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UNIT :SBH

Updated upto 05.04.2015

With Best Compliments from

STUDY MATERIAL FOR INTERVIEW


(Updated as on 05.04.2015)

INTERVIEW CANDIDATES ARE ADVISED TO BE THOROUGH WITH


THEIR RESPECTIVE BRANCH PROFILE AND CONCERNED DESK IN
DETAIL INVARIABLY.

-HARSHAVARDHAN MADABHUSHI
GENERAL SECRETARY, ABOA

ASSOCIATE BANKS OFFICERS ASSOCIATION


UNIT: STATE BANK OF HYDERABAD
SBH BUILDINGS, HEAD OFFICE,
GUNFOUNDRY HYDERABAD-500 001
PHONE & FAX : 040- 23387537

STATE BANK OF HYDERABAD was constituted as HYDERABAD STATE BANK on


08.08.1941 under Hyderabad State Bank Act. 1941.
First Branch - Gunfoundry - 05.04.1942.
Became subsidiary of SBI on 01.01.1959 later renamed as Associate of SBI.

ORGANISATION SET-UP
TOP MANAGEMENT

Shri SANTANU MUKHARJEE


Managing Director
Shri Jasbir S Aneja
Chief General Manager
(Commercial Banking)
Shri V Sivasri
Shri I Siva Nainar
Shri B Ganesh Pai
Shri M P Tripathi
Shri Sateesh Kumar Jha
Smt Vasudha Bhat Kumar
Procedures)
Shri Subbaraman K S
Shri Shivaram B K
Shri Devendra Kumar
Smt L T Ambujakshi
Shri J Sitapathi Sarma
I)
Shri G D Rozario
Shri G.Rajendra Kumar
Shri Korda Harihar Rao
Smt M Yashoda Bai
Shri Manikandan S
Shri Anil K Malhotra
Liaison)

Shri V Viswanathan
Chief General Manager
(Retail Banking)
GM (H R & General Administration)
GM (Corporate Banking)
G M (CNW, Mumbai)
G M (Mumbai Network)
G M (New Delhi Network)
G M (Risk Mgmt and Credit Policy &
G M (Treasury) & Chief Financial Officer
G M (Bangalore Network)
G M (Hyderabad Network)
G M (Inspection and Audit)
G M (SLBC, Priority Sector, Rural Banking & F
G M (Information Technology & New Business)
G M (Stressed Assets Management)
G M (Vijayawada Network)
G M & Chief Vigilance Officer
GM (Warangal Network)
GM (Per Banking, Govt Business, PR &

Zonal Offices: 14
01) Hyderabad
02) Secunderabad
05) Aurangabad
06) Gulbarga
09) Mumbai
10) New Delhi
13) Vijayawada
14) Bangalore
Cities) 17) Head Office

03) Warangal
07) Nizamabad
11) Nanded
15) Khammam

04) Visakhapatnam
08) Tirupati
12) Chennai
16) Metro Zone (Twin

Regions headed by D.G.Ms:


Branches headed by DGMs: Gun foundry, and IFB in Hyderabad, Nariman Point &
Overseas Branch Mumbai, Commercial Branch and Scope Complex in New Delhi and
Brabourne Road Kolkata.
Forex Treasury: Mumbai

Dealing Room: Mumbai

Our New Vision and Mission:


Vision To be the most preferred and trusted Bank
Mission To achieve value based operational excellence providing customer delight
resulting in consistent superior financial performance.
Values Statements

Transparency and ethics in all dealings.

Respect and empathy for customers.

Competence and dedication in all that we do.

Nurturing a culture of learning and technological excellence.

Commitment to national and social objectives.

BANKS PERMORMANCE - 2014-15

Summary of Business Levels - Mar'15


Deposits
Segment wise
Levels
Type
Mar14

Mar'15

C&I
PER
SIB
AGR
Agg. Dep
IB Dep
Total Dep
NRI

53583
72471
2804
2336
131194
829
132023
4556

55284
60879
2330
2375
120868
1156
122024
3510

(Rs.in cr)
Growth
during
Mar15
5223
2277
280
41
7821
-103
7718
105

Growth up to
Mar'15

Mar'14

-1701
11592
474
-39
10326
-327
9999
1046

-6084
9442
225
14
3597
-84
3513
1068

Retail / Bulk / High Cost - Deposit


Type
Levels
Growth Growth up to

Bud

Bud
FY15

Bud
Shortfall

2700
14600
300
300
17900*

4401
3008
0
339
7574
327
7901
154

17900
1200

Bud Shortfall

Mar14
Retail
83149
Deposit
Bulk
38875
Deposit
High Cost
29077
Dep
Bulk
32.16
Deposit %
High Cost
24.06
Dep %
Deposits Mix
Levels
Mix
Mar14
CA
SB
CASA
CASA%
TDR

10142
26740
36882
30.51
83986

Total Advances
Levels
Advances
Mar14
C&I
Of
which
Food
SIB
SSI
of
which SBF
AGR
PER
Total

Mar'15

during
Mar15

Mar'15

Mar'14

96539

4923

13390

11047

35484

2795

-3391

-8688

19495

-1009

-9582

-7723

26.88

58bps

0.00

Mar'15
12106
30999
43105
32.86
88089

529bps
173bps 929bps
Growth
during
Mar15
3531
1517
5048
201bps
2773

33475

20085

-15575 -12184
-18877 -9295

797bps 17.00
7.36
700bps

Growth up to
Mar'15

Mar'14

Bud
FY15

Bud Shortfall

1964
4259
6223
234bps
4103

619
3568
4187
263bps
-589

3072
8497
11569
33.50
20547

1108
4238
5346
-64bps
16444

Bud
FY15

Bud Shortfall

2000

1817
900
917
3583
4400
11800*

0
0
232
2116
663
1933

50011

52776

Growth Growth up to
during
Mar'15 Mar'14
Mar'15
2973
2765
-767

1889

1698

-78

-191

-76

13158
7932
5226
13749
21968
98886

15056
9145
5911
15216
25705
108753

1740
696
1044
346
758
5817

1898
1213
685
1467
3737
9867

2086
239
1847
2286
3110
6715

Mar'15

FY15

LOAN POLICY 2015


PRUDENTIAL EXPOSURE LIMITS:
Maximum aggregate credit facilities (Fund based and non-fund based) not to
exceed Rs.15 Crores for individuals (including sole proprietary concerns) .
Maximum (FB & NFB) Rs.50 Crores for non-corporate(Partnership, Trusts,
Associations, JHF, etc).
Corporate (includes Societies also)

15% of Banks capital funds (Tier-I and Tier-II capital) for single borrower
exposure. Additional 5% for infrastructure financing.
40% of Banks capital funds for group exposure. Additional 10% for infrastructure
financing.
Exceptional Circumstances: Further 5% subject to such borrowers consenting to
appropriate disclosure in the Notes on accounts in the Bank's Annual Report.
CAPITAL MARKET EXPOSURES not to exceed:
The Bank's aggregate exposure to the capital markets shall not exceed 40% of
Banks net worth as on March 31 of the previous year. This ceiling of 40% would
apply to both fund based and non-fund based exposure to capital market in all
forms.
Within the overall ceiling of 40%, Bank's direct investment in shares, convertible
bonds / debentures, units of equity-oriented mutual funds and all exposures to
Venture Capital Funds (VCFs) [both registered and unregistered] shall not
exceed 20% of Bank's net worth as on March 31 of the previous year.
Also within the overall ceiling of 40%, the Bank's exposure to stock brokers both
fund based and non-fund based shall not exceed 10% of its net worth as on
March 31 of the previous year.

SUBSTANTIAL EXPOSURES:
Substantial exposure norms are in-house norms set within the prudential norms and are
intended to help in monitoring credit concentration. These norms should not be deemed
as a cap on further exposures and should not come in the way of booking bankable
business. The substantial exposure norms should be indicated in the loan proposals
and the Sanctioning Authority will have the necessary discretion to note the deviation in
this regard based on the justification placed before it.
Single Borrower: in excess of 7.5 % of banks capital funds (Tier I & II)
Group Borrower: in excess of 15 % of banks capital funds (Tier I & II)
Aggregate substantial exposure to individual borrowers should not exceed 300 %
of the Banks capital funds. (Tier I & II)
Aggregate substantial exposures to single & group of borrowers should not
exceed 600% of Banks capital funds (Tier I&II)

UNSECURED EXPOSURES:

These are restricted to 35% of Banks outstanding total exposure. (Where the realizable
value of the security (Primary & Collateral-tangible), as assessed by the Bank/approved
valuer/Reserve Bank Inspecting Official is ab-initio not more than 10% of the
outstanding exposure.
The exposure to sensitive commodities listed by RBI will be restricted to 5% of the
Banks net-worth as at the end of the previous year.

Loans sanctioned to Corporate against the security of shares for meeting promoters
contribution to the equity of new companies in anticipation of raising resources, should
be treated as banks investment in shares which would come under the ceiling of 40 %
of Banks net worth as on March 31st of the previous year prescribed for the banks total
exposure including both fund based and non-fund based to capital market in all forms.

INDUSTRY-WISE EXPOSURE LEVELS:


The Bank shall generally endeavour to restrict fund based exposure to a particular
industry to a maximum of 15% of the Bank's total fund and nonfund based exposure.
Within this ceiling of a maximum of 15% of the Bank's total fund and non-fund based
exposure, the actual exposure level fixed for any specific industry, is based on the near
term outlook for that industry. These industry-specific caps are reviewed periodically by
Integrated Risk Management Department taking into account significant changes
observed in the industry profile. The Industry wise caps are as under:

INDUSTRYWISE EXPOSURE CEILING


Iron & Steel
12.50%
Engineering
10.00%
Textiles
10.00%
Vegetable Oil & Vanaspathi
5.00%
Fertilizers
5.00%
Drug & Pharmaceuticals
10.00%
Gems & Jewellery
5.00%
Construction
12.00%
Petroleum
5.00%
Infrastructure :
20.00%
Comprising of
a.Power,
b.Educational Institution;
c. Hospitals/Health Care;
d. Road (Toll Road, Bridge, Rail)
e. Port, Airport,
f. Power Transmission (utilities)
(Should not exceed 10% in any of the above Sub-segments)
NBFCs
10.00%
Real Estate:
20.00%
a. Housing Finance Intermediaries
b. Commercial Real Estate (sub-limit 5%)
Others - Industry not detailed above.
10.00%
At the whole-Bank level, the total non-fund based exposures will not exceed twice
the level of the total fund-based exposure.

Statutory limit on shareholding in companies:


In terms of Sec.19 (2) of the Banking Regulation Act, 1949, no banking company shall
hold shares in any company, whether as pledgee, mortgagee or absolute owner, of an

amount exceeding 30% of the paid-up-share capital of that company or 30% of its
(Bank's) own paid up share capital and reserves, whichever is less.

BASEL I /II / III

BASEL ACCORD 1988


The BASEL-I accord implemented by all the member countries by 1992, focused on
Credit Risks & market risks. Identifying the asset category and recognizing Income
measured the Credit Risks. Provisioning for non-performing assets is a hedging
measure to absolve the losses arising on account of the credit risk factors. Similarly,
assessing the Banks ability to absolve the market risk is measured through Capital
Adequacy to Risk weighted Assets. RBI fixed the minimum regulatory capital adequacy
ratio at 9%, very conservatively over and above the BASEL requirements of Capital
Adequacy Ratio at 8%. The capital adequacy is to withstand the market Risks.
The primary accord of BASEL-1 was mainly focusing on the credit Risk as it
emphasized on the Capital adequacy Ratio and Income Recognition & Provisioning.
The market Risk and the operational Risk were not under focus and it was presumed to
the part of Banking business to check these risks on concurrent basis.

However, due to certain important factors and events in the international financial
market on account of Globalisation and liberalization amongst the member countries of
the WTO, few of which are:

Volatility of financial markets


Evolution of Technology & Dependence of Banks on the Technology
Growth of International Financial Transactions
Significant degree of financial innovation
Financial crisis in Asia & East Europe
Risks for international active banks have become complex
Fear that Capital requirements did not match a banks true risk profile,

The BASEL committee, in partial amendment to BASEL-I has advised its memberCentral
Banks of different countries to focus on the Market Risk. In pursuance to the BASEL
Committee Recommendations the Reserve Bank of India implemented a Risk coverage
tool for the Banks to hedge and check the market risks. The tool was simple and a
broad brush common for all the Banks. The Regulatory Capital adequacy Ratio in
increased from then existing 8 % to 9% (1% being the load for market Risk)

BASEL II
Full Title of Basel II: International Convergence of Capital Measurement and
CapitalStandards: A Revised Framework released by BCBS on 26 June 2004.
As per mandate of RBI all Scheduled Commercial Banks in India(except RRBs)
are required to implement the revised framework w.e.f 31/3/2008.
European version of Basel II is called Capital Requirements Directive (CRD)
Regulatory & Economic Capital Requirement
To bring a banks regulatory capital (Minimum CAR) in line with its economic
capital
o (Prudential CAR)
Economic capital is the minimum capital required to ensure that the Bank
remains solvent when faced with large unexpected losses.
The 3 Pillars of Basle II
Pillar 1: Specifies the minimum capital level that a bank needs to hold to cover
its exposure to credit, market and operational risk
Pillar 2: Concerned with supervisory review that aims to ensure that a banks
overall capital level is sufficient to cover all its risks
Pillar 3 : Details the guidelines for disclosure of information on a banks risk
profile and capital to the outside world
The 3 pillars are mutually reinforcing

BASEL-III
Basel-III is a set of standards and practices developed for internationally active banks to
ensure that they maintain adequate capital to sustain themselves during periods of
economic crisis.

Objectives:
To strengthen the regulations regarding capital base and liquidity of Banks with
the goal of promoting a more re silent banking sector.
To improve the Banking sectors ability to absorb shocks arising from financial
and economic stress.
New capital requirements - Capital ratios and deductions:
CoreTier-1: common equity
The Basel 2 rules require that a bank hold 2% of Core Tier 1 capital to risk-weighted
assets. Core Tier 1 consists of ordinary shares, retained earnings and profits.

The Basel 3 rules replace the concept with 'common equity'. This basically consists of
common shares plus retained income. The rules require banks to hold 4.5% of common
equity.
Total Tier-1: The total Tier 1 requirement increases from 4% to 6% under Basel 3,
which
mean that other types of Tier 1 instrument, known as additional going concern capital,
can account for up to 1.5% of Tier 1 capital.

Total Capital:
The total minimum capital requirement remains at 8%, subject to a new capital buffer.
However, 6% of capital must be Tier 1, which means that Tier 2 can account for not
more than 2% of capital. Tier 3, which is used solely for market risk purposes, will be
removed completely.
Liquidity rules:
The new liquidity coverage ratio and net stable funding ratio will be introduced in
accordance with the timing detailed below.
Common equity, Tier 1, total capital and national implementation:
The new capital ratios will be phased in. National implementation must begin on
January 1
2013, by which date banks should have 3.5% common equity, 4.5% Tier 1 capital and
8% total capital. In 2014 this increases to 4% common equity and 5.5% Tier 1 capital.
The full ratios (ie, 4.5% common equity and 6% Tier 1 capital) apply from January 2015.
Leverage ratio:
The 3% ratio requirement will run parallel from January 1 2013 to 2017. The committee
will track the ratio, its component factors and impact over this period and will require
bank-level disclosure of the ratio and its factors from January 1 2015. Based on the
results of the parallel run, final adjustments to the ratio will made in the first half of 2017
and it will be fully effective from 1st January, 2018.
Liquidity ratios:
The liquidity coverage ratio will be introduced on January 1 2015. The net stable funding
ratio will apply as a minimum standard from 1st January, 2018.
On paper, Basel 3 will triple the quantum of capital banks will need to maintain. But
whether it will risk-proof the banking sector is doubtful. To be sure, Basel III is an
improvement over Basel II, just as Basel II was an improvement over Basel Is rough
and ready thumb-rule of 8% capital adequacy. But the problem, as the crisis has shown
us, was not with the rules per se. The cutthroat competition among banks means it will
always be profitable to game the system. In such a scenario, the best of rules is of no
use unless such rule-based regulation is supplemented by proactive and competent
supervision.
Capital required at every branch, for its fund and non-fund exposures, is calculated
through the Centralised Capital Calculator(C-cube) software, provided by the IRM
department. The report is known as CAR(Capital Adequacy Ratio) Return under Basel II

& Basel III, which is also known as AR 6. The report for every month is generated on
completion of C-cube processing by the branches and is available under Reports in
Ccube
link. The backup register for the report also available as sub-bucket wise report in
the reports menu.
The system computes and generates the Risk Weighted Asset value (RWA) and the
capital required for the same, based on the data available in CBS. This includes master
data created by the branches, while opening the loan accounts and variable data such
as Drawing Power, Security details & value External ratings, Govt (Soverign)
guarantees (CGTMSE/ECGC) available etc. The same is consolidated at Head Office
along with Market & Operational Risk and disclosed quarterly, through Banks website
and press reports after Central Audit. Hence it is important for branches to ensure that
the data in CBS is fully accurate & will there by yield correct capital calculation and
avoiding capital leakage for the Bank.
.How is the capital calculated?
It is simply 9% of the Risk weighted Assets (11.50% from Mar 2019).
How are the risk weighted assets (RWAS) calculated?
RWAs=Net exposures (after Haircut)(column 9 in CAR report) * RW%
What is net exposure?
Net exposure for Standard asset = Suppose loan outstanding Rs.55000 backed by TDR
of Rs.10000. Net exposure is Rs.45000.
Net exposure for NPA asset = Suppose loan outstanding Rs.55000 and Provisions held
is Rs.10000. Net exposure is Rs.45000.
What is Risk Weight?
The risk inbuilt in any lending is known as the risk weight and is denominated by % (of
the exposure). For example a risk in personal loan is 125%, Gold loan under Per-125 %
& under AGR-75% etc.
What is Haircut?
The possible decline in value of a Basel security that may occur due to market
conditions. For example Gold, Debt securities etc.

What is Basel security?


These are certain identified that help to reduce the RWA of the exposure to the extent of
either the full value of the security (i.e without haircut) or the value computed, applying
some prescribed haircur. These securities are Liquid in nature and enforceable with
ease. These include Banks TDRs, Paper based securities like NSCs, KVPs, LIC
Policies assigned to the Bank, Gold ornaments and Debt Securities. Haircut is not
applicable to TDRs, NSCs, KVPs & LIC Policies. The haircut for gold is 15%.The
haircuts on Govt securities & debt securities depend on the Issue rating for the security
and the residual maturity period. As Govt securities are not currently rated in India, the
haircut is dependent on residual maturity period
Capital Adequacy Report contains two parts A & B
Part A deals with Fund based loans & advances and Part B deals with contingent
liabilities (non-fund based)
Fund based loans and advances : It is generally known that Banks lending is divided
into PER, AGR, MSME & C & I. But for Capital Adequacy calculation segments have no
relevance. Loans and advances are divided into various categories as per the inbuilt
risk and each category is assigned with a field known as B U C K E T.
RBI & SBH Approved External Credit Rating Agencies:
1. CRISIL 4. SMERA
2. ICRA 5. INDIA RATINGS (FITCH)
3. CARE 6. BRICKWORK
Branches should not consider the ratings by any other ECRAs, other than the
approved agencies.
.
PART B:
Contingent Liabilities : As the exposure itself is contingent, CCF(credit conversion
factor) is applied before the Risk weight% is applied,
What is Credit Conversion Factor (CCF)?
It is the probability percentage of non fund exposure likely to become funded exposures
in a large portfolio of non-fund exposures. The CCFs vary from facility to facility and are
prescribed by RBI in their Capital Adequacy guidelines.

