FLOW OF CREDIT

TO

THE RETAIL SECTOR(A NEW APPROCH OF SBI,A STUDY OF UNITS OF, BERHAMPUR)

A

Summer Internship Project Report

Submitted in partial fulfillment of the

MASTER OF FINANCIAL CONTROL

Under, BrehampurUniversity,

2010-11

Submitted

By

Eloean Pattanaik

ROLL NO.: MF0410

Regd NO.187/2009

Under the guidance of

Prof. K.C Raut Mr B. Maharana

DEPT. OF COMMERCE A.G.M OF SBI BERHAMPUR UNIT

.

DECLARATION

I do hereby declare that this projects entitled ‘’ flow of credit to the retail sector ‘’ is the result of my training at ‘’SBI RASMECCC IN BERHAMPUR ‘which has been carefully prepared and submitted by me as a partial fulfillment of MASTER OF FINANCE AND CONTROL under the guidance of Mr.B.Maharana (A.G.M,SBI Berhampur unit)and Prof.K.C.Raut (Berhampur University)

All the data and analytic statement being stated in the project that is submitted by may be accepted as fully authentic genuine.

Eloean pattanaik

MFC, Berhampur University

Bhanja Bihar.

ACKNOWLEDGENT

I am grateful to all who helped me on preparation of this project report. In particular I express my sincere and gratitude to A.G.M. SBI,Berhampur Unit for his constant pursuance and encouragement.

I express my deep sense of gratitude to my project guide Mr.R.K .Rout,Manager (Retail Loans)SBI Berhampur,who permitted me to undertake the project work at SBI,Berhampur.His scholar guidance and illuminating suggestions inspire me in shaping my project report to this existing form.

I also express my heartful appreciation to my professors, Mr.K.C. Raut (Comm.Deptt.) MFC Berhampur University progamme of their timely suggestion for completion of this report.

I am very much thankful to Mr.B.R.Roy( H.OD, Comm Deptt.)for his kind permission to persure my project under the well working environment of SBI.

I am also highly obligated to Mr.B.Maharana(A.G.M),Mr.R.K Rout(Manager,Retail Loans),Mr D.Mohanty(Manager,SME)for their suggestions and promot guidance to carryout and complete this study.

Eloean Pattanaik.

CERTIFICATE BY THE GUIDE

This is to certify that this project report on “FLOW OF CREDIT TO THE RETAIL

SECTOR” submitted by Miss Eloean Pattanaik, a student of M.F.C 3rd semester in the Post

Graduate Department Of Commerce, Berhampur University in partial fulfillment of the

award of M.F.C was done under my guidance

Signature Of The Guide

(Prof. K.C.Raut)

CONTENT

CHAPTER-1

INTRODUCITON

SCOPE AND OBJECTIVE OF THE STUDY

METHODOLOGY

LIMITATION OF STUDY

CHAPTER-2

INTRODUCTION

MARKET SEGMENTATION OF SBI LOANS

CLASSIFICATION OF RETAIL LOANS OF SBI

FORMATION OF RASMECCC, SARC

(BERHAMPUR AND ITS STRUCTURE)

MARKETING OF LOANS BY BRANCHESA

PROCESS CHART

LOAN PRODUCT OF SBI

BPR ROLE IN SBI LOAN MANAGEMENT

CHAPTER-3

ACHIVEMENT

BUSINESS PERFORMANCE

TAT POSITION

PERFORMANCE SUMMARY

BRANCH SOURCEING

INTERPRETATION

CHAPTER-4

SUMMARY OF FINDINGS & CONCLUSION

REASON OF HIGH RETURNS

SUGGESTION

CHAPTER-1

INTRODUCTION

India is the largest country in south Asia with a huge financial system characterized by many and varied financial institution and instrument. The India financial sector was well –developed even prior to the political independence of the country in 1947.The vastness of the Indian banking system could be gauged.

At the top of banking system is the RBI, which is responsible for the prudential supervision of the banks and the non- banks financial institution and for performing the other central banking function. Indian’s largest banks –the bank of India and its seven associate banks were brought under social control in the mid-to late fifties.

Thereafter with two successive nationalization of banks, another 19 banks (14 banks in 1969 and six in 1980s)where brought into the public sector. The PSBs occupy a predominant position in the Indian financial system. The important banking indicators of the commercial banks in India.

It is very essential to known the major function and working of the banks.SBI is the oldest. The largest and highest profit making bank in India. So, its very important to known the performance of the banks. As, the bank deals with many function. But the most important function is credit facilities provided by the bank. To known the loan sanction rejection of proposal of the bank received. Performance of the bank and the rate of demand of the loan. Find out what is the reason for rejection of proposal and return of proposal. This project also contains the structure of the bank, the flow of proposal. Layout the problems and drawbacks of faced by public and staff.

The retail banking strategies of bank are undergoing major transformation; a bank adopts a mix of strategies likes organic growth, acquisition and alliances. This has resulted in a paradigm shift in the marketing strategies of the banks. Public sector banks player are adopting aggressive strategies, leveraging their rural branch networking and their customer base to earn a larger share of retail pie. Banks are also going in for innovative strategies like cross selling, packaged selling of retail products and technology based banking.

SCOPE AND OBJECTIVE OF THE STUDY

To find the sanction growth in between two year.

To know the essential segment of loan required by the public.

Make comparison between the different units of the SBI within the region.

To find out the reason for the rejection and return of proposal.

To evaluate the efficiency of the bank.

To examine the having performing quantitative TAT position (total arounding time).

METHODOLOGY

Required data collected from the workflow register, monthly performance tracking and business performance relating to the retail sector of RASMECCC, SARC in the combination of RACPC, SMECCC of Berhampur. RACPC performance sheet, TAT position sheet.

The data collection for the research is secondary data which are collected from the register of bank. The data is collected for two years from 2009-2010.And the data of various units of the RASMECCC, SARC, Berhampur.

