INTRODUCTION: ABN AMRO • is a prominent international bank with origins going back to 1824 • conducts banking, fund management, insurance and leasing business • ranks eighth in Europe and seventeenth in the world based on tier 1 capital • has over 3,000 branches in 66 countries and territories, a staff of about 105,000 full time equivalents and total assets of EUR 556 billion (as of year-end 2002) • is listed on, among other exchanges, the Euro next Amsterdam, London and New York Stock Exchanges. Their goal is to create value for the clients. They strictly follow a relationship approach, which keeps clients’ requirements clearly in focus and provides excellent service through the professionalism and 1
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INTRODUCTION:
ABN AMRO
• is a prominent international bank with origins going back to 1824
• conducts banking, fund management, insurance and leasing business
• ranks eighth in Europe and seventeenth in the world based on tier 1 capital
• has over 3,000 branches in 66 countries and territories, a staff of about 105,000
full time equivalents and total assets of EUR 556 billion (as of year-end 2002)
• is listed on, among other exchanges, the Euro next Amsterdam, London and New
York Stock Exchanges.
Their goal is to create value for the clients. They strictly follow a relationship
approach, which keeps clients’ requirements clearly in focus and provides
excellent service through the professionalism and motivation of their employees
across the globe. Adhering to the principles of Managing for Value – allocating
resources to where they earn the best long-term returns and measuring the results –
and exploiting synergies between the bank’s businesses maximizes economic value
for their shareholders. The ABN AMRO Values and Business Principles are the
framework within which they conduct all their business.
Leadership in their chosen markets is critical to their long-term success as well.
They have three principal client segments: Consumer & Commercial Clients,
Wholesale Clients and Private Clients & Asset Management. Within ABN
AMRO’s organizational structure, these are also core global Strategic Business
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Units. They strive to maximize the value of each of these businesses and the
synergies between them:
• Consumer & Commercial Clients – for individuals and small to medium-sized
enterprises requiring day-to-day banking. They serve approximately 15 million
clients, mainly through ABN AMRO’s major presence in three home markets: the
US Midwest, the Netherlands and Brazil. The Business Unit New Growth Markets
is expanding consumer and commercial operations in selected countries.
• Wholesale Clients – for major international corporations and institutions. This is
one of the largest Europe-based wholesale banking businesses with around 10,000
clients, 20,200 employees and operations in over 45 countries.
• Private Clients & Asset Management – for high net-worth individuals and
institutional investors. Rapidly growing, with Assets under Management of EUR
150 billion, Assets under Administration of EUR 96 billion and strong positions in
several markets.
With assets over US $504 billion and an ABN AMRO credit rating, ABN AMRO
Bank ranks among the top 10 banks in the world in size and strength. Their
international network comprises 3,568 branches and offices in over 320 cities and
76 countries and territories, with over 100,000 highly qualified staff. As a global
bank, they can handle the most complicated cross-border transactions, yet they also
understand the subtleties of local markets.
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ABN AMRO in India
ABN AMRO Bank (India) has an eight-decade long experience of the Indian
business scenario.
Traditionally known as a strong "diamond-financing bank", it has turned into a
bank providing a comprehensive range of services with a difference.
ABN AMRO (India) has branches in Mumbai, Delhi, Chennai, Kolkata, Pune,
Baroda, Hyderabad , Bangalore and Noida with each branch servicing multi-
product relationships.
Consumer banking offers a suite of products for the personal financial needs
offered through various channels including ATMs, Doorstep Banking and Net
Banking.
ABN AMRO Bank in India enjoys a strong image as a corporate bank with
comprehensive Global Transaction Services. Its investment banking services are
delivered through ABN AMRO (India) Corporate Finance and the Global
Financial Market Teams which, strive to maintain the permanent position that they
have built in the marketplace.
ABN AMRO Bank has launched its Private Banking Services in India offering a
comprehensive range of high quality Portfolio Advisory Services along with a
comprehensive transaction execution platform, complemented by personalized
Banking and custodial services.
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ABN AMRO Bank rated as the No.1 bank in India
ABN AMRO has been rated as the number one Bank in India by "Business
Today", one of the more respected Business Magazines in the country, together
with the reputed Consulting Firm, KPMG.
Why did ABN AMRO win the coveted position over 78 other top rated banks in
the country?
Consistent performance across the parameters; ABN AMRO Bank figures among
the top five in terms of asset quality, earnings quality, operations and productivity.
Net Non-Performing Asset growth rate among the lowest, reflecting prudent
lending. This is extremely noteworthy against the backdrop of the entire banking
industry, which witnessed a relative growth in net NPA in the past.
High in operational efficiency: ABN AMRO Bank has been scaling up operations
with minimal incremental costs and its cost of average interest bearing funds is
among the lowest in the industry.
High on productivity: The Bank has managed to achieve a consistent
improvement in operating profit per branch and per employee.
ABN AMRO is a well oiled banking machine that has grown profits, built quality
assets, entered new business areas, invested in technology and kept an eagle eye
on the all important cost to revenues ratio. The strength of this Bank is the talent
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of its people who have worked together and put in brilliant performances to take it
through many significant milestones.
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INTRODUCTION
HDFC was incorporated in 1977 with the primary objective of meeting a social
need – that of promoting home ownership by providing long-term finance to
households for their housing needs. HDFC was promoted with an initial share
capital of Rs. 100 million.
Against the milieu of rapid urbanization and a changing socio-economic scenario,
the demand for housing has grown explosively. The importance of the housing
sector in the economy can be illustrated by a few key statistics. According to the
National Building Organization (NBO), the total demand for housing is estimated
at 2 million units per year and the total housing shortfall is estimated to be 19.4
million units, of which 12.76 million units is from rural areas and 6.64 million
units from urban areas. The housing industry is the second largest employment
generator in the country. It is estimated that the budgeted 2 million units would
lead to the creation of an additional 10 million man-years of direct employment
and another 15 million man-years of indirect employment.
Having identified housing as a priority area in the Ninth Five Year Plan (1997-
2002), the National Housing Policy has envisaged an investment target of Rs.
1,500 billion for this sector. In order to achieve this investment target, the
Government needs to make low cost funds easily available and enforce legal and
regulatory reforms.
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BUSINESS OBJECTIVES:
The primary objective of HDFC is to enhance residential housing stock in the
country through the provision of housing finance in a systematic and professional
manner, and to promote home ownership. Another objective is to increase the flow
of resources to the housing sector by integrating the housing finance sector with
the overall domestic financial markets..
ORGANIZATIONAL GOALS:
HDFC’s main goals are to:
a) develop close relationships with individual households,
b) maintain its position as the premier housing finance institution in the
country,
c) transform ideas into viable and creative solutions,
d) provide consistently high returns to shareholders, and
e) to grow through diversification by leveraging off the existing client base.
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INTRODUCTION
ICICI Bank is India's second-largest bank with total assets of about Rs.112,024
crore and a network of about 450 branches and offices and about 1750 ATMs.
ICICI Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and through
its specialised subsidiaries and affiliates in the areas of investment banking, life
and non-life insurance, venture capital, asset management and information
technology. ICICI Bank's equity shares are listed in India on stock exchanges at
Chennai, Delhi, Kolkata and Vadodara, the Stock Exchange, Mumbai and the
National Stock Exchange of India Limited and its American Depositary Receipts
(ADRs) are listed on the New York Stock Exchange (NYSE).
ICICI Bank was originally promoted in 1994 by ICICI Limited, an Indian financial
institution, and was its wholly-owned subsidiary. ICICI's shareholding in ICICI
Bank was reduced to 46% through a public offering of shares in India in fiscal
1998, an equity offering in the form of ADRs listed on the NYSE in fiscal 2000,
ICICI Bank's acquisition of Bank of Madura Limited in an all-stock amalgamation
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in fiscal 2001, and secondary market sales by ICICI to institutional investors in
fiscal 2001 and fiscal 2002. ICICI was formed in 1955 at the initiative of the
World Bank, the Government of India and representatives of Indian industry. The
principal objective was to create a development financial institution for providing
medium-term and long-term project financing to Indian businesses. In the 1990s,
ICICI transformed its business from a development financial institution offering
only project finance to a diversified financial services group offering a wide
variety of products and services, both directly and through a number of subsidiaries
and affiliates like ICICI Bank. In 1999, ICICI become the first Indian company and
the first bank or financial institution from non-Japan Asia to be listed on the
NYSE.
After consideration of various corporate structuring alternatives in the context of
the emerging competitive scenario in the Indian banking industry, and the move
towards universal banking, the managements of ICICI and ICICI Bank formed the
view that the merger of ICICI with ICICI Bank would be the optimal strategic
alternative for both entities, and would create the optimal legal structure for the
ICICI group's universal banking strategy. The merger would enhance value for
ICICI shareholders through the merged entity's access to low-cost deposits, greater
opportunities for earning fee-based income and the ability to participate in the
payments system and provide transaction-banking services. The merger would
enhance value for ICICI Bank shareholders through a large capital base and scale
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of operations, seamless access to ICICI's strong corporate relationships built up
over five decades, entry into new business segments, higher market share in
various business segments, particularly fee-based services, and access to the vast
talent pool of ICICI and its subsidiaries. In October 2001, the Boards of Directors
of ICICI and ICICI Bank approved the merger of ICICI and two of its wholly-
owned retail finance subsidiaries, ICICI Personal Financial Services Limited and
ICICI Capital Services Limited, with ICICI Bank. The merger was approved by
shareholders of ICICI and ICICI Bank in January 2002, by the High Court of
Gujarat at Ahmedabad in March 2002, and by the High Court of Judicature at
Mumbai and the Reserve Bank of India in April 2002. Consequent to the merger,
the ICICI group's financing and banking operations, both wholesale and retail,
have been integrated in a single entity.
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FINANCE-WHAT IT IS
Finance is an evolutionary concept having bearance with changes in economic
conditions and organizational forms of business units. There have been
different views in this regard.
The Oxford Dictionary explains it as “the management of money”.
While the Webster’s views it as the science or study of management of funds.
On the whole finance is a body of facts, principles and theories dealing with
raising, using and controlling of funds.
CORPORATE FINANCE - meaning & definition:
Corporate Finance can be defined as the process of raising, providing and
administering of money/funds to be used in a corporate enterprise.
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Wheeler defines Corporate Finance as “the business activity, which is
concerned with the acquisition and conservation of capital in meeting the
financial needs and overall objectives of business enterprise.”
According to Guthman & Dougall “Business finance can be broadly defined
as the activity concerned with the planning, raising, controlling and
administering the funds used in the business.”
Therefore, the scope of Corporate Finance is so wide as to cover the financial
activities of a business enterprise right from its inception to its growth and
expansion and in some cases to its winding up also.
