Vedansh Project

Project Report

Credit Card and Loan

Assessment

Submitted by

Vedansh Jain

Roll No. JGNPGDM0856

PGDM First Batch

(2008-2010)

Submitted to

1

Jagannath Institute of Management

Studies

48/4 Knowledge Park III, Greater

Noida,U.P

Acknowledgement:

“For any successful work, it owes its thanks to many”

Summer training is one of the most vital and active part

of the curriculum of management students. I did the

work as a management trainee at AXIS Bank.

Hard work, knowledge, dedication & positive attitude all

are necessary to do any task successfully but one

ingredient which is also very important than others and

at times more important than others is cooperation &

guidance of experts and experienced person.

Firstly I would like to extend my heartfelt gratitude to

Mr. Navneet Ralli the Branch Manager, for his

guidance throughout the project. Without his support

and cooperation I would have failed in my endeavours

and targets in the summer training.

I emphatically express the regards and gratitude

towards my speculative guide Mr. Shakti Singh

2

Rathore (BSM), Mr. Kapil Singh Shekhwat and Mr.

Om Thanvi For his expert and invaluable guidance,

constant encouragement, and constructive criticism to

accomplish such laborious and exhaustive work timely

and perfectly.

I avail the opportunity to thanks Mr. Lokesh Agarwal,

Mr. Vishal Sharma and Mr. Hasmukh who helped to

ease my burden of works and extended their helping

hands during my training.

I would also like to thank all the Staff of Axis Bank,

Jaipur for their invaluable suggestion and cooperation

to complete my project successfully.

CONTENTS

Serial No.

Particular Page No.

1 Candidate Declaration 5

2 Certificate From Organisation 6

3 Executive Summary 7

4 Banking In India: Overview 9

Nationalized Bank In India 12

Private Sector bank In India 13

5 About AXIS Bank 14

Retail Banking 19

Corporate Banking 19

Financial Performance 21

6 Easy Credit Card 22

3

Variants 23

Pricing 24

Process 28

Documentation 31

7 Loan Assessment 32

1. Home Loan 33

Documentation 34

Interest Rate 35

2. Personal Loan 36

Normal Salaried Individual 36

Salaried Professional 37

Salaried Doctor 38

Documentation 39

Interest Grid 39

Serial No.

Particular Page No.

3. Loan Against Property 40

Salaried Individual 40

Professional 41

Self Employed Individual 42

Documentation 43

Interest Grid 45

4. Auto Loan 46

Category Grid 46

Salaried Employee 47

Self Employed 48

Partnership 49

Private and public limited 50

4

company

Documentation 51

Interest Rate 53

5. Agriculture Loan 54

Commodity Power-(Warehouse Receipt financing)

54

Agricultural Gold Loan ‘Power Gold’

60

Power Gold Plus 64

Kisan Power 65

Direct Financing to Farmers for Cattle Loans through Dairies/ Cooperatives

76

Direct Financing to Farmer Under Contract Farming

81

6. Education Loan 868 Abbreviations and Acronyms

(Glossary)88

9 Appendix 91

Candidate's Declaration

I hereby declare that the project report titled “Credit

Card and Loan Assessment” is prepared during

completion of training of 45 days on 30th June, 2009

and it is an authentic record of my work carried out

5

under the guidance of Mr. Shakti Singh Rathore,

Axis Bank Jaipur.

VEDANSH JAIN Date: June 30, 2009

Roll No. JGNPGDM0856 Place: Jaipur

PGDM First Batch

(2008-2010)

Certificate

TO WHOMSOEVER IT MAY CONCERN

6

This is to certify that the above declaration made by

MR. VEDANSH JAIN, PGDM (Finance)-First Batch,

Jagannath Institute of Management Studies, Greater

Noida, U.P., for the successful completion of 45 days

summer training at AXIS Bank, Jaipur, and preparation

of project report titled “Credit Card and Loan

Assessment” is true and fair to the best of my

knowledge and belief.

Mr. Shakti Singh Rathore Date: June

30, 2009

Authorised Signatory Place: Jaipur

Axis Bank Jaipur.

Executive Summary:

7

Introduction:

I have done my training from Axis Bank, Jaipur Branch. I

learned there working and functioning of the bank. Axis

bank is one of the fastest growing banks in India and

has extremely competitive and profitable banking

franchise. Axis bank is the first new generation private

sector bank to be established in India under the overall

reform programme initiated by Government of India in

1991.Axis bank started its operation from 1994.

Objective:The main objective of undergoing training of 6 weeks

(15th May, 2009 to 30 june, 2009) is to:

Understand how banking activities actually takes

place.

To gain an insight and in depth knowledge about

banking products.

To know how the other services provided by bank to

its customer.

To learn about corporate banking culture in India.

Research Methodology:The method adopted to carry out this report was based

on both the primary and secondary sources.

Primary sources:

8

Interaction with the existing employees and deputy

manager.

Personal interaction with the customers visiting to the

bank.

Secondary sources:

Manuals of the bank.

Websites

Journals

Circulars

Annual Report

Learning and Conclusions:

It was a great opportunity to gain an insight about

various activities that takes place in the bank.

I came to know what banking is all about.

About AXIS Bank.

The kind of products and services are provided by

AXIS Bank.

This training increased my confidence level and it

was a great opportunity to learn about corporate

culture and etiquettes.

It was a great opportunity to develop persuasion skills

and communication skills.

9

Banking In India: Overview:

Banking in India originated in the first decade of 18th

century. The first banks were The General Bank of India,

which started in 1786, and Bank of Hindustan, both of

which are now defunct. The oldest bank in existence in

India is the State Bank of India, which originated in the

"The Bank of Bengal" in Calcutta in June 1806. This was

one of the three presidency banks, the other two being

the Bank of Bombay and the Bank of Madras. The

presidency banks were established under charters from

the British East India Company. They merged in 1925 to

form the Imperial Bank of India, which, upon India's

independence, became the State Bank of India. For

many years the Presidency banks acted as quasi-central

banks, as did their successors. The Reserve Bank of

India formally took on the responsibility of regulating

the Indian banking sector from 1935. After India's

10

independence in 1947, the Reserve Bank was

nationalized and given broader powers.

Early History:The first fully Indian owned bank was the Allahabad

Bank, established in 1865. However, at the end of late-

18th century, there were hardly any banks in India in

the modern sense of the term. The American Civil War

stopped the supply of cotton to Lancashire from the

Confederate States. Promoters opened banks to finance

trading in Indian cotton. With large exposure to

speculative ventures, most of the banks opened in India

during that period failed. The depositors lost money and

lost interest in keeping deposits with banks.

Subsequently, banking in India remained the exclusive

11

Other Nationalized Banks

Other Nationalized Banks

RESERVE BANK OF INDIACentral Bank and supreme monetary

authority

RESERVE BANK OF INDIACentral Bank and supreme monetary

authority

Non Scheduled Banks

Non Scheduled Banks

Foreign Banks

Foreign Banks

Private Sector Private Sector

SBI & Associates

SBI & Associates

Regional Rural Banks

Regional Rural Banks

Urban Cooperatives

Urban Cooperatives

State Cooperatives

State Cooperatives

Scheduled Banks

Scheduled Banks

Cooperative

Cooperative

Public Sector Public Sector

Commercial

Commercial

domain of Europeans for next several decades until the

beginning of the 20th century. Foreign banks too

started to arrive, particularly in Calcutta, in the 1860s.

The

Comptoire d'Escompte de Paris opened a branch in

Calcutta in 1860, and another in Bombay in 1862;

branches in Madras and Pondichery, then a French

colony, followed. Calcutta was the most active trading

port in India, mainly due to the trade of the British

Empire, and so became a banking centre.

The Bank of Bengal, which later became the State Bank of India.

Around the turn of the 20th Century, the Indian

economy was passing through a relative period of

stability. Around five decades had elapsed since the

Indian Mutiny, and the social, industrial and other

infrastructure had improved. Indians had established

small banks, most of which served particular ethnic and

religious communities.

The presidency banks dominated banking in India.

There were also some exchange banks and a number of

Indian joint stock banks. All these banks operated in

different segments of the economy. The exchange

12

banks, mostly owned by Europeans, concentrated on

financing foreign trade. Indian joint stock banks were

generally under capitalized and lacked the experience

and maturity to compete with the presidency and

exchange banks. This segmentation let Lord Curzon to

observe, "In respect of banking it seems we are behind

the times. We are like some old fashioned sailing ship,

divided by solid wooden bulkheads into separate and

cumbersome compartments."

By the 1900s, the market expanded with the

establishment of banks such as Punjab National Bank,

in 1895 in Lahore and Bank of India, in 1906, in Mumbai

- both of which were founded under private ownership.

Punjab National Bank is the first Swadeshi Bank

founded by the leaders like Lala Lajpat Rai, Sardar Dyal

Singh Majithia. The Swadeshi movement in particular

inspired local businessmen and political figures to found

banks of and for the Indian community. A number of

banks established then have survived to the present

such as Bank of India, Corporation Bank, Indian Bank,

Bank of Baroda, Canara Bank and Central Bank of India.

13

Nationalized Banks in India:

Banking System in India is dominated by nationalized

banks. The nationalization of banks in India took place

in 1969 by Mrs. Indira Gandhi the then prime minister.

