Arijeet Anand Project PDF

CHAPTER- 1
INTRODUCTION
Arijeet Anand (4108026026) Indian Institute of Finance

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AXIS BANK LTD.
ABOUT THE COMPANY
Axis Bank was the first of the new private banks to have begun operations in 1994, after the
Government of India allowed new private banks to be established. The Bank was promoted
jointly by the Administrator of the specified undertaking of the Unit Trust of India (UTI - I),
Life Insurance Corporation of India (LIC) and General Insurance Corporation of India (GIC)
and other four PSU insurance companies, i.e. National Insurance Company Ltd., The New
India Assurance Company Ltd., The Oriental Insurance Company Ltd. and United India
Insurance Company Ltd.
The Bank's Registered Office is at Ahmedabad and its Central Office is located at Mumbai.
Presently, the Bank has a very wide network of more than 729 branch offices and Extension
Counters. The Bank has a network of over 3171 ATMs providing 24 hrs a day banking
convenience to its customers. This is one of the largest ATM networks in the country.
The Bank has strengths in both retail and corporate banking and is committed to adopting the
best industry practices internationally in order to achieve excellence.
Axis Bank Limited provides a suite of corporate and retail banking products. The Company
operates in different segments: Treasury, Corporate/Wholesale Banking, Retail Banking and
Other Banking Business. The Treasury segment includes investments in sovereign and
corporate debt, equity and mutual funds, trading operations, derivative trading and foreign
exchange operations on the account and for customers and central funding. The Retail Banking
segment constitutes lending to individual/small business subject to the orientation, product and
granularity criterion. Retail Banking activities also include liability produc ts, card services,
Internet banking and depository. The Corporate/Wholesale Banking includes corporate
relationships not included under Retail Banking, corporate advisory services, placements and
syndication, management of public issue, project appraisals, capital market related services and
cash management services.

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Quick Financial Synopsis
BRIEF: For the fiscal year ended 31 March 2009, Axis Bank Ltd.'s interest income increased
55% to RS108.29B. Net interest income after LLP increased 30% to RS29.48B. Net income
increased 71% to RS18.13B. Revenues reflect higher income from investments, an increase in
income from interest on bills/advances, partially offset by higher provision for non-performing
advances. Net income also reflects an increase in other income.
Axis Bank was formed as UTI when it was incorporated in 1994 when Government of India
allowed private players in the banking sector. The bank was sponsored together by the
administrator of the specified undertaking of the Unit Trust of India, Life Insurance
Corporation of India (LIC) and General Insurance Corporation ltd. and its subsidiaries namely
National insurance company ltd., the New India Assurance Company, the Oriental Insurance
Corporation and United Insurance Company Ltd. However, the name o f UTI was changed
because of the disagreement on terms and conditions of the bank authority over certain
stipulations including royalty charged over the name from UTI AMC. The bank also wanted to
have a new name from its pan-Indian as well as international business perspective. So from
July 30, 2007 onwards the UTI bank was named as Axis Bank.
Set up with a capital of Rs. 115 crore- with UTI contributing Rs. 100 crore, LIC contributing
Rs. 7.5 crore and GIC and its four subsidiaries contributing Rs. 1.5 crores, the bank came in
operation with its first registered office at Ahmedabad . Today, Axis Bank has more than 726
branch offices and Extension Counters spread over 341 cities, towns and villages of the
country. Presently, the authorized share capital of Axis Bank is Rs. 300 Crores and the paid up
share capital is Rs. 232.86 Crores. The Axis bank is currently capitalized with Rs. 282.65
Crores with a public holding of 57.05% apart from the promoters. The FY2009 shows a net
profit of Rs. 500.86 crore up by 63.24% yoy over the Net Profit of Rs. 306.83 crores for the
thirdquarter.

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Corporate Facilities
Cash Credit
Working Capital Demand Loan
Export Finance
Short Term Loan
Term Loan
Clean Bill Discounting
LC Backed Bill Discounting
Co-Acceptance of Bills
Credit Facilities against Guarantee or Stand By Letter of Credit issued by Foreign
Banks
Letter of Credit
Bank Guarantee
Solvency Certificates
Personal Facilities
Home Loans
Personal Loans
Car Loan
Zero Balance Savings Account
VBV - Online purchases using Credit Card
VBV / MSC - Online purchases using Debit Card
Mobile Banking
NRI Account
Study Loans
Mohur Gold
Easy Savings Account

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BANKS IN INDIA
India has a well developed banking system. Most of the banks in India were founded by Indian
entrepreneurs and visionaries in the pre- independence era to provide financial assistance to
traders, agriculturists and budding Indian industrialists. The origin of banking in India can be
traced back to the last decades of the 18th century. The General Bank of India and the Bank of
Hindustan, which started in 1786 were the first banks in India. Both the banks are now defunct.
The oldest bank in existence in India at the moment is the State Bank of India. The State Bank
of India came into existence in 1806. At that time it was known as the Bank of Calcutta. SBI is
presently the largest commercial bank in the country.
The role of central banking in India is looked by the Reserve Bank of India, which in 1935
formally took over these responsibilities from the then Imperial Bank of India. Reserve Bank
was nationalized in 1947 and was given broader powers. In 1969, 14 largest commercial banks
were nationalized followed by six next largest in 1980. But with adoption of economic
liberalization in 1991, private banking was again allowed.
The commercial banking structure in India consists of: Scheduled Commercial Banks and
Unscheduled Banks. Scheduled commercial Banks constitute those banks, which have been
included in the Second Schedule of Reserve Bank of India (RBI) Act, 1934. RBI includes only
those banks in this schedule, which satisfy the criteria laid down vide section 42 (6) (a) of the
Act.
Indian banks can be broadly classified into public sector banks (those banks in which the
Government of India holds a stake), private banks (government do not have a stake in these
banks; they may be publicly listed and traded on stock exchanges) and foreign banks.

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PRIVATE BANK IN INDIA
Initially all the banks in India were private banks, which were founded in the pre- independence
era to cater to the banking needs of the people. In 1921, three major banks i.e. Banks of
Bengal, Bank of Bombay, and Bank of Madras, merged to form Imperial Ba nk of India. In
1935, the Reserve Bank of India (RBI) was established and it took over the central banking
responsibilities from the Imperial Bank of India, transferring commercial banking functions
completely to IBI. In 1955, after the declaration of first-five year plan, Imperial Bank of India
was subsequently transformed into State Bank of India (SBI).
Following this, occurred the nationalization of major banks in India on 19 July 1969. The
Government of India issued an ordinance and nationalized the 14 largest commercial banks of
India, including Punjab National Bank (PNB), Allahabad Bank, Canara Bank, Central Bank of
India, etc. Thus, public sector banks revived to take up leading role in the banking structure. In
1980, the GOI nationalized 6 more commercial banks, with control over 91% of banking
business of India.
In 1994, the Reserve Bank Of India issued a policy of liberalization to license limited number
of private banks, which came to be known as New Generation tech-savvy banks. Global Trust
Bank was, thus, the first private bank after liberalization; it was later amalgamated with
Oriental Bank of Commerce (OBC). Then Housing Development Finance Corporation Limited
(HDFC) became the first (still existing) to receive an 'in principle' approval from the Reserve
Bank of India (RBI) to set up a bank in the private sector.
At present, Private Banks in India include leading banks like ICICI Banks, ING Vysya Bank,
Jammu & Kashmir Bank, Karnataka Bank, Kotak Mahindra Bank, SBI Commercial and
International Bank, etc. Undoubtedly, being tech-savvy and full of expertise, private banks
have played a major role in the development of Indian banking industry. They have made
banking more efficient and customer friendly. In the process they have jolted public sector
banks out of complacency and forced them to become more competitive.

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Company History - Axis Bank
1993
- The Bank was incorporated on 3rd December and Certificate of business on 14th December.
The Bank transacts banking business of all description. UTI Bank Ltd. was promoted by Unit
Trust of India, Life Insurance Corporation of India, General Insurance Corporation of India
and its four subsidiaries.
- The bank was the first private sector bank to get a license under the new guidelines issued
by the RBI.
1997
- The Bank obtained license to act as Depository Participant with NSDL and applied for
registration with SEBI to act as `Trustee to Debenture Holders'.
- Rupees 100 crores was contributed by UTI, the rest from LIC Rs 7.5 crores, GIC and its four
subsidiaries Rs 1.5 crores each.
1998
- The Bank has 28 branches in urban and semi urban areas as on 31 st July. All the branches are
fully computerized and networked through VSAT. ATM services are available in 27 branches.
- The Bank came out with a public issue of 1,50,00,000 No. of equity shares of Rs 10 each at a
premium of Rs 11 per share aggregating to Rs 31.50 crores and Offer for sale of 2,00,00,000
No. of equity shares for cash at a price of Rs 21 per share. Out of the public issue 2,20,000
shares were reserved for allotment on preferential basis to employees of UTI Bank. Balance of
3,47,80,000 shares were offered to the public.
- The company offers ATM cards, using which account-holders can withdraw money from
any of the bank's ATMs across the country which are inter-connected by VSAT.

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- UTI Bank has launched a new retail product with operational flexibility for its customers.
- UTI Bank will sign a co-brand agreement with the market, leader, Citibank NA for entering
into the highly promising credit card business.
- UTI Bank promoted by India's pioneer mutual fund Unit Trust of India along with LIC, GIC
and its four subsidiaries.
1999
- UTI Bank and Citibank have launched an international co-branded credit card.
- UTI Bank and Citibank have come together to launch an international co-branded credit
card under the MasterCard umbrella.
- UTI Bank Ltd has inaugurated an off site ATM at Ashok Nagar here taking the total number
of its offsite ATMs to 13.m
2000
- The Bank has announced the launch of Tele-Depository Services for its depository clients.
- UTI Bank has launch of `iConnect', its Internet banking Product.
- UTI Bank has signed a memorandum of understanding with equitymaster.com for e-broking
activities of the site.
- Infinity.com financial Securities Ltd., an e-broking outfit is typing up with UTI Bank for a
banking interface.
- Geojit Securities Ltd, the first company to start online trading services, has signed a MoU
with UTI Bank to enable investors to buy\sell demat stocks through the company's website.
- Indiabulls has signed a memorandum of understanding with UTI Bank.

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- UTI Bank has entered into an agreement with Stock Holding Corporation of India for
providing loans against shares to SCHCIL's customers and funding investors in public and
rights issues.
- ICRA has upgraded the rating og UTI Bank's Rs 500-crore certificate of deposit programme
to A1+.
- UTI Bank has tied up with L&T Trade.com for providing customized online trading solution
for brokers.
2001
- UTI Bank launched a private placement of non-convertible debentures to raise up to Rs 75

crore.
- UTI Bank has opened two offsite ATMs and one extension counter with an ATM in
Mangalore, taking its total number of ATMs across the country to 355.
- UTI Bank has recorded a 62 per cent rise in net profit for the quarter ended September 30,
2001, at Rs 30.95 crore. For the second quarter ended September 30, 2000, the net profit was
Rs 19.08 crore. The total income of the bank during the quarter was up 53 per cent at Rs
366.25 crore.
2002
- UTI Bank Ltd has informed BSE that Shri B R Barwale has resigned as a Director of the
Bank w.e.f. January 02, 2002. A C Shah, former chairman of Bank of Baroda, also retired from
the bank‘s board in the third quarter of last year. His place continues to be vacant.
M. Damodaran took over as the director of the board after taking in the reins of UTI. B S
Pandit has also joined the bank‘s board subsequent to the retirement of K G Vassal.

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- UTI Bank Ltd has informed that Shri Paul Fletcher has been appointed as an Additional
Director Nominee of CDC Financial Service (Mauritius) Ltd of the Bank.And Shri Donald
Peck has been appointed as an Additional Director (nominee of South Asia Regional Fund) of
the Bank.
- UTI Bank Ltd has informed that on laying down the office of Chairman of LIC on being
appointed as Chairman of SEBI, Shri G N Bajpai, Nominee Director of LIC has resigned as a
Director of the Bank
- B Paranjpe & Abid Hussain cease to be the Directors of UTI Bank.
- UTI Bank Ltd has informed that in the meeting of the Board of Directors following decisions
were taken: Mr Yash Mahajan, Vice Chairman and Managing Director of Punjab Tractors Ltd
was appointed as an Additional Director with immediate effect. Mr N C Singhal former Vice
Chairman and Managing Director of SCICI was appointed as an Additional Director with
immediate effect.
-ABN Amro, UTI Bank in pact to share ATMs.
-UTI Bank Ltd has informed BSE that a meeting of the Board of Directors of the Bank is
scheduled to be held on October 24, 2002 to consider and take on record the unaudited half
yearly/quarterly financial results of the Bank for the half year/Quarter ended September 30,
2002.
-UTI Bank Ltd has informed that Shri J M Trivedi has been appointed as an alternate director
to Shri Donald Peck with effect from November 2, 2002.
2003
-UTI Bank Ltd has informed BSE that at the meeting of the Board of Directors of the
company held on January 16, 2003, Shri R N Bharadwaj, Managing Director of LIC has been
appointed as an Additional Director of the Bank with immediate effect.

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- UTI Bank, the private sector bank has opeaned a branch at Nellore. The bank's Chairman and
Managing Director, Dr P.J. Nayak, inaugurating the bank branch at GT Road on May 26.
Speaking on the occasion, Dr Nayak said, This marks another step towards the extensive
customer banking focus that we are providing across the country and reinforces our
commitment to bring superior banking services, marked by convenience and closeness to
customers.
-UTI Bank Ltd. has informed the Exchange that at its meeting held on June 25, 2003 the BOD
have decided the following:
1) To appoint Mr. A T Pannir Selvam, former CMD of Union Bank of India and Prof. Jayanth
Varma of the Indian Institute of Management, Ahmedabad as additional directors of the Bank
with immediate effect. Further, Mr. Pannir Selvam will be the nominee director of the
Administrator of the specified undertaking of the Unit Trust of India (UTI-I) and Mr. Jayanth
Varma will be an Independent Director.
2) To issue Non-Convertible Unsecured Redeemable Debentures upto Rs.100 crore, in one or

more tranches as the Bank's Tier - II capital.
-UTI has been authorised to launch 16 ATMs on the Western Railway Stations of Mumbai
Division.
-UTI filed suit against financial institutions IFCI Ltd in the debt recovery tribunal at Mumbai
to recover Rs.85cr in dues.
-UTI bank made an entry to the Food Credit Programme, it has made an entry into the 59
cluster which includes private sector, public sector, old private sector and co-operative banks.
-Shri Ajeet Prasad, Nminee of UTI has resigned as the director of the bank.
-Banks Chairman and MD Dr.P.J.Nayak inaugurated a new branch at Nellore.
-UTI bank allots shares under Employee Stock Option Scheme to its employees.
-Unveils pre-paid travel card 'Visa Electron Travel Currency Card'
-Allotment of 58923 equity shares of Rs 10 each under ESOP.
-UTI Bank ties up with UK govt fund for contract farming

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-Shri B S Pandit, nominee of the Administrator of the Specified Undertaking of the Unit Trust
of India (UTI-I) has resigned as a director from the Bank wef November 12, 2003.
-UTI Bank unveils new ATM in Sikkim
2004
-Comes out with Rs. 500 mn Unsecured Redeemable Non-Convertible Debenture Issue, issue
fully subscribed
-UTI Bank Ltd has informed that Shri Ajeet Prasad, Nominee of the Administrator of the
Specified Undertaking of the Unit Trust of India (UTI - I) has been appointed as an Additional
Director of the Bank w.e.f. January 20, 2004.
-UTI Bank opens new branch in Udupi
-UTI Bank, Geojit in pact for trading platform in Qatar
-UTI Bank ties up with Shriram Group Cos
-Unveils premium payment facility through ATMs applicable to LIC & UTI Bank customers
-Metaljunction (MJ)- the online trading and procurement joint venture of Tata Steel and Steel
Authority of India (SAIL)- has roped in UTI Bank to start off own equipment for Tata Steel.
-DIEBOLD Systems Private Ltd, a wholly owned subsidiary of Diebold Incorporated, has
secured a major contract for the supply of ATMs and services to UTI Bank
-HSBC completes acquisition of 14.6% stake in UTI Bank for .6 m
-UTI Bank installs ATM in Thiruvananthapuram
-Launches `Remittance Card' in association with Remit2India, a Web site offering money-
transfer services

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2005
- UTI Bank enters into a bancassurance partnership with Bajaj Allianz General for selling
general insurance products through its branch network.
-UTI Bank launches its first Satellite Retail Assets Centre (SRAC) in Karnataka at Mangalore.
2006
-UBL sets up branch in Jaipur
-UTI Bank unveils priority banking lounge

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Mission of the organization:
Axis Bank aims to be one of the leading banks running across the globe. This does not just
mean being the largest or the most productive company in the market, rather it is a
combination of several things like-
1) Customer service of the highest order.

2) Value of money for customers.
3) Professionalism in carrying out business.
4) Innovative products to cater to different needs of different customers.
5) Use of technology to improve service standards.
6) Increasing market share.
7) Customer Service and Product Innovation tuned to diverse needs of individual and
corporate clientele.
8) Continuous technology upgradation while maintaining human values.
9) Progressive globalization and achieving international standards.
10) Efficiency and effectiveness built on ethical practices.
Core Values
Customer Satisfaction through
o Providing quality service effectively and efficiently
o "Smile, it enhances your face value" is a service quality stressed on
o Periodic Customer Service Audits
Maximisation of Stakeholder value
Success through Teamwork, Integrity and People

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BRAND VISION AND STRATEGY
AXIS BANK is pursuing a Brand strategy to build one of the finest financial brands in India.
BANK believes that differentiation begins with its service and trust mark embedded in ‗AXIS‘,
which represents the Bank‘s fundamental goal of being a highly service-oriented Financial
Institution. The endeavour at AXIS BANK is to provide an unprecedented Delightful Banking
Experience to all its customers.
The name AXIS signifies -
The essence of the brand completely by conveying all the values and characteristics -
Attractive, Smart, Simple, Serious, Reliable, Trustworthy, Optimistic, Positive,
Efficient, Universal
Clutter breaking in the banking environment, and affirmative with target clients across
business and market segments
Brand Vision and Commitment

To be recognised as the WORLD’s BEST QUALITY BANK IN INDIA
To provide a Delightful Banking Experience to all its customers
To be a long term partner with all stakeholders particularly customers by
creating & sharing value
To be a solid and trusted financial trust mark backed by two professional
promoters and an exceptional management team

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Brand Pillars
The AXIS BANK brand is being built around 5 Key Brand Pillars, which epitomise
the growing strengths of the Bank. All communication and advertising has been
created around these key Brand Pillars
Growth - AXIS BANK's core promise is growth, for it's internal and external
stakeholders.
Trust - BANK's Promoters, Investors and Top Management team, are all of the
highest pedigree with a demonstrated track record, thus inspiring and establishing
a Trust Mark.
Knowledge Driven Human Capital - AXIS BANK has adopted a knowledge

driven entrepreneurial approach to Banking and offers Financial Solutions
beyond the traditional realm of banking.
AXIS BANK's top quality Human Capital represents the finest talents in Indian
banking mobilised from India and abroad.
Technology - AXIS BANK is establishing the highest standards in customer

service by adopting cutting-edge Innovative Technology. The only thing constant
about AXIS BANK's Technology is Evolution.
Transparency & Responsible Banking - AXIS BANK holds Transparency and

Accountability above all else. The Bank has established the most stringent
Corporate Governance norms, and is also committed to Responsible Banking by
focusing on Sustainability and Social Responsibility.

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STORY OF COMPANY’S SUCCESS IN THE RECENT PAST
The Strongest Indian Bank and 5th in Asia Pacific 2008-09: Asian Banker 300.
Best Private Sector Bank 2008: NDTV Profit Business Leadership Award 2008.
Best Debt House in India: Euro money 2008.
Best Bond House in India: Finance Asia 2008.
Best Domestic Debt House in India: Asia Money 2008.
International Presence:
Branches at Singapore, Hong Kong and Dubai.

Representative‘s office at Shanghai and Dubai.
Total assets overseas amounted to US $ 2.30 bn. As compared to US $ 1.66 bn. as at
the end of March ‘08, a growth of 39% yoy.
Performance Highlights (FY 09):
Net Profit - Inc. 69% yoy (581 cr.)

Net Income Interest - Inc. 43% yoy (3686 cr.)
Fee Income - Inc. 64% yoy (2447 cr.)
Operating Revenue - Inc. 50% yoy (1878 cr.)
Operating Profit - Inc. 67% yoy (972 cr.)

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MILE STONES:
Axis Bank launches Platinum Credit Card, India's first EMV chip based card :
March 2008.
Axis Bank gets AAA National Long- Term Rating from Fitch Ratings: Dec. 2007.
Axis Bank ties up with Banque Privée Edmond de Rothschild Europe for Wealth
Management: Sept. 2007.
UTI Bank re-brands itself as Axis Bank: July 2007.
UTI Bank successfully raises USD 1050 million: July 2007.
UTI Bank ties up with IIFCL to provide finance for infrastructural projects in the
country: March 2007.
Finance Minister Shri P. Chidambaram Launches Shriram - UTI Bank Co - Branded
Credit Card Exclusively For Small Road Transport Operators (SRTOS): Feb. 2007.