IMPORTANCE:
The knowledge of the discipline of Corporate Finance is important not only to
the practicing managers, but also to others who deal with a corporate
enterprise, such as investors, lenders, bankers, creditors etc as there is always a
scope for the management to manipulate and ‘window dress’ the financial
statements.
Investors
The investors need to know the basics of Corporate Finance to select the best
option of investment, with high and regular returns.
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Management
Management primarily functions towards the maximization of the growth of
the business and this can be materialized if the management possesses sound
knowledge of the mechanism of Corporate Finance etc..
FINANCE FUNCTION:
Finance Function is the most important of all business functions. It remains a
focus of all activities. It is not possible to substitute or eliminate this function
because finance forms the backbone of every business. The need for money is
continuous. It starts with the setting up of an enterprise and remains at all
times. The development and expansion of business rather needs more
commitment for funds. The sources of funds will be selected in relation to the
implications attached with them. The money raised demands repayment and
hence the best possible utilization is necessary. The management should have
an idea of using the money profitably. The inflows and outflows of funds
should be properly matched.
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SCOPE OF FINANCE FUNCTION:
Finance Function
Reccuring Functions Non Recurring functions Advisory Functions
Estimating Selecting Liquidity ProperFinancial Source of Maintenance Use of
Requirements Finance Surpluses
Deciding Selecting Implementing Routine Capital Pattern of Financial Functions Structure Investment Controls Recording And Reporting of Accounting Information
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CORPORATE GOVERNANCE
As defined by the Institute of Chartered Accountants of India:
“Corporate Governance system is its embedded confirmation of values, ethics
and appropriate and expected behaviour which provide the coordinates for the
organisation’s performance of its role as a societal entity, in all its aspects. A
code of Corporate Governance makes explicit both the auditable and desirable
aspects of such a configuration.”
Objective:
The fundamental objective of Corporate Governance is enhancement in the
value of longtime shareholder while at the same time protecting the interest of
other stakeholders. Corporate Governance includes strategic planning and
leadership and organization design.
The Companies Act, 1956 is the main instrument for improving Corporate
Governance. Various new amendments have been made in the Act, at different
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times for better survival of organisations in the corporate world. The recent and
most important ones are:
SEC 217 : Director’s Responsibility Statement
This Section says that in order to increase the accountability of the Directors
towards the functioning of an organization, a Director’s Responsibility
Statement shall be included in the Report of the Board of Directors (BOD) in
the Annual Report of the company.
SEC 292A : Audit Committees
Every company having a paid-up share capital of Rs. 5 crores and above
shall have an Audit Committee, with 3 Directors, two-thirds of whom will
be independent Directors.
SEC 383A : Compliance Certification
Companies with a paid-up share capital of Rs. 10 lakhs and above without a
full time Secretary, shall file with the Registrar of companies, a Compliance
Certificate from a Secretary in whole time practice and a copy of it shall be
attached with the Directors’ Report.
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In addition to that, there were a few more amendments to the listing
agreements under Clause 49 of the Act, based on the recommendations of
the Committee on Corporate Governance constituted by the Securities
Exchange Board of India(SEBI).
BOARD OF DIRECTORS: The Company shall have at least 50% non-
executive Directors and the rest, executive Directors.
Audit Committees: The Company should have an independent Audit
Committee with an independent Director as Chairman.
Remuneration of Directors: There should be adequate disclosure of the
remuneration package to Directors.
Board meetings and procedures: There should be atleast 4 Board meetings
after every possible 4 months and so on and so forth.
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ABN AMRO’s CORPORATE GOVERNANCE INCLUDES:
“We are continuously enhancing our corporate governance to ensure the
highest standards of transparency and accountability.”
Corporate governance ABN AMRO views corporate governance as the way it
conducts relations between shareholders, Supervisory Board, Managing Board and
employees. For ABN AMRO, good corporate governance is critical to their
strategic goal of creating sustainable long-term value. Sound corporate governance
is vital for their stakeholders – shareholders, clients, employees, suppliers and
society at large.
In recent years, corporate governance has taken center stage in public debate about
the nature and behaviour of companies. ABN AMRO has closely followed and
participated in national and international initiatives to improve corporate
governance. They are committed to implementing these initiatives over and above
merely meeting legal obligations because they believe that complying with the
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requirements of the global business community is in the interests of the bank and
its shareholders.
ABN AMRO is characterized by a two-tier system of corporate governance,
comprising one body composed solely of non-executive directors (the Supervisory
Board) and one body composed solely of management (the Managing Board).
Each Board must be independent from the other – no overlapping membership is
permitted. The Supervisory Board has the legal duty of supervising the conduct
and policies of the Managing Board, as well as the company’s general affairs. In
addition, the Supervisory Board shall assist the Managing Board with advice. In
performing their duties, members of the Supervisory Board must consider the
interests of the company and its business rather than the interests of any particular
stakeholder. Members of the Supervisory Board are not on the company’s payroll,
but receive an annual remuneration as a member of the board. The Audit
Committee and the Nomination & compensation Committee are sub-committees of
the Supervisory Board. The Managing Board makes policy and manages the
company day-to-day.
Public debate about the nature and behaviour of the companies has paid more
attention in recent years to shareholders as stakeholders. New emphasis has been
placed on the concept of shareholder value and on measures, which will reinforce
the involvement, and influence of shareholders. The underlying belief is that
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focusing on sustainable long-term value creation for shareholders also implies a
proper balance with, and attention to, the needs of other stakeholders. ABN AMRO
has been in the forefront of these developments and in 2000 they announced that
they would benchmark their performance in creating shareholder value against that
of a published list of peer banks. Major business initiatives and restructurings have
been undertaken with this goal in mind.
ABN AMRO is a Securities and Exchange Commission registered company with a
listing on the New York Stock Exchange. They are therefore subject to US
securities laws, including the Sarbanes-Oxley Act, which was passed into law in
2002 to restore investor confidence in the wake of several major corporate scandals
and collapses. The Act is wide ranging and includes provisions affecting
disclosures by public companies and corporate governance. The integrity of
management and auditors is at the heart of the Sarbanes-Oxley Act. The Act
requires listed companies to have an audit committee composed of independent
directors. It also promotes auditor independence by prohibiting auditors from
providing certain non-audit services whilst conducting audits. ABN AMRO’s
existing oversight and corporate governance practices in many respects fully
honour the spirit and requirements of the Sarbanes-Oxley Act reforms. ABN
AMRO has long had an Audit Committee in place, which it believes is
independent and intends, as the Sarbanes-Oxley Act requirements come into force,
to maintain this independence. ABN AMRO’s Managing Board is committed to
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implementing measures, which will promote investor confidence and market
integrity. In response to the Sarbanes-OxleyAct, ABN AMRO has instituted a
Disclosure Committee that formalizes the tasks and disciplines already responsible
for ensuring the accuracy and completeness of information disclosed to the market.
The members of the Disclosure Committee include the Principal Accounting
Officer (Chairman), the Head of Group Legal &Compliance, the Head of Investor
Relations, the Head of Group Audit, the Head of Group Risk Management
Reporting and, as needed, persons from other parts of the company. They are
committed to complying with the law and regulations in all countries in which the
bank operates. Upon enactment of new laws and regulations, such as those
resulting from the Sarbanes-Oxley Act, the bank will adjust its corporate
governance to ensure full compliance.
ABN AMRO Bank N.V. has limited liability incorporated under the laws of the
Netherlands and subject to the Dutch Large Company Rules ABN AMRO takes
the view that it is essential to have a corporate governance structure which is
transparent and in accordance with international standards. The General Meeting of
Shareholders, is proposed to be held at the end of April every year.
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ABN AMRO is comprised of the following:
SUPERVISORY BOARB:
Candidates recommended for appointment or reappointment on the
Supervisory Board should meet the criteria of the profile. In order to
ensure the Supervisory Board’s independence, individuals employed by the
Holding or an affiliated company cannot be appointed as Supervisory
Board members.
The Chairman of the Supervisory Board should be notified if an
interest of a member of the Supervisory Board conflicts with that of the
company.
The Supervisory Board of ABN AMRO has 11 members.
The board appoints a Chairman and Vice Chairman, and the Audit
Committee and the Nomination & Compensation Committee, from among
its members.
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MANAGING BOARD:
The members of the Managing Board collectively manage the company
and are responsible for its performance. They are collectively and
individually accountable for all decisions taken by the Managing Board.
The management of the SBUs and the Corporate Centre is delegated to
Executive Committees. The Executive Committees consist of one or more
Managing Board members and one or more SEVPs and EVPs.
The Chairman of the Managing Board leads the Board in its overall
management of the company to achieve its performance goals and
ambitions.
The Chairman is the main point of liaison with the Supervisory Board.
The Chief Financial Officer is responsible for supporting the Chairman in
managing the company and for the financial affairs of the company.
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FINANCE FUNCTIONS
Finance Roles:
(a) Management of financial resources for meeting the bank’s programmes of
operations and capital expenditure including investment of surplus fund, if
any.
(b) Establish and maintain a system of financial scrutiny and internal checks
and render advice on financial matters including examination of feasibility
studies and detailed project reports.
(c) Carry out periodical / special studies with a view to control costs, reduce
expenditure, economy in administrative expenditure, improve efficiency
to maximize profitability of the company.
(d) Maintain the financial accounts, cost accounts and other relevant books
and records in accordance with the various statutory and other
requirements.
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(e) Advise on corporate cash planning, credit policy and pricing policies of
the organization.
(f) Ensuring that the company acts in all financial and accounting matters as
per approved policies.
Financial missions:
(a) To provide high quality financial staff support for decision-making and
control to all levels of management to enable the achievement of overall
corporate objectives and goals.
(b) To play a lead role in scanning the domestic and international financial
environment, formulation and implementation of all financial policies and
plans for different spans consistent with and conducive to the business
plans for expansion, diversification, and productivity.
(c) To maintain, review and update all relevant accounting records, systems
and procedures for discharging the fiduciary responsibilities and enabling
compliance with statutory obligations.
(d) To inculcate financial awareness, cost benefit attitudes and system
orientation in the entire organization.
(e) To develop the human resources, systems and techniques of finance for
continuing innovation and contribution towards corporate excellence.
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Financial Objectives and Goals:
(a) To ensure adequate returns on capital employed and maintain a reasonable
annual dividend on its equity capital.
(b) To ensure maximum economy in expenditure by inculcating cost
consciousness in all departments.
(c) To develop long term corporate plans to provide adequate growth of the
activities of the organization.
(d) To continue an effort in bringing reduction in the cost by means of
systematic cost control measures.
(e) To monitor capital expenditure to ensure completion within stipulated
time and cost.
