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SUMMER INTERNSHIP PROJECT ON RETAIL LOANS OF

SOUTH INDIAN BANK SUMMER TRANING PROJECT REPORT SUBMITTED FOR THE PARTIAL FULLFILMENT OF MASTERS DEGREE IN BUSINESS ADMINISTRATION SESSION: 2010-2012

EXPERIENCE NEXT GENERATION BANKING

Submitted by: Lovejot Kaur MBA (2nd sem.)

Submitted to: Mr. Inderjit Singh (Head of Department)

PREFACE In the present age of business when profit maximization is the prime motive of e very man Price quality & service are the major trust areas to conquer the mar et. Initiat ive, Foresight, talent &competency are imperative to manage the modern business. The MBA course inculcates those s ills in students, which prepare them to face t he challenges of business world. In the midst of the course, summer training in some business organization is arranged for the student that is very essential. S uch training gives practical experience and helps the students to view the real business world closely, which in turn widely influences their conception and per ceptions. The wor outlined in this thesis is aimed at exploring & learning of various asp ects related to loans available in a ban ing organization. Focus of the study is on customer loans viz. personal loan, home loan, education loan, two wheeler lo an, car loan, loan against property and three wheeler loan. This report is inten ded for everyone who is interested in nowing about loans available in the South Indian Ban . Information about the organization and its services to the customer included in this report. The letter section of the report contains various customer loan sch emes. A brief study is conducted to the loan aspects.

Declaration I hereby declare that the following document project titled, Retail Ban ing is an authentic wor done by me as a part of my study at South Indian Ban . To the bes t of my nowledge & belief, it is an original piece of wor and is the sheer out come of my own efforts under the vigilant guidance of my guides; the report has not either in full or in part has been submitted to any other institution for th e award of any other course. I under too the project as a part of my course curriculum of MBA (Management of Business Administration).

ACKNOWLEDGEMENT Talent and capabilities are of course necessary but opportunities and guidance a re two very important bac ups without which any person cannot climb the ladder t o success. Vocational training is indeed and important aspects of MBA program an d I am very grateful to the management team of South Indian Ban , which provide me opportunity to wor as a trainee at its Chandigarh branch. I am indebted to the following officers of South Indian Ban , who have taught me a great deal as I wor ed under their guidance to understand the retail loans wh ich are provided by the ban of Rajasthan ltd I gratefully ac nowledge their val uable teaching contribution through the period of my summer training. I am deeply indebted to Mr. Alexander I.G. Sr. Manger at South Indian Ban , at C handigarh branch, who guided me at every step of this study. I am also grateful to Mr. Amit Singh, assistant manager at the branch, Mr. Basil John, Mr. Pul it, Mrs. An ita Bhandari, Ms. Anchal and Ms. Megha who answered my all queries to su pport my learning to a great extent. We would li e to sincerely than , Mr. Inderjit Singh (Head of Department) and fa culty, INDO GLOBAL COLLEGE OF ENGINEERING, for their valuable suggestions and gu idance and ma ing it possible for me to accomplish the project. I would li e to than my parents and my colleagues who instilled confidence and moral support during various stages during the course of this training.

LOVEJOT KAUR CONTENTS

1.

INTRODUCTION TO BANKING IN INDIA 2. OBJECTIVE OF THE STUDY 3. ORGANIZATION PROFILE 4. OVERVIEW OF THE PROJECT 5. INTRODUCTION RETAIL FINANCE 6. PERSONALS BANKING SERVICES 7. STUDY OF LOANS

PERSONAL LOANS EDUCATION LOANS HOUSING LOANS MOBILOANS CREDIT CARDS 8. DATA ANALYSIS 9. CONCLUSION 10. QUESTIONNAIRE 11. RECOMMENDATIONS 12. GLOSSARY 13. BIBILOGRAPHY

BANKING IN INDIA Ban ing in India has its origin as early as the Vedic period. It is believed tha t the transition from money lending to ban ing must have occurred even before Ma nu, the great Hindu Jurist, who has devoted a section of his wor to deposits an d advances and laid down rules relating to rates of interest. During the Mugal p eriod, the indigenous ban ers played a very important role in lending money and financing foreign trade and commerce. During the days of the East India Company, it was the turn of the agency houses to carry on the ban ing business. The Gene ral Ban of India was the first Joint Stoc Ban to be established in the year 1 786. The others, which followed, were the Ban of Hindustan and the Bengal Ban . The Ban of Hindustan is reported to have continued till 1906 while the other t wo failed in the meantime. In the first half of the 19th century the East India

Company established three ban s; the Ban of Bengal in 1809, the Ban of Bombay in 1840 and the Ban of Madras in 1843. These three ban s also nown as Presiden cy Ban s were independent units and functioned well. These three ban s were amal gamated in 1920 and a new ban , the Imperial Ban of India was established on 27 th January 1921. With the passing of the State Ban of India Act in 1955 the und erta ing of the Imperial Ban of India was ta en over by the newly constituted S tate Ban of India. The Reserve Ban which is the Central Ban was created in 19 35 by passing Reserve Ban of India Act 1934. In the wa e of the Swadeshi Moveme nt, a number of ban s with Indian management were established in the country nam ely, Punjab National Ban Ltd, Ban of India Ltd, Canara Ban Ltd, Indian Ban L td, the Ban of Baroda Ltd, the Central Ban of India Ltd. On July 19, 1969, 14 major ban s of the country were nationalized and in 15th April 1980 six more pr ivate sector commercial ban s were also ta en over by the government.