The major objective behind nationalization was to

spread banking infrastructure in rural areas and make

available cheap finance to Indian farmers. Fourteen

banks were nationalized in 1969. Before 1969, State

Bank of India (SBI) was the only public sector bank in

India. SBI was nationalized in 1955 under the SBI Act of

1955. The second phase of nationalization of Indian

banks took place in the year 1980. Seven more banks

were nationalized with deposits over 200 crores.

List of Public Sector Banks in India is as follows:

➢ Allahabad Bank ➢ State Bank of India (SBI)➢ State Bank of Indore ➢ State Bank of Mysore➢ State Bank of Patiala ➢ State Bank of Saurashtra

14

➢ State Bank of Travancore ➢ Syndicate Bank➢ UCO Bank ➢ Union Bank of India➢ United Bank of India s ➢ Vijaya Bank➢ Andhra Bank ➢ Bank of Baroda➢ Bank of India ➢ Bank of Maharashtra➢ Canara Bank ➢ Central Bank of India➢ Corporation Bank ➢ Dena Bank➢ Indian Bank ➢ Indian Overseas Bank➢ Oriental Bank of Commerce ➢ Punjab and Sind Bank➢ Punjab National Bank ➢ State Bank of Bikaner & Jaipur➢ State Bank of Hyderabad

Private Banks in India:

All the banks in India were earlier private banks. They

were founded in the pre-independence era to cater to

the banking needs of the people. But after

nationalization of banks in 1969 public sector banks

came to occupy dominant role in the banking structure.

Private sector banking in India received a fillip in 1994

when Reserve Bank of India encouraged setting up of

private banks as part of its policy of liberalization of the

Indian Banking Industry. Housing Development Finance

Corporation Limited (HDFC) was amongst the first to

15

receive an 'in principle' approval from the Reserve Bank

of India (RBI) to set up a bank in the private sector.

Private Banks have played a major role in the

development of Indian banking industry. They have

made banking more efficient and customer friendly. In

the process they have jolted public sector banks out of

complacency and forced them to become more

competitive.

List of Private Sector Banks in India is as follows:

Bank of Rajasthan ➢Bharat Overseas Bank

Axis Bank ➢Catholic Syrian Bank Centurion Bank of Punjab ➢Dhanalakshmi

Bank Federal Bank ➢HDFC Bank ICICI Bank ➢IDBI Bank IndusInd Bank ➢ING Vysya Bank Jammu & Kashmir Bank ➢Karnataka Bank Karur Vysya Bank ➢Kotak Mahindra

Bank SBI Commercial and International Bank ➢South

Indian Bank United Western Bank ➢ YES Bank

16

17

About AXIS:

Start on 1994

On July 2007 UTI Bank rebrand as Axis Bank

Promoters:Unit Trust Of India (UTI)

Life Insurance Corporation (LIC)

General Insurance Corporation (GIC)

National Insurance Company Limited

New India Assurance Company Limited

The Oriented Insurance Company Limited

United India Insurance Company Limited

Capitalization:359 crore

Public Holding = 57.60%

Registered Office:Ahemdabad

Central Office:Mumbai

18

Total Branches:827

ATM:3595

Bank Strengths:Retail Banking

Corporate Banking

Directors:Shri N.C. Singhal Director

Shri J.R. Varma Director

Dr. R.H. Patil Director

Smt. Rama Bijapurkar Director

Shri R.B.L. Vaish Director

Shri M.V. Subbiah Director

Shri Ramesh Ramanathan Director

Shri K. N. Prithviraj Director

Auditors:M/s. S. R. Batliboi & Co. Auditors Chartered Accountants

Registrar and Share Transfer Agent:M/s. Karvy Computershare Private Limited

19

Competitors:Private Sector competitors:

HDFC

ICICI

Public Sector competitors:SBI

PNB

Profile:Axis Bank is one of the fastest growing banks in the

country and has an extremely competitive and

profitable banking franchise evidenced by:

Comprehensive portfolio of banking services include

Corporate Credit, Retail Banking, Business Banking,

Capital Markets, Treasury and International Banking.

The Position as on 31st March 2009 was as under: -

Balance Sheet Size Rs 1,47,722 crore

Total Deposits Rs 1,17,374 crore

Net Advances Rs 81,557 crore

Investments Rs 46,330 crore

Net NPA 0.35%

20

Capital Adequacy Ratio 13.69% %

Axis Bank has in place a sound technological platform:Sound technological platform with centralized database

and operations enabling 24*7*365 ‘Anywhere Banking’,

in order to render the best customer service to its 5.5

million customer base.

Mission and Values: Customer Service and Product Innovation tuned to

diverse needs of individual and corporate clientele.

Continuous technology up gradation while

maintaining human values.

Progressive globalization and achieving international

standards.

Efficiency and effectiveness built on ethical practices.

Customer Satisfaction through providing quality

service effectively and efficiently.

"Smile, it enhances your face value" is a service

quality stressed on Periodic Customer Service Audits.

Maximization of Stakeholder value.

Success through Teamwork, Integrity and People.

21

Retail Banking:The Bank continued with its thrust on customer

segmentation in the retail liabilities business to

spearhead growth during the financial year 2008-09.

Savings Bank deposits grew to Rs. 25,822 crores on

31st March 2009 from Rs. 19,982 crores as on 31st

March 2008 showing a year on year growth of 29%.

Corporate Banking:The Business Banking Department (Erstwhile

Institutional Business Department) was set up in the

year 2000, with the objective of having a special cell to

serve the institutional and corporate clientele of the

Bank. Business Banking initiatives revolve around

transaction banking services to garner Business Current

Accounts, Cash Management Service mandates,

Government Business - Collection & Payment Services.

As a natural corollary, scope of the business was

extended this year to Business loans for Small

Businesses so that all product and services to small

22

business enterprises are comprehensively made

available.

The Department presently focuses on the four

broad areas through the respective Business

Groups, as under:

Business Current Accounts

Business Assets

Cash Management Services

Government Business

Corporate Credit:Current Account deposits grew by 24% yoy, from Rs.

20,045 crores as at end March’08 to Rs. 24,822 crores

as at end March’09. The daily average Current Account

balances over the year grew by 24% yoy. The Corporate

Credit portfolio of the Bank comprising advances to

large and midcorporates grew by 68.33% to Rs. 29,026

crores from Rs. 17,244 crores a year ago. This includes

advances at overseas branches amounting to Rs. 5,381

crores (equivalent to USD 134 million) comprising in

main the portfolio of Indian corporates and their

subsidiaries, as also trade finance. Credit exposures are

taken based on risk analyses and mitigation measures,

with proposals being subjected to critical scrutiny by

23

the Bank's Risk Department. Efforts are made to

constantly upgrade the skills required for faster

turnaround of credit proposals and structuring of

financial products. In addition to working capital loans,

the Bank also takes long-term exposures to

infrastructure and manufacturing projects set up by

reputed industry groups. Relationship groups in the

Bank are organised with an industry sector focus for

better evaluation of specified risks. The credit policy of

the Bank has also put in place ceilings on exposures to

various industries with a view to containing

concentration risk and facilitating portfolio

diversification.

Financial Performance: Profit after tax up 69% to Rs.1,815.36 crores.

Net Interest Income up 43% to Rs.3686.21 crores.

Other Income up 61% to Rs.2,896.88 crores.

Fee Income up 64% to Rs.2,447.35 crores

Deposits up 34% to Rs.1,17,374 crores.

24

Demand Deposits up 37% to Rs.50644 Crores.

Advances up 61.79% to Rs.81,557 crores .

Retail Assets up 18% to Rs.16,052 crores.

Network of branches and extension counters

increased from 827.

Total number of ATMs 3595.

Net NPA ratio as a percentage of net customer assets

down to 0.35% 0.36% from 0.36 %.

Earning per share (Basic) increased from Rs.31.31 to

Rs50.27.

Proposed Dividend up from 45% to 60%.

Capital Adequacy Ratio stood at 13.69% as against

the minimum regulatory norm of 9.26%.

**********************

Easy Credit Card:

What is Easy Credit Card?A Credit Card that is ...

25

Easy for customers to get!

Easy for us to sell!

Why is it “Easy” for the Customer? Flexible Credit Limit (Up to 80% of the FD amount)

High Cash Withdrawal Facility

Minimum Documentation (No Income Proof/KYC

required)

Fast Delivery of the Card

Substantially Lower Interest Rate of 1.95% p.m.

Guaranteed Approval

Free Credit Period of 20-50 days

Comprehensive Insurance

Attractive Reward Points

Other benefits of a regular credit card

Easier than Other Modes of Payment:

Easier than Other Credit Cards Guaranteed Approval

26

No Income Proof required Lower interest rate Credit Limit of choice Higher Cash withdrawal facility

Easier than Debit Cards Interest free credit period of up to 50 days Higher Insurance Package Ease of Online & MOTO transactions

Easier than O/D against FD Interest free credit period of up to 50 days Reward Points Complimentary Insurance Record of transactions

Easier than Cash Convenience of Plastic Complimentary Insurance Reward Points Record of transactions

Variants:

Available in three variants:

27

Easy Platinum Premium (In sourcing locations only)

Easy Platinum

Easy Gold

Pricing:

TypeJoining

FeeAnnual

Fee

Annual Fee Waiver

for Year 2

Platinum

Premium 5,000 1,000Customer

Spends

> Rs.2,00,000

in Year 1

Platinum 1,000 500

Customer

Spends

> Rs.2,00,000

in Year 1

Gold Nil

100

(Two

Years

onwards)

Customer

Spends

> Rs. 50,000 in

One Year

28

* Annual Fee can be adjusted against Reward Points

Easy Platinum Premium:

Platinum Comprehensive Insurance Cover

Fuel savings of 2.5% at All Petrol Pumps

Attractive Rewards Program

Free Espirit watch worth Rs.6,000Attractive

Platinum Preferential Features

Chip Card for Additional Security

Complimentary Priority Pass Membership

International Concierge Services

Exciting shopping offers

Platinum Standard Features

Low Interest Rate of 1.95% p.m.

