CHAPTER-1 PROFILE OF THE COMPANY

Under this chapter all the details of the company is given. That is the profile of the company its products range have been given ,awards received during the last financial year have been mentioned therefore it contains brief history of the company. 1.1 Profile of the Company (a) Name of the company- A is !an" (b) Address of the company- ! - #$%%, &aschim 'ihar New (elhi- %%))*+ (c) ,ontact number- ()%%) #-#..-)) $#-#./.)%$ )+$ )(d) 0ebsite of the company- www.a isban".com (e) 1t is a National ,ompany. (f) ,ompany has its 2ead 3ffice in 4U4!A1. (g) ,ompany Type5 &ublic ,ompany (h) ,ompany 6i7e5 3ver +/,#++ wor"force (i)2ead8uarters(4umbai)5A is2ouse,,#0adia1nternational,entre,&andurang ,!udh"ar4arg,0orli,4umbai9/)))))# (:) 1ndustry Type5 !an"ing (") ;ounded5 %<</ 1.11 Nat re of The Or!ani"ation A is !an" was the first of the new private ban"s to have begun operations in %<</, after the =overnment of 1ndia allowed new private ban"s to be established. The !an" was promoted :ointly by the Administrator of the specified underta"ing of the Unit Trust of 1ndia (UT1 - 1), >ife 1nsurance ,orporation of 1ndia (>1,) and =eneral 1nsurance ,orporation of 1ndia (=1,) and other four &6U insurance companies, i.e. National 1nsurance ,ompany >td., The New 1ndia Assurance ,ompany >td., The 3riental 1nsurance ,ompany >td. and United 1ndia 1nsurance ,ompany >td. The !an" as on +)th ?une, #)%# is capitali7ed to the e tent of @s. /%/.#< crores with the public holding (other than promoters and =(@s) at -/.#/A.
1

The !an"Bs @egistered 3ffice is at Ahmadabad and its ,entral 3ffice is located at 4umbai. The !an" has a very wide networ" of more than %*)) branches (including %*< 6ervice !ranches$,&,s as on +)th ?une, #)%#). The !an" has a networ" of over %)))) AT4s (as on +)th ?une, #)%#) providing #/ hrs a day ban"ing convenience to its customers. This is one of the largest AT4 networ"s in the country. The !an" has strengths in both retail and corporate ban"ing and is committed to adopting the best industry practices internationally in order to achieve e cellence. A is !an" >td. has been promoted by the largest and the best ;inancial 1nstitution of the country, UT1. The !an" was set up with a capital of @s. %%crore, with UT1 contributing @s. %)) crore, >1, - @s. C.- crore and =1, and its four subsidiaries contributing @s. %.- crore each. Drstwhile Unit Trust of 1ndia was set up as a body corporate under the UT1 Act, %<*+, with a view to encourage savings and investment. 1n (ecember #))#, the UT1 Act, %<*+ was repealed with the passage of Unit Trust of 1ndia (Transfer of Underta"ing and @epeal) Act, #))# by the &arliament, paving the way for the bifurcation of UT1 into # entities, UT1-1 and UT1-11 with effect from %st ;ebruary #))+. 1n accordance with the Act, the Underta"ing specified as UT1 1 has been transferred and vested in the Administrator of the 6pecified Underta"ing of the Unit Trust of 1ndia (6UUT1), who manages assured return schemes along with *.C-A U6-*/ !onds, *.*)A A@6 !onds with a Unit ,apital of over @s. %/%*C.-< crores. The =overnment of 1ndia has appointed 6hri E. N. &rithvira: as the Administrator of the 6pecified underta"ing of UT1, to loo" after and administer the schemes under UT1 - 1, where =overnment has continuing obligations and commitments to the investors, which it will uphold. 1.1# A$ar%& an% A''ola%e& (on ) rin! the La&t Finan'ial Year a* -* '* %* +an, of the Year (1ndia) - The !an"er Awards +e&t )ome&ti' +an, (1ndia) - Asset Triple A ,ountry Awards Mo&t Con&i&tent Lar!e +an, - !usiness Today F E&4= 6urvey Fa&te&t .ro$in! +an, - !loomberg UT' ;inancial >eadership

Awards e* Mo&t Pro% 'ti/e Pri/ate 0e'tor +an, - ;1!A, Awards

2

f* !* h* i* 3* ,*

1r% 0tron!e&t +an, (Apac @egion) - Asian !an"er +ran% E2'ellen'e A$ar% (!;61) - 6tar News Mo&t Preferre% +an, amongst retail consumers - ,>6A survey +e&t )ome&ti' +on% Ho &e (1ndia) - Asset Triple A ,ountry Awards +e&t +on% Ho &e (1ndia) - ;inance Asia +e&t +an, (&rivate 6ector) - N(T' &rofit !usiness >eadership

Awards l* +e&t +an, - 3utloo" 4oney Awards m* +e&t +on% Ho &e (1ndia) - ;inance Asia n* +e&t +an, (&rivate 6ector) - N(T' &rofit !usiness >eadership Awards o* +e&t +an, - 3utloo" 4oney Awards 1.11 Cre%it Ratin!& 4a* )ome&ti' Ratin!& Fit'h In%ia A2i& +an, Ratin!& 6ubordinated >ower Tier 11 (ebt AAA(1nd) &erpetual Tier 1 AAG(1nd) Unsecured 6ubordinated Upper Tier 11 AAG(1nd) 6upport @ating + 1ndividual @ating , 3utloo" 6table ICRA Lt%. A2i& +an, Ratin!& ,ertificate of (eposits A%G 6ubordinated !ond >AAA Upper Tier 11 !onds >AAG 2ybrid Tier 1 >AAG 3utloo" 6table CRI0IL A2i& +an, Ratin!& ,ertificate of (eposits &%G CARE Ratin!& A2i& +an, Ratin!& 6ubordinated Tier 11 !onds AAA International Ratin!& A2i& +an, Ratin!& (G !aa+ !aa# &-+ &-# 6table !aa # A2i& +an, Ratin!& !!!!!!A-+

4-*

Moo%y5& Ratin! !an" ;inancial 6trength >T !an" (eposits (;oreign) >T !an" (eposits ((omestic) 6T !an" (eposits (;oreign) 6T !an" (eposits ((omestic) 3utloo" 6enior unsecured (;oreign) 0tan%ar% 6 Poor5& 1ssuer ,redit @ating ,ounterparty ,redit @ating >ong Term ,ounterparty ,redit @ating 6hort Term
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6enior Unsecured Notes !!!>ower Tier 11 6ubordinated Notes !!G Upper Tier 11 6ubordinated Notes !! 2ybrid Tier 1 ?unior 6ubordinated Notes !! 3utloo" 6table Fit'h Ratin!& A2i& +an, Ratin!& >ong Term ;oreign ,urrency 1ssuer (efault @ating !!!6hort Term ;oreign ,urrency 1ssuer (efault @ating ;+ ;oreign ,urrency 6enior (ebt !!!;oreign ,urrency 6ubordinated >ower Tier 11 !!G ;oreign ,urrency Upper Tier 11 !!;oreign ,urrency &erpetual Tier 1 !ond !!6upport @ating ;loor !!G 6upport @ating + 'iability @ating !!!3utloo" Negative Capital Intelli!en'e A2i& +an, Ratin!& 6overeign >ong Term !!!6overeign 6hort Term A+ 6overeign 3utloo" 6table ;oreign ,urrency >ong Term !!!;oreign ,urrency 6hort Term A+ ;oreign ,urrency 3utloo" 6table ;inancial 6trength !!!G ;inancial 6trength 3utloo" &ositive 6upport + 4TA+LE 1.1 Cre%it Ratin! Of A2i& +an,) 1.17 Company8& 9i&ion an% Mi&&ion (A) 4ission 3f The ,ompany 1. 11. 111. 1'. ,ustomer service and product innovation tuned to diverse need of individual and corporate clients ,ontinuous technology up gradation while maintaining human values &rogressive globali7ation and achieving international standards Dfficiency and effectiveness built on ethical practices.

(!) 'ision 3f The ,ompany To be the preferred financial solutions provider e celling in customer delivery through insight, empowered employees and smart use of technology. (,) ,ore 'alues
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1. 11. 111. 1'. '.

,ustomer ,entricity Dthics Transparency Teamwor" 3wnership

1.1: Pro% 't Ran!e Of The Company a) 6aving Account i.)Dasy Access 6aving Accounts The account is an endeavour by the !an" to understand the consumersB needs and redefine ban"ing to suit their re8uirements for a truly comfortable ban"ing e perience. Dasy Access 6avings Account gives an instant access to money anywhere, anytime. &ossessing a range of unmatched features, it has been devised to better suit the convenience of our eclectic client base. 3ne can avail of all these services with a minimum 8uarterly average balance of @s.%),))) in metro or urban centers, @s.-,))) in semi urban centers and @s.#,-)) in rural centers. The following benefits can be availed with the same ii)At &ar ,he8ue !oo"-As Dasy Access 6avings Account 2older will receive the HAt-parH ,he8ue boo" and can encash (rafts are now history. iii)AT4 Networ"-Dasy access 6avings Account also entitles one to an 1nternational (ebit ,ard with which one can access oneIs account anytime at all the AT4s - both, 'isa enabled and its partner ban"s - across the country. 0ithdrawals and deposits (money as well as che8ues) are possible with (ebit ,ard. And unli"e most other AT4s, an A is !an" AT4 allows to withdraw upto @s /),))) per day.
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these ,he8ue as local che8ues

at any of the #-C centers where the ban" has a presence, at no e tra cost.

iv)Anywhere !an"ing-3ne can transact through any of the branch offices all of which are interconnected for ban"ing convenience. Transactions li"e cash deposits, cash withdrawal, transfers and clearing deposits can all be carried out wherever one happens to be v)Tele-ban"ing-Tele-ban"ing service provides an instant access to oneIs savings account. 1t offers a wide range of services over the phone such as Account 1nformation, !alance 1n8uiry, Transaction (etails, 6tatus of ,he8ue (available only during branch business hours) and even 6tatement of Account on ;a . vi)1nternet !an"ing-The idea of Hyour !an" on your des"topH is now a reality with 1nternet !an"ing. Jou can loo"-up the status of your savings account, re8uest your new che8ue boo", underta"e a range of financial transactions, avail financial advisory services, get information on mutual funds and shop online by :ust clic"ing the mouse. vii);ree 646 !an"ing-646 !an"ing enables one to ban" through mobile phone irrespective of where the person is and one can avail facilities li"e balance in8uiry, debit or credit alerts, last three transaction details and ,he8ue status. viii)Account 6tatement-Kuarterly statements are delivered free of cost every 8uarter, interest would be credited at the rate of /A per annum in your account (b) &rime 6avings Account A is !an" has always strived to pace their products with the growing needs of their customers. The &rime 6avings account has therefore been created with their specific financial re8uirements in mind. ;ollowing !enefits can be availed through the same5 1. 11. 0ider accessibility =reater convenience
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111. 1'. '.

4ore comfort Dnhanced privileges Added speed

(b);uture 6tars 6avings Accounts The ;uture 6tars 6avings Account is an e clusive account being offered for children inculcate the discipline of savings in children. This account will act li"e a piggy ban" for the child where their money will be "ept safe and earn interest as well. The child of age %# years and above can also ma"e smart purchases by way of an e clusive debit card. They will also learn to ban" at an early age in a better and convenient way. This scheme of savings account has certain uni8ue features specifically needed and used by this target group in order to have better and long term relation with the ban" . 1.1; Prime Pl & 0a/in!& A''o nt At A is !an", they design their financial products and services "eeping in mind customersI tastes and preferences. The &rime &lus account is specially designed and is loaded with host of powerful features. The following benefits follow5 a) b) c) d) e) 0ider accessibility =reater convenience 4ore comfort Dnhanced privileges Added speed

