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CHAPTER 1
1.1.
Introduction:
The Indian banking system is characterized by a large number of banks with mixed ownership. The commercial banking segment comprises 27 public sector banks in which the Government has majority ownership, 40 private sector banks, and 33 foreign banks. Total bank assets constituted a little over 70 percent of GDP in 2003-04. Public sector banks had 75 percent of the assets of the banking system in 2003-04, while private and foreign banks held 25 percent. In 1991, by comparison, public sector banks share of the total assets of the banking system was a little over 90 percent. Prior to the initiation of financial sector reforms in 1992, the Indian financial system essentially catered to the needs of planned development, and the government sector had a predominant role in every sphere of economic activity. The preemption of a large proportion of bank deposits in the form of reserves and an administered interest rate regime resulted in high-cost and low-quality financial intermediation. The existence of a complex structure of interest rates arising from economic and social concerns about providing concessional credit to certain sectors resulted in cross subsidization, which implied that higher rates were charged to non-concessional borrowers. The system of administered interest rates was characterized by detailed regulatory prescriptions on lending and deposits, leading to a multiplicity of interest rates. As a result, the spreads between deposit and lending rates of commercial banks increased, and the administered lending rates did not factor in credit risk. The period 1992-97 laid the foundations for reform in the banking system (Rangarajan, 1998). It saw the implementation of prudential norms pertaining to capital adequacy, income recognition, asset classification, provisioning, and exposure norms. While these reforms were being implemented, the world economy also witnessed significant changes, coinciding with the movement towards global integration of financial services (Government of India, 1998). Against such a backdrop, a second government-appointed committee on banking sector reforms provided the blueprint for the current reform process (Government of India, 1998). Critical and noteworthy reforms in the financial system during the reform period included the following (Bhide, Prasad, and Ghosh, 2001): Lowering of statutory reserve requirements to the current levels of 5 percent for cash reserves and 25 percent for statutory liquidity ratios. Liberalizing the interest rate regime, allowing banks the freedom to choose their deposit and lending rates. Infusing competition by allowing more liberal entry of foreign banks and permitting the establishment of new private banks.
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Introducing micro-prudential measures such as capital adequacy requirements, income recognition, asset classification and provisioning norms for loans, exposure norms, and accounting norms. Diversifying ownership of public sector banks by enabling the state-owned banks to raise up to 49 percent of their capital from the market. Seventeen state-owned banks accessed the capital market and raised around 82 billion rupees (Rs) as of end-March 2004. Mandating greater disclosure in the balance sheets to ensure greater transparency. Adopting a consultative approach to policy formulation with measures being ushered in after discussions with market participants to provide useful lead time to market players to make necessary adjustments.
As a consequence of the reforms, public sector banks share of total assets in the banking system was reduced from 90 percent to 75 percent between 1991 and 2004. The fivebank asset concentration ratio declined from 0.51 in 1991-92, to 0.44 in 1995-96, and to 0.43 in 2003-04 (Table 1). Even the five-bank loan concentration ratio showed a decline from 0.68 in 1991-92, to 0.48 in 1995-96, and further to 0.41 percent in 2003-04. The entry of new banks in the private sector reduced asset concentration, which may have strengthened competition. The general notion is that competition enhances efficiency. This may not always be true. It is also argued that increased competition may lead to excessive risk-taking. Others have argued that concentration/consolidation is needed to gain economies of scale and scope so that increased concentration leads to efficiency improvements. This paper does not attempt to discuss the pros and cons of competition. It evaluates the degree of competition in the Indian banking system. A number of factors make the banking sector in India an interesting case study. First, during the 1990s, India underwent liberalization of the banking sector with the objective of enhancing efficiency, productivity, and profitability (Government of India, 1991). Second, the banking sector underwent an important transformation, driven by the need for creating a market-driven, productive, and competitive economy in order to support higher investment levels and accentuate growth (Government of India, 1998).
To analyze financial performance To know how the theory learned are practically applied in an organization To evaluate the strength, weakness, opportunity and threats of the company To study the overall performance of the company
1) Primary data:
The primary data is that data which is collected fresh or first hand, and for first time which is original in nature. Primary data can collect through personal interview, questionnaire etc. to support the secondary data.
Primary Source:
Personal interview of staff members of the organization
Secondary Sources:
Books Websites Reports Research Papers
1.6 Limitation:
The study is conducted only in one branch on Indian Bank. Due to confidential information, most of the data are collected by means of secondary source. The study is confined to Indian bank alone among the whole Indian banking industry The study is conducted only during the 40 days of internship, hence only General banking procedures and familiar products were observed.