BANKING AS A CONCEPT Earlier when there was no ban , people were eeping money with them in form of g old. Keeping money at home was not safe so in group they stared to eep it in Te mples. There the money was safe but was not being utilized. Then the priests at temples started to lend it to other needy sectors. From here the basic concept o f ban ing started. OBJECTIVES 1. To 2. To 3. To 4. To 5. To OF BANKING develop saving habit in people. ma e effective utilization of peoples savings. develop the rural areas & industries. facilitate the transfer of money. develop nation as a whole.

HISTORY OF BANKING IN INDIA Without a sound and effective ban ing system in India it cannot have a healthy e conomy. The ban ing 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 a nd internal factors. For the past three decades India s ban ing system has several outstanding achiev ements to its credit. The most stri ing is its extensive reach. It is no longer confined to only metropolitans or cosmopolitans in India. In fact, Indian ban in g system has reached even to the remote corners of the country. This is one of t he main reasons of India s growth process. The government s regular policy for Indian ban since 1969 has paid rich dividen ds with the nationalization of 14 major private ban s of India. Not long ago, an account holder had to wait for hours at the ban counters for g etting a draft or for withdrawing his own money. Today, he has a choice. Gone ar e days when the most efficient ban transferred money from one branch to other i n two days. Now it is simple as instant messaging or dials a pizza. Money has be come the order of the day.

The first ban

in India, though conservative, was established in 1786. From 1786

till today, the journey of Indian Ban ing System can be segregated into three d istinct phases. They are as mentioned below: Early phase from 1786 to 1969 of Indian Ban s (phase1) Nationalization of Indian Ban s and up to 1991 prior to Indian ban ing sector Re forms. (phase2) New phase of Indian Ban ing System with the advent of Indian Financial & Ban ing Sector Reforms after 1991. (phase3) Phase I The General Ban of India was set up in the year 1786. Next came Ban of Hindust an and Bengal Ban . The East India Company established Ban of Bengal (1809), Ba n of Bombay (1840) and Ban of Madras (1843) as independent units and called it Presidency Ban s. These three ban s were amalgamated in 1920 and Imperial Ban of India was established which started as private shareholders ban s, mostly Eur opeans shareholders. In 1865 Allahabad Ban was established and njab National Ban Ltd. was set up in 1894 1906 and 1913, Ban of India, Central Ban , Indian Ban , and Ban of Mysore were set 5. first time exclusively by Indians, Pu with headquarters at Lahore. Between of India, Ban of Baroda, Canara Ban up. Reserve Ban of India came in 193

During the first phase the growth was very slow and ban s also experienced perio dic failures between 1913 and 1948. There were approximately 1100 ban s, mostly small. To streamline the functioning and activities of commercial ban s, the Gov ernment of India came up with The Ban ing Companies Act, 1949 which was later ch anged to Ban ing Regulation Act 1949 as per amending Act of 1965 (Act No. 23 of 1965). Reserve Ban of India was vested with extensive powers for the supervisio n of ban ing in India as the Central Ban ing Authority. During those days public has lesser confidence in the ban s. As an aftermath depo sit mobilization was slow. Abreast of it the savings ban facility provided by t he Postal department was comparatively safer. Phase II Government too major steps in this Indian Ban ing Sector Reform after independe nce. In 1955, it nationalized Imperial Ban of India with extensive ban ing faci lities on a large scale especially in rural and semi-urban areas. It formed Stat e Ban of India to act as the principal agent of RBI and to handle ban ing trans actions of the Union and State Governments all over the country. Seven ban s forming subsidiary of State Ban of India was nationalized in 1960 o n 19th July, 1969, major process of nationalization was carried out. It was the effort of the then Prime Minister of India, Mrs. Indira Gandhi. 14 major commerc ial ban s in the country was nationalized. Second phase of nationalization, Indian Ban ing Sector Reform was carried out in 1980 with seven more ban s. This step brought 80% of the ban ing segment in Ind ia under Government ownership. Ban ing in the sunshine of Government ownership gave the public implicit faith a nd immense confidence about the sustainability of these institutions. Phase III This phase has introduced many more products and facilities in the ban ing secto r in its reforms measure. In 1991, under the chairmanship of Mr. Narasimha Rao,

a committee was set up by his name which wor ed for the liberalization of ban in g practices. The country is flooded with foreign ban s and their ATM stations. Efforts are be ing put to give a satisfactory service to customers. Phone ban ing and net ban i ng is introduced. The entire system became more convenient and swift. Time is gi ven more importance than money. The financial system of India has shown a great deal of resilience. It is shelte red from any crisis triggered by any external macroeconomics shoc as other East Asian Countries suffered. This is all due to a flexible exchange rate regime, t he foreign reserves are high, the capital account is not yet fully convertible, and ban s and their customers have limited foreign exchange exposure.

