Retail Banking in India: Introduction of Bank

SHRI CHINAI COLLEGE OF COMM. & ECO.
RETAIL BANKING IN INDIA

INTRODUCTION OF BANK
A bank is an institution that deals with money and credit. Different people
understand the meaning of bank in different ways. For a common man
bank means a storehouse where money is stored; for a business man it `s a
financial institution and for a day to day customer it is an institution where
he can deposit his savings. In reality banks are service organization selling
banking services. Banks activities can be divided in to retail banking ,
directly dealing with individuals and small businesses; business banking,
providing services to mid-market business; corporate banking , directed at
large business entities; private banking, providing wealth management
services to high net worth individuals and families; and investment
banking, relating to activities on the financial markets. Most banks re
profit making, private enterprises. However, some are owned by
government, or are non-profits. We will study retail banking in detail.
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SHRI CHINAI COLLEGE OF COMM. & ECO. RETAIL BANKING IN INDIA
ORIGIN OF RETAIL BANKING
Retail banking is not an invention or innovation in itself. In India, it has

been in existence right from the time banking operations started. However,
not much emphasis was given to it since corporate banking was the
preferred goal for the banks. Right from the independence up to 1990`s big
corporate houses and industries depended heavily on the banks to finance
their projects since a limited number of financial sources were available to
them. This was because capital market was not well developed and
numbers of restrictions were in place on raising capital from the overseas
markets. There was no free for joint ventures and multinational companies.
In addition, government norms embarked priority sectors which were to be

financed by the banks. Thus banks had not much option but to finance the
corporate sector. The origin of retail banking in India can be traced to a
number of developed developments which occurred on the economic front
both in national and international arena. Many challenges emerged for the
banks with many opportunities.
The challenges were in the form of decline in the traditional lines of

business, heavy competition, changing economic preferences and the
declining profitability, the opportunities emerged on account of many
changes taking place on the socioeconomic and also on the technological
front. Thus, to face the challenges and also to cash in on the emerging
opportunities, banks operating in public, private or foreign sector began to
place great deal of emphasis on retail banking.
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The decade of 1990s saw the implementation of economic and financial

sector reforms in a phased manner to tide over the deteriorating economic
condition of the country. The liberalization of financial sector has widened
the scope of financial sources for corporate. They can now go in for
external commercial borrowings (ECB) from any internationally
recognized banks, export credit agencies, international capital markets,
suppliers of equipments etc. corporate can raise loans from international
sources up to predetermined amount without the need of getting approval
from either the government or the reserve bank.
Banking sector reforms paved way fir the entry of foreign and private
banks. The government is also allowing FDI into the banking sector.
Private and foreign banks with superior technology and management
practices began to give tough competition to public sector banks. To
counter dwindling profits, to cash on the economic growth and also to
diversify their operations and earn a productive return with their surplus
cash, public sector banks joined the bandwagon of retail banking.
Public sector banks realized that the profit margins were higher and risks
were lower in retail banking when compared to corporate banking. While
foreign and foreign banks competed on the basis of technology and
innovating marketing and management practices, public sector banks
banked heavily on their wide network of branches spread throughout the
length and breadth of the country.
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INTRODUCTION OF RETAIL BANKING

“We don’t want satisfied customers…we want delighted customers.” It is the
new marketing mantra today. The same applies to banking as well. Retail
banking and rural banking were once considered as taboos by the leading
foreign and domestic banks. But cut-throat competition, innovation and
advanced technology have altogether changed the faced of banking sector. Now
all banks have recognized the importance of retail banking.
In this that part of a bank that offers products and services primarily to
individual customers, professional, self-employed individuals or small
businesses. The focus is on creating products and services that meet the needs of
the target customers and are profitable for the bank as well.
Understanding retail banking will help in servicing your customer better as it

would give you a perspective and insight into how such products are structured
and specific requirements for each set of products.
The approach to retail banking products is more is more on a mass production

basis wherein all risk and operations are based on and geared to cater to a large
number of customers. This is therefore, significantly different from corporate
banking or wholesale banking where focus is on large sized customer accounts
rather than large numbers of customers.
With the advent of ATMs, ‘Anytime banking’ has come into picture. Satellites
and telecom networks across the world have made ‘Anywhere banking’
possible. Now it is the turn of ‘Anyhow banking’, and the leading bank of the
next century will be the one which has all these three A’s.
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WHAT IS RETAIL BANKING
Retail banking is however; quite broad in nature it refers to the dealing of

commercial banks with individual customers, both on liabilities and assets sides
of the balance sheet. Fixed current/savings accounts on the liabilities side; and
mortgages, loans (e.g. personal, housing, auto and educational) on the assets
side are the more important of the products offered by banks. Related ancillary
services include credit cards, or depository services.
Today’s retail banking sector is characterized by three basic characteristics.
 Multiple products (deposits, credit card, insurance, investments and

securities)
 Multiple channels of distribution (call center, branch, internet and
kiosk); and
 Multiple customer groups (consumer, small business, and corporate)
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DEFINITION
 DEFINITION OF RETAIL BANKING
“Retail banking refers to banking in which banking institutions execute

transactions directly with consumers, rather than corporations or other banks.
Services offered include: savings and checking accounts, mortgages, personal
loans, debit cards, credit cards, and so forth”.
“Retail banking is typical mass-market banking where individual customers use

local branches of larger commercial banks. Services offered include: savings
and checking A/c’s, mortgages, personal loans, debit cards, credit cards, and so.
 DEFINITION OF RETAIL BANKING SERVICES
Banking services provided to individual members of the public as opposed to

those provided to businesses and institutions.
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OBJECTIVES OF RETAIL BANKING

The objectives of retail banking is to increase penetration by providing
increasing level of services and increased access, by offering value added
services to customers by packing them with retail banking products and
services. The retail banking offers considerably better of 3-4% compared to
very thin spread available to banks in case of corporate clients.
SOME OF THE OBJECTIVES ARE
 Assess way to leverage and scale to support aggressive growth.