CHAPTER 2
Indian merchants in Calcutta established the Union Bank in 1839, but it failed in 1848 as a consequence of the economic crisis of 1848-49. The Allahabad Bank, established in 1865 and still functioning today, is the oldest Joint Stock bank in India. It was not the first though. That honor belongs to the Bank of Upper India, which was established in 1863, and which survived until 1913, when it failed, with some of its assets and liabilities being transferred to the Alliance Bank of Simla. When the American Civil War stopped the supply of cotton to Lancashire from the Confederate States, promoters opened banks to finance trading in Indian cotton. With large exposure to speculative ventures, most of the banks opened in India during that period failed. The depositors lost money and lost interest in keeping deposits with banks. Subsequently, banking in India remained the exclusive domain of Europeans for next several decades until the beginning of the 20th century. Foreign banks too started to arrive, particularly in Calcutta, in the 1860s. The Comptoire d'Escompte de Paris opened a branch in Calcutta in 1860, and another in Bombay in 1862; branches in Madras and Pondicherry, then a French colony, followed. HSBC established itself in Bengal in 1869. Calcutta was the most active trading port in India, mainly due to the trade of the British Empire, and so became a banking center. The Bank of Bengal, which later became the State Bank of India. The first entirely Indian joint stock bank was the Oudh Commercial Bank, established in 1881 in Faizabad. It failed in 1958. The next was the Punjab National Bank, established in Lahore in 1895, which has survived to the present and is now one of the largest banks in India. Around the turn of the 20th Century, the Indian economy was passing through a relative period of stability. Around five decades had elapsed since the Indian Mutiny, and the social, industrial and other infrastructure had improved. Indians had established small banks, most of which served particular ethnic and religious communities. The presidency banks dominated banking in India but there were also some exchange banks and a number of Indian joint stock banks. All these banks operated in different segments of the economy. The exchange banks, mostly owned by Europeans, concentrated on financing foreign trade. Indian joint stock banks were generally undercapitalized and lacked the experience and maturity to compete with the presidency and exchange banks. This segmentation let Lord Curzon to observe, "In respect of banking it seems we are behind the times. We are like some old fashioned sailing ship, divided by solid wooden bulkheads into separate and cumbersome compartments." The period between 1906 and 1911, saw the establishment of banks inspired by the Swadeshi movement. The Swadeshi movement inspired local businessmen and political figures to found banks of and for the Indian community. A number of banks established then
have survived to the present such as Bank of India, Corporation Bank, Indian Bank, Bank of Baroda, Canara Bank and Central Bank of India. The fervor of Swadeshi movement lead to establishing of many private banks in Dakshina Kannada and Udupi district which were unified earlier and known by the name South Canara ( South Kanara ) district. Four nationalized banks started in this district and also a leading private sector bank. Hence undivided Dakshina Kannada district is known as "Cradle of Indian Banking".
2.2.1 Pre-Independence:
The period during the First World War (1914-1918) through the end of the Second World War (1939-1945), and two years thereafter until the independence of India were challenging for Indian banking. The years of the First World War were turbulent, and it took its toll with banks simply collapsing despite the Indian economy gaining indirect boost due to warrelated economic activities. At least 94 banks in India failed between 1913 and 1918 as indicated in the following table: Table 1: Banks failed between 1913-1918 YEAR 1913 1914 1915 1916 1917 1918 NUMBER OF AUTHORIZED BANKS FAILED CAPITAL 12 274 42 710 11 56 13 231 9 76 7 209 Source: www.wikipedia.org PAID UP CAPITAL 35 109 5 4 25 1
2.2.2 Post-independence:
The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal, paralyzing banking activities for months. India's independence marked the end of a regime of the Laissez-faire for the Indian banking. The Government of India initiated measures to play an active role in the economic life of the nation, and the Industrial Policy Resolution adopted by the government in 1948 envisaged a mixed economy. This resulted into greater involvement of the state in different segments of the economy including banking and finance. The major steps to regulate banking included: In 1948, the Reserve Bank of India, India's central banking authority, was nationalized, and it became an institution owned by the Government of India.
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In 1949, the Banking Regulation Act was enacted which empowered the Reserve Bank of India (RBI) "to regulate, control, and inspect the banks in India." The Banking Regulation Act also provided that no new bank or branch of an existing bank could be opened without a license from the RBI, and no two banks could have common directors. However, despite these provisions, control and regulations, banks in India except the State Bank of India, continued to be owned and operated by private persons. This changed with the nationalization of major banks in India on 19 July, 1969.