PRIORITY SECTOR ADVANCES


BENCHMARKS FOR PRIORITY SECTOR:
Total priority sector advances: 40% of ANBC or credit equivalent amount of offbalance sheet exposure, whichever is higher.
Agricultural Advances:18% of ANBC(13.5% Direct + 4.5%indirect advances)
Micro enterprises within Small enterprises sector:
a) 40% of total advances to micro & small enterprises sector should go to micro
b) (Manufacturing) enterprises having investment in plant and machinery up to
Rs. 10 lacs and micro (Service) enterprises having investment in equipment
up to Rs. 4 lacs
c) 20% of total advances to small enterprises sector should go to micro
(manufacturing) enterprises with investment in plant and machinery above
Rs.10 lacs and up to Rs. 25 lacs. and micro (Service) enterprises with
investment in equipment above Rs. 4 lacs and up to Rs. 10 lacs
d) Advances to weaker sections: 10 % of ANBC
e) DRI: 1% of total advances outstanding as at the end of the previous year. it
should be ensured that not less than 40% of the total advances granted
under DRI scheme go to SC/ST. At least two third of DRI advances should
be granted through rural and semi urban branches.
f) Export Credit: It is applicable to foreign banks only 12% of ANBC.
Lending to Minorities:15% of Projected Priority Sector lending as on previous 31st
March.

WOMEN BENEFICIARIES: 5% of ANBC.


-- Direct credit extended to women.
-- Credit to women under different schemes.
-- Credit to firms, companies etc., where women have not less than 51% share in
the business.

A. AGRICULTURE
The coverage under agriculture should not be less than 18%. Of this a maximum of
4.50% may be covered under Indirect advances and the balance 13.50% should be
covered under Direct agriculture.
DIRECT ADVANCES:
1. Loans sanctioned by the banks directly to the agriculturists for the purposes of crop
production, allied activities and other investment credit (pre-harvest and post-harvest) to
individual farmers, SHGs or Joint Liability Groups of individual farmers without limit and
to others such as Corporates, partnership firms and institutions up to aggregate amount
of Rs. 2 crore are classified under direct agricultural finance.
2. Loans to farmers up to Rs.50 lakh against pledge/hypothecation of agricultural
produce (including warehouse receipts) for a period not exceeding 12 months.

INDIRECT ADVANCES:
Any loan sanctioned to an intermediary agency for on lending or providing services to
agriculture sector is classified under indirect agricultural finance. The examples are
financing of:
1. Dealers in agro-inputs (Fertilisers & pesticides). Loans up to Rs. 5 Crores.
2. In case of loans sanctioned to Corporates, partnership and institutions more than
Rs.2 crore per borrower the entire loan has to be treated as Indirect finance to
agriculture.
3. PACS/FSS/LAMPS
4. Loans to food and agro-based processing units with investments in plant and
machinery up to Rs. 10 crores, undertaken by those other than individuals, SHGs, and
cooperatives in rural areas.
5. Investment made as on March 31st 2007, in bonds floated by NABARD for the
purpose of financing of agriculture or allied activities.
6. Construction and operation of storage facilities
7. Agro custom service
8. Loans up to Rs.5.00 cr. to Co-operative marketing societies of farmers for disposing
of the produce of members.
9. Dealers in irrigation systems located in rural & semi urban areas, dealing with these
items exclusively and with limits up to Rs.30.00 lac
10. Lending to NBFCs for on-lending to agriculturists.
11. Deposits held in Rural Infra structure Development fund (RIDF) as on date
12. Finance for setting up of Agri clinics and Agri business Centres.
13. Finance for hire purchase schemes for distribution of agricultural machinery and
implements.
14. Loans to Arthias (commission agents in rural/semi-urban areas for extending credit
to farmers/SHGs/JLGs
15. Credit outstanding under loans for general purposes under General Credit Cards
(GCC) and Overdrafts up to Rs.25000/- per account granted against No Frills
Accounts, in rural and semi urban areas
16. Loans already sanctioned and outstanding as on date to State Electricity Boards
and Power Distribution Corporations/Companies.
17. Loans to National Co-operative Development Corporation(NCDC)
18. Loans granted to NGO/MFI/ for on-lending to individual farmers or SHGs/JLGs

Overdraft in PMJDY accounts


It has been decided that overdrafts extended by banks upto Rs.5,000/- in Pradhan
Mantri Jan-Dhan Yojana (PMJDY) accounts will be eligible for classification under
priority sector advances (others category) as also weaker sections, provided the
borrowers household annual income does not exceed Rs. 60,000/- for rural areas and
Rs.1,20,000/- for non-rural areas.
Lending to persons with disabilities will be eligible for classification under weaker
sections category.

Micro, Small & Medium Enterprises Development (MSMED) Act, 2006


Definition of Micro, Small and Medium Enterprises
(a) Manufacturing Enterprises i.e. Enterprises engaged in the manufacture or
production, processing or preservation of goods as specified below:
(i) A micro enterprise is an enterprise where investment in plant and machinery does not
exceed Rs. 25 lakh;
(ii) A small enterprise is an enterprise where the investment in plant and machinery is
more than Rs. 25 lakh but does not exceed Rs. 5 crore; and
(iii) A medium enterprise is an enterprise where the investment in plant and machinery
is more than Rs.5 crore but does not exceed Rs.10 crore.
(b) Service Enterprises i.e. Enterprises engaged in providing or rendering of services
and whose investment in equipment (original cost excluding land and building and
furniture, fittings and other items not directly related to the service rendered or as may
be notified under the MSMED Act, 2006) are specified below.
(i) A micro enterprise is an enterprise where the investment in equipment does not
exceed Rs. 10 lakh;
(ii) A small enterprise is an enterprise where the investment in equipment is more than
Rs.10 lakh but does not exceed Rs. 2 crore; and
(iii) A medium enterprise is an enterprise where the investment in equipment is more
than Rs. 2 crore but does not exceed Rs. 5 crore.
Particulars

Activity

Manufacturing Enterprises
Enterprises
engaged in the
manufacture or
production,
processing
or
preservation of
goods where

Service
Enterprises

Enterprises
engaged
in
providing
or
rendering
of
services
and
whose

Micro
Enterprise
the
original
investment in
Plant
&
Machinery up
to
Rs.25.00
lacs
(SSI
Segment)
the
original
investment in
equipment up
to
Rs.10.00
lacs

(SBF
Segment)

Small
Enterprise
the
original
investment
in
Plant
&
Machinery
above RS.25.00
lacs & up to
Rs.500.00 lacs

Medium
Enterprise
the
original
investment
in
Plant
&
Machinery
above RS.25.00
lacs & up to
Rs.500.00 lacs

(SSI Segment)
the
original
investment
in
equipment
above Rs.10.00
lacs & up to
Rs.200.00 lacs

(C&I Segment)
the
original
investment
in
equipment
above Rs.20.00
lacs & up to
Rs.500.00 lacs

(SBF Segment)

(C&I Segment)

C. SMALL ENTERPRISES (Servicing) SECTOR:


1. Small (service) Service: Enterprises engaged in providing/rendering of services and
whose investment in equipment does not exceed Rs. two crores.
2. Micro (Service) Enterprises: Enterprises engaged in providing/rendering of services
and whose investment in equipment does not exceed Rs. 10 lacs.
3. Limits of Bank loans up to Rs. 5 Crores per borrower/unit to Micro ansd Small Service
Enterprises in terms of investment criteria in equipment under MSMED Act, 2006.
4. The small and micro service enterprises shall include small road & water transport
operators, small business, professional & self-employeed persons, and all other
serviced enterprises.
5. Khadi and Village industries sector(KVI) All advances granted to units in the KVI
sector, irrespective of their size of operations, location and amount of original
investment in plant and machinery, such advances will be eligible for consideration
under the sub-target (60%) of small enterprises segment within the priority sector.
6. Indirect Finance under small enterprises (Mfg. & Services):
a) Persons involved or advance to co-operatives of producers in the decentralised
sector artisans village and cottage industries.
b) Loans to co-operatives of producers in the decentralized Sector viz. artisans village &
cottage industries.
c) Loans granted to MFIs for on-lending to small and micro enterprises.
D. Retail Trade:
a) Advances granted to retail traders dealing in essential commodities (fair price shops)
consumer co-operative stores. and
b) Advances granted to private retail traders with credit limits not exceeding Rs. 20 lacs
E. Micro credit:
Loans not exceeding Rs. 50,000/ per borrower provided by banks either directly or
indirectly through a SHG/JLG mechanism or to NBFC/MFI for on-lending up to
Rs.50,000/ per borrower.
F. Loans to poor indebted to informal sector
Loans to distressed persons (other than farmer) to prepay their debt to non-institutional
lenders, against appropriate collateral or group security
G.HOUSING LOANS
a) Housing loans up to Rs.25 lacs in metropolitan centres and Rs.15 lakh in other
centres to individuals for [purchase/construction of a dwelling unit per family, excluding
loans granted by banks for its employees.
b) Loans up to Rs.2,00,000/- in rural and semi-urban and Rs.5,00,000/ in urban and
metro areas for repair of houses to individuals,
c) Assistance given to any governmental agency for construction of dwelling units or for
slum clearance and rehabilitation of slum dwellers, subject to a ceiling of Rs. 10 lacs of
loan amount per dwelling unit.
d) Assistance given to a Non-Govt. agency approved by the NHB for the purpose of
refinance for construction /reconstruction of dwelling units or for slum clearance and
rehabilitation of slum dwellers, subject to a ceiling of loan component of Rs. 10 lacs per
dwelling unit.

H. EDUCATION LOANS:
Education loans to individuals (not institutions) for educational purposes up to Rs. 10
lacs for studies in India and Rs. 20 lacs for studies abroad. Loans granted by banks to
NBFCs for onlending to individuals for educational purposes up to Rs. 10 lacs for
studies in India and Rs.20 lacs for studies abroad.
I.ADVANCES TO WEAKER SECTIONS:
In order to ensure that more underprivileged sections in the priority sector are given
proper attention in the matter of allocation of credit it should be endured that the
advances to the weaker sections reach a level of 25% of priority sector advances or
10% of the NBC. Weaker sections include:
a) Small and marginal farmers with land holdings of 5 acres and less and
b) Landless borrowers, tenant farmers and share croppers.
c) Artisans,village and cottage Industries where individual credit limits do not exceed
Rs.50,000/d) Beneficiaries of SGSY, NRLM (National Rural Livelihood Mission)
e) Loans to SC/ST
f) Loans under DRI, SLRS & SHGs
g) Loans to distressed poor to prepay their debt to informal sector, against appropriate
collateral or group security;
h) Loans to Minorities under (a) to (g) above
i) Loans to individual woman beneficiaries up to RS.50000/- per borrower.
J. State Sponsored organisation for Scheduled Castes/Scheduled Tribes:
Advances sanctioned to State Sponsored organisation for Sc/ST for the specific
purpose of purchase and supply of inputs to and/or the marketing of the outputs of the
beneficiaries of these organisations.
K. Export credit:
This category will form part of priority sector for foreign banks only. Export credit
extended by for Banks with less than 20 Branches will be reckoned for Priority Sector
target achievement.
L. Others
Loans not exceeding Rs. 50,000/- per borrower providre to individuals or their SHG/JLG
provided the household income of he borrower doesnot exceed Rs. 60,000 in rural
areas and Rs. 1,20,000 in non-rural areas.
Adjusted Net Bank Credit (ANBC) denotes Net Bank Credit (NBC) plus Investments
made by banks in non-SLR bonds held in HTM (Held to maturity) category. Investments
made by banks in the Recapitalization bonds floated by Govt. of India will not be taken
into account for the purpose of calculation of ANBC. Outstanding FCNR (B) and NRNR
deposit balances will no longer be deducted for computation of ANBC for priority sector
lending purposes. Inter-bank exposures will not be taken into account for the purpose.
Existing investments, as on the date of circular, made by banks in non-SLR bonds held
in HTM category will not be taken into account for calculation of ANBC, up to March 31,
2010.However, fresh investments by banks in non-SLR bonds held in HTM category will
be taken into account for the purpose. Deposits placed by banks with NABARD/SIDBI,

as the case may be, in lieu of non-achievement of priority sector lending targets/subtargets will not be treated as investment in non-SLR bonds held in HTM category.

DIFFERENTIAL RATE OF INTEREST (DRI/DIR) ADVANCES

To assist poorest of the poor and to bring them above the poverty line DIR scheme was
launched in the year 1972. DRI is a scheme classified as priority sector under which
banks sanction loans to selected low-income group of borrowers among weaker
sections of the community for productive endeavors at 4% p.a. rate of interest. The
scheme is operative throughout the country and 1% of total advances outstanding as at
the end of the previous year should be of DIR loans. It should be ensured that not less
than 40% of the total advances granted under DRI scheme go to SC/ST. At least two
third of DRI advances should be granted through rural and semi-urban branches. To be
eligible, the annual income of the family should not exceed Rs. 24,000/- in urban and
semi-urban areas and Rs. 18,000/- in rural areas.
- Rs.15,000/- as TL or WC or both
- Rs.20,000/- for Housing and also for Physically Handicapped (Rs.5,000/- for purchase
of artificial limbs in addition to Rs.15,000)

Repayment period is fixed depending upon the income generated to the extent of
maximum 5 years including gestation period.

NON-PERFORMING ASSETs
Prudential norms relating to income recognition, asset classification and provisioning
were recommended by Narasimhan Committee (1991)
NON-PERFORMING ASSET
Interest/installment not recovered for a period exceeding 90 days
A/c out of order for more than 90 days in case of CC/OD
Out of order If the outstandings remain continuously in excess of
sanctioned
An NPA is one, which ceases to generate income.
limit/DP or where outstandings are less than sanctioned limit/DP but there are
no
credits continuously for 90 days as on the date of Balance Sheet or credits are
not enough to cover the interest debited during the same period.
Where transactions are allowed in CC a/c continuously for 90 days based on
DP
calculated from stock statements older than three months;

If regular/ad-hoc credit limits are not reviewed/renewed within 180 days from the
due date;
Any amount to be received remains overdue for more than 90 days for other a/cs
ACC:
(a) Long duration crops (crop season more than 1 year) _ Non-payment of
installment of principal or interest for one crop season;
(b) Short Duration Crops two crop seasons.
A short Duration crop is one, which is not a long duration crop.
The crop season for each crop, which means the period up to harvesting of
the crops raised, would be as determined by the SLBC in each state
ATLs:
Depending upon the crops raised by the agriculturists above norms to be applied
for ATLs also.

In respect of agricultural loans, other than those specified(activities
which are not related to cultivation like poultry, dairy, etc) and term
loans given to Non- agriculturists, NPA norm is 90 days delinquency. For
others it is as applicable for ACC (i.e., depending on the crop raised by the
borrower).

Substandard -

Which is classified as NPA for a period not exceeding 12 months?

Doubtful -

Asset that is classified as NPA for a period exceeding 12 months;


or if the value of security is eroded by more than 50%

Loss

Classified by the Internal/external auditors, or value of security is


less than 10% of the outstanding in the account;.

Provisioning on NPAs:
1. Sub-standard-Secured Loans
-Unsecured Loans
2. Doubtful
-

3. Loss Assets

15%
25% (If value of tangible
security is less than 10% of O/s)

Unsecured Portion
100%
Secured Portion- Upto 1 year
25%
- 1-3 years
40%
- Above 3 years
100% (with effect from 1.4.2006)
100%

STRESSED ASSETS.
The following assets are called Stressed Assets:
All Sub-standard Assets; and
All Special Mention Accounts (SMA)
Focus of review of SA will be on prevention of slippage of SMAs and up
gradation of Sub-standard accounts by restructuring viable ones.

Special Mention Accounts (SMA)


Accounts where interest / inst. not serviced for 7 to 29 days ( Category I)
Accounts where interest / inst. not serviced for 30 to 59 days (Category II)
Accounts where interest / inst. not serviced for 60 to 89 days (Category III)
Standard Assets Provisioning:

Direct Agr & SME sector

0.25%

Commercial Real Estate (CRE)

1.00%

CRE Residential Housing


Other advances

:
:

1.75%
0.40%

Corporate Debt Restructuring (CDR)

It is a non-statutory and voluntary mechanism based on Debtor/Creditor and interCreditor Agreements;


To ensure timely and transparent mechanism for restructuring of the corporate debts
of viable entities facing problems outside the purview of BIFR, DRT and other legal
proceedings for the benefit of all concerned;
It covers only multiple banking account/syndication/consortium accounts
with outstanding exposure of Rs.10 crores and above by banks and Financial
Institutions both fund based and non-fund based exposure.
Applicable only to Standard, Substandard & selectively doubtful category;
Willful default cases should not be considered;
Reference to CDR can be made by the secured creditors who have minimum 20%
in lending or by the concerned corporate supported by a bank or FI with 20%
stake in lending;
CDR Standing Forum will be the representative general body of all the banks
and Fis participating in the CDR system. It is a self empowered body which will
lay down policies and guidelines and monitor the progress.

The approach to restructuring under CDR mechanism is significantly different from


the conventional approach of concessionary funding of existing dues. In addition to
reliefs and concessions, such an approach would also involve the following:

Arriving at the quantum of outstanding debt that can be retained for


satisfactory Debt Service coverage and converting the balance
amount into equity or equity linked instruments.
Investment in equity as an alternative to sacrifices(waiver, write off etc)
Induction of strategic investor(s)/co-promoter(s)
Broad basing of Board, appointment of independent chairman,
appointment of professional CEO etc.
Appointment of whole time Finance Director
Setting up of Asset Sale Committee
Appointment of special Concurrent Auditor
Change of Statutory Auditors
Appointment of lenders Engineer / Monitoring Agency
Right to accelerate repayment / revoke package
Right of recompense
Co-ordination issues between lenders sharing of security, escrow
account, etc.,

THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND


ENFORCEMENT OF SECURITY INTEREST ACT 2002
FOR INVOCATION OF MORTGAGE UNDER SARFAESI PROCEDURE;
.Issuing Demand Notice:
The Demand Notice shall be served by delivering or transmitting at the place
where the borrower or his agent, empowered to accept the notice, actually and
voluntarily resides or carries on business or personally works for gain by
Registered post with acknowledgement due/speed post/courier/other means
like fax or e-mail;
If the service cannot be made as above, the service shall be effected by affixing
a copy of the demand notice on the outer door or some other conspicuous part
of the house or building in which the borrower or his agent ordinarily resides or
carries on business or personally works for gain and also by publishing the
contents of the Demand Notice in two leading newspapers, one in vernacular
language, having sufficient circulation in that locality;
Where the borrower is a body corporate, the demand notice shall be served on
the Registered Office or any of the branches of such body corporate;
Any other notice in writing to be served on the borrower or his agent by
authorised officer, shall be served in the same manner as provided in this rule;.

Where there are more than one borrower, the demand notice shall be served on
each borrower
After issue of Demand Notice:
If the amount mentioned in the demand notice is not paid within the time specified
therein, the authorised Officer shall proceed to realise the amount by any one or
more of the following measures:
In case of movable assets, the authorised officer shall take possession of such
property in the presence of two witnesses after a Panchanama drawn and signed
by the witnesses as per prescribed format.

An inventory of the property taken possession should be prepared in the


prescribed
proforma and a copy to be delivered to the borrower.