Credit Limit of Choice

High Cash Withdrawal Limit of 40% of Credit Limit

Balance Transfer Options

29

Easy Platinum:

Comprehensive Insurance Cover

Fuel savings of 2.5%at ALL Petrol Pumps


Platinum Preferential Features: Chip Card for Additional Security

Complimentary Priority Pass Membership

International Concierge Services

Exciting shopping offers

Standard Features: Low Interest Rate of 1.95% p.m.




30

Easy Gold:

Comprehensive Insurance Cover

Fuel savings of 2.5%at ALL Petrol Pumps


Standard Features:

Low Interest Rate of 1.95% p.m.




31

Process Simplified:

Step 1

Crédit Card Application Form

No Only One Single Application Form

Letter of Lien

Addendum to Credit Card Application Form

Draft Letter

Step 2

Double KYC NoSeparate KYC for Easy Credit Card

Step 3

FD retained at the branchNo

FD receipt to remain with the customer

Only photocopy to be attachedLien marked centrally on Finacle

Step 4

Customer signature on form to be verified by Branch heads

NoCustomer signature to be verified by Branch head/ BSO/BSM

Step 5

Card dispatched to Branch No

Sent to customer in Courier serviceable areas

32

Sent to branch in Courier non-serviceable areas

Application Processing- Existing FD Customers:

Application Pickup Easy Credit Card App Form filled

Copy of FD receipt attached

No Additional Documents

At Branch Application Signed-off by Branch head/ BSO / BSM

Lien Stamp on FD by any Branch official–Original

returned to customer

CC-APU Centralized Lien marking

Data Entry , Card & Limit Setup

No CIBIL, No FV, No TV

Dispatch Direct to customer in Courier serviceable areas

To branch in Courier non-serviceable areas

33

Application Processing -New FD Customers:

Application Pickup

Easy Credit Card App Form filled

FD Form filled with KYC & PAN only by BDE/Any

Branch Staff

At Branch Sign-off by Branch head/ BSO/ BSM

CPU-Mumbai FD Data Entry

FD Account No. entered on Easy Card Application

Form

CC-APU Centralized Lien marking

Data Entry , Card & Limit Setup

No CIBIL, No FV, No TV

Dispatch

34

FD & Card dispatched together

Direct to customer in Courier serviceable areas

To branch in Courier non-serviceable areas

Documentation:

Existing FD Customers: Easy Card Application Form

Photocopy of FD Certificate with Notification of Lien

as follows: “Lien marked for Issuance of Easy Credit

Card” To be written, signed & stamped by any Branch

Official on the front side of the FD receipt

FD Certificate with notification returned to customer

Most Important Document (MID)

New FD Customers: Easy Card Application Form

Duly Completed FD Application Form (ONLY by

BDE/Any Branch Staff)

Most Important Document (MID)

35

************************

Loan Assessment:

Types of Loan:

Home loan

Personal Loan

Loan Against Property

Auto loan

Agriculture Loan

Education Loan

36

Home Loan:

CriteriaSalaried Individual

Professionals

Self Employed Individuals

Min. work exp (Years)

2 (3 if current employment <1

year)3

Min net income (Rs.)

15000pm 1.50 lacs pa

Min ~ Max age (Years)

>24 ~ <= than superannuation

at loan termination

>24 ~ <= 65 at loan termination

Min ~ Max Tenor

(Months)Maximum 240

Maximum 240

Maximum 240

Maximum LTV 80%

Clubbing of Income

Allowed for spouse only

Pre NIL

37

payment penalty

Processing fee

1% of loan amt + 10.30% Service Tax as applicable

Other Products / Variants

Takeover of existing HL from other financier (Balance Transfer)

Allowed

Refinance Option

Allowed for properties purchased in last 6 months

Documents required for Home Loan:

Proof of Identity, Signature & Age:

Passport Voter's Card Driving License PAN card Photograph

Proof of Residence:

Ration Card Passport Latest Electricity Bill Latest Telephone Bill Latest Credit Card Bill.

Proof of Income:

38

Latest 3 salary slip showing all deductions IT Returns Computation of income Balance Sheet and P/L A/c for the last 2 years

certified by a C.A.

Bank Statement:

Last 6 months where salary/income is credited

Proof of Qualification:

Degree / Diploma - proof of professional qualification

Interest Rate:

Home loan amount Applicable rate of interest

Up to Rs. 30 Lacks 9.00% p.a

Above Rs. 30 Lacks 9.50% p.a.

Other terms & conditions:

The property should be located within 50 Km radius

of nearest Branch/RAC.

39

Properties under HUF, Properties inherited under

Hindu succession act, Godowns, Factories &

Hospitals, Cinema Halls, Restaurants, Banquet Halls,

and Schools will not be financed under the scheme.

For Purchase of Residential Plots within Municipal /

Government approved layouts only. Agricultural land,

commercial plots, properties under HUF, properties

inherited under Hindu succession act, plots under

litigation and acquisition by Public authorities will not

be financed under plot loan scheme.

Loan against property (LAP) will be offered only

against fully constructed properties.

Personal Loan:

For Salaried Individual:

CriteriaSalaried Individual

Normal

Interest rate as per category

As per category grid

Min. work exp (years) 2

Min net income (Rs. 15,000

40

p.m.)

Min ~ Max age> 21 & < superannuation at loan termination

Min ~ Max loan amt (Rs.)

1.25- 15 lakes (1.25 lakes loan is only available for customers having salary power relationship)

Min ~ Max Tenor (months)

12 ~ 60 (For CAT C and D employees maximum tenor is 48 months)

Security/Collateral/Guarantor

Optional

Banking relationshipsCat A & B - Last 3 months

Cat C & D - Last 6 months

Phone landline / mobile / WLL mandatory

Processing fee 2% of loan amt

Eligibility calculation

Max loan =(Net monthly income - obligations) x Multiplier. Multiplier varies from 5 to 13 depending upon tenure.

Residence Present residence => 6 months

CriteriaSalaried Individual Prof

(MBA, Engineer, Architect, CA, CS, ICWA)

Interest rate as per category As per category grid


Min net income (Rs. p.m.)

15,000

41

Min ~ Max age> 21 & < superannuation at loan termination


1.25 - 15 lakhs (1.25 lakh loan is only available for customers having salary power relationship)


12 ~ 60


Optional

Banking relationshipsCat A & B - Last 3 months

Cat C & D - Last 6 months




Max loan =(Net monthly income - obligations) x Multiplier. Multiplier varies from 5 to 15 depending upon tenure.


Degree / Diploma - proof of professional qualification

Criteria Salaried Doctors

Interest rate as per category

Doctor in Cat B/C/D at a min of MBBS/BDS/ MS/MD = Cat B rate


Min net income (Rs. p.m.) 15,000 (gross)

42

Min ~ Max age >24 and <65 at loan termination


1.25 - 15 lakhs (1.25 lakh loan is only available for customers having salary power relationship)


12 ~ 60


Optional

Banking relationships Last 6 months




Max loan = (Gross monthly salary - obligations) x Multiplier. Multiplier varies from 5 to 15 depending upon tenure.


Proof of Qualification

Degree, Registration with respective state medical councils Or Dentists Association.

Documentation:

Documents Required

Proof of Identity, Signature & Age

Passport/ Voter's Card/ Driving License/ PAN card & Photograph.

Proof of Telephone Bill

Latest bill of landline/ mobile/ WLL stating name of borrower or

43

address of borrower.

Proof of ResidenceRation Card/ Passport/ Latest Electricity Bill/ Latest Telephone Bill/ Latest Credit Card Bill.

Proof of Income

Latest salary slip showing all deductions and Last 2 years Form 16 along with current dated salary certificate

Bank Statement / Pass Book where salary is Credited

Cat A & B - Last 3 months, Cat C & D - Last 6 months

Interest Rate Grid:

Interest Rate Grid

Personal Loans ROI (only Fixed)

Salaried - Cat A 15.00%

Salaried - Cat B 17.00%

Salaried - Cat C 19.00%

Salaried - Cat D 21.00%

Loan against Property:

Criteria Salaried Individual

44

Work Experience (Years)

Min 1 Year If Total Exp 2 Or (3 If Current Employment <1 Yr)

Min Net Income (Rs.)

7500 Per Month

Min ~ Max Age (Years)

>24 ~ <= Than Superannuation At Loan Termination

Min ~ Max Tenor (Months)

Residential Property Up To 180 Months,Commercial Property Up To 120 Months

Maximum LTVResidential Property Up To 60%, Commercial 50%, Commercial Purchase 80%

Pre Payment Penalty

2% Will Be Charged If The Amount Exceeds 25 % Of The Principle Outstanding During A Quarter, Otherwise No Penalty.

