Interview Material

UNIT :SBH

Updated upto 05.04.2015

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STUDY MATERIAL FOR INTERVIEW (Updated as on 05.04.2015) INTERVIEW CANDIDATES ARE ADVISED TO BE THOROUGH WITH THEIR RESPECTIVE BRANCH PROFILE AND CONCERNED DESK IN DETAIL INVARIABLY. -HARSHAVARDHAN MADABHUSHI GENERAL SECRETARY, ABOA ASSOCIATE BANKS OFFICERS ASSOCIATION UNIT: STATE BANK OF HYDERABAD SBH BUILDINGS, HEAD OFFICE, GUNFOUNDRY HYDERABAD-500 001 PHONE & FAX : 040- 23387537

STATE BANK OF HYDERABAD was constituted as HYDERABAD STATE BANK on 08.08.1941 under Hyderabad State Bank Act. 1941. First Branch - Gunfoundry - 05.04.1942. Became subsidiary of SBI on 01.01.1959 later renamed as Associate of SBI. ORGANISATION SET-UP TOP MANAGEMENT

Shri SANTANU MUKHARJEE Managing Director Shri Jasbir S Aneja Shri V Viswanathan Chief General Manager Chief General Manager (Commercial Banking) (Retail Banking) Shri V Sivasri GM (H R & General Administration) Shri I Siva Nainar GM (Corporate Banking) Shri B Ganesh Pai G M (CNW, Mumbai) Shri M P Tripathi G M (Mumbai Network) Shri Sateesh Kumar Jha G M (New Delhi Network) Smt Vasudha Bhat Kumar G M (Risk Mgmt and Credit Policy & Procedures) Shri Subbaraman K S G M (Treasury) & Chief Financial Officer Shri Shivaram B K G M (Bangalore Network) Shri Devendra Kumar G M (Hyderabad Network) Smt L T Ambujakshi G M (Inspection and Audit) Shri J Sitapathi Sarma G M (SLBC, Priority Sector, Rural Banking & F I) Shri G D Rozario G M (Information Technology & New Business) Shri G.Rajendra Kumar G M (Stressed Assets Management) Shri Korda Harihar Rao G M (Vijayawada Network) Smt M Yashoda Bai G M & Chief Vigilance Officer Shri Manikandan S GM (Warangal Network) Shri Anil K Malhotra GM (Per Banking, Govt Business, PR & Liaison) Zonal Offices: 14 01) Hyderabad 02) Secunderabad 03) Warangal 04) Visakhapatnam 05) Aurangabad 06) Gulbarga 07) Nizamabad 08) Tirupati 09) Mumbai 10) New Delhi 11) Nanded 12) Chennai 13) Vijayawada 14) Bangalore 15) Khammam 16) Metro Zone (Twin Cities) 17) Head Office

Regions headed by D.G.Ms: Branches headed by DGMs: Gun foundry, and IFB in Hyderabad, Nariman Point & Overseas Branch Mumbai, Commercial Branch and Scope Complex in New Delhi and Brabourne Road Kolkata. Forex Treasury: Mumbai Dealing Room: Mumbai Our New Vision and Mission: Vision To be the most preferred and trusted Bank Mission To achieve value based operational excellence providing customer delight resulting in consistent superior financial performance. Values Statements

Transparency and ethics in all dealings.

Respect and empathy for customers.

Competence and dedication in all that we do.

Nurturing a culture of learning and technological excellence.

Commitment to national and social objectives.

BANKS PERMORMANCE - 2014-15 Summary of Business Levels - Mar'15

Deposits (Rs.in cr) Segment wise

Type Levels Growth

during Mar15

Growth up to Bud FY15

Bud Shortfall Mar14 Mar'15 Mar'15 Mar'14

C&I 55284 53583 5223 -1701 -6084 2700 4401 PER 60879 72471 2277 11592 9442 14600 3008 SIB 2330 2804 280 474 225 300 0 AGR 2375 2336 41 -39 14 300 339 Agg. Dep 120868 131194 7821 10326 3597 17900* 7574 IB Dep 1156 829 -103 -327 -84 327 Total Dep 122024 132023 7718 9999 3513 17900 7901 NRI 3510 4556 105 1046 1068 1200 154

Retail / Bulk / High Cost - Deposit Type Levels Growth Growth up to Bud Bud Shortfall

Mar14 Mar'15 during Mar15

Mar'15 Mar'14 FY15

Retail Deposit

83149 96539 4923 13390 11047 33475 20085

Bulk Deposit

38875 35484 2795 -3391 -8688 -15575 -12184

High Cost Dep

29077 19495 -1009 -9582 -7723 -18877 -9295

Bulk Deposit % 32.16 26.88 58bps

-529bps

-797bps 17.00

High Cost Dep % 24.06 0.00

-173bps

-929bps

-700bps 7.36

Deposits Mix

Mix Levels Growth

during Mar15



CA 10142 12106 3531 1964 619 3072 1108 SB 26740 30999 1517 4259 3568 8497 4238 CASA 36882 43105 5048 6223 4187 11569 5346 CASA% 30.51 32.86 201bps 234bps 263bps 33.50 -64bps TDR 83986 88089 2773 4103 -589 20547 16444

Total Advances

Advances Levels Growth

during Mar'15



C&I 50011 52776 2973 2765 -767 2000 0 Of which Food 1889 1698 -78 -191 -76

SIB 13158 15056 1740 1898 2086 1817 0 of which

SSI 7932 9145 696 1213 239 900 0 SBF 5226 5911 1044 685 1847 917 232

AGR 13749 15216 346 1467 2286 3583 2116 PER 21968 25705 758 3737 3110 4400 663 Total 98886 108753 5817 9867 6715 11800* 1933

LOAN POLICY 2015 PRUDENTIAL EXPOSURE LIMITS: Maximum aggregate credit facilities (Fund based and non-fund based) not to

exceed Rs.15 Crores for individuals (including sole proprietary concerns) . Maximum (FB & NFB) Rs.50 Crores for non-corporate(Partnership, Trusts,

Associations, JHF, etc). Corporate (includes Societies also)

15% of Banks capital funds (Tier-I and Tier-II capital) for single borrower exposure. Additional 5% for infrastructure financing.

40% of Banks capital funds for group exposure. Additional 10% for infrastructure financing.

Exceptional Circumstances: Further 5% subject to such borrowers consenting to appropriate disclosure in the Notes on accounts in the Bank's Annual Report.

CAPITAL MARKET EXPOSURES not to exceed: The Bank's aggregate exposure to the capital markets shall not exceed 40% of

Banks net worth as on March 31 of the previous year. This ceiling of 40% would apply to both fund based and non-fund based exposure to capital market in all forms.

Within the overall ceiling of 40%, Bank's direct investment in shares, convertible bonds / debentures, units of equity-oriented mutual funds and all exposures to Venture Capital Funds (VCFs) [both registered and unregistered] shall not exceed 20% of Bank's net worth as on March 31 of the previous year.

Also within the overall ceiling of 40%, the Bank's exposure to stock brokers both fund based and non-fund based shall not exceed 10% of its net worth as on March 31 of the previous year.

SUBSTANTIAL EXPOSURES: Substantial exposure norms are in-house norms set within the prudential norms and are intended to help in monitoring credit concentration. These norms should not be deemed as a cap on further exposures and should not come in the way of booking bankable business. The substantial exposure norms should be indicated in the loan proposals and the Sanctioning Authority will have the necessary discretion to note the deviation in this regard based on the justification placed before it. Single Borrower: in excess of 7.5 % of banks capital funds (Tier I & II) Group Borrower: in excess of 15 % of banks capital funds (Tier I & II) Aggregate substantial exposure to individual borrowers should not exceed 300 %

of the Banks capital funds. (Tier I & II) Aggregate substantial exposures to single & group of borrowers should not

exceed 600% of Banks capital funds (Tier I&II)

UNSECURED EXPOSURES: These are restricted to 35% of Banks outstanding total exposure. (Where the realizable value of the security (Primary & Collateral-tangible), as assessed by the Bank/approved valuer/Reserve Bank Inspecting Official is ab-initio not more than 10% of the outstanding exposure. The exposure to sensitive commodities listed by RBI will be restricted to 5% of the Banks net-worth as at the end of the previous year.