1 0omenIs 6aving Account A is !an"Bs 0omenBs 6avings Account is an endeavor by the !an" to understand the consumersB needs and redfine ban"ing to suit your re8uirements for a truly comfortable ban"ing e perience. 0omenBs 6avings Account gives an instant access to money anywhere, anytime. 0ith the 0omenBs 6avings Account, one can manage oneIs money and life and
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furthermore A is !an"Bs 0omenBs 6avings Account ensures that one has enough time for all the important things in life. a) ;ree At-par ,he8ue boo" b) AT4 Networ" c) Anywhere !an"ing d) Tele-ban"ing e) 1nternet !an"ing. f) ;ree 646 !an"ing g) Account 6tatement h) Kuarterly 1nterest i) ;ree monthly e-statement 11 6DN13@ ,1T1LDN 6A'1N=6 A,,3UNT A is !an"Bs 6enior citi7en 6avings Account is an endeavour by the !an" to understand the consumersB needs and redefine ban"ing to suit their re8uirements for a truly comfortable ban"ing e perience. 6enior citi7en 6avings Account gives an instant access to money anywhere, anytime. A is !an"Bs 6enior ,iti7en 6avings Account has been designed "eeping in mind the fact that a 6enior citi7enBs ban"ing re8uirements are wholly different and re8uire special consideration. ;ollowing are the benefits5 a) ;ree At-par ,he8ue boo" b) AT4 Networ" c) Anywhere !an"ing d) Tele-ban"ing e) 1nternet !an"ing f) ;ree 646 !an"ing g) Account 6tatement h) Kuarterly 1nterest i) ;ree monthly e-statement :) ;ree 6enior ,iti7en 1( card ") A &rivilege assures the care you deserve< A is !an" has introduced 6enior ,iti7en 1( card for their 6enior citi7en patrons. 111 &DN613N 6A'1N=6 !ANE A,,3UNT &ension 6avings !an" Account from A is !an" is specifically, designed for &ensionerBs (D isting F &rospective) of ,entral =ovt. ,ivil 4inistries$
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(epartments F (efence 4inistry "eeping in mind the fact that a &ensionerBs ban"ing re8uirements are wholly different and re8uire special consideration.
;ollowing are the benefits that can be availed5

a) Timely communication to the customer on receipt of the &&3 b) No delays in commencement of pension disbursals - The !an" is handling the disbursement of &ension under a ,entrali7ed &ension (isbursement 4odule wherein the &ensioner records are credited centrally through its ,entrali7ed &ension &ayment 2ub (,,&2) at 4umbai. c) Timely issue of ;orm- %*A for ta deducted at source in the immediately previous financial year d) Timely revisions based on changes in rates of &ension or (earness Allowance, done centrally from the ,,&2 e) Lero !alance 6avings Account f) Anywhere !an"ing - Available at all centers etc.
Note<

g) The !an" is authori7ed by @!1 and ,entral &ension Accounting 3ffice (,&A3) for disbursement of ,entral ,ivil &ension through its #%. authori7ed branches across the country. h) The !an" is authori7ed by D&;3 for disbursement of pension under the Dmployees &ension 6cheme, %<<- in all the branches. '1 T@U6T$N=3 6A'1N=6 A,,3UNT A is !an"Bs Trust Account is an effort to offer thoughtful ban"ing for people who spend their lives thin"ing of others. 1t is a complete ban"ing solution for Trusts, Associations, 6ocieties, =overnment !odies, 6ection #- companies and N=3s, so that the organi7ations can devote all of their time to their noble motivations. Also, A is !an" can offer the facility to donate funds to your Trust through our 1nternet !an"ing facility i,onnect to its customers. An A is !an" customer can donate any amount to your Trust through the 1nternet. 1n such cases, the savings account of the customer gets debited and the savings account of your Trust gets credited with the amount of donation at the same time. At the end of every month, the !an" will provide an 416
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giving details of the amount of donations and the name of donor. This will enable the Trust to issue receipts to the donors.

1.1=

C rrent A''o nt& 1t is a 6avings account that doesnBt re8uire a minimum balance. 3ne can e perience a host of unparalleled features and heightened convenience with A7aadi Account. &roduct ;eatures<

a) A7addi- No ;rills Account

i. ii.

Lero !alance 6avings Account< No need to maintain a fi ed, mandatory amount in your account. 1nstant 0elcome Eit< 2anded over at the time of account opening, the "it will consist of account number, debit card, debit card &1N, internet ban"ing &1N and phone ban"ing &1N numbers.

iii.

1nternational (ebit ,ard< 0hich gives access to AT4s across the country, enabling to ma"e deposits or withdraw cash at any time of the day or night.

iv.

&hone !an"ing and 1nternet !an"ing< 3ne can conveniently chec" balance, transaction details, etc anytime from anywhere over telephone or using the 1nternet, for no e tra charge.

v. b)

;ree monthly e-statement. @esident ;oreign ,urrency Account 2olding foreign currency is no longer restricted to the N@1s. ;or the first time @eserve !an" of 1ndia has allowed @esident 1ndians to maintain foreign currency accounts without any ceiling to it. This step is considered as a continuation of @!1s gradual endeavor towards achieving B;ull ,apital ,onvertibilityB.

i* The Pro% 't Offerin!& A @esident ;oreign ,urrency ((omestic) Account, @;,((), with A is !an" entitles to maintain non-interest bearing current account in four ma:or
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currencies (U6(, DU@3, =!& and ?apanese Jen). There will be no ceiling on the balances held in the account. ,he8ueboo"s denominated in U6( or =!& or DU@3 or Jen will be issued on these accounts with #- leaves. The che8ues thereby branded as @;, ((omestic) Account will not be presented in clearing and will be payable only at the issuing branch. The min balance for such a current account will be U6( %)) or =!& *) or DU@3 %)) or Jen #),))). There will be a penal charge of U6( - or =!& + or DU@3 - or ?apanese Jen %,))) per 8uarter in case of failure to maintain the min balance re8uirements. The @;,(() account holders will not be allowed any AT4 facility as of now. 2owever they can use Bi,onnectB for en8uiry purposes only.
ii* +enefit&5

A @;,(() account with A is !an" entitles a hassle free and safe avenue to par" foreign currency. 1t will also save one of commission chargesM otherwise one would have to pay whenever one re8uires foreign currency. The account facilitates payments for foreign travel e penses, medical treatment abroad, gifts upto N -,))) or e8uivalent, education and purchase of boo"s directly through the 1nternet. 4oreover the ceiling less nature of this account entitles one to hold any amount of funds as against U6( #,))), which was the ma imum limit to foreign e change holdings by @esident 1ndians. 1n recent times, investors have witnessed a lot of turmoil in the ;ore mar"ets. The fluctuations in the @upee-(ollar rates have always been a cause of worry for fre8uent travellers and business class. A @;,(() account with A is !an" "eeps foreign currency insulated from adversities of @upee depreciation. 1.1> 0alary A''o nt& a) Dasy Access 6alary Account !an"ing is now easy with the host of benefits provided by Dasy Access 6alary Account li"e one can !an" at any branch and AT4 spread across the country. Dlectronic ;und Transfer facility is also available across all ban"s in 1ndia. &rimary accountholder also gets a ;ree 'isa ,lassic (ebit ,ard. b) &rime 6alary Account 3ne can e perience unparalleled privileges with &rime 6alary Account li"e ,onvenience in ban"ing and Dlectronic ;und Transfer ;acility across all ban"s
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in 1ndia. &rimary accountholder gets a free 4aster,ard Titanium @ewards (ebit ,ard with annual charges waived. Unlimited free cash withdrawals can be done on all AT4s (A is !an" AT4s and 3ther !an" AT4s) c) &riority 6alary Account 0ith A is !an"Bs &riority 6alary Account, one can e perience the best in class service and en:oy other e clusive privileges. 3ther than the normal benefits, A is &riority &rivileges also includes !an"ing &rivileges, >ifestyle privileges F 1nvestment privilegesM Access to &remium !an"ing branchesM (edicated @elationship 4anager for all ban"ing needs. d) 0ealth 6alary Account A is !an" gives a wealth of privileges for those who earn them.
A is 0ealth &rivileges include D clusive premium service through !an"ing &rivileges, >ifestyle privileges F 1nvestment privilegesM Access to &remium !an"ing branchesM (edicated 0ealth 4anager for all ban"ing needs

e) (efence 6alary Account (&30D@ 6A>UTD) A is !an" is proud to be the ban"ing partner of the brave men and women who defend our nation. Dspecially for them, A is !an" has created a salary account that understands their life in (efence forces. 1.1> )epo&it& a) ;i ed (eposits A is !an" offers customers a simple reinvestment ;i ed (eposits, which can be opened with a minimum investment of @s %),))). They can ma"e additions to their deposit in multiples of @s %,))) each. The tenure of their deposit must be a minimum of * months. i) @einvestment (eposits5 1n a reinvestment deposit, the interest accrued to the customerIs deposit at the end of each 8uarter is invested along with the principal. The tenure of their deposit must be a minimum of * months. At the end of the 8uarter, the interest and the principal are both rolled over, and the interest is calculated on the total sum. 1ncome ta is deducted at source.

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ii) Automatic @ollover< As a ;i ed (eposit holder, one can avail of the facility for automatic rollovers on maturity (for both the principal and interest). 3ne can select this option in the Account 3pening (ocument (A3(). The options available are5 4a* Rollo/er only Prin'ipal< 3nly the principal amount will be rolled over. The interest will be either credited to your designated account or paid 4-* Rollo/er Prin'ipal an% Intere&t a''r e% in Rein/e&tment )epo&it< This will rollover both the deposit and the interest accrued for the same tenure at the 1nterest @ates applicable on the maturity date.3n or before the maturity date, one can ma"e the following changes in the rollover instructions , change in principle and change in rollover of principal to rollover of principle G interest .
0ithdrawals

All encashments or withdrawals of ;i ed (eposits can only be made at the branch where the deposit was boo"ed . 1.1? TA@ 0A9ER FI@E) )EPO0IT 1n the ;inance !ill of #))*, the government had announced Ta benefits to !an" Term (eposits which are of over - year tenure u$s .), of 1T Act, %<*% vide Notification Number #)+$#))* and 63%##) (D) dated #.$)C$#))*. The salient points of the scheme notification areM (a) ;i ed tenure without premature withdrawal. (b) Jear is defined as a financial year. (c) Amount limited to @s. %)) minimum and @s. %)),))) ma imum. (d) !an" will issue a ;i ed (eposit @eceipt that shall be the basis of claiming ta benefit. (e) Term deposit under this scheme cannot be pledged to secure a loan.
!enefits of ta brea" u$s .), of 1T Act !enefit 1llustrator D ample

Assume that a customer invests @s %)),))) in this scheme O .A p.a. in fi ed deposit for five years. 2e will get a benefit of @s +),*)) at +).* A on the eligible investment of 1N@ %)),))) assuming that he is in @s #,-),))) la"h to @s %),)))) la"h ta brac"et, thus his effective investment would be @s *<,/)). 2e would earn @s .))) (). percent on % lac) as interest per annum,
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which would translate to a return of %%.- percent on the effective investment of @s *<,/)).
Feat re&5

a) Two schemes T(=@1 (@einvestment Type) and T(=K1 (Kuarterly 1nterest Type). b) 4inimum and 4a imum (eposit Amount5 The minimum deposit amount will be 1N@ %)) or multiples thereof and ma imum deposit amount will be 1N@ %)),))) c) >oc"-in-&eriod5 6ince there is an underlying ta advantage u$s .), of 1T Act, there would be a loc" in period of at least - years on the ;( under this scheme. d) Type of deposit5 Two types of deposits are to be offered under the scheme, one providing for 8uarterly compounding$reinvestment of interest (@1, scheme) and the other providing for 8uarterly payout of 1nterest (K1, scheme) to the designated operative account of the depositor. e) &remature closure of ;i ed (eposits5 A minimum loc" in period of - years is stipulated to enable the deposit to be assessed as e empt from ta able income u$s .), of the 1T Act. f) The maturity period of a term deposit receipt of any denomination shall be five years commencing from the date of the receipt. g) No term deposit shall be en-cashed before the e piry of five years from the date of its receipt h) ;i ed (eposit @eceipt5 As per the scheme notification, ta benefits under this scheme are to be claimed through the ;i ed (eposit receipt issued by the !an". i) Ta (educted at 6ource5 ;i ed (eposits with the ban" shall be sub:ect to Ta (eduction at source as per 1ncome Ta Act %<*%. 1nterest on these term deposits shall be liable to ta under the Act, on the basis of annual accrual or receipt, depending upon the method of accounting followed by the assessee.The ta on such interest shall be deducted in accordance with the provisions of section %</A or section %<- of the Act.

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1.#A Re' rrin! )epo&it& A is !an"Bs @ecurring (eposit scheme will allow customers with an opportunity to build up their savings through regular monthly deposits of fi ed sum over a fi ed period of time. a) Feat re&<
i.

@ecurring deposits are accepted in e8ual monthly installments of minimum @s %,))) and above in multiples of @s -)) thereafter. @ecurring (eposit accounts can be opened for a minimum period of %# months and in multiples of %# months thereafter, upto a ma imum of %#) months.

ii.

iii.

The amount of installment once fi ed, cannot be changed. 1nstallment for any calendar month is to be paid on or before the last wor"ing day of the month. 0here there is delay in payment of installment, one can regulari7e the account by paying the defaulted installment together with a penalty (at present it is O &>@ plus / A for the period of delay).;raction of a month will be treated as full month for the purpose of calculating the penalty.

iv.

The total amount repayable to a depositor, inclusive of interest, depends on the amount of monthly installments and the period of deposit.

b) En'a&h #7 The Dncash #/ (;le i (eposit) gives customers the li8uidity of a 6avings Account coupled with high earnings of a ;i ed (eposit. This is achieved by creating a ;i ed (eposit lin"ed to their 6avings Account providing the following uni8ue facilities5 i) 4a imum @eturns5 The money is no longer idle. As soon as the balance in someoneIs 6avings Account crosses over @s #-,))), the e cess, in multiples of @s %),))) will be transferred automatically to a higher interest earning ;i ed (eposit Account. The maturity of fi ed or term deposits formed as a result of transfer of money from the 6avings !an" account will be for a ma imum period of %.% days and the interest will be calculated on simple interest rate basis.

15

ii) 4a imum >i8uidity<

The money par"ed in ;i ed (eposits as a result of the above mentioned sweep out from your 6avings account can be easily accessed by issuing a che8ue, withdrawing through AT4 etc. This amount is automatically reverse swept from the most recently formed ;i ed (eposit in units of @s -,))) to the 6avings account whenever the balance in your 6avings account falls below @s #-,))). The amount bro"en form your ;i ed (eposit will earn interest rates at the applicable rate for the period that the deposit was held with the !an". The
remaining amount of ;i ed (eposit will continue to earn the contracted rate of interest. iii) Auto @enewal5

3n maturity of the lin"ed ;i ed (eposit, the !an" will automatically renew it for a ma imum period of %.% days.

