MANAGERIAL PERSPECTIVES
A
PROJECT STUDY REPORT ONTraining Undertaken atMARKETING ANALYSIS
OF PERSONAL LOANS AND ITS OPEARTIONS
AT
2013-2014Submitted to the Partial Fulfillment of the Award of
degree of
Bachelor of Business Administration
S.S.JAIN SUBODH P.G. COLLEGE, JAIPURSubmitted By: - Mr .
Submitted To:- BBA III year
Acknowledgement
It is with great of gratitude and happiness that I present a
thoroughly made project on the Comparative Market Analysis of
Personal Loans and its day to day operations offered by YES BANK
and other major players in this sector.
This project is an insight into the current banking scenario of
country in Personal LoanDivision. In the completion of the project
many people have worked with me to carry forward my project. I
express my deep sense of gratitude to all that have directly or
indirectly helped in the successful completion of the project.
I would like to thanks whose guidance provide me to experience
the practical working and understanding, and all the YES Bank staff
for their interest, untiring efforts, unfailing courtesy,
encouragement and cooperation in making a project a success.
I would also like to give my sincere gratitude to my Faculty
Guide or Mentor, and all for providing the precious knowledge in
regard of my project.
There can possibly be no claim to the perfection in the project.
In the case I request to bear with any errors, omissions or
discrepancies that may have crept in despite due care and caution
on my part.
Executive summary
Real estate in India is currently one of the hottest investments
options in Asia. A recent survey of the real estate scenario
acknowledge the Indian metropolis of Mumbai, Bangalore and New
Delhi as the top three investors' choices for real estate
investment in Asia. But there were concerns mainly related to the
availability of necessary funds for investment and in the more
recent times, the boom in the real estate market opened the doors
for a host of realty funds from financial institutions. Prior to
five years, the real estate segment in India was neither organized
nor were there too many large institutions in the construction
industry. But now with an organized finance sector and with the
increase in transparency levels, it has become easier to create
financing vehicles.
The decrease in personal loan interest rates and an increase of
disposable income has contributed largely to an increased demand in
the residential segment. In spite of a rise in
Personal Loans interest rates and qualitative sanctions being
levied by the RBI on banks, buying interest has not waned because
Personal Loans are still cheaper than ten years ago. The retail
markets are also undergoing a defining change with the introduction
of larger retailing formats. The financial institutions also wasted
no opportunity in tapping the fund requirement catering to the
inflow of potential buyers in the retail sector. While most funds
were initially floated by financial Institutions or banks such as
SBI, LIC, HDFC, ICICI Bank, AXIS Bank and IDBI Bank, and even
retailers have now entered the real estate sector for creating more
retail facilities and have been hugely successful.
As the realty prices in India skyrockets, housing complexes
mushrooming and city landscapes becoming unrecognizable, the growth
across all real estate segments and experts estimate that demand
will remain steady at the currently high levels because of the
improving economic environment and the real estate sector is
expected to grow 30% every year. This rising property prices
encourage banks and financial institutions to lend more with the
increase in collateral values. Although the Personal Loanproviders
have hiked their rates twice in less than three months, Personal
loans continue to be nearly 45 per cent cheaper than what they were
in early 20011. Because if statistics are referred to, the interest
rates which now range between 10-12 per cent, are still much lower
than what they were ten years ago, at 16-17 per cent.
In addition to funds being raised by the Indian financial
institutions like HDFC, ICICI and IDFC abroad, the money could be
used to develop business and IT parks and townships. A study has
revealed that as many as one million homes are financed every year
in India now with an estimated home mortgages market of US$ 10.7
billion - contributing to India's phenomenal realty prospect.
Table of contents
Page No.
TITLE..............................................................................................................................................................
1
CERTIFICATES...
AUTHENTICATION CERTIFICATE 2
TRAINING ORGANIZATIONS CERTIFIACTE 3
MENTORS CERTIFICATE 4
ACKNOWLEDGEMENT.............................................................................................................................
5
EXECUTIVE
SUMMARY............................................................................................................................
6
TABLE OF
CONTENTS...............................................................................................................................
8
1.
INTRODUCTION...................................................................................................................................
9
1.1 ABOUT YES
BANK..................................................................................................................
9
1.2 MISSION AND CORE
VALUES...............................................................................................
1.3 KEY MANAGEMENT.........12
1.4 Corporate Partners 13
1.5 BOARD OF DIRECTORS15
1.6 MILESTONES...16
2. INDUSTRY
SCENARIO........................................................................................................................
18
2.1 PERSONAL LOANIN INDIA. 18
2.2 TYPES OF HOME LOANS. 20
2.3 TAX BENEFITS ON HOME LOANS. 23
3. YES BANK POWER HOME. 26
3.1 OVERVIEW. 26
3.2 LOAN PURPOSES... 27
3.3 ELIGIBILITY... 28
3.4 DOCUMENTATION... 29
3.5 LOAN AMOUNT. 33
3.6 TERMS AND CONDITION 34
3.7 FAIR PRACTICE CODE FOR LENDERS. 35
4. OPERATION FLOW OF HOME LOANS 40
4.1 ELIGIBILITY CALCULATION.. 41
4.2 EMI CALCULATION.. 42
4.3 LOAN TO VALUE TABLE......... 43
4.4 HIERARCHY OF OPERATIONS44
5. COMPARATIVE ANALYSIS OF PERSONAL LOANS ....45
5.1 FEATURES OFFERED BY OTHER BANKS.46
6. ANALYSIS AND FINDINGS...53
7. RECOMMENDATIONS AND SUGGESTIONS...54
8. SUMMARY AND CONCLUSION..55
9. REFERNCES AND BIBLIOGRAPHY...58
10. APPENDIXES..59
Overview of YES Bank
About YES BANK
YES BANK, Indias new age private sector Bank, is a
state-of-the-art high quality, customer-centric, service-driven
Bank catering to the Future Businesses of India. An outcome of the
professional & entrepreneurial commitment of its Promoter &
Founder, Dr. Rana Kapoor and his top management team, YES BANK is
Indias fourth largest private sector bank (by balance sheet dated
March 31, 2012).
Since its inception in 2004, YES BANK has fructified into a Full
Service Commercial Bank that has steadily built Corporate and
Institutional Banking, Financial Markets, Investment Banking,
Corporate Finance, Branch Banking, Business and Transaction
Banking, and Wealth Management business lines across the country,
and is well equipped to offer a range of products and services to
corporate and retail customers. YES BANK has adopted international
best practices, the highest standards of service quality and
operational excellence, and offers comprehensive banking and
financial solutions to all its valued customers. Today, YES BANK
has a widespread branch network of over 380 branches across 275
cities, with 650+ ATMs and 2 National Operating Centres in Mumbai
and Gurgaon.YES BANK has been recognized amongst the Top and
Fastest Growing Banks in various Indian Banking League Tables by
prestigious media houses and Global Advisory Firms, and has
received several national and international honours for our various
Businesses including Corporate Finance, Investment Banking,
Treasury, Transaction Banking, and Sustainable practices through
Responsible Banking. The Bank has received numerous recognitions
for its world-class IT infrastructure, and payments solutions, as
well as excellence in Human Capital.
The sustained growth of YES BANK is based on the key pillars of
Growth, Trust, Technology, Human Capital, Transparency &
Responsible Banking. YES BANK has a knowledge driven approach to
banking, and a superior customer experience for its retail,
corporate and emerging corporate banking clients. As the
Professionals Bank of India, YES BANK has exemplified creating and
sharing value for all its stakeholders, and has created a
differentiated Banking Paradigm with the vision of Building the
Best Quality Bank of the World in Indiaby 2015.