Loans sanctioned to Corporate against the security of shares for meeting promoters contribution to the equity of new companies in anticipation of raising resources, should be treated as banks investment in shares which would come under the ceiling of 40 % of Banks net worth as on March 31st of the previous year prescribed for the banks total exposure including both fund based and non-fund based to capital market in all forms. INDUSTRY-WISE EXPOSURE LEVELS: The Bank shall generally endeavour to restrict fund based exposure to a particular industry to a maximum of 15% of the Bank's total fund and nonfund based exposure. Within this ceiling of a maximum of 15% of the Bank's total fund and non-fund based exposure, the actual exposure level fixed for any specific industry, is based on the near term outlook for that industry. These industry-specific caps are reviewed periodically by Integrated Risk Management Department taking into account significant changes observed in the industry profile. The Industry wise caps are as under: INDUSTRYWISE EXPOSURE CEILING Iron & Steel 12.50% Engineering 10.00% Textiles 10.00% Vegetable Oil & Vanaspathi 5.00% Fertilizers 5.00% Drug & Pharmaceuticals 10.00% Gems & Jewellery 5.00% Construction 12.00% Petroleum 5.00% Infrastructure : 20.00% Comprising of a.Power, b.Educational Institution; c. Hospitals/Health Care; d. Road (Toll Road, Bridge, Rail) e. Port, Airport, f. Power Transmission (utilities) (Should not exceed 10% in any of the above Sub-segments) NBFCs 10.00% Real Estate: 20.00% a. Housing Finance Intermediaries b. Commercial Real Estate (sub-limit 5%) Others - Industry not detailed above. 10.00% At the whole-Bank level, the total non-fund based exposures will not exceed twice the level of the total fund-based exposure. Statutory limit on shareholding in companies: In terms of Sec.19 (2) of the Banking Regulation Act, 1949, no banking company shall hold shares in any company, whether as pledgee, mortgagee or absolute owner, of an

amount exceeding 30% of the paid-up-share capital of that company or 30% of its (Bank's) own paid up share capital and reserves, whichever is less. BASEL I /II / III BASEL ACCORD 1988 The BASEL-I accord implemented by all the member countries by 1992, focused on Credit Risks & market risks. Identifying the asset category and recognizing Income measured the Credit Risks. Provisioning for non-performing assets is a hedging measure to absolve the losses arising on account of the credit risk factors. Similarly, assessing the Banks ability to absolve the market risk is measured through Capital Adequacy to Risk weighted Assets. RBI fixed the minimum regulatory capital adequacy ratio at 9%, very conservatively over and above the BASEL requirements of Capital Adequacy Ratio at 8%. The capital adequacy is to withstand the market Risks. The primary accord of BASEL-1 was mainly focusing on the credit Risk as it emphasized on the Capital adequacy Ratio and Income Recognition & Provisioning. The market Risk and the operational Risk were not under focus and it was presumed to the part of Banking business to check these risks on concurrent basis. However, due to certain important factors and events in the international financial market on account of Globalisation and liberalization amongst the member countries of the WTO, few of which are: Volatility of financial markets Evolution of Technology & Dependence of Banks on the Technology Growth of International Financial Transactions Significant degree of financial innovation Financial crisis in Asia & East Europe Risks for international active banks have become complex Fear that Capital requirements did not match a banks true risk profile,

The BASEL committee, in partial amendment to BASEL-I has advised its member-Central Banks of different countries to focus on the Market Risk. In pursuance to the BASEL Committee Recommendations the Reserve Bank of India implemented a Risk coverage tool for the Banks to hedge and check the market risks. The tool was simple and a broad brush common for all the Banks. The Regulatory Capital adequacy Ratio in increased from then existing 8 % to 9% (1% being the load for market Risk)

BASEL II Full Title of Basel II: International Convergence of Capital Measurement and

CapitalStandards: A Revised Framework released by BCBS on 26 June 2004. As per mandate of RBI all Scheduled Commercial Banks in India(except RRBs)

are required to implement the revised framework w.e.f 31/3/2008. European version of Basel II is called Capital Requirements Directive (CRD)

Regulatory & Economic Capital Requirement To bring a banks regulatory capital (Minimum CAR) in line with its economic

capital o (Prudential CAR)

Economic capital is the minimum capital required to ensure that the Bank remains solvent when faced with large unexpected losses.

The 3 Pillars of Basle II

Pillar 1: Specifies the minimum capital level that a bank needs to hold to cover its exposure to credit, market and operational risk

Pillar 2: Concerned with supervisory review that aims to ensure that a banks overall capital level is sufficient to cover all its risks

Pillar 3 : Details the guidelines for disclosure of information on a banks risk profile and capital to the outside world

The 3 pillars are mutually reinforcing BASEL-III Basel-III is a set of standards and practices developed for internationally active banks to ensure that they maintain adequate capital to sustain themselves during periods of economic crisis. Objectives: To strengthen the regulations regarding capital base and liquidity of Banks with

the goal of promoting a more re silent banking sector. To improve the Banking sectors ability to absorb shocks arising from financial

and economic stress. New capital requirements - Capital ratios and deductions: CoreTier-1: common equity The Basel 2 rules require that a bank hold 2% of Core Tier 1 capital to risk-weighted assets. Core Tier 1 consists of ordinary shares, retained earnings and profits.

The Basel 3 rules replace the concept with 'common equity'. This basically consists of common shares plus retained income. The rules require banks to hold 4.5% of common equity. Total Tier-1: The total Tier 1 requirement increases from 4% to 6% under Basel 3, which mean that other types of Tier 1 instrument, known as additional going concern capital, can account for up to 1.5% of Tier 1 capital. Total Capital: The total minimum capital requirement remains at 8%, subject to a new capital buffer. However, 6% of capital must be Tier 1, which means that Tier 2 can account for not more than 2% of capital. Tier 3, which is used solely for market risk purposes, will be removed completely. Liquidity rules: The new liquidity coverage ratio and net stable funding ratio will be introduced in accordance with the timing detailed below. Common equity, Tier 1, total capital and national implementation: The new capital ratios will be phased in. National implementation must begin on January 1 2013, by which date banks should have 3.5% common equity, 4.5% Tier 1 capital and 8% total capital. In 2014 this increases to 4% common equity and 5.5% Tier 1 capital. The full ratios (ie, 4.5% common equity and 6% Tier 1 capital) apply from January 2015. Leverage ratio: The 3% ratio requirement will run parallel from January 1 2013 to 2017. The committee will track the ratio, its component factors and impact over this period and will require bank-level disclosure of the ratio and its factors from January 1 2015. Based on the results of the parallel run, final adjustments to the ratio will made in the first half of 2017 and it will be fully effective from 1st January, 2018. Liquidity ratios: The liquidity coverage ratio will be introduced on January 1 2015. The net stable funding ratio will apply as a minimum standard from 1st January, 2018. On paper, Basel 3 will triple the quantum of capital banks will need to maintain. But whether it will risk-proof the banking sector is doubtful. To be sure, Basel III is an improvement over Basel II, just as Basel II was an improvement over Basel Is rough and ready thumb-rule of 8% capital adequacy. But the problem, as the crisis has shown us, was not with the rules per se. The cutthroat competition among banks means it will always be profitable to game the system. In such a scenario, the best of rules is of no use unless such rule-based regulation is supplemented by proactive and competent supervision. Capital required at every branch, for its fund and non-fund exposures, is calculated through the Centralised Capital Calculator(C-cube) software, provided by the IRM department. The report is known as CAR(Capital Adequacy Ratio) Return under Basel II

& Basel III, which is also known as AR 6. The report for every month is generated on completion of C-cube processing by the branches and is available under Reports in Ccube link. The backup register for the report also available as sub-bucket wise report in the reports menu. The system computes and generates the Risk Weighted Asset value (RWA) and the capital required for the same, based on the data available in CBS. This includes master data created by the branches, while opening the loan accounts and variable data such as Drawing Power, Security details & value External ratings, Govt (Soverign) guarantees (CGTMSE/ECGC) available etc. The same is consolidated at Head Office along with Market & Operational Risk and disclosed quarterly, through Banks website and press reports after Central Audit. Hence it is important for branches to ensure that the data in CBS is fully accurate & will there by yield correct capital calculation and avoiding capital leakage for the Bank. .How is the capital calculated?

It is simply 9% of the Risk weighted Assets (11.50% from Mar 2019). How are the risk weighted assets (RWAS) calculated?

RWAs=Net exposures (after Haircut)(column 9 in CAR report) * RW% What is net exposure?

Net exposure for Standard asset = Suppose loan outstanding Rs.55000 backed by TDR of Rs.10000. Net exposure is Rs.45000. Net exposure for NPA asset = Suppose loan outstanding Rs.55000 and Provisions held is Rs.10000. Net exposure is Rs.45000. What is Risk Weight?

The risk inbuilt in any lending is known as the risk weight and is denominated by % (of the exposure). For example a risk in personal loan is 125%, Gold loan under Per-125 % & under AGR-75% etc. What is Haircut?

The possible decline in value of a Basel security that may occur due to market conditions. For example Gold, Debt securities etc.

What is Basel security?

These are certain identified that help to reduce the RWA of the exposure to the extent of either the full value of the security (i.e without haircut) or the value computed, applying some prescribed haircur. These securities are Liquid in nature and enforceable with ease. These include Banks TDRs, Paper based securities like NSCs, KVPs, LIC Policies assigned to the Bank, Gold ornaments and Debt Securities. Haircut is not applicable to TDRs, NSCs, KVPs & LIC Policies. The haircut for gold is 15%.The haircuts on Govt securities & debt securities depend on the Issue rating for the security and the residual maturity period. As Govt securities are not currently rated in India, the haircut is dependent on residual maturity period Capital Adequacy Report contains two parts A & B Part A deals with Fund based loans & advances and Part B deals with contingent liabilities (non-fund based) Fund based loans and advances : It is generally known that Banks lending is divided into PER, AGR, MSME & C & I. But for Capital Adequacy calculation segments have no relevance. Loans and advances are divided into various categories as per the inbuilt risk and each category is assigned with a field known as B U C K E T. RBI & SBH Approved External Credit Rating Agencies: 1. CRISIL 4. SMERA 2. ICRA 5. INDIA RATINGS (FITCH) 3. CARE 6. BRICKWORK Branches should not consider the ratings by any other ECRAs, other than the approved agencies. . PART B: Contingent Liabilities : As the exposure itself is contingent, CCF(credit conversion factor) is applied before the Risk weight% is applied, What is Credit Conversion Factor (CCF)?

It is the probability percentage of non fund exposure likely to become funded exposures in a large portfolio of non-fund exposures. The CCFs vary from facility to facility and are prescribed by RBI in their Capital Adequacy guidelines.