LIMITATION OF STUDY

Data is collected from the regional bank of SBI , Berhampur The problem of each unit is ignored. The data is not collected from individual units. Limited area of survey. Data is collected is of secondary data. Difficult in comparison between different units and sourcing, sanction of proposal made. The information which is collected is of particular region of Berhampur, other parts of

the country are not considered.

CHAPTER-2

INTRODUCTION

SBI is the oldest, the largest and the highest profit making bank in India. Its evolution is not intimately interwoven with the economic development of modern Indian but also with our nation building process to an extent perhaps unparalleled in the world. Moving like a colossus on the Indian financial turf, it has become a symbol of national pride and economic development.

It is interesting to remember that SBI bank traces its lineage to Bank of Calcutta established in 1806 (The first joint sector Bank of British India sponsored by government). Its genesis was based on the classical political economy of Adam smith as a branch of statecraft besides addressing the demands of imperial finance and European Commerce. The Bank which combined deposit banking with the right of currency issue was a unique institution Bank of Bengal (1809), the successor to bank of Calcutta, and the two other presidency banks-Bank of Bombay (1840) and Bank of Madras (1843) were merged in 1921 to form the imperial Bank of India. SBI succeeded the imperial bank in 1955 with clear cut objectives of reaching out to every nook and corner of the country and catalyzing rural and social economic development while re-activating its commercial banking character.

This gigantic quantization is moving with times splendidly adapting to environment metamorphosis and societal expectations, growing healthier and stronger as a trendsetter. Facing competition head on, exploiting opportunities optimally, daring to go to new and exciting area opened up by liberalization; it is in a state of constant flux and renewal.SBI provides commercial loans, personal loans to various segment society for economic growth & societal development where its mission and vision matches to the expectation of national govt. and demand of society. The retail loan which comprise P.segment loan is the main sources of interest earner for the bank. It not only enhance the profitability of the bank but also spread the risk factor of the bank through the wider segment of the customer reaching out to small customer spread all across the country through its vast and varied network, SBI trying its best for social and economic upliftment of poor down trader . Its earns goodwill of society as well as business to the bank. The banks present paunch word-banker to the enemy Indian can be fructified only through the retail loans.

In area of product innovation, customization information technology, reorganization to name a few it is trying to usher in would class standard to book signification global business.

As SBI provide various products, but use focus on retail loans. Basically retail loan mean the following 5 five loans.

House Loans: Owing a home is every person dreams, but the ever escalating property price and sky rocketing interest rate act us a great hindrance to all. Even if one decides to buy a home through home loan finance, the very prospect of meeting several home loan providers to check out their current home loan rate before reaching a final decision, scares the units out off the buyer mind. In this regard SBI provides transparent, trauble free home loans to all eligible home services.

Education Loan: Education loans to all aspiring and deserving students. Now, one can opt free any education. The application is processed within a short span of time. The financial assistance is dependent on a few factors like the course opted you, reputation of the institution, family asset, past career / educational record of the student etc. Education loan is definitely one kind of financial assistance tat cum shape up child’s future.

Personal Loan: Due to the uncertainty of movement of economy and no reliance on the wiled of future, many a time we are confronted with situations where we require a substantial amount of money. We cannot ignore them, neither do we want to but some times we just lack the adequate monetary resource required to handle a situation properly during the courses of our lite. This is where personal loans come in.

A personal loan is basically meant to cater to an individuals need during any requirement, urgent or otherwise. Be it the purchase of a television or refrigerator, paying off your credit card dues wedding of your children etc. you can use it for anything you want. The major advantage of taking a personal loan is the fact of all purpose utility for ones personal use. To add to its benefits, there is no need for any clarification to the lending party regarding as to how one would use would this borrowed money (unlike specific loan like car loans and education loans). Advantage is that the processing is also faster when compared to other loans. What’s more you don’t ever need any security collateral or guaranty for the same. While personal loans are the seemingly perfect solution to ones needs, proper care must always be to compare all options before taking the final leap. The most important factor, as always is the rate of interest being charged which is higher as compared to other loans provided by SBI like education loans, home loans etc.

Car Loan: Owing a car is every one’s dream. Whether its your first car for self , or the second one for the family , be it a compact car you want to buy or a luxury one on eve of its a SUV SBI all feel the need of a car finance, at some or the other time. This holds good for the business segment too. SBI assist you in evaluating the best car loan interest rates, in the shortest possible time, through our car loans

calculator and comparator. SBI assure you the best car loan deal with the lowest EMI and processing fees, through our tie-ups with the car loan providers, dealing in customised car loans.

Other Mortgages Loan: As the name suggested mortgage means security against the loan. The security means mortgage of property of the borrower or of third party if he/she agrees to guarantee the loan. The margin must be 25% of the market values of property. It is provided on term loan.

MARKET SEGMENTATION OF SBI LOANS

In order to keep its number one position SBI has planned to grow organically by diversiting into different segments like.

Corporate Banking Group

a) MCG – Mid Corporate Group.b) CAG – Corporate Account Group. c) Leasing.d) Project Finance.

National Banking Group (NBG)

a) Small & Medium enterprise.b) Personal Banking / Retail Banking.c) Cross Selling. d) Government Business.

INTERNATIONAL BANKING GROUP

ASSOCIATE & SUBSIDIARIES GROUP

TREASURER AND MARKETING GROUP

RURAL AND AGRI – BUSINESS GROUP

CLASSIFICATION OF RETAIL LOANS OF SBI

i) SBI Loan to Pension.

ii) SBI Personal Loan to Affluent Pensioner.

iii) Personal Loan

iv) SBI Saral

1. Personal Loan – Xpress Credit Housing Loans.

i) Normal Housing Loan

ii) NRI Housing Loan

iii) Gram Nivas Loan

iv) Sahayog Nivas Loan

And many other sub product introduced by SBI to cater the needs of various economy group of society.