The authorised officer shall keep the property taken possession under his own
custody or in the custody of any person authorised by him and take care of the
property as an owner of ordinary prudence would.
16.4 If such property is subject to speedy or natural decay or the expense of
keeping such property is likely to exceed its value, the authorised officer may sell
it at once.
The authorised officer shall take steps for preservations and protection of secured
and insure them till they are sold or otherwise disposed of.
In case any secured asset is
A debt not secured by negotiable instrument;
A share in a body corporate;
Other movable property not in the possession of the borrower
except the property deposited in or in the custody of any Court or
any like authority;
The authorised officer shall obtain possession or recover the debt by service
of notice as under:
(a) In the case of a debt, prohibiting the borrower from recovering the
debt
or any interest thereon and the debtor from making payment thereof
and directing the debtor to make such payment to the authorised
officer;
(b) In the case of shares in a body corporate, directing the borrower to
transfer the same to the secured creditor and also the body corporate
from not transferring such shares in favour of any person other than
the secured creditor. A copy of the notice so sent may be endorsed
to the concerned body corporates Registrar to the issue or share
transfer agents, if any;

(c) In the case of other movable property (except above), calling upon
the borrowers and the person in possession to hand over the same
to the authorised officer;
(d) The authorised officer shall take movable secured assets other than
those covered above by taking possession of the documents
evidencing title to such secured assets.
Valuation of movable assets: After taking possession and before sale, the authorised
officer shall obtain the estimated value of the movable secured assets and thereafter
fix the reserve price of the assets to be sold.

Sale of movable secured assets:


The authorised officer may sell the movable secured assets taken possession in
one or more lots by adopting any of the following methods to secure maximum
sale price for the assets to be sold;
a) Obtaining quotations from parties dealing in the secured assets or otherwise
interested in buying such assets; or
b) Inviting tenders from the public;
or c H o l d i n g public auction; or
d) By private treaty;
The authorised officer shall serve to the borrower a notice of thirty days for sale
of the movable secured assets;
If the sale of such secured assets is being effected either by inviting tenders
from the public or by holding public auction, the secured creditor shall cause a
public notice in two leading newspapers, one in vernacular language, having
sufficient circulation in that locality by setting out the terms of sale, which may
include
a) Details about the borrower and the secured creditor;
b) Description of movable secured assets to be sold with identification marks or
numbers, if any, on them;
c) Reserve Price, if any;
d) Time and manner of payment;
e) Time and place of public auction or the time after which sale by any other mode
shall be completed;
f) Depositing earnest money as may be stipulated by the secured creditor;
g) Any other thing which the authorised officer considers it material for a purchaser
to know in order to judge the nature and value of movable secured asset;
Sale by any methods other than public auction or public tender, shall be
on such terms as may be settled between the parties in writing.

Issue of Certificate of sale:

Where movable secured assets are sold, sale price of each lot shall be paid as per
the terms of the public notice or on the terms as may be settled between the parties,
as the case may be and in the event of default of payment, the movable secured
assets shall be liable to be ordered for sale again;
On payment of sale price, the authorised officer shall issue a certificate of sale in the
prescribed form specifying the movable secured assets sold, price paid and the name
of the purchaser and thereafter the sale shall become absolute. The Certificate of
Sale so issued shall be prima facie evidence of title of the purchaser.
Immovable secured assets:
The authorised officer shall take possession of immovable secured assets by
delivering a possession notice prepared as per prescribed form and deliver
to the borrower;
Affix a copy of the possession notice on the outer door or at such
conspicuous place of the property;
The possession notice shall also be published in two leading newspapers, one in
vernacular language having sufficient circulation in that locality, by the authorized
officer;
In the event of possession of immovable property is actually taken by the
authorised officer, such property shall be kept in his own custody or in the
custody of any person authorised by him. The authorised officer shall take steps
for preservation and protection of secured assets and insure them, if necessary,
till they are sold or otherwise disposed of;
The authorised officer shall obtain valuation of the property from an approved
valuer and sell the whole or any part of such immovable property by any of the
following methods
Obtaining quotations from parties dealing in the secured assets or otherwise
interested in buying such assets; or Inviting tenders from the public; or c)
Holding public auction; or By private treaty;
The authorised officer shall serve to the borrower a notice of 30 days for sale of
the immovable secured assets;
If the sale of such secured assets is being effected either by inviting tenders from
the public or by holding public auction, the secured creditor shall cause a public
notice in two leading newspapers, one in vernacular language, having sufficient
circulation in that locality by setting out the terms of sale, which may include
The secured debt for recovery of which the property is to be sold

Description of immovable secured assets to be sold including the details of the


encumbrances known to the secured creditor
Reserve Price, below which the property may not be sold
Time and place of public auction or the time after which sale by any other mode
shall be completed
Depositing earnest money as may be stipulated by the secured creditor
Any other thing which the authorised officer considers it material for a purchaser
to know in order to judge the nature and value of the property;
Every notice of sale shall be affixed on a conspicuous part of the immovable
property and may, if the authorised officer deems it fit, put on the web site of the
secured creditor on the Internet;
Sale by any method other than public auction or public tender, shall be on such
terms as may be settled between the parties in writing;
No sale of immovable property under these rules shall take place before the
expiry of thirty days from the date on which the public notice of sale is published
in newspapers or notice of sale has been served to the borrower;
The sale shall be confirmed in favour of the purchaser who has offered the
highest sale price in his bid or tender or quotation or offer to the authorised;
No sale shall be confirmed, if the amount offered is less than the reserve price;
If the authorised officer fails to obtain a price higher than the reserve price, he
may, with the consent of the borrower effect the sale at such other price;
On every sale of immovable property, the purchaser shall immediately pay a
deposit of 25% of the amount of sale price and in case of default the property
will be sold again.
The balance amount shall be payable on or before the 15th day of confirmation
of sale of the immovable property or such extended period as may be agreed
upon in writing between the parties.
In default of payment within the period mentioned, the deposit shall be forfeited
and the property shall be resold;
On confirmation of sale by the secured creditor and if the terms of payment have
been complied with, the authorised officer exercising the power of sale shall issue
a certificate of sale of the immovable property in favour of the purchaser in the
prescribed form.

1.1.1 Representation by the Borrower

(3A) If, on receipt of the notice under sub-section (2), the borrower makes
any representation or raises any objection, the secured creditor shall
consider such representation or objection and if the secured creditor comes
to the conclusion that such representation or objection is not acceptable
or tenable, he shall communicate within fifteen days of such representation
or objection the reasons for non-acceptance of the representation or objection
to the borrower.

2. The reason so communicated or the likely action of the secured creditor at the
stage of communication of reason shall not confer any right upon the borrower
to prefer an application to the DRT under Section 17 or the Court of the District
Judge under Section 17A.
Debts Recovery Tribunals (DRT)
The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 was passed in
the year 1993. The DRTs are established to avoid the difficulties faced by the Banks
in recovering the amounts through regular Civil Courts. The Act applies to dues of not
less than Rs.10.00 lakhs. The Act applies to whole of India except Jammu & Kashmir.
The DRTs follow the summary procedure and only guided by the principles of natural
justice
Appellate Tribunal
Any person aggrieved by an order made by the DRT may prefer an appeal to an
Appellate Tribunal having jurisdiction in the matter. Such appeals should be preferred
within the period of 45 days from the date of which the copy of the order is made and
received by him. If the appeal is preferred by the defendant (borrower), he has to
deposit 75% of the amount of debt due from him as determined by the DRT. However,
the Appellate Tribunal may reduce or waiver the amount to be deposited.

IMPORTANT TOPICS
REPO / REVERSE REPO: Repo and Reverse Repo are Liquidity Adjustment Facility
(LAF) tools used by Reserve Bank. Repo is an instrument meant for injecting the funds
required and Reverse Repo for absorbing the excess liquidity of the Banks.
REPO RATE: This is the rate at which RBI buys securities from the Banks and this is
lending by RBI to inject liquidity in the system under LAF. The current Repo rate is
7.50% w.e.f. 04th March 2015.
REVERSE REPO RATE: This is the rate at which Banks lend their surplus funds to RBI.
In other words it is borrowing by RBI by sale of securities. RBI absorbs liquidity in the
system through Reverse Repo technique under LAF, The current Reverse Repo rate
is 6.50% w.e.f. 04th March 2015.

Marginal Standing Facility (MSF): The current rate is 8.50% w.e.f. from 04th March
2015. In order to provide greater liquidity cushion, RBI has will decid the borrowing limit
of SCBs under the MSF from 1% to 2% of their NDTL outstanding.
CRR: Cash Reserve Ratio is the amount of funds that the banks have to keep with the
RBI. If the central bank decides to increase the CRR, the available amount with the
banks comes down. The RBI uses the CRR to drain out excessive money from the
system. Scheduled banks are required to maintain with the RBI an average cash
balance, the amount of which shall not be less than 4% of the total of the Net Demand
and Time Liabilities (NDTL), on a fortnightly basis. The RBI has keep the CRR at 4%
in the recent monetary policy review
SLR: Every bank is required to maintain at the close of business every day, a minimum
proportion of their Net Demand and Time Liabilities as liquid assets in the form of cash,
gold and un-encumbered approved securities. The ratio of liquid assets to demand and
time liabilities is known as Statutory Liquidity Ratio (SLR). RBI is empowered to
increase this ratio up to 40%. An increase in SLR also restrict the banks leverage
position to pump more money into the economy. SLR Ratio reduced from 22.0 0% to
21.50% of their NDTL w.e.f the fortnight beginning 07th February 2015.
BANK RATE: Bank Rate is the rate at which central bank of the country (in India it is
RBI) allows finance to commercial banks. Bank Rate is a tool, which central bank uses
for short-term purposes. The now Bank Rate was set at 8.50% w.e.f 04th March
2015.
IFRS: All scheduled commercial banks will convert their opening balance sheet as at
April 1, 2013 in compliance with the IFRS converged IASs.
CREDIT TO NRE ACCOUNTS: AD Category-I banks have been advised to allow
repayment of loans taken by individual residents in India from their close relatives
outside India, by credit to the non-resident (external) rupee (NRE) / foreign currency
non-resident (bank) [FCNR(B)] account of the lender concerned subject to the
conditions that The loan to the resident individual was extended by way of inward remittance in forex
through normal banking channels or by debit to the NRE/ FCNR(B) account of the
lender; and
The lender is eligible to open NRE/FCNR(B) account within the meaning of the Foreign
Exchange Management (Deposit) Regulations, 2000. Such credit would be treated as
an eligible credit to the NRE / FCNR(B) a/c.
LIBERALISED REMITTANCE SCHEME (LRS)
LRS increased to $2,50,000: Encouraged by foreign exchange reserves touching
record levels, the RBI doubled the annual overseas investment ceiling for individuals to
USD 2,50,000. The Liberalized Remittance Scheme (LRS) allows residents to acquire
and hold shares, debt instruments or other assets outside India without prior approval of
the RBI.
The LRS for Resident Individuals is available to all resident individuals including minors.
In case the remitter is a minor, the LRS declaration form should be countersigned by the
minors natural guardian.

Remittances under the facility can be consolidated in respect of family members subject
to individual family members complying with the terms & conditions of scheme.
Remittances under the scheme can be used for purchasing objects of art subject to the
provisions of other applicable laws, such as, the extant Foreign Trade Policy.
REGULATORY CAPITAL INSTRUMENTS: Earlier Banks were permitted to issue
capital instruments with a step-up option as under:
Innovative Perpetual Debt Instruments (IPDI) and Upper Tier- 2 debt capital
instruments;
Perpetual Cumulative Preference Shares (PCPS), Redeemable Non-Cumulative
Preference Shares (RNCPS) and Redeemable Cumulative Preference Shares as part
of Upper Tier- 2 Preference shares and;
Subordinated debt as Tier - 2 capital
The Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board
(FSB) undertook an extensive review of the regulatory framework in the wake of the
sub-prime crisis. It advised that banks should not issue Tier 1 or Tier 2 capital
instruments with step-up option so that these instruments continue to remain eligible
for inclusion in the new definition of regulatory capital. However, such instruments can
be issued with only call option as per existing rules.
COUNTERFEIT BANKNOTES: RBI has decided to revise the procedure to be followed
on detection of counterfeit banknotes as follows:
For cases of detection of counterfeit notes up to 4 pieces, in a single transaction, a
consolidated report as per the format prescribed should be sent to the police authorities
at the end of the month.
For cases of detection of counterfeit notes of 5 or more pieces, in a single transaction,
FIRs should be lodged with the Nodal Police Station / Police Authorities as per
jurisdiction.
PPF SCHEME AMENDMENTS
1) Maximum amount of deposit in a financial year in a PPF account in a financial year
has been increased from Rs.1,00,000 to Rs.1,50,000.
2) Interest Rate on Loan: Will be 2% p.a. more than the rate being paid.
3) Interest Rate on Deposits: The subscriptions made to the fund on or after the
1.12.2011 and balances at the credit of the subscriber shall bear interest @ of 8.6% p.a.
This has been increased to 8.8% w.e.f 1-4-2012.
Further, Govt. has decided that interest at applicable rates would be paid on those PPF
(HUF) a/c, which had attained the maturity after May 13, 2005 but closed by the
subscribers before Dec 07, 2010, subject to the conditions that the accounts had not
been extended thereafter and the deposits were retained in such accounts without
further subscriptions.
NBFCs NOT TO BE PARTNERS IN FIRMS: RBI has observed that some NBFCs have
large investments in various partnership firms or they have contributed to capital in
some partnership firms. In view of the risks involved in NBFCs associating themselves
with partnership firms, RBI decided to prohibit NBFCs from contributing capital to any

partnership firm or to be partners in partnership firms. In cases of existing partnerships,


NBFCs may seek early retirement from the partnership firms.
BANKING COs (NOMINATION) RULES, 1985: The nomination forms (DA1, DA2 and
DA3) have been prescribed in the Nomination Rules as mentioned in the Banking
Regulation Act 1949. These forms, prescribe that the thumb impression of the
accountholder is required to be attested by two witnesses. RBI observed that some
banks insist on attestation of signature also by witnesses, as thumb impression is
attested.
RBI has examined the issue in consultation with IBA and has clarified that signatures of
the accountholders in forms DA1, DA2 and DA3 need not be attested by witnesses.
NOMINATION IN CASE OF JOINT DEPOSIT A/Cs: Some banks deny the facility of
nomination to the customers opening joint a/cs with or without "E or S" mandate. RBI
has clarified that nomination facility is available for joint deposit accounts also.
CERSAI: Govt. has notified the establishment of the Central Registry with the objective
to prevent frauds in loan cases involving multiple lending from different banks on the
same immovable property. This Registry has become operational on March 31, 2011.
The Central Registry of CERSAI, a Government Company licensed under Section 25 of
the Companies Act 1956 has been incorporated for the purpose of operating and
maintaining the Central Registry under the provisions of the SARFAESI Act, 2002.
INTEREST RATE ON SAVINGS DEPOSITS: RBI has decided to increase the interest
rate on domestic and ordinary Non-Resident savings deposits as well as savings
deposits under Non-Resident (External) Accounts Scheme by 0.5 percentage point from
3.5% to 4.0%pa with immediate effect.
DDs FOR RS. 50,000/- AND ABOVE: RBI has reiterated that demand drafts, mail
transfers, telegraphic transfers and travellers cheques for Rs. 50,000/- and above
should be issued by banks only by debit to the customer's account or against cheques
or other instruments tendered by the purchaser and not against cash payment.
DISHONOUR / RETURN OF CHEQUES: RBI has advised banks that instruments
returned unpaid should have a signed / initialed objection slip on which a definite and
valid reason for refusing payment must be stated, as prescribed in Rule 6 of the Uniform
Regulations and Rules for Bankers Clearing Houses.
PAYMENT OF CHEQUES / DRAFTS / PAY ORDERS: In exercise of the powers
conferred by Section 35A of the Banking Regulation Act, 1949, RBI has directed that
with effect from April 1, 2012, banks should not make payment of cheques/drafts/pay
orders/bankers cheques bearing that date or any subsequent date, if they are
presented beyond the period of three months from the date of such instrument.
DEMAND DRAFTS FOR RS. 20,000/- & ABOVE: RBI has advised banks to ensure
that demand drafts of Rs. 20,000/- and above are issued invariably with account payee
crossing.
ACCOUNT PAYEE CHEQUES: RBI has reiterated that banks should not collect
account payee cheques for any person other than the payee constituent. Further, with a
view to mitigate the difficulties faced by the members of co-operative credit societies in
collection of account payee cheques, relaxation was extended in terms of which, banks
may consider collecting account payee cheques drawn for an amount not exceeding

Rs.50,000/- to the account of their customers who are co-operative credit societies, if
the payees of such cheques are the constituents of such co-operative credit societies.
SAVINGS BANK INTEREST RATE DEREGULATED: Savings bank deposit interest
rate for resident Indians deregulated from October 25, 2011. Banks given the freedom
to determine their savings bank deposit interest rate, subject to the conditions that
Each bank should offer a uniform interest rate on savings bank deposits up to Rs.1 lakh,
irrespective of the amount in the a/c within this limit;
For savings bank deposits over Rs.1 lakh, a bank may provide differential rates of
interest, if it so chooses, subject to the condition that the bank should not discriminate in
the matter of interest paid on such deposits, between one deposit and another of similar
amount, accepted on the same date, at any of its offices.
Further, RBI has clarified that the revised guidelines would be applicable to domestic
savings bank deposits held by residents in India. Further, the interest rates applicable
on the domestic SB deposit will be determined on the basis of end-of-day balance in the
account. Accordingly, while calculating interest on domestic savings bank deposits,
banks to apply the uniform rate set by them on end-of-day balance up to Rs. 1 lakh and
for any end-of-day balance exceeding Rs.1 lakh, banks may apply the differential rate(s)
as fixed by them.

"SMALL ACCOUNT": With a view to promote financial inclusion, RBI has introduced a
new type of simple account aimed at general masses.
i) The aggregate of all credits in a financial year does not exceed Rs 1 lac;
ii) The aggregate of all withdrawals and transfers in a month does not exceed Rs
10,000;
(iii) The balance at any point of time does not exceed Rs 50,000/-.
SUBSTITUTION OF TERM MSE IN PLACE OF SSI: RBI has circulated notification
issued by the Ministry of Small Scale Industries regarding substitution of term 'Micro and
Small Enterprises' in place of the term 'Small Scale Industries.'
M-WALLETS: Keeping in view the need to facilitate larger acceptance of mobile phone
based prepaid payment instruments (M-wallets) as a mode of payment, RBI has
reviewed the position and has decided to bring semi closed m-wallets on par with the
other semi-closed prepaid instruments subject to following conditions.
The maximum value of such prepaid semi-closed m-wallet shall not exceed Rs. 50,000.
The monetary ceilings on prepaid instruments based on customer due diligence as laid
down in the extant guidelines would be applicable to such m-wallets.
FAILED ATM TRANSACTIONS: With a view to further improve the efficiency of ATM
operations, the time limit for resolution of customer complaints by the issuing banks
shall stand reduced from 12 working days to 7 working days from the date of receipt of
customer complaint. Accordingly, failure to re-credit the customers account within 7
working days of receipt of the complaint shall entail payment of compensation to the
customer @ Rs. 100/- per day by the issuing bank.

Any customer is entitled to receive such compensation for delay, only if a claim is
lodged with the issuing bank within 30 days of the date of the transaction.
The number of free transactions permitted per month at other bank ATMs to Savings
Bank a/c holders shall be inclusive of all types of transactions, financial or non-financial.
All disputes regarding ATM failed transactions shall be settled by the issuing bank and
the acquiring bank through the ATM system provider only.