PRIORITY SECTOR ADVANCES BENCHMARKS FOR PRIORITY SECTOR: Total priority sector advances: 40% of ANBC or credit equivalent amount of off-

balance sheet exposure, whichever is higher. Agricultural Advances:18% of ANBC(13.5% Direct + 4.5%indirect advances) Micro enterprises within Small enterprises sector:

a) 40% of total advances to micro & small enterprises sector should go to micro b) (Manufacturing) enterprises having investment in plant and machinery up to

Rs. 10 lacs and micro (Service) enterprises having investment in equipment up to Rs. 4 lacs

c) 20% of total advances to small enterprises sector should go to micro (manufacturing) enterprises with investment in plant and machinery above Rs.10 lacs and up to Rs. 25 lacs. and micro (Service) enterprises with investment in equipment above Rs. 4 lacs and up to Rs. 10 lacs

d) Advances to weaker sections: 10 % of ANBC e) DRI: 1% of total advances outstanding as at the end of the previous year. it

should be ensured that not less than 40% of the total advances granted under DRI scheme go to SC/ST. At least two third of DRI advances should be granted through rural and semi urban branches.

f) Export Credit: It is applicable to foreign banks only 12% of ANBC. Lending to Minorities:15% of Projected Priority Sector lending as on previous 31st

March.

WOMEN BENEFICIARIES: 5% of ANBC. -- Direct credit extended to women. -- Credit to women under different schemes. -- Credit to firms, companies etc., where women have not less than 51% share in

the business. A. AGRICULTURE The coverage under agriculture should not be less than 18%. Of this a maximum of 4.50% may be covered under Indirect advances and the balance 13.50% should be covered under Direct agriculture. DIRECT ADVANCES: 1. Loans sanctioned by the banks directly to the agriculturists for the purposes of crop production, allied activities and other investment credit (pre-harvest and post-harvest) to individual farmers, SHGs or Joint Liability Groups of individual farmers without limit and to others such as Corporates, partnership firms and institutions up to aggregate amount of Rs. 2 crore are classified under direct agricultural finance. 2. Loans to farmers up to Rs.50 lakh against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months.

INDIRECT ADVANCES: Any loan sanctioned to an intermediary agency for on lending or providing services to agriculture sector is classified under indirect agricultural finance. The examples are financing of: 1. Dealers in agro-inputs (Fertilisers & pesticides). Loans up to Rs. 5 Crores. 2. In case of loans sanctioned to Corporates, partnership and institutions more than Rs.2 crore per borrower the entire loan has to be treated as Indirect finance to agriculture. 3. PACS/FSS/LAMPS 4. Loans to food and agro-based processing units with investments in plant and machinery up to Rs. 10 crores, undertaken by those other than individuals, SHGs, and cooperatives in rural areas. 5. Investment made as on March 31st 2007, in bonds floated by NABARD for the purpose of financing of agriculture or allied activities. 6. Construction and operation of storage facilities 7. Agro custom service 8. Loans up to Rs.5.00 cr. to Co-operative marketing societies of farmers for disposing of the produce of members. 9. Dealers in irrigation systems located in rural & semi urban areas, dealing with these items exclusively and with limits up to Rs.30.00 lac 10. Lending to NBFCs for on-lending to agriculturists. 11. Deposits held in Rural Infra structure Development fund (RIDF) as on date 12. Finance for setting up of Agri clinics and Agri business Centres. 13. Finance for hire purchase schemes for distribution of agricultural machinery and implements. 14. Loans to Arthias (commission agents in rural/semi-urban areas for extending credit to farmers/SHGs/JLGs 15. Credit outstanding under loans for general purposes under General Credit Cards (GCC) and Overdrafts up to Rs.25000/- per account granted against No Frills Accounts, in rural and semi urban areas 16. Loans already sanctioned and outstanding as on date to State Electricity Boards and Power Distribution Corporations/Companies. 17. Loans to National Co-operative Development Corporation(NCDC) 18. Loans granted to NGO/MFI/ for on-lending to individual farmers or SHGs/JLGs Overdraft in PMJDY accounts It has been decided that overdrafts extended by banks upto Rs.5,000/- in Pradhan Mantri Jan-Dhan Yojana (PMJDY) accounts will be eligible for classification under priority sector advances (others category) as also weaker sections, provided the borrowers household annual income does not exceed Rs. 60,000/- for rural areas and Rs.1,20,000/- for non-rural areas. Lending to persons with disabilities will be eligible for classification under weaker sections category.

Micro, Small & Medium Enterprises Development (MSMED) Act, 2006 Definition of Micro, Small and Medium Enterprises (a) Manufacturing Enterprises i.e. Enterprises engaged in the manufacture or production, processing or preservation of goods as specified below: (i) A micro enterprise is an enterprise where investment in plant and machinery does not exceed Rs. 25 lakh; (ii) A small enterprise is an enterprise where the investment in plant and machinery is more than Rs. 25 lakh but does not exceed Rs. 5 crore; and (iii) A medium enterprise is an enterprise where the investment in plant and machinery is more than Rs.5 crore but does not exceed Rs.10 crore. (b) Service Enterprises i.e. Enterprises engaged in providing or rendering of services and whose investment in equipment (original cost excluding land and building and furniture, fittings and other items not directly related to the service rendered or as may be notified under the MSMED Act, 2006) are specified below. (i) A micro enterprise is an enterprise where the investment in equipment does not exceed Rs. 10 lakh; (ii) A small enterprise is an enterprise where the investment in equipment is more than Rs.10 lakh but does not exceed Rs. 2 crore; and (iii) A medium enterprise is an enterprise where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore. Particulars Activity Micro

Enterprise Small Enterprise

Medium Enterprise

Manufacturing Enterprises

Enterprises engaged in the manufacture or production, processing or preservation of goods where

the original investment in Plant & Machinery up to Rs.25.00 lacs (SSI Segment)

the original investment in Plant & Machinery above RS.25.00 lacs & up to Rs.500.00 lacs (SSI Segment)

the original investment in Plant & Machinery above RS.25.00 lacs & up to Rs.500.00 lacs (C&I Segment)

Service Enterprises

Enterprises engaged in providing or rendering of services and whose

the original investment in equipment up to Rs.10.00 lacs (SBF Segment)

the original investment in equipment above Rs.10.00 lacs & up to Rs.200.00 lacs (SBF Segment)

the original investment in equipment above Rs.20.00 lacs & up to Rs.500.00 lacs (C&I Segment)

C. SMALL ENTERPRISES (Servicing) SECTOR: 1. Small (service) Service: Enterprises engaged in providing/rendering of services and whose investment in equipment does not exceed Rs. two crores. 2. Micro (Service) Enterprises: Enterprises engaged in providing/rendering of services and whose investment in equipment does not exceed Rs. 10 lacs. 3. Limits of Bank loans up to Rs. 5 Crores per borrower/unit to Micro ansd Small Service Enterprises in terms of investment criteria in equipment under MSMED Act, 2006. 4. The small and micro service enterprises shall include small road & water transport operators, small business, professional & self-employeed persons, and all other serviced enterprises. 5. Khadi and Village industries sector(KVI) All advances granted to units in the KVI sector, irrespective of their size of operations, location and amount of original investment in plant and machinery, such advances will be eligible for consideration under the sub-target (60%) of small enterprises segment within the priority sector. 6. Indirect Finance under small enterprises (Mfg. & Services): a) Persons involved or advance to co-operatives of producers in the decentralised sector artisans village and cottage industries. b) Loans to co-operatives of producers in the decentralized Sector viz. artisans village & cottage industries. c) Loans granted to MFIs for on-lending to small and micro enterprises. D. Retail Trade: a) Advances granted to retail traders dealing in essential commodities (fair price shops) consumer co-operative stores. and b) Advances granted to private retail traders with credit limits not exceeding Rs. 20 lacs E. Micro credit: Loans not exceeding Rs. 50,000/ per borrower provided by banks either directly or indirectly through a SHG/JLG mechanism or to NBFC/MFI for on-lending up to Rs.50,000/ per borrower. F. Loans to poor indebted to informal sector Loans to distressed persons (other than farmer) to prepay their debt to non-institutional lenders, against appropriate collateral or group security G.HOUSING LOANS a) Housing loans up to Rs.25 lacs in metropolitan centres and Rs.15 lakh in other centres to individuals for [purchase/construction of a dwelling unit per family, excluding loans granted by banks for its employees. b) Loans up to Rs.2,00,000/- in rural and semi-urban and Rs.5,00,000/ in urban and metro areas for repair of houses to individuals, c) Assistance given to any governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to a ceiling of Rs. 10 lacs of loan amount per dwelling unit. d) Assistance given to a Non-Govt. agency approved by the NHB for the purpose of refinance for construction /reconstruction of dwelling units or for slum clearance and rehabilitation of slum dwellers, subject to a ceiling of loan component of Rs. 10 lacs per dwelling unit.

