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A bank is a financial intermediary that accepts deposits and channels those deposits into lending activities, either directly or through capital markets. A bank connects customers with capital deficits to customers with capital surpluses. Banking is generally a highly regulated industry, and government restrictions on financial activities by banks have varied over time and location. The current set of global bank capital standards is called Basel II. In some countries such as Germany, banks have historically owned major stakes in industrial corporations while in other countries such as the United States banks are prohibited from owning non-financial companies. In Japan, banks are usually the nexus of a crossshare holding entity known as the keiretsu. The oldest bank still in existence is Monte dei Paschi di Siena, headquartered in Siena, Italy, which has been operating continuously since 1472. Definition
Cathay Bank in Boston's Chinatown The definition of a bank varies from country to country. See the relevant country page (below) for more information. Under English common law, a banker is defined as a person who carries on the business of banking, which is specified as:
conducting current accounts for his customers
paying cheques drawn on him, and Collecting cheques for his customers.
In most English common law jurisdictions there is a Bills of Exchange Act that codifies the law in relation to negotiable instruments, including cheques, and this Act contains a statutory definition of the term banker: banker includes a body of persons, whether incorporated or not, who carry on the business of banking' (Section 2, Interpretation). Although this definition seems circular, it is actually functional, because it ensures that the legal basis for bank transactions such as cheques does not depend on how the bank is organized or regulated. The business of banking is in many English common law countries not defined by statute but by common law, the definition above. In other English common law jurisdictions there are statutory definitions of the business of banking or banking business. When looking at these definitions it is important to keep in minds that they are defining the business of banking for the purposes of the legislation, and not necessarily in general. In particular, most of the definitions are from legislation that has the purposes of entry regulating and supervising banks rather than regulating the actual business of banking. However, in many cases the statutory definition closely mirrors the common law one. Examples of statutory definitions:
"banking business" means the business of receiving money on current or deposit account, paying and collecting cheques drawn by or paid in by customers, the making of advances to customers, and includes such other business as the Authority may prescribe for the purposes of this Act; (Banking Act (Singapore), Section 2, Interpretation). "banking business" means the business of either or both of the following:
1. receiving from the general public money on current, deposit, savings or other similar account repayable on demand or within less than [3 months] ... or with a period of call or notice of less than that period; 2. paying or collecting cheques drawn by or paid in by customers] Since the advent of EFTPOS (Electronic Funds Transfer at Point Of Sale), direct credit, direct debit and internet banking, the cheque has lost its primacy in most banking systems as a payment instrument. This has led legal theorists to suggest that the cheque based definition should be broadened to include financial institutions that conduct current accounts for customers and enable customers to pay and be paid by third parties, even if they do not pay and collect cheque
HISTORY OF BANK? Without a sound and effective banking system in India it cannot have a healthy economy. The banking system of India should not only be hassle free but it should be able to meet new challenges posed by the technology and any other external and internal factors. For the past three decades India's banking system has several outstanding achievements to its credit. The most striking is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian banking system has reached even to the remote corners of the country. This is one of the main reason of India's growth process. The government's regular policy for Indian bank since 1969 has paid rich dividends with the nationalisation of 14 major private banks of India. Not long ago, an account holder had to wait for hours at the bank counters for getting a draft or for withdrawing his own money. Today, he has a choice. Gone are days when the most efficient bank transferred money from one branch to other in two days. Now it is simple as instant messaging or dial a pizza. Money have become the order of the day. The first bank in India, though conservative, was established in 1786. From 1786 till today, the journey of Indian Banking System can be segregated into three distinct phases. They are as mentioned below:
y y y
Early phase from 1786 to 1969 of Indian Banks Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector Reforms. New phase of Indian Banking System with the advent of Indian Financial & Banking Sector Reforms after 1991.
To make this write-up more explanatory, I prefix the scenario as Phase I, Phase II and Phase III. Phase I
The East India Company established Bank of Bengal (1809). Bank of India. it nationalised Imperial Bank of India with extensive banking facilities on a large scale specially in rural and semi-urban areas. In 1865 Allahabad Bank was established and first time exclusively by Indians. mostly Europeans shareholders. During those days public has lesser confidence in the banks. 23 of 1965). Central Bank of India. major process of nationalisation was carried out. To streamline the functioning and activities of commercial banks. Next came Bank of Hindustan and Bengal Bank. These three banks were amalgamated in 1920 and Imperial Bank of India was established which started as private shareholders banks. Punjab National Bank Ltd. Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July. and Bank of Mysore were set up. 1969. mostly small. As an aftermath deposit mobilisation was slow. During the first phase the growth was very slow and banks also experienced periodic failures between 1913 and 1948. Bank of Bombay (1840) and Bank of Madras (1843) as independent units and called it Presidency Banks. Between 1906 and 1913. Indira Gandhi. Reserve Bank of India was vested with extensive powers for the supervision of banking in india as the Central Banking Authority. Abreast of it the savings bank facility provided by the Postal department was comparatively safer. Phase II Government took major steps in this Indian Banking Sector Reform after independence. Bank of Baroda. 14 major commercial banks in the country was nationalised. was set up in 1894 with headquarters at Lahore. 1949 which was later changed to Banking Regulation Act 1949 as per amending Act of 1965 (Act No. . Moreover. It formed State Bank of india to act as the principal agent of RBI and to handle banking transactions of the Union and State Governments all over the country. Mrs. It was the effort of the then Prime Minister of India. funds were largely given to traders. There were approximately 1100 banks. Canara Bank. the Government of India came up with The Banking Companies Act. Reserve Bank of India came in 1935. In 1955.The General Bank of India was set up in the year 1786. Indian Bank.
Phone banking and net banking is introduced. 1959 : Nationalisation of SBI subsidiaries. After the nationalisation of banks. Time is given more importance than money. under the chairmanship of M Narasimham. This is all due to a flexible exchange rate regime. 1980 : Nationalisation of seven banks with deposits over 200 crore. The following are the steps taken by the Government of India to Regulate Banking Institutions in the Country: y y y y y y y y 1949 : Enactment of Banking Regulation Act. It is sheltered from any crisis triggered by any external macroeconomics shock as other East Asian Countries suffered. the branches of the public sector bank India rose to approximately 800% in deposits and advances took a huge jump by 11. Phase III This phase has introduced many more products and facilities in the banking sector in its reforms measure. the foreign reserves are high. The financial system of India has shown a great deal of resilience. 1955 : Nationalisation of State Bank of India. 1961 : Insurance cover extended to deposits.000%. and banks and their customers have limited foreign exchange exposure. This step brought 80% of the banking segment in India under Government ownership. 1969 : Nationalisation of 14 major banks. Efforts are being put to give a satisfactory service to customers. 1971 : Creation of credit guarantee corporation. The entire system became more convenient and swift. 1975 : Creation of regional rural banks. The country is flooded with foreign banks and their ATM stations. a committee was set up by his name which worked for the liberalisation of banking practices. . Banking in the sunshine of Government ownership gave the public implicit faith and immense confidence about the sustainability of these institutions.Second phase of nationalisation Indian Banking Sector Reform was carried out in 1980 with seven more banks. In 1991. the capital account is not yet fully convertible.
In Egypt and Mesopotamia gold is deposited in temples for safe-keeping. there are records of loans made by the priests of the temple. it is easily stolen. The concept of banking has arrived. constantly attended. In Babylon at the time of Hammurabi. in the 18th century BC.HISTORY OF BANKING Safe in the temple: 18th century BC Wealth compressed into the convenient form of gold brings one disadvantage. with a sacred character which itself may deter thieves. while others in the trading community or in government have desperate need of it. it is a solid building. But it lies idle there. Greek and Roman financiers: from the 4th century BC . Unless well hidden or protected. In early civilizations a temple is considered the safest refuge.
and their demise is hastened by the hostility of the Christian church to the charging of interest. By the 2nd century AD a debt can officially be discharged by paying the appropriate sum into a bank. and public notaries are appointed to register such transactions. with its genius for administration. make loans. They even engage in book transactions. . Moneylenders can be found who will accept payment in one Greek city and arrange for credit in another. The collapse of trade after the fall of the Roman empire makes bankers less necessary than before. as well as temples and public bodies. taking a fee that they may engender together'. change money from one currency to another and test coins for weight and purity. Usury comes to seem morally offensive. now undertake financial transactions.Banking activities in Greece are more varied and sophisticated than in any previous society. They take deposits. avoiding the need for the customer to transport or transfer large numbers of coins. adopts and regularizes the banking practices of Greece. Rome. Private entrepreneurs. One anonymous medieval author declares vividly that 'a usurer is a bawd to his own money bags.
13th century AD The Christian prohibition on usury eventually provides an opportunity for bankers of another religion. The profitable business of banking transfers into the hands of more ordinary Christian folk . The business skills of the Italians are enhanced by their invention of doubleentry book-keeping. European prosperity needs finance. who for a few years become bankers to the mighty. collectively known as Lombards. an exclusive sect with private rituals. But their success. The same is true of another group. brings dangers. Creative accountancy enables them to avoid the Christian sin of usury. supply this need.first among them the Lombards. easily fall prey to rumour. the knights Templar. suspicion and persecution (see Templars in Europe).Middle Ages Religion and banking: 12th . They too. barred from most other forms of employment.14th century AD During the 13th century bankers from north Italy. The Jews. gradually replace the Jews in their traditional role as money-lenders to the rich and powerful. interest on a loan is presented in the accounts either as a voluntary gift from the borrower or as a reward for . and their extreme visibility as a religious sect. Bankers to Europe's kings: 13th .
Seville and Majorca. in London. in particular the papacy. In the early 14th century the family has offices in Barcelona. It is the hard currency of its day. But Florence takes the lion's share. The ability of the Florentine bankers to fulfil this service is shown by the number of Bardi branches outside Italy. have grown immensely wealthy by offering financial services. in the short term. by means of which money paid in by a debtor in one town can be paid out to a creditor presenting the bill somewhere else (a principle familiar now in the form of a cheque). the florin is widely recognized and trusted.the risk taken. many of Europe's rulers are heavily in debt to the city's bankers. They facilitate trade by providing merchants with bills of exchange. Avignon. Florence is well equippped for international finance thanks to its famous gold coin. Therein. the florin. Siena and Lucca. Bruges. By the early 14th century two families in the city. First minted in 1252. in Paris. Constantinople. Rhodes. Nice and Marseilles. They arrange for the collection and transfer of money due to great feudal powers. the Bardi and the Peruzzi. . Milan and Genoa all profit from the new trade. Cyprus and Jerusalem. lies the bankers' downfall. To add to Florence's sense of power.
In 1345 he defaults on his payments.16th century AD At the start of the 15th century the Medici are Europe's greatest banking dynasty. Half a century later great fortunes are again being made by the financiers of the city. The Medici later triumph as dukes of Florence. Prominent among them in the 15th century are two families. Florence as a great banking centre survives even this disaster. that of the Fuggers. . but their political power later distracts them from the highly focussed business of making money.In the 1340s Edward III of England is engaged in the expensive business of war with France. After the reign of Lorenzo the Magnificent the bank's finances are in a perilous state. But their role as leading bankers is usurped by a German dynasty. Like the Medici. reducing both Florentine houses to bankruptcy. He is heavily in debt to Florence.000 from the Bardi. the Pazzi and the Medici. at the start of the Hundred Years' War. the Fuggers amass vast wealth by massaging the finances of the papacy and of great princes.000 gold florins from the Peruzzi and another 900. The Fugger dynasty: 15th . having borrowed 600.
In 1491 a loan is made to Maximilian.000 florins). Interest rates at the time are never less than 12% per annum. taking as security an interest in silver and copper mines in the Tirol . Charles.000 florins. Out of a massive total of 852. The campaign succeeds. to be spent on bribing the seven electors.The shift of European power to the Habsburgs in the late 15th century is the basis of the Fugger wealth. And when a loan has to be raised urgently. Francis I. . The family descends from an Augsburg weaver and their first fortune is in textiles. the Fuggers provide nearly two thirds (544. but the post involves election and there is a rival candidate . Charles turns to the Fugger family for his election expenses.the beginning of an extensive family involvement in mining and precious metals. a subsequent loan to him in 1505 (by which time Maximilian is the Holy Roman emperor) is secured by the feudal rights to two Austrian counties. Charles is determined to succeed his grandfather as German king and Holy Roman emperor. Banking for emperors is profitable. The candidate is elected as Charles V. They make their first loan to a Habsburg archduke in 1487.the French king. the 16th-century banker is often able to negotiate a rate of as high as 45%. But by far the largest Fugger project is undertaken in 1519 on behalf of Maximilian's grandson.
