Evaluation of Loans and Advances: Chapter-1

EVALUATION OF LOANS AND ADVANCES
CHAPTER- 1
INTRODUCTION
Banking regulation Act 1949, defines banking as accepting for the

purpose of lending or investment, of deposits of money from the public,
repayable on demands or otherwise and with draws able on demand by cheques,
draft or order otherwise.
Banking has become one of the most challenging sectors in the country.
The Indian banking can be broadly categorized into Nationalized (government
owned), Private Banks and Specialized banking institutions. The Reserve Bank
of India www.rbi.org.in acts a centralized monitoring body in the Indian
financial sector. The different types of banks in India are Syndicate Bank and
Associates Nationalized Banks, Domestic Private Sector Banks, New Domestic
Private Sector Banks, Foreign Banks.
Banking provides well-paid, secure and satisfying career prospects.

Openings are available in these banking at various levels, from Bank Clerical to
Probationary Officers (PO). Often it is perceived as a career option for
commerce/economics students, but in reality, a majority of bank officers are
from different streams of education. Bright graduates from any subject can get
entry in the Public Sector Banks through an All India Examination conducted
by them. The exam is a stepping-stone for a career in the Banking Industry.
DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

So, loans are the dominant asset in most of the banks portfolio,
comprising of an average of 50 to 70% of total assets. This loan composition
varies between Banks to Banks, depending on upon their size, location, trade
area and lending procedure.
Syndicate Bank provides different types of loans to its customers. But for
my reference I have taken only 5 types of loans i.e., Home Loan, Car Loan,
Personal Loan, Education Loan, Business Loan.
Syndicate Bank provides better loans in better and lower interest rates.
But sometimes these interest rates may not be beneficial to its customers. It
means the interest rates may be high which to take loan and pay the interest, or
sometimes it may be less which may attract fewer customers and indirectly
which may incur heavy loss to Bank.
And also the process of providing loans and the documentation is also too
large for the customers to take loan in Banks. Sometimes the customers may not
see the interest rates but they may be afraid of the procedure of taking loans and
this documentation.
 OBJECTIVE OF THE STUDY

The main objectives are as follows
 To study the different types of loans schemes and their interest rates.
 To study the loans and advances system management in Syndicate Bank
 To study and compare the interest rates of Syndicate Bank with that of
Canara Bank.

 To study the Documentation process for loans and advances in Syndicate

Bank
 SCOPE OF THE STUDY
The area of the study is being made at Syndicate Bank branch is situated
near to residential area and to the market place of RAICHUR and its clients are
all type of customers like business people, professionals agriculturists etc.
The study covers the various techniques and methods involved in lending
loans and advances to the customers in Syndicate Bank. It also involves the risk
assessment involved in lending loans and advances to the borrowers.
 LIMITATIONS OF THE STUDY
 As the study is based on the secondary data and other information

provided by the officials of the bank, all the limitations attached to the
secondary data affected the study
 To maintain confidentiality, more details in depth are not included in this
project report
 Time constraints are the limited factor
 The Regional Office relies on the information forwarded by the branch.
Any wrong information is a limiting factor of the fruitful assessment
credit
 The maximum information is collected from the secondary sources
 The study is based on only the policies of Syndicate Bank

CHAPTER - II
ORGANIZATION PROFILE
EVOLUTION OF SYNDICATE BANK
Established on 20th October, 1925 by three great visionaries viz. Dr.

T.M.A. Pai, Mr. Upendra Ananth Pai and Mr. V.S. Kudva of Dakshina Kannada
District of Karnataka State, which has a unique distinction of producing many
great Banks and Bankers. The business of the Bank commenced on 10th
November, 1925 in a small room in the temple town of Udupi with only one
employee. The Bank was then called "Canara Industrial and Banking Syndicate
Ltd". The authorized capital of the Bank was Rs.1, 00,000/- and the paid-up
capital was only Rs.8, 000/-.
The success story of Syndicate Bank (name changed in 1964) is a story of

a great institution which could build itself from small beginnings to its present
stature, mainly through the concept of SERVICE TO THE COMMON MAN
inspired by the dynamic and enlightened leadership provided by stalwarts like
Dr. T.M.A. Pai and Mr. T.A. Pai. The Bank adopted progressive policies and
innovative pro grammes under their leadership and thus became a harbinger of a
model banking policy suitable not only to India, but also to all other developing
countries.
The progress of Syndicate Bank has been synonymous with the phase of
progressive banking in India. Spanning seven decades of pioneering expertise,
the Bank has created for itself a solid customer base comprising of two or
three generations. Being firmly rooted in rural India and understanding the
grass-root realities, the Bank's perception had vision of future India. It has
been propagating innovations in Banking and also has been receptive to new
4

ideas, without however getting uprooted from its distinctive socio-economic

and cultural ethos. It has never been a conduit to syphon off the resources
from rural backward areas, to strengthen the urban region.
The abode of Lord Krishna in coastal Karnataka with a capital of

Rs.8000/- by three visionaries - Sri Upendra Ananth Pai, a businessman, Sri
Vaman Kudva, an engineer and Dr.T M A Pai, a physician - who shared a strong
commitment to social welfare. Their objective was primarily to extend financial
assistance to the local weavers who were crippled by a crisis in the handloom
industry through mobilizing small savings from the community. The bank
collected as low as 2 annas daily at the doorsteps of the depositors through its
Agents under its Pigmy Deposit Scheme started in 1928. This scheme is the
Bank's brand equity today and the Bank collects around Rs. 2 core per day
under the scheme.
The progress of Syndicate Bank has been synonymous with the phase of
progressive banking in India. Spanning over 80 years of pioneering expertise,
the Bank has created for itself a solid customer base comprising customers of
two or three generations. Being firmly rooted in rural India and understanding
the grassroots realities, the Bank’s perception had vision of future India. It has
been propagating innovations in Banking and also has been receptive to new
ideas, without however getting uprooted from its distinctive socio-economic
and cultural ethos. Its philosophy of growth by mutual sustenance of both the
Bank and the people has paid rich dividends. The Bank has been operating as a
catalyst of development across the country with particular reference to the

common man at the individual level and in rural/semi urban centers at the
area level.
ORGANIZATIONAL PROFILE:
SYNDICATE BANK IS A INDIA’S LARGEST BANK
 Asset 105 lack core

 17 million customers and growing 10.36 million savings bank and 0.27
million account customers
 2111 Branch in India
 1 overseas branch in London
 Other share holders 28%
 Deposit taking company in Dubai
 2 Foreign exchange company
 506 ATMs in India
 620 core banking solutions
 35 Regional offices in India
 7 day banking facility is introduced in 209 Branches
 extended business hours introduced in 603 Branches
 Tele banking facility introduced in 245 Branches
 Syndicate bank all 2014 braches are computerized extending accurate
and prompt services
 In 1995 syndicate bank was established Hi-Tech Agriculture Brands
 E- Banking has been launched at 588 Branches located in 234 centers
across the country as on 1919 June 2006.
 Strong corporate Governance
6

 Powerful Brand Equity
Comprehensive Range of Products & services
Achieving leadership Across Product and Customer Segments
 India’s leading universal bank

 Full range of products and services for corporate and retail customers in
place; Focus on Retail loans in general and housing loans in particular

 Targeting Mid Corporate, high value SSIs and personal banking
customers
 Increased profitability through cross selling, operational restructuring
and increased investment in technology leading to reduction in
transaction cost
 Focus on capturing and retaining most profitable customers
Sponsor Banks of Syndicate Bank:
The syndicate bank has 5 Regional Rural Banks that are incorporated
differently which have the different system of management doing their
business independently but they are the part of the syndicate banks groups.
The Regional Rural Banks sponsored by syndicate banks. They are:
1. Karnataka Vikas Grameena Bank in Dharwad.