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History of Banking in India
Without a sound and effective banking system in India it cannot have a healthy economy. The
banking system of India should not only be hassle free but it should be able to meet new
challenges posed by the technology and any other external and internal factors.
For the past three decades India's banking system has several outstanding achievements to its
credit. The most striking is its extensive reach. It is no longer confined to only metropolitans
or cosmopolitans in India. In fact, Indian banking system has reached even to the remote
corners of the country. This is one of the main reason of India's growth process.
The government's regular policy for Indian bank since 1969 has paid rich dividends with the
nationalisation of 14 major private banks of India.
Not long ago, an account holder had to wait for hours at the bank counters for getting a draft
or for withdrawing his own money. Today, he has a choice. Gone are days when the most
efficient bank transferred money from one branch to other in two days. Now it is simple as
instant messaging or dial a pizza. Money has become the order of the day.
The first bank in India, though conservative, was established in 1786. From 1786 till today,
the journey of Indian Banking System can be segregated into three distinct phases. They are
as mentioned below:
Early phase from 1786 to 1969 of Indian Banks

Nationalisation of Indian Banks and up to 1991 prior to Indian banking sector
Reforms.
New phase of Indian Banking System with the advent of Indian Financial & Banking
Sector Reforms after 1991.
To make this write- up more explanatory, I prefix the scenario as Phase 1, Phase 2 & Phase 3.

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Phase 1.
The General Bank of India was set up in the year 1786. Next came Bank of Hindustan and
Bengal Bank. The East India Company established Bank of Bengal (1809), Bank of Bombay
(1840) and Bank of Madras (1843) as independent units and called it Presidency Banks.
These three banks were amalgamated in 1920 and Imperial Bank of India was established
which started as private shareholders banks, mostly Europeans shareholders.
In 1865 Allahabad Bank was established and first time exclusively by Indians, Punjab
National Bank Ltd. was set up in 1894 with headquarters at Lahore. Between 1906 and 1913,
Bank of India, Central Bank of India, Bank of Baroda, Canara Bank, Indian Bank, and Bank
of Mysore were set up. Reserve Bank of India came in 1935.
During the first phase the growth was very slow and banks also experienced periodic failures
between 1913 and 1948. There were approximately 1100 banks, mostly small. To streamline
the functioning and activities of commercial banks, the Government of India came up with
The Banking Companies Act, 1949 which was later changed to Banking Regulation Act 1949
as per amending Act of 1965 (Act No. 23 of 1965). Reserve Bank of India was vested with
extensive powers for the supervision of banking in India as the Central Banking Authority.
During those days public has lesser confidence in the banks. As an aftermath deposit
mobilisation was slow. Abreast of it the savings bank facility provided by the Postal
department was comparatively safer. Moreover, funds were largely given to traders.

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Phase2.
Government took major steps in this Indian Banking Sector Reform after independence. In
1955, it nationalised Imperial Bank of India with extensive banking facilities on a large scale
specially in rural and semi- urban areas. It formed State Bank of India to act as the principal
agent of RBI and to handle banking transactions of the Union and State Governments all o ver
thecountry.
Seven banks forming subsidiary of State Bank of India was nationalised in 1960 on 19th July,
1969, major process of nationalisation was carried out. It was the effort of the then Prime
Minister of India, Mrs. Indira Gandhi. 14 major commercial banks in the country was
nationalised.
Second phase of nationalisation Indian Bank ing Sector Reform was carried out in 1980 with
seven more banks. This step brought 80% of the banking segment in India under Government
ownership.
The following are the steps taken by the Government of India to Regulate Banking
Institutions in the Country:
1949: Enactment of Banking Regulation Act.

1955: Nationalisation of State Bank of India.
1959: Nationalisation of SBI subsidiaries.
1961: Insurance cover extended to deposits.
1969: Nationalisation of 14 major banks.
1971: Creation of credit guarantee corporation.
1975: Creation of regional rural banks.
1980: Nationalisation of seven banks with deposits over 200 crore.
After the nationalisation of banks, the branches of the public sector bank India rose to
approximately 800% in deposits and advances took a huge jump by 11,000%.
Banking in the sunshine of Government ownership gave the public implicit faith and
immense confidence about the sustainability of these institutions.

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Phase3.
This phase has introduced many more products and facilities in the banking sector in its
reforms measure. In 1991, under the chairmanship of M Narasimham, a committee was set up
by his name which worked for the liberalisation of banking practices.
The country is flooded with foreign banks and their ATM stations. Efforts are being put to
give a satisfactory service to customers. Phone banking and net banking is introduced. The
entire system became more convenient and swift. Time is given more importance than
money.
The financial system of India has shown a great deal of re silience. It is sheltered from any
crisis triggered by any external macroeconomics shock as other East Asian Countries
suffered. This is all due to a flexible exchange rate regime, the foreign reserves are high, the
capital account is not yet fully convertible, and banks and their customers have limited
foreign exchange exposure.

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OBJECTIVE OF THE PROJECT
The objective is to gain in-depth knowledge in the banking operations done by Axis Bank
Ltd. The project has focused on the Credit Appraisal and Investment Techniques followed by
the Axis Bank Ltd. In the present competitive market where lots of private players entered,
how the bank sustains its position and going up in the ladder. The project highlights the
uniqueness of the bank in different areas of investment and at the same time different credit
appraisal techniques.
RESEARCH OBJECTIVE
The research which will be based on the primary and secondary data, these data will again be
used for the quantitative as well as qualitative analysis.
The primary objective of the research is to suggest Axis Bank more viable Credit
Appraisal techniques, so that the credibility of the customers can be efficiently
analysed.
It will also serve the purpose of understanding the risk, return and viability of
different investments done by Axis Bank Ltd.

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CREDIT APPRAISAL
INTRODUCTION:
Credit appraisal is the process by which a lender appraises the creditworthiness of the
prospective borrower. This normally involves appraising the borrower‘s payment history and
establishing the quality and sustainability of his income. The lender satisfies himself of the
good intentions of the borrower, usually through an interview.
Credit appraisal is a process to ascertain the risk associated with the extension of the credit
facility. It is generally carried by the financial institutions which are involved in providing
financial funding to its customers. Credit risk is a risk related to the non-payment of the credit
obtained by the customer of a bank. Thus it is necessary to appraise the credibility of the
customer in order to mitigate the credit risk. Proper evaluation of the customer is performed,
which measures the financial condition and the ability of the customer to repay the loan in
future. Generally the credit facilities are extended against the security known as collateral.
But even though the loans are backed by the collateral, banks are normally interested in the
actual loan amount to be repaid along with the interest. Thus the customer‘s cash flows are
ascertained to ensure the timely payment of the principal and the interest.
CREDIT RATING / SCORING:
Credit scoring is the statistical system used by lender to determine the credit worthiness of
the borrower. Information about him and his credit experiences is collected from his loan
application and credit report. Using a statistical program, le nder compares this information to
the credit performance of consumers with similar profiles.
A credit scoring system awards points for each factor that helps in predicting who is most
likely to repay a debt. A total number of points, i.e.‖ a credit score‖ helps in predicting how
creditworthy the borrower is, i.e. how likely it is that the borrower will repay a loan and make
the payment when due.

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The points are distributed in various aspects of profile such as:-
1) Personal Information:
 Age
 Educational Qualification
 Number of Dependents / Children
 Spouse‘s Income, e.t.c.
2) Employme nt Information:
 Organisation
 Designation
 Duration of Service, e.t.c.
3) Income Information:
 Net Income
 Instalment of other Loans
 Other Liabilities, e.t.c.
4) Net Worth Information:

 Owning a House
 Vehicles
 Credit Cards
 Telephone, e.t.c.
5) Previous Relation with the Lender:

 Banking Account
 Credit Cards
 Any other Loans from same lender
Level of education can give an indication to the lenders, whether it is a good risk to extend
credit. Higher the education better is the credit score. A person with the professional
qualifications is given more points than a simple graduate.

25
Lenders prefer people who are stable. So, lenders assign more points to people who‘ve lived
in a particular location or have worked for a single employer for many years. If you‘ve
moved around a lot, you lose precious points. If you‘ve moved because of a better-paying
job, you can recoup some of those points if your salary has increased, for example.
Lenders rate borrower‘s profession and his employers too. Most of the lenders have a list of
approved companies. Credit points are allotted based on the type of company they work for
or the type of profession they are in. The rating from most favoured to least favoured
profession / organization may vary from lender to lender however an indicative list is
presented here under:
a) Government / Public Sector Undertaking / MNCs.

b) Teaching / Educational Institutions.
c) Scientist / Engineers.
d) Banks / Financial Institutions.
e) Chartered Accountants / Company Secretaries.
f) Hotels / Travel Organisations, e.t.c.

26
CHAPTER- 2
REVIEW
OF
LITERATURE

27
Making Customer Relationship Management Work:
Evidence from the Banking Industry in Taiwan
Authors: Nan-Hong Lin a; Wen-Chun Tseng b; Yu-Chung Hung c; David C. Yen d
Affiliations: a Department of Business Management, Tatung University, Taipei, Taiwan,

Republic of China
b
Accounting Section of Office of General Affairs, National Hualien
University of Education, Hualien, Taiwan, Republic of China
c
Department of Accounting and Information Technology, National Chung
Cheng University, Minhsiung, Chiayi, Taiwan, Republic of China
d
Department of DS and MIS, Miami University, Oxford, OH, USA
DOI: 10.1080/02642060701846788
Publication Frequency: 12 issues per year
Published in: The Service Industries Journal
First Published on: 29 May 2009
Subjects: Business & Management; Service Industries

28
Abstract
Soon after becoming a WTO member, Taiwan found the internationalisation and
liberalisation in the financial industry ushered its domestic banks into a new era. In response
to this global trend, all its banks strove to rely on customer relationship manageme nt (CRM)
to enhance customer value (CV). This study aims to probe further into the connection
between CV and CRM. A series of examinations revealed that (1) both functional and social
value impact customer behaviour directly and positively; (2) customer satisfaction positively
and directly affects customer loyalty; (3) a positive and direct relationship exists between
customer loyalty and customer behaviour; and (4) the positive and significant relationship
between CV and customer behaviour can be developed through mediators such as customer
satisfaction and customer loyalty. Consequently, banks should offer their customers different
services, products, and marketing channels to meet their diversified needs to cultivate a win-
win environment of CRM for both parties.
Keywords: customer value; customer relationship management; RFM model; 80/20 Law
Measuring Customer Relationships:

The Case of the Retail Banking Industry
Authors: Venky Nagar, Madhav V. Rajan
DOI: 10.1287/mnsc.1050.0376
Affiliations: University of Michigan, 701 Tappan Street, Ann Arbor, Michigan 48109
Graduate School of Business, Stanford University, 518 Memorial Way, Stanford, California
94305
First Published on: 6, June 2005
Subjects: Management Science

29
Abstract
Arguing that GAAP is ill suited for estimating the future profitability of intangibles, the
accounting literature (e.g., Kaplan and Norton 1996, Lev 2001) has recently proposed
alternative measurement models. These models view intangibles as composed of a set of
fundamental business activities and use multiple financial and nonfinancial metrics causally
interlinked to profits to represent this view. Using a unique and proprietary cross-sectional
data set of the retail banking industry, we provide some of the first tests on the empirical
validity of such measurement models. We characterize the core deposit intangible, an
important retail banking intangible representing a bank‘s relationships with its customers,
using financial and nonfinancial metrics on price, service, customer usage, and customer
satisfaction. We find that the metrics do not individually predict future earnings, but gain
individual significance in a collective setting, increasing the predictive power substantially.
We argue that this result occurs because the activities underlying the measures are causally
interlinked to profits and explicitly illustrate these linkages with a structural path model. Our
measurement model also predicts significant interactive effects in the way our measures are
informative about future profits, and we document such effects, not just among the individual
measures, but also across the measures and environmental factors such as the bank‘s strategy.
In sum, our measurement model illustrates the key drivers, measures, and interactions in retail
banking customer relationships.
Key Words: nonfinancial measures; balanced scorecard; retail banking

30
Corporate Disclosure and Operational Strategy:
Financial vs. Operational Success
Mehmet Ozbilgin, Mark Penno
Zicklin School of Business, Baruch College, City University of New York, One Bernard
Baruch Way, New York, New York 10010
Tippie College of Business, The University of Iowa, 108 John Pappajohn Business Building,
Iowa City, Iowa 52242-1000
mehmet_ozbilgin@baruch.cuny.edu
mark-penno@uiowa.edu
We introduce a simple game between two rival firms—a leader and a follower, where the
leader moves first and makes an operational choice under uncertainty. The leader‘s disclosure
of its resulting financial success or failure may in turn give the follower a competitive
advantage by informing its operational choice. When this occurs, the leader reacts by
sometimes making an operational choice that it knows to be less likely to produce operational
success than the alternative. This makes the financial report less useful to the follower and
expected financial success more likely for the leader. Alternatively, when the financial report
does not provide useful information to the follower (e.g., the financial report aggregates many
activities in addition to the activity the follower is interested in), it may be the follower rather
than the leader who makes the choice less likely to be operationally successful. We document
that when trading off operational success for financial success, the leader‘s aim is operational
unpredictability, while the follower‘s aim is coordination. As such, this paper highlights the
intricate interplay between internal operational decisions, public inferences concerning those
decisions, and different forms of success under intense competition.
Key Words: operational efficiency; competitive advantage; financial disclosure

History: Received: November 4, 2003;

31
Research Note: A Dynamic Programming Approach to Customer
Relationship P ricing
Authors: Michael Lewis
DOI: 10.1287/mnsc.1050.0373
Affiliations: Department of Marketing, University of Florida, Bryan Hall, Gainesville,
Florida 32611
Abstract
The practice of offering discounts to prospective customers represents a rudimentary form of using
transaction history measures to customize the marketing mix. Furthermore, the proliferation of
powerful customer relationship management (CRM) systems is providing the data and the
communications channels necessary to extend this type of pricing strategy into true dynamic
marketing policies that adjust pricing as customer relationships evolve. In this paper, we describe a
dynamic programming–based approach to creating optimal relationship pricing policies. The
methodology has two main components. The first component is a latent class logit model that is
used to model customer buying behavior. The second component is a dynamic optimization
procedure that computes profit-maximizing price paths. The methodology is illustrated using
subscriber data provided by a large metropolitan newspaper.
The empirical results provide support for the common managerial practice of offering
discounts to new customers. However, in contrast to current practice, the results suggest the
use of a series of decreasing discounts based on the length of customer tenure rather than a
single steep discount for first-time purchasers. The dynamic programming (DP) methodology
also represents an important approach to calculating customer value (CV). Specifically, the
DP framework allows the calculation of CV to be an explicit function of marketing policies
and customer status. As such, this method for calculating CV accounts for the value of
managerial flexibility and improves upon existing methods that do not model revenue and
attrition rates as functions of marketing variables.
Key Words: pricing research; customer relationship management; customer valuation
February 20, 2004;

32
CHAPTER- 3
RESEARCH
METHODOLOGY

33
METHODOLOGY FOLLOWED IN THE PROJECT
Mythology forms a strong platform for any kind of study. Methodology should be scientific
and simple that should cover all the aspect of the study so that it can make the study more
fruitful and reduce the time taken in the study. It should be stepwise and broad so that it can
cover all related areas of the study. Methodology removes error and repetition of any kind of
work.
In this summer training project report I followed a simple and strong methodology that covers
all the related topic of the subject. I followed the following simple steps
1. Studying and collecting information about the topic that I have been given in summer
training. The purpose of collecting such information is to get the answer the simple
question and begin the project with a strong base or platform.
In order to learn and observe the practical applicability and feasibility of various
theories and concepts, the following sources were followed and referred to which are
as follows:
a. Primary Source of Information:

Meetings with the project guide and staff members..
Meetings with the staff members of credit division.
b. Secondary Sources of information
RBI guidelines regulating the activities of the banks w.r.t. to credit
appraisal methods and techniques.
Research papers, power point presentations and other PDF files prepared
by the bank and its related officials.
Books related to credit appraisal.

34
2. Several questions are been searched out like what is credit appraisal? What is the
need for credit appraisal? Why any bank considers them important tool for lending?
What is risk management and what is the need of risk management Etc.
3. Then to know about the credit appraisal procedure and risk analysis procedure. This
will help me to get the overview of the work that I have to do during my summer
training.
4. Collecting data stepwise.
5. Analysis and interpretation of the data collected and put the analyzed data into a
proper sequence
6. Made out the findings & conclusion based on the findings
7. Give suggestion to the bank on the findings and results

35
Questionnaire
This structured questionnaire will help us in understanding your needs. All
information you provide us will remain highly confidential, will not be
disclosed in any form to any other organization and will be used for no other
purpose than to prepare a proposal.
1. Name_______________
2. Gender __________
3. Age / DOB _______________
4. Marital Status: ____________
5. If Married, Child: Y / N _______
6. Child’s Age _____________

36
7. Educational Qualification __________________
8. Annual Income _____________
9. Profession _____________
10. Contact No. _______________
11. E-mail __________________________
12. Do you have any past relationship with the axis bank in terms of
loan?
Yes No
13. Job Description
Salaried Self Employed

37
14. Number of years in the same profession
a) 0-5 b) 6-10 c) more than 10
15. Any other loan in past.
Yes No
If, Yes give details ____________________
16. Owning of house?
Yes No Planning To
17. Owning of four wheeler?
Yes No Planning To

38
AIM OF THE HANDY QUESTIONNAIRE
1) EASY PROCESS OF DISTRIBUTION OF LOAN
2) REDUCE THE DEFAULT BY CREDIT APPRAISAL
3) PRIMARY DATA IN THE HAND OF THE EMPLOYEE
4) EASY AVALIABLE INFORMATION OF THE BORROWER
5) DATA BASE OF BORROWER CAN BE EASILY MAINTAINED

39
OVERVIEW OF BANKING OPERATIONS
FOLLOWED BY AXIS BANK LTD.
CORPORATE
BANKING
DEPT.
TREASURY
DEPT.
AGRICULTUE
& SME
BANKING BANKING
OPERATIONS
BUSINESS
BANKING
CAPITAL
MARKET
RETAIL
BANKING

40
CORPORATE BANKING DEPT.
1. LARGE CORPORATE CREDIT

2. MID CORPORATE CREDIT
TREASURY DEPT.
1. FOREGIN EXCHANGE TRADING

2. SLR & MONEY MARKET TRADING
3. DERIVATIVES TRADING
AGRICULTURE & SME BANKING
1. AGRICULTURE
 RETAIL AGRI.
 CORPORATE AGRI.
 COMMODITY AGRI.
 MICROFINANCE.
2. SME
 SCHEMATIC LOAN
 NON-SCHEMATIC LOAN

41
BUSINESS BANKING
 CASH MANAGEMENT SERVICES
CAPITAL MARKET
 PLACEMENT & SYNDICATION OF DEBT ISSUES.
RETAIL BANKING
1. ACCOUNT OPENING.
 CURRENT A/C
 SAVINGS A/C
 FIXED DEPOSITES
2. CARDS.
 CREDIT CARDS
 DEBIT CARDS
3. INSURANCE POLICIES.
4. VALUE ADDED SERVICES.
 BILLS PAYMENT
 SAFE VAULT

42
BUSINESS OVERVIEW
The performance of individual business segments during 2008-09 and their future strategies
are presented below:
RETAIL BANKING
The Bank has pursued an effective strategy over the years todevelop the retail liabilities
business, the success of which is reflected in the fact that savings bank deposits have grown
at a Compounded Annual Growth Rate (CAGR) of 64% between the years 2000 and 2009.
Savings bank deposits grew to Rs. 25,822 crores on 31st March 2009 from Rs. 19,982 crores
on 31st March 2008 registering a year-on- year growth of 29%. On a daily average basis,
savings bank deposits during the year grew by 42.41%. The following chart demonstrates the
strategic roadmap that the Bank has drawn up over the years in tune with changing market
dynamics, regularly building in initiatives that have enabled the Bank to stay ahead of
competition and to avoid the law of diminishing returns. Some of these strategic initiatives
have been the setting up a large and widespread network of ATMs, the creation of a
differentiated sales model, adoption of a customer-centric segmentation and the
implementation of an enterprise-wide strong cross-sell initiative. The Bank's ATM network
has grown rapidly over the years and during the financial year 2008-09 the Bank has added
831 ATMs to reach 3,595 ATMs on 31st March 2009, showing a growth of 30% over last
year. The Bank today has 4.35 ATMs for every Branch, a ratio that is higher than that of its
peers. The Bank has also built a sizeable sales force of over 3,800 personnel on its own
payroll. With a structured training programme, an attractive incentive structure and a well-
defined career path, the sales team has grown to become a powerful customer-acquisition
unit. In 2008-09, the Bank acquired 23,16,887 new accounts, an increase of 20% over the
previous year. The new accounts acquisition has brought in underlying balances of Rs. 7,873
crores this year against Rs. 7,529 crores in the previous year.