 Identify cost savings to meet return on investment capital target.
 Improve service capability in order to integrate with corporate parent and
leverage financial planning network.
 Retail banking clients are generally loyal and tend not to change from one
bank to another very often;
 Interest spreads are wide, since customers are too fragmented to bargain
effectively; credit risks tends to be well diversified, as loan amounts are
relatively small;
 There is less volatility in demand and credit cycle than from large
corporate;
 Large numbers of clients can facilitate marketing, mass selling and the
ability to categorize/select clients using scoring systems /data mining.
 Provide cheap commercial deposits and consumer deposit growth.
 Drives overall deposits and loan growth through aggressive marketing.
 Continues to stress credit quality and ensure risk is appropriately priced.
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ADVANTAGES AND DISADVANTAGES OF RETAIL

BANKING
ADVANTAGES
Retail banking has inherent advantages offsetting certain disadvantages.
Advantages are analyzed from the resources angle and asset angle.
RESOURCE ASSET SIDE
Stable and constitute core Better yield and improved bottom line
deposits
Less bargaining for additional Good avenue foe funds deployment
interest
Low cost funds Lower risks and NPA perception
Builds customer base Helps economic revival of the nation
through increased production activity
Increases subsidiary business Improves lifestyle and fulfills aspirations
of the people through affordable credit
A safe and convenient saving Innovative product development
avenue
Minimum marketing efforts in a demand
driven economy.
Risk weight in certain segments like
housing loan
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DISADVANTAGES
 Designing own and new financial products is very costly and time
consuming for the bank.
 Customers now-a-days prefer net banking to branch banking. The banks
that are slow in introducing technology-based products, are finding it
difficult to retain the customers who wish to opt for net banking.
 Customers are attracted towards other financial products like mutual
funds etc.
 Though banks are investing heavily in technology, they are not able to
exploit the same to the full extent.
 A major disadvantage is monitoring and follows up of huge volume of
loan accounts inducing banks to spend heavily in human resource
department.
 Long term loans like housing loan due to its long repayment term in the
absence of proper follow-up, can become NPAs.
 The volume of amount borrowed by a single customer is very low as
compared to wholesale banking. This does not allow banks to exploit the
advantage of earning huge profits from single customer as in case of
wholesale banking.
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SWOT ANALYSIS
 STRENGTH
1. Provides diversified asset portfolio

Retail banking includes comprehensive range of financial product and services
i.e. deposit product, auto loan, car loan, home loan, loan against equity shares,
mortgage loan, payment of bills, debit card, credit card, etc. These products
provide an opportunity for banks to diversify the asset portfolio with higher
profit and relatively lower NPA.
2. Improves standard of living

Due to major economic reforms in Indian economy there has been an increase
in per capita income which has led to change in life style and growing
urbanization have made the Indian population rise from oblivion and resurge in
modern era on this front role of retail banking arises. Retail banking provide all
such product and services(home loan, car loan, personal loan, etc) to its
customer which are required by them to maintain change in their life style in
short it helps in fulfilling aspiration of people through affordable credit.
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3. CRM Tool
The individual customer is deity of bank in retail banking segment. All product
and services are designed to satisfy need and wants of its customer. As customer
in retail banking belong to different economic, cultural, educational, and social
background there demand is also varied. It is acceptance of the banking product
and satisfaction of customer that yield profit in this segment. Hence customer
Service and Quality implementation through use of CRM tools will help of
banks.
 WEAKNESS
1. Avoids corporate sector
Retail banking avoids corporate sector totally which is the backbone of Indian
economy. Main reason put forth or this is decline in corporate borrowing.
However bank can take certain step to manage their corporate clients such as
lower arte credit, higher amount of loan etc. Managing corporate client is more
easily as they have well defined financial policy and project and they
concentrate on product and services offered rather than on CRM of bank unlike
individual clients.
2. Marketing (Internal and External)

Retail banking requires strong marketing strategies to be adopted by bank both
internal and external under retail banking segment top level management need
employees to introduce product properly to its employees because if the
employees are not aware regarding the product they are offering that product
will fail however effective the product is also bank require to spend lot on its
marketing of product to general public because if public is not aware regarding
the product and service how will they opt for it .
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3. Changes in technology
Future of retail banking lies in the hand of IT. Various It solution used by banks
such as E-banking, phone banking, ATM leverage the retail banking product
and service offered by banks. But this has weekend the segment somehow. If
banks are not able to adopt the latest technology it may pull back the growth of
bank also this technology requires lot of capital investment and if at all the
technology fails then it may shake the customer’s confidence on bank and bank
may land up in losing its customer.
 OPPORTUNITIES
1) Scope for innovation:
Under retail banking as banks try to provide all those product and services
which are desired by its customer this segment has more scope for innovation
banks can keep on modifying its products as per the market demand which
helps them from not being out dated .
2) Rise in per capita income
The rise of the Indian middle class is an important contributory factor in this
segment. The percentage of middle to high-income Indian households is
expected to continue rising. The younger population not only wields increasing
purchasing power, but as far as acquiring personal debt is concerned, they are
perhaps more comfortable than previous generations. Improving consumer
purchasing power, coupled with more liberal attitudes toward personal debt, is
contributing to India's retail banking segment.
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3) Economic growth
Retail banking has immense opportunities in a growing economy like India. In

the BRIC Report India is stated as an economic superpower. According to A. T.
Kearney, a global management-consulting firm, recently identified India as the
'second most attractive retail destination' of 30 emergent markets. Hence retail
banking has high opportunities in India
 THREATS
1. Large disbursement of loans

The boom in the field of retail banking and the intense composition among the
to increases the customer base has resulted in the large disbursement of
customer loans, loans on credit cards, auto loans, educational loans etc. on easy
terms without much scrutiny this has brought within an increase in the number
of cases of default in loan repayment thus increasing the bank’s NPAs.
2. Issue of customer privacy

Customer privacy is also affected in another way wherein customer service
representatives of the banks ring up customers at any times at their places of
work, informing them about new products and services. This may cause
inconvenience to busy customers.
3. I.T
The growth of IT has brought with it a number of frauds perpetrated with the
help of technology and which come under the domain of cyber crimes. Banks
are the victims of unscrupulous elements who have in many instances hacked
banks website and stolen credit card number, pass word and other confidential
information relating to customer.
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RETAIL BANKING SERVICES

Retail banking includes comprehensive range of financial product and services
i.e. deposit product, auto loan, car loan, home loan, loan against equity shares,
mortgage loan, payment of bills, debit card, credit card, etc. These products
provide an opportunity for banks to diversify the asset portfolio with higher
profit and relatively lower NPA. Today the most proactive banks have entered
the retail banking segment and have identified it as a principal growth driver.
Categorization of Retail Bank services
Core services Facilitating services Supporting services
1.Payment  Cash  Making payment at door

services  Foreign step
currency  Internet banking
requirements  Telephone banking
 Travelers cheque
 DD/bankers cheque
 IT
2.Current  ATM card  Credit card

account and  Standing instruction  Debit card
saving account from customer for  Service to senior citizen
making payments  Telephone banking
 Inter branch transfer  Internet banking
of fund  Conversion of excess
 Safety vault balance to time deposit
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Core services Facilitating services Supporting services
3.Loan Product  Current account  Delivery of loan at