By the end of the 16th century the family withdraws from financial risk-taking. as can still be seen in the Fuggerei . in a sense.Continuous warfare and other expenses of state are a constant drain on Charles's treasury. The bankers therefore become. The Fuggers use their wealth responsibly. . after some disastrous ventures. and they are often repaid by leases on sources of royal income. But by the early 17th century banking begins also to exist in its modern sense .as a commercial service for customers rather than kings. most notably the Rothschilds.a community for the poor. But their high rates of interest can quickly cripple a kingdom engaged in too many unprofitable wars. Thus the Fuggers are granted in 1525 the revenues from the Spanish orders of knighthood. and settles into the more conventional aristocratic existence which their wealth has bought. his costs outrun his sources of revenue. There will be other such exceptional dynasties. Loans from bankers fill the gap. both revenue collectors and managers of state assets. Like any ruler of the time. built in Augsburg in 1519 (the year of the imperial election) and still in use today. together with the profits from mercury and silver mines.
a device which depends on the existence of banks as recognized institutions. Hamburg in 1619. This was an accepted part of trade in ancient Greece. is an attempt to provide a measure of security in this central aspect of the risky business of trade. the original method of transferring money without the use of coins. A related development is that of the cheque. . but it has previously been carried out by individual moneylenders . and enabling financial transactions in Venice and elsewhere to be made without the physical transfer of coins.involving a high risk of bankruptcy. A cheque is a bill of exchange between banks. The Venetian initiative. Its purpose it to carry out the important function of holding merchants' funds on safe deposit. payable by one of the banks to whoever holds and presents the cheque. is a complex contract between private parties and one or more moneylenders. Other Mediterranean trading centres (in particular Barcelona and Genoa) have possibly taken this step before Venice. with the expenses born by the state. and it is soon followed in northern cities Amsterdam in 1609.Banks and cheques: from the 16th century AD In 1587 the Banco della Piazza di Rialto is opened in Venice as a state initiative. Nuremberg in 1621. A bill of exchange.
by the 18th century. At the same time it is realized that the banking process has its own in-built potential for profit which can more than cover the costs of processing cheques and transferring money. the next stage in the story is the development of national banks. only a fraction of which is usually required for withdrawals. bringing profit to thebank. A proportion of the rest can be lent out at interest. The total of the money left on deposit by a bank's customers is a large sum. With private banking part of the fabric of commercial life. the bank's profit becomes the difference between the rates of interest paid to depositors and demanded from debtors.This much simplified version of a bill of exchange slowly gains acceptance from the late 17th century. they make banking their business in place of their original craft as goldsmiths. Then they begin to lend some of it out. The transformation from moneylenders into private banks is a gradual one during the 17th and 18th centuries. When the customers later come to realize this hidden value of their unused funds. Finally. In England it is achieved by various families of goldsmiths who early in the period accept money on deposit purely for safekeeping. .
000 to the government. originally a joint-stock company which begins its existence in 1694 by arranging a loan of £1.18th century AD Venice. The logical extension of this concept is a national bank. established in some form of partnership with the state. Venice now has a mechanism for raising public finance on the basis of guaranteed credit. which has got into trouble through the making of unsecured loans. In 1617 the Banco Giro is established to solve problems encountered by the earlier Banco della Piazza di Rialto. Its debtors include the Venetian government. In solving an existing problem. The Banco Giro is founded on the principle that the government's creditors accept payment in the form of credit with the new bank. It is followed before the end of the century by the Bank of England.200. after being possibly the first city to found a bank for the keeping of money on safe deposit and the clearing of cheques. . founded in 1668 and today the world's oldest surviving bank.National banks: 17th . this also provides new opportunities. The earliest example is the Bank of Sweden. is also a pioneer in the involvement of a bank with state finances.
which it accumulates until almost the entire hoard of the nation's bullion is stored in its vaults.During the 18th century the Bank of England gradually undertakes many of the tasks now associated with a central bank. In 1656 Johan Palmstruch establishes the Stockholm Banco. It acts as a clearing bank for government departments. The Bank of England also becomes the banker to other London banks. The London banks act as agents in the capital for the many small private banks which open around the country in the second half of the 18th century. facilitating and processing their daily transactions. and through them to a much wider banking community. For this purpose the national bank needs a large reserve of gold. It is a private bank but . Sweden can claim the priority (as also. It organizes the sale of government bonds when funds need to be raised. in the first national bank). Bank notes: AD 1661-1821 Paper currency makes its first appearance in Europe in the 17th century. a few years later. All these banks use the Bank of England as a source of credit in a crisis.
Palmstruch issues credit notes which can be exchanged.it has strong links with the state (half its profits are payable to the royal exchequer). The so- . Another half century passes before the next bank notes are issued in Europe. the curse of paper money sinks the project. This limitation is successfully imposed in Britain during the Napoleonic wars. facing a death penalty (commuted to imprisonment) for fraud. Throughout the commercially energetic 18th century there are frequent further experiments with bank notes . John Law. Gradually public confidence in these pieces of paper increases. In these circumstances it even becomes acceptable that a government should impose a temporary ban on the right of the holder of a note to exchange it for silver. in consultation with the government. Predictably. again by a far-sighted financier whose schemes come to naught. Palmstruch's notes (the earliest to survive dates from a 1666 issue) are impressivelooking pieces of printed paper with eight hand-written signatures on each. In 1661. Public confidence in the system is inevitably shaken when a government decree. for a stated number of silver coins.deriving from a recognized need to expand the currency supply beyond the availability of precious metals. these notes are genuine currency. Palmstruch issues more notes than his bank can afford to redeem with silver. founder of the Banque Générale in Paris in 1716 (and later of the ill-fated Mississippi scheme) issues bank notes from January 1719. particularly when they are issued by national banks with the backing of government reserves. By 1667 he is in disgrace. If enough people trust them. halves the value of this paper currency. on presentation to his bank. they can be used to purchase goods in the market place if each holder of a note remains confident that he can indeed exchange it for conventional coins at the bank. in May 1720.
has for some years consulted in a private capacity his friend Mayer Amschel Rothschild. The family is soon represented in all the important centres of the continent. the inherent danger is no longer bankruptcy but inflation. Anselm Mayer. Rothschild responds energetically to this opportunity. With governments issuing the bank notes. He values Rothschild's advice both on matters of finance and on additions to his art collection. ruler of the German state of Hesse-Kappel and possessor of a vast fortune. in 1821. The Danish loan is the first of many such transactions on behalf of governments which rapidly establish the Rothschild family as Europe's most powerful bankers. at his side to inherit the Frankfurt bank. In 1801 he formally appoints him his court agent. The four younger sons establish branches elsewhere: Solomon . By 1803 he is in a position to lend 20 million francs to the Danish government. the British government takes the precaution of introducing the gold standard. He keeps the eldest. a Jewish banker and merchant of Frankfurt. rising to a pre-eminence comparable to that of the Medici and the Fugger in earlier centuries. The Rothschild dynasty: AD 1801-1815 William IX. Mayer Amschel has five sons.called Restriction Period lasts from 1797 to 1821. and encourages him to offer his financial skills to other European princes in these troubled years when Napoleon is unsettling the continent. When the Restriction Period ends.
Rothschild keeps it safe and returns it. By the end of the war the Rothschild family has a vast reputation among the allies. operating from Paris. during the morning. is Nathan's transfer of large sums of money from London to Portugal to pay the British troops in the Peninsular War.in Vienna. are that they are trustworthy and very well informed.has two days earlier won a decisive victory over Napoleon at Waterloo. But on this occasion their success is due to one of their couriers. Confirmation arrives that afternoon through the government's own channels. The Rothschild network of communication includes. It amounts to perhaps half a million pounds in the money of those days. and a close involvement in the government finances of many nations. A famous example. who was waiting in the harbour at Ostend for the first scrap of news. An example of the former is the fortune left in Mayer Amschel Rothschild's care when his patron flees from Hesse-Kassel after Napoleon's victory at Jena in 1806. As to reliable information. in addition to undoubted financial flair. he informs the officials . to raise money for the exiled Bourbons). 1815. Karl in Naples and Jacob in Paris. with a startling piece of good news. the use of homing pigeons. famously.who are at first somewhat incredulous . . with interest. On June 20 Nathan Mayer Rothschild calls on the government in London. The Rothschild family gambles heavily on the eventual defeat of Napoleon. to its owner in 1815. The duke of Wellington. Their network of contacts enables them to move money around Europe even in wartime conditions. Nathan Mayer in London. Their loans are all to his enemies (surprisingly Napoleon allows Jacob. but only one of many. The qualities soundly underpinning their good fortune. the most famous incident concerns that same year. In spite of every attempt by Napoleon's agents to make him make him hand it over.
Functions of Commercial Banks The functions of a commercial banks are divided into two categories: i) Primary functions. i) Primary functions: The primary functions of a commercial bank include: a) accepting deposits. . and b) granting loans and advances. a) Accepting deposits The most important activity of a commercial bank is to mobilise deposits from the public. People who have surplus income and savings find it convenient to deposit the amounts with banks. and ii) Secondary functions including agency functions.
Modes of short-term financial assistance Banks grant short-term financial assistance by way of cash credit. a) Cash Credit Cash credit is an arrangement whereby the bank allows the borrower to draw amounts upto a specified limit. commercial banks grant short-term loans. that is.Depending upon the nature of deposits. may also be granted. ii) Advances An advance is a credit facility provided by the bank to its customers. overdraft and bill discounting. Loans are generally granted against the security of certain assets. It differs from loan in the sense that loans may be granted for longer period. loan for more than a year. b) Grant of loans and advances The second important function of a commercial bank is to grant loans and advances. The amount is credited to the account of the customer. Thus. but advances are normally granted for a short period of time. But term loans. The rate of interest charged on loans and advances varies depending upon the purpose. i) Loans A loan is granted for a specific time period. The customer can . interest is charged on the full amount of loan. Interest is charged only on the amount withdrawn and not on the sanctioned amount. If the rate of interest is higher. deposits with the bank grow along with the interest earned. A loan may be repaid either in lumpsum or in instalments. period and the mode of repayment. Further the purpose of granting advances is to meet the day to day requirements of business. Such loans and advances are given to members of the public and to the business community at a higher rate of interest than allowed by banks on various deposit accounts. The difference between the rate of interest allowed on deposits and the rate charged on the Loans is the main source of a bank¶s income. However. The borrower may withdraw the entire amount in lumpsum or in instalments. funds deposited with bank also earn interest. Generally. There is also safety of funds deposited with the bank. The rate of interest charged on advances varies from bank to bank. public are motivated to deposit more funds with the bank.
e) Standing guarantee on behalf of its customers. Different modes of Acceptance of Deposits . vehicles etc. b) Overdraft Overdraft is also a credit facility granted by bank. travellers cheques. c) Providing customers with facilities of foreign exchange. the bank can recover the amount from the customer. or both. ii) Secondary functions Besides the primary functions of accepting deposits and lending money. In case any bill is dishonoured on the due date. that is. b) Undertaking safe custody of valuables. making payment of the amount before the due date of the bills after deducting a certain rate of discount. and securities by providing safe deposit vaults or lockers. A customer who has a current account with the bank is allowed to withdraw more than the amount of credit balance in his account. f) Collecting and supplying business information. It is a temporary arrangement. g) Issuing demand drafts and pay orders. machinery. and from one branch to another branch of the bank. Overdraft facility with a specified limit is allowed either on the security of assets. important documents. and. h) Providing reports on the credit worthiness of customers. Cash Credit is granted as per agreed terms and conditions with the customers. These are as follows a) Issuing letters of credit. The party gets the funds without waiting for the date of maturity of the bills. Interest is charged on the amount actually withdrawn. Business Studies c) Discounting of Bills Banks provide short-term finance by discounting bills. or on personal security.withdraw this amount as and when he requires. d) Transferring money from one place to another. for making payments for purchase of goods. banks perform a number of other functions which are called secondary functions. circular notes etc.