H. EDUCATION LOANS: Education loans to individuals (not institutions) for educational purposes up to Rs. 10 lacs for studies in India and Rs. 20 lacs for studies abroad. Loans granted by banks to NBFCs for onlending to individuals for educational purposes up to Rs. 10 lacs for studies in India and Rs.20 lacs for studies abroad. I.ADVANCES TO WEAKER SECTIONS: In order to ensure that more underprivileged sections in the priority sector are given proper attention in the matter of allocation of credit it should be endured that the advances to the weaker sections reach a level of 25% of priority sector advances or 10% of the NBC. Weaker sections include: a) Small and marginal farmers with land holdings of 5 acres and less and b) Landless borrowers, tenant farmers and share croppers. c) Artisans,village and cottage Industries where individual credit limits do not exceed Rs.50,000/- d) Beneficiaries of SGSY, NRLM (National Rural Livelihood Mission) e) Loans to SC/ST f) Loans under DRI, SLRS & SHGs g) Loans to distressed poor to prepay their debt to informal sector, against appropriate collateral or group security; h) Loans to Minorities under (a) to (g) above i) Loans to individual woman beneficiaries up to RS.50000/- per borrower. J. State Sponsored organisation for Scheduled Castes/Scheduled Tribes: Advances sanctioned to State Sponsored organisation for Sc/ST for the specific purpose of purchase and supply of inputs to and/or the marketing of the outputs of the beneficiaries of these organisations. K. Export credit: This category will form part of priority sector for foreign banks only. Export credit extended by for Banks with less than 20 Branches will be reckoned for Priority Sector target achievement. L. Others Loans not exceeding Rs. 50,000/- per borrower providre to individuals or their SHG/JLG provided the household income of he borrower doesnot exceed Rs. 60,000 in rural areas and Rs. 1,20,000 in non-rural areas. Adjusted Net Bank Credit (ANBC) denotes Net Bank Credit (NBC) plus Investments made by banks in non-SLR bonds held in HTM (Held to maturity) category. Investments made by banks in the Recapitalization bonds floated by Govt. of India will not be taken into account for the purpose of calculation of ANBC. Outstanding FCNR (B) and NRNR deposit balances will no longer be deducted for computation of ANBC for priority sector lending purposes. Inter-bank exposures will not be taken into account for the purpose. Existing investments, as on the date of circular, made by banks in non-SLR bonds held in HTM category will not be taken into account for calculation of ANBC, up to March 31, 2010.However, fresh investments by banks in non-SLR bonds held in HTM category will be taken into account for the purpose. Deposits placed by banks with NABARD/SIDBI,

as the case may be, in lieu of non-achievement of priority sector lending targets/sub-targets will not be treated as investment in non-SLR bonds held in HTM category. DIFFERENTIAL RATE OF INTEREST (DRI/DIR) ADVANCES To assist poorest of the poor and to bring them above the poverty line DIR scheme was launched in the year 1972. DRI is a scheme classified as priority sector under which banks sanction loans to selected low-income group of borrowers among weaker sections of the community for productive endeavors at 4% p.a. rate of interest. The scheme is operative throughout the country and 1% of total advances outstanding as at the end of the previous year should be of DIR loans. It should be ensured that not less than 40% of the total advances granted under DRI scheme go to SC/ST. At least two third of DRI advances should be granted through rural and semi-urban branches. To be eligible, the annual income of the family should not exceed Rs. 24,000/- in urban and semi-urban areas and Rs. 18,000/- in rural areas. - Rs.15,000/- as TL or WC or both - Rs.20,000/- for Housing and also for Physically Handicapped (Rs.5,000/- for purchase of artificial limbs in addition to Rs.15,000) Repayment period is fixed depending upon the income generated to the extent of maximum 5 years including gestation period.

NON-PERFORMING ASSETs Prudential norms relating to income recognition, asset classification and provisioning were recommended by Narasimhan Committee (1991)

NON-PERFORMING ASSET Interest/installment not recovered for a period exceeding 90 days A/c out of order for more than 90 days in case of CC/OD Out of order If the outstandings remain continuously in excess of sanctioned

An NPA is one, which ceases to generate income.

limit/DP or where outstandings are less than sanctioned limit/DP but there are

no credits continuously for 90 days as on the date of Balance Sheet or credits are

not enough to cover the interest debited during the same period. Where transactions are allowed in CC a/c continuously for 90 days based on

DP calculated from stock statements older than three months;

If regular/ad-hoc credit limits are not reviewed/renewed within 180 days from the due date;

Any amount to be received remains overdue for more than 90 days for other a/cs ACC: (a) Long duration crops (crop season more than 1 year) _ Non-payment of

installment of principal or interest for one crop season; (b) Short Duration Crops two crop seasons. A short Duration crop is one, which is not a long duration crop. The crop season for each crop, which means the period up to harvesting of

the crops raised, would be as determined by the SLBC in each state ATLs: Depending upon the crops raised by the agriculturists above norms to be applied

for ATLs also. In respect of agricultural loans, other than those specified(activities

which are not related to cultivation like poultry, dairy, etc) and term loans given to Non- agriculturists, NPA norm is 90 days delinquency. For others it is as applicable for ACC (i.e., depending on the crop raised by the borrower).

Substandard - Which is classified as NPA for a period not exceeding 12 months? Doubtful - Asset that is classified as NPA for a period exceeding 12 months;

or if the value of security is eroded by more than 50%

Loss - Classified by the Internal/external auditors, or value of security is less than 10% of the outstanding in the account;.

Provisioning on NPAs:

1. Sub-standard-Secured Loans 15%

-Unsecured Loans 25% (If value of tangible security is less than 10% of O/s)

2. Doubtful - Unsecured Portion 100%- Secured Portion- Upto 1 year 25%

- 1-3 years 40% - Above 3 years 100% (with effect from 1.4.2006)

3. Loss Assets 100%

STRESSED ASSETS. The following assets are called Stressed Assets:

All Sub-standard Assets; and All Special Mention Accounts (SMA) Focus of review of SA will be on prevention of slippage of SMAs and up

gradation of Sub-standard accounts by restructuring viable ones. Special Mention Accounts (SMA)

Accounts where interest / inst. not serviced for 7 to 29 days ( Category I) Accounts where interest / inst. not serviced for 30 to 59 days (Category II) Accounts where interest / inst. not serviced for 60 to 89 days (Category III)

Standard Assets Provisioning:

Direct Agr & SME sector : 0.25%

Commercial Real Estate (CRE)

: 1.00%

CRE Residential Housing : 1.75%Other advances : 0.40% Corporate Debt Restructuring (CDR)

It is a non-statutory and voluntary mechanism based on Debtor/Creditor and inter-

Creditor Agreements; To ensure timely and transparent mechanism for restructuring of the corporate debts

of viable entities facing problems outside the purview of BIFR, DRT and other legal proceedings for the benefit of all concerned;

It covers only multiple banking account/syndication/consortium accounts with outstanding exposure of Rs.10 crores and above by banks and Financial Institutions both fund based and non-fund based exposure.

Applicable only to Standard, Substandard & selectively doubtful category; Willful default cases should not be considered;

Reference to CDR can be made by the secured creditors who have minimum 20% in lending or by the concerned corporate supported by a bank or FI with 20% stake in lending;

CDR Standing Forum will be the representative general body of all the banks and Fis participating in the CDR system. It is a self empowered body which will lay down policies and guidelines and monitor the progress.

The approach to restructuring under CDR mechanism is significantly different from the conventional approach of concessionary funding of existing dues. In addition to reliefs and concessions, such an approach would also involve the following:

Arriving at the quantum of outstanding debt that can be retained for

satisfactory Debt Service coverage and converting the balance amount into equity or equity linked instruments.

Investment in equity as an alternative to sacrifices(waiver, write off etc) Induction of strategic investor(s)/co-promoter(s) Broad basing of Board, appointment of independent chairman,

appointment of professional CEO etc. Appointment of whole time Finance Director Setting up of Asset Sale Committee Appointment of special Concurrent Auditor Change of Statutory Auditors Appointment of lenders Engineer / Monitoring Agency Right to accelerate repayment / revoke package Right of recompense Co-ordination issues between lenders sharing of security, escrow

account, etc., THE SECURITISATION AND RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST ACT 2002

FOR INVOCATION OF MORTGAGE UNDER SARFAESI PROCEDURE;

.Issuing Demand Notice:

The Demand Notice shall be served by delivering or transmitting at the place

where the borrower or his agent, empowered to accept the notice, actually and voluntarily resides or carries on business or personally works for gain by Registered post with acknowledgement due/speed post/courier/other means like fax or e-mail;

If the service cannot be made as above, the service shall be effected by affixing

a copy of the demand notice on the outer door or some other conspicuous part of the house or building in which the borrower or his agent ordinarily resides or carries on business or personally works for gain and also by publishing the contents of the Demand Notice in two leading newspapers, one in vernacular language, having sufficient circulation in that locality;

Where the borrower is a body corporate, the demand notice shall be served on

the Registered Office or any of the branches of such body corporate;

Any other notice in writing to be served on the borrower or his agent by authorised officer, shall be served in the same manner as provided in this rule;.

Where there are more than one borrower, the demand notice shall be served on each borrower

After issue of Demand Notice:

If the amount mentioned in the demand notice is not paid within the time specified therein, the authorised Officer shall proceed to realise the amount by any one or more of the following measures:

In case of movable assets, the authorised officer shall take possession of such

property in the presence of two witnesses after a Panchanama drawn and signed by the witnesses as per prescribed format.

An inventory of the property taken possession should be prepared in the

prescribed proforma and a copy to be delivered to the borrower.

The authorised officer shall keep the property taken possession under his own

custody or in the custody of any person authorised by him and take care of the property as an owner of ordinary prudence would.

16.4 If such property is subject to speedy or natural decay or the expense of

keeping such property is likely to exceed its value, the authorised officer may sell it at once.