Now latest promotion housing loan introduced by SBI which are going to be closed by 30.06.2010.

SBI easy home loans-up to 50 lakhs(rate of interest 8% -1st yr ,fixed),(9% -2nd&3rd yr, fixed)

SBI Advantage home loan-less than 50 lakhs(-do-)

2. Education Loans.

i) SBI student loan

ii) SBI scholar education loan

3. Auto Loans.

i) Car Loan

ii) Car Loan Over Draft

iii) NRI Car Loan

iv) Two Wheeler Loan

Now, presently 2 promotional car loan schemes has been introduced by SBI

SBI advantage car loan (Loan Amt More than or equal to 5 lakhs)

SBI Ezee Car Loan (Less than 5 lakhs Amt)

a) 0.25% below SBAR for 7 yr. repaymentb) 0.50% below SBAR for 5 yr. repayment

D. Personal Loans

Personal loan against

v) Mortgage of Immovable Property.

vi)

vii) Festival Loan

viii) SBI Easy Travel Loan

ix) Aptech Courses

x) SBI Education Plus

xi) SBI Home Cash

xii) Mahila Shakti Schemes

xiii) SBI Career Loan –now it is being withdrawn due to lack of demand.

xiv) SBI Reverse Mortgage

FORMATION OF RASMECCC, SARC OF BERHAMPUR AND ITS STRUCTURE

SBI always put importance to productivity and profitability. In order to achieve that goal it has constantly

being changed/ reorganized. Its loans delivery system, product ligaments and product diversion in the

latest position to garner the largest share of business in metro and urban area. It has developed a

centralized system has existence centralize system of loan sourcing,

processing,sanction,documentation,disbursement,follow-up,recoveryof sticky loans to ensure uniform

application of system and procedure, reduction in loan processing time, enhancement of loan recovery

with low NPA asset, enhanced profitability with good looking balance sheet The end result is customer

to bank. In respect it has established RACPC (Retail Asset Central Processing Centre), SMECC (Small and

Medium Enterprises City Center) to cater the needs of business segments and SARC (Stressed Asset

Resolution Centre) which to under took activities of loans recovery of stressed assets. In small and

medium cities it has established RASMECCC – Retail Asset Small and Medium Enterprises Credit City

Centre. This is combination of RACPC, SMECCC and SARC under one umbrella.

RASMECCC, SARC is the combination of RACPC, SMECCC, SARC.

At, Berhampur SBI has established RASMECCC, SARC which is headed by an AGM (Asst.. General

Manager). There are 17 branches and one MPST (Multi Product Sales Team) link to the unit, all the retail

loan as well as SME loan of Berhampur centre are being processed, sanctioned disbursed & maintained

by RSMECCC, SARC.

MARKETING OF LOANS BY BRANCHES AND MARKETING TEAM.

In the Berhampur centre the loan proposal are being marketed / sourced by various unit like branches,

MPST, CRE, MRO, RMPB.

MRO = Marketing Recovery Officers.

CRE = Customer Relation Executives.

CRA = Customer Relation Assistance.

MPST = Multi Product Sales Team.

Branches source the proposal from, a customer for different products like housing, car loan, education

loan etc and enter the application into Dream Home format and work flow software from which they get

identification (ID) for the loan application and IPL (in principled Sanction Letter) whose one copy is given

to the customer.

Later, loan application with ID one copy of IPL sent to RASMECCC, SARC for processing of the proposal.

At RASMECCC there is control officer (CO) who on the receipt of physical application verifies with work

flow. ID and after that enter in the workflow it and registered. The application gets automatically

distributed among the processing officer by the software. Then the CO Handover the allotted loan

application to the designated processing officers.

BRANCHES:

They are prime source of mobilization of loan application / business. Since they are at the local point

level to interact with customer, they assume important role in sourcing loan applications. With the

introduction hi-tech product like mobile banking, internet banking, ATM/ Debit card and Credit card, the

visit of customer to branch reduced drastically. Still it is the main sources of interaction with the

customer for popularizing and marketing the product.

Branches took all the efforts to meet nearly all the requirement of the customer like deposit, advances, insurances etc. under single window system to improve customer satisfaction

MPST – It is headed by an officer called as team leader who is assisted by marketing personal. They act

as a separate entity with specific target for sourcing. They work like a branch for sourcing of loan

proposals. They covered the entire city and sources proposal of customers and non-customers of all

branches.

CRA - They are posted at rural branches for mobilization of deposits and sourcing of business. They

source retail loan proposal and agri-business proposal. They send the proposal to RASMECCC through

their branch head.

CRE- They are executives on contractual basis. Their main work is to popularizing the hi-tech products,

cross selling products (SBI Life Products, Mutual Fund Products etc). They market the high-tech product

along with the sourcing of loan proposal.

MRO- They are also posted at branch having agriculture business. They mainly concerned for marketing

as well as recovery of loan products.

RMPB – He is posted to take care of the needs of the HNI as well as the need of all the customer of the

branch at large. In Berhampur one RMPB is posted at Berhampur branch. He interacts with the customer

and understand their needs and expectation and advices them suitable product to meet their

requirement. He obtains the loan proposal from the customers and sends it to the RASMECCC, SARC,

Berhampur.

o .

FLOW OF LOANS PROPOSAL AT RASMECCC (PROCESS CHART)

(C.O)

Receives the proposals.

Allots the Proposal

to the processing

officer (P.O)

(P.O. (Processing Officer)

Here, P.O. may ask for

- Additional document if required - Scrutinized the proposal - Undertook pre-santion

Customer

Approaches

BRANCH / MPST / SOURCING UNIT

Loan Proposal Sources

RASMECCC

P.O.

- Processing of Loan Proposal

(By the P.O.)