Banks receive money from the public by way of deposits. it is necessary for the depositor to be introduced by a person having a current or savings account with the same bank. current deposit can be withdrawn by the depositor at any time by cheques. the higher is the rate of interest offered. To open a savings account. Since they are repayable only after a fixed period. The following types of deposits are usually received by banks: i) Current deposit ii) Saving deposit iii) Fixed deposit iv) Recurring deposit v) Miscellaneous deposits i) Current Deposit Also called µdemand deposit¶. dividend warrants. The longer the period. drafts. A saving account can be opened with or without cheque book facility. it is also known as time deposit. etc. Businessmen generally open current accounts with banks. The Reserve bank of India prohibits payment of interest on current accounts or on deposits upto 14 Days or less except where prior sanction has been obtained. the bank may invest these funds more profitably by lending at higher rates of interest and for relatively longer periods. It helps in safe guarding their future and also earning interest on the savings. Banks usually charge a small amount known as incidental charges on current deposit accounts depending on the number of transaction. Since it is repayable only after a fixed period of time. The rate of interest to be allowed on fixed deposits is governed by rules laid down by the . Savings deposit/Savings Bank Accounts Savings deposit account is meant for individuals who wish to deposit small amounts out of their current income. Fixed deposit The term µFixed deposit¶ means deposit repayable after the expiry of a specified period. The rate of interest on fixed deposits depends upon the period of deposits. drawn in their favour for collection by the bank. There are restrictions on the withdrawls from this account. Fixed deposits are most useful for a commercial bank. which is to be determined at the time of opening of the account. Savings account holders are also allowed to deposit cheques. Current accounts do not carry any interest as the amount deposited in these accounts is repayable on demand without any restriction.
The loans are particularly granted to businessmen and members of the public against personal security. ii) Loans : A specified amount sanctioned by a bank to the customer is called a µloan¶. Children Gift plan. The borrower draws the money as and when he needs. After the completion of the specified period. The specified amount is put on the credit of the borrower¶s account. Recurring Deposits Recurring Deposits are gaining wide popularity these days. Mini deposit scheme. It is granted for a fixed period. and iv) Discounting of Bills i) Cash Credit : A cash credit is an arrangement whereby the bank agrees to lend money to the borrower upto a certain limit. Interest is charged only on the amount actually drawn and not on the amount placed to the credit of borrower¶s account. the depositor is required to deposit a fixed amount of money every month for a specific period of time. Under this type of deposit. gold and silver and other movable and immovable assets. like Home Construction deposit scheme. etc. Cash credit is generally granted on a bond of credit or certain other securities. Sickness Benefit deposit scheme. Commercial bank generally lend money in the following form: i) Cash credit ii) Loans iii) Bank overdraft. the customer gets back all his deposits alongwith the cumulative interest accrued on the deposits. The bank puts this amount of money to the credit of the borrower.Reserve Bank of India.5/. or a year. Miscellaneous Deposits Banks have introduced several deposit schemes to attract deposits from different types of people.500/. He can withdraw this amount in lump sum or can draw cheques against this . Old age pension scheme. This a very popular method of lending in our country.to Rs. Different methods of Granting Loans by Bank The basic function of a commercial bank is to make loans and advances out of the money which is received from the public by way of deposits. Each instalment may vary from Rs. say six months.or more per month and the period of account may vary from 12 months to 10 years.
The loan may be repaid in lump sum or in instalments. Term loan is required for the purpose of setting up of new business activity. expansion/extension of existing units. The borrower can repay the loan either in lumpsum (one time) or as agreed with the bank. The repayment is generally made in suitable instalments of fixed amount.C. The loan can be granted as: a) Demand loan. Kisan Vikas Patra. Every bank has its own procedure of granting loans.I.S.T. or b) Term loan a) Demand loan Demand loan is repayable on demand. construction of factory building or purchase of other immovable assets. b) Term loans Medium and long term loans are called µTerm loans¶. Hence a bank is at liberty to grant loan depending on its own resources. certificates. Term loans are granted for more than one year and repayment of such loans is spread over a longer period. The rate of interest is lower on loans in comparison to cash credit.. land for setting up a factory. These loans are generally secured against the mortgage of land. plant and machinery. modernisation. It is a short term facility. Life Insurance policies and U. These loans are repayable over a period of 5 years and maximum upto 15 years. Interest is charged on the full amount even if the borrower does not utilise it. iii) Bank Overdraft Overdraft facility is more or less similar to cash credit facility. This facility is made available to current account holders who operate their account through cheques. A loan is generally granted against the security of property or personal security. purchase of plant and machinery. Overdraft facility is the result of an agreement with the bank by which a current account holder is allowed to withdraw a specified amount over and above the credit balance in his/her account. The entire amount of demand loan is disbursed at one time and the borrower has to pay interest on it.sum for any amount. Loans are normally granted by the bank against tangible securities including securities like N. renovation. The customer is permitted to withdraw . In other words it is repayable at short notice. building and other securities. vehicles. The normal rate of interest charged for such loans is generally quite high.
the banks help the business community. on behalf of customers. etc. iv) Discounting of Bills Apart from granting cash credit. Overdraft facility is generally granted by bank on the basis of a written request by the customer.the amount as and when he/she needs it and to repay it through deposits in his account as and when it is convenient to him/her. Such bills of exchange arise out of commercial transactions both in internal trade and external trade. Besides these two main activities. interest and rent. b) Collection of dividends. c) Purchase and sale of shares and securities on behalf of customers. Some times. These services supplement the main activities of the banks. They are essentially non-banking in nature and broadly fall under two categories: i) Agency services. banks also grant financial assistance to customers by discounting bills of exchange. Of course. Banks purchase the bills at face value minus interest at current rate of interest for the period of the bill. Agency and General Utility Services provided by Modern Commercial Banks You have already learnt that the primary activities of commercial banks include acceptance of deposits from the public and lending money to businessmen and other members of society. the banks recover the full amount of these bills from the persons liable to make payment. i) Agency Services Agency services are those services which are rendered by commercial banks as agents of their customers. They include : a) Collection and payment of cheques and bills on behalf of the customers. Interest is charged on actual amount withdrawn by the customer. if so instructed by them. By discounting these bills before they are due for a nominal amount. . Bills of exchange are negotiable instruments and enable the debtors to discharge their obligations towards their creditors. and ii) General utility services. This is known as µdiscounting of bills¶. banks also insist on either a promissory note from the borrower or personal security to ensure safety of funds. commercial banks also render a number of ancillary services. loans and overdraft. The interest rate on overdraft is higher than that of the rate on loan.
b) Underwriting of shares. g) Undertaking foreign exchange business. These are available to the public on payment of a fee or charge. d) Underwriting loans floated by government and public bodies. TYPES OF LOANS OFFERED BY BANKS » Two Wheeler Loans » Car Loans » Commercial Vehicle Loans » Cash Rental Loans » Commercial / Business Loans » Professional Loans » Trade Loans » Equipment Loans » Construction Equipment Loans » Farm Equipment Loans » Medical Equipment Loans » Office Equipment Loans » Home Loans . They include : a) Issuing letters of credit and travellers¶ cheques. debentures. e) Supplying trade information and statistical data useful to customers. .d) Payment of rent. insurance premium. if so instructed. c) Safe-keeping of valuables in safe deposit locker.. e) Acting as a trustee or executor. subscriptions etc. etc. on behalf of customers. interest. ii) General utility services General utility services are those services which are rendered by commercial banks not only to the customers but also to the general public. f) Acting as a referee regarding the financial status of customers. f) Acting as agents or correspondents on behalf of customers for other banks and financial institutions at home and abroad.
In case of old/second hand vehicles. banks finance up to a maximum of 85% of the value of the vehicle. These loans can be paid in easy installments. 5000 to Rs. Repayment is done by Equated Monthly Installments or EMI. The installment period can range anywhere from six months to three years. depending on the finance option chosen by the customer. In case of new vehicles.» Home Equity Loans » Home Extension Loans » Home Improvement Loans » Home Purchase Loans » Land Purchase Loans » Top Up Loans » Mortgage Loans » Personal Loans » Consumer Durable Loans » Festival Loans » Marriage Loans » Pension Loans » Personal Computer Loans » Real Estate Loans » Student Loans » Education Loans » Scholar Loans » Travel Loans » Two Wheeler Loans Maximum Loan offered by Banks for Two Wheeler Loans Loans are provided by banks from as low as Rs. Interest Charged by Bank on Two Wheeler Loans . 150000. banks generally finance up to a maximum of 90% of the cost of the vehicle.
Auto Overdraft Bank of India . light commercial vehicles. some companies do charge a minimal processing fee for used two wheelers List of Some of Banks Offering Car Loans ICICI Bank . Simple documentation and quick turnaround time ensure convenience of prospective clients Cash Rental Loans . Interest is generally calculated on a monthly reducing balance. three wheelers etc. Range of services are offered by banks like financing of new vehicle and refinancing the used ones. They can also fill online forms. tippers.SBI Car Purchasing Loan Standard Chartered . Interest rates depend on the two wheeler model. buses.Autofin Scheme HDFC Bank .Car Overdraft State Bank of India . loan tenure. There is no processing fee for new cars in most banks/finance companies.Banks offer attractive loans for commercial vehicles including trucks.United Car Loan Scheme State Bank of Mysore. Process Of Two Wheeler Loans Application Customers can contact the bank representative and apply for an auto loans.Overdraft Against Car Bank of Baroda Baroda Car Loan United Bank of India .Although Public sector banks are offering lower interest rate than their private counterparts but they are lagging behind due to poor quality of service. However. Banks have also tied up with leading commercial vehicle manufacturers to provide fast and easy loans to its customers.
The repayment can be done through Equated Monthly Installments or EMI. tenure of the loan etc. Interest Charged by Banks on Professional Loans: Interest is charged according to the prime lending rate. Interest rate also depends on the repayment capacity of the customer. Tangible collateral security has to be provided in certain cases.Maximum Amount of Cash Rental Loans Offered: The maximum amount of loan depends on the rental receivable. Interest can be discounted depending on the customer's profile and his financial capacity.25000 to Rs. » Professional Loans Maximum Amount of Professional Loans Offered: The amount of loan varies in banks. A processing fee of 1-2 % of the actual loan amount is charged by banks. Repayment of loan can be done within the period of tenancy/lease. Process of Professional Loans Approval: . Banks generally provide loan from Rs. Existing customers of the bank are sometimes given a discounted interest rate. A margin of 20-25 % is taken by banks while giving the loan. depending on the financial standing of the customer. Repayment is done through Equated Monthly Installments or EMI. Process of Cash Rental Loans Approval: Customers can apply for loan either in person by visiting the bank's premises or by filing online forms. It can be taken by clients on a fixed or fluctuating basis. his repayment capacity.25 lakh. The interest is generally calculated on the diminishing balance. Banks generally charge according to prime lending rate. Interest Charged by Banks on Cash Rental Loans: Interest can be taken either on fixed or floating rate.
25000. These loans are available at low interest rates and convenient EMIs. Banks are providing trade loans to traders / businessmen to help them set up or expand their business. The main aim of a commercial loans is to help traders. businessmen and professional. his financial standing. Interest Charged by Bank on Trade Loans: Interest is fixed on the basis of prime lending rate. Trade loans is repayable in maximum 5 years through Equated Monthly Installments or EMI. Loans to self employed professions such as CA. medical equipment loans. financial standing of the person taking the loan. Commercial or Business loans is popular category of loans offered by almost all banks in both public as well as private sector.Professionals can apply for the loan by visiting the bank's premises or applying online. Architects. Rate of interest can vary in different banks due to the policies. tenure of loan. . These loans are available at attractive interest rates and low EMIs to widen the customer base. Various banks charge a nominal processing fee which is around 1% of the loan amount. » Trade Loans Present day trading involves heavy initial investment and pooling in continuous financial resources. start or expand their commercial activities. Maximum Loan offered by Banks for Trade Loans: The minimum loan offered by banks is Rs. The amount of EMI will depend on a number of factors such as loan amount. office equipment loans etc. initiated by quite a few banks to cater to the diverse needs of its customers. This loan category is comprehensive and can include construction farm equipment loans. his ability to repay the loan and the tenure of loan. it can be on fixed or floating rate. Such loans are provided to facilitate trade and smooth functioning of business. 100 lakhs.it can be extended up to a maximum of Rs. The amount of loan also depends on the age of the applicant. » Equipment Loans Equipment loan is an innovative retail loan product. Doctors are also a part of this category.