The authorised officer shall take steps for preservations and protection of secured

and insure them till they are sold or otherwise disposed of. In case any secured asset is

A debt not secured by negotiable instrument; A share in a body corporate; Other movable property not in the possession of the borrower

except the property deposited in or in the custody of any Court or any like authority;

The authorised officer shall obtain possession or recover the debt by service

of notice as under: (a) In the case of a debt, prohibiting the borrower from recovering the debt

or any interest thereon and the debtor from making payment thereof and directing the debtor to make such payment to the authorised officer;

(b) In the case of shares in a body corporate, directing the borrower to transfer the same to the secured creditor and also the body corporate from not transferring such shares in favour of any person other than the secured creditor. A copy of the notice so sent may be endorsed to the concerned body corporates Registrar to the issue or share transfer agents, if any;

(c) In the case of other movable property (except above), calling upon the borrowers and the person in possession to hand over the same to the authorised officer;

(d) The authorised officer shall take movable secured assets other than those covered above by taking possession of the documents evidencing title to such secured assets.

Valuation of movable assets: After taking possession and before sale, the authorised officer shall obtain the estimated value of the movable secured assets and thereafter fix the reserve price of the assets to be sold.

Sale of movable secured assets: The authorised officer may sell the movable secured assets taken possession in

one or more lots by adopting any of the following methods to secure maximum sale price for the assets to be sold;

a) Obtaining quotations from parties dealing in the secured assets or otherwise interested in buying such assets; or

b) Inviting tenders from the public; or c Hold ing public auction; or d) By private treaty;

The authorised officer shall serve to the borrower a notice of thirty days for sale

of the movable secured assets; If the sale of such secured assets is being effected either by inviting tenders

from the public or by holding public auction, the secured creditor shall cause a public notice in two leading newspapers, one in vernacular language, having sufficient circulation in that locality by setting out the terms of sale, which may include

a) Details about the borrower and the secured creditor; b) Description of movable secured assets to be sold with identification marks or

numbers, if any, on them; c) Reserve Price, if any; d) Time and manner of payment; e) Time and place of public auction or the time after which sale by any other mode

shall be completed; f) Depositing earnest money as may be stipulated by the secured creditor; g) Any other thing which the authorised officer considers it material for a purchaser

to know in order to judge the nature and value of movable secured asset;

Sale by any methods other than public auction or public tender, shall be on such terms as may be settled between the parties in writing.

Issue of Certificate of sale: Where movable secured assets are sold, sale price of each lot shall be paid as per the terms of the public notice or on the terms as may be settled between the parties, as the case may be and in the event of default of payment, the movable secured assets shall be liable to be ordered for sale again; On payment of sale price, the authorised officer shall issue a certificate of sale in the prescribed form specifying the movable secured assets sold, price paid and the name of the purchaser and thereafter the sale shall become absolute. The Certificate of Sale so issued shall be prima facie evidence of title of the purchaser.

Immovable secured assets:

The authorised officer shall take possession of immovable secured assets by

delivering a possession notice prepared as per prescribed form and deliver to the borrower;

Affix a copy of the possession notice on the outer door or at such conspicuous place of the property;

The possession notice shall also be published in two leading newspapers, one in

vernacular language having sufficient circulation in that locality, by the authorized officer;

In the event of possession of immovable property is actually taken by the

authorised officer, such property shall be kept in his own custody or in the custody of any person authorised by him. The authorised officer shall take steps for preservation and protection of secured assets and insure them, if necessary, till they are sold or otherwise disposed of;

The authorised officer shall obtain valuation of the property from an approved

valuer and sell the whole or any part of such immovable property by any of the following methods

Obtaining quotations from parties dealing in the secured assets or otherwise

interested in buying such assets; or Inviting tenders from the public; or c) Holding public auction; or By private treaty;

The authorised officer shall serve to the borrower a notice of 30 days for sale of

the immovable secured assets; If the sale of such secured assets is being effected either by inviting tenders from

the public or by holding public auction, the secured creditor shall cause a public notice in two leading newspapers, one in vernacular language, having sufficient circulation in that locality by setting out the terms of sale, which may include

The secured debt for recovery of which the property is to be sold

Description of immovable secured assets to be sold including the details of the encumbrances known to the secured creditor

Reserve Price, below which the property may not be sold

Time and place of public auction or the time after which sale by any other mode shall be completed

Depositing earnest money as may be stipulated by the secured creditor

Any other thing which the authorised officer considers it material for a purchaser to know in order to judge the nature and value of the property;

Every notice of sale shall be affixed on a conspicuous part of the immovable

property and may, if the authorised officer deems it fit, put on the web site of the secured creditor on the Internet;

Sale by any method other than public auction or public tender, shall be on such

terms as may be settled between the parties in writing; No sale of immovable property under these rules shall take place before the

expiry of thirty days from the date on which the public notice of sale is published in newspapers or notice of sale has been served to the borrower;

The sale shall be confirmed in favour of the purchaser who has offered the

highest sale price in his bid or tender or quotation or offer to the authorised; No sale shall be confirmed, if the amount offered is less than the reserve price;

If the authorised officer fails to obtain a price higher than the reserve price, he

may, with the consent of the borrower effect the sale at such other price; On every sale of immovable property, the purchaser shall immediately pay a

deposit of 25% of the amount of sale price and in case of default the property will be sold again.

The balance amount shall be payable on or before the 15th day of confirmation

of sale of the immovable property or such extended period as may be agreed

upon in writing between the parties.

In default of payment within the period mentioned, the deposit shall be forfeited

and the property shall be resold; On confirmation of sale by the secured creditor and if the terms of payment have

been complied with, the authorised officer exercising the power of sale shall issue a certificate of sale of the immovable property in favour of the purchaser in the prescribed form.

1.1.1 Representation by the Borrower

(3A) If, on receipt of the notice under sub-section (2), the borrower makes any representation or raises any objection, the secured creditor shall consider such representation or objection and if the secured creditor comes to the conclusion that such representation or objection is not acceptable or tenable, he shall communicate within fifteen days of such representation or objection the reasons for non-acceptance of the representation or objection to the borrower.

2. The reason so communicated or the likely action of the secured creditor at the stage of communication of reason shall not confer any right upon the borrower to prefer an application to the DRT under Section 17 or the Court of the District Judge under Section 17A.

Debts Recovery Tribunals (DRT)

The Recovery of Debts Due to Banks and Financial Institutions Act, 1993 was passed in the year 1993. The DRTs are established to avoid the difficulties faced by the Banks in recovering the amounts through regular Civil Courts. The Act applies to dues of not less than Rs.10.00 lakhs. The Act applies to whole of India except Jammu & Kashmir.

The DRTs follow the summary procedure and only guided by the principles of natural justice Appellate Tribunal

Any person aggrieved by an order made by the DRT may prefer an appeal to an Appellate Tribunal having jurisdiction in the matter. Such appeals should be preferred within the period of 45 days from the date of which the copy of the order is made and received by him. If the appeal is preferred by the defendant (borrower), he has to deposit 75% of the amount of debt due from him as determined by the DRT. However, the Appellate Tribunal may reduce or waiver the amount to be deposited.

IMPORTANT TOPICS

REPO / REVERSE REPO: Repo and Reverse Repo are Liquidity Adjustment Facility (LAF) tools used by Reserve Bank. Repo is an instrument meant for injecting the funds required and Reverse Repo for absorbing the excess liquidity of the Banks.

REPO RATE: This is the rate at which RBI buys securities from the Banks and this is lending by RBI to inject liquidity in the system under LAF. The current Repo rate is 7.50% w.e.f. 04th March 2015.

REVERSE REPO RATE: This is the rate at which Banks lend their surplus funds to RBI. In other words it is borrowing by RBI by sale of securities. RBI absorbs liquidity in the system through Reverse Repo technique under LAF, The current Reverse Repo rate is 6.50% w.e.f. 04th March 2015.

Marginal Standing Facility (MSF): The current rate is 8.50% w.e.f. from 04th March 2015. In order to provide greater liquidity cushion, RBI has will decid the borrowing limit of SCBs under the MSF from 1% to 2% of their NDTL outstanding.

CRR: Cash Reserve Ratio is the amount of funds that the banks have to keep with the RBI. If the central bank decides to increase the CRR, the available amount with the banks comes down. The RBI uses the CRR to drain out excessive money from the system. Scheduled banks are required to maintain with the RBI an average cash balance, the amount of which shall not be less than 4% of the total of the Net Demand and Time Liabilities (NDTL), on a fortnightly basis. The RBI has keep the CRR at 4% in the recent monetary policy review SLR: Every bank is required to maintain at the close of business every day, a minimum proportion of their Net Demand and Time Liabilities as liquid assets in the form of cash, gold and un-encumbered approved securities. The ratio of liquid assets to demand and time liabilities is known as Statutory Liquidity Ratio (SLR). RBI is empowered to increase this ratio up to 40%. An increase in SLR also restrict the banks leverage position to pump more money into the economy. SLR Ratio reduced from 22.0 0% to 21.50% of their NDTL w.e.f the fortnight beginning 07th February 2015. BANK RATE: Bank Rate is the rate at which central bank of the country (in India it is RBI) allows finance to commercial banks. Bank Rate is a tool, which central bank uses for short-term purposes. The now Bank Rate was set at 8.50% w.e.f 04th March 2015.

IFRS: All scheduled commercial banks will convert their opening balance sheet as at April 1, 2013 in compliance with the IFRS converged IASs.

CREDIT TO NRE ACCOUNTS: AD Category-I banks have been advised to allow repayment of loans taken by individual residents in India from their close relatives outside India, by credit to the non-resident (external) rupee (NRE) / foreign currency non-resident (bank) [FCNR(B)] account of the lender concerned subject to the conditions that -

The loan to the resident individual was extended by way of inward remittance in forex through normal banking channels or by debit to the NRE/ FCNR(B) account of the lender; and

The lender is eligible to open NRE/FCNR(B) account within the meaning of the Foreign Exchange Management (Deposit) Regulations, 2000. Such credit would be treated as an eligible credit to the NRE / FCNR(B) a/c.