 Saving account promised time
Consumer loan
 Time deposit  Interest loan option
Housing loan
account  Flexibility
Personal loan in paying
loan
Education loan
 Counseling on Real estate
market
 Legal services for
documentation
4.Insurance  Current account  Additional insurance

product:  Saving account facility for family
Life insurance  Time deposit members.

account  Counseling on post
Pension scheme
 Safety vaults retirement saving
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VARIOUS PRODUCTS OF RETAIL BANKING
1) Home Loans
Types of Home Loans
There are a variety of home loans available:
Home Purchase loans
This is basic home loan for the purchase of a new home.
Existing home improvement loans
These loans are given for implementing repair works & innovations in home
that has already been purchased by the borrower.
Home construction loan
This is a loan given for the construction of a new home.
Home extension loan
His is given for expanding or extending an existing home such as adding a room
or floor etc.
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Land Purchase Loans
This is loan which is provided to purchase land either for construction of a

home or for investment in land.
Bridge Loan
These are loans given to persons who are looking to sell their existing home &
purchase another. The bridge loan helps finance the purchase of the new home
until the old one is sold.
Balance transfer loan
This is loan which allows the borrower to repay an existing loan & avail of
another loan at lower rates of interest.
 Eligibility terms for home loans

The primary concern of a housing finance company is to determine the loan
amount that the borrower is comfortably able to repay. The repayment capacity
is determined by taking into consideration factors such as income, age,
qualification, number of dependents, spouse’s income, assets, liabilities,
stability & continuity of occupation & savings history.
 Documentations requirements – pre-approval

 At the time of application for a home loan, the housing finance company
would ask for the following common documents:
 In case the borrower is a salaried employee, proof of income i.e. salary
certificate/slips & TDS certificate (From 16) of the borrower & co-
applicant, if any.
 In case the borrower is self-employed; details of business track record &
a copy of the audited financial statement of the last two years of the
borrower & co-applicant, if any.
 Copy of bank account statement for the last 6 months.
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 Copy of the latest credit card statement.

 Passport size photograph.
 Signature verification from the borrower’s banker.
 Proof of residence.
Upon receipt of all the documents along with the duly completed
application form, the housing finance company receives the details &
communicates its decision regarding approval of he loan application.
 Documentation requirements – post-approval/ disbursal stage
After a loan application has been approved & at the time that the borrower
requires the funds for payment, the following documents are required to be
furnished:
1. Allotment letter
2. Photocopies of title deeds
3. Agreement to sell
4. Non-encumbrance certificate
5. Approved plans & clearance certificates along with estimates if the
property is self-constructed.
 Repayment Period
Repayment options range generally from 5 to 15 years. A few housing finance
companies also offer a 20-year repayment period, usually at a higher rate of
interest. NRIs can avail of a housing loan for a maximum period of 7 years.
Repayment is usually taken in Equated Monthly Installments (EMI) by way of
post-dated cheques. This fixed money that is repaid to the housing finance
company every month comprises of both interest & principal repayment.
 Interest Rate Calculation
In India, the interest on home loans is usually calculated on Monthly Reducing
or yearly reducing balance.
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 Monthly Reducing Balance
The principal on which the interest is paid reduces every month as the EMI is
paid.
 Annual Reducing Balance

The principal is reduced at the end of the year. This method of calculating
interest is more expensive as the borrower continues to pay interest on a certain
of the principal, which has already been paid back to the housing finance
company by way of the EMI.
The effective interest rate is approximately 0.7% higher than the monthly
reducing balance method. Home loan interest rates for a loan upto 20 lacs is
9.25% to 10% for the period of 5 years.
 Fees & Charges

Home loans are usually accompanied by some or all of the following charges:
 Interest tax which is payable on the interest paid on the home loan & not
on the principal. This ax is sometimes included in the rate of interest on
the home loan.
 Processing charge is a fee payable to the lender on applying for a loan it
could be a fixed fee or a percentage of loan amount applied for &
sanctioned.
 Prepayment penalties are sometimes charged when a loan is repaid before
the end of the agreed duration of the plan. This usually ranges between
0.5% & 1% of the amount being repaid.
 Commitment fees are sometimes charged when a loan is not availed of
within a stipulated period of the loan application being processed &
sanctioned.
 Miscellaneous charges could include documentation or consultant
charges.
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 Tax Benefits
Tax benefits are available under
The interest benefit of Rs. 1, 50,000 and principle benefit of Rs. 1, 00,000 is
deductible if the loan is taken on or after April 1, 1999 to construct or acquire a
property and construction of the property is completed within three years of the
loan disbursement for home loans taken before April 1, 1999, the deductible
amount of interest repaid that can be claimed for tax benefits is Rs. 30,000.
The interest as well as tax benefits can be claimed only if the installments
towards home loan repayment are paid. Tax benefit will defer in case of the
property has been leased out.
2) Personal/Unsecured Loans
Personal loan is an all-purpose loan for which the end user can be to meet any
personal requirements of the borrower.
 Eligibility Terms For Personal/Unsecured Loans

Typically, the take home salary has to be over Rs. 8,000. The borrower should
be over 21 years of age & less than 58 years old.
Loan eligibility is determined primarily by the borrower’s capacity to repay i.e.

his current earnings are the primary determinant. The bank usually tries to
improve that the EMI does not exceed 30-40% of the net take home salary. The
borrower’s place of residence & work place & employment track record are
given higher priority than in secured loans.
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The maximum amount of loan sanctioned is usually in the range of about

normal household expenses & outflows such a s any EMI on other loan etc. &
regular outflows. Most banks lend anywhere between Rs.15, 000 to Rs.10 lakhs
towards personal loans.
 Documentations Requirements – Pre-Approval

 In case the borrower is a salaried employee; proof of income i.e. salary
certificate/slips & TDS certificate (Form 16) of the borrower & co-
applicant, if any.
 In case the borrower is self-employed: details of business track record &
copy of the audited financial statements of the last 2 years of the
 Copy of bank account statements for the last 6 months.
 Copy of the latest credit card statement.
 Passport size photograph.
 Signature verification from the borrower’s banker.
 Proof of residence.
Upon receipt of all the documents along with the duly completed application
form, the bank reviews the details & communicates its decision regarding
approval of the loan application.
 Documentation Requirements – Post approval/Disbursal