43
CORPORATE BANKING
Corporate banking business provides a variety of products and services to large and mid-size
corporates that include credit, trade finance for domestic as well as international transactions,
structured finance, project finance and syndication services through separate SBUs such as
large and mid-corporate credit, treasury, business banking and capital markets. The Bank
continues to pursue a two-pronged strategy of widening the customer base as well as
deepening existing client relationships. A careful choice of new relationships based on
appropriate risk-return guidelines forms the basis for the strategy of widening the customer
base. A deepening of existing client relationships is achieved by a careful account strategy
focusing on increasing the cross-sell of various corporate banking products as also products
from other businesses of the Bank, including investment banking and retail products.
CORPORATE CREDIT
During the year, large and mid-corporate advances grew by 41.98% to Rs. 41,211 crores from
Rs. 29,026 crores in the previous year. This includes advances at overseas branches
amounting to Rs. 10,166 crores (equivalent to USD 2.0 billion) comprising mainly the
portfolio of Indian corporates and their subsidiaries, as also trade finance. Corporate banking
has continuously increased its focus on risk management and on improving portfolio quality.
The Bank has in place procedures and practices to ensure regular updation of risks taken by
the Bank on various client accounts. Portfolio diversification remains the key for managing
asset quality and preventing concentration risks. Relationship groups in the Bank are
organized with an industry-sector focus for better evaluation of specified risks. The credit
policy of the Bank has also put in place ceilings on exposures to various industries with a
view to containing concentration risk and facilitating portfolio diversification. In keeping
with the Bank's strategy to diversify risks, the highest exposure to any individual sector was
11.69% of the Bank's total exposure. While the entire corporate lending portfolio was
internally rated with 79.21% of large corporate assets being rated A and above, 73.12% of the
large corporate loans has been externally rated. Efforts were made through the year to offer
integrated corporate banking solutions to the Bank's clientele, which resulted in significant
growth in core fee income. The Mid-Corporate Group, created as a result of reorganization of
the Corporate Credit group last year, has now emerged as an important business segment for
the Bank. As on 31st March 2009, the Mid-Corporate credit portfolio stood at Rs. 9,679
44
crores. This includes advances to Mid-Corporate of Rs. 698 crores through the Bank's
overseas branches. The Mid-Corporate Group has a healthy yield on advances at 11.86%,
besides having created a strong fee-based earning stream. While the selection criteria are
stringent and strongly underpinned by a rigorous risk assessment process, the Bank's clients
are offered the entire bouquet of corporate banking products, thus ensuring a better value
proposition for the Bank's clients. The economic downturn has had an adverse impact on
several Mid-Corporates, and this has particularly affected sectors like Textiles, Gems and
Jewellery, and Auto Ancillaries. The Group's facilitating approach has, however, helped it
maintain a high level of asset quality. Going forward, while maintaining a close vigil on asset
quality, the Bank will continue to source corporate relationships, which demonstrate the
ability to grow into large sized businesses.
TREASURY
The Bank has an integrated Treasury, which covers both domestic and global markets and
funds the balance sheet across locations.
The dealing rooms in Mumbai, Singapore, Hong Kong and DIFC assist customers in
managing their interest rate and foreign currency exposures, simultaneously maintaining
proprietary positions to generate trading income for the Bank. A major part of the year was
marred by the turmoil in the global financial markets and the management of liquidity
assumed top priority. Balance sheet management acquired greater importance with stressed
liquidity conditions during the year, which eased during the last quarter of the financial year
as a consequence of several monetary easing steps taken by Reserve Bank of India. In spite of
the volatility observed in the bond markets, the Bank's thrust was on maximizing profits and
the portfolio yield. The Bank's investments in government securities were dynamically
managed around duration, and the portfolio yielded a return of 7.42%. Incrementally, efforts
were directed at risk containment of the portfolio due to the rise of illiquidity in the markets.
Currency Futures were introduced in India in August 2008. The Bank started trading on the
very first day of the introduction of Currency Futures. The Bank continued its emphasis on
developing the customer business in foreign exchange, which saw a rise in turnover of over
85%. Proprietary trading in foreign exchange was also very profitable. The Bank sustains the
growth in customer driven forex business by strengthening existing relationships, acquiring
new clients and providing value-added services to clients.

45
BUSINESS BANKING
The Business Banking initiatives have consistently focused on procuring low cost funds by
offering a range of current account products and cash management solutions across all
business segments covering corporates, institutions, central and state government ministries
and undertakings, as well as small and retail business customers. Cross-selling of
transactional banking products to develop account relationships, aided by product innovation
and a customer-centric approach, have borne fruit in the form of growing current account
balances and increasing realisation of transaction banking fees, apart from enlarging the
customer base. The sourcing of current accounts is a critical enabler for the growth of the
balance sheet. As of 31st March 2009, current account balances for the Bank stood at Rs.
24,822 crores, as against Rs. 20,045 crores on 31st March 2008, a growth of 24%. On a daily
average basis, current accounts grew from a level of Rs. 11,834 crores on 31st March 2008 to
Rs. 14,658 crores on 31st March 2009. There was a greater focus on acquisition of high-value
current accounts by satisfying the needs of these value-based customers, thus maintaining the
pace of growth in current account balances.
Additionally, the launch of new and innovative products focusing on specific segments like
inland road transport, supplemented the efforts for efficiently targeting balances from these
segments. During the year, the Bank also introduced a new zero balance current account
product for traders with local business requirements, aiming specifically at generating upfront
fee income.
With the objective of providing various alternative platforms to business clients for satisfying
their transactional banking needs, the Bank introduced improved offerings under mobile
banking and internet banking, resulting in a surge in client registration and usage.

46
LENDING TO MICRO, SMALL AND MEDIUM ENTERPRISES,
AGRICULTURE AND MICRO FINANCE
The Micro, Small and Medium Enterprises (MSME) Sector is the backbone of the Indian
economy contributing significantly to economic growth, employment generation, poverty
alleviation and balanced regional development. The sector has the second largest share of
employment after agriculture, with more than half of those employed being women. Lending
to the MSME Sector forms a major part of the Bank's credit portfolio to the non- farm sector
and contributed 28.44% to the Bank's priority sector advances. This constitutes an important
area of lending for the Bank, and to fully exploit the large business potential in this sector the
Bank has set up 24 SME Centres across the country to extensively focus on the credit
requirements of MSME clients. The Bank has built strong sales and relationship teams to
source new relationships and deepen existing ones, and has strengthened the credit appraisal
teams to improve the quality of credit appraisal and reduce the turnaround time.
The lending to MSME continued to be impressive and the Bank achieved its overall priority
sector lending commitments. The Bank looks at agri-business as an inclusive and profitable
business proposition. The strategy was to finance the value chain and foster corporate
partnerships. During the year, seven Agri Business Centres were created to exclusively focus
on high potential geographies. At Agri Business Centres, the business is carried out under
three segments: retail agriculture, corporate agriculture and commodity business (i.e.
financing against warehouse receipts). These customer specific segments are manned by
separate officers and offer a wide range of products suitable for each segment. The retail
agriculture organisational model consists of 46 strategically placed agriculture clusters, and
the Bank offers its retail agri products to farmers through 249 of its branches. This has helped
in raising levels of business without any compromise on risk management or customer
service. The corporate agriculture team consists of client-specific relationship managers and a
team of credit analysts having sectoral expertise. Under commodity business, the Bank has
created 9 commodity business centres to which 74 branches are linked. Besides relying on the
services of collateral managers, the Bank also has an exclusive team of officers for onsite and
offsite monitoring, so as to avoid operational, market and credit risks and these teams are
provided with a state-of-the-art software, developed by Bank's IT team. The agricultural
loans outstanding formed 11.51% of the Bank's domestic loan book. The total agriculture
loan outstanding in theBank was 15.14% of the Bank's Adjusted Net Bank Credit (ANBC).

47
During the year, the Bank's agricultural borrower base grew by 33.45% over the previous
year and closed with 1,42,789 clients. The Bank believes that micro-credit and microfinance
services are major enablers of financial inclusion to the under privileged sections of society.
The microfinance business gained significant momentum during the year with an impressive
growth of 80% in the portfolio. In our endeavor to focus on a steady and disciplined growth
of the micro finance business, we partnered with highly redible Micro Finance Institutions
(MFIs) across the country. The Bank has 86 microfinance relationships in 18 states of which
4 are in the North East with a corresponding client outreach of around 18.50 lacs. Most of the
beneficiaries are poor women engaged in small and marginal enterprises. In line with our
overall strategy to support MFIs operating in underdeveloped parts of the country, we have
supported upcoming MFIs in remote areas of Bihar, Tripura and Madhya Pradesh. The Bank
also continued its strategy of extending loans under various central government sponsored
schemes.
INTERNATIONAL BANKING
The international operations of the Bank are at the core of the strategy to expand the horizon
of the product offerings and delivery channels to various geographies and across client
segments, covering the spectrum of retail and corporate banking solutions. The international
presence of the Bank now comprises branches in Singapore, Hong Kong and DIFC-Dubai,
and representative offices in Shanghai and Dubai, besides alliances with banks and exchange
houses in the Gulf Cooperation Council (GCC) countries. While the foreign branches
primarily offer corporate banking, trade finance, treasury and risk management solutions, the
Bank's retail initiatives in the GCC caters to the large Indian diaspora and promotes the
Bank's NRI products.
In a year marked by an unprecedented upheaval of the financial markets that has changed the
contours of the global financial system, the international operations of the Bank displayed
resilience and recorded impressive growth in assets and deposits, and maintained
profitability. The total assets of the foreign branches now constitute 7.90% of the total assets
of the Bank and grew by 38.55% to touch USD 2.30 billion from USD 1.66 billion a year
ago. Despite the prevailing recessionary trends in the developed world economies, the asset
quality at foreign offices continues to be satisfactory with zero level of non-performing
assets.

48
RISK MANAGEMENT
The role of risk management focuses strongly on anticipating vulnerabilities in a deteriorating
situation, and initiating curative measures proactively through quantitative and qualitative
assessments of such embedded risks. The Bank has developed in-house skills to manage key
areas of risk viz., credit risk, market risk and operational risk. The Bank's risk management
approach relies on the establishment of comprehensive processes and internal control
mechanisms. The Bank's risk management processes are guided by well-defined policies
appropriate for the various risk categories, independent risk oversight and periodic
monitoring through the sub-committees of the Board. The Board sets the overall risk appetite
and philosophy for the Bank. The Committee of Directors and the Risk Management
Committee, which are sub-committees of the Board, review various aspects of risk arising
from the businesses undertaken by the Bank. Senior management committees such as various
credit and investment committees, the Asset-Liability Committee (ALCO), the Operational
Risk Management Committee (ORMC) and the Credit Risk Management Committee
(CRMC) operate within the broad policy framework of the Bank.
Credit Risk
The Bank's credit risk management process integrates risk management into the business
management processes, while preserving the independence and integrity of risk assessment.
Emphasis is placed on evaluation and containment of risk at the level of individual
counterparty exposures, and analysis of portfolio behavior. The use of sophisticated
modelling techniques to contain credit risk is also being used for effective and continuous
monitoring. The credit risk management framework integrates quantitative processes with
qualitative judgement to support orderly growth in the asset book while ensuring an
acceptable risklevel in relation to return.
The growth in the asset book of the Bank during the year highlights the importance of
prudent credit risk management practices both at the individual obligor level as well as at the
portfolio level. The Bank has a structured and standardized credit approval process, which
includes a well-established procedure of comprehensive credit appraisal. The internal credit
rating system continues to provide integrity, credibility and objectivity to the lending process
to ensure an acceptable risk level in relation to the expected return. Portfolio level risk

49
analytics provide insight into capital allocation required to absorb unexpected losses at a
defined confidence level.
Dimensions of portfolio level risk analysis carried out by the Bank includes ensuring optimal
spread of risk across various rating classes and prevent undue risk concentration across
various industry segments in the portfolio.
A graphical representation highlighting the spread of risk across various rating grades for
large corporates and the MSME portfolio
Market Risk
Market risk is the risk to the Bank's earnings and capital due to changes in the market level of
interest rates, prices of securities, foreign exchange and equities, as well as the volatilities of
those changes. The Bank is exposed to market risk through its trading activities, which are
carried out for customers as also on a proprietary basis. The Bank adopts a comprehensive
approach to market risk management for its trading, investment and asset/liability portfolios.
For market risk management, the Bank uses both nonstatistical measures like position, gaps
and sensitivities (duration, PVBP, option greeks) and statistical measures like Value at Risk
(VaR), supplemented by stress tests and scenario analysis.
The Bank uses historical simulation and its variants for computing VaR for its trading
portfolio. VaR is calculated at a 99% confidence level for a one-day holding period. The VaR
models for different portfolios are back-tested at regular intervals and the results are used to
maintain and improve the efficacy of the model. The VaR measure is supplemented by a
series of stress tests and sensitivity analysis that estimates the likely behaviour of a portfolio
under extreme but plausible conditions and its impact on earnings and capital.
Liquidity Risk
Liquidity Risk is defined as the current and prospective risk to earnings or capital arising
from a bank's inability to meet its current or future obligations on the due date. The Bank's
ALM policy defines the gap limits for its structural liquidity position. The liquidity profile of
the Bank is analyzed on a static basis by tracking all cash inflows and outflows in the
maturity ladder based on the expected occurrence of cash flows. The liquidity profile of the
Bank is also estimated on a dynamic basis by considering the growth in depositsand loans,
investment obligations, etc. for a short-term period of three months. The Bank's ability to
meet its obligations and fund itself in a crisis scenario is critical and, accordingly, liquidity
50
stress tests are conducted under different scenarios at periodic intervals to assess the impact
on liquidity of stressed conditions.
The liquidity positions of overseas branches are managed in line with the Bank's internal
policies and host country regulations. Such positions are also reviewed centrally by the
Bank's ALCO along with domestic positions.
Operational Risk
Operational risk is the risk of loss resulting from inadequate or failed internal processes,
people and systems or from external events. A policy on management of operational risk has
been approved by the Bank to ensure that operational risk within the Bank is properly
identified, monitored and reported in a structured manner, and this policy is reviewed
annually. The Bank has an Operational Risk Management Committee to oversee application
of the aforesaid policy directives. Each new product, process or service introduced by the
Bank is subjected to a rigorous risk review and signoff process by the Product Management
Committee where all relevant risks are identified and assessed by departments independent of
the risk-taking unit proposing the product, process or service. Changes proposed to the
existing products/processes as well as outsourcing activities are also subjected to a similar
process by the Change Management Committee and the Outsourcing Committee respectively.
The IT Security Committee of the Bank provides direction for mitigating the operational risk
in Information Systems. The business units put in place the internal controls as approved by
such committees to ensure a sound and well controlled operating environment in respect of
various activities of the Bank.

51
CORPORATE BANKING OPERATIONS
Corporate Banking Operations (CBO) within the Bank involves monitoring the accounts of
large/mid-corporates and SME customers while ensuring compliance with the regulatory
guidelines and systems and procedures of the Bank in the conduct of credit operations. CBO
Division is created at branches where advances exceed Rs. 50 crores, in order to ensure that
the operational risks in monitoring the advances and other related issues are well mitigated.
In case of other branches, trained and experienced manpower is posted when the number of
borrowal units and the advances level exceed a minimum threshold level. As part of business
process re-engineering, 8 city specific centralised CBO Hubs called Credit Management
Centres (CMCs) have been opened during the year for standardizing the skill pool for
efficient monitoring and control of advances. Facilitation Centres have been set up at select
branches of these 8 centres for providing prompt customer service in co-ordination with
CMC. Other branches located at these cities have been mapped to the closest facilitation
centres for all their credit, domestic trade finance and related operations. CBO Divisions and
CMCs handled 86% of the Bank's total domestic non-retail credit portfolio, ensuring that
trained and experienced personnel are monitoring a substantial percentage of advances.
CAPITAL MARKETS
The Bank's Capital Markets business encompasses activities both in the equity capital
markets and the debt capital markets. The equity capital markets activities involve providing
advisory and placement services pertaining to the raising of equity and quasiequity funds by
its corporate clients. The Bank is a SEBI-registered Category I Merchant Banker with
experience in the management of public and rights issues. The Bank provides debt capital
market services by acting as advisors and arrangers for raising Rupee and foreign currency
loans, foreign currency convertible bonds and Rupee-denominated bonds. The Bank has
continued to retain its leadership position in the domestic debt market and during 2008-09 has
syndicated an aggregate amount of about Rs. 69,000 crores by private placement of bonds,
debentures and term loans. Prime Database has ranked the Bank as the number 1 arranger for
private placement of bonds and debentures till 31st December 2008. Bloomberg has also
ranked the Bank as number 1 in India Domestic Bonds League table for the calendar year
2008. The Bank has been rated as the Best Bond House in India for the financial year 2008
by Finance Asia, Best Domestic Debt House in India for 2008 by Asia Money and Best Debt
House - India in the 2008 Euromoney Awards for excellence, and India Bond House 2008 in
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the IFR Asia Awards 2008. The Bank's Capital Markets Business also involves provid ing
corporate restructuring advisory services, mergers and acquisitions (M&A) advisory services,
arranging services for acquisition funding, infrastructure and project advisory services,
techno-economic feasibility reports, business plan preparation and bid process management.
The Bank has carved out the trusteeship business, hitherto a part of capital markets business
into a separate subsidiary company to enhance its functioning. The Bank has also started
providing custodial services.
During 2009-10, opportunities will be available in the private placement of equity, M&A
advisory and domestic bond placement. The Bank will continue to focus on project and
corporate finance by raising both debt and equity funds for various infrastructure and
manufacturing projects. The Bank also maintains an investment and proprietary trading
portfolio in corporate bonds and equities. As on 31st March 2009, the Bank's investment in
corporate bonds, equities and others was Rs. 18,603 crores against Rs. 13,526 crores in the
previous year. Of this as on 31st March 2009, the Bank has made investment of USD 152
million at overseas branches as against USD 153 million in the previous year.

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THE LOAN PROCESS
1. Pre-Qualification
2. Mortgage Programs and Rates
3. The Application
4. Processing
5. Required Documents
6. Credit Reports
7. Appraisal Basics
8. Underwriting
9. Closing
10.Summation
1. Pre-Qualification:
Pre-qualification starts the loan process. Once a lender has gathered information about
a borrower's income and debts, a determination can be made as to how much the
borrower can pay for a house. Since different loan programs can cause different
valuations a borrower should get pre-qualified for each loan type the borrower may
qualify for.
In attempting to approve homebuyers for the type and amount of mortgage they want,
mortgage companies look at two key factors: first, the borrower's ability to repay the
loan; and second, the borrower's willingness to repay the loan.
Ability to repay the mortgage is verified by your current employment and total
income. Generally speaking, mortgage companies prefer for you to have been
employed at the same place for at least two years, or at least be in the same line of
work for a few years.

54
The borrower's willingness to repay is determined by examining how the property
will be used. For instance, will you be living there or just renting it out? Willingness
is also closely related to how you have fulfilled previous financial commitments,
hence the emphasis on the Credit Report and/or your rental payment history.
It is important to remember that there are no rules carved in stone. Each applicant is
handled on a case-by-case basis. So even if you come up a little short in one area,
your stronger point could make up for the weak one. Mortgage companies couldn't
stay in business if they didn't generate loan business, so it's in everyone's best interest
to see that you qualify.
2. Mortgage Programs and Rates:

To properly analyze a Mortgage Program, the borrower needs to think about how long
they plan to keep the loan. If you plan to sell the house in a few years, an adjustable or
balloon loan may make more sense. If you plan to keep the house for a longer period,
a fixed loan may be more suitable.
Shopping for a loan is very time consuming and frustrating. With so many programs
to choose from, each with different rates, points and fees, an experienced mortgage
professional can evaluate a borrower's situation and recommend the most suitable
Mortgage Program, thus allowing the borrower to make an informed decision.
3. The Application :
The application is the true start of the loan process and usually occurs between days
one and five of the start of the loan process. With the aid of a mortgage professional,
the borrower completes an application and provides all required documentation.
The various fees and closing cost estimates will have been discussed while examining
the many mortgage programs and these costs will be verified by a Good Faith
Estimate (GFE) and a Truth-In-Lending Statement (TIL) which the borrower will
receive within three days of the submission of the application to the lender.

