CONTENTS

Page No.
Chapter~1
I. A BRIEF INTRODUCTION ABOUT COMPANY~~~~~~~~~~~~~~~~ 3
II. OBJECTIVE OF THE STUDY~~~~~~~~~~~~~~~~~~~~~ ~~~~~~~ ~ 4
III SUMMERY OF THE PROJECT~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 5
IV RESEARCH DESIGN / METHODOLOGY~~~~~~~~~~~~~~~~~~~~~ 6
V REVIEW OF LITERATURE~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 10
Chapter~2
I LOAN AVENUES: AN OVERVIEW~~~~~~~~~~~~~~~~~~~~~~~~~ 12
II List of Table and Illustration~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 2
III ABBREVIATIONS ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 28
Chapter~3
PRODUCT AND POLICY
I) MORTGAGE- HL LAP LRD NRI RML~~~~~~~~~~~~~ 30
II) AUTO LOAN~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 45
III) PERSONAL LOAN~~~~~~~~~~~~~~~~~~~~~~~~~~ 58
IV) LOAN AGAINST MUTUAL FUNDS~~~~~~~~~~~~~~~ 64
V) LOAN AGAINST SHARES~~~~~~~~~~~~~~~~~~~~~ 65

Chapter~4
LOAN PROCESS
I. CROSS SELL PROCESS~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 71
II. LOAN PRE-SANCTION PROCESS~~~~~~~~~~~~~~~~~~~~~~~ 73
III. OPPS PROCESS FLOW~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 75
IV. Dos & Don’ts in AOPS~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 77
Chapter~5
I. CONTACT CENTRE~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 78
II. SCOPE OF ACTIVITY~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 79
III. CENTERLISED MONOTORING~~~~~~~~~~~~~~~~~~~~~~~~~ 82
Chapter~6
I. COLLECTION POLICY~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
83
II. ANNUAL FINANCIAL RESULTS~~~~~~~~~~~~~~~~~~~~~~~~
87
Chapter~7
I FINDINGS AND SUGGESTIONS~~~~~~~~~~~~~~~~~~~~~~~~ 90
II LIMITATIONS~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 91
III QUESTIONNARIES ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 92
IV CONCLUSION~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 95
IV REFERENCES~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 96
V GLOSSARY~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 97-99

LIST OF TABLE AND ILLUSTRATIONS

TABLE-1 Product and interest rate (page—23)

TABLE -2: Distribution of Govt. Employees and self employed by

demography (page—23)

TABLE -3: Loan Amortization mode (page—24)

TABLE -4: Different Age group of respondent (page—26)

TABLE -5: Profession of respondent regarding personal loan (page-26)

TABLE -6: Profession of respondent regarding home loan (page—27)

TABLE -7: Annual income-Salaried page—28)

TABLE-8: Annual income-Self employed (page—28)

TABLE-9: Delay payment of loan EMI (page—29)

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 A BRIEF ABOUT COMPANY

Axis Bank was the first of the new private banks to have begun
operations in 1994, after the Government of India allowed new
private banks to be established. The Bank was promoted jointly
by the Administrator of the specified undertaking of the Unit
Trust of India (UTI - I), Life Insurance Corporation of India (LIC)
and General Insurance Corporation of India (GIC) and other
four PSU insurance companies, i.e. National Insurance
Company Ltd., The New India Assurance Company Ltd., The
Oriental Insurance Company Ltd. and United India Insurance
Company Ltd.

The Bank today is capitalized to the extent of Rs. 405.17 crores

with the public holding (other than promoters and GDRs) at
53.09%.

The Bank's Registered Office is at Ahmedabad and its Central

Office is located at Mumbai. The Bank has a very wide network
of more than 1000 branches and Extension Counters (as on
31st March 2018). The Bank has a network of over 4055 ATMs
(as on 31st March 2018) providing 24 hrs a day banking
convenience to its customers. This is one of the largest ATM
networks in the country.

The Bank has strengths in both retail and corporate banking

and is committed to adopting the best industry practices
internationally in order to achieve excellence.

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 OBJECTIVE OF THE STUDY

• Service Guarantee

• Login to Sanction

• Sanction to Disbursement

• Post Disbursement Queries

• Customer Sourcing to Sanction

•Need to move to system based processing

• Enables faster decisions

• Capture maximum data of the customer online

• Helps keep track of TAT

• Key Focus Areas

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 SUMMARY OF THE PROJECT

This research intends to investigate the relationships of service

quality with customer satisfaction , customer loyalty and
solvency of Axis Bank. It is a correlation study which measures
the correlation between customer satisfaction __customer
loyalty and customer profitability_customer solvancy.The
sample for this study is 100 Axis Bank RAC (Retail Asset
Center)customer, on which I interact with 70 personal loan
user customer, whom I visited in the Axis Bank.Then I
distributed my own prepared questionnaires. During this study
I found that interest rate on personal loans are mush higher for
this the bank does not have anything to sell off and reclaim
the loan in case a borrower defaults. Hence defaults tends to
be more common in case of Personal loan. In a Home loan , if
the borrower defaults, the bank can sell the house and claim its
portion of the funds. In case of a Car loan, Car can be
recovered and sold.I also found some customer have 3 or 4
overdue till now. After collecting these data I will analyzed by
using the statistical tools such as regression analysis and
correlation analysis. I will also be find out EMI(equitable
monthly installment),loan Amortisation model, and Solvency
index.

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 RESEARCH DESIGN / METHODOLOGY

This study follows the Quasi Experimental method that

characterizes the servey(field) procedure.This is because the
poinions of individual Axis Bank customers are sought, and
utilized as basis for analusis ans conclution. The work utilizes
the questionnaire as the vital reserch instrument. The
questionnaire contains questions that cover the major research
thrusts of the study.Some questions are open-ended while
others are multiple –choice. The Likert procedure qas utilized
where applicable for relevant questions.

SAMPLE DESIGN
A part of the population is known as sample. The process of
drawingf a sample from a large population is called the
sampling.The sample design is formulated in siliguri. The
idea is to targtet prospective customers, therfore considerable
stress has been given on aurveying the people residing and
working arround the bank, so that the prospective sustomers
of the branch can be identified(along with the servey) and
tapped.

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SAMPLE SIZE
The sample size of the emperical investigation is 100.

SAMPLING TECHNIQUE
There are several method of sampling.
The methods are follow-----

1. Observation method

2. Questionaries method

3. Statistical tools

i. Frequency distribution

ii. mean

iii. median

iv. mode

iv. standard deviation

v. percentage

vi. correlation analysis.

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4.Loan amortisation Schedule
5.Calcutalating EMI(equitable monthly installment)
6.Solvency Index

SOURCES OF DATA

Sources of data can be of two types they

are…………..

1.Primary data

2.Secondary data

PRIMARY DATA

Primary data is collected directly from respondents

using data collection methos like servey intervview,
questionaries, measurements, direct observation.The
collection of primary data for business research is
important to assist management in decision-making.

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 SECONDARY DATA

Secondary data is the data that already exist which has

been collected by some other person or
organization.Sources of secondary data including
websites,Journals,books.

Sampling Plan:

The study is based on primary data. Till date I am

collecting sampling data through open and close ended
questionnaire with five point rating scale: 5= Strongly
Agree, 4= Agree, 3=Neutral, 2=Disagree, 1=Strongly
Disagree.

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 REVIEW OF LITERATURE

Axis Bank is the third-largest private sector bank in India in

terms of asset size, with a balance sheet of INR 1.21 tn. It has
a network of 729 branches and extension countersacross the
country.The bank earns substantial fee income from
transaction and merchant banking activities.The key promoter
UTI-I (special undertaking) holds 27.5%, LIC holds 10.4%, and
the rest is
widely held by FIIs and public. Change in management may
affect the pace of growth and profitability.
Execution risk of its retail and international businesses is the
key risk of Axis Bank. The risk management function acts
as the gatekeeper, drawing the line on acceptable levels of
risk - risk appetite - by setting cut-offs. This is wearing a
marginal hat: the cutoff is the margin. For standard retail
products it may conveniently be set in terms of PD, although
more completely it would be an expected loss calculation. To
caricature this risk manager, he doesn’t mind how profitable the
applicants are, as long as they are just above the cut-off.The
business will be looking at the overall profitability of the
product/campaign/portfolio whatever. The business manager is
more likely to phrase his risk appetite targets in terms of
average PD. To caricature the business manager, he doesn’t
mind if a number of poor decisions are made around the
margins as long as the venture as a whole makes a good

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return.Business situation in the credit market concerns
financial agreements where the creditor evaluate the potential
of fulfilled liabilities. The evaluation process concerns the
business and financial conditions with the objective to
estimate the credit risk or the credit worthiness of the applicant
in order to make a seccessful businesss decisions.Internal
information such as historical business records and other
business considerations such as approval rate and bad rate
should be included if avail able in order to perform a
comprehensive evaluation .The credit applicant could be
consumer or company related such as mortgage loan ,home
loan, personal loan, car loan.

So is the setting of risk appetite about trying to decline

applicants below a certain marginal PD, or is it about trying to
achieve a certain average PD for the accepts? 

Complicating the discussion is the role played by

volume. Higher cut-offs naturally mean lower volumes of
successful applicants and this frustrates the assumptions on
the business case.

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 LOAN AVENUES: AN OVERVIEW

LOAN POLICY : Bank are business institutions with the

undoubted objective of earning profits. In the regard, the loan
portfolio is the one that holds all the aces. Banks wish to
sustain their earnings, by considerint the extent of importance
attached to loan portfolio. As a result banks charting out a
loan policy is all the more challenging in view of the need to
work out a trade- off between banks priorities like profitability,
liquidity, volume of business and risk levels against the
requirements ato adhere to regulations.

LOAN PRICING : The objectives of loan pricing

1.Maintain Fixed vs. Floating rate pricing.

2.Maintain market influence on loan pricing.

3.Balance risk – reward profile and ensure market rate.

Axis Bank needs to arrive at the appropriate loan price

depending on the operational environment of both the bank
and the customer. This involves performing the customer
profitability analysis.

CUSTOMER PROFITABILITY ANALYSIS: Banks usually have

a rich repository of customer information which, if utilized
appropriately, can be very predictive of future customer
behavior. Using advanced statistical analysis, tools may be
developed that will allow multiple variables to be used for

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decision making. Specifically, to address the shortcomings of
the matrix approach, banks should make individual risk
adjustments at the customer account level within their customer
profitability models.