Processing Fee 1% Of Loan Amt + Service Tax As Applicable

Takeover Of Existing Mortgage

With Additional Refinance

Allowed

Criteria Professionals

Work Exp (Years) Min 3 If Doctor Else 4

45

Min Net Income (Rs.) 1.50 Lacs Per Year

Min ~ Max Age (Years) >24 ~ <= 65 At Loan Termination


Residential Property Up To 180 Months, Commercial Property Up To 120 Months

Maximum LTVResidential Property Up To 60%,Commercial 45%,Commercial Purchase 75%

Pre Payment Penalty


Processing Fee1% Of Loan Amt + Service Tas As Applicable



Allowed

Criteria Self Employed Individuals

Work Exp (Years) Min 3

46

Min Net Income (Rs.)

1.50 Lacs Per Year

Min ~ Max Age (Years) >24 ~ <= 65 At Loan Termination


Up To 120 Months Irrespective Of Property Type

Maximum LTVResidential Property Up To 60%, Commercial 45%, Commercial Purchase 70%

Pre Payment Penalty


Processing Fee 1% Of Loan Amt + Service Tax As Applicable



Allowed

Documents required for Loan against property:

For Salaried Individual:

47

Proof Of Identity, Signature & Age

Passport/ Voter's Card/ Driving License/ PAN Card & Photograph.

Proof Of Residence

Ration Card/ Passport/ Latest Electricity Bill/ Latest Telephone Bill/ Latest Credit Card Bill.

Proof Of Income Latest 3 Salary Slip Showing All Deductions

Bank StatementLast 6 Months Where Salary/Income Is Credited

Proof Of Qualification

N/A

For Professionals:

Proof Of Identity, Signature & Age

Passport/ Voter's Card/ Driving License/ PAN Card & Photograph.

Proof Of Residence


Proof Of IncomeIT Returns, Computation Of Income, Balance Sheet And P/L A/C For The Last 2 Years Certified By A C.A.

Bank Statement Last 6 Months Where Salary/Income Is Credited


Degree / Diploma - Proof Of Professional Qualification

For Self Employed Individuals:

48

Proof Of Identity,

Signature & Age

Passport/ Voter's Card/ Driving License/ Pan Card & Photograph.

Proof Of Residence


Proof Of IncomeIt Returns, Computation Of Income, Balance Sheet And P/L A/C For The Last 2 Years Certified By A C.A.

Bank Statement Last 6 Months Where Salary/Income Is Credited


N/A

Other Terms & Conditions:

The property should be located within 50 km radius of

nearest branch.

Properties under HUF, Properties inherited under

Hindu Succession Act, Godowns, Factories &

Hospitals, Cinema Halls, Restaurants, Banquet Halls,

and Schools will not be financed under the scheme.

For Purchase of Residential Plots within Municipal /

Government Approved Layouts only Agricultural

Land, Commercial Plots, Properties Under HUF,

Properties Inherited Under Hindu Succession Act,

Plots Under Litigation and Acquisition by Public

Authorities will not be financed under plot loan

scheme.

49

Loan against property (lap) will be offered only

against fully constructed properties.

No lap will be offered against plot of land

Interest Rate Grid:

Personal Loan Interest Rate of Interest

Residential Property 12.75%

Commercial Property 13.75%

50

Auto Loan:

Category Grid

Category A Maruti 800, Omni Van, Matiz

Category B

(Upto 5 lakh)

Alto, Wagner, I10, spark, Swift, Indica

Vista, Palio, Getz, a-star, Zen

Category C

(Upto 10 lakh)

Swift Dezire, Verna, Esteem, Honda

City, Acent, Verna, Fista, Indigo CS,

Optra, Scorpio,Logan

51

Category D

(More Than 10 Lakh)

Safari, Corela, Endeavour, Optiva,

Skoda,

Criteria Salaried

Age Min 21 Years At Sanction To Maximum 58 Years At The Time Of Loan Maturity

Loan Amount Minimum Rs. 100,000

Tenure 1 - 7 Yrs

LTV Up To 85% Of On Road Price*

Income NormsGross Salary Of Rs. 1 Lac P.A. For Cat A/B Cars & Rs 2 Lacs P.A. For Cat C/D Cars

Work-Experience

Minimum 2 Years Of Total Employment

Telephone

Landline / WLL Phone At Residence. In Case No Phone At Resident Post-paid Mobile Connection With Resident Address Required.

Foreclosure 4% + Principal Outstanding

52

Processing Fee

Minimum Of Rs 2500 For Cat A Cars, Rs. 3000 For Cat B & C Cars And Rs 3500 For Cat D Cars (Plus Upto 1% Of The Loan Amount At The Discretion Of The Branch Manager)

Eligibility Calculation

3 Times Of Annual Gross Or 30 Times Of Avg Net Salary Of 3 Months. EMI Must Not Exceed 50% Of Net Salary

Criteria Self-Employed

AgeMin 21 Years At Sanction To Maximum 65 Years At The Time Of Loan Maturity


Tenure 1 - 7 Yrs

LTV Up To 85% Of On Road Price*

Income Norms

Gross Income Of Rs. 60,000 P.A. For Cat A/B Cars & Rs 1 Lac P.A. For Cat C/D Cars (Gross Income : N.P After Tax & Depreciation)

Work-Experience

Minimum 3 Years In Business

Telephone

Landline / WLL Phone At Residence. In Case No Phone At Residence Postpaid Mobile Connection With Residence Address Required.


53

Processing Fee



6 Times Gross Income P.A. (Gross Income = Net Profit + 50% Of Depreciation For The Last Financial Year.)

Criteria Partnership Firms

AgeMin 21 Years At Sanction To Maximum 58 Years At The Time Of Loan Maturity For Loan Executing Partner.


Tenure 1 - 7 Year

LTV Up To 85% Of On Road Price

Income Norms

Gross Income Of Rs. 60,000 P.A. For Cat A/B Cars & Rs 1 Lac P.A. For Cat C/D Cars (Gross Income: N.P After Tax & Depreciation). Min Turnover Of Rs 4.5 Lacs

Work-Experience Minimum 3 Years In Business

Telephone

Landline / WLL Phone At Resident. & Office For Loan Executing Partner. In Case No Phone At Resident, Post-Paid Mobile Connection With Resident. Address Is Required


54

Processing Fee



6 Times Gross Income P.A. (Gross Income = Share In Profit + Salary + Interest On Capital + 50% Of Depreciation For The Last Financial Year) (To The Extent Of His Share In Partnership)

Criteria Private & Public Ltd. Companies

Age

Min 21 years at sanction to Maximum 65 years at the time of loan maturity for the loan executing director/authorized signatory

Loan amount Minimum Rs. 100,000

Tenure 1 - 5 yrs

LTV Up to 85% of On road price*

Income NormsMin Turnover of Rs. 2 Crore and Minimum Net Profit of Rs 50 Lacs. (No Cash Loss in the last 2 yrs)

Work-experience Minimum 3 years in business

Telephone

Landline / WLL phone at Resident & Office for loan executing director/authorized signatory. In case no phone at Resident, post-paid mobile connection with Resident Address is

55

required

Foreclosure 4% + principal outstanding

Processing Fee

Minimum of Rs 2500 for CAT A cars, Rs. 3000 for Cat B & C Cars and Rs 3500 for Cat D cars (plus upto 1% of the loan amount at the discretion of the Branch Manager)


6 times Avg. Net Profit of the Last 2 Years

Documents required:

For Salaried:

Proof of IdentityPassport / Voter’s Card / Driving License with Photograph/ PAN card

Proof of Income

Latest salary slip showing all deductions AND Latest Form 16 / Income Tax Return (Form 16 FYE March should be available June onwards)

Address Proof (of the residing

city)

Ration Card/Latest Electricity Bill/Latest Telephone Bill/Passport/Latest Credit Card Bill/ Driving License

Signature Verification

Passport copy/ Driving License with Photograph/ Banker’s Verification

Additional Document

NA

For Self-Employed:

56

Proof of Identity Passport / Voter’s Card / Driving License with Photograph/ PAN card

Proof of Income Latest Income Tax Return and Computation of income


city)

Ration Card/Latest Electricity Bill/Latest Telephone Bill/Passport/Latest Credit Card Bill/ Driving License


Passport copy/ Driving License with Photograph/ Banker’s Verification

Additional Document

Declaration from Proprietor

For Partnership Firms:

Proof of Identity

Copy of Partnership Deed & the following documents required for the loan executing partner: Passport / Voter’s Card / Driving License with Photograph/ PAN card

Proof of Income

Audited Balance Sheet, Profit & Loss Account for last 2 years along with the latest 2 Income Tax Returns


city)

Telephone Bill/Electricity Bill/ Shop & Establishment Act Certificate/ SSI Registered Certificate/ Sales Tax Certificate


Banker’s Verification

Additional Documentation

Authority letter signed by all partners

For Private & Public Ltd. Companies:

Proof of Copy of Memorandum & Articles of

57

Identity

Association & the following documents required for the loan executing director/authorized signatory. Passport / Voter’s Card / Driving License with Photograph/ PAN card

Proof of Income

Last 2 Years Audited Financials


city)

Telephone Bill/Electricity Bill/ Shop & Establishment Act Certificate/SSI Registered Certificate/ Sales Tax Certificate/PAN No.