2. Gurgaon Grameen Bank in Hariyana
3. North Malabar Kannur in Kerala
7

4. Prathama Grameen Bank in Moradabad in U.P.

5. Andhra Vikas Grameen Bank in Andhra Pradesh.
HEAD OFFICE AT A GLANCE

Organizational structure of Syndicate Bank at Raichur

Branch
Branch
Manager
Filed officer
Marketing Finance Manager HR

Manager Manager
For Manager
Business Planning
Asst. Marketing Asst. Finance
Manager Asst. H.R
Manager
Manager
Marketing Accountants
Training
Executives Branch wise
Branch
Manager

SYNDICATE BANK
ORGANISATIONAL STRUCTURE
BOARD OF DIRECTORS
CHAIRMAN & MANAGING
DIRECTOR
EXECUTIVE DIRECTOR
General Managers
Portfolios
1. Credit Department 7. Priority Sector Credit Dept
2. Planning & Dev Department 8. Central Accounts & Legal Dept
3. Recoveries Department 9. Personnel Department
4. Dept. of Information Technology 10. Inspection Department

GM Offices/Regional Offices -35
5. Treasury & International Banking Divn. 11. Vigilance Department
6. Risk Management & Monitoring Dept.
Branches - 2111
10

MANAGEMENT TEAM:
SL NAMES DESIGNATION
NO
01 SRI ARUN SRIVASTAVA MANAGING
DIRECTOR &
CEO
02 SRI T K SRIVASTAVA EXECUTIVE
DIRECTOR
03 SRI RAVISHANKAR EXECUTIVE
PANDEY DIRECTOR
04 SRI H,PRADEEP RAO GOVT
DIRECTOR
05 SRI RUDRA NARAYAN RBI DIRECTOR
KAR
06 SRI SHANKARAN WORKMAN
BHASKAR IYER DIRECTOR
07 SRI SANJAYA ANANT OFFICE
MANJREKAR DIRECTOR
08 DR.C R NASEER AHAMED DIRECTOR
Head Office
Syndicate bank
Door no 16/355&16/365A
Manipal-576104
Udupi dist, Karnataka state (India
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OBJECTIVES OF THE STUDY:

 To understand the financial performance of the Syndicate Bank, raichur Branch.
 To know some recent financial trends in the banking industry.
 To know the short-term and long- term liquidity of Syndicate bank.
 To awaken the reader that how analysis should be made and evaluated.
 To sharpen my financial analytical techniques and skills.
 To give some instructions and recommendation that can be used as strategies to
take some finance related decisions.
 To extend banking facility in the country especially in rural areas, and
semi urban areas thereby encourage rural savings and mobilize those savings
for the economical development of the country.
 To cater the credit needs of the rural area
 To extend financial help for the establishment of ware Housing and
marketing securities in different part of the country.
 To grant the financial facilities to the small-scale industries in the
country.
 To provide remittance facilities to commercial banks and co-operative
banks.
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1.2 THE SERVICES OF SYNDICATE BANK
 Personal Banking
 Gold loan
 Corporate Banking
 Small Scale Industries
 Small Business Finance
 Rural Banking
 Government Business
 Home Loans
Syndicate Bank Global Debit Card:-

 Carry your Bank with you.
 It is convenient e-wallet valid in India and abroad with VISA Power
 Bring you the convenience of accessing your money any time anywhere
globally.
 Over 5000 ATMs in India and over 850000 ATMs across the Globe, with
VISA logo, would honour the Card for cash withdrawals and balance
enquire.
 Do all your shopping and purchasing with the Card at over 56000 merchant
establishments in India over 10 million merchant establishments (MEs)
across the Globe.
 Transact in any currency, but pay in Indian Rupees.
 No admission fee and no annual fee presently.
 No transaction fee at all Syndicate Bank ATMs
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SYNDICATE BANK GLOBAL CREDIT CARD:-

 Offers Extra Power in your Purse.
 It is a Photo Card that provides you additional security and recognition for
you.
 You are powered for making payments with your Card at more than 56000
Merchants Establishments in India and at over 1 crore Merchant
Establishments across the Globe, where Visa cards are accepted
 Have the privilege to access, round the clock, 5000 ATMs in India and 8.5
lakhs ATMs across the Globe to withdraw cash, where Visa are accepted.
Also have the
 Access to withdraw cash, where Visa cards are accepted. And have access to
withdraw cash at all ATMs of Syndicate Bank and at all ‘Cash Tree’ ATMs
in India.
 Minimum income requirement of Rs.36000/-p.a.
 Free credit period of minimum 20 days and maximum of 50 days.
 Flexible option to pay a minimum of 10% of the outstanding amount every
month on due on date and avail the Revolving Credit Facility that helps you
to optimize your resources.
 Cash advance of 10% of credit limit within the overall credit limits of the
card.
 Personal Accident Insurance cover of Rs.2.5 lakhs.
 Limited Lost Card Liability of R
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1.4 WORLD WIDE NETWORK OF SYNDICATE BANK
Syndicate Bank has his roots in Manipal, founded as publishing house 1925.
Syndicate Bank is active on 2 continents (America and Europe).S Syndicate
Bank is specialized in history, navy, sport/soccer and culture (music) because of
experience and the strong worldwide network. Syndicate Bank is specialist for
US Themes including US sport, US history, US navy and US culture for the non
US market. Syndicate Bank is an US correspondent with office in the USA.
Syndicate Bank MEDIA is gathering material for press/media news for
magazines, Web TV and Broadcasting TV. Syndicate Bank has partners and
Joint Ventures in the USA and worldwide. Syndicate Bank is a creator for
stories. Syndicate Bank has created successful projects and stories for
international productions in the world of film/TV, publishing and other creative
fields since 1925. Creating stories (ideas) for and with partners because
Syndicate Bank is creating not only the idea, Syndicate Bank has also the ability
to open doors, has strong communication skills, is connecting markets and
persons worldwide, has strong and long time experienced international certified
project management abilities AND has an international amazing network in the
Film/TV, Music and Sport Industry - that is why Syndicate Bank is the
international production manager for creative projects.
2) OVERVIEW OF BANKING INDUSTRY PROFILE
INTRODUCTION:-
The word ‘bank’ is derived from the French words “bancus” or
“banque” which means a bench. The oxford dictionary defines a bank as “
15

an establishment for the custody of money which it pays out on a

customer’s order” Section 5(b) of Indian banking regulation act, 1949
defines banking as accepting for the purpose of lending or investment of
deposits of money from the public, repayable on demand or otherwise and
withdraw able by cheque, draft, order or otherwise.
The banking system in India is significantly different from that of other

Asian nationals because of the country’s unique geographic, social, and
economic characteristics. India has a large population and size, a diverse
culture, and extreme disparities in income, which are marked among its
regions. There are high levels of illiteracy among a large percentage of its
population but, at the same time, the country has a large reservoir of
managerial and technologically advanced talents.
Syndicate Bank was established in 1925 in Udupi, the abode of Lord

Krishna in coastal Karnataka with a capital of Rs.8000/- by three visionaries
- Sri Upendra Ananth Pai, a Businessman, Sri Vaman Kudva, an engineer and
Dr.T M A Pay, a physician - who shared a strong commitment to social
welfare. Their objective was primarily to extend financial assistance to the
local weavers who were crippled by a crisis in the handloom industry
through mobilizing small savings from the community. The bank collected
as low as 2 annals daily at the doorsteps of the depositors through its
Agents under its Pigmy Deposit Scheme started in 1928. This
Scheme is the Bank's brand equity today and the Bank collects around
Rs. 2 crore per day under the scheme
16

ATM Services
Syndicate Bank offers easy access to money to its customers, through the ATM
cud bit cards issued by it. The ATM cum debit card issued by the Bank can be
used at more than 12500 ATMs of Andhra Bank, Bank of India, Corporation
Bank, Dena Bank, HDFC Bank, Indian Bank, Hindustan Bank, Punjab National
Bank, UCO Bank, Union Bank of India UTI Bank, Canara Bank and Bank of
Rajasthan, which are members of bilateral sharing arrangement. Apart from
withdrawing money from your Savings and Current accounts, you can view the
current balance and the mini statement of the last five transactions on your
Syndicate Bank account, by using the ATM cum debit card.
Other services provided by Syndicate Bank are listed below:
 Demat / Depository Services

 NRI Services
 Electronic Fund Transfer System
 Internet Banking
 RTGS, NEFT & GRPT
 Safe Deposit Lockers
 International Banking
BANKS IN INDIA
In India the banking sector is segregated as public or private sector banks,

cooperative banks and regional rural banks. Foreign banks have been given a
different head followed by upcoming foreign banks in this section.
Phase I
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.
17

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..
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.
Phase II (Nationalisation period)
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 especially 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 over the country.
18

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 nationalized.
• Central Bank of India
• Bank of Maharashtra
• Dena Bank
• Punjab National Bank
• State Bank of Hyderadad
• Canara Bank
• Indian Bank
• Indian Overseas Bank
• Bank of Baroda
• Union Bank
• Allahabad Bank
• United Bank of India
• Bank of India
In 1980, Seven more banks were nationalised with deposits over 200
corers. Till this year, approximately 80% of the banking segment in India
were under Government ownership.
• 1955: Nationalisation of State Bank of India.

19

• 1959: Nationalisation of SBI subsidiaries.