Brand Vision & Strategy
YES BANK is pursuing a Brand strategy to build one of the finest
financial services brands in India. YES BANK believes that
differentiation begins with its service and trust mark embedded in
YES, which represents the Banks fundamental goal of being a highly
service-oriented Financial Institution. The endeavor at YES BANK is
to deliver an unprecedented Delightful Banking Experience to all
its customers.
The name YES signifies
The essence of the brand by conveying all the values and
characteristics - Attractive, Smart, Simple, Serious, Reliable,
Trustworthy, Optimistic, Positive, Efficient, Universal Clutter
breaking in the banking environment, and affirmative with target
clients across business and market segments
Brand Vision and Commitment To be recognised as the Best Quality
Bank of the World in India To provide a Superior and Consistent
Banking Experience to all its customers To be a long term partner
with all stakeholders particularly customers by creating &
sharing value To be a solid and trusted financial trust mark backed
by two professional promoters and an exceptional management
team
Brand Pillars
The YES BANK brand is built around 5 Key Brand Pillars, which
epitomize the growing strengths of the Bank. All communication and
advertising has been created around these key brand pillars.
Growth: YES BANK's core promise is growth for its internal and
external stakeholders symbolised in Say YES to Growth! Trust: YES
BANK's Promoters, Investors, and Top Management team are all of the
highest pedigree with a demonstrated track record, thus inspiring
and establishing a Trust Mark Say YES to Trust! Human Capital: YES
BANK has adopted a knowledge-driven, entrepreneurial management
approach and offers financial solutions beyond the traditional
realm of banking. YES BANK's top quality Human Capital represents
the finest talent in Indian banking, chosen from India and abroad.
Technology: YES BANK is establishing the highest standards in
customer service by adopting cutting-edge, innovative Technology.
The only thing constant about YES BANK's technology is Evolution.
Transparency & Responsible Banking: YES BANK considers
Transparency and Accountability to be of utmost importance. YES
BANK has established the most stringent Corporate Governance norms,
and is committed to Responsible Banking by focusing on
Sustainability and Social Responsibility.
The YES Money PlantThe money plant, Scindapsus Aurous, derives
its name from the Roman word Aureus which means 'gold coin'. It is
believed that the money plant brings wealth and happiness, and is
most effective when shared with others.
YES BANK has been conceived in much the same spirit. We believe
in adopting a focused, knowledge-based approach to establish
long-term partnerships; thereby enabling us to 'create and share
value' that extends beyond the traditional realm of banking.
A perennial climber, the money plant is characterized by growth.
At YES BANK, it is our constant endeavor to partner the growth of
our clients, while they gain from our expertise.
Since its inception in 2004, YES BANK has sent over 350,000
money plants to our valued customers across India.
Key Management
Top of Form
Dr. Rana Kapoor
Founder, Managing Director & CEOView Profile
Bottom of Form
Top of Form
Mr. Aalok Gupta
EVP & Country Head-Retail BankingRisk ManagementView
Profile
Bottom of Form
Top of Form
Mr. Aditya Sanghi
President & Senior Managing Director - Investment
BankingView Profile
Bottom of Form
YES BANK's Corporate Partners
YES BANK has formed strategic relationships with eminent Indian
and global companies. These partnerships not only widen business
platforms but also lay the foundation for a sustainable future.
AGS Transact TechnologiesATM Deployment partners
ATOM Technologies Mobile Banking Services
Atos Wordline Merchant acquiring
Bill Desk (Indiaideas.com) Online Bill Payment Facility
Bajaj Allianz General Insurance
Bharti Airtel Telecom Connectivity
FundTechCash Management and Financial Supply Chain Solutions
CISCO Technology Innovation and Infrastructure
CMCBack Office IT Solutions
Cognizant Technology Solutions Application Development Business
Process Management Platform
CordysBusiness Process Management Suite
De La RueTeller Automation and Cash Dispenser Machines
Easy Bill Internet Banking Security Solutions
FIS Debit Card & Switching Services
IBMTechnology Hardware
Intel Technologies Wireless Fidelity (Wi - Fi) Branch Banking
Solutions
MasterCard International International Debit Cards and Prepaid
Cards
Max Life Life Insurance
Microsoft Enterprise Agreement for Servers, Desktops and other
products
MurexIntegrated Risk Management and Treasury Solution
NABARD / NABCONSStrategic Advisory for Food and Agribusiness
Sector
NCMSL Collateral Management & Warehousing Services
NewGen Software Technologies Cheque Truncation Solution
NSICFinancial Solutions and Advisory for Small Scale
Industries
NuanceSpeech Recognition Solution - Contact Centre
Nucleus SoftwareE - Retail Assets Platform
Oracle Financial Services Core Banking and Internet Banking
Solution
PortWise Internet Banking Security Solutions
Prizm Payments Services ATM Deployment Partners
Reliance Infocomm Telecom Connectivity, WAN MPLS Backbone and
Data Centre Hosting
ReutersDealing Solution and Online Forex Trading Platform
Servion Global Integration Partners for Contact Centre Phone
Banking Services
SIDBI Financial Solutions for SMEs
Sify Communications Redundant WAN MPLS Backbone , ATM
Connectivity and Data Centre Hosting
Span Across Online Tax Return Filing Solution
TATA Teleservices Telecom Connectivity
TCS Hosted Cheque Truncation Solution
Visa International Debit Cards
Virtusa Application Development Business Process Management
Platform
Wincor Nixdorf Self Service Solutions: Automated Teller Machines
(ATM) and FinancialKiosks
Wipro Total Technology Outsourcing
Yodlee Inc Online Personal Finance Management
YSE Prepaid Cards
Share Capital of YES Bank
Authorized Share Capital : Rs. 300 Crores
Paid Up Share Capital : Rs. 232.86 Crores
Shareholding Pattern (As on 30/06/2012)
Sr. No.Name of the ShareholdersNo. of Shares Held% Stake to
Total
A.Promoter Shareholding
1.Administrator of the Specified Undertaking of the Unit Trust
of India -UTI - I (SUUTI)9,72,24,37327.11
2.Life Insurance Corporation of India3,71,95,83110.37
3.General Insurance Corporation of India81,23,3312.27
4.The New India Assurance Company Limited38,06,4431.06
5.National Insurance Company Limited26,81,7400.75
6.United India Insurance Company Limited16,16,4150.45
7.The Oriental Insurance Company Limited14,89,1180.42
Total Promoter Shareholding A15,21,37,25142.43
B.Non-Promoter Holding
8.Indian Financial Institutions (IFIs)37,23,8191.04
9.Mutual Funds2,90,63,3768.11
10.Others (Individuals/Corporate Bodies/HUF/Trusts/Banks)
4,24,54,67611.84
Total Non-Promoter Indian Shareholding B7,52,41,87120.99
C. Foreign Shareholding
11.FDI Route - GDRs Issue (2005 & 2007)1,36,72,0283.64
12.Foreign Financial Institutions (FIIs) 11,19,02,72033.90
13.NRIs/OCBs/FBD56,10,6611.56
Total Non-Promoter Foreign Shareholding C13,11,85,40936.58
Total A + B + C35,85,64,531100.00
Shareholding
Share Capital - Rs. 358.56 crores
Net Worth - Rs. 8,741.76 crores
Book Value per share - Rs. 254.42
Market Price as on 11/7/08 - Rs. 665.25
Market Cap as on 11/7/08 - Rs. 23,856 crores (US $ 5.56
billion)
Board of Directors
Top of Form
Dr. Rana Kapoor
Founder, Managing Director & CEOYES BANK LTD.Chairman -
Nominations & Governance CommitteeChairman - Fraud Monitoring
CommitteeChairman Capital Raising Committee
Bottom of Form
Top of Form
Mr. S.L Kapur
Promoter Nominee Non Independent DirectorFormer Secretary,
Government of India, Ministry of Food Processing & Small Scale
Industries
Bottom of Form
Top of Form
Mr. Arun K Mago
Independent DirectorChairman Board Remuneration
CommitteeChairman Risk Monitoring CommitteeFormer Chief Secretary,
Government of Maharashtra
Bottom of Form
INDUSTRY OVERVIEW
Personal Loans in India
The Personal Loansector in India is the pi-vital role player in
the growth of the real estate scenario in India. With tax
incentives given to the housing finance sector in the annual
budget, transactions related to buying and selling of residential
properties increased considerably and was much higher as compared
to previous years.
