RBS Credit Policy

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Table of Contents
Introduction................................................................................................................ 3
Departments of RBS................................................................................................ 4
Marketing Department of RBS:............................................................................. 4
Credit Risk Management department of RBS:......................................................5
Credit Administration Department RBS:...............................................................5
Secured loans.......................................................................................................... 8
Conventional Mortgages:..................................................................................... 8
CHARGES:................................................................................................................ 8
N cash facility (Business Finance):.......................................................................10
WHEELS................................................................................................................. 11
Charges:............................................................................................................. 11
Cash near Cash..................................................................................................... 12
Loan against Shares.............................................................................................. 12
Personal Loans...................................................................................................... 13
Credit Cards Facility............................................................................................... 14
CREDIT POLICY:
GENERAL DEFINITION:........................................................................................... 16
OBJECTIVES:.......................................................................................................... 16
SBPS REQUIREMENT:............................................................................................ 16
Credit Standards Followed By RBS:.......................................................................17
CENTRALIZED AUTHORITY:.................................................................................... 18
FUNDED AND NONFUNDED FACILITIES..................................................................18
SECTORAL BASED LENDING.................................................................................. 18
NICHE MARKETING................................................................................................ 19
UNAPPROVED SEGMENTS...................................................................................... 19
TIME REQUIRED FOR APPROVAL OF LOAN.............................................................19
PATTERN OF INSTALLMENTS.................................................................................. 19
CREDIT CARD........................................................................................................ 19
NPL Ratio............................................................................................................... 19
INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY
Page
REVISION OF CREDIT POLICY................................................................................. 19

INCOME REQUIREMENT......................................................................................... 20
TIME PERIOD FOR FINANACING............................................................................. 20
LC FACILITY............................................................................................................ 20
Collateral Based Lending:...................................................................................... 20
CDR (Credit deposit Ratio) position of RBS:...........................................................21
SAFTY MARGIN:..................................................................................................... 21
CREDIT POLICY FOR RENEWALS & ENHANCEMENT................................................21
SPREAD:................................................................................................................ 21
PAYMENT INCENTIVES:........................................................................................... 21
Documentation Required By RBS for Facilitating a LOAN:......................................22
Sole Proprietor:...................................................................................................... 22
Partnership:........................................................................................................... 22
Company:.............................................................................................................. 22
Security Based:..................................................................................................... 23
Property:............................................................................................................. 23
Other Legal Documents:.................................................................................... 23
SUGGESTIONS....................................................................................................... 24
CONCLUSION......................................................................................................... 25
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INTRODUCTION
The Royal Bank of Scotland Group has grown from small beginnings nearly
300 years ago to become the second largest financial services group by
profit, in the world. With an AA credit rating, RBS group has more than 40
million customers worldwide, operating profit in 2007 10.3 billion, and total
assets, as at 31 December 2007, of GBP 1,900.5 billion. Today the situation is
different. Due to worldwide recession bank had a massive loss. According to
unaudited quarter report i.e30th June 2009 bank had a net loss of RS.584,
090,0001, compare to net loss of RS.59, 703,0002 on 30th June 2008.now MCB
Bank has bought the Pakistan operations of the Royal Bank of Scotland
(RBS), paying a price of PRs7.2 billion ($87.4 million) for a 99.37% stake in
RBS Pakistan3. RBS brands operate around the globe and down the street to
provide banking services for individuals, businesses and institutions.
VALUE PROPOSITION
Royal Preferred Banking offers its clients an unmatched blend of
personalized banking and wealth maximization opportunities.
PRODUCTS
Alongside a comprehensive range of premium banking products and
services, RBS offers fully integrated financial planning and investment advisory
capabilities.
PRIVILEGES
From luxurious lounges to personalized attention, Royal Preferred
Banking delivers its clients exclusive services.
1 Unaudited half year income statement 2009Source: www.rbs.com.pk
2 Unaudited half year income statement 2009Source: www.rbs.com.pk
3 Source:financeasia.com
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Departments of RBS
RBS has a centralized banking system. Facilitating a loan is a continuous process
here which linked up THREE major departments namely;
MARKETING
CREDIT RISK MANGEMENT
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ALL the departments work together to make the system more efficient and to satisfy
the customers properly.
Marketing Department of RBS:
Following are the duties of this department:
It initiate the proposal

