ valuer) less.
(1) Margin of 25% on the property value and (ii) the present outstanding in the HL a/c. Minimum loan amount Rs 25,000/- maximum Rs 10,00,000
(for loans upto Rs 2 lacs valuation as above not required and an assessment could be done by the sanctioning authority.)
Purpose Any purpose, VIZ. Extension/ repair of house, purchase of car/ consumer durable education/
medical expenses of family members, personal expenses etc. No need to obtain documentary evidence for the end –use of funds. A certificate from the customer in the application to the effect that the loan will not be used for speculative purpose to be obtained.
Nature of facility
Term loan/ Current Account Overdraft.
ATM – cum Debit Card to be issued in the case of CA OD.
Processing fee 0.50% of the loan amount with a minimum of Rs 500/-.
EMI/NMI ratio
Not to exceed 60% but may be relaxed upto 70% for borrowers with NMI of Rs 10 lacs and above. The EMI will include EMI of both proposed and present borrowings, including all other loans by the same borrower(s).
No. of loans 2nd loan after a gap of 2 years from the first loan. At any point of time not more than 2 loans to exist, within the overall ceiling of Rs 10l lacs other than the H L.
Security Extension of mortgage of the house property.
Repayment & Moratorium
(i) TL repayable in EMIs convenient to the borrower beginning one month after loan
disbursal subject to max. of 120EMIs.
(ii) OD facility will operate on a reducing DP arrangement on the EMI basis subject to a
maximum of 120 EMIs
With in the overall repayment period of 10 years, the sanctioning authority may permit, at the request of borrower a moratorium of upto 12 months subjects to serving of interest.
Repayment Term Loans under the schemes may be prepaid. A prepayment penalty of 1% to be charged on the
amount prepaid.
No prepayment penalty if both the Home and Term Loan are prepaid simultaneously from own resources.
Application, Appraisal, documentation
Prescribed format for application, appraisal arrangement letter. Loan agreement applicable for PL against mortgage of immoveable properties to be used. Credit Scoring Model.
Mortgage Loan:
Income – 1200 per month if salaried Rs. 1,50,000 per annum for non-salaried age should not be more than 60 years.
Minimum age 18 years.
Reverse Mortgage:
Old, childless / children not taking care of parents takes this loans by giving the their property as the mortgage for the sum amount for the monthly expenditure for certain age.
a) Age more than 60 years but less than 65 years. b) More than 6 years.
No repayment is needed advance value depend on the valuation of property for a) Category – Loan tenor is 15 years.
b) Category – Loan tenor is 10 years.
Loan Amount for:
a) Valuation x 90% x 0.33 b) Valuation x 90% x 0.21
BUSINESS PROCESS REENGINEERING.
The analysis and design of work force and processes within and between an organization. A business process is a set of logically related tasks performed to achieve a definite business outcome. Reengineering is the basic for many recent developments in management. He cross functional team, for example has become popular because of the desire to reengineer separate functional; task into complete cross functional process. Also, many recent management information systems developments aim to integrate a wide number of business functions. Enterprise resource planning, supply chain management, Knowledge Management System, Group ware and collaborative systems, Human Resource Management System and Customer relationship management systems all owe a debt to reengineering theory.
Business process reengineering is also known as business process redesigned business transformation, or business process change management.