16

1.; OR.ANI0ATION 0TRBCTBRE OF THE COMPANY The decisions ma"ing process of the ,ompany follows the following ,hannel5-

4fi! 1.1 )epi't& The Or!ani&ational 0tr 't re Of The A2i& +an,*

17

1.= Mar,et 0hare an% Po&ition of the Company A is !an" maintained number one position in (omestic !ond 6yndication mar"et ,;or the ;ourth ,onsecutive year according to data released. The private ban" ran"ed ;irst in year #)%% concerning %*A of mar"et share in a year which corporate raised @s %C/C)) crores , 1n #)%# A is !an" has been given top + position , in terms of ;astest growth in private sector ban". ;inancial e press has given number # position and !T-E&4= has rated A is !an", As the !est ban" with Psome #* parameters. The company net profit is K+;J%#J ,(%,%o#.#C) which has increased of #-.%<A =rowth to #)%% I.> Pre&ent Lea%er&hip< )E0I.NATION

NAME

0hri A%ar&h Di&hore Mr&. 0hi,ha 0harma 0hri D.N. Prith/ira3 0hri 9.R. Da n%inya 0hri 0.+. Math r Prof. 0amir D +ar a 0mt. Rama +i3ap r,ar 0hri Pra&a% R. Menon 0hri Ra-in%ranath +hatta'harya 0hri A.D. )a&! pta 0hri 0on Mittal

,hairman 4anaging (irector F ,D3 (irector (irector (irector (irector (irector (irector (irector (irector (irector

4Ta-le 1.#C Pre&ent lea%er&hip of A2i& +an,*

&resent leadership 1 would li"e to mention the people and their level in the organisation with whom 1 have interacted during my summer training. Their names are as follows5
a) 4r 'ipin Aggarwal ( !ranch 2ead ) b) 4s. 2armeet Eaur ( 3perational 2ead)

18

c) 4s. (ivya ?ain (3perational 2ead) d) 4r Ar:un !oss (4anager) e) 4s 6mriti =upta (@elationship 4anager) f)

4s @a:ul 'erma(4anager)

I.?0o r'e of )ata Colle'tion =iven source of data is secondary data which has been retrived from website of a is ban" , brousher ,and internet etc.

,2A&TD@ -# 603T ANA>J616 3; AQ16 !ANE

Under this chapter swot analysis of the company have been done which tells what is the strength of thecompany to have an edge over its competitors.its wea"nesses, its
19

opportunities to grab prospective businesand what threats it faces to sustain its position or e istence in the mar"et. #.1 PORTER80 FI9E FORCE MO)EL Porter fi/e for'e& analy&i& is a framewor" for industry analysis and business strategy development formed by 4ichael D. &orter of 2arvard !usiness 6chool in %<C<. 1t draws upon industrial organi7ation economics to derive five forces that determine the competitive intensity and therefore attractiveness of a mar"et. Attractiveness in this conte t refers to the overall industry profitability. An HunattractiveH industry is one in which the combination of the five forces acts to drive down overall profitability. A very unattractive industry would be one approaching Hpure competitionH, in which available profits for all firms are driven to normal profit. &orterIs ;ive forces are 5 a) b) c) d) e) Threat of New Dntrant. Threat of substitute goods and services !argaining power of buyers or customer !argaining power of suppliers 1ntensity of competitive rivalry

6T@DN=T2 Top fast growing private sector D-bna"ing 1ncreased profits

0DAEND66D6 ;luctuation in the share 1mprovement in customer relation =aps in retail , wholesale sectors etc ;oreign branches constitute only .A

20

3&&3@TUN1T1D6 Ac8uisition to fil =aps 1ncreased in e-transaction 1ntroduce D41 6D!1 approved a is ban" mangement

T2@DAT6 @!1 increased ,@@ by %)) A 1ncreased funding in K1&6 Tough competition by 2(;, and 1,1,1

4Fi!#.1 0(OT Analy&i& Of A2i& +an,*

#.1.1 Threat Of Ne$ Entrant

a)

1f new entrants move into an industry they will gain mar"et share F rivalry will intensify The position of e isting firms is stronger if there are barriers to entering the mar"et

b)

c)

1f barriers to entry are low then the threat of new entrants will be high, and vice versa.

!arriers to entry are, therefore, very important in determining the threat of new entrants. An industry can have one or more barriers. The following are common e amples of successful barriers5 +arrier Note& In/e&tment 'o&t 2igh cost will deter entry 2igh capital re8uirements might mean that only large businesses can compete E'onomie& of &'ale >ower unit costs ma"e it difficult for smaller newcomers

a/aila-le to e2i&tin! firm& to brea" into the mar"et and compete effectively

21

Re! latory an% le!al re&tri'tion&

Dach restriction can act as a barrier to entry D.g. patents provide the patent holder with protection, at least in the short run

Pro% 't %ifferentiation 4in'l %in! -ran%in!*

D isting products with strong U6&s and$or brand increase customer loyalty and ma"e it difficult for newcomers to gain mar"et share

A''e&& to & pplier& an% %i&tri- tion 'hannel&

A lac" of access will ma"e it difficult for newcomers to enter the mar"et

Retaliation -y e&ta-li&he% D.g. the threat of price war will act to discourage new pro% 't& entrants !ut note that competition law outlaws actions li"e predatory pricing 4Ta-le #.1 Fa'tor& %etermin! +arreir& of Ne$ Entrant&*

5 4Fi!#.# Poter8& Fi/e For'e& Mo%el* 2igh or low industry profits are associated with the following characteristics5

22

4Ta-le #.# Fator& )eterminin! Hi!h or Lo$ In% &try Profit&* Ea&y to Enter )iffi' lt to Enter ,ommon technology Access to distribution channels >ow capital re8uirements No need to have high capacity and output &atented or proprietary "now-how 0ell-established brands @estricted distribution channels 2igh capital re8uirements acceptable unit costs

Absence of strong brands and customer loyalty Need to achieve economies of scale for

#.1.# +AR.AININ. PO(ER OF 0BPPLIER0 1f a firmIs suppliers have bargaining power they will5
a) b) c)

D ercise that power 6ell their products at a higher price 68uee7e industry profits

1f the supplier forces up the price paid for inputs, profits will be reduced. 1t follows that the more powerful the customer (buyer), the lower the price that can be achieved by buying from them. 6uppliers find themselves in a powerful position when5
23

a) b) c) d)

There are only a few large suppliers The resource they supply is scarce The cost of switching to an alternative supplier is high The product is easy to distinguish and loyal customers are reluctant to switch

e) f) g)

The supplier can threaten to integrate vertically The customer is small and unimportant There are no or few substitute resources available

?ust how much power the supplier has is determined by factors such as5 Fa'tor Note BniE ene&& of the inp t & pplie% 1f the resource is essential to the buying firm and no close substitutes are available, suppliers are in a powerful position N m-er an% &i"e of firm& & pplyin! the re&o r'e& A few large suppliers can e ert more power over mar"et prices that many smaller suppliers each with a small mar"et share Competition for the inp t from other in% &trie& Co&t of &$it'hin! to alternati/e &o r'e& 1f there is great competition, the supplier will be in a stronger position A business may be Rloc"ed inS to using inputs from particular suppliers 9 e.g. if certain components or raw materials are designed into their production processes. To change the supplier may mean changing a significant part of production

24

4Ta-le #.1 Fa'tor& )etermin! Po$er Of The 0 pplier&*

#.11 +AR.AININ. PO(ER OF +BYER0 &owerful customers are able to e ert pressure to drive down prices, or increase the re8uired 8uality for the same price, and therefore reduce profits in an industry.6everal factors determine the bargaining power of customers, including5 Fa'tor Note N m-er of ' &tomer& Their &i"e of their or%er& The smaller the number of customers, the greater their power The larger the volume, the greater the bargaining power of customers N m-er of firm& & pplyin! the pro% 't The threat of inte!ratin! -a',$ar%& The 'o&t of &$it'hin! The smaller the number of alternative suppliers, the less opportunity customers have for shopping around 1f customers pose a threat of integrating bac"wards they will en:oy increased power ,ustomers that are tied into using a supplierIs products (e.g. "ey components) are less li"ely to switch because there would be costs involved 4Ta-le <#.7 Fa'to& )eterminin! The +ar!ainin! Po$er Of C &tomer* ,ustomers tend to en:oy strong bargaining power when5
a) b)

There are only a few of them The customer purchases a significant proportion of output of an industry

25

c)

They possess a credible bac"ward integration threat 9 that is they threaten to buy the producing firm or its rivals

d) e)

They can choose from a wide range of supply firms They find it easy and ine pensive to switch to alternative suppliers

#.17 THREAT OF 0B+0TITBTE PRO)BCT0 OR 0ER9ICE0 A substitute product can be regarded as something that meets the same need.6ubstitute products are produced in a different industry 9but crucially satisfy the same customer need. 1f there are many credible substitutes to a firmIs product, they will limit the price that can be charged and will reduce industry profits. The e tent of the threat depends upon a) The e tent to which the price and performance of the substitute can match the industryIs product b) The willingness of customers to switch c) ,ustomer loyalty and switching costs 1f there is a threat from a rival product the firm will have to improve the performance of their products by reducing costs and therefore prices and by differentiation. #.1.: )E.REE OF COMPETITI9E RI9ALRY 1f there is intense rivalry in an industry, it will encourage businesses to engage in
a) b) c)

&rice wars (competitive price reductions), 1nvestment in innovation F new products 1ntensive promotion (sales promotion and higher spending on advertising)

All these activities are li"ely to increase costs and lower profits
26

Fa'tor Note N m-er of 'ompetitor& in the mar,et ,ompetitive rivalry will be higher in an industry with many current and potential competitors

Mar,et &i"e an% !ro$th pro&pe't& ,ompetition is always most intense in stagnating mar"ets Pro% 't %ifferentiation an% -ran% The greater the customer loyalty the less intense the loyalty competition The lower the degree of product differentiation the greater the intensity of price competition The po$er of - yer& an% the a/aila-ility of & -&tit te& Capa'ity tili&ation 1f buyers are strong and$or if close substitutes are available, there will be more intense competitive rivalry The e istence of spare capacity will increase the intensity of competition The 'o&t &tr 't re of the in% &try 0here fi ed costs are a high percentage of costs then profits will be very dependent on volume As a result there will be intense competition over mar"et shares E2it -arrier& 1f it is difficult or e pensive to e it an industry, firms will remain thus adding to the intensity of competition 4Ta-le #.: Fa'tor& )etermine The )e!ree Of Competiti/e Ri/alry*

#.1 0(OT ANALY0I0 OF THE COMPANY #.11 0tren!th& Of The A2i& +an,
a)

A is ban" has been given the rating as one of top three positions in terms of fastest growth in private sector ban"s

27

b)

;inancial e press has given number two position and !T-E&4= has rated AQ16 ban" as the best ban" with some #* parameters The ban" has a networ" of %,*## domestic branches and .,+#/ AT4s The ban" has its presence in <C% cities and towns The ban"s financial positions grows at a rate of #)A every year which is a ma:or positive D- sign for any ban" The companyIs net profit is K+;J%# is %,%)#.#C which has a increase of #-.%<A compared to #)%%

c) d) e)

f) g)

#.1# (ea,ne&&e& of The A2i& +an,

a)

=aps 9 4a:orly they concentrated in corporate, wholesale ban"ing, treasury services, retail ban"ing ;oreign branches constitute only .A of total assets The share rates of AQ16 ban" is constantly fluctuating in higher margins which ma"es investors in an uncomfortable position most of the time There are lot of financial product gaps in terms of performance as well as reaching out to the customer Their financial consultants are not wise enough to guide the customers toward right investments ,ustomer service has to improve a lot in order to be in race with other ma:o players

b) c)

d)

e)

f)

#.11 Opport nitie& Of The A2i& +an, a) Ac8uisitions to fill gap b) 1n #)%), ac8uired Dnam 6ecurities &vt >td 9 bro"ing and investment ban"ing c) 1n 6ep #))<, 6D!1 approved A is Asset 4anagement ,o. for mutual fund business d) No. of e-transactions increased from ).C million to around # million e) =eographical e pansion to rural mar"et 9 .)A of them have no access to formal lending
28

f) /*A use informal lending channels g) #/A unregulated money lenders h) Now number of branches increased to %*## from ++<. i) >ast 8uarter there were /. new branches opened across the Nation :) 6ince itIs a new age ban"ing there are lot of opportunities to have the advance technicalities in ban"ing solutions compared to e isting ma:or players ") The assets in their international operations are growing at a very faster pace with growth rate of <A. l) The concept of DT4 (Dverywhere teller machine) by AQ16 !an" had a good response in terms of attracting new customers in personal ban"ing segment #.17 Threat& Of The A2i& +an, a) 6ince #))<, @!1 has increased ,@@ by %)) basis points b) 1ncreased repo rate reverse repo rate by -) points 9 %% times of late c) 1ncreasing popularity of K1&s due to ease in fund raising d) @!1 allowed foreign ban"s to invest up to C/A in 1ndian ban"ing e) =overnment schemes are most often serviced only by govern ban"s li"e 6!1 1ndian !an"s, &un:ab National !an" etc f) 1,1,1 and 2(;, are imposing strong threats in terms of their e pansion in customer base by their aggressive mar"eting strategies

Chapter- 1 A )ATA COLLECTION

This chapter contains all the data related to the various department of the a is ban" li"e mar"eting ,operations ,information technology, finance , human resource department, various functions performed under these departments .1t also include data regarding credit appraisal at a is ban".