LIBERALISED REMITTANCE SCHEME (LRS)

LRS increased to $2,50,000: Encouraged by foreign exchange reserves touching record levels, the RBI doubled the annual overseas investment ceiling for individuals to USD 2,50,000. The Liberalized Remittance Scheme (LRS) allows residents to acquire and hold shares, debt instruments or other assets outside India without prior approval of the RBI. The LRS for Resident Individuals is available to all resident individuals including minors. In case the remitter is a minor, the LRS declaration form should be countersigned by the minors natural guardian.

Remittances under the facility can be consolidated in respect of family members subject to individual family members complying with the terms & conditions of scheme.

Remittances under the scheme can be used for purchasing objects of art subject to the provisions of other applicable laws, such as, the extant Foreign Trade Policy.

REGULATORY CAPITAL INSTRUMENTS: Earlier Banks were permitted to issue capital instruments with a step-up option as under:

Innovative Perpetual Debt Instruments (IPDI) and Upper Tier- 2 debt capital instruments;

Perpetual Cumulative Preference Shares (PCPS), Redeemable Non-Cumulative Preference Shares (RNCPS) and Redeemable Cumulative Preference Shares as part of Upper Tier- 2 Preference shares and;

Subordinated debt as Tier - 2 capital

The Basel Committee on Banking Supervision (BCBS) and the Financial Stability Board (FSB) undertook an extensive review of the regulatory framework in the wake of the sub-prime crisis. It advised that banks should not issue Tier 1 or Tier 2 capital instruments with step-up option so that these instruments continue to remain eligible for inclusion in the new definition of regulatory capital. However, such instruments can be issued with only call option as per existing rules.

COUNTERFEIT BANKNOTES: RBI has decided to revise the procedure to be followed on detection of counterfeit banknotes as follows:

For cases of detection of counterfeit notes up to 4 pieces, in a single transaction, a consolidated report as per the format prescribed should be sent to the police authorities at the end of the month.

For cases of detection of counterfeit notes of 5 or more pieces, in a single transaction, FIRs should be lodged with the Nodal Police Station / Police Authorities as per jurisdiction.

PPF SCHEME AMENDMENTS

1) Maximum amount of deposit in a financial year in a PPF account in a financial year has been increased from Rs.1,00,000 to Rs.1,50,000.

2) Interest Rate on Loan: Will be 2% p.a. more than the rate being paid.

3) Interest Rate on Deposits: The subscriptions made to the fund on or after the 1.12.2011 and balances at the credit of the subscriber shall bear interest @ of 8.6% p.a. This has been increased to 8.8% w.e.f 1-4-2012.

Further, Govt. has decided that interest at applicable rates would be paid on those PPF (HUF) a/c, which had attained the maturity after May 13, 2005 but closed by the subscribers before Dec 07, 2010, subject to the conditions that the accounts had not been extended thereafter and the deposits were retained in such accounts without further subscriptions.

NBFCs NOT TO BE PARTNERS IN FIRMS: RBI has observed that some NBFCs have large investments in various partnership firms or they have contributed to capital in some partnership firms. In view of the risks involved in NBFCs associating themselves with partnership firms, RBI decided to prohibit NBFCs from contributing capital to any

partnership firm or to be partners in partnership firms. In cases of existing partnerships, NBFCs may seek early retirement from the partnership firms.

BANKING COs (NOMINATION) RULES, 1985: The nomination forms (DA1, DA2 and DA3) have been prescribed in the Nomination Rules as mentioned in the Banking Regulation Act 1949. These forms, prescribe that the thumb impression of the accountholder is required to be attested by two witnesses. RBI observed that some banks insist on attestation of signature also by witnesses, as thumb impression is attested.

RBI has examined the issue in consultation with IBA and has clarified that signatures of the accountholders in forms DA1, DA2 and DA3 need not be attested by witnesses.

NOMINATION IN CASE OF JOINT DEPOSIT A/Cs: Some banks deny the facility of nomination to the customers opening joint a/cs with or without "E or S" mandate. RBI has clarified that nomination facility is available for joint deposit accounts also.

CERSAI: Govt. has notified the establishment of the Central Registry with the objective to prevent frauds in loan cases involving multiple lending from different banks on the same immovable property. This Registry has become operational on March 31, 2011. The Central Registry of CERSAI, a Government Company licensed under Section 25 of the Companies Act 1956 has been incorporated for the purpose of operating and maintaining the Central Registry under the provisions of the SARFAESI Act, 2002.

INTEREST RATE ON SAVINGS DEPOSITS: RBI has decided to increase the interest rate on domestic and ordinary Non-Resident savings deposits as well as savings deposits under Non-Resident (External) Accounts Scheme by 0.5 percentage point from 3.5% to 4.0%pa with immediate effect.

DDs FOR RS. 50,000/- AND ABOVE: RBI has reiterated that demand drafts, mail transfers, telegraphic transfers and travellers cheques for Rs. 50,000/- and above should be issued by banks only by debit to the customer's account or against cheques or other instruments tendered by the purchaser and not against cash payment.

DISHONOUR / RETURN OF CHEQUES: RBI has advised banks that instruments returned unpaid should have a signed / initialed objection slip on which a definite and valid reason for refusing payment must be stated, as prescribed in Rule 6 of the Uniform Regulations and Rules for Bankers Clearing Houses.

PAYMENT OF CHEQUES / DRAFTS / PAY ORDERS: In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, RBI has directed that with effect from April 1, 2012, banks should not make payment of cheques/drafts/pay orders/bankers cheques bearing that date or any subsequent date, if they are presented beyond the period of three months from the date of such instrument.

DEMAND DRAFTS FOR RS. 20,000/- & ABOVE: RBI has advised banks to ensure that demand drafts of Rs. 20,000/- and above are issued invariably with account payee crossing.

ACCOUNT PAYEE CHEQUES: RBI has reiterated that banks should not collect account payee cheques for any person other than the payee constituent. Further, with a view to mitigate the difficulties faced by the members of co-operative credit societies in collection of account payee cheques, relaxation was extended in terms of which, banks may consider collecting account payee cheques drawn for an amount not exceeding

Rs.50,000/- to the account of their customers who are co-operative credit societies, if the payees of such cheques are the constituents of such co-operative credit societies.

SAVINGS BANK INTEREST RATE DEREGULATED: Savings bank deposit interest rate for resident Indians deregulated from October 25, 2011. Banks given the freedom to determine their savings bank deposit interest rate, subject to the conditions that

Each bank should offer a uniform interest rate on savings bank deposits up to Rs.1 lakh, irrespective of the amount in the a/c within this limit;

For savings bank deposits over Rs.1 lakh, a bank may provide differential rates of interest, if it so chooses, subject to the condition that the bank should not discriminate in the matter of interest paid on such deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices.

Further, RBI has clarified that the revised guidelines would be applicable to domestic savings bank deposits held by residents in India. Further, the interest rates applicable on the domestic SB deposit will be determined on the basis of end-of-day balance in the account. Accordingly, while calculating interest on domestic savings bank deposits, banks to apply the uniform rate set by them on end-of-day balance up to Rs. 1 lakh and for any end-of-day balance exceeding Rs.1 lakh, banks may apply the differential rate(s) as fixed by them.

"SMALL ACCOUNT": With a view to promote financial inclusion, RBI has introduced a new type of simple account aimed at general masses.

i) The aggregate of all credits in a financial year does not exceed Rs 1 lac;

ii) The aggregate of all withdrawals and transfers in a month does not exceed Rs 10,000;

(iii) The balance at any point of time does not exceed Rs 50,000/-.

SUBSTITUTION OF TERM MSE IN PLACE OF SSI: RBI has circulated notification issued by the Ministry of Small Scale Industries regarding substitution of term 'Micro and Small Enterprises' in place of the term 'Small Scale Industries.'

M-WALLETS: Keeping in view the need to facilitate larger acceptance of mobile phone based prepaid payment instruments (M-wallets) as a mode of payment, RBI has reviewed the position and has decided to bring semi closed m-wallets on par with the other semi-closed prepaid instruments subject to following conditions.

The maximum value of such prepaid semi-closed m-wallet shall not exceed Rs. 50,000.

The monetary ceilings on prepaid instruments based on customer due diligence as laid down in the extant guidelines would be applicable to such m-wallets.

FAILED ATM TRANSACTIONS: With a view to further improve the efficiency of ATM operations, the time limit for resolution of customer complaints by the issuing banks shall stand reduced from 12 working days to 7 working days from the date of receipt of customer complaint. Accordingly, failure to re-credit the customers account within 7 working days of receipt of the complaint shall entail payment of compensation to the customer @ Rs. 100/- per day by the issuing bank.

Any customer is entitled to receive such compensation for delay, only if a claim is lodged with the issuing bank within 30 days of the date of the transaction.

The number of free transactions permitted per month at other bank ATMs to Savings Bank a/c holders shall be inclusive of all types of transactions, financial or non-financial.

All disputes regarding ATM failed transactions shall be settled by the issuing bank and the acquiring bank through the ATM system provider only.

IMPLEMENTATION OF CTS 2010 STANDARD

All banks providing cheque facility to their customers, have been advised to issue only 'CTS-2010' standard cheques not later than April 1, 2012 on priority basis in northern and southern region which will be part of the northern and southern CTS grids respectively and across the country by September 30, 2012 through a time bound action plan.

