a summer project report

8/4/2019 A Summer Project Report

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A SUMMER PROJECT REPORT

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A SUMMER PROJECT REPORT

ON

Processing of Retail Loan Proposals at

Retail Loan Factory of Bank of Baroda,

Ahmedabad

by

Hiral Panchal (4033)

K.S.School of Business Management

Gujarat University

A report submitted in partial fulfillment of

the requirements of

MBA Program

Submitted to

Bank of Baroda


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Acknowledgement

The completion of any task depends upon the co-operation, coordination and

consolidated efforts of several resources of knowledge, energy, and time and aboveall the proper guidance of the experienced bankers. Therefore I approached this

matter of Acknowledgement through these lines trying my best to give full credit

where it deserves.

I wish to express my gratitude to our institute, which has provided me the

opportunity to fulfil the most cherished desire to reach my goal. I am thankful to all

those who generously helped me to compile this project with their knowledge and

expertise. Firstly I owe a great debt to, K.S.SCHOOL OF BUSINESSMANAGEMENT for obliging the project, thus giving me chance to broaden my

horizon and providing me all necessary resources in college to assist me in the

project.

Also I owe a great debt to Mr.A.K.SHAH, Chief Manager of RLF Bank of Baroda

who has been nominated as mentor for my project and also thankful to all staffs of

RLF as well as Head Office of Bank of Baroda for providing me the necessary

guidelines regarding the project, for helping me to track the first hand information

and supporting me in the carrying out the project successfully.

As well as reposing a belief in me, this was essential for the completion of this

project.

I express my sincere thanks to Mr.PRIYA KUMAR, Senior Manager (HRM) at

Regional Office Bank of Baroda Ahmedabad for giving me the opportunity to choose

this topic and the project. I also would like to thank Mr.ANJAY KUMAR Manager at

RLF Ahmedabad for the support and providing necessary guidance for completion of

this project and allowing me the access to the necessary resources to gather primary

information.

I would also like to thank all the persons for their contribution for shaping up of this

project, who helped me directly or indirectly in completing this project.

2.


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PrefaceThe project is prepared during the vocational training under taken at RLF on partial

fulfillment of the course of master of business administration

Hence, this report is designed with the objective to gain practical knowledge.According to old saying there is a huge difference between To say and to do.

To take theorical knowledge is important but it becomes more valuable when weapply it in the practice.

So, there is a huge difference between theory & practical. For filling this requirementtraining in the RLF is very practical exposure for me.

This training provides golden opportunity for all students, especially when themanagement does not have perfect knowledge & understanding of working in theorganization.

Hence, this report is designed with the objective to gain practical knowledge.


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Table of content


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OBJECTIVE AND SCOPE OF THE PROJECT

OBJECTIVE:

The main objective of the project is to know the different loan proposals at RLFand how they are being processed. The main objectives of this project are asunder :

Identify the requested terms of loan, it include loan length, limit of the loan,interest rate, etc.

To know the procedure of the loan from sales lead to the disbursement. To know what are the necessary documents for the loan.

Scope:

Retail segment is attracting attention to all banks, financial institution, foreignbank etc. now days there is a boom in retail banking sector. So, there is a widescope of retail segment.

Now days the population is increasing day by day. It causes to increases thenumber of housing loan.

There is a golden opportunity for students in the abroad. The easy & openadmission system is attracting many of the students of India. So, the studentswho want to go there, they can avail the education loan for their bright future& study.

With the increasing of globalization &technology, the living standard of peoplehas also improved. So, it will result to increase other loans like housing loan,car loan, traders loan, professional loan.


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Indian banking industry


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Glance on Indian banking industry

Indian bank today is witnessing drastic change. The liberalization of financialsector & business sector reforms have exposed the Indian banks to a new economic

environment that is characterized by increased competition & new regulatory

requirement. As a result there is a transformation in every sphere of activities of the

banks in India.

The last decade has seen many positive developments in the Indian banking

sector. The Policy makers, which comprise the Reserve Bank of India (RBI), Ministry

of Finance and related government and financial sector regulatory entities, have

made several notable efforts to improve regulation in the sector. The sector now

compares favorably with banking sectors in the region on metrics like growth,

profitability and non-performing assets (NPAs). A few banks have established an

outstanding track record of innovation, growth and value creation. This is reflected in

their market valuation. And quickly to build an enabling, rather than a limiting,

banking sector in India.

Indian banks have compared favorably on growth, asset quality and profitability

with other regional banks over the last few years. The banking index has grown at a

compounded annual rate of over 51 per cent since April 2001 as compared to a 27

per cent growth in the market index for the same period. Policy makers have madesome notable changes in policy and regulation to help strengthen the sector. These

changes include strengthening prudential norms, enhancing the payments system

and integrating regulations between commercial and co-operative banks.

OPPORTUNITIES AND CHALLENGESFOR PLAYERS

The bar for what it means to be a successful player in the sector has been raised.Four challenges must be addressed before success can be achieved. First, the

market is seeing discontinuous growth driven by new products and services that

include opportunities in credit cards, consumer finance and wealth management on

the retail side, and in fee-based income and investment banking on the wholesale

banking side. These require new skills in sales & marketing, credit and operations.

Second, banks will no longer enjoy windfall treasury gains that the decade-long

secular decline in interest rates provided. This will expose the weaker banks. Third,

with increased interest in India, competition from foreign banks will only intensify.

Fourth, given the demographic shifts resulting from changes in age profile and

household income, consumers will increasingly demand enhanced institutionalcapabilities and service levels from banks.


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ONE OF THREE SCENARIOS WILL

PLAY OUT BY 2010The interplay between policy and regulatory interventions and management

strategies will determine the performance of Indian banking over the next few years.

Legislative actions will shape the regulatory stance through six key elements:

industry structure and sector consolidation; freedom to deploy capital; regulatory

coverage; corporate governance; labour reforms and human capital development;

and support for creatingindustry utilities And service bureaus.

Three scenarios can be defined to characterize these

outcomes:

A) High performance scenario:

In this scenario, policymakers intervene only to the extent required to ensure system

stability and protection of consumer interests, leaving managements free to drive far-

reaching changes. Changes in regulations and bank capabilities reduce

intermediation Costs leading to increased growth, innovation and productivity.

Banking becomes an even greater driver of GDP growth and employment and large

sections of the population gain access to quality banking products.

b) Evolution:

Policy makers adopt a pro-market stance but are cautious in liberalizing the industry.

As a result of this, some constraints still exist. Processes to create highly efficient

organizations have been initiated but most banks are still not best-in-class operators.

Thus, while the sector emerges as an important driver of the economy and wealth in

2010, it has still not come of age in comparison to developed markets. Significant

changes are still required in policy and regulation and incapability-building

measures, especially by public sector and old private sector banks.

In this scenario, M&A activity is driven primarily by new private banks, which take

over some old private banks and also merge among themselves. As a result, growth

of these banks increases to 35 percent.