Banker’s Verification

Additional Documentation

List of Directors, Share Holding pattern, Copy of Board Resolution

On Road Price = Ex Showroom rate + Insurance + Road Tax + Registration charges

Interest Rate Grid:

Interest Rate Grid (Direct Branch Source)

Car Category

Upto 35 months

36 - 60 months

60 – 84 months

Cat A 13.00% 12.00% 13.50%

Cat B 13.00% 11.50% 13.50%

Cat C 13.00% 11.50% 13.50%

Cat D 13.00% 11.00% 13.50%

58

Interest Rate Grid (Dealer/DSA sourcing)

Car Category

Upto 35 months

36 - 60 months

60 – 84 months

Cat A 14.50% 13.25% 15.50%

Cat B 14.50% 12.50% 15.50%

Cat C 14.50% 12.00% 15.50%

CAT D 14.50% 11.75% 15.50%

Agricultural Loan:

Financing farmers against pledge of

warehouse or cold storage receipts:

Facility Limit:

Ceiling of Rs. 5.0 lac per farmer

Nature of Facility:

Loan against the pledge of warehouse and/ or cold storage receipts

Eligibility for Farmers:

59

Original depositors of the receipts.

The borrower to undertake that he is a farmer and

also to provide a declaration to the effect that he/she

is not defaulter to any Bank/Financial Institution

Designated Warehouse:

CWC/SWC Warehouses Private warehouses/Cold

storages/Godowns with a minimum storage capacity of

100 MT

Value of Loan:

Value of the loan = Value of commodity minus

commodity specific margin amount

Rate of Interest:

BPLR- 4.75%; at present 15.25 % p.a. payable with the

principal repayment.

Margin:

Min 40%.

Tenure of the Loan:

The maximum tenure of each loan shall be 12 months.

60

Valuation:

The value of the commodity as security shall be the

lower of the following:

Value of goods as reflected in the warehouse receipt.

Value of the goods based on the average price

prevailing in the nearest mandi on the day previous

to the date of disbursement.

Price provided by the Commodity Business Group,

Central Office from time to time for various

commodities

Insurance:

The stocks pledged to the Bank should be insured

adequately with Bank clause.

Security Upto Rs. 200,000:

Primary-: Pledge of warehouse receipts duly endorsed

in Bank’s favour

Security over Rs. 200,000:

Primary-: Pledge of warehouse receipts duly endorsed

in Bank’s favour, Collateral-: Third party Guarantee

Disbursement:

The individual borrower availing this facility will have to

open an account at the concerned local branch (the

61

account can be opened under ‘SBSPL’ category wherein

the average balance requirement is Rs. 1000/-). The

amount will disbursed by crediting the account of the

borrower, at the concerned branch.

Selection of the Warehouse/Cold Storage:

The warehouse/cold storage has to have adequate

facilities (like aeration, pest control, loading and

unloading facilities, electricity, security, etc.) to allow

for the storage of the produce with minimum loss in

quality and quantity. It is suggested that branches may

give preference to the warehouses accredited by

National Commodity and Derivative Exchange, India

(NCDEX) who provide warehouse receipts to the

farmers in dematerialized form.

Security from Warehouse Owner/Manager:

Have to sign M&C agreement with Bank to buy or

arrange for the sale of the stock in case of default of

farmer Letter of guarantee/comfort letter is to be obtain

(in absence of the letter of guarantee).

Monitoring & M&C Agent Charges:

M&C agent has to monitor the security. The quality and

quantity report has to be sent to the branch on a 62

monthly basis. Normally 1% of the loan amount.

However, branches can pay maximum 1.5% of the loan

amount wherever required.

Other Conditions:

Post dated cheques to be collected from borrowers

Repayment:

Bullet repayment along with interest on due date.

Penal Interest:

2% p.a. on overdue loan/unpaid interest

Pre-payment Charges:

2% (if loan is repaid within one month. Otherwise nil)

Processing Fee:

.40% of the loan sanctioned

Documents to be executed by the Borrower:

DP Note

DP delivery letter

Letter of waiver

Pledge Agreement

Warehouse receipt

63

Documents to be executed by the M&C

Agent:

Management and Collection Agreement: To be finalized

in consultation with the Law Department

Event of Default:

In the event of default of a borrower, M&C agent should

arrange for buyers/buy back of the stock. The Bank

shall be entitled to sell the pledged goods either

through the M&C agent/ public auction/private

sale/through any commodity exchange and adjust the

sale proceeds against the amount outstanding from the

borrower. The price at which the pledged commodity is

sold by the Bank is final and binding on the borrower.

However, in case the proceeds from such a sale are not

sufficient to satisfy the amount outstanding in full, the

Bank will be entitled to recover the shortfall from

borrower.

Registers to be maintained:

Registers to be maintained by the branch:

Loan application cum disposal register

Price, Stock and Margin recovery register

Insurance due date register

64

Branches would keep the above mentioned registers in

physical form or in a excel sheet in the system. The

records should be updated at the stipulated time and

hard copies be preserved in a separate file.

Registers to be filled in by M&C agent:

Stock and margin register

Rating Tool for Farmer/Agriculture:

Score Sheet for Agricultural Loans(For individuals)

No Parameters Score Scoring

1. Type of land holding

Own: 5Leasehold: 3

2. Extent of land under cultivation

More than 10 acres: 5More than 5 and Upto 10 acres: 35 acres and below: 2

3. Type of crop under cultivation

Cash crops: 5Non cash: 3

4. Irrigation

Drip/Sprinkler irrigation: 5Well/canal: 3Dry farming: 1

65

5. Marketing arrangement

Through Co-Operative Societies/Private corporates: 5Through Govt. agencies: 3Direct: 1

6.

Source of income from activities allied to agriculture/other source of income

Yes: 3No: 0

Bench marking: (Out of 28):

Score above 18 A115-18 A210-14 A3

Score below 10 A4

Agricultural Gold Loan – ‘Power Gold’:

Eligibility: Any individual who has completed 18 years of age

and is involved in agriculture/allied activities.

In case one spouse is availing of the loan against gold

ornaments owned by the other, the borrowing should

be in the joint names.

Gold bullion will not be accepted as security.

Only original owner of the Jewellery.

66

Jewellery below 20 carat should be avoided.

Limit :

Minimum - Rs.15,000

Maximum - Rs.10,00,000

Loan Amount and Margin:

Loan Amount = (Net weight. of ornament in terms of 22

carat) * (Advance rate)Net weight of ornament in terms

of 22 carat = (Net weight of ornaments * Purity)/ 22

Advance rate at present: Rs.740/- per gram

BH can selectively increase advance rate by Rs.10/-

Margin Call:

During the tenure of the loan, if the margin of the loan,

based on the market value of the gold, falls below 20%,

the borrower would be called upon to deposit the

shortfall. If the borrower fails to pay the shortfall within

15 days, the Bank will have the right to dispose off the

gold ornaments.

Security:

67

Primary - Nil

Collateral - Pledge of gold ornaments

Custody Charges: If gold value > 5 times loan amount

Rs. 1000 + ST per year

Pricing:

For limit up to Rs. 1.00 Lakh: BPLR-4.25%

For limit above Rs. 1.00 lacs: BPLR-4.75%

Interest application is Annual and to be paid along

with principal

Penal interest:

2% per year on overdue amount.

Disbursement:

Up to Rs.50,000/- in Cash.

Above Rs.50,000/- by Pay Order.

Documentation:

Following documents should be obtained from borrower.

Application form

D.P.Note

D.P.Note delivery cum waiver letter

68

Letter of Pledge

Proof of agricultural activity (copy of land records,

land revenue tax receipts etc.)

Declaration of ownership of the ornaments pledged

Authorisation from the borrower for disclosure of

information

The following document should be obtained from the

appraiser

Certificate of valuation

Processing & Appraiser fees:

0.25%+ST subject to maximum of Rs. 500+ST

BH has discretion to waive/ reduce if RoI is

increased by 0.30%

No fee up to Rs.25,000/- loan

0.25% subject to maximum of Rs.500/-

Insurance:Gold ornaments pledged to the Bank will be covered

under the Master policy of theft and burglary. Bank’s

indemnity policy will be obtained by the Bank

centrally.

Sanctioning Authority:

69

The sanctioning authority would be the Branch Head in

the category of Manager/AVP/VP. The branches should

send the Control Returns on monthly basis to the Zonal

Office for noting and review. The VP (Credit & Forex)

will be the reviewing authority at the Zonal Office.

Repayment:Repayment period not exceed 18 months. The facility

will be renewable at the request of the borrower after

18 months. The repayment schedule should be aligned

with the crop harvest cycle.

Release of the gold ornaments on repayment by borrower

The branch should release the security only if the full

amount of interest, other charges and principal has

been repaid. The borrower should present the signed

receipt issued to him/her by the Bank while taking

delivery of the ornaments. The borrower(s) needs to

sign the receipt acknowledging that the gold ornaments

have been received by him/her in good order and

condition.