Since the new class of buyers are relatively younger set of
customers who are more aware about legal documentation and
approvals, buyers are now more 'end-users' rather than investors;
the property market in India undergoes transformation to align
itself with global standards with an increased emphasis on quality
& cost control and documentation methods. In the current
economy of India, the real estate sector has the maximum propensity
to generate income and demand for materials, equipment and
services. It can be said that housing finance companies were formed
for co-existing with buyer's requirements of housing loans for
investing in properties. Personal Loansare made available by
financial institutions to both Indian and NRI customers at floating
and fixed rate of interest and also at attractive EMI options.
For construction or buying a new home
For home repairs and renovations
For purchase of plots
Against mortgage of property
No tax benefits are available for NRI customers unless you file
returns and thereby become eligible to avail of the tax
benefits.
Besides home loans, Commercial property loans are also available
and different financial institutions in India provide commercial
loans at different rates and different upper limits.
Real estate loans are available to builders, promoters and real
estate developers. The experience and financial standing of the
builders is taken into account before the loan is granted which is
to be returned with the minimum installments.
Today, the amount of money that a city dweller spends on rent is
roughly the same, or only slightly less than the amount he pays as
an EMI on a housing loan. Earlier the Personal Loan sector in India
was solely dependent on nationalized and public sector banks, but
the entry of public sector banks into the housing finance business
marked the beginning of the first round of interest rate cuts. And
this reduction in interest rates has enhanced the borrowing power
of customers. Moreover, HFCs are offering incentives to attract
investors like
Some companies sanction the housing loan without requiring you
to identify property as a pre-requisite for eligibility
Free accident insurance & property insurance
Waiving of pre-payment penalty
Waiving of processing fee
The realty boom in India has given a new dimension to the
finance sector in India - both in Personal Loans and Home Insurance
segments. This has not only given a competitive edge to the finance
companies to provide attractive options to customers but has also
contributed to the increased investments in the real estate sector.
This has resulted in 13 new institutions foraying into the housing
finance business in the last three years.
Major Personal LoanProviders
Banks & Public Sector Housing Finance Companies And
Financial InstitutionsState Bank of India, Bank of Baroda Housing
Finance, LIC Housing Finance, PNB Housing Finance, SBI Home
Finance, HDFC, ICICI Bank Ltd, Standard Chartered- Grind lays, IDBI
Bank Ltd, etc.
Types of Personal Loans
A person seeking investments for house or a property opts for
Personal Loans for a variety of purposes ranging from construction
to renovation. The Housing Finance Companies (HFCs) now offer
individuals with various alternatives to choose from while buying a
home loan. And the availability of Home Loans offered is as varied
as their requirements.
Personal Purchase Loans
Personal Construction Loans
Personal Improvement Loans
Personal Extension Loans
Personal Conversion Loans
Land Purchase Loans
Stamp Duty Loans
Balance Transfer Loans
Refinance Loans
Loans to NRIs
Personal Purchase Loans:This is the basic home loan for the
purchase of a new home.
Personal Construction Loans:
This loan is available for the construction of a new home on a
said property. The documents that are required in such a case are
slightly different from the ones you submit for a normal Housing
Loan. If you have purchased this plot within a period of one year
before you started
Construction of your house, most HFCs will include the land cost
as a component, to value the total cost of the property. In cases
where the period from the date of purchase of land to the date of
application has exceeded a year, the land cost will not be included
in the total cost of property while calculating eligibility.
Personal Improvement Loans:
These loans are given for implementing repair works and
renovations in a home that has already been purchased, for external
works like structural repairs, waterproofing or internal work like
tiling and flooring, plumbing, electrical work, painting, etc. One
can avail of such a loan facility of a home improvement loan, after
obtaining the requisite approvals from the relevant building
authority.
Personal Extension Loans:
An extension loan is one which helps you to meet the expenses of
any alteration to the existing building like extension/
modification of an existing home; for example addition of an extra
room etc. One can avail of such a loan facility of a home extension
loan, after obtaining the requisite approvals from the relevant
municipal corporation.
Personal Conversion Loans:
This is available for those who have financed the present home
with a Personal Loan and wish to purchase and move to another home
for which some extra funds are required. Through a home conversion
loan, the existing loan is transferred to the new home including
the extra amount required, eliminating the need for pre-payment of
the previous loan.
Land Purchase Loans:
This loan is available for purchase of land for both home
construction or investment purposes
Stamp Duty Loans:
This loan is sanctioned to pay the stamp duty amount that needs
to be paid on the purchase of property.
Balance-Transfer Loans:
Balance Transfer is the transfer of the balance of an existing
Personal Loanthat you availed at a higher rate of interest (ROI) to
either the same HFC or another HFC at the current ROI a lower rate
of interest.
Re-finance Loans:
Refinance loans are taken in case when a loan for your house
from a HFI at a particular ROI you have taken drops over the years
and you stand to lose. In such cases you may opt to swap your loan.
This could be done from either the same HFI or another HFI at the
current rates of interest, which is lower.
NRI Home Loans:
This is tailored for the requirements of Non-Resident Indians
who wish to build or buy a home or property in India. The HFCs
offer attractive housing finance plans for NRI investors with
suitable repayment options.
Tax Benefits on Personal Loans
As the Indian real estate market makes an upward swing, and
investors opt for housing finance or home loans, tax benefits
obtained from them is a lucrative option. Customers availing of
Home Loans can claim a certain portion of the interest and
principal that they pay towards the loan installments for reducing
tax liability. Resident Indians are eligible for certain tax
benefits on principal and interest components of a loan under the
Income Tax Act, 1961. Moreover, an added tax benefits under Sec 80
C on repayment of principal amount up to Rs. 1,00,000 p.a. can be
availed that can further reduce your tax liability by about Rs.
30,000 p.a.
Tax benefits can be claimed on both the principal and interest
components of the Personal Loan as per the Income Tax Act, 1961.
These deductions are available to assesses, who have taken a loan
to either buy or build a house, under Section 24(b). Interest on
borrowed capital is deductible up to Rs 150,000 if the following
conditions are satisfied:
Capital is borrowed on or after April 1, 1999 for acquiring or
constructing a property.