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c) Stagnation:

In this scenario, policy makers intervene to set restrictive conditions and

management is unable to execute the changes needed to enhance returns to

shareholders and provide quality products and services to customers. As a result,growth and productivity levels are low and the banking sector is unable to support a

fast-growing economy. This scenario sees limited consolidation in the sector and

most banks remain sub-scale.

The extent to which Indian policy makers and bank managements develop and

execute such clear and complementary agenda to tackle emerging discontinuities

will lay the foundations for a high-performing sector in 2010.


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History of Bank of Baroda

A saga of vision and enterprise

It has been a long and eventful journey of almost a century across 25

countries. Starting in 1908 from a small building in Baroda to its new hi-rise and hi-

tech Baroda Corporate Centre in Mumbai is a saga of vision, enterprise, financial

prudence and corporate governance.

It is a story scripted in corporate wisdom and social pride. It is a story crafted inprivate capital, princely patronage and state ownership. It is a story of ordinary

bankers and their extraordinary contribution in the ascent of Bank of Baroda to the

formidable heights of corporate glory. It is a story that needs to be shared with all

those millions of people - customers, stakeholders, employees & the public at large -

who in ample measure, have contributed to the making of an institution.

Mission statementLeveraging technology for augmenting businessgrowth and profitability.


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LOGOBanks new logo is a unique representation of a universal symbol. It comprises

dual B letterforms that hold the rays of the rising sun .Bank call this the BarodaSun. The sun is an excellent representation of what bank stands for. It is the single

most powerful source of light and energy its far reaching rays dispel darkness to

illuminate everything they touch. At Bank of Baroda, bank seeks to be the source

that will help all our stakeholders realise their goals. To our customers, we seek to

be a one-stop, reliable partner who will help them address different financial needs.

To our employees, bank offer rewarding careers and to our investors and business

partners, maximum return on their investment on the single-colour, compelling

vermillion palette has been carefully chosen, for its distinctiveness as it stands for

hope and energy

Bank also recognizes that our bank is characterized by diversity. The network of

branches spans geographical and cultural boundaries and rural-urban divides.

Customers come from a wide spectrum of industries and backgrounds. The Baroda

Sun is a fitting face for brand because it is a universal symbol of dynamism and

optimism it is meaningful for many audiences and easily decoded by all.

Banks new corporate brand identity is much more than a cosmetic change. It is a

signal that we recognize and are prepared for new business paradigms in a

globalised world. At the same time, bank will always stay in touch with its heritageand enduring relationships on which bank is founded. By adopting a symbol as

simple and powerful as the Baroda Sun, bank hope to communicate both.

HERITAGE It all started with a visionary Maharaja's uncanny foresight into the future of tradeand enterprising in his country. On 20th July 1908, under the Companies Act of

1897, and with a paid up capital of Rs 10 Lacs started the legend that has now

translated into a strong, trustworthy financial body, THE BANK OF BARODA.

It has been a wisely orchestrated growth, involving corporate wisdom, social pride

and the vision of helping others grow, and growing itself in turn.

The founder, Maharaja Sayajirao Gaekwad, with his insight into the future, saw "a

bank of this nature will prove a beneficial agency for lending, transmission, and

deposit of money and will be a powerful factor in the development of art, industries

and commerce of the State and adjoining territories."


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Journey from 1908 to 2009: 1908-1958

1908: Maharaja Sayajirao Gaekwad III set up Bank of Baroda (BOB).

1910: BOB established its first branch in Ahmadabad.

1953: BOB established a branch in Mombasaand another inKampala.

1954: BOB opened a branch in Nairobi.

1956: BOB opened a branch in Dar-es-Salaam.

1957: BOB established a branch in London.

1959: BOB acquired Hind Bank.

1960s-1970

1961: BOB merged in New Citizen Bank of India. This merger helped it

increase its branch network in Maharashtra.

BOB also opened a branch in Fiji

1962: BOB opened a branch in Mauritius. 1963: BOB acquired Surat Banking Corporation in Surat,Gujarat.

1964: BOB acquired two banks, Umbergaon Peoples Bank in southern

Gujarat and Tamil Nadu Central Bank in Tamil Nadu state.

1964: BOB lost its branch in Narayanjanj (East Pakistan) due to the Indo-

Pakistan war. It is unclear when BOB had opened the branch.

1965: BOB opened a branch in Guyana.

1967: The Tanzanian government nationalized BOBs three branches there

and transferred their operations to the Tanzanian government-owned

National Banking Corporation.

1969: The Government of India nationalized 14 top banks, including BOB.

BOB incorporated its operations in Uganda as a 51% subsidiary, with thegovernment owning the rest.

2000s

2000: BOB established Bank of Baroda (Botswana).

2002: BOB acquired Benares State Bank in Benares at the Reserve Bankof Indias request.
http://en.wikipedia.org/wiki/Maharaja_Sayajirao_Gaekwad_IIIhttp://en.wikipedia.org/wiki/Ahmedabadhttp://en.wikipedia.org/wiki/Mombasahttp://en.wikipedia.org/wiki/Mombasahttp://en.wikipedia.org/wiki/Kampalahttp://en.wikipedia.org/wiki/Kampalahttp://en.wikipedia.org/wiki/Nairobihttp://en.wikipedia.org/wiki/Dar-es-Salaamhttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Fijihttp://en.wikipedia.org/wiki/Mauritiushttp://en.wikipedia.org/wiki/Surathttp://en.wikipedia.org/wiki/Surathttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Tamil_Naduhttp://en.wikipedia.org/wiki/Guyanahttp://en.wikipedia.org/wiki/Ugandahttp://en.wikipedia.org/wiki/Ugandahttp://en.wikipedia.org/wiki/Benareshttp://en.wikipedia.org/wiki/Ahmedabadhttp://en.wikipedia.org/wiki/Mombasahttp://en.wikipedia.org/wiki/Kampalahttp://en.wikipedia.org/wiki/Nairobihttp://en.wikipedia.org/wiki/Dar-es-Salaamhttp://en.wikipedia.org/wiki/Londonhttp://en.wikipedia.org/wiki/Maharashtrahttp://en.wikipedia.org/wiki/Fijihttp://en.wikipedia.org/wiki/Mauritiushttp://en.wikipedia.org/wiki/Surathttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Gujarathttp://en.wikipedia.org/wiki/Tamil_Naduhttp://en.wikipedia.org/wiki/Guyanahttp://en.wikipedia.org/wiki/Ugandahttp://en.wikipedia.org/wiki/Benareshttp://en.wikipedia.org/wiki/Maharaja_Sayajirao_Gaekwad_III


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2002: Bank of Baroda (Uganda) was listed on the Uganda Securities

Exchange (USE).

2003: BOB opened an OBU in Mumbai.

2004: BOB acquired the failed Gujarat Local Area Bank, and returned to

Tanzania by establishing a subsidiary in Dar-es-Salaam.

BOB also opened a representative office each in Kuala Lumpur, Malaysia,and Guangdong, PRC.