NATIONALIZATION By the 1960s, the Indian ban ing industry had become an important tool to facili tate the development of the Indian economy. The GOI issued an ordinance and nati onalized the 14 largest commercial ban s with effect from the midnight of July 1 9, 1969 Within two wee s of the issue of the ordinance, the Parliament passed th e Ban ing Companies (Acquisition and Transfer of Underta ing) Bill, and it recei ved the presidential approval on 9 August 1969. A second dose of nationalization of 6 more commercial ban s followed in 1980. Th e stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the GOI controlled around 91% of the ban ing business of India. After this, until the 1990s, the na tionalized ban s grew at a pace of around 4%, closer to the average growth rate of the Indian economy. LIBERALIZATION In the early 1990s, the then Narsimha Rao government embar ed on a policy of lib eralization, and gave licensing to a small number of private ban s. These came t o be nown as New Generation tech-savvy ban s, and included Global Trust Ban (t he first of such new generation ban s to be set up), which later amalgamated wit h Oriental Ban of Commerce, Axis Ban (earlier as UTI Ban ), ICICI Ban and HDF C Ban . This move, ic started the ban ing sector in India. The next stage for the Indian ban ing has been setup with the proposed relaxatio n in the norms for Foreign Direct Investment, where all Foreign Investors in ban s may be given voting rights which could exceed the present cap of 10%,at pres ent it has gone up to 74% with some restrictions. The new policy shoo the Ban ing sector in India completely. Ban ers, till this time, were used to the 4-6-4 method (Borrow at 4%; Lend at 6%; Go home at 4) of functioning. The new wave ushered in a modern outloo and tech-savvy methods of wor ing for traditional ban s. CURRENT SITUATION Currently (2009), ban ing in India is generally fairly mature in terms of supply , product range and reach-even though reach in rural India still remains a chall enge for the private sector and foreign ban s. In terms of quality of assets and capital adequacy, Indian ban s are considered to have clean, strong and transpa rent balance sheets relative to other ban s in comparable economies in its regio n. The Reserve Ban of India is an autonomous body, with minimal pressure from t he government. With the growth in the Indian economy expected to be strong for quite some time-

especially in its services sector-the demand for ban ing services, especially re tail ban ing, mortgages and investment services are expected to be strong. Currently India has 293 schedule commercial ban s(SCBs) 27 public sector ban s ( that with the government of India holding a sta e) 30 private ban s(these do no t have government ta e; they may be publicly listed and trade on sto e exchanges ) 40 foreign ban s and 196 region rural ban s.

OBJECTIVES OF THE STUDY

ns.

To study the features of a loan scheme of The South Indian Ban Ltd, which attra ct customers.

ORGANISATION PROFILE

South Indian Ban (SIB) is a leading commercial ban of India, a pole position achieved, as result of an enduring pursuit of excell ence an intense desire to understand the customers, who are treated to the best of breed products & services. The offerings of the ban are designed from core v alues strengthened by a rich tradition at its best. On 29th January, 1929, South Indian Ban was brought in life by an ensemble of e ntrepreneurs at Thrissur, with a passion to free the society from the vice clutc hes of unscrupulous money lenders. South Indian Ban , as of 30 September, 2010 had achieved a total business of Rs. 43089 crore, comprising a deposit base of Rs. 25060 crore, and an advance base of Rs. 18029 crore. The

To

To

now the various aspects of loans. now the terms and conditions on which some of ban s are providing such loa

To

now the general ban ing function, that is landing money.

ban has a well spread out branch networ of 600+, supplemented by an equally di verse ATM networ of 400+, ensuring footprint in 26 states/ union territories. T he ban has a strong capital base with a diverse shareholding pattern. The capit al adequacy ratio stands at 15.86% as of 30th September, 2010. The ban has a pa tronage of more than 3 million customers, leaders in their own right with their unstinted efforts to build a better world, in their chosen path. Last year, the ban had bagged the 10th Financial Express Best Ban Award among the old generation priva te sector ban s based on a study conducted by Earnest & Young. Dr. V.A. Joseph, th e M.D. & C.E.O, received the award from Hon. Union Finance Minister Mr. Pranab M u herjee. South Indian Ban had also been rewarded with Dun& Bradstreet Ban ing Awards 2009 for the best ban in asset quality among all private sector ban s in India. With a dedicated wor force of more than 5000 professionals and a suit of diverse financial products & services, the ban is fully geared to meet the ever-changi ng needs of the mar et. The ban has always been early birds in embracing the la test technology on offer, but never at the cost of customer inconvenience. The f aith reposed on the ban by the customers throughout these years, is the biggest motivator for increasing the service levels to greater heights. Today the ban is offering all personal ban ing and corporate ban ing services, in addition to the value added financial services such as Insurance, Mutual Fund, and Stoc Tra ding etc. under one roof. Advances of the ban : Total advances of the ban registered a growth of 29.07% to touch a gross level of Rs. 20,659 crore. Total priority sector advances have improved to Rs. 6291.76 crore, constituting 39.40% of the Adjusted Net Ban Credit (ANBC) as at the end of the financial year exposure to agriculture sector amounted to Rs. 3686.70 cr ore, and forming 23.09% of ANBC as at the end of the financial year. Details of the exposure under various subject heads of the priority sector are f urnished below:Amount (in crore) Agriculture & Allied activities Small Enterprises Other priority Sector Total Priority Sector 3686.70 1265.75 1339.31 6291.76

AWARDS AND RECOGINITIONS 1. BUSINESS WORLD INDIAS BEST BANK 2010 AWARD TO SOUTH INDIAN BANK: South Indian Ban has bagged the Business World Indias Best Ban 2010 Award. The Managing Director & Chief Executive Officer of South Indian Ban , Dr. V.A. Jose ph received the award from Shri Pranab Mu herjee, the hon. Union Minister for fi nance, in a function held at Mumbai on 23rd December, 2010. 2. SOUTH INDIAN BANK BAGGED THE BEST WEB SITE AWARD FROM K.M.A.: South Indian Ban has bagged The Best Web Site Award from Kerala Management Asso ciation on 4th February, 2011. The Executive Director Sri Abraham Thariyan and D

eputy General Manager (DICT) Sri P.J. Jacob received the award from Sri Jayaraj, Chief Seceratory of Karnata a at a function in Kochi. There were totally 54 nom inations for consideration of the Best Web Site from various business verticals and this award is a great recognition for the ban . In fact, this is the second award received for the website. The first one being the Best Asian Ban ing Websi te award from Asian Ban ing & Finance Magazine, Singapore in January,2009. 3. BEST BANK AWARD TO SOUTH INDIAN BANK: THE Managing Director and Chief Executive Officer, Dr. V.A. Joseph receives the award for the Best Ban In the old generation ban s category Indias Best Ban Awar ds from Hon. Union Finance Minister Mr. Pranab Mu herjee, Financial Express awards for Indias best ban s were selected by Ernst & Young. The function was organized at the Hotel Taj at Mumbai on 25th July, 2009.