The signed receipts should be arranged as per the date

of closure of loan account and shown to the inspecting

authority at the time of the inspection.

70

Guidelines for the release of the pledged jewellery on

liquidation of the loan on death of the borrower will be

issued later in consultation with the Law Department.

Right of Disposal of Security:In case of default, Bank has the right to dispose the

gold ornaments for satisfaction of the loan by way of

public auction or private treaty and proceed against the

borrower.

Power Gold Plus:

Difference from Power Gold:

Minimum Rs. 2.00 lacs to Rs. 10.00 lacs.

Monthly interest application.

Drawing Power: 80% of value of the ornament.

Field inspection report to confirm the activity is to be

undertaken.

Maximum 6 redemptions and pledges can be

permitted in a year, Rs.250/- plus ST will be charged

per redemption/pledge.

Custodian charges of Rs.3,000/- plus ST, will be

charged per year if the value of the security is more

than 5 times the loan amount.

Pricing:

Direct Agriculture: BPLR–3.75%.

71

Indirect Agriculture: BPLR-3.25%.

Fee: 0.25% subject to maximum of Rs.1,000/-.

Appraiser Fee: 0.25% subject to maximum Rs.1,000/-.

Product Features:

CC facility against gold (CCAPG)

Target Group:

For allied agricultural activities like poultry, dairy,

fisheries etc- Direct Agriculture.

Financing agriculture input dealers, Arthias/

Commission agents etc – Indirect Agriculture. Crop

cultivation should not be financed.

Kisan Power Scheme:

Purpose:Production Credit i.e. for meeting cost of crop

cultivation/allied agricultural activities.

Investment Loan for meeting any investment need,

other than production expenses, that can improve

borrower’s farm productivity i.e. purchase of

agricultural equipments, land levelling, land

development, vehicles etc.

Consumption Loan for meeting consumption needs

Financing of all allied agricultural activities except the

following is eligible under Kisan Power-No tractor /trailer

72

shall be financed under the Kisan Power Scheme.

Poultry shall not be financed under Kisan Power Scheme

Eligibility:Any individual who is a major Owner Cultivators Tenant

Cultivators and Share Croppers may be financed

selectively. Minimum landholding should be two acres

of cultivable land. Landholding has to be supported by

land documents like 7/12 extract, Patta, chitta, Adangal

(confirming ownership, crop pattern) etc. Joint holding

(single or multiple locations) up to five persons are

permitted.

In case the borrower is more than 60 years of age, a co-

borrower is mandatory. The co-borrower should be a

family member / relative of the Borrower.

Radius of Operation:Radius of operation restricted to 50 km from the

Branch. However, VPAF may allow financing select

cases under the scheme beyond 50 kms and upto 75

kms, provided the distance will not come in the way of

effective follow up and recovery.

Nature of Facility:

73

Term loan – Consumption Loan and Investment Loan

Cash credit – Production Credit

Sanctioning authority should ensure that a cash credit

facility is extended in all cases without exception

Amount of Loan:Overall Limit:

Minimum: Rs. 25001/-

Maximum: Rs. 25,00,000/-

Individual Components:

Facility Min Limit Max Limit

Investment Loan 25001/ 24,74,999/-

Production Credit* 25,001/ 25,00,000/-

Consumption Loan 50,000/ 5,00,000/- For States of Punjab, Rajasthan & Haryana and3,00,000/- For all other states

*Production Credit is Mandatory

Assessment/Fixation of Limit:Overall Limit

The overall loan amount/ credit limit will be fixed on the

basis of 5 times annual farm income or 70% of the

value of collateral security whichever is less subject to

maximum of Rs. 25,00,000/-

74

Production Credit

For any Kisan Power account, Production Credit is a

must. While calculating Production Credit Limit, scale of

finance should be the basis of assessment, which is

decided every year by District level Technical

committee (DLTC). The Production Credit Limit can be

maximum upto 150% of the amount of Scale of Finance

advised by DLTC. Crop insurance premium may be

debited to production credit, but the outstanding should

be within limit. In other words the disbursement needs

to be net of crop insurance premium.

Production Credit Limit may be extended for leased

land also, subject to the terms and conditions on

security/guarantee etc.

Consumption Loan

The Consumption Loan amount should not be more

than 3 times of annual farm income, and subject to the

security criteria, within the upper cap of Rs. 5 lacs/3

lacs as the case may be.

The assessment of consumption requirement is to be

based on the written declaration of the applicant, and

100% of the declared amount would be allowed subject

to maximum limits specified.

Investment Loan

75

For purchase of Two/Three/Four Wheelers used for

carrying farm goods or Farm Machinery-:

In such cases, the branches shall ensure that the price

of the two/three/four wheelers or machinery should be

equal to or less than the MRP (maximum ex showroom

price, which includes all the state level taxes, but

excludes the registration fee, road tax and insurance)

published by the manufacturer. The actual cost of

registration, road tax and insurance can be financed.

In case of vehicles, the Bank’s interest is to be noted in

the RC book and the vehicles are to be insured under a

comprehensive insurance policy. Along with invoice

receipt, RC book copy, a photograph of the vehicle and

the Borrower standing nearby is to be obtained and

kept on record. This may be obtained within 45 days of

disbursement. Our charge on the vehicle should be

explicitly mentioned on the vehicle.

In respect of development works like deepening/drilling

of wells, construction of pump house/sheds/cattle sheds

etc, the estimates made by the farmers themselves can

be accepted, provided the cost does not exceed more

than 20% of the unit cost approved for that

activity/purpose in that region by NABARD.

Security:

76

Upto Rs. 50000/-

Primary: Hypothecation of crops and other assets

Collateral : Nil

Over Rs. 50000/-

Primary : Hypothecation of crops and other assets

Collateral: Mortgage/ Charge of land owned by the

prospective borrower upto 140% (1.4 times) of the

amount of loan as per State laws.

Margin:Investment Loan for

creation of assets and

allied activities (except

vehicles)

25%

Investment Loan for

vehicles 30%

Production Credit

Nil. The labour input by the

farmer is considered as the

margin. Hence no separate

cash margin is insisted for

crop loans.

Consumption Loan NIL

Rate of Interest:

For consumption loans:

77

Amount Interest Rate

Loan from Rs 50,000 upto Rs

2,00,000

BPLR 1.50%

Loan from Rs 2,00,001 upto Rs

5,00,000

BPLR 1%

For all other loans -:

Amount Interest Rate

Limit up to Rs. 50,000 BPLR 3.50%

Loan from Rs 50,001 upto Rs

2,00,000

BPLR 3%

Loan from Rs 2,00,001 upto Rs

5,00,000

BPLR 2%

Processing Fee:

Fee @ 0.50% for production credit and 1.00% for

Investment Loan and Consumption Loan. Subject to a

minimum of Rs.500/-. Service tax is to be recovered at

the applicable rate.

Sanctioning Authority may at their discretion allow

reduction/waiver are free to recover a higher processing

fees on selective basis.

Crop Insurance:

The production credit is to be covered under National

Agricultural Insurance Scheme (NAIS) provided by the

78

Agriculture Insurance Company of India Ltd (AICIL).

Zonal Offices/Advances cells are authorised to waive

this requirement.

Branches to debit actual crop insurance premium from

production credit account (CCAGR). However, no

overdrawing should be allowed. It is to be ensured that

the disbursement is made after keeping sufficient

balance for debit of all future insurance premiums.

Accident Insurance:All KCC holders shall be covered under Personal

Accident Insurance upto Rs.50, 000/- as per the extant

guidelines of Kisan Credit card scheme. This is done

under a master policy with Bajaj Alliance General

Insurance Co Ltd by Central Office and the premium

amount of Rs. 15 will be incurred by the Bank. Also, in

case of a claim (due to accidental death, partial

disability or total disability), branches should take up

the matter with Bank Assurance Cell in Retail Banking

department at CO for an early claim settlement. The

proceeds of insurance are to be credited to CCAGR

account of the borrower.

Insurance of Assets:All the securities (Building, equipment and Vehicles)

created out of the loan or otherwise are to be insured

79

for full value. Branches may take the help of our

insurance advisers for this purpose.

Disbursement:Wherever cash disbursement is to be made (in case of

Production credit/Investment Loan or Consumption

Loan), the funds should be credited to the operative

(SB/CC) account of the borrower and should be

withdrawn through cheque leaf.

Investment Loan

Investment loan is to be disbursed in one or more

instalments depending upon the progress of work.

In case of Investment loan for purchase of implements/

equipments/vehicles, the borrower should be asked to

deposit the margin money with the Bank, and the

disbursement is given to the

dealer/manufacturer/supplier directly by DD/ Pay order

along with margin.

In case the implement/ equipment is already purchased

by the Borrower, disbursement is permitted after

inspection by the Bank’s official and after getting the

stamped receipt and invoice. These purchases should

not be older than 75 days.

Cash disbursement may be made for purchase of

animals, construction of farm shed etc. and the relative

80

receipt is to be obtained within 45 days of

disbursement. The labour component in Investment

loan can be released in cash after getting written

request cum declaration from the Borrower.

Repayment:

Production Credit

Annual review and renewal in every three years.

Branches should encourage Borrowers to bring the sale

proceeds of their agricultural produce to their CCAGR

a/c .