The logic for making such an adjustment is no different than

that which has been driving improvements in customer
profitability measurement in recent years. Just as banks have
diligently measured other elements of the profitability equation
at the customer account level (e.g., cost of funds, account fees,
transaction costs, etc.), they should now focus on attributing
risk at the individual level. Below are the steps required to
develop a risk-adjusted customer profitability model.

1. Identify significant predictive variables. In addition to

credit bureau and behavior scores, banks have a wealth
of customer data that can be used to increase the
accuracy with which they estimate the likelihood that their
customers will default on their credit obligations.
Advanced multivariate regression techniques can easily
identify the most significant variables from the vast
number of predictor variables available on the customer
databases. The dependent variable is credit default and
potential independent variables come from the bank’s
entire repository of customer data, including account
information (balance, time on books, other products
held), behavioral data (payment history, credit utilization),
and available demographic and psychographic data.
Regression analysis will identify those variables that have
the power to explain the probability of credit default. Most
banks will be surprised to discover the predictive power
of the data residing in their own customer information
files.

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2. Build probability of charge-off model (scorecard). After
identifying the variables most predictive of customer default,
the next step is to build a probability of charge-off model -- or
scorecard. The scorecard uses the predictive variables, along
with historical customer charge-off data, to arrive at a
probability of charge-off for every customer. Specifically, the
model is developed using statistical software tools to query the
customer information file with data for the past 12 or 24
months. The query returns the average incidence of default for
every combination of the predictive variables. Visually, the
model would appear as a multidimensional object with each cell
representing the probability of charge-off for customers
possessing particular characteristics represented by the
predictive variables. For example, a customer with a home
equity line of credit, who has been on the books for 14 months,
who frequently draws the line to its limit, and who also has a
checking account at the bank, may have a 1.17 percent
probability of charge-off over the next 12- or 24-month period.

3. Incorporate risk adjustment. After developing the scorecard,

the charge-off probabilities should be incorporated into the
customer profitability calculation by applying a probability of
charge-off to each customer account. The mechanics of this
step are generally the same for most profitability metrics,
including customer contribution, net income after capital charge
(NIACC), or lifetime value. Essentially, the risk adjustment is
carried out by substituting an account level loan loss provision
and an account level capital charge for the their product level
counterparts in the existing profitability calculation.

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For customer Jane Doe, account level loan loss provision is
equal to Jane’s probability of charge-off multiplied by the
outstanding balance on her loan (or the dollar limit on a
revolving credit product) minus the expected recovery for
secured products. For example, if Jane has a probability of
charge-off equal to 3.39 percent, an outstanding loan balance
of $7,555, and an expected recovery rate of 80 percent, her
account level loan loss provision is equal to $51.22 ( [$7,555 x
3.39%] x [1-80%] ), or $4.27 on a monthly basis. This amount
replaces the product-driven loan loss provision in most
profitability models.

To derive the account level capital charge, each customer must

be assigned a risk factor, which is also derived from the
probability of charge-off model. The risk factor is calculated by
dividing the customer’s account level loan loss provision by the
total outstanding balances (less expected recovery) for that
product. The resulting risk factor represents the percentage of
total risk for that product represented by each customer. Next,
account level capital charge is derived by multiplying the risk
factor by the total capital allocated to that product.

It is important to note that although this process may seem like

a substantial undertaking, it is likely that other departments
within the bank are probably already performing some of these
steps for other functions. For example, during the loan approval
process, most banks use scorecards akin to the probability of
charge-off model described above. Similarly, the bank often
analyzes the existing customer base for risk management
purposes. Therefore, adding a customer level risk adjustment
to the existing customer profitability model may simply involve
leveraging existing techniques in other parts of the bank.

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It is also important to note that there are several critical
prerequisites for successfully implementing a risk adjusted
profitability model. These include:

 Mastering the basics. Guarantee that the fundamentals of

profitability analysis, such as activity-based costing, funds
transfer pricing, and risk-adjusted capital allocation, are correct.
 Warehousing the data. Design a customer database with
accurate data that is regularly updated and validated.
 Acting on the information. Ensure the availability of
technology that will communicate the customer knowledge from
the Risk Adjusted Profitability Model to the front-line customer
service representatives so that it is used at the time of
customer contact.

COMPETITIVE ADVANTAGE:

Successful retail banks are devoting as much time and effort to

customer retention as they are to new customer acquisition.
Retaining profitable customers and devising successful
strategies to increase the value of unprofitable customers will
be the single largest source of competitive advantage in the
coming years. Achieving this competitive advantage requires
that banks have the ability to accurately identify their high value
customers. Traditionally, customer profitability analysis has not
adequately incorporated credit risk at the individual level. By
developing risk-adjusted customer profitability metrics that take
full advantage of new technology and the wealth of customer
data available in most institutions, banks will ensure that their
retention efforts are truly targeted at the most profitable
customers.

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 LOAN ACCOUNT: With the help of a well laid down loan
policy, a tight appraisal mechanism and a suitable pricing
model, it may appear that a bank has taken a prudent lending
decision. Neverthelessm since the cash inflows from the loan
installments are mostly related to the future cash inflows of the
borrower, there will be an element of uncertainty related to the
returns of the bank.

LOAN REPAYMENT SCHEDULE :All issues related to the

repayment of the loan will clearly stated in the loan agreement.
Apart from the interest rate the loan agreement will also
comment on the repayment schedule. The repayment schedule
will be drawn by considering the cash flows of the borrower
which inturndepend on the Debt Service Converag
Ration(DSCR)

CREDIT RISK: A counter –party failure in performing the

repayment obligation on due date gives rise to low quality
assets which in turn lead to credit risk. Like the interest rate
risk and the liquidity risk, credit risk is also an inherent feature
of any firm that is into the business of lending funds either to
individuals or tocorporates.
Effective management of credit risk involves the following key
principles:
1.Evaluation
2.Pricing
3.Monitoring
The effective credit risk management necessitates that various
risks arising out of deficiency in lending policy, incorrect
product structuring, inadequate loan asreeinin and
documentation, ineffective post-sanction ,monitoring/ follow-up
and weak collection/ recovery mechanism are addressed
adequately and in time. And like traditional lending , the
bankers while taking lending decisions of loans should strictly
adhere to the five ‘Cs’ of credit i.e character, capacity,credit,

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convenants and collateral.As a risk –mitigating measure, the
RBI has recently advised banks:

1.To keep the exposure of unsecured loans/guarantees within

safe limits.

2.To increase provisioning of unsecured NPV under sub-

standard category from10% to20%.

3.To increase risk weight on home loan from50 to75% and

personal and consumer loan from100% to125%.
PROBLEM LOANS: Frequent delay nd defaults in payment
that is reflected in the loan account will be awarning signal for
the bank. If the bank does not act promptly for such delays,
there may be degaults leading further degeneration in the
quality of the loan and thus create problem loans.
Identifying problem loans: Identification of problem loans most
importantly require timely access to information and the ability
to analyze them. When the bank has the requisite systemsin
place to provide the loan officers with the necessary
information, it not only enables them to trace the early warnin
signals of loans but also enables them to take swift measures
to prevent the deterioration of the loan quality. This highlights
the need for systematic data collection in credit management.
Details on the folling can provide crucial insights into the post
sanction ,monitoring appraisal system employed by the bank
and will enable the bank to identify early warning signals for a
problem loan:

1.Submission of financial statements-Balance sheet, Profit and

Loss and Cash Flow Statement.

2.Submission of quarterly/half-yearly statements.

3.Submission of periodic stock statements.

4.Frequency of as hoc limits to meet the cash commitments.

5.Reflection of purchase and sales into the account.

6.Avarage delay in payment of installemts.

7.Clients projections and performance.

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RETAIL LOAN AND INTEREST RATE RISK:
In Siliguri retail loan can be classify three way-

1.Home Loan
2.Personal Loan
3.Car Loan

Interest rate risk is another area to address. In the past two-

three years, banks have built up housing loan portfolio, which
carry7.5% to9.5% interest.But now it carry 14.75 to 11.25%
on fixed rate basis.Housing loan are large tanures say 15 to20
years.Axis Bank offers 20.5% to 13.5% interest rate in case
of Personal loan and 11.5% in case of Car loan.

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Table no 1
Product(tenure) Interest rate
Home Loan Fixed Rate (20 Years) 11.25% - 14.75%
Personal Loan (5 Years) 13.5% - 20.5%
Home Loan Floating Rate (20
9.75% - 12.5%
Years)
Car loan(4 years) 11.5%

CREDITORS’ PROFILE
The personal as well as profile factors influence to leand in formulating their
leanding pattern. An high profile person perceiving an lend differs from an low
profile one. Similarly, the factors such as age, marital status or family size wield
their own influence on the perceptual process. A young unmarried person for
instance, prefers to take loan in more tenure more capital, whereas an aged person
with a family responsibility prefers more or less tenure and less capital and steady
income- generating avenues.
Table No. 2

Distribution of Govt. employees and self employed by

demographic Factor
No. of
Respondents
Investor Particulars
Total
(100) (%)
Male 94 94
Sex
Female 6 6
CA,MBA 22 22
Academic Graduate or post
Qualification Graduate 48 48
DOCTOR 30 30
25-35 42 42
36-45 38 38
Age
46-55 12 12
56-65 0 0
Married 77 77
Marital Status
Unmarried 23 23
Annual income below Rs.100000 11 11
Rs.100000- 75 75
Rs.200000

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 Above Rs.200000 14 14
Less than Rs.25000 40 40
Annual savings Rs.25001-Rs.50000 43 43
Above Rs.50000 17 17

EMPIRICAL ANALYSIS
EMI=R/12=44,455
Where, R=15000000/ (PVIFA 18.50%,4)

AXIS
BANK LTD
LOAN
AMOTIZAT
ION
MODEL
TENURE 48 PF 2%(.25WAIVED)
ROI 18.5% FOUR CLOSUR 4%ON O/S
CHARGE PRI.AMT(2%
WAIVED BY
COMPETENT
AUTHORITY)
EMI 44455
LOAN AMOUNT 15,00,000

LOAN A/C

Principal
Month PrincipalO/s Repaid Interest EMI
1500000
0 1500000 21330 23125 44,455
1 1500000 21330 22796 44,455
2 1478670 21330 22462 44,455
3 1457010 21330 22123 44,455
4 1435017 22332 21779 44,455
5 1412685 22676 21429 44,455
6 1390009 23026 21074 44,455
7 1366983 23381 20714 44,455
8 1343601 23742 20348 44,455
9 1319860 24108 19976 44,455
10 1295752 24479 19599 44,455
11 1271273 24859 19216 44,455