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1.1 MARDETIN. 1.11 C &tomer Relation Poli'ie& &rocess of developing a cooperative and collaborative relationship between the buyers and the sellers is called customer relationship management.,@4 aims at focusing all the organi7ational activities towards creating and maintaining a customer. ,@4 is a new techni8ue in mar"eting where the mar"eter tries to develop long term collaborative relationship with customers to develop them as life time customers. ,@4 aims to ma"e the customer climb up the ladder of loyalty 1.1# CRM at A2i& +an,5 The A is ban" customer care department is the department which handles all customer 8ueries, suggestions, feedbac" and complaints if any. ,ustomers can also find out all the newly introduced financial products and services by calling here. As the name suggests, the customer care service is specially catered to serve all the customers of A is ban", whether e isting customers or new customers. The customer care service stretches out to all its customers with an aim of providing relevant information regarding ban"ig structure and the wor"ing schedule. The A is ban" customer care centers are spread across the country in places li"e (elhi, =urgaon, 4umbai, !angalore, Ahmedabad, ,hennai, &une, 2yderabad, Eol"ata, &une etc. This department wor"s in a #/ C wor" environment so that the customers can contact the ban" at any time in case of any problem. ,ustomers from abroad and the N@1 customers can call at a time when it is convenient to them without thin"ing about the time in 1ndia. The ban"Bs customer support center not only answers customerIs 8ueries over the phone but also underta"es a phone ban"ing facility. All the customer care e ecutives have thorough "nowledge of all the products and services offered by the ban". That is why they are very fluent in ,ustomer @elationship 4anagement as a 6trategic Tool in the 1ndian !an"ing... answering any "ind of 8uestion posed by the customer. =iven below is a list of customer care phone no. a* A2i& +an, C &tomer Care Phone N m-er The customer care numbers of A is !an" can provide great help to the users as they can en8uire about their problems from the customer care department.
30

Also !an" ensures that there is availability of well 8ualified professionals in order to satisfy customers and give appropriate solutions to their 8ueries -* A2i& +an, C &tomer Care Toll Free N m-er The customer care toll free numbers of the A is !an" for >ost ,redit ,ards are5 %-.))-#++---CC %-.))-#)<---CC %-.))-%)+---CC This number remains a toll free number if contacted from anywhere in 1ndia from a 4TN> or a !6N> landline phone. N@1 $ 3ther customers can access services of phone ban"ing from outside 1ndia by dialing G<% ## #C*/.))). ;or bloc"ing of (ebit cards or &repaid cards, the #/ hour emergency number is G<% ## *C<.CC)) '* A2i& +an, C &tomer Care 0M0 0er/i'e Jou can also send them an 646 on their number -*C*C.# or <C%C)))))#. The customer care e ecutive of the ban" would either call you up or reply your 8uery. FBERIE0 0M0 CO)E !alance en8uiry !A> >ast + transaction 41N1 ,he8ue status ,2K6TATU6 ,he8ue boo" re8uest ,2K!E 4Ta-le 1.1 C A2i& +an, C &tomer Care 0M0 0er/i'e*

%*

A2i& +an, C &tomer Care e-mail 0er/i'e ,ontact customer.servicesOa isban".com for ,redit ,ard @elated issues ,ontact debit.cardOa isban".com for (ebit ,ard @elated 8ueries ,ontact mobile.ban"ingOa isban".com for 4obile !an"ing 8ueries ,ontact nricellOa isban".com for N@1 @elated 8ueries
31

,ontact shishir.man"adOa isban".com for 1nvestor relations 8ueries 1.11 A%/ertie&ment Poli'ie& A is !an" launches new brand campaign H!adhti Ea Naam LindagiH conceptuali7ed by Ad agency Lowe Lintas, the new campaign aims to highlight the !an" as a preferred partner in progress. The :ourney of #%st century common man portrait in such way that anyone can emotionally attach to new A is !an" advertisement. Jindagi Ke Picture Mein Interval Nahe Hota ... Axis Ban ...Badhti Ka Naa! "indag 1.17 Promoter& Of A2i& +an, A is !an" >td. has been promoted by the largest ;inancial 1nstitutions of the country, UT1, >1,, =1, and its subsidiaries. The !an" was set up in %<<+ with a capital of @s. %%- crore, with UT1 contributing @s. %)) crore, >1, - @s. C.crore and =1, and its four subsidiaries contributing @s. %.- crore each 1.# 1.#1 HBMAN RE0OBRCE 4HR) Trainin! An% In% 'tion Pro!ramme& function is instrumental in creating and developing human capital in alignment with the !an"Is vision. Talent 4anagement with particular focus on grooming future leaders, learning and development and employee engagement have been the "ey focus areas in the !an"Is 2@ ob:ectives. The !an" has built a learning infrastructure to ensure availability of s"illed and empowered wor"force. The >earning 4aps aligned to the overall development plan of employees are designed to facilitate learning process across all levels through a blended learning approach of classroom programmes, e ternal programmes, certification programmes as well as e-learning modules. The !an" also creates alternate talent pipelines by entering into arrangements with Training and Dducation 1nstitutes and continues to maintain a strong employer brand in the financial services sector especially on the campuses of the premier business schools of the country. Apart from having a strong presence in the talent mar"et, the !an" also believes in maintaining a strong image internally by

32

"eeping its wor"force engaged at all levels.To inculcate and live its motto of GOne +an,H One A2i&8 and foster a spirit of connectedness. 1.## (elfare An% Performan'e Apprai&al The !an" also offers avenues for several employee health and wellness initiatives throughout our networ". The !an" has been conducting its annual Dmployee Dngagement 6tudy to capture, analyse and draw action plans to enhance the engagement 8uotient. A third-party framewor", benchmar"ed as one of the best, is used for administering and analysing the results of the study, with focus on measuring and improving employee engagement 8uotient. Ta"ing concrete steps based on the study findings helps in building a stronger and more engaged wor"force. The !an" see"s regular feedbac" from employees on the policies and practices to ensure that it is in consonance with employee empowerment. 1ncidentally, the focus areas for the !an"Is performance management system are 3wnership, ,ontinuous &rocess and 2umane Touch, which are driven by strengthening the culture of performance feedbac" (both formal and informal). The A>&s form a framewor" for all the people processes in the !an". These are an integral part of processes li"e Talent Ac8uisition, &erformance 4anagement 6ystem, &romotion, Talent Appreciation, >eadership (evelopment and ;eedbac".

1.#1 Employee +enefit& a* Pro/i%ent F n% @etirement benefi t in the form of provident fund is a defi ned benefi t plan wherein the contributions are charged to the &rofi t and >oss Account of the year when the contributions to the fund are due. ;urther, an actuarial valuation is conducted by an independent actuary to determine the defi ciency, if any, in the interest payable on the contributions as compared to the interest liability as per the statutory rate.

33

-* .rat ity The !an" contributes towards gratuity fund (defi ned benefi t retirement plan) administered by various insurers for eligible employees. Under this scheme, the settlement obligations remain with the !an", although various insurers administer the scheme and determine the contribution premium re8uired to be paid by the !an". The plan provides a lump sum payment to vested employees at retirement or termination of employment based on the respective employeeIs salary and the years of employment with the !an". >iability with regard to gratuity fund is accrued based on actuarial valuation conducted by an independent actuary using the &ro:ected Unit ,redit 4ethod as at +% 4arch each year. 1n respect of employees at overseas branches (other than e pats) liability with regard to gratuity is provided on the basis of a prescribed method as per local laws, wherever applicable. '* Lea/e En'a&hment 6hort term compensated absences are provided for based on estimates. The !an" provides leave encashment benefit (long term), which is a defi ned benefi t scheme based on actuarial valuation conducted by an independent actuary. The actuarial valuation is carried out as per the &ro:ected Unit ,redit 4ethod as at +% 4arch each year. %* 0 perann ation Dmployees of the !an" are entitled to receive retirement benefits under the !an"Is 6uperannuation scheme either under a cash-out option through salary or under a defined contribution plan. Through the defined contribution plan, the !an" contributes annually a specified sum of %)A of the employeeIs eligible annual basic salary to >1,, which underta"es to pay the lumpsum and annuity benefit payments pursuant to the scheme..

1.#7

RECO.NITION 0Y0TEM

34

4Fi! 1.1 Intelle't al Capital Of A2i& +an,* 1ntellectual ,apital #.position holders and unit heads the fundamentals of managing self and team leadership though a series of T1nspired >eadershipI wor"shops. The !an" has also launched an inhouse multi-rater feedbac" tool TA>& ,ompassI, based on the A2i& Lea%er&hip Pra'ti'e&. The strength of the wor"force was +C,<)% at the end of the year as compared to +%,C+. last year. A young wor"force with an average age of #< years and the !an"Is policy of being an e8ual opportunity employer continues to significantly contribute towards emergence of the A is !an" brand. The !an" inspires everyone to e cel and contribute to, irrespective of gender, race or age, and this echoes in all 2@ initiatives underta"en. The !an" is also a socially responsible employer. Apart from housing its own N.O GA2i& +an, Fo n%ation8, the !an" has partnered with Teach for 1ndia for promoting the noble
35

ob:ective of providing education to underprivileged children.The !an" continues to strive towards realisation of its vision of being the preferred financial service provider e celling in customer delivery through insight, empowered employees and smart use of technology. 1.#: Career )e/elopment Of HR A is !an", believe that people are our primary source of competitiveness and sustainability. The focus, therefore, is to leverage the potential of most important resource 9 people and collaboratively attain growth and success for the !an". 6trive is to create a culture which is conducive towards proactive learning and superior performance, without losing focus on corporate values. ;ocus has also been to align the personal aspirations of people to the business imperatives. Dach of A is !an"ers ta"e great PRI)E to be associated with the !an" and that is achieved through being Progressive in people practices, Responsive in behaviour, Innovating for change and continuous improvement, )eveloping for growth and Empowering for e cellence. A is !an", today, is one of the most valued private sector ban"ing organisations in 1ndia. people, will not only :oin a great organisation but also a wor"place, which allows one to ma"e a difference and e cel through providing efficient, effective and 8uality services. 1t is committed towards providing the best of wor"ing environments and a wor"place where one can define and achieve oneBs career ob:ectives. 1.#; .rie/an'e Re%re&&al Poli'y A is !an"Is =rievance @edressal &olicy has been formulated in line with @!1 guidelines on ,ustomer 6ervice. The policy broadly strives to ensure that 5 i. All customers are treated fairly at all times.All complaints, re8uests, 8ueries and critical re8uests received from customers are responded with courtesy and on time. ii. ,ustomers are fully informed of avenues to escalate their complaints$ grievances within the !an" and their rights to remedy, if they are not satisfied with the response of the !an"

36

1.#= 0alient Feat re& Of The Poli'y All complaints will be registered in a central complaints management system of the !an". ,omplaints will be assigned a uni8ue reference number which will be communicated to the complainant along with an appropriate turnaround time. 1n case the resolution needs additional time, an interim response shall be sent to the complainant. a) All complaints shall be monitored and mar"ed as closed only after resolution of the customer grievance. These resolutions will be monitored by the central =rievance @edressal Unit (=@U) of the !an". b) complaints pertaining to services rendered by !ranches and Asset 6ales ,enters (A6,s) would be responded by the concerned !ranch$ A6, at the first level as per turnaround time (TAT) defined in ,lause / of this policy. Dscalated complaints and unresolved complaints would be handled by the =rievance @edressal Unit of the !an". c) ,omplaints received by the 2ead 6ervice Kuality, 6enior 4anagement and from @egulators will be resolved by the =rievance @edressal Unit. The =@U would monitor the resolution of complaints received by the !an" and periodically put up the same for review by the 6enior 4anagement. d) @esolution of complaints would be, wherever applicable, in accordance with !an"Is ,ompensation &olicy, as published on the website. e) Achieve compliance with the procedure on =rievance @edressal as outlined in &ara C of the ,ode of ,ommitment to 1ndividual ,ustomers set out by the !an"ing ,ode and 6tandards !oard of 1ndia (!,6!1) as well as &ara %* of the 4aster ,ircular on ,ustomer 6ervice dated #nd?uly #)%#.

37

f)

1mprove processes and systems by ta"ing cogni7ance of customer feedbac" and complaints

1.#> 0afetyH Health 6 En/ironment 40HH6E* Poli'y AQ16 !ANE is committed to conduct business with strong environment conscience ensuring sustainable development, safe wor"places and enrichment of 8uality of life of Dmployees, ,ustomers and the ,ommunity. Dmployees at the company, believe that good 6, 2FD performance is an integral part of efficient and profitable business management. They shall5 a) b) c) Dstablish and maintain good standards for safety of the people, the processes and the assets. ,omply with all @ules and @egulations on 6afety, 3ccupational 2ealth and Dnvironmental &rotection. &lan, design, operate and maintain all facilities, processes and procedures to secure sustained 6afety, 2ealth and Dnvironmental d) e) f) g) h) &rotection. @emain trained, e8uipped and ready for effective and prompt response to accidents and emergencies. 0elcome audit of our 6, 2FD conduct by e ternal body, so that sta"eholder confidence is safeguarded. Adopt and promote industry best practices to avert accidents and improve our 6, 2FD performance. @emain committed to be a leader in 6afety, 3ccupational 2ealth and Dnvironmental &rotection through continuing improvement. 4a"e efforts to preserve ecological balance and heritage.