4. AWARD FOR THE BEST BANK IN ASSET QUALITY AMONG ALL PRIVATE SECTOR BANKS: The Managing Director and Chief Executive Officer, Dr. V.A. Joseph received the award for best ban in assets quality among all private sector ban s in India fr om Mr. James E. Thompson, GBS Chairman & Chief Executive, Crown Group of compani es on 18th February, 2009 at Mumbai. Accompanied by Dr. Manoj Vaish President an d CEO, Dun & Bradstreet, India. 5. SOUTH INDIAN BANK BAGS SPECIAL AWARD FROM IDRBT FOR BANKING TECHNOLOGY E XCELLENCE: South Indian Ban has won 9 special awards for excellence in ban ing technology from IDRBT (Institute for Development and Research in Ban ing Technology), the t echnical arm of the RBI. This award was presented to the ban as a national leve l recognition to the excellent contribution made in the area of information syst em, security policies and procedures. Competing against top level ban s in India across all categories such as public sector ban s, private sector ban s, foreig n ban s and cooperative ban s, the recognition from IDRBT is really a feather in the capital. 6. THE BEST ASIAN BANKING WEBSITE AWARD FROM ASIAN BANKING & FINANCE MAGAZINE : South Indian Ban bagged the best Asian Ban ing Website award from the Charlton Me dia Group, Singapore under the banner Asian Ban ing and Finance Retail Ban ing Aw ards 2008 among the 100+ nominations for the best website category from various b an s in Asia, South Indian Ban emerged victories to receive this award as the o wner of the best website www.southindianban .com The ban had earlier won the pr estigious Ban ing Technology Excellence award in the year 2006 from IDRBT, Hyder abad (the technical arm of RBI) for information system security policy and pract ices ca

VISION & MISSION OF THE ORGANIZATION VISION: To emerged as the most preferable ban in the country in terms of brand values, principles with core competence in fostering customer aspirations to build high quality assets leveraging on the strong and vibrant and technological platform i n pursuit of excellence and customer delight and to become a major contributor t o the stable economic growth of the nation.

MISSION: To provide a secure, agile, dynamic and conducive ban ing environment to custome rs with commitment to values and unsha en confidence deploying the best technolo gical standards, processes and procedures where customer convenience is of signi ficant importance and to increase the sta eholders value.

BANKING SERVICES PROVIDED BY THE BANK Personal ban ing The ban has included some general ban ing services provided to the customers on individuals basis. These are 1. Deposit & money placement service 2. Credit/loan facility 3. Auxiliary ban ing services Accounts & Deposits Accounts Savings Ban Accounts Current Deposits Accounts Recurring Savings Deposits (RSD) Accounts Demat account Demat account holder holds their shares in electronic form. Transactions are ma de in the same way as the transfer of money from one account to another account. Mobile Ban ing This facility is provided to the account holder of any one of the ABB branch. Th e account holder can get information about balance in account, current transacti on, minimum statement of 4 or 5 current entries and many more. Phone Ban ing The Ban has started Phone Ban ing Services. Under the Phone Ban ing Services, c ustomers (registered for the services) may get several services just on a phone call. ATM facility The ban is providing 24 hours services to its customers with its ATM machine. T he international debit cum ATM card provides opportunity to draw money in his ac count at any time.

Some ban ing terms Loan: A loan is a type of debt li e all debt instruments; a loan entails the redistrib ution of financial assets over time, between the lender and the borrower. The loan is generally provided at a cost referred to as interest on the debt, wh ich provides an incentive for the lender to engage in the loan.

The effective interest rate, effective annual interest rate, annual equivalent r ate (AER) or simply effective rate is the interest rate on a loan or financial p roduct restated from the nominal interest rate as an interest rate with annual c ompound interest payable in arrears. It is used to compare the annual interest between loans with different compoundi ng terms (daily, monthly, annually or other). The effective interest rate differ s in two important respects from the annual percentage rate: 1. The effective interest rate generally does not incorporate one-time char ges such as front-end fees; 2. The effective interest rate is generally not defined by legal or regulat ory authorities. Effective annual interest or yield may be calculated or applied differently depe nding upon the circumstances. For example, a ban may refer to the yield on a lo an portfolio after expected losses as its effective yield and include income fro m other fees, meaning that the interest paid by each borrower may differ substan tially from the ban s effective yield. Calculation The effective interest rate is calculated as if compounded annually. The effecti ve rate is calculated in the following way, where r is the effective annual rate , I the nominal rate and n the number of compounding periods per year. r = (1+i/n)n-1 Compound interest Compound interest is paid on the original principal and on the accumulated past interest. Compounded quarterly: when the interest is compounded quarterly (4 times a year) , then the money would grow faster at quarterly compounding, as opposed to annua lly compounding. Simple interest: Simple interest is calculated only the principal amount, or on that portion of t he principal amount that remains unpaid. The amount of simple interest is calculated according to the following formula: Isimp = r . B0 . m Where r is the period interest rate (I/m), B0 the initial balance and m the numb er of time periods elapsed. RETAIL LENDING Retail lending is the practice of loaning money to individuals rather th an institutions. Retail lending is done by ban s, credit unions, and savings and loan associations. These institutions ma e loans for automobile purchases, home purchases, medical care, home repair, vacations, and other consumer uses. Retai l lending has ta en a prominent role in the lending activities of ban s, as the availability of credit and the numbers of products offered for retail lending ha ve grown. The amounts loaned through retail lending are usually smaller than tho se loaned to businesses. Retail lending may ta e the form of installment loans, which must be paid off little by little over the course of years, or non-install ment loans, which are paid off in one lump sum. RETAIL FINANCE Ma es for efficient production of goods and services and helps discover, in the process, the right price in the mar et place. The flip side is that it sets off an ugly war of unimaginable proportions, threatening to shred into pieces the ve ry fiber of the free mar et. Perfect competition as envisioned in classical theory is a myth. The competition of the ind one sees now is imperfect. Even this imperfect competition can wor