55
4. Processing:
Once the application has been submitted, the processing of the mortgage begins. The
Processor orders the Credit Report, Appraisal and Title Report. The information on
the application, such as bank deposits and payment histories, are then verified. Any
derogatory credit items, such as late payments, collections and/or judgments require a
written explanation. The processor examines the Appraisal and Title Report checking
for property issues that may require further investigation. The entire mortgage
package is then put together for submission to the lender.
5. Required Document:
If you are purchasing or refinancing your home, and you are salaried you will need to
provide the past two-years W-2s and one month of pay-stubs: OR, if you are self-
employed you will need to provide the past two-years tax returns. If you own rental
property you will need to provide Rental Agreements and the past two-years tax
returns. If you wish to speed up the approval process, you should also provide the past
three- months bank, stock and mutual fund account statements. Provide the most
recent copies of any stock brokerage or IRA/401k accounts that you might have.
If you are requesting cash-out you will need a "Use of Proceeds" letter of explanation.
Provide a copy of any divorce decree if applicable. If you are not a US citizen,
provide a copy of your green card (front and back), or if you are NOT a permanent
resident provide your H-1 or L-1 visa.
If you are applying for a Home Equity Loan you will need to, in addition to the above
documents, provide a copy of your first mortgage note and deed of trust. These items
will normally be found in your mortgage closing documents.

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6. Credit Reports:
Most people applying for a home mortgage need not worry about the effects of their
credit history during the mortgage process. However, you can be better prepared if
you get a copy of your Credit Report before you apply for your mortgage. That way,
you can take steps to correct any negatives before making your application.
A Credit Profile refers to a consumer credit file, which is made up of various
consumer credit reporting agencies. It is a picture of how you paid back the
companies you have borrowed money from, or how you have met other financial
obligations. There are five categories of information on a credit profile:
Identifying Information
Employment Information
Credit Information
Public Record Information
Inquiries
NOT included on your credit profile is race, religion, health, driving record, criminal
record, political preference, or income.
If you have had credit problems, be prepared to discuss them honestly with a
mortgage professional who will assist you in writing your "Letter of Explanat ion."
Knowledgeable mortgage professionals know there can be legitimate reasons for
credit problems, such as unemployment, illness or other financial difficulties. If you
had problems that have been corrected (reestablishment of credit), and your payments
have been on time for a year or more, your credit may be considered satisfactory.
The mortgage industry tends to create its own language and credit rating is no
different. BC mortgage lending gets its name from the grading of one's credit based
on such things as payment history, amount of debt payments, bankruptcies, equity
position, credit scores, etc. Credit scoring is a statistical method of assessing the credit
risk of a mortgage application. The score looks at the following items: past
delinquencies, derogatory payment behavior, current debt levels, length of credit
history, types of credit and number of inquires.

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By now, most people have heard of credit scoring. The most common score (now the
most common terminology for credit scoring) is called the FICO score. This score
was developed by Fair, Isaac & Company, Inc. for the three main credit Bureaus;
Equifax (Beacon), Experian (formerly TRW), and Empirica (TransUnion).
FICO scores are simply repository scores meaning they ONLY consider the
information contained in a person's credit file. They DO NOT consider a person‘s
income, savings or down payment amount. Credit scores are based on five factors:
35% of the score is based on payment history, 30% on the amount owed, 15% on how
long you've had credit, 10% percent on new credit being sought and 10% on the types
of credit you have. The scores are useful in directing applications to specific loan
programs and to set levels of underwriting such as Streamline, Traditional or Second
Review, but are not the final word regarding the type of program you will qualify for
or your interest rate.
Many people in the mortgage business are skeptical about the accuracy of FICO
scores. Scoring has only been an integral part of the mortgage process for the past few
years (since 1999); however, the FICO scores have been used since the late 1950's by
retail merchants, credit card companies, insurance companies and banks for consumer
lending. The data from large scoring projects, such as large mortgage portfolios,
demonstrate their predictive quality and that the scores do work.
The following items are some of the ways that you can improve your credit score:
Pay the bills on time.

Keep balances low on credit cards.
Limit your credit accounts to what you really need. Accounts that are no longer
needed should be formally cancelled since zero balance accounts can still count
against you.
Check that your credit report information is accurate.
Be conservative in applying for credit and make sure that your credit is only checked
when necessary.

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A borrower with a score of 680 and above is considered an A+ borrower. A loan with
this score will be put through an "automated basic computerized underwriting" system
and be completed within minutes. Borrowers in this category qualify for t he lowest
interest rates and their loan can close in a couple of days.
A score below 680 but above 620 may indicate underwriters will take a closer look in
determining potential risk. Supplemental documentation may be required before final
approval. Borrowers with this credit score may still obtain "A" pricing, but the loan
may take several days longer to close.
Borrowers with credit scores below 620 are not normally locked into the best rate and
terms offered. This loan type usually goes to "sub-prime" lenders. The loan terms and
conditions are less attractive with these loan types and more time is needed to find the
borrower the best rates.
All things being equal, when you have derogatory credit, all of the other aspects of the
loan need to be in order. Equity, stability, income, documentation, assets, etc. play a
larger role in the approval decision. Various combinations are allowed when
determining your grade, but the worst-case scenario will push your grade to a lower
credit grade. Late mortgage payments and Bankruptcies/Foreclosures are the most
important. Credit patterns, such as a high number of recent inquiries or more than a
few outstanding loans, may signal a problem. Since an indication of a "willingness to
pay" is important, several late payments in the same time period is better than random
lates.
7. Appraisal Basis:
An appraisal of real estate is the valuation of the rights of ownership. The appraiser
must define the rights to be appraised. The appraiser does not create value. The
appraiser interprets the market to arrive at a value estimate. As the appraiser compiles
data pertinent to a report, consideration must be given to the site and amenities as well
as the physical condition of the property. Considerable research and collection of data
must be completed prior to the appraiser arriving at a final opinion of value.
Using three common approaches, which are all derived from the market, derives the
opinion, or estimate of value. The first approach to value is the COST APPROACH.

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This method derives what it would cost to replace the existing improvements as of the
date of the appraisal, less any physical deterioration, functional obsolescence and
economic obsolescence. The second method is the COMPARISON APPROACH,
which uses other "bench mark" properties (comps) of similar size, quality and
location that have recently sold to determine value. The INCOME APPROACH is
used in the appraisal of rental properties and has little use in the valuation of single
family dwellings. This approach provides an objective estimate of what a prudent
investor would pay based on the net income the property produces.
8. Underwriting:
Once the processor has put together a complete package with all verifications and
documentation, the file is sent to the lender. The unde rwriter is responsible for
determining whether the package is deemed an acceptable loan. If more information is
needed the loan is put into "suspense" and the borrower is contacted to supply more
information and/or documentation. If the loan is acceptable as submitted, the loan is
put into an "approved" status.
9. Closing:
Once the loan is approved, the file is transferred to the closing and funding
department. The funding department notifies the broker and closing attorney of the
approval and verifies broker and closing fees. The closing attorney then schedules a
time for the borrower to sign the loan documentation.
At the closing the borrower should:
Bring a cashier‘s check for your down payment and closing costs if required. Personal
checks are normally not accepted and if they are they will delay the closing until the
check clears your bank.
Review the final loan documents. Make sure that the interest rate and loan terms are
what you agreed upon. Also, verify that the names and address on the loan documents
are accurate.
Sign the loan documents.
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Bring identification and proof of insurance.
After the documents are signed, the closing attorney returns the documents to the
lender who examines them and, if everything is in order, arranges for the funding of
the loan. Once the loan has funded, the closing attorney arranges for the mortgage
note and deed of trust to be recorded at the county recorders office. Once the
mortgage has been recorded, the closing attorney then prints the final settlement costs
on the HUD-1 Settlement Form. Final disbursements are then made.
10. Summation:
A typical "A" mortgage transaction takes between 14-21 business days to complete.
With new automated underwriting, this process speeds up greatly. Contact one of our
experienced Loan Officers today to discuss your particular mortgage needs or Apply
Online and a Loan Officer will promptly get back to you.

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SME FAST TRACK LOANS
Axis Bank offers fast track loans for SMEs under the following schemes:
1) Mpower Te rm Loan:
Axis Bank's Mpower-TL provides a hassle free way of meeting your business needs
of expansion and other long term funding requirements against the security of
immovable residential or commercial property. Mpower-TL is an EMI based loan and
can be availed by Partnership firms, Private Ltd. Companies and Trusts. Mpower-TL
has the following features:
o Loans upto Rs 5 crores*

o Flexible repayment options of upto 10 years
o Attractive market related interest rates
o Fast processing and quick disbursement
2) Business Loan for Property:
Looking to acquire an office space for your business? Axis Bank's BLFP offers you a
convenient way. It is an EMI based term loan and can be availed by Partnership firms,
Private Ltd. Companies and Trusts. BLFP has the following features:


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3) Powe r Rent:
Having a rental income from commercial property leased out to reputed corporate or
Public Sector Units or Banks or Insurance Companies? Axis Bank's Power Rent is
just the right product for you. The product offering involves discounting the future
receivables and providing an upfront loan to the landlord, thus extending immediate
liquidity in the hands of the landlord. It is an EMI based term loan, which can be
availed by Proprietors, Partnerships, Private Ltd. Companies and Trusts. Power Rent
has the following features:

4) Powe r Trade:
At Axis Bank we understand the unique needs of the trader segment and we have
tailor designed a specific product 'Power Trade' to meet your business needs. Axis
Bank's Power Trade is a hassle free and flexible credit facility for meeting your
working capital requirements like Cash Credit, Bills discounting, Export Credit, Bank
Guarantee, Letter of Credit or a term loan.
o Loan upto Rs 2.5 crore*

o Stock statements to be submitted quarterly*
o Tenure - 1 year for Working capital and 3 years for Term Loans

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5) Mpower Overdraft:
Axis Bank's Mpower-OD helps you meet your short-term funding needs and allows
you to leverage every business opportunity that comes your way against the security
of residential or commercial property.

o Tenure - 1 year
o Immovable Property as collateral
6) Enterprise Power:
Axis Bank's Enterprise Power is a unique product designed keeping in mind the
business requirements of Micro and Small Enterprises (MSE).
o Loans upto Rs. 1.00 crore*

o Tenure-1 year for working capital and 3 years for term loan

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7) Equipment Powe r:
This product is a term loan facility with a tenor upto 48 months for purchase of
construction, medical and office equipments. There is a standard list of equipments,
which the Bank would finance under the scheme and the maximum exposure
permitted under the product is Rs. 100.00 lacs.
8) Ze ro Collateral Loans to SSI Units:
Collateral free product to facilitates the MSE and software/IT related services to avail
both working capital and term finance from the Bank. The facility is secured by
guarantee cover of Credit Guarantee Fund Trust for Micro and Small Enterprises
(CGMSE). Maximum loan amount under the product is Rs. 50 lacs.

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THE BANK APPLICATION PROCESS
Essential Information:
 Business Description: Usually completed on a Bank‘s application form. Be

prepared to provide company details such as address, telephone number, contact
names, tax registration numbers and other general information about your company.
 Balance Sheet: Financial statement showing company assets, liabilities and equity.
(start up companies provide projections only)
 Income Statement or Profit/loss Statement: Financial statement showing sales,
expenses and profit over a period of time. (start up companies provide projections
only)
 Cash Flow Projections: Financial statement outlining the sources and uses of funds
over a period of time.
 Statement from each owner outlining personal assets and obligations (if the owners
are providing a personal guarantee)
Additional Information:
In general, a Bank will require more information as the loan value increases.
 Business plan
 Projected balance sheet
 Projected income statement
 Personal tax returns from each owner
 Business tax return
 Credit history search on the owners and business (completed by the Bank only with
your permission)
 Month-by- month cash flow statement outlining expected cash balances at the end of
each month.

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 Aged list of accounts receivable and payable. This report lists suppliers and
customers sorted by how long the invoice is outstanding. Most lending institutions
discount any customer that has not paid you within 90 days.
 Appraisal on assets. This is an estimate of value. Appraisals are generally required
when financing real estate, purchasing an existing business or used equipment.
 Environmental assessment. Required when purchasing real estate. This is a survey
to test for environmental contamination.
Credit Rating Processes for Business Customers
The European Capital Requirements Directive requires banks to, if requested, explain the
credit rating process they use to assess applications made by SMEs and other corporate
applicants for loans. The information below is intended to illustrate this process.
Assessing Applications for Credit:

Banks are committed to helping you make financial decisions that best suit the circumstances
of your business. They want to help ensure that you do not take on more borrowing than your
business can afford to repay and then have trouble making repayments as they fall due.
A credit quality rating is one of the tools which banks may use to assess applications for
loans. Ratings are assessed in a number of ways. For smaller businesses, credit scoring will
frequently be used. For larger corporate, the rating is more likely to be based on an
assessment of financial accounts plus non-financial factors such as the experience and track
record of management. Transactional factors such as the length of loan requested and the
amount of security available may also be taken into account.
It is important to note that lenders have different lending policies and scoring systems and so
applications to them may be assessed differently. This means that one lender may accept an
application which another may not. Credit ratings are internal measures used by banks and as
such are not comparable between lenders. You can ask your bank about whether credit-
scoring techniques will be used when you are applying for credit.

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There are essentially two different credit scoring techniques used by banks: application
scoring and behavioural scoring. In the case of small businesses, both of these scoring
techniques will often involve consideration of personal accounts held by proprietors a nd may
include assessment of data held about one or more director.
Application Scoring:
Application scoring is often used to help inform decisions about lending to small
businesses and the opening of new small business accounts. Application scoring takes
into account information banks may hold about you or your business and any information
that you supply or that they may obtain from other organisations such as credit reference
agencies or fraud prevention agencies. Where they use the information from other
organisations they will tell you who they are.
Behavioural Scoring:
Behavioural scoring, also known as customer or predictive scoring, rates customers on the
way they operate their financial affairs, based on the pattern of activity seen passing
through existing customer accounts.
Behavioural scoring is most effective where customers have been with a bank for a period
of time. Statistically, it has been shown to be more consistent in identifying acceptable
credit risks to banks than manual assessments of borrowing requests.
This information is used to consider credit applications and for the ongoing management
of account facilities, such as overdrafts and bank cards, as it builds up an accurate picture
of how a customer manages their money, with the unde rlying principle that previous
performance trends can be used to reflect future patterns. An example of a negative
indicator might be where cheques or other items have been returned unpaid.
Behavioural scoring may be used in conjunction with application scoring to enable a
lender to decide whether they should lend money or not.

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 What happens if the application is declined?
If a bank does not wish to accept the application, they will tell us. They will also tell us
on request the main reason why they were unable to agree our application. If we did not
pass their credit score they will tell us.
If a bank has declined our application we may contact them and ask them to reconsider
their decision. They may ask us to provide additional information.
If we are concerned about the way in which your application for credit has been dealt
with, we can ask the bank for more information about how the credit appraisal system
works. If we wish to appeal against a refusal of credit based on a credit scoring system,
ask the bank for details of how we can do this.
If we are unhappy about how our concerns have been handled, we can complain. The
Bank Facts information sheet on 'How to complain to your Bank' will be helpful. This
information sheet is one of a series of BankFacts published by the British Bankers'
Association.
 Is credit scoring fair?

We believe that credit scoring is fair and impartial. It does not single out a specific piece
of information as the reason for declining an application and is based on the use of
objective criteria to make a decision. Credit scoring methods are tested regularly to make
sure they continue to be fair and unbiased. At no point is any information regarding race,
gender, disability, colour and religion taken into account.
Responsible lending is essential for us and our bank. The Office of Fair Trading regulates
credit and views credit scoring as a way of helping banks lend responsibly.
Although banks are confident that their appraisal methods provide a reliable and accurate
basis on which to make decisions, they do have processes in place to review and
potentially amend decisions.
It is important to stress that although credit rating has an important part to play in
determining the price at which a bank will offer to lend money; it is just one of several
factors which are taken into account.

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Basel II
EU banks are required to comply with the European Capital Requirements Directive, 2006.
This is based on the international framework for the calculation of bank capital agreed by the
central bank governors and the heads of supervision of the G10 countries in 2004, frequently
referred to as "Basel II".
The Directive determines the minimum amount of capital which a bank must set aside for
each lending transaction in relation to its risk. There are 3 alternative ways in which this can
be done:
 A bank following the Standardised approach has to use a method wholly prescribed by
the Directive and based on external credit ratings.
 Under the Foundation Internal Ratings Based (IRB) approach banks are permitted to use
their own models to estimate the risk of customer default but must use factors prescribed
by the Directive for transactional risks such as the amount likely to be drawn if a
customer defaults (Exposure at Default) and the amount of loss likely to be incurred
(Loss Given Default).
 Banks following the Advanced IRB approach may use their internal models to estimate
both customer and transactional risks.
The ratings used to estimate capital for credit risk are likely to be similar, but not necessarily
identical, to those used internally for lending and pricing decisions.
In the UK, banks using either the Foundation IRB or Advanced IRB Approach require the
specific prior approval of the FSA. More details of the Capital Requirements Directive and
Basel II may be found on the FSA website: See link below.

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CHAPTER- 4
ANALYSIS

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PERSONAL POWER
RETAIL BANKING DEPARTMENT
Purpose: To meet the personal expenses.
Eligibility:
1) AXIS BANK‘S EMPLOYEES:

Confirmed employees who have completed 3 years of service with a minimum net
salary of Rs.10000 per month.
2) OTHERS:
A. Salaried Individuals:
Any individual having a cumulative experience of 2 years or more with a minimum
net income of Rs. 10000 p.m. should be eligible for the loan, irrespective of the
conformation in his present job.
Minimum 1 year in current job with 2 years of total work experience.
OR
Less than 1 year in current job (irrespective of confirmation) with 3 years of total
work experience (employment proof of 3 years required).
OR
Less than 2 years in employment for professionally qualified salaried individuals (i.e.
MBA from premier institutes IIMs/XLRI/JBIMS/FMS/MDI/SP
JAIN/NMIMS/SYMBIOSIS/XIMB OR B.TECH form IITs), but only with the proof
of qualification.
The applicants should be above 21 years of age and less than the age of
superannuation at the termination of the loan.

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B. Professionals (Doctors, Dentists, Engineers, Architects, Chartered Accountants, Cost
Accountant, Company Secretary, Management Consultants only) :
Any individual who is self employed for last 3 years with a minimum annual net
income of Rs. 1 lakh. The applicant should be above 24 years of age and less than 60
years at the termination of the loan.
C. Self Employed:
Any individual who is self- employed for the last three years with a minimum annual
net income of Rs.1.50 lakh. The applicant should be above 24 years of age and less
than 60 years at the termination of the loan.
Loan Amount:
Minimum Loan amount Rs.25,000/-
Maximum Loan amount Rs.2,00,000/-
A. Upto 4 times net monthly income

Repayable in 12 months
B. Upto 8 times net monthly income
C. Upto 10 times net monthly income
2) OTHERS:
Minimum Loan amount Rs.1,00,000/-
Maximum Loan amount Rs.1000000/-
(For salaried and professional individuals)
(For self employed individuals, without repayment track record).
(For self employed individuals, with repayment track record).

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Repayment Limit (Salaried / Professionals / Self Employed-others):
Maximum Loan Amount:
1) Salaried:
Max. Limit is Rs.1000000/-
Repayment Period:
a) More than or equal to 12 months but less than 24 months:
4 times Net Monthly Income.
b) More than or equal to 24 months but less than 36 months:
c) More than or equal to 36 months and upto 48 months:
2) Self Employed Professionals:

Engineers, Architects, Chartered Accountants, Cost Accountants, Management
Consultants only.
Max. Limit is Rs.750000/-
For Self Employed Doctors Max. Limit is Rs.1000000/-
Repayment Period:
1 Time Avg. (of 3 yrs.) Annual Income.
1.5 Times Avg. (of 3 yrs.) Annual Income.
2.25 Times Avg. (of 3 yrs.) Annual Income.

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3) Self Employed Others:
Max. Limit is Rs.150000/-(Without payment track record)
Max. Limit is Rs.300000/-(With payment track record)
Repayment Period:
1 Time Avg. (of 3 yrs.) Annual Income*.
1.5 Times Avg. (of 3 yrs.) Annual Income*.

2.25 Times Avg. (of 3 yrs.) Annual Income*.
* Income in case of self employed other individuals will be as per the IOT
acknowledged income tax return.
Security:

Third party guarantee of a person of satisfactory means not belonging to the
immediate family of the applicant.
2) OTHERS:
a) 3rd party guarantee of a person of satisfactory means is desirable but not
mandatory.
b) Providing of Collateral security: Collateral security implies interim security such
as units of UTI, NSCs, KVPs, Demat shares, Bank deposits, Surrender value of
Life Insurance policy and such other investments that are acceptable to the Bank.
Salaried (having salary power account with the Bank with check-off
facility) having net monthly income of Rs. 7500 to Rs.10,000/- need not
provide collateral security.