1.1 1.11

OPERATION0 Trea& ry mana!ement This department is responsible for the maintenance of the statutory re8uirements such as the cash reserve ratio (,@@), statutory li8uidity ratio (6>@) and the investing such funds. 1t also manages the assets and liabilities of the ban". &rimary activities are as follows5 a) (erivatives
38

b) 4oney mar"et operations c) ;oreign e change operations 1.1# Mer'hant +an,in! an% 'apital mar,et& A is !an" is a registered merchant ban"er. The services offered are5 a) b) c) d) (ebenture trustees (epository services &rivate placement 1ssue management e) &ro:ect advisory services, capital mar"et services, advisory on 4ergers FAc8uisition 1.11 Retail finan'ial &er/i'e& All branches have a dedicated financial advisory des", wherein the mutual fund schemes are mar"eted. The ob:ective is to provide customers with a larger portfolio of investment avenues thereby enhancing customer relationship. 3ther products handled by the department include sale of =old ,oins as well as mar"eting of (epository services. 1.17 Corporate an% in&tit tional -an,in! a) b) c) d) ,ash management 6ervices !usiness current Accounts ,orrespondent !an"ing =overnment !usiness

1.1:

Retail +an,in! @etail ban"ing is one of the "ey departments in the ban". 1t has the largest variety in its portfolio which consists of retail asset and retail liability products. @etail ban"ing by definition implies ban"ing services which are offered to individual customers as opposed to corporate ban"ing which is meant for companies.

1.1;

International -an,in! 4a:or functions include

39

a) 2andling regulatory issues which include compliance with regulations of various authorities such as @!1 regulations, ;D4A etc b) Eeeping a trac" of the business volumes being generated by the branches and controlling the margins c) 4aintaining relationship with correspondent !an"s outside 1ndia 1.1= A%/an'e& The function involves e tending fund and non-fund based credit facilities to different clients in the country, the department aims to ma imi7e the interest spread earned on funds available with the ban" while "eeping the ris" on the credit portfolio at acceptable limits. The department also tries to ma imi7e fee-based income from both fund based and non-fund based activities. 1.1> Retail +a&e% Operation& 3ver the past few years, the !an" has carried out separation of the production and distribution functions, with centralised transaction processing and customer databases becoming increasingly centralised and product sales and customer handling (the distribution technology) primarily carried out at the branches. The business process reengineering has enabled reduction of transaction costs besides ensuring smoothness in operations and increasing productivity. To bring about greater precision in the management of operations, processes were constantly refined during the year on a continual basis from the perspective of implementation of best practices, ris" identification and containment. 3perational instructions were issued on a continual basis and efforts are made to introduce ris"-free wor"ing at branches. @etail !an"ing 3perations @etail !an"ing 3perations (@!3) provides seamless service to retail customers while ensuring secure and compliant systems for ris" #- containment and regulatory compliance. The oversight function in the !an" has been further strengthened through centralised monitoring of the wor"ing of the branches in respect of EJ,, A4>, other regulatory compliances, cash management, clearing operations and
40

internal house"eeping resulting in better compliance and higher operational efficiencies. (uring the year, the !an" continued to move more operations to centralised hubs thereby reducing operational activities at branches. The !an" has also invested in de-duplication in customer ac8uisition, thereby improving online monitoring. An automated system to identify e isting customer base, highlight e ceptions and manage activity flow has now been successfully implemented. 1ncreased emphasis has been laid out on service 8uality covering the entire operations area. The !an" has also implemented a robust system of identification and remedy of customer-service deficiencies through root cause analysis and trend of customer re8uests and escalated complaints. (uring the year, the !an" has set up a #/ C dedicated contact centre for N@1 customers, as well as a dedicated contact centre for retail asset customers. The !an"Is e isting liabilities contact centre offers services in %% languages. 1.1? (hole&ale +an,in! Operation& 0holesale !an"ing 3perations (0!3) function is responsible for providing best in class service to non-retail customers of the !an" through four verticals5 ,orporate !an"ing 3perations, Treasury 3perations, Trade and ;ore 3perations and ,entralised ,ollection and &ayment 2ub. The ,orporate !an"ing 3perations (,!3) ensures delivery, control, monitoring and administration of credit facilities of large corporates, mid corporates, 64D and corporate agriculture segments. 1t also processes domestic trade finance, channel finance and micro fnance transactions. ,!3 operates through ,orporate !an"ing !ranches(,!!s)$,redit 4anagement ,entres (,4,s) located at . ma:or centres, -* 4ini ,redit 4anagement ,entres (4,4,s) at Tier 11 cities, and ,orporate ,redit 3perations 2ub (,,32) at 2yderabad and =urgaon. Treasury 3perations involves the settlement and accounting of treasury-related transactions and operates the centralised electronic payment hubs for @T=6 and ND;T. The Trade and ;ore 3perations (T;3) handles remittances and trade finance transaction processing on behalf of distribution channels dealing in trade finance and foreign e change through #)) T!I category branches and state-of-the-art
41

centralised "nowledge processing centres located at 4umbai and 2yderabad. T;3 is also responsible for ensuring compliance of regulatory and internal guidelines in respect of foreign e change transactions of the !an". The ,entralised ,ollections and &ayment 2ub (,,&2) handles payments and collections, and operates through # units located at 4umbai and 2yderabad. ;urther, in order to e tend operational support and customer hand-holding at the local level, %% Transaction !an"ing ,entres (T!,s) have been set-up during the year, which are manned by s"illed resources, thereby ensuring efficient service delivery coupled with control over operations.The !an"Is payment service is one of the "ey differentiating services for all customer segments. 1n order to enhance speed, scalability and straight through processing by technological advancement, the !an" has launched a plan of introducing an Dnterprise &ayment 2ub (D&2) to handle all types of payment services through a centralised and channel agnostic processing engine. This will enhance customer e perience across all customer segments and ta"e care of growing volumes, minimise manual processing, reduce operational ris" and avoid duplication in infrastructure

1.7 FINANCE 1.71 A@I0 +AND80 +ALANCE 0HEET

42

+alan'e

&heet

A&

At

11 0'he A& % le No.

at

11-1- A& at 11-A1-#A1#4R& in in Tho &an%&*

mar'hH#A11 CAPITAL AN) LIA+ILITIE0 Capital Re&er/e 6 & rpl & )epo&it& +orro$in!& Other lia-ilitie& an% pro/i&ion& Total A00ET0

#A114R& Tho &an%&*

1 # 1 7 :

7H;=?H:7: 1#;H1??HA:7 #H:#;H11:H>>1 71?H:1AH?>7 1A>H>>1H1#A 1H7A:H;A;H:>7

7H11#HA1? ##1H?:1H1>7 #H#A1HA71HA11 17AH=1;H=#1 >;H71#H=:= #H>:;H#==H?17

Ca&h an% +alan'e& $ith Re&er/e ; +an, of In%ia +alan'e& $ith +an, an% Money at = Call an% 0hort Noti'e In/e&tment A%/an'e& Fi/e% A&&et& Other A&et& Total Contin!ent lia-ilitie& +ill& For Colle'tion 0i!nifi'ant A''o ntin! Poli'ie& 1=6 1> an% Note& to A''o nt 0'he% le referre% to a-o/e from an inte!ral part of the +alan'e 0heet 1# > ? 1A 11

17=H?#AH>>1 :;H7#>H=1; 1H11=H1=:H1=A 1H?;?H;:?H:=7 #1H::;H7#A =AH;;:H;#1 1H7A:H;A;H:>7 :H7>1H1:>H?:1 #=>H?7>H=>A

1A=HA#?H#17 1#H1A?H?71 ?11H?#A>:? 1H;?=H:?:H1>; ##H:?1H#:A ;7H>#?H#># #H>:;H#==H?17 7H>A#H1=1H=7= 17;H17;HA71

4TA+LE1.1<- 0ho$in! +alan'e 0heet Of A2i& +an,*

43

(uring the year, the !an" raised additional e8uity capital through a Kualifi ed 1nstitutional &lacement (K1&) of +/,))),))) shares and a preferential allotment of -,.+C,</- shares at a price of U%,+<).)) per share. As a conse8uence, the paid-up share capital of the !an" has increased by U+<../ crores and the reserves of the !an" have increased by U-,/-C.C* crores after charging of issue related e penses. The funds mobilised from the e8uity raising (through K1& and &referential issue) were utilised for enhancing the capital ade8uacy ratio and for generalcorporate purposes.Total of capital and liabilities in the year +%-)+-#)%+ +,/)-,*)* have increased from last financial year.Total assets in the financial year +%-+)-#)%+ is +,/)-,*)*,-./. Total contingent liabilities is -,/.%,%-.,<-%.

1.7# PROFIT AN) LO00 OF A@I0 +AND

44

Profit 6lo&& a''o nt for the year 0'he en%e%11-mar'h H#A11 % le No.

Year en%e% 11- Year 1-#A114R& tho &an%&* in 11-1-

en%e%

#A1#4 R& in tho &an%&*

INCOME Inter&t Earne% Other In'ome 11 17 #=1H>#:H=77 ;:H:11HA;1 #1?H?7;H7=7 :7H#A#H1;1

Total # E2pen%it re Intere&t e2pen%e% Operatin! e2pen&e& Pro/i&ion& an% 'ontin!en'ie& 1: 1; 1>4#. 1.1* Total 1 Net profit for the year 4 1I#* +alan'e in profit 6 lo&& a''o nt -ro !ht for$ar% from pre/io & year 7 : Amo nt a/aila-le for appropriation Appropriation< Tran&fer to &tat tory re&er/e Tran&fer to in/e&tment re&er/e Tran&fer to 'apital re&er/e Tran&fer to re&er/e f n% Propo&e% %i/i%en% 4 in'l %e& ta2 on %i/i%en%* for$ar%

11=H11;H>A= 1=:H1;1H111 ;?H17#H1=: 71H#1;H??#

#=7H17>H;1= 11?H=;?HA#7H ;AHA=AH??: 11H>>;H:;7

#>:H:7#H7=>

#11H=#;H:>1 7#H7##HA:7 7?H;?=H=A= ?#HH11?H=;1 1AH;A:H:11 :1?HA7=

:1H=?7H1#? =1H#?7H7=; 1#:HA>>H>A: 1#H?7>H:>1 :17H:=1 1>4#.#. 1* 1>4#.#. #* 1>4#.#. ?H>=#H1;7 1AAH#?#H;#7 #;HA>7 1H717H:=?

=H=AAH=#: =1H#?7H7=;

+alan'e in profit& 6 lo&& a''o nt 'arrie% :*

Total Earnin! per eE ity &hare 4fa'e /al e r& 1AJ- per &hare *4r pee* +a&i' )il te%
45

1#:HA>>H>A: 1>4#.#. 1* 11?.;= 11>.>:

?#H11?H=;1

1A#.?7 1A#.#A

0i!nifi'ant a''o ntin! poli'ie& an% note& to 1=61>

4Ta-le1.#<- Profit An% Lo&& Of A2i& +an,* Total profit from income is ++C,++*,.)C which is more than last year.Total e penditure incurred during fy is #.-,-/#,/C..Net profit for the year is -%,C</,+#<.Total transfer of fund was #*,)./ 1.: TECHNOLO.Y 1s one of the "ey enablers for business and for delivering customised financial solutions. The !an" continued to focus on introducing innovative ban"ing services through investments in scalable, robust and function-rich technology platforms to enable delivery of efficient and seamless services across multiple channels for customer convenience and cost reduction. The !an" has also focused on improving the governance process in 1T. (uring the year, the !an" has received certification of 163 #C))%5#))- by !61 (ANA! accredited) for complying with the standards of 1nformation 6ecurity 4anagement 6ystem for its data centres located in Navi 4umbai and !engaluru. The !an" has also successfully completed migration of its data centre to a co-hosted location during the year. 1.:1 A tomation an% (or, Tran&peren'y The new premises offer a category 1' data center that complies with the highest benchmar"ing standards applicable to data centres promising built-in redundancy of infrastructure. A robust &ro:ect 4anagement framewor" is used to ensure that investments in 1T are based on good gate-"eeping principles and result in appropriate paybac" in value terms.The !an" has made significant progress in implementing the recommendations of the @!1 0or"ing =roup issued in April #)%% on 1nformation 6ecurity, Dlectronic !an"ing, Technology @is" 4anagement and ,yber ;rauds. The !an" is committed to implementing the recommendations on the various sub:ect areas indicated in the guidelines. The broad measures ta"en in respect of the various areas included conducting a detailed gap analysis to implement the controls$suggestions contained in the guidelines, e amining each recommendation closely and ta"ing decisions either to ac8uire a solution or implement procedural controls. The !an" has put in place the appropriate organisational framewor" as recommended in the guidelines. 6everal information security solutions have either been
46

implemented or finalised for implementation to protect customer data, prevent #*e ternal attac"s as well as strengthening internal controls. &olicies and procedures of the !an" have also been reviewed and suitably modifi ed. The progress in each area of the recommendations has been closely monitored by the top management and the status of implementation has been reported to the !oard and @!1 at regular intervals