• 1969: Nationalisation of 14 major banks.
• 1980: Nationalisation of seven banks with deposits over 200
corers.
Phase III (Liberalization)
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.
1.2 Structure of Indian Banking:
The Indian banking industry has Reserve Bank of India as its Regulatory
Authority. This is a mix of the Public sector, Private sector, Co-operative banks
and foreign banks. The private sector banks are again split into old banks and
new banks.
Banking segment in India functions under the umbrella of Reserve Bank of

India (RBI),-the Regulatory, and central bank. This segment broadly consists
of:-commercial bank and co-operative bank
20

COMMERCIAL BANKS:
The commercial banking Structure in India consists of:-
 Scheduled commercial Banks

 Unscheduled Banks
SCHEDULED COMMERCIAL BANKS:
21

It constitutes those banks that have been included in the second Schedule of
Reserve Bank of India (RBI) Act, 1934. RBI in turn includes only those banks
in this schedule that satisfy the criteria laid down vide section 42(60 of the
Act).Some co-operative Banks are scheduled commercial banks albeit not all
Co-operative banks are. Being a part of the second schedule confers some
benefits to the bank in terms of access to accommodation by RBI during the
times of liquidity constraints. At the same time, however, this status also
subjects the bank certain conditions and obligations towards the reserve
Regulations of RBI during the times of liquidity constraints. at the same time
however, this status also subjects the bank certain conditions and obligations
and obligation towards the Reserve regulation of RBI. This sub sector can
broadly be classified into:-
 Public Sector
 Private sector
 Foreign Banks
UNSCHEDULED BANKS:
Unscheduled banks are those joint stock banks, which are not included in the
second scheduled of the RBI act on account of the failure to comply with the
minimum requirements for being scheduled. As on 30 thjune 1997, there only
3non scheduled banks in the country with total of 9 Branches.
Focus of banks in India

The banking industry is slated for growth in future with a more qualitative
rather than quantitative approach. The total assets of all scheduled commercial
banks by end-March 2010 is projected to touch Rs, 40, 90,000 crore. This is
going to comprise around 65% of GDP at current market prices as compared to
22

67% in 2002-03. The bank's assets are estimated to grow at an annual composite
rate of growth of 13.4% during the rest of the decade as against 16.7% between
1994-95 and 2002-03.Barring the asset side, on the liability perspective, there
will be huge additions to the capital base and reserves. People will rely more on
borrowed funds, pace of deposit growth slowing down side by side. However,
advances and investments would not see a healthy growth rate.
2.1FINANCIAL AND BANKING SECTORS REFORMS
The last decade experienced a complete reform in the financial and banking
sector. The capital and financial market, banking & non-banking organisation
and financial instruments was redressed towards development
RESERVE BANK OF INDIA

RBI is the central bank of the country since 1934. It regulates, controls
credit, issue licenses and functions as banker of all banks and the government.
IDBI
Industrial Development Bank of India (IDBI) is the tenth largest bank in
the world in terms of development.
2.2TOP TEN BANKS IN INDIA
With the advancement of technology and the birth of competition, banks

are in the race of becoming the best in the country. With an eye upon customer
satisfaction policy they are providing best of the best services with the
minimum hazards.
23

Banks like ABN AMRO introduced banking with a coffee. It made a tie-
up with one of the best coffee bar in the country, Barista and remained open till
late evening for customers with a setup of a coffee bar in the premises. Few
banks have introduced world ATM card to make travellers across the globe
more safe and secure. What else. Internet and Phone Banking is the call of the
day for banks.
In this race towards the best, we have selected top 20 banks in the country
from all segments. It is not the ranking of banks but only for general
information about the top banks in India.
The following are best banks which are currently operating in India under the
guidelines of Reserve Bank of India (RBI)
Coyamathur Bank in India
Allahabad Bank in India
American Express Bank in India
Andhra Bank in India
Bank in India
HSBC Bank
ICICI Bank
IDBI
Indian Overseas Bank
Oriental Bank of Commerce
Punjab National Bank
State Bank of India (SBI)
Standard Chartered Bank
United Bank of India
Axis Bank
Canara Bank
24

CHAPTER-3
COMPANY PROFILE
The profile tab enables you to set your display name, emails ID, mobile
number and change your passwords. You can enable high security for online
transactions, hide accounts for display, and set limits for Demand Draft or third
party. You can also add a third party or Inter Bank beneficiary.
Personal Details: Set your display name as it would appear in all online
banking pages. Provide your contact information with your email ID and mobile
number.
Define Limit: Set limits for demand draft and third party transactions on your
accounts.
Manage Beneficiary: You can add trusted third parties and Inter Bank
Beneficiaries holding accounts in any other RTGS/NEFT enabled Bank.
Set Account Nickname: Assign nickname for easy identification of account.
Enable High Security: Enable High Security settings for your accounts. Get an
instant SMS your mobile to complete high value transactions under enhanced
security.
Change Passwords: Change your Login and Profile password at frequent

intervals to ensure secure access to your accounts
Manage A/C Display: Hide/Unhide accounts on displ
25

SyndVidya :-( Educational Loan)

Syndicate Bank steps in with SindVidya, a unique scheme designed to meet
your children’s higher education needs – in India or abroad. Give us the
opportunity and we can together make your children’s dream of higher
education come true. Here are the salient features of our schemes:
 Purpose: - To provide financial support to deserving/meritorious students for
pursuing higher education in India and abroad.
 Eligibility:-
1. Any student who is a major representing himself or a minor student
represented by parents or guardian of India nationality.
2. Must have secured admission on the basis of merit to professional
technical/other courses through entrance test/selection process.
3. Must have secured admission to foreign university/institution (for studies
abroad).
 Courses Eligible:-
1. School education including plus 2.
2. Graduation, Post Graduation and Doctoral courses.
3. Professional courses in Engineering, Medical, Dental, Management,
Agriculture, Computer Science etc.
4. Computer certificate courses of reputed institutes accredited to Dept. of
Electronics or institutes affiliated to Universities.
5. Management courses approved by All India for Technical Education.
6. All courses should have been recognition by Central/State government.
7. Professional Post Graduation courses like MCA, MBA, MS etc offered by
reputed foreign universities.
26

8. Courses like ICWA, CA, CFA etc. and courses conducted by IIM, IIT, II Sc
etc.Evening courses of approved institutes
CUSTOMER SERVICE COMMITTEE OF THE BOARD
The CSCB was constituted in our bank on 14th jan2004 as per RBI directives
Bank conducted 4 quarterly meetings during the current as per the stipulated
periodicity.
STATUTORY AUDIT:
Syndicate Bank, with the approval of the - Sri Upendra Ananth Pai, a
Businessman, Sri Vaman Kudva, an engineer and Dr.T M A Pay, a physician -
The board of directors records its appreciation for the excellent support & co-
operation extended by the statutory auditors for completion of the audit in
time& for the enriching feedback offered by them.
PERSONAL SEGMENT ADVANCES
The personal segment deposits grew by 92220.60cri.e 27.053% Over the

previous year & contributed largely (92.41%) to the total aggregate deposit
growth of 10889.53 crores.
SyndNivas:-( Plus Pre-approved Personal Loans for Premium Loan Customer)

Home
 SyndNivas Plus: - A Pre-approved personal loan for Housing loan

customers with a good repayment record.
 Purpose: - To meet any genuine personal or business credit requirement.
27

 Eligibility:-Housing Loan customers who have demonstrated a

satisfactory repayment record of 2 years or more.
 Quantum:- The eligibility quantum of loan shall be arrived at as under:
Value of the residential property mortgaged under the Housing Loan
being the value at the time of sanction of the loan or the present value,
whichever is lower.
Outstanding balance I the Housing Loan account as on the date of offer of

his facility. Subject to a maximum of Rs 300000.
 Pre-approval and validity of the offer:-The loan will be offered on a pre-

approved basis to customers with a good repayment record. This pre-
approved offer will be valid for a period of 3 months from the date of
communication of the sanction.
 Security:-No additional security is required other than the residential
property already offered as security for the housing loan
 Rate of interest:-Prime lending rate of the bank.
 Surety/Co obliging:-Persons who had joined the mortgage transaction
under the Housing Loan, to jointly execute the document for this facility
also.
 Repayment:-In not more than 60 EMIs.
 Processing Fees: - No processing fees.
B.Education loan:
The education loan for the bank stood at 1139.81 cr as at the end of the FY 12
extending benefit to 53367 borrowers.
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Purpose : To extend financial assistance to all eligible/ deserving/ meritorious

students for pursuing higher education in India & Abroad.
Amount of : For studies in India, maximum `10 lakh

Loan Studies abroad, maximum `20 lakh
Margin : For loans up to `4 lakh: No Margin
For loans above `4 lakh:
I. Studies in India: 5%
II. Studies Abroad: 15%
Security : I. Amount: For loans up to `10 lakh for Studies in India and up to 20
lakh for studies abroad
II. Up to `4 lakh: No Security
III. Above `4 lakh to `7.50 lakh: Collateral security in the form of
suitable third party guarantee
C.Vehicle/ car loans:
Under this scheme 16269 new borrowers have been assisted & the portfolio,
grew by 185.95 cr. bank is having tie up arrangement with following leading car
manufactures.
 Maruti udyoga LTD

 Hyundai motor India LTD
 Tata motors ltd
 M&m LTD.
Purpose : Loans sanctioned for purchase of new passenger cars, Multi

Utility Vehicles (MUVs) and SUVs
29

1. Salaried Persons: 48 times the Net Monthly Income (NMI)

Loan Amount :
2. Self Employed: 4 times the Net Annual Income (NAI)
Margin : 15% of the On Road price of the Vehicle
Repayment : Up to 7 years
Interest : All loans should be given on a floating rate basis i.e., the
effective interest will increase or decrease in BASE RATE.
Processing Fee : collected upfront
Prepayment : No Pre-payment penalty is there.