Direct the customer relationship with RBS
It collects all the required documents
It analyzes the financial statements of the bank
From initial analysis of the customer and his needs to the preparation of the
proposal, marketing department performed all duties to assist the Credit Risk
Management Department.
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Credit Risk Management department of RBS:

The information provided by the marketing department is analyzed by this
department to manage the probability of being default of the customer. It has to
manage in this way that profitability of RBS increased and defaulters have been
decreased. It checks out the purpose of this facility, track out the record, ancillary
business, margin or mark up.
The team of marketing department of RBs provide all documents and a track to
reach the customer after it the credit risk management department of RBS
performed the further duties to check the credit worthiness of the customer.
Credit Administration Department RBS:
It performed the following duties:
Perfection of the securities
Completion and last stamp on the authenticity of the documents
Acceptance and rejection of the proposal based on the decision of this
department
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OVERVIEW OF PRODUCTS
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The figures above give a brief overview of products and services provided by a
bank.
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OVERVIEW OF RBS LOAN

PRODUCTS
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Secured loans
Conventional Mortgages:
Following are the different mark-up rates for mortgages.
MARKUP:
Slabs
Benchmark
KIBOR
Sprea
Total
d
Up to 4,999,999
1 year KIBOR+4.25%
12.93%
4.25%
17.18
%
Between 5,000.000 & 9,999,999
1 year KIBOR+3.75%
12.93%
3.75%
16.68
%
Between 10,000,000 & 19,999,999
1 year KIBOR+3.5%
12.93%
3.50%
16.43
%
More than 20,000,000
1 year KIBOR+3.25%
12.93%
3.25%
16.18
%
CHARGES:
Documentation, Stamp
Duty & Government Levies
Actual
Legal Charges
3500
Late payment charges
Rs. 1,000/- or 10% of installment

which
ever is higher
Pre-payment penalty, Full payof

& Partial pre payment
10% for all BTF cases.
Processing Fee
Rs. 5,000/-
Enhancement Fee
Rs. 5,000/-
10
Rs. 400/- per visit

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Installment Collection Charges
N Cash Facility (RUNNING FINANCE):
This facility is provided for
Loan Enhancement Facility

Choice between Running Finance or Installment
Based financing
Empower the customers with financing to fulfill their business needs.

With Running Finance customer can fulfill his working capital/cash flow
needs.
Markup of N cash facility (Running Finance)
Slabs
Benchmark
KIBOR
Sprea
Total
d
Up to 4,999,999
3 Month
12.60%
4.00%
KIBOR+4.00%
Between 5,000.000 & 14,999,999
3 Month
%
12.60%
3.75%
KIBOR+3.75%
3 Month
16.60
16.35
%
12.60%
3.50%
KIBOR+3.50%
16.10
%
Fresh case processing

fee
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11
Charges
up to Rs. 5,000/- upfront
BTF case processing fee
Enhancement case
processing fee
Rs. 100/- per day
Installment collection charges
Rs. 400 per visit
N cash facility (Business Finance): with the Business Loan customer

can invest in project financing, capital investment, business expansion or
balance transfer from a running finance facility to a term loan.
Mark up of N cash facility (Business Finance)