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12 1246417 25240 18826 44,455
13 1221177 25629 18431 44,455
14 1195548 26024 18030 44,455
15 1169524 26425 17623 44,455
16 1143099 26833 17209 44,455
17 1116266 27246 16789 44,455
18 1089020 27666 16363 44,455
19 1061354 28093 15929 44,455
20 1033261 28526 15929 44,455
21 1004735 28966 15490 44,455
22 975769 29412 15043 44,455
23 946357 29866 14590 44,455
24 916491 30326 14129 44,455
25 886165 30794 13662 44,455
26 855371 31268 13187 44,455
27 824103 31750 12705 44,455
28 792352 32240 12215 44,455
29 760113 32737 11718 44,455
30 727376 33242 11214 44,455
31 694134 33754 10701 44,455
32 660380 34275 10181 44,455
33 626105 34803 9652 44,455
34 591302 35339 9116 44,455
35 555963 35884 8571 44,455
36 520079 36437 88018 44,455
37 483641 36999 7456 44,455
38 446642 37570 6886 44,455
39 409072 38149 6307 44,455
40 370923 38737 5718 44,455
41 332186 39334 5121 44,455
42 292852 39941 4515 44,455
43 252912 40556 3899 44,455
44 212355 41182 3274 44,455
45 171174 41816 2639 44,455
46 129357 42461 2017 44,455
47 86896 43116 1340 44,455
48 43780 43780 675 44,455

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ANALYSIS OF THE STUDY Interpretation of data using
graphs

Respondents’ Age:
About 46% of the customer were under
the age group 31 and 45 closely followed by the age group
under 30 with 43%. Though the people among the age 31-45
invest more, the volume of their taking loan is relatively lower
compared to that of the fewer than 30 age group (Following
table).

Age Group of Respondent

Age No. of People Percent (%)
Under 30 39 43
31-45 41 46
46-60 7 8
60 and above 3 3
Total 90 100

Profession of the Respondents: In my Interim report I am

able to found the difference between the customer profiles
depends on Customer occupation . This comparative study
prepares only the help of Questionnaire method. In my
Questionnaire process I have found various type of profession
of the respondent. Example: Doctor, Engineer, Government
Service, Business, Stock Broker, Banking etc. And their
respondent regarding loan is given bellow by Pie Chart.

Profession of Respondents regarding Personal loan

Doctor Engineer Accountant Business Govt. Stock Software Banking
Service Broker

5% 10% 6% 4% 55% 1% 2% 3%

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 PROFETIONAL RESPONDENT REGARDING Home loan
Doctor Engineer Accountant Business Govt. Stock Software Banking
Service Broker
5% 20% 12% 16% 9% 5% 5% 15%

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Annual income(Salaried):

Annual income decides the value of the customer made by

their salary.

Annual Income of the Respondent

Annual income No. of people Percent
(Lakh)
<1 3 3
1-3 31 34
3-5 37 41
5-10 14 16
10+ 5 6
Total 90 100

Annual income(SELF EMPLOYED): Annual income decides

the value of customer depending upon their income tax return
file.
Annual Income of the Respondent
Income tax file No. of people Percent
return (Lakh)
<1 37 41
1-3 31 34
3-5 15 16
5-10 4 4
10+ 2 2
Total 90 100

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 DELAY PAYMENT OF LOAN EMI
NO
OF
MO
NT
LO H
AN OV
SCHEME INTER TE LAST ER
DESCRIPTI EST NU PAYMENT BUC DU
ON PROFILE RATE RE DATE KET E
PERSONAL 90-
POWER BUSINESSMAN 21.5 48 30.11.2007 180 4
PERSONAL 90-
POWER BUSINESSMAN 21.5 36 21.11.2007 180 4
PERSONAL
POWER SALARIED 23.5 48 22.11.2007 30-60 2
SERVICE
PERSONAL GOVERNMENT
POWER SECTOR 20.5 36 23.11.2007 60-90 3
SERVICE
PRIVATE
CAR LOAN SECTOR 14.5 48 24.11.2007 0-30 1
90-
CAR LOAN BUSINESSMAN 11.75 48 25.11.2007 180 4
CAR LOAN BUSINESSMAN 12.6 48 21.11.2007 0-30 1
CAR LOAN BUSINESSMAN 11.75 48 24.11.2007 0-30 1
CAR LOAN BUSINESSMAN 11.75 48 25.11.2007 0-30 1

- 26 -
- 27 -
 ABBREVIATIONS

AAA Anytime, Anywhere, Anyhow

ALM Asset Liability Management

ATM Automated Teller Machine

BIS Bank of International Settlements

CCIL Clearing Corporation of India Ltd.

CIBIL Credit Information Bureau of India Ltd.

CRM Customer Relations Management

Demat Dematerialize

DSAs Direct Selling Agents

ECS Electronic Clearing System

EFT Electronic Funds Transfer

EMI Equated Monthly Instalment Scheme

FS Financial services

GDP Gross Domestic Product

FDI Foreign Direct Investment

HNIs High Networth Individuals

IDRBT Institute for Development and Research in

- 28 -
Banking Technology

IT Information Technology

KYC Know Your Customer

MIS Management Information System

MNC Multi-national Corpporation

NPA Non-Performing Asset

NSDL National Securities Depository Limited

OBC Other Backward Classes

PLR Prime Lending Rate

PSUs Public Sector Undertakings

PSB Public sector banks

RBI Reserve Bank of India

SMEs Small and Medium Enterprises

SCIs Specialised credit institutions

UK United Kingdom

- 29 -
Process-Flow
The following guidelines should be followed for all Mortgage
Loans:

1. All the cases to be mandatorily processed through LOS.

2. Credit Manager should only decision the files in LOS.
3. If a case goes on hold because of any queries, the
queries should get cleared within 8 Days. In case the
same doesn’t get cleared within 8 days the file should be
declined and returned back.
4. For all declined cases the decline letter should be kept
open for 7 days for review by sales managers / RAC
heads. In case the same doesn’t get reviewed the reject
letter should be directly couriered to the customer.
5. Sanction letter be couriered to the customer.
6. The reasons for files on hold should be captured in
Notepad in LOS.
7. Proper reject reason should be captured while declining a
case. In LOS we have the following reject reasons, one
can select any one of the following:
• Age Norms not met
• CPV negative
• Contractibility norms not met – Outside the funding
area
• Criterion not met
• De-dupe negative
• Derogatory history
• Document norms not met
• Employment / business stability norms not met
• Gift – Sales reject needs to be entered
• High risk profile / NSP
• Income norms not met
• LTV norms not met
• Negative area
• Negative Dealer – Negative builders / Property
• Others / qualitative reasons
• Programme norms not met
• Residence stability norms not met
• Tenure norms not met
• Wrong information / negative reference

- 30 -
 Product Paper on Power Home

Purpose

 Purchase of a plot of land and Construction of a house

thereon
 Construction of a house on plot of land already owned
 Purchase of a new house / flat
 Purchase of old house / flat. The residual age of the
property as confirmed by our empanelled valuators at
the maturity of the loan should not be less than 10
years (Home Acquisition Plan)
 Extend /Renovate/Repair of a house or flat already owned
by self (Improvement/ Extension Plan)
 Take-over of existing Housing Loan
 Pre-allotment Booking finance
 Loan takeover with additional refinance

However, the property should be located within 50-km radius of

the nearest RAC/Branch.

The features of the home loan product are enclosed

below.Eligibility

A) Salaried Individuals
1. Any individual with a minimum net monthly salary of Rs.10, 000/- p.m.
2. In case of salaried persons clubbing of income of Husband and wife is
permitted, minimum aggregate net monthly salary of Rs.15, 000/- p.m.
and both the applicants to be co-applicants to the loan. All property
owners to be made co-applicants to the loan.
3. The applicant in all the cases should be above 24 years of age at the
time of loan commencement and up to the age of 60 Years or
superannuation, whichever is earlier at the time of loan maturity.
B) Professionals:
1. In the case of professionals, minimum net annual income of Rs.1.50
lakhs.
2. In case of professional (i.e. Doctors, Engineers, Dentists, Architects,
CAs, Cost Accountants, Company Secretary, Management Consultants

- 31 -
 only) Clubbing of income of Husband and wife is permitted, minimum
aggregate net monthly salary of Rs.15000/- p.m. and the loan would be
granted to only one person. All property owners to be made co-
applicants to the loan.
3. The applicant should be above 24 years of age at the time of loan
commencement and up to 65 years or less at the time of loan maturity.
C) Self Employed Individuals
1. In case of self employed individuals, minimum net annual income of
Rs.1.50 lakhs.
2. Clubbing of income of Husband and wife is permitted, minimum
aggregate net monthly salary of Rs.15000/- p.m. and the loan would be
granted to only one person. All property owners to be made co-
applicants to the loan.
3. The applicant in all the cases should be above 24 years of age at the
time of loan commencement and up to 65 years or less at the time of
loan maturity.

Clubbing of Income is allowed between spouse and parents and also for the
cases where one of the applicants is salaried and other applicant is self
employed, subject to maximum clubbing of income of three applicants.

In case the co-applicant / guarantor is a non financial member, the minimum

age be 18 years at the time of commencement of loan and up to the age of 75
years at the time of loan maturity.

Income / ownership grid as per matrix given in Annexure 1.

Work experience

A) Salaried Individuals:
Particulars Option ‘A’ Option ‘B’
Current Job Min 1 year < 1 year
Overall 2 years total 3 years total
experience experience experience

B) Professionals & Self Employed Individuals:

Business continuity of last three years in the same field

Loan amount
Minimum – Rs.1 lakh & Maximum - Rs.50 lacs

- 32 -
Installment to Income Ratios (IIR) and Fixed Obligation to
Income Ratios (FOIR) norms

Loan eligibility will be calculated basis IIR & FOIR and the loan
eligibility basis the lower of IIR norm or FOIR norm will apply.

Salaried Individuals, Professionals & Self employed

Individuals
Net Monthly Max Max FOIR on net
Income (NMI) IIR income
Less than Rs.20,000 50% 70%
/-
Rs. 20,000/- to 55% 70%
Rs.1,00,000/-
Above Rs.1,00,000/- 60% 75%

Rate of Interest (as applicable on date)

Sr. Type Loan amount (Rs.) Effective

No. ROI
1 Floatin Up to 30 Lacs 8.75 %
g Above 30 Lacs & up to 9.25 %
100 Lacs
2 Fixed Irrespective of the loan 14.00 %
amount

Mortgage Reference Rate (MRR) is 12.25%.