Penalty
D.Gold loans:
Purpose : Demand Loan OR Overdraft by way of pledge of gold ornaments for

genuine requirements of individuals
Eligibility : All individuals who are 21 years and above
Security : Pledge of Gold ornaments or Jewellery made of 22 carat or 18 carat &

Gold coins issued by banks
Loan : Minimum `6,000

Services Provided By the Syndicate Bank
Tele Banking: Round the clock access regarding account details,
30

balance enquiries, transfer of funds can be made from one A/c to

another and utility bills like electricity, telephone, etc., can also be paid.
Internet Banking: The Bank is accessible from your home, office or

while you are traveling. A login password and transaction password
has to be obtained, with these password you can login and View a/c
transactions
a. Effect transfer of fund

b. Open a Term Deposit
c. Place requests for issue of chuque books, demand drafts, etc
PRODUCT PROFILE OF SYNDICATE BANK
Syndicate Bank brings to you a wide array of banking products including

Syndicate Bank accounts catering to different needs of its customers. The
Syndicate Bank account palette includes saving account, current, PPF account,
salary accounts, senior citizen and retirement savings accounts, no frills
account, government account, Demat account, corporate group account,
business current account, online bank account for internet banking, 3-in-1
account for online trading, international banking Noster and For ex trading
account, NRI accounts like NRE, NRO, FCNR accounts and many more.
A.SAVING BANK ACCOUNT: A must account for every one whether

young or old, rich or poor, with a host of facilities. Come and experience the
difference by opening an account with India’s most efficient big Bank with
31

minimum balance that is tailor made for all categories be it a student, senior
citizen, pensioner, working class or home makers
For Public Individual:
1. Rs.500/- with Cheque Book & Rs250/- without cheque Book for a Rural
Branch
2. Rs.1,000/- with Cheque Book & Rs500/- without cheque Book for a Non –
Rural Branch
For Pensioners and Senior Citizens:
1. Rs.250/- with Cheque Book & Rs125/- without cheque Book for a Rural
Branch
2. Rs.500/- with Cheque Book & RS250/- without cheque Book for a Non –
Rural Branch
Now, access your account from anywhere anytime in India or abroad, with
account transfer facility from one branch to another throughout the country
without changing the account number within minutes
B.CURRENT ACCOUNT
Customer friendly initiatives and approach to value your limited time and
urgency.
Experience the net Banking for Fund Transfers, Tax payments, e-statement of
account, bill payments, ASBA from any corner of India.
To have a current account with us, you need to maintain the minimum
balance as low as:
For Public Individuals:
I. Rural Branch: Rs2,500/-

II. Non-rural Branch: `5000/-
For Public Others:
32

I. Rural Branch: `2,500/-

For Pensioners:
I. Rural Branch: `1250/-

Now, get every notification of your transaction within minutes, through SMS
Alerts, to perfectly monitor your Banking Details
Salary account
Syndicate Bank Smart Salary Accounts are exclusively designed to suit the
salaried employees of State & Central Government Departments and
undertakings.
Saving plus account Get the best of both Savings and Fixed Deposit accounts.
25% concession on processing fee for Housing Loans and Car
Service charges on deposit Charges for non maintenance thereof, No service

charges will be levied for the accounts with minimum balance of `25/-.
Syndicate Bank for Personal Loans

Syndicate Bank personal loans are of the following types:
 Demand Loans Against Pledge Of Gold Ornaments

 VarunMithra (Rain Water Harvesting Scheme)
 Overdraft Against Pledge Of Gold Ornaments
 AdhyapakSuvidha Scheme
 Loans Against LIC And SBI Life
 Syndicate Bank Rail Plus
 KanyaVivahSuvidha Scheme
 Loan To Pensioners
 Syndicate Bank -Journalist Plus
 Syndicate Bank Paryatan Scheme
 Purchase Of Cars
 Credit To Credit Card Holders - SBH C3 Scheme
 Syndicate Bank Tax Suvidha Scheme
33

 Loan Against Term Deposit Receipts

 Cash Key
 SARAL Loan Scheme
 Reverse Mortgage Loan Scheme
 Syndicate Bank Fast Credit Scheme
 Housing Loan Scheme
 UdyogaBandhu Scheme
 Mortgage Loans
 Loans against NSCs/IVPs/KVPs
 Personal Loan
 Educational Loan
 Syndicate Bank -Sanchar Plus
 Vanitha Gold Scheme
 Scoom (Two Wheelers)
 Software Professional Plus Scheme
 Syndicate Bank Loans To Family Pensioners
 Personal Computers
 Education Loan Plus Scheme
 Syndicate Bank Rakshak Scheme Coaching Plus Scheme
 Advance against Shares & Debentures
 Personal Loan to Trainees for Pilot Training Programmes and Air Hostess
Courses
VISION AND MISSION OF SYNDICATE BANK

VISION
- Emerging as a vibrant, strong responsive competitive bank

- Consolidating position as a premier public sector bank with increased
global outreach
MISSION
To achieve global deposits of Rs. 76 thousand corer by March 2007 with

emphasis on low cost resources by planned strategic initiatives including branch
expansion, aggressive marketing and active involvement of each and every
employee of the Bank.
34

C.OVERVIEW:
Liberalization & de-regulation process started in 1991-92 has made a sea

change in the banking system. From a totally regulated environment, the
banking industry has gradually moved into a market driven competitive system.
The move towards global benchmarks has been, by & large, calibrated &
regular driven. The pace of changes gained momentum in the last few years.
Globalization would gain greater speed in the coming years. Four trends change
the banking industry world over viz consolidation of players through M&As,
globalization of operations, development of new technology & universalisation
of banking. With technology acting as a catalyst, the industry expects to see
great changes in the banking scene in the coming years.
The traditional banking functions would give way to a system geared to

meet all the financial needs of the customer. One could see emergence of highly
varied financial products, which are tailored to meet specific needs of the
customers in the retail as well as corporate segments. The advent of new
technologies could see the emergence of new financial players doing financial
intermediation. For e.g., we could see utility service providers offering say, bill
payment services or supermarkets or retailers doing basic lending operations.
The conventional definition of banking is undergoing changes.
35

Award And Achievements of Syndicate Bank
Best Banker Award

Our MD Shri BhagavanthaRao is receiving Best Banker Award in 'Priority
Sector' and 'Efficiency and Profitability' for Year 2012
Best Bank Award
Former MD Smt RenuChallu receiving Best Bank Award
2011
MSME National Award
Our MD Shri M BhagavanthaRao is receiving MSME National Award 2011

2011
Big Bank Award
Former MD Smt RenuChallu receiving Big Bank Award
2010
MSME Award
Former MD Smt RenuChallu receiving MSME Award 2010 from CM

2010
SWOT ANALYSIS
OBJECTIVE OF SYNDICATE BANK:
“Purposeful banking sub serving the growing and diversified financial

needs of planned economic development of the country”
36

STRENGTH:
 Brand Name:
Syndicate Bank has earned a reputation in the market over the period of
time(Being the oldest bank in India tracing history back to 1806)
 Market Leader:
Syndicate Bank is ranked at 280 in 2008 Fortune Global 500 list, and
ranked 219 in 2008 Forbes Global 2000. With an asset base of $126 billion and
its reach, it is a regional banking behemoth.
 Wide Distribution Network:
Excellent penetration in the country with more than 6000core branches, and
more than 2500 branches of associate banks (subsidiaries).
 Diversified Portfolio:
Syndicate Bank has all the products under its belt, which help it to extend
the relationship with existing customer of Syndicate Bank has umbrella of
products to offer their customers, if once customer has relationship with the
bank. Some Products, which Syndicate Bank is offering are: Retail Banking
Business Banking Merchant Establishment Services (EDC Machine) Personal
loans & Car loans Insurance Housing Loans.
 Low Transition Costs:

Syndicate Bank offers very low transition costs which attracts
small customers.
37

WEAKNESS:
 The existing hierarchical management structure of the bank, although

strength in some respects, is a barrier to change.
 Though Syndicate Bank cards are the 2nd largest player in the credit
card industry, it has the highest nonperforming assets (NPAs) in the
industry, which stand out to be at 16.28 % (Dec 2007).
 Syndicate Bank lags with respect to private players in terms of
modernisation of its processes, infrastructure, centralisation, etc.
OPPORTUNITY:
 Merger of associate banks with Syndicate Bank: Merger of all the

associate banks (like SBM, etc) into Syndicate Bank will create a
mega bank which streamlines operations and unlocks value.
 Planning to add 2000 branches and 3000 ATMs in 2011-2012.This
will further increase its reach.
 Increasing trade and business relations and a large number of
expatriate populations offers a great opportunity to expand on
foreign soil.
THREAT:
Advent of MNC banks: Large numbers of MNC banks are mushrooming in

the Indian market due to the friendly policies adopted by the government. This
can increase the level of competition and prove a potential threat for the market
share of Syndicate Bank
38

Consumer expectations have increased many folds in last few years and the
bank has not been responsive enough to meet them on time.
Private Banks have started venturing into the rural and semi-urban sector,
which used to be the bastion of the State Bank and other PSU banks
Employee Strike: There was an employee strike in the year 2006 which
disrupted Syndicate Bank activities. This can be repeated in the future.
RESEARCH METHODOLOGY
 STATEMENT OF THE PROBLEM
The banking industry being competitive and turbulent is it at present with

the entrance of foreign banks and other private sector banks. The interest rate
for credit limit over Rs 2 Lakhs was fully deregulated and banks were given
freedom to fix the interest rates. banks were directed to fix the minimum
lending rate i.e., the Prime Lending Rate (PLR), which would be the best and
minimum rate that Banks can offer to its customers
As the banks were given freedom to fix their own interest rates, there will
be a competition within different banks. And the interest rates fixed by banks
may not be comfortable for the borrowers to borrow the funds so; I have
selected this topic to study whether the interest rates fixed by banks are
comfortable for the customers to take loans or no. For my study I have selected
two banks i.e Syndicate Bank and Canara Bank to compare the rate of interest
39

LOANS AND ADVANCES
Profit is the pivot on which the entire business activity rotates. Banking is
essentially a business dealing with money and credit. Like every other business
activity, bank is also profit oriented. A bank invests its funds in many ways to
earn income. The bulk of its income is derived from loans and advances.
Banks make loans and advances to traders, businessmen and industrialists
against the security of some assets or on the basis of the personal security of the
borrower. In either case, the banks run the risk of default in repayment.
Therefore banks have to follow a cautions policy and sound lending principles
in the matters of lending. Banks in India have to consider the national interest
along with their own interest while determining the lending policy.
.
PRINCIPLES OF SOUND LENDING
Traditionally, banks have been following three cardinal principles of

lending viz., safety, liquidity and profitability. Banks in India have shouldered
additional responsibility of fulfilling social obligations. Hence, the banks
observe both the traditional and certain other principles.
1. SAFETY
Safety first as advocated by Tanoan should be the guiding principle. A
bank lends what it receives from the public as deposit. The success of the bank
depends upon the confidence of the depositing public. Confidence could be
infused in the depositors by investing the money in safe and sound securities.
Safety depends upon
40

I. The security offered by the borrower and

II. The repaying capacity and willingness of the debtor to repay the loan with
interest
So the banker should ensure that the securities offered are adequate and
readily reasonable and the borrower is a person of integrity, good character and
reputation.
2. LIQUIDITY
Liquidity refers to the ability of an asset to convert into cash without loss
within short time. The liabilities of a bank are repayable on demand or at a short
notice. To meet the demand of the depositors in time, the banks should keep its
funds in liquid state. Money locked up in the long -term loans such as land
building, plant and machinery etc., cannot be received back in time and so less
liquid. Short-terms loans and loans granted against securities such as goods can
be converted into cash easily and so liquid. So a bank should confine its lending
to shot terms against marketable securities.
3. PROFITABILITY
Like all other commercial institutions banks are run for profit. Even
government owned banks are no exception to this. Banks earn profit to pay
interest to depositors, declare dividend to shareholders, meet establishment
charges and other expenses, provide for reserve and for bad and doubtful debts,
depreciation, maintenance and improvements of property owned by the bank
and sufficient resources to meet contingent loss.
41

So profit is an essential consolidation. A banker should employ his funds in

such a way that they will bring him adequate return. The main source of profit
comes from the different between the interest received on loans and those paid
on deposit. Anyway a banker should never give undue importance to
profitability.
4. SECURITY
Customers may offer different kinds of securities, viz., land, building

machinery, goods and raw materials to get advances. The securities of the
customers are insurance and banker can fall back upon them in times of
necessity. For the sake of safety he should ensure that the securities are
adequate, marketable and free from encumbrances. Securities which could be
marketed easily, quickly and without loss should be preferred.
5. PURPOSE OF THE LOAN
Before sanctioning loans a banker should enquire about the purpose for
which it is needed. Loans for undesirable activities such as speculation and
hoarding should be discouraged. Borrowing for productive purposes is readily
allowed by banks. It is also equally important on the part of banks to ensure that
a loan is utilised for the purpose for which it is granted so that repayment will
be prompt.
In many countries the central bank gives directions as to the purpose for
which loan may be made. Section 21 of Banking Regulations Act 1949 confers
on Reserve Bank of India the power to control advances by banks
42

Purpose of the loan has assumed a special significance in the present day
concept of banking. Before sanctioning a loan a banker should enquire about the
purpose for which it is needed. Loans granted for productive purpose increases
the earning capacity of the borrower and ensure prompt repayment. Loans for
undesirable activities such as speculation, hoarding etc., should be discouraged.
It is equally important to ensure that the loans is utilised for the purpose for
which it is granted.
6. SOURCES OF REPAYMENT
Before giving financial accommodation, a banker should consider the

source from which repayment is promised. In some instance, debentures
which are to be redeemed in few months time or a life policy which is to
mature in near future may be offered as security. Advances against such
security give no trouble.
Sometimes customers may apply for loans for additional working capital for
their business and undertake to repay out of the profits over a period. In such
cases the rate at which the customer can reasonably hope to repay should be
ascertained. An examination of the audited accounts may guide the banker in
knowing the repayment capacity of the customer.
7. DIVERSIFICATION OF RISKS
The security consciousness of a banker and the integrity of the borrower are
not adequate factors to keep the bankers on safe side. What is more
43

important is the diversification of risk. This means he should not lend a

major portion of his loan able funds to any single borrower or to an industry
or to one particular region. An adverse change in economy of these may
affect the entire business. In such a case repayment will be highly difficult
and survival of the bank becomes questionable.
Therefore a bank should follow wise policy of do not lay all the eggs in
the same basket. The bank must advance moderate sums to a large number of
customers spread over a wide area and belonging to different industries
8. RECENT CONCEPT OF SOUND LENDING
Productivity of the loan: In the wake of nationalisation of 14 banks,

banking has undergone a metamorphosis. Today a bank is not exclusively a
financial institution but is alive to the people. It has a strong social objective
and social conscience.
Banks are catalytic agents in catering to the better needs of development
in conformity with the national objectives. If rapid progress is to be realised;
bank credit should be made available to the neglected sectors of economic
activity and to the under- privileged sections of the society. To make this a
reality, banks have to shed their outlook of security- consciousness. The
traditional belief of security being the measurement of credit needs is a
myth.
A sound credit is one where timely repayment is assured. This largely
depends on the earning power of the business unit and repaying capacity of
the borrower. So the great emphasis is laid on the productivity of the loan.
44