IMPLEMENTATION OF CTS 2010 STANDARD


All banks providing cheque facility to their customers, have been advised to issue only
'CTS-2010' standard cheques not later than April 1, 2012 on priority basis in northern
and southern region which will be part of the northern and southern CTS grids
respectively and across the country by September 30, 2012 through a time bound
action plan.
MOBILE BANKING TRANSACTIONS IN INDIA
Existing Guidelines: Banks are permitted to offer Mobile Banking service to their
customers subject to a daily cap of Rs.50,000 customer for both funds transfer and
transactions involving purchase of goods / services with an overall calendar month limit
of Rs.2,50,000/-.
Revised Guidelines: RBI has removed the cap of Rs. 50,000/- However, banks may
place per transaction limits based on their own risk perception with the approval of its
Board.
UNCLAIMED DEPOSITS LYING WITH BANKS
As on December 31, 2011, a total amount of around Rs. 2481.39 crores is lying in
11249844 accounts as unclaimed deposits with scheduled commercial banks. In this
regard, the Reserve Bank has directed banks to Play a more pro-active role in finding the whereabouts of the account holders, whose
accounts have remained inoperative.
Annually review accounts in which there are no operations for more than one year.
Consider launching a special drive for finding the whereabouts of the customers/legal
heirs in respect of existing accounts which have already been transferred to the
separate ledger of Inoperative Accounts.
Allow operations in such accounts after due-diligence and not to levy any charge for
activation of inoperative accounts.
Display on their website, the list of unclaimed deposits/ inoperative accounts which are
inactive/inoperative for ten years or more. The list displayed on the website must
contain only the names of the account holder(s) and his/her address.
Complete this process by June 30, 2012.

COMPENSATION FOR DELAYED PAYMENT


Agency bank has been advised to compensate an investor in relief/savings bonds, for
the financial loss due to late receipt / delayed credit of interest warrants/maturity value,
at a fixed rate of 8 per cent per annum.
INDIRECT FINANCE TO HOUSING SECTOR
RBI has been decided to increase the limit from Rs.5 lakh to Rs.10 lakh for the bank
loans extended to non-governmental agencies, approved by NHB for their refinance, for
on-lending for the purpose of construction/reconstruction of individual dwelling units or
for slum clearance and rehabilitation of slum dwellers.
HOME LOANS-LEVY OF FORE-CLOSURE CHARGES
The Committee on Customer Service in Banks headed by the Chairman Sh. M.
Damodaran had observed that foreclosure charges levied by banks on prepayment of
home loans are resented upon by home loan borrowers across the board especially
since banks were found to be hesitant in passing on the benefits of lower interest rates
to the existing borrowers in a falling interest rate scenario.
The RBI has therefore, decided that banks will not be permitted to charge foreclosure
charges/pre-payment penalties on home loans on floating interest rate basis, with
immediate effect.
NATIONAL PENSION SCHEME:
National Pension System (NPS) is a defined contribution based pension system made
available to all Indian citizens between the age group of 18 to 60 (including NRIs)
introduced by Govt of India with effect from 1st May 2009. The GOI has announced the
co-contribution based Swavalamban Scheme to mitigate the longevity risk of
unorganized sector. By opening NPS accounts, we not only serve social cause but also
generate substantial non interest income to the Bank. Last year, our performance was
very poor (300 NPS accounts) in this segment.
IMPORTANT RATIOS
S.No Ratio
01
Tier I Capital

Particulars
Paid up Capital + Reserves (including Investment
Fluctuation Reserve (IFR))
Sub - ordinated Debt Bonds + Contingency
Reserves + Provisions on Standard Assets
Equity + Reserves & Surplus - intangible assets
Adequacy (Tier I Capital + Tier II Capital ) / Total Risk
Weighted Assets (RWA)
(Average) Net Profit / Average Assets (Fortnightly)

02

Tier II Capital

03

Net Worth
C.A.R(Capital
Ratio)
Return
on
Assets
Return on Equity (RoE)
Average Cost of Deposits

04
05
06
07
08

Average
Advances

Yield

Net Profit / (Capital + Reserves & Surplus)


Interest paid on Deposits / Average monthly Total
Deposits
on Interest & Discount received on Advances /
Average(
monthly )Total advances

09

Average
Yield
Investments
Average Business
employee

on Interest Income on Investments / Average(


monthly) Investments
per Average (monthly) business (i.e. Total Deposits +
Gross
Advances) / Total No. of employees at the relevant
date
Gross Rate of Return
Net Result / Average Total Business
C D R (Credit Deposit (Gross Advances - Inter bank Advances +
Ratio) For Whole Bank
Investments in
RIDF ) /Agg. Deposits
C D R (Credit Deposit (Gross Advances - Inter bank Advances ) /Agg.
Ratio)
Deposits
At branches
Cost of Funds
Interest paid on Deposits & Borrowings / (Average
(monthly)
Total Deposits & Borrowings)
Expenses Ratio
Operating Expenses (Staff expenses + Overheads
) / Net
Operating Income ( Net Int. Income + Other
Income )
Net Interest Income (N I I) Interest Income - Interest Expenditure
For Whole Bank
Net Interest Income (N I I) (Interest received on Advances + Int. received on
At Branches
funds lent to H.O.) - (Interest paid on deposits + Int.
paid on funds borrowed from H.O.)
Net Interest Margin (N I Net Interest Income / Average Earning Assets
M)
(Weekly)
Net Profit per Employee
Net Profit/ Total No. of employees at the relevant
date
Transaction Cost
Operating Expenses (Staff expenses + Overheads
) / Total Business (Total Deposits + Total Advances
)
Gross NPA (%)
Gross NPA x 100 / Total Advances
Net NPA (%)
Net NPA x 100 / Net Advances

10

11
12

13

14

15

16
17

18
19
20

21
22

LOAN PRODUCTS
HOUSING LOAN:
01.

Purpose:

02.

Purchase a plot of land for purpose of construction of house.


Purchase/ construct a new house/ flat
Purchase an existing (old) house/ flat or extend an existing house
Repair or renovate an existing house/ flat
Furnishing/ consumer durables as part of the project cost.
Eligibility:

Age: Individual(s) over 18 years of age with steady source of income.


Maximum age limit for repayment of a Housing Loan is fixed at 70 years.

03.

Loan Tenor: Up to 30 years subject to liquidation of the Housing loan before the
borrower reaches the age of 70 years.

04.

Number of Co-Borrowers: Restricted to maximum 3 including spouse/ children/


parents/ siblings. However, not below the rank of AGM in Processing Centres/
Region/ Branch can relax maximum number of co-borrowers provided the
repayment is made through an account with Bank in the joint names of all the
borrowers.

05.

Eligible Income for arriving at maximum loan amount:


Maximum loan amount will be the lowest of the amount assessed on the basis of
following under:
a) Project cost less applicable margin as mentioned below:
For Loans up to Rs.20.00 lacs
For Loans above Rs.20.00 lacs up to Rs.75.00 lacs
For Loans above Rs.75.00 lacs
-

10%
25%

20%

b) Permissible as per EMI/ NMI ratio


Based on income wise graded ratio as under:
Net Annual Income

EMI/NMI
Ratio
Up to Rs.0.60 lacs
20%
Above Rs.0.60 lacs to Rs.1.20 25%
lacs
Above Rs.1.20 lacs to Rs.2.00 30%
lacs
Above Rs.2.00 lacs to Rs.5.00 50%
lacs
Above Rs.5.00 lacs to Rs.10.00 55%
lacs
Above Rs.10.00 lacs
65%

c) Maximum permissible as per LTV ratio


Loan amount Up to Rs.20.00 lacs

90%

Loan amount above Rs.20.00 lacs up to Rs.75.00 lacs

80%

Loan amount above Rs.75.00 lacs

75%

# In cases where the cost of the house/dwelling unit does not exceed Rs.10.00
lacs, banks may add stamp duty, registration and other documentation charges
to the cost of house/dwelling unit for the purpose of calculating Loan to Value
(LTV) ratio.

06.Repayment:
Maximum 30 years or up to the age of 70 years (the age by which the loan should be
fully repaid) of the borrower, which ever is early.

SBH Maxgain Housing Loan


Purpose

As applicable to normal Housing loan scheme

Eligibility

Individuals over 18 years of age and younger than 70 years.


Applicants should open a SB account or Current account with an
average quarterly balance of Rs.10,000/- with us.

Loan amount

As applicable to normal Housing loan scheme.


An upper limit of Rs.100.00 lacs is fixed under this scheme.
However, loans availed by staff and staff jointly with their spouse
have been exempted from this ceiling. No request can be
considered for converting an existing HL account into an Overdraft
under SBH Max Gain.

Margin, Interest &

As applicable to normal Housing loan scheme

Security
Type of Loan

Housing loan with Overdraft facility

Special Feature The Drawing Power of the Overdraft will reduce on monthly basis
of the product
to an extent of Principal component of the EMI, so that the OD is
liquidated at the end of the loan tenure.

SBH HOME CASH:


Purpose

General purpose other than speculative. However a forma


declaration should be obtained from the borrower that the Home
Cash Loan would be utilized for the purpose of House
Renovation /Repairs /Refurbishing or Furniture/Fuxures.
Eligibility
All existing Home Loan customers with a satisfactory repayment
record of at lease Six Months provided possession of the House
has been taken by the Customer and valid mortgage has been
created in favour of the Bank.
Loan Amount
Min: Rs.50000/- Max: Rs.10.00 lacs
Permissible Loan Amount
As per Value of the 75% of present market value of the house property less present
house property
outstanding in the Home Loan account. The present market
value of the property will be decided by the realizable value by a
fresh valuation report obtained from empanelled valuer.
As per EMI/NMI Based on Net Annual Income of applicant as given
Raio
Net Annual Income
Permissible EMI/NMI
Ratio
>Rs. 2.00 lacs <= Rs. 5.00 lacs
55%
>Rs. 5.00 lacs <=Rs.10.00 lacs
60%
>Rs.10.00 lacs
70%
Nature of Facility
Term Loan/ Overdraft with reducing drawing power.
Processing Fee
0.50% of loan amount with minimum of Rs.1000/- and maximum
of Rs.10,000/-.
No. of loans
At any point of time there should be only one SBH Home Cash
loan.
Tenure
The tenure of the loan would be co-terminus with the original
residual maturity of the Home Loan or the option exercised by
the borrower, whichever is earlier, subject to liquidation of the
loan, before the borrower attains the age of 70 years or
maximum period of 120 months.
Rate of Interest
Term Loan: 0.05% above Base Rate.
Overdraft : 0.30% above Base Rate.

COMBO LOAN SCHEME - CAR LOAN ALONG WITH HOUSING LOAN.


Objective of the To benefit the customer in terms of reduced Rate of interest and
Scheme
Nil Processing charges for the Car Loan portion.
Eligibility
Existing Housing Loan borrowers who have,
1.Availed the Housing Loan from SBH and completed the House
or taken possession of house.
2. Created valid Equitable Mortgage.
3.Complied with all terms and conditions regarding sanction of
Housing Loan.
Margin for Car Loan
a. Nil, if the mortgage of the House property is extended to
the proposed Car Loan.
b. If the Mortgage of House property is not extended the
Margin as per existing Car Loan Scheme will continue as
under.

Up to Rs.10 lacs : 15% on road price of the car.


Above Rs.10.lacs : 15% margin on ex-showroom price of the
car. Or Margin of 20% on Road price of the car at the option
of the customer.
Loan EMI / NMI Ratio will be as per existing Car Loan Schemes.

Permissible
Amount
As per EMI/NMI Based on Net Annual Income of applicant as given
Raio
Net Annual Income
Permissible EMI/NMI
Ratio
<= Rs. 5.00 lacs
50%
>Rs. 5.00 lacs <=Rs.10.00 lacs
50%
>Rs.10.00 lacs
60%
Minimum income for Salaried persons Rs.3.00 lacs p.a.,
Minimum income for others
--Rs.4.00 lacs p.a.,
Processing Fee
Waived for Car Loan.
Tenure
The Maximum tenure of the loan will be as per the Original
Scheme of Car Loan i.e., 84 Months
Rate of Interest
Term Loan: 0.20% above Base Rate.
Takeover of Loans

Takeover of Car loans under the scheme is not permitted.

SBH PRASANTHI SCHEME ( LOAN TO PENSIONERS):


1.Purpose: To enable the Pensioners to meet their personal expenses like medical
expenses, children marriage expenses etc.,
2.Eligibility: All State & Central Government including Defense, Railways and Telecom
Department Pensioners and Banks Pensioners, whose Pension Accounts are
maintained by our branches.
3.Loan Amount :
v
Incase the age of the pensioner is not more than 72 years:
Maximum of 12 months net pension/ net family pension with a ceiling of Rs.7.50 lacs
subject to EMI not exceeding 40% of net pension/ net family pension. Age at the time of
full repayment of loan should not be more than 74 years.
v

Incase the age of the pensioner is above 72 years and up to 75 years:


Maximum of 12 months net pension/ net family pension with a ceiling of Rs.2.00
lacs subject to EMI not exceeding 40% of net pension/ net family pension. Age at
the time of full repayment of loan should not be more than 77 years.

4. Repayment:
v
For Pensioners
v
For Family Pensioners

: Maximum 48 months.
: Maximum 36 months.

EDUCATION LOAN:
01.
Purpose:
To extend financial assistance to meritorious students for pursuing higher education in
India and abroad. The main emphasis is that a meritorious student, though poor, is
provided with an opportunity to pursue education with the financial support from the
Bank.
02.

Student Eligibility:
Student should be an Indian National.
Should have secured admission to a higher education course in recognized
institutions in India or to foreign university / institutions.

03.

Quantum of Finance:
Studies in India - Maximum Rs.10.00 lacs
Studies abroad - Maximum Rs.20.00 lacs*

Higher quantum of loan above these ceilings can be considered, on course to course
basis (eg: courses like IIMs, ISB etc) by the respective Field General Manager.
04.

Margin :
Upto Rs.4.00 Lacs
Above Rs. 4.00 Lacs

05.

- NIL
- Studies in India 5% and Studies abroad 15%

Security:
Upto Rs. 4.00 Lacs No Security (co-obligation of parent/ guardian is
compulsory)
Above Rs.4.00 Lacs and upto Rs.7.50 Lacs: Besides the parent(s) executing
o the documents as co-borrowerscollateral security in the form of a suitable
third party guarantee.
Above Rs.7.50 Lacs: - Collateral security of suitable value and Co-obligation of
parent / Guardian / third party guarantee along with the assignment of future
income of the student for payment of installments.

Interest Subsidy: Govt. of India interest subsidy is available for the students having
family income below Rs.4.5 lacs and availing loan for the courses conducted within
India. As per the scheme total interest on amounts disbursed after 01.04.2009 will be
reimbursed to all the eligible students. It may also be noted that even loans in excess of
Rs.10 lakhs for studies in India qualify for interest subsidy under Central Sector Interest

Subsidy Scheme for loans up to Rs.10 lakhs (i.e. maximum permissible interest subsidy
is to the extent of interest applied on Rs.10 lakhs only).

07. Repayment :
Course period plus one year or six months after getting job, whichever is earlier.
The loan should be repaid within 7 years after commencement of repayment for
the loan amounts up to Rs.7.50 lacs.
For the loan amounts above Rs.7.50 lacs repayment period can be up to 10
years after commencement of repayment.
CAR LOAN:
01.
Purpose: For purchase of new passenger cars, Multi Utility Vehicles (MUVs) and
Semi Utility Vehicles (SUVs).
2.
Eligibility: AGE: 21-65 years (for sanction of loan). Even beyond the age of 65
years, can be sanctioned subject to loan must be fully repaid before the borrower
attains the age of 70 years.
3. Minimum Income:
Salaried: Minimum Net Annual Income (NAI) of applicant and/ or co-applicant, if any,
together should be Rs.3.00 lacs, whether or not maintaining salary account with us.
Self employed, Professionals and Businessmen: Minimum Net Profit or Gross
Taxable income of Rs.4.00 lacs.
Agriculturists & others: Minimum Net Annual Income of applicant and/ or
co-applicant together to be Rs.4.00 lacs.
4. EMI/ NMI Ratio:
Depending on Net Annual Income EMI/ NMI Ratio will be as under:
Net Annual Income

EMI/ NMI Ratio

Up to Rs.5.00lacs

Should not exceed 50%

Above Rs.5 lacs and up to Rs.10 lacs

Should not exceed 50%

Above Rs.10 lacs

Should not exceed 60%

5. Maximum Loan Amount:


Salaried: Upto 48 times NMI
Self employed, Professionals and Businessmen: Up to 4 times NAI

Agriculturists & others : Up to 3 times NAI


6. Margin:
Up to Rs.10.00 lacs -

15% of total cost of the vehicle i.e. on road price.

Above Rs.10.00 lacs-

15% Margin on Ex-showroom price of the car OR


Margin of 20% on Road Price of the car at the option of the
customer.

7. Repayment:

84 Months.

MORTGAGE LOAN:
1.
Purpose: It is a general purpose loan/ line of credit. The purpose of loan will
have to be specified along with a simple undertaking that the loan will not be used for
any speculative purpose, including speculation on real estate and equity shares.
2. Eligibility:
Any individual who is over 21 years of age with a steady source of income.
The maximum age limit is 65 years.
3. Net income:
Minimum Net Annual Income is Rs.2.50 lacs.
4.EMI/NMI Ratio:
Net Annual Income

EMI/ NMI Ratio

Rs.2.50 lacs to Rs.5.00lacs

50%

Above Rs.5 lacs and up to Rs.10 lacs

60%

Above Rs.10 lacs and up to Rs.25.00 lacs

70%

5. Quantum of Loan:
Minimum Rs.50000/- ,

Maximum Rs.200 lacs.

6. Margin:
50% of the market value of the property if the property is purchased before 3
years.
50% of the distressed value of the property if the property is purchased within
3 years.

07. Repayment:
TERM LOANS:
Salaried persons with check-off facility
Others

: 120 months
: 84 months

OVERDRAFT: The loan is to be repaid in a maximum period of 60 months, through a


monthly reducing D.P., the reduction to commence from the month following the date of
release of facility.
08. Processing fee: 0.56% of the loan amount and maximum of Rs.50000/NRI MORTGAGE LOAN:
1.
Purpose: It is a general purpose loan/ line of credit. The purpose of loan will
have to be specified along with a simple undertaking that the loan will not be used for
any speculative purpose, including speculation on real estate and equity shares.
Branches to ascertain the purpose of loan by way of suitable declaration in the
Application form and record in the system.
2. Eligibility:
a) Any individual No-Resident Indian (NRIs) holding a valid Indian Passport or
Persons of Indian Origin (PIOs) holding a foreign passport with a minimum
age of 21 years and above.
b) Have been holding a job at least 1 Year or self-employed with a minimum net
monthly income (NMI) equi. To Rs.20000/- or a net annual income (NAI) equi.
To Rs.2,40,000/3. Disbursal: The proceeds of the loan shall not be credited to NRE/FCNR account and
not remitted outside India.
4.EMI/NMI Ratio:
Net Annual Income

EMI/ NMI Ratio

Rs.2.50 lacs to Rs.5.00lacs

50%

Above Rs.5 lacs and up to Rs.10 lacs

60%

Above Rs.10 lacs and up to Rs.25.00 lacs

70%

5. Quantum of Loan:
Minimum Rs.100000/- ,

Maximum Rs.200 lacs.

6. Margin:
50% of the market value of the property if the property. While assessing the
value of the collateral for mortgage loans, only 70% of the market value of the
property i.e., distress sale value is to be considered as value of the collateral
security. Valuation to be done by an approved valuer at borrowers cost.
is purchased before 3 years.
50% of the distressed value of the property if the property is purchased within
3 years.

07. Repayment:
84 equated monthly installments (EMIs)
Repayment of loan may be made by debit to NRE/FCNR /NRO accounts of the
Non-Resident Borrower or out of inward remittances by the borrowers.
08. Processing fee: 0.56% of the loan amount and Minimum of Rs.1000/- and
maximum of Rs.50000/-

MSME SEGMENT RECENT LOAN SCHEMES:


SBH SWAGATHAM:
It is a scheme for returning Non-Resident Inidans (NRIs) under MSME Segment.
Objective

Nature of Facility
Quantum of loan

To provide financial assistance for returning NRIs (starting


business units for generation of self employment
opportunities.
:

Margin
Period & Repayment :

Cash Credit & Term Loan.