Post approval, the bank collects post-dated cheques for the full tenure of the
loan prior to disbursal along with the collateral securities, if any.
Personal loans are usually short tenure loans up to maximum of three years. In
rare cases some banks offer a 5-year repayment option. There is usually a 6
months lock in period in either case.
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Interest rates currently vary between 12 to 30%. Longer tenure loans are usually
priced higher. As also loans to persons with a higher risk profile. Personal loan
for a loan up to 150000 is 12.5 to 15% per year.
 Fees & Charges

The usual fees & charges include:
 Processing fees, which could be about 1-3% of the loan amount being
sanctioned.
 Foreclosure or prepayment penalty ranges between 2-3% of the amount
being repaid.
 Some banks also charge a commitment fee of approximately 1% of the
loan amount, which is levied in case the sanctioned loan is not availed of
within stipulated time duration.
 Tax Benefits
Tax benefit on personal loans is not available to salaried employees. However,
self employed persons may avail of tax benefits on the interest amount paid if
the loan is for professional purposes.
3) Auto Loans
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Types of Auto Loans

Auto loans or car loans could be of the following nature:
New car loan
This is most opted for as it provides a simple loan for purchasing a new car.
Used car loan
This is loan facility offered on second hand car purchases. This involves
valuation of the car being purchased by way or certified values of used cars.
Auto Refinance
This is a loan facility given on an existing car owned by the borrower provided
that the car is not hypothecated to any financier. Eligibility terms For Auto
Loans
Typically most financiers have similar eligibility criteria for auto loans. The age
of the borrower should be between 2-58 years. Annual income should be above
Rs. 60,000. Additional information is taken with the loan application form.
The size of the loan amount sanctioned depends on the cost of the vehicle, the
type of car (standard or Premium) & the percentage financing. Used cars get
lower is offered. A new car can get up to 90% financing. Used cars get lower
financing. Depending on the model & its resale, the amount in used cars like the
Maruti 800 could go up.
 Documentations Requirements – Pre-Approval

 In case the borrower is a salaried employee, proof income i.e. salary
certificate/slips & TDS certificate (From 16) of the borrower & co-
applicant, if any.
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 In case of borrower is self-employed, details of business track record & a

copy of the audited financial statements of the last 2 years of the
borrower & co-applicant. If any.
 Copy of bank statements for the last 6 months.
 Copy of the latest credit card statement.
 Passport size photograph.
 Signature verification from the borrower’s bank.
 Proof of residence.
Upon receipt of all the documents along with the duly completed application
form, the car finance company/bank reviews the details & communicates its
decision regarding approval of the loan application.
 Documentation requirements – Post approval/disbursal

Apart from the loan documentation the borrower is required to submit
photocopies of the following:
1. Registration Certificate (RC book).
2. Insurance policy.
3. Road transport tax papers.
The RC book is usually endorsed as hypothecated to the financier until full

repayment of the loan amount, when the hypothecation is cancelled. After the
last payment is made the bank issues a NOC & form 35 to cancel the
hypothecation on the car. This is submitted to the RTO for updating the RC
book. The insurance company also requires an NOC make the necessary
changes on the insurance policy.
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Usually Car financing is available from 1-5 years. Some financiers offer longer
tenure loans up to 7 years. The tenure is usually dependent on the brand of car
being purchased. A super premium car such as the Mercedes would be restricted
to tenure of 3 years only. As tenure increases the EMI reduces but the total
interest outflow is higher.
Some financiers allow a facility for back loading of the EMI where in the EMI
payments are lower initially & increases as the borrower’s income increases.

The interest is usually charged on a rate or on a reducing balance basis which
could be daily, monthly, and quarterly on annually. Some banks offer a
deduction based on relationship pricing criteria i.e. if the borrower has any other
relationship with the bank by way of deposits, credit cards or other loans with a
good track record of repayment .14.25% to 15% for a vehicle upto Rs.2,50,000
at minimum period of 12 years.
 Fees & Charges

There are fees & charges in addition to interest rate. Processing fees, advanced
EMIs if applicable, stamp charges, registration charges & insurance have to be
paid prior to the transaction being completed.
Most financiers do not cover insurance & registration. The price of the car is
taken to be the ex-showroom price, which does not include insurance &
registration charges.
 Tax Benefits
Salaried employees cannot avail of tax benefits on the loan taken for purchasing
a car. However self employed persons can avail of tax benefits on depreciation
as well as on the interest paid on the amount borrowed for the purchase of the
vehicle.
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4) Educational Loans
Educational loan usually cover a variety of courses. It pays for the cost of
tuition fees, hostel fess, mess fees & examination fees. The cost of books,
equipment & other instruments required by the student are also covered. Some
financiers cover the cost of airfare if the studies are being undertaken overseas.
Eligibility Terms for Educational Loans
The terms for eligibility for an Educational Loan vary from bank to bank. The
primary requirement is that the student should have got admission to the course
that he is seeking the loan for. Most banks also specify an age criteria such as
16-26 years etc. The past academic track record of the student would also be
considered.
The maximum loan amount varies by individual banks as well as the institution
that the student would pursue his/her academics. It could be for studies abroad.
The repayment capacity of the student & in several cases, the parents &/or
guardians is of utmost concern to the bank. Usually no margin money is
required for loans uptoRs.4 Lakhs. For loans in India & 15% for studies in
abroad, to be borne by the applicant. The parent’s income would also be
considered by most banks.
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 Documentation Requirements – Pre-Approval

 The documentation requirements would depend on the specific
requirements as per the policy of the bank giving the loan. However, a
confirmation of admission by the educational institution is necessary.
Other documents would include.
 Copy of bank account statements for the last 6 months.
 Passport size photograph.
 Signature verification from the borrower’s banker.
 Proof of residence.
 Incase either of the borrower’s parents is a salaried employee; proof of
income i.e. salary certificate/slips & TDS certificate (Form16) of he
 Incase either of the borrower’s parents is self-employed; details of
business rack record & a copy of the audited financial statements of the
last 2 years of the borrower & co-applicant.
 Documents with respect of past academic track record of the student.
 Airline booking details, in case of foreign university education.
 Documentations Requirements – Post-Approval/Disbursal
Disbursement of the educational loan is made directly to the institution to which
the student is admitted. Hostel & mess fees are also paid likewise. Airfare is
directly paid to the airlines. The student is given certain amounts to make book
or instrument/equipment purchases on a monthly or quarterly basis. Receipts for
each payment are forwarded to the bank.
When the loan amount exceeds Rs. 1 lakh, banks usually requires a Life
Insurance Policy equal to or more than the loan amount. This is the security that
the bank takes to recover the outstanding amount in case the student is unable to
repay the loan amount.
27 T.Y.BBI
A holiday period is usually given for educational loan requirement before
he/she starts paying back the loan in EMIs. The holiday period ranges from 6
months to a year. However, if the students start working immediately on
completing the course, he does not enjoy a holiday period. Repayment stars 6
months after completion of the course or on commencement of a job, whichever
is earlier.