All rates are subject to change from time to time.

- 33 -
Processing Charges/ Admission Fee - Penalty & Refund

Processing fee equivalent to 1% of the loan amount (applied

for) will be collected prior to disbursal.
The process of collection & refund of fees is appended below:
1. Minimum cheque of Rs.5,000/- or 1% of the loan
amount to be collected upfront in all Home Loan cases
but the cheques should be banked after sanction.
2. Balance processing fess of 1% of Home loan needs to
be collected from the customer before disbursement.
The processing fees should be collected from the
customer and not be deducted from the disbursal
amount.
3. The process of refund of processing fees is appended below:
Sr. Scenario PF amt to be PF amt to be
No. retained by the refunded to
Bank the Applicant
1. Application rejected Nil Processing fees
collected, if any.
2. Application Rs.2,000/- Balance
sanctioned for a processing fees
lower amount then collected.
the loan applied and
applicant is not
interested in the
lower amount.
3. Application disbursed 1% of the Balance
for a lower amount Sanction limit processing fees
then the amount collected.
sanctioned.
4. Case sanctioned Rs.5,000/- Balance
subject to legal & processing fees
technical clearance collected.
and thereon rejected
basis legal &
technical report.
5. Case sanctioned but Full amount Nil
not availed. collected

- 34 -
 Refunds need to be done within a period of 90 days from
the date of sanction / disbursal (as the case may be) of
the loan. If the refund is not done, for any reason, in the
stipulated period then the same needs to be done with
the prior approval of Zonal Retail Asset Head.

4. No out of pocket expenses (e.g. Legal charges, Stamp

duty, etc.) will be charged to the customer. These are to
be adjusted out of the processing fees. However EM
charges may be collected.

Penalty for part prepayment and foreclosure

Nil

Booking Heads
GL Description GL Head
Loans – Power Home – Gen INR 69006

Product Scheme Code

Power Home floating PH_LNPHG_floating
Power Home Fixed PH_LNPHG_fixed

Credit Score & CIBIL Score

The range of CIBIL score is 300-900. The cut-off score would
be 760 for all the retail asset products.

The minimum Credit Score rating is 60 for Credit Score Rating

sheet.

Other Conditions
 Bank reserves the right to reject any application without
assigning reasons thereof.
 The applicant will undertake to inform the Bank as and when
there is a change in address / employment.

- 35 -
  The terms & conditions mentioned above and elsewhere
under the scheme are subject to modification from time to
time solely at Bank's discretion.
 Operational risk losses to be reported to Central Office for
onward reporting to Operational Risk Department.

Documentation:
Documents required to be submitted along with application form:
Purpose Salaried Others
Proof of Identity Voter's ID Card / Driving Voter's ID Card / Driving
License / PAN card / Photo License / PAN card /
Credit Card / Employees ID Photo Credit Card /
card / Defence, Police, Passport & latest
Government, Departmental Photograph
ID card / Passport & latest
Photograph
Proof of Income Latest salary slip/certificate IT Returns for the last 2
showing all deductions or years and Computation of
Form 16 along with current income for the last 2
dated salary certificate. years certified by a C.A.
Proof of Bank account statement / Bank account statement /
Residence Latest Electricity Bill / Latest Latest Electricity Bill /
Mobile / Telephone Bill / Latest Mobile / Telephone
Latest Credit Card Bill / Latest Credit Card
statement / Latest LIC statement / Latest LIC
policy / Insurance Premium policy / Insurance
Receipt / Employers letter Premium Receipt / Latest
certifying the current mailing NSC
address / Latest NSC /
Existing House Lease
Bank Statement / Last 6 months Last 6 months
Pass Book where
salary / income is
credited
Guarantor Form Optional Optional

Disbursement documentation:
Application
Term Loan Agreement
Completion of mortgage formalities (Equitable / Registered)
Agreement with builder / seller duly registered
Title Clearance Certificate / Valuation Report

- 36 -
 Blueprint of Plot / Land / House approved by the competent
authority
No Objection Certificate from Builder/ Society to mortgage the
flat
Letter of Authority from employee / Undertaking by employer
where check-off facility is available
Pledge Form for collateral securities

Delegation
Branches headed by SVPs/Other Branches
The loans will be sanctioned and disbursed at the branch level and the
individual sanctions would be reported to Zonal Office at monthly intervals in a
pre-designed format for review by the Zonal Office. However, the branches
are advised to obtain a pre-disbursal review invariably in those cases where
there are deviations from the scheme but where the value of connections or
other relevant factors make the proposal worthwhile for consideration.

- 37 -
 Annexure A:

POWER HOMES (SALARIED)

CREDIT SCORING SHEET

Name: Shri / Smt. _________________________________

A/c No._________________

Sr.N Parameters Tota Ex. G A A Criteria

o. l A
Mar
ks

1. Personal EX > 24 Yrs. And

Information 10 10 8 6 2 < 35 Yrs.
Age G > 35 Yrs. and <
50 Yrs.
AA > 50 Yrs. And
< 55 Yrs.
A >55 Yrs.
2. Educational 10 10 6 4 4 EX – Post
Qualifications Graduate /
Professional
G – Graduate
AA/A – Under
Graduate
3. 10 10 8 4 0 EX – Upto 4
No. of G–5
Dependents AA –6
A – More than 6
4. Income
Information EX =>Rs.300000
20 20 13 8 5 G =>Rs.200000 <
Net Present Rs.300000
Income from all AA =>Rs.90000 <
sources Rs.200000
A => Rs.50000 ,
< Rs.90000
5. Monthly 15 15 11 8 5 EX < 20%
Instalment of G < 35%
Loan / Net AA < 45%

- 38 -
Sr.N Parameters Tota Ex. G A A Criteria
o. l A
Mar
ks

Monthly A > 45% but <

Income 55%
(from all
sources)

6. Networth
Information 2 2 0 0 0 EX – Yes
Has Phone G/AA/A – No

7. Owning of 3 3 2 1 0 EX – 4 Wheeler
vehicle fully owned/
Company
provided
G – Hypothecated
4
Wheeler
AA- Two Wheeler
A – Does not own
a vehicle
8. Net Assets 15 15 10 6 4 EX -Market Value
>Rs.500000
(Total Assets – G- Market Value >
Liab.) Rs.300000
AA-Market
Value>Rs.200000
A- Market Value >
Rs.100000
9. Organisation EX –Government /
Information Public
Organisation 3 3 2 1 0 Sector
(*) Undertaking/
MNC
G – Public Limited
Company
AA –Private
Limited
Company

- 39 -
Sr.N Parameters Tota Ex. G A A Criteria
o. l A
Mar
ks

10. Designation (*) 2 2 1 0 0 EX – Executive /

Senior
Manager
G – Officer
AA/A–Others
11. Length of 5 5 3 2 1 EX > 3 Years
Service in G > 2 Years
present job AA > 1 Year
A < 1Year
12. Credit Card
Information EX - Gold / Diners
i) Type of 3 3 2 0 0 G - Silver / Blue /
Credit Card Classic /
Executive /
Sterling Silver /
others,
AA/A - No Card
ii) Member 2 2 1 0 0
Since EX > 2 Years
G 1 – 2 years
AA < 1 Year
A No Card
Total Marks 100
CREDIT SCORING RATING
Point Nos. 1 2 3 4 5 6 7 8 9 10 11 Total
Marks
Max 10 1 10 20 1 2 3 1 5 5 (3+2 100
Scores 0 5 5 )
Marks
Scored

Cut off Score = 60

- 40 -
 POWER HOMES – SELF EMPLOYED

CREDIT SCORING SHEET

Name: Shri / Smt. _________________________________

A/c No._________________
Sr.N Parameters Tot Ex. G A A Criteria
o. al A
Mar
k
1. Personal EX - 30 years to 45
Information years.
Age 10 10 8 6 2 G - 24 years to 30
years (others) 46
years to 50
years(professional)
AA - 51 years to 60
years.
A - more than 60 years
2. Educational 10 10 6 4 4 EX – Post Graduate/
Qualification Professional(Full
s time
Degree course
e.g.
MBBS,BDS,
Architect,
Engineers,
Chartered

Accountants,Company
Secretary, Cost
Accountants,
MBAs.)
G – Graduate
AA/A – Under
Graduate

3. 10 10 8 4 0 EX – Upto 4
No. of G–5
Dependents AA --6
A – More than 6

- 41 -
Sr.N Parameters Tot Ex. G A A Criteria
o. al A
Mar
k
4. Net Present 20 20 15 8 5 EX => Rs. 300000
Income from G => Rs. 200000
all sources <Rs.300000
AA=>Rs.100000 <
Rs.200000
A > Rs. 75000 <
Rs.100000
5. Monthly 15 15 11 8 5 EX < 25%
Instalment of G < 40%
Loan / Net AA < 50%
Monthly A >50% but < 60%
Income
(from all
sources)
6. Networth EX – Yes
Information G/AA/A – No
Has Phone 2 2 0 0 0

7. Owning of 3 3 2 1 0 EX –4 Wheeler fully

vehicle owned/
Company
provided
G – Hypothecated 4
Wheeler
AA- Two Wheeler
A – Does not own a
vehicle
8. Net assets 15 15 11 6 4 EX Market Value
(For others) >Rs.500000
G Market Value >
(Total Assets Rs.300000
– Liab.) AA Market Value>
Rs.200000
A Market Value >
Rs.100000
9. Organisation EX – Self-employed
Information professional /
Organisation 5 5 4 2 1 Director of Pvt. Ltd

- 42 -
Sr.N Parameters Tot Ex. G A A Criteria
o. al A
Mar
k
and Co. (with 50 or more
Designation staff)
G – Director of Pvt.
Ltd. Co. with less than
50 staff / Partner in a
partnership firm with
25 or more employees
AA – Partner in a
partnership firm with
>10 and < 25
employees / Proprietor
of a firm with more
than 25 employees
A – Proprietor of a
firm with < 25
employees / Partner in
a partnership firm with
<10 employees.
10. Length of 5 5 3 2 1 EX > 3 Years
involvement G > 2 Years
in current AA > 1 Year
business A < 1Year

11. Credit Card

Information 3 3 2 0 0 EX - Gold / Diners
i) Type of G - Silver / Blue /
Credit Card Classic / Executive /
Sterling Silver / others
AA/A - No Card
ii) Member 2 2 1 0 0
Since EX > 2 Years
G 1 – 2 years
AA < 1 Year
A No Card
Total Marks 100

- 43 -
CREDIT SCORING RATING
Point Nos. 1 2 3 4 5 6 7 8 9 10 11 Total
Marks
Max 10 1 10 20 1 2 3 1 5 5 (3+2 100
Scores 0 5 5 )
Marks
Scored

Cut off Score = 60%

- 44 -
 AUTO LOAN

PURPOSE

 The product would be applicable for purchase of new

cars only.
 Vehicles under this scheme are to be used for personal
use only.