By santioning officer

(Document Officer)

Formalities for sign of documents Embossing (Stamp Cancellation) EM Creation (Equitable Mortgage)

- For checking C/F- Maintenance - Authorization of loans

PROPOSAL PROCESSED

RECOMMENDED FOR SANCTION / RETURN/REJECTION

SANCTIONED THE PROPOSAL

D.O.

MANAGER

Maintenance

DISBURSEMENT

Which is done by Account officer (A.O)

For the maintenance

-Whether Account opened properly under proper scheme code

- Name of applicant

Amt., interest rate, repayment period and finally he does data purification in case of need.

He maintains accounts-sees the normal

Repayment it

It no repayment is coming then sending of letter, phone

Call, personal meeting. If no repayment is

Coming for more them 3 months then

Transferred the said loan document along with all reports to SARC under permission from AGM.

o Regd. letter to customer, personal visit.o Lawyer notice o Still no payment is coming than legal action

is taken. Filing of suit at district court, DRT, enter into compromise(in case of need

o Write off the sticky loans

A.M.O.

SARC

o Under took recovery process in case of written off account.

Monitors the progress of suit filed cases

GET A LOAN PRODUCT OF SBI

Furthermore, the lender also evaluates the residential proof, the tenure of one’s work experience and most importantly, the repayment capacity based on one’s income, savings and debt obligations so as to ensure the borrower’s credibility to pay off the loan.

KYC (KNOW YOUR CUSTOMER)

1. Proof of identity (any one)

o Passport

o Driving License

o Voter’s ID

o PAN Card

2. Proof of Age

3. Proof of residence

o Electricity bill

o Telephone Bill

4. Proof of Income (Salaried)

o Proof of Continuity in Current Profession

o Bank Statement from Operating Account for 6 month

o Income Tax Returns for 2 years with Computation of Income / Certified Financials

o Form 16

5. Proof of Income (Business Man)

o IT Return of 3 years with computation sheet ,balance sheet

o Nature of business

o Types of business

o Place of Business

o Account where the turnover is reflectedThis document are common for all types of loans.

GET A LOAN PRODUCTS OF SBI

Documents:

a) Home Loan:

- RSD-Regd. Sale deed

- ROR-Record of right (Patta or Khatian)

- Revenue Receipt

- Holding Tax (For existing house)

- Plan approval by competent authority

- Estimate of plan

- Link document if required

- Title investigation report to be prepared by bank

b) Education Loans:

Co-Applicant with the student

Co-Applicant may be father

Mother, in case parent deceased

Grand Father / Grand Mother

-10th to last qualifying examination

Mark Sheet

Certificate Photocopies

-Domicile Proof

- Selection procedure (XAT/GAT/CAT/MAT) with Rank Card.

-Admission letter / Intimation letter

- Latest Fee Structure

c) Car Loans:

For New Cars

-Quotations

-Provision of Margin

For used car

-Agreement to sale

-RC Book, Insurance Copy

-Car should not be a second hand, car nor should insurance claim be there.

-Valuation by approved garage owner

d) Personal Loans: For account holder whose salary is being credited at SBI.

- Latest Salary Slip Signed by DDO

(Drawing Disbursing Officer)

- Check off facility provided by DDO

(If no check off, PDC to be provided for the entire tenure of the loan)

e) Other Mortgages Loan:

Like HL all documents to be provided.

a) Valuation – Done by Bank but cost borne by the customer.

Home Cash:

-Valuation, if the value/loan amount is equal to or less than 2 lakhs,no valuation required. If loan

amount is more 2 lakhs valuation needed for processing the proposal

- Latest list receipt / Revenue Receipt

- Latest Non-Encumbrance Certificate

Home Loans:

Purpose

a) Purchase of plot

b) Purchase & construction of new house of the flat.

c) Purchase of existing cold house / flat / extension of existing house

d) Repair / Renovation of existing house / flat

e) Furnishing / consumer durable as part project cost. Maximum percentage of the project cost

amount Rs. 3, 00, 000.00.(3 lakhs) or 10% of the project cost whichever is less proof of source of

fund before completion of 12 months.

f) Re-investment of investment made from own resources giving the proceeding 12 months for

purchase / construction / repair / extension of house.

Loans for more than one house can be granted to one individual provided he/she fulfill the

income criteria.

Take over of house loan from other banks/ financial institution is also considered.

Eligibility;

a) Minimum age more than 18 years maximum age 70 years.

(The loan will be repaid fully on or before 70 years of age of customer.

b) Loan can be avail by individual along with wife, son unmarried daughter as co-borrower.

c) Land should be in his own name.

d) He should have steady sources of income.

STUDENT LOAN

SBI EDUCATION LOAN SCHEME

(SBI STUDENT LOAN SCHEME)

Introduction The education loan scheme was formulated in November 2004 on IBA guidelines

as per Govt. of India directives. The model education loan scheme was revised by

IBA in November 2007 and forwarded to member banks for implementation. IBA

has also advised few changes subsequently, which have been incorporated in the

scheme.

Renaming the

scheme

The education loan scheme was renamed as SBI student loan scheme w.e.f. January

10, 2006.

Purpose The scheme seeks to extend financial assistance to deserving / meritorious students

for pursuing higher education in India and abroad.

Eligibility Criteria Courses Eligible

a. Studies in India:

Graduation course: B. A, B. Com., B.Sc etc.

Post Graduation courses: Master Degree and Ph. D.

Professional Courses

Engineering Medical, Agriculture, Veterinary, Law, Dental, Management,

Computer etc.

Computer Certificate course of reputed institutes accredited to Department

of Electronics or Institutes affiliated to a university.

Courses like ICWA, CA, CFA etc.

Courses conducted by IIM, IIT, IISc, XLRI, NIFT etc.

Courses offered in India by reputed foreign universities.

Evening courses of approved institutes.