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Salaried (not having salary power account with the Bank) having net
monthly income of Rs. 7500 to Rs.10,000 need to provide 50% collateral
security or a 3rd party guarantee of a person of satisfactory means
Salaried/ Professionals having net monthly income/ average monthly
income of Rs. 10,000 or more need not provide collateral security.
Self employed individuals filing IT returns of less than Rs.1.50 lakhs p.a.
need to provide third party guarantee of a person of satisfactory means.
Self employed individuals filing IT returns of Rs.1.50 lakhs p.a. or more
need not provide collateral security.
However, in all cases, on providing collateral security, the following
relaxation with regards to the interest rates would be applicable:
 Collateral security worth 25% - 50% of loan amount: reduction of 25 basis

points in the interest rates.
 Collateral security greater than or equal to 50% of the loan amount:
reduction of 50 basis points in the interest rates.

76
BANKING RELATIONS

Salary account of employee is mandatory.
2) OTHER:
SALARIED/Self Employed /Professionals
For salaried, self employed and professionals, in the last six months maximum of 1
cheque bounce is allowed.
For salaried individuals, if the net salary of the borrower is less than Rs.10000/-, then
Average Bank Balance is One EMI and net salary of Guarantor should be greater than
Rs.10000/-.
For self employed (others), Average Bank Balance is one EMI mandatory for all.
For professionals, this is not required.
Average Bank Balance = (Balance on 1 st , 10th ,20th )/3
For salaried individuals, salary credit (in any bank) is mandatory.
REPAYMENT TRACK RECORD
1) SELF EMPLOYED:
 For self employed (others), 1 yr repayment track record of more than Rs.1 Lac
Personal Loan is mandatory.
 If Personal Loan track record is not available, then any other loan track record
plus own house is mandatory.
Self Employed individuals with repayment track record to be treated as Categor y C.

Repayment of the loan should be in 12/ 24/ 36 months in Equated Monthly
Installments (EMI) from the date of disbursement.

77
3) OTHERS:
Repayment of the loan should be in 12 to 48 months in Equated Monthly Installments
(EMI) from the date of disbursement by the way of post dated cheques in cases where
check-off facility is not available. Otherwise, the monthly installment will be received
from the employer under check-off facility.
PRE-PAYMENT PENALTY:

NIL
2) OTHERS:
NIL
RESIDENCE CRITERIA:
1) SALARIED:
For salaried individuals present residence should not be less than 6 months
(mandatory).
If present residence is less than 6 months, then it should be company provided
or own house or transfer case. Anything other than the listed case, guarantor
(local) mandatory.
For Bachelor/ Spinster salaried individual staying alone, 3 rd party guarantor is
mandatory. Also in this case native place Field Investigation (FI) is mandatory
either by RAC/ SRAC present in that location and if not, then tele- verification
has to be done.
Maximum loan amount this segment (Bachelor staying alone) is Rs.1.50 Lacs.

78
2) SELF EMPLOYED (OTHRES/ PROFESSIONALS):
Minimum one year of present residence is mandatory.
Less than one year of present residence for Self Employed (Others &
Professionals) allowed for either own house or parent‘s house (mandatory).
For Bachelor/ Spinster self employed individual staying alone, 3rd party
guarantor is mandatory. Also in this case native place Field Investigation (FI)
is mandatory either by RAC/ SRAC present in that location and if not, then
tele- verification has to be done.
Maximum loan amount this segment (Bachelor staying alone) is Rs.1.50 Lacs.
PHONE CRITERIA:
1) For Salaried, Professionals & Self Employed, a 3 months old residence phone
(landline) is mandatory.
2) If landline is not there than Maximum Loan Amount is Rs.75000/-. In this criteria,
discretion to RAC Heads for CAT A/B Companies for deciding for Loan Amount.
3) For Self Employed (Other & Professionals), separate landline is mandatory at office
as well as residence. Incase office and residence is same, then permitted for own
house.

79
DISBURSEMENT:
The loan will be credited to the borrower‘s Savings Bank Account with the Branch, by pay
order favoring the borrower, or as per the borrower‘s instructions.
Service Charges:

NIL
2) OTHERS:
2% of loan amount is applied. It is to be collected along with the application
form preferably by means of a cheque drawn on the account from which PDCs
would be given.
In the event of rejection of the loan application, only 3/4 th of the collected fees
will be refunded.
The processing fees would have to be realized prior to the sanction of the
facility.
In case the processing fee‘s cheque bounces, the proposal is to be rejected.
OTHER CONDITIONS:
Bank reserves the right to reject any application without assigning reasons thereof
The applicant will undertake to inform the Bank as and when there is a change in address
/ employment
The account will be recalled in case of dishonour of cheques consecutively for 3 times.
The terms & conditions mentioned above and elsewhere under the scheme are subject to
modification from time to time solely at Bank's discretion

80
PAPERS REQURIED:
To Be Submitted Along With The Application:
Purpose Salaried Others
Proof of Identity Passport / Voter's Card / Passport / Voter's Card / Driving

Driving Licence & Licence & Photograph
Photograph
Proof of Income Latest salary slip showing IT Returns for the last 3 years and
all deductions or Form 16 Computation of income for the
alongwith current dated last 3 years certified by a CA
salary certificate
Proof of Residence Ration Card/ Passport Ration Card/Passport
Latest Electricity Bill/ Latest Electricity Bill/
Latest Telephone Bill/ Latest Telephone Bill/
Latest Credit Card Bill Latest Credit Card Billing
Bank Statement / Pass Last 6 months Last 6 months

Book where salary /
income is credited
Guarantor Form Yes (Optional) Yes (Optional)

81
AXIS BANK LTD
PERSONAL POWER - SALARIED
CREDIT SCORING SHEET
Name:
A/c No.
Sr.No. Parameters Total Ex. G AA A Criteria

Marks
1.
Personal
Information
10 10 8 6 2 EX 21 years to 35 years.
Age G 36 years to 50 years.
AA 51 years to 55 years.
A more than 55 years.
2. Educational 5 5 3 2 2 EX – Post Graduate /
Qualifications Professional
G – Graduate
AA/A – Under Graduate
3. No. of 10 10 6 4 0 EX – Upto 4
Dependents

82
Marks
G–5
AA – 6
A – More than 6
4. Income
Information
15 15 12 10 2 EX => Rs. 300000

Net Present
G s => Rs. 200000
Income From All
<Rs.300000
Sources
AA =>Rs.90000 <
Rs.200000
A => Rs. 50000 <

Rs.90000
5. Monthly 20 20 15 12 6 EX < 20%

Instalment of
G < 35%
Loan / Net
Monthly AA < 45%
Income A > 45% , < 55%
(from all sources)

83
Marks
6. Net Worth
Information 5 5 3 2 0 EX – Own (house + 4

Wheeler)
Owning of house
& vehicle G– Own house only
AA – Own 4 Wheeler / 2
Wheeler
A -- Neither
7. Has Phone 2 2 0 0 0 EX – Yes
G/AA/A – No
8. Net Assets 10 10 8 6 4 EX Market Value

>Rs.500000
G Market Value >

(Total Assets –
Rs.300000
Liab.)
AA Market Value >
Rs.200000
A Market Value >

Rs.100000
9. Organisation EX – Government / Public

Information

84
Marks
Organisation Sector Undertaking
5 5 4 2 0 MNC
G – Public Limited
Company
AA – Private Limited
Company
10. Designation 3 3 2 1 1 EX – Executive / Senior
Manager
G – Officer
AA / A – Others
11. Length of Service 5 5 3 2 0 EX > 3 Years

in present job
G > 2 Years
AA > 1 Years
A < 1 Years
12. Total length of 5 5 3 2 0 EX > 3 Years

Service
G > 2 Years
AA > 1 Years
A < 1 Years

85
Marks
13. Credit Card EX - Gold / Diners

Information
G - Silver / Blue / Classic /
i) Type of Credit Executive / Sterling Silver /
3 3 2 0 0
Card others
AA/A - No Card
EX< 2 Years
ii) Members 2 2 1 0 0 G – 1-2 years
since
AA> 1 year, A – No Card
Total Marks 100
CREDIT SCORING RATING
Point 1 2 3 4 5 6 7 8 9 10 11 12 13 Total
Nos. Marks
Max 10 5 10 15 20 5 2 10 5 3 5 5 (3+2) 100

Scores
Marks
Scored
Cut off Score = 60%

86
AXIS BANK LTD
PERSONAL POWER – SELF EMPLOYED
Name: Shri / Smt. _________________________________
A/c No._________________

Marks
1.
Personal
Information
10 10 8 6 2 EX - 30 years to 45 years.
Age G - 24 years to 30 years

(others) 46 years to 50
years(professional)
AA - 51 years to 60 years.
A - more than 60 years.
Qualifications Professionals (Full time

Degree course e.g.
MBBS,BDS, Architect,
Engineers, Chartered
Accountants, Company

87
Marks
Secretary, Cost
Accountants, MBAs.)
G – Graduate
3. No. of 10 10 6 4 0 EX – Upto 4
Dependents
G–5
AA – 6
A – More than 6
4. Income
Information
15 15 10 8 5 EX => Rs. 300000

Net Present
G => Rs. 200000
Income From All
<Rs.300000
Sources
AA=>Rs.100000 <
(After ploughing
Rs.200000
back
depreciation) A> Rs. 75000 < Rs.100000
5. Monthly 20 20 15 12 6 EX < 25%

Instalment of
G < 40%
Loan / Net

88
Marks
Monthly AA < 50%
Income A > 50% < 60%
(from all sources)
6. Net Worth
Information
Owning of house
5 5 3 2 0 EX – Own (house + 4
& vehicle
Wheeler)
G– Own house only
AA – Own 4 Wheeler / 2
Wheeler
A -- Neither
G/AA/A – No

89
Marks
8. Net Assets 15 15 12 8 4 EX Market

Value>Rs.400000
G Market Value >

(Total Assets –
Rs.300000
Liab.)
AA Market
Value>Rs.200000
A Market Value >

Rs.100000
9. Organisation
Information
Organisation and
8 8 6 3 2 EX–Self-employed
Designation
professional / Director of
Pvt. Ltd Co. (with 50 or
more staff)
G – Director of Pvt. Ltd.

Co. with less than 50 staff
/ Partner in a partnership
firm with 25 or more
employees
AA – Partner in a partnership
firm with >10 and < 25
employees / Proprietor of a
firm with more than 25
employees

90
Marks
A – Proprietor of a firm
with < 25 employees /
Partner in a partnership
firm with <10 employees
10. Length of Service 5 5 3 2 1 EX > 3 Years

in current
G > 2 Years
business
AA > 1 Year
A < 1Year
11. Credit Card

Information
EX - Gold / Diners
G - Silver / Blue / Classic
3 3 2 0 0
/
i) Type of Credit
Card Executive / Sterling
Silver
/ others
AA/A - No Card
ii) Member 2 2 1 0 0 EX < 2 Years

Since
G 1 – 2 years
AA > 1 Year
A - No Card

91
Marks
Total Marks 100
Point 1 2 3 4 5 6 7 8 9 10 11 Total Marks

Nos.
Max 10 5 10 15 20 5 2 15 8 5 3+2 100

Scores
Marks
Scored
Cut off Score = 60%

92
STUDY POWER
Purpose
To provide financial support to students for pursuing higher education in India and abroad.
To be provided to students who have obtained admission to different courses.
Quantum of Loan
ALL CATEGORIES
The quantum of finance under the scheme is capped at Rs.10 lacs for studies in India and Rs.20
lacs for studies abroad, which would cover tuition fees, hostel charges (if any), cost of books,
etc. The minimum amount of loan would be Rs. 50,000/-.
Expenses Considered for the Loan:
Fees payable to college/university/hostel

Examination/Library/Laboratory fees
Purchase of Books/Equipment/Instruments
Caution/refundable deposits supported by the Institution‘s bills/receipts
Travel expenses/passage money for studies abroad
Purchase of computers (when essential for the completion of the course)
Any other expenses required to complete the course, like study tours/project work/thesis, etc.
Margin
ALL CATEGORIES
No margin for loans upto Rs. 4 lacs. For loans above Rs. 4 lacs, 5% margin for studies
within India and 15% for higher studies overseas.

93
Rate of Interest
Quantum of Loan General Customers & UTI Employees

AXIS Bank Employees
Rate of Interest At PLR, currently not exceeding 15% p.a. 8% p.a. – simple
interest
Repayment
ALL CATEGORIES
The loan would be repayable in a maximum of 84 instalments from the commencement of

repayment. The 1st instalment would be due 1 year after the completion of the course or 6
months after getting a job, whichever is earlier. However the total tenure of the scheme, i.e.
from the date of the 1st disbursement to the date of the last instalment, should not exceed 12
years. The periodical interest applied on the loan account, prior to the commencement of the
actual repayment, should be recovered from the account of the co-applicant, as and when
due.
Role of the Guardian
ALL CATEGORIES
The parent(s)/guardian of the student would be treated as a co-applicant of the loan. His/her
role would be, necessarily, like the primary debtor. He/she would be responsible for the
payment of the interest accrued on the loan account, prior to the commencement of the
EMIs.

94
Security
ALL CATEGORIES
Third Party Guarantee: It is necessary to have a 3rd party guarantee agreement in place,
especially in cases where the loan would not be secured by liquid collaterals (e.g. Units,
FDs, NSCs, paid-up LIC policies, etc.). The guarantor should not be a close relation of
the student (i.e. parents/siblings/spouse, etc.) and should be good for 100% of the loan
amount. No 3rd party guarantee need be insisted upon for loans upto Rs. 4 lacs.
Computers and other related hardware financed under the scheme would have to be,
necessarily, charged to the Bank as primary security.
Collateral Security: Educational Loans sanctioned would need to be secured by collateral

securities, to the minimum extent of 100% of the loan amount. The requirement of
obtaining 3rd party guarantee need not be insisted upon in cases where liquid securities
adequately cover the total loan. Such collateral securities would include –
First or pari-passu charge on unencumbered land and building

Govt. Securities / PSU Bonds
Surrender value of ‗paid-up‘ insurance policies
Demat shares/securities
Units and other pledgeable securities like NSCs, Bank FDs
Other freely transferable securities like KVPs and IVPs
As in the case of 3rd party guarantee, no collaterals need be insisted upon for loans
upto Rs. 4 lacs.

95
Life Cover:
In educational loans, since the ultimate exposure is on the earning capacity of the student,
post-completion of the course, it is desirable, in the interest of the student, to organize a Life
Insurance policy assuring the life of the student, the sum assured being at least 100% of the
loan amount. This policy should be assigned in the name of the Bank and the Bank must
ensure that the policy is kept alive during the currency of the loan. To ensure this, the annual
premium may be included in the computation of the loan requirement, along with the tuition
fees and other recurring charges. Further, the future income of the student needs to be
assigned in favour of the Bank for meeting the 96nstalment obligations.
Disbursement:
The loan will be disbursed in full or in suitable instalments taking into account the
requirement of funds and/or fee schedule as assessed by the Bank directly to the educational
institution/ vendor of books/equipment/instruments to the extent possible.
Processing Charges/ Admission Fee: NIL
Penalty for early closure: NIL
Other Conditions:
Bank reserves the right to reject any application without assigning reasons thereof the
applicant will undertake to inform the Bank as and when there is a change in address /
employment. The terms & conditions mentioned above and elsewhere under the scheme are
subject to modification from time to time solely at Bank's discretion.

96
Papers required to be submitted along with application
Proof of Identity Passport / Voter's Card / Passport / Voter's Card / Driving

Driving License & Photograph License & Photograph
Proof of Income Latest salary slip showing all IT Returns for the last 2 years and
deductions or Form 16 along Computation of income for the last
with current dated salary 2 years certified by a CA
certificate.
Proof of Ration Card/ Ration Card/

Residence
Latest Electricity Bill/ Latest Electricity Bill/
Latest Telephone Bill/ Latest Telephone Bill/
Passport/Latest Credit Card Passport/Latest Credit Card Billing

Bill
Bank Statement Last 6 months Last 6 months

/ Pass Book
where
salary/income is
credited
Guarantor Form Yes Yes
Other As per Annexure As per Annexure

documents

97
Documentation at Branches:
ALL CATEGORIES
Credit Scoring Sheet
Educational Loan Application Form
Educational Loan Scheme Appraisal Form
Agreement for Term Loan for Educational Loan (tripartite between the Student, the
Guardian and the Bank)
Guarantee Agreement for Educational Loan Scheme
DP Note
DP Note Delivery Letter
Letter of Waiver
Deed of Ratification (to be executed and obtained in case the Student is a minor at the time
of sanction/disbursement of the loan)
Deed of Assignment of Future Income of the Student to meet the EMI Obligations
Delegation:
Branches headed by SVPs/ Othe r Branches
The loans will be sanctioned and disbursed at the branch level and the individual
sanctions would be reported to Zonal Office at monthly intervals in a pre -designed
format for review by the Zonal Office.

98
No relaxation /waivers would be permitted in respect of rates of interest, eligibility and
security for loans under this scheme.
STUDY POWER – APPLICATION FORM
Particulars of Student and the Course of Study
Full Name of Student :
Date of Birth :
Educational Qualifications :
Proposed Course of Studies :
Name of Institution/University :
Duration of Course :
Date of Commencement of Course :
Expected Monthly Income of Student
After Completion of the Course :
Particulars of Parent / Guardian
Full Name :
Residential Address (with phone no.) :
Office Address (with phone no.) :
Date of Birth :
Date of superannuation :
No. of dependants :
Gross Monthly Salary : Rs.

99
Deductions from Salary : Rs.
Net Monthly Salary : Rs.
Details of Present Borrowings –
Sl. No. Date of loan Amount of Loan Repayment Security

Plan
Original Present
Particulars of Loan Applied For:
Total Expenses for the Course : Rs.
Details of non-repayable
studentship/fellowship, etc.
available to the student : Rs.
Details of repayable loan /
scholarship or other financial
assistance available : Rs.
Details of funds available
from family sources for
the course : Rs.
Amount of loan applied for : Rs.

100
Security Offered
Immovable Property Title Deed In the name of Address
(Lease / Freehold) dated
Other Securities:
Name of Security Distinctive Nos. Name of Holder Amount
Third Party Guarantee

Name of Guarantor :
Residential Address :
Office Address :
Date of Birth :
Date of Superannuation :
Declaration:
We certify that the information furnished above is correct to the best of our knowledge and
belief. We promise to abide by the terms and conditions governing the loan facility, if
sanctioned by the Bank.
Signature of Student Signature of Guardian
Date: Date:

101
STUDY POWER – APPRAISAL FORM
Name of Student :
Name of Guardian :
Computation of Loan Requirement:
Tution Fees
1st year of the course : Rs.
2nd year of the course : Rs.
3rd year of the course : Rs.
4th year of the course : Rs.
Examination and
Other Recurring Fees : Rs.
1st year of the course : Rs.
2nd year of the course : Rs.
3rd year of the course : Rs.
Essential Books, Stationery &
Equipments, if any : Rs.
Maintenance Expenditure
Rent : Rs.
Board : Rs.

102
Clothes : Rs.
Insurance Premia for the duration
Of Loan and Start-up Period : Rs.
TO T AL : Rs .
Less:
Non-repayable scholarship/
Fellowship, etc. : Rs.
Repayable loan scholarship
Or other financial asst. : Rs.
Funds available from family: Rs.
TO TA L : Rs.
Loan Amount Recommended : Rs.
Repayment Schedule:
Date:
Branch Head
Branch:

103
AXIS BANK LTD
STUDY POWER
FOR EVALUATING THE CO-APPLICANT
Name:
A/c No.
Marks
1.
Personal
Information
EX<50 and > 35 Yrs.

3 3 2 1 1
Age
G>25 and < 35 Yrs.
AA>50 and < 55 Yrs.
A>55 Yrs.
Qualifications Professional
G – Graduate
3. No. of 4 4 1 0 0 EX – Upto 2
Dependents/
G – 3 or 4
Children
AA/A – More than 4

104
Marks
5. Income
Information
EX > Rs.2,20,000
15 15 10 8 5
i)Net Annual G> Rs.170000 - <Rs.220000
Income (For
AA>Rs.120000-< Rs.170000
salaried)
A>Rs.90000 - < Rs.120000
ii) Net Annual 15 15 10 8 5
Income (For
others)
6. Monthly 20 20 16 12 8 EX < 20%
Instalment of Loan
G < 30%
/ Net Monthly
AA < 40%
Income
A > 40%
(from all sources)
7. Net Worth
Information
Owning a house EX – Own (Not Mortgaged)

10 10 5 0 0
G – Own (Mortgaged)
G/AA/A – No

105
Marks
9. 5 5 3 2 0 EX – 4 Wheeler fully owned

Owning of vehicle
G – Company provided/
Hypothecated 4 Wheeler
AA- Two Wheeler
A – Does not own a vehicle
10. Net Assets (For 8 8 6 4 2 EX Market Value
salaried) >Rs.400000
G Market Value > Rs.300000
AA MarketValue >
(Total Assets –
Rs.200000
Liab.)
A Market Value > Rs.100000
Net Assets 10 10 7 4 2
(For others)
(Total Assets –
Liab.)
11. Collateral Assets 14 14 7 2 0 EX – when > 75% of loan
(LIC/NSC etc.)
G – when < 75% and >50%of
loan
AA – when <50% and

>25%of loan
A – when < 25% of loan
12. Organisation EX – Government / Public

106
Marks
Information Sector Undertaking/MNC
Organisation (*) G– Public Limited Company
2 2 1 0 0
13. Length of Service 4 4 3 2 1 EX - > 5 Years
in present job /
G - > 4 Years
current business
AA-> 3 Years
A - > 2 Years
14. Information on
Banking
EX – Over 1 year
Banking with UTIB G/AA/A – 6 Months – 1 year
/
3 3 2 2 2
Account with UTIB
15. Information on 2 2 0 0 0
EX – Over 80%
student
G/AA/A – less than 80%
Aggregate score
in class XII Board
Exam
Total Marks 100

107
Point 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Total
Nos. Marks
Max 3 4 4 4 15/ 20 10 2 5 8/10 14 2/0 4 3 2 100

Scores 15
Marks
Scored
Cut off Score = 70%
(*)Not applicable in case of self-employed / professionals, etc.