Interest on educational loan is charged on a simple basis during study period or
upto commencement of repayment (interest rates are as per RBI guidelines at ha
time). Study in India is 13% to 15% for the loan up to 400000. Study Abroad is
10% to 13% for the loan up to 400000.
 Fees & Charges

Fees & charges include:
1. Processing fees
2. Documentation cost
3. Pre-payment penalty
 Tax Benefits
Under section 80E of the IT Act, a deduction will be allowed in respect of
repayment of loan educational purposes, subject to the following conditions. If
you take an education loan, you can claim deduction under Section 80E of the
Income Tax Act. You will get a tax benefit on the interest you pay. Initially,
there was a limit on the tax benefit.
28 T.Y.BBI
The lesser of the two amounts would be valid for deduction
1. Total amount paid during the year (principal repaid and interest paid)
2. Rs 40,000
Now, this had been done away with. The interest you pay will be deducted from
your income; there is no limit any more. It will reduce the tax you have to pay.
No deduction, however, is now available for the principal repayment. Do
remember, repayments on your education loan are NOT covered under Section
80C. As mentioned above, they are covered under Section 80E of the Income
Tax Act.
The time period
The deduction mentioned above will only be applicable when you start repaying
the loan. These deductions are available upto eight years totally. You cannot
claim the deduction for more than eight years.
29 T.Y.BBI
RETAIL LENDING
Large credit exposures are linked to bank`s capital. Limits have to be fixed for
single exposure in relation to the capital funds. Thereby, clearly defined
exposure ceiling for a single counterparty of group of related counterparties is
required to be fixed.
Further, the loan book containing a relatively high proportion of sizeable large
credit exposure is more susceptible to potential credit risk compared to a more
widely distributed/mixed portfolio. Thus, retail exposure, with strong
dominance on local populace and having personal contact with customers
facilitates risk spreading and quality assets.
Credit portfolio of the banking business is fast changing in India. Retail lending
is becoming an important segment of bank credit. The share of credit to other
non-priority sector “personal loans” witnessed relatively a slower growth rate.
In the face of slowdown in industrial activity, banks have aggressively increased
the share of credit towards to retail lending.
The critical challenge for the banking industry is approachability and

accessibility the ability to make finance to those who need, when they need it
and in a manner that the customers want. The industry must become more
proactive and reach out to customer, rather than expecting the customer to reach
out the industry.
30 T.Y.BBI
TYPES OF CARDS ISSUED BY THE BANKS

 Cash card(ATM)
Also known as an ATM card. This has been discussed in detail earlier. A
special plastic card is used for getting currency notes from a machine known as
automated teller machine.
 Debit Cards
Debit cards allow for direct withdrawal of funds from a customer’s bank
account. The spending limit is determined by the user’s bank upon available
balance in the account of user. It is a special plastic card connected with
electromagnetic identification hat one can use to pay for things purchased
directly from his bank account. Under the system, card holders account are
immediately debited against purchase or services through the computer
network. Hence, under debit card the cardholder must have adequate balance in
his account.Debit card & smart card issuance by banks in India should be
approved by the respective bank’s board as well as by RBI. These can be issued
only for customer maintaining satisfactory accounts & for a minimum period of
six months.
31 T.Y.BBI
 Cheque cards
It is a card given to customer by the bank that he must show when he writes a
cheque, which promises that the bank will pay out the money written on the
cheque. Under check card system, the card holder is given a card & a
chequebook. He has to use the cheques, while purchase is made & the traders
gets guaranteed payment. The customer does not get free credit, he has to keep
sufficient balance in his account or the bank will provide overdraft up to a
specific limit, of course on interest payment basis.
 Charge Card
A small usually plastic card provided by an organization with which one may
buy goods from various shops, etc. The full amount owed must then be paid on
demand. In credit cards, the card holders get credit or loan for payment of
periodical bills when sufficient balance is available in their accounts. In a
charge card such credit facility is not available. The periodical bill amount is
paid off by charging it to customers account. A fee is also payable by the card
holder to the card issuing institution.
32 T.Y.BBI
 Smart Cards
With the use of credit cards, we may avail of credit facility on our purchase of
goods/services from approved sales outlets. A smart card however, enables the
cardholder to perform various other banking functions apart from credit
purchases. For examples, with smart cards, we can draw cash from ATMs, we
can verify entries in our accounts, seek information pertaining to our accounts,
etc. This is possible because the card has an integrated circuit with
microprocessor chip embedded in the card for identification purposes. The card
can also perform calculations & maintain records.
 Convenience Users
Credit card customers are typically extended an unsecured credit at least up to

30 days. Beyond the period, the bank charges interest on outstanding bills.
However, some cardholders may prefer to pay off their full dues before the free
credit period. Such cardholders are called convenience users.
33 T.Y.BBI
INFORMATION TECHNOLOGY (I.T) IN RETAIL