The loan amount is repayable through Equated Monthly Installments or EMI. repayment capacity. tenure and amount of loan. Leading banks provide value added services by tying up with leading construction equipment manufacturers to provide a wide variety to its clients. Leading banks also provide value added services by sending their representatives to the client's house or workplace. They can be on fixed or floating basis. Process Of Construction Equipment Loans Application: Customers can apply for loan online or visit the nearest branch of leading banks. Interest rates also depend on the customer's profile. right from new entrepreneurs to large business houses. Interest Charged by Bank on Construction Equipment Loans: Interest rates are generally fixed according to the prime lending rate. past and present financial standing and also various bank records and statements furnished by the customer. Maximum Loan offered by Banks for Construction Equipment Loans: The amount of loan depends on a number of factors like the purpose of loan.Types Of Equipment Loans Available: » Construction Equipment Loans » Farm Equipment Loans » Medical Equipment Loans » Office Equipment Loans » Construction Equipment Loans Banks customise construction equipment loans to suit the needs of all its clients. . Such loans can also fall under the category of personal loans.
tenure of loans required. Loans required for farm equipments are funded to the extent of 50% of the value of the equipment.» Farm Equipment Loans Banks are providing a lot of financial assistance to farmers in order to provide impetus to the agricultural sector. This loan is primarily taken to either purchase new equipment or taking over the existing one. » Medical Equipment Loans Banks are targeting top. Maximum Loan offered by Banks for Medical Equipment Loans: Loans are available starting from Rs. Maximum Amount of Farm Equipment Loans Provided: The maximum amount of loans varies from customer to customer depending on the value of land being mortgaged. income of the farmer. Interest Charged by Banks for Farm Equipment Loans: The rate of interest also varies depending on the loan amount.notch doctors as new segment of customers by offering them attractive medical equipment loans. There is no maximum amount of loan. Dealers provide them with all the information and also help them choose the best option suiting their requirements. Banks also provide farmers with lower rate of interest to give a push to the agricultural sector. . which in turn have tie ups with various leading banks. which is upgraded to 100% sometimes. Process of Farm Equipment Loans Application: Farmers can contact their nearest tractor dealer. 10000. Banks are entering into agreements with leading commercial vehicles /tractor manufacturers to provide easy finance to farmers. Banks generally fund 90% of the cost of tractor. viability of the proposition and the value of collateral security provided.
The loan is repaid through Equated Monthly Installments or EMI. Right from furniture. to workstations to computers. Loan is sanctioned up to 70% of the actual value of the office equipment. Loan is given maximum up to 85% of the value of the medical equipment. his repayment capacity. Repayment tenure can range from 1-3 years. policies of the bank. Interest Charged by Bank on Medical Equipment Loans: Most banks charged according to the existing market rates. Process Of Office Equipment Loans Application: Loan can be obtained by either filling an online form or directly approaching the bank. Repayment is done through Equated Monthly Installments or EMI. Maximum Loan offered by Banks for Office Equipment Loans: The quantum of loan depends on factors like repayment capacity of the borrower. A processing fee is normally charged by banks which is around 2% of the actual amount of loan . Process Of Medical Equipment Loans Application: Loan can be applied for by filling the application form either in person or online. loan can be taken to suit your requirements. These rates are highly competitive. financial background of the borrower. Loan is repaid within a tenure of 1 to 5 years. tenure of the loan etc. Interest Charged by Bank on Office Equipment Loans: Interest is charged either on fixed or floating rate. tenure of loan. Interest are also fixed according to the prevailing market rates. The rate of interest can either be taken on fixed or fluctuating basis. Banks normally charge around 2% of the total loan amount as the processing fee » Office Equipment Loans Office equipment loan is the latest offering from various banks.It is generally decided after considering the financial background of the customer.
tenure of loans etc Types Of Home Loans Available: » Home Equity Loans » Home Extension Loans » Home Improvement Loans » Home Purchase Loans » Land Purchase Loans » Top Up Loans » Home Equity Loans Home equity loans helps the customer to mortgage his existing property to the bank for taking loan for some other purpose. Maximum Amount of Home Equity Loans: Banks offer around 60-65% of the actual value of the property as loan. market value of the the land or building. Banks assess the current market value of the property to give loans to customers. Repayment is done through Equated Monthly Installments or EMI. The Loan amount can go up to 10-15 lakhs for commercial and residential properties. also the land should be free from any kind of dispute. the loan amount. keeping a number of factors like. The repayment period can range from 10-15 years depending on the bank's policies. Customers can use the money so acquired for marriage. Home loans products is offered by almost all banks. Residential/Non-residential properties are considered for approval of loan. The EMI and rate of interest is arrived at. right from loans for purchasing real estate to buying a flat. Banks are cashing on this phenomenon by offering easy home loans at attractive rates. They are only given to legal title holders. medical purpose. education. from home improvement to home extension loans. Interest Charged by Banks for Home Equity Loans: .» Home Loans Housing is the fastest growing sector in the current times.
» Home Improvement Loans . Interest Charged by Bank for Home Extension Loans: Rates of interest charged will be as per Bank's policy on the date of disbursement of loan. according to the requirement of the customer. There is certain information that one must furnish in order to qualify to approval of home loan. A nominal fee of 1-2% is charged as processing by the banks. Such loans fall under the category of home loans. Maximum Amount of Home Extension Loans: Banks normally offer 70-85% of the total amount of home extension as loan. Home Equity Loans Application Process: An individual/company/professional can apply for home equity loan in different home loan corporations/ banks by filling the application form. Interest rates can be either on fixed or floating basis. The amount of loan sanctioned also depends on a number of factors such as the age of the applicant at the time of loan. add more rooms etc. tenure of the loan. Process of Home Extension Loans Application: Customers can fill online application forms or personally visit the bank for approval of loan.Rate of interest can both be fixed as well as fluctuating. » Home Extension Loans Banks provide customers with home extension loans to extend their houses. repayment capacity of the borrower etc. These days companies provide online forms for customer convenience. Rate of interest charged is also fixed according to the prevailing market conditions.
Maximum Amount of Home Improvement Loans: An old customer is sometimes given 100% cost of improvement. Rates of interest charged will be as per Bank's policy on the date of disbursement of loan. The maximum loan amount can vary from bank to bank. The loan payment is made by equated monthly installments (EMI). Banks are coming out with new products to suit the needs of the customers. The maximum term of home improvement loan varies from bank to bank. » Home Purchase Loans . The amount of loan is however subject to the market value of property. depending on the age of the applicant at the time of loan application. Home improvement loans have been introduced by quite a few banks. Companies lower the interest rates during festive seasons. Generally all the new customers are sanctioned 85% of the cost of improvement. Interest on Home Improvement Loans: Home improvement loans interest rates depend on a number of factors : y y y y y The tenure for which the loan is taken Loan amount Type of housing improvement loans taken Type of customer and his repayment capacity Loan policy of different companies. Purpose of Home Improvement Loans Include: y y y y Internal and external repairing Waterproofing and roofing Complete interior renovation Tiling and flooring etc. it also depends on the amount of loan taken and the repayment capacity of the customer. Interest rates will be different for private sector and public sector players.Maintaining homes is a costly affair.
Interest Rate on Home Purchase Loans: Home Purchase Loans interest rates depend on a number of factors : y y y y y The tenure for which the loan is taken Loan amount Type of housing loans taken Type of customer and his repayment capacity Loan policy of different companies.Owning a home is perhaps the biggest and most important dream of an average family therefore ownership of a home goes beyond pure financial considerations. irrespective of the prevailing market rate. Maximum Home Purchase Loans Given Depends On: y y y y Individual loan policy of different companies. generally fixed loan interest rates are higher than the fluctuating loan rate. so a fluctuating interest rate makes more sense. The cut in the loan interest rate has also fuelled the demand for this product. Companies lower the interest rates during festive seasons. Kind of Home Purchase Loans Interest Rates: y y Fluctuating Home Purchase Loans Interest rates: Keep changing with change in the prevailing market rate or the prime lending rate. The maximum amount of loans given is however 85% of the value of the property (inclusive of cost of land) Repayment capacity of the customer Maximum term of home purchase loans The term of home purchase loans offered is maximum 25 years. Fixed Loans Interest Rate: As the name suggests. Home loans purchase has witnessed an increase owing to competition between a number of public and private players. The loan is repayable in the form of equated monthly installments (EMI). The current scenario in India is that of declining interest rate. The EMI should not exceed 50 per cent of your monthly household income. This again depends on the repayment capacity of the individual . do not change during the entire loan period. Interest rates will be different for private sector and public sector players.
» Land Purchase Loans
Various private and public sector banks are coming out with attractive loan plans for its customers for purchase of land, purchase or construction of house/flat. The loan can be taken for both land purchase as well as construction on the land. Eligibility for Land Purchase Loans: Any individual aged 21 years or above having regular income is generally eligible to apply for land Purchase loan. Maximum Amount of Loans: The quantum of loan sanctioned, depends on a number of factors like the cost of house/flat, person's age while applying for loan, income, repayment capacity etc. Loans of higher amount may be considered on the basis of merit of the case. The loan can then be repaid through Equated Monthly Installments or EMI. The loan is payable maximum in years. Margin for purchase or construction of new house/flat: Minimum 15% of the project cost for individual Minimum 10% of the project cost in case wife joins as co-borrower
» Top Up Loans
This unique retail loan products offers a customer, a loan by mortgaging an existing house. A person can take a loan for his personal needs which can be for purchase of furniture, trade and business requirement, higher education etc. by mortgaging his home. A person can also take a top up loans, on an existing home loans; while paying for the loans, bank can grant a customer, a top up loans to meet his other needs, this in turn depends on his repaying capacity. Maximum Loan offered by Banks for Top up Loans: The maximum amount of loan offered by banks generally does not exceed 70% of the market value of the property. A number of factors are also kept in mind while granting top up loans. They are:
y y y
Amount of loan outstanding Current market value of the property Repayment Capacity
Interest Charged by Bank on Top up Loans: The rate of interest charged is same as the prevailing home loans rates. Process Of Top up Loans Application: Customers can contact the bank representative and apply for a top up loans. They can also fill online forms. A minimal processing fee is charged by banks, which may also be waived off in case of existing customers, or those who have an excellent repayment record.
» Mortgage Loans Banks provide loan against mortgage of property on an attractive rate of interest. Businessmen, self employed professionals, salaried customers are all eligible to apply for the loan. It enables the borrower to apply for loan against a fixed asset. Maximum Amount of Mortgage Loans Offered: The maximum amount of loan depends on a number of factors, like customer's profile, his financial standing and repayment capacity, tenure of the loan. The repayment tenure increases or decreases with the amount of loan. Repayment is done through Equated Monthly Installments or EMI.
Interest Charged by Banks on Mortgage Loans: Interest can be paid either on fixed or floating basis. Banks charge prime lending rate as their interest. Interest rate can be discounted for existing clients or in special cases according to the policies of the bank. Process of Mortgage Loans Approval: Customers can apply for mortgage loans by filling an online form. They can also visit the nearest branch of a particular bank. Normally, banks charge 1-2% of the actual loan amount as processing fee.
Personal Loans Personal loans are a unique retail loans product offered by a number of banks to cater to distinct and diverse needs of the customers. Secured and unsecured loans are provided by banks to its esteemed customers. The main purpose of such a loan is to meet any kind of personal need or expense. A number of personal loans like marriage loans, consumer durable loans, festival loans are increasingly becoming popular. Easy loans are provided at attractive rate of interest for widening the existing customer base. Types Of Personal Loans Available: » Consumer Durable Loans » Festival Loans » Marriage Loans » Pension Loans » Personal Computer Loans
Consumer Durable loans Banks are coming out with unique loans to attract more customers. Right from Refrigerator, to music system to washing machine, you can buy anything. The
offers it for a maximum period of 36 months. Banks charge a nominal 1% fee on the loan amount as processing charge.000. Banks attract more customers by offering lower rates of interest. can repay early but do not want to pay interest at . The rate of interest varies between banks and also depends on the prevailing market conditions. There is a surge in consumer spending during festivals.000. Punjab National Bank offers up to 90 per cent of the cost of the article. The processing takes 3-5 days. Consumer Durable Loans Application Process: Customers can obtain application form either in person from the bank or apply online.000 and the maximum is Rs 200. UTI Bank. Then there is UTI Bank. However. This loan is however available only with nationalised banks. So. where the minimum amount is Rs 25. a variant of personal loans.000. whichever is less.000. Festival loans are however. It is extremely convenient for people who want a small loan. provided it does not exceed 85 per cent of the cost of the product.000 for pensioners.demand for such loans witness a sharp rise during the festive season. The minimum amount of loan offered is Rs 5. most banks offer loans between Rs 10. 0% loans schemes are popular during this time.000 and Rs 100. A loan can be taken for a maximum period of 60 months. Syndicate Bank offers up to 80 per cent of the invoice value of the products purchased or 10 months gross salary. The maximum limit is Rs 100.000. however. Under SBI's 'Festival Loans' scheme. subject to a maximum of Rs 100. For instance. Festival loans Leading Banks in both public and private sectors cash on the festive season by offering loans at cheaper or discounted rate. Maximum Amount of Consumer Durable Loans Offered: The quantum of the loans varies from one bank to another. Interest Charged by Banks on Consumer Durable Loans: The rate of interest on consumer durable loan is lower than the interest on a personal loan. taking this loan makes more sense. subject to a maximum of Rs 200. money is offered for only up to 12 months.