Other courses leading to Diploma / Degree etc. conducted by college /

university approved by UGC / Govt. / AICTE / AIBMS / ICMR etc.

Courses offered by National Institutes and other reputed private

institutions.

Regular Degree / Diploma courses like Aeronautical, Shipping etc.,

approved by Director General of Civil Aviation / Shipping if the course is

pursued in India. In case the course is pursued abroad, the Institute should

be recognized by the competent local aviation / shipping authority (Except

Pilot training course which is presently considered under SBI Career Loan

Scheme).

Teacher Training Course /Nursing Course B.Ed., will be eligible for

education loan provided the training institutions are approved either by the

Central Government or by State Government and such courses should lead

to Degree or Diploma Course and not to Certification Course. The fees to

be considered for the purpose should be the fees structure as stipulated in

Central / State Government Colleges.

Vocational Training and skill development study courses will not be

covered under the Model Education Loan Scheme, as the scheme is

framed to provide bank loans for higher studies. Such course / requests

may be considered under normal credit lending programmes.

Medical course in countries of the erstwhile USSR, China, Nepal and

other countries not recognised by Medical Council of India will not be

covered.

The GM (Network) may approve institutions / tie-ups with educational

institutions and the specific courses for which loans may be granted, for

their area of operations, depending on future prospects / recognition by

user institution. The LHO concerned will advise all other Circles directly

regarding the name of the institution and other details of the arrangements,

subject to compliance of KYC norms both by the student and the parent. A

record of such arrangements should be maintained at the LHO and brief

details thereof, advised on monthly basis to the Personal Banking Business

Unit at this office for building up data base. Such institutions / courses

should be revised periodically for renewal of the arrangement or

otherwise. While approving the courses by GM (Network), aspect relating

to the reputation / standing of the course and institution in respect of which

Education Loan could be provided may be examined with a view to

ascertaining the employment prospects of the course and applicant’s future

income.

b. Studies abroad:

Graduation: For job oriented professional / Technical courses offered by

reputed universities.

Post graduation: MCA, MBA, MS etc.

Courses conducted by CIMA (Chartered Institute of Management

Accountants) – London, CPA (Certified Public Account) in USA etc.

Aicte/UGC Approved

Courses:

AICTE vide Advt. No. AICTE / Admn. IV / 08 (01) / 2008 published in the

News Papers that it is mandatory to obtain AICTE approval for “Technical

Education”.

In terms of Ministry of Human Resource Development, Government of India,

Notification No. F.2.1. / 2006 U.3(A) it is not a pre-requisite for an institution

notified as ‘Deemed to be University to obtain the approval of AICTE to start

any programme in technical or management education leading to an award,

including degrees in disciplines covered under the AICTE Act, 198. However,

institutions notified as ‘Deemed to be University are required to ensure the

maintenance of the minimum standards prescribed by the AICTE for various

courses that come under the jurisdiction of the said Council. It is expected that

the institutions notified as ‘Deemed to be University maintain their standards

of education higher than the minimum prescribed by AICTE.

AICTE / UGC guidelines on institutions notified as ‘Deemed to be University’

are available on the official web-site (www.ugc.ac.in) & (www.aicte.ernet.in)

of the UGC and the AICTE respectively. Branches / RACPCs may refer

AICTE notification while considering Management / Technical Courses.

Car Loans:

1. Purpose: Terms & Overdraft will be sanctioned by the Bank for purchase of new passenger cars,

Multi Utility Vehicles (MUVs) and SUVs .

2. Eligibility: Age: 21-65 years. (For Sanction of loan)

Loans can be granted by sanctioning authority to individuals who have sufficient, regular and

continuous source of income for servicing the loan repayment beyond 65 years. Loan must be

fully repaid before the borrower attains the age of 70 years.

Following applicants are eligible under the scheme:

i) Regular employees of State / Central Govt. Public sector undertakings, corporations, private

sector companies, and reputed establishments.

ii) Professionals self-employed, businessmen, proprietary firms who are income tax assesses.

iii) Loans to existing Units enjoying limits for a minimum period of 1 year and the account is

conducted satisfactorily and classified and classified as Standard asset.

iv) Loans to New Units enjoying limited with other banks and account conducted satisfactorily

and classified as Standard asset subject to satisfactory opinion report and verification of

statement of accounts for 12 months.

Minimum Income:

Net Annual Income of applicant and / or co-applicant if any, together should be Rs. 1,00,000/- p.a.

and above. Net monthly income of applicant’s should be at least 2 times EMI. Income from other

sources like bank interest / dividends of listed companies, rent agriculture income can be added.

Self-employed, professional and proprietary / partnership firms.

Net profit or gross taxable income of Rs. 1, 00,000/- p.a. as per ITR after netting off depreciation

and repayment of all existing loans or turnover of Rs. 10.00 lakh p.a. Business income from other

sources like bank interest / dividends of listed companies rent agriculture income can be added.

3. Authorized Branches.

All RACPCs, RASECCs, RCPCs all PBBs all super circle of excellence branches all districts headquarter

branches, project area branches and branches specially authorised by the AGM (Region) will implement

the scheme.

4. Loan Amount.

Now two promotional car loan scheme introduced by SBI .one is

-SBI Ezee car loan where the loan amount is less than 5 lakhs and 2nd is SBI Advantage car loan

where the loan amount is more than 5 lakhs.

a) Personal Loan against Mortgage of Immovable Property.

Purpose General Purpose Loan

Eligibility Individuals

Maximum age

Minimum credit

score

Income

Employees / Professionals & Self employed and others who are IT assesses /

Agriculturists and others engaged in allied activities.

Individual should not be more than 60 years of age cut off score of 60 marks as per

credit scoring model devised for this scheme.

Min.NMI of Rs. 12000/- for salaried

Minimum NAI of Rs. 12000/- for salaried

Minimum NAI of Rs. NAI of Rs. 1,50,000/- in case of all others.