BANKING
The growth of information technology (IT) and its remarkable applications to

banking and financial sector has greatly facilitated the growth of retail banking
to a very large extent. When the banking sector reforms were introduced, the
public sector banks were in advantageous position because of their wide
network of physical branches in urban and rural areas, to compete with public
sector banks, private and foreign banks adopted IT as a major cost effective tool
in their expansion drive. Since the success of retail banking is measured based
on the volume of customer base.
IT has made it possible for banks to reach and serve a large number of
individual customers in the shortest possible time and also reduce the cost of
banking transactions. According to ICICI bank officials, a physical transaction
costs the bank Rs.30-50, cheque transaction Rs. 13-17, while a debit transaction
costs only Rs. 2-5.
34 T.Y.BBI
Therefore, riding on the technological wave, private and foreign banks tried to
capture the market in a big way. Private and foreign banks who were pioneer of
applying IT in banking sector have laid more stress on virtual banking when
compared to brick and mortar structure of the public sector banks. Private and
foreign banks have state-of the art websites which provides information to the
customers about the banking products and services and also help them to avail
these products and services through some easy steps
Private and foreign banks are found to encourage their customers, to move over
to virtual banking in a big way by offering and promotional schemes. These
banks discourage physical branch by charging extra amount.
In addition to websites, they have introduced ATMs, internet banking, phone

banking, mobile banking, etc. in a big way by computerizing and networking
their branches. IT has enabled the integration of ATM, internet, phone banking
and mobile banking such that banking transactions are reflected irrespective of
any convenient medium used by their customers.
The development of software industry in India has helped the cause of these
banks. Major Banks has tie-ups with software companies for developing the
requisite software.
35 T.Y.BBI
Technology provides Retail Banks with various delivery channels:
Automated Teller Machines (ATM)
The trend in banking has evolved from a cash economy to cheque economy and
thereon to the plastic card economy. One of the channels of banking services
delivery is vide the ATM or the Automated Teller Machines, whose traditional
and primary use is to dispense cash upon insertion of a plastic card and its
unique PIN or Personal Identification Number.
Current and savings account holders of a bank who hold a certain minimum
balance in their accounts (determined by each bank as per their policy) are
issued an ATM card. The card is a plastic card with a magnetic strip with the
account number of the individual. When the card is inserted into the ATM, the
machines sensing equipment identifies the account holder and asks for his/her
identification code number. This is referred to, usually, as the PIN and is issued
by the banks computers. This number is unknown to the banks staff and is
secret and unique to that individual. When the person uses the ATM and it asks
for the PIN, the cardholder identifies himself/herself by pressing the relevant
number buttons on the machine. The machine then verifies the account number
on the ATM card along with the secret code number stored in the ATM. When
the matches found, the ATM pops a menu screen, which allows the user to
transact almost all types of bank transactions.
36 T.Y.BBI
MOBILE BANKING
All over the world, mobile phones have become one of the convenient means of
carrying out banking transactions. In Korea, there are 3.3 million mobile phones
users. But in India, very few people use mobile phones even for simple banking
queries in spite of having 47 million mobile users base with nearly two million
being added every month. This was due to low level of awareness, frauds and
security problems, complex process etc. However, the various banks have
entered into strategies tie-ups with mobile companies so that customers can
avail banking services. For e.g., ICICI has signed Memorandum of
understanding (MoU) with Reliance India mobile to provide services of mobile
banking free of cost to those clients who have reliance handsets.
INTERNET BANKING
One of the channels of service delivery to a banking customer is through the

Internet. The access to account information as well as transaction is offered
through the worldwide network of computers on the Internet. Every bank has
special firewalls & its own security measures to protect the accounts from non-
authentic use from unauthorized users. Data are encoded using algorithms with
a 128-bit key or, in some cases, with a 1,024-bit encryption.
Each account holder is provided a PIN similar to that of the ATM or Phone
banking PIN. The access to the account is allowed upon a match of the account
details & PIN entered on the computer system. A higher level of security may
be reached by an electronic finger-print. The finger print is taken before & after
the transaction. Then both versions are compared. In case of any difference, the
transaction is aborted.
37 T.Y.BBI
TELE OR PHONE BANKING
Tele banking or phone banking service offered by banks to enable customers to

access their accounts for information or transactions. Similar to the ATM PIN, a
telephone PIN (T-PIN) is provided to each account holder. The customer can
call the exclusive tele-banking numbers and provide the details to identify
himself/ herself to the automated voice.
Typically, the bank account number and the T-PIN are asked for. Upon the
respective numbers matching the computerized systems the customer is given
access to his account to query or transact on his account. Though cash
withdrawal and deposit are not enabled through this service many banks offer
cash delivery or collection service to certain classes of customers.
38 T.Y.BBI
MARKETING STRATEGIES
Strategies for increasing retail banking business

 CONSTANT PRODUCT INNOVATION
It is required to match the requirements of the customer segments. The customer

database available with the banks is the best source of their demographic and
financial information and can be used by the banks for targeting certain
customer segments for new or modified product. The banks should come out
with new products in the area of securities, mutual funds and insurance.
 QUALITY SERVICE AND QUICKNESS IN DELIVERY
As most of the banks are offering retail products of similar nature, the
customers can easily switch over to the one, which offers better service at
comparatively lower cost. The quality of service that bank offer and the
experience that clients have, matter the most. Hence, to retain the customers, the
banks have to come out with competitive products satisfying the desires of the
customers at the click of a button.
39 T.Y.BBI
 INTRODUCTION OF NEW DELIVARY CHANNELS
Retail customers like to interface with their banks through their multiple
channels. Therefore, banks should try to give high quality service across all
service channels like branches, internet, ATMs, etc.
 RETAIL MARKET RESEARCH
Banks may go for detail market research, which will help them in knowing what
their competitors are offering to their client. This will enable them to have an
edge over their competitors and increase their share in retail banking pie by
offering better products and services.
 CROSS-SELLING OF PRODUCTS
Public sector banks have an added advantage of having a wide network of

branches, which gives them an opportunity to sell third-party products through
these branches.
40 T.Y.BBI
The Indian players are bullish on the Retail business and this is not totally
unfounded. There are two main reasons behind this. Firstly, it is now undeniable
that the face of the Indian consumer is changing. This is reflected in a change in
the urban household income pattern. The direct fallout of such a change will be
the consumption patterns and hence the banking habits of Indians, which will
now be skewed towards Retail products. At the same time, India compares
pretty poorly with the other economies of the world that are now becoming
comparable in terms of spending patterns with the opening up of our economy.
For instance, while the total outstanding Retail loans in Taiwan is around 41%
of GDP, the figure in India stands at less than 5%. The comparison with the
West is even more staggering. Another comparison that is natural when
comparing Retail sectors is the use of credit cards. Here also, the potential lies
in the fact that of all the consumer expenditure in India in 2001, less than 1%
was through plastic, the corresponding US figure standing at 18%.
Retail banking in India is not a new phenomenon. It has always been prevalent
in India in various forms. For the last few years it has become synonymous with
mainstream banking for many banks. The typical products offered in the Indian
retail banking segment are housing loans, consumption loans for purchase of
durables, auto loans, credit cards and educational loans. The loans are marketed
under attractive brand names to differentiate the products offered by different
banks. As the has shown that the loan values of these retail lending typically
range between Rs.20, 000 to Rs.100 lakh.
The loans are generally for duration of five to seven years with housing loans
granted for a longer duration of 15 years. In recent past retail lending has turned
out to be a key profit driver for banks with retail portfolio constituting 21.5 per
cent of total outstanding advances as on March 2004.
41 T.Y.BBI
The overall impairment of the retail loan portfolio worked out much less then
the Gross NPA ratio for the entire loan portfolio. Within the retail segment, the
housing loans had the least gross asset impairment. In fact, retailing make ample
business sense in the banking sector.
While new generation private sector banks have been able to create a niche in
this regard, the public sector banks have not lagged behind. By international
standards, however, there is still much scope for retail banking in India. After
all, retail loans constitute less than seven per cent of GDP in India vis-à-vis
about 35 per cent for other Asian economies — South Korea (55 per cent),
Taiwan (52 per cent), Malaysia (33 per cent) and Thailand (18 per cent).
As retail banking in India is still growing from modest base, there is a