2.2.3 Nationalization:
By the 1960s, the Indian banking industry has become an important tool to facilitate the development of the Indian economy. At the same time, it has emerged as a large employer, and a debate has ensued about the possibility to nationalize the banking industry. Indira Gandhi, the-then Prime Minister of India expressed the intention of the GOI in the annual conference of the All India Congress Meeting in a paper entitled "Stray thoughts on Bank Nationalization." The paper was received with positive enthusiasm. Thereafter, her move was swift and sudden, and the GOI issued an ordinance and nationalized the 14 largest commercial banks with effect from the midnight of July 19, 1969. Jayaprakash Narayan, a national leader of India, described the step as a "masterstroke of political sagacity." Within two weeks of the issue of the ordinance, the Parliament passed the Banking Companies (Acquisition and Transfer of Undertaking) Bill, and it received the presidential approval on 9 August, 1969. A second dose of nationalization of 6 more commercial banks followed in 1980. The stated reason for the nationalization was to give the government more control of credit delivery. With the second dose of nationalization, the GOI controlled around 91% of the banking business of India. Later on, in the year 1993, the government merged New Bank of India with Punjab National Bank. It was the only merger between nationalized banks and resulted in the reduction of the number of nationalized banks from 20 to 19. After this, until the 1990s, the nationalized banks grew at a pace of around 4%, closer to the average growth rate of the Indian economy. The nationalized banks were credited by some; including Home minister P. Chidambaram, to have helped the Indian economy withstand the global financial crisis of 20072009.
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2.2.4 Liberalization:
Until 1991, the financial sector in India was heavily controlled, and commercial banks and term lending institutions, the two dominant financial intermediaries, had mutually exclusive roles and objectives and operated in a largely stable environment, with little or no competition. Term lending institutions were focused on the achievement of the Indian governments various socio-economic objectives, including balanced industrial growth and employment creation, especially in areas requiring development. These lending institutions provided access to long-term funds at subsidized rates through loans and equity from the Government of India and from funds guaranteed by the Government of India originating from commercial banks in India and foreign currency resources originating from multilateral and bilateral agencies. The focus of the commercial banks was primarily to mobilize household savings through demand and time deposits and to use these deposits to meet the short-term financial needs of borrowers in industry, trade and agriculture. In addition, the commercial banks provided a range of banking services to individuals and businesses. However, since 1991, there have been comprehensive changes in the Indian financial system. Various financial sector reforms, implemented since 1991, have transformed the operating environment of the banks and long-term lending institutions. In particular, the deregulation of interest rates, the emergence of a liberalized domestic capital market, and entry of new private sector banks, along with the broadening of term lending institutions product portfolios, have progressively intensified the competition among banks and term lending institutions. RBI has permitted the transformation of term lending institutions into banks subject to compliance with the applicable law.
capital or voting rights by any individual or firm or group, remove the minimum statutory liquidity ratio requirement of 25.0%, giving the Reserve Bank of India discretion to reduce the statutory liquidity ratio to less than 25.0%; and remove the limit of 10.0% on the maximum voting power exercisable by a shareholder in a banking company.
Subsequently, in the budget for fiscal 2001, the government announced that a high level committee would be formulated to design a contribution-based pension scheme for new government recruits. The government also requested the Insurance Regulatory and Development. Authority has to draw up a road-map for implementing the OASIS report. The Insurance Regulatory and Development Authority submitted its report in October 2001. The report suggested that pension fund managers should constitute a separate legal entity to conduct their pension business. In August 2003, the government announced that it would be mandatory for its new employees (excluding defense personnel) to join a new defined contribution pension scheme where both the government and the employee would make monthly contributions of 10% of the employees salary. The government also announced that a Pension Fund Development and Regulatory Authority would be set up to regulate the pension industry. The government constituted the interim Pension Fund Development and Regulatory Authority on October 11, 2003. In December 2003, the government announced that the new pension scheme would be applicable to all new recruits to Indian Government service (excluding defense personnel) from January 1, 2004. Further, on December 30, 2004, the government promulgated an ordinance establishing the statutory regulatory body, Pension Fund Regulatory and Development Authority to undertake promotional, developmental and regulatory functions with respect to the pension sector. In March 2005, the Government tabled the Pension Fund and Development Authority Bill in Parliament. The Union Budget for fiscal 2006 has recognized the opportunities for foreign direct investment in the pension sector and it has also announced that the government would issue guidelines for such investment.
2.2.8 Technology:
Technology is emerging as a key-driver of business in the banking and financial services industry. Banks are developing alternative channels of delivery like ATMs, tele-banking, remote access and Internet banking etc. Indian banks have been making significant investments in technology. Besides computerization of front-office operations, the banks have moved towards back-office centralization. Banks are also implementing Core Banking or Centralized Banking, which provides connectivity between branches and helps offer a large number of value-added products, benefiting a larger number of customers. RBI Annual Report for the fiscal 2005 states that the use of ATMs has been growing rapidly and this has helped in optimizing the investments made by banks in infrastructure. Banks have joined together in small clusters to share their ATM networks during the year. There are five such ATM network clusters functioning in India. The payment and settlement system is also being modernized. RBI is actively pursuing the objective of establishing a Real Time Gross Settlement (RTGS) system, on par with other developed economies.