Loan Amount Minimum Rs. 25,000/-

Max. 75% of market value of property with a ceiling of Rs. 1.00 crore subject to

EMI/NMI<50%. [as per Bank’s approved valuer’s report not more than 3 months old.]

Security Mortgage of property of the borrower or of third party if he/she agrees ti guarantee the

loan.

Insurance Insurance is a must against risk of fire, riots earthquake, lightning, floods etc. in joint

names of borrower and Bank for full market value.

In case the borrower provides additional liquid collateral the insurance ca be waived.

Margin 25% of the market value of property.

Type of Loan Term Loan No. overdraft facility.

Repayment Period With checkoff: maximum of 120 months [or date of retirement]

Without checkoff: 60 months. Where check off is not available, PDCs should be

obtained.

Processing Fee 1.10% of the loan amount [ inclusive if service tax]

Inspection Annual inspection for Standard Assest accounts.

Twice a year for NPAs.

Record to be maintained in the inspection register.

Authorised Branches PBBs, Branch with P Division and Any other branch authorised by the Circle

Management.

.

PERSONAL LOAN – X-press credit

PERSONAL BANKING ADVANCES

XPRESS CREDIT SCHEME

MODIFICATIONS

Our Xpress Credit Scheme was launched in the year 2004 to give loan on concessionary terms to

low-risk target groups, like employees of government, semi-government, profit making PSUs and

educational institutions of national repute. Subsequently the Target Group was enlarged to include

employees of SB1, SB2 rated companies. The scheme was built around the concept of check-off (the

process by which the salary disbursing officer undertakes to deduct loan installments from the salary

of the borrower and remits the same to the Bank for credit of the loan account). Xpress Credit Loans

may also be sanctioned in those cases where the borrower gives sufficient PDCs (Post Dated

Cheques) for entire tenure of the loan with the approval of the GM) Network).

2. During our phone calls to branches across the country, we have been given to understand that

the lack of check-off is proving a hindrance to business growth under the scheme. Further, while the

scheme in its present form generates satisfactory NIM of around 2%, the interest rate needs to be

fine tuned to suit the risk element involved in financing various groups of salaried employees. Also,

we are of the view that the scheme needs to be revised with a view to bringing high quality personal

loans to our books, while excluding the lower grade employees who have hitherto contributed a

significant portion of the NPAs in this portfolio.

2. Accordingly, it has been decided to make the following changes.

i) Net Monthly Income.

The minimum Net Monthly Income (NMI) required for eligibility under the scheme has been

enhanced from Rs. 2500/- to Rs. 5000/-.

ii) Requirement of check-off.

a) Obtention of the following documents may be waived by the sanctioning authority in

the case of employees of Central/State Government, PSUs University and reputed

colleges.

Irrevocable authority from employer for making payment out of any amount

payable to the employer, e.g. terminal benefits in case of his/her retirement,

resignation, discontinuance of service or death.

Undertaking from the employer to obtain a NOC from the Bank before setting

the dues of the borrower on transfer, resignation, retirement etc.

b) In the case of other employers, the CGM of the Circle has been permitted to waive the

above documents. However, there would be no waiver of this stipulation in the case if IT

sector employees.

c) Cases may also be accepted as check-off where all the following requirements would be

fulfilled.

The employer pays the borrower’s salary into his Savings /Current Account with

our Bank.

The borrower give an irrevocable Standing Instruction (SI) for recovery of the

loan installments from his aforesaid account with the SI being synchronized with

the date of credit of salary in the borrower’s Saving / Current Account, and also

The employer undertakes to inform the Bank if and when there is a severance

due to borrower’s transfer, resignation, retirement etc.

iii) Interest Rate.

The interest rate for Xpress Credit Scheme which was fixed at floating SBAR (currently

10.25%) has been revised as under:

a) SBAR floating (current 10.25%) for all loans where we have availability of check-off from

the employer as defined in paragraph 1 above and the employer undertakes to inform

the Bank if and when there is a severance due to borrower’s transfer, resignation,

retirement etc. Check-off would include recovery by debiting the salary account of the

borrower maintained at the branch based on Sls given by him.

b) 1% above SBAR floating (currently 11.25% for all loans where check-off is available, but

the employer is not willing to inform the Bank if and when there is a severance due to

borrower’s transfer, resignation, retirement etc. The same rate would also be applicable

in cases where no check-off is available, but the borrower provides monthly PDCs for

entire tenure of the loan with the approval of the GM (Network).

c) 2.5% above SBAR floating (currently 12.75% in all other cases.)

Rationale: To streamline the instructions and make it more customer friendly.

Index Under: Personal Banking Advances – Xpress Credit Scheme – Check-off facility guidelines.

Check-off facility – personal Banking Advances – Xpress Credit.

Xpress Credit Modifications

PERSONAL LOAN (SARAL)

4. Eligibility.

Any personal will be eligible for SBI Saral Loan, who satisfies all the following conditions:

He should have sufficient cash flows to repay the loan from salary (in the case of

employees) or regular income (in the case of other persons), as evidenced by 6 months

salary slips / income tax returns of 2 years (Employees should have minimum 1 years

length of service). Income in all cases should be sufficient to take care of a ratio of

EMI/NMI of 50% at least.

He should provide proof of residence and proof of identity to satisfy KYC norms.

He should produce 6 months satisfactory statement of bank account (at any bank).

If the customer is a credit card holder he should be asked to submit last 3 months credits

card statement (pertaining to any bank).

He should score minimum 50 marks in the Credit Scoring Model.

5. Minimum Income.

For employees, the net monthly income (NMI) should be at least Rs. 5000/- after all

deductions (including income tax).

For others, the net annual income (NAI) should be at least Rs. 60,000/- (i.e. income as per

latest income tax return less tax payable)

Income of spouse must be considered if the loan is availed jointly or the spouse guarantees

the loan.