only when there is a method. This essentially means having reasonably fair mar et practices. Where fair practice is given short shrift, the system turns wea a nd wilts at the slightest hint of a problem. REATIL LOANS Housing Finance: It is provided to an individual singly/jointly for the purpose of construction o f house/ purchase of ready built house/land / extension of existing house/ repai r of house. The amount of finance depends upon the repayment capacity of the app licant. Car Finance: It is provided to an individual singly/jointly, firms etc. for the purchase of n ew brand car for the purpose of personal/ professional/ business needs. The amou nt of finance depends upon the repayment capacity of the applicant. Loan against NSC s /LIC policies etc.: It is provided for the purpose of meeting any contingency/ personal needs. The a mount of finance depends upon the repayment capacity of the applicant. Loan for consumer durables: It is provided to an individual singly/jointly, firms etc. for the purchase of c onsumer durables such as TV, Fridge, Air Conditioner, Computer etc. for personal needs. The amount of finance depends upon the repayment capacity of the applica nt. Loan against Shares: It is provided to an individual singly/jointly, firms etc. against the shares of companies. Loan against Deposits: It is provided against the Term deposit of the ban . Educational loan: It is provided for higher studies.

SIB PERSONAL LOAN ELIGIBILITY Salaried or self employed Professional with regular income PURPOSE For meeting personal/family finance requirements including expenses towa rds purchase of household articles/ white goods/ electronic/ computer equipments , peripherals/ expenses for medical treatment/ inland or foreign leisure travel/ inland or foreign business travel/ travel abroad on employment contract etc. TARGET GROUP There shall be two types of personal loans: 1. For individuals 2. Group Loans 1. Individual Loans (a) Individuals permanently employed in reputed companies / firms/ organizat ions/ Govt. service having remaining period of service equal to the repayment pe riod. (b) Practicing/ employed doctors- having professional medical degree

(c) Businessmen (d) Other categories having sufficient income supported by BMs certificate/ I T Return who are capable of remitting EMIs. (e) NRIs 2. Group Loans to permanent employees of GOI and State Government, PSUs, Bl ue Chip companies and reputed institutions.

MAXIMUM QUANTAM OF LOAN Maximum Rs. 3 lac s subject to the following: Salaried Persons: 15 times of the monthly net salary excluding the proposed loan deductions subject to a maximum of Rs. 3 lac s. Persons engaged in business: Equal to the annual income declared as per the late st IT return subject to a maximum of Rs 3 lac s. NRIs: 50% of the average annual remittance to their NRI account/ spouses domestic account subject to a maximum loan of Rs. 3 lac s. MINIMUM NET TAKE HOME PAY Salaried: Gross salary per month UPTO Rs. 20,000/Above Rs. 20,000/- up to Rs. 30,000/Above Rs. 30,000/-

INTEREST RATES Fixed at B.R. +7.15% with floor rate of 13.25% (Discretion to regional heads to reduce up to 1.50%. REPAYMENT PERIOD Maximum 48 months (EMIs). In this case of group loans, single monthly payment co vering the total monthly installments of all members of the group to be obtained from the institution. MARGIN No margin EXCESS TIME 7 days GUARANTEE Not mandatory

EDUCATION LOAN Education is a right of every child. India can shine when every child in India g et proper education. To ma e possible for every child to get higher education, S outh Indian Ban provides very attractive education scheme by which every studen t can get benefit who have desire of higher education. This education scheme is

minimum net ta e home pay 50% 40% 30%

li e a dream come true for every student. The details of this scheme are as foll ows. Objective:This is an ideal scheme which provides financial support to deserving and merito rious students for pursuing technical / professional higher education in India a s well as abroad. The main emphasis is that every meritorious student even poor is provided with an opportunity to pursue education with the financial support a nd on liberal / simple terms and conditions. Student Eligibility:The student should be an Indian National and secured admission to professional / technical / Graduation / Post Graduation courses in India or Abroad through Ent rance Test / Merit Based Selection process. Sanction of loan will be considered on the basis of academic record, net worth & income of family and scope for securing good / gainful employment. The student will have to submit all required documentary evidences including receipts, estim ates etc. & progress / performance report to the Ban regularly till completion of the course. In case of studies abroad, student should submit the Unique Identification Numbe r (UIN) / copy of Identity Card to the branch. The student / applicant should not be availing / will not avail any education lo an during currency of our loan. Necessary Affidavit / Underta ing to this effect to be obtained. SIB EDUCATION LOANS 1. REVISED VITJNAN PRADHAN SCHEME A) Age limit:Minimum 16 years and maximum up to 40 years.. B) Borrower: Student and Parent / Guardian jointly. C) Studies in India:Graduation courses BA, B.Com, B.Sc. etc. Post Graduation courses Masters & PhD. Professional courses Engineering, Medical, Agriculture, Veterinary, Law, Dental, Management, Computer, ICWA, CA, CFA etc. Courses conducted by IIM, IIT, IISc, XLRI, NIFT etc.