108
LOANS AGAINST MUTUAL FUNDS
The bank proposes to introduce a scheme for generating liquidity for the mutual funds
customers by giving them an overdraft facility against mutual funds.
The details of the scheme as under:
Target Clients
Loans against the primary security of mutual funds unit only in dematerialized form
will be given to the individuals
Nature of Facility
The loan will be extended as: Overdraft facility against a list of approved mutual fund
schemes only.
Period of Loan
The facility shall be renewed/reviewed after 12 months from the date of sanction of
facility.
Loan Amount
 Minimum Amount – Rs 25,000 (Twenty five thousand only)
 Maximum Amount –Rs 20,00,000 (Twenty lacs only)
Eligibility Criteria
 Only Resident individuals.
 Applicant‘s age requirement: Min 18 years.
 Units should be in the name of the borrower or guarantor (third party
pledgers). Third party pledgers have to be family members of the borrower.
Acceptable relationships include spouse, parents, and children above 18 years,

109
brothers, sisters, in- laws, grandparents, grandchildren (above 18 years of age).
Third party pledgers to sign an undertaking / guarantors form for this.
 Unit holders should not be a minor.
Margin
Minimum 50 % margin to be maintained against latest valuations (as defined later)
Activity
 NAV file submission – by RB, Wealth Management Group
 Drawing Power calculation – NAV file upload - Daily –at RAMG/DCC
 Uploading of Finacle balance file to Dpintranet -daily (For monitoring
purpose)- at RAMG/DCC.
 Uploading of drawing power file from Dpintranet to Finacle - daily – at
RAMG/DCC.
Scheme Details
 Overdraft account to be opened with OD limits for providing this facility
 Third party units accepted for providing this facility. Third party pledgers have
to be family members of the borrower. Acceptable relationships include
spouse, parents, and children above 18 years, brothers, sisters, in- laws,
grandparents, grandchildren (above 18 years of age). Third party pledgers to
sign an undertaking / guarantors form for this.
 Units should be on the approved list of securities of the Bank, which would be
revised periodically.
 Loans can be sanctioned against units of single fund or from a basket of funds
(2 or more).

110
Charges
Types of Charges To be applied to customers
 Rate of Interest * 12 % p.a.
 Processing fees * 2 % + service tax
 Penal Interest 2% above normal rate.
 Renewal fees Rs.200/-+ stamp charges, if

any
* Waiver of PF to the extent of 1% and rate of interest to the extent of 0.50% p.a. will rest
with the sanctioning authority.
Service tax to be borne by the customer.
Valuation & Scheme eligibility
A scheme will be approved only when:
 The same is listed in stock exchange (like ETF) or repurchase facility is available
and the scheme should not be close ended
 The scheme should not be under lock- in period
 Monthly Income schemes and ELSS tax saving schemes are not eligible
A list of approved schemes is attached. Going forward, the research group of Wealth
Management team, RB will advise on modifications of the scheme.
Mutual funds units of approved schemes will be valued either at Net Asset Value (NAV) or
repurchase price or the market value, whichever is the least. The information regarding the
above information would be uploaded into the system on regular basis for calculation of
drawing power.

111
Portfolio Monitoring
The portfolio will be monitored on a Loan to Value basis (LTV). The LTV will be
available on the daily reports generated customer wise.
The proposed follow- up grid is as follows:
LTV** Action Responsibility
50-65% Telecall customer and/or Branch Head/ RAC Head or delegate.
Sending letter for cash

deposit/ additional pledge
>65% Redemption notice to Branch Head/ RAC Head or delegate.

customer
> 75% Units redemption Centralised Monitoring unit send information on

delinquent customer to branch
Customer informed about lien invocation by the

branch
CO will redeem units confirm back the same to the

Branches.
**LTV is defined as the outstanding in account divided by the NAV value of pledged units

112
Process on redemption of units of a delinquent customer
 It is mandatory to redeem units at LTV > 75%. Branches/RACs must ensure
that the sale process as defined above is initiated as soon as the LTV crosses
75%.
 Central Office (RAMG) will be responsible for unit redemption/ pledge
cancellation. CO will send the request for pledge cancellation and redemption
to the concerned fund house. Customer‘s OD account will be directly credited
after realization of redemption.
 The sanctioned limit available in Finacle have to be immediately cancelled
once the units are sent for redemption. Appropriate changes have to be made
in Dpintranet.
 Once all the charges are recovered, balance needs to be refunded to the
customer. Any deviation from the aforementioned procedure will have to be
approved by VP-RB-Assets,CO.
 Branches will have to ensure that post redemption intimation is sent to the
customer.
 Before and after request for redemption/ pledge cancellation is sent to the fund
house, appropriate noting should be made in Dpintranet system.
Process on redemption of units of a regular customer

 Branch will forward the original request letter for redemption (issued by the
customer) to RAMG.
 RAMG will forward the customer‘s letter to the fund house for redemption.
The above letter will be accompanied by Bank‘s request letter for direct credit
of redemption proceed into client‘s loan account.
 Once the redemption proceeds get credited into the loan account, necessary
entry should be made in Dpintranet system and limit has to be cancelled in
finacle by RAMG.
 In case of voluntary pledge cancellation by the customer, customer will first
repay the outstanding in the loan account. Thereafter customer‘s request for
pledge cancellation has to be forwarded to RAMG.
113
Operations procedure
 The scheme will be booked in Finacle (GL Head- 67103, scheme code-
ODMF) and customer master has to be opened at the DpIntranet system, both
at the branch level only. Thereafter branch will forward the pledge request
letter and transfer request form (if required by the fund house) (issued by the
customer- Annexure - I) to RAMG.
 RAMG will submit the pledging requests of customers to Registrars or Fund
houses/ funds house to mark a lien in the Bank‘s favor.
 All limit set-ups will happen only after receipt of confirmation of pledge by
central ops.
 Once limit set up happens in Dpintranet, Finacle limit will be uploaded next
day.
 Processing/ renewal fees will be booked under GL Head 4900105
Delegation of Powers:
The Delegation of Powers to be followed for Loan against mutual funds are as follows:
Particulars President- Branch Heads /RAC Heads(at Managers – at

RB, Zonal the minimum level of AVP), Branch
Heads Vice President- Retail Assets- /RACs/SRACs
CO
Loan against 20.00 20.00 10.00

mutual funds for
individuals
@ As per the guidelines of RBI, maximum loan amount against mutual funds is Rs 20.00
Lacs for mutual funds units in dematerialized form.

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Purpose of Loan & Other Conditions
 Loans against mutual funds to individuals shall be provided only to meet
customer‘s personal needs. No loan under this segment would be granted for
investment in capital market instruments (shares/ debentures/ Bonds) or
further investment in any mutual funds schemes.
 Declaration to be taken from customer by the Branch / RAC detailing his
existing loan against mutual funds from other banks / sources.This is stated in
the Application form and needs to be filled in.
Other Guidelines (Jointly held accounts)

 If borrower has jointly held units, then second holder be signed as a guarantor
rather than co-borrower. While adding the second named person as a
guarantor, a letter of guarantee should to be obtained from the second holder.
The Personal Guarantee should state that, in consideration of the Bank
granting loan to the first holder, the guarantor guarantees the repayment in
case of any default by the principal borrower. A format of ‗Personal
Guarantee‘ is enclosed.
 The Borrower as well as the guarantor (owner of units) should execute
agreement-cum-pledge and letter of continuing security. Borrower will sign on
service charge declaration, letter of waiver and DPN & DPN delivery letter.
Personal Guarantee form will be signed by guarantor only whereas Irrevocable
POA will have to be signed owner of units only.
Documentation
Documentation for Loan Against Mutual Funds to individuals is as follows:
 Loan application form.
 Proof of Identity and residence (as per Bank‘s KYC norms).
 Latest Statement of holdings provided by the Mutual Funds house
 Photograph (applicant & Co-applicant/Guarantor)
 Overdraft agreement cum letter of pledge cum guarantee
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 Demand Promissory Note and Letter of Continuity
 Service charges declaration
 D P Note delivery letter
 Letter of waiver
 Irrevocable Power of Attorney in favour of the Bank
 Letter of undertaking
 Duly signed undated transfer form, if required by the Fund house (e.g. UTI
Mutual Fund schemes)
 Pledge request letter (in triplicate)
 Personal Guarantee of guarantor
The application forms will be printed centrally at CO/RAMG and sent to the Zonal Offices
who will send this across to the Branches.
Process Flow for pledging units of Mutual Funds
Most of the mutual fund houses do not issue certificate to their holders, instead t he holders
get statement of account which indicate folio number or account numbers of the units held by
them.
In order to create a pledge/mark lien in favour of The Axis Bank Ltd. the following
procedures have to be complied with:
 Letter for pledging units(in triplicate) alongwith transfer form, if required, to be

obtained from the customer (annexure-1). All the copies have to be sent to RAMG.
Out of these, one copy is retained with the Bank and two copies are sent to the Fund
House/Register (Annexure)
 A copy of the latest statement of account of the customer indicating the units under
his/her name has to be attached with the above.
 Account will be opened in Finacle at the branch/ base branch of RAC and alongwith
the same reference no. the above documents will have to be submitted to Centralized
processing Unit at RAMG
 A covering letter from the Bank which requests the Fund house/Registrar to mark lien
in our favour to be submitted to registrar/Funds House.

116
The fund house/ register will accept and acknowledge a copy of the above and send us a
confirmation via email/ courier after marking lien of the same. The exact modus operandi
may differ from one fund house to another.
After the centralized processing unit receives the confirmation as stated above, the same will
be entered in the system centrally and our DpIntranet system will pick up the appropriate
drawing power from backup data of mutual funds NAV/repurchase price. The drawing power
will be uploaded in Finacle system next day of data entry in DpIntranet.
Guidelines on Lending to Priority Sector-Weaker Sections
The bank refer to Reserve Bank of India‘s circular on the revised guidelines on lending to the
priority sector, wherein it is informed that the targets and sub-targets under priority sector
lending would be linked to Adjusted Net Bank Credit (ANBC) (Net Bank Credit and
investments made by banks in non-SLR bonds held in HTM category) or Credit Equivalent
amount of Off- Balance Sheet Exposures (OBE), whichever is higher, as on March 31 of the
previous year.
The sub-targets set under priority sector lending for Weaker sections is 10 percent of ANBCs
or credit equivalent amount of Off-Balance Sheet Exposure, whichever is higher.
The weaker sections under priority sector include the following:
a) Small and marginal farmers with land holding of 5 acres and less, landless laborers,
tenant farmers and share croppers;
b) Artisans, village and cottage industries where individual credit limits do not exceed
Rs.50,000/-;
c) Beneficiaries of Swarnjayanti Gram Swarozgar Yojana (SGSY);
d) Scheduled Castes and Scheduled Tribes;
e) Beneficiaries of Differential Rate of Interest (DRI) scheme;
f) Beneficiaries under Swarna Jayanti Shahari Rozgar Yojana (SJSRY);
g) Beneficiaries under the scheme for Liberation and Rehabilitation of Scavengers
(SLRS);
h) Advances to Self Help Groups;
i) Loans to distressed poor to prepay their debt to informal sector, against appropriate

117
Collateral or group security;
j) Loans granted under (a) to (i) above to persons from minority communities as may be
notified by Government of India from time to time.
k) In States, where one of the minority communities notified is, in fact, in majority, item
will cover only the other notified minorities.These States/Union Territories are
Jammu and Kashmir, Punjab, Meghalaya, Mizoram, Nagaland and Lakshadweep.
Subsequently, RBI, in its Annual Policy Statement has observed that banks have not been
achieving the sub-target of 10 percent for lending to weaker sections. In order to ensure
greater flow of credit to the weaker sections, RBI has proposed to take into account shortfall
in lending to weaker sections also for the purpose of allocating amounts to the domestic
Scheduled Commercial Banks for contribution to Rural Infrastructure Development Fund or
funds with other financial institutions as specified by RBI, with effect from April 2009.
As a first step towards stepping up of credit and to ensure timely and hassle- free flow of
credit to the weaker sections, we have to ensure that our lending to weaker sections are being
correctly reported. We, therefore propose to undertake the following exercise:
Proper classification of schematic agricultural loans to farmers under Kisan Power,

Kisan Power Plus, Power Gold, Power Gold Plus, Commodity Power etc., and non-
schematic agricultural loans. Branches / Agri Clusters are advised to verify the details
of the land holding of the farmers for the existing loan accounts and classify the
eligible farmers under the category of small and marginal farmer under the code
DA05-Direct Agriculture –small and marginal farmers in Finacle, wherever it has not
been done.
Further, efforts should be made to identify the SC/ST borrowers and borrowers
belonging to minority communities under weaker section and correctly enter the same
by modifying the Cust ID with appropriate information under CUMM option in
Finacle.

118
Car Loan
Axis Bank's Power Drive will help realize your dream. With some of the world's finest cars
now available in India don't let the price tags discourage you. Power Drive will bridge that
distance by financing a major part of the cost of your new car. So, you don't have to put the
brakes on your ambition.
Loan value calculated as per the on-road-price of the vehicle

Attractive interest rates
LTV of upto 85% of the on-road-price on selected models
Loans available for salaried and self employed individuals, proprietorships and
partnership firms
Special schemes for Axis Bank Salary and Priority accountholders
No income proof schemes available
Loans offered from Rs. 1 lac onwards
Loans tenure from 1 year to 7 years.
Eligibility
Salaried Individuals:
Minimum age of applicant: 21 years

Maximum age of applicant at loan maturity: 58 years
Income: Minimum income of Rs. 1 Lac p.a. for selected models and Rs. 2 Lac p.a.
for others
Income eligibility: As per latest salary slip or Form 16
Employment: Minimum 2 yrs cumulative experience.

119
Self-employed Individuals:
Minimum age of applicant: 21 years

Maximum age of applicant at loan maturity: 65 years
Income: Minimum income of Rs. 1.5 Lac p.a. to Rs 2 Lac p.a. as per the category of
the car being financed
Income eligibility - As per latest ITR and computation of income
Employment: Minimum 3 yrs cumulative experience in business.
Documentation
Pre-approval Documents:
Age proof
ID proof
Application form
Photograph
Residence proof
Income proof
Bank Statement
Signature verification
Performa invoice

120
Post Sanction / Pre Disbursement Documentation:
Loan Agreement duly signed along with RTO set.
Post Dated Cheques (PDCs) / ECS form / Standing Instruction (SI) request.
Margin money receipt.
Priority Account Scheme
Eligibility:
All Priority customers, with a vintage of 12 months
AND
A minimum Average Quarterly Balance as below:
For Cat A and Cat B cars the account must have an AQB of Rs. 1 Lac for last 2
completed quarters.
For Cat C cars the account must have an AQB of Rs. 2.5 Lac for last 2 completed
quarters.
For Cat D cars the account must have an AQB of Rs. 5 Lac for last 2 completed
quarters.
Maximum loan amount restricted to 3 times the AQB in the last 2 quarters
Benefits:
100% Waiver of Processing Fees

Waiver of Income documents & bank statements
All other documentation and terms of the loan will remain the same.

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Salary A/c Scheme
Eligibility:
All customers having their Salary A/c with Axis Bank since the past 3 months and
above will qualify under this scheme
30 times Average Net Salary Credited during last 3 months
Special Benefits:
100% Waiver of Processing Fees

Waiver of Salary Slips & Bank Statements
All other documentation and terms of the loan will remain the same.
Fair P ractice Code For Lenders

As directed by the Reserve Bank of India, the Bank has adopted modified Fair Practice Code
for lenders as approved by the Board of Directors. The salient features of the same are:
i) Applications for Loan
In the loan application form, the Bank shall provide comprehensive information including
information about fees and charges if any payable for processing and amount of such fees
refundable in case of non acceptance of application, prepayment options and other matter
which affects the interest of the borrowers, of all categories of loans, irrespective of the
amount of loan sought by them.

122
ii) Processing
a. The Bank shall provide acknowledgement for receipt of all loan applications
indicating the time frame within which the application will be disposed of.
b. The Bank shall verify the loan application and if additional details / documents are
required, these will be sought from the applicant.
c. For all categories of loans and irrespective of any threshold limits, the Bank will be
expected to process the application without delay. In case the application is turned
down, the Bank will convey in writing to the applicant the reasons for rejection
within one month.
iii) Loan Appraisal and Terms and Conditions
a. The sanctioning authority will be expected to ensure proper assessment of the credit
application as per the extant instructions and credit policy of the bank. The
availability of adequate margin and security will not be a substitute for due diligence
on the creditworthiness of the customer.
b. All the terms and conditions and other caveats will be duly communicated by an
authorized official of the Bank to the customer in writing.
c. The acceptance of the customer will be obtained on the sanction letter with the
customer's signature under the caption "I/WE ACCEPT ALL THE TERMS AND
CONDITIONS WHICH HAVE BEEN READ AND UNDERSTOOD BY ME/US".
d. A copy of the loan agreement along with all the enclosures quoted in the loan
agreement will be furnished to the customer at the time of issue of the sanc tion letter.

123
e. The sanction letter / loan agreement will clearly state that the credit facilities will be
extended solely at the discretion of the Bank and that drawings under the following
circumstances will be solely at the discretion of the Bank.
i. Drawings beyond the drawing power / sanctioned limits.
ii. Honouring of cheques issued for the purpose other than specifically stipulated
in the sanction.
iii. Drawings in an account once it is classified as NPA.
iv. No drawings will be allowed in case of non-compliance of the terms and

conditions by the borrower.
v. Meeting further requirements of the borrower on account of growth in

business will be subject to proper review of the credit limits.
iv) Disbursement of loans including changes in terms & conditions
a. The disbursement will be done immediately on compliance of all the terms and
conditions of the sanction by the borrower and the branches need not refer to the
sanctioning authority for disbursement.
b. Any changes in the terms and conditions of the sanction such as interest and charges
will be notified to the borrower before effecting the changes.
c. Any changes in interest rate and charges will be effected only prospectively after
giving due notice to the borrower.
v) Post disbursement supervision
a. The post disbursement supervision, such as submission of periodical reports and

periodic inspection, will be stipulated at the time of issue of the sanction letter. The
sanction letter would also mention whether the Bank or the borrower will bear the
cost of inspection.

124
b. The Bank will issue notices to the borrowers in advance in case the Bank decides to
recall the advance / accelerate the payment / accelerate the performance under the
loan agreement. Or seek additional securities.
c. The Bank shall release all securities on receiving payment of loan. However, the
Bank may decide to exercise the right to set off any legitimate right or lien for any
other claim against borrower. In case the Bank decides to retain the security, the
borrower will be notified about the remaining claims and the documents under which
the Bank is entitled to retain the security till the relevant claim is paid / settled.
v) Others
a. The Bank will not interference in the affairs of the borrowers except where provided
for in the terms and conditions of the loan sanction documents, such as periodic
inspection, scrutiny of books of accounts, verification of stocks and book debts, and
scrutiny of QIS statements.
b. In case any information not disclosed earlier by the borrower has come to the notice
of the Bank, the Bank will have the right to elicit the necessary information from the
borrower and initiate action to protect its interest.
c. While, the Bank may participate in credit- linked schemes framed for weaker sections
of the society, the Bank shall not discriminate on grounds of sex, caste and religion
in the matter of lending.
d. In the matter of recovery of loans, the Bank shall not resort to undue harassment such
as persistently bothering the borrowers at odd hours and use of muscle power.
e. In the case of receipt of request for transfer of borrowal account, either from the
borrower or from other banks / FIs which propose to take over the loan, the Banks'
consent or objection, if any, shall be conveyed within 21 days from the date of
receipt of request.