Since the banks have shouldered an additional responsibility of keeping

tempo of development of the economy they should consider the productivity
of loan as the chief criterion for advancing loans.
SECURED AND UNSECURED LOANS
Loans and advances may be made either on the personal security of the
borrower on the security of some tangible assets. The former is called
unsecured or clean or personal advances and the latter is called secured
advances.
Unsecured advances
Section 5(i) (n) of the Banking Regulation Act defines unsecured
loan as “unsecured loan or advance means a loan or advance not so secured.”
The distinguishing feature of this type of loan, according to the
definition is that no tangible security is offered to the bank
Clean advances are granted to the customers of integrity with a
sound financial backing, highly business reputation and capacity to manage
the business. In such a case the general capacity of the customer is security
in itself. In case of his default to repay the Banker’s position is unsafe and
can rank equal with other unsecured creditors to realise the assets of
borrower. So to safeguard his position a banker lends on personal security
coupled with the guarantee of one or more persons.
Confidence in the borrower is the basis of unsecured advances. A
banker plans his faith on the ability and willingness of the borrower. It is a
sine qua non of good lending that the banker should know his customer well
45

and be able to form a judgement about his integrity which should be under
doubted. The confidence is judged by 3 considerations, character, capacity
and capital usually referred to as the 3 C’s.
 Character
Character constitutes the best asset of a man. The word character
implies personal qualities like honesty, responsibility, promptness,
reputation and goodwill. A person who possesses most of the above
qualities is considered as a man of character and a bank can extend credit
to him without any reservation. With such men of integrity repayment of
loan will be certain and timely. So character is of paramount importance
for unsecured loans.
 Capacity
The capacity of a borrower refers to his ability to manage the

business. Success of the enterprise depends mainly on the initiative,
interest, experience and managerial ability of the entrepreneur. So
capacity is the next consideration in granting clean advances.
Nationalisation of banks has widened the meaning of capacity of
the borrower. In judging the capacity, greater reliance is made on the
economic viability of the project for which loan is sought. Economic
viability means the capacity to manufacture goods at the lower cost and to
leave sufficient profit to meet its commitment of loans. It is also expected
that the enterprise should contribute to higher production and serves
social objectives. Thus the capacity of a borrower is assessed by his
technical competence, experience in that line of business, operational
46

efficiency of the project, its earning power and also the productive
purpose of the loan.
 Capital
In addition to the character and capacity of a borrower, a banker looks
into another aspects, i.e., capital. A bank provides mainly the working capital
requirements of the business. A borrower should have sufficient capital to
conduct his business and adequate plant and machinery to carry out normal
production. In this respect banks may follow the formula evolved by Dr .C. B.
Memorial.
a) Character + Capacity + Capital = Safe credit
b) Character + Capacity + Insufficient capital = Fair credit risk
c) Character + Capacity – Capital = Limited success
d) Character + Capacity – Impaired character = Doubtful credit risk
e) Capital + Capacity – Character = Dangerous risk
f) Character + Capital – insufficient capacity = Fair credit risk
g) Character + Capital – Capacity = Inferior credit risk
h) Character – Capital – Capacity = Fraudulent one
SECURED ADVANCES
Secured advances mean loan made on the security of tangible assets like
land building, machinery, goods and documents of title of goods. Such loans
provide absolute safety to a banker by creating charge on the assets in favour
of him.
Section 5(i) (n) of the Banking Regulation Act 1949, defines secured
advances as “Secured loan or advance means a loan or advance made on the
47

security of assets the marker value of which is not at any time less than the
amount of loan or advance.”
The definition explains the two essential features of secured advances:
(i) The advance must be made against tangible security.
(ii) The market value of the security must not be less than the amount of loan
granted
The type of security offered varies from place to place. In big cities like
Mumbai, kolkata and Chennai, government bonds and stock exchanges
securities are offered. In large industrial areas raw materials and finished goods
are given as cover for loan. Agricultural produce is the principal security
offered in agricultural centres. In addition to the above, a banker may also lend
against movable properties, book debts life policy etc.
Security may be classified as primary security and collateral security
 Primary security
The security deposited by the borrower himself as cover for the loan is
called the primary security. In the banking parlour, it refers to the asset which
has been bought with the help of bank finance. For instance, machinery has
been bought with the help of bank finance. That machinery constitutes the
primary security to the banker. All other securities deposited to cover the same
advance are called collateral securities.
 Collateral security
The term collateral security is used in two senses. In a narrow sense it
refers to the securities deposited by the third party to secure advances for the
48

borrower. In a wider sense it denotes any type of security on which the creditor
has a personal right of action on the debtor in respect of the advance.
FORMS OF ADVANCES
Banks offer different kinds of borrowing facilities to their customers. The
credit facilities may be broadly classified into four types:
1. Loans
2. Cash credit system
3. Overdraft
4. Bills purchased and Discounted
1. LOANS
In case of loan, the banker advances a lump sum for a certain period at an
agreed rate of interest. The entire amount is paid on an occasion either in cash
or by credit in his current account which means he can draw at any time. The
interest is charged for the full amount sanctioned whether he withdraws the
money from his account or not. The loan may be repaid in instalments or at the
expiry of a certain period. The loan may be made with or without security. A
loan once repaid in full or in part cannot be withdrawn again by the customer. In
case a borrower wants further loan, he has to arrange for a fresh loan.
Loan may be a demand loan or a term loan. Demand loan is payable on
demand. It is for a short period and usually granted to meet working capital
needs of a borrower. The term loans may be medium-term or long-term loan.
Medium- terms loans are granted for a period ranging from one year to five
years for the purchase of vehicles, tractors, tools and equipments. Long term
49

loans are granted for expenditure such as purchase of land, construction of

factory building, purchase of new machinery and modernisation of plant.
2. CASH CREDIT
A cash credit is an arrangement by which the customer is allowed to

borrow money up to a certain limit. This is a permanent arrangement and the
customer need not draw the sanctioned amount at once, but draw the amount as
and when required. He can put back any surplus amount which he may find
with him. Thus cash credit is an active and running account to which deposits
and withdrawals may be affected frequently. Interest is charged only for the
amount withdrawn and not for the whole amount charged. Cash credit
arrangements are usually made against pledge or hypothecation of goods.
Sometimes, this facility is also provided against personal security.
If the customer does not use the cash credit limit to the full extent, a
commitment charge is made by the bank. This charge is imposed on the
unutilised portion of cash credit only.
Cash credit provides an elastic form of borrowing since the limit
fluctuates according to the needs of the business. Cash credits are the most
favourite mode of borrowing by large commercial and industrial concerns in
India.
50

3.OVERDRAFT
Overdraft is an arrangement between a banker and his customer by which

the latter is allowed to withdraw over and above his credit balance in the current
account up to an agreed limit. This is only a temporary accommodation usually
granted against securities. The borrower is permitted to draw and repay any
number of times, provided the total amount overdrawn does not exceed the
agreed limit. The interest is charged only for the amount drawn and not for the
whole amount sanctioned.
A cash credit differs from an overdraft in one respect. A cash credit is
used for long-term by the business in doing regular business whereas overdraft
is made occasionally and for short duration.
3. BILLS DISCOUNTED AND PURCHASED
Banks grant advances to their customer by discounting bill of exchange

or promote. The amount, after deducting the interest from the amount of the
instrument, is credited in the account of the customer. In this form of lending
the interest is received by the banker in advance. Discounting of bill constitutes
a clean advance and banks rely on the credit worthiness of the party to the bill.
Banks, sometimes, purchase the bills instead of discounting them. Bills

which are accompanied by documents of title to goods such as bill of lading or
railway receipt are purchased by the bankers. In such cases, the banker grants
loan in the form of overdraft or cash credit against the security of the bills. The
term ‘Bills Purchased’ seems to imply that the bank becomes the
51

purchaser/owner of such bills. But in almost all cases the bank holds the bill
only as a security for the advances
The Benefits Of Cash Advance Loans
A cash advance allows people to get funds speedily and easily without
requiring a traditional bank loan, which can be an arduous and slow task. In
fact, the speed with which candidates can receive funds through a cash advance
makes it so attractive to individuals and so many people.
People from all backgrounds are ready to use cash advances for paying
bills for emergencies, unexpected expenses, and even cover medical expenses.
This type of loan is designed to be used between pay checks when money is
tight and an expense or bill must be paid immediately. When the next pay check
arrives, the loan must be repaid. That's why it's called a payday\ advance.
A loan to the payday advance is the quickest way to find funds when it is
needed most. A payday loan is often obtained online, especially if speed is the
most imperative factor. Most online stores cash advance deposit funds directly
into bank account of the applicant after approval of the request. When the
person has a current account, the whole process is simple, from start to finish.
All that is required to apply for a payday advance is an account open and
active checking the applicant's name, and a regular source of income.
Candidates must have at least 18 years and be able to properly complete the
application provided by the loan company. For most people, the application is
quick and simple.
The amount a person can obtain a cash advance depends on several

factors, including what is required for the loan and income level. The state in
52

which the plaintiff resides also determines the maximum loan amount, it is
logical to find the amount of state before starting a demand for this type of loan.
Most companies payday mention the maximum application.
One of the best reasons to get a payday loan is to receive cash quickly
and without hassle. With most companies the process is automatic and very
easy to run. When the loan is approved, funds for lending cash advances are
immediately deposited in the account control of the applicant through a bank
transfer.
53