Consumption Loan and Investment Loan

All the investment loans (except horticulture projects)

and consumption loan should be repayable within a

maximum period of 5 years. Repayment period up to 7

years is permitted in case of horticultural projects which

is inclusive of moratorium period upto maximum of 3

years. Sanctioning authorities to ensure that projects

having sufficient cash generation in the residual loan

period (I.e. total period minus moratorium period) to

ensure repayments only are considered. A suitable

moratorium may be allowed upto maximum of 2 years

in case of Investment Loan (except horticulture projects

and vehicle loans). The instalments should be

monthly/quarterly/Half yearly/yearly depending on

81

harvesting of crop and other income sources like dairy,

salary, other employment etc. depending on the income

stream the repayment of vehicle loans is to be fixed at

monthly/quarterly or half yearly intervals and the

maximum moratorium for vehicle loan is to be

restricted to 6 months.

Penal Interest:

2% p.a. on overdue amount.

Documentation:

Borrower:

Demand Promissory Note for Production Credit

Letter of waiver cum DP Note delivery letter for

Production Credit

Loan cum hypothecation Document – ACD 1.

Simple (Registered) Mortgage - ACD 2 / Equitable

Mortgage (ACD-4A & 4B).

Duly signed PDCs along with covering letter

Duplicate copy of the sanction letter duly signed by

the borrower/s and guarantor/s.

82

A letter addressed to the Village Revenue Officer

advising him to record the charge of the Bank for the

amount of the loan on the land records with him.

Guarantor:

Deed of Guarantee - ACD 3.

Additional Documentation for Vehicles

Power of Attorney for registering the vehicle in favour

of one of the joint accountholders in case there are

more than one borrowers

A letter of authority to the Bank for effecting

disbursement of the loan directly to the dealer.

RTO forms no.26, 29,30,34,35

MIS and Monitoring:

Monthly Control Returns to be submitted by the

branches/Cluster Heads to Advances Cell/Zonal Office

for reporting advances.

Appraisal and Sanction:

Application for Kisan Power should be obtained from the

proposed borrowers and also the guarantor in the

prescribed format. Branches need to offer comments in

the proposal on the value of the main security,

collateral security, i.e. value of the land being

mortgaged to the bank and the basis of calculation of

limit to the farmer. The agriculture officers/branch staffs

83

identified to deal with the scheme is to travel to each of

the individual centres to meet the applicants, verify the

details and put up the proposal for sanction to the

Branch Head/Cluster Head. The recommending and the

sanctioning authority should sign the proposal.

Pre sanction Visit:

The focus of visit should be on an evaluation of the

income stream of the borrower, and a comprehensive

assessment of credit needs taking into account track

record, credibility, capability, as well as technical

viability of the existing and proposed activities. Short-

term credit needs of the farmer should include all

requirements directly and indirectly related to

production, post harvest and household expenses.

Repayment capacity should be assessed on the basis of

aggregate household income from all sources including

crop production and ancillary activities.

The following details should be observed during farm

inspection:

Necessity of the development/s proposed to be

undertaken.

The crops cultivated and suitability of the crops

proposed after the development Past experience in the

activity In case of Investment Loan, it should be

84

ensured that the land on which the developments are

proposed is available as security.

Additional guidelines for Vehicles:Margin payment should be made to the Bank and under

no circumstances, the Borrower should be allowed to

pay directly to the dealer and produce a receipt.

Registration of vehicles and Stamped receipt from

dealers for the cost of the vehicle financed by us should

be obtained. Our charge on the vehicle should be

explicitly mentioned.

Registers to be maintained: Loan Application Receipt cum Disposal Register

Mortgage Register

Document Execution Register

Recovery:Sanctioning authority to designate an officer (In the

cluster HQ/ Stand alone branch) for recoveries. He

should monitor the accounts regularly and initiate

action, whenever required. Branches may seek help of

outsourced agencies for recovery. The appointment of

outsourced agency shall be sanctioned by VPAF after

doing a cost benefit analysis.

85

Direct Financing to Farmers for

Cattle Loans through Dairies/

Cooperatives:

Facility:Term Loan

Purpose:

Purchasing Milch animal

Construction of shed for keeping cattle.

Extent of Finance:The extent of finance shall be 85% of the cost of

animals/ shed constructed. The borrower’s own

contribution shall be to the extent of minimum 15% of

the total cost of cattle purchased/shed constructed. The

minimum indicative costs can be found out from the

State Level Unit Cost Committee of NABARD.

Amount:Minimum Amount: Rs. 30,000

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Maximum Amount: Rs. 2,00,000

*The cost per cattle is assumed to be around Rs.

18,000-19,000. As per the eligibility criteria borrower

has to purchase a minimum of two milch cattle from

loan amount hence, the minimum availment should be

around Rs. 30,000 keeping a margin of 15 % by farmer.

Age:Any major individual pursuing dairy farming activity.Eligibility Criteria:Farmer should have a record of supplying minimum 10

litres of milk per day on an average for at least one

year with the Village Dairy Cooperative Society.

Margin:15 % of value of cattle to be purchased and/or shed to be constructed.

Rating:The score sheet for agricultural advances may be used

for the purpose. The farmer with a rating of A1 and A2

may be considered for the loan.

Tenor:Maximum period of Four Years from the first transaction

of disbursement to borrower with a maximum

moratorium period of 3 months before start of principal

repayment.

87

M&C Commission:The Dairy will be paid 0.5% of the loan amount as

commission for acting as an M&C agent for the Bank.

Documentation: Hypothecation cum Term Loan Agreement.

Guarantee from Village Dairy Cooperative Society

format is being finalized in consultation with Law

Dept. Personal Guarantee from member of dairy coop

society or third party.

Letter addressed by Borrower to Sponsor and Sponsor

to Bank.

Letter of comfort/Guarantee from Dairy/Milk Union

M&C Agency agreement between the Dairy and the

Bank.

Repayment:The repayment will be made through escrow

mechanism with a maximum moratorium of 3 months.

Thereafter, the loan is to be repaid in maximum 4 years

in monthly instalments.

Rate of interest:The pricing will be irrespective of the rating:

Loan Amount Rate

Rs. 30,000-2,00,000 BPLR-3%

Above Rs. 2,00,000 BPLR-3.5%88

Penal interest:2.00% p.a. on the overdue interest and instalments.

Prepayment Charges:In case of prepayment of loan within one year from the

disbursement: 2% of the amount prepaid.

Security:

Insurance:Cattle/Shed will be comprehensively Insured with the

beneficiary clause as UTI Bank Ltd. The premium

payable is added in the cost of the project.

Processing Fee:0.5% of the total loan amount

Other Terms and Conditions:

Primary: Hypothecation of cattle financed by the Bank

and other movable assets.

Collateral: Letter of Comfort/Guarantee by the Union

against the loan Guarantee from Village Dairy

Cooperative Society/Personal Guarantee. In case the

loan amount exceeds Rs. 1 lakh the same would be

further secured by noting of the Bank’s charge on the

land records of the borrower or create a mortgage of

land in favour of the Bank.

89

In case guarantee is not available from Village Dairy

cooperative, a guarantee from a person within the

group or a guarantee from a third person acceptable to

the Bank should be obtained. The personal guarantee

has to be obtained from a guarantor should own his/her

own tractor/own at least 2 acres of irrigated land/4

acres of dry land employed in government, semi

government employment in the category of Scale III

and above or working with any reputed private sector

undertakings at a respectable positions Running own

business and having assets with a market value equal

to the amount of the loan. The Branch will reserve the

right to reject any loan application based on its own

appraisal, having right to conduct inspections without

any prior notice. In case the Borrower stops supplying

milk to the Union the entire loan amount shall be

repayable in lump sum/ recalled.

Bench marking: (Out of 30)

Score of 26 and above A1

25-21 A2

16-20 A3

<16 A4

Score Sheet for Dairy/Milk Union:

90

Parameters Score Scoring

Financial Performance of Dairy/Union

Positive PAT for past 3 years: 5Positive PAT for 2 years out of 3 years: 3Negative PAT for for 2 years and above out of past 3 years: 0

Milk Payment cycle

Less than 7 days: 5More than 7 and Upto 15 days: 3More than 15 days: 0

Extension Services available through Dairy/ Milk Union:Cattle FeedVeterinary serviceArtificial Insemination

All three services provided: 5Two out of three services provided: 3One service provided: 2Not provided: 0

Average capacity utilisation of Milk Processing Plant over past 3 years

Above 60%: 5Between 60%-45%: 3Less than 45%: 0

Average daily milk supplied per farmer member over current financial year

More than 10 litres: 5Between 5-10 litres: 3Less than 5 litres: 0

Collateral Security available from Union

Guarantee or cash margin: 5Letter of Comfort: 3

91

Direct Financing to Farmers under Contract Farming:

Contract farming can be defined as an agreement

between farmers and processing and/or marketing firms

for the production and supply of agricultural products

under forward agreements, frequently at predetermined

prices. The arrangement also invariably involves the

purchaser in providing a degree of production support

through. The basis of such arrangements is a

commitment on the part of the farmer to provide a

specific commodity in quantities and at quality

standards determined by the purchaser and a

commitment on the part of the company to support the

farmer’s production and to purchase the commodity.