SCHEMES

We would be offering the following schemes under the auto

loans product:

1. Vanilla Product
2. Salary Account Product
3. Priority Account Product
4. No Income Proof Product
5. Repayment Track Record Product
6. Credit Card Product
7. Gross Receipts Product
8. Defence Personnel Product
9. Special Product for Working Women

SECURITY

Hypothecation of the vehicle and lien to be marked in favour of

UTI Bank Ltd. in the Registration Certificate, Final Invoice and
Insurance Policy.

- 45 -
SOURCING

This product will be sourced through RAC, SRAC, branches,

dealerships, corporate tie-ups, existing salary and priority
account relationships and DSAs.

ELIGIBLE SEGMENTS

The following applicants can apply for the loan:

1. Salaried Individuals
2. Self-employed individuals
3. Proprietorships
4. Partnerships
5. HUFs (with prior clearance of CO)
6. Trusts

 All applicants must be either Resident Indians or Non-

Resident Indians
 For NRI cases, a blood related
(father/mother/wife/children) Resident Indian as co-
applicant is required. Cheques can be taken from either
the Resident co-applicant’s account or the NRI’s
Resident account.
 For all HUF cases, the Karta of the HUF must be taken in
as co-applicant in his individual capacity
 Directors (other than working Director employed in
professional capacity) cannot apply as Salaried employee
unless the Balance Sheet of the company is submitted
along with the personal ITR of the applicant. They would
be considered under the self-employed category.
 In case of Trusts, the following documents must be
collected in addition:
1. Certified True Copy of the Trust Deed
2. Copy of the resolution passed by the Board of
Trustees/Directors authorizing borrowal
3. Certified true copy of the Registration Certificate
from Charity Commissioner / Societies Registration
Act

- 46 -
ELIGIBLE CARS

Cars have been categorized as follows for LTV and eligibility

purposes.

Category Category
A B Category C Category D
Maruti 800Zen Baleno Vitara
Omni Swift Esteem Sonata
  Alto Versa Tucson
  Wagon R Accent Mercedes C-Class
  Santro Verna Mercedes E-Class
  Getz Elantra Mercedes CLS-Class
  Indica Bolero Mercedes S-Class
  Palio Scorpio Mercedes SL-Class
  Cedia Mercedes SLK-Class
    Lancer Montero
    Octavia Pajero
    Sumo Combi
    Safari Laura
    Indigo Superb
    Corolla Camry
    Innova Land Cruiser Prado
    Chevrolet Aveo Fusion
    Chevrolet Optra Endeavour
    Tavera Accord
    Ikon Civic
    Fiesta Honda CRV
    Honda City
SRV
Marina

- 47 -
 ELIGIBILITY CRITERIA & DOCUMENTATION

Purpose Salaried Self-Employed Partnership Firms/

Individuals/Proprietary Trusts
concerns
Age Minimum 21 years, Minimum 21 years, Loan executing
Maximum upto 58 Maximum 65 years at partner/ trustee (as
years or 60 years the time of loan maturity applicable) to
(age of confirm to these
superannuation) at norms: Minimum 21
the time of loan years, Maximum 65
maturity years at the time of
loan maturity
Loan amount Minimum Rs. Minimum Rs. 100000/- Minimum Rs.
100000/- 100000/-
Tenure Minimum 1 year Minimum 1 year and Minimum 1 year and
and maximum 7 maximum 7 years maximum 7 years
years
Income Norms Minimum Rs. Minimum Rs. 60000/- for Minimum Rs.
*** 100000/- gross Category A/B cars and 60000/- for Category
annual income for Minimum Rs. 100000/- A/B cars and
Category A/B cars for Category C/D cars Minimum Rs.
and Rs. 200000/- (Gross Income: Net 100000/- for
for Category C/D Profit after tax + Category C/D cars
cars (Gross annual Depreciation) (Gross Income: Net
income is the gross Profit after tax +
salary as reflected Depreciation)
in the Form-16
before any
deduction)
Work- Minimum 2 years Minimum 3 years in Minimum 3 years in
experience of total business business
employment
Turnover NA NA Minimum turnover of
Rs. 4.5 lacs
Telephone Landline at Landline at Residence/ Landline at
Residence/ Postpaid mobile Residence/ Postpaid

- 48 -
 Postpaid mobile connection mobile connection of
connection loan executing
partner/ trustee (as
applicable)
Proof of Passport / Voter’sPassport / Voter’s Card /Copy of Partnership
Identity Card / DrivingDriving License withDeed/ Memorandum
License withPhotograph/ PAN card & Articles of
Photograph/ PAN Association/Certified
card True Copy of Trust
Deed (as applicable)
& the following
documents required
for the loan
executing
partner/trustee:
Passport / Voter’s
Card / Driving
License with
Photograph/ PAN
card
Proof of Latest salary slipLatest Income TaxAudited Balance
Income showing allReturn and ComputationSheet, Profit & Loss
deductions ANDof income Account for last 2
Latest Form 16 / years along with the
Income Tax Return latest 2 Income Tax
(Form 16 FYE Returns
March should be
available June
onwards)
Address Proof Ration Card/LatestRation Card/LatestTelephone
(of the residing Electricity Electricity Bill/LatestBill/Electricity Bill/
city) Bill/Latest Telephone Shop &
Telephone Bill/Passport/Latest Establishment Act
Bill/Passport/Latest Credit Card Bill/ DrivingCertificate/SSI
Credit Card Bill/License Registered
Driving License Certificate/ Sales
Tax Certificate
Signature Passport copy/Passport copy/ DrivingBanker’s Verification
Verification Driving LicenseLicense with
with Photograph/Photograph/ Banker’s
Banker’s Verification
Verification

- 49 -
Additional NA Declaration fromAuthority letter
Documentation Proprietor signed by all
partners/Board
Resolution for Trusts

***
 For Self-employed Individuals/Proprietorships :
1. Income from other sources in the form of bank interests
and dividends of companies listed on the stock exchange
can be added to Business Income ONLY if there is no
business loss. However, if this income exceeds 20% of
the total income requirement for the product, then income
proof in the form of bank credits or bank fixed deposit
photo copies or the Demat account statement needs to
be given.

2. Income from rent can be added to the business income if

there is no business loss. However, if this income
exceeds 20% of the total income requirement for the
product, then income proof in the form of rental credits in
bank along with the rent agreement needs to be given. If
rent credits are not appearing in the bank account, then
the rent agreement along with 3 months bank statements
will also be a valid substitute.

3. Agricultural income up to 20% of the total income

requirements for the product can be added to the
business income provided there is no business loss.

 For Partnership Firms: Net loss making firms or firms

having debit capital balances not to be considered.
Salary of partners, interest paid to partners and full
depreciation can be added to the net profit.

- 50 -
Loan To Value (LTV)

 LTV would be computed on ON-ROAD price (inclusive of

insurance and registration)
 Funding on imported cars is permissible with CO
approval

The following LTV grid would be applicable:

% LTV % LTV % LTV
Model & it’s upto 36 upto 60 upto 84
Company Variants months months months
Maruti Maruti 800 85% 80% 75%
  Omni 80% 75% 70%
  Zen 85% 80% 75%
  Alto 85% 80% 75%
  Wagon R 85% 80% 75%
  Versa 75% 65% 60%
  Esteem 80% 75% 70%
  Baleno 80% 70% 65%
  Vitara 75% 70% 65%
  Swift 85% 80% 75%
Hyundai Santro 85% 80% 75%
  Getz 85% 80% 75%
  Accent 80% 75% 70%
  Verna 80% 75% 65%
  Elantra 75% 70% NA
  Sonata 80% 75% 65%
  Tucson 70% 65% NA
Mahindra Bolero 75% 65% NA
  Scorpio 80% 70% 65%
Mercedes Mercedes 75% 70% 60%
Mitsubishi Cedia 80% 70% NA
  Lancer 80% 70% NA
  Montero 65% NA NA
  Pajero 80% 70% 60%
Skoda Combi 65% NA NA
  Octavia 80% 75% 70%
  Laura 75% 70% 65%
  Superb 75% 70% NA
Tata Sumo 80% 65% NA

- 51 -
  Safari 75% 65% 60%
  Indica 85% 80% 75%
  Indigo 80% 75% 70%
  Marina 75% 70% 65%
Toyota Corolla 80% 75% 70%
  Camry 80% 75% 65%
  Innova 85% 75% 70%
  Land Cruiser Prado 75% 70% 60%
GM Chevrolet Aveo 80% 75% 65%
  Chevrolet Optra 80% 75% 65%
  SRV 80% 75% 65%
  Tavera 80% 75% 70%
Fiat Palio 80% 65% 60%
  Petra 75% 65% NA
Ford Ikon 80% 75% 65%
  Fiesta 80% 75% 65%
  Fusion 75% 70% NA
  Endeavour 75% 70% 60%
Honda City 85% 75% 70%
  Accord 75% 70% 65%
  Civic 80% 75% 70%
  CRV 75% 70% 65%
Others   65% NA NA

RATE OF INTEREST

Applicable ROI will be as follows:

Tenor
greater than
60 months
Tenor upto up to 84
  60 months months
Without Payout 10.50% 10.50%
With Payout (subject
to a maximum
payout of 5.5% flat) 11.75% 12.25%

- 52 -
Rates are subject to change. Any revision in rates of interests
would be communicated from the Central Office from time to
time.

It is at the discretion of the RAC Head/SRAC Head/Branch

Head to sell auto loans at rates higher than the one indicated
above. No approval from the Zone / Central Office required for
the same.

PRODUCT-WISE FEATURES

1. VANILLA PRODUCT
All category cars can be funded
LTV as per grid would apply
All documents as defined under documentation would
have to be collected
Last 3 months bank statements to be collected and to
be verified for negative traits like cheque bounces,
minimum balance charges, penal interests etc.
Deviations would be permissible as per deviation grid
6 months bank statements to be collected from cash
salary cases. No deviations permitted for cash
salary.