2005: The Reserve Bank of India (RBI), has approved a joint venture

between BOB, Bank of Maharashtra (BOM), and Oriental Bank of

Commerce (OBC) to set up a bank in Malaysia. The new bank will reside in

Kuala Lumpur, which has a large population of Indians. The initial capital

required will be US$78 million; BOB will invest 40%, and the other two banks

will invest 30% each. The JV is awaiting approval from the Malaysian CentralBank. Bank has built and commissioned its own State-of-the-Art Global Data

Centre (DC) in Mumbai for running its centralized banking solution(CBS) and

other applications in 1900+ branches across India and 20 other counties

where the Bank is operating.

BOB also opened a representative office in Thailand.

2006: BOB established an Offshore Banking Unit (OBU) in Singapore.

2007: In its centenary year, BOB's total business crossed 2.09 lakh crores,its branches crossed 1000, and its global customer base 29 million people.

2008: BOB opened a branch in Guangzhou,China (02/08/2008).

2009: Bank of Baroda registered with the Reserve Bank of New Zealand,

enabling it to trade as a bank in New Zealand (2009/09/01)
http://en.wikipedia.org/wiki/Bank_of_Baroda_(Uganda)http://en.wikipedia.org/wiki/Uganda_Securities_Exchangehttp://en.wikipedia.org/wiki/Uganda_Securities_Exchangehttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Tanzaniahttp://en.wikipedia.org/wiki/Dar-es-Salaamhttp://en.wikipedia.org/wiki/Kuala_Lumpurhttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Guangdonghttp://en.wikipedia.org/wiki/People's_Republic_of_Chinahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Kuala_Lumpurhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Thailandhttp://en.wikipedia.org/wiki/Guangzhouhttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Reserve_Bank_of_New_Zealandhttp://en.wikipedia.org/wiki/New_Zealandhttp://en.wikipedia.org/wiki/Bank_of_Baroda_(Uganda)http://en.wikipedia.org/wiki/Uganda_Securities_Exchangehttp://en.wikipedia.org/wiki/Uganda_Securities_Exchangehttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Tanzaniahttp://en.wikipedia.org/wiki/Dar-es-Salaamhttp://en.wikipedia.org/wiki/Kuala_Lumpurhttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Guangdonghttp://en.wikipedia.org/wiki/People's_Republic_of_Chinahttp://en.wikipedia.org/wiki/Reserve_Bank_of_Indiahttp://en.wikipedia.org/wiki/Malaysiahttp://en.wikipedia.org/wiki/Kuala_Lumpurhttp://en.wikipedia.org/wiki/Mumbaihttp://en.wikipedia.org/wiki/Thailandhttp://en.wikipedia.org/wiki/Guangzhouhttp://en.wikipedia.org/wiki/Chinahttp://en.wikipedia.org/wiki/Reserve_Bank_of_New_Zealandhttp://en.wikipedia.org/wiki/New_Zealand


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Introduction of Retail Loan Factory

The Bank of Barodahas launched its new retail loan delivery modelcalled the urban retail loan factory

The model has been designed under Banks project parivartan, which aims to

reposition the bank as a sales & service organization offering a complete range

of life cycle & need of each segment of customers, according to a press release.

The idea behind the model was to speedup the processing of retail loans in

present competition environment.

RLF is having twin outfits comprising a sales team & a centralized processing

cell (CPC) manned by the bank employees.

Here, the sales executive will visit potential clients, and helps the clients to fill up

the loan application form, if the file is viable & submit the file to RLF for further

procedure while other functionaries work to sanction the loan.

The central processing cell shall have simple processes powered by the use of

technology to ensure sanction of loan within the set timelines.

The retail loan delivery outlet would offer loans within six working days. "We

believe in providing credit fast and without hassles," said AK Khandelwal, the

then Chairman and Managing Director.

"In this innovative retail loan delivery model, the potential clients are reached bysales executives. While a team of dedicated employees works to sanction the

loan".

SME SECTOR: Bob has rolled out small & medium enterprise loan factory across three

locations in Mumbai.

The banks SME segment has been growing at the rate of 25% this year.

Currently bank has about 15 SME loan factories.


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Organization structure of Retail loan factory


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Organization profile:

Name : Urban retail loan factory

Location : 1st floor, Above BOB Ambawadi branchPanchwati marg,Ahmedabad-380006

No of employees: 25

No of branches : 59

Contact no : 91-079-26421623

Fax no : 91-079-26421761

E-mail id : [email protected]

Established : 2006

Office time : Monday to Friday 10:00 to 5:00 p.mSaturday: 10:00 to 2:00 p.m


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Awareness of RLF Branches


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Retail lending products

Bank offers several retail lending products to its customers. However, RLFprocesses only these products which are secured by mortgage of property.

1) Mortgage loan

2) Other loan

Mortgage loan include the security by the means of immovable property and include

here that is RLF

While other loan includes the security by the means of movable property only

Mortgage loan:

1) Baroda housing loan

Baroda home loan(resident Indian)

Baroda home loan to NRIs/PIOs

Baroda home improvement loan

Baroda advance against property

Baroda advance against property to NRI

2)Baroda education loan

Baroda gyan

Baroda vidhya

Baroda scholar

2) Baroda Traders loan(Loan/overdraft/fresh sanction/Renewal)

3) Baroda loan to doctors

(Fresh sanction/Renewal)

4) Baroda loan to professionals

(Fresh sanction/Renewal)

5) Baroda advance against property


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However, RLF is empowered to process any type of retail loan. Like

Other loan:

Baroda personal loan

Baroda car loan

Baroda two-wheeler loan

Baroda loan to defiance pensioners

Baroda loan to pensioners

Baroda consumer durables

Baroda loan for laptops & personal computer

Baroda vaibhav lakshmi


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Procedure

Steps to be followed for processing loan

Lead generation/inward of file

Follow up by sales executive

Collect the details & required papers

It include,

Type of product

Requirement amount

Papers

Preparation of calculation sheet by sales executive

Submission of file to processing department with all formalities

Forwarding memo

Calculation sheet

KYC norms (Know your customers)

CIBIL (CONSUMER INFORMATION BUEARU INDIA LIMITED)

Checking of CIBIL

Scrutiny of file

Allotment of report which include,

T/C report (title clearance report)

V/r report (valuation report)

Pre inspection by bank officers

Feed the file in the LAPS (lending automation processing system)

Collect/ follow up of t/c report, v/r report

File ready for the sanction

Documentation

Separation of papers for record

Dispatch to concern branch

After that the next procedure is to be continued by branch. At branch level steps are

done viz.

Follow the appraisal cum sanction memo

Contact to the borrower for execution of and completion of other formalities.


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Execution of documents

(Franking, sign documents of applicants, guarantor, and co-applicant)

To issue original pay order

To give nomination letter

Creation of mortgage as per title report To register the mortgage deed as per state Govt notification.


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1)Lead generation/inward of file

The lead is to be generated by these ways.I. The lead is to be generated by different branch; means if the inquiry of loan is

related to immovable mortgage then branch contact to RLF is called generate

lead.

II. Directly party can contact to RLF.

III. Party directly can fill online application through SMS, web site, e-mail.

IV. Lead is also generated through references like old customers, relatives of

staff, bank employees etc.