The acquisition/construction should be completed within 3 years
from the end of the financial year in which capital was
borrowed.
The person, extending the loan, certifies that such interest is
payable in respect of the amount advanced for acquisition or
construction of the house
A loan for refinance of the principle amount outstanding under
an earlier loan taken for such acquisition or construction.
If the conditions stated above are not fulfilled, then the
interest on borrowed capital is deductible up to Rs 30,000 though
the following conditions have to be satisfied:
Capital is borrowed before April 1, 1999 for purchase,
construction, reconstruction repairs or renewal of a house
property.
Capital should be borrowed on or after April 1, 1999 for
reconstruction, repairs or renewals of a house property.
If the capital is borrowed on or after April 1, 1999, but
construction is not completed within 3 years from the end of the
year, in which capital is borrowed.
In addition to the above, principal repayment of the
loan/capital borrowed is eligible for a deduction of up to Rs
100,000 under Section 80C from assessment year 2006-07.
Terms and conditions for availing Tax benefits on Personal
Loans1. Tax deductions can be claimed on housing loan interest
payments, subject to an upper limit of Rs 150,000 for a financial
year. Interest on the fresh loan can be claimed as a deduction,
subject o the stated upper limit.
2. An additional loan for extension/addition to the same house
and the person's deductions on the existing loan are less than Rs
150,000; he can claim further benefits from the additional loan
taken, subject to the upper limit of Rs 150,000 for a financial
year.
3. Tax benefits under Section 24 and deduction under section 80C
of the Income Tax Act can be claimed only when the payment is made.
If a person fails to make EMI payments, he cannot claim tax
benefits for the same.
4. According to the Income Tax Act, only the person who has
taken the loan can claim tax rebates.
5. The interest on Personal Loanstaken for repairs, renewals or
reconstruction, also qualifies for the deduction of Rs 150,000.
6. A husband and wife, both of whom are tax-payers with
independent income sources, get tax deduction benefits, with
respect to the same housing loan; to the extent of the amount of
loan taken in their own respective name.
7. If a person buys a house and sells it within the same
year/after 3 years, and if any profit is made, then a capital gains
tax liability arises on the same for which the individual is liable
to pay short-term capital gains tax since the sale took place in
the same year. But, if the sale had taken place after 3 years, then
a long-term capital gains tax liability would have arisen.
8. If it is proved that the Personal Loanis simply an
arrangement between the loan-seeker and the builder or with a third
party for the purpose of claiming tax benefits, then tax benefits
will not be allowed and benefits, previously claimed, will be
clubbed to the income and taxed accordingly.
9. Tax benefits on interest on housing loans are allowable only
for the original loan and for a second loan taken to repay the
first loan and not for subsequent loans. This means that if you
have already availed of one loan to refinance the original loan and
want to now avail a third loan to refinance the second loan, tax
rebate on interest payments will not be permissible. This is
because the Section 24 (1) only talks of the second loan and not of
subsequent loans. Even if you take the second loan at a rate of
interest higher than the original loan, you will be eligible for a
tax rebate on the second loan.
YES BANK
Quick and easy home loans
Overview:
YES Bank's Power Home puts an end to your Real Estate troubles.
Augment your reach and buy the house that you've set your heart
on
Features
Attractive interest rates
Balance Transfer facility
Doorstep service
Option to choose from floating rate or fixed rateBenefits given
by YES Bank:
Free personal accidental & property insurance.
No Prepayment charges.
Power Personal Loan Purposes
You can apply for Power Home for the following purposes -
Purchase of a plot of land and construction of a house
thereon
Construction of a house on plot of land already owned
Purchase of a new house or flat
Residual age of the property should not be less than 30 years
old (Home Acquisition Plan)
Extension or renovation or repair of a house or flat already
owned by self (improvement or extension plan)
Take-over of existing Housing Loan (Balance Transfer)
Pre-allotment booking finance
Loan takeover with additional refinance (Balance Transfer + top
up)
Loan to NRI for purchase of ready residential property only
Purchase of residential plots only
Power Personal loan: Eligibility
Salaried Individuals
Any individual who is in permanent service in Government or
reputed companies.
The applicant in all the cases should be above 24 years of age
at the time of loan commencement and up to the age of
superannuation.
Professionals
Professionals (ie, doctors, engineers, dentists, architects,
chartered accountants, cost accountants, company secretary,
management consultants only) can apply.
The applicant should be above 24 years of age at the time of
loan commencement and up to 65 years or less at the time of loan
maturity.
Self Employed Individuals
Any individual filing Income Tax returns can apply.
The applicant in all the cases should be above 24 years of age
at the time of loan commencement and up to 65 years or less at the
time of loan maturity.
Power Home: Documentation
Documents Required
The following documents are required along with your loan
application
In Society Cases
Society Allotment Letter.
Site Plan
Society Receipt.
Development Charges (Rs. 10/Squre yard).
In Case of Housing Board
Allotment Letter.
Possession letter.
Regularization cum NO dues Certificate.
Convenience Deed (for structure).
Perpetual Lease Deed (for Land).
In case of Development Authority
Site Plan.
DA Registered Lease Deed.
In Case of Industrial Corporation
Allotment Letter.
Site Plan.
File DocumentationPurposeSalariedOthers
Proof of identityVoter's ID card or driving license or PAN card
or photo credit card or employees ID card or defense or police or
government department ID cardVoter's ID card or driving license or
PAN card or photo credit card
Proof of
IncomeLatest salary slip showing all deductions or Form 16 along
with recent salary certificateIT returns for the last 2 years and
computation of income for the last 2 years certified by a CA
Proof of residenceBank account statement or latest electricity
bill or latest mobile or telephone bill or latest credit card
statement or latest LIC policy or insurance premium receipt or
employers letter certifying the current mailing address or latest
NSC or other similar instruments indicating the address or existing
house lease agreementBank account statement or latest electricity
bill or latest mobile or telephone bill or latest credit card
statement or latest LIC policy or insurance premium receipt or
latest NSC or other similar instruments indicating the address
Bank statement or Pass Book where salary or income is credited
Last 6 months Last 6 months
Guarantor formOptionalOptional
PROPIETORSHIP FIRM
Last three yrs. Saral form.
Computation of income.
Trading &P&L a/c.
Balance sheet.
PARTNERSHIP FIRM
The above Documents +
Partners Capital a/c.
Partnership Deed.
COMPANY
Memorandum &Articles of Association.
Board Resolution.
COMMON DOCUMENTS Six Months Saving Bank statements.
Last one year Statement in case of Current A/C.
Address proof.
Photo ID.
IF Customer is already taken any other Loan than Track Record of
that loan.
Note:
With these Documents we also take a blank cheque of Processing
fee. (That is Max.1%of loan amount)Power Personal: Loan Amount
The limits on the loan
Minimum Rs.1lac
Maximum No Limit
Margin
15% in the case of Personal Loans 25% in case of improvement or
renovation loans
Power Home: Terms and Conditions
Repayment
Repayment period for Personal Loansshall not exceed 20 years
Repayment period of pre-allotment bookings of housing loans
shall not exceed 1 year
Repayment period of improvement or renovation or extension of
existing property shall not exceed 10 years
Security
Equitable mortgage of the property to be financed by way of
deposit of title deeds.
Disbursement
The loan will be disbursed in full or in suitable installments,
taking into account the requirement of funds and progress of
construction, as assessed by the Bank directly to seller or builder
or local development authority or supplier of materials etc.