MOBILE BANKING TRANSACTIONS IN INDIA

Existing Guidelines: Banks are permitted to offer Mobile Banking service to their customers subject to a daily cap of Rs.50,000 customer for both funds transfer and transactions involving purchase of goods / services with an overall calendar month limit of Rs.2,50,000/-.

Revised Guidelines: RBI has removed the cap of Rs. 50,000/- However, banks may place per transaction limits based on their own risk perception with the approval of its Board.

UNCLAIMED DEPOSITS LYING WITH BANKS

As on December 31, 2011, a total amount of around Rs. 2481.39 crores is lying in 11249844 accounts as unclaimed deposits with scheduled commercial banks. In this regard, the Reserve Bank has directed banks to -

Play a more pro-active role in finding the whereabouts of the account holders, whose accounts have remained inoperative.

Annually review accounts in which there are no operations for more than one year.

Consider launching a special drive for finding the whereabouts of the customers/legal heirs in respect of existing accounts which have already been transferred to the separate ledger of Inoperative Accounts.

Allow operations in such accounts after due-diligence and not to levy any charge for activation of inoperative accounts.

Display on their website, the list of unclaimed deposits/ inoperative accounts which are inactive/inoperative for ten years or more. The list displayed on the website must contain only the names of the account holder(s) and his/her address.

Complete this process by June 30, 2012.

COMPENSATION FOR DELAYED PAYMENT

Agency bank has been advised to compensate an investor in relief/savings bonds, for the financial loss due to late receipt / delayed credit of interest warrants/maturity value, at a fixed rate of 8 per cent per annum.

INDIRECT FINANCE TO HOUSING SECTOR

RBI has been decided to increase the limit from Rs.5 lakh to Rs.10 lakh for the bank loans extended to non-governmental agencies, approved by NHB for their refinance, for on-lending for the purpose of construction/reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum dwellers.

HOME LOANS-LEVY OF FORE-CLOSURE CHARGES

The Committee on Customer Service in Banks headed by the Chairman Sh. M. Damodaran had observed that foreclosure charges levied by banks on prepayment of home loans are resented upon by home loan borrowers across the board especially since banks were found to be hesitant in passing on the benefits of lower interest rates to the existing borrowers in a falling interest rate scenario.

The RBI has therefore, decided that banks will not be permitted to charge foreclosure charges/pre-payment penalties on home loans on floating interest rate basis, with immediate effect.

NATIONAL PENSION SCHEME: National Pension System (NPS) is a defined contribution based pension system made available to all Indian citizens between the age group of 18 to 60 (including NRIs) introduced by Govt of India with effect from 1st May 2009. The GOI has announced the co-contribution based Swavalamban Scheme to mitigate the longevity risk of unorganized sector. By opening NPS accounts, we not only serve social cause but also generate substantial non interest income to the Bank. Last year, our performance was very poor (300 NPS accounts) in this segment. IMPORTANT RATIOS S.No Ratio Particulars 01 Tier I Capital Paid up Capital + Reserves (including Investment

Fluctuation Reserve (IFR)) 02 Tier II Capital Sub - ordinated Debt Bonds + Contingency

Reserves + Provisions on Standard Assets 03 Net Worth Equity + Reserves & Surplus - intangible assets 04

C.A.R(Capital Adequacy Ratio)

(Tier I Capital + Tier II Capital ) / Total Risk Weighted Assets (RWA)

05 Return on (Average) Assets

Net Profit / Average Assets (Fortnightly)

06 Return on Equity (RoE) Net Profit / (Capital + Reserves & Surplus) 07 Average Cost of Deposits Interest paid on Deposits / Average monthly Total

Deposits 08 Average Yield on

Advances Interest & Discount received on Advances / Average( monthly )Total advances

09 Average Yield on Investments

Interest Income on Investments / Average( monthly) Investments

10 Average Business per employee

Average (monthly) business (i.e. Total Deposits + Gross Advances) / Total No. of employees at the relevant date

11 Gross Rate of Return Net Result / Average Total Business 12 C D R (Credit Deposit

Ratio) For Whole Bank (Gross Advances - Inter bank Advances + Investments in RIDF ) /Agg. Deposits

13 C D R (Credit Deposit Ratio) At branches

(Gross Advances - Inter bank Advances ) /Agg. Deposits

14 Cost of Funds Interest paid on Deposits & Borrowings / (Average (monthly) Total Deposits & Borrowings)

15

Expenses Ratio Operating Expenses (Staff expenses + Overheads ) / Net Operating Income ( Net Int. Income + Other Income )

16 Net Interest Income (N I I) For Whole Bank

Interest Income - Interest Expenditure

17 Net Interest Income (N I I) At Branches

(Interest received on Advances + Int. received on funds lent to H.O.) - (Interest paid on deposits + Int. paid on funds borrowed from H.O.)

18 Net Interest Margin (N I M)

Net Interest Income / Average Earning Assets (Weekly)

19 Net Profit per Employee Net Profit/ Total No. of employees at the relevant date

20 Transaction Cost Operating Expenses (Staff expenses + Overheads ) / Total Business (Total Deposits + Total Advances )

21 Gross NPA (%) Gross NPA x 100 / Total Advances 22 Net NPA (%) Net NPA x 100 / Net Advances

LOAN PRODUCTS

HOUSING LOAN:

01. Purpose:

Purchase a plot of land for purpose of construction of house. Purchase/ construct a new house/ flat Purchase an existing (old) house/ flat or extend an existing house Repair or renovate an existing house/ flat Furnishing/ consumer durables as part of the project cost.

02. Eligibility:

Age: Individual(s) over 18 years of age with steady source of income. Maximum age limit for repayment of a Housing Loan is fixed at 70 years.

03. Loan Tenor: Up to 30 years subject to liquidation of the Housing loan before the borrower reaches the age of 70 years.

04. Number of Co-Borrowers: Restricted to maximum 3 including spouse/ children/ parents/ siblings. However, not below the rank of AGM in Processing Centres/ Region/ Branch can relax maximum number of co-borrowers provided the repayment is made through an account with Bank in the joint names of all the borrowers.

05. Eligible Income for arriving at maximum loan amount:

Maximum loan amount will be the lowest of the amount assessed on the basis of following under: a) Project cost less applicable margin as mentioned below:

For Loans up to Rs.20.00 lacs - 10% For Loans above Rs.20.00 lacs up to Rs.75.00 lacs - 20% For Loans above Rs.75.00 lacs - 25% b) Permissible as per EMI/ NMI ratio Based on income wise graded ratio as under: Net Annual Income EMI/NMI

Ratio Up to Rs.0.60 lacs 20% Above Rs.0.60 lacs to Rs.1.20 lacs

25%

Above Rs.1.20 lacs to Rs.2.00 lacs

30%


50%


55%

Above Rs.10.00 lacs 65%

c) Maximum permissible as per LTV ratio

Loan amount Up to Rs.20.00 lacs - 90%

Loan amount above Rs.20.00 lacs up to Rs.75.00 lacs - 80%

Loan amount above Rs.75.00 lacs - 75%

# In cases where the cost of the house/dwelling unit does not exceed Rs.10.00 lacs, banks may add stamp duty, registration and other documentation charges to the cost of house/dwelling unit for the purpose of calculating Loan to Value (LTV) ratio.

06.Repayment:

Maximum 30 years or up to the age of 70 years (the age by which the loan should be fully repaid) of the borrower, which ever is early.

SBH Maxgain Housing Loan

Purpose As applicable to normal Housing loan scheme

Eligibility Individuals over 18 years of age and younger than 70 years.

Applicants should open a SB account or Current account with an

average quarterly balance of Rs.10,000/- with us.

Loan amount

As applicable to normal Housing loan scheme.

An upper limit of Rs.100.00 lacs is fixed under this scheme. However, loans availed by staff and staff jointly with their spouse have been exempted from this ceiling. No request can be considered for converting an existing HL account into an Overdraft under SBH Max Gain.

Margin, Interest &

Security

As applicable to normal Housing loan scheme

Type of Loan Housing loan with Overdraft facility

Special Feature of the product

The Drawing Power of the Overdraft will reduce on monthly basis

to an extent of Principal component of the EMI, so that the OD is

liquidated at the end of the loan tenure.

SBH HOME CASH:

Purpose General purpose other than speculative. However a forma declaration should be obtained from the borrower that the Home Cash Loan would be utilized for the purpose of House Renovation /Repairs /Refurbishing or Furniture/Fuxures.

Eligibility All existing Home Loan customers with a satisfactory repayment record of at lease Six Months provided possession of the House has been taken by the Customer and valid mortgage has been created in favour of the Bank.

Loan Amount Min: Rs.50000/- Max: Rs.10.00 lacs Permissible Loan Amount As per Value of the house property

75% of present market value of the house property less present outstanding in the Home Loan account. The present market value of the property will be decided by the realizable value by a fresh valuation report obtained from empanelled valuer.

As per EMI/NMI Raio

Based on Net Annual Income of applicant as given Net Annual Income Permissible EMI/NMI Ratio >Rs. 2.00 lacs Rs. 5.00 lacs Rs.10.00 lacs 70%

Nature of Facility Term Loan/ Overdraft with reducing drawing power. Processing Fee 0.50% of loan amount with minimum of Rs.1000/- and maximum

of Rs.10,000/-. No. of loans At any point of time there should be only one SBH Home Cash

loan. Tenure The tenure of the loan would be co-terminus with the original

residual maturity of the Home Loan or the option exercised by the borrower, whichever is earlier, subject to liquidation of the loan, before the borrower attains the age of 70 years or maximum period of 120 months.