(f) To ensure optimum utilization and efficient management of funds.
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ACCOUNTING POLICIES:
General
The financial statements have been prepared in conformity with generally accepted
accounting principles. Where necessary, the amounts reported in the financial
statements are based on estimates and assumptions. In addition, the annual report
includes an analysis of equity and results according to accounting principles
generally accepted in India. (GAAP).
Changes in accounting policies
The cost of pensions and other post-retirement benefits will be recognized in
accordance with the relevant Indian accounting standards. Under this method of
accounting, calculations may be based on long-term assumptions for both pension
commitments and the return on the invested capital of the pension fund, with
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variances between estimated and actual figures being spread over a large number
of years.
Basis for inclusion of financial instruments
A financial instrument is accounted for as an asset or liability from the time the
respective contractual rights or obligations accrue to the company. Whenever this
ceases to be the case, a financial instrument is no longer recognized in the balance
sheet. If ABN AMRO has the right on the grounds of legal or contractual
provisions and the intention to settle financial assets and liabilities net or
simultaneously, they are netted off in the balance sheet.
Basis of consolidation
The consolidated financial statements incorporate the assets, liabilities, revenues
and expenses of ABN AMRO Holding N.V., its subsidiaries and other group
companies that form an organizational and economic entity with it. Minority
interests in both equity and results of subsidiaries and other group companies are
stated separately.
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Currency translation
Assets and liabilities denominated in foreign currencies and financial instruments
hedging these assets and liabilities are translated into euros at the spot rates of
exchange prevailing at balance sheet date. Translation differences are taken to the
income statement. With the exception of capital investments in hyper-inflationary
countries, translation differences on capital investments in foreign branches,
subsidiaries and participating interests, including retained profit, are accounted for
in shareholders’ equity together with the results from related hedging instruments,
after allowing for taxation. Results on transactions denominated in foreign
currencies are translated at the rates prevailing at transaction date or, insofar as
accruals and deferrals are involved, on the last day of the month to which the
results relate.
Valuation and determination of results
Assets and liabilities are recorded at cost, less any allowance deemed necessary.
The effects of transactions and other events are recognized when they occur;
revenues and expenses are recognized in the year to which they relate.
Premiums and discounts are accounted for in prepayments and accrued income or
accruals and deferred income respectively, and are attributed to the accounting
periods throughout the remaining terms of the underlying items.
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Except for items forming part of the trading portfolio, interest-earning and interest-
bearing securities on which a large part or all of the interest receivable or payable
is settled on redemption are included at either purchase price or discounted value
on issue plus accrued interest.
Where financial instruments are used to hedge risks associated with designated
assets or liabilities, the valuation and determination of results on these instruments
are effected in accordance with the policies applied to the hedged items.
Gains or losses on the early termination of a hedge are recognized as assets or
liabilities and amortized over the remaining terms of the hedged positions. Where
financial instruments are used to hedge risks associated with designated assets or
liabilities and the hedged assets or liabilities are sold or terminated, such financial
instruments no longer qualify as hedges.
Where loan-related fees exceed initial expenses, the excess is accounted for as
interest in the period concerned. Acquisition commission paid by the life insurance
subsidiary to third parties and the banking operation are capitalized as initial
expenses and amortized.
Expenses involved in the issuance of ordinary and preference shares are charged to
shareholders’ equity.
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Loans
Loans are generally shown at the principal amount. Loans are classified as doubtful
as soon as there is any doubt about the borrower’s capacity to repay the principal.
The allowances for consumer loans portfolio is determined on a portfolio basis
with a specific provision for each product being determined by the size of the
portfolio and historical loss experience. The allowances are recognized in
provision for loan losses in the income statement.
Doubtful loans are not written off until it is clear that repayment of principal can be
ruled out.
The fund for general banking risks aims to cover general risks related to credits
and other banking activities. The related deferred tax assets are deducted from the
fund.
Trading activities
Securities held in the trading portfolios are stated at market value. Debentures of
ABN AMRO group companies, acquired as part of trading activities, are stated at
the lower of market value and purchase price. Foreign exchange contracts, stock,
bond, currency and other options, as well as interest rate contracts such as interest
rate swaps and forward rate agreements, are stated at market value. The aggregate
market value of these contracts is included in other assets or other liabilities. Gains
or losses resulting from the method of valuation described are recognized in the
income statement in results from financial transactions.
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Investments
Interest-earning securities (other than securities on which a large part or all of the
interest is settled on redemption) held in the investment portfolios are stated at
redemption value. Shares held in these portfolios are included at market value,
with changes in value, net of tax, reflected in shareholders’ equity. If the
revaluation reserve formed in this manner on a portfolio basis is insufficient to
absorb diminutions in value, they will be charged to the income statement in value
adjustments to financial fixed assets. Results on sales are credited to the income
statement in the year the investments are sold. Net capital gains on interest-bearing
securities realised prior to redemption date in connection with replacement
operations are recognized as interest over the remaining average portfolio duration.
Investments which are held under insurance contracts for the account and risk of
policyholders are carried at market value; changes in the value of these
investments are accounted for as other revenue (profits or losses of insurance
companies).
Shares as part of venture capital activities
Equity investments, i.e. shares acquired as part of venture capital activities, are
stated at purchase price or sustained lower market value. Changes in value are
reflected in the income statement.
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Participating Interest
Participating interests in whom ABN AMRO or one of its subsidiaries has a
significant influence on commercial and financial policy are stated at net asset
value determined inconformity with the policies applied in these financial
statements. In accordance with these policies, movements in net asset value are
recorded in shareholders’ equity, such as revaluations and goodwill, or in the
income statement. Tax payable on distributions is taken into account at the moment
of the decision to make a distribution. Goodwill arising from the acquisition of
participating interests is charged to shareholders’ equity. Other participating
interests, consisting principally of equity investments in companies in related lines
of business, are shown either at market value at balance sheet date. Movements in
the value of participating interests on which the bank does not exercise an
influence are recorded, net of tax, in shareholders’ equity.
If the revaluation reserve formed in this manner for each participating interest is
insufficient to absorb diminutions in value, such diminutions will be charged to the
income statement in value adjustments to financial fixed assets. Property and
equipment, Premises used in operations, including land, are stated at current value
based on replacement cost. These current values are estimated on a rolling basis by
external appraisers, whereby each year at least 10% of the bank’s buildings is
appraised. The value of larger fittings is estimated once every five years. Buildings
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and fixtures and fittings are fully depreciated by the straight-line, method over their
estimated useful life, with a maximum of fifty years. Movements in value, net of
tax, are credited or charged to Provisions, Pension or other retirement plans have
been established for the employees. Most of these plans are administered by
separate pension funds or third parties.
The obligations are regarded as own obligations of ABN AMRO, irrespective of
whether these are administered by a pension fund or in some other manner.
Viewed against this background, the nature and substance of the plans are decisive
for their treatment in the financial statements. In this respect, a distinction is made
between defined contribution plans and defined benefit plans.
Defined benefit plan pension obligations are calculated in accordance with the
projected unit credit method of actuarial cost allocation.
Under this method, the present value of pension and other employee benefit
obligations is determined on the basis of the number of active years of service up
to balance sheet date, the estimated salary scale at the time of the expected
retirement date and the market rate of interest on high quality corporate bonds.
To determine the pension costs, the expected return on the plan assets is included
in the calculation. Differences between the expected and actual return on the plan
assets, as well as actuarial changes, are only recorded in the income statement if
the total of these accumulated differences and changes exceeds a bandwidth of
10% of the largest of obligations under the plan or the fair value of the related plan
34
assets. The part that exceeds the bandwidth is taken to the income statement over
the members’ remaining years of service. Additions in defined benefit obligations
resulting from revised plans regarding prior service periods (past service cost) are
also not recognized immediately in the period these benefits are vested but taken to
the income statement over the members’ remaining years of service. Any
differences thus calculated between the pension costs and the contributions payable
are accounted for as provision or prepayments. If the accumulated benefit
obligation (the defined benefit obligation without considering future salary
increases) exceeds the fair value of the plan assets of the pension fund, an
additional liability (provision for pension obligations) may be required. This will
be the case if this excess is greater than the provision for pension obligations
already accounted for, taking into account the method described above. If an
additional provision for pension obligations is recognized, an equal amount, but
not to exceed the amount of unrecognized prior service cost, is recognized as an
intangible asset. Any amount not recognized as an intangible asset will be arged to
shareholders’ equity. Obligations relating to the early retirement of employees are
treated in this context as pension obligations.
Taxes
In determining the effective tax rate, all timing differences between pre-tax profit
determined on the basis of ABN AMRO accounting policies and the taxable
35
amount in accordance with tax legislation, are taken into account. Deferred tax
assets and liabilities are discounted to their present value on the basis of the net
interest. Deferred tax assets are accounted for only if there is sufficient assurance
about their collectibility. The addition to or withdrawal from the fund for general
banking risks is taken into account when determining the effective tax rate.
FINANCIAL ANALYSIS OF DIFFERENT ITEMS IN THE
BALANCE SHEET
1. Cash
This item includes legal tender and demand deposits with central banks in
countries in which the bank has a presence.
2. Short-dated government paper
This item includes securities issued by public authorities, such as treasury paper,
with original terms of two years or less, provided they can be refinanced with a
central bank.
36
3. Banks (assets)
This item includes receivables, including professional securities transactions, from
credit institutions, central banks and multilateral development banks not already
recognized in cash.
Securities receivables are included in interest-earning securities or shares.
4. Loans and credit risk
This item includes amounts receivable in connection with loans, including
professional securities transactions, insofar as these are not recognized in the banks
item.
Securities receivables are included in interest-earning securities or shares.
In granting facilities and loans, the bank incurs a credit risk, i.e. the risk that the
receivable will not be paid. This primarily concerns the balance sheet items banks,
loans and interest-earning securities and off-balance sheet items. Concentration of
credit risk could result in a material loss for the bank if a change in economic
circumstances were to affect a whole industry or country.
5. Securities
37
The balance sheet items short-dated government paper, interest-earning securities
and shares include the investment portfolios, the trading portfolios, securities
receivables such as treasury paper and commercial paper, and equity participations.
Interest-earning securities forming part of an investment portfolio, which
principally consist of central government bonds, serve as a liquidity buffer among
others. The bank attempts to maximize the return on these instruments through a
policy of active management. Equity investments held on a long-term basis are
also included in the investment portfolios.
As part of its securities brokerage activities, the bank also trades in ABN AMRO
shares. In addition, shares were repurchased on the stock exchange in connection
with staff options granted, performance share plan and to cover positions with
clients.