Minimum Rs.5.00 lacs, Maximum Rs.100.00 lacs.

CC 25%, TL 25%
Cash Credit: 12 months Repayable on demand.
Term Loan: 84 EMIs (incl. moratorium of 12 months)

SBH WELCOME:
To bring a very competitive pricing based scheme particularly high rated quality
borrowers which will aim at boosting our MSME portfolio to achieve the benchmark and
to improve the quality of our loan book by booking good quality borrowal accounts of
enjoying high ratings say SBH-1 to SBH_5 or investment grade external rating i.e.,
BBB and above.
Area of operation : At selected branches of the Bank, identified by Regions / Zones
for intensive growth in MSME Segment.
Objective

To provide financial assistance to Micro & Small Enterprises.

Quantum of loan

Minimum : Rs.100.00 lacs.


Maximum: Need based for SSI segment Rs.500.00 lacs
for SBF segment (both CC & TL put together.

Margin
: CC- 25%, TL- 25%.
NEW DEPOSIT SCHEME - CORPORATE MULTI - OPTION DEPOSIT
SCHEME (C-MODS)
In order to attract/retain Corporates & Institutional customers in C&I Segment who
have/maintain surplus funds for investment, but at the same time need convenience
of liquidity, Bank has launched New Deposit Scheme C-MODS. The new deposit
scheme which will be effective from 1st November 2014 provides auto sweep
facility to Corporate Customers (C&I) maintaining Savings Bank account. It provides
value addition to the top Corporates/Institutions etc.
Highlights of the scheme are given hereunder:

The amount in Savings Bank account, beyond a threshold limit of Rs 5.00 lacs
will be auto-swept to Term Deposit account on weekly/ monthly basis, as per
the customers choice.
The customer has option to choose an amount higher than Rs 5.00 lacs so
that the resultant balance would be adequate to meet his day to day needs,
without frequently breaking the TDs.
If the balance falls below the level of Rs.5.00 lacs during any day in a month,
a service charge of Rs.500 will be levied.
The amount of sweep would be in multiples of Rs 10,000.
No interest is payable for withdrawals before 15 days.
Extant instructions with regard to penal provisions on premature withdrawals
are applicable.
Whenever the customers wish to draw from the Savings Bank account, (either
through cheque/ SI/Internet Banking etc.), in case of need, the amount will be
reverse swept from TD to SB to honor the payment. The amount of reverse
sweep from TD to SB is also minimum Rs 10,000 and multiples of Rs 10,000
thereafter, sufficient to effect the payment. Such payments out of the CMODS
are paid together with interest for the period run, as per the card rates
for such period applicable as at the date of opening of the respective deposits

with penalty as applicable for premature withdrawal, for normal term deposits.
The rate of interest on C-MODS is as applicable to normal Term Deposits and
no differential rate of interest is payable.
TDS on interest would be deducted, as applicable.
Term Deposits would be renewed automatically by the CBS on maturity
No loan/OD against Term Deposits held in C-MODS.
The salient features of the scheme are given in Annexure-I.
Credit Information Bureau (CIB) Report:
Branches/ Processing Centers will access the data base of Credit Information Bureau
(e.g. CIBIL or any other approved bureau) with a view to trace credit history, if any,
availed by such borrowers from other banks.
As per extent procedure, a satisfactory credit report is mandatory for processing of Loan
proposals. There have been many instances of borrowers appearing in credit defaulters
list on account of disputes in payment of interest and miscellaneous charges on credit
cards etc.
Defaults in Credit Information Bureau Reports:
The authority structure to consider the loan applications in respect of the borrowers,
whose name appearing in the Credit Information Bureau list on account of disputes in
regard to payment of interest/ miscellaneous charges in credit cards is as under:
DEMAND DEPOSITS:
Savings Bank Account for personal savings accounts for individuals
Current Account for commercial undertakings, institutions & individuals
TIME DEPOSITS (TERM DEPOSITS):
A time or term deposit is one which is received by a Bank for a fixed period and which is
withdrawable after the expiry of the said fixed period. They are classified as time liability
and matured deposits are classified as Demand liability. A time deposit account can
normally be opened for a maximum period of 120 months and a minimum period of 15
days (For deposits more than 15 lacs 7 days). While effecting payment of a time
deposit receipt, revenue stamp need not be affixed when the payment is made by
transfer to the credit of an account or the receipt is in the name of a Co-operative
Society which is exempted from Stamp duty.
Different Schemes:
Fixed Deposit Scheme Interest will be paid at specified intervals
Special Term Deposit Interest will be reinvested and paid on maturity
Short Term Deposit For a period less than six months
Recurring Deposit Cumulative monthly deposit scheme
Recurring Deposit Plus Recurring Deposit with insurance coverage.
SBH Tax Saver Deposit Scheme Deposits qualify for Income Tax rebates
Multi Option Deposit Deposit in units & piece meal maturity possible
Certificate of Deposits Transferable 1 lac and in multiples of 1 lac

FCNR Foreign Currency Non-Resident Deposits (only Term Deposits in five


designated currencies USD, CAD, AUD, STG, EUR)
SBH Double

SBH KUBER 400 DAYS:


Purpose
Rate.
Segment
Period of Deposit
Type of Deposit
Minimum Deposit
MaximumDeposit

To offer Medium Term Deposit with a attractive interest

:
:
:
:
:

All segments
400 days
Term Deposit
Rs.10000/Rs.99,90,000/-

Multi Option Deposit Account


Minimum Deposit is 10,000/- and held in 10 units of each 1,000/-.
Additional amount in multiples of 1,000 with a minimum of 10,000/-.
Premature Payment of units permitted and the remaining units rank for agreed
interest.
Minimum period of deposit -12 months.
Maximum period of deposit - 36 months.

TERM DEPOSITS:
Salient features of the various new term deposit products:
Particulars
Product
Purpose

Segment

Eligibility

Period
deposit
Type
Account
Mode
operation
Minimum
Deposit

/ SBH DOUBLE

SBH AKSHAYA- SBH- 125 DAYS


1116 DAYS
To
allow
the To boost up Term To mop up Short Term
customer to double Deposits
Deposits
their money over a
given period
All segments
Personal Segment All segments
(Under Domestic
/NRI) only
Open to individuals Open
to Individuals/NRIs/staff/Firms/
including NRIs
individuals
Companies
including NRIs
of 91 months for 1116 days
125 days
public individual at
current int. rate.
of STDR
FDR/ STDR
Term Deposit
of Single or Jointly
Rs.10000/multiple

Single or Jointly

and Rs.10000/of multiple

Single or Jointly

and Rs.10000/of

Rs.1000/Maximum
Deposit
Period
of
Scheme
Rate
of
Interest
Scheme
availability
Loan Facility
Premature
payment

Open ended
9.25% (current)

Rs.1000/Rs.100 lacs

Rs.100 lacs

W.e.f., 24.05.14 05.05.14 to 31.0.14


onwards
9.16% for Public
9.00% for public

All branches of the All branches of All branches of the Bank


Bank
the Bank
Availability in the form of Demand Loan or Overdraft facility as per
extant guidelines
No penalty if the No penalty if the deposit remains with the Bank
deposit runs for 60 for at least 7 days.
months or above.

# Deposit schemes namely SBH 500 days, SBH Double, SBH Akshay 116 days,
SBH Swabhiman, andSBH Vridhi have been withdrawn from 01.11.2014.
RECURRING DEPOSIT
Minimum monthly cumulative deposit 100/- in additional multiples of 10/ Minimum period of deposit 12 months
Maximum period of deposit 120 months
Interest is paid on maturity and exempted from TDS
Initially depositor has to decide his/her monthly contribution i.e. installment.
RD + (Recurring Deposit Plus)
All individuals above 18 years in sole name or jointly with others (E or S / F or S /
L or S/ Jointly) (Except C & I all segments are eligible.)
Minimum period of deposit is 24 months (there after in multiples of 12 months).
Minimum amount of Deposit is 1000/- p.m. and in multiples of 10 thereafter.
Loans are extended after first six months track record up to the maturity value of
the RD account repayable in 24 monthly installments.
For maturity value of RD+ accounts upto 50,000/-, 50,000/- policy to be issued.
For maturity value of RD+ accounts above 50,000 and upto 1.00 lac, 1.00 lac
policy to be issued and accordingly premiums are payable (Ins. Circular No.9 of
02.11.2007).
As the insurance company is providing cover for a maximum period of 3 years, in
respect of RD+ account opened for more than 3 years, branches should pay
premium initially for 3 years and after three years premium should be paid for the
remaining 2 or 3 years as the case may be (as renewal premium properly
diarising the due date of the policy).
Premiums should be debited on the same day of opening of RD+ account, so
that the insurance cover is available to the account holders from that date itself.
In case of premature closure of said accounts, the insurance premium paid so far
may be recovered from the maturity proceeds of RD+ account.

Bonus in RD Plus Accounts:


Free Accident Insurance cover up to the maturity amount of RD account subject
to a maximum of 1.00 lac for the entire period of RD.
SB account without minimum balance or service charges for not maintaining
minimum balance during the first year.
Demat Account can also be opened at our Gunfoundry Branch.
SBH FLEXI RD
Coinciding with the inauguration of the 1500th Branch and ATM on the 8th November a
new product namely SBH Flexi RD is being launched. While inculcating the regular
saving habit in individuals, the scheme offers many distinct features.
The customer is free to fix a monthly core amount and deposit amounts upto 10 times
the core amount so that surplus money can earn higher interest. The scheme also
offers flexibility to defer 2 monthly installments during a year for unforeseen liquidity
constraints.

The main features of the deposit scheme are:


Variable Deposit Scheme for a period of 12 months to 120 months.
Depositors can fix core installments from 1000/- to 1,00,000/- per month and
deposit amounts upto 10 times. The maximum amount permitted would be 10
lacs per month.
One remittance per month, minimum 10 installments per annum.
If the number of remittance is less than 10 per annum, penalty will be levied as
applicable to Recurring Deposit. ( 1.50 per 100 on the core amount, or 10
whichever is higher).
Interest capitalization every quarter calculated on monthly balances.
Minors over 10 years can open in their name singly provided the maturity value
does not exceed 2, 00,000/-.
Loans, premature withdrawal and nomination facilities are available as applicable
to normal Recurring Deposit scheme.
Exempted from TDS as this will be a recurring deposit.
As the amount is flexible the maturity value will not be determined at the time of
opening the account as in the case of normal RD.
This scheme will be available only to INDIVIDUAL domestic customers.
SAVINGS BANK ACCOUNTS
Any person(s) fulfilling account opening requirements (KYC guidelines) may, upon
agreeing to comply with the prescribed rules, open a SB account. As per RBI directives,
Govt. Departments or Bodies who for performance of their functions depend on
budgetary allocations cannot open SB Accounts subject to few exceptions.
Interest will be credited to the account half-yearly in January and July. Interest will be
paid only if works out to 1/- or more.
A Savings/fixed /recurring bank deposit account can be opened by a minor of any age
through his/her natural or legally appointed guardian.
Minors above the age of 10 years may be allowed to open and operate savings bank
accounts independently, if they so desire.

Recently introduced new deposit products:


SBH SAHAJ (Small Account)
SBH SAHAJ (SMALL ACCOUNT)
1 Name of the Product
2 Purpose
In order to enable the common man to
open/maintain bank accounts free of cost
3 Segment
Personal Banking
4 Eligibility
As applicable to regular Savings Bank Account
5 KYC Requirement
Liberalised
6 Mode of Operation
Singly, jointly, or with E or S, F or S, anyone or
Survivor etc facility.
7 Available at
All Branches
8 Initial Deposit Amount
NIL
9 Minimum balance Amount
NIL
10 Maximum balance Amount
Rs.50000.00
11 Rate of Interest
As applicable to Savings Bank Accounts
12 Operations in the Account
Cheque book will be issued
Only Basic ATM-cum-debit card will be issued
13 Service Charges

(i) Minimum services like: ATM-cum-Debit card will


be issued free of cost and no annual maintenance
charge will be applied.
(ii) Maximum 4 withdrawals in a month, including
ATM withdrawals at own and other Banks ATMs
shall be allowed. Thereafter service charges as per
regular Savings Bank Account will apply.
(iii) Receipt/ credit of money through electronic
payment channels like NEFT/RTGS will be free
(iv) Deposit/ collection of cheques drawn by
Central/State Government will be free
(v) No charge on activation of inoperative accounts

14 Charges for availing services Regular charges will apply on services extended
other than those covered in beyond those mentioned above.
this product
15 Account opening procedure
Extant procedure for opening Savings Bank
Account will be followed
16 Stationery
Account Opening Form as attached to the circular
to be used.
17 Restrictions
Aggregate of all credits in a Financial Year
does not exceed Rs.1,00,000.00.
Aggregate of all withdrawals and transfers in
a month should not exceed Rs 10,000/-

SBH SAHAJ PLUS (BSCBDA)


1. Name of the Product
2.

Purpose

3.
4.
5.
6.

Segment
Eligibility
KYC requirement
Mode of Operation

7.
8.
9.
10.
11.

Available at
Minimum balance amount
Maximum balance /amount
Rate of Interest
Operations in the Account

12. Number of Accounts

Balance in this Account at any point should


not exceed Rs.50000/.
Foreign Remittances are not allowed to be
credited into SBH SAHAJ Account unless
the identity of the client is fully established
through the production of officially valid
documents.
SBH SAHAJ Account shall remain
operational initially for a period of twelve
months, and thereafter for a further period of
twelve months if the holder of such an
account provides evidence before the Bank
of having applied for any of the officially valid
documents within twelve months of the
opening of account, with the entire relaxation
provisions to be reviewed in respect of the
said account after twenty four months. A
stop will be set in CBS on completion of
12/24 months which can be removed by the
home branch after reviewing the account as
above.
Maximum 4 withdrawal in a month, including
ATM withdrawals at own and other Banks
ATMs shall be allowed. Thereafter service
charges as per regular Savings Bank
Account will apply.

SBH SAHAJ PLUS (Basic Savings Bank Deposit


Account)
In order to enable the common man to
open/maintain bank accounts free of cost.
Personal Banking
As applicable to regular Savings Bank Account
The account will be KYC compliant.
Singly, jointly, or with E or S, F or S, anyone or
Survivoretc facility.
All branches
NIL
No upper limit
As applicable to Savings Bank Accounts
Cheque book will be issued.
ATM-cum-debit card will be issued
The Customer cannot have any other Savings
Bank Account, if he/she has a Basic Savings Bank
Deposit Account.

If the customer already has a Savings Bank


Account, the same will have to closed within 30
days of opening a Basic Savings Bank Deposit
Account.
13. Service Charges

Minimum services like: ATM-cum-Debit card


will be issued free of cost and no annual
maintenance charge will apply.

Receipt/ credit of money through electronic


payment channels like NEFT/RTGS will be
free.

Maximum 4 withdrawals in a month,


including ATM withdrawals at own and other
Banks ATMs shall be allowed. Thereafter
service charges as per regular Savings Bank
Account will apply.

Deposit/ collection of cheques drawn by


Central/State Government will be free.

Deposit of Cash at Bank Branch will be free.

No charge for activation of inoperative


accounts.
14. Charges
for
availing Regular charges will apply on services extended
services other than those beyond those mentioned above.
covered in this product
15. Account Opening Procedure Extant procedure for opening Savings Bank
Account will be followed.
SBH Platinum SB A/C
SBH PLATINUM
01 Name of the product
02 Segment
All segments including C&I (Individuals)
03 Eligibility
All categories including NRIs and existing customers
also.
04 Mode of operation
Single or Jointly
05 Target Group
High Net Worth Individuals both Domestic and NRIs
06 Amount of Deposit
Average Quarterly balance of Rs.1 lac has to be
maintained in the account or Rs.10 lacs put together
in Savings Bank/ Fixed/ FCNR
Zero balance account can be opened and the
average quarterly balance as above to be maintained
during the calendar quarter.
07

Value added services offered 1. Nil service charges for funds transfer ( RTGS/
NEFT/ Online), collection and remittances.
2. Free State Bank Platinum international debit card
(Chip+Magstripe)

3. Specially designed Personalised Multi City


Cheque payable at par at all Branches. Cash
payment at non home
branches upto Rs.10 lacs
to self and upto Rs.2,00,000/- to third parties, except
rural and
financial Inclusion branches. Rural
Branches Encashment of cheque is with
prior information/
arrangement on case to case
basis.
4. No cheque book charges and cheque payment
charges.
5. Free Personal Accident Insurance to the extent
of Rs 5,00,000/- and Purchase protection to the
extent of Rs 50,000/6. Priority in Personal segment loans with 25bps
reduction in processing fee.
08

Penalty

a) Non maintenance of Average Quarterly Balance:


Rs.100/- per quarter will be charged as penalty for
non-maintenance of AQB.
If the depositor
continues
non-maintenance of AQB for 2
quarters, the facility under the scheme will be
withdrawn

POINTS FOR REMEMBER

Free International Platinum Debit Card.


Free personalized multi city payable at par cheque book.
Free Personal Accident Insurance cover of Rs. 5 lakhs.
Free purchase protection to the extent of Rs.50000/Free demand drafts and pay orders.
Facility for opening Zero Balance Account.
Free Funds transfer(NEFT/RTGS/ On Line etc).
Cash payments for self at home branch upto Rs.10 lakhs.
Third party payments at home branch upto Rs.2 lakhs.
0.25% reduction in processing fee on P&SB loans.
ATM withdrawal limit Domestic : up to Rs.1 lakh
ATM withdrawal limit International: Foreign currency equivalent to Rs.1 lakh
Point of sale transaction limit Domestic : up to Rs.2 lakhs.
Point of sale transaction limit International : Foreign currency equivalent to
Rs.2 lakh
Assured reward points.

CURRENT ACCOUNT
Current Account can be opened by Individuals, sole proprietorship/partnership firms,
private and public limited companies, HUFs/Specified associations, societies, Trusts,
Clubs, Executors, Administrators and Liquidators, Govt. Depts., Universities, Banks etc.

Minimum Balance (Rs.)