Processing charges or admission fee
Processing fee equivalent to 1% of the loan amount (applied for)
will be collected along with the application form (taxes as
applicable).
Penalty for early closure
2% of the principle outstanding in case of takeover by other
bank or HFC, otherwise nil.
Other Conditions
Bank reserves the right to reject any application without
assigning reasons thereof
The applicant will undertake to inform the Bank as and when
there is a change in address or employment
The terms and conditions mentioned above and elsewhere under the
scheme are subject to modification from time to time solely at
Bank's discretion.
Power Home: Fair Practice Code for Lenders
As directed by the Reserve Bank of India, vide circular
DBOD.No.Leg.No. BC.65/ 09.07.005/2006-07 dated March 6, 2007; the
Bank has adopted modified Fair Practice Code for lenders as
approved by the Board of Directors. The salient features of the
same are:
Applications for Loan
In the loan application form, the Bank shall provide
comprehensive information including information about fees and
charges if any payable for processing and amount of such fees
refundable in case of non acceptance of application, prepayment
options and other matter which affects the interest of the
borrowers, of all categories of loans, irrespective of the amount
of loan sought by them.
Processing
The Bank shall provide acknowledgement for receipt of all loan
applications indicating the time frame within which the application
will be disposed of.
The Bank shall verify the loan application and if additional
details / documents are required, these will be sought from the
applicant.
For all categories of loans and irrespective of any threshold
limits, the Bank will be expected to process the application
without delay. In case the application is turned down, the Bank
will convey in writing to the applicant the reasons for rejection
within one month.
Loan Appraisal and Terms and Conditions
The sanctioning authority will be expected to ensure proper
assessment of the credit application as per the extant instructions
and credit policy of the bank. The availability of adequate margin
and security will not be a substitute for due diligence on the
creditworthiness of the customer.
All the terms and conditions and other caveats will be duly
communicated by an authorized official of the Bank to the customer
in writing.
The acceptance of the customer will be obtained on the sanction
letter with the customer's signature under the caption "I/WE ACCEPT
ALL THE TERMS AND CONDITIONS WHICH HAVE BEEN READ AND UNDERSTOOD BY
ME/US".
A copy of the loan agreement along with all the enclosures
quoted in the loan agreement will be furnished to the customer at
the time of issue of the sanction letter.
The sanction letter / loan agreement will clearly state that the
credit facilities will be extended solely at the discretion of the
Bank and that drawings under the following circumstances will be
solely at the discretion of the Bank.
i) Drawings beyond the drawing power / sanctioned limits.
ii) Honoring of cheques issued for the purpose other than
specifically stipulated in the sanction.
iii) Drawings in an account once it is classified as NPA.
iv) No drawings will be allowed in case of non-compliance of the
terms and conditions by the borrower.
v) Meeting further requirements of the borrower on account of
growth in business will be subject to proper review of the credit
limits.
Disbursement of loans including changes in terms &
conditions
The disbursement will be done immediately on compliance of all
the terms and conditions of the sanction by the borrower and the
branches need not refer to the sanctioning authority for
disbursement.
Any changes in the terms and conditions of the sanction such as
interest and charges will be notified to the borrower before
effecting the changes.
Any changes in interest rate and charges will be effected only
prospectively after giving due notice to the borrower.
Post disbursement supervision
The post disbursement supervision, such as submission of
periodical reports and periodic inspection, will be stipulated at
the time of issue of the sanction letter. The sanction letter would
also mention whether the Bank or the borrower will bear the cost of
inspection.
The Bank will issue notices to the borrowers in advance in case
the Bank decides to recall the advance / accelerate the payment /
accelerate the performance under the loan agreement. Or seek
additional securities.
The Bank shall release all securities on receiving payment of
loan. However, the Bank may decide to exercise the right to set off
any legitimate right or lien for any other claim against borrower.
In case the Bank decides to retain the security, the borrower will
be notified about the remaining claims and the documents under
which the Bank is entitled to retain the security till the relevant
claim is paid / settled.
Others
The Bank will not interference in the affairs of the borrowers
except where provided for in the terms and conditions of the loan
sanction documents, such as periodic inspection, scrutiny of books
of accounts, verification of stocks and book debts, and scrutiny of
QIS statements.
In case any information not disclosed earlier by the borrower
has come to the notice of the Bank, the Bank will have the right to
elicit the necessary information from the borrower and initiate
action to protect its interest.
While, the Bank may participate in credit-linked schemes framed
for weaker sections of the society, the Bank shall not discriminate
on grounds of sex, caste and religion in the matter of lending.
In the matter of recovery of loans, the Bank shall not resort to
undue harassment such as persistently bothering the borrowers at
odd hours and use of muscle power.
In the case of receipt of request for transfer of borrowal
account, either from the borrower or from other banks / FIs which
propose to take over the loan, the Banks' consent or objection, if
any, shall be conveyed within 21 days from the date of receipt of
request.
Grievance Redressal
Though the sanction of the loans will be at the sole discretion
of the Bank, borrowers will have an opportunity to appeal against
the decision of the Bank's functionaries. Any such grievance
received from the borrower will be heard and disposed of by the
next higher authority. For this purpose the following review
structure is available to the borrower,
Grievance against decision ofReviewing Authority
Branch HeadZonal Head
VP / AVP Zonal Head
Zonal HeadPresident (Credit) for corporate advancesPresident
(Merchant Banking) for capital-market related advances andSenior
Vice President (Retail Banking) for retail advances.
Corporate Credit & Retail Loans (under Retail
Banking)Executive Director
All othersChairman and CEO
Operation Flow of Personal Loansin YES BANK
Details:
Login of Files: Details related to customer is stored in Excel
Sheet.
Field Investigation: Income Documents of customer is
verified.
Credit Appraisal Sheet: At this stage preparation of loan
eligibility and calculation of EMI take place.
Calculation of Eligibility
IIR Income to installment rates
FOIR Fixed obligation installment rate
%SalariedSelf EmployedSelf Employed (professional)
45%If net salary is7500 to9999 If net income is 8000 to9999If
net income is 7500 to9999
50%If net salary is 10000 to 19999If net salary is 10000 to
19999If net salary is 10000 to 19999
55%If net salary is 20000 above.If net salary is 20000 above.If
net salary is 20000 above.
For Example
Salary (pm) = 10,000
Then, applicable FOIR = 10,000 * 45%
= 4,500/969
= 4.64 lacs
Now, a max. limit of loan to be provided is 4.64 lacs
* For Self Employed 2 years average of Net Profit is
considered.Calculation of Net Salary
In case of salaried person we calculate the average of the six
months pay slip.(If Net Salary is variable)
In case of self employed we use the following formula-
Net income = net profit +depreciation (upto 150% of NP) + 50% of
income
from other sources +100% rental income + 20 % of
agriculture income (if cont for last 3 years)
EMI Calculation
P * r/12 (1 + r/12) n * 12
EMI =
(1 + r/12) n *12 1
Here:
P = Principal Amount
R = Rate of interest
N = No. of years
Amortization
For Example - 1, 00,000 @ 10% for 20 years
Interest = 1, 00,000 * 10 % = 10,000
Interest per month = 10,000 / 12 = 900 Rs.
Principal amount = EMI Interest
= 969 900
= 69 Rs.
Loan Kit Signature: Loan agreement is signed by customer and
PDCs is taken
from customer.