D) Studies in abroad: Graduation for job oriented professional / technical courses offered by reputed universities. Post graduation MCA, MBA, MS etc. Courses conducted by CIMA London, CPA in USA etc. Amount of loan:Need based finance, subject to repaying capacity of the parents / students with margin and the following ceilings :For studies in India: Maximum Rs.10lacs. For studies abroad: Maximum Rs.20 lacs. Margin:Loan up to Rs.4.00 lacs: No margin Loan above Rs.4.00 lacs: (i) 15% for studies in I ndia (ii) 25% for studies out side India.

Processing charges:No processing charges. Excess time:It ta es about 15 days to complete the proceedings of a loan. Foreclosure charges:Fore closure charges will be collected on education loan. Securities:Loan up to Rs.4.00 lacs: No security Loan above Rs.4.00 lacs and up to Rs.7.50 lacs: Collateral Security in the form of thi rd party guarantee to the sa tisfaction of ban . Loan above Rs.7.50 lacs: Collateral security equivalent to the loan amount comprising of any one or more of the following : NSCs, Govt. Secur ities, Ban Deposits and Mortgage of Immovable Property (supported with guarante e of the owner) in favour of the Ban and acceptable to the Ban . Rate of Interest:Category Rate of interest Loans up to Rs. 4.00 lacs Floating rate at B.R. + 5.90%. Interest concessi on of 50 bps (i.e. 0.50%) for fresh educational loans to girl students. Above Rs. 4.00 lacs Floating rate at BPLR + 5.90%. Interest concession of 50 bps (i.e. 0.50%) for fresh educational loans to girl students. Penal Interest: @ 2% to be charged for loans above Rs. 2 lacs for the overdue amount and overdue period. Repayment:Loan will be repaid in 5 - 7 years after commencement of repayment in equated mo nthly installments depending upon quantum of loan and repaying capacity. Repayment will commence six months after completion of course or one month after the student starts earning, which ever is earlier. Interest debited will be recovered from the parents till the repayment commences . (In special / deserving cases interest may be funded for the study period up t o a maximum of 2 years on selective basis at its sole discretion.) If the student is not able to complete the course within the schedule time, exte nsion of time for completion of course may be permitted for a maximum period of 2 years. Documents Required:a) Loan application on Ban s format. b) Passport size photograph. c) Proof of Address(Permanent) / ID Proof. d) Proof of Age. e) Proof of having secured pass mar s in last qualifying examination. f) Letter of admission in professional, technical or vocational courses. g) Prospectus of the course wherein charges li e Admission Fee, Examination Fee, Hostel Charges etc. are mentioned. h) Details of Assets & Liabilities of parents.

i) In case loan amount is above Rs.4.00 lacs : i. Particulars of Guarantors and details of their Assets & Liabilities. ii. If immovable property offered as Collateral Security - copy of Title Dee d, Valuation Certificate and Non-encumbrance Certificate from approved Lawyer of the Ban . j)

2. SIB VIDYANIDHI A) Target group Students who have newly secured admission to selected Professional colleges in K erala. Application must be in the name of the student if he/she has completed 18 years. In the case of minor students, parents shall be the borrowers. In case both the parents are not alive, one independent person closely related to the student an d having individual net worth less than the loan amount shall be the borrower. B) Maximum loan amount Rs. 1.00 lac (Loan amount restricted to 10% of the total tuition fees applicable for the entire course or Rs. 1.00 lac whichever is lower. C) Purpose To enable the student to pay refundable deposit demanded by the educational inst itution. D) Rate of interest Floating rate B.R> + 4.90% (with floor rate of 12.00 %) E) Margin Nil F) Nil Security

G) Guarantee The parents of the students should guarantee the loan. If both the parents are n ot alive, guarantee may be obtained from the guardian or any other person having net worth not less than the loan amount. H) Repayment of loan Bullet repayment from the management of the college immediately after completion of the course. If the interest is refunded, the repayment of the funded interes t to be effected by 60 EMIs which will start one year after the qualifying exam. I) Upfront fees One time upfront fees of 0.50% of loan amount (Discretion to regional heads for waiver). J) penal interest 2% for default of sanction terms.

Photocopy of Passport & Visa, in case of study abroad.

Home loans Ban s have been cashing in on the virtual property grab, which is the new paradi gm about the novae riche aspirations. The new real estate scenario in India is f ueled by the home loans. The magnificent India property scenario on the home loa ns engine has transformed the new middle class aspirations into reality. A.

Target group: Purpose of the loan:

t e) Ta eover of housing loans from other ban s. Quantum of loan: maximum Rs. 1.00 crore

Minimum net ta e home pay: Salaried borrowers: Gross salary per month Minimum net ta e home pay Up to Rs. 20,000/50% Above Rs. 20,000/- up to Rs.30,000/40% Above Rs. 30,000/30% Age limit:Minimum 21 years and maximum up to 65years.. Borrower: Salaried, self employed business classed person can ta e loan. Income:Salaried: Minimum Rs 8500/-p.m. Professionals:Average income of last three years-Rs 1 lac. Quantum of loan:For Purchase of ready built House/Flat, Land and construction thereon. :Maximum Rs.100.00 lacs. For Repair and Renovation Maximum Rs.10.00 lacs Minimum Margin: No. 1 house/ 2 Particulars Revised margin For construction of new house/ purchase of land, purchase of ready built flat. 25% For purchase of old house/ renovation of existing house 30%

Processing charges:2% of prepaid amount However, if repayment is made from own sources, no foreclos ure charges would be applicable Excess time:-

HOME LOAN SCHEME FOR RESIDENTS Individual or individual jointly with spouse a) b) c) d) Purchase of flat or house Construction of flat for own use or house Purchasing land & constructing a house For major repair, renovation, extension or improvemen