Slabs
Benchmark
KIBOR
Sprea
Total
d
Up to 4,999,999
1 year KIBOR+4.00%
12.93%
4.00%
16.93
%
12
1 year KIBOR+3.75%
12.93%
3.75%
Page
Between 5,000.000 & 14,999,999
1 year KIBOR+3.50%
16.68
%
12.93%
3.50%
16.43
%
Charges:
Fresh case processing

fee
Up to Rs. 5,000/- upfront
BTF case processing fee
Enhancement case
processing fee
Rs. 1,000/- or 10% of installment

which ever or higher
Rs. 400 per visit
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WHEELS
RBS cherishes the relationship with its customers; they will be accommodated with
assistance from Relationship Managers who will facilitate them through the
procedure until they find exactly what they want.
Markup of Wheels
Slabs
Benchmark
KIBOR
Sprea
Total
d
Less than 600 K
1 year KIBOR+4.50%
12.93%
4.50%
17.43
%
More than 600 K
1 year KIBOR+4.00%
12.93%
4.00%
16.93
%
Existing AAB Customers
0.5% discount on above
Charges:
Processing Fee
Up to Rs. 5,000/-
Re-issuance of purchase order
Up to Rs. 1,000/-
Rs. 600/- per month
Rs. 400/- per visit
Full prepayment of Cars with

registration:
During first 6 months
10% (on outstanding amount)
During 7th month to 12 months
During 2nd year
During 3rd year
4th year onward
Partial Prepayment :
During 2nd year
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5% (on amount being prepaid)
Page
Upto 1st year
During 3rd year
After 3rd year
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Cash near Cash
Help the customers to meet their sudden cash flow needs.
Acquire funds against your existing deposits or near cash instruments without liquidating
them.
Earn income from your pledged deposit or near cash instrument without it being
disturbed.
Markup for Cash near Cash
Slabs
Branch/Preferred Customers
RBS Staf
Minimum Bench mark

3 month KIBOR*+0.75%
3 month KIBOR*+0.25%
Charges
Balance Confirmation Certificates
Rs. 300/- per certificate
Balance Confirmation Certificates

to auditors
Rs. 1,500/- per certificate
Mark up Settlement
Up to Rs. 7,000/- if mark up is not paid

within specified period
Loan against Shares

Loan against Shares (LAS) facility enables customers to take a loan against the
shares invested in companies listed on the KSE-100 index and release the initial
investment at its current market value. Their slogan is
Get more than just dividends - get the competitive edge with
Loan against Shares .
Charges:
Financing against shares
1) Pledged Share Scrips
Rs. 1,000/- per charge requested
16
Rs. 5,000/- Plus applicable brokerage

charges
Page
2) Forced Facility Liquidation Fees
17
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BTF (Balance Transfer Facility)
BTF is the most convenient, flexible, economical and easy-to-use loan facility designed to suit
customer needs and gives them the power to control their finances. It offers a variety of features
that provide the spending convenience a customer actually craves for.
Markup of BTF
Slabs
Benchmark
Salaried & SEP
26.0%
Self Employed Business Segment
29.9%
Schedule of Charges
Mark up Rate may vary for

diferent customer segments
Mark up Rate Up to 35% per annum
Late Payment Fee
Rs. 500/- or 10% of the minimum

amount whichever is higher
Enhancement Fee
Up to Rs. 1,500/-
Cash Withdrawal over the counter

from BTF accounts
Up to Rs. 150/-
Cancellation of BTF Pay Orders

over the counter
Up to Rs. 200/- per pay order
Personal Loans
Whether a customer want s to reorganise their finances, pay for a major purchase
such as a car or home improvements or simply give themselves more financial
flexibility, RBS offer a range of affordable loan options.
Markup of Personal Loans
Slabs
Benchmark
Salaried A&B
22.0%
Self Employed Persons
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Salaried C
25.0%
22.0%
Self Employed Business Persons
29.99%
Unapproved Segment
28.0%
Schedule of Charges:
Mark up Rate may vary for diferent

customer segments/loan tenure
Mark up Rate 35% per annum
Processing fee*
Up to Rs. 2,000/- or 1% of the loan