2) Follow up by sales executive:

After lead generation the next step, sales executive follow upThe lead if lead converts to prospective business, then sales

executive helps the customer to complete the formalities of pre

approved of loan. The help may include,

It include the requirement of loan amount Brief history of loan product

Then sales executive prepare or fixed his/her eligibility

Prepare a file including with personal papers, business papers and property

papers

Application form

Calculation sheet

Form no-135

Form no-16

KYC verification Collecting all the relevant proposed documents

Telling the party about the quantum of loan amount


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Preparation of calculation sheet

For

HSG/OD/EDU LOANIncome applicant co-app co-app

First year _________________

Second year _________________

Third year _________________

Average annual income (for business person) _________________

Gross monthly income (for salaried persons) _________________

A. Maximum eligibility as per income Rs _________________

a) Up to RS 20000, 36 times of monthly income

b) More than RS 20000& up to 100000, 48 times of monthly income.

c) More than RS.1lac, 54 times of monthly income

Less 40%, 50%, 60% of monthly income _________________

(Up to RS.20000 40%

More than RS.20000 & up toRS.50000 50%

Above RS.50000 &up to RS.1 lac 60%

Above RS.1 lac 60%)

Deduction salary ded _________________

Insu.prem _________________

Loans EMI _________________

Available for EMI Rs. _________________

Repayment period _________________ MONTH _________________

B. Eligibility as per repaying capacity Rs _________________

Stamp duty & registration charges _________________

Cost of proposed property Rs _________________

Other charges-AUDA etc Rs _________________

Year of completion _________________

Construction will be completed on _________________


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Less-margins

Monthly income Purpose Margin

Up to RS.20000 Purchase of plot 20%

House/flat already constructed

from own sources

25%

All other cases 20%

Above RS.20000 Purchase of lot 20%

House/flat already constructed

from own sources

20%

All other cases 15%

Bank loan Rs. _________________

C. Eligibility as per cost of property Rs _________________

D. Eligibility for loan amount Rs. _________________

(A/B/C/ whichever is less)


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3) CIBIL : {Credit Information Bureau (INDIA) Limited}

The establishment of CIBIL is an effort made by the Government of

India and the Reserve Bank of India to improve the functionality and stability

of the Indian financial system by containing NPAs while improving credit

grantors portfolio quality.

CIBIL provides a vital service, which allows its Members to make

informed, objective and faster credit decisions, with greater efficiency and

grow business profitability.

Rapid industrialization. An expanding economy. Growing aspirations.

Increased incomes. Improved lifestyles. Availability of high quality products

and services.

An expanding market these factors have created an atmosphere

conducive to rapid credit off take. While the demand for credit has risen

exponentially, there has been a parallel increase in competition.

By the use of CIBIL, which provides details pertaining to credit facilities

already availed of by a borrower as well as his payment track record, has

become the need of the hour.

CIBILs aim is to fulfill the need of credit granting Institutions for

comprehensive credit information by collecting, collating and disseminating

credit information pertaining to both commercial and consumer borrowers, to

a closed user group of Members.

Banks, Financial Institutions, Non Banking Financial Companies,

Housing Finance Companies and Credit Card Companies use CIBILs

services. Data sharing is based on the Principle of Reciprocity, which means

that only Members who have submitted all their credit data, may access

Credit Information Reports from CIBIL. The relationship between CIBIL and

its Members is that of close interdependence.


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For accessing CIBIl data bank has to enter one of these documents number, which

is unique itself viz.

PAN card number

Voters id number

Passport number

Driving license

In addition to above, the name of party, date of birth,

address with pin code, amt &purpose of loan are also

must.

We can get the all the credit information of the customer whether the

customer have availed the loan, whether they have inquired for any loan. So

this facility is very useful for the bank to know the credit status of borrower or

to help in the decision whether he/she is suitable for the loan or not.

If there is an overdue in the CIBIL report which appears to be genuine then

bank may take that report positive and may sanctioned the loan. But chronic

defaulters are not entertains all.

After filling all information, a report with control number of 9 digit gets

generated which entails all the credit facilities enjoyed by party or any enquiry

made therefore. But banks name or financial institution name do not appear in

then.

If the report is satisfactory, then loan application is entertained. If there is any

write off/defaulters/overdue or any information concealed by party then bank

may ask for details thereof. If the submitted information is satisfactory then

loan may be sanctioned otherwise bank is at discretion not to consider credit

facilities.


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4) SCRUTINY OF THE FILE:

After the checking of CIBIL the next step is to be scrutiny of file. Here

carefully all the information/documents are checked by officer. They mainly

check these documents,

Loan application is duly completed (only for applicant)

Proof of identification: id card/passport/driving license/PAN card

Proof of residence: id card/passport/electricity bill/telephone bill

Proof of business address, in case of non salaried borrowers

Statement of bank account for last six months (personal)

Investment proofs e.g. copies of NSC, KVP bonds, LIC, RC book, demat

a/c, property tax bill

Loan account statement

5) Allotment of the report:

1) Title clearance report:

Title clearance report is must checked by banks empanelled

advocates. Here advocate verifying the title clearance & searching for last 30

years in the respective courts regard.

However if government authority allocates the property then search will

be done only for remaining period of 30 year.

If the property is allocated by govt authority then search is done only

after the allotment.

Bank has designed specific format for obtaining legal opinion from

banks empanelled advocates. This format describes /covers all the points

like,


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Name of account & facility

Description & area of property Name of the mortgagor &his status in the account

Whether the mortgagor has sufficient title & capacity to

contract for creation of mortgage.

Nature of mortgagors right or title in the property.

Whether mortgagor is in exclusive possession of property

proposed to be mortgaged

Documents studied

Chain of title

Whether the title is clear & property is free from anyencumbrance

Title to property is clear, unambiguous, marketable &

property is saleable

Whether there is any restriction for creation of equitable

mortgage.

No objection is required

List of the title deeds to be deposited to create mortgage

by deposit of title deeds in favour of bank by mortgagor.

At the same time court fee receipt is must

Charge: minimum 1500 & for outstation search 500 extra Maximum

2500

2) Valuation report:

Valuation report to be obtained from approved valuer of the bank.

Valuation report involves the current price of proposed property. It include

current market price of property.

Charge: 100 for 1lac Max-2500

3) Other charge:

It includes processing charges

Loan up to RS.20/-lacs:0.35%+service tax

Loan above RS.20/-lac:0.40%+service tax


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Maximum RS.15000/-

Loan above RS.30 lacs-0.75% additional interest

But if the borrower is government employee or in preferred list of bank, then 0.25%

discount is allowed in rate of interest in the applicable rate of interest.


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5) Inspection by officer:

There are two types of inspection carried out in all types of loans.

1) Pre sanction inspection

2) Post sanction inspection

Pre sanction inspection is considered a part of processing.

No charge is to be levied therefore

Purpose of presanction inspection:

Most importally, it is treated as vital part of processing.

To ensure that information provided by the applicant is

correct &satisfactory

It includes inspection of residence area, place of

employment, place of proposed property

It is treated as the basis for construction of any loan

Generally some officers are designated for carry out

this task

On the basis of satisfactory report there from loansare being considered

This pre sanction inspection is carried out on

expectedly. (without giving information to borrower)

Post inspection is done through branch.