Eligibility Criteria:
For Salaried:
1. 3 times Gross Salary p.a. OR (30 times of average
net salary of 3 months for cases where Form – 16
is not available)
2. EMI must not exceed 50% of net salary

For Self-employed:
6 times Gross Income p.a.

The RAC Head must ensure that deviation of non-

availability of Form-16 must not be taken for more than
5% of the total portfolio.

Salary Account Product:

- 53 -
 All category cars can be funded under this product
All customers having their Salary A/c with UTI Bank
since the past 3 months will qualify under this
scheme
All documents as defined under documentation would
have to be collected (other than income
documents)
Deviations would be permissible as per deviation grid

Eligibility:
1. 30 times Average Net Salary Credited during last 3
months
2. EMI must not exceed 50% of net salary

Benefits:
100% Waiver of Processing Fees
 Waiver of Salary Slips & Bank Statements

Priority Account Product:

All UTI Bank Priority customers, having an account for

a minimum period of 12 months AND a minimum
AQB of Rs. 100000/- for last 2 completed quarters
will qualify under this scheme
Borrower will be eligible as per the LTV grid. Credit
Manager to use his discretion.
All category cars can be funded under this product
All documents as defined under documentation would
have to be collected
Deviations would be permissible as per deviation grid

- 54 -
 Benefits:

100% Waiver of Processing Fees

Waiver of Income documents & bank statements

No Income Proof Product:

Only Category A, B, C cars can be funded under this

product
The product can be offered to all eligible applicants –
Salaried, Self-employed, Partnership Firms, Trusts
and HUFs
LTV would be as follows:
For
Tenure < For Tenure > 36
36 months, <= 60
CAT months months
Category A 75% 70%
Category B 75% 70%
Category C 60% 55%
Category D NA NA

All documents other than income documents to be

collected as per documentation list.
Last 1 Year bank statements to be collected,
Repayment to be through the same account
Residence must be owned by the applicant or by the
spouse/parent/children of the applicant. Ownership
proof in the form of Ration Card/Latest Electricity
Bill/Passport/Driving License/Property tax
bill/Maintenance Bill/letter of allotment to be
collected.
Deviations would be permissible as per deviation grid

Eligibility:
The average bank balance should be atleast 1.5 times
the EMI. Loan amount to that extent can be granted

- 55 -
Repayment Track Record Product

Only Category A, B, C cars can be funded under this

product
In addition to the documents mentioned under
documentation, the sanction letter of the original
loan (repayment track of which is considered) along
with the repayment schedule needs to be collected.
This loan should have been for a minimum loan
amount of Rs. 100000/- for Category A/B cars and
Rs. 300000/- for Category C cars.

Conditions:
 The loan can be a live one or a closed one. Atleast
50% of the loan
Should have been serviced if the loan account is a
live one or should
have been closed prior to 15 months from the date of
application.
 If the loan has been closed prior to last 6 months, the
bank statements
need to be checked for regularity of cash inflows to
assess the current
repayment capacity of the borrower. The credit
manager to use his
discretion while assessing the same.
There should not have been more than 2 cheque
bounces per completed 12 months. It should never
have been 30 days past due and should be current
if live.

Repayment must be from one of the following: UTI

Bank, ICICI Bank, HDFC, ABN Amro Bank, SCB,
GE Countrywide, Citi, Kotak, Amex, HSBC, SBI and
in the name of the applicant.
 Repayment track record would also be acceptable in
any of the
following cases:

- 56 -
  Track record availabe in the name of the
proprietorary concern where the borrower is
the proprietor
 Track record available in the name of a
partnership firm where the borrower is a 50%
partner in the firm

Last 1 Year bank statements to be taken in all cases.

Repayment track should be verified from either the
loan account statement of the bank statements. If
the track is verified from the bank statements, the
same needs to be collected for atleast 50% of the
original loan tenor completed.
LTV as per grid.
Deviations would be permissible as per deviation grid

Eligibility:
The new loan EMI can be upto a maximum of 1.5 times
the previous loan EMI. For UTI Bank repayment cases,
the new loan EMI can be upto 2 times the previous EMI.

- 57 -
 PERSONAL LOAN

1.1.1      Eligibility Criteria

 
 
Any Individual having a cumulative experience of 2 years or more
with a minimum net income of Rs 7000 p.m. should be eligible for
the loan, irrespective of confirmation in his present job. An employee
with 1 year experience in cat A or cat B company receiving net
salary of Rs.11000/- p.m. is also eligible to avail the personal loan.
 
Minimum experience of one year (1 year) or more for Salary Power
customers with check off facility.
 
The applicant should be above 21 years of age and less than the
age of superannuation at the termination of the loan.
 

1.1.2      Additional Eligibility Criteria for cash salary

 

Any individual receiving cash salary will also be eligible for a

Personal Loan. The following are the features:
1. Loan amount will be restricted to Rs.2 lacs
2. Applicant must have a minimum net income of Rs.10,000/-
p.m.
3. Banking habits: Atleast 6 transactions should be reflected in
the last 6 months’ bank statements and no cheque bounces/
minimum balance charges to be allowed
4. Pricing would be 200 basis points higher than the respective
category rate
5. These loans will be tracked under the label code ‘PLCASH’. 
The same is to be captured on Disbursement Memo.
 

- 58 -
1.1.3      Loan Amount
 
The following matrix / loan limits are applicable for Salaried
Individual Normal segment:
 
Minimum Loan amount: Rs 50,000
Maximum Loan amount: Rs 10.00 lacs
For Salary Power customers, minimum loan amount: Rs 25,000 (at
the discretion of RAC Heads)
 
(Repayment limit listed in the table below)
 
Repayment Limit (Salaried Individual Normal) CAT A / B / C / D
customers
 
 
Repayment Period Max. Loan Amount (Salaried
(Salaried Individual Normal)
Normal)  
Maximum Limit Rs. 10,00,000/-
5 times Net Monthly Income for CAT A
4 times Net Monthly Income for CAT B
=>12 months but < 24 4 times Net Monthly Income for CAT
months C
4 times Net Monthly Income for CAT
D
10 times Net Monthly Income for CAT
A
8 times Net Monthly Income for CAT B
=>24 months but < 36
8 times Net Monthly Income for CAT
months
C
8 times Net Monthly Income for CAT
D
=>36 months but < 48 13 times Net Monthly Income for CAT
months A
10 times Net Monthly Income for CAT
B
10 times Net Monthly Income for CAT

- 59 -
 Repayment Period Max. Loan Amount (Salaried
(Salaried Individual Normal)
Normal)  
Maximum Limit Rs. 10,00,000/-
C
10 times Net Monthly Income for CAT
D
15 times Net Monthly Income for CAT
A
=>48 months upto 60
12 times Net Monthly Income for CAT
months
B
N.A. for CAT C / D
 
 
NOTE:   Personal Discussion with the borrower mandatory for
all loan amounts > Rs 5.0 Lacs.
 

1.1.4      Security / Collateral

 
A.     Salaried (having salary power account with the Bank with check-
off facility) having net monthly income of Rs. 7000 to Rs.10,000,
need not provide collateral security.
B.      Salaried (not having salary power account with the Bank) having
net monthly income of Rs. 7000 to Rs.10,000 need to provide 50%
collateral security (units of UTI, NSCs, KVPs, Demat shares, Bank
deposits, Surrender value of Life Insurance policy and such other
investments that are acceptable to the Bank ) or a 3 rd party
guarantee of a person of satisfactory means*
C.     Salaried having net monthly income of Rs. 10,000 or more need
not provide collateral security.
 
* Guarantor: Father / Mother / Spouse / Third Party (any one of
these) can be a financial guarantor by declaration. Signature
verification and photograph required from the guarantor. Guarantor
need to have monthly salary / income > Rs 10,000.
 
For SRACs, monthly salary / income of Guarantor to be > Rs 8,000
 

- 60 -
1.1.5      Banking Relationships
 
 
1.       For salaried normal in the last six (6) months maximum of 2
cheque bounces allowed (for CAT C & D).
2.       For CAT A & B employees, maximum of 1 cheque bounce
allowed in last 3 months.
 
 
 

1.1.6      Rate Of Interest

 
** Rate of Interest for Salaried Individuals Normal:-
 
RATE OF INTEREST
S. No. CATEGORY
 

1 CAT A 13.00 % p.a.

2 CAT B 15.00 % p.a.

3 CAT C 18.50 % p.a.

4 CAT D 20.50 % p.a.

 
A consolidated list of 7144 companies categorised as  CAT
A/B/C/D is enclosed as Annexure I for information. The list has
been finalised after compiling similar data of all the market
palyers (including MNC Banks) and discussing the same with
RAC Heads / Sales Managers. The matrix defining the logic for
un listed companies is also mentioned in the same annexure.
 

This rate of interest is the floor rate to be offered to the

borrowers. It is at the discretion of the RAC Head / Branch
Head to sell Personal Power at rates higher than the one

- 61 -
indicated above. No approval from the Zone / Central Office
required for the same.
 
 

1.1.7      Pre-payment Penalty

 
A pre-payment penalty of 4% of capital outstanding will be imposed,
in case of pre payment of the loan. At RAC Head’s discretion, 50%
waiver in pre-payment penalty can be granted.
 

1.1.8      Repayment
 
Salaried Individual Normal
12 to 60 months (for CAT A & B) in Equated Monthly Installments
(EMI) from the date of disbursement by way of post-dated cheques
in cases where check-off facility is not available. Otherwise, the
monthly installment will be received from the employer under check-
off facility.
 
 

1.1.9      Residence & Phone Criteria

 

Residence Criteria
 
1.       For Salaried individuals normal,
         Present residence should not be less than 6 months
(mandatory). On declaration backed by FI. 
         If present residence is less than six (6) months, then it should
be company provided or own house or transfer case. Anything
other than the listed cases, guarantor  (local) mandatory. For
Bachelor / Spinster salaried individual staying alone, permanent
residence proof mandatory. If not provided, loan to be rejected.
Also in this case, native place Field Investigation (FI) IS
mandatory either by RAC / SRAC present in that location and if
not, then tele – verification to be done.
 
Permanent residence proof mandatory for all loan cases > Rs 3.0
Lacs.
 

- 62 -
 Phone Criteria
 
1.       For Salaried, a phone (landline) / mobile / WLL mandatory.
Documentary proof required for the phone.
 

1.1.10   Service Charges / Processing Fees

 
2% of loan amount applied for. Net off from the loan amount availed.
Waiver / reduction in processing fees allowed at RAC Heads
discretion.