Rate of Interest is discounted during the festive season. security/collateral offered by the customer. Interest Charged by Banks on Marriage loan: The rate of interest is governed by the prevailing market rate at the time of loan taken. . Banks generally charge Rs. Interest Charged by Bank on Festival Loans: Rates of interest charged will be as per Bank's policy on the date of disbursement of loan.000 and the maximum amount is limited to Rs 50. No stone is left unturned to make wedding functions complete success.000. The processing fee is also lower than personal and other loans. Repayment can be done through monthly/quarterly/half yearly installments or under Equated Monthly Installments or EMI. repayment capacity of the borrower. Repayment can be done by Equated Monthly Installments or EMI. Thus it is lower than the normal days. Process of Festival Loans Application: Borrowers can fill a form at the bank and apply for the loan. Marriage loans are gaining popularity in both rural as well as urban areas. Festival loans are generally restricted to 12 months. age of the borrower.100 as processing fee irrespective of the quantum of loan.the exorbitant rates levied by most banks Maximum Loan offered by Banks for Festival Loans: Festival loans are given for amounts as low as Rs 5. Such a loan can also be availed under the personal loans category. Fixed interest rates are generally preferred by customers. Marriage Loans Weddings are a time for family jubilation. Maximum Amount of Marriage Loans Provided: The maximum amount of loan varies form customer to customer. The loan size is smaller and the repayment period is shorter than that for personal loans.depending on a number of factors like.
Banks are coming up with new loan products like computer loans to meet the needs of their customers. With the IT boom. This is done by offering the unique pension loan.Process of Marriage Loans Application: Anyone can apply for a marriage loans by filing a form at the bank outlet. Interest Charged by Banks on Pension Loans: Banks generally charge according to the prime lending rate prevalent at the time of taking the loan. Pension Loan Banks are taking care of economical independence of retired individuals . . Process of Pension Loans Approval: A retired individual can apply for loan by simply filling the form. The banks charge a nominal amount as processing fee. computers are replacing manual work in every organisation. The loan is available to pensioners till the age of 70. Sometimes a discounted interest rate is also provided by banks. The amount can vary from individual to individual depending upon his repayment capacity. this can vary in banks. Personal Computer loans India is witnessing immense technological advancement. The Interest rate can either be fixed or floating.A term loan to meet your personal expenses. The repayment period can vary from 1-3 years. Computers help in more efficient management of work. Generally banks don't charge a processing fee. Repayment is normally done through Equated Monthly Installments or EMI. Maximum Amount of Pension Loans: The Maximum amount of loan sanctioned is generally 7-10 times the amount of last pension received.
Several banks are stepping up their exposure to real estate. Interest Charged by Banks on Personal Computer Loans: Banks generally charge according to the prime lending rate. Real Estate loan Buying a property necessitates in depth knowledge of real estate and choosing the right kind of loans. An extra 2% is sometimes charged by banks. A service charge of 1% of the entire loan amount is levied. The number of installments is restricted to 3 or 4. Builders can either opt for a fixed or floating . Process of Personal Computer Loans Application: All Salaried. Repayment is done in lump sum installment after the completion of project/ selling of the flats. professional. These banks are entering into agreements with builders for provision of real estate loans. tenure of loan. According to RBI figures loans to builders. The quantum of loan is decided after looking at the financial statements and cash flow statement of the applicant. The Scheme mainly caters to builders / promoters / developers of real estate. self-employed. businessmen or farmers can apply for the loan by filling a form at the bank or filling an online form. credit cards and personal loans) constitute a chunk of banks' total loan portfolio. Maximum Amount of Real Estate Loans Offered: Banks normally give real estate loans to builders/real estate developers of repute. The actual Rate of interest also depends on the amount of loan taken. 20000. Experience of 3-4 years is a must to avail the loan. Interest Charged by Banks on Real Estate Loans: The interest rate is normally determined and charged according to the prime lending rate of the individual bank. The maximum amount varies subject to individual policies in different banks.Maximum Loan Offered by Banks for Personal Computer Loans: Generally banks provide a loan up to Rs 100000 for computer hardware and software. along with retail credit (like home loans. Some banks provide a separate software loan to a maximum of Rs.
Student loans Students loans is one of the fastest growing retail banking product.rate of interest. administrative charges etc. Loans are available for graduate/postgraduate/technical courses. Students loans cover the tuition fee. banks are increasing the flexibility of this loan in terms of payback period to attract more students. hostel fee. . library charges. Process of Real Estate Loans Approval: Builders / real estate developers can fill the loan form either in person or online and apply for the loan. Types Of Student Loans Available: » Education Loans » Scholar Loans Education Loans Education loans are term loans offered to deserving students pursuing higher education either in India or abroad. A nominal processing fee is charged by banks.. Almost all public and private sector banks are offering student loans at attractive rates for meritorious and needy students for studying both in India as well as abroad. Eligible Courses: Graduation/ Post graduation/Professional course in any stream Any other course approved by Government. All employment generating courses are eligible for education loans.
The loan can be repaid by Equated Monthly Instalments or EMI. 20 Lakhs for studying abroad.15 lakhs. It generally commences after one year of the completion of course or six months after securing the job. Scholar Loan Banks are are coming out with innovative loans products to cater emerging segment of customers. Students enrolled in top engineering/ medical/B schools are eligible to apply for such loans. A few common expenses covered under education loans are as follows : y y y y y Tuition fee payable to college/school Examination/library/hostel charges Travel expenses Purchase of books/equipment/uniform Cost of two wheeler (Optional) Repayment of the loans can be done by Equated Monthly Installments EMI. This loan is provided by banks to students on the basis of their academic performance/merit. It can range from Rs.Maximum Amount of Student Education Loans: The amount of educational loans varies in different banks. Interest Charged by Bank on Scholar Loans: The interest on scholar loan varies from bank to bank and also the prevailing . One such loans product is 'Scholar Loans'. 10 lacs for studying in India and a maximum of Rs. 2 lakh to Rs. Generally the maximum educational loans granted is Rs. The time period can vary depending on the policies of individual banks. Expenses Of Education Loans: Banks and other institutions may have different criteria for selecting as to what constitutes the education expenses. Maximum Loan offered by Banks for Scholar Loans: The amount of loans provided varies in different banks.
depending on the current market conditions and their policies. Process of Travel Loans Application: Travel loans can be obtained by simply filling a form at the bank premises and providing the necessary documents. A deposit can however required sometimes. It is generally between 14-16%. The repayment can be extended to as long as four years. hotel stay. purchase of basic travel quota. Maximum Loan offered by Banks for Travel Loans: Your personal loan limit will be determined by your income and repayment capacity. Interest Charged by Bank on Travel Loans: The rate of interest varies from bank to bank. depending on the income of the customers. Procurement of sufficient funds to bear travel expenses has been made smooth with quite a few banks offering easy travel loans. . The loan meets any kind of travel expense such as cost of ticket. which can sometimes be waived off. Normally banks charge interest on a reducing balance. Online forms are also available for ease of the clients. visa. A nominal processing fee is charged by banks. etc. Travel Loan Planning a vacation with family and friends has never been more easy. airport tax. Generally no processing fee is charged. the travel loans can stretch up to as high as Rs. 1000000. Process of Scholar Loans Application: Scholar loans forms are available at bank premises. Starting from as low as Rs. tenure of loan.20000. The rate of interest can increase or decrease with respect to the amount of loans required. his repayment capacity.market rate. which is adjusted later on.
An important turning point in the history of State Bank of India is the launch of the first Five Year Plan of independent India. The All India Rural Credit Survey Committee proposed the take over of the Imperial Bank of India. the State Bank of India (SBI) was established on 1 July 1955. The Plan aimed at serving the Indian economy in general and the rural sector of the country. the former state-owned or stateassociate banks.State Bank of India (SBI) The evolution of State Bank of India can be traced back to the first decade of the 19th century. Subsequently. confined their services to the urban sector. including the Imperial Bank of India. Subsequently. The bank was redesigned as the Bank of Bengal. on 2 January 1809. These three banks dominated the modern banking scenario in India. Later on. and integrating with it. As a result. three years later. It was the first ever joint-stock bank of the British India. an Act was passed in the Parliament of India in May 1955. in 1951. until when they were amalgamated to form the Imperial Bank of India. It began with the establishment of the Bank of Calcutta in Calcutta. the All India Rural Credit Survey Committee recommended the formation of a state-partnered and state-sponsored bank. on 27 January 1921. in order to serve the economy as a whole and rural sector in particular. established under the sponsorship of the Government of Bengal. the commercial banks of the country. because as much as a quarter of the resources of the Indian banking system were controlled directly by the State. Moreover. This resulted in making the State Bank of India more powerful. The Act enabled the State Bank of India to make the eight former . the State Bank of India (Subsidiary Banks) Act was passed in 1959. the Bank of Bombay (established on 15 April 1840) and the Bank of Madras (established on 1 July 1843) followed the Bank of Bengal. they were not equipped to respond to the growing needs of the economic revival taking shape in the rural areas of the country. in particular. Until the Plan. Therefore. on 2 June 1806.
State Bank of Hyderabad. The eight banking subsidiaries are: y y y y State Bank of Bikaner and Jaipur (SBBJ) State Bank of Hyderabad (SBH) State Bank of India (SBI) State Bank of Indore (SBIR) . sub offices and three Local Head Offices. primary dealership in government securities. It is recorded that SBI has about 10000 branches. located at major cities throughout India. the State Bank of India catered to the needs of the customers. credit cards and insurance. Subsidiaries The State Bank Group includes a network of eight banking subsidiaries and several non-banking subsidiaries. The bank served the heterogeneous financial needs of the planned economic development. inherited from the Imperial Bank. there are several other establishments in and outside Mumbai. well networked to cater to its customers throughout India. ATM Services SBI provides easy access to money to its customers through more than 8500 ATMs in India. which includes the ATMs of State Bank of India as well as the Associate Banks ± State Bank of Bikaner & Jaipur. Through the establishments. The State Bank of India emerged as a pacesetter. In order to cater to different functions. Branches The corporate center of SBI is located in Mumbai. with its operations carried out by the 480 offices comprising branches. State Bank of Indore. etc. apart from the corporate center. The bank boasts of having as many as 14 local head offices and 57 Zonal Offices. Instead of serving as mere repositories of the community's savings and lending to creditworthy parties. You may also transact money through SBI Commercial and International Bank Ltd by using the State Bank ATM-cum-Debit (Cash Plus) card. it offers various services including merchant banking services. fund management. The Bank also facilitates the free transaction of money at the ATMs of State Bank Group. factoring services.State-associated banks as its subsidiaries. by banking purposefully.