ITEMS 2002 2001INVESTMENT PORTFOLIOS 1,00,823 86967TRADING PORTFOLIOS 48,965 51,325SHORT-DATED GOVERNMENT PAPER 1,191 3,126OTHER BANK PAPERS 3,269 3,295OTHER SECURITIES 3,998 6,145OTHER SHARES 1,190 903EQUITY PARTICIPATIONS 1,695 1,704TOTAL SECURITIES 1,61,131 1,52,455
6. Participating interests
38
This item includes equity participations held on a long-term basis for the purpose
of business operations.
7. Other assets and other liabilities
These items include those amounts, which are not of an accrued, or deferred nature
or which cannot be classified with any other balance sheet item. This concerns, for
example, current tax assets and current tax liabilities, deferred tax assets, an
intangible asset on account of unrecognized prior service pension cost, options,
servicing rights, precious metals and other goods, balances of payment transactions
still to be settled, short securities positions and market value of interest rate and
currency contracts as part of trading activities.
8. Prepayments and accrued income and accruals and deferred income
These items include revenue and expenses recognized in the period under review
but whose actual receipt or payment falls in a different period, as well as the total
net difference between contract rates and spot rates on foreign exchange hedging
operations.
9. Banks (liabilities)
39
This item comprises debts, including amounts on account of professional securities
transactions, to credit institutions, central banks and multilateral development
banks.
10.Total client accounts
This item includes total client balances held in current accounts, savings accounts
and deposits, as well as debts on account of professional securities transactions and
non-subordinated private loans.
11.Provisions2002 2001
This includes, Provisions for deferred tax liabilities, Provisions for pension
obligations, Provisions for contributions to health insurance after retirement,
Insurance fund liabilities.
Other provisions:
The other staff provisions refer in particular to occupational disability and other
benefits, except early retirement benefits, payable to non-active employees.
Provisions formed for staff benefit schemes due to restructuring are accounted for
as restructuring provisions. Insurance fund liabilities include the actuarial reserves
40
and the premium and claims reserves of the group's insurance companies.
Provisions are generally long-term in nature.
The expected return on investments regarding pension obligations is weighted on
the basis of the fair value of these investments. All other assumptions are weighted
on the basis of the defined benefit plan obligations. Unrecognized service cost
refers to the additional pension obligations resulting from the lowering of the
retirement age to 62 years for the employees.
Assumptions relating to movements in health care significantly affect the amounts
disclosed for contributions to post-retirement health care. An increase of 1% in the
assumed movement in the costs of health care would result in the accumulated
obligation for other post-retirement benefits.
12.Fund for general banking risks
The fund for general banking risks covers general risks associated with lending and
other banking activities. The fund is net of tax and forms part of tier 1 capital; it is
maintained partly in currencies other than the euro.
13.Subordinated debt
This item includes subordinated debentures and loans. It comprises debt
subordinated to all other current and future liabilities of ABN AMRO Holding N.V
as well as subordinated borrowings of consolidated participating interests. The
average interest rate on subordinated debt was 6.2%.
41
14.Maturity
Short-dated liabilities and demand deposits are, generally matched by cash, assets,
that can be realized, at short notice or lending operations as part of the interest rate
risk policy. The balance sheet is already presented in descending order of liquidity.
A number of items containing assets or liabilities with varying maturities are
analyzed in the following table. This analysis does not include liquid assets such as
cash and short-dated government paper and the bond investment portfolios, which
by their nature can be realized at short notice. In every country in which ABN
AMRO is active, liquidity satisfies the standards imposed by the supervisory
authorities.
15.Net commissions
This item includes revenue from securities brokerage, domestic and international
payments, asset management, insurance, guarantees, leasing and other services.
Amounts paid to third parties are shown as commission expense.
16.Results from financial transactions
This includes results from securities trading, foreign exchange dealing and
derivatives transactions. The category other includes trading LDC debt securities,
currency translation differences on investments – other than those included in
42
tangible fixed assets – in branches, subsidiary and participating interests in hyper-
inflationary countries, results from private equity positions as well as results from
transactions in connection with hedging of the foreign currency profit.
17.Addition to the fund for general banking risks
This item includes the addition to or release from the fund, management’s intention
being to maintain the fund at a level equal to approximately 0.5% of risk-weighted
total assets.
18.Value adjustments to financial fixed assets
Financial fixed assets include the bond and equity investment portfolios and
participating interests on which the bank does not exercise an influence.
Diminutions in value of the bond investment portfolio may relate to a permanent
deterioration of the debtor’s quality. These diminutions in value and the
diminutions in value below the purchase price of shares and participating interests
on which no influence is exercised, together with amounts released in respect of
earlier diminutions in value, are included in this item.
19.Minority interests
This item comprises the share of third parties in results from subsidiaries and other
group companies, as well as dividends on preferred stock issued by subsidiaries.
43
20.Earnings per ordinary share
Basic earnings per share are computed by dividing net profit available to ordinary
shareholders by the weighted average number of ordinary shares outstanding.
Diluted earnings per ordinary share include the determinants of basic earnings per
ordinary share and, in addition, the effect arising should all outstanding rights to
ordinary shares are exercised.
RATIO ANALYSIS
Introduction
Ratio analysis is an important means of expressing the relationship between two
numbers. A ratio can be computed from any pair of numbers to be useful.
The techniques used in analyzing financial statements are comparative statements,
trend analysis, fund flow and cash flow analysis, cost volume-profit analysis and
ratio analysis. The ratio analysis is one of the powerful tools of financial analysis.
It is the process of establishing and interpreting various ratios. It is with the help of
44
ratios that the financial statements can be analyzed more clearly which helps in
decision making.
A ratio is a simple arithmetical expression of the relationship of one number to
another. It ma be defined as the indicated quotient of two mathematical
expressions.
According to the accountant’s Handbook by Wixon, Kell and Bedford, a ratio
“is an expression of the quantitative relationship between two numbers”.
According to Kohler, “a ratio is the relation, of the amount, a, to another, b,
expressed as the ratio of a to b; a:b(a is to b) ; or as a simple fraction, integer,
decimal, fraction or percentage.”
Meaning
Ratio analysis is the technique of calculating a number of accounting ratios from
the data or figures found in the financial statements, comparing the computed
accounting ratios with those of the previous years or with those of other concerns
engaged in similar line of activities or with those of standard or ideal ratios, and
interpreting the comparison i.e. drawing conclusions from the comparison of the
accounting ratios.
45
In short, it is the technique of interpretation of the financial statements with the
help of the accounting ratios derived from the financial statements. Basically, it is a
device to analyze and interpret the financial health of an enterprise.
History
Ratios were known and used from time immemorial. But the idea of using ratios as
a technique for the analysis of the financial statements of business concerns were
suggested for the first time in 1919 by a German scholar, named Alexander Wall –
who is considered to be the pioneer of ratio analysis. Since then ratio analysis has
come to be recognized as a very useful tool of financial analysis.
The use of ratio analysis as a financial tool has increased in the recent years. It is
used for assessing the current and long-term financial soundness of a business
concern. It is also used for analyzing the various aspects of operational efficiency
and the degree of profitability of a concern.
SIGNIFICANCE OF RATIO ANALYSIS:
The ratio analysis is one of the most powerful tools of financial analysis. It is used
as a device to analyse and interpret the financial health of enterprise. It is not only
useful to the financial managers but also to the suppliers of goods on credit, the
financial institutions, the investors, the shareholders and also the management.
Ratios have wide applications and are of immense use today.
46
Managerial uses of ratio analysis
Utility to shareholders
Utility to creditors
Utility to employees
Utility to government
Managerial uses
i. Helps in decision-making
Financial statements are prepared primarily for decision-making. But the
information provided in the financial statements is not an end in itself and
no meaningful conclusions can be drawn from these statements alone.
47
Ratio analysis helps in making decisions from the information provided in
these financial statements.
ii. Helps in financial forecasting and planning
Planning is looking ahead and the ratios calculated for a number of years
work as a guide for the future. Meaningful conclusions can be drawn for
future from these ratios. Thus, ratio analysis helps in forecasting and
planning.
iii. Helps in communicating
The financial strength and weakness of a firm are communicated in a more
easy and understandable manner by the use of ratios. Thus, ratios help in
communication and enhance the value of the financial statements.
iv. Helps in control
Ratio analysis even helps in making effective control of the business.
Standard ratios can be based upon proforma financial statements and
variations or deviation, if any, can be found by comparing the actuals with
the standards so as to take a corrective action at the right time. The
48
weaknesses or otherwise, if any, come to the knowledge of the
management, which helps in effective control of the business.
v. Other uses
There are so many other uses of the ratio analysis. It is an essential part of
the budgetary control and standard costing.
Utility to shareholders/investors
An investor in the company will like to asses the financial position of the
concern where he is going to invest. His first interest will be the security of his
investment and then a return in the form of dividend or interest. Long-term
solvency ratios will help of the concern. Profitability ratios, on the other hand,
will be useful to him in assessing the financial position determine profitability
position. Ratio analysis will be useful to the investor in making up his mind
whether present financial position of the concern warrants further investment or
not.
Utility to creditors
The creditors or suppliers extend short-term credit to the concern. They are
interested to know whether financial position of the concern warrants their
payments at a specified time or not. The concern pays short-term creditors out
of its current assets. If the current assets are quite sufficient to meet current
49
liabilities, then the creditor will not hesitate in extending credit facilities.
Current and acid-test ratios will give an idea about the current financial position
of the concern.
Utility to employees
The employees are also interested in the financial position of the concern
especially profitability. Their wage increases and amount of fringe benefits are
related to the volume of profits earned by the concern. Profitability ratios are
helpful in this case.
Utility to government
Government is interested to know the overall strength of the industry. Various
financial statements published by industrial units are used to calculate ratios for
determining short-term, long-term and overall financial position of the
concerns. Government can base its future policies on the basis of financial
information available from various units. The ratios may be used as indicators
of overall financial strength of public as well as private sector.
Limitations of ratio analysis:
Limited use of a single ratio
50
A single ratio, usually, does not convey much of a sense. To make a better
interpretation a number of ratios have to be calculated which is likely to
confuse the analyst than help him in making any meaningful conclusion.
Lack of adequate standards
There are no well accepted standards or rules of thumb for all ratios which
can be accepted as norms. It renders interpretation of the ratios difficult.
Change of accounting procedure
Change in accounting procedure of a firm often makes ratio analysis
misleading, e.g., a change in the valuation of methods of inventories, from
FIFO to LIFO increases the cost of sales and reduces considerably the value
of closing stocks which makes stock turnover ratio to be lucrative and an
unfavorable gross profit ratio.
Window dressing
Financial statements can easily be window dressed to present a better picture
of its financial and profitability position to outsiders. Hence, one has to be
very careful in making a decision from ratios calculated from such financial
statements. But it may be very difficult for an outsider to know about the
window dressing made by a firm.