It ta es about 7 to 10 days to complete the proceedings of a loan . Foreclosure charges:Charges 2% of prepaid amount at the time of premature r, prepayment up to six installments will not attract her words, if a/c is prematurely closed when last not are outstanding, the foreclosure charges will not be

Repayment: Maximum 20 years in case of purchase/construction of house/flat/apartment inclus ive of moratorium period. Maximum 9 years in case of repairs and renovations. Rate of Interest:Domestic and NRIs home loans Up to Rs. 30.00 lacs Period Fixed rate Floating rate Fixed rate 5 Years 100 bps above corresponding rate within 2 years .40% 100 bps above corresponding rate within 2 years 90% >5 Years 100 bps above corresponding rate within B.R. + 3.65% 100 bps above corresponding rate within B.R + 4.15% Above Rs. 30.00 lacs Floating rate reset clause B.R. + 3 reset clause B.R. +3. 2 years reset clause 2 years reset clause

MOBI LOANS A person wants certain luxuries for enjoying his life and mobiloan is one of the m. A mobiloan gives him convenience to travel one place to another. Now days it become a status symbol of youngster in society. So it becomes a need of every h uman being but some people does not have the capacity to pay a huge amount at a time but they can pay the price in installment so for these people many ban s of fer car loan schemes. In which they can buy and pay its price in installment. MOBILOAN PERSONAL Target group: (1) Salaried persons wor ing in reputed companies/ firms/ organizations Type of vehicle: Any private registration vehicle Cost of vehicle: Shall include basic cost + duties + taxes + octroi + one time life tax + comprehensive insurance premium for the first year.

Margin: Depends on collateral security: (a) 10% margin with 100% collateral (b) 15% margin with 50% collateral (c) 25% margin without collateral Minimum net ta e home pay: Gross salary per month in the range of: Minimum net ta e home pay Up to Rs. 20,000/50% Above Rs. 20,000/- up to Rs. 30,000/- 40%

closure of account. Howeve foreclosure charges. In ot more than six installments levied

Above Rs. 30,000/-

30%

Loan amount: For two wheelers, upper ceiling Rs. 75,000/-. The total cost of the vehicle less the applicable margin shall be the loan amount, subject to the borrowers income level and repayment capacity. Rate of interest: Without collateral security covering the loan amount: floating rate at B.R. + 4. 40%. With collateral security covering the loan amount: floating rate at B.R. + 2.90% . Repayment period: Maximum 60 months. Loan to be closed by monthly installments. Penal interest: 2% for the defaulted amount for the defaulted period.

Document required for loan 1. Identity Proof / Pan Card 2. Residence Proof 3. Driving License / Under Ta ing 4. Last Educational Qualification Certificate 5. Last 6 month ban account statement 6. Detail of assets and liabilities with proof {if own ?spouse / parent hou se ; house tax receipt photocopy of regd. title deed } 7. Last three years IT Return with computation Or Latest salary slip with form 16 / appointment letter from employer. Guarantor Documents:1. 2. 3. 4. se ; 5. Identity Proof / Pan Card Residence Proof Last 6 month ban account statement Detail of assets and liabilities with proof {if own ?spouse / parent hou house tax receipt photocopy of regd. title deed Last three years IT Return with computation Or Latest salary slip with form 16 / appointment letter from employe

r. CREDIT CARDS A credit card is a small plastic card issued to users as a system of payment. It allows its holder to buy goods and services based on the holders promise to pay for these goods and services. The issu er of the card creates a resolving account and grants a line of credit to the co nsumer from which the user can borrow money for payment to a merchant or as a ca sh advance to the user. Credit card allows the consumers a continuing balance of debt, subject to interest being charged. Credit cards are issued by ban s or credit unions and are the shape and size specified by the ISO/IEC 7810 standard as 1D-1.

History of credit cards: The modern credit card was the successor of a variety of merchant credit schemes . It was first used in the 1929s in the United States, specifically to sell fuel to a growing number of automobile owners. In 1938, several companies started to accept each others cards. How a credit card wor s? Credit cards are issued by a credit card issuer, such as a ban or credit union , after an account has been approved by the credit provider, after which a card holder can use it to ma e purchase at merchants accepting that card. Merchants o ften advertise which cards they accept by displaying acceptance mar s- generally derived from logos or may communicate this orally, as in credit cards are fine. When a purchase is made, the credit card user agrees to pay the card issuer. The card-holder indicates consent to pay by signing a receipt with a record of the card details and indicating the amount to be paid or by entering a Personal Iden tification Number (PIN) also. Many merchants now accept verbal authorization via telephone and electronic auth orization using the internet, nown as a Card Not Presentation Transaction (CNP) . Each month the credit card user is sent a statement indicating the purchases und erta en with the card, any o/s fees and the total amount owed. After receiving t he statement, the card holder may dispute any changes that he/she thin s are inc orrect. The credit issuer charges interest on the amount owed if the balance is not paid in full. In addition, if the credit card user fails to ma e at least the minimu m payment by the due date, the issuer may impose late fees. Benefits to consumers: The main benefit to each customer is convenience. Compared to debit cards and ch eques, a credit card allows small short term loans to be quic ly made to a custo mer who need not calculate a balance remaining before every transaction.