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An outline of the Indian Banking structure may be presented as follows:1. Reserve bank of India. 2. Indian Scheduled Commercial Banks. a) State Bank of India and its associate banks. b) Twenty nationalized banks. c) Regional rural banks. d) Other scheduled commercial banks. 3. Foreign Banks 4. Non-scheduled banks. 5. Co-operative banks.
banking reform process and as a measure to induce competition in the banking sector, RBI permitted entry by the private sector into the banking system. This resulted in the introduction of nine private sector banks. These banks are collectively known as the new private sector banks. At year-end fiscal 2005, private sector banks accounted for approximately 18.1% of aggregate deposits and 20.0% of gross bank credit outstanding of the scheduled commercial banks. Their network of 6,143 branches accounted for 9.0% of the total branch network of scheduled commercial banks in the country.
banks and district central co-operative banks. The Banking Regulation (Amendment) and Miscellaneous Provisions Act, 2004 (which came into effect as of September 24, 2004), specifies that all co-operative banks are under the supervision and regulation of RBI. Until the early 1990s, the Indian financial system was strictly controlled. Interest rates were administered, formal and informal parameters governed asset allocation, and strict controls limited entry into and expansion within the financial sector. The Government of Indias economic reform program, which began in 1991, encompassed the financial sector. The first phase of the reform process began with the implementation of the recommendations of the Committee on the Financial System, the Narasimham Committee I. The second phase of the reform process began in 1999. The discussion below presents an overview of the role and activities of RBI and of each of the major participants in the Indian financial system, with a focus on the commercial banks. This is followed by a brief summary of the banking reform process along with the recommendations of various committees that have played a key role in the reform process. A brief discussion on the impact of the liberalization process on commercial banks and financial sector is then presented. Also, reforms in the non-banking financial sector are briefly reviewed.
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Banks act on behalf of the Govt. to accept its tax and non-tax receipt. Most of the government disbursements like pension payments and tax refunds also take place through banks.
Functioning of a Bank is among the more complicated of corporate operations. Since Banking involves dealing directly with money, governments in most countries regulate this sector rather stringently. In India, the regulation traditionally has been very strict and in the opinion of certain quarters, responsible for the present condition of banks, where NPAs are of a very high order. The process of financial reforms, which started in 1991, has cleared the cobwebs somewhat but a lot remains to be done. The multiplicity of policy and regulations that a Bank has to work with makes its operations even more complicated, sometimes bordering on illogical. This section, which is also intended for banking professional, attempts to give an overview of the functions in as simple manner as possible. Banking Regulation Act of India, 1949 defines Banking as "accepting, for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdraw able by cheques, draft, and order or otherwise."
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Source: moneyworks4me.com
Source: moneyworks4me.com
Source: www.moneycontrol.com
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2.9.7 Time-line:
1932: Indian Bank opened a branch in Colombo. 1935: IB opened a branch in Jaffna. 1940: IB opened a branch in Rangoon (Yangon). 1941: IB closed the Rangoon branch but opened branches in Singapore (where future branch manager KB Pisharody(1915-1998) started his career in the same year), and in Kuala Lumpur, Ipoh, and Penang. The rapid advance of the Japanese Army forced IB to close all its branches in Malaya and Singapore. 1942: IB closed the Colombo branch. Post-WWII: IB reopened its Malayan and Singapore branches. 1948: IB reopened its branch in Colombo. 1960: IB acquired Mannargudi Bank (est. 1932) and Salem Bank (est. 1925). 1969: The Government of India nationalized 14 top banks, including Indian Bank. 1973: Indian Overseas Bank, Indian Bank and United Commercial Bank established United Asian Bank Berhad in which IOB held 16.67% of the paid up capital, as a result of a new banking law in Malaysia that prohibited foreign government banks from operating in the country. 1978: IB became a technical adviser to P T Bank Rama in Indonesia, the result of the merger of P T Bank Masyarakat and P T Bank Ramayana. 1980: IB, Bank of Baroda, and Union Bank of India established IUB International Finance, a licensed deposit taker in Hong Kong. Each of the three banks took an equal share in the joint venture. 1987: IB acquired Bank of Tanjore (Bank of Thanjavur) in Tamil Nadu in a rescue. 1998: Bank of Baroda bought out its partners in IUB Intl. Fin. in Hong Kong. Apparently this was a response to regulatory changes following Hong Kongs reversion. IUB became Bank of Baroda (Hong Kong), a restricted license bank. 2007: IB celebrated its centenary year.