Late Payment Fee
Rs. 500/- or 10% of the installment

Credit Cards Facility
Platinum Credit Card: It provides luxurious facilities to the customers and

they can enjoy a selection of the finest privileges complementing their
superior preferences and lifestyle.
Air blue Credit Card: We can take credit to spend on Fuel Groceries,
Restaurants, utilities, entertainment, and anywhere else. Its a master card of
RBS.
Gold Credit Card: Our Gold Credit Card charges a fixed rate on transferred
balances, until they are repaid. It could help to shrink your balance. This offer
is available exclusively to existing RBS current account customers and only
available online.
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Markup of Credit Cards
Slabs
Benchmark
Airblue Credit card
39.0%
Gold Credit Card
39.0%
Platinum Credit Card
18.0%
Schedule of Charges:
Annual Fees
Primary Cards
Blue / Standard - up to Rs. 2,000/Gold - up to Rs. 4,000/Platinum - up to Rs. 15,000/-
Supplementary Cards
Blue / Standard /Gold - up to 1,000/Platinum - up to Rs. 2,000/-
Joining Fees*
Primary Cards
Blue / Standard - NIL

Gold - NIL
Platinum - NIL
Supplementary Cards
Up to Rs. 500/- (First 2 supplementary cards

free)
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Tenure in months
6
12
18
24
30
36
42
48
54
60
Service fee (%)

30.23%
31.72%
31.76%
31.46%
31.04%
30.59%
30.14%
29.70%
29.28%
28.88%
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CREDIT POLICY
GENERAL DEFINITION:
Credit Policy is the clear, written guidelines that set the following basic things:
(1) The terms and conditions for supplying goods on credit
(2) Customer qualification criteria
(3) Procedure for making collections
(4) Steps to be taken in case of customer delinquency.
It is also called collection policy4.
OBJECTIVES:
SBP regulations and economic conditions are kept in mind while designing
the techniques and objectives for credit management strategy. Following
are some of the objectives of SPCBs credit policy:
o Enable the bank to develop long-term business plans.
o Equip the bank to face the ever changing competitive scenario more effectively
and act proactively rather than reactively.
o To be a source of confidence to the lending officers and enable them to operate
more effectively within the framework of approved delegated authority.
o Provide a framework of reference and standards and to enable the bank to
provide uniform treatment to the borrowing customers.
o Provide guidance for what to do, not how to do.
o
Properly serve the credit needs of current customers by satisfying them and
establish long-term relationship with them.
Provide a framework in which to conduct business.

SBPS REQUIREMENT: It is SBPs requirement
that every bank should keep 2% of its total capital as
reserves with the State Bank. SBP approves every
loan and provides comprehensive directions to every
bank in the prudential regulations. These instructions
are same for every bank but banks could make certain
Net Assets of RBS as on

June 30, 2009 are Rs.
4 Source:businessdictionary.com
Page
22
changes in the level of deposits, advancement ratio and their loan portfolio.
Total amount of loan advancement is totally dependent on SPCBs credibility
situation.
CREDIT POLICY OF RBS

Credit Standards Followed By RBS:
The RBS credit standards are as follows:
DIVERSIFICATION:
RBS being a clever financial institution doesnt invest
in just one sector. It follows the basic rule i.e.
DONT PULL ALL YOUR EGGS IN ONE

BASKET!!!
Agriculture
financing is just 12% because SBP
makes it essential
for the bank.
Their focus is on the following sectors:

SECTORS
Small Medium Enterprise (SME)
Commercial Sector
Global banking and Markets
LIMIT OF LOANS
50 million
50-350million
Above 350 million
SAFETY:
RBS focuses on 3cs:
RBS follow the SAFETY-FIRST principle i.e.
CHARACTER,
Money given as loan must be used properly.
The credit risk management department
handles this principle.
The following five elements(Cs) help a banker in arriving at the
conclusion regarding safety.
Character: Borrowers intention to repay the advance, since his
honesty and integrity is of significance.
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23
Capacity: Mixture of academics and experience in the relative