likelihood that the growth numbers seem to get somewhat exaggerated. One,
thus, has to exercise caution is interpreting the growth of retail banking in India.
42 T.Y.BBI
FORMAT OF CUSTOMER SURVEY REPORT

SHRI CHINAI COLLEGE OF COMMERCE AND ECONOMICS
SURVEY ON PROJECT OF “RETAIL BANKING IN INDIA”
NAME:-
DESIGNATION:-
SIGNATURE:-
CONTACT NO:-
1. Are you aware of the term Retail banking?
o YES
o NO
2. Are you satisfied with the Retail banking services provided by your banks?
o YES
o NO
3. Which product they use in Retail Banking?
o PLASTIC CARDS
o LOANS
o OTHERS
4. According to you which bank is effective in providing Retail banking services?
o NATIONALISED BANKS
o FOREIGN BANKS
o OTHERS
5. In your opinion what are the drawbacks of Retail banking products?
o INEFFICIENT SERVICES
o FRAUDS
o LACK OF AWARENESS
6. Do you think that awareness regarding Retail banking is lacking?
o YES
o NO
COMMENT:-__________________________________________________________
PROJECT GUIDE: SURVEY CONDUCTED BY:

PROF.SHIVANI BAFLEKAR (RESHU.K.SHARMA)
T.Y.B.COM (B & I)
43 T.Y.BBI
SURVEY REPORT
Data Analysis & Interpretation
To know customer view about Retail Banking services provided by various

Banks, I have done survey of 100 people and asked them certain set of
Question.
1. When survey respondents were asked, Do they aware of the term “Retail
Banking”?
100
90
AWARENESS
80
PERCENTAGE
70
60
50
40
70%
30
20
30%
10
0
YES NO
INTERPRETATION
This bar diagram shows how many people are aware of the term “Retail
Banking”.
70% of the people are aware of the term “Retail Banking” whereas 30% of the
people don’t know the service which bank provide as “Retail Banking”.
44 T.Y.BBI
2. When survey respondent were asked, Are they satisfied with the service
provided by Banks?
100
SATISFACTION
90
80
70
PERCENTAGE
60
50
40 65%
30
20 35%
10
0
YES NO
INTERPRETATION
This bar diagram shows how many people are satisfied with the retail service
provided by Banks.
65% of the people are satisfied with the service provided by banks whereas
35% of the people are not satisfied with the service provided by banks.
45 T.Y.BBI
3. When survey respondent were asked, which product they use of Retail
Banking?
PRODUCT USED
20%
40% PLASTIC CARDS

LOANS
OTHERS
40%
INTERPRETATION
40 % people said Plastic card.
40% people said Loans.
20 % people said Others (i.e. Demat services, etc).
46 T.Y.BBI
4. When survey respondent were asked, According to them which bank is
Effective in providing Retail Banking Services?
EFFECTIVE SERVICES
30%
NATIONALISED BANKS
60% FOREIGN BANKS
OTHERS
10%
INTERPRETATION
60% people said Nationalized banks.
10% people said Foreign Banks.
30% people said Loans.
47 T.Y.BBI
5. In your opinion, what are the drawbacks of Retail Banking service?
DRAWBACKS
40% 40%
INEFFICIENT SERVICES
FRAUDS
LACK OF AWARENESS
20%
INTERPRETATION
40% people said Inefficient Services.
20% people said Frauds.
40% people said Lack of Awareness.
48 T.Y.BBI
6. Do you think that awareness regarding Retail Banking is lacking?
100 LACK OF AWARENESS

90
80
PERCENTAGE
70
60
50
40
30 60%
20 40%
10
0
YES NO
INTERPRETATION
According to this bar diagram,
60% of the populations are aware about retail banking and
40% of the people are still not aware of retail banking.
OVERALL CONCLUSION OF CUSTOMER SURVEY
Furthermore, in all these customers’ interest is of paramount importance. The

banking sector in India is demonstrating this and I do hope they would continue
to chart in this traded path.
49 T.Y.BBI
INTERVIEW
(Analysis)
For better understanding of this topic I have visited ICICI Bank, SBI (State
Bank of India) Bank, and BANK OF BARODA where I met Miss. Mayura
Vaidya (Manager), Mr. Ramesh. W. Pawar (Branch Manager), MR. J.D.
PATEL (SR. BRANCH MANAGER) Respectively. I had asked them certain
set of Question to know their views and thoughts on this segment and here I
have tried to share with you all their experience that they have shared with me.
Answers from the Respondent:
1. What are the products and services included in Retail banking?

 ICICI Bank-Saving A/c, Current A/c, Fixed deposit, Investment plan ,
Mutual fund, Insurance-General, L.I.C., Online trading A/c, ICIC Direct
facility and all types of loans.
 SBI Bank -Our products include Home loan, SBI student loan, internet
banking, various special “plus” schemes of NRI, teacher, doctor, police,
agriculturist, sainik etc and all types of accounts.
 BANK OF BARODA-Our banks provides 26 types of products. For e.g.
home, mortgage, reverse mortgage, traders, education, auto, personal loan
to doctors.
2. How your products and services differ from other banks?

 ICICI BANK-We provide quick services, online facilities, stretched
timings. Anywhere banking was also started first by us only.
 SBI BANK-“In our bank, rate of interest is on reducing balance method.
There are no hidden charges on the product provided by our bank.”
 BANK OF BARODA-We provide services as per the needs of the
customers.
50 T.Y.BBI
3. What is your primary motive behind Retail banking?