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e-payment facility for Corporate customers Cash Management Services Depository Services Reuter Screen, Telerate, Reuter Monitors, Dealing System provided at Overseas Branch, Chennai Indian Bank Credit Card facility Launched I B Gold Coin system launched
2.9.9 Awards:
Indian Bank received the Skoch Challenger Award for its financial inclusion initiatives in Pondicherry and Dharavi. The bank bagged first prize for excellent performance under SHG-Bank Linkage Programme conducted by NABARD. Three branches of Indian Bank located in Tamil Nadu were awarded best performing commercial bank. Government of TamilNadu has conferred the Best Performing Bank Award to Indian Bank for the outstanding achievement under Self Help Group (SHG) INDIAN BANK was declared as a Winner in BEST BANKs category and Best Education Loan category in the Banking Survey conducted by OUTLOOK MONEY Award 2010 on the basis of its performance during the year 2009-10 Indian Bank Conferred with SKOCH Financial Inclusion Award 2011
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IndianBank, 66 Rajaji Salai, Chennai-600001. Shri T.M. Bhasin Shri B Raj Kumar, Shri Rajeev Rishi Shri Shaktikanta Das Dr. N Krishna Mohan Shri M. Jayanath Prof. Narendra Kumar Agrawal Shri Chintaman Mahadeo Dixit Shri. Sanjay Maken, Shri Amarjit Chopra Shri. M. Butchi Rami Reddy
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CHAPTER 3
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CHAPTER 3
Deposit Section Clearance Section Loan Section Demand Draft Section Systems Section
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3.2.3Fixed Deposit:
The fixed deposit can be opened by anyone from Individuals (a) single (b) Two or more individuals severally or jointly (c) Minors (d) Illiterates (e) Blind people to Executors and Administrators. Liquidators and Receivers, Sole Proprietorship concerns, Joint Hindu families, Partnership firms, Limited Companies, Trusts, Non-Corporate bodies like Clubs, Committees, Associations, Schools, Colleges, Government / Semi-Government bodies can also open a fixed deposit with the bank for a minimum period of 15 days up to a maximum period of 120 months.
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The settlement of funds in clearing occurs at several levels. The aggregate amount or value of cheques presented by a bank on other banks represents the claim by that bank on other banks. Similar claims are made by all the banks on every other bank in the clearing. A net settlement is arrived at the clearinghouse and the debit or credit position of the bank is determined. These are booked in their current accounts maintained by the settling bank. This represents the inter-bank settlement. The settlement of funds between the service branch and the
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branch concerned represents the transfer of funds to the branch level. The payment process is completed only when the funds are debited from the drawer's account and credited to the payee's account. Inter-branch clearing need not go to the clearinghouse. Cheques presented by customers drawn on different branches of the same bank need not be sent to the clearinghouse, as the transfer of funds is internal to the bank. The service branch usually acts as a settlement branch for the branches and the instruments are sent to the drawee branches while the interbranch accounts are credited or debited internally.
The essentials of a DD should include Name of the recipient Name of the sender Amount to be transferred Place where the transferred money is to be paid, Mode in which money is to be paid i.e. in cash or through a Bank Account.
The demand draft is generally crossed for security purpose. This process is checked by an officer and only then is the Demand Draft signed upon.
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Among these loans, the most popular loans are, Home loans Educational loans Jewel loans
13. Proof of title in the Revenue Records.(Legal Opinion from Advocate & Valuation of property from Engineer will be arranged by Bank at applicants cost)
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CHAPTER 4
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Salient Features: ECS/RTGS/NEFT facilities are available Two cheque books of 2x20 leaves free in a calendar year for cheque operated SB accounts Collection of local cheques free Collection of Outstation cheques with the presecibed charges No charges for Intra city transactions ICOOC ( Local / Outstation) facility available ATM cards/Debit cards are provided free of cost 24 hrs ATM facility with arrangements with various banks for sharing of their ATMs Multicity cheque facility Intra city, intercity transactions,Internet/ mobile /phone banking facilities are available at all branches 50 withdrawals permitted free per half year No TDS on interest earned on SB deposits
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Min Amount: Minimum amount- Rs.250/- for non cheque operation Minimum balance of Rs.500/- for cheque operation Lesser minimum balance for pensioners and bonafide students
Other Requirements/Details: Suitable for all type of customers ECS/RTGS/NEFT facilities are available Nomination facility for individuals and sole proprietor concerns, Multicity cheque facility, Intra city, intercity transactions are permitted in CBS branches Free ATM card cum Debit card No charges for Intra city transactions
Salient Features: A regular monthly savings grow into a large sum to meet the financial needs at the end of the agreed period
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Min Period: Minimum 6 months In multiples of 3 months with a maximum of normally 10 years
Other Requirements/Details: Loan, Foreclosure, Nomination facilities are available. TDS not applicable
Min Amt: Minimum amount Rs.100/- and in multiples of Rs.100/No maximum amount
Other Requirements/Details: Automatic renewal facility for equal period. Loan. Foreclosure, Nomination facilities are available
Amount of Loan: For Studies in India: Rs.10.00lakhs and for Studies Abroad: Rs.20.00 lakhs. Higher Quantum of loan subject to a maximum of Rs.15 lakhs for studies in India and RS.25 lakhs for studies abroad also can be considered in deserving and meritorious cases
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Margin Upto Rs.4.00 lakhs - Nil. Above Rs.4.00 lakhs: For Studies in India - 5%. For Studies Abroad - 15%.