4. ANALYSIS AND INTERPRETATION
Loan Schemes
BASE RATE: 10.20%

INTEREST RATES ADVANCES SEGMENT WISE AS ON 01.10.2012
HOUSING LOAN SYNDICATE BANK

CAMPAIGN PERIOD (FROM 01-01-2014 TO 30-03-2015)
Period/ Amount Up to `30 Above `30
lacks lacks
Up to 30 Yrs 10.20% 10.25%
Syndicate Bank Max gain 10.20% 10.25%

Housing Loan
Processing Charges 50% off
25.00%
20.00%
Syndicate Bank Max gain
15.00% Housing Loan
Up to 30 Yrs
10.00%
5.00%
0.00%
1 2
54

Housing Loan »
Period/ Amount Up to `30 Above `30

lacks lacks
Up to 20 Yrs 11% 11.25%
Syndicate Bank Maxgain 11% 11.25%

Housing Loan
25.00%
20.00%
15.00%
10.00%
5.00% 11.00% 11.25%
0.00%
Up to `30 lacks Above `30 lacks
Eligibility for Syndicate Bank Home Loans-

Individual(s) over 18 years of age with steady source of income, including
persons engaged in agriculture & allied activities
55

Documents Required for Syndicate Bank Home Loan:
1. Completed loan application

2. 3 Passport size photographs
3. Proof of identify (photo copies of Voters ID card/ Passport/ Driving
license/ IT PAN card)
4. Proof of residence (photo copies of recent Telephone Bills/ Electricity
Bill/ Property tax receipt/ Passport/ Voters ID card)
5. Proof of business address for non-salaried individuals
6. Statement of Bank Account/ Pass Book for last six months
7. Personal Assets and Liabilities statement
SYNDICATE BANK
Car Loan Campaign (Floating Rate) »
Interest Rate : 10.50% p.a.
Processing Charges : 50% off
Car Loan »
Upto 7years : 11.00% p.a. (0.70% above BR)
Old Less than 3 years : 15.75% p.a. (5.45% above BR)

Vehicles
3 to 5 years : 16.00% p.a. (5.70% above BR)
56

Series 1
3
Series 2
Series 3
2
0
Category 1 Category 2 Category 3 Category 4
DOCUMENTS REQUIRED FOR CAR LOAN
1. Statement of bank account of the borrower for last 6 months.

2. 2 passport size photographs of borrower(s).
3. A copy of passport /voters ID card/PAN card.
4. Proof of residence.
5. Latest salary-slip showing all deductions
6. I.T. Returns/Form 16: 2 years for salaried employees and 3 years for
professional/self-employed/businessmen duly accepted by the ITO wherever
applicable to be submitted.
7. Proof of official address for non-salaried individuals
DETAILS OF SYNDICATE BANK CAR LOAN

Syndicate Bank Car Loan Interest Rate. (Daily reducing balance)
10.75% to 11.25% floating.
Processing Fees
57

0.1% of Loan Amount, with minimum of Rs 250 and maximum of Rs.

500
Preclusive charges
Nil
Syndicate Bank Car Loan Tenure
1 year to 6 years
syndicate Bank Car Loan Amount
Up to 90% for new vehicles. 75% for old vehicles with maximum as Rs 6
lakhs
Guarantor Requirement
Guarantor is mandatory
Education Loan » Syndicate Bank
: 12.75% p.a. (2.45% above BR)
Above `4.00 Lakhs : 13.25% p.a. (2.95% above BR)
Advances against Govt. Securities NSC, VIPs etc : 13.50% p.a. (3.20% above BR)
58

Advances against shares and debentures/ Bonds/ : 14.75% p.a. (4.45% above BR)
Units/ Mutual Funds
RBI Relief Bonds : 13.75% (3.45% above BR)
Advances against surrender value of of Life : 13.75% (3.45% above BR)

Insurance policy
Advances against Bank’s Term Deposit : 1.50 % above the interest rate
allowed on the deposit
Advances against balances in the Janata Deposit : a) 14.25 % (3.95% above

Account a) For Public b) For Staff BR)
b) 12.25 % (1.95% above
BR)
59

4.5
3.5
3 Series 1
2.5 Series 2
2 Series 3
1.5
0.5
0
DOCUMENTS REQUIRED FOR EDUCATION LOAN IN SYNDICATE

BANK
I. Completed Education Loan Application Form.

II. Mark sheets of last qualifying examination
III. Proof of admission scholarship, studentship etc
IV. Schedule of expenses for the specified course
V. 2 passport size photographs
VI. Borrower’s Bank account statement for the last six months
VII. Income tax assessment order, of last 2 years
VIII. Brief statement of assets and liabilities, of the Co-borrower
IX. Proof of Income (i.e. Salary slips/ Form 16 etc)
60

Gold Loan » SYNDICATE BANK
Up to `1.00 : 12.75%
Lakhs p.a.
(2.45%
above
BR)
Demand Loan Above`1.00 : 13.00%

Lakhs p.a.
(2.70%
above
BR)
Overdraft Up to `1.00 : 13.50%

Lakhs p.a.
(3.20%
above
BR)
Above : 13.75%
`1.00 p.a.
Lakhs (3.45%
above
BR)
Documentation
1. Proof of identity (passport copy/voters id/driving license/pan card)

2. Address proof ( electricity bill/landline telephone bill/passport copy/shop &
establishment certificate/rental agreement/ration card)
3. 2 passport size photos
61

14
12
10
8 Series 3
Series 2
6 Series 1
0
62

VERTICAL FORM BALANCE SHEET AS ON 31ST MARCH 2013
BALANCESHEET AS ON 31st MARCH 2013-14

LIABILITIES AMOUNT ASSETS AMOUNT
Share capital 601.95 Cash and balance with 8,.095.31
reserve bank of India
Share warrants & 0.00 Balances with banks and 8,488.93
outstanding money at call and short
notice
Total reserve 9.939.39 investments 45,647.66
Shareholder’s 10.541.34 advances 1,47,569.02
Deposits 1.85,355.89 Gross block 2,255.32
Borrowings 12,813.80 Less : accumulated 847.94
depreciation
Other liabilities & 6,411.30 Less : impairment of assets 0.00
provisions
Net block 1,407.38
Lease adjustment 0.00
Capital work in progress 26.58
Other assets 3,887.44
Total liabilities 2,15,122.33 Total assets 2,15,122.33
63

Balance sheet as at 31-03-2014
Deposits and other Cash and balance 2216545.26

accounts with RBI
Fixed deposits from 127374500.09 Over drafts 113859070.25

others
SB deposits 141507616.75 Advances due from

others
Current deposits from Bills discounted

banks Purchased
Current deposits from 21580333.01 Bills lodged for

others collections
Bills payable 38750.00 Branch adjustments 168524199.26
Bills for collections Sundry assets 754298.99
HO account, extetion Compulsory deposits

counter
Other liabilities 549871.82 Stamps and 18311.29

stationary
Compulsory deposits Furniture & fixtures 835377.37
ECGC/CGC claim received Interest receivable 2468771.43
Depreciation on furniture 507180.16 Miscellaneous assets
Depreciation on motor
64

Vhls
Acceptances favoring
others
Unrealized non- 2468771.43

performing adv.
Net profit Net loss 5350547.71
TOTAL 294027122.26 TOTAL 294027122.26
PROFIT & LOSS A/C AS ON 31/12/2014
INCOME AMOUNT EXPENDITURE AMOUNT

INTEREST 14416647.14 INTEREST ON 11430349.96
DEPOSITS
Interest on other 190277.74 Interest on savings 5241106.12
NPAs bank
Establishment charges 3295658.13
Commission on govt 265080.00 Rent 148320.00

transaction
Commission on 8932.00 Municipal & other 10000.00
inland collection local taxes
Exchange on inland 48875.28 Lighting charges 132459.00
collection
Commission earned Postage charges 4911.00
on non-life
insurance business
Commission earned 9148.65 Telephone charges 23187.00
on life insurance
Commission earned AUDIT EXPENCES
on CMS business
OTHER RECEIPTS Repair charges
Incidental charges REPAIRS TO
BUILDING
Service charges 154751.00 Depreciation 92957.00
Locker charges 0.50 Computer 7345.00
65

maintenance charges
Miscellaneous 257034.61 Maintenance of bank
income own property
Bad debts recovered 24182.00 Printing 7940.00
Minimum bal charges 246679.68 Stationery 37185.00
collected
CASA charges 41904.42 Computer stationery 24650.00

collected
OTHER EXPENDITURE
Contingencies 247805.00
Fright & carriage 1887.00
Entertainment exp 10223.00