Loan to Value (Funding)Table
Types of LoansLTVMax.Years
Construction85%20
Purchase85%20
Plot/Land Purchase75%10
Repair/Extension 75%10
Land Purchase + Construction85%20
Balance Transfer85%20
NRI
Land Purchase
House Purchase10
15
Loan Tenure
S.No.CategoryTenure
1.SalariedUp to retirement/20 yrs.
(whichever is earlier)
2.Self EmployeeMaximum 15 yrs /subject to65 yrs(whichever is
earlier)
3.ProfessionalMaximum 20 yrs/subject to 65 yrs(whichever is
earlier)
Mode of Payment
PDCs (Post dated checks). S.I.(Standard Institution)
ECS (Electronic Clearance)
Hierarchy of Operations
Comparative Analysis of Personal LoansComparative Chart on
Personal LoanInterest Rates
Financial InstitutionsTenure (in years)Rate of Interest
FixedRate of Interest FloatingProcessing Charges
State Bank of India0-20 years2% to loan amount
ICICI0-25 years14%11.%2% to loan amount
LIC Housing Finance Ltd.0-20 years-10.75%2% to loan amount
HDFC0-20 years13.25%10.25%2% to loan amount
IDBI0-25 years12.00% - 12.25%10.5%1 % of Loan Amount
YES Bank0-20 years13.25%10%0%
Note:
LTV 85%
Minimum Return 1.20 lacFeatures Offered By Other Banks
SBI
Unique features:
Provision for on the spot "In principle" approval.
Loan sanctioned within 6 days of submission ofrequired
documents.
Option to avail Personal Loanas a Term Loan or as an Overdraft
facility to save on interest and maximize gains (see SBI MaxGain in
the following sections).
Option to club income of your spouse and children to compute
eligible loan amount.
Provision to club depreciation, expected rent accruals from
property proposed to compute eligible loan amount.
Provision to finance cost of furnishing and consumer durables as
part of project cost.
Repayment permitted upto 70 years of age.
Free personal accident insurance covers upto Rs.40 Lac.
Optional Group Insurance from SBI Life at concessional premium
(Upfront premium financed as part of project cost).
Interest calculatedon daily reducingbalance basis, and starts
from the date of disbursement.
Plus schemes which offer attractive packages with concessional
interest rates to Govt. Employees, Teachers,Employees in Public
Sector Oil Companies.
Special scheme to grant loans to finance Earnest Money Deposits
to be paid to Urban Development Authority/ Housing Board, etc. in
respect of allotment of sites/ house/ flat.
Option to avail loan at the place of employment or at the place
of construction.
Package of exclusive benefits:
Complimentary international ATM-Debit card
Complimentary SBI Classic/ International Credit Card.
Option for internet-banking
Concessional package under Credit Khazana for prospectiveAuto
Loan,Student Loan, Personal Loanborrowers whose accounts are
conducted satisfactorily
50% concession in charges in respect of all personal
remittances/ collection of outstation cheques
Personal loan at attractive rates under SBI Home Plus scheme
tailored exclusively for SBI Personal Loancustomers.
ICICI
Some of the special offers we have are:
Attractive loan interest rates
Personal Loanamounts suited to your needs
Personal Loantenure upto 25 years
Simplified Documentation
Doorstep Delivery of Personal Loanpapers
Sanction approval without having selected a property.
Free Personal Accident Insurance (Terms & Conditions)
Insurance options for your Personal Loanat attractive
premium
No matter what the requirement, we have an appropriate plan for
you, though most of our Personal Loanplans are for
salaried/self-employed Resident Indians. Get the best deals ever,
and finance the perfect home, only from ICICI Bank.LIC Housing
Finance
Special Features:
Loan amount from Rs. 1 Lakh onwards Low interest rates No hidden
costs Easy application & quick approvals Largest Network Tax
Benefit A financially strong and stable company we have already
sanctioned loans to over 5 lakhapplicants.With a network of more
than 100 officesin the country we are always accessible
toyou,wherever you may be.
HDFC
Personal Loan- Personal Loansfor individuals to purchase (fresh
/ resale) or construct houses. Application can be made individually
or jointly. HDFC finances up to 85% maximum of the cost of the
property (Agreement value + Stamp duty + Registration charges).
Home Improvement Loan - HIL facilitates internal and external
repairs and other structural improvements like painting,
waterproofing, plumbing and electric works, tiling and flooring,
grills and aluminum windows. HDFC finances up to 85% of the cost of
renovation (100% for existing customers).
Home Extension Loan - HEL facilitates the extension of an
existing dwelling unit. All the terms are the same as applicable to
Home Loan.
Land Purchase Loan - Be it land for a dream house, or just an
investment for the future, HDFC Land Purchase Loan is a convenient
loan facility to purchase land.
HDFC finances up to 70% of the cost of the land (Conditions
Apply). Repayment of the loan can be done over a maximum period of
10 years.
Choose from Fixed Rate or Floating Rate with options to
structure your loan as Partly Fixed or Partly Floating.
Flexible repayment options to suit your individual needs.
Loan cover Term Assurance Plan - HDFC Standard Life Insurance
Company Ltd. offers an insurance plan*, which is designed to ensure
that life's uncertainties do not affect your
family's interests and your precious home. LCTAP provides a
lump-sum payment on the unfortunate demise of the life assured.
This pure risk plan is designed in a way that the cover
decreases as you repay your Personal Loanmaking it a low cost
premium insurance plan.
*Insurance is the subject matter of solicitation.
Automated Repayment of Personal LoanEMI - You can give us
standing instructions to repay your Personal LoanEMIs directly from
your HDFC Bank Savings Account, thus, saving you the trouble of
procuring, signing and tracking post-dated cheques.
HDFC also offers In-house scrutiny of Property documents for
your complete peace of mind.
Customer privileges - If you are an existing HDFC Personal
Loancustomer, you can avail of other loans (such as Personal Loans,
Car Loans, Two-wheeler Loans and Loan against securities) at lower
interest rates.
IDBI
Advantages of IDBI Ultra Flexible Home Loans:
Maximum Funding
Flexibility of choosing between Floating or Fixed interest
rate
Attractive rate of interest
EMI on daily reducing balance
Personalized doorstep service
Simple documentation
Legal and technical assistance
Balance transfer facility
Reassessment and adjustment of applicant's loan eligibility in
case of change of income and residence status
Special insurance cover for you
You can avail of a special insurance cover on your Personal
Loanfor a small premium.
Features
Tenure of a Personal Loancan be up to 25 years for a resident
individual whereas for NRIs the maximum tenure is 15 years subject
to maximum age of 60 years at maturity.
Loan can be applied for a maximum of 90% of the property value
subject to credit discretion.
Security for the loan is a first mortgage of the property to be
financed, normally by way of deposit of the title deeds or such
collateral security as may be necessary.
Title to the property should be clear and free from encumbrance,
i.e., without any pending legal litigation adversely affecting the
ownership of the property.
Other parameters considered include an account of your age,
income, number of dependents, financial stability and co-applicants
income.
Personal LoanWith Life Insurance You can include your
spouse/parents/children as co-applicant if you require higher
eligibility subject to maximum of three applicants.
The maximum possible tenure for a Resident Indian is 25 years if
employed and 15 years if self employed. While the same for an NRI
is 15 years. In the event of your opting to pre-pay the Personal
Loanwith us, a nominal fee of 2% is payable in case, it is
transferred to another bank or housing finance company. However, no
charges are applicable if you prepay from your own sources after 6
months of commencement of EMI.