Repayment: Maximum period The loan is to be repaid in 5-7 years after commencement of repayment.
Security: Up to Rs.4.00 lakhs - Co obligation of parents. No Security. Above Rs.4.00 lakhs and up to Rs.7.50 lakhs - Co obligation of parents together with collateral in the form of a satisfactory third party guaranty. Above Rs.7.50 lakhs - Co obligation of parents together with tangible collateral security of suitable value along with the assignment of future income of the student for payment of installments.
Salient Features: To meet the cost of education covering fee payable to college/school/hostel, exam fees, purchase of books/equipments, travel expenses/passage money for studies abroad, purchase of computers essential for completion of the course etc.
Other Requirements/Details: Holiday Period: The course period PLUS 1-year or 6 months after getting a job, whichever is earlier. Family Income: There is no restriction. The main emphasis is that no deserving student is denied an opportunity to pursue higher education for want for financial support. Place of availment: The loan is to be availed from the branch nearest to the place of domicile of the student. Course of study in India : Diploma/Graduation/Post graduation courses in various disciplines Computer Certificate courses in reputed institutes accredited to the Department of Electronics. Course of study abroad : Job-oriented professional/technical courses offered by reputed universities, MCA,MBA, MS etc. Courses conducted by CIMA - London, CPA in USA etc.
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Amount of Loan: 36 times of Gross Monthly Income or 60 times of Net Monthly Income whichever is higher. Spouse Income can be included for calculating eligible amount if he / she have steady income. 60% of future rental income, if any from the house property to be purchased / constructed shall also be included (quantum of rent receivable to be certified by our panel engineer). (Take home Income should be more than 40% of gross monthly income after deduction of EMI for the proposed loan, apart from other deductions.)
Margin: For Loans upto Rs. 20 lakhs : 10% For Loans above Rs. 20 lakhs : 20%
Processing fee: For limits upto 10.00 lakhs: 0.25% of loan amount ; For limits above 10.00 lakhs: 0.20% of loan amount with a minimum of Rs. 2,500/- and maximum of Rs. 20,000/- (Non refundable)( to be remitted at the time of submission of application)
Administrative fee: For limits upto 10.00 lakhs: 0.32% of loan amount ; For limits above 10.00 lakhs: 0.25% of loan amount with a minimum of Rs. 3,200/- and maximum of Rs. 25,000/- (at the time of acceptance of sanction)
Interest Rates: Fixed rates are subject to reset once in 5 years After the account has run for 3 years, from the date of sanction, one time option can be exercised for converting fixed rate into variable rate. For the said Switch over, a one time fee of 1% on the outstanding balance in the loan account will be charged as service charges. If conversion of fixed rate to variable rate is sought after 5 years, from the date of sanction, the onetime fee of 1% shall not be applicable.
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Repayment: Loans for purchase / construction of House / Flat: 20 years (including holiday period) Maximum Holiday Period of 18 months allowed for Home Loans for the purpose of construction of House / Flat
Security: Equitable Mortgage of Property purchased / constructed out of loan proceeds Equitable Mortgage to be registered (at Applicants cost) if there is a provision for the same in the State where property is located
Documents to be submitted for processing the application: 1. Completed Application Form with 3 passport size photograph. 2. Assets and liabilities statement in the Banks format from applicant(s), Co-applicant(s) and guarantor(s) 3. Proof of Identity such as PAN Card / Voters ID/Passport/Driving License. 4. Proof of residence such as Recent Telephone Bill / Electricity Bill / Property Tax Receipt / Passport / Voters ID 5. Proof of business address in respect of businessmen / industrialists. 6. Proof of Employment. 7. Salary Certificate generally for the last 6 months. 8. Statement of Bank account of the applicant(s) for a reasonable period, say 6 months for verifying salary credit/other income/nature of transaction etc 9. Proof of other income like rent, interest on investment, if any. 10. Balance Sheet for the past three financial years in the case of Professionals, Businessmen & Self employed. 11. A brief note on the nature of business/service, year of establishment, constitution, securities charged in respect of other loans availed from our Bank/other Branches/Banks/Finance companies/Other sources. 12. Form16/Income Tax / Wealth Tax (if applicable) Returns for the past 3 years 13. Agreement of Sale / Sale Deed. 14. Approved Building Plan. 15. Title Deed Documents for 13 years/30 years as the case may be. 16. Proof of title in the Revenue Records. 17. Property Tax receipts wherever applicable (Up-to-date EC, Legal Opinion from Advocate & Valuation of property from Engineer will be arranged by Bank at applicants cost)
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Salient Features: Home Loans can be considered a) b) c) d) e) f) to purchase / construct a new house / flat to purchase house site and construction of house thereon to purchase an existing house / flat to extend an existing house/ additional construction to repair / renovate an existing house / flat to take over Home Loans from other Banks / Housing Finance Institutions approved by National Housing Bank for Housing Finance/ Co-operative Societies. g) For reimbursement of cost incurred for purchase/construction of house/flat Insurance: Property (offered as security) to be insured at borrowers cost with Bank clause against fire, flood, earthquake, riot and other risks, which are normally covered by insurance companies.