121166.26
Travelling exp
Halting exp 77057.50
Reimb of lunch exp 36181.67
Brokerage 4000.00
News papers charges 13147.00
Remittance charges 7312.00
SIDBI Upfront fees 32519.00
Security charges 45218.00
Commitment charges 18690.00
TOTAL EXPINDITURE 21021275.64
NET LOSS 5350547.71
TOTAL 21021275.64 TOTAL 21021275.64
66

Balance sheet as at 31-03-2015
Deposits and other Cash and balance 4103005.84

accounts with RBI
Fixed deposit from 165426433.7 Advances due from

others 5 others
SB deposits 162110861.5 Overdrafts 128244310.2

4 3
Current deposits Bills lodged for

from banks collections
Current deposits 22753965.05 Branch adjustments 208088017.8

from others 6
Bills payable 72186.00 Sundry assets 898189.66
Bills for collections Compulsory deposits
HO account, 25000.00 Stamps and 24326.89

extension stationary
Other liabilities 790597.93 Drfts, TTS paid of

others
Compulsory Furniture and fixture 1172462.37

deposits
ECGC/CGC claim 166635.00 Guarantees issued on

received others
Depreciation on 619090.16 Interest receivable 3623948.77

furniture
67

Unrealized intest on 3623948.77 Miscellaneous assets

non-performing adv.
Acceptances
favoring others
Lc’s Acceptances etc.
Miscellaneous
liabilities
Net Profit
Net loss 9434456.54
TOTAL 355588718. TOTAL 355588718.1

16 6
68

PROFIT & LOSS A/C AS ON 2015
INCOME AMOUNT EXPENDITURE AMOUNT
INTEREST 1242148.45 INTEREST ON DEPOSITS 13854120.55
Interest on other NPAs 413051.91 Interest on savings bank 6206682.26
Intersection ODC 337763.53 Establishment charges 3302276.58
Interest on restructure -467.41 OTHER OPERATIVE

EXPENDITURE
Interest on farm loans 6470529.00 Rent 148320.00
Interest on jewel loans 404236.71 Municipal / other loans 2500
Interest on housing loans 2922146.36 Lighting charges 147890.00
Interest on vehicle loans 11981488.00 Postage charges 10803.00
Interest on LD& ODD 7532.72 Telephone charges 30036.51
Interest on education loans 911000.15 AUDIT EXPENCES
Int on syndschemes 7456639.44
Int on other stock 35992.22 Repair charges 5800.00
Int on agri jewel loans 14533.99 REPAIRS TO BUILDING
Commission on inland collection 6151.00 Depreciation 101305.00
Commission on govt transaction 44460.00 Computer maintenance 37532.54

charges
69

Exchange on inland 47513.00 Maintenance of bank own

property
Commission earned on non LIB 3627.10 Printing 16619.54

Commission earned on LIB 18609.90
7165.23 Stationery
Incidental charges 8864.00
Computer stationery 13793.00
Service charges 378098.00
OTHER EXPENDITURE
Locker charges 0.00 Contingencies
59445.00
Miscellaneous income 189851.86 Fright & carriage
972.00
Debit card income 22770.00 Entertainment exp 11558.00.
Travelling exp 155150.00
Minimum balance charges collected 250029.16 Halting exp 39945.00
SASA Charges collected 35925.72 Pigmy agents com
Motor cycle exp
Securitycharges 278087.00
News papers charges 14400.00
Remittance charges 4100.00
Concurrent 5000.00
70

SIDBI Upfront fees 27229.00
Reimb of lunch exp 37800.00
Commitment charges 0.66
TOTAL INCOME 24529974.84 TOTAL EXPINDITURE 24529974.84
NET LOSS 9434456.54

NET PROFIT
TOTAL 24529974.84
TOTAL 24529974.84
71

Chapter-5
FINDINGS
- It was found that 24 customers are availed syndicate bank because of

services. 26 customers have opted because of safety.7 customers have
opted because of charges & customers have opted for any other reasons
.Due to this, 61 customers is satisfied with the service.
- It was found that 62 customers perceive charges as moderate, 23

customers as low & 15 customers as high. Among 15, 11 customers
unsatisfied because of this.
- It was found that most of the customers expect from Syndicate Bank,
more at poor banking facility, good customer service & staff co-
operation.
- It was found that the customer’s opinion about services provided by

Syndicate Bank, the most of the customers are satisfy with the services of
Syndicate Bank.
- It was found that 40 customers say that the transactions are done quickly.
39 customers are says it’s moderate. 21 customers say that it’s slow & it
was also found that the customers want to avail in future the more ATM
facility service.
- From comparative analysis it was found that Syndicate bank stand at in

good position, Vijay bank in terms of Transaction related service and
charges but SBI is a best which is according to more than 40 customers.
72

RECOMMENDATIONS
It has provide immediate service and cooperation to the customers
The bank has to fully computerize in terms ofi services provided to the
customers. It has to make use of IT enabled services to provide the
services.
It has to deliver with transaction related services in order to get more

customers.
It has to focus more on core banking and retail banking services to ensure
customers satisfaction.
Loan rate charges has to be decreased of SBI bank i.e., Education loan,
home loan rate.
For opening the account of Syndicate bank the time should be decreased.
73

CONCLUSION
At last to conclude I would like say that I had a very good experience and
also I gained a lot of knowledge
 I came to know that the interest rates not only affect the customer
satisfaction and their ability to repay it, but also I came to know how the
interest rates affect on the profit and loss of the bank
 1% of increase or 1% of decrease in the interest rate may lead to the

crores of profit and loss to the banks
 Syndicate bank provide different types of loans to the different types of

customers depending in their ability to pay the interest and to repay the
loan amount
 Syndicate bank provides equal type of services all of its customers
74

CHAPTER-6
BIBLIOGRAPHY
REPORTS
 Periodicals / Journals
 Syndicate Bank Annual Report 2014-2015
 Websites
 http://www.google.co.in
 http://www.syndicate bank.com
 http://moneycontrol.com
 WWW.ask.com
Materials:
 Syndicate Banking Booklets

 RBI Bulletin
Text Books:
 Management Accounting (K.S. Nagapathi)

 Financial Management Khan & Jain
 Financial Management Dr. S.N. Maheshwari
 Financial Management I.M
75

76

77

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EVALUATION OF LOANS AND ADVANCES

Banking regulation Act 1949, defines banking as accepting for the

Banking provides well-paid, secure and satisfying career prospects.

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

 OBJECTIVE OF THE STUDY

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

 To study the Documentation process for loans and advances in Syndicate

 SCOPE OF THE STUDY

 LIMITATIONS OF THE STUDY

 As the study is based on the secondary data and other information

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

EVOLUTION OF SYNDICATE BANK

Established on 20th October, 1925 by three great visionaries viz. Dr.

The success story of Syndicate Bank (name changed in 1964) is a story of

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

ideas, without however getting uprooted from its distinctive socio-economic

The abode of Lord Krishna in coastal Karnataka with a capital of

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

SYNDICATE BANK IS A INDIA’S LARGEST BANK

 Asset 105 lack core

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

 Powerful Brand Equity

Comprehensive Range of Products & services

Achieving leadership Across Product and Customer Segments

 India’s leading universal bank

Sponsor Banks of Syndicate Bank:

1. Karnataka Vikas Grameena Bank in Dharwad.

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

4. Prathama Grameen Bank in Moradabad in U.P.

HEAD OFFICE AT A GLANCE

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

Organizational structure of Syndicate Bank at Raichur

Marketing Finance Manager HR

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

CHAIRMAN & MANAGING

1. Credit Department 7. Priority Sector Credit Dept

2. Planning & Dev Department 8. Central Accounts & Legal Dept

3. Recoveries Department 9. Personnel Department

4. Dept. of Information Technology 10. Inspection Department

6. Risk Management & Monitoring Dept.

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

OBJECTIVES OF THE STUDY:

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

1.2 THE SERVICES OF SYNDICATE BANK

Syndicate Bank Global Debit Card:-

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

SYNDICATE BANK GLOBAL CREDIT CARD:-

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

1.4 WORLD WIDE NETWORK OF SYNDICATE BANK

2) OVERVIEW OF BANKING INDUSTRY PROFILE

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

an establishment for the custody of money which it pays out on a

The banking system in India is significantly different from that of other

Syndicate Bank was established in 1925 in Udupi, the abode of Lord

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

Other services provided by Syndicate Bank are listed below:

 Demat / Depository Services

In India the banking sector is segregated as public or private sector banks,

DEPARTMENT OF COMMERCE P.G CENTRE, RAICHUR

These three banks were amalgamated in 1920 and Imperial Bank of

In 1865 Allahabad Bank was established and first time exclusively by

To streamline the functioning and activities of commercial banks, the