6. Loan Amount.

Minimum : Rs. 24,000/- in metro and urban centers

Rs. 10,000/- in rural / semi urban centers

Maximum :

12 months NMI for salaried individuals

1 year’s NAI in case of others

Ceiling of Rs. 10 lakhs in all centers, subject to credit score of 50 or more.

7. Security.

The loan is clean in nature and security should not be taken for SBI Saral Loans. A borrower who

is able to provide security, will be financed not under Saral Scheme but under the relevant

scheme corresponding to the nature of the security eg. Mortgage loan against property, Share

Loan against Shares, Secured Loans against security etc.

8. Type of Loan.

The loan will be sanctioned as a term Loan.

SBI HOME PLUS

This scheme launched in August 2007, is a personal Loan, tailor-made exclusively for existing Home Loan Customers

Eligibility All Home Loan Customers with a satisfactory repayment record of at least one year and who

maintain a CA/SB a/c with Us.

Eligible loan

amount

Present market value of the house property (to be decided by a fresh valuation from an approved

panel engineer/ valuer) less.

(1) Margin of 25% on the property value and (ii) the present outstanding in the HL a/c.

Minimum loan amount Rs 25,000/- maximum Rs 10,00,000

(for loans upto Rs 2 lacs valuation as above not required and an assessment could be done by

the sanctioning authority.)

Purpose Any purpose, VIZ. Extension/ repair of house, purchase of car/ consumer durable education/

medical expenses of family members, personal expenses etc. No need to obtain documentary

evidence for the end –use of funds. A certificate from the customer in the application to the effect

that the loan will not be used for speculative purpose to be obtained.

Nature of

facility

Term loan/ Current Account Overdraft.

ATM – cum Debit Card to be issued in the case of CA OD.

Processing fee 0.50% of the loan amount with a minimum of Rs 500/-.

EMI/NMI

ratio

Not to exceed 60% but may be relaxed upto 70% for borrowers with NMI of Rs 10 lacs and

above. The EMI will include EMI of both proposed and present borrowings, including all other

loans by the same borrower(s).

No. of loans 2nd loan after a gap of 2 years from the first loan. At any point of time not more than 2 loans to

exist, within the overall ceiling of Rs 10l lacs other than the H L.

Security Extension of mortgage of the house property.

Repayment &

Moratorium

(i) TL repayable in EMIs convenient to the borrower beginning one month after loan

disbursal subject to max. of 120EMIs.

(ii) OD facility will operate on a reducing DP arrangement on the EMI basis subject to a

maximum of 120 EMIs

With in the overall repayment period of 10 years, the sanctioning authority may

permit, at the request of borrower a moratorium of upto 12 months subjects to serving of

interest.

Repayment Term Loans under the schemes may be prepaid. A prepayment penalty of 1% to be charged on the

amount prepaid.

No prepayment penalty if both the Home and Term Loan are prepaid simultaneously from own

resources.

Application, Prescribed format for application, appraisal arrangement letter. Loan agreement applicable for PL

Appraisal,

documentatio

n

against mortgage of immoveable properties to be used. Credit Scoring Model.

Mortgage Loan:

Income – 1200 per month if salaried Rs. 1,50,000 per annum for non-salaried age should not be

more than 60 years.

Minimum age 18 years.

Reverse Mortgage:

Old, childless / children not taking care of parents takes this loans by giving the their property as

the mortgage for the sum amount for the monthly expenditure for certain age.

a) Age more than 60 years but less than 65 years.

b) More than 6 years.

No repayment is needed advance value depend on the valuation of property for

a) Category – Loan tenor is 15 years.

b) Category – Loan tenor is 10 years.

Loan Amount for:

a) Valuation x 90% x 0.33

b) Valuation x 90% x 0.21

BUSINESS PROCESS REENGINEERING.

The analysis and design of work force and processes within and between an organization. A business

process is a set of logically related tasks performed to achieve a definite business outcome.

Reengineering is the basic for many recent developments in management. He cross functional team, for

example has become popular because of the desire to reengineer separate functional; task into

complete cross functional process. Also, many recent management information systems developments

aim to integrate a wide number of business functions. Enterprise resource planning, supply chain

management, Knowledge Management System, Group ware and collaborative systems, Human

Resource Management System and Customer relationship management systems all owe a debt to

reengineering theory.

Business process reengineering is also known as business process redesigned business transformation,

or business process change management.

OVERVIEW.

Business process reengineering (BPR) began as a private sector technique to help organizations

fundamentally rethink how they do their work in order to dramatically improve customer

service, cut operational costs, and become world class competitors. A key stimulus for

reengineering has been the continuing developments and deployment of sophisticated

information systems and networks. Leading organizations are becoming bolder in using this

technology to support innovation business process, rather than refining current ways of doing

work.

Business process reengineering is one approach for redesign the way work is done to better

support the organization mission and reduce costs. Reengineering starts with a high level

assessment of the organization’s mission, strategic goals, and customer needs. Basic questions

are asked, such as “Does our mission need to be redefined? Are our strategic goals aligned with

our mission? Who are our customers?” An organization may find that it is operating on

questionable assumption, particularly in terms of the ones and needs of the customers. Only

after the organization rethinks what it should be doing, does it go on to decide how does to do

it.

In order to achieve the major improvements BPR is seeking for, the change of structural

organizational variables, and other ways of managing and performing work is often considered

as being insufficient. For being able to reap the achievable benefits fully, the use of information

technology is conceived is a major contributing factor. While IT traditionally has been used for

supporting the existing business functions, i.e. it was used for increasing organizational

efficiency, it now plays a role as a enabler of new organizational forms, and patterns of

collaboration within and between organizations.