DATA ANALYSIS ANALYSIS OF THE DATA COLLECTED THROUGH THE QUESTIONNAIRE I have analyzed the data collected through the questionnaire and have classified the data into tables. TABLE-I The given below BAR graph shows the response of 100 customer. SERVICES EXPECTED FROM SBI QUICK RESPONSE GOOD CUSTOMER RELATION EXTRA FACILITY FOR EXISTING CUSTOMER 38 37 25

INTERPRETATION: Out of 100 customers, 38 of them said that they expect QUICK RESPONSE from the SIB ban , 37 said they expect GOOD CUSTOMER RELATION and 25 customers said that they expec t EXTRA FACILITY FOR EXISTING CUSTOMER. TABLE-II The given below Bar chart shows the SATISFACTION LEVEL OF CUSTOMER AFTER AVAILING LOAN SATISFACTION AFTER AVAILING LOAN SATISFIED 42 NORMAL 34 DISSATISFIED 24 INTERPRETATION Out of 100 customers 42 were found SATISFIED after ta ing loan from SBI, 34 Cust omer were NORMALY satisfied from SBI and 24 were DISSATISFIED because of interes t charged. TABLE-III The given below Bar chart shows the CUSTOMER WANTS TO TAKE ANOTHER LOAN FROM SBI CUSTOMER WANTS TO TAKE ANOTHER LOAN FROM SBI YES 68% NO 32%

Interpretation: Out of 100 customers, 68 would li e to ta e another loan from SBI but 32 would n ot li e to ta e another loan from SIB. TABLE-IV The given Bar graph shows THE INFLUENCING FACTOR FOR TAKING LOAN FROM SIB INFLUENCING FACTOR FOR LOAN FROM SBI ADVERTISEMENT FRIENDS EASY AVAILABILITY OF LOAN TRUST 26 20 22 32

Interpretation: Out of 100 customers, 32 said trust, 26 said advertisement, 22 said easy availab ility and rest 20 said friends and relatives about the influence factor to ta in g loan from SIB.

TABLE-V The given chart shows the processing procedure while availing loan:

Interpretation: Out of 100 customers, 42 peoples said good, 30 people said excellent and rest 28 people said average about the processing procedure while availing the loan.

TABLE-VI The given chart shows the co-operation of the ban employees in processing and helping in documentation:

Interpretation: Out of 100 customers 55 peoples said good, 21 said excellent and 24 peoples said average about co-operation of employees in processing and documentation.

TABLE-VII The given chart shows the interest rate charged upon the loan available:

Interpretation: Out of 100 peoples 49 said averages, 36 said good and 15 said excellent about the interest rate charged upon the loan available.

CONCLUSION

Most of the customer feel comfortable and strong satisfaction to wor cause finical reduce paper wor , fear of loss data, time wastage etc.

Technologically updated and provides best services of mobile ban ing. with it be

Customer satisfaction is the prime concern of the ban tomers complaint.

and tries to minimize cus

After analysis and interpretation I conclude that South Indian Ban e to satisfy its customers by providing various financial services.

has been abl

It provide full of security any information an any time what you wants to gain. i t creates transactions revolution in ban ing sector. It provides less interest rate.

QUESTIONNAIRE Dear Sir/ Madam, As part of my MBA curriculum, I, Lovejot Kaur, am conducting a mar et research r egarding the mar eting of retail lending for which I need your personal views re garding ban ing products & services in shape of a questionnaire designed by me. The data being collected are solely for academic purpose. I request you to indl y extend your co-operation. 1) 2) Name: Profession:

4) a) b) c) d) 5) a) b) c) 6) a) b) c) d)

Annual Income (in Rs.):60000-200000 200000-400000 400000-1000000 Above 1000000 What ind of service or services do you expect from SIB? Quic Response Good Customer Relation Extra Facility for Existing Customer

What influence you at ta ing loan from SBI? Advertisement Friend/Relative Easy availability loan Trust

3) A) B) C) D)

Age group :( please tic ) 18-30 yrs. 31-40 yrs. 41-50 yrs. 51-60 yrs.

7) a) b) c) 8) ng a) b) c)

How do you find the processing procedure while availing the loan? Excellent Good Average

9) How do you find the interest rate charged upon the loan available? a) Excellent b) Good c) Average 10) Would you li e to ta e another loan from SIB in future? a) Yes b) No 11) Your overall level of satisfaction with SIB: a) Satisfied b) Normal c) Dissatisfied

RECOMMENDATIONS Many of the customers, during the survey had complained with the wor ing of ATM machines. The ban should consider this problem and try to overcome with the pro blem. Some of customer had insisted that the ban should give detailed explanation of the deductions made from their accounts.

The customers should given brochures and pamphlets containing information about the use of fianc.

SWOT ANALYSIS

Loc er facility is limited. Ban should consider it to increase.

How do you find the cooperation of the ban you with documentation? Excellent Good Average

employees in processing and helpi

STRENGTS Strong financial position of South Indian Ban . Strong reputation of the ban in the South. Strong advertising & promotion. Sound organization climate based on mutual trust. Every service and fastest means of communication. WEEKNESS ATM machines are few in numbers in the North. Less number of branches in the Northern India. OPPORUNITIES Global mar ets. Sophisticated use of E-commerce and internet techniques. THREATS New competitors such as PNB, ICICI and HDFC etc. are entering to the mar ets. Fluctuation of interest rate comparison of other ban s. Fast technological changes in the future.

GLOSSARY Foreclosure charges: Charges for closing the loan account before maturity.

Panel interest: This interest is charged when commitments made by the borrower a re not met. Processing charges: Time consumed in whole process of sanctioning a loan after proper documentation & fulfillment of all formalities. EMI: Equated monthly installment.

Lending margin: Different between the project cost & amount provided by the ban to the customer.

BIBLIOGRAPHY

www.google.com www.rbi.co.in www.finance.indiamart.com

South Indian Ban s internal circulars

Help provided by the project guide, trainer.

Manuals of the ban

Boo

of instructions of the ban

Websites www.southindianban .com