TYPE
RURAL
Public Individual

2500

NONRURAL
5000

Public Others

2500

5000

Pensioners

1250

2500

Penalty for not maintaining minimum balance is 250 per month for individuals & 450/per month for non individuals
No interest is paid on deposit amount
No limit for number of cheques
No limit for amount of cheques
SBH Power Gain and SBH Power Pack
(DEP/2009 - 10/28, Dated 06-11-2009)
Introduced by substituting Current Account Plus and offering more facilities, including
cheque protection facility.
The salient features are:
Particulars
POWER GAIN
Quarterly
Average Rs.1,00,000/Balance (QAB)
Penalty
for
non- Rs.2000/- per quarter
maintenance of QAB
Cash
handling Free
charges
Drafts
Rs.0.25/1000
Min.
Rs.25/-:
Max.Rs.3000/Bankers Cheques
Free
Cheque Collection
On SBH Free (Out of
pocket exp. Max Rs.25/-)
Others: Rs.1/1000
Min.Rs.25/- Max. Rs.150/CINB
Available Free
Multi City Cheques
Issue Free
TXN Charge Rs.25/- upto
Rs.5,00,000 &
Rs.50/above

POWER PACK
Rs.5,00,00/Rs.5000/- per quarter
Free
Free

Free
On SBH Free (Out of
pocket exp. Max Rs.25/-)
Others: Rs.0.50/1000
Min.Rs.25/- Max. Rs.150/Available Free
Free

Rs.5,00,000/Core Power
Usual Charges
Chq.
Return Upto Rs.25,000/- only at
Protection
Home Branch (10 days)
OD Interest
SBH BR + 2%
Chq.Books
Free
Duplicate Statement
Free
Loan
(CC
a/c) Max waiver upto Rs.1000/Processing charges
RTGS/NEFT/SBGRPT Normal applicable charges
Folio Charges
Free
Car Loans
Pre approved car loans
Salary a/c
Silver
&
Gold
for
employees of Firm
Penalty for closing Rs.2500/within 12 months

Free
Upto Rs.1,00,000/- only at
Home Branch (10 days)
SBH BR + 2%
Free
Free
Max waiver upto Rs.5000/Free
Free
Pre approved car loans
All salary a/cs
Rs.5000/-

Currency Chest: A Currency chest is a reservoir wherein RBI Notes, one rupee notes
and one rupee coins are kept on behalf of the Reserve Bank of India. Currency chest is
the property of Reserve Bank of India.
Repository: Repository is a sub-chest and the cash in repository forms part of
Currency chest maintained at nearby link branch.
INDIAN DEPOSITORY RECEIPTS (IDR): IDR is Rupee-denominated depository
receipt created by an Indian depository against the underlying equity of the issuing
foreign company.
SELF HELP GROUP (SHG): SHG is an voluntary association of 10-20 rural poor
persons having common objective of improving their social & economic status with
thrust on Thrift & Credit Management.
LTV Ratio: LTV Ratio is the Ratio of outstanding loan to the value of the property
mortgaged to the Bank.
Low LTV - Low Risk
BANK GUARANTEE:
A guarantee is a contract to perform the promise or discharge the liability of a third
person in case of his default. A guarantee issued by a Bank is called Bank Guarantee.
DEFERRED PAYMENT GUARANTEE:
A Deferred Payment Guarantee is a contract to pay to the supplier the price of
machinery supplied by him on deferred terms, in agreed installments with stipulated
interest on the respective due dates in case of default in payment thereof by the buyer.
LETTER OF CREDIT:
LC is a written arrangement by means of which a Bank (issuing bank) acting at the
request of a customer (applicant) undertakes to pay to a third party (beneficiary), a predetermined amount by a given date according to agreed stipulations and against
presentation of stipulated documents.

CONSOTIUM ARRANGEMENT:
In this type of arrangement, two or more banks come together to meet the working
capital requirements of a borrower. The lending banks secure a pari-passu charge on
the current assets of the borrower.
SYNDICATION:
Syndication is an agreement between two or more lending institutions to provide a
borrower with long term funds. Syndication is similar to the system of Consortium but
enforces better discipline on the borrower through a fixed repayment period.
COMMERCIAL PAPER:
Commercial Paper is an unsecured money market instrument issued in the form of a
promissory note. The objective of commercial paper is to enable highly rated corporate
borrowers to diversify their sources of short term borrowings and to provide an
additional instrument to investors.
FACTORING:
Factoring is purchase of a domestic trade debt by a factor from a unit. Factor is a
financier. When a borrower desires to avail finance against debts arising out of sales,
the Working Capital requirement is assessed excluding the amount of book-debts to be
factored.
Business Process Re-Engineering: BPR is the fundamental re-thinking and radical
redesign of business processes to bring about dramatic improvement in performance.

FINANCIAL INCLUSION: Financial inclusion is defined as "delivery of Banking


services, at an affordable cost to vast sections of the disadvantaged and the downtrodden groups, especially in the rural areas".
FINANCIAL EXCLUSION
"Financial exclusion is the lack of access by certain consumers to appropriate, low cost,
fair and safe financial products and services from mainstream providers."

CARBON CREDITS
The Kyoto protocol which came into force on February 16, 2005 established a
mechanism for companies and governments in developed countries to contribute
towards their fight against global warming by purchasing Certified Emission Reductions
(CERs), more commonly called as carbon credits, from developing countries. Carbon
trading is nearly similar to the trading of securities or commodities in a market place.
Limited Liability Partnership (LLP)
LLP is an alternative corporate business entity that provides the benefits of limited
liability of a company but allows its members the flexibility of organizing their internal
management on the basis of a mutually-arrived agreement, as is the case in a
partnership firm.

Authorized Capital:
This is the maximum amount of capital that a company can raise as per its
memorandum of association. It is expressed in terms of number of shares, face value of
the share and total amount.
Issued Capital:
It is that part of the authorized capital for which subscription is invited from the
prospective shareholders by the company. It is not necessary that the company should
issue the entire amount of authorized capital at a time.
Subscribed Capital:
The face value of those shares that are subscribed by the shareholders out of the
issued capital is called subscribed capital. This can be equal to the amount of issued
capital. If oversubscription situation arises, the company will either refund the excess
amount or will exercise green shoe option in case the terms of issue permit.
Paid-up capital:
The amount of capital actually paid by the share holder towards the called/subscribed
capital. If amount is not fully called by the company, the amount will be less that
subscribed capital.
Green Shoe Option:
The option with the company to retain a part of the oversubscribed amount as per terms
of the issue.
Tier-I Capital: It includes Paid up capital, Statutory Reserves, Disclosed Free
Reserves, Capital Reserves arising out of sale of Assets and Investment Fluctuation
Reserves (IFR).
Tier- II Capital: It includes Undisclosed Reserves, Revaluation Reserves and General
Provisions, Hybrid Debt Capital Instruments and Subordinated Debt, Provision on
Standard Assets.
Hybrid Debt Instruments: Hybrid debt is a particular investment instrument that has
features in common with both debt, like bonds, and equity, like stocks.
Subordinated Dept: Subordinated debt is a class of debt whose holders have a claim
on the company's assets only after the senior debtholders' claims have been satisfied.
Subordinated debt offers investors a risk/return profile above that of senior debt, but
below the risk/return profile of pure equity.
Types of Ratios (Three Dimensional)
1. Solvency Ratios
a) Long Term Solvency : It indicates long term solvency of the unit.
b) Short Term Solvency: It indicates short term solvency of the unit.
c) Liquidity : It indicates the level of liquid assets in relation to the current liabilities.

2. Profitability Ratios :
a) Return on Capital Employed
b) Return on Investment
c) Return on Owners Funds
d) Debt Service coverage
e) Interest Service Coverage

(Earning capacity in relation to the assets employed in


business)
(Earning capacity in relation to the long term furnds)
(Indicates the return on the owners funds)
(Indicates the units profitability to pay the int. &
installments out of the profits)
(Indicates the profitable capacity of the unit in Terms
of interest obligations)

3. Turnover Ratios / Activity Ratios: These ratios indicates the efficiency of the
management in managing the working capital. The important ratios are:
a) Current Assets Turnover
c) Creditors Turnover

b) Stock & Debtors Turnover

Capital Adequacy Ratio (CAR) : (Tier-I Captial + Tier- II Capital) / Total Risk Weighted
Assets
Debt / Equity Ratio = Debt / Equity

(Ideal is 2 or Below)

TOL / TNW =Total Outside Liabilities / Tangible Net worth (Ideal is 3 or Below)
Current Ratio

= Current Assets / Current Liabilities(Ideal is 1.33 or above)

Debt Service Coverage Ratio(DSCR) = PBDIT / Interest+ Installments obligations


(Ideal is 1.75 or above) (Indicates the units profitability to pay the interest &
Installments out of its profits)
NET WORTH: Net Worth is the Owners Money, source of fund, which is available in the
business permanently. (Capital + Reserves + Surpluses).
TANGIBLE NET WORTH: Tangible Net worth is the true Net worth after netting out the
intangible assets and Revaluation Reserves.
(TNW = Net worth intangibles Revaluation Reserves).
Net Working Capital or Liquid Surplus or Margin :
Net Working Capital is the margin contributed by the unit. It is defined as the excess of
long term sources over the long term uses. It is also called as NWC or Liquid Surplus or
Margin for Working Capital. All the tree terms mean the same.
NWC = Total of current Assets Current Liabilities including Bank finance for WC or
Liquid Surplus = Total long term sources Total long term uses.

WILLFUL DEFAULTER:
The unit has defaulted in meeting its payment / repayment obligations to the
lender even when it has the capacity to honour the said obligations.
The unit has defaulted in meeting its payment / repayment obligations to the
lender and has not utilised the finance from the lender for the specific

purposes for which finance was availed of but has diverted the funds for other
purposes.
The unit has defaulted in meeting its payment / repayment obligations to the
lender and has siphoned off the funds so that the funds have not been utilised
for the specific purpose for which finance was availed of, nor are the funds
available with the unit in the form of other assets.
The unit has defaulted in meeting its payment / repayment obligations to the
lender and has also disposed off or removed the movable fixed assets or
immovable property given by him or it for the purpose of securing a term loan
without the knowledge of the bank/lender.
SICK UNIT:
As per MSMED Act, 2006 a sick unit is
Any of the borrowal account of the enterprise remains NPA for three months or
more
Or
There is erosion in the networth due to accumulated losses to the extent of 50%
of its net worth during the previous accounting year.
SMALL ACCOUNT:
Small Account with simplified KYC norms:
No Minimum balance requirement. But the maximum balance should not exceed
Rs. 50,000/-.
Aggregate of all credits in a Financial Year does not exceed Rs.1,00,000.00.
Aggregate of all withdrawals and transfers in a month should not exceed Rs
10,000/ Foreign Remittances are not allowed to be credited into Small Account unless
the identity of the client is fully established through the production of officially
valid documents.
Maximum 4 withdrawals in a month including ATM withdrawals
Submission of KYC Documents neither required nor to be insisted upon to open
small account
Small Accounts can be opened on production of self attested photograph and
affixation of signature or thumb impression on the Account opening form in the
presence of an authorised official of the Bank
NARROW BANKING
This concept originated in USA. Under this concept Banks are required to invest in
highly marketable liquid assets such as treasury bills. Narsimham Committee
suggested that financially weak banks should be allowed to invest only in 100 %
secured Government Paper. This will ensure that NPA will come down over a period of
time. But, another view is that banks are essentially set up to finance commercial
activities and hence they should not be prohibited from this activity. Also, if the interest
rate for Government securities come down, the viability of the bank will be affected.

SYNDIACTION & CONSORTIUM :


Syndication (vs) Consortium
A syndicated credit is an agreement between two or more lending institutions to provide
a borrower a credit facility using common loan documentation. A prospective borrower
intending to raise resources through this method awards a mandate to a bank known as
Lead Manager. The mandate spells out the commercial terms of credit.
The lead manager charges a syndication fee for his services, who prepares an
information memorandum in consultation with the borrower and circulates the same
among prospective lenders soliciting their participation in the proposed loan.
Syndication is very similar to the system of consortium lending in terms of dispersal of
risk but enforces better discipline on the borrower through a fixed repayment period.
Consortium finance means several banks finance a single borrower with a common
appraisal, common documentation, joint supervision and follow up. Advantages are :
a.
b.
c.
d.
e.

Resources of banks are conserved by limiting exposure


Risk can be spread over a larger portfolio of borrowal account
cut throat competition for high quality and high value accounts can be avoided
when banks act together, enforcement of financial discipline is easier.
credit management work is shared resulting in saving of man power and other
resources.
f. banks can learn from each other and improve credit management skills.
Takeout Finance
Takeout finance is the product emerging in the context of the funding long term
infrastructure projects,
The Institution/bank financing infrastructure projects will have an arrangement
with any financial institution for transferring the latter the outstanding in respect of
such financing in their books on a predetermined basis.
Factoring
Factoring involves purchases of receivables of the company for payment of cash.
In effect, the company, which sells its goods, gets cash payment immediately
from a third party called Factor.
The need for factoring arose on account of the inordinate delays faced by
suppliers in realizing their bills from their customers
Factoring includes other functions such as account maintenance, collection of
debt and risk assumption.
Financial inclusion - a National priority.
Financial inclusion is defined as delivery of banking services, at an affordable
cost to vast sections of the disadvantaged and the downtrodden groups,
especially in the rural areas. In other words, it aims at providing access to
savings, payment and remittance facilities, loans, insurance, etc. by the formal
financial system to those who are excluded.
Sustainable development can be achieved when rural people are part of the
development process and it is education, which unlocks the mental faculty and
prepare the so called majority for active participation in this process.

Bank nationalization in India marked a paradigm shift in the focus of banking as it


was intended to shift the focus from class banking to mass banking. The
rationale for creating Regional Rural Banks was also to take the banking services
to poor people.
Corporate Governance
To enhance shareholders value.
To protect interest of shareholders, customers, employees and society at large.
To ensure transparency and integrity in communication and to make available
clear information to all concerned.
To ensure accountability for performance and to achieve excellence at all levels.
Kumar Mangalam Birla Committee has given various recommendations on it.
To provide corporate leadership.
Essential features of a currency note

Name of Issuing Authority


Guarantee Clause
Promise Clause
Signature of Issuing Authority
Rs.1/- - By Secretary, Ministry Finance on behalf of Govt. of India.
Above Rs.1/- RBI Governor.
Ashoka Pillar emblem.
Water Mark.
Security Thread

Cheque Truncation System

Capture image of cheques and restricts their physical movement.


This will speed up the collections.
To prevent the possibility of frauds.
To control the complaints of missing of instruments.

Mobile Banking is introduced in banks.


Mobile phones can be used as a medium of banking services.
The rapid growth in users and wider coverage of mobile phone network has
made it an important platform for extending banking service.
It is cost effective. 4] It will attract new generation customers. 5] Nationalised
banks can meet the competition. 6] In order to ensure the level playing field for
our bank in comparison of Foreign/Private banks.
Whistle Blowing
The growing number of frauds and declining ethical values and corruption at high levels
made it necessary to introduce a system whereby a check can be had. It will also boost
the morale of the lower level people in an organisation.

Cross Selling
It is selling additional products/ services to an existing as well as new customers
and it fosters brand loyalty.
It costs a bank five times less to cross sell an existing client than to acquire a
new one.
Cross Selling helps bank to plan, implement, and maintain better customer
relationship management programmes.
Right product at a right time offered to customer. This builds banks image.
It helps bank to increase miscellaneous income.
To face the competition.
Banks to focus on CASA Deposits.
CASA deposits are low cost deposits. They are stable and useful for ALM. Since
CASA deposits are obtained from a large number of customers, it eliminates the shocks
of sudden withdrawals. Customer base will increase which increases cross selling
opportunities and revenue to the bank. This is also a way of financial inclusion.
TDRs maturing on holidays are repaid on succeeding working day
but not on preceding working day.
Bank holidays are declared as per section 25 of NI Act with specific
reference to payment of negotiable instruments which are paid on
the previous working day.
TDRs are not negotiable instruments but are receipts of money
deposited. Their payments cannot be made before maturity as per
contract.

BUYERS CREDIT & SUPPLIERS CREDIT


Referred to as Trade Credits and extended only for Import payment.
Maturity period maximum 3 years.
Arranged by domestic branches but extended from our foreign offices/banks
abroad.
Based on LC Suppliers Credit. Based on LOU/LOC Buyers Credit.
CARBON CREDIT :
The concept of carbon credits came into existence as a result of increasing
awareness of the need for controlling emissions. The mechanism was formalized
in the Kyoto Protocol, an international agreement between more than 170
countries.
India has generated approximately 30 million carbon credits and approximately
140 million in run, the second highest transacted volumes in the world.

Indias carbon market is growing faster than even information technology, biotechnology and BPO sectors.
CHEQUE TRUNCATION SYSTEM:
Cheque Truncation System is an image based clearing system where the
Physical cheque is truncated (stops moving) at the presenting branch and the
image thereof is sent to the drawee branch through the clearing house for
payment
CTS speeds up the process of inter-bank clearing resulting in better customer
service and reduces the scope of clearing related frauds or loss of instruments in
transit
A GRID based approach to cover national roll out of CTS is envisaged to cover
even small branches which are not even member of any clearing operation now.
To ensure uniformity in respect of the size, paper quality and security features a
standardized Cheque format CTS 2010 is to be used by the Customers
With amendments in the Sections 6 and 1(4), coupled with the introduction of 81
A to the Negotiable Instruments Act, 1881, truncation of cheques is now
legalized.
CORPORATE DEBT MARKET:
In contrast to equity and government securities markets, the corporate bond
market has languished both in terms of market participation and structure.
With the intervention of the Patil Committee recommendations, the corporate
bond market is slowly evolving.
Several initiatives taken earlier to development corporate bond market.
Concerned departments of the Government, RBI and SEBI to work in tandem to
further boost the corporate bond market.

SHADOW ENTREPRENEURS:
Shadow entrepreneurs are operating in India who have not registered their businesses
with official authorities, hampering economic growth.
Shadow entrepreneurs are individuals who manage a business that sells legitimate
goods and services but they do not register their businesses. This means that they do
not pay tax, operating in a shadow economy where business activities are performed
outside the reach of government authorities.

RAJIV RINN YOJANA:


RAJIV RINN YOJANA (RRY)
The Ministry of Housing and Urban Poverty Alleviation, Govt. of India has designed an
alternative interest subsidy scheme for Housing to urban poor namely Rajiv Rinn

Yojana, as an additional instrument for addressing the housing needs of the EWS /LIG
segments in urban areas.
Purpose of the Scheme:
To provide affordable housing loans with Central Government Subsidy to EWS / LIG
persons for: a) Acquisition of House. b) Construction of House.
EWS: Economically Weaker Section (Family income not above Rs.1,00,000/- annum).
LIG: Low Income Group (Family income between Rs.1,00,001 to Rs. 2,00,000/annum).
The Rajiv Rinn Yojana Scheme came into effect from October 1, 2013. It has
replaced Interest Subsidy Scheme for Housing the Urban Poor (ISHUP).
The Rajiv Rinn Yojana Scheme combines subsidy benefit with 100% security by
way of mortgage of house. Loans granted under the scheme will be classified
under Priority Sector Housing (Direct) and also under Weaker Sections.
The scheme will close on March 31st, 2017 (last year of the 12th Five year plan
period). However, the loans extended in the last year will also have repayment
period up to 15 years.
In every State, the annual targets of each bank will be fixed by SLBC as per
state-wise scheme targets.

Shadow Banking: Shadow banking refers to credit intermediation that supervenes


outside the traditional banking system and entails maturity or liquidity transformation. It
is a system in which nonfinancial institutions borrow money in the short term and take
that money to invest in long-term assets.
Shadow banking systems are able to avoid standard banking regulations through the
use of credit derivatives. These are also said to be one of the major problems which
contributed to the sub-prime mortgage crisis. The shadow banking system has escaped
regulation primarily because it did not accept traditional bank deposits. As a result,
many of the institutions and instruments were able to employ higher market, credit and
liquidity risks, and did not have capital requirements commensurate with those risks.
PAYMENTS BANKS:
The objectives of setting up of payments banks will be to further financial inclusion by
providing (i) small savings accounts and (ii) payments/remittance services to migrant
labour workforce, low income households, small businesses, other unorganised sector
entities and other users.
The minimum paid-up equity capital for payments banks shall be Rs. 100 crore.
Scope of activities :
a. Acceptance of demand deposits. Payments bank will initially be restricted to
holding a maximum balance of Rs. 100,000 per individual customer.
b. Issuance of ATM/debit cards. Payments banks, however, cannot issue credit
cards.
c. Payments and remittance services through various channels.

d. BC of another bank, subject to the Reserve Bank guidelines on BCs.


e. Distribution of non-risk sharing simple financial products like mutual fund units
and insurance products, etc.
f. The payments bank cannot undertake lending activities.
SMALL FINANCE BANKS:
The objectives of setting up of small finance banks will be to further financial inclusion
by (a) provision of savings vehicles, and (ii) supply of credit to small business units;
small and marginal farmers; micro and small industries; and other unorganised sector
entities, through high technology-low cost operations.
Scope of activities :
a. The small finance bank shall primarily undertake basic banking activities of
acceptance of deposits and lending to unserved and underserved sections
including small business units, small and marginal farmers, micro and small
industries and unorganised sector entities.
b. There will not be any restriction in the area of operations of small finance banks.
Capital requirement: The minimum paid-up equity capital for small finance banks shall
be Rs. 100 crore.
PRADHAN MANTRI JAN DHAN YOJANA:
Aim of the Scheme: eradicating financial untouchability by providing bank accounts to
the poor. The programme is aimed at making financial services available to every
household instead of taking a village based approach followed by the previous
government.
Target : Within 100 days of forming the new govt., the Govt. plan to cover 7.5 cr. people
by January 26, 2015.
Important Features of the Scheme:
a) Under the scheme, account holders will be provided zero balance bank account with
RuPay debit card, in addition to accidental insurance cover of Rs 1 lakh.
b) Those who open a/cs by January 26, 2015 over & above the Rs.1 lakh accident, they
will be given life insurance cover of Rs.30,000.
c) Six months of opening of the bank account, holders can avail Rs 5,000 loan from the
bank.
d) With the introduction of new technology introduced by National Payments
Corporation of India (NPCI), a person can transfer funds, check balance through a
normal phone which was earlier limited only to smart phones so far.
e) Mobile banking for the poor would be available through National Unified USSD
Platform (NUUP) for which all banks and mobile companies have come together.