BPR derives its existence from different disciplines, and four major areas can be identified as

being subjected to change in BPR – Organization , technology, strategy, and people – where a

process view is used as common frame work has considering these dimensions. The approach

can be graphically defecated by a modification of “ Leavitt’s diamonds”.

Business strategy is the primary driver of BPR initiatives and the other dimensions are governed

by strategies and encompassing role. The organization dimension reflects the structural

elements of the company, such as hierarchical levels, the composition of organizational units,

and the distribution of the work between them. Technology is concerned with the use of

computer systems and other forms of communication technology in the businesses. In BPR,

information technology is generally considered as playing a role as enabler of new forms of

organizing and collaborating, rather then supporting existing business functions. The people /

human resources dimension deals with aspects such as education, training, motivation and

reward systems. The concept of business process- in interrelated activities aiming at a creating

a value added output to a customer- is the basic under laying idea of BPR. These processes are

characterised by a number of attributes process ownership, customer focus, value adding, and

cross functionality.

BPR BENEFITS TO SBI.

1. Uniform application of system and procedure by centralize processing, sanction, follow-

up at RACPC, SMECCC, and SARC.

2. Double financing / multiple financing can be avoided.

3. Productivity per employee will be enhanced.

4. Intensive follow-up of written off accounts, NPA accounts can be carried out.

5. Customer satisfaction can be maximized.

6. Quality of record keeping, reporting will be enhanced lead to audit satisfaction and

resulting in a clean and better looking balance sheet of the organization

TECHNOLOGY.

Loans in P-segments like – HL, CL, FL is being processed by using dream home software and BPR

now SBI proposed to replace dream home software by LOS software (Loan Origination

Software) developed by Nuclear Software Export Ltd. By 01.07.2010 which coincide with bank

day of SBI.

The LOS software how being used by ICICI, HDFC an AXIS bank. In addition SBI uses workflow

software which saved this way for easy money transfer,( lending to abolition of money transfer

etc),avoidance(present status of the loan proposal)of multi-financing, reduction of fraud due to

prompt IOR(inter office reconciliation)settlement etc..Under Core Banking Solutions (CBS) for

which technology provided by TCS. By using CBS, all this branches around 12500) at SBI and

4500 branches of associate banks are networked.

Manual banking-Bank Master software - core banking software - Dream Home (at RACPC, RASMECC)-workflow software –LOS (loan origination software)

INTERPRETATION

The project is basically made to know the agency linked process. And the flow of loan

proposal at RASMECCC (process flow).Find out the performance of RASMECCC, SARC of

Berhampur for the comparison of performance position and sourcing of loans. It also find of

qualitative time around table so, that the bank could aim to finish the loan process within

schedule time state by bank which can be seen by TAT position.

Comparison between different loan under retail sector and between two year performance

summary could help to know the working of the bank .to research on consumer needs,

demand of loan, their limitation. Find out maximum sanction area and rejection /return

reason.

The data provided the bank is stated in tabular for which show the total sourcing and the

total proposal sanction made during the 2009-2010 which show credit growth or the

Berhampur region.

THE COMPARISATION BETWEEN THE 2009 AND 2010 BUSINESS PERFORMANCE

The growth rate of sanction is more in 2009 as compared to

2010 which is 175.32 and 29.77.

The sanction percentage of 2010 is more than 2009 which is

84.40% and 80.19

SUMMARY OF FINDINGS AND CONCLUSION

In 2009 the total proposal sanctioned is 1283 amounting 37.84. The year over year growth in sanction of 2008-2009is 175.32 in number amounting 95.56. The performance of 2008-2009 1283 and amounting 37.84. The proposal sanction in 2009-2010 is 84.40 amounting 78.73. The rate of growth comparing between two year found decreased because the growth rate of 2008-2009 is 175.32 and amounting 95.56 but the year 2009-2010 having 29.77, amounting 45.85.

Every bank has a standard timing for loan processing. For every loan sanction proceeding. To reach to the branch it takes one day, for site visit it was set to be two days, for search report process set to four days, valuation it was set to be done within two days .and every loan product proceeding housing loan takes six days, where education loan takes five days ,car loan sanction required two days. But the position of the for the proceeding is best as because all the proceeding are within the standard timing.

It shows the different types of under the retail loan where all the total received, return/rejection of proposal is mentioned. The total amount to 2117.16 of which 212 proposals where sanctioned is 71.62.The total proposal of education loan is 385 amounting 1226.11 of which 351 proposal where sanctioned amounting 1099.11. The rate of sanctions 91.16.Car loan proposal received 146 proposal amounting 434.01. From which 126 proposal where received 369.99. Personal loan proposal received is 719 amounting 918.78 sanctioned 569 proposal amounting 707.06. The rate of sanction from for education loan for 2009.

In 2010 the total number of proposal received in retail loan segment 1905 proposal amounting 6448.61 The rate sanctioned in housing loan 77.30,educational loan it is 89.95,car loan 89.40 ,personal loan 82.98.The highest rate of sanction in 2010 is educational loan by 89.95.The total proposal sanctioned in 2009 is 1258 amounting 3641.68. And the total proposals sanctioned in 2010 is 1615 amounting 5159 ,there is the increase in the proposal sanction from 2009to 2010 by 28.37.

REASON FOR HIGH RETURNS OF PROPOSALS

Personal loan-EMI/NMI ratio not compliant present loan irregular.

Educational loan-Most cases AICTE Approval /collateral security not available as per requirement of the scheme.

Housing loan-

Approval from development authority not available. Adverse layer’s report. No proof for verifiable soures of income.

SUGGESTION:

(a) Face Values of the bank reduce.

(b) Delay in some part is delayed than the whole system becomes delay.

(c) Difficult to keep interpersonal relation as branches so, it loss some

customers.

(d) Inconviences for customers for the different branches for

documentation they have to travel a long distance.

(e) Lack of knowledge.

Branch staff are not updating knowledge since they are not growing the

loans.