The intensity of the contractual arrangement varies

according to the depth and complexity of the provisions

in each of the following three areas:

Market provision: The grower and buyer agree to

terms and conditions for the future sale and purchase of

a crop or livestock product;

Resource provision: In conjunction with the

marketing arrangements the buyer agrees to supply

selected inputs, including the inputs required for land

preparation and technical advice;

92

Management specifications: The grower agrees to

follow recommended production methods, inputs

regimes and cultivation and harvesting specifications.

Parties to the contract farming financing:

Farmer

Bank

Sponsor

Sponsor can act as management and Collection agent

to undertake the following functions:

Identification and screening of borrowers.

Completing application form and other formalities like

getting extracts of land records, no due certificate

etc. of the proposed borrowers.

Recommending the Bank for loan.

Getting security documents executed by the

borrower after sanction from the Bank and forwarding

the same to the Bank.

Paying the amount to the farmer disbursed by the

Bank.

Getting stamped receipt from the borrowers in token

of having received the amount of loan and p0ass on

to the Bank.

After the supply is over, sending to the Bank the

entire proceeds payable to the farmer. In case

amount payable to farmer by the sponsor is less than

93

loan outstanding, to recover the balance amount

from the farmer and remit to the Bank against the

loan out standings.

Submitting the monthly MIS.

Eligibility Criteria:

Cultivable fertile land of 3 acre and above. It has to be

supported by land documents like Patta, chitta,

adangal, 7/12, 8/A extract (confirming ownership, crop

pattern etc) etc.

Rating:

The individual account will not be rated in view of the

structure of the scheme and comfort available from

Sponsor.

Sanctioning and Disbursement of Loan:

Bank and the sponsor based upon the scale of finance

as decided by the DLCC of the lead Bank or a mutually

agreed upon scale will be arrived upon by the Bank and

the sponsor.

The disbursement of loans will be effected to the credit

of current a/c to be opened by the sponsor with our

Bank exclusively for the said purpose. In order to make

the disbursement to the farmers who are located at

different centres, the sponsor will open a current

94

account with any other local bank, again exclusively for

making disbursement of loans to the farmers. The

sponsor will also arrange to obtain a stamped receipt

from the farmer borrowers in token of having received

the amount of loan.

The agriculture extension officers of sponsor will

identify the individual farmers and complete all the

documentation formalities as prescribed by the Bank.

After the satisfaction of our branch personnel about the

completion of documentation formalities, our branch

will issue a consolidated cheque favouring the sponsor’s

dedicated current account with our bank.

Sponsor will arrange to provide us the transactions

details of the loan disbursement account on a monthly

basis certified by a Charted Accountant.

Amount: Depending on scale of finance as decided by the DLCC

of the lead Bank per acre of land; or what is mutually

agreed upon by the Bank and the sponsor, as the case

may be.

Rate of Interest:7.00%-12.00% per year. Payable half yearly depending on case to case basis.

Tenor:

95

Duration of the crop plus two months

Security: Hypothecation of crop. Letter of Guarantee / Comfort letter (in absence of

the letter of guarantee) from the sponsor

Collateral Security: Nil

Insurance: Wherever available the crop should be insured with standard bank clause.

Processing Fees: Nil

Disbursement: The agriculture extension officers of sponsor will

identify the individual farmers and complete all the

documentation formalities as prescribed by the Bank.

Sponsor will forward our branch, the individual

applications for the loan along with the required

documents as detailed in the scheme.

After the satisfaction of our branch personnel about the

completion of documentation formalities, our branch

will issue a consolidated cheque favouring the sponsor’s

dedicated current account with our bank.

96

The sponsor will arrange to obtain a stamped receipt

from the farmer borrower in token of having received

the amount of loan and pass on to the Bank. Sponsor

will arrange to provide us the transactions details of the

loan disbursement account on a monthly basis certified

by a Charted Accountant.

Repayment: After the supply is over, sponsor shall send to the Bank

the entire proceeds payable to the farmer. The bank will

make balance payment to the farmer after deducting

their crop loan dues. In case amount payable to farmer

by the sponsor is less than loan outstanding, sponsor

will recover the balance amount from the farmer and

remit to the Bank against the loan out standings.

Our branch would conduct inspection on a half-yearly

basis or as decided by the Bank to verify the crop. Our

branch would also verify the books of accounts of the

sponsor at half yearly interval to verify the disbursal of

loan as per the scheme. Also, if required an external

auditor would be appointed to audit the accounts.

Other Terms: Sponsor will sign M & C agency agreement with the

Bank.

97

Education Loan:

Axis Bank's Study Power aims to provide financial

support to deserving students for pursuing higher

professional or technical education in India and abroad.

The loan would be provided to students who have

obtained admission to career-oriented courses eg,

medicine, engineering, management etc., either at the

graduate or post-graduate level.

Quantum of loan:The quantum of finance under the scheme is capped at

Rs.10 lacs for studies in India and RS 20 Lacs for studies

abroad, which cover tuition fees, hostel charges (if any),

cost of books, etc. The minimum amount of loan would

be RS 50000.

98

Margin:No margin for loans upto Rs 4 lacs. For loans above Rs 4

lacs, 5% margin for studies within India and 15% for

higher studies overseas.

Rate of interest:Interest rates linked to PLR.

Role of the Guardian:

The parent(s) or guardian of the student would be

treated as a co-applicant of the loan. His or her role

would be, necessarily, like the primary debtor.

Security:Third party guarantee and/or collateral security may be

asked for in appropriate cases.

Additional Security:Assignment of LIC Policy in favour of the Bank for the

sum assured being at least 100% of the loan amount.

The policy is kept alive during the currency of the loan.

To ensure this, the annual premium may be include in

the computation of the loan requirement, along with the

tuition fees and other recurring charges. Further, the

99

future income of the student needs to be assigned in

favour of the Bank for meeting the instalment

obligations.

Disbursement:

The loan will be disbursed in full or in suitable

instalments taking into account the requirement of

funds and/or fee schedule as assessed by the Bank

directly to the educational institution or vendor of books

or equipment or instruments.

Penalty for early closure:

Nil

**********************

Abbreviations and Acronyms (Glossary):

Bank:

RBI : Reserve Bank of India

BIS : Bank of International Settlement

BCBS : Basel committee on Banking Supervisory Practices

NABARD : National Bank of Agriculture and Rural Development

100

DICGC : Deposit Insurance and Credit Guarantee

Corporation

ECGC : Export Credit Guarantee Corporation

Delivery Channels:

SOL : Service Out-let

ATM : Automatic Teller Machine

PIN : Personal Identification Number

POS : Point of Sale

VbV : Verified by Visa (Secured Internet Payment System)

WWW : World Wide Web

SMS : Short Messaging Service

Overseas Investor:

FII : Foreign Institutional Investor

NRI : Non Resident Indians

PIO : Persons of Indian Origin

FDI : Foreign Direct Investor

OCB : Overseas Corporate Body

Fixed Deposit:

STD : Short Term Deposit

MIC : Monthly Income Certificate

QIC : Quarterly Income Certificate

RIC : Re-Investment Certificate

Interest:

LIBOR : London Inter Bank Offered Rate

MIBOR : Mumbai Inter Bank Offered Rate

Payment and Settlement System:

101

IDRBT : Institute for Development and Research in Banking

Technology

INFINET : Indian Financial Network

SFMS : Structured Financial messaging Solution

RTGS : Real Time Gross Settlement (System)

NEFT : National Electronic Fund Transfer (System)

IFSC : Indian Financial System Code

SEFT : Special Electronic Fund Transfer

ECS : Electronic Fund Transfer

SWIFT : Society for World Wide Inter Bank Financial

Telecommunication (Network)

MICR : Magnetic Ink Character Recognition

Regulators:

AMFI : The Association of Mutual Funds in India

IRDA : Insurance Regulatory and Development Authority

SEBI : Security and Exchange Board of India

CBIL : Credit Information bureau (India) Ltd.

Investment:

CRR : Cash Reserve Ratio

SLR : Statutory Liquidity Ratio

ALM : Assets liability Management

ALCO : Assets Liability Committee

REPO : Reverse Purchase Order

GDR : Global Depository Receipt

ADR : American Depository Receipt

General:

BPLR : Benchmark Prime landing Rate

FCNR : Foreign Currency Non Resident

102

NRE : Non Resident External

NRO : Non Resident Ordinary

FEMA : Foreign Exchange Management Act, 1999

FERA : Foreign Exchange Regulation Act, 1973

FEDAI : Foreign Exchange Dealers Association of India

HUF : Hindu Undivided Family

COPRA : Consumer Protection Act.

Ombudsman : To Take Public Complaints against the Public

Authorities

TDS : Tax Deductible at Source

KYC : Know Your Costumer

FATE : Financial Action Task Force

FIU-IND : Financial Intelligence Unit India

CAR : Capital Adequacy Ratio

CRAR : Capital to Risk-Weighted Assets Ratio

GAAP : Generally Accepted Accounting Principles

NPA : Non Performing Assets

SARFAESI : Securitisation and Reconstruction of Financial Assets and

enforcement of Securities Interest (Act)

GRACE : Ground Rules and Codes of Ethics

Appendix

103

www.axisbank.com

Journals

Circulars

Annual Report

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104

Vedansh Project

Documents

loan assessmentsubmitted

loan assessment321

agriculture loan

personal loan

education loan

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