. Andheri(W). 4th Cross Lane. EVOLUTION The origin of the State Bank of India goes back to the first decade of the nineteenth century with the establishment of the Bank of Calcutta in Calcutta on 2 June 1806. MUMBAI-400 053. Lokhandwala Complex.y State Bank of Mysore (SBM) Lokhandwala Complex Branch <<< Nebula Apartments.
and was influenced by changes occurring in the structure of both the local trading environment and those in the relations of the Indian economy to the economy of Europe and the global economic framework. shaped by ideas culled from similar developments in Europe and England. a capital on which the proprietors did not have to pay any interest. it was the first joint-stock bank of British India sponsored by the Government of Bengal. But. It meant an accretion to the capital of the banks. Primarily Anglo-Indian creations. the Bank received its charter and was re-designated as the Bank of Bengal (2 January 1809). which would be accepted for payment of public revenues within a restricted geographical area. Establishment The establishment of the Bank of Bengal marked the advent of limited liability. the Banks of Bombay and Madras. and especially upto the time that the three presidency banks . the three presidency banks came into existence either as a result of the compulsions of imperial finance or by the felt needs of local European commerce and were not imposed from outside in an arbitrary manner to modernise India's economy. So was the associated innovation in banking. the decision to allow the Bank of Bengal to issue notes. viz. The Bank of Bombay (15 April 1840) and the Bank of Madras (1 July 1843) followed the Bank of Bengal. A unique institution. This right of note issue was very valuable not only for the Bank of Bengal but also its two siblings.O. for a long time. The concept of deposit banking was also an innovation because the practice of accepting money for safekeeping (and in some cases. however. joint-stock banking in India. even investment on behalf of the clients) by the indigenous bankers had not spread as a general habit in most parts of India. Bank of Bengal H. Their evolution was.Three years later. These three banks remained at the apex of modern banking in India till their amalgamation as the Imperial Bank of India on 27 January 1921.
one of whom was elected as the president of the board. Loans were restricted to Rs. salt woollens. The security for such loans was public securities. The rest were government nominees. Demand promissory notes were signed by the borrower in favour of the guarantor. which were revised from time to time. keeping cash accounts and receiving deposits and issuing and circulating cash notes. Each charter provided for a share capital. All commodities. were either pledged or hypothecated to the bank. bank notes and government balances made up the bulk of the investible resources of the banks. indigo. which managed the affairs of each bank. plate. invariably civil servants. treasure. four-fifth of which were privately subscribed and the rest owned by the provincial government. mule twist and silk goods were also granted but such finance by way of cash credits gained momentum only from the third decade of the nineteenth century. were mostly proprietary directors representing the large European managing agency houses in India. Group Photogaph of Central Board (1921) Business The business of the banks was initially confined to discounting of bills of exchange or other negotiable private securities. cotton. sugar and jute. which began to be financed later.had a right of note issue. commonly called Company's Paper. jewels. cotton piece goods. bullion. Loans against goods like opium. including tea. or goods 'not of a perishable nature' and no interest could be charged beyond a rate of twelve per cent. The three banks were governed by royal charters. which was in turn endorsed to .1 lakh and the period of accommodation confined to three months only. The members of the board of directors.
While the Bank of Bengal had eighteen branches including . however. the right of note issue of the presidency banks was abolished and the Government of India assumed from 1 March 1862 the sole power of issuing paper currency within British India. while the business of discounts on private as well as salary bills was almost the exclusive monopoly of individuals Europeans and their partnership firms. forbidden. they embarked on branch expansion at a rapid pace. as far as the government was concerned. None of the three banks had till then any branches (except the sole attempt and that too a short-lived one by the Bank of Bengal at Mirzapore in 1839) although the charters had given them such authority. The task of management and circulation of the new currency notes was conferred on the presidency banks and the Government undertook to transfer the Treasury balances to the banks at places where the banks would open branches. agencies and sub agencies of the three presidency banks covered most of the major parts and many of the inland trade centres in India. the branches. Bombay and Madras occurred after 1860. Old Bank of Bengal Major change in the conditions A major change in the conditions of operation of the Banks of Bengal. But as soon as the three presidency banks were assured of the free use of government Treasury balances at places where they would open branches.the bank. land or other real property was. By 1876. But the main function of the three banks. was to help the latter raise loans from time to time and also provide a degree of stability to the prices of government securities. With the passing of the Paper Currency Act of 1861. Lending against shares of the banks or on the mortgage of houses. Indians were the principal borrowers against deposit of Company's paper.
The Act also stipulated the creation of Reserve Treasuries at Calcutta. seasonal branches and sub agencies. though the banks continued to hold charge of the public debt offices in the three presidency towns. The Government could lend to the presidency banks from such Reserve Treasuries but the latter could look upon them more as a favour than as a right. brought the three presidency banks under a common statute with similar restrictions on business. which came into operation on 1 May 1876.its head office. The proprietary connection of the Government was. and the custody of a part of the government balances. the Banks of Bombay and Madras had fifteen each. Bombay and Madras into which sums above the specified minimum balances promised to the presidency banks at only their head offices were to be lodged. however. terminated.10 Presidency Banks Act The Presidency Banks Act. Bank of Madras Note Dated 1861 for Rs. Bank of Madras .
Tea and coffee plantations transformed large areas of the eastern Terais. the hills of Assam and the Nilgiris into regions of estate agriculture par excellence. the Bank of Madras went into the financing of smallscale industries in a way which had no parallel elsewhere. All these resulted in the expansion of India's international trade more than six-fold. The pace of expansion witnessed in the previous decade fell sharply although. Not only was such business considered risky for these banks. it continued on a modest scale as the profits of that bank were mainly derived from trade dispersed among a number of port towns and inland centres of the presidency. a portion of which found its way into the foreign markets. New irrigation networks in Madras. But the three banks were rigorously excluded from any business involving foreign exchange. India witnessed rapid commercialisation in the last quarter of the nineteenth century as its railway network expanded to cover all the major regions of the country. in the case of the Bank of Madras. manufacturing and mining activity in the sub-continent. This exclusion continued till the creation of the Reserve Bank of India in 1935. While the Banks of Bengal and Bombay were engaged in the financing of large modern manufacturing industries.The decision of the Government to keep the surplus balances in Reserve Treasuries outside the normal control of the presidency banks and the connected decision not to guarantee minimum government balances at new places where branches were to be opened effectively checked the growth of new branches after 1876. it was also feared that these banks enjoying government patronage would offer unfair competition to the exchange banks which had by then arrived in India. Punjab and Sind accelerated the process of conversion of subsistence crops into cash crops. which held government deposits. Bank of Bombay . The three presidency banks were both beneficiaries and promoters of this commercialisation process as they became involved in the financing of practically every trading.
The establishment of the Reserve Bank simultaneously saw important amendments being made to the constitution of the Imperial Bank converting it into a purely commercial bank. The new bank took on the triple role of a commercial bank. The earlier restrictions on its business were removed and the bank was permitted to undertake foreign exchange business and executor and trustee business for the first time. But it continued to maintain currency chests and small coin depots and operate the remittance facilities scheme for other banks and the public on terms stipulated by the Reserve Bank.Imperial Bank of India The presidency Banks of Bengal. . But this creation was preceded by years of deliberations on the need for a 'State Bank of India'. Bombay and Madras with their 70 branches were merged in 1921 to form the Imperial Bank of India. The triad had been transformed into a monolith and a giant among Indian commercial banks had emerged. a banker's bank and a banker to the government. The establishment of the Reserve Bank of India as the central bank of the country in 1935 ended the quasicentral banking role of the Imperial Bank. The management of the bank clearing houses also continued with it at many places where the Reserve Bank did not have offices. The latter ceased to be bankers to the Government of India and instead became agent of the Reserve Bank for the transaction of government business at centres at which the central bank was not established. It also acted as a bankers' bank by holding their surplus cash and granting them advances against authorised securities. What eventually emerged was a 'half-way house' combining the functions of a commercial bank and a quasi-central bank. The bank was also the biggest tenderer at the Treasury bill auctions conducted by the Reserve Bank on behalf of the Government.
when the First Five Year Plan was launched.14 crores and Rs. The commercial banks of the country including the Imperial Bank of India had till then confined their operations to the urban sector and were not equipped to respond to the emergent needs of economic regeneration of the rural areas.72. The financial status and security inherited from its forerunners no doubt provided a firm and durable platform. the increases in some cases amounting to more than six-fold. the Imperial Bank had a capital base (including reserves) of Rs.94 crores respectively and a network of 172 branches and more than 200 sub offices extending all over the country.The Imperial Bank during the three and a half decades of its existence recorded an impressive growth in terms of offices. But the lofty traditions of banking which the Imperial Bank consistently maintained and the high standard of integrity it observed in its operations inspired confidence in its depositors that no other bank in India could perhaps then equal. deposits.275. reserves. to serve the economy in general . deposits and advances of Rs. Stamp of Imperial Bank of India When India attained freedom. investments and advances. the development of rural India was given the highest priority.85 crores. therefore. First Five Year Plan In 1951. All these enabled the Imperial Bank to acquire a pre-eminent position in the Indian banking industry and also secure a vital place in the country's economic life.11. In order.
enabling the State Bank of India to take over eight former State-associated banks as its subsidiaries (later named Associates). The concept of banking as mere repositories of the community's savings and lenders to creditworthy parties was soon to give way to the concept of purposeful banking subserving the growing and diversified financial needs of planned economic development. More than a quarter of the resources of the Indian banking system thus passed under the direct control of the State. . The State Bank of India was thus born with a new sense of social purpose aided by the 480 offices comprising branches. the All India Rural Credit Survey Committee recommended the creation of a state-partnered and state-sponsored bank by taking over the Imperial Bank of India. the State Bank of India (Subsidiary Banks) Act was passed in 1959. sub offices and three Local Head Offices inherited from the Imperial Bank. Later. and integrating with it. An act was accordingly passed in Parliament in May 1955 and the State Bank of India was constituted on 1 July 1955. the former state-owned or state-associate banks. The State Bank of India was destined to act as the pacesetter in this respect and lead the Indian banking system into the exciting field of national development.and the rural sector in particular.
TYPES OF LOANS OFFERED BY SBI PERSONAL LOANS: SBI SARAL PERSONAL LOANS HOUSING LOANS SHORT TERM LOANS HOUSING LOANS FOR NRIS EASY TRAVEL LOAN CAR LOAN EDUCATION LOAN SCHOLARS LOAN PROPERTY LOAN LOAN TO PENSIONER FESTIVAL LOANS MEDI PLUS SCHEME TEACHER PLUS SCHEME TRIBAL PLUS SCHEME POLICE PLUS LOANS AGAINST GOLD MORTGAGE LOAN BUSINESS LOANS: TRANSPORT PLUS SBI SHOPEE SWAROJGAR CREDIT CARD RICE MILL PLUS ARTISIAN CREDIT CARD AUTO LOAN PARYATAN PLUS EICHER MOTOR LTD DAL MILL PLUS SME PETRO CARD SMALL BUSINESS CREDIT CARD SME CREDIT PLUS CYBER PLUS DENTAL DOCTOR PLUS .
e.e.75% p.PERSONAL LOANS OFFERED BY SBI EDUCATION LOAN SCHEME SBI Student Loan Scheme Loan Amount Loans upto Rs. Rate of Interest 0. An Interest Rate concession of 0.50% below SBAR i.a.50 Lacs Loans above Rs. 11.00 Lacs and 1. upto Rs. 7.75% p. 4.e. 7.a.50% to Girl Student availing Student Loans SBI Scholar Loan Scheme Loan Amount Rate of Interest .50 Lacs At SBAR i.00% above SBAR i.a. 12. 4.25% p.00 Lacs Loans above Rs. 11.
Low interest rates. (any make or model) .Irrespective of Amount 1.50% below SBAR i. Well. one-time road tax and accessories (subject to conditions). Finance to include vehicle registration charges.25% p. An Interest Rate concession of 0. 10.50% to Girl Student availing Scholar Loans SBI EZEE CAR LOAN Move ahead in life with SBI Car Loans! If you have been putting off purchasing that Car. what are you waiting for? Just contact any of our branches (more than 6000) that offer Car Loans or our Personal Banking Branches and give wheels to your desire! You can apply for an SBI Car Loan to purchase : y y A new car. insurance. easy repayment options.a. jeep. Multi Utility Vehicle (MUV) or SUV (any make or model) A used car / jeep / MUV /SUV (not more than 5 years old).e. total transparency. we invite you to go through our Car Loan Scheme.
Enjoy the SBI Advantage : Excellent service and lower costs. A quick survey of similar schemes available elsewhere and you will find that SBI Car Loans for new and old vehicles offer you : y y y y y y Lowest interest rates Longer repayment period of upto 84 months. Always compare the Equated Monthly Instalments (EMIs) and the total payments you would be required to make and not the rates of interest. When you pay one instalment. No hidden costs or administrative charges. Finance for one-time road tax. jeep or Multi Utility Vehicles (MUVs) A used car / jeep (not more than 5 years old). Take over of existing loan from other Bank/Financial institution (Conditions apply) . When you pay interest on an annual reducing balance. thereby effectively reducing your loan amount. the interest is automatically calculated on the reduced balance thereafter. insurance premium and accessories No advance EMIs. the interest amount for the coming year is determined on the amount outstanding at the beginning of the year. (Any make or model). registration fee.(Some Banks/companies ask you to pay one or more EMIs at the time of disbursement of loan. The Scheme Purpose You can take finance for : A new car. You continue to pay interest even on the amounts you repay during the year.) Complete transparency : We levy interest on daily reducing balance method. as charged by many other companies/banks.