Rate of Interest Term Loan: 0.05% above Base Rate. Overdraft : 0.30% above Base Rate.

COMBO LOAN SCHEME - CAR LOAN ALONG WITH HOUSING LOAN.

Objective of the Scheme

To benefit the customer in terms of reduced Rate of interest and Nil Processing charges for the Car Loan portion.

Eligibility Existing Housing Loan borrowers who have, 1.Availed the Housing Loan from SBH and completed the House or taken possession of house. 2. Created valid Equitable Mortgage. 3.Complied with all terms and conditions regarding sanction of Housing Loan.

Margin for Car Loan a. Nil, if the mortgage of the House property is extended to the proposed Car Loan.

b. If the Mortgage of House property is not extended the Margin as per existing Car Loan Scheme will continue as under.

Up to Rs.10 lacs : 15% on road price of the car. Above Rs.10.lacs : 15% margin on ex-showroom price of the car. Or Margin of 20% on Road price of the car at the option of the customer.

Permissible Loan Amount

EMI / NMI Ratio will be as per existing Car Loan Schemes.

As per EMI/NMI Raio

Based on Net Annual Income of applicant as given Net Annual Income Permissible EMI/NMI Ratio Rs. 5.00 lacs Rs.10.00 lacs 60% Minimum income for Salaried persons Rs.3.00 lacs p.a., Minimum income for others --Rs.4.00 lacs p.a.,

Processing Fee Waived for Car Loan. Tenure The Maximum tenure of the loan will be as per the Original

Scheme of Car Loan i.e., 84 Months Rate of Interest Term Loan: 0.20% above Base Rate.

Takeover of Loans Takeover of Car loans under the scheme is not permitted.

SBH PRASANTHI SCHEME ( LOAN TO PENSIONERS):

1.Purpose: To enable the Pensioners to meet their personal expenses like medical expenses, children marriage expenses etc.,

2.Eligibility: All State & Central Government including Defense, Railways and Telecom Department Pensioners and Banks Pensioners, whose Pension Accounts are maintained by our branches.

3.Loan Amount :

v Incase the age of the pensioner is not more than 72 years: Maximum of 12 months net pension/ net family pension with a ceiling of Rs.7.50 lacs subject to EMI not exceeding 40% of net pension/ net family pension. Age at the time of full repayment of loan should not be more than 74 years. v Incase the age of the pensioner is above 72 years and up to 75 years:

Maximum of 12 months net pension/ net family pension with a ceiling of Rs.2.00 lacs subject to EMI not exceeding 40% of net pension/ net family pension. Age at the time of full repayment of loan should not be more than 77 years.

4. Repayment: v For Pensioners : Maximum 48 months. v For Family Pensioners : Maximum 36 months.

EDUCATION LOAN: 01. Purpose: To extend financial assistance to meritorious students for pursuing higher education in India and abroad. The main emphasis is that a meritorious student, though poor, is provided with an opportunity to pursue education with the financial support from the Bank. 02. Student Eligibility: Student should be an Indian National. Should have secured admission to a higher education course in recognized

institutions in India or to foreign university / institutions. 03. Quantum of Finance: Studies in India - Maximum Rs.10.00 lacs Studies abroad - Maximum Rs.20.00 lacs*

Higher quantum of loan above these ceilings can be considered, on course to course basis (eg: courses like IIMs, ISB etc) by the respective Field General Manager.

04. Margin :

Upto Rs.4.00 Lacs - NIL Above Rs. 4.00 Lacs - Studies in India 5% and Studies abroad 15%

05. Security:

Upto Rs. 4.00 Lacs No Security (co-obligation of parent/ guardian is compulsory)

Above Rs.4.00 Lacs and upto Rs.7.50 Lacs: Besides the parent(s) executing o the documents as co-borrowerscollateral security in the form of a suitable

third party guarantee. Above Rs.7.50 Lacs: - Collateral security of suitable value and Co-obligation of

parent / Guardian / third party guarantee along with the assignment of future income of the student for payment of installments.

Interest Subsidy: Govt. of India interest subsidy is available for the students having family income below Rs.4.5 lacs and availing loan for the courses conducted within India. As per the scheme total interest on amounts disbursed after 01.04.2009 will be reimbursed to all the eligible students. It may also be noted that even loans in excess of Rs.10 lakhs for studies in India qualify for interest subsidy under Central Sector Interest

Subsidy Scheme for loans up to Rs.10 lakhs (i.e. maximum permissible interest subsidy is to the extent of interest applied on Rs.10 lakhs only).

07. Repayment : Course period plus one year or six months after getting job, whichever is earlier. The loan should be repaid within 7 years after commencement of repayment for

the loan amounts up to Rs.7.50 lacs. For the loan amounts above Rs.7.50 lacs repayment period can be up to 10

years after commencement of repayment.

CAR LOAN:

01. Purpose: For purchase of new passenger cars, Multi Utility Vehicles (MUVs) and Semi Utility Vehicles (SUVs).

2. Eligibility: AGE: 21-65 years (for sanction of loan). Even beyond the age of 65 years, can be sanctioned subject to loan must be fully repaid before the borrower attains the age of 70 years.

3. Minimum Income:

Salaried: Minimum Net Annual Income (NAI) of applicant and/ or co-applicant, if any, together should be Rs.3.00 lacs, whether or not maintaining salary account with us.

Self employed, Professionals and Businessmen: Minimum Net Profit or Gross Taxable income of Rs.4.00 lacs.

Agriculturists & others: Minimum Net Annual Income of applicant and/ or

co-applicant together to be Rs.4.00 lacs.

4. EMI/ NMI Ratio:

Depending on Net Annual Income EMI/ NMI Ratio will be as under:

Net Annual Income EMI/ NMI Ratio

Up to Rs.5.00lacs Should not exceed 50%

Above Rs.5 lacs and up to Rs.10 lacs Should not exceed 50%

Above Rs.10 lacs Should not exceed 60%

5. Maximum Loan Amount:

Salaried: Upto 48 times NMI

Self employed, Professionals and Businessmen: Up to 4 times NAI

Agriculturists & others : Up to 3 times NAI

6. Margin:

Up to Rs.10.00 lacs - 15% of total cost of the vehicle i.e. on road price.

Above Rs.10.00 lacs- 15% Margin on Ex-showroom price of the car OR Margin of 20% on Road Price of the car at the option of the

customer.

7. Repayment: 84 Months.

MORTGAGE LOAN:

1. Purpose: It is a general purpose loan/ line of credit. The purpose of loan will have to be specified along with a simple undertaking that the loan will not be used for any speculative purpose, including speculation on real estate and equity shares.

2. Eligibility:

Any individual who is over 21 years of age with a steady source of income. The maximum age limit is 65 years.

3. Net income:

Minimum Net Annual Income is Rs.2.50 lacs.

4.EMI/NMI Ratio:


Rs.2.50 lacs to Rs.5.00lacs 50%

Above Rs.5 lacs and up to Rs.10 lacs 60%

Above Rs.10 lacs and up to Rs.25.00 lacs 70%

5. Quantum of Loan:

Minimum Rs.50000/- , Maximum Rs.200 lacs.

6. Margin:

50% of the market value of the property if the property is purchased before 3 years.

50% of the distressed value of the property if the property is purchased within 3 years.

07. Repayment:

TERM LOANS:

Salaried persons with check-off facility : 120 months Others : 84 months

OVERDRAFT: The loan is to be repaid in a maximum period of 60 months, through a monthly reducing D.P., the reduction to commence from the month following the date of release of facility.

08. Processing fee: 0.56% of the loan amount and maximum of Rs.50000/-

NRI MORTGAGE LOAN:

1. Purpose: It is a general purpose loan/ line of credit. The purpose of loan will have to be specified along with a simple undertaking that the loan will not be used for any speculative purpose, including speculation on real estate and equity shares. Branches to ascertain the purpose of loan by way of suitable declaration in the Application form and record in the system.

2. Eligibility:

a) Any individual No-Resident Indian (NRIs) holding a valid Indian Passport or Persons of Indian Origin (PIOs) holding a foreign passport with a minimum age of 21 years and above.

b) Have been holding a job at least 1 Year or self-employed with a minimum net monthly income (NMI) equi. To Rs.20000/- or a net annual income (NAI) equi. To Rs.2,40,000/-

3. Disbursal: The proceeds of the loan shall not be credited to NRE/FCNR account and not remitted outside India.

4.EMI/NMI Ratio:


Rs.2.50 lacs to Rs.5.00lacs 50%

Above Rs.5 lacs and up to Rs.10 lacs 60%

Above Rs.10 lacs and up to Rs.25.00 lacs 70%

5. Quantum of Loan:

Minimum Rs.100000/- , Maximum Rs.200 lacs.

6. Margin:

50% of the market value of the property if the property. While assessing the value of the collateral for mortgage loans, only 70% of the market value of the property i.e., distress sale value is to be considered as value of the collateral security. Valuation to be done by an approved valuer at borrowers cost. is purchased before 3 years.

50% of the distressed value of the property if the property is purchased within 3 years.

07. Repayment:

84 equated monthly installments (EMIs) Repayment of loan may be made by debit to NRE/FCNR /NRO accounts of the

Non-Resident Borrower or out of inward remittances by the borrowers.

08. Processing fee: 0.56% of the loan amount and Minimum of Rs.1000/- and maximum of Rs.50000/-

MSME SEGMENT RECENT LOAN SCHEMES:

SBH SWAGATHAM:

It is a scheme for returning Non-Resident Inidans (NRIs) under MSME Segment.

Objective : To provide

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