1.:# B0E0 OF ITE0 a* Internet +an,in! < A is !an" 1nternet !an"ing is the !an"Bs 1nternet 6ervice, offering the following facilities to the User5 !alance en8uiry, statement of account, re8uest for issue of che8ue boo", view personal account information, details of holding $ statement of demat accounts and other facilities as the !an" may decide to provide from time to time li"e transfer of funds between accounts. -* Online +ill Payment <!ill &ayment is a facility through which you can pay your utility bills, insurance premiums, credit card bills F varous other bills online through your account. Jou can pay bills as per the available funds in your operative account. '* 0M0 +an,in! < Eeep a watch on your account with our round the cloc" 646 !an"ing service. Dvery debit or credit in your account is intimated to you by an 646 as soon as it happens. !e in a smart position to detect any unauthorised access to your account. 1.:1 (E+ +A0E) TECHNOLO.IE0 B0E) A is !an" has chosen Array5& application delivery controllers for their mobile ban"ing application A is 4obile. >everaging the latest in wire speed encryption technology, AP9 0erie& application delivery controllers ensure the availability, security and reliability of A is ban" mobile ban"ing applications. A is 4obile is a service launched by A is !an" to cater to an ever growing mobile client base in 1ndia. ;or A is !an", growth in mobile
47

users was unanticipated and e ponential, totalling more than #)),))) active users within a span of * months. (ue to this high usage within a short time period, A is e perienced delays in supporting their new mobile ban"ing customers. (elays were caused in part by overloaded and underutilised servers impacting end user e perience. !efore e tending A is 4obile to a larger client base, the ban" wanted to ensure high availability and scalability for the applicationM as a result, ArrayBs application delivery controller was shortlisted, evaluated and successfully deployed. Array Networ"s was referred by A is !an" application vendors as a solution provider with a high degree of e pertise in load balancing issues. Array Networ"s implemented high availability cluster units of AP9#;AA A)C& to solve the balancing issues. Array also implemented 66> offloading with strong cipher controls on the same units to improve server efficiency and give servers more compute power to dedicate to supporting mobile application traffic. Application delivery controller @31 can be achieved within a year by significantly reducing branch and transaction overheadM currently Array systems e ecute %),))) online transitions and over %,))),))) 8ueries per day

CHAPTER-1+ )ATA PRE0ENTATION

48

1n this part of ,hapter +, the @esearcher has mentioned the scope, methodology, ob:ectives of the study. @esearcher has also presented data with the help of case study. 1.1 0COPE OF 0TB)Y 1n terms of scope , the study will be conducted on ,redit Appraisal at A is !an". The findings of study may open new vistas for newer researcher on the sub:ect by concentrating on specific topic. The outcome of the study is bound to be highly relevant especially in wa"e of ,redit Appraisal at A is !an". The present study is an attempt in the direction as it will bring out the dominant factors which affect credit worthiness. 1n addition findings will unveil the strategies to mitigate such gaps in appraisal procedure 1.# RE0EARCH METHO)OLO.Y The process used to collect information and data for the purpose of ma"ing business decisions, "nown as research methodology. The basic purpose of this research is to find out the credit appraisal at A is !an". 0e collected data from A is !an" about their wor"ing credit appraisal department. The pro:ect lays an emphasis on the entire credit appraisal procedure followed by the 64D division of the A is !an", its tools and techni8ues followed by the ban". The pro:ect also highlights the gaps in the appraisal procedure of the ban" and the strategies to mitigate such gaps. 1.1 O+KECTI9E0< a. To study the tools and techni8ues of the credit appraisal procedure. b. To identify the gaps in the appraisal procedure, to understand the feasibility of the proposal and the pattern of its funding onvarious aspects such as commercial and financial. c. To ma"e recommendations after analy7ing the gaps in the entire appraisal process. 1.7 )ATA COLLECTION a) 0e'on%ary %ata<

49

This research study is based on secondary data. 1n the research study a case study have been ta"en and the title of the case study is credit appraisal at A is !an" 1.: LIMITATION OF THE 0TB)Y< a) As the credit appraisal is one of the crucial areas for any ban", some of the critical information associated with the clients is not revealed. b) The study done is only focused on a small area limited to only a few c) branches of A is !an" in that area, so the results cannot be generali7ed. ,redit appraisal system includes detailed study for different areas, but

due to time constraint, analysis was limited to specific areas only. d) There was limited interaction with the customers of the ban". Thus the e) customer re8uirements could not be understood. Time constraint is another limitation of the study. 1n a limited time period of C wee"s, itis not easy to understand the comple nature of the entire credit appraisal procedure.

1.; CA0E 0TB)Y PART A CLIENT )ETAIL0 ,>1DNT QJL 6TDD> ,3@&3@AT13N
50

,3N6T1TUT13N >16TD($UN>16TD ( 1N(U6T@J =@3U& (ATD @DND0A> @AT1N=

&roprietorship NA 1@3N F 6TDD> N3 6&D,1;1, =@3U& %-.%#.#.)%%(6AN,T13N) #C.C.#.%#(@D43'D() 1NTD@NA>564 D #63 A;6 #)%# DQTD@NA> 5NA 'A>1(1TJ5 3; 1@3N % JDA@ F 6TDD>

1ncorporation-%<</ 1@,A 6TATU6 >3,AT13N 5 A!, @D=( 3;;1,D5 (D;

3;

6AN,T13N$>A6T

(DA>1N= 01T2 !ANE 6 ,U6T 1( 5 ))) ,3N(U,T

!U61ND66

$>1ND

T@A(1N=

3; A,,3UNT !ANE1N= A@@AN=D4D 4U>T1&>D (DQ16T1N=) 63>D (&@3&36D() 02DT2D@ 1N T2D ,AUT13N$ (D;AU>TD@ 6 >16T 3; @!1

3; A,T1'1TJ ,>A661;1,AT13N

(6D,3N(A@J &@3(U,T6) N3N 9&@13@1TJ

PART + - PROPO0AL )ETAIL0 ;A ,1> 1T J (A TD 3; >A 6T 6A N, T13 N DQ 16 T1 N = >1 41 T 3$ 6 1@@D= U>A@1 TJ 1 N ,. $ ( D , $ (6 U ! >1 4 1T
51

&@ 3& 36 D( >14 1T

) 0 3@ E1 N= ,A &1T A> AQ 16 !A NE #C.C .#)% # #).) ) #) +.C / A 6 3 N #C. -.# 1N = 'J A6 A #-.) *.#) %# +).) ) )% #* +.* -A 6 3 N +%. )/. #) %+ T3 TA > (;! ) L TO +E TADEN O9ER FROM 9YA0A +AND *) ).) ) % . ). ) ) C.). )) N1> (+ ). ) )) V N1> N1> + ). ) ) C.). ))

52

PART C- E@PO0BRE )ETAIL0 &A@T1,U> A@6(@6 .,r) D(1T (64D) ,A &1TA> 4A@EDT6 T3 TA> @!1 ,D1>>1N= 1NTD@NDT ,D1>1N= PART ) - OTHR )ETAIL0 0ECBRITY CO9ERA.E &A@T1,U>A@6 1& DQ&36U@D 6D,U@1TJ ,3'D@ ( A6 A 3; DQ&36U@D) PRICIN. ;A,1>1TJ ,, A&&>1,AT13N !@G +)) 1.D %+))A .&AJA!>D 43NT2>J &.A DQ16T1N= !@G /.%-A 1.D %/.%-A &.A. &AJA!>D 43NT2> &@3,D661N = ;DD6 %.))A 3N J NA ).*-A 3N &@3&36D( !@G+.))A 1.D %+))A &AJA!>D 43NT2>J &.A. DQ16T1N= +*%.)) #-).)) %//AUU &@3&36D( <%<.C% C.).)) %%C.<%A ,</-.## C..) ,34&1 >D(5J ,34&1 >D(5J %-. -+.< % -C..) ,34&1 >D(5J ,34&1 >D(5J - -,@ C..) C..) ,34&ANJ =@3U&

DN2AN,D4DN
53

DN2AN,D4DN

T( @6 -.+) >A,6 &>U6 6T) AN( ).-)A ;3@ 43NT26 (%.)/>A,6 &>U6 6T) total of *.+/ lacs plus st ROC 4 $itho t 're%it 'o&t *< 71.7?MRo' 4 $ith 're%it 'o&t* <1=.A1 4Ta-le 1.1 Ca&e 0t %y On Cre%it Apprai&al Of A2i& +an,* 3N %) DQ16T1N= >141T

T ( @6 +.// >A,6 &>U6 6T) AN( ).#-A DQ16T1N= >141T ;3@ %) 43NT26 ().-# >A,6 lacs plus st &>U6 6T)total of rs +.<* 3N

1.=

Cre%it Apprai&al Pre&an'tion Pro'e&&

1.=1 Apprai&al 1.=# Preliminary Apprai&al credit appraisal process starts with the initial analysis of the proposal submitted by the borrower. The sales team is responsible for sourcing the application from the prospective clients. As the application is received by the sales team, the ne t step is to collect the necessary documents from the borrower as a matter of EJ, (Enow Jour ,ustomer) norms and other documents such as property papers, audited balance sheets and income statement etc. The application is then forwarded to the credit team with necessary documents. ;ollowing are the points borne in my mind by the various teams involved in the appraisal procedure5 a) b) c) d) e) f) g) >ending policy of the ban" @!1 >ist of defaulters 1ndustry e posure @!1 guidelines ,redit ris" rating &rofile of the promoters of the company 1ndustry related ris" factors

54

h) =overnment regulations which have an impact on the industryM e.g. ban on financing of industries producing harmful gases responsible for o7one layer depletion i) 1f itIs a case of ta"eover of :) account from previous ban" then, compliance regarding ") transfer of borrowerIs accounts. l) 6tatus of the borrower visa-viva other units of the industry. m);inancial status of the company in broad terms. !an" must attain the 43A and A3Afrom the company to understand various internal and e ternal policies of the companyand to ma"e sure whether it is in compliance to the policies of the ban". (ocuments re8uired for the processing of >oan are as follow i. ii. iii. iv. v. vi. vii. viii. i . . Application for loan re8uire ,opy of incorporation of business ,opy of commencement of business ,opy of 4emorandum F Article of Association !rief history of company, its customers F supplies, previous trac" records, orders 1n hand 1nformation on the directors of the company Audited ;inancial statements of last + years ,opy of &AN$TAN number of company ,opy of last Dlectricity bill of company :) ,opy of D cise number ") i. Address proof of all the directors ii. &hoto 1.(. of all the directors iii. &roperty related papers such as lease or sales deed, &ossession

As the above preliminary appraisal of the procedure is done, the ban" arrives at a decision whether to accept the proposal for further sanctioning or not. 1f the ban" finds the proposal acceptable, it will as" the borrower to submit a detailed application in the prescribed format along with necessary documents re8uired for the credit assessment of the borrower. The information, among other things, includes the following aspects5 i. ii. iii. A list of !oard of (irectors mentioning their 8ualifications and e perience. &ro:ection of cost of production, sales and profitability. ,urrent practices followed by the company regarding its products or services such as those relating to credit sales, bad iv. debts, etc. &ro:ections of demand and supply based on the overall scenario of the mar"et. The mar"et scenario covers
55

geographical spread, demand and supply gap, competition , v. mar"eting arrangement etc. &ro:ected income statement and balance sheet for the ne t two years.

1.11

)ETAILE) APPRAI0ALafter the preliminary appraisal of the proposal, the ban" then carries out the detailed appraisal of the proposal. The credit team is responsible for performing various activities at this stage of the appraisal procedure. ;ollowing are the activities carried out by the credit team analysts5 a. The credit team e amines the viability of the proposal to ma"e sure that the company will be able to full fill its loan and interest obligations out of cash accruals from the business .0hile appraising a proposal, the critical information furnished by the borrower is verified and the team also b. c. d. emphasi7es on the inter-firm and inter-industry comparisons. The team carries out the financial analysis on the basis of the companyIs audited balance sheets and income statement for the last three years. !esides the financial analysis, the following aspects are also e amined by the team5 The method of depreciation followed by the company and also whether the company has changed the method of depreciation in the past and, if so, e. f. g. the reason therefore. 1f the company has revalue any fi ed assets in the past and the present status of the revaluation reserve, if any created for the purpose. ,1!1> report of the borrower indicating any defaults made previously with any financial institution. The companyIs position regarding its ta assessment to understand

whether ade8uate provisions have been made to full fill its liabilities h. i. :. ". ii. related to ta in future. The purpose of the contingent liabilities &ending suits by or against the company and their implications on the financial status of the company (e.g. cases relating to sales ta , vat etc.) ,ritical @emar"s, if any, made by the statutory auditors on the accounts of the company. (ividend policy followed by the company. A detailed analysis of the financial ratios of the company.
56

iii. 1f

&roduction capacity in the past and pro:ected.

the ban" re8uires to ma"e an inter-firm comparison and other information.

The data can be sourced from directory published by the stoc" e change, financial :ournals, documents etc. Dmphasis is laid on following aspects5 i. ii. iii. iv. v. vi. vii. viii. i . . i. ii. ;inancial ratios analysis Dfficiency of the production facility and costs involved &erceptions regarding the capital mar"ets ,omparison of the units on the basis of mar"et share &attern of financing the company >evel of inventory and receivables Utili7ation of the current capacity &attern of ban" borrowings 4ar"et price of the product 6hare price of the stoc" showing -# wee" high and low Jield percentage (half yearly or yearly bas &rice-Darnings @atio

After the above appraisal, the sales team goes for a pre-sanction visit to the manufacturing concern. The team members have the main ob:ective of ensuring a higher degree of commitment from the promoters as the portion of e8uity which the promoters, their family members and friends propose to bring in should be brought as soon as possible. 2owever, ban" may give rela ation to the borrowers in this regard for genuine and acceptable reasons, but with a condition that the promoter should ma"e sure that he has an acceptable plan to meet his contribution. Ri&, ratin! -a&e% on 're%it profile rating of the applicant is done so as to understand the credit ris" e posure of the applicant. @ating is done on various parameters such as financial perspective, managerial perspective, industry outloo" etc. E2i&tin! 'har!e& on a&&et& of the 'ompany if the company has any charge on the assets with the previous ban"er, the report on such charge should be provided to the ban". !an" must as" for the report from the customer to understand the type of charge created. Fa'ility &tr 't re an% the term& of &an'tion< The general terms and conditions for the proposals are as follows5 i. >imit for each facility ii. Temporary overdrafts facility granted and interest rate on it
57

iii. 6ecurity - &rimary F 6econdary iv. =uarantee, if applicable v. 4argins-as applicable for each facility vi. 1nterest rate on the facility granted vii. ,ommission rate and other fees viii. ,oncessional facilities and value thereof i . Terms of repayment Re/ie$ of the propo&al< A detailed review of the proposal is then done in order to ensure that no important thing related to the assessment of the borrower has been missed out by the teams involved in the appraisal process. @eview of the proposal is done which covers the following aspects5 i. ii. iii. 6trengths and wea"nesses of the proposal. 'arious ris" factors associated with the proposal and steps to ensure their mitigation. (eviations seen from the general guidelines of the lending policy of the ban" and the reasons for the same are mentioned mentioned.