Analysis and Findings
Mortgage Market Growth. As Indias housing market continues to
grow and mature, it
will be important to monitor the market. During the rapid
expansion of the mortgage market from about 2003 to 2008, many
commercial banks eased their lending standards as they pursued
heightened demand in the market spurred by low interest rates and
rising personal incomes.
With demand outpacing housing supply, property prices in urban
areas doubled in some
neighborhoods. Prices were also bolstered by some speculative
activity in the market in from mid-2005 to about early 2008. Thus,
some commercial banks pursued aggressive growth strategies,
offering loans as high as 100% of the cost of the property.
Retail Asset Products - While working on the project I found out
and analysis that
Retail advances of YES BANK grew from Rs. 8,928 crores as at end
March'07 to Rs. 13,592 crores as at end March'08, a growth of 52%
yoy. Retail Advances account for 23% of the total Advances of the
Bank as at end March'08. The Bank has set up Retail Asset Centres
(RACs) at 70 towns and cities for focused retail lending. Lessons
and Recommendations
Commercial Viability of Underserved Segments: One of the most
important lessons that can be learned from the Project is that
mortgages for customers in the Low-Middle Income segments can be
commercially viable. This borrower segment can be more risky, but,
if underwritten and priced appropriately, the risks can be
adequately contained.
New Marketing Strategies:
Comparative advertising should be done to aware the consumers
with the benefits provided by the bank. Proper branding of Retail
Asset Center should be made for a large market capitalization and
growth.
Payment System:
If facility of Direct account transfer should be offered, then
it will make payment
system easier for customer whose accounts are in other
banks.
Funding Of Sources:
At present Axis Bank is providing 6.31% appox. retail advances
of total deposits. If increase in the percentage ratio 8-10%, then
it will allow more finances of short term loans to the customers
which will assist the bank to increase their income sources.
Others:
1. Minimum limit of Personal Loansamount should be decreased to
attract the small Personal Loansector (construction, repair
etc.).
2. Provide finances up to 85% of the cost of renovation (100%
for existing customers).
Summary/Conclusion
Finance for real estate is now easily available in India. The
property boom is not restricted to the national capital region but
it has even transcended to satellite towns and remote semi-urban
areas in and around the national capital. The number of
transactions in the real estate sector has increased a number of
times, making it profitable for the banks and other lending
institutions to offer more finance opportunities to the buyers.
In India, the most of the borrowers in Personal Loansegment fall
in the first time buyer category. It means that they are either
tenants or living with their parents in their ancestral house. As
the salaried-class is spreading and emerging stronger than ever,
more and more people are becoming capable of buying house. Their
need to get finance from banks is being taken care of by all the
major players in the market. Banks like AXIS, ICICI, SBI, LIC, HDFC
and all the nationalized banks are offering Personal Loansat
attractive rates.
The housing finance industry is getting increasingly
commoditized. Competition within the sector is ensuring that
players offer consumers flexibility and features to choose from.
Features such as adjustable rate plans, lower processing fees,
monthly rest, low interest rates, low EMI, lower margin money, no
pre-payment penalty have become common across the industry. There
is a growing trend among Banks and HFCs to include the cost of
registration, stamp duty, society charges and other associated
costs while sanctioning loans to differentiate and make the
Personal Loansproducts more attractive. This has resulted in
further lowering the threshold limit for buying a house for
differentiation of their Personal Loanproducts, companies are also
resorting to offering of free add-ons such as life insurance,
credit cards and consumer loans at reduced rates for furnishing the
house.
Several housing finance companies have now begun to offer
tailor-made loan schemes to renovate, repair, extend, convert or
otherwise improve ones home. Companies like HDFC and others provide
home improvement loans for purposes like external repairs,
water-proofing, roofing, internal and external painting, plumbing
and electrical work, tiling and
flooring, grills and aluminum windows, construction of
underground or overhead water tanks, paving of compound walls and
setting up borewells, among other things.
Some of the major players in the housing finance industry have
started organizing property fairs, wherein the projects of
different construction companies are brought together and bundled
with a lower than normal interest rate loan product. Such
initiatives are expected to result in a more organized housing
market and more value for the customer.
On the services front the housing finance companies have begun
addressing concerns of borrowers through counseling and legal
advisory services on matters pertaining to propertys title, its
technical evaluation, its pricing etc. Customer relationship
management is emerging as one of the key areas of competition to
win over new customers. Housing finance companies have been
upgrading their technology and investing in sophisticated systems
for sourcing, processing and managing information pertaining to
Personal Loancustomers.
As the scope for product differentiation is increasingly getting
limited, the housing finance companies will increasingly compete on
the strength of their service quality. Rendering technology-enabled
value added services would enable the housing finance companies to
better withstand the competition.
The procedure for taking a Personal Loanis rather easy. You can
directly approach the bank or call for a meeting to be arranged
with the bank's loan executive. This can also be done over the
Internet. The banks may ask for various proofs like those related
to your residence, income, spouse's income, number of dependants,
etc. Based on a number of parameters, the banks arrive at your
credit rating and offer you varying amount of loans.
Personal Loansin India come in various forms inviting fixed
interest rate or floating interest rates. There are hybrid loans
also that are a middle path between fixed and floating options. The
borrower can put a part of his loan amount under fixed rate and
expose the other part to the floating rates that depend on market
conditions and the interventions by the Reserve Bank of India.
The Internet as a medium of loan arrangement is fast catching up
in India. Many websites are coming up that take care of individual
and corporate finance for various purposes like buying real estate,
investments, business operations, etc. This medium of finance is
growing rapidly although it is surely in its nascent age as far as
the Indian market is concerned.
References and Bibliography
Net Sites:
www.axisbank.com www.emkayshare.com
www.indiaground.com/home_loans
www.in.ibtimes.com/articles/20070806
www.niftindia.com/Axisbanklist.html www.indiahousing.com
www.indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=330584
www.equitymaster.com/DETAIL.ASP?story=2&dateReleases:. Analyst
PPT Q1 FY09 of YES Bank. Annual Performance Report.News Paper and
Magazines:
Business World April June Editions.
4Ps of Marketing April June Editions.
Economic Times April June Editions.
Appendixes
Key Financial Performance Indicators
Q1FY13 Q1FY12 Q4FY12
Return on Assets 1.5% 1.5% 1.5%
Return on Equity 24.0% 22.1% 23.6%
NIM 2.8% 2.8% 2.8%
Cost to Income Ratio 39.5% 37.4% 39.8%
Non Interest Income to Total Income 37.9% 31.8% 37.3%
Capital Adequacy 16.5% 16.2% 17.9%
Tier I Ratio 9.2%* 9.6% 9.9%
Book Value (`) 140.7 115.5 132.5
Gross NPA 0.28% 0.17% 0.22%
Net NPA 0.06% 0.01%
PERFORMANCE HIGHLIGHTSQ1FY13 Performance highlights Sound growth
in Advances and Deposits: Total Advances grew by 16.4% to `
38,533.9 crore as at June 30, 2012 from ` 33,104.2 crore as at June
30, 2011. Customer Assets (Loans & Credit Substitutes) grew by
32.4% y-o-y to ` 49,338.7 cr as at June 30, 2012.