Amount of Loan: 20 times of Gross Monthly Income Spouse Income can be included for calculating eligible amount if he / she has steady income. Take home Income should be more than 40% of gross income after deduction of EMI for the proposed loan, apart from other deductions. For Businessmen, Professionals & self-employed, based on their average income earned in the last 3 years and capacity / ability to repay the loan. Maximum Loan amount for purchase of Two Wheeler : Rs.75,000. Four Wheeler: Rs. 15,00,000 Margin : 15% for New Vehicle. 40% for used vehicle (Four wheeler).
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Repayment: Four Wheeler: Maximum 84 EMIs (No holiday period) for salaried class individuals; Maximum 60 EMIs (No holiday period) for others. For 2 wheeler: Maximum 60 EMIs (No holiday period)
Security: Hypothecation of Vehicle to be purchased out of Loan. If the loan amount exceeds Rs. 10.00 lakhs, additional security equivalent to amount exceeding Rs. 10.00 lakhs to be provided in the form of Fixed Deposit Receipts / NSCs / LIC Policy (with surrender value equivalent to the security to be provided) / Mortgage of immovable property.
Documents to be submitted for processing the application: 1. Completed Application Form with passport size photograph. 2. Proof of Identity such as PAN Card / Voters ID/Passport/Driving License. 3. Proof of residence such as Recent Telephone Bill / Electricity Bill / Property Tax Receipt / Passport / Voters ID. 4. Proof of business address in respect of businessmen / industrialists. 5. Proof of Employment. 6. Salary Certificate. 7. Proof of other income like rent, interest on investment, if any. 8. Balance Sheet for the past three financial years in the case of Professionals, Businessmen & Self employed. 9. Income Tax / Wealth Tax (if applicable) Returns for the past 3 years. 10. Copy of Driving License. 11. Quotation for Vehicle to be purchased from the authorized dealer Salient Features: For purchase of New Two Wheeler or New / Used Four Wheeler(Used four wheeler should not be more than 3 years and should be certified by reputed automobile engineer)
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4.2 Services:
The various services provided by Indian bank are Ind Net banking Ind Mobile banking Ind Phone banking NEFT Credit Cards ATM/Debit Cards Money Gram
Salient Features: Customers can use the internet to do their banking at the convenience of their home
Other Requirements/Details: Visit the Website : https://www.indianbank.net.in. Customer can view their accounts. Customer can get the statement of account. Customer can transfer funds to his own accounts. Customer can transfer funds to other Indian Bank accounts. Customer can remit funds to anyone having account with any bank through RTGS/NEFT charges applicable as per RTGS/NEFT). Customer can know the cheque details. Indian Bank is not liable for non-availability of services due to reasons beyond the controls of the bank. Charges for Net Banking facility: Free. DP account maintained with Indian Bank can be viewed.
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At present the following payments can be made through net banking: AP online TNEB Payment IRCTC (Rail ticket) Payment IBMBS Payment Income tax/TDS Payment Service Tax Payment Central Excise Payment MCA 21 Payment
Salient Features: Customers can use their mobile phones to do their banking
Other Requirements/Details: SMS to 9444394443 from your mobile. Customer can do the balance enquiry. Customer can see their last 3 transactions. Customer can enquire about the issued/deposited cheque status.. Customer will get mobile alert if Account is Debited/ Credited for Minimum of Rs.5000. Customer will get mobile alert if there is a cheque bounce in their account. Indian Bank is not liable for non-availability of services due to reasons beyond the controls of the bank. Charges : Free.
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Salient Features: Customers can call for enquiries anytime, anywhere through telephone.
Other Requirements/Details: Call telephone toll free 1800-425-3425. Customer can do the balance enquiry. Customer can have their account details. Customer can have the issued cheque status. Customer can have the deposited cheque status. Indian Bank is not liable for non-availability of services due to reasons beyond the controls of the bank. Charges : Free
4.2.4 N E F T:
Eligibility: Any customer of a CBS Branch for any amount. For non-customers NEFT is available against cash remittance up to Rs.50000/-
Salient Features: Transfer of funds to any account in any bank branch enabled for NEFT within the same day.