FORENSIC AUDIT IN BANKS


The Finance Ministry has issued instructions for undertaking Forensic audit in banks as
UCO Bank becomes the latest, and fifth, to join the growing list of public sector banks after United
Bank, Syndicate Bank, Dena Bank & OBC.

The reason behind undertaking the Forensic Audit are varied -starting from efforts to
stem malpractices ranging from hiding NPAs to accepting bribe to enhance credit limits
to a defaulting
account to misappropriating funds from fixed deposit customers. The Ministry fears the
Mumbai-based branches of Oriental Bank of Commerce and Dena Bank have
misappropriated funds to the tune of Rs 436 crore.
FORENSIC AUDITING refers to the specific procedures aimed at legal determination
of whether fraud has actually occurred and also to quantify the amount of fraud.
Forensic audit involves examination of legalities by blending the techniques of propriety
(VFM audit), regularity and investigative and financial audits. The objective is to find out
whether or not true business value has been reflected in the financial statements and in
the course of examination to find whether any fraud has taken place. Audit techniques
are used to identify and to gather evidence to prove, for example, how long the fraud
has been carried out, and how it was conducted and concealed by the perpetrators.
Skills for Forensic Audit:
Knowledge of entitys business and legal environment.
Awareness of computer assisted audit procedures.
Innovative approach and skeptic of routine audit practices.
Application: Forensic Accounting and Audit may be applied in the following areas
besides fraud detection:
Conducting due-diligence (especially for segment wise profitability analysis).
Business valuation.
Management auditing.
Assessing loss before settling insurance claims.
Aspects to be covered under Forensic Auditing:
Objective of forensic audit is to find whether or not a fraud has taken place. Forensic
auditor shall have to examine voluminous and in totality, records and witnesses, if
permitted by law. Proper documentation is vital in substantiating the findings. The
outcome shall focus on the following, in case of frauds:

Proving the loss.


Proving the responsibility for the loss.
Proving the method / motive.
Establishing guilt knowledge.
Identifying other beneficiaries.

Green Channel Counter:


Green Channel Counter is an innovative step towards paperless Green
Banking for deposit, withdrawal and funds transfers within the Bank. The
customer need not fill up any pay-in slip or draw cheques for depositing or
withdrawing money from their accounts. The customer should bring his / her
ATM cum Debit Card and remember his / her PIN (Personal Identification
Number).

At the Green Channel Counter, there is a Transaction Processing Device


(Similar to Point of Sale Machine) available at the Single Window
Operator (SWO).
Customer has to swipe his / her ATM card on the machine.
Customer is asked by the machine to select the type of transaction, viz.,
Cash Deposit, Cash Withdrawal or Funds Transfer (within SBH).
Enter the amount of transaction and confirm it.
Enter the PIN.
The transaction gets transferred to the terminal of SWO who pays /
receives cash and the transaction gets completed.
Similar steps as displayed on the screen have to be followed in respect
of funds transfer within the Bank.
The customer will be provided with a machine generated printed receipt
for the transaction.
There is no need to remember the 11 digit account number or carry
passbook. Only the ATM cum Debit Card and PIN are needed.
Customer can use the Green Channel Counter without standing in
queue and without taking the token. He / She may simply walk up to the
Counter, Swipe their ATM card and execute the transaction.
Can transact up to Rs.40,000/- per transaction and no limit on number of
transactions.
Odd amount (in round rupees) transactions are possible.
ENJOY PAPERLESS BANKING
NO Pay-in-slips
NO Withdrawal Forms
NO Cheque Leaves
NO Remittance Forms
SAVINGS PRODUCTS COMPARISON
Features

Eligibility

Purpose

Name of
the a/c
Savings
Bank
Individuals
including
minors and
NRIs; HUF
Single/Joint

Name of the
a/c
Savings
Plus
Individuals
including
minors and
NRIs; HUF
Single/Joint

Name of
the a/c
SSS Silver

Name of the
a/c
SSS Gold

Salaried
Employees
with take
home pay
upto
Rs.50000/with a tie up
with
employer

Salaried
Employees
with take
home pay of
Rs50,000/-or
more with
/without a tie
up with
employer

Transaction
a/c

Transaction
a/c with
Sweep &
reverse
sweep facility
for investing
in TDR/STDR
automatically

Transaction
a/c with
option of
sweep &
reverse
sweep
facility for
investing in
TDR/STDR
automaticall
y

Transaction
a/c with
option of
sweep &
reverse
sweep facility
for investing
in
TDR/STDR
automatically

Name of the
a/c
Premier
Savings
Individuals
including
minors and
NRIs; HUF
Single/Joint
Aimed at High
Net worth
Individuals

Name of the
a/c
GEN-X

Name of the a/c

Resident
Individualsabove
18years & up
to 30 years of
age.
Single/Joint
First a/c
holder should
be in the
above age.

Non Resident
Individuals
including minors
Single/ Joint
Joint only with
another NRI

Transaction a/c
with option of
sweep &
reverse sweep
facility for
investing in
TDR/STDR
automatically

Transaction
a/c

Transaction a/c

NRE (Savings)

Minimum
Balance
Stipulation
&
Charges for
Non
Maintenance
of Quarterly
Average
Balance
(Q.A.B)

Nil

Nil

Rs5,000/-

Charges for
nonmaintenance
of Q.A.B`300/qtr at
Metro/ Urban
centers
`150/ qtr at
semi-urban/
rural centre

Nil
However,
should the
customer
use a nonState bank
group ATM
more than
once during
a month,
the
minimum
balance
clause as
applicable
to normal
savings a/c
will apply
and related
charges will
be applied
during the
month

Nil

Rs.1,00,000/average
quarterly
balance;

Rs. 5,000/-

Nil

Free at
home
branch;
Can be
downloaded
thru Inter
Net
Banking
Per
annum50
leaves -free
Issue of
domestic
card-Free;
Annual
Maintenanc
e-Free;
Add on
card-Free
Duplicate
Pin-Rs50/Duplicate
cardRs200/Internationa
l debit
Card-at
specific
request and
at the
discretion of
Branchchargeable.

Free at home
branch;
Can be
downloaded
thru Inter Net
Banking

Free at any
branch;
Free over email
Can be
downloaded
thru Inter Net
banking

Free at home
branch;
Can be
downloaded
thru Inter Net
Banking

Free at any
branch;
Free over email
Can be
downloaded thru
Inter Net banking

Per
annum50
leaves -free
Issue of
domestic
card -Free;
Annual
Maintenance
-Free;
Duplicate
Pin-Rs50/Duplicate
cardRs200/International
debit Card-at
specific
requestchargeable

Per annum50
leaves -free

Per annum50
leaves -free

Per annum50
leaves -free

Issue of
domestic cardFree;
Annual
MaintenanceFree;
Add on cardfree
Duplicate Pinfree
Duplicate cardfree
International
debit Card-at
specific
requestchargeable

Issue of
domestic card:
free
International
debit Card:
chargeable

Domestic/
International Debit
Cards

Nil
Charges for the
nonmaintainance
`1,000 per
quarter

Statement of
account

Free at
home
branch;
Can be
downloaded
thru Inter
Net Banking

Free at home
branch;
Can be
downloaded
thru Inter Net
Banking

Multi City
Cheque book

Per
annum50
leaves -free
Issue of
domestic
card-free;
Add on
card-Free
Annual
Maintenanc
e-Rs50/International
debit Cardat specific
request and
at the
discretion of
Branchchargeable.
Duplicate
Pin-Rs50/Duplicate
cardRs200/-

Per annum50
leaves -free

Internet
Banking

Free
Free Funds
Transfer up
to Rs1.00lac
per day;

Free
Free Funds
Transfer up
to Rs5.00lac
per day;

Free
Free Funds
Transfer up
to
Rs5.00lac
per day;

Free
Free Funds
Transfer up
to Rs5.00lac
per day;

Free
Free Funds
Transfer up to
Rs5.00lac per
day;

Free
Free Funds
Transfer up to
Rs5.00lac per
day;

Available

Mobile
Banking
Minimum
Threshold
amount for
Sweep &
reverse sweep
Auto sweep
frequency

Free

Free

Free

Free

Free

Free

Not
applicable

Rs50,000/-

Rs50,000/-

Rs50,000/-

Rs100,000/-

Not Applicable

Not Applicable

Not
applicable

Once in a
calendar
month from
16th to 20th.

Once in a
calendar
month from
16th to 20th

Once in a
calendar
month from
16th to 20th

Once in a
calendar month
from 16th to 20th

Not Applicable

Not Applicable

ATM / Debit
card

Issue of
domestic
card-free;
Add on cardFree
Annual
MaintenanceRs50/Duplicate
Pin-Rs50/Duplicate
card- Rs200/International
debit Card-at
specific
request and
at the
discretion of
Branchchargeable

Tenor of Auto
sweep term
deposits

Not
Applicable

Minimum 1
year;
Maximum-3
years;
Default tenor1 year;
Amendment
charges for
tenor/
thresholdRs25/-(each
time)

Minimum 1
year;
Maximum-3
years;
Default
tenor-1
year;
Amendment
charges for
tenor/
thresholdRs25/(each time)
Free cash
withdrawal
up to
Rs50,000/per day at
non-home
branch (a/c
holder only)

Minimum 1
year;
Maximum-3
years;
Default
tenor-1 year;
Amendment
charges for
tenor/
thresholdfree

Minimum 1
year;
Maximum-3
years;
Default tenor-1
year;
Amendment
charges for
tenor/
threshold-free

Not Applicable

Not Applicable

Any Branch
Banking

Free cash
withdrawal
up to
Rs50,000/per day at
non-home
branch (a/c
holder only)

Free cash
withdrawal up
to Rs50,000/per day at
non-home
branch (a/c
holder only)

Free cash
withdrawal
up to
Rs50,000/per day at
non-home
branch (a/c
holder only)

Free cash
withdrawal up
to Rs50,000/per day at nonhome branch
(a/c holder
only)

Applicable
charges

Permissible
credits:

Demand Drafts

Chargeable

Chargeable

For those
whose
salary is
Rs20,000/or morefree
demand
drafts up to
Rs20,000
per month

Free up to
Rs50,000
per month

Free up to
Rs50,000 per
month

Chargeable

Inward-free
Outwardchargeable
At specific
requestchargeable

Inward-free
Outwardchargeable
At specific
requestchargeable

Inward-free
Outwardchargeable
At specific
requestchargeable

Inward-free
Outwardchargeable
At specific
requestchargeable

Inward-free
Outwardchargeable
At specific
request-first
year fee waived

At home
branch-One
Demand Draft/
Bankers
Cheque per
calendar year
favg
Educational
Institution/
application fee
for job-free
Free
Collection of
Cheque/s up
to Rs.20,000/per
month.(only at
home branch)
Inward-free
Outwardchargeable
At specific
requestchargeable

RTGS/
NEFT/SBGRP
T
Demat account

Housing Loans

Normal TAT
Normal
charges

Normal TAT
Normal
charges

Normal TAT
Normal
charges

Tat- 6 days;
50 %
concessions
in processing
fees;
Other
chargesnormal

Normal TAT
Normal
charges

Normal TAT
Normal charges

Auto loans

Normal TAT
Normal
charges

Normal TAT
Normal
charges

Normal TAT
Normal
charges

Normal TAT
Normal
charges

Normal TAT
Normal charges

Accident
Insurance

Not
available

Not available

Not
available

TAT-same
day;
50% waiver
in processing
fees.
Not available

Tat- 6 days;
50 %
concessions in
processing fees
for accts
>6months old;
25%
concessions in
processing fees
for accts
<6months old;
Other chargesnormal
TAT-same day;
50% waiver in
processing
fees.
Free personal
accident
coverage for
Rs.5 lacs for
one year.

Not available

Not available

Inward-free
Outwardchargeable
At specific
requestchargeable

TIPS FOR INTERVIEW

Basically, the Interviewer before calling you for the interview goes through
your bio data, which includes your personal details, academic details and
your background. So your Interview will revolve around all the above three
points plus knowledge of present assignment. If you have prepared well
for the above points your half work is done. Apart from this, if you can
keep in mind the following points and practice them during mock
interviews, then be sure you are through.
1) Whenever the Interviewer asks questions, listen carefully. Do not
interrupt midway. Ask for a clarification if the question is not clear. Wait
for a second or two before you answer.
2) Speak clearly. Dont speak very slowly. Be loud enough so that the
interviewer doesnt have to strain their ears. Feel free to ask questions if
necessary. It is quite in order and much appreciated by Interviewers. But,
please dont overdo it.
3) If you dont know an answer, be honest. The interviewer will respect your
integrity and honesty. Never exaggerate.
4) Never boast about your achievements. Dont be overconfident-it is often
misinterpreted for arrogance.
5) Dont get into an argument with the interviewer on any topic. Restrain
yourself.
6) Remember your manners. Project an air of humility and be polite.
Maintain a cheerful disposition throughout the Interview, because a
pleasant appearence holds the interviewers interest. Avoid playing with
fingers or tie, moving legs.
7) Project enthusiasm. The interviewer usually pays more attention if you
display enthusiasm in whatever you say.
8) Maintain perfect eye contact with all panel members, make sure you
address them all. This shows your self confidence and honesty.
9) When questions are asked in English, reply in English only. Do not reply in
any other languages. Please take permission to reply in other language if
necessary.
10)

Do not keep shifting your position. Your posture and gesture during the
interview adds to your personality so be conscious about that.

11)

Make sure you thank the interviewers as a mark of respect for the time
they have spared for you. After getting up, place your chair in its original
position

12) Be natural and Have full faith in yourself.

OUR TOP MANAGEMENT

1. CHARIMAN: Smt. Arundhati Bhattacharya


2. MANAGING DIRECTOR: Shri. Santanu Mukherjee
3. CHIEF GENERAL MANAGER(Comm.banking): Shri. Jasbir
Singh Aneja
4. CHIEF GENERAL MANAGER(Retail Banking): Shri V.
Viswanathan
5. GENERAL MANAGER (HR & Gen Adm): Shri. V. Sivasri
6. GENERAL MANAGER (IT & NEW BUS): Shri. G.D. Rozario
7. GENERAL MANAGER (Corp Banking): Shri. I Siva Kumar.
8. GENERAL MANAGER (TRY & F&A): Shri Subbaraman K.S..
9. GENERAL MANAGER (SLBC,PS,FI,R.B): Shri. J. Sitapathi Sarma
10.GENERAL MANAGER (New Delhi Network): Shri S. K.Jha

11.GENERAL MANAGER (Mumbai Net Work) Shri. M.P.Tripathi

12.GENERAL MANAGER (Hyd Network) Shri Devendra Kumar

13. GENERAL MANAGER (C.N.W Mumbai) Shri. B.Ganesh Pai

14. GENERAL MANAGER (stressed Asset Mgmt) Shri. G.


Rajendra Kumar

15. GENERAL MANAGER (Bengluru Network) Shri. Shivaram B.K.

16.GENERAL MANAGER (Risk Mgmt, C.P & P.) Smt. Vasudha


Bhat Kumar

17. GENERAL MANAGER (CVO): Smt. M. Yashodabai

18. GENERAL MANAGER (Warangal Network) Shri. Manikandan


S

19. GENERAL MANAGER (Vijaywada Network ) Shri. K.Harihar


Rao
20. GENERAL MANAGER (Inspaection and Audit) Smt. L T
Ambujakshi
21 GENERAL MANAGER (MSME): Shri . C Krishna Murty

22. GENERAL MANAGER (P & SB): Shri. Anil Malhotra

IMPORTANT DEFINITATIONS & QUESTIONS FOR INTERVIEW

GENERAL:

1. BANK RATE: The standard rate of interest at which the R.B.I. is prepared to
buy / rediscount bills of exchange or other commercial paper eligible for
purchase under the R.B.I. Act. 8.50% REPO rate 7.50% Reverse REPO 6.50%
2. C.R.R.: Amount of cash reserves to be maintained by scheduled banks in
terms of section 42 of the R.B.I. Act 1934 which is 4 %
3. S.L.R.: A ratio of reserves to be maintained by commercial banks statutorily
under section 24 of the Banking Regulation act 1949 to ensure liquidity of the
banking system. 21.50%
4. MUTUAL FUNDS: Mobilisation of funds by organizations in public sector and
private sector for purposes of investment in stock market securities so as to
give adequate return to the investors who cannot invest directly.
5. MERCHANT BANKING: Activities relating to corporate finance, public issue,
project finance, mergers and acquisitions undertaken by a merchant banker.
6. LEAD BANK SCHEME: Committee which was formed to study organizational
work for the implementation of social objectives under the chairmanship of
Prof. D.R.Gadgil recommended for preparation of comprehensive credit plan
for the development of banking in the country and to adopt an area approach
by allotment of districts to various commercial banks where they should lead
and act as a leader. The lead bank is expected to assume the major role in
the development of banking facilities and credit in the allotted districts
formulated in DEC 1969.
7. NABARD: National Bank for Agriculture and rural development established on
12th July 1982 by merging agricultural refinance and development corporation
and agricultural credit department of the R.B.I. This is the apex institution in
respect of credit and policy guidelines and for providing refinance for
agricultural and rural development.

8. RIDF (Rural Infrastructure development fund) The fund created and


maintained by NABARD with the contribution from the commercial banks who
fails to achieve the stipulated 18% of the agricultural advances. This fund is
made available to the State Governments for infrastructure developments
like irrigation roads etc as soft loan assistance.
9. RETAIL BANKING; catering to the multiple banking requirements of individuals
relating to deposits, advances and associated services.
10. ALM: It is comprehensive and dynamic framework for measuring, monitoring
and managing the market risk of a bank. It is the management of structure of
balance sheet in such a way that the net earning from interest is maximized
within the overall risk-preference of the institutions.
11. UNIVERSAL BANKING: it means allowing Fis and banks to undertake any
activity of banking or development financing or activity associated with that,
subject to compliance of statutory and other requirements prescribed by RBI
Govt. and related legal acts. This will bring harmony in the role of Fis and
banks.
12. PREVENTIVE VIGILANCE; P.V relates to the systems and strategy which an
organization puts in use or should formulate to eliminate or minimize the
potential for irregularities taking place.
13. CREDIT RATING: it is considered opinion of the credit rating agency on the
future ability and legal obligations of the company being rated, to make
timely payment of principal and interest.. it is current assessment of credit
worthiness of an borrower with respect to specific obligation .
14. NEGATIVE GROWTH; Decrease in business levels below March level.
15. NEGATIVE VARIENCE: Decrease in business levels budgeted for the current
month.
16. BUDGET: a budget is a plan of action a pre-determined schedule of activities
in a given period for the achievement of objectives established.
17. PLANNING; Planning is a process of choice of the course of action in the
future. It involves listing of alternative course of action, measuring result and
deciding the course of action to achieve the ultimate objective.
18. G.R.R.; it is net percent of the net result from branch operations on average
deposits and advances.
25. What is financial inclusion ?

Financial inclusion means delivery of banking services to the most


disadvantageous sections of society ie particularly low income groups at an
affordable cost. The ministry of finance and Reserve Bank of India are
propagating this term for faster and focused growth of Indian economy. The
strategy followed for achieving this is by way of opening no frills accounts or
issuing General Purpose Credit Cards.

26.Why the BPR initiatives have been introduced.


There is fundamental change in competition, technology and customer
expectation. Market share has declined despite various efforts made by the
bank. Many processes have remained the same over time. This is hindrance
to business growth and world-class performances.
With the same business process, we cannot remain a potent force to retain
the business share and in no case we can improve the market share of
business.
BPR will lead to world-class processes and supporting operating
architecture, which make best use of new technologies to meet customer
expectations better than the competition and help in retaining market
share.

27. Why Cross Selling is being given importance?


Customer acquisition is very difficult and cost intensive while cross selling
costs almost zero for old customer
Cross-selling helps bank to plan, implement and maintain better customer
relationship. It helps to retain customer and enhance customer value and
provide delight to customer. It improves profit of the Bank. It improves
brand loyalty. If customer has taken more than one product chances of
switching to another bank is reduced substantially.

28. What is Drop Box ?


The instant prototype will provide customer convenience to deposit cheques
without any queue and customer can drop instruments at any time and
cheque will be processed without any loss of time.
This facility is part of BPR initiatives.
It is also on recommendation of S.S. Tarapore committee (RBI)

29.The Bank has set up Central Processing Centres (CPC).

CPCs is proposed to do the processing work of the branches. The branches


are the front office of various business processes. CPCs will do the back office
work and make the branches really as a point of selling and marketing of the
product. These CPCs will enhance the uniformity decrease the irregularities
and consequently decrease the objection of Central office inspectors. Various
CPCs such as LCPC, RACPC, Central Pension Processing Cell, Clearing and
collection business have been launched. The will decrease the work load at
the branches and free them to market, sell and cross sell the products and
improve the customer service. It will also strengthen the process of the bank.

30. Rationale for banks entering into insurance sector.


a) Large network of branches all over the country.
b) Strong and loyal customers base who have developed confidence in
the banks.
c) Motivated, trained and dedicated work force.
d) Insurance activity is very similar to banking activity. With training /
orientation, existing staff can undertake insurance activity.
e) The surplus staff due to computerization can be productively deployed
for marketing of insurance services.
f) Diversification of service / activities to serve public better and also to
increase fee-based income
31. WHAT IS BASE RATE?
Base rate is the basic rate of interest on which the actual rate a bank
charges on loans to its customers is calculated. The criteria will go
into determining the base will include cost of deposits, adjustment for
the negative-carry in respect of the CRR and the SLR, un-allocated
overhead costs (such as aggregate employee compensation relating
to administrative functions in Corporate Office, Directors and
Auditors fees, legal and premises expenses, IT spending,
depreciation, and profit margin. Actual lending rates will take into
account the credit risk of a borrower and the product. The actual
lending rate charged to borrowers would be the base rate plus
borrower-specific charges, which will include product-specific
operating cost, credit-risk premium, and tenure premium. Present
base rate is 10.20
32. What do you mean by Money Laundering :
Section 3 of PMLA has defined the offence of money laundering as :
Whosoever directly or indirectly attempts to indulge or knowingly
assists or knowingly is a party or is actually involved in any process or
activity connected with the proceeds of crime and projecting it as
untainted property shall be guilty of offence of money laundering.

33. What is CASA? What is importance of CASA ?


CASA is Current Account /Saving Account. These are no cost and low
cost deposits. The higher percentage of CASA helps in reduction of cost
of deposit and directly enhances the profitability of the bank. CASA
helps in having direct touch with our customers which helps in
marketing our new liability and cross selling products.
34. What do you mean by Plastic Money?
Plastic cards are used as a medium of payment and are of different kinds with

different features. These cards include credit cards, debit cards, smart
cards
35. What is REPO and reverse REPO?

Repo refers to injection of funds: It is the mechanism by which RBI adds


liquidity to the banking system. Any bank can park its Govt. securities with
RBI and draw it liquidity requirement with an agreement to buy the paper
security back from RBI after a specified number of days.

Reverse Repo refers to absorption of funds: The banking system parks its
excess liquidity with RBI and purchases the Govt. securities with an
agreement to reverse the transaction at a later date. This help in absorption
of excess liquidity from the system.

Advantanges of Repos: 1. RBI uses as an integral part of their open market


operations with the objective of injecting / withdrawing liquidity into and from
the market and also to reduce volatility in the short term, in particular, in call
money rates. This in turn helps to keep a control over inflation. 2. An active
repo market leads to an increase in turnovers in the money market, thereby
improving liquidity and depth of the market.

LOANS AND ADVANCES:

1. RIGHT OF SET OFF: Right to transfer assets and liabilities from one account to
another account which is in the same capacity is known as right of set off. To
avoid the litigation bank takes a letter of set off from the customer who is
maintaining different types of accounts in the same capacity while
sanctioning a loan.
2. RULE IN CLAYTONS CASE: In the cases of death or insolvency of a partner of
a firm, the then existing debt due from the firm is adjusted or set off by
subsequent credit made in the account. Thus, the banker loses his right to
claim such debt from the assets of the deceased, retired or insolvent partner
and may ultimately suffer the loss if the debt, cannot be recovered from the
remaining partners. Therefore, to avoid the operation of the rule given in the
Claytons case, the banker closes the old account of the firm and opens a
new one in the name of the reconstituted firm. Thus the liability of the
deceased. retired or insolvent partner, as the case may be at the time of
death, retirement or insolvency is determined and he may be held liable for
the same.
3. POWER OF ATTORNEY: It is document executed by principal in favour of agent
to act on behalf of the former strictly as per authority given in the document.
4. GARNISHEE ORDERS: Orders issued by the court in favour of judgment
creditors for a debt due from the judgment debtor (Bank customer) upon a
third party (Bank) so as to attach the money so owing for the purpose of
satisfying judgment debt. Order is issued under the civil procedure code on
the banker.
5. ATTACHMENT ORDERS: When the orders are issued by the Revenue
authorities for recovery of dues they are called as attachment orders.
6. RISK MANAGEMENT: After introduction of reforms since 1992-93 there is a
very significant development in the concept of risk. Banks have come to
realize that mitigation of risk is not ensured by simply getting adequate
security by ensuring that there is no occurrence of default of payment of
instalments/interest during the currency of loan. To study this, four types of
risks are carefully examined . they are industry/activity risk, management
risk, commercial risk and financial risk.
7. CAPITAL ADEQUACY : Banks have to calculate risk-weighted assets by
assigning differing risk-weights to the various assets appearing on their
balance sheet as on the every 31st march and maintain 9% of Risk weighted
assets as minimum capital.
8. IRAC: No income can be taken to profit and loss account if the
interest/instalment in a borrowal account remains unpaid for a period more
than 90 days from the due date. The account has to be designated as non-

performing assets. The banks are required to classify the accounts according
to its performing nature. Standard, sub-standard, doubtful or loss. Banks
have to make provision from out of the profit as per the nature of the asset.
9. ROC: Whenever a advance is granted charging the assets of the company,
the charge has to be registered with the registrar of companies (ROC) within
30 days from the date of creation, under section 125 of the Company Act
1956. It is created by filing form no 8 and 13 with ROC. A banker has to
charge the assts of the company in respect of all credit facilities extended,
except pledge.
10. PACKING CREDIT: It is export credit sanctioned for purchasing, procuring,
processing and packing goods meant for export. This facility is extended by
way of hypothecation or pledge to an exporter.
11. BANK GUARANTEE: Section 126 of Indian Contract Act 1872, defines B.G. as a
contract to perform the promise or discharge the liability of a third person in
case of his default.
12. D.P.G. Deferred payment guarantees are basically financial guarantees which
are considered when transactions of sale-purchase of capital goods are
involved.. Usually in such transaction, a down payment of around 15% of the
cost of goods is made and the balance of 85% including interest thereon is
agreed to be made payable to installments spread over a period of time. As
this involves commitment on the part of guaranteeing banker for a long
period, the banker has to do a rigid and comprehensive appraisal of the
proposal for issue of DPG as is done in case of sanction of a term loan.
13. LETER OF CREDIT: A letter of credit is an arrangement whereby a banker
acting at the request of a customer, undertakes to pay a third party, by a
given date according to agreed stipulations and against presentation of
documents, the counter-value of the goods or services rendered or otherwise.
14. HYPOTHECATION; It is charge which is preferred when the property to be
taken as security is movable. It creates merely an equitable or notional
charge on the property with a right to a banker to take possession of the
property and sell the goods on default or a right to sue the owner to bring the
property to sale and for realization of the amount due. Hypothecation has
been defined in SARFAESI Act
15. PLEDGE: Section 172 of the Indian Contract Act 1872 defines pledge as a
bailment of goods as security for repayment of a debt or performance of a
promise. Section 148 of The Indian Contract Act 1872 defines bailment as
delivery of goods by one person to another as security for any some purpose,
upon a contract that the goods, shall when the purpose is accomplished, be
returned or disposed off according to the instructions of the person delivering
the goods.

16. MORTGAGE: Mortgage is defines under section 58 of Transfer of property act


as transfer of an interest in a specific immovable property for the purpose of
securing the money advanced or to be advanced or an existing or future debt
or for performance of an engagement which may give rise to a pecuniary
liability.

17. LIEN; Section 170 of the Indian contract act 1872 defines lien is a right
possessed by a person to detain or retain the goods or property belonging to
another until he has received the due remuneration for the services he has
rendered in respect of them. Bankers lien is general lien.
18. ASSIGNMENT; It is the process by which one can transfer
right/interest/title over the future accruable benefits to another.

his

19. DOCUMENT OF TITLE TO GOODS: it is a document evidencing proof of


possession or control of goods or authorizing or purporting to authorize either
by endorsement or delivery, the possessor of the document to transfer or
receive goods thereby represented.
20. MARGINAL FARMER: A farmer who owns dry land up to 2.50 acres or 1.25
acres of irrigated land is considered as marginal farmer. Agricultural labours
are those who earn more than 50 % of their wages from agricultural work.
21. SMALL FARMER: A farmer who own up to 5 acres of dry land or up to 2.50
acres of irrigated land is considered as small farmer.
22. TERTIARY SECTOR; Other priority sectors like small road and water transport
operator, professional and self employed, retail trade,. Small business,
education housing, consumption and the State Sponsored corporations for
sc/st.
23. WEAKER SECTION: the concept of weaker section was introduced by the
Krishnaswamy working group on priority sector lending. The weaker section
include small and marginal farmers, artisans, persons belonging to Sc/St ,
beneficiaries under DIR, SGSY, SHGs, etc.it is neglected sector which requires
immediate attention for the development of rural economy.
24. ALLIED AGRICULTURAL ACTIVITIES: Activities which are undertaken by
farmers to supplement their income like Dairy, Poultry etc
25. NAYAK COMMITTEE RECOMMENDATIONS FOR ASSESSMENT OF WORKING
CAPITAL: the committee has suggested a simplified system of assessment of

working capital advance computed on the basis of a minimum of 20% of the


projected turnover. 5% margin would be brought in by the borrower.
26. TINY INDUSTRIES(Micro-manufacturing): Industrial units having investment in
plant and machinery not exceeding Rs. 25 lacs. are known as tiny industries.
27. WORKING CAPITAL FINANCE : The finance given for the day to day working to
facilitate the production is called as working capital finance.
28. GROSS WORKING CAPITAL; Funds required to invest in the total current
assets is called as gross working capital.
29. NET WORKING CAPITAL ; Current assets-current liabilities.

30. WORKING CAPITAL GAP; Gross working capital other current liabilities
31. DSCR; it indicates the repayment capacity of the borrower based on the net
cash accruals.
32. BEP: Break even point refers to a level of operation in terms of units or sales
of a concern where there is no profit or no loss.
33. DEBT EQUITY RATIO; It ascertains the relative financial stake of investors vis-vis owners of business.

34. CURRENT RATIO; It measures the short term solvency or liquidity.

35. What are the provisions stipulated for different assets under IRAC norms.
Standard

0.25%(For direct agr & sme loans) (Provided by H.O)


1.00% (for H/Ls beyond Rs. 20 lacs)
2.00% (loans to commercial real estates)
0.40% (for all others loans)

Sub-standard

15 %(Where value of tangible security is more than 90%

of the outstanding)
25% (Where value of tangible security is less than
10%)
Doubtful Assets D1

25% on Secured portion of outstanding


100% on unsecured portion of outstanding

D2

40% on secured portion of outstanding


100% on unsecured portion of outstanding

D3
Loss Asset

100% on outstanding amount


100% on outstanding amount

36. What is RFIA ?


Risk Focus Internal Audit is the new system of internal audit which takes care
of three types of risks namely Credit, Market and Operational risk. Risk factors
are given due weightage in order to identify, manage and mitigate the risks at
appropriate moment. The revised system is implemented with effect from 0108-2006. The branches have been classified into three groups mainly based on
the exposure of credit level.

37 What do you mean by SMALL ENTERPRISES (Manufacturing) SECTOR:


1. Small (Manufacturing) Enterprises; Enterprises engaged in
manufacture, processing or preservation of goods and whose
investment in plant and machinery does not exceed Rs. five crores
(original cost excluding land and building).
2. Micro (Manufacturing) Enterprises: Enterprises engaged in
manufacture, processing and preservation of goods and whose
investment in plant and machinery does not exceed Rs. 25 lacs (Original
cost excluding land and building)

38. What do you mean by SMALL ENTERPRISES (Servicing) SECTOR:


1. Small (service) Service: Enterprises engaged in providing/rendering
of services and whose investment in equipment does not exceed Rs. two
crores.
2. Micro
(Service)
Enterprises:
Enterprises
engaged
in
providing/rendering of services and whose investment in equipment
does not exceed Rs. 10 lacs.

3. The small and micro service enterprises shall include small road &
water transport operators, small business, professional & self-employeed
persons, and all other serviced enterprises.
4. Khadi and Village industries sector(KVI) All advances granted to
units in the KVI sector, irrespective of their size of operations, location
and amount of original investment in plant and machinery, such
advances will be eligible for consideration under the sub-target (60%) of
small enterprises segment within the priority sector.
39. What is definition of Retail Trade?
Advances granted to retail traders dealing in essential commodities (fair
price shops) consumer co-operative stores and advances granted to
private retail traders with credit limits not exceeding Rs. 20 lacs
40. What is Micro credit?:
Loans not exceeding Rs. 50,000/ per borrower provided by banks either
directly or indirectly through a SHG/JLG mechanism or to NBFC/MFI for
on-lending up to Rs.50,000/ per borrower.

CASH DEPARTMENT
1. SOILED NOTES : Notes which have become dirty and limp due to excessive
use
2. MUTILATED NOTES: The notes which are torn, disfigured, burnt, washed,
eaten by white ants .

3. THE NOTES WHICH ARE NOT PAYABLE UNDER NOTE REFUND RULE:
Notes less than half the area of the full note.
Found to be forged
Deliberately cut, mutilated or tampered
Carrying extrinsic words or visible representation intended to
convey pr capable conveying any message of a political character
Cancelled by any office of the R.B.I. or against which the value has
already been paid
Devoid of the major portion of the number i.e. the prefix and three
digits or four digits of the number in notes up to and inclusive of Rs.
5 in respect notes of Rs. 10/ and above where this inadequacy is
present at both the numbering panels.

4. CURRENCY TRANSFER; The difference between the days withdrawals and


deposit in the chest represents the currency transfer.
5. UNCURRENT COINS: Defaced, light weighted, defective and withdrawn coins
are called as uncurrent coins.
6. PROTECTIVE MEASURES IN CASH DEPARTMENT:
During the opening and closing of strong room main door must be kept
locked.
Two watchmen should be on duty during the working hours.
Gun should be chained to the watchman.
Automatic latching system to be checked on all the cash counters.
Outsiders should not be allowed in cash department.
Check whether emergency bell, emergency light, auto dialer are
functioning.
Check whether fire extinguishers are refilled on due dates.
Pesticides treatment is given in the strong room to avoid damage of
notes by ants.
7. R.B.I. CLEAN NOTE POLICY

Banks should do away with stapling of any note packet and instead
secure note packets with paper bands.

They should sort notes in to re-issuables, and issue only clean notes to
public.
Soiled notes in unstapled condition may be rendered at the
R.B.I. inward remittances through currency chests:

They should forthwith stop writing of any kind on water mark window of
bank notes.
8. WHY GOLD LOANS ARE ENCOURAGED?.
The loans are fully secured. The interest yield is better than other advances.
The misc income in the form of service charges, safe custody charges is
good. The loans are for a short period.

9. What is specific gravity of gold? How do you test jewllery by specific gravity
method?
The specific gravity of gold is 19.3. The weight of the jewllery is done in
normal course and the again the weight is measured in water. The weight
measured in the air is divided by 19. The result arrived is deducted from the
weight taken in the air, it should tally with the weight measured in water. If it
is correct the gold is genuine.

CORE BANKING SOLUTIONS


1. What do you mean by core power?
Core power means anywhere banking within our bank. The transactions
pertaining to one branch can be effected at any branch of our bank. Up to a
limit of Rs. 20,000/ transaction are accepted at par. However above Rs.
20,000/ transactions are accepted by collecting remittance charges plus Rs.
20/ per transaction.

2. What is RTGS?
Real Time Gross Settlement is mode of transfer of funds between two banks
within the country. This is coordinated by RBI through INFINET network

3. What is strong and weak password?


Password having combination of alpha numerical and special character like$,
@ is called as strong password.
Password with only alpha numeric combination like names of pets, birthdays,
etc are called as weak password.

4. What is internet and intranet?

Intranet is the network through which branches are connected to CDC


Belapur it is
also called as SBINET. Connectivity is restricted to
our bank/branches only.

Internet is network of networks. It is accessible to anybody in the world by


paying certain cost. Internet and intranet is not allowed on one system as
Internet is prone to virus attack easily and there is chance of intranet being
affected due to virus.

5. What is CDC ?
Centralised Data Centre which is set up at Belapur monitors the total
functioning of Core Banking Solutions in our bank. It provides interconnectivity

to all the branches and consolidates the total transactions of the bank at
single point. Since it is centralized the position of the bank can be easily
ascertained at any given point of time. This is effective tool in the future for
the implementation of various technical initiatives which will streamline the
functioning of the bank.

6. What is IFSC Code?


Indian Financial System Code required for RTGS.

7. What is max. amount permitted in mobile banking per day and per month?
Rs. 50,000/ per day and Rs. 2,50,000/ per month

8. What are the four modules of corporate Internet banking ?


1. Khata 2. Khata + 3.Vyapaar 4. Vistaar
9. What do you mean by alternate delivery channels?
Executing the transactions without visiting the branch premises. The various
alternate delivery channels are Interent, ATM, Mobile and through POS.

10. Why banks encourage customers to avail alternate delivery channels?


1.
2.
3.
4.
5.

Convenience of the customers.


The slogan of 24/7 banking is implemented in correct spirit.
Transaction cost is drastically reduced which adds to profitability.
Marketing of products becomes attractive in competitive environment.
To achieve customer delight.

***WE WISH YOU ALL THE BEST***

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