 1.1.11   Documentary Proofs

 
 
Purpose Salaried Normal
Proof of Identity Passport / Voter's Card / Driving Licence /
PAN card & Photograph
Proof of Income Latest salary slip showing all  deductions or
Form 16 alongwith current dated salary
certificate
Proof of Residence Ration Card/ Passport /Latest Electricity
Bill/ Latest Telephone Bill/ Latest Credit
Card Bill
Bank Statement / Last 6 months
Pass Book where 3 months Bank Statement for CAT A & B
salary / income is employees.
credited
Proof of Telephone Latest bill of landline / mobile / WLL stating
name of borrower or address of borrower
Guarantor Form Yes (Optional)
 

LOAN AGAINST MUTUAL FUNDS

Customer Bank Official briefs him about LMF If the requested
Product. Please refer to the MF scheme is in
approaches the updated list
Bank for Loan
1) Product Policy
available at Retail
approved list
2) Interest rate then Bank
Against Mutual 3) Approved schemes Asset URL
Funds 4) Eligible Loan amount K@axis.com/Retail Official to feed
Asset URL - 63 -
the scheme
(http://20.1.135.107/ details in the
RETAILASSETS- ‘What If –DP’
 If not in approved list, then reject the If customer is not
same interested, thank the
customer for taking
interest in Axis
APPLICATION AND SANCTION STAGE

If customer agrees, Bank Official collects application form and sanction document.
1) Loan is sanctioned as per the product guideline
2) Collect accepted sanction letter along with loan documents from customer. (for other documents to be
collected, please refer to product policy)
3) Take pledge request letter duly signed by the customer.
4) All other documents as per Loan Against Mutual Funds Policy and/or any other docs required for new a/c
opening

ACCOUNT OPENING AND PLEDGE CREATION STAGE

If cust id exists, account opening RAMG Pledge request Activity at
information to be filled up in the pre completes letter is forwarded RAMG
defined template by RAC / Branch and the account to RAMG. RAMG 1) Drawing
send the request info by email to opening send this to Power
lasramgcoordinator@axisbank.com. If procedure respective fund uploading in
no cust id exists, RAC requests the and house. On receipt DPintranet
Branch to create the cust id and then informs of confirmation system
forward the account opening request to RAC . from the fund 2) Drawing
RAMG. house Drawing Power
power is uploaded uploading from
Dpintranet to
ACCOUNT ACTIVATION, SERVICING AND

ity at Branches / RAC:

Branch Task : Regular activity at CO:
1) To issue cheque book to customer. 1) Monitoring of
2) To maintain account related portfolio for
documentation delinquency &
3) Servicing of the account. informing the same to
respective branches.
Informing the customer for
delinquency or unutilized
credit limit. Follow up with
the customer for funding /
additional pledging for
regularization / issuing
intimation for account

- 64 -
 Process Flow for Loan against share

A Customer approaches for LAS

DSA informs him about LAS {product policy}

(Interest rate, Approved scrips etc)

Asks the Customer whether he wants loan against a Single Scrip (Scheme Code – IND02) or a group of Scrips
(Scheme Code – IND01){ Appv List of Shares } (Please refer updated list only)

If Single Scrip,then to check whether If Multiple Scrips,then to check

the same is approved in Single Scrip whether all or atleast 2 of them are
Category (IND02) approved in Multiple Scrip Category
(IND01)
 If not
approved
then reject If Approved then proceed
the same further`

Details of scrips given to Relationship Manager to get an idea on

approx. Drawing Power.

If customer not interested, thank the

customer for taking interest in Axis
Bank.

- 66 -
If Ok with customer, DSA gets the customer to fill up-
Loan Application form for LAS and submits required documents.{Emp-frm1},{Emp-frm2}
Agreement form duly stamped & signed. {Empower Agmt}, {Pers Guarantee},
{Irrevocable Undertaking},{Power of Attorney},{Serv Chrgs Decl},{Letter
of Continuing Security},{Letter of Waiver},{Demand Promissory Note},
{DPN Delv Letter},{Legal note Stamping/Signatory}.
Take pledge Creation forms (3 copies – 1 copy for DP ops, 1 for customer & 1 for
branch records) duly signed by the customer & by the branch official incase
of demat a/c with Axis Bank, if demat a/c with other DP then the customer
has to submit the pledge forms to his DP and submit the acknowledged copy
of the same to RAC for further processing.
Precautions for filling up of Pledge Forms:
To mention correctly ISIN No., Code of Scrips,Scrip Name ,Quantity,
ODMAT A/c No. and DP ID (if DP A/c is with other depositoryAll other
documents as per Empower Policy and/or any other docs required for new a/c
opening (eg. Form for debit card etc).
Take Customer’s signature on sanction letter.

- 67 -
 If the client does not have our DP a/c then inform
the customer to fill up the pledge creation forms of
his DP and send the same to his DP a/c and collect
the acknowledged copy of those forms and submit
the same to RAC for process.

All the documents submitted to RAC for further

process.

After completion of documentation, the request for

account opening and pledge creation to be forwarded
to RAMG and DP ops respectively by RAC

- 68 -
• The cheque book is issued by the Branch where the OD
account is opened.
• Drawing Power upload is on a daily basis.
• Incase of delinquency greater than the prescribed norms
centralized share sale is executed.

DSA to inform the customer for delinquency or

unutilized credit limit.

- 69 -
 Process Flow for Cross Sell

Step 1: Lead Generation and Entry into Telesmart

There would be two modes of Lead Generation.

CET (Customer – Employee Type)

 Customer approaches Axis Bank Branch or other offices such as Regions, Zones or
Central Office.
 Leads are entered into Telesmart directly by the staff or by the Asset Desk Officer (ADO)
stationed at the branch.

CST (Customer – System Type)

 Customer applies through Axis Bank Alternate Channels.
 Leads are automatically entered into Telesmart through a back –end process at CO.

Step 2: Telesmart Customer ID generation

Once the lead is entered into Telesmart, Telesmart Lead ID and Telesmart Customer ID
would be generated.

Step 3: Assigning Lead to CSC

The leads would automatically get assigned to the CSC at the respective RAC. The CSC
would be able to view the details entered at the front end along with the corresponding
Telesmart Customer ID.

Step 4: Re-assigning lead to CS SM

The CSC would then assign the lead to the Cross Sell Sales Manager at the RAC.

Step 5: Customer Contact

The Cross Sell Sales Manager would contact the customer and keep the CSC updated over
the status of the lead.

Step 6: Updation of Lead status in system

The CSC would need to update the status of the lead in Telesmart. Thus, the ADO would be
able to view the status of the leads and inform the lead generating branch staff.

Step 7: Conversion of Leads

- 70 -
The leads that successfully get converted would need to be entered in FinnOne by the RAC
Operations Staff.

Step 8: Entry into FinnOne.

The Leads entered into Telesmart are visible in FinnOne on the next day. While entering the
Cross Sell business into FinnOne, the Telesmart ID would be entered in the Lead field. Also,
the Branch Name would be entered in the Source Code field. The RAC Operations Staff
makes these entries in FinnOne.

Step 9: Lead closure in Telesmart.

Once the business is logged into FinnOne, the corresponding leads in Telesmart would be
closed by the CSC by recording the A/c. no. generated through FinnOne and the amount
disbursed.

1. Lead 2. Telesmart 3. Lead 4. CSC to re-

Generation Customer ID Assigned to assign lead to
and Entry generated CSC CS SM
into
Telesmart

5. Customer
Contact

6. Updation
of Lead
status in
Telesmart

9. Lead 8. Entry into 7. Lead

closed in FinOne. converted
Telesmart Telesmart ID
with A/c. No. also entered
and Amt

- 71 -
PRE-SANCTION PROCESS

- 72 -
 Identifies a potential
customer & the product Gets the file File is submitted back
which can be sold to completed to DSA/ DSE w/o
the customer (Day -1) from the customer login. N
DSA / DST Is
The file is submitted the file
Gets the loan application Collects the loan
to comple
form completely filled application form
sales coordinator te
from the customer along with relevant
(Day -1) along ?
papers & prepares a file
with PF cheque who Y
Is
the file File is submitted
CPA checks the comple N
back to the sales
file te coordinator (Day
against the same ?
\ Y 0)
CPA N
Negativ CPA log-in’s the file
CPA checks the name of the e Y & enters the same
DSE / DST who has logged Match in the sanction
in the file with the list of is found
existing DSE / DST’s (Day tracker
B ?
0)
CPA does the dedupe Starts doing the data
FI is triggered & file N Match
check, CIBIL check & entry in LOS
Is forwarded to is found
PAN card verification (Day 0)
RCU ?
(Day 0)
Y

Shows the file to Credit, who

decides whether the file is to be
processed further or declined,
basis the matches (Day 1)
Credit
Manager
CAM is prepared and
/ RAC Head file is rejected in
Y Further N A
LOS (Day 1)
processi
- 73 -
ng
?
 SANCTION PROCESS

DSA / DST

RCU stamps the file as

Co
Screened, sampled
or RCU Hold (Day 1) mpl
CP ete
A CPA does the eligibility
?
Y
calculation by preparing Prepares a Sanction / Decline letter
a eligibility sheet (Day 1) combined is prepared in triplicate.
list of Two copies are
Receives the RCU Shoots the Legal & queries dispatched
report & FI report and Technical to the & updates to the customer & one
incorporates the same
in file along with his
empanelled the same copy
observations (Day 2) agencies in tracker is attached in the file.
& collects the Sanction tracker is
report Querie
Satisfie
s
Checks the file along with
d
Credit OPPS PROCESS FLOW N CAM is prepared
eligibility calculation & with the
Manager and
CPA’s observations (Day 3) proposa
/ RAC Head file is rejected in
l
Y? N
PD
N Chequ
requi e
red cleared
Y? ?
Conducts a Is
Legal &
PD
technical - 74 -
at the
applicants Reqd.?
- 75 -
 Dos & Don’ts in AOPS

• AOF in black ink & capital letters only

• No cutting/over writing

• Signatures in black ink only

• No multiple inks to be used

• Photograph mandatory - to be affixed/pasted, not stapled

• All photocopies of documents on A4 only

• Separate A4 sheets for separate documents

• Check the application form with the documents, any

discrepancies would be rejected

• Check boxes to be filled

with tick mark correctly

- 76 -
 Contact Centre

•Outsourced contact centre

–To handle calls & emails

–Prospective customers

–Clearly defined role & scope

–Escalation to the concerned authority

•SMS communication to customers

–Carried out in-house

–Instances

•Application form login

•Loan sanction

•Disbursement

•EMI deduction

•Cheque bounce

- 77 -
 Scope of activities
Outboun
d
calls

Outbou
nd
calls
Customer

- Welcome calls to
customers
Inbound - Calls to customers
Emails Custo calls regarding
applications on hold
mer - Calls to RACs to follow
up on the held
application forms
Inbound
Emails calls

- 78 -
Scope of activities

Outboun
- Calls from customers
d
regarding status of
calls application
- Calls from the
customers
regarding claiming
of service
guarantee amount
- Other queries from
Custom customers
er

Inbound
Emails
calls

- 79 -
 Scope of activities
Outboun
d
calls
- Welcome emails to
customers
- Mails to customers
regarding
applications on hold

Custome
r

Inbound
Emails calls

Centralized Monitoring

- 80 -
- 81 -
 COLLECTIONS POLICY

OBJECTIVES
The objective of the collection effort will be to encourage Borrowers to
bring payments to date and to stress the need to make future
payments on time.