Eligibility To avail an SBI Car Loan. registration and insurance! No ceiling on the loan amount for new cars. you should be : y y y y y Individual between the age of 21-65 years of age. Public Sector Undertaking. Term Loan 2. Loan amount for used car is subject to a maximum limit of Rs. Private company or a reputed establishment or A Professionals or self-employed individual who is an income tax assessee or A Person engaged in agriculture and allied activities. 15 lacs.5 times the net annual income can be sanctioned. If married. your spouse's income could also be considered provided the spouse becomes a co-borrower in the loan. Salient Features Loan Amount There is no upper limit for the amount of a car loan. A Permanent employee of State / Central Government. Net Annual Income Rs. Type of Loan 1. A maximum loan amount of 2. The loan amount includes finance for one-time road tax.000/. 100.and above. Overdraft Documents Required You would need to submit the following documents along with the completed application form if you are an existing SBI account holder: .
5. Returns/Form 16: 2 years for salaried employees and 3 years for professional/self-employed/businessmen duly accepted by the ITO wherever applicable to be submitted. Processing Fee 0. 3. Repayment period: For Salaried: Maximum of 84 months For Self-employed & Professionals: Maximum 60 months Repayment period for used vehicles :Up to 84 months from the date of original purchase of the vehicle (subject to maximum tenure as above). Prepayment Penalty: Prepayment fee of 2% of the amount of the loan prepaid will be levied subject to certain conditions. Proof of official address for non-salaried individuals. Margin New / Used vehicles : 15% of the on the road price. If you are not an account holder with SBI you would also need to furnish documents that establish your identity and give proof of residence. A copy of passport /voters ID card/PAN card. 1. Repayment You enjoy the longest repayment period in the industry with us. Latest salary-slip showing all deductions I.T. 8. 2 passport size photographs of borrower(s). Proof of residence. 500/- . 2.50% of Loan amount and to be paid upfront. 4. Minimum: Rs. Signature identification from bankers of borrower(s).Statement of Bank account of the borrower for last 12 months. 7. 6.
but would rather not sell it? Then why not avail of this ALL PURPOSE LOAN from SBI? SBI now makes it very much possible for you to only keep your property but also have liquid funds. Enjoy the SBI Advantage Complete transparency in operations Access this loan from our wide network of branches Interest rates are levied on a monthly/daily reducing balance method Lowest processing charges. want to take your family to a well-deserved holiday or for a sudden medical emergency? you have some property. Long repayment period of 60 months.Maximum Rs. upto 120 months for salaried individuals with check-off facility No Hidden costs or administrative charges. No prepayment penalties.000 25% of Processing fee will be ratained if application is rejected after pre-sanction survey. 10. . Security As per bank's extant instruction PROPERTY LOAN A dream come true! An ALL PURPOSE LOAN for anything that life throws up at you!! Do you need funds for a Marriage ceremony. You can have surplus funds at any time thereby conveniently reducing your loan liability and interest burden.
The amount is decided by the following calculation: y y 24 times the net monthly income of salaried persons (Net of all deductions including TDS) OR 2 times the net annual income of others (income as per latest IT return less taxes payable) . Your Net Monthly Income (salaried) is in excess of Rs. self-employed or an income tax assesse or c. An individual who is.50. a.or Net Annual Income (others) is in excess of Rs.. A Professional.e. B. i.12.00 lacs and above then purpose of loan will have to be specified alongwith an undertaking that loan will not be used for any speculative purpose whatever including speculation on real estate and equity shares.25. Purpose This is an all purpose loan. We offer you these loans at all our Personal Banking Branches and those branches having Personal Banking Divisions amongst others.000/Maximum : Rs.1 crore.000/.25. Salient Features Loan Amount Minimum : Rs.000/-. The income of the spouse may be added if he/she is a co-borrower or a guarantor. Maximum age limit: 60 years. C. Eligibility You are eligible if you are: A. An Employee or b.1. Engaged in agricultural and allied activities.Property Loan Scheme Avail of an All-Purpose loan against mortgage of any of your property.If amount of loan is Rs. the loan can be obtained for any purpose whatsoever.
upto 120 months for salaried individuals with check-off facility.25% above SBAR i. 1.00. .1. You could opt to divert any surplus funds towards prepayment of the loan without attracting any penalty.000/Rate of Interest At SBAR i. MORTGAGE OF PROPERTY a) Loan against Gold Ornaments Size of Credit Limit Upto Rs.75% p. Security As per banks extant instructions.25% p.f. Interest Term Loan 1.13.13.e. LOANS AGAINST GOLD ORNAMENTS.Margin We will finance upto 60% of the market value of your property.e.01. In other cases 1. Floating for loans upto Rs.00 crore. 11.a. 01.a. i.00% above SBAR. Floating (w.e.e.50% p.2009) Rep ayment Maximum of 60 equated monthly instalments.a.
13.00.000/- 0. 1.00. 1.00.e.a.000/- *No Overdraft against Mortgage of Property . Above Rs.25% p. b) Loan against Mortgage of Immovable Property Size of Credit Limit (Term Loan) Upto Rs. 12.00% p. 1.e.00.a.e.000/Rate of Interest 1.00 above SBAR i.50 above SBAR i.a.00.25 above SBAR i. 1.75% p. 12.Above Rs.
Full time Executive Management Courses like PGPX (for IIMs) are also covered Salient Features .SCHOLAR LOANS Education Loans to students securing admissions in: y y y y The country¶s best engineering colleges The nation¶s elite medical colleges India¶s top B-Schools India¶s best Law colleges & other reputed institutes Eligibility A term loan granted to Indian Nationals for pursuing higher education in India in selected institutions Courses Covered Regular full time Degree /Diploma Courses and not certificate/ part-time courses through entrance test/ selection process.
e. Loan amount Maximum loan amount upto Rs.a.15 lacs (Loan amount varies with the institute. . Expenses covered y y y y y y y Fees payable to college/school/hostel Examination/ Library/ Laboratory fees Purchase of books/equipments/instruments Travel expenses/expenses on exchange programme Purchase of computer/laptop Caution deposit / building fund/ refundable deposit supported by Institution bills/ receipts [not to exceed 10% of the tuition fees for the entire course]. Any other expenses related to education Interest Rate (w.f.2009) Loan Amount Irrespective of Amount Rate of Interest 1.06.y y y y Loan at Campus/ Designated Branch Option to transfer loan account to a branch closer to the place of coborrower (after the course completion) ATM-cum-Debit card and Internet Banking facility Second Education Loan for further higher studies provided the institution and fees fall within criteria.e. 29. 10.50% below SBAR i.25% p.
Parental co-obligation can also be substituted by a suitable third party guarantee Margin y y Nil upto Rs.4 lacs Documentation Required y y y y y y y y Letter of admission Completely filled registration form 2 passport size photographs Proof of identity (driving licence/passport/PAN/any photo identity) Proof of residence (driving licence/passport/electricity bill/phone bill) Statement of expenses Student/Co-borrower/ guarantor¶s bank account statement for last 6 months IT return/ IT assessment order.4 lacs 5% above Rs. of last 2 years .50% to Girl Student availing Scholar Loans Repayment y y Moratorium upto course duration plus six months Flexible repayment period upto 7 years. Security y y No collateral security.An Interest Rate concession of 0. Parent/ Guardian as co-borrower.
No prepayment penalties.compare with 1-3% of others.which means minimal documentation«something that you had always wanted. Further.. only 1% of loan amount .e. No security required . we charge interest on a daily reducing balance!! Lowest processing charges. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan. THE SCHEME The Tribal Plus is a special to provide housing finance for Hill/Tribal areas without mortgage of land. Patna and Bhubaneswar. Loans will be granted to individuals to: .y y Brief statement of assets & liabilities of the co-borrower Proof of income (i. No hidden costs or administrative charges. Bhopal. Enjoy the SBI advantage : y y y y y Lowest interest rates. salary slips/ Form 16) TRIBAL-PLUS SCHEME The scheme is a special Housing finance scheme for Hill/ Tribal areas of North East India and areas around Chandigarh. Lucknow.
0 lacs. This scheme is open to tribals hailing from the hill states of North East India and areas around Chandigarh. under noted documents or papers will also be obtained: Affidavit sworn by the applicant that he/she is the owner of the plot of land. they can still avail of the scheme for a housing loan to be used at their native village! Salient Features Loan Amount The maximum loan amount will be calculated on the basis of 24 times the net monthly income (NMI) of the applicant subject to a maximum of Rs. . Lucknow. Post-dated cheques representing monthly installments may also be taken till the loan is liquidated. Check-off facility should be available. Documents Required In addition to the usual documents. They can avail this scheme from SBI branches in these areas. Patna. Purchase an existing house or flat (old) that is not more than 10 years old. Bhopal. Repair or extend or renovate an existing house or flat.y y y Purchase or construct a new house or flat. If they are not currently living in these areas. The income of the spouse can also be considered for this purpose provided he/she is a permanent employee of Government / PSU / Private Sector unit and is willing to guarantee the loan. and Bhubaneswar. Eligibility y y y y Individual(s) over 21 years of age (but not more than 60 years) who are permanent employees of Central or State Government or Public Sector undertakings (PSU) or reputed private sector units and have put in a minimum of 5 years service as Class I or Gazetted Officers or 10 years for other grades.5.
The repayment period will include the moratorium or repayment holiday. covering the construction period or 12 months from disbursement of the first instalment of the loan. As with all our schemes there is no prepayment penalty whatsoever! Security As per bank's extant instructions. Processing Fee 0. an agreement to mortgage the land may also be required.In specific cases. However. in case of outright purchase of house. whichever is earlier. there could be a one-time disbursement of the loan amount. Repayment Schedule The loan is to be repaid over a period of 10 years through Equated Monthly Installments. at the option of the beneficiary.25% of the loan amount. Disbursement Disbursements will be made in a phased manner in tune with the actual progress in the construction. Margin A minimum margin of 25% is envisaged. TEACHERS-PLUS SCHEME .
" ~ William Arthur Ward Enjoy the SBI advantage : y y y y y y Concessions in margin amounts. The superior teacher demonstrates. . processing charges and margin amounts in the following schemes : y y y y Personal Loan Car Loan Festival Loan Housing Loan Eligibility This scheme is open for all teachers placed under State and Central Governments as also under the deemed universities. Through Teacher Plus. Further.compare with 1-3% of others. only 1% of loan amount . Flexible repayment period. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan. No prepayment penalties."The mediocre teacher tells. The good teacher explains.. No hidden costs or administrative charges. we charge interest on a daily reducing balance!! Lowest processing charges. The Scheme SBI recognizes the special position sanctioned for teachers in our society and is proud to introduce Teacher Plus . interest rates and processing charges!! Lowest interest rates.a special scheme for teachers placed under State and Central Governments as also under the deemed universities. you can avail of concessions in the rates of interest. The great teacher inspires.
be it a sudden vacation that you plan with your family or urgent funds required for medical treatment? SBI Saral . SBI SARAL PERSONAL LOAN Do you want funds readily available to you whenever you desire or need. The Scheme Purpose The loan will be granted for any legitimate purpose whatsoever (e. such as marriage of son/daughter. Further. Festival loan and Housing loan schemes. expenses for domestic or foreign travel. Access this facility from over 3000 branches across the country and confidently face the challenge of meeting any kind of personal expenses!! Enjoy the SBI Advantage : Low interest rates. meeting any financial liability. No security required ««which means minimal documentation«something that you had always wanted. we charge interest on a daily reducing balance!! Low processing charges. No prepayment penalties. only 2%-3% of loan amount No hidden costs or administrative charges. defraying educational expenses of wards. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan (1% of the loan amount will be charged if you repay the loan before 6 months) Long repayment period of up to 48 months. Car loan.g.Personal Loan is the answer to your questions.) . medical treatment of self or a family member.Documents Required As applicable to Personal loan. meeting margins for purchase of assets etc.
10.000/.10 lacs in all centres Documents Required Important documents to be furnished while opening a Personal Loan Account: For existing bank customers Passport size photograph From salaried individuals Latest salary slip and Form 16 .in metro and urban centres Rs. chartered accountant. self employed engineer. Salient Features Loan Amount Your personal loan limit would be determined by your income and repayment capacity.24. doctor. architect.Eligibility You are eligible if you are a Salaried individual of good quality corporate.000/.in rural/semi-urban centres Maximum : 12 times Net Monthly Income for salaried individuals and pensioners subject to a ceiling of Rs. MBA with minimum 2 years standing. Minimum : Rs.
