9th issue e-gyan may, 2014.pdf

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    STATE BANK LEARNING CENTER MASULIPATNAM

    STATE BANK LEARNING CENTER MASULIPATNAM

    E-GYANSTATE BANK LEARNING CENTER

    MASULIPATNAM 

    E-GYAN, PART-9

    May-2014

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    FOREWORD

     Alexander the Great, after having conquered half of the world, was still very sad.

    When ased for the reason, he said, !" never new success could #e such a failure.$

    "n this context, success was really a failure. %uccess &ade the seeer loo outside

    oneself for satisfaction. 'e did not loo at who was the seeer. (he seeer was

    #usy seeing so&ething outside. "t is lie an old lady who was searching for a coin

    under the street light. %he has dro))ed it inside her hut, #ut decided to search

    under the light #ecause it was dar inside the hut.

    Only when you have learned to loo within will real *oy o)ens. Discovering the

    inner source of *oy is the real success. "n the state of dee) slee) all of us are ha))y

    and that ha))iness co&es not fro& outside #ut fro& within.

    Our s&all contri#ution to the %+" co&&unity in the direction of creating awareness

    is the current release of eG-A for /ay, 0123 which e&)hasi4es on conce)tual

    clarity, )rocess integrity and )rocedural consistency in the field of day to day

    #aning )ractices and ex)lores the causes and consequences of various ty)ical

    situations.

    'o)e you lie it5

    We dee)ly acnowledge the ins)iration derived fro& our De)uty General /anager 67ircle Dev Officer %hri.Radharishna Raya#hara& , Asst General /anager 8'R9

    %hri. R.%.. /urthy and 7hief /anager 8:6D9 %hri. /.%ai#a#a which resulted inco&ing out with the eeditions.

    D.%-A/ ;RA%AD

     A%%"%(A( GEERA: /AAGER

    %(A(E +A< :EAR"G 7E(ER

    /A%=:";A(A/

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    PRIORITY SECTOR LENDING – TARGETS AND CLASSIFICATION

    (As on February 01, 2014)

    Compiled by Sri M Sai Chakradhar, Chief Manager (Training))

    1. What is meant by Priority Sector?

    Priority sector refers to those sectors of the economy which may not get timely and adequatecredit in the absence of this special dispensation. Typically, these are small value loans tofarmers for agriculture and allied activities, micro and small enterprises, poor people for

    housing, students for education and other low income groups and weaker sections.

    2. What are the different categories under priority sector?

    Priority Sector includes the following categories:

    (i) Agriculture(ii) Micro and Small Enterprises(iii) Education(iv) Housing(v) Export Credit

    (vi) Others

    3. What are the Targets and Sub-targets for banks under priority sector?

    Categories Domestic commercial banks / Foreignbanks with 20 and above branches (Aspercent of ANBC or Credit Equivalent ofOff-Balance Sheet Exposure, whicheveris higher)

    Foreign banks with less than 20branches (As percent of ANBCor Credit Equivalent of Off-Balance Sheet Exposure,whichever is higher)

    Total Priority Sector 40 32

    Total agriculture 18 No specific target.

    Advances to WeakerSections

    10 No specific target.

    4. What constitutes 'Direct Finance' for Agricultural Purposes?

    (i) Loans to individual farmers [including Self Help Groups (SHGs) or Joint Liability Groups(JLGs), i.e. groups of individual farmers] engaged in Agriculture and Allied Activities, viz., dairy,fishery, animal husbandry, poultry, bee-keeping and sericulture.

    (ii) Loans to Corporates including farmers' producer companies of individual farmers,

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    partnership firms and co-operatives of farmers directly engaged in Agriculture and AlliedActivities, viz., dairy, fishery, animal husbandry, poultry, bee-keeping and sericultureup to anaggregate limit of `2 crore per borrower.

    (iii) Loans to small and marginal farmers for purchase of land for agricultural purposes.

    (iv) Loans to distressed farmers indebted to non-institutional lenders.