Other Requirements/Details: Any amount can be remitted. Customer is required to provide beneficiary's account number, name, address, bank and branch name. The beneficiary's bank account is credited on the same day. (If the remittance is in the afternoon, the amount may be credited on the next day). Week days 09.00 A M to 07.00 P M (Settlement in hourly batches) Saturdays 09.00 A.M to 01.00 P.M (Settlement in hourly batches)
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Salient Features: VISA cards available in three variants : Gold, Classic and Bharat cards
Other Requirements/Details: Gold and Classic cards are Global cards and Bharat cards are domestic cards. Revolving credit Gold card: Rs.75001 to Rs.3 lakhs. Classic cards : Rs.25000 to Rs.75000 Bharat cards: Rs.10000 to Rs.20000. Up to 4 add on cards can be issued for Gold/Classic cards. Insurance cover on death due to accident is available. Baggage cover is available. Credit Shield on death is available. Purchase protection cover is available. No Joining / annual membership fee. Card holder can avail reimbursement of loyalty points (Rs.1/= for every Rs.200/= spent.) Interest free credit period for purchases: Minimum - 15 days and Maximum - upto 45 days.
Salient Features: Our 24 hour Hi-powered, value-added ATM cum Debit card, just the size of a visiting card, is the passport to the facilities available with ATM and for shopping at Merchant establishment. It brilliantly complements customer's ambitions, offering more value, more excitement, more service, more extras.
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Other Requirements/Details: It can be used in more than 30000 ATMs of various banks. The Maestro Debit cards can be used for purchase of merchandize/services from commercial establishments/service organizations that display the "MasterCard", "Maestro" and "Cirrus" logo. In India, over 150,000 POS terminals and more than 15000 ATMs are available that accept Maestro Debit Cards. Round-the-clock cash withdrawals. 24 hrs cash and cheque deposits. Request can be given for a cheque book through ATM. Customer can use the following Bank's ATMs : Punjab National Bank, Oriental Bank of Commerce, Karur Vysya Bank, IndusInd Bank, UCO Bank, Bank of India, United Bank of India, Union Bank of India, Syndicate Bank, Dena Bank, Bank of Rajasthan, Bank of Maharastra, Karnataka Bank, Indian Overseas Bank, Allahabad Bank, Bank of Baroda, City Union Bank, Corporation Bank, Development Credit Bank, ICICI Bank, IDBI Bank, Tamilnadu Mercantile Bank Ltd, The Cosmos Cooperative Bank Ltd, The Dhanalakshmi Bank Ltd., The Jammu and Kashmir Bank Ltd, The South Indian Bank Ltd., YES Bank Ltd, State Bank of India and its Associate Banks and Andhra Bank.
Period
7days to 14 days 15 days to 29 days 30 days to 45 days 46 days to 90 days 91 days to 120 days 121 days to 180 days 181 days to less than 9 months 9 months to less than 1 year 1 year to less than 3 years 3 years and above
Source: www.indianbank.in
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Home Loan - Fixed Rate of Interest: Table 7: Home loan-Fixed Rate Interest
Source: Indianbank.in
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Product
Car Loan (New Cars) Car Loan (Used Cars) 2 Wheeler Loan
Rate of Interest
BR + 0.75%(variable) = 11.25% BR + 3.50%(variable)= 14.00 % BR + 3.00%(variable) = 13.50 %
Sanctioned limits
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CHAPTER 5
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CHAPTER 5
Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. First, the decision makers have to determine whether the objective is attainable, given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated. Users of SWOT analysis need to ask and answer questions that generate meaningful information for each category (strengths, opportunities, weaknesses, and threats) in order to maximize the benefits of this evaluation and find their competitive advantage.
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Weakness:
Low number of ATMs and branches as compared to its competitors. Low advertising and publicity. Employee management was not good. Morale of the workforce was low. Due to indiscriminate lending from the period 1996 to 1999 bank had frozen credit.
Opportunities:
Bank has the opportunities in the retail banking as well as urban market banking. Favorable government rural schemes. More expansion in untapped rural markets and to tapped rural market they are planning to have separate rural branches. During the restructuring of the bank they hired young, smart and energetic MBA student in order to improve the marketing area and to bring lots of new business.
Threat:
Economic crisis and fluctuating market scenarios. Highly competitive environment. Stringent Banking Norms by Governments and RBI. Threat from the competitors like SBI, BANK OF BROADA, ICICI BANK, ANDHRA BANK.
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CHAPTER 6
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Suggestions:
The organization should bring customer help desk to guide the customers and help the public. Every branch should consider having a complaint section. Organization should consider improving its online and toll-free complaining service. Organization should consider implementing a good training institute for new recruits. The manager should be allotted time to hear customer problems. Unwanted things should be omitted so that the processing time can be reduced.
Conclusion:
Indian Banks performance and strategic direction have broadly been positive and balanced since its listing, leading to a gradual improvement in the quality of earnings vis--vis its peers. Additionally, the banks CMD has a five-year tenure, which provides a reasonable strategic stability to the bank. Moreover, the banks predominantly rural and semi-urban presence has enabled it to maintain reasonable cost of funds, resulting in more flexible than other mid-size PSU banks.
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