Personal bias
51
Ratios are only means of financial analysis and not an end in itself. Ratios
have to be interpreted and different people may interpret the same ratio in
different ways.
Incomparable
Not only industries differ in their nature but also the firms of the similar
business differ in their size and accounting procedures, etc. it makes
comparison of ratios difficult and misleading. Moreover, comparisons are
made difficult due to differences in definitions of various financial terms
used in the ratio analysis.
Price level changes
While making ratio analysis, no consideration is made to the change in price
levels and this makes the interpretation of ratios invalid.
Ratios no substitute
Ratio analysis is merely a tool of financial statements. Hence, ratios become
useless if separated from the statements from which they are computed.
52
CLASSIFICATION OF RATIOS:
Ratios
(A) (B) (C)
Traditional Classification Functional Classification Significance RatioOr or or
Statement Ratios Classification According Ratios Accordingto Tests to Importance
Maximum Tenure: 4 yearsInterest Rate: 12%Effective Interest Rates: 21% on monthly reducing balance
Frequency: NAMargin Required: NilSecurity Required: NilDocumentation: Proof of age Proof of residence Proof of identity Post dated cheques Last two months salary slip Last 6 months bank statements Proof of qualification IT returns for past 2 years
Remark: Loan available only to the banks approved list of companies
HDFC BANK
Bank: HDFC Bank
Eligibility: Minimum Annual income:Rs.96000 Net
Minimum Loan Amount: Rs.25000Maximum Loan Amount: Rs.500000Maximum Tenure: 4 yearsInterest Rate: 11.5%Effective Interest Rates: 21%Frequency: Calculated on monthly reducing balanceMargin Required: NoneSecurity Required: NoneDocumentation: Proof of age Proof of residence IT returns for past 2 years Proof of qualification Post dated cheques
Remark:The loan is provided only to people who are from a listed company and that too their list of companies
Minimum Loan Amount: Rs.20000Maximum Loan Amount: Rs.300000Maximum Tenure: 3 yearsInterest Rate: 11.9%Effective Interest Rates: 21%Frequency: Yearly reducing balanceMargin Required: NoneSecurity Required: NoneDocumentation: Proof of age Proof of residence IT returns for past 2 years Proof of qualification Post dated cheques
Remark: The loan is provided only to people who are from a listed company and that too their list of companies
CREDIT CARDS OF ABN AMRO:
SMART GOLD CARDS:
Card Privileges:
The ABN AMRO Smart Gold Card offers you an exclusive set of superior features
and benefits.
Unmatched Smart Benefits:
Smart Rewards - No Waiting, Just Shopping! The ABN AMRO Smart Gold Card
is the only Credit Card in India that allows the customers to shop for their own
reward. With this Card, every time the customers wish to redeem their reward
points, all they have to do is go to any of the designated Smart Rewards outlets and
choose their own gift. The ABN AMRO Smart Rewards program is hassle free,
fast and truly rewarding for the Card members. Every time one uses his/her ABN
AMRO Smart Gold Card, earns 1 point for every Rs.50 spend. All
international transactions earn 50% more points.
PRODUCT FEATURES
Higher Credit Limits
Smart Gold Card provides higher credit limit than the limit provided by
other Credit Cards.
Flexi Limit
The unique Flexi limit feature helps to regulate the Credit Limit on the Add-
on Card. The customers can assign a percentage of the total Credit Limit to
the Add-on Card by calling the 24hour bank by phone number in your city.
Smart Companion
Share the joy of the Smart Gold Card with your loved ones. Your Card
provides you another very special offer! A complimentary Add-on Card for
life!
Smart Alerts
The Smart Alerts feature combines security with a package of technology
friendly e-mail and SMS messages on all vital Card transactions sent to you at
frequent intervals. For e.g. when we credit your account with a payment or you
use your Card on the Internet, you will be intimated of the same.
Smart Year End Statement Summary (YESS)
This revolutionary feature on your ABN AMRO Smart Gold Card
allows you to keep track of your spending habits and patterns. The
Smart Year End Statement Summary combines all your transactions
during the year and provides you a consolidated summary displaying
your usage pattern under different categories such as Airlines, Hotels,
Retail Stores etc. over a period of 12 months. It provides a scientific
analysis of your spends, thus enabling you to plan your finances better.
Transfer your outstanding balance from your existing Credit Card to the ABN
AMRO Smart Gold at 0.99%* p.m. only - the lowest ever interest rate in the
industry. And get savings on interest payment of over 60%.
Global'CashAxess'24HoursADay
You can withdraw cash up to 30% of the Credit Limit on your ABN AMRO
Smart Gold Card from over 650,000 MasterCard ATMs around the world and
over 2900 MasterCard ATMs in India. You can also access cash from any ABN
AMRO Bank 24 Hour ATM
Global Validity For The Global Citizen
Your ABN AMRO Smart Gold Card puts you in control of the world. The Card
is accepted in about 23 million MasterCard merchant establishments
worldwide. It is a truly global Card that makes it easy for you to charge any
purchase on to your Card anywhere in the world. What's more, you can now
buy in any currency and pay back in Indian rupees.
Smart Cover
The ABN AMRO Smart Gold Card includes a package of insurance benefits.
It provides you a free Personal Accident Insurance cover of up to Rs. 15 Lakhs in
case of loss of life due to an air accident and up to Rs. 5 Lakhs due to other
accidents. Your Card automatically provides you Purchase Protection Insurance on
all purchases made on your Card against any damage or loss due to fire and theft
up to 90 days for Rs.40000 per year. The Credit Shield policy protects your family
against any outstanding liabilities, on your Credit Card up to Rs.50,000 in the
unfortunate event of the loss of your life. Additionally, you get a host of travel
related insurance covers free including Lost Baggage Insurance, Loss of Passport
Insurance and Delayed Flight Insurance of up to Rs.10,000 each and Delayed
Baggage Insurance of up to Rs.3000.
Smart Travel Privileges & Services
For your travel, business or pleasure, your ABN AMRO Smart Gold Card provides
you a set of exclusive offers and benefits courtesy SITA World Travel, part of the
Kuoni group. Besides getting you great discounts on hotels and exciting tourism
packages in India as well as abroad, you also get 3.5% discount on basic domestic
air fares and 5% on basic international air fares every time you choose to buy your
ticket on the Smart Gold Card. Besides, you also get the service of free delivery of
tickets right at your doorstep.
FREEDOM CREDIT CARDS:
The ABN AMRO Freedom Credit Card offers you a host of unique features that
act as constant checks against overspending.
PRODUCT FEATURES
Flexi Limit
The powerful Flexi limit feature offers you the freedom to regulate your credit
limit better. If at any point of time you feel that you need to control your
spending, you can simply call our Bank by Phone Executive who will be happy
to reduce your assigned limit. And, in case, you wish to increase the limit back
to its original level, you can do so again by simply calling us up.
You also have the option of assigning a specific percentage of your credit limit
for use by each of your additional cardholders.
Year End Statement Summary (YESS)
Freedom Credit Card introduces yet another revolutionary feature -
Year End Statement Summary, which combines all your transactions during the
year and provides you a consolidated summary displaying your usage pattern
under different categories such as food, clothing, jewelry etc over 12 months. It
provides a scientific analysis of your Card spends, thus enabling you to plan
better.
Exceptional Financial Benefits
Your Freedom Credit Card gives you up to 50 days of interest free credit* on
your purchases, if you pay your outstandings in full.While you may buy a
product anytime, you can choose to pay in parts per your convenience. All you
have to do is just pay a minimum of 5% of the total outstanding each month
(subject to a minimum of Rs. 200) and the balance in installments that suit your
budget.
Global 'Cash Axess'
You can access cash up to 30% of your credit limit at over 2900 ATMs across
India and over 6,50,000 ATMs across the globe. You can access cash round-
the-clock, 365 days a year from any of the ATMs that display the MasterCard
sign.
Global Acceptance
Your Freedom Credit Card is welcomed at over 100,000 MasterCard outlets in
India and Nepal and at over 23 million merchant establishments worldwide.
You can now freely use your Freedom Credit Card for everyday purchases at
neighborhood shops, department stores, petrol pumps, restaurants and hotels,
for airline tickets, buying consumer durables, internet purchases and even
paying for hospital bills. With your internationally accepted Freedom Credit
Card, you are now a truly global citizen.
Travel Partner
Your Freedom Credit Card helps you get discounts of up to 3.5% on domestic
tickets and 5% on international tickets (delivered right at your doorstep) that
are bought through SITA World Travel, a part of Kuoni group. In addition, you
get great discounts on hotels and exciting holiday packages that suits your
budget.
Car Rental
As a Freedom Credit Card member you also get 15% discount every time
you rent a car from Hertz, the leading International Car Rental
Company.
Safe 'n' Secure
As a gesture of our concern for your well being, your Freedom Credit Card
offers you a host of Insurance covers, absolutely free. Getting you Big
Savings!
AVAILABILITY OF ABN AMRO CREDIT CARDS:
ABN AMRO has started its operations in about eleven(11) main cities of India
including the four(4) metros. Since its inception in the year 1920 with branches
only in Kolkata and Mumbai, it has spread its wings across the width and length of
the country.
The Delhi branch is functional from the year 2001. ABN AMRO was launched in
other cities throughout India between 1994 and 1999. Within five(5) years it
started operations in four(4) major cities of India. They were Chennai in 1994,
Pune in 1997 and Baroda in 1999, while the Hyderabad and Bangalore branches
were opened in 2001. The year 2002 saw the opening of the Noida office.
In total eighteen(18) branches are in operation throughout these eleven(11) cities.
Apart from the branches, ABN AMRO has also started its 24 hours banking
service through its ATM Centres. They have opened ATMs throughout nine (9)
cities which include New Delhi, Kolkata, Mumbai, Bangalore, Chennai, Noida,
Hyderabad, Baroda, Pune, across the country. These are providing excellent
functions and have proved to be very helpful for the customers easy access to
immediate money for 24 hours in 7 days.
T.V COMMERCIALS:
AD NO. 1:
A couple moving up the escalator Looking around the husband As they get ready to shop realizes the plethora of goodies in the
arcade…..
He tries to block his wife’s view She’s unable to figure out the strange from the display windows behaviour of her husband
MVO: Afraid, that your credit ... with flexilimit, that regulates your
Card will make you spend too credit limits and active alerts, for Much? Presenting the ABN regular alerts on spending. Now AMRO Freedom Credit Card… live without fear.
He voluntary offers her an ABN Super: Live without fear! AMRO card to shop.AD NO. 2:
Stopping in front of a shopping arcade, our protagonist debates...