COLLECTION DOCUMENTATION
All Collection activities must be documented for all 30 dpd + cases.
The Collection agency and the collectors should record only FACTS
and not opinions, assumptions or derogatory comments on the
borrower.

COLLECTION PROCESS GUIDELINES

The Bank collection procedure will support the following guidelines:-

1. Initial collection practices should be based on the presumption that

the borrower intends to repay. All communications in writing, by
telephone or by personal visit should be based on this presumption
unless the Collector determines that the borrower is deliberately
evading repayment.

- 82 -
2. In all cases, the collection agency / collector should determine the
cause of the delinquency and document it. Borrowers must be dealt
with as individuals who have different attitudes toward obligations.
Collectors should recognize that economic, social or personal
problems may account for slow payment.

3. If the borrower does not indicate a willingness to pay, the Collector

should explain the seriousness of continuing the delinquency and
escalate the Collection effort. The
Collector must not use personal abuse or other unethical tactics as
these may antagonize the borrower or may lead to lawsuits, thereby
frustrating the Collection
effort apart from reputational damage.

4. Legal remedies available to the Bank can be stated as part of the

collection effort.
Legal action should not be cited unless it will be used against the
customer. In case legal proceedings have to be resorted to, the
Branch/Zone/RAC Head should obtain
the approval of the Head Retail Assets or the designated officer at the
Central Office. Alternatively the Senior Vice President Legal
Department can also be contacted by
keeping the Head Retail Assets in the loop.

- 83 -
COLLECTIONS POLICY
RETAIL RISK MANAGEMENT

6. External agencies represent the bank and any unethical actions

on their part may expose the bank to adverse publicity and/or
lawsuits.
7. Hence, all external agencies employed in the collection effort
should be evaluated based on market reputation, infrastructure
availability and experience. The collection agencies will be
appointed with the recommendation of the Branch/Zone/RAC
Head / AVP Retail Assets, Retail Banking and approved by the
Senior Vice President – Retail Banking, Head-Retail Assets or
designated officers at the Central Office.

6. In case of delinquencies that arise due to borrower's dissatisfaction

with the goods or services rendered (due to material defects or
conflict over terms), Collectors should
note that as per the Bank's loan documentation, the Bank is not to be
involved in any dispute relating to quality, condition or delivery date of
the asset procured. The
Collection agency / Collector should investigate the situation and
determine the legal involvement of the Bank. If the Bank is involved,
he should refer to the Branch/Zone/RAC Head, AVP Retail Assets,
who will take requisite legal approvals from the Legal Department at
Central Office. If the Bank is not involved, Collection
efforts are to be resumed.

- 84 -
7. Delinquency charges are to be assessed as per the Power Loan
schedule of Charges
(Format attached as per Annexure “A”) and collected at the time of
delinquent payment receipt.
In case of borrowers who have residual unpaid delinquency charges,
the delinquency charges may be collected at the maturity of the loan.

8. Borrower complaints concerning the Bank's Collection practices

must be promptly investigated. The Bank / Collection agency must
review and respond to the
complaint keeping legal requirements and impact on the Borrower's willingness to pay in
mind.

- 85 -
- 86 -
- 87 -
 FINDINGS AND SUGGESTIONS

As retail segment is the most profitable and less risky- banks has to go
for it. As Indian economy is booming the retail banking sector has a
great advantage – from the point of view of both profitability and
credibility. But the competition also is increasing. So, banks should focus
towards certain factors

 They should adopt the latest technology to avoid the cases of

comparative disadvantages.

 They should offer wide range of products to cater the needs of

various segments.

 They should adopt the corporate governance framework for better

transparency and reliability.

 They should be customer oriented. They should put extra effort to

retain the customers.

 To reduce defalt Axis Bank should keep exposure of unsecured

loans/guarantees within safe limits.

- 89 -
 LIMITATION

GEOGRAPHICAL LIMITATION
The research will carried out with the Axis Bank customer who are
lives on Siliguri and is not applicable to otherparts.

TEMPORAL LIMITATIAON
The data and analysis pertain to the information available during
that period of study only.

PROCEDURAL LIMITATION
The short time span of the project restricts from in depth study in
some areas. Data collected from sources are not adequate in
some cases.

- 90 -
 QUESTIONNAIRE

PERSONAL DETAILS

1. Name of the person:

_______________________________________

2. Address: _________________________

1. Age (in years): ________

2. Gender: Male Female

3. Marital Status: Married  Unmarried

4. Occupation: salaried professional self employed others.

5. Average monthly income (in INR): 1,000-10,000 10,000-

20,000 20,000-40,000 40,000-50,000 above 50,000.

6.Average gross income in Incom-tax file: 2,00,000-4,00,000 

4,00,000-above.

- 91 -
 BANKING HABIT

1.Name of your prime bank…………………………………………………

2.How many times you have taken loan from Axis Bank?
zero 1 2

3.How secure you feel with your financial information available and
managed over internet?
Very secure Some what secure not secure some what insecure
Very insecure

6. Do you consider the Axis Banks’ products are the better

financial product?
 Yes,  N0

7. Do you consider the brand when you choose any retail

banking product?
 Yes,  N0

8.Have you cleared all the due EMI overdue?

yes  No

9.How many overdue you are not clear till now?

1 2 3 4

- 92 -
 SERVICE OFFERED BY BANK

1.Which of the following factors are you consider when you

choose any loan from Axis Bank?

 Need,  Quick processing  customer profitability  customer

satisfaction  past record of the bank,

2.Which of the following services are provided by the bank from where
youchoose that Axis Bank product?
Better service after sales Core service Associated/Supporting
service Service flexibility in payment.

3.What type of service you are using from Axis Bank(RAC)?

Personal loan  Home loan  car loan Mortgage loan

4.Do you feel that the service what they provide is up to the mark?
 Yes,  N0

- 93 -
 CONCLUSION
The implementation of customer profitability has yielded a
number of benifits to the bank. One of the important benefits to
the bank. One of the important benefits was customer has
provided the bank an opportunity to understand its customers well
and accordingly cater to their needs with individualized offerings.
The response time of the bank has redu ced. The effectiveness
and performance of thebank as well as the level of service of the
bank have also improved.The implematation of customer
profitability helped the bank tocome closer to its customers. To
analyze customer profitability we can understand customer
satisfaction, retention,loyalty.To improve customer satisfaction
and increase customer expectations Axis Bank has customized
their product. Delays /defaultsin payments affect the cash flow
forecastsmade by the bank and further result in changed risk
profile,as the bank will now have to face an enhanced interest
reate risk and liquidity risk as well as credit risk. For theis reason
it is neecssary ……..

1. To keep the exposure of unsecured loans within safe limit.

2.To increase provisioning of unsecured NPA under sub-standard

category from 10% to20%.

3.To increase risk weighy on home loanfrom 50 to 75% and

Personal loan from 100% to 125%.

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 REFERENCES

Magazines & Newspapers:

 Business world.

 Business line and The Economic Times.

Website Address:

www.google.com

www.indiainfoline.comn

www.economics.about.com

www.wikipedia.com

www.siligurionline.com

www.siligurimc.org

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 GLOSSARY
Arbitraging

The purchase of securities on one market for immediate resale on

another market in order to profit from a price discrepancy.

Credit risk

Credit risk is risk due to uncertainty in a counterparty's (also called an

obligor's or credit's) ability to meet its obligations. Because there are
many types of counterparties—from individuals to sovereign
governments—and many different types of obligations—from auto loans
to derivatives transactions—credit risk takes many forms. Institutions
manage it in different ways.

Deregulation

Deregulation is the process by which governments remove, reduce, or

simplify restrictions on business and individuals with the intent of
encouraging the efficient operation of markets. The stated rationale for
deregulation is often that fewer and simpler regulations will lead to a
raised level of competitiveness, therefore higher productivity, more
efficiency and lower prices overall. Deregulation is different from
liberalization because a liberalized market, while often having less and
simpler regulations, can also have regulations in order to increase
efficiency and protect consumer's rights

Insourcing

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Insourcing is a business practice in which work that would otherwise
have been contracted out is performed in house. Insourcing is a
business decision that is often made to maintain control of certain critical
production or competencies.

KYC norms

A KYC profile is an aggregation of information on a customer. This

information is used to get to know the customer better and to understand
and above all to be able to assess its business operations and activities.
Information on its financial condition should help the financial institution
to check the plausibility of the statements made.

Leverage

Leverage (or gearing) is using given resources in such a way that the
potential positive or negative outcome is magnified. It generally refers to
using borrowed funds, or debt, so as to attempt to increase the returns to
equity.

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Market risk

Market risk is the risk that the value of an investment will decrease due
to moves in market factors. The four standard market risk factors are:
Equity risk, Interest rate risk, Currency risk, Commodity risk.

Liquidity

Quality that makes an asset easily convertible into cash with relatively
little loss of value in the conversion process. Sometimes used more
broadly to encompass credit in hand and promises of credit to meet
needs for cash.

Non-Performing Asset (NPA)

A NPA is a credit facility in respect of which the interest has remained

past due for two quarters or more

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Outsourcing

The process of outsourcing formalizes the description of the non-core

operation into a contractual relationship between the client and the
supplier. Under the new contractual agreement the supplier acquires the
means of production which may include people, processes, technology,
intellectual property and assets.

Productivity

In economics, productivity is the amount of output created (in terms of goods produced or
services rendered) per unit input used.

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