1.17 Propo&al for &an'tion A detailed proposal for the final sanction to the borrower is prepared with all the necessary information on it. The proposal contains the recommendations for sanctioning the limit to the borrower company. 1.1: A00E00MENT As the credit team carries out the credit appraisal process, after the detailed appraisal of the borrower firm on various aspects, the ne t step is to ma"e a comprehensive assessment of the proposal which involves review of the financial and managerial details of the borrower. ;ollowing are the ma:or highlights of the assessment process5 a) @eview of the draft proposal together with notes "ept for reference, the borrowerIs b) application, financial statements and other reports as e amined by the credit team member. c) &re sanction visit to the company is made to see the actual operations of the company. d) @eview of the financial statement analysis is done in order to ma"e sure that they comply with the policy of the ban" for lending purposes.
58

e) ;ollowing critical aspects of the e posure are also verified5 f) >ending policy of the ban" g) >ist of defaulters as published by the @!1 h) &rofile of the management of the company i) 1f there are any deviations in the proposal from the ban"Is policy, then :) ") l) m) n) o) the ?ustifications have to be provided by the credit team members. 1ndustry e posure =uidelines prescribed by the @!1 @ating of the borrower based on credit ris" profile @is" factors related to the industry outloo" =overnment regulations which have an impact on the industryM e.g. ban on financing of industries producing harmful gases responsible for o7one p) 8) r) s) layer depletion 1f itIs a case of ta"eover of account from previous ban" then, compliance @egarding transfer of borrower accounts. ,urrent status of the borrower as compared to other units of the industry. 1f any modifications are re8uired by the appraisal team to be made, such modifications should be provided with the sanction letter and :ustifications for the same have be made. t) @is" factors associated with the proposal and necessary steps ta"en to mitigate those ris"s. u) The appraiser then draws up the final proposal with the terms and condition sattached with the proposal. v) @ecommendation for sanction The terms and conditions of the appraisal arethen recaptured briefly to state the economic feasibility of the proposal. The appraisal team then understands the value of the companyIs affairs and the operations. ;inally the recommendations are granted for the re8uisite fund-base dor non-fund based credit facilities.

1.1; 0ANCTION As the credit team appraises the borrower on various aspects such as financial and managerial perspectives by analy7ing the data provided by the borrower company, if the proposal if found worth funding, the concerned sanctioning authority approves the proposal for final funding process. The sanctioning process involves the provision of the funds to the borrower. The account in the name of the client company is then opened by the operations team and funds are made available to the client. The sanction process involves the following aspects5
59

,ross verification of the proposal is done to chec" whether the proposal is presented in the detailed manner as re8uired by the ban". 2owever, if any important information has not been provided by the borrower to the ban" such as any necessary document regarding the property of the borrower, the proposal is given bac" to the credit team for the supply of the re8uired information. The appraisal team e amines the following aspects of the proposal by "eeping in mind the ban" lending policies5 (a)>ending policy of the ban" (b)>ist of defaulters as published by the @!1 (c)1f there are any deviations in the proposal from the ban"Is policy, then the (d) ?ustifications have to be provided by the credit team members. 1.1= PO0T 0ANCTION CRE)IT PROCE00 a* NEE) >ending decisions are made by the ban" on the basis critical appraisal and analy7ing the creditworthiness of the borrower. 2owever as a matter of fact, the credit appraisal team also "nows that past performance is not the guarantee of the future performance. 2owever, the past records provide a critical insight to understand the performance trend in future. Assessment of the creditworthiness of a prospective applicant is done on the basis of financial and industrial outloo" and also the promises made by the applicant. 3ne should "eep in mind that a loan granted may turn to a bad asset as the borrower did not carry his obligations as promised by him. 2ence, it is essential that a proper follow-up and supervision is done by the lending ban" on regular basis. A ban"er cannot compromise its funds in sufficiency of the security provided by the borrower against the loan. After the sanction, it is really necessary for every ban"er to ensure the following5 i. 2e has made a proper selection of the borrower

60

ii. iii. iv. v.

4a"e sure that the borrower complies with the terms and the conditions of the facility granted 4onitor the borrowerIs performance after the loan has been granted to him. 4a"e sure that the funds are utili7ed properly and are not lying idle in the account of the borrower ;inally ensure the security of the advances given to the borrower

1.1> 0TA.E0 OF PO0T 0ANCTION PROCE00 The post-sanction credit process is classified into three stages i.e. follow-up, supervision and monitoring, which together enables the ban"ers for effective credit management and maintaining high level of asset standards. 1t is very important on the part of the ban"er to ma"e sure that the funds given to the borrower are being effectively utili7ed by him and that the operations of the firm are in the interest of both the ban"er and the company. The ob:ectives of the three stages of post sanction process are detailed below A FOLLO(-BPi. The first stage of the post sanction process is the follow-up of the account of the borrower. ;ollow-up has the following two ob:ectives5 ii. Dnsuring the compliance with the terms and conditions of sanction on the regular basis. iii. Dnsuring performance safety and recoverability of assets. + 0BPER9I0IONi. After the follow-up, the ne t step is to supervise and continuous review of the operations of the borrower and the position of his account. 6upervision ii. iii. has following aspects5 Dnsuring effective follow up to maintain asset 8uality. Eeeping loo"-out for early warning signals..

C MONITORIN. 4onitoring of the accounts after they have been sanctioned is another important aspect of the credit appraisal post sanction process. 4onitoring of the accounts and the borrowers activities provide the ban"er
61

critical information on the performance of the operations of the company and also that whether the account has a probability of becoming N&A or not. 4onitoring has the following aspects5 i. ii. iii. Dnsuring effective supervision. 4onitoring customer satisfaction. Dnsuring 8uic" response to early warning signal

1.1? PROPO0AL FEA0I+ILITY 0TB)Y 0hen the ban" receives any proposal for funding, it analyses the proposal on various aspects to understand its feasibility. ;easibility of the proposal is necessary for the ban"s as profitability depends upon the sound appraisal of the pro:ect. a* Finan'ial Analy&i& financial analysis is the most important part of the credit appraisal process. The borrower has to provide audited financial statements to the ban"s for the previous three years and also the future pro:ections. The firm is then evaluated on several financial parameters li"e current ratio, profitability ratio, T3>$TN0 ratio, debtorsI turnover ratio, creditorsI turnover ratio, pro:ections regarding future cash flows, pro:ected balance sheets etc. The ban" accepts a pro:ect for funding only when the various ratios and parameters fall within the acceptable rangeland an increasing sales and profit trend is forecasted thereby -* Te'hni'al Analy&i& !esides the financial analysis, the proposal is also evaluated on the basis of technology, the "ind of plant and machinery used by the company, location of the site, the production capacity of the plant, manufacturing process used (whether the process is conventional process or a new technology is being used), the viability of the technology (whether it is going to be obsolete in a near future or not), if a foreign technology is being used, whether it is adapted to be consumed by local people and generate enough sales etc. '* Mana!erial Analy&i& Another parameter of the proposal feasibility analysis is the managerial analysis. A detailed managerial analysis is underta"en for the
62

reason that a firm may be financially and technically sound, but it may face problems if not run efficiently by the promoters. Therefore, critical evaluation of management is an essential part of appraisal procedure. Appraisal of the promoters is done on the basis of past financial statement, credit record, 8ualities of the management, the management problems faced by the firm with the ban" and also by personally visiting the firm and tal"ing to the debtors and employees of the entrepreneur etc.. %* Commer'ial Analy&i& 6ometimes a borrower comes to the ban" with a proposal for lending him funds for such a product which is not easy to mar"et. 1n order to have a proper appraisal of the demand forecast made by borrowers, the lending institutions re8uire following information regarding demand, supply, distribution, pricing F e ternal forces Apprai&al of the +orro$er Apart from appraising the pro:ect on financial, commercial, managerial and industrial aspects, the borrower is appraised on several other aspects. &oints to be "ept in mind while appraising the borrowings are as follows. i. Chara'ter 4of the -orro$er* -A good character can be the greatest asset for a borrower which can enable him to secure loans from the ban"s as his mar"et reputation would be sound. 1t is a critical ingredient that determines the granting of credit. 4en with bad character history cannot be trusted. The assessment of an individualIs character is done on the following basis5 a) Dducational bac"ground of the borrower b) 2ealth conditions, hard wor" capacity, energy c) =eneral reputation among social F business circles, ac8uaintances, associates, employees and creditors. d) &revious business records. e) !ehaviour and dealing with ban" and others. ii. Capa'ity< The credit appraisal team must ascertain the capacity of the borrower i.e. his ability and e perience to run the business in a profitable manner. The earning capacity of the borrower will depend on the efficient managerial capabilities and is the guiding factor for determining whether the ban" should lend or not. 3ther guiding factors are as following5 a) The e perience to run the business in a profitable manner.
63

b) &ast business results F income c) Technical e pertise of the borrower. d) (efaults if any made previously. iii. Capital5 The capital or financial strength of the borrower as measured by e8uity or net worth of the business should be en8uired into to assess the borrowerIs credit worthiness and ability to pay. 1n case of a new business, the sources of re8uired capital contribution must be easily identifiable. The borrower must not have utili7ed short term sources to finance long term i/. usage for the company. Collateral5 1t should be ensured by the ban" that the security made available by the borrower as collateral should be reasonable F its value should be sufficient to cover the advance. The borrowerIs title should be valid F transferable. 6ecurity is obtained as an insurance against any unforeseen contingencies. The security so offered by the borrower cannot turn a bad loan good but it can ma"e a good loan better. (ifferent ban"s have different norms as regards the re8uirement for collateral security. ;or e ample A is ban" re8uires the customer to offer %#) A of the e posure as collateral in case of overdraft and%))A of the e posure as collateral in case of cash credit. /. Con%ition< The borrower should meet all the terms and conditions of the lending ban". ;or e.g. A is ban" re8uires the customer to maintain around -)A of the amount of e posure as capital and unsecured loans ( #-A as capital and rest #-A of the amount as unsecured loans), to have T3>$TN0 ratio not more than . /i. E2perien'e-The borrower should have ade8uate e perience in the line of business or should have employed competent personnel for management of the business /ii. P rpo&e -1t should be ensured that the purpose of advance is acceptable to the ban" Fthe borrower has the capacity F ability to conduct his business affairs in a successful mannerF that he can be trusted for not misusing the facilities F divert the funds available in the business...

64

/iii.

F ant m of A%/an'e5 The amount of advance as"ed by the borrower needs to be carefully assessed to ensure the following5 a) The amount of finance together with other resources made available to the business is reasonable. b) The amount of finance granted by the ban" is need based F as per the actual re8uirements of the business. c) Ade8uate cushion is provided to meet the unforeseen contingencies on account of a possible escalation in the

CHAPTER-7 FBNCTIONAL ANALY0I0

This chapter describes all the functional analysis done by the researcher on the company on various departments .1t contains brief observation of the wor"ing of departments during the . wee"s of tenure . 7.1 MARDETIN. @esearcher have found that mar"eting at a is ban" is consumer centric , which means they treat their
65

customer as the "ing and provide them wid

best services according to their need and demands .@esearcher found the mar"eting strategies of a is ban" good as the sales team was well trained in oder to grab the right prospective. At A is !an" every morning !ranch head use to discuss sales made by each individual .accordingly their performance were measured at the end.The ,@4 at A is ban" were e cellent they handle the grievances of customer very patiently and they have customer care who manage all these problems .!efore selling their products to the customer they e plain each and every details to them and answer all their 8ueries .The ban" adopts a comprehensive approach to mar"et ris" management for its ban"ing boo" as well as trading boo" for both its domestic and overseas operations .They have a proper mar"et ris" management team which guided by well laid policies , guidelines, processes and systems for identification, measurement and reporting of e posures against various ris" limits set accordance with ris" appetite of the ban".@is" management policy and reports deviations, if any to the appropriate authorities as laid down in the policy 7.# FINANCE The !an" has registered robust growth in both businessand revenues. The total assets of the !an" as on+%st 4arch #)%+ were U+/),-*% crores, increasing%<.#+A over the year, with the total deposits of the .!an" rising %/.CCA to U#-#,*%/ crores and the total advances rising %*.)+A to U%<*,<** crores as on+%st 4arch #)%+. (uring the year, the total income of the !an" increased #+.)-A to U++,C+/ crores, while operating revenue increased #).*.A to U%*,#%C crores. The net profi t rose ##.)<A to U-,%C< cores from U/,#/# cores in the previous year The !an" continued to create shareholder value, as a result of which the diluted earnings per share for the year increased toU%%...- from U%)#.#) last year, while the boo" value per share increased to UC)C.-) from U--%.<< last year
i. (uring the year, the !an" raised additional e8uity capital through a