... whether to go in. Just as he enters the mall, he puts on his blinkers...
... to protect himself from the mouthwatering deals all around.
The crowd notices our man trying hard to desist from shopping.
MVO: Afraid, that your credit card will make you spend too much? Presenting the ABN AMRO Freedom credit card...
... with flexilimit, that regulates your credit limit and active alerts, for regular alerts on spending. Now live without fear.
And he discards his blinkers in a bin.
Super: Live without fear!
A PRINT CAMPAIGN FOR CREDIT CARD OF ABN AMRO:
CREDIT CARDS OF HDFC:
To help the customers to keep up with the changing times, HDFC Bank offers the
Salem, Erode, Madurai, Mysore, Vizag and Kochi only.
UNIQUE FEATURES OF ICICI CREDIT CARDS:
Facility to pay various utility bills online through credit card
• Bandhan: Self-set spending under the overall credit limit for both, the add-on and
primary card
•A "secure" net-based access.
• Balance transfer facility at the low rates of 1.5% - 1.75% per month and the
lowest service charges
• Comprehensive insurance policy, including a personal accident cover against
earthquakes, on both, add-on and primary cards
POWERFUL BENEFITS OF ICICI BANK CREDIT CARDS:
Bandhan:
One can freely present a maximum of two add-on cards to his wife, sister, brother,
parents or children above 18 years of age. To apply for this add-on card, referred to
as "Bandhan", just call the ICICI Bank 24-hour Customer Care Centre and place
your request with an executive. A form will be sent to you. Also if you have linked
your Credit Card with your Internet banking User-id then you can also place your
request for an add-on card online.
Balance Transfer Facility:
If you own Credit Cards issued by other banks and wish to apply for an ICICI
Bank Credit Card, you can transfer the outstanding balance from your other card(s)
on to the ICICI Bank Credit Card. This transferred outstanding will attract an
interest rate of just 1.75% for the Blue & Silver Cards and 1.50% in case of the
Gold Card. And what’s more, this beneficial rate of interest is applicable for six
months (this special interest rate will not be applicable for new purchases). You
can transfer any amount from a minimum of Rs 2,000 to a maximum 75% of the
available credit limit on your ICICI Bank Credit Card.
Travel Benefits:
Now you can leave your travel and hotel bookings to us. All you need to do is call
the local travel office of Cox & Kings in your city to take care of all your travel
needs – be it business or leisure travel. All your railway and airline reservations,
hotel bookings, car rentals and even travel-related documentation will be taken
care of.
That's not all. We offer you a substantial discount of 2.5%* on basic domestic
airfares and 4.5%* on basic international airfares. All you need to do is to book
your tickets through Cox & Kings and charge it to your ICICI Bank Credit Card.
Insurance Benefits on an ICICI Bank Credit Card:
Life is unpredictable and we at ICICI Bank understand your concern for your
family. Insurance is by far the best way to safeguard the interests of your family.
And therefore in addition to any insurance cover you already have, ICICI Bank
offers you the most comprehensive insurance - related benefits. Of course we offer
you accident insurance, but in addition we also offer you credit shield, purchase
protection, baggage insurance, hospitalisation and household insurance.
Wide Acceptance:
ICICI Bank Blue Cards are welcomed at all Merchant Establishments displaying
the VISA logo - over 1,10,000 and MasterCard logo - over 77,000 establishments
across India and Nepal and the Silver and Gold cards are accepted globally by over
20 million VISA Card and 22 million MasterCard accepting establishments.
Statement By e-mail And Mobile Alerts:
Statement Online is a very simple, powerful and convenient way to view your
Credit Card statement details instantly without any postal delays. Just sign up for
Statement Online and get faster, reliable access to your Account Statement. Mobile
alerts from ICICI Bank provides you with information on your ICICI Bank Credit
Card even when you are on the move. You would now no longer miss a payment
or exhaust your credit limit without a warning. Currently customers having Internet
Banking user-ids can subscribe to the alerts.
Earn while you spend - ICICI Bank Credit Card Rewards Plus Program:
A special bonus plan that allows you to earn points every time you use your Card,
Every Rs. 100 that you spend earns you 1 point. The redemption of reward points
can be done against the products, services in the rewards catalogue or against your
renewal fees.
Self-Set Limit:
The only card that allows you to pre-define your own credit limits. You can request
for a limit lower than what your are eligible for. You can even preset the monthly
spending limits on the "Bandhan" card. Any transactions over the specified 'Spend
Limit' will be declined.
This monthly spending limit can be reset every billing cycle by just calling the
ICICI Bank 24-hour Customer Care Centre and place your request with the
executive. Your spend limit will be changed on-line and come in to force from the
next billing cycle.
Cash Advance Facility:
With an ICICI Bank Credit Card in your wallet, you will not be strapped for cash
ever again. You can withdraw cash on your Card, 24-hours a day from any VISA
and MasterCard participating member bank ATM. During banking hours you can
also draw cash over-the-counter, from any ICICI Bank branch in cities where the
ICICI Bank Credit Card has been introduced.
ICICI Bank Gold American Express Card
A Privilege Card - Own the most powerful and exclusive International Gold Card
powered by American Express services worldwide and enjoy exclusive benefits
available only to select.
Exclusive Benefits:
Most powerful catalogue based Rewards Program - Earn 1 reward points on
every Rs. 25 you spend.
Emergency Assist services (Medical, Legal, Personal and Travel services)
by American Express Global network.
0% fuel surcharge
Exclusive Membership Privileges- special offers in retail, travel and dining
when purchases are made with an American Express Card.
Highest Personal Accident Insurance upto Rs. 40 lakhs.
Discount of 5% on international and 3 % on domestic air travel bookings by
BTI-Sita.
Lodging Offer- complimentary room upgrade in any Le Meridian group of
hotels and free spouse stay.
Travel Offer - By China Airlines (Option A:Free Business class ticket to
your companion if traveling to US/Canada, Option B: Upto 50% off on
business class airfare to your companion if traveling to Asia pacific).
American Express Travelers Cheque and foreign exchange easily available
through American Express Travel Service locations free of commissions.
Other Benefits:
High credit limits.
Comprehensive insurance on international travel (Baggage loss, loss of
travel documents, delay in flight, hijack cover).
Household insurance upto Rs.75,000.
Hospitalisation Benefit policy upto Rs.50,000.
Purchase protection of Rs.40,000.
Credit Shield of Rs.50,000.
Zero lost card liability.
Complimentary Teleoptima Global Calling Card.
ICICI Bank - American Express Card:
The true Companion - The most powerful International Classic Card powered by
American Express services worldwide and rewarding generously on your spends.
Exclusive Benefits:
Most powerful catalogue based rewards Program - Earn 1reward points on
every Rs. 40 you spend.
Basic Assist services (Medical, Legal, Personal and Travel) by American
Express Global network.
0% fuel surcharge
Exclusive Membership Privileges - special offers in retail, travel and dining
when purchases are made with an American Express Card.
Comprehensive Personal Accident Insurance upto Rs. 15 lakhs.
Discount of 5% on international and 3 % on domestic air travel bookings
American Express Travelers Cheque and foreign exchange easily available
through American Express Travel Service locations free of commissions.
Other Benefits:
High credit limits.
Comprehensive insurance on international travel (Baggage loss, loss of
travel documents, delay in flight, hijack cover).
Household insurance upto Rs.20,000.
Hospitalisation Benefit policy upto Rs.25,000.
Purchase protection of Rs.20,000.
Credit Shield of Rs.25,000.
Zero lost card liability.
Complimentary Teleoptima Global Calling Card.
ICICI Bank Solid Gold Credit Card:
Exclusive Benefits:
Welcomed internationally at over 22 million merchant establishments.
High credit and cash limits.
Dial a draft free.
Balance transfer at 1.5%.
Zero lost card liability.
Complimentary Global One Calling Card.
Access to Global Customer Assistance Services.
Purchase protection of Rs.40,000.
Credit Shield of Rs.50,000.
Most powerful catalogue based rewards Program.
Comprehensive Travel Benefits.
Comprehensive Insurance for both primary and add-on cards upto Rs. 20
lakhs.
Household insurance upto Rs.75,000.
ICICI Bank - HPCL Gold Credit Card
India's first intelligent Credit Card with a microchip
Exclusive Benefits:
Earn and Redeem rewards points directly at select HPCL Petrol Pumps for
free fuel.
Option of redeeming rewards points in bookshops, jewellery, stores for
rewards of your choice soon.
Earn upto 15 reward points for every Rs.100/- spent at partner outlets.
Refund of Surcharges (2.5%) on Fuel Purchases.
Exciting rewards Program - Speed'o'Miles - 2 points for every Rs.125/- spent
at HP Petrol Pumps.
15% discount on P.U.C check and Labour charges at select HPCL Petrol
Pumps.
Discount on tyres, batteries and auto accessories sold at select HPCL Petrol
Pumps.
Welcomed internationally at over 22 million merchant establishments.
High credit and cash limits.
Dial a draft free.
Balance transfer at 1.5%.
Zero lost card liability.
Complimentary Global One Calling Card. Access to Global Customer
Assistance Services.
Purchase protection of Rs.40,000.
Credit Shield of Rs.50,000.
Comprehensive Travel Benefits.
Comprehensive Insurance for both primary and add-on cards upto Rs. 20
lakhs.
Household insurance upto Rs.75,000.
Baggage insurance upto Rs. 25,000.
Hospitalisation Benefit policy upto Rs.50,000.
Mobile Alerts and Statement by E-mail
ICICI Bank Sterling Silver Credit Card
A Card that offers special benefits to all members of a family starting with a Free
"Bandhan" add-on card.
Exclusive Benefits:
Comprehensive Insurance for both primary and add-on cards upto Rs. 10
lakhs.
Household insurance upto Rs.20,000.
Baggage insurance upto Rs. 10000.
Hospitalisation Benefit policy upto Rs.25,000.
Purchase protection of Rs.20,000.
Credit Shield of Rs.25,000.
Comprehensive travel related insurance.
Zero Lost card liability.
Dial a draft at 1%.
Balance transfer at 1.75%.
Most powerful catalogue based rewards Program.
ICICI Bank - HPCL Silver Credit Card:
Load up your tank with Free Fuel
Exclusive Benefits:
Refund of Surcharges (2.5%) on Fuel Purchases.
Exciting rewards Program - Speed'o'Miles - 2 points for every Rs.125/- spent
at HP Petrol Pumps.
15% discount on P.U.C check and Labour charges at select HPCL Petrol
Pumps.
Discount on tyres, batteries and auto accessories sold at select HPCL Petrol
Pumps.
Comprehensive Insurance for both primary and add-on cards upto Rs. 10
lakhs.
Household insurance upto Rs.20,000.