The purpose behind post inspection is to ensure that

the proposed property is owned by party or not.

6) File feeding:

Here, files are sent for entry of information into LAPS (Lending

automation processing system). This software isa boon for Bank for retail

loan products and this is internet-based software, maintained at Mumbai. If there is

any change of any type happens, this may be automatically affected in all files.


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The benefit of the software is that it covers all the information relating to applicant,

co-applicant & guarantor.

Customer profile: it include demographic, income expenses &employments details

Whether they have LIC policy then the information of that, financial information of the

customer, their liabilities & assets.

There are many advantages of LAPS like:

Easy accessible (anywhere, anytime)

Less time consuming

Data storage facility permanently

Automatically adjust the interest, amount & also eligible amount afterentering of all the regarding data which helps the user to ensure that

sanction able loan amount is in line with Banks guidelines.

7) Next Step:

After the file feeding the next step is to send the file in the processing department

where all the information are again checked in LAPS and it is ensured that

necessary papers are attached in the file.

Here files are being processed/sanctioned keeping in mind the Banks guidelines

and sent to dispatch department where necessary papers are xeroxed to keep in

record and loan documents are taken print out.

Generally, appraisal note is made on checking on the following points,

Background of the applicant

Request of loan amount

Cost of property

Guarantor information

CIBIL DATA

Description of the property

Recommended by sales executive

Net worth & risk rating

Title clearance report

Valuation report

Field Inspection Report


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It is worth mentioning that credit rating is strictly checked to ensure that quality of

loan file and if the credit rating is within Banks permissible norms, then loan amount

will be sanctioned otherwise on the basis of poor crediting rating loan file may be

rejected or returned. Credit rating is done on the CRISIL model.

Here in Banking, the credit rating is done for all types of loan but not below the loan

amount of Rs 2.00 lac. Basically, crediting rating is decided on the following points:

Borrower Age

Educational qualification

Marital Status

Mobility of individual-location

Number of depends

Number of joint applicants

Relationship with bank Employer Type

Designation

Stability of income

Proof of income of borrower

Housing loan purpose category

Loan to value ratio

Net worth to loan ratio

Net annual income of the borrower

Fixed obligations to income Ratio

Guarantors Net worth to loan Ratio


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Baroda Housing

Loan


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Retail Lending Products of RLF

BARODA HOUSING LOAN:

Retail continues to be the thrust area for credit growth in banking sector andout of that home loan plays a vital role in retail credit growth. Baroda home loan is a

major product under Retail Loan Factory.

It contributes more than 45% of the total retail loans.

1) Purpose:

Construction of new dwelling unit and purchasing of new residential

house/flat. Old dwelling unit (not more than 25 years old)

Purchase of plot of land, subject to the condition that a house will be

constructed thereon within 3 years or up to the period allowed by

development authority.

Repayment of loan already availed from any other bank/HFC (housing

financial corporation), provided documentary evidences are produced

For houses/flats constructed/purchased (not prior to 24 months) from own

sources.

Loan for purchase/construction of second house can be considered.

2) Eligibility:

All individuals singly or jointly

Principal applicant must be employed minimum for 3 years

Minimum age-principle borrower-21 yrs and co-borrower-18 yrs (salariedperson-repayment period shouldnt be beyond retirement age and for others-

65 years Housing loan to HUF of be considered.

3) Limit:

The maximum limit is Rs.100 lacs (branches have to seek approval fromauthority, if loan exceeds Rs. 50 Lacs).

However, the actual quantum of loan should arrive at after considering theincome criteria & repaying capacity.


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4) Income criteria:

Source Income Criteria

Salaried

Up to Rs.2000036 times of monthly

income

More than Rs.20000 & upto RS.1 Lacs

48 times of monthlyincome

More than Rs.1 Lacs54 times of monthly

income

Other than salaried persons

5 times of net average(last 3 years) annual

income excludingdepreciation

Whenever income of the family members is clubbed, they should bemade co-borrowers.

Income of the agriculturists who are not required to the file theincome tax are also considered if the income is supported withrelevant papers/documents.

5) Margin:

Monthly income Purpose Margin

Up to Rs.20000

Purchase of plot(incl.registration charges

& cost of stamps)20%

House/flat alreadyconstructed from own

resources.25%

All other cases 20%

Above Rs.20000

Purchase of plot(incl.registration charges

& cost of stamps)20%

House/flat alreadyconstructed from own

resources.20%

All other cases 15%


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6) Repayment:

Maximum 25 years (including moratorium period)

Moratorium period:

Period in which the applicant is not required to pay principal. However, hemay or may not pay interest during this period.

Maximum moratorium period is 18 months. After that period, party hasto be start pay EMI even if the construction is not completed.

Age of the borrower plus repayment period should not exceed: Retirement age in case of salaried 65 years in case of others

7) Insurance:

The insurance of the house mortgaged to the bank is to be done at the bankscost underBaroda loan suraksha bima policy with national insurancecompany ltd.

Bob has tide up with Kotak Mahindra to provide personal death insurancewhich is optional

Free accidental insurance of the borrower at the banks cost (insurancecover shall be available)

Borrower can join Baroda jeevan griha suraksha scheme to cover the outstanding loan amount with accrued interest against the risk of normal deathafter paying nominal insurance premium once.

8) Processing charges:

For loan up to Rs.20 lacs-0.35% on loan amount service tax.

For loan above Rs.20 lacs-0.40% on loan amount (max Rs.15000+servicetax)

9) Other features:

Free credit cards No card-up to Rs.2 Lacs

Paras-loan limit of Rs.2 Lacs to 5 Lacs Exclusive-above Rs.5 Lacs & up to Rs.10 Lacs Gold-above Rs.

If the loan amount is above 50 Lacs then interest is to be added 0.75% inthe normal interest.


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Home Loan to NRIs


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BARODA HOME LOAN TO NRIs/PIOs:

1) Purpose:

a. Purchase of new residential house/flat.b. Construction of new dwelling unit.

c. Purchase of old dwelling unit (not more than 15 years old).

d. For repair/renovation/extension of existing house.

e. Purchase of plot of land, subject to the condition that a house will be

constructed thereon within-2 years from the date of purchase of plot.

f. Repayment of the loan already availed from any other bank/housing

finance company under their scheme to finance NRIs/PIOs for housing.

The loan shall be considered for residential properties situated in India

2) Area of operation:The branches may consider housing loan proposals provided it is in the

city/town of:

Location of new flat/house to be purchased /constructed or

Place of residence of the applicant in India

3) Eligibility:Non-resident Indians (NRIs) holding Indian passport or persons of Indian origin

(PIOs) holding foreign passport, singly or jointly.

For this purpose person of Indian origin means a citizen of any country other

than Bangladesh/sri lanka /Afganistan/china/iran/nepal &Bhutan if-

I. He at any time held Indian passport or

II. He or either of his parents was a citizen of India by virtue of

the constitution of India of the citizenship Act 1955,or

III. The person is a spouse of an Indian citizen or a person

referred to in sub clause (a) or (b) above.