Kualify

1nstitutional &lacement (K1&) of +/,))),))) shares and a

preferential allotment of -,.+C,</- shares at a price of U%,+<).)) per share. As a conse8uence, the paid-up share capital of the !an" has
66

increased by U+<../ crores and the reserves of the !an" have increased by U-,/-C.C* crores after charging of issue related e penses. The funds mobilised from the e8uity raising (through and &referential issue) were utilised for enhancing the capital ade8uacy ratio and for general corporate purposes. ii. Total Assets grew #/A J3J to #,.<,+C+ crores Aggregate (eposits grew #%A J3J to #,##,*+% crores iii. Net Advances grew +)A J3J to %,C%,%/* crores a. >arge and 4id,orporate segment loans grew +#A J3J to <#,..C crores b. @etail Advances grew -)A J3J to /),-<% croresand constitutes#/A of advances iv. 6avings !an" (eposits grew #+A J3J to -#,CCC crores v. 6hare of demand deposits in total deposits stood at +<A vi. Net N&As at ).+%A similar to that of ?une #)%%. vii. At the end of ?une #)%#, boo" value per share was -.-./%, as compared to /.-.<. at the end of ?une #)%% viii. ,apital Ade8uacy ratio (,A@) stood at %+.)+A with Tier-%,A@ at <.)#A (withoutrec"oning K%;J%+ profit, as stipulated by @eserve !an" of 1ndia). 1ncluding K%;J%+ profits, total ,A@ F Tier-1 ,A@ would have been %+.-%A F <./<A respectively

7.1

OPERATION0 @esearcher found that the wor"ing of operational department is very systematic under the guiedance of operational head as she was a very dedicated employe of the a is ban". The !an" pursues an effective customer segmentation strategy, the success of which is reflected in the fact that 6avings !an" deposits grew at a ,ompounded Annual =rowth
67

@ate (,A=@) of #*.%+A over the last fi ve years. (uring the year, 6avings !an" deposits grew #+.//A to U*+,CC. crores from U-%,**. crores last year. 3n a daily average basis, 6avings !an" deposits grew #).#*A to U-#,#/+ crores 3n the +%st 4arch #)%+, retail term deposits grew #/.+CA year-on-year toU-<,-+% crores, constituting /#.+CA of totalterm deposits, compared to +C.#)A last year.The retail loans of the !an" grew/+.*#A to U-+,<*) crores as on +%st 4arch#)%+ from U+C,-C) crores last year 7.7 HBMAN RE0OBRCE 2uaman resource have been an "ey force area of the ban". !ecause they are the real and valuable assets to the ban" @esearcher found the relationship between the staff was well "nit they were very helpful to each other.and well coordinated.2r department put particular focus on grooming future leaders .by providing proper learnig and development to their employees.The ban" inculcate and live its motto GOne a2i& -an, Hone a2i&8.and foster a spirit of connectedness.A is ban" ensures that the compensation, in terms of structure and total amount, is in line with the best practices,as well as competitive vis-W-vis that of peer ban"s. Dstablish the lin"age of compensation with individual performance as well as achievement of the corporate ob:ectives of the !an". 1nclude a significant variable pay component tied to the achievement of pre-established ob:ectives in line with !an"Is scorecard while ensuring that the compensation is aligned with prudent ris" ta"ing. Dncourage attainment of long term shareholder returns through inclusion of e8uity lin"ed long-term incentives as part of compensation 7.: INFORMATION TECHNOLO.Y @esearcher found that 1T department of the ban" ensuring that management has an effective strategic planning process in place. All the business strategy is aligned with the 1T strategy. 1T organi7ational structure serves business re8uirements and direction. 6o that there is no stoppage in the wor". 3versight over implementation of processes and practices that ensures 1T delivers value to businesses. They monitor the method that management uses to determine the 1T resources needed to
68

achieve strategic goals and provide high-level direction for sourcing and use of 1T resources. Dnsure proper balance of 1T investments for sustaining the !an"Is growth. Assess e posure to 1T ris"s and its controls and evaluating effectiveness of managementIs monitoring of 1Tris"s.Assessing managementIs performance in implementing 1T strategies. Assessing if 1T architecture has been designed to derive ma imum business value. @eviewing 1T performance measurement and contribution to businesses. Approving capital and revenue e penditure in respect of 1T procurements rate of interest etc.

CHAPTER- : 0BMMARY AN) CONCLB0ION

A FIN)IN.0 ON FBNCTIONAL ANALY0I0 :.1 MARDETIN. @esearcher have found that mar"eting at a is ban" is consumer centric , which means they treat their customer as the "ing and provide them with best services according to their need and demands. @esearcher found the mar"eting strategies of a is ban" good as the sales team was well trained in odder to grab the right prospective. The ,@4 at A is ban" were e cellent they handle the grievances of customer very patiently and they have customer care who manage all these problems. !efore selling their

69

products to the customer they e plain each and every details to them and answer all their 8ueries :.1# FINANCE The !an" has registered robust growth in both business and revenues. The total assets of the !an" as on+%st 4arch #)%+ were U+/),-*% crores, increasing%<.#+A over the year, with the total deposits of the .!an" rising %/.CCA to U#-#,*%/ crores and the total advances rising %*.)+A to U%<*,<** crores as on+%st 4arch #)%+. (uring the year, the total income of the !an" increased #+.)-A to U++,C+/ crores, while operating revenue increased #).*.A to U%*,#%C crores. The net profi t rose ##.)<A to U-,%C< crores from U/,#/# crores in the previous year :.11 OPERATION0 The ban" have placed (3@4) operational ris" management to manage operational ris". 3perational of the ban"s are categorised as Treasury management , 4erchant ban"ing and capital mar"ets , @etail financial services ,,orporate and institutional ban"ing ,@etail ban"ing, 1nternational ban"ing and Advances. The ban" adopts a comprehensive approach to mar"et ris" management for its ban"ing boo" as well as trading boo" for both its domestic and overseas operations :.17 HBMAN RE0OBRCE The researcher found that in A is ban" human resource is treated as the assets of the ban" and the ban" wor" on the overall development of the employees. The performance appraisal is based on the establishment of lin"age of compensation with individual performance as well as achievement of the corporate ob:ective of ban". &erformance various financial and non financial methods of motivation :.1: INFORMATION TECHNOLO.Y @esearcher found that 1T department of the ban" ensuring that management has an effective strategic planning process in place. All the
70

of the

employees are based on balance score card approach. !an" also adopts

business strategy is aligned with the 1T strategy. 1T organi7ational structure serves business re8uirements and direction.so that there is no stoppage in the wor"

)ATA ANALY0I0 :.# FIN)IN.0 ON CRE)IT APPRAI0AL i. @esearcher found that ,redit appraisal procedure is a comple process which re8uires high level of integrity and 8uality so as to ma"e sure that ban"s are not e posed to high level of credit ris" resulting in losses to ii. the ban". critical for the ban"s to ma"e informed lending decisions to ma"e sure that the appraisal procedure is viable and its feasibility would result in iii. the profits for ban"s. 1ndividual borrowers and firms ma"e a loan application to the ban" in order to procure credit for their own purposes. !an" has to understand both the categories of borrowers on various aspects such as financial perspective, managerial perspective, industry outloo", past performance iv. etc before ma"ing any decision for granting credit to them. ,redit granting and loan funding are the core activities of the ban"s and also an importantsource of earning for ban"s. 6ound credit appraisal ensures high level of integrity and thus the sustainability of the ban"Is v. earnings. The credit appraisal process at A is ban" starts with the sales team which sources theapplication for funding from the prospective clients. The team is responsible for collecting necessary documents from the vi. client. The credit team is engaged in the appraisal of credit ris" associated with the businessconcern. 1t analyses the borrower on various aspects such as vii. financial, managerial,industrial etc. Analysis of credit ris" e posure is critical to the ban" so as to understand the viability of the proposal- whether it will generate profits for the ban" or not.

71

viii.

The financial analysis of the borrower involves the analysis of audited balance sheets andincome statements for previous three years. @atio analysis is another critical area of thisaspect. 1t is necessary for the teams involved in the appraisal procedure to strictly follow thelending policy and guidelines of the ban", however sometimes they refrain from this. The main function of the ban" is to provide finance to the borrowers but it appears thatthe norms are ta"en only as guidelines and not as sole decision-ma"ing criteria.

i .

:.1 .AP0 IN THE APPRAI0AL PROCE00 0hile understanding the credit appraisal process at the ban", several gaps in the funding processwere observed by the researcher . These gaps are summari7ed as follow5 i. !an" is strictly re8uired to appraise the financial performance of the borrower concern based on the audited balance sheets and the income statement of previous + years.2owever, there was also a practice of appraising the un-audited financial statements of the borrower. This might result in the high e posure of credit ris" for the ban". ii. There is a huge communication gap between the teams involved in the appraisal procedure. The sales team is re8uired to submit all the necessary documents to the creditteam for further appraisal. 2owever if the credit team finds any incomplete or unfurnished document, it hardly cares about intimating the sales team for the same. Thisresults in delay of the proposal appraisal. iii. The credit team sometimes "eeps the proposal idle and do not carry out the necessaryappraisal of it. As a result of the delay in the approval of the proposal, the customer has toma"e complains to the concerned authority.
72

iv.

The sanctioning authority sometimes approves the proposal even if the necessarydocuments are incomplete sub:ect to condition that the documents will be provided by the borrower as soon as possible. 2owever this is against the policy guidelines of the ban".

v.

The sales team visits the mar"et for sourcing application is sometimes well ac8uaintedwith the prospective client. 1t might give undue advantage to some clients on variousaspects such as fast approval of the proposal, lesser rate of interest etc.

vi.

The ban" procures the valuation report of assets given as collateral by the borrower from its empanelled values. The empanelled values are sometimes well "nown to the client and therefore they might overvalue the property of the borrower and misrepresent certain important facts critical to appraisal. This leads to poor appraisal.

vii. The norms of the ban" for providing loans are not stringent, i.e. even if a

particular client is not having the favorable estimated and financial performance, based on its past record and future growth perspective, the loan is still provided.
viii.

6everal non schematic loans are also being given by the ban" to the borrowing concerns which do not fall under any category of loan guideline. This is done so as to attain a greater mar"et share and fight tough competition.

ix.

6everal covenants are attached to the final proposal which is incomplete in various aspects and loan is disbursed to the borrower based on mutual understandings. This might lead to high credit ris" e posure to the ban"

:.7 LE00ON LEARNT The e perience at A is ban" is informative. The researcher has gone through a practical e perience of the concepts that had been taught in the lectures. The researcher found the manager, employees and wor"ers co-operative. All the re8uired information is provided to the researcher on proper time.

73

The researcher has gained the practical "nowledge about the all functional department at A is !an". The attendance of the employees are recorded on daily basis through biometric machine which is connected to the system in which the details are entered .on the daily basis the details of the attendance are ta"en out from the system and reported to 2@ manager. At the time training, the researcher learnt all the operations performed in the ban"( (( cancellation , customer handeling ,products offered etc ) with the guidance of operational heade of the ban".. 3n training, researcher learnt to procedures followed to open a accounts of the customers , services to be offered to them .The other miscellaneous wor" li"e cash handling , procedure to issue debit card , maintaing cutomer relation etc in the ban"

:.:

0B..E0TION0 i. The !an" has registered robust growth in both business and revenues. ii. ,@4 aims at focusing all the organi7ational activities towards creating and maintaining a customer. ,@4 is a new techni8ue in mar"eting where the mar"eter tries to develop long term collaborative relationship with customers to develop them as life time customers. iii. The sanctioning authority must ma"e sure that the policy guidelines regarding the lendingdecisions are being followed in an integrated manner. iv. 3nly the audited financial statements should be procured by the sales team and forwardedto the credit team for the financial appraisal. 1t should be made strictly mandatory toreceive only ca certified financial statements. v. The appraisal team should only appraise the proposal if the documents are fully furnishedand complete in all aspects. This would ensure +*) degree appraisal of the client onvarious parameters in a timely and integrated manner. vi. 3nly scheme guidelines should be followed and non schematic loans should not be givenuntil the appraisal of the proposal fully satisfies the
74

sanctioning authority on various parameters such as financial viability of the proposal, managerial and technicalsustainability etc. vii. The sales team must ma"e sure that the applications sourced from the mar"et areunbiased and free from any unwanted influence. No personal benefits should be given tothe borrower on the sta"e of the ban" profitability. viii. To ensure the integrity and 8uality of the whole appraisal process, the lending policy guidelines should only be followed by the teams involved in the process.

+I+LIO.RAPHY ;ollowing sources were used that helped in completion of this pro:ect report5 A. i. +oo,& An% Mann al ,hattopadhyay, Eamal #)%%. Understanding ,redit Appraisal in !an"s, !imal Eumar Academic &ublishers &g #)-*. =olin, ?onathan 1. #)).. The !an" ,redit Appraisal 2andboo"5 for analysts, ban"ers and investors, University of 3 ford &ress &g #)%- +)) ,arroll, 6amuel #)%%, @atios in !an" ,redit Analysis &g --* -C.%

ii.

iii.

+. (e-&ite& i. ii. iii. http5$$www.a isban".com on %+.C.#)%+ http5$$www.wi"ipedia.org$abouta isban" on #).C.#)%+ http5$$www.e8uitip7.com$#)%)$)/$what-is-cibil-credit-information-report-circredit-information-bureau-of-india-limited.html on #+.*.#)%+
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iv.

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v. vi. vii. viii.

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