Baggage insurance upto Rs. 10000.
Hospitalisation Benefit policy upto Rs.25,000.
Purchase protection of Rs.20,000.
Credit Shield of Rs.25,000.
Comprehensive travel related insurance.
Zero Lost card liability.
Dial a draft at 1% fee.
Balance transfer at 1.75%.
Most powerful catalogue based rewards Program.
Comprehensive Travel Benefits.
Accepted at over 22 million merchant establishments globally.
Complimentary Global One Calling Card.
Mobile Alerts and Statement by E-mail
ICICI Bank True Blue Credit Card:
India's first value for money card. A no-frills card packed with benefits that matter.
Exclusive Benefits:
Predefine your own spend limits.
Visa and MasterCard acceptability across 1,10,000 merchant establishments
in India.
Dial a draft at 1%.
Balance transfer at 1.75%
Purchase protection of Rs.10,000.
Credit shield of Rs.10,000.
Most powerful catalogue based rewards Program.
Comprehensive Travel Benefits.
Personal Accident Insurance of Rs.3 lakhs (air) and Rs. 1 lakh (any other
accident).
Access to 24-hour Customer Care Centre and all VISA and MasterCard
approved ATMS
ICICI Bank - BPL Mobile Credit Card:
Stay connected with Easy Pay and free airtime
Exclusive Benefits:
Easy Pay Facility - Debit BPL Mobile bills on the card.
Earn reward points and redeem against free airtime.
Free one year mobile phone insurance against loss, theft or damage.
Free voice mail FREE on BPL Mobile for the first six months of card
membership (Valid in Mumbai) .
Roam Free National facility at no additional deposit (Valid in Tamil Nadu
excluding Chennai, Pondicherry, Maharahtra excluding Mumbai, Goa and
Kerala).
Comprehensive Insurance for both primary and add-on cards upto Rs. 10
lakhs.
Household insurance upto Rs.20,000.
Baggage insurance upto Rs. 10000.
Hospitalisation Benefit policy upto Rs.25,000.
Purchase protection of Rs.20,000.
Credit Shield of Rs.25,000.
Comprehensive travel related insurance.
Zero Lost card liability.
Dial a draft at 1% fee.
Balance transfer at 1.75%.
Most powerful catalogue based rewards Program.
Comprehensive Travel Benefits.
Accepted at over 22 million merchant establishments globally.
Complimentary Global One Calling Card.
Mobile Alerts and Statement by E-mail
ICICI PRU life Credit Card: India's First Life Insurance Credit Card:
An exclusive Credit Card for ICICI Prudential Policy Holders
Currently available only in the cities of Mumbai, Delhi, Chennai, Kolkata,
Bangalore, Hyderabad and Pune.
Exclusive benefits available on your ICICI PRU life Credit card:
The Monthly Interest Rate for the credit card is 1.95%.
1 Reward Point for every Rs 100 of premium paid through the co-branded
card.
50 Reward Points on first time usage.
50 Reward Points as a one-time bonus, on renewal of the policy on the credit
card. This is payable at the time of renewal of policy on the card.
Special discount at Apollo Hospitals:
10% discount on all lab investigations
10% discount on Imaging services (MRI, CT SCAN, Nuclear
medicine and Angiogram)
10% discount on DOST policy*
10% discount on AASHIRWAAD**
Extra discount at select merchants across top cities.
The Reward Points accumulated by the holder of the co-branded credit card
can be redeemed against future premium payments as well. The customer
can also redeem his points against the Redemption Program of ICICI Bank.
* 'Dost' is an Accident-cum-Medical benefit insurance policy developed by
Apollo Hospitals in association with Family Health Plan and National Insurance
Company
**Special Health Plan for the elderly, provided by Apollo hospitals.
Other Benefits Available On ICICI Pru Life Credit Card:
1 Reward Point for every Rs 100 of retail spend on the credit card.
Comprehensive Insurance for both primary and add-on cards upto Rs. 10
lakhs.
Household insurance upto Rs.20, 000.
Baggage insurance upto Rs. 10,000.
Hospitalization Benefit policy upto Rs.25, 000.
Purchase protection of Rs.20, 000.
Credit Shield of Rs.25, 000.
Comprehensive travel related insurance.
Zero Lost card liability.
Dial a draft at 1% fee.
Balance transfer at 1.75%.
Comprehensive Travel Benefits.
Accepted at over 22 million merchant establishments globally.
Complimentary Tele Optima Calling Card
TV COMMERCIAL:
An old woman tells her daughter about their neighbour's plans for going to Haridvar.
"Ab is umar mein kya jaayenge? You want to ka matlab nahin you have to", continues the mother.
While the young woman, with her ICICI credit card, books tickets for her, online.
As the older woman takes a peek at the screen, she is pleasantly surprised.
The site downloads and the super reads, 'Haridwar in a week.' As the daughter tries to convince
...the MVO adds "ICICI Credit cards. The power to give your loved ones what they really,
her... really want."
COMPARISON BETWEEN ABN AMRO BANK & ICICI BANK:
ABN AMRO ABN AMROFreedom Mastercard (International Credit Card)
Smart Gold Card Mastercard (International Credit Card)
Minimum Income Eligibility Self - Employed (in Rs. p.a.) 84,000.00 1,50,000.00Salaried (in Rs. p.a.) 84,000.00 1,50,000.00
Fee Details Joining Fees (in Rs.) N.A. 500.00Annual Fees (in Rs. p.a) 595.00 2,000.00Add-On Card Fees (in Rs. P.a) N.A. N.A.
Other Charges Dial a Draft Fee (in Rs.) 100.00 100.00Over Limit Fees (in Rs.) N.A. N.A.
Credit Details Interest Rate (% p.m) 2.89 2.49Effective Interest Rate Per Annum (in %) N.A. N.A.Maximum Credit Period in Days 50 50Minimum Payment Due 200.00 200.00Late Payment Charges 2.89 2.49
Cash Advance Details Transaction Fee 100.00 100.00Interest Rate (% p.m) 2.5 2.5Cash Advance (% of the credit limit) 30 30Maximum Withdrawal per day (in Rs.) N.A. N.A.
Air accident Cover (in Rs.) 6,00,000.00 15,00,000.00General Accident Cover (in Rs.) 1,00,000.00 5,00,000.00Household Insurance (in Rs.) N.A. N.A.Baggage Lost (in Rs.) N.A. N.A.Baggage Delayed (in Rs.) N.A. 3,000.00Credit Shield on death (in Rs.) 15,000.00 40,000.00Purchase Protection Cover (in Rs.) 20,000.00 50,000.00Additional Insurance Available 5000 10000
Special Features
3.5 % discount on domestic tickets, 6% discount on international tickets, Banlance Transfer Facility @ 1.49 % pm, Flexilimit, Active Alerts, Year End Summary Statement
3.5 % discount on domestic tickets, 6% discount on international tickets, Banlance Transfer Facility @ 0.99 % pm, Flexilimit, Active Alerts, Year End Summary Statement
Insurance Air accident Cover (in Rs.) 3,00,000.00 6,00,000.00 15,00,000.00
General Accident Cover (in Rs.) 1,00,000.00 2,00,000.00 5,00,000.00
Household Insurance (in Rs.) N.A. 50,000.00 1,00,000.00
Baggage Lost (in Rs.) 25,000.00 N.A. 25,000.00Baggage Delayed (in Rs.) N.A. N.A. N.A.
Credit Shield on death (in Rs.) 10,000.00 25,000.00 50,000.00
Purchase Protection Cover (in Rs.) 10,000.00 20,000.00 40,000.00
Additional Insurance Available N.A. N.A. N.A.
Special Features N.A. N.A. N.A.
CAR LOANS FROM ABN AMRO BANK:
Today if you are looking at a brand new car, then it does make good business sense
to consider a car loan. Not an ordinary car loan with complex formalities and
intimidating requirements but an ABN AMRO Car Loan. A loan that works much
like your dream car: fast, cost-efficient and user-friendly.
ABN-AMRO BANK has also introduced its Car Loans scheme in which it
provides loans for three different categories of cars:
Standard
Premium
Luxury
SEGMENTATION OF CARS:
Standard Cars Premiun Cars Luxury Cars
MARUTI800
MARUTIZEN
MARUTIGYPSY
MARUTIOMNI
MARUTIWAGONR
FIATUNO
AMBASADORNOVA/ISUZU
DAEWOOMATIZ
HYUNDAISANTRO
TATAINDICA
MARUTIESTEEM
MARUTIBALENO
MARUTI1000
FIATSIENNA
TATASIERRA
TATASUMO
TATASAFARI
TOYOTAQUALIS
DAEWOOCIELO
EXECUTIVE
DAEWOONEXIA
OPELASTRA
OPELCORSA
MAHINDRAARMADA
FORDIKON
HYUNDAIACCENT
MITSUBISHILANCER
HONDACITY
MERCEDES CAR
THE PRICING STRATEGY:
The Car loans are designed such that they have easy and convenient
EMI’s i.e. Equated Monthly Installments. A certain amount of loan is
given according to the credit history of the customer and with respect to
the EMI scheme he is willing to adopt. Thus, for instance, for a Qualis,
the scheme is:
EMI for 5 years: 10,311/-
Loan Amount: 4,61,000/-
And for Alto Lx:
EMI for 5 years: 5,915/-
Loan Amount: 2,51,000/-
There are essentially 2 payment systems:
a. Step –up – where the EMI increases every year by a certain interest
rate and therefore the amount paid increases gradually.
b. Step – Down – Where the EMI reduces every year by a certain
interest; thus the customer has to pay larger amounts initially.
Loan Amount:
The car loans are offered to individuals as well as companies.
The loans cover up to 90% of ex-showroom price for new cars and 75% of
value (as determined by bank) on used cars.
The minimum loan amount is Rs. 50,000. The maximum loan amount is
based on a percentage of car value as given below:
Interest Rates:
Interest rates for standard cars vary from 17% to 18%.
Interest rates for premium cars varies from 16.75% to 18%
Maximum loan amounts as a percentage of the ex-
showroom price of the new car
Eligible cars
Up to 90%
Maruti 800, Maruti Esteem 1300 cc, Maruti Zen, Maruti Omni Van, Maruti Baleno, Maruti WagonR, Maruti Alto, Fiat Siena, Toyota Qualis, Daewoo Matiz, Mercedes Benz E Class, Opel Astra, Opel Corsa, Ford Ikon, Hyundai Santro, Hyundai Accent, Mitsubishi Lancer, Tata Indica, Honda City
Up to 85% Maruti Baleno Altura, Fiat Uno, Fiat Siena Weekend
Up to 80% Tata Safari, Daewoo Cielo, Daewoo Nexia, Mahindra Bolero
Up to 75% Maruti Gypsy, Ambassador Nova Isuzu, Tata Siera, Tata Sumo, Mahindra Armada
Up to 70% Mercedes Benz S Class
ABN Amro offers 2 payment plans. The EMI you pay is a function of the
loan amount, the payment plan, the tenure and the applicable interest rate. It
may be as low as Rs. 2325/- per lac on a 5 year loan, or Rs. 3425/- per lac
for a 3 year loan, depending on the applicable interest rate.