125
vi) Grievance Redressal
Though the sanction of the loans will be at the sole discretion of the Bank, borrowers will
have an opportunity to appeal against the decision of the Bank's functionaries. Any such
grievance received from the borrower will be heard and disposed of by the next higher
authority. For this purpose the following review structure is available to the borrower,
Grievance against Reviewing Authority

decision of
Branch Head Zonal Head
VP / AVP Zonal Head
Zonal Head President (Credit) for corporate advances President (Merchant

Banking) for capital- market related advances andSenior Vice
President (Retail Banking) for retail advances.
Corporate Credit & Executive Director

Retail Loans (under
Retail Banking)
All others Chairman and CEO

126
AXIS BANK LTD
FOUR WHEELER LOANS – SALARIED/SELF EMPLOYED
Name: Mr. /Mrs./ M/S _________________________________

Location: Date:

Marks
1. Income
Information
25 25 20 15 0 EX => Rs. 300000

Gross yearly
G => Rs. 150000 <Rs.300000
Income
AA =>Rs.60000 < Rs.150000
A < Rs. 60000/ no income proof
2. Loan to Value
40 40 30 20 10 EX < =70%
G >70%< =80%
AA >80<= 90%
A > 90%
3. Residence EX – Own or parental house/

Information rented house more than 5 years/

127
Marks
15 15 10 5 0 company owned
G – Rented house < 5 years but > 1

year
AA- Rented house > 6 months < 1

year
A – Rented house < 6 months
4. Has Phone 10 10 7 5 2 EX – Has both landline & mobile
(landline/ mobile) G – Has landline only
AA- Has postpaid mobile only
A – Has prepaid mobile only
5. Total Length of 10 10 5 2 0 EX > 5 Years

Service/ business
G > 2 Years
AA > 1 Years
A < 1 Year
Total Marks 100

128
CREDIT SCORING
Point Nos. 1 2 3 4 5 Total Marks
Max Scores 25 40 15 10 10 100
Marks Scored
Cut off Score = 50
Test Result of Credit score card
Sl. Description Score card result Result of credit Remarks

No. assessment
1. Self employed 42 (fail) Case is not The scoring

professional recommended matched with
1 year into practice due to the assessment.
return filed for professional
However had he
Rs.85K instability factor
taken LTV of
Current residence
80%, he would
rented for 3 months
have scored 52
Having one phone at
and qualify
office
Looking for a car
with maximum LTV
2. A self employed 70(passed) Case is The scoring

manufacturer recommended matched with
as the profile is the assessment
aged 45 years
of a middle aged
filing return of
established
Rs.75K

129
Staying in rented businessman
house since birth
Has phone at both
residence and office
3. New joinee in a company 50 (passed) Case is The scoring

recommended matched with
Aged 25 years
as the customer the assessment.
Earning Rs.16K
has just got the
Working city is
passing score.
different from place
of birth (last 7
months in the city)
No phone at
residence
4. Self employed 50 (passed) Case is The scoring

Aged about 29 years
as a self the assessment
Business since 3
employed
years
IT of Rs.60K with residence
1 phone at resi stability
staying at rented
is an acceptable
residence since birth
profile
Looking for a car
with 80% LTV
5. Company official 60(passed) Case is The scoring
aged about 32 years
the assessment
net take home Rs.30

130
K p.m.
working > 5 years
but transferred to
city for last 6 months
6. Self employed 75(passed) Case is highly The scoring
aged 40 yeas
due to business the assessment
income Rs.50
stability and low
staying in parental
LTV factor.
house since birth
Phone both at resi
and office
Looking at LTV of
70%

131
Home Loan
Axis Bank's Power Home puts an end to your Real Estate troubles. Augment your reach and
buy the house that you've set your heart on.
Features
Balance Transfer facility
Doorstep service
Option to choose from floating rate or fixed rate
Loan Purposes
You can apply for Power Home for the following purposes:
Purchase of a plot of land and construction of a house thereon

Construction of a house on plot of land already owned
Purchase of a new house or flat
Residual age of the property should not be less than 30 years old (Home Acquisition
Plan)
Extension or renovation or repair of a house or flat already owned by self
(improvement or extension plan)
Take-over of existing Housing Loan (Balance Transfer)
Pre-allotment booking finance
Loan takeover with additional refinance (Balance Transfer + top up)
Loan to NRI for purchase of ready residential property only
Purchase of residential plots only

132
Eligibility
A) Salaried Individuals
Any individual who is in permanent service in Government or reputed companies

The applicant in all the cases should be above 24 years of age at the time of loan
commencement and up to the age of superannuation
B) Professionals
Professionals (ie, doctors, engineers, dentists, architects, chartered accountants, cost

accountants, company secretary, management consultants only) can apply
The applicant should be above 24 years of age at the time of loan commencement
and up to 65 years or less at the time of loan maturity
C) Self Employed Individuals
Any individual filing Income Tax returns can apply

commencement and up to 65 years or less at the time of loan maturity
Loan Amount
Limits on home loan
Minimum - Rs 1 lac
Maximum - Rs 50 lacs
Margin
20% in the case of home loans

25% in case of improvement or renovation loans

133
Documentation
Documents Required
The following documents are required along with your loan application:
Proof of Voter's ID card or driving license or Voter's ID card or driving

identity PAN card or photo credit card or license or PAN card or photo
employees ID card or defense or police credit card
or government department ID card
Proof of Latest salary slip showing all deductions IT returns for the last 2 years
income or Form 16 along with recent salary and computation of income for
certificate the last 2 years certified by a
CA
Proof of Bank account statement or latest Bank account statement or latest

residence electricity bill or latest mobile or electricity bill or latest mobile
telephone bill or latest credit card or telephone bill or latest credit
statement or latest LIC policy or card statement or latest LIC
insurance premium receipt or employers policy or insurance premium
letter certifying the current mailing receipt or latest NSC or other
address or latest NSC or other similar similar instruments indicating
instruments indicating the address or the address
existing house lease agreement
Bank Last 6 months Last 6 months

statement or
Pass Book
where salary
or income is
credited

134
Interest Rates & Charges
Interest Rates:
Type Loan amount (Rs.) Rate Of Interest (p.a.)
Floating Up to 30 Lacs 9.00%
Above 30 Lacs 9.50%
Fixed Irrespective of the loan amount 14.00%
Loan Prepayment No Due Solvency Charges Charges Charges

Processing Charges Certificate Certificate for Late for for
Charges Payment changing changing
of EMI from fixed from
to floating floating to
rates of fixed rates
interest of interest
1% + Nil NA NA Rs 500 + Min. Rs. Min. Rs.

Service tax taxes per 5000 or 1% 5000 or 1%
as cheque of the of the
applicable bounce outstanding outstanding
amount amount
whichever whichever
is higher is higher

135
Switching Cost:
Switching from the Floating rate scheme to the Fixed rate scheme and vice versa is
permissible. If a fixed rate customer wants to reschedule the loan to a lower interest rate, the
same is also permissible.
Terms and Conditions

Repayment
Repayment period for home loans shall not exceed 20 years

Repayment period of pre-allotment bookings of housing loans shall not exceed 1½
year
Repayment period of improvement or renovation or extension of existing property
shall not exceed 10 years
Security
Equitable mortgage of the property to be financed by way of deposit of title deeds.
Disbursement
The loan will be disbursed in full or in suitable installments, taking into account the
requirement of funds and progress of construction, as assessed by the Bank directly to seller
or builder or local development authority or supplier of materials etc.
Processing charges or admission fee
Processing fee equivalent to 0.5% of the loan amount (applied for) will be collected along
with the application form (taxes as applicable).

136
Penalty for early closure
Nil.
Other Conditions
The applicant will undertake to inform the Bank as and when there is a change in address or
employment
The terms and conditions mentioned above and elsewhere under the scheme are subject to
modification from time to time solely at Bank's discretion.

137
Asset Power (Loan Against Property)
Apply for Axis Bank's Asset Power. We will give you a loan against your property. Be it
commercial or residential. You can also apply for this loan if you need funds to acquire new
property. A take-over of your existing loan with refinancing is also possible with Asset
Power.
Features
Balance Transfer facility available with additional finance
Doorstep service
We can avail the following four products under Asset Power

Loan against property – Residential
Loan against property – Commercial
Loan for purchase of commercial property
Take-over of existing loan with additional refinance (Balance Transfer)
Lease Rental Discounting (LRD)
Eligibility
The following are the eligibility criteria depending upon the income profile :
Salaried Individuals:
Any individual who is in permanent service in government or a reputed company

commencement and up to the age of superannuation

138
Professionals:
Professionals (ie, doctors, engineers, dentists, architects, chartered accountants, cost

accountants, company secretary, and management consultants only) can apply
The applicant should be above 24 years of age at the time of loan commencement
and up to 65 years or less at the time of loan maturity
Self-employed Individuals:
Any individual filing Income Tax returns can apply

commencement and up to 65 years or less at the time of loan maturity
Documentation
An application for an Asset Power loan should feature the following documents:
Document Salaried Applicants Other Applicants
Proof of Voter's ID card or driving license or Voter's ID card or driving

identity PAN card or photo credit card or license or PAN card or photo
employee's ID card, or defense or credit card
police or government department ID
card
Proof of Latest salary slip showing all IT Returns for the last 2 years
income deductions or Form 16 along with and computation of income for
recent salary certificate the last 2 years certified by a
CA
Proof of Bank account statement or latest Bank account statement or

residence electricity bill or latest mobile or latest electricity bill or latest
telephone bill or latest credit card mobile or telephone bill or
statement or latest LIC policy or latest credit card statement or

139
insurance premium receipt or latest LIC policy or insurance
employers letter certifying the current premium receipt or latest NSC
mailing address or latest NSC or other or other similar instruments
similar instruments indicating the indicating the address
address or existing house lease
agreement
Bank statement Last 6 months Last 6 months

or pass book
where salary or
income is
credited
Guarantor form Optional Optional
Lease Copy of lease agreement required for Copy of lease agreement

Agreement all lease rental discounting cases required for all lease rental
discounting cases
Loan Amount
Limits for Asset Power
Minimum - Rs 2 lacs
Maximum - Rs 150 lacs
Margin
20 - 30% in case of purchase of commercial property

40 - 55% in case of Loan against residential/commercial property

140
Terms and Conditions
The following are the terms and conditions applicable to Asset Power:
Repayment: Repayment period for Loan Against Property is maximum 15 years.
Security: Equitable Mortgage of the property to be financed, by way of deposit of

title deeds.
Insurance: Customer can avail Property & Personal Accident insurance cover as per
the guidelines and arrangements with the insurer/underwriter. This is optional.
Processing Charges or Admission Fee: Minimum login fees of Rs 4000 will be

charged plus a processing fee equivalent to 1% of the loan amount sanctioned (taxes
as applicable).
Penalty for early closure: 2% will be charged if the amount exceeds 25% of the
principle outstanding during a quarter, otherwise no penalty.
Other Conditions:
The applicant will undertake to inform the Bank as and when there is a change in
address or employment
The terms and conditions mentioned above and elsewhere under the scheme are
subject to modification from time to time solely at Bank's discretion.

141
AXIS BANK LTD.
FINANCIAL STATEMENTS
Profit loss account (Rs crore)
Mar ' 09 Mar ' 08 Mar ' 07 Mar ' 06 Mar ' 05
Income:
Operating income 13,550.95 8,750.68 5,461.60 3,594.46 2,299.23
Expenses
Material consumed - - - - -
Manufacturing expenses - - - - -
Personnel expenses 997.66 670.25 381.35 240.20 176.85
Selling expenses 46.32 74.41 29.62 17.05 11.47
Adminstrative expenses 2,357.78 1,551.27 864.23 575.74 302.21
Expenses capitalised - - - - -
Cost of sales 3,401.76 2,295.92 1,275.19 833.00 490.53
Operating profit 2,999.92 2,034.80 1,193.09 950.90 615.71
Other recurring income 81.81 13.86 21.24 6.34 34.52
Adjusted PBDIT 3,081.73 2,048.66 1,214.32 957.24 650.24
Financial expenses 7,149.27 4,419.96 2,993.32 1,810.56 1,192.98
Depreciation 188.67 158.11 111.86 92.19 81.58
Other write offs - - - - -
Adjusted PBT 2,893.07 1,890.54 1,102.46 865.05 568.66
Tax charges 970.12 734.86 418.82 246.35 180.03
Adjusted PAT 1,823.56 1,086.21 661.94 486.78 326.17
Non recurring items -8.20 -15.18 -2.91 -1.70 -2.39
Other non cash adjustments - - -31.80 - 10.80
Reported net profit 1,815.36 1,071.03 627.23 485.08 334.58
Earnigs before appropriation 3,369.23 2,100.10 1,358.26 682.49 516.68
Equity dividend 420.52 251.64 148.79 112.55 87.75
Preference dividend - - - - -
Dividend tax - - - - -
Retained earnings 2,948.71 1,848.47 1,209.47 569.94 428.93

142
Balance sheet (Rs crore)
Sources of funds
Owner's fund
Equity share capital 359.01 357.71 281.63 278.69 273.80
Share application money - - - 13.44 13.42
Preference share capital - - - - -
Reserves & surplus 9,855.79 8,412.98 3,120.58 2,593.50 2,134.39
Loan funds
Secured loans - - - - -
Unsecured loans 1,17,374.11 87,626.22 58,785.60 40,113.53
Total 1,27,588.90 96,396.91 62,187.81 42,999.16 34,133.60
Uses of funds
Fixed assets
Gross block 1,741.86 1,384.70 1,098.93 898.68 764.78
Less : revaluation reserve - - - - -
Less : accumulated depreciation 726.45 590.33 450.55 345.33 261.98
Net block 1,015.40 794.37 648.38 553.34 502.80
Capital work- in-progress 57.48 128.48 24.82 14.37 15.64
Investments 46,330.35 33,705.10 26,897.16 21,527.35 14,274.95
Net current assets
Current assets, loans & advances 3,745.15 2,784.51 1,892.07 1,679.98 2,071.38
Less : current liabilities & provisions 9,947.67 7,556.90 5,873.80 4,051.03 1,828.68
Total net current assets -6,202.52 -4,772.38 -3,981.73 -2,371.05 242.70
Miscellaneous expenses not written - - - - -
Total 41,200.72 29,855.57 23,588.62 19,724.02 15,036.08
Notes:
Book value of unquoted investments - - - - -
Market value of quoted investments - - - - -
Contingent liabilities 1,04,428.39 94,598.40 67,744.86 45,043.14 23,441.83
Number of equity sharesoutstanding
3590.05 3577.10 2816.31 2786.91 2737.96
(Lacs)

143
Cash flow (Rs crore)
Profit before tax 2,785.19 1,646.27 996.24 731.30 503.81
Net cashflow-operating activity 10,551.63 5,960.45 5,295.53 240.17 4,334.19
Net cash used in investing activity -9,741.96 -4,702.52 -3,655.58 -2,097.47 -5,829.62
Netcash used in fin. activity 1,692.32 4,325.79 1,637.01 996.21 1,108.22
Net inc/dec in cash and equivlnt 2,512.66 5,585.94 3,276.46 -861.09 -387.20
Cash and equivalnt begin of year 12,504.24 6,918.31 3,641.84 4,502.94 5,663.21
Cash and equivalnt end of year 15,016.90 12,504.24 6,918.31 3,641.84 5,276.01

144
Consensus Estimates Trends
Sales and Profit Figures in India Rupee (INR)
Earnings and Dividend Figures in India Rupee (INR)
1 Week 1 Month 2 Month 1 Year
Curre nt
Ago Ago Ago Ago
SALES (in millions)
Quarter Ending Sep-09 19,615.33 19,045.50 19,607.00 19,607.00 --
Quarter Ending Dec-09 21,088.00 20,045.50 20,757.00 20,757.00 --
Year Ending Mar-10 71,144.82 79,604.12 79,229.34 76,612.77 79,813.29
Year Ending Mar-11 88,210.41 96,207.77 96,284.62 92,556.86 102,503.70
Earnings (per share)
Quarter Ending Sep-09 13.94 14.32 14.69 14.69 --
Quarter Ending Dec-09 15.68 15.23 14.94 14.94 --
Quarter Ending Mar-10 58.17 56.13 56.06 54.68 51.27
Quarter Ending Mar-11 71.15 69.58 68.45 65.32 65.72
Consensus Estimates Analysis

1 Year
# of Estimates Mean High Low
Ago
SALES (in millions)
Quarter Ending Sep-09 3 19,615.33 20,272.00 18,967.00 --
Quarter Ending Dec-09 3 21,088.00 22,788.00 19,719.00 --
Year Ending Mar-10 31 71,144.82 97,237.06 42,387.00 79,813.29
Year Ending Mar-11 27 88,210.41 124,063.21 46,537.00 102,503.70
Quarter Ending Sep-09 2 13.94 16.40 11.48 --
Quarter Ending Dec-09 2 15.68 16.90 14.46 --
Year Ending Mar-10 38 58.17 67.90 42.10 51.27
Year Ending Mar-11 35 71.15 91.83 45.44 65.72
LT Growth Rate (%) 4 22.45 25.00 18.00 27.50

145
Historical Surprises
Estimates vs Actual Estimate Actual Difference Surprise %
SALES (in millions)
Quarter Ending Jun-09 17,541.80 20,042.00 2,500.20 14.25
Quarter Ending Mar-09 15,738.43 18,781.10 3,042.67 19.33
Quarter Ending Dec-08 15,529.44 16,618.50 1,089.06 7.01
Quarter Ending Sep-08 14,190.29 16,078.70 1,888.41 13.31
Quarter Ending Jun-08 12,023.56 14,352.60 2,329.04 19.37
Quarter Ending Jun-09 14.05 15.50 1.45 10.35
Quarter Ending Mar-09 11.11 16.10 4.99 44.86
Quarter Ending Dec-08 11.26 13.78 2.52 22.40
Quarter Ending Sep-08 9.99 11.07 1.08 10.77
Quarter Ending Jun-08 6.98 9.03 2.05 29.32
Earnings Estimates Revisions Summary

Last Week Last 4 Weeks
Number Of Revisions: Up Down Up Down
Revenue
Quarter Ending Sep-09 1 0 0 0
Quarter Ending Dec-09 1 0 0 0
Year Ending Mar-10 10 4 11 6
Earnings
Quarter Ending Sep-09 0 1 0 1
Quarter Ending Dec-09 1 0 1 0

146
Ratios (Rs crore)
Per share ratios
Adjusted EPS (Rs) 50.79 30.37 23.50 17.47 11.91

Adjusted cash EPS (Rs) 56.05 34.79 27.48 20.77 14.89
Reported EPS (Rs) 50.57 29.94 23.40 17.41 12.22
Reported cash EPS (Rs) 55.82 34.36 27.37 20.71 15.20
Dividend per share 10.00 6.00 4.50 3.50 2.80
Operating profit per share (Rs) 83.56 56.88 42.36 34.12 22.49
Book value (excl rev res) per share
284.53 245.19 120.80 103.06 87.96
(Rs)
Book value (incl rev res) per share
284.53 245.19 120.80 103.06 87.96
(Rs.)
Net operating income per share (Rs) 377.46 244.63 193.93 128.98 83.98
Free reserves per share (Rs) 230.47 208.03 86.60 75.38 54.08
Profitability ratios
Operating margin (%) 22.13 23.25 21.84 26.45 26.77

Gross profit margin (%) 20.74 21.44 19.79 23.88 23.23
Net profit margin (%) 13.31 12.22 12.01 13.47 14.33
Adjusted cash margin (%) 14.76 14.19 14.11 16.07 17.47
Adjusted return on net worth (%) 17.85 12.38 19.45 16.94 13.54
Reported return on net worth (%) 17.77 12.21 19.37 16.88 13.89
Return on long term funds (%) 97.33 71.15 119.74 88.56 70.55
Leverage ratios
Long term debt / Equity - - - - -

Total debt/equity 11.49 9.99 17.28 13.97 13.17
Owners fund as % of total source 8.00 9.09 5.47 6.68 7.05
Fixed assets turnover ratio 7.78 6.32 4.97 4.00 3.01

147
Liquidity ratios
Current ratio 0.37 0.36 0.32 0.41 1.13

Current ratio (inc. st loans) 0.02 0.02 0.02 0.03 0.06
Quick ratio 9.52 9.23 7.39 6.52 11.55
Inventory turnover ratio - - - - -
Payout ratios
Dividend payout ratio (net profit) 23.16 23.49 22.57 23.20 26.22
Dividend payout ratio (cash profit) 20.98 20.47 19.30 19.49 21.08
Earning retention ratio 76.94 76.84 77.53 76.88 73.10
Cash earnings retention ratio 79.11 79.78 80.78 80.57 78.48
Coverage ratios
Adjusted cash flow time total debt 58.33 70.42 75.97 69.28 77.77
Financial charges coverage ratio 1.43 1.46 1.41 1.53 1.54
Fin. charges cov.ratio (post tax) 1.28 1.28 1.26 1.32 1.35
Component ratios
Material cost component (% earnings) - - - - -

Selling cost Component 0.34 0.85 0.54 0.47 0.49
Exports as percent of total sales - - - - -
Import comp. in raw mat. consumed - - - - -
Long term assets / total Assets 0.92 0.92 0.93 0.92 0.87
Bonus component in equity capital (%) - - - - -