 ICICI BANK-Customers satisfaction, growth and we want to be leading
player in financial service provider.
 SBI BANK-“Obviously the main motive is profit and to give facility by
fulfilling the requirements of our clients and accountholders.”
 BANK OF BARODA-To encourage retail banking in all our branches.
4. Do you face a competition? Who are your competitors?

 ICICI BANK-Yes. Earlier we used to face competition with private
banks only but now nationalized bank has also entered in competition.
 SBI BANK-“Yes, surely we face a competition. Almost we face
competition from every bank, but our major competitor is ICICI Bank.”
 BANK OF BARODA-Yes, we face competition. All banks are our
competitors.
5. What are the marketing strategies that you use in Retail Banking?
 ICICIBANK-Marketing strategies include our own sales team,
hoardings, advertising, print media, T.V.
 SBI BANK-Actually we use various strategies among which some are

advertisement, newspaper like Times of India, local newspaper like Lok
satta etc.
 BANK OF BARODA-We mainly publish through Advertising.
6. How does recession affect the growth of your bank?

 ICICI BANK-Low investment in revenue earning product.
 SBI BANK-No effect.
 BANK OF BARODA-It has affected the total turnover of our Bank.
51 T.Y.BBI
7. How do retail banking products affect the turnover of your bank?

 ICICI BANK-Retail bank products are the main strength of the bank. For
instance KASA FLOAT which includes savings a/c, current a/c, fixed
deposit and much more.
 SBI BANK-It depends upon the area in which the branch is situated.
 BANK OF BARODA-Since retail banking form the major part of our
banking system our entire turnover depends upon the sales of retail
banking products.
8. Why do you think that your services are best as compared to other banks?
 ICICI BANK-We are pioneer in providing every services.
 SBI BANK-“Our bank follows the rules based on RBI and thus the
charges charged on the products and services are less as compared to
private banks.
 BANK OF BARODA-Because our Customers sales are increasing day
by day.
9. What are your future plans?
 ICICI BANK-To strengthen our position in market also to concentrate

more towards customer, expand the projects and so on.
 SBI BANK-“Obviously to expand the business and increase the number
of new customers.”
 BANK OF BARODA-We want to increase Retail Banking Products for
the upcoming years.
52 T.Y.BBI
10. If suppose our credit card or debit card is lost then what we should do?
 ICICI BANK-The bank will block the card and get the new card as per
the demand of the customers.
 SBI BANK-“Firstly customer should inform us on our customer care toll
free no. 1800112211 or 080-26599990 and tell the personal details to the
bank and then bank will stop the payment.”
 BANK OF BARODA-We have 24 hours customer care services.
Customer can complain us any time.
53 T.Y.BBI
CONCLUSION
There is a need of constant innovation in retail banking. In bracing for

tomorrow, a paradigm shift in bank financing through innovative products and
mechanisms involving constant up gradation and revalidation of the banks’
internal systems and processes is called for. Banks now need to use retail as a
growth trigger. This requires product development and differentiation,
innovation and business process reengineering, micro-planning, marketing,
prudent pricing, customization, technological up gradation, home / electronic /
mobile banking, cost reduction and cross selling.
While retail banking offers phenomenal opportunities for growth, the challenges
are equally daunting. How far the retail banking is able to lead growth of the
banking industry in future would depend upon the capacity building of the
banks to meet the challenges and make use of the opportunities profitably.
However, the kind of technology used and the efficiency of operations would
provide the much-needed competitive edge for success in retail banking
business.
For detail explanation and for practical knowledge I had visited ICICIBANK,
STATE BANK OF INDIA AND BANK OF BARODA where I got many
useful information of various Retail Banking products. Retail Banking forms
the major parts in functioning of every bank. Retail Banking products covers
almost major turnover of banks profit.
54 T.Y.BBI

Retail Banking in India: Introduction of Bank

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SHRI CHINAI COLLEGE OF COMM. & ECO.

RETAIL BANKING IN INDIA

RETAIL BANKING IN INDIA

ORIGIN OF RETAIL BANKING

Retail banking is not an invention or innovation in itself. In India, it has

In addition, government norms embarked priority sectors which were to be

The challenges were in the form of decline in the traditional lines of

The decade of 1990s saw the implementation of economic and financial

INTRODUCTION OF RETAIL BANKING

Understanding retail banking will help in servicing your customer better as it

The approach to retail banking products is more is more on a mass production

WHAT IS RETAIL BANKING

Retail banking is however; quite broad in nature it refers to the dealing of

 Multiple products (deposits, credit card, insurance, investments and

 DEFINITION OF RETAIL BANKING

“Retail banking refers to banking in which banking institutions execute

“Retail banking is typical mass-market banking where individual customers use

 DEFINITION OF RETAIL BANKING SERVICES

Banking services provided to individual members of the public as opposed to

OBJECTIVES OF RETAIL BANKING

SOME OF THE OBJECTIVES ARE

 Assess way to leverage and scale to support aggressive growth.

ADVANTAGES AND DISADVANTAGES OF RETAIL

Retail banking has inherent advantages offsetting certain disadvantages.

RESOURCE ASSET SIDE

1. Provides diversified asset portfolio

2. Improves standard of living

2. Marketing (Internal and External)

1) Scope for innovation:

2) Rise in per capita income

Retail banking has immense opportunities in a growing economy like India. In

1. Large disbursement of loans

2. Issue of customer privacy

RETAIL BANKING SERVICES

Categorization of Retail Bank services

Core services Facilitating services Supporting services

1.Payment  Cash  Making payment at door

2.Current  ATM card  Credit card

Core services Facilitating services Supporting services

3.Loan Product  Current account  Delivery of loan at

4.Insurance  Current account  Additional insurance

Life insurance  Time deposit members.

VARIOUS PRODUCTS OF RETAIL BANKING

Types of Home Loans

There are a variety of home loans available:

Home Purchase loans

This is basic home loan for the purchase of a new home.

Existing home improvement loans

Home construction loan

This is a loan given for the construction of a new home.

Home extension loan

Land Purchase Loans

This is loan which is provided to purchase land either for construction of a

Balance transfer loan

 Eligibility terms for home loans

 Documentations requirements – pre-approval

 Copy of the latest credit card statement.

 Monthly Reducing Balance

 Annual Reducing Balance

 Fees & Charges

 Eligibility Terms For Personal/Unsecured Loans

Loan eligibility is determined primarily by the borrower’s capacity to repay i.e.

The maximum amount of loan sanctioned is usually in the range of about