    (v) Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies(FSS) and Large-sized Adivasi Multi Purpose Societies (LAMPS) ceded to or managed/controlled by such banks for on lending to farmers for agricultural and allied activities.

    5. What constitutes 'Indirect Finance' to Agriculture?

    (i) If the aggregate loan limit per borrower is more than `2 crore in respect of para. (4) (ii) above,the entire loan will be treated as indirect finance to agriculture.

    (ii) Loans upto `5 crore to Producer Companies set up exclusively by only small and marginalfarmers under Part IXA of Companies Act, 1956 for agricultural and allied activities.

    (iii) Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies(FSS) and Large-sized Adivasi Multi Purpose Societies (LAMPS).

    6. What constitutes Micro and Small Enterprises under priority sector?

    Bank loans to Micro and Small Manufacturing and Service Enterprises, provided these unitssatisfy the criteria for investment in plant machinery/equipment as per MSMED Act 2006.

    Manufacturing sectorEnterprises

    Investment in plant and machinery

    Micro Enterprises Do not exceed twenty five lakh rupees

    Small Enterprises More than twenty fivelakh rupees but does not exceedfive crore rupees

    Service IndustryEnterprises

    Investment in equipment

    Micro Enterprises Does not exceed ten lakh rupees

    Small Enterprises More than ten lakh rupees but does not exceed twocrore rupees

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    7. What is the loan limit for education under priority sector?

    Loans to individuals for educational purposes including vocational courses upto `10 lakh forstudies in India and `20 lakh for studies abroad are included under priority sector.

    8. What is the limit for housing loans under priority sector?

    Loans to individuals up to `25 lakh in metropolitan centres with population above ten lakh and`15 lakh in other centres for purchase/construction of a dwelling unit per family excluding loanssanctioned to bank’s own employees.

    9. What is included under Weaker Sections under priority sector?

    Priority sector loans to the following borrowers are considered under Weaker Sectionscategory:-

    (a) Small and marginal farmers;

    (b) Artisans, village and cottage industries where individual credit limits do not exceed `50,000;

    (c) Beneficiaries of Swarnjayanti Gram Swarozgar Yojana (SGSY), now National RuralLivelihood Mission (NRLM);

    (d) Scheduled Castes and Scheduled Tribes;

    (e) Beneficiaries of Differential Rate of Interest (DRI) scheme;

    (f) Beneficiaries under Swarna Jayanti Shahari Rozgar Yojana (SJSRY);

    (g) Beneficiaries under the Scheme for Rehabilitation of Manual Scavengers (SRMS);

    (h) Loans to Self Help Groups;

    (i) Loans to distressed farmers indebted to non-institutional lenders;

    (j) Loans to distressed persons other than farmers not exceeding `50,000 per borrower toprepay their debt to non-institutional lenders;

    (k) Loans to individual women beneficiaries upto `50,000 per borrower;

    10. What is the rate of interest for loans under priority sector?

    The rate of interest on various priority sector loans will be as per RBI’s directives issued fromtime to time, which is linked to

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    Top 10 economic challenges that Mr Modi Govt. faces Compiled by: S.Sivajee,Mgr(Trg).

    Prime Minister Mr Narendra Modi has promised to unblock stalled investments in power,road and rail projects to revive economic growth that has fallen to a decade low ofbelow 5 per cent.

    Here are the list of Top 10 economic challenges that Mr Modi Govt. faces:

    Goods and Services Tax (GST):

    India's most ambitious indirect tax reform would replace existing state and centrallevies with a uniform tax, boosting revenue collection while cutting businesstransaction costs. GST, which could boost India's economy by up to twopercentage points, has so far faced resistance from various states, includingthose governed by the BJP who fear a loss of their fiscal powers. The BJP aimsto address state concerns and implement GST in an "appropriate timeframe".The Congress party would back the reform in opposition, a senior party membertold Reuters earlier this month. The reform needs broad backing because itrequires a change in the constitution.

    Central bank policies:

    A Reserve Bank of India panel in January proposed key changes includingtargeting consumer price inflation and making a committee responsible formonetary policy, and not the RBI Governor alone. This would require changes tothe RBI Act. The BJP top brass has not spoken widely on the issue, but it willlikely be a tough sell for RBI Governor Raghuram Rajan. He has the backing ofsome global agencies like the International Monetary Fund. Mr Modi'sgovernment may also look to eventually separate the debt management function

    from the RBI, on the grounds that debt management sometimes conflicts with thecentral bank's monetary policy stance.

    Privatisation:

    The new government is likely to focus on selling its holdings in state-run firmsthat could raise much-needed revenues to trim India's ballooning fiscal deficit andboost economic growth. The rising stock market helped New Delhi raise morethan $3 billion (Rs. 18,000 crore at 60 rupees per dollar) via stake sales in the

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    fiscal year to March 31 - but that was only a third of the government's originaltarget. The outgoing government announced plans to raise Rs. 56,900 crorethrough asset sales in 2014-15. This could help achieve a lower fiscal deficittarget of 4.1 per cent of GDP. These estimates may be revised by the nextgovernment.

    Subsidies:

    Mr Modi's government needs to examine how it subsidises basic commodities if itis to contain the fiscal deficit and avoid a ratings downgrade. Subsidies cost an

    estimated 2.2 per cent of India's GDP in 2013-14. The BJP in its manifesto said itwill seek greater fiscal discipline without compromising on the availability of fundsfor development.

    Labour:

    The BJP wants to reform labour laws to boost job-intensive manufacturing andcreate as many as 1 crore jobs a year for young Indians entering the workforce.Changing the law would be politically tricky, though, and Mr Modi may seek toencourage competition between India's states to boost job creation.

    Defence:

    More foreign investment in defence would help India reduce imports, moderniseweapons systems and speed up deliveries of hardware it needs for operationsand training. India, the world's biggest arms importer, now allows 26 per centforeign ownership in defence, and proposals to exceed that limit are consideredonly for state-of-the-art technology. The BJP has said it would allow somegreater foreign investment in defence industries.

    Insurance:

    Attempts to raise the cap on foreign investment in India's $45 billion (Rs. 2.70lakh crore) insurance sector, to 49 per cent from 26 per cent, have metresistance from employees at state-controlled insurers and their political backers.A BJP leader said in March the party had held talks with Congress to break thedeadlock.

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    Banking:

    The new government will need to help state-run lenders battling rising bad loanscaused by the slowing economy, rising interest rates and project delays.Stressed loans in India - either bad or restructured - total $100 billion (Rs. 6 lakhcrore), or about 10 per cent of all loans. Fitch Ratings expects that ratio to reach14 per cent by March 2015. Rising bad loans threaten to choke the gradualrecovery in Asia's third-largest economy, according to the OECD. The interimbudget in February set aside Rs. 11,200 crore to help the sector meet key capitalratios, but analysts say more money is needed.

    Power:

    A BJP-led government may implement the so-called Gujarat model of distributingelectricity that has been widely praised for delivering reliable 24-hour powersupplies in the state. Mr Modi provided different power feeds to farmers,households, and companies instead of a uniform feed in his home state.

    Gas pricing:

    In January, India notified the new gas pricing formula that could double the pricesof locally produced gas from April 1, but the poll regulator stopped thegovernment from raising the prices until the elections are over. RelianceIndustries and its partners BP and Niko Resources last week issued a notice ofarbitration to the government seeking implementation of higher gas prices. TheBJP-led government may review the formula on the lines suggested by a seniorparty leader last year and announce the date of implementation of new prices.

    ** ** **

    Source : NDTV Profit .

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    INDIAN BANKING AT CROSSROADS –CHALLENGE OF RISK MANAGEMENT FROM GLOBALISATION TO

    FINANCIAL INCLUSION

    Compiled By Sri. R.Prabhakara Rao, Manager (Training)

    Most business activities  and operations are driven by considerations of

    returns or profitability.  However t h e se ar ch   for returns exposes the 

    businesses to risks.  Also  risks  escalate  and multiply with  returns sought  –banks are no different; only the element of riskiness in the banks’ business and

    operations  is  higher  as they not only  carry out their operations  with 

    borrowed money and with  high  leverage  but also  attempt to provide a vast

    range of financial services.

    Banks perform  multifarious functions.  However financial intermediation  and

    maturity  transformation  are by far  the most significant  activities  performed  by

    banks. Banks essentially  have a liquid  liability profile,  as against  an illiquid 

    asset  profile,  which  makes them vulnerable to runs and in  this  process

    alone,  they generate or are exposed to different  types of risks.  Credit, 

    market and operational risks are t h e   three pr imary risks  that have a substantial 

    bearing  on the performance of banks. There are a number of  other types of

    risks,  emanating  both from within  and without that the banks are exposed  to in 

    their day to day functioning. 

    As the banks perform  this  role of intermediation  in  fiduciary capacity, ensuring 

    a balance between the risks and returns assumes significance and the effort

    towards achieving  this  balance can b e referred to as risk management. The

    various  financial  crisis  of the past brought to the fore the importance  of

    robust risk  management practices  in  financial institutions  including 

    banks. Progressive technological  developments and advanced modelling 

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    techniques  have, however, rendered risk management a highly complex  andsophisticated discipline lately. 

    Risk  management can be defined  as a function  of risk  identification,

    measurement, monitoring  and reporting  to ensure that the returns are

    appropriate  to the risk  undertaken and the risks  undertaken are

    commensurate with  the risk  appetite  and risk  tolerance.  Risk

    management has to ensure that the bank holds  adequate capital  and

    reserves to make sure that its  solvency  and stability  are not threatened,

    both in  the short and the long run.

    As a response to the global  financial  crisis,  a package of reforms collectively 

    referred  to as Basel  III has been unleashed  as part of the global 

    regulatory  effort  to enhance the soundness and resilience  of the banking 

    system. These reforms  focus on capital,  liquidity,  leverage  and macro prudential

    aspects of banking  risk  management. Basel  III,  on one hand, attempts to

    improve  the quality  and quantity  of loss  absorbing capital  that a bank

    holds  and aims  at increasing  the risk  coverage of the capital framework, in 

    particular  for trading  activities,  securitisations exposures to off-balance 

    sheet vehicles  and counterparty credit exposures arising  out of

    derivatives.  On the other hand, it has devised regulation  for dealing  with 

    systemic  risk  by prescribing  countercyclical capital  requirement,  to contain 

    pro-cyclicality  and a framework  for G- SIBs  and D-SIBs has also been laid 

    down to manage risks arising  from inter-connectedness.

    An internationally  harmonised  Leverage  Ratio  has been introduced as a

    simple  back-stop facility  to complement  the risk  based capital framework  in 

    order to contain  build-up  of excessive leverage  in  the  system and

    comprises  of 3% loss  absorbing  capital  relative  to all  of a bank’s assets,

    including off-balance  sheet assets  without  risk  weighting. Certain 

    enhancements have also  been introduced  to the Basel  II framework  by

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    raising standards for the supervisory review process and public disclosures under Pillar  2 and 3, together with additional guidance in  the areas of sound

    valuation  practices,  stress testing,  liquidity  risk management, corporate

    governance and compensation.  The liquidity requirements  include  a minimum 

    liquidity coverage ratio  (LCR) intended to provide enough cash to cover funding

    needs over a 30-day period of stress. As such under LCR, the banks will be

    required  to hold  a buffer of high-quality  liquid  assets  sufficient  to deal  with 

    cash outflows encountered in  acute short-term stress scenario.  At the

    long-term spectrum, the net stable  funding  ratio  (NSFR) is  intended  to

    address maturity mismatches  over the entire balance sheet for upto one year

    and provides incentives  for banks to use stable  sources to fund  their

    activities. The proposals  for the G-SIBS are tougher, to include combinations 

    of capital surcharges, contingent capital and bail-in debt as also strengthened

    arrangements for cross border supervision and resolution  in view of the higher 

    complexity, connectedness and riskiness. 

    The Reserve Bank too has adopted a proactive  and calibrated

    approach towards demanding  and facilitating  robust risk  management efforts 

    by the banks. Reserve Bank has  been adopting a considered approach of

    limiting  the systemic  risk  originating  from  both the pro- cyclicality  as well  as

    interconnectedness  dimensions.  For example, countercyclical  measures

    were adopted as early  as 2004 to stall  heating up of certain  specific 

    sectors by increasing  the risk  weights  and provisioning  ratios  forsensitive  sectors such as capital  market, housing, commercial  real  estate

    during  the period  when the boom was building up. Several  measures

    were taken to reduce the inter-connectedness among banks on the one

    hand and between banks and NBFCs on the other, to address the cross-

    sectional dimension of systemic risk and regulatory limits have been placed on

    exposures to capital  market exposures. Such  macro-prudential  approach,

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    which  was not widely prevalent  then, s a v e d   the domestic economy from  the

    adverse  shocks during the height of the crisis.

    Implementation of Basel  III Capital Regulations has commenced in India  from 

    April 1, 2013; and it will also be in phases, and would be fully implemented  as

    on March 31, 2019 close to the internationally  agreed Basel  III transitional 

    arrangement. 

    As against  the minimum  Tier  1 leverage ratio of 3 per cent proposed

    by the Basel  Committee  of Banking  Supervision (Basel Committee)  during 

    the parallel  run period  beginning  from  January 1, 2013 to January 1, 2017,

    the Reserve bank has prescribed  a minimum Tier  1 leverage  ratio  of 4.5

    per cent during  the parallel  run period.  The leverage  ratio  framework  is 

    being  revised i n   line  with  the recent proposals of the Basel Committee. 

    A survey on banking  risk  management, conducted under the aegis of the

    Inst i tut e of  International Finance, sees a renewed  focus on risk culture. It reports

    that risk  culture  is  now at centre stage and banks  have made significant 

    progress toward changing  their risk governance frameworks  in  the wake of  the

    financial  crisis.  Board risk committees  are nearly universal,  and members  have

    received  appropriate  training  in  risk management. The role of the chief risk 

    officer  has broadened, while  its seniority  and status have been enhanced.

    They now report either to the chief  executive  officer  or  jointly  to the CEO

    and risk  committee. However, th e survey lame nts that the industry continues 

    to wrestle  with the process of embedding  risk  culture  beyond the boardroom

    and into business units while ensuring adequate risk transparency.

    Risk  appetite  continues  to be an essential part of risk  governance, but the

    industry continues  to be challenged to embed risk  appetite into  business

    decisions. The financial  services  industry  recognized  during the financial 

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    crisis  that boards needed to changefocus 

    from  share price and pro

    fitability 

    to the risks  entailed  in  their  strategies.  Also,  chief  risk officers  needed to be

    empowered to create cultural  change within  their organizations.

    One of the challenges  that banks face  in  developing comprehensive risk 

    measurement models  are the scarcity of available historical  and time  series 

    loss  data and the quality, completeness and reliability of the data available. 

    The regulatory initiatives as also the banks’ individual efforts in this direction  have

    certainly  improved  the risk  management standards in Indian  banks in  the

    last  few  years. Since  the initiation  of structural reforms  in  the Indian 

    banking  sector in  1991, the reach and business volumes  of Indian  banks

    have increased  many fold;  the operations have grown and assumed higher 

    degree of sophistication.  The Indian banks' current capital  base and liquidity 

    position  are broadly  comfortable,  as a starting  point,  vis-a-vis the Basel  III

    guidelines 

    Asset  quality  is an important parameter to measure the health of the banks

    and   concomitant  with  asset  quality  is  the provisioning coverage that

    banks hold  against  stressed assets.  Asset  quality  of the Indian  banking 

    system had improved  significantly  since introduction of prudential  norms,

    S AR F A E SI Act, CDR Mechanism, Credit  Information Companies, etc.

    All Indian  banks, including  foreign  banks in  India,  migrated  to the

    standardized  approaches of Basel  II by March 31, 2009 in  two phases.

    Large sized Indian  banks and banks with  international  presence have

    been encouraged to adopt the Basel  II advanced approaches for

    computation  of capital  for credit,  market and operational  risk.

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    A n o t h e r   very significant  aspect of the bank operations,   just  as in  any

    corporate entity,  and that is  the commercial aspect viz., profitability 

    management. Profitability in banks, as in  the corporates, is reflective of the

    financial  well-being,  health  and robustness of the entity  and has a direct 

    bearing  on its  capital  formation  ability.  On the flip side, if the bank’s strategies,

    business models, planning and operations  and risk  management are weak,

    obsolete  or outdated or not in  tune with  the macro-economic  environment, 

    the income  flowing  there from  may be low or may end up in  losses. Profitability 

    is  impacted  by the business decisions of the bank, the business  model  it 

    pursues, quality and type of asset  base as also  by operational  efficiencies 

    and any  noteworthy s h i f t in  its  strategies  and policies.  The risk  profile  of a

    bank can also  be gauged from  its  income  and expenditure  statement to

    a great extent. However, currentl y alignment  of the risk  management and

    profitability management ob jectives is  not so much in focus. 

    Over the years and especially  in  the wake of the learnings  from  the global 

    financial  crisis,  banks have enhanced their  efforts  in  the direction of

    improving  risk  management practices  as I have enumerated earlier.

    However, going forward  much work still remains. 

    SOURCE: Excerpts from delivered by Shri R Gandhi on the occasion of seminar on Banking organized by

    Indian Merchant’s Chamber Assistance.

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    DISCLAIMER

    “We have made every effort to provide best solutions for the queries raised by

    the operating staff in KHL. However, the readers of this magazine are advised

    to go through the Bank’s Circulars, publications and seek advice from the

    Controllers or experts before taking any action or decision based on the

    information, material contained in this e-magazine.SBI/SBLC do not accept any

    liability for any damage or loss of any kind, howsoever caused or of any

    nature whatsoever as a result (direct or indirect) of the use of the information,

    material contained in this e-magazine.”

    We solicit suggestions/ feedback to [email protected] for improvement of this

    magazine, e-gyan.

    SIR, ONE OF OUR BORROWER HAS APPROACHED OUR BPROUTFIT FOR

    CONVERSION OF EXISTING CASH CREDIT LIMIT TO TERM LOAN. PLEASE

    CLARIFY WHETHER WE CAN CONSIDER THEIR REQUEST. PLEASE ARRANGE

    TO PROVIDE US VIDE CIRCULAR REFERENCE FOR CONVERSION OF EXISTING

    CASH CREDIT INTO TERM LOAN FOR OUR REFERENCE AT THE EARLIEST.

    Sir, Cash Credit is payable on demand, if at the time of review/ renewal if the branch

    officials feels that the account is not running according to the terms of sanction, we may

    call up on the entire advances, if required we may fix limit reduction programme at the

    mutually agreed period not exceeding upto 36 months, with the approval of the

    sanctioning authority, this way we can help the borrower, but there is no such facility like

    converting a CC into Term Loan.

    How can we send a statement of softcopy to a customer? Also how to update mail id in

    cif

    Sir, Please go through the following menu. Reports->Initiate request for host reports->

    screen no.69088 will open. Give the following details: Function: Create Institution Code

    :3 In the field `Request branch input branch code. In the field `Report ID: Input IN055A,

    Give details in the fields` From date, `To date and Give account number in respective

    field and then Transmit. System will generate a reference number. You can find the

    statement in the branch server, which can be copied as a soft copy.

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    DEAR SIR, FOR A CURRENT ACCOUNT INB FACILITY HAS BEEN AS KHATA, ASCUSTOMER REQUESTED FOR TRANSACTION RIGHTS, IT HAS BEEN

    UPGRADED TO VYAPAAR. BUT THE CUSTOMER IS ONLY A SINGLE USER, HOW

    TO CHANGE IT TO SARAL? PLEASE ADVICE

    Sir/ Madam, One should be cautious while providing INB Access as there are lot of

    financial implications as the transfer limits are also high, you can now deactivate the

    CINB Vyapaar facility in Branch Interface and issue Saral in CBS. If the problem is not

    solved, please seek assistance from CINB Department available in Alternate Channels.

    DEAR SIR PLZ PROVIDE STAMP DUTY CIRCULAR IN AGRI SEGMENT SIR HOW

    MUCH STAMP DUTY FOR AB 1 IN CASE AG TERM LOAN SIR HOW MUCH STAMP

    DUTY FOR AB 1 IN CASE AG CASH CREDIT

    Sir, Bank is not issuing stamp duty circular. Stamp duty is state government issue, so

    you can get it from Sub Registration office. For AB1, it is 0.50% of loan amount for TL

    and CC. I will send soft copy to your e-mail regarding stamp duty for various segment

    and facility.

    What is the maximum premium to be paid by a KCC Borrower under PAIS ? ANSWER

    IN WINGS--RS.5 IN SBLC,DEOGARH--RS.15 WHAT IS THE CORRECT ANSWER?

    The premium under PAIS is Rs.15.00 per borrower per year which is to be shared @

    Rs.5.00 by borrower and Rs.10.00 by bank. The premium can also be paid in advance

    for a period of 3 years ( as earlier the KCC is to be issued for 3 years), so the premium

    for 3 years was Rs. 45.00 ( shared atRs. 15.00 by borrower and Rs.30.00 by bank )

    Sir, We propose to break open 70 lockers. In this connection we need appropriate

    format of panchanama certificate for witnessing the event.

    Sir, For the instructions regarding breakopen of lockers please refer to e-Circular

    NBG/PBU/LIMA-SDL/23/2007 - 08 dated Thursday,November 22,2007, wherein the

    relative annexures are also enclosed.

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    e-gyan by SBLC, Masulipatnam, May, 2014 Page 17 

    If one opens PPF account in the name of his mentally handicapped minor son, whatwill be the procedure for payment of proceeds at the time of maturity, when the boy

    becomes major; similarly, what is the operational procedure for the SB accounts

    opened in the name of mentally handicapped persons

    Sir/ Madam, As per Master Circular on Savings Bank Accounts (opening of accounts)

    2.8. Accounts in the names of persons with Austism, Cerebral palsy, Mental retardation

    and Multiple disabilities i. As per the Multiple Disabilities Act, 1999 a legal guardian so

    appointed can open and operate the bank account as long as he remains the legal

    guardian. ii. The provisions of Mental Health Act, 1987 also allows appointment ofGuardian by District Courts. iii. Branches are therefore advised to rely upon the

    Guardianship Certificate issued either by the District Court under Mental Health Act or

    by the Local Level Committees under the above Act for the purposes of opening /

    operating such accounts. Branches have to ensure giving proper guidance so that the

    parents / relatives of the disabled persons do not face any difficulty in this regard. The

    same rules will be applied for opening of PPF account also.

    Dear sir, if both wife and husband works in state bank of india in award staffdesignation, are they both eligible for LFC, can they both claime LFC in different

    financial years?? thanking you sir

    Dear Sir, Please go through SB Times>Human Resources>What's New>HR Handbook

    Volume II> Chapter 12 (Leave Rules). Page No 211 and 223 clarify the query. It says

    that, "Where the husband and wife are both working in our bank, although each will be

    entitled to home travel concession/leave fare concession in his/her own right, the family

    including the husband and wife taken together will not be eligible for the concession

    more than once in the relative period."