Current and Savings Account (CASA) deposits grew by 71.5% y-o-y
to ` 8,170.2 crore taking the CASA ratio to 16.3% as at June 30,
2012 up from 10.9% as of June 30, 2011. The Bank continues to
demonstrate increased traction in CASA on the back of enhanced
Savings Rate offerings and improvements in productivity. Retail
Banking Liabilities (CASA + Retail Banking term deposits) improved
from 27.2% of Total Deposits as of June 30, 2011 to 37.3% as of
June 30, 2012. Total Deposits grew by 15.2% to ` 50,208.1 crore as
at June 30, 2012 from ` 43,575.9 crore as at June 30, 2011. The
Banks Balance Sheet grew by 37.3% to ` 78,223.9 crore as at June
30, 2012 from ` 56,963.6 crore y-o-y.The Bank has adopted a
cautious approach to lending given the economic environment and
hence the current loan mix stands at: Corporate & Institutional
Banking accounting for 64.0% of the loan portfolio, Commercial
Banking 20.2% and Branch Banking 15.8%.
Healthy Net Interest Income (NII) Growth: NII for Q1FY13
increased by 33.3% y-o-y to
` 472.2 crore from ` 354.2 crore in Q1FY12. This was on account
of stable growth in Customer Assets and stable NIM of 2.8%.
Robust growth in Non Interest Income streams: Non Interest
Income grew by 74.3% y-o-y to ` 288.1 crore for Q1FY13 from ` 165.3
crore in Q1FY12. This was on the back of continued growth across
all income streams Financial Advisory, Transaction Banking,
Financial Markets and Retail Banking Fees & Others, that showed
firm traction y-o-y.
Strong growth in Net profit: Net profit for Q1FY13 was up 34.3%
to ` 290.1 crore as compared to ` 216.1 crore for Q1FY12 driven
primarily by sustained and diversified revenue growth. The Cost to
Income ratio was 39.5% in Q1FY13.
Consistently healthy Asset Quality: The Banks continued risk
mitigation practices results in Gross Non Performing Advances ratio
of 0.28% (Total GNPA at ` 109.5 crore)and a Net Non Performing
Advances ratio of 0.06% (Total NNPA at ` 23.7 crore)as of June 30,
2012.
Banks total loan loss coverage ratio was at 295% while specific
provisioning cover was at 78.3% as at June 30, 2012. Total
Restructured Advances of ` 196.5 crore remained flat sequentially
at 0.51% of Gross Advances as of June 30, 2012.
Strong Shareholders returns: The Bank delivered RoE of 24.0% and
RoA of 1.5% for Q1FY13. Return on Assets has been at or abover 1.5%
over the past 15 quarters, and Return on Equity has been
approximately 20% or above over the last 4 years.
Capital Funds: Tier I Capital stood at 9.2% (9.7% including
Q1FY13 PAT) and total CRAR stood at 16.5% as at June 30, 2012.
Total Capital funds grew by 33.9% to ` 9,494.9 crore as at June 30,
2012 compared to ` 7,090.3 crore as at June 30, 2011.
Expansion/ Investment Initiatives YES BANK added 25 branches
across the country during the quarter, taking the total branch
count to 381.
YES BANK further augmented its presence in Chennai with the
launch of its state-of-the-art branch at Adyar. The branch was
inaugurated by His Excellency, Dr. K. Rosaiah, the Governor of
Tamil Nadu. YES BANK added 387 ATMs to its network since 30 June
2011, taking the total count to 642 ATMs as on June 30, 2012.
Employee strength stood at 6,183 as on June 30, 2012; a growth
of 41% over June 30, 2011.
Retail Products YES SWARN: YES BANK entered into Gold Bullion
distribution, making available the yellow metal to its customers at
competitive prices and strong demand was seen among wealth
management customers.
Online Goal-based Recurring Deposits scheme: A unique variant of
the traditional Recurring Deposits scheme was launched, based on
the Systematic Investment Plan model, using the Banks Net Banking
services.
Awards & Recognitions YES BANK received the No. 1
Sustainable Bank of the Year (Asia/Pacific) award at the FT/IFC
Sustainable Finance Awards 2012, London, for the second consecutive
year and for the third time in the last 5 years
YES BANK was awarded the Performance Excellence Trophy (Service
Category) at the IMC Ramkrishna Bajaj National Quality Awards
2011.
Capital Raising Initiatives YES BANK successfully raised ` 140
crore of Innovative Perpetual Debt Instrument Tier I Capital &
` 60 crore of Upper Tier II Capital, rated ICRA AA- by ICRA &
CARE AA- by CARE.
Financial Advisory, Debt Structuring, Debt Capital Markets &
Loan Syndications YES BANK was the Sole Arranger of ` 1,500 crore
Bond issue for Hindalco Industries Ltd
YES BANK was the Joint Arranger of ` 1,500 crore Bond Issue for
Tata Steel Ltd
YES BANK was the Sole Arranger of ` 300 crore Bond issue for
United Phosphorus Ltd.
YES BANK was the Joint Arranger of ` 200 crore Bond issue for
Indian Hotels Ltd.
PROFITIBILITYFY 2011-2012
FY 2011-2012
FEE INCOME COMPOSITION
In Q1, Fees have grown particularly strongly in Capital Markets
and Corporate Banking
FY 2011-2012
FY 2011-2012
BUSINESS OVERVIEW
TOP SECTOR EXPOSURES
RankSectors % of Total
Corporate Credit
1Gems & Jewellery 8.97**
2Metals8.24
3Infrastructure7.70
4Real Estate7.68
5Financial Companies*7.33
6Trade5.64
7Textiles5.43
8Petrochemicals4.02
9Food Processing4.00
10Chemicals3.99
As on 30.6.2012* Housing Finance Companies and other NBFCs.
** 76% of this exposure is backed by cash margins RETAIL
BANKING
INCREASING REACH
Mar2007Mar2008Mar2009Mar2010
Mar2011Mar2012JUN2012
Branch Demographics
BranchesExtn. Counters
Metro
Urban
Semi-urban
Rural
236
284
147
26
15
5
0
0
TOTAL69320
RETAIL ASSETS
JUN2012
JUN2012
Retail Assets grow 52% yoy.
Retail Assets constitute 24% of the Banks total advances, as
against 23% at end June07.
Growth driven through Retail Asset Centres (RACs).
70 RACs established so far.
COMPOSITION OF RETAIL ASSETS
INTERNATIONAL PRESENCE
Representative Office opened at Dubai in May12 Branches at
Singapore, Hong Kong and DIFC, Dubai.
Representative office at Shanghai.
Total assets under overseas operations amounted to US$ 1.80
billion.
Corporate Banking, Trade Finance products, Debt Syndication and
Liability businesses.
Disbursement Process
Loan Sanction
Process
Legal & Technical valuation initiation
Field Investigation (FI)
Sourcing
Credit Appraisal Sheet
(CAS)
Punching of Files
(Finnone)
Loan Kit Signature
Payment to customer
Credit Recommendation
Login of Files
(Excel sheets)
Loan Sanction
Disbursement
Punching of details in FINNONE
For Approval
Login of Files, FI, Legal & Technical, preparation of
CAS
Sourcing of files
Operations Manager
Credit Processing Agency
Credit Manager
Credit Processing Agency
Sales Manager
The property would be purchase from the four type of
Authority
Society
Development authority
Industrial Corporation
Housing Board
In Case of Company.
In case of Partner ship firm
In case of proprietorship firm
FOR SELF EMPLOYEES
UTI-I
27.11%
LIC
10.37%
FIIs
31.21%
Others
31.31%
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