1. Principal applicant should having a regular job abroad ina reputed Indian/foreign company, organization orgovernment department holding a valid job contract/workpermit for minimum past 2 years. Or

2. Must be employed/self-employed or having a businessunit and staying abroad at least for 2 years

Must have minimum gross annual income equivalent to Rs.5 Lacs perannum.


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4) Age:

Minimum age must be 21 years; minimum age of co- borrower can be 18years.

Age of the borrower plus repayment period should not be beyond retirementage or 65 years whichever is earlier.

5) Security:

Equitable/legal mortgage of property constructed/purchased or property to beRenovated /repaired.

Personnel guarantee of spouse/family member residing in India shall beobtained. If spouse is also residing abroad personal guarantee ofone/two persons resident in India having adequate worth.

6) Minimum amount: For purchase of new/old house/flat or construction of house/flat: Rs.5/-lacs

For repairs/renovations/extensions: Rs.1/-lac.

7) Maximum amount:

For purchase of new/old house/flat or construction of house/flat: Rs.100/-lacs

For repairs/renovation/extensions: Rs.25/-lac

For purchase of plot of land: Rs.50/-lacs

8) Repayment period:

Maximum 15 years including moratorium

Payment should be remitted from abroad through normal banking

channels or out of NRE/NRO (non residence external account) account

of the borrower are to be obtained.

Close relatives of the borrower in India may also repay the installments of

such loans, interest and other charges, if any, through their bank account

directly to the borrowers loan account.

9) Other points:

This loan is decided on the papers like employment contract, copy of visa,passport & similar credit in salary account.

If the applicant is residing outside India & there is no possibility of coming inIndia in near future then he/she can avail the housing loan through power ofattorney executed in favor of local resident at India.


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BARODA AAA(ADDITIONAL ASSURED ADVANCE):

1) Purpose:

Any purpose excluding speculative or illegal purpose.

2) Eligibility:

All existing housing loan customers, whose conduct of account is

good and is classified as standard.

There is no adverse features/auditors/inspecting officers remarks in

exiting housing loan A/Cs.

Age of borrower +tenure of AAA loan should not exceed 65 years.

Loan can be availed maximum 5 times during the tenure of housingloan provided previous AAA is settled at least one month before.

3) Limit & margin:

minimum-Rs.25000

maximum-amount equal to 90% of principal amount repaid

Margin-10% of the principal amount repaid.

4) Repayment:

By equated monthly installments (EMI).first installment to fall due

one month after first disbursement.

Repayment period as per borrower capacity to repay however in

any case not to exceed remaining period of housing loan.

5) Security:

Extension of equitable mortgage of the housing loan.

Personal guarantee of third party if the same is mentioned in

housing loan.


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BARODA HOME IMPROVEMENT LOAN:

1) Purpose:

For repair/renovation/improvement/extension of existing house. Purchase of furniture/fixture/furnishing/other gadgets. (Only to

those borrowers who obtains loans for repairs/renovation

under the schemes.)

2) Eligibility:

Minimum age-21 years.

Maximum age of the borrower +repayment period should not be

beyond retirement for salaried person and 65 years in case of

others. HUF &staff members are not eligible.

3) Limit:

Upper ceiling limit Rs.10.00 lacs with the provision that loan

component for furniture/fixture/fitting/other gadgets should not

exceed Rs.5.00 lacs,

Under this product for salaried 24 times of gross monthly

income & for businessman 2 of gross monthly income.

4) Margin: 25% of the project cost

5) Repayment:

Maximum 10 years(including moratorium period)

Moratorium period maximum 6 months.

6) Interest:

10.50%


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7) Documentation charges:

Loan amount Charges(s.t.to.be included)

Up to Rs.25000/- NilAbove Rs.25000/- & up to Rs.2 lacs Rs.200Above Rs.2 lacs & up to Rs.5 lacs Rs.500Above Rs.5 lacs &up to Rs.10 lacs Rs.1000

Property should be in the name of applicant &in the possession of

applicant.


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EDUCATION


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BARODA EDUCATION LOAN:

Bank of Baroda has three types of education loan.

a) Baroda vidhyab) Baroda gyanc) Baroda scholar

A) Baroda vidhya:1) Target group: parents of students perusing school education fromnursery to standard XII

2) Eligibility:

Should be an Indian national residing in India.

Student should have secured admission to a recognized

school/high school/jr.college for any of the following courses:

Stage 1: nursery to V th std.

Stage 2:VI th to VIII th std

Stage 3: IX th to XII std

No minimum qualifying marks

Loan to be granted in the name of father/mother of the

student

3) Coverage of expenses for:

Fee payable to college/school Examination/library/laboratory fee Fee and other charges payable to hostel Purchase of books/equipments/instruments/uniforms Personal computers/laptops wherever required Caution deposit/building fund/refundable deposit supported

by institution bills/receipts

Cost of external coaching/tuition is not beconsidered

4) Quantum of finance: maximum Rs.4 lac5) Margin: nil6) Repayment period:

Yearly sub limit repayable in 12 equal installments

Repayments to start 12 months after first disbursement of

each years loan amount


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7) Rate of interest: 1.25% below BPLR 1% concession in the rate of interest to loans sanctioned

for the benefit of girl students.


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B) Baroda gyan:

1) Target group: studentpursuing graduation, post graduation, professional &

other Courses in India

2) Margin:

Up to Rs.4 lacs :NIL

Above Rs.4 lacs: 5% Students pursuing graduation, post

graduation, professional & other courses in India.

3) Courses eligible:

Graduation/post graduation/professional & other courses like

ICWA,CA,CFA etc. as well as courses conducted by

IIM,IIT,IISC,XLRI,NIFT etc.

Evening courses of approved institutes.

Other courses leading to diploma/degree etc.conducted by

colleges/universities approved by UGC/GOVT etc.

4) Student eligibility:

Should be resident Indian.

Secured admission to professional/technical courses in India

through entrance test/merit based selection process.

5) Quantum of finance:

Maximum Rs.10 lacs

Scholarship/assistant ship if any received to be included in the margin

6) Repayment & moratorium period:

Course period+1 year or 6 months after getting job,

whichever is earlier.

The loan is repayable in 5-7 years after the above period.


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Baroda scholar


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C) Baroda scholar:

1) Purpose:

Bank of Baroda presents financial assistance to students going abroad

for Graduation/post graduation/professional/technical courses offered by

reputed universities abroad.

2) Loan amount:

Maximum: Rs.20 lacs

Minimum: Rs.7.50 lacs (mortgage base)

3) Margin amount: 15%

4) Security: mortgage of property up to loan amount

5) Student eligibility:

Should be an Indian national

Secured admission to professional/technical courses abroad

through entrance test/Merit based selection process.

6) Coverage of expenses:

Admission/tuition fees to college/university &hotel/mess charges.

Examination/library/laboratory fee/purchase of

books/equipments/uniform etc.

Purchase of computers if essential for completion of the course.

Any other expense required to complete the course e.g. study tour,

project work, thesis etc.