field and ability to repay. And How well do we
understand and know the relevant customer.
Liquidity
Capital: it means how much you are willing to
condition
invest your money.SBP restricts the misuse of banks
means
money.
tendency of
Conditions: Bank should analyze the economic,
business and socioeconomic conditions to secure the loan.
Cash-flows: Cash flow statement of the customer should be
analyzed to secure the loan. We analyze the inflow and outflow of
cash.
LIQUIDITY: bank should analyze the liquidity condition of its and its
customer.
PROFITIBILITY: Profits are as important to RBS as are to the other
organizations as they also have different types of expenses. The main
source of income for RBS is the amount it charges from its customers
as mark up. Therefore, the RBS may prefer a customer with low risk
and reasonable markup to ensure an optimal profit.
DESIRABILITY: RBS focuses that money should be used for agreed

purposes.
CREDIT RISK AND RETURN: The Credit risk management focuses

risks associated with the loans and their repayments.RBS focuses on
short term loans to avoid defaults.
CENTRALIZED AUTHORITY:
The decision making power regarding credit policy and any loan approvals is
centralized in RBS. They are moving toward the hub concept. This has a negative
impact on potential or prospective customers because any person wanting to
acquire a small loan in a few days time has to wait a lot and as a result a number of
applicants cannot be satisfied. RBS credit policy hinders such activity because
having no power and setup to verify credentials etc, the process at the head office
takes minimum 15days. But this step is also going to show the confidential output
by bank.
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FUNDED AND NONFUNDED FACILITIES
SECTORAL BASED LENDING
Page
Both funded and non-funded facilities are provided by RBS but the preference is to
provide non funded facilities as it involves lower risk.
RBS extends loan to almost all the sectors except for certain unapproved segments.
However, RBS focuses on consumer, commercial, corporate, agriculture,
construction, engineering, automobiles and fertilizers sector. No loans are available
for textile sector this time because of the bad conditions of this sector. RBS is
moved the directions of its credit policy toward the recovery of its loans.
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NICHE MARKETING
Page
Their marketing objectives and techniques are based on niche marketing. They
target on salaried class which they have named as Category A. This is because
salaried class is more conscious about making the payments on time and it is easier
to recover loan from them as compared to any other class. In current economic
conditions of Pakistan and worldwide recession, its the basic pillar of RBS which is
not only secured but also profitable but because of rapidly unemployment, RBS not
advancing loans to this sector but again we will say that they are not destroying
their customers of this sector even at the time of recovery. They are providing their
non funded facility mostly to salaried based sector after all they are golden pillars of
RBS.
UNAPPROVED SEGMENTS
Unapproved segments are the segments to which bank does not extend loan due to
some reasons. These include lawyers, journalists, farmers, money changers,
politicians.
TIME REQUIRED FOR APPROVAL OF LOAN

As RBS is a multinational bank it takes a long time of 15 days for any loan to get
approved from the head office because it does not give decision power to each
branch. It has centralized system. The preparation of documents also required a
lot of time because of manual working system. Due to this reason RBS is also losing
a great number of its customers.
PATTERN OF INSTALLMENTS
RBS prefers quarterly payments as part of their selling terms set with the customers
in advancement of the loan. However, such terms may vary from customer to
customer and situation to situation.
CREDIT CARD
Client can withdraw cash up to 75% of the available shared credit limit (if he is
holding more than one RBS Credit Card). For example, if your shared credit limit is
PKR 300,000 and your cash withdrawal limit is 75%, you can withdraw up to PKR
225,000.
NPL Ratio
RBS NPL ratio is comparatively good if we consider the financial crisis and current
position of the bank. Reason behind this is that they dont accrue their revenues
.Instead they are recorded when actually incurred. Thats why their books show the
good position.
26
REVISION OF CREDIT POLICY
Page
The credit policy is revised at least quarterly to incorporate the economic and
financial changes in the country. Similarly, any change in the prudential regulations
by the State Bank of Pakistan and socio-economical factors can prompt the bank to
revise its policy in the given scenario accordingly.
Their policy also changed according to risks and opportunities in the market like
payment incentives 54(flat rate, computed rate) and low risk credit policies
(advance payment & LC). So according to this policy, now a day RBS is working with
flat rate
INCOME REQUIREMENT
Minimum Income of Salaried, SEB, SEP, NTI & Branch Banking Segment are:
Segments
A,B,C,
Unapproved
Contractual
SEP
SEB/ NTI *
Branch Banking
Net Income (PKR)