148
Annual results in brief
(Rs crore)
Sales 10,835.48 7,005.31 4,560.40 2,888.79 1,924.16
Operating profit 7,037.59 4,270.75 2,979.45 1,812.22 1,280.86
Interest 7,149.27 4,419.96 2,993.32 1,810.56 1,192.98
Gross profit 3,724.88 2,225.92 1,362.60 993.81 565.62
EPS (Rs) 50.57 29.94 23.40 17.41 12.22
Annual results in details

Other income 2,896.88 1,795.49 1,010.11 729.63 415.82
Stock adjustment - - - - -
Raw material - - - - -
Power and fuel - - - - -
Employee expenses 997.66 670.25 381.35 240.20 176.85
Excise - - - - -
Admin and selling expenses - - - - -
Research and development expenses - - - - -
Other expenses 1,860.55 1,484.67 833.24 573.85 404.53
Provisions made 939.68 579.64 366.36 262.52 61.92
Depreciation - - - - -
Taxation 969.84 575.25 337.21 246.21 169.12
Net profit / loss 1,815.36 1,071.03 659.03 485.08 334.58
Extra ordinary item - - - - -
Prior year adjustments - - - - -
Equity capital 359.01 357.71 281.63 278.69 273.80
Equity dividend rate - - - - -
Agg.of non-prom. shares (Lacs) 1789.30 1926.06 1482.42 2014.46 1965.51
Agg.of non promotoHolding (%) 49.84 53.84 52.64 72.28 71.79
OPM (%) 64.95 60.96 65.33 62.73 66.57
GPM (%) 27.12 25.29 24.46 27.47 24.17
NPM (%) 13.22 12.17 11.83 13.41 14.30

149
Half yearly results in brief (Rs crore)
Mar ' 09 Sep ' 08 Mar ' 08 Sep ' 07 Mar ' 07
Sales 6,023.99 4,811.49 3,817.77 3,187.54 2,556.39
Interest 4,061.71 3,087.56 2,242.00 2,177.96 1,676.32
Gross profit 2,048.13 1,676.75 815.48 830.80 780.93
EPS (Rs) 30.15 20.43 18.68 11.30 14.08
Half yearly results in details
Mar ' 09 Sep ' 08 Mar ' 08 Sep ' 07 Mar ' 07
Other income 1,577.68 1,319.20 1,044.37 751.12 580.84
Excise - - - - -
Other expenses 968.25 892.30 1,446.73 617.58 476.39
Provisions made 387.17 552.51 -215.37 215.37 182.79
Taxation 578.65 391.19 362.62 212.63 201.64
Net profit / loss 1,082.31 733.05 668.23 402.80 396.50
Equity capital 359.01 358.89 357.71 356.51 281.63
150
Agg.of non promotoholding (%) 49.84 53.23 53.84 50.67 52.64
OPM (%) 68.81 60.12 58.37 64.07 66.25
GPM (%) 26.94 27.35 16.77 21.09 24.89
NPM (%) 14.24 11.96 13.74 10.23 12.64
Dividend
Year Month Dividend (%)

2009 Apr 100
2008 Apr 60
2007 Apr 45
2006 Apr 35
2005 Apr 28
2004 Apr 25
2003 May 22
2002 May 20
2001 May 15
2000 May 12
1999 May 10

151
Quarterly results in brief (Rs crore)
Jun ' 09 Mar ' 09 Dec ' 08 Sep ' 08 Jun ' 08
Sales 2,905.56 3,039.22 2,984.77 2,545.05 2,266.44
Interest 1,859.93 2,006.62 2,055.09 1,631.58 1,455.98
Gross profit 1,176.36 1,138.50 909.63 874.43 802.32
EPS (Rs) 15.62 16.20 13.95 11.23 9.21
Quarterly results in details
Jun ' 09 Mar ' 09 Dec ' 08 Sep ' 08 Jun ' 08
Other income 958.57 845.51 732.17 694.40 624.80
Excise - - - - -
Other expenses 518.51 482.10 486.15 473.04 419.26
Provisions made 315.29 255.19 131.98 255.78 296.73
Taxation 299.03 301.86 276.79 215.74 175.45
Net profit / loss 562.04 581.45 500.86 402.91 330.14
Equity capital 359.76 359.01 358.98 358.89 358.56
Agg.of non promotoholding (%) 50.27 49.84 49.79 53.23 53.76
OPM (%) 60.66 67.27 70.38 61.13 58.98
GPM (%) 30.44 29.31 24.47 26.99 27.75
NPM (%) 14.55 14.97 13.48 12.44 11.42
152
Results at a Glance
• Net Profit rose to Rs. 562.04 crores during Q1FY10 from Rs. 330.14 crores in
Q1FY09, registeringa growth of 70.24% yoy.
• Balance Sheet Size increased 24.18% yoy from Rs. 1,13,660 crores at the end of
Q1FY09 to Rs.1,41,142 crores at the end of Q1FY10.
• Demand Deposits rose 24.62% yoy from Rs. 35,449 crores at the end of Q1FY09 to
Rs. 44,176crores at the end of Q1FY10. On a daily average basis, demand deposits
grew by 24.75% toRs 39,739 crores in Q1 FY10 from Rs 31,854 crores in Q1 FY09.
• The Bank is well capitalised with a Capital Adequacy Ratio of 15.28% at the end of
Q1 FY10compared to 13.25% at the end of Q1FY09 and 13.69% at the end of
FY2009. The Tier - Icapital was 9.39% at the end of the quarter against 9.93% at the
end of June 2008 and 9.26%at the end of FY2009.
38% in Q1 FY09. The Bank‘s Capital Adequacy Ratio was 15.28% as at end June 2009 as
compared to 13.25% as at end June 2008 and a Tier-I ratio of 9.39% as compared to 9.93% as
at end June 2008. The diluted quarterly EPS at Rs. 15.50 was 71.65% higher than the EPS of
Rs. 9.03 in the first quarter of the previous year

153
. FINANCIAL HIGHLIGHTS :
• Net Interest Income (NII) and Net Interest Margins (NIM)
The Bank continued to build a wide presence through its 861 Branches & Extension Counters
and 3,723 ATMs across 534 cities and towns. During the quarter the Bank added 26 Branches
& Extension Counters and 128 ATMs. The daily average balances of Savings Bank deposits
during the quarter grew 33% yoy and those of Current Accounts grew 15% yoy. Demand
deposits constituted 37% of the total daily average deposits during Q1 FY10 at nearly the
same level (38%) as in Q1 FY09 and higher than the level of 35% in Q4FY20. As a result,
the Bank posted a Net Interest Margin of 3.34%, marginally lower than the NIM of 3.37% in
Q4FY09 and 3.35% for Q1FY09.
The Bank‘s advances grew by 28% from Rs. 61,160 crores as at end June 2008 to Rs. 78,105
crores as at end June 2009, while investments rose to Rs. 46,328 crores fro m Rs. 35,718
crores, a growth of 30% yoy. The Net Interest Income rose to Rs. 1,046 crores in Q1FY10
from Rs. 810 crores in Q1FY09, a growth of 29% yoy.
• Fee income
Fee Income registered a growth of 17% yoy, rising to Rs. 626.63 crores in Q1FY10 compared
to Rs. 537.27 crores in Q1FY09, with contributions from all major businesses in the Bank.
Fee income from Treasury grew at 55% yoy, followed by that from Retail Banking (21%
yoy), Business Banking (19% yoy), Large & Mid Corporate Credit (15% yoy) and SM E &
Agri lending businesses (8% yoy).
• Trading Profits
The Bank generated Rs. 326.07 crores of Trading Profits in Q1FY10, as compared to Rs.
57.31 crores in Q1FY09, a growth of 468.96% yoy. The share of Trading Profits to the
Operating Revenue increased from 3.99% in Q1FY09 to 16.27% in Q1FY10.

154
• Investment Portfolio
The book value of the Bank‘s investment portfolio as at end June 2009 was Rs. 46,328
crores, of which Rs. 26,859 crores was in government securities while Rs. 19,469 crores was
in other investments including corporate bonds, equities, preference shares, mutual funds etc.
91% of the government securities have been classified in the HTM category while 99% of the
corporate bond portfolio has been classified in the HFT and AFS categories. The distribution
of the investment portfolio in the three categories as well as the modified duration in each
category was as follows.
Category Percentage Duration
HFT 0.64% 5.7 years
AFS 41.86% 3.5 years
HTM 57.50% 5.6 years
BUSINESS OVERVIEW:
• Cash Management Services
Under Cash Management Services, the Bank handled a cash remittance throughput of Rs.
2,55,759 crores in Q1FY10 as compared to a throughput of Rs. 3,60,318 crores in Q4FY09
and higher than the throughput of Rs 2,40,102 crores during Q1FY09. The number of CMS
clients has grown to 5,089 as at end June 2009.
• Placement / Syndication and Project Advisory
The Bank maintained its No.1 rank as Debt Arranger as assessed by Prime Database for
the year ended March 2009. Further, in the Bloomberg league table for ‗ India Domestic
Bonds‘, the Bank has been ranked No.1 for the quarter ended June 2009. The Bank was
the arranger of debt aggregating Rs 14,630 crores during Q1FY10 as compared to Rs.
27,206 crores during Q4FY09 and substantially higher than Rs. 7,649 crores in Q1FY09,
a growth of 91% yoy. The Bank continues to strengthen its focus on project advisory
services.

155
• Retail Business
The number of Savings Bank accounts grew from 65.23 lakhs as at end June 2008 to 75.41
lakhs as at end June 2009.
� Retail Asset Products: Retail advances grew from Rs. 14,638 crores as at end June 2008
to Rs. 16,780 crores as at end June 2009, a growth of 15% yoy. Retail Advances
accounted for 21% of the total Advances of the Bank as at the end of June 2009. The
Bank has set up 64 Retail Asset Centres (RACs) for focussed retail lending.
� Card products: The Bank's International Debit Card issuance has risen to 124 lakh debit
cards as at end June 2009 as compared to 95 lakh cards as at end June 2008. The Bank
had over 5,43,000 Credit Cards in force as at end June 2009. The Bank has an installed
base of over 1,23,000 Electronic Data Capture (EDC) machines as at end June 2009.
� Wealth Advisory Services and Third Party Products: The Bank offers Wealth Advisory
Services and Mohur - Gold Coins and bars - through its select branches, and Personal
Investment Products including Mutual Funds, Life Insurance products in association with
Metlife India, General Insurance products in association with Bajaj Allianz Insurance and
Online trading accounts in association with Geojit Securities.
• International Business
The Bank has five international offices – branches at Singapore, Hong Kong and Dubai (at
the DIFC) and Representative Offices in Shanghai and Dubai - with focus on corporate
lending, trade finance, syndication, investment banking, risk management and liability
businesses. The total assets under overseas operations amounted to US$ 2.18 billion as at end
June 2009 as compared to US$ 1.80 billion as at end June 2008, a growth of 21% yoy.

156
• Capital & Net Worth:
The Net Worth of the Bank was Rs. 10,282 crores as at end June 2009 as compared to Rs.
8,742 crores as at end June 2008, a growth of 18% yoy. The Capital Adequacy Ratio for the
Bank was 15.28%, as at end June 2009, as compared to 13.25% as at end June 2008. The Tier
- I capital amounted to 9.39% as at end June 2009 as against 9.93% as at end June 2008.
Financi al Performance Q1FY10 Q1FY09 % Growth
Net Pro fit 562.04 330.14 70%
EPS Diluted (Rs.) 15.50 9.03 72%
Net Interest Income 1,045.63 810.46 29%
Other Inco me 958.57 624.80 53%
- Fee Income 626.63 537.27 17%
- Trad ing Income 326.07 57.31 469%

- Miscellaneous Income 5.87 30.22 (81%)
Operating Revenue 2,004.20 1,435.26 40%
Core Operating Revenue* 1,678.13 1,377.95 22%

Operating Expenses (incl.
827.84 632.94 31%
depreciation)
Operating Profit 1,176.36 802.32 47%
Core Operating Profit** 850.29 745.01 14%
* Core Operating Revenue = Operat ing Revenue – Trading Inco me

** Core Operating Pro fit = Operating Profit – Trading Income
Rs in crores

157
Business Performance As at 30.06.09 As at 30.06.08 % Growth
Total Deposits 1,10,256 88,973 24%
Demand Deposits 44,176 35,449 25%
- Savings Ban k Deposits 25,199 19,026 32%
- Current Account Deposits 18,977 16,423 16%
Demand Deposits as % of Total Deposits 40.07% 39.84%
Term Deposits 66,080 53,524 23%

Demand Deposits on a
Cu mulat ive Daily Average 39,739 31,854 25%
Basis
Demand Deposits as % Total Deposits
37.30% 37.54%
(CDA B basis)
Net Advances 78,105 61,160 28%
- Large and Mid Corporate 38,875 29,455 32%
- SM E 14,907 11,430 30%
- Agri 7,543 5,637 34%
- Retail Advances* 16,780 14,638 15%
Investments 46,328 35,718 30%
Balance Sheet Size 1,41,142 1,13,660 24%
Net NPA as % of Net Customer Assets 0.41% 0.47%
Gross NPA as % of Gross Customer

1.01% 0.92%
Assets
Equity Capital 359.76 358.56
Net Worth 10,282 8,742 18%
Capital Adequacy Ratio 15.28% 13.25%
- Tier I 9.39% 9.93%
- Tier II 5.89% 3.32%

158
SUGGESSIONS & CONCLUSION
1. More Parameters should be included in Credit Appraisal

Though the credit appraisal followed by Axis Bank is good, but more
parameters should be included for the customers prospective. Like, past
credit history of the borrower with the same bank should be included. It
will help in knowing the credit worthiness of that customer.
2. Industries should be Encouraged

More SMEs and Large cap. Industries should be encouraged by giving
easy term loans, for the fast development of the society.
3. Appraisal process of small SME loans should be simplified.
4. Though Credit Appraisal and Sanction process is centralised but

unavailability of RACs (Retail Asset Center) at small centres leads to
delay in the whole process. To overcome this RACs should be setup
for a cluster of small branches in their vicinity.
5. Though Credit Appraisal and Sanction process is centralised but

unavailability of dedicated staffs at small centers leads to delay in the
whole process.

159
LIMITATIONS
1) As per the policy of the bank, they does not provide the internal data
of the branch.
2) The project has done in the branch office of Axis Bank Ltd. not in the
corporate office so all the banking activities are not in operation.
3) Duration of the project was too short.
4) Most of the information collected is more practical and

understandable, but it is difficult to put it in proper theoretical
language

160
BIBLIOGRAPHY

161
BOOKS REFERED
1. Singhal Sanjiv, Internet banking-the second wave by, Land marks books
2. Bhattacharya, Banking strategy, credit appraisal and landing decisions: a
risk return Framework by, Landmark Books
3. M.Y. Khan P.K. Jain, Financial Management, Tata McGraw hill, Fifth
Edition, Page 29.1-29.23
4. Agrawal, J.D.-―Accounting for Financial Analysis:, Indian Institute of
Finance publication, Fifth Edition, 2002.
5. Brigham Eugee. F & Ehrhrdt Michael C. – ―Financial Management‖,
Thomsom South-western Publications, Tenth Edition, 2004.
6. Chandra P.-―Financial Management‖‘ Himalaya Publication, fourth
Edition.

162
7. Meheshawri S.N-―Financial Management‖‘ sultan Chand & Sons
Publication, Edition-2002.
8. Study material of AXIS BANK LTD., 2006-2007, 2007-2008, Page 67-
88, page 102-112, page 200-289
9. Annual report of AXIS BANK, Edition, 2008-2009, Page 23, 25,228,39
10. Manual of RBI Notification 2007-2008
11. Batchelor, Roy A., and Pami Dua. "Household Versus Economist
Forecasts of Inflation: A Reassessment," Journal of Money, Credit, and
Banking 21 (1989), pp. 252-7.
12. Bomberger, William A. "Disagreement as a Measure of Uncertainty,"

Journal of Money, Credit, and Banking 28 (1996), pp. 381-92.
13. Bomberger, William A., and William J. Frazer. "Interest Rates,

Uncertainty, and the Livingston Data," Journal of Finance 36 (1981), pp.
661-75.
14. Bond, Michael T., and Gerald E. Smolen. "The Fisher Effect: Inverted or
Not," Review of Business & Economic Research (1992), pp. 58-63.

163
15. Brooking, Carl G., and Patrick A. Taylor. "On the Necessity of
Estimating Expected Inflation in Assessing the Value of Lost Earnings,"
Paper presented at the Southeast Federation of Administrative Disciplines
Meeting, New Orleans, March 1989.
WEBSITE REFERED
1. www.axisbank.com
2. www.crisil.com
3. www.wikipedia/studymaterial/credit.com
4. www.econamictimes.com - smeinitiative.
5. www.businessline.com
6. www.iloveindia.com/finance/bank/private-bank/uti-bank.html
7. www.moneycontrol.com/stock/co.information/co._history
8. www.bseindia.com
9. www.equitymaster.com
164
10. www.firstglobal.in
11. www.iif.edu
12. www.nseindia.com
13. www.sebi.gov.in
14. www.yahoo.co.in (yahoo finance)
15. www.nseindia.com
16. www.myiris.com
17. www.investopedia.com
18. www.finance.indiamart.com

165

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CHAPTER- 1

Arijeet Anand (4108026026) Indian Institute of Finance

ABOUT THE COMPANY

Arijeet Anand (4108026026) Indian Institute of Finance

Arijeet Anand (4108026026) Indian Institute of Finance

Arijeet Anand (4108026026) Indian Institute of Finance

Arijeet Anand (4108026026) Indian Institute of Finance

Arijeet Anand (4108026026) Indian Institute of Finance

Arijeet Anand (4108026026) Indian Institute of Finance

- UTI Bank has launch of `iConnect', its Internet banking Product.

- Indiabulls has signed a memorandum of understanding with UTI Bank.

Arijeet Anand (4108026026) Indian Institute of Finance

- UTI Bank launched a private placement of non-convertible debentures to raise up to Rs 75

Arijeet Anand (4108026026) Indian Institute of Finance

- B Paranjpe & Abid Hussain cease to be the Directors of UTI Bank.

-ABN Amro, UTI Bank in pact to share ATMs.

Arijeet Anand (4108026026) Indian Institute of Finance

2) To issue Non-Convertible Unsecured Redeemable Debentures upto Rs.100 crore, in one or

-Banks Chairman and MD Dr.P.J.Nayak inaugurated a new branch at Nellore.

-Unveils pre-paid travel card 'Visa Electron Travel Currency Card'

-Allotment of 58923 equity shares of Rs 10 each under ESOP.

-UTI Bank ties up with UK govt fund for contract farming

Arijeet Anand (4108026026) Indian Institute of Finance

-UTI Bank unveils new ATM in Sikkim

-UTI Bank opens new branch in Udupi

-UTI Bank, Geojit in pact for trading platform in Qatar

-UTI Bank ties up with Shriram Group Cos

-HSBC completes acquisition of 14.6% stake in UTI Bank for .6 m

-UTI Bank installs ATM in Thiruvananthapuram

Arijeet Anand (4108026026) Indian Institute of Finance

-UBL sets up branch in Jaipur

-UTI Bank unveils priority banking lounge

Arijeet Anand (4108026026) Indian Institute of Finance

1) Customer service of the highest order.

Arijeet Anand (4108026026) Indian Institute of Finance

The name AXIS signifies -

Brand Vision and Commitment

Arijeet Anand (4108026026) Indian Institute of Finance

Knowledge Driven Human Capital - AXIS BANK has adopted a knowledge

Technology - AXIS BANK is establishing the highest standards in customer

Transparency & Responsible Banking - AXIS BANK holds Transparency and

Arijeet Anand (4108026026) Indian Institute of Finance

Branches at Singapore, Hong Kong and Dubai.

Performance Highlights (FY 09):

Net Profit - Inc. 69% yoy (581 cr.)

Arijeet Anand (4108026026) Indian Institute of Finance

Arijeet Anand (4108026026) Indian Institute of Finance

Early phase from 1786 to 1969 of Indian Banks

Arijeet Anand (4108026026) Indian Institute of Finance

Arijeet Anand (4108026026) Indian Institute of Finance

1949: Enactment of Banking Regulation Act.

Arijeet Anand (4108026026) Indian Institute of Finance

Arijeet Anand (4108026026) Indian Institute of Finance

Arijeet Anand (4108026026) Indian Institute of Finance

CREDIT RATING / SCORING:

Arijeet Anand (4108026026) Indian Institute of Finance

4) Net Worth Information:

5) Previous Relation with the Lender:

Arijeet Anand (4108026026) Indian Institute of Finance

a) Government / Public Sector Undertaking / MNCs.

Arijeet Anand (4108026026) Indian Institute of Finance

Arijeet Anand (4108026026) Indian Institute of Finance

Evidence from the Banking Industry in Taiwan

Authors: Nan-Hong Lin a; Wen-Chun Tseng b; Yu-Chung Hung c; David C. Yen d