7) Repayment & moratorium period:

Course period+1 year or 6 months after getting job, whichever is

earlier.

8) Freebies:

Drafts in foreign currencies drawn on our branches/subsidiaries

required in favour of college/university/student will be issued free of

exchange/commission.


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9) Other benefit:

Concession of 1% in rate of interest if interest is served regularly

in moratorium period.

Concession of 1% in rate of interest in case of girl student.

Loan covers all fees & expenses.

Simple interest is charged at monthly rests during moratorium

period.

Low processing charges of 1% will be charged if applicant has

not availed the disbursement of loan.

If the interest amount of the loan, party is paying before

moratorium period then 1% discount.

10) Rate of Interest: 12%


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Baroda Traders Loan


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BARODA TRADERS LOAN:

1) Purpose: Working capital requirement Development of shop (e.g. purchase of equipment, furniture etc. and not

for purchase of shop) Need based requirement of funds for development of shop by way of

loan up to a maximum of 25% of the limit sanctioned for the workingcapital

Non fund based facilities (i.e. bank guarantee and letter of credit)

2) Eligibility:

All persons engaged in trade of any commodity/goods not prohibited bylaw or opposed to public interest. Individual, proprietorship, partnership concerns, firms, private ltd and

regd.co-op societies engaged in trade of any commodity/goods requiredby the community and trading in them is not prohibited by law orproposed to public interest.

The business units should have been established in the line of businessfor a minimum period of 2 years.

Trading unit established by our existing customer with satisfactorydealings of their close relatives, even if these are established for lessthan 2 years.

Trading units of non-customers having less than 2 years establishment,with the prior approval of regional authority.

3) Limit &margin: Minimum:Rs 25000 & maximum : Rs.200 lacs Advance value of collateral security with margin:

10% on FDR 15% on surrender value of LIC policies, NSC and Govt.bonds 50% on approved shares/bonds 40% on latest valuation of immovable property

OR 20% of projected sales( whichever is less)


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4) Processing & service charges Fund based: min-@ 0.35% i.e. Rs.1000/ Max.Rs.300000/- +service tax

Non fund based- as per extant guidelines.

5) Repayment: Overdraft: 12 months subject to annual review Demand loan: maximum 60 EMI(depending on repayment capacity)

6) Security: Tangible collateral securities in the form of mortgage of land (not

agricultural land) and building. Property to be mortgaged may be only in the name of borrower,

proprietor, partner, director or their close relatives (viz. spouse,parent, brother, sister, son. daughter) who should stand as aguarantor.

NSCs, LIC policies KVPs, bonds, FDRs, standing in the name ofborrower/proprietor/partner/director only.

Age of property:In case of loan:

Age of property should not be more than 25 years old. Howeverfor properties which are older than 20 years but not more than 25years, branch is to ascertain structural soundness of the propertyby obtaining an approved engineers certificate, certifying thatstructural soundness as well as residual life of the buildingshould be at least 5 years more than repayment period of theloan. For dwelling units, which are older than 25 years,regional head may authorize such cases on selective basis,subject to ascertaining structural soundness of the building byobtaining an approved engineers certificate, certifying thatstructural soundness as well as residual life of the buildingshould be at least 5 years more than the repayment period of the

loan.

In case of overdraft:

Building less than 25 years old guidelines applicable to generaladvance to be followed

Older than 25 years- the branch will be required to carry outinspection of the property every year at the time of review offacility and obtain report from architect every 3rd year along withvaluation of property.


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7) Documentation:

d.p.note letter of continuing security hypothecation of goods(where ever applicable) draft undertaking cum declarations undertaking to deal exclusively with us equitable mortgage of property Mortgage should be registered with sub registrar of assurance. The under taking from the borrower declaring that he does not owe

any overdue statutory dues like sale tax, income tax/and haveobtained/renewal license from concerned authorities required for

trading in the merchandise goods every year Property to be mortgaged must be in the name of either:

Borrower Proprietor, partner, director Close relative of borrower who should stand as guarantor Third party property provided credit facility is for Rs.1 lac

and above

8) Other point: If yearly sales of customer are above 40 lac then return should be

audited compulsorily.

Registration certificate is must if VAT is to be charged and alsorequired challan.

Last 2 years of income tax return or audited report If the account of customer is not in the BOB then credit report of

present bankers is must If company then constitution is required,

1) Memorandum2) Article of association

Interest rate is to be depends on current rate of BPLR


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BARODA MORTGAGE LOAN:Baroda mortgage loan is divided in to two sub products. i.e.

1) ODAP (overdraft against the property)

2) Loan against property

The mainly difference between these loan is,

In ODAP the interest will be served on monthly basis on the

amount withdrawn and .

In Mortgage loan, the EMI will start from the next month from

the loan disbursement, there is provision for 3 months

moratorium period

1) Purpose:

For all legitimate purpose except for speculations.

2) Type of facility:

Overdraft/term loan

3) Eligibility: Salaried employees/professionals, self employed & others, who

are income tax assessed for last 3 years.

Age:minimum-21 years

Maximum-60 years

(The customers age +overdraft/loan tenure

should not exceed 65 years)

Minimum gross annual income: Rs.60000/-

4) Limit:A) Minimum-Rs.1 lac

b) Maximum: for rural branches: Rs.5 lac

All other branches : Rs.100.00 lacs.

(Subject to income criteria, repayment capacity and advance value of

the property offered as security)

5) Income criteria:


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Salaried class: 36 times of net monthly income.

Other individuals: 3.5 times of net average (last three years) annual income.

i. Income of all the joint owners of the property who are co-

borrowers can be clubbed.ii. Co-borrower:

The facility can be considered to an earning member/members of a

family against the property standing in the name of any

member/members of the family.

Members of the family comprises of spouse, father, mother, son/s,

brother/s & brothers wives and daughter/s (subject to the condition

that they are living in the family jointly, this is to be ascertained

through interview of applicant)

Net monthly income:

Gross salary less professional tax, income tax and P.F

Net annual income:

Income net of professional tax and depreciation, if any.

6) Repayment capacity:Total deductions should not exceed 60% of the gross income(including

installment/repayments towards proposed facility)

7) Rate of interest:1.50% above BPLR (presently BPLR is 12%.so 13.50%

8) Penal interest:2%p.a.on overdue amount

9) Margin:40% of the market value of the property to be mortgaged

10) Security:Equitable mortgage of:

1. Residential or commercial property

2. Plot of land allotted/purchased from any development authority.

The allotment/sale of plot/land by such development

authorities should not contain any clause stipulating fixed time

limit for construction of house/commercial building.

Loan/overdraft against tenanted property should not be

considered except in case where the property is given on lease

to PSU, govt/ semi govt. enterprises, large corporate, banks,financial institutions & insurance companies.


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11) Personal guarantee:Up to Rs.10 lacs: guarantee may not be insisted upon.

Over Rs.10 lacs: third party guarantee of an individual having adequate worth

must be obtained.

12) Repayment period:Loan:

Maximum 84 months in equal monthly installments (EMIs)

Maximum moratorium period-3 months

Overdraft

i. The facility may be continued without any condition of reduction till the

maximum age specified ,if desired by the borrower, subject to: Annual review & satisfactory conduct of the amount

Minimum annual turnover in the account is at least 25% of the limit.

ii. Wherever it is observed at the time of review that stipulation of annual

turnover is not complied with, the limit should be reduced

annually as under:

Maximum period of overdraft: 10 years.

Reduction in operative limit proportionately by the end of each year,synchronizing with review of the account.

Alternatively branch may explore the possibility of converting

the overdraft facility in to term loan and fix EMI for

recovery of the balance amount.

13) Period of facility: 12 months subject to review

14) Valuation of property:Valuation of property should be got done by our banks/ Govt approved valuer

as per extant guidelines at the time of considering the facility.

However, if the property has been acquired within last 5 years, amount

of registered sale deed may be taken as value of the property (in such cases

fresh valuation may be dispensed with and loan amount is considered on that

value.

15) Other points:


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The bank shall have right to progressively reduce the limit of

overdraft sanctioned hereby every year/month from time to time

during the avalment of the OD limit.

However, it is agreed and understood that such commitment for

progressive reduction in the overdraft limit is and will be withoutprejudice to the rights of the bank to call for accelerate and

demand repayment of entire outstanding amount in overdraft limit

at any time and from time to time.

Interest to be recovered as & when applied in the account


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PREVENTIVE VIGILANCE GUIDELINES:

Bank issues preventive vigilance guidelines in retail loans segment from timeto time so that frauds & forgery do not happen. Here some incidences wherein

the borrowers have fraudulently tried to avail loans from the bank by

producing false information, fake and forged documents .

Fake/forged/Xerox copy of the title deeds.

KYC norms not strictly compiled with and borrowers were not residing at the

places as informed to the bank.

False copies of IT returns were submitted. Upon verifying copiesof income

tax returns for last three years from original it was revealed that all the returnswere filed on one date whereas different dates appearing on zerox copies

submitted to bank were of respective years.

Applicant for availing home loan submitted in fake construction agreement.

There was no builder in existence.

Fabricated statement of account was submitted in few cases, which was

revealed after cross checking with other banks branches.

In many cases CIBIL data interface gave the information about other bank

borrowings in respect of applicants who intentionally did not disclose the

information at the time of applying for loan from our bank.

Pre sanction inspection revealed that a person who has applied for home loan

does not have any business but has managed to fix signboard at the shop,

which belongs to someone else.

Income of spouse was considered based on false documents though she wasnot engaged in gainful employment.

In some cases properties were overvalued substantially for getting maximum

loan.

Construction was not as per approved plan and of poor quality & low value.


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A fraud is one area of concern where there is total loss in most of the cases.

Here some guidelines so, that frauds can be averted.

KYC norms to be strictly compiled with and identity of the

borrowers/guarantors to be verified by making a visit to their residencesand/or work places. The borrowers are required to visit the branch personally

to execute all loan documents.

Authenticity of salary certificates and income tax returns submitted by the

borrowers to be independently verified from the employers and income tax

authorities through charted accountants/agencies empanelled by our bank for

the purpose.

Income assessment is very important tool to decide the loan amount, as well

as permissible EMI.several frauds have occurred due to inflated income

assessed by including various other sources of income which are not of stable

nature like interest income, rental income, and agricultural income etc.due

care has to be taken to verify the genuineness of the source & kept on record.

Strict watch to be kept on repayment of installments and follow up is done

promptly.

Branches should be more cautions in case of higher number of cases are

coming through one particular builder.

Equitable mortgage can also be registered with sub registrar office on

payment of required fee.

Facilities must be released only after compliance of all the terms of sanction

and vetting of documents.

Pre-sanction inspection including visit to the place of residence and work as

well as property to be purchased, must be carried out independently,preferably without giving prior information to the applicant.

In case of applicants other than salaried persons, the original taxpayers copy

of challans of tax deposited is verified to ascertain genuineness of income tax

returns and also the assessment orders for earlier years. Housing proposals

of the persons, who have filed their income tax returns of last three years in

one lot, should not be entertained.

No middlemen should be entertained for any retail credit proposals.


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Whether applicants are not maintaining their saving account with bank, the

branch should obtain statement of principal account of the applicant, wherein

salary is being credited.

Credit rating in prescribed module relevant to the retail loan proposal shouldbe carried out in case before taking credit decision.

Valuation report submitted by govt/ approved valuer in respect of immovable

property, the processing officer or asset inspecting officer or sanctioning

authority should assess the value of the property independently on the basis

of prevailing market rates and record the same in the file.

Each disbursement, whether need to be made in stages, should be backed by

site/spot inspection and relative report should be kept on record.

Post-sanction inspection after final disbursement should be carried out to

ensure that borrower has taken possession of the house/flat besides

verification of end use of funds.


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SWOT ANALYSIS

STRENGTH: Financially strong bank

Very old bank

Aggressive marketing

Good repo

Technological advanced

WEAKNESS:

Guidelines are not flexible Power is not decentralized

OPPORTUNITIES:

New area is developing. So, there is vast

chance for housing loan.

Guidelines to be designed in such a way that

needs of the all type of prospective borrowersshould be fulfilled.

THREATS:

This is the nationalized bank so, competition

may be with private banks

Aggressive marketing strategies by private

banks

Entry of foreign banks in near future.


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LEARNINGS

The most important part is that they make me feel employee of the

organization rather than a trainee and allow me to flourish in each and

every department.

They were so generous to me that at any mistake, rather scolding they

taught me how to correct it & allow me to learn from that mistake.

Learning include,

1. Overview of the banking industry & their operation

2. Deep knowledge of loan &procedure

3. Proposals that the bank has approved for the disbursement of loan

4. How to come out from the different problem regarding loan & how

to interact with customer.

5. Working on CRISIL and learning some of its function

6. The most important learning of CIBIL& how to learn this CIBIL

7. Knowledge &functioning of LAPS software

8. Awareness of FINACLE software.


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Experience at RLF

I would like to conclude my project with a feeling of having gainedenormous knowledge in the field of advances.

My project has taught me a lot and has helped me sharpen my

management skills for application aspect.

I had wonderful experience for which I am greatly thankful to the entire

staff of RLF who have continuously taught me by guiding in each and

every step.

It was a memorable experience of working in such a lively & dedicated

atmosphere.

Not to forget to mention that my two months training has removed my

misconceptions regarding the working of public sector bank.

Lastly, I would conclude it was such a memorable experience for

me to be a part of BOB RLF. Thanks a lot to all staff members of

BOB for such a good co-operation.


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BIBILIOGRAPHY & WEBOGRAPHY

www.bankofbaroda.com

www.google.com

www.apnaloan.com

www.cibil.com

www.crisil.com

www.loanbazar.com
http://www.bankofbaroda.com/http://www.google.com/http://www.apnaloan.com/http://www.cibil.com/http://www.crisil.com/http://www.loanbazar.com/http://www.bankofbaroda.com/http://www.google.com/http://www.apnaloan.com/http://www.cibil.com/http://www.crisil.com/http://www.loanbazar.com/