The details of which are as follows:
[A] ARREARS (CLASSIC)
EMI starts from the first of the month following the disbursal month for loans
booked between 1st and 15th of a month. EMI starts from the 16th of the
month following the disbursal month for loans booked between 16th and 31st
of a month.
[B] ADVANCED EMI
(i) Variant 1: Customer pays the 1st EMI in advance along with the loan
application to the dealer. The advantage being EMI per lakh, being less than,
the arrears scheme.
(ii) Variant 2: Customer pays the 1st EMI in advance along with the loan
application to the bank. In this case the EMI per lakh being the same as the
arrears scheme.
[C] PREPAYMENT OPTIONS
(i) Partial Pre-payment: This facility allows the customer to pay off the loan
partially. There is no lock-in period for the loan amount. This option is allowed
once every calendar year. There are zero prepayment charges for payment upto
25% of the loan outstanding. This facility is allowed from the beginning of the
loan.
(ii) Full Pre-payment: This facility allows customers to fully prepay the loan on a
minimal prepayment charges from day 1. A charge of 4% is levied on 75% of
the outstanding balance, provided the 25% prepayment facility has not been
availed in that calendar year. No charges are levied on complete prepayment
after three (3) years (provided all EMIs are paid satisfactorily)
At the time of disbursing your loan, the Bank collects EMI payments in the
form of post-dated cheques or Standing Instructions (only for ABN AMRO
Savings or Current Account customers with a minimum relationship of 6
months) or Electronic Clearing System (ECS) instructions on other bank
accounts.
Payment plans on ABN AMRO Car Loans, can be customized by our
representative to suit your requirements. You can choose from Arrears and
Advance installment plans. Salaried and Self-Employed individuals can also
opt for alternate payment plans in which the monthly installments either
grow, each year (Step-up payment plan) or decline each year (Step-down
installment plan).
Tenor:
Options are available where you can pay back the loan by way of monthly installments
spread over a period ranging from 1 year to 5 years.
Eligibility:
Salaried Individual: Gross Annual Income should be above Rs. 60,000 for
standard cars and above Rs.1, 00,000 for premium cars.
Self Employed: Individual If you are a proprietor, a partner, a professional,
or a director, with a Gross Annual Income of Rs. 60,000 for standard cars
and above Rs.1, 00,000 for premium cars, you are eligible to apply for an
ABN Amro Car Loan.
Partnership Firm: Gross Annual Income should be above Rs. 60,000 for
standard cars and above Rs.1, 00,000 for premium cars.
Private or Public Limited Company: Private Limited Companies should
have been in existence for at least 2 years and have a minimum PAT of Rs.
60,000 for a standard car or a minimum PAT of Rs. 1,00,000 for a premium
car. Public Limited Companies should have been in existence for at least 2
years and have a minimum PAT of Rs.60, 000 for a standard car or a
minimum PAT of Rs.1, 00,000 for a premium car.
Documentation:
For Salaried Individuals / Self employed / Sole proprietorship: -
Application Form
Photograph
Bank signature verification
Income Proof (Any one of the following)
ITR (Income tax returns)
Form 16
Salary Slip
Appointment letters
Identity Proof (Any one of the following)
Laminated Driving License
Voters' Identity Card
Passport
PAN Card
Photo Credit Card/
Photo Ration Card
For partnership companies: -
Identity Proof: Certified true copy of partnership deed evidencing 3 years
of existence.
Income proof: Certified true copy of audited balance sheet and profit and
loss statement for last 2 years or CPA certified true copy of unaudited
balance sheet and profit and loss statement along with IT returns.
For Limited companies: -
Identity Proof: Certified true copy of memorandum and articles of
association and copy of certificate of incorporation.
Income Proof: Audited balance sheet and profit and loss statements for the
latest and previous financial year.
THE PROMOTIONAL STRATEGY:
ABN has a relatively well-developed promotional strategy for the Car loans
product.
Aggressive mailing activities for specific customers are presently carried out.
Various auto loan melas and road shows have been organized in the major cities of
the country where information was distributed.
The promotional strategy is quite uniform through the various regions and the
message is kept consistent. There is however lesser centralized promotion of ABN
as a bank and this factor needs to be worked on.
THE PROCESS:
The process of getting a loan along with the approval takes
approximately 3-4 days at the most. The documents of the customer go
through a procedure of verification.
Stepwise description is given below:
Customer goes to the external agency
External Agency receives the application form, income documents,
photos, and home office address.
Information goes to the credit department – Decision takes place here.
The bank informed of approval
Amount sanctioned
Central processing agency informed
Bank processing of the loan
Loan boarded
Cheque goes to direct sales agents
Car handed over to customer
THE ADVERTISING STRATEGY:
This has been a very aggressive realm in ABN’s business. Numerous ads
are seen in various newspapers such as Financial Express, TOI, ET, HT,
etc., generally, the green and yellow ABN theme is portrayed, adding to
the ABN identity as a distinct entity.
The medium used by ABN is essentially the newspapers and street lamp posters
that exhibit the ABN logo.
The ads generally feature the direct sales agent linked to ABN, the
various cars under the scheme and the scheme details specifically: The
target being the middle and upper classes. The ad dated 8 th May 01
features the Car loan scheme in conjunction with holiday packages,
discounts etc., and adding further value to the overall car loan concept.
The advertising strategy and the scheme need to be even more attractive
and creative as the environment is highly competitive.
CUSTOMER CARE
AND
CUSTOMER RELATIONSHIP MANAGEMENT (CRM):
CRM is today by far one the most relevant issues for all the banks. ABN
too has laid great focus on CRM and on building long-term relation with
its customer. The aim is to personalize the Car loans services so as to
allow every man’s dream of owning a car come true. This is not all;
various value addition schemes are introduced by ABN in order to pass
on the benefits to the customers.
Therefore, they don’t just get a Car loan, but get a package deal so to
speak! Constant newsletter and feedback form are mailed to existing
customer in order to build loyalty.
RELEVANCE OF PLACE/LOCATION:
It is relevant to be at the right place, at the right time, ABN believes in this theory
as well! The locations of the Car Loan stalls and the Branches are such that it is
easily accessible for the public to map the benefits of the schemes offered. The
important market areas are generally selected for the car loan melas and road
shows. Other than loans are available in 7 branches, which are, spread throughout
the country. These include:
Mumbai,
Delhi,
Calcutta,
Chennai,
Pune, and
Baroda.
For salaried persons, ABN Amro bank has two categories of eligible employers on
which a person is given loan and the eligibility varies,
Category A and
Category B.
CAR LOANS FROM HDFC BANK:
HDFC Bank offers car finance for all the following categories of cars: Standard
Premium
Luxury
PRODUCT & ITS OFFERINGS:
The car loans are offered to individuals as well as companies.
The loans cover up to 90% of ex-showroom price for new cars as well as
used cars (valuation based on bank recommendations).
Options are available where you can pay back the loan by way of
monthly installments spread over a period ranging from 1 year to 5 years.
ELIGIBILITY:
For salaried individuals:
Minimum age of Applicant: 21 years
Maximum age of Applicant at loan maturity: 58 years
Minimum employment: 1 year in current employment and minimum
2 years of employment
Minimum Annual Income: Rs 100000 net annual income
Telephone: Must at residence
For self employed:
Minimum age of Applicant: 21 years
Maximum age of Applicant at loan maturity: 65 years
Minimum employment: Atleast 3 years in business
Minimum Annual Income: Net profit Rs. 60000 p.a for standard cars
and Rs.100000 p a for mid-sized and premium cars
Telephone: Must at residence
For partnership firms:
Minimum Income: Net profit Rs. 60000 p.a for standard cars and
Rs.100000 p a for mid-sized and premium cars
Minimum turnover: Turnover Rs 4.5 lacs
Telephone: One phone at least at business and at residence of the
loan executing partner
For private limited company:
Minimum Income: Net profit Rs. 60000 p.a for standard cars and
Rs.100000 p a for mid-sized and premium cars
Minimum turnover: Turnover Rs 4.5 lacs Telephone: One phone at
least at business premises
For public limited company:
Minimum Income: Net profit Rs. 60000 p.a for standard cars and
Rs.100000 p a for mid-sized and premium cars
Minimum turnover: Turnover Rs 4.5 lacs
Telephone: One phone at least at business premises
DOCUMENTATION:
For salaried individuals:
Proof of Identity:- Passport copy, PAN Card, Voters Id car, driving
Headline: Now you don't have a car. Now you do.Subhead: -Body copy: At HDFC Bank, we understand you need a loan without hassles and delays. We approve Car loans, Personal loans, Two-wheeler loans and loans against most investments, Relief Bonds, share as well as insurance policies in almost no time. And if you're in a real hurry, just log onto www.hdfcbank.com for e-instant loan approvals in 60 seconds flat. We take care of all your dreams by financing every loan you need.Baseline: We understand your worldAGENCY: EuroRSCG.com
CAR LOANS FROM ICICI BANK:
ICICI offers car finance for new as well as old cars.
PRODUCT & ITS OFFERINGS
LOAN AMOUNT:
The car loans are offered to individuals as well as companies.
The loans cover up to 90% of value of the car. One can avail upto 90% of
value of the car one wants to purchase through the loan.
TENURE:
Options are available where you can pay back the loan by way of monthly
installments spread over a period ranging from 1 year to 5 years.
The repayment due dates for every monthly installment are the 1st or the 7th
of every month and payment would be collected through post dated cheques.
ELIGIBILITY:
Salaried Individual:
Gross Annual Income should be above Rs. 1,00,000
Self employed:
Individual If you are a proprietor, a partner, a professional, or a
director, with a Gross Annual Income of above Rs.60,000, you are
eligible to apply for an ICICI Car Loan.
Partnership Firm:
The firm should have a minimum PAT (Profit After Tax) of Rs.
60,000 for a standard car or minimum PAT of Rs 1,00,000 for a
premium car.
Private or Public Limited Company:
Private Limited Companies should have been in existence for at least
2 years and have a minimum PAT of Rs. 60,000 for a standard car or
a minimum PAT of Rs. 1,00,000 for a premium car.
Public Limited Companies should have been in existence for at least 2
years and have a minimum PAT of Rs. 1,00,000 for a standard or a