SAINIK-PLUS SCHEME "They give their lives so that others might live " Loans under Sainik Plus may now be covered under Prashasan Plus. Security NIL Processing Fee Processing charges are 2-3% of the loan amount. Processing fees have to be paid upfront. This is available for all Non Commissioned Officers (NCOs) and Jawans of Indian Army . This is amongst the lowest fees in the industry. There are no hidden costs or other administrative charges. You are allowed to pay more than the EMI if you wish to. Enjoy the SBI advantage : y Concessions in margin amounts. Repayment The loan is repayable in 48 EMI. SBI is proud to offer Sainik Plus with special discounts on processing fees. interest rates and processing charges!! . without attracting any prepayment penalty.Margin We do not insist on any margin amount. For all those who are ready to lay down their lives for their motherland. interest rates and margin amounts on various finance schemes.
y y y y y Lowest interest rates.. you can avail of concessions in the rates of interest. No prepayment penalties. Further. we charge interest on a daily reducing balance!! Lowest processing charges.you will need to submit the following : y y y y Certificate from the CO confirming your salary and identity. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan. Undertaking from the CO to remit your salary every month with SBI. only 1% of loan amount . No hidden costs or administrative charges. In case your unit is subject to frequent movement/transfer. Photocopy of your identity card along with the loan documents.compare with 1-3% of others. The Scheme Through Sainik Plus. Documents Required To avail of loans under the Sainik Plus scheme . Flexible repayment period. processing charges and margin amounts in the following schemes : y y y Personal Loan Festival Loan Housing Loan Eligibility This scheme is open for all NCOs and Jawans of the Indian Army. a third person guarantee either from a person in the same unit or one of their relatives residing at that place. .
these liquid funds also need to be generated at a very short notice.. only 1% of loan amount -(compare with 1-3% of others. Reduce your interest burden and optimally utilize your surplus funds by prepaying the loan. No prepayment penalties. not only do the cost implications run into several lakhs of rupees.MEDI-PLUS SCHEME For spreading smiles and cheers on the faces of our customers«. You may avail of loans under the Medi Plus Scheme to cover the cost of treatments such as: y y y y y y Corneal Implant Orthodontic Treatment (fixed tooth implant) Ilazirav Technique of lengthening a limb Congenital heart surgery Angioplasty Heart Valve Replacement Surgery .a scheme that we call Medi Plus! Enjoy the SBI advantage : y y y y y y Concessions in margin amounts. Medi Plus is specially designed to make life simpler for you under what could well be trying circumstances. we charge interest on a daily reducing balance!! Lowest processing charges. but more often than not. interest rates and processing charges!! Lowest interest rates. Further. in order to be able to make prompt hospital bill payments« With this in mind. we've launched a new loan scheme keeping specialized medical treatments in mind . The Scheme The Specialised Medical Treatments. Flexible repayment period.) No hidden costs or administrative charges.
cochlear implants(surgical) for the hearing impaired etc. Loan Amount The loan amounts range from a minimum of Rs. if you are: y y y y y An employee of the Government/ a reputed PSU/ a profit making public limited company.to a maximum of 12 months NMI (when it concerns salaried individuals and pensioners) or a 1 year net .g. coronary by-pass.50. the loan may be granted to a parent.000/. 3 lakhs per annum. 10 years of service A self-employed professional A pensioner. Hip and Knee replacement surgery. who has taken voluntary retirement and is not yet 60 years old An agent of Insurance/ KVP/ Mutual Funds etc.y y y y y y y y y GIFT (in-vitro technique for child bearing) Serious Accidents and Multiple Injuries Surgery Hip and Knee Replacement Surgery Coronary Artery Bypass/ Graft Surgery Cochlear Implants (surgical) for the hearing impaired Onco-Surgery upto Grade I Reconstructive Nose Surgery with Face Lifting Penile Implant Surgery Artificial Limb Prosthesis Purpose Loan for individuals to avail specialised expensive medical treatment e.10. Eligibility You qualify to avail of loans under this scheme.3 lakh An employee/ a pensioner with a minimum income of Rs. and if you have a minimum. a minimum income of Rs.000 per month or if you are a neither. with a minimum annual income of Rs. Note : If the person being treated is a minor.
0 lac Once sanctioned.2.annual income (when it comes to persons other than salaried individuals and pensioners). Margin 20% of the total cost of treatment.1. subject.01.75% above SBAR i.e. (w. Security As per bank's extant instructions.a.60 Equated Monthly Installments.the loan is disbursed by the issuance of a draft/ banker's cheque. . where the treatment is being undertaken or where it's proposed to be undertaken.0 lacs For Pensioners and Agents : Rs. to the following ceilings: y y For Employees and Professionals : Rs. Documentation Please contact the Bank for details. 01.2009) Processing Fee (One time) 0.00% p.f.13. Repayment Period You may comfortably repay your loan over a maximum .e.50% of the loan amount. favouring the hospital. Interest 0.
List of Diseases y y y y y y y y y y y y y y y y y Corneal implant Orthodontic treatment . If the applicant already maintain a regular Housing Loan Account with us the processing fee is waived.fixed tooth implant Ilazirav technique of lengthening a limb Angioplasty Congenital heart surgery Heart Valve replacement surgery GIFT .In-vitro technique for child bearing Serious accidents and multiple injuries surgery Coronary artery bypass graft surgery Hip and knee replacement surgery Cochlear implants (surgical) for the hearing impaired Onco .50% of the entire loan amount. having "P" divisions All SBI Personal Banking Branches Processing Fee : 0. The Medi Plus Scheme is being offered at: y y y All computerized SBI branches in identified cities All SBI branches.Authorised branches We are pleased to inform you that currently.surgery upto Grade I Reconstructive nose surgery with facelifting Penile implant surgery Artificial limb prosthesis Laser assisted hatching Intra Cylasmic sperms injection LOAN FOR EARNEST MONEY DEPOSIT . in metro/ urban centers.
Eligibility §Minimum age 21 years as on the date of sanction.This product addresses the financial requirements towards Earnest Money Deposit to book residential plots/ built-up houses/ flats being sold by Govt.000. subject to the following: o One person can be financed only for one application at any point of time .100. Urban Development Authorities like PUDA. §Option to repay this loan from the proceeds of Housing Loan availed from SBI §Interest applied on daily diminishing basis. Maximum Loan Amount §Rs. HUDA and Housing Boards. or §10 times Net Monthly Income of the applicant whichever is the least. Housing Agencies. §90% of application money. §Steady source of income. Scheme highlights §Easy availability of loan with minimum documentation. §No administrative charges or application fee.
incomes of all the applicants may be taken into account Security §Third party guarantee good for the loan amount.25% p.e. (w. §Tangible security clause waiver considered in respect of permanent employees of reputed public/ private sector organisations.01. §No penalty for prepayment. 01.a.e.f. covering atleast 50% of the loan amount. Repayment §In case of unsuccessful applicants ± on receipt of refund from the Housing Board/ Urban Development Authority. where check-off is available.o In case of applications in more than one name. §In case of successful applicants ± lump sum repayment of the loan out of Housing Loan availed from us for purchase of house allotted to you or for construction of house on the plot allotted. 13. §Tangible security in the form of NSCs/ IVPs/ TDRs/ LIC policy/ SBI Life policy etc. Rate of Interest 1% above SBAR i.2009) Processing Fee .
Documents §Letter of allotment from the concerned Housing Agency.0. Urban Development Authority or Housing Board §Photograph §Proof of Identity* -Voters¶ I-card/ Passport/ Driving License/ PAN Card etc.5% of the loan amount (minimum Rs.100/-) Disbursement The loan would be disbursed by issuance of draft/ banker¶s cheque favouring the concerned Government Agency. §Proof of residence* -Passport/ Driving License/ PAN Card/ Ration Card -Any other satisfactory proof of residence §Proof of Income *not required if the applicant is maintaining an account with us BUSINESS LOANS OFFERED BY SBI .
selected and trained by N-Logue.Minimum Plus two Age between 20 and 45 years Should possess basic computer knowledge.CYBER PLUS Eligibility Individual entrepreneurs The kiosk operator should be a local person Educational qualification . The operator will be interviewed. Purpose To set up internet/cyber cafes especially at rural and semi-urban centers with potential for such a facility Nature of facility Composite loan Margin Rs. 9000 Tenure of Loan 36 to 40 monthly installments excluding the 3 months of moratorium period .
To finance qualified dentists For buying equipment Any other activities related to Dental profession Nature of facility .Co/Trust Promoters should have minimum BDS and should be registered practitioners.Primary security Security for assets purchased from bank finance Collateral security NIL DENTAL DOCTOR PLUS Eligibility Individuals/Partnership firms/Ltd. Purpose To boost the financing to Dental equipment under tie-up arrangement.
000 and up to Rs. 25. 5 Lakhs ± 10% Over Rs.Term loan Margin Up to Rs. 25.10 Lakhs . 5 Lakhs and up to Rs. 10 lakhs ± 20% Tenure of Loan Maximum period of 5 to 10 years with maximum moratorium period of 6 months For construction purposes the moratorium period is 12 months (can be relaxed upto 24 months at the discretion of an authority one level higher than the sanctioning authority) Primary security Hypothecation of assets financed by the Bank Collateral security NIL Loan amount Maximum of Rs.000 ± NIL Over Rs.
. Nature of facility Term loan (MTL). Purpose Purchase of new/old shops/establishments/offices. Modernization/expansion of establishments/shops. All furniture/fixtures.SBI SHOPPE Eligibility Eligibility Any of the following are eligble: Individuals Firms Partnership Firms Trusts Franchises. etc. electrical fittings and other accessories required for shops/showrooms/offices.
SME CREDIT PLUS Eligibility The unit should be enjoying a good track record (standard assets for at least two years) Units with CRA rating of SB4 and above Purpose .Margin 25% 40% in respect of purchase of old property Loan amount Maximum of Rs 20 lakhs. Rate of Interest As applicable to SIBTLs below Rs 25lakhs. Primary security Hypothecation/ pledge/ mortgage/ assignment of property purchased out of bank's finances including non-industrial assets.
Nature of facility Clean Cash credit Margin NIL Tenure of Loan Each amount with drawn should be repaid within 2 months There should be a gap of 15 days between the last date of repayment of outstanding and for the next withdrawal Primary security NIL Collateral security Existing collateral to be extended to cover this limit and additional collateral to be obtained only if considered necessary by the sanctioning authority .For meeting bulk orders Repairs to machinery Tax payments Any other contingency The idea behind the product designed is to meet the unforeseen and sudden expenditure of SMEs.
Eligibility . Educational institutions with adequate source of income Educational institutions run by trusts, private management Institutions should have necessary approval from the Government agencies to run the school Building construction/alteration/renovation should have a proper approval from local bodies The promoters/Trustees/key persons of the school should be persons of good standing in the society. Purpose Construction of new buildings, repair and renovation of old building Purchase of electronic & lab equipment, books, manuals, furniture & fixture, etc.
Nature of facility Term loan with fixed repayment schedule based on repayment capacity and income streams
Margin 15% of the project cost Tenure of Loan Loan amount up to Rs. 2 lakhs - Repayable in 36 equated monthly installments Loan amount from 2 lakhs to 5 lakhs ± Repayable in 60 equated monthly installments Loan amount above 5 lakhs ± Repayable in 84 monthly installments
Primary security Hypothecation of the charge over assets acquired out of bank finance. Collateral security Personal guarantee of the Key Manager/Trustees/Promoters/any other persons/body acceptable to the bank Equitable Mortgage of the land and building of the school or of the guarantor (depending on the availability) For loans over 2 lakhs equitable mortgage over the other immovable assets of the institution (depending on the availability)
Eligibility Individuals (proprietorships), partnership firms, Corporates and trusts Purpose Construction/Renovation/ Modernization/Expansion of hotels, rest houses, Yatri Niwas Construction of office premises, purchase of office equipment and computers by travel agents/ tour operators. Purchase of vehicles (Luxury buses, Coaches, Cars, Vans)at tourist sites Purchase of house boats and luxury boats Setting up of restaurants/ coffee houses/ ice-cream parlours/ fast food centres, amusement parks/rope ways, health clubs/ spas, etc.
Nature of facility Cash Credit (Hypothecation) for Working Capital Term Loan Letter of Credit/ Guarantee
Margin 20%, and 40% for purchase of old vehicles of less than 5 years Tenure of Loan Cash Credit repayable on demand
Term Loan 3 to 7 years including start up period of not exceeding 18 months Primary security Hypothecation of Assets financed by the bank Collateral security Tangible collateral in the form of immovable property. LIC policies etc equivalent to 50% of the total loan amount may be obtained. KVPs. . TDRs. NSCs.