& 40,000
50,000
50,000
50,000
Where;
SEB
stands
for
Self-Employed
Businessman
SEP
stands
for
Self-Employed
Professional.
NTI stands for New to the industry.
The customer having between 1-6

months credit history reflecting in e-CIB
will be considered as NTI's.
A includes bankers and clients with a good pay back history. They are given
credit up to 4times of their salary.
B includes all the employees related to the textile sector. They are given
credit up to 3times of their salary.
C includes the government employees. They are given credit up to 2times of
their salary.
Unapproved are given credit up to2 times of their salary.
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TIME PERIOD FOR FINANACING

Running finance: its short term loan
Demand finance: 1 to 5 years maximum time period for this loan because it
fulfilled the specific need of the customer like construction.
Term finance: 5 to 10 years maximum time period but in this loan the installment
is involved.
LC FACILITY
RBS focused on hypothecate based facility.
Collateral Based Lending:

Bank focuses on financing backed up by a security. Because there is no proper
documentation system and Corruption rate is high!!
CDR (Credit deposit Ratio) position of RBS:

RBS has to reserve 30% in form of reserves in SBP (State Bank of Pakistan). This
30% can be reserved in different forms as cash, T Bonds, T Bills and anything which
can be easily convertible into cash.
RBS cash reserve ratio is 5 to 7 percent
SAFTY MARGIN:
For funded based facilities: 10 to 25 percent is the average safety margin

rate. It varies customer to customer. Its also varies by securities and liquidity
position of the customers.0% safety margin can also be for those customers
who are most reliable customers.
For nonfunded based facilities: on average the 15% to 35% safety
margin is taken.
If government has to stop the imports of anything to support the local production,
SBP ordered to increase this safety margin. For critical items like perishable items
this safety margin can be 100%.
CREDIT POLICY FOR RENEWALS & ENHANCEMENT

Following are the requirements for renewals:
28
Actual last year business progress

Clean up condition for one year
Basic Borrowers fact sheet report
Credit Information Report
Auditing Report of their business
Bank Reference
Personal Reference
Customer has also to provide the action plan that the money which has been
enhanced where to use. The reason for which request of renewal is given.
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SPREAD:
RBS is stated to be charging around 2%-4% spread to its customers with
negotiations or bargains with customers even though they might not always be
providing ancillary business to RBS. This depends on the customers track record
and his credibility.
RBS invests extensively in mortgages and as fewer mortgage investments are
present, RBS has the opportunity to charge high mark ups. The high charges cover
the costs incurred on those who have defaulted.
PAYMENT INCENTIVES:
RBS deals with flat rate because flat rate does not consider TIME VALUE
CONSTRAINT. Being customer friendly it helps the customer to forecast his budget
.this is rate is not affected by economic conditions.
Documentation Required By RBS for Facilitating a

LOAN:
Sole Proprietor:
Call report
Id card.
Address and other business related information.
BBFS (Borrower Basic Fact Sheet).
E-CIB report.(Electronic Credit Information Bureau Report)
Credit Worthiness Report
Bankers Report
Call report
Id card.
Address and other business related information.
E-CIB report.(Electronic Credit Information Bureau Report)
Partnership deed.
Bankers Report
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29
Partnership:
Company:
Call report
Basic Information Report
Companys e-CIB report.
Id cards of Directors.
Financial Statements.
Directors search and Assets Charges search report.
Bankers report
Security Based:
Based on different securities, bank requires the following documents:
Cash deposit: Letter of Lien on cash deposit with the signature of borrower.
Govt. securities: Letter of Lien on Govt. securities e.g.; T-Bills etc.
Shares: Letter of Lien obtained by bank with the help of ID assigned by SECP.
Property:
Title document:
o Sale deed
o Lease deed
o Transfer letter
Memorandum of deposit of title deed.
Personal guarantee by third party.
Letter of Lien on property.
Approved map of the location where the property is located.
General Power of Attorney (GPA).
30
PT-1 form is required for old cities, which had been settled by Settlement
Commission during partition.
Mortgage Deed (except DHA).
Faard and Letter of Lien are required from registrar in case of agriculture
land.
Page
Other Legal Documents:

Pro-note: It is a promissory note in which the customer promises to pay
principal and markup.
Markup agreement: It contains all the terms and conditions related to markup
e.g.; calculation of markup at flat or computed rate etc.
Letter of Continuity (LOC).
31
Page
SUGGESTIONS
A strong forum of all the stakeholders should be made, where the state
representatives, industrialists, bankers and the concerned people can
gather together and give valuable suggestions for the betterment of the
whole financial system e.g.; Federal Reserve of U.S.A.
SECP should be more helpful to the banks; it should work more efficiently in
providing the details of Ranking charges and Pari-Pasu charges.
Keeping the current economic scenario of the country, RBS must also focus
on agriculture sector because Pakistan is an agricultural country and
providing loans to this sector will lead towards prosperity.
RBS should give a customer friendly credit facilities at most in each of its
branches so that the customer feels more convenient.
RBS should held meetings and seminars for their customers to give them
suggestions and advices to improve their credit worthiness. Moreover to
guide the customers about their loan products and procedures.
32
Page
CONCLUSION
Due to worldwide recession RBS has faced huge losses in current times; RBS
in Pakistan is not advancing long-term loans to corporate sector or other
sectors as well due to the bad social and economic conditions in the country.
When RBS re-branded the name of ABN-AMRO formally last year, total
branches of RBS in Pakistan were 85 but now the number has reduced to 73.
Similarly the net value of assets of RBS in Pakistan has also been reduced to
23 billion PKR from 73 billion PKR. Moreover, more than 90% share of RBS
Pakistan has been purchased by MCB and this take over will be completed in
the upcoming year. In the current business environment with reduced sales
and threats of recession RBS is under great pressure to manage their cash
flows productively; in this regard RBS has kept somehow a lenient credit
policy (in consumer financing i.e. short-term) as compared to other banks so
that it may be able to retain its customers in future for upcoming year.

RBS Credit Policy

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RBS Credit Policy

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INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

REVISION OF CREDIT POLICY................................................................................. 19

INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

2 Unaudited half year income statement 2009Source: www.rbs.com.pk

INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

It initiate the proposal

INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

Credit Risk Management department of RBS:

INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

OVERVIEW OF RBS LOAN

INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

Between 5,000.000 & 9,999,999

Between 10,000,000 & 19,999,999

More than 20,000,000

Late payment charges

Rs. 1,000/- or 10% of installment

Pre-payment penalty, Full payof

10% for all BTF cases.

INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

Rs. 400/- per visit

Installment Collection Charges

N Cash Facility (RUNNING FINANCE):

This facility is provided for

Loan Enhancement Facility

Empower the customers with financing to fulfill their business needs.

INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

Fresh case processing

up to Rs. 5,000/- upfront

BTF case processing fee

up to Rs. 5,000/- upfront

up to Rs. 5,000/- upfront

Late payment charges

Rs. 100/- per day

Installment collection charges

Rs. 400 per visit

N cash facility (Business Finance): with the Business Loan customer

Mark up of N cash facility (Business Finance)

INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

Between 5,000.000 & 14,999,999

More than 15,000,000

Fresh case processing

Up to Rs. 5,000/- upfront

BTF case processing fee

Up to Rs. 5,000/- upfront

Up to Rs. 5,000/- upfront

Late payment charges

Rs. 1,000/- or 10% of installment

Installment collection charges

Rs. 400 per visit

INSTITUTE OF BUSINESS ADMINISTRATION, PUNJAB UNIVERSITY

More than 600 K

Existing AAB Customers

0.5% discount on above

Re-issuance of purchase order

Late payment charges

Rs. 600/- per month

Installment collection charges

Rs. 400/- per visit

Full prepayment of